1 Story on Agency, § 112; Drinkwater v. Goodwin, 1 Cowp. 256; Johnston v. Usborne, 11 Ad. & El. 549.
2 Rabone v. Williams, 7 T. R. 360; George v. Clagett, 7 T. R. 359; 8. c. 2 Esp. 557; Baring v. Corrie, 2 B. & Al. 148; Turner v. Thomas, L. R. 6C. P. 610 (1871).
3 Moore v. Clementson, 2 Camp. 22; Waring v. Favenck, 1 Camp. 85; Maanss v. Henderson, 1 East, 335; Eastcott v. Milward, 7 T. R. 361. It is immaterial that the purchaser had the means of knowledge. Berries v. Imperial Bank, 43 L. J. C. P. 3 (1873).
4 Story on Agency, § 112; Drinkwater v. Goodwin, 1 Cowp. 256; Johnston v. Usborne, 11 Ad. & El. 549; Franklyn v. Lamond, 4 C. B. 637.
5 Paterson v. Gandasequi, 15 East, 62; Addison v. Gandassequi, 4 Taunt. 574; 2 Kent, Comm. 632.
6 Story on Agency, § 420, and cases cited; Taintor v. Prendergast, 3 Hill, 72; IIsley v. Merriam, 7 Cush. 242; Small v. Attwood, Younge, 407, 452; Leverick v. Meigs, 1 Cow. 645; Smith on Merc. Law, 135; Stracey v. Decy, 7 T. R. 361; George v. Clagett, 7 T. R. 359; Warner v. M'Kay, 1 M. & W. 595.
1 Parker v. Donaldson, 2 Watts & Serg. 9; Hogan v. Shorb, 24 Wend. 458; Warner v. M'Kay, 1 M. & W. 595.
2 Lisset v. Reave, 2 Atk. 394; 2 Kent, Comm. 632.
3 Story on Agency, § 423; New Castle Man. Co. v. Red River Railroad Co., 1 Rob. (La.) 145. But see contra, Kirkpatrick v. Stainer, 22 Wend. 244.
4 Hudson v. Granger, 5B.& Al. 27, 32; Story on Agency, § 408, 424; Drinkwater v. Goodwin, 1 Cowp. 256; Paley on Agency, by Lloyd, 285, 288, 365, 366.
5 Walker v. Smith, 4 Dall. 389; Laussatt v. Lippincott, 6 S. & R. 392. And see Evans v. Root, 3 Seld. 186; Day v. Crawford, 13 Ga. 508.
6 Etheridge v. Binney, 9 Pick. 272; Clark v. Van Northwick, 1 Pick. 343; West Boylston Manuf. Co. v. Searle, 15 Pick. 225; Goodenow v. Tyler, 7 Mass. 36; Clark v. Moody, 17 Mass. 145. See cases cited in the succeeding notes. Dwight v. Whitney, 15 Pick. 179; Evans v. Potter, 2 Gall. 13. In this case, which was assumpsit for breach of orders against the master of a ship, who was also consignee of an adventure of the plaintiff's, Mr. Justice Story said: "A factor is bound to ordinary diligence in relation to the property confided to him. Where his orders leave the management of the property to his discretion, he is bound only to good faith and reasonable conduct. He may lawfully do whatever the course and usage of the trade therefore, in such cases, sell upon credit, if he be justified by the usage of trade in the particular business in respect to which he is agent.1 But in a case where such is not the usage of trade he cannot sell upon credit, without an express authority.2 So, also, he cannot allow other than the usual terms of credit. Nor can he improperly hasten a sale, so as to enable him to cover his advances; 3 but he must sell at the fair market price.4 He may, however, take a negotiable note for the price, payable to himself or order, without rendering himself personally responsible, provided the note be not beyond the usual period of credit.5 And even if he should include in such note the price of goods sold on his own account, or on account of other principals, this fact alone could not, as it seems, make him personally liable.6 But if, after the usual term of credit has expired, he take a note payable to himself requires; and, indeed, unless his orders restrict him, he is bound to conform to this course of the trade. In no case can he wantonly sacrifice the property without being responsible to the shipper. If he can advantageously sell the property, and neglect so to do, he must answer in damages. But if the markets be low, or unusually crowded, if new and unexpected difficulties arise, he is not obliged to sell at all events and under every disadvantage. Neither the interests of commerce, nor the good faith due to his employer,, would countenance such a proceeding. Neither can a factor lawfully pledge, the property of his principal for his own private debts; but he may lawfully pledge it for the duties accruing thereon; or for any other purposes which the usage of trade sanctions and approves."
1 Forrestier v. Bordman, 1 Story, 43; Van Alen v. Vanderpool, 6 Johns. 69; M'Kinstry v. Pearsall, 3 Johns. 319; Robertson v. Livingston, 5 Cow. 473; Hapgood v. Batcheller, 4 Met. 573; Riley v. Wheeler, 44 Vt. 189 (1872).
2 Forrestier v. Bordman, 1 Story, 43; Greely v. Bartlett, 1 Greenl. 172; Scott v. Surman, Willes, 400; Van Alen v. Vanderpool, 6 Johns. 69; Goodenow v. Tyler, 7 Mass. 36; Burrill v. Phillips, 1 Gall. 360; Houghton v. Matthews, 3 Bos. & Pul. 489; Myers v. Entriken, 6 Watts & Serg. 44; Delafield v. Illinois, 26 Wend. 192; s. c. 8 Paige, 527.
3 Shaw v. Stone, 1 Cush. 228.
4 Bigelow v. Walker, 24 Vt. 149.
5 Goodenow v. Tyler, 7 Mass. 36; Greely v. Bartlett, 1 Greenl. 175; Dwight v. Whitney, 15 Pick. 179; Goldthwaite v. M'Whorter, 5 Stew. & Port. 289.
6 Hapgood v. Batcheller, 4 Met. 573; Corlies v. Cumming, 6 Cow. 181; Hamilton v. Cunningham, 2 Brock. 351. But see Brown v. Arrott, 6 Watts & Serg. 402; Symington v. M'Lin, 1 Dev. & Bat. 291. vol. I. 25 at a future day, he renders himself personally liable.1 But, where he complies with the usage, he is not liable, although injury ensue. Thus, where a factor, with orders to sell for cash, sold and delivered the goods, but, according to the usage, did not send in his bill until the next day, before which time the purchaser had become insane and did not pay it, it was held that the sale was binding on the principal.2
§ 439. Where a factor, being duly authorized to sell on credit, takes a promissory note payable to himself, he takes it in trust for his principal, and subject to his order, and he would not be personally liable thereon, in the event of the insolvency of the purchaser, before payment.3 If, in such case, the factor had guaranteed the sale, the principal would, nevertheless, be entitled to claim the note, or to give notice to the purchaser not to pay it to the factor. So, also, if the factor, in such a case, should fail or die, the note would not pass to his assignees or representatives, but would enure to the benefit of the principal; and if his assignees or representatives should receive payment thereof, or should refuse to surrender it to the principal, they would be personally liable to him.4 In such a case, however, if the party purchasing from the factor did so without knowledge of the principal, he would be discharged by payment to the administrators or representatives of the factor.5 The note would, however, be subject, as we shall see, to the lien of the factor for his commission and expenses.