might maintain trover without tendering to the pledgee even the amount due to the factor (u).

By the statute 6 Geo. IV. c. 94 (x), commonly Factor's called the Factor's Act, it is enacted,

Act.

whose name

shipped, to

true owner,

By the 1st section, that the person, in whose Person in name goods are shipped, is to be deemed the true goods are owner thereof, so far as to entitle the consignee to be deemed a lien thereon in respect of any money or negotiable &c. security advanced by him to such person to his use, if he has no notice by the bill of lading or otherwise, at or before the advancement or receipt, that such person is not the actual and bonâ fide owner of the goods; and such person shall be taken for the purposes of the Act to have been entrusted with the goods for the purpose of consignment or of sale, unless the contrary shall be made to appear (y).

tice.

As to the question what amounts to sufficient What is no notice, within the meaning of this section, it seems that it is not necessary to show that the pledgee had positive information that he was dealing with a mere agent, but that it is sufficient if the circumstances are shown to be such that this conclusion might reasonably have been drawn. In a

(u) M'Combie v. Davies, 6 East, 538; Newsom v. Thornton, 6 East, 17; Daubigny v. Duval, 5 T. R. 604.

(r) This act was passed to alter and amend 4 Geo. IV. c. 83. (y) See Paley, Pr. & A. p. 222, (3d Ed.); Abb. Shipp. pp. 381, 382, (5th Ed.).

Factor's
Act.

Right of pledgee

tice.

case where the point arose, Lord Tenterden was
of opinion, that the pledgee would not be within
the protection of the statute, if he had even good
reason to suspect that the party pledging was not
the true owner. 66
Although there may be no evi-
dence of direct communication, yet, if the circum-
stances are such that a reasonable man and a man
of business applying his understanding to them
would know that the goods did not belong to the
broker who pledged them, the defendant is not
entitled to retain them" (*). It seems that delay
on the part of the principal in making known that
he was owner, to a pledgee who has taken the
goods without notice, cannot be construed as a
confirmation or adoption of the pledge (a), unless
it appear that the consequence of the delay has

been an alteration in the defendant's situation for
the worse, or in the plaintiff's for the better (b).

By the 2nd section of the Act, a person enwithout no- trusted with, and in possession of, a bill of lading or other document (of the species enumerated in the act), is to be deemed the true owner of the goods described therein, so far as to give validity to

(z) Evans v. Trueman, 1 M. & Rob. 10; reported also in Paley, Pr. & A. 229. See the observations of Lord Tenterden, C. J.

(a) Robertson v. Kensington, Lloyd & Welsby, Merc. Ca. 187. See 5 Man. & Ryl. 387.

(b) Lloyd & Welsby, 192, per Lord Tenterden, C. J.

Act.

any contract made by him for the sale or disposi- Factor's tion of the goods, or the deposit or pledge thereof as a security for any money or negotiable instrument, if the buyer, transferee, or pledgee has not notice, by the document or otherwise, that such person is not the actual and bonâ fide owner of the goods.

It has been decided upon this section, that the "negotiable instruments," mentioned as a security, include only such as pass by indorsement and delivery, and not East India warrants or other documents of that nature (c).

pledgee for

debt, with

By the 3rd section, any person taking goods in Right of deposit or pledge from the party in possession, pre-existing without notice that he is not the owner thereof, for out notice. a pre-existing debt, shall acquire such right, title, or interest, and no further or other than was possessed or might have been enforced by the party making the deposit or pledge.

Under this section, then, the disponee or pledgee acquires no further right than the party possessed who made the deposit or pledge (d); so that, to

(c) Taylor v. Trueman, 1 M. & Malk. 453; S. C. Lloyd & Welsby, Merc. Ca. 184; Taylor v. Kymer, 3 B. & Ad. 320. [It is singular that in the admirable abridgement of this act given in Lord Tenterden's Treatise on Shipping, and which has generally been followed with little variation, the clause in this section on which these cases are decided (viz. as a security for any money or negotiable instrument") is wholly omitted. See Leg. Exam. vol. iv. p. 339, 340.]

(d) See 3 B. & Ad. 337.

66

Factor's
Act.

Right of pledgee

enable the owner to sue for the goods in trover, a tender to the pledgee, of the amount only that was due to the factor, is necessary. And such tender is necessary only when the defendant has kept the goods in his hands, and not where he has sold them before demand (e), although the measure of damages, in the action of trover, may be only the balance after deducting the amount of the factor's claim (ƒ).

By the 5th section (g), any person may accept with notice. any goods, or any such document as aforesaid, on deposit or pledge from any factor or agent, notwithstanding he shall have notice that the party is a factor or agent; but in such case he shall acquire such right, title, or interest, and no further or other than was possessed by the factor or agent at the time of the deposit or pledge.

Upon this section it has been decided, that, to bring the case within the meaning of the Act, the transaction must be a bonâ fide deposit or pledge,

(e) Taylor v. Trueman, 1 M. & Malk. 455, 457; S. C. Lloyd & Welsby's Merc. Ca. 184.

(f) 1 M. & Malk, 456, 457.

(g) The 4th section is merely in confirmation of the common law. It provides that any person may purchase goods from, and pay the price to, an agent entrusted with the possession of the goods, or to whom they may be consigned, even with notice that he is agent, provided the party has not notice at the time that the agent is not authorized to sell or to receive the price. Vid. supra, p. 278.

Act.

transferred

and that therefore a sale, made by an agent Factor's fraudulently as against his principal, transfers no right to the purchaser (h). The pledgee acquires What right a right and interest in every respect similar to pledgee. to that possessed by the agent at the time of the deposit, whether such right was absolute or contingent. Thus, where, at the time of the pledge, the broker's claim was founded on a right to indemnity against liabilities which he was under from having given his acceptance to bills drawn by the principal, it was held, that, as the broker's right would have become absolute, in the event of the acceptances not having been taken up when due, so the pledgee's right would have become absolute on the same event(i); but as the broker's claim would have been discharged on the principal's releasing him from his liabilities, so the pledgee's right, being dependent on the same condition, was likewise discharged (k). In order to give the factor a lien transferable to the pawnee under the statute, it is necessary that the general balance of account should be in favour of the factor; (h) Thompson v. Farmer, 1 M. & Malk. 48.

(i) In Blandy v. Allan, Dan. & Lloyd's Merc. Ca. 22, Best, C. J., expressed an opinion that the pledge could transfer no right whatever, unless the factor's lien was absolute at the time. But Fletcher v. Heath seems to overrule the opinion: the right is equally transferable, though only conditional or contingent at the time, i. e. such, that subsequent circumstances may render it enforceable.

(k) Fletcher v. Heath, 7 B. & C. 517. See Dan. & Lloyd,