TOME XXIV

“ whether the name of the principal be known or not. The “ principal is not liable on such contract to the third parties, ‘ unless it is proved that the credit was given to both prin- “ cipal and factor, or to the principal alone,” as also by article 1727, viz. : ‘“ The mandator is bound in favor of third persons “ for all the acts of his mandatory, done in execution and “ within the power of the mandate, except in the case provid- “ ed for in article 1738 of this title, and the cases wherein by ‘ agreement or the usage of trade the niandator alone is “ bound. The mandator is also answerable for acts which ex- “ ceed such power, if he have ratitied them either expressly ‘ or tacitly.” So that our law looks upon the factor for à foreign principal as the real contractor, and this clearly is the interpretation to be placed on article 1738. The tirst part of the article imposes a general liability on such factor; the second portion, without discharging such factor from liability in all cases, merely imposes upon the foreign principal a concurrent liability With his factor in certain cases ; in fact the positions of a foreign factor and his principal are reversel quoad third parties ; from the position of a domestic principal and factor, and it is only in cases of special agreement (under article 1727) that the factor for à foreign principal can be discharged from his responsibility. Bearing i in mind that the foreign “factor in that case : ‘actually contracted in his princi- “ pals nume,” let us return to the case of Æirkpatrick vs Stainer, above cited. Plaintiff there took a writ of error, and WALWORTH delivered his opinion in favor of the reversal of the judgment, holding that defendant was personally liable as à foreign factor. VERPLANK, senator, delivered the judyment confirming that appealed from, but on the sole ground taken by NELSON, C.- J., that no usage to the contrary had been proved or existed in such form as to force recognition from the judgcs. EF said : “ Such a mercantile usage may “ naturally grow up here, either in the general course of trade “or in any particular branch of distant commerce ; and “ whenever it becomes so known or whenever it is proved to “exist, it should certainly raise the saine presumption with “us as in England.” Justice STORY, in his work on Agency ($ 268), maintains in the clearest manner the doctrine of WALWORTH in the foregoing case. The Supreme Court of Louisiana has adopted the same rule. The Newcastle ue facturing Company against The Red River Railroad Co. Rob. Louisiana Rep, 145. In Stainer vs P ‘endergast, 3 el CoWEN, Judge, said : “That the usual and decisive indication “ of an exclusive credit is, where the creditor knows there is “a foreign principal, but makes his charges in account “ against the agent.” Reversing the order of things as is re-

not. The rd parties, both prinso by article ird persons cution and ase providwherein by »r alone is s which exr expressly »r for à for-early is the tirst part of factor; the om liability cipal a conin fact the re reversed tie principal ment (under ipal can be ind that the his princikputrick vs of error, and » reversal of nally liable d the judgsole ground ontrary had recognition » usage May urse of tri ade hmerce ; and is proved to mption with k on Agency doctrine of me Court of castle ne ilroad Co.

rgast, 3 A ve indication ows there is in account ings as 18 re-

quired by our law, this dictum would show that, in order to charge the principal, the charge in account must be against him, as provided by art. 1738. Vide Russell, on Factors, pp. 248, 288, 289; Thomson vs Davenport, 9 B. & C., 78: Calder vs Dovell, 6 Law Repts. C., p. 486; Gonzales vs Sluden, B. N. P., 130; 2 Livermore, P. & A., p. 249; ps on Agency, $ 268 and n. 1, $ 448, & 160 a; Dunlap’s Paley, 4 Aw. edn,., p. 248, no 5. One of the few vasus perfectlv similar to that of a foreirn factor is that of an insurance broker in England. There, according to the ordinury course of trade in insurance cases, the insurance broker is held to be exclusively liable to the underwriter for all premiums on policies which he effects for him. In these instances, therefore, the usage of trade will always fix the liability of the factor or broker, unless there be evidence to rebut the presumption arising from such usage, namely, that it was to him that the credit was exelusively given ; and accordingly in the absence of such evidence he will be regarded as the onl: person who is liable on the contract. Power vs Butcher, 10 B. & C., 329. 340: Scot vs Zrving 1 8. & Ad. 605, 612, and note; Dalzell vs Mair, 1 Camp., 534; Russell, on Factors, p. 289.

Ramsay, J., dissentiens : This case was an action by respondent against appellants, described as “ brokers, factors, and commission merchants,” for the non-fulfilment of a contract, entered into by them with respondent, for the sale of 2,000 barrels of flour for account of Geo. Cowan & Co. of Chicago. The action is brought under art. 1738 C. C. In the memorandum of agreement addressed to respondent and signed by appellants, the latter take the title of “ commission “agents.” This is not the term used by the law. Had appellants styled themselves “ factors,” it is probable that the liability would not have been contested. We must, therefore, enquire whether it is synonymous, or whether, in fact, these commission agents did the work of factors. First then, we must ask, what is a factor ? In England it would seem to be understwod that à factor is one who has possession of the goods, or is consignee, and, in this, he differs from à broker : Russell, on Brokers and Factors, p. 4, and the English authorities cited by respondents in their factum. The word “ factor,” in art. 1738, does not seem to have been used in this sense, for art. 1736 defines “factor or commission merchant” as “an agent who is employed to buy or sell goods “ for another, either .1 his own name or in the name of his ‘ principal, for which he receives à compensation commonly “ called a commission” The commission merchant and the

factor are assimiluted, but there is not a word about the fuctor being in possession of the goods or the consignee, and the

En.

term “commission agent” describes exactly the quality of a factor or commission merchant within the meaning of art. 1738. Again in art. 1739 persons entrusted with the possession of goods, or to whom goods have been consigned, are styled “ ‘agents ” simply. Had the nomenclature insisted upon by appellants been strictly followed in the code, these agents should have been called factors, and so also should the “term factors have been substituted for the term “agents” in art, 1740. Lam, therefore, ready to admit the alternative submitted by appellants, namely, that “every agent whose principal is resident in another country is personally liable to third persons, with whom he contracts,” understanding, of course, by ‘every agent” “every commercial agent,” according to the rubric of chapter fifth, who buys or sells goods for another. I come more readily to this conclusion, because I find that the rule laid down in art. 1738 is not based on the idea of the agent being in the possession of the goods or the consignee (1e. factor, according to the English authorities), but on the presumption that where the principal is a foreigner, credit is not given to him but to the agent, whether the name of the agent is disclosed or not. The general rule, of course, is that where the agent discloses the name of the principal he is not personally bound, and the rule we have just cited, where the principal is a foreigner, is, therefore, an exception, properly speaking, to the general principle of agency. In Buller’s N. P., p. 120, where Sladen and Gonzales is quoted, the author says “ a factors sale does by the general rule of “law create a contract between the owner and the buyer. The exception of art. 1738 is not the only one to the general rule. Emerigon says: “In my treatise on Insurance, I have “ observed that, by the custom of merchants, every merchant “ who effects an insurance or who subscribes à policy, on “ freights à ship, is personally bound to fulfil his contract “ although in the instrument it be expressly said to be done “ for account of another.” Maritime Loans, 116. See also 77. des Assurances, ch. 5, sections, 3, 4 and 5. Although the exception is applied to factors, it does not seem to be confined to them: — Buller’s Nisi P., p. 130; Russell, on Brokers and Factors, p. 288. It is the recognized liability of commercial agents of all classes, by whatever name they are called, factors, commission agents, commission merchants, or agents only, who buy and sell goods for another, In DeGuillon and L'Aigle, EYRE, C.-J. said: “TI am not aware that “ [ have ever concurred in any decision, in which it has “been ‘held that if a person describing himself as agent “for another residing abroud, enter into a contract here, he “is not personally liable.” 1 Bos. & P., 368. In Thompson

quality of a ning of art.

the possesasigned, are isisted upon hese agents ld the term nts” in art.

ve submitse principal ble to third r, Of course, ccording to ods for ancause I find on the idea or the conorities), but a foreigner, er the name e, of course, he principal e just cited, n exception, agency. In »8 is quoted, nerul rule of the buyer.” the general rance, I have ry merchant a policy, or his contract 1 to be done See also T7.

ugh the ex- » be confined Brokers and commercial e called, facjs, Or agents n DeGuillon aware that which it has elf as agent ract here, he n Thompson

DE LA PROVINCE DE QUÉBEC. 501 vs Duvenport (1829), Lord TENTERDEN said : “There may be another case, and that is where à british merchant is buying for a foreigner. According to the universal anderstanding of merchants and of all persons in trade, the credit is ‘ then considered to be given to the british buyer, and not to the foreigner.” And BAILEY, J. said : “ There may be à course : Of trade by which the seller will be confined to the agent who is buying, and not be at liberty at all to look to the principal. Generally speaking, that is the case when an agent here buys for x house abroad.” 9 B. & C., 78. In Smyth vs Anderson (1849), MAULE, J., said: “ It is well “known that in ordinary cases, where à merchant resident “abroad buys goods here through an agent, the seller con- “tracts with the agent, and there is no contract or privity “ between him and the foreign principal” 7 C. B,21. In Patterson vs Ayre (1853), JERVIS, C..-J., held the same docdrine, 13 C. B., 353. And also in Mahoney & Kekule, 14 C. B. 398. In Smith's Mercantile Law the doctrine is thus laid down: “ Where à british agent contracts for à foreign prin- “ cipal, the british agent is responsible.” 210. Story says : ‘“ In “ such cases (of foreign principals) the ordinary presumption “is that credit is given to the agents or factors.” Agency K 268. And so also in $ 290 and $ 400. “ Factors, who are “agents of merchants residing abroad, are, for the same rea- “ son, gencrally liable in their own persons, for the credit is “ presumed to be given to them.” Dunlap's Paley’s Agency, K 373. Russell, on Brokers and Factors, uses these terms indiscriminately in speaking of the liability when the principal is a foreigner, 288. It is quite possible that to the use of the word “factor ” in Russell and in Buller we are indebted for its appeurance in art. 1738. But it is urged that granting the rule of art. 1738 in its fullest extent, appellants had limitted their liahility, («) by taking the quality of commission agents ; (b) by making the contract in writing; (c) by its whole tenor : and (d) by plaintiff having entered into negotiations with à partner of the Chicago firm. With regard to the first of these reasons, I think it is sufficiently clear from what has preceded, that it was not important whether appellants signed as “factors,” for that term in art. 1738 is synouvymous to “agent” or “commission agent;” but it would scem that appellants mean more than taking one title for another, and that if the agent signs as “ agent” or even “ factor.” he limits his responsibility. I gather this from the citation of the cases of Mahoney & Kekule (14 C. B., 390 ; 25 L. & E., 278), and Wilson vs Cooke (37 L. & E.). But this doctrine is totally opposed to all the authorities, and it is not a necessary inference from the two cases last mentioned. If in

Len pr

any case an agent is personally liable, whether he discloses the principal or not, it cannot signify whether he reiterates the fact after his signature that he is an agent. Story, at the S 268, already quoted, says : “agents or factors, acting for © merchants resident in a foreign country, are held person- “ ally liable upon all contracts made by them ; and this with- “out any distinction, whether they describe themselves in “ the contract as agents or not.” This passage also answers it appears to me, the second objection urged by appellants, and indeed I find no authority going further than this, that the presumption that credit was given to the agent of the foreign principal may be rebutted by the terms of the written instrument. This is all that Story says at $ 268a, and it is à proposition which no one will call in question, more than they will the doctrine that if the contract shows the credit was given to the agent and not to the principal, the agent will be bound whether it be within the exceptional rule of art. 1738 or not. And this is all appellants can gather from Mahoney & Kekule, Wilson vs Cooke, and Wilson vs Zuleta (14 C. B, 405) so far as I can see. ‘“ The contract of an agent who “binds himself in his own name ïis valid against him “ aithough he designates his quality,” says Emerigon, on Maritime Loans, and adopting the language of the C. de Admin., Tut. L. 15, he adds, “ Sè subscripsisti quasi fidejussor, conveniri potes” In the other words of the contract I can see no limitation of the liability. “We, Crane & Baird,

‘ commission agents, have this day sold you,” says the contract. It is true they say for account of Geo. Cowan & Co. of Chicago: but it is precisely the case art. 1738 is meant to provide for. If no name were disclosed it would not signify whether the principal were foreign or home. I don't know that it is very important, but the payment was to be to Crane & Baird; and the allusion to the Chicago draft was only to cover à disbursement which appellants would have to make. Had respondent been obliged to remit to Cowan & Cv., there would not have been any need of ulluding to the bank commission at all. As to the negotiation with the partner of the tirm of Cowan & Co. that coule 1 have had no effect but to bind Cowan & Co. as well as Crane & Buird, under the second provision of art. 1738. But really the evidence is, if anything, against appellants. Respondent found it his interest to deal with appellants, to whom he was referred by the purtner, with whom all negotiations ceased immediately. I am, therefore, of opinion “that not only is the action rightly brought against appellants, but that, under the evidence, no action would lie by Nolan against Cowan & Co., and the appeal should therefore be dismissed.

e discloses reiterates ory, at the acting for Id personthis withnselves in answers it Ilants, and s, that the the foreign ten instruit is à prothan they credit was ent will be À art. 1738

Mahoney , (14 C. B, agent who ainst him erigon, on the C. de st fidejuscontract I e & Baird, ys the conn & Cv. of s meant to not signify lon’t know be to Crane vas only to eto make.

y Cv., there bank com- ‘tner of the ffect but to der the see is, if anyinterest to y the party. I am, ion rightly vidence, no nd the ap-

Since arriving at this conclusion my attention has been called to the case of Thwuites vs Coulthurst et al., decided in the Court of Review at Quebec, just a year ago. The court, composed of Ch.-J. MEREDITH, CASAULT and TESSIER, Jd., expressed an opinion which appears to me to support the view adopted by me in the present case (1).

SANBORN, J.: In this province our code has settled, or sought to establish, as positive law, a principle with reference to factors, which in the commercial law of France and England has only been in force as a usage of trade, Art. 1736 C. C. defines what a factor is. Art. 1738 declares, as a rule, “that a factor whose principal resides in another country is personally liable to third parties with whom he contracts, whether the principal be known or not. The principal is not liable on such contracts to third parties, unless it is proved that the credit was given to both principal and factor, or to the principal alone” Art. 1775 affirms the general principle, that the mandatory is not liable to third persons on contracts made within the bounds of his mandate, except in the case of factors spec:fied in art. 1738. It is quite apparent, then, that art. 1738 applies to à certain class of agents and not to all agents. Î regard these articles as enunciative of rules of law recognized by decisions in commercial cases in England and in the modern law of France. While art. 1735 and 1736 give general definitions of what is a broker and what is a factor, itis evident that these detinitions are not to be interpreted literally as establishing a cast iron rule, but as general comprehensive definitions subject to interpretation and extension, according to the ordinary distinctions applied to these two classes of agents. This is in fact what the codifiers say in their report, and I consider the distinctions as based upon usage, as founded in reason, and as the natural and equitable development of the law of principal and agent. Troplong, “ Mandat,” no 363, protests against the rules founded upon the usages of trade being considered adversed to the civil law, and asserts that the exceptions claimed by some authors to be founded upon the usages of trade are but development of principles of law applicable to the mandatory’s contract. The reason why an agent is held liable when the principal is

(1) Le marchand, dans Québec, qui agit comme agent d’un mandant dans Ontario, et qui, en cette qualité, recoit des marchandises sujettes au fret et à l'indemnité pour surestaries, est personnellement responsable de telles charges, quoique le maître du navire sût que le marchand, qui recevait ainsi des marchandises, agissait à titre d'agent. Le marchand ne serait pas responsable s’il avait agi comme agent d'un mandant de sa province, (/l'hiwaites v. Coulthurst et al, C. S. R., Québec, janvier 1874, MEREDtTH, J. en C., CasauLr, J., TESSIER, J., confirmant le jugement de C, $S., Québec, 3 KR. J. Q., 104, et 1 L. N., 173 et 176).

unknown, or when he fails to disclose his quality of agent, is that the credit is given to him and not to his principal. He is, in fact, as respects the party with whom he contracts, a real principal. The rule with respect to à factor acting for a foreign principal is founded upon a similar reason. Credit is supposecl to be given to the agent having the disposal of the matter about which he contracts, rather than to x person inaccessible or difficult to be reached. It depends entirely upon the intention of the r parties contracting, and the powers and capacity of the agent are important elements to be considered. To render a mere broker, who acts as a middle man between the contracting parties, personally liable apon the contract made on account of a foreign principal, would be contrary to commercial usages and as, T understand it, contrary to law. The reason why the factor is held responsible in such case is,

becar : ‘ : is supposed to have the means of protecting himse'f. eng, Mandat,” no 67, speaking of Courtiers and

Connssivinaires, says : “Ils diffèrent l’un de l’autre en ce que “ le comm'ssionnaire n’a de mandat que pour tel acte isolé et “jnussager (pufa, pour acheter tant de balles de coton), et que ik ‘ le nant : exp. aussitôt que l'acte est accompli. Le préposé, ‘au contraire, est revêtu d'une délégation qui embrasse un ‘trait de temps et une série d'actes successifs, et de là il suit “ qu'ilest attaché au commerce du patron.” Story, on Agency, no 33, says: “A factor differs from a broker in some impor- “tant particulars. À factor may buy and seli in his own “ name as well as in the name of his principal. A factor is “entrusted with the possession, management, control and dis- “ posal of the goods to be bought or sold, and has à special “ property in them and lien upon them. A broker, on the “ contrary, usually has no such possession, management, con- “ trol or disposal of the goods, and consequently has no such “ special pronerty or lien” In a note under this article, it is remarked : “The character of factor and broker is frequently ‘ combined, the broker having possession of what he is em. ‘ ployed to sell, or being empowered to obtain possession of ‘what he is employed to purchase. Properly speaking, in “these cases, he is «a fuctor.” Chief-Justice ABBOTT, in the case of Baring et al. vs Corrie et al., 2 Barn. & Al, 137, remarks : “ A factor is a person to whom goods are consigned for sale “by a merchant residing abroad or at a distance from the “ place of sale, and he usually sells in his own name without “ disclosing that of his principal. The latter therefore with ‘“ full knowledge of these circumstances trusts him with the ‘ possession of the goods, and gives him aüthority to sell in “his own name. But the broker is in a different position, he “is not entrusted with the possession of the goods, and he

of agent, is cipal. He contracts, à acting for à Credit is osal of the à person initirely upon powers and » considered.

an between he contract contrary to rary to law.

such case is, tecting himourtiers and tre en ce que acte isolé et oton), et que | Le préposé, embrasse un t de Ià il suit r, on Agency, some impor- \ in his own A factor is ntrol and dishas à special roker, on the igement, con- ; has no such s article, 1t1s is frequently hat he is em.

possession of speaking, 1n rr, in the case 137, remarks :

gned for sale nce from the name without therefore with him with the rity to sell in nt position, he goods, and he

“ ought not to sell them in his own name.” In this case the distinction was clearly recognized in a decision of Lord ELLENBOROUGH, and confirmed by the judges in banco on a case reserved, wherein Coles Brothers, who were brokers and merchants as well, gave the following sale note to their principals ôn the day of the transaction. ‘“Sold for account of “ Baring Brothers & Co. to W. & E. Corrie per active N. L. “R., 51, 160-51 hhds. Surinam Sugar at 855.” Coles & Co. did not disclose their principal to Corrie & Co. but delivered them the following: “ Sold Corrie & Co. per active N. L. R. 51, 100-50 hogshead Surinam Sugar at 85s., june 27th 1815.” Cols & Co. were sworn brokers, and kept a book in which they entered à memorandum of every contract made by them äs such brokers, and à memorandum of this sale was thus entered : “ Bought of Baring Brothers & Co. per active N. L. R. 51, 100-50 hogshead Surinam Sugar at 855.” In the course of business, as merchants, Coles & Co. became indebted to Corrie & Co. and Coles & Co. went into insolvency before this debt was liquidated. Baring Brothers & Co. sue Corrie & Co. for the price of the sugar. They plead a set-off by their claim against Coles & Co. contending that as Coles & Co. did not disciose their principal they had a right to consider the contract as between them and Corrie & Co. It was held by all the judges that Corrie & Co. had means of ascertaining by reference to the record that it was a broker’s transaction, and they were condemned to pay the principal, Baring Brothers. This decision affirms this, which I think good law, that if an party contracts with a broker, knowing or having means of knowing that he is a broker, and who is his principal, the broker is not bound but his principal. Is then the contract of Crane & Baird a broker's contract or ax factors contract ? This is the real question to be determined here. Crane & Baird are proved to have been brokers and carrying on an extensive business as such, and as having done so for some years. In the contract they do not act as principals, but sell ‘for account of Messrs Cowan & Co. of Chicago.” They had not the flour in their possession or under their control, and had no means of protecting themselves against the bad faith of their principals. If condemned, they would be condemned for non-fultilment of an agreement, which they had no power to carry out. They undertook this and no more, that they were the authorized brokers of Cowan & Co. and acted as middle men to complete à contract between Cowan & Co. and Nolan. The other terms of the contract indicate that it was between Cowan & Co. and Nolan. The price w:s to be made good at Chicago, as if cash were paid on delivery to the carrier, for Nolan was to pay commission on Chicago

draft and interest on price from date of bill of lading. The flour was sent in bond, and the price was of flour in bond. Nolan must get it out of bond, and pay customs dues, if any. Had it been a factors’s contract, these terms would be very unlikely. He, having possession and control of the flour here, would have delivered here at à price certain, covering all these charges. Crane & Baird sign as “ commission agents.” This is consistent with either the contract of a broker or a factor, but taken in connection with the terms of the contract and the fact proved by Nolan himself, that he had spoken to Cowan, one of the firm of Cowan & Co. about purchase of flour just before this purchase was made, and the notorious fact that Crane & No'an were brokers, I think this is a broker’s and not à factor’s contract. This, according to my understanding of the purport of this contract and the proof aliunde, is “not inconsistent with Justice Srorv’s ue ment, that the making of a contract by an agent acting for foreign principal is a presumption that the agent is linble. He says it is a matter of intention to be gathered from the contract and proof, but the ordinary presumption in favor of an agents not binding himself, when he discloses his principal, is reversed when the principal is a foreigner. His authority is not to this extent accepted in recent American decisions, though he adheres to it himself. In the case of Bray vs Kettle, 1 Allen, 80, decided in 1869, Chief-Justice BIGELOW, remarking upon the rule enunciated by STORY, that agents, acting for merchants residing in a foreign country, are held per sonally liable on all contracts made by them for their employers, and this, without any distinction, whether they describe themselves as agents in the contract or not, said : “ We are inclined to think that à careful examination of the cas2s, which are cited in support of this supposed rule, wili show that the statement is altogether too broad and comprehensive. Certain it is that, if it was ever received as a correct expression of the law, it has been essentially modi- ‘fied by the more recently adjudged cases. It doubtless had its origin in à custom or usage of trade existing in England, by which the domestic factor or agent was deemed to be the contracting party to whom credit was exclusively g ven; and it was confined to cases where the claim against the agent was for goods sold, and was not extended to written instruments. But it is going quite too far to say that ‘this usage or custom is so engrafted into the common law, ‘as to become à fixed and established rule, creating a pre- ‘ samption, in all cases, that the agent is exclusively liable to the entire exoneration of his employer. The more reasonuble and correct doctrine is that, when gools are sold to a

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Id be very flour here, overing all on agents,” roker or a f the conat he had about purle, and the think this cording to ++ and the )RY's statecting for a t is liable,

from the u favor of his princiis author:rican deciof Bray vs

BIGELOW, at agents, rare held : their emther they not, said :

ion of the l rule, wili and comeived as à ally modibtless had g in Ensdeemed to xclusively im against ed to writo say that nmon law, ing a prey liable to re r'eAsOone sold to a

“ domestic agent, or x contract is made by him, the fact that

‘he acts for a foreign principal is evidence only that the “agent and not the principal is liable. If, by the language of “the contract, the agent, and not the principal, is bound, “ such must be its construction; and on the other hand, if it “ cleurly binds the principal and is in form n contract with “him only, the agent must be exonerated without regard to “ the fact that the princiapal is resident in a foreign country.” The ground thus taken in this case is not at variance with the decision, at Quebec, in the case of Thwaites vs Coulthurst, because all the reasoning as applied to that case is based upou the established fact that defendants in that case were factors of the Brockville Gus Company. The coal, respecting which demarrage was claimed, had been delivered to them, and they had the control of it. The only thing to observe is that, in the reported remarks of Chief-Justice MEREDITH, he makes no dist:uction between factors and other agents, which the code clearly makes. I infer, however, that he was speaking of that class of agents which that particular case had reference to. Hal not the code reduced the law to a certainty in the articles cited, and adopted apparently the rules of modern commercial usages of France and England, I should have considerable difficulty in applying here these english and american decisions based on usage. I do not find such a usage recognized by Pothier with re-pect to ordinary mercantile transactions, and he has not been silent on the sub-

ject. (Obligutions, 447). He mentions cues where à person is

entrusted with à commercial house or the command of a vessel, or to farm the King's revenue : the contracts he makes for his principal are binding upon the agent primarily and secondarily upon the principal, the reason given for this is that the employer is considered as having consented beforehand, by the commission which he has given, to all the engagements of the manager in the business. As between the parties contracting the manager Was principal. In no. 448 he says: “ Pour qu'il y a lieu à cette obligation accessoire du “ commettant, il faut que le préposé nit contracté en son “ propre nom, quoique pour les affaires du commettant ; mais ‘ lorsqu'il contracte dans les qualités de facteur ou de fondé “ de procuration de son commettant, ce n'est pas lui qui con- ‘ tracte, c'est son -commettant qui contracte par son minis- “tère.” Emerigon is cited, but Emerigon will be found to sustain the same course of reasoning as Pothier. The cases where the agent is primarily bound will be found to be such as are in their nature contracts in substance by the agent, rather than by the principal, although in the name of the principal. Tome 2, Assurance, C.4, 5,12, p. 465: “ En règle géné-

‘“ rale, le commissionnaire qui promet, qui stipule, qui agit en sa qualité de préposé, ne s'oblige pas en son nom propre: il est simple ministère et exécuteur, Il est tenu à rien de plus qu'exhiber son mandat: mais le commissionnaire qui contracte en son nom s'oblige sans distinction vis-à-vis du tiers avec qui il contracte, parce qu'on ignore sa qualité, et qu'il “est censé plutôt agir pour soi que pour autrui. Poliès meo “nomine quèm pro ao.” Emerigon mentions, in his first volume, some cases where the agent is held liable in preterence to a foreign principal (page 138). A commander of à vessel contracts with à comimnission agent to bring freight from Nice. He goes for it and is refused. He sues the commission agent, who pleads that he contracted for his correspondent in Turin. The agent is held liable. This is evidently a contract where credit was given to and action taken on the faith of the agent. The saine is true of contracts of insurance agents for foreign companies. It will be found that under the old law of France, cases were not decided so much upon usage, as by an attempt to apply the law of mandat to individual cases, according to the facts as they appeared. I tind it stated in Delamarre et Poitevin, no. 18, that the old law does not detine the duties and obligations of commissionnavires, and that the usages were almost as numerous as there

were towns, and the decisions were conflicting and unreliable.

The codifiers, in rendering that class of commercial agents, known as factors contr acting for foreign principals presumptively liable personally for the execution of such contracts, have brought our law into harmony with modern commercial usages. I think, in this case, that the contract and the circumstances attending it, and the proof that Crane & Nolan were brokers, show that they were acting as brokers and not as factors ; and, disclosing their principals and purporting to act for them, they incurred no personal liability. Conse-

quently, I woulil reverse the judgment and dismiss the

action.

DorioN, Ch.-J.: On the 17th of december 1872, appellants were condemned to pay respondent $1,600 for the non-fuitilment of a contract. In the declaration appellants are described as doing business at Montreal, as “brokers, factors, commission merchants and partners” By a tirst count it is alleged that appellants, “acting as and being the factors of George Cowan & Co. of the city of Chicago, sold to respondents two thousand barrels of flour, as per Factor’s note ; that respondent accepted the contract, which Geo. Cowan & Co. and appellants failed to fultil. In x second count, the contract note is’set out verbatim, and the contract alleged to have been with appellants personally. The conclusions are for $2,500

dan whi acte ble tior con:

laid whc aut] fact 0. ( be

sale city a fc sibl ” co “at “th ‘sa ° OI ‘bc “ ot ver’ and nan app in :

bro the fact call ing any art.

had buy En

sell

‘pro

fact the Wol wid à J cha terr

qui agit en

propre ; il rien de plus ie qui convis du tiers lité, et qu'il Poti es mtco in his first ein prefernander of à ing freight es the comhis corresis evidently iken on the jf insurance t under the much upon dat to indired. Itind he old law DHUINASSTONous às there |unreliable.

cial agents, JS presumph contracts, n commerict and the ne & Nolan ers and not rporting to by. Conse-

ismiss the

, appellants

non-fuifilre described TS, COMNM'St is alleged s of George ndents two hat respon- Jo. and apnmtract note

have been for $2,500

damages. Appellants met this demand by several pleas, in which they contend that, in the alleged contract, they only acted as brokers of Geo, Cowan & Co. and are not responsible for any breuch of it. This contestation raises a nice question, as to the responsibility of commercial agents, and of considerable interest to business men. The general rule, as laid down in art. 1715 of the Civil Code, is that the agent who acts in the name of his principal, within the scope of his authority, incurs no personal ?iponsibility unless he be a factor whose principal resides in a foreign country (art. 1738 C. C.), or unless he be the master of x ship. The question to be determined by this court is whether appellants made the sale as factors or as brokers. If they acted in the first capacity, they would be responsible, as their principals resided in a foreign country ; if in the second they would not be responsible. According to art. 1736 of the Civil Code: “ A factor or ‘commission merchant is an agent who is employed to buy “ and sell goods for another, either in his own name or in “the name of his principal, for which he receives à compen- ‘sation called a commission : ” and “ A broker (art. 1735) is “ one who exercises the trade and calling of negociating “ between parties the business of buying and selling or any other lawful transactions.” These articles do not convey à verydistincet idea of the difference which exists batween a factor and a broker. By striking out the words, “either in his own name or,” inthe first article, we have a definition equally applicable to a factor and to a broker, so that a factor acting in the name of his principal would be nothing else than a broker, if that definition were correct. In the same manner, the detinition of a broker in art. 1735 would also apply to a factor or commission-merchant who exercises the trade and calling of negociation between parties, the business of ue ing and selling. The concluding words in this last article, ‘ any other lawful transactions,” which are not to be fond à in art. 1786, would seem to indicate that the authors of the code had intended to restrict the functions of a factor to those of buying ând selling only. No such restriction exists either in England or in France, where the factor cannot only buy and sell for his principal, but has the whole management of the

‘property or business entrusted to him, 60 that he can, as such

factor, contract for the insurance, storage and conveyance of the goods of his principal, and he can also pledge them. The word facteur, used in the french version, has even a much wider signification, for the cashier of a bank, the manager of a joint stock company, or of a mercantile house, having charge of the business of their principals in their absence, are termed facteurs in France, although they would hardly come

within the meaning of the english word fuctor (1). The commissioners who prepared the code say in their sixth report, pp. 13 and 14, that “the rules contained in art. 29 and “(1736 and 1738 of the C. C.) admit of no difficulty ; that “the authorities in support of them are derived from the ‘english books and the modern french law, and that there “ can be no doubt that they are consistent with the law und ‘usage among us” Such being the case, we huve to look for the exact meaning of the words factor and broker in the works quoted by the commissioners themselves. Smith, Mercantile Law, p. 95, says : “There are two extensive classes of “agents, viz., factors who are entrusted with the possession “as well asthe disposal of property, and brokers who «re ‘employed to contract about it, without being put in posses- “sion” Bell, in his Comm. 5 ed. vol. 1, p. 259, also says: A factor has the lemporary possession of the goods.” &e.; again, at p. 477, the same author says: “ A factor is distin- ‘“ guished from a broker by being entrusted with the posses- “sion and apparent ownership, as well as with the manage- “ ment and disposal of the property of the principal. Brokers “are employed merely in the negociation of contracts rela- “tive to property, with the custody of which they have no “ concern, p. 478. “The character of factor and broker is “ frequently combined, the broker having possession of what “he is employed to sell, or being empowered to obtain pos- ‘“ session of what he is employed to purchase. But, properly fe speal ing, in these cases he is «a factor.” Paley, on Agency, p. 12, says: “Of mercantile agents, some are entrusted with the “ possession, as well as the disposal and management of the ‘“ property ; these are usually denominated factors. Others “are engaged merely in the negociation of contracts relat- “ing to property, with the custody of which they have no “ concern.” Baring et al. vs Corrie, 2 Barn. & Ald., 137 ; Obs. by Justice Holroyd, and Story, on Agency, pp. 28 to 35. The same distinction is made by the french authors between Coimissionnaires and Courtiers. DeLamarre et Poitevin, pp. 40, 41 and 58. The possession or control of the gooûs of the principal by the fuctor seems to be what distinguishes him from a broker. This distinction is the real foundation of the

exceptional liability which attaches to a factor when deuling*

for à foreign principal. The broker is only subject to the same liubility as other mercantile agents; that is, he incurs no personal liability, if he does not exceed his instructions. The factor, on the contrary, acting for a principal residing

(1) The word commissionnaire would have been a better translation of the word factor, : Delamarre & Poitevin, vol. 2, pp. 40, 41 and 58.

, The comxth report, 29 and 31 culty ; that d from the | that there he law und to look for oker in the Smith, Mer.

ve classes of } POSSESSION rs who «re ut in posses- ), also says:

oods.” de, ; or is distinh the possesthe managepal. Brokers tracts relahey have no nd broker is sion of what obtain posut, properly n Agency, p.

ted auith the ment of the brs. Others tracts relutey have no d., 137 ; Obs.

S to 35. The btween Coievin, pp. 40, wooûs of the œuishes him ation of the rhen dealing” tbject to the is, he incurs instructions.

pal residing

anslation of the

abroad, is personally responsible as if he were the principal, for the reason that, being possessed of what he sells, and empowered to obtain possession of what he is employed to purchase, he can always protect himself from the consequences of the contract he enters into for his principal; he, in that cuse, is supposed to have assumed the responsibility, while the fact that he stipulates for a foreign and ceutiliy unknown principal, raises x strong presumption that the credit has been given to him personally und not to an irresponsible principal. But this presumption, according to Taylor, on Evidence, vol. 1, p. 187, sec. 149, “is, at best, x mere presump- “ tion of fact, liable to be rebutted by any evidence, whether “extrinsic or intrinsic, which tends to sh that the credit “ was really intended to be given to the foreign principal.” The same presumption created, in France, according to the usages of trade, the same liability in relation to some special classes of contracts, as is shown by the arréts cited by KEmerigon in his Traité des Assurances, vol. 1, pp. 137, 138, 139 and 140, Valin, sur l'Ord. de la Marine, Liv. 3, tit. 4, art. 3; Pothier, des Assurances, no 98. It follows from these authorities, both french and english, that, althouglh the personal liability of the factor or commissionnuire is by law presumed, when he acts for a foreign principal, yet he may always free himself from such liability by the contract itself, or destroy the legal presumption by the circumstances attending the transaction. Smith, Mercantile Law, p. 146, says on this subject: “The rule itself seems to be one of evidence, and all “ cuses under it to be reducible to the question: To whom “vas credit given ? For it seems, on the one hand, that, if a “ party choose to give credit to irresponsible persons of any “ description acting by their agent, and it be manifestly in- “tended that the agents credit shall not be pledged, in such “a case, the agent will not be responsible ; while on the other hand, it is clear, that if the agent contracts for an irresponsible employer, a strong presumption will arise that he meant to pledge his own credit, and that the party dealing with him meant to accept it, unless indeed, he be à government or public officer, acting in his public capacity.” Story, on Agency (ed. 1869), sec. 267, 268, 2684, holds the same doctrine. After the express declaration above quoted of the authors of the code, it cannot be supposed that, in preparing art. 1738, they intended to subject an agent acting for a foreign principal to any other or greater responsibility than such as existed previously, according to rules sanctioned by the usages of trade and the jurisprudence of both Eng'and and France ; and this article, being of an exceptional character, must be construed strictly and confined to the case provided

for, that is, to the case where the agent undoubtedly acts in the capacity of a factor. To apply these rules to the present case, it is necessary to refer briefly to the circumstances under which the parties contracted and to the terms of their contract. In the first place, respondent admits that he purchased the flour from appellants after he had seen Geo, Cowan, of the firm Geo. Cowan & Co. and after he had entered into negociation to purchase from him the flour in question, and that Cowan referred him to appellants. The firm of Geo. Cowan & Co., was not therefore unknown to respondent, who was willing to deal personally with them, on their own credit. Then the contract is in the terms of a broker’s bought and sold note. It discioses the name of the principal, shows the flour was not in the possession nor under the cont «ol of appellants, since it was to arrive from Chicago, to be delivered in bond, at a future day between the 1st of december aud the 15th january following ; respondents were to pay commission on Chicago draït and interest from date of biil of lading. All these circumstances indicate that appellants inerely aegotiated the sale for the Chicago ürm, and that they did not intend to bind themselves as principals. Tt is true they signed the memorandum of sale as ‘commission agents ;”” but this description applies as well to à broker as to a factor, for both are agents, whose services are paid by a commission. It is in evidence that appellants were doing business in both capacities, and, as in this instance, they neither had the possession nor the control of the flour sold, it seems clear that they did not act as factors but merely as brokers, and as the liability imposed by art. 1738 only applies to factors and cannot be extended to other descriptions of agents, such as brokers, the majority of the court think the judgment oughi to be reversed, and respondent’s action dismissed.

TASCHEREAU, J.: La question lère est celle de savoir si un facteur est responsable des faits de son commettant ou principal, sur un contrat fait dans l'intérêt de ce dernier, lorsqu'il réside dans un pays étranger, et qu'il est expressément dénommé dans le contrat signé par le facteur ? La 2ème question est celle de savoir ce qui constitue une transaction donnant légalement au mandataire le nom et la qualité de facteur. Le mot mandataire est le mot générique de courtier, facteur ou marchand à commission. Mais ces diverses espèces de mandataires ont leurs droits, des pouvoirs et une responsabilité qui ne sont pas les mêmes. Suivant l'article 1715, tout mandataire est dégagé de responsabilité vis à-vis des tiers avec lesquels il a contracté au nom de son principal, excepté, cependant, le facteur dont le principal demeure à

it ln 5

dly acts in the present ‘cumstances ms of their hat he purseen Geo.

ter he had the flour in lants. The inknown to ith them, on terms of « ame of the )n nor under om Chicago, n the 1st of ndents were t from date > tbat appelwo firm, and rincipals. Tt “commission broker as to > paid by a re doing busthey neither old, it seems as brokers, pplies to facns of agents, 1k the judgaction dis-

e savoir si un tant ou prinnier, lorsqu'il expressément a 2ème quesnsaction donalité de face de courtier, verses espèces t une responl'article 1715, vis à-vis des principal, exhl demeure à

l'étranger, et qui, par l’article 1738, est tenu responsable, visà-vis des tiers, des faits de son principal. Par l’article 1736, le marchand à commission est désigné comme synonyme de facteur, et il encoure la même responsabilité vis-à-vis des tiers que le facteur, lorsque son mandant demeure à l’étranger. Le courtier proprement dit n’encoure pas la même responsabilité que le facteur ou le marchand à commission vis-àvis des tiers, ainsi le déclare le Code Civil. La 2ème question nous porte à considérer, et je me demande qu'est-ce qu'un facteur ou marchand à commission, et comment le distinguet-on du courtier sur une transaction quelconque à titre de mandat? D’après le code, tel que je l'interprète à l’article 1736, le facteur ou marchand à commission est un agent chargé d'acheter ou de vendre des marchandises pour un autre, soit en son nom ou en celui de son principal, et d’après les autorités en droit commercial, cet agent, lorsqu'il s’agit de vente d'effets, doit en être en possession, ou les avoir sous son contrôle immédiat, et, s’il n’a pas telle possession ou contrôle immédiat, il *. -: que courtier, savoir, simple mandataire qui, suivant l’articie 1735, négocie entre les deux parties, et dont il est le plus souvent le mandataire commun, et ne tombe pas sous l'empire de l’article 1738. Par le contrat il est évident que les appelants n'avaient pas la possession de la fleur vendue au moment du contrat, elle ne devait pas venir en leur possession ; mais, des mains du principal, elle devait passer de suite dans celles de l'acheteur, et la mission des appelants avait cessé avec la signature du contrat. Pour rendre les appelants responsables, il ne suffit pas d’alléguer et de prouver qu'ils sont généralement considérés comme marchands à commission ou comme facteurs, car ils peuvent, dans un cas, faire une transaction qui, suivant les circonstances, leur donnerait la qualité de simples courtiers, et, dans un autre cas, ils peuvent être facteurs ou marchands à commission ; ce n’est pas le nom qui fait le facteur ou le courtier, mais bien la nature de la transaction. Dans le cas présent, les appelants ont vendu au nom de leur commettant dont ils ont indiqué les nom, qualité et résidence en toutes lettres. Ils n'avaient rien dissimulé et ils n'étaient pas en possession des effets, et ils ne devaient pas en avoir la possession. Ils ont agi comme simples courtiers au moyen de bought and sold notes, et, comme tels, ils ne sont pas responsables des faits de leur commettant. J’opine pour l’infirmation du jugement dont est appel.

MoxK, J.: As a matter of fact, Crane & Nolan had not possession of the goods, and they signed as “ commission agents.” Therefore they cannot be considered factors. They acted merely as brokers for another party named in the contruct.

The judgment is recorded as follows : ‘“ The court, consider-