THE FACTORS ACT, 1892

Transcription

1 89 THE FACTORS ACT, Vic. No.8 Amended by Statute Law Revision Act of 1908, 8 Edw. 7 No. 18 An Act to Amend the Law relating to Factors [Assented to 23 August 1892] 1. Short title. This Act may be cited as "The Factors Act, 1892." PRELIMINARY 2. Definitions. 52 & 53 Vic. c. 45, s. I.-In this Act- The expression "Mercantile Agent" means a mercantile agent having in the customary cour~e of his business as such agent authority either to sell goods, or to consign goods for the purpose of sale, or to buy goods, or to raise money on the security of goods; The term "Goods" includes wares and merchandise; The expression "Document of Title" includes a bill of lading, dock warrant, warehouse-keeper's certificate, warrant or order for the delivery of goods, and any other document used in the ordinary course of business as proof of the possession or control of goods, or authorising or purporting to authorise, either by endorsement or by delivery, the possessor of the document to transfer or receive goods thereby represented; The term "Pledge" includes any contract pledging, or giving a lien or security on, goods, whether in consideration of an original advance or of any further or continuing advance or of any pecuniary liability. For the purposes of this Act a person is deemed to be in possession of goods or of the documents of title to goods, when the goods or documents are in his actual custody or are held by any other person subject to his control or for him or on his behalf. Factors Act, 1889 (Imperial), 52 & 53 Vic. c. 45; see 1 Halsbury's Statutes "Mercantile Agent"-The Act applies to goods sent to a retailer on "sale or return", Weiner v. Harris, [1910] 1 K.B. 285; [ ) All E.R. Rep This definition was discussed in Knight v. Matson (1902).22 N.Z.L.R. 293, where a cattle dealer was held to be a mercantile agent. A carrier entrusted with the sale of a single article has been held not to be a mercantile agent, Nicholson v. Bank of New Zealand (1894), 12 N.Z.L.R A man who has never before carried on business as a mercantile agent may become instanter such an agent within the meaning of this Act, by virtue of the terms of a particular transaction in which particular goods are entrusted to him, Mortgage Loan & Finance Co. of Australia Ltd. v. Richards (1931), 32 S.R.(N.S.W.) 50. He may also by virtue of a single transaction gain

2 90 MERCANTILE LAW Vol. 12 authority to sell in the customary course of his business as such agent, ibid. See also Lloyds Bank v. Bank of America National Trust and Savings Assoc., [1938] 2 AJI E.R.63. "Document of TitIe"-The contract contained in a bill of lading is not merely to carry but also to deliver, and until delivery by the shipowner the bill is an effective document of title for purposes of this Act, Levi v. Learmonth (1862), 1 W. & W. (L.) 283. Cash receipts given in place of delivery orders are not documents of title, Kemp v. Falk (1882),7 App. Cas "Pledge"-See I English and Empire Digest, (Rp!.) p Possession-As to what constitutes possession of goods, see Hamill v. Kenyon, [1924] St. R. Qd. 78; [1924] Q.W.N. 15; 18 Q.J.P.R. 5 (possession of husband not subject to control of his wife but of a purchaser from her). DISPOSITIONS BY MERCANTILE AGENTS 3. Powers of mercantile agent with respect to disposition of goods. 52 & 53 Vic. c. 45, s. 2. ( 1) When a mercantile agent is, with the consent of the owner, in possession of goods or of the documents of title to goods, any sale, pledge, or other disposition of the goods, made by him when acting in the ordinary course of business of a mercantile agent, shall, subject to the provisions of this Act, be as valid as if he were expressly authorised by the owner of the goods to make the same: Provided that the person taking under the disposition acts in good faith, and has not at the time of the disposition notice that the person making the disposition has not authority to make the same. (2) When a mercantile agent has, with the consent of the owner, been in possession of goods or of the documents of title to goods, any sale, pledge, or other disposition, which would have been valid if the consent had continued, shall be valid notwithstanding the determination of the consent: Provided that the person taking under the disposition has not at the time thereof notice that the consent has been determined. (3) When a mercantile agent has obtained possession of any documents of title to goods by reason of his being or having been, with the consent of the owner, in possession of the goods represented thereby, or of any other documents of title to the goods, his possession of the firstmentioned documents shall, for the purposes of this Act, be deemed to be with the consent of the owner. (4) For the purposes of this Act the consent of the owner shall be presumed in the absence of evidence to the contrary. Factors Act, 1889 (Imperial), 52 & 53 Vic. c. 45; see 1 Halsbury's Statutes This section operates by way of qualification of the Sale of Goods Act of 1896, s. 24, p. 210, post, and is not affected by that Act. The "owner" for purposes of subsection (1) is the person in a position to give express authority with regard to the dealing in question; thus two or more persons may be owners jointly, Lloyds Bank v. Bank of America National Trust and Savings Assoc., [1938] 2 All E.R. 63. As to what is possession with the consent of the owner, see Oppenheimer v. Frazer, [1907] 2 K.B. 50; [1904-7] All E.R. Rep. 143; Folkes v. King, [1923] 1 K.B. 282; [1922] All E.R. Rep. 658, Lowther v. Harris, [1927] 1 K.B. 393; [1926] All E.R. Rep. 352, and cases in English and Empire Digest, (Rp!.), p A mercantile agent in possession of a motor-car with the consent of the owner purported to sell it on terms to a non-existent person. For the purpose of financing this transaction he then purported to sell the car to a finance company for the amount due from the first purchaser. It was held that the second sale was not a sale of the goods, but of the interest of the vendor, Busby v. Mac/urean & Lane Ltd. (1931), 48 W.N.(N.S.W.) 2.

3 FACTORS ACT, 1892 ss.2.' 91 Goods or documents cannot be effectively pledged under this section when pledged together with other goods or documents to secure one fluctuating sum, Re Farmers' and Settlers' Co-operative Society (1908), 9 S.R.(N.S.W.) 41. A pledge by a mercantile agent must be in the ordinary course of his business as an agent, i.e., "as if he were carrying out a transaction which he was authorised by his master to carry out," per Lord Ulverstone, C.J., in Oppenheimer v. Attenborough & Son, [1908] 1 K.B. 221, at p. 227; [1904-7] All E.R. Rep. 1016, at p. 1019; see also Mortgage Loan and Finance Co. of Australia Ltd. v. Richards (1931),32 S.R.(N.S.W.) 50, noted to s. 2. As to notice, see Navulshaw v. Brownrigg (1852), 21 L.J. Ch. 908 and Oppenheimer v. Frazer, supra. The onus of proof of good faith and absence of notice is on the person taking under the disposition. See Heap v. Motorists' A dvisory Agency Ltd. [1923] 1 K.B. 577; [1922] All E.R. Rep. 251; and English and Empire Digest, (Rpl.), p Effect of pledges of documents of title. 52 & 53 Vic. c. 45, s. 3. A pledge of the documents of title to goods shall be deemed to be a pledge of the goods. Factors Act, 1889 (Imperial), 52 & 53 Vic. c. 45; see 1 Halsbury's For "pledge", see s. 2. This section is controlled by the heading above s. 3, and therefore applies only to pledges by mercantile agents, Inglis v. Robertson & Baxter, [1898] A.C Pledge for antecedent debt. 52 & 53 Vic. c. 45, s. 4. When a mercantile agent pledges goods as security for a debt or liability due from the pledgor to the pledgee before the time of the pledge, the pledgee shall acquire no further right to the goods than could have been enforced by the pledgor at the time of the pledge. Factors Act, 1889 (Imperial), 52 & 53 Vic. c. 45; see 1 Halsbury's A pledge in exchange for other goods previously pledged and for an additional advance is protected by the Act, Sheppard v. Union Bank of London (1862), 7 H. & N Where goods are pledged to obtain a new loan, the proceeds of which are to be applied merely to repay an old loan, the Act will not afford protection, Learoyd v. Rob,inson (1844), 2 M. & W. 745; Phillips v. Huth (1840), 10 L.J. Ex Rights acquired by exchange of goods or documents. 52 & 53 Vic. c. 45, s. 5. The consideration necessary for the validity of a sale, pledge, or other disposition, of goods, in pursuance of this Act, may be either a payment in cash, or the delivery or transfer of other goods, or of a document of title to goods, or of a negotiable security, or any other valuable consideration; but when goods are pledged by a mercantile agent in consideration of the delivery or transfer of other goods, or of a document of title to goods, or of a negotiable security, the pledgee shall acquire no right or interest in the goods so pledged in excess of the value of the goods, documents, or security when so delivered or transferred in exchange. Factors Act, 1889 (Imperial), 52 & 53 Vic., c. 45, 1 Halsbury's Statutes 7. Agreements through clerks, etc. 52 & 53 Vic. c. 45, s. 6. For the purposes of this Act an agreement made with a mercantile agent through a clerk or other person authorised in the ordinary course of business

4 92 MERCANTILE LAW Vol. II to make contracts of sale or pledge on his behalf shall be deemed to be an agreement with the agent. Factors Act, 1889 (Imperial), 52 & 53 Vic., c. 45, 1 Halsbury's Statutes 8. Provisions as to consignors and consignees. 52 & 53 Vic. c. 45, s. 7. ( 1) When the owner of goods has given possession of the goods to another person for the purpose of consignment or sale, or has shipped the goods in the name of another person, and the consignee of the goods has not had notice that such person is not the owner of the goods, the consignee shall, in respect of advances made to or for the use of such person, have the same lien on the goods as if such person were the owner of the goods, and may transfer any such lien to another person. (2) Nothing in this section shall limit or affect the validity of any sale, pledge, or disposition, by a mercantile agent. Factors Act, 1889 (Imperial), 52 & 53 Vic., c. 45, 1 Halsbury's Statutes DISPOSITIONS BY SELLERS AND BUYERS OF GOODS 9. Disposition by seller remaining in possession. 52 & 53 Vic. c. 45, s. 8. When a person, having sold goods, continues, or is, in possession of the goods or of the documents of title to the goods, the delivery or transfer by that person, or by a mercantile agent acting for him, of the goods or documents of title under any sale, pledge, or other disposition thereof, or under any agreement for sale, pledge, or other disposition thereof, to any person receiving the same in good faith and without notice of the previous sale, shall have the same effect as if the person making the delivery or transfer were expressly authorised by the owner of the goods to make the same. Factors Act, 1889 (Imperial), 52 & 53 Vic. c. 45; 1 Halsbury's Statutes The Sale of Goods Act of 1896, s. 27 (1), p. 212, post, is in the same terms as this section with the exception that that section does not contain the words "or under any agreement for sale, pledge, or other disposition thereof." See the notes to that section. The sections operate by way of qualification of the Sale of Goods Act of 1896, s. 24, p. 210, post. The person delivering or transferring must have been in possession of the goods at the time, Hamill v. Kenyon, [1924] St. R. Qd. 78; [1924] Q.W.N. 15; 18 Q.J.P.R. 5. There is no "delivery or transfer" where goods are pledged to the warehouseman who stores them, Nicholson v. Harper, [1895] 2 Ch. 415; [1895] All E.R. Rep The person cannot give a good title under this section unless he is in possession of the goods in the character of seller, Felstead v. Economic Cash Buying Co. Ply. Ltd., [1937] V.LR See also Union Transport Finance Ltd. v. Ballardie, [1937] 1 K.B. 510; [1937] 1 All E.R Disposition by buyer obtaining possession. 52 & 53 Vic. c. 45, s. 9. When a person, having bought or agreed to buy goods, obtains with the consent of the seller possession of the goods, or the documents of title to the goods, the delivery or transfer, by that person or by a mercantile agent acting for him, of the goods or documents of title, under any s3je, pledge, or other disposition thereof, or under any agreement for sale, pledge, or other disposition thereof, to any person receiving the same in

5 FACTORS ACT, 1892 ss good faith and without notice of any lien or other right of the original seller in respect of the goods, shall have the same effect as if the person making the delivery or transfer were a mercantile agent in possession of the goods or documents of title with the consent of the owner. For the effect of delivery or transfer by a mercantile agent, see s. 3. This section is reproduced in s. 27 (2) of the Sale of Goods Act of 1896, p. 212, post, with the omission of the words "or under any agreement for sale, pledge, or other disposition thereof." See tbe notes to that section. The hirer in a hire-purchase agreement, where there is an "option to buy" but no binding agreement to buy, is not a person who has "agreed to buy goods" within the meaning of this section. Contrast Lee v. Butler, [1893] 2 Q.B. 318; [1891-4] All E.R. Rep. 1200, and Yule Bros. v. Sims, [1918] V.L.R. 670 (agreement to buy) with He/by v. Matthews, [1895] A.C. 471 (option to buy; Kaye & Son v. Glassey (1896), 7 Q.L.J. 33, and Oates v. Kenna, [1923] St. R. Qd. 88; [1923] Q.W.N. 26; 17 Q.J.P.R. 122 (no agreement to buy). For repairer's lien, see Green v. All Motors Ltd., [1917] 1 KB. 625; [1916-7] All E.R. Rep. 1039; Albermarle Supply Co. Ltd. v. Hind & Co., [1928] 1 KB. 307; [1927] All E.R. Rep See Du Jardin v. Beadman Bros. Ltd., [1952] 2 Q.B. 712; [1952] 2 All E.R. 160 (possession of motor car obtained by person guilty of larceny by a trick; title of innocent purchaser held good). 11. Effect of transfer of documents on vendor's lien or right of stoppage in transitu. 52 & 53 Vic. c. 45, s. 10. When a document of title to goods has been lawfully transferred to a person as a buyer or owner of the goods, and that person transfers the document to a person who takes the document in good faith and for valuable consideration, the last-mentioned transfer shall have the same effect for defeating any vendor's lien or right of stoppage in transitu as the transfer of a bill of lading has for defeating the right of stoppage in transitu. This section is substantially reproduced in the proviso to s. 48 of the Sale of Goods Act of 1896, p. 223, post. For the vendor's lien, see ibid., ss For the right of stoppage in transitu, see ibid., 5S For the effect of transfer of a bill of lading, see Mercantile Acts, 1867 to 1896, ss. 5-7, p. 121, post, and 35 Halsbury's Laws of England, 3rd ed., p There is no provision in this section with respect to absence of notice, as the mere fact that the price is unpaid does not make it a fraud to transfer the goods or documents so as to defeat the seller's lien or right of stoppage in transitu, Cahn v. Packett's Bristol Channel, &c., Co., [1899] 1 Q.B As to the transfer of a delivery order not relating to specific goods, see Ant. Jurgens Margarinefabrieken v. Dreyfus (Louis) & Co., [1914] 3 KB. 40. A warehouseman is not entitled, as against an assignee of the bond certificate, to deliver goods warehoused with him and for which he has given his bond certificate, except upon production of the bond certificate, Gibbs, Bright & Co. v. Ralph (1892), 14 A.L.T. 80. SUPPLEMENTAL 12. Mode of transferring documents. 52 & 53 Vic. c. 45, s. 11. For the purposes of this Act, the transfer of a document may be by endorsement, or, if the document is by custom or by its express terms transferable by delivery, or makes the goods deliverable to the bearer, then by delivery.

6 94 MERCANTILE LAW Vol Saving for rights of true owner. 52 & 53 Vic. c. 45, s. 12. (1) Nothing in this Act shall authorise an agent to exceed or depart from his authority as between himself and his principal, or exempt him from any liability, civil or criminal, for so doing. (2) Nothing in this Act shall prevent the owner of goods from recovering the goods from an agent or his trustee in bankruptcy at any time before the sale or pledge thereof, or shall prevent the owner of goods pledged by an agent from having the right to redeem the goods at any time before the sale thereof, on satisfying the claim for which the goods were pledged, and paying to the agent, if by him required, any money in respect of which the agent would by law be entitled to retain the goods or the documents of title thereto, or any of them, by way of lien as against the owner, or from recovering from any person with whom the goods have been pledged any balance of money remaining in his hands as the produce of the sale of the goods after deducting the amount of his lien. (3) Nothing in this Act shall prevent the owner of goods sold by an agent from recovering from the buyer the price agreed to be paid for the same, or any part of that price, subject to any right of set-off on the part of the buyer against the agent. 14. Saving of common law powers of agent. 52 & 53 Vic. c. 45, s. 13. The provisions of this Act shall be construed in enlargement and not in derogation of the powers exercisable by an agent independently of this Act. As to criminal liability, see Criminal Code, ss. 392 (2), 396, title CRIMINAL LAW, Vol. 3, pp. 407, 409. For a buyer's right of set-djf against an agent whom he believed to be a principal, see Kaltenbach v. Lewis (1885), 10 App. Cas. 617; Cooke & Sons v. Eshelby (1887), 12 App. Cas. 271; [ ] All E.R. Rep (Repealed.) Repealed by Statute Law Revision Act of 1908, s. 2.