Extortion under Colour of Office.-Factor. General Principles. on the official bond to recover the penalty from the securities. Walton v. The United States, 9 Wheat. 651; 5 Cond. Rep. 717. 22. An executory agreement, without consideration, to receive a less sum from the debtor, in lieu of a larger debt, does not extinguish, nor is it a satisfaction of the original debt. Latapee v. Pecholier, 2 Wash. C. C. R. 180. 23. B. and I., partners in trade, having imported goods from abroad, B. executed a bond for the duties in his separate name, and the firm then became insolvent. Held, that though both were bound upon the importation of the goods, for the duties chargeable on them, yet the bond given by one, extinguished his obligation for the duties, and made it his separate debt. United States v. Astley et al., 3 Wash. C. C. R. 508. 24. A promissory note given and received for and in discharge of an open account is a bar to an action upon the open account, although the note be not paid. Sheehy v. Mandeville et al., 6 Cranch, 253; 2 Cond. Rep. 362. 25. Á several suit and judgment against one of two joint makers of a promissory note, is no bar to a joint action against both upon the same note. Ibid. 26. The whole of a joint note is not merged in a judgment against one of the makers on his individual assumpsit; but the other may be charged in a subsequent joint action if he plead severally. Ibid. FACTOR. 1. General principles .... Page 73 ....... 734 2. Liability of factors to their principals..... 1. It is believed to be a general rule, that an agent, with limited powers, cannot bind his principal, when he transcends his power. It would seem to follow, that a person transacting business with him on the credit of his principal, is bound to know the extent of his authority; yet, if the principal has, by his declarations or conduct, authorized the opinion that he had given more extensive powers to his agent than were in fact given, he would not be permitted to avail himself of the imposition, and to protest bills, the drawing of which his conduct has sanc tioned. Schimmelpennich et al. v. Bayard et al., 1 Peters, 264. 2. An agent for collecting of debts merely, is not a factor, within the meaning of the thirteenth section of the Virginia act of limitations. Hop kirk v. Bell, 3 Cranch, 454; 1 Cond. Rep. 595. 3. The agent who makes insurance for his principal, has authority to abandon without a formal letter of attorney. The Chesapeake Ins. Co. v. Starke, 6 Cranch, 268; 2 Cond. Rep. 367. 4. The act of an agent, done without authority, may be ratified by the principal, so as to bind him in the same manner as if an original author 27. The recital of a prior, in a later agree-ity had existed. Clarke's Ex'rs v. Van Riemsdyk, ment, after it has been executed, does not ex-9 Cranch, 153; 3 Cond. Rep. 319. tinguish the former. Bank of Columbia v. Pat- 5. By the well settled principles of commercial terson's Adm'r, 7 Cranch, 299; 2 Cond. Rep. 501. EXTORTION UNDER COLOUR OF OFFICE. 1. Where the United States instituted an action for the recovery of a sum of money on a bond given with sureties by a purser in the navy, and the defendants, in substance, pleaded that the bond, with the condition thereto, was variant from that prescribed by law, and was under colour of office extorted from the obligor and his sureties, contrary to the statute, by the then secretary of the navy, as the condition of the purser's remaining in office, and receiving its emoluments; and the United States demurred to this plea it was held, that the plea constituted a good bar to the action. United States v. Tingey, 5 Peters, 115. 2. No officer of the government has a right by colour of his office to require from any subordinate officer as a condition of his holding his office, that he should execute a bond with a condition different from that prescribed by law. That would be, not to execute, but to supersede the requisites of the law. It would be very different where such a bond was, by mistake or otherwise, voluntarily substituted by the parties for the statute bond, without any coercion or extortion by colour of office. Ibid. law, the consignee is the authorized agent of the owner, whoever he may be, to receive the goods; and by his endorsement of the bill of lading to a bona fide purchaser for a valuable consideration, without notice of any adverse interest, the latter becomes, as against all the world, the owner of the goods. This is the result of the principle, that bills of lading are transferable by endorsement, and thus may pass the property. Conard v. The Atlantic Ins. Co., 1 Peters, 445. 6. When an agent abroad purchases exclusively on the credit of his principal, or makes an absolute appropriation and designation of the property for his principal, the property vests in the principal immediately on the purchase. The St. Joze Indiano, 1 Wheat. 208; 3 Cond. Rep. 543. 7. But when a merchant abroad, in pursuance of orders, either sells his own goods, or purchases goods on his own credit, and thereby in reality becomes the owner, no property in the goods vests in his correspondent, until he has done some notorious act to divest himself of his title, or has parted with the possession by an actual and unconditional delivery for the use of such correspondent. Ibid. of 8. A and B shipped a cargo of goods for C but consigned them to D, the partner of E. Be fore the arrival of the goods, D died. C became bankrupt, and the defendant, under a power attorney from E, took possession of them, sold them, and remitted part of the proceeds to E at the same time informing A and B of his hav General Principles. ing taken possession of the goods; and when he remitted, in part, their proceeds to E, he advised A and B of such remittances, who approved of the whole of his proceedings. Held, that the defendant did not become the agent of the shippers, but was the agent of E; and any remittances made to E, of which advice was not given by the defendant to A and B, that they were for the proceeds of the goods, were not a payment to A and B. Holt et al. v. Dorsey, 1 Wash. C. C. R. 396. 9. Where an agent abroad is directed not to sell for less than the first cost and charges, and an invoice accompanies the letter, stating the prices of the articles, and the amounts of the charges on the shipments, the price stated in the invoice is the maximum by which he is to to be governed. He has nothing to do with the actual cost of the articles. Loraine v. Cartwright, 3 Wash. C. C. R. 151. 10. The ratification of the acts of an agent, whose acts had been without authority, thus to give validity to such acts, as if they had been strictly authorized in the first instance, may be done not only directly, but by collateral acts, as if the principal, knowing all the circumstances, accept or even demand the purchase-money for that which the agent sold. Ibid. an agent cannot be taken in execution for the debts of the agent, or where goods were delivered under a special contract of consignment for their sale or return, on terms stipulated, if the contract was bona fide. Ibid. 19. Whatever an agent does or says in refer ence to the business in which he is at the time employed, and within the scope of his authority, is done or said by the principal; and may be proved as well in a criminal as a civil case, in like manner as if all the evidence applied personally to the principal. American Fur Company v. The United States, 2 Peters, 358. 20. If a party, knowing that his agent is about to procure insurance for him, withheld information for the purpose of misleading the underwriter, it is a fraud which is fatal_to_the_insurance. M'Lanahan v. The Universal Ins. Co., 1 Peters, 170. 21. A factor to whom a general shipment has been entrusted as security for advances, expenses and commissions, has a special property only in the shipment; and subject to his lien for these charges, the owner may dispose of them as he pleases, and his conveyance will carry the right. The Packet, 3 Mason's C. C. R. 334. 22. If a factor, with a del credere commission, sells the goods of his principal, and takes 11. An agent who is party to an illegal trans-negotiable securities in payment, and fails before action, and has in his hands the proceeds, may set up such illegality against the action of any party concerned with him. Fales v. Mabury, 2 Gallis. C. C. R. 563. they become due, having assigned these securities to his assignees, in favour of his creditors, and the assignees, when the notes fall due, receive the money, the principal may recover the amount from such assignees, subject to a deduction of the lien of the factor for his commissions and charges. Thompson v. Perkins et 12. If an agent to collect and receive payment of bills, transmit them to his own private agent, to receive the money, and place the amount, when received, to his own private credit, pay-al., 3 Mason's C. C. R. 232. ment to such agent is payment to the original agent; and if there be a failure, it is the loss of the latter, and not of the former. This applies with more force where the money has been drawn by a bill in favour of a third person, which has been accepted before the failure. Ibid. 13. A factor is bound to good faith and reasonable diligence. He cannot pledge the property of his principal for his own debts, but he may do so for duties accruing on the goods, or for other purposes where the usage of the trade allows it. Evans v. Potter, 2 Gallis. C. C. R. 14. 14. If the factor sell, bona fide, the goods of his principal for a valuable consideration, by assigning over the bill of lading, the sale is valid against the principal. But such a sale is not valid, unless the bill of lading for the goods has been received by the factor. Walter et al. v. Ross et al., 2 Wash. C. C. R. 283. 15. The principal may follow the money in the hands of the purchaser, and if not paid to the factor, he may receive it. Ibid. 16. A factor has no property or interest in the goods of his principal, beyond his commissions, and cannot control the right of the principal over them. Ibid. 17. The possession of goods by an agent is the possession of the principal. Merrill & Foster v. Rinker, 1 Baldwin's C. C. R. 533. 18. The goods of a principal in the hands of VOL. I.-62 23. The principal is entitled to recover, wherever he can trace his own property, and distinguish it or its proceeds, from the mass of the property of his factor. Ibid. 24. If it has been sold, and notes taken in payment, and these can be specifically ascer tained, they remain the property of the principal, and he has a right to receive them, discharging at the same time any lien of the factor. Ibid. 25. It makes no difference whether the factor be with or without a del credere commission. Such a guarantee is not a direct, original liability to the principal, in the same way as if the factor was himself the purchaser, excluding the liability of the original purchaser; it is merely an undertaking to pay, in case there should be a failure of payment by the buyer. Ibid. 26. An agent, who, in his character of agent, collects a debt due to his principal, and retains it by contract of loan with his principa! as debtor, entered into before the debt was collected, is not entitled to commissions. Short v. Skipwith, 1 Brockenb. C. C. R. 103. 27. A factor sells bills of his principal to C, on a credit, and takes in payment a note of a previous date, having three months to run, drawn by A, and endorsed by B, who were in good credit at the time; the note was not endorsed by C. Held, that the circumstances of the note being of previous date, and not endorsed by the Liability of Factors to their Principals. purchaser of the bills, are not of themselves, per se, sufficient to outweigh the fact that the drawer and endorser of the note were in good credit at the time of the transaction. Nor was it of any consequence that the name of C, the purchaser, was not communicated by the factor to his principal, the principal not having required it. Hamilton et al. v. Cunningham, 2 Brockenb. C. C. R. 350. 28. An agent does not bear the same relation to his principal, that the holder of a bill of exchange does to the drawer and endorser. The same negligence or omission that will deprive the holder of all recourse against the drawer or endorser, will not subject the agent to his principal, to the extent of the bill placed in his hands for collection. Ibid. 29. The relation of principal and agent is governed by the general rules of law, founded on reason; and if the principal suffers through the remissness or negligence of the agent, the actual loss sustained by the principal, in consequence of such misconduct, is the standard by which his damages must be measured. Ibid. 30. The factor to whom commercial paper is transmitted for collection, but who does not make himself a party by putting his name upon the paper, is an ordinary agent, governed by the law which regulates the relations between principal and agent generally; and is not subject to the law merchant, which relates to bills of exchange. Ibid. 31. In the admiralty, where the factor and the persons claiming a derivative title under the owner, contest the right to the proceeds, the court will decide upon the equities of all concerned, and decree the amount of the lien to the factors, and the residue of the proceeds to the other claimants. If in such a case, a factor sets up a title as general owner, and not merely for alien, he will not be entitled to costs. The Ship Packet, 3 Mason's C. C. R. 334. 32. If an agent to collect and receive payment of bills, transmit them to his own private agent, to receive the money and place the amount, when received, to his private credit, payment to such agent is payment to the original agent; and if there be a failure, it is the loss of the latter, and not of his principal. Taber v. Perrot, 2 Gallis. C. C. R. 565. 33. A fortiori, this applies, where the money has been drawn for by a bill in favour of a third person, which has been accepted before the failure. Ibid. 2. Liability of Factors to their Principals. 34. If an agent to collect and receive payment of bills, transmit them to his own private agent to receive the money, and place the amount, when received, to his private credit, payment to such agent, is payment to the original agent; and if there be a failure, it is the loss of the latter, and not of his principal. Taber v. Perrot et al., 2 Gallis. C. C. R. 565. 35. An agent or trustee cannot, directly or indirectly, become the purchaser of property which is confided to his care. Church v. Marine Insurance Company, 1 Mason's C. C. R. 341. 36. A factor who sells goods on credit, contrary to the directions of his principal, becomes personally responsible; and the principal may recover of him the entire amount of the debt. Walker v. Smith, 4 Dall. 389. 37. One who holds a bill of exchange merely as agent, or as collateral security, is not to be charged with it, until he has received the amount. Pigou v. French, 1 Wash. C. C. R. 278. 38. If foreign merchants send out by their general agent, written orders to their factor in this country to purchase tobacco on their ac count, but to ship it in the name of the factor, and by those orders the factor is referred to the verbal communications of the general agent, who undertakes to order the shipment to be made in the name of another person, and declares he has authority from the foreign mer chants thus to control and vary their orders, the factor is justified in obeying the new orders, though contrary to the written orders. Manella et al. v. Barry, 3 Cranch, 415; 1 Cond. Rep. 581. 39. It has always been deemed proper to hold agents to strict account, in relation to the orders they receive, provided they are expressed in plain terms, and free from ambiguity; and in this respect, the same measure of justice has been dealt out to agents within the United States, acting for persons abroad, as to foreign agents or citizens of the United States. Loraine v. Cartwright, 3 Wash. C. C. R. 151. 40. If a consignor accepts a consignment, he does it on the terms prescribed by the shipper. He might have rejected it; but he cannot, after accepting it, refuse a compliance with the orders accompanying it. Ibid. 41. A factor, who sells under a del credere commission, and guaranties the debts, guaranties only the sales and receipts of the money. If after receiving the money, he purchases a bill from a person in good credit, for the purpose of remitting the proceeds pursuant to directions, he is not answerable for the loss, in case the bill is protested. If, however, he receives a bill in payment, which he remits, in case that is dishonoured, he is responsible. Muller v. Boklens, 2 Wash. C. C. R. 378. 42. No man can compel another to render him acts of friendship, or service of any kind whatsoever, gratuitously, or with a view to compensation. But if a person applied to, consents to render the service, and undertakes the business, he is bound to act in conformity with the terms on which the request was made; and in commercial agencies, this rule is strictly en forced. Walker et al. v. Robert Smith, 1 Wash. C. C. R. 152. 43. An attorney, authorized to collect a debt for his principal, cannot commute that debt for one due by himself to the debtor, by the mere operation of exchanging one for the other. The debtor cannot say he has paid his debt to the attorney, by showing an agreement made by the attorney to credit the debtor, and debit himself with the amount which he, the attorney, owes Kingston v. Kincaid, 1 Wash. C. C. R. 453. 44. If a party knows that A is the agent of several shippers, who had separate interests in Liability of Factors to their Principals. the cargo, he cannot take the property of any of | losses sustained in consequence of the breach them to pay the debt of the agent to him; although he is perfectly justifiable in paying over the money for the use of the principal to the agent. Merrick v. Bernard, 1 Wash. C. C. R. 470. 45. Where the principal can trace his property into the hands of an agent, or factor, whether it be the identical article which first came into his hands, or other property purchased by the principal for the factor, with the proceeds, he may follow it into the hands of the factor, or of his legal representatives, or his assignees, if he should become insolvent; unless such representatives or assignees should pay away the same before notice of the claim of the principal. Veil et al. v. The Adm'rs of Mitchell, 4 Wash. C. C. R. 105. 46. Questions between principal and agent frequently occur in courts of justice, as to the construction of the orders which are alleged to have been violated, whether they are positive or unqualified, or leave a discretion to the agent. If they are so ambiguous that two constructions may fairly be given to them, every principle of justice demands that the want of precision in the writer should fix the loss upon him rather than on his correspondent. If the order leaves him a discretion, the law requires nothing but the exercise of a fair and honest judgment. But if the order be free from ambiguity, and is positive and unqualified, it must be rigidly obeyed, if it be practicable; and no motive connected with the interest of the principal, however honestly entertained, or however wisely adopted, can excuse a breach of it. This is a general and well established principle of law. Courcier v. Ritter, 4 Wash. C. C. R. 551. of instructions; but received the goods and sold them. W. brought assumpsit against H., to recover the money advanced. Held, 1st, that W. had a demand against the defendant, which could be maintained in this form of action. 2d, That whether or not the plaintiff could be made responsible in any form of action for the possi ble loss resulting from the breaking up of the intended voyage to St. Petersburgh, the defendant could not deduct from the plaintiff's demand, in this action, the amount of such loss. Willinks v. Hollingsworth et al., 6 Wheat. 240; 5 Cond. Rep. 79. 49. 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 requires; and, indeed, unless his orders restrict him, he is bound to conform to this course of the trade. Evans v. Potter, 2 Gallis. C. C. R. 13. 50. He cannot 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. Ibid. 51. A factor in making sales of goods on consignment, is bound not only to good faith, but to reasonable diligence. It is not sufficient that he has been guilty of no fraud, or of no gross negligence which would carry with it the insignia of fraud. He is required to act with reasonable care and prudence in his employment. Burrill v. Phillips, 1 Gallis. C. C. R. 360. 52. He shall not be permitted to sell his own goods and take security, and at the same time 47. Where a factor was authorized to sell to sell the goods of his principal to the same goods for a limited price, and he afterwards sold party without security; he is bound to exercise them below that price, and sent an account to at least as much care and diligence as to his fachis principal of the sales and prices, and author-torage, as to his own private concerns. Ibid. ized him to draw for the balance of the account, 53. In assumpsit against a consignee of goods, and the principal received the account, and stating the contract to be, "sell the same, and drew for the balance, and made no objection in render a reasonable account," damages for not his letter, or otherwise, to the conduct of the remitting, when exchange was favourable, canfactor, in his sales: Held, that this conduct not be recovered. Pope et al., v. Barrett, 1 Maamounted to a ratification of the factor's pro- son's C. C. R. 117. ceedings. Richmond Manufacturing Company v. Starks et al., 4 Mason's C. C. R. 296. 48. H., a merchant in Baltimore, consigned a vessel and cargo to W., in Amsterdam, with instructions, showing, that on the failure of procuring a freight to Batavia, or selling the vessel at a price limited, she was to proceed to St. Petersburgh, and there take in a cargo of Russian goods for the United States, but with instructions to the master committing to him the management of the ulterior voyage. The freight could not be obtained, nor the vessel sold for the price limited; and W. purchased, in Amsterdam, with the concurrence of the master, a return cargo of Russian goods, partly with the money of H., and partly with money advanced by himself. On the return of the vessel to Baltimore, H. objected to this purchase at Amsterdam, as being contrary to orders, and gave notice to W., of his determination to hold him responsible for all 54. Where goods are consigned to an agent or factor to sell, and he refuses to render any account of the sales, the most unfavourable presumptions which the evidence admits of, ought to be made against him, in respect to the amount and value of the goods sold and unaccounted for. Ibid. 55. A factor cannot pledge the goods of his principal for his own debt; and if he does, the principal may, after demand and refusal, maintain trover for them against the pawnee. Van Amringe v. Peabody, 1 Mason's C. C. R. 440. 56. An agent or factor who is ordered by his principal to ship goods in his possession, has no right to retain more than enough to secure such lien as he may have. He may do this, and obey the order as to the balance; or he may send the whole to his consignee at the place directed, with orders to deliver them to the principal on being paid. But if he retain the whole, because Liability of Factors to their Principals. of a lien to a small amount, and any loss results from his breach of orders, he is responsible. Jolly v. Blanchard, 1 Wash. C. C. R. 252. 57. If one merchant is in the habit of effecting insurance for another, and neglects, when ordered to have one effected, he is himself answerable for the loss, as if he had insured, and is entitled to the premium. If he can excuse himself for not obeying his orders, he is answerable for nothing; if he cannot, he is so for the whole. Morris v. Summers, 2 Wash. C. C. R. 203. 58. If an agent or factor sell the goods of his principal, and has not received payment, or having received it, invests it in property for the use of his principal, or marks and puts it away as his, the latter has a right to it, and is entitled to all the profits made from it, either as against the factor, or his general creditors. Aliter, if the factor applies the money to his own use, charging himself with the same in account with the principal. Hourquebie v. Girard's Adm'r, 2 Wash. C. C. R. 212. 61. The faithful execution of orders which an agent or correspondent has contracted to execute, is of vital importance in commercial transactions, and may often affect the injured party far beyond the actual sum misapplied. A failure in this respect may entirely break up a voyage, and defeat the whole enterprise. Speculative damages, dependent on possible, successive schemes, ought not to be given in such cases; but positive and direct loss, resulting plainly and immediately from the breach of orders, may be taken into the estimate. Ibid. 85. 62. The jury, in an action for damages for breach of orders, may compensate the plaintiff for actual loss, and not give vindictive damages. The profits which would have been obtained on the sale of the article directed to be purchased, may be properly allowed as damages. Ibid. 86." 63. If the factor has transmitted to his principal an account of sales, mentioning the names of the purchasers, and times of credit, the bur then of proof lies on the principal to show that the purchasers were not in good credit, or reputed to be so. Gerbier v. Emory, 2 Wash. C. C. R. 413. 64. The relinquishment of commissions on an agency does not release the agent from his responsibilities to his principal. Walker v. Smith, 1 Wash. C. C. R. 152. 65. An agent who does not comply with instructions is liable for the loss incurred thereby, although the services were gratuitous. Ibid. 59. C. & Co., merchants of Boston, owners of a ship proceeding on freight from Havana, to the consignment of B. & Co., at Leghorn, and to return to Havana, instructed B. & Co. to invest the freight, estimated at four thousand six hundred petsos; two thousand two hundred in marble tiles, and the residue after paying disbursements, in wrapping paper. B. & Co. undertook to execute these orders. Instead, however, of investing two thousand two hundred petsos in marble, they invested all the funds which came into their hands in wrapping paper, which was received by the captain of the ship, and was carried to Havana, and there sold on account of C. and Co., and produced a loss, instead of the profit which would have resulted, had the investment been made in marble tiles. As soon as information of the breach of orders was received, C. & Co. addressed a letter to B. & Co., expressing, in strong terms, their disapprobation of the departure from their orders; but did not signify their determination to disavow the trans- 67. A consignee who receives merchandise action entirely, and consider the paper as sold from a supercargo for sale, and who knows that on account of B. & Co. Held, that C. & Co. the supercargo is the agent of others, contracts were entitled to recover damages for the breach a debt with the shipper for this portion of the of their orders; that their not having given no- cargo; and the supercargo has no right to ap tice to B. & Co., that the paper would be con-propriate the same to the payment of his pri sidered as sold on their account, did not injure vate debt. Merrick v. Bernard, 1 Wash. C. C. their claim; and that the amount of the damages | R. 479. 66. An agent, if a discretion is given to him, is bound to act to the best of his judgment for the benefit of his employer. If his orders be positive, he must either refuse to act, or he is bound to a strict observance of them. He cannot exercise his own judgment, but as to the best mode of executing the orders according to their terms. If the orders are ambiguous, the construction must be taken most strongly against him who gave them. Kingston v. Kincaid, 1 Wash. C. C. R. 453. may be determined by the positive and direct 68. Where the insurance has been imperfectly loss arising plainly and immediately from the made and not altogether neglected, it may be breach of the orders. Bell et al. v. Cunning-questioned whether the agent is liable for more ham, 3 Peters, 69. than damages equal to the chance of indemnity, 60. If the principal, after a knowledge that which would have been afforded by the exact his orders have been violated by his agents, re-execution of the order. De Tastett v. Crousillat, ceives merchandise purchased for him contrary 2 Wash. C. C. R. 132. to orders, and sells the same without signifying any intention of disavowing the acts of the agent, an inference in favour of the ratification of the acts of the agent may fairly be drawn by the jury. But if the merchandise was received by the principal, under a just confidence that his orders to his agent had been faithfully executed, such an inference would be, in a high degree, unreasonable. Ibid. 81. 69. A claim of damages against an agent, upon the orders of his principal, which he is charged with neglecting, is not entitled to favour if the order has been couched in doubtful terms. Ibid. 70. If a reasonable diligence has been used to effect insurance for his principal, he is not liable.___Ibid. 71. The neglect of an agent to give notice to |