McGraft v. Rugee

Cassoday, J. An agent employed to sell, or to purchase and sell, goods or other personal property intrusted to his possession, by or for his principal, for a compensation, commonly called factorage or commission, may properly be regarded as a factor. Story on Agency, §§ 33-34n¡/ Edwards on Factors, § 1; Wharton on Agency, § 735. Here the duties, powers, and compensation of the factors, and their relation to their principals, were originally regulated by agreement. True, there were some departures after the business had continued for a while, but there is nothing to indicate any change as to the title of the property, or the measure or source of compensation. Undoubtedly, a_factor is entitled to retain goods in his possession as such_until his advances, expenses, and commissions are paid, and this right is not limited to charges on the particular consignment of goods, but covers a general balance on the accounts between the factor and the principal, so far as concerns the business of factorage. Wharton on Agency, § 767; Edwards on Factors, §§ 71, 72; Story on Agency, § 376; Matthews v. Menedger, 2 McLean, 145; Bryce v. Brooks, 26 Wend., 374; Kruger v. Wilcox, 1 Ambler, 252; Jordan v. James, 5 Ohio, [410] 99; Weed v. Adams, 37 Conn., 378. The statute of this •state in this respect would seem to be in confirmation of the common law. . R. S., sec. 3345. But where the general balance on the accounts of the fac-torage is largely against the factor and in favor of the principal, the former can liaye no lien upon the property in his possession, for he has no enforceable claim. Godfrey v. Furzo, 3 P. Wms., 185; Zinck v. Walker, 2 W. Bl., 1154; Hollingworth v. Tooke, 2 II. Bl., 501; Walker v. Birch, 6 Term, 258; Weed v. Adams, supra; Jordan v. James, supra; Enoch v. Wehrkamp, 3 Bosw., 398; Beebe v. Mead, 33 N. Y., 587. In such case the factor’s right of retention and sale is merely to reimburse himself for the balance his due on the general account of the factorage. Brown v. M'Gran, 14 Pet., 479; Overton on Liens, § 105. Neither can a factor who is indebted to his principal on account of previous sales, acquire a particular lien upon goods subsequently sent to him for sale, for expenses incurred on account of them, unless such expenses exceed the amount of his indebtedness. Edwards on Factors, § 72; Enoch v. Wehrkamp, supra. The lien of an agent and factor on the goods of his principal for specific expenses does not exist when the general balance of account is against him. Ibid. We must therefore hold that where a factor is largely indebted to his principal on account of the factorage, and thereupon voluntarily makes advances in the business not exceeding such indebtedness, such advances, being made for and in behalf of his principal, must be deemed to have been so made by the factor in liquidation of his own indebtedness pro tanto. Here, by special agreement, the commissions of the factors were limited to the net profits of the business. There is, however, nothing to indicate that there were any such profits, but the reverse. The court, moreover, found that, at the time of the levy, the factors were largely indebted to the plaintiffs upon the general account of their business [411] as factors, after crediting them with all advances made by them or either of them in the business. We cannot, upon the evidence, disturb this finding. The fact stands confessed, that the general balance against the factors and in favor of the plaintiffs was upwards of $26,000.' We are asked to assume that this wide discrepancy was owing to losses for which the factors were in no way at fault, and hence in no way responsible, merely because the plaintiffs, after the commencement of this action, turned over to the factors the outstanding credits and accounts of the.business, amounting, it is said, to $2,500. The true value of such credits and accounts does not appear, but assuming that they were worth what is claimed, yet that fact is insufficient to change the character of the general balance against the factors. If this large balance against the factors was owing to losses for which they were not responsible, but which should have fallen upon the plaintiffs, then the burden of proving such facts was upon the defendants. They have failed to make such.proof, and we are not at liberty to supply it by mere inferences, and remote at that. Had the evidence shown a general balance due the factors, still it would have been a grave question whether it could have been reached by an execution against the factors being levied upon the lumber, shingles, lath, etc., in their possession as such factors. Wharton on Agency, § 757, and cases there cited; U. S. v. Villalonga, 23 Wall., 42; Jordan v. James, 5 Ohio, 99. These authorities, in effect, hold that the factor’s right, although sometimes called a special property, yet is never regarded as a general ownership. It is liable to be defeated at any time by the principal paying advances made and liabilities incurred, and reclaiming possession of the property. The factor’s right, at most, is nothing more than the ownership of a debt secured by a lien or charge upon the property in his possession. It would seem, therefore, that such debt can, at least, be more appropriately [412] reached by some other process. But it is unnecessary here ■to determine the question, and hence we reserve it for future ■consideration. By the Gourt.— The judgment of the circuit court is affirmed.