The law being that a factor cannot pledge, the plaintiff was
clearly entitled to the benefit of it in this case. It was a pledge
for the factor's owu v debt. The cargo was not looked to for se-
curity. The accounts speak a language irreconcilable with the
defendants' allegation. They are headed "for account of all
concerned." Half commissions are credited to Hollinshead.
The judge says the case comes within Laussatt v. Lippincott.
Can two cases be more unlike? There the broker took the
goods to an auctioneer, committed them to him for sale, and re-
ceived a note in anticipation of the sale, and this according to
the course of trade. Here, the supercargo left the plaintiff's
foods for sale, but never received a dollar of advance on them.
t was essential to the defendants' case to show that he did re-
ceive an advance. If Hollinshead had received an advance in
coifee, it was within his instructions. It has been argued that he
did, as the invoice of the return cargo consisted partly of coffee;
but the evidence wholly negatives that it was for the plaintiff.
The ground taken by the defendants here is inconsistent. They
say the supercargo had express authority to take an advance ;
yet they prove they never saw or heard of the instructions ; that
they only knew Hollinshead.
If the defendants had shown the advance on the plaintiff's
goods agreeably to the authority given, the case would have
been with them.
The defendants were accountable, after they received no-
tice of the different interests, for a fair distribution. They
certainly knew in June, 1824, of Thomas & Martin's interest,
yet long after they pay Mr. Archer for his goods, and retain the
plaintiff's only. Pinto v. Santos, 5 Tauntou, 447, (1 Eng. Com,
Law Reps. 152.)
But it has been said, that the plaintiff affirmed the trausao-
233
209 SUPREME COURT [Philadelphia,
[Newbold v. Wright and Shelton.]
tion. There is nothing like this in the correspondence, or in the
evidence given.
ROGEKS, J. This was an action of assumpsit to recover the
proceeds of certain goods, which were sold by the defendants,
who were commission merchants in St. Jago de Cuba, on account
of the plaintiff.
The plaintiff, through Thomas & Martin, commission mer-
chants, made a shipment with others, in the schooner Sally and
Polly, which they consigned to C. Hollinshead, the supercargo,
with a letter of instructions to sell the goods to the best advan-
tage, as soon as the market would admit, and remit the proceeds
in good bills, specie, or coffee ; to sell for cash or a short credit.
He then adds, that if the goods could not be sold during his
r*910l s * a y> ne snou lcl put them in the *hands of a house of
J respectability, and obtain an advance of one-half, or
two-thirds of the value in coffee.
C. Hollinshead arrived in St. Jago de Cuba, the port of des-
tination, in May, 1823, and left there, for the United States,
about the 5th of July, 1 823 ; and being unable to sell the goods,
according to his instructions, he left them, as he was directed, in
the hands of the defendants.
Wright and Shelton, the defendants, by order of C. Hollins-
head, on the 19th of June, 1823, shipped on board the brig
Union, on account of whom it might concern, property, consisting
of sugar, coffee, and molasses, amounting to fourteen thousand
eight hundred and eleven dollars and seventy-three cents.
A copy of an account-current, was also exhibited in evidence,
dated the 4th of July, 1823, showing a balance against C. Hol-
linshead, of six thousand and sixty-two dollars and seventy-three
cents.
The defendants allege, that the shipment on board the brig
Union, was received as an advance on the goods placed in their
hands for sale, and that they are entitled to be reimbursed the
balance above stated, from the sale of the goods.
The plaintiff denied the fact, that the advance was taken on
the goods belonging to the plaintiff, and the other shippers.
He also contended, that if the supercargo did take such an
advance, he had no authority to do so : That the defendants
knew the goods were his, and that after they knew this, they
delivered goods and made payments to other shippers, when if
the advance was made on the goods, it should have been borne
rateably by all.
The first, it will be perceived, was a material point in the
cause. It is obvious that if the money was not advanced on the
credit of the goods, the defendants have not a pretence for say-
234
Feb. 15,1833.] OF PENNSYLVANIA. 210
[Newbold v. Wright and Shelton.]
ing, that they are entitled to reimbursement from that fund, for
a debt due from the supercargo himself. In order to show that
this was a transaction between C. Hollinshead and the defend-
ants, without any relation to the goods placed in deposit, various
documents were given in evidence, which have been fully ex-
amined by the counsel, in the course of the argument. They
have also contended, that if there was any agreement, about an
advance, which they denied, it was in reference to the shipment
made and owned by Hollinshead himself. As the court thinks
this cause requires a rehearing, it is not my intention to express
any opinion on the weight of the evidence. I will barely ob-
serve, that it is by no means clear, that any advance was ever
made on the credit of the goods owned by the shippers, other
than those of C. Hollinshead himself, and for the repayment
of which, the goods were deposited for sale in the hands of the
defendants. Although this fact is proved by one witness, the
documents would seem to speak a different language. This mate-
rial fact, the plaintiff complains, was withdrawn from the jury.
I have examined the charge with great care, and I cannot con-
sider it otherwise than as a binding direction *in law and r-^-i -> -i
in fact, favourable to the defendants. The jury could *
not have found otherwise, than for the defendants, with such a
direction, without disrespect to the plain intimations of the
court. The judge instead of leaving the fact of the advance to
the proper tribunal, charges the jury, that if they are satisfied
the defendants acted fairly and bonafde, according to the usage
of trade, at St. Jago de Cuba, or according to general mercantile
usage and course of trade, they are justified in retaining the
proceeds of the plaintiff's goods ; and that he is not entitled to
recover, &c., unless the jury can discover something unmercan-
tile in the defendants' conduct, something like fraud, something
to deserve blame or censure.
As to a general mercantile usage and course of trade, no evi-
dence whatever was given ; it is not pretended that there was;
the court refer in the charge to the usage peculiar to St. Jago
de Cuba, which was proved by two of the witnesses. If we
are to credit them, it is the usa<re at that place, to make an ad-
vance on merchandise, deposited by supercargoes with com-
mission merchants for sale ; and to treat the supercargo as the
owner of the goods. If so, according to the usage there, a
factor, contrary to the general mercantile usage and course of
trade, has a right to pledge the goods of his principal for his
own debt, and in short, to do any other act which a principal
might lawfully do, in the disposition of his own goods. It is
perfectly immaterial whether the fiduciary character of the su-
percargo be known to the commission merchants or not, or what
235
211 SUPREME COURT [Philadelphia,
'[Newbold v. Wright and Shelton.]
may be the nature and extent of his instructions, or whether
those instructions be known to them or not. They treat him in
all respects as the owner of the goods. This, then, is the usage
which the court has thought proper to leave to the jury, with
directions that if the jury believed such usage did exist, they
should find for the defendants. This usage (although very con-
venient doubtless to the commission merchants of St. Jago de
Cuba) in its utmost latitude, is not only contrary to the law of
this state, but, it is admitted, that it is in opposition to the law
of every mercantile country ; for notwithstanding the elaborate
arguments of the defendants' counsel, I am not permitted to
doubt, that it is the well established law of this state, of our
sister states, and of England, that though a factor may sell
and bind his principal, he cannot pledge the goods, as a security
for his own debt. The principal may recover the goods of the
pawnee ; and his ignorance that the factor held the goods in the
character of a factor is no excuse. The principal is not even
obliged to tender to the pawnee the balance due from the prin-
cipal to the factor, for the lien which the factor might have had
for such a balance is personal, and cannot be transferred by his
tortious act, in pledging the goods for his own debt. The rights
of principal and factor depend on the law merchant, which has
been adopted by the common law. A factor is but the attorney
of his principal, and he is bound to pursue the powers delegated
to him. If the pawnee will call for the letter of advice, or
make due inquiry, as to the source from whence the goods came,
r*9i 91 ^ e can di scover that *the possessor held the goods as
J factor, and not as vendor, and he is bound to know at
his peril, the extent of the factor's power. It may sometimes
be a doubtful question, whether the transaction amounts to a
sale, or a mere deposit, or pledge, as collateral security for a
debt. But w T hen it appears that the goods were really pledged,
it is settled that it is an act beyond the authority of the factor,
and the principal may look to the pawnee. There may, and
have been, different opinions expressed in the books, as regards
the policy of this rule, but however that may be, I agree with
the Chief Justice in Laussatt v. Lippincott, that the principle,
that a factor cannot pledge the goods of his principal, is too well
settled to admit of dispute. On the European continent it
would seem a different rule in some respects prevails. There,
possession constitutes title to movable property, so far as to
secure bona fide purchasers, and persons making advances of
money, or credits on the pledge of property by the lawful pos-
sessor. I understand the rule on the continent to be, that a
purchaser or pawnee, without notice, will hold the property
against the principal, and in that, it differs from the rule of
236
Feb. 15, 1833.] OF PENNSYLVANIA. 212
[Newbold v. Wright and Shelton.j
common law, where want of actual notice is immaterial. The
usage at St. Jago de Cuba goes to a greater extent than on the
continent of Europe, for the witnesses state their custom to be,
for the commission merchants to treat the supercargo as owner,
without any regard to the extent or nature of his instructions,
and whether they have notice of them or not. Such usage
should have every requisite to give it validity. A custom or
usage, to make it obligatory must be ancient (sufficiently so at
least to be generally known), certain, uniform, and reasonable.
A usage of so doubtful an authority, as to be known to but few,
cannot be regarded. Collins & Co. v. Hope, 3 AVash. C. C.
Eep. 149.
When this usage commenced we have not been informed. It
is not proved to have been ancient, or sufficiently so to be gen-
erally known. It was made by eight men to suit their own
convenience, and has been proved by two of them. That it is
unknown to the mercantile community in this state is very un-
certain. That it was known to the shippers is not pretended.
It does not possess a single requisite to constitute a custom.
The shippers relied on the law merchant, in which it is clear
that a supercargo is bound by his instructions. They author-
ized him in a certain event, to employ a commission merchant,
whom they must also have supposed would be bound by their
instructions. A factor may lawfully do whatever the usages and
course of trade requires ; and indeed, unless his orders restrict
him, he is bound to conform to the course of trade. Evans v.
Potter, 2 Gall. 13. But this is not a usage and course of trade.
It is a local custom, peculiar to that place, made for the con-
venience of eight persons, in opposition to the laws, as it is
known, in all commercial countries. It is not for them to pre-
scribe rules to regulate commerce, except as among themselves.
They must conform to the general commercial code. So far
from this case turning on the usage of St. Jago de Cuba, we are
of the opinion it should be thrown entirely *out of the r*9ion
question. It would be of pernicious consequence to the L
commercial world, to recognise such a custom, so proved, made
for the benefit of a few, opposed as it is to the general mercan-
tile law. It is an attempt to set up a custom in opposition to a
general principle of law, which cannot be permitted.
It has been further contended, that this case is similar in
principle to Laussatt v. Lippincott, 6 Serg. & Rawle, 386, and
the learned judge seems to have been of this opinion. I am so
unfortunate as not to be able to discover the resemblance. In
Laussatt v. Lippincott it was decided, that if a merchandise
broker to whom goods are delivered by his principal, with power
to sell, deliver, and receive payment, deposit them in the usual
237
213 SUPREME COURT [Philadelphia,
[Newbold v. Wright and Shelton.]
course of business, with a commission merchant, connected in
business with a licensed auctioneer, who advances his notes
thereon, the deposit binds the principal, who cannot recover the
value of the goods in an action of trover. The court considered
this as an advance in anticipation of a sale, and justified by the
uniform course of trade. Business to an immense amount, say
the court, has been transacted in this manner, and the usage
being established, it follows that when the plaintiff authorized
his broker to sell, he authorized him to sell according to the
usage, and when the defendants dealt with the broker, if they
had known the coffee was not his own, they had a right to con-
sider him as invested with power to deal according to the usage.
In Laussatt v. Lippincott, both parties were acquainted with the
usage, or were presumed to be so. But supposing the usage to
exist, it is not pretended that Mr. Newbold knew of it ; he can-
not, therefore, with any propriety be said to have authorized the
supercargo to deal according to the usage. In this the analogy
fails. It is acknowledged to be of the first impression, for there
is no case, as the Chief Justice says, exactly like it in the books.
Without intending to cast the least doubt on the case, I do not
feel disposed to extend the principle much further. If this had
been clearly shown to be an advance in anticipation of a sale, on
the plaintiff's goods alone, and the interest of the different ship-
pers had been kept entirely distinct, there would have been some
show of reason in likening it to Laussatt v. Lippincott. I am
prepared to say, which is in analogy to the case, I would not pro-
tect a foreign broker or commission merchant in an advance so
made. But what authority had the supercargo or sub-agent (for
Wright & Shelton, can be regarded in no other light), what au-
thority had they to intermix the interests of the shippers, by a
general deposit of their goods in the hands of the defendants, to
secure a general advance, even if it were made in anticipation of
a sale. The case of Laussatt v. Lippincott does not sanction
this, nor has any case been produced which does. It is in fact,
making one man's goods liable for another man's debts, the jus-
tice and policy of which I have yet to perceive. This is beyond
the power of a supercargo, or any other factor or agent. In
Shipley et al. v. Thymer et aL, 1 Maul. & Selwyn, 484, it is said
to be contrary to the duty of a factor to complicate the property
|~*91 4.1 ^ one w ^ tnat f *t ner proprietors, in one general
J advance taken on the whole cargo. If we look to the
letter of instructions by which the defendants are bound as well
as the supercargo, we cannot perceive any such authority, and
I am confident no prudent merchant, except under very special
circumstances, would give such authority. The shipments in a
general ship, are entirely distinct, although consigned to the
238
Feb. 15, 1833.] OF PENNSYLVANIA. 214
[Xewbold v. Wright and Shelton.]
same person. It is the duty of the consignee to keep them dis-
tinct; to open accounts against each owner. If we should yield
to a different practice it would lead to great complexity in busi-
ness, and as I verily believe, to innumerable frauds.
This case presents a singular feature. The defendants say,
that they made a general advance, on a general deposit of goods
owned by different shippers, and yet after they were aware of
the fact of the ownership (as the plaintiff says), they, paid the
full amount of the proceeds of sale to several shippers, and now
wish to be reimbursed for their general balance from the goods
of the plaintiff alone. This would mete out a hard measure of
justice to the plaintiff. If his goods are liable, they can only
be ratably so. The goods of the other shippers were also
liable, and it was the duty of the defendants to retain their pro-
portion out of the proceeds of sale. It will be perceived, that I
have considered the supercargo as a factor, and so far as re-
gards this case, I cannot understand how he can be viewed in
any other light. He is as much bound by his instructions as
any other factor. He can justify himself in deviating from
them, only in cases of necessity, some of which have been cited
by the defendants' counsel. The defendants also, it must be
observed, are sub-agents, and not purchasers.
],t has been also urged, that the plaintiff cannot sustain tnis
suit. As he was the undoubted owner of the goods, and the
money has not been paid over, I can perceive no difficulty in the
way.
HUSTON, J. After the fullest consideration, I have not been
able to concur in the opinion of the majority of the court, either
in the view taken of the facts, or the law of this case; and after
repeatedly reading every word of the testimony in this volumi-
nous record, I have concluded that the one-half of the facts must
be lost sight of, before the questions argued before us can arise.
I am aware that each party selects and argues on what he sup-
poses are in his favour. I have endeavoured to make up my
mind on the whole of the case.
In April, 1823, Thomas & Martin, commission merchants
in this city, having goods of the plaintiff's, put them on board
of the schooner Sally consigned to C. Hollinshead, supercargo,
viz., six bales of blue Moreas, containing nine hundred and sixty
pieces, the value including the charges, two thousand seven hun-
dred and nine dollars and twenty-four cents. Their letter of
instructions directed Hollinshead to sell to the best advantage,
as soon as the market would permit, and to remit in good bills,
specie, or coffee ; to sell for cash, or onshort credit, and adds,
if the goods could not be sold during his stay, to put them
239
215 SUPREME COURT [Philadelphia,
[Newbold v. Wright and Shelton.]
l~*21 51 *^ n ^ ie nail d s f a nouse f responsibility, and obtain
-" an advance of one-half or two-thirds in coffee. Six or
seven other merchants shipped goods in the same vessel con-
signed to the same supercargo. What their instructions were
does not appear, except S. Archer's, which is similar to the
above; to get an advance on the goods in sugar or coffee. Hol-
linshead was obliged to sell part of the cargo to pay freight and
duties, which it seems amounted to four thousand three hundred
and thirty-six dollars. He sold part of the plaintiff's goods;
two hundred pieces to pay part of the freight and duty on the
whole cargo, as he informed Thomas & Martin on his return.
(See their last letter to the defendants.) During his stay the
defendants sold part of the cargo. He had letters of credit on
which he drew bills for about seven thousand dollars, and got an
advance on the unsold goods from the defendants for above six
thousand dollars, and sent the goods thus purchased to this city.
They left St. Jago in June, 1823. Of this there was one thou-
sand three hundred and sixty-seven dollars and fifty-six cents
in coffee ; the rest in sugar, and some molasses ; in all fourteen
thousand eight hundred and eleven dollars. On the 23d of
June the invoice is made out of those goods shipped by order of
C. Hollinshead on account of whom it may concern. There is
nothing to show whose goods had been sold to pay the freight
and duties, of four thousand three hundred and thirty-six dol-
lars ; and up to this time I have not been able to ascertain that
Wright & Sheltou had any knowledge of who was the owner of
a single article of the outward cargo; and Brooks, the clerk of
Wright & Shelton, swears he did not know, and he believes his
employers did not. After this return cargo had sailed, on the
4th of July, Hollinshead receives the account- current, showing
a balance against him of above six thousand dollars; and on the
same day makes and leaves with them a list of the merchandise
left with them to be sold by them and make returns, and I sup-
pose kept a copy. At the same time he writes a letter in which
he refers to the list of goods to be sold on my account. Taking
the list and letter as one and connected, it was a matter to be
transacted on his account, and the returns to be made to him.
In the list however there was a matter relied on by the plain-
tiff: it stood thus :
300 barrels of flour at $17 $5 ; 100
3 bales Madrass hkfs., 100 pieces each bale. ) 9 7m
300 pieces, at 9, jV L
1 bale Ventepolam hkfs. 100 at 4 50 450
17 rolls floor mattig, at 12 204
S. Archer. 3,354
240
15, 1833.] OF PENNSYLVANIA. 215
[Newbold v. Wright and Shelton.]
2 trunks Madrass hkfs. 50 pieces each 1 00 at 9 900
I bale do ............ 100 900
- 1,800
Charles Bispham.
*1 trunk Madrass hkfs. 61 pieces at 9 549 r*n-i R -\
I bale Meesulapotam 100 pieces at 4 400
949
Marmaduke Burrouyh.
760 pieces Succatoons at 2J 1,900
Thomas & Martin.
From the names written under certain parcels it was inferred
that notice was given to Wright & Shelton, who were the own-
ers of the several parcels of merchandise ; and from the direc-
tion to them to retain for him two and a half per cent, commis-
sion, there was also notice that C. Hollinshead was supercargo
and not owner. The first conclusion is denied, and Brooks
swears it was not so considered or understood, and might be a
mark of whom he got the goods from ; L ut as he sent home a
cargo sufficient to pay them all, they could not know to whom
he would or would not deliver the return cargo, and were not
bound to know. The defendants admit they knew he was a
supercargo, but say, as the owners had trusted him to bring and
to make returns, they were not bound to make any inquiries,
or to know how the matter was settled on Holliushead's return.
The oath of Brooks is positive, that the advance was on the
whole goods left, and not so much on each parcel. Hollinshead
returned immediately after the 4th of July, and was here early
in August. How the return cargo was disposed of does not
appear. The defendants sold the flour as appears by their
accounts for less than seventeen dollars ; some for sixteen per
I \arrel, it produced about
$4,786 50
deduct charges 259 26
$4,527 24
They also sold part of the other goods (not Thomas & Mar-
tin's) as appears by the several accounts among the evidence ;
and by comparing the articles sold with the above list of arti-
cles, it will appear they sold part of those above the name 8.
VOL. rv. 16 241
216 SUPREME COURT [Philadelphia,
[Newbold v. Wright and Shelton.]
Archer, part of those above C. Bispham, and part of those
above the name M. Burrough, none of whom, so far at we
know, ever objected, and all of whom got the proceeds of the
remainder on the order of Hollinshead, and none of whom
asked for anything from the defendants until they severally had
Hollinshead's order.
Several exceptions are taken to the charge, but which in fact
amount to only two. In the first place, it is apparent the charge
has not been treated fairly. What is sent here is the abstract
or notes from which to charge the jury, containing to be sure
the points of law stated to the jury, but not all the evidence nor
f*9171 * ne na lf f the words *uttered, e. g., we find this: "Ex-
- amine the cases from Patterson v. Tash, down to Laus-
satt v. Lippincott, and the usage of trade." Now this was not