said to the jury ; but a memorandum to himself of the course
he was to pursue in his address to the jury ; and after being
assigned as error, .and much insisted on, was admitted to be
what I have stated. Something similar occurs repeatedly in
what is here called the charge. In a long and complicated
cause, where much testimony is given, and many cases are cited,
the judge in delivering his charge to the jury reads much, or
perhaps all the testimony, and refers to many of the cases, per-
haps reads some of them, and when requested to reduce his
charge to writing, he never inserts in it the testimony read by
him, never copies the cases commented on. The meaning of
the law in its phrase, and in the uniform construction of it
only requires his opinion on the matters of law applicable to
the case.
The legal position, and in truth the only matter in contest
here, was, that under the circumstances of this case Hollins-
head had a right to deliver these goods to the defendants, com-
mission merchants, to be sold, and account for the price, and
had a right to receive a cargo from them on the credit of the
outward cargo so left with them ; and on the fullest considera-
tion I think this opinion right on authority and on principle.
Before I come to that matter I shall consider a previous point
or two. The law as to the power of a factor to pledge, arose
on a question whether he could pledge the goods of his princi-
pal for his own previous debt, or for money then advanced for
his own use. That was the case of Patterson v. Tash, and that
was the matter decided in most of the cases, perhaps in all, be-
fore 1776 ; and it is not contested here. The fact whether this
return cargo was for the use of the owners of the outward cargo,
or of Hollinshead, is a fact for the jury, and was so left by the
court ; but he intimated an opinion on the facts. It has often
been decided that he may do so. I am not sure he might not
242
. 15,1833.] OF PENNSYLVANIA. 217
[Newbold v. Wright and Shelton.]
have gone further, and told them it was a conclusion of law
from the facts proved, which might be rebutted by proof of col-
lusion and fraud between the defendants and the supercargo.
Let us look at the matter. Several men send goods in a vessel
and appoint a supercargo ; and we have evidence that the plain-
tiff and one other, directed him if he could not sell, to give the
goods to a commission house and procure in advance a return
cargo in coffee and sugar. We have no evidence of what the
other shippers directed ; but there is no dispute except with the
plaintiff. The plaintiff and the other shippers had confidence
in the supercargo, which continued for more than a year. He
sold above six thousand dollars worth of their goods through the
defendants; he paid freight and duties, &c., to above four thou-
sand dollars through the defendants ; during all this time the
defendants do not know who was the shippers of the goods sold,
or of those unsold. It is avowed, and was to the plaintiff ex-
pressly told by Hollinshead (see their last letter) that he had
sold *part of their goods to pay freight and duty on the r^-i Q-I
whole cargo ; in other words he mingles all the goods L
as long as he stays, and as he, or the defendants for him are
selling; he puts all unsold into the defendants' store, and
directs sale, and receives a return cargo the defendants shipped ;
not so much sugar to one, and so much to another; nqt so
many bags of coffee to one, and so many to another; but
generally by order of C. Hollinshead for whom it may concern.
Were the defendants bound to know to whom this return cargo
was allotted when it came to Philadelphia ? Could they tell
Hollinshead your principals have trusted you, but we will not ?
Were they bound to send a supercargo and to settle with all the
shippers here? This is not pretended. How then could they
know who was to receive the proceeds of what should be left
after payment of fheir own advances? Were they not justified
in leaving it to Hollinshead to settle here, and to write to them
to whom the overplus iu their hands was to go ? This was what
was meant by the sales being made on his account, and their
conduct as to the residue being subject to his order ; and is it
not clear that every shipper knew this, and agreed to it ? Bisp-
ham, and Burrough, and Archer, got each the order of Hollins-
head, and on that each received portions of the goods. Thomas
& Martin, who I have considered as the plaintiff, got his order ;
they were told it must be got. They assert no right without
it ; they get it, and send it, but after all the others, and only
two hundred and ninety-three dollars left. I have seen no case,
and do not believe it ever was, or will be decided, that a com-
mission house abroad was bound to do more than ship the return
cargo according to the orders of the supercargo. They are not,
243
218 SUPREME COURT [Philadelphia,
[Newbold v. Wright and Shelton.]
and cannot be bound to come here and see that it is divided
ratably among those concerned ; and without knowing that,
it is impossible to know who will get any surplus which may be
abroad. I think then the judge might have told the jury, that
the return cargo must be taken to have been for the owners
here : That unless the defendants colluded with Hollinshead to
defraud the owners, all was right : That as all the persons here
procured Hollinshead's orders for their respective goods, they
all knew the whole goods were left subject to his order, and the
plaintiff among the rest, and that it was too late to allege that
the goods were left otherwise, at the end of eighteen months,
so as to throw on the defendants a responsibility or loss, to
which no contract, no understanding of the parties, and no
usage of merchants would subject them.
It has not yet been said, that a factor cannot pledge his prin-
cipal's goods to raise money for his principal, where he has the
express direction of the principal to do so ; and I shall assume
it that it cannot be so said. Here, then, we have the express
direction of Thomas & Martin, if their goods cannot be imme-
diately sold, "to put them into the hands of a house of respect-
ability, and obtain an advance of one-half or two-thirds in
coffee." Hollinshead sold two hundred pieces to pay freight
and duties on the whole cargo, and told them so. The defend-
r*91Q~! an * s are no * answera ble for this; in fact no objection is
J *made to it ; the rest are put into the hands of the de-
fendants, who do advance coffee, Now, were the defendants
bound to see that the plaintiffs get the coffee, or a share of it?
They were not, and they were never told that the plaintiff did
not for one year, and not then. In May, 1824, they were
asked for an account ; that account would be necessary for
a settlement here. Soon after they are requested to procure
Hollinshead's order. They delay this till late in the fall, and
do not send it for two weeks after they have it. They had be-
fore stated that they wrote because Hollinshead was sick and re-
quested the remittance to themselves, but they never said Hol-
linshead's letter was not necessary, or that the defendants were
not bound by his instructions. The question then, must be left
to a jury, if there can be any doubt about it, whether the defend-
ants were not justified if they had seen the plaintiff's letter
of instructions, and whether they did not comply with it ; for, I
repeat, the defendants were not bound to come here and see that
the plaintiff's own agent delivered them their share of the goods,
and that not hearing from the plaintiff until next year, they
had a right to presume all was right.
The course of business is constantly changing, and the names
change. What were once called factors are now commission
244
Feb. 15, 1833.] OF PENNSYLVANIA. 219
[Newbold v. Wright and Shelton.]
merchants. This alone would not change the rights of parties,
but the duties have changed, and the powers have changed. A
great part of the commerce of the world goes through their hands.
It will not be attempted to define all their duties or authority,
but whatever power they constantly exercise, and everybody
knows they exercise, is part of their contract with those who em-
ploy them, and may be lawfully confided in by those who deal
with them. A custom of old, affected real property as often or
more so than personal property, and could not exist without cer-
tain requisites. It is an entirely different matter from what is
called the usage of trade, or usage of a particular trade, which
may be good though the trade itself is not thirty years old. The
usage of a trade is spoken of in every law book, and recognised
as binding on those engaged in it, in every country, and where
not contrary to some positive law, or to the general law and
policy of a nation, and not malum in se, forms a part of and is
considered in deciding on all cases in that trade. In short, it is
equal to an express authority to do what all others in that trade
do, and legalizes all acts done according to it. Whether such a
usage exists, is to be decided by a jury ', if found that it exists,
the court are to say whether it is within any of the reasons
which make it bad. Laussatt v. Lippincott.
If it is the usage that a commission house shall take goods in
advance on an outward cargo, and pay itself out of the amount
of sales, this must be presumed to be known to all who engage
. in the trade ; and particularly is this the case, if, when informed
of it, the principal does not object. The authorities on this
subject go farther; a principal knows that his factor is and has
been in the habit of buying *aud selling for the principal r*oo/yi
in the factor's own name, and writes to him advising of '
the price at which he may sell the goods on hand ; the factor
sells, for less and fails ; the principal detains the goods from
the purchaser ; the latter shall recover them, because the owners
who have suffered the factor to continue dealing for them
in the factor's name, shall not set up a latent special restriction
to injure a fair purchaser. Pickering v. Ass. of Hay ward and
another, 15 East, 38.
This case has been put by the plaintiff on the authority of
English decisions ; and I admit the authority of Patterson v.
Tash ; but it, and all the cases which say a broker cannot pawn
goods, express or imply that they are paAvned for the broker's
debt. To pledge for a debt of the principal is another matter.
The factor himself may advance money to his principal on the
goods, and has a lien on them for his own repayment ; he may
then pledge them to himself. A factor may employ a sub-factor ,
may not he also advance to the principal and retain till paid ? I
245
220 SUPREME COUET [Philadelphia,
[Newbold v. Wright and Shelton.]
have found no case where the factor took up money for his prin-
cipal on a deposit of the principal's goods, except to pay duties,
and that is binding, not I apprehend because it was to pay duties,
but because it went to the principal's use. But the goods here
were not pawned ; a pawn cannot be sold by the pawnee, unless
by modern decisions, after great delay. Now the defendants had
authority to sell these goods the minute they received them ;
they were put into their hands to be sold ; or, to speak more
properly, were sold to the defendants, but the price to depend on
what could be got for them by the defendants ; at least it par-
took more of a sale to the defendants than a pawn. The course
of the business here was unknown when Patterson v. Tash was
decided ; and the case is to be decided on the principles applica-
ble to the course of trade, that is to the intention a*id under-
standing of the parties. Let us now look to the authorities. 1
Maule & Selwyn, 140, has been cited to prove a broker cannot
pawn, and it proves he cannot pawn the goods of his principal
for his own debt. Lord Ellenborough, however, says, " the de-
fendants having authority to sell the goods, if they advanced
money for any purposes connected w T ith the sale, and, for which,
brokers, in the ordinary course of disposing of goods, are ac-
customed to advance it, would have had a lieu in respect of such
advance." This case then recognises the effect of usage, and
that under it goods may be left for sale by a broker, and an ad-
vance made, and a lien for such advances, or, in other words, the
defendants could retain for their advances out of the proceeds of
their sales. Le Blanc, Justice, says, if advances were made to
take up the bill of the consignor, and were appropriated to that
purpose, there would be no mischief, and that might be con-
sidered in furtherance of the authority given by the principal;
and Bailey, J., says, cases may, perhaps, exist where a principal
would be bound by a pledge by his factor. I apprehend, how-
ever, if money was advanced to a supercargo to take up a bill of
r*ooi -| his principal, it would not be necessary that *he should
J go along and see it paid to the holder of the bill ; he
might confide in the person in whom the principal had confided.
The case of Laussatt v. Lippincott, 6 Serg. & Rawle, 386,
however decides every point in this case ; it admits Patterson v.
Tash, to be law; it decides that an usage of trade may be
proved ; that the very usage proved in this case is not in viola-
tion of any principle of law; that a man may authorize another
to pledge his goods ; that this authority may be expressed or
implied from the usage of trade. The plaintiff lived in this
city and employed a broker here to sell his coffee, not under
twenty-seven cents per Ib. The broker took it to the defend-
ants, auctioneers, and in four separate parcels receiving each
246
Feb. 15, 1833.] OF PENNSYLVANIA. 221
[Newbold v. Wright arid Shelton.]
time the defendants' note, in all near five thousand dollars. The
broker only paid six or seven hundred to the plaintiff. The de-
fendants never asked the broker whose coffee it was, because he
and other brokers dealt in that way. It decides that leaving
goods to be sold and receiving part of the price in advance, is
not a pledge, but more like a sale; that the defendants if they
knew the broker was not the owner might deal with him accord-
ing to the usage, and the defendants had a power to sell irre-
vocable to repay themselves ; and decides that it is wholly im-
material whether the advance made to the broker came to the
hands of his principal or not.
This case was decided twelve years ago and was supposed to
have settled the law. It was never complained of. The law of
England is now by act of parliament made the same as this de-
cision. ' So is the law of New York by a late statute. But
what is more to the purpose, all the mercantile transactions of
the community have been based on it. To overrule it would
unsettle all the transactions under it. The law as there settled
meets the universal idea of justice, and conforms to the usage
of the whole mercantile world at this time. If other authority
were wanting, it is found in the opinion of Justice Story, in
Evans v. Potter, 2 Gallison, 13, according entirely with Laus-
satt v. Lippincott. The usage was acted on and fully proved
by the plaintiff's witnesses, Jacob Thomas and James Martin, who
swore they had advanced money to the plaintiff on these goods,
had a right to send them by Hollinshead, and were not answer-
able to the plaintiff. This proves that goods left with a com-
mission merchant, on an advance of money by him, are nearer
being sold to him than pledged. And it proves they knew of
and acted according to the usage at St. Jago in directing Hol-
liushead to leave the goods for sale, and take an advance on
them. Now the usage proved, could justify them in this :
nothing else. Again, every owner knew of the terms on which
Hollinshead left the goods, and not one complained. It will
be tbund that although Bispham and Burroughs and Archer
each got back some of the goods left, yet that more or less of the
goods of each of them had been sold by the defendants and passed
to the credit of the advance to Hollinshead, and not one of
them complained. If Hollinshead, though a bare consignee,
had a right to employ the defendants to sell these goods and to
account to himself, and to him they must account, *he r^ooon
could have sued them and recovered and they could not '
have set off a debt from Newbold to them to prevent his recov-
ery. 18 John. 24, Toland v. Murray. Murray applied to
Chancery for an injunction, but Chancellor Kent decided as the
court of law did. 3 John. Chan. 569. See also Assignees of
247
222 SUPREME COURT OF PA. [Philadelphia,
[Newbold v. Wright and Shelton.]
Dowding v. Goodwin, Cowp. 251. The sub-factor had agreed
to account to the factor, who was answerable to the principal,
and who had a right himself to retain against his principal for
his own advances or responsibilities.
I have omitted the authority of Chancellor Kent, 2 Com. 489,
of the first edition, and 626 of the second edition, because I
will use it also for another purpose. He adopts the law as laid
down in Laussatt v. Lippincott in the body of his work and the
distinction there taken between a pawn strictly, and an advance
from a commission merchant who receives to sell. In a note to
page 491, he informs us, the law had been changed by statute
in England, and since in New York, and says, 626, "a great
deal may be said against the principle of the rule, and with the
exception of England, it is contrary to the policy of all the
commercial nations of Europe. On the continent of 'Europe
possession constitutes title to movable property, so far as to
secure bona fide purchasers, and persons making advances of
money, or credit on the pledge of property by the lawful pos-
sessor." Now this proves, to my satisfaction at least, the law
of St. Jago independently of the testimony given in this cause,
and accounts for the statement of the witnesses, that they knew
of no judicial decisions on the point. Courts never decide
where no one disputes. The law is so well settled that the lex
loci contracting governs in the construction and validity of a con-
tract, though it is to be enforced by the laws of the country
where suit is brought, that I shall not cite authority to support
it. I cannot see then, how we can avoid saying, the plaintiff is
bound by this contract, which is valid where it is made, and
valid here too, if made here, unless we overrule Laussatt v. Lip-
pincott.
Judgment reversed, and a venire de novo awarded
Cited by Counsel, 2 Wh. 490 ; 6 W. & S 297 ; 2 Barr, 290 ; 4 Barr, 19 ; 5
Barr, 306, 334; 7 Barr, 389; 1 J. 167, 218; 2 J. 143; 7 H. 245; 12 C. 413;
2 Wr. 233 ; 3 Wr. 59 ; 8 S. 468 ; 13 S. 272 ; 14 S. 364 ; 15 S. 334; 16 S. 433 ;
'i2 S. 132.
Cited by the Court, 4 Wr. 243.
END OF DECEMBER TEEM, 1832. EASTERN DISTRICT.
248
CASES
PENNSYLVANIA.
EASTERN DISTKICT MARCH TERM, 1833.
[PHILADELPHIA, MARCH 14, 1833.]
Harvey against Turner & Co.
IN ERROR.
Where an agent sells the goods of his principal on credit, taking a note for
the price gives notice of the sale to his principal, and credits him in account
with the amount of it, but omits to give notice of the non-payment of the note
at maturity, the agent becomes responsible for the whole amount of the debt,
and it is not necessary, to enable the principal to recover, that he should prove
he has sustained any damage. The omission to give reasonable notice, makes
the agent an insurer of the solvency of the purchaser.
WRIT of error to the District Court for the city and county
of Philadelphia.
The defendants in error were plaintiffs below, in an action of
indebitatus assumpsit brought against the plaintiff in error to re-
cover back the sum of nine hundred and forty-three dollars and
two cents, as money lent and advanced by the plaintiffs below
to the defendant below. The main question in the cause was,
which of them should bear the loss of that sum, which was the
price of twenty-six bales of cotton sold by the plaintiffs on ac-
count of the defendant.
The plaintiffs were commission merchants in Philadelphia,
and the defendant a merchant residing in Newbern, North Car-
olina. He was in the habit of shipping to the plaintiffs various
249
223 SUPREME COURT [Philadelphia,
[Harvey v. Turner & Co.]
articles of produce, such as rosin, molasses, cotton, &c., for the
purpose of making sales and returns, and the plaintiffs occasion-
ally shipped to him. In the mouth of September, 1822, the
defendant shipped to the plaintiffs twenty-six bales of cotton
for sale, and the plaintiffs, on the 13th of November following,
r*994l so ^ them to one John Hastings on four months' *credit,
J taking for them the note of Hastings and wife. Hast-
ings subsequently proved to be insolvent ; the note was not paid
at maturity, nor afterwards, and the amount of it constituted
the sum in controversy.
It appeared in evidence that the plaintiffs carried on an
occasional correspondence with the defendant, until September,
1823. They advised him of the sale on the 15th of November,
1822, and stated it in an account-current dated 31st of Decem-
ber, 1822, which was forwarded to him. But they did not ad-
vise him of the non-payment of the note until about the 26th
of September, 1823, when the defendant being in Philadelphia,
they handed him an account-current of that date, in which they
charged him with the amount of the note, having credited him
with it in the account-current previously rendered on the 31st
December, 1822. It appeared in evidence also, that the plain-
tiffs were in the habit of rendering accounts-current to the de-
fendant at the end of each year, or at the visit which the defend-
ant annually made to Philadelphia. From the correspondence
between the parlies it was apparent, that the defendant had
intended to be in Philadelphia in the year 1823 several months
before he actually arrived. He had written to that effect,
and was expected by the plaintiffs. No account-current had
been rendered subsequent to the dishonour of the note prior to
the arrival of Harvey in Philadelphia. The plaintiffs were
largely in advance to the defendant, independently of the note
when it arrived at maturity, and continued so until the 13th
of October, 1823, when the sum of one thousand two hundred
and sixty-two dollars and seventy-two cents, was paid to
them, leaving unpaid and subject to controversy, nine hun ired
and forty-three dollars and two cents, the amount of the sale to
Hastings.
It further appeared, that when the note fell due, the plaintiff
refused to renew it. They saw Hastings in the city, and threat-
ened suit. He promised to give them security. They pressed
him for payment by letters written both by themselves and by
their counsel, and on the 8th of August, 1823, obtained his bond
and warrant to confess judgment in favour of the defendant as
obligee, and on the same day entered up judgment against him
in Delaware county, in which he resided ; but in consequence of
his iucumbrances the judgment proved unavailable. This bond
250
March 14, 1833.] OF PENNSYLVANIA. 224
[Harvey v. Turner & Co.]
was tendered to the defendant in September, 1823, and in the
mouth of November following this suit was commenced.
The defendant contended that Hastings was not worthy of
credit : That the plaintiffs did not make proper inquiries as to
his standing, and insisted on other matters of fact of which there
was evidence, which went to the jury. In point of law he con-
tended
1. That it was the duty of the plaintiffs as agents to apprise
the defendant, their principal, of the non-payment of Hastings'
note within a reasonable time, and that if they did not do so they
must sustain the loss incurred.
*2. That it was the duty of the plaintiffs to institute r^o-n
legal proceedings against Hastings, in a reasonable "-
time, and not having done so, the loss must fall upon them.
In delivering his charge to the jury, Barnes, president, after
stating the evidence and giving his views of it, left it to the jury
to determine in the first place, whether Hastings, at the time the
plaintiffs sold to him, was entitled to credit, and if he was not,
whether, in the next place, the plaintiffs being ignorant of that
fact, used reasonable diligence and care in inquiring into his
credit. He then stated to them, that if their opinion should be
with the plaintiffs on this part of the case, then another question
arose for their consideration, namely, whether the plaintiffs were
bound to give notice to the defendant of the non-payment of the