§ Mr. J. Smithpresented a petition from the Merchants and Bankers of London, praying for an Alteration in the existing Law of Lien upon Goods sent on Foreign Ventures. He stated his intention of moving for a select committee to inquire into this subject.
§ Mr. Scarlettsaid, that the law, of which this petition sought an alteration, had prevailed ever since the merchant law had been a part of the English code. It did not permit factors to pay their own debts with the produce of goods confided to them by employers in other countries. The learned gentleman proceeded to argue, that this law had been borrowed from the maxims of the civil law, which prevailed all over the continent, and that therefore, as it corresponded with the regulations abroad, there could be no reason for altering it as regarded commercial convenience, and Still less on the score of honesty and good policy. Nothing could be more just than that factors should be restricted from exceeding the authority of their principals, and nothing more likely to prevent frauds. He must object to any alteration in the present law.
Mr. Baringsaid, that the effect of the law as it at present existed, was to prevent the circulation of goods. Its operation had been a source of complaint from the earliest period that he could recollect any thing of business. British merchants were not generally thought more fond of encouraging frauds than the members of his learned friend's profession. The error in his learned friend's argument had arisen from his not understanding the nature of trade. He had thought that there were two sorts of persons—merchants and factors; but in commerce merchants were factors, and factors were merchants, both purchasing goods upon commission. The great inconvenience felt from the present system was, that money could not be raised by the hypothecation of goods, because it was not known to whom they belonged. The object of the proposed alteration would be, to establish the principle, that 212 the same care should be taken in confiding goods to agents, as prevailed in the remission of money. If money were remitted, the possession passed from the hands of the principal to the agent, and no lien was created; the same freedom was sought to be established for the circulation of merchandise. From the very nature of commercial dealings, they could not be without great risk and some inconvenience; but the question was, whether greater benefit would not arise from a law which should leave merchants free to deal with those persons in whom the possession of the goods should be. This was obviously impossible, if it were necessary, on all occasions to inquire into the instructions of the principal. The petition was one of the greatest importance, and he trusted that it would receive from the House the attention it deserved.
Mr. Huskissonagreed with the hon. gentleman as to the importance of the subject. He held a petition, which he should present in the course of the evening, from the merchants, and nearly all the persons of capital in the town he had the honour to represent, the prayer of which was similar to that now before the House. They were unanimous in their wish that the existing law should be altered. He trusted that the learned gentleman would, for this reason, not oppose the appointment of a committee. He did not wish that the principle of the law should be altered; because he felt, I that whatever good a change of that kind would bring with it, would be greatly overbalanced by the evil which it would create. The hon. gentleman said, that the alteration which was proposed would merely have the effect of preventing a factor from paying his debts with the goods of his principal. If that were all, there would be no necessity for referring the question to a committee. But there I were, in fact, other considerations which a committee might with propriety inquire into. Great inconvenience arose from the present state of the law; and he knew that judges on the bench, when deciding on particular cases, had alluded to the injustice which was connected with it. But it was not necessary, in removing these inconveniences, that the principle of the law should be altered. If they considered the subject in a committee up stairs, it would be only necessary to inquire whether the law might not be so altered, as to prevent the frauds which now prevailed under it.
§ Mr. Scarlettobserved, that many merchants received large quantities of goods from foreign consignors, and was it fitting that they should be met by the exclamation, when they sustained a loss—"Oh, you should have taken due caution before you advanced money;" while no such caution was required from a London banker.
§ Mr. Ricardosaid, he would put the case in this way: suppose an individual employed him as an agent, to dispose of goods, and that he was dishonestly inclined, and defrauded his principal; in that case, who ought to be the loser, the man who said, "I will not pay a single penny without the goods are delivered lo me;" or the man who did not make any inquiry, but lent his mono}' upon mere representations? It was not desirable that either party should lose; but one must suffer, and the sufferer ought to be the individual who did not use proper caution.
§ Mr. J. Martincould see no reason why the same rule should not apply to bills of exchange. He admitted, that persons advancing money had a right to know whether the property really belonged to the individual. But this information could not always be obtained; for he had known many cases where the most solemn assurance was given, that certain property belonged to particular individuals, when, in fact, such was not the case.
§ Ordered to lie on the table.