HC Deb 17 May 1824 vol 11 cc756-60

On the order of the day for going into a committee on this bill,

Mr. Robertson

said, that the monied men who were in the habit of making advances on goods, and who were the prinpal supporters of the bill, had no reason for introducing it into the House; because, when they made their advances, they had always the means of ascertaining whether the property which was pledged to them, was really vested in the party pledging it. Foreign countries held out the same security to Englishmen sending their goods thither for sale, as we, by this bill, were about to deprive foreigners of in England. He would ask merchants whether they would willingly consign goods to the continent, if the agents to whom they were consigned were allowed to pawn them; and, in the event of the failure of those agents, to be deprived of their property? The bill was calculated to destroy the warehousing trade of the country.

Mr. Huskisson

said, if he thought the bill injurious to the commerce of the country, and to the warehousing system, he certainly should not give it his support. But he was convinced it would have a contrary effect. The question was very material as it affected the commercial law of the country, and the committee of the last session, which had inquired into this part of the practice of our foreign commerce, had made a report on the subject which contained a great deal of curious information. He had, however, not suddenly formed a determination on that report, but had reserved to himself to consider the question during I the recess. If this had been a legal question simply, or if it had been a practical question of trade, he should not have deemed himself competent to the forming a decided opinion on it. But it was in reality a great question of commercial policy, in determining which, neither the technicalities of the law, nor the details of the practice of trade, were of much concern. It was certainly not to be denied, that whatever obligations existed between principal and agent, or, as it was technically called, between merchant and factor, should be strictly observed, and that if the agent exceeded the powers delegated to him by his principal, he should be severely visited; but, in the consideration of the present bill, this was not the question. The point at issue was, what should be done with the third party who advanced money on goods pawned to him by the agent who had the possession and the ostensible property of them? It was quite clear that an agent, to whom goods were committed for custody, exceeded his powers if he pawned or sold them, and should be punished for such an abuse of confidence. But if the possession, on the part of the agent, were accompanied by all the symbols of property, it was not fit that a third party, who had trusted to those symbols, should suffer. What did the principal do? He selected his agent, and entrusted him with the power of shewing an appearance of property. If he selected an unfaithful agent (though it was proper that the agent should be punished for his infidelity), was it not also proper, that the principal, rather than a third party, should bear the consequences of the acts of the agent, over whose selection that third party had no control? It was said, indeed, that the possession of personal effects was no evidence of property, except as to goods sold in open market. This might be sufficient in the early stages of society, when transactions were few, open, and conclusive. But all business was carried on by credit. A merchant who sent from Ireland to the continent his butter or his other goods, obtained an advance immediately on his consignment. It was always in his power, by the bill of lading, to limit the power of the agent, so that the agent really possessed no power but what the principal chose to impart to him. But, if the bill of lading was of such equivocal import as to convey to third parties the idea that the absolute property was vested in the agent, on the principal surely the loss should fall.—If the House would take the trouble to read the cases in the report of the committee, it was impossible, he thought, to refuse coming to a decision in favour of the bill. One case was as follows; a merchant bought a quantity of seed from another, and requested the seller to allow it to remain in his warehouse. This was complied with, and after some time the purchaser asked the person in whose warehouse it was deposited, if he had any objection to advance 2,000l. on the seed? The person so applied to, knowing that the seed had not changed hands since the sale, and that it was worth more than 2,000l. advanced the money; the purchaser, after receiving that sum, became a bankrupt: the holder of the seed was about to sell it to cover the advance, when a third party stept in (a merchant at Antwerp), who said, "the purchaser has been acting as a factor for me: he had no power to pledge the seed." The court decided in his favour, and the 2,000l. advanced under such circumstances, and on the faith of such evidence of property, was lost. The existing law had been found so inconvenient, that the courts had deemed it necessary to make an exception in respect to bills of exchange and Exchequer bills deposited in the hands of bankers. A bill of lading, accompanied by the possession of the goods, was such a symbol of property, that a third party dealing bona fide with the possessor of the goods, and having no means of ascertaining whether he was not the owner, ought to be legally protected. The agent was selected by the owner, who had consequently the means of guarding himself against the possibility of the document which he placed in the hands of the agent being misapplied; while the third party had no possibility of ascertaining the extent of the agent's responsibility. The owner of the goods had the power of selecting his agent—he had the power of punishing him for misconduct—he had the power of restraining the negociability of the instruments with which he was intrusted. Was it fair or equitable, therefore, that a third party should suffer for misconduct of an agent, against which it was impossible for that third party to provide, but which might be guarded against by the discretion of the owner? The hon. member had said, that the warehousing system would be rendered inefficient if this bill were suffered to pass into a law. Now, he was so far from acquiescing in this opinion, that he thought the warehousing system would be wholly inoperative, if, while we invited foreigners to deposit their goods in our warehouses, we at the same time suffered the law of merchant and factor to remain on so vague and uncertain a foundation, as to afford no security to the deposit. At a period, when important changes were taking place in the commercial world, it was incumbent on us to avail ourselves of all the advantages which our wealth and position presented to us. Under the present circumstances of the country, and with a view of securing those commercial advantages, he thought it peculiarly important that the bill should pass.

Sir J. Newport

thought the House and the country were greatly indebted to the right hon. gentleman for his exertions in promoting the commercial interests of the country.

Mr. Sykes

said, that the bill conferred no new powers, and gave no new privilege to the consignors of goods. The plain state of the case was this. There was a consignor who gave his goods to a consignee, who sold them to a third party in the market; and that third party became responsible for any default of the consignee to his employer, with whom he had no conference whatever in the business. Surely the loss, if any liability to loss occurred in consequence of the default or insolvency of the consignee, ought to fall on the consignor, who intrusted his goods to him, and not on the third party, who was the mere purchaser in the market, and who had paid for them in the way of trade.

The Solicitor General

also thought, that the consignor, who could qualify in any manner he thought proper his own mandatum, and protect himself from his consignee, ought to be responsible for the acts of the latter, and not a third party, buying and paying fairly in the market.

Mr. J. Smith

said, that when the question was first introduced it was very intricate; but the right hon. gentleman opposite had obviated the difficulties which had obstructed his comprehension. What could be more unjust than the old plan which was, that if a man wanted 100 tons of hemp, and went to a broker who thought proper to sell for 38l. a ton what he was ordered by his principal not to sell under 40l. in such a case the sale was to be null and void; and though that hemp was sold ten times over by the buyer, still the misconduct of the original agent vitiated all the subsequent sales, and the purchasers might be ruined whilst dealing, so far as they were concerned, fairly and openly in the market? He thanked the right hon. gentleman for a bill which went to remedy so much injustice.

The bill was then committed.