HC Deb 20 May 1842 vol 63 cc594-7

On the Order of the Day, for the House going into Committee upon the Merchants and Factors Bill,

Mr. Gladstone

rose to state the object of the measure. It was a bill not now, so far as regarded its substance, introduced for the first time. It had been introduced in the House of Lords in the course of last Session, and had only been prevented from passing into a law then by the abrupt termination of the Session. The bill was founded upon the representations of all the principal mercantile men in every great branch of our foreign trade and commerce in London and in Liverpool; and it had, as he believed, the universal assent of the commercial world. Its purpose was to give full effect to a series of changes which had been already introduced into the law, with the object of meeting the growing wants of our commerce. The groundwork of this bill was the position, that it was highly expedient, for the extension of commerce, to give every facility and security to the system of advances on goods, which now attended almost every step in mercantile transactions, and which might be said to form the instrument for carrying on the trade and business of the country. This bill, therefore, proposed, that all parties dealing with agents having the possession of goods shall be enabled to deal with them as if they were principals, and that with regard to bonâ fide transactions affecting those goods they shall be protected against the principals. This principle had been already partly affirmed in the 6th George 4th, making good the sales, and (under certain circumstances) the pledges by agents of goods as against the principals. There were, however, some limitations under that act to the principle which it laid down; the first was, that as regarded pledges, it did not apply in cases, where the party dealing with the agent ! knew, or had sufficient ground for knowing, that he was only an agent. That was an important limitation, and it was proposed to remove it. It was a very doubtful point, and gave rise to great difficulties whether the party advancing the money, had or had not notice of the agency, and it was exceedingly desirable to get rid of what gave rise to much litigation. Owing to this limitation, and the other provisions of the existing law, the party making an advance to an agent really obtained no sustainable lien on the goods beyond what the agent himself might happen to have as against his principal. It was deemed exceedingly desirable to alter the law in this respect, because the whole security of the lender was made dependent on a matter of which there was hardly a possibility he could be cognisant. This rule proceeded on the supposition, that the lender was acquainted with what respected solely the relations which obtained between agent and principal, and depending on matters of account, and the balance-sheet which might be struck from time to time; so that the whole law was thrown into uncertainty when such a restriction was preserved. Well, then, lastly, the present law does not allow an advance to be made on the fact of possession of the goods, but only on possession of the documents relating to them. When the bills of lading are in the hands of an agent, it is in the power of the agent to take an advance on those bills, and the party so making it, has his remedy against the principal; but the same facility was not given when the bare possession of the goods by the agent was the ground of the proceeding. It was now proposed, therefore, that the agent's possession of the goods should be attended with the same incidents as the agent's possession of the documents. He believed, that in what he was proposing, he was asking them to assimilate our law to that which prevailed in every other country, and, furthermore, that they would be only doing what was reasonable and just, in saying that the party applied to for au advance on certain goods should be protected, if he made that advance bonâ fide to persons who had the possession of them. It was obvious, that the general effect of this bill would be to throw on the owner of the goods the whole responsibility with respect to the choice of agents; and he should certainly contend, that it was more just to make the owner responsible for the choice of his agent and for his acts, than those who came into contact with that agent in the open market, in the course of his commercial dealings. He could not foresee any objection to the changes he proposed, except, perhaps, that they might be unfavourable to the foreign consignor of goods, as making him dependent on the honesty of his agent in this country. He did not think, that objection was well founded. He was persuaded, on the contrary, that this bill would prove exceedingly favourable to the foreign consignor, because, in point of fact, nothing was so conducive to his interest as to give the utmost possible extension consistent with prudence and equity, to the system of advances on goods; for it was by means of these, that he got a quick return for his goods, and that his goods could be kept back when the price was low, and the market happened to be glutted.

Mr. Wynn Ellis:

As this bill threw a serious responsibility on the consignor, be ought, in his opinion, to have this security—that the advance made on goods to the agent should be a payment in money, and not an acceptance which might never be honoured when at maturity.

Mr. Gladstone

thought, that quite a different question, not touched by this bill.

Mr. Roebuck,

with every respect for the right hon. Gentleman, thought that a bill strictly legal should not be introduced in the absence of the law officers. He agreed with the right lion. Gentleman, however, that this bill did not touch the question raised by the hon. Gentleman (Mr. Ellis).

Bill went through committee and was reported.