57. Authority of Agent to Warrant. As to whether or not an agent authorized to sell personal property has implied authority to warrant its quality, is not uniformly settled. If there is any rule on the question, it probably is controlled by usage and custom. If there is a general well known custom to warrant a particular article, the agent has implied authority to warrant the quality of the article sold. If no such usage or custom exists, or if the usage or custom is purely local and not general in its application, the agent has no authority to warrant the quality of the goods sold. It must be remembered that a principal is bound by the general character of authority he confers upon his agent, by the agent's apparent authority rather than by the actual authority, unless the latter is actually brought to the notice of third parties. It has been held that an agent authorized to sell a horse is authorized to warrant the soundness of the horse, and that an agent authorized to sell reapers is authorized to warrant their durability and fitness. It was held that a principal, who authorized an agent to sell goods at a certain price, did not authorize the agent to warrant to third persons that his principal would not sell to others at a less price.
58. Factors. A factor, usually called a commission man or consignee, is an agent entrusted with possession of his principal's goods, and ordinarily empowered to sell in his own name. Like any agent who has possession of his principal's goods with power to sell, a factor has power to collect. He differs from a broker in that he has possession of the goods of his principal, and is authorized to sell in his own name, rather than in the name of his principal.
In the absence of contrary custom or express direction, a factor may sell on credit. A factor, until instructed otherwise, may use his discretion as to the time and price of sales, and is entitled to deduct his commission based upon custom in the absence of special contract.
A factor may sue the purchaser in his own name, for the purchase price. The principal may sue in his own name also. Persons dealing with factors may hold the principal responsible for the contracts and representations of the factor, the same as any undisclosed principal. Factors are also personally liable to third persons for their contracts.
A factor must account to his principal for money collected, less his commission and expenses. He is not obliged to keep such money separate from his own, but he must keep accurate account of same, and remit promptly when it is due, according to custom or special contact.
59. Brokers. A broker differs primarily from a factor in that ordinarily he does not have possession of the article dealt in, and acts in the name of his principal rather than in his own name. There are many kinds of brokers engaged in common business life. Some of these are insurance brokers, pawnbrokers, bill and note brokers, and merchandise brokers. In the absence or special authority, a broker does not have authority to collect.
60. Auctioneers. An auctioneer is a special kind of agent employed to dispose of goods to the highest bidder at a public sale.
Some states provide by statute that auctioneers must be licensed, and that they may charge only certain fees. Most licensed auctioneers are required to give bond. In the absence of statutory regulations, any person competent to perform the duties of an auctioneer may so act. An auctioneer differs from an ordinary agent in that, in some respects, he is agent for both seller and purchaser. He is agent for the seller in offering the goods for sale, and in obtaining bids. When the highest bid is received, however, and the hammer falls, he is deemed to be agent for the purchaser, with authority to complete the sale in the purchaser's name. If the contract of sale is within the Statute of Frauds and required to be in writing, the auctioneer has the authority of the purchaser to sign his name to a memorandum of sale, either by himself or through his clerk. The bidder is bound by this contract, made in his presence at the time and place of the sale.
The owner may fix such reasonable terms as he chooses, and the auctioneer must follow out the terms made by the owner. If an owner advertises the terms of the sale, bidders are deemed to have notice of these terms. These terms cannot be varied by the auctioneer. If, however, the owner publishes no special terms of sale, the auctioneer has implied authority to fix customary and reasonable terms. Bidders have the right to rely on such terms and the principal is bound by them.