FACTORS ORDINANCE

FACTORS ORDINANCE

LAWS OF HONG KONG

FACTORS ORDINANCE

CHAPTER 48





CHAPTER 48.

FACTORS ORDINANCE.

ARRANGEMENT OF SECTIONS.

Section. ..................................Page.

PRELIMINARY

1. Short title....................... ... ... ... ... ... ... ... ... ...

2. Interpretation........................ ... ... ... ... ... ... ...

DISPOSITIONS BY MERCANTILE AGENTS.

3.......................................Powers of mercantile agent with respect to disposition of goods ...

4....................Pledge of documents of title ... ... ... ... ... ... ... ... ... 3
5....................Pledge for antecedent debt ... .1 . ... ... ... ... ... ... 3

6. Rights acquired by exchange of goods or documents ... ... ... ... 3

7......................Agreement through clerk, etc. ... ... ... ... ... ... ... ... 3

8...........................Provisions as to consignor and consignee ... ... ... ... ... ... 3

DISPOSITIONS BY SELLERS AND BUYERS OF GOODS.

9. Disposition by seller remaining in possession ... ... ... ... ... 4

10...........................Disposition by buyer obtaining possession ... ... ... ... ... ... 4

11. Effect of transfer of document of title on vendor's lien or right of

stoppage in transitu 1 ................ ... ... ... ... ... 4

SUPPLEMENTARY.

12......................Mode of transferring document ... ... ... ... ... ... ... ... 4
13......................Saving for rights of true owner ... ... ... ... ... ... ... ... 4

14. Saving of common law powers of agent ... ... ... ... ... ... 5





CHAPTER 48.

FACTORS.
To consolidate and amend the law relating to factors.

[1st July, 1896.1

PRELIMINARY.

1. This Ordinance may be cited as the Factors Ordinance.

(Amended, 5 of 1924, s. 6)

2. (1) In this Ordinance, unless the context otherwise requires

'document of title' includes any bill of lading, dock warrant, warehouse
keeper's certificate, and warrant or order for the delivery of goods,
and any other document used in the ordinary course of business
as proof of the possession or control of goods, or authorizing or
purporting to authorize, either by indorsement or by delivery, the
possessor of the document to transfer or receive goods thereby
represented;

'goods' includes wares and merchandise;

'mercantile agent' means a mercantile agent having, in the customary
course of his business as such agent, authority either to sell
goods, or to consign goods for the purpose of sale, or to buy
goods, or to raise money on the security of goods;

'person' includes any body of persons corporate or unincorporate;
'pledge' includes any contract pledging, or giving a lien or security on
goods, whether in consideration of an original advance, or of any
further or continuing advance, or of any pecuniary liability.

(2) For the purposes of this Ordinance, a person shall be deemed to
be in possession of goods or of the documents of title to goods, where
the goods or documents are in his actual custody or are held by any
other person subject to his control, or for him, or on his behalf.

DISPOSITIONS BY MERCANTILE AGENTS.

3. (1) Where a mercantile agent is, with the consent of the owner, in
possession of goods or of the documents of title to goods, any sale,
pledge, or other disposition of the goods, made by him when acting in
the ordinary course of business of a mercantile agent, shall, subject to
the provisions of this Ordinance, be as valid as if he were expressly
authorized by the owner of the goods to make the same:

Provided that the person taking under the disposition acts in good
faith, and has not, at the time of the disposition, notice that the person
making the disposition has not authority to make the same.





(2) Where a mercantile agent has, with the consent of the owner,
been in possession of goods or of the documents of title to goods, any
sale, pledge, or other disposition, which would have been valid if the
consent had continued, shall be valid notwithstanding the
determination of the consent:

Provided that the person taking under the disposition has not, at
the time thereof, notice that the consent has been determined.

(3) Where a mercantile agent has obtained possession of any
documents of title to goods by reason of his being or having been, with
the consent of the owner, in possession of the goods represented
thereby, or of any other documents of title to the goods, his possession
of the first-mentioned documents shall, for the purposes of this
Ordinance, be deemed to be with the consent of the owner.

(4) For the purposes of this Ordinance, the consent of the owner
shall be presumed in the absence of evidence to the contrary.

4. A pledge of the documents of title to goods shall be deemed to
be a pledge of the goods.

S. Where a mercantile agent pledges goods as security for a debt
or liability due from the pledgor to the pledgee before the time of the
pledge, the pledgee shall acquire no further right to the goods than
could have been enforced by the pledgor at the time of the pledge.

6. The consideration necessary for the validity of a sale, pledge, or
other disposition of goods, in pursuance of this Ordinance, may be
either a payment in cash, or the delivery or transfer of other goods, or of
a document of title to goods, or of a negotiable security, or any other
valuable consideration; but where goods are pledged by a mercantile
agent in consideration of the delivery or transfer of other goods, or of a
document of title to goods, or of a negotiable security, the pledgee shall
acquire no right or interest in the goods so pledged in excess of the
value of the goods, document, or security when so delivered or
transferred in exchange.

7. For the purposes of this Ordinance, an agreement made with a
mercantile agent through a clerk or other person authorized in the
ordinary course of business to make contracts of sale or pledge on his
behalf shall be deemed to be an agreement with the agent.

8. (1) Where the owner of goods has given possession of the
goods to another person for the purpose of consignment or sale, or has
shipped the goods in the name of another person, and the consignee of
the goods has not had notice that such person is not the owner of the
goods, the consignee shall, in respect of





advances made to or for the use of such person, have the same lien on
the goods as if such person were the owner of the goods, and may
transfer any such lien to another person.

(2) Nothing in this section shall limit or affect the validity of any
sale, pledge, or disposition by a mercantile agent.

DISPOSITIONS BY SELLERS AND BUYERS OF GOODS.

9. Where a person, having sold goods, continues, or is, in
possession of the goods or of the documents of title to the goods, the
delivery or transfer by that person, or by a mercantile agent acting for
him, of the goods or documents of title under any sale, pledge, or other
disposition thereof, or under any agreement for sale, pledge, or other
disposition thereof, to any person receiving the same in good faith and
without notice of the previous sale. shall have the same effect as if the
person making the delivery or transfer were expressly authorized by the
owner of the goods to make the same.

10. Where a person, having bought or agreed to buy goods,
obtains, with the consent of the seller, possession of the goods or the
documents of title to the goods, the delivery or transfer, by that person
or by a mercantile agent acting for him, of the goods or documents of
title, under any sale, pledge, or other disposition thereof, or under any
agreement for sale, pledge, or other disposition thereof, to any person
receiving the same in good faith and without notice of any lien or other
right of the original seller in respect of the goods, shall have the same
effect as if the person making the delivery or transfer were a mercantile
agent in possession of the goods or documents of title with the consent
of the owner.

11. Where a document of title to goods has been lawfully
transferred to a person as a buyer or owner of the goods, and that
person transfers the document to a person who takes the document in
good faith and for valuable consideration, the last-mentioned transfer
shall have the same effect for defeating any vendor's lien or right of
stoppage in transitu as the transfer of a bill of lading has for defeating
the right of stoppage in transitu.

SUPPLEMENTARY.

12. For the purposes of this Ordinance, the transfer of a document
may be by indorsement, or, where the document is by custom or by its
express terms transferable by delivery or makes the goods deliverable to
the bearer, then by delivery.

13. (1) Nothing in this Ordinance shall authorize an agent to exceed
or depart from his authority as between himself and his principal, or
exempt him from any liability, civil or criminal, for so doing.





(2) Nothing in this Ordinance shall prevent the owner of goods
from recovering the goods from an agent or his trustee in bankruptcy at
any time before the sale or pledge thereof, or shall prevent the owner of
goods pledged by an agent from having the right to redeem the goods
at any time before the sale thereof, on satisfying the claim for which the
goods were pledged, and paying to the agent, if by him required, any
money in respect of which the agent would by law be entitled to retain
the goods, or the documents of title thereto, or any of them, by way of
lien as against the owner, or from recovering from any person with
whom the goods have been pledged any balance of money remaining in
his hands as the produce of the sale of the goods after deducting the
amount of his lien.

(3) Nothing in this Ordinance shall prevent the owner of goods
sold by an agent from recovering from the buyer the price agreed to be
paid for the same, or any part of that price, subject to any right of set-off
on the part of the buyer against the agent.

14. The provisions of this Ordinance shall be construed in
amplification and not in derogation of the powers exercisable by an
agent independently of this Ordinance.

(Note.-The following Acts in their application to the Colony were
repealed by this Ordinance

4 Geo. 4, cap. 83: 6
Geo. 4, cap. 94;

5 6 Vict., cap. 39.)
Originally 6 of 1896. (Cap. 48, 1950.) 8 of 1912. 5 of 1924. 52 & 53 Vict. C. 45. Short title. Interpretation. Powers of mercantile agent with respect to disposition of goods. Pledge of documents of title. Pledge for antecedent debt. Rights acquired by exchange of goods or documents. Agreement through clerk, etc. Provisions as to consignor and consignee. Disposition by seller remaining in possession. Disposition by buyer obtaining possession. Effect of transfer of document of title on vendor's lien or right of stoppage in transitu. Mode of transferring document. Saving for rights of true owner. Saving of common law powers of agent.

Originally 6 of 1896. (Cap. 48, 1950.) 8 of 1912. 5 of 1924. 52 & 53 Vict. C. 45. Short title. Interpretation. Powers of mercantile agent with respect to disposition of goods. Pledge of documents of title. Pledge for antecedent debt. Rights acquired by exchange of goods or documents. Agreement through clerk, etc. Provisions as to consignor and consignee. Disposition by seller remaining in possession. Disposition by buyer obtaining possession. Effect of transfer of document of title on vendor's lien or right of stoppage in transitu. Mode of transferring document. Saving for rights of true owner. Saving of common law powers of agent.

https://oelawhk.lib.hku.hk/items/show/2301

1964

v5

48

6