On the 4th day of November, 1872, appellees, Neill Bros. & Co., through their brokers, Richards & Hawkins, entered into an executory contract with A. Sessums, Powell & Co., cotton factors in the city of Galveston, for the purchase of four hundred and fifty bales of cotton, “ on a basis ” of 15J cents per pound for good ordinary cotton. No specific cotton, however, was designated or identified as the subject of this sale; and it was not shown *154on the trial of this case that the thirty-two bales of cotton in .controversy in this suit were then either in the possession of,' or subject to the control of, A.-Sessums, Powell & Co. In fulfillment of this executory contract, said factors, on the 19th of November, 1872, gave to appellees a “ delivery order ” on the warehouse where they were stored for two hundred and ninety-seven bales of cotton, including the thirty-two bales for which this suit was brought by appellant. Appellfees appear to have delivered the order on. the same day, and the cotton was thereupon entered in the books of the warehouse as held in storage for them, and they, on the same day, paid A. Sessums, Powell & Co. for said two hundred and ninety-seven bales of cotton the estimated price, on the basis of 15^ cents per pound for good ordinary cotton, as stipulated by said agreement, as previously stated. But it is not pretended, so far as concerns this particular cotton, that the contract was fully and entirely .consummated by weighing and classifying it, so as to ascertain the definite amount to be paid for it on the basis agreed upon, until after the death of A. Sess.ums, January 31, 1873, and the hopeless insolvency of said factors, A. Sessums, Powell & Co. After the death of Sessums, however, appellees caused-it to be weighed by the public weigher, and to be classified by a cotton broker, when it was found that the payment for it, as made on estimate, exceeded the contract price, and that the difference between the amount paid upon estimate and -the contract price, ascertained by its weight and classification as aforesaid, was due appellees.
That the cotton sued for belonged to appellant prior to its alleged purchase by appellees, and was in the possession of said A. Sessums, Powell & Co., as his factors, on said 19th of November, 1872, was not controverted on the trial of the case, and, indeed, did not admit of dispute. The mooted question between the parties, was whether the appellees, by the executory contract of November 4, 1872, and the delivery order, including this particular cotton, given fifteen days *155afterwards by said factors, and the payment as stated above, acquired a title which they could maintain against appellant.
The correct determination of this proposition, counsel seem to suppose, must turn, in the mam, upon the fact whether the transaction between appellees and said factors was, in legal effect, an hypothecation of the cotton by the factors as security for the money which they got from appellees when the delivery order was given for the cotton, or whether it was a sale of the cotton on a basis; and if the latter, whether factors are authorized by law, or the custom and usage of business in Galveston, to sell the cotton of their consignors on a “ basis.”
Evidently, if the testimony of the witnesses for appellees is entitled to credit, the parties did not suppose that the cotton was merely hypothecated with appellees to secure the repayment of the money which the factors received on the delivery order. If such is the .real character or legal effect of the transaction, it evidently results from its intrinsic facts, and not from the intention of the parties. But we see no good reason to say that the transaction was in fact a mere hypothecation of the cotton, or should be so regarded in law. Whether the delivery order was given to secure money borrowed by the factors from appellees on an hypothecation of the cotton, was fairly submitted to the jury; and no good reason has been shown us for dissatisfaction, in this particular, with their verdict. But although the cotton may not have been hypothecated, the transaction regarding it may not have been a sale on a basis; or if so, such sales, especially when made and consummated as in this instance, may be illegal or contrary to general custom for the sale of cotton, by factors, in the Galveston market.
Let us, then, inquire whether a factor may, without special authority, sell the cotton of his consignor on a “ basis ”; and if so, was this the character of this transaction, and was it so far consummated as to vest title to the cotton in appellees ? To answer these questions, it is necessary for us to under*156stand the nature and essential ingredients of such a sale. We are uninformed whether sales on a basis are customary or sanctioned by general usage in other markets than that of Galveston, if indeed they are so in it. We have been cited by counsel to no case in which such sales have been the subject of judicial construction or comment. We must therefore look to the statements of the witnesses who profess to understand and know hoXv they are made, to determine whether this particular transaction was a sale on a basis, and whether there is any inherent vice in such sales that the court should not sanction or uphold them, although they may conform to the general custom where made.
All the witnesses who profess to know anything of this character of sale, who were examined upon the subject, say, in effect, that a sale on a basis is made by the parties agreeing, the one to sell and the other to buy a given number of bales of cotton at an agreed price per pound for “ good ordinary cotton,” that being the usual grade mentioned in quotations, and to which all others referred. Cotton delivered on such a sale, going above or below “ good ordinary,” is paid for ratably at a higher or lower price, according to the grade. As soon as possible” the factor designates the cotton sold by marks and numbers of bales; and this is usually done first in the weighing order or classing order. The cotton is then classed according to the standard classification of the market, the grade of each bale being ascertained in this process. As soon as the weights and classification are ascertained, the factor makes out an invoice, in which the aggregate weight of all the hales, comprising each grade of cotton in the lot, is multiplied by the price per pound of that grade; the whole amount is footed up, and the invoice, with a delivery order for the cotton, is given to the buyer, who pays the amount of the invoice, and the transaction is closed. Sometimes, however, as also in sales by samples, the factor needs money before the sale can be completed in this way; and in such case, either by express stipulation when making the sale, or *157upon request afterwards, the buyer pays a portion or the whole of the estimated price of the cotton bought, the factor giving the buyer a delivery order upon the warehouse for a sufficiency of the cotton sold to amount in value to the money paid, the value of the cotton being estimated by the usual weights of cotton bales, and the agreed price per pound. When the exact amount of invoice is ascertained, the parties settle, by payment of the difference between the amount paid and the amount of the invoice to whichever party the difference may be due.
Now, if sales of this kind are sanctioned by the general usage of the trade, and we are to understand that the specific cotton thus sold is in possession of the factor, or under his control, and is identified at the time the bargain is made, or as soon as this may be reasonably done, in view of the nature of such transactions and the time required to consummate them, and when, from all the facts and circumstances of the case, and the general usage in making and concluding such bargains, it should, from its inception by the agreement to sell and buy to its final completion, or such stage of consummation as to transfer the title to the particular cotton sold to the purchaser, should be justly regarded as oñe entire transaction, I can see no inherent objection to such character of sales, or any reason why they might not be made by a factor just as well as sales by sample, if sanctioned by the usage of the trade where made. The ascertainment of the amount to be paid for cotton sold on a basis by its classification, is, in effect, just what the factor does after its sale by, sample, by his report of sales to each consignor whose cotton is included in the same sale.
The effect of a payment on.a delivery order before the weighing and classification of the cotton, whether the sale is made by sample or on a basis, must depend on the custom and usage in making such sale; and though sanctioned by the usage of trade, if the purchaser knew that such was'the fact, or if he should be charged with knowledge that such payment *158was for the individual and personal benefit of the factor, and not for the benefit and advantage of the consignor, unquestionably the sale would be illegal, and could not be enforced against the consignor. Evidently, however, it cannot be inferred, simply from the fact that payment, in part or in whole, is' made before the contract is finally closed, that such payment is for the benefit of the factor, and not the owner. It may be, and no doubt often is the fact, that the consignor has drawn upon the cotton, and it is of vital importance for him to realize upon it at the earliest moment practicable.
In the absence of express authority, the power of a factor is unquestionably governed and regulated, in a great degree, by usage of the trade where the business is transacted ; and unless warranted by usage, a factor cannot sell upon a credit. Evidently, he is also controlled by the same rules in making and consummating his sales. Purchasers from factors are charged with knowledge of such usage, and are, equally with factors, bound by them. ■
It certainly cannot be denied that the weight of evidence, as exhibited by the record, preponderates against the proposition, that, by the general custom and usage of trade in the market of Galveston, factors are authorized to sell cotton on a basis. But as the evidence is conflicting, if this cotton had been sold strictly on a basis, and there had been no departure from general usage of the market, or inherent vice in making and concluding the sale, the verdict of the jury would be conclusive, and should not be disturbed.
But it seems to be clear, from the evidence, that the time usually allowed for the consummation of the sales of cotton by factors in Galveston is limited to ten days. Certainly it cannot be claimed that the usage of trade is such as to warrant so great a delay in concluding a sale as from the 4th of November to the 81st of the ensuing January. But concede, as appellees insist, that the alleged sale was so far consummated by payment for the cotton on the delivery order given on the 19th of November as to vest the property in them, *159and that the .subsequent delay of the factors," without their consent and against their urgent demand for its prompt completion, will not affect their rights, still this does not relieve appellees from the dilemma in which the testimony places them. No excuse is given why nothing whatever was done from the 4th until the 19th of November towards the eonsum-. mation of the sale, shown by the sale note, if there was at that time a sale. The appellee Todd, who was a witness, says, where a sale on a basis is agreed upon, “ as soon thereafter as practicable, the factor designates the cotton sold, by marks and number of bales.” And so say all the other witnesses. Now, can it even be plausibly insisted, when there was no designation of the cotton sold until fifteen days after the date of the sale-note, when only ten days were allowed by the usage of trade to consummate the entire transaction, and where no excuse for the unusual delay in taking this first and essential step towards completing the sale is shown, and. where it does not appear that the purchaser ever demanded that this should be done, that a sale has been properly made and consummated in conformity to usual" mode of sales by factors ?
But there is another view of this transaction, which is of more essential importance in respect to the powers and functions of factors, and which conclusively nullifies appellees’ claim to this cotton. . It is not pretended that factors have authority to bind consignors by any other character of contract concerning cotton in their charge, except by a sale on a basis or by sample. It is not shown, or even attempted to be shown, that they are authorized to bind their consignors by executory contracts. It certainly cannot be inferred that the factor has authority to do so, because he has unlimited authority to make an absolute and immediate sale. Evidently the sale-note of the 4th of November imports merely an ex-ecutory agreement for a sale of four hundred and fifty bales i of cotton by A. Sessums, Powell & Co. to appellees. It is not,. indeed, even an executory contract for the sale of appellant’s *160cotton. It had no more reference to his cotton than to that of any one else having cotton in possession or under control of said factors, or which they might themselves own, when called upon to consummate the contract by the delivery or designation of the cotton which they had agreed to sell. But it is said that though merely an executory agreement in the first instance, and while it may not have been binding if the pai’ties had proceeded no further with it, yet, when the particular cotton was designated, and delivered and paid for, on the 19th of the month, it became an executed contract.
But has it been shown that factors are authorized to bind their consignors by executing contracts, or by fulfilling contracts into which they have entered, which did not relate to the business of their consignors, and when made were not binding on them ? Though a factor may sell the cotton, it does not follow that he can deliver it in satisfaction of a contract made fifteen days previous thereto. Suppose it had been stipulated in this agreement, instead of being left to the option of the parties when the cotton agreed to be sold should be delivered, that the sellers would deliver to the purchasers, fifteen days from the date of the sale-note, the specified number of bales, can it be pretended that consignors would have been bound by such an agreement, or that such a transaction could properly be called a sale on basis ? In what essential particular would such a transaction differ from a sale of “futures” ?
To constitute a sale, there must not only be parties competent to contract, mutual consent, and a price, but also a subject of sale. Now, when this agreement was made, as no particular cotton was designated, it cannot be said that there was a subject of sale. Certainly, no one will say that this particular cotton was its subject. A factor, unlike a broker, may buy and sell in his own name; but, unlike the broker, he can only sell property in his possession or under his control. (Story on Sales, sec. 91.)
If á factor may legally carry out and bind Ms consignors *161by such a contract as this, ho might sell cotton not in fact forwarded to him until after its sale. It would enable him, if it was to his advantage, to deliver cotton of his own at the agreed price instead of that of his clients; while, if it turned out a losing bargain, he could shift the burden of it from his own shoulders to those of his consignors. Or he might select from among them who should reap the profit or bear the burden of the contract, as the case might be. A factor evidently has no authority to bind consignors by contracts admitting of such results. Neither law, public policy, nor sound morals will sanction or uphold them. If a contract on a basis, as defined by the witnesses, warrants the designation of the cotton at some indefinite subsequent day after the parties have agreed upon the price for a basis, there can be no hesitancy in saying, whether such character of sale is sanctioned by the usage or custom of trade or not, that it is illegal, and can receive no countenance in a court of justice. The assumption of power in the factor to deal with the property of the consignors in such manner, or to bind them by such contracts, is in direct conflict with the relations which should exist between them, and tends to the detriment of the one and the corruption of the other.
The verdict of the jury is neither warranted by the charge of the court, nor supported by the evidence, but is in palpable conflict with both.
The judgment is reversed and the cause remanded.
Reversed and remanded.