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pool attached. While the cotton was still in press an execution against the factor was levied upon it; but it was held that there had been a constructive delivery of it by the factor to the banker, and that the delivery of the bill of lading was as effectual to transfer the cotton as a manual delivery of it would have been.' The delivery in this case was held to meet the special requisite of an effectual pledge, which is, that no matter in whose hands the property may be deposited, it shall no longer be subject, in fact or in law, to the dominion, possession or control of the pledgor, but to that of the pledgee. The execution of the delivery order by the factor to the vessel for the cotton in press, and the recognition and acceptance of it by the press, constituted a delivery of the cotton to the vessel; and therefore the execution of the bill of lading by the master of the vessel, and the delivery of this to the banker, completed the transfer to him.

§ 230. A bill of lading merely represents the property; and a transfer of the bill of lading operates merely to transfer the same rights of property that would arise from a transfer of the property itself. One in possession of property can transfer no greater rights than he possesses; and so one in possession of a bill of lading can transfer no greater rights than he has in that.2

"Bills of lading stand as the substitute and representative of the goods described therein, and while quasi-negotiable instruments are not negotiable in the full sense in which that term is applied to bills and notes, the transfer of the bill passes to the transferee the transferrer's title to the goods described, and the presumption as to ownership arising from the bill may be explained or rebutted by other evidence showing where the real ownership lies. A pledgee to whom a bill of lading is

1 Adoue v. Seeligson, 54 Tex. 593. 2 Dows v. National Exch. Bank, 91 U. S. 618; Skilling v. Bollman, 73 Mo. 665, 39 Am. Rep. 537; Kirkpatrick v. Kansas City, St. Jo. & C. B.

R. Co., 86 Mo. 341; Missouri Pac. R.
Co. v. McLiney, 32 Mo. App. 166;
Dickson v. Merchants' Elevator Co.,
44 Mo. App. 498.

given as security gets the legal title to the goods and the right of possession only if such is the intention of the parties, and that intention is open to explanation. Inquiry into the transaction in which the bill originated is not precluded because it came into the hands of persons who may have innocently paid value for it.""

A bill of lading is not like a negotiable instrument which passes by delivery to a bona fide transferee for value without regard to the title of the person who makes the transfer. "In the hands of the holder it is evidence of ownership, special or general, of the property mentioned in it and of the right to receive said property at the place of delivery. Notwithstanding it is designed to pass from hand to hand, with or without indorsement, and it is efficacious for its ordinary purposes in the hands of the holder, it is not a negotiable instrument or obligation in the sense that a bill of exchange or a promissory note is. Its transfer does not preclude, as in those cases, all inquiry into the transaction in which it originated, because it has come into hands of persons who have innocently paid value for it. The doctrine of bona fide purchasers only applies to it in a limited sense.

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§ 231. An indorsement or delivery of a bill of lading as collateral security passes a special property in the goods, and not an absolute legal title to them, or the whole and complete ownership of them, but the delivery is as complete as if the goods themselves had been delivered. The transaction is ordinarily a pledge and not a mortgage, because it is ordinarily

'The Carlos F. Roses, 177 U. S. 655, 665, per Fuller, C. J., citing Pollard v. Vinton, 105 U. S. 7; Shaw v. Railroad Company, 101 U. S. 557. In Georgia it is provided by statute that delivery of property is essential to this bailment, but promissory notes and evidences of debt, warehouse receipts, elevator receipts, bills of lading or other commercial paper symbolic of property, may be delivered

in pledge. The delivery of title deeds creates no pledge. Code 1895, § 2956.

2 Gurney v. Behrend, 8 El. & Bl. 622; Dows v. Perrin, 16 N. Y. 325; Dows v. Greene, 24 N. Y. 638.

Pollard v. Vinton, 105 U. S. 7, 8, per Miller, J.

4 Missouri Pac. R. Co. v. Heidenheimer, 82 Tex. 195, 17 S. W. Rep. 608; Neill v. Rogers Bros.' Produce Co., 41 W. Va. 37, 23 S. E. Rep. 702.

the intention of the parties to such a contract, either as expressed or to be implied from the transaction itself, that such shall be its effect. The effect of such a transaction is well described by Mr. Justice Field in a recent case in the Queen's Bench Division.' "Now advances against deposit of goods are probably some of the most ordinary transactions either of common or commercial life, and if there is delivery, and there are no terms expressed either verbally or in writing giving any larger effect to the contract, the latter is known as a contract by way of 'pawn or pledge,' the legal effect of which is

1 Burdick v. 366. The learned judge criticises the language of Brett, L. J., in the recent case of Glyn v. East and West India Docks Co., 6 Q. B. D. 475, 480, where he says that the legal effect of the indorsement of the bill of lading as security for advances was to transfer the legal property in the goods to the indorsee, and a consequent right in law of immediate actual possession against all the world, unless some one has an independent superior right of temporary possession; and that such indorsement has the same effect as a bill of sale has by the common law to pass the legal property in goods; and that the right of the indorser is an equity merely, though this may be recognized by the common law courts. Upon this Mr. Justice Field remarks: "I apprehend, however, that the language of the learned lord justice in that case, must be read as applied to the facts of that particular case, and as I, on the hearing of that case, which was tried before me without a jury, came to the conclusion that the intention of the parties and the implication of law from the dealings was that the whole and entire property did pass, I agree in the view of the lord justice thus

Sewell, 10 Q. B. D. 363, limited and understood." Bramwell, L. J., however, considered the transaction in that case as not amounting to anything more than a pledge, giving the indorser of the bill of lading a special property and right of possession.

Mr. Justice Field then proceeds to review some of the cases as to the effect of an indorsement of a bill of lading as collateral security, from the leading case of Lickbarrow v. Mason, 1 Sm. L. C., 7th Eng. ed., p. 756, down to Meyerstein v. Barber, L. R. 4 H. L. 317. In regard to the latter case he says that while in the court of common pleas and in the Exchequer Chamber everybody treated the transaction as a pledge, Lord Hatherly and Lord Westbury in the House of Lords used expressions which appear to be to the effect that by the indorsement the whole property passed. But he doubts whether these expressions were intended to mean anything more than that sufficient property passed to enable the pledgee to maintain n action for conversion, and that the indorsement, per se, amounted to a delivery. He comes to the conclusion as stated in the text that by such an indorsement the parties intend nothing more than a pledge: and this is the generally accepted doctrine.

that only a special property passes from the borrower to the lender, although coupled with the power of selling the pledge and transferring the whole property in it on default in payment at the stipulated time, if there be any, or at a reasonable time after demand and non-payment, if no time for repayment be agreed upon.' Moreover, until such default, although the lender may assign the pledge to another to the limited extent of his own interest in it, i. e., as a security for the amount due, he can not pass the whole and entire property in the goods to another, for by the contract the general property remains in the pawnor, who by virtue of that general property may determine the special property by tender of the secured amount, and may immediately recover the pledge on refusal in a possessory action. Delivery is, however, an essential element of every contract by way of pledge. Such delivery may be actual, as in the every-day life transaction with the pawnbroker, or it may be constructive, either by making the custody of the pledgor that of the pledgee, or if the goods are still under the operation of a bill of lading, by indorsement of the bill; and it is the latter form of the transaction which is one very commonly adopted in commerce. As, however, in the case of land, by a conveyance by way of mortgage, so also in that of goods, a more effective security may be created by bill of sale, and by the usual terms of such an instrument the whole and entire property in the goods is assigned and passes to the lender, subject to usual stipulations as to possession and sale, but leaving nothing in the way of legal property in the borrower, only an equitable right to redeem. This latter form of security, although very usual in money-lending transactions of a mere individual character, is not, I believe, usually adopted in those purely commercial transactions where advances are obtained against goods represented either by warrants or bills of lading; these being two of the ordinary modes by which goods are made a security for an advance and within


1 Pothonier v. Dawson, Holt N. P. 383; Donald v. Suckling, L. R. 1 Q. B. 585.

'Reeves v. Capper, 5 Bing. N. C. 136, 140.

one of which the transaction now in question must be ranged. The question in the present case resolves itself into whether the security was intended to operate, or by implication of law arising upon the undisputed facts did operate, in the same way as an assignment by bill of sale or as a mere pledge.'

In this case it was determined that the shipper of goods does not, by simply indorsing the bill of lading, and delivering it to the indorsee, by way of security for money advanced by him, pass the property in the goods to such indorsee, so as to make him directly liable to the shipowner for freight under a statute which transfers the liability for freight from the shipper to the indorsee of a bill of lading.

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§ 231a. Even a delivery of a bill of lading as security for a loan, without any indorsement, is held to be a valid pledge, and to operate as a symbolical delivery, of the goods represented by such bill of lading. Chief Justice Shaw stated the law to this effect, saying: "Even a sale or pledge of the property without a formal bill of lading, by the shipper, would operate as a good assignment of the property; and the delivery of an informal or unindorsed bill of lading or other documentary evidence of the shipper's property would be a good symbolical delivery, so as to vest the property in the plaintiffs.'


This is the rule, although the bill of lading contains no words of negotiability, or even contains the words, "This receipt is not transferable.'”


1 Allen v. Williams, 12 Pick. (Mass.) 297, 301; followed in Hathaway v. Haynes, 124 Mass. 311; First Nat. Bank v. Dearborn, 115 Mass. 219, 228, 15 Am. Rep. 92; Lewis v. Springville Banking Co., 166 Ill. 311,46 N. E. Rep. 743; Michigan Cent. R. Co. v. Phillips, 60 Ill. 190; Western Union R. Co. v. Wagner, 65 Ill. 197; Scharff v. Meyer, 133 Mo. 428, 34 S. W. Rep. 858, 42 Cent. L. J. 367; Skilling v. Bollman, 6 Mo. App. 76; Petitt v. Memphis First Nat. Bank, 4 Bush (Ky.) 334; Jeffersonville, Madison & Indianapolis R. Co. v. Irvin, 46 Ind. 180; Becker v. Hallgarten, 86 N. Y. 167; Mer

chants' Bank v. Union R. & T. Co., 69 N. Y. 373, 376; Rochester Bank v. Jones, 4 N. Y. 497, 55 Am. Dec. 290; Richardson v. Nathan, 167 Pa. St. 513, 31 Atl. Rep. 740; Holmes v. Bailey, 92 Pa. St. 57; Holmes v. German Security Bank, 87 Pa. St. 525; Campbell v. Alford, 57 Tex. 159.

Emery v. Irvin Nat. Bank, 25 Ohio St. 360, 18 Am. Rep. 299; Rochester Bank v. Jones, 4 N. Y. 497, 55 Am. Dec. 290; City Bank v. Rome, W. & O. R. Co., 44 N. Y. 136; Davenport Nat. Bank v. Homeyer, 45 Mo. 145, 100 Am. Dec. 363.

'Peters v. Elliott, 78 Ill. 321.

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