than the acceptance of it. If the holder of a bill of lading as security for a time draft drawn against it be expressly authorized to hold it until the draft be paid, he is, of course, under no legal obligation to surrender the security upon the acceptance of the draft, and to trust to the personal liability of the acceptors for payment; and the drawer in such case is not entitled to require a formal presentment of the bill of exchange for acceptance, and notice of its non-acceptance.'

A custom of trade not to deliver the bill of lading till payment of the acceptance, is exceptional. But an agent receiving a time draft and a bill of lading attached, with instructions to hold the goods until payment, has no power prior to such payment, to make a delivery of the goods to the consignee which will divest the ownership of his principal. Thus, if one who had discounted a draft drawn against a bill of lading of wheat, forward the draft with the bill of lading attached, to an agent, with instructions by special indorsement and by letter, to hold the wheat until payment of the draft, the agent has no power prior to such payment, to make a delivery which will divest the ownership of his principal."

§ 259. Parol evidence is admissible of an agreement made between a shipper and a pledgee of a time draft with a bill of lading attached, that the bill of lading should not be delivered until the draft should be paid. The indorsement and delivery of the bill of lading do not constitute a written contract having a fixed definite meaning in the law presumably complete in itself, and of a nature to exclude from consideration all express parol agreements as to the conditions annexed to the transfer. The indorsement and delivery of a bill of lading have no such fixed legal effect as flows from the indorsement

and delivery of negotiable paper, but operate only as a delivery of the merchandise represented in the bill of lading.' If, therefore, a merchant ships goods and takes a bill of lading to his own order, and drawing a bill of exchange payable thirty days after sight, attaches it to the bill of lading and obtains a discount of it at a bank, the transaction legally interpreted does not import a sale of the goods upon credit, or determine that the drawer is entitled to the bill of lading upon his acceptance of the draft without payment; and if the bank surrenders the bill of lading to the consignee upon his acceptance of the draft, and the latter becomes insolvent without. paying the draft, the bank must bear the loss, and can not recover of the drawer the amount of the draft."

§ 260. The title of one who holds a bill of lading for a draft upon the consignee is subject to the condition that it shall be divested upon the consignee's acceptance or payment of the draft, when the title to the property vests in the latter. Thus, if the draft be a time draft, so that the consignee is entitled to the goods upon acceptance of the draft, the title passes to him upon his acceptance, and the security of the holder of the draft is transferred to the personal liability of the consignee as acceptor; but if he refuses to accept, the title continues unimpaired in the holder of the draft. On the other hand, if the holder of the draft is entitled to retain the bill of lading until the draft is paid, his right of property and possession passes to the consignee only upon the condition of his paying the bill of

Bank v. Crocker, 111 Mass. 163; Allen v. Williams, 12 Pick. (Mass.) 297; First Nat. Bank v. Dearborn, 115 Mass. 219; Hathaway v. Haynes, 124 Mass. 311; Tilden v. Minor, 45 Vt. 196; Petitt v. First Nat. Bank, 4 Bush (Ky.) 334; Richardson v. Nathan, 167 Pa. St. 513, 31 Atl. Rep. 740; Neill v. Rogers Bros. Produce Co., 41 W. Va. 37, 23 S. E. Rep. 702.

1

exchange. "It thus appears to be established as a correct rule that a person purchasing a draft drawn by the shipper of the goods, with a bill of lading accompanying it, has a special property in the goods covered by the bill of lading. Usually in the case of a time draft this special property vests in the purchaser of the draft as security for its acceptance. It may be, if so agreed between the shipper and the purchaser of the draft, that the purchaser will have a right to retain the bill of lading, and thus retain his special property in the goods shipped, not only for the acceptance but for the payment of the draft.

V. How Bills of Lading may be Pledged.

§ 261. A bill of lading drawn to the order of the consignor is properly assigned by his indorsement. His pledge of it in this way passes to the assignee the title to the goods it represents. But a mere indorsement of it, without a delivery, does not transfer the property in the goods.*

The consignor having indorsed and delivered the bill of lading, the carrier is bound to deliver the goods to the person holding this evidence of title, and can not deliver them to any other person without violating his contract and making himself responsible for the loss that the holder of the bill of lading may thereby suffer."

A bill of lading with the name of a particular consignee, or bearer, may be transferred by delivery merely, unless there be a statute imperatively requiring indorsement.

Such an indorsement and delivery transfers a special prop

1 Jenkyns v. Brown, 14 Q. B. 496; Hieskell v. Farmers' & Mechanics' Nat. Bank, 89 Pa. St. 155.

2 Dodge v. Meyer, 61 Cal. 405, 10 Pac. Coast L. J. 169, per Thornton, J. 3 Tilden v. Minor, 45 Vt. 196; Hieskell v. Farmers' & Mechanics' Nat. Bank, 89 Pa. St. 155; Robinson v. Stuart, 68 Me. 61; Winslow v. Norton,

29 Me. 419, 1 Am. Dec. 601; Bache v. Phillips, 155 Pa. St. 103, 25 Atl. Rep. 891.

Buffington v. Curtis, 15 Mass. 528, 8 Am. Dec. 115.

5 Forbes v. Boston & Lowell R. Co., 133 Mass. 154.

297.

Allen v. Williams, 12 Pick. (Mass.)

erty in the goods to the holder of the draft drawn against them, both as against the consignor, and as against any creditor of his.1

§ 262. A bill of lading drawn to the shipper's order may be transferred by delivery merely without any indorsement so as to transfer the property represented thereby." "It is well settled that property or goods shipped by a bill of lading drawn to order, may be transferred by delivery to a third person without any indorsement. Bills of lading are choses in action, and no rule is better established than that instruments of this character may be transferred for a valuable consideration by delivery only. Although the plaintiff was not a party to the bill of lading, it can not affect his right to the contract contained in the same, if he acquired it lawfully."" Such a transfer does not, like the delivery of an unindorsed note, transfer a merely equitable title; but it gives as valid and effectual a title to the goods represented by the bill of lading as could be obtained by an actual delivery of the goods themselves, if there was an intent to pass the title by such delivery. Such intent may be shown by the circumstances attending the transaction.5 The fact that the bill of lading is delivered by the shipper as

'Hathaway v. Haynes, 124 Mass. 311; Forbes v. Boston & Lowell R. Co., 133 Mass. 154.

2 Bank of Rochester v. Jones, 4 N. Y. 497, 54 Am. Dec. 290; Merchants' Bank v. Union R. & Transportation Co., 69 N. Y. 373; Marine Bank v. Wright, 46 Barb. (N. Y.) 45; Michigan Central R. Co. v. Phillips, 60 Ill. 190; Davenport Bank v. Homeyer, 45 Mo. 145, 100 Am. Dec. 363.

Merchants' Bank v. Union R. & Trans. Co., 69 N. Y. 373, per Miller, J.; and see Gibson v. Stevens, 8 How. 384, 400.

Becker v. Hallgarten, 86 N.Y. 167, 175; Glidden v. Lucas, 7 Cal. 26; Allen v. Williams, 12 Pick. (Mass.) 297,

301, per Shaw, C. J.; Holmes v. Bailey, 92 Pa. St. 57; Holmes v. German Security Bank, 87 Pa. St. 525; City Bank v. Rome, W. & O. R. Co., 44 N. Y. 136; St. Louis National Bank v. Ross, 9 Mo. App. 399; Petitt v. First Nat. Bank, 4 Bush (Ky.) 334; Dodge v. Meyer, 61 Cal. 405, 10 Pac. Coast L. J. 169; Bank of Rochester v. Jones, 4 N. Y. 497, 55 Am. Dec. 290; Michigan Cent. R. Co. v. Phillips, 60 Ill. 190; Peters v. Elliott, 78 Ill. 321, 326; Davenport Bank v. Homeyer, 45 Mo. 145, 100 Am. Dec. 363; Skilling v. Bollman, 6 Mo. App. 76. See, however, Bissell v. Steel, 67 Pa. St. 443.

5 Merchants' Bank v. Union R. & Transportation Co., 69 N. Y. 373.

security to one who discounts a draft drawn against it, is well nigh conclusive of the shipper's intention to transfer the property in the goods.1

In a case where a bank discounted a draft on the security of a bill of lading, which was delivered to it without indorsement, and the consignee refused to pay the draft, but sold the property and applied the proceeds to an old debt due him from the consignor, it was held that the bill of lading was evidence of an appropriation of the proceeds of sale of the property contained in the bill of lading, whether it was indorsed or not; and that the consignee having notice of the draft and bill of lading before selling the goods, was informed of the appropriation of the proceeds of sale, and could not apply them to an old debt due to himself."

In a recent case in Kentucky a bank had discounted drafts drawn against bills of lading which were deposited with the bank without indorsement or other writing, and without actual delivery of the cotton represented by the bills of lading. The cotton was subsequently attached while in transitu by creditors of the shipper. It was held that the bank had a lien upon the cotton paramount to that created by the levy of the attachment."

§ 263. An informal bill of lading, or one not drawn to order or bearer, may be effectually pledged by delivery without indorsement. A delivery of any documentary evidence of property with an intent that the transferee shall hold the property in pledge, is a good symbolical delivery of it, so as to vest a special property in the transferee. The policy of the law in

Dows v. Nat. Exch. Bank, 91 U. S. 618; Cayuga Bank v. Daniels, 47 N. Y. 631; Merchants' Bank v. Union R. & Trans. Co., 69 N. Y. 373.

2.Holmes v. German Security Bank, 87 Pa. St. 525; approved and followed in Holmes v. Bailey, 92 Pa. St. 57.

3 Petitt v. First Nat. Bank, 4 Bush (Ky.) 334; and see to like effect, Skilling v. Bollman, 6 Mo. App. 76.

* Gibson v. Stevens, 8 How. 384; First Nat. Bank v. Crocker, 111 Mass. 163, 169. The court in the latter case say: "We have then in this case an intent of the general owners of the flour to make use of it as a security for an advance of money from the plaintiffs; a delivery of the bill of lading in pursuance of that intent; and a valuable and executed consideration