has a superior equity.' Thus if a bill of lading accompanied by drafts upon the consignee be delivered as security for prior advances, the title vests in him as against a subsequent innocent purchaser for value to whom a duplicate of the bill of lading, or the goods themselves are delivered. And so if the goods before arrival at their destination be reshipped, and a new bill of lading be issued therefor while the original bill of lading is outstanding, and in the hands of one who has taken it as security for advances, the property remains in the latter, although the goods be delivered to the consignee under the new bill of lading. The holder of the original bill of lading may in such case recover the property in an action of replevin, as against the consignee or as against one who has made advances to him upon the goods.

3

Cotton was shipped in India for London, the master of the vessel signing a bill of lading in three parts. On the arrival of the cotton in London, the consignee having received from the consignor's bankers the three parts of the bill of lading, delivered two of them as security for advances upon the cotton, and afterwards fraudulently deposited the third with another person for another advance. The latter obtained possession of the cotton, whereupon the first pledgee brought an action of trover against him for converting the cotton, and it was held that he was entitled to recover against such second pledgee. Upon the argument the plaintiff claimed that the indorsement to him was by way of pledge, and that it passed to him a sufficient right of property to enable him to maintain this action; and the defendant contended that while his claim was also by way of pledge, he had the better title because he had obtained actual possession of the property. In the court of common pleas, and also in the exchequer chamber, it was

1 Kent's Comm., 308; Barber v. Meyerstein, L. R. 4 H. L. 317, L. R. 2 C. P. 38, 661; Skilling v. Bollman, 6 Mo. App. 76; The Thames, 14 Wall.

98.

Skilling v. Bollman, 6 Mo. App.

3 Hieskell v. Farmers' & Mechanics' Nat. Bank, 89 Pa. St. 155.

* Meyerstein v. Barber, L. R. 2 C. P. 38, 661, affirmed Barber v. Meyerstein, L. R. 4 H. L. 317, 331.

held that the mere indorsement of the bill of lading was such a delivery of the goods as amounted to a valid pledge, and gave the plaintiff a sufficient property to enable him to maintain the action against the defendant; and this judgment was affirmed by the House of Lords. To the objections urged against this conclusion the Lord Chancellor, giving his opinion in the House, said: "It is said that a frightful amount of fraud may be perpetrated if persons are allowed to deal in this way with bills of lading drawn in sets, if you allow efficacy to be given to the first assignment of one of those bills, to the detriment of persons who may take, for value, subsequent assignments of the others. All we can say is, that such has been the law hitherto, and that the consequences of the supposed evil, whatever they may be, have not been considered to be such as to counterbalance the great advantages and facilities afforded by the transfer of bills of lading. There is no authority or reason for holding that the person who first obtains the assignment of a bill of lading, and has given value for it, shall not acquire the legal ownership of the goods it represents. It seems to be required by the exigencies of mankind. It may be a satisfaction to be told by Mr. Justice Willes (though it is a matter upon which I put no reliance) that other nations concur with us in holding that, whatever inconveniences there may be attending it, the person who gets the first assignment for value is the person to be preferred."

In the same case Lord Westbury, in regard to the obligation. of the first pledgee, to give notice of his rights to the wharfinger in charge of the cargo, said: "It was contended at the bar that he had been guilty of laches, because he did not follow up the title he had acquired by giving notice of it to the wharfinger. But that is quite immaterial when a man has got both the right of property and the right of possession, passing, by a symbol, the bill of lading, which is at once both the symbol of the property and the evidence of the right of possession. When his title is thus complete there is no obligation on him to give notice to any one. There was, therefore, no laches on his part, nor was there any ground of complaint that he failed

in ordinary prudence, or that he did not in law and equity complete his security."

§ 279. But the carrier is justified in delivering the goods to the consignee on his producing one of a set of bills though there has been a prior indorsement of another part as security for a loan, provided the carrier has no notice or knowledge of such prior indorsement. Thus goods having been shipped for London, the shipmaster signed a set of three bills of lading marked "First," "Second," and "Third," respectively, making the goods deliverable to the consignees, or their assigns, "the one of the bills being accomplished, the others to stand void." During the voyage the consignees indorsed the bill marked "First" to a bank in consideration of a loan. Upon the arrival of the ship in London the goods were placed in the custody of a dock company, to whom the consignee produced the bill of lading marked "Second," and the dock company in good faith and without notice of the bank's claim delivered the goods. It was held by the House of Lords, affirming the decision of the court of appeal, that the dock company had not been guilty of a conversion, and that the bank could not maintain any action against them.' Lord Chancellor Selborne, in delivering judgment, said: "Every one claiming as assignee under a bill of lading must be bound by its terms, and by the contract between the shipper of the goods and the shipowner therein expressed. The primary office and purpose of a bill of lading, although by mercantile law and usage it is a symbol of the right of property in the goods, is to express the terms of the contract between the shipper and the shipowner. It is for the benefit of the shipper that the right to take delivery of the goods is made assignable, and it is for the benefit and security of the shipowner that when several bills of lading, all of the same tenor and date, are given as to the same goods, it is provided that.

1 Glyn v. East & West India Dock Co., L. R. 7 App. Cas. 591; and see Shaw v. Foster, L. R. 5 H. L. 321;

London and County Banking Co. v. Ratcliffe, 6 App. Cas. 722, 729; Fearon v. Bowers, 1 Sm. L. C., 8th ed., 782.

'the one of these bills being accomplished, the others are to stand void.' It would be neither reasonable nor equitable, nor in accordance with the terms of such a contract, that an assignment, of which the shipowner has no notice, should prevent a bona fide delivery under one of the bills of lading, produced to him by the person named on the face of it as entitled to delivery (in the absence of assignment), from being a discharge to the shipowner. Assignment, being a change of title since the contract, is not to be presumed by the shipowner in the absence of notice, any more than a change of title is to be presumed in any other case when the original party to a contract comes forward and claims its performance, the other party having no notice of anything to displace his right. He has notice, indeed, that an assignment is possible, but he has no notice that it has taken place. There is no proof of any mercantile usage putting the shipowner, in such a case, under an obligation to inquire whether there has in fact been an assignment or not; and, in the absence of such usage, I am of opinion that it is for the assignee to give notice of his title to the shipowner, if he desires to make it secure, and not for the shipowner to make any such inquiry."

CHAPTER VII.

PLEDGES OF WAREHOUSE RECEIPTS.

I. How far warehouse receipts are negotiable, 280-297.

II. How they may be transferred in pledge, 298-302.

III. Rights of a bona fide pledgee, 303-313.

IV. The warehouseman must have the goods in store before issuing a receipt, 314-320.

V. The owner of goods can not give a valid receipt for them as warehouseman, 321-326.

I. How Far Warehouse Receipts are Negotiable.

§ 280. Warehouse receipts by custom have long been considered as representing the property mentioned in them; and the assignment or indorsement of such instruments has long been regarded as equivalent to the delivery of such property.' The transfer of the certificate transfers to the vendee or pledgee the legal title and constructive possession of the property, and the warehouseman from the time of the transfer becomes his bailee. The delivery of the evidence of title is equivalent to a delivery of the property itself, and it sufficiently manifests the intention of the parties that the title and possession shall pass.* Thus, receipts issued by storage and forwarding merchants for

1 Young v. Lambert, L. R. 3 P. C. 142; M'Neil v. Hill, 1 Woolw. 96; Stewart v. Phoenix Ins. Co., 9 Lea (Tenn.) 104; Horr v. Barker, 8 Cal. 603, 614; Second National Bank v. Walbridge, 19 Ohio St. 419, 2 Am. Rep. 408; Gibson v. Chillicothe Bank, 11 Ohio St. 311; Newcomb v. Cabell, 10 Bush (Ky.) 460; Hanchett v. Buckley, 27 Ill. App. 159; Conrad v. Fisher, 37 Mo. App. 352, 367; Western Union

R. Co. v. Wagner, 65 Ill. 197; Burton v. Curyea, 40 Ill. 320, 325, 89 Am. Dec. 350; St. Louis Nat. Bank v. Ross, 9 Mo. App. 399; Fourth Nat. Bank v. St. Louis Cotton Compress Co., 11 Mo. App. 333; First Nat. Bank v. Harkness, 42 W. Va. 156, 168, 24 S. E. Rep. 548, quoting text.

2 Gibson v. Stevens, 8 How. 384, 400; Yenni v. McNamee, 45 N. Y. 614, per Grover, J.