erty described therein, the delivery of the other should have the same effect. There is no substantial difference between the two cases.'

2

§ 300. Contrary to the general rule that a complete delivery of property represented by a warehouse receipt or bill of lading may be made by merely delivering this document, though it be not negotiable in form, is a recent decision of the supreme court of Massachusetts.' The owner of goods stored at a private warehouse took a receipt whereby the warehouseman promised to deliver them to him, and not to his order, upon the payment of charges. The owner indorsed this receipt in blank and delivered it to a creditor as collateral security. Before the latter had given any notice of the transfer to the warehouseman the goods were attached as the property of the general owner. It was held that there had not been a sufficient delivery of the goods to the pledgee to protect him against the attaching creditor. This decision is based upon the rule laid down in an earlier decision of the court, that an actual delivery of property, that is, a change of possession, is essential to protect a purchaser, as against an attaching creditor. Mr. Justice Holmes, delivering the opinion of the court, said: "The question is then how the transfer of any document can have that effect. The goods are in the hands of a middleman and they remain there. A true change of possession could only be brought to pass by his becoming the servant of the purchaser for the purpose of holding the goods so that his custody should become the possession of his master. But this is not what happens, and it has been held that less would satisfy the law. A carrier or the warehouseman in this case is not the servant of either party quoad the possession but a bailee holding in his own name, and asserting a lien for his charges against all parties. He alone has possession of the

764.

'Hallgarten v. Oldham, 135 Mass. v. Frank, 12 Ore. 507, 8 Pac. Rep. 1, 46 Am. Rep. 433. See contra, §§ 263, 299, and Conrad v. Fisher, 37 Mo. App. 352, 368. Followed in Gill

2 Lanfear v. Sumner, 17 Mass. 110, 9 Am. Dec. 119.

But it has

goods whether the document is transferred or not. been held that the principle of the rule requiring a delivery is satisfied, although the letter of it is not, if the possessor of the goods becomes the purchaser's bailee.' Now it is obvious that a custodian can not become the servant of another in respect of his custody except by his own agreement, and a fortiori when that custodian does not yield but maintains his own possession, it is clear that his custody can not inure to the benefit of another as if it were possession of that other, unless the bailee consents to hold for him subject to his own rights. The only way, therefore, in which a document can be a symbol of the goods in a bailee's hands, for the purpose of delivery to a purchaser is by showing his consent to become the purchaser's bailee. It may or may not be that if a warehouse receipt contains an undertaking to deliver to order, that undertaking is to be regarded as an offer by the warehouseman to any one who will take the receipt on the faith of it, and that it will make him warehouseman for the indorser without more, on ordinary principles of contract. * * * The appeal to commercial usage can not help the plaintiff's case. If there be any usage to treat such documents as this as symbols of property in the sense of the argument for the plaintiffs, it is simply a usage to disregard well settled rules of law affecting the rights of third persons. But we doubt if a prudent merchant would advance

2

1 Tuxworth v. Moore, 9 Pick. 347, 20 Am. Dec. 479; Russell v. O'Brien, 127 Mass. 349, 354; Dempsey v. Gardner, 127 Mass. 381, 383, 34 Am. Rep. 389.

2" That is the argument of Benjamin on Sales, 2d ed., 676, et seq., criticising Farina v. Home, 16 M. & W. 119, and Blackburn on Sales, 297. But the criticism and the case agree in the assumption that the only way in which the indorsement of a document or title can have the effect of a delivery is by making the custodian bailee for the holder of the document, and that he can not be made so other

wise than by his consent. The necessity for notice in those cases when notice is necessary, stands on the same ground. If the custodian has not assented in advance he must assent subsequently; and the principle is the same whether an express acceptance of a delivery order be required or it is held sufficient if he does not dissent when notified. Boardman v. Spooner, 13 Allen 353, 357, C. J., 90 Am. Dec. 196; instructions of Shaw, C. J., to the jury in Carter v. Willard, 19 Pick. 1, 3; Bentall v. Burn, 3 B. & C. 423." Per Holmes, J.

on the indorsement of a private warehouse receipt not running to order before he had made sure of the warehouseman's assent. We are confirmed in the view which we take by observing that the legislature in dealing with public warehousemen and providing that the "title to goods stored, etc. * * * shall pass to a purchaser or pledgee by the indorsement and delivery to him of the warehouseman's receipt, as a preliminary to that result expressly requires that the receipt "shall be negotiable in form."

§ 301. A warehouse receipt which recites that the property therein mentioned is deliverable to bearer, may be transferred by the owner without indorsement so as to pass the title to the property, if the transfer be made with that intent. A statute which provides that warehouse receipts may be transferred by indorsement does not operate to prevent the passing of title by delivery without indorsement, if the language of the statute be permissive only and not imperative; for the right exists without the statute. The object of such a statute is not to prevent the owner of the property from passing the title in any manner previously effectual for that purpose, but to protect those who deal with persons who are entrusted with such evidences of title only as factors or agents.

Under the statute of Missouri it is held that there must be both indorsement and delivery to confer negotiability upon a warehouse receipt. A warehouse receipt payable to bearer is not negotiable unless indorsed by the owner and delivered. The statute makes such receipt negotiable by indorsement and delivery; not by indorsement without delivery, nor by delivery without indorsement.* But it is not to be inferred from

1 P. S., c. 72, § 6.

would have been easy for the legisla

2 Alabama State Bank v. Barnes, 82 ture to say that warehouse receipts Ala. 607, 2 So. Rep. 349.

Rice v. Cutler, 17 Wis. 351, 84 Am. Dec. 747, Alabama State Bank v. Barnes, 82 Ala. 607, 2 So. Rep. 349.

* Erie & Pacific Dispatch v. St. Louis Compress Co., 6 Mo. App. 172. It

should be negotiable in the same manner as bills of exchange, and then the statute would be susceptible of the interpretation sought to be given to it. Per Bakewell, J.

this decision that an effectual pledge of such a receipt can not be made without indorsement; but only that a transfer not made negotiable by indorsement and delivery can convey to the transferee no greater rights than would be acquired by a transfer of the goods which the receipt represents. A pledge by delivery of the receipt unindorsed is as effectual as a pledge by delivery of the goods themselves.'

§ 302. An acknowledgment of notice of the transfer of a warehouse receipt, signed in blank, by the warehouseman, the name of the transferee being omitted, makes the warehouseman responsible to a pledgee holding the receipt, whose name may afterwards be inserted; and it is immaterial whether the warehouseman had actual knowledge of the person to whom the transfer was made or not.2

III. Rights of a Bona Fide Pledgee.

§ 303. A fraudulent purchaser who has obtained a warehouse receipt for the property may give a good title to it, by transferring the receipt to bona fide pledgee before the seller has taken any step to disaffirm the sale on account of the fraud.' The transfer of the receipt passes the title as effectually as would the actual handing over the property which is the subject of the receipt. Thus, the owner of a cargo of corn having agreed to sell it, sent the cargo to a warehouse designated by the purchaser to have the corn discharged. The warehouseman made out and delivered a receipt to the purchaser, who immediately pledged it as security for a loan made on the faith of it. The purchaser was insolvent at the time, and failed to pay the price of the corn, and the seller replevied it. It was held that

1St. Louis Nat. Bank v. Ross, 9 Mo. App. 399, 411; Fourth Nat. Bank v. St. Louis Cotton Comp. Co., 11 Mo. App. 333.

dall, 33 Me. 202; Chicago Dock Co. v. Foster, 48 Ill. 507; Fourth Nat. Bank v. St. Louis Cotton Comp. Co., 11 Mo. App. 333; Amann v. Lowell,

2 Central Savings Bank v. Garrison, 66 Cal. 306, 5 Pac. Rep. 363. 2 Mo. App. 58.

Hoffman v. Noble, 6 Met. (Mass.) 68, 39 Am. Dec. 711; Ditson v. Ran

4 Western Union R. Co. v. Wagner, 65 Ill. 197; Burton v. Curyea, 40 Ill. 320, 89 Am. Dec. 350.

the buyer's possession of the receipt was equivalent to his possession of the corn, and that the pledgee having, in good faith, made advances on the receipt, he was entitled to protection. The seller claimed that the warehouseman should have sent the receipt to him, instead of giving it to the buyer; but it was held, under the circumstances of the case, that, inasmuch as the seller had not informed the warehouseman of his claim to hold the corn until it was paid for, the latter was not bound to protect the seller. But, even if the warehouseman had been chargeable with omission or mistake in delivering the receipt to the purchaser, the latter, having the apparent title and right of possession, could effectually pledge the property, and the seller would be left to his remedy against the warehouse

man.

§ 304. A fraudulent or felonious transfer of a warehouse receipt passes no title as against the true owner. There is an obvious distinction between cases where goods or non-negotiable securities have been obtained by fraud and felony against the will of the owner, and cases where the owner has voluntarily, although induced by false pretenses or representations, delivered possession. In the one case, the owner has no intention of parting with his property, in the other he has.* In the one case, the property having been feloniously taken from the owner, no title passes from him; but in the other, the owner having voluntarily invested another with the power of disposal, he is estopped as against an innocent third person, dealing upon the faith of such power, from claiming title him