thority to sell or consign the same, ships or otherwise transmits or delivers to any other person, such other person shall have a lien thereon for any money or merchandise advanced, or negotiable security given by him, on the faith of such consignment, to or for the use of the person in whose name such consignment or delivery was made; and for any money, negotiable security, or merchandise, received for the use of the consignee by the person in whose name such consignment or delivery was made, if such consignee had, at the time of such advance or receipt, probable cause to believe that the person in whose name the merchandise was shipped, transmitted, or delivered, was the actual owner thereof, or had a legal interest therein to the amount of said lien.

When a consignee or factor having possession of merchandise with authority to sell the same, or having possession of a bill of lading, permit, certificate, or order, for the delivery of merchandise, with like authority, deposits or pledges such merchandise or any part thereof, or such document, with any other person as a security for money or merchandise advanced, or a negotiable instrument given by him upon the credit. thereof, such other person, if he makes such loans, advances, and exchanges, in good faith and with probable cause to believe that the agent making the deposit or pledge had authority so to do, and was not acting fraudulently against the owner of such merchandise, shall acquire the same interest in and authority over such merchandise and documents as he would have acquired thereby if the agent had been the actual owner thereof, notwithstanding he had notice of such agency. When such merchandise or document is accepted in deposit or pledge for an antecedent debt due from such consignee or factor, the person receiving the same shall thereby acquire no other or further right, or interest in, or authority over, or lien upon, the same than the consignee or factor might have enforced against the actual owner.

These provisions shall not affect the lien of a consignee or factor at law for the expenses and charges attending the shipment, transportation, and care of merchandise intrusted to

him; nor prevent the actual owner from recovering such merchandise from the consignee or factor previous to the pledge thereof, or from his assignees in case of his insolvency; nor prevent such owner from recovering any merchandise or document so deposited or pledged, upon tender of the money and restoration of the negotiable security or property so advanced to such consignee or factor, and upon tender of such further sum of money and restoration of such negotiable instrument or property as may have been advanced or given by the consignee or factor to the owner, or upon tender of a sum of money equal to the amount or value thereof, nor prevent him from recovering from the person with whom such merchandise may have been so deposited or pledged, any balance of money remaining in his hands as the proceeds of the sales thereof, after deducting the amount of the moneys or of the negotiable security so advanced thereon.1

Under the Massachusetts statute if a pledgee has knowledge that the pledgor is a factor or consignee and is pledging the goods of his principal for loans beyond the amount of his advances, and that he was not authorized to pledge them for loans beyond that amount, he is not protected as a holder for value beyond that amount."

§ 337. New York' and Ohio.'-Every person in whose name

1 A consignee or factor who deposits or pledges merchandise or a bill of lading, certificate, or order for the delivery of merchandise, consigned or intrusted to him as security for money borrowed, or a negotiable instrument received by him, or disposes of or applies the same to his own use in violation of good faith and with intent to defraud the owner thereof, or with the like fraudulent intent disposes of, or applies to his own use any money or negotiable instrument raised or acquired by the sale or other disposition of such merchandise, bill of lading,

certificate, or order, shall be punished by fine not exceeding five thousand dollars, and imprisonment not exceeding five years. P. S. 1882, c. 203, § 75.

2 Goodwin v. Massachusetts Loan & T. Co., 152 Mass. 189, 25 N. E. Rep. 100.

3 Laws 1830, c. 179; 2 R. S. 1875, p. 1168, §§ 1-5; 3 R. S. 1882, p. 2257; 2 R. S. (Birdseye) 1896, p. 1239, §§ 1–5.

42 R. S. Annotated (Bates) 1897, §§ 3214-3218. The first factors' act in New York was passed in 1830. That in Ohio in 1844. See Cleveland v. Shoeman, 40 Ohio St. 176.

any merchandise shall be shipped shall be deemed the true owner thereof, so far as to entitle the consignee of such merchandise to a lien thereon: 1. For any money advanced or negotiable security given by such consignee, to or for the use of the person in whose name such shipment shall have been made; and, 2. For any money or negotiable security received by the person in whose name such shipment shall have been made to or for the use of such consignee. The lien so provided for shall not exist where such consignee shall have notice, by the bill of lading or otherwise, at or before the advancing of any money or security by him, or at or before the receiving of such money or security by the person in whose name the shipment shall have been made, that such person is not the actual and bona fide owner thereof.

Every factor or other agent intrusted with the possession of any bill of lading, custom-house permit, or warehouse-keeper's receipt for the delivery of any such merchandise, and every such factor or agent not having the documentary evidence of title, who shall be intrusted with the possession of any merchandise for the purpose of sale, or as a security for any advances to be made or obtained thereon, shall be deemed to be the true owner thereof, so far as to give validity to any contract made by such agent with any other person for the sale or disposition of the whole or any part of such merchandise, for any money advanced or negotiable instrument or other obligation in writing given by such other person upon the faith thereof.'

Every person who shall hereafter accept or take any such merchandise in deposit from any such agent as a security for any antecedent debt or demand, shall not acquire thereby or enforce any right or interest in or to such merchandise or document, other than was possessed or might have been enforced by such agent at the time of such deposit.

Nothing contained in the foregoing provisions shall be con

1 See New York Security & Trust Co. v. Lipman, 157 N. Y. 551, 52 N. E. Rep. 595.

strued to prevent the true owner of any merchandise so deposited, from demanding or receiving the same, upon repayment of the money advanced, or on restoration of the security given on the deposit of such merchandise, and upon satisfying such lien as may exist thereon in favor of the agent who may have deposited the same; nor from recovering any balance which may remain in the hands of the person with whom such merchandise shall have been deposited as the produce of the sale thereof, after satisfying the amount justly due to such person by reason of such deposit.'

It will be noticed that under this statute a pledgee, in dealing with an agent or factor, is not protected if he has knowledge that the factor is not the actual and bona fide owner of the goods pledged. If the factor or agent is rightfully in the possession of this principal's goods intrusted to him, his pledgee is protected, but if it happen that the agent or factor obtained possession of the goods by fraudulent means, his pledgee of such goods, knowing that he is dealing with an agent or factor, is not protected. "The obvious meaning is," say the supreme court of New York, "that the factor or other agent who has been intrusted with certain documentary evidence of title, or with the possession and ostensible ownership of the property, shall be deemed the true owner, so far as may be necessary to protect those who have dealt with him upon the faith thereof, that is, upon the faith induced by the usual

1It is further provided in New York that every factor or agent who shall deposit any merchandise intrusted or consigned to him, or any document so possessed or intrusted as aforesaid, as a security for any money borrowed or negotiable instrument received by such factor or agent, and shall apply or dispose of the same to his own use, contrary to good faith, and with intent to defraud the true owner; and every factor or agent who shall sell any merchandise intrusted or consigned to him, in the like manner and

with the like fraudulent intent; and every other person who shall knowingly connive with, or aid or assist, any such factor or agent in any such fraudulent deposit or sale, shall be deemed guilty of a misdemeanor, and upon conviction thereof, shall be punished by fine and imprisonment, at the discretion of the court in which such conviction shall take place. 3 R. S. 1881, p. 2258, § 7.

2 Cartwright v. Wilmerding, 24 N. Y. 521; Stevens v. Wilson, 6 Hill 512; Howland v. Woodruff, 60 N. Y. 73.

indicia of title, that he was the true owner of the property. The second section of the British statute, which answers very nearly to the third section of our own, contains a proviso which expressly saves the rights of the true owner where the pledgee had notice that he was dealing with an agent, and our statute, though framed in a different manner, was evidently to produce the same result. It is impossible to suppose that the legislature intended to enable the factor to commit a fraud upon his principal, by pledging or obtaining advances upon the goods for his own purposes, when the pledgee or person making the advances knew that he was not dealing with the true owner.""

The factors' act has no application when a factor or agent has obtained goods which have been taken by a common-law larceny from the true owner.

2

§ 338. Pennsylvania.-Whenever any person intrusted with merchandise, and having authority to sell or consign the same, shall ship or otherwise transmit the same to any other person, such other person shall have a lien thereon: 1st. For any money advanced or negotiable security given by him on the faith of such consignment to, or for the use of the person in whose name such merchandise was shipped or transmitted. 2d. For any money or negotiable security received for the use of such consignee by the person in whose name such merchandise was shipped or transmitted. But such lien shall not exist for any of the purposes aforesaid, if such consignee shall have notice, by the bill of lading or otherwise, before the time of such advance or receipt, that the person in whose name such merchandise was shipped or transmitted is not the actual owner thereof.

Whenever any consignee or factor having possession of merchandise, with authority to sell the same, or having possession of any bill of lading, permit, certificate, receipt, or

1 Stevens v. Wilson, 6 Hill 512.

2 Soltau v. Gerdau, 119 N. Y. 380, 23 N. E. Rep. 864, 48 Hun 537, 1 N.Y. Supp. 168.

3 Brightly's Purdon's Digest 1873, p. 664; Brightly's Purdon's Digest 1894, p. 867. Act construed in Macky v. Dillinger, 73 Pa. St. 85.