on the same principle; it creates a pledge, where that appears to be the intention of the parties; and the circumstance that the value of the goods exceeds the amount of the debt tends to show the intention of the transfer.'

§ 207. There is a contract in use in Louisiana known as an anticresis; it is a pledge of immovable property, possessing some of the features of a mortgage; it is a conveyance of real estate, with a counter letter or stipulation by the grantee to reconvey on payment of the money loaned; it gives the lender, the grantee, possession of the premises, with the income or fruits arising from the property; out of the income the grantee is to pay the taxes and repairs and interest, and to apply the balance on the principal. The grantor's rights remain unimpaired, until they are cut off by a sale under sentence of a court.2 The instrument resembles one form of the mortgage, formerly in use under the common law, namely, the vivum vadium or living pledge, under which the mortgagee took and held possession until the money loaned was paid out of the rents and profits of the property-a form of security now unused, because unsuited to our modern habits."

§ 208. The common law does not enforce a contract of hypothecation, distinct from a pledge or mortgage of goods or chattels; certainly it does not allow, as against creditors and third parties, the creation of secret verbal liens, where the lienholder does not have or retain possession of the property. The hypothecation of a ship or cargo is permitted upon

1 Bright v. Wagle, 3 Dana (Ky.), 252; Houser v. Komp, 3 Pa. St., 208; Marshall v. Williams, 2 Hayw. (N. C.), 405; see Barrow v. Paxton, 5 John. R., 258, and Brown v. Bement, 8 John. R., 93, where a bill sale was held a mortgage.

2 Code of Louisiana, Art. 3102, 3143-3148; Livingston v. Story, 11 Peters, 351, 383.

32 Black. Comm., 157. Ante §§ 177, 178, 187.

4 In Roberts v. Sykes, 30 Barb., 173, 179, the court did not feel authorized to presume a pledge to have been made on an agreement that the pledgee was to hold until paid out of the income from the pledge.

5 Howes v. Ball, 7 Barn. & Cress., 481; 14 Eng. Com. Law, 218. A agreed to give B, a coachmaker, 100l. for a coach, and to pay for the same by four bills of 251. cach; and that B should have a claim upon the coach until the debt was duly paid. Tenterden, C. J., "The transaction amounted to a sale of the coach, so as to transfer the property. That being so, the question is, whether after such a transfer of the property, the seller can havo any valid claim on the property so transferred. Hypothecation is not allowed by the law of England, although in some parts of the Continent, not many years ago, it was allowed." The stipulation was therefore treated as a mere license, valid only as between the two parties to the contract. See Wait v. Greene, 36 N. Y., 556, distinguished

reasons that do not affect ordinary dealings with personal property.1 The spirit and even the very letter of our statute law holds every assignment of goods or chattels, by way of security, void as against creditors; and upholds the mortgage of chattels only when it is properly filed, and is really and fairly given as a security; and never when it is given merely as a cover and for the benefit of the mortgagor. The lien having been once created in good faith by a delivery of the chattels, it will not be defeated by the lienholder's permitting them to be used by the owner for a temporary purpose.3

§ 209. Mode of making a Pledge. Goods and chattels may be pledged by delivering them to a creditor, as collateral security for the payment of the debt due to him. An actual delivery completes the contract. When the terms of the agreement are reduced to writing, it is for the court to determine their legal effect; they create a pledge when they deliver or give over the property as security for the debt, expressly or impliedly reserving a right to redeem; and they create a mortgage when they transfer the general title, subject to a defeasance." There is often, as we have noticed, but little real difference between a contract which the law declares a pledge, and one which it adjudges a chattel mortgage; but this difference is highly important, on account of the difference in the legal rights and remedies arising under them.

5

A verbal pledge, accompanied by a delivery of chattels, is valid; and the contract is to be proved by verbal testimony, showing the actual

from cases of conditional sales in Ballard v. Burgett, 40 N. Y., 314, and in Austin v. Dye, 46 N. Y., 500. A lien is a different thing entirely; it is a right to hold or detain property: McCaffrey v. Wooden, 62 Barb., 316; given back on a pur. chase of goods, in writing, it is a chattel mortgage. Dunning v. Stearns, 9 Barb., 630. A mortgage of a crop yet to be planted, made by the owner of the land, is held valid as against execution creditors. Wyatt v. Watkins, 16 Albany Law Journal, 205. The owner of the land has a right to contract for its cultivation, and may in advance fix the title to the produce by agreement. Andrews v. Newcomb, 32 N. Y., 417.

1 Fontaine v. Col. Ins. Co., 9 John. R., 29.

2 Edgell v. Hart, 9 N. Y. (5 Seld.), 213; Ford v. Williams, 24 N. Y., 359.

3 Hall v. Tuttle, 8 Wend., 331; Ferguson v. Union Furnace Co., 9 Wend. 345; see Allen v. Spencer, 1 Edm., 317.

4 Stearns v. Marsh, 4 Denio, 227.

McLean v. Walker, 10 John. R., 471, 474; Brownell v. Hawkins, 4 Barb., 491; see Parshall v. Eggart, 52 Barb., 337; S. Č., 54 N. Y., 18; Bright v. Wagle, 3 Dana (Ky.), 252; Heyde v. Nick, 5 Leigh (Va.), 335.

6 Bunacleugh v. Poolman, 3 Daly, 233; Langdon v. Bush, 9 Wend., 80; these are border cases; they resemble a mortgage more than a pledge; Dunning v. Stearns, 9 Barb., 630.

transaction.1 Words alone will be sufficient to create a pledge, where the intention is clear and the goods are already in the pledgee's possession; as a gift may be consummated by mere words, where the subject of it is already in the donce's possession. The mode of the delivery is not at all important, it may be made directly to the pledgee, or to a third person to hold for him. And in the case of heavy and cumbersome articles, like logs lying in a boom, the delivery may be made without moving them. The actual custody of the goods need not in all cases be transferred to the pledgee; it is not always necessary in a sale, in order to transfer the title; and it is quite evident that a delivery sufficient to pass the title under a contract of sale, must be sufficient to create a valid contract of pledge. A subsequent delivery, following a contract of sale or pledge, will render it valid."

8

§ 210. The situation of goods or chattels can rarely be such as to prevent the owner from pledging them. The goods being stored in a warehouse, the delivery may be made by a written transfer, on the warehouseman's agreement to hold the property subject to the order of the transferee; and when the goods are in transit in the hands of a carrier, the delivery may be made by a transfer of the bill of lading. The delivery is accomplished in these cases, by transferring to the pledgee the means with the right to take the actual possession of the goods.

9

The owner of goods, by permitting them to be shipped in the name of another person, arms that person with the power to dispose of the goods; he enables him to take the bill of lading in his own name; he invests him with written evidence of title to the property; and the law protects a third party taking them in good faith as a pledge or security for an

1 Parsons v. Overmire, 22 Ill., 58; Milliken v. Dehon, 27 N. Y., 365; so in respect to chattel mortgages; Hall v. Tuttle, 8 Wend., 375; Ferguson v. Union F. Co., 9 Wend., 345.

2 Brown v. Warren, 43 N. H., 430.

3 Lydia Allen v. Cowan, 23 N. Y., 502.

A Sumner v. Hamlet, 12 Pick. (Mass.), 76.

Jewett v. Warren, 12 Mass., 300; Ridder v. McKnight, 13 John. R., 294. 6 Hankins v. Baker, 46 N. Y., 666; Winne v. McDonald, 5 Bosw., 130; 39 N. Y., 233.

'Parshall v. Eggart, 54 N. Y., 18.

Pierce v. Gibson, 2 Ind., 408; Gibson v. Stevens, 8 How. U. S., 384; Griswold v. Havens, 25 N. Y., 595; Whitney v. Tibbits, 17 Wis., 359; Cartwright v. Wilmerding, 24 N. Y., 521.

9 EDWARDS on Factors and Brokers, §§ 41, 50; Durbrow v. McDonald, 5 Bosw., 130; 39 N. Y., 233; 24 N. Y., 521; Harris v. Birch, 9 Mees. & Wels.,

advance upon them.' The effect is the same where the owner sells goods, and allows the purchaser to ship them in his own name, before the price is paid. Fraud in the shipper's purchase of the goods, sufficient to annul the contract as against him, will not, it seems, defeat the party making advances on the strength of the title; but where the bill of lading is fabricated or procured on stolen receipts, it amounts to nothing as a security for advances; it is but an item of evidence to establish a felony."

§ 211. The factor's act, as we have said, specifies three instruments as documentary evidence of title to goods, upon which third parties may safely act in making advances upon the property; namely, a bill of lading, a custom-house permit, and a warehouse keeper's receipt. The bill of lading is the carrier's contract; it states on whose account and risk the goods are shipped, and this statement is evidence that the person so named is the real owner; as shipper he may transfer the bill, and with it the goods which it respresents; or he can pledge the property by a simple delivery of the bill, as security for the payment of a draft drawn on the consignee. The carrier delivers on production of the 'bill of lading, and where the shipper indorses upon it an order to deliver to the consignee on payment of the annexed draft, he can only receive the goods on making the payment thus called for. The delivery of

1 See 4 Geo. IV., ch. 83; 6 Geo. IV., ch. 94; 5 and 6 Vict., ch. 39; and R. S. of N. Y., 76, fifth ed.; also 4 N. Y. Statutes at Large, 461. The first section of the New York statute enacts that, "Every person in whose name any merchandise shall be shipped, shall be deemed the true owner thereof, so far as to entitle the consignee 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." See Dows v. Rush, 28 Barb., 157; S. C., 16 N. Y., .325; 24 N. Y., 638; Blossom v. Champion, 28 Barb., 217; Keyser v. Harbeck, 3 Duer, 373; the title cannot pass under a felony, Florence Sewing Machine Co. v. Warferd, 1 Sweeny, 433; see Armount v. M. C. R. R. Co., 65 N. Y., 111. 2 Winne v. McDonald, 39 N. Y., 233; Smith v. Lynes, 5 N. Y., 1 Seld., 44. 3 An honest purchaser for value from the fraudulent vendee acquires a good title; on this principle a pledgee for present advances is entitled to protection: Durbrow v. McDonald, 5 Bosw., 130; Williams v. Lilt, 36 N. Y., 319; Barnard v. Campbell, 58 N. Y., 73.

4 Brower v. Peabody, 13 N. Y., 121; 45 N. Y., 387. The Schooner Freeman v. -Buckingham, 18 How. U. S., 182; Grant v. Norway, 10 Com. B., 665; Saltus v. Everett, 20 Wend., 267.

5 See 3 of the N. Y. Factor's Act, above cited.

6 Bank of Rochester v. Jones, 4 N. Y. (4 Comst.), 497; The City Bank v. Rome, W. & O. R. R. Co., 44 N. Y., 136; Petitt v. First &c. Bank, 4 Bush (Ky.), 334; post,

629.

the bill as collateral security on the discount of the draft, is more than a pledge; it is a transfer of the title to the cargo, in trust to sell it and use the proceeds to pay the draft.

1

Duly issued on a shipment of goods, the bill of lading represents the property; and a transfer of it has the same legal effect as a transfer of the property. Hence, when the bill requires the carrier, as it often does, to deliver the goods at the end of the voyage to the bearer, or to the order of the shipper, or to his assigns, it declares on its face the shipper's right of property and control over the goods; and it is daily used by him in mercantile transactions as a collateral security for advances.2 The shipper, being the owner, has control of the property; until he parts with the bill of lading, he has the constructive or legal possession, and the right to the immediate actual possession; and the law allows him to pledge or dispose of the goods, subject only to the right of the: carrier to compensation for his services.

§ 212. The shipper has the power to deal with the goods as his own; he may therefore revoke a consignment after the bill of lading has been. signed, or he may draw on the consignee and transfer the bill to secure the payment of the draft, and thus render the consignment conditional upon the acceptance or payment of the draft. He may do this, even where he is under an agreement to ship the goods to the consignee on account of prior advances; the agreement does not bind the goods.3

When the bill of lading is made payable to order, the party in possession of the bill duly endorsed is entitled to receive the goods; he is the person entrusted with the evidence of title, and the proper party to enter the goods at the custom house. Holding the title in this manner, he can obtain advances on the goods; assuming that the bill has been duly transferred to him. Not being negotiable like a bill of exchange, the bare custody of the bill (of lading) is not conclusive evidence of title; and, therefore, a misappropriation of the bill by a clerk will not deprive the owner of his right of property. The intention of the statute is to protect third persons dealing honestly with the consignee, entrusted

5

1 Hailles v. Smith, 1 Bos. & Pull., 563; Nathans v. Giles, 5 Taunt., 588; Allen v. Williams, 12 Pick., 297.

2 Craig v. Sibbert & Jones, 15 Penn. St., 238; 4 N. Y., 497; Lanfear v. Blossman, 1 La. Ann. R., 148.

3 Cayuga Co. National Bank v. Daniels, 47 N. Y., 631; Marine Bank of Chicago v. Wright, 46 Barb., 45; Hauterman v. Book, 1 Daly, 366.

4 Bruce's Warehouse Manual, 17.

Lickbarrow v. Mason, 2 T. R., 63; 5 T. R., 367, 683; post § 629.

6 Gurney v. Behrend, 3 Ellis & Black., 622; Zachrisson v. Ahman, 2 Sand., 63; Com. Bank of Rochester v. Cole, 15 Barb., 506; Covill v. Hill, 4 Denio, 323.