time bearing in mind that any one who sues another for negligence has the general burden of proving it.1

It may be added that, in employing his own agents about the pledge, the pledgee is answerable like other bailees, within the usual rules of principal and agent, for their negligence. And doubtless every pledgee is bound to observe good faith and honor towards the thing entrusted to his keeping.3 § 402. Whether Pledgee may use the Pledge. Another important inquiry, in this connection, concerns the extent to which the pledgee may make use of the thing pledged to him. Judge Story, relying largely upon the older decisions and dicta, sums up the law in five propositions, which are founded in the presumed intent of the pledgor. But such a statement of the law might appear, in these days, not quite consistent with reason, unless accepted with qualifications. Thus, Chancellor Kent evidently thinks that profits, if any, should be applied towards the indebtedness. Such discus

1 See Story Bailm. ib.; Beardslee v. Richardson, 11 Wend. 25; Marsh v. Horne, 5 B. & Cr. 322; Tompkins v. Saltmarsh, 14 S. & R. 275. As to this shifting of the burden of proof in bailment suits, which sometimes involves very delicate distinctions, see Schoul. Bailm. § 23.

2 Schoul. Bailm. § 209; Androscoggin R. v. Auburn Bank, 48 Me. 335.

3 Coggs v. Bernard, 2 Ld. Raym. 909; Schoul. Bailm. §§ 209, 210; Story Bailm. § 341. But see § 404, post, as to sub-pledge or wrongful transfer by a pledgee.

4 (1.) If the pledge is of such a nature that the due preservation of it requires some use, such use is not only justifiable, but it is indispensable to the faithful discharge of the pledgee's duty. (2.) If the pledge would be worse for the use, as the wearing of clothes which are deposited, its use is prohibited to the pledgee. (3.) If the pledge is such

that its keeping is a charge to the pledgee, the pledgee may use it by way of recompense (as they say) for the keeping. (4.) If the use will be beneficial to the pledge, or it is indifferent, there it seems that the pledgee may use it; as if the pledge is of a setting dog, it may well be presumed that the owner would consent to the dog's being used in partridge shooting, and thus confirmed in the habits which make him valuable. (5.) If the use will be without any injury, and yet the pledge will thereby be exposed to extraordinary perils, the use is by implication interdicted. Story Bailm. §§ 329, 330, citing Coggs v. Bernard, 2 Ld. Raym. 909, 917.

5 See 2 Kent Com. 578; Thompson v. Patrick, 4 Watts, 414; Jones Bailm. 81. And though, in the old case of a cow, it was held that the pledgee might milk the cow and use the milk, this was probably on the supposition that it no more and no less than compensated for the care

sions seem unprofitable for practical application and we apprehend they becloud the true principle of the bailment.

In modern times the pledge transaction has become too important to be determined by petty instances. And on the whole, the pledgee's right to use a pledge rests, as we think, on the presumed reasonable intention of the parties and to some extent upon the custom of the times; the general principle being, after all, that the pledge is but a security for the pledgor's debt or engagement, not a thing, on the one hand, to cause the pledgee extraordinary charges, nor, on the other hand, to give him any substantial profit in the mere keeping; but that in the one case, on a final reckoning, the credit goes to the pledgee and in the other to the pledgor. If the pledge consist in good stock, or other valuable securities yielding dividends and profits, or in a herd of cattle, the pledgee certainly cannot avail himself of the dividends or profits save as in discharge pro tanto of the debt, and the interest, if any, which accrues thereon, and proper charges, or other satisfaction of the pledge undertaking.1

§ 403. Right of Pledgee to sue Third Parties, Assign, Transfer, etc. As to the special property in the pledge by virtue of the bailment, we may observe further that the pledgee has the right to sue not only third persons, but the owner himself, if need be, for wrongfully invading his possessory rights, and that he may recover by replevin or for damages. The measure of damages in a suit against third persons is the full value of the pledge, and not merely the pledgee's own interest, since his ultimate liability to the owner is for the

of the animal and keeping it in health; and any justification of the principle beyond this can only be on the ground that in trivial matters it is not well to try to be too precise. See Schoul. Bailm. §§ 211, 212, for further comments upon Story Bailm. §§ 329, 330. As to others of the above propositions, and particularly the second, it should be said that the line cannot in fairness be strongly

drawn between things which would be and things which would not be injured by the use.

1 See Schoul. Bailm. 198; Androscoggin R. v. Auburn Bank, 48 Me. 335. The pledgee of stock may collect and apply dividends to the debt. 8 Mo. App. 118. And see as to coupons, Whitin v. Paul, 13 R. I. 40.

whole pledge; 1 but as against the pledgor and those in privity with him, only his special interest as pledgee.2

It is likewise an admitted principle that the pledgee may assign over the pledge (unless in special cases where the transaction is of a personal nature) in order that the assignee may take it subject to all the responsibilities under the original pledge transaction; or he may deliver it into the hands of a stranger for safe custody; or he may convey his interest conditionally by way of pledge to another person; in all of which cases his security is not destroyed or impaired. 3 The right is here more liberally conceded by the law than in the case of a mere lien claimant. But any such act on the pledgee's part is, of course, subject, properly speaking, to all the original restrictions; for to attempt to pledge property beyond the pledgee's own demand, or to make a transfer as though he were the absolute owner, is regarded as a breach of trust and a fraud upon the original pledgor; so that the pledgee's creditor can in general acquire no title in the property beyond that of the original pledgee himself. The consequences, as concerns third persons acting bona fide, may be more sweeping, in debarring the pledgor from pursuing the thing, it is true, when the pledged property consists of negotiable paper, or perhaps of certain quasi negotiable securities; this on principles sufficiently indicated elsewhere.5

1 Story Bailm. § 303; 2 Kent Com. 585; Donald v. Suckling, L. R. 1 Q. B. 585; Adams v. O'Connor, 100 Mass. 515; Harker v. Dement, 9 Gill, 7; Swire v. Leach, 18 C. B. N. s. 479; Schoul. Bailm. § 217; L. R. 3 P. C. 548; 1 Kerr, N. B. 150; United States Express Co. v. Meinto, 72 Ill. 293.

2 Treadwell v. Davis, 34 Cal. 601; 4 Barb. 491; 13 Ill. 466; Schoul. Bailm. § 217.

8 Story Bailm. §§ 322-324; Whitaker v. Sumner, 20 Pick. 399; Mores v. Conham, Owen, 123; 2 Kent Com. 579; Shelton v. French, 33 Conn. 489; Schoul. Bailm. § 218.

4 Ib. And see Belden v. Perkins,

78 Ill. 449; Ashton's Appeal, 73 Penn. St. 153; 37 N. Y. 540.

5 See Bills and Notes," infra; vol. 2, part iv. c. 1. The general rule as to negotiable instruments is, that one acquiring title bonâ fide without notice of infirmity and on valuable consideration is to be protected in his rights, even though the things came to him through some wrongful transfer, and even though they were stolen from the true owner. Ib. As to overdue paper or an instrument whose negotiability appears restricted on inspection, it is otherwise. Even as to quasi negotiable instruments, like a bill of lading, the favor thus accorded

§ 404. The Same Subject. But according to many of the latest American cases which follow late English precedents, the pledgee's transfer in breach of trust does not necessarily so impair his security as to give the pledgor a right to reclaim the thing on other or better terms than before the transfer, and regardless of what he owed. Particularly is this true where the breach of trust appears rather a technical one than with a wholly wrongful intent; as if a pledgee should merely sub-pledge or assign over for a greater amount than was due him; and the rule is thus far applied with especial reference to things easily replaced in kind, like marketable stocks and bonds, and where too the third party was not an intentional wrong-doer. A pledgee's over-dealing with the pledge appears thus to be regarded, conformably to the convenient modern practice of recouping damages in a suit, not as utterly annihilating the pledge contract nor as extinguishing his interest in the chattel, but so that the pledgor must tender satisfaction of the pledge before he can recover possession from any such third person for value to whom the pledgee may have transferred it. The rule is, however, to be cautiously asserted; for there are some chattels, as, for instance, valuable paintings, whose pledge might not properly carry an implied right of assigning custody at all to strangers without the pledgor's permission; 2 and it is still barely possible that in a tortious dealing by the pledgee utterly inconsistent with his undertaking, and with the third person in collusion, the pledge contract might be held as terminated in such a sense that the whole bailment security would be wholly lost.3

to the bona fide possessor is not usually allowed. Shaw v. Merchants' Bank, 101 U. S. 557. See § 471. And if the third party bought or advanced upon the negotiable instrument with due notice of the infirmity of the title, or if he received it as a gift, he fails of protection within the rule. Ib.

1 Donald v. Suckling, L. R. 1 Q. B. 585; Johnson v. Stear, 15 C. B. N. s. 338. This is the declared American

rule in various instances. Talty v.
Freedman's Savings Co., 93 U. S. 321;
15 Mass. 389; Lewis v. Mott, 36 N. Y.
395;
Belden v. Perkins, 78 Ill. 449;
Schoul. Bailm. § 219; First Nat. Bank
v. Boyce, 78 Ky. 42.

2 Cockburn, C. J., and Blackburn, J., in Donald v. Suckling, L. R. 1 Q. B. 585, 615, 618.

8 Ib.

§ 405. Pledgor's Right to transfer his Own Interest, etc. The pledgor has rights, too, with reference to the pledged property. He may sell or assign his own interest in the pledge, subject to the pledgee's rights, in which case the vendee will stand in the pledgor's place and can redeem the pledge and hold the pledgee to account.1 So may he pledge and then mortgage the thing; the effect being to make the mortgage a junior incumbrance on the title, somewhat analogous to a second mortgage of real estate. At the common law, goods pawned or pledged and in the pledgee's suitable possession are not liable to execution in an action against the pledgor, so long at least as the pledgee's title remains unextinguished; nor, under like circumstances, to distress for the pledgor's own debt. But in some parts of the United States there are statutes which give to an attaching or execution creditor the right to the proceeds of a pledge to the extent of the pledgor's right to a surplus after satisfying the pledge. A pledgor's bankruptcy or insolvency does not of itself impair the pledgee's security; nor does his death.5

§ 406. True Owner's Rights where the Pledge was wrongful. -On the general principle of bailments there can be no valid pledge or transfer of title as against the true owner of a thing, who has not personally or by agent, expressly or by implication, assented to the transaction. A bailee's mere possession of goods gives him no power to pledge them for his own debt or engagement and as his own without actual authority from the owner; and whether by wrongful sale or pledge, personal property is not to be held by transfer at common law as against the true owner, without his assent, however incapable of repudiation might be the transaction. as between the parties themselves. Hence the true owner

12 Kent Com. 579; Franklin v. Neate, 13 M. & W. 481; Schoul. Bailm. § 220; Story Bailm. §§ 350, 353; Goss v. Emerson, 3 Fost. 38.

2 Sanders v. Davis, 13 B. Mon. 432. 3 Swire v. Leach, 18 C. B. n. s. 479; Stief v. Hart, 1 Comst. 20; Pomeroy v. Smith, 17 Pick. 85; Reichenbach v. McKean, 95 Penn. St. 432; 31 La.