whereupon the creditor attached the goods as the property of the consignor. The discounting bank brought replevin against the attaching officer. The court held that the delivery of the bill of lading vested a valid title to the goods in the bank and gave it a right to maintain the action, Mr. Justice AMES saying, “It is true that a receipt of this kind does not purport on its face to have the quasi-negotiable character which is sometimes said to belong to bills of lading in the ordinary form; neither does it purport in terms to be good to the bearer. But independently of any indorsement or formal transfer in writing, the possession and production of it would be evidence indicating to the carrier that the bank was entitled to demand the property, and that he would be justified in delivering it to them. There are cases in which the delivery of a receipt of this nature, though not indorsed or formally transferred, yet intended as a transfer, has been held to be a good symbolical delivery of the property described in it. In Haille v. Smith,' EYRE, C. J., uses this language: I see no reason why we should not expound the doctrine of transfer very largely upon the agreement of the parties, and upon their intent to carry the substance of that agreement into execution.""

§ 505. The Bank of Green Bay v. Dearborn' has met with what would seem to be an adverse criticism in a later Massachusetts case, Hallgarten v. Oldham. In that case the contest was between the pledgee of a warehouse receipt and an attaching creditor of the pledgor. The receipt contained a promise to "deliver to him," the owner, upon the payment of charges, etc. It was indorsed in blank by the pledgor and delivered to the plaintiff. No notice of this was given to the warehouseman by the plaintiff until after the levy of the defendants' attachment. The court held that enough had not been done to give the plaintiff a valid title against the attaching creditor, since the delivery or change of possession required by the case of Lanfear v. Sumner, in a case like that under consideration, where the goods were in the hands of a middleman, “could only be brought to pass by his becoming the servant of the purchaser for the purpose of holding the goods;" that the

1 1 B. & P. 563.
2 115 Mass. 219.

3 135 ib. 1.

4 17 ib. 110.

middleman could become such only by his own consent; that "it may or may not be true 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 indorsee without more, on ordinary principles of contract;" but that as the warehouse receipt under consideration contained no such undertaking, the warehouseman could not be considered to have attorned by the mere indorsement and delivery to the plaintiff.1

The court, by Mr. Justice HOLMES, said: "It is true there are one or two decisions of this court which it is somewhat hard to reconcile with the foregoing principles. The strongest of these is Green Bay National Bank v. Dearborn." . . . . "It will be observed that the document [in the latter case] did not run to order, and was not indorsed, so that it could not be argued that the railroad company had attorned in advance, and there was no notice to the company, so that it had not made itself the plaintiff's bailee subsequently, if ordinary principles were to be applied." "But whatever the scope of Green Bay National Bank v. Dearborn, we cannot apply it as a precedent in the present case, so long as Lanfear v. Sumner stands. When a private warehouseman, who has an unfettered right to choose the persons for whom he will hold, gives a receipt containing only an undertaking to his bailor personally, without the words, "or order," or any other form of offer or assent to hold for any one else, it is impossible to say that a mere indorsement over of that receipt will make him bailee for a stranger."

§ 506. Language so positive as this would seem, indeed, to amount to a rejection of the principle of the case criticised. Hallgarten v. Oldham is believed to be the latest case upon this subject in Massachusetts. It is submitted however that of the two cases, that first decided contains the more intelligently and liberally reasoned conclusion and that the narrow

1 There is also a dictum in the case of Henderson v. The Comptois d'Escompte de Paris, L. R. 5 P. C. 260, to the effect that "in order to make bills of lading negotiable, some words

as or order or assigns' ought to be in them," such being "the general view of the mercantile world for some time." 2 135 Mass. 1.

rule of the last is inconsistent with the general modern view of the doctrine of transfer. It should be added that in deciding Hallgarten v. Oldham1 the court was guided, not altogether by what it there enunciated as rules of common law, but by the provisions of the Massachusetts statute relating to warehouse receipts. The court concluded its opinion by saying, "We are confirmed in the view we take by observing that the legislature, in dealing with public warehousemen, and providing that the title to goods stored. . . . 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.'

507. Hallgarten v. Oldham, indeed, does not militate against the general principle that an ordinary quasi-negotiable bill of lading or warehouse receipt may be validly transferred by delivery alone, for the question there arose upon an instrument that was not only delivered but indorsed. The real question was not as to the mode of negotiating the instrument, but as to its negotiability in any mode, when words of negotiability are absent. The case has been noticed at this point, however, because it has seemed to overthrow a distinct decision of the point that if a bill of lading or warehouse receipt is negotiable at all, it is negotiable by a delivery alone with an intent to thereby pass title.

§ 508. The effect of the indorsement and delivery of a bill of lading varies according to the intention of the parties. It consequently renders the bill a muniment of various kinds of title: absolute, defeasible, special, conditional, or merely formal, since the intention may be either to pass the whole property in goods already paid for; to pass that property subject to an unpaid vendor's right to assert his lien for the price by stopping the goods in transit; to create a mortgage or pledge of the goods as security for an advance; to pass a title which shall become absolute only on the performance of certain conditions, usually the acceptance or payment of drafts for the price, or to pass only such a merely apparent title as would enable an agent to sell the goods or stop them in transit. These subjects are treated elsewhere, in their appropriate places.

CHAPTER XXXVI.

THE BILL OF LADING AS A COLLATERAL SECURITY.

§ 509. BILLS of lading are frequently transferred where the transaction is not intended to give permanent ownership, but to furnish security for advances made upon the faith of the transfer. Few transactions in the commercial world are more frequent than the transfer of bills of lading as collateral security

to a bank or other pledgee making an advance upon the credit of the pledgor's ownership therein indicated. It has become the customary mode of purchase and sale between parties who require the services of a carrier for delivery, for the consiguor to draw a draft for the price upon the consignee, which, with the bill of lading attached, or accompanying it, he procures to be discounted by a bank or private capitalist. The latter holds the bill of lading as security for the consignee's acceptance or payment of the draft through the holder's agent at the terminal point of the transit and delivers it to the consignee upon such acceptance or payment. In some cases a pledge is created by the consignee's delivering the bill of lading to a bank as security for a loan by the latter for the payment of the purchase price.

§ 510. Such a transfer of the bill of lading is a pledge of the goods themselves and, unless circumstances indicative of a different intention appear, it constitutes prima facie evidence of an intention to pass to the pledgee a title to the goods which shall protect him to the extent of his advances upon them. Unless a different agreement is expressly made, the pledge will be construed as intended to protect the pledgee only until he has been placed in possession of another security, namely, the accepted draft for the price. The character of the pledgee's title in such a transaction has sometimes been inaccurately stated. Language has been used which would seem to indicate an opinion that such a pledgee is clothed with the same complete and absolute legal ownership as an actual proprietor of the goods. That such is not the case follows from the principle already discussed, that a transferree of a bill of lading has only such property in the goods as was within and necessary to effectuate, the intent of the transfer. It is nevertheless true and strictly in accordance with such principle, that no distinction is observed between the rights of one to whom such a bill is transferred as collateral and those of an actual purchaser of the goods, so far as the exercise of those rights is necessary for the holder's self-protection. So far as it is necessary to afford and enforce this protection, the pledgee holds the legal title to the goods and is entitled, in respect