onerate the drawees from their obligation to accept, the express terms of the indorsee's contract with the drawers exonerates the former from any duty to deliver the bill of lading except upon payment. Consequently where the drawer thus confers upon his indorsee the power to withhold from the drawee the security without which the latter under his contract is not obliged to accept the bill, the drawer is not entitled to demand formal presentment of the bill of exchange for acceptance and notice of its non-acceptance. The intention of the shipper that his agent shall hold a bill of lading until payment of the accompanying draft must of course be expressed clearly to the agent. For, as has been seen, the prevalent custom is to hold it only as security for acceptance. To hold it until the draft is not only accepted but paid, is "an exceptional course, adopted only in times of peril and suspicion." § 528. It follows that a consignee of goods which the vendor has pledged to secure their price can entitle himself to possession of the goods only by payment or tender of the price, or by giving the specified obligation to pay the price at a future time. The appropriation under the contract of sale is, in the case of such a pledge, conditional and the pledgee's title remains paramount to that of the consignee until the conditions are performed.3 § 529. The property in the goods vests in the consignee upon his acceptance or payment of the draft, where, at least, there has been a sale of the goods and not an absolute reservation by the vendor of the jus disponendi. Upon such an acceptance or payment, or tender thereof, the pledgee of the bill has no further right over the bill of lading or the goods. Where the vendor has made the bill deliverable to his own order, it has been held that the consignee can obtain no title, although he tenders his acceptance or payment of the draft, 1 Schuchardt v. Hall, 36 Md. 590. Gurney v. Behrend, 3 Ellis & Blackburn, 630. Alderman v. Eastern R. Co., 115 Mass. 233; Newcomb v. Boston & Lowell R. Co., ib. 230; Turner v. Trustees Liverpool Docks, 6 Ex. 543; Shepherd v. Harrison, L. R. 4 Q. B. 196; Ogg v. Shuter, L. R. 10 C. P. 159. 4 Wait v. Baker, 2 Ex. 1; Ellershaw v. Magniac, 6 ib. 570; Gavarron v. Kreeft, L. R. 10 Ex. 274. but where the bill of lading has been dealt with only to secure the contract price, the property vests in the consignee upon his payment or tender of the price. If thereupon the pledgee refuses to deliver the goods, the latter is liable to the consignee in damages for the non-delivery.1 § 530. The pledgee's right to the goods, or to equivalent damages, is not divested by the consignee's obtaining possession of them from the carrier without accepting the draft. In such a case the pledgee may maintain an action against the consignee for the proceeds of the goods if he has sold them, as for moneys had and received. If the consignee obtain the goods under a duplicate bill of lading inadvertently placed in his possession; or under an invoice which the carrier treats as sufficient authority; or in any other way save by the authority of the pledgee, he thereby obtains no title which will prevail against that of the latter, where delivery is by the terms of the contract, express or implied, made conditional upon his payment or acceptance of the draft. Thus where the consignee was sent an invoice of the shipment and, by presenting it to the captain of the vessel by which the goods were shipped, obtained possession and sent them to an auctioneer to be sold, without paying a draft drawn against him for the price, the pledgee of the bill of lading was held entitled to maintain trover against the auctioneer.3 § 531. Where the consignee's possession has been obtained even through the pledgee's own delivery of the goods, the latter's title is not thereby destroyed or impaired where the bill of lading was delivered under an express stipulation that the goods, being pledged for the payment of the draft, are placed in the control of the consignee, or his agent in trust, to redeem the pledge. Where in such a case an agent of the consignee who has seen a copy of the pledgee's indorsement of the 1 Mirabita v. Imperial Ottoman Bank, 3 Ex. D. 164; 38 Law Times R. (N. S.) 597. • Indiana Nat. Bank v. Colgate, 4 Daly, 41; People's Bank v. Stewart, 3 P. & B. (New Brunswick) 268; Millar v. Saving Ass'n, 3 Weekly People's Bank v. Stewart, 3 P. & bill of lading, creating such a trust of the goods, delivers the latter to the consignee's vendee, to whom such agent has made advances for the purchase, the agent is liable to the pledgee for conversion.1 1 Farmers & Mechanics' Bank v. Hazeltine, 78 N. Y. 104. CHAPTER XXXVII. THE BILL-HOLDER'S TITLE AND THE RIGHt of stoppagE IN TRANSITU. The right in general, § 532. The bill must have been obtained in The consideration for the transferWhat bill-holders may defeat the right of stoppage, § 538. the transfer and payment of con- The same. Transfer as collateral for The bill-holder has only such an inte- "to arrive," etc., § 545. unless the bill is transferred, § 547. Notice of stoppage to the carrier after the vendee's transfer of the bill, § 548. § 532. THE most important of all the consignor's rights is that of stoppage in transitu, namely, the right of an unpaid vendor, in the case of his vendee's insolvency, to stop the goods while in the course of transportation to the latter. The origin of this right, whether derived or developed from the principles of equity, from analogies in the common law, or from the growth of pure mercantile custom,' its character and effect, whether a rescission of the contract of sale or the establishment of a lien and the multitudinous phases of the question in its various applications, are not within the scope of the present dis See Lord Abinger in Gibson v. Carruthers, 8 M. & W. 337; Wise man v. Vandeputt, 2 Vernon, 202; Burghall v. Howard, 1 H. Bl. 366, n. cussion,' save as the exercise of the right may be affected by the issue and negotiation of bills of lading for the goods. shipped. In discussing the latter, it must be remembered that the right amounts in substance to an extension by the law merchant of the lien for price which a vendor has before delivery. It is a lien of a peculiar character, in that its existence is not dependent, like that of ordinary liens for price, upon the co-existence of the right and fact of possession and is not lost with the loss of either. In the case of a sale of goods upon credit, the right of possession and the right of property are immediately transferred to the vendee. Both rights are qualified and are defeasible by his insolvency before possession is obtained. To the vendee belongs the right of property. Upon him must fall the loss incurred in any accident in the transit and in him is the right to claim possession upon tender of the price. Until the latter is made, the vendor's right to resume possession is retained and may be asserted. § 533. Although the law has thus adjusted the respective rights of the principals in the transaction, it frequently happens that equities are created in favor of third parties, which are superior to that of the vendor. Such an equity is most frequently raised by the negotiation of the bills of lading for the goods shipped. The cardinal proposition relative to this modification of the principle is that the right to stop in transitu may be defeated by a transfer of the bill of lading for value to a bona fide indorsee. The leading case in its establishment is that of Lickbarrow v. Mason, decided in the House of Lords in 1793. In that case the consignors of a cargo sent two bills of lading therefor to the consignee, indorsed in blank,-another bill being retained by them and a fourth by the master of the vessel. Bills of exchange for the price were afterward drawn by the consignors upon the consignee and by him accepted. The consignee sent to the plaintiffs, before the arrival of the cargo, the two bills of lading, together with the invoice, which he had received from the consignors, in order that the plaintiffs 1 See a general discussion of the subject in Benjamin on Sales, Book V., Part I., c. v. 22 T. R. 63; 1 H. Bl. 357; 6 East, 21. |