mon carrier, is doing plant service and also transportation service on behalf of the shipper under a proper allowance from the line carrier, will present difficulties so long as a shipper is permitted to furnish facilities of transportation in return for an allowance." As has been pointed out above, in nearly every case where an allowance is thus paid for this haulage, the haulage is really done in behalf of the shipper and not the carrier, and therefore improperly paid. That much laxity has been permitted here in the way of allowances and extra services rendered by the carrier without compensation would appear from The Industrial Railways Case, supra, at page 226.

1

NEGOTIATION OF BILLS OF LADING UNDER COMMON LAW AND MERCANTILE THEORIES: NATURE OF INTEREST TRANSFERRED. Misapprehension of the legal consequences of transferring by indorsement a negotiable bill of lading has been a fruitful source of litigation in mercantile communities. The prevailing view at common law is that a negotiation of the document, like a delivery of the goods, conveys only the interest which the parties intend shall pass. But according to the custom of merchants, the person entitled on the face of the document to delivery of the goods, is likewise indicated as owner. To give this custom legal effect some of our principal commercial states have by statute2 or judicial decision3 adopted what may be called the mercantile view of documents of title. The results of most cases decided in accordance with this view may be explained on the theory that any one who comes within the terms of the promise to deliver has title to the goods, just as on the better theory of promissory notes, anyone who brings himself within the terms of the promise to pay is conceived to be owner of the obligation. But it seems more accurate to say that title does not pass to a holder who comes within the terms of the promise unless such was the intent. But if the owner of the goods placed the document in circulation, he is estopped by the representation on its face from denying that a bonâ fide indorsee for value acquires an indefeasible title.

17 WYMAN, PUBLIC SERVICE CORPORATIONS, § 1359.

1 The Carlos F. Roses, 177 U. S. 655; Straus v. Wessel, 30 Oh. St. 211.

In

2 The most important statutes embodying the mercantile view are the SALES ACT (§§ 27-40), which has been passed in Alas., Ariz., Conn., Md., Mass.. Mich., N. J., N. Y., Ohio, R. I. and Wis.; the WAREHOUSE RECEIPTS ACT, passed in Alas., Cal., Col., Conn., D. C., Ill., Ia., Kan., La., Md., Mass., Mich., Minn., Mo., Neb., N. J., N. M., N. Y., Ohio, Ore., Pa., Philippine Is., R. I., S. Dak., Tenn., Vt., Wash., W. Va., and Wis., and the BILLS OF LADING ACT, passed in Alas., Conn., Ill., Ia., La., Md., Mass., Mich.; N. J., N. Y., Ohio and Pa. In the latter statute alone is the finder or thief of a document given power to transfer title by indorsement.

3 Munroe v. Phila. Warehouse Co., 75 Fed. 545; Comm. Bank v. Armsby, 120 Ga. 74, 47 S. E. 589; and see Pollard v. Reardon, 65 Fed. 848, 849.

This seems to be the principle underlying the following provisions of the BILLS OF LADING ACT: "A negotiable bill may be negotiated by any person in possession of the same, however such possession may have been acquired, if, by the terms of the bill, the carrier undertakes to deliver the goods to the order of such person, or if, at the time of negotiation, the bill is in such form that it may be negotiated by delivery."

5 See Peacock v. Rhodes, 2 Doug. 633, 636; and Collins v. Martin, 1 Bos. & P. 648, 651.

• Munroe v. Phila. Warehouse Co., supra; Comm. Bank v. Armsby, supra; and see

most cases either explanation is satisfactory, and gives the documents that facility of negotiation which a mercantile community requires.

8

An owner of goods who transfers a duly indorsed bill of lading to his agent, with no intent to pass title, may under the common-law view assert his title against a bonâ fide indorsee of the agent. This right is cut off under the mercantile view, either on the ground that the agent acquires title regardless of the intent, or that the principal is estopped to assert his title against the holder. On the common-law view, a bank advancing money on the faith of an indorsed bill of lading would be an absolute owner, a mortgagee, or a pledgee according to the intent of the parties. Though the indorsement to the bank would be evidence of intent to pass title, a borrower who could prove the contrary might reclaim his property from a bonâ fide indorsee for value of the bank. On the other hand, by the mercantile view the indorsee would be protected, and it would be immaterial whether this was because the bank had a title of its own to transfer, or on principles of estoppel.10

Where a lender-bank gives up the bill of lading so that the borrower may effect some special disposition of the goods, the bank, to protect itself, usually demands in return a "trust receipt" showing that the borrower has not the full title. Under the common-law view these "trust receipts" are unnecessary, except as evidence of the bank's intent. If the bank had a title, there was no intent to transfer it to the borrower, and the bank could defeat the claim of an indorsee for value of the document or a purchaser of the goods from the borrower.11 In case the bank had merely a pledge or an unrecorded mortgage, which would be valid only where combined with possession,12 it is now clear that intrusting the general owner with possession as agent for a special purpose will not estop the security-holder from asserting his interest against a bonâ fide purchaser.13 Under the mercantile view, the "trust receipts" are inadmissible even to show the bank's intent, which will not defeat the title of a bonâ fide indorsee of the document surrendered,14 or any other

Pollard v. Reardon, supra. Under this theory, a thief or finder of the document cannot transfer a good title by negotiation, because the owner, in the absence of negligence, has done no act to produce the representation of title. Shaw v. Railroad Co., IOI U. S. 557.

7 Fuentes v. Montis, L. R. 3 C. P. 268; Stollenwerck v. Thacher, 115 Mass. 224. 8 Comm. Bank v. Armsby, supra.

The reasoning of the court in Mirabita v. Imperial Ottoman Bank, 3 Ex. D. 164, would lead to this result. The court argues that the entire property in the goods was in the borrower, and consequently without the help of an estoppel an indorsee of the bank could acquire no interest.

10 As a matter of fact, it would seem that the bank usually has a security title, its interest being equivalent to that of a mortgagee in possession. Seward v. Miller, 106 Va. 309, 55 S. E. 681; Comm. Bank v. First State B. & T. Co., 153 S. W. 1175 (Tex. Civ. App.); and see Casey v. Cavaroc, 96 U. S. 467, 477.

11 See Baker v. Brown, 214 Mass. 196, 199, 100 N. E. 1025, 1026; Moors v. Bird, 190 Mass. 400, 77 N. E. 643.

12 In Seward v. Miller, supra, the court says: "The bank in such a case stands in the position of a mortgagee in possession, and is not required in order to protect its lien to have the papers recorded."

13 Moors v. Wyman, 146 Mass. 60.

75 Fed.

14 Pease v. Gloahec, L. R. 1 P. C. 219; Munroe v. Phila. Warehouse Co., 545; R. M. Baker Co. v. Brown, 214 Mass. 196, 100 N. E. 1025 (decided under the SALES ACT).

negotiable document which the borrower was authorized to take out in substitution therefor.15 The bank's only protection would be a notice on the face of the document to rebut the representation of title.16

In a recent Texas case non-negotiable compress receipts, secured by the borrower with proper authority in exchange for negotiable bills of lading, surrendered on "trust receipts," were sold to a bona fide purchaser. The bank was correctly allowed to reclaim the goods. B. W. McMahan & Co. v. State Bank of Shawnee, 160 S. W. 403 (Tex. Civ. App.). Since the mercantile view only applies to negotiable documents of title, the compress receipts can have no better standing than the goods themselves. If the goods themselves were sold, the bank's interest would not be cut off, even under the mercantile view, the purpose of which is merely to remove barriers against the free circulation of negotiable documents.17 The two theories on which the mercantile view is placed do not afford equally satisfactory explanations of this result. If title to the goods was transmitted absolutely to the borrower by the indorsement, there must be an automatic revesting of the bank's interest at the instant when the borrower obtains manual possession of the goods. This cannot be accounted for on legal principles. The logical explanation is that where the bank has represented the borrower as owner on the face of the document, it is estopped from denying the truth of the representation to the damage of one who has given value relying upon it. Mere possession of the goods themselves or of a non-negotiable document does not amount to a representation of title.

RECENT CASES.

ADMIRALTY - TORTS EFFECT OF STATE STATUTE ABOLISHING RIGHT RECOGNIZED BY MARITIME LAW. A state statute abolished the commonlaw liability of employers for injury to employees and substituted therefor a compensation system. The plaintiff, being injured on a vessel within the state, sued in the admiralty court. Held, that the statute does not apply to admiralty causes, as any other construction will make it unconstitutional. The Fred E. Sander, 208 Fed. 724.

For an editorial note on the constitutionality of state legislation which takes away rights previously recognized in admiralty courts, see this issue of the REVIEW, p. 578.

AGENCY

NATURE AND INCIDENTS OF THE RELATION - AGENT ACTING FOR TWO PRINCIPALS. An agent of the defendant insurance company issued a policy on property mortgaged to the plaintiff bank for half its value, "the loss, if any, payable to the mortgagee as his interest might appear."

15 Blydenstein v. N. Y. S. & T. Co., 67 Fed. 469; N. Y. S. & T. Co. v. Lipman, 157 N. Y. 551; semble, In re Dreuil & Co., 205 Fed. 568 (since the borrower was not authorized to take out negotiable receipts for the goods, the shipper was not responsible for the representation they contained).

16 Such a notice was placed on the bills of lading in Farmers' & M. Nat. Bank v. Logan, 74 N. Y. 568; Dows v. Nat. Ex. Bank, 91 U. S. 618; Hieskell v. Farmers' Nat. Bank, 89 Pa. St. 155.

17 Century Throwing Co. v. Muller, 197 Fed. 252; Moors v. Wyman, supra; and see Coker v. First Nat. Bank, 112 Ga. 71, 73; 37 S. E. 122, 123.

The insurance agent was also cashier of the insuring bank, the insurance company not being aware of this fact. Loss occurred to the property. Held, that the insurance company is liable. Citizens' State Bank of Chautauqua v. Shawnee Fire Ins. Co., 137 Pac. 78 (Kan.).

It is not believed that the court's result or reasoning can be supported. Greenwood Ice & Coal Co. v. Georgia Home Ins. Co., 72 Miss. 46, 17 So. 83. See HARV. L. REV. 218. It is argued that there is nothing incompatible in the duties which the agent owed, in regard to this transaction, to his respective principals. If he served the plaintiff in an insignificant capacity, such as watchman, the result might be justified. Northrup v. Germania Fire Ins. Co., 48 Wis. 420. But where he was simultaneously representative of the insurer and cashier of the insured, his dual interests would seem sufficiently antagonistic to invalidate the agreement at least as between the defendant and the bank. See 13 HARV. L. REV. 522, 27 HARV. L. REV. 282.

ATTORNEYS

ADMISSION TO THE BAR - ADMISSION OF WOMEN.-Held, that a woman is not eligible as a candidate for admission to the bar. Bebb v. Law Society, 50 W. N. (Eng.) 355 (High Ct. of Justice, Chan. Div.).

Some American courts, even without positive statutory enactment, have held women qualified to practice as attorneys. In re Petition of Leach, 134 Ind. 665, 34 N. E. 641. In re Thomas, 16 Colo. 441, 27 Pac. 707. Others have reached this result only after such enactments. ACTS AND RESOLVES, MASS. 1882, c. 139. Robinson's Case, 131 Mass. 376. A recent statute has granted to women the right to practice before the United States Supreme Court. U. S. COMP. STAT. 1901 (Suppl. 1911), Sec. 255. Thus American jurisdictions generally are committed to a view contrary to the unduly conservative stand taken by the English courts. See 8 HARV. L. Rev. 174.

CARRIERS

DISCRIMINATION AND OVERCHARGE - INDUSTRIAL RAILWAYS. -Held, that the Interstate Commerce Commission is justified on the facts of this case in finding that an industrial railway, operating between the plant of its proprietary industries and the line carrier and serving other industries in addition, was a common carrier as to all others except its proprietary industry, and as to that it was a mere plant facility. Crane Iron Works v. United States, 209 Fed. 238.

Held, that it was an arbitrary exercise of power for the Interstate Commerce Commission to determine the nature of the service performed by an industrial railway merely by ascertaining whether or not the work was done for the proprietary industry. Louisiana & P. Ry. Co. v. United States, 209 Fed. 244.

The general situation of industrial railways and their effect upon the revenues of the public railroads is described in the Industrial Railway Case, 29 Inter. Com. Rep. 212. For a discussion of the principles involved in these three recent cases, see this issue of the REVIEW at page 580.

CARRIERS - LIMITATION OF LIABILITY — VALIDITY OF EXEMPTION FROM LIABILITY FOR NEGLIGENCE TO SLEEPING-CAR EMPLOYEES.- A porter on a Pullman car was killed by the negligence of the defendant railroad. Contracts between the porter and the Pullman company, and between that company and the defendant, exempted the latter from all liability for injury to the porter. His widow sues for his death. Held, that she may recover, the attempted exemption being against public policy. Coleman v. Pennsylvania R. Co., 89 Atl. 87 (Pa.).

A common carrier, because of the disadvantageous position of the public and the danger of deterioration in service, cannot effectively contract against liability for negligence to a patron. New York Central R. Co. v. Lockwood, 17 Wall. (U. S.) 357. See 26 HARV. L. REV. 742. But in services beyond the

scope of its public duty, the carrier contracts as an ordinary member of society, and the general policy of freedom of contract prevails. Wells v. Steam Navigation Co., 8 N. Y. 375. Accordingly, limitation of liability for negligence is effective if the transportation is purely gratuitous. Kinney v. Central Railroad of New Jersey, 34 N. J. L. 513; Quimby v. Boston & Maine R. Co., 150 Mass. 365, 23 N. E. 205. The exemption is likewise valid against the employees of a news company or circus, which the railroad carries aside from its public undertaking. Alexander v. Toronto & N. R. Co., 33 U. C. Q. B. 474; Robertson v. Old Colony R. Co., 156 Mass. 525, 31 N. E. 650. Cf. Poucher v. New York Central R. Co., 49 N. Y. 263. The established view has been that a railroad owes no public duty to dependent services such as express and sleeping-car lines. Express Cases, 117 U. S. 1; Chicago, etc. R. Co. v. Pullman, etc. Co., 139 U. S. 79. Contra, McDuffee v. Portland & R. R. Co., 52 N. H. 430. See I WYMAN, PUBLIC SERVICE CORPORATIONS, § 470 et seq. Consequently the authorities uphold contracts exempting the railroad from liability for negligence to express messengers. Baltimore & O. S. W. Ry. Co. v. Voigt, 176 U. S. 498; Blank v. Illinois Central R. Co. 182 Ill. 332, 55 N. E. 332. The same view prevails with respect to the employees of sleeping-car companies. Chicago, R. I. & P. Ry. Co. v. Hamler, 215 Ill. 525, 74 N. E. 705; Russell v. Pittsburgh, C., C., & St. L. Ry. Co., 157 Ind. 305, 61 N. E. 678; Denver & R. G. R. Co. v. Whan, 39 Colo. 230, 89 Pac. 39. Contra, Jones v. St. Louis, etc. R. Co., 125 Mo. 666, 28 S. W. 883. But a few authorities, including the principal case, take a different view, reasoning that the transportation of dependent services, once undertaken by the railroad, assumes the incidents of ordinary transportation. Davis v. Chesapeake & O. R. Co., 122 Ky. 528, 92 S. W. 339. As to this particular incident, at least, the reasoning seems unsound. The validity of exemption from liability for negligence depends upon its relation to the interests of the traveling public. The law of public service is interested in giving them, and not all those with whom the carrier deals, an opportunity to contract on equal footing. Furthermore the danger that limitation of liability of dependent services will cause deterioration of service to the employees is so slight as to be negligible. Public policy, of course, would forbid a contract exempting the master from liability for negligence to his servant. Johnston v. Fargo, 184 N. Y. 379, 77 N. E. 388; Lake Shore & M. S. R. Co. v. Spangler, 44 Oh. St. 471. But it is well settled that employees of the Pullman company are not, for this purpose at least, servants of the railroad. McDermon v. Southern Pacific R. Co., 122 Fed. 669; Chicago, R. I. & P. Ry. Co. v. Hamler, supra. The principal case, therefore, is difficult to support.

NECES

CHATTEL MORTGAGES RIGHTS OF INTERVENING CREDITORS SITY OF CHANGE OF POSSESSION WHEN GOODS ARE IN HANDS OF PRIOR MORTGAGEE. Chattels were mortgaged by the owner, and possession given to an agent of the mortgagee. Later a second mortgage was executed to the defendant, the agent of the prior mortgagee agreeing to hold possession for the defendant also. A statute required the recording of chattel mortgages or a change of possession. Neither mortgage was recorded. In an action by the trustee in bankruptcy of the owner, held, that the mortgage of the defendant was void. Moffat v. Beeler, 137 Pac. 963 (Kan.).

The primary purpose of statutes requiring record of chattel mortgages or a change of possession is to prevent the deception to creditors, caused by the retention of possession by the mortgagor. There is no such danger where the property to be mortgaged is already in the possession of a third party not an agent of the mortgagor. Accordingly it has been held that the necessary change of possession is accomplished by an agreement by the third party to hold possession as agent of the mortgagee. Nash v. Ely, 19 Wend. (N. Y.) 523; Hodges v. Hurd, 47 Ill. 363. The same rule prevails in the law of sales. Pierce