already indicated, and many writers and judges have therefore said that bills of lading are quasi negotiable."

Bills of lading constitute such a convenient method of dealing with goods which (being in the hands of the carrier) are physically inaccessible that they are of tremendous commercial importance, and commercial customs and usages have naturally lent to them certain distinctive characteristics. In many states statutes have been passed changing the common-law incidents of bills of lading." Some of the statutes, using an exceedingly unfortunate terminology, have declared them negotiable in the same manner that promissory notes or bills of exchange are negotiable.10 It has been held, however, that these statutes could not have been intended to change totally the character of the bill of lading and put it on the same 7 Barnard v. Campbell, 55 N. Y. 456, 14 Am. Rep. 289; Newhall v. Central Pac. R. Co., 51 Cal. 345, 21 Am. Rep. 713.

• Among the most frequent and important of the commercial transactions involving bills of lading is the taking by the consignor of goods of the bill of lading to his order and the drawing of a draft on the consignee for the purchase price. This draft is then attached to the bill of lading and sent to a bank in the consignee's city. In such case, the bill of lading is ordinarily to be regarded as security for the acceptance of the draft by the consignee rather than for its payment. Dows v. National Exch. Bank, 91 U. S. 618, 630, 23 L. Ed. 214; National Bank of Commerce v. Merchants' Nat. Bank, 91 U. S. 92, 23 L. Ed. 208; Mears v. Waples, 4 Houst. (Del.) 62; Landfear v. Blossman, 1 La. Ann. 148, 45 Am. Dec. 76. As to the rights of the pledgee of the bill of lading as against attaching creditors, see NEILL v. ROGERS BROS. PRODUCE CO., 41 W. Va. 37, 23 S. E. 702, Dobie Cas. Bailments and Carriers, 122. The consignee is therefore entitled to the delivery of the bill of lading when he accepts the draft. National Bank of Commerce v. Merchants' Nat. Bank, 91 U. S. 92, 23 L. Ed. 208; Schuchardt v. Hall, 36 Md. 590, 11 Am. Rep. 514; Security Bank of Minnesota v. Luttgen, 29 Minn. 363, 13 N. W. 151; Marine Bank of Chicago v. Wright, 48 N. Y. 1; Cayuga County Nat. Bank v. Daniels, 47 N. Y. 631. When the consignor of goods takes a bill of lading, which he pledges, the pledgee acquires rights superior to those of the consignee. Richardson v. Nathan, 167 Pa. 513, 31 Atl. 740; Hieskell v. Farmers' & Mechanics' Nat. Bank, 89 Pa. 155, 33 Am. Rep. 745; Bank of Rochester v. Jones, 4 N. Y. 497, 501, 55 Am. Dec. 290. On the other hand, when the consignee has the bill of lading, and pledges it, the consignor cannot subsequently stop the goods in transitu without paying the pledgee the amount secured to him. Kemp v. Falk, 7 App. Cas. (Eng.) 573; Spalding v. Ruding, 6 Beav. (Eng.) 376. If a bill of lading consists of more than one part, a pledgee advancing money on one of the set has a better title than a subsequent purchaser taking the goods or a duplicate bill. Skilling v. Bollman, 6 Mo. App. 76. And see Hieskell v. Farmers' & Mechanics' Nat. Bank, 89 Pa. 155, 33 Am. Rep. 745; Meyerstein v. Barber, L. R. 2 C. P. (Eng.) 38; Id., L. R. 4 H. L. 317, 331.

For such statutes, and cases construing them, see Jones, Collateral Securities (3d Ed.) §§ 233-240.

10 For specimens of such statutes, see Rev. Laws La. 1897, § 2485; Code Pub. Gen. Laws Md. 1904, art. 14, § 1; Rev. St. Mo. 1909, §§ 11956, 11957.

footing as promissory notes or bills of exchange." Owing to essential distinctions between a note or bill of exchange, on the one hand, and the bill of lading, on the other, any other holding would have led to strange, if not impossible, consequences.

Warehouse Receipts

The general nature of warehouse receipts has already been discussed.12 Like bills of lading, they stand for the goods they represent, they are not negotiable, and their transfer is legally equivalent to a delivery of such goods.18 So close is their legal parallel to bills of lading that they require no further discussion here.1

SAME-SPECIAL PROPERTY OF PLEDGEE IN PLEDGED GOODS-RIGHT TO BRING SUIT

79. The pledgee has a special property in the pledged goods, involving the right to possession of them, and this he can protect by an appropriate action.

The courts agree that the pledgee's interest in the pledged goods rises to the dignity of a special property.15 Involved in this is the right to the possession of the goods, which the pledgee can assert

11 Shaw v. North Pennsylvania R. Co., 101 U. S. 557, 25 L. Ed. 892; Tiedeman v. Knox, 53 Md. 612, 614; Douglas v. People's Bank of Kentucky, 86 Ky. 175, 5 S. W. 420, 9 Am. St. Rep. 276; Jones, Collateral Securities (3d Ed.) § 241.

12 Ante, pp. 163, 196.

13 On warehouse receipts as collateral security, see Jones, Collateral Securities (3d Ed.) §§ 280-326; Burton v. Curyea, 40 Ill. 320, 89 Am. Dec. 350; Western Union R. Co. v. Wagner, 65 Ill. 197; Second Nat. Bank of Toledo v. Walbridge, 19 Ohio St. 419, 2 Am. Rep. 408; Gibson v. Chillicothe Branch of State Bank of Ohio, 11 Ohio St. 311; Newcomb v. Cabell, 10 Bush (Ky.) 460; Stewart v. Phoenix Ins. Co., 9 Lea (Tenn.) 104; Horr v. Barker, 8 Cal. 603; St. Louis Nat. Bank v. Ross, 9 Mo. App. 399; Fourth Nat. Bank v. St. Louis Cotton Compress Co., 11 Mo. App. 333; Gibson v. Stevens, 8 How. 384, 12 L. Ed. 1123; Chicago Dock Co. v. Foster, 48 Ill. 507; Ditson v. Randall, 33 Me. 202; Fourth Nat. Bank v. St. Louis Cotton Compress Co., 11 Mo. App. 333; Western Union R. Co. v. Wagner, 65 Ill. 197; Hoyt v. Baker, 15 Abb. Prac. N. S. (N. Y.) 405; McCombie v. Spader, 1 Hun (N. Y.) 193; Paddon v. Taylor, 44 N. Y. 371; Barnard v. Campbell, 55 N. Y. 456, 14 Am. Rep. 289; FIRST NAT. BANK OF PARKERSBURG v. HARKNESS, 42 W. Va. 156, 24 S. E. 548, 32 L. R. A. 408, Dobie Cas. Bailments and Carriers, 109; Bush v. Export Storage Co., 136 Fed. 918.

14 Just as is the case of bills of lading, many state statutes have been passed declaring warehouse receipts negotiable. These statutes are collected in Jones, Collateral Securities (3d Ed.) §§ 283-295.

15 Dickey v. Pocomoke City Nat. Bank, 89 Md. 280, 43 Atl. 33; First Nat. Bank of Chicago v. Bayley, 115 Mass. 228; Moreland v. Houghton, 94 Mich. 548, 54 N. W. 285; Marts v. Cumberland Mut. Fire Ins. Co., 44 N. J. Law, 478.

as against the world, including the pledgor.16 This right, too, continues until the payment of the debt or the performance of the undertaking secured by the pledge.1

This possession the pledgee can protect by the appropriate action, when it is tortiously interfered with either by the pledgor or by third parties. Thus, he may bring detinue or replevin to recover his lost possession,18 or trover for the conversion of the goods.1o When the pledgee sues third persons in trover, he can (it is generally held) recover the full value of the goods,20 when he holds any excess beyond his own interest on behalf of the pledgor. But when the action is against the pledgor, the pledgee then, of course, recovers only for his own interest, usually the amount of the debt."1

SAME-RIGHT TO USE THE PLEDGED GOODS

80. The pledgee has ordinarily no right to use the pledged goods.

Ordinarily, in the absence of any agreement or assent by the pledgor, the pledgee has no right to use the thing pledged,22 and any

16 Robinson & Co. v. Ralph, 74 Neb. 55, 103 N. W. 1044; Mitchell v. McLeod, 127 Iowa, 733, 104 N. W. 349; Coleman v. Shelton, 2 McCord Eq. (S. C.) 126, 16 Am. Dec. 639; Yeatman v. Savings Inst., 95 U. S. 764, 24 L. Ed. 589; Mitchell v. Brown, 6 Cold. (Tenn.) 505; Printup v. Johnson, 19 Ga. 73; Kittera's Estate, 17 Pa. 416. A pledgee may hold more than one security as collateral for the same debt. Union Bank v. Laird, 2 Wheat. (U. S.) 390, 4 L. Ed. 269.

17 Caven v. Harsh, 186 Pa. 132, 40 Atl. 321; Ætna Ins. Co. v. Bank of Wilcox, 48 Neb. 544, 67 N. W. 449; Bartlett v. Johnson, 9 Allen (Mass.) 530. 18 Noles v. Marable, 50 Ala. 366; Gamson v. Pritchard, 210 Mass. 296, 96 N. E. 715.

19 Miller v. McKenzie, 11 Ga. App. 494, 75 S. E. 820; Easton v. Hodges (C. C.) 18 Fed. 677; Einstein v. Dunn, 171 N. Y. 648, 63 N. E. 1116; United States Exp. Co. v. Meints, 72 Ill. 293; Treadwell v. Davis, 34 Cal. 601, 94 Am. Dec. 770; Roeder v. Green Tree Brewery Co., 33 Mo. App. 69; Brownell v. Hawkins, 4 Barb. (N. Y.) 491. The pledgee of a promissory note may maintain an action against a pledgor for the conversion of the note, where the latter has obtained the note, though without fraud, under an agreement that he is to return it or another note, which agreement he refuses to comply with. Way v. Davidson, 12 Gray (Mass.) 465, 74 Am. Dec. 604.

20 Adams v. O'Connor, 100 Mass. 515, 1 Am. Rep. 137; Ullman v. Barnard, 7 Gray (Mass.) 554; Pomeroy v. Smith, 17 Pick. (Mass.) 85; Lyle v. Barker, 5 Bin. (Pa.) 457; Baldwin v. Bradley, 69 Ill. 32; Benjamin v. Stremple, 13 Ill. 466; United States Exp. Co. v. Meints, 72 Ill. 293; Treadwell v. Davis, 34 Cal. 601, 94 Am. Dec. 770; Soule v. White, 14 Me. 436.

21 Treadwell v. Davis, 34 Cal. 601, 94 Am. Dec. 770; Lyle v. Barker, 5 Bin. (Pa.) 457, 460; Ingersoll v. Van Bokkelin, 7 Cow. (N. Y.) 681; Hays v Riddle, 1 Sandf. (N. Y.) 248; Hurst v. Coley (C. C.) 15 Fed. 645.

22 By the civil law there are two kinds of pledges,-the pawn and anti

such use of it is wrongful.23 The advantage accruing to the pledgee from the transaction consists solely in the right to hold the goods merely as a security, and no beneficial use by the pledgee is contemplated.

In some of the older cases it was said that the pledgee could make any use of the pledged goods which did not thereby injure them or impair their value; but this is clearly erroneous, and has been repudiated by practically all of the late cases. Of course (as in bailments for bailor's sole benefit2), when the proper custody of the thing involves use (for example, exercising a horse), this use is treated as merely incidental to the custody, and is not such a beneficial use as is forbidden to the pledgee, and thus does not render him absolutely liable as an insurer for loss or injury to the thing pledged.

SAME-PROFITS OF THE THING PLEDGED

81. The pledgee can hold the profits and increase of the thing pledged, but he must account for these to the pledgor.

A pledgee is entitled to hold the profits and increase of the thing pledged as a part of his security, but these must be applied towards the payment of the debt secured.26 Of course, if the debt is paid in full from other funds, the pledgee must restore such profits and increase along with the thing pledged. Thus it is the duty of the

chresis. A thing is said to be pawned when a movable thing is given as security. The antichresis is when the security given consists in immovables. Rev. Civ. Code La. 1870, tit. 20, art. 3135. In the antichresis the creditor acquires the right of reaping the fruits or other revenues of the immovables given to him in pledge, on condition of deducting annually their proceeds from the interest, if any be due to him, and afterwards from the principal of his debt. Rev. Civ. Code La. 1870, tit. 20, art. 3176; Livingston v. Story, 11 Pet. 351, 9 L. Ed. 746.

23 Scott v. Reed, 83 Minn. 203, 85 N. W. 1012; Champlain Const. Co. v. O'Brien (C. C.) 104 Fed. 930; Hawkins v. Hubbard, 2 S. D. 631, 51 N. W. 774; Stearns v. Marsh, 4 Denio (N. Y.) 227, 47 Am. Dec. 248; McArthur v. Howett, 72 Ill. 358, 360.

24 COGGS v. BERNARD, 2 Ld. Raym. (Eng.) 909, Dobie Cas. Bailments and Carriers, 1; Thompson v. Patrick, 4 Watts (Pa.) 414.

25 Ante, p. 62. Of course, the pledgee may lawfully use the pledged chattels on the express or implied consent of the pledgor. Lawrence v. Maxwell, 53 N. Y. 19; Damon v. Waldteufel, 99 Cal. 234, 33 Pac. 903.

26 Lathrop v. Adkisson, 87 Ga. 339, 13 S. E. 517; Sokup v. Letellier, 123 Mich. 640, 82 N. W. 523; Felton v. Brooks, 4 Cush. (Mass.) 203, 206; Merrifield v. Baker, 9 Allen (Mass.) 29; McCrea v. Yule, 68 N. J. Law, 465, 53 Atl. 210.

81

80

pledgee to render a due account of the milk received from cows,27 of the young of animals,28 of the profits from the labor of a slave," of the dividends from corporate stock, and of the interest received. from coupons 31 on a bond. It is, in general, the duty of the pledgee to make the pledged goods yield a profit, if this can reasonably be done. When there is such a duty, express or implied, the pledgee is liable for such profits as the pledged goods might have earned, but failed to do so, owing to his neglect."

In the case of corporate stocks, not only is the pledgee entitled to the dividends (to be accounted for just as other profits), but it is usually held that, if the stock stands on the company's books in his name, the pledgee may vote it.88 In many states, this right is specifically controlled by statute; the statutory trend being in favor of the pledgor.**

27 COGGS v. BERNARD, 2 Ld. Raym. 909, Dobie Cas. Bailments and Carriers, 1.

28 Jones, Collateral Securities, § 396.

29 Geron v. Geron, 15 Ala. 558, 50 Am. Dec. 143; Houton v. Holliday, 6 N. C. 111, 5 Am. Dec. 522; Woodard v. Fitzpatrick, 9 Dana (Ky.) 117, 120. 80 BOYD v. CONSHOHOCKEN WORSTED MILLS, 149 Pa. 363, 24 Atl. 287, Dobie Cas. Bailments and Carriers, 124; McCrea v. Yule, 68 N. J. Law 465, 53 Atl. 210; Hunsaker v. Sturgis, 29 Cal. 142; Hagar v. Union Nat. Bank, 63 Me. 509; Herrman v. Maxwell, 47 N. Y. Super. Ct. 347; Merchants' Nat. Bank v. Richards, 6 Mo. App. 454, 464; Gaty v. Holliday, 8 Mo. App. 118; Kellogg v. Stockwell, 75 Ill. 68, 71; Fairbanks v. Merchants' Nat. Bank of Chicago, 30 Ill. App. 28.

31 Androscoggin R. Co. v. Auburn Bank, 48 Me. 335.

32 Where corporate bonds were pledged to secure a debt, it was the duty of the pledgee, in the event that there was either waste or misappropriation of the properties covered by the deed of trust securing the bonds, to use reasonable diligence to secure the fruits thereof and to preserve and care for their payment. State Nat. Bank v. Syndicate Co. of Eureka Springs, Ark. (C. C.) 178 Fed. 359. But when money is deposited as a pledge, while the pledgee holds it as such, he is not chargeable with interest to be paid by himself. Story, Bailm. § 339. Ordinarily, however, if the pledgee does let the money out at interest, he must account therefor. Gilson v. Martin, 49 Vt. 474; Hunsaker v. Sturgis, 29 Cal. 142; Merrifield v. Baker, 9 Allen (Mass.) 29.

33 Commonwealth v. Dalzell, 152 Pa. 217, 25 Atl. 535, 34 Am. St. Rep. 640; In re Argus Printing Co., 1 N. D. 434, 48 N. W. 347, 12 L. R. A. 781, 26 Am. St. Rep. 639; Ex parte Willcocks, 7 Cow. (N. Y.) 402, 17 Am. Dec. 525; In re Barker, 6 Wend. (N. Y.) 509; Becher v. Wells Flouring Mill Co. (C. C.) 1 Fed. 276. Some cases hold, even though the stock stands on the corporate books in the pledgee's name, that the pledgor has the right to vote it. State v. Smith, 15 Or. 98, 14 Pac. 814, 15 Pac. 137, 386; People ex rel, Allen v. Hill, 16 Cal. 113. See, also, McDaniels v. Flower Brook Mfg. Co., 22 Vt. 274. See, on this subject, Cook on Corp. § 612; 3 Thomp. Comm. on Corp. § 3872. 84 For examples of statutes favorable to the pledgor's right to vote stock see Civ. Code Ariz. 1901, par. 782; Laws Md. 1908, c. 240, § 22; 1 Brightly's Dig. Pa. 1894, p. 416, § 62; Comp. St. Wyo. 1910, § 3994.