(— Mass. —, 154 N. E. 330.) the cause of the loss and, hence, that loss is placed not upon the third party who is wholly innocent, but upon the owner, because by appointing and trusting a dishonest agent he brought about the loss." See also Foreign Trade Bkg. Corp. v. Gerseta Corp. 237 N. Y. 265, 31 A.L.R. 932, 142 N. E. 607; Glass v. Continental Guaranty Corp. 81 Fla. 687, 25 A.L.R. 312, 88 So. 876. None of the cases heretofore decided by this court, including Moors v. Wyman, 146 Mass. 60, 15 N. E. 104; People's Nat. Bank v. Mulholland, 224 Mass. 448, 113 N. E. 365, s. c. 228 Mass. 152, 117 N. E. 46; Brown v. Green & H. Leather Co. 244 Mass. 168, 138 N. E. 714, and T. D. Downing Co. v. Shawmut Corp. 245 Mass. 106, 27 A.L.R. 1522, 139 N. E. 525, was an action for conversion brought by a holder of a trust receipt against an innocent pledgee for value where the trust instrument gave to one in possession general authority to sell. T. D. Downing Co. v. Shawmut Corp. supra, cited and relied on by the plaintiff, is not at variance with what is here decided. The Factors' Act was not applicable to that case, and no reference was made to it either on the briefs or in the opinion; nor were the rights of a pledgee involved. It was an action to recover certain duties paid by a custom house broker and expenses and commissions due it. The defendant was a banking corporation which financed the importation of goods at the request of the importer. The trust receipt provided that the importer should hold "said goods in trust" for certain purposes; the goods were in a bonded warehouse and there held subject to the payment of importation duties. plaintiff contended that the importer was the agent of the defendant as undisclosed principal, and as such the latter was liable. The defendant had no interest in getting the goods out of the warehouse, and the payment of duties was no part of the contract between the defendant and the importer. It was held 49 A.L.R.-18. The that the importer was in no sense -lien-priority release of property on-subseone in posses quent loan to sion. The defendant's seventh and eighth requests are as follows: "7. The plaintiff having allowed Graves to take and retain possession of the wool and to hold himself out as the owner thereof, it cannot in equity and good conscience claim that the said Graves had no right to pledge the yarn to the defendant to secure this loan. "8. Even if said plaintiff ever acquired title to said yarn, nevertheless, it having clothed said Graves with the indicia of ownership, the defendant, being in the position of a bona fide purchaser for value, cannot be held to have converted said yarn as alleged by the plaintiff." These requests were applicable in view of the entire evidence, although no specific reference was made to Gen. Laws, chap. 104, § 3 (Parrot v. Mexican C. R. Co. 207 Mass. 184, 190, 34 L.R.A. (N.S.) 261, 93 N. E. 590), and the exceptions of the defendant to the refusal of the court to give them must be sustained. In view of the conclusion reached it is not necessary to determine whether the action can be maintained for the reason that after it was brought the plaintiff transferred its assets to the International Bank of Boston which was then merged and consolidated with the First National Bank of Boston. Gen. Laws, chap. 172, § 44, as amended by Stat. 1922, chap. 292. See Re Commonwealth-Atlantic Nat. Bank, 249 Mass. 440, 443, 444, 144 N. E. 443. As the defendant's seventh and eighth requests should have been NEW ORLEANS, TEXAS, & MEXICO RAILWAY COMPANY, Appt. INTERNATIONAL TRADING & RICE COMPANY, Warrantor, Appt. Trust receipts, § 1 (161 La. 1051, 109 So. 834.) surrender of bill of lading on - effect. The surrender on a trust receipt by a bank of a bill of lading taken as collateral for a loan to the purchaser of the property represented by the bill of lading does not destroy its lien in favor of the vendor of the property so represented, who attempts to stop the shipment in transitu because of insolvency of the buyer, where the bill of lading is at all times in possession of the buyer or the consignee, and the statute provides that where an order bill of lading has been issued, no seller's lien or right of stoppage in transitu shall defeat the rights of any purchaser for value in good faith to whom such bill has been negotiated, nor shall the carrier be justified in delivering the goods to an unpaid seller unless the bill is first surrendered for cancelation. [See annotation on this question beginning on page 282.] APPEAL by defendant and the warrantor from a judgment of the Civil District Court for the Parish of Orleans (Byrnes, J.) in favor of plaintiff in an action brought to recover the value of a shipment of sugar and for statutory damages. Affirmed. The facts are stated in the opinion Messrs. George Janvier, Monroe & Lemann, and Walter J. Suthon, Jr., for appellants: Plaintiff can have no pledge and resultant privilege upon the bill of lading, quoad third persons, merely because it may have been agreed between Perkins and plaintiff that the bill of lading was to be deemed pledged to the latter as security for the former's debt, when the parties have clearly failed to comply with the specific requirement of the Code that, in order for the pledge to create a privilege quoad third persons, the of the court. thing pledged must be put and remain in possession of the pledgee, or of a third person agreed upon by the parties. Casey v. Cavaroc, 96 U. S. 467, 24 L. ed. 779; Mechanics' Bank v. Van Zant, 144 La. 685, 81 So. 251; Re Pleasant Hill Lumber Co. 126 La. 743, 52 So. 1010; Lanaux's Succession, 46 La. Ann. 1036, 25 L.R.A. 577, 15 So. 708; Citizens' Bank v. Janin, 46 La. Ann. 995, 15 So. 471; Giddes v. Bennett, 6 La. Ann. 516; Robinson v. Shelton, 2 Rob. (La.) 277; Citizens' Bank v. Maureau, 37 La. Ann. 857; Henry (161 La. 1051, Lochte Co. v. Lefebvre, 124 La. 244, 50 So. 26; Lee v. His Creditors, 2 La. Ann. 599; Fisk v. Moores, 11 Rob. (La.) 279. The bank cannot qualify as a taker of the bill of lading for value and in good faith, upon the basis of its repossession thereof on August 21, 1923. Louisiana State Bank v. Orleans Nav. Co. 3 La. Ann. 294; Hays v. Lapeyre, 48 La. Ann. 749, 35 L.R.A. 647, 19 So. 821; Pere Marquette R. Co. v. J. F. French & Co. 254 U. S. 538, 65 L. ed. 391, 41 Sup. Ct. Rep. 195. Messrs. Dart & Dart, for appellee: A bill of lading, like any other negotiable credit, may be pledged by indorsement and delivery to secure any lawful obligation. Scheuermann v. Monarch Fruit Co. 123 La. 55, 48 So. 647; Thompson v. Hibernia Bank & T. Co. 148 La. 57, 86 So. 652. 109 So. 834.) bill of lading, indorsed in blank by Bishop C. Perkins Company per Bishop C. Perkins, to the bank as collateral security for the loan. Immediately afterwards the bank returned the bill of lading to Bishop C. Perkins, taking a trust receipt for the bill of lading, in order that he might handle the shipment, either by selling the sugar and accounting to the bank for the price, or by storing the sugar in a warehouse and delivering the warehouse receipt to the bank. On the same day Perkins wrote to the Central Warehouse & Forwarding Company, at Houston, that the bill of lading would be sent direct to the Central Warehouse & Forwarding Company, and he instructed the company to store the sugar in the company's O'Niell, Ch. J., delivered the opin- warehouse and issue a negotiable ion of the court: warehouse receipt for the same and The question in this case is whether a pledgee of a negotiable bill of lading, pledged as collateral security for a loan, annuls the pledge and loses his lien on the goods if he returns the bill of lading to the pledgor, temporarily, on a trust receipt. The facts of the case are not disputed. The International Trading & Rice Corporation sold to Bishop C. Perkins Company, through a broker in New Orleans a carload of sugar, being 600 pockets of 100 pounds each, at $7.90 per 100 pounds, less 2 per cent ten days' discount. The American Sugar Refining Company shipped the sugar, on the order and for account of the International Corporation, from Three Oaks (near New Orleans), Louisiana, to Houston, Texas, and issued and delivered to Bishop C. Perkins, for Bishop C. Perkins Company a negotiable bill of lading for the shipment, "consigned to order of Bishop C. Perkins Company, HousWarehouse & Forwarding Co. at Notify Central Houston, Tex." On the same day Bishop C. Perkins, for his company, borrowed from the Canal-Commer- bill of lading to the bank and its recial Trust & Savings Bank, in New turn to Perkins on the trust receipt, Orleans, $4,700, on a promissory it developed that Bishop C. Perkins note, and pledged and delivered the Company was insolvent; and the ton, Tex. that was an honest mistake on Perkins' part, because, on the same day that he mailed the bill of lading to the Central Warehouse & Forward ing Company, he wired the company to send the warehouse receipt for the sugar to him instead of placing it in the bank at Houston. Four days after the pledge of the manager of the International Trading & Rice Company called upon Perkins, in New Orleans, and demanded that he pay for the sugar or surrender the bill of lading. As Perkins could neither pay the invoice nor produce the bill of lading, the International Trading & Rice Company, as seller of the sugar, notified the railroad company to stop the shipment in transit because of the insolvency of Bishop C. Perkins Company and because of the right of the shipper to rescind the sale for nonpayment of the price. On the next day the shipment arrived in Houston, and on the same day the Central Warehouse & Forwarding Company received the bill of lading by registered mail from Perkins. The railway company refused to deliver the shipment to the Central Warehouse & Forwarding Company on the company's offer to surrender the bill of lading but delivered it to the International Trading & Rice Company on the company's furnishing an indemnity bond, with satisfactory surety, to protect the railway company "against any claim that might arise from the stoppage of said shipment in transit by the seller or for nondelivery in accordance with the original bill of lading issued on said shipment," etc. In the meantime, as soon as it had become known that Bishop C. Perkins Company was in financial difficulties, the Canal-Commercial Trust & Savings Bank had demanded of Perkins, in New Orleans, that he return the bill of lading or pay the note which it was pledged to secure. Perkins had been informed of the stoppage of the shipment in transit and had wired the Central Warehouse & Forwarding Company to return the bill of lading to him, and on the same day that the bank demanded its return he received it by mail from the Central Warehouse & Forwarding Company and immediately returned it to the bank and took back his trust receipt. That was on the seventh or eighth day after he had pledged the bill of lad ing to the bank and had retaken it on the trust receipt. The bill of lading was in Perkins' possession, or in the possession of the Central Warehouse & Forwarding Company for him, when the shipment was stopped in transit and delivered to the seller, the International Trading & Rice Company, on the indemnity bond. The Canal-Commercial Trust & Savings Bank, having regained possession of the bill of lading from Perkins, made demand on the railway company for the shipment or its value. The reply being that the shipment had been stopped in transit and delivered to the seller on the latter's indemnity bond, the bank brought this suit against the railway company for $4,800, as the value of the sugar, with legal interest from the day when the shipment arrived in Houston, and for $50 statutory damages allowed by the Act 29 of 1908. The railway company defended on the ground that the bill of lading was in the possession of the consignee, Bishop C. Perkins Company, and therefore not pledged to the bank, when the shipment was stopped in transit and delivered to the seller. The railway company called the International Trading & Rice Company in warranty to defend the suit, and the latter pleaded that the return of the bill of lading by the pledgee, bank, to the pledgor, Bishop C. Perkins Company, on the latter's trust receipt, had the effect of annulling the pledge, and that therefore the bank had no claim upon the sugar when it was stopped in transit and taken by the seller for nonpayment of the price and because of the insolvency of the consignee. The court gave the plaintiff a judgment for $4,625, as the value of the sugar, with interest as prayed for, and gave the railway company a judgment against the warrantor for the same amount. The railway company and the warrantor have appealed. As the shipment was an interstate shipment, the obligations of the carrier are determined by the federal statute relating to bills of lad (161 La. 1051, 109 So. 834.) ing in interstate and foreign com- a note or other instrument under merce, Act of August 29, 1916, chap. private signature, has been actually 415, 39 Stat. at L. 538, U. S. C. title put and remained in the possession 49, § 119. The uniform state statute of the creditor, or of a third person on the subject, Act 94 of 1912, p. agreed on by the parties." 101, is substantially and almost exactly like the federal statute. The most pertinent provision of the federal statute is § 39 (which is § 42 of the state statute), viz.: "That where an order bill has been issued for goods no seller's lien or right of stoppage in transitu shall defeat the rights of any purchaser for value in good faith to whom such bill has been negotiated, whether such negotiation be prior or subsequent to the notification to the carrier who issued such bill of the seller's claim to a lien or right of stoppage in transitu. Nor shall the carrier be carrier be obliged to deliver or justified in delivering the goods to an unpaid seller unless such bill is first surrendered for cancellation." (39 Stat. at L. 544.) The only difference in the language of § 42 of the state statute is that it begins thus, "Where a negotiable bill has been issued," whereas, the federal statute says: "That where an order bill has been issued," etc. It is conceded by the appellants that, according to the language quoted, if the pledge of the bill of lading to the bank by Bishop C. Perkins Company was not annulled by the temporary return of the bill by the bank to the pledgor on the trust receipt, the railway company is liable to the bank for having delivered the sugar to the unpaid seller without a surrender of the bill of lading for cancellation. There is nothing in either the federal or the state statute, of course, relating to the question whether the temporary return of the bill of lading by the pledgee to the pledgor had the effect of annulling the pledge. The appellants rely upon article 3162 of the Civil Code, viz.: "In no case does this privilege [meaning the privilege of the pledgee] subsist on the pledge, except when the thing pledged, if it be a corporeal movable or the evidence of the credit if it be See The article has been construed to mean that, if the thing pledged, whether it be a negotiable instrument or something else, "has been actually put" in the possession of the pledgee, a constructive possession thereafter will suffice to keep the pledge in force, and that a temporary return of the thing to the pledgor in trust or as the agent of the pledgee will not destroy the contract of pledge, even with regard to creditors of the pledgor, excepting, of course, those who deal with him on the strength of his having the thing in his possession, as in Geddes v. Bennett, 6 La. Ann. 516. Conger v. New Orleans, 32 La. Ann. 1250; Weems v. Delta Moss Co. 33 La. Ann. 976; Forstall v. Consolidated Asso. 34 La. Ann. 776; Jacquet v. His Creditors, 38 La. Ann. 863; Lanaux's Succession, 46 La. Ann. 1036, 25 L.R.A. 577, 15 So. 708; Britton & Koontz v. Harvey, 47 La. Ann. 259, 16 So. 747; Clark v. Iselin, 21 Wall. 360, 22 L. ed. 568. In Conger's Case, supra, Chief Justice Bermudez, for the the court, said: "Possession, though essential to the validity of the pledge, need not be always in the creditor. It is sufficient that the thing pledged be in the possession of one occupying ad hoc the position of a trustee. The debtor himself may, in some cases, be considered as such trustee and be given possession of the thing by him pledged, provided his tenure be precarious and clearly for account of the creditor. The Louisiana doctrine is in perfect accord with both the common, the Roman and French laws. Rev. Civ. Code 3162; Code Napoleon 2076; Clark v. Iselin, 21 Wall. 360, 22 L. ed. 568; Reeves v. Capper, 5 Bing. N. C. 136, 132 Eng. Reprint, 1057; Ten Eick v. Simpson, 1 Sandf. 248; Cook v. Darling, 2 Pick. 607; Jarvis v. Rogers, 15 Mass. 389; Skarratt v. Vaughan, 2 Taunt. 266, 127 Eng. Reprint, 1079; Story, |