isiana, providing in effect that if the owner of goods permits another to have possession or custody of negotiable warehouse receipts, running to the order of the latter or to bearer, it is a representation of title upon which bona fide negotiators for value are enof titled to rely, despite breaches. trust or violations of agreement on the part of the apparent owners. The case was one where the consignee, having pledged the bills of lading with a bank to secure advances, withdrew them on trust receipts, and then surrendered the bills of lading to the railway company, thus obtaining possession of the goods, which it stored in a warehouse, receiving in turn negotiable warehouse receipts. And the court said that, after the bank had allowed the consignee to be clothed with apparent ownership, through possession of the warehouse receipts, it could not be heard to question the title of a bona fide purchaser for value, to whom they had been negotiated.

The negotiable warehouse receipts were subsequently pledged, in Commercial Nat. Bank v. Canal-Louisiana Bank & T. Co. (U. S.) supra, to another bank, under trust receipts similar to those given the first bank, and it was contended that the equities of the two banks were equal, and that those of the first bank should, therefore, prevail. But this contention was overruled, as the first bank had, by clothing the consignee with the indicia of ownership, enabled him to contract with a bona fide purchaser for value, and the second bank had not lost its rights by any subsequent negotiation of the warehouse receipts.

See INTERNATIONAL TRUST Co. v. WEBSTER NAT. BANK (reported herewith), ante, 267, as to rights under the Massachusetts statute of one advancing money to the importer.

And in Roland M. Baker Co. v. Brown (1913) 214 Mass. 196, 100 N. E. 1025, the decision is based on the Uniform Bills of Lading Act of Massachusetts, under which whom a negotiable bill, as therein deanyone to fined, has been duly negotiated, acquires such title to the goods as the

person negotiating it to him had, or had ability to convey to a purchaser in good faith for value, and also such title as the consignee and consignor had, or had power to convey to a purchaser in good faith for value, the validity of the negotiation not being impaired by the fact that it was a breach of duty on the part of the person making it, and the court said that its previous decisions, by which bankers advancing money for importations were protected against the consequences of their agent's breach of duty, had been abrogated and nullified by the statute. So that it was held that a purchaser from the importer, for value and in good faith, acquired title as against the bank, although the negotiation was in breach of the importer's obligation under the trust receipts. The court said further that by the transaction in question, under the common law as declared by the decisions in that state, the title to the property remained in the bankers, who had advanced the money for the importation and taken the bills of lading in their own name; that the importer had no right to dispose of the goods in any other way than by sale in accordance with the provisions of the trust receipt (which was given at the time the importer received the indorsed bill of lading, and stated that the importer acknowledged the receipt of the goods in trust to deliver the same to a specified person, who it was stated had purchased the goods, and to obtain from the latter the proceeds and deliver them immediately to the bankers); that no one else could by purchase from the importer, or by any dealings with it, acquire a title to the property which would be good against the bankers; that the bill of lading merely represented the goods themselves, and the importer had no greater right, and could not pass to any purchaser other than the one specified in the trust receipt any greater right, than if its possession with this limited authority had been of the goods themselves, instead of the bill of lading which was their rep resentative. But this result, as indi

to him an invoice and bill of sale of the goods received under the storage receipt, and subsequently delivered the goods to him, this action by the importer being due to the fact that he had misappropriated checks which the third party had sent to meet notes arising out of other transactions, which notes were not due at the time the importer attempted to make a transfer of the goods in question, so that at that time the importer had merely a prospective indebtedness to the third party which he endeavored to discharge, in part, by the consignment of goods belonging to the bank. The court said that if the goods had been those of the importer the payment might have stood as against other creditors or a general assignee, but that this was not a sale under the authority of the storage receipt, that the purchaser did not part with any present value on the faith of the goods, and that the consignment was manifestly in payment of a balance that would be due on a general account.

And in Moors v. Kidder (1887) 106 N. Y. 32, 12 N. E. 818, in which it was held that the bankers who advanced funds for an importation were owners and not pledgees of the goods (see this case supra, II. b, under heading, "Pledgeor and pledgee"), it was held that their rights should prevail over the claims of a pledgee of the importer. The bill of lading was delivered to the importer by the bankers, who had taken it in their own name and indorsed it in blank to enable the importer to obtain entry of the goods at the customhouse, and to warehouse them for account of the bankers, the receipt of the importer being substantially a trust receipt, although not expressly so designated; but the importer, instead of entering the goods in the name of the bankers, entered them in the name of his own broker, and then pledged them to a third party as security for a loan, the pledgee trusting to the representations of the importer and the warehouse receipt. The pledgee was not shown the bill of lading with indorsement thereon, his action not being in any manner affected thereby, so that he was not within the

49 A.L.R.-20.

provision of the Factors' Act making the transfer by an agent intrusted with the evidence of title, which transfer has been made upon the faith thereof, valid under some circumstances, even against the real owner. It was accordingly held that the pledgee could not maintain an action against the bankers and the warehouseman to recover possession of the goods.

Also, in Munroe v. Bonanno (1893) 31 Abb. N. C. 1, 28 N. Y. Supp. 375, it was held that bankers, by advancing money for the purchase price of goods and taking bills of lading therefor in their own name, acquired a lien upon the goods, which subsequently came into the possession of the purchaser, who, on surrender of the bills of lading to him, executed an agreement containing substantially the provisions of the ordinary trust receipt, which lien was superior to the rights of a third person, thereafter acquired, for advances to the purchaser on the faith of the latter's representations that he was the owner of the property and would repay such third person out of the proceeds realized on the sale of the goods. It was indicated that the third party under these circumstances had no lien. But at any rate the court took the position that the bankers had a lien superior to that of anyone whose interest in the property was subsequently acquired,

and should first be reimbursed out of the proceeds of the sale of the property.

And in Farmers' & M. Nat. Bank v. Logan (1878) 74 N. Y. 568, in which the court overruled the contention that the bank was only a pledgee which had lost its special property, as against a bona fide purchaser from the principal, by committing the goods to the possession of the latter, as the general owner and pledgeor, the transaction was somewhat similar to a trust receipt agreement, though not expressly so designated. (See statement of the case under III. supra.) It was held that the bank could recover for conversion of the property by parties who purchased it from the principal in New York (who occupied somewhat the position of the re

where the importer, who had given a trust receipt in exchange for the shipping documents, was permitted by the warehouseman, relying on the credit of the importer and his possession of the indicia of title, to remove a part of the goods without payment of duty. The court, it will be observed, avoids discussion of the question of the right of the broker to a lien. No other case seems to have passed on this particular question, but the question of the right to commissions and charges in trust receipt transactions has arisen in several other cases.

Thus, it was held in Moors v. Wyman (1888) 146 Mass. 60, 15 N. E. 104, that the party making the advances for the purchase price of goods, who on the purchaser's failure took possession of the goods and sold them, was entitled to payment out of the proceeds of a reasonable compensation as commission for his services in making the sale, where bills of lading were taken in his name and indorsed to the purchasers under a contract by which they received the property as his agent, and agreed to redeliver the manufactured product to him on demand, the party making the advances not to be chargeable with any expense thereon and having the right to take possession and dispose of the goods at his discretion for his security or reimbursement. It was held, however, that there was no right to a charge for commission for sales made by a voluntary assignee for creditors of the purchaser, as he stood in no better position than his assignor, and a debtor selling his own property to pay his debts could not charge his creditors for doing so. in this instance consisted of hides, The property and it was held, also, that the assignee was not entitled to allowance of a claim for tanning the hides, which were on hand at the time of filing the bill, and which were mostly in the process of tanning and could not be removed without serious injury.

In Barry v. Boninger (1877) 46 Md. 59, the question was as to the right of brokers, who had sold the cargo on its arrival in this country, to a lien on the goods or the proceeds for the

amount of brokerage due them by the importer for selling other cargoes imported, as against the claim of a firm which had made advancements to finance the importation and taken the bill of lading in its own name in accordance with the agreement between it and the importer. On arrival of the goods in this country, the importer gave a receipt to the firm making the advances, for the goods specified in the bill of lading, in which receipt it was stated that the importer agreed to hold the goods in storage, as the property of the firm, with liberty to sell the same and account to the firm for the proceeds, until the amount of the advances was provided for. The cargo was sold to a third party through the brokers, but, before it was all delivered, the importer the importer failed. The brokers were then authorized to deliver the balance of the cargo and to draw for the proceeds. On receipt of the money from the purchasers, they claimed the right to retain out of it the amount due them by the importer for brokerage in selling other cargoes imported, and not belonging to the firm making the advances in this particular case. It was held that the only claim which the brokers could legally assert against the cargo or its proceeds was for the amount of brokerage due them for effecting a sale of the particular cargo.

The question of the right of the assignee for creditors of the importer to the payment of a commission as assignee, out of the proceeds of the goods, and for an allowance for counsel fees in defense of the action brought by the bank which financed the importation, arose in English Bank v. Barr (1888) 31 Abb. N. C. (N. Y.) 7, and Dennistown v. Barr (1893) 31 Abb. N. C. 21, 28 N. Y. Supp. 255, in which opposite conclusions. were reached on the question. In both of these cases it appeared that the transaction was in the usual form, the bank indorsing the bills of lading to the importer, and receiving the common form of trust receipt; the importer subsequently made an assignment for creditors, but in the meantime had effected a sale of the goods, and the