not the identical bonds stolen was immaterial; for it was the handing over by Warden to the defendants of negotiable instruments in performance of his civil obligation which placed the defendants in the position of holders for value; and, as at that time they had no notice of the title of any third party, the defendant Bank became bonâ fide holders for value of these bonds, without notice of the plaintiff's title, or of any fraud.

I propose next to say a few words as to the meaning of the terms:-pledge, lien, mortgage (legal and equitable), hypothecation, and floating charge.

Pledge.

A pledge is when goods, chattels, money, or negotiable instruments are delivered to another as a pawn, to be a security to the pledgee for the payment of a debt or performance of an obligation by the pledgor.1

It is a species of what the law calls bailment, by the pledgor or bailor to the bailee, and it is called indifferently a pledge or pawn. Delivery of the thing pledged is an essential element. Such delivery may be actual or constructive. The delivery of a bill of lading of goods at sea is a constructive delivery of the goods. Without delivery the pledgee obtains no right of property in the thing; and if he parts with the thing delivered he generally loses the benefit of his security. In this respect it differs from a mortgage; for in a mortgage transfer of possession is not essential.2

The pledgee is said to have a special property only in the goods pledged to detain them for his security, the general property continuing in the pledgor. The pledgee is entitled to hold the goods until payment of the debt or performance of the obligation, and, upon failure of payment or performance at the proper time, to sell them; but until he does so, the pledgor may redeem them by payment or performance.2

Lien.

A lien is, generally speaking, a right to retain property until a debt due to the person retaining it has been satisfied. In the case of a simple lien there is no power of sale or disposition of the goods, whereas in the case ofa pledge, as we have seen, the pledgee may sell upon the default of the pledgor.3

Bankers, by the law merchant, have a general lien on all securities deposited with them as bankers by a customer, unless there be an express contract or circumstances from which a contract will be inferred inconsistent with lien. This general lien of bankers is a usage of trade which is part of the law merchant; and therefore it does not require proof in any Court of justice, for Courts are bound to take judicial notice of it.2

It is a lien which is implied by the common law from the relation of banker and customer, without any agreement between them, either express or inferred from their conduct or previous dealings.

It is a general lien, because it can be claimed not merely in respect of a particular debt or transaction, but in respect of the customer's general balance of account.3

Mortgage, Legal and Equitable.

A mortgage is a security created by a conveyance by one person (the mortgagor) to another (the mortgagee) of some property or interest in property, charging it with the payment of money already due or to be advanced; and is subject to redemption by the mortgagor, and enforceable, in default of payment, by foreclosure or sale in lieu thereof.4

A mortgage may be effected by means of a legal or an equitable assurance.5

By a legal mortgage, the legal estate or interest in the property is conveyed to the mortgagee, subject to the mortgagor's right to redeem, at law on the day specified in the instrument of mortgage for repayment of the principal sum, and in equity at any time until foreclosure or sale.

An equitable mortgage does not pass the legal estate or interest to the creditor, but operates by way of equitable assignment.7 Thus, if the mortgagor has himself only an equitable interest in the property, he cannot give to another a legal, but only an equitable, title. Again, an equitable mortgage may be given by (a) an agreement in writing, although informal, to execute a mortgage -on the principle that equity treats that as done which ought to

Brandao v. Barnett (1846), 12 Clark and Finnelly's Rep. 787, at 806, H.L. ; approved by the Privy Council in London Chartered Bank of Australia v. White (1879), 4 А.С. 413.

have been done; and (b) by a deposit of documents of title-e.g. share certificates by way of security, either with or without a memorandum of deposit.1

Hypothecation.

Hypothecation, which is properly a shipping term, is now frequently used as a general term equivalent to a charge. In this use of the word, to hypothecate property is to charge it with, i.e., make it security for, the payment of a sum of money or the performance of an obligation, giving the person in whose favour it exists neither the right to the possession of the property, nor, as a general rule, the right to sell it, but merely the right of realization by judicial process in case of non-payment or non-performance at the proper time.2

An hypothecation differs from a mortgage in that there is no actual conveyance or agreement for conveyance of the property appropriated for payment of the debt or loan; and from a pledge in that there is no actual or constructive delivery of the property.

Floating Charge.

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A floating charge is an equitable charge on the assets for the time being of a going concern; it attaches to the subject charged in the varying condition in which it happens to be from time to time. It is of the essence of such a charge that it remains dormant until the undertaking charged ceases to be a going concern, or until the person in whose favour the charge is created intervenes. His right to intervene may, of course, be suspended by agreement. But if there is no agreement for suspension, he may exercise his right whenever he pleases after default."4 Pending any such intervention, the Company has a free hand to deal with, and dispose of, the property charged in the ordinary course of the Company's business. It may do so by way of sale, lease, exchange, specific mortgage, or otherwise, as it deems most expedient.5

Where a Company issues debentures charging "its undertaking" with the payment of them, that is a floating charge or See ibid, 42.

2 Sweet's Law Dictionary, "Hypothecation." In Re Young, Hamilton and Co. Ex parte Carter (1905), 2 K.B. 381; aff. 772, C.A., the letter of lien or hypothecation seems to have involved a right to sell on default, since the Courts decided that the Bank had a lien or charge, or was entitled to the goods.

3 Robbins' Law of Mortgages, I. 7.

* Per Lord Macnaghten in Governments Stock Co. v. Manila Ry. Co. (1897) A.C., at 86.

* Palmer's Company Law, 7th ed. 303.

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security, the word undertaking meaning all the property present and future of the Company as a going concern. The Company in such a case may sell its old and buy new stock-intrade; it may give specific mortgages; it may receive book debts and create new ones, in such a way that, when the time comes for enforcing the security, the property then subject to it may be quite different from what it was when the security was given. As soon as proceedings are taken which necessitate an enforcement of the security (e.g., if the company goes into liquidation), the security becomes fixed, and no further change is possible. The debenture holders will then get the benefit of their security, for though the original property of the Company may have disappeared, they will be entitled to be paid out of its existing property in priority to the general creditors.2

As the very object of a floating charge is to enable the Company to carry on its business, and to do all acts necessary for the conduct of that business, and it may often become necessary in the ordinary course of the transactions of a mercantile concern to borrow money for a limited time to a moderate extent, the floating charge does not prevent the Company from making specific charges on its property for the purpose of securing an advance; and therefore, although debentures have been issued purporting to be a first charge on the undertaking, the Company can make a specific charge which will rank in priority to the debentures.

RECENT PERIODICALS IN THE LIBRARY.

The Bankers' Magazine (London) for December contains two articles of special interest. Mr. W. R. Lawson writes on "British and American Banking." He considers that the British and the American banking systems are the antipodes of each other. In his opinion "American banking devotes its "whole energy and a very large amount of perverse ingenuity "to the manufacture of credit, while British banking has to be constantly on the watch to prevent such manufactured credit being pushed to a dangerous excess. One is the watch-dog, and "the other is the fox always trying to raid the chicken yard." Mr. Lawson gives a comparison of the British and American banking systems from the point of view of numbers, capital, reserves and deposits:

He considers that the United States banks are much too numerous for safe and economical working. Sir R. H. Inglis Palgrave recently delivered an address before the members of the Institute of Bankers in Ireland on "The Influence of the Taxation of

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Capital upon the Welfare of a Country," and a report thereof is contained in the above magazine. He points out that by the proposals contained in the Budget, both revenue and capital are to be taxed, and asks "Can this be good policy? The Educational Section of the magazine contains answers to the questions set on Economics (preliminary) at the Institute's examination last April.

The Quarterly Journal of Economics for November is a particularly interesting number, in that it contains an illuminating article by Professor Taussig, of Harvard University, on "The "Tariff Debate of 1909 and the New Tariff Act." He criticises the Republican doctrine that, in all protective legislation, the true principle of protection is best maintained by the imposition