London, for account of Paul M. Swain, Esq., Boston, Mass. by bills at three (3) months' sight for the cost of any shipment, of goods via San Francisco and thence overland, or at three (3) to six (6) months' sight for the cost of goods by any other route, direct, or under through bills of lading to Boston or New York, to the extent of three thousand pounds sterling (say £3,000 stg.), and we hereby agree with the drawers, indorsers, and bona fide holders, respectively, of the bills drawn by virtue of this credit, that the same shall be duly honored by Messrs. Baring Bros. & Co., upon presentation at their banking-house in London, if drawn and negotiated within six (6) months from this date, and if accompanied by bills of lading for such goods filled up to the order of Messrs. Baring Bros. & Co., and by invoice of the same to their order for the account of whom it may concern.

"A duplicate of such invoices, with consular certificate attached, together with one bill of lading, to be sent direct to us either by vessel or mail.

*

In his acceptance of the letters Swain agrees that "all property which shall be purchased by means of the within credit, * together with the bills of lading for the same, are hereby pledged and hypothecated to Messrs. Baring Bros. & Co. as collateral security" for the payment of the bills drawn against the credit, "and shall be held subject to their order on demand, with authority to take possession and dispose of the same at discretion for their security or reimbursement."

After the arrival of the goods at New York, Swain called at the office of Kidder, Peabody & Co., who had possession of the shipping papers, and from whom Swain had before obtained the shipping papers of other goods, and asked for the papers. When asked what he was going to do with them, he said he wanted to enter them at the custom-house and warehouse them for account of Baring Bros. & Co. On getting the papers, he gave them a receipt, stating that "such invoice and bill of lading are delivered to me for the purpose of enabling me to enter the goods referred to in them at the custom-house, and I hereby agree to place the goods in storage for Messrs. Baring Bros. & Co."

Swain entered the goods at the custom-house in the name of his broker, who warehoused them and gave the warehouse receipt to Swain, who then pledged it, with other receipts, etc., to the plaintiff for a loan. Kidder, Peabody & Co. and Baring Bros. & Co. took possession of the property and stored it with Hobby, Sons & Co., and the plaintiff thereupon brought this action.

E. R. Robinson, for appellant.

Chas. B. Alexander, for respondents.

FINCH, J.-The entire argument of the appellant turns upon the proposition that Swain was the general owner of the shellac and the Barings merely pledgees. Upon that assumption the argument runs smoothly to its conclusion, and encounters no serious obstacle. But the grave trouble is in the assumption itself and the authorities which clash with it. The general subject was very thoroughly discussed in Farmers' & Mechanics' Nat. Bank v. Logan, 74 N. Y. 573, and whether the doctrine there declared covers the facts now presented, and whether they have or do not have vital distinguishing features, are the real subjects for our consideration. The doctrine stated was, in substance, that where a commercial correspondent, however set in motion by a principal for whom he acts, advances his own money or credit for the purchase of property, and takes the bill of lading in his own name, looking to such property as the reliable and safe means of reimbursement up to the moment when the original principal shall pay the purchase price, he becomes the owner of the property instead of its pledgee, and his relation to the original mover in the transaction is that of an owner under a contract to sell and deliver when the purchase price is paid. The authorities which sustain, and the reasons which justify, the doctrine need not be repeated, and it is required only that we determine whether it applies to and settles the case in hand.

There are some facts in the cited case which are not in this, and there are some in this which were not present in that, and to these and their effect attention must be directed. In that case the purchase was made by the brokers or agents of him who, as the ultimate vendee, may be termed conveniently, if somewhat

inaccurately, the principal. Such brokers were buyers and sellers on commission, and, it is said, were the commercial correspondents to whom the rule refers, and who needed and received its protection, while here the only commercial correspondents were Bancroft & Co., at Calcutta, who are not before the court and whose rights are not in question. But Bancroft & Co. were the sellers, and not the buyers, of the shellac, in their relation to the parties concerned. They passed their title either to the Barings or Swain, and while they were commercial correspondents in some sense, they were not such within the rule under discussion, for they advanced nothing on the credit of the property, and parted with title instead of taking it. The Barings, although bankers, were equally commercial correspondents, and they took title through the bill of lading and bought the property on their own credit. But if Bancroft & Co. be treated as the commercial correspondents, the case is not changed. Like Sears & Daw in the Logan Case, they bought the shellac on their own credit, or with their own money, and got reimbursement by drawing upon the Barings, transferring title to them by the invoice and bill of lading to their order, as Sears & Daw did to the discounting banker in the Logan Case. The difference in the manner of making the advances is not material. In each case the bankers become owners or pledgees.

In the Logan Case the purchasing correspondent took from the vendor a bill of sale as well as a bill of lading to his own order, but the Barings took only the bill of lading if the invoice to their order was not tantamount to a bill of sale. We do not deem that difference, if it was one, at all material. The title passed as effectually by the latter paper alone as if it had been preceded by the former, for we have uniformly held that the bill of lading is the evidence of title, and is sufficient to vest the ownership and absolute control in him to whose order it is drawn. The purchase in the case cited seems to have preceded the shipment so as to make natural and convenient a bill of sale covering the interim. If it had been intended in this case to vest the general ownership in Swain and make him the purchaser, a bill of sale to him, or an invoice to his order, might naturally have been made, but as to the Barings the purchase and the shipment were practically coincident.

In the cited case, again, the bill of lading, as attached to and sent forward with the discounted draft, had stamped upon it a statement addressed to the original principal that the wheat and the insurance of it were pledged to the plaintiff as security for the payment of the draft, and that the wheat was put into his custody in trust for that purpose, not to be diverted to any other use until the draft was paid, and that, upon his accepting and paying the draft, the claim of the plaintiff would cease. This appears to have been an effort to put in words upon the bill of lading the legal meaning of the transaction. It was not necessary to the certainty or scope of that legal meaning, and amounted only to a precaution. A similar distinction was sought to be drawn in the cited case itself between it and Bank of Toledo v. Shaw, 61 N. Y. 283, and 69 N. Y. 624. In that the bill of lading was, when forwarded, accompanied by a letter explicitly directing the property to be delivered only upon payment of the specified purchase-money. The comment of the court in the Logan Case was: "Such agreement was but putting into terms the legal effect of the transaction in the case before us; for we have shown by authority that the taking of the bill of lading in the name of the plaintiff for its account and the discount of the draft by it on the strength thereof did transfer to it the title to the wheat." Indeed, it seems to me that the title of the then plaintiff was rather weakened than strengthened by the matter stamped upon the bill of lading, for it speaks of the transaction as a pledge, when in truth it was an ownership, and it appears to be for that reason that the court, in upholding the banker's title, founded on the bill of lading, speak of the latter "even with the modification thereof made by the matter stamped upon it," and "even as modified." So that the absence of the special indorsement in the case at bar at least does not weaken the bearing of the Logan Case upon it.

But a much more important suggestion made by the appellant is founded upon the terms of the written agreement between Swain and Kidder, Peabody & Co. as agents of the Barings, which was intended to govern and control the entire transaction. They issued a letter of credit addressed to Bancroft & Co., and authorizing them, for account of Swain, to value on the Barings by bills for £3,000, and promised to accept and pay those bills

VOL. XXXVI.—15

"if accompanied by bills of lading for such gooas filled up to the order of Messrs. Baring Bros. & Co., and by invoice of the same to their order for account of whom it may concern." Swain on his part agreed to provide funds in London to meet such bills as should be drawn at their maturity, and that "all property which shall be purchased by means of the within credit, together with the bills of lading for the same, are hereby pledged and hypothecated to Messrs. Baring Bros. & Co. as collateral security for the payment as above promised, and shall be held subject to their order on demand, with authority to take possession and dispose of the same at discretion for their security and reimbursement." The argument upon this provision rests upon the words "pledged and hypothecated" and "collateral security," and avers, as a consequence, that Swain was, within the contemplation of the parties, general owner of the shellac, and the Barings merely pledgees. It is observable that Swain did not so understand it, for in his testimony he said: "Kidder, Peabody & Co. were the owners of these goods till they arrived in Boston." It has already been mentioned that a similar expression was used by the plaintiff in the Logan Case in the matter stamped upon the bill of lading describing the wheat as "pledged" to the plaintiff, and as "security" for the payment of the draft; and so little did the use of the inapt words affect the plain and unequivocal substance of the transaction in the mind of the court, that the use of the word "pledged" was not even made the subject of remark. It is further quite evident that, from the moment of the shipment and the delivery of the bill of lading, the absolute jus disponendi was in Kidder, Peabody & Co. by the very terms of Swain's agreement. They were at liberty to "dispose" of the property "at discretion," and either for "security" or reimbursement. It is also to be noted that what is spoken of as "pledged" is not merely the goods or the property, but the bills of lading also. These documents carry the title as well as the right of possession, and the pledge or hypothecation is expressly applied to both. The meaning assuredly was that the title should pass. Very likely, as is suggested for the defendant, the transfer was rather in the nature of a mortgage in which the title passes than in that of a pledge in which the pledgeor is general owner. Here, then, we have a case where