(Mass., 154 N. E. $30.) which had been delivered to you by F. N. Graves Company and which had been held for our account. Will you kindly confirm your holdings for this account at the present time and if you have any charges against this wool, please advise. Yours very truly, Howard Norton, Asst. Sec." It does not appear what reply if any was made to this letter. After repeated demands by the defendant on Graves for payment of the $12,500 note, the defendant sold the yarn in different lots between April 1, 1922, and June 1, 1922, for about $12,500, which was its fair market value at the time it was sold. March 9, 1923, the plaintiff made a written demand on the defendant for the yarn and afterwards brought this action. On The case was tried before a judge of the superior court, sitting without a jury, who made certain findings and rulings and found for the plaintiff in the sum of $18,750 as damages, with interest thereon from April 14, 1920, the date of the conversion. All the material evidence is reported. The defendant contends that, under the trust receipt which authorized Graves to sell the goods for the plaintiff's account, the relation of principal and agent was established; that Graves was a "consignee" or "factor" within the meaning of those words in Gen. Laws, chap. 104, §§ 3 and 4, as he had possession of the merchandise with authority to sell it for the plaintiff and was therefore its agent for that purpose; and that the defendant had a prior lien on the goods as security for its loan to Graves. At common law a consignee, factor, or agent could not pledge the owner's property for his own debt. Michigan State Bank v. Gardner, 15 Gray, 362. The consignee of goods for sale does not have authority to pledge them for his own debt. The pledge is void as against the owner. Nowell v. Pratt, 5 Cush. 111. Although this court Although this court has not heretofore been called upon Factors-pledge by-validity against owner. to consider the rights of a holder of a trust receipt as against one who in good faith and without notice subsequently has loaned money to an importer or other person, yet the character of such a receipt and the rights of the holder thereof generally have been considered and defined. Gen. Laws, chap. 104, is entitled "Agents, Consignees, and Factors." It was originally enacted in substantially its present form by Stat. 1849, chap. 216. A pertinent section is as follows: "Sec. 3. If a person intrusted with merchandise has authority to sell or consign the same, a consignee to whom he consigns it shall have a lien thereon for any money or merchandise advanced or for any negotiable security given by him on the faith of such consignment, to or for the use of the person in whose name the consignment or delivery was made, and for any money, negotiable security or merchandise received for the use of such consignee by the person in whose name the consignment or delivery was made, if such consignee had, at the time of such advance or receipt, probable cause to believe that the person in whose name the merchandise was shipped, transmitted or delivered was the actual owner thereof or had a legal interest therein to the amount of said lien." The purpose of the act as stated in H. A. Prentice Co. v. Page, 164 Mass. 276, at page 281, 41 N. E. 279, 280, was "to protect parties dealing in good faith with factors or agents who have been intrusted with goods or merchandise for sale or consignment." At the outset the question arises whether the defendant was a "consignee" to whom Graves consigned the merchandise for money advanced. vanced. We construe the word "consignee" as meaning one to whom merchandise has been delivered. A "consignee" is defined as a person to whom goods or other property sent by a carrier are consigned or addressed; specifically, one who has the care or disposal of goods received on consignment; a factor. See Block v. Columbian Ins. Co. 42 N. Y. 393, 403; Ryttenberg v. Schefer (D. C.) 131 Fed. 313, 321. It cannot be doubted that under § 3 Graves was a person intrusted with the merchandise with authority to sell the same, and that he delivered it to the defendant who advanced money "on faith of such consignment." The record shows that at the time of the delivery the defendant made the loan to Graves in good faith without knowledge of the trust receipt or of the plaintiff's claim. It was said by Chief Justice Field in Cairns v. Page, 165 Mass. 552, at page 554, 43 N. E. 503, 504, that "the language of the Pub. Stat. chap. 71, § 3, is very broad, and includes any person intrusted with merchandise, and having authority to sell or consign the same." The language of this section, while somewhat different from the statute in its present form (Gen. Laws, chap. 104, § 3), was not changed in meaning or effect by the present statute. Main v. Plymouth County, 223 Mass. 66, 69, 111 N. E. 694. Graves was expressly authorized by the plaintiff to sell the wool or manufactured yarn for the plaintiff's account. The right to manufacture the wool and convert it into yarn did not render the statute inapplicable. The express and general authority given him to sell distinguishes the case from Thacher v. Moors, 134 Mass. 156; H. A. Prentice Co. v. Page, supra; Boston Supply Co. v. Rubin, 214 Mass. 217, 220, 101 N. E. 133, and other cases relied on by the plaintiff where there was no such authority to sell. The conclusion reached by us is in harmony with cases which have arisen under the Factors' Act in force in the state of New York. Laws of New York 1830, chap. 179. The New York statute is similar to ours although passed at an earlier date, both acts being modeled somewhat upon the English acts of 1823 and 1825 (4 Geo. IV. chap. 83, chap. 94), but different from them in essential particulars. The third section of the New York act provides in part that "every factor or other agent, intrusted with the possession of any bill of lading for the delivery of any such merchandise for the purpose of sale, or as a security for any advances to be made or obtained thereon, shall be deemed to be the true owner thereof, so far as to give validity to any contract made by such agent with any other person . . . for any money advanced, or negotiable instrument or other obligation in writing given by such other person upon the faith thereof." It was held in Blydenstein v. New York Secur. & T. Co. 15 C. C. A. 14, 35 U. S. App. 175, 67 Fed. 469, that the Factors' Act of New York applied to the relationship created by a trust receipt, and that a bona fide pledgee from one intrusted with the possession of merchandise with a power of sale was protected against the owner of the title under a trust receipt. This decision was followed by the court of appeals of New York in a case where the language of the trust receipt was substantially the same as in the case at bar. New York Secur. & T. Co. v. Lipman, 157 N. Y. 551, 52 N. E. 595. In Freudenheim v. Selig Gütter, 201 N. Y. 94, at page 100, 94 N. E. 640, 642, where the effect of the Factors' Act of the state was considered, it was said: "It [the act] made possession, under certain circumstances, conclusive evidence of ownership to the extent necessary to protect a purchaser or a lender who acted in good faith and without notice. It thus shifted the loss caused by the fraudulent act of the agent from the innocent purchaser to the principal who selected the agent, intrusted him with possession of the property and placed him in a position where he could perpetrate the fraud. The real theory of the act is that the selection of the faithless agent and intrusting him with the property is (- 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. The 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. 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. Louisiana Supreme Court - June 28, 1926. (161 La. 1051, 109 So. 834.) Trust receipts, § 1 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 of the court. 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 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 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. O'Niell, Ch. J., delivered the opinion of the court: 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, Houston, Tex. Notify Central Warehouse & Forwarding Co. at Houston, Tex." On the same day On the same day Bishop C. Perkins, for his company, borrowed from the Canal-Commercial Trust & Savings Bank, in New Orleans, $4,700, on a promissory note, and pledged and delivered the 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 warehouse and issue a negotiable warehouse receipt for the same and to deliver the receipt to the Lumbermen's National Bank with instructions to notify the Whitney Central National Bank of New Orleans that the warehouse receipt was held for the latter's order. On the next day Perkins sent the bill of lading by registered mail to the Central Warehouse & Forwarding Company, but it appears that it was not delivered until three or four days later. There is no explanation as to why Perkins instructed the Central Warehouse & Distributing Company to have the warehouse receipt held in the Houston bank subject to the order of the Whitney Central National Bank, instead of having it held subject to the order of the Canal-Commercial Trust & Savings Bank; but the probability is that that was an honest mistake on Perkins' part, because, on the same day that he mailed the bill of lading to the Central Warehouse & Forwarding 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 bill of lading to the bank and its return to Perkins on the trust receipt, it developed that Bishop C. Perkins Company was insolvent; and the |