Court Opinion

ID: 8310600
Source: CourtListenerOpinion
Date Created: 2022-10-17 13:47:50.520852+00
Date Added: 2024-06-11T16:44:42.737396
License: Public Domain

Nelson, J.
The above facts are undisputed, and the questions presented for determination are clearly raised by the demurrer to the complaint. I think they are settled by the United States supreme court. Expressions of opinion are found in some state tribunals adverse to the propositions announced by the supreme court, but tho opinion of the latter is supported by an exhaustive review of the principles of commercial law involved, and a logical conclusion is reached.
As applicable to the facts in the case at bar, discussed by that court, the first point is whether the bill of lading, deliverable to the order of plaintiff, (the shipper,) and attached to the draft drawn upon Whitcomb, and sent to the Tremont Bank “for acceptance and collection,” with no other instruction, was righfully delivered on acceptance thereof, and passed tho title to the flour, or whether tho bank must hold the bill of lading until payment of tlie draft before it could pass title by its delivery. National Bank v. Merchants’ Bank, 91 U. S. 92, settles this question, and a reference to this authority is all that is necessary. Whitcomb, on acceptance of the draft, was entitled to the bill of lading, and the title to the flour passed, so that, on transferring it to the National Bank of Redemption for an antecedent debt, under an agreement that the bank should sell the flour on its arrival in Boston, and credit him on the debt, he lost control of the flour. When the plaintiff, on discovery of Whit-comb’s insolvency, notified the defendant not to deliver the flour to him or his assigns, did the right of stoppage in transitu exist?
There are no'circumstances disclosed to show the bill of lading was. not fairly and honestly assigned and transferred by 'Whitcomb; and, if the antecedent debt is a valuable consideration, the answer to this question must be in the negative. Authorities differ upon this point, and some courts hold that such transfer as security for a pre-existing debt is not for a valuable consideration, and does not defeat tho right of stoppage in transitu, but the United States supreme court (Railroad Co. v. National Bank, 102 U. S. 14) has announced the rule to be that such transfer is not an improper use of commercial, securities, and the bona fide holder is not affected by equities, or defenses *436between prior parties of which there was no notice. True, in the case of Railroad Co. v. National Bank the transfer was of promissory notes, but the rule extends to all commercial securities, including bills of lading; and the case of Leash v. Scott, 2 Q. B. Div. 376, which was a transfer of a bill of lading, is cited with approval by Judge Clifford in his opinion. The transfer and assignment of a bill of lading is equivalent to a delivery of the property described therein.
In this case the bill of lading was delivered to Whitcomb by the Tremont Bank, with intent to put the flour within his reach. The draft was drawn against the flour, and was received by the bank before its arrival. Such symbolical delivery is sufficient to pass title. These instruments are well known to the commercial world. They represent the property described; and in the hands of the holder they are evidence of ownership. Pollard v. Vinton, 105 U. S. 8. The delivery, with intent to pass the title to the property, does so, although drawn to order of shipper, and unindorsed, and such assignment absolutely transfers title to the property as would a bill of sale. McNeil v. Hill, 1 Woolw. 97.
It is urged that the bill of lading, running to order of the shipper, and delivered to Whitcomb without indorsement, carried on its face notice that he held it subject to equities between prior parties. The Tremont Bank was the agent of plaintiff, and, in the absence of any instructions further than appeared by the indorsement on the draft, had no right to hold the bill of lading after the draft was accepted. It is of no importance that it was- delivered unindorsed. It was the intention of the shipper that its agent should deliver the bill of lading on the acceptance of the draft. Such is the legal inference from the facts, and it is not qualified by the additional words “for collection.” National Bank v. Merchants’ Bank, supra.
Judgment for defendant.