It is held at present, that notwithstanding this statute, the state law requiring filing, applies to mortgages of vessels. The act of congress prescribes, as to all vessels of the United States, a rule as obligatory upon the state tribunals as upon those of the United States; but it does not supersede or abolish statutory regulations of a state upon the same subject, which are not inconsistent with it. Hence, if a mortgage of a vessel is not registered at the custom house as required by the act, it will be invalid as to purchasers or mortgagees without notice, although every state law may have been complied with; and on the other hand, although it is registered at the custom house, yet if a state statutory requisition has been neglected, the mortgage will give place to a subsequent transfer or mortgage also registered, and in respect to which the state law has been fulfilled (Thompson v. Van Vechten, 5 Abb. Pr., 458), and is void against creditors (Etna Ins. Co. v. Aldrich, 26 N. Y., 82). This reasoning is doubtless correct. The two statutes are entirely consistent and compatible; and while both remain in force, both must be complied with. But nc good reason is perceived why a mortgage, which by the controlling law of the United States must be registered at the custom house, should also be required by the state to be filed in a state office. Sufficient notice of the lien is given, and all the important objects of recording are secured by the registry required by the national law; and the class of mortgages embraced by that law may be safely left, in the opinion of the commissioners, to its exclusive operation. Only such vessels should be excepted from the state law as are embraced by the law of the United States. It is to be observed that the power of Congress to regulate the subject has been doubted (see Ætna Ins. Co. v. Aldrich, 26 N. Y., 82). If this doubt should be confirmed, this section should be omitted. 1651. Lienor may pledge property to extent of his lien. 1652. Real owner cannot defeat pledge of property transferred to apparent owner for purpose of pledge. Pledge, what. SECTION 1653. Pledge lender, what. 1654. Pledgeholder, what. 1655. When pledge lender may withdraw property pledged. 1657. Pledgeholder must enforce rights of pledgee. 1658. Obligation of pledgee and pledgeholder, for reward. 1659. Gratuitous pledgeholder. 1660. Debtor's misrepresentation of value of pledge. 1662. When pledgee must demand performance. 1663. Notice of sale to pledgor. 1664. Waiver of notice of sale. 1665. Waiver of demand. 1666. Sale must be by auction. 1667. Pledgee's sale of securities. 1668. Sale on the demand of the pledgor. 1669, 1670. Surplus to be paid to pledgor. 1671. Pledgee's purchase of property pledged. 1672. Pledgee may foreclose right of redemption. S1647. Pledge is a deposit of personal property by way of security for the performance of another act. Story on Bailm., § 286. As to what constitutes a pledge in general, see Cortelyou v. Lansing, 2 Cai. Cas., 200; Barrow v. Paxton, 5 Johns., 258; McLean v. Walker, 10 id., 471; Brownell v. Hawkins, 4 Barb., 491; Hasbrouck v. Vandervoort, 4 Sandf., 74; Bank of Rochester v. Jones, 4 N. Y., 497; Stearns v. Marsh, 4 Den., 229; Knapp v. Alvord, 10 Paige, 205. As to the distinction between pledge and mortgage with reference to things in action, see Garlick v. James, 12 Johns., 146; White v. Platt, 5 Den., 269; Wheeler v. Newbould, 16 N. Y., 392; Atlantic Fire & Marine Ins. Co. v. Boies, 6 Duer, 583; Lewis v. Graham, 4 Abb. Pr., 106; Wilson v. Little, 2 N. Y., 443; Vaupell v. Woodward, 2 Sandf. Ch., 143; Lewis v. Varnum, 12 Abb. Pr., 305. In Brass v. Worth, 40 Barb., 648, the defendants were stock brokers, in the city of New York, and the plaintiff entered into a general arrangement with them that they should purchase such stock as he should direct, and pay for the same with their own money, and hold such stock for him, for resale from time to time as he should direct. For their advances and ser vices they were to receive interest and a commission; and for their security against depreciation the plaintiff was to keep on deposit with them a margin of five per cent upon the par value of all purchases of stock made by them for him, which margin was constantly to be kept good. It was held that though the contract did not prescribe with certainty the rights and duties of S1648. Every contract by which the possession of personal property is transferred, as a security only, is to be deemed a pledge. It is intended, by this section, to place every mortgage essential to 1649. The lien of a pledge is dependent on pos- Delivery session, and no pledge is valid until the property validity of pledged is delivered to the pledgee, or to a pledgeholder, as hereafter prescribed. Delivery is essential to a pledge (Brownell v. Hawkins, 4 Barb., 491). pledge. 1650. The increase of property pledged is pledged Increase of with the property. thing. $ 1651. One who has a lien upon property may Lienor pledge it to the extent of his lien. This power is not fully recognized by our existing law; $ 1652. One who has allowed another to assume the apparent ownership of property for the purpose of making any transfer of it, cannot set up his own title, to defeat a pledge of the property, made by the other, to a pledgee who received the property in good faith, in the ordinary course of business, and for value. This section is an extension of our present rule allowing to be sustained in favor of one who lends upon it with- may pledge property to extent of his lien. Real owner feat pledge transferred cannot de of property to apparent owner for pledge. purpose of At common law. -prior, in England, to 4 Geo. 4, c. 83, 6 id., c. 94, and 5 & 6 Vict., c. 39, and in this state to Laws of 1830, ch. 179 — - a factor for sale had no power to pledge; not even to the extent of his lien, nor when the object of the pledge was to secure money raised for the use of his principal. The English statute of 6 Geo., 4, c. 94 (known as the "factor's act "), provided that: "any person intrusted with, and in possession of any bill of lading, dock warrant, order for delivery of goods, &c., &c., shall be deemed the true owner of the goods described therein so far as to give validity to any contract, &c., made by such person for the sale or disposition of such goods, or any part thereof, or for the deposit or pledge thereof, or, &c., as security for any money or negotiable instrument advanced or given on the faith of such instrument." Under this statute it was decided by the English House of Lords (in Hatfield v. Phillips, 14 M. & W., 665; 12 C & Fin., 343; 10 Jur., 180; aff 'g S. C., 9 M. & W., 647), that to render valid a disposal of goods by a person as intrusted with one of the instruments named in the statute, he must be actually intrusted with the particular instrument on the faith of which the consideration passes, by the owner of the goods; or must hold it under such circumstances that an actual intrusting may be inferred. Where a factor was intrusted with the bill of lading by the owner, and entered the goods in his own name at the custom house, and thus obtained a dock warrant, and pledged the dock warrant, it was held, that the pledgee was not entitled to hold the goods. The fact that the factor was enabled to obtain the dock warrant by means of having been intrusted with the bill of lading, was not enough. He must have been intrusted with the warrant by the owner. The rule in this respect has since been enlarged by statute 5 & 6 Vict., c. 39; which enacts that any agent intrusted with the possession of goods or of the documents of title to goods shall be deemed owner so far as to give validity to any contract by way of pledge, lien, &c., for any original or continuing advance — notwithstanding that the party making the advance may have had notice that the party receiving it was only an agent; and that any bill of lading, &c., or other document used in the ordinary course of business as proof of the possession or control of goods, or authorizing the possessor of such document to transfer or receive goods thereby represented, shall be deemed a "document of title" within the act.. By our own factors' act (Laws of 1830, ch. 179, § 3), it is provided that every factor or other agent intrusted with a bill of lading, custom house permit, or ware house-keeper's receipt; and every such factor or agent not having the documentary evidence of title, who shall be entitled to the possession of merchandise for the purpose of sale, or as security for advances, is to be deemed the true owner, so far as to give validity to his contract for the sale or disposal of such merchandise, for any money advanced or negotiable instrument, or other obligation in writing given upon the faith thereof. But a person who takes merchandise from a factor to secure an antecedent debt, acquires no better right than the factor had at the time. The principle of this act is somewhat extended by Laws of 1858, ch. 326, § 6, which enacts that warehouse receipts given for any goods, wares, merchandise, grain, flour, produce, or other commodity, stored or deposited with any warehouseman, wharfinger, or other person, may be transferred by indorsement thereof; and any person to whom the same may be so transferred, shall be deemed and taken to be the owner of the goods, wares and merchandise therein specified, so far as to give validity to any pledge, lien or transfer made or created by such person or persons. This section was somewhat obscurely amended by Laws of 1859, ch. 353. Under our act of 1830, it has been held that where a pledge, &c., by a factor, is sought to be sustained on the ground that he was intrusted with the documentary evidence of title mentioned, it must appear: 1. That the pledgee had no notice, from the language of the document relied on, or otherwise, that the factor was not the true owner. 2. That the document was transferred and delivered to such pledgee simultaneously with his advance, in such manner as to vest in him either the title or the exclusive right and means of obtaining possession. 3. That the document relied on is one of the three enumerated in the statute. A permit for landing goods on which duties have not been paid, to the end that they may be stored in bond, as authorized by acts of Congress, August 6, 1846, and March 28, 1854 (9 U. S. Stat. at L., 53; 10 id., 270), is not such a custom house permit;" nor is the receipt of the keeper of a bonded warehouse on receiving goods for storage, given under the acts of Congress, such a "warehousekeeper's receipt" as is embraced within the act. แ 4. That the document was "intrusted" to the factor by the owner of the goods; i. e., it must have been delivered or transmitted to the factor by the owner, or have been received by the factor in the proper and ordinary mode of discharging his trust. Unless these elements exist, the validity of the pledge must be determined by the common law. |