Bills of lading and other documents which evidence a carrier's or warehouseman's possession of property and which must be surrendered to the carrier or warehouseman in order to secure possession of the property are sometimes treated for purposes of title as though they were the goods themselves. Possession of such documents is theoretically the possession of the goods. Hence a transfer of possession of such a bill of lading or warehouse receipt is theoretically transfer of possession of the goods. Even in states absolutely requiring transfer of possession to perfect a buyer's title as against subsequent purchasers from the seller, it is possible that the transfer of a bill of lading representing the property would be sufficient. There is, however, an obvious unreality in pretending that possession of the bill of lading is possession of the goods. Like all pretenses it is potent for trouble. When one bill of lading is the only key by which actual possession may be had, it is justifiable to give its possession the effect of possession of the goods. But when it is not the only key, such a holding defies all the reasons on which the setting aside of the first buyer's title is based.

4. PURCHASERS FROM ONE WHO HAS TITLE, BUT NOT

POSSESSION

Subject to Original Owner's Rights.-A seller who does not have possession, but does have title, can invest his

46-The leading case is Barber v. Myerstein, L. R. 4 H. of L. 317, in which one Abraham, the owner of property represented by a bill of lading in triplicate, pledged the property to Myerstein and gave him possession of two copies of the bill of lading. Later on Abraham pledged the same goods to Barber and gave him possession of the third copy of the bill of lading. Barber used his copy first, and got possession of the goods

trom the carrier Myerstein then brought suit as owner of the goods. and the court upheld his claim, saying, "When the vessel ig at sea and the cargo has not yet arrived the parting with the bill of lading is parting with that which is the symbol of property, and which for the purpose of conveying a right and interest in the property, is the property itself." Accord, Broadwell v. Howard, 77 Ill. 305.

buyer with what he has, namely, title. But he can not by the sale cut off the rights of the original owner. These rights of the original seller are, as we have seen, only the right of a seller's lien and its extension by way of stoppage in transitu. So long as the seller retains possession, in the absence of credit to the buyer he has a lien upon the goods themselves for payment." This right exists even though the title itself has passed to a third person who paid for it in ignorance of any outstanding rights. The second seller's lack of possession is sufficient to put a purchaser from him on notice of such rights.48 But the sub-purchaser having acquired such rights as his seller did have, has a right to acquire possession by tendering payment before the lien has been enforced.49

Likewise, a seller's right to stop in transitu upon discovery of his buyer's insolvency is not lost through that buyer's having resold even to a purchaser in good faith -unless the latter buys on the strength of a bill of lading.50

V.

47-Ante, p. 111.

48-Perrine v. Barnard, 142 Ind. 448; McElwee V. Metropolitan Lumber Co., 69 Fed. 302; Robinson v. Morgan, 65 Vt. 37; Tuthill Skidmore, 124 N. Y. 148; M'Ewan v. Smith, 2 H. L. Cas. 309. 49-Pardee v. Kanady, 100 N. Y. 121; New England Iron Co. v. Gilbert etc. Co., 91 N. Y. 153, by analogy.

50-Kemp v. Falk, L. R. 7 App. Cas. 573, cited in McElwee v. Metropolitan Lumber Co., 69 Fed. 302; Pattison v. Culton, 33 Ind. 240, 5 Am. Rep. 199, but here, although the court talks of stoppage in transitu, the title was in fact still in the seller and he was merely retaking his own goods; Eaton v. Cook, 32 Vt. 58, dictum; Brenan v. Atlanta etc. R. R., 108

Ga. 70, 79 Am. St. 26, even though an unindorsed bill of lading was given to the sub-buyer; Pattison v. Crilton, 33 Ind. 240, 5 Am. Rep. 199, making an express distinction between the resale without transfer of a bill of lading and one accompanied by such transfer; Ilsley v. Stubbs, 9 Mass. 65, 6 Am. Dec. 29; Sheppard v. Newhall, 54 Fed. 306, unaffected by delivery of unindorsed bill of lading; Holbrook v. Vose, 19 N. Y. Superior 76; Delta Bag Co. v. Kearns, 112 Ill. Ap. 269; Clapp Bros. v. Sohmer, 55 Iowa 273; Ocean S. S. Co. v. Ehrlich, 88 Ga. 502, 30 Am. St. 164, even though the bill of lading was shown, but not delivered, to the sub-buyer, the freight receipts given him and he received a part of the goods from the carrier;

Purchase of Bill of Lading.-The seller's right to stop is defeated, however, if he has put his buyer in possession of a properly indorsed bill of lading which the latter transfers to his own buyer.* This was decided in the case of Lickbarrow v. Mason.51 It appeared that the buyer had pledged the goods and delivered the bill of lading to Lickbarrow. But the seller, having discovered that the buyer was bankrupt, retook possession of the goods from the carrier. Lickbarrow then sued in trover. The intermediate appellate court decided that title had never passed to the buyer and that Lickbarrow therefore got no title. The House of Lords, however, held that title had passed to the buyer. The seller's only right against the goods, therefore, was the right to stop in transitu. But by the buyer's pledge to Lickbarrow his title passed to the latter. The question was thus squarely presented, whether Lickbarrow's title was subject to the original seller's right to stop in transitu. The House of Lords held that it was not so subject. This decision it put clearly on the ground that the right to stop in transitu is an equity and will prevail against a bare legal title, but it will not prevail against one who, having bought for a fair consideration, has himself an equity coupled with his legal title.

This equity in the sub-buyer was said to arise from his having purchased the goods for good consideration and without notice. The sub-seller's possession of a bill of lading was not mentioned as having anything specifically to do with the matter of the sub-purchaser's equity, although it was discussed in relation to the transfer of title. From the case itself it might be concluded that a sub-buyer for value and without notice from one not having a bill of lading would be treated as having an "equity" connected with his title and therefore to be

Gass v. Astoria Veneer Mills, 118 N. Y. S. 982, even though "nonnegotiable" bill was delivered.

51-6 East 20, note. 2 Term. Rep. 63.

*See Uniform Sales Act, Section 62.

protected. But while the precise statement on the matter is somewhat scant, the authorities cited in the preceding discussion clearly limit the seller's loss of his right to cases where the sub-buyer has relied on the first buyer's possession of a bill of lading. 52

It is still indeterminate what is the effect of a transfer of a bill of lading after the seller has notified the carrier of his stoppage in transitu. One phase of the matter was decided in Newhall v. Central Pacific Rr. Co.58 Two hours after the seller had notified the carrier not to deliver the goods, the buyer pledged the bill of lading to the plaintiff. The latter presented the bill to the carrier and demanded the goods; the carrier refused because of the seller's orders to stop, and suit was brought against the carrier. Judgment was given for the plaintiff. Delivery of the bill of lading, said the court, had passed the title to him, and in relying on his seller's possession of the bill of lading he acquired quite as strong an equity in the goods as though the orders to stop had not been given. Hence, having both title and an equity, his right to the goods was superior to that flowing from the seller's bare equity. This, however, appears to be the first decision precisely

52-That re-sale with transfer of the indorsed bill of lading defeats stoppage in transitu, see: Chandler v. Fulton, 10 Tex. 2, 60 Am. Dec. 188, making an express distinction between the case and one where there was no transfer of bill of lading; this case holds also that knowledge that goods had not been paid for would not affect subpurchaser's rights, but his knowledge of his seller's insolvency would do so. Missouri Pac. R. R. v. Heidenheimer, 82 Tex. 105, 27 Am. St. 861, even though the bill was stamped "duplicate." St. Paul Roller Mill Co. v. Great Western Co.. 27 Fed. 434, as collateral security for antecedent debt.

Nat'l Bk. v. Schmidt, 6 Colo. Ap. 216, right is lost by transfer as security for antecedent debt, citing authority; Shepard v. Bur rows, 62 N. J. L. 469, mere knowledge that goods are not paid for does not affect sub-purchaser's position; Audenreid v. Randall, 3 Cliff. 99, Fed. Cas. #644. But see, contra, Castanola v. Mo. Pac. R. R. Co., 24 Fed. 267; Lee v. Kimball, 45 Me. 172, even though consideration was payment of antecedent debt; Dymock v. Midland Nat'l Bank, 67 Mo. Ap. 97, seller's right not lost by transfer of bill of lading as security for an antecedent debt.

53-51 Cal. 345, 21 Am. Rep. 713.

involving the point, and was so stated by the court. It is also, so far as the author has discovered, the only decision involving the particular question.54*

Assuming that the decision in the Newhall case will stand, there is left undecided the possible case of sale of the bill of lading after the seller had not only ordered the goods stopped in transitu, but had also, with a "duplicate" bill of lading, or without any, secured possession of the goods. The obvious difficulty in answering this question is due to the fact that the whole doctrine growing out of Lickbarrow v. Mason is illogical. That opinion declared that the sub-buyer had an equity in the goods. But the sub-buyer did not rely on his seller's possession of the goods. Therefore, if he had an equity, every sub-buyer who relies on his seller's word should also have an equity. Possession of the bill of lading is no more indicative of a title free from someone's else right of stoppage in transitu than is no possession. In fact, it shows that the goods are still in transit and therefore subject to stoppage. So far as Lickbarrow v. Mason is concerned, every subbuyer, whether of a bill of lading or not, would be protected. But, in other cases, sub-buyers who have not relied on a bill of lading are not protected. The bill of lading has therefore been given an illogical value as denoting a free title. The result is difficulty where the logical and the illogical meet.

Pledgees. Even the delivery of a bill of lading defeats the original seller's right of stoppage only to the extent of the legal interest created in the third person. If the latter is a sub-buyer, so that he gets complete ownership, the original seller's right is lost entirely, no matter what

54-In Poole v. H. & T. C. Ry. Co., 58 Tex. 134, there was a transfer of the bill of lading after notice to stop had been given, but the taker accepted it with intent to defeat a probable stoppage, so

that the rights of a taker in good faith were not involved. In Bank v. Ry Co., 69 Mo. Ap. 246, there is a casual dictum in accord with Newhall v. Central Pacific R. R.

*See Uniform Sales Act, Section 62.