(3.) Of acts of the vendee affecting the right.

A resale of the goods by the vendee does not, of itself, and without other circumstances, destroy the vendor's

Geo. IV., in 1823, and the whole amended and re-enacted by the statute of 6 Geo. IV., ch. 94, and lastly, by the statute of 3 & 4 William IV. ch. 57, and the consolidated act of 8 & 9 Victoria, ch. 91, which comprehends the system as now in operation. The object of the warehousing system is to lodge imported articles in public warehouses of special security, at a reasonable rent, without payment of the duties on importation, till they are withdrawn for home consumption, and if re-exported, no duty is ever paid. It secures the duties on goods lawfully imported for use and sale in England, and relieves the trader from immediate payment in cash, and until the goods are withdrawn for home consumption. It allows the storage even of prohibited goods in British warehouses, on special security for reexportation; and permits the transfer of goods in the warehouse, without requiring payment of the duties, until they are withdrawn for use. If the goods are destroyed by inevitable accident before they are withdrawn, although the government does not stand insurer for their safety, the duties are uniformly remitted. A clear analysis of the warehousing provisions, is given in 1 Bell's Com. 187-190, 5th edit., and in McCullock's Dictionary of Commerce, 2d edit. art. warehousing system, where the statute of 3 & 4 William IV. is given at large with its numerous and detailed provisions.

The New-York chamber of commerce, in November, 1842, prepared and sent a memorial to congress in favour of establishing the warehousing system in the United States; and in addition to powerful considerations in favour of it, the memorial suggested that the warehouse, or dock warrants, or storage receipts, were in England transferable paper, and the holder was regarded as owner of the goods. A flexible and desirable security representing actual property, was thus thrown into commercial circulation.

See Phillips v. Huth, 6 Meeson & Welsby, 572, on the construction of the factors' act of 6 Geo. IV. The congress of the United States, in August, 1846, ch. 84, established for the first time a warehouse system. The act declares that duties on all imported goods shall be paid in cash, but it provides that if duties are not paid, or if the importer or consignee shall make an entry on writing for warehousing the same, the goods shall be deposited in the public stores or other stores agreed on, at the charge and risk of the importer or consignee, subject to their order on paying the duties and expenses, to be secured by bond with sureties, but not to be withdrawn except in specified parcels; and if satisfactory security be given that the goods shall be landed out of the jurisdiction of the United States, or on entry for re-exportation and a payment of the expenses, &c., the goods may be shipped without payment of duties. That if any goods so deposited shall remain beyond one year, without payment of the duties and ex

right of stoppage in transitu. But if the vendor has given to the vendee documents sufficient to transfer the property, and the vendee, upon the strength of them sells the goods to a bona fide purchaser *548 without notice, the vendor would be divested of his right. A bill of lading usually has the word assigns: the goods are to be delivered to the consignee or his assigns, he or they paying freight; and a great question has accordingly arisen and been very elaborately discussed and litigated in the English courts, whether the bill of lading could be negotiated by the consignee like a bill of exchange, and what legal rights were vested in the assignee. In the case of Lickbarrow v. Mason, it was decided by the K. B., that a bona fide endorsement, for a valuable consideration of a bill of lading, by the consignee to an assignee, who had no notice that the goods were not paid for, was an absolute transfer of the property, so as to divest the consignor of his right of stoppage in transitu in case of the vendee's insolvency, as against such assignee. There is no case on mercantile law which has afforded a greater display of acute investigation. The judgment of the K. B. was reversed in the exchequer chamber; and Lord Loughborough took a masterly view of the whole subject, and completely overthrew the doctrine of the negotiability of bills of lading. The case then went to the house of lords, where Mr. Justice Buller most ably supported the decision of the K. B. A new

penses as aforesaid, they shall be appraised and sold at auction, and the surplus proceeds after payment as aforesaid, shall be paid over to the owner or consignee. Goods deposited may also be withdrawn and transported to any other port of entry in the United States, with the benefit of drawback under specified regulations.

■ Craven v. Ryder, 6 Taunt R. 433. Lord Alvanley, 3 Bos. & Pull. 47. Whitehouse v. Frost, 12 East's Rep. 614. Stoveld v. Hughes, 14 Ib. 308.

2 Term Rep. 63.

• Mason v. Lickbarrow, 1 H. Blacks. R. 357.

a6 East's Rep. 17, in notis.

trial was awarded,a and a special verdict taken, and judgment given thereon without discussion; the judges of the K. B. declaring, that notwithstanding the decision in the exchequer chamber, they retained their former

opinions. The question, therefore, remains, to a *549 certain degree, still floating and unsettled;

though it seems now to be considered as the law at Westminster Hall, that if a bill of lading be assigned, bona fide, and for a valuable consideration, it is a transfer of the property; and in the case of the consignee, if it be made without notice of the insolvency of the consignee, the property is absolutely vested in the assignee of the consignee, and the consignor has in that case lost his right to stop. It is likewise considered to be the law in

a 2 H. Blacks. R. 211. 5 Term R. 367.

b Lickbarrow v. Mason, 5 Term Rep. 683. In France the debateable nature of the subject has been strikingly displayed; for the question of the negotiability of bills of lading was discussed by such masters of commercial law as Valin and Emerigon, and they came to directly opposite conclusions. The first maintained that bills of lading were negotiable instruments, and the latter denied it. Valin's Com. tom. i. p. 606, 607. EmBy the Code of Commerce, (art. 281,)

erigon, des Ass. tom. i. 318, 319.

bills of lading may be to order, or to bearer. This settles the question in favour of their negotiability.

• Coxe v. Harden, 4 East's R. 211. Cumming v. Brown, 9 Ibid. 506. Morison v. Gray, 2 Bing. Rep. 260. Walter v. Ross, 2 Wash. Cir. R. 283. Wharton's Dig. tit. Vendor, n. 80. Haille v. Smith, 1 Bos. & Pull. 563. In Morison v. Gray, 9 Moore's C. B. R. 484, it was held, that the bone fide assignee of a bill of lading had a sufficient property to stop the goods while in transitu, on the insolvency of the vendee, and to sue in his own name the wharfinger, who refused to deliver up the goods. But though a bill of lading be negotiable, it seemed in a late case to be doubted whether a bill of lading was conclusive as between the ship-owner and a bona fide endorsee for value. Berkley v. Watling, 7 Adolph. & Ellis, 29. In Birckhead v. Brown, 5 Hill N. Y. R. 634, it was declared, that letters of credit, and commercial guaranties were not negotiable instruments, and that no special contracts, other than bills of exchange and promissory notes were negotiable instruments, and no one could sue in his own name, but an original party to the contract. Lamourieux v. Hewitt, 5 Wendell, 307. Watson v. McLaren, 19 Id. 557. 26 Id. 425. Miller v Gaston, 2 Hill N. Y. R. 188.

In Thownson v. Dominy, 14 Meeson & Welsby, 403, it was adjudged

this country, that the delivery of the bill of lading transfers the property to the consignee; and it seems to be conceded that the assignment of it by the consignee, by way of sale or mortgage, will pass the property, though no actual delivery of the goods be made, provided they were then at sea. The rule is founded on sound principles of mercantile policy, and is necessary to render the consignee safe in the acceptance of the drafts of his correspondent abroad and to afford him the means of prompt reimbursement or indemnity.a

*But it must not be understood that the con- *550 signee can, in all cases by his endorsement of the

bill of lading to a third person, even for a valuable con

that a bill of lading was not negotiable like a bill of exchange, so as to enable the endorsee to sue in his own name. The endorsement transfers the right of property in the goods, but not the contract itself. The court said that there was no case that went so far.

Wright v. Campbell, 4 Burr. R. 2051. Griffith v. Ingledew, 6 Serg. Rawle, 429. Peters v. Ballistier, 3 Pick. R. 495. Walter v. Ross, supra. In Conrad v. The Atlantic Insurance Company, 1 Peters' U. S. Rep. 386, it was decided, that the consignee, being the authorized agent of the owner to receive the goods, his endorsement of the bill of lading to a bona fide purchaser, for a valuable consideration, without notice of any adverse interest, passed the property as against all the world. This is the result of the principle that bills of lading are transferable by endorsement, and pass the property. Strictly speaking, no person but such consignee can, by endorsement of the bill of lading, pass the legal title to the goods; but if the shipper be the owner, and the shipment be on his account and risk, he can pass the legal title by assignment of the bill of lading, or otherwise; and it will be good against all persons, except the purchaser for a valuable consideration, by an endorsement of the bill of lading itself. The same principle was declared in Nathan v. Giles, 5 Taunt. Rep. 558. A deposit of the bill of lading, without endorsement, will create a lien on the cargo to the amount of the money advanced on the strength of the deposit, which would be superior to the consignor's right of stoppage. That right came from the courts of equity, and is founded upon equitable considerations; and it consequently must yield to a still higher equity in a third person. In Louisiana, it has been held, that goods shipped could not be attached by the creditors of the shipper, after the bill of lading had come into the hands of the consignee; but they might be attached by the creditors of the consignee. M'Neill v. Glass, 13 Martin's Louis. Rep. 261.

sideration, and without collusion, defeat the right of the consignor to stop the goods. It will depend upon the nature and object of the consignment and the character of the consignee. As a general rule, no agreement made between the consignee and his assignee, can defeat or affect this right of the consignor; and the consignor's right to stop in transitu is prior and paramount to the carrier's right to retain as against the consignee. A factor, having only authority to sell, and not to pledge the goods of his principal, cannot divest the consignor of the right to stop the goods in transitu, by endorsing or delivering over the bill of lading as a pledge, any more than he could by delivery of the goods themselves by way of pledge; and it is the same thing whether the endorsee was or was not ignorant that he acted as factor. If the assignee of the bill of lading has notice of such circumstances as render the bill of lading not fairly and honestly assignable, the right of stoppage as against the assignee is not gone; and any collusion or fraud between the consignee and his assignee will, of course, enable the consignor to assert his right. But the mere fact *551 that the assignee has notice that the consignor

is not paid, does not seem to be of itself absolutely sufficient to render the assignment defeasible by the stopping of the cargo in its transit, if the case be otherwise clear of all circumstances of fraud; though if the assignee be aware that the consignee is unable to pay, then the assignment will be deemed fraudulent as against the rights of the consignor.c

a

Oppenheim v. Russell, 3 Bos. & Pull. 42. The right of stoppage is held not to be divested though the goods be levied on by execution at the suit of a creditor of the purchaser, provided it be exercised before the transitus is at an end. The vendor's lien has preference; it is the elder lien and cannot be superseded by the attachment of a creditor. Smith v. Goss, 1 Campb. N. P. R. 252. Buckley v. Furniss, 15 Wendell, 137. Marshall, J., in Hause v. Judson, 4 Dana's Ken. R. 11.

b Newson v. Thornton, 6 East's Rep. 17.

Cuming v. Brown, 9 East's Rep. 506. As long as the vendor of goods