604, 39 Am. Dec. 342; Smith v. Busby, 15 Mo. 387, 57 Am. Dec. 207. If he desires to rescind for want of title and to recover the purchase money paid, and interest, he must first tender his grantor a reconveyance and the possession: Mecklem v. Blake, 22 Wis. 495, 99 Am. Dec. 68. Yet he is not bound to surrender possession, if he has made large payments, and the vendor is insolvent: Bryan v. Lofftus, 1 Rob. 12, 39 Am. Dec. 242; and unable or unwilling to make title: Duncan v. Jeter, 5 Ala. 604, 39 Am. Dec. 342; Greenlee V. Gaines, 13 Ala. 198, 48 Am. Dec. 49.

AMERICAN PIG IRON STORAGE WARRANT COMPANY V. GERMAN.

[126 Ala. 194, 28 South. 603.]

PLEDGE RIGHT TO ENFORCE.-If personalty pledged as collateral security is taken from the possession of the pledgee without his knowledge or consent, and an adverse claim is set up thereto, the pledgee may, after default made in the payment of the principal debt, maintain a bill in equity to determine the rights of the parties to the property and to enforce the pledge by judicial sale. (p. 24.)

CREDITORS' BILLS.-THE PENDENCY of a creditor's bill filed by one creditor on behalf of himself and others does not preclude another creditor, not a party to the first bill, from proceeding by an original creditor's bill. (p. 24.)

PLEDGE. STATUTES REQUIRING CHATTEL MORTGAGES to be in writing and authorizing their registration, have no application to a pledge. (p. 24.)

PLEDGE AND MORTGAGE-DIFFERENCE BETWEEN.— A pledge differs from a mortgage in that the pledgee must have possession and the pledgor retains the legal title to the property, while a mortgage passes the legal title to the mortgagee, and may allow the possession to remain in the mortgagor. (p. 24.)

PLEDGE. NOTICE TO THE PUBLIC OF THE PLEDGEE'S INTEREST in the property is sufficiently given by the possession which must reside in the pledgee, and which, to be effective either for notice or to give validity at law to the pledge, must be complete, unequivocal, and exclusive. (p. 25.)

PLEDGE-DELIVERY, WHEN MUST BE MADE.-It is not essential to the validity of a pledge that delivery of the property be made at the time when the contract is executed. The pledge may take effect upon subsequent delivery made in performance of such contract. (p. 25.)

INTERVENTION-PLEADING.-PETITIONS by interven. ing creditors in a suit by a creditor's bill are not required to conform to all the technical rules applicable to pleadings as between the original parties, and when filed by leave of court other parties in interest are entitled to notice and an opportunity to defend; but such petitions need not name them as defendants, nor need they contain any formal prayer for process. (p. 26.)

PLEDGE DELIVERY.-If pledged property, in accordance with the agreement of the parties, is placed in a designated place and marked with the pledgee's name, there is a sufficient delivery to sustain the pledge. (p. 27.)

PLEDGE - WRONGFUL RETAKING POSSESSION. — A pledgor cannot defeat his pledge by wrongfully retaking possession. (p. 27.)

REFEREES.-ADMISSION BY A REFEREE OF INCOM. PETENT EVIDENCE cannot reverse a decree supported by com petent evidence. (p. 27.)

REFEREE-SUSTAINING REPORT OF, ON CONFLICT. ING EVIDENCE.-THE FINDINGS OF A REFEREE will not be set aside if sustained by testimony sufficient to support the verdict of a jury. (p. 27.)

RECEIVERS POWER OF TO CARRY ON BUSINESS AND CREATE LIABILITIES.-If a manufactory and the property intended for use therein are in the hands of a receiver, the court has power to direct the discharge of threatened encumbrances, and to have its accumulated raw material manufactured into marketable product, and to this end can authorize the receiver to contract debts and to issue receiver's certificates therefor, and to order them paid out of the product thus manufactured. (p. 28.)

RECEIVERS PROTECTION OF PROPERTY-PRORATING EXPENSES.-Expenses incurred by a receiver in protecting the property of the receivership may, in the discretion of the court, be prorated between the parties to the suit according to the value of their respective properties. (p. 28.)

T. G. Jones, C. P. Jones, E. F. Jones, and W. C. Ward, for the appellant.

Brawne & Dryer, J. B. Knox, F. L. Pettus, and H. F. Reese, for the appellee.

235 SHARPE, J. This case is the remaining one of four suits at one time pending between the Alabama Iron and Steel Company and its creditors, in which there was a common receivership. The other three suits have each been dismissed without trial, but the receivership, together with certain intervening claims to property in the receiver's charge, still survives to be disposed of with this suit.

The litigation originated under circumstances substantially as follows: The Alabama Iron and Steel Company, a domestic corporation, was for several years engaged in the manufacture and sale of charcoal pig iron. The appellant, the American Pig Iron Storage Warrant Company, a corporation having its principal office in New York city, did a warehouse business which consisted mainly in the storage of pig iron. Its yard, No. 38, was located near the furnace of the Alabama Iron and 236 Steel Company (which we will refer to hereafter as the furnace company), near Briarfield, Alabama, and was divided into three

sections, designated, respectively, as "A," "B," and "C." Under its regulations iron, when stored in it, was placed in separate piles, each containing one hundred tons, and marked with letters to identify its location, and with figures to designate its grade. For each of these hundred ton lots the local yardmaster gave to the depositor his certificate, and upon that certificate, when forwarded to the New York office, the storage company issued to whom the furnace company might direct its several warrants for each of such lots, which warrants described the iron covered by it, and stipulated that "this company has received into its storage yard, located as above, and entered in its storage-books in New York in the name and subject to the order of (name of holder) one hundred tons of two thousand two hundred and forty pounds each of pig iron of the brand, grade, and weight represented by this warrant, which will be delivered free on board cars in the yard above named, only on surrender of this warrant at the New York office, properly indorsed and witnessed, with payment of charges as noted below." The storage yard system was availed of by the furnace company for the purpose of borrowing money on the security of its unmarketed iron, the warrants for which could be conveniently used as evidence of a pledge of iron to secure its notes. In some instances of borrowing the storage company and its yard were not resorted to, and the iron was delivered elsewhere in pledge to the lender independently of the storage company. Besides other investors who from time to time made loans to the furnace company upon the security of storage warrants was the storage company itself. In this way it became the pledgee of its own warrants, representing about two thousand one hundred tons of iron in its yard 38.

Until May 26, 1894, E. T. Peter was the storage company's local yardmaster. He was also a director in and the manager of the furnace company. On May 21, 1894, he, as a director in the furnace company, claiming to act by authority of its board of directors, filed a bill 237 against that company and one of its creditors, alleging, among other things, its insolvency and consequent inability to continue business, and praying among other things for the appointment of a receiver of its property and for the adjustment of its debts.

Under that bill T. J. Peter, who was the president of the furnace company, and the father of that complainant, was appointed receiver, and as such took charge of the furnace company's unpledged property, and subsequently, where a question arose involving the validity of the warrant pledges, he, acting under

orders of the court, took charge of the storage company's yard and the iron therein, consisting of about ten thousand three hundred tons.

The filing of that bill was followed by the filing in the same court of three others including the present one, wherein different creditors of the furnace company sought to reach its property, one of them charging that the first suit was brought collusively to hinder creditors. To each of these suits the receivership was extended under chancery rule 112. While they were pending two intervening petitions were filed, one by R. H. Pfaff, setting up a claim as pledgee of the furnace company to seven hundred tons of iron held by the receiver in the storage yard, and the other by L. and E. Lamar, Minthorne Woolsey, and Frank Moore, claiming a lien by receiver's certificates on iron manufactured by the receiver. From a decree on demurrer to one of the original bills an appeal was taken and was determined in this court: See Alabama Iron etc. Co. v. McKeever, 112 Ala. 134, 20 South. 84.

In October, 1897, each of the original suits except the present one was dismissed without trial, but without prejudice to the intervening petitions referred to; and they, together with this suit, were tried and decreed on jointly, and are jointly involved in this appeal.

During the pendency of the several suits, upon petitions of the appellant storage company and other warrant holders, orders of court were made and carried into effect, paying the several warrant holders, except the storage company, by sales to them of the iron apparently, covered by their respective warrants. Under the same decretal orders, the storage company was likewise paid in part, but thirteen hundred tons of iron were reserved to abide the final decree, seven hundred of the same to stand in lieu of that claimed under this original bill, and the remainder in lieu of that claimed by the intervenors.

238

Joseph Verchot brought this suit, and thereafter, he having died, it was revived in the name of his executrix. It seeks to enforce a pledge of seven hundred tons of iron alleged to have been made to him by the furnace company as security for money loaned on its seven notes each reciting a pledge of one hundred tons of designated iron, and further reciting that "any excess in the value of said collaterals or surplus from the sale thereof beyond the amount due hereon shall be applicable upon any other note or claim held by the holder hereof against us now due, or to become due, or that may hereafter be contracted." It is alleged in substance that after the iron was so delivered in pledge

it was, under the direction of the furnace company's president, wrongfully removed into the storage warrant yard, where interests in it were claimed by other parties defendant.

The demurrer to the bill was properly overruled. Verchot, not having possession of the iron, could not pursue the ordinary way of enforcing his security by a sale of the iron, and his sale, if it could be made, would be embarrassed by the conflicting claims upon it. In such case equity has jurisdiction to determine the rights of rival claimants and to enforce the pledge by judicial sale: 3 Pomeroy's Equity Jurisprudence, sec. 1231; 18 Am. & Eng. Ency. of Law, 674; Sharp v. National Bank, 87 Ala. 644, 7 South. 106; Freeman v. Freeman, 17 N. J. Eq. 44.

There was nothing in the pendency of other creditors' bills to preclude him from proceeding by original bill instead of by intervention under those bills: Alabama Iron etc. Co. v. McKeever, 112 Ala. 134, 20 South. 84.

The statutes requiring chattel mortgages to be in writing and authorizing their registration have no application to a pledge. A pledge differs from a mortgage in that the pledgee must have possession and the pledgor the legal title of the property, while a mortgage passes the title to the mortgagee and may allow possession to 239 remain in the mortgagor: Jones on Pledges, secs. 4, 7; Geilfuss v. Corrigan, 95 Wis. 651, 60 Am. St. Rep. 143, 70 N. W. 306. Notice to the public of the pledgee's interest in the property is sufficiently given by the possession, which must reside in the pledgee. Such possession, however, to be effective either for notice or to give validity at law to the pledge, must be complete, unequivocal, and exclusive of the pledgor's possession in his own right: Jones on Pledges, sec. 40; Casey v. Cavaroc, 96 U. S. 467; First Nat. Bank v. Caperton, 74 Miss. 857, 60 Am. St. Rep. 540, 22 South. 60. As bearing on the question what constitutes such possession, the reported cases are numerous; but those which can be relied on as express authority are few, since each case is determined upon its peculiar facts.

In this case it is clearly proven that under the agreement of pledge between the furnace company, acting by its president and Verchot, a particular spot of ground belonging to that company and located apart from its own iron yards was tendered by the president and accepted by Verchot for his use, and that a quantity of iron was placed thereon, piled in one hundred ton lots and marked with paint with Verchot's initials. There is nothing to show that any power was reserved or allowed to the