person who has the immediate custody of the goods; or if to the principal whose servant has the custody, then at such a time and under such circumstances as that he may, by the exercise of reasonable diligence, communicate it to his servant in time to prevent the delivery to the consignee.

Goods can be stopped only while in transitu; and they are in transitu only until they come into the possession of the buyer. But this possession need not be actual, a constructive possession by the buyer being sufficient to prevent this stoppage; as, if the goods are placed on the wharf of the buyer, or on a neighboring wharf with notice to him; or in a warehouse with delivery to him of the key. or of an order on the warehouseman; in these cases they can no longer be stopped, because the transit is ended.

The entry of the goods at the custom-house, without payment of duties, does not terminate the transit. If the buyer has demanded and marked them at the place where they had arrived on the termination of the voyage or journey, personally or by his agent; or if the carrier still holds the goods, but only as the agent of the buyer, in all these cases the transit is ended. But if the carrier holds them by a lien for his charges against the buyer, the seller may pay these charges and discharge the lien, and then stop the goods in transitu.

If the buyer has, in good faith and for value, sold the goods, "to arrive," before he has received them, and indorsed and delivered the bill of lading to his purchaser, this second purchaser holds the goods free from the first seller's right to stop them. But if the goods and bill are transferred only as security for a debt due from the first purchaser to the transferee, the original seller may stop the goods, and hold them subject to this security, and need pay only the specific advances made on their credit, or on that very bill of lading, and not a general indebtedness of the first purchaser to the second.

A seller who stops the goods in transitu does not rescind the sale, but holds the goods as the property of the buyer; and they may be redeemed by the buyer or his representatives, by paying the price for which they are a security; and if not redeemed, they become the seller's, only in the same way as a pledge might become his; that is, he may sell them at a proper time, and in a proper manner, and with due notice, so that the buyer may protect his interests. And if the seller then fails to obtain from them the full price due, he has a claim for the balance upon the buyer. If he gets more than the amount due to him, he must pay over the balance to the buyer or his assignees.

An honest buyer, apprehending bankruptcy, might wish to return the goods to their original owner; and this he could undoubtedly do, if they have not become distinctly his property, and the seller be his creditor for the price. But if they have, the buyer has no more right to benefit this creditor by such an appropriation of these goods, than any other creditor by giving him any other goods.

CHAPTER VII.

MORTGAGES OF GOODS AND CHATTELS.

Mortgages are now often made of personal property, or goods and chattels. The instrument need not be so formal as a mortgage deed of land. Any instrument will answer the purpose which would suffice as a bill of sale of the property, and which contains, in addition to the words of sale and transfer, a clause providing for the avoidance of it when the debt is paid. I append to this chapter forms for this purpose.

When the mortgagor of personal property retained possession, it was formerly doubtful what security the mortgagee had. Now, however, it is generally provided by statute that the mortgagor may retain possession, if the mortgage be recorded.

These instruments should always be recorded according to the provisions of the statute of the State in which they are made; although the general rule would apply to them, that they would operate without record, as to all parties having notice or knowledge of them.

The statutes respecting mortgages of personal property always provide for an equity of redemption, which is usually very much. shorter than that of land. A frequent period is sixty days. The requirements of the statute in respect to notice, foreclosure, &c., must be strictly followed.

It used to be thought that a personal mortgage might be made to cover property subsequently acquired by the mortgagee. Thus, a dealer in dry goods would mortgage all his stock to secure some creditor, and provide in the mortgage that it should operate upon all his goods and merchandise subsequently acquired by him. But it has been held that such a clause has no effect; because no man can make a mortgage of property which he does not own at the time.

THE PLEDGE OF PERSONAL PROPERTY.

A pledgee (or one to whom a pledge is made) is bound to take ordinary (not extreme) care of the thing pledged; and if it be lost or injured for want of such care, he is answerable.

He cannot use it, except at his own peril; that is, he is liable for any injury caused by using it, even if it was not his fault. If the thing as a horse-needs use for its own safety, then the pledgee may use it for this purpose, and is liable only for an injury caused by his negligence.

He must account with the pledgor for the income, increase, or profits.

One difference between a mortgagee and a pledgee is this: a mortgagee need not take possession, for the mortgagor may retain it; and now this is provided for, as we have seen, by recording the mortgage. But if a thing is given in pledge, the pledgee must have and keep possession of it.

The most important difference is this: a mortgagee may sell and transfer his mortgage, and his transferee may transfer it again, and so on; and when the debt is paid, the mortgagor reclaims it from whomsoever has it then. But if a pledgee sells the pledge before the debt is due, it is held that he is at once answerable to the pledgor for its full value, although the debt be not paid.

Some cases of this kind have been carried very far in New York. It is held there and on grounds which may perhaps suffice to make it law everywhere - that if A lends money to B, and takes stocks in pledge, A cannot sell these stocks and keep the proceeds, and replace the stock and return it when the debt is paid. He can do nothing but keep the stock; and if he sells it, the pledgor may recover at once its full value, and the pledgee will have no security for his debt. In such a case, a pledgee, being sued, offered the testimony of brokers and others to prove a uniform and established usage in the city of New York thus to sell or use pledged stock until the debt was paid; but the court said the usage was illegal, and refused to consider the evidence.

It is certain that, after the debt is due and payable, and afterdemand if it be payable on demand, the pledgee may have a decree in chancery for the sale of the pledge, or may sell it himself, provided he first gives a reasonable notice to the pledgor, and then sells it, after a reasonable delay, in a proper manner, by a public sale at auction; and uses all reasonable precautions to get its value, as by advertisement, &c.; and does not buy it himself, directly or indirectly; and conducts himself in all respects honestly; and then he must account for the proceeds.

Sometimes the parties agree, when the pledge is given, or afterwards, how the pledge shall be treated, or how sold if not redeemed, &c.; and such agreements, if fair and reasonable, would undoubtedly be binding on both parties.

It is agreed that negotiable paper is excepted from the common rule; and the pledgee of that may sell or discount it before the debt is due; and must account for it, or its proceeds, if the debt is paid and the paper redeemed, or for the balance if the note is paid to him, and he applies it to payment of the debt.

A loan of stock is not like a pledge of stock, because it authorizes the borrower to sell or pledge it, or use it in any way, at any time; but he must replace and return the same quantity of the same stock, when it is called for. If he could not thus make use of the stock, the loan of it would be of no benefit whatever to the borrower. But he cannot thus use stock pledged to him, unless by a special agreement which permits this use.

A pledgee, who receives a pledge to secure one or more specific debts, cannot retain it to secure other and further debts of the pledgor, unless with his consent. This consent may be express, or implied from words or circumstances which show that such was the understanding of the parties.

FORMS ANNEXED TO THIS CHAPTER.

(71.) A mortgage of personal property.

(72.) A mortgage of personal property, with warranty.

(73.) A mortgage of personal property, with a power of sale.

(74.) A mortgage of personal property, with a power of sale. Another form.

(71.)

A MORTGAGE OF PERSONAL PROPERTY.

KNOW ALL MEN BY THESE PRESENTS, That I (name of mortgagor), of the town of

county of

and State of

for and dollars, to me in hand paid by (name of county of and State

in consideration of mortgagee), of the town of aforesaid, do sell and convey to the said (name of mortgagee) the following goods and chattels, to wit (list or schedule of the articles, specifying them with sufficient distinctness to make it certain what they are), warranted free of incumbrance, and against any adverse claims: Upon condition, that if the said (name of the mortgayor) pay to the said (name of the mortgagee) dollars and interest, in

year agreeably to a promissory note of this date, for that sum, payable to the said (name of mortgagee), or order, on demand, with interest, this deed shall be void; otherwise, in full force and effect.

THE AFORESAID PARTIES AGREE, That, until the condition of this instrument is broken, the said property may remain in possession of the said (name of mortgagor), but after condition broken the said (name of mortgagee) may at his pleasure take and remove the same, and may enter into any building or premises of the said (name of the mortgagor) for that purpose.

WITNESS our hands and seals, this

day of
(Signature of mortgagor.)
(Signature of mortgagee.)

A.D. 18

(Seal.)

(Seal.)

hundred and

before me, the undersigned, notary public in and for said county and State, duly commissioned and qualified, came who is known to me to be the same person whose name is subscribed to the foregoing instrument of writing, as party thereto, and he acknowledged the same to be his act and deed, for the purpose therein mentioned.

IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my `official seal, at my office, in the city of the day and year last aforesaid.

(72.)

Notary Public.

A MORTGAGE OF PERSONAL PROPERTY, WITH WARRANTY.

KNOW ALL MEN BY THESE PRESENTS, That I (name and residence of mortgagor), in consideration of the sum of to me in hand paid

by (name and residence of mortgagee), the receipt whereof is hereby acknowledged, have granted, bargained, and sold, and by these presents do grant, bargain, and sell, unto the said (name of mortgagee), the following articles of personal property; that is to say (list or schedule, as in Form 71).

TO HAVE AND TO HOLD all and singular the said goods and chattels unto the said (name of the mortgagee), and his executors, administrators, and assigns, to his and their use for ever. And I, the said mortgagor, for myself and for my executors and administrators, do covenant to and with the said mortgagee, and with his executors, administrators, and assigns, that I am lawfully possessed of the said goods and chattels, as of my own property; that the same are free from all incumbrances, and that I will, and my executors and administrators shall, warrant and defend the same to the said mortgagee, his executors, administrators, and assigns, against the lawful claims and demands of all persons.

PROVIDED, NEVERTHELESS, That if the said mortgagor, his executors or administrators, shall well and truly pay unto the said mortgagee, his executors, administrators, or assigns, the sum of dollars, in

months from the date hereof (or on a certain day, stating the day when the