492; Klimpeter v. Harrigan, 21 La. Änn. 196; Fuller v. Bean, 34 N. H. 290; Flagg v. Mann, 2 Sumn. (U. S.) 486; Eldridge v. Kuehl, 27 Iowa 160; Wittowsky v. Wasson, 71 N. Car. 451; Clay v. Creditors, 4 Mart. (La.) 644; Benjamin on Sales §1; Bouv. Law Dict.

Some confusion between these transactions has arisen and the cases are here given.

The delivery of personal property by a debtor to his creditor, in order that the latter may "sell the same and apply the proceeds to the payment of a pre-existing debt," is a pledge, and not a sale of the property to the creditor. Harris v. Lombard, 60 Miss. 29. - A note of a third person formerly double the amount of the sum borrowed, is transferred "as collateral security" with the condition that in case of default "B is to hold the note as his own property" is deemed pledge and not a sale. Williamson v. Culpepper, 16 Ala. 211.

a

Where a tenant placed a lot of corn in the hands of the administrator of

his landlord, as security for the pay ment of rent due, held, the legal status was that of pledged property; and the mere fact that the pledgor had the right to determine the time when the corn should be sold did not affect the legal character of the contract. Belden v. Perkins, 78 Ill. 449.

See also for doubtful cases: Rohrle v. Stidger, 50 Cal. 207; Wilkie v. Day, 141 Mass. 68; Fairbanks v. Sargent, 117 N. Y. 320; Sperry v. Clarke, 76 Iowa 503; Barry v. Čoville, 53 Hun (N. Y.) 620; Beidler v. Crane (Ill. 1889), 19 N. E. Rep. 714; Houser v. Kemp, 3 Pa. St. 208; Leblanc v. Bouchereau, 16 La. Ann. 11; Taggart v. Packard, 39 Vt. 628; Morgan v. Dod, 3 Colo. 553; Hart v. Burton, 7 J. J. Marsh. (Ky.) 322; Hines v. Strong, 46 How. Pr. (N. Y.) 97; Partee 7. Bedford, 51 Miss. 84; Comstock v. Smith, 23 Me. 202; Wood v. Matthews, 73 Mo. 477; Marshall v. Williams, 2 Hayw. (N. Car.) 405; Hyde v. Nick, 5 Leigh (Va.) 336; Peck v. Merrill, 26 Vt. 686.

A trust deed to personal property accompanied by possession, the owner having the right to redeem, is a pledge. Hudson v. Wilkinson, 45 Tex. 444.

Where the complainant feme covert, unconditionally assigned a mortgage to the defendant and delivered it to her husband, who delivered it to defendant,

and defendant gave a receipt to the husband stating that he received the mortgage as collateral security for debt owed by the husband to him, and there was no evidence of any transaction or understanding relative to said mortgage between said complainant and defendant, or that the transfer was merely as security and conditional, it was held, that upon these facts the court cannot say that the assignment was only meant as security and not as an absolute transfer to defendant. Durfee v. McClurg, 6 Mich. 223.

Where stocks and bonds are assigned to a trustee by a written instrument which contains power to sell at discretion, and requires him to dispose of enough to discharge a note due to a third person if the interest thereon is not promptly paid, the transaction does not constitute a pledge. Murdock v. Columbus Ins. etc. Co., 59 Miss. 152. The court decided this case on the ground that it was not a mere pledge, but a transfer in trust to a third person other than the creditor, with a power to sell and pay certan debts. It was distinguished from the cases of Nabring v. Bank of Mobile, 58 Ala. 204, and Wilson v. Little, 2 N. Y. 443, on the ground that the transfer in these cases was made to the creditor, and from Brewster v. Hartley, 37 Cal. 15, on the ground that the transferee in that case, although called a trustee, was a mere agent of the creditors, and the delivery of the property to him was the same as a delivery to the creditors.

137

that

In Com. v. Reading Sav. Bank, Mass. 431, it was held, an assignment of a mortgage by a savings bank for a price paid was a sale, and not a pledge, even though the transfer was made with the condition attached, that the transferee should re-assign upon repayment to him of the price paid.

In Reeves v. Sebern, 16 Iowa 234, it was held that a sale of goods for a certain sum, with a further agreement that if when sold, more than such sum should be realized, the excess, after deducting the expenses of the sale, should be credited to the vendors, was a sale and not a pledge.

See also, Brown v. Bank, 41 Ohio St. 445; Pomez v. Camors, 36 La. Ann. 464; Milliken v. Dehon, 27 N. Y. 364.

A Bill of Sale and Receipted Bills of Parcels. When intended as security and accompanied by delivery, these are held pledges. Walker v. Staples,

Delivery of savings bank book will carry the deposit. Boynton v. Payrow, 67 Me. 587.

Delivery of a bill of lading, of a warehouse receipt or wharfingers receipt will deliver the goods represented by such instruments. Dows v. National Exch. Bank, 91 U. S. 618; Michigan Cent. R. Co. v. Phillip, 60 Ill. 190; First Nat. Bank v. Kelly, 57 N. Y. 34; West Union R. Co. v. Wagner, 65 Ill. 197; Cartwright v. Wilmerding, 24 N. Y. 521; Burton v. Curyea, 40 Ill. 325; Osborn v. Koenigheim, 57 Tex. 91; Newcomb 7. Cabell, 10 Bush (Ky.) 460; First Nat. Bank v. Bates, 1 Fed. Rep. 702; Freiburg v. Dryfus, 135 U. S. 478; Harris v. Bradley, 2 Dill (U. S.) 285; Whitney v. Tibbits, 17 Wis. 369; McNeil v. Hill, 1 Woolw. (U. S.) 96; Petitt v. First Nat. Bank, 4 Bush (Ky.) 334; Hathaway v. Haynes, 124 Mass. 311; Conrad v. Fisher, 37 Mo. App. 352; Brent v. Miller, 81 Ala. 309; Meyerstein v. Barber, L. R. 2 C. P. 38. Of railway receipt, Taylor v. Turner, 87 Ill. 296.

Mere agreement of the parties is not equivalent to actual or symbolic delivery. Russell v. Scudder, 42 Barb. (N. Y.) 31; Caffin v. Karwan, 7 La. Ann. 221.

It has been held that delivery of part of the chattels pledged, is constructive delivery of the whole. Martin v. Reid, 11 C. B., N. S. 750.

Certain stock of a mining corporation was "pooled." F, who was cashier of the D bank, and also a member of the firm of S, M & F was the chief trustee of the combination. R, one of those who "pooled" the stock, was indebted to S, M & F, and pledged his stock to them as collateral; the certificate, which was indorsed by R, remaining in possession of F as trustee of the "pool." He subsequently pledged it, while still in the "pool," to secure an indebtedness to the bank. Held, that both pledges were valid, under Civil Code Dakota § 1759, providing that "the lien of a pledge is dependent on possession, and no pledge is valid until the property pledged is delivered to the pledgee or to a pledgeholder." Van Cise v. Merchants' Nat. Bank (S. Dak. 1887), 33 N. W. Rep. 897.

One of two joint owners of a chattel both being in possession, may pledge his share to the other joint owner, and he by continuing in possession and control has a valid pledge. Thoms v. Southard, 2 Dana (Ky.) 475.

Where certain manufacturers of cloth agreed that one of their workmen should select and hold a certain number of pieces of cloth for the use of their creditors, and this workman, at the requisition of the creditors, selected the pieces and removed them to another room of the factory where he worked and gave notice thereof to one of the manufacturers and to his own attendants, it was held that the creditor had acquired a lien which was valid against an attachment subsequently made on the same goods by another creditor of the manufacturers, and it was not necessary that the goods should be removed from the premises of the manufacturers as long as the special bailee could have legal custody of them, could notify third persons that they were held in pledge and could remove the goods if it should be necessary for the safety of his principal. Sumner v. Hamlet, 12 Pick. (Mass.) 76; and see Thorndike v. Bath, 114 Mass. 116.

Executory Contracts of Pledge.—Until the delivery of the pledge the transaction rests in an executory contract, however strong may be the engagement to deliver it; and the pledgee acquires no right of property in the thing. Story on Bailment, § 297; Cortelyon v. Lansing, 2 Cai. Cas. (N. Y.) 200; Beeman v. Lawton, 37 Me. 543; Portland Bank v. Stubbs, 6 Mass. 422; Tucker v. Buffington, 15 Mass. 477; Gale v. Ward, 14 Mass. 352; First Nat. Bank. v. Nelson, 38 Ga. 391; Walcott v. Keith, 22 N. H. 196; Silverman v. McGrath, 10 Ill. App. 413; Propst v. Roseman, 4 Jones (N. Car.) 130; Succession of D'Meza, 26. La. Ann. 35; Smyth v. Craig, 3 W. & S. (Pa.) 14; Davenport v. City Bank, 9 Paige (N. Y.) 12; Casey v. Cavaroc, 96 Ü. S. 467; Williams v. Gillespie, 30 W. Va. 586; Gittings v. Nelson, 86 Ill. 591.

Though an executory contract of pledge may be good between the parties, Keiser v. Topping, 72 Ill. 226; Tuttle v. Robinson, 78 Ill. 332, it will not be enforced to the injury of other creditors. City F. Ins. Co. v. Olmstead, 33 Conn. 476; Casey v. Cavaroc, 96 U. S. 467.

Subsequent Delivery -A contract of pledge ineffectual for want of delivery may be made valid by subseqent delivery, even against the right of general creditors accruing in the interval between the agreement and delivery pro·

vided, however, that no other special lien has been allowed to attach. Parshall v.Eggert, 54 N. Y. 18, reversing 52 Barb. (N. Y.) 367; Nelson v. Edwards, 40 Barb. (N. Y.) 279.

But if done in contemplation of bankruptcy or insolvency, it is fraudulent and void. Nisbit v. Macon Bank etc. Co., 12 Fed. Rep. 686.

Upon an agreement at the time the advance was made to desposit securities, a subsequent delivery of them is enough to make the pledgee a holder for value upon a present advance. Fenby v. Pritchard, 2 Sandf. (N. Y.) 151.

1. Where part of a quantity of goods is pledged, that portion must be taken out and separated from the rest. Collins v. Buck, 63 Me. 459.

It has been questioned as to whether an undivided share of a chattel can be pledged without giving up possession of the whole. Portland Bank υ. Stubbs, 6 Mass. 425.

2. Delivery may be by agents as well as by their principals. Schouler on Bailments, § 192; Cartwright v. Wilmerding, 24 N. Y. 521.

3. If the property to be pledged is already in the pledgee's possession, no formal delivery is needed. Brown v. Warren, 43 Ñ. H. 430; Parsons v. Overmire, 22 Ill. 58; Providence Thread Co. v. Aldrich, 12 R. I. 77.

The possession of the pledged property may be according to the nature of the subject matter. Wilson

v. Little, 2 N. Y. 443; Donald v. Suckling, 1 L. R., Q. B. 587; Russell v. Scudder, 42 Barb. (N. Y.) 31.

4. Brown v. Warren, 43 N. H. 430; Tibbetts v. Flanders, 18 N. H. 285; McCready v. Haslock, 3 Tenn. Ch. 13; Johnson v. Smith, 11 Humph. (Tenn.) 396; Weens v. Delta Moss Co., 33 La. Ann. 973; Boynton v. Payrow, 67 Me. 587; City Bank v. Perkins, 29 N. Y. 554; Bank of Chenango v. Hyde, 4 Cow. (N. Y.) 567.

Pledgor's employés may be agents for pledgee. Combs v. Tuchelt, 24 Minn. 423; Sumner v. Hamlet, 12 Pick. (Mass.) 76.

One pledgee may hold for himself and other creditors at the same time. Macomber v. Parker, 14 Pick. (Mass.) 497; Danforth v. Denny, 25 N. H. 155.

Statutory Pledge-Holders. In a few States there are statutory provisions enabling the parties to the contract to choose a pledge holder, who, if rewarded cannot exonerate himself and if gratuitous can only do so by giving reasonable notice to his appointors to choose somebody else. If they 'fail to agree he may deposit the pledge with an impartial third person who may receive reasonable compensation for his services. A pledge holder must enforce the rights of pledges unless au thorized to waive them. Jones on Pledges, 34; California Codes and Stats. 1876, § 7993, 7998; Dakota R. Codes, 1877, §§ 1764, 1769 of Civ. Code; Rev. Civ. Code, Louisiana, art. 3162.

Pledgor as Pledgee's Agent.-As to whether the pledgor may be the pledgee's agent to hold where the goods have never left the former's possession, there is some question, but the strongest cases seem to uphold the general rule that delivery is necessary to shut out the rights of third persons. Casey v. Cavaroc, 96 U. S. 467; First Nat. Bank v. Nelson, 38 Ga. 391; Geddes v. Bennett, 6 La. Ann. 516; Schouler on Bailments, § 193.

But see Martin v. Reid, 11 C. B., N. S. 750, where a delivery of part of the goods was held to pledge all the goods enumerated in the instrument of pledge. Donger v. New Orleans, 32 La. Ann. 1250. Also dictum in Johnson Smith, 11 Humph. (Tenn.) 396.

บ.

2.

5. Ceas v. Bramley, 18 Hun (N. Y.) 187; Langdon v. Buell, 9 Wend. (N. Y.) 80; Parshall v. Eggart, 54 N. Y. 18, reversing 52 Barb. (N.Y.) 367; Brownell v. Hawkins, 4 Barb. (N. Y.) 491; Siedenbach v. Riley, 111 N. Y. 560; Taylor v. Perkins, 26 Wend. (N. Y.) 124; Bank of Rochester v. Jones, 4 Den. (N. Y.) 489; Kimball Hildreth, 8 Allen (Mass.) 167; Walker v. Staples, 5 Allen (Mass.) 34; Homes v. Crane, 2 Pick. (Mass.) 607; Bonsey v. Amee, 8 Pick. (Mass.) 236; Gale v. Ward, 14 Mass. 352; Thompson v. Dolliver, 132 Mass. 103; Collins v. Buck, 63 Me. 459; Beeman v. Lawton, 37 Me. 544; Day v. Swift, 48 Me. 368; Eastman v. Avery, 23 Me. 248; Walcott v. Keith, 22 N. H. 196. Colby v. Cressy, 5 N. H. 237; Pinkerv. Manchester R. Co., 42 N.

ton

H. 424; Haven v. Low, 2 N. H. 16; Silverman v. McGrath, 10 Ill. App. 413; Corbett v. Underwood, 83 Ill. 324; Cooper v. Ray, 47 Ill. 53; Keiser v. Topping, 72 Ill. 226; Parsons v. Overmire, 22 Ill. 58.

Owens v. Knisey, 7 Jones (N. Car.) 245; Doak v. State Bank, 6 Ired. (N. Car.) 309; Smith v. Sasser, 4 Jones (N. Car.) 43; Thompson v. Andrews, 8 Jones (N. Car.) 453; Propst v. Roseman, 4 Jones (N. Car.) 130; Crisp v. Miller, 5 Heisk. (Tenn.) 697; Johnson v. Smith, 11 Humph. (Tenn.) 396; Lee v. Bradler, 8 Mart. (La.) 20; Hiligsherg v. Succession, 1 La. Ann. 340; Faltier v. Schroder, 19 La. Ann. 17; Martin v. Creditors, 15 La. Ann. 165; Dirigo Tool Co. v. Woodruff, 41 N. J. Eq. 336; Beekman v. Barber (N. J. 1888), 3 Atl. Rep. 33; Brewster v. Hartley, 37 Cal. 15; Hilliker v. Kuhn, 71 Cal. 214.

First Nat. Bank v. Nelson, 38 Ga. 391; Combs v. Tuchelt, 24 Minn. 423; Seymour v. Colburn, 43 Wis. 67; Nevan v. Roup, 8 Iowa 207; Raper v. Harrison, 37 Kan. 243; Fletcher v. Howard, 2 Aik. (Vt.) 115.

1. Story on Bailments, § 297; Jones on Pledges, 23; Silverman v. Mc

Grath, 10 Ill. App. 413.

2. Ryall v. Rolle, 1 Atk. 165; Citizens' Nat. Bank v. Hooper, 47 Md. 88; Wyeth v. National M. Bank, 132 Mass. 597; Look v. Comstock, 15 Wend. (N. Y.) 244; Fletcher v. Howard, 2 Aik. (Vt.) 115; Shaw v. Wilshire, 65 Me. 485; First Nat. Bank v. Nelson, 38 Ga. 391; Geddes v. Bennett, 6 La. Ann. 516; Collins v. Buck, 63 Me. 459; Arendale v. Morgan, 5 Sneed (Tenn.) 703; Barrett v. Cole, 4 Jones (N. Car.) 40; Smith v. Sasser, 4 Jones (N. Car.) 43 Day v. Swift, 48 Me. 368; Eastman v. Avery, 23 Me. 248; Walcott v. Keith, 22 N. H. 196; Treadwell v. Davis, 34 Cal. 601; Kimball v. Hildreth, 8 Allen (Mass.) 167; Bodenhammer v. Newsom, 5 Jones (N. Car.) 107; Whitaker v. Sumner, 20 Pick. (Mass.) 399; Black v. Bogert, 65 N. Y. 601; Homes v. Crane, 2 Pick. (Mass.) 607; Jarvis v. Rogers, 15 Mass. 389; Sumner v.

Hamlet, 12 Pick. (Mass.) 76; Bonsey v. Amee, 8 Pick. (Mass.) 236; Reeves v. Capper, 5 Bing. N. Cas. 136; Grinnell v. Cook, 3 Hill (N. Y.) 485; Walker v. Staples, 5 Allen (Mass.) 34; Mills v. Stewart, 5 Humph. (Tenn.) 308; Roberts v. Wyatt, 2 Taunt. 268; Johnson v. Stear, 15 C. B. (N. S.) 330; Combs v. Tuchelt, 24 Minn. 423.

Actual possession of negotiable paper is requisite to establish the title of a bona fide holder as against the equities of third persons. Muller v. Pondir, 55 N. Y. 325; affirming 6 Lans. (N. Y.) 472.

Redelivery for pledgor's benefit destroys the lien. Walter v. Staples, Allen (Mass.) 34; Day v. Swift, 48 Me. 368; Colby v. Cressy, 5 N. H. 237; Barrett v. Cole, 4 Jones (N. Car.) 40; Salinas City Bank v. Graves, 79 Ĉal. 192.

3. Story on Bailm., § 299; Hutton v. Arnett, 51 Ill. 198; Hays v. Riddle, I Sandf. (N. Y.) 248; Citizens' Nat. Bank v. Hooper, 47 Md. 88; Cooper v. Ray, 47 Ill. 53; Martin v. Reid, 11 C. B., N. S. 730; Macomber v. Parker, 14 Pick. (Mass.) 497; Thorndike v. Bath, 114 Mass. 116; Walker v. Staples, 5 Allen (Mass.) 34; Palmtag v. Dontrick, 59 Cal. 154; Pier v. Bullis, 48 Wis. 429; Skarratt v. Vaughan, 2 Taunt. 266; Reves v. Capper, 5 Bing. N. Cas. 136.

To the contrary, however, see Bodenhammer v. Newson, 5 Jones (N. Car.) 107.

Held not good against third persons. Way v. Davidson, 12 Gray (Mass.) 465; Smith v. Sasser, 4 Jones (N. Car.) 43; Barrett v. Cole, 4 Jones (N. Car.) 107.

The mere fact that the pledgor assists the pledgee, with or without his knowledge or consent, in taking care of the pledged property, after its delivery, does not necessarily affect the pledgee's rights as against the pledgors' creditors. Hilliker v. Kuhn, 71 Cal. 214.

A pledgee with power to sell the goods and apply the proceeds on the debt does not forfeit his lien by employing