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taken to be respectively pledges of, and liens upon, the goods to which the same relate (8).

When agent to be deemed to be possessed.

Such agent is to be deemed to be possessed of such goods or documents, whether the same are in his actual custody or held by any other person on his behalf (†).

What to be deemed a loan or advance.

Where any loan or advance is bond fide made to any agent intrusted with and in possession of any such goods or documents of title as aforesaid, on the faith of any contract or agreement in writing to consign, deposit, transfer, or deliver such goods or documents of title as aforesaid; and the same are actually received by the person making such loan or advance, without notice that such agent was not authorised to make such pledge or security; every such loan or advance is to be deemed and taken to be a loan or advance on the security of such goods or documents of title, within the meaning of this Act; though such goods or documents of title be not actually received by the person making such loan or advance till the period subsequent thereto; and any contract, whether made direct with such agent as aforesaid, or with any clerk or other person on his behalf, is to be deemed a contract with such agent; and any payment made, whether by money, or bills of exchange, or other negotiable security, is to (t) Same section.

(s) Same section.

be deemed and taken to be an advance within the meaning of the Act (u).

Possession by agent prima facie evidence of
intrusting.

An agent in possession as aforesaid of such goods or documents shall be taken, for the purposes of the Act, to have been intrusted therewith by the owner thereof, unless the contrary can be shown in evidence (x).

Owner's right to redeem before sale, or to recover
balance of proceeds.

Nothing contained in the Act is to deprive the owner of his right to redeem such goods or documents of title pledged as aforesaid, at any time before such goods are sold; upon repayment of the lien, or restoration of the securities, and upon payment to such agent, if by him required, of any lawful lien due to him as against such owner; or to prevent such owner from recovering from such person with whom any such goods or documents may have been pledged, or who shall have any such lien thereon as aforesaid, any balance remaining in his hands as the produce of the sale of such goods, after deducting the amount of the lien of such person under such contract as aforesaid (y).

(u) Same section; and see Taylor v. Kymer, Learoyd v. Robinson, supra.

(x) Same section; and see Sheppard v. Union Bank of London, Hayman v. Flewker, Fuentis v. Montis, supra,

(y) 5 & 6 Vic. c. 39, s. 7.

Bankruptcy of agent.

In case of the bankruptcy of any such agent, the owner of the goods so redeemed shall, in respect of the sum paid by him on account of such agent for such redemption, be held to have paid the same for the use of such agent before his bankruptcy; or in case the goods shall not be redeemed, the owner shall be deemed a creditor of such agent, for the value of the goods so pledged at the time of the pledge, and shall, if he think fit, be entitled in either of such cases to prove for or set off the sum so paid, or the value of such goods, as the case may be (2).

Owner's right to stop in transitu, how far affected by pledge of the goods.

If a bill of lading be pledged by the consignee (a) of the goods as a security for his own debt, the legal right to the possession of the goods passes to the pledgee; but the owner's right to stop them in transitu, in the event of the consignee becoming insolvent, is not thereby entirely defeated, as in the case of a sale of the bill of lading by the consignee; for the vendor may still resume his interest in them, subject to the rights of the pledgee; and will have a right, at least in equity, to the residue which may remain, after satisfying the pledgee's claim. And if the goods comprised within the bill of lading be pledged along with other goods belonging to the pledgor himself, the vendor will have a right in equity

(2) 5 & 6 Vict. c. 39, s. 7.

(a) All rights under bills of lading vest in the consignee or indorsee. See the Bills of Lading Act, 18 & 19 Vict. c. 111, s. 1.

to have all the pledgor's own goods appropriated to the discharge of the pledgee's claim, before any of the goods comprised within the bill of lading are so appropriated. This was decided in Re Westzinthus (b), where Lappage and Co., having purchased oil from the plaintiff (Westzinthus), paid for it by acceptance, and being in possession of the bills of lading, pledged them with Hardman and Co. as a security for certain advances. Lappage and Co. became bankrupt, and their acceptance in the plaintiff's favour was dishonoured. At the time of their bankruptcy they owed Hardman and Co. 9271/. on account of advances; as a security for which they held, besides the bill of lading, goods to the value of 99611., belonging to Lappage himself. The court held that, Hardman's right of possession of the oil being in the nature of a pledge only, Westzinthus, who had upon the bankruptcy of Lappage and Co., given notice to the master of the ship that he claimed to stop the oil in transitu, had a right in equity to insist upon the proceeds of Lappage's own goods being appropriated to the discharge of Hardman's lien; and as they proved sufficient to satisfy it, Westzinthus had a right to receive the entire proceeds of his oils (c).

The pledgee cannot, as against the consignor, retain the goods for a general balance of account due from the factor.

The decision in the preceding case is confirmed by a

(b) 5 B. & Adol. 817.1

(c) Ibid.; and see 1 Smith's L. C. 766 (6th ed.).

subsequent one, which shows that the goods cannot be retained as security for a general balance of account, but only for the specific advance made upon the security of the bill of lading. A. consigned goods of the value of 1800l. to B., who transferred the bill of lading to C. to secure 10007. B. having become bankrupt, C., as B.'s factor, claimed as against A.'s title to stop in transitu, a right to retain the whole in satisfaction of a general balance due to him from B.: but it was held, that he was not entitled beyond the 1000l., and that A.'s remedy against C. for the surplus was in equity (d).

A valid pledge of a bill of lading cannot be defeated by a subsequent fraudulent pledge of the goods.

And where cotton was shipped in India for London the master signed three parts of a bill of lading, which the consignor deposited with certain bankers as a security for an advance. The consignee entered the cotton for delivery at a sufferance wharf, and it was there delivered, subject to stoppage for freight. The plaintiff advanced money on security of the cotton (which he did not know had arrived) to the consignee, who thereupon obtained the three parts of the bill of lading from the bankers, but delivered only two to the plaintiff; and afterwards fraudulently deposited the third with the defendants, for another advance. The defendants obtained possession of the cotton; whereupon the plaintiff brought his action ;

(d) Spalding v. Ruding, 6 Beav. 376. See Jones v. Peppercorne, 28

L. J. Ch. 158.

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