and upon a valuable advance, is preferred, although the pledgee receiving the second of the series has advanced value thereon, in good faith, without notice of the previous hypothecation.' Nor is the pledgee who is prior in time, having both the right of property and possession required to give notice to the shipowner of his title and right to possession, but may, if the goods are obtained and sold upon another of the set of bills of lading negotiated subsequently to his own, bring an action against the second pledgee, either for the proceeds of the goods as for money had and received for his use, waiving the tort, or for a wrongful conversion." The tender of one of a set of three bills of lading, duly indorsed, is an effectual tender of the goods, although the others be not produced. Where, by the terms of the contract, payment is to be made of bills of exchange upon delivery of bills of lading attached as collateral security, upon presentation, the purchaser who refuses to accept and pay, upon the presentation of a duly indorsed bill of lading, does so at his own risk as to whether it may turn out to be the fact or not that the bill of lading tendered was an effectual one, or whether there was another of the set which had been so dealt with as to defeat the title of the purchaser as indorsee of the one tendered." 1 Barber v. Meyerstein, L. R. 4 H. L. 337; The Thames, 14 Wall. 98. In which cases the respective pledgees received two of the set of three bills of lading, believing the "ship's bill" to be in possession of the master, but delivery was in fact obtained upon the third bill. The first two of the set were delivered in Skilling v. Bollman, 73 Mo. 665; but one was stolen by a partner of the firm, and negotiated, and the contest was as to priority. The court approves the rule of Meyerstein v. Barber. In Glyn v. E. & W. India Docks Co. L. R. 7 App. 605, the English House of Lords, while re fusing to sustain an action of trover by a pledgee of the "first" of a set of bills of lading as against a shipowner or wharfinger delivering to the consignee on the "second," unindorsed, say (Blackburn, Lord) that "so far as the decision in Barber v. Meyerstein extends, the law must be taken to be settled," and another law lord (Fitzgerald) said there was no intention "to modify or depart from" the decision mentioned. 2 Barber . Meyerstein, and The Thames, supra. Sanders v. Maclean, L. R. 11 Q. B. D. 327. In the Court of Appeal of the Queen's Bench (Bowen, L. CHAPTER XLIX. THE PLEDGEE'S RIGHTS, UNDER ESTOPPEL. $397. Estoppel as applied to bills of lading negotiable or quasi-negotiable. 398. Estoppel of owner, where third person holds bill indorsed. 399. The pledge of void or fraudulent bills of lading. 406. The pledgee a holder for value, as against unpaid vendor. § 397.-ESTOPPEL AS APPLIED TO BILLS OF LADING NEGOTIABLE, OR QUASI- NEGOTIABLE.-In countries and states where bills of lading are made negotiable by statute, they are in the hands of third persons loaning money upon them in good faith, without notice, as free of antecedent equities as bills of exchange or negotiable promissory notes. The holder of an indorsed bill of lading, where negotiable, may, in the course of commercial dealing, transfer a greater right than he himself has, the exception being founded on the negotiable character of the document. It is confined to the cases where the person who transfers the right is himself in J.), referring to the rule that the first indorsee of bills is entitled to the property, as against everybody but the shipowner, said: "People who lend money upon or who purchase bills of lading can make their own terms. Whether they will trust to the current bills of lading produced in any case is a matter for themselves, and one upon which they probably would be guided by their faith in or distrust of their customer. But I do not believe that such suspicion, when it exists, is the natural or necessary consequence of the presentation of the two bills without the third." actual and authorized possession of the document, and the transferee gives value on the face of it, without having notice of any circumstances which would render the transaction neither fair nor honest. In such case, one of two innocent parties must suffer by the act of a third; and it is reasonable that he who, by misplaced confidence, has enabled such third person to occasion the loss, should sustain it.' The rules of equitable estoppel are applied in favor of pledgees of bills of lading indorsed who have advanced money on bills sent by the vendor to the vendee and consignee, as against the right of stoppage in transitu of the unpaid vendor, if at the time of making the advance the pledgee is without notice of any cause upon which such right might arise.2 The rules of equitable estoppel are applied in cases where bills of lading, while not negotiable, are quasinegotiable, under indorsement for value. A transfer of a bill of lading, by indorsement where required or by delivery, vests the legal title to the property and the right to possession in a pledgee for value advanced in good faith, without notice of equities. The pledgee may rely upon the possession and apparent ownership of a holder of a bill of lading, where the same is received in the usual course of business. As where a vendor has allowed a vendee to assume possession and apparent ownership of bills of lading, so as to be able to deal with them as his own, third persons may rely upon such possession and apparent ownership of the indicia of title. The vendor is estopped to dispute such title as against persons innocently making advances in the belief that the apparent title is the real title and the ownership 1 Rodger v. Comptoir D'Escompte, L. R. 2 Pr. C. 393, 405 (Sir Joseph Napier); The Argentina, L. R. 1 A. and E. 370; Gurney v. Behrend, 3 El. and Bl. 622; Lickbarrow v. Mason, 2 Term, 70. 2 Spalding v. Ruding, 6 Beav. 376; In re Westzinthus, 5 B. & Ad. 817; Berndtson . Strang, L. R. 4 Eq. 486; on app. L. R. 4 Ch. 588; Coventry v. Gladstone, L. R. 6 Eq. 44; ex parte Golding, L. R. 13 Ch. D. 624; Kemp v. Falk, L. R. 14 Ch. D. 446; on app. L. R. 7 App. 573. absolute. No secret agreement between a vendor and vendee in relation to the obtaining and use of bills of lading can affect the title of a bona fide pledgee, who has made an advance of money upon such bills of lading, without notice.' The rules of equitable estoppel applied in cases where the bill of lading is negotiable, is also invoked in favor of the innocent pledgee for value, where the bill of lading is rather quasi-negotiable than actually so, that where one of two innocent parties must suffer from the wrongful acts of a third person, the law casts the burden or loss upon him by whose act, omission, or neglect, such third party was enabled to do the wrong, or occasion the loss.* § 398.-ESTOPPEL OF OWNER, WHERE THIRD PERSON HOLDS BILL INDORSED.-The owner of property, represented by a bill of lading, may, by his affirmative acts or neglects, in and about such bill of lading, estop himself to set up any defenses or equities as against an innocent holder. for value. Where a bill of lading is delivered indorsed by the owner to a third person so as to vest the legal title and apparent ownership in the holder, and an innocent pledgee is deceived into advancing money upon the faith and credit of such title and apparent ownership, and a loss results, it is placed upon the owner who, with mistaken confidence, has placed an indorsed bill of lading in the hands of another, thus enabling the latter to deal with it as if he were the 1 Dows v. Kidder, 84 N. Y. 121; Saltus v. Everett, 20 Wend. 267; Fleeman v. McKean, 25 Barb. 474; Beavers v. Lane, 6 Duer, 238; Smith v. Lynes, 5 N. Y. 41; Crocker v. Crocker, 31 Ib. 507; Wait v. Green, 36 Ib. 556; Paddon v. Taylor, 44 Ib. 371; Rawles v. Deshler, 42 N. Y. 572; Comper v. Coningham, 77 Ib. 391. Western Union R. R. Co. v. Wagner, 65 Ill. 197; Wait v. Greene, 35 N. Y. 556; Wyne v. Macdonald, 39 Ib. 233. 8 Savings Bank v. Railroad Co. 20 Kan. 519; In re Brown, 1 Biss. 76; Bradstreet v. Heran, 2 Blatchf. 116; Michael v. Ware, 3 Neb. 229; Relyea v. N. H. Railway Co. 42 Conn. 579; Armour . Michigan Cent. R.R. Co. 65 N. Y. 111; Rowles v. Deshler, 42 Ib. 572; Carr v. London Ry. Co. L. R. 10 C. P. 307; Lickbarrow v. Mason, 2 Term, 63. actual owner.' The title of a bona fide pledgee for value, without notice, of a bill of lading, was recognized in the case of the Farmers and Mechanics' Bank v. Hazeltine, in the New York Court of Appeals,' arising out of the frauds committed by an agent named Brown, and in which, and in other cases, the rights of pledgees as against persons dealing in an unauthorized manner with property shipped under bills of lading bearing restrictive indorsements, were adjudicated. In all of these cases, the court (Andrews, J.) say: "The court did not question the well established doctrine that a general indorsement and delivery of a bill of lading vests in the indorsee the title to the bill, and the property thereby represented, so as to enable him to transfer to a bona fide purchaser, for value, a good title, whatever secret arrangement may have existed between the original parties;" and that if the delivery under the bill of lading had "vested the title to the property in Brown, and the trust contained in the instrument was a trust affecting the proceeds to be realized from a sale, then, upon well-settled principles, a bona fide purchaser from Brown would acquire a good title which would not be divested or disturbed by a misappropriation by Brown of the proceeds of the sale in contravention of the trust.” The possession of property by a broker or agent, upon which is obtained from the carrier when shipping the goods to his principal, a bill of lading deliverable to his own order, enables such broker or agent to bind the owner by a transfer of the bill of lading to a pledgee to secure an advance, when made on the faith of such indicia of title, and without notice of equities, as that the principal had already paid for the goods, or that the indorsement and transfer of the bill of lading was procured by a fraudulent misrepresentation. The rights of bona fide pledgees of bills of lading 1 Gurney v. Behrend, 3 El. & Bl. 622; The Argentina, L. R. 1 A. & E. 370. 8 78 N. Y. 104, 108. Henry v. Philadelphia Warehouse Co. 81 Pa. St. 76. Dows v. Greene, 24 N. Y. 638. |