1828. SLATER v. WEST. 3 Inst. 713. of Gill v. Cubitt was, as Lord Tenterden justly remarked, widely different from the present: there, at an early hour in the morning, a bill was discounted for a person, whose name was unknown, without a single question being asked. That is not, or, at least, ought not to be, the usual course of any man's dealing; but to assimilate the present transaction to that case would be absurd. Lord Tenterden is anxious, and most rightly so, not to give a facility to the disposal of lost or stolen property so easily obtained, and, in general, so convertible into cash as these negotiable instruments; but it may be doubted whether a few verdicts like this would not oppose great impediments to the circulation of paper; a result which, in the present state of credit, is by no means desirable. Again, there is one disadvantage (as some evil seems inseparable from every change) in unsettling the principle which once obtained, that a holder for valuable consideration was entitled to recover, even though he had acquired the instrument from one who had obtained it dishonestly, so long as he was himself a stranger to that dishonesty (a); and the disadvantage is this, that for a fixed rule, known to every one, there is substituted an uncertain one, varying according to the opinion of successive juries, whose views and means of information may be very different. Still, though it may be well to guard and limit a little more closely the application of it, the modern doctrine has not been introduced without good reason, and is consonant with that wise and ancient regulation of our law, which, on the one hand, for the encouragement of trade declares, that possession is prima facie evidence of ownership, and that when goods are sold in open day, and in open market, for a fair price, the buyer shall keep them even against the lawful owner, from whom they may have been stolen; and, on the other hand, for the prevention of theft, does not allow property to be transferred by sales conducted in a clandestine manner, and under suspicious cir cumstances. (a) Lawson v. Weston, 4 Esp. 56., and see Burr. 452. 1516., and Doug. 611. October 1826, pledged E. I. warrants with a banker as a security. A substitution of new bills for old took place between the factor and banker after the 1st Octo ber, and the TROVER for East India warrants. This was one of A factor, beseveral actions, arising out of the bankruptcy of Fennel fore the 1st and Son, extensive brokers in London. They had been employed as factors by the plaintiffs, who carried on business at Perth. In 1825 consignments of East India produce were made, on behalf of the plaintiffs to Fennel and Son, who obtained thereon, in the usual course, the warrants, which were the subject of the present action. These warrants do not, upon the face of them, contain any notification who is the real owner of the goods. The defendants (Messrs. Willis and Co.) were the bankers of Fennel and Son, who, having over-drawn their account, deposited at various times, in the months of October, November, and December, 1825, the warrants question, among others, as a collateral security. On the 14th October 1826, a bill for 10,000l., on which Fennel and Son were liable to the bankers, becoming due, and they being unable to take it up, another bill was drawn for the same amount, discounted by the bankers, and placed to the credit of Fennel and Son, who were debited with the bill due. (a) The defendants in (a) It is a general practice with bankers, when a customer has over-drawn his account, to take his promissory note or bill. This they discount with the usual premium, but instead of paying over the cash, they merely place it to his credit in account. When the bill or note is due, the same operation is repeated. The customer has credit for the cash (deducting discount) upon the new note or bill, and is debited with the one due. latter claimed to retain the warrants as a security for a bill of 10,000%. then discount ed for the fac tor, the cash being placed to the account of the factor: Held, that this transaction was not within section of the G. 4. c. 94., the second 6 which came into operation on the 1st October 1826. 1828. Ross บ. WILLIS. claimed to retain the warrants for this sum, and on the trial at Guildhall, before Lord Tenterden, at the sittings before Easter term, several points were raised by the Solicitor-General on behalf of the defendants, of which the only material one was the following. It was contended that this case fell within the operation of the second section of the factor's act (6 G. 4. c. 94. s. 2.) (a), and that the defendants, therefore, had a lien upon the warrants. This clause of the act came into operation on the 1st October 1826, and Lord Tenterden being of opinion that the pledge here was made before that day, and that the subsequent transactions between Fennel and Son and the defendants were merely a continuation of former securities, the plaintiffs recovered a verdict. The Solicitor-General now moved for a new trial, on the same ground as that taken at Nisi Prius, and contended, that the words of the second section of the act applied to a trust and a possession existing on or after the 1st October 1826, no matter when originally commencing. Secondly, that actual manual possession was not necessary, and that, as between principal and factor, the possession of the bankers was constructively the possession of the factors. That there was, therefore, in this case a possession of the warrants by the factors, and a possession after the 1st October. That the pledging also took place after this date, for on the 14th October (a) By this section it is in substance enacted, that from and after the 1st October 1826, any person intrusted with and in possession of any bill of lading, or other document for the delivery of goods, shall be deemed to be the true owner of the goods described in the several documents, so far as to give validity to any contract entered into by the person so possessed, for the sale or deposit of the said goods, or any part thereof, as a security for money advanced upon the faith of such said several documents: provided that the pledgee has not notice by such documents or otherwise, that the person pledging is not the actual bona fide owner of the goods. 1826, the bankers advanced the factors 10,000l., and it was for this advance that the warrants were taken as a security. There could be no doubt that if the bankers had at that time delivered up the warrants to the factors, and they had immediately handed them back, such a case would have been within the very letter of the statute; then this mere form and machinery was all that was wanting here, and the Court ought to give effect to the spirit of the act, and hold this transaction to be protected by it. BAYLEY J. It seems to me that Messrs. Willis and Co. are not entitled to retain these warrants under the 6 G. 4. It appears from the words of the second section, that the party pledging must have the goods in his possession on or after the 1st October 1826. Here the factors have not possession of them at that time. They had been pledged long before with Messrs. Willis and Co. as a security for advances made by them for the factors. In the first place, then, the party cannot be deemed to have had, on or after the 1st October, such a possession as is required by the act. In the second place, there is no new pledging after that date. It is true there was a bill discounted by the bankers for Fennel and Son on the 14th October; but this was merely a substitution of new paper for the old in respect of a transaction which commenced the year before. If the bankers had then or before given up the actual and unconditional possession of the warrants to the factors, and they had been again pledged, there would be something in the argument; but this was not done, and it is an attempt, therefore, to make the act available for a pledge made before it came into operation. HOLROYD J. I look upon the transaction on the 14th October as a mere renewal of the former securities. 1828. *Ross WILLIS. 1828. Ross v. WILLIS. LITTLEDALE J. concurred. Lord TENTERDEN. I do not consider what was done with respect to this bill a new agreement. It seems from the language of Lord Tenterden that, even if the pledging had taken place after the 1st, which was the case put by the Solicitor-General, yet, as it would have been in security, not for advances subsequently made, but for a pre-existing debt, the case would still not have fallen within this clause. He considered the transaction on the 14th October, not as the creation of a new debt, but the mere substitution of effectual securities in the place of those which were defunct. The following Case, upon the same statute, was tried at the sittings after Easter term, before BEST Ch. J. at GUILDHALL. BLANDY V. Allan. Where a fac- TROVER for ten pipes of wine. tor, under acceptances for his principal, which were provided for by the latter before they became due, pledged docu The facts as they appeared in evidence were these: the plaintiff, a merchant residing in Madeira, had been in the habit of sending wines to this country for sale, and had employed one Mitchell as his factor to dispose of them. The transactions between the plaintiff and Mitchell were considerable, the plaintiff drawing bills upon Mitchell, and remitting him bills from Madeira to meet his acceptances on plaintiff's account. In the ing to his principal, as a month of January 1826, Mitchell was in possession of security for advances: Held, that the pledgee had no right, under the second section of 4 G. 4. c. 83. and the fifth section of 6 G. 4. c. 94., to retain them against the owner. ments for the" delivery of goods belong |