—
Bankers and Banking.
638 Sect. 18.
Securities for
Advances.
payment by the company before
of title.
is
good as against the
The mere deposit
of a policy as cover gives the banker the an equitable mortgagee (^). Where a policy has been so deposited, even without a memorandum, and the depositor becomes bankrupt, his trustee cannot claim it without satisfying the debt to the banker (h).
rights of
Sub -Sect. Advances on documents
notice
assignee (/).
1287. of title to
7.
Documents of Title
to
Goods.
A banker may advance money on the security of goods
(i)
documents
otherwise than by the acceptance of documentary
bills (k).
customer be the real owner of the goods and entitled documents he pledges, the transaction amounts to hypothe-
If his
Pledge.
to the
goods, with the resulting rights of a pledgee (l). Neither goods nor documents of title thereto (m) being negotiable, the banker's title at common law must depend on that of the pledgor. In cases, however, of defective title in the borrower, a large measure of statutory protection is accorded to the banker, subject to certain conditions (n). In order to entitle the banker to such protection the goods or documents of title thereto must be in the possession of an unpaid vendor, a vendee who has not paid for them, or a " mercantile agent" within the broad definition affixed to that term by the legislation in question (o). Moreover, the goods or the documents of title must have originally remained in or come into the possession of the person with whom the banker is dealing with the consent The fact that such possession and consent of the real owner (j^). have been obtained by fraud is immaterial (q). But where the fraud amounts to larceny by a trick, different considerations would seem to apply (?•). In the case of a mercantile agent a pledge of
cation of the
Where
title
defective.
Protection to banker.
(/) Policies of Assurance Act, 1867 (30 & 31 Vict. c. 144), s. 3. For forms of mortL^age of such policies, see Encyclopsedia of Fornis^ Vol. VIII., pp. 681 et seq. See title Mortgage. (g) Spencer v. Clark (1878), 9 Ch. D. 137. (h) Re Wallis, [1902] 1 K. B. 719. {i) For forms of memorandum of deposit, see Encyclopaedia of Forms, Vol. pp.
II.,
479—484.
{k) {I)
See p. 624, ante. See title Pawnbrokers
and Pledges.
(m) With the possible exception of bills of lading, see Lickharrow v. Mason (1794), " The words of the special verdict in Lickharrow v. Mason 5 Term Eep. 683. admittedly overstate the law " (Burdick v. Sewell (1884), 13 Q. B. D. 159,. per BowEN, L.J., at p. 173). See Sewell v. Burdick (1884), 10 App. Cas., per Lord Blackburn, at p. 98. If fully negotiable there would have been no reason for including bills of lading with other documents of title in the Factors Act, 1889, and the Sale of Goods Act, 1893, whereas they are so included. See further on this point title SmppiNG and Navigation. (n) Factors Act, 1889 (52 & 53 Vict. c. 45) ; Sale of Goods Act, 1893 (56 & 57 Vict. (o)
c.
71).
Factors Act, 1889 (52
(p) Hid. 643, 658. (q) Ibid. (r) Ibid., '2
K. B.
Cahn
&
53 Vict.
v. Pockett's Bristol
per Collins, L. J., at p. 659
50, per
c.
45),
s.
1.
Channel Steam Backet
Oppenheimer
Fletcher Moulton and Kennedy,
v.
Co.,
[1899]
1
Q. B.
Frazer and Wyatt, [1907]
L, JJ., at pp. 70, 77, though
