Boron v. BANK or oomumnom. 58
Boron and another 1:. BANK or Uommmnom
(Circuit 0'ourt, El D. llhssouri. November 1, 1884.)
CoNs1eNon AND Conszsusm-Pumas
Where a consignor draws a sight draft upon his consignee before the latter
has sold the goods consigned, a pledge by the consignee of the consignment, to
secure a loan with which to meet the draft is valid. ,
At Law.
Wm. S. Bodley and J. R. McMahon, for plaintiffs.
Phillips d} Stewart, for defendant.
TREAT, J. This is a suit as for conversion by defendant of plain-
tiiTs’ property. The facts are, substantially,`that there had been busi-
ness relations between James Boyce, one of the plaintiffs, and Catch-
ings & Co. Thereafter the Erm of James Boyce & Co. was estab-
lished. In the course of their dealings shipments were made by the
copartnership (plaintiffs) to said Catchings & Co., and sight drafts
drawn upon them. Catchings & Co., not having in their hands funds
belonging to the plaintiffs to meet said drafts, arranged with the de-
» fendant to secure funds suflicient therefor, pledging as collateral con- A
signed goods in their hands. V V
The controlling question is as to said pledge, collateralto the obli-
gations on which the defendant advanced the amount of the drafts.
The doctrine that a factor cannot pledge for his private debts goods
consigned to him, is well established. But when, in the course of
dealings between consignorand consignee, drafts are drawn, as in
this case, at sight, no funds being in the hands of the consignee to
meet the same, and he causes, in the ordinary course of commer-
cial business, said drafts to be protected by pledge of the consigned
goods, is such pledge invalid? Ordinarily, the bank discounting is
not supposed to know the state of accounts between drawer and
drawee, therefore may require collaterals. If those collaterals con-
sist of property directly involved in one accounting between consignor
and consignee, the discounting bank ought not to be held by the final
determination of the accounts; yet, if it knew that there were ample
funds in the hands of the consignee and drawee to meet the sight
drafts, it may be that said bank would not be entitled to receive and
hold the collaterals as against the consignor.
But the evidence discloses an entirely different condition of accounts
between consignor and consignee, and the bank itself knew nothing
thereof. The case, simply stated, is this: The plaintiffs drew sight
drafts against their consignee, the consigned property not having
been sold in the intermediate time. To protect said drafts the con- .
signees negotiated therefor with the defendant bank. That was a
valid pledge. The tender by plaintiffs to the bank of costs and
1 Reported by Benj. F. Rex, Esq., of the St. Louis har.