
    CARTER v. ARGUIMBAU.
    
      N. Y. Common Pleas,
    
    
      before Hon. Wm. G. Choate, Referee,
    
    
      March, 1884.
    1. Sale.] Bankers, who have accepted for a merchant a bill of exchange drawn upon them for the price of goods, and taken the bill of lading therefor in their own name, are the owners of the goods until the merchant remits funds to cover their acceptance ; and their right to the goods or their proceeds is not lost as against the merchant or his assignee for the benefit of creditors by their surrendering the bill of lading to the merchant under an agreement that until their advances have been paid he will hold the goods, or their proceeds if sold, “ under lien ” as agent of the bankers.
    2. Pledge!] It seems, that a pledgee • may make the pledgor his agent to hold or sell the goods for the pledgee's benefit.
    Trial before a referee.
    Action to recover goods or their proceeds in the hands ■of an assignee for the benefit of creditors.
    
      The plaintiffs, John W. Carter and others, were bankers, in London; Fabbri & Chauncey were their agents in New York ; Arguimbau, Wallis & Co. were merchants in New York at whose request plaintiffs issued letters of credit to various persons from whom Arguimbau, Wallis. & Co. ordered goods, which were shipped and bills of lading forwarded to the plaintiffs, who accepted drafts for the price thereof. The bills of lading were sent to Fabbri Sc Chauncey, who delivered them to Arguimbau, Wallis &: Co., and took from them the following receipt:
    “ New York, October 30, 1882.
    “ We hereby acknowledge to have received from' Messrs. Fabbri & Chauncey of New York, the shipping-documents of one hundred boxes of raisins per S. S. ‘ Picqua ’ from Malaga to New York, against which Messrs. John W. Carter Sons & Co. have accepted for our account £j2 5s. 6d. sterling, due January 10, 1883; approved bills of exchange, for which sum we agree to remit through Messrs. Fabbri & Chauncey to Messrs. John W. Carter-Sons & Co., not later than twenty-one days before maturity of acceptance in London, and until such sum has been paid by us and satisfied to Messrs. John W. Carter-Sons & Co., we hereby bind ourselves to hold under lien subject to the order of Messrs. Fabbri & Chauncey as agents, and for account of Messrs. John W. Carter Sons &. Co., the above lot of merchandise per ‘ Picqua,’ and all or any portion thereof, and the policy or policies of fire insurance on the same, or the proceeds of said merchandise if sold. Arguimbau, Wallis & Co."
    Arguimbau, Wallis & Co. made an assignment for the-benefit of creditors to the defendant, Baldwin, and this action is brought to recover the goods of their proceeds from him.
   William G. Choate, Referee.

In this case I think that the plaintiffs upon acceptance of the vendors’ draft for the price of the goods, and the receipt by them of the bills of lading which were to the shippers’ order and ■endorsed, became vested with the title or general ownership of the goods to which Arguimbau, Wallis & Co. could become entitled only by remitting funds to cover the ■acceptances (Farmers’ Bank v. Logan, 74 N. Y. 568; Dows v. Bank, 91 U. S. 618). The defendant’s theory that upon the acceptance of the drafts the title passed from the shippers to Arguimbau, Wallis & Co., the intended ultimate owners, on whose order they were purchased, is inconsistent with the cases above cited, and the authorities on which they rest and with the fact ■clearly shown of the intention of the plaintiffs to hold the proofs of title in themselves till payment by the defendants. They transmitted the bills of lading and shipping documents, not to the defendants, but to their own agents :in New York.

The agreement between the plaintiffs and Arguimbau, Wallis & Co., evidenced by the receipt for the shipping documents and given to the plaintiffs’ agents, Fabbri & Chauncey, whereby Arguimbau, Wallis & Co. agreed to remit the required funds and meanwhile to hold the goods '“ under lien ” and “subject to the order of Messrs. Fabbri & Chauncey as agents of and for account of Messrs. Jno. W. Carter Sons & Co.” . . . “ or the proceeds of the same .if sold,” was a perfectly lawful agreement and gave the plaintiffs an equitable if not a legal lien on the goods. And in case of their sale on the specific proceeds thereof so long as those proceeds remained distinguishable from other funds.

The objections to this conclusion made by the defendants are, that the plaintiffs were pledgees of the goods, and that the effect of the delivery of the subject of the pledge to the owner was that the pledge was discharged. It is further claimed that the words “ under lien ” in the agreement show that the plaintiffs asserted only a lien and not a title in the goods, and intended by the agreement simply to preserve their existing lien as pledgees and not to create by the agreement a new and different lien.

The answer to these objections is twofold: (ist) that the plaintiffs were not mere pledgees, but owners, and that they delivered possession of the goods under a lawful condition, and (2d) that if they had merely the interest of pledgees, the delivery made under the conditions and for the purposes expressed in the agreement, was not such a delivery as would release the pledge. The delivery was to hold for the account and benefit of the plaintiffs till remittance should be made, and not for the benefit of the defendants with power of sale in the meantime.

A pledgee'may make the pledgor his agent to hold or sell the goods for his (the pledgee’s) benefit (Thayer v. Dwight, 104 Mass. 254). Such was the effect of this, agreement if the plaintiffs held only as pledgees.

The criticism on the words “ under lien,” that they mean under the same precise kind of lien under which the goods were before held by the plaintiffs, is, however, in any view that may be taken of the plaintiffs’prior position and interest, an over-nice criticism on the construction of such an instrument, and it seems that these words would rather import that the defendants were to hold the goods subject to a prior claim of the plaintiffs for securing the performance of the agreement of the defendants to remit.

In other words, they mean “ under a liento or in Carter & Co.,” not “ under the existing lien of Carter & Co.,” whatever their interest was before, the intention was that the goods should stand thereafter as their security—or “ under lien ” to them. And if this is their meaning, the court will give effect to the language by declaring such a lien as will be lawful and effectual, rather than one that might be unlawful and nugatory. In the view taken of the case, however, the precise meaning of these words is not material.

The defendant, Baldwin, as assignee of Arguimbau, Wallis & Co., for the benefit of creditors took the property subject to all legal and equitable claims thereon under which the assignors held it. He is a mere trustee for their creditors and not a purchaser for value. The plaintiffs’ rights are unimpaired by the assignment.

So far as the goods remained unsold and so far as their proceeds can be traced in the hands of their assignee, the plaintiffs are entitled to judgment.  