of BLOSS lawfully, and the plaintiffs made advances upon it in good faith, relying upon the bill of lading as evidence of ownership, and without notice of any facts justifying the conclusion that BLOSS was not the real owner, or that any fraud was meditated or had been committed in the purchase of the corn.

IV. That the plaintiffs' title to the corn is good, notwithstanding MACK may have intended a fraud in acquiring possession of the goods, and purchased with a preconceived intention not to pay.

These are the propositions discussed and decided by the court in the published opinion. As to the correctness of at least the last point, (IV.,) there must be, we think, considerable doubt; and we certainly cannot consider it to be a true exposition of the law until it is held to be such by our Court of Appeals. In a similar case, (Dows vs. PERRIN, 16 N. Y. Reports, 325,) the Court of Appeals have stated that a bill of lading is not such a negotiable commercial instrument as to confer upon a bona fide transferee a title not affected by the fraud committed in obtaining it. This was, to be sure, a mere dictum in that case, and yet we believe the proposition to be correct, and think the court will reaffirm it whenever the question comes properly before them. A bill of lading has never been held to be negotiable in the sense that a bill of exchange or promissory note is. The extent to which our courts have gone is this: "That the right of stoppage in transitu is cut off by the transfer of the bill of lading to a bona fide purchaser." For instance, if A. should purchase for cash of B. a boat-load of corn, and A. should fail while the corn was being transferred, B. could retake the corn. But if B. had given a bill of lading, and this bill had been transferred to a bona fide purchaser, then A. would have no right to retake the corn, although it had been sold to B. for cash, and B. had failed without making the payment. The right of stoppage in transitu would in that case be cut off. This, however, is, we believe, the very extent our courts have or will go towards making a bill of lading negotiable. Where such a bill is void on account of fraud, the holder certainly cannot confer a better title than he himself has; it is void in the original holder's hands, and is void also in any one's hands (whether bona fide holder or not) to whom it may be transferred. The "right of property" must be in the one who obtains the bill of lading, before he can, by any transfer or endorsement of the bill, confer a title to the goods as against the true owner. So where the bill is obtained by fraud, the "right of property" is not, of course, obtained with it, and cannot, therefore, be passed over to any other party by a transfer of the bill. For these reasons we believe the conclusion (IV.) of the court in the above case is incorrect, and will be so held when the question is passed upon by our court of last resort.

BILL OF SALE.

The recent case of SCHENCK AND Others vs. SaundERS, reported in 13 Gray (Mass.) Reports, 37, was an action to recover the value of sundry cases of boots and shoes. The plaintiffs were commission merchants and manufacturers of boots and shoes, under the firm of SCHENCK, WOOD & POND, having their principal place of business in New-York, but were accustomed to put out stock to different persons in the States of New-York, Connecticut and Massachusetts, to be manufactured into

boots and shoes. On the 11th of April, 1856, they made with CHARLES HOWE, of Farmingham, Mass., a written agreement in these words:

"The said SCHENCK, WOOD & POND, of the first part, agree to furnish stock, consisting of upper and sole leather and linings and findings, of sufficient amount to make at least eight and not to exceed twenty cases per week. And the said CHARLES HOWE, of the second part, is to take the stock and make it up, to the best of his abilities, into women's boots; and further agrees, to consign all the goods he makes to the said SCHENCK, WOOD & POND, of the first part, to be sold by them on a commission of five per cent., the goods to be sold for cash, and the returns made to the said CHARLES HOWE as fast as made. And the said CHARLES Howe, of the second part, agrees to put up and ship to the said SCHENCK, WOOD & POND, at their store in New-York, at least eight cases of boots per week, each case containing sixty pairs, commencing the first week in May, 1856.”

It was proved, on behalf of the plaintiffs, that certain leather and stock, suitable to be made into boots and shoes, were delivered by them to Howe, and by him made up into the boots and shoes now in controversy, and taken to Boston and delivered to the defendant for certain advances made Howe by the defendant, as stated below; that the defendant refused to deliver them up on demand made by plaintiffs, but sold them and applied the money to his own use.

The defendant was an auctioneer and commission merchant at Boston. He contended, on the trial, that the property in the stock delivered by the plaintiffs to Howe, under the above contract, passed to Howe, and introduced evidence tending to show that whenever the plaintiffs sent stock to Howe, they sent him, within a few days afterwards, bills (not signed by the plaintiffs) in this form:

BOOT, SHOE AND LEATHER WAREHOUSE.

New-York, May, 15th, 1856.

Mr. CHARLES Howe, bought of SCHENCK, WOOD & POND, Manufacturers and Commission Merchants, No. 25 Beekman-street. Terms, 6 months.

52 sides sole leather, B. A., 644, 261,.. Inspection and cartage,.

$ 170 66

90

$171 56

Evidence was also introduced by the defendant, tending to show that when Howe brought the boots and shoes now in controversy to the defendant in Boston, he showed the defendant said agreement and thirty or forty of the bills sent him by the plaintiffs of the above form, except in omitting in some of them the words, "terms, 6 months," and that the defendant, after reading the agreement and looking over the bills, made advances to Howe on the goods, believing that Howe owned them.

Decision. On these facts the court held

I. That the bills of parcels which were sent from time to time with the merchandise did not change the terms of the written agreement under which the property was sent to HowE. They were sent only as memoranda of the amount and value of the merchandise transmitted.

II. The agreement was not a contract of sale. The true interpretation of it seems to be that it was an agreement by which Howe was to manufacture the stock of the plaintiffs, and to receive from them as his pay

therefor, the proceeds of the sales of the goods, when manufactured and returned to them for sale, deducting the value of the stock and a commission of five per cent. on the sales.

Such being the construction of the bills and the contract, it follows that the defendant had no valid title to the property as against the plaintiffs, and the plaintiffs are entitled to judgment.

NEGOTIABILITY OF RAIL-ROAD BONDS.

Bonds transferred as security for Pre-existing Debts.-In the same volume of GRAY's Mass. Reports, (13 Gray, 7,) we find reported the case of CULVER and others vs. BENEDICT, which was a bill in equity filed to obtain possession of nine bonds of $1,000 each, issued in Indiana by the Logansport, Peoria and Burlington Railway Company, and payable to bearer.

Facts. On the trial it was proved that the plaintiffs, being owners of the bonds in question, delivered them to one EDWARD SOLEY, (a broker in New-York city,) to procure a loan on them for the plaintiffs and for no other purpose. That SOLEY thereupon, and without any right or authority, delivered the bonds to the defendant, BENEDICT, as security for pre-existing debts due from SOLEY to BENEDICT, instead of using them as directed by the plaintiffs. The agreement between BENEDICT and SOLEY was made in New-York. But eight of the bonds were (pursuant to that agreement) delivered by SOLEY to BENEDICT in Massachusetts, and the other one was delivered in Connecticut.

Decision. On these facts the court held—

I. These securities more closely resemble promissory notes payable to bearer. They are put in circulation and pass from hand to hand by delivery, and are thus bought and sold in the stock market, no formal transfers being required, and interest is paid thereon to whomsoever demands the same, upon presentation thereof, or the coupons attached thereto. Hence the right of the defendant, BENEDICT, to retain these securities as against the plaintiffs must be decided upon the same principles as if they were negotiable notes made payable to bearer. That such is the character of these bonds is also settled by legislative enactment.

II. None of these bonds were transferred to BENEDICT in the State of New-York, but eight of them were delivered to him in Massachusetts and one in Connecticut. The transfer must be dealt with as a Massachusetts contract, under the circumstances disclosed.

III. By the law of Massachusetts the receiving of a negotiable note in payment of a pre-existing debt, as collateral security for the same, excludes all the equities between the original parties thereto. Of course it must be taken in good faith and without notice of anything to impeach its validity as a just debt. Hence, on the facts disclosed in this case, the defendants' title to these bonds is perfect. Judgment was, therefore, given for the defendants against the plaintiff.

Such were the main propositions decided by the court in this case. Had, however, the court held that this was a New-York contract, (the contract to transfer having been made in New-York,) they must have reached a different final conclusion. For in New-York it is well settled

that a party taking a negotiable security in payment of, or collateral to a pre-existing debt, holds the security subject to all the equities between the person from whom he receives it and the original owner. This, it seems to us, is the more equitable doctrine. The party who takes the secnrity on a pre-existing debt, actually parts with nothing for the security, and is, therefore, in no way damnified if compelled to re-deliver such security to the true owner. Such, too, is the law, we believe, in Connecticut, and we do not quite understand why the transfer of the one bond in Connecticut was not held to be a Connecticut transfer, and construed accordingly.

INSURANCE.

Life Insurance.-The action of TAYLOR vs. ETNA LIFE INSURANCE COMPANY, (13 Gray, 434,) was brought to recover the amount claimed to be due under a life insurance policy. The policy was on the life of ANDREW TAYLOR, for seven years from the 11th of April, 1855, in the sum of $700, payable "within ninety days after due notice and proof of the death of said ANDREW TAYLOR, if within the term of this policy," with a condition that the policy should be void if the said TAYLOR should, without the consent of the company, endorsed upon the policy, pass beyond the settled limits of the United States, or certain of the British Provinces, or west of the Rocky Mountains.

Annexed to the policy was a license, of the same date, from the company, by which, in consideration of an extra premium, said TAYLOR was permitted "to pass by sea, in first-class decked vessels, from any port of the United States north of the thirty-ninth degree of north latitude to and from any port bordering on the Pacific Ocean, and to reside in California," and also "to pass to and from California via Chagres and Panama, or by the Nicaragua route."

The defence made was-First. That no affidavit or certificate of the attending physician, as to the circumstances and occasion of the death of ANDREW TAYLOR, was ever furnished to the defendants, although the plaintiff was informed, at the time he gave the notice and furnished certain other proofs of such death, that the defendants held such certificates or affidavit to be essential, and that until furnished the proof would not be considered complete nor the loss payable. It is admitted that the ship's physician was present and attending during the sickness, and at the time of the death of said TAYLOR; and the plaintiff offers no excuse for not furnishing such certificate, except the inconvenience and expense of sending to the Pacific coast to obtain it. Second. The other defence was, that the said ANDREW TAYLOR was on board the steamship Sierra Nevada "as a steerage passenger."

Decision. The court held that neither of the above was a defence to the action. The substance of the opinion is as follows:

I. By the terms of the policy the sum insured was payable in ninety days "after due notice and proof of the death of ANDREW TAYLOR." Such notice and proof were therefore prerequisite to the maintenance of this action. It is, however, admitted in the case that there was no defect in the proof of said TAYLOR's death, unless, in order to constitute due proof thereof, it was necessary to produce a sworn certificate of the phy

sician who attended the deceased in his last sickness. The ground taken by the defendants is, that such certificate is a requisite and essential part of the preliminary proof of the death, and made so, not only by the terms and reasonable intendment of the contract contained in the policy, but also by their own usage and understanding, and the usage and understanding of other life insurance companies.

To support this ground of defence, the defendants have introduced (the plaintiff's counsel consenting) a pamphlet issued by them, which they were accustomed to give to claimants on their policies, and which, it is admitted by the plaintiff, was given to him by the defendants at the time when he presented to them his proof of ANDREW TAYLOR's death. Under the head of "proofs of death required," that pamphlet contained, among other required proofs, the following: 1st. A certificate "from the physician who attended the party during his last sickness, stating particularly the nature of the disease, its duration and the time of death." It was also a part of said required proof that the certificate "should be sworn to before a magistrate or other officer qualified to administer an oath or affirmation." But in all this we can find no defence to the action. The policy does not embody nor refer to any by-law, requisition, usage or understanding of the defendants as to the kind of proof which they should require of the death of ANDREW TAYLOR. Whatever, therefore, might be such by law, requisition, usage or understanding, the plaintiff would not be bound thereby. He is bound only by the policy itself, and that is, to furnish "due proof" of the death. If the defendants would have bound the plaintiff by their by-laws, &c., they should have made them a part of the contract contained in the policy. 2d. No authority was cited which sustains the position that ANDREW TAYLOR, by taking passage as a steerage passenger, failed to conform to the license given to him by the defendants to pass by sea in first-class deck vessels, of which the steamship in which he took passage is admitted to be one. And the court do not know, judicially or otherwise, that life is less safe in the steerage than in any other apartment of a vessel.

Mutual Insurance. In the last volume of the New-York Court of Appeals Reports, (21 N. Y., 158, LAWRENCE vs. NELSON,) we find a case which decides that a member of a mutual insurance company, upon its insolvency, cannot, in an action brought against him to recover the amount of his premium note, set off a loss sustained by him on his policy, and adjusted before the company failed. This decision is an interesting one, as showing a characteristic difference between contracts with a mutual insurance company and all other contracts. For example: It is of course evident that if A. owes B., and B. owes A., the two accounts would be set off, the one against the other, in an action brought by the assignee of one of them. So, also, should a stock insurance company fail with an unpaid loss, owing A., in an action brought against A. by the receiver of the company to recover any sum due from him, A. would clearly be entitled to set off his loss against the claim of the company. But in a mutual company, where the action is brought to recover the amount of the premium note, no such claim would be an offset, for the reason that the insured is also an insurer— each sufferer is bound to make compensation as well as to receive it. As the court says, in its opinion, "The members of the association vir