the warranty of the Canneries Company, and asks judgment against it for the damages caused by such breach.

WATERMAN, J. * * * There was a sale of these goods with a warranty, which was broken. Defendant was the payee of the draft drawn by the Canneries Company on plaintiff for the price, with the bill of lading attached, and as such received payment of the full purchase price. The question to be determined is whether defendant is. now liable in damages for the breach of the Canneries Company's warranty. It must be confessed that this theory of its liability is fully supported by the case of Landa v. Lattin, 19 Tex. Civ. App. 246, 46 S. W. 48, and that the doctrine of that case has been adopted and followed by the supreme court of North Carolina in Finch v. Gregg, 126 N. C. 176, 35 S. E. 251, 49 L. R. A. 679, decided since the trial below. If we were prepared to yield our assent to the line of reasoning pursued in these cases, we should have to affirm this judgment. These decisions proceed upon the theory that the assignee stands in all respects in the shoes of his assignor, and to this broad doctrine we cannot agree. While the rights of such an assignee are to be measured by those of his assignor, his liability is not necessarily the same.

Defendant bank could not have compelled payment by plaintiff of any greater sum than could have been collected by the Canneries Company, but on what theory can we say it is liable on a contract of warranty which it never made? The rule of the Landa Case is founded on the thought that the transfer of the draft and bill of lading to the bank amounted to a sale of the goods, and that the bank as a purchaser undertook to deliver the goods and carry out the Canneries Company's contract with plaintiff, and because of these facts it necessarily assumed the contract of warranty, although it may have been in fact ignorant that any warranty was made. We do not think, even as the proposition is thus stated, the premises justify the conclusion. But the premises are not correct. The transaction between the Canneries Company and defendant was not and could not be a sale of the goods, for they had already been sold to plaintiff, and it was the intention of all parties. that such sale to plaintiff should be consummated by delivery. What was in fact done by the assignment of the draft and bill of lading was to transfer to the bank the Canneries Company's right to the price, and to give it the possession of the goods as security. Manifestly, while the bank could collect no more than its assignor would have been entitled to, the character of its engagement was not such as to impose upon it any liability to the buyer which it did not expressly assume. One who purchases an account against another takes it subject to defenses, but not to affirmative claims of the debtor on some collateral agreement with the original creditor. The two cases cited stand alone in holding the purchaser of a draft with the bill of lading attached liable on a warranty made by the assignor, and the line of reasoning pursued to reach this conclusion is so at variance with well-established elementary principles of law that we decline to accept the rule they announce.

Plaintiff's remedy is against the Canneries Company. It has now no enforceable claim against the bank. Reversed.

B. & B.BUS.LAW-69

SECTION 6.-RIGHTS OF CREDITORS AGAINST GOODS REPRESENTED BY NEGOTIABLE DOCUMENTS OF TITLE

Sales Act, Section 39. If goods are delivered to a bailee by the owner or by a person whose act in conveying the title to them to a purchaser in good faith for value would bind the owner and a negotiable document of title is issued for them they cannot thereafter, while in the possession of such bailee, be attached by garnishment or otherwise or be levied upon under an execution unless the document be first surrendered to the bailee or its negotiation enjoined. The bailee in no case can be compelled to deliver up the actual possession of the goods until the document is surrendered to him or impounded by the court.

Sales Act, Section 40. A creditor whose debtor is the owner of a negotiable document of title shall be entitled to such aid from courts of appropriate jurisdiction by injunction and otherwise in attaching such document or in satisfying the claim by means thereof as is allowed at law or in equity in regard to property which cannot readily be attached or levied upon by ordinary legal pro

cess.

These sections carry out the underlying theory of negotiable documents of title by giving to indorsees of such documents rights superior to those of other persons. A creditor who seeks to levy on the goods of his debtor, who then holds a document of title for them, must act with considerable promptness, because the negotiation of the document will cut off the right to levy on the goods. A creditor is virtually barred from levying on the goods, and his rights are confined to proceeding against the document. This result is brought about indirectly by the requirement that the creditor must first obtain the document, or obtain a decree from a court enjoining its negotiation.

SECTION 7.-RIGHTS OF TRANSFEREES OF A NONNEGOTIABLE DOCUMENT OF TITLE

Sales Act, Section 31. A document of title which is not in such form that it can be negotiated by delivery may be transferred by the holder by delivery to a purchaser or a donee. A non-negotiable document cannot be negotiated and the indorsement of such document gives the transferee no additional right.

Sales Act, Section 34. A person to whom a document of title has been transferred, but not negotiated, acquires thereby, as against the transferor, the title to the goods, subject to the terms of any agreement with the transferor.

If this document is non-negotiable such person also acquires the right to notify the bailee who issued the document of the transfer thereof, and thereby to acquire the direct obligation of such bailee

to hold possession of the goods for him according to the terms of the document.

Prior to the notification of such bailee by the transferor or transferee of a non-negotiable document of title, the title of the transferee to the goods and the right to acquire the obligation of such bailee may be defeated by the levy of an attachment or execution upon the goods by a creditor of the transferor, or by a notification to such bailee by the transferor or a subsequent purchaser from the transferor of a subsequent sale of the goods by the transferor. The purpose of this section is to make it clear that a straight bill of lading cannot safely be used as a document of title. The transferee never acquires a better right than his transferor had, and even after receiving the document his right to the goods may be defeated by a subsequent sale by his transferor, or by an execution against the goods levied by a creditor of the transferor.

Occasionally, even yet, persons overlook the important distinction between straight bills of lading and negotiable bills of lading as the next case shows.

C. E. WHITE & CO. v. CENTURY SAVINGS BANK OF
DES MOINES, IOWA.

(United States Circuit Court of Appeals, Seventh Circuit, 1916. 229 Fed. 975, 144 C. C. A. 257.)

Action by the Century Savings Bank of Des Moines, Iowa, against C. E. White & Co., a corporation. Judgment for plaintiff, and defendant brings error.

BAKER, Circuit Judge. This is an action in trover, instituted by defendant in error, a bank at Des Moines, Iowa, against White & Co., a commission house at East St. Louis, Ill. Judgment for the bank was entered upon a directed verdict.

To sustain the charge of a tortious appropriation of the bank's chattels, the following proofs were made: On June 22, 1908, Hough was a stock buyer at Des Moines and was the owner and in possession of 319 hogs. He took them that day to the Wabash Railroad, which loaded them into cars and issued to him a bill of lading for their transportation from "Shipper L. R. Hough," at Des Moines to "Consignee C. E. White & Co.," at East St. Louis. Hough on the same day took the bill of lading to the bank, indorsed it in blank, and signed a demand draft on White & Co. in favor of the bank for $3,900. On delivery of this draft and bill of lading the bank paid Hough the face value less lawful discount. * * * In the evening of the same day the bank deposited the draft with the bill of lading attached in the mail. The draft and bill of lading did not reach East St. Louis and were not presented to White & Co. until June 25th. In the meantime, on the morning of June 23d, the hogs arrived in East St. Louis and were delivered by the railroad to White & Co. Prior to this time White & Co. had continuing authority and instructions from Hough to receive his hogs and sell them promptly on commission. During the day of June 23d White & Co. sold the hogs. Hough never directly revoked his instructions. If his transfer of the bill of lading to the bank was

* * *

an indirect revocation, White & Co. had no knowledge thereof until two days after they had parted with possession of the hogs.

Do these facts sustain the judgment in tort? * * * In our judgment the difficulties in the present case arising from an apparent conflict between principles concerning factors and principles concerning the rights of indorsees or holders of bills of lading are solvable by reference to the different aspects in which a transference of a bill of lading may be considered.

These are three: 1. As evidence of an intended sale, pledge, or mortgage of the chattels described in the bill of lading, the same as a separate document would be evidence. 2. As an assignment of the shipper's rights against the carrier. 3. As a symbolic delivery of the chattels, equivalent in law to manual delivery. It would seem that there could be no doubt that all these elements characterize the transference of an "order" bill of lading.

But is the third element present as against the factor consignee of a "straight" bill of lading? In our judgment, No. We believe that a "straight" bill of lading is not a true document of title, possession of which is symbolic of actual possession, and that the carrier's possession, though not for all purposes the actual possession of the consignee, nevertheless is on his behalf. * * * If the consignor be in truth the owner and the consignee merely his factor, the consignor may transfer his interest as owner to a third person. But for that purpose his assignment on and delivery of the bill of lading are of no greater force than would be a separate bill of sale while the chattels were in the actual possession of the carrier for the factor consignee. For, “strictly speaking, no person but such consignee can, by an indorsement of the bill of lading, pass the legal title to the goods." * * * In other words, though the owner consignor may deal with his interest as owner by separate documents (and they are separate even if written upon the bill of lading), he is powerless to disturb the effect of the "straight" bill of lading as against the carrier or the factor consignee without notice. And this we believe is just, because the owner is the one who creates the bill and selects its form. Necessarily the transferee of such a bill is bound to take notice of its form and acquires no greater rights. than the transferrer had. And so the bank, succeeding only to Hough's interest as owner of the consigned hogs, and failing to prove notice to White & Co. of its interest before sale by White & Co., has not sustained its declaration in trover. *

The judgment is reversed, with the direction to grant a new trial.

7.

Right to Damages for Breach of Contract to Sell.

SECTION 1.-INTRODUCTION

In this chapter we are to look at the contract after it has been broken by the buyer, and the question is: What remedies does the seller now have against the buyer? May he recover money damages? If so, how much? Does the seller have any right to keep or take back the goods sold or contracted to be sold? We shall have to deal both with contracts of sale and contracts to sell. We shall find that the seller in some cases may recover the amount of the purchase price; in others, the seller will not be allowed to recover as much as the purchase price, but is allowed only the difference between the contract price and the market price. We shall also find that the seller has a right against the goods themselves in some cases; that is, he may keep them without being guilty of any breach of contract, and in some cases he may even get them back, although he has parted with their possession, and may keep them as his own or resell them.

SECTION 2.-ACTION FOR THE PURCHASE PRICE

There are three situations where the seller is allowed by the law to recover from the buyer, who has broken the contract, the actual amount of the purchase price agreed upon:

(a) Where the title has passed to the buyer; (b) where, although title has not passed, the buyer has agreed to pay the purchase price on a day certain; (c) where, although title has not passed to the buyer, and although the buyer has not agreed to pay the price on a day certain, the property contracted to be sold was of such a nature that it could not readily be resold for a reasonable price.

The provisions of the Sales Act dealing with these three situations will be taken up in this order.

(a) ACTION FOR PURCHASE PRICE, WHERE TITLE HAS ALREADY PASSED TO BUYER

Sales Act, Section 63. Where, under a contract to sell or a sale, the property in the goods has passed to the buyer, and the buyer