A further question presents itself and maybe stated in this way: What is the effect of an acceptance of the draft upon the title to the property which is covered by the bill of lading ? It will not be disputed that if the draft be a demand draft or a sight draft without grace, the acceptance of the draft will not in itself convey title to the goods, because the transaction imported is a sale for cash. Even though the bill of lading be delivered upon an acceptance of such a draft, the transferee knows that the bank had no authority to deliver the bill of lading except upon payment, unless he had a contract with the assignor for a sale upon credit, which would no£ affect the bank's lien. Instructions to the collecting bank not to deliver are not necessary. By such a delivery the collecting bank itself would become liable for the loss resulting. But third parties, the railroad company or the carrier, and those claiming under the transferee of the bill of lading, having no notice of the wrongful delivery of the bill of lading, may treat with the transferee as owner. Suppose, however, the drawer of the draft or the transmitting bank notifies the railroad company before its delivery of the goods to the transferee, or makes a common-law sale of the goods to some one else, who notifies the railroad company before its delivery, what would be the result ? If the transferee and acceptor should pay the draft, his title would be perfect, of course. If he should not pay the draft, the consignor or his vendee would have title, and the carrier would be held accordingly. Taking the case, now, of a time draft, i. e., a draft payable at sight with grace, a draft payable so many days after sight or after demand, or payable at a day certain, two cases would present themselves: (1) Where instructions had been given the collecting bank not to deliver the bills of lading except upon payment; (2) where no instructions had been given. If the bank, in violation of its instructions, should deliver the bills of lading, the condition would not be different than if it had wrongly delivered upon a demand draft or sight draft without grace, except that the transferee would have no notice of the lack of power in the collecting bank to deliver, unless his contract with the consignor was for a cash sale. But this very fact of delivery would determine that title passed to the transferee without notice, because if without notice he would assume, and would have the right to assume, that he would obtain title by the delivery, and the other party, having invested his collecting agent with the apparent right to deliver, would be court decides that this representation was ultra vires. It should have held that there was nothing to show any representation. The statement was not one of fact, but a promise if anything. There was no representation as to the quantity of cattle or hogs. It did not appear that the representation as to the cattle was falsa The court, with a plain ground of correct decision, put its ruling upon a most unsatisfactory ground. It could also have said that no sensible person would rely on the telegram as any statement of the number shipped.

13 Commercial Bank v. Railway Co., 160 111. 401. This decision is one of those per curiam offspring which each judge refuses to father. It holds that title in the goods covered by the bill of lading passes upon acceptance, if no instructions were given not to deliver, even though the bill of lading was not delivered. But it ought to have been plain that the non-delivery of the bill of lading was notice that the sale was not upon credit. The proof that seems to have been offered was not satisfactory, but the decision as a judgment (not in what it argues) may be correct, because the facts showed that the sale was upon credit and was so understood between the parties. The court's statement about instructions given preventing the title passing is mere dictum and is wrong, because the instructions would be material as to the transferee's title, if he had notice, but not otherwise. His title depended upon the contract as made, or if there was no contract express or implied, as a fact, what was done at the time would govern.

Clearing-house Indorsements. - The rule has been made in one clearing house and extensively adopted, that no draft or check will be passed through the clearing-house unless it be a check or draft whose indorsements show full ownership in the bank transmitting the paper for collection. This rule has been drawn forth by a decision to the effect1 that where the collecting bank acts as agent in collecting and has wrongly received payment upon a check or draft, but has transmitted the proceeds to its principal, it is not liable to the party from whom it wrongly collected where that party had notice of the agency, as it would have by indorsements for collection, for collection and credit, for account, and perhaps for credit.2 This rule is made by the banks for their own protection. It will obviate many troublesome questions as to the ownership of the proceeds of a collection and as to mutual credits between banks upon insolvency.3

1 See p. 300, ante, note 1, for the decisions upon the point.

2 See pp. 208, 297, 316, ante. 3See pp. 297, 298.