This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 77.— A bank receives from the shipper of goods a bill of lading (railway receipt) issued by a railway company for goods deliverable to a third party, as security for a draft drawn on the party to whom the goods are shipped. In the event of dishonour can the bank because it holds the receipt, get possession of the goods without the consignee's authority, or can the shipper get the goods without the surrender of the railway receipt by the bank?
Answer.—The duty of the railway company would be to deliver the goods to the person to whom they have been shipped, and they would ordinarily, we believe, deliver them without production of the receipt. If he refuses them, they would, no doubt, be justified in delivering them to the shipper. The possession of a receipt or a bill of lading in this form would not, we think, give the bank any rights as against the railway company to get back the goods.