The statement made on page 299 in regard to the duty of a bank in collecting a draft attached to or accompanied by a bill of lading, while technically correct, may seem to be misleading, and therefore needs amplifying. The question may present itself in different ways. Thus the draft may be an ordinary sight draft, a draft payable at sight without grace, a draft payable so many days after date or at a fixed date, or upon demand or so many days after demand. The rule is reasonably well settled that, if the accompanying draft is a time draft, and by this term the courts mean sight drafts with grace,1 drafts payable so many days after sight2 or after demand, and drafts payable at a fixed day.3 the bank may deliver the bill of lading upon acceptance of the draft. The reason for the rule is said to be that such a draft imports a sale upon credit. This reason is wholly inadequate as to drafts payable at a fixed day, i. e., so many days after date or upon a day named, for the reason that those drafts need no presentation for acceptance,4 and the drawer may very well consider that the bank collecting will not present such a draft for acceptance, and the transmitting bank which has discounted the draft, with the bill of lading as collateral security, may reasonably assume the same thing. It is true that such a draft may be presented for acceptance,5 and if acceptance be refused notice must be given,6 and the draft, if dishonored, needs no presentation for payment, according to the authorities.7 But the collecting bank upon receiving such a draft for collection may hold it until maturity and then present for payment; and necessarily the bill of lading would be held until payment. Yet the rule is held that such a time draft imports a sale upon credit. The drawer of the draft or the transmitting bank, if it desires the bill of lading to be held until payment, and wishes the draft to be a time draft, should draw the draft payable at a day certain, and give instructions to the collecting bank to present the draft for payment but not for acceptance, or the drawer should draw a demand draft, upon which the bill of lading cannot be delivered except upon payment.8 If a draft is a sight draft without grace, it is a demand draft, and the bill of lading cannot be delivered except upon payment. But, as it will appear a little further along, instructions to the collecting bank are not necessarily a full protection.

1 National Bank v. Merchants' Bank, 91 U. S. 92 (here one of the drafts was a sight draft); Marine Bank v. Wright, 48 N. Y. 1 (here the draft was a sight draft). Second Nat. Bank v. Cummings, 89 Tenn. 609 is contra as to a sight draft. The court in this last case cited National Bank v. Merchants' Bank, supra, but had not read it far enough to see that sight drafts with grace are treated as time drafts.

2 National Bank v. Merchants' Bank, 91U. S. 92; Commercial Bank v. Railway Co., 160 I1L 401; Moore v. Louisiana Nat. Bank, 44 La. Ann. 90 (draft at one day's sight).

8 Woolen v. New York Bank, 12 Blatchf. 359.

4 See p. 349, ante.

5 See pp. 389, 390, ante.

6 See pp. 389, 390, ante.

7 See pp. 374, 389, 466, ante.

How far a bank is safe in taking a bill of lading as collateral security depends upon various consideration's. It is reasonably well agreed that the bill of lading is a symbol of property, and when delivered transfers the property as against every subsequent purchaser or claimant under the transferror of the bill of lading.9 But the bill of lading is only quasi-negotiable, and delivered as a bill of sale transfers merely the transferror's title.10 If he had no title, the transferee of the bill of lading gets none. A bank should not assume that a bill of lading is necessarily a good security, unless it knows that the apparent owner of the goods is the real owner. The liability of the bank upon the bill of lading to the consignee, or the person to whom the bill of lading is delivered, is nothing. For although the bill of lading indorsed or delivered unindorsed11 transfers the legal title to the bank, yet it is the legal title only for the purposes of the lien; and when the bill of lading is delivered, it is delivered as and for the consignor of the goods or drawer of the draft. The bank may make, it seems, representations as to the goods, and yet not be held, because such representations would not be bind-ing.12 The propriety of such a rule seems open to grave objections.

8 All the cases hereinbefore cited admit that a draft payable instantly does not import a credit, but a cash sale.

9Shaw v. Railroad Co., 101 U. S. 557.

10 Shaw v.Railroad Co.,supra. But one case seems contra, Morse v. Chicago, eta R R Co., 73 Iowa, 220; but this case may be justified upon the ground that the delivery of possession by the vendor to the vendee of goods, who shipped them and took out bills of lading which he delivered unindorsed to the bank, converted his cash sale into a sale upon credit. The statute, too, may have seemed to have some effect. The bank's lien was held superior to the title of the original vendor.

11 Morse v. Chicago, etc. R R Co., 73 Iowa, 226.

12Littleton v. People's Bank, 63 N. W. R 666. The representation was: "Mr. R has drawn on you to-day $2,230. Will ship you next Monday night or Tuesday morning one car of hogs and one of cattle. Cattle are good." Signed by the name of the cashier as cashier. The estopped to dispute the authority. But if the transferee of the hill of lading had notice of the instructions or knew that his contract was not for a sale upon credit, he would get no more title than if the draft had been a demand draft or one at sight without grace. Where no instructions have been given to the collecting bank, that bank on delivery of the bill of lading incurs no liability, and the transferee of the bill of lading gets a good title, if he had no notice that the sale was for cash, and had no notice of the instructions to the bank. Third parties, even if the transferee had notice, may treat the holder of the bill of lading as owner, until notice of a contrary state of facts. But the question goes further than this. Does the acceptance, of itself, without a delivery of the bill of lading, give title to the goods when the draft is a time draft, as above explained? The transferee, where the bill of lading is not delivered, must know that the bill of lading is being held until payment, and as a security for payment. Third parties are presumed to know this fact because the transferee has not the bill of lading, the symbol of ownership. Therefore it would seem upon reason that the title in the goods did not pass merely by reason of acceptance; yet plain as this conclusion seems, it has been held in a case that is erroneous, both in what it affirms and in what it denies, that if the bill of lading is not delivered title passes upon acceptance of a time draft, and the carrier may safely deliver to the acceptor of the bill of lading, provided no instructions have been given not to deliver the bill of lading.13 This case is wrong because it confuses the matter of the liability of the collecting bank with the matter of title to the goods covered by the bill of lading. It may very well be that the collecting bank would not be liable for delivering the draft upon acceptance, and might assume that the sale was upon credit; but it does not follow that where it does not deliver, and does not assume the sale to be upon credit, the sale is necessarily one upon credit. That must depend upon the contract between the parties, to be gathered from all the means of information, including the course of dealing between the parties and customs of the business.