Analogous to this last question is one often presented in slightly differing forms under modern methods of business. A consigns goods, takes a bill of lading, and attaches it to a draft. The draft is accepted by the drawee in reliance on the bill of lading. Either before or after acceptance it is indorsed over to a bona fide purchaser. Is the bill of lading a part of the draft, or is it notice to the indorsee of the entire transaction? The question becomes material if the quality or title of the goods covered by the bill of lading is defective. In such case the drawee either tries to avoid paying the draft, or if he has paid it to the indorsee, he seeks to recover such payment. The weight of authority is that the bill of lading is neither part of the draft nor notice to the indorsee of the entire transaction; and accordingly such defect in -quality or in title creates no liability against him.1 Under this view the acceptor is liable to the payee.2 If the acceptor has paid the bill of exchange and the property covered by the bill of lading is then attached, he can not recover such payment.3 men's National Bank v. Curtis, 167 N. Y. 194, 52 L. R. A. 430, 60 N. E. 429.

Oklahoma. Security Trust & Savings Bank v. Gleichmann, 50 Okla. 441, L. R. A. 1915F, 1203, 150 Pac. 908; Producers' National Bank v. Elrod, - Okla. - , L. R. A. 1918F, 1016, 173 Pac. 659.

Oregon. United States National Bank v. Floss, 38 Or. 68, 84 Am. St Rep. 752, 62 Pac. 751.

West Virginia. Dollar Savings & Trust Co. v. Crawford, 69 W. Va. 109, 33 L. R. A. (N.S.) 587, 70 S. E. 1089.

4 Moore v. Burling, 93 Wash. 217, 160 Pac. 420.

5 Paika v. Perry, 225 Mass. 563, 114 N. E. 830; Jennings v. Todd, 118 Mo 296, 40 Am. St. Rep. 373, 24 S. W. 148; Baker State Bank v. Grant, 54 Mont.

7, 166 Pac. 27; Barry v. Kniseley, 66 Okla. 324, 155 Pac. 1168.

6Russ Lumber Co. v. Water Co., 120 Cal. 521, 65 Am St. Rep. 186, 52 Pac. 995 (where the consideration is a promise made by a corporation which has become insolvent); Hardin v. Dale, 45 Okla. 694, L. R. A. 1915D, 1099, 140 Pac. 717.

7McNight v. Parsons, 136 Ia. 390 [sub nomine, McKnight v. Parsons, 22 L. R. A. (N.S.) 718, 113 N. W. 858]; Snelling State Bank v. Clasen, 132 Minn. 404, 157 N. W. 643; Baker State Bank v. Grant, 54 Mont. 7, 166 Pac. 27.

8 Todd v. State Bank, 182 la. 276, 165 N. W. 503.

9 Parker v. Horton, 176 N. Car. 143, 96 S. E. 904.

10 Benton v. Sikyta, 84 Neb. 806, 24 L. R. A. (N.S.) 1057, 122 N, W. 61.

A minority of the courts hold that such defense can be interposed by the acceptor.4 Of these cases, Landa v. Lattin, decided by an intermediate court,5 has been overruled by the court of last resort of that state.6

If the bank has purchased the goods as well as the draft upon the purchaser for which the bill of lading is security, the purchaser may recover from the bank the amount thus paid if the goods do not conform to the contract under which they were purchased,7 and the purchaser could avoid such contract as against the seller on the ground that he had no opportunity to inspect them.8

1 United States. Goetz v. Bank, 119 U. S. 551, 30 L. ed. 515.

Iowa. Tolerton v. Bank, 112 Ia. 706, 50 L. R. A. 777, 84 N. W. 030.

Kansas. Hall v. Keller, 64 Kan. 211, 91 Am. St. Rep. 209, 67 Pac. 518. (This case holds that the defenses of the consignee remain the same against the transferee as against the assignor.)

Kentucky. Hawkins v. Alfalfa Products Co., 152 Ky. 152, 44 L. R. A. (N.S.) 600, 153 S. W. 201.

Michigan. First National Bank v. Grand Rapids & I. Ry. Co., 195 Mich 1, 161 N. W. 859.

Missouri. Columbian Bank v. White, 65 Mo. App. 677.

New York. Springs v. Hanover National Bank, 209 N. Y. 224, 52 L. R. A. (N.S.) 241, 103 N. E. 156 (bill of lading a forgery).

Tennessee. Leonhardt v. Small, 117 Tenn. 153, 6 L. R. A. (N.S.) 887, 96 S. W. 1051.

Texas. S. Blaisdell, Jr., Co. v. Bank, 96 Tex. 626, 97 Am. St. Rep. 944, 75 S. W. 292.

See also, National Bank of Commerce v. .Bossemeyer, 101 Neb. 96, L. R. A. 1917E, 374, 162 N. W. 503.

2 S. Blaisdell, Jr., Co. v. Bank, 96 Tex. 626, 97 Am. St. Rep. 944, 75 S. W. 292.

3 Hall v. Keller, 64 Kan. 211, 91 Am. St. Rep. 209, 67 Pac. 518; Lewis v. Small, 117 Tenn. 153, 6 L. R. A. (N.S.) 887, 96 S. W. 1051.

4 Finch v. Gregg, 126 N. Car. 176, 49 L. R. A. 679, 35 S. E. 251; Landa v. Lattin, 19 Tex. Civ. App. 246, 46 S. W. 48.

See, also, as to a note and a land contract under which it was given which was assigned as security thereof. Todd v. State Bank, 182 Ia. 276, 165 N. W. 593

5 19 Tex. Civ. App. 246, 46 S. W. 48.

6 S. Blaisdel, Jr., v. Bank, 96 Tex. 626, 97 Am. St. Rep. 944, 75 S. W. 292.