Chattel Mortgages

Drafts or bills of exchange drawn in domestic transactions against a national bank cannot be accepted when secured by a chattel mortgage on cattle, but only when accompanied by shipping documents or when secured by a warehouse receipt or other similar document conveying or security title to readily marketable staples.

While cattle may be treated as readily marketable staples, a chattel mortgage is not considered a document similar to a warehouse receipt, since the borrower retains the possession of the goods and conveys to the bank only the legal title.

Collateral Notes Secured By Chattel Mortgages

A national bank is not authorized to accept a draft secured by collateral notes which are in turn secured by chattel mortgages on cattle.

Member banks are not authorized to accept drafts of a cattle-loan company secured by notes of the owner of the cattle, although such notes may be secured by a chattel mortgage accompanying the draft at the time of acceptance.

Bills Of Sale

A bill of sale is not a receipt similar to a warehouse or terminal receipt. It is merely in substance a chattel mortgage of goods in the hands of the drawer and not a receipt for goods sold in the hands of some third party "independent of the borrower."

Security Not Specified

The acceptance of a draft by a member bank against an acceptance agreement which purports to assign to the bank certain collateral security, but which does not specifically mention any security as assigned, is an ordinary accommodation acceptance and is not authorized by law.