Philadelphia Warehouse Co. v. Winchester

Citations

• 156 F. 600
• 1907 U.S. App. LEXIS 5357

Syllabus

<p>1. Pledges — Validity.</p> <p>The Philadelphia Warehouse Company, being engaged in the business of advancing cash or giving credit to manufacturing and other establishments on the security of a pledge of merchantable commodities, loaned $150,000 to the Diamond State Steel Company on collateral notes of the latter company, taking from it leases of portions of its premises on which personal property intended as security for such notes and their renewals was situated, and pursuant to contract with the steel company appointed a custodian of the leased premises and of the personal property deposited or thereafter to be deposited thereon; the custodian being an employs of the steel company. The custodian duly took possession of the leased premises and placed and continuously maintained thereon in a number of conspicuous positions signs and placards plainly indicating that the warehouse company was the owner of or specially interested in the personal property thereon. Held, that a valid pledge of such personal property was created in favor of the warehouse company which should be enforced against receivers of the steel company.</p> <p>[Ed. Note. — For cases in point, see Cent. Dig. vol. 40, Pledges, §§ 34, 35. ¡</p> <p>2 Same — Notice.</p> <p>Due and reasonable care should be observed by a pledgee to negative the existence of ostensible ownership In the pledgor, and to this end such means should be resorted to as fairly to inform or put third persons on inquiry; but the common-law doctrine of pledge does not require the adoption of such means of giving notice to the public as absolutely to insure to all persons dealing with the pledgor knowledge of the existence of the pledge, nor should it be so strained as to shock reason and negative in large measure the validity of pledges fairly made for the accomplishment of useful ends in extensive industrial operations.</p> <p>3. Same.</p> <p>The signs and placards placed by the warehouse company on the leased premises being of