(charging jury). The question is, whether the preference to which the United States are entitled over the other creditors of Watkins, will overreach the right claimed by the defendants to the goods imported from Canton and consigned to them?
The leading principle stated in the case of Thelusson v. Smith, 2 Wheat. [15 U. S.] 426, is that which must in a great measure decide this cause. It is, that although in a case of insolvency, the debts due to. the United States are first to be satisfied, without regarding the superior dignity of those due by the insolvent to others, still they must be satisfied out of the debtor’s estate. And therefore,. if before the right of preference has accrued to the United States, the debtor has made a bona fide conveyance of property to a third person, or has mortgaged it to secure a debt, or if his property has been seized under an execution; in all these cases, the property is divested out of the debtor, and cannot be made liable to the debts due to the United States. It has also been decided by the supreme court, that the right of preference given to the United States does not arise until the act of insolvency has been committed, and that this right is not in the nature of a lien. [U. S. v. Fisher] 2 Cranch [6 U. S.] 358.
Attending to these principles, we have now to inquire whether, upon general principles of law, the property in the Canton goods consigned to the defendants, was divested out of Watkins, and vested in the defendants, prior to the 9th of June, 1823, when the act of insolvency was committed? It must be conceded that in England, as well as in this country, a respon-dentia bond in common form, is considered as amounting to no more than a personal security. It is equally clear, that a mere consignment or indorsement of a bill of lading, or filling up a bill of lading to the consignee, does not per se pass the right of property in the goods to the consignee or indorsee. They only give to the consignee a right to demand the goods of the captain.
The true rule is stated by Holt (page 74) in his second volume on Shipping, that the in-dorsement of a bill of lading is an immediate transfer of the legal interest in the cargo to the assignee, provided it be for value. But if shipped without order, the ownership remains in the shipper; or if the indorsement be made without consideration. But it is otherwise, if the bill of lading be filled up to a creditor as a security for his debt. It is laid down in the case-of Hibbert v. Carter, 1 Term R. 745, that an indorsement of a bill of lading to a creditor, without any proof or explanation, dehors, is, prima facie, a transfer of the property to him; but if the intention be proved to be only to bind the net profits, it is otherwise. Now this is a very strong case in its application to the present. For, if the mere circumstance of the indorsee being a creditor, amounts to a presumptive transfer of the property, how much stronger must be the case where the object and intention of the indorsement are to secure a debt due to the indorsee, and in fulfilment of an express agreement between the shipper and the indorsee, entered into at the time the debt was contracted, that the indorsement should *814be made, or the bills of lading be filled up to the creditor, for the purpose of securing the debt then contracted? This is precisely the present case. The $10,000, for which the re-spondentia bond was given, were loaned upon an express stipulation in writing, entered into at the time of the loan, that the bills of lading for the outward cargo should be indorsed to the defendants, as a collateral security for the debt, and also that the goods to be shipped on the homeward voyage, being the investment of the money lent, should be assigned to the defendants, and should be consigned to them as collateral security. This agreement was partly executed on the 23d of May, 1822, by the assignment of the outward bill of lading, and of the $10,000 mentioned in it, and of-the goods in which they were to be invested, and was afterwards completed by the consignment to the defendants.
Two objections have been made by the plaintiffs’ counsel to the application of the principles before mentioned to the present case. (1) That the transfer was incomplete and inoperative, on account of actual possession of the goods brought from Canton having, at no period, been taken by the defendants. (2) That these goods were shipped and were agreed to be so shipped, at the risk and for account of Watkins.
As to the first objection, it is not well founded In point of law. Actual possession is not essential to the transfer of personal property, and the want of it is not even an indicium of fraud, where, from circumstances, it cannot be obtained. The indorsement of a bill of lading for a cargo whilst at sea, for a valuable consideration, transfers the property, although actual possession is not and can not be taken by the assignee. The possession of the master is constructively the possession of the owner of the goods, and the right of possession follows the right of property, according as that may change from one person to another. A contrary doctrine would be attended by the most calamitous consequences to commerce.
The other objection is completely and satisfactorily refuted by the case of Haille v. Smith, 1 Bos. & P. 563, in which it is laid down, that the nature of the trust being, that the proceeds of the cargo should remain with the consignee, applicable to the debt for the security of which the consignment was made, under an agreement to that effect, for a valuable consideration, the risk must necessarily remain with the consignor, notwithstanding the change of property, and that he must suffer, or be benefited by the loss or profit on the sale. The court came to the conclusion, that the cargo vested in the consignees, notwithstanding the risk remained in those who transferred the cargo, and nothwithstanding the cargo was to be sold with a view to the profit or loss of the consignor. In that case, actual possession never came to the hands of the consignee; and it' is, upon the whole, a strong authority as to most, if not all, the points discussed in this case.
We are clearly of opinion, that the property in these goods vested In the defendants prior to the act of insolvency committed by Watkins on the 9tb of June, 1823, and that they were not liable to the preference claimed by the United States. The only interest which remained in Watkins, was a right of redemption upon payment of the debt due to the defendants, or to any surplus which there might have been upon a sale of the goods, after satisfying the defendants. This being the law of the case, , and the facts being all in writing, and agreed between the parties, I must direct a verdict to be found for the defendants.
Verdict for defendants.