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banker, customer and bill

GOODS. Where goods are in the custody of third parties a banker may advance upon them on receiving the bill of lading (q.v.) or the warrants which are the symbols or representatives of the goods. (See Docu MENTARY BILL.) If the goods are actually in the possession of the customer who desires an advance upon them, the security may be obtained by the goods being placed in a warehouse or build ing rented by the bank, the customer signing a document or letter of hypothecation, to show that the goods have been pledged for the advance and to give the banker a right to sell the goods, if necessary. In this way the goods are tinder the absolute control of the banker and cannot be dealt with until he releases them. NN'arrants for the goods are also furnished by the owner to the banker, and when any of the goods are sold the warrants require to be indorsed over by the banker to the purchaser. The goods should be insured in the banker's name.

Where the goods remain in the custody or control of the customer, some bankers grant a loan upon them on receiving a letter from the customer stating that certain speci fied goods are stored in his warehouse and are held to the order of the banker as security for the loan, and undertaking to repay the advance when the goods are sold. In such a case the banker is entirely de pendent upon the honour of the customer. It has been held that a letter of hypotheca tion by a debtor, agreeing to hold goods in trust for a banker and to pay over the pro ceeds when received, was a bill of sale, because it was a " declaration of trust with out transfer." The expression " bill of sale " includes a " declaration of trust without transfer." (See Section 4, Bills of Sale Act, 1878, under BILL. OF SALE.) (See DOCK WARRANT, TRUST RECEIPT.)