Harris v. Fairley

232 N.C. 551 | N.C. | 1950

DeviN, J.

The Farmville Bonded Warehouse Company, Henry Clark Bridgers, and the surety on the latter’s bond, who had been made parties defendant on the motion of the original defendant Fairley, appealed from the judgment sustaining the demurrers of the North Carolina Cotton Growers Cooperative Association and W. T. Lamm to their answer and cross-complaint. The propriety of the ruling below in this respect is the only question presented by the appeal.

An examination of the answer and cross-complaint of the appellants leads us to the conclusion that the allegations therein contained are insufficient to support an action for affirmative relief against the Cotton Growers Cooperative Association or W. T. Lamm.

The answer filed by these appealing defendants denied liability to the plaintiff for the cotton stored by him in defendant’s warehouse, but asserted, in the event they be held liable, that the Cotton Association and W. T. Lamm should be held liable over to appellants on the ground that the Association and Lamm surrendered the warehouse receipts representing the 127 bales of cotton referred to in the complaint, and received the cotton represented thereby. But it was also alleged that these receipts had been delivered by plaintiff Harris to the Cotton Association and when surrendered to appellants had been duly and properly endorsed.

The statute makes these warehouse receipts negotiable by written assignment and delivery, and declares that the validity of the negotiation of a receipt is not impaired by the fact that such negotiation was a breach of duty on the part of the person making the negotiation, if the person to whom the receipt was negotiated took the same for value, in good faith and without notice of the breach of duty. G.S. 27-51; G.S. 106-442; Cotton Mills v. Cotton Co., ante, 186, 59 S.E. 2d 570. Here, there is no allegation that impugns the good faith or title of the Cotton Association or of Lamm to the warehouse receipts covering plaintiff’s cotton. On the contrary, it affirmatively appears from appellants’ pleading that the Cotton Association received the warehouse receipts from the plaintiff himself, and that subsequently the receipts duly endorsed were surrendered to the Warehouse Company and the cotton delivered thereon. Thus the allegation by which appellants seek to avoid liability to the plaintiff would seem also to exonerate the Cotton Association and Lamm from liability under their cross-complaint.

It was argued on the hearing that plaintiff’s complaint alleged the cotton was removed from the warehouse as the result of nefarious transactions by G. S. Williams, the local manager, who wrongfully obtained the proceeds of thé'sale of the cotton through the Association, and that this, taken in connection with the allegations in appellants’ answer that Williams was also receiving agent of the Cotton Association, was sufficient to survive the demurrer. Whether by invoking the doctrine of aider and the principle that a demurrer requires search of the entire record the appellants may add those allegations in the complaint to their pleading against the Cotton Association need not be determined, for we observe that the appellants have denied the conversion of this cotton or wrongdoing on the part of Williams. Plaintiff sought recovery for the loss of his cotton only from defendant Fairley as State Warehouse Superintendent, and did not ask recovery against any of the defendants subsequently made parties.

There is no allegation against W. T. Lamm in the complaint, and the only reference to him in appellants’ pleading is that he surrendered warehouse receipts for 7 bales of plaintiff’s cotton, the receipts being properly endorsed, and received the cotton represented by the receipts. There was no allegation that the receipts were acquired by Lamm in any manner that would affect his title as holder of properly endorsed negotiable warehouse receipts.

The demurrer to the complaint, interposed ore terms in this Court by the appellants, cannot be sustained. The failure of plaintiff to take up his warehouse receipts when he delivered his cotton to the warehouse, if the allegations in the complaint bear that interpretation, would not alone he sufficient to relieve the warehouseman of liability for the removal of the cotton from the warehouse contrived by the fraud of the manager as alleged in the complaint. Lacy v. Indemnity Co., 193 N.C. 179, 136 S.E. 359; Northcutt v. Warehouse Co., 206 N.C. 842, 175 S.E. 165.

For the reasons stated we think the judgment sustaining the demurrers was properly entered, and must he

Affirmed.