256 F. 761 | 5th Cir. | 1919
PI. D- Bandy, in 1904 and prior thereto, was engaged at Monroe, Da., in buying and selling cotton. On August 15, 1904, Bandy discounted at the Monroe National Bank a draft for $9,000, drawn by him on Hubbard Bros. & Co., of New York. The body of the draft was in this form:
“Pay to the order of T. E. Flournoy, cashier, nine thousand dollars, value received, and charge the same to account of against 214 B/O.”
To the draft were attached, indorsed in blank, documents, after-wards ascertained to be forgeries, in the form of bills of lading for 214 bales of cotton, issued to Bandy by the Vicksburg, Shreveport & Pacific Railway Company, at Monroe, for shipment to New York via issuing company and Southern Pacific Railroad and steamship lines, consigned “to shipper’s order, notify Hubbard Bros.,” purporting to be signed by W. G. Wallace, then the agent of issuing company at Monroe. The draft was paid upon presentation. .
In September Bandy purchased at New Orleans 214 bales of cotton, which, under his instructions, were shipped, via the Southern Pacific Company steamship line, from New Orleans to New York; a bill of lading being issued “to shipper’s order, notify Hubbard Bros.,” the cotton having the same identifying marks as in the forged bills of lading for 214 bales. To cover the purchase price of the cotton, the seller drew a draft on Bandy, through the Ouachita National Bank, attaching bills of lading covering the 214 bales of cotton. Bandy gave his check on the bank for the amount; the check being charged to him, and the bills of lading being retained as security. The Southern Pacific Company, upon surrender of the forged bills of lading, delivered to Plubbard Bros. & Co., the 214 hales of cotton shipped from New Orleans.
About August 29, 1904, Bandy forwarded to Hubbard Bros, by registered mail, indorsed in blank, another forged bill of lading of the same character as the other forged instruments, for 100 bales of cotton. Bandy wrote Hubbard Bros. & Co. that he would draw against this bill of lading when he arranged for the shipment of other cotton.
Hubbard Bros. & Co. instituted in the Western district of Louisiana a suit against the Southern Pacific Company, and the two national banks involved, setting up the facts stated, together with other facts to be referred to, and sought an adjudication of the rights of all parties. The several claims may be thus stated:
(1) The Ouachita National Bank, through its liquidators, asked for a judgment against the Southern Pacific Company for the value of the 314 bales of cotton for which it held bills of lading, with interest from the date of its delivery to Hubbard Bros. & Co.
(2) The Southern Pacific Company sought judgment against Hubbard Bros. & Co. for the value of all of the cotton delivered to them on the forged bills of lading. Hubbard Bros. & Co. denied their liability for the cotton so delivered.
(3) Hubbard Bros. & Co. also -claimed that, in the event they were to be held liable to the Southern Pacific Company, they should have a judgment against the Monroe National Bank for the amount of the draft for $9,000 which they paid to that bank, with interest.
Judgment was rendered: In favor of the liquidators of the Ouachi-ta National Bank against the Southern Pacific Company for $17,232.-42, with interest at 5 per cent, from the respective dates of delivery of the cotton to Hubbard Bros. & Co. until paid; and in favor of the Southern Pacific Company against Hubbard Bros. & Co. for the same amount, with like interest; and against Hubbard Bros. & Co. on their claim against the Monroe National Bank.
Hubbard Bros. & Co. contend that, nothwithstanding the cotton was delivered to them on forged bills of lading, the Southern Pacific Company should not recover. Propositions are made: (1) That a concern issuing a bill of lading must be held to know its own signature, and must take the consequences of a mistake; (2) that the prior course of business, by which several shipments of cotton were delivered to Hubbard Bros. & Co. on forged bills of lading, constitutes negligence upon the part of the Southern Pacific Company, estopping them from recovery; (3) that the Southern Pacific Company is es-topped by the delay in presenting the claim against Hubbard Bros. & Co.
3. Discovery of' the forgery and institution of suit were within a reasonable time, and there is nothing to indicate that Hubbard Bros. & Co.- were damaged by delay.
The Claim against Monroe Bank.
At the time of the transaction, the Uniform Negotiable Instruments Raw was in force both in New York and Louisiana. Therein a bill of exchange is defined:
“A bill of exchange is an unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed and determinable future time, a sum certain of money to order or to bearer.” Consol. Laws N. Y. c. 38, § 210; Acts La. 1904, No. 64, § 126.
The act further provides :
“An unqualified order or promise to pay Is unconditional within the meaning of this chapter, though coupled with: (1) An indication of a particular fund out of which reimbursement is to be made, or a particular account to be debited with the amount; or (2) a statement of the transaction which gives rise to the instrument. But an order or promise to pay out of a particular fund is not unconditional.” Consol. Laws N. Y. c. 38, § 22; Laws La. 1904, No. 64, § 3.
Appellants agree that, under the English cases, the draft in question would he held a negotiable instrument. See Guaranty Trust Co. v. Hannay, 210 Fed. 810, 127 C. C. A. 360. But they insist that the law as developed in the United States is different. Appellants cite Hoffman v. Bank, 12 Wall. 181, 20 L. Ed. 366; Goetz v. Bank, 119 U. S. 551, 7 Sup. Ct. 318, 30 L. Ed. 515; Varney v. Bank, 119 La. 943, 44 South. 753, 13 L R. A. (N. S.) 337; and Springs v. Bank, 209 N. Y. 224, 103 N. E. 156, 52 L. R. A. (N. S.) 241. _ In each of these cases the drawee was held liable. In the opinion in each case was a suggestion that there was no reference in the face of the draft to the bills of lading. The expressions may properly be used in argument, but in neither case was the point now discussed under consideration, and no great weight can be accorded them. Other cases cited by appellant may be differentiated, or, if not, they are against the weight of recent authority.
The following cases apparently put the matter beyond doubt: Whitney v. Eliot Bank, 137 Mass. 351, 50 Am. Rep. 316; Redman v. Adams, 51 Me. 433; First Nat. Bank v. Lightner, 74 Kan. 736, 88 Pac. 59. In the last-named case the authorities are reviewed.
If the mere insertion of the words “against 214 B/C” in the body of the draft, without grammatical connection with the balance of the instrument, could, under any circumstances, render an otherwise ordinary draft a conditional order on a particular fund, that effect could not follow, in view of the facts developed in this case. The evidence discloses that, for a considerable time prior to the transaction here reviewed, there was a running account between Hubbard Bros. & Co. and Bandy, and at the date of the draft Bandy had a credit with Hub
The judgment is so modified that interest on the amount adjudged against the Southern Pacific Company in favor of the Ouachita National Bank, and against Hubbard Bros. & Co. in favor of the Southern Pacific Company, shall run from November 30, 1004, and, as so modified, it is affirmed.
Modified and affirmed.