45 S.E. 1026 | N.C. | 1903
In August, 1901, the plaintiff bought by sample from defendants 118 bales of cotton, and in September the defendants delivered 40 bales thereof and drew a draft on the plaintiff with bill of lading attached for $574.48, which draft the plaintiff paid. The plaintiff alleged that the 40 bales did not come up to sample, and claimed damages in the sum of $285.92. The defendants are nonresidents, residing in Vicksburg, Mississippi. On 21 September the defendants shipped 50 bales of the lot of 118 bales, drawing draft with bill of lading attached for the contract price, $836.26. The draft was drawn on the Morehead Banking Company, Durham, N.C. "account of Willard Mfg. Co.," "W., 50 bales pickings, bill lading attached," and indorsed to the Merchants National Bank of Vicksburg. The plaintiff refused to pay the draft and attached the cotton as the property of the defendants Tierney Co. upon the claim for damages alleged to have been sustained by reason (632) of the failure of the 40 bales to come up to sample. The Merchants National Bank intervened, claiming title to the property, and gave the undertaking required by statute. The cotton was thereupon delivered to said bank. The defendants Tierney Co. filed no answer. His Honor submitted the following issues to the jury:
1. "Was the Merchants National Bank the purchaser for value of the draft for $836.26 and the bill of lading attached thereto covering the shipment of the 50 bales of cotton?" Answer: "No."
2. "Was the Merchants National Bank the purchaser for value of the draft for $574.48 and bill of lading attached thereto covering the shipment of the 40 bales of cotton? Answer: "No."
3. "What was the value of the lot of 50 bales of cotton at the time it was seized in this action?" Answer: "$398.85." *486
4. "What damage, if any, has the plaintiff sustained by reason of the cause of action set out in the complaint?" Answer: "$285.92, with interest from 27 September, 1901."
5. "Was the cotton attached by the plaintiff the property of the Merchants National Bank at the time of levying the attachment?" Answer: "No."
The interpleader bank objected to the first, second, third, and fourth issues; objection overruled, and the bank excepted.
The plaintiff introduced A. G. Cox, superintendent of the plaintiff company, who testified to the condition of the 40 bales of cotton and the amount of damage sustained thereby.
The interpleader bank introduced the deposition of W. S. Jones, cashier, who testified that the defendants had purchased from Metzger Bros. of Mobile the 50 bales of cotton in controversy, and they drew upon the defendants at Vicksburg for the price, $697.99; that (633) the interpleader bank advanced or loaned to the defendants the amount of the draft, and they were charged therewith on the books of the bank; that on 23 September, 1901, the defendants drew the draft for $836, as aforesaid. "This draft was discounted by the bank, and the proceeds, less discount, were credited to the defendants on the books of the bank on 28 September. The bank discounted or purchased this draft in pursuance of a contract with the defendants that they should deliver to the bank the bill of lading taken out by Metzger Bros. for said cotton, at Birmingham, Ala., by which said cotton was to be delivered to the order of Metzger Bros. by the Southern Railway Company at Willardsville, N.C. This bill of lading had been attached to the draft drawn by Metzger Bros. on the defendants and had been indorsed by them. Upon the payment of the draft the bill of lading had been delivered to the defendants, and in pursuance of said contract it was also indorsed by them and was attached to the draft drawn by them, as above stated. The draft with the bill of lading attached was forwarded to the Morehead Banking Company at Durham, and, upon payment of the same being refused, the draft and bill of lading were returned to the Merchants National Bank, the interpleader.
The amount paid by the bank in the purchase of this draft has never been repaid by the defendants. Metzger Bros., upon being advised that the Willard Manufacturing Company refused to pay the draft and take the cotton, because they alleged that it was defective, agreed that if the cotton was returned to them at Birmingham, free of any charges for freight, they would refund any amount that had been paid to them for the cotton by the defendants. *487
Thereupon the sale to the defendants, whose right had been acquired by the interpleader bank, was rescinded and the cotton returned to Metzger Bros. at Birmingham, and they returned to the interpleader bank $697.99, which was the sum that had been paid to them for (634) this cotton by the defendants. The transaction between the bank and the defendants was bona fide, by which the bank paid to Tierney Co. the sum of $830, being the amount of the draft, less discount, upon the delivery to them of the bill of lading, by which the bank became the sole and absolute owner of the draft and bill of lading. The witness was shown the draft for $574.48, dated 11 September, 1901, and he stated that the bank had held the same. He also stated that the interpleader bank discounted this draft and placed the proceeds, $571.48, to the credit of the defendants. The bill of lading was attached to the draft.
To the question, "How much money did your bank advance to Tierney Co. for the draft of $836.26?" the witness responded, $830." To the further question, "Did not your bank reserve the right to charge back against Tierney's account with your bank the amount you advanced or paid to him for said draft of $836.26?" he responded, "There was no such reservation; being indorsers of the debt, the defendants made themselves liable in case it was not paid; further than to require their indorsement, nothing was said." He testified that the bank had delivered the cotton to Metzger Bros. and received from them $697.99, less freight charges. The interpleader bank appealed from the judgment.
We think that the exception to his Honor's ruling in submitting the second issue in regard to the draft of $574.48 should be sustained. The question raised by the interplea on the part of the bank is correctly stated in the fifth (635) issue, to wit: "Was the cotton attached by the plaintiff the property of the Merchants National Bank at the time of levying the attachment?" Its ownership of the draft for $574.48 was entirely immaterial, and the submission of an issue in regard to it was calculated to prejudice the interpleader. His Honor, so far as the record shows, gave the jury no instruction in regard to the law by which they were to be guided in responding to this issue. The interpleader bank requested his Honor to charge the jury that if they believed the evidence to answer the first issue "Yes." We think that this instruction should have been given. It is true, as said by his Honor, that the burden of establishing its title to *488
the cotton was upon the interpleader. Wallace v. Robeson,
As we understand the evidence, the bank advanced to the defendants $697.99 with which to pay for this identical cotton, paying Metzger Bros.' draft, with bill of lading attached, for that amount. As a part of the transaction the same bill of lading accompanying this draft was attached to the draft for $836.26, drawn by the defendants to their own order and indorsed to the interpleader bank. In other words, the (636) defendants owed the bank $697.99, money advanced to pay for the cotton, and the proceeds of the draft in controversy were credited to them in discharge thereof, leaving a balance of $132.10 to the credit of the defendants, which was afterwards drawn out. This is the real transaction, stripped of the mysteries of bookkeeping, which are always open to explanation. Why, then, was the bank not the owner of the draft and the cotton upon account of which it was drawn, at least to the amount advanced therefor?
It is well settled that when the vendor of goods ships them, taking from the carrier a bill of lading to deliver to his own order, and thereupon draws a draft payable to his own order upon the vendee, attaching the bill of lading, and indorses to a third party such draft for value, the title to the goods vests in the indorsee at least to the extent of the amount advanced. Daniel on Neg. Instruments, sec. 1734 (a). The law is thus stated and cited with approval by Mr. Daniel: "When the vendor of goods consigns them to the purchaser for the price and delivers the bill carrier and, intending to resume the right of control over them, at the same time draws upon the purchaser for the price and delivers the bill of exchange, with the bill of lading attached, to an indorsee for a valuable consideration, the consignee, upon receipt of the goods, takes them subject to the right of the holder of the bill of lading to demand payment of the bill of exchange, and cannot retain the price of the goods on account of a debt due to him from the consignor." Emery v. Bank,
The plaintiff relies upon Packing Co. v. Davis,
In Bank v. McNair,
In Cotton Mills v. Weil,
The facts in these cases distinguish them from this record. We cannot see how the fact that the defendants indorsed the bill of exchange prevented the bank being a purchaser for value. This was no more than additional security for its payment and in no manner affected the title to the cotton. Nor can we see how the testimony of S. A. Ashe that the indorsement "had been changed by making it a special indorsement" could affect the question involved in the issue. A blank indorsement *491 may at any time be filled in to show who is the true owner of the bill. Daniel on Negotiable Instruments, sec. 694. The holder of a bill or note, indorsed in blank, may write over the indorsement any contract not inconsistent with the undertaking of the parties or the original contract. . . . In like manner, he may write over the blank indorsement in full to himself or any other person. 4 A. E., 268, where the authorities are collected. We do not find any evidence tending to (640) show that the draft was received for collection.
New trial.
CLARK, C. J., did not sit on the hearing of this case.
Cited: Mason v. Cotton Co.,