Burrton State Bank v. Peasemoore Milling Co.

• Decision Date: 01 April 1912
• Citation: 145 S.W. 508
• Parties: BURRTON STATE BANK v. PEASE-MOORE MILLING CO.
• Court: Missouri Court of Appeals

145 S.W. 508

BURRTON STATE BANK v. PEASE-MOORE MILLING CO.

Springfield Court of Appeals. Missouri.

April 1, 1912.

1. CARRIERS (§ 58*)—BILL OF LADING WITH DRAFT ATTACHED—PAYMENT.

Where defendant purchased corn and by mistake received through the mail a bill of lading with a draft attached, payable to plaintiff bank, such draft was prima facie notice to defendant that the price was claimed by the bank; and where defendant remitted direct to the seller it was liable to the bank for the amount of the draft.

2. SALES (§ 202*)—TRANSFER OF TITLE—PAYMENT OF PRICE.

Where a draft, payable to a bank, was attached to a bill of lading for a car of corn purchased by defendant, and these papers by mistake came into defendant's hands, defendant did not acquire title to the corn until it had paid the draft.

3. CARRIERS (§ 58*)—BILL OF LADING—INDORSEMENT—TRANSFER OF TITLE.

Where the seller was credited by plaintiff bank with the full amount of the draft, which thereupon became subject to the seller's check, the bank became the owner of the draft and bill of lading, and was entitled to sue for the price of the corn, notwithstanding the draft contained a provision that the bank was not responsible for the quantity, quality, or delivery of the goods, but acted only as the medium for collection.

Appeal from Circuit Court, Howell County; W. N. Evans, Judge.

Action by Burrton State Bank against the Pease-Moore Milling Company. Judgment for defendant, and plaintiff appeals. Reversed and remanded, with directions.

J. N. Burroughs, of West Plains, for appellant. R. S. Hogan and Green & Wayland, all of West Plains, for respondent.

GRAY, J.

The plaintiff is a banking corporation located at Burrton, Kan., at which place, at the time this controversy arose, was a business concern known as the Burrton Grain Company. The defendant was a milling company, doing business at West Plains, this state. The Knight Brokerage Company was doing a grain brokerage business at Cherokee, Kan. In May, 1910, the Burrton Grain Company received an order from one Knight, the owner of the Brokerage Company, to ship a car of corn to the Star Milling Company at Mountain Grove, this state. The car was forwarded by the Grain Company, with draft and bill of lading attached. The corn was refused at Mountain Grove by the Milling Company, for the reason that the invoice did not cover the kind of grain ordered. The Grain Company immediately notified Knight, who instructed the Grain Company to issue a new draft and bill of lading on the defendant company at West Plains, to which point the car of corn would be forwarded. The Grain Company issued a new draft on the defendant company, with new bill of lading attached, and forwarded the same to the First National Bank at West Plains for collection. The draft was dated June 11, 1910, and was presented to the Milling Company by the bank for payment, and, payment being refused, was protested on June 16th.

On the day the draft was issued, the Grain Company mailed to the Milling Company an invoice of the car of corn. The Milling Company claimed payment of the draft was refused because it had purchased no corn from the Grain Company, and none was at West Plains at the time to be delivered. It appeared, however, from the testimony that on June 16th the Milling Company wrote the Grain Company, stating that the car of corn was on the track at West Plains; but there were extra freight charges and demurrage against the car, and the price was three cents too high. A few days later negotiations were resumed between the Brokerage Company and the defendant, and an agreement for the purchase of the corn was made. On June 23d, a second draft on defendant was issued by the Grain Company, and it and the bill of lading were assigned and delivered to plaintiff. The draft was for the sum of $474, and which amount was, by the bank, placed to the credit of the Grain Company, and entered in its passbook.

The second draft with the bill of lading and a letter to the bank at West Plains (and, according to plaintiff's testimony, all inclosed in a single envelope) came into the hands of the Milling Company about the 25th or 26th of June. The plaintiff claimed they were mailed to the bank at West Plains; but it seems the bank never received them. The plaintiff's theory was that by mistake the envelope was addressed to the defendant, instead of the bank, or that, through the mistake of the post office employés at West Plains, it was deposited in the box of the defendant. The evidence showed that the boxes of the bank and the Milling Company were adjacent. The defendant claimed it received the bill of lading through the mail about the 25th or 26th of June; that the envelope was opened and destroyed, and that the defendant then took the draft and bill of lading and surrendered the latter to the railroad company, and thereupon the car of corn was delivered to it. The defendant kept the draft, and in a day or two remitted to the Brokerage Company for the car of corn, and refused to pay the plaintiff, and this suit was instituted in the circuit court of Howell county to recover for the corn.

The petition is in two counts. The first alleges that the Grain Company shipped the defendant a car of corn, which defendant had agreed to receive and pay for on delivery; that the Grain Company issued a draft on defendant for the sum of $474, the price of the corn, and with bill of lading attached, for value, assigned both the draft and bill of lading to the plaintiff, and thereby plaintiff became the owner of the draft and bill of lading, and entitled to the car of corn, or the proceeds thereof; that the defendant, without paying for the corn, and with knowledge of plaintiff's ownership of said draft and bill of lading, took possession of the corn and appropriated the same to its own use, and fails and refuses to pay plaintiff for said corn; that on account thereof the defendant owes and stands indebted to plaintiff in the sum of $474, for which it prays judgment, with costs. The second count charges that the defendant converted the corn, and prays for damages in the sum of $474, with interest. The case was tried before a jury, resulting in a verdict in favor of the defendant, from which the plaintiff appealed.

The defendant claimed that it purchased the corn of the Brokerage Company with no knowledge of the plaintiff's claim thereto, and that without such knowledge it paid the Brokerage Company for the corn. If this is true, or if there is any substantial evidence in support of it, the issue was for the jury. The defendant admits, however, that before it got possession of the corn it received, through the mail, the bill of lading therefor, and a draft attached thereto, for the car of corn, each of which showed that they had been assigned to the plaintiff. This made a prima facie case that the money for the corn was claimed by the plaintiff. Scharff v. Meyer, 133 Mo. 428, 34 S. W. 858, 54 Am. St. Rep. 672; Webster v. Bear, 141 Mo. App. 531, 125 S. W. 815; Alabama Bank v. Railroad, 42 Mo. App. 284; Smith Co. v. Railroad, 145 Mo. App. 394, 122 S. W. 342.

In order for the defendant to get the car of corn, it was necessary for it to present to the railroad company the bill of lading. This bill of lading showed that the consignor was the Burrton Grain Company, and that that company had assigned its interest in the bill of lading and the draft attached thereto to the plaintiff. The bill of lading disclosed that the corn was consigned to the order of the Grain Company, with instructions to notify the defendant company. In other words, the transaction was one that is carried on every day where grain is shipped from one person to another; and there was nothing unusual about the transaction, except that the draft and bill of lading were received by the defendant, instead of the bank at West Plains.

Mr. Tiedeman, in his work on Commercial Paper (section 494), says: "Very often, for the protection of the vendor, the bill of lading for the goods shipped is sent to the vendee, attached to a bill of exchange for the purchase money; the object being to make the passing of title to the goods contingent upon the honoring of the bill of exchange. The transfer of the bill of lading, in such a case, is conditional. If it is sent direct to the vendee with an indorsement of the bill of lading to the vendee, together with a bill of exchange on him for the purchase money, the vendee does not acquire title to the goods until he has honored the bill of exchange. And this is also true where, as is the more common custom, the bill of lading is attached to a bill of exchange on the vendee, and both are sent to a correspondent for the collection of the draft, and a delivery of the bill of lading upon payment of the draft. In such cases, the consignee must honor the bill of exchange or surrender the goods."

In Greenwood Grocery Co. v. Canadian County Mill & Elevator Co., 72 S. C. 450, 52 S. E. 191, 2 L. R. A. (N. S.) 79, 110 Am. St. Rep. 627, 5 Ann. Cas. 261, the Supreme Court of South Carolina said: "As between the vendor and purchaser, the...