Charles R. Allen, Inc. v. Island Co-op. Services Co-op. Ass'n, Limited
Decision Date | 08 June 1959 |
Docket Number | No. 17540,CO-OPERATIVE,17540 |
Citation | 109 S.E.2d 446,234 S.C. 537 |
Court | South Carolina Supreme Court |
Parties | CHARLES R. ALLEN, INC., Plaintiff-Respondent, v. ISLANDSERVICES COOPERATIVE ASSOCIATION, LIMITED, Defendant, and The Bank of Nova Scotia, Appellant. |
Mitchell & Horlbeck, Barnwell, Whaley & Stevenson, Charleston, for appellant.
Stoney & Stoney, Charleston, for defendant.
Sinkler, Gills & Simons, Charleston, for respondent.
Charles R. Allen, Inc., a South Carolina corporation, the respondent herein, brought this action against Island Co-Operative Services Co-Operative Association, Ltd., a Canadian corporation, hereinafter referred to as 'Island Coop.', to recover damages for breach of contract.
It aappears from the record that Island Coop. sold some seed potatoes to Charleston County Wholesale Vegetable Market, Inc., of Charleston, South Carolina, for a purchase price of $19,620. It appears that the potatoes were shipped to John T. Leonard, agent of Island Coop., for delivery to the vegetable market. After the potatoes had been shipped by boat, Island Coop. did, on February 7, 1955, draw a draft on the Vegetable Market of Charleston for the purchase price of said potatoes in the amount of $19,620, payable to the order of The Bank of Nova Scotia, at Charlottetown, Prince Edward Island, Canada, the appellant herein. Island Coop. offered the aforesaid draft, along with other drafts, to the appellant for discount. This drafts, to the appellant for discount. counted by the appellant on February 7, 1955, was accompanied by the following agreement:
The appellant endorsed the draft in question and forwarded same through its correspondent, The Bank of New York, to the South Carolina National Bank of Charleston for collection. The draft was paid by the drawee on February 14, 1955, and the proceeds thereof were immediately attached by the Sheriff of Charleston County, South Carolina, as the property of Island Coop.
After the attachment, the Bank of Nova Scotia served a claim upon the respondent, stating that the proceeds of the draft which had been attached belonged to it. Island Coop. made a special appearance for the sole purpose of objecting to the jurisdiction of the Court and moved to vacate and set aside the service of the summons upon the ground that it did not own the property attached. The respondent served notice upon the appellant that it denied and would contest the claim of appellant to the proceeds of the draft, and gave notice that it would move for an order framing an issue on the question of whether the Bank of Nova Scotia had any legal or equitable interest in the proceeds of the draft, and to refer this issue to the Master of Charleston County for the purpose of taking the testimony thereabout.
Upon a hearing being held on the motion of the Coop. to set aside the service of the summons, the respondent argued that an issue of who was entitled to the proceeds of the draft should be framed and referred to the Master. This hearing resulted in an order of the lower Court vacating and setting aside the service of the summons upon Island Coop. on the ground that it had no interest or equity in the proceeds of the draft, and that the appellant bank was the outright owner of the said draft. Thereafter, the respondent here made a motion for a new trial on the ground of after discovered evidence, and renewed its motion that the matter be referred for the taking of testimony regarding the ownership of the proceeds of said draft. This motion was refused. The respondent appealed from the two orders of the lower Court to this Court. The appeal was based upon the question of whether an issue should have been framed for trial as to the ownership of the proceeds of the draft. In reversing the orders of the lower Court and in remanding the case for the trial of the issue of the ownership of the attached property, we said:
After this case had been remanded to the lower Court, and in compliance with the mandate of this Court, the lower Court issued an order referring the cause to the Master of Charleston County to take the testimony and to report his recommendations thereon upon the following issu:
'Was the Bank of Nova Scotia, at the time of the attachment on the 14th day of February, 1955, the owner of the proceeds of the draft in the amount of $19,620.00, dated February 7, 1955, drawn by the Defendant as Drawer on Charleston County Wholesale Vegetable Market, Inc., and payable to the order of the Bank of Nova Scotia, at Charlottetown, PEI, which proceeds of said draft, when paid by the Drawee, were attached in the hands of the South Carolina National Bank on the said 14th day of February 1955, at the instance of the Plaintiff in this suit?'
The said order of reference further provided in connection with the issue above framed for trial, that the burden of proof should rest upon the respondent to show ownership of said draft by Island Coop. rather than upon the appellant for whom as payee The South Carolina National Bank, as collecting agent, had possession of the property attached. There was no appeal from this order.
The Master of Charleston County held several references, at which testimony of various persons was taken and many documentary exhibits introduced. The appellant introduced its testimony by depositions.
The master filed his report on March 18, 1958, in which he found that the appellant had taken the draft in question as an agent for collection, rather than as a purchaser. He, therefore, sustained the attachment and recommended that the respondent be allowed to proceed with the trial of this case on the merits.
The appellant filed numerous exceptions to the report of the Master, contending that the Master was in error in holding that the Bank of Nova Scotia had taken the draft in question for collection, rather than as an outright purchaser, that the law of Canada controlled, and the Master had committed error in admitted certain matters into evidence. The exceptions to the report of the Master were argued before the Honorable T. B. Greneker, Presiding Judge, on April 25, 1958. Thereafter, the Presiding Judge filed a decree overruling all of the exceptions to the report of the Master and confirmed same. The case is before this Court upon twenty-six exceptions to the order of the Presiding Judge.
In considering the questions raised in this case, it should be kept in mind that if Island Coop. had an interest in the proceeds of the draft hereinbefore referred to, it was subject to attachment. In the case of Charles R. Allen, Inc. v. Rhode Island Ins. Co., 217 S.C. 296, 60 S.E.2d 609, 612, this Court said:
'In Pelzer Mfg. Co. v. Pitts & Hartzog, 76 S.C. 349, 57 S.E. 29, 33, 11 Ann.Cas, 665, the Court, after analyzing the various provisions of our attachment statute, said that the obvious intention
The respondent in this case, being an attaching creditor, could acquire no greater right in the proceeds of the draft in question than Island Coop. had. In the case of H. J. Baker & Bro. v. Doe, 88 S.C. 69, 70 S.E. 431, 433, 34 L.R.A.,N.S., 510, it was held as follows:
The jurisdiction of the lower Court was obtained by virtue of the attachment of the proceeds of the draft in question. If Island Coop. had no interest in the proceeds of the draft it is fatal to jurisdiction and the attachment should have been set aside. Cleveland v. Cannady, 112 S.C. 477, 100 S.E. 147; 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; La Varre v. International Paper Co., D.C., 37 F.2d 141.
The basic question for determination in this case is whether the appellant, Bank of Nova Scotia, was the absolute owner of the proceeds of the draft at the time of the attachment of the funds by the respondent. If the appellant was the owner thereof, and Island Coop. had no interest therein, then this...
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