Crosby v. Farose Trading Corp.

• Decision Date: 23 September 1946
• Docket Number: 36096.
• Citation: 27 So.2d 367,200 Miss. 369
• Court: Mississippi Supreme Court
• Parties: CROSBY v. FAROSE TRADING CORPORATION et al.

27 So.2d 367

200 Miss. 369

CROSBY v. FAROSE TRADING CORPORATION et al.

No. 36096.

Supreme Court of Mississippi

September 23, 1946

H H. Parker, of Poplarville, and White & Morse, of Gulfport, for appellant.

Bidwell Adams, Gardner &amp Gardner, and Oscar Backstrom, all of Gulfport, for appellees.

ALEXANDER, Justice.

Appellant is executor of the estate of V. B. Martin, deceased. Dr Martin entered into an agreement with J. E. Blevins for the sale of warehouse receipts covering one hundred barrels of whiskey in storage in the State of Kentucky. The consideration for such sale was 75 shares of stock of Morrison Cafeteria. The stock was never delivered, and the pleadings, interpreted by the briefs filed by appellant sustain the conclusion that, in lieu of delivery of the cafeteria stock, Dr. Martin was later delivered the note of Farose Trading Corporation in the sum of $4,363.94, secured by its mortgage upon certain real and personal property in the City of Biloxi.

Subsequent to execution of the mortgage, Farose Trading Corporation sold this property to one Frank Blevins and wife. This action was brought by Dr. Martin's executor to foreclose the mortgage as security for the note and decree for any deficiency. Frank Blevins and wife were made parties defendant, unquestionably because of their purchase of the mortgaged property. J. E. Blevins is not a party to this suit.

Complainant, to sustain his case, introduced the mortgage and note and the minutes of the corporation authorizing their execution. Thereupon defendant moved for decree and same was awarded dismissing the bill.

We do not adjudge the sufficiency of the mortgage as recordable, nor whether Frank Blevins and wife had actual notice of its execution. Nor do we examine the authority of the corporation to execute the note and mortgage in lieu of the obligation of J. E. Blevins to deliver the cafeteria stock.

We are of the opinion that Section 2612, Code 1942, precludes maintenance of the action in this State. This section is as follows: 'If any person shall trust or give credit to another for intoxicating liquors, he shall lose the debt, and be forever disabled from recovering the same or any part thereof; and all notes or securities given therefor, under whatever pretense, shall be void.' (Italics supplied.)

There is no allowable debate of the proposition that the sale of standard negotiable warehouse receipts covering whiskey is a sale of the whiskey. J. E. Blevins, for reasons best known to him, did not pay for same and converted the receipts into cash without carrying out his agreement or offering so to do.

We are not concerned with the validity vel non of the agreement to buy the whiskey, or the extent of the legal obligation to pay therefor. Our decision is not intended to affect the legal status of this obligation if pursued in courts other than our own. We are dealing solely with a procedural matter affecting the remedy. Therefore, whether the sale or contract with Dr. Martin was effected in this State or elsewhere is not now relevant.

Had the contract in question been for a money consideration, or evidenced by a note or other evidence of debt, few would question the application of Section 2612. Certainly, Dr. Martin falls in the category of those who 'shall trust or give credit to another for intoxicating liquors.' It is only by tracing the assumed obligation of the corporation only so far as the failure of J. E. Blevins to deliver the cafeteria stock, that the identity of the original obligation can be obscured.

To acknowledge that the corporation executed its note and mortage in lieu of J. E. Blevins obligation, is to haul into plain view the nature of the latter. Running through all the subsequent manipulations is the persisting and persistent debt owing to Dr. Martin for his whiskey. It would not be self-serving for the appellant to insist that this obligation did not persist lest he undermine his case by revealing a total absence of consideration moving to the corporation. There is no showing of any obligation resting upon the corporation to make good the promise to deliver the cafeteria stock. The relationship, personal and commercial, between the Frank Blevins, managing head of the corporation, and J. E. Blevins, is not made certain by testimony, but an assumption that they are personal and business strangers would invoke a coincidence defiant of reasonable and obvious deduction.

To sustain any obligation on the part of the corporation, we must follow it down to its foundation, the cornerstone of which is the sale of whiskey. We are minded to reassert the possibility of a continuing legal obligation upon the part of J. E. Blevins, whose relationship to the grantee of the mortgaged property has been made the subject of interesting but legally irrelevant comment by appellant.

Appellant yields to a normal impulse in inveighing against the deliberate defiance of an obligation to pay the estate of Dr. Martin the not inconsiderable sum of $4,363.94. We can follow only as far as the statute his contentions, made with a vehemence and logic which are seldom inspired by any but a just cause. Purely ethical considerations we are not competent to discuss nor decide.

The obligation of the corporation cannot be seen in its full stature without revealing and invoking a credit extended for a debt whose enforcement in this State the statute forbids. The learned chancellor was compelled to leave the parties where he found them. We are equally bound. Goodman v. Swett, 108 Miss. 224, 66 So. 535; Elkin Henson Grain Company v. White, 134 Miss. 203, 98 So. 531. See also Lemonius v. Mayer, 71 Miss. 514, 14 So. 33; Virden v. Murphy, 78 Miss. 515, 28 So. 851; Skinner Mfg. Co. v. Deposit Guaranty Bank, 160 Miss. 815, 133 So. 660; and Capps v. Postal Telegraph, etc., Company, 197 Miss. 118, 19 So.2d 491.

Affirmed.

SYDNEY SMITH, C. J., did not participate in this decision.

McGEHEE Justice (dissenting).

Section 2612, Code 1942, under which the appellant was denied relief in the trial court, is highly penal, and it is well settled by the uniform decisions of this Court, and those in other jurisdictions, that such a statute is to be strictly construed against a litigant invoking its protection. It provides, in effect, that a creditor shall lose the debt, and that a note, and any security taken therefor, shall be void only where the credit is extended for the purchase price of intoxicating liquors. The intent and purpose of our prohibition laws is to prevent the transportation into, and the possession and sale of, intoxicating liquors in this State.

In my opinion it can be said with better reason that the note and mortgage, which are sought to be foreclosed on property in this State, were given by the Farose Trading Corporation of New Orleans, Louisiana, to satisfy the written obligation undertaken by J. E. Blevins Company, of New Orleans Louisiana, to transfer and deliver to Dr. V. B. Martin, of Picayune, Mississippi, the 75 shares of Morrison Cafeteria preferred stock, than that the said note and mortgage were given to represent the purchase price of the intoxicating liquors called for by the warehouse receipts which Dr. Martin negotiated and delivered in New Orleans, Louisiana, unto the said J. E. Blevins Company in...