Davenport v. RALPH N. PETERS & COMPANY
| Decision Date | 08 October 1966 |
| Docket Number | Civ. No. 1874. |
| Citation | 274 F. Supp. 99 |
| Court | U.S. District Court — Western District of North Carolina |
| Parties | P. W. DAVENPORT, Tax Collector for the City of Charlotte and Mecklenburg County, the City of Charlotte, and Mecklenburg County, Plaintiffs, v. RALPH N. PETERS & COMPANY, a Limited Partnership, C & T Refinery, Inc., a Corporation, and the Chase Manhattan Bank, a Banking Corporation, Defendants. |
COPYRIGHT MATERIAL OMITTED
COPYRIGHT MATERIAL OMITTED
Thomas A. Lockhart, Charlotte, N. C., for defendant. Moncure & Cabell, Richmond, Va., of counsel.
FINDINGS OF FACT
From the evidence adduced at trial, all of which was offered by plaintiffs except the 145 negotiable warehouse receipts introduced by defendants, the court finds facts:
1. On March 2, 1964, plaintiffs filed complaint in the above action in which plaintiffs alleged, on information and belief, that on January 1, 1963, the defendant Ralph N. Peters & Company, hereinafter called "Peters", "was the owner" of 50 negotiable warehouse receipts, sometimes hereinafter called the "1963 receipts", each representing 60,000 pounds of cottonseed oil stored at C & T Refinery, Inc. in Charlotte, Mecklenburg County, North Carolina, having an aggregate market value of $90,558.00 on January 1, 1963, and that on January 1, 1964, Peters "was the owner" of 145 said negotiable warehouse receipts, sometimes hereinafter called the "1964 receipts", having a then aggregate market value of $901,320.00, and in the complaint plaintiffs prayed the court to declare a lien "on the vegetable oil in the possession of C & T Refinery, Inc. and owned by the Defendant, Ralph N. Peters" for taxes claimed by plaintiffs on account of the vegetable oil situate in Mecklenburg County on January 1, 1963, and January 1, 1964, represented by the 1963 and 1964 receipts.
2. Also, on March 2, 1964, a temporary restraining order and attachment was signed and issued by the court in which the court ex parte found various facts from the complaint, including "that the Defendants, Ralph N. Peters and The Chase Manhattan Bank, have ownership and possession of 145 negotiable warehouse receipts indicating ownership of the property hereinafter described", and, based upon its findings, including that herein quoted, the order directed:
3. A notice of levy directed to C & T Refinery, Inc. was issued by the United States Marshal pursuant to the above order, and it specified:
"You (C & T Refinery, Inc.) are notified that a lien is hereby created on all the tangible property of the Defendant, Ralph N. Peters, in your possession, and that if you surrender the possession of, or transfer to anyone, any property belonging to the Defendant, Ralph N. Peters, or if you pay any debt you owe the said Defendant, unless the same is delivered or paid to me or to the Court for such proper disposition as the Court may determine, you will be subject to punishment as for contempt, and that judgment may be rendered against you for the value of such property not exceeding the full amount of Plaintiffs' claim and costs of the action."
4. On March 13, 1964, a consent order was entered which changed the style of the case and substituted for the name "Ralph N. Peters" the name "Ralph N. Peters & Co., a limited partnership", as a proper defendant. Counsel for defendants waived requirement of additional service of process upon Peters. The temporary restraining order and attachment was "continued for a period of 30 days after the date of this order or until such time as a bond in the amount of $25,000.00 shall be filed to assure the payment of the liability, if any, of the defendants". Upon filing the bond, counsel for Peters and Chase were authorized to enter a personal appearance on behalf of said defendants. The consent order stated:
5. Pursuant to the consent order, bond was filed on April 13, 1964, and the property was released from the attachment, and Ralph N. Peters & Company and The Chase Manhattan Bank, hereinafter called "Chase", made a personal appearance in the action.
6. Answer was filed by the defendants, Peters and Chase, on May 4, 1964, and an amended answer was filed by said defendants on the 11th day of February, 1966.
7. One of the plaintiffs, P. W. Davenport, is the duly appointed tax collector for the City of Charlotte and Mecklenburg County, and the other plaintiffs, City of Charlotte and Mecklenburg County, are bodies politic.
8. The matter in controversy exceeds, exclusive of interest and costs, the sum of $10,000.00. The total amount of taxes claimed by plaintiffs for the year 1963 is $1,695.25, with interest and advertising of $263.26 through the month of June 1966, for a total of $1,958.51, and taxes for the year 1964 in the amount of $18,559.91, with interest and advertising of $1,763.69 through June 1966, for a total of $20,323.60, for a combined total of taxes for both years, with interest and advertising through June 1966, of $22,282.11. (T. p. 27).
9. C & T Refinery, Inc., hereinafter called "C & T", is a Virginia corporation having its principal and only office and place of business in the State of North Carolina in Charlotte. C & T is in business to refine and make into an edible oil crude oil from soy beans, corn oil, peanut oil, and cottonseed oil—all vegetable oil. C & T refines oil purchased in "crude stage" or purchases refined oil. (Drudge Deposition, August 26, 1964, pp. 3 and 4). In addition, C & T sells "futures contracts" in cottonseed oil and is a bonded warehouse for delivery of "once refined" cottonseed oil on the New York Produce Exchange. (Drudge Deposition, August 26, 1964, p. 8).
10. C & T has large storage tank facilities at its Charlotte plant sufficient to store approximately 300 tank cars of cottonseed oil, each tank car representing 60,000 pounds of oil. When C & T is prepared to deliver the oil, it issues negotiable receipts, each representing 60,000 pounds of cottonseed oil, and sells them, as owner, through its agent or broker, on the New York Produce Exchange. All such negotiable warehouse receipts are subject to the rules of the New York Produce Exchange and the North Carolina Uniform Warehouse Receipts Act. The oil is of a fungible nature, and under the rules of the New York Produce Exchange all oil of like quality is co-mingled in storage tanks. The oil is of a nature that is subject to deterioration immediately upon refinement into the "once refined" stage, but it can remain in the storage tanks at C & T for in indeterminant time. The rules of the New York Produce Exchange require that a like grade of oil be available for delivery upon surrender of the negotiable warehouse receipts.
11. All of the receipts representing ownership of the oil which plaintiffs seek to assess with 1963 and 1964 city and county ad valorem taxes in this action were sold by C & T through its broker, Goodbody & Company. All of the 1963 and 1964 receipts stated on the face of the receipts that the oil represented by the receipts was located in the warehouse of C & T in Charlotte, North Carolina. C & T had oil stored at various locations in other states from time to time during the period in question, but C & T had at all times from the date of issuance of 1963 and 1964 receipts a sufficient amount of oil represented by the 1963 and 1964 receipts located at its storage facility in Charlotte to deliver the oil at Charlotte in the event of surrender of the receipts for the oil and the rules of the New York Produce Exchange required this. On January 1, 1963, and January 1, 1964, C & T had no other "once refined" oil stored outside of Charlotte, North Carolina. At all times during 1963 and 1964, the oil which was stored outside of Charlotte, North Carolina, was stored for the account for some other negotiable receipt or receipts than the ones in question. (Drudge Deposition, December 16, 1964, p. 12).
12. Once the 1963 and 1964 receipts were sold by Goodbody & Company, the relationship of C & T to the oil changed from "owner" to "warehousemen". C & T did not know who bought the 1963 and 1964 receipts, but, when they were sold, C & T found out who was the recipient of the receipts, because that was the party to whom C & T began billing storage charges on the oil then held by C & T as warehouseman. (Drudge Deposition, August 26, 1964, p. 9; T. pp. 59, 64, and 65).
13. The warehouse receipts, once issued, are negotiable, and it is customary in the trade that the receipts can "trade hands freely with or without endorsement on the receipt". (T. p. 64). All of the 1963 and 1964 receipts representing the oil stored in Mecklenburg County were endorsed many times, some as many as seventeen to twenty times, and none of the endorsements are dated. None of the endorsements were to Chase Manhattan Bank, although all the...
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Davenport v. Ralph N. Peters & Co.
...money to Peters, are the questions to be decided. The district court gave judgment against Peters for $22,282.11. Davenport, Tax Collector v. Ralph N. Peters & Co., 274 F.Supp. 99 (W.D.N.C.1966). We I Detailed findings of fact, not contested by the parties on appeal, were made by the distri......