Denton v. Shenandoah Milling Co., Inc.

• Decision Date: 12 July 1933
• Docket Number: 488.
• Citation: 170 S.E. 107,205 N.C. 77
• Parties: DENTON v. SHENANDOAH MILLING CO., Inc. (FIRST NAT. BANK OF HARRISONBURG, VA., Intervener).
• Court: North Carolina Supreme Court

170 S.E. 107

205 N.C. 77

DENTON v. SHENANDOAH MILLING CO., Inc. (FIRST NAT. BANK OF HARRISONBURG, VA., Intervener).

No. 488.

Supreme Court of North Carolina

July 12, 1933

Appeal from Superior Court, Mecklenburg County; Cowper, Special Judge.

Action by G. C. Denton, after whose death Helen B. Denton administratrix of his estate, was substituted as plaintiff against the Shenandoah Milling Company, Inc., in which the First National Bank of Harrisonburg, Virginia, intervened. Judgment for plaintiff, and intervener appeals.

Affirmed.

Bank cashier's testimony that bank purchased draft and owned it when suit to attached amount thereof as drawer's property was instituted held properly excluded; purchase and ownership thereof being questions for jury to determine.

On May 20, 1931, the Shenandoah Milling Company, Inc., drew a draft as follows: "The First National Bank--68--155. Harrisonburg, Va. May, 20, 1931. At sight pay to the order of The First National Bank of Harrisonburg, Va., at Harrisonburg, Va.-- $402.00--Four Hundred two & 00/100 Dollars. Value received and charge to the account of Shenandoah Milling Co., Inc. By: F. I. Reim--To--Goodwill Stores Deposit & Savings Bank, North Wilkesboro, N. C." Stamped on the back: "Collection--Pay to the Order of any bank or banker prior endorsements guaranteed May 21 1931. First National Bank, 68--155 Harrisonburg, Va.--68 -- 155--Wm. H. Byrd, Cashier." "This draft is a cash item and is not to be treated as a deposit. The funds obtained through its collection are to be accounted for to the drawer, and are not to be commingled with the other funds of collecting bank." On May 29, 1931, the Shenandoah Milling Company drew the following draft: "The First National Bank --68--155. Harrisonburg, Va. May 29, 1931. At sight pay to the order of the First National Bank of Harrisonburg at Harrisonburg, Va.--$1,008.24--One Thousand Eight & 24/100 dollars--Value received and charge to the account of Shenandoah Milling Co. Inc. By F. I. Reim--To--Cash & Carry Stores--Elkin National Bank, Elkin, N. C." Stamped on back: "Collection--Pay to the order of any bank or banker--Prior endorsements guaranteed--June 1, 1931--First National Bank, 68--155--Harrisonburg, Va.--68 --155--Wm. H. Byrd, Cashier." "This draft is a cash item, and is not to be treated as a deposit. The funds obtained through its collection are to be accounted for to the drawer, and are not to be commingled with the other funds of collecting bank."

The Goodwill Store paid the $402 draft, and before the proceeds were remitted, the plaintiff, G. C. Denton, claiming to be a creditor of Shenandoah Milling Company, sued out an attachment against said milling company and levied upon said sum of money. In like manner the Cash & Carry Feed Stores draft, amounting to $1,008.24, was paid to the Elkin National Bank and was attached by the plaintiff. The First National Bank of Harrisonburg, Va., intervened, claiming the proceeds of the draft by reason of the purchase of the same from the Shenandoah Milling Company. The cashier of the intervening bank testified that the bank acquired possession of these drafts "by purchase from the Shenandoah Milling Company Inc. The Shenandoah Milling Co., Inc., is a customer of our bank and it maintains an account with us at all times. It is true that we have acquired a number of other drafts from the Shenandoah Milling Company, Inc., in the course of its business relationship. We get drafts from them practically daily. When those drafts are forwarded to us they are placed to the credit of Shenandoah Milling Co. and are forwarded to the respective places for collection. They are, of course, endorsed to us. In the case here in question, there was a bill of lading attached to each of the drafts. The amount of those drafts was for the purchase price of flour, and the bills of lading evidencing the ownership of the flour were attached to the drafts. The drafts were endorsed to us and the amount thereof was credited to the Shenandoah Milling Co. We forwarded the drafts to the respective banks of North Carolina for presentation to the drawee. *** The place of business of Shenandoah Milling Co. is approximately twenty-five miles from our bank. They have been doing business with our banks *** for a period longer than ten years. I do not think I would have a right to say approximately, about how much cash balance they carry, usually with us, or what is their average daily balance, other than to say that they maintain a satisfactory account with us. Their deposit of drafts for collection with our bank is a matter of practically daily occurrence. These drafts are usually credited to their account; and they are permitted to draw on the proceeds of these drafts without any further question." In answer to questions propounded on cross-examination with reference to the course of dealing between the milling company and the bank, in the event the drafts were unpaid, the witness said: "In a case similar to this one, it is necessary for us to communicate with the Shenandoah Milling Co., Inc., and make some arrangements regarding the carrying of the item until such time as it is taken care of. (Q) Suppose, Mr. Byrd, a draft is definitely unpaid and refused, what is the course of the bank? Do they charge that draft back to the account of the Shenandoah Milling Co.? (A) Yes, sir, and return the bill of lading covering the security for the draft to the Shenandoah Milling Co., Inc., together with the...