Latham v. Spragins

• Decision Date: 28 May 1913
• Parties: LATHAM v. SPRAGINS et al.
• Court: North Carolina Supreme Court

78 S.E. 282

162 N.C. 404

LATHAM v. SPRAGINS et al.

Supreme Court of North Carolina

May 28, 1913

Appeal from Superior Court, Guilford County; Peebles, Judge.

Action by J. E. Latham against J. D. Spragins, in which the Elk Horn Bank & Trust Company interpleaded. From a judgment for plaintiff, the interpleader appeals. New trial ordered.

Bank discounting draft to which bill of lading was attached, and depositing net proceeds to drawer's credit in extinguishment of a debt due it, held to be a purchaser for value, and to have acquired title to the property represented by the bill of lading.

Civil action tried upon these issues:

"(1) Is the Elk Horn Bank & Trust Company the owner and entitled to the possession of the property in controversy? Answer No.

"(2) What damage, if any, is the plaintiff entitled to recover of J. D. Spragins, defendant? Answer: One thousand four hundred sixty-eight dollars and forty-four cents ($1,468.44), with interest from October 31, 1910.

"(3) What was the value of the cotton seized and replevied in this action? Answer: Sixteen hundred seventy-three dollars and twenty-two cents ($1,673.22)."

From the judgment rendered, the interpleader, the Elk Horn Bank & Trust Company, appealed.

S. Clay Williams, of Greensboro, for appellant.

King & Kimball and Thos. S. Beall, all of Greensboro, for appellee.

BROWN J.

The plaintiff recovered judgment in this action against the defendant Spragins for damages in sale of cotton. Plaintiff also sued out in this action a writ of attachment and seized a lot of cotton at Greensboro. The Elk Horn Bank & Trust Company interpleaded, claiming the cotton. Spragins shipped the cotton attached to plaintiff at Greensboro, and drew on him with bill of lading attached. The draft was payable to and discounted by the interpleader, and the net proceeds placed to Spragins' credit. This draft with bill of lading attached was duly presented, and, payment being refused, it was protested and returned to the interpleader, and charged up to Spragin's account.

The interpleader requested the court to charge the jury as follows: "If you believe the evidence of the witnesses J. D. Spragins and W. E. Barkman, whose depositions have been read to you on behalf of the interpleader, you shall answer the first issue 'Yes." D' This was refused, and interpleader excepted.

His honor charged as follows: "The bank has shown no evidence sufficient to show that they were the owners of that cotton. They were not out any money. Spragins owed them already, and they just took that draft and credited his account with it, and when it came back unpaid, they charged it back to him, and they were in the same fix after the transaction as before, and the Supreme Court has held that don't constitute a bank a purchaser for consideration; and you will answer that issue 'No."D' To this charge the interpleader excepted.

It is well settled that, when the vendor of goods consigns them to the purchaser, taking a bill of lading from the carrier and, intending to resume the right of control over them, at the same time draws upon the purchaser for the price and delivers the bill of exchange with the bill of lading attached to an indorsee for a valuable consideration, the consignee, upon receipt of the goods, takes them subject to the rights of the holder of the bill of lading to demand payment of the bill of exchange, and cannot retain the price of the goods on account of a debt due to him from the consignor. Manufacturing Co. v. Tierney, 133 N.C. 636, 45 S.E. 1026; Mason v. Cotton Co., 148 N.C. 498, 62 S.E. 625, 18 L. R. A. (N. S.) 1221, 128 Am. St. Rep. 635.

It is contended, however, that in any view of the evidence the interpleader is not a bona fide purchaser for value, but that the transaction constituted merely a bailment for collection.

The cashier, Barkman, testifies as follows: "On September 8 1910, I had a transaction in my office at said bank with Mr. J. D. Spragins, in regard to a cotton draft drawn on J. E. Latham, at Greensboro, N. C., on that date. At that time the five bills of lading, referred to by Mr. Spragins in his testimony and marked 'Exhibits A, B, C, D, and E,' were delivered to me by Mr. Spragins, attached to the draft for $1,793.35, drawn by said J. D. Spragins on J. E. Latham, Greensboro, N.C. The draft delivered to me was the same referred to by Mr. Spragins in his testimony, and marked 'Exhibit F.' The bills of lading were assigned to me and delivered with the draft, and I paid J. D. Spragins the sum of $1,793.35, less the usual exchange for the same. We had no agreement of any...