Ledwell v. Shenandoah Milling Co.
| Decision Date | 29 March 1939 |
| Docket Number | 235. |
| Citation | 1 S.E.2d 841,215 N.C. 371 |
| Parties | LEDWELL v. SHENANDOAH MILLING CO., Inc., et al. |
| Court | North Carolina Supreme Court |
Civil action to subject proceeds of draft with bill of lading attached, drawn by defendant through the Southern Bank of Norfolk on Howard-Bobbitt Company of Sanford, N. C., to satisfy a debt the plaintiff alleges is due and owing him by the defendants, which proceeds were seized under writ of attachment.
On May 10, 1938, the receivers of Shenandoah Milling Company shipped a carload of flour from Norfolk, Va., to Howard-Bobbitt Company, Sanford, N. C. At the same time the receivers drew a sight draft on Howard-Bobbitt Company, payable to the Southern Bank of Norfolk, for the purchase price of the flour in the sum of $913.03. Bill of lading was attached to the draft. The Norfolk Bank credited the amount of the draft to the account of the receivers and forwarded the draft for collection. Upon presentation of the draft to the drawee through the National Bank of Sanford it was paid May 12 1937. The plaintiff instituted this action May 11, 1938, and procured the issuance of a warrant of attachment, which was served upon the National Bank of Sanford, attaching the proceeds of said draft. The plaintiff seeks to have said sum condemned and applied to the satisfaction of a debt for services rendered he alleges is due him by the Shenandoah Milling Company.
After the service of the attachment the Southern Bank of Norfolk filed an interplea and bond in accord with the statute and the sum in the hands of the National Bank of Sanford was paid to it.
The cause came on to be heard in the court below on the issue of title to said fund raised by the interplea. Under the instruction of the court that: '. The jury answered the first issue, "For Collection," and found under a like instruction in answer to the second issue that the intervenor is not the owner of the proceeds of said draft. Thereupon, the court signed judgment against the intervenor and the intervenor appealed.
Langston Allen & Taylor, of Goldsboro, for appellant.
Gavin & Jackson, of Sanford, for appellee.
The draft, the proceeds of which are here involved, was made payable to the Southern Bank of Norfolk and was not endorsed by the intervenor. On the deposit slip issued to the depositor of the draft at the time there was printed There was entered thereunder the following: "B.L. S.D., Howard-Bobbitt Company, $913.03."
The vice-president of the intervenor, as a witness for intervenor, testified that the draft was brought to his bank May 10 and accepted as a deposit and the proceeds thereof credited to the account of defendants in their regular checking account; that the bank took the draft for value and that it has never been charged back and the bank has not been refunded by the Shenandoah Milling Company. The intervenor offered further evidence tending to show that, while the defendants at all times had on deposit in the intervenor bank a sum more than sufficient to permit the intervenor to charge the item back to the account of the Receivers without creating an overdraft, the defendants in fact withdrew from the account the proceeds of the draft and that the balance was created by other deposits.
In forwarding the draft for collection the intervenor, on the letter or remittance sheet, designated the Shenandoah Milling Company as the owner of the draft enclosed for collection.
The questions presented by the appeal are: (1) Is the intervenor the holder of said draft in due course for value as a matter of law, and (2), If not, is there conflicting evidence, requiring the submission of the cause to a jury under appropriate instructions?
The intervenor's witness, on cross examination, testified that if he handled the transaction at the time the draft was deposited he had no recollection thereof. If it be conceded that this rendered incompetent his former testimony, there was no motion to strike. Had a motion to strike been made and allowed the intervenor would have been at liberty to offer its agent who actually handled the transaction. Under these circumstances we are required to consider the question involved as if this testimony, insofar as it is pertinent, was competent, giving due consideration thereto, together with the other evidence offered, to determine the questions presented. Morgan v. Royal Benefit Society, 167 N.C. 262, 83 S.E. 479.
The appellant earnestly contends that the contract under which the Southern Bank of Norfolk received the draft from the defendants was made in Virginia and that the Virginia law is controlling. As to this, we do not take issue. It further contends, however, that under the Virginia law the passing of the draft to the appellant vested title thereto in the bank as a matter of law. In support of this position, appellant offered in evidence and relies upon McAuley v. Morris Plan Bank of Virginia, 155 Va. 777, 156 S.E. 418, and Fourth National Bank of Montgomery v. Bragg, 127 Va. 47, 102 S.E. 649, 11 A.L.R. 1034. After an examination of these and other Virginia cases we are of the opinion that appellant's position in this respect is not sustained.
In Fine v. Receiver of Dickenson County Bank, 163 Va 157, 175 S.E. 863, 864, 94 A.L.R. 1393, the Virginia court declares the legal effect of a deposit made under a deposit slip in language identical with the one involved in the instant case. The plaintiff was a regular customer of the bank. The check was deposited and credited to the depositor's account prior to insolvency of the bank and paid after appointment of receivers. It is said by the court: ...
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