Live Stock State Bank v. Forrest City Grocer Co.
| Decision Date | 01 December 1924 |
| Docket Number | 21 |
| Citation | 266 S.W. 456,166 Ark. 474 |
| Parties | LIVE STOCK STATE BANK v. FORREST CITY GROCER COMPANY |
| Court | Arkansas Supreme Court |
Appeal from St. Francis Circuit Court; E. D. Robertson, Judge reversed.
Judgment reversed and cause remanded.
W. J Lanier and Stubenrauch & Hartz, for appellant.
Instruction 1A given by the court was in total disregard of the bills of lading, which were indorsed and transferred to appellant for full value, with the drafts attached and an inseparable part thereof. There was no attempt to vary the terms of either the two deposit slips or drafts; but appellant assuredly had the right to explain the circumstances surrounding the execution of both. It had purchased the drafts and was entitled to the proceeds thereof. 90 Ark. 439; 64 Ark. 224; 96 S.W. 1051; 79 Ark. 356; Ray on Negligence of Imposed Duties of Freight Carriers, § 25; 120 Ark. 491. Appellant having purchased the drafts, it was entitled to an instruction to the effect that, even though it had, on the 12th day of May, 1923, on deposit money belonging to the Midwest Hay Company, that would not entitle the plaintiff to judgment against appellant. 107 Ark. 603; 124 Ark. 536, and cases cited; 46 Ark. 537; 48 Ark. 267; 127 Ark. 545; 113 Ark. 72; 101 Ark 281; 48 Ark. 454; 147 Ark. 319.
C. W. Norton, for appellee.
The drafts were not indorsed by Midwest Hay Company, though drawn to its order. This fact is not only a strong circumstance indicating that the bank's receipt of the drafts was as a collecting agent merely, but it also leaves the legal title to the paper in the payee, without regard to what the intention of the parties may have been. C. & M. Dig., §§ 7796-97; 160 Ark. 421.
The testimony in this case is sufficient to support a finding that the Midwest Hay Company, a copartnership engaged in selling hay and grain in Kansas City, was indebted to the Forrest City Grocer Company. While so indebted, the grocer company ordered two cars of hay from the hay company. These cars were shipped from Kansas City on May 3 and May 4, and in due course reached Forrest City.
The bills of lading were made in the name of the hay company, and were indorsed by it. Separate drafts were drawn by the hay company for each car of hay, and the drafts were identical, except as to date and amount. The draft covering the first car of hay reads as follows: There was stamped on the back of each draft, with a rubber stamp, the following indorsement: On the face of each draft the following notation was stamped: The document attached to each draft was the bill of lading for the car of hay, to collect the price of which the draft was drawn. These drafts, with bills of lading attached, were sent by the Live Stock State Bank, of Kansas City, hereinafter referred to as the bank, to the First National Bank of Forrest City.
Upon the arrival of the cars of hay in Forrest City, the grocery company paid the drafts, took up the bills of lading, and unloaded and stored the hay, and commenced suit against the hay company for the debt due it, and garnished the proceeds of the drafts in the hands of the First National Bank of Forrest City as the property of the hay company.
The suit was begun in the court of a justice of the peace, and the hay company made no defense, and judgment was rendered against it by default, and no appeal was prosecuted by the hay company from that judgment. The bank, however, intervened in the justice court, and alleged that it was the owner of the proceeds of the drafts, and it appealed to the circuit court from a judgment adverse to it.
Upon the trial in the circuit court before a jury the following testimony was offered: It was shown that the hay company was a depositor and customer of the bank, and carried an active account there. The first draft was deposited on May 3 and the second on May 4, and each draft was deposited along with a number of other drafts. Each deposit was made on a deposit slip, which contained, at its top, the following recitals:
The officers of the bank testified that these deposits were made in the usual course of business, and that the bank became the absolute owner of each draft upon its deposit; that the bank gave the hay company full credit for the face of the draft, and permitted the hay company to check against the deposit, as would have been done had the deposit been in cash. This was the practice observed with all solvent depositors and customers, although it was understood that, if any item so deposited was not collected, it was charged back to the account of the depositor. The hay company became insolvent and ceased to do business with the bank, and the account was inactive after May 8, at which time the hay company's balance was $ 105.30, and this sum was checked out on June 1, thereafter.
Objection was made by the plaintiff grocer company to the admission of the...
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