May v. McGaughey

• Decision Date: 16 March 1895
• Citation: 30 S.W. 417,60 Ark. 357
• Parties: MAY v. MCGAUGHEY
• Court: Arkansas Supreme Court

30 S.W. 417

60 Ark. 357

MAY v. MCGAUGHEY

Supreme Court of Arkansas

March 16, 1895

APPEAL from Jefferson Circuit Court, JOHN M. ELLIOTT, Judge.

STATEMENT BY THE COURT.

The facts in this case are as follows: One Wyatt was a tenant of the appellees, H. C. McGaughey et al., during the year 1886 and they held his note for the sum of $ 810 for rent. Wyatt raised a crop on land of appellees, and, in order to obtain supplies for his use during the year, he mortgaged his crop to C. M. Neel. When the crop was matured, Wyatt gathered seventeen bales of cotton, and delivered them to Neel, in part payment of debt to him. Neel knew that the rent had not been paid, and, in order to arrange that matter, he had a talk with Wyatt and McGaughey. H. C. McGaughey, who seems to have acted for himself and the other appellees, agreed with Neel that if he would pay $ 300 of the rent, he would wait with him about two weeks for the remainder. Neel paid McGaughey the $ 300, and gave him his acceptance for $ 510 due the 15th of November, 1886.

At the time this transaction was had the cotton was already in the possession of Neel. After this, on November 5, 1886, Neel delivered the cotton to the St. L., A. & T. Ry. Co., to be transported to Richardson & May, at New Orleans, La. He received a bill of lading, in which he was named as consignor and Richardson & May as consignees. He attached this bill of lading to a draft on Richardson & May, the consignees, for an amount equal to the value of the cotton, and forwarded the same for collection. The bill of lading was received and the draft paid by Richardson & May on the 8th day of November 1886, while the cotton was yet in the hands of the railway company, awaiting transportation to them, and without any notice on their part of the landlord's lien. Neel failed in business about the 14th of November, 1886, and this cotton was attached by certain of his creditors as his property. Both the appellant and the appellees intervened. The appellant, as surviving partner of the firm of Richardson & May, claimed the right to hold the cotton for the payment of the amount advanced Neel on the bill of lading therefor. The appellees asserted that they had a lien on the cotton for the portion of the rent not paid. The decision of the chancellor was in favor of the appellees.

Decree reversed and cause remanded.

Rose Hemingway & Rose and Austin & Taylor for appellant.

1. By the arrangement made by McGaughey with Neel, he released his lien. It was clearly a novation. 1 Parsons, Cont. 219; 9 Ark 233; 37 Ark. 282; 2 Whart. Cont. sec. 854; 16 A. & E. Enc. Law, p. 868, note. By consenting to the sale of the crop to Neel, the landlord waived his lien. 1 Jones, Liens, sec. 579.

2. Even conceding McGaughey's lien, he could not pursue the cotton against Richardson & May, who bought of Neel without any notice of the lien. 2 Jones on Liens, sec. 578; Sand. & H. Dig. sec. 4804; 31 Ark. 131; 52 id. 158. Delivery to the carrier was delivery to the consignee. 44 Ark. 556; 53 id. 200. Neel was an accommodation drawer, and the paper could not be the foundation of a suit by McGaughey against him. Tied. Corn. Paper, sec. 158. May's title could not be litigated in a suit between McGaughey and Wyatt, as he was not a party. Bigelow, Est. p. 142.

J. M. & J. G. Taylor for appellee.

The taking of Neel's draft as collateral to the rent note did not release the lien. The cotton was at the depot awaiting shipment; it had not been delivered to Richardson & May; they had not purchased it; it was simply consigned to them by an ordinary bill of lading, upon which they made advances to Neel. Neel had notice of the lien. It was not a sale to Neel by McGanghey, for his draft was not paid. In some respects this case is like 34 Ark. 693. The fact that the landlord got part of the purchase price of the cotton was not a waiver of his lien. McGaughey never consented to anything more than a delivery of the cotton to Neel by Wyatt, taking his acceptance as collateral for balance of the rent note, the lien remaining intact. Richardson & May were not innocent purchasers. They were mere pledgees, and took subject to existing liens. (These transactions occurred prior to the act of 1887. Sand. & H. Dig., sec. 504, etc.) 44 Ark. 301; 56 id. 263; 101 U.S. 565. Neel still remained the owner of the cotton, with notice of the lien. 45 A. & E. R. Cases, p. 401; Sand. & H. Dig. secs. 4804, 4798.

OPINION

RIDDICK, J., (after stating the facts.)

The only question before us is whether the appellees have, as against Richardson & May, the consignees, a lien on the cotton for their rent. To determine this question, we need only look to the evidence to see whether the appellees consented that Neel might ship the cotton. If so, they have no lien against any one purchasing the cotton from Neel, or advancing money upon it as a security, in good faith, and without notice of the landlord's lien. Puckett v. Reed, 31 Ark. 131; Bledsoe v Mitchell, 52 Ark. 158; 1 Jones, Liens, sec. 579. On this point there seems to us to be little if any conflict in the testimony. Three persons were present at the time McGaughey agreed with Neel to wait two weeks for the payment of the remainder of the rent. Of these three, Wyatt and Neel, though they do not testify that any express authority was given Neel to ship the cotton, yet, both, in effect, say that the object they had in view in making the arrangement with McGaughey was to enable Neel to ship the cotton, and that it was understood by all parties that Neel would ship the cotton. McGaughey in his testimony almost admits this. After saying that Wyatt informed him that he had delivered the cotton in controversy to Neel, and requested witness to go with him to see Neel, that the rent might be arranged, he testified that, upon Neel's paying a portion of the rent, he agreed to wait on him ten or...