McGee v. F. W. Poe Mfg. Co.
| Decision Date | 23 May 1935 |
| Docket Number | 14071. |
| Citation | 180 S.E. 48,176 S.C. 288 |
| Parties | McGEE et al. v. F. W. POE MFG. CO. |
| Court | South Carolina Supreme Court |
Appeal from Common Pleas Circuit Court of Greenville County; G. B Greene, Judge.
Action by B. O. McGee and others, trading and doing business as a partnership under the firm name and style of the McGee, Dean & Co., against the F. W. Poe Manufacturing Company. From a judgment of nonsuit, plaintiffs appeal.
Reversed and remanded for a new trial.
Mann Plyler & Arnold, of Greenville, for appellants.
Haynsworth & Haynsworth, of Greenville, for respondent.
On February 23, 1933, F. W. Poe Manufacturing Company, a textile manufacturing plant of Greenville, S. C., purchased 300 bales of cotton from McGee, Dean & Co., a partnership and cotton merchants of Leland, Miss., at an agreed price, which cotton was duly shipped and delivered.
For the sake of convenience and brevity, appellants will be hereafter referred to as McGee, Dean, and respondent as Poe.
The cotton was sold and delivered in two lots, one of 200 and the other of 100 bales. The seller through its bank at Leland, Miss., drew on the purchaser by two sight drafts with bill of lading attached to each through the South Carolina National Bank of Greenville, S. C., a bank at which Poe did business and carried an account. On March 2d and 4th, respectively, Poe issued its checks on and payable to said South Carolina National Bank, and procured the drafts and the bills of lading, but the proceeds were not transmitted to McGee, Dean. All banks were closed on March 4th by Presidential proclamation, and before the proceeds in question were forwarded to the seller. Thereafter the South Carolina National Bank did not reopen for approximately three months, when it reopened conditionally under a conservator.
The bank some months later was reopened under a new arrangement by which certain liquid assets were transferred to the new organization at par, and 40 per cent. was paid to depositors and creditors. All the remaining assets were trusteed for an indefinite period for the benefit of the remaining 60 per cent. due depositors and creditors. Although plaintiff did not agree to the reorganization plan, and there is no showing that the defendant did, they apparently became bound thereby to the extent of their interests under the operation of the Bank Conservation Act passed by the United States Congress and approved on March 9, 1933 (12 USCA §§ 201-211), under which this bank apparently reorganized and reopened. By written stipulation after the beginning of this action, the plaintiff and the defendant agreed that the 40 per cent. which the bank was ready to pay should be paid to the plaintiff on account of this claim without prejudice to the rights of the parties. After allowing this credit, there is a balance of $6,533.43 with interest involved in this suit.
Plaintiff instituted this suit on July 15, 1933, a little more than four months after the sale and delivery of the cotton, to recover the purchase price. The defendant denied liability and relied on its alleged payment to the South Carolina National Bank. It is admitted by both parties that these sales were made subject to the 1925 Southern Mill Rules Amended, the pertinent clause being paragraph IV, subdivision (b), which is as follows: "In cases where buyer elects to specify some particular bank through which drafts on them are to be drawn, the buyer shall be held liable for any loss seller may sustain by routing drafts through such bank."
Under said Southern Mill Rules, the seller was to draw three days' sight draft on the buyer with bill of lading attached without exchange or collection charges, and the buyer is expressly given no right to delay payment.
At the conclusion of the testimony, the presiding judge of his own motion ordered a nonsuit, after overruling motions for a directed verdict made by both parties. The trial judge held in substance that no loss had been proven, and that such loss could not be ascertained until after McGee, Dean had exhausted its remedy against the South Carolina National Bank, or sued it to insolvency and proved that it is insolvent. The principal questions raised by the appeal may be briefly stated as follows:
1. Was W. H. Wilson, Inc., the agent of Poe in the transaction?
2. Did Poe specify the bank through which the drafts were drawn?
3. Was there any evidence of loss sustained by McGee, Dean in the circumstances?
4. Was the action prematurely brought?
It is obvious that questions 3 and 4 should first be disposed of since the determination of the question as to whether or not the action was prematurely brought is primary, and in disposing of this question it is necessary to analyze the question as to whether or not there was evidence of loss sufficient for the appellant to sustain its cause of action against the respondent.
The respondent here was principal debtor, and there is evidence that it specified the South Carolina National Bank of Greenville, S. C., as the bank through which appellant was to draw drafts on it in settlement for the cotton purchased. If the bank was so specified by respondent, there is in the Mill Rule no condition to be performed by the drawer before asserting a claim against the drawee. If it had been the intent of the parties that the drawer should first exhaust its remedies against the bank, some such stipulation could have easily been incorporated. Respondent claims that to show any loss recoverable against it, appellant must show that the bank cannot be made to respond. We cannot subscribe to this...
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