Peruvian Guano Corp. v. Thompson

• Decision Date: 23 June 1919
• Docket Number: 10204.
• Citation: 99 S.E. 808,112 S.C. 377
• Parties: PERUVIAN GUANO CORPORATION v. THOMPSON et al.
• Court: South Carolina Supreme Court

99 S.E. 808

112 S.C. 377

PERUVIAN GUANO CORPORATION v. THOMPSON et al.

No. 10204.

Supreme Court of South Carolina

June 23, 1919

Appeal from Common Pleas Circuit Court of Dillon County; F. B. Gary Judge.

Action by the Peruvian Guano Corporation against J S. Thompson and another. Judgment for the defendants, and plaintiff appeals. Reversed and remanded.

Willcox & Willcox, of Florence, for appellant.

Gibson & Muller, of Dillon, and L. D. Lide, of Marion, for respondents.

GARY C.J.

The following statement appears in the record:

"On the 9th day of February, 1914, the appellant Peruvian Guano Corporation, entered into a contract with the J. S. Thompson Company, whereby the appellant agreed to sell and the Thompson Company to buy, certain fertilizer. Under the terms and conditions of this contract, the Thompson Company was to turn over to appellant proceeds of all cash sales, and should take notes for all sales payable later than May 1, 1914, which notes should be turned over to appellant, and proceeds of all sales and all collections thereon should be held by Thompson Company in trust for appellant. The contract provided that an account of all transactions with relation to the fertilizer should be kept separate, and that all evidences of indebtedness, securities, or collections should be held for the use and benefit of appellant, and that no notes, accounts, liens, or other evidences of indebtedness should be pledged without written consent of appellant.

"The Thompson Company failed to comply with all of these provisions, claiming a waiver thereof. The Thompson Company became insolvent, was adjudicated a bankrupt, and the appellant received but a small portion of its claim through the bankruptcy proceeding.

"J. S. and J. R. Thompson, the respondents herein, were the managing officers of the corporation, the J. S. Thompson Company. The appellant seeks here to charge them individually with the loss sustained by it, alleging that the same was due to the careless and negligent management of the corporate affairs by them as its officers, particularly with reference to the alleged violation of the contract between the appellant and the corporation."

The contract, omitting the formal portions, contains the following provisions:

"Terms: For full payment, negotiable notes are to be given, dated May 1st, and maturing Oct. 15th, Nov. 1st & 15th, and Dec. 1st, 1914, we to allow $2.00 on all goods sold on this contract.

"(2) That the proceeds of all sales made by the said customer for cash, are to be turned over to the Peruvian Guano Corporation, and for all sales payable later than May 1st, 1914, negotiable notes shall be taken to mature not later than Nov. 15th, 1914. All notes so taken to be indorsed by the customer and delivered to the Peruvian Guano Corporation, as further security for the payment of the customer's indebtedness.

"(3) That the proceeds of all sales made by the said customer, and all collections made therefor, are deemed to be owned and to be held by the customer in trust for the account of the Peruvian Guano Corporation, for said fertilizer.

" (4) That until sold or settled for by the purchaser hereunder, the fertilizer contracted for under this agreement, shall remain the property of the corporation and when sold all proceeds of the sales of such fertilizers including cash, notes, open accounts, liens, bills of sale or any other evidence of debt and collections therefrom, are to be kept separate and held for the use and benefit of the corporation, and subject to its order, and shall not be pledged without the written consent of the Peruvian Corporation, and the same, together with any fertilizers taken under this agreement unsold by the customer shall be the property of the corporation until the entire indebtedness of the customer arising under this agreement has been paid.

"(5) That any failure on the part of the customer to fulfill his obligations arising under this agreement shall cause the debt hereunder to become immediately due and payable to the corporation and any report or occurrence unfavorable to his credit, shall terminate this agreement at the option of the corporation, and all fertilizers then shipped and unsold by the customer shall be

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