Schofield Mfg. Co v. Cochran

• Decision Date: 31 March 1904
• Citation: 47 S.E. 208,119 Ga. 901
• Parties: SCHOFIELD MFG. CO. v. COCHRAN.
• Court: Georgia Supreme Court

47 S.E. 208

119 Ga. 901

SCHOFIELD MFG. CO.

v.COCHRAN.

Supreme Court of Georgia.

March 31, 1904.

BANKS—GENERAL DEPOSIT—FAILURE OF BANK —PRIORITIES.

1. One desiring to purchase goods which had been pledged as security for a debt was required by the pledgee, as a condition precedent to the release of the goods, to deposit the purchase price to his account in a named bank, and to save him harmless in the transaction." Accordingly the purchaser deposited to the credit of the pledgee in the bank designated a draft drawn on a bank in another city for the amount in question. It was known to the officers of the bank first mentioned that the sole purpose of the draft and deposit was to obtain the release of the goods from the custody of the pledgee, but no special instructions were given them in regard to the funds so deposited. The draft was forwarded for collection and was duly paid, but, before the money was returned to the bank in which it was deposited, that bank failed, and was placed in the hands of a receiver. The purchaser of the goods, in accordance with his agreement, paid the amount of the draft to the pledgee, and brought suit against the depositary bank. Held, that the deposit to the account of the pledgee was a general, and not a special, deposit, and did not entitle the purchaser, who was subrogated to the rights of the pledgee, to priority over the claims of other general depositors. (Syllabus by the Court.)

Error from Superior Court, Pike County; E. J. Reagan, Judge.

Proceedings between the Schofield Manufacturing Company and T. W. Cochran, receiver of the New South Savings Bank. Judgment for receiver, and plaintiff brings error. Affirmed.

W. W. Lambdin and Erwln & Callaway, for plaintiff in error.

Allen & Tisinger, for defendant in error.

CANDLER, J. The Schofleld Manufacturing Company, of Macon, desired to purchase some yarns of a manufacturer in Barnesville. The goods, however, were in the possession of the Barnesville agent of the Export Storage Company, of Cincinnati, who held them as security for a loan, and the consent of that company was necessary to the completion of the sale. A representative of the Schofield Company, who had gone to Barnesville in the interest of his company, drew a draft on a Macon bank for $306.30, the purchase price of the yarns, payable to the order of the cashier of the New South Savings Bank, of Barnesville. The Macon bank having notified the bank in Barnesville by telegraph that the draft would be paid when presented, a duplicate deposit slip was issued to the agent in Barnesville of the Export Storage Company for the amount of the draft. Notwithstanding this deposit, the agent refused to release the goods until express authority to do so was given him by his superiors. The president of the Schofield Company then had a communication by telephone with Black, the Atlanta representative of the Export Storage Company, who seems to have had authority in the matter; and Black agreed to release the yarns, provided the Schofield Company would place the amount of the purchase price to his credit in the New South Savings Bank, and agree to "save him harmless in the transaction." In accordance with this agreement, the president of...