Stacey-Vorwerk Co. v. Buck

• Citation: 291 P. 809,42 Wyo. 136
• Decision Date: 23 September 1930
• Docket Number: 1640
• Parties: STACEY-VORWERK CO. v. C. L. BUCK; STOCK GROWERS NATIONAL BANK OF CHEYENNE, WYOMING, GARNISHEE, AND FARMERS & MERCHANTS BANK OF INDEPENDENCE, INTERPLEADER. [*]
• Court: Wyoming Supreme Court

291 P. 809

42 Wyo. 136

STACEY-VORWERK CO. v. C. L. BUCK; STOCK GROWERS NATIONAL BANK OF CHEYENNE, WYOMING, GARNISHEE, AND FARMERS & MERCHANTS BANK OF INDEPENDENCE, INTERPLEADER. ^[*]

No. 1640

Supreme Court of Wyoming

September 23, 1930

APPEAL from the District Court, Laramie County; SAM M. THOMPSON Judge.

Action by Stacey-Vorwerk Company, a corporation, against C. L. Buck doing business as C. L. Buck and son, of Amite, Louisiana for breach of contract in the sale of a carload of strawberries.

Plaintiff paid a demand draft against it for the shipment and forthwith garnished the proceeds in an action against defendant for damages. Farmers & Merchants Bank of Louisiana, payee, named in the demand draft, intervened in the action claiming ownership of the proceeds paid by plaintiff.

There was a judgment for interpleader, and plaintiff appeals.

Affirmed.

For the plaintiff and appellant there was a brief by W. Q. Phelan and John F. Delaney, of Cheyenne, Wyoming, and oral argument by Mr. Phelan and Mr. Delaney.

The controversy arose over a damaged shipment of strawberries consigned to appellant by defendants. Appellant paid the face of the draft to the Stock Growers National Bank of Cheyenne, took up the express receipt attached thereto and immediately attached the money in the hands of said bank to the amount of $ 750.00, to satisfy any judgment which appellant might obtain against the defendant. The garnishee answered alleging that the fund was claimed by intervener, and appellee; thereupon the trial court ordered appellee to appear and disclose its interest, which was done by petition. The judgment was in favor of the intervener, and plaintiff appeals. The trial court was without jurisdiction to try and determine intervener's claim to the funds. Stanley v. Foot, et al., 9 Wyo. 325. Intervener was not a bona fide purchaser without notice so as to be relieved from equity as it had knowledge of the damaged condition of the berries before taking the draft. The express receipt was non-negotiable as appears from its face and not an order Bill of Lading. The Federal Bill of Lading Act governs U. S. Code Ann. Title 49, pages 390, 393, 414, 418. A straight bill of lading cannot be negotiated free from existing equities. 10 C. J. 192; U. S. Code Ann. Titl. 49, Sec. 109. The Federal Bill of Lading Act governs interstate shipments. Chicago & C. R. Co. v. McDougald, 199 N.W. 68; U. S. v. Ferger, 250 U.S. 199; Bullen v. Wisconsin, 240 U.S. 625, 60 L.Ed. 830. An order Bill of Lading is negotiable. The draft shows plainly on its face that it is no draft at all, but merely an unaccepted order. 3 W. & Ph. 3rd Ed. P. 31; Brannon's N. I. L. (4th Ed.) 820, 8 C. J. 297. Intervener had notice and took the draft subject to infirmities. Kissel v. Baldock, (Okla.) 154 P. 1194; Richter v. Smith, 131 U.S.C. L. V. 1; Bank of Saginaw v. Railway Co., 235 Mich. 404; Savings Bank v. Mann, 200 N.Y.S. 587. An assignee of a straight Bill of Lading stands in all respects in the shoes of the assignor. Quality Shingle Co. v. Lmbr. Co., (Wash.) 187 P. 705; Getchel v. N. P. Co., 187 P. 707. Plaintiff had the right to sue upon the Bill of Lading without reference to the draft. New Iberia Nat. Bank v. Teche Canning Co., (La.) 106 S. 453; Bank v. Senton, 104 So. 157; Swift v. Davis, 183 N.Y.S. 848. Non-negotiable bills of lading, so marked and used in interstate shipments are governed by the Federal Bill of Lading Act. Bedig v. Southern Pacific Co., 258 P. 148; Hale & Co. v. Baley Cotton Co., (Tenn.) 290 S.W. 994; Tenn. Co. v. Monroe, 268 S.W. 372, 269 U.S. 580.

For the respondent there was a brief by Kinkead & Pearson, and oral argument by W. C. Kinkead.

The affidavit for constructive service upon defendant was insufficient under the statute. 5638, 5641 C. S. The statute must be followed precisely. Black on Judgments (2nd Ed.) Sec. 232; Simonson v. Typer, 285 F. 240, 245; Bank v. Lattimer, (Okla.) 149 P. 1099. The service being insufficient to confer jurisdiction of the res, the garnishee must be discharged and the money released. Intervener was required to come into court by a compulsory court order and filed a pleading upon which plaintiff joined issue by answer. There was no objection to intervener's appearance in the case to assert its ownership of the fund. The court therefore had jurisdiction. 28 C. J. 398; Levy v. Miller, (Minn.) 38 N.W. 700. The case of Stanley v. Foote, 9 Wyo. 335, cited by appellant, is not in point on the facts. The garnishee bank wired its guaranty of payment of the draft and intervener thereupon purchased the draft from consignor in good faith, and forwarded it for collection to garnishee bank, where it was paid by appellant. The draft was negotiable, 4059 C. S., supported by a consideration. 3957 C. S. The payment thereof discharged the instrument. 4052-4060 C. S., and appellant with full knowledge of the ownership of the draft paid it willingly. The proceeds could not thereafter be garnisheed, by appellant as property of defendant. 9 C. J. 611. Intervener purchased the draft. The bill of lading annexed thereto was merely additional security for its payment. Guaranty Trust Co. v. Hannay, 9th B. C. R. 260; Goetz v. Bank, 30 L.Ed. 515. A bank taking a draft with a bill of lading attached is not liable for deficiency in quality or quantity of goods covered by the bill of lading. Cosmos Co. v. Bank, (Ala.) Ann. Cases 1913, B. 42; Tapee v. Varley, 171 S.W. 22; Hawskins v. Alfalfa, (Ky.) 153 S.W. 204; Lewis v. Small, (Tenn.) 96 S.W. 1052. This is not an action against intervener bank, but an action against Buck & Son to condemn money of intervener bank to the payment of a debt or liability of Buck & Son. Hinrichs Inc. v. Savings Bank, 279 F. 382; Vicars v. Machinery Co., (Wash.) 191 P. 869. Intervening bank was the owner of and presented the draft. It did not represent the genuineness of the Bill of Lading, or the quantity or quality of the goods therein described. Cosmos Cotton case, supra. The judgment should be affirmed.

KIMBALL, Justice. BLUME, Ch. J., and RINER, J., concur.

OPINION

KIMBALL, Justice.

April 21, 1928, plaintiff, a corporation engaged in the wholesale fruit and produce business at Cheyenne, Wyoming, bought of defendant of Amite, Louisiana, 684 crates of strawberries for the agreed price of $ 2325.

On the evening of April 21 the berries were shipped from Amite by express consigned to plaintiff at Cheyenne. April 23 the Stock Growers National Bank of Cheyenne, at plaintiff's request, telegraphed the Farmers and Merchants Bank of Independence, Louisiana, that the Stock Growers bank guaranteed payment of draft on plaintiff for $ 2325 covering "car IC-4363 strawberries," the shipment in question.

After receiving this telegram, the Farmers and Merchants bank paid to defendant the sum of $ 2325 and took therefor a draft drawn by defendant on plaintiff for the amount, payable on demand to the order of the Farmers and Merchants bank. The draft contained the recital, "covering invoice car IC-4363 contents 684 crts stberries," and attached to the draft was the express receipt for the shipment. This transaction was completed not later than April 25--probably April 24. The draft with the attached express receipt was then sent for collection to the Stock Growers bank by whom it was received about April 29.

The berries were received at Cheyenne and there delivered to the plaintiff on April 24. It may be granted, as plaintiff contends, that many of the berries, when delivered, were unfit for consumption or sale, and plaintiff took proper steps to minimize its damage by disposing of the marketable berries to the best advantage. It may be granted also that the evidence showed that the defective condition of a part of the berries was the fault of defendant, and a breach of an implied warranty.

The plaintiff promptly complained to the broker in Denver who had placed the order for the berries. What the broker did in carrying the complaint to defendant was not shown. Plaintiff on May 7 complained also to the Farmers and Merchants bank by a telegram referring to the draft on which plaintiff was withholding payment; stating the claimed facts as to the condition of the berries and plaintiff's damage, and urging that the bank, "as agent for" defendant, should make an effort to adjust the matter. There was no evidence that the bank, before the receipt of this telegram, had any information as to the condition of the berries, and the statement in the telegram that the bank was acting as agent for defendant was not proved.

On May 12, following, plaintiff paid the amount of the draft to the Stock Growers bank, and at once commenced this action against defendant for recovery of $ 700, claimed as damages caused by defendant's breach of its warranty of the quality of the berries. A writ of attachment was issued, and the Stock Growers bank, holding the money collected on the draft, was summoned as garnishee. The defendant was served with summons outside the state, but never appeared.

In its amended answer as garnishee, the Stock Growers bank alleged the receipt of the draft from the Farmers and Merchants bank its payment on May 12 by plaintiff; the remittance to the Farmers and Merchants bank of the proceeds of the draft except $ 750, which, the garnishee alleged, was claimed by the Farmers and Merchants bank, but retained by the garnishee because it was uncertain whether the money was owed to the payee of the draft or the defendant in attachment. On the filing of this answer, the court ordered the Farmers and Merchants bank to appear in the action and assert or defend its claim to the money in the hands of the garnishee. In obedience to that order, the Farmers and Merchants bank appeared and filed a pleading claiming the money as...