Willard Mfg. Co. v. G.H. Tierney & Co.
| Decision Date | 15 December 1903 |
| Citation | 45 S.E. 1026,133 N.C. 630 |
| Parties | WILLARD MFG. CO. v. G. H. TIERNEY & CO. et al. (MERCHANTS' NAT. BANK, Intervener). |
| Court | North Carolina Supreme Court |
Appeal from Superior Court, Durham County; W. R. Allen, Judge.
Attachment by the Willard Manufacturing Company against G. H. Tierney & Co. and others, in which the Merchants' National Bank intervenes as claimant. From a judgment for plaintiff, the intervener appeals. Reversed.
A contractor to sell cotton borrowed money of a bank with which to purchase the cotton of the owner, and the bill of lading made out by the owner was attached by the contractor to a draft drawn on the purchase to the contractor's order and both instruments were indorsed to the bank. The proceeds of the draft were credited in advance to the contractor leaving him a balance above the amount advanced to him, which he afterwards drew out. The purchaser of the cotton refused payment of the draft, and attached the cotton on a prior claim against the contractor, and the bank interpleaded. There was no agreement between the contractor and the bank that, in case of the purchaser's refusal to pay the draft, the amount should be charged back against the contractor on the bank books. Held, that the fact of the indorsement of the draft by the contractor did not prevent the bank's being a purchaser for value.
In August, 1901, the plaintiff bought by sample from defendants 118 bales of cotton, and in September the defendants delivered 40 bales thereof, and drew a draft on the plaintiff, with bill of lading attached, for $574.48, which draft the plaintiff paid. The plaintiff alleged that the 40 bales did not come up to sample, and claimed damages in the sum of $285.92. The defendants are nonresidents, residing in Vicksburg, Miss. On September 21st the defendants shipped 50 bales of the lot of 118 bales, drawing draft with bill of lading attached for the contract price, $836.26. The draft was drawn on the Morehead Banking Company, Durham, N. C "Account of Willard M'f'g Co.," "W--50 BB Pickings, B. L. attached," and indorsed to the Merchants' National Bank of Vicksburg. The plaintiff refused to pay the draft, and attached the cotton as the property of the defendants, Tierney & Co., upon the claim for damages alleged to have been sustained by reason of the failure of the 40 bales to come up to sample. The Merchants' National Bank intervened, claiming title to the property, and gave the undertaking required by statute. The cotton was thereupon delivered to said bank. The defendants, Tierney & Co., filed no answer. His honor submitted the following issues to the jury: "Was the Merchants' National Bank the purchaser for value of the draft for $836.26 and the bill of lading attached thereto covering the shipment of the fifty bales of cotton? Ans. No. (2) Was the Merchants' National Bank the purchaser for value of the draft for $574.48 and bill of lading attached thereto, covering the shipment of the forty bales of cotton? Ans. No.
(3) What was the value of the lot of 50 bales of cotton at the time it was seized in this action? Ans. $398.85. (4) What damage, if any, has the plaintiff sustained by reason of the cause of action set out in the complaint? Ans. $285.92 interest from Sept. 27, 1901. (5) Was the cotton attached by the plaintiff the property of the Merchants' National Bank at the time of levying the attachment? Ans. No." The interpleader bank objected to the first, second, third, and fourth issues. The objection was overruled, and the bank excepted. The plaintiff introduced A. C. Cox, superintendent of the plaintiff company, who testified to the condition of the 40 bales of cotton and the amount of damage sustained thereby. The interpleader bank introduced the deposition of W. S. Jones, cashier, who testified that the defendants had purchased from Metzger Bros., of Mobile, the 50 bales of cotton in controversy, and they drew upon the defendants at Vicksburg for the price, $697.99; that the interpleader bank advanced or loaned to the defendants the amount of the draft, and they were charged therewith on the books of the bank; that on September 23, 1901, the defendants drew the draft for $836, as aforesaid. This draft was discounted by the bank, and the proceeds, less discount, were credited to the defendants on the books of the bank on September 28th. The bank discounted or purchased this draft in pursuance of a contract with the defendants that they should deliver to the bank the bill of lading taken out by Metzger Bros. for said cotton at Birmingham, Ala., by which said cotton was to be delivered to the order of Metzger Bros., by the Southern Railway Company, at Willardsville, N.C. This bill of lading had been attached to the draft drawn by Metzger Bros. on the defendants, and had been indorsed by them. Upon the payment of the draft, the bill of lading had been delivered to the defendants, and in pursuance of said contract it was also indorsed by them, and was attached to the draft drawn by them, as above stated. The draft, with the bill of lading attached, was forwarded to the Morehead Banking Company at Durham, and, upon payment of the same being refused, the draft and bill of lading were returned to the Merchants' National Bank, the interpleader. The amount paid by the bank in the purchase of this draft has never been repaid by the defendants. Metzger Bros., upon being advised that the Willard Manufacturing Company refused to pay the draft and take the cotton, because they alleged that it was defective, agreed that, if the cotton was returned to them at Birmingham, free of any charges for freight, they would refund any amount that had been paid to them for the cotton by the defendants. Thereupon the sale to the defendants, whose right had been acquired by the interpleader bank, was rescinded, and the cotton returned to Metzger Bros., at Birmingham, and they returned to the interpleader bank $697.99, which was the sum that had been paid to them for this cotton by the defendants. The transaction between the bank and the defendants was bona fide, by which the bank paid to Tierney & Co. the sum of $830, being the amount of the draft, less discount, upon the delivery to them of the bill of lading; by which the bank became the sole and absolute owner of the draft and bill of lading. The witness was shown the draft for $574.48, dated September 11, 1901, and he stated that the bank had held the same. He also stated that the interpleader bank discounted this draft, and placed the proceeds, $571.48, to the credit of the defendants. The bill of lading was attached to the draft. To the question, "How much money did your bank advance to Tierney & Co. for the draft of $836.26?" the witness responded, "$830." To the further question, "Did not your bank reserve the right to charge back against Tierney's account with your bank the amount you advanced or paid to him for said draft of $836.26?" he responded: He testified that the bank had delivered the cotton to Metzger Bros. and received from them $697.99, less freight charges. The interpleader bank appealed from the judgment.
Busbee & Busbee and Manning & Foushee, for appellant.
Boone, Bryant & Biggs, for appellee.
CONNOR, J. (after stating the facts).
We think that the exception to his honor's ruling in submitting the second issue, in regard to the draft of $574.48, should be sustained. The question raised by the interplea on the part of the bank is correctly stated in the fifth issue, to wit, "Was the cotton attached by the plaintiff the property of the Merchants' National Bank at the time of levying the attachment?" Its ownership of the draft for $574.48 was entirely immaterial, and the submission of an issue in regard to it was calculated to prejudice the interpleader. His honor, so far as the record shows, gave the jury no instruction in regard to the law...
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