The Montgomery advertiser., 1906-05-23

will ensue should the court adhere to Its original decision.
 Let us consider the attitude in which the banks of Alabama would be placed should .his doctrine prevail In this state As we have seen. the Alabama 100000 of drafts to which bills of lad Ing are attached. As far as the Ma tional Banks are concerned. 1t Is ultra wires for them to purchase commodi. should our Supreme Court adhere to the opinion already handed down Ma tional Banks would be placed in the po- each transaction of this kind that they had. l know of one bank in. Birning ham that handles each year in the or dinary course of business drafts with bills of lading attached for more than ss,o00.000. the only consideration being a reasonable exchange on the drafts. suit has lately been filed in one of the State courts against this particular where a shipper negotiated through the bank draft for about s4.S0O, to which was attached bill of lading for 100 bales of cotton. the weight, subject to correction. being stated thereon as 50,o00 pounds. The parties in this suit being domiciled in different States. it would ordinarily have been brought in the United States Court but the plaint- iff's attorneys knowing that 1t would have no standing there, availed thcm- selves of their rights and filed the suit in the State Court in order to get the benefit of the remarkable doctrine laid down in the Haas case The shippers contract with the purchaser was that draft was to be made through this bank with bill of lading attached. and that the draft was to be paid upon its presentation and surrender of the bill of lading. When the cotton arrived at it's destination after the payment of the draft and after. the bank who had handled the draft for collection only, proceeds. it was found to weigh ap- proximately 25,600 pounds instead of 5o.0e0 pounds. The common carrier who " issued issued the pill of lading although that would be due on 10000. pounds. has been held not liable on the theory that it delivered all the cotton that 1t against the bank on the contention that by discounting the draft with the bill of lading attached. it thereby assumed the contract of the shipper and became ton for both its quantity and quality. In other words, for the sake of $1 or $l 50 per thousand exchange amount ing on shipment of 100 bales of cot ton to from s 10 $750 the bank is supposed to know just what the ship per's contract was: whether he was to deliver good ordinary or strict 'middling cotton; must guarantee that the grade
 
 contracted for; and must guarantee full weights.
 Under Present Ruling Banks Can Not
 Handle Bills of LadinG.
 Why, gentlemen, under these cOndt- tions for Q bank to continue to handle drafts with bills of lading attached ft would be necessary for 1t to have le- gal department to examine all con tracts between shippers and purchas- CTS; to have experts in cotton. in grain, in coal and in iron to inspect all ship ments to see that the quality was as contraced for, and to have all ship ments weighed to see that the weights are correct. This is obviously absurd. and you can all readily see that the result would be that banks would be compelled to decline to handle so ex- pensive a business: business which, under the charters of National Banks, at least, is clearly forbidden them. Con- tracts between shippers and consignees arn frequently verbal ones, and very often they are in the form of telegrams sent in cipher so that in very many cases it would be impossible for a bank to determine definitely just what the terms of contract were. which they draft with bill of lading attached. Disclaimer of Liability of Doubtful Ef-
 feet.
 Many of the bankers in this State are resting easy under a feeling of false security by supposing that by afffxing a rubber stamp disclaiming responsibil- ity as to quality and quantity of the goods to drafts having bills of lading attached that they are absolutely pro- tected on this point The rubber stamp in common use reads as follows;
 The payer of this draft and all par ties concerned are hereby notified that the endorsement of this bank hereon is solely for the purpose of making 1t col lectable. and that the bank does not guarantee, and will not be responsible for. the quality. quantity or condition upon delivery, of the goods represent ed by the bill of lading attached here to. nor does 1t assume or guarantee in any way any contract by the drawer or endorser of this draft, or by the con-
 Yet 1t is very doubtful whether this would hold in law. No test has ever the Western Union telegraph blank that we use when we send message there is printed:
 Tt is agreed that the company shall not be liable for mistakes or delays fin the transmission or delivery, or for non delivery of any unrepeated message, beyond the amount received for send ing the same"
 when the message Is sent. etc Yet the courts have repeatedly held that this is not binding in law, and that if the Telegraph Cmopary makes an error in peated or not. that it is Liable for any damages that may have resulted by req son of the mistake.
 If you will analyze this bill of lad ing question you will see that the con tention of the courts holding the view that the bank becomes responsible for the quality and quantity of goods rep resented by bills of lading attached to drafts negotiated by them is that the very act of such negotiation Is an as sumption on the part of the bank of the shippers contract. In other words, the bank immediately enters into a a.N4 tr-ith he a be. and often Is. thousand miles away: Now I want you gentlemen who feel so secure In the use of your rubber stamp disclaimers to ask yourselves this question
 Having entered into a contract with party out of your sight and hearing, can you, without his knowledge and consent, make a material alteration ot this contract by afflxing your stamp Tn other words, after you have know ingly assumed certain liabilities, can you. without consent of the other party to the contract. destroy this liability by having your clerk affix rubber stamp to the document?
 I will not attempt to discuss this question from a legal standpoint; question that I want to bring to your attention.
 The preponderance of the best au- thorities, not only in the united states but in foreign countries, is overwhelm ingly against the doctrine that banks in facilitating the exchange of com modities by handling these bills Of lad ing drafts incur such far-reaching lia- biiities as appear to be placed upon us under the construction ot the law in our State and 1t Is to be hoped tna eminent counsel who have studied this subject are mistaken in their fnterpre- tation of the views of our. Supreme Court as expressed in the Haas case % If, however. the Court really holds that A discount of a draft with bill of lading attached as collateral, is pur- o 4l. nh nf tha ecnnda renrc.