The Montgomery advertiser., 1906-05-23


 Alabama will have no other recourse than to decline absolutely to handle drafts with bills of ladins attached
 Mea1s Disaster to Farmers ana Mer-
 This would mean revolution in the established methods of handling our crops and manufactured products which
 have been in vogue for generations, for bankers can usually find some means to employ their funds. but any policy that would impede the free passage of the products of our farms to market would necessarily depress the value of those products. and its evil effects would be felt most keenly by the farmer and
 the small merchant throughout the ten or twenty bales of cotton hauls 1t to his county town and sells It to a
 merchant the price that he receives for
 it depends upon the ease with which into cash. For this reason. cotton at railroad towns having good shipping facilities always commands higher price than 1t does where II IS on sne
 er,s and where 1t has to be hauled for
 miles soyer bad roads. Under the sys- tenn that has always been in vogue. the country merchant can sell his cotton to the buyers in Mobile, Selma, Montgom-
 ery,- Birmingham, Anniston, Huntsville or Decatur, as the case may be. and turning the cotton ever to the railroad. takes their receipt or bill of lading for
 through his bank with the bill of lading
 attached. The purchaser or the cotton is supposed to know something Of the
 character and standing of the shipper, just as the shipper is supposed to know something of, the responsibility ot the purchaser. The bank acts merely as pledgee, agent or trustee, holding the bill of lading, which is practically the
 key that unlocks the goods, rather
 than the goods themselves. until the draft is bald. Should the banks be de- | hn . this kind 1t will be necessary for the country merchant to require the pur- | chaser to pay him on the spot for the cotton. This would involve In many
 cases buyer going over to country town with the money In his pocket, This added expense and risk would not ton. put by those who primarily handle ! 1t. The same principle would of course apply to shipments of pig iron and coal. but 1t so happens that while much inconvenience would result to shippers of these commodities from lack of bank | ing facilities, they could protect them selves better than could the shippers of products of the soil.
 Dera n ge anept of Finances and Business Paralysis.
 | The confusion and Arrangement would be even greater at the larger towns than at the smaller ones Cotton brok- CTS who have accumulated several thousand bales would no longer be able to dispose of their holdings on the same
 terms as formerly. and and would lsors be des their competitors in other States. If the Courts of New York, Pennsylvania, Maryland, Georgia and Louisiana should adopt the view under discussion, the
 domestic and foreign exchange business of the whole country would be para lyzed. Dealers in exchange when they
 now discount shippers bill Of ex- change on Liverpool. for example, with documents attached feel that they are incurring no particular Sisk, except that of failure of the consispee or drawee to honor the draft on presentation. in
 which case they could enforce their ti- tie to ths goods represented by the bill of ladink and reimburse themselves to the extent of the market value Of the goods. Their feeling when the draft
 has been accepted or paid is one Of ab- solute security, and were they to be held liable for any default on the part of the shipper. which liability in the
 natural course of events could not be- copIe known for many weeks or iuouthS.
 they would be compelled to curtail their
 transactions to, such an extent as to
 result in a most serious congestion of
 business. In fact we could not possibly finish moving one crop before we would
 have another on our hands
 Alabama Decision Surprise to Busi- .a@ ness world. .. This decision of the Supreme Court of Alabama has come as surprise to
 the business world and has been crit icised by commentators on commercial law; and 1t is certainly to be hoped that
 upon a further and more mature consid-
 eration of the matter by our Court ot ] last resort, appreciating the very i'm
 portaot principle that Is involved in the 1 apparently insignificant Haas case that l there may yet prevail in Alabama the construction of the law as laid down by the Supreme Courts of the United
 States, of Texas, of Nebraska, of Kan sas, of Iowa, of New York, of Massa-
 chusetts, the views in fact, of the high
 est legal authorities in the world.
 TrNa hnF afA Of n It seems that there has been a mis- apprehension of the true character and
 scope of the bill of lading. which is pri-
 n1arily a receipt for goods issued by
 common carrier, and contract to con
 vey same to a certain point, to be de-
 liverrd to he conslgnee in considera- tion of certain amount paid for freight.
 The bill of lading, therefore, is both a
 receipt and a contract. While h may
 be symbol, for the goods described
 therein, 1t certainly cannot be the
 ready decided that where ! railroad is
 sues a bill of lading for quantity of
 goods exceeding that actually received,
 1t Is liable only for the amount 1t did receive. In other words, the bill of lading may symbolize really a smaller amount of goods than 1t represents on Its face, yet our court seems inclined to hold that when bank which has | in good faith discounted a draft with a bill of lading attached, bank. whose l liability, If any, should certainly be secondary to that or the common car
 rier who issued the receipt for the | goods, 1t Is liable for the whole amount | of the transaction, 1t would be inter- esting to know If bank discountlng
 a draft with contract attached other
 than bill of lading, would be step | ping into the shoes of the seller, and
 would be mourning liabilities of which | 1t did no, dream Suppose MT. Buck 1 should contract to sell a piece or land ] to MT Wellborn, the agreement being that he should draw on Mir. Wellborn
 for the purchase price through bank
 in Birmingham with the doed attached.
 Mir Wellborn pays the draft On pre- | sentatinn, takes the deed, and upon ex- animation of the deed by his attorney he finds some flaw in the title. or | deficiency in the number of acres con. veyed. Would any court hold that the | collecting bank guarantees the title to 1 the land? or that it is responsible for
 the quantity of the land. or for it's qual- | contract between the original parties
 as to the character of the soil?
 | Bill Of Lading the Key to Freight Chr. Reverting again to the bill of lading,
 l think one of the best examples Of | the fallacY of this do urine or purchase | that I have heard is this: Suppose
 Jones of Alexander City should contract
 to sell Brown of Anniston the contents | of a corn crib located at Alexander | City, it being represented by Jones that
 he had 1000 bushels of first class corn, and that the crih was securely locked.
 and could be opened only by means of
 a certain key. Suppose that Jones
 agrees to sell Brown the contents of | as it stands, and 1t should be arranged l that Jones should draw on Brown Tor l S40O with the key of the crib attached 1 10 the draft. He goes to the bank in
 Alexander City and makes the draft
 and attaches the key and receives the | money Alexander City Bank