The Birmingham age-herald., 1906-05-23

Decatur, as the case may be- and turning the cotton over to the railroad takes their receipt or bill of lading for the same, and draws on the purchaser through his bank
 with the bill of ladng attached. The pur- chaser of the cotton is supposed to know something of the character and standing of the shipper, just as the shipper is sup posed to know something of the responsi-
 bilty of the purchaser. The bank acts merely as pledgee, agent or trustee, hold I ing the bill of lading. which is practically the key that unlocks the goods. rather than the goods themselves until the draft is paid. Should the banks be debarred from handling transactions of this kind it will be necessary for the country mer- chant to require the purchaser to pay him on the spot for the cotton. This would in- volve in many cases buyer going over to a country town with the money in hs pocket. This added expense and risk
 would not be borne by the purchaser of
 the cotton, but by those who primarily handle it. The same principle would, of course, apply to shipments of pig iron and coal, but it SD happens that while much inconvenience would result to shippers of l these commodities from lack of banking facilities, they could protect themselves better than could the shippers of products
 of the soil.
 Business Paralysis.
 | The confusion and Arrangement would
 be even greater at the larger towns than at the smaller ones. Cotton brokers who have accumulated several thousand bales | would no longer be able to dispose of their | holdings on the same terms as formerly and would be denied the facilities that are | afforded their competitors In other states 1 If the courts of New York Pennsylvania | Maryland, Georgia and Louisiana should | .1sN,N NI,. ..4..
 nestle and foreign exchange business of ! the whole country would be paralyzed.
 Dealers in exchange when they now dis count shippers bill of exchange on Liv- | erpool, for example, with documents att | tached, feel that they are mourning no | particular risk. except that of failure of ! the consignee or drawee to honor the draft on presentation. in which case they could
 enforce their title to the goods represented
 by the bill of lading and reimburse them selves to the extent of the market value
 of the goods. Their feeling when the draft has been accepted or paid is one of
 absolute security, and were they to be | held liable for any default on the part
 of the shipper, which liability in the nat
 ufal course of events could not become
 known for many weeks or months, they
 would be compelled to curtail their trans
 actions to such an extent as to result in
 
 fact We could not possibly finish moving
 one crop before we would have another on our hands
 Surprise to Business World | This decision of the supreme court of l Alabama has come as a surprise to the | business world and has been criticized 1 by commentators on commercial law and l 1t is certainly to be hoped that upon fur | ther and more mature consideration of the matter by our court of last resort, | appreciating the very important princl- | pie that is involved in the apparently in- 1 significant Haas case that 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 Iowa, of New York, of Mas l saehusetts, the views in ract. Of the
 highest legal authorities In the world.
 True Character.
 It seems that there has been a mis- 1 apprehension of the true character and 1 scope of the bill of lading, which Is pri- marily receipt for goods issued by a 1 common carrier, and a contract to con l vey same to certain point, to be deliv- cred to the consignee Tn consideration l of certain amount paid for freight The
 bill of lading therefore, Is both a receipt
 and contract. While it may be symbol for the goods described therein, | 1t certainly cannot be the goods them- | selves. The court has already decided | that where q railroad issues a bill of lading for a quantity of goods exceeding | that actually received, it Is liable only for | the amount 1t did receive. in other words | the bill of lading may symbolize really a l smaller amount of goods than 1t repre- | sents on It's face yet our courts seem in- | clined to hold that when a bank which | has in good faith discounted a draft l with a bill of ladng attached. a bank whose liability, if any, should certainly | be secondary to that of the common car | Tier who Issued the receipt for the goods, | it is liable for the whole amount of the | transaction. It would be interesting to | know If bank discounting a draft with
 a contract attached other than 0 bill of
 lading would be stepping into the shoes
 of the seller. and would be incurring | liabilities of which 1t did not dream. Sup 1 pose MT. Buck should contract to sell a | piece of land to Mir. Wellborn, the agree | ment being that he should draw on MT | Welborn for the purchase price through a | bank in Birmingham with the deed at | tached MT. We.lborn pays the draft | on presentation, takes the deed, and upon | examination of the deed by his attroney, | he finds some flaw in the title, or de- | hclency in the number of acres conveyed. | Would any court hold that the collecting | bank guarantees the title of the land; or | that 1t is responsible for the quantity of | the land. or for It's quality, in case there | should have been any contract between | the original parties as to the character | of the soil.
 | Reverting again to the bill of ladlng I