The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1910-09-25
TRUSTEE WINS BY
GRUBb'S DECISION
Means Money for Knight Yam
cey Creditors
APPEAL WILL BE TAKEN
Court Holds That Cotton In Transit
Was Still Property of knight, Yam .
cey & Co.-BilIs of Lading
Had Been Forged
APPEAL WILL BE TAKEN

yet made in connection with the failure
of Knight, Yancey & Company occurred
yesterday in the federal court when Judge
William I. Grub gave the general charge
for the plaintiff in the case of w. S.
Lowell as trustee against Henry Hentz &
Company of New York.
This suit involved only 200 bales of cot
ton and the judgment rendered was for
only s15,126. but if the principle of the
law held by Judge Grub is concurred in
by the circuit court of appeals then suits
involving 1900 bales, valued at ap-
proximately $4,000, will be rendered for
the plaintiff and thus be available for
the creditors of the bankrupt estate.
The general charge of the court yester-
day followed a two-days trail of the
case, which was instituted several weeks
ago. The point upon which Judge Grub
gave the general charge for the plaintiff
was that a spurious bill of lading had
been issued upon the 200 bales of cotton,
and Knight-Yancey retained the right to
dispose of the cotton. He charged the
jury that notwithstanding the fact that
Knight. Yancey & Company later sup
piled genuine bills of lading this did not
give Hentz & Company any title to the
cotton.
The court also charged the jury that
forged bills of lading which Hentz &
Company got were worthless, and the fact
that Knight, Yancey & Company SUBJ
sequently marked up 200 bales of cotton
Of the same mark and turned them over
to the Southern Railway company was
not an appropriation of the cotton to
Hentz & Company's contract because
they were bills of lading in the form OF
shippers order to Notify Hentz & Com
pany" The legal effect of this was to
retain in Knight, Yancey & Company
right to dispose of the cotton as long
as they held bill of lladng, and the
cotton had not been delivered And since
the cotton had not been delivered to
Hentz & Company at the time of the
bankruptcy the right to stop the delivery
was conferred to the trustee, and there
fore belonged to the trustee and not to
Hentz & Company.
1t was further charged by the court
that Knight, Yancey & Companys inten-
ton was further shown by the fact that
genuine bill of lading for the cotton had.
been deposited in a Selma bank to Sc
cure that bank for loans.
The plaintiff contended that not only
technically was the trustee entitled to the
cotton but that inasmuch as other credi-
tors held forged bills of lading calling
for cottan worth 60 00o oOa or "a ona ooa
against which no cotton had ever been
shipped. 1t was equity that all cotton
not actually delivered should be turned
in to the trustee so that all creditors
should share equally in what losses were
sustained
The attorneys for the trustee were
very much elated yesterday at the rul-
ing of Judge Grub for 1t means that
If the court of appeals sustains the
lower court the creditors of the bank
rupt firm will realize a great deal
more than was at first supposed
The suit In question was for the re-
covery of 200 bales of cotton shipped
to Hentz & Co., March 20. That COM
panp paid a draft of Knight, Yancey &
Co., attached to the bills of lading for
$4,000
These bills of lading were afterWard
shown to be forgeries. The mark "P.
o. L." was placed upon the cotton SO
delivered. When the firm assigned an
agreement was entered into between
the Southern Railway company, Hentz
e. Co., and the trustee that the cotton
be sold pending a decision of the court
as to whom the money belonged.
1t was the testimony that the forged
bills of lading were issued and a draft
upon them paid. 1t was also adduced
that subsequently the company was
placed in the possession of 200 bales
of cotton with the mark Up. O. L."
upon them like the originals. This
cotton was In possession of the rail-
road when the crash came.
Phelan Beale of New York, who is
here representing the defendant in the
case, announced yesterday that the
case would be appealed to the circuit
court of appeals.
The company which is defendant to
the suit Is one of the most prominent
cotton firms in New York. 1t is stated
that their losses through the failure
of Knight, Yancey & Co. reached the
100000 mark.
The case was argued yesterday morn
ing a short while preceding the de-
livery of the general charge by Judge
Grub. The jury then returned the
verdict as charged by the court. Prom
inent among the jurymen was ]. H.
Barr, vice president of the First Ma
tional bank of Birmingham. Through
out the hearing he manifested the
greatest interest in the testimony.