Court Opinion

ID: 3877255
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:09:51.974255+00
Date Added: 2024-06-11T07:41:48.112249
License: Public Domain

On July 6, 1920, the plaintiff, T.L. Davis, brought an action against the defendants, W.H. Crozier  Co., upon a demand for certain commissions alleged to be due the plaintiff, a merchandise broker in Anderson, S.C. by W.H. Crozier  Co., grain dealers in Nashville, Tenn. At the time the action was commenced, the plaintiff issued an attachment which was levied upon 60 bags of oats, part of a consignment of three cars by Crozier  Co. to R.W. Pruitt  Son, merchants in Anderson, S.C.
The bank and trust company intervened in the action, claiming to be the owners of the property, and an issue was made up to try that question. It was first tried before Circuit Judge Gary, who directed a verdict for the bank. On appeal this Court reversed the judgment and ordered the case remanded for a new trial, 113 S.E., 377. Opinion filed but not yet [officially] reported. Upon the second trial before Circuit Judge Moore, he directed a verdict for the plaintiff, and from that order the bank appeals.
The undisputed facts in the case appear to be as follows:
On June 14, 1920, Crozier  Co. consigned three carloads of oats to R.W. Pruitt  Son, who had purchased them through the plaintiff as a broker acting for Crozier 
Co. The shipment was what is commercially known as an "order notify" shipment, which is too well understood to require explanation. Crozier  Co. drew a draft on Pruitt Son for the purchase price, and, attaching the indorsed bill or lading to the draft, indorsed the latter and transferred both to the bank and trust company, receiving credit for the proceeds of the draft on their deposit account with the bank. Unquestionably then, the bank became the owner of the draft and the bill of lading, the *Page 531 
latter representing the three carloads of oats. Thus being shown to have been the owner of the oats on June 14, 1920, the vital question is: Does the evidence unmistakably show that, at the time the oats were attached at the suit of the plaintiff against Crozier  Co., the title had passed out of the bank and become revested in Crozier  Co.?
When the oats arrived at Anderson, Pruitt, for some reason not explained, refused to pay the draft, take up the bill of lading, and receive the oats. It appears that at this time Davis, the plaintiff, had an unsettled claim against Crozier growing out of some former transaction, and whether or not the transaction with Pruitt was a bonafide one or a scheme on Davis' part, assisted by Pruitt, to get property of Crozier  Co., within the jurisdiction of the Court, I can only conjecture. The draft was returned to the bank in Nashville, and Crozier  Co. were promptly notified of Pruitt's refusal to take up the draft.
It is unfortunate that both Crozier and the cashier of the bank appear unable to give a clear account of what happened between them in disposing of the controversy thus created. Both of them testify that they could not remember whether Crozier gave the bank a check to cover the amount of the draft or the bank simply charged the amount of the draft back to Crozier  Co. It is inexplicable to me why, with the books and canceled checks before them they were not able to state positively this fact. The bank's books would certainly show how this matter was settled, and the books and canceled checks of Crozier  Co. should equally clarify the situation.
There is enough in the evidence to warrant the conclusion that Crozier  Co. did not give a check in payment of the dishonored draft, and that all the bank did was to charge the amount of the draft back on its books to Crozier Co. This conclusion is entirely consistent with the retention of the draft and bill of lading by the bank. The conclusion that Crozier  Co. gave a check for the draft *Page 532 
is entirely inconsistent with the bank's retention of the papers; for, if they had done so, unquestionably the draft and bill of lading would have become the property again of Crozier  Co. The cashier of the bank testified that he agreed to reconsign the oats and apply the proceeds of the sale to offset the charge for original draft of $1,798.65. It is inconceivable that if this be true it is also true that Crozier  Co. took up the draft with their check. Certain it is that the bank retained the draft and bill of lading and treated them still as its property, surrendering the original bill of lading to the railroad company, and reconsigning the oats to another party, and applying the proceeds of the draft to the account of Crozier  Co.
The Circuit Judge, however, held that it did not make the slightest difference whether Crozier  Co. took up the dishonored draft with their check or had the amount of the draft charged back to them upon the books of the bank; that in either event title revested in Crozier  Co. on July 3, 1920, which was three days before the attachment was levied on the 6th. He did not therefore consider the issue at all.
I think that he was clearly in error in this conclusion, which was the basis of his direction of a verdict. If Crozier  Co. had given a check to the bank for the amount of the dishonored draft, and had agreed that the bank should still retain ownership of the bill of lading, reconsign the goods to another party and apply the proceeds of the draft to the account of Crozier  Co., which appears to have been overdrawn, the transaction would have been perfectly legitimate, and would not have revested the title to the bill of lading in Crozier  Co.
On the other hand, if the bank simply charged back the amount of the dishonored draft on its books to Crozier 
Co., it would have been the height of simplicity to surrender the bill of lading to Crozier  Co. and have no security at all for the original advance. *Page 533 
The Circuit Judge seems to have been under the impression that, as soon as the amount of the draft was charged back on the books of the bank to Crozier  Co., the title to the bill of lading immediately revested in Crozier Co. If that be true, I cannot conceive of an easier method to negotiate a loan with a bank without any collateral security at all; all that need be done would be to make draft upon one known to be unreliable, have it returned dishonored, charged up to the drawee (which would be the ordinary business method of bookkeeping), and then demand the bill of lading held by the bank, upon the ground that when it simply made a bookkeeping entry against the drawer, the title revested in him.
It appearing to me that the bank unquestionably at one time had title to the oats, and that there was certainly some arrangement between it and Crozier by which the bank still retained the title, after the draft was returned, the Circuit Judge was in error in withdrawing the issue from the jury.
Granting that there is uncertainty in the evidence whether Crozier  Co. gave them check for the dishonored draft or simply had the bank to charge the amount back to them on its books, I think there was an issue of fact which should have been submitted to the jury under either contingency.
Certainly, even if Crozier  Co. gave their check for the draft, there was nothing to prevent them from agreeing that the bank should still retain title to the bill of lading, collect a draft upon reconsignment, and apply the proceeds to their deposit account as security for an overdraft or even upon open account. With still greater confidence it may be asserted that, if the bank simply charged the draft back to Crozier  Co., it had the right to retain the bill of lading for the amount of the original advance.
MR. JUSTICE MARION concurs. *Page 534