Court Opinion

ID: 7992748
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:33:08.795645+00
Date Added: 2024-06-11T16:35:23.492498
License: Public Domain

EthRidge, J.,
delivered the opinion of the court.
The Vossburg Lumber & Novelty Company filed a suit against the Bank of Pachuta and H. B. Graves for one thousand one hundred dollars alleging that the lumber company was engaged in the sawmill business and shipping lumber to customers; that among the customers was the Carter Lumber Company of Meridian, Miss; and that about the 1st of January, 1913, becoming apprehensive of the financial standing of the Carter Lumber Company, it had decided not to ship to said Carter Lumber Company a car of lumber then loaded and billed to it, or other lumber, hut that the Bank of Pachuta, with whom the Carter Lumber Company was doing its banking business, agreed to pay eighty per cent, of the invoice on such consignments, and that having made this arrangement with the Bank of Pachuta through H. B. *713Graves, cashier of the hank, it continued to ship different consignments of lumber to the Carter Lumber Company, and that it assigned to the bank the invoices, and that the Carter Lumber Company had paid the twenty per cent, above the eighty per cent, for which the bank was liable. It is also alleged that the Carter Lumber Company' had executed bills of sale to the Bank of Pachuta from time to time for practically all the lumber on the yard or in the possession of the Carter Lumber Company, and that the Carter Lumber Company in selling lumber sold through the Bank of Pachuta by making out its invoices and sending them ■ to the bank, and the bank collecting the proceeds of such sales from the customers of the Carter Lumber Company and applied it to the indebtedness due by the Carter Lumber Company to the Bank of Pachuta, and that the bank, instead of applying any of the sums to the payment of the eighty per cent, for which the bank was liable to complainant, that it applied the entire proceeds of the sales of the Carter Lumber Company to its individual indebtedness; that in May, 1913, the Carter Lumber Company went into bankruptcy, with liabilities amounting to over forty thousand dollars, and with assets of four hundred or five hundred dollars, after the lumber claimed by the bank under its bills of sale aforesaid was deducted. After the Carter Lumber Company went into bankruptcy the trustee in bankruptcy, through his attorneys, notified purchasers from the Carter Lumber Company not to pay the Bank of Pachuta on invoices sold until the trustee could first make investigations. Thereupon the Bank of Pachuta paid five thousand dollars to the trustee in bankruptcy of the Carter Lumber Company in settlement of its affairs, without being sued therefor.
It was the theory of the bank that it was the mere agent of the Yossburg Lumber & Novelty Company in forwarding the invoices and making collections for the eighty per cent., and that the eighty per cent, payment *714was placed to the credit of the -Vossburg Lumber & Novelty Company as mere advances for which that company was indebted to the bank, and it claimed that the Vossburg Lumber.& Novelty Company had overdrawn the funds in the bank to their credit, and was indebted to the bank in the sum of five hundred and thirty-two dollars. The chancellor found in favor of the complainants, but deducted the amount the bank claimed against the complainants from the original demand, and gave judgment for the balance against both the bank and H. B. Craves. There was evidence showing the bank, through its cashier, knew the condition of -the Carter Lumber Company, and that H. B. Craves had formerly been a stockholder i'n the Carter Lumber Company, and had aided the Carter Lumber Company, through the bank, after selling his stock in the company. The evidence showed that the bank of Pachuta collected for practically all of the sales made by the Carter Lumber Company, and applied the funds so derived to the reduction of its claims against the Carter Lumber Company, and by this means largely reduced the debt the Carter Lumber Company owed it. The chancellor evidently adopted the theory of the complainant on the evidence, and as to the Bank of Pachuta we are of the opinion that the evidence warrants the judgment, and that it would be contrary to equity to permit the bank to act as agent for the complainant, and by its dealing apply the proceeds of the property sold to the Carter Lumber Company to its individual debt, without paying the purchase price to the complainant, and the case is affirmed as to the bank.
We think, however, the evidence does not warrant a judgment against .Graves because throughout the transaction he seems to have been acting for the bank and not to have been personally the beneficiary of the transaction, except as a stockholder of the bank.
*715Judgment will be entered here in favor of Graves, and the costs' incurred on appeal, divided equally between the appellant and the appellee.

Affirmed.