Court Opinion

ID: 5555895
Source: CourtListenerOpinion
Date Created: 2022-01-11 00:41:03.661144+00
Date Added: 2024-06-11T08:35:19.543665
License: Public Domain

McCay, Judge,
dissenting.
1. I do not concur with the majority of the Court in their judgment in this case. Under the evidence, I think Lathrop & Company liable to Jones on these bills, and that the Court erred in his charge to the jury, suggesting to them that Mr. Lathrop was no more liable on these drafts, if he was Jones’ agent, than if he had drawn them as the clerk of Jones. If Lathrop & Company were only the agents of Jones in drawing the drafts, this would, perhaps, be true; but the charge was calculated to mislead the jury, because the fact of Lathrop & Company’s agency for Jones in the shipment, *413sale, etc., of the cotton was undisputed. The question was as to the agency in drawing the drafts. The former agency might exist, and not the ] at ter. This was the whole point of the case. The charge of the Court was too broad. Under the circumstances, the jury might have understood the Court to hold that Lathrop’s agency in the shipment of the cotton and the procurement of its sale was intended.
2. Under the proof, I am of opinion that, in the drawing of these drafts, Lathrop & Company were acting for themselves and not for Jones, and that they are liable to him as drawers. The proof is conclusive, to-wit: the evidence of Mr. Duncan. Mr. Lathrop himself and others swore that the account upon which these bills were drawn was the account of Lathrop & Company, not Jones.
Mr. Lathrop testified that, at the beginning of the season, he had a credit with Hutchison for £10,000. It is clear, from the statements of the witnesses, that Jones’ cotton, when sold, was carried to the credit on Hutchison’s, on the books of Lathrop & Company, that Hutchison would not have recognized a draft drawn by Jones, and that a draft drawn by Lathrop & Company in favor of anybody else than Jones would have been a perfectly legitimate draft, as the accounts stood, and as was usual with merchants. It was in proof that the interest on any balance there might be in Hutchison’s books to Lathrop’s credit went to Lathrop. It is clear, from the testimony, that no change would have been required on Hutchison’s books if Lathrop & Company had paid Jones the money for his cotton, and drawn these drafts in favor of some one else. Indeed, that was proven to be the usual course of business. Planters rarely want drafts of foreign houses. Ordinarily, the commission merchant at Savannah pays the planter the money, and sells the exchange. Who can say that the very funds for which Jones’ cotton sold was not paid by Hutchison to some other draft of Lathrop ? It appears that Lathrop did a large business with him, was constantly shipping planters’ cotton to him, having the pro*414ceeds carried to Ms own eredit, and selling exchange to any purchasers who might want it at sixty days after sight, upon the fund. In my judgment, the proof is conclusive on this point. The fund on which these bills were drawn was the fund of Lathrop & Company. It was to their credit, on Hutchison’s books, they were authorized to draw, and did draw on it, in favor of anybody they pleased. The interest on the money and the rise and fall of exchange was theirs. Had they been short with Hutchison the credit arising from the sale of this cotton would have gone to pay their debt to him. In other words, according to the course of dealing between Hutchison and Lathrop, the account on Hutchison’s books, against which these bills were drawn, was constantly and regularly considered by Hutchison and Lathrop & Company as the account of Lathrop & Company. When the balance was large in his favor he was able to sell large sums of foreign exchange, and when it was small he had little to sell. Nothing is better settled than that a factor who sells goods for a third person, and mingles the proceeds with his own funds, as by a deposit to his general account in bank, is liable for what may happen to the funds.
This Court, at this term, in the case of A. C. Wiley & Company vs. Burnet & Rixey, held that a factor who sold his client’s tobacco for Confederate money, and mingled the money with his own funds, was liable for the value of the money at the time, notwithstanding he always had on hand a plenty of Confederate money to pay. The ground upon which this decision went, was the acknowledged rule that a factor who mingles his principal’s money with his own is liable for it, no matter what happens to the general bulk; since, by this act, he has made it impossible to separate the fund of the principal and his own fund. The evidence in this case shows, as I think, conclusively, that the proceeds of the cotton was carried to Lathrop & Company’s credit, by the usual course of dealing, to which Lathrop & Company gave their assent; that it went to swell their eredit with Hutchison, and was, to *415all intents and purposes, as much in use by Lathrop & Company as their own fund, on which they could and did draw and sell bills in the market, as though they had deposited every dollar of it with Hutchison, with their own hands. It was their own money, in their own power, to their own credit, in their own use, from the day on which the cotton was sold, and, in all probability, when the drafts were drawn, it had been paid out to their order. They owed Jones this money. They were not mere bailees of it. And they drew these drafts, signed by themselves, as drawers, payable to Jones’ order, in payment of it. No man, in his senses, not intending to be liable, as drawer, would have put his name to such drafts. Jones could, the next day afterwards, have put them on the market as ordinary bills of exchange, in which case the liability of Lathrop & Company would have been unquestionable. This very fact, that Lathrop & Company, old merchants and dealers in exchange, put their names, as drawers, without qualification, to negotiable bills, in favor of Jones, is almost conclusive that they intended to be liable on them. True, as between Jones and them, the truth may be inquired into. But the fact of their signature to drafts, which they knew Jones intended to sell, and which they proffered to sell for him, is utterly inconsistent with the idea that they did not intend to be liable as ordinary drawers.
There is nothing in this evidence to show, or to justify the inference, that any of the parties, either Jones, Hutchison, or Lathrop & Company, considered the proceeds of the cotton in Hutchison’s hands the property of Jones. The witnesses all say that it was not subject to the draft of Jones. True, it does appear that the books of Hutchison would, by the course of dealing, show that the cotton from which the money came belonged to Jones. But, by all the witnesses, it is shown that, by the course of the trade, it was on the books to Lathrop & Company’s credit, and was treated, by both Hutchison and Lathrop & Company, as belonging to the latter. Suppose Lathrop & Company, when they made out. *416this account between themselves and Jones, in which they charged themselves with the proceeds of the cotton, and credited themselves with these bills, and the exchange on them, to balance, had taken the ordinary course. Suppose they had paid Jones the money, and drawn and sold these drafts in the market, payable to somebody else, and they had proven unavailable by Hutchison’s failure, would Jones have been liable to pay back the money? Lathrop & Company would be his agents in one ease as much as the other. The fund drawn upon would be the same in both cases, and Lathrop’s character would remain the same. If he drew on Jones’ fund, and the fund failed, Jones would be liable over to Lathrop & Company. If this be so the liability of planters, shipping cotton to Liverpool, to consignees selected by the seacoast merchants here, is a dangerous business.
This case, I think, turns upon the character in which Lathrop & Company acted in drawing the drafts. The question of negligence in presenting them arises, it is true, but the proof is so strong of acquiescence in the delay, that, on this point, there is little difficulty. By the settled rule in such cases, the draft must be presented in a reasonable time. What is a reasonable time, depends on the facts of each case, and upon the intent of the parties. The evidence is clear that it was known and understood by Lathrop & Company that they would not be presented for a while; and, by their letters, they clearly so advised, and I do not think, under the law, the jury would have found for the defendants, in this point.