Farmers' Exchange Bank v. Greil Bros. Co.
Farmers' Exchange Bank v. Greil Bros. Co.
Opinion of the Court
One Richardson, acting as the agent of-Bramham Grain Company, located at Union City, Tenn., and engaged in the wholesale grain business, contracted to sell to Greil Bros. Grocery Company, WinterLoeb Grocery Company, and Belcer Grocery Company, all of Montgomery, Ala., a carload of seed corn. In accordance with that contract, on March 16, 1918, Bramham Grain Company, shipped a carload of seed corn to Montgomery to its own order, “Notify Greil Bros., Montgomery, Alabama.”
Thereupon Bramham Grain Company drew three drafts for $592.82, $59.28, and $1,682.--87 upon Winter-Loeb Grocery Company, Belcer Grocery Company, and Greil Bros. Company, respectively, which said drafts aggregated the purchase price of the said carload of corn, attached these drafts to the bill of lading, indorsed the hill of lading to the Farmers’ Exchange Bank, the claimant here, whereupon the proceeds of the three drafts were placed to the credit of the Bramham ■Grain Company with the Farmers’ Exchange Bank, and subsequently checked out by it in the payment of its various obligations.
The three drafts, thus indorsed, with the bill of lading attached, were sent by the Farmers’ Exchange Bank to the First National Bank of Montgomery for collection and return. The drafts on Greil Bros. Company and Belcer Grocery Company were paid, and thereupon the Montgomery Bank delivered the bill of lading, covering the entire carload of corn, to Greil Bros. Company; the draft of Winter-Loeb Grocery Company for $592.82 remaining unpaid.
Greil Bros. Company unloaded and received the portion of the contents of the car intended for it. The Winter-Loeb Grocery Company took its part of the corn from the car, but complained that the com did not come up to sample, and refused to accept it or to pay the draft. After some negotiations with the agent of the Bramham Company, extending over several weeks, the WinterLoeb Grocery Company agreed to pay for the corn at the reduced price of $430.30, being an allowance agreed to be made by the Bramham Company, amounting to $162.50, in accordance with a letter written by the Bramham Company to Winter-Loeb & Co., under date of April 17, 191S.
On April 17th, the Bramham Company paid the Farmers’ Exchange Bank $162.50, delivered a draft drawn by it on the WinterLoeb Grocery Company of Montgomery, Ala., to the order of the Farmers’ Exchange Bank for $430.30. On the same day, April 17th, the sheriff served a writ of garnishment upon Winter-Loeb* Grocery Company at the suit of Greil Bros. Company, against Bramham Grain Company.
There was no.special arrangement between the Bramham Company and the Farmers’ Exchange Bank regarding the drawing of drafts by the grain company on its customers, the bank discounting its drafts in the usual way for grain dealers. It was understood, however, that in the event a customer of the grain company failed to pay a draft, which had been discounted by the hank, the hank would call upon the grain dealer to make the amount good.
The case was tried by the court without a jury under an agreement of counsel that the circuit court would hear all the testimony, and decide the issues of law and fact and render a judgment for the party shown by the testimony and pleadings to he entitled tft the funds in controversy.
The Winter-Loeb Grocery Company did not pay the original draft representing the part of the car-of corn allotted to it. This fact in itself did not have the effect of divesting the special interest in the com out of the bank. On the contrary, if the matter had rested at that point, the bank would have been the complete owner. But the grain company was under obligation to the bank, by way of a guarantor, that the draft represented the true value of the goods described in the bill of lading, and when the grain company paid the $162.50 and substituted a draft for a smaller amount on Winter-Loeb Grocery Company, as representing the value of the goods, the title of the bank was not. divested until the substituted draft was paid. It is familiar law that the acceptance of a check or draft is not the discharge of an obligation, unless it is so intended by the parties. The court erred in rendering judgment for the plaintiff. The judgment should have been for the claimant.
The judgment is reversed, and a judgment is here rendered for the claimant.
Reversed, and rendered.
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