Farmers & Merchants Deposit Co. v. Boulevard Bank & Trust Co.

Adams, J. His Honor instructed the jury, in substance, as follows: If, after this money had been received by the defendant, a part of it ($179.26) was seized under attachment and taken by process of law from the defendant’s custody, the defendant would not be liable to the plaintiff, and in that event the first issue should be answered in the negative. To this instruction the plaintiff excepted. It was held, in Finch v. Gregg, 126 N. C., 176, that when .a purchaser of goods has accepted and paid a draft drawn on himself by the'consignor for the purchase price to a holder in due course, the consignee or purchaser may recover damages of the holder for the consignor’s breach of warranty; but this principle was afterwards disapproved, the Court holding, on the contrary, that where a bank becomes a holder in due course of a draft drawn by the consignor on the consignee for the purchase price, with a bill of lading attached, the consignee takes the goods *613 subject to tbe rights of the holder of the bill of lading to the amount of the draft, and he cannot retain as against the holder the price of the goods on account of a debt due him by the consignor. Mason v. Cotton Co., 148 N. C., 492. See, also, Bank v. Hatcher, 151 N. C., 359; Latham v. Spragins, 162 N. C., 404; Lumber Co. v. Childerhose, 167 N. C., 34; Holleman v. Trust Co., 185 N. C., 49; C. S., 3038; 49 L. R. A., 679, note; 91 A. S. R., 212, note; 49 L. R. A. (N. S.), note; Means v. Bank, 146 U. S., 620; 36 L. Ed., 1107. There is evidence tending to show that the plaintiff is a holder in due course of the draft and the bill of lading, and no evidence that the defendant gave to the plaintiff any notice whatever of the attachment, or of the pending suit, until some time after the defendant had obtained judgment in a justice’s court. Under these circumstances, his Honor misinstructed the jury, and for this error the plaintiff is entitled to a New trial.