Southern Railway Co. v. Swift & Co.

The opinion of the Court was delivered by Mr. Justice Carter. This action by the. Southern Railway Company, as plaintiff, against the defendants, Swift & Co., C. H. Pfuntner, Improved Ginning & Seed Company, J. J. Haltiwanger, C. *311 E. Morris. H. T. Hughes, and W. G. Peterkin, was commenced in the Court of Common Pleas for Calhoun County, August 23, 1928, on which date service'was made on the defendant, Swift & Co.; service being made on the other defendant at some later date, not disclosed by the record. The suit is an action in claim and delivery for the purpose of recovering from the defendant, Swift & Co. “one (1) three-seventy saw cotton gin outfit, which was in possession of the said Swift & Company, who claimed to be the owner and mortgagee thereof, and which was located at Fort Motte, S. C.” The other defendants, according to the allegations of the complaint, were made party' defendants because they claimed some interest in the machinery, which right of interest the plaintiff denied. The defendants, Swift & Co. and J. J. Haltiwanger, filed answers. The other defendants defaulted. The case was tried at the November, 1928, term of said Court, before his Honor, Judge M. E. Bonham, and a jury. At the trial, the defendant, J. J. Haltiwanger, through his attorney, withdrew his answer, and stated in open Court that he claimed no interest in the property in question. At the close of the testimony introduced on behalf of the plaintiff, the defendant Swift & Co. made a motion for a non-suit, which motion, after hearing argument and after due consideration, his Honor, Judge Bonham, granted and issued an order to that effect, stating his reasons for granting the motion. From the order of nonsuit, the plaintiff has appealed to this Court, upon exceptions which will be reported with the case. The motion for nonsuit was based and granted “upon the ground that the complaint of the Southern Railway set up a cause of action based upon the railway’s subrogation to the claim of Herbert B. Davis, and that the testimony showed that the railway company was not subrogated to the rights of Herbert B. Davis.” Did his Honor, Judge Bonham, properly construe the complaint in holding that the complaint set up no other cause *312 of action than that through subrogation? So much of the complaint as is pertinent to this question is as follows: “4. That on or about the 29th day of July, -1927, one Herbert B. Davis delivered to the Atlanta, Birmingham and Atlantic Railway Company, at Ben Hill, Ga., for transportation to Fort Motte, S. C., and consigned to himself, one (1) three-seventy saw cotton gin outfit, together with the necessary pulleys, shaftings, belts and appurtenances thereto belonging. “5. That on or about the 2nd day of August, 1927, the said cotton gin outfit arrived at its destination, Fort Motte, S. C., over the line of and'in the custody of the plaintiff. “6. That on or about the 4th day of August, 1927, the defendant C. H. Pfuntner, claiming to be the agent of the said Herbert B. Davis, and without any authority whatsoever, went to plaintiff’s agent at Fort Motte, S. C., and obtained the said cotton gin outfit from plaintiff by signing a receipt therefor, as follows: ‘Herbert B. Davis, per C. H. Pfuntner.’ “7. That thereafter the said C. IT. Pfuntner moved the said cotton gin outfit from the premises of the plaintiff and placed the same on a lot in the said town of Fort Motte, which he had bought from the defendant W. G. Peterkin, at which place the said cotton gin outfit is now located. “8. That since the misdelivery of the said cotton gin outfit, as aforesaid, the said Herbert B. Davis brought suit against the plaintiff for the value of the said cotton gin outfit, and did on the 6th day of April, 1928, recover judgment therefor against the plaintiff in the sum of sixteen hundred and seventy-two ($1,672.00) dollars, which judgment plaintiff has paid, and that by reason thereof, plaintiff is now the ozvner of, and subrogated to all of the rights of the said Herbert B. Davis in the said three-seventy saw cotton gin outfit, with pulleys, shaftings, belts and all other appurtenances thereto belonging, and is therefore entitled to the possession thereof. (Italics added.) *313 “9. That the said cotton gin outfit is wrongfully withheld and detained by the defendant Swift & Company, in whose possession the same now is, notwithstanding that demand has been made upon it by plaintiff for the possession thereof, and that the said Swift and Company refused, and still refuses to deliver the possession of the said cotton gin outfit to the plaintiff. “10. That the cause of such withholding and detention of the said cotton gin outfit is by reason of a certain chattel mortgage and deed covering the same, which was given to the said Swift and Company by the said C. H. Pfuntner, who had no title thereto, all of which the said defendant Swift and Company, had due notice before the execution and delivery of said mortgage and deed. “11. That the said property has not been taken for any tax, fine or assessment, pursuant to statute, or seized by virtue of an execution or attachment against the property of the plaintiff. “12. That the value of the said cotton gin outfit is sixteen hundred and seventy-two ($1,672.00) dollars. “13. That the defendants, C. H. Pfuntner, Improved Ginning and Seed Company, J. J. Haltiwanger, C. E. Morris, H. T. Hughes, and W. H. Peterkin, claim some interest in the said cotton gin outfit by way of deed, mechanics’ lien or otherwise, all of which plaintiff denies. “Wherefore, plaintiff demands judgment against the defendant Swift and Company, for the delivery to it, and the possession of the three-seventy saw cotton gin outfit, together with the pulleys, shaftings, belts and other appurtenances thereto belonging, which is now in the possession of the defendant Swift and Company, at Fort Motte, S. C., and in case delivery thereof cannot be made and possession had, then for judgment for the sum of sixteen hundred and seventy-two ($1,672.00) dollars, the value thereof, for the costs of this action, and for such other and further relief as may be just and equitable.” *314 Under our view of plaintiff’s allegations, it is clear that the plaintiff intended to set up and did set up a cause of action based on the right of sugrogation, and we fail to see wherein any other cause of action is set up or attempted to be set up, and the complaint was so treated at the trial of the case. As disclosed by the transcript of record, during the consideration of the motion for a nonsuit, when the trial Judge, answering the contentions of plaintiff’s counsel, stated, “Yes, sir, but you have planted your case flat-footed on the plea of subrogation,” counsel for plaintiff answered, “That is our position.” Also, in the order of nonsuit issued by the trial Judge, his Honor states: “Plaintiff’s counsel frankly state in open Court that it (the action) is based upon subrogation.” Under the well-recognized rule, the plaintiff is bound by these admissions. Ex parte Jones, 47 S. C., 393, 25 S. E., 285; Dixon v. Floyd, 73 S. C , 202, 53 S. E., 167. In this connection, we wish to state that, in our opinion, counsel for plaintiff made a proper and correct admission, and that the trial Judge placed a proper construction upon the complaint. The next question to be considered is, Did the testimony adduced at the trial show that the plaintiff was subrogated to the rights of Herbert B. Davis? The facts proven pertinent to this question, briefly stated, are as follows: Herbert B. Davis, manager of the Gullet Gin Company, with headquarters in the State of Georgia, had among his customers a man by the name of Poole, of Ben Hill, Ga., and C. PI. Pfuntner, of Ft. Motte, S. C. Mr. Davis sold to Mr. Pfuntner, a gin outfit, such as described in the complaint, which he got from Mr. Poole, and Poole looked to Mr. Davis for purchase price of the same. Mr. Davis had this machinery delivered to the railway company at Ben Hill, Ga., for shipment to Ft. Motte, S. C. It appears that Pfuntner paid to Davis a certain sum on the purchase price of this machinery at the time of the trade, the exact *315 amount of payment is not made clear by the record, and, pursuant to the understanding between the parties, Davis stood between Pfuntner and Poole for the balance of the purchase price, and the machinery was shipped in the name of Davis, consigned to himself (Davis) to Ft. Motte, S. C. It further appears that it was agreed between the parties that the shipment was to be made “order notify,” and bill of lading was to be attached to a draft, drawn on Pfuntner for the balance of amount owing by Pfuntner, and forwarded through the banks, so that Pfuntner, by the payment of the draft, could procure the bill of lading and secure the machinery in question from the railway agent at the point of destination, Ft. Motte, S. C. Through some mix-up or misunderstanding, either on the part of Davis or the railway agent at Ben Hill, Ga., or possibly on the part of both of them, the shipment was not made “order notify,” but instead a straight bill of lading was issued and the shipment sent open, in the name of Davis, consigned to Davis. The bill of lading thus issued was attached to draft drawn on Pfuntner, for the amount in question, sent through one of the Georgia banks to a bank in Columbia, S. C. Instead of paying the draft and procuring the bill of lading attached thereto for presentment to the railroad agent of the Southern Railway Company at Ft. Motte, S. C., over whose line of ■ railroad the shipment was handled at Ft. Motte, Pfuntner, according to the testimony, represented to the railroad agent that he was .the agent of Herbert Davis, in whose name the shipment was made and was allowed to receipt for said shipment and receive the same, signing for the same as follows: “Herbert B. Davis, per C. H. Pfuntner” — and thereby procured the machinery in question from the agent at Ft. Motte, and the machinery was installed on a lot located near the station of plaintiff at Ft. Motte. So far as the record discloses, the plaintiff made no effort to get the machinery back from Pfuntner; neither did Davis, though Davis tried to get Pfuntner to pay the draft. After failing to get Pfunt *316 ner to pay the draft, Davis paid to Poole the balance coming to Poole. During this time, so far as the record discloses, the plaintiff, railway company, did nothing, took no action against anyone. Later, Davis instituted a suit against the plaintiff for the amount of the draft, alleging, it appears, that the railway company wrongfully delivered the machinery to Pfuntner, and recovered judgment against the railway - company for the amount involved, which judgment the plaintiff railway company paid. After making payment, the plaintiff commenced this suit, the suit at bar; the pertinent parts of the allegations we have quoted above. Before the shipment in question was made, Davis knew that Swift 61 Co. .was to finance Pfuntner in the transaction; knew that Swift & Co. was to let Pfuntner have, in the transaction for purchasing the machinery, as much as about $2,000.00 and must have known that Swift & Co. expected the machinery to stand good for the advances. After the machinery was delivered to Pfuntner and was in his possession, and before any action was begun by anyone concerning the machinery, Pfuntner executed a mortgage over the property to Swift & Co. While it appears that, before the execution of this mortgage by Pfuntner to Swift and Co., Davis wrote a letter to Swift & Co. in which letter he informed Swift & Co. of the fact that Pfuntner had gotten the machinery from the railway company without producing the bill of lading, but in this letter Davis stated that he did not think Pfuntner intended any wrong, and that he thought he would in a short time take up the draft and that things would work out all right. Mr. Davis, in his letter, also mentioned the fact, or made reference to the fact, that Pfuntner had gotten from Swift & Co. in connection with the transaction, the sum of $2,000.00, showing that he (Davis) had knowledge of the fact that Swift & Co. had some interest in the machinery in question; that such interest of Swift & Co. probably arose before the time when the machinery was delivered to the railway for shipment. The machinery was loaded for ship *317 ment at Ben Hill, Ga., July 29, 1927; it arrived at Ft. Motte, S. C., over the Southern Railway about August 2, 1927, and was delivered to Pfuntner by the agent of the Southern Railway, at Ft. Motte, August 4, 1927. Davis wrote the letter to Swift & Co., above mentioned, August 25, 1927, which letter made reference to the fact that Davis knew of the advances to Pfuntner, at the beginning of the transaction, by Swift & Co. The chattel mortgage covering the property in question to Swift & Co. by Pfuntner was executed about September 12, 1927, and recorded the following day. Rater Pfuntner, before the commencement of the action at bar, executed to Swift & Co. a deed covering the property, in which deed the lien of the said mortgage was expressly reserved. So far as the record discloses, the Southern Railway Company took no steps concerning the property until after suit was brought by Davis against it and procured judgment against it for the amount now involved in the present action, and after paying said judgment, when it commenced this suit in subrogation against Swift & Co. Such, in substance, are the facts proven in the case as we view the testimony, and we think the same shows that the railway company was not subrogated to the rights of Herbert B. Davis. The essential elements of the right of subrogation are: “ (1) That the party claiming it has paid the debt; (2) that he was not a volunteer, but had a direct interest in the discharge of the debt or lien; (3) that he was secondarily liable for the debt or for the discharge of the lien; (4) that no injustice will be done to the other party by the allowance of the equity.” Dunn v. Chapman, 149 S. C., 163, 146 S. E., 818, 820. It appears that the plaintiff in the case at bar has met the first and second condition above stated, but has not met the third requirement, namely, that it was secondarily liable for the debt in question. The suit of Davis against the Southern Railway Company was based on a primary obligation to safely convey and deliver the machinery delivered to it for trans *318 portation from Ben Hill, Ga., to Ft. Motte, S. C. That duty was not a secondary obligation, but a primary obligation, and it was for the failure to perform that primary .obligation that judgment was awarded against it. Therefore, the plaintiff’s suit, which is based on subrogation, falls. We consider it unnessary to consider the fourth requirement mentioned above, and we shall not pass upon the other questions raised by the exceptions, except to say that in any view of the case we think the trial Judge’s order of nonsuit should be sustained. The judgment o"f this Court is that the order of the trial Judge, from which the appeal is taken, be and the same is hereby affirmed. Messrs. Justices BlEasE and StabeEr concur.