Calhoun & Beddingfield v. Manufacturers' Bank

Walker, J. The Court did not correctly construe the contract sued on in this case. It is true that Calhoun & Beddingfield were the only defendants, but the question of their liability may depend upon what transpired between the Bank and Crane & Graybill. Calhoun & Beddingfield negotiated this draft, and with the money received for it, purchased the cotton named in it. Crane & Graybill accepted the draft upon the faith of the cotton consigned to them. They were the parties primarily liable on this paper, but to meet that liability the cotton had been consigned to them for sale. Surely the Bank would not be authorized to take the cotton out of their control and still hold them liable to pay the draft; and if the acceptors would be released by the Bank taking possession of the cotton, much more would the drawers be discharged. Shall the Bank be permitted to recover from the drawers, when it is made to appear that the acceptors have been released from liability by the conduct of the holder ? We apprehend not. The holder must have done no act by which a party primarily liable is released, if he would recover from any of those secondarily liable. He must not have deprived them of a remedy over against those primarily liable. If this be so, do not the rights of Crane & Graybill become a material subject of enquiry, in fixing the liability of Calhoun & Beddingfield ? It seems so to us. This cotton was consigned to Crane & Graybill, subject to the payment of this draft. It is true the draft says the legal title is conveyed to the Bank, but the whole transaction was a loan of money, and the transfer of the cotton a security for the repayment of. the loan. The acceptors are the consignees mutually selected by the parties to sell the cotton and pay the [418] draft; the overplus, if any, of the proceeds of the sales, after paying the draft, belongs, not to the Bank, but to Calhoun & Beddingfield. Calhoun & Beddingfield agreed that Crane & Graybill should sell the cotton and pay the draft; such was the written contract, and by that both parties are bound. By what authority, then, did the Bank take possession of the cotton and ship it to a different market ? It had no such right, and the Court erred in charging the jury that “ under the contract sued on, plaintiff had the right to take control of the cotton consigned to Crane & Graybill, and take it out of their possession.” See Printup vs. Johnson, 19 Ga. Rep., 73; Code Sec. 2728. For this error we reverse the judgment of the Court below, and award a new trial. Some of the other questions cannot arise on another trial; and the remainder can be more satisfactorily passed upon when all the parties shall have had an opportunity to be heard. Judgment reversed.