Elliston v. Atlantic States Warehouse Co.

Hill, J. (After stating the foregoing facts.) These two cases were tried together and submitted to the trial judge to pass upon all the issues of law and fact, without the intervention of a jury. Both eases were tried upon the same evidence, and the court made a written opinion and entered one judgment in both cases, as follows: “1. The demurrer of-the trustee in bankruptcy for the Georgia Products Co. to the answer of the warehouse company is hereby overruled. 2. The relief prayed for in the intervening petition of the trustee in bankruptcy for the Georgia Products Co., to wit, the recovery of the 240 bales of cotton, is hereby refused and denied. 3. The demurrer by the trustee in bankruptcy for Barrett & Co. Inc., to the answer of the warehouse company, is hereby overruled. 4. The relief prayed for in the intervening petition of the trustee in bankruptcy for Barrett & Co. Inc., to wit, for the recovery of the 240 bales of cotton, is hereby refused and denied. 5. The 240 bales of cotton described in said interventions are hereby held to be the cotton of the Atlantic States Warehouse Co., for the reasons hereinbefore stated, and will be held by the receiver in this cause to be disposed [247] of by said receiver under the orders of this court for the purpose of using the proceeds in indemnifying the warehouse company for the amounts which it has already paid out in satisfying said outstanding receipts.” We are of the opinion that the court did not err in overruling the demurrers to the answer of the Atlantic States Warehouse Co., and also that the court’s findings of fact were authorized and supported by the evidence. The special grounds of the motion for new trial, properly construed, are included within the general grounds. This is a suit in equity, brought by the Atlantic States Warehouse Co. against Phinizy & Co. et al., praying for injunction, receiver, and to determine to whom belonged certain cotton stored in the warehouse of the plaintiff, and that the various claimants of cotton stored with plaintiff by Barrett & Co. be required to interplead concerning their respective claims. To the above suit' Boy Elliston, as trustee in bankruptcy of the Georgia Products Co., and also as trustee in bankruptcy of Barrett & Co. Inc., filed interventions claiming the 240 bales of sea-island cotton. It appears from the record that the Atlantic States Warehouse Co. owned a large warehouse located in the City of Augusta, in which were a large number of compartments where cotton was stored for its customers, and for which a storage charge was made; and that the warehouse company entered into different kinds of contracts with its customers. In some cases these compartments were leased or rented to customers on a strictly rental basis, and in those cases the warehouse company had nothing to do with the handling or looking after the cotton. In the present case the warehouse company entered into a contract with Barrett & Co. Inc., under the terms of which Barrett & Co. Inc. agreed to pay to the warehouse company the sum of $750 per compartment per annum for nineteen compartments during the period of the life of the contract. The warehouse company bound itself to receive the cotton of Barrett & Co. Inc., and to store it in the particular compartments designated in the contract, and to hold the cotton; and the warehouse company “shall not insure against loss or damage, by fire or otherwise, the said cotton só to be stored, and that its liability is only that of a warehouseman. Assignable receipts will be issued against cotton in storage.” ■ Barrett & Co. Inc. was a corporation acting as a cotton factor [248] and received cotton as such from its customers, and was also engaged in buying, selling, holding, and exporting cotton in large quantities. The Georgia Products Co. was a corporation chartered in 1920, but the record shows that no stock was ever issued by the Georgia Products Co., but that Barrett & Co. Inc. subscribed for the entire $250,000 of its capital stock; that the Georgia Products Co. kept no books of account, and that such accounts or entries as were made for it or against it were entered on the books of Barrett & Co. Inc. Frank EL Barrett, the president of Barrett & Co. Inc., was the chief operating officer of that corporation, and held the same position with the Georgia Products Co. Thos. Getzen was the secretary of Barrett & Co. Inc., and was also the secretary of the Georgia Products Co.; and the other nominal officers of the Georgia Products Co. were employees of Barrett & Co. Inc. It also appears that the Georgia Products Co. had no paid-up capital. It bought cotton in its own name, but never received the proceeds of any cotton sold in its name, but Barrett & Co. Inc. received the proceeds of all sales, and the transactions between the Georgia Products Co. and its customers were entered on the books of the Georgia Products Co., kept on the books of Barrett & Go. Inc.; and these entries were mainly kept by cross-entries, that is to say, the Georgia Products Co. would be charged with the cost of a transaction, and when the cotton was sold it was not credited with the proceeds of the sale, but the cross-entry was made on the books of Barrett & Co. Inc., crediting the amount which had been originally charged. In these circumstances, and those detailed in the record, we are constrained to hold that Barrett & Co. Inc. and the Georgia Products Co. were one and the same, notwithstanding the fact that the name of the Georgia Products Co. was frequently used by Barrett & Go. for the purpose of buying and selling cotton, etc. There was never a complete organization of the Georgia Products Co., and at most it was a mere de facto organization. We are also of the opinion that the relation existing between the Atlantic States Warehouse Co. and Barrett & Go. Inc. was not a mere relation of landlord and tenant, where the title to the property remained in the tenant; but that when the warehouse company issued assignable receipts under the contract against cotton stored with it, its liability under the contract was that of a warehouseman, or that the relation between the parties was that of bailor [249] and bailee, and that when Barrett & Co. Inc. had stored with the warehouse company cotton which had been assigned by Barrett & Co., the warehouse company could not be required to deliver the cotton to Barrett & Co. until the receipts were produced either by itself or by its assignees; and where it appears, as in this case, that such receipts had been assigned and that the warehouse company had paid off to the holders of those receipts represented by them, the warehouse company was subrogated to the rights of the holders of those receipts, and that whatever cotton remained in the warehouse belonged to the warehouse company, as between the warehouse company and Barrett & Co. Inc., or the assignees of those receipts. See 27 R. C. L. 953, where it is said: “Under the generally accepted definitions of bailment it is well settled that when goods are stored in a warehouse the relation of bailor and bailee is created between the owners of the goods and the ware1 houseman. The fact that the goods are placed in a separate room and that the bailor is allowed the key to the room does not make the relation that of landlord and tenant.” And see Citizens Banking Co. v. Peacock, 103 Ga. 171 (2, 3, 4) (29 S. E. 752); Trainer v. Saunders, 19 A. L. R. 861 (270 Pa. 451, 113 Atl. 681); Reading Trust Co. v. Thompson, 254 Pa. 333 (98 Atl. 953); Safe Dep. Co. v. Pollock, 85 Pa. 391 (27 Am. R. 660); 1 Am. Neg. Cas. 567; National Safe Dep. Co. v. Steed, 250 Ill. 584 (95 N. E. 973, Ann. Cas. 1912B, 430). From the foregoing we reach the conclusion that whether this cotton in controversy was deposited in the name of Barrett & Co. Inc. or in the name of the Georgia Products Co. by the same controlling head of both corporations, the relation between the parties was such that the warehouse company and Barrett & Co. Inc. understood that the warehouse company was liable to Barrett & Co. Inc. for the value of the cotton; and when the warehouse company paid either Barrett & Co., or the holders of the receipts issued to Barrett & Co. Inc. by the warehouse company, no one then had any claim against the warehouse company on account of any cotton stored there by either Barrett & Co. Inc. or by the Georgia Products Co.; and therefore the trustee in bankruptcy can not recover such cotton, or the value thereof, for either of them. Judgment affirmed. All the Justices concur.