Cutters v. Baker

The judgment of the court was pronounced by Slidell, J. Cutters and Phetys are the holders of three bills of exchange drawn by Baker on Fellowes, Johnson Sf Co., .on the 27th August, 1845. These bills are not in the usual form, requiring an .absolute payment by the drawees, but their tenor js, “ on the receipt of funds belonging to me, pay to the order of Cutters Sf Phelps, within sixty days from date.” Cutters Phelps sent these bills for .collection to their agents at New Orleans. In their letter they say : “We will thank you to have them accepted by F. J. §■ Co,, and hold them for payment, .and as fast as money is paid on them forward it to us. Mr, Baker says he is sending them a lot of barrels to sell for him, with directions to pay on these drafts as fastas-tliey realise the money; and their acceptance of our drafts is not to bind them-^only to pay over as fast as they collect money. We presume ¡they will not object to accepting the drafts on these terms. If they should ob* ject and will not accept them, ask them to agree to dispose of the funds of Jeer, as they come into their hands, in .accordance with the drafts,” [573] The agent of plaintiffs accordingly presented the drafts to Fellowes. Johnson 4' Co., who declined to accept, and stated that they had no advice from the drawer, and that he had no authority to draw. A few days after this, F. J. & Co. received a letter from Baker, under date of 29th August, 1845, in which he says: “I have taken the liberty to draw .sundry bills on your house, predicated on a shipment of barrels, which will leave Paducah about tbe 10th or 15th September next. Of course I do not expect you to accept these bills, (without you please to do so,) but merely to say that you are advised that funds will be in your hands to meet them at maturity. Some days subsequently the agent of the plaintiffs called again with the bills, when F. J. Sf Co. exhibited to him Baker’s letter. There is some discrepancy in the testimony as to the precise purport of what passed between them; but, after a careful consideration of all the testimony, we consider the substance and .effect of it to be, that F. J. §■ Co. promised to hold the proceeds of the barrels that might be shipped in conformity to Balter’s letter of advice, applicable towards the payment of all the bills drawn against such contemplated shipments. To the holders of tlio other bills the same promise was made as to the plaintiffs. We consider these facts as amounting to an agreement between F. J. & Co, and .the holders of these bills, that the pi'oceeds of such barrels as should thereafter come to theirhands from Baker, under the letter of advice of 29th August, shouid be appropriated towards those bills, and that F. J. & Co. could not thereafter appropriate the proceeds of that merchandise to other purposes. But the plaintiffs have no right to hold F. J. Co. absolutely answerable as acceptors. They have incurred only a qualified liability, that is, for the pro rata of the proceeds. Several shipments of barrels were subsequently received by F. J. & Co., and being received generally they were fairly .applicable to the benefit of the bill holders. But there was one shipment of barrels for which they cannot be so charged. In November, 1845, F. J. & Co. received from Baker a letter enclosing receipts of certain parties at Plaquemine and Donaldsonville, for 1045 barrels, placed in their hands by Baker. In this letter Baker directs F. J. Co. to advertise these Jots, and when sold to apply the proceeds first to the payment of a draft held by Story for §700, which seems to have been based upon those consignments, and afterwards to the bills above mentioned, giving a preference to the plaintiffs’ bills. At the time when Baker wrote this letter, these two consignments were under his own control, and the receipts in his own possession. Consequently he had a right to direct the appropriation of their proceeds, and F. J. if Co. in accepting the consignments, were bound to obey his orders. The promise made by F- J- Co. to the plaintiffs cannot therefore be considered as comprehending that property, F. J. fy Co. paid the Story bill, and charged it against the proceeds of the other consignments of barrels. This they had no right to do. Bat having paid the money to Story, they are as factors entitled to a privilege upon the 1045 barrels for their reimbursement, when they shall be sold, which had not been done when this cause was tried in the court below. Besides .the barrels, some small shipments of other merchandise were made by Baker to the defendants. The drafts held by the plaintiffs and the other bill holders standing in the same categ02-y, were not bas.ed upon the shipments other than of the barrels, and are not covered by the agreement to appropriate proceeds made by F. J. 8f Co. They had a right to appropriate the proceeds of these other shipments to their account with Baker, for advances made before the .levy of attachment by plaintiffs, and Bennett, .another creditor, [574] Under the view above expressed, the plaintiffs are entitled to receive from F. J. 4* Co. towards payment of their bills their pro rata of proceeds of shipments of barrels, to wit, $ . If the consignments of1045 barrels should realise more than enough to reimburse F. J. fy Co. what may be uncovered of the $700 paid to Story, and charges pertaining to those consignments, the plaintiffs will be entitled to the benefit of such surplus. There is another creditor Whose rights remain to be considered. One Bennett, subsequent to the agreement between F. J. 8f Co. and the bill holders, brought spit by attachment against Baker, and garnisheed F. J. 4- Co. We consider the rights of the bill holders as superior to those of this attaching creditor. The agreement made between the bill holders and F. J. 4* Co., in conformity to Baker's letter of advice, anterior to the attachment, placed that merchandise and its proceeds beyond the control of Baker. Bennett could only obtain, by his attachment, a right secondary to the bill holders, and also to the factors’ privilege for advances and balance of account .accrued ¡anterior to the attachment. See the cases of Urie v. Stevens, 2 Rob. 252. Armor v. Cockburn, 4 Mart. N. S. 667. Babcock v. Malbie, 7 Ib. N. S. 139. Civil Code, art. 3214. Act of 17 February, 1841, p. 21. If we suppose that, after paying the bill holders and the factors, there could be any thing left for Bennett, we would leave the case open to ascertain the balance ; but of this there is no probability. It is therefore decreed, that so much of the judgment of the court below as renders judgments in favor of Cutters Phelps, William A.Bennett, and Fellowes, Johnson Co., respectively against the said Baker personally, be affirmed; and that as to the residue of said decree the same be reversed and set aside ; and proceeding to render final judgment in this cause, it is decreed that, as to the claim of said Bennett as attaching creditor, that there be judgment in favor of said garnishees, Fellowes, Johnson Co., with eosts of the garnishment; that the said Cutters 8f Phelps recover from the said Fellowes, Johnson 4' Co. the sum of $230 49, with costs of this suit in the court below, reserving to the said Cutters 4' Phelps their rights, as in the opinion of this court stated, with regard to the surplus, if any there may be, of the proceeds of the 1045 barrels at Plaquemine and Donaldsonville, in the answer of the garnishees mentioned. And it is further decreed that one half of the costs of this appeal be paid by the said Bennett, and the other half by the said Cutters Phelps,