The Western Transportation Company, Appellant, v. William B. Barber, Respondent

The Western Transportation Company, Appellant, v. William B. Barber, Respondent. (Argued April 29, 1874; decided May 26, 1874.) Where a consignee is in default in not receiving goods, and in consequence the right is conferred upon the carrier to warehouse them, if the latter deposits them with a store-keeper, subject to his lien for freight, he does not thereby forfeit his lien. In such case the keeper acts under the authority of the carrier and the possession of the former may be regarded as that of the latter for the purpose of preserving his lien. The effect is the same if the carrier, instead of depositing the goods for the owner, subject to his lien, deposits them in his own name. Plaintiff received a cargo of oats for transportation, giving a bill of lading which provided that the consignee should have three week days, after arrival and notice, to discharge cargo, and for every day’s demur-rage beyond the three should pay a specified percentage on freight. Held, that the consignee had a right to detain the boat, if he deemed it necessary, a reasonable time after the expiration of the three days to complete the delivery; that the right so to detain could be terminated only by a notice given by the carrier, to the effect that if the goods should not be received within some reasonable time therein specified they would be stored elsewhere, and that a deposit of the oats by plaintiff, at the expiration of the three days, in defendant’s warehouse, without such notice, was in violation of the rights of the owner and put an end to plaintiff’s lien for freight. Also, held, that defendant, having surrendered the oats upon demand to the true owner, could avail himself of these facts, as a defence in an action by plaintiff for conversion thereof. The rule that a bailee cannot set up title in a third person as. against his bailor is not applicable to such a case. That applies wher.e the bailee seeks to avail himself of the title of a third person for the purpose of keeping the property himself, or where he has not yielded to a paramount title. But where the owner is entitled to and demands possession it is the duty of the possessor to deliver it, and the performance of this duty will not be adjudged tortious as against a bailor having no title. Defendant delivered to plaintiff a weigher’s return of the oats received. Held, that this was not such a receipt as is contemplated by the “ factor’s act ” (chap 326, Laws of 1858), and that the provisions of the act had no application to the case. Appeal from order of the General Term of the Supreme Court in the second judicial department, setting aside a verdict in favor of plain tiff and granting a new trial. This was an action for the conversion of a quantity of oats. The oats were deposited by plaintiff in its own name with defendant, a warehouse man and store-keeper, in the city of Brooklyn, occupying what is known as the Clinton stores. ¡No warehouse receipt was given by defendant, but plaintiff received a weigher’s return, of which the following is a copy: “ Brooklyn, November 10th, 1869. “ Return of ¡Ninety-five Hundred and Forty-six and S1 bus. Oats. Delivered at Store, 5 Clinton Stores. On acct. of Western Transportation Company. “ JAMES LOUGHLIH, Weigher. “ Per C. S. Martin.” Martin was a clerk of defendant’s. The oats were part of the cargo of plaintiff’s boat “ Clio.” They were received' by plaintiff, a common carrier, at Buffalo for transportation to ¡New York, consigned to Jesse Hoyt & Co. of that city. Plaintiff proved a demand and refusal to deliver. Defendant set up in his answer and offered to prove on the trial these facts, among others : That Jesse Hoyt & Co., of the city of ¡New York, were the consignees and owners of the oats in controversy in this action;, which, before being put in store with the defendant by the plaintiff, were in the possession or custody of the plaintiff as a common carrier, on board their boat “Clio,” for delivery to said Jesse Hoyt & Co.; being part of a cargo of 14,650 bushels, of oats which had been shipped at Buffalo by Barclay, Bruce & Co., in and on board said boat. That the oats were shipped under a bill of lading containing this clause : “ Three week days, regardless of weather, after arrival and notice of same, to be allowed consignees to discharge this, cargo; after which time the cargo or consignee are to pay damage at the rate of one and one-half per cent per day upon the freight, including tolls, for each and every day of such demurrage, over the three days as above specified, until the cargo is fully discharged.” That the arrival of said boat “Clio,” in Hew York, was reported to said Jesse Hoyt & Co., by the plaintiff, on Friday, the 5th day of Hovember, 1869, at ten minutes past twelve o’clock in the afternoon. That such report of the arrival of said boat was too late to get samples that day to sell on ’Change, and, therefore, according to the usage and custom in such cases, at that time, in the port of Hew York, said fifth day of Hovember was to be excluded from the three week days allowed to discharge cargo, without charge therefor of demurrage. That on Monday, the eighth day of Hovember, at about one p.m., an order was given to plaintiff to deli ver the oats at a floating elevator, called the. “ Brower.” And said boat was sent by plaintiff, sometime in the afternoon of that day, to the slip where said elevator was, and a part of her cargo was -taken from the boat, when the further discharge of .the oats was first hindered and delayed by obstructions on the land end of the pier, by the plaintiff, and obstructions of carts . bringing freight to their boats, and to boats on the other side of the pier, and that then the discharge of the balance of said oats, before the termination of the time to which said consignees were entitled for the discharge thereof without paying demurrage by the terms of said bill of lading, was prevented by the plaintiff taking away said boat with the balance of the oats on board, without previous notice to, and without the consent of said Jesse Hoyt & Co., and towing said boat, with the oats on board, to the city of Brooklyn, and there putting the same in store in the defendant’s stores, called the Clinton store, on account said plaintiff, in defiance of the rights of said Jesse Hoyt & Co. That shortly after the said oats had been taken into store by the defendant, the defendant was notified by said consignees that the said oats so taken in store belonged to them, and that the putting the same in store by the plaintiff, and for the account of said plaintiff, was unauthorized, and this defendant was notified not to give said plaintiff a warehouse receipt therefor, and he therefore never did give such receipt to said plaintiff. That defendant subsequently delivered said oats on demand to the consignees and owners, and that such delivery was prior to the demand made by plaintiff. The court excluded its evidence, and defendant’s counsel excepted. The court directed the jury to find a verdict for plaintiff for the amount of its claim for freight, with interest. The jury rendered a verdict accordingly. John Hubbell for the appellant. A bailee cannot set up a title in himself, or in a third person, as an answer or excuse for not delivering the property to his bailor. (Edwds. on Bail., 305, 306; Story on Bail., §§ 450, 582; Harmon v. Anderson, 2 Camp., 243; Gosling v. Binne, 7 Bing., 339; Hall v. Griffin, 10 id., 246; Barnard v. Kalbie, 3 Daily, 35.) By the sale and purchase Knapp became in law subrogated to all the rights of Hoyt & Co., and plaintiff became, from that time, the bailee of Knapp. (8 Wall., 153.) Under the terms of the bill of lading and commercial usage Knapp was the one to whom plaintiff was bound to look for the charges. (1 Pars. Mer. Law, 219-222; Menon v. Fump, 4 Den., 110; Abb. on Ship., 517 [8th ed.].) C. Van Santvoord for the respondent. The taking and carrying away and putting in store of the oats by plaintiff was a conversion. (Bristol v. Burt, 7 J. R., 254, 257, 258; Syeds v. Hay, 4 D. & E., 260; Reynolds v. Shuler, 5 Cow., 325; Schœppel v. Corning, 5 Den., 240.) Plaintiff’s lien and right of possession was determined thereby. (Gurr v. Cuthbert, 12 L. J. [Exch.], 309; Scott v. Newington, 1 M. & R., 252 Jones v. Cliff, 1 C. & M., 540; Thornton v. Trail, 6 B. & C., 36; 9 D. R., 31; v. Sprague, 61 Barb., 497.) Defendant having in fact delivered the oats to the consignees as the true owners, on their demand, before demand by plaintiff and before the commencement of this action, said delivery is a bar to plaintiff’s claim herein. (Bates v. Stanton, 1 Duer, 79; Bliven v. H. R. R. R. Co., 36 N. Y., 406; Knapp v. Sprague, 9 Mass., 262; Whittier v. Smith, 11 id., 210; Ogle v. Atkinson,. 5 Taunt., 759; Wilson v. Anderton, 1 B. & A., 450.) Defendant, although a bailee, having surrendered to a paramount title, could dispute his bailor’s title and set up a jus tertii. (Biddle v. Bond, 6 B. & S. [Q. B.], 224; [118, E. C. L.] ; Hardman v. Wilcox, note A, to White v. Bartlett, 9 Bing., 382; Cheeseman, v. Exall, 6 Exch., 341, 346; Sheridan v. New Quay Co., 4 C. B. [N. S.], 618; [93 E. C. L.] ; Dixon v. Yates, 5 B. & A., 340; 27 E. C. L., 92.) [MAJORITY — Grover, J.] Grover, J. The first inquiry is whether the plaintiff lost its lien for freight upon the oats by failing to deliver them to Hoyt & Co., pursuant to the bill of lading, and warehousing them with the defendant in its own name. This will, I think, depend upon the question whether Hoyt & Co., the consignees, were in default in not receiving the oats in the time they were required so to do by the bill of lading so as to confer upon the carrier the right to remove them from its boat by placing them elsewhere. It is said that a lien can exist only while the lienor retains the possession of the property subject thereto. This is the undoubted rule applicable to the rights of the lienor and general owner. If the former delivers possession of the property to the latter he thereby waives his lien. (McFarland v. Wheeler, 26 Wend., 467.) But in this case the oats were not so delivered, but placed by the plaintiff, in its own name, in the. warehouse of the defendant; and the question is, whether this discharged the lien, assuming that by the default of the consignees in receiving them the plaintiff had the right to remove them from its boat by placing them elsewhere. It was held in Fish v. Newton (1 Denio, 45) that, when the consignee refused to receive the goods, the carrier might discharge himself from further responsibility by depositing the same with a store-keeper in good credit, for the owner, taking his receipt for the same. Whether if he so deposited, subject to his lien, he preserved the same, was not involved or determined in the case. But I am unable to see any but the most technical reason for holding that, under such circumstances, the lien would be lost. These reasons are that the carrier has parted with the actual possession, which is necessary to uphold the lien; and, second, that it is, substantially, a delivery to the owner. As to the first, I concur with the observation of Senator Verplanck, in his opinion in McFarland v. Wheeler (supra). He says, “ it is true that the possession thus essential to the lien need not always be the direct and actual possession of the party; that of his agent or servant, or the keeper of a warehouse acting under his authority is also his own, for this and many other legal purposes.” The senator evidently refers to a warehouse belonging to another than the carrier, the keeper of which acts under the authority of the carrier in respect to the particular goods deposited. As to these the keeper acts under the authority of the carrier, and his possession may be regarded as that of the carrier, for the purpose of preserving the lien. The delivery for the owner is subject to the condition of his paying the freight; and he cannot, otherwise, obtain actual possession of the goods. It is said in some of the cases, that a lienor has no right to subject the goods to any additional lien in favor of another; that by so doing he would be liable for a conversion of the goods. This, in the cases where the rule was applied, is correct, but not so as to a carrier who has been obliged to deposit the goods in a warehouse because of a refusal of the owner to receive them. Then the creation of a further lien for the •warehouse charges is made necessary by the act of the owner; and it is immaterial to him whether the carrier creates this additional lien, in his own favor by depositing them in a warehouse of his own, if he has one, or in behalf of another in whose warehouse he makes the deposit. In the present case the plaintiff did not deposit the oats for the owner, but in its own name, as its property. Such a deposit, if made in consequence of the default of the owner in receiving, would no more discharge the lien than if made by the plaintiff in a warehouse of its own. The keeper, as in the case of a deposit for the owner subject to the lien, had possession by authority of the .carrier; and his. possession is to be deemed that of the carrier, for the purpose of preserving the lien. The question, therefore, is whether the owner was so far in default in receiving the oats as to confer upon the plaintiff the right to abandon further attempts to deliver to him, and obtain the immediate use of its boat by depositing them elsewhere. If he was, the deposit was rightful, and the lien preserved. If he was not, it was wrongful and in violation of the rights of the owner, and a conversion of the oats by the plaintiff, which, it is clear, destroyed the lien. The defendant offered to prove that the arrival of the boat in Hew York was reported to the owner after twelve o’clock (noon) of the fifth of November; that, by the usage of the port, the day upon which the arrival was reported at that time is excluded from the number of days provided for receiving the goods; that on the eighth of November the owner directed the defendant to deliver the cargo at the floating elevator of one Knapp in the East river; that the boat was on that day taken by the defendant’s servants to the elevator and a part of the cargo discharged, but the unloading was retarded to some extent by an accumulation of freight, unloaded from other boats of the plaintiff. Hear the close of the day, it becoming certain that the residue of the cargo could not be unloaded there that day, the plaintiff directed its servants to take the boat to the warehouse of the defendant and store the oats there; which was done accordingly, in the name of the plaintiff, without giving any notice whatever to the owner of an intention so to do. The bill of lading provided that the consignees should have three week days after arrival and notice, regardless of the weather, to discharge the cargo; and for each and every day of demurrage over and above the three days, they should pay the carrier, as damages, one and a half per cent a day upon the entire amount of freight, including tolls upon the cargo. The intention of this last clause was, I think, to give the consignees a right to detain the boat, if necessary, a reasonable time after the expiration of the three days, to complete the delivery; which necessity the consignee might in the first instance determine. But it was not the purpose of the clause to give the consignee more than a reasonable time to complete the unloading after the expiration of the three days. This right of the consignee further to detain the boat must, I think, be terminated by a notice given by the carrier to the effect, if the goods shall not be received within some reasonable time, therein specified, they will be stored elsewhere. This construction is warranted by the language of the bill and the rules of law; otherwise, no absolute right whatever is conferred by the clause upon the consignee. If the carrier has the right immediately upon the expiration of the three days, at once, without any notice to the consignee, to deposit the property in a warehouse selected by him, at the owner’s expense, and abandon all further attempt to deliver to the owner, the clause secures no benefit to the owner; it merely gives an option to the carrier to give further time upon the terms specified, if he pleases, and if not, store the property elsewhere. This is not the fair construction of the clause. It follows that depositing the oats by the plaintiff in the defendant’s warehouse, under the circumstances, was in violation of the rights of the owner, and tortious, and consequently put an end to the plaintiff’s lien for freight. The remaining question, is whether the defendant, having received the property by bailment from the plaintiff and delivered the same upon demand to the true owner, he can set up the latter facts as a defence to an action by the plain- , tiff for the conversion of the property. The right of a bailee to set up title in a third person, as against the claim of his bailor, has been much considered. It is said that neither a wharfinger nor warehouse man can deny the right of the person from or for whom lie receives the property. That they are the agents of the persons from whom they receive the property, and cannot dispute their title. (Edwards on Bailments, 305, 306; Story on Bailments, §§ 450, 482.) This general rule is sustained by numerous cases, a citation of which is unnecessary. It applies in all cases where the bailee seeks to avail himself of the title of a third person for the purpose of keeping the property himself from the bailor, and to all cases where the bailee has 'not yielded to a paramount title in another. The question in this case is whether it applies in case he has done so. It does not apply where the property has been taken from the bailee by due process of law. (Story on Agency, §§ 211, 249; Bliven v. The Hudson River Railroad, 36 N. Y., 403.) Nor where the bailor has obtained possession feloniously or by force, or fraud. (Bates v. Stanton, 1 Duer, 79; Rung v. Richards, 6 Wharton, 418.) Upon principle I can see no difference. As to the right of the bailee to deliver the property to the true owner upon demand by him, as against his bailor having no title, depending upon the mode in which the bailor obtained possession — how can this affect the question ? The bailee could not set up the jus t&rtii against his bailor, however tortious the latter may have acquired possession, unless the owner has claimed the property and the bailee has yielded to the claim. Why may he not set up the right under the same circumstances when the possession of his bailor was lawfully acquired ? A bailor can confer upon his bailee no better title than he has himself, except in cases of negotiating bills of lading and like cases. If the owner demands the property of the bailee and he refuses to deliver it to him, he is at once liable to him in an action for its conversion. This is a tort, and it would be somewhat anomalous, if the bailee should shield himself from this by delivering the property to the owner, that he could not show such facts as a defence to the groundless claim of the bailor for the property. I think the best considered cases hold that the right of a third person to which the bailee has yielded, by delivering the property, may be interposed in all cases as a defence to an action brought by the bailor, subsequently, for the property. When the owner comes and demands his property he is entitled to its immediate delivery, and it is the duty of the possessor to make it. The law will not adjudge the performance of this duty tortious as against a bailor having no title. Biddle v. Bond (6 Best & Smith, 224) was thoroughly considered, and the above conclusions established upon grounds which I think unanswerable. (See also, White v. Bartlett, 9 Bing., 382, and note a; Cheesman v. Exall, 6 Ex., 341; Dixon v. Yates, 27 Eng. Com. Law, 92.) The receipt given by the defendant was not such as is required by the factor’s act. (Laws of 1858, chapter 326.) The provisions of that act have no application to the case. The order appealed from reversing the judgment recovered by the plaintiff and directing a new trial must be affirmed and judgment absolute given for the defendant, upon the stipulation. All concur. Order affirmed and judgment accordingly.