Hammer Lumber Co. v. Seaboard Air Line Railway, 179 N.C. 359 (1920)

March 24, 1920 · Supreme Court of North Carolina

179 N.C. 359

HAMMER LUMBER COMPANY v. SEABOARD AIR LINE RAILWAY AND EASTERN MACHINERY COMPANY, et al.

(Filed 24 March, 1920.)

1. Carriers of Goods — Railroads — Attachment — Freight — Advance Charges — Liens—Continued Transportation — Bills of Lading — Vendor and Purchaser — Bills and Notes — Order Notify.

When a shipment of freight by common carrier by rail is to consignor, notify the purchaser, with bill of lading attached to draft, which the purchaser pays, but refuses the shipment as not according to a certain test agreed upon, and there being bach-freight charges on the shipment to the consignor and reshipped upon the same car, not appearing on the purchaser’s bill of lading, except as “advance charges,” in proceedings in attachment by the purchaser to recover the money he had paid to the consignee, Held, the bach-freight charges constituted a lien on the shipment in the carrier’s favor, and enforcible out of the proceeds of the sale under the proceedings in attachment.

2. Carriers of Goods — Connecting Carriers — Freight—Advance Charges— Subrogation — Equity.

Where a common carrier pays the charges of a preceding carrier in the transportation of a shipment of goods, it is- subrogated to rights of that carrier and may demand the entire freight charges before surrendering the shipment.

3. Carriers of Goods — Railroads—Vendor and Purchaser — Attachment— Demurrage — Liens.

Where demurrage charges have accrued on a consignment of goods by reason of attachment proceedings in a controversy between the vendor and purchaser upon the refusal of the plaintiff to pay its proper freight charges, the carrier has its lien for the demurrage thus caused.

Appeal by defendants from Allen, J., at October Term, 1919, of New HANovee, from a judgment upon tbe pleadings by Allen, J., against tbe Seaboard Air Line Railway and Walker D. Hines, Director General.

Tbe judge by consent found tbe facts as follows: Tbe Easton Machinery Company bad shipped to it at Allenton, Pa., from Htica, N. Y., two carloads of boilers, tbe subject of this controversy; at Allenton, Pa., tbe said Easton Machinery Company, without paying said charges and without unloading, resbipped tbe said two cars of boilers on bills of lading from Allenton, Pa., to Wilmington, N. C., to its own order, “Notify Hammer Lumber Company” (tbe plaintiff), which bills of lading came with a draft on tbe Hammer Lumber Company for $800 attached, payable to tbe order of Easton Machinery Company, which, when presented, was duly paid by tbe plaintiff; said draft was a part of tbe purchase money of $1,400 agreed to be paid for said boilers, and tbe balance of $600 was to be paid provided tbe boilers stood a certain agreed test at Wilmington, and were accepted by plaintiff; they did not come up to tbe agreement and were rejected by plaintiff after they were subjected to tbe test at Wilmington; no part of this agreement was known to tbe railway company; tbe said boilers arrived at Wilmington 25 August, 1919, and on 9 September tbe plaintiff caused a warrant of attachment to be levied thereon as tbe property of tbe defendant Easton Machinery Company, it having refused to refund to plaintiff tbe said sum of $800, which bad been paid on their draft under tbe agreement to refund if tbe boilers failed to stand tbe agreed test. The plaintiff tendered to tbe agent of tbe carrier at Wilmington tbe freight and all charges from Allenton, Pa., to Wilmington, N. C., up to and including 23 September, 1919, together with tbe bills of lading above mentioned, but tbe defendant railroad company refused to receive tbe same unless tbe plaintiff would also pay tbe “advance charges from Htica, N. Y., to Allenton, Pa., of $236.36,” said sum being shown on tbe way bill as advance charges, but no notice of same being shown on tbe bill of lading.

Tbe Hammer Lumber Company recovered judgment against tbe Eas-ton Machinery Company for $1,433.29, and it was further adjudged that tbe plaintiff pay into court the sum of $236.36, tbe amount shown on tbe way bill as advance charges to wait tbe further order of tbe court and further that tbe plaintiff pay to tbe carrier tbe sum of $416.93 being tbe. freight and charges from Allenton to Wilmington admitted by tbe plaintiff to be due, and directed tbe sheriff to sell tbe said boilers, and after paying into court tbe charges for demurrage accrued against said shipment since 23 September, 1919, amounting to $267.80 and costs <of sale, to pay over tbe balance to tbe Hammer Lumber Company.

Tbe court further held, as a matter of law, that tbe defendant, Seaboard Air Line Eailway Company and Walker D. Hines, Director 'General, are not entitled to recover tbe said sum of $236.36 due for advance charges from Htiea, N. Y., to Allenton, Pa., as marked on tbe way bill.

Tbe defendants, Seaboard Air Line Eailway and Walker D. Hines, superintendent, excepted to tbe judgment that they were- not entitled to recover said advance charged out of tbe proceeds of tbe sale of tbe boilers, nor tbe $267.80 demurrage charges up to tbe sale.

J. A. McNorton for plaintiff.

John D. Bellamy & Son for defendants.

Clark, C. J.

Tbe shipper of tbe machinery was tbe Easton Machinery Company at Allenton, Pa., wbo-resbipped on tbe same cars this freight which it bad received from Utica, N. Y. Tbe bill of lading to tbe plaintiff carried only tbe charges on tbe freight from Allenton to Wilmington, but tbe way bill showed that there were “advance charges” from Utica to Allenton, and tbe freight came through without having been taken off tbe cars at Allenton. There was an agreement between tbe plaintiff and tbe shipper that if tbe freight did not come up to a certain test, which it did not do, tbe plaintiff could return it. Tbe carrier bad no knowledge of this agreement.

When tbe boilers were rejected by tbe plaintiff, it tendered payment of tbe freight and charges from Allenton to Wilmington, and attached tbe boilers for tbe $800, which it bad advanced on a draft from tbe consignor and for which it claimed tbe return, and for tbe freight paid. Tbe carrier contended that it bad a lien upon tbe freight for tbe entire transit charges from Utica, N. Y., to Wilmington, N. C., which tbe plaintiff denied, but paid tbe freight and charges on tbe goods from Allenton to Wilmington, and, under tbe order of tbe court paid into tbe court tbe charges from Utica to Allenton to abide tbe judgment of tbe court.

"We think the court was in error in bolding that the carrier was not entitled to bis lien upon tbe freight for the advance charges from Utica to Allenton. In Hutchinson on Carriers (3 ed.), sec. 660, it was held that the shipper of goods may at any time countermand the directions as to consignment and require the carrier to redeliver to himself, and that when the consignor changes the destination or diverts the goods to a new consignee the reconsignment does not break the connection. Trading Co. v. R. R., 178 N. C., 182, but the new destination is regarded as the original one, quoting Myers v. R. R., 171 N. C., 190.

The carrier has a lien on goods to secure the payment of freight and charges in the nature of demurrage, accruing during its transportation, Hutchinson on Carriers (3 ed.), see. 862. The freight charges are a lien on the goods transported, and when one carrier pays the charges of a preceding carrier it is subrogated to the rights of that carrier, and may demand the entire freight charges before surrendering the shipment. R. R. v. Pearce, 192 U. S., 397.

The bill of lading in this case showed that the shipment was from the Easton Machinery Company to itself, as consignee with order “Notify Hammer Lumber Company.” When the plaintiff took up the bill of lading, paying the $800, and later attached the goods for a breach of agreement between itself and the Easton Machinery Company, it was only entitled to take the goods subject to any lien thereon which the Easton Machinery Company owed thereon, which included the “advance charges” for the shipment from Utica, N. Y., to Allenton, Pa.

As between the purchaser, the Hammer Lumber Company, and the Easton Machinery Company, the former owed only the purchase price plus the freight from the point of shipment expressed or implied, i. e., from Allenton, but as between the Easton Machinery Company and the carrier the shipment being to the Easton Machinery Company as consignee, that company could only receive the boilers upon payment of all the charges due the carrier thereon by the Easton Machinery Company, i. e., from Utica to Wilmington, and the plaintiff was not entitled to demand the delivery of the boilers nor to subject them to the debt due it by its vendor until the payment of all the charges thereon due by the Easton Machinery Co. The judgment must be reversed and entered directing payment to the carrier of the sum deposited in court, $236.36, and the costs attending the controversy over said matter.

The carrier also excepted because the court adjudged that $267.80, the demurrage charges, war tax, etc., accruing between 23 September, 1919, when the boilers were attached, down to 23 October, 1919, when they were sold, should be paid to the carrier. The carrier was entitled to a lien for said charges and payment thereof out of the proceeds of the sale of the goods, the demurrage not having been caused by any default on its part.

A carrier cannot enforce collection of storage charges arising from its wrongful refusal to deliver goods to consignee, Hockfield v. R. R., 150 N. C., 419. Nor bold the goods for a lien for back freight on other goods. But the demurrage charges here were caused by the failure to pay the rightful charges due upon these identical goods, which were due by the consignor, who had shipped them to the order of itself as consignee, and the carrier could not be deprived of such lien by a delay to deliver caused by the controversy between the vendor and vendee, and the failure of the plaintiff to pay the rightful charges.

Reversed.