Story Case

The Detroit Express Company included among its customers the Detroit Tire company, for whom it made daily deliveries of freight to and from its plant. The express company sent in its bill on the first of each month for work done the previous month. Frequently goods were shipped to the tire company, express collect; in these cases, the Detroit Express Company paid the charges, and included the amounts in its statement on the first of each month. On July 30, 1915, at nine o'clock in the morning, the express company called at the New York Central freight station for a load of rubber belonging to the Detroit Tire Company, and valued at $400. At ten A. M. the same day, the treasurer of the express company learned the tire company was financially embarrassed, and could be put into the hands of a receiver. The treasurer immediately ordered the express company's superintendent to drive the truck load of rubber into its own warehouse. At the time, the tire company owed the express company $150 for work done and $140 for advancements made on express charges during the month of July. The express company refused to surrender the truck load of rubber until all these amounts were paid. Can it legally do this?

Ruling Court Case. Potts Vs. New York & New England Railroad Company, Volume 131, Massachusetts Reports, Page 455

Potts, a coal merchant, sold to a firm in Southbridge, Massachusetts, a large quantity of coal. He shipped 205 tons of it by a schooner to Norwich, Connecticut, to be carried from there by the New York and New England Company to consignees at Southbridge. The railroad company received the coal at Norwich; it paid the water freight to discharge the schooner's lien, amounting to $205, and transported the coal to Southbridge. It had delivered to the consignees all but 119 tons, when the consignees became insolvent. Potts gave notice to the company to stop the goods, and demanded their return.

The company refused to return the coal, and claimed a lien upon it for the entire amount of water freight on the whole cargo paid by it, and for the whole of its freight on the cargo, amounting in all to $513. Potts contended that the company had only a lien upon the remaining 119 tons, covering the cost of transporting that amount.

Mr. Chief Justice Gray said: "A carrier of goods consigned to one person under one contract has a lien upon the whole for the lawful freight and charges on every part, and a delivery of part of the goods to the consignee does not discharge or waive that lien upon the rest, without proof of an intention to do so, and when the consignor delivers goods to one carrier to be carried over his route, and thence over the route of another carrier, he makes the first carrier his forwarding agent, and the second carrier has a lien, not only for the freight over his own part of the route, but also for any freight on the goods paid by him to the first carrier." Judgment was held that the company was entitled to retain the coal until the $513 was paid.

Ruling Law. Story Case Answer

A carrier is entitled to retain possession of goods which have been transported by it as a security for the payment of the charges for its services. Such a right is called a lien. This right extends to a connecting carrier as well as to the first carrier. If the connecting carrier pays the first carrier the freight due upon the goods, and then transports the goods to their destination, the connecting carrier may hold all the goods, or any part thereof, for all the charges due for their transportation from the point of shipment.

It seems, however, that a carrier has merely a specific lien, and not a general lien. A general lien exists only with reference to the charges covering the goods which are at the time in the possession of the carrier; that is, the lien holder cannot hold the property for claims arising out of other transactions. This is like the lien of an innkeeper, who can hold his guest's baggage for charges covering the visit not yet concluded, but not for previous charges, unless there was an agreement to that effect.

This is different from the lien of the factor and wharfinger, who have a general lien for a general balance. The general lien was given because it was the custom for the factor and wharfinger to make advances to their customers. Since, in the Story Case, the express company has only a specific lien, it can hold the rubber only for the charges on that particular lot of goods, and none other. It must share with the other creditors with reference to the balance due.