Letts-Spencer Grocery Co. v. Missouri Pacific Railway Co.

JOHNSON, J. — Plaintiff sued defendant in the circuit court of Buchanan county for damages for the alleged wrongful conversion of certain goods, wares and merchandise. A jury was waived, the cause was submitted to the court on an agreed statement of facts, and judgment was rendered for plaintiff in the sum of $405.63, the value of the property. Defendant appealed. Plaintiff, a wholesale merchant at St. Joseph, sold the goods in question to the W. C. Ross Construction Company of Stockton, Kansas, and delivered them to defendant at St. Joseph for transportation to Stockton. They arrived at Stockton November 29, 1907, and were unloaded into defendant’s depot at that place. The Construction Company was insolvent at the time of the sale, but that fact was not known to plaintiff until December 9th. On November 29th, the day of the arrival of the goods at Stockton and while they were still in the possession of. defendant, a creditor of the Construction Company brought suit on a demand against that company before a justice of the peace at Stockton and caused a garnishment summons to be issued and served — 355 — on defendant. On December 9th, plaintiff notified defendant in writing of its purpose to exercise the right of stoppage in transitu, offered to pay defendant’s charges and demanded the goods. The demand was refused and this suit followed. The plaintiff in the garnishment suit in Kansas, recovered judgment against the Construction Company for $174.6.6 and costs. Defendant answered as garnishee, stating that it held the goods but that their vendor (plaintiff here) had exercised the right of stoppage in transitu. Notwithstanding this defense, the justice ordered defendant to deliver the goods to the constable on the payment by that- officer of the freight charges, amounting to $26.66. Compliance with this order being refused by defendant, the attachment plaintiff brought a statutory action against defendant in Rooks county, Kansas, based on the order. Defendant answered, claiming that the notice by the plaintiff in the present suit of the exercise of its right of stoppage in transitu excused defendant from obeying the order made by the justice. The issues thus raised were tried in the district court of Rooks county, a court of record of general jurisdiction, and submitted to the court, but at .the time of the present suit judgment had not been rendered in that action. Plaintiff was asked by defendant to intervene in, the Kansas suits but did not comply Avith the request and Avas not made a party to either suit. The statutes of Kansas and decisions of the Supreme Court of that State bearing on the issues before us were introduced in evidence. In support of its contention that the facts above stated compel a judguient in its favor, defendant argues that the effect of the service on defendant of the garnishment summons was to impound the property, to place it in the custody of the laAV, and to make defendant its custodian, subject to the orders of the Kansas court; therefore, that defendant was disabled by law from complying Avith the demand of plaintiff to return the — 356 — goods and being tbns disabled, cannot be held to have converted the property on account of having done that which the law compelled it to do. Oh the other hand, plaintiff argués that its right of stoppage in transitu gave it a lien on the goods for the purchase price, superior to any lien a creditor of the vendee could acquire by attachment or garnishment; that this lien and the right to enforce it were in force at the time of the gar-garnishment summons, since they would not be lost until actual delivery of the property to the vendee and, being thus in force, the right was not impaired by the garnishment of the carrier, but could be exercised and enforced against the carrier, regardless of an action brought to subject the property to the payment of the debts of the vendee to third persons. Pertinent provisions of the statutes of Kansas relating to garnishment proceedings in justice’s courts are as follows: “An order of attachment binds the property attached from the time of service, and the garnishee shall stand liable to the plaintiff in attachment for all property, moneys and credits in his hands, or due from him to the defendant, from the time he is served with the written notice mentioned in section thirty-seven.” [Section 5278, Gen. Stat. of Kansas (Dassler) 1901.] “A garnishee summons shall be issued and personally served, in the same manner as an ordinary summons and from the time of such service the garnishee shall stand liable to the plaintiff for all property, money and articles in his hands or due from him to the defendant.” [Section 5282, Gen. Stat. Kansas, 1901.] The effect of these statutes is to place in custodia legis the property of the defendant in a garnishment suit from the time of the service of notice on the garnishee. [Rood on Garnishments (1896 Ed.), sec. 194; Drake on Attachments (6th Ed.), sec. 251.] In legal effect, the property came under the control of the Kansas court as completely as would have been the case had — 357 — the officer of the court seized it under writ of attachment, the only difference being that in the latter case the constable would have held the property as legal custodian, while in the case in hand, the defendant, on the service of notice, ceased to hold it as a common carrier and, thereafter, held it as the court’s custodian. This brings us to the question of whether a vendor may enforce his right of stoppage in transitu before the goods have been actually delivered by the carrier to the vendee, but after they have been seized by an officer of the court under writ of attachment issued in a suit of a creditor of the vendee, or, what is practically the same thing, after they have been impounded by service on the carrier of a garnishment summons. “All authorities agree that the right of stoppage in transitu is nothing but an extension of the vendor’s lien on the goods for the payment of the purchase money.” [Schwabacher v. Kane, 13 Mo. App. 126.] “The transit is held to continue from the time the vendor parts with the possession until the purchaser acquires it; that is to say, from the time the vendor has so far made delivery that his right of retaining the goods and his right of lien . . . are gone, to the time when the goods have reached the actual possession of the buyer. .. . The stoppage in transitu is called into existence for the vendor’s benefit, after the buyer has acquired title and right of possession and even constructive possession, but not yet actual possession . . . and the insolvency of the purchaser is a sufficient justification for exercising the seller’s right, though the sale be unconditional and time be given to the purchaser. This right of stoppage is not precluded until the goods have actually reached the buyer, or under circumstances equivalent thereto.” [Estey v. Truxel, 25 Mo. App. 238.] The right is based on the equitable rule that one man’s property shall not be taken to pay another man’s debt. It arises from the discovery by the vendor during — 358 — the transitus of the insolvency of the vendee and the ordinary effect of its exercise is “to vest in each party to the contract of sale the rights he had before the possession of the goods sold was delivered to the carrier.” [Milling Co. v. Railway, 66 N. W. Rep. 1059.] “The unloading of the goods, and the placing of them in the warehouse of the railroad company, does not necessarily terminate the transitus nor put an end to the right of stoppage; so long as they remain in the hands of the carrier or middle-men as such, the right does not cease.” [Symns v. Schotten, 10 Pac. Rep. (Kan.), 828.] The application of these rules to the facts in hand compels the holding that at the time of the service of the garnishment summons on the- defendant, the right of stoppage was vested in plaintiff and could not be destroyed or impaired by any process issued at the suit of a creditor of the vendee. Further, we agree with plaintiff that “after a notice of stoppage has been given, the seller may enforce his right of possession thereupon accruing by intervention in the attachment proceeding, by interpleader to determine the rights of the parties, or by an appropriate action against the officer who levied the writ, or jointly against the creditor and the officer, or against the carrier or middleman who has refused on account of the attachment to redeliver the goods to the seller.’’ But, obviously, the remedy we have italicized, which is the one sought ,to be enforced in the present case, would not obtain if, at the time of the service on the carrier of notice to stop the goods, the carrier no longer holds them as a common carrier but has been transformed into an officer of the court and holds them as the custodian of the court. Plaintiff concedes in his brief that “if the officer actually seizes the goods and takes them out of the possession of the railroad company and into his own possession under the writ of attachment, or execution, then replevin must be brought — 359 — against the officer because such action must be brought against the person in possession.” So in the present case, when the notice of stoppage was served by plaintiff, the property passed out of the possession of the defendants as a carrier into the custody of the law. “After the seizure of the goods by the sheriff under the attachment, they were in the custody of the law and the defendant could not comply with the demand of plaintiffs without a breach of it, even admitting the goods to have been at the time in his actual possession.” [Stiles v. Davis, 66 U. S. 101.]’ Holding the goods as the receiver or officer of the court, as it did, how could defendant accede to the demand of plaintiff without violating its duty to the court? It was compelled by sovereign power to hold the goods subject to the orders of that power and its obedience to the command of sovereignty was its first duty. It was not guilty of the conversion of the goods for the simple reason that it exercised no control of its own over them, but, as we have seen, merely held them as the instrument of a higher power to which it owed obedience. The right that inured to plaintiff was not lost or impaired by the service of the garnishment on defendant, but the particular remedy now sought to be enforced was lost by the jurisdiction assumed by the Kansas courts over the res to which the lien attached. Defendant committed no wrong against any right of plaintiff and, consequently, cannot be held liable as a wrongdoer. The judgment is reversed. All concur.