259 Md. 493

DARBY et al. v. THE BALTIMORE AND OHIO RAILROAD COMPANY et al.

[No. 85,

September Term, 1970.]

Decided November 11, 1970.

*494The cause was argued before Hammond, C. J., and Barnes, Finan, Singley and Digges, JJ.

Earl E. Manges and Thomas N. Berry for appellants.

Charles N. Marshall and David W. Byron, with whom were Daniel W. Moylan and Bushong, Byron, Moylan & Urner on the brief, for appellees.

Singley, J.,

delivered the opinion of the Court.

We have had occasion in the past to note the reluctance with which members of our bar have come to grips with the provisions of the Uniform Commercial Code (the U.C.C.), Maryland Code (1957, 1964 Repl. Vol.) Art. 95B, Wilke, Inc. v. Cummins Diesel Engines, Inc., 252 Md. 611, 250 A. 2d 886 (1969). In this case, we encounter •an antithetical situation in which a creditor, in its eagerness to have its claim for storage charges given preferential status, sought to enforce a lien which in our view was not available to it under the.U.C.C.

In 1967, the appellant Darby, who was engaged in the business of restoring privately-owned railroad cars, leased two sidings from one of the appellees, The Baltimore and *495Ohio Railroad Company (the Railroad) for the storage of private cars. One siding, known as the Antietam Siding, was 330 feet long; the other, the Danzer Metal Siding, was 365 feet long.1 Both were located in Hagerstown. The agreement respecting the Antietam Siding was dated 1 July 1967 and called for a rent of $1,000 per year, of which $330 was attributed to 330 lineal feet of siding and the balance to a 2,000 square foot freight shed adjacent to the siding. The Danzer Metal Siding was covered by an agreement dated 1 October 1967 and called for a rent of $365 per year, or $1.00 per lineal foot of track. Both agreements were virtually identical, and although called licensing agreements, were treated as leases by the parties. The agreements provided for termination by either party at any time on 30 days’ notice. Ultimately, Darby brought 20 cars to Hagerstown. Obviously, not all of the cars could be accommodated on 695 lineal feet of leased siding and while the record does not disclose where the cars were located, Darby testified that some of them were on sidings leased from owners other than the Railroad.

It is impossible from the scanty record before us to identify the genesis of the dispute with any certainty. Darby testified that the Danzer Metal Siding which he leased under the agreement of 1 October 1967 was not made available to him until 2 July 1968 and that the Railroad promised to up-date the lease, or make an adjustment in the rent, but never did so. On 22 September 1969 the Railroad gave Darby notice of the termination of both leases. Thereafter, according to Darby, the Railroad charged for storage of cars located on its tracks at the rate of $3.37 per car per day.

On 3 February 1970 the Railroad determined to sell the 20 cars at public sale to satisfy what it conceived to be its carrier’s lien for unpaid storage charges, and 19 of the cars were, in fact, sold at public auction on 24 February 1970.

*496On the morning of the day of sale Darby and the appellant, Custom Railroad Service, Inc., had sought by a petition filed in equity in the Circuit Court for Washington County against the Railroad and its counsel, as its agent, to enjoin the sale.2 An ex parte injunction was issued and then was vacated almost immediately, apparently because Darby had failed to post a bond called for by Maryland Rule BB75 a. By agreement of counsel, the proceeds of sale were held subject to the further order of court. The record does not reveal the amount realized by the sale of the cars, nor the identity of the purchasers.

About a month after the sale, the matter came on for hearing on petition and answer. From an order dismissing the petition, Darby and Custom Railroad Service, Inc., have appealed. After the appeal was taken, the Railroad moved to dismiss on the ground that since the sale had been held and the cars delivered to purchasers the case had become moot, relying on Woodson Apartments, Inc. v. Denick, 236 Md. 631, 204 A. 2d 564 (1964); Basiliko v. Welsh, 219 Md. 602, 150 A. 2d 220 (1959) and Bowles v. M. P. Moller, Inc., 163 Md. 670, 164 A. 665 (1933), which when read in conjunction with Maddox v. District Supply, Inc., 222 Md. 31, 158 A. 2d 650 (1960) are authority for the proposition that since only the posting of a supersedeas bond as provided by Rule 817 a will stay the ratification of a judicial sale to a purchaser, when no bond is posted the court has lost jurisdiction over the res, and the appeal will be dismissed for mootness under Rule 835 b (8). This is a rule applicable to judicial sales, and we know of no reason why it should be extended to a non-judicial sale made by the Railroad under a right which it conceived to have by statute, Ridgely v. Iglehart, 3 Bland 540, 548; Athens Electric Supply Co. v. Delta Oil, Inc., 101 Ga. App. 515, 114 S.E.2d 289 (1960); Finkel v. Kushner, 183 Misc. 64, 48 N.Y.S.2d 717, aff’d 268 App. Div. 912, 51 N.Y.S.2d 756 (1944); compare Durst v. Durst, 225 Md. 175, 169 A. 2d 755 (1961). For this rea*497son we shall deny the motion to dismiss, and consider the effect of the notice hereafter.

The narrow question posed by this appeal is whether the Railroad had a carrier’s lien under U.C.C. § 7-307 which it could enforce under § 7-308.3 The Official Com*498ment to these sections points out that in giving the car.rier a lien for storage, preservation of the goods, demur-.rage and terminal charges, the U.C.C. has extended to a carrier a specific lien for charges and expenses similar to that formerly given warehousemen under §§ 27 through 32 of the Uniform Warehouse Receipts Act.4 See 1 Hawkland, A Transactional Guide to The Uniform Commercial Code § 1.690103 (1964) at 326-29; 2 Anderson’s Uniform Commercial Code (1961) at 275 if.

As we see it, however, two conditions must be met if .the carrier is to claim a lien under the U.C.C. First, the lien attaches only to “goods covered by a bill of lading,” •§ 7-307 (1). Second, the lien may be lost on goods voluntarily delivered by the carrier, § 7-307 (3). “The validity of the carrier’s specific lien is dependent on continuous possession. If the carrier voluntarily gives up possession of the goods, the lien is lost.” Hawkland, supra, at 328.

There is no evidence before us indicating that the pri*499vately owned railroad cars were shipped to Hagerstown under bills of lading. Assuming, for purposes of this opinion, that they were—and at argument, the parties seemed to concede this—and assuming without deciding that private cars are “goods” within the contemplation of § 7-307 (1), it would seem that the bills of lading must have been cancelled when the Railroad delivered the cars to Darby, and would not have come into being again until Darby reconsigned the cars to the carrier.

Moreover, when Darby took possession of the cars, the Railroad lost its lien on the “goods which [it] voluntarily deliver [ed],” § 7-307 (3). On direct examination, Darby testified:

“The cars were placed in our possession for the purpose of doing work or to hold into inventory until work could be done on them at a time which is convenient to either the customer and us * * *. The cars would be worked on as the orders demanded it or as the need for the car arose * *

Consequently, once the Railroad delivered the cars to Darby, it would appear that it lost any lien under § 7-307 which was subject to enforcement under § 7-308. Even if we assume that the requirements of § 7-308 were meticulously observed, the sale amounted to a conversion, Saunders v. Mullinix, 195 Md. 235, 72 A. 2d 720 (1949); Gelb v. Zimet Bros., Inc., 34 Misc. 2d 401, 228 N.Y.S.2d 111 (1962); Pennsylvania Railroad Co. v. Gentile Bros. Co., 47 Ohio App. 162, 191 N. E. 369 (1934), and should have been enjoined, and once held, should be invalidated. This result makes unnecessary a consideration of Darby’s contention that the trial court erred in its rulings on the admission of evidence and testimony.

In support of its motion to dismiss, the Railroad says that substantially all of the cars have been sold and delivered and that we are without power to interfere. Darby’s rejoinder is that at time of sale, all persons were notified that the sale was being made subject to the further *500orders of the Circuit Court for Washington County, so that the thrust of his appeal is not focused solely on the sale proceeds but on the validity of the sale itself. It must be remembered that the only testimony below was Darby’s, and that this was uncontroverted. The record before us does not disclose what the total amount of the storage charges was, to which cars storage charges were applicable, where the cars were located, who owned the cars, what announcement was made at the sale, who purchased the cars at the sale, at what price they were sold, or where the cars now are.

We intend to do no violence to the rule that courts should issue no order which would be nugatory, Eberts v. Congressional Country Club, Inc., 197 Md. 461, 464, 79 A. 2d 518 (1951) but the extent of the court’s power, in this case, hinges on facts which are not before us. There are crucial evidential questions which will have to be determined by the circuit court on remand. The Railroad will then have an opportunity to show, if it can, that the cars were covered by bills of lading, or had not been delivered to Darby. Whether the court has the jurisdiction necessary for it to require a return of the cars will be for it to decide. If it does not have the power to order a return of the cars, either Darby, Custom Railroad Service, Inc., or the owners of the cars may be entitled to the proceeds of sale. Whether or not it has the power to require the return of the cars, one or more of the persons entitled may be able to hold the Railroad answerable in damages at law.

Motion to dismiss appeal denied; order dismissing petition reversed, and case remanded for further proceedings conformable with this opinion. Costs on appeal and below to be paid by appellee, The Baltimore and Ohio Railroad Company.

Darby v. Baltimore & Ohio Railroad
259 Md. 493

Case Details

Name
Darby v. Baltimore & Ohio Railroad
Decision Date
Nov 11, 1970
Citations

259 Md. 493

Jurisdiction
Maryland

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