Chicago & Northwestern Railway Co. v. Alvin R. Durham Co.

Background

A Chicago & Northwestern Railway received an interstate boxcar of apples consigned to notify F. M. Larson and placed it on a public team track used for unloading. Larson surrendered the bill of lading, paid the freight charges, signed a receipt, and began unloading at 8:20 a.m., removing about one-quarter of the apples. At 9:45 a.m. the Alvin R. Durham Company served a garnishment writ on the railway. The railway did not stop unloading, which finished four days later; Larson locked the car each night and the railway shifted the car for its own convenience. The Michigan Supreme Court held the railway liable under its interpretation of §5 of the uniform bill of lading.

Reasoning

The Court framed the sole question as whether the railway was liable as garnishee to the creditor. It explained that the earlier Mark Owen decision addressed a different issue — a consignee’s contract claim under the federal bill of lading — and did not resolve a stranger’s garnishment claim. The Court held that the uniform bill of lading neither creates nor bars the right to garnishment and that liability under garnishment arises from state statutes, procedure, and policy. Because the Michigan court treated the federal rule as fixing garnishment liability, the Supreme Court found that conclusion erroneous and reversed.

Real world impact

The decision leaves questions about reaching freight by garnishment to state law and local practice. Whether a carrier must answer to a creditor by garnishment will depend on state statutes, court decisions, and public policy. The case was reversed and remanded for further proceedings consistent with this opinion; it does not resolve the carrier’s separate federal contractual liability to the consignee under the bill of lading.