Scottish Court of Session Decisions

I am therefore of opinion that the defenders were commercial agents, and entitled to retain for a general balance horses consigned to them.

Lord Young—I am of the same opinion. This summons concludes for a decree against the defenders for £42. I confess I always see with some pain an action in this Court for a sum so small. The expenses on each side will doubtless be as great. In this case the Lord Ordinary by his judgment has reduced the sum claimed. to £11, and the pursuer seems to be satisfied with his success to that extent, for he has not said a word against the interlocutor of the Lord Ordinary. But it was explained that there is a large principle in this case, in which the defenders as auctioneers are much interested. I have endeavoured during the argument to point out that there is no question here of general interest, everybody being at liberty to make what contracts he pleases, and it is with reference to that point only that I propose to make any observations, for I concur with your Lordships as to the law to be applied to this particular case.

Lien is just a contract of pledge collateral to another contract of which it is an incident. If the principal contract be about a horse—that it is to be fed and kept by one man for another,—to that contract there is the incident called lien—that is, an agreement that the person to whom the possession of the horse is committed shall have right to retain the possession till his claim for the food and attention given to the horse shall be satisfied. That is a special lien, and it stands like general lien, on which I shall say a word presently, upon contract, express or implied. The law always, in the absence of evidence of an agreement to the contrary, assumes that the owner of the horse shall not reclaim possession till he has satisfied the claim of the other party for what he has done under the contract.

There is also general lien, which is this, that a factor possessing goods, having that possession as a lawful contract, may retain that possession until the general balance due to him by the owner of the goods is satisfied. Such a lien may in any case be constituted by contract. It stands on contract. That contract may be expressed, or it may be implied from the course Of dealing of the parties, or from the usage of trade. Mr Smith spoke as if it were a dangerous thing to hold that such liens may be constituted by contract. But it is only the common law of freedom applying to all who are sui juris. If there be no fraud or force, or any such ground for setting aside what a freeman has done, a contract to give a general lien will hold good. The law of general lien, which does not differ in England and Scotland to any material degree, is most accurately stated by Mr Bell—(Comm. ii., p. 87 of M'Laren's ed.)—“General retention or lien is a right to withhold or detain the property of another in respect of any debt which happens to be due by the proprietor to the person who has the custody, or for a general balance of accounting arising on a particular term of employment. These rights are either founded on express agreement, or are raised by implication of law, which again may be from the understood and accustomed construction of particular contracts and connections, or from the usage of trade, or from the course of dealing between the parties.”

The late Mr Smith also (Mercantile Law, 561), after defining lien at common law, says—“Whenever one of any other kind is sought to be established, the claim to it is not deduced from principles of common law, but founded on the agreement of parties, either expressed or to be inferred from usage, and will fail if some such contract be not shown to have existed;” and again he says that the question whether a lien by express agreement has or has not been created “depends on the terms of each individual contract. Where the intention of the parties to create one is plain, there can be no doubt of their legal right to carry it into effect.” And again he says—“As to liens resulting from usage, these depend on implied, as those last mentioned upon express, contract.”

I make these observations, because for my part I will not have this question about £11 magnified into a question of importance. People can contract as to liens as they please, and these stable-keepers can refuse to take in horses except on such terms as they choose, and can, as shippers do, contract that there shall be a general lien over the goods entrusted to them for the balance owing to them at the time. The law of general lien for bygone freight stands on that.

In this case I am of opinion that the proof shows, that while reasonable advances were to be made by the auctioneers, the horses which might be in the stables were not to be removed by Neilleay without leave from the auctioneers. I therefore agree that there was a general lien, and concur in the judgment your Lordship has proposed.

Lord Craighill—I adhere to the findings, both in fact and in, law, which I pronounced when the case was before me in the Outer House, though it cannot be expected that I should do so without hesitation after hearing the views expressed by your Lordships. The facts of the case are—[ His Lordship here narrated the facts above set forth]. The defenders do not dispute that the horses were the property of the bankrupt, but they have claimed right of lien for (1) an advance of £20 made on the two horses referred to in this case, (2) for the keep of those horses, and (3) for a general balance due to them, which they said is secured by the possession of the horses. Only as to the last question has there been any controversy in the Inner House.

It appears to me that, as was said by Mr Jameson at an early stage of the argument, this is a controversy more of fact than of law, and therefore while I am not to be held as adopting all the views of the law which, your Lordships have expressed, I think we may not very greatly differ upon the legal questions involved. The defenders have maintained their right to a general lien on three grounds.

They have argued—“(1) That in reference to the transactions referred to in the case they were the factors of the bankrupt, that his goods came into their possession as factors, and that therefore they were entitled to factor's lien. (2) Their next ground was that of general usage of trade. (3) Lastly, they said the course of dealing between the parties was that there should be a right of retention of any horse or horses for the general balance which might be due at the time.”

As to the first ground, I am still of opinion that the facts of the case do not warrant the view that the horses came into the defenders' possession as factors for sale. They have stables, and keep horses. They call themselves in one of their pleas not only auctioneers but livery stable-keepers. If the horses were held by them in that capacity they are not factors. The second finding of this interlocutor is, that the horses were put into the defenders' stables to be kept there till it should be seen whether they should be sold by Neilleay, or whether Neilleay should give positive instructions that they be sold by the defenders. I think that is the result of the evidence. I know what Scott, the partner of the defenders' firm who was examined, and Neilleay say on this matter, but the documents seem to me to show that some horses were for positive and some for possible sale. That distinction appears on the face of these documents. The horses were sold by the defenders only if sales were not accomplished in the interim by Neilleay On 22d May five horses, including those in question, were put into the defenders' stables. Three were sold by them, not by Neilleay, and two stood unsold for weeks. What does that signify? Weekly and bi-weekly sales come and go, and these horses are not sold, because Neilleay had not made up his mind to give instructions for their positive sale, and until he did so the horses were kept at livery. If that be so, we do not require to consider whether an auctioneer is a factor or not. For my part, I would not commit myself to the opinion that an auctioneer is in all circumstances a factor, any more than I would say that in no circumstances can an auctioneer be called a factor. I am not sorry that it is unnecessary to give a definite opinion on that point. It is enough, I think, to hold that the defenders did not receive or bold the goods for sale in the sense that they must sell them.

On the second point it was hardly even contended that the usage of trade gives any such general lien as is claimed, and so there only remains the question

Third, Whether by the course of dealing between those parties there was conferred on the defenders a general right of retention?

Now, that which influences me in setting aside the account which Scott and Neilleay give of the course of dealing is that their depositions appear to me to be inconsistent with the documentary evidence in this case. That evidence, I think, discountenances the idea of such a course of dealing as is contended for. Sometimes a document recognises that a sum has been received by Neilleay on the security of a particular horse, and at another time it is not so at all. The fact of such special arrangements shows me that it could not be part of the contract of the parties that not only might an advance on a particular horse be matter of claim, but that any general balance should also be claimable. And so I think that the third ground of the defenders' contention is also untenable.