
    Fieldings, Plaintiffs and Appellants, v. J. T. Mills, Respondent.
    1. When a mechanic, in the course of his business, makes repairs, upon an agreement to give credit for a stipulated time, he has no lien upon the article so repaired for the value of such repairs. If the person, for whom they are made, becomes insolvent, before the article, so repaired, goes out of the possession of the mechanic, the latter cannot assert a lien on account of such intervening insolvency.
    2. There .is a marked difference, in some respects, between the right of stoppage, in transitu, and that of a mechanic to detain. Insolvency alone creates the former. The common-law right of a mechanic to detain, arises and exists, as 'well, against a solvent as an insolvent employer. Neither the solvency nor the insolvency of the latter can be deemed an element in the creation of the right of lien which exists in favor of the mechanic.
    3. When a defendant, before answering, serves an offer that the plaintiffs may take judgment, for a sum named with costs, which offer is not accepted, and subsequently puts in an answer which not only controverts the amount due, upon the plaintiffs’ cause of action, but sets up a counter-claim, and the plaintiffs recover the precise sum offered and a judgment that the defendant is entitled to nothing upon his counter-claim, they recover a more favorable judgment than that offered, and' the. defendant is not entitled to costs, as a matter of right, from the time of such offer.
    (Before Bosworth & Woodruff, J. J.)
    Heard, Dec. 7th, 1857;
    decided Feb. 27th, 1858.
    to this action, George and Robert Fielding are the plaintiffs, and J. Doremus Mills and John -T. Mills are the defendants. It comes before the Court, at General Term, on an appeal by the plaintiffs from the judgment entered herein on the- report' of Stephen P. Nash, referee. - It was commenced in September, 1855. The "complaint states, in substance, First, that the plaintiffs are manufacturers of stages, under the firm ofFielding Brothers.” On the first of May, 1855, J. D. Mills sent to them six stages, or omnibuses—their licensed numbers being, 556, 557, '558, 559, 560 and 561—with orders to put them in complete repair, according to directions then given. ■ They received them, • and progressed diligently with the repairs, until the 11th of- June, 1855, when J. T. Mills - told them he had bought the stages, and to finish them; which they proceeded to do, until the 18th of June, 1855, when he told them he would not be accountable for further work or repairs, except upon the stage No. 561, which he ordered to be, and which they finished.
    
      Second. When told on the 11th of June, 1855, by John T., that he had bought the stages, the value of the repairs done, including work and materials, was $860—of that done after J. T. Mills "ordered the plaintiffs to proceed, was $324.88—making a total of $1184.38. ' . '
    
      Third. Since the 18th of June, 1855, plaintiffs demanded payment of the defendants of the $1184.38, which they neglect and refuse to pay.
    
      Fourth. The plaintiffs claim a lien on the stages for the whole amount, have offered to-give, them up on being paid, and have requested the defendants to take them and pay the bill.
    
      Fifth. The plaintiffs cannot render their lien effectual without the aid of, the Court, as one of equity. They ask a judgment that the defendants pay the $1184.38, with interest from the 18th of June, 1855, and costs, by a day to be named, or in default thereof, that the stages be sold, and the proceeds applied to pay the same.
    John T. Mills, before answering the complaint, served a written offer, dated the 22d of October, 1855, that judgment might be taken against him for $276.38, with interest from the 18th of June, 1855, and the costs of the action, on condition that the plaintiffs delivered the stages to him. The plaintiffs did not accept the offer.
    John T. Mills answered separately, by an answer, verified on the 19th of November, 1855, denying that he excepted stage No. 561, from any directions or declarations made on the 18th of June, 1855. The answer denies, that he ordered that finished; or that the repairs up to the 11th of June, were of the value of $860; or that the value of those done at his request was $324.38. It denies, that plaintiffs have any lien upon said stages, except for the value of the work done at his request. It then “ denies all the allegations of the complaint, which are inconsistent with this answer.” It then avers, that on the 11th day of June, 1855, J. T. and J. D. Mills called, together, on the plaintiffs, and told them J. T. Mills had bought the stages ; and the plaintiffs then agreed to look to J. D. Mills for the value of the work then done, and waived any lien they had therefor, and thereupon J. T. Mills requested them to go on with the repairs as then specified, and charge the future work to him.
    He never agreed to pay for the work done for J. D. Mills; and “ it was solely in consequence of plaintiffs agreeing to look to said J. D. Mills, for the value thereof,” that J. T. Mills ordered them to go on with the repairs; and otherwise, he would not have given said orders.
    A few days after that, plaintiffs told him they did not intend to keep said agreement, and should claim and enforce their lien; whereupon he absolutely ordered them to desist from further repairs, and informed them, he would not be responsible for future repairs, which orders and conversations, are the same as those mentioned in the complaint, but there inaccurately stated.
    Afterwards, and before suit brought, he applied to plaintiffs for their bill of work done at his request; offered to pay it, if they would give up the stages, and is now ready to do so. They neglected to furnish such a bill of to state its amount, and refused to accept his offer. It then states, by way of counter-claim, that, on the 11th of June, 1855, he was, and since has been, running a line of stages, and all the time needed those detained by the plaintiffs, and has suffered damage, by their refusal to keep their agreement or to give up the stages, to the amount of $15 per day; and for the amount of such damage asks judgment.
    It also asks judgment, that the complaint be dismissed and the stages be delivered to him, on his paying the value of the repairs done at his request, up to the time he ordered them to stop repairing—first deducting the damage to John T. Mills, by reason of their refusal to give up the stages; and if such damages exceed the value of such repairs, then a judgment against the plaintiffs, for the excess, with costs.
    The plaintiffs replied to the answer, putting at issue its allegations constituting a counter-claim.
    The action was referred to the referee, to hear and decide the whole issue therein. His report, exclusive of the title of the action and its recital, reads as follows, viz.:—
    “ That on or about the first day of May, 1855, the defendant, J. Doremus Mills sent to the factory of plaintiffs six stages, belonging to him, and employed them to put the same in repair, as particularly stated in the complaint; that plaintiffs received the said stages, and proceeded to repair the same, until the 11th day of June, 1855, when they were notified, by the defendants, that the said John T. Mills had purchased the said stages from the said J. Doremus Mills; that thereupon the said J. Doremus Milla directed the price of the work already done to be charged to Mm; and the said John T. Mills employed the plaintiffs to proceed with the work on said stages, which they did, until the 18th day of June, 1855, when the said John T. Mills directed the said work to be stopped; that the value of the work and repairs done on the said stages, prior to the sale of the same to the defendant John T. Mills, was eight hundred and sixty dollars; that the said work was done for J. Doremus Mills, upon a credit of four months; that the value of the work done, subsequent to the sale to the defendant John T. Mills, was $276.38, and said work was done without credit to be given therefor; that the plaintiffs did not, on the 11th of June, 1855, or at any other time after the sale of said stages by him, agree to look to J. Doremus Mills for the value of the repairs then done upon them, and waive any lien they might have had upon them; that on or about the first day of September, 1855, and before the commencement of this action, the defendant John T. Mills demanded the possession of said stages,.stating his readiness to pay the amount of such repairs as had been done at his request; that the plaintiffs claimed to retain the said stages, and declined to furnish said defendant with a bill of said last-mentioned repairs, distinct from the other repairs which had been put upon said stages; that on the said 11th day of June, 1855, when the plaintiffs were informed of the sale of said stages, said J. Doremus Mills was insolvent, and on that same day'made a general assignment for the benefit of his creditors, of which the plaintiffs were informed before the said 18th day of June, 1855, when the said work was stopped; that the plaintiffs have furnished standing-room and storage for the said stages, since the said work was stopped, and that the value of such storage, up to the date of this my report, is two hundred and eighty-eight dollars.
    “ And I further report, that I find and decide, as matter of law, that the plaintiffs had not, at the time this action was commenced, any lien upon the stages mentioned in the complaint, for the work and repairs done upon them for the defendant J. Doremus Mills, prior to the sale to the defendant J. T. Mills, although at the time of such sale, and before the completion of said work, the said J. Doremus Mills had became insolvent—such work having been done upon a credit of four months from its completion, to be given therefor.
    “ That the plaintiffs had a lien upon said stages, for the subsequent work done upon them, by direction of defendant John T. Mills.
    “ That the demand of said stages by said defendant, and his expressed readiness to pay for such work, was not a sufficient tender to discharge such lien, which, therefore, remained in full force when this action was commenced.
    “ That the plaintiffs are not entitled to recover in this action for the storage of said stages.
    “ That the defendant John T. Mills is not entitled in this action to recover any damages by way of counter-claim, as in his answer alleged.
    
      . That neither party in this action is entitled to costs, as against the other.
    
      “ And I, therefore, find and decide, that the plaintiffs are entitled ' to judgment in this action against the defendant John T. Mills, for the sum of $276.38, with interest from the 18th day of June, 1855, amounting, at the date of this my report, to $305.23; and that unless the said sum, with interest, be paid to the plaintiffs or their attorneys herein within fifteen days after the service of a copy of said judgment upon- the attorney of said J. T.-Mills herein, the said stages, or so many of them as may be sufficient for that purpose, be sold under the direction of this Court; and the proceeds applied to the payment of the amount so adjudged to the plaintiffs and the expenses of-such sale; and on the payment of said sum, so adjudged to the plaintiffs, and the expenses of such sale, if the said stages be sold, the said stages, or such of them as shall not be sold under the said judgment, and the surplus proceeds of such as may be sold, shall belong and be paid, or be delivered to the said John T. Mills.
    “All of which is respectfully submitted.
    “ Dated Hew York, Dec. 15th, 1856.
    “ S. P. Hash, Referee.”
    Judgment was entered, conforming to the report of the referee, except that it -awarded to John T. Mills his costs of the1 action, from the time of service of such offer, on the ground, as recited in the judgment, that the plaintiffs had “ failed to obtain a more favorable judgment” than that authorized by the offer. Under what circumstances, or by what authority this provision was inserted in the judgment, the appeal-papers did not disclose.
    The plaintiffs filed and served, in due time, the following exceptions to the decisions of the referee—
    
      “ Exception 1:—The counsel for the plaintiffs excepts to the said referee’s conclusion of fact, that-the work referred to was done for J. Doremus Mills, on a credit of four months.
    "■ ■“ Exception 2.—The said counsel for plaintiffs excepts- to the said referee’s conclusion of law, that the plaintiffs had not, at the time this action was commenced, any lien on the stages mentioned in the complaint, for the work and repairs done upon them for the defendant J. Doremus Mills, prior to the sale to the defendant John T. Mills, although at the time of such sale, and before the completion of said work, the said J. Doremus Mills had-become insolvent, such work having been done upon a credit of four months from its completion, to be given therefor.
    “ Exception 3.—The. said counsel for plaintiffs. excepts to said referee’s conclusion of law, that the plaintiffs are not entitled to recover in this action for the storage of said stages.
    “ Exception 4.—And the said counsel, in addition to the above exceptions to the said conclusion of fact and law, further excepts to so much of the judgment, entered in this action, by which it is declared that the defendant John T. Mills, before -answering, having served upon plaintiffs an offer in writing to allow judgment to be taken, as therein specified, with costs, and the plaintiffs not having accepted the same within ten days thereafter, or at all, and having failed to obtain a more favorable judgment, and by which it is adjudged that said defendant, John T. Mills, do recover of said plaintiffs eighty-seven dollars and nineteen cents for his costs, from the time of such offer,-said- costs having been-duly adjusted at such an amount.”
    
      James Humphrey, for appellants.
    I. Admitting that there was a distinct express agreement between the plaintiffs and J. Doremus Mills—that this specific work should be done on a credit of four months from its completion— the lien of the plaintiffs was not thereby defeated, the said J. D. Mills having become insolvent during the progress of the work. The insolvency of the employer-abrogates the contract for credit,- and thus the lien remains unimpaired. 1. As a general rule, insolvency destroys all contracts to give credit, even of the most express character. 2. This principle is most frequently applied to contracts for the sale of. goods: the vendor has a lien on the goods until payment, except when there is an agreement for a credit, which is inconsistent with the existence of a lien; but, where there is an express agreement for a credit, if the vendor becomes insolvent before delivery, the lien exists. (Tooke v. Hollingsworth, 5 T. R. 215;. Bloxam v. Sanders, 4 B. & C. 941; Bloxam v. Morley, id. 951; Cross Law of Lien, 328.) This rule is’even applied to cases where the insolvent vendor has made sub-sales, and been paid for them. (Dixon v. Yates, 5 B. & Adol. 313.) 3. The doctrine of stoppage, in transitu, is founded on the right of lien in the vendor, and illustrates the extent to 'Which the principle contended for is carried, for the protection of the honest dealer. (2 Kent’s Com. 5 ed. 540.) 4. There is no difference in principle between the case of a vendor of goods and that of a mechanic selling both his service and materials, or that of a manufacturer (as in this case) selling the money which he had paid to his workmen and his materials together. 5. The same rule has been applied in cases analogous to the present, wherever the question of intervening insolvency has been directly presented. (Stevenson v. Blakeloch, 1 Maule & S. 535, which is distinguished from Cowell v. Simpson, on this precise point; Abbot on Shipping, 299 ; Hutton v. Bragg, 2 Marshall, 339, per Gibbs, C. J.)
    II. . There was no express contract for credit in this case. At the commencement of the dealing between the parties, when Mills was in good credit, he was informed by plaintiffs “ that work done for him would be on four months’ credit; that they did not give any one longer time than that;” and, accordingly, when bills were rendered, notes were taken at four months. Nothing being said in this particular case, the contract for credit was implied from the former dealings. It must, therefore, be also implied, that the circumstances on which the former credit was based should remain the same. It was certainly implied that the dealer should not become insolvent. It cannot be presumed that a man ever agreed to give four months’ credit to a bankrupt. The rule contended for, in case of an express contract to give credit, applies, with still greater force of reason, when the agreement is only implied.
    III. Liens of this nature are in conformity with natural equity, and, as such, are favored in law. (McFarland v. Wheeler, 26 Wend. 480, per Verplanck, Senator; Grinnell v. Cook, 3 Hill, 491.)
    IV. The fourth exception to the judgment is well taken, and the defendant J. T. Mills was not entitled to costs.
    V- The plaintiffs should have judged for $1136.38, with interest from 18th June, 1855, and costs, with the same provisions for the sale of the property as are contained in the present judgment.
    
      
      J. M. Van Cott, for respondent.
    I. The referee correctly found, that the work done prior to the 11th of June, 1855, for which the plaintiffs asserted a lien, “ was done for J. Doremus Mills, on a credit of four months."
    II. Upon the facts found, the alleged lien did' not exist. 1. A contract for credit, is a contract to deliver without payment, and expressly negatives the right to detain till payment. 2. The plaintiffs’ assent, to the sale to John T. Mills, executed the agreement to deliver without payment, and repels the idea of a lien. 3. The plaintiffs having sued before the repairs were completed, are obliged to bring forward, and rely upon such sale to excuse the omission to complete the work. (Story on Bailments, §§ 229, 441.) 4. The stages being held to make repairs for John T. Mills, the plaintiffs were required, by their agreement, to deliver them on being paid for such repairs. 5. There is nothing, in the insolvency of the previous owner, to create a lien for work done for him on a credit prior to the transfer to the present owner. (2 Kent C., 635-8, and notes. Gilman v. Browne, 1 Mason’s R., 191; Chandler v. Belden, 18 J. R. 157; Pinney v. Wells, 10 Conn. R. 104; Crawshay v. Homfray, 4 Barn, and Ald. 50; Lucas v. Nockells, 4 Bing. 729; Alsager v. St. Katharine's Docks, 14 Mes. and Welsh. 794.)
    III. The plaintiffs were not entitled to storage. 1. Ho basis is laid for it in the complaint. 2. The plaintiffs were not storekeepers. There is no contract, express or implied, to pay storage. There was no request to detain—but the contrary. They could not store, any more than they could insure, at the cost of the owner, to keep good the security of a lien. (9 M. and Wels. 675.)
    IV. The evidence would well have justified a dismissal of the complaint, on the ground of the tender and the counter-claim. The judgment should be affirmed, with costs.
   By the Court. Bosworth, J.

The work done for J. D. Mills, was done on a credit of four months. He became insolvent before the work, which the plaintiffs undertook to do, was completed. The question presented by the appeal, in the present case, is this:—Have the plaintiffs a right to retain the stages until the amount, owing for the work done and materials applied in repairing them, is paid ?

It is clear that they have not, if they must abide by the terms of the contract, under which the labor was performed and the materials furnished were supplied.

They must abide by their contract, unless the insolvency of J. Doremus Mills, occurring before the delivery of the stages, puts an end to the agreement, and leaves all the parties to it in precisely the same position as if no agreement for credit had ever been made.

The right of a mechanic to detain the property of his employer until he is paid for the labor done, and materials used, in repairing it, grows out of the usages of trade.

It seems to be well settled, in respect to a common carrier, that no such right exists, when the transportation of the goods was undertaken, upon an agreement which fixes the time of payment of the freight to a day subsequent to that on which, by the terms of the agreement, they are to be delivered.

The fact, that the shipper becomes insolvent while the goods are in transit, or before they are delivered, does not absolve the carrier from his agreement as made, nor authorize him to detain the goods until the freight is paid. (Crawshay, et al., v. Homfray, et al., 4 Barn. & Ald. 47; Alsager v. St. Catharine's Docks, 14 Mee. & Welsb. 794; Pinney v. Wells, 10 Conn. 104; Chandler v. Belden, 18 J. R. 157.)

We can perceive no reason why the common-law right of lien, which exists in favor of the carrier, should not be regarded as favorably as any other that grows out of the usages of trade. If insolvency of the shipper, occurring before the delivery of the goods, will not authorize the carrier to detain them for freight, in a case in which he agreed to give credit for it, until a day subsequent to that on which the goods were contracted to be delivered, it is difficult to assign any reason, why a different rule should be applied in the case before us, in consequence of the insolvency of J. Doremus Mills.

There is a marked difference, in some respects, between the right of stoppage, in transitu, and that of a mechanic to detain. Insolvency alone creates the right to stop, in transitu. The common-law right of the mechanic to detain, arises as well against a solvent as an insolvent employer. Neither the solvency nor insolvency of the latter can be deemed an element in the creation of the right of lien, which exists in favor of the mechanic. No lien exists in favor of the latter, when his services are performed" upon an agreement, that payment for them is not to be made until after the article which they have improved is to be delivered.

It follows, if these views are correct, that the referee was right in holding that the plaintiffs had no lien upon the stages for the work and repairs done upon them for J. Doremus Mills.

We think he has no right to recover in this action for the storage of the stages. J. T. Mills demanded possession of them, and offered to pay for the work and repairs done upon them at his request.

The referee decided that neither party should recover costs as against the other. That decision, if erroneous, could only be corrected by the Court at General Term, on appeal from the judgment. The ground on which the judgment states costs were awarded to J. T. Mills is, that he served an offer before answer, under section 385 of the Code, which was not accepted, and the judgment recovered is no more favorable than that offered. This ground has no existence in fact. The answer set up.a counterclaim, which has been extinguished; and in addition to that, the plaintiffs recovered a judgment for the sum offered. This, of itself, is an answer to the claim of J. T. Mills, to recover costs from the time of the offer, as a matter of right. (Schneider v. Jacobi, 1 Duer, 694.)

The judgment must be so far modified, as to declare that neither party shall recover costs as against the other, and in all other respects it is affirmed without costs of the appeal to either party.  