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397. Interception by Sole Act of Buyer. - While mutual assent of the carrier and consignee is necessary to attornment,' it is not indispensable to such possession by the consignee as will terminate the seller's right of stoppage. If the consignee tenders performance of his obligations, and rightfully demands the goods, the wrongful refusal of the carrier to deliver them will not operate to keep them in transit. Indeed, it is settled in England that if the consignee obtains actual possession of the goods, even by a forcible or a fraudulent interception, and before they have reached their final destination, the transit is at an end. Such taking, it is said, if not assented to by the carrier, "may be a wrong to him for which he would have a right of action," but it ends the transit. In this country there is judicial authority for the view that the buyer cannot destroy the seller's right of stoppage, by fraudulently intercepting them during their transit to their original destination; and if the interception is resorted to for the sole purpose of preventing the seller's exercise of this right it is fraudulent." Opposed to this holding is the Uniform Sales Act.6

398. Interception by Creditors of Buyer. - The unpaid seller's right of stoppage in transitu is not affected by a seizure of the goods during their transit, under legal process on behalf of the buyer's creditors. They could obtain no better right to the goods than the buyer had, and his title, at the moment of seizure, was subject to the seller's right to stop the goods. This right is not simply a lien,' but a property right in the 1 James v. Griffin, 2 M. & W. 623 (1837); cf. Guilford v. Smith, 30 Vt. 49 (1858).

2 Bird v. Brown, 4 Ex. 786, 797 (1850).

Sale of Goods Act, § 45 (2).

♦ Whitehead v. Anderson, 9 M. & W. 518, 534 (1842).

5 Poole v. The H. Ry., 58 Tex. 134 (1882).

• Section 58 (2), (a) is as follows: "Goods are no longer in transit. . . If the buyer, or his agent in that behalf, obtains delivery of the goods before their arrival at the appointed destination."

7 Smith v. Goss, 1 Camp. 282 (1808). Lord Ellenborough is reported as saying in his charge to the jury, "The vendor's power of intercepting the goods was the elder and preferable lien," but see the authorities in the next three notes, and Inslee v. Lane, 57 N. H. 454, 458 (1876). "The essential ground of the right of lien is possession; that of stoppage in transitu is non-delivery to the vendee."

goods, and it cannot be devested by attachment or execution.1 Such "process does not proceed on the ground of defeating a prior right in a third person, but on the ground of acquiring such interest in the property attached as the debtor had himself. If the levy of an execution, or the service of an attachment against the vendee, were allowed to defeat the claim of the vendor, the right of stoppage in transitu would be of little value; for judgments and attachments not infrequently furnish the first public evidence of the insolvency of a trader." Nor will the vendor's right be destroyed, though the officer levying the process take the goods to the vendee's place of business.3

399. Interception by Transferee of Buyer. A sale of the goods by the purchaser, during their transit, does not devest the original seller's right of stoppage, although the second purchaser may be ignorant of the first seller's right, and may pay full value for the goods. The original purchaser can pass no better title than he had, and this is subject to the seller's property interest known as the right of stoppage in transitu.5 But this right may be waived, and if the original seller assents to the resale, the second purchaser may obtain a perfect title."

The evidence of such assent, however, must be something more than a failure to express dissent upon receiving information that a sub-sale has been made. It must show a voluntary abandonment of the original seller's right, or it must disclose conduct on his part which fairly induced the second buyer to change his position for the worse. For example, an unpaid

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1 Wood v. Yeatman, 15 B. Mon. (Ky.) 270, 279 (1854).

2 Buckley v. Furniss, 15 Wend. 137, 144 (1836).

Sherman v. Rugee, 55 Wis. 346 (1882).

4 Craven v. Ryder, 6 Taunt. 433 (1816); Pattison v. Culton, 33 Ind. 240 (1870).

tence.

Holbrook v. Vose, 6 Bosworth (N. Y.), 76, 107 (1860).

Such is the rule laid down in The Uniform Sales Act, § 62, first sen

7 Robinson v. Morgan, 65 Vt. 37; 25 At. 899 (1893).

Stoveld v. Hughes, 14 East, 308, 317 (1811), opinion of Bayly, J. "It is the law of England, and I think of Scotland also, that if a seller has received intimation of a sub-sale, and has assented thereto, that deprives him of all right to retain as against the original purchaser;" Lord Young in Fleming v. Smith, 8 Sess. Cas. (4th series) at p. 552 (1881).

• Merchant Banking Co. v. Phoenix Co., 5 Ch. D. 205 (1875).

vendor who shows the goods to one negotiating for their purchase from the first vendee, as the property of the latter, without any intimation that he has any claim upon them as vendor, is estopped from setting up such claim against the bona fide second purchaser.1 On the other hand, the failure of the vendor to give notice of his claim to one negotiating with the first vendee for a repurchase, or even the delivery of a portion of the goods to the second purchaser upon an order from the first buyer, will not affect the original vendor's right against the goods not delivered. It is undoubtedly true, however, that

in case of "a sub-sale, with the privity of the original vendor, the abandonment by the latter of his lien in favor of the subvendee will be presumed more easily than it would have been in regard to the first vendee." 3

400. Transferee of Bill of Lading. If the seller delivers to the buyer a bill of lading of the goods, he enables the latter to bestow upon a transferee a better title than the buyer had.1 By this document he authorizes the carrier to deliver the goods either to the buyer or his assigns; and, as the document is by the law merchant quasi negotiable, and as its delivery to a purchaser is the legal equivalent of the actual delivery of the goods, a sub-purchaser of an interest in the goods, who receives from the original buyer a transfer of the bill of lading, is in a position to say that the original seller has assented in advance to such sub-sale, and to the transfer of the legal possession of the goods. Accordingly, "it has always since Lickbarrow v. Mason 7 been considered as settled law that a bona fide purchaser of an interest in goods by taking an assignment of a bill of lading in furtherance of that purchase renders his

1 Hunn v. Bowne, 2 Caines (N. Y.), 38 (1804). See dissenting opinion of Kent, J., 44, 45.

2 Hamburger v. Rodman, 9 Daly (N. Y.), 93 (1880).

Campbell on Sales (2d ed.), 303.

4 Sale of Goods Act, § 47. The Uniform Sales Act, § 62, last sentence. The Uniform Bill of Lading Act attempts to make it fully negotiable. Supra, ¶ 302.

• Patten v. Thompson, 5 M. & S. 350 (1816). Its delivery to the first buyer, or by him to his factor, is not equivalent to a delivery of possession of the goods. See Blackburn on Sales (2d ed.), 402, 403.

7 5 D. & E. 683, and 6 East, 21 n. (1793).

interest indefeasible by the consignor's stoppage in transitu." 1 In jurisdictions where delivery orders, warehouse receipts, or like instruments are treated as documents of title, the right of stoppage in transitu may be cut off by their transfer in furtherance of a purchase from the original buyer.2

401. Bill of Lading must be transferred for Value. — It will be observed that not every transfer of a bill of lading defeats the right of stoppage in transitu. In order to have that effect, it must be made for value to a bona fide purchaser. An assignee of the buyer for the benefit of creditors pays no value for the transfer of a bill of lading from his assignor, and consequently cannot take the goods freed from the original seller's right of stoppage, even though both assignor and assignee believed that the original seller had been fully paid. In England and in many American jurisdictions an antecedent debt is considered to constitute value; but many courts have held that one who has received a bill of lading as collateral security only for an old debt is not a purchaser for value within the rule now under consideration.5

402. Bill of Lading must be transferred in Good Faith. - The transferee of a bill of lading must not only be a purchaser for value, in order to hold the goods freed from the seller's right of stoppage, but his purchase must have been made in good faith. If he buys with knowledge that the first purchaser is insolvent, and that the transfer will result in diverting the goods or their proceeds from the unpaid seller to other creditors of the purchaser, and especially if he interpose, "in order to assist the buyer to disappoint the just rights and expectations of the seller," he will not be treated as a bona fide purchaser. On the other hand, his knowledge that the goods have not been paid for will not prevent his taking a transfer of the bill of lading in good faith. Such a circumstance does not indicate that the

1 Blackburn on Sales (2d ed.), 398.

2 Sale of Goods Act, § 47.

Stanton v. Eager, 16 Pick. 467 (1835).

Leask v. Scott, 2 Q. B. D. 376 (1877); Lee v. Kimball, 45 Me. 172 (1858).

5 Lesassier v. The Southwestern, 2 Woods (U. S. Cir. Ct.), 35 (1874); Loeb v. Peters, 63 Ala. 243 (1879); Burdick's Cases on Sales, 591.

bill is not fairly and honestly assignable. Nor does the simple fact that the bill of lading, which the original vendee offers for sale, is marked "duplicate," render the assignee thereof a transferee in bad faith.2

403. If, however, the "original" bill has been sent to the purchaser, attached to a draft for the purchase price, so that title has been reserved in the seller, the transmission to the purchaser of the "duplicate" bill will not operate to pass title to him. A transferee of the "duplicate" bill from such a purchaser, it has been held, is bound to inquire "what disposition has been made of the original bill of lading;" and if he takes it without inquiry, he takes it subject to all the defects which that inquiry would have disclosed.3

404. When Bill of Lading is transferred as Security. — But a bill of lading may be transferred by the first purchaser, not pursuant to an absolute sale of the goods to a second purchaser, but to a third person by way of a mortgage or pledge. In such a case, if the transferee is a holder of the bill for value and in good faith, the original seller will not be able to take the goods out of his hands. By the transfer of the bill of lading the legal property in the goods, as well as the right to their possession, has been vested in the third person. It does not follow from this, however, that the seller's right of stoppage has been totally defeated. The transfer having been made as a mortgage or as a pledge, and not as a sale, to the third person, whatever interest in the goods remains in the first purchaser is still available to the unpaid vendor. Upon due notice of stoppage, he will "be considered as having resumed his former interest in the goods, subject to that pledge or mortgage.'

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In order to enforce his right, however, he must proceed in

1 Cuming v. Brown, 9 East, 506, 514, 516 (1808); Loeb v. Peters, supra; Chandler v. Fulton, 10 Tex. 2 (1853); Rosenthal v. Dessau, 11 Hun (N. Y.), 49 (1877).

2 Missouri Ry. v. Heidenheimer, 82 Tex. 195; 17 S. W. 608; 23 Am. St. R. 861 (1891).

Castanola v. Missouri Ry., 24 Fed. 267 (1885), and note by Adelbert Hamilton.

4 Matter of Westzinthus, 5 B. & Ad. 817; 2 N. & M. 644; 3 L. J. K. B. 56 (1833).

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