that is, its actual market value, and it is asserted that this in effect as fully protects the seller as though he were permitted to recover the price, as if a peculiarly manufactured article is of little value to any one but the buyer, the less it is worth to sell on the market, the more the seller recovers, and if it is worth nothing at all he then recovers as damages the full price.17

388. Manufacture or Production Stopped by Buyer.-As is heretofore shown the buyer of goods to be manufactured by the seller may order further work to be suspended subject to liability in damages for breach of the contract, 18 and where the breach by the buyer is the countermand of an order for goods to be manufactured or some similar act which justifies the seller in suspending the further manufacture, the measure of damages will be, in case nothing has been done towards special preparation for their manufacture or production, the difference between the cost of manufacture or production and the price to be paid.19 And this is especially true where the article or commodity to be manufactured is not generally kept on hand and has no market value in the ordinary sense, being as a rule manufactured specially to order.20 This rule should be subject to the qualification that a reasonable deduction is to be made for the less amount of time required by the manufacturer, his employees, and factory, and for the release from trouble, risk, and responsibility attendant on a full execution of the contract on his part.1 And for this purpose it has been held that the fact that the manufacturer, by reason of the cancellation of the contract by the buyer, is permitted to utilize his factory

17. Dwiggins v. Clark, 94 Ind. 49, Gardner v. Deeds, 116 Tenn. 128, 92 48 Am. Dec. 140. S. W. 518, 7 Ann. Cas. 1172, 4 L.R.A. (N.S.) 740; Worrell v. Kinnear Mfg.

Note: 4 L.R.A.(N.S.) 741.

As to when an action for the price Co., 103 Va. 719, 49 S. E. 988, 2 Ann. will lie, see supra, par. 357.

18. See supra, par. 235.

19. United States v. Speed, 8 Wall. 77, 19 U. S. (L. ed.) 449; Hinckley v. Pittsburgh Bessemer Steel Co., 121 U. S. 264, 7 S. Ct. 875, 30 U. S. (L. ed.) 967; Roehm v. Horst, 178 U. S. 21, 20 S. Ct. 780, 44 U. S. (L. ed.) 961; Louisville, etc., R. Co. v. Coyle, 123 Ky. 854, 97 S. W. 772, 99 S. W. 237, 124 A. S. R. 384, 8 L.R.A. (N.S.) 433; Masterton v. Brooklyn, 7 Hill (N. Y.) 61, 42 Am. Dec. 38; Todd v. Gamble, 148 N. Y. 382, 42 N. E. 982, 52 L.R.A. 225; Oswego Falls Pulp, etc., Co. v. Stecher Lith. Co., 215 N. Y. 98, 109 N. E. 92, L.R.A.1916B 1257; Ridgway Dynamo, etc., Co. v. Pennsylvania Cement Co., 221 Pa. St. 160, 70 Atl. 557, 18 L.R.A. (N.S.) 613;

Cas. 997; Cameron v. White, 74 Wis. 425, 43 N. W. 155, 5 L.R.A. 493.

Notes: 94 A. S. R. 122; 52 L.R.A. 254; 57 L.R.A. 204; 4 L.R.A. (N.S.) 742; 18 L.R.A. (N.S.) 614; 7 Ann. Cas. 1176; Ann. Cas. 1913C 766.

20. Todd v. Gamble, 148 N. Y. 382, 42 N. E. 982, 52 L.R.A. 225.

1. United States v. Speed, 8 Wall. 77, 17 U. S. (L. ed.) 449; Masterton v. Brooklyn, 7 Hill (N. Y.) 73, 42 Am. Dec. 38; Worrell v. Kinnear Mfg. Co., 103 Va. 719, 49 S. E. 988, 2 Ann. Cas. 997. See also Louisville, etc., R. Co. v. Coyle, 123 Ky. 854, 97 S. W. 772, 99 S. W. 237, 124 A. S. R. 384, 8 L.R.A. (N.S.) 433.

Notes: 4 L.R.A.(N.S.) 742; 7 Ann. Cas. 1176.

for other and ordinary business is to be taken into consideration.2 This, however, does not make the difference in the profit that would have accrued from performance of the contract and what the manufacturing plant earned in other work during the time it would have required to perform the contract the measure of damages; and it has been held that the fact that after the breach by the buyer, the seller used materials purchased in manufacturing other products which he sold at a profit would not entitle the buyer to have such profits deducted from the amount of profits the seller would have made from the carrying out of the contract in question. If the contract confers on the buyer the right to select between alternate manners in which the contract may be performed and he countermands the entire contract, the seller is only entitled to recover the amount of profits which he would have made if the contract had been performed in the manner which would have given him the lowest sum as profits. If in preparation for manufacture the seller has made outlays in materials, etc., he is also entitled to recover the difference between the value of such materials, etc., for other purposes and what he has expended thereon; otherwise he would not be compensated for his actual loss." Loss, however, resulting to the seller on account of collateral contracts entered into by him on the faith of the contract of sale cannot, it seems, be recovered. In estimating the cost of manufacture of particular articles, such as special building materials, speculative opinions are not to be taken, but the cost is to be ascertained from practical men of experience in the business in question, with due regard to the risks and contingencies incident to such manufacture. In computing the cost of a manufacture, there should be taken into consideration the essential element of "fixed" or "overhead" charges, by which is meant the general running expenses which attach to every business." When the manufacturer has expended labor on his own materials, he cannot on the countermand of the order by the buyer recover the reasonable alue of such labor, as having been rendered to the buyer, in an action for labor performed or services rendered.10

389. Interest.-The authorities are not in entire accord on the question whether the seller is entitled to interest on the difference vetween the market value at the time and place of delivery and the

2. Note: 4 L.R.A. (N.S.) 743.

3. Oswego Falls Pulp, etc., Co. v. Stecher Lith. Co., 215 N. Y. 98, 109 N. E. 92, L.R.A.1916B 1257.

4. Cameron v. White, 74 Wis. 425, 13 N. W. 155, 5 L.R.A. 493.

5. Note: 4 L.R.A. (N.S.) 742.

7. Masterton v. Brooklyn, 7 Hill (N. Y.) 61, 42 Am. Dec. 38.

Note: 94 A. S. R. 122. 8. Masterton v. Brooklyn, 7 Hill (N. Y.) 61, 42 Am. Dec. 38.

9. Worrell v. Kinnear Mfg. Co., 103 Va. 719, 49 S. E. 988, 2 Ann. Cas.

6. Chicago v. Green, 9 Wall. 726, 19 997. J. S. (L. ed.) 769.

Note: 94 A. S. R. 122.

10. Hosmer v. Wilson, 7 Mich. 294, 74 Am. Dec. 716.

agreed price.11 Ordinarily it would seem that as the damages are necessarily unliquidated, interest on the difference in values would not be recoverable as a matter of right, and the cases in laying down the general measure of damages are as a rule silent on the question of interest as an element of the damages, and in some cases where the question was directly involved the right to interest has been denied.12 The broad view has been taken, however, that the seller is entitled to recover interest from the time of the breach as compensation for delay in payment of the damages arising from the default of the buyer; 18 and where the subject matter of the sale had at the time and place of delivery a readily ascertainable value, so that the difference in values was easily determined, the seller has in a number of cases been held entitled to interest as a matter of right,14 though it would be otherwise where the market value at such time and place was not easily ascertainable. 15

390. Determination of Market Value.-Ordinarily the market value of the subject matter of the sale for the purpose of estimating the seller's damages is to be estimated as of the time and place of delivery because at that time and place the seller may put the goods on the market and obtain the market price,16 and in case the commodity sold was deliverable in instalments the measure of damages is held to be the aggregate of the differences between the market price and the contract price of the respective instalments at the time they were deliverable.17 By the same reasoning, where the exact time for delivery is to be afterward fixed by the buyer, the measure of damages is the difference between the contract price and the market value at the date of the refusal to receive; for such refusal necessarily implies a refusal to fix a time, and there is then a complete breach of the

12. Evans v. Moseley, 84 Kan. 322, 114 Pac. 374, 50 L.R.A. (N.S.) 889.

11. As to when interest is recover- v. Platt, 69 N. Y. 348, 25 Am. Rep. able on unliquidated claims, see gen- 203; Todd v. Gamble, 148 N. Y. 382, erally, INTEREST, vol. 8, p. 533. See 42 N. E. 982, 52 L.R.A. 225; Hugue also 28 L.R.A. (N.S.) 1 et seq. note. not Mills v. Jempson, 68 S. C. 363, 47 S. E. 687, 102 A. S. R. 673; Alpha Portland Cement Co. v. Oliver, 125 Tenn. 135, 140 S. W. 595, Ann. Cas. 1913C 120, 38 L.R.A. (N.S.) 416; Cameron v. White, 74 Wis. 425, 43 N. W. 155, 5 L.R.A. 493; Lincoln v. Charles Alshuler Mfg. Co., 142 Wis. 475, 125 N. W. 908, 28 L.R.A. (N.S.) 780.

Note: 28 L.R.A. (N.S.) 49.

13. Murray v. Doud, 167 Ill. 368, 47 N. E. 717, 59 A. S. R. 297.

14. Note: 28 L.R.A. (N.S.) 48. As to the right of the buyer to interest on the difference between the agreed price and the market value at the time and place of delivery, see supra, par. 339. 15. Note: 28 L.R.A.(N.S.) 48. 16. Kadish v. Young, 108 Ill. 170, 48 Am. Rep. 548; Bell v. Hatfield, 121 Ky. 560, 89 S. W. 544, 2 L.R.A. (N.S.) 529; Masterton v. Brooklyn, 7 Hill (N. Y.) 61, 42 Am. Dec. 38; Cahen

Notes: 42 Am. Dec. 50; 52 L.R.A.

246.

17. Alpha Portland Cement Co. v. Oliver, 125 Tenn. 135, 140 S. W. 595. Ann. Cas. 1913C 120, 38 L.R.A (N. S.) 416.

contract.18 If the seller retains the goods sold as his own after the date of delivery fixed on, and afterwards sells the goods for less than they were worth at the time fixed for the delivery, he cannot charge such loss to the defaulting buyer in an action for damages for breach of the contract.19 If there is no general market for the commodity at the place of sale the value may be determined by the market value at some other place just to both parties; 20 and though there may be in a sense a local market at the place of delivery, yet where that market is governed by a more general market at another place, evidence of the market value at such other place may be considered in determining the market value at the place of delivery.1 Where the character of the commodity or article sold is such that there is no general market for it at or near the place of delivery, or where there is no general purchaser for the same except the buyer, it is necessary that some other criterion be taken than the difference between the agreed price and the general market value, and in such a case it has been held that the seller is entitled to recover the difference between the agreed price and the price at which he is compelled to resell. It has been held that the market value is not to be fixed according to sudden or transient inflations and depressions in prices, but according to the range of the entire market. An effort has been made in many cases by the buyer to relieve himself from the contract of sale before the time fixed for performance by giving notice that he would not be ready to complete the agreement, and in these cases it has been insisted that the damages. should be estimated as at the time of giving notice; but the courts have justly denied the right of either party to rescind the agreement, and have adhered to the day of the breach as the period for estimating damages.⭑

XIII. LIEN OF SELLER AND RIGHT OF STOPPAGE IN TRANSITU

Lien

391. Nature of Lien.-The existence of a seller's lien always presupposes that the title to the goods has passed to the buyer, since it would be an incongruous conception that a person might have a lien

18. Huguenot Mills v. Jempson, 68 S. C. 363, 47 S. E. 687, 102 A. S. R. 673.

19. Cameron v. White, 74 Wis. 425, 43 N. W. 155, 5 L.R.A. 493. As to the right of the seller to resell on account of the buyer, see supra, par. 376

et seq.

20. Lincoln v. Charles Alshuler Mfg. Co., 142 Wis. 475, 125 N. W. 908, 28

L.R.A. (N.S.) 780.

Note: 57 L.R.A. 205.

1. Evans v. Moseley, 84 Kan. 322, 114 Pac. 374, 50 L.R.A. (N.S.) 889.

2. Louisville, etc., R. Co. v. Coyle, 123 Ky. 854, 97 S. W. 772, 99 S. W. 237, 124 A. S. R. 384, 8 L.R.A. (N.S.) 433.

3. Note: 42 Am. Dec. 50.
4. See supra, par. 236.

on his own goods. The right is purely a right of lien and is in no sense a right of rescission. On the contrary, it proceeds in affirmation of the contract, and as a means of its enforcement. It is in the nature of a pledge raised or created by the law, upon the happening of the insolvency of the buyer, to secure the unpaid purchase money to the seller. It is a mere right of detention, to satisfy the unpaid purchase money. It is somewhat different from the other possessory liens recognized at common law, as the seller has a special property in the goods sold which he may enforce by a sale after due notice to the buyer. The lien of an unpaid seller of goods is not self-executing. It is a right which he may or may not assert, and which if not asserted in time is lost.8 But it is an additional security for the payment of the purchase price, and is not waived by resorting to any other security, provided the other security is not of such a nature as waives or discharges the lien." If the seller has invested the buyer with the indicia of title to the goods, as by transferring to him a warehouse receipt, the buyer may by a resale of the goods and transfer of such receipt shut off the seller's lien if the purchaser is a bona fide purchaser for value.10 Still where goods which have been sold on credit remain in the constructive possession of the seller under such circumstances that his fien will attach on the happening of the insolvency of the buyer, a pledge of the goods by the buyer to his creditor, as collateral security for an antecedent indebtedness, the creditor parting with no new value and making no agreement for delay, does not constitute the pledgee a purchaser for value, in such a sense as gives him a better right in respect of the goods than his pledgor and cut off the lien of the seller.11 The general principles of the common law as to the seller's lien are recognized in the Sale of Goods Acts.

392. What Law Governs Generally.-The right of a seller to a lien on the thing sold is a matter related to and an incident of the contract of sale and not an incident of the remedy for the collection.

5. Greenleaf v. Gallagher, 93 Me. 549, 45 Atl. 829, 74 A. S. R. 371; Conrad v. Fisher, 37 Mo. App. 352, 8 L.R.A. 147.

Note: 83 A. S. R. 452.

6. Conrad v. Fisher, 37 Mo. App. 352, 8 L.R.A. 147.

7. Conrad v. Fisher, 37 Mo. App. 352, 8 L.R.A. 147. See also Arnold v. Carpenter, 16 R. I. 560, 18 Atl. 174, 5 L.R.A. 357. See supra, par. 376, as to the general remedy of the seller by resale on account of the buyer. As to the general right to enforce common law possessory liens by a sale of the chattels, see LIENS, vol. 17, p. 613.

8. Conrad v. Fisher, 37 Mo. App. 352, 8 L.R.A. 147.

9. Conrad v. Fisher, 37 Mo. App. 352, 8 L.R.A. 147.

10. Conrad v. Fisher, 37 Mo. App. 352, 8 L.R.A. 147. See infra, par. 409 et seq., as to the effect of a resale or transfer of a bill of lading on the seller's right of stoppage in transitu.

11. Conrad v. Fisher, 37 Mo. App. 352, 8 L.R.A. 147. See infra, par. 669, as to whether the discharge or satisfaction of a pre-existing indebtedness is a valuable consideration entitling a purchaser of chattels to protection as a purchaser for value.