Page images
PDF
EPUB

§ 728. Discharge of seller's lien in sales of chattels.

The law governing the sale of goods gives an unpaid seller in possession a lien for the price in the absence of an agreement to the contrary. This lien may be lost in various ways. Primarily it may be lost by surrendering possession voluntarily without an agreement for continuance of the lien.67 Here though neither consideration nor a seal supports the discharge of the vendor's right, the surrender of possession like the delivery of a gift, puts the transaction in the category of dealings with tangible property, rather than intangible choses in action. The lien may also be lost by agreement or by conduct. Generally where the vendor is still in possession, and his right is held to be destroyed, there is what amounts to an agreement supported either by consideration, or by a promissory estoppel. Such an estoppel precludes an assertion of the lien against a third person who has bought the goods from the original buyer, being induced thereto by an attornment of the seller to the subbuyer, or by any circumstances indicating deception of the sub-buyer as to the relations between the seller and the original buyer.68 Permitting the buyer greatly to increase the value of the goods, has been held to destroy the lien.69 It is sometimes laid down broadly that one having a lien waives it by asserting mistakenly a greater right than the law allows him. The true doctrine, however, is doubtless that stated by the Supreme Court of Minnesota: "An examination of the authorities on the subject, from the early case of Boardman v. Sill,70 down, satisfies us that they all proceed upon principles essentially of equitable estoppel, and limit the application of the doctrine invoked by counsel to cases where the refusal to deliver the property was put on grounds inconsistent with the existence of a lien, or on grounds entirely independent of it, without mentioning a lien. Thus it has been repeatedly held that a lien is not waived by mere omission to assert it as the ground of refusal, or by a general refusal to surrender the goods,

67 As to the effect of surrender of the goods under an agreement that the lien shall continue, see Williston on Sales, § 515.

68 Williston on Sales, § 558.

69 Douglas v. Shumway, 13 Gray,

498. Timber had been cut into fire-
wood on the seller's premises in pur-
suance of the contract with the seller.
There is in such a case an element of
promissory estoppel.
70 1 Campb. 410, note.

without specifying the ground of it, except in certain cases, where the lien was unknown to the person making the demand, and that fact was known to the person on whom the demand was made. In such cases, if the ground of refusal is one that can be removed, the other party ought in fairness to have an opportunity to do so." 71

There will rarely be a case of surrender of a lien by mere election because even judgment in an action for the price does not destroy the lien.72 But if the buyer becomes bankrupt, a seller with a lien is a secured creditor, and like any secured creditor he has the election of surrendering his security and proving for his full claim or of realizing on his security and proving for the balance. Proof of the full price as an unsecured creditor would be a waiver of the lien,73 though doubtless if proof was made under a misapprehension the court would allow it to be withdrawn.

It seems probable, however, that even without consideration or estoppel a lien holder's right may be surrendered. It has indeed been said that an agreement without consideration to give up an existing lien is ineffectual; 74 but both the English Sale of Goods Act 75 and the American Uniform Sales Act 76 provide that an unpaid seller loses his lien by "waiver thereof." The meaning of waiver is not defined, but presumably is intended to include any express intention to surrender. It is also stated in both Acts 77 that

"Crummey v. Raudenbush, 55 Minn. 426, 56 N. W. 1113. See also Loewenberg v. Railway Co., 56 Ark. 439, 19 S. W. 1051; Fowler v. Parsons, 143 Mass. 401, 9 N. E. 799; Folsom v. Barrett, 180 Mass. 439, 62 N. E. 723, 91 Am. St. Rep. 320. Compare Bean . Bolton, 3 Phila. 87; Stephenson v. Lichtenstein, 72 N. J. L. 113, 59 Atl. 1033.

72 Houlditch v. Desanges, 2 Stark. 337; Scrivener v. Great Northern Ry. Co., 19 W. R. 388; Rhodes v. Mooney, 43 Ohio St. 421, 4 N. E. 233. See also Wade v. Moffett, 21 Ill. 110, 74 Am. Dec. 79.

"In Rhodes v. Mooney, 43 Ohio St.

[blocks in formation]

delivery of part of the goods is not a discharge of a lien unless made under such circumstances as to show an intent to waive the lien. The implication is necessary that an intent to waive the lien if manifested will be effectual, without consideration.78 So it seems that an attornment to a subpurchaser even after he has bought the goods and paid the original buyer for them is a surrender of the lien.79 Yet in such a case also the seller is surrendering something for nothing. By his attornment he acquired no new right, retaining only his contractual claim against the original buyer for the price, and losing the hold upon the goods which he had prior to the attornment.

The fact that a lien may be surrendered without consideration is not inconsistent with the revival of the lien, if the buyer subsequently becomes insolvent. Without question a sale on credit excludes a lien; yet if the seller is in possession when the buyer becomes insolvent or the period of credit expires,' the lien will revive.80 So after a voluntary agreement to surrender a lien and hold as bailee for the buyer, his supervening insolvency will revive the lien.81

729. Waiver of vendor's lien on real estate.

In England and some of the United States an unpaid vendor is allowed an equitable lien on real estate though he has parted with title and possession. This lien is held not to arise or to be waived if the buyer at the time of the bargain manifests an intent not to rely upon the security of the land. If subsequently, by taking security, or otherwise, a similar intent is manifested, it is held that the lien then also is destroyed. In most of the cases so holding the vendor at the time he manifested an intent to forego a lien received some payment, security, or promise,

78 So it is said in McElwee v. Metropolitan Lumber Co., 69 Fed. 302, 316, 37 U. S. App. 266, 16 C. C. A. 232, that if delivery of the part is "intended as a symbolical delivery of the whole, and as a waiver as to any right of retention as to remainder, the lien is lost."

79 Hurry v. Mangles, 1 Camp. 452; McElwee v. Metropolitan Lumber Co.,

69 Fed. 302, 316, 37 U. S. App. 266, 16 C. C. A. 232.

80 McElwee v. Metropolitan Lumber Co., 69 Fed. 302, 37 U. S. App. 266, 16 C. C. A. 232, and cases cited.

81 Grice v. Richardson, 3 App. Cas. 319; Miles v. Gorton, 2 Cr. & M. 504; McElwee v. Metropolitan Lumber Co., 69 Fed. 302, 37 U. S. App. 266, 16 C. C. A. 232.

which would serve as consideration, but at least in one case it has been held that a mere manifestation of intent by the vendor to give up a lien which he already had acquired, terminated the lien.82

§ 730. Waiver of the condition of payment in a cash sale. Whether a sale is complete with a lien retained by the seller, or whether the property has not passed, and will not pass until the buyer pays the price, is a question that has some importance when merely the rights of the buyer and the seller are concerned; for if the property has passed, the risk has been transferred, the seller may sue for the price,83 and, on the other hand, the buyer may bring trover or replevin for the goods if the seller wrongfully refuses to carry out the bargain. The greatest importance of the question arises, however, when the rights of third persons are concerned. If the property does not pass till payment, a purchaser from the buyer gets no title. Even though the buyer has the goods in his possession and delivers them to the subpurchaser, this result is necessarily reached unless, as in England, a statute otherwise provides.84

If the condition protecting the seller has been surrendered by him,84 the buyer's title becomes absolute and may be transferred to a subpurchaser. The majority of the litigated cases

82 In Moshier v. Meek, 80 Ill. 79, 81, the court said: "Without passing upon or in anywise determining the effect of the declarations made by Daniel Meek in his lifetime, that he did not intend to collect the notes of William on his legal liability for their payment, they clearly and unmistakably manifest a determination not to rely upon or to enforce the lien. This is as manifest from these declarations, as if he had formally said, when the conveyance was made, that he waived the right to insist upon a vendor's lien, or had subsequently said the same thing." See also Dart on Vendors & Purchasers (7th ed.), p. 733. Warvelle on Vendor & Purchaser, §§ 698, 699. 83 Even thought the property has not passed, in some instances, the seller

may sue for the price and is not limited to a recovery of the difference between the value of the goods and the agreed price. Infra, § 1365.

84 In England, by statute, the Factors' Act of 1889 enables a buyer in possession to give a good title to a purchaser from him. See Williston, Sales, 319. In Starnes v. Roberts, 128 Ga. 718, 720, 58 S. E. 348, the court upheld the seller's right to regain the goods from the buyer, but said had the action been against a subpurchaser "a very different case would have been presented." But except where conditional sales are invalid at common law or for lack of record a cash sale must also be valid against third persons. 84a See supra, § 727.

in regard to cash sales involve the question how far the delivery of the goods by the seller to the buyer or their continued possession by the buyer without objection on the part of the seller excuses the condition requiring payment of the price before title is transferred. There can be here no surrender of the seller's right without his assent. The mere acquisition of possession by the buyer, therefore, irrespective of the seller's assent, will have no such effect. Nor will temporary manual possession by the buyer, even with the seller's assent. As a shopkeeper may allow a prospective purchaser to take goods into his hands and examine them before payment, though he does not assent to the removal of them, it is evident that a delivery to the buyer may be itself conditional; that is, merely for a special temporary purpose, such as examination, testing, weighing, or the like. No assent in such a case to the transfer of the property by the seller can be found when the original bargain required payment of the price as a condition precedent to such transfer.85 The cases which present difficulty are where the seller has voluntarily parted with possession and for a purpose other than the temporary one of examination or the like. It is universally admitted in the decisions that delivery is at least evidence of assent to transfer title, but it is also generally said that it is only evidence and that the seller's' intent to retain the benefit of his condition may be shown.86

85 In Whitney v. Eaton, 15 Gray, 225, goods were delivered to the buyer for the purpose of computing tare. In Osborn v. Gantz, 60 N. Y. 540, and Hart v. Boston & Maine R. R., 72 N. H. 410, 56 Atl. 920, to test the accuracy of weighing. In Silsby v. Boston & Albany R. R. Co., 176 Mass. 158, 57 N. E. 376, to verify the quality and count of the merchandise. In Wabash Elevator Co. v. First National Bank, 23 Ohio St. 311, delivery of warehouse receipts for grain was made in expectation of immediate payment, to which the seller was entitled by the bargain, but the buyer, having a claim on another account against the seller, retained the receipts and told the seller that he would credit him on

account with the price. In Harris v. Smith, 3 S. & R. 20, delivery was secured by a trick. See also Susong v. McKenna, 126 Ga. 433, 55 S. E. 236; Evansville, etc., Ry. Co. v. Erwin, 84 Ind. 457; Ewing v. Musser, 42 Pa. Sup. 177. In all these cases it was held that title did not pass. See also Bainridge v. Caldwell, 4 Dana, 211.

88 See Guarantee Title &c. Co. v. First Nat. Bank, 185 Fed. 373, 107 C. C. A. 429; Cheatle v. MacVeagh, 83 Ill. App. 336; Gibson v. Chicago Packing Co., 108 Ill. App. 100; Dougherty v. Fowler, 44 Kans. 628, 25 Pac. 40, 10 L. R. A. 314; Seed v. Lord, 66 Me. 580; Peabody v. Maguire, 79 Me. 572, 12 Atl. 630; Merrill Furniture Co. v. Hill, 87 Me. 17, 32 Atl. 712; Scudder v.

« PreviousContinue »