PART III.

OF THE SELLER'S RIGHTS.

CHAPTER I.

STOPPAGE IN TRANSITU: ITS ORIGIN.

IT IS A RIGHT PECULIAR

TO ONE WHO STANDS IN THE SITUATION OF SELLER,
AND WHO IS WHOLLY OR PARTIALLY UNPAID.

It is superfluous to repeat the modern authorities for the position that by a sale without delivery a legal property passes. But, as has been already more than once intimated, it is not an absolute and unqualified legal property that is transferred the property passes subject to the unpaid seller's rights.

And this brings us to the consideration of the difficult and important subject of what are the unpaid seller's rights.

It is to be observed, that as a general proposition the person who has the property in goods has primâ facie, but not necessarily, the legal right to the possession of them.

And, in general, he who has the property and legal right to the possession of goods, has in contemplation of law the control over them, though in point of fact the actual holder of the goods may wrongfully refuse to obey his directions; still, as the holder ought to obey, the goods are considered as being in point of law in the possession of the proprietor, and therefore the owner of goods has primâ facie all the legal rights and remedies which he would have if the goods were in his own actual possession, or, as it is more technically expressed, "It is a rule of law that the property of personal "chattels draws to it the possession" (a).

(a) 2 Saunders, 89, n.

From this it follows that the buyer has a primâ facie right to the possession of the goods; but it is no more than a prima facie right to the possession. The parties may, by the terms of their agreement, bargain that the right of property shall vest in the buyer forthwith, but that the right of possession shall remain with the seller until the fulfilment of any conditions they please, and if there is nothing in the circumstances to show a contrary intention, the parties are presumed to intend to make the payment of the price contemporaneous with the delivery of the possession (a). If. therefore, nothing be said in the agreement about the time of delivery or payment, the construction put by the law upon the agreement is, that the seller shall deliver the goods upon payment of the price, and the buyer shall pay the price upon receiving the goods, and either party may at a reasonable time call upon the other to fulfil his part of the bargain, provided he is ready to fulfil his own, but not otherwise; so that neither the seller can maintain any action against the buyer for the price without showing a readiness to deliver the goods, nor the buyer maintain any action founded on the right of possession without showing a readiness to pay the price. But inasmuch as this proceeds on the presumed intention of the parties anything in the agreement which shows that such is not their intention will alter the construction and legal effect of the agreement (b).

If, therefore, there is express credit given, and nothing said about the time of delivery, the seller is bound to deliver the goods in a reasonable time if required, but the buyer is not bound to pay the price before the credit expires; for such is the bargain. During the interval between the vesting of the property and the expiration of the credit, the buyer has the rights of property and possession, though the goods have not been delivered nor paid for, and he may in pleading, and for all legal purposes, be considered as possessed of them. But his rights are not indefeasible; and if, before he has obtained possession of the goods, the buyer becomes

(a) Bloxam v. Saunders, 4 B. & C. 941.

(b) Sale of Goods Act, section 28.

insolvent, the unpaid seller, who has parted with possession, has a right to stop the goods in transitu-a right which is peculiar to the contract of sale. The unpaid seller has also a lien on the goods, while in his possession, for the price, and that notwithstanding that the property in the goods may have passed to the buyer; and he has also a limited right of re-sale (a).

We come then to treat of the rights of the unpaid seller, whilst he still retains possession of the goods sold, and of that extension of his right which enables him, in the event of the buyer becoming insolvent, to retake the goods after he has parted with the possession, and before the buyer has taken. possession. In the natural order of things, it would be more regular to consider the seller's rights whilst in possession, before taking any notice of those rights which he possesses after he has parted with it; but it seems more convenient to reverse this order, and commence by endeavouring to ascertain the extent and nature of the right of stoppage in transitu. In the first place, it is to be observed, that when the seller has given the buyer possession under the contract of sale, all his rights in the goods are completely gone; he must recover the price exactly as he would recover any other debt, and has no longer any claims on the goods sold superior to those of any other creditor. The delivery and acceptance of possession complete the sale, and give the buyer the absolute unqualified and indefeasible rights of property and possession in the things sold, though the price be unpaid and the buyer insolvent; unless, indeed, the whole transaction is vitiated by actual fraud. "In this respect," says Lord Tenterden (b), "the law of England is more favourable to the transfer of property, the great subject of commerce, and less attentive "to the interest of the seller of goods, than the ancient civil "law or the modern law of many European nations, which is "chiefly founded on the civil law; for the civil law did not "in general consider the transfer of property to be complete

(a) Sale of Goods Act, sections 39 & 44.

(b) Abbot on Shipping, Part III., Chap. IX., 14th ed., pp. 812, 813.

"by sale and delivery alone, without payment or security for "the price, unless the seller agreed to give a general credit "to the buyer for it; but allowed the seller to reclaim the "goods out of the possession of the buyer, as being still the "seller's own property. And by the general law of France "in the case of insolvency, the seller who has sold a thing, "and still lies out of the money which he was to have for it, "if he finds the thing that he sold in the hands of the buyer,

may seize on it, and he is not obliged to share it with the "other creditors of the buyer; whereas, by the general law "of England, when goods have been delivered into the actual "or constructive possession of the buyer, they cannot be "reclaimed."

It must be borne in mind, that at the time Lord Tenterden wrote, the modern law of most of the Continental nations was what is now the ancient law of the same countries, for the Code Napoleon was not yet introduced. And this is the more important, because the Code de Commerce on this point was framed with the avowed and deliberate purpose of abolishing the ancient law of revendication, and adopting the provisions of the law of England and America (a). But the distinctions between the civil law which enabled the seller after delivery to seize the goods as his property, even in the hands of a bonâ fide sub-purchaser, unless there had been general credit given, express or implied, and the ancient law of France, which gave the right to recover them so long as they were in specie in

(a) The following is Lord Blackburn's note:-This assertion is made on the authority of a note in 1 Bell's Commentaries, p. 207. I have not seen the documents there referred to, but the quotations seem fully to bear out the statement. But the right of revendication seems to remain when the parties are not traders, but the period during which it must be exercised is cut down to a week, and is confined to the case of a sale without giving of credit. Where credit is given, the seller seems to retain a "privilege" or preferable claim to that of ordinary creditors, but to have no right of revendication. The creditors who have a 'privilege,' on certain moveables are ... 4thly, The price of moveable goods sold and not yet paid for, if they are still in the hands of the debtor, whether he bought them on credit or without credit (à terme ou sans terme). If the sale was made without credit, the seller may even revendicate the goods so long as they are in the hands of the purchaser, and forbid the resale, provided the revendication is made within a week of the delivery, and that the goods remain in the same state in which that delivery was made." Code Civil, 2102.

the hands of an insolvent buyer, whether there was credit given or not, but made that right cease when the goods came into the hands of a sub-buyer, and the law of England which gives no right of either sort, seem all to have been present to Lord Tenterden's mind when writing these few sentences.

The state of the ancient foreign law is by no means irrelevant to the present inquiry; for there seems but little reason to doubt that the right of stoppage in transitu is a modification of the right of revendication, such as it had become by the general law merchant during the middle ages.

Although," said Lord Abinger, in 1841 (a), "the ques"tion of stoppage in transitu has been as frequently raised "as any other mercantile question within the last hundred years, it must be owned that the principle on which it depends "has never been either settled or stated in a satisfactory manner. In Courts of Equity it has been a received opinion "that it was founded on some principle of the common law. "In Courts of Law it is just as much the practice to call it "a principle of equity which the common law has adopted. "This was strongly insisted upon by Mr. Justice Buller in "his celebrated judgment in the House of Lords in the case “of Lickbarrow v. Mason (b). It has also been said by Lord "Kenyon, that it was a principle of equity adopted by the "common law to answer the purposes of justice. The most "eminent equity lawyers that I have had an opportunity of "conversing with in times that are gone by, were unanimous "in repudiating it as the offspring of a Court of Equity. "The first case that occurred on this subject affords some "authority for the opinion of Mr. Justice Buller and Lord "Kenyon. It is the case of Wiseman v. Vandeput (c), in "1690. That was a bill filed by the assignees of the bankrupt. against the vendor. The Lord Chancellor directed an "action of trover to be brought by the plaintiffs, upon which they recovered a verdict. It is clear, therefore, that the

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(a) Gibson v. Carruthers, 11 L. J. Ex. 145; 8 M. & W. 321.

(b) Lickbarrow v. Mason, 4 Bro. P. C. 57; 6 East, 27.

(c) Wiseman v. Vandeput, 2 Vernon, 203.