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and if the charges are not tendered, though the carrier is not bound to deliver the goods, it may be that his right is no longer to insist on keeping the goods as carrier, but merely to retain the possession, holding the goods subject to any orders of the buyer, not derogatory to his lien. In Ellis v. Hunt (a), in 1789, Buller, J., puts the case on the ground that "The carrier would not have been liable in the "character of a carrier, for the goods had got to the end "of their destined journey, but he would have been answer"able only as warehouse-keeper." It does not appear from the case, whether this supposed alteration in his character proceeded from some agreement so to consider himself, or because he had performed his contract of carriage, and therefore was bound as a matter of law, to act in this varied character when required.

The transitus is determined when the goods come to the actual or constructive possession of one, to whom the original buyer's rights have been transferred, exactly as when they come to the possession of the original buyer himself. And it does not make any difference whether the transfer is by the contract of the buyer, as if he sells the goods before their arrival to a third party, or by operation of law, as when the buyer has become bankrupt, and consequently his rights have passed to his assignees. When, therefore, there is a subbuyer, his possession terminates the transitus (Dixon v. Yates (b)), and so does that of the assignees of a bankrupt buyer, or their agents. At one time there seems to have been a feeling that this was hard, and that the assignees, whose rights depended entirely on the bankruptcy, should not in fairness take goods sold on the credit of the bankrupt and not yet paid for; but the law was not doubted to be so settled, even by those who questioned its propriety. "On looking "into the cases," said Lord Alvanley, in Scott v. Pettit (c), in 1803, "I find that we are bound to hold, that though a "bankrupt has altogether ceased to be a trader, yet that his

(a) Ellis v. Hunt, 3 T. R. 464.

(b) Dixon v. Yates, 5 B. & Ad. 346, ante, p. 370,
(c) Scott v. Pettit, 3 B. & P. 469,

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"warehouse continues open for the purpose of receiving goods, and that the assignees have a right to take possession "of everything that may come into their hands, without pay"ing a single farthing. No doubt, therefore, for the purpose of receiving goods, the assignees stand in the place "of the bankrupt." It may therefore be stated, that a third party acquiring property in the goods from the original buyer, has rights as extensive as the original buyer. But where by agreement between the carrier and the buyer, or by act of law, something is to intervene before the carrier is to deliver the goods, beyond what would arise in an ordinary case of carriage, that is not to be considered as making the carrier an assignee of the goods from the buyer, so as to make his possession terminate the transitus.

In Oppenheim v. Russel (a), in 1802, the goods were stopped by the plaintiff in the hands of the carrier. The plaintiff consigned goods by the defendant, a carrier, to a buyer who owed money to the defendant for the carriage of other goods. On the buyer's insolvency the plaintiff stopped the goods and tendered the defendant his charges in respect of these goods, but the defendant refused to give them up unless he was paid the whole sum due to him from the buyer. The case for the defence was, that the stoppage was not good, at least against the carrier, because, by agreement with the consignee, the carrier had a lien on the goods for the general balance of his account against the insolvent consignee. Lord Alvanley rejected some evidence tendered to prove this defence, and on application for a new trial the Common Pleas decided that the evidence was improperly rejected, but that there should be no new trial, because, though the carrier might have a lien as against the consignee, it would not affect the seller's right to stop the goods. At Nisi Prius, Lord Ellenborough, in Smith v. Goss (b), in 1808, approved of this decision and extended it. There the seller sent goods by the buyer's direction to a carrier to be forwarded,

(a) Oppenheim v. Russel, 3 B. & P. 42.
(b) Smith v. Goss, 1 Camp. 282.

and stopped the goods in his hands. A creditor of the buyer had, previously to the stoppage, attached the goods in the carrier's hands, by a process out of the Mayor's Court of London. Lord Ellenborough said, that the seller's right was the elder and preferable lien, and not superseded by the attachment.

The carrier, it is obvious, was not the less an agent to forward, though he had a general lien against the consignee. The right to retain possession till he was paid the larger sum, made his possession more valuable to him, but did not alter its character in the least. He was still an agent to forward. And from the peculiar nature of a foreign attachment, it seems not to alter the character of the holder of the property. It is probable that a seizure by the sheriff, under an execution against the buyer, would be held to terminate the transitus, for the reasons suggested by Chambre, J., in Oppenheim v. Russel (a).

The right of stoppage in transitu can be exercised only when the buyer is insolvent or has become bankrupt.

Insolvency is thus defined by section 62 (3) of the Sale of Goods Act :—

"A person is deemed to be insolvent within the meaning "of this Act who either has ceased to pay his debts in the

ordinary course of business, or cannot pay his debts as "they become due, whether he has committed an act of "bankruptcy or not. . .

It is very usual for a seller to reserve to himself by the terms of the contract of sale, and of the contract which he makes with the carrier, a right to prevent or delay the delivery of the goods to the buyer until some conditions are fulfilled. When this is the case, the solvency of the buyer is beside the question; neither he nor his representatives can have any right to take possession until the

(a) Oppenheim v. Russel, 3 B. & P. 42,

conditions are fulfilled, or are waived by the seller. There is a good deal of difficulty at times, in determining whether the conditions which the seller has endeavoured to make conditions precedent to the delivery of the possession, are or are not binding on the buyer. On this subject something has been already said (a). But when the conditions are binding, the case is not one of stoppage in transitu, but rather a case in which the peculiar circumstances have prevented the transitus ever commencing, as the carrier, instead of being an agent to forward from the seller to the buyer, has agreed to be an agent to keep possession for the seller, till the conditions are fulfilled. The right of stoppage in transitu is a right to interfere and prevent the buyer from taking actual possession, which he would otherwise have a right to take, and to undo the effect of an unconditional delivery to an agent to forward. This power does not exist, except in the case of insolvency.

In Walley v. Montgomery (b), in 1803, the consignor's agent Montgomery obtained possession of the goods, and refused to deliver them to the consignee, Walley, unless he would pay the price in cash. Lord Ellenborough, at the trial, thought that the consignment was, from the first, conditional, and nonsuited the plaintiff, but on its being shown that the consignment was not conditional, the nonsuit was set aside. Walley was not insolvent; if he had been, this would have been a good stoppage in transitu, and he would have had no cause of action.

In the case of The Constantia (c), in 1807, in which Lord Stowell had to decide on the effect of an attempted revendication under the old law of France, where the seller had acted under a mistake as to the insolvency of the consignee, he decided that it was a nullity, inasmuch as the insolvency did not ensue; but that if the buyer had become insolvent it would have been good. The law of revendication was analogous to the law of stoppage in transitu, and Lord

(a) Ante, p. 152.

(b) Walley v. Montgomery, 3 East, 585, ante, p. 154.

(c) The Constantia (Henrickson), 6 Rob. 321.

Stowell, in his judgment, quoted the earlier editions of Abbott on Shipping, and stated the general English law of stoppage in transitu as bearing on the question. Lord Tenterden, in the later editions of his book, adopted the judgment of Lord Stowell, as an illustration of the English law. There is no doubt now of the proposition in which these two great authorities concurred, that "the mercantile law is clear and "distinct that the seller has not a right to vary the consignment, except in case of insolvency." It seems, though there is no direct authority for the proposition, that the law is precisely the same in the case of a carrier by land as in that of one by sea.

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There is no necessity that the buyer should have been formally declared a bankrupt if he has become insolvent («). There must, of course, in all cases be great difficulty in proving that a person, who has not stopped payment, is, in fact, not solvent, and there seems to be no case in which this has been attempted; but the text books and dicta of the Judges do not restrict the use of the term "insolvent," "failed in his circumstances," to one who has stopped payment. There must, however, be great practical difficulty in establishing the actual insolvency of one who still continues to pay his way; and as the carrier obeys the stoppage in transitu at his peril if the consignee be in fact solvent, it would seem no unreasonable rule to require that, at the time the consignee was refused the goods, he should have evidenced his insolvency by some overt act (b).

(a) Biddlecombe v. Bond, 4 A. & E. 337.

(b) Sir W. M. James said that a company was insolvent when its assets and existing liabilities were such as to make it reasonably certain that the existing and probable assets would be insufficient to meet the existing liabilities. A man is insolvent, said Willes, J., when he is not in a condition to pay his debts in the ordinary course, as persons carrying on trade usually do. See In re European Life Assurance Society, in 1869, 39 L. J. Ch. 324; 9 Eq. 128; and Queen v. Saddlers Co., 32 L. J. Q. B. 345; 10 H. L. R. 426; Bayley v. Schofield, 1 M. & S. 338; Parker v. Gossage, 2 C. M. & R. 617; Doe v. Rees, 4 Bing. N. C. 384 ; Shaw v. Lucas, 3 Dow. & Ry. 218; In re London and Manchester Industrial Association, 45 L. J. Ch. 170; 1 Ch. D. 472; In re Phoenix Bessemer Steel Co., 4 Ch. D. 108; Ex parte Carpenter, Mont. & McAr. 5; Nixon v. Verrey, 54 L. J. Ch. 736; (1885) 29 C. D. 196.

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