"and the seller makes defective deliveries in respect of one or more instalments, or the buyer neglects or refuses to take "delivery of or pay for one or more instalments, it is a question "in each case depending on the terms of the contract and the "circumstances of the case, whether the breach of contract is a repudiation of the whole contract or whether it is a severable. "breach giving rise to a claim for compensation but not to "a right to treat the whole contract as repudiated." 66 The cases in which the buyer, though in default, was not insolvent are not necessarily authorities for the extent of the seller's rights, when there has been insolvency, and still less for the effects of stoppage in transitu. But the subjects are very closely connected, and if the one class of seller's rights was clearly and accurately defined, it would go far to settle the extent of the others. If the seller had a right to rescind the contract after a default in the buyer, it would be very reasonable that he should have the same right on his insolvency before default, and that a stoppage in transitu should be considered as an election to exercise that right; but it is difficult to see how the seller could acquire a power to rescind the contract, by the act of putting the goods in motion, and then stopping them, if he had it not before. The right to stop in transitu may, as we have seen, be exercised by the seller, although he is partially paid (Hodgson v. Loy (a)); or, although he has received bills for the full price which he has negotiated, and which are outstanding (Feise v. Wray (b)), and that without tendering or returning either the money or the bills (Edwards v. Brewer (c)). It seems very difficult to consider the stoppage in transitu as amounting to a rescission of the contract, when the seller may exercise it when he has not restored, and, as in Feise v. Wray (b), from his own insolvency, cannot restore the buyer to his original position. No such difficulty is in the way if the (a) Hodgson v. Loy, 7 T. R. 455, ante, p. 354. stoppage is considered as doing no more than putting the seller in possession of the goods as a security. In Clay v. Harrison (a), in 1829, which was an action on a policy of insurance, there had been an agreement for the supply of goods free on board. The seller shipped the goods accordingly, and by so doing appropriated them to the contract, and converted the agreement into a sale. The buyer insured his interest in the goods: they were damaged by one of the perils insured against; then the buyer became insolvent, and the seller stopped the goods, already damaged, in transitu. The insurers contended that the stoppage in transitu rescinded the contract, and put an end to the buyer's interest in the goods, so that he had sustained no damage. The assignees contended that the bankrupt retained the general property in the goods. The King's Bench took time to consider, and decided in favour of the insurers; but it appears from Mr. Baron Parke's statement, in James v. Griffin (b), that they decided it on the special ground, that in this case the only appropriation of the goods was that accompanying the parting with possession, and that, as the stoppage in transitu at all events put the party in the same position as if he had not parted with the possession, it must undo the appropriation that accompanied that parting with possession, so that the goods, which were in fact lying shattered and valueless on the beach at Elsinore, were, in contemplation of law, in the same position as if they had never left the seller's warehouses at St. Petersburg. It seems a fair inference, that the Judges who adopted such a very artificial distinction, in order to avoid deciding what was the effect of stoppage in transitu, were not able to agree in forming their judgment on the general question. In Gibson v. Carruthers (e), in 1841, the Court of Exchequer differed, in a case which, though not directly involving this point, yet threw considerable light on their Lordships' (a) Clay v. Harrison, 10 B. & C. 99. (e) Gibson v. Carruthers, 11 L. J. Ex. 145; 8 M. & W. 321. opinions upon it. In that case, Harris had agreed with Carruthers and Co., that he should charter a ship, and send her out to Odessa, that Carruthers and Co. should there load her with linseed, and have the bills of lading made out to their order, and that Harris should pay the price on the receipt of the invoice and bill of lading. Harris did send out the vessel, but became bankrupt before her arrival, and Carruthers and Co. refused to load the vessel. The question in the case was, whether the assignees of the bankrupt could maintain an action for this refusal. It is clear that no question about stoppage in transitu was directly involved in this; the goods were never even appropriated, far less put in transitu, and what the defendants sought was, to consider the insolvency an excuse for not proceeding with an executory contract. But the subject was analogous to that of stoppage in transitu, and Lord Abinger delivered a very interesting judgment, in which he assumes that Carruthers and Co. might, if they had put the goods on board, have altered the consignment and stopped them in transitu, and that if they had done so, it would have operated as a rescission of the contract, and on these assumptions he argues very convincingly that they must have a right to rescind the contract before putting the goods on board; for this, amongst other reasons, he thought that the plaintiffs could not recover. The other three Judges, Parke, B., Gurney, B., and Rolfe, B., were of a different opinion. They pointed out that there was not to be any transitus, properly so called, in this case, as Carruthers and Co. were to keep the control of the goods till payment, and they confine their judgment to the single point, that bankruptcy or insolvency does not by itself render an executory contract voidable, at the election of the solvent party. But though they in express words avoid deciding what the effect of stoppage in transitu would have been, it is not too much to say, that the tendency of their reasoning, and especially of that of Parke, B., is to show that stoppage in transitu does not do more than restore to the seller a security for the unpaid price, and does not rescind the contract. In Wentworth v. Outhwaite (a), in 1842, the point was discussed before Lord Abinger, Parke, B., Alderson, B., and Rolfe, B., and the Court then, though not deciding the point, intimated that Lord Abinger thought that, subject to some qualifications, stoppage in transitu did operate as a rescission of the contract, and that the other three Judges were strongly inclined to think, that its effect was only to replace the seller in the same position as if he had not parted with the possession, and entitle him to hold the goods until the price was paid down. 66 In that case the goods were despatched in two parcels, by two different carriers; one parcel was stopped in transitu, the other reached its destination. The question was, what effect this partial stoppage in transitu had upon the insolvent's property in the other parcel. Parke, B., in delivering the judgment of the Court, said: "What the effect of stoppage in transitu is, whether entirely to rescind the contract, "or merely to replace the vendor in the same position as if "he had not parted with the possession, and entitle him to "hold the goods until the price be paid down, is a point not yet finally decided, and there are difficulties attending each "construction. If the latter supposition be adopted (as most "of us are strongly inclined to think it ought to be, on the weight of authority), the vendor is entitled to retain the part actually stopped in transitu, till he is paid the price "of the whole, but has no right to retake that which has "arrived at its journey's end. His right of lien is reverted "on the part stopped, but no more. My Lord Chief Baron "has expressed an opinion, to which he still adheres, that the "contract is rescinded by a stoppage in transitu, but he does "not think that this affects the right of the vendee to retain "that portion of the goods which have been actually de"livered to him, or in other words, have reached the place of "their destination, more especially when the goods and the "price may be apportioned, be apportioned, as in the present case, and a new (a) Wentworth v. Outhwaite, 12 L. J. Ex. 172; 10 M. & W. 436; considered in Exp. Chalmers (1873), 42 L. J, Bk, 37; L, R. 8 Ch. 289, "contract be implied from the actual delivery and retention "of a part." It is to be observed, that Lord Abinger, whilst holding that stoppage in transitu rescinded the contract, yet did not hold that this rescission was complete, or to be followed by all the consequences which attend a rescission. He never had occasion during his life to explain what the precise force of these qualifications was, but it seems probable that he would, if called upon to explain his views, have said, as he hinted in Gibson v. Carruthers (a), that stoppage in transitu was an arbitrary rule, adopted for the advantage of trade, and that no common law phrase could exactly express its effect, but that "rescission" came nearest to it, but that such qualifications must be attached as were by usage found to be for the advantage of trade. But, however doubtful it may have been formerly, it is clear law now that stoppage in transitu is not a rescission of the contract (b). Hitherto the rights which the seller has over the goods before they have come into the buyer's possession, and the seller's right to withhold delivery, to stop in transitu, to retake possession, to resell and to rescind, have been the chief subject of investigation. It is now proposed to consider the other remedies which are available to the party failed against where there has been a breach of contract. These remedies are dealt with by the Sale of Goods Act as follows: "Section 49.-(1.) Where, under a contract of sale, the property in the goods has passed to the buyer, and the buyer wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may maintain an action against him for the price of the goods. "(2.) Where, under a contract of sale, the price is payable on a day certain irrespective of delivery, and the buyer wrongfully neglects or refuses to pay such price, the seller may maintain an action for the price, although the property (a) Gibson v. Carruthers, 8 M. & W. 321, ante, p. 318. (b) Per Cairns, L. J., in Schotsman v. Lancs, and Yorks. Ry. Co., 36 L. J. Ch. 366; L. R. 2 Ch, Ap. 340; and Sale of Goods Act, 1883, s. 48. |