210 S. 38 (1) (a). when the contract is divisible, and payment has been made in S. 38 (1) (b). respect of a portion of the goods, the seller is pro tanto paid, and can only exercise his rights as unpaid seller over the portion which remains unpaid for (g). For the seller's rights on the buyer's insolvency before the commencement or the completion of delivery, of goods deliverable by instalments, see notes to s. 39 (2), post, p. 218. Paid or tendered. "It is the buyer's duty, under the contract, to make actual payment in cash, or a tender of payment (h), which is as much a performance and discharge of his duty as an actual payment. "A tender is only validly made when the buyer produces and offers to the seller an amount of money equal to the price of the goods. But the actual production of the money may be dispensed with by the seller. The Courts, however, have been rigorous in requiring proof of a dispensation with the production of the money" (i). The existence of an account current between seller and buyer which is unsettled, so that the balance of account between them is uncertain, will not prevent the seller from exercising his right, as "unpaid" seller, of stopping the goods in transitu (j). In the case, however, of the seller consigning goods specifically in discharge of his liability to the buyer on the balance of account, it is, perhaps, doubtful whether he can afterwards exercise his rights as unpaid seller (k). When a bill of exchange. . . has been received, &c.—" Bill of exchange" is defined in s. 3 of the Bills of Exchange Act, 1882, and by s. 73 it includes cheques, and by s. 89 (1) promissory notes. As to "other negotiable instruments," see the notes to Miller v. Race (1); and per Manisty, J., in London and County Banking Co. v. London and River Plate Bank (m). The payment for goods may by the contract be agreed to take effect in a negotiable security, as in a promissory note or bill of exchange, and the agreement may be that the payment thus made is absolute or conditional. In the absence of any (g) Merchant Banking Co. v. Phænix Bessemer Steel Co. (1877), 5 Ch. D. 205. (h) Martindale v. Smith (1841), 1 Q. B. 389. (i) Benj. pp. 720 et seq., where all the cases are cited. (j) Wood v. Jones (1825), 7 D. & R. 126. (k) See Vertue v. Jewell (1814), 4 (2) 1 Sm. L. C. (9th ed.) p. 502. agreement, express or implied, to the contrary, a payment of S. 38 (1) (b). this kind is always understood to be conditional, the seller's right to the price reviving on non-payment of the security. But if a dispute arise as to the intention of the parties, the question is one of fact for the jury (n). The intention to take a bill in absolute payment for goods sold must be clearly shown (o), and not deduced from ambiguous expressions, such as that the bill was taken "in payment" for the goods (p) or "in discharge" of the price (q). Lord Kenyon said, in Stedman v. Gooch (r), that "the law is clear that if in payment of a debt the creditor is content to take a bill or note payable at a future day, he cannot legally commence an action on his original debt until such bill or note becomes payable, and default is made in the payment; but if such bill or note is of no value, as if, for example, drawn on a person who has no effects of the drawer in his hands, and who, therefore, refuses to accept it, in such case he may consider it as waste paper, and resort to his original demand, and sue the debtor"; and this dictum was quoted by Tindal, C.J., in Maillard v. The Duke of Argyle (s) to show that the word "payment" does not necessarily mean "payment in satisfaction and discharge" (t). But the payment may be treated as unconditional; as where the buyer offers to pay the price in cash, and the seller takes a negotiable security in preference (u). And so, also, if the seller have negotiated the security, without rendering himself liable thereupon, he is paid in every sense of the word (v). It must be remembered that, even when the security is taken only in conditional payment of the price, the seller is for the time a paid and not an unpaid seller, and the buyer is entitled to demand possession of the goods (w). See s. 41 (1) (a), post, p. 220. But when he has not obtained possession, if the condition of the security be unfulfilled, the lien revives under clause (b). Dishonour of the instrument.-As to dishonour of bills, see ss. 41 and following of the Bills of Exchange Act, 1882. (n) Goldshede v. Cottrell (1836), 2 M. & W. 20. (0) See Robinson v. Read (1829), 9 B. & C. 449. (p) Stedman v. Gooch (1793), 1 Esp. 5; Maillard v. Duke of Argyle (1843), 6 M. & G. 40. (9) Kemp v. Watt (1846), 15 M. & W. 672. (r) Ubi supra. (8) Ubi supra. (t) Benj. p. 732, where all the authorities are collected on p. 733, note (j). (u) Cowasjee v. Thompson (1845), 5 Moo. P. C. 165; per Cur. in Robinson v. Read (1829), 9 B. & C. 449. (v) Bunney v. Poyntz (1833), 4 B. & Ad. 568; Benj. p. 736. (w) Per Bayley, B., in Miles v. Gorton (1834), 2 C. & M. at p. 512; Benj. p. 810. S. 38 (1) (b). S. 38 (2). Or otherwise.-These words seem to refer to the case of the buyer's insolvency during the currency of the bill or note. "If the bill is dishonoured before delivery has been made, then the vendor's lien revives; or if the purchaser becomes openly insolvent before the delivery actually takes place, then the law does not compel the vendor to deliver to an insolvent purchaser” (x). ILLUSTRATIONS. 1. A. agrees to sell to B. a quantity of hops, and takes from him a bill of exchange at three months, which A. discounts. During the currency of the bill B. re-sells part of the hops to C., to whom A. delivers it, and before maturity B. becomes bankrupt. No tender is made to A. A. may, in spite of the part delivery to C., retain the residue as unpaid seller on B.'s bankruptcy. Miles v. Gorton (1834), 2 C. & M. 504. 2. A., through his agent, B., sells hay to C., and B. takes C.'s promissory note payable to B.'s order at three months. B. discounts the bill with D., and it is afterwards dishonoured. A. is not an unpaid seller, as on the receipt by his agent, B., of the amount of the note, on which A. is not liable to D. (he not having indorsed it), the condition of payment is fulfilled. Bunney v. Poyntz (1833), 4 B. & Ad. 568. (2.) In this part of this Act the term "seller" includes any person who is in the position of a seller, as, for instance, an agent of the seller to whom the bill of lading has been indorsed, or a consignor or agent who has himself paid, or is directly responsible for, the price. In this part of this Act.-I. e., so far as relates to the rights and remedies of an unpaid seller. The relation of seller and buyer exists in the after-mentioned cases for the purpose only of enabling the persons specified to exercise the rights of unpaid sellers, and not generally, so as to alter the nature of the contract existing between them. Thus, a foreign consignor is a person "in the position of a seller" under this clause, and may exercise the right of stoppage in transitu on the insolvency of the consignee, but for other purposes, as, for example, the measure of damages, the relations existing between him and his principal is one of agent and principal, and not of seller and buyer (y). (x) Per Mellish, L.J., in Gunn v. Bolckow, Vaughan & Co. (1875), 10 Ch. Ap. at p. 501. (y) Cassaboglou v. Gibb (1883), 11 Q. B. D. 797, criticising and explaining the dictum of Blackburn, J., in ... S. 38 (2). Any person in the position of a seller.-Persons who are quasi sellers, i.e., in a position similar to that of a seller, have Quasi sellers been permitted to exercise the rights of unpaid sellers. The may exercise mere possession of a lien will not, however, invest them with rights of unpaid sellers. that character. Thus, e. g., a fuller cannot stop in transitu (z). Most of the cases relate to the exercise of the right of stoppage in transitu which "has been highly favoured on account of its intrinsic justice" (a). The clause is not meant to be exhaustive of all cases, but Examples of such. supplies two illustrations of the extension of the privilege: (1) the seller's agent, who is entitled to stop the goods in his own name when the bill of lading has been indorsed to him, so that he has a special property in the goods (b); and (2) a consignor or agent buying goods on his own credit and consigning them to his principal (c). To these may be added (3) a buyer who resells his interest under an "agreement to sell" goods, although the property in the goods has not vested in him at the time of the exercise of the right (d); and (4) a principal consigning goods to his factor, even if the latter has made advances on the faith of the consignment, or may have a joint interest with the principal (e). include a A surety for the buyer is not, it seems, able to exercise the Do not right of stoppage in transitu in his own name (ƒ), but he may, surety for under s. 5 of the Mercantile Law Amendment Act (19 & 20 buyer. Vict. c. 97), on payment of the price, exercise the rights of the unpaid seller in the latter's name (g). ILLUSTRATIONS. 1. A. sells and ships goods to B. B. becomes insolvent, and A. indorses and forwards the bill of lading to C., his agent. C. may exercise the right of stoppage in transitu in his own name. Gray (1824), 2 Bing. 260. Morison v. 2. B. orders A., a foreign commission agent, to buy and consign to Ireland v. Livingston (1872), 5 H. L. at p. 409. (z) Sweet v. Pym (1800), 1 East, 4; Benj. p. 847. (a) Benj. p. 844. (b) Morison v. Gray (1824), 2 Bing. 260; and see Bills of Lading Act, s. 1, Appendix of Statutes, post, p. 322, and s. 19 (2) of this Act, ante, p. 136. (c) Feise v. Wray (1802), 3 East, 93; Hawkes v. Dunn (1831), 1 Tyrwh. 413; and cases collected in Benj. p. 844, note (d). (d) Jenkyns v. Usborne (1844), 7 M. & G. 678. (e) Kinloch v. Craig (1790), 3 T. R. 119, 783; Newsom v. Thornton (1805), 6 East, 17; Benj. p. 847. (f) Siffken v. Wray (1805), 6 East, 371. (g) Imperial Bank v. The London and St. Katharine Dock Co. (1877), 5 Ch. D. 195; note that this was a case of seller's lien, and not of stoppage in transitu. S. 38 (2). Unpaid him a quantity of wax. A. buys the wax on his own credit and ships it in B.'s name. B. becomes insolvent during the transit. A. may stop the goods. Feise v. Wray (1802), 3 East, 93. 3. B. agrees to buy of A. a number of sacks of beans forming part of a cargo. Before the arrival of the ship B. resells the beans on credit to C. C. becomes insolvent before paying for the goods. B. can stop the goods in transitu, though his interest in them was not at the time a right of property. Jenkyns v. Usborne (1844), 7 M. & G. 678. 4. B., a broker, buys goods of A. for C., an undisclosed principal, and thereby by trade custom becomes liable to A., on C.'s default, for the price of the goods. C. stops payment. B., having paid A., is entitled, as C.'s surety, to exercise A.'s lien as unpaid seller. Imperial Bank v. London and St. Kath. Dock Co. (1877), 5 Ch. D. 195. 39.-(1.) Subject to the provisions of this Act, seller's rights. and of any statute in that behalf, notwithstanding that the property in the goods may have passed to the buyer, the unpaid seller of goods, as such, has by implication of law S. 39 (1). (a) A lien on the goods or right to retain them for the price while he is in possession of them; (b) In case of the insolvency of the buyer, a right of stopping the goods in transitu after he has parted with the possession of them; (c) A right of re-sale as limited by this Act. Subject to the provisions of this Act.-See ss. 41-47, post. For the effect on the lien, &c., of a re-sale or pledge by the buyer, see s. 25 (2). Any statute in that behalf.-See the Bills of Lading Act (18 & 19 Vict. c. 11), and the Factors Act, 1889, ss. 8-—10, which are in pari materiá. (See Appendix of Statutes, post.) Notwithstanding that the property in the goods may have passed. As to the time when the property passes, see ss. 16-19, ante. By English law, which herein differs from the civil law, a sale of specific goods, usually called a "bargain and sale," and now under s. 62 (1) included in the term "sale," transfers the property in the goods to the buyer without delivery. The buyer, having the legal property in the goods, is prima facie entitled to the possession of them. But his right to possession is only a prima facie one, because the law presumes that, in the absence of a contrary intention, the seller does not intend to part with the possession of the goods until the buyer has paid the price-this is the |