We deem this question, of the origin of the law of stoppage in transitu, as one which should be clearly determined, for whether it is a lien, or a right of rescission, is not merely a technical question, but it involves consequences of the utmost importance.

SECTION II.

THAT THIS RIGHT IS BUT AN EXTENSION OF THE LIEN OF THE

SELLER.

If a seller, who stops the goods which he has sold, in their transit to the buyer, thereby rescinds the sale, or annuls it, the goods, which, by the sale, became the property of the buyer, by this annulling of the sale, cease to be his property and become again the property of the seller. In other words, the rights and obligations of the parties are the same as if there had never been any sale. Of course the buyer cannot tender the price and take the goods unless the seller chooses to resell them to him. And the seller has his goods but no further claim against the buyer for any deficit in the price. Nor need the seller wait any time, or give any notice, or do any act to complete his title; but may sell the goods at once, to whom he will, as freely as if they had never been sold by him. And if they sell for more than their price, the profit remains with the seller, who sells them as his own.

A totally different state of things is produced by a stoppage in transitu, if that stoppage be only the exercise of a lien by the

whatever it may be called, was unknown to the law," and declares that it is founded wholly on equitable principles. Although this right thus appears to have originated in equity, it is now said that equity will not enforce it. See Goodhart v. Lowe, 2 Jacob & W. 349. It was held in this case that the court would not prevent by injunction the sailing of a ship which had the consignor's goods on board, to enable him to resume possession of them, but would leave him to his remedy at law. And in Meletopulo v. Ranking, 6 Jur. 1095, 1 N. Y. Legal Observer, 299, Lord Chancellor Lyndhurst intimated that a trial by jury was the proper remedy. In this country, in some of the states, the courts of chancery exercise jurisdiction over stoppage in transitu. Ford v. Sproule, 2 A. K. Marsh. 528; Hause v. Judson, 4 Dana, 7; Secomb v. Nutt, 14 B. Mon. 324; Parker v. M'Iver, 1 Des. 274. See also, Conyers v. Ennis, 2 Mason, 236.

seller, upon the goods of the buyer, for the price of the goods. Then the goods are in the hands of the seller as a security for a debt due to him from the buyer who owns the goods. It will follow, first, that the buyer or his assigns, by paying whatever is due upon the goods, discharges the lien and destroys the seller's right of possession. Next, that the seller can treat the goods only as if they were pledged to him for the debt; that is to say, he must give notice to the buyer that he intends to sell them for his debt, or get a decree in equity for the sale, and give the buyer, who owns them, a reasonable opportunity of redeeming them, and, then he may sell them, but still as the buyer's property; and finally, if the proceeds are more than sufficient to pay the debt and charges, the balance must be returned to the buyer; and if they are not sufficient to pay the debt, the buyer still owes for the balance, and if he has gone into bankruptcy, the seller may come in for a dividend on his balance.

These differences are admitted; and our notes will show, conclusively we think, that the latter supposition, or that of a lien. by the seller on the goods of the buyer for their price, is the American theory of stoppage in transitu. And there are cases in England, which not only assert this in the broadest terms,1 but others in which principles drawn from this theory are applied.2 Thus a mere surety for the price cannot stop the goods,3

*

1 As Buller, J., in Lickbarrow v. Mason, cited in the previous note.

2 This question was discussed in Clay v. Harrison, 10 B. & C. 99, but was not decided. See Stephens v. Wilkinson, 2 B. & Ad. 320. The authorities are strongly in favor of holding the right of the vendor to stop the goods as an extension of the common law lien for the price, or, as Lord Kenyon observed, in Hodgson v. Loy, 7 T. R. 445, as "a kind of equitable lien adopted by the law, for the purposes of substantial justice." The history and character of this right were much discussed in Lord Abinger's opinion in Gibson v. Carruthers, 8 M. & W. 321. See also, Wentworth v. Outhwaite, 10 M. & W. 436. In the following cases in England this right has been considered as an equitable lien, and not a rescission of the contract. Gwynne, Ex parte, 12 Ves. 379; Martindale v. Smith, 1 Q. B. 389. See also, Wilmshurst v. Bowker, 5 Bing. N. C. 541, 7 Man. & G. 882; Bloxam v. Sanders, 4 B. & C. 941; Edwards v. Brewer, 2 M. & W. 375; James v. Griffin, id. 632. In this country the right is universally considered as an extension of the common law lien. Hunn v. Bowne, 2 Caines, 38, 42; Rowley v. Bigelow, 12 Pick. 307, 313; Stanton v. Eager, 16 id. 467, 475; Newhall v. Vargas, 13 Maine, 93, 15 id. 314; Rogers v. Thomas, 20 Conn. 53; Jordan v. James, 5 Ohio, 88. The vendee, or his assignees, may recover the goods, on payment of the price, and the

3 Siffken v. Wray, 6 East, 371.

because the lien exists only between vendor and vendee. And only a consignor who is actually, or virtually and substantially, a vendor, can exercise it. A principal who consigns goods to his factor may certainly stop them on hearing of his factor's insolvency; 2 but so he may generally without the insolvency of the factor, on the common principles of agency. And we should apply the same principles, or analogous ones, to the case of one remitting money for a particular purpose and stopping it on the way, rather than the technical right of stoppage in transitu.3

Hence, also, from this supposition of a lien, if the consignor sends the goods for a precedent debt he cannot stop them; for this debt, as it were, pays the price for the goods, and there can be no lien. But an unadjusted state of accounts and an uncertainty as to the balance will not prevent a stoppage; 5 nor will the acceptance of negotiable paper, unless where that is deemed payment, even if it be indorsed over; and if such a bill be proved before commissioners of insolvency, the dividend paid

vendor may sue for and recover the price, notwithstanding he had actually stopped the goods in transitu, provided he be ready to deliver them upon payment of the price. If he has been paid in part, he may stop the goods for the balance due him, and the part payment only diminishes the lien pro tanto on the goods detained. Kymer v. Suwercropp, 1 Camp. 109; Newhall v. Vargas, 13 Maine, 93, 15 id. 314.

1 Thus, if a trader in one country should send an order to his correspondent in another country to procure and ship him certain goods, which the latter should procure on his own credit, without naming the principal, and ship them to him at the original price, adding only his commission, he would be as to give him the right of stoppage in transitu. v. Vargas, 13 Maine, 93. See also, Ilsley v. Tucker v. Humphrey, 4 Bing. 516.

2 Kinloch v. Craig, 3 T. R. 119, 783.

considered as a vendor so far, at least, Feise v. Wray, 3 East, 93; Newhall Stubbs, 9 Mass. 65, per Sewall, J.;

Smith v. Bowles, 2 Esp. 578. Aliter, where it is a general remittance from a debtor to his creditor on account of his debt.

4 Haille v. Smith, 1 B. & P. 563; Smith v. Bowles, 2 Esp. 578; Vertue v. Jewell, 4 Camp. 31; Clark v. Mauran, 3 Paige, 373; Wood v. Roach, 1 Yeates, 177, 2 Dall. 180; Summeril v. Elder, 1 Binn. 106. See also, Anderson v. Clark, 2 Bing. 20; Evans v. Nichol, 4 Scott, N. R. 43.

5 Wood v. Jones, 7 Dowl. & Ry. 126. In this case a merchant in England sent goods of a given value to a merchant at Quebec for sale on his account. Before the goods were sold or the proceeds ascertained, the latter shipped three cargoes of timber to the former, to credit in his account. Two of them arrived. Against the third the consignor drew a bill for the amount, while it was in transitu. In the interval the consignee dishonored the bill, and became insolvent. Held, that the consignor had a perfect right of stoppage in transitu, and was not bound to wait until the mutual accounts between him and the consignee were finally adjusted.

on it will be considered only as so much paid towards the price of the goods, even though the bill is not yet mature.1 Nor will the actual receipt of part payment; 2 for neither of these would destroy the lien of the seller. And if there be a part payment and the seller afterwards stops the goods in transitu, the buyer cannot recover back the part payment, as he might do if the stoppage in transitu were a rescission of the sale.3

SECTION III.

WHEN THIS RIGHT MAY BE EXERCISED.

A. Of the Constructive Possession of the Seller.

While the seller retains actual possession of the goods, the ancient rule of lien makes them his security. When the buyer takes them into his actual possession, all lien of the seller is at an end. The stoppage must, therefore, be only while the goods are in transitu;5 and that is when they are not in the actual possession of either. But in the application of the rule the law

1 Feise v. Wray, 3 East, 93; Jenkyns v. Usborne, 7 Man. & G. 678; Newhall v. Vargas, 13 Maine, 93; Bell v. Moss, 5 Whart. 189; Donath v. Broomhead, 7 Barr, 301. It has been said that the consignor need not tender back the bill. Edwards v. Brewer, 2 M. & W. 375; Hays v. Mouille, 14 Penn. State, 48.

2 Hodgson v. Loy, 7 T. R. 440; Newhall v. Vargas, 13 Maine, 93. 8 Newhall v. Vargas, 13 Maine, 93.

In M'Ewan v. Smith, 2 H. L. Cases, 309, Lord Campbell, speaking of the case where the vendor had not parted with the possession, said: "Several of the judges in the court below discussed at great length the question of stoppage in transitu. That doctrine appears to me to have no more bearing on this case than the doctrine of contingent remainders." It was held, in this case, that the vendor, not having parted with the possession, had a right to retain the goods. See also, Parks v. Hall, 2 Pick. 206, 212; Gibson v. Carruthers, 8 M. & W. 321; Miles v. Gorton, 2 Cromp. & M. 504.

5 Wood v. Yeatman, 15 B. Mon. 270; Warren v. Sproule, 2 A. K. Marsh. 528, 536. In Conyers v. Ennis, 2 Mason, 236, before Mr. Justice Story, it was urged that the right of the consignor to stop property, in cases of insolvency, ought not to be confined to stoppage in transitu, but should, in equity, extend to all cases, where the property is not paid for, and remains in the hands of the consignee. But that learned judge held, that the right of the consignor was gone as soon as the goods reached the consignee, and that equity could not relieve the seller.

goes somewhat further, and inquires, also, into the constructive possession of the goods. For they may be in the actual possession of the seller, and yet so far, constructively, in the possession of the buyer, that the seller cannot stop or retain them. Or they may be in the actual possession of the buyer, but under such circumstances that the seller's right of stoppage is not taken away. It becomes, therefore, very important to ascertain when the transit, so far as this right is concerned, ceases.

We will consider this question under the different heads of goods warehoused, goods in the hands of a carrier, goods on board of a ship, and goods transferred by a bill of lading.

B. Of Goods Warehoused.

In general, every warehouse-man is the agent of any party who puts the goods in his warehouse and can take them out at his pleasure; and, therefore, his possession is the possession of such party. This is carried so far, that where a seller had a warehouse, and it was a part of the bargain of sale, that the goods might remain in his warehouse until the buyer took them out, without charge; and they remained there after the sale under this bargain, it was held that this actual possession of the seller was the constructive possession of the buyer, and that the seller could not stop or retain them for the price.1

On this point it is a material question whether any thing remains to be done by the seller; if nothing, this goes far to

1 Barrett v. Goddard, 3 Mason, 107. See also, Hammond v. Anderson, 4 B. & P. 69. Townley v. Crump, 4 A. & E. 58, is, however, contra. And the same rule applies a fortiori if the vendee pays warehouse rent. Hurry v. Mangles, 1 Camp. 452; Phillimore v. Barry, id. 513. In Miles v. Gorton, 2 Cromp. & M. 504, the goods, in the warehouse of the vendor, were sold under an invoice which expressed that they were to remain at rent. A bill of exchange for the price was given and negotiated, but before maturity, the vendee became bankrupt. Held, that the vendor had not lost his lien. The court said: "Here, in point of fact, the warehouse rent was not actually paid, but only charged, and such charge amounted to a notification by the seller to the purchaser that he was not to have the goods, not only until the payment of the price, but of the rent. In this case, therefore, the vendor had originally a right to hold, both for the price and the rent; and I think that the effect is not to make, as has been argued, the warehouse of the vendor the warehouse of the vendee, but to make it a part of the contract between the parties, that the goods are not to be delivered until not only the price, but the rent, is paid."