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matter has been clearly passed on for any real conclusion to be drawn.*
-Notice of Resale.—The method of reselling, the giving of notice and the like, are governed by the same rules as apply to resale in order to fix damages in case of the buyer's refusal to accept title. These rules have already been discussed.107 In that discussion it was pointed out that one reason why the seller need not give notice of the resale was because he was reselling his own property for the purpose of getting evidence as to its market value, and lack of notice, therefore, could not affect the validity of the sale, but only the value of the evidence. In case of resale by a seller by virtue of his lien, he is selling property of another person. It might be supposed therefore that he would be required to give notice at least. In VanBrocklin v. Smeallie,108 however, the court said, -as a matter of dictum since notice had in fact been given—that, even though title had passed to the buyer, the resale “need not be at auction, unless such is the customary method of selling the sort of property in question, nor is it absolutely essential that notice of the time and place of sale should be given to the vendee.” In Pollen v. LeRoy, 109 the sale was of specific property, and the court appears to have considered that title had passed, although its real opinion upon this point is not clear. Nevertheless, it held expressly that notice of the time and place of resale need not be given the buyer, saying, “The law regards him (the seller), it has been said in some of the cases, if in possession of the goods, as the agent quoad hoc of the vendee. But it is no part of such an agency, or of the duties involved in it, to notify the principal of the time and place at which the goods are to be sold, or exposed for sale. Indeed, in a majority of cases such a notice would be entirely impracticable, as it
107-Ante, p. 90.
109-30 N. Y. 549. 108—140 N. Y. 70. *See Uniform Sales Act, Section 61, (1).
would have been in this. Unless the sale is to be public and at auction, no notice of the time and place can be given. * There is no analogy in this particular between this case and that of a pledge. The pledgee is not the owner nor the agent of the owner. He is clothed with the possession and with a right to sell the property, in order to repay himself a debt. Unless he resorts to judicial proceedings to extinguish the right of his debtor, he is bound to give notice to the latter
A vendor, on the contrary, is simply an agent, if he elect to become such, of a vendee who refuses to complete his purchase; an agent to sell the property fairly and to the best advantage. The only requisite to such a sale as a measure of the rights and the injury of the party, is good faith, including the proper observance of the usages of the particular trade."1110
In these cases there had been notice to the buyer of the seller's intention to resell, though the time, place or manner of the resale were not indicated. It is probable that this notice of intention to resell would be requisite to a resale by virtue of the lien,111 although it is not usually required in cases of resale merely to fix damages when title has not passed. 112* If notice were not given, it might be a fair assumption that the seller had elected to rescind the contract and take back title to himself, if, as we have assumed above, courts permit revesting of title to be done. That is, failure to notify the buyer of the resale would indicate that the seller had chosen to resell the goods as his own.
Stoppage in Transitu.—We have seen that a seller by delivering possession to the buyer loses his right of lien.
110—Waples & Co. v. Overaker Mooney, 16 Ind. Ap. 362; Dill v. & Co., 77 Tex. 7; accd. Ridgley v. Mumford, 19 Ind. Ap. 609; NewMooney, 16 Ind. Ap. 362.
berger v. Rountree, 18 Ill. Ap. 610; 111—Hayes v. Nashville, 80 Fed. Winslow v. Harriman Iron Co., 641; Davis Sulphur Ore Co. v. At- Tenn. —, 42 S. W. 698. lanta Co., 109 Ga. 607; Ridgley v. 112—Ante, p. 90.
*See Uniform Sales Act, Section 60, (1), (3), (4), (5), 61, (2).
There is, however, one real or apparent exception to this. If the goods have merely been given to a carrier for transportation to the buyer and are still in transit, the seller is allowed to retake possession if it develops that the buyer is apparently insolvent. This right is called “stoppage in transitu." Like the “seller's lien” the term presupposes that title has passed to the buyer. 118 A seller who has not yet passed title may retake possession from a carrier because he is owner, just as an owner may keep possession if he chooses. But it is only when the right of repossession is exercised by a seller who has parted with title that the name “stoppage in transitu” is properly applied. 114*
-Origin.—This right to retake possession appears to have originated in equity, on the principle that if a seller could prevent the goods from actually coming into the hands of a bankrupt he ought to be allowed to do so. It was soon developed also as a principle of law.116
113—Reynolds v. Rr., 43 N. H. frequently raised as any other 580; Dickman v. Williams, 50 Miss. mercantile question within the 500; Rowley v. Bigelow, 12 Pick. last hundred years, it must be (Mass.) 307; Bolton V. Lancashire, owned that the principle on which etc. Co., L. R. 1 C. P. 430, 439. it depends has never been either 114-Courts occasionally
settled or stated in a satisfactory glect the true meaning of the manner. In courts of equity it phrase and use it in connection has been a received opinion that with retaking by an owner. Swan- it was founded on some principle wick v. Sothern, 9 Ad. & El. 895; of common law. In courts of law Cf. Pattison v. Culton, 33 Ind. 240. it is just as much the practice to The distinction is acted on in call it a principle of equity, which Kearney v. Union Pac. Rr. Co., 97 the common law has adopted." Iowa 719, 59 Am. St. 434.
This opinion cites authority bear: 115—Wiseman v. Vandeputt, 2 ing upon the conflicting theories Vernon 203; Burghall v. Howard, of origin and points out, also, the 1 H. Blackstone 365 N; D’Aquila v. existence of the right in other Lambert, 1 Ambler 399, 2 Eden 77; systems of law. Gibson v. Carruthers, 8 M. & W.
That the right of stoppage orig321, “Although the question of inated neither in law nor in equity, stoppage in transitu has been as but was adopted from the Law
*See Uniform Sales Act, Section 57.
-When Right Arises.—The right of stoppage arises only when the buyer is discovered, after the shipment of the goods, to be insolvent. Since the title to the goods is in the buyer, the seller has no right to them, after he has parted with possession, save by virtue of this particular remedy. This right arose, as the expression of the early cases indicates, out of desire to protect the seller against obvious and inevitable loss, rather than from any logically derived rule of law. “It was determined, on solid reasons, that the goods of one man should not be applied in payment of another man's debts.” It extends, therefore, only to cases where the buyer is discovered, subsequent to the sale, to be insolvent. The date on which the buyer became insolvent is immaterial; it is the date on which the seller becomes aware of it that matters. The right of stoppage is not derogated by the fact that the buyer was already insolvent at the time of shipment, or even at the time the contract of sale was entered into. “If there be a want of ability to pay, it can make no difference, in justice or good sense, whether it was produced by causes, or shown by acts, at a period before or after the sale.
If the seller knew, actually or constructively, of the buyer's insolvency at the time of shipment, or, a fortiori, at the time of making the contract, there would be no reason for allowing him to stop in transitu. The fact that he shipped the goods, knowing the buyer to be insolvent, would clearly imply an intent to give the buyer possession
Merchant is stated in Kendall v.
It is obvious from the language of the early cases that some idea of title not having passed at all entered into the decision and the seller was thought of as retaking possession of his own goods, rather than retaking title, or reasserting a mere lien. But the later cases clearly recognize the
right as existing when title is in the buyer.
116-Loeh & Bro. v. Peters, 63 Ala. 243, 248; Lancaster Co. Bk. v. Huver, 114 Pa. 216; Reynolds v. Rr., 43 N. H. 580, overruling Rogers v. Thomas, 20 Conn. 53; Buckley v. Furniss, 15 Wend. (N. Y.) 137; O'Brien v. Norris, 16 Md. 122; Blum & Co. v. Marks, 21 La. An. 268; More v, Lott, 13 Nev. 376.
despite that fact, and the reason for the exception to the rule that a seller can not retake possession after title has passed, would be gone. The courts so hold.117
As will be seen later,118 the exercise of the right to stop is not a rescission of the contract but a mere withholding of actual possession of the goods. As no more effect than a delay in possession would result, the courts have been unanimous in holding that actual insolvency of the buyer is not necessary to justify the stoppage. Such an appearance of insolvency as would lead a reasonable man to suppose insolvency existed is all that is necessary. The courts appear to make a distinction, although there is no statement to such effect, between the evidence of insolvency which will support a seller's right to keep possession, (as against an attaching creditor of the buyer, for instance,) and that which will protect him against a suit in damages for delay caused by his stoppage. For the one, actual insolvency is necessary, for the other only appearance of insolvency. This may explain some of the dissimilarity in holdings upon rather similar facts. 119
But there must be a real appearance of insolvency at least and mere suspicion that the buyer is insolvent, or belief that, from other reasons than insolvency, he will not pay for the goods, will not justify a stoppage and a seller who has acted on any such reason is not entitled to possession and, moreover, will be liable in an action for damages by the buyer.120
117-O'Brien v. Norris, 16 Md. 122; Buckley v. Furniss, 15 Wend. (N. Y.) 137; Blum & Co. v Marks, 21 La. An. 268; Fenkhausen v. Fel. lows, 20 Nev. 312; Evans etc. Co. V. Missouri K. & T. Rr., 64 Mo. Ap. 305.
118—Post, p. 146.
119-O'Brien v. Norris, 16 Md. 122, "if a stoppage of payment by the vendee be proved, it is suffi. cient.” Jeffris v. Fitchburg R. R.,
93 Wis. 250, failure to pay seller's claim and disappearance of buyer sufficient; More v. Lott, 13 Nev. 376.
120-Kavanaugh Mfg. Co. V. Rosen, 132 Mich. 44, 92 N. W. 788, mere belief founded on unsatisfactory rating by a credit agency not sufficient; Jewett Pub. Co. v. Butler, 159 Mass. 517, mere doubt not enough; Bayonne Knife Co. v. Umbenhauer, 107 Ala. 496; Smith