If a seller gives a buyer an order upon a warehouseman for goods stored therein and afterwards learns of the buyer's insolvency, he may reclaim the goods of the warehouseman and recover them unless the buyer has already presented the order or has had the goods transferred to another. His mere endorsement and delivery of the order to another would not destroy the seller's lien.11

The Sales Act12 provides for a lien to an unpaid seller still in the possession of the goods where the goods have been sold without any stipulation as to credit, or where credit has expired, or where the buyer has become insolvent. If part of the goods have been delivered, he may exercise his lien on the remainder. He loses his lien when he delivers the goods to the buyer or to a carrier or other bailee for the buyer without reserving the property therein, or by waiving his lien.

§ 75. Right of Stoppage in Transitu. Where delivery of goods is made to a common carrier consigned to the vendee, title vests in the vendee and, therefore, the vendor surrenders his lien upon such delivery; but where the vendor ships goods to a vendee on credit, and after such delivery learns that at the time of the sale the vendee was insolvent13 or has since become insolvent, it is the right of the vendor to retake the goods if he can do so before they have reached the possession of the vendee. This restores to the vendor his right of property although the title passed to the vendee at the time of the delivery of the goods. This exceptional right given to a vendor to regain possession of goods not paid for can be exercised only when the vendee was or has become insolvent. The right is known as the right of stoppage in transitu.14

If the carrier having possession of such goods, after notice from the vendor that he reclaims them, delivers them to an insolvent vendee, he becomes thereby liable to the 11 Keeler v. Goodwin, 11 Mass. 490.

12 Uniform Sales Act, §§ 54-56.

13 McElwee v. Metropolitan Lumber Co., 69 Fed. R. 302; Loeb v. Peters, 63 Ala. 243.

14 Rowley v. Bigelow, 12 Pick. (Mass.) 313.

vendee for the price. The right of stoppage in transitu can be exercised only by the vendor or his agent.15 The action of one who stops goods in transit without authority may be ratified by the vendor.

Stoppage in transitu need not be effected by actual touching of the goods. Notice to a carrier not to deliver them will do, and the form of the notice is not material if it sufficiently conveys the seller's intention and desire to exercise his right.16 The carrier is entitled to reasonable time in which to investigate the genuineness of the notice and the authority of the person giving the notice.17

How Long Right Continues. "Stoppage in transitu is a right which the vendor of goods upon credit has to recall them, or retake them, upon the discovery of the insolvency of the vendee, before the goods have come into his possession, or any third party has acquired bona fide rights in them. It continues so long as the carrier remains in the possession and control of the goods, or until there has been an actual or constructive delivery to the vendee, or some third person has acquired a bona fide right to them. Upon demand by the vendor, while the right of stoppage in transitu continues, the carrier will become liable for a conversion of the goods, if he refuses to redeliver them to the vendor, or delivers them to the vendee.18

Goods remain in transit until they reach their destination and the carrier parts with their possession.19 If at their destination the goods are placed in a warehouse of the railroad company, the transit is at an end, unless placed there to await the payment of freight and delivery to the consignee.20

Stoppage in Transitu under Sales Act. The Sales Act provides for the right of an unpaid seller who has parted with the possession of the goods, to resume possession while 15 Durgy Cement & Umber Co. v. O'Brien, 123 Mass. 12.

16 Jones v. Earle, 37 Cal. 630.

17 Reynolds v. Boston & Maine R. R. Co., 43 N. H. 580. 18 Jones v. Earl, 37 Cal. 630.

19 Tufts v. Sylvester, 79 Me. 213; 1 Am. St. Repts. 303. 20 Gyms v. Shotten, 35 Kans. 310; 10 Pac. Repr. 828.

they are in transit, and to regain his lien, if the goods have been sold on credit and the buyer has become insolvent.

The goods are regarded as in transit from the time they are delivered to a carrier until the buyer takes delivery from the carrier. They cease to be in transit when the buyer or his agent obtains delivery of the goods at their appointed destination; or if after the arrival of the goods. at their destination the buyer is notified that the goods are held in his behalf as bailee by the carrier. The goods also cease to be in transit if the carrier or other bailee of them refuses to deliver to the buyer or his agent.

The right of stoppage in transitu is not affected by any disposition of the goods by the buyer unless with the assent of the seller. But if a negotiable document of title has been issued for the goods and such instrument has been purchased by a third person in good faith, the right of stoppage in transitu is lost, whether the instrument is bought before or after the carrier is notified by the seller to hold the goods.

The seller having exercised his right of stoppage in transitu may rescind the sale and resume the property in the goods, where the contract so provided, or where the buyer is in default an unreasonable time in payment. But the seller should give notice to the buyer or do some act manifesting an intention to rescind.

Effect of Attachment or Levy upon Right. The right of stoppage in transitu is not lost by an attachment or levy upon goods by a creditor of the vendee, although the officer may take possession of the goods.21 The right is not lost by a mere sale of the goods by the vendee to another unaccompanied by any actual or constructive possession by either. Where a buyer at the time of sale directed the seller to ship the goods to A in his, the buyer's name, as consignor, and the seller did so, it was held he could not stop the goods on the way to A, upon hearing of A's failure, for he had consented to an act of ownership by the buyer and had surrendered his lien and his right of stop21 Tufts v. Sylvester, 73 Me. 213.

page in transitu. The right of stoppage in transitu terminates when the goods have completely reached the destination intended by the parties, although they may not be in the actual possession of the vendee. The mere arrival of the goods at the town or city of the buyer, but still remaining in the hands of the carrier as carrier, does not terminate the right. In Allen v. Mercier,22 the goods were demanded of the carrier by the vendee on their arrival, but the carrier refused to deliver them unless paid for former bills against the vendee. These not being paid the carrier transported the goods back to Philadelphia, and then attached them as the property of the vendee. The vendor tendered the amount of freight due on the goods and demanded them, but the carrier declined to surrender them. It was held the vendor had a right to stop them, although they had been carried to the place of destination and were demanded by the vendee.

REMEDIES OF THE BUYER

If title to goods has passed to the buyer, and the seller refuses to deliver, the buyer may rescind the contract and regard himself as discharged; or he may treat the seller as having converted his property and sue in tort for damages based on non-delivery. If the seller at the time of the sale gave the buyer permission to enter his premises and take the goods, the vendee may do so, even though the vendor subsequently forbids him.23

Where the contract is broken by the vendor, and is one in which the property has passed to the buyer, the vendee has the rights of an owner. He has both the property in the goods and the right of possession. If he discovers the goods to be different in kind and quality from what he had a right to expect, he may refuse to accept the goods, and return them.24 If, after receiving the goods, he discovers they are not as warranted, he may accept the goods

22 1 Ashm. 103.

23 Wood v. Manley, 11 Ad. E. 34.

24 Bryant v. Isburg, 13 Gray (Mass.) 607.

and bring an action for the breach of the warranty.25 If he has not paid the price, he may set up in an action for the price by way of counter-claim, damages for breach of warranty.

If a vendee buys a horse on a warranty of soundness, and the horse proves to be unsound, the vendee may return him, and his right to do so is not affected by an accident to the horse through no fault of the buyer after the sale; and where a horse died during the time limited for his return, it was held that the seller must bear the loss. But if the buyer, by his conduct, has shown his acceptance of goods delivered to him under a warranty of quality, or has retained them a longer time than was reasonable for a trial, he will be held liable for the price.

The Sales Act26 provides that the property in the goods has passed to the buyer and the seller refuses to deliver, the buyer may bring an action for conversion of the goods and recover his damages. If the property has not passed to the buyer, and the seller wrongfully withholds the goods, the buyer may sue for damages for non-delivery, and recover the loss resulting to him from the breach.

If a contract is a divisible one, for example, where there is an order for ten thousand bushels of wheat to be delivered in ten monthly installments of a thousand bushels a month, and the vendor, after delivering five thousand bushels, notifies the vendee that he will not send any more wheat, in this case the vendee may regard himself as discharged from any further obligation, and the vendor cannot recover for any part of the contract he may have performed. In Hansbrough v. Peck,27 the court said:

"No rule in respect to the contract is better settled than this that the party who has advanced money or done an act in part performance of the enforcement and then stops short and refuses to proceed to its ultimate conclusion will not be permitted to receive back what has thus been advanced or done."

25 Lyon v. Bertram, 20 How. (U. S.) 149. 26 Uniform Sales Act, § 66.

27 5 Wall. 497.