without fraud, the stoppage in transitu is defeated. A sale upon invoice only, or upon a bill of lading only, would not be sufficient. But both complete the sale, the invoice proving that there is a direct sale, the bill of lading giving the title to receive them. There must, however, be no fraud, and it will rest with the tribunal to guard against any abuse of good faith. That the stoppage in transitu may be exercised, the goods must be identically the same as those which were sold, and they must not have suffered any change, either in their nature or quality, at least by any human operation. In all cases where the seller may stop in transitu, the assignees of the bankrupt have the power to keep the goods by paying the original price of sale to the seller (a). in transitu. United States.-This right is that which the vendor, when Vendor's right of he sells goods on credit to another, has of resuming the pos- stoppage session of the goods, while they are in the hands of a carrier or middleman, in their transit to the consignee or vendee, and before they arrive into his actual possession, or to the destination which he has appointed for them, on his becoming bankrupt or insolvent. The right exists only as between the vendor and vendee; and as the property is vested in the vendee by the contract of sale, it can be revested in the vendor during its transitus to the vendee, under the existence of the above circumstances. This right of stoppage enables the vendor to resume the goods before the vendee has acquired possession, and to retain them until the price be paid or tendered. If the price be paid or tendered, he cannot stop or retain the goods for money due on other accounts. The right of stoppage does not proceed upon the ground of rescinding the contract, but as a case of equitable lien. It assumes its existence and continuance; and in consequence of that principle, the vendee or his assignees may recover the goods on payment of the price; and the vendor may sue for and recover the price, notwithstanding he had actually stopped the goods in transitu, provided he is ready to deliver them upon payment. If he has been paid in part he may stop the goods for the balance due to him, and the part payment only diminishes the lien pro tanto on the goods. detained. There must be actual payment of the whole price before the right to stop in transitu, in case of failure of the (a) Pardessus, Droit Commercial, vol. iii. p. 521. Persons en- Matters which allow or defeat the right. vendee, ceases. Though a bill of exchange has been accepted by the vendor for the price, and endorsed over by him to a third person, even that will not take away the right; and if the bill be proved under a commission of bankruptcy against the vendee, it will only be considered a payment to the extent of the dividend. The right to stop in transitu is paramount to any lien of a third party against the purchaser. 1. The right extends to every case in which the consignor is the vendor, and it does not extend to a mere surety for the price, nor to any person who does not stand in the character of vendor or consignor, and rest his claim upon a proprietor's right. As between principal and factor the right does not exist; but a factor or agent who purchases goods for his principal, and makes himself liable to the original vendor, is so far considered in the light of a vendor, as to be entitled to stop the goods. So a principal who consigns goods to his factor upon credit is entitled to stop them if the factor become insolvent, and a person who consigns goods to another to be sold on joint account, is likewise to be considered in the character of a vendor entitled to exercise this right. The vendor's right is so strongly maintained, that while the goods are on transit, and the insolvency of the vendee occurs, the vendor may take them by any means not criminal; yet the validity of the right depends on the insolvency of the vendee. It is not requisite that he should obtain actual possession of the goods before they come to the hands of the vendee; nor is there any specified form requisite for the stoppage of goods in transitu, though it is well settled that the bankruptcy of the buyer is not of itself tantamount to a stoppage in transitu. But a demand of the goods of a carrier, or notice to him to stop the goods, or an assertion of the vendor's right, by an entry of the goods at the custom-house, or a claim and endeavour to get possession, is equivalent to an actual stoppage of the goods. 2. The transitus of the goods, and consequently, the right of stoppage, is determined by actual delivery to the vendee, or by circumstances which are equivalent to actual delivery. There are cases in which a constructive delivery will, and others in which it will not, destroy the right. The delivery to a carrier or packer, to and for the use of the vendee, or to a wharfinger, is a constructive delivery to the vendee; but it is not sufficient to defeat this right, even though the carrier be appointed by the vendee. It will continue until the place of delivery be in fact the end of the journey of the goods, and they have arrived to the possession or under the direction of the vendee himself. If they have arrived at the warehouse of the packer used by the buyer as his own, or they are landed at the wharf where the goods of the vendee were usually landed and kept, the transitus is at an end, and the right of the vendor extinguished. The delivery to the master of a general ship, or of one chartered by the consignee, is a delivery to the vendee or consignee, but still subject to this right of stoppage, which has been termed a species of jus postliminii. And yet if the consignee had hired a ship for a term of years, and the goods were put on board to be sent by him on a mercantile adventure, the delivery would be absolute, as much as a delivery into warehouses belonging to him, and it would bar the right of stoppage. The transitus is at an end if the goods have arrived at an intermediate place, where they are placed under the orders of the vendee, and are to remain stationary until they receive his directions to put them again in motion for some new and ulterior destination. If the delivery to a carrier or agent of the vendee be for the purpose of conveyance to the vendee, the right of stoppage continues notwithstanding such a constructive delivery to the vendee; but if the goods be delivered to the carrier or agent for safe custody, or for disposal on the part of the vendee, and the middleman is, by agreement, converted into a special agent for the buyer, the transit or passage of the goods terminates, and with it the right of stoppage. So a complete delivery of part of an entire parcel or cargo, with intention to take the whole, terminates the transitus, and the vendor cannot stop the remainder. A delivery of the key of the vendor's warehouse to the purchaser, or paying the vendor rent for the goods left in his warehouse, or lodging an order from the vendor for delivery with the keeper of the warehouse; or delivering to the vendee a bill of parcels with an order on the storekeeper for the delivery of the goods; or demanding and marking the goods by the agent of the vendee, at the inn where they had arrived at the end of the journey; or suffering the goods to be marked and resold, and marked again by the under-purchaser, have all been held to amount to acts of delivery, sufficient to take away the vendor's lien, or right of stoppage in transitu. On the other hand, if the delivery be not completed, and some other act remains to be done by the consignor, the right of stoppage is not gone. If the vendee intercepts the goods on their passage to him, and takes possession as owner, the delivery is complete, and the right of stoppage is gone; but if the goods have arrived at the port of delivery, and are lodged in a public warehouse, for default of payment of the duties, they are not deemed to have come to the possession of the vendee, so as to deprive the consignor of his right. 3. A resale of the goods by the vendee does not of itself, and without other circumstances, destroy the vendor's right of stoppage in transitu. But if the vendor has given to the vendee documents sufficient to transfer the property, and the vendee, upon the strength of them, sells the goods to a bond fide purchaser without notice, the vendor would be divested of his right. The delivery of the bill of lading transfers the property to the consignee, and the assignment of it by the consignee by way of sale or mortgage, will pass the property, though no actual delivery of the goods be made, provided they were then at sea. As a general rule, no agreement made between the consignee and his assignee can defeat or affect this right of the consignor; and the consignor's right to stop in transitu is prior and paramount to the carrier's right to retain as against the consignee. A factor having only authority to sell, and not to pledge the goods of his principal, cannot divest the consignor of the right to stop the goods in transitu, by endorsing or delivering over the bill of lading as a pledge, any more than he could by delivery of the goods themselves by way of pledge; and it is the same thing whether the endorsee was or was not ignorant that he acted as a factor. If the assignee of the bill of lading has notice of such circumstances as render the bill of lading not fairly and honestly assignable, the right of stoppage as against the assignee is not gone; and any collusion or fraud between the consignee and his assignee will, of course, enable the consignor to assert his right. But the mere fact that the assignee has notice that the consignor is not paid, does not seem to be of itself absolutely sufficient to render the assignment defeasible by the stopping of the cargo in its transit, if the case be other wise clear of all circumstance of fraud; though, if the assignee be aware that the consignee is unable to pay, then the assignment will be deemed fraudulent, as against the rights of the consignor. The buyer, if he finds himself unable to pay for the goods, may, before delivery, rescind the contract with the assent of the seller. But this right of the buyer of rejecting the goods, subsists only while the goods are in transitu. After actual delivery, the goods become identified with his property, and cannot, in contemplation of bankruptcy, be restored to the seller; nor can he interfere and reject the goods though in their transit after an act of bankruptcy committed, for this would be to give a preference among creditors (a). SECTION VII. SALES BY AUCTION. BRITISH LAW. A sale by auction is a sale where goods are offered and sold Definition. to the highest bidder. The old Acts relating to the duty on auctioneers' licences defined an auction to be a sale of any estate, goods, or effects whatsoever by outcry, knocking down of hammer, by candle, by lot, by parcel, or by any other mode of sale at auction, or whereby the highest bidder is deemed to be the purchaser (b). auctioneer. An auctioneer is the person by whom such sale is conducted, Who is an and whose duty it is to state the conditions of sale, to declare the respective biddings, and to terminate the sale by knocking down the thing sold to the highest bidder. Every auctioneer must take out a licence, renewable annually on the 5th July, for which he is charged £10. An auctioneer is a commissioned agent employed to sell or purchase any kind of property at public auctions, and he may act as such without any written authority, though it is very desirable that the authority should be written, as it would otherwise be difficult to prove the existence of it. It is usual in sales by auction to have the conditions upon which the sales are to be effected in writing, and printed, and (a) Kent's Comment. vol. 2, p. 714. (b) 19 Geo. 3, c. 56, s. 3; 42 Geo. 3, c. 93, s. 14. Conditions of sale should be written or printed. |