Sect. 46. Effect of "The seller," says Dr. Lushington, "exercises his right of stoppage in transitu at his own peril, and it is incumbent upon the master to give effect to a claim, as soon as he is satisfied it is made by the vendor, unless he is aware of a legal defeasance of the claim." If after notice, lawfully given, the carrier delivers to the consignee or refuses to deliver to the seller, he is guilty of a conversion of the goods. In case of real doubt he should resort to an interpleader.2 The seller has also a remedy by injunction,3 or, if the goods be in the hands of the master of a ship, by arrest of the ship.4 In a case in the Court of Appeal, Lord Bramwell doubted whether there was any obligation on the part of the principal to send on a notice of stoppage to his agent; 5 but, when the case went to the House of Lords, Lord Blackburn expressly repudiated this doubt. Though, as between seller and carrier, the expenses of stoppage and re-delivery fall on the seller, it may be that the seller would be able to prove for them against the buyer's estate. Re-sale by Buyer or Seller. 47. Subject to the provisions of this Act, the unpaid sub-sale or seller's right of lien [or retention] or stoppage in transitu pledge by buyer. is not affected by any sale, or other disposition of the goods which the buyer may have made, unless the seller has assented thereto.9 1 The Tigress (1863), 32 L. J. Adm. 97, at p. 101. 2 Ibid., at p. 102; cf. Litt v. Cowley (1816), 7 Taunt., at p. 170; Pontifex v. Midland Ry. (1877), 3 Q. B. D. 23. 3 Schotsmans v. Lancashire Railway (1867), L. R. 2 Ch. App., at p. 340. The Tigress (1863), 32 L. J. Adm., 97. 5 Ex p. Falk (1880), 14 Ch. D. 446 C. A. 7 See sect. 25 (2), ante, p. 58, buyer in possession of document of title, and Cahn v. Pockett's Bristol Channel Co. (1899), 1 Q. B., at p. 664 C. A., and see notes to sects. 9 and 10 of the Factors Act, 1889, post, pp. 136, 137. 8 As to seller's lien, see Dixon v. Yates (1833), 5 B. & Ad. 313, at p. 339; Farmeloe v. Bain (1876), 1 C. P. D. 445. As to stoppage in transitu, Craven v. Ryder (1816), 6 Taunt. 433; Ex p. Golding Davis & Co. (1880), 13 Ch. D. 628; Kemp v. Falk (1882), 7 App. Cas. 573. As to delivery orders before the Factors Act, 1877, see McEwan v. Smith (1849), 2 H. of L. Cas. 309; Blackburn on Sale, p. 302, which shows the common law effect of these documents. 9 Blackburn on Sale, p. 224; Stoveld v. Hughes (1811), 14 East. 308; Pearson v. Dawson (1858), 27 L. J. Q. B. 248; Woodley v. Coventry (1863), Provided that where a document of title to goods has been lawfully transferred to any person as buyer or owner of the goods, and that person transfers the document to a person who takes the document in good faith and for valuable consideration, then, if such lastmentioned transfer was by way of sale the unpaid seller's right of lien [or retention] or stoppage in transitu is defeated, and if such last-mentioned transfer was by way of pledge or other disposition for value, the unpaid seller's right of lien [or retention] or stoppage in transitu can only be exercised subject to the rights of the transferee. The proviso reproduces and develops sect. 10 of the Factors Act, 1889, post, p. 137, which puts all documents of title on the same footing as a bill of lading. See "document of title" and "lien," defined by sect. 62, post, pp. 116, 118. The effect of this enactment appears to be (a) to affirm the common law effect of the transfer of a bill of lading, and (b) to put all the documents of title mentioned in sect. 1 of the Factors Act, 1889, on the same footing as bills of lading. As regards bills of lading the law appears to be as follows: Sect. 47. [Cf. 52 & 53 Vict. c. 45, s. 10.] of bill of lading. (1.) That as between buyer and seller, that is to say, the immediate Transfer parties to the contract, the indorsement of the bill of lading does not affect the right of stoppage, nor does a further indorsement by the buyer affect the right unless the indorsement be for value,1 but an antecedent debt may constitute such value.2 (2.) That if the holder of the bill of lading re-sells the goods or otherwise disposes of them for value to a third person, who pays the money, such third person acquires his interest in the goods, subject to the original seller's right of stoppage in transitu, unless he gets a transfer of the bill of lading.3 32 L. J. Ex. 185; Knights v. Wiffen (1870), L. R. 5 Q. B. 660; Merchant Banking Co. v. Phoenix Bessemer Co. (1877), 5 Ch. D. 205. 1 Lickbarrow v. Mason (1793), 1 Smith, L. C., 9th ed., p. 737. 2 Leask v. Scott (1877), 2 Q. B. D. 376 C. A., dissenting from Rodger v. Comptoir d'Escompte (1869), L. R. 2 P. C. 393. 3 Kemp v. Falk (1882), 7 App. Cas. 573, see at p. 582, per Lord Blackburn. Sect. 47. (3.) That since the Bills of Lading Act, 1855, as well as before, a bill of lading may be indorsed by way of mortgage, pledge, or other security, and not by way of absolute sale.1 Where a bill of lading is so transferred, the original seller retains his right of stoppage subject to rights of the incumbrancer, and, further, he may compel the incumbrancer to resort to other goods pledged with him by his debtor, if such there be, before resorting to the goods covered by the bill of lading.2 (4.) That the right of stoppage in transitu is wholly defeated when the bill of lading is assigned absolutely for a consideration which is wholly paid.3 (5.) That when the bill of lading is transferred to a sub-purchaser absolutely and for value, but that value is wholly or in part unpaid, there is probably no longer any right to stop to the extent of the money which is unpaid. In Ex p. Golding Davis & Co., the buyer re-sold the goods and became insolvent; the bill of lading was made out in the name of the sub-purchaser but not delivered to him, and when the goods were stopped he had not paid the price. It was held, that the original seller was entitled to stop the goods for the original purchase-money. Cotton, L.J., said that the case must be decided "as if the bill of lading had been made out in the nan.e of the original purchasers and had then been assigned by them to their subpurchasers." 4 The decision was followed a few months afterwards in Ex p. Falk, and Lord Bramwell, referring to the cases where bills of lading had been pledged, said, "What difference is there in principle between the case of a man selling goods on credit for £500 and their being re-sold for £600, and the case of the purchaser pledging the goods for £600 with a right of sale by the pledgee? "5 But when Ex p. Falk was taken to the House of Lords it was found to turn on wholly different considerations. Lord Selborne seemed to doubt the rule laid down in Ex p. Golding Davis & Co., saying he assented to "the proposition that where the sub-purchasers get a good title as against the right of stoppage in transitu, there can be no stoppage 1 Sewell v. Burdick (1884), 10 App. Cas. 74. 2 Re Westzinthus (1833), 5 B. & Ad. 817; Spalding v. Ruding (1843), 12 L. J. Ch. 503; 6 Beav. 376; approved Kemp v. Falk, ante, p. 91; cf. Coventry v. Gladstone (1868), L. R. 6 Eq. 44. 3 Lickbarrow v. Mason (1793), 1 Smith, Lead. Cas., 9th ed., Leask v. Scott (1877), 2 Q. B. D. 376, C. A. p. 737; Ex p. Golding Davis & Co. (1880), 13 Ch. D. 628, at p. 637, C. A. 5 Ex p. Falk (1880), 14 Ch. D. 446, at p. 457, C. A.; Phelps v. Comber (1885), 29 Ch. D., at p. 821. in transitu as against the purchase-money payable by them to their vendor." The other lords declined to give any opinion on the point.1 As to bills of lading, see further the Bills of Lading Act, 1855, and notes thereto, post, p. 156. Sect. 47. Sale not generally rescinded 48.-(1.) Subject to the provisions of this section, a contract of sale is not rescinded by the mere exercise by an unpaid seller of his right of lien [or retention] or by lien or stoppage in transitu.2 (2.) Where an unpaid seller who has exercised his right of lien [or retention] or stoppage in transitu re-sells the goods, the buyer acquires a good title thereto as against the original buyer.3 4 (3.) Where the goods are of a perishable nature, or where the unpaid seller gives notice to the buyer of his intention to re-sell, and the buyer does not within a reasonable time pay or tender the price, the unpaid seller may re-sell the goods and recover from the original buyer damages for any loss occasioned by his breach of contract.5 (4.) Where the seller expressly reserves a right of re-sale in case the buyer should make default, and, on the buyer making default, re-sells the goods, the original 1 Kemp v. Fulk (1882), 7 App. Cas. 573, at p. 577. 2 Greaves v. Ashlin (1813), 3 Camp. 425; Martindale v. Smith (1841), 1 Q. B. 339; Wentworth v. Outhwaite (1842), 10 M. & W. 436 (Lord Abinger dissenting); Page v. Cowasjee (1866), L. R. 1 P. C., at p. 145; Schotsmans v. Lanc. & Yorks. Railway (1867), L. R. 2 Ch. App., at p. 340, per Lord Cairns; Kemp v. Falk (1882), 7 App. Cas., at p. 581, per Lord Blackburn. Milgate v. Kebble (1841), 3 M. & Gr. 100; cf. Lord v. Price (1874), L. R. 9 Ex. 54; and see sect. 8 of the Factors Act, 1889. Notes to Lickbarrow v. Mason, 1 Smith, Lead. Cas., 9th ed., p. 798; cf. Maclean v. Dunn (1828), 4 Bing. 722, at p. 728, where there had been a refusal to accept. 5 Page v. Cowasjee (1866), L. R. 1 P. C., at p. 145; Lord v. Price (1874), L. R. 9 Ex., at p. 55; Ex p. Stapleton (1879), 10 Ch. D. 586, C. A.; Indian Contract Act, 1872, § 107. stoppage Sect. 48. contract of sale is thereby rescinded, but without prejudice to any claim the seller may have for damages.1 Re-sale by seller. By sect. 62, post, p. 118, lien in Scotland includes right of retention. By sect. 56, post, p. 109, reasonable time is a question of fact. As long as the buyer is in default he is not entitled to the immediate possession of the goods, and therefore cannot maintain an action for conversion even against a wrong-doer in possession.2 In Ex p. Stapleton, it was said that when the buyer was insolvent the seller might re-sell unless the trustee or a sub-purchaser tendered the price within a reasonable time, and nothing was said about notice. But as a fact the seller in that case gave fair notice of his intention to re-sell.3 Before the Factors Act, 1877, if the seller wrongfully re-sold goods left in his possession, the original buyer could follow them into the hands of an innocent purchaser, but that Act protected the purchaser where the seller was left in possession of the documents of title, and sect. 8 of the Factors Act, 1889, now reproduced in sect. 25 (1) of this Act, protects the second purchaser if either the goods themselves or the documents of title to them are left in the seller's hands. See "unpaid seller," defined by sect. 38, ante, p. 75. Sub-sect. (3) is governed by sub-sect. (1). It only applies to an unpaid seller who has exercised his right of lien or stoppage. 1 Lamond v. Davall (1847), 9 Q. B. 1030, 16 L. J. Q. B. 136. 2 Lord v. Price (1874), L. R. 9 Ex. 54. 3 Ex p. Stapleton (1879), 10 Ch. D. 586, C. A. Langton v. Higgins (1859), 28 L. J. Ex. 252; Johnson v. Crédit Lyonnais (1877), 3 C. P. D. 32. |