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(b) "Whole price." As to price generally, see Sects. 8 and 9. Sect. 38. A partial payment of the price has no effect on the seller's rights against the goods.

(c) "Paid or tendered." See as to legal tender COM., Sect. 8 ante, p. 41.

(d)" Negotiable instrument" for the purpose of payment must be either a bill, a promissory note, or a cheque. As to negotiation of these instruments see Bills of Exchange Act 1882,1 Sects. 31, 89, and 73. Bills of lading at common law and under the Bills of Lading Act 1855,2 and "documents of title" under the Factors Act 18893 are to a certain extent negotiable, but the nature of these documents precludes their use as a form of paySee COM., Sect. 25 ante, p. 126.

ment.

(e) "Conditional payment." At common law payment by bill is only conditional payment, unless where there is novation. If the bill is not paid at maturity it does not operate as a discharge of the counter obligation in the contract. In construing the terms of a deed or instrument, the word "payment" is not always equivalent to "payment in satisfaction and discharge.' In other words, the payment may be conditional, as in the case supposed of a bill afterwards dishonoured.

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(f) "Dishonour" of bill. See Bills of Exchange Act 1882,7 Sect. 47.

(g) "Or otherwise." The non-fulfilment of the condition may arise from the buyer's insolvency during the currency of the bill, and before actual dishonour.

(h)" Agent of the seller." The general law of principal and agent is reserved by Sect. 61 (2). The sub-section specifies two kinds of agents, viz. (1) an agent holding an indorsed bill of

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lading, and (2) an agent paying, or making himself directly

1 45 & 46 Vict. c. 61.

3 52 & 53 Vict. c. 45.

2 18 & 19 Vict. c. 111.

4 Anderson v. M'Dowal (1865), 3 Macp. 727.

5 Per Tindal, C. J., in Maillard v. The Duke of Argyle (1843), 6 M. & G. 40. But see Purnell v. Shannon (1894), 22 Ret. 74, especially opinion of Lord Adam at p. 78.

6 "The law is clear that if in payment of a debt the creditor is content to take a bill or note payable at a future day, he cannot legally commence an action on his original debt until such bill or note becomes payable and default is made in the payment; but if such bill or note is of no value, as if, for example, drawn on a person who has no effects of the drawer in his hands, and who therefore refuses to accept it, in such a case he may consider it as wastepaper, and resort to his original demand and sue the debtor."-Per Lord Kenyon in Stedman v. Gooch (1793), 1 Esp. 5.

7 45 & 46 Vict. c. 61.

8 The case of an agent, who is also indorsee of a bill of lading, receives illustration from Morison v. Gray (1824), 2 Bing. 260, and also from Sect. 1 of the Bills of Lading Act 1855 (18 & 19 Vict. c. 111).

Sect. 38.

Effect of first sub-section.

Payment by bill, etc.

responsible for, the price. But these are not meant to exhaust the cases of persons in the position of a seller, e.g. a principal consigning goods to a factor.1

COMMENTARY.

.

Part IV. of the Act (commencing with this section) sets forth certain exceptions to the rule that the buyer's right to the possession of the goods follows his right of property in them. These exceptions are based upon a breach by the buyer of his obligation to pay the price, and accordingly this section is devoted to a definition of an a definition of an "unpaid seller."

The effect of the first sub-section is that neither a partial payment, nor a conditional payment, operates to take the vendor out of the category of an unpaid seller. The whole of the price must be unconditionally paid or tendered. "When the purchaser becomes insolvent . . . the seller (notwithstanding he may have agreed to allow credit for the goods) is not bound to deliver any more goods under the contract until the price of the goods not yet delivered is tendered to him; and if a debt is due to him for goods already delivered, he is entitled to refuse to deliver any more till he is paid the debt due for those already delivered." 3

Payment by bill, note, or cheque may be absolute or conditional. It is absolute where the seller negotiates the bill without rendering himself liable, and, where the bill is that of some third person, the buyer may be free from further liability on the principle of delegation.5 In the case of a third party's bill, if the buyer's name is not attached, the seller must not only prove its dishonour, but he must show that he has used due diligence to obtain pay

1 Kinloch v. Craig (1790), 3 T.R. 119, 783; Newsom v. Thornton (1805), 6 East 17.

2 Melrose v. Hastie (1851), 13 D. 880, 14 D. 268.

3 Per Mellish, L. J., in Ex parte Chalmers (1873), L. R. 8 Ch. App. 289 at p. 291. See Blackburn, p. 326 et seq.

Bunney v. Poyntz (1833), 1 B. & Ad. 568.

5 Bell's Prin. Sect. 577. But see Anderson v. M'Dowal (1865), 3 Macp. 727.

ment and to preserve the buyer's rights against other parties Sect. 38. to the instrument.1

conditional payment.

In the ordinary case, however, and in the absence of any Usually a agreement, express or implied, to the contrary, payment by bill is conditional, and the seller's right to the price revives on the bill being dishonoured.2

The second sub-section expresses the rule established in Sub-sect. (2). regard to stoppage in transitu by Feise v. Wray 3 (1802). Feise v. Wray. The right to stop in transit is not an adjunct of lien, but is a right peculiar to the seller of goods. Hence, although many other persons have liens over goods in their possession, none but a seller can follow the goods of another after the actual custody has been lost. But among sellers are classed consignors and agents in the position of sellers. Thus in Feise v. Wray the right was held to exist in favour of an agent who had bought goods on his own credit, but on the order of a principal to whom he consigned them, and who became bankrupt during the transit.

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SELLER'S

39.-(1.) Subject to the provisions of this Act,(a) Sect. 39. and of any statute in that behalf," notwithstanding UNPAID that the property in the goods may have passed to RIGHTS. the buyer, the unpaid seller of goods, as such, has by implication of law ___

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1 Camidge v. Allenby (1827), 6 B. & C. 373; Guardians of Lichfield v. Green (1857), 1 H. & N. 884; Smith v. Mercer (1867), L. R. 3 Ex. 51.

2 Benjamin, p. 733. Gunn v. Bolckow, Vaughan, and Co. (1875), 10 Ch. App. 491; Currie v. Misa (1875), L. R. 10 Ex. 153. "It appears to be settled in England that a cheque or bill accepted, although it be not absolute payment, is conditional payment; the condition being that it shall become absolute payment when honoured, and that, on the other hand, the debt shall revive if the cheque be not honoured. I do not know that that principle has been expressed in any Scotch judgment, but I think that I ought on such a point to follow the English authorities, there being, so far as I know, nothing repugnant in our own decisions."-Per Lord Kincairney (Ordinary) in Macdougall v. M'Nab (1893), 21 Ret. 144 at p. 147. 4 Cit. sup.

3 3 East 93.

Sect. 39.

(b.) In case of the insolvency

of the buyer, a

right of stopping the goods in transitu (*) after he has parted with the possession of them;

(c.) A right of re-sale as limited by this Act." (2.) Where the property in goods has not passed to the buyer,(m) the unpaid seller (") has, in addition to his other remedies," a right of withholding delivery similar to and coextensive with his rights of lien and stoppage in transitu where the property has passed to the buyer.()

NOTES.

(a) There are various modifying provisions in the immediately following sections, e.g. Sect. 43, and the proviso attached to Sect. 47.

(b) E.g. The Factors Act 1889,1 particularly Sect. 10, which is reproduced and extended by the proviso attached to Sect. 47 of this Act. See also Bills of Lading Act 1855.2

(c) See Sects. 17 and 18.
(d) "Seller," "buyer."

seller."

Defined Sect. 38.

Defined Sect. 62 (1).

"Unpaid

(e) "Implication of law" may be negatived or varied by express agreement, course of dealing, or usage. Sect. 55. (f) "Lien." See Sects. 41 to 43.

(g) "Right to retain them." See note (o) infra and COM. infra, p. 186.

(h) "Price." See Sects. 8 and 9.

(i) "Possession", is not defined in this Act, but see Factors Act 1889, Sect. 1 (2).3 As between vendor and vendee the word possession "is used in a narrower and more restricted sense than in the general technical and legal import of the word, and yet in a more extended sense than its popular meaning. For in general, in technical language, one is said to be possessed of goods when he has the property, and an immediate right to

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have the goods dealt with as he will; yet, a purchaser on credit Sect. 39. of a specific chattel, who has the property, and whilst solvent, the right to deal with the goods as he will, though they remain in the vendor's hands, and who, therefore, in general legal language, may be called possessed of them, has never had such possession as will determine the vendor's rights in case the purchaser becomes insolvent. And yet, circumstances far short of an actual delivery into the hands of the purchaser, amount to such a constructive possession as is sufficient to render the purchaser's property indefeasible." 1

(j) "Insolvency." See Sect. 62 (3).

(k) "Stoppage in transitu." See Sects. 44 to 46. (1) "Re-sale" and its limitations.

See Sects. 47 and 48.

(m) Property not passed. See Sect. 18, Rules 2 to 5. (n) "Unpaid seller." See Sect. 38.

(o) "In addition to his other remedies." Where the property has not passed "the owner may in defiance of his contract, sell to some third person and give him a perfectly good title."2 This right is more extensive than the right of re-sale provided by this section, and expanded by Sects. 47 and 48, and it is therefore one of the "other remedies" here reserved. The seller's right where the property has not passed, is exactly the same as the right of "retention" formerly existing in Scotland in all cases before delivery. It is only where the property has not passed that the word "retention" can still be properly applied in Scotland. Where the property has passed, the seller can have no more than a "lien" as in England. See COM. infra, p. 186.

(p) "Coextensive with his rights of lien and stoppage in transitu.” But the seller, in the circumstances supposed, has also a more extensive right. See note (o) supra. It is clear that the seller can withhold delivery although the buyer is solvent, if he is in default. Further, his power to retain is not confined to the price merely, as in a case where the property has passed. He can refuse to deliver so long as any debt is due to him by the buyer.

COMMENTARY.

This section states generally the three rights of the seller against the goods, viz. lien, stoppage in transitu, and re-sale. Each of these is expanded in the following sections.

1 Blackburn on Sale, pp. 333, 334.

Blackburn on Sale, p. 244.

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