have under his vendor's lien. These remedies are stated in Dustan v. McAndrew 65 as follows: "The vendor of personal property in a suit against the vendee for not taking and paying for the property has the choice ordinarily of either one of three methods to indemnify himself: (1) He may store or retain the property for the vendee, and sue him for the entire purchase price; (2) he may sell the property, acting as the agent for this purpose of the vendee, and recover the difference between the contract price and the price obtained on such resale; or (3) he may keep the property as his own, and recover the difference between the market price, at the time and place of delivery, and the contract price."

71. Holding the goods and suing for price.While in the case of the vendor's lien, the vendor may often prefer to bring his action at law for the purchase price, holding the goods as security for the judgment obtained, the seller who has stopped the goods in transit would not ordinarily care to pursue this remedy since the buyer must always be insolvent when this right is exercised, and hence a judgment against the buyer for the purchase price would never be worth the amount of the purchase price and the seller would in consequence have no advantage by reason of his position.

72. Resale by seller.-There is never a case for the application of vendor's lien or stoppage in transitu unless title has passed to the buyer. Nevertheless, when goods are so held by the unpaid seller he

65 44 N. Y. 72.

may resell the same and pass a good title to the purchaser. In giving this right of resale, the law has gone very far beyond the remedy given in the case of other common law liens, where the only right is to hold possession in order to enforce payment, with perhaps the added right to have a proceeding similar to a foreclosure for the purpose of finally realizing on the security if the buyer fails or refuses to make payment.

73. When right of resale arises.-The seller cannot stop the goods and immediately resell them, for the vendee, or those representing him, are entitled to the goods and all that the seller can ask for is that he receive the purchase price. Therefore the goods must be held for a reasonable time, so as to give the buyer an opportunity to act. As to what constitutes a reasonable time must depend upon the situation in the particular case. This will no doubt be affected by the character and condition of the goods and their liability to deterioration, and by the conditions of the market. The Sales Act 6 has stated the law on this point as generally recognized as follows: "Where the goods are of a perishable nature,

66

* or where the buyer has been in default in the payment of the price an unreasonable time, an unpaid seller having a right of lien or having stopped the goods in transitu may resell the goods."

It is sometimes said that the seller must hold until the period of credit has expired, but this limitation seems unreasonable if applied strictly in all cases and it is generally considered that one of the condi

66 § 60 (1).

tions of giving credit is that the buyer should keep his credit good. If the period of credit is short and the goods are such as not to be materially affected by delay, these are facts of importance in determining what is a reasonable time to wait in the particular case.

So also the condition of the buyer and the nature of his default will be material. If he is very badly involved so that there is but little likelihood of his being able to redeem the goods or if he has shown that he does not intend to redeem them, the seller may sell whether the period of credit has or has not expired. It does not seem, therefore, that the seller is bound to wait until the period of credit has expired but merely that he hold the goods, giving the buyer a reasonable time within which to redeem, and that what is a reasonable time will depend not only upon the character of the goods but also upon the condition of the buyer and the terms of the contract between the parties. The seller cannot deprive the buyer of the right to get the goods merely because the buyer is in some way in default, either by reason of delay in making payment or because of temporary insolvency, but he can resell only as it is necessary in order properly to save himself from loss because of the buyer's inability to pay.

74. Notice of resale.-Though some jurisdictions have required that notice of resale be given to the buyer, most courts have not required such notice, but the right to resell is considered to be a right which the buyer must know the seller has and may exercise if he does not redeem the goods within a

*

reasonable time. The Sales Act has adopted the rule followed by the majority of courts, namely, that notice is not necessary: "It is not essential to the validity of a resale that notice of an intention to resell the goods be given by the seller to the original buyer. But the giving or failure to give such notice shall be relevant in any issue involving the question whether the buyer had been in default an unreasonable time before resale was made. It is not essential to the validity of a resale that notice of the time and place of such resale should be given by the seller to the original buyer. The seller is bound to exercise reasonable care and judgment in making a resale, and subject to this requirement may make a resale either by public or private sale."

75. Loss or profit on resale.-The exercise of the right of resale does not limit the seller to the amount only which is realized on such resale, but if the goods do not bring enough to pay the purchase price due for the goods, the seller will also have a claim against the buyer for the deficiency, and may charge to the buyer the costs and expenses of such resale.

If, however, the sale of the goods results in a profit over the purchase price due, such profit goes to the seller also. This does not seem entirely logical but is, nevertheless, the rule generally followed. The buyer has had his right to redeem the goods and thus secure any profit which might have been made, but having failed to do so, he has thrust upon the seller the burden of realizing a fair price and the possible necessity of bringing action to recover dam67 § 60 (3) (4) (5).

ages, and therefore is in no position to claim anything for his own benefit if a profit should result from the resale. By failing to redeem, the buyer does not relieve himself from liability, but he does waive any right to any profit which may result from the activities of the seller. The seller is not allowed to charge for his own services in making a resale, but, on the other hand, the buyer who has refused to pay the price or to take the goods and realize what he can on them, ought not to be allowed to profit by the sale which he has forced the seller to make, since the seller is to receive no payment for his labor nor for the bother and trouble to which he has been subjected.

The right of the seller to place any loss because of the breach of contract upon the buyer, and to keep for himself any profit which may result, has been adopted in the Sales Act. It is there provided that if the resale has been properly made by the seller, "He shall not thereafter be liable to the original buyer upon the contract to sell or for any profit made by such resale, but may recover from the buyer damages for any loss occasioned by the breach of the contract or the sale."

76. Resale as agent for the buyer. It is generally stated that in making the resale the seller is acting as the agent of the buyer, but this statement must be taken in a very qualified and limited sense. It is clear that the seller has received no special authorization from the buyer, but in fact he still has this right to resell, even though the buyer directly ob

68 § 60 (1).