"co-extensive with his rights of lien and stoppage in transitu "where the property has passed to the buyer" (a). It seems to be established, that in all three positions the right exceeds a mere lien, which would only entitle the seller to retain the goods until he had been paid for them, and would not enable him to confer any title on a third person, either by way of sale or pledge (b), that is to say, the seller's right interferes not only with the buyer's right of possession, but also with his right of property; but that the seller's right does not in any one of the cases amount to a right to resume a complete right of property, so as to devest totally the buyer's right of property; or in other words, that the seller cannot treat the contract of sale as rescinded, so as to resume his property as if the sale had never been made. The precise extent of the seller's right between those limits is very much a matter of conjecture. It would seem that, viewing it as a practical question, the most convenient doctrine would be to consider the seller as entitled in all cases to hold the goods as a security for the price, with a power of resale to be exercised, in case the delay of payment was unreasonably long, in such a manner as might be fair and reasonable under all the circumstances. If the resale was conducted by the seller in a fair and reasonable manner, the original buyer who was in default would have no right to complain; if the resale produced a sum greater than the unpaid portion of the price, the buyer would be entitled to the surplus; if there was a deficiency, he would still remain indebted to the seller for that amount. If the buyer, previously to the resale, tendered all that was due, he would be entitled to consider the resale as altogether tortious, and to maintain trover against the seller (c); but if he did not make that tender, his remedy for an abuse of the power of sale would be by an action for that abuse, and not by an action of trover. (a) See also Sale of Goods Act, s. 43. (b) Thames Iron Works Co. v. Patent Derrick Co., 29 L. J. Ch. 714; 1 John. H. 93; Scott v. Newington, 1 Moo. & Rob. 252. (c) Walter v. Smith, 5 B. & Ald. 439. The unpaid seller's rights cannot be attributed to the effect of the agreement of the parties in the contract of sale. It is true, that as the buyer's rights in the goods sold are acquired entirely under the contract of sale, he can claim no right greater than he has bargained for, so that his rights are subject to such limitations as may have been imposed by the contract. But the unpaid seller has rights of a peculiar nature, which are conferred by the law, though they are not such as on the ordinary rules of construction would be impliedly reserved by the contract, and though one of them at least (stoppage in transitu) is of a nature that could scarcely be created by the agreement of the parties. The establishment of this position is a step of some importance in ascertaining the principles on which the nature and extent of the rights depend, and it may be as well in the first place to consider at more length what the extent of the seller's rights would be if they were neither more nor less than those intended to be reserved to him by the agreement of the parties to the contract of sale, and to consider later on what are those rights of the seller which are not reserved to him by the contract. In considering this, we must of course apply to the contract of sale the ordinary legal rules of construction applicable to contracts in which each of the contracting parties undertakes to do something, sometimes called synallagmatic contracts. In construing contracts of this nature, it is always a question of importance to ascertain to what extent the undertaking of the one party is dependent on the due performance of the contract by the other. The parties may intend that the one side shall literally and completely fulfil some part of the contract, before the other side shall be bound to do any thing; and if they do so agree, it is right that they should be bound by their agreement. The consequence may be, that the party who has failed in the literal performance of his part of the contract may have incurred much expense, and conferred much benefit on the other side by a partial performance, without receiving any recompense; but if such was the intention of the parties when entering into the agreement, it is to be supposed that they took it into consideration in calculating the amount of the recompense thus made contingent. But the parties may not intend this, but that each party shall perform his part of the contract independently, so that a breach of contract by the one party shall not absolve the other from the obligation he has come under on his part. Now, in a contract of sale, the seller agrees to transfer the property and the possession of the goods to the buyer, who agrees to accept and pay for them, and what at present we propose to ask is, how far on the ordinary principles of construction the parties must be considered to intend to make the passing of the rights of property and possession dependent upon the punctual payment of the price. In general, the expressed intention of the parties to a contract decides whether the obligation on one party to perform some part of his contract, is dependent on the due performance of some part of the contract of the other side, or whether the parties are bound independently, each having a remedy by action for any breach of contract on the other side, but not being absolved from his own engagement by such a breach. But though the intention of the parties is the thing to be ascertained, yet, where the whole agreement is such as to show that the non-performance of a part of the contract may still leave the other side a benefit from the performance of the rest of the contract, the parties must express their intention very clearly, if they mean the default of the party in the performance of that part to operate as a forfeiture of all recompense for the benefit that may be conferred by the performance of the rest of the contract. The penalty may be so disproportioned to the default, that though the parties may legally enter into such an agreement, it is too unreasonable not to require very clear proof. The whole law on the subject may be found contained in the notes to Pordage v. Cole (a), and Cutter v. Powell (b), and to those the reader is referred. Tindal, C. J., said that the question whether covenants are to be held as dependent on, or independent of, each other, is to be determined by the intention and meaning of the parties as it appears by the instrument and by the application of common sense to each particular case; to which intention, when once discovered, all technical forms of expression must give way. The rule, that mutual agreements shall not be taken to be dependent, except where the terms of the contract show an intention that they are to be, and except where the non-fulfilment of the one goes to the whole consideration for the other, is material in considering how far the parties to a contract of sale can be considered as intending to reserve to the seller a right to resume the property in the things sold on default of payment. In an agreement amounting to a sale, a failure in the punctual payment of the price never can literally go to the whole consideration for the sale. The property is transferred from the moment the contract of sale is completed, and with the property the risk. The buyer therefore, during the interval between the completion of the sale and the time when he becomes in default, is liable to the risk of loss of the goods. In some cases, the value of this liability may be very large, in others very small, but in every case it must be of some value. In most cases of stoppage in transitu, the goods are stopped at the end of a sea voyage, during which they have been at the risk of the insolvent, and in those cases the risk has evidently been considerable; and Rugg v. Minett (c) is a case which shows that even on land the transfer of the property a few minutes earlier or later may be of great pecuniary value. If the parties by the terms of their agreement show an intention to make the punctual payment of the price of the essence of the contract they may do So, but it (a) Pordage v. Cole, 1 Will. Saund. 548. seems that in such cases the agreement does not amount to a sale (), and that consequently the property and risk remain with the seller. It is perfectly obvious that in addition to this liability to the risk of loss which must exist in every case of a sale, the buyer may, in particular cases, have undertaken many things besides the payment of the price, and, consequently, that the buyer, though in default as to payment, may have conferred benefit on the seller under the contract. It certainly would be a very rude sort of jurisprudence which made a delay in payment of the price amount in all cases to a complete devestment of the buyer's right of property in the goods, so as to destroy his right in future, under any circumstances, to obtain a benefit under the contract of sale. The seller sustains some damage from the default in making payment, and he is entitled to compensation from the buyer for that damage. But if the default operates as a forfeiture of the buyer's right of property, there is no necessary proportion between the damage and the compensation. The seller would benefit by being entitled to resume the property with which he had parted, but there are conceivable cases in which this benefit might be out of all proportion greater than the damage he could have sustained by the buyer's default. And the loss sustained by the buyer, by rendering his partial performance useless to him, might be an outrageously severe penalty for his default. It seems, therefore, not too much to assert, that a default in making punctual payment cannot be considered as going to the root of a whole contract of sale, or, in other words, does not amount to the whole consideration for the seller's undertaking, and, consequently, that on the ordinary rule of construction, the mutual agreements are not to be taken to be dependent, and therefore the parties cannot be considered as agreeing to give the seller a right to resume any property in the goods sold. Any right which he has to interfere with the property vested in the buyer must be founded on (a) Ante, p. 213. |