unpaid seller's right of lien under clause (a); and further, when the seller has parted with the possession, the law allows him, upon the buyer's insolvency, to retake possession, and restores him to his original position-this is the unpaid seller's right of stoppage in transitu under clause (b). The property in the goods, therefore, passes to the buyer subject to these rights of the unpaid seller. Both rights over the goods sold seem to owe their origin to the custom of merchants, and were afterwards engrafted thence on the common law (h). The unpaid seller.-Defined in the previous section. By implication of law. The rights of the unpaid seller arise, not from the agreement of the parties, but from the presumption of law as to the intention of the parties in the absence of express agreement. This presumption may, of course, be rebutted under s. 55, or the seller may be estopped from exercising his rights under s. 47. Lord Blackburn shows that, applying the ordinary rule of construction applicable to contracts, the seller's rights would be far more limited than those the law implies. "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" (i). S. 39 (1). A lien.... for the price.-The nature and extent of the unpaid S. 39 (1) (a) seller's rights over the goods while remaining in his possession have never been precisely defined at common law. It seems clear from the decided cases that his rights were regarded as exceeding a lien, or mere personal right of retaining possession of the goods, which would not enable him to re-sell and confer a good title upon a second purchaser. It is also equally clear that his rights did not amount to the right to resume his original ownership, or, in other words, to rescind the contract of sale (j). Lord Blackburn, who fully discusses the question (k), says :"The precise extent of the vendor's right between those limits (h) Blackb. p. 453; per Lord Abinger in Gibson V. Carruthers (1841), 8 M. & W. at p. 337; and per Bowen, L.J., in Kendal v. Marshall (1883), 11 Q. B. D. at p. 368. The seller's lien is first recognized in a case in the Year Book (17 Ed. 4, fo. 1, 2), anno 1478; and the right of stoppage in transitu (j) See s. 48 (1), post, and notes (k) Treatise on Sale, pp. 445 et. seq. S. 39 (1) (a). 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 vendor as entitled in all cases to hold the goods as a security for the price, with a power of re-sale 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" (7). By this section of the Act these rights of the seller in possession are expressly defined to be (1) a lien (m) [sub-s. 1 (a)], and (2) a right of re-sale, as limited by the Act [sub-s. 1 (c)], i. e., subject to the provisions of s. 48 (3), post. The clause, in effect, embodies the doctrine stated by Lord Blackburn in the above-cited passage, as being one which does little violence to the decided cases, but which is not laid down in any of them. The leading case on the subject is Bloxam v. Sanders (n). The law was stated by Bayley, J., in these terms with regard to clause (a):-"The seller's right in respect of the price is not a mere lien which he will forfeit if he parts with the possession, but grows out of his original ownership and dominion, and payment or a tender of the price is a condition precedent on the buyer's part; and until he makes such payment or tender he has no right to the possession. If goods are sold upon credit, and nothing is agreed upon as to the time of delivering the goods, the buyer is immediately entitled to the possession, and the right of possession and the right of property vest at once in him (o); but his right of possession is not absolute—it is liable to be defeated if he becomes insolvent before he obtains possession" (p). The learned judge further goes on to state the law under clause (b):—“If the seller have despatched the goods to the buyer, and insolvency occur, he has a right, in virtue of his original ownership, to stop them in transitu (q). Why? Because the property is vested in the buyer so as to subject him to the risk of any accident; but he has not an indefeasible right to the possession, and his insolvency, without payment of the price, defeats that right. The buyer, or those who stand in his place, may still obtain the right of possession if they will pay or tender (2) p. 446. (m) The additional words, "or right to retain," were inserted when the Act was extended to Scotland, though by s. 62 "lien" in Scotland includes "right of retention." As to the "right of retention " in Scotch law, see Benj. p. 384. (n) (1825), 4 B. & C. 941. (0) See 8. 41 (1) (a). (p) See s. 41 (1) (c). the price (r), or they may still act on their right of property if S. 39 (1) (a). anything unwarrantable is done to that right." transitu dis The distinction between the seller's lien and his right of Lien and stoppage in transitu may be stated shortly as follows:-Lien is stoppage in the right to retain possession of goods sold until payment of tinguished. the price. It attaches either when the buyer is solvent, but in default, or when the buyer is insolvent, and whether he be in default or not. Stoppage in transitu is the right to retake possession of goods which have left the seller's possession, but have not yet reached the possession of the buyer. It only arises on the buyer's insolvency. When the right of stoppage in transitu arises, the lien has been lost; when the right of stoppage in transitu has been exercised, the lien is restored; the effect of the stoppage being to replace the seller in the position in which he stood before he parted with the possession, and entitle him to retain the goods until payment of the price (s). As to the different effect produced by the transfer of a bill of lading upon the seller's lien, and his right of stoppage in transitu respectively, see post, p. 260. "A lien in general may be defined to be a right of retaining property until a debt due to the person retaining it has been satisfied; and as the rule of law is that, in a sale of goods, where nothing is specified as to delivery or payment, the vendor has the right to retain the goods until payment of the price, he has in all cases at least a lien, unless he has waived it” (t). "But this lien extends only to the price. If by reason of the vendor's default the goods are kept in warehouse, or other charges are incurred in detaining them, the lien does not extend to such claim, and the seller's remedy, if any, is personal against the buyer" (u). This personal right of the seller is now given by s. 37, ante, p. 208. Lien is considered in ss. 41, 42, 47; its duration in s. 43; and its effect on the contract in s. 48 (1). While he is in possession.-As to possession, see notes to s. 41 (2), post, p. 222; and the analogous case of an engineer's lien on a possession prima facie not absolutely exclusive, Ex parte Willoughby (v). (r) S. 44. (s) See per Parke, B., in Wentworth v. Outhwaite (1842), 10 M. & W. 436. (t) Benj. p. 807, citing Hammonds v. Barclay (1802), 2 East, 227; Miles v. Gorton (1834), 2 C. & M. 504. (u) Benj. p. 807, quoting Somes v. S. 39 (1)(b). S. 39 (1) (c). S. 39 (2). A right of stopping the goods in transitu.-Stoppage in transitu is defined and considered in ss. 44-48, post. In case of the insolvency of the buyer.-As to insolvency, see s. 62 (3), and notes to s. 44, post, p. 235. A right of re-sale.--Re-sale is treated in s. 48. (2.) Where the property in goods has not passed to the buyer, the unpaid seller has, in addition to his other remedies, a right of withholding delivery similar to and co-extensive with his rights of lien and stoppage in transitu where the property has passed to the buyer. Lien and stoppage in transitu presuppose that the property in the goods has passed to the buyer-that there has been a sale of the goods. Under an "agreement to sell," or an executory contract of sale where the property has not passed to the buyer, the seller is entitled to exercise an analogous right of withholding delivery (w). This clause is merely declaratory of the previous law (x). It is well-settled law that under an agreement to sell, when the goods are to be delivered by instalments, the seller may, on the buyer's insolvency, and although he may have given credit, withhold delivery, or further delivery, until the price of all the goods unpaid for is tendered to him (y). The seller has the further right of repudiating the contract if the buyer, or his trustee in bankruptcy, does not, within a reasonable time, tender the price of the goods in cash (z). See notes to s. 31 (2), ante, p. 197. In all the cases cited in the notes, infra, the buyer had become insolvent; but it is clear that, according to the wording of this sub-section, the seller may exercise the right of withholding delivery where the buyer is solvent, but in default. In addition to his other remedies.-I.e., an action for damages for non-acceptance under s. 50; and, where the payment of the price is by agreement independent of the passing of the property, an action for the price under s. 49 (2). (w) Cf. the "right of retention B. 941; 20 L. J. Q. B. 380; Griffiths in Scotland, as stated in Benj. p. 384. v. Perry, supra ; 28 L. J. Q. B. 204; (x) See Griffiths v. Perry (1859), Ex parte Chalmers, supra; Bellamy E. & E. 680; 28 L. J. Q. B. 204; v. Davey, [1891] 3 Ch. 540, Ex parte Chalmers (1873), 8 Ch. Ap. 289; Benj. p. 772. (y) Valpy v. Oakeley (1851), 16 Q. (2) Ex parte Chalmers, supra; Morgan v. Bain (1874), L. R. 10 C. P.15; Ez parte Stapleton (1879), 10 Ch. D. 586. ILLUSTRATION. A. agrees to sell to B. 330 tons of bleaching powder, deliverable 30 tons a month for eleven months, payment to be by cash fourteen days after each delivery. The deliveries for ten months are made, and nine of them paid for. A. may withhold delivery of the last instalment until the price of that and the previous delivery is tendered to him, A. being to that extent an unpaid seller. Ex parte Chalmers (1873), 8 Ch. Ap. 289. S. 39 (2). by seller in 40. In Scotland a seller of goods may attach the Attachment same while in his own hands or possession by arrest- Scotland. ment or poinding; and such arrestment or poinding shall have the same operation and effect in a competition or otherwise as an arrestment or poinding by a third party. This section reproduces s. 3 of 19 & 20 Vict. c. 60, the Mercantile Law Amendment (Scotland) Act (a), which is repealed by this Act (b). As to the nature of "arrestment" and "poinding," see 2 Bell's Comm., 7th ed., pp. 54 et seq. Unpaid Seller's Lien. 41.-(1.) Subject to the provisions of this Act, the Seller's lien. unpaid seller of goods who is in possession of them is entitled to retain possession of them until payment or tender of the price in the following cases, namely: (a) Where the goods have been sold without any stipulation as to credit; (b) Where the goods have been sold on credit, but the term of credit has expired; (c) Where the buyer becomes insolvent. (2.) The seller may exercise his right of lien notwithstanding that he is in possession of the goods as agent or bailee or custodier for the buyer. Subject to the provisions of this Act.-I. e., s. 39, ante; s. 42, (a) See Wyper v. Harveys (1861), 23 C. of S. Cas. 606. (b) See Schedule of repealed enactments at the end of the Act. S. 41 (1). |