S. 41 (1). post (lien after part delivery), and s. 55, post (effect of express agreement, course of dealing or usage). The unpaid seller.-Defined in s. 38, ante, p. 209. In possession.-As to what constitutes "possession," see notes to sub-s. 2, post, p. 222. Payment or tender.-See notes to s. 38, ante, p. 210. The seller's lien being granted to him for the purpose only of securing payment of the price, it is necessarily lost by tender thereof, even if the seller decline to receive the money (d). Entitled to retain possession. The cases specified in s. 41 (1) are all referred to in the following passage from Mr. Benjamin's work :-"When the goods have not yet left the actual possession of the seller, he has at common law at least a lien for the unpaid price, because he is always presumed to contract, unless the contrary be expressed, on the condition and understanding that he is to receive his money when he parts with his goods S. 41 (1) (a). [sub-s. (1) (a)]. But he may agree to sell on credit, that is, to give to the buyer immediate possession of the goods, and trust to his promise to pay the price in futuro. Such an agreement as this amounts plainly to a waiver of the lien (e); and if the buyer then exercises his rights, and takes away the goods, nothing is left but a personal remedy against him. But if we now suppose, that after a bargain in which the lien has thus been unequivocally waived, the buyer, for his convenience, or any other motive, has left the goods in the custody of the seller until the credit S. 41 (1) (b). has expired [sub-s. (1)(b)], and has then made default in payment or has become insolvent [sub-s. (1) (c)] before the credit has expired, What are the seller's rights? He has agreed to relinquish his lien, and the goods are not yet in transit. Does his lien revive on the ground that the waiver was conditional on the buyer's maintaining himself in good credit? Or can the seller exercise a quasi right of stoppage in transitu—a right that might, perhaps, be termed a stoppage ante-transitum?" (ƒ). The propositions contained in sub-s. (1) (b) and (c), supra, which are declaratory of the earlier law, and based upon the authorities cited in the notes (g), (h), infra, supply the answer to the question raised by Mr. Benjamin. During the currency of the credit, the seller cannot exercise his lien, except in the case of the buyer's insolvency (g), but on the expiration of the term of (d) Martindale v. Smith (1841), 1 Q. B. 389. (e) See Spartali v. Benecke (1850), 10 C. B. 212, and s. 43 (1) (c), post, p. 232. (f) Benj. p. 767. (y) Per Bayley, B., in Miles v. Gorton (1834), 2 C. & M. at p. 512. credit his lien revives, although the buyer may not then be S. 41 (1)(b). insolvent (h). The seller's right under these circumstances is, perhaps, not strictly a lien, but a right to withhold delivery analogous to that of stoppage in transitu (i). The parties may, of course, under s. 55, expressly agree that the goods, although sold on credit, are not to be delivered until paid for, and evidence of a trade usage to the same effect is admissible (j). Where the buyer becomes insolvent.-For "insolvency," see S. 41 (1) (c). the definition in s. 62 (3), and notes. The right of the seller to retain the goods on the buyer's insolvency is independent of his right to retain under the previous two clauses. Thus upon the buyer's insolvency before obtaining possession of the goods, the seller can exercise his lien (k), and when the sale is on credit, his lien revives, whether the buyer's insolvency occur before or after the expiration of the term of credit (7). right exists as well in the case of an Under s. 39 (2), the executory contract or "agreement to sell" as of a sale of specific goods. The effect of the buyer's insolvency not being to rescind the contract (m), the seller cannot refuse to deliver the goods to the buyer's trustee in bankruptcy, if the latter tender the price in cash within a reasonable time (n); and it seems that a sub-buyer from the insolvent buyer is entitled to complete the contract upon the same terms (o). It has, however, been shown in the notes to s. 31 (2), ante, p. 197, that a notice of the buyer's insolvency may be treated by the seller as an offer to rescind the contract. The seller may exercise his.... lien, notwithstanding, &c. (4) Directly decided at Nisi Prius, per Bayley, J., in New v. Swain (1828), Dans. & L. 193; and per Littledale, J., in Bunney v. Poyntz (1833), 4 B. & Ad. 568; and see per Cur. in Martindale v. Smith (1841), 1 Q. B. at p. 395; per Martin and Channell, BB., in Castle v. Sworder (1860), 5 H. & N. 281; and per Cur. in Valpy v. Oakeley (1851) 16 Q. B. 941, 951. (i) Cf. the right of retention in Scotch law. U) See Field v. Lelean (1861), 6 H. & N. 617; 30 L. J. Ex. 168. (k) Bloxam v. Sanders (1825), 4 B. & C. 941 (the leading case). (1) Grice v. Richardson (1877), 3 Ap. Ca. 319; per Parke, J., in Dixon (n) Per Cur. in Ex parte Chalmers, (0) Per Cur. in Ex parte Stapleton, supra, at p. 590. As to the trustee's right to disclaim the onerous contracts of an insolvent buyer, see s. 55 of the Bankruptcy Act, 1883. S. 41 (2). S. 41 (2). This sub-section extends the previous law as laid down in Townley v. Crump (n), and Grice v. Richardson (o), in which cases the buyer was insolvent. It was previously doubtful whether the seller retained his rights after an attornment where the buyer was only in default, and the sub-section, as originally drafted, limited the statement of the law to the case of insolvency only, according to the opinion of Blackburn, J. (p). The sub-section is now extended to include all cases. He is in possession. . . as agent or bailee... for the buyer.The Act does not define possession. The seller is in possession of goods for the purpose of exercising his lien when the goods are either in his actual custody, or are held by any other person subject to his control or on his behalf. (See the definition of possession given in s. 1 (2) of the Factors Act, Appendix of Statutes, post, p. 325.) It follows from this definition that when the seller is also a warehouseman, attornment by the seller to the buyer does not divest the seller's lien because the goods remain in the seller's actual custody. On the other hand, when the goods are in the possession of a third person as bailee, attornment by that third person to the buyer divests the seller's lien, because the third person ceases to hold the goods subject to the seller's control or on his behalf (g). It is important to note that the test of "actual receipt" by the buyer does not apply here. If the seller attorns to the buyer, i.e., consents to assume the changed character of bailee for the buyer, this constitutes an "actual receipt" of the goods by the buyer under s. 4, although it has not the effect of divesting the seller's lien. It thus forms an exception to the general rule, stated ante, p. 39, that in most cases the test for determining whether there has been an actual receipt is to inquire whether the seller has lost his lien (r). ILLUSTRATION. A. a warehouseman, as well as an importer of tea, sells to B. chests of tea then in A.'s warehouse, and hands him a delivery order which states that the tea remains at rent on B.'s behalf, and makes it transferable on B.'s indorsement, and an entry of the transfer is made in A.'s books. B. gives an acceptance for the price. B. becomes insolvent and the bill is dishonoured. A.'s lien revives. Grice v. Richardson (1877), 3 Ap. Ca. 319. S. 42. 42. Where an unpaid seller has made part delivery of the goods, he may exercise his right of Part delivery. lien or retention on the remainder, unless such part delivery has been made under such circumstances as to show an agreement to waive the lien or right of retention. Generally, a delivery of part of the goods sold is not equivalent to a delivery of the whole, so as to destroy the seller's lien. He may, if he choose, give up part and retain the rest; and then his lien will remain on the part retained in his possession for the price of the whole; but there may be circumstances sufficient to show that there was no intention to separate the part delivered from the rest, and then the delivery of part operates as a delivery of the whole and puts an end to the seller's possession, and, consequently, to his lien" (s). And with regard to the intention governing part delivery, Lord Blackburn says, in Kemp v. Falk (t), "It may very well be that the delivery of part of the goods is sufficient to afford strong evidence that it is intended as a delivery of the whole. If both parties intend it as a delivery of the whole, then it is a delivery of the whole; but if either of the parties does not intend it as a delivery of the whole, if either of them dissents, then it is not a delivery of the whole." And the burden of proof seems to lie on the party who contends for a complete delivery (u). An agreement to waive the lien.-The agreement to waive the lien (see s. 55, post) may be inferred from the circumstances in which the part delivery takes place; e.g., the buyer may express his intention, or may be in a position, to take the whole of the goods, although he actually take only a part (x); or the person taking delivery may do so in such a character,-e. g., as assignee in bankruptcy of the buyer,-as to show an intention to take constructive possession of all (y); or, possibly, such an intention may be inferred when the thing sold consists of several parts, and there is a delivery of an essential part of it (z). On the other hand, an intention to separate the part actually taken may S. 42. be inferred, as, e. g., where the delivery is to fulfil a particular sub-contract for a less quantity than the whole (a). The following points are noticeable : (1.) When the goods are in the seller's possession. It seems that a part delivery under these circumstances has never been held equivalent to a delivery of the whole of the goods (b). (2.) When the goods are in the possession of a third party. (a) As warehouseman.—The part delivery is evidence of attornment by the seller's agent to the buyer, and the seller's lien is lost by reason not of the part delivery, but of the loss of possession on the bailee's change of character (c). (b) As shipper or carrier.-The fact that freight or charges remain unpaid, raises a strong presumption that the shipper or carrier intends to retain his lien for the freight, and part delivery of the goods will not constitute delivery of the whole (d). When the goods are in course of transit, a part delivery has the same effect under s. 45 (7) for the purpose of divesting the seller's right of stoppage as it has of divesting the lien of the seller in possession. Retention... right of retention.-These are terms of Scotch law: see s. 39 (1) (a), p. 216. ILLUSTRATIONS (e). 1. A. sells to B. some hay then lying on A.'s premises. B., with A.'s permission, cuts and takes away part of the hay, but is not allowed by (a) Tanner ▼. Scovell (1845), 14 M. & W. 28. (b) See per Lord Ellenborough in Payne v. Shadbolt (1808), 1 Camp. 427, and Benj. p. 817. (c) Slubey v. Heyward (1795), 2 H. Bl. 504; and Hammond v. Anderson (1803), 1 B. & P. N. R. 69; so explained by Brett, L.J., in Ex parte Cooper (1879), 11 Ch. D. at p. 74, and by Bramwell, L.J., in Ex parte Falk (1880), 14 Ch. D. at p. 455; Pollock on Possession, pp. 70 et seq. (d) Ex parte Cooper, supra; Crawshay v. Eades (1823), 1 B. & C. 181. The following are the authorities on the subject of part delivery in order of date: Slubey v. Heyward (1795), 2 H. Bl. 504; Hammond v. Anderson (1803), 1 B. & P. N. R. 69; Simmons v. Swift (1826), 5 B. & C. 857; Bunney v. Poyntz (1833), 4 B. & Ad. 568; Dixon v. Yates (1833), 5 B. & Ad. 313; Miles v. Gorton (1834), 2 C. & M. 504; Betts v. Gibbins (1834), 2 A. & E. 57; Jones v. Jones (1841), 8 M. & W. 431; Wentworth v. Outhwaite (1842), 10 M. & W. 436; Tanner v. Scovell (1845), 14 M. & W. 28; Ex parte Gibbes (1875), 1 Ch. D. 101; Ex parte Cooper (1879), 11 Ch. D. 68 (criticism of Slubey v. Heyward, Hammond v. Anderson, and Jones v. Jones, supra, per Brett and Cotton, L.JJ., at pp. 74, 77); Kemp v. Falk (1882), 7 Ap. Ca., per Lord Blackburn, at p. 586. (e) See also the Illustrations to s. 45 (7), post, p. 251. |