end until the goods arrive there, subject, however, to the purchaser's power of intercepting them by actually taking possession at some intermediate place. And this holds good, although the agents are persons appointed by the purchaser and bound to obey his orders.

"3. Where, according to the contract of sale, the vendor is to send the goods to an agent of the purchaser at B, the transit is at an end as soon as such agent receives them, although the vendor is informed that they are destined for another place, and are to be forwarded there by that agent, and although the latter may employ the seller's servant or agent to forward them to their ultimate destination."

§ 1562. Interception by sub-purchaser - Mere resale does not defeat stoppage.- The mere fact that the goods have been resold will not defeat the right of stoppage. "There is no doubt," said Chief Justice Redfield, "if the vendee make a resale of the goods he makes it subject to the vendor's right to stop the goods in transitu. But this is while the goods are going to the first vendee. After the first vendee has resold them and put them on their second passage, the transit between the vendor and his vendee is at an end. But a resale will not defeat the vendor's right to stop the goods in transitu until they have reached their first destination, unless the bill of lading is assigned, or the vendee has anticipated the arrival and taken possession, which he may do, or the vendor consents to the resale."

§ 1563. — Indorsement of bill of lading.- Where, however, the seller delivers to the buyer a bill of lading for the goods, their transit may be intercepted and the seller's right of stoppage defeated, by a sale of the goods by the buyer and an actual indorsement of the bill of lading to a purchaser who

1 In Eaton v. Cook, 32 Vt. 58. In Pattison v. Culton, 33 Ind. 240, 5 Am. R. 199, it is said: "A mere resale by the vendee does not, however, destroy the right to stop, and we know of no case in which it has been held to do

so. 2 Kent's Com. 547, and cases there cited in the note."

A sale of the goods by the consignee to the carrier in consideration of the unpaid freight does not make the carrier a bona fide holder, or de

buys in good faith, in the usual course of trade, and pays value for the goods.1

This rule, which finds its justification in the doctrines of Lickbarrow v. Mason, attaches consequences to the indorsement of the bill of lading, which do not follow upon a mere contract for the sale of goods in transit, when unaccompanied by such a document. It is material, therefore, that every element essential to the operation of the rule shall be present in the case to which the rule is to be applied.

$ 1564.

Good faith.-Foremost among these essentials is the fact that the transferee of the bill of lading acted in good faith in acquiring it. An early statement of the rule which has been often quoted is that of Chancellor Kent: "If the assignee of the bill of lading has notice of such circumstances as render the bill of lading not fairly and honestly assignable, the right of stoppage as against the assignee is not gone; and any collusion or fraud between the consignee and his assignee will of course enable the consignor to assert his right. But the mere fact that the assignee has notice that the consignor is not paid does not seem to be of itself absolutely sufficient to render the assignment defeasible by the stopping of the cargo in its transit, if the case be otherwise clear of all circumstances of fraud; though, if the assignee be aware that the consignee is unable to pay, then the assignment will be deemed fraudulent as against the rights of the consignor." 4

feat the seller's right of stoppage. Wheeling, etc. R. Co. v. Koontz (1900), 61 Ohio St. 551, 56 N. E. R. 471, 76 Am. St. R. 435.

1 Mechem's Hutchinson on Carriers, § 414; Branan v. Atlanta R. Co., 108 Ga. 70, 33 S. E. R. 836, 75 Am. St. R. 26; Leask v. Scott, 2 Q. B. Div. 376, Willis. Cas. 448; Loeb v. Peters, 63 Ala. 243, Adam's Cases, 519, 35 Am. R. 17; Becker v. Hallgarten, 86 N. Y. 167, Williston's Cases, 420, Adam's Cases, 43.

22 T. R. 63, 1 Smith's Lead. Cases, 388, Williston's Cases, 359.

3 Thus in Kingman v. Denison, 84 Mich. 608, 48 N. W. R. 26, it is said: "This right of stoppage in transit will not be defeated by an apparent sale, fraudulently made, without consideration, for the purpose of defeating the right. There must be a purchase for value, without fraud, to have this effect. Harris v. Pratt, 17 N. Y. 249."

42 Kent's Com. 550, citing Newson

1565. For value. The transfer must also be for value. What constitutes a transfer for value is here subject to the same differences of opinion which are found to prevail in other cases (not here discussed) in which the same question is involved. A transfer in payment of an antecedent debt has been held to be sufficient,1 though this has been doubted, while

a transfer merely as collateral security for such a debt has been adjudged not to be for value.1

§ 1566. Indorsement of bill of lading.-It is held in a few cases that, in order to be a bona fide holder for value within the contemplation of the rule now under consideration, the transferee must hold by an actual indorsement of the bill of lading as distinguished from a delivery without indorsement.2 These cases, however, are based largely upon the language of the code or other statutes, and a different rule has been applied in analogous cases. An actual assignment of the bill of lading, however, seems to be indispensable, and to admit of no substitute. A mere resale of the goods, as has been seen, does not defeat the right of stoppage."

N. E. R. 471. See also note, 29 Am. Dec. 392, where it is said that the better opinion is that the antecedent debt is not a sufficient consideration.

1 Loeb v. Peters (1879), 63 Ala. 243, Adam's Cas. 519, 35 Am. R. 17, citing Lesassier v. The Southwestern (1874), 2 Woods (U. S. C. C.), 35, 15 Fed. Cas. 388. In the last case Bradley, J., said: "A transfer of a bill of lading as a mere collateral to previous obligations, without anything advanced, given up, or lost, on the part of the transferee, does not constitute such an assignment as will preclude the vendor of the goods from exercising the right of stoppage in transitu." See also Vogelsang v. Fisher (1895), 128 Mo. 386, 31 S. W. R. 13.

2 Sheppard v. Newhall, 54 Fed. R. 306, 7 U. S. App. 544, 4 C. C. A. 352, where the court said that the right of the seller "to stop the goods in transitu upon discovering the insolvency of the vendee was perfect, not only as against the vendee, but as against all others, except a purchaser for value taking by indorse

ment of the bill of lading in the usual course of business and without notice. Civil Code of California, § 2127; Stanton v. Eager, 16 Pick. (Mass.) 467; Akerman v. Humphrey, 1 Carr. & P. 53, 56. At least one of these conditions is wanting in the present case, namely, the indorsement by the party in whose favor the bill was drawn." In this case, however, the bill of lading was not drawn to the order of either the seller or the buyer, but to the order of an intermediate forwarding agent. The lat ter sent the bill of lading unindorsed to the buyer, who indorsed it and transferred it to the defendants. See also Chandler v. Fulton, 10 Tex. 2, 60 Am. Dec. 188.

See Holmes v. Bailey, 92 Pa. St. 57; Merchants' Bank v. Union R. & T. Co., 69 N. Y. 373; Bank of Rochester v. Jones, 4 N. Y. 497, 507, 55 Am. Dec. 290; City Bank v. Rome, etc. R. Co., 44 N. Y. 136.

4 In Ocean Steamship Co. v. Ehrlich, 88 Ga. 502, 14 S. E. R. 707, the facts were that, after the freight and

'See ante, § 1562.

Transfer after notice to stop.

§ 1567. It has, moreover, in one case1 at least, been held that a transferee of the bill of lading who acquires it in good faith will be protected, even though the seller had given notice of stoppage to the carrier before the transfer; but this ruling has not been generally approved and seems to be in conflict with the general principles governing this subject.

$ 1568. Pledgee of goods - Bill of lading as security. The bill of lading, however, may be transferred, not absolutely, but as security for loans or advances made upon the credit of the goods; and where such are the facts, the transfer will be deemed a pledge or mortgage only, and the seller may exercise his right of stoppage subject only to the lien for these advances.3 His right to reach the surplus is, however, an equitable rather than a purely legal one, and is to be worked out by equitable

signment of the bills of lading. If these bills had been assigned, that would have been equivalent to an actual delivery of the goods. The law recognizes no substitute for such assignment."

So in Kemp v. Falk, 7 App. Cases, 573, Willis. Cas. 405, Lord Blackburn said: "No sale, even if the sale had been actually made with payment, would put an end to the right of stoppage in transitu, unless there were an indorsement of the bill of lading."

wharfage were paid and the bills. . . Confessedly there was no astherefor receipted, and while the goods, though upon the wharf, were not yet actually delivered by the carrier to the consignee, the latter sold them to another who paid for them, in good faith. The consignee exhibited to his vendee the bill of lading, but did not assign or deliver it to him, but in lieu thereof gave him the receipted freight and wharfage bills, and an order upon the carrier for the goods. The sub-vendee obtained part of the goods, but before they were all delivered the original seller stopped them as in transit, and it was held that his right to do so had not been defeated. The court referred to § 2075, 2649, 2650, of the Georgia code, and said that nothing defeats the right of stoppage but actual possession in the vendee, or bona fide assignment of the bill of lading. "In this case, as to the goods remaining upon the wharf, there was neither.

1 Newhall v. Central Pacific R. Co., 51 Cal. 345, 21 Am. R. 713, Adam's Cas. 577, Willis. Cas. 424.

2 Thus its soundness is denied by Mr. Hutchinson, Carriers, § 414; by Professor Burdick, Sales, p. 236.

3 Matter of Westzinthus, 5 B. & Ad. 817, Williston's Cases, 388; Spalding v. Ruding, 6 Beavan, 376, Williston's Cases, 392.