invoked at all, and the buyer's only remedy is to reject the goods.1

188. Rights of an unpaid seller against the subject of the sale. While the seller of goods may have divested himself of title through the contract of sale, he may still retain certain rights to the property in order to enforce performance of the buyer's contract.

The two rights referred to are known as vendor's lien and stoppage in transitu.2

Where the seller retains possession of the goods he has a lien on them until the price is paid unless the sale was on credit and the term of the credit has not expired. The seller's lien will arise in one of the three following cases:

1. Where the sale is for cash down.

2. Where the sale is on credit, but the term of credit has expired before delivery.

3. Where the sale is on credit, and the buyer becomes insolvent before delivery.

The lien is lost by delivery to the buyer or his agent, by a waiver of the lien or by delivery to a carrier without a reservation to the right of possession in the bill of lading. The lien does not cover any claim except the purchase price, and ends upon valid tender of the purchase price.*

Stoppage in transitu is a right which the vendor of goods upon credit has to recall them, or retake them, upon the dis

1 105 N. Y. 232, at page 236.

2 Stoppage in transitu is part of the law merchant and not peculiar to England, but existent in the early commercial states, in Holland and in Russia.

3 Babcock v. Bonnell, 80 N. Y. 244.

4 Delivery to the vendee may be had if the goods are left at a place he designates, until a new destination is communicated by him. Valpy v. Gibson, 4 C. B. 837. Conell v. Hitchcock, 23 Wend. 611.

covery of the insolvency of the vendee, before the goods have come into his possession, or any third party has acquired bona fide rights in them. It continues so long as the carrier remains in the possession and control of the goods, or until there has been an actual or constructive delivery to the vendee, or some third person has acquired a bona fide right to them. Upon demand by the vendor, while the right of stoppage in transitu continues, the carrier will become liable for a conversion of the goods, if he decline to re-deliver them to the vendor, or delivers them to the vendee. And a notice by

the vendor, without an express demand to re-deliver the goods, is sufficient to charge the carrier. If the carrier is clearly informed that it is the intention and desire of the vendor to exercise his rights of stoppage in transitu, the notice is sufficient. And notice to the agent of the carrier, who in the regular course of his agency is in the actual custody of the goods at the time the notice is given, is notice to the carrier.1

If the carrier has issued a negotiable bill of lading, it has a right to demand its surrender or a bond sufficient to protect it. If the bill of lading has been transferred to an innocent purchaser for value while the goods are in the possession of the carrier, and before the seller's right of stoppage in transitu has been exercised, the right of stoppage is ended. The buyer may sell the goods, however, in cases where there is no document of title issued by the railroad company without defeating the seller's right.

189. Vendor's right of re-sale or rescission.—A vendor who has a lien or has exercised the right of stoppage in transitu may do one of two things:

1. He may constitute himself agent of the buyer and re-sell the goods,2 if the buyer delays an unreason

1 Reynolds v. Railroad, 43 N. H. 580; Jones v. Earl, 37 Cal. 630; Bierce v. Red Bluff Hotel Co., 31 Cal. 160.

2 Where the vendor sells as agent, the sale is subject to the usual rules

able time in paying for them, or he may sell them at once if they are perishable. Notice of intention to resell should always be given, though in some jurisdictions it has not been held to be necessary. A mere notice of intention is sufficient and need not contain a recital of the actual time and place of the re-sale. If the re-sale nets to the vendor less than the amount which the buyer agreed to pay, the difference may be recovered by the vendor as damages.

2. The vendor may rescind the sale and resume the title to the goods if the buyer does not pay for them within a reasonable time. Notice of the rescission and re-transfer of title should be given, though it has been held not to be necessary. An intention to rescind should be shown by some word or act, as for example, the consumption of the goods by the seller. If the vendor exercises his right of rescission he may sue the buyer for loss of profit. He has been allowed to sue for the entire purchase price.

EXAMPLES

209. A sold a car-load of paper to B on sixty days' credit, delivered a bill of sale, but for the convenience of the parties kept the paper in his possession. B assigned the bill of sale to C a month afterwards, and then became insolvent. C demanded the paper of A who refused delivery on the ground that B had become insolvent. A's contention is right; his lien on the paper was waived by a sale on credit, but was revived by the insolvency of the buyer, whose assignee can claim no better title than he had himself.

210. B bought of A a quantity of goat skins. At the time of the sale, and without the knowledge of A, B was insolvent. of agency; reasonable care, diligence and good faith. Dustom v. McAndrew, 44 N. Y. 72. May sell at auction. Pollen v. LeRoy, 30 N. Y.

The skins were consigned to B to whom was sent a bill of lading. A petition in bankruptcy was filed against B. X was chosen assignee in bankruptcy and received from B an assignment. A exercised his right of stoppage in transitu upon learning of the fact. His claim is well founded, for the assignee is not a purchaser for value and has no better rights than his assignor. If B had sold the skins and delivered the bill of lading to C before A exercised his right of stoppage C would be entitled to the goods.

211. A sold an automobile to B for $2,000. When the time came for delivery, B was unable to pay for the automobile and A refused delivery. Afterwards A informed B that he had procured another purchaser for the machine at $1,500. If A acts in good faith he can recover from B $500.

212. A sells a typewriter to B for $50. B is unable to pay, and A subsequently sells the typewriter to X and receives $75. If A had rescinded the sale B would not be entitled to the $25 profit, but if A has sold the typewriter as agent for B, he will be bound to account to B for the profit.

190. Actions by unpaid vendor for breach of contract of sale. Under certain circumstances an unpaid vendor may bring an action for the price of the goods, or he may bring an action for damages where the vendee refuses to accept them. If title has passed to the vendee, or if by the terms of the sale the price is to be paid before title passes, an action may be brought by the vendor for the price. In New York and in some other states where the market value of goods cannot be ascertained, the vendor may tender delivery and upon refusal of the vendee to accept them, he may hold them as bailee and bring an action for the price.

EXAMPLE

213. A sells a horse to B, the contract to be executed on both sides in one month, it being agreed that title to the horse

shall pass immediately. Upon the day set for delivery A tenders the horse but B refuses to accept it. A may sue for the price, and in New York and several other states he may recover also for his services as bailee.

An action for damages may be brought where the vendee repudiates the contract, refuses to accept the goods, or returns them and refuses to pay. The measure of damages is the actual injury sustained by the vendor by reason of the breach including those damages which naturally and proximately result from the breach, or such as may be held to be within the contemplation of the parties at the time of the sale.

EXAMPLES

214. A sells to B all the wheat in A's granary at eighty cents a bushel. After the wheat is measured, A demands the price but B refuses to accept the wheat or pay for it. In most jurisdictions, A's only remedy is an action for damages, because the title has not passed and the wheat remains the property of A. In New York and several other states, A may tender the wheat and sue for the price.

215. A sells to B all the timber standing on A's property, B to cut and remove it. B unreasonably delays in performing his part of the contract and A brings an action to recover the value of the use of the land for cultivation during the period of delay. A will succeed, as these damages were fairly within the contemplation of the parties at the time the sale was made.

191. Measure of damages.-In general, the rule is that where a buyer repudiates a contract or refuses to receive and accept the goods, the measure of damages is the difference between the contract price and the market value of the goods at the time and place of delivery. If there is no market at the place of delivery, the market value at the nearest market may be taken.