pal, has the rights against the goods of an unpaid vendor,1 although in other respects his rights and liabilities may be those of an agent.2

3

The rights of an unpaid seller have been adjudged to one who had bought and resold a part of a larger mass (1,442 bags of beans out of 3,932 bags), although this part had not been separated from the bulk so as to pass title to specific goods; and to a banker who had purchased drafts payable to the order of a customer who had not paid for them, nor obtained possession. A surety for the buyer has not the rights of an unpaid vendor, unless they are conferred by statute." 379. Seller in Possession. The courts are disposed to give a broad meaning to the term "possession" in connection with the unpaid seller's lien. Although the purchaser has received a part of the goods, and has taken samples of the remainder, the vendor remains in possession of the residue, unless the delivery of the part was made with intent that it should operate as a delivery of the whole. Nor does it alter the case that the buyer is to pay the seller warehouse charges while the latter retains control of the goods. Indeed, it has been judicially declared that "the vendor's lien is not devested by any species of constructive delivery, so long as he retains actual custody of the goods either by himself or by his own agent or servant." 10

Ex parte Banner, 2 Ch. D. 278, 287; 45 L. J. Bk. 73 (1876). "The right of an agent in such a case over the goods, as against his principal, is the same as that of a vendor as against a purchaser." Gossler v. Schepeler, 5 Daly (N. Y.), 476, 479 (1875). "He may retain the jus disponendi.” Moors v. Kidder, 106 N. Y. 32, 40; 12 N. E. 818 (1887).

2 Cassaboglou v. Gibb, 11 Q. B. D. 797; 52 L. J. Q. B. 538 (1883). Jenkyns v. Usborne, 7 M. & G. 678; 13 L. J. C. P. 196; 8 Scott N. R. 505 (1844).

4 Muller v. Pondir, 55 N. Y. 335, 339 (1873).

5 Siffken v. Wray, 6 East, 371 (1805).

Imp. Bank v. London Co., 5 Ch. D. 195; 46 L. J. Ch. 335 (1877).

7 McElwee v. Metropolitan Lumber Co., 69 Fed. 302 (1895); Burdick's Cases on Sales, 583.

• Dixon v. Yates, 5 B. & Ad. 313, 341; 2 N. & M. 177; 2 L. J. K. B. 198 (1833).

• Bloxam v. Sanders, 4 B. & C. 941; 7 D. & R. 396; 28 R. R. 519 (1825); Burdick's Cases on Sales, 579.

10 Conrad v. Fisher, 37 Mo. App. 352, 386 (1889), and cases cited.

380. This view has secured legislative approval in Britain and this country. If the seller actually delivers the goods to the buyer under the expectation of immediate payment, and payment is not made, his lien is not affected: he may retake and hold them until he receives full payment.2 But the lien is lost in case the buyer or his agent lawfully obtains possession, even though that possession is defeasible by reason of fraudulent representations as to his credit made by the purchaser. The fraud may enable the seller to rescind the contract and retake the goods as his own; but if he does not rescind the sale, both the title and the possession will remain in the vendee, and "after sale and delivery of personal property the law implies no lien for purchase-money."

381. Lien waived; Sale on Credit. While the law recognizes and secures the rights of an unpaid vendor, it does not compel him to stand upon those rights. He is at liberty to bargain them away or to waive them. If, instead of insisting upon payment as a condition precedent to the buyer's obtaining possession of the goods, he takes the latter's promise to pay at a future time, or receives some security in the place of cash, such as the guaranty of a third person for the payment of the price,' he waives his lien, unless by a trade usage 8 or by express stipulation it is retained. If he transfers possession of the goods to the buyer, before payment, although they remain upon his premises, his lien may be lost; as where the vendor of timber allowed the buyer to cut and prepare it for market.10 It may be lost, as against a third person who

6

1 Sale of Goods Act, § 41 (2); Uniform Sales Act, § 54 (2).

2 Owens v. Weedman, 82 Ill. 409 (1876), accord.

Bill of Sale Act, § 43 (1), (b); Uniform Sales Act, § 56 (1), (b).

Johnson v. Farnum, 56 Ga. 144 (1876).

Arnold v. Delano, 4 Cush. (58 Mass.) 33, 39 (1849).

In re Leith's Estate, L. R. 1 P. C. 296, 305 (1866); Nat. Live Stock

Com. v. Thero, 154 Mo. App. 508; 135 S. W. 961 (1911).

7 Dummer v. Smedley, 110 Mich. 466; 68 N. W. 260 (1896).

• Field v. Lelean, 6 H. & N. 617; 30 L. J. Ex. 168 (1861).

9 Gregory v. Morris, 96 U. S. 619 (1877).

10 Douglas v. Shumway, 13 Gray (79 Mass.), 498, 502 (1859). "We know of no case where such a right has been recognized, after the vendee has, at his own expense, in pursuance of the contract of sale, changed the character of the property, and by his own labor and money added to its

supplies to the buyer materials for its improvement, in case the sale contract binds the buyer to make such improvement.1 The seller also loses his lien, when he elects to revest title to the goods in himself, upon the buyer's default; or to sell a part of them for the purpose of applying the proceeds towards the purchase price.2

381 (a). The Lien ceases, upon a valid tender of the price by the purchaser, who becomes entitled to the immediate. possession of the article. If the seller refuses to deliver, upon such tender and demand, he may be liable for conversion.3

382. Revival of Lien upon Expiration of Credit. — While a sale on credit operates as a waiver of the unpaid seller's lien, during the term of credit, the lien revives upon the expiration of that term, provided the goods have not passed meantime from the seller's possession and control. Thereafter, "the buyer cannot claim to take the goods from the seller, without first paying the price." 4

383. Revival of Lien upon Buyer's Insolvency. If the buyer becomes insolvent during the term of credit, the lien immediately revives, for the seller's waiver of his lien is not absolute when he gives the buyer credit, instead of demanding cash; the law, still having regard for the superior equities of an unpaid seller, treats the waiver as made upon an implied condition that the buyer shall keep his credit good.5 Nor does it matter that the buyer was in fact insolvent when the agreement for credit was made, provided that seller did not know of the insolvency.

value. By these acts the vendor must be deemed to have parted with his possession and control of the property."

1 Panhandle Tel. & Tel. Co. v. Kellogg, S. B. & S. Co., - Tex. Civ. App. -; 132 S. W. 963 (1910).

2 Ogburn-Dalchau L. Co v. Taylor,

48 (1910).

Tex. Civ. App. -; 126 S. W.

3 Wright v. Andrews Co., 212 Mass. 186; 98 N. E. 798 (1912).

4 White v. Welsh, 38 Pa. St. 396, 400 (1861); McElwee v. Metropolitan Lumber Co., 69 Fed. 302 (1895); Burdick's Cases on Sales, 583.

Arnold v. Delano, 4 Cush. 33, 39 (1849).

• Crummey v. Raudenbush, 55 Minn. 426; 56 N. W. 1113 (1893). "Insolvency as applied to this branch of the law means a general inability to pay one's debts or to meet one's financial engagements. It is not

If a part of the goods has been delivered, and the insolvent has not paid for them, the seller may withhold the remainder until "he is paid the debt due for those already delivered, as well as the price of those still to be delivered;" but "the insolvency of one party to a contract does not release the other from his obligations, provided, always, the consideration promised, if money, be paid, or if the consideration be the note or other obligation of the insolvent, money be tendered in its place." 2

384. Effect on Lien of Transfer of Buyer's Interest. So long as the unpaid vendor's lien attaches to the goods as against the vendee, it cannot be affected by any disposition of the latter's interest in them, without the vendor's assent.3 This follows from the general principle of law, which has been referred to so often, "that a man who has not the property and right of possession in goods cannot transfer them to a vendee." Even a bona fide purchaser, therefore, from a vendee must take the goods subject to the unpaid vendor's lien,* unless the latter has estopped himself from asserting it as against such purchaser,5 or has clothed his immediate vendee with statutory reputed ownership under the Factors Act or similar legislation."

§ 5. The Seller's Right of Stoppage in Transitu.

385. This, like the right of lien, is conferred by the law upon the unpaid seller. Like the right of lien, too, it "is not founded on any contract between the parties; it is not founded on any

necessary that the vendee should have been adjudged a bankrupt or insolvent, or have made an assignment of his property."

1 Ex parte Chalmers, L. R. 8 Ch. App. 289, 291 (1873).

2 Florence Mining Co. v. Brown, 124 U. S. 385, 389; 8 Sup. Ct. 531 (1887).

Dixon v. Yates, 5 B. & Ad. 313, 339 (1833); McElwee v. Metropolitan Lumber Co., 69 Fed. 302 (1895); Burdick's Cases on Sales, 583.

Keeler v. Goodwin, 111 Mass. 490, 492 (1873); Palmer v. Hand, 13 Johns. (N. Y.) 434 (1816).

Farmeloe v. Bain, 1 C. P. D. 445; 45 L. J. C. P. 264 (1876); Merch. Banking Co. v. Phoenix B. S. Co. (1876), 5 Ch. D. 205; 46 L. J. Ch. 418.

• Voorhis v. Olmstead, 66 N. Y. 113 (1876); here the goods were represented by a warehouse receipt. See Uniform Sales Act, §§ 27-40.

ethical principle; but it is founded upon the custom of merchants. The right to stop in transitu was originally proved in evidence as part of the custom of merchants; but it has been afterwards adopted as a matter of principle, both at law and in equity."1

386. How this Right differs from that of Lien. - While it is analogous to the right of lien, and like that has its origin in the custom of merchants, the two are not to be "regarded as the same right exercised under different circumstances," although judicial dicta that they should be so regarded are numerous.2 They differ in two respects.

The right of lien, as we have discovered, is not available, unless the seller is in possession of the goods, in the character of an unpaid former owner, or of bailee to the buyer. It is determined as soon as the buyer or his agent lawfully obtains possession. The right of stoppage in transitu, on the other hand, does not come into existence until the seller's lien has terminated; that is, until the goods have passed out of the vendor's possession into the hands of a carrier for transmission to the vendee.3

Again, we have seen that the seller's lien reattaches, upon the expiration of the term of credit, whether the buyer is insolvent or not. But the right of stoppage in transitu can be exercised in case of insolvency only. "It is a privilege allowed to the seller, for the particular purpose of protecting him against the insolvency of the consignee." 5

387. It differs from Vendor's Right to retake his own Goods. — In some of the cases this right is confounded with the right of the owner to retake goods, or to vary their consignment, when he has reserved to himself the jus disponendi, or when for some other reason title has not passed. But the two are wholly

1 Kendal v. Marshall, 11 Q. B. D. 356, 364; 52 L. J. Q. B. 313 (1883). 2 Conrad v. Fisher, 37 Mo. App. 352, 384, and cases cited (1889); Grocery Co. v. Railroad, 138 Mo. App. 352, 357; 122 S. W. 10 (1909).

' Chalmers' Sale of Goods Act (2d ed.), 72; (7th ed.), 98.

• Provided, of course, that the seller is then in possession.

The Constantia, 6 Rob. Adm. 321, 326 (1807); Hill v. Ill. Cen. Ry., 151 Ill. App. 439 (1909).

Hawes v. Watson, 2 B. & C. 540 (1824); Shanwick v. Sothern, 9 Ad.