distinct. A man can no more have the right to the technical stoppage of his own property in transit than he can have the right of lien on it. If the vendor has appropriated the goods unconditionally to the contract, and title has vested in the vendee, he cannot by varying the consignment pass the title to a third person; but he may exercise the right of stoppage in transitu.2 Let us now consider the conditions upon which this right is exercisable. 388. The Unpaid Seller. - Upon this point it is not necessary to add much to the statements made when discussing the seller's lien. "Any person who is in the position of a seller," although for most purposes his relation to the buyer may be that of agent to principal, may be entitled to stop goods for which he has paid or has directly pledged his credit.* Accordingly, a factor who has purchased goods and paid or become personally liable therefor, although this is done pursuant to an order from his principal, and although he has consigned them to the principal as the latter's goods, and has received the principal's negotiable paper in conditional payment for the price, occupies substantially the position of a vendor, and may stop the goods while in transit, upon the principal's insolvency. An agent of the consignor, to whom the bill of lading has been indorsed by his principal, and who has become vested thereby with the mercantile title to the goods, may exercise the right of stoppage in his own name." 389. Right may be exercised by Agent. Of course, the unpaid vendor may exercise the right by an agent, as well as in & E. 895 (1839); Scholfield v. Bell, 14 Mass. 40 (1817). See note to Stoveld v. Hughes, 12 Rev. Rep. at p. 525. 1 Phil. Ry. v. Wireman, 88 Pa. St. 265 (1879); Burdick's Cases on Sales, 158; The Constantia, supra. 2 The Uniform Sales Act, §§ 57-59. 3 Clark v. Mauran, 3 Paige (N. Y.), 373 (1832). One who ships goods in payment of a debt due the consignee is not an unpaid seller, and has no right to stop them in transitu. Sale of Goods Act, § 38 (2); Uniform Sales Act, § 52 (2). Feise v. Wray, 3 East, 93 (1802); Newhall v. Vargas, 13 Me. 92 (1836). Morison v. Gray, 2 Bing. 260 (1824). person. Nor does it matter that the agent has not received special authority to stop the goods in question, if his exercise of the right on behalf of his principal is within the scope of his general authority. Even a stranger may stop the goods for the unpaid vendor, provided the latter ratifies the act, before the buyer or his transferee obtains possession or makes demand for them.2 390. Factors who are not Unpaid Vendors. While the term "unpaid vendor" has in law a broad signification, it does not include a person who has never occupied substantially the position of owner or holder of the mercantile title. A factor who has accepted bills drawn on him by the consignor, on the strength of the latter's promise to ship certain goods, cannot claim them in the character of owner; 3 nor can a factor maintain such a claim who has had the goods in possession, even though they were subject to a lien in his favor for advances during his possession, but who has delivered them to a carrier for transportation to his principal's vendee.1 391. The Buyer's Insolvency. — It is only in cases of insolvency of the buyer that the unpaid vendor's right of stoppage in transitu is available. Here, as in the case of the vendor's lien, insolvency is not used in a narrow and technical sense; it is not confined to a buyer who has been adjudged a bankrupt, or an insolvent, in due legal proceedings, nor to one who has made an assignment for the benefit of his creditors. It includes every one who cannot pay his debts as they come due in the ordinary course of business.5 If the buyer has "by his conduct in business afforded the ordinary apparent evidence of insolvency;" 6 if he has permitted his commercial paper to be dishonored or his property to be 1 Reynolds v. Railroad, 43 N. H. 580 (1862). 2 Durgy Cement Co. v. O'Brien, 123 Mass. 12 (1877). Kinloch v. Craig, 3 D. & E. 119, 783 (1790). Gwyn v. Railway, 85 N. C. 429 (1881). Sale of Goods Act, § 62 (3); Jeffris v. Fitchburg Co., 93 Wis. 250; 67 N. W. 424, 426 (1896); Uniform Sales Act, § 76 (3). Diem v. Kobletz, 49 Ohio St. 41, 51; 29 N. E. 1124 (1892); Burdick's Cases on Sales, 617; cf. Ex parte Carnforth, 4 Ch. D. 108, 122 (1876). "An inability to pay avowed either in act or in word." attached in an action which he allows to go to judgment by default,' or if he has admitted that he is financially "embarrassed and not able to make full or general payment of his debts," or, although he has not actually failed nor has his paper gone to protest, yet if it is clear that he is hopelessly insolvent and will be unable to pay for the goods when the price falls due, he cannot be heard to say, as against the unpaid vendor, that he is not insolvent. Were the seller obliged in such cases to let the goods go into the actual possession of the buyer, they would be appropriated to the payment of debts due to others, while he remained unpaid. 392. Buyer insolvent when Goods despatched. That the buyer was insolvent at the time of despatching the goods, or even at the date of the sale contract, will not affect the seller's right of stoppage, nor will the fact that no radical change in the financial circumstances of the buyer has occurred intermediate the sale and the stoppage, unless the seller knew of the insolvency when he despatched the goods. In the latter case, he voluntarily surrenders a right which the law confers upon him, but does not force him to exercise. 5 393. The Transit; its Inception. - Until the goods have passed from the vendor's possession, the vendor's right of lien continues and the right of stoppage cannot arise. It comes into existence with their delivery to a bailee as the buyer's property for the purpose of transmission to the buyer. As 1 Tuthill v. Skidmore, 124 N. Y. 148; 26 N. E. 348 (1891). The mere levy of an attachment is not evidence of the defendant's insolvency. Gustine v. Phillips, 38 Mich. 674 (1878). 2 Secomb v. Nutt, 14 B. Mon. (Ky.) 324, 326 (1853). 3 Bloomingdale v. Memphis Ry., 6 Lea (Tenn.), 616 (1881). Rogers v. Thomas, 20 Conn. 53 (1849), holding that the term "insolvency" in this connection does not mean a general inability of the buyer to pay his debts, but that he has taken the benefit of an insolvent law, or has stopped payment, or has done some open, notorious act making a visible change in his pecuniary situation, seems to be followed in that State (Millard v. Webster, 54 Conn. 415, at p. 417 [1887]), but in no other jurisdiction. It has been overturned in that State by The Uniform Sales Act, §§ 57 and 76 (3). 5 Loeb v. Peters, 63 Ala. 243 (1879); Burdick's Cases on Sales, 591. • Gorden Cultivator Co. v. Missouri Railway, 64 Mo. App. 305 (1895); H. & T. Ry. v. Poole, 63 Tex. 246 (1885). soon as the bailee obtains possession the right may be exercised, although he has not set them in motion on their journey.1 Their transit has begun, and it continues, as we shall see, so long as they remain "in the possession of a middleman, or of some person intervening between the vendor who has parted with and the purchaser who has not yet received them," 2 whether such person "be a carrier, a warehouse keeper, a wharfinger, packer, or other depositary, or an agent for the purpose of forwarding,"3 or even a log-driving company.1 394. The carrier or custodian must be a middleman, however, between the unpaid seller and his vendee. Hence, if the seller voluntarily ships the goods to a purchaser from his vendee, the carrier is not a middleman intervening between the original seller and buyer; the title and possession have been passed to the first purchaser, and the transit is from him to the second vendee. The goods have never been put in transit between the original seller and buyer, and the former has no right of stoppage in transitu, although the buyer becomes insolvent while the goods are on their journey to the sub-purchaser.5 395. Such middleman may be the buyer's agent for certain purposes, and yet, if by the agreement of the parties or by usage of trade, he is not a mere servant of the buyer, but is a person interposed between the seller and buyer, having a possession of his own and liable, in his capacity as bailee, to an action by the buyer, in case the goods are carelessly lost or misdelivered," the goods are still in transit. The middleman may have author 1 Wiseman v. Vandeputt, 2 Vern. 203 (1690); Burdick's Cases on Sales, 590. The ship, on which the goods had been loaded, had not left her dock. 2 Schotsman v. Lancashire Ry., L. R. 2 Ch. App. 332, 338 (1867). Harris v. Pratt, 17 N. Y. 249, 252 (1858); Frame v. Oregon Liquor Co., 48 Ore. 272; 85 Pac. 1009 (1906). Johnson v. Eveleth, 93 Me. 306; 45 At. 35 (1899). Treadwell v. Aydlett, 9 Heisk. (Tenn.) 388 (1872); Shepard & Morse Lumber Co. v. Burroughs, 62 N. J. L. 469; 41 At. 695 (1898). • Bolin v. Huffnagle, 1 Rawle (Pa.), 9, 22 (1828); Berndtson v. Strang, L. R. 4 Eq. 481; 36 L. J. Ch. 879 (1867); Burdick's Cases on Sales, 593; cf. Newhall v. Vargas, 13 Me. 93 (1836). 7 Berndtson v. Strang, 3 Ch. App. 588, 591; 37 L. J. Ch. 665 (1868). ity from the buyer "to accept delivery so as to pass the property," 1 or he may have given a bill of lading for the goods to the buyer subsequent to their delivery by the seller,2 and still the goods be in transit and subject to stoppage. On the other hand, if goods are delivered to a master of a ship owned by the buyer, pursuant to the latter's directions, and the circumstances show that this ship is their final destination as between seller and buyer, such master is not a middleman and the right of stoppage has been surrendered.3 396. Interception of Transit by Attornment. If the middleman attorns to the buyer before the goods reach their final destination, as where a railway company agrees with the buyer to hold the goods as warehouseman for him, the right of stoppage is lost. But this attornment does not take place by a new agreement between the carrier and buyer "for the purpose of expediting them to the place of original destination." It must be "a new agreement . . . to hold the goods for the consignee as his agent. . . in a new character, for the purpose of custody, on his account and subject to some new or further order to be given to him. And when the court is asked to find that such a contract has been made, the fact that the carrier has not been paid his freight charges, or that he has not waived his lien therefor," indicates that no such contract has been made.8 6 1 Bethell v. Clark, 20 Q. B. D. 615; 57 L. J. Q. B. 302 (1888); Burdick's Cases on Sales, 606. 2 Lyons v. Hoffnung, 15 App. Cas. 391; 59 L. J. C. P. 79 (1890). Kendal v. Marshall, 11 Q. B. D. 356; 52 L. J. Q. B. 313 (1883). nung, supra; Langstaff v. Stix, 64 Miss. 171 (1886). • Kemp v. Falk, 7 App. Cas. 573, 584 (1882); Burdick's Cases on Sales, 599; Jeffris v. Fitchburg Co., 93 Wis. 250; 67 N. W. 424, 427; 33 L. R. A. 351; 57 Am. St. R. 919 (1896). 7 Farrell v. Railroad, 102 N. C. 390, 403; 9 S. E. 302 (1889). 8 Sale of Goods Act, § 45 (3). The subsection appears not to permit attornment until "after the arrival of the goods at the destination appointed" by the contract of sale. From the cases in England and in this country, it appears that attornment is rarely attempted before such arrival. This subsection is somewhat modified in the Uniform Sales Act, § 58 (2), (b). |