such an agency, or of the duties involved in it, to notify the principal of the time and place at which the goods are to be sold, or exposed for sale. Indeed, in a majority of cases such a notice would be entirely impracticable. . . . The only requisite to such a sale as a measure of the rights and the injury of the party, is good faith, including the proper observance of the usages of the particular trade." Undoubtedly, if notice of the time and place of sale is practicable, the safe course for the seller to pursue is to give a fair notice. When the vendor resells as the buyer's agent, their relations subject him to the duty of obeying proper instructions from the buyer, which can be followed "without sacrificing his lien for the contract price. In the absence of any such instructions he has the right to exercise his discretion within reasonable bounds." 3

423. Title of Buyer on a Resale. This depends upon the legality of the transaction. If the vendor resells after rightfully exercising the right of stoppage in transitu, or after default by the purchaser while the goods remain in the vendor's possession, the buyer's title under such resale cannot be shaken by the first purchaser. A tortious resale by the vendor, however, has no such result. He can give no better title than he has; and unless the second purchaser can bring himself under the sheltering provisions of some legislative enactment, he must surrender the goods to the true owner, the first purchaser, or respond in damages for their conversion."

§ 7. Rescission of the Contract.

424. Insolvency of Buyer. Although the insolvency of the buyer does not of itself annul the sale contract, it may be ac

1 Pollen v. Le Roy, 30 N. Y. 549, 556, 557 (1863); cf. Holland v. Rea, 48 Mich. 218; 12 N. W. 167 (1882).

2 Van Brocklen v. Smeallie, 140 N. Y. 70, 75; 35 N. E. 415 (1893). Smith v. Pettee, 70 N. Y. 13, 18 (1877); Am. Canning Co. v. Flat Top Grocery Co., 68 W. Va. 698; 70 S. E. 756 (1911).

Milgate v. Kebble, 3 M. & Gr. 100 (1841); Sale of Goods Act, § 48 (2); Uniform Sales Act, § 60 (2).

Langton v. Higgins, 4 H. & N. 402; 28 L. J. Ex. 252 (1859); Cohen v. Foster, 61 L. J. Q. B. 643 (1892); Bowser v. Birdsell, 49 Mich. 5; 12 N. W. 888 (1882).

companied by such conduct on his part as to show his repudiation of the contract, and to justify the vendor in rescinding it.' Indeed, his repudiation will be inferred easily. For example, the buyer's failure to offer performance, or to demand it, for two months after giving notice of his insolvency, and his omission of the contract from the statement of his affairs presented to his assembled creditors as a basis of composition with them, have been deemed ample evidence of a repudiation; while the seller's failure to tender performance or to call for it was considered sufficient evidence of rescission by him.2

425. The principles applicable to such a case are stated very clearly in Lord Esher's opinion, in the last cited case. The defendants (the sellers) "would have a right to rescind if the plaintiffs (the buyers) had rescinded, or if the plaintiffs having so behaved themselves as to give them reasonable grounds to conclude that the plaintiffs had abandoned the contract, they did so conclude. I think the declaration of insolvency, unaccompanied by any subsequent intimation of any intention to enforce the contract, did give the defendants such reasonable grounds; and if they acted upon them, and themselves came to the conclusion to rescind the contract, it would be rescinded. As I before said, I think the smallest evidence would be sufficient of their having done so, and I think it is supplied by the fact they did nothing to show that they wished to go on with the contract, and broke from what is stated to have been their ordinary course of trade, viz., by not delivering as usual without any demand for delivery."

425 (a). Unreasonable Delay. Even when the contract does not specify the time for performance, the law implies that it is to be performed within a reasonable time; and delay beyond such time by one party puts him in default and may justify the other in rescinding.3

It is the duty of the party who intends to treat a breach by

1 Smith Lumber Co. v. Garbage Co., 149 Ia. 272, 280; 128 N. W. 389 (1910).

2 Morgan v. Bain, L. R. 10 C. P. 15, 28; 44 L. J. C. P. 47 (1874). Hallet & Davis Piano Co. v. Starr Piano Co., 85 Ohio St. 196; 97 N. E. 377 (1911); Uniform Sales Act, § 61 (1).

the other party as a ground for rescission to give notice thereof,' and to act without unreasonable delay.2

426. Rejection of Goods which conform to the Contract. - Even though the sale transaction has gone so far that the buyer cannot reject the goods without breaking his contract, yet if an absolute title has not vested in him he may, upon finding himself insolvent, reject them and thus prevent their passing to his assignee or his general creditors. His rejection, for the sole purpose of enabling the seller to rescind the contract and retain the goods, is deemed not only legal but commendable; 3 it prevents the property of the unpaid seller going to pay the debts of the insolvent buyer.

427. Refusal to receive Goods after Title has passed. — The courts will strive to give effect to the buyer's refusal to receive goods, although the title has vested in him absolutely. Accordingly, if he declines to take possession of them from a carrier or custodian, their transit may be prolonged thereby, and thus the seller may be afforded an opportunity of regaining his lien.1

But, suppose the insolvent buyer has acquired both title an possession, can he assent to a rescission of the sale, and thus prevent the goods from passing to his assignee or from being available to his general creditors? The answer depends upon the statutory provisions in the particular jurisdiction. It may fall under the ban of bankruptcy legislation and be void as a fraudulent preference given by the failing buyer to one of his creditors. In a leading English case on this subject Lord Kenyon declared, "The rules of bankruptcy law are framed with a view to benefit the bankrupt's creditors in general, and

1 Lovell v. Isidore Newman & Son, 192 Fed. 753, 756; 113 C. C. A. 39 (1912). See Uniform Sales Act, § 61 (2), last sentence.

2 Grayson McLeod L. Co. v. Stack-Kress T. & S. Co., Ark. 143 S. W. 581 (1912); Carr v. Coffman, W. Va. -; 73 S. E. 275 (1911); Uniform Sales Act, § 61; Graham v. U. S., 188 Fed. 651; 110 C. C. A. 465 (1911).

Nicholson v. Bower, 1 E. & E. 172 (1858); Grout v. Hill, 4 Gray (70 Mass.), 361 (1855); cf. Lord Mansfield's explanation of Atkin v. Barwick, 1 Str. 165 in Harman v. Fishar, Cowp. 117, at p. 125 (1774).

♦ Bartram v. Farebrother, 4 Bing. 579; 6 L. J. C. P. 125 (1828); Bolton v. Lancashire Ry., L. R. 1 C. P. 431; Burdick's Cases on Sales. 616 n.

not to give a preference to any in particular. It is said, however, that the vendor may in all cases rescind his contract with the consent of the vendee at any time before the bankruptcy of the latter; but if that were so, all the creditors of a bankrupt, whose goods remained in specie, might, when they found that he was in insolvent circumstances, go to the bankrupt's property and bring away what each had contributed to the fund, leaving nothing to satisfy the rest of the creditors." 1

428. In a jurisdiction, however, where no such statutory policy obtains, and where an insolvent debtor may lawfully prefer one creditor to another, such a rescission will be upheld.2 The buyer, finding himself unable to pay for the goods, may, according to some authorities, deliver them to a third person in trust for the unpaid vendor, and, unless the latter disaffirms the trust in his favor,3 title will be held to have revested in him at the time of such delivery. Such a buyer is declared to have "parted with all claim in or title to the property. He did all in his power to restore the property to the vendor. He acted with an honesty which ought to be encouraged and commended, not over-reached and nullified by any manner of technical rules at variance with equity and common justice." 4

429. Vendor's Right to regain Title in America. - The general rule in this country is that the seller, upon the buyer's default, whether the latter is insolvent or not, and whether his conduct is such as to show a settled determination to repudiate the contract or not, may, although title has passed to the buyer, elect to keep the property as his own and recover damages for the buyer's breach. These damages will ordinarily be the dif

1 Barnes v. Freeland, 6 D. & E. 80, 85 (1794); Hill Veneer Co. v. Monroe, 189 Fed. 834 (1911).

2 Seed v. Lord, 66 Me. 580, 582 (1876); Twin Theatre Co. v. Liquid Carbonic Co., 134 Ga. 460; 67 S. E. 1033 (1910).

Lovell v. Isidore Newman & Son, 192 Fed. 753, 760; 113 C. C. A. 39 (1912).

625.

Sturtevant v. Orser, 24 N. Y. 538 (1862); Burdick's Cases on Sales,

Hayden v. Demets, 53 N. Y. 426, 431 (1873); Moore v. Potter, 155 N. Y. 481; 50 N. E. 271 (1898); Burdick's Cases on Sales, 731; Boyd v. Second Hand S. Co., -; 123 Pac. 619 (1912); Armsby Co. v. Gray's Harbor Com. Co.,

Ariz.
- Ore.

-; 123 Pac. 32 (1912). Am. Canning

ference between the contract price and the fair value of the property when the contract is broken. If the seller elects to revest title in himself, any profit which accrues, from keeping the property and selling it at a later period, is his.1 And in cases of this kind, though the buyer may have made a partial payment before his refusal to take the goods and to pay the balance, he will not be entitled to any of the proceeds of a subsequent sale of the goods by the vendor. The buyer's refusal to go on with the contract precludes him from recovering the money he had paid. In a leading case upon this point, the court said: "It would be an alarming doctrine to hold that the plaintiffs might violate the contract and, because they chose to do so, make their own infraction of the agreement the basis of an action for money had and received. Every man who makes a bad bargain, and has advanced money upon it, would have the same right to recover it back that the plaintiffs have." The buyer's breach of the contract gives the seller the right to treat the property as his own, according to the prevailing view in this country. If he so treats it, he is under no duty to account to the defaulted buyer for its proceeds.

430. Rescission Pursuant to a Term of the Contract. - When the sale contract provides that the seller may resell the goods in case the buyer should make default, the English courts have declared that the seller's exercise of this right rescinds the contract. Notwithstanding the rescission, however, he may maintain an action for such damages as he has suffered by the purchaser's default.5

Even though the sale contract stipulates that, upon the buyer's default to pay the purchase price, the seller may declare the contract "null and void in all its provisions," and the Co. v. Flat Top Grocery Co., 68 W. Va. 698, 705; 70 S. E. 756 (1911). The text is quoted and approved in Williston on Sales, p. 936.

1 Bridgford v. Crocker, 60 N. Y. 627 (1875); Burdick's Cases on Sales, 629; cf. Campbell on Sales (2d ed.), p. 451.

2 Neis v. O'Brien, 12 Wash. 358; 41 Pac. 59; 50 Am. St. R. 844 (1895); Burdick's Cases on Sales, 630; Lachmund v. Lope Sing, 54 Ore. 106; 102 Pac. 598 (1909).

3 Ketchum v. Evertson, 13 Johns. (N. Y.) 358, 364 (1816). Lamond v. Duvall, 9 Q. B. 1030; 16 L. J. Q. B. 136 (1847). Sale of Goods Act, § 48 (4); Uniform Sales Act, § 61 (1).