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shipped without payment would indicate that credit had been given. This credit would be a defense to a claim of lien, without raising any issue of possession. On the other hand, if the credit had been lost by insolvency, a right of stoppage in transitu would exist and it would be unnecessary to assert any claim of a lien.
Of course, if the goods have been delivered to a carrier with directions not to give possession to the buyer until payment—the ordinary “C. 0. D.” shipment—the lien would not be lost, as the carrier would clearly not be the buyer's agent for possession.
-Loss of Possession Due to Fraud. It is said by some writers upon the subject that a seller's lien is not lost, as between the parties at least, even though the buyer has obtained possession of the goods, if the possession was secured by fraud. This appears reasonable, but the cases cited to support these statements do not actually bear them out. In each case there is a confusion between the ideas of title and of seller's lien, and it appears that the seller's right to regain possession was based upon the retention of title till payment, rather than upon a true lien 60
-Loss of Possession for a Special Purpose. It is also said that the lien is not lost by mere delivery of possession to the buyer for some specific purpose, such as
60-Jones on Liens, sec. 830; strongly implied that title had not Williston on Sales, sec. 511; passed from the seller, the court Meechem Sales, sec. 1488; Wool. saying, "It is very clear that until sey v. Axton & Son, 192 Pa. 526; the (buyer) had the right of posBush v. Bender, 113 Pa. 94. In session it could not communicate McGill v. Chilhowee Lumber Co., a title to any purchaser." How111 Tenn. 552, 82 S. W. 210, it is ever, as the court had held, in ansaid specifically that the seller's other connection, that the risk of lien was not lost merely because loss was not upon the seller, as the buyer had wrongfully dispos owner, this case does support the sessed him of the property. proposition. Almost in the next breath it is
*See Uniform Sales Act, Section 56, (1).
inspection. But here again the cases are confused in their stated ideas of a lien, and indicate that the seller's right to repossession is really based upon the fact that he retained title until payment. And as we have already seen, title, if retained till payment, is in no wise affected by delivery of posession to the buyer. It is therefore at least somewhat doubtful if a seller who has really parted with title has any right to a seller's lien after he has deliberately parted with possession to the buyer, for any purpose.62
-Loss of Possession of Part of the Goods.-Delivery of possession of part of the goods terminates the lien upon that part, but the lien on the part retained is valid to the extent of the entire purchase price due. Again, however, the authority is scanty.68*
Effect of Giving Credit.—The seller's lien is predicated upon the assumption that, though the parties intended to pass title at once, they also intended that delivery of possession should be concurrent with payment. Since the lien thus depends on intention, there will be no lien if the parties appear to have intended that possession should pass before payment. So, if the seller has given the buyer credit, without expressly stipulating for retention of possession, it is presumed that he intended the buyer to have possession without concurrent payment. As Chief Justice Shaw put it, “A lien for the price is incident to the contract of sale, when there is no stipulation therein to the contrary, because a man is not required to part with his goods until he is paid for them. But conventio legem vincit; and when a credit is given by agreement, the vendee has a right to the custody and actual possession, on a promise to pay at a future time. He may then take the goods away, and into his own actual possession; and if he does so, the lien of the vendor is gone, it being a right incident to the possession."64
62—Palmer V. Hand, 13 Johns. llen upon the property." Morris (N. Y.) 432, "Where no credit is v. Rexford, 18 N. Y. 555; Ames v. stipulated for, the vendor has a Moir, 130 III. 582; Haskins v. Warlien, so that if the goods be ac- ren, 115 Mass. 514; Lamb v. Utley, tually delivered to the vendee, 146 Mich. 654; Caldwell v. Tutt, and upon demand then made he 10 Lea (Tenn.) 258. refuses to pay, the property is not
63—Williams v. Moore, 5 N. H. changed, and the vendor may law
235; Wanamaker v. Yerkes, 70 Pa. fully take the goods as his own,
443, confuses title and lien; Mcbecause the delivery was condi
Elwee v. Metropolitan Lumber Co., tional." Russell v. Minor, 22 Wend.
69 Fed. 302; McFarland v. Wheel. (N. Y.) 662, “the delivery is con
er, 26 Wend. (N. Y.) 467; Dixon v. ditional and does not become com
Yates, 5 B. & Ad. 313, 341; Bolton plete so as to change the right of
v. L. & Y. R. R. Co., L. R. 1 C. P. property until the condition is
431; Ex parte Cooper, 11 Ch. Div. complied with, * * * and the ven
68. dor does not thereby part with his
*See Uniform Sales Act, Section 55,
-Expiration of Credit.-If the buyer does not take advantage of his right of possession, but leaves the seller in possession until the period of credit has expired, then a seller's lien arises and payment becomes a condition precedent to the buyer's right of possession.65
-Insolvency of Buyer.—The lien arises likewise, even before the period of credit has expired, if the buyer
64–Arnold v. Delano, 4 Cush. (Mass.) 33; Robinson v. Morgan, 65 Vt. 37; Cutler v. Pope, 13 Me. 377; Conrad v. Fisher, 37 Mo. Ap. 352, 382; Pickett V. Bullock, 52 N. H. 354, “The right of lien is to be deemed to be waived when the party enters into a special agreement inconsistent with the existence of the lien or from which a waiver of it may be fairly inferred."
65—Robinson v. Morgan, 65 Vt. 37; McElwee v. Metropolitan Lumber Co., 69 Fed. 302, “Delivery (by the seller) could not be refused unless one of two things should
occur before the actual possession was surren ed, namely, insolvency of the buyer or non-payment of the price when the credit expired. In the case of the happen. ing of either of these contingen. cies before the actual possession of the lumber passed from the seller to the buyer, the vendor's lien which had been waived by a sale on credit, would revive, and the vendor might lawfully retain his possession until the price was paid." This case even went so far as to say, if not to hold, that the revived lien was not in turn waived by a fresh term of credit. If, however, the purchaser obtains the actual possession of the goods, the lien is
becomes insolvent before he has taken actual possession. Hence a buyer who has become insolvent can not have possession, against the seller's will, even though he demands it before the original period of credit has expired. In the words of one court,66 “When the sale is upon credit, it is one of the implied conditions of the contract that the vendee shall keep his credit good; his promise to pay at a future day, involving an engagement on his part that he will remain, and then be, able to pay; which engagement is broken when he becomes insolvent, and unable to pay, and hence the right of the vendor to stop performance of the contract on his part. It is true that, at that time (when payment is due) the vendee may again be solvent, and able to pay. There is no presumption, or assurance, that he will. If any presumption arises, it is rather, that the insolvency will continue, which is more in accordance with the experience of the commercial world. '67 It makes no difference that the seller has accepted the buyer's notes or other evidences of indebtedness for the purchase price. It is a general principle that notes given and received are merely a form of evidencing the debt and are intended as such rather than as payment. In such case the obligation of the buyer to keep his credit good is unchanged, and his becoming insolvent entitles the seller to retain possession of the goods until actual payment.68 If the notes
66—Diem v. Koblitz, 49 O. S. 41.
67-Bohn Mfg. Co. v. Hynes, 83 Wis. 388, “Although, generally, the purchaser of goods on credit is entitled to the immediate possession of them, that right is defeated if he becomes insolvent before he obtains actual possession; in such case the vendor may retain the goods and enforce his lien thereon for the unpaid purchase money.
gone, notwithstanding his insol. vency.” Thompson v. Baltimore & Ohio R. R. Co., 28 Md. 396; White v. Welsh, 38 Pa. 396; Vogel. sang's Admr. v. Fisher, 128 Mo. 386; Tuthill v. Skidmore, 1 N. Y. S. 445; Pratt v. S. Freeman & Sons Co., 115 Wis. 648, and fact that buyer again becomes solvent does not reinstate his credit, seller's lien continues; Dixon Yates, 5 B. & Ad. 313.
68-Bohn Mfg. Co. v. Hynes, 83 Wis. 388; Thompson v. Baltimore & Ohio R.R., 28 Md. 396; Vogel- road, 43 N. H. 580; Crummey V. sang's Admr. v. Fisher, 128 Mo. Raudenbush, 55 Minn. 426; Lan. 386; Tuthill v. Skidmore, 1 N. Y. caster Co. Bank v. Huver, 114 Pa. S. 445; Diem v. Koblitz, 49 0. S. 216. 41.
or other instruments have in fact been accepted in payment of the indebtedness there will of course be no lien in case of insolvency. The buyer having paid the seller, the latter has no claim against him under the contract of sale.69*
The fact that the buyer's insolvency existed before the contract of sale was entered into does not affect the seller's lien, if he did not know of the insolvency. “If there be a want of ability to pay, it can make no difference, in justice or good sense, whether it was produced by causes, or shown by acts, at a period before or after the sale."170 But if the seller knew of the buyer's
» insolvency at the time of the contract he would be held to have made the contract with that in mind and, by giving credit nevertheless, to have waived any right to possession.
Evidence of Insolvency.-To prove a buyer's insolvency “it is not necessary that he should have been declared a bankrupt or insolvent by a judicial tribunal, nor that he should have made an assignment of his property. If the fact exist, no matter how proved, if sufficiently and satisfactorily proved, the law requires no more.71 Insolvency “means a general inability to pay, evidenced by the stoppage of payment, '72 and it may be proved by circumstances, such as the disappearance of the buyer and the protest or mere non-payment of his
71—Benedict v. Schaettle, 12 69—Wisconsin Ins. Co. v. Filer,
0. S. 515, 523, quoting from Hays 83 Mich. 496.
V. Morille, 14 Pa. 48. 70—Loeb & Bro. V. Peters, 63
72—Chandler V. Fulton, 10 Ala. 243, 248; Benedict v. Schaet
Tex. 2. tle, 12 O. S. 515; Reynolds v. Rail
*See Uniform Sales Act, Section 52, (1), (2).