In Conrad v. Fisher, the court said specifically, "We understand it to be the settled law that the right to enforce a vendor's lien, in respect of goods sold upon credit (sic), is not a right to rescind the contract of sale, but is a right to detain the goods until the indebtedness for the purchase price is discharged, at or before the expiration of the credit, and, if not so discharged to sell them and apply the proceeds of their sale to the liquidation of the indebtedness. ''94 What Constitutes Default.-The fact that the seller may exercise a right of resale, by virtue of his lien, in case of essential default by the buyer, raises the question, what constitutes such a default. A repudiation of the agreement by the buyer is obviously a material breach. Thus a refusal by the buyer to receive the goods if tendered is a clear breach of contract and, seemingly without demur, is held to give the seller a right to resell and sue for the difference. Of course these cases do not often involve any question of seller's lien by name, since they arise out of an attempt by the seller to deliver possession, but they furnish a positive analogy as to what would constitute such a breach as to allow resale under the lien. The case of Langfort v. Admx. of Tiler,95 already referred to, intimates that mere failure of the buyer to pay at the time set is not such a breach as will permit a re 93-37 Mo. Ap. 352, 362. upon the resale." It was assumed 94-Diem v. Koblitz, 49 O. S. 41; Maclean v. Dunn, 4 Bing. 722, “It has never been decided that a resale of the goods is a bar to an action for damages for non-performance of a contract to purchase them *** it is most convenient that when a party refuses to take goods he has purchased, they should be resold, and that he should be liable to the loss, if any, *See Uniform Sales Act, Section 61, (1). sale, but that thereafter "the vendor ought to go and request him; and then if he does not come and pay, and take away the goods in convenient time, * * * he (vendor) is at liberty to sell them to any other person." This idea that mere failure to pay is not an essential breach is sustained by Martindale v. Smith,96 in which, although the argument was as to the right to "rescind" the contract and revest title because of default in payment, the court said, “In a sale of chattels, time is not of the essence of the contract, unless it is made so by express agreement. The mere stipulation that payment was to be made "in twelve weeks from the date" of the contract was held not expressly to make that time of the essence. In Fancher v. Goodman,98 it was held that a seller had no right to resell by virtue of his lien merely because the buyer did not pay at the time set, but that he might properly have resold if he had first given notice to the buyer that he would resell if payment were not forthcoming.99 97 The failure of a buyer to keep his credit good revives the seller's lien and justifies him in refusing to deliver possession. But such failure is not a breach of the contract to buy. The fact that the buyer becomes bankrupt does not absolve the seller from his obligation to deliver the property, if the bankrupt or his assignee is in fact ready to perform at the time such performance is due. Non-payment by the buyer may, as indicated below, justify the seller in reselling, but mere bankruptcy before the time of payment does not conclusively indicate that the 96-1 Q. B. 389. 97-This case very strongly implies that the seller has no right of resale at all, unless he shall have truly rescinded the contract. It may possibly stand for the proposition that non-payment does not permit of a rescission, and that resale by virtue of a lien is never allowed. 98-29 Barb. (N. Y.) 315. 99-Raymond v. Bearnard, 12 Johns. (N. Y.) 274; Porter v. Wormser, 94 N. Y. 431, there is no right of resale while credit given still exists; Greaves v. Ashlin, 3 Camp. 426, mere failure of buyer to take away goods within a rea. sonable time held not to justify a resale. buyer will not be able to pay when the time comes.100 The buyer, however, cannot practically object to a resale by the seller, even though the seller has thereby rendered himself unable to perform, until he, the buyer, is himself ready to perform. The unauthorized resale is not in itself a breach. The breach would be the seller's unjustified refusal to deliver at the proper time and to predicate such breach the buyer would have to show that he was himself ready to perform.101 But, failure of a buyer to pay when agreed is quite another matter, and, as is intimated in the cases just referred to, if, after the buyer's failure to pay at the time stipulated, the seller specifically notifies him that payment is due, and the buyer thereafter refuses to pay, or so neglects it as to imply a refusal, there is a sufficient breach to justify the seller in reselling.102* If there has been no such breach by the buyer as would justify a resale by the seller, the buyer upon tender of payment is, of course, entitled to possession of the goods. If the seller, by an unjustified resale, has put it out of his power to perform, the buyer may have an action against him, upon tender of his own performance at the proper time.108 -Application of Proceeds of Resale.-Assuming, merely, that the seller, by virtue of his lien, has not a 100-Kearney v. Union Pac. R. R. Co., 97 Iowa 719, 59 Am. St. 434; Gibson v. Carruthers, 8 M. & W. 321. 101-Diem v. Koblitz, 49 O. S. 41; Rappleye v. Racine Seeder Co., 79 Ia. 220; Brassel v. Troxel, 68 Ill. Ap. 131; Pardee v. Kanaday, 100 N. Y. 121; Ex parte Chalmers, L. R. 8 Ch. Ap. 289. 102-VanBrocklen v. Smeallie, 140 N. Y. 70; Olcese v. Mobile Fruit Co., 112 Ill. Ap. 281; Nelson v. Hirsch & Sons Co., 102 Mo. Ap. 498; Hayes v. Nashville, 80 Fed. 641; Maclean v. Dunn, 4 Bing. 722; Ogg v. Shuter, L. R. 10 C. P. 159; 1 C. P. Div. 47. 103-A buyer who has tendered the amount due the seller under the latter's lien may bring an action for conversion against the seller, Wright v. Andrews Co., 212 Mass. 186, 98 N. E. 798; Pardee v. Kanady, 100 N. Y. 121; Martindale v. Smith, 1 Q. B. 389; compare Gibson v. Carruthers, 8 M. & W. 321. *See Uniform Sales Act, Section 60, (1), (2). right of rescission, but only a right to resell in satisfaction of the indebtedness, a question is raised as to the party entitled to the surplus in the unusual event that the resale should bring more than the amount of the indebtedness. Logically the buyer would be entitled to the excess. But if the seller who remains unpaid after title has passed has a right to revest title in himself, by so acting he would become again the owner of the goods, and would be entitled to all they might bring upon a resale, just as though title had never passed to the buyer. In the event that a resale should bring more than the purchase price, it would probably be presumed, although no case involving the precise question has come to the writer's knowledge, that the seller had chosen to revest the title in himself, rather than to resell in mere enforcement of his lien. The real question, therefore, is whether a seller who has passed title but retained possession can revest title in himself upon the buyer's default in payment.104 The right to rescind contracts, other than those of sale, because of essential default on the part of the promisor is discussed in works on contract and does furnish an analogy for the proposition that the seller in possession may, if he choose, rescind and dissolve the contract in such a way as to revest himself with title, instead of proceeding by way of enforcing his lien.* -Failure to Resell.-The same question arises in another form also. If there has in fact been such a breach by the buyer as would justify a resale by the seller, in enforcement of his lien, does the buyer continue to be owner until such resale? In other words, is it absolutely necessary for the seller to resell in order to divest the buyer of title? While no court appears to have decided these the title was in the seller on a different theory than rescission. 104-There are cases in which resale has brought more than the original purchase price, but in *See Uniform Sales Act, Section 61, (1). the matter exactly, there are statements which intimate that the seller could revest title in himself on the buyer's default and need not resell the goods. Assuming in answer to these questions that the seller does have power to revest the title in himself, there arises the further question whether it is necessary for him to rescind the contract, in the precise sense of putting an end to it, to do this. We have seen that when title has not passed, the seller may keep the goods, which are already his own, and sue for damages, which are generally the difference between the market value and the agreed price. We have seen also that the seller who has passed title can resell the goods, in a certain sense as the buyer's property, and sue for the difference. But can the seller who has passed title also keep the goods as his own and still sue for the difference between their market value and the agreed price? If, to revest title in himself, he has to abrogate the contract, there is then no contract existing on which to base his action for this difference. This matter is much confused with the right of a seller who has not passed title to keep the goods as his own and sue for the difference between market value at time of breach and the agreed price. But in these cases the seller has continued in possession of the title all the time; there is no question of retaking it from the buyer. Nevertheless the authorities on this point, particularly Dustan v. McAndrew,105 are occasionally made the basis of statements, by both judges and text-writers, to the effect that a seller who has passed title can retake it without actually rescinding the contract. Thus, in Van Brocklin v. Smeallie,106 it is very clearly said, though as a matter of dictum only, that even where title has passed the seller still in possession may keep the goods as his own and sue for damages. But there are not enough cases in which the 105-44 N. Y. 72. 106-140 N. Y. 70. |