By what law contract governed. certain causes therein specified, were not incorporated in the § 369. The foregoing discussion relates only to the law concerning bills of lading as administered by the courts of this country. The question however, which has frequently arisen where goods have been carried in a foreign ship, by what law the contract of affreightment is to be governed, must not be altogether passed over. The general rule in such cases is that the law of the flag is to prevail.(c) And the result of the cases seems to be that, so far as regards the authority of the master to deal with the cargo in case of emergency, this rule will be followed, unless the contract contains an express provision to the contrary. (d) The extent of his authority in such a case may perhaps be regarded as something outside the contract.(e) At all events where the question to be determined relates to the rights and liabilities arising under the contract, or to the construction or validity of its terms, the rule is less strictly followed, and in such cases at any rate the question is, what was the law which the parties contemplated as being the law governing this contract?" (f) To ascertain the answer to this question all the circumstances attendant on the making of the contract are to be looked at.(g) (b) Sansinena v. Houston, 63 L. T. 246; 95 L. T. J. 33 (H. L.). (c) Lloyd v. Guibert, L. R. 1 Q. B. 115; The August, (1891) P. 328; per Brett, L.J., Chartered, &c, Bank v. Netherlands, &c., Co., 10 Q. B. D. at p. 529; The Patria, L. R. 3 Ad. 436, 455. (d) Lloyd v. Guibert, ubi sup.; The August, ubi sup. ; The Gaetano and Maria, 7 P. D. 137 (reversing 7 P. D. 1). (e) See per Sir R. Phillimore, L. R. 3 Ad. at p. 453. (f) Per Lord Halsbury, C., re The Missouri S.S. Co., 42 Ch. D. at p. 336. (g) Chartered, &c., Bank, v. Netherlands, &c., Co., 10 Q. B. D. 521, 529, 540; re The Missouri S.S. Co., 42 Ch. D. 321; The Wilhelm Schmidt, 25 L. T. 34; and see P. & O. S.S. Co. v. Shand, 3 Moo. P. C. N. S. 272. transitu." § 370. WHEN goods are consigned by way of sale on credit, "Stoppage in by one merchant to another, it sometimes happens that the consignee becomes insolvent while the goods are on their way. In such cases, as it would be unjust that the consignor's goods should be applied in payment of the consignee's debts, (a) the consignor is allowed by law to stop and resume possession of them, if he can succeed in doing so while they are on their way to the consignee, and before they have come into his actual or constructive possession. (b) In exercising this right, he is entitled, not only to countermand the delivery of the goods to the consignee, but also to demand their redelivery to himself. (c) This is called stoppage in transitu. (a) So late as 1690, this most important right was unknown to the law. It owes its existence entirely to the wisdom of great commercial lawyers, who presided over our courts of justice.(d) in the con It is of the essence of the doctrine of stoppage in transitu, Property in that, during the transit, the goods should be in the custody of the goods not some third person intermediate between the consignor, who has signor who parted with, and the consignee who has not yet acquired actual exercises (a) See per Lord Northington: D'Aquila v. Lambert, 2 Eden, at p. 77. (b) Lickbarrow v. Mason, 2 T. R. 63; 1 S. L. C., 9th ed. 737; Bohtlingk v. Inglis, 3 East, 381, 395; The Tigress, Brown. & Lush. 38; Tucker v. Humphrey, 4 Bing. 516. (c) The Tigress, Brown. & Lush. 38. (d) Lickbarrow v. Mason, 1 S.L.C. 737. This right was first recognised by the commissioners of the Great Seal in 1690: Wisemann v. Vandeputt, 2 Vern. 203. For the history of the right, see Lord Abinger's celebrated judgment in Gibson v. Carruthers, 8 M. & W. 337. R right. Effect of stoppage on contract of sale. Unpaid vendor. possession of them. (e) And further, the consignor's right to stop in transitu necessarily supposes, that the property in the goods is not in himself but in some other person; for so long as the entire property in goods belongs to any one, he has a right to the possession of them, whether they be in transitu or not, and has no need of the right of stoppage.(f) Thus, where goods were consigned by a principal to a factor, who, having accepted bills drawn by the principal, and paid part of the freight after the goods arrived, became insolvent before the bills became due, and before the goods got into his actual possession, it was said, that the right of stoppage in transitu was out of the question, as such right could only be exercised between vendor and vendee, and no property had vested in the insolvent factor.(g) And so where goods have been shipped under such circumstances, as to show an intention that the property or right of possession shall not vest in the consignee, until some further act, such as payment or handing over the bill of lading, is done, although the consignor may have a right not to deliver the goods to the consignee before that act is done, this is not what is meant by a stoppage in transitu.(h) The consignor in such case has his remedy by action, if the goods are delivered before the performance of the condition. What the effect of the exercise of this right on the contract of sale is, has been much discussed. Some eminent authorities have thought that it operates as a rescission of the contract, but the better opinion appears to be that it only entitles the vendor to hold the goods until the payment of the price, or of that part of it which remains unpaid, (i) and this view has been adopted in the United States. () Who may Exercise the Right. § 371. Wherever goods have been consigned by way of sale, the consignor, who stands in the position of vendor of the goods,(/) and who has not been paid the whole (m) price of the goods, may (e) Per Rolfe, B., Gibson v. Carruthers, 8 M. & W. 328; per Lord Chelmsford, Schotsmans v. Lan. & York R. Co., L. R. 2 Ch. Ap. 335; Ellis v. Hunt, 3 T. R. 464. (f) See ex p. Ferd, Baller & Co. re O'Sullivan, 66 L. T. 619; 67 ib. 464. (g) Kinloch v. Craig, 3 T. R. 786, in Dom. Proc.; Wright v. Campbell, 4 Burr. 2047. See also per Buller, J., Lickbarrow v. Mason, 1 S. L. C. at p. 781; per Willes, J., Bolton v. L. & Y. R., L. R. 1 C. P. at p. 439. (h) 1 S. L. C. 9th ed. p. 811; and see Turner v. Liverpool Docks, 6 Ex. 543; Falk v. Fletcher, 18 C. B. N. S. 403; Shepherd v. Harrison, L. R. 4 Q. B. 493 ;. 5 H. L. 116. (i) See per Cairns, L.J., Schotsmans v. Lane. & York. R. Co., L. R. 2 Ch. 340; notes to Lickbarrow v. Mason, 1 S. L. C., 9th ed., 795, and cases there cited; Benjamin on Sale, 4th ed. 878 et seq. (k) Benjamin on Sale, 4th ed. 901; Cross v. O'Donnell, 44 N. Y. Rep. 661. (1) Kent's Com. II. 542; Lickbarrow v. Mason, 1 S. L. C. 9th ed. 737, and notes thereto, see p. 799; Blackburn on Sales, 2nd ed. 320. (m) Hodgson v. Loy, 7 T. R. 440; per Parke, B., Van Casteel v. Booker, 2 Ex. 702. And exercise this right, when circumstances justify his doing so. although the bill of lading is drawn to the order of the consignee, or has been indorsed to him by the consignor, the latter may still exercise the right, while the bill of lading is in the hands of the original consignee unindorsed.(n) The vendor's right of stoppage on the insolvency of the purchaser is not affected by the fact that what he has sold is only an interest in and a right to receive a certain portion of the cargo, to be afterwards ascertained and appropriated to the parties intended ;(0) nor by the fact that he is an alien enemy who has shipped a cargo to a British merchant under a British licence, for the licence gives legality to all the consequences of the sale and to the employment by the vendor of an agent in this country.(p) commission. So an unpaid consignor in England, who has purchased and Unpaid conshipped goods for his correspondent abroad, charging a commission signor on on the price, may stop them in transitu, if this correspondent become insolvent, before he has obtained possession of the goods. (4) And on the same principle a person abroad, who in pursuance of orders sent him by a British merchant purchases goods on his own credit, and charges a commission on the price, and ships "on account and risk" of the merchant, is entitled to stop the goods, if the merchant fail while they are on their passage.(r) Indeed it has been said that the legal effect of the transaction between the commission merchant and the consignee is a contract of sale; and that consequently the former is a vendor, and has the right of one as to stoppage in transitu.(s) terested with § 372. On the same principle a person, who consigns goods Consignor to be sold on the joint account of himself and the consignee, is jointly inalso entitled to exercise this right on the failure of the latter.(t) consignee. And it seems that if goods are sold and forwarded to the agent of an insolvent consignee, and the former has made himself responsible for the price, he may stop them, whilst in transitu to such consignee.(u) surety. But a person, who has a mere lien on the goods, which he loses But not in by parting with the possession of them, cannot exercise this general mere right.(x) And it has been held that a mere surety for the price of the goods has no right to stop them.(y) (n) Brindley v. Cilgwyn, &c, Co., 55 L. J. Q. B. 67; per Dr. Lushington, The Tigress, B. & L. 44; Schotsmans v. The Lanc. & York. R., L. R. 2 Ch., per Lord Chelmsford, C. at p. 337; Tucker v. Humphrey, per Park, J., 4 Bing. 522. (0) Jenkyns v. Usborne, 7 M. & G. 678, 698. (p) Fenton v. Pearson, 15 East, 419. (Per Lawrence, J., Feise v. Wray, 3 East, 101. (r) Feise V. Wray, 3 East, 93; D'Aquila v. Lambert, 2 Eden, 75. (8) Per Blackburn, J., and Lord Chelms- (t) Newsom v. Thornton, 6 East, 17. (y) Siffken v. Wray, 6 East, 371. Surety dis charging liability entitled to assignment of all creditor's securities. Agent. Stranger if stoppage ratified in time. If, however, while the goods were in transitu a surety for an insolvent vendee should pay the vendor, it seems that he would now have the right to stop, if not in his own name, at all events in the name of his vendor, by virtue of the "Mercantile Law Amendment Act,"(2) which provides, that "every person, who being surety for the debt or duty, of another, or being liable with another for any debt or duty, shall pay such debt, or perform such duty, shall be entitled . ... to stand in the place of the creditor and to use all the remedies, and if need be, and upon a proper indemnity, to use the name of the creditor, in any action or other proceeding at law, or in equity, in order to obtain from the principal debtor or any co-surety, co-contractor, or co-debtor, as the case may be, indemnification for the advances made and loss sustained by the person who shall have so paid such debt or performed such duty, &c." § 373. As the act of a duly authorised agent is regarded in law as the act of his principal, an agent of the consignor may stop the goods on behalf of consignor, if the agent has a general authority from the consignor to act for him. (a) And an agent to whom the consignor has indorsed and forwarded the bill of lading, with directions to take possession of the goods, may stop in his own name, whilst the goods are on their way to the consignee.(b) In Hutchings v. Nunes,(c) the defendant, after the consignee had become insolvent and after an official assignee had been appointed, stopped the goods in the name of the consignors and obtained possession of them, without having any specific authority for that purpose, although there was evidence of a general authority in the defendant to act for the consignors. The latter, who had been apprized of the insolvency, before the arrival of the goods, sent to the defendant a letter and power of attorney to do whatever was necessary for their interests in the matter of the consignment of the goods. This letter and power, however, were not received by the agent until 14 days after he had obtained possession of the goods. In an action of trover brought by the official assignee against the agent, the Privy Council held, that it was a rightful, valid, and effectual stoppage in transitu. The grounds of the judgment seem to be first, that there was sufficient evidence of a general agency and, secondly, that the letter and power of attorney ratified the defendant's act. A stranger may interfere on behalf of the consignor and stop, if his agency is adopted and ratified by the consignor, while the transit continues, at a time and under circumstances, in (2) 19 & 20 Vict. c. 97 s. 5; cp. Im- Anderson, 9 M. & W. 533; Fraser v. (b) Morison v. Gray, 2 Bing. 260. |