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equitable origin,23 although it is now enforced as a legal remedy." As in the case of liens, it exists only when the title has passed to the buyer,25 though a similar right is allowed in contracts to sell.26 The vendor may exercise the right of stoppage in transitu only when the buyer becomes insolvent.27

(c) RESALE. When the seller has retained the possession of the goods in the exercise of his right of lien, or recovered possession of them in the exercise of his right of stoppage in transitu, he may make these remedies effective by the exercise of a third, the right of resale.28

(d) RESCISSION.-He may rescind the contract, in a proper

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(e) RETENTION.-If the seller has not transferred the title to the buyer, he may retain possession of the goods, or, if put in course of transportation, recover possession of them.30

23. Morris v. Shryock, 50 Miss. 590; Gibson v. Carruthers, 8 M. & W. 321, 338; Benjamin on Sales, § 829; 1 Jones on Liens, § 858.

It may still be enforced by bill in equity. Schotsmans v. Lancashire, etc., Ry. Co., 2 Ch. App. 332, 36 L. J. Ch. 361.

The effort to subject common law liens to uniform rules must necessarily be unsuccessful. Derived from the civil rule, and founded on considerations of equity and justice, the rules by which they are governed vary with the grounds on which such rights are given." White v. Smith, 44 N. J. L. 105, 106. To the same effect is Rogers v. Thomas, 20 Conn. 53, 66.

"The right of stoppage in transitu is founded upon mercantile rules and is borrowed from the custom of merchants. From their custom, it has been engrafted upon the law of England. According to the rules as to stoppage in transitu, the goods can be stopped only whilst they are passing through the channels of communication for the purpose of reaching the hands of the vendee. This doctrine was adopted by the Court of Chancery and afterwards by the courts of common law." Kendall v.

Marshall, Stevens & Co. (1883), 11
Q. B. D. 356, 368 C. A.

24. Newhall v. Vargas, 13 Me. 93; Johnson v. Eveleth, 93 Mo. 306; Morris v. Shryock, 50 Miss. 590; 1 Jones on Liens, §§ 858, 860.

Stoppage in transitu is a right highly favored in law. Callahan v. Babcock, 21 Ohio St. 281; Inslee v. Lane, 57 N. H. 454; Cabeen v. Campbell, 30 Pa. St. 254; Rogers v. Thomas, 20 Conn. 53, 66.

25. 2 Mechem on Sales, § 1527.

The exercise of the right of stoppage in transitu implies that the title is vested in the vendee, "affirms that title, and only sets up a right to retain possession of the property as a security for the price." Rogers v. Thomas, 20 Conn. 53, 66.

26. See (e) post. 2 Mechem on Sales, § 1614, et seq.

27. Benjamin on Sales, § 828. See sec. 57.

28. Melrose v. Hastic (1851), 13 Sess. Cas. 880; 2 Mechem on Sales, § 1622, et seq.; Benjamin on Sales, § 782, et seq. See sec. 60.

29. See sec. 61.

30. Pattison v. Culton, 33 Ind. 240; Diem v. Koblitz, 49 Ohio St. 41, 51; Griffiths v. Perry (1859), 28

The effect of the exercise of this right is not to rescind the contract.3

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Section 54. When Right of Lien May Be Exercised.—(1.) Subject to the provisions of this Act, the unpaid seller of goods who is in possession of said goods is entitled to retain such possession until payment or tender of the price in the following

cases:

(a.) Where the goods have been sold without any stipulation as to credit,

(b.) Where the goods have been sold on credit, but the term of credit has expired,

(c.) Where the buyer becomes insolvent.

(2.) The seller may exercise his right of lien notwithstanding that he is in possession of the goods as agent or bailee for the buyer.

(1.) An unpaid seller having possession is entitled to exercise his lien in the following cases:

(a) Where the contract does not provide terms of credit or the parties do not otherwise stipulate.1

L. J. Q. B. 204, 208; Ex parte Chalmers (1873), L. R. 8 Ch. App. 292; 2 Mechem on Sales, § 1615.

After the sale and before the vendor has taken any steps to forward the property to the vendee, the vendor has a lien upon it, by virtue of which he may, on the occurrence of the insolvency of the vendee, retain the goods in his possession, as a security for the price. Rogers v. Thomas, 20 Conn. 53, 63.

31. Diem v. Koblitz, 49 Ohio St. 41, 51; 2 Mechem on Sales, § 1617.

1. Segrist v. Crabtree, 131 U. S. 287; Leavy v. Kinsella, 39 Conn. 50; Parks v. Hall, 19 Mass. (2 Pick.) 206, 211; Barrett v. Pritchard, 19 Mass. (2 Pick.) 512; Arnold v. Delano, 58 Mass. (4 Cush.) 33; Douglass v. Shumway, 79 Mass. (13 Gray) 502; Palmer v. Hand, 13 Johns. (N. Y.) 434; H. & T. C. R. R. Co. v. Bremond, 66 Tex. 159; Bohn Mfg. Co. v.

Hynes, 83 Wis. 388; Bloxam v. Sanders (1825), 4 B. & C. 941, 948; Miles v. Gorton (1834), 2 Cr. & M. 504, 511; 2 Mechem on Sales, § 1470; Benjamin on Sales, § 796; 1 Jones on Liens, § 800.

"There can be no question but that the owner of a chattel may part with his property in and dominion over it, without receiving the pay for it; and he may deliver any chattel he sells, symbolically and constructively, as well as by corporal touch. If he sells without stipulation for credit, or some other act indicating his intention to rely for his pay on the promises of the purchaser, or some thing. other than the article contracted for, the law secures to him a lien on the chattel for its price, which he may assert at any time before the actual delivery to the vendee. So entirely does the rule of law follow the principle of equity in this

(b) Where the goods have been sold on credit, but the term of credit has expired. The lien which was suspended during the term of credit revives upon its expiration. This is so whether the buyer is solvent or insolvent.3

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(c) Where the buyer becomes insolvent before obtaining actual possession. Giving a term of credit is a waiver of the lien, but upon the implied condition that the buyer shall keep his credit

particular, that although there has been a constructive delivery to the purchaser, as to a middleman or a carrier upon a bill of lading, yet the case of real or apprehended insolvency in the vendee, it allows the vendor the privilege of stopping the goods, if he can, on their way to the vendee, and having regained possession to himself, to assert his lien for the unpaid purchase. It is essential to liens that persons claiming them have the possession of the chattel upon which they are claimed to operate. This is defined to be the right which one person possesses of detaining property placed in his hands belonging to another until some demand of his be satisfied. Beatson v. Shank, 3 East, 233, 235. They are allowed for the convenience of commerce and natural justice and are favored where there is an express contract, or where it is implied from the dealings of the factor. Green v. Farmer, 4 Burr, 2220. And in such cases, though the general property in the goods is vested in the purchaser, the lien or special property is vested in the vendor. Hodgson v. Loy (1797), 7 T. R. 440; Hinde v. Whitehouse, 7 East, 538, 558, 571." Jordan, Ellis & Co. v. James, 5 Ohio, 88, 98.

"When the sale is upon credit, the seller ordinarily retains no lien unless by special agreement." Haskins v. Warren, 115 Mass. 514, 533.

2. McElwee v. Metropolitan Lumber Co., 69 Fed. 302; Robinson v. Morgan, 65 Vt. 37; New v. Swain (1828), 1 Dans. & L. 193; Bunney v. Poyntz (1833), 4 B. & Ad. 568, 569; Dixon v. Yates (1833), 5 B. & Ad.

313, 341; Martindale V. Smith (1841), 1 Q. B. 395; Castle V. Sworder, 6 H. & N. 828; Miles v. Gorton (1839), 2 Cr. & M. 504, 510; Valpy v. Oakeley (1851), 16 Q. B. 941; Spartali v. Benecke (1850), 10 C. B. 212, 223; Field v. Lelean (1861), 30 L. J. Ex. 168; 2 Mechem on Sales, § 1521; Benjamin on Sales, § 825; 1 Jones on Liens, § 852. 3. Benjamin on Sales, § 825.

4. Bloxam v. Sanders (1825), 4 B. & C. 941; Bloxam v. Morley (1825), 4 B. & C. 951; Griffiths v. Perry (1859), 28 L. J. Q. B. 204; Ex parte Lambton (1875), L. R. 10 Ch. App. 414, 415; Gunn v. Blockow & Co. (1875), L. R. 10 Ch. App. 491, 501; 2 Mechem on Sales, § 1508, et seq.; Benjamin on Sales, § 677.

This right is very similar to the right of stoppage in transitu. Haskell v. Rice, 77 Mass. (11 Gray) 240; South Western Freight Co. v. Standard, 44 Mo. 71; White v. Welsh, 38 Pa. 396; Wanamaker v. Yerkes, 70 Pa. St. 443; Griffiths v. Perry, 1 E. & E. 680.

Vendee's insolvency is not a rescission or a breach of contract, but it releases the seller from his agreement to give credit and gives him a right as against the vendor and his creditors to hold the goods until the price is paid. Pardee v. Kanady, 100 N. Y. 121; Tuthill v. Skidmore, 124 N. Y. 148.

5. Spartali v. Benecke (1850), 10 C. B. 212, 223.

Unless there is a trade usage to the contrary. Field v. Lelean (1861), 30 L. J. Ex. 168 Ex. Ch.

6. Owens v. Weedman, 82 Ill. 409;

good and not become insolvent. If the condition is broken by the buyer's becoming insolvent, the lien revives and may be enforced as if never waived. This revived lien may be waived by extending a further term of credit or taking renewal notes, upon the same condition as to insolvency. The vendor's taking promissory notes or bills of exchange as conditional payment does not affect the revival of the lien, particularly where they have not been negotiated, and some cases hold that this is so even where they have been negotiated by indorsement and are outstanding at the time of insolvency.10 The giving of a receipt or a receipted bill does

Milliken v. Warren, 57 Me. 46; Arnold v. Delano, 58 Mass. (4 Cush.) 33; Hamburger v. Rodman, 9 Daly (N. Y.), 93; Bohn Mfg. Co. v. Hynes, 83 Wis. 388; Grice v. Richardson (1877), 3 App. Cas. 319; Martindale v. Smith, 1 Q. B. 389, 395; Dixon v. Yates, 5 B. & Ad. 313; Castle v. Sworder, 6 H. & N. 828; Miles v. Gorton (1834), 2 Cr. & M. 504; Valpy v. Oakeley (1851), 16 Q. B. 941; McEwan V. Smith (1849), 2 H. of L. 309; 2 Mechem on Sales, § 1520; 1 Jones on Liens, § 852.

The owner of land who sells wood standing thereon with authority to the vendee to cut it within a certain time has no lien on the wood for the price in case of the vendee's insolvency after the wood is cut and before it is removed. Douglas v. Shumway, 79 Mass. (13 Gray) 498, 502.

7. Arnold v. Delano, 58 Mass. (4 Cush.) 33.

8. McElwee v. Metropolitan Lumber Co., 69 Fed. 302, 37 U. S. App. 266; 2 Mechem on Sales, § 1517.

9. Milliken v. Warren, 57 Me. 46; Parks v. Hall, 19 Mass. (2 Pick.) 211; Thurston v. Blanchard, 39 Mass. (22 Pick.) 18; Arnold v. Delano, 58 Mass. (4 Cush.) 33, 46; Tuthill v. Skidmore, 124 N. Y. 148; Haskell v. Rice, 77 Mass. (11 Gray) 240; Clark v. Draper, 19 N. H. 419; Hamburger v. Rodman, 9 Daly (N. Y.), 93; Miles v. Gorton (1839), 2 Cr. & M. 504; Bloxam v. Sanders (1839), 4 B. & C. 941; 2 Mechem on Sales, § 1515; 1 Jones on Liens, § 853.

The rule holds in the case of notes of third persons who become insolvent before delivery of the goods. South Western Freight & Cotton Press Co. v. Stanard, 44 Mo. 71; Benedict v. Field, 16 N. Y. 595; Roget v. Merrett, 2 Caines (N. Y.), 117.

The owner of a large quantity of wood, lying in a pile on his own land, sold a portion of it, measured off and marked the part sold, and agreed that it might be removed within a year; gave the purchaser a bill of sale, and received in payment his promissory note payable in six months, before the expiration of which the purchaser became insolvent. Held, that the vendor had a lien on the wood until the price was paid or tendered, and that his right was not varied by accepting the note so long as the vendor was ready to deliver it to the promisor or his assignee on discharge of the lien. Arnold v. Delano, 58 Mass. (4 Cush.) 33.

Vendee gave notes for price, became insolvent before obtaining actual possession of goods. Held, vendor had a lien for the price against the vendees and their creditors. Bohn Mfg. Co. v. Hynes, 83 Wis. 388.

10. McElwee v. Metropolitan Lumber Co., 69 Fed. 302; Arnold v. Delano, 58 Mass. (4 Cush.) 33; White v. Welsh, 38 Pa. St. 396, 420; Wanamaker v. Yerkes, 70 Pa. St. 443; Valpy v. Oakeley (1851), 16 Q. B.

941.

not affect the revival of the lien." Where goods are in the hands of a warehouseman or other bailee, the giving of a delivery order does not divest the lien if the buyer becomes insolvent before delivery of the goods upon the order.12 This principle holds where the vendor is the warehouseman, notwithstanding he may have charged the buyer rent. The lien will revive on the insolvency of the buyer although the contract is for instalment deliveries,15 or for goods to be subsequently appropriated.16

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Insolvency in this connection means a general inability to pay one's debts." Formal adjudication of bankruptcy or assignment for benefit of creditors is sufficient, 18 but it is not necessary

11. "The note given by Warner as equivalent to cash being worthless, Clark & Co. never having parted with their possession, were entitled to countermand the delivery order and retain the lumber for the price as well as for the freight, by virtue of their lien as vendors, their having given a receipted bill, and the delivery order would not defeat this right. Keeler v. Goodwin, 111 Mass. 490, 492; Solomons v. Chesley, 58 N. H. 238; Voorhis v. Olmstead, 66 N. Y. 113; South Western Freight & Cotton Press Co. v. Standard, 44 Mo. 81; McEwan v. Smith, 2 H. of L. 309; Griffiths v. Perry (1859), 1 E. & E. 680." Arnold v. Carpenter, 16 R. I. 560, 562, 563.

12. Thompson v. B. & O. R. R. Co., 28 Md. 396; Keeler v. Goodwin, 111 Mass. 490; McEwan v. Smith, 2 H. of L. 309.

The rule applies to a government warehouse. Conrad .v. Fisher, 37 Mo. App. 352, 353, 8 L. R. A. 147.

13. McElwee v. Metropolitan Lumber Co., 69 Fed. 302; Tuthill v. Skidmore, 124 N. Y. 148; Arnold v. Carpenter, 16 R. I. 560; Bloxam v. Sanders, 4 B. & C. 941; Bloxam v. Morley, 4 B. & C. 951; Valpy v. Oakeley, 16 Q. B. 941; Griffiths v. Perry, 1 E. & E. 680; Ex parte Chalmers, L. R. 8 Ch. App. 289.

S sold L certain goods and gave him a bill of parcels and a certificate that he held them in storage and

took a note for the price in payment. L afterward offered to cancel the contract upon return of the note, and S agreed some days later. S tendered the note to L, who had in the meantime assigned the goods to his creditor. It was held that S had no lien for the price. Chapman v. Searle, 20 Mass. (3 Pick.) 38.

14. Miles v. Gorton (1854), 2 Cr. & M. 504.

15. Griffiths v. Perry, 1 E. & E. 680; Ex parte Stapleton (1879), 10 Ch. Div. 586, C. A.

"It would be strange if the right of the vendor who had agreed to deliver goods by installments were less than that of a vendor who had sold specific goods." Ex parte Chalmers (1873), L. R. 8 Ch. App. 289, 293.

16. Secomb v. Nutt, 53 Ky. (14 B. Mon.) 261, 268; Crummey v. Raudenbush, 55 Minn. 426; Reynolds v. Boston & Maine R. Co., 43 N. H. 580; Benjamin on Sales, § 773.

17. 2 Mechem on Sales, § 1519; Benjamin on Sales, § 837.

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'Permitting commercial paper to be dishonored by one engaged in commerce and his property to be attached in an action in which judgment is subsequently recovered by default, is evidence, if unexplained, of proof of insolvency." Tuthill v. Skidmore, 124 N. Y. 148.

18. Arnold v. Delano, 58 Mass. (4 Cush.) 33.

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