the vendor to enable him to sue for the vendee's breach in not making full payment. The holding that, to entitle the seller to sue, he must offer to perform and request performance by the purchaser, is in accordance with the now generally recognized rule on the subject.

The general rule is that in contracts of bargain and sale, where there is no agreement for credit, the promise of the vendor to sell and deliver the property, and that of the purchaser to pay the contract price, are mutually dependent, and neither party is bound to perform without contemporaneous performance by the other. Payment or tender of the price is the condition upon which the purchaser can require delivery of the property; and delivery or tender by the seller is just as essential on his part if he would sue for the price, or for damages for its non-payment. If both parties are unable to perform, neither can maintain an action against the other; and therefore, while it is necessary for the vendor, if he would sue, to offer performance on his part, he is in a position to defend without doing so, if the vendee is not able to perform. In Reader v. Knatchbull, 5 Term R. 218, an application was made of the rule which is much in point. The plaintiff declared upon an agreement by the defendant to deliver to him a quantity of Manchester cottons. The defense was that after the making of the contract the plaintiff had compounded with his creditors. Mr. Justice Buller directed the jury "that, if they believed the plaintiff was really in such a situation as to be unable to pay for the goods, that was a good defense in point of law to the action; and the jury accordingly found a verdict for the defendant." 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 then stop performance of the contract on his part. Nor is the rule varied by the fact that the vendee has given his notes or bills or other securities for the price, payable at the end of the time for which the credit is allowed. The vendor, in such case, incurs no liability by not delivering the property, unless the vendee pay or tender the contract price. But, in order to sue the vendee, he should offer to deliver according to the contract. Such is the scope of the rule laid down in Mining Co. v. Brown, 124 U. S. 385, 8 Sup. Ct. 531, 31 L. Ed. 424, where it is held: The insolvency of the vendee in a contract for the sale and future delivery of personal property in installments, payment to be made in notes of the vendee as each installment is delivered, 'is sufficient to justify the vendor for refusing to continue the delivery, unless payment be made in cash;' but it does not absolve him from offering to deliver the property in performance of the contract, if he intends to hold the purchasing party to it. He cannot insist upon damages for non-performance by the insolvent

without showing performance on his own part, or an offer to perform, with ability to make the offer good.

The rule must work both ways. The rights and obligations of the vendor and vendee are correlative. If the insolvency of the vendee is sufficient to justify the vendor in refusing to deliver the property unless payment be made in cash, it follows that the vendor incurs no liability by his refusal, and therefore no right of action accrues to the vendee, unless payment be made by him; and if the vendor cannot insist upon damages for the vendee's non-performance without showing an offer on his part, with the ability, to perform, so neither can the vendee, if he is without the ability to perform, recover from the vendor. The observations of Gholson, J., in Benedict v. Schaettle, 12 Ohio St. 520, 521, are in point, and are in harmony with this view of the subject. He says: "If the true principle of the right of stoppage in transitu be found in that certainly just rule of mutual contract by which either party may withhold performance on the other becoming unable to perform on his part; if the foundation of the rule be a just lien on the goods for the price until delivered,-an equitable lien adopted for the purposes of substantial justice,-then it is the ability to perform the contract, to pay the price, which is the material consideration. If there be a want of ability, 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 contract of sale. Substantially to the vendor who is about to complete delivery, and abandon or lose his proprietary lien, the question is, can the vendee perform the contract on his part? has he, from insolvency, become unable to pay the price?" And in another part of the opinion he further says: "The rights of a fair vendee will be sufficiently protected by giving him an indemnity when the right of stoppage in transitu is exercised upon rumor or suspicion without any foundation in fact, and by depriving the vendor, in all cases, of any chance of speculating upon the goods, by requiring them to be delivered or accounted for to the vendee or his assignee on the payment or tender of the agreed price."

But it is contended that, while the vendor may refuse to deliver the property to the insolvent vendee, he is obliged to keep it for the vendee until the time of the credit expires, and if he resell before that time the vendor may have his action for damages. When, by the contract, the property is to be delivered at a future day, and the vendor sells it to another before that time arrives, the vendee, being able to perform, may have an immediate action; for the vendor, by thus disabling himself from performing by delivery at the proper time, commits a breach of the contract, and the vendee need not wait until the time for the delivery arrives. But that rule has no application here. The obligation of the vendor, under a

contract like that between the parties in this case, is to deliver the goods at the time stipulated in the agreement, which is at once, upon the receipt or tender of the purchaser's commercial paper, or within a reasonable time,-not at the time to which the credit is extended. The right of the vendee, is to receive the goods at the time the vendor contracts to deliver them, and he is not bound to receive them at any other time. The breach, therefore, on the part of the vendor, if there be one, consists in his failure to deliver the goods according to the contract, and occurs at that time, and not upon a resale subsequently made; and the vendee's cause of action arises, if at all, upon the failure to deliver, and not on the resale.

In the case now before us the averments of the defendant's answer, which on the trial he was not permitted to prove, though he offered to do so, show that at the time the goods were to have been delivered, according to the contract of sale, the plaintiffs were insolvent and their paper dishonored, so that the condition upon which their right to the goods depended had not been performed by them, and they were without the necessary ability to perform the same. Upon what just principle can the seller, in such a case, be required to hold the goods until the expiration of the credit? It is true that at that time 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. But, as we have seen, it is part of the vendee's engagement that he will maintain his credit, which is broken by his insolvency. And it would be unjust to require the vendor to sustain the loss resulting from the destruction or deterioration of the goods in the mean time, which in many instances must ensue if the seller is compelled to keep the goods shut up, and take the risks of the future solvency of the buyer.

The injustice of such a requirement is conceded where the goods are of a perishable nature; and the vendor, it is now settled, is not obliged to keep goods of that character until the termination of the credit. In the notes to Lickbarrow v. Mason, in Smith's Leading Cases, (volume 1, pt. 2, p. 1199), it is said: "But what, it will be said, if the goods be of so perishable a nature that the vendor cannot keep them until the time of credit has expired? In such a case it is submitted that courts of law, having originally adopted this doctrine of stoppage in transitu from equity, would act on equitable principles by holding the vendor invested with an implied authority to make the necessary sale."

It is insisted, however, that the right of sale in such cases constitutes an exception to the rule. In our opinion the reasons upon which the exception rests, if it be such, should make the exception

the general rule. The value of many kinds of merchandise, not perishable, depends largely upon their being in the market at the appropriate seasons, and to supply temporary demands; and, if not available for those purposes at the proper time, they become comparatively worthless, or so reduced in value as to entail great loss, which may be less only in degree, though greater in amount, than where the goods are perishable; and it is no more just or equitable to subject the vendor to the loss in the one case than in the other. The right of resale ought not, we think, be made to depend upon the degree or extent of the loss that must ensue if it should be denied. It rests upon a different principle, and grows out of the failure of the vendee to keep his engagement. Not that the contract is thereby rescinded, for that would defeat the vendor's remedy for damages upon resale after due notice, but that he may elect to treat the agreement for the credit as at an end, on account of the vendee's default. We see no good reason for holding that the rights of the seller are any the less where the sale is upon credit, and the property is retained by him on account of the buyer's insolvency, than they would be if the sale were for cash, and the vendee was unable to pay the price agreed upon. In either case the incapacity of the vendee to perform his part of the agreement-and insolvency is incapacity-warrants the vendor in withholding performance on his part.

We are therefore of opinion the trial court erred in excluding the evidence of the plaintiffs' insolvency, and in charging the jury as shown in the statement of the case, and also in refusing the instruction requested by the defendant therein contained. Counsel have argued a question relating to the charge of the court on the measure of damages; but, as no exception was taken to the charge on that subject, it will not be further noticed.

For the errors mentioned above, the judgments below are reversed, and the cause remanded for further proceedings.

NORTHERN GRAIN CO. v. WIFFLER et al.

(Court of Appeals of New York, 1918. 223 N. Y. 169, 119 N. E. 393, 7 A. L. R. 1370.)

Action by the Northern Grain Company against Joseph J. Wiffler and others. From a judgment of the Appellate Division (168 App. Div. 95, 153 N. Y. Supp. 723) for defendants on an agreed statement of facts, plaintiff appeals. Reversed, and judgment directed for plaintiff.

HISCOCK, C. J. This appeal involves a consideration of the right of stoppage in transitu of goods sold on credit and shipped by a common carrier. The question of the existence of the right is.to be determined upon an agreed statement of facts.

Plaintiff sold to one Wiffler on credit a carload of oats which were shipped to the latter over the line of the defendant railroad company. A bill of lading covering the shipment was forwarded with a draft for the purchase price of the oats, and upon acceptance by the vendee of the draft the bill of lading was delivered to him. He presented the same at the office of the defendant railroad company, where it was received and marked, "Canceled by delivery." "Thereupon" the vendee examined and was dissatisfied with the condition of the oats and "thereupon" withdrew the bill of lading from the railroad company, caused the words, "Canceled by delivery," to be stricken from the face of the bill and "thereupon" returned it to the plaintiff with the statement that he refused to accept the oats or take delivery thereof by reason of their condition and that he rejected the same.

Nothing more was done by which there is claimed to have been accomplished a delivery to or acceptance by the vendee of the oats. These, after remaining in a car in the possession of the railroad company for six months, were sold at public auction to satisfy its lien for transportation charges and the surplus of the proceeds over such charges was held by the railroad company and is the subject of the present controversy.

The draft which had been accepted by the vendee was not paid at maturity, and an action was commenced against him thereon by the vendor and a judgment recovered which has never been satisfied. In such action the vendee alleged that "the draft was given by defendant in payment of a certain carload of oats which plaintiff sold to the defendant and that the same were good, marketable, and useable (thus written in the agreed statement), and that when defendant received said. carload the same were old and musty, and could not be sold and used, and were of no value whatsoever, and for that reason the note was given without consideration."

Intermediate the commencement of this action and entry of judgment the vendee made an assignment for the benefit of creditors to the

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