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This order was transferred upon a resale to the sub-purchaser, but before the possession had actually been changed the original buyer failed and the seller refused to deliver the goods to the sub-purchaser. It was urged in behalf of the latter that the seller was estopped from asserting his lien by reason of the order given, and that the delivery order was to be subjected to the same rules as a bill of lading; but the House of Lords repudiated this position, saying that it was one “ for which no authority in the usage of trade or in the law can be shown."

§ 1506. - In a later English case,' however, the document took the form of a “warrant” for iron, which recited that the iron would not be delivered to any one except the holder of the warrant, and declared that the iron was deliverable f. o. b. to the purchasers or to their assigns by indorse

R. & Co. gave their notes as agreed under the contract, and inasmuch as for the purchase price. The goods against R. & Co. defendants had the were not in fact manufactured at right to refuse to deliver the goods this time. On receipt of the order without payment therefor, and after and memorandum, De L. gave his that firm became insolvent they had own notes and the acceptances of the same right as against De L. or third persons to R. & Co. in payment his assignee. for the goods. R. & Co. soon after Also held (Ruger, C. J., Andrews stopped payment, and made an as- and Danforth, JJ., dissenting), that signment for the benefit of creditors. defendants were not estopped from Defendants refused to deliver the showing the fact that no title passed, goods under the order unless they or from denying the legal right of were paid the purchase price, and plaintiff, as assignee of De L., to a offered to surrender the notes re- delivery of goods of the same charceived by them. In an action upon acter and quality as described. the contract to recover the value of Also held (Ruger, C. J., Andrews the goods, held (Ruger, C. J., and An- and Danforth, JJ., dissenting), that drews and Danforth, JJ., dissenting), the question was one of the law for that it was

an executory, not an the trial court, and that a submission executed, contract, and so passed no thereof to the jury was error. title to the goods specified; that the Kimberly v. Patchin (19 N. Y. 330); subsequent transactions between the Briggs v. Sizer (30 id. 647); Knights parties did not transform said con- v. Wiffen (L. R., 5 Q. B. 660), were tract into an executed one; that the distinguished. delivery of the order to De L. vested 1 Merchants Banking Co. v. Phoeno right of property in him, but nix Bessemer Steel Co., L. R. 5 Ch. simply amounted to an assignment Div. 205. to him of the rights of R. & Co.

ment thereon. There was also evidence that the form of this warrant had been settled by eminent counsel many years before for the very purpose of showing that the goods were free from the seller's lien, and that by the custom of the iron trade such warrants passed from hand to hand and were supposed to give a title to the goods free from any vendor's lien; and it was held that the seller was estopped, as against a sub-purchaser who had bought the iron in reliance upon the warrant and the custom, from setting up a lien.

§ 1507. Warehouse receipts in the United States.In the United States, in pursuance of custom and the evident intention of the parties, warehouse receipts, like bills of lading, are usually regarded as representatives of the goods described in them,' and a transfer of the receipt to a sub-purchaser, who acts in good faith and in ignorance of the seller's claims, will have the same effect in divesting the lien as would result from an actual delivery of the goods themselves. As against such a purchaser, who has relied upon its representations, the statements in the receipt that the goods will be delivered to the holder of it operate an estoppel either as against the warehouseman who issued it where he is the seller, or against a

1 See Commercial Bank v. Hurt, 99 Ala. 130, 12 S. R. 568, 19 L. R. A. 701, 42 Am. St. R. 38, Willis. Cas. 595; Burton v. Curyea, 40 Ill. 320, 89 Am. Dec. 350; Second Nat. Bank v. Walbridge, 19 Ohio St. 419. 2 Am. R. 408; Davis v. Russell, 52 Cal. 611, 28 Am. R. 647; Solomon v. Bushnell, 11 Oreg. 277, 3 Pac. R. 677, 50 Am. R. 475; Durr v. Hervey, 44 Ark. 301, 51 Am. R. 594; Merchants' & M. Bank v. Hibbard, 48 Mich. 118, 11 N. W. R. 834, 42 Am. R. 465; Rice v. Cutler, 17 Wis. 351, 84 Am. Dec. 747.

an invoice, the other a warrant. The invoice contains every element which is required to make it an ordinary document of title on which the purchaser could obtain the goods: 'Messrs. Gilead A. Smith & Co. Bought of the Phoenix Bessemer Steel Company, Limited, stacked in these works to your order, to be delivered f. o. b. at Liverpool according to your instructions;' and then follow the details of the steel rails. That is an ordinary document of title, an ordinary invoice sent by a vendor to a purchaser. But they gave to Gilead A. Smith & Co., at their request, at the same time, another document, the iron warrant, the thing which the trade want for

2 Merchant Banking Co. v. Phoenix Bessemer Steel Co., L. R. 5 Ch. Div. 205, where it is said of the sellers: "They issued with their first parcel of goods two documents: the one is

former holder of the receipt who would claim a lien against a purchaser from his vendee.?

4. Rerival of Lien on Insolvency of Purchaser. $ 1508. Revival of lien — Insolvency of purchaser before actual delivery. With the actual and unconditional delivery of the goods to the purchaser, the lien, as has been seen, is at

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the purpose of either raising money at the same time. I say, is it rational by pledging or selling, and that is a to impute any other purpose than totally different thing. It is treated really the very purpose that it was in a totally different way. It begins given them for, namely, the purpose with these words: “The undermen- of pledging or selling, as I have no tioned rails will not be delivered to doubt it was? Therefore, I say, in any party but the holder of this war- this particular case I think the effect rant.' Surely that means they will of the two documents and the mode be delivered to the holder; it never of request is to show that it was means we will keep them and not really intended by the vendors, and deliver them to anybody, but sell that is special in this case.” them for our own benefit and deliver 1 Thus in Fourth National Bank v. them to the purchaser. The very St. Louis Cotton Compress Co., 11 form of the warrant shows the pur- Mo. App. 333, the seller had cotton pose. In my opinion, considering in warehouse represented by warethat they had already given a docu- house receipts. He delivered these ment of title which was quite clear to his vendee conditionally, but the and independent and satisfactory to vendee wrongfully pledged them to the purchaser, this was something an innocent party. Said the court: they were issuing for a different pur. “The general rule, of course, is, that pose. It goes on, 'stacked,' etc.; in where the vendor surrenders to the the same way, we had 'stacked' in vendee, or to the agents of the vendee, the invoice; but the next words are, the possession of the subject-matter *Warrant for these rails deliverable of the sale, whether by a manual and (f. o. b.) to Messrs. Gilead A. Smith & actual or by a symbolical delivery, Co. of London, or to their assigns by the lien is defeated, provided that indorsement hereon.' Does not that the vendor does entirely and volunmean they are warrants for delivery, tarily resign possession of the goods. and is not the meaning of the thing But there are cases in which the itself on the face of it, although it vendor, as between vendor and may not destroy per se, standing vendee, may retain a lien which he alone, if it had been a single docu- will not be entitled to as against inment of title, the vendor's lien, when terests of third persons which may you consider it is an additional docu- intervene. By delivering the warement given at request, and that you house receipts to the freight line, the must impute some purpose for giv- vendor in the present case seems to ing two documents differing in form have changed the control and do

an end, and the goods cannot be regained although the purchaser was then or has since become insolvent. There are, however, many cases in which the seller has expressly or impliedly given his consent to a delivery, but in which no actual delivery as yet has taken place, and it becomes an important question to determine whether the seller may withdraw that consent and prevent an actual delivery until the goods are paid for.

§ 1509. Where the seller, who has parted with his title, consents that the goods may be delivered without receiving payment for them or security for the price, he obviously relies upon the credit of the buyer, and the fact that the buyer is in good credit at the time he is to receive the goods is clearly the basis of the consent. If, then, before the consent has act ually been consummated by a delivery, the seller discovers that the buyer is insolvent, the whole inducement to the consent is gone and the consent should be no longer operative.

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§ 1510. Insolvency of buyer before expiration of credit.— The case of a sale of goods upon a term of credit affords an excellent illustration of the rule. By giving credit for the price the seller manifests his willingness that the buyer may take the goods at once and pay for them at a subsequent time. He thus consents to waive and, if the consent is followed by an actual delivery, he does most unequivocally waive 'But," as was clearly stated by Chief Justice Shaw,' "the law, in holding that a vendor, who has thus given credit for the goods, waives his lien for the price, does so on one implied condition, which is that the vendee shall keep his credit

his lien. 66

minion of the property, and he put it in the power of the vendee to do what he actually did, that is, to take the symbol of the property, which, so far as the rights of third persons are concerned, was the property itself, and to pledge it for value under such circumstances as would naturally lead the most vigilant to believe

that the property was his own to sell or pledge; we do not see, therefore, how it can be said that, as to third persons, such as the plaintiff in this case, the vendor retained his lien."

In Arnold v. Delano, 4 Cush. (Mass.) 33, 50 Am. Dec. 754, Adam's Cas. 7.

good.” If, therefore, before the goods have actually been delivered, the buyer proves to be insolvent, the consent to deliver them without payment may be withdrawn, the lien revives, and the seller may hold the goods to secure the payment of the price.

$ 1511. — The fact that the goods have been measured, weighed, marked or set aside for the buyer, so that the title to them may have completely passed, is not material — the rule supposes that the title may have passed; but if possession of them has not actually been transferred — if they still remain in the custody of the seller or under his control,- he may refuse delivery until the price is paid.

§ 1512. Insolvency of buyer before delivery order complied with. The same results ensue where the consent has been given in the form of a delivery order either upon the seller himself or his warehouseman or bailee; it may be revoked upon discovery of the insolvency of the buyer before an actual delivery has taken place. The delivery order is, at

. most, but one form of constructive delivery, and, as is said in a recent case? in which the subject was elaborately considered, it is abundantly settled that, as between the vendor and the vendee, where the rights of subsequent purchasers from the vendee are not involved, the lien is not divested by any species of constructive delivery, so long as the vendor retains the actual custody of the goods, either by himself or by his servant or agent.

§

$ 1513. - Thus, where the seller is himself the warehouseman and delivers to the buyer a statement, certificate or delivery order showing that the seller now holds the goods as warehouseman for the buyer or transfers the goods upon his books to the name of the purchaser, still if before payment and actual delivery the buyer becomes insolvent, the lien of the vendor attaches and he may hold as against the assignees of the in

See post, $ 1508 et seq.

2 Conrad v. Fisher, 37 Mo. App. 353, 8 L. R. A. 147.

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