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the market price, at the time and place of delivery, and the contract price." This choice of remedies has been frequently asserted, and, with perhaps some modification, seems to have become an established doctrine of our law.1
§ 1619. Without stopping now to examine each branch of the rule separately, it may be said that the first remedy proposed is chiefly one against the buyer personally rather than against the goods, and will be considered in the following chapter. The second remedy proposed is one against the goods themselves, and under the general head of the seller's right of resale, both when the title has passed to the buyer and when it has not passed, will be considered in the sections of this chapter which immediately follow. The third remedy, of treating the contract as rescinded, and keeping the property as his own, will be considered later.2
§ 1620. Equitable remedies. In addition to these remedies, either by personal action against the buyer at law or by resale of the goods, there is doubtless a remedy in equity for the foreclosure of the seller's lien. Thus, for example, where, by proper notice, the seller has stopped the goods in transit, he may have the aid of equity to enjoin interference with his rights or to foreclose his lien upon the goods. "I should be prepared," said Lord Justice Cairns in one case,3 "to hold this to be a case entirely within the province of this court, and depending on the ordinary principles which regulate in equity the relations of mortgagor and mortgagee, whether of real or personal property, although, for obvious reasons, cases of this kind are more generally and more conveniently brought into a court of law."
1 See Hayden v. Demets, 53 N. Y. 426; Van Brocklen v. Smeallie, 140 N. Y. 70, 35 N. E. R. 415: Mason v. Decker, 72 N. Y. 595; Bagley v. Findlay, 82 Ill. 524; Ames v. Moir, 130 Ill. 582, 22 N. E. R. 535; Williams v.
Crosby Lumber Co., 118 N. C. 928, 24
2 See post, § 1681.
3 Schotsmans v. Lancashire, etc. Ry. Co. (1867), L. R. 2 Ch. App. 332.
THE SELLER'S RIGHT OF RESALE.
§ 1621. How here considered.-The question of the right of the seller to resell the goods may arise either where the original sale was complete and executed or where it still remained executory. Each class of cases will be separately considered.
1. When Title has Passed.
§ 1622. In general. The seller of goods who, notwithstanding the passing of the title, has them still in his possession, either because they have never passed beyond his control or because he has regained them by stopping them in transit, finds himself, upon default of the buyer to take and pay for them, whether because the latter refuses to recognize the obligation of the contract or because of his insolvency and consequent inability to perform, in possession of a right which has been seen to be at least a lien,' and, according to the better statement, a special property in the goods which now avails for his protection.
How much greater than a mere lien it is will be apparent when it is recalled that the ordinary common-law lien is a bare right of detention with no power of sale attached to make the right effective, while the lien of the unpaid seller carries with it the right to sell the goods for the satisfaction of the seller's claim.2
The difference between the two situations was
§ 1623. stated in a recent case as follows: "When the
1 See ante, § 1471.
before the New York court of appeals price of goods sold on credit is due
2 See this fully explained in Arnold v. Carpenter, 16 R. I. 560, 18 Atl. R. 174.
So also in Van Brocklen v. Smeallie, 140 N. Y. 70, 35 N. E. R. 415, it is said: "The right of the unpaid vendor is deemed sometimes analo
3 Tuthill v. Skidmore, 124 N. Y. 148, gous to the pawnee's right of sale, 26 N. E. R. 348.
and sometimes to the right of stop
and unpaid, and the vendee becomes insolvent before obtaining possession of them, the vendor's right to the property is often called a lien, but it is greater than a lien. In the absence of an express power the lienor usually cannot transfer the title to the property on which the lien exists by a sale of it to one having notice of the extent of his right, but he must proceed by foreclosure. When a vendor rightfully stops goods in transitu, or retains them before transitus has begun, he can, by a sale made on notice1 to the vendee, vest a purchaser with a good title. His right is very nearly that of a pledgee with power to sell at private sale in case of default." The occasion here referred to for the exercise of the right is that of the insolvency of the buyer, but the right extends to the case in which the buyer's default is wilful and he is seeking to escape the obligations of the contract, as well as to cases of mere insolvency.
§ 1624. To what kinds of property right of resale attaches. This right of resale extends to personal property of every description to every kind, in fact, which could be made the subject of the original agreement to sell. It extends, therefore, to an interest in a partnership whose assets embraced both real and personal property.3
§ 1625. When right may be exercised."There is a dearth of authority," said the supreme court of Illinois in a recent case, "as to what steps the vendor should take to enforce his lien after stopping the goods, to be accounted for, no doubt, as was said in Newhall v. Vargas,5 'by supposing that the vendor usually obtaining all the goods sold finds he is fully paid, or,
page in transitu. Whatever it be, it is at least a lien upon the property sold for the purchase price so long as it remains undelivered, which lien the vendor may enforce by a sale, and then recover any balance of the contract price unrealized."
Whether notice is indispensable is considered later. See § 1632, post.
2 Van Brocklen v. Smeallie, 140 N. Y. 70, 35 N. E. R. 415; Pollen v. Le Roy. 30 N. Y. 549.
3 Van Brocklen v. Smeallie, supra. 4 Shaw v. Lady Ensley Coal Co., 147 Ill. 526, 35 N. E. R. 620.
515 Me. 314, 33 Am. Dec. 617.
if not, that the object of pursuing the insolvent vendee is not worth the trouble and expense.' It is, however, well understood that the first duty of the vendor after regaining possession is to hold the goods until the purchase price becomes due under the contract of sale, so as to deliver them upon payment."
Duty to hold goods until price due. This duty, however, to hold the goods until the purchase price becomes due is not an invariable one. Suppose, for example, that the goods are perishable, or that the price is subject to fluctuations, or the term of credit is very long, or the goods are expensive to keep, while the buyer at the time fixed for delivery is insolvent: would the rule then apply? Upon this subject the supreme court of Ohio1 has said: "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 meantime, which, in many instances, must ensue if the seller is compelled to keep the goods shut up, and take the risk 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, it is said: 'But what, it will be said, if the goods be of so perishable a nature that the vendor cannot keep
1 Diem v. Koblitz, 49 Ohio St. 41, 29 N. E. R. 1124, 34 Am. St. R. 531; Williston's Cases, 426. See also West
v. Cunningham, 9 Port. (Ala.) 104, 33 Am. Dec. 300.
2 Vol. I, pt. 2, p. 1199.
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.""
§ 1627.. "It is insisted, however," continued the court, "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 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."
§ 1628. Buyer's right to redeem the goods. The assertion of a lien or the exercise of the right of stoppage2 does not, as has been already seen, operate as a rescission of the sale. Either act presupposes that the title is in the buyer and that the seller has simply a charge upon the goods to enforce the payment of the price. The vendee, therefore, at any time before his right has been foreclosed, may tender payment of the price and redeem the goods. As stated in one case, "the cases agree that the vendee may, at any reasonable time after the vendor has stopped the goods, enforce his claim to them by the payment of the purchase-money according to the terms of the original contract."
1 Ante. § 1523. 2 Ante, § 1612.
Patten's Appeal, 45 Pa. St. 151, 84 Am. Dec. 479.