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CHAP. II.

STOPPAGE IN TRANSITU.

Use of the The term stoppage in transitu is occasionally used to signify any act done by the owner of goods, or by a party entitled to a lien upon goods, by which some adverse right is prevented from vesting. Thus, the expression has been used, in reference to the countermanding of a consignment in order to prevent the general lien of a factor from attaching upon the goods (a);—also, in reference to a bailee, after having parted with the possession, resuming it in order to regain his lien (b) ;—also, in reference to the countermanding of a remittance sent by a debtor to a creditor, who had subsequently become insolvent (c) ;—and in a few

Proper sig- other instances (d). But it has been well ob

nification. i / \ l i l -it

served (e), that the term has now acquired a distinct technical meaning, to which it ought to be

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confined; to wit, the right, which an unpaid vendor possesses, of stopping goods on their way to an insolvent vendee.

The doctrine of stopping in transitu, it is said, ?ris!nf owes its origin to Courts of Equity, but has since been adopted and established by a variety of decisions in Courts of Law, and is now regarded with favour as a right, which those Courts are always disposed to assist (/). The first case, in which the doctrine was acknowledged in a Court of Law, seems to be the case of the Assignees of Burghall v. Howard (g). The action was brought by the assignees of the bankrupt-vendee against the defendant (in whose vessel the goods had been shipped), for refusing to deliver the cargo on the ground that the delivery had been countermanded by the consignor. Lord Mansfield nonsuited the plaintiffs, observing, that he had known it several times ruled in Chancery (A), that, where the consignee becomes a bankrupt, and no part of the price has been paid, it was lawful for the consignor to seize the goods before they came to the hands of the consignee; and that this was decided, not

(/) Selw. N. P. 1275, (8th Ed.); 4 Bing. 519.

(o) Coram Lord Mansfield, C. J., 32 Geo. II., cited 1 H. Bl. 366 n. See per Lord Loughborough, Mason v. Lickbarroiv, 1 H. Bl. 366.

(A) See Snee v. Prescott, cor. Lord Hardwicke, Ch., 1 Atk. 248; D'Aguila v. Lambert, 2 Eden, 75; Ambl. 399.

upon principles of equity only, but the general laws of property («').

The vendor's right of stopping the goods in transitu may be considered under the three following heads:—

I. Who is entitled to exercise the right of stopping goods in transitu.

II. Under what circumstances the vendor may stop the goods.

III. When the transitus is determined.

who emi- I. Who is entitled to exercise the Right of stopping

tied to stop .. . ° J ft b

goods. Goods in Transitu.

Quasi It is sufficient, to entitle a party to stop goods

in transitu, that he stands in relation of vendor

(i) The effett of stopping the goods in transitu, where possession has been actually re-obtained, seems to be, entirely to rescind the contract, and to revest the property absolutely in the vendor: on this principle, it is decided that the vendee (or his assignee on his bankruptcy) no longer possesses an insurable interest in the goods; Clay v. Harrison, 5 Man. & Ry. 17; S. C. 10 B. & C. 99. But see 7 T. R. 445; 1 Campb. 109; 1 M. & Payne, 892; and in Mont. & Gregg, B. L. 453, note (d), it is said, that the vendor is only entitled to the purchase-money, and the bankrupt's assignees may claim the goods on payment of the price. If there is any distinction, it seems to depend on the question, whether the vendor had merely exercised the right of stoppage in transitu in law; or, whether he had performed any overt act of rescission (which he might do as long as the contract was executory), such as actually retaking possession. See the same case of Clay v. Harrison, reported in Lloyd & Welsby, Merc. Ca. 104, and ib. 113 n. And see Chit. Contracts, 342, (2d Ed.).

quoad the bankrupt; therefore, where the party receiving the order procured the goods from a third person on his own credit, and shipped them on the account of the bankrupt, drawing bills upon the latter for the price, it was held, that the shipper was in effect the seller, and was therefore justified in authorizing his agent to stop the goods (A). So, the agent, on whose credit the goods were sold, may, in order to protect himself, prevent them from vesting in the vendee-principal, by giving them a new direction, adverse to the principal and contrary to the course of dealing for which he as agent had ordered them (/). But a mere surety But not has not such power; therefore, where the party meresuretystopping the goods had no interest in the original purchase, but had agreed to accept bills drawn for the price upon receiving a commission on the amount, it was held, that he had no right, and that the assignees of the bankrupt were entitled to recover the proceeds (m).

An agent duly authorized may stop the goods on Agent. behalf of his principal. But it seems that, where the goods have been stopped by a third party in favour of the consignor, his authority for the particular act must have been received before obtaining possession of the goods: if there was no privity

(k) Feize v. Wray, 3 East, 93; Hawkes v. Dunn, 1 Tyrwh. 413.

(0 See per Bayley, B., 1 Tyrwh. 418, 419.

\m) Siffken v. Wray, 6 East, 371; S. C. 2 Smith, Rep. 480.

at the time between him and the vendor-principal, a subsequent assent and approval will not make it a due exercise of the right (n). indorsee of A party, to whom the vendor indorses the bill irlg." of lading for valuable consideration, subsequently

to the original consignment, will have the same right of stopping the goods as the vendor himself; but an indorsee without consideration is not entitled to stop the goods (o).

II. Under what circumstances the Vendor may stop the Goods.

when the The general rule is, that an unpaid vendor may be stopped, always stop the goods, in the event of the insolvency of the consignee, at any time before they have reached the latter (p). The right of stopping in transitu is not founded merely on a rescission of the contract, but is an equitable lien adopted by the law for the purposes of substantial justice (q). Part-paj- Therefore, part-payment for the goods does not not pre- preclude the vendor's right as to the residue, but only operates pro tanto{f). So, the right may be

(«) Siffken v. IVray, 6 East, 371. [The Court, however, did not give a positive opinion to this effect, because the agent's taking was not adverse, but under an agreement with the bankrupt.]

(o) Waring v. Cox, 1 Camp. 369; Abb. Ship. 227.

(p) See Birkett v. Jenkins, cited Cowp. 296.

(q) Per Lord Kenyon, C. J., 7 T. R. 445.

(/') Hodgson v. Loy, 7 T. R. 440; Wiseman v. Vavdeput, 2 Vern. 204.

elude.

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