CHAPTER X. OF STOPPAGE IN TRANSITU; AND HEREIN. (Ss.) 1. What it is, p. 417. 2. In what cases, generally, Goods may be Stopped in Transitu, p. 420. 1. What Stoppage in Transitu is. WHEN goods have been shipped upon credit, and the consignee has become a bankrupt, or failed (a), the law, in order to prevent the loss that would happen to the consignor by the delivery of them, allows him, in many cases, to countermand the delivery, and, before or at their arrival at the place of destination, to cause them to be delivered to himself, or to some other person for his use. This is usually called Stoppage in Transitu. This practice was first sanctioned and established in the Court of Chancery, by dismissing claims of the assignees of a bankrupt against a foreign merchant or his agent (b), and in one case by a decree in favour of a foreign merchant, plaintiff in that Court, the master having refused to deliver the goods either to him or to a trustee for the creditors of the consignee (c). Such a Court, however, will not, by injunction, prevent the sailing of a ship in order to enable a consignor to resume his goods, which might be highly inconvenient to other shippers and persons, but leave him to his remedy at law, if the goods be improperly converted (d); for this right of stopping in transitu has been frequently recognised and carried into effect by (a) See as to the meaning of "failure" and "insolvency," as applicable to the right of Stoppage in Transitu, Biddlecombe r. Bond, 4 A. & E. 332; Vertue v. Jewell, 1 Campb. 31; Newsom v. Thornton, 6 East 17; Dixon v. Yates, 5 B. & Ad. 315. Mr. Smith, in his Compendium of Mercantile Law, p. 501, adverting to these cases, expresses an opinion that the term insolvency (when used with reference to this branch of the law) is satisfied by general inability evidenced by stoppage of payment. The EE vendor may also of course refuse to deliver. -Dixon v. Yates, 5 B & Ad. 313. Gibson v. Carruthers, 8 M & W. 321. M'Ewan v. Smith, 2 H & L. 309. (b) In the case of Wiseman v. Vandeput, 2 Vern. 203. Snee v. Prescott, 1 Atk. 245. See the judgment of Lord Abinger in Gibson v. Carruthers, 8 M. & W. 321. (c) D'Aguila v. Lambert, Amb. 399. It does not appear by the report of this case who the defendant was. (d) Goodhart v, Lowe, 2 Jac. & W. 349. the Courts of Law. It is founded on principles of natural justice and equity. But the law of England is in this respect more favourable to the transfer of property, the great subject of commerce, and less attentive to the interest of the seller of goods, than the ancient Civil Law, or the modern law of many European nations, which is chiefly founded on the Civil Law (e). For the Civil Law did not in general consider the transfer of property to be complete by sale and delivery alone, without payment or security for the price, unless the seller agreed to give a general credit to the buyer for it, but allowed the seller to reclaim the goods out of the possession of the buyer, as being still the seller's own property (ƒ). And by the general law of France, in the case of insolvency, "The seller, who has sold a thing, and still lies out of the money which he was to have for it, if he finds the thing that he sold in the hands of the buyer, may seize on it, and he is not obliged to share it with the other creditors of the buyer. And it would be the same thing-nay, and with much more reason-if the owner of the thing had given" (delivered) "it to the debtor to sell for him" (g). Whereas, by the general law of England, when goods have been delivered into the actual or constructive possession of the buyer, they cannot be reclaimed (h), although, if found remaining unsold in the hands of an insolvent factor, they may be , reclaimed, because a delivery to a factor does not of itself alter the property. The law of England, however, will lend its aid to carry into effect the more enlarged rule of equity, which exists in another country, upon a transaction taking place there, as appears by the following case: By the law of Russia, "If, in case of unpaid debts or bankruptcies, anybody has reason to suspect that the debtor or bankrupt has any thoughts of making the creditor lose, and therefore loadeth on board of ship or vessel goods or cargo; in such a case the creditor is to give notice in town (i) to the head Judge of the Court (in (e) Emerigon, speaking of the assignment of a bill of lading, says, "Mais ces sortes de cessions déferent au cessionnaire un simple droit ad rem, qui lui donne pouvoir de requérir la délivrance des effets indiqués, sans le mettre en possession effective de la chose même. Ainsi, que jusqu'à ce que la tradition réelle ait été fait dans un temps utile au porteur du connoissement, il n'a qu'une action personnelle, qui est subordonnée aux droits du tiers. Je crois donc qu'une pareille cession ne sauriot nuire, ni au privilège du vendeur primitif, non payé du prix, ni au privilège du donneur à la grosse, ni aux droits de la masse des créanciers. Telles sont nos régles. Le connoissement n'a jamais été considéré parmi nous comme un papier négociable. Le transport du titre est une tradition feinte, qui s'évanouit par la faillite ou l'insolvabilité notoire du cédant."-Emerigon, tom. 1, p. 319, quoted by Dr. Robinson in a note to the Constantia, 6 Rob. Ad. Rep. 325. (f) Quod vendidi, non aliter fit accipientis, quam si aut pretium nobis solutum sit, aut satis eo nomine datum, vel etiam fidem haubuerimus emptori sine ulla satisfactione.-Dig. 18, 1, 19. See also id. eod. tit. 53, & Dig. 19, 1, 13, 8, & 14, 4, 5, 18. (9) Domat's Civil Law, book 4, tit. 5, sec. 2, art 3. See also the notes of the same author on that article, and on book 3, tit. 1, sec. 5, art. 3. Where it appears that by the custom of some parts of France, a person who has sold goods, expecting to be paid immediately, may, if he is not paid, retake the goods even out of the possession of a subsequent purchaser. (h) In case of a sale of land, if the purchase.money is not paid, the Court of Chancery considers the purchaser as a trustee for the seller.-Pollexfen v. Moore, 3 Atk. 272; and see Blackburn v. Gregson, 1 Brown's Rep. in Chancery, 420. (i) Quære, whether this should not be "towns" or "a town ?" districts to the Chief), that the ship or vessel, or goods, or the whole cargo, should be retained time enough until the full payment is made to whom due." "In consequence whereof, and by virtue of that law, if the seller or shipper, in case of bankruptcies, can identify that the merchandise belonging to him is in Russia, in ships, warehouses, or wherever they may be, in such a case the goods must be given back to the sellers or shippers, being their property, and cannot be brought in concurs" (k); that is, into the general mass of the buyer's effects to be distributed among his creditors. Messrs. Bohtlingh and Co., of St. Petersburgh, in pursuance of directions from one Crane, of London, and as factors for him, shipped a cargo of Russian commodities at St. Petersburgh, on board a ship chartered by Crane, and sent invoices thereof, and a bill of lading of part to him; but learning before the ship's departure that some bills, drawn by them on him in consequence of a previous transaction, were unpaid, they procured from the master of the vessel bills of lading to their own order, and sent them to a friend in London, and informed Crane that he might have the bills of lading upon giving security to their friend for payment of the bills of exchange to be drawn for the amount of the goods; otherwise their friend would sell the goods on Crane's account, and apply the proceeds in discharge of the bills of exchange. Crane, in fact, had committed an act of bankruptcy before any of the goods were shipped. On the arrival of the ship in London, his assignees demanded the goods of the master, and offered to pay the freight, &c.; but the master delivered them to the friend of Bohtlingk and Co. on their account, in conformity to their endorsement of the bills of lading. Whereupon the assignees of Crane brought an action against the master: and the Court held, that the law of Russia in this case ought to prevail, although Bohtlingk and Co. had not actually taken the goods out of the ship, or instituted legal process for the recovery of them; considering the master's signature of bills of lading to their order to be equivalent to a stopping in transitu, or re-delivery to them, and to have rendered it unnecessary for them to have recourse to the compulsory process of the law (1). In this case recourse was had to the law of Russia to sustain the right of the consignor, because the ship was understood to have been chartered by the consignee, and it was then supposed that the right of stopping in transitu did not apply to the case of goods shipped on board a vessel of that description. In another case, however, that arose out of the same transaction, wherein it appeared that the contract was not made in terms of letting and hiring, but contained only that the ship should proceed to Petersburgh, and there load from the factors of Crane a complete cargo, it was held that the shippers might stop the goods by the law of England, without the aid of the Russian law (m). (k) Mercantile Navigation Laws of Russia, published 25th June, 1781, sec. 138. (m) Bohtlingk v. Inglis, 3 East, 381. 2. In what cases generally goods may be stopped in Transilu. It should be observed, that the act of stopping in transitu is an adverse act on the part of the consignor against the consignee. If a consignee, after an act of bankruptcy, deliver up the bills of lading to another person, upon his undertaking to apply the proceeds of the goods in discharge of bills of exchange drawn for the price, and he accordingly receive the goods, he cannot retain them against the assignees of the bankrupt, although the original consignor afterwards approve of the arrangement; and it seems that the law would be the same, even if the person with whom such an arrangement should be made were at the time an agent of the consignor (n). But if the delivery of the goods be countermanded by the consignor, the goods having been consigned upon credit, and the consignee having failed or become bankrupt, it is the duty of the master to obey the countermand, and deliver the goods, not to the consignee, but to the order of the consignor. Such countermand and substitution of a new consignee are most easily effected, if the bill of lading is originally made for delivery to the order of the consignor, because in that case the consignor may, if he has reason to suspect the failure, or is afterwards apprised of it, send another part of a bill of lading to a correspondent at the port of destination, endorsed in blank, or for delivery to him. But the countermand may also be made, in the event before mentioned, if the consignee is originally named in the body of the bill of lading (0); for the right of stopping in transitu does not depend upon a supposition that the property has not passed from the consignor; but, on the contrary, is founded on an admission that the property has become vested in some other person. No question can ever be made upon the right of a man to seize his own goods; but the question in cases of stoppage in transitu generally is, whether, under the circumstances, the consignor may devest the property which has passed to another, and revest it again in himself (p). In the case of Hodgson v. Loy (q), it was decided that stoppage in transitu did not devest the property of the vendee, and therefore that a consignor might exercise that right, although part of the price of the goods shipped had been paid by the consignee. Lord Kenyon in that case said, it was an equitable lien adopted for the purpose of substantial justice. The common-law right of lien enables the vendor to detain goods before he has relinquished possession of them; and this right of stoppage enables him to resume them before the vendee has acquired possession, and to retain them until the price be paid or tendered (). "The vendor's right," says Mr. Justice Bayley, delivering the judgment of the Court of King's Bench, "is not a mere lien (n) Siffkin and Another v. Wray, 6 East, See Bartram v. Farebrother, 4 Bing. 371. 579. (o) The Assignees of Burghall v. Howard, 1 Hen. Bla. 365, note a. (p) See Mr. Justice Buller's opinion in Lickbarrow v. Mason, 6 East, 27, 28. (9) 7 Term Rep. 445. (r) Kent's Commercial and Maritime Law, Edinb. Edit., p. 470. which he will forfeit if he parts with the possession, but grows out of his original ownership and dominion. If goods are sold on credit, and nothing is agreed on as to the time of delivering them, the vendee is immediately entitled to the possession, and the right of possession and the right of property vest at once in him. But his right of possession is not absolute; it is liable to be defeated, if he becomes insolvent before he obtains possession. If the seller has despatched the goods to the buyer, and insolvency occurs, he has a right, in virtue of his original ownership, to stop them in transitu. Why? Because the property is vested in the buyer, so as to subject him to the risk of any accident; but he has not an indefeasible right to the possession. His insolvency, without payment of the price, defeats that right. The buyer, or those who stand in his place, may still obtain the right of possession if they will pay or tender the price, or they may still act on their right of property if anything unwarrantable is done to that right. If, for instance, the original vendor sell when he ought not, they may bring a special action against him for the damage they sustain by such wrongful sale, and recover damages to the extent of that injury." (8). From this it appears that the exercise of this right does not proceed upon the ground of rescinding the contract, but assumes its existence and continuance; and as a consequence of that principle, it has been held, that after stopping the goods in transitu, the vendor may sue for and recover the price of them, provided he be ready to deliver them on payment (t). Yet, in more recent cases, the question whether the effect of stoppage in transitu be to rescind the contract, or merely to revest the lien of the vendor, was considered to be unsettled (u). It has been held, that the vendor may re-sell the goods, if they be not duly paid for by the purchaser (x). A person abroad, who, in pursuance of orders sent by a merchant of this country, purchases goods on his own credit of others, whose names are unknown to the merchant, and who charges the merchant a commission on the price, and consigns them to him, is, as respects the exercise of this right, a consignor: in reality, he is the vendor, and the consignee the vendee (y). So, also, is a person who sends goods to be sold on the joint account of himself and the consignee (z). Even an alien enemy, who had shipped a cargo to a British merchant under a British license, has been allowed to stop the goods by his agent on their arrival in England; the license being held to give legality to all the consequences of the sale (a). But a person who becomes surety for the consignee, by accepting bills drawn for the price of goods by (8) Bloxom v. Sanders, 4 B. & C. 948. (1) Kymer v. Suwercrop, 1 Campb. 109. (1) See the observations of Lord Tenterden in Clay v. Harrison, 10 B. & C. 99; and of Baron Parke in the case of Wentworth v. Outwaithe, 10 M. & W. 436; Stephens v. Wilkinson, 2 B. & Adol. 223; Edwards v. Brewer, 2 M. & W. 375; and see what fell from Mr. Baron Parke in that case, and also in the case of James v. Griffin 2 M. & W. 623. (x) Layford v. Tyler, Salk. 113. (y) Fiese and Another v. Wray, 3 East, 93. (2) Newsom and Another v. Thornton and Another, 6 East, 17. (a) Fenton and Another v. Pearson and Another, 15 East, 419. |