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obtained by fraudulent

means.

Fraud or illegality excuses performance.

gives the party upon whom it is practised the right of election. If a purchase of goods is effected by means of fraudulent representations on the part of the vendee, the vendor may maintain trover for the goods against the vendee without a previous demand (a). If upon the discovery of fraud the vendor elects to rescind and avoid the sale, he must do it within a reasonable time. If he does anything to affirm the sale after a full knowledge of the facts, and if he suffers considerable time to elapse, he will not be entitled to disaffirm the sale and reclaim the goods. So if a vendee after discovering the sale to be fraudulent deals with the property as his own, he cannot recover the purchase money upon subsequently detecting further circumstances of fraud in the sale (b).

The buyer will be excused from fulfilling his contract when the vendor is guilty of any fraud in the sale, as when he has employed puffers in an auction, without giving notice of his intention to do so, or has given a false description of the goods, or has fraudulently concealed any material things (c), or even where he has used some artifice to disguise faults even when the article was sold with all faults (d). It is, however, the duty of the buyer on discovering the fraud to lose no time in repudiating the contract, and he would lose his right of objection if, instead of doing so, he should continue to deal with the article (e). So when the contract has become illegal, the buyer may excuse himself from performing it. Where a contract which a plaintiff seeks to enforce is, expressly or by implication, forbidden by statute or common law, no Court will lend its assistance to give it effect (ƒ).

(a) Thurston v. Blanchard, 22 Pickford, 18.

(b) Campbell v. Fleming, 3. Nev. & M. 834.

(c) Howard v. Castle, 6 T. R. 642; Thornett v. Haines, 15 M. & W. 367; Smith v. Clark, 12 Ves. 477; Early v. Garrett, 9 B. & C. 928.

(d) Baglehole v. Walters, 3 Camp.

154.

(e) Campbell v. Fleming, 1 Ad. & E. 40; Chapman v. Morton, 11 M. & W. 534.

(f) Wetherell v. Jones, 3 B. & Ad.

225.

SECTION VI,

RIGHTS OF THE SELLER.

BRITISH LAW.

§ 1. Lien.

Where nothing is specified as to delivery or payment although Vendor's everything may have been done so as to divest the property out right of lien. of the vendor, and so as to throw upon the vendee all the risk attendant upon the goods, still there results to the vendor out of the original contract a right to detain the goods until payment of the price (a). . The vendor has no right to treat the sale at an end and reinvest the property in himself by reason of the vendee's failure to pay the price at the appointed time. He has only a right of lien till the price is paid (b).

Lien cannot without pos

be claimed

No lien can exist where there is no possession of the goods, therefore the lien is lost if the party entitled to it gives up his right to such possession, whether the delivery has been actual session of goods. or constructive. The delivery of part of the goods sold divests the vendor of the right of lien over the remainder, if made in the progress of, and with a view to the delivery of the whole. If, however, there is an intention to separate the part from the remainder, the lien will continue (c).

Where the goods sold remain in the warehouse of the vendor, and he receives warehouse rent for them from the purchaser, it will amount to a delivery of the goods to him, so as to put an end to the vendor's right of lien (d). The giving of a delivery order does not, without some positive act done under it, operate as a constructive delivery of the goods to which it relates, nor deprive the owner of the goods who gave it of his right of lien for their price, even as against the claims of a third person who has bond fide purchased them from the original. vendee, but once the delivery order is accepted the lien is lost (e).

What amounts to a delivery so as to ex

clude lien.

A lien is wholly inconsistent with a dealing on credit, and can Lien incon

(a) Withers v. Reynolds, 2 B. & Ad. 882; Atkinson v. Smith, 14 M. & W. 695.

(b) Martindale v. Smith, 1 Q. B. 389.

(c) Slubey v. Heyward, 2 H. Bl. 504.
(d) Miles v. Gorton, 4 Tyrwh. 295.
(e) M'Ewan v. Smith, 2 H. of Lords
Cases, 309; Lackington v. Atherton, 7
M. & G. 360.

sistent with dealing on credit.

What is stoppage in transitu.

Effect of stoppage in transitu.

only subsist when payment is to be made in ready money, or where there is a bargain that security shall be given. When the vendor takes a promissory note of the vendee he divests himself of the lien, and should the promissory note remain outstanding in the hands of third parties he cannot revive it (a).

§ 2. Stoppage in Transitu.

Stoppage in transitu is the right of the vendor to resume the possession of the goods sold and not paid for, so long as they are on their way to the vendee, and prior to his acquiring possession of them, where the vendee has become insolvent. Stoppage in transitu differs from lien, in that the right of lien may be exercised only as long as the vendor is in possession of the goods, and ceases the moment he parts with them, and the right of stoppage in transitu commences from the moment the vendor parts with the goods, and ceases upon their actual or constructive delivery to the vendee. Stoppage in transitu can only take place while the goods are on their way; if they once arrive at the termination of their journey, and come into the actual and constructive possession of the consignee, there is an end of the vendor's right over them.

The effect of a stoppage in transitu is not to rescind the contract but only to replace the vendor in the same position as if he had not parted with the possession of the goods. The vendor will still possess a right of lien on the goods for the price, and the vendee a right on the goods upon payment of the price (b). When the property in the goods has never passed by the contract, the seller will, by the exercise of the right of stoppage in transitu resume the complete and absolute disposal of the goods, and if the property has already passed to the vendee then the vendor will by the exercise of such right resume only the right of possession over the goods (c).

The right of stoppage in transitu supersedes the owner's right of lien for a general balance of accounts due by the consignee, but not the right of lien upon his carriage (d).

(a) Bunney v. Poyntz, 1 Nev. & M., 229; 4 B. & Ad. 568.

(b) Wentworth v. Outhwaite, 10 M. & W. 436; Lickbarrow v. Mason, 2 T. R. 63; 6 East, 27.

(c) James v. Griffin, 2 M. & W. 623; Rhode v. Thwaites, 6 B. & C. 388.

(d) Oppenheim v. Russell, 3 B. & P. 42; Morley v. Hay, 3 M. & Ry. 396.

exercise the

The right of stoppage in transitu may be exercised by Who may the consignor, or by the vendor, or by his agent duly autho- right. rised (a). A stoppage in transitu by an unauthorised person, professing to act for the seller, is inoperative, though ratified by the seller, if such ratification be after the period during which the seller could have stopped in transitu (b). The right of stoppage in transitu is in the seller, not in the buyer. The buyer may countermand the order, if in time, and with the consent of the seller he may rescind the sale; but if in insolvent circumstances he cannot stop the goods in transitu without committing an act of improper preference to the vendor to the prejudice of other creditors.

be exercised.

To whom the

notice should

be given.

The right of stoppage in transitu may be exercised not only How it is to by taking possession of the goods while on their way, but by a notice to the carrier not to deliver the goods. But the notice, to be effectual, must be given either to the person who has the immediate custody of the goods, or to the principal whose servant has the custody, at such a time and under such circumstances as that he may, by the exercise of reasonable diligence, communicate it to his servant in time to prevent the delivery to the consignee (c).

The right may be exercised so long as the goods sold remain unpaid for. A partial payment will not put an end to the right. The effect of a partial payment is only to reduce the lien pro tanto. Even where credit has been given, and a bill or note has been taken in payment, and the same has not become due, the vendor still preserves his right to stop the goods, if the consignee has become insolvent (d). So where there are mutual accounts, and the consignee of goods becomes insolvent, the consignor may stop them in transitu without waiting the final adjustment of accounts (e). But in all cases, to justify the exercise of such a right by which the vendor is allowed to depart from his contract, the vendee must be bankrupt or insolvent.

Duration of

the right.

The right of stoppage in transitu ceases upon the arrival How defeated.

(a) Feise v. Wray, 3 East, 97; Nesome . Thornton, 6 East, 17; Hawkes v. Dunn, 1 C. & J. 519; Cross (Ex parte), 1 Fonb. N. R. 215.

(b) Bird v. Brown, 4 Exch. 786.
(c) Whitehead . Anderson, 9 M. &

W. 518.

(d) Feise v. Wray, 2 East, 93; Ed-
wards v. Brewer, 2 M. & W. 375.
(e) Wood v. Jones, 7 Dow. & Ry.

126.

What constitutes a delivery.

Delivery of part.

Where the goods are in

the hands of a carrier.

and delivery of the goods in the consignee's hands. The goods cease to be in transitu when they are in the hands of the vendee as owner, whether that right of ownership has been claimed or exercised by the arrival of the goods at their final place of destination, or by the delivery at the warehouse of the vendee, or by his personally intercepting the goods during their passage (a). A mere demand of the vendee, without any delivery before the voyage has completely terminated, does not deprive the consignor of his right of stoppage (b). Nor will the right of the consignor to stop the goods in transitu be divested by the goods, while in their transitu, being attached by process of foreign attachment at the suit of a creditor of the consignee (c).

The arrival of the goods at the place of destination is the first criterion to judge whether the goods are in the constructive possession of the vendee (d). A constructive delivery to the vendee is sufficient to defeat the right, provided the goods have arrived at the final place of destination (e). An act of marking, or taking samples, or the like, without any removal from the possession of the carrier, though done with the intention to take possession, does not amount to a constructive possession, unless accompanied with such circumstances as to denote that the carrier was intended to keep, and assented to keep the goods, in the nature of an agent, for custody (ƒ).

The delivery of part of a cargo in the progress of and with a view to the delivery of the whole, divests the vendor's right, but the mere delivery of part to the vendee, when the carrier meant to separate that part from the remainder, would not put an end to the right to stop in transitu (g).

So long as the goods remain in the hands of the carrier as middleman, there is a presumptive evidence that the stoppage in transitu is not lost, and circumstances must show that he

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