CHAPTER 14 its or UNPAID SELLER AGAINST THE gia GOODS vady been observed that the seller and the buyer are -ocertain dutivs. Broadly speaking, the seller's duty ods and the buyer's duty is to aceept and to pay Jance with the contract. [either party_does_not 1 4 7 the Be ‘ condition cannot be fulfifled if the same_has been. dishonaured,the sifer is deemed to be an unpaid seller. If the payment rather than acoaditional one, the seller is not an unpaid seller even though the regotiable instrument is subsequently dishonoured. sian unpaid one when the whole 0CONTHACT=t 450 r The position of the seller's Agent may sometiny. as that of the seller for the purpose of the exercise ef wie by this Chapter For esampl Mt of the sane bil of Jading has been endo cONtIBHO nF A himself pris or is direvtly Tights of an_unpwid seller, TEE ay UApATa! Seller's Rights™ Notwithstanding that the property in’ the passed to the buyer, the unpaid seller cane rights against the goods— +0 for / Le Ya Hien on the goods for the price while he ig j AIS OE Reins Seen 47-19); #8 Possess 4 rig! ing the goods in transit,-wh; “4 right of stopping, B N_transit, while wp, FO aN anit and die B yer_has becom iar 505) eins ‘ SY iG right of re-sale of the goods, (See. 54), Even iTthe property in the goods has not passed to the bus. the unpaid seller has right of withholding delivery of the oS this right would be similar to and co-extensive with the i ht or stoppage in transit where the property, has passed to tee le 1. Lien The right of lien is one of the rights against the goods Which the unpaid seller can exercise. Nien’ eans ata s ponsible for the price, cay Bods ma, XeTCISC the fo hay, By a mere exercise of this Hiphty the contract of sale of ‘oods is not automatically rescinded 3 to See 47p this rij {Se rn nt flowing santo Te HP a goods have been sold withoit iy’ stipilaton dit, i.e., the sale of the goods has been on cash basis. It has 'y been observed under Sec. 32 that if there is no agreement to the contrary, the Payment of the price and the delivery of the goods are concurrent conditions, It means that if the goods have not been sold on credit, the seller expects that the buyer shall pay the price against the goods. The seller can tefuse to deliver them to the pe or in other words, he can exercise the right of lien over the g0%RIGHTS OF UNPAID SELLER AGAINST THE GOO0S = yer is not ready and willing, to pay the price In exchar re ods The position in this regard has been thus stated f a ly | ply | “phe general rule of law is, where there is a sale of ped, and nothing is specified as to delivery of paysnenit, alt es everything may have been done so as to divest the prop out of the vendor, and as to thraw: upan the vender all tise ndant upon the goods, still 2) he goods have been sold on credity the seller can aecise INE Het of Hen on the expiry of the period of credit. As won as the period of credit expires, the price becames duc and the Slercan exercise the right of lien thereafter) Even though orginally the seller had agreed to sell them on but now since the price has become payable because of the expiry of the period of credit the seller can refuse to part with the goods until he is paid for them. | forexample, on Ist January, A sells a horse to B, the buyer having, aright to take the delivery at any time he likes and the price is | payable on Ist March. If the buyer has not taken the delivery of the horse by Ist March and he demands the delivery after this date, the soller_can_ refuse to part with the horse until the buyer pays far them 3 er ean al8o exercise) the right of lien when, before) | rery of the goods to him, the buy es insolvent. Even :-seller_ had sold the goods on_credit andthe -period—of credit has not_yet expired ybut the buyer has become insolvent, the seller’s right of lien can_be exercised en the goods are sold on credit, the presumption is that the buyer shall maintain his solvency, I that condition can no more be satisfied, the seller is entitled to the exercise of this right. For example, the goods are sold on Ist January and the period of credit extends up to Ist March, if the uyer becomes_insolvent et 15th January and hé had not yet taken the delivery of the goods, the scller may exercise his right of lien j the buyer demands delivery at any time after T5th Januar ihe ‘ originally he had agreed to deliver the to the buyer on ere By the insolvency of the buyer during t tiod of credit; the right of lien which may have been suspended earlier for the Period of credit is revived and the credit granted earlier comes to an end. a) 2 C & M 504, at p. 511: 39 RR. B29, gms452 CONTRACT-ti NO Bayer It the sel s handed over the t the buver has not yet got the deli fe seller may exercise the nght of Ten: ren, nee eattuct : e Sasshe oF the delivery order to buyer should not ney made under the circumstances as to show that the seller hag his right of lien If the delivery order is transferred to the | under circumstances which indicate the waiver of the ight( the right comes to an end. f lie, The right of lien means _a right to detain the ods unt: Priceis paid. It presu, that the seller orm, the: : TS ai SEAS RE ler he éliver uf The right of lien can be exercised if the seller is still in possession of the goods even though his capacity is not that of the seller but only that of an Agent or bailee for the buyer. If the goods have not been actually delivered to the buyer but by an arrangement between the seller and the buyer, the goods are to continue in the Possession of the seller so that the seller holds those goods on behalf of the buyer. There is constructive delivery of the goods to the buyer as stated in Sec. 33, but since the_seller. is still_in_ possession of the s. y is only x can exercise the right of lien} For example, the seller sells his goods on Ist January and the buyer instead of taking the delivery of the goods requests the seller to keep goods in his warehouse till 1s March, the buyer agreeing to pay the warehouse charges for the te months, the seller can exercise his right of lien in respect of such see ee ee — Bods. SSS lien is a right which 4, ut a Me -OrissaysA1R. 1991 OF 2. Sec. 47(2). State: of OrissaRIGHTS OF UNPAID SELLER AGAINST THE GOODS 453 non-payment_of_the price. If_some_other warehouse charges. One due-to-the= ht of lien For the recovery-of such-charges, sony remedy is_a_personal_action against-the-buyer————~ nce the right consists in retaining the possession of the goods re still with the seller, the right comes to an end as soon as parts with the possession of the goods. Therefore, if the — are_delivered by the seller to the buyer or his Agent or toa Sor or-some_other bail © purpose of transmission to the Shwe the ight of lien comes to an end. Once this right has come Eirend, it cannot be revived even if the seller gets the possession a: Paine Lien and Part Delivery.—A ls ds was r k Sometimes of the part may operate as de! jnd in such a case, it may be presumed that the seller has waived his right of lien over the goods which have not yet been delivered. ' | whether such waiver is there or not depends upon the question, whether the parties intended to separate the part delivered from the remainder or not. If, for example, out of ags_of wheat which. | wer to.be supplied by the seller to the bu; have already been. | delivered tothe. buyer, the. seller-may-exercise-his right of lien over | the other, 80 bags. If, however, the buyer gets the whole of the goods | weighed but takes away only a part of them, the delivery of the part» | of the goods in such a’ case would operate as delivery.of.the whole» and the seller's right of lien over the remaining goods would come PS Raye War Mae PSST Te RAN eee delivered by the seller to the buyer, the seller cannot exercise his tight of lien over the remaining parts. Termination of lien The unpaid seller's right of lien may be lost in any of the following ways : | (1) By payment of price—The right of lien comes to an end When the seller ceases to be an unpaid seller, ie, when the buyer Pays or tenders the price to the seller. It has been noted under Sec, 421) that the unpaid seller is entitled to exercise his right of lien iT payment or tender of the price in respect of certain goods, the Payment or tender of the price, therefore, terminates the seller's right in the init does not mean the to retain the goods. Merely obtaining the decree ST Ani ASOT TB PNR) BIRR TES Sf 1. See Hammond w= Anderson, (1808) 15 ©—~__d.. 454 CONTRACT-~I payment of the price and, therefore, See, 492) states seller, haying @ lien on the goods, does not lose he h Man Unp, only that he has obtained adectee for the price of yet OY nll - ad, n Since the right of figg a ery to the carri 2) By de TEA to Wain the possession so long as the seller continues in Mis ag; ( the nght would obviously come to an end when the sey POS se ’ possession, The seller loses the possession when fy? lose © eli vy. he goods to a carrier or other bailee for the purpose of ane r rane the buyer without neserving the right of disposal of mes may be noted that the right of lien continues so Jo; Ne Loo: si NB AS the yo seller retains the possession and comes to an end yo yh! aS soon a! delivery of the goods is made to the carrier or some other b stated above, whereas the right of stoppage in transit hee! the seller parts Ww e-possession_of the goods by Ried Se 8 the OW carrier or some_other baile for the purpose of fransmree he buyer, Thus, delivery of the goods to a carrier or Gf Son m4 for the Purpose of transmission to the buyer results in the oe he lien For the termination of the lien, the delivery to the cam ; “elivery ier some other bailee must have been made without reserving the rig” of disposal of the goods. If the seller has reserved the mate disposal, ie, a right of not delivering the goods to the buys,” he fulfils the required condition, generally that condition being payment of the price, the seller can exercise his right of lien.” $3) By the buyer obtaining possession of the goods.—When the buyer or his Agent lawfully obtains the possession of the goods the right of lien comes to an‘end. If the buyer, at the time of tw contract of sale, is already in possession of the goods, although as a bailee for the seller, the seller cannot exercise the right of lien in respect of those goods. If the buyer once obtains the possession, the right of lien comes to an end, and such a right cannot be exercised even if the seller again gets back the possession of those goods. Thus, where a refrigerator after being sold was delivered to the buyer and since it was not functioning properly, the buyer delivered two of ts parts to the seller for repairs, it v held that the seller could pot exercise his lien over those parts — —"@_ By waiver—Unpaid sellers tpnt-of Tien is also lost by waiver thereof. According to Sec. 46(1)(a), an unpaid seller gets hs right of lien by implication SS 2 contract may wit® his rights, expressly or impliedly, according to_Sec, 62. Sec. 144 ue expressly provides that the right of lien comes to an end by i thereof. Such a waiver may be presumed when the seller allows EE. fe Pr Bree, KTR 1943 Nag, 249 + LC. 356, a Se ae Pe eva SRA RA STR SEMESTER RB455 DS RIGHTS OF UNPAID SELLER AGAINST THE GOO! of the goods to the cet of crit to the buyer, or delivers 4 art ol ie at he does r er or his Agent under the circumstances he seller assents to PAMMARE LO eNUCISe hi Fight of lien, or, when the eub-sale which the buyer may have made. oe ° Ownership of mortgaged goods.—Till_ such ten ine te ownership 18 NOt transferred to the purchaser, the hire y Fentinues to be the owner af de goods.! i “3h By disposition of the goods by the buyer— According to seo 53, the unpaid seller's Tight of lien or stoppage in transit is ne Feeremenal Tale OF Sther disposition of the goods by the buyer. | This general rule is subject to tere () witen the seller himself ascents to a sub-sale or other disposition of the Boeds by the buyer: Gi) when the buyer 1 having lawfully obtained possession of locument of title exceptions : to the goods transfers the same to a transferee in good faith nd. for consideration and the transfer is by Way of “sale” at oy In the above stated two exceptional cases, the unpaid seller's Nighy right of lien comes to an end. tt 2 (6) Unpaid seller's tien On goods.—The counsel for the aa appellants during the course of his arguments in the High Court 3 Whe strongly urged that as the appellants a: in exercise of their ri shown to be unpaid ight of lien under Sections 46 and 47 of the Act, they are entitled to the teturn of the goods. From Section 46(1)(a), it | 's seen that notwithstanding that the Property in the goods has passed to the buyer, the unpaid seller of Beods has, as such, by implication of law, a lien on the Soods for the price while he is it Possession of them. The unpaid seller has a Tight to d the | in his custody until the w ised n etain the goods hole of the price is Paid. A lien necessarily Pre-supposes that the pro hus, seller, perty in the goods has Passed, as the seller cannot be said to possess a Tight of lien on his own Property, which and | isin the nature of a right of distress over the fis | The plaint Property of another. ‘A’ Schedule goods were despate . hed by rail to the 20 | defendants and the defendants receive d the same after 303.1973, The Hen ceases to subsist, the moment the seller loses possession of the by | goods, So, in the Present case, in view of the admitted facts that the his | Possession of the plaint ‘A’ Schedule goods was « sive defendant on or about 30.3.1973, the plea of the Jd | ae entitled to the return of goods in exe ver sa elivered to the appellants that they tise of their right of lie, 88 unpaid sellers is without any basis and, therefore, merits ne nance Lf, ¥, S. Vijayalarmi, (2012) 1 SCC 1 1. Citicorp Maruti Finance Let wv. S. Vijayatan emg ee= 456 CONTRACT-I consideration! Sections 46 and 47 deal with unpaid seller's rights Sand 4 and, Tnter_alia,_ provide that unpaid” seller “shall; SUiDjec at lien “provisions of the Act and of any law for the time being in te peevoa en an the goods for the price while he is in pote. tc ‘iter can rota Possession them and that the seller can retain the possession of the goog payment or tender of the price in’ situations where the “buye Unt Petime insolvent or geods have been sold on credit, but thoy of crit has espited. The lien, however, stands terminated in y : Y jon 4@_ot the Act when the goods are delivered to tor the purpose of transmission to the buyer without rese; right of disposal of the goods ™ rms A Cartieg Stoppage in Transit It is one of the rights which, as already mentioned, an unpaiy seller can exercise against the goods. This right mean Paid goods have already been. delivered toa carri tothe buyer the carrier atthe seller’s x back to the seller_and not_to deliv en though the buyer_might have gat_the_possession une ~Of THE to the Goods: Under such a right, theretore, The unpaid’ seller Tegaias the possession of the goods after they had once been delivered to a carrier for the purpose of transmission to the buyer. The exercise of this right, according to Sec. 54(1), does not result in the rescission of the contract or revesting of the property in the goods in the seller, It only means that the seller after getting back the goods from the Carrier the_buye goods, ——For the purpose of exercise of this right, the following conditions are to be satisfied - alice should be an unpaid seller as defined in Sec. 45. othe buyer should be insolvent within the meaning, of Sex. 2(8), i.¢., a person who has ceased to pay his debts in the ordinary course of business, or cannot pay his debts as they become due, whether he has committed an act of insolvency or not. _& The goods should be in transit. The goods are in transit from the moment they are delivered to a carrier for the purpose of transmission to the buyer It ® Me. 00K 2 le ¥. State of Orissa, ALR. 1991 Ori UT 2. Contshipy Container Lines Ltd v, DK. Lall, (2010) 4 SCC 256. on 4]nef 4 as tof | | FIGHTS OF UNPAID SELLER AGAINST THE GOODS 457 or ESET that the carrier_must have got the possession. of oy his-capacitas.a carrier This might take the goods for sein carrier to different capacities : ssi ‘a The carrier may be the buyer's Agent. When the possession has been received by the carrier as the buyer's Agent, there is no question of exercise of right oF stoppope in transit because when the buyer or his Agent has reeeived possession of the goods, the seller cannot exercise any right in respect of them; (ii) The carrier may be the seller's Agent, If the carrier is the seller's Agent, then the seller himself is deemed to be in constructive possession of the goods and he can exercise even the right of lien in respect of them; (iii) The carrier may be neither the buyer's agent nor the sellers agent but may be holding the goods as a carrier. If he is in possession of the goods in that capacity, then the right of stoppage in transit can be exercised by the i seller. Duration of Transit fine right of stoppage in transit can be | exercised so long as the goods are in transit} It becomes importa therefore, to know as to what is the duration of transit, ie., when the transit begins and when it comes to an end. Sec. 51 oat ide: rales regarding the same. According to sub-sec. (1), the good deemed to be in the course of transit from the time when they are | delivered to a carrier or other bailee for the purpose of transmission | to the buyer. The transit continues until the buyer or his Agent in that behalf takes delivery of them from such carrier or other bailee. It means that so long as the goods are with a_carrier, the transit continues. The position was thus explained by Cave, J.! "In all cases of stoppage in tray in c-in transit itis necessary first of all e BO to ascertain what_is. transitus or pa 5 irom. ssession of the vendor to that of the p e_possession of the uurchaser, The momient that the goods are delivered by the vendor to ‘a carrier to be carried to the purchaser, the transitus begins. When the goods have arrived at their destination and have been delivered to the purchaser or his Agent, or when the carrier holds them as warehouseman for the purchaser and ho longer as cartier only, the transitus is at an end. The destination may be fixed_by_the_contract_of_sale_or_by_ directions _given_by the purchaser to the vender But, owever, fixed, the goods have arrived at their destination, 1. Banal v. Clark, 17 QB.D. CE Cink 19 QBD. 553, at p. 561.CONTRAGT-11 488 and the transitus is atan end, when Mey have hands_of someone who holds them for the! Bt ing, for some other purpose than that of merel i to the destination tied by the contract 6 given by the purchaser to the vendor given by I the the buyer's Agent, delivery of the goods to him would aaa Tight of stoppage in transit, On the other hand, if he is th Agent, the possession of the seller's Agent is the posse” ial seller and he can exercise even the right of lien ove, On of q . i LUFC ft CrCise of i Fight. . (6) provides that when the goods toa ship chartered by the buyer, it is a question dependi circumstances of each case whether they are in the posses: ae delivery ING On the master as a carrier or as Agent of the buyer. In Spot te RYCG.' there was delivery of the gaa” Lancashii * ‘ Boods by the seller on board a ship belonging to the buyer. The bill ¢ lading was also taken in the buyer's order. It was held that in ths case it amounted to the delivery of the goods to the buyer so that the seller was precluded from exercising his right of stoppage is transit. Lord Cairns said : “The master was his (buyer's) servant. Yo special contract was entered into by the master to carry the goods for or to deliver them to any person other than Cunlitie, the purchaser. In point of fact, no contract of affreightment was enterd into... The essential feature of a stoppage in transitus, as has been remarked in many of the cases, is that the goods should be at the time in possession of a middleman, or of some person intervening between the vendor, who has parted with, and the purchaser, whe has not yet received them. It was suggested here that the m the ship was a person filling his character, but the master of the sti is the servant of the owner; and if the master would be liable becaus of the delivery of goods to him, the same delivery would be delivery to the owner, because delivery to the Agent is delivery to the Principal.? at In ‘Tuer v'THE ‘Thistees of Liverpool Docks, the cs? < cotton was put on the board of the vessel belonging to the buye® E867) CR Ch, 32 36 Lh 361. 2. (1867) LR. 2 Ch. 332, at p- 338. 3. (1851) 6 Ex. 543 : 20 LJ. Ex. 393 : 86 RR. 377.aso RIGHTS OF UNPAID SELLER AGAINST THE GOODS: cir order. goods were made deliverable to the sellers ot ae i valor. the § 1 giving judgment of the Court observed that “the ee Che that the delivery to him, umnecs the vendar protects him reid terms, restraining the effect of such delivery In the present m Shhe sendors, by the terms of the od Xe & ; bill of lading, made the cotton ly, severable at Liverpool, to their order or assigns, ‘and there was not, Se Xewtort a delivery of the cotton te ane purchasers as owners, pooagh there was a delivery on board thelr ship. The vendors still Peevet to themselves, at the time of delivery to the Captain, the ie disponendi of the goods, which he by signing the bill of lading Ranowledged rt hi when Transit comes to an end ()_ When the buyer tak. . very. EARthe ee eet otakes delivery to the carrier or othe f buyer, til the | \gent 7 ] . t\ fromisuch ‘carrier or other bailee! When the suyer or his agent takes actual Possession of the goods, the right of S stoppage comes to an end, It is not necessary th: at the bu Ris possession after the goods yer or his Agent takes the ? have reached the destination. According rat to Sec. 51, sub-sec. (2), if the buyer or his Agent in that behalf obtains in | delivery of the B0ods before their arrival at the appointed No destination, the transit is at an end. Although the seller may have ids cated a certain destination to which the Goods are to be carried, the is open to the buyer to make arrangement with the carrier and ed | have delivery of the goods before they arrive at the appointed ‘en destination’ and thus make an end to the seller's Tight of stoppage he | in transit. In Whitehead v, Anderson, Parke B. said 2 ng | “The law is clearly settled that the uy ho paid vendor has a ri ht to retake the goods before they have arrived at the of destination originally contemplated by the purchaser, unless up in the meantime, they have come to the actual or constructive possession of the vendee. If the ee vendee takes them out of the possession of the cartier into his own before their arrival, with or without the consent of the carrier, there seems to be no doubt that the transit would be at an end, of though, in the case of the absence of the carrier's consent, it 5, may be a wrong to him, for which he would have a right LL & NW. Ry. v. Barlett, en en ve a see il Co, (1914) 84 LK 3 LT. 910. 2. en oM & W. 518, at p. 534: 69 RR. 819, at p. 833, Rediall v. Unionsec-s] NS 460 CONTRACT-I of action.” (2) When the cartier oF the other bailee acknowledge buyer—According toSec 51, sub-see.(3)eif, alter the arriy goods at the appointed destination, the carrier or other bait deknowledges to the buyer or his Agent that he holds the yoy fl his behalf and continues in possession of thom.as the bailee for ri buver or his Agent the tenet is at an ond ian the carrier * ser bailee acknowledges to the buyer that he is holding the 200, aire alee ie ehall, there: (deemed dqdpases st Fae eets the goods to.the-buyer.and-he-becomes:the-buyer’s-Agentein-hoid t! S a FStight a stoppage_in.transit. An acknowledgment on the part Of the carrier that he holds the goods for the buyer is essential, but if he indicates that he would deliver the goods to the buyeror his Agent on freight _being.paid-that-isnot.enough. In Whitehead v. Anderson," on arrival of the ship, the assignee of the buyer, who had become insolvent, went to take the delivery of the timber. They only saw and touched the timber. The Captain refused to deliver the sare until the freight had been paid. The seller subsequently gave a notice of stoppage in transit. It was held that neither the buyer’s assignee had taken the actual possession, nor had the Captain of the ship contracted to hold the timber as the buyer’s Agent, the seller’s right of stoppage in transit had not come to an end. Sometimes the buyer may request a carrier to carry the goods to some further destination, e.g., the goods which were sen: from Delhi to Bombay, are requested by the buyer to be carried by the same carrier from Bombay to Madras instead of being delivered there. In such a case, upon the receipt of the fresh instructions by the carrier from the buyer, when he agrees to take them to the new destination, the original-transit-is-deemed_to_be at an end and the seller cannot-exercise his right to_stoppage in transit. (3) When the carrier wrongfully refuses to deliver the goods to the buyer.—if the buyer wants to take the delivery when it ought to have been made to him but the carrier wrongfully refuses to deliver the same, the transit is at an end. The carrier by his wrongful act of refusing to deliver the goods cannot extend the period of transit. If the carrier refuses to deliver the goods on an ineffectual a duty to eee im transit, the transit is at an end, because he has bes ail cred goods in transit only when a proper notice ie in transit wae es ne In Bird v. Brown, a notice to stop go ity Ea Siven by a certain stranger, who had no authority : OM EW. : 3187 2 (1850) 4 Bx 796: ane 819. 5 10 the al of the461 RIGHTS OF UNPAID SELLER AGAINST THE GOODS ivery = goods the seller to do so. On a demand for the delivery of the goods tthe assignees of the insolvent buyer, the carrier refuse 8 deliyer M, goods to them. Subsequently, the seller tried to ratify the paKe in transit made by the stranger. It was held that the trans opr’ , fo an end when the buyer's assignees demanded the gavery of the goods because the carrier's refusal to deliver the coods to them Was a wrongful one and the right of stoppage, which had come to an end, could not be revived by subsequent ratification ofan ineffectual notice to stop, Rolfe, B., who delivered the judgment ofthe court, said 2 “There could be no valid stoppage in transitus after the formal demand of the goods by Bird and the subsequent delivery of them to the defendants. The goods had then arrived at Liverpool) and were ready to be delivered to the parties entitled. Bird, on behalf of the assignees, demanded the goods and tendered for amount due for the freight. Assuming that there had been no previous stoppage in transitus, the master... was thereupon bound to deliver the goods to Bird as representing the buyers and he could not by his wrongful detention of them and delivering them over to other parties prolong the transitus and so extend the period during which stoppage might be made: Effect of part delivery—According to when a part delivery of the goods has been made by the carrier to the buyer or his Agent, the seller may still exercise the right to stoppage in transit over the remainder of the goods. {f the goods are sent partly by one route and partly by another and the buyer takes the delivery of the goods sent by one route, the seller is entitled to exercise his right of stoppage over the goods. coming through another toute, but if the part-delivery of the goods was made to the buyer in the circumstances which show an agreement on the Part of the seller to give up his right against the whole of the goods, the right of stoppage in transit on the remainder of the goods come to an end. It, in other words, means that the right of stoppage in transit, when waived, comes.to an end. Effect of rejection of goods by ihe buyer after the arrival of the goods at their destination, the buyer Tefuses to take their . astit hich in such a case arises is, whether the delivery, the question w aed transit has come to an end. According ae x ods _are_rejected by the buyer al Wis Word ilee Roods_are_rejec of them, the transit is not deemed to be at cGitinues: in_possessio ald be the same even if the seller has tefused angnd The position woul jad come io meg a“= 462 CONTRACT-II to receive them back. It has already been observed that the tra, continues until the buyer or his Agent actually takes deliver, s 6 or is a constructive delivery when the carrier or some other bat” acknowledges to the buyer that he holds the goods on his behalf 1, fea necessary corollary of the above stated provision that if t does not himself take the goods and also does not want the cary, to hold the same for him, 4c, when he expressly refuses to take theiy there buyer delivery, they should be deemed to be still in transit Sale transaction.—It cannot be said that the sale transaction oy credit basis can be treated to be loan advanced to the purchaser 2) the goods during the course of the business engaged in the trade Therefore, the amount sought to be recovered by the plaintiffs js not falling in the definition of loan in any manner nor the plaintiffs can be said to be a money-lender engaged in the business of money-lending by admitting that from the traders, he is obtaining promissory notes to secure his trade money.! How the right is exercised—The Act does not prescribe an: particular form or mode of exercise of the right of stoppage in transit. The only thing required is that the unpaid seller may either take actual possession of the goods, or give a notice of his claim to the carrier or other bailee in whose possession the goods are.” The seller is thus to express his intention countermanding the delivery. By such a notice, a carrier may be forbidden to deliver the goods to the buyer or his Agent, and may be required to deliver the goods to the seiler or his order. The seller cannot be required to prove that there is an existence of the facts which justify the exercise of the right, because if he wrongfully prevents the delivery of the goods to the buyer, he would be liable to an action for damages. Notice of stoppage may be given either to the person in actual possession of the goods or to his principal. In order that the notice to the principal is effectual, it shall be given at such time and in such circumstances that the principal, by the exercise of reasonable diligence, may communicate it to his servant or Agent in time to Prevent a delivery to the buyer.’ This provision implies a duty of in® Erincipal, i notice is given to him, to use reasonable diligence couuniintenn, ating the notice to his Agent. If such a duty to consequence thereof and the Principal makes a default and as a of the goods, the he insolvent buyer is able to take the delivery carriage of gang arr would be liable for conversion. In case of B00ds by sea, such a duty was explained by Lord 5 Lee al + Sec. 52(1), 3. Ibid, " ¥. Paras Rant, ALR. 2006 Raj. 302.iy On of nt RIGHTS OF UNPAID SELLER AGAINST THE GOODS: 403 xan the following words | sy have always myself understood that the law was that when You become aware that a man, to whom you had sold wads which had beet shipped. had becorne insolvent, your pest way, or at least ae food way, of stopping them: in transits was to give notice to the shipowner inorder that he might send ition. He knew where his master was likely to be, and be might send it on; and t have always been under the belief that, although such a notice, if sent, cast upon the shipowner who received i, an obligation to send jt on with reasonable diligence, yet if, though he used reasonable diligence, somehow or other, the goods were delivered before it reached, he could not be responsible. 1 have always thought that the stoppage, if effected, thus, was 4 sufficient stoppage in transitus. | have always thought when the shipowner, having received such a notice, used reasonable diligence and sent the notice on, and it arrived before the goods were delivered, that was a perfect stoppage in transitus.” After a proper notice has been duly received by the carrier, he has a duty not to deliver the goods to the buyer but to redeliver them to the seller? failing which he can be made liable for conversion. The vendor by stopping the goods in transitus does not thereby regain the property in them, nor does he thereby cancel the fale) he gets only a right of possession of the goods. In view of this right of the unpaid seller. the carrier has the duty to protect this night. If by mistake he delivers the goods to the buyer, the seller can make botit the carrier and the buyer liable for conversion. In. jeyfrafter the receipt of the notice to stop the goods, the carriers by stake delivered the goods to the buyer, It was held that the assignees of the insolvent buyer were bound to restore back the goods to the seller, or be liable for damages. Gobbs, CJ. said : “In the present case, the plaintiffs gave notice to the carriers at the place from where the boat sailed, and it would be monstrous to say that after such a notice, a transfer made rae Uistake should be such as to bind the plaintiff, and to vest a complete title in the bankrupts and_ their eo Pratucts Cav GAV Rly, (1916) 1 A.C. 189. es Stor! PAT RR 482, 2 Marsh 487 = 7 Taunt 109| 464 CONTRACT-HII representatives As soon as the notice wa “rerty returned to the plaintiffs,’ and they ew the Prnaintain over, not only’ against the carrier, bata tttiteg A fondant (assignees of the bankrupts) oF any « TeEPist th (assignees, of other pay ccanding to See $22), the expenses of re-elivery of ieee ae tet home by te seller On exercise of the right of sta ties towards the carrier are, the issue ae the seller's directions as (© how delivered, the payme of redelivery: Effect of sub-sale or pledge—Sometimes the buye: . ; alec may dispose of the , goods_purchased_by- him_although_n either he be obtained their po jon_nor_has.paid forthem. In such a case i Se pc gnerll aries i that whether she unpaid er Gn cMercise his right of lien or stoppage in transit in respect of thon goods. The general rule, as provided in Sec. 53), is that unpaig seller’s ti jon-or-steppage-intransit is not affected by any sale ion of the goods which th b might have made the buyer disposes of the goods for which he has exercise his right of lien or stoppage in transit, as the case may be, and the person to whom the goods were disposed of by the buyer will not_has! a i Ss Sree Far example, A sells certain goods to B and delivers them to a carrier for transmission to B. Before the goods reach their that B has become insolvent. In the destination, A comes to know ile, B agrees to sell those goods to C. The sale of the goods meanwhi by B to C will not affect the right of A to stop them in transit. Thee are two Exceptional cases when the right of “unpaid seller-may be by dis) sition of the goods. hich the buyer might have made. The exceptions are = (1) When the seller has assente which the buyer may have made. If the a sale or other disposition by the buyer, the law of estoppel applies against him and he is estopped from denying the buyer's right to dispose of the goods and is thus precluded from exercising his right of lien or stoppage in transit against the sub-buyer or the pledgee in Knight’v; Wiffen3A sold 80 mounds of barley, out of 3 [ore TT is wrong to say That the property in the goods revests in the seller it exercise of this ght. Only the right of possession is conferred on him #% is bound to deliver the goods under the original contract if the aya the pie. Sc. S48) alin makes i lent that We exercise of such 2 Steel Pre ae anes the contract af sale for gods. Also see, United 5 2. (1870) 5 QB. 660, WW. Rly., (1916) 1 A.C. 189. a) — | and where and to whom the goods at of freight, if any due, and also the wan, expenses Teimeans not yet paid, the seller may d to the sale or other disposition seller himself assents to suchRIGHTS OF UNPAID SELLER AGAINST THE GOODS 465 B sold 60 ak Wing 8 Nis granary, to BR Out of his purchase, obtained gaunds 10 C. betore the goods had been ascertained Cc geuvety OMET ANT Presented at te A, who informed C that the barley Id be forwanted to him in due course Subsequently, A became vent and 4 wanted to exercise the right of lien over the barley hohe had sold to jp vas held that A had assented to the p-sale of 60 maunds of barley by B to C and, therefore, he could SO be ENE ion ver mauinds of barley, though such saunds. ercised in respectof the remainder, i¢., the other of a aiff of | and the market price POCO rier giving nolice to the buyer, the not | Since The resale Fs 10 Fre date of breach of contract, and on on be Ps was ade on t vailizne re-sale may not ry recover different price than prevailing on the jer may resale, the sell Y act. | date of breach of con that the criterion of allowing, difference iss) | jy may_be OSE can 4. ME 1958 Bom. 411. jot | 1. Hirt Bhar wy 283. SHEE refining Co, Lt, ALR 1038 At ake 2 ALR 135 yu 3. S