Stoppage In Transit

By the general mercantile law, a seller of goods, who has forwarded them to the buyer without having been paid the pi-ice, may, if the buyer has become bankrupt or insolvent, or has stopped payment, countermand the transportation, and resume possession of the goods, by demand on the carrier, at any time before they have reached the actual or constructive possession of the buyer. The exercise of this right is known as stoppage in transit, and the right itself is the right of stoppage in transit. The term is constantly seen in the Latin form, stoppage in transitu; but the English version is in every respect preferable. For the cases in and conditions upon which the right may be exercised, see the standard works on sales, particularly the treatises of Benjamin, Long, Rand, and Story. Stoppage in transitu is the right which arises to an unpaid vendor to resume the possession, with which he has parted, of goods sold upon credit, before they come into the possession of a buyer who has become insolvent, bankrupt, or pecuniarily embarrassed. Inslee v. Lane, 57 N. H. 4S4. An unpaid vendor may, in case of the vendee's insolvency, stop the goods sold, in transitu; but this right may be defeated by negotiating the bill of lading to a bona fide indorsee. The right of a vendor to stop in transitu is bestowed upon him in order to prevent the injustice which would take place, if, in consequence of the vendee's insolvency, while the price of the goods was yet unpaid, they were to be seized upon in satisfaction of his liabilities, other. This stoppage must be considered not as a rescission of the contract, but as merely replacing the vendor in the same position as if he had not parted with the possession; from which it follows that the vendor's right of lien on the part stopped is revested, and no more. Stoppage in transitu, as its name imports, 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 or constructive possession of the consignee, there is an end of the vendor's right over them; and, therefore, in most of the cases the dispute has been whether the goods had or had not arrived at the termination of their journey. The rule to be collected from all the decisions is, that they are in transitu so long as they are in the hands of the carrier as such, whether he was or was not appointed by the consignee, and also so long as they remain in any place of deposit connected with their transmission; but that their arrival at then: place of destination puts an end to the right of stoppage, though warehoused with the carrier, whose store the vendee uses as his own, or even if they are warehoused with the vendor himself. Wharton. The right determines when the goods have reached their destination, whether or not they are yet in the actual possession of the vendee. Usually, the carrier of the goods is a mere neutral agent between the vendor and the vendee; and in ordinary cases, therefore, the transit is regarded as continuing as long as the goods are in the carrier's possession. But if the carrier enters into any new relation with the vendee, becoming, e.g., custodian as well as carrier, that determines the transit, although the goods may not yet have reached their destination; and, Ukewise, the exercise by the vendee of acts of ownership over the goods will, in general, determine the transit; for example, if the vendee take samples of the goods with the intention of taking a constructive possession, and the carrier, retaining possession of the goods has expressly or impliedly assented to keep the goods as agent for the vendee. (Whitehead V. Anderson, 9 Mees. S/- W. 534.) Brown.