3. Goods not delivered, title passed, buyer in default, seller's lien. Although title has passed to the buyer, a seller in possession has a lien, (a) where not sold on credit, (b) where the buyer becomes insolvent before delivery. The seller loses this lien by delivery to the carrier (unless he reserves it by shipping to himself or his agent, or retaining the bill of lading) or by delivery to the buyer. To realize upon this lien the seller may (1) rescind the contract; (2) re-sell the goods; (3) sue for price.

4. Goods not delivered, title passed, buyer in default, right of seller to re-sell. Seller having possession, may, although title has passed, upon buyer's default, re-sell in three cases: (1) goods perishable; (2) contract calls. for re-sale; (3) buyer in default more than a reasonable length of time. Notice of re-sale not essential, but safer practice. If re-sale brings less than contract price, buyer liable for deficiency; if more, seller need not account for surplus. The seller may sell at public or private sale, but must exercise reasonable care.

5. Goods not delivered, title passed, buyer in default, right of seller to rescind. The seller need not re-sell but may take the title back into himself where (1) contract so provides; (2) where buyer in default an unreasonable length of time. May then sue for his damages.

6. Goods undelivered, title passed, buyer in default, seller's right to sue for purchase price. As the goods in such case are the buyers, the seller may sue for the purchase price. Obtaining judgment in such a case will not destroy his lien on the goods. When the judgment is paid, the buyer is entitled to the goods.

7. Goods delivered, title not passed, buyer in default, right to sue for price or damages. The seller obviously has this right if we assume he has fully performed. (See Subject Conditional Sales, Chapter 47A.)

8. Goods delivered, title not passed, buyer in default, right of seller to re-claim goods. Seller has this right. (See, also Chapter 47A, on Conditional Sales.)

9. Goods delivered, title passed, buyer in default,

seller's rights are to sue for damages. He cannot reclaim goods.

10. Goods delivered to carrier, title passed, right of seller to stop goods in transit. A buyer, although he has waived his lien by delivery to a carrier, may re-assert such lien during the transit of the goods, if the buyer becomes or is determined to be insolvent during the transit. Goods are in transit when delivered to carrier until delivered by carrier to buyer or his agent, or until the carrier acknowledges to the buyer that he holds them in his behalf, even though at the request of the buyer they are to be shipped on to a further destination. When notified by seller to stop in transit carrier must do so and deliver goods to seller, at seller's costs, provided that if goods are shipped under a negotiable bill of lading the carrier can insist on its production for cancellation before turning over goods to seller. See Cases 358, 359.

11. Measure of seller's damages for buyer's refusal to take delivery. The Sales Act, Sec. 64, provides. (1) Where the seller wrongfully neglects or refuses to accept and pay for the goods, the seller may maintain an action against him for damages for non-acceptance.

(2) The measure of damages is the estimated loss. directly and naturally resulting, in the ordinary course of events, from the buyer's breach of contract.

(3) Where there is an available market for the goods in question, the measure of damages is, in the absence of special circumstances, showing proximate damage of a greater amount, the difference between the contract price and the market or current price at the time or times when the goods ought to have been accepted, or, if no time was fixed for acceptance, then at the time of the refusal to accept.

(4) If, while labor or expense of material amount are necessary on the part of the seller to enable him to fulfill his obligations under the contract to sell or the sale, the buyer repudiates the contract or the sale, or notifies the seller to proceed no further therewith, the buyer shall be liable to the seller for no greater damages than the seller

would have suffered if he did nothing towards carrying out the contract or the sale after receiving notice of the buyer's repudiation or countermand. The profit the

seller would have made if the contract or the sale had been fully performed shall be considered in estimating such damages.

(Note: Distinguish between the right to sue for the price, which is the amount agreed on (expressly or by implication), and for damages. See above in this section for cases in which seller may sue for the price.)

(Note: The following cases are illustrations of rules set forth in the above note.)

(a) Unpaid seller's lien.

Case 357. Arnold v. Delano, 4 Cush. (Mass.) 33. Facts: Delano sold Lowerly 65 cords of wood, and the same was staked off and identified and Lowerly was to come and get it within a year, and he had a license to come on Delano's land for that purpose. Lowerly, before any of the wood had been taken went into bankruptcy and his assignee claimed the wood as against Delano, claiming that title had passed and that all Delano had was a general claim with other creditors against Lowerly's assets. But Delano claimed a lien on the wood for the purchase price.

Point Involved: Whether a seller has a lien on goods of the buyer in his possession sold on credit where the buyer becomes insolvent prior to his receipt of the goods.

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SHAW, C. J., delivered the opinion of the Court: when goods are sold and there is no stipulathe vendor has

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tion for credit or time a lien for the price; in other words he is not bound actually to part with the possession without being paid for them. The term lien imports that by the contract of sale the property has vested in the buyer, because no man can have a lien on his own goods. The very definition of a lien is a right to hold goods, the

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property of another, in security for some debt, duty or A lien for the price is inci

other obligation.

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But

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when

dent to the contract of sale when there is no stipulation therein to the contrary. a credit is given by agreement the vendee has a right to the custody and actual possession on a promise to pay at a future time. He may then take the goods away and into his own actual possession; and, if he does so, the lien of the vendor is gone, it being a right incident to the possession.

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"But the law, in holding that a vendor, who has thus given credit for the goods, waives his lien for the price, does so on one implied condition that the vendee shall keep his credit good. If, therefore, before payment the vendee become bankrupt or insolvent and the vendor still retains the custody of the goods, or any part of them; then his lien is restored and he may hold the goods as security for the price.

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Question 357: (1)

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State the facts in the question presented

and the court's decision in this case.

(2) Does a seller from whom title has not passed have a lien? Why? What is the effect of giving credit?

(3) Define a lien.

(b) Right of Stoppage in Transitu.

Case 358. Farrell v. R. & D. R. R. Co., 100 N. C. 390. Facts: Farrell sold to A and B, a safe, on credit, shipped over the R. & D. R. R. Co., from Philadelphia to Durham, N. C. During the shipment, Farrell learned that A and B were insolvent, and demanded of the railroad company a return of the safe, tendering freight and other charges. The railroad company refused to return the safe and claimed that before it had received the notice, it had itself attached the safe as the property of the consignee on a claim against such consignee, and it claimed ownership of the safe through such attachment proceedings. Farrell sued the railroad company. Point Involved: The nature of the right of stoppage in transitu; whether it precedes liens against the goods of the buyer.

SHEPHERD, J., delivered the opinion of the Court: "The plaintiffs' action is based upon their alleged right to stop the property in transitu. This right arises solely upon the insolvency of the buyer, and is based on the plain reason of justice and equity that one man's goods shall not be applied to the payment of another man's debts. If, therefore, after the vendor has delivered the goods out of his own possession and put them in the hands of a carrier for delivery to the buyer (which

is such a constructive delivery as devests the vendor's lien) he discovers that the buyer is insolvent, he may retake the goods, if he can, before they reach the buyer's possession, and thus avoid having his property applied to paying debts due to the buyer by other people.'

"The mere fact that (the buyers) were insolvent at the time of the sale could not defeat the lien of the plaintiffs unless they knew of such insolvency.

"An attachment or execution against the vendee does no preclude the stoppage in transitu.

"The vendor's right of stoppage in transitu is paramount to all liens against the purchasers."

Question 358: (1) Between whom is the contest in this case? Whose lien is superior? Do you think the lien of the seller would be superior to the lien of the carrier for its freight charges upon the goods in question?

(2) Suppose the buyer is insolvent when the goods are shipped, does the shipper have a right to stop in transit?

Case 359. Re W. A. Paterson Co., 186 Fed. 629, 34 L. R. A. N. S. 31.

Facts: The Paterson Co. was a manufacturer of vehicles at Flint, Michigan. Manley was engaged in selling vehicles at St. Louis, Missouri. Elder & Wood, who were engaged in like business at Mammoth Springs, Arkansas, ordered a carload of vehicles from Manley, in September, 1908. Manley thereupon ordered these vehicles from the Paterson Company and directed it to ship to Elder & Wood at Mammoth Springs, Arkansas. Afterwards, on