Court Opinion

ID: 3591986
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:40:24.381491+00
Date Added: 2024-06-11T13:51:07.592031
License: Public Domain

The right of stoppage in transitu on a sale of goods on credit, arises where the vendee becomes insolvent after the sale and before the goods have been actually delivered to him, or to his agent for him, having some authority in respect to the goods unconnected with their transit, as to keep or dispose of them. The basis of this right is that the insolvency of the vendee was not contemplated by the vendor in the sale, and that it is plainly just that he should, on account of that unforeseen event, endangering the loss of the price to be paid, be permitted to reclaim the goods and keep them as security for payment at any time before a delivery terminating their transit. The right is limited to that period, and ends with such a delivery. It is a right which, from its equitable nature, is regarded with favor, and the rules relating to it are applied, with great liberality to the vendor, in furtherance of justice. These rules are well settled and familiar, but in the application of them, particularly that in regard to the determination of the right by a delivery of the goods, there is often great difficulty. The difficulty is in deciding whether the facts and circumstances in particular instances amount to a delivery terminating the transit, and this has led to some apparent if not real conflict between adjudged cases.
Chancellor KENT, in his Commentaries (vol. 2, p. 545) in treating of this subject, observes that "the cases in general, upon the subject of constructive delivery, may be reconciled by the distinction that if the delivery to a carrier or agent of the vendee be for the purpose of conveyance to the *Page 264 
vendee, the right of stoppage continues notwithstanding such a constructive delivery to the vendee; but if the goods be delivered to the carrier or agent for safe custody or for disposal on the part of the vendee, and the middleman is by agreement converted into a special agent for the buyer, the transit or passage of the goods terminates, and with it the right of stoppage." This observation will be found to be fully justified on a careful examination of the cases, as well those in England as in this country. The distinction is fully established and appears to be entirely sound in principle.
A delivery to a carrier, for the purpose of carriage, obviously does not affect the right of stoppage in transitu; as it is a right given by law to the vendor during the transit. For the same reason, a delivery to any other agent, in the course of the transit, merely to perform some act in reference to forwarding the goods, will not affect the right. The right continues until the goods come to the actual possession of the vendee, or of his agent to receive them and terminate the transit. (Buckley v.Furniss, 15 Wend., 137; 17 id., 504; Covell v.Hitchcock, 23 id., 611; Mottram v. Heyer, 5 Hill, 629.)
A vendee purchasing goods abroad may receive them into his actual possession at the place of purchase and the right of stoppage will not thereafter exist; so he may take actual possession of them at some point intermediate the place of purchase and the place where he designs to use or dispose of them, or employ an agent to do so, and thereby terminate the transit and with it the right of stoppage; but when he does not do so, and the goods are to be carried to the vendee or to an appointed destination, the transit and the right of stoppage continue until the actual delivery of the goods to the vendee, or to the proper person at the place appointed.
The principal point made by the defendants' counsel is that upon the delivery of the goods to Edwards, Sanford  Co., the transit thereof and consequently the right of stoppage were at an end. The counsel, in presenting his *Page 265 
views in support of this point, treats the firm of J.  J. Hall as the purchasers of the goods of the vendors, and the sellers of the same subsequently to Hall Brothers, and in that aspect of the case argues that, as between the original vendors and their vendees, Edwards, Sandford  Co's at Liverpool, was the destination of the goods and their transit ended at that place; and that when the goods were shipped at that point for New-York, a new transit commenced. I am satisfied that neither this assumption nor the argument is supported by the facts. The members of these firms were identical, and they were the owners of all the property of both firms; they might for their convenience transact business at different places under different names, making such division as they pleased of their effects in reference to their firm names, and transfer property nominally belonging to one firm to the other from time to time, but they could not sell, in a legal sense, to themselves what they already owned. Transacting business in that mode, undoubtedly on a purchase of goods abroad in either firm name, without any special circumstances as to the destination of them, the proper destination would be their place of business under that name; but if it clearly appeared that goods purchased in the name used for one branch of the business were in fact purchased for, and to be sent directly from the vendors to, the other branch, the place where the latter carried on business would be their legal destination. In such a case as last named, the mode of making out the bill for the goods, as to the name used for the vendees, and of entering the transaction in the books of the firms, and whether the acceptances for the price were to be in one or the other firm name, would be no part of the substance of the transaction, but merely formal and referrible wholly to motives of convenience. Those facts might be material on the question of the destination of the goods; but the actual destination, in their transit from the vendor, would be the substantial matter of inquiry, and when ascertained would *Page 266 
govern as to the limit of the transit and the right of stoppage. It is plain beyond dispute that the goods in question were purchased to be sent to Hall Brothers, New-York. That manifestly was their destination unless the direction to the vendors to forward them to Liverpool to Edwards, Sandford  Co., in connection with other circumstances, established a different destination. In order for that direction, supported by other circumstances, to work such an effect, they must have constituted Edwards, Sandford  Co. special agents of the vendees to receive and hold the goods for the latter, beyond the agency which would arise from sending the goods to them to be forwarded on their route, in the ordinary course of their business. If the goods were sent to them as mere shipping agents, which was their ordinary business, to ship them to Hall Brothers, no such consequence was produced. Looking at the previous long continued course of extensive dealings between the parties, with which the present one was in perfect accordance, it is clear to my mind that the employment of Edwards, Sandford  Co. was as mere forwarding agents, in their usual course of business. The goods purchased of the vendors for Hall Brothers were uniformly sent to those agents, and by them shipped for New-York. There is nothing in the case which will warrant the idea of any special agency. I do not think any weight is due on this subject to the fact that the goods were sent to them with advice that they would receive from J.  J. Hall further instructions in regard to the goods. It is apparent from the evidence that the instructions referred to were those subsequently given, as to the time of shipment and the vessel to be employed. That the goods were to be sent to New-York was determined when the purchase was made, and for that purpose the direction was given that they should be forwarded to Edwards, Sandford  Co. No change of that determination was made or so far as appears intended or thought of. It appears that the vendors were to pay the expenses of sending the goods to Liverpool, from *Page 267 
which place the vendees were to provide for their carriage; and hence the propriety of instructions from the vendees to Edwards, Sandford  Co. as to their shipment from that place. But the employment by the vendees of a carrier from Liverpool, and deferring instructions as to shipment from there until the goods should arrive, did not create a new transit from that point. If the destination of the goods, as understood between the vendors and vendees, was New-York, the transit and right of stoppage continued to New-York, entirely unaffected by the consideration that the vendors employed the carriers for part of the route, and the vendees as to the residue. A transit may be single and entire, and yet carriers be employed for different stages of the route as they are needed, with directions as to the carriage to each carrier, and knowledge by him as to their ultimate destination limited to the distance he is to carry. The extent of the transit does not depend upon the direction or address of the goods, in a shipping bill or otherwise, or any information to the carrier, but only upon the purpose of the buyers communicated to the sellers, unless some change of purpose occurs. When directions as to the carriage, for part of the distance the goods are to be taken, are delayed and subsequently given, a new motion is not by the new instruction impressed upon the goods, as that language is used in some of the cases. The original motion continues although the employment of new carriers and new instructions may be necessary from time to time in the course of the transit. A new motion takes place only when, after goods have reached their original destination, they are started to another destination. Those words express only a secondary transit. We must find such a transit before we can say a new motion has been given to the goods. Inquiry for a new motion is inquiry for a new transit. They are the same thing.
Most of the cases referred to by the defendant's counsel, are in harmony with the views above expressed. Some of *Page 268 
them, holding the transit ended by a delivery of the goods to an agent, are cases of a clear agency in the person to whom they are delivered to receive or hold them for the owners with the like effect as if delivered absolutely to the owner, and not as a mere carrier or middle-man. Such are Leeds v. Wright, (3 Bos. Pul., 320); Scott v. Pettit, (id., 469); Bassett v.Goddard, (3 Mason, 107); Meletopulo v. Ranking, (1 N YLegal Ob., 299); Wright v. Lawes, (4 Esp. R., 82);Foster v. Frampton, (6 Barn.  Cres., 107); Rowe v.Pickford, (8 Taunt., 83); Fowler v. Kymer, (cited 3East, 396); Gerard v. Nightingale, (Cross. on Lien, 412);Dodson v. Wentworth, (4 Man.  Gr., 1080); Sawyer v.Joslin, (20 Verm. R., 172); Allen v. Gripper, (2 Cromp. Jer., 218); Richardson v. Goss, (3 Bos.  Pul., 119);Wentworth v. Outhwaite, (10 Mees.  Wels., 436); Hayes v.Mouille, (14 Penn. (2 Harris.,) 48). In the other cases the distinction stated by Chancellor Kent is virtually recognized, but they are less clear in regard to the agency of the persons receiving the goods being so extensive. Dixon v. Baldwin, (5East, 154); Valpy v. Gibson, (4 Man.  Gr., 837); Biggs
v. Barry, (2 Curtis C.C.R., 259); Bolin v. Huffnagle, (1Rawle, 9). Whatever discrepancy exists between cases seems to be, generally, in the application of rules which are conceded.
The case of Hitchcock v. Covill, (23 Wend., 611) in the late Court of Errors is in principle directly in point in favor of the vendors in this case. The plaintiff residing in New-York sold goods to the vendee residing at Willardsburgh Pennsylvania, and in pursuance of instructions boxed and directed the goods to the vendee at his residence and put them on board a canal boat. Havana, about thirty miles from Willardsburgh was the head of navigation in that direction and the course of business was to deposit goods brought by canal at Havana, the warehousemen keeping the goods until called for; there being no public carriers beyond that place. The goods arrived at Havana and were put in a warehouse. The plaintiff then stopped the goods, claiming *Page 269 
a right of stoppage in transitu. The right was sustained; the only opinion delivered in the case was by the chancellor which is placed on the sole ground that the right to stop the goods in transitu still existed and was duly exercised. On that ground he was in favor of an affirmance of the judgment of the Supreme Court which was for the plaintiff on another ground (20 Wend.,
167) and the judgment was affirmed by a vote of fourteen to two. As nothing appears to the contrary it must be understood that the opinion was concurred in by all the members of the court who voted for affirmance. In that case the goods were marked for Willardsburgh thereby showing that was their destination; but marks are only evidence on the subject. The evidence in the present case, that the destination of the goods was New-York, is as conclusive as if they had been marked for that city. In that case, as in this, further instructions were required at the intermediate point to start the goods from there for their destination. In neither case was any new motion necessary; a continuance of the original motion alone was required. The chancellor comments on the case of Dixon v. Baldwin and distinguishes it from the case in the Court of Errors. In this connection I refer again to Buckley v. Furniss and Mottram
v. Heyer before cited.
The following cases also strongly sustain the views above stated. Ellis v. Hunt, (3 T.R. 465); Bohtlingk v.Inglis, (3 East, 395); Mills v. Ball, (2 Bos.  Pul.,
457); Smith v. Goss, (1 Camp., 282), Tucker v.Humphrey, (4 Bing., 516); Aguirre v. Parmelee, (22Conn., 473); Nichols v. LeFeuvre, (2 Bing. N.C., 81);Jackson v. Nichol, (5 id., 508); Coates v. Railton, (6Barn.  Cres., 422, 1 Mees.  Wels., 21); Whitehead v.Anderson, (9 Mees.  Wels., 518).
Another point made by the defendants is that they as assignees of the vendees had taken possession of the goods at New-York before the right of stoppage was exercised. They had made an entry of the goods, which remained on board the ship, at the New-York custom house. As assignees for the benefit *Page 270 
of creditors, they occupied the place of their assignor with no greater rights. A mere entry at the custom house, without paying duties and obtaining a permit, was not enough to entitle them to actual possession. Mottram v. Heyer, (5 Denio, 629).
In my opinion the judgment of the Supreme Court should be affirmed.
COMSTOCK, J., dissented: all the other judges concurring,
Judgment affirmed.