Definition of STOPPAGE IN TRANSITU,


STOPPAGE IN TRANSITU,

contracts. This is the name of that act of
a vendor of goods, upon a credit, who, on learning that the buyer has failed,
resumes the possession of the goods, while they are in the hands of a carrier
or middle-man, in their transit to the buyer, and before they get, into his
actual possession.


2. The subject will be considered with reference to, 1. The person who
has a right to stop goods in transitu. 2. The property whicli may be stopped.
3. The time when to be stopped. 4. The, manner of stopping. 5. The failure of
the buyer. 6. The effect of stopping.


3. - 1. The right of stopping property in transitu is confined to cases
in which the consignor is substantially the seller; and does not extend to a
mere surety for the price, nor to any person who does not rest his claim on a
proprietor~s right. 6 East, R. 371; 4 Burr. 2047; 3 T. R. 119, 783; 1 Bell~s
Com. 224.


4. - 2. The property stopped must be personal property actually sold or
bartered, on a credit. 2 Dall. 180; 1 Yeates, 177.


5. - 3. It must be stopped during the transit, and while something
remains to be done to complete the delivery; for the actual or symbolical,
delivery of the goods to the buyer puts an end to the right of the seller to
stop the goods in transitu; 3 T. R. 464; 8 T. R. 199; but it has been decided
that if, before delivery, the seller annex a condition that security, shall be
given before taking possession; or that the price shall be paid in ready money;
or that a bill shall be delivered; the property will not pass by the mere act
of the buyer~s attaining the possession. 3 Esp. Rep. 58., When the seller has
given the buyer documents sufficient to transfer the property, and the buyer,
upon the strength of such documents, has sold the goods to a bona fide
purchaser without notice, the seller is divested of his rights 2 W. C. C. R.
283; but a resale by the buyer does not, of itself, and without other
circumstances, destroy the vendor~s right of stoppage in transitu. 6 Taunt. R.
433 Vide Delivery; and 1 Rawle~s R. 9; 1 Ashm. R. 103; Harr. Dig. Sale, III. 4;
7 Taunt. R. 59; 2 Marsh. R. 366; Holt~s R. 248; 1 Moore~s R. 526; 3 B. & P.
320; Id. 119; 5 East, R. 175.


6. - 4 The manner of stopping the goods is usually by taking corporal
possession of them; but this is not the only way it may be done; the seller may
put in his claim or demand of his right to the goods either verbally or in
writing. 2 B. & P. 257, 462; 2 Esp. R. 613; Co. Bankr. Law, 494; Holt~s
Cases, N. B. 338. Vide Corporal Touch.


7. - 5. The buyer must have actually failed, or be in actual and
immediate danger of insolvency.


8. - 6. The stopping of goods in transitu does not of itself rescind
the contract. 1 Atk. 245; Co. B. L. 394; 6 East, R. 27, n. The seller may,
therefore, upon offering to deliver them, recover the price. 1 Campb. 109; 6
Taunt. 162. But inasmuch as the seller is permitted in equity to annul the
transfer he has made, by stopping the goods on their transit, and by that means
to deprive the general creditors of the buyer of property, which, in strict
law, has passed to their debtor, it has been considered as equitable, on the
other hand, that this act should be accompanied by a rescinding of the whole
contract, and a renunciation of any further claim; since it would be a great
bardship to give a preference to the seller over, the other creditors; and
subject the divisible funds, which have derived no benefit from the contract,
to a further claim of indemnification. 1 Bell~s Com. B. 2, pt. 3, c. 2, s. 2,
§5.


Vide, generally, 2 Kent, Com. 427; Bac. Abr. Merchant, L; Ross on
Vend., Index, h. t. Selw. N. P. 1206; Whitaker on Stoppage in Transitu; Abbott
on Ship. 351; 3 Chit. Com. Law, 340; Chit. on Contr. 124-126; 2 Com. Dig. 268;
8 Com. Dig. 952; 2 Supp. to Ves. jr. 231, 481; 2 Leigh~s N. P. 1472; 1 Bouv.
Inst. n. 959-65.




Source: Bouviers Law Dictionary 1856 Edition

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