Stevens v. Wheeler

Ingraham, J.

The question in this case is whether a vendor of goods can exercise the right of stoppage in transitu after the goods have been delivered by the carrier to a third person, on the order of the vendee, although they had never been delivered to the vendee at the place directed by him at the time of the purchase.

For the purpose of this case it may be conceded that the plaintiffs had a right to stop the goods, if they were still in transitu; and then it would only remain to inquire whether these goods were still in that condition. I suppose it will not be denied that a delivery to the vendee’s agent would be the same as a delivery to him. So long ago as Lickbarrow v. Mason, (2 Term Rep. 63,) it was held that a mere transfer of the bill of lading, by a vendee, to third persons, for value, before the arrival of the goods, terminated the right of stoppage in transitu, and vested the title in the assignee, although the vendee had become insolvent before the delivery. In Gurney v. Behrend, (25 Law and Equity Rep. ,) Lord Campbell says: “Ever since the great case of Lickbarrow v. Mason, the law has been considered to be that the bona fide transferee for value, of a bill of lading indorsed by the shipper or his consignee, has an absolute title to the goods, freed from the equitable right of the unpaid vendor to stop in transitu from, the purchaser, and we believe it to be of essential importance to commerce that this law should be upheld.” So in Key v. Cotesworth, (14 Law and Eq. Rep. 435,) it was insisted in a similar case, that the right of stoppage in transitu subsisted, in consequence of the insolvency of the purchaser, but the court held that the vendors could not recover after a sale by the vendee. (See also Wilmshurst v. Bowker, 7 Man. & G. 882.) So also it has been held that goods deposited in a warehouse at the end of the journey were free from the right of stoppage, and that the transitas was at an end. (Dodson v. Wentworth, 4 Man. & G. 1080. 5 Scott N. R. 821.) In Godts v. Rose, (33 Law and Eq. Rep. 268,) similar questions to those in this case were involved, and although in that, case the vendors recovered, on the ground that there had been no delivery, Williams J. says¿ “Ho doubt if the order had been handed to the defendant and he had taken it to the wharfin- ' ger, and it had been agreed between them that the latter should hold the oil for the defendant, as his agent, there would have been a complete transfer and delivery.”

In Plymouth Bank v. Bank of Norfolk, (10 Pick. 454,) it was held that an order for delivery, upon the depositary, whether he obeys it or not, or sets up a title to hold for himself, divests the property of the vendor. And where the vendee, even before the arrival of the goods at the place of their ulterior destination, does any act equivalent to taking possession, the transitas is at an end. (Forster v. Frampton, 6 B. & C. 107. Jordan v. James, 5 Ham. 102.)

The order in this case was for only a part of the goods, and to be selected by the defendant. If such order had not been completed by the selection and delivery, there might be room for doubting whether such an order was sufficient to terminate the transitas. But I think there can be no doubt, where the order has not only been delivered to the carrier but the goods have actually been received by the person to whom the order was given, and removed by him. The rule is clearly stated to be if the goods be once delivered to a servant or agent of the vendee authorized to receive them by him, the right of the vendor to stop them, in the event of the insolvency of the vendee, is gone. (Bolin v. Ruffnagle, 1 Rawle, 9.)

It would be sufficient for the decision of this case merely to treat the defendant as the agent of the vendee in receiving the goods; and in such case the delivery to him of the goods would terminate the creditor’s right over the goods. And a delivery to the vendee, of only a part of the goods sold, is a delivery of the whole, so far as to bar the right of stopping them on their passage. (2 H. Black. 504. 6 East, 614.)

If this be the law as to the vendee, or his agent, with how much more force can it be applied to a case of a purchaser from such vendee, who has received the goods and paid therefor. A bona fide purchaser of goods from a vendee, even where the delivery to him by the vendor Was conditional, will acquire a valid title on receiving the delivery. (Covill v. Hill, 4 Denio, 323. Smith v. Lynes, 1 Seld. 41.) If this be the rule where the delivery was originally conditional, surely it cannot confer a less title where the vendor’s claim is merely to stop the goods in transitu. The same principle is sanctioned in Buckley v. Furniss, (15 Wend. 137,) although that case is cited to show that the vendor may exercise the right before the goods come to the possession of the vendee.

From all these cases, and I can find none sanctioning a contrary doctrine, the following rules are deducible, viz: That the vendor has a right to stop goods sold by him, where he discovers the vendee to be insolvent, at any time while the goods are in transitu. That the transitus continues until the goods reach the place of destination, unless sooner terminated by the act of the vendee. That a delivery to the vendee, of the goodsj or a part of them, or a delivery to his agent or to a bona fide purchaser from him, terminates the right of the vendor of the goods to stop them.

[Dutchess General Term, May 11, 1858.

S. B. Strong, Lott and Ingraham, Justices.]

I have not referred to the fact of an assignment having been made, the same day, by the vefrdee, for the benefit of his creditors. I can see in that nothing to alter the rights of the defendant. The purchase by him, followed by possession, would protect his purchase if the fact of any other sale or transfer having been made without delivery had not come to his knowledge. Several of the cases I have referred to sustain this principle. Whether the defendant be considered as the agent of the vendee, or as a bona fide purchaser without notice, or the agent of the assignee would be immaterial in making out the one material fact, viz: that the goods had in some way come to the possession of the vendee without fraud. The moment that is established, the transitus is at an end.

■The instruction to the jury, in this case, that “the goods had been stopped by the vendor while in transit, and that the plaintiff was entitled to recover,” was, I think, erroneous, and a new trial should be granted. Costs to abide the event.

Lott, J., concurred.

Stbokg, P. J., dissented.

Hew trial granted.