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 which 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 hardship 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, Sec. 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.