(b) If the buyer becomes insolvent and the goods are in transit, the seller may stop their delivery and enforce any of the remedies mentioned under (1), provided the railroad, express company, or other carrier, has not informed the buyer that they are holding the goods subject to his orders. The seller cannot, of course, stop the delivery of the goods after they are in the possession of the buyer or his agent, even though it was before they reached their destination. If there has been a bill of lading issued for the goods, the railroad company may refuse to give them up until the bill of lading is returned.

Until the goods have come into the possession of the buyer, the seller's right of stoppage in transitu is superior to any other claim. Other creditors have tried to attach goods under such circumstances, but the courts have always maintained the seller's priority unless the buyer himself had received them, or they had rightfully passed under his control. The buyer could not defeat the right of stoppage by selling the goods in transit to a third party. The third party would have the same rights as the first buyer and no more.

A seller who stops goods in transit on a mere rumor of the buyer's insolvency will be liable for damages if the buyer is really solvent.

3. If the goods have come into the possession of the buyer, they are his property and the seller has lost all claim to them. The seller can only bring suit for the price if it is not paid when due.

Note:

I. A provision permitting the seller to resell the goods

in the event of non-payment before delivery should be inserted in the contract in those cases

where the buyer's credit is not dependable. This allows him to protect himself by selling them without running the risk of being held guilty of breaking the contract.

§114. Rights of Buyer

When a salesman sells goods to a customer, the employer has the right to refuse to accept the order of the customer, but, if the customer can prove actual damage, the employer will be liable to the extent thereof. By allowing the salesman to hold himself out as an authorized agent with the power of sale, the employer makes himself liable for his acts.

Where the seller refuses to give up the goods to the buyer, except where the buyer does not pay at the proper time (see § 113):

I.

1. The buyer may have the right to the ownership of
the goods. In this case he may sue the seller for
damages for withholding the goods, or he may
bring what is known as an "action in replevin❞
to get possession of the particular goods.
Or the buyer may have no right of ownership over
the goods, but only a right under the contract to
have the goods delivered to him. In this case:
(a) The buyer may sue the seller for damages
for breach of the contract; or

2.

(b) If the article was of a special kind or made to order so that he could not get it anywhere else, the buyer may go into a court

of equity and sue to compel the seller to perform his contract.

The measure of damages in any of these cases is the difference between what the buyer could go out into the market and buy the goods for, and the contract price. If he

could get them for the same price or less in the market, he would, of course, have suffered no damages.

Where the seller delivers or tenders the goods but they fail to come up to a warranty which he has made for them, the Uniform Sales Act allows the buyer the following remedies:

1. He may accept or keep the goods and set up against the seller the breach of warranty by way of recoupment in diminution or extinction of the price. 2. He may accept or keep the goods and maintain an action against the seller for damages for the breach of warranty.

3. He may refuse to accept the goods, if the property therein has not passed, and maintain an action against the seller for damages for the breach of warranty.

4.

He may rescind the contract to sell, or the sale, and refuse to receive the goods, or if the goods have already been received, return them or offer to return them to the seller and recover the price or any part thereof which has been paid.

When the buyer has claimed and has been granted a remedy in any one of these ways, no other remedy is thereafter granted.

The buyer must send back the goods in as good condition as that in which they were received, unless the damage has resulted because of the fact that they were not as warranted. He cannot return them if he has once accepted them knowing that they were not as warranted, or if he has failed to notify the seller within a reasonable time that he refuses to take them.

If the goods are really not as warranted, and notice has been given to the seller that the buyer refuses to take the

goods, the buyer cannot be held liable for the price. If he has paid any part of the sum due, he is entitled to have that money back before returning the goods, and, if necessary, may sell the goods to another party in order to get back what he has paid on them, handing over the surplus to the seller.

The measure of damages which the buyer may recover for a breach of the contract of warranty is the difference between what the goods were actually worth at the time they were delivered, and what they would have been worth if they had been as warranted.

Note:

I.

In any case where the buyer intends to assert his rights, he should act promptiy. Delay may be fatal. A buyer should never accept goods without examining them. Where there was a warranty of durability, he should notify the seller of his dissatisfaction, or refusal to accept the goods, just as soon as he discovers that they are not up to the warranty. It is a prudent thing in such a case to provide in the agreement of sale that the buyer may keep back part of the purchase price till he has tested the article warranted.

§115. Rescission of Sale

A' rescission results from failure to perform a contract of sale. Both parties may now agree or one party may call it off and the other may acquiesce. If the other does not acquiesce, the rights of the parties must be determined by suit as set forth in the earlier part of this chapter.

In case of rescission: (1) The buyer and the seller may agree to cancel the contract. (2) When the seller has the goods in his possession or has stopped them on the way to the buyer, he may call off the sale if he has reserved that

right in the contract and the buyer does not carry out his agreement: or if the buyer fails to pay for the goods within a reasonable length of time. (3) The buyer may call off the contract if the goods are not as warranted.

When the sale is called off by agreement, the buyer must return the goods to the seller, and the seller must return the price to the buyer. But the buyer may keep the goods until the seller pays him back what he has paid, and the seller may keep the price until the buyer returns the goods. Either party may take the initiative. The one who most desires to cancel the sale will probably move first.

When goods are not up to the warranty the buyer must return the goods in the same condition in which they were when he received them. He may either actually return them or notify the seller that he refuses to accept them and will hold them subject to his order.

Note:

I.

1. Either party who wants to call off the sale should do so just as soon as he finds out that he has good reason to cancel it. The court will not look with favor on any delay, as it is not fair to the other party. The buyer may sell the goods if necessary and get out of the money realized what he has paid on them. If he has paid the entire price and the goods do not realize that amount when sold, he may sue the seller for what he has lost on the transaction.