Blackman v. Pierce

Crocker, J. delivered the opinion of the Court—Norton, J. concurring.

This is an action brought against Pierce, Church & Co., ware-housemen at Red Bluff, and Johns, the Sheriff of Tehama County, to recover the value of a lot of goods sold by the plaintiffs, merchants in San Francisco, to one McDaniel, of Trinity Center, Trinity County; and which they claim by the right of stoppage in transitu, the purchaser having become insolvent after the sale of the goods. It appears that the goods were duly marked to McDaniel, care of Pierce, Church & Co., Red Bluff; that the plaintiffs shipped them on a steamer at San Francisco, and they-duly arrived at Red Bluff, the point of transhipment from the river steamer to wagons, to be transported to their final destination ; that Pierce, Church & Co. put them in their warehouse, advised McDaniel of their arrival, and he wrote them that he would send a team after them ; that while they were thus in the warehouse at Red Bluff an attachment was levied upon them by the Sheriff, issued in an action brought by one Fuller against McDaniel; that after the purchase of the goods McDaniel became insolvent, and the price remained unpaid; that after the levy the plaintiffs, by their agent, gave notice to the warehousemen and the Sheriff that McDaniel had become insolvent ; that the goods had been sold to him by them; that the price was unpaid, and that they claimed the right of stoppage in transitu, and demanded the goods of them, and they refused to deliver them.

The right of a vendor who has sold goods on credit, when the vendee is insolvent, to stop and take them into his possession, at any time before their arrival at the place of destination, and going into the actual or constructive possession of the purchaser, is well established. Depositing them at an intermediate point, with an agent of the purchaser, for the purpose of being forwarded, does not terminate the transitus. (Markwald v. His Creditors, 7 Cal. [511213].) It is clear, therefore, that the mere fact that the goods had come into the possession of Pierce, Church & Co., to be forwarded to the purchaser, did not terminate the transitus or divest the plaintiffs of their right of stoppage in transitu.

This right of stoppage in transitu is paramount to any lien on the goods claimed by third persons against the purchaser. Thus it may be exercised to defeat an attachment or execution levied upon the goods by a creditor of the vendee; for the lien acquired by the levy operates only upon the interest of the debtor, but cannot defeat the paramount right of a stranger. (Hilliard on Sales, 217.) The Court found that the warehousemen stated to plaintiffs’ agent, at the time of the demand, that they had no charges upon the goods. This was stated in reply to a question of the agent, who told them he was ready to pay their charges if any they had. By this, the warehousemen waived their lien for charges, if they had any. (Everett v. Saltus, 15 Wend. 474; Everett v. Coffin, 6 Id. 608 ; Saltus v. Everett, 20 Id. 268.)