The seller's personal remedies against the buyer by way of action for the price of the goods or for damages for non-acceptance are discussed in chapter 8. An unpaid seller may also have certain rights in rem-against the goods themselves - rights which are of special value in the case of the buyer's insolvency or inability to pay the price or damages.
The Sale of Goods Act (Ont. s. 38; U.K. s. 38) provides: 38- (1) The seller of goods is deemed to be an "unpaid seller" within the meaning of this Act(a) when the whole of the price has not been paid or tendered;
(b) when a bill of exchange or other negotiable instrument has been received as conditional payment, and the condition on which it was received has not been fulfilled by reason of the dishonour of the instrument or otherwise.
(2) In this part of this Act the term "seller" in cludes any person who is in the position of a seller, as for instance, an agent of the seller to whom the bill of lading has been endorsed, or a consignor or agent who has himself paid or is directly responsible for the price. "This part" of the statute includes ss. 38 to 47. In the United States the corresponding section (s. 52) of the Uniform Sales Act is to the same effect, except that clause (b) reads as follows:
(b) When a bill of exchange or other negotiable instrument has been received as conditional payment, and the condition on which it was received has been broken by reason of the dishonor of the instrument, the insolvency of the buyer, or otherwise.
If the property in the goods which are the subject of a contract of sale has passed to the buyer, the unpaid seller may have a lien or right of stoppage in transitu and a right of re-sale. These are rights conferred by law, in certain circumstances, upon the seller in respect of goods of which he has ceased to be the owner. The validity of the title which he purports to give to a third party upon the re-sale of the goods will, as a rule, depend upon his right to re-sell, but, on the principle of estoppel discussed in chapter 3, 44 f., and in the cases mentioned in this chapter, the seller in possession of goods may in some circumstances confer a good title upon a third person whether or not the seller, in re-selling, is acting in breach of his contract with the original buyer.
If the property in the goods has not passed to the buyer, the seller cannot have a lien, because the goods are his own, but he can withhold or stop delivery, and re-sell. When he withholds or stops delivery, or re-sells, he does so as owner of the goods, and his ownership is sufficient warrant for his action as regards the goods and any third party to whom he sells, notwithstanding that his action is in breach of his contract with the original buyer. In order, however, that his action may be justified as regards the original buyer, the circumstances must be such that, if the property had passed, he would have had a lien or a right to stop delivery, and re-sell. In other words the seller's right to withhold or stop delivery of his own goods are, as regards the original buyer, co-extensive with his lien upon, or right of stopping delivery of, goods which have become the property of the buyer.
The Sale of Goods Act (Ont. s. 39; U.K. s. 39) provides: 39-(1) Subject to the provision of this Act and of any statute in that behalf, notwithstanding that the property in the goods may have passed to the buyer, the unpaid seller of goods, as such, has by implication of law
(a) a lien on the goods or right to retain them for the price while he is in possession of them;
(b) in case of the insolvency of the buyer, a right of stopping the goods in transitu after he has parted with the possession of them;
(c) a right of re-sale as limited by this Act;
(2) Where the property in goods has not passed to the buyer, the unpaid seller has, in addition to his other remedies, a right of withholding delivery similar to and co-extensive with the rights of lien and stoppage in transitu where the property has passed to the buyer.
In the United States the corresponding section (s. 53) of the Uniform Sales Act is to the same effect, except that in sub-s. 1 clause (d) is added as follows:
(d) a right to rescind the sale as limited by this Act.
As to the seller's lien or right of retention, see 73. As to stoppage in transitu, see 74. As to re-sale or pledge by the buyer, see 75. As to re-sale by the seller, or, in the United States, recission by the seller, see 76.