The particular circumstances in which an 'unpaid seller" (as defined in the provision of the statute already quoted) is justified in withholding delivery are defined by the sections of the statute about to be quoted. It will be observed that in these sections the words right of reten-tion'-borrowed from Scottish law-occur as an altern-ative of "lien"a technical term of English law. It happens not only that the words "right of retention" are more intelligible to the average layman than the English term- a happy quality which is rare, in the case of Scottish law terms but also that the sections in which these words occur are rendered more accurate by their insertion. In so far as these sections authorize a seller to withhold delivery of goods of which he is still the owner, the words " right of retention" alone are appropriate. A man cannot, strictly speaking, have a "lien" upon his goods, but he may have a "right of retention" After the property has passed, eith er term is. appropriate.
A lien is a mere personal right of retention, and is therefore dependent upon possession, as contrasted with a pledgee's special property in goods pledged a special property which may be transferred to a third person subject to the pledgor's rights. A lien comes to an end with the destruction of the goods, and, apart from contract, does not attach to insurance upon the goods.
Sweet v. Pym, 1800, 1 East 4, 16 R.C. 142; Donald v. Suckling, 1866, L.R. 1 Q.B. 585, at p. 612, 21 R.C. 301, at p. 327; Halliday v. Holgate, 1868, L.R. 3 Ex. 299, at pp. 302, 303; Chew v. Traders' Bank of Canada, 1909, 19 O.L.R. 74.
The Sale of Goods Act (Ont. s. 40; U.K. s. 41) provides:
40- (1) Subject to the provisions of this Act, the unpaid seller of goods who is in possession of them is entitled to retain possession of them until payment or tender of the price in the following cases, namely:
(a) where the goods have been sold without any stipulation as to credit;
(b) where the goods have been sold on credit but the term of credit has expired;
(c) where the buyer becomes insolvent.
(2) The seller may exercise his right of lien notwithstanding that he is in possession of goods as agent or bailee for the buyer.
Sub-s. 1 expresses in another form the principle stated in s. 28 of the Sale of Goods Act, namely, that unless it is otherwise agreed, delivery of the goods and payment of the price are concurrent conditions. If the contract is for the sale of goods on credit, the buyer is as a rule entitled to delivery before payment, but not in the case of his insolvency. See chapter 6, 61.
The Sale of Goods Act (Ont. s. 2; U.K. s. 62) provides:
A person shall be deemed to be insolvent within the meaning of this Act, who either has ceased to pay his debts in the ordinary course of business or cannot pay his debts as they become due.
In the United Kingdom the following words are added: whether he has committed an act of bankruptcy or not and whether he has become a notour bankrupt or not.
Sub-s. 2 as originally drofted by Chalmers was confined to the case where the buyer was insolvent, in accordance with the law prevailing prior to the statute. At common law the lien was not exercisable after an attornment by the seller to the buyer if the buyer was merely in default, being solvent.
Cusack v. Robinson, 1861, 1 B. & S. 299, at p. 308; Grice v. Richardson, 1877, 3 App. Cas. 319; Chalmers, Sale of Goods, 7th ed 1910, pp. 101, 104; 25 Halsbury, Laws of England, p. 243, note (d); Willis, Sale of Goods, pp. 94 f. As to the possible effect of the amendment upon the law with regard to "actual receipt" under the Statute, of Frauds, see chapter 2, 26. The Sale of Goods Act (Ont. s. 41; U.K. s. 42) provides: 41. Where an unpaid seller has made part delivery of the goods he may exercise his right of lien or retention on the remainder unless such part delivery has been made under such circumstances as to show an agreement to waive the lien or right of retention. In Kemp v. Falk, 1882, 7 App. Cas. 573, at p. 586, 23 R.C. 399, at p. 404, Lord Blackburn, after referring to Dixon v. Yates, 1833, 5 B. & Ad. 313, 23 R.C. 385, said:
The rule I had always understood, from that time down to the present, to be that the delivery of a part may be a delivery of the whole if this is so intended, but that it is not such a delivery unless it is intended, and I rather think that the onus is upon those who say that it was so intended.
The Sale of Goods Act (Ont. s. 42; U.K. s. 43) provides: 42-(1) The unpaid seller of goods loses his lien or right of retention thereon
(a) when he delivers the goods to a common carrier or other bailee for the purpose of transmission to the buyer without reserving the right ofdisposal of the goods;
(b) when the buyer or his agent lawfully obtains possession of the goods;
(c) by waiver thereof.
(2) The unpaid seller of goods having a lien or right of retention thereon, does not lose his lien or right of retention by reason only that he has obtained judgment for the price of the goods.
As to reservation of the right of disposal, see chapter 3, 38.