The Vendor shall not be bound to deliver the thing sold:
if the vendee has not paid the purchase price; or
If no period for payment has been stipulated.
The unpaid seller has:
1. A lien on the good; or a right to retain them, while he
has possession (for the price).
2. The right of stoppage in transitu, in case of insolvency
of the buyer.
3. A right of resale
4. A right to rescind
A seller becomes an unpaid seller: when the whole of
the price has not been paid; when a bill of exchange or
other negotiable instrument has been dishonored or
otherwise.
*whole i.e. if the whole has not yet been paid, he is still
an unpaid seller despite partial payments.
Lien: while the unpaid seller who is in possession of the
goods,is entitled to withold delivery until payment.
However the lien exists only:
1. When there is no stipulation as to credit;
2. Credit term has expired;
3. Buyer is insolvent
I. Lien exists even if the seller holds the goods as agent
of the buyer himslef or as a bailee for the same. (Hence,
what is material is actual possession)
In case of part delivery, lien exists as to the remainder.
Seller loses his lien on the goods:
1. Once he delivers to the carrier or other bailee
For the purpose of transmission to the B
Without reserving ownership or right of possession;
2. Once buyer or his agent obtains possession;
3. By waiver.
He does not however lose the lien by the sole reason
that he has obtained a favorable judgment for the price
II. Stoppage in transit exists once the buyer becomes
insolvent. This right of stoppage entitles the unpaid
seller to stop tranist and resume possession, and thus,
entitled to the same rights as if he never parted with
possession. (This revives the unpaid sellers lien)
Goods are in transit:
1. From the time they are delivered to the carrier or
other bailee ftp of transmission to the b;
2. If the buyer rejects the goods and refuses to take
possession, even if the seller refuses to take them back;
No longer in transit:
1. If the B or his A takes possession before arrival at the
Appointed Destination
2. If after arrival at the AD, the carrier or bailee
acknowledges to the b or his a, that they will hold the
goods for the buyers or agents behalf, and thus
continues in possession for the b/a
3. If the carrier wrongfully refuses to deliver the goods
to the buyer
How stoppage in transitu exercised? It is either:
By obtaining actual possession before the buyer
does;or
By giving notice to the carrier or other bailee who is in
possession: this may either be:
To the person in actual possession or
To his principal (carrier/bailee), in which case,
to be effectual, it must be given at such time and under
such circusmtances that it may still prevent delivery by
exercising reasonable diligence.
The carrier or bailee will not be obliged to give the
goods back to the seller, until the seller surrenders the
negotiable document of title, if one has been issued.
III. Right of resale of exists only in favor of an unpaid
seller who still has a lien or has exercised his right of
stoppage, only in case of:
1.Perishable goods
2.Express reservation by the seller, in case of default
3.Default in payment for an unreasonable time
G: Notice to the buyer is not necessary, validity of resale
unaffected by lack thereof.
E: if the ground is default in payment for unreasonable
period of time, the fact of giving or failure to give notice
is relevant on the issue of whether the default of the
buyer is considered to have already been for an
unreasonable time.
*in absence of express reservation of right to resell or
to rescind, mere defualt does not automaticlly give the
unpaid seller such rights. The default must have been
for an unreasonable period of time.
In all instances notice to the buyer of time and place of
resale is not essential. Its not an auction guys. Theres no
redemption chuchu here. It may be a private sale.
Likewise, the seller can never be the buyer in the resale,
directly or indirectly.
IV. Right to rescind the trasfer of title and resume
ownership, same:same: lien or stoppage
1.Express reservation
2.Default for unreasonable time
Unlike, right of resale which is almost purely unilateral,
right to rescind requires that the unpaid seller has
either:
1. Gives notice to the buyer of his intention to
rescind;or
2. Some other overt act indicating such intention
to rescind.-this overt act need not be
communicated to the buyer.