Stoppage in Transitu
By: R. García De Paredes
Under certain circumstances a seller, who has shipped commodities by sea, in certain manner that their ownership, yet not the possession, has been transferred to the buyer, maintains the right to resume the possession of the commodities in the during its transit to the buyer.
This resumption of the possession by the seller does not imply rescission of the contract, but just exerting the right to insist for payment of the price or cost of the merchandise.
This right, known as "stoppage in transitu", may be exerted:
By a seller of commodities who has not received the corresponding payment, in case that the buyer is insolvent.
Against said buyer and all the persons who may be claiming to him.
Against the beneficiary to whom the bill of lading has been endorsed or any other document of title over the commodities in reference, who has considered or made said endorsement or transfer, unaware of any circumstance that would have impeded considering said endorsement or transfer as a valid transfer of the commodities.
At any time prior to possession by the buyer of the merchandise, by itself or is agent, and the transit has been completed.
These considerations are pertaining to matters of the bill of lading as a security or a negotiable document, or as it is known in maritime law "a document of title".
