Okla. Stat. tit. 12A § 2-705
Okla. Stat. tit. 12A, § 2-705
Oklahoma Code Comment
Prior Statutory Provisions:
2 O.S. § 9-70.
42 O.S. §§ 36 - 38.
Text and derivation of prior provisions, see Appendix at end of this title.
Comment:
(1) At common law, the right of stoppage in transit existed only as to goods in the hands of a carrier. The Commercial Code broadens the right to include ''any other bailee." The previous Oklahoma statute seemed to be as broad as the Commercial Code.
At common law, and under the previous Oklahoma Statutes, the right of stoppage in transit could be exercised only for the insolvency of the buyer, or when the buyer declared his unwillingness to pay. See 42 O.S. § 36, now repealed. The Commercial Code broadens this right. As to carload or larger shipments, the right may be exercised when the buyer repudiates or fails to make a payment due before delivery or if for any other reason the seller has a right to withhold or reclaim the goods. But as to smaller shipments, the right exists only upon the buyer's insolvency. The official comment states that the seller can protect himself by shipping COD, and that the cost and inconvenience to the carrier in stopping shipment is not justified. It should be noted that when goods are shipped under a seller's order bill of lading, which the seller retains until the purchase price is paid, the right of stoppage in transit is not necessary. The seller retains sufficient control over the goods by the retention of the bill.
(2) (a) The previous Oklahoma statute, 42 O.S. § 37, now repealed, was similar, but provided further "or into [possession] of his agent, unless such agent is employed merely to forward the property to the consignee." The Commercial Code is silent as to delivery to an agent of buyer. This is basically an agency question, for under the law of agency receipt by an agent is in law receipt by the buyer.
(b) Oklahoma has had no previous similar statute or decisions. Under the common law, the right existed only while the goods were in "transit." It did not exist after the goods came to rest, except when the goods were in the process of being forwarded by another carrier to final destination. The Commercial Code extends that right until there is actual delivery to the buyer, or there is acknowledgment by a bailee that the goods are held for the buyer, even though the goods are stored in a warehouse. The previous Oklahoma statutes permitted stoppage in transit by notice to the carrier or "depositary of the property," which indicates that the right of stoppage was not terminated by the goods coming to rest. See the previous Oklahoma statutes, 42 O.S. §§ 37, 38, now repealed. The previous Oklahoma statute, however, had no provisions on "attornment," and there are no previous Oklahoma decisions.
(c) The previous Oklahoma statutes seemed to grant the right of stoppage as long as the goods were in the possession of the carrier or any other depositary.
(d) Oklahoma has had no previous similar statute or decisions.
(3) (a) and (b) The previous Oklahoma statute, 42 O.S. §38, did not set out these rules. There are no previous Oklahoma decisions.
(c) The previous Oklahoma statutes and decisions were silent on this problem. A carrier is under a legal obligation to deliver the goods to the holder of a negotiable document of title. See Article 7 on Documents of Title. Therefore, to prevent possible liability of the carrier who honors an order to stop delivery to the holder of a negotiable document, the Commercial Code provides that the order may be given only upon surrender of the negotiable document.
(d) The previous Oklahoma statutes and decisions were silent on this problem. In connection with the right of a financing agency to stoppage in transit set out in §2-506, the official comment to that section says: "This section does not attempt to create any new rights in the financing agency against the carrier which would force the latter to honor a stop order from the agency, a stranger to the shipment."