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September 2 2019

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68 The Journal of Commerce | September 2 2019 By Colin Barrett Q&A Q A Withholding cargo for past debts A buyer owes a shipper for several invoices. Yet the buyer specifically pays the invoice for cargo on a specific container through wire transfer. The container is in port waiting to be released to the consignee. Can the shipper refuse to telex-release the con- tainer that is specifically paid for because other invoices are due? WELL, THAT DEPENDS on the terms of the current sale. You say that "the buyer specifically pays the invoice for cargo on a specific container." That's from the pur- chaser's perspective, but did the seller equally specifi- cally accept that payment as applying to the new con- tainer? That is to say: Did the seller provide some docu- ment transferring title of the new lot of goods, whether currently or prospectively, to the buyer? If not, it would appear the seller is within its rights to treat the buyer's payment as applying to the overdue past indebtedness, rather than assigning it as payment for this new purchase. At the least, there's a pretty solid argument for this interpretation, which you would have to go to court to overturn with only middling chances for success. Now, the terms of that ostensible new purchase may be relevant. On what basis were these goods supposed to have been bought? In other words, where was title supposed to pass from the seller to the buyer? The terms here may be explicit to this transaction or implied by vir- tue of the seller's ordinary business practices and/or by liability for freight charges of the carrier(s) that handled the shipment. Provided these things demonstrate that the buyer was to take possession of the new lot of goods at any point during the transportation process prior to physical delivery at the buyer's facility, the seller is exceeding its legal rights by withholding the goods, notwithstanding whatever else the buyer may owe it. But I'm afraid I don't think that's the case. So far, I've gone along with your little fiction of treating this as a hypothetical, talking about "the seller" and "the buyer" as anonymous individuals. But I doubt you're posing your question just for sheer legal enlight- enment. I expect you're the buyer here and are looking for legal ammunition to try to get these goods released to you. If that's the case, I doubt I have any bullets to offer you. Quite evidently, the transportation third party holding the goods — be it a carrier or some other third party — requires the seller's directive to release the con- tainer, or you wouldn't be asking. That pretty strongly tells me the seller retains title to the goods, or at least it's presented that situation to the party holding them. I see nothing you can do to force the release. If you have proof that in fact the seller does not own the new goods and that your payment to it was effectively accepted by it as compensation for the new purchase and that title to these goods was nominally passed on to you somewhere along the line, you can take your proof to court and get the court to order the goods' release to you. But that's your only legal recourse, assuming it's even a possibility. Now, it could be that the seller somehow misrepre- sented the nature of its participation in this new transac- tion in order to get you to disgorge money to it, leading you to assume you were paying for a new shipment, when all it really intended was to induce you to make a dent in those unpaid bills. Perhaps that's the case. But you'll play the devil trying to prove that to a court that's likely to be unsympathetic to your cause. Where does all this leave you? It's pretty obvious you're going to have to negotiate some resolution with the seller. At the moment, it doesn't seem all that anx- ious to accommodate you. But there's a ray of hope to be found in the way events have transpired. The seller hasn't given you up as a lost cause. It actually dispatched your new order; the goods are sitting where you can't get at them, but they're of no value to the seller if they stay put. This tells me the seller has some motivation to work out an agreement with you for those past-dues, which may end up being less than the full amount. I'd suggest you approach the seller with such an offer. You'll have to pay something, but it's money you owe, and it should get things moving. JOC Consultant, author, and educator Colin Barrett is president of Barrett Transportation Consultants. Send your questions to him at 5201 Whippoorwill Lane, Johns Island, S.C. 29455; phone, 843 559 1277; email, For compiled past columns and other transportation-related publications, visit I doubt you're posing your question just for sheer legal enlightenment.

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