Short answer. No. Under Article 1535, once a negotiable document of title has been issued for goods, no seller's lien or right of stoppage in transit can defeat the rights of a purchaser for value in good faith to whom that document was negotiated — even if the seller had already notified the carrier of the lien.
What the law says
no seller's lien or right of stoppage in transitu shall defeat the right of any purchaser for value in good faith to whom such document has been negotiated, whether such negotiation be prior or subsequent to the notification to the carrier, or other bailee who issued such document, of the seller's claim to a lien or right of stoppage in transitu
Civil Code, Article 1535 — Effect of Buyer's Resale on Seller's Rights. Read the full provision →
The seller's lien as a general rule
An unpaid seller has the right to retain goods until payment — a seller's lien — and, even after parting with possession, may stop goods in transit if the buyer becomes insolvent before delivery is complete. These are protective rights that the Civil Code gives the seller. However, Article 1535 makes clear that these rights operate against the buyer and do not automatically bind innocent third parties. The fundamental question is whether the seller's lien survives once the goods are covered by a negotiable document of title that has changed hands.
The negotiable document cuts off the seller's rights
When a carrier or bailee issues a negotiable document of title — such as a negotiable bill of lading — for the goods, the document represents the goods themselves. Whoever holds the document and received it for value in good faith acquires the rights it represents. Article 1535 provides that in this situation, no seller's lien or right of stoppage in transit shall defeat the right of any purchaser for value in good faith to whom the document was negotiated. The good-faith purchaser takes free of the seller's claims.
Timing of notification does not matter
A key detail in Article 1535 is that it does not matter whether the negotiation of the document happened before or after the seller notified the carrier of the lien or stoppage claim. Even if the seller told the carrier to hold the goods and then the document was subsequently negotiated to a good-faith purchaser, the purchaser still wins. Conversely, if the document was negotiated first and the seller only later tried to assert the lien, the result is the same. The good-faith purchaser's rights are protected regardless of when they entered the picture relative to the seller's notification.
Why good faith and value are required
The protection is limited to purchasers who both paid value and acted in good faith. A person who received the document as a gift — without giving anything in exchange — cannot claim this protection. Nor can someone who knew of the seller's unpaid claim or had reason to investigate but did not. This ensures that the rule protects genuine commercial actors who relied on the document in normal trade, not those who received the document gratuitously or with knowledge of the seller's rights. The underlying policy is the security of commercial instruments in trade.