Short answer. Goods are in transit from the moment they are handed to a carrier or bailee for delivery to the buyer, until the buyer or the buyer's agent actually takes delivery. If the buyer rejects the goods and the carrier still holds them, they remain in transit even if the seller refused to take them back.
What the law says
Goods are in transit within the meaning of the preceding article: (1) From the time when they are delivered to a carrier by land, water, or air, or other bailee for the purpose of transmission to the buyer, until the buyer, or his agent in that behalf, takes delivery of them from such carrier or other bailee; (2) If the goods are rejected by the buyer, and the carrier or other bailee continues in possession of them, even if the seller has refused to receive them back.
Civil Code, Article 1531 — When Goods Are 'In Transit'. Read the full provision →
When transit begins and ends
Transit begins the moment the seller hands the goods to a carrier — by land, water, or air — or any other bailee whose job is to bring them to the buyer. It ends when the buyer, or someone acting on the buyer's behalf, actually takes delivery. The rule applies symmetrically: the seller's right to stop exists only during the window between departure and arrival at the buyer's hands. Once the buyer physically has the goods, the right of stoppage is gone, regardless of whether the price has been paid.
Three situations where transit has already ended
Article 1531 lists three scenarios where goods are no longer in transit. First, if the buyer or the buyer's agent collects the goods before they reach the appointed destination. Second, if the goods arrive at the destination and the carrier acknowledges to the buyer that it is now holding the goods on the buyer's behalf — that acknowledgement converts the carrier from a transporter into the buyer's own bailee, ending transit. Third, if the carrier wrongfully refuses to deliver to the buyer — the law does not reward the seller for a delay caused by the carrier's own breach.
Chartered vessels or vehicles: a factual question
When the buyer charters a ship, freight train, truck, or airplane to carry the goods, the legal position is less automatic. Article 1531 says the answer depends on the circumstances: is the carrier acting as an independent transporter, or as the buyer's own agent? If the chartered vehicle is genuinely acting as the buyer's agent from the start — moving the goods at the buyer's direction and under the buyer's control — then loading is already constructive delivery to the buyer, and transit may be treated as already over. The facts of each transaction determine which characterisation applies.
Part delivery and what it means for the rest
If only part of the goods has been delivered to the buyer, the remainder may still be stopped in transit. The exception is where the circumstances of the part delivery show that the parties agreed to treat it as giving up possession of the whole lot. An agreement of that kind — express or implied from the situation — would end transit for the undelivered balance as well. Absent such an agreement, the seller who acts quickly after partial delivery may still intercept what remains in the carrier's hands.