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~7 
 
 AN EXPOSITION 
 
 or TBI 
 
 PRINCIPLES OF ESTOPPEL 
 
 BY MISlcEPRESENTATlOJST 
 
 BT 
 
 JOHN S. EWART 
 
 WlMM»BO, MAMROaAi OAHAOA 
 
 
 TORONTO 
 
 THE OAESWELL COMPANY. Lmww 
 
 1800 
 
K5f1 
 EZ 
 
 /loo 
 
 
 International Copvr,g 
 
 HT, 1900, 
 
 By 
 
 *' ^«^*ftvirvG EWart. 
 
PREFACE. 
 
 One ThouMiiir 
 ' Agriculture, 
 
 "We are sadly in need of some short phrases wherewith 
 to distinguish the actors in cases of estoppel. There is " the 
 party to whom the representation is made." More shortly 
 we might say "the party asserting the estoppel,"— in other 
 words, the "estoppel-asserter," as we shall style him. And there 
 is « the person by whom the representation is made." Him 
 we shall call, in sharp contrast, " the estoppel-denier." Such 
 phrases are preferable to the arbitrary designation of the par- 
 ties as A. and B.— a plan resorted to in sheer desperation by 
 some writers;! for there is nothing in the letters to help one 
 to remember which is which. Even head-notes are often too 
 long for easy identilication of A. and B. 
 
 Eemembering that special glossaries for single volumes 
 may be necessary, but, at the hazard of rejection, must bo 
 capable of comfortable assimilation and effortless recollection, 
 the present writer hesitates to do more at present than sub- 
 mit for approval a word which may, in discussing estoppel, be 
 substituted for the ever-recurring phrase: "One who changes 
 his position prejudicially upon the faith of some misrepresen- 
 tation." 
 
 Falsdvert^ has the advantage of having for its first syllable 
 a word familiar enough to all lawyers, and for its second that 
 
 1 Cabab6 on Estoppel, 5& « Pith," the radical of a Greek verb 
 
 » Kindly suggested by the Rev. signifying to persuade; and "ai- 
 
 Prof. John Campbell, Presbyterian lactos," a verbal adjective (from the 
 
 College, Montreal. The Rev. Father Greek verb allaao, to change) sig- 
 
 Drummond, S. J.. St Boniface Col- nifying something that has h«e?i 
 
 lege, St Boniface, offers "Pithal- changed— some one. therefore, who 
 
 toc<o«," as indicating sufficiently the has been persuaded to change his 
 
 main idea. It is a combination of position. 
 
ir 
 
 PREFAOB. 
 
 which is readily recognized (with the same meaning) in con- 
 vert and pervert. Falsd is preferable to faho, the last letter 
 of which would frequently be taken as belonging to the vert^ 
 instead of to the tirst factor in the combination; and it is used 
 as an adjective in the ablative having the word re understood — 
 the whole word thus indicating one who has changed his posi- 
 tion by reason of a falsity. 
 
 „The writer believes that the chief characteristics of the 
 present work are (1) a completer and more scientific analysis 
 and classification of estoppel; (2) a clearer apprehension and 
 appreciation therefore of the bases and methods of estoppel; 
 and (3) a successful substitution in various departments of the 
 law of the principles of estoppel for others now in vogue. 
 
 (1) Analysis and Classification. — Estoppel by misrepresen- 
 tation has not hitherto been divided into its two most obvious 
 classes, namely, (1) estoppel by personal misrepresentation; and 
 (2) estoppel by assisted misrepresentation; and much perplex- 
 ity has arisen from the absence of the distinction. 
 
 It is often affirmed, for example, that a misrepresentation 
 must be maldfi^e in order t« work estoppel; whereas the fact 
 is that there may be estoppel although the estoppel-denier 
 has made no misrepresentation at all, nor indeed been aware 
 of the existence of misrepresentation by any other person. 
 Estoppel sometimes arises because the estoppel-denier (perhaps 
 quite innocently) has assisted the misrepresentation of a third 
 person — he has furnished the means or occasion for the mis- 
 representation, done that which has made it credible, and for 
 that reason alone is estopped. The moral quality of the mis- 
 representation in such cases cannot be material. 
 
 That the classification just suggested has been overlooked is 
 all the more extraordinary when it is remembered that as early 
 as 1787 Mr. Justice Ashhun,t enunciated a rule which has 
 
PBEFAOE. 
 
 obta^ea ,.„, «.„era. .ooopta„ee, and i. u^,, „r, wiC j 
 
 -iated muCJlnWnre: "T'"" "' '"°^'«' "' 
 oa^es no surprise wbeH; ■ '" P™'*^' I"" «"« 
 
 tomed to darZln T " '»'"«»'«'«' ">" -« are aeous- 
 
 more staple CrZ?''^"'"' °' "'"PP*'' -"' '» "» 
 
 Another classification (bv no m.«n. » 
 subserved) is the division , ' "^ '" >■»«» 
 
 (1) active and «, P""""" "''^"'P'^ntation into 
 
 W active, and (2) passive misrepresentation. By it the mnfli » 
 between those who affirm and those wh denv bat ZL 
 necessary to estoppel is terminated. ^ ""'' " 
 
 quaHt^ """"^""""""™ "*" -'op --P-«™ o, its moral 
 
 fraud is inU cl :re2r7"'""'*'r'- -" «>-'ore 
 
 eatoppel, but to the e.^ZJoTr"''' """ ""' '^ '"« 
 Which the estoppel is Cdl --P-^'^tion,. „^„ 
 
 ;^oS^;-""°-»^-''«- ,4erU^C.ta,.„Be«e.s„,«. 
 »0 A. & E. 489. *7^>' ^ «• * ^ I- 79; 89L. J. Ob. 
 
 < See oh. XIV. .V 
 
 •See oh. VIII. 
 
▼I 
 
 PKKFACE. 
 
 A third classification, or rather distinction, will be much in- 
 sisted upon in the present work, namely, that between ostensible 
 ownership and ostensible agency. It is indeed obvious enough 
 when pointed to, but its disregard has led to the strangest con- 
 fusion and misconception.' 
 
 (2) Bases and Methods of Estoppel— The first of the above 
 distinctions (that between personal and assisted misrepresenta- 
 tion) aids in very material degree the fuller apprehension of 
 the bases and methods of estoppel; brings into clearer relief 
 the concept of duty as underlying all its principles; and com- 
 pels a closer examination of social obligations in the affairs of 
 business and commerce. 
 
 The existence of a duty, not purposely and by palpable un- 
 truth to mislead another into a prejudicial change of position, is 
 easily recognized; and the common law action of deceit has pro- 
 vided a remedy in damages for breach of it. The prescription 
 of a legal duty, in the physical domain also, " to observe in 
 varying circumstances an appropriate measure of prudence to 
 avoid causing harm to one another," =* appears to be a natural 
 and inevitable consequence of the establishment of social re- 
 lations of even the most imperfect character. But the applica- 
 tion of this latter conception to the realm of affairs is plainly 
 of later growth. It must (such is human limitation), through 
 a long course of struggle between it and its denial, become 
 patently necessary and obviously right, before it can take its 
 place as a principle of decision. 
 
 That the imposition of a duty of " an appropriate measure 
 of prudence " in commerce is as essential for the effective con- 
 duct of business as it is for physical safety seems to the present 
 writer to be a conviction now within measurable distance of 
 complete acceptance. The strong tendency is in that direction, 
 notwithstanding that the House of Lords has recently inti- 
 
 1 See oil. XVIL » Pollock on Torts (5th ed.), 3a 
 
PBEFACBL 
 
 vii 
 
 tnated its adhesion to the view that every one must take ca,^ 
 of himself-the criminal law being there to give him such 
 satisfaction, or rather gratification, a« he can get out of if 
 The case before their lordships, however, related to a bill of 
 exchange, with regard to which we have been taught to think 
 in a groove made specially for "negotiable instruments," an^ 
 been trained to believe that such documents and their vagaries 
 are quite outside of all possibility of explanation according to 
 the ordinary principles of law. Estoppel will help us to reduce 
 their distracting fractiousness to order and principle.' 
 
 (3) SubsmutionofEstoj^elforOth^rPrinoiplea.-(A) For 
 It IS the belief of the present writer that the hollowness of the 
 word " negotiable," as a distinguishing characteristic of certain 
 instruments, has in later years become very apparent. A " ne- 
 gotiable" instrument was said to have two peculiarities: (1) a 
 transferee could sue upon it in his own name, and (2) a pur- 
 chaser might take a better title than that of his vendor Re- 
 cent legislation, by sanctioning the legal assignment of other 
 choses in action, has abolished the first of these distinctions 
 And as to the second, there are scores of cases (other than those 
 rektmg to bm. and notes) in which a purchaser takes a better 
 title than that of his vendor. Is there anything more "non- 
 negotiable » than land ? and yet is there no such thing as pur- 
 chaser for value without notice of a prior claim ? An owner 
 of goods stands by while an ostensible owner sells them; and 
 IS not the purchaser in a better position than the vendor ? Es- 
 toppel will supply the reason for the decision of all such cases 
 and aflFord a harmonizing principle. ' 
 
 (B) The law relating to bills of lading, warehouse receipts, 
 ^ock warrants and other "documents of title," with its antag! 
 
 ''Seech. XXIV. 
 
 Q. a 69a 
 
Yin 
 
 PBRFAOK. 
 
 onistio principles of (1) " negotiability " of the documents, and 
 (2) caveat emptor as to the goods they represent, can be ration- 
 alized and rendered consistent only by the steady applicatioa 
 to it of the law of estoppel by assisted misrepresentation. 
 
 (C) Bales governing priorities to real estate — those relat- 
 ing to the legal estate, to possession of the deeds, to Qui prior est 
 tempore potior eat jure — mast be saperseded by the principlea 
 of estoppel. 
 
 (D) The distinction between void and voidable instruments- 
 (with reference to their obligatory character upon the signers- 
 of them when obtained by fraud) is unscientific, and must give 
 place to estoppel. 
 
 (E) Distinction between general and special agency, so far 
 as estoppel is concerned, will be denied. The same principles 
 apply to agencies of all kinds. 
 
 (F) Perplexing points in the law of partnership will be 
 found to yield easily when treated upon the lines of estop- 
 pel. 
 
 (5) "Estoppel by negligence," for which elaborate rulea 
 have been framed, but of which it is said there is no example 
 in the law, will, it is hoped, with the help of "assisted misrep- 
 resentation," be reduced to intelligibility. Various classes of 
 such cases will be discovered, but the rules provided for their 
 decision will be found to be unsupportable. 
 
 (H) The relation of estoppel to deceit is in need of explana- 
 tion. Its elucidation will be attempted. 
 
 The method of the present work is to investigate and estab- 
 lish (in succeeding chapters) the essential requisites of estoppel 
 by misrepresentation, and to formulate them in such terms a» 
 will permit of their being carried into and eflfectively applied 
 
 in all the dennrtmAnta nf tK" lo^ir ;». ..rU;_u — i 1 
 
 - --J. — ,.;„ i„„ ,^ u«iuu catuppui operates.. 
 
PBBFAOB. 
 
 t IX 
 
 And the assertion is ventured tliat that rule is "hot . ,1, . 
 and pregnant statement o, the e»e„tial prinei;^ o,! " 
 by assisted misrepresentation." Chanter XV i. T 
 .0 declare .ith precision the .-^^Hn^IZZ'^:: 
 And chapter XVI discussps tho . i ♦• . esioppei. 
 
 The Ly havingteni:: Irr^; ;^^ '" ''"'"^"• 
 
 pe. Wi„« heen deled, and tbrelTtt 1^^1:2 
 
 goods. cho«,s in action. d«,„,a„nta of title, execution of d! 
 ments. principal and agent, and partnershV Ttb th . 
 
 ;. .^oped. that the principles oZ. Z^^; :^ ^rZl 
 
 u o^l™1 ""^ """'""'' '- '^'^ <" ""- depart!^ 
 but of ranch service in the elucidation of probleras wmT ,* 
 
 P^sent (for Uck of thera) are either relegaC" Th" . 
 
 factory catalogue of anomalies, or .reCll^l T 
 
 unde^tandings by Actions of .or. or iL^bUHy. °"" 
 
 The writer cannot fail to be impressed with the gravest an 
 Pi^hensions as he hands over to the profession the rTlIo' Z 
 labors upon a programme such as this. Kevertheirh! >, 
 «~ng «i„„ ,,., ,,,„„^, „^„^ defe^thlrrl t; 
 
 „^ t! ll"! ™^''!'f - "^-O "0 -»» assumed are ri^ 
 -. ..^. V ~. ana tnat into harmony with them must' be 
 
 '(1787)31.8. 6a 
 
PREFACE. 
 
 brought several departments of the law. He has, at all events, 
 contributed something towards a scientific synthesis of a very 
 difficult subject. 
 
 To prevent frequent repetition, it may be said here, once 
 
 for all, that liberty has been taken with many of the quotations 
 
 appeanng in the book, to the extent of italicizing some of the 
 
 words, in order that the mind of the reader may be the more 
 
 easily carritd to the point to which attention is at the moment 
 
 desired. 
 
 J. S.E. . 
 WnmiFEo, Manitoba, 1900. 
 
 fk. 
 
TABLE OF CONTENTS. 
 
 PREFACE .... 
 
 TABLE OF CASES CITED 
 
 TABLE OF ABBREVIATIONS USED IN THIS WO*RK .' 
 
 iNTRODUOnON 
 
 Estoppels tnjpai» . 
 Subdividons . 
 I>efinitioD of estoppel 
 Justification of estoppel 
 History of estoppel . 
 
 Conditions of estoppeii 
 
 CHAPTER I. 
 
 CHAPTER IL 
 
 CHAPTER Itt 
 There must be a mbreprssentation 
 Dennition of misrepresentation . 
 Necessity for misrepresentation . 
 Classifloation of misrepresentation 
 Personal and assisted 
 Direct and indirect . . . .' 
 Active ai^d passive . . . ] 
 Expressed and implied . 
 Distinction where fraud '. 
 
 CHAPTER IV. 
 The misrepresentation must be made either (i) by the es- 
 
 TOPPEI^DENIEB (PERSONAL MISREPRESENTATION); OB (2) W 
 80ME PERSON WHOSE MISREPRESENTATION THE mOPP^ 
 
 pern:;^rprnSr"^^:«-^.--^--^^^^^^ 
 
 Assisted misrepresentation . . , . * 
 
 Principal and agent 
 
 Bills and notes » . ', 
 
 Partnership • . ! ] 
 
 CertififiAtes of Rhavfis 
 
 Priorities . . . * ' * 
 
 Ostensible ownenhip * * * * * * 
 Standing-by . . ••••.-, 
 
 xxv-xli 
 Kliii-xlvii 
 
 1-9 
 1 
 2 
 8 
 6 
 7 
 
 10-11 
 
 15-17 
 13 
 12 
 18 
 18 
 18 
 14 
 14 
 17 
 
 18-27 
 18 
 18 
 
 S8 
 SS 
 88 
 84 
 86 
 
zii 
 
 TABLE OF CONTENTS. 
 
 CHAPTER V. 
 
 There must be a disregard of some duty .... 28-67 
 
 Social duties 28 
 
 An appropriate measure of prudence 80 
 
 Application to estoppel 1bi 
 
 Denied 82 
 
 Principle already in operation 84 
 
 But other reasons given 85 
 
 Egoism and altruism 37 
 
 The altruistic view advocated 88 . 
 
 Various cases of duty 89 ^ 
 
 Ostensible ownership 80 
 
 agency 40 
 
 Lulling into security 40 
 
 Partnership 41 
 
 Spaces carelessly left in documents 43 
 
 Toung y. Orota 42, 44 
 
 Schofield V. Eondesborough 48, 45 
 
 Distinction between checiis and bills .... 46 
 
 Acceptor not responsible for form of bill ... 47 
 
 No duty to guard against crime 48 
 
 Crime and any other fraud 60 
 
 Suggested views supported ..... B5 
 
 Impossibility of a rule not to facilitate fraud ... 57 
 
 Test cases 50 
 
 Custody of negotiable instruments 61 
 
 seal of company 68 
 
 rubber stamps 65 
 
 Miscellaneous cases of no duty 65 
 
 CHAPTER VL 
 
 The misrepresentation must be as to fact or law; not as 
 
 TO intention or opinion 68-79 
 
 Fact and intention 68 
 
 Intention may involve fact 68 
 
 as ground of estoppel 69 
 
 Fact and opinion . , . . . , , . , f^ 
 
 Fact and law 73 
 
 Law well known 73 
 
 Law a matter of opinion 74 
 
 Distinction between ........ 75 
 
 Advantage taken of ignorance of law ... 78 
 
 Innocent misrepresentation ..... 79 
 
 CHAPTER VIL 
 
 The misrepresentation must be op somethino material . SO-89 
 
 Several representations, and one of them untrue ... 81 
 
 Assisted misrepresentation gS 
 
TABLE OF CONTENTS. 
 
 CHAPTER VIII. 
 Fraud or bad faith is not essential 
 
 Misrepresentation and deceit . . [ ' 
 rescission . 
 estoppel . 
 
 Dy passive assistance — Fraud « nni.f «* ♦!, 
 
 tion misrepresenta- 
 
 1. I must be aware of my own right * 
 
 a The other party must be unaware of my right . 
 
 other party's ignorance . 
 Illustrations . 
 
 Personal misrepresentation -Fraud not'essential 
 
 Certificates of shares 
 Ostensible ownership 
 Partnership 
 Trustees . . 
 
 Negotiable instruments 
 
 Infants 
 Distinction between goods and lands 
 Summary of chapter 
 
 CHAPTER IX. 
 
 '"''T^ZZ^^T'''^^ ^ SOMETIMES ESSENTIAL 
 
 Meaning of negligence and carelessness 
 
 ii-atoppel by carelessness 
 
 Misrepresentation an essential element * * 
 
 Personal misrepresentation - No instances in this class 
 
 Assisted misrepresentation -General rule 
 
 Execution of documents . 
 
 Priorities «... * 
 
 Ostensible agency 
 Verification of accounts rendered 
 Stand ing-by , 
 Bills of lading . 
 Bills and notes ... * 
 Leading cases 
 
 Bank of Ireland v. Evans * ! 
 Ex parte Swan; Swan v. N. R A, 
 Rules deducible from them 
 
 Mr. Bigelow's criticism '. 
 
 Mr. Cabab6'8 criticism 
 Rule I. There ^u^ be the neglect of som« H.,V. 
 
 '"" "'i^'r ""T ^ *° ^^^ transaction Itself 
 This impossible . 
 
 Cases reviewed . 
 
 Xiu 
 
 88-97 
 83 
 85 
 85 
 
 88 
 90 
 90 
 
 90 
 
 90 
 
 98 
 
 94 
 
 95 
 
 95 
 
 96 
 
 96 
 
 96 
 
 96 
 
 96 
 
 97 
 
 97 
 
 98-131 
 98 
 100 
 100 
 101 
 103 
 103 
 104 
 105 
 105 
 106 
 106 
 107 
 108 
 108 
 108 
 109 
 109 
 111 
 113 
 
 lis 
 
 U8 
 115 
 
X17 
 
 TABLE or 0ONTENT8. 
 
 
 Nbouoekoe (carelessness) is sombtihbs essential— Confinued 
 
 Result and its explanation n^ 
 
 "In the transaotioQ itself " .... 117 
 
 Analogy from torts n© 
 
 IIL The neglect must be the proximate cause of the lead- 
 ing of the person into the mistake . . . li^ 
 
 This impossible 119 
 
 Proximate and real igo 
 
 Summary of chapter j31 
 
 CHAPTER X ^ 
 The bstoppel-assbrteb biust be a person to whom immedi- 
 ately OB mediately the misrepresentation was made 128-129 
 
 Immediately jgg. 
 
 Mediately: Intended to be passed on 124 
 
 Ambulatory and non-ambulatory representations . . 124 
 
 Representation as to solvency 124 
 
 Partnership 124 
 
 Commercial instruments 125. 
 
 Delivery orders ^ , , I25, 
 
 Warehouse receipts " . . 120. 
 
 Letters of credit 126 
 
 Bills of lading ]2o 
 
 Certificates of shares 126 
 
 Prospectuses 127- 
 
 Commercial agencies j28 
 
 Stock exchange ....,,,, 128- 
 
 Title-deeds 128 
 
 "No defenses" 128. 
 
 "Negotiable" instruments 129 
 
 Choses in action I29. 
 
 Misrepresentation to person who will probably be ap- 
 plied to for information , 129. 
 
 Misrepresentation by appearing to subscribe for shares . 180- 
 
 CHAPTER XI. 
 The estoppel-asserteb must, on the faith op the ihsrepre- 
 
 SENTATION, HAVE CHANGED HIS POSITION PBEJDDICIALLY . 181-154 
 
 I. Change of position ^ jgj 
 
 Creditors of transferrer of shares, where transfer un- 
 registered j^ 
 
 Lulled into security Igg^ 
 
 By appearance of having received money , . 138 
 
 Not advising of forgery 135 
 
 Not objecting to accounts .... 186 
 
 Means of knowledge jog 
 
 Registered instruments ..... I88 
 
 What JR A nhnnoro nf iviaii'ir.n 
 
 Change in style of living 139 
 
 Change by bringing an action .... 139 
 
 A possible change j^^^ 
 
nuecL 
 
 aJ. 
 
 :di- 
 
 DE 
 
 11$ 
 
 117 
 11» 
 
 11» 
 11» 
 120 
 121 
 
 128-129 
 123 
 124 
 124 
 124 
 124 
 125- 
 125> 
 126 
 126 
 126 
 126 
 12r 
 128 
 12fr 
 128 
 128- 
 129 
 129 
 
 129 
 180- 
 
 181-164 
 181 
 
 188 
 18a 
 188 
 18& 
 186 
 188 
 188 
 109 
 189 
 189 
 14(y 
 
 TABLE OF CONTENTS. ' 
 
 Misrepresentation not believed 
 Withdrawn . 
 Investigated . ] 
 Examples • . . ,' 
 Principal and agent 
 Certificates of shares 
 Seeming exceptions to rule' 
 Classes of persons . 
 Shareholders , 
 Creditors 
 
 Reputed ownership 
 The actuating motive . 
 Onus of proof 
 
 nr. Prej^dSr?" '*•"*'? '^'"''° 
 
 ^»«»age. real or assumed .' 
 IV. Purchaser for value without notice, 
 Auxiliary jurisdiction 
 
 • Concurrent jurisdiction [ 
 Estoppel 
 
 Legal estate 
 Summary . 
 
 XV 
 
 - • • 
 
 and falsdvert 
 
 CHAPTER XIL 
 The estoppel-drnier must have RitA«nvA»r« « 
 
 TIOIPATlNft «n«».^ REASONABLE GROUND FOR AN- 
 
 nll^ ^ *^*^°= O*" «»mON UPON THE PAl-ra 
 
 OF THE REPRESENTATION . ^^ 
 
 Distinction . . • . . 
 
 Personal misrepresentation " * • • 
 
 Sr'T'ltT''" *° '""Pertioeit questioi 
 Mr. Markby's view . 
 
 Intention or negligence . * ' * 
 
 Assisted misrepresentation * * 
 
 Active ...**•• 
 
 Summary of the chapter* .' .' 
 
 CHAPTER XIIL 
 
 The OHANaB must be reasonably consequent UPON TH. VTO. 
 
 representation or assistance ™" "^ 
 
 The Barry v. Croskey rules 
 
 Carr v. London rules 
 These rules compared . 
 Classification necessary 
 Personal misrepresentation 
 
 The two cases applied 
 
 The rules criticised . 
 
 Rule suggested . 
 
 HO 
 14a 
 140 
 140 
 140 
 141 
 141 
 141 
 141 
 143 
 143, 148 
 143 
 144 
 145 
 146 
 146 
 147 
 149 
 150 
 150 
 151 
 158 
 158 
 
 155-163 
 155 
 166 
 166 
 159 
 160 
 160 
 161 
 161 
 
 163-176 
 16.) 
 164 
 165 
 166 
 167 
 167 
 168 
 169 
 
XVI 
 
 TABLE OF 00i« ^8. 
 
 The chanob must be bbasoxablt consequent, vta—Continueck 
 Assisted misrepresentation (passive) 
 
 Rule suggested .... 
 
 Assisted misrepresentation (active) 
 
 Rule suggested .... 
 Application of suggested rule to the cases 
 
 Proximate cause 
 
 Summary of the chapter 
 
 169 
 169 
 ,170 
 171 
 171 
 174 
 175 
 
 CHAPTER XIV. 
 The Lickbarbow v. Mason and Haufax t. Wheelwright 
 
 K0LE8 , . 
 
 Liokbarrow v. Mason rule 
 
 Equivalent to estoppel by assisted misrepresentation 
 Disparate from estoppel? 
 
 Priorities 
 
 Bill of exchange 
 
 Principal and;agent 
 
 Sale of goods 
 
 Mr. Pomeroy's concurre::ce . , . , , 
 
 Rule cannot be supported? , 
 
 The case itself 
 
 Halifax ▼. Wheelwright rule .,.,,[] 
 
 CHAPTER XV. 
 Nature attd effect of estoppel . . , , 
 
 Estoppe> as a cause of action 
 
 Estoppel as a rule of evidence • . . . 
 Questions do not so arise ..... 
 Evidence must go to jury • . . . 
 Not affect weight of evidence . .... 
 
 Testimony must be admitted * 
 
 Nature of relief affected by it . . , . * 
 Amount of damages aSeoted by it . 
 
 Parties and privies 
 
 1. Does estoppel bind purchasers from the estoppel-denier 
 
 Rule as to parties and privies .... 
 
 Mr. BIgelow's qualification . . . [ 
 
 Rule not intended for estoppel by misrepresen- 
 
 tation 
 
 Method of solution 
 
 Estoppel as an "equitable right" . . * 
 Applications of proposed method , 
 , Does estoppel pass an estate .... 
 a Does estoppel bind cr-ditors of the estoppel-denier . 
 Privity and no privity ..... 
 The cases 
 
 177-186 
 177 
 177 
 178 
 179 
 179 
 ISO 
 181 
 183 
 188 
 184 
 185 
 
 Ground of srrft" 
 True position 
 
 187-221 
 187 
 188 
 189 
 189 
 190 
 190 
 190 
 191 
 105 
 106 
 106 
 197 
 
 198 
 190 
 200 
 208 
 206 
 208 
 209 
 210 
 
 ai2 
 
 SIS 
 
uedi 
 
 IT 
 
 189 
 169 
 
 ,170 
 171 
 171 
 174 
 175 
 
 177-186 
 177 
 177 
 178 
 179 
 179 
 180 
 181 
 189 
 188 
 184 
 185 
 
 187-221 
 187 
 188 
 189 
 189 
 190 
 100 
 100 
 191 
 105 
 196 
 196 
 107 
 
 198 
 199 
 200 
 203 
 206 
 208 
 209 
 210 
 SI 2 
 S18 
 
 TABLE OF C0NTKNT8. 
 ^AXCBE AKB BPKBCT OP ^ro..^ - Continued 
 
 Joint and separate creditors of i>artn«r«hJ« 
 BonaJUie and fraudulent deb^ntZa " ^^ 
 
 a n«- "'" P"*^ ^y ««toPP«' only * • 
 
 «■ Does estoppel bind in favor nfL \ ' ' 
 
 toppel-asserter *° ****«"«« <"' the 
 
 es- 
 
 CHAPTER XVL 
 
 Dboeit >nd estoppel . 
 !• Deceit . . , ' 
 2. Restitution. 
 8. Estoppel . 
 
 Conditions for relief diverse 
 
 1. Deceit -Fraud necessary ! ' 
 
 a Reatitution -Is fraud necessary! 
 
 8. Estoppel - Fraud unnecessary 
 Peculiarity in application of remTdiea * 
 The anomalous result . ' 
 
 Anomaly induces harmony 
 "he present situation 
 A suggestion . 
 
 Unsatisfactory . 
 Principal and agent 
 
 1. Tort 
 
 2. Deoeit 
 8. Estoppel 
 
 _ CHAPTER XVIL 
 
 OST^SIBLE OWNEHSHIP AND AOENCy 
 
 Confusion between the two * ' * 
 
 In the text-books ..''*• 
 
 Factors Acts •'..'' 
 Sale of Goods Act .* 
 Current phraseology 
 
 Negotiabl instruments 
 
 Priorities . . '•.••. 
 
 Sale of goods 
 
 Ostensible ownership explained ' ' ' * 
 Universal applicability • • . . 
 
 • • • r 
 
 L-D-THELEa.LEST.TE':'''"^^^^^"^ 
 
 Where the equities are equal the law w/ll prevail * 
 Four objections to this rule '" P^va'! • 
 
 The scramble for the legal estate ! ' ' * 
 
 xvii 
 
 218 
 217 
 219 
 
 230 
 
 222-287 
 222 
 222 
 228 
 224 
 224 
 2S5 
 226 
 226 
 227 
 229 
 281 
 282 
 284 
 236 
 287 
 237 
 887 
 
 franAMnl »r 
 
 o — " .m viciVOIlt 
 
 Origin of the doctrine 
 
 C&isat ratione legia, ceaaat 
 
 ipsa lex 
 
 238-250 
 239 
 239 
 240 
 241 
 241 
 242 
 243 
 248 
 248 
 246 
 248 
 
 251-275 
 251 
 251 
 253 
 254 
 855 
 868 
 
XVIU 
 
 TABLE OF 0ONTSMT8. 
 
 Land— The lboai. estate— Continued 
 
 "Nothing but fraud or evidence of fraud will oust the prior- 
 ity" as» 
 
 Meaning of fraud ...••••• 18^ 
 
 Estoppel substituted S6^ 
 
 Application 264 
 
 Caveat emptor 2<M^ 
 
 Standard of conduct M7 
 
 Apologies for the old rule 288> 
 
 Actual and contractual estates • 281^ 
 
 Support for new methods ...•«.. 271 
 
 Factors Acts 274 
 
 American law 274 
 
 CHAPTER XIX 
 
 Land — jt'ossession of the deeds ST6-289 
 
 Various rules current 276' 
 
 Possession of deeds only a circumstance .... 278' 
 
 Tabulated view of cases 279 
 
 Examination of them 
 
 Possession of deeds no effect upon priority .... 
 
 Conduct with reference to them may estop .... 284 
 
 " Fraud " as explained by the cases 28S> 
 
 Estoppel the applicable doctrine 287 
 
 CHAPTER XX. 
 
 Land— Qui pbiob est tbmpoke, potior est jubb . . . 290-26!^ 
 
 Subsidiary to two other rules 290 
 
 Conventional meaning and application 291 
 
 Contrast between the rule and estoppel 298 ■ 
 
 Opposing conclusions ...••.. 29S 
 
 An involuntary trustee • • • 29ft 
 
 CHAPTER XXL 
 
 Goods— Possession . " 296-80ft 
 
 Lands and goods, divergent rules usually applied . . . 29ft 
 
 Mere possession not evidence of ownership .... 997 
 
 Possession implying ownership 298 
 
 1. Character of the goods 298 
 
 2. Character of the place where they are . . . 298 
 & Usual employment of the person who has them . . 299 
 
 Reputed-ownership clause compared with estoppel BOO 
 
 4 Possession accompanied by other circumstances . . 801 
 
 Obtained by fraud 808 
 
 Other circumstances ...... 804 
 
 CHAPTER XXIL 
 
 Goods— Documents of title 805-849 
 
 Classification of documents of title ..... 805 
 
 Division of the subject 807 
 
 1. Documents usually spoken of as conveyances . . . 807 
 
TABLE OF (CONTENTS. 
 
 Intended as a representation by iU signer 
 
 And also by its transferrer . 
 & Dock warrants, etc. . . 
 
 Intended as representations .* 
 * Shares in companies . . . * ' 
 
 Certificates intended as reDre8enfAfi««- u* 
 
 first conclusion , • • . 
 
 Second conclusion , * ' *-" ' 
 
 Shares . ****••. 
 
 Estoppel of the signer of 'the documents 
 
 When carelessness essential • • . . 
 
 Upon what points are signers estopiied * * * ' 
 
 Estoppel of the transferrer * • • . 
 
 Bills of lading ..." 
 
 Do transfers pass* the property .* * ' * • 
 
 Negotiability . . 
 
 Symbolism , . * 
 
 Negotiability, symbolism aid esioppe'l .* * ' 
 The true view . . ^ * * 
 
 American law ..'***• 
 Some later cases . * * * * * • 
 
 American authorities* \ 
 
 Dock warrants, eta ...'**'• 
 
 A commencement upon principle ! ' ' * 
 oubmergence . . '^ * » , 
 
 Courts versus Parliament 
 
 . Resemblance to bills of lading 
 
 Shares in companies 
 
 Estoppel usually applied \ ' ' ' ' ' 
 McNeil V. Tenth Nat. Bank .* * * * * 
 Estoppel sometimes repudiated ! * ' ' 
 
 Comment . * * • • . 
 
 Seals ...[*'•••• 
 
 Lost or stolen documents 
 
 Usual rule -No title from a thief ' * ' • • 
 Modifications in some cases 
 
 Six 
 
 807 
 
 809 
 
 809 
 
 809 
 
 809 
 
 810 
 
 810 
 
 8U 
 
 812 
 
 818 
 
 818 
 
 814 
 
 816 
 
 816 
 
 818 
 
 810 
 
 819 
 
 830 
 
 822 
 
 834 
 
 335 
 
 887 
 
 838 
 
 880 
 
 883 
 
 835 
 
 885 
 
 886 
 
 836 
 
 838 
 
 S40 
 
 841 
 
 843 
 
 843 
 
 843 
 
 845 
 
 845 
 
 Estoppel principles wiu. enough fo; fact'ors [ 
 1. Case of a factor in Dossesainn 
 
 I "i^ ""l * f««*or specially accredited \ 
 
 & Case of a merchant 
 
 4. Case of a merchant who is al'so a factor 
 
 850-369 
 850 
 851 
 851 
 852 
 
 8oa 
 
XX 
 
 TABLE OF CONTENTS. 
 
 Goods — Legislation — Continued. 
 
 Review of Factors Acts and Sale of Goods Act 
 " Factors cannot pledge " — Why? . 
 
 1. Mercantile agent in possession . . 
 
 2. Consent to his possession . 
 
 8. Possession given for consignment or sale 
 4. Vendor retaining possession 
 6. Vendee prematurely obtaining possession 
 Summary of the legislation . . • 
 
 Objections to it 
 
 American legislation . . . • 
 
 CHAPTER XXIV. 
 
 Choses in action — Ambulatory and non-ambxtlatobt 
 The law merchant ....... 
 
 Its alleged antagonism to the general law 
 
 What is it 
 
 Kegotiability — Two characteristics ... 
 
 1. Transferee sue in bis own name . . • 
 No distinction there .... 
 
 & Honest acquisition confers title . . . 
 No distinction there .... 
 Negotiability and transferability .... 
 What is negotiability?— Two meanings 
 
 1. Transferability 
 
 a, Effects of transferability .... 
 Ambulatory and non-ambulatory .... 
 The cycle through which we have come . . 
 
 Decay of the old system 
 
 Summary 
 
 Freedom from equities 
 
 1. Equities of the obligor .... 
 
 Si Title of the true owner .... 
 Estoppel by ostensible ownership . . • . 
 
 Or ostensible agency 
 
 Lost or stolen instruments 
 
 Appropriate measure of prudence . . 
 Estoppel and ambulatory instruments . 
 
 Illustrations 
 
 "Negotiability by estoppel" 
 
 Considerations in support of new methods . ' . 
 
 Market overt 
 
 Loss of seal 
 
 New methods contrasted with old . . . 
 Summary 
 
 Ambulatory instruments .... 
 
 Bonds •..••«., 
 
 Scrip fo? bonds ^ ^ . , , , 
 shares 
 
 1 
 
 8A3 
 858 
 896 
 858 
 860 
 861 
 864 
 866 
 867 
 
 870-425 
 870 
 872 
 873 
 875 
 876 
 876 
 878 
 878 
 880 
 888 
 8S4 
 884 
 886 
 886 
 887 
 889 
 890 
 801 
 
 895 
 896 
 896 
 897 
 898 
 401 
 404 
 401 
 405 
 406 
 409 
 400 
 409 
 41g 
 414 
 
TABLE OF CONTENTS. , i 
 
 Mortgages ... '•••., 414 
 
 "Vouchers • . . [ *J* 
 
 Bank documents .' * • *1* 
 
 Policies of insurance ' *^'f 
 
 Transfers of shares . . .* *^'' 
 
 Charter-parties , *18 
 
 Generally ...''*•*• *18 
 
 ^'"8 and notes with extra* clauses **' 
 
 "Intended to be assigned" . ' * ' • • 480 
 
 Conclusion . . *'*•••. 481 
 
 Overdue paper . ! ' ^23 
 
 438 
 
 CHAPTER XXV. /- 
 
 i. Execution fraudulently obtained ' * • • • 426 
 
 Review of authorities ^ 
 
 Void and voidable -Unsatisfacto'ry " ' ' ' «8 
 
 Solution ... •'•••. 481 
 
 American law * • • • . 484 ' 
 
 Analogy. . ' ' * * * • .486 
 
 IL Execution fraudulently completed *^ 
 
 1. Documents confided to another person ' ' * iS 
 
 A. Negotiable instruments . * * * «» 
 
 (1) Completed docuraentB .* * * JfJ 
 
 (2) Blank documents ' • - 489 
 
 * • • • 440 
 
 (a) Known to transferee . . JJg 
 
 Customary effect . ,* 443 
 
 Estoppel the ground of de^ 
 
 oision ... AAA 
 
 /fl^ fl ^^^ l^nknown to transferee '. [ 447 
 
 (8 Spaces as distinguished from blanks . 447 
 
 (4J Signed but otherwise blank slips 12 
 
 (a) Imperfection known . ' 440 
 
 • (b) Imperfection unknown . * aaI 
 
 Summary " • . 448 
 
 a Non-negotiable instruments.* .' * ' ^l 
 
 Deeds included with other instruments* .* 44' 
 
 (1) Completed instruments . !!" 
 
 (3) Blank instruments ...'.' Jfo 
 
 (a) Known to transferee ', ! 453 
 
 in. ^^^ Unknown to transferee * akk 
 
 1. Documents stolen or found . "♦'"e . . 455 
 
 A. Negotiable instruments* .'.*'* ^* 
 
 Present uncertainf.v in ♦!,'« 1-I ' * ^'*^ 
 
 ^ ^°°!P!^t«*ndinco.;pleteinrtTumekt8 .* ^ 
 
 Criticism of present rules .?! 
 
 • • • 408 
 
xxu 
 
 TA' I-E OF CONTENTS. 
 
 EXKOCTl "* or DOCCMEXT8 — ^^ BBRE 8I0NEB VKmAVl>t3) ~- CmtinV^xL 
 
 Egoism and altruism .... 460 
 
 Ostensible ownership .... -461 
 
 I^oomplete instruments . . • • 461 
 
 Signed slips 468 
 
 Appropriate measure of prudence . . 464 , 
 
 Current practice 465 
 
 Tb6 codes 466 
 
 SL Non-negotiable instruments .... 467 
 
 An appropriate measure of prudence . 467 
 
 " Negotiable " — Meaning of word . , 409 
 
 Summary of the chapter ....*•• 4/0 
 
 CHAPTER XXVL 
 
 Prinoipal and aobmt 
 
 Four difBcultiee 
 
 Some tentative propositions . . . • 
 L General and special agency . . 
 
 The customary distinction valueless . 
 Review of the text- writers 
 
 Summary 
 
 n. Estoppel 
 
 As to existence of agency . 
 
 extent of agency . • . 
 
 In what cases 
 
 General proposition . . . 
 Medium powers .... 
 Rules, authorities and illustrations 
 Estoppel where powers withheld 
 Application of principles . 
 
 Unauthorized warranty upon sale of 
 an agent .... 
 1. Sale at a fair 
 8. Thr* owner is a horse-deak-i' 
 8. The agent is a horse-de'i U'. 
 4 No special cirnumbtancua . 
 Opinions of the t«xt*writers . 
 IIL "For the master's benefit" . . 
 
 Two opposing cases and rules . • 
 
 Tort compared with estoppel . • 
 
 Deceit classed with estoppel . . 
 
 Reconciliation by this method . 
 
 V. " Withir the scope of his authority " , 
 
 AyttvaxtMoe as to the authority . 
 
 act . . . 
 
 "Classof acts"— Extrinsic facts . 
 
 Bills of lading— A present exception 
 AppMMranoe of authority .... 
 
 a horse by 
 
 478-513 
 478 
 478 
 
 474 
 474 
 474 
 482 
 483 
 488 
 486 
 488 
 488 
 488 
 . 488 
 490 
 491 
 
 493 
 49t 
 
 493 
 i))8 
 498 
 498 
 496 
 496 
 497 
 490 
 600 
 001 
 603 
 603 
 003 
 608 
 611 
 
TAT1LE OF <X)NTENT8. 
 
 Relation of ei.toppel to p^rtnerahlp'and agency 
 Division of the Bubject . . . . ^ 
 1 There most be a misrepresentation 
 
 (1) Defendant never was a partner 
 (8) Defendant is a retired partner '. 
 
 (a) Creditors who had prior dealings 
 
 (b) Creditors who had Jinowledge of membeil 
 
 •h»P 
 
 (0) Creditors who had neither dealings* nor 
 knowledge . 
 Name of firm 
 
 TT «i H*"*orio and Indicative names .* 
 
 n. Misrepresentation must be by the defendant 
 111. Misrepresentation must be to the plaintiff 
 Not to the world 
 
 May be indirect, if "suffered " 
 
 jxature or the representation 
 V. Election and estoppel 
 
 Liability in tort . ', ' ' ' 
 
 ZXlii 
 
 INDEX 
 
 613-S39 
 818 
 615 
 618 
 619 
 619 
 618 
 
 618 
 
 610 
 
 610 
 
 620 
 
 631 
 
 623 
 
 633 
 
 633 
 
 638 
 
 628 
 
 626 
 
 629 
 
 681-^648 
 
i I 
 
TABLE OF CASES CITED. 
 
 Abbott V. Rose, 448. 
 
 Ackerman v. Humphery, 320. 
 
 Adams v. Folly, 331. 
 
 Adamson. Ex parte, 18, 131, 147. 
 
 ^tna V. Franks, 43a 
 
 African Gold Co., Re, 140. 
 
 Agra & Masternian, Re, 126, 120, 877, 
 
 Agra Bank v. Barry, 260, 261, 27ft 
 Agricultural v. Federal, 113, 136. 
 Akins V. Kellogg, 72. 
 Alderson v. Maddison, 70, 71. 
 Alderson v. Pope, 525. 
 Alexander v. Campbell, 493. 
 Alexander v. Gibson, 490, 493, 493. 
 Alexander v. Harkins. 519. 
 Alexander v. McKenzie, 504 
 Allan V. Knight, 281. 
 Allan V. McTavish, 212, 
 Allcroft V. Bishop of London, 84 
 Allen V. Ayer, 449. 
 Allen V. Knight, 853, 283. 
 Allen V. Louis, 854. 
 Allen V. Shaw, 89. 
 Allen V. South Boston, 496. 
 Allis V. Billings, 433, 
 AUum V. Perry, 15a 
 American, eta v. American, 4i8 
 American, etc. v. Crowes, 417. 
 American, etc. v. Hammond, 78. 
 American, etc. v. Henderson, 331. 
 American, etc. v. Haddock, 511. 
 American, etc. v, Venner, 47. 
 Anderson v. Hubble, 26, 94. * 
 Andrews v. Lyons, 5, 157, 187, 
 Andrews v. Mockford, 127 104 
 Angle V. N. W. Mutual, 458. 
 Angus V. Clifford, 84, 324 
 Antem V. Crahan, 417. 
 Argentina, Thp, 828, 881. 
 Arlington v. Yatea, 875. 
 
 Armoiy v. Michigan, 40, 126, 278, 417 
 Armstrong v. Potter, 189, 52a 
 
 ^'""m m *'''*"' ^"''' **• "' "«' 
 
 Arnold v. Hart, 518. 
 Arthur v.^rton, 48a 
 Ashurst V. Ashurst, 26. 
 Ashwix V. Stanwix, sa 
 Atchison v. Brassfleld, 49, 487. 
 Atkins V. Payne, 188. Ss26. 
 Atkyns v. Kinnier. 53. 
 Atlanta v. Hunt, 207, 299. 802, 335, 
 857, 489. 
 
 Attorney-General v. Great Eastern, 
 
 Audenried v. Betteley, 214 
 
 Austin r. Bahn, 6ft 
 
 Austin V. Dye, 298. 
 
 Austin V. Great Western Ry. Ca, 
 
 Awde V. Dixon, 43ft 44a 
 
 B. 
 
 Babcock v. Lawson, 98, 181, 183. 
 
 Bacon v. Harris, 25. 
 
 Backhouse v. Charlton, 207, 266. 
 
 Badeley v. Consolidated, 25. 
 
 Bahia, Re, 83, 40, 108, 126, 141, 187 
 
 230, 235, 30ft 815, 817, 84a 
 Bailey v. Barnes, 251, 253, 85& 
 Bailey v. Bensley, 48ft 
 Bailey v. Seymour, 81, 145. 
 Baillio V. McKewan, 25a 260. 
 Baines v. Ewing, 490. 
 Baines v. Swainson, 96, 846, 855. 
 Baird v. Planque, 525. 
 
 Kq Irai. «. Z)>%M.._xx nTLn 
 — ^ "rtlUCll, UUJ. 
 
 Baker v. Nottingham, 6ia 
 Baker v. Seavey, 25. 
 Baker v. Taylor, 297. 
 
XXVI 
 
 TABLK OF CASES CITED. 
 
 Balkis V. Tomkinson, 40, 126, 187, 230, 
 
 815l 
 Baldly v. Bates, 493. 
 Baldwin v. Kingstone, 75. 
 Baltimore v. Wilkins, 511. 
 Bangor v. Robinson, 177, 847, 897, 461, 
 
 46a 
 Bank v. Dufflngton, 136. 
 Bank v. Fiathers, 20 
 Bank v. Keene, 149. 
 Bank v. Morgan, 188. 
 Bank v. Wentzell, 14a 
 Bank v. Whitney, 800. 
 Bank of Batavia v. New York Ry. 
 
 Ca, 80a 873, 603, 511. 
 Bank of England v. Vagliano,103,178, 
 
 18& 
 Bank of Green Bay v. Dearborn, 833. 
 Bank of Hamilton v. Oillies, 420. 
 Bank of Hamilton v. Harvey, 411. 
 Bank of Hamilton v. Imperial Bank, 
 
 4& 
 Bank of India v. Henderson, 820, 823, 
 
 881. 834. 
 Bank of Ireland v. Evans. 43, 44, 45, 
 
 63, lOa 109, 115, 116, 117, lia 
 Bankof Monongahela v. Weston, 519. 
 Bank of MontreaUv. Baker, 450. 
 Bank of Montreal v. Thomas, 417. 
 Bank of New York v. American Ca, 
 
 50a 
 Bank of Pittsburgh v. Neal, 448. 
 Bank of Toronto v. Cobourg, 411, 412, 
 460. 
 
 Bankof U. a v. Bank of Georgia, 
 
 133, 14a 
 Banks v. Everst, 477. 
 Banner, Ex parte, 849. 
 Barber v. Clark, 75. 
 Barber v. Myerstein, 831. 
 Barber v. Van Horn, 5ia 
 Barnard v. Campbell, 18!% 802,825, 
 
 839, 881. 
 Barrington, Re, 883. 
 Barry v. Croskey, 163, 16^ 165, 166, 
 
 167, 168, 169, 171, 175. 
 Barry v. Kirkland. 131. 
 Barry v. Wachosky, 88a 
 Bartlett v. Board, 451. 
 
 Bsrtlett V. Ravmnnd HO'i. 
 Barton v. London, etc Ca, 140. 
 
 Barwiok v. English, 237, 496, 49a 501, 
 
 606. 
 Batchelder v. Sanborn, 39. 
 Bates V. Swiger, 26. 
 Baxendale v. Bennett, 6, 12, 4a 48, 
 
 180, 879, 380, 440, 445, 457, 46a 
 Baxter v. Bradbury, 207. 
 Baxter v. Sherman, 513. 
 Bayley v. Manchester, 237, 49a 
 Bayliffe v. Butterworth, 489. 
 Beckerer v. Asher, 247. 
 Bechuanaland v. London, 65, 371, 880, 
 
 897, 409, 418. 
 Bedford v. Bagshaw, 128, 169. 
 Beauchamp v. Winn, 76, 7a 
 Beem v. Lookhart, 48ft 
 Bell ▼. Macklin, 8a 
 Bell V. Moss, 381. 
 Bellamy, Re, isa 
 Belmont v. Talbot. 494. 
 Benedict v. Cowden, 60. 
 Bennett v. Mattingly, 43a , 
 Benterick v. London, 4531 
 Berisford v. Milward, 384* 
 Berkling v. Watling, 881. 
 Berry v. W. D. Allan & Ca, 49a 
 Bickerton v. Walker, 19, 95, 129, 233, 
 
 4ia 
 Biddle Boggs v. Merced, 8a 
 Biggerstaff v. Rowatts. 49a 
 Biggs V. Evans, 34a 484. 
 Bilbee v. Lumley, 7a 
 Bill V. Richards, 284, 289. 
 Birch V. Steppler, 160. 
 Bishop v. Balkis, 17, 84a 
 Bissell's Ex'rs v. Warde, 189. 
 Black V. Christ Church, 30, 59. 
 Blackwood v. London, 25a 
 Blain v. Wait, 94. 
 Blake v. Belfast, 83a 
 Blakely, Re, 12a 377, 4ia 433. 
 Blaky v. Johnson, 60. 
 Blaisdell v. Leach, 43a 
 Bloomenthal v. Ford. 17, 74, 187, 200, 
 
 319. 
 Blyth V. Birmingham, 8a lOa 
 Boggs T. Hargrave, 7a 
 Bonzi V. Stewart, 854, 86a 86a 
 Booth V. Moffatt, 8a 6a 
 Bouiibee v. Gzowaki, 343. 
 Boulton V. Hamilton, 20a 207. 
 
TABLE OF 0A8E8 CITED. 
 
 "Bonlton y. Jones, 55a 
 Bourne v. Preeth, 518. 
 Bowen v. Evans. 150. 
 Bower v. Peate, 58. 
 Boyce v. Edwards, 417. 
 
 ^°T,; I;?'"'' ^^' ^^^' 2H296, 311. 
 oao, 853. 
 
 Brace^v. Duchess of Marlborough, 
 
 Bracewell v. Williamo, 71. 
 Bradley v. Luce, 26. 
 Bradley v. Rrrfies, 265. 
 Brady v. Todd, 49a 
 Braithwaite v. Power, 534 
 Braley v. Powers, 235. 
 Brandt v. Bowlby, 332. 
 Brant v. Virginia, 88, 96, 160. 
 Brayton v. Harding, 25. 
 Breokenridge v. Lewis, 863, 44& 
 Breeze v. Brooks, 35, 144. 
 Brigham Young v. Wagner. 86. 
 bridge V. Connecticut. 417. 
 Briggs V. Jones, 27a 
 British Mutual v. Charnwood, 496, 
 499, 500, 506. ' 
 
 Brocklesby v. Temperance, 244, 273 
 
 879,393.899,446. . 
 Brooke v. New York. 511. 
 Brooks V. Hassal, 493, 
 Broughton v. Hutt, 76. 
 Brown v. Equitable, 342. 417. 
 Brown v. Foster, 518, 585. 
 Brown v. Holland, 78. 
 Brown v. Leonard, 5R 
 Brown v. Pierce, 363. 
 Brown v. Powell, 508. 509. 
 Brown v. Probate, 453. 
 Brown v. Reed, 50, 60, 107. 
 Brown v, Sims, 124. 
 Brown v. Wilmerding. 363. 
 Bryant v. La Banque, 496, 605. 
 Bryant v. Moore, 478, 483, 494 
 Bryant v. Whitcher, 85. 
 Buchanan v. Young, 88. 
 Budd V; McLaughlin. 85. 
 Building, eta. Re, 496. 
 Billiard v. Bell, 376. 
 Bullitt V. Farrar, 385. 
 BurbridoTA v. Hfunn^..- jpp 
 
 xxvii 
 
 f Burk V. Clark. 689. 
 Burkenshaw v. Nicolls. 0, 15. 
 Burrowes v. Lock. 96, 103, 833, 884, 825. 
 
 Burrows v. Grover. 125. 584 
 Burrows v. Klemk, 60. 
 Burson v. Huntingdon, 48a 
 Burton v. Curyea, 824, 887. 
 Bush V. Brown, 43a 
 Bush V. Fry, 308. 
 Butler T. Maples, 474 
 
 o. 
 
 Burohfleld v. Moore. 879. 
 Burgess v. Seligman, 183. 
 
 Cady V. Owen, 26. 
 
 Cahn V. Pocketts. 333, 865. 
 
 Cairncross v. Lorimer, lU, isa 
 
 l-aldwell V. Accident, 189. 
 
 Calvert v. Baker, 879. 
 
 Cameron v. Cameron, 627. 
 
 Camp V. St. Louis, 26. 
 
 Campbell v. Edwards, 7a 
 Campbell v. Gemmell, 2& 
 Canadian P. Ry. v. Burnett, 201. 
 t^arnegie v. Morrison, 417. 
 Carpenter. Re, 201. 
 Carpenter v. Longan, 20. 
 Carr v. La Fevre, 412. 430 
 
 ^"lfl« t^r^^^' ^^^' ^^' »«4' ^«5. 
 166. 168, .39, 171. 172. 173. 175. 
 
 Carritt v. Real. 865. 266. 
 
 Carter v. Carter. 283. 
 
 Carter v. Palmer, 877. 
 
 Carter v. Whalley. 519. 
 
 Cartwright v. Wilmerding. 857, 405. 
 
 Case V. Bartlett. 36i 
 
 Cason V. Grant, 444 
 
 ^*' Ssi ^!f°^' ^' ^'"''"' 2' »' 281. 
 Castle V. Castle, 19. 
 Caswell V. Worth. 68. 
 Catholic Bishop V. Troup. 477. 
 Cator V. Burke, 409. 
 Caulkins v. Whisier. 464 
 
 '^*l9am''"'''^''''*'^''282. 
 
 Cave V. Mills, 139. 
 Cawthorn v. Lusk, 490. 
 Central Bank, Re, 407, 417. 
 Chadwick V. Manning. 68, 201. 
 
XXVIU 
 
 TABLE OF OASES OITED. 
 
 Champlain v. Layton, 78. 
 
 Chaplin v. Vermont, 412. 
 
 Cliapman v. Pingree. 20. 
 
 Chase Nat. Bank v. Faurot, 489. 
 
 Chatham v. Moffatt, 224. 
 
 Chew V. Burnet, 268, 275. 
 
 Chicago V. Troup, 482. 
 
 Chicago V. Werner, 72. 
 
 Chipman v. Tucker, 449. 
 
 Citizens v. Booze, 420. 
 
 Citizens v. First National, 68, 201. 
 
 Citizens v. Lepitre, 38, 62. 
 
 City Bank v. Barrlow, 398, 513. 
 
 City Bank v. Rome. 323. 
 
 Clark, Re, 148, 144, 216. 
 
 Clark V. Dillman, 94, 187. 
 
 Clark V. Eckroyd, 66, 14a 
 
 Clark V. Kirby, 20a 
 
 Clark V. National Bank, 187. 
 
 Clark ". Roberts, 264, 407. 
 
 Clarke r. Palmer, 105, 280, 287, 848. 
 
 Claxton V. Shibley, 27. 
 
 Cleveland v. Cleveland, 207, 275. 
 
 Cleveland v. Shoeman, 868. 
 
 Close v. Holmes, 360. 
 
 Coates V. London, 61. 
 
 Cochrane v. Nebeker, 107, 
 
 Cockrill V. Cockrill, 48a 
 
 Cocks V. Masterman, 148. 
 
 Coffey V. Coffey, 343. 
 
 Cohen v. Mitchell, 144. 
 
 Cole V. Northwestern, 808, 837, 857, 
 486,491,495,511. 
 
 Cole v. Pope, 73. 
 
 Coles V. Jones, 409. *' 
 
 Coles v. Pilkington, 71. 
 
 College V. Tuttle, 70. 
 
 Collier v. Miller, 48. 
 
 Colling, Re, 201. 
 
 Colling wood v. Berkeley, 96, 103. 
 
 Collins V. Archer, 151. 
 
 Collins V. Martin, 394, 461. 
 
 Collins V. Rosenbaum, SOOt 
 
 Colonial Bank v. Cady (and sub nora. 
 
 Williams v. Colonial Bank), 116, 
 
 288, 373, 843, 843, 844, 345, 873, 
 
 404, 408, 412, 418, 420. 440. 454. 
 
 Colonial Bank v. Hepworth, 253, 271, 
 
 842. 454 
 Colonial Bank v. Whinney, 810. 
 
 Columbia v. Cornell, 60, 317, 879, 458, 
 
 466. 
 Colyer v. Finch, ISO, 151, 305, 253, 
 
 262, 380. 
 Comer v. Cunningham, 398. 
 Commercial Bank, Re, 417. 
 Commercial Bank v. Colt, 846L 
 Commissioners v. Clark, 894. 
 Conard v. Atlantic, 83a 
 Concessions, Re, 17, 317, 840, 496. 
 Confederation v. Merchants, 66. 
 Conrad v. Fisher, 131. 
 Consort v. Deep Level Gold Mines 
 
 Co., Re, 485, 486. 
 Continental Bank v. National, 98, 
 
 183, 136, 144. 
 Cooke T. Eshelby, 140, 141, 513. 
 Cooke V. United States, 458. 
 Coolidge V. Payson, 417. 
 Coombs v. Chandler, 303, 407, 4081 
 Cooper V. Great Falls, 140. 
 Cooper V. Phibbs. 75, 76, 78L 
 Corbett v. Brown, 15, 35. 
 Cornish ▼. Abington, 15, 96, 103L 
 Corser v. Paul, 148. 
 Cory V. Eyre, 365. 
 Cottrell V. Carter, 398. 
 Couchman v. Maupin, 311. 
 Court V. Berlin, 535. 
 Coventry v. Great K Ry. Ca, 85, 40, 
 
 95, 114. 125, 178, 178, 816, 817, 609. 
 Covil v. Hill, 297. 
 Coward v. Hughes, 78. 
 Cowdry v. Vandenburgh, 896, 407, 
 
 416. 
 Cowgill V. Pettifish, 436. 
 Cox v. Bruce, 59a 
 Coxe V. Hardin, 833. 
 Craig V. Vicksburg, 894 
 Crane v. London, 404 
 Crocker v. Crocker, 841. 
 Cromwell v. Sao, 434 425. 
 Cross V. Currie, 439. 
 Grotty V. Hodges, 379. 
 Crouch V. Credit Foncier, 876, 410, 
 
 411,413,41a 
 Crowley v. Crowther, 406. 
 Crystal Lake v. Hill, 453l 
 Cudahy Co. v. Sioux, 417. 
 Cuming, Re, 201. 
 
 a 
 
TABLE OP CASES CITED. 
 
 Cummings v. Gilman, 863. 
 Curamings v. Powell. 439, 435 
 Cundy v. Lindsay, 302. 
 Curtis V. Wilcox, 85. 
 
 Dane ▼. Bank, 187. 
 Daniel v. Sinclair, 139. 
 Daugherfcy v. Yates, 158. 
 
 Davenport V. Homeyer, 381. 
 Davey's Appeal, 343. 
 David V. Park, 74, 137, 13a 
 
 David Stevenson v. Iba, 435. 
 
 Davis V. Allen, 534. 
 
 Davis V. Bank of England, 140, 195. 
 
 Davis V. Beckstein, 407. 
 
 Davis V. Best, 457. 
 
 Davis V. Bigler, 363. 
 
 Davis V. Bradley, 344 
 
 Davis V. Snyder, 86. 
 
 Dean v. Crall, 131. 
 
 Dean v. Driggs, 317, 319. 
 
 Dean v. King, 511. 
 
 Dean v. McCarty, 38, 63, 849. 
 
 De Berkom v. Smith, 135. 
 
 De Berry v. Wheeler, 8a 
 
 De Bussche v. Alt, 89. 
 
 De Lay v. Carney Bros., 84. 
 
 Degg V. Midland R Co., 28, 100. 
 
 Delafield v. Illinois, 413. 
 Denishorne v. Hock, 135. 
 Denton v. Great Northern, 877. 
 Derry v. Peek, 84, 85. 187, 834, 226. 
 
 888. 880, 231, 883, 835, 236u 
 Desbrow v. Wetherly, 370, 
 Devaynes v. Noble, 85, 108, 136. 
 Dezell v. Odell, 87. 
 Diamond v. Lawrence, 419l 
 Dickenson v. Vulpy, 125. 515, 534. 
 Dickerson v. Colgrove, 807. 
 Dickson v. Reuters, 84, 497. 
 Dickson v. Swansea, 431. 
 Dillaye v. Commercial Bank, 264^ 407 
 Dingle v. Hare, 489. 
 Directors of Central Ry. Ca v. Kisch, 
 187. 
 
 ^J^on. Ex^parte, 174, 242, 299, 490. 
 
 xxix 
 
 Dixon V. Mucklestone, 805, 262, 255, 
 889. 
 
 Dobell v. Stevens, 137. 
 
 Dodds v. Hills, 25a 
 
 Dodge V. Pope, 138. 
 
 Dolbeer v. Livingston, 462. 
 
 Dolman v. Orchard. 521. 
 
 Dominion Bank v. Blair, 431. 
 
 Dorwin v. Thompson, 43. 
 
 Dowle V. Saunders, 859, 263, 282. 
 
 Dows v. Greene. 177. 
 Dreher v. Connolly, 519. 
 Dunlap v. Lambert, 174 
 Dunlop V. Silver, 374, 887. 
 Dunston v. Paterson, 195. ' 
 Durrant^T, Ecclesiastical, 66. 
 Dyer v. Hargrave, 137. 
 Dyer v. Pearson, 336. 
 
 Diiun v. Beli, 30, 396. 
 Dixon V. Bovlll, 877. 
 
 Eaglesfield v. Londonderry. 76 87 
 102. ' ' 
 
 East India v. Hensley, 477. 
 East India v. Vincent, 89. 
 
 Easton v. London (and sub nom. 
 Sheffield v. London). 15, 877. 401 
 403, 411, 513. 
 
 Edgington v. Fitzmaurice, 68, 69, 146. 
 
 Edmonson v. Thompson, 530, 522. 
 
 Edmunds v. Bushell, 247. 
 
 Edwards v. Brown, 438, 431. 
 
 Egerton v. Earl Brownlow, 260. 
 
 Ehrler v. Braun, 182, 157. 
 
 Eldridge v. Railroad Co., 486. 
 
 Ellis V. Sohmoeck, 96, 108, 
 
 Ellis V. Wait, 422, 454. 
 
 Eimendorf v. Tejada, 43a 
 
 EIniira v. Harris, 585. 
 
 Emmerson v. Ind, 858. 
 
 Engstad v. Syverson, 43a 
 
 Ensley V. Lewis, 80a 
 
 Erb V. Great Western Ry. Ca. 181 
 308.509. v.a,ioi, 
 
 Espin V. Pemberton, 861, 879. 
 European Bank, Re, 484 
 Evans v. Bank of Ireland, 95. 
 Evans v. Bicknnll ? an aa ms .«» 
 
 201, 338, 828, 285, 884, 853, 878, 
 281. ^ 
 
XXX 
 
 TABLE OV OASES OITKD, 
 
 Evans v. Farstall, 138. 
 
 Evans v. Grey, 451. 
 
 Evans v, Hadfield. 521. 
 
 Evans v. Roanoke, 36a 
 
 Everett v. Hydraulic, 63. 
 
 Everts v. Agnes, 449L 
 
 Ewell V. Daggs, 43a 
 
 Exchange Bank v. People's Bank, 60, 
 
 604. 
 Eyre ▼. Burmester, 300. 
 
 F. 
 
 Fairweather v. Archball, 78, 
 Fall River v. Bufflnton, 19a 
 Faris v. Briscoe, 20. 
 Farmeloe v. Bain, 339. 
 Farmers v. Butchers, 504. 
 Farmers v. Norrich, 444. 
 Farmers v. Orr, isa 136. 
 Farrand v. Yorkshire Banking Co., 
 
 iOl, 282, 286, 288. 
 Farrant v. Barnes, 119. 
 Farrar v. Deflinne, 525. 
 Farrow v. Rees, 252. 
 Favill V. Roberts, 201, 20a 
 Fearing v. Clark. 439. 
 Featherstone v. McDonnell, 207. 
 Fenn v. Harrison, 477, 49a 
 Fenner v. Mears, 388. 
 Fifth Avenue Bank v. Forty-Second. 
 
 496. 
 Fine Art Society v. Union Bank, 51. 
 Finks V. B ich, 16. 
 Finlay v. Liverpool, 314 
 First Nat Bank v. Allen, 187. 
 First Nat Bank v. Bremer, 461. 
 First Nat Bank v. Cody, 18, 522. 
 First Nut Bank v. Compo, 439, 441, 
 
 442, 444. 
 First Nat Bank v. Dean, 319. 
 First Nat Bank v. First Nat Bank, 
 
 19, 20. 
 First Nat Bank v. Marshall, 125, 156. 
 First Nat Bank v. Security, 417. 
 First Nat Bank v. Zeims, 45a 
 First State Sav. Bank v. Webster, 
 
 444. 
 Fish v. Clelland, 74. 
 Fisher v. Meiien, 225. 
 Fisher v. Mossman, IS8. 
 
 Fitzherbert v. Mather, 177. 
 
 Flanagan v. Elliot, 26. 
 
 Fletcher v. Heath, 495. 
 
 Florida v. Hope, 166. 
 
 Ford, Ex parte, 143, 218. 
 
 Ford V. Auger, 464 
 
 Ford V. Fellows, 158. 
 
 Fordyce v. Kosminski, 60. 
 
 Forse v. Sovereign, 15a 
 
 Forsyth v. Day, 114, 138. 
 
 Foster v. Oreen, 406. 
 
 Foster v. McKinnon, 103, 371, 878, 489,. 
 
 435, 445. 
 Fountain v. Whelpley, 15a 
 Fourth Nat Bank v. American, 495.. 
 Fourth Nat Bank v. Compress, 94. 
 Fourth Nat Bank v. St Louis, 834. 
 Fox V. Clifton, la 52a 
 Frank v. Chemical, eta Bank, 187. 
 Frankel v. Wathen, 5ia 
 Franklin v. Lynch, 417. 
 Franklin v. Merida. 5. 
 Eraser, Re, 12U 615, 521. 
 Frazer v. Jones, 151. 
 Freeman v. Buckingham, 611. 
 Freeman v. Cooke, 34, 93, 94, 140, 188,. 
 
 170, 18a 22& 
 Freeny v. Hall, 157. 
 Frere v. Moore, 281. 
 Friedlander v. Texas, 177, 825, 848,. 
 
 40a 
 Frigg V. Read, 77. 
 Frith V. Cartland, 283. 
 Fuentes v. Montis, 358, 859, 495, 611.. 
 Furlong v. Carroll, 35. 
 Furnace Ca v. Moffatt, 225. 
 
 Gt. 
 
 Gabarron v. Kreef 1 297, 461. 
 Gage V. Rogers, 5ia 519. 
 Galvin v. Syfers, 439. 
 Gammill v. Johnson, 188. 
 Gardner v. Walsh, 879. 
 Garland v. Thompson, 334 
 Garland v. Towne, 63. 
 Garland v. Wells, 452. 
 Garnham v. Skipper, 25a 261, 279. 
 Garrard v. Lewis, 447. 
 Gaston v. Brandenbury, 88. 
 General Estates Ca, Re, 891, 423. 
 
TABUS OF 0ASf3 CITED. 
 
 XXXI 
 
 139. 
 
 105. 
 
 .58. 
 
 148,. 
 
 11.- 
 
 Oeneral Finance Co. v. Liberator, 
 General Horticultural, Re, 25. 
 General Provident, Re, 148. 
 George v. Cutting, 39. 
 Gerhard v. Bates, 69, 187. 
 Gerner v. Mosher, 834. 
 Gettysburg Bank v. Chisholm, 444. 
 Giannunne v. Fleetwood, 898. 
 Gibbons v. Wilson, 496. 
 Gibson v. Bank, 381. 
 Gibson v. Stevens, 388. 
 Gilbert v. Erie, 343. 
 Gilbert v. Richardson, 70. 
 Gillson V. North Grey, 38. 
 Girault v. A. P. Hotaling, 23. 
 Glassur v. Rolls, 834. 
 Glenn v. Gill, 815. 
 Glyn V. Baker. 410. 
 Glynn v. East & West India, 808. 
 Goetz. Jonas «fe Co., Re, 800, 36a 
 Goffey V. O'Reilly, isa 
 Gold Medal v. Lumbers, 884. 
 Goodall V. Middaugh, 285. 
 Goodenow v. Ewer, 78. 
 Goodman v. Eastman, 48, 60. 
 Goodman v. Siraonds, 448. 
 Goodtitle v. Morgan, 36, 105, 257, 276, 
 
 880. 
 Goodwin v. Robarts, 15, 75, 374, 888, 
 403, 407, 411, 413, 413, 433, 440, 455. 
 Gordon v. James, 133, 177. 
 Gordon v. Street, 51. 
 Gorgier v. Mieville, 385, 407, 410. 
 Gorham v. Gross, 63. 
 Gorman v. Davis, 535. 
 Gould V. Close, 409. 
 Gould V. Legee, 457. 
 Gould V. Wise, 458. 
 Grabill v. Bearden, 149. 
 Grabenheimer v. Rindskoflf, 815. 
 Graflf V. Logue, 439. 
 Graham v. Furber, 143, 801. 
 Graham v. Thompson, 35, 137, 138. 
 Grant v. McKee, 73. 
 Grant v. Nbrway, 808, 317, 508. 
 Grant v. Vaughan, im, 377, 385, 896, 
 Graves v. Horton, 470. 
 Graves v. Key, 8. 
 Gray v. Agnew, 852, 354 
 Gray v. Bank, 128. 
 Gray v. Harris, 63. 
 
 6. Gray v. McLennan, 89. 
 
 Great Northern Ry. Ca v. Harrison^ 
 
 68. 
 Green v. Wilkie, 486. 
 Gireene v. Smith, 106, 160. 
 Greenfield, Re, 436. 
 Greenfield v. Edwards, 452. 
 Greenfield v. Stowell, 43. '0. 
 Gregg V. Wells, 81, 93, 130. 
 Griffin v. Nichols, 86. 
 Griffith V. Brown, 160. 
 Griffith V. Wright, 160. 
 Grissler v. Powers. 193. 
 Gunn V. Bates, 189. 
 Gunn V. Bolckow, 308, 889. 
 Gurney v. Behrend, 324» 846, 881. 
 4Ca 
 
 H. 
 
 Hadcock v. Osmer, 884, 225, 
 
 Hager v. Buflfalo, 417. 
 
 Hahn v. Kenefich, 519. 
 
 Hale V. Milwaukee, 319. 
 
 Halifax v. Wheelwright, 43, 44, 185. 
 
 Hall V. West End, 888. 
 
 Hall V. Wilson, 457. 
 
 Hambleton v. Central, 146, 
 
 Hamlin v. Abell, 518. 
 
 Hannah v. Taylor, 185.* 
 Hanover v. American, 133. 
 Harding, Ex parte, 138. 
 Hardy v. Chesapeake, 106, 136, 187. 
 
 160. 
 Harkraeder v. Clayton, 449. 
 Harlem v. Mercantile. 149. 
 Harpham v. Shacklock, 153, 85a 
 Harris v. Brooks, 70. 
 Harris v. Truman, 209. 
 Harrison v. Cotgreave, 379. 
 Harrison v. Kansas, 489. 
 Hart V. Frontino, 191, 817. 
 Hart V. Mead, 453. 
 Hart V. SVvaine, 78. 
 Harvey v. Smith, 107. 
 Hatch V. Searls, 44a 
 Hatchett v. Gibson, 396. 
 Hatfield v. Phillips. 308, 866, 800. 
 
 ricirc-inuu r. rriticis, VV. 
 
 Hawken v. Bourne, 490. 
 Hayman, Ex parte, 814, 216, 620. 
 
xxxu 
 
 TABLE OF CASES CITED. 
 
 Hayner v. Churchill, 490. 
 
 Heald v. Fenely, 105. 484. 
 
 Heane v. Kogers, 4, 8, 140, 311, 218. 
 
 Heath v. Crealock, 151. 
 
 Heath v. Sansom, 519. 
 
 Heath v. Stoddard, 299, 857, 489. 
 
 Heaven v. Pender, 40. 
 
 Hedderly v. Backus, 297. 
 
 Hefner v. Palmer, 534. 
 
 Helly V. Matthews, 365k 
 
 Henderson v. Case, 435. 
 
 Henderson v. Comptoir, 808, 331. 
 
 Henderson v. Lacon, 137. 
 
 Henderson v. Williams. 95, 96, 177, 
 303, 304, 337, 832, 337, 438. 
 
 Henry v. Carson, 449. 
 
 Henty v. Miller, 40a 
 
 Herchmer v. Elliott, 103, 133, 481, 
 
 Hern v. Nichols, 610. 
 
 Herring v. Skaggs, 489. 
 Helting & Merton, Re, 13a 
 Hewitt V. Loosemore, 253, 261, 279. 
 Heyman v. Flewker, 355. 
 Hibblewhite v. McMorin, 484, 451. 
 Higgins V. Burton, 239. 
 Higgs V. Northern, 201, 483. 
 Hill V. Cumberland, 201. 
 Hill V. Epley, 86, 87, 89. 
 Hill V. Jewe^t, 497. 
 Hill V. Lewis, 877. 
 Hill V. Van Sandt, 25. 
 Hill V. Yurbrough, 436i 
 Hinckley v. Bank, 461. 
 Hiorns v. Holton, 438. 
 Hirsch v. Norton, 133. 
 Hirschfield v. London, 78. 
 Hirschtield v. Smith, 379. 
 Hirschman v. Budd, 379. 
 Hockley v. Bantock, 207, 250. 
 Hodgkinson, Ex parte, 528, 
 Hogarth v. Lbtham, 44a 
 Hoig V. Gordon, 170. 
 Hoffman v. Tuolumne, 63L 
 Holcoinb V. Boynton, 86. 
 Holland v. Anderson. 138. 
 Holland t. Swain, SOa 
 Hollins V. Fowler, 803. 
 Hollis V. Harris, 453. 
 Holman v. Herscher, 533L 
 Holmes v, German, 892» 
 Holmes v. Mather, 68. . 
 
 Holmes v. Trumper. 60. 
 
 Holt V. Schneider, 105. 491. . ' 
 
 Holton y. Sanson, 40, 123, 339, 808, * 
 816. 
 
 Hone V. Boyle, 842. 
 
 Hooper v. Gumm, 284 
 
 Hopkins v. Henisworth, 415i 
 
 Horn V. Baker, 834. ^ 
 
 Horn V. Cole. 6, 94. isa 
 
 Home V. Boyle, 408. 
 
 Hosegood V. Bull. 123. 
 
 Hosier v. Beard, 379. 
 
 Hostetter '. Alexander, 19. 
 
 Howard v. Baillie. 489. 
 
 Howard v. Hudson, 5, 86, 93, 183, 187. 
 
 Howard v. Sadler, 265. 
 
 Howard v. Sheward. 49a 
 
 Howard v. Tucker, 508. 
 
 Howland v. Woodruflf, 174. 
 
 Hubbard v. Tenbrook, 347. 
 
 Hubbersty v. Ward, 808, 60a 
 
 Huber v. Guggenheimer, 76, 81. 
 
 Hughes V. Percival, 59. 
 
 Hughes V. Twisden, 17, 145. 
 
 Humbleton v. Central, 141. 
 
 Hume V. Bolland, 139, 194. 
 
 Hunt V. Elmes, 205, 280. 
 
 Hunt V. Mississippi, 511. . 
 
 Hunt T. States, 45a 
 
 Hunter v. Walters, 86, 102, 108, 104 
 
 150, 179, 275, 276, 430, 483, 484 
 Hutchinson v. Calder, 81. 
 Hutchinson t. Gill, 129. 
 Hyde v. Casey-Grimshawe, 53a 
 
 I. 
 
 Ibbotsen v. Rhodes, 284 
 
 Ida, The, 8ia 
 
 Imperial Land Co., Re, 421, 423. 
 
 Ind V. Emerson, 151. 
 
 Indiana v. First Nat Bank, 147. 
 
 Ingals V. Ferguson, 25k 
 
 Ingham, Re, 205, 281. 
 
 Ingham v. Primrose, 23,-107, 878, 879 
 
 406, 457, 469, 483. 
 Inglis V. Robertson, Sia 
 Insurance Ca v. Eggleston, 73. 
 Insurance Co. v. Ma wry, 73. 
 Int-ernstional v. Bowen, 26, 188, 203; 
 
Ireland v. Livingstone, 489. 
 Irish Bank v. Gudlum, 125. 
 IrvinK Bank v. Wetherald, 149. 
 Iseminger v. Criswell, 2& 
 Isnard v. Torres, 60. 
 
 J. 
 
 Jackson v. Allen, 68, 193. 
 Jacobs V. Shorey. 515. 
 James v. James, 207, 25a 
 Jamison v. Miller, 131. 
 Janberry v. Britten, 353L 
 Jamie v. London, 136, 
 Jarmain v. Hopper, 503. 
 Jarvis V. Davis, 36a 
 Jenkyns v. Usborne, 320, 831 823 
 339, 365, 386. 373. 406. ' ' 
 
 Jessel v. Bath, 509. 
 Jewel V. Rock River, 453. 
 
 John ShillitoCav.McClung, 821 
 Johannessen v. Munroe. 417 
 
 *,"«Mr' "•• ^'- ■"• »«■ 
 Johnson v. Guliok, 228. 
 Johnson v. Hurley. 482. 
 Johnson v. Investment Ca. 491 
 Jones V. Clifford. 75. 
 Jones V. Derliok, 20. 415. 
 
 ^'''^m.''' *'°'''^' ^' ^' ^^^' ^^^' ^' 
 
 Jordan v. Picket. 285. 
 Jordan v. Provincial. 85. 
 Jordan v. Stevens, 78. 
 
 TABLE OF OA8E8 CITED. 
 
 zxxiii 
 
 Kinder v. Shaw, 854. . 
 
 King V. Box, 882. 
 
 King V. Doolittle, 75. 
 
 Kingman V. Graham. 25, 86. 168, 15& 
 
 Kingsford V. Merry, 96, 30a 
 
 Kingston Sav. Bank y. Bosserman. 
 
 Kinnear v. Markey. 281. 
 Kinney v. Whitou, 12a 
 Kirk V. Hamilton, 207. 
 Kirkwood V. First Nat. Bank, 417. 
 Kirkwood V. Smitli. 420. 
 Knights V. Wiffen, 147. 
 
 Knouff V. Thompson, 138. 
 Knoxville Bank v. Clark, 6a 
 Krause v. Busacker, 225. 
 Krause v. J^tly, 525. 
 Krothowhl V. Dawson, 69. 221. 
 Kunger v. Jo-st, 2a 18a 14a 
 
 L. 
 
 Kagel V. Totten, 44a 457. 
 Kalamazoo v. Clark, 436. 
 Keane v. Boycott, 48a 
 Keate v. PJWUips, 8, 201, 20.1. 204. 
 Keating v. Orme. 14, 68, 189. 
 Jvemp V. Falk, 184, 32a 
 Kennedy v. Green. 103. 43a 
 Kepp V. Wiggett. 14. 
 Kern v. Day, 25, 211. 
 Kettlewell v. Watson, 173, 278, 294. 
 Keyes v. Merrill, 7a 
 Keys V. Williams, 20r 25a 
 Kiefer v. Rogars, 188. 
 Kiersky v. Nichols, 15a 
 o 
 
 Laing v. Taylor, 73, 7a 
 Lake V. Argyll, 514, 5ia 
 Lamb v. Attenborough, 855. 
 Lanfear v. Summer. 86a 
 Lang V. Smyth, ^la 
 
 Langdon V. Doud. 6a 187, ISa 
 Lange. Ex parte. 48a 
 
 Lansdown v. Lansdown. 77. 
 
 Lart Wilkinson v. Blades, 19a 
 
 Lausatt v. Lippincott, 299, 854, 857 
 
 Uyard v. Maud, 8a 105, 179, 27a 281. 
 Laythoarp v. Bryant, 69. 
 Le Lievre v. Gould. 12a 224, 226 
 Leas V. Walls, 6a 107. 
 Leather y Morgan, 85, 18a 137, 48U 
 Leduc V. Ward, 80a 
 Ledwick V. McKim. 440, 457, 461. 
 Lee V. Bank. 417. 
 Lee V. Butler. 863. 
 Lee V. Taylor, 22a 
 Lee V. Zagury. 424 
 Lees V. Fisher. 207. 254 
 Leete v. State Bank, 85. 
 Legge v. Croker, 7a 
 Leggo V. Newbold. 6a 
 I Leonard v. Merritt. 45a 
 Lester v. Snyder, 105. 484. 
 I Lewenberg v. Hayes, 899. 857, 48ft 
 
XXXIV 
 
 TJiBLB OF CASES OITBD. 
 
 Lewer, Re, 16. , 
 Lewis V. Carstairs, 189. 
 Lewis V. Jones, 78. 
 Libel V. Craddock, 535. 
 Lickbarrow v. Mason. 7, 81, 177, 188, 
 
 184, 819, 320, 822, 325, 327, 328, 888, 
 
 847, 381, 334, 39a 
 Lightner's Appeal, 1821 
 Limpus V. London, 237. 498. 
 Lines v. Grange, 27. 
 Lingonner v. Ambler. 131. 
 Lloyd V. Attwood, 279. 
 Lioyds V. Bullock, 452. 
 Lloyds V. Jones, 86, 105, 179, 261,276, 
 
 280. 
 Loffus V. Maw, 71. 
 London Celluloid Co., Re, 6, 219. 
 London v. Bank of Liverpool, 148. 
 London v. Ooddard, 253. 
 London v. Simmons, 403, 495. 
 London v. Sutfield, 24, 133, 136. 
 London v. Wentworth, 178, 180, 371, 
 
 445. 
 Long Island ▼. Columbus, 439. 
 Losee v. Buchanan, 62, 
 Louisiana v. Laveille, 511. 
 Louisville v. Gray, -420. 
 Low V. Bouverie, 14, 15, 17,89,94, 111, 
 
 181, 187, 225, 227, 228. 
 Lowden v. National, 64. 
 Lowe V. Raleigh, 346, 468.. 
 Lucas V. Dorrien, 309. 
 Lynch v. Nurdin, 33, 62. 
 Lyon T. Morgan, 210. 
 Lyon V. Reed, 1. 
 Lyon V. Travellers, 721 
 Lysaght v. Edwards, 201. 
 Lythe v. Bank, 476. 
 Lyttle v. Cozard, 4S3. 
 
 ' M. 
 
 MacAleer v. Horsey, 80, 146. 
 MacKreth v. Symmons, 203. 
 McAdow V. Hassard, 144. 
 McArthur v. MaoDowell, 424. 
 McBeth V. Craddock, 84. 
 McCiuin V. Abshire, 25. 
 McCord V. Levi, 225. 
 McCorniick vt Bay Cit" 453, 
 MoCravey v. Kemson, 203. 
 
 McDiarmid v. Hughes, 26i 
 
 McDonald v. Muscatine, 448. 
 
 McDonald v. Weeks, 29a 
 
 McEwan v. Smith, 889. 
 
 McFarlane v. McHugh, SKk 
 
 MoGee v. Kane, 88, 96. 
 
 McKay v. Commercial Bank, 406, 506. 
 
 McKenzie v. British Linen, 22, 41,. 
 114. 136. 
 
 McKenzie v. Montreal, 802, 412, 422, 
 424. 
 
 McKowan v. Ferguson, 225. 
 
 Mclnnis v. Milton, 441, 459. 
 McLean v. Buffalo. 229, 5}16, 317. 
 McLean v, Clark, 125, :i7, 188, 615,. 
 
 o20, 522, 525. 
 McLean v. Fleming, E38. 
 McLenmore v. Rankin, blS. 
 McMahon v. Sloan, 398. 
 McManus v. Watkins, 133. 
 McMullen v. Williams, 490, 498, 495. 
 McNeil v. Tenth Nat Bank, 297, 843, 
 
 407, 408, 454, 468. 
 McNeilan'b Estate, 52a 
 Mack v. Piaug, 20. 
 Maddick v. Mai-sball, 96, 103, 514. 
 Maddison v. Alderson, 68. 
 Maguire v. Selden, 123. 
 Makins v. Piggott, 38, 621 
 Man v. State, 374 
 Mander v. Royal. 417. 
 Mangan v. Atterton, 62. 
 Mangles v. Dixon, 66, 90, 94, 186, 167,. 
 
 249, 418. 
 Manitoba v. Bank, 186. 
 Manley v. London, 19. 
 Manufacturers v. Hazard, 101, 167. 
 Market v. Sargent, 441, 443. 
 Markbam v. O'Connor, 138. 
 Marschall v. Aikin, 23, 523. 
 Marsh v. Falker, 225. 
 Marsh v. French, 475, 476. 
 Marshall v. Furgason, 225. 
 Marshall v. National Bank, 116, 841. 
 Marshall v. Nehvood, 62. 
 Marshall v. Pierce, 89. 
 Marston v. Allen, 871, 44Sr 
 Martin v. Bearman, 415. 
 Martin v. Banning, 450. 
 
 Martinez v. Cooper, 252L 
 
TABLE OF CASES CITED. 
 
 XXXV 
 
 Martini v. Coles, 851, 853, 853, 854. 
 
 Martyn v. Gray, 17, 135. 533, 533. 
 
 Mason v. Bicliie, 16, 29a 
 
 Mason v. Bradley, 87ft 
 
 Mason v. Friolc, 413. 
 
 Master v. Hill, 879. 
 
 Masters v. Miller, 878. 888. 
 
 Masury v. Arlcansas, 133, 343. 
 
 Mather v. Maidstone, 148. 
 
 Maxfleld v. Burton, 253. 
 
 Mayor v. Bank of England, 48, 49, 64, 
 
 05,95,108,116. 
 Meggy V. Imperial, 298, 48ft 
 Mercer v. Haokett. 413, 414. 
 Merchants v. Bank of England. See 
 
 Mayor v. Bank. 
 Merchants' Bank v. Good, 871, 489 
 
 441, 446. 
 Merchants' Bank v. Lucas, 68, 114 
 
 136, 147, 148. 
 Merchants' Bank v. McKay, 436. 
 Merchants' Bank r. Monteith, 81ft 
 Merchants' Bank v. Morrison, 253. 
 Merchants^ Bank v. Phoenix, 80ft 816, 
 
 317, 318, 33ft 843, 845. 
 Merchants' Bank v. State Bank, 504. 
 Meridian Nafe Bank v. M'Conica, 210. 
 Merriraao v. Illinois, 50a 
 Merrltt v. Williams, 51& 
 Metcalf V. Metcalf, 436. 
 Michigan v. I^hillips, 80ft 831, 828. 
 Midaugh v. Elliott, 87ft 
 Midland Ry. Co. V. Johnson, 73, 75, 76. 
 Miles V. Furber, 514, 518. 
 Miles V. Mcllwraith, 183» 
 Miller v. Minor. 488. 
 Miller v. Parker, 177, 89a 
 Miller v. Race, 885, 408. 
 Miller ▼. Rote. 86. 
 Milmo Nat Bank v. Carter, 528. 
 Mississippi v. Ottumwa, 157, 
 Mitchell r. Warner, 376. 
 Moakes v. Nicholson, 38a 
 MoUett V. Robinson, 48ft 
 Molson's Bank v. Brookville, 498. 
 Monk V. Whittenbury, 355. 
 Montagu, Ex parte, 148, 801. 
 • Montagu v. Forwood, 24a 
 
 _i!,ji,,„g„ T, xcraius, 00, i'^KJ, iiO, 
 
 Montaignao V. Sbitta, 50a 
 Montgomery v. Hardaway, 476, 48ft 
 
 Montgomery ▼. Keppel, WO. 
 
 Moore v. Albro, ISa 14a 
 
 Moore v. Bank, 407. 
 
 Moore v. Brownfleld. 88L 
 
 Moore v. Harper, 515. 
 
 Moore v. Kane, 265, 273. 
 
 Moore v. Metropolitan, 838, 278, 408. 
 
 416, 484. 
 Moore v. Moore, Oft 
 Moore v. Northwestern. 254 
 Moore v. Spiegel, 158, 16a 
 Moore v. Trimmer, 70. 
 Moores y. Citizens, 840, 407. 
 Moran ▼. Pitt, 49a 
 Moreland v. H. C. Frick, Sa 
 Morgan, Re, 8.54, 88a 
 Morgan y. Knight. 144. 
 Morgan v. Railroad Co., 6, 8ft 
 Morgan v. United States, 413^ 43^ 
 
 485. 
 Morris v. Preston, 48ft 
 Moss V. Hall, 6ft 
 Moss V. Hancock, 40ft 
 Mott V. Clark, 238, 48a 
 Mount Morris v. Lawson, 379, 
 Mowatt V. Castle, 817. 
 Moyce v. Newington, 181. 
 Mumford v. Stohwasser. 85a 
 Munroe v. Philadelphia, 333» dB4i 
 Munroe v. Pritchett, 825. 
 Murphy v. Barnard, ISa 
 Murray v. Eagle Bank, 504. 
 Murray v. Lardner, 894 
 Murray v. Lylburn, 42a 
 
 N6sh V. Frigate. 45a 
 
 Natal Investment Co, Re, 404, 481. 
 
 National v. Chicagc^ 511. 
 
 National v. Gray, 89ft 
 
 National ▼. Jackson, 104, 38ft 888. 4S0. 
 
 481. 
 National v. Texas, 48a 
 National v. Thomas 52a 
 National v. Wilson, 491. 
 Neal V. Robinson, 27. 
 Neal V. Williams, 80a 
 New Albany t. Meyers, 48a 
 New Brunswick v. Conybeare, 127, 
 
 15a 
 
XXXVl 
 
 TABLE OF CASES CITED. 
 
 New England v„ Brown, 454 
 
 New York v. Bailey, 63. 
 
 New York v. National, 504 
 
 New York v. Rothery, 8a 
 
 Newall V. C. P. R Ca, 29& 
 
 Newbold v. Wright, 2»7, 854 
 
 Newell V. Williaton, 182. 
 
 Newman v. King, 879. 
 
 Newman v. Newman, 105, 257, 261 
 28a 
 
 Newsome v. Coles, 520, 521. 
 
 Newson v. Thornton, 831. 
 Newton v. Newton, 151. 
 Nichols V. Peck, 156. 
 Nicholson v. Sedgwick, 417, 
 Niven v. Belknap, 18& 
 Nixon V. Brown, 34a 
 Nodle V. Hawthorne, 26. 
 Nofsinger v. Goldman, 125, 5221 
 Norquist v. Dalton, 5ia 524 
 Norris v. Morrison, 89. 
 North River Bank v. Aymar, 604 
 Northern Counties v. Whipp. 31, 98, 
 105, 160, 179, 253, 281, 288, 468, 
 49a 
 
 I 
 
 P. 
 
 o. 
 
 Oak Creek v. Helmer, 181. 
 Oberfelder v. Kavanagh, 810. 
 O'Connor v. Clark, 804 
 Odlin V. Gove, 189. 
 Ogilvie V. Jeaffreson, 103, 104> 429. 
 Ogilvie V. West Australia, 2a 
 Ogle V. Atkinson, 317. 
 Old Colony v. Dubuque, 6a 
 Oliver v. O. W. R Ca, 509, 
 Oliver v. Hinton, 260. 
 Olson V. Royern, 48a 
 Ontario Bank v. Gibson, 439. 
 Ontario Bank v. McTaggart, 23a 
 Onward v. Smithson, 14, 188, 224 876, 
 
 481, 433, 484 
 Oregon v. Forrest 48a 
 Ormond v. Holland, 80. 
 Orr V. Orr, 6a 
 Otis V. Gardner, 873, 84a 
 Ottos, Re, 187, 815, 816, 817, 840, 847. 
 Overend, Re, 424 49a 
 Owens V. Burgess, 38, 6& 
 
 Paisley r. Bannatyne, 474 
 Palacios v. Brasher, 453, 
 Parbury's Case. 14a 
 Parker v. Carolina, 261. 
 Parker v. Clarke, 19. 
 Parker v. Crittenden, 209, 311. 
 Parsons v. Krugor, 528. 
 Pasley v. Freeman, 64 223. 
 Partridge v. Bank of England, 417. 
 Patterson v. Hitchcock, 160. 
 Patterson v. Lytle, 87. 
 Patterson v. Tash, 854 49& 
 Peacock v. Rhodes, 877, 885, 894 
 Pearson v. Brown, 31, 22a 
 Pearsoll v. Chapin, 435. 
 Pease v. Gloahec, 96, 253, 30a 820, 82a 
 
 881, 84a 
 Peavy v. Seigler, 199. 
 Peck V. Gurney, 15, 127, 128, 104 22a 
 Peeriess v. Gates, 297. 
 Pence v. Arbuckle, 45a 
 Pennsylvania Ry. Ca's Appeal, 116, 
 
 128, 177, 84a 
 People V. Bank, 186, 86a 
 People's Bank v. Gridley, 18a 
 Perry v. Lawless, 6a 
 Perry-Herriok v. Attwood, 843, 845, 
 
 278, 379,' 89.3, 899. 
 Pertuit V. Damare, 2a 
 Peter v. Russell, 284 
 Petrie V. Guelph, 85. 
 Phelps V. Illinois Ry., la 
 Phillips V. Hunt, 38a 
 Phillips V. Huth, 856, 860. 
 Phillips V. Phillips, 151, 15a 
 Phoenix v. Gray, 477. 
 Pickard v. Sears, 8, 44 89, 93, 178, 820, 
 
 238, 284 289, 40a 
 Picker v. London, 4ia 
 Pickering v. Busk, 8, 9, 24a 899, 88a 
 85a 354, 857, 44a 47a 478, 486, 489. 
 491, 511. 
 Pickert v. Marston, 489t 
 Pipratt V. Young, 22a 
 Pierce v. Andrews, 15a 
 Pierce v. Horner, 133, 144 
 Pierson v. Dunlop, 417. 
 Piggott V. Stratton, 6a 
 
TABLE OF CASES CITED* 
 
 Piloher v. Rawlins. 25a 
 
 Pillans V. Mierop. 417. 
 
 Pitcher v. Dove, 86. 
 
 Pitkin V. Benfer. 52j. 
 
 Plumb V. Fluitt. 253, 261. 268, 279. 
 
 Plumer v. Lord, 157. 
 
 Poillon V. Secor, 514. 
 
 Polak V. Everett, 39, 63. 
 
 Pole V. Leask, 487. 
 
 ^""S 369^'^'''°"' ^''^' ^^^' ^^' 830. 
 
 Pollard V. Vinton, 808, 511. 
 Pooley V. Driver, 513, 
 Poison V. Degeer, 298. 
 Pott V. Eyton, 625. 
 Potter V. Faulkner, 88, 896. 
 Potts V. Temperance, 66, 91. 
 Powell V. Fall, 88. 
 
 ^""^f.'! I; Lo^^o". 153, 179, 253. 254. 
 271, 286, 288. 
 
 Powell V. Rogers, 86. 
 
 Powell V. Smith, 73, 7i 
 
 Powers V. Large, 25. 
 
 Pratt V. Drake, 134 
 
 Prentice v. Page, 303. 
 
 Preston v. Mann, 69, 138, 173 
 
 Proctor V. Bennis. 16, 26, 91, 140 
 
 Prole V. Soady. 68. 
 
 Proserpino, The, 316. 
 
 Provident v. Mercer, 412, 439. 
 Pryce v. Bury, 2:6. 
 Pullen v. Ready, 73. 
 Pulsford V. Richards, 80, 223. 
 Putnam v. Sullivan, 49. 
 Pyne V. Wilson, 365. 
 
 xxxvu 
 
 Quebec Bank v. Taggart, 126, 417. 
 Quinn v. Davis, 299. 
 Quirk V. Thomas, 803, 52a 
 
 R. 
 
 Railroad Ca v. Howard, 381. 
 Raleigh v. Lowe, 325. 848. 
 Ramozotti V. Bowring, 174, 243, 299. 
 Kamboll V. Soojumnull, 860. 
 
 ^T^!249;5?6 '"""' ^^' ^^' "^' ^^' ^' 
 fiashdall v. Ford, 7^ 70. 
 
 Rastrup V. Prendorgast, 2. 
 
 Ratcliffo V. Barnard, 263, 879. 
 
 Rathburn v. Snow, 490. 
 
 Raynell v. Sprye, 81. 
 
 Rector V. Board of Improvement, 62a 
 
 Redfern v. Ferrier, 425. 
 
 Redgrave v. Hurd, 137, 144, 
 Reed V. Ingham, 37a 
 Reese v. Bates, 489. 
 Reese v. Smith, 80, 87, 1021 
 Reid, Ex parte, 282. 
 Reid V. Coleman, 519. 
 Reg. V. Blenkensop, 139. 
 
 r!? ""' ^^"'^ood, 191, 230. 285, 287. 
 Reg. V. Chesley, 452, 455. 
 
 ^^*^296.1^r''""'"^' '^^' ''*^' ^^^' ^^• 
 
 Reg. V. Wilson, 5a 
 
 Reynell v. Lewis, 516. 
 
 Rice V. Rice, 251. 270, 281. 
 
 Richards, Re, 265, 282. 
 
 Richards V. Bank of Nova Scotia, 49a 
 
 Richards v. Jenkins. 19a 210 . 
 
 Richardson v. Richardson, 882L 
 Richardson v. Silvester, 124. 
 Richer v. Voyer, 417. 
 Ricketts v. Scothorn. 7a 
 Riggs V. Pursell, 129. 
 Rimel V. Hayes, 52A 
 Rives V. Michaels, 528. 
 Rizey y. James, 624. 
 Roach V. Karr, 48a 
 Robarts v. Tucker, 441. 
 P^^l^g^^-^^^^^^yl^auia, 65, 107, 189. 
 
 Robinson v. Cook, 2a 
 
 Robinson v. Floyd, 5ia 
 
 Robinson v. Jenkins, 3ia 
 
 Robinson v. Montgomeryshire, 218, 
 
 245.342.418,478,496,507. 
 Robinson v. Nail, 111. 
 
 Roberts v. Croft, 205, 283L 
 
 Roberts v. Trammel, 25. 
 
 Robertson v. Hay, 128. 
 
 Rockford V. Young M. c. Ass'n. 43a 
 
 Rodriguez v. Heflferman, 854 
 Rogers V. Backman, 298. 
 Rogers V. Robinson, 174. 
 
XXXVllI 
 
 TA^LB OF CASES CITED. 
 
 Romford, Re, 15, 75, IQi, 201, 431. 
 Rooper v. Harrison, 253, 256. 
 Root V. French, 25, 86. 182. 
 Roots V. Williamson, 153, 25a 
 Rose V. Douglas, 45a 
 Rose V. Watson, 201. 
 Royal Ina. Co. v. Byei* 80, 140. 
 Royal V. Turquand, 2ia 
 Rowland & Cranksbaw, Re, 818, 214. 
 Rutnball v. Metropolitan, 414. 
 . Rumensnydor v. Oans, 70. 
 Russell ^.ILangstaffe. 84i(, 871, 441,447. 
 Russell V. Wiggins, 417. 
 Rttt« V. Kehr, 20a 
 Ryan v. Bank of Montreal, 14& 
 Ryckman v. Canada Life, 19. 
 Rylands v. Fletcher, 62. 
 
 s. 
 
 Saderquist v. Federal Bank, 118. 
 
 Saderquist v. Ontario, 96. 
 
 Sage V. Shepherd, 297. 
 
 Salem v, Gloucester, 148. 
 
 Saltus V. Everett, 297, 888, 846, 894, 
 899. 
 
 Sanders v. McLean, 821. 
 
 Sandys v. Hodgson, 18. 
 
 Sanitary v. Cook, 140. 
 
 Sauce V. Exchange, 417. 
 
 Saunders v. Dehew, 86a 
 
 Scarf V. Jardlne, 41, 517, 618, 686, 68a 
 
 Schmidt v. Ittman, 597. 
 
 Soholfield V. Londesborough, 48, 4a 
 44. 46, 47, 48, 55, 57, 68, 107, 100, 
 117, 140, 185, 378, 441. 
 Schooner Freeman v. Buckingham, 
 
 808. 
 Schuchardt v. Aliens, 404. 
 Schultz V. Astley, 441, 447. 
 Schuster v. McKellar, 834. 
 Schuylkill v. Copley, 440, 457. 
 Sohway v. Bank, 186. 
 Sclauch T. O'Hare, 48a 
 Scollans v. Rollins, 109, 896. 
 Scotland v. O'Connell, 80. 
 Soott V. Bank, 114, 18ft 
 Scott V. Dixon, 127. 
 Scott V. Pilkington, 877. 
 
 Q«.._l_ a-i > ../. 
 
 '•veil tea r. ocipp, OU. 
 
 Second Nat. Bank v. Hewitt, 87a 
 
 Second Nat Bank v. Wallbridge, 96. 
 
 Sessions v. Rice, 158. 
 
 Seton V. Lafone, 120, 171, 178, 187, 198, 
 
 809, 317. 
 Sewell v. Burdick, 808, 831. 
 Seylar v. Carson. 435, 
 Sharp V. Foy, 205. 
 Sharpies v. Adams, 858. 
 Shaw V. Levy, 363. 
 Shaw V. Picton, 139. 
 Shaw V. Port Philip, 50, 62, 64, 95, 
 
 108, 237, 498, 499. 
 Shaw V. Railroad Ca, 825, 846, 848, 
 
 876, 378, 38a 46a 
 Sheffield v. London (and sub nom. 
 Easton v. London), 15, 377, 401, 
 40a 411, 512. 
 Sheffield v. Woodstock, 434. 
 Sheldon v. Hurtley, 377. 
 Sheldon v. Parker, 382. 
 Sheppard v. Union Bank, 96, 846. 
 Sherrod v. Langdon, 516. 
 Shields v. McClure, 131, 156L 
 Shorthard v. Sutton, 203. 
 Shott v. Streatfleld, 522, 53a 
 Shrewsbury v. Smith, 63. 
 Shroeder v. Young, 70. 
 Sibley v. Quinsigamon, 182. 
 Sioux V. First Nat Bank, 511. 
 Sioux v. Trust Ca, 2ia 
 Simm V. Anglo-American, 4, 6, 147, 
 
 187, 191, 327, 235, 836, 317. 
 Simmons v. Atkinson, 60. 
 Simmons v. London,239, 829, 878, 876, 
 
 877, 38a 411, 512. 
 Simpson v. Accidental, 66. 
 Showkegan v. Cutter, 1B2. 
 Skyring v. Greenwood, 189. 
 Slim V. Croucher, 22a 22a 
 Sliney v. Davis, 14a 
 Small V. Attwood, 140. / 
 Smith v. Chadwick, 137, 144. 
 Smith V. Orouette, 174, 243, 299. 
 Smith V. Hughes, 66, 91. 
 Smith V. Hull, 490. 
 Smith V. Kay, 69, 81, 145. 
 Smith V. Kendall, 382, 
 Smith V. Land & House, 144 i 
 Smith V. London. 100. 
 Smith V. Mercer, 14a 
 Smith V. MoGuire, 230. 
 
TABLE OF CASES CITED. 
 
 Smith V. Missouri, 811. 
 Smith V. Slavin, 194 
 Smith V. Smith, 71. 
 Smith V. Walkerville, 317, 490. 
 Smith V. Wegnellin, 412. 
 Smith V. Peoria, 451, 45a 
 Smith V. Roach, 157. 
 Smith V. Rogers, 348, 40a 
 Snell V. Insurance Co., 78, 79. 
 Soci6t6 V. Metropolitan, 43, 48, 49. 
 
 60, 4C7. 
 Soci6t6 V. Walker, 848. 
 Soltau V, Gerdau, 803, 304, 495. 
 Somers v. Brewer, 811, 484 
 Sornborger v. Sauford, 48a 
 South Essex, Re, 209, 218. 
 Southall V. Rigg, 7& 
 Southard v. Sutton, 70. 
 Southern v. Silva, la 
 Spear v. Travers, 888, 853, 385. 
 Spencer's Case, 378. 
 Spencer v. Clarke, 36, 105, 179, 270. 
 Spooner v. Browning, 475. 
 Spooner v. Cummings, 899,475. 
 Squire v. Whitton, 451. 
 St. Cesaire v. McF^rlane, 413. 
 St Louis V. Larned, 818. 
 Stables v. Eley, 529. 
 Stackhouse v. Jersey, 151. 
 Stanhope v. Verney, 203, 204 
 Stansfeld v. Cubits 13a 
 Stanton v. Estey, 131. 
 Starr v. Bennett, 74, 78. 
 Starr v. Newman, 123. 
 State V. Flathers, 418. 
 State V. Dean, 451. 
 State V. Hastings, 895. 
 State V. Peck, 451. 
 State V. Pepper, 451. 
 State V. Potter, 453. 
 State V. Matthews, 49, 487. 
 Staton V. Bryant, 86. 
 Stephens v. Baird, & 
 Stephens v. Barfoot, 29a 
 Stephens v. Dennett, 39, 8a 
 Stephens v. Head, 26. 
 Stevens v. Dermett, 7, 39, 86. 
 Stevens v. Irwin, 888. 
 Stevens v. Ludium, 12a 
 Stevens v. Wilson, 80a 
 Stewart v. Brown, 535. 
 
 xsxix 
 
 5a 
 
 Stewart v. Kennedy, 7a 
 Stewart v. Rounds, 182, 475. 
 Stewart v. Stewart, 7a 
 Stiff V. Ashton, 88. 
 Stinson v. Whitney, 517. 
 Stoddard v. Chambers, 207. 
 Stoessing v. Southeastern, 441. 
 Stollenwerck v. Thatcher, 88a 
 Stone V. Denny, 225. 
 Stone V. Engstran, 37. 
 Stone V. Georgia, 199, 
 Storer v. Keith, 458. 
 Strand v. GriflSth, 137. 
 Strauss v. United Tel. Ca, 418. 
 Strecker v. Conn, 617, 535. 
 Stronge v. Hawkes, 284. 
 Studdarjd v. Lemmond, 2& 
 Sullivan V. Colly, 86, 16a 
 Summers v. Heard, 52a 
 Sunderlin v. Struthers, 811. 
 Sutton V. Tatham, 44a 47a 48a 
 Swamell v. Watson, 436. 
 Swan, Ex parte, 44, lOa 109, 841. 847 
 
 897.447,450,46a 
 Swan V. N. R A., la 88, 86. 48, 4i 47. 
 49, 104, 108, 109, 110. 117, 120, 129. 
 m 183, 184, 341, 847. 370, 373. 897. 
 488. 445. 447. 449, 450, 452, 459, 46a 
 Swaisland v. Davidson, 60. 107. 
 [ Swigert v. Aspden. 61ft 
 Swinbanks, Re. 13a 
 Swinney v. Edwards, 37ft 
 Swire v. Francis, 50a 
 Swift v. Winterbothara. 134 12B 
 156.508. ' ' 
 
 Sylvester v. Henrioh, 25, 
 
 T. 
 
 Tailby v. Official Receiver, 801. 
 Tapham v. Curtis, Oa 
 I Tapp V. Lee, 15, 25. 
 Tapscott V, Williams, 87a 
 Tasker v. Small, 201. 
 Taunton v. Royal, 49ft 
 Tayler v. Great Eastern, 177. 
 Taylor v. Ely, 8ft 
 
 Tjivlnr w n»-^j Ann 
 
 — .• ••timiucr, 3UO. 
 
 Taylor v. Great Indian, 45i 
 Taylor v. Kymer. 856. 
 Taylor v. Medham, 96. 
 
xi 
 
 TABLE OF OASES CITED. 
 
 Taylor v. Pope, 399. 302, 357. 489. 
 Taylor r. Russell„2o3, 262, 263, 285. 
 Taylor v. Stray, 489. 
 Taylor v. Truman, 356. 
 Telegraph Co. v. Davenport, 141. 
 Texira v. Evans, 451. 
 Third Nat Bank v. Merchants, 149. 
 Tiiird Nat Bank v. Spring, 420. 
 Thistle V. Buford, 197. 
 Thomas v. Brown, 15. 
 Thomas v. Grise, 146. 
 Thompson v. Dominy, 820. 
 Thompson v. First Nat Bank, 524 
 Thompson v. Perrine, 376. 
 Thompson v. Shelton, 105, 491. 
 Thomson v. Clydesdale, 406. 
 Thorman v. Burt, 609. 
 Thorne v. Heard, 496. 
 Thornton v. McDonald, 523. 
 Thoroughgood's Case, 104. 42a 
 Thorpe v. Houldsworth. 105, 276, 286. 
 Tillotson v. Mitchell, 156. 
 Timpson v. Allen, 177, 48a 
 Tinson v. Francis, 423, 
 Tobin V. Allen. 13a 
 Tobin V. Manhattan, 461. 
 Todd V. Coshell, 63. 
 
 Tomkinson v. Balkis, 0, 17, 224, 817. 
 
 840. 
 Torrance v. Bolton, 26a 
 Tower v. Hoslam, 131. I 
 
 Towie V. Leavitt. 299, 478, 489, 6ia 
 Tracy v. Lincoln, 158. 
 Traill v. Baring, 81. 145. 
 Trenton v. Duncan, 25, 2a 
 Trevivian v. Lawrence, 207. 
 Trimble v. Bank, 141, 340. 
 Tripp V. Martin, 513. 
 Trougton v. Gitley, 143, 259. 
 Tryon v. Whitmarsh. 225. 
 Trust & Loan Co. v. Hamilton, 897 
 Tru^t & Loan Co. v. Ruttan, 20a 
 Trustees v. Smith, 8a Oa 
 Trustees v. Wheeler, 177. ^ 
 
 Turner v. Francis, 84. 
 Two Rivers Co. v. Day, 188, 15a 
 
 Union v. Laird, 133. 
 
 Union v. Mersey, 45, 4a 63. 55, 110. 
 
 Union v. Southern California, 496. 
 
 Union v. Wilmot, 19a 
 
 Upton V. Tribilcock, 74, 78. 
 
 Utica V. Mersereau, 207. 
 
 Utterson v. Rennie, 153, 
 
 Y. 
 
 Vagliano v. Bank of England, 43, 96. 
 
 Vallett V. Parker, 439. 
 
 Van Dusen v. Jungleblut, 299, 489. 
 
 Van Duzen v. Howe, 53, 57, 441, 448. 
 
 Van Hasselt v. Sack, 139. 
 
 Van West v. First Nat Bank, 141, 149^ 
 
 Vance v. Lowther, 87a 
 
 Vaughan v. Menlove, 3a Sa 
 
 Vaughan v. Taff Vale Ry. Co.,8a 99. 
 
 Venables v. Baring, 38a 397, 4ia412 
 
 422, 46a 
 Vermilyea v. Canniff, 7a 
 Vernon, Re, 282. 
 Vice V. Anson, 125. 
 Vickers v. Hertz, 303, 337. 
 Viele V. Judson, 83, 89, ISa 
 Vilmont v. Bently, 181. 
 Vineberg v. Anderson, 174, 399, 
 Voriey v. Cooke, 103. 439, 433. 
 Vulcan V. Rapid City, 89a 
 Vulliamy v. Noble, 533. 
 
 . tr. 
 
 Udell V. Atherton, 4931 
 TJniva V. Kent, 4.8, •'Sv'. 
 
 Wachsman v. Columbia Bank, 136. 
 
 Wachussett v. Sioux City, 35, 148* 
 30a 
 
 Waldron v. Sloper, 101, 105, 178, 283. 
 
 Walker v. Hyman, 14a 304. 
 
 Waller v. Missouri, 131. 
 
 Wallerick v. Smith, 15a 
 
 Walls V. Ritter, 131. 
 
 Walsh V. Hunt 6a 167. 
 Walters v. Tielkmeyer, 461. 
 Warden v. Greer, Sift 
 Wariow V. Harrison, 877. 
 Warner v. Martin, 495. 
 Warner v. Watson, 35. 
 Warrington v. Early, 87a 
 Waterhousa v. n&nir «f t.„i.._ j «.«. 
 408. ' " *""»""> oiSf 
 
TABLB OF CASES CITED. 
 
 zli 
 
 Watkins, Ex parte, 800, 863. 
 Watson V. Jones, 84, 224 
 Watson V. Russell, 459. 
 Watson V. Threlkeld, 27. 
 Watteau v. Fenwick, 246, 247. 
 Waugh V. Carver, 125. 
 Weaver v. Harden. 341. 
 Webb V. Corbin, 436. 
 Webb V. Heme Bay, 19, 414, 42a 
 Webster v. Peck, 363. 
 Webster v. Webster, 533. 
 Weeks v. Palmer Bank, 139. 
 Wegner v. Second Ward, 461. 
 Weidman v. Symea, 60. 
 Weinstein v. National Bank, 187. 
 Weir V. Bell, 237, 498. 
 Welland v. Hathaway, 8, 196. 
 Werrich v. Mahoning Co. Bank, 407. 
 West V. Jones, 19, 24, 94, 103, 157,281. 
 West V. Maclnnes, 424 
 West Chicago v. Morrison, 272. 
 Westbrooke v. Gurdereau, 158. 
 Western v. Addle, 127. 
 Western v. Page, 489. 
 Western v. Wagner, 824 887. 
 Wheal Unity Co., Re, 209. 
 Wheeler v. Benton, 476. 
 Wheeler v. Guild, 466. 
 Wheeler v. McGuire, 489. 
 Wheeler v. Smith, 78. 
 White V. Ashton, 68. 
 White v. Continental Nat Bank, 149. 
 White V. Grunish, 195. 
 White v. Sage, 84 
 White V. Southend Hotel Ca, 801. 
 White V. Vermont, 413. 
 White V. Walker, 69, 70. 
 Whitehead v. Tuckett, 474 
 Whitemore v. Niokerson, 448. 
 Whiteside v. First Nat Bank. 880 
 397, 4121 ' 
 
 Whitney v. Snyder, 440. 
 Whyte V. Heyman, 383, 
 Wichita v. Atchison, 817, 811. 
 Wiechers v. Central Trust Ca, 186 
 Wigle v. Williams, 619. 
 Wilding V. Sanderson, 7a 
 Wilkinson v. Johnson, 148. 
 W^ilkjnson v, 1^*— c "*'■ 
 Willoughby V. wTlIoughby, 25a 
 Williams v. Barton, 886. 
 
 I Williams v. Carwardine, 377. 
 Williams v. Colonial Bank (and sub 
 nom. Colonial Bank v. Cady), 116 
 238, 273, 842, 843, 844 345, 873! 
 404 413, 418, 430, 440, 454 
 Williams v. Donnelly, 425. 
 Williams v. Given, 311, 434 
 Williams v. Keats, 521. 
 Williams v. Lambe, 151. 
 Williams v. Stern, 71. 
 Williams v. Wilmington, 511. 
 Willmott v. Barber, 83, 89, 90. 93. 11! 
 
 137. 
 Win V. Bell, 261. 
 Winch v. Keeley, 889. 
 Winslow V. Leonard, 363L 
 Winter v. Belmont, 347, 46a 
 Witzler v. eollins, 511. 
 Wood V. Argyll, 514 516. 
 Wood V. Seely, 231. 
 Wood V. Rowel iflfe, 355. 
 Woodhull v. Rosenthall, 2a 
 Woodworth v. Bank, 374 
 Wookey v. Pole, 347, 385, 89a 
 Worrallv.Gheen, 43,4a 
 Wortham v. Curley, 231. 
 Worthington v. Morgan. 261, 379. 
 Wortley v. Birkhead, 26a 
 Waters' Appeal, 143. 209, 811. 
 Wright's Appeal, 14a 
 Wright v. Campbell, 364 
 Wright V. Fonda, 526. 
 Wright V. Hazen, 19a 
 Wright V. Solomon, 369. 
 Wright V. Snow, 97. 
 Wynne v. Mason, isa 
 
 y. 
 
 Yocum V. Smith, 60. 
 Young V. Brewster, 347, 461, 46a 
 Young v. Grote, 84 48, 4^ 44, 45, 107. 
 117. lia 457, 46a ' 
 
 Young V. Hope, 142, 801. 
 Young V. MaoNider, 241, 898, 407, 424 
 Young V. Ward, 213. 
 
 Zimmerman v. Rote, 80, 60, 107, 460 
 Zuchtman v. Roberts, 4, 86, 169, 29a 
 
ABBREVIATIONS USED IN THIS VOLUME. 
 
 A. a (189J, A. C). . . Law Repoite, Appeal Cases of 1891. 
 
 ti Adolphus & Ellis- Reports. 
 
 *' Alabama — Reports. 
 
 ^'"°' Ambler -Reports. 
 
 ^°*'' • Anstruther - Reports. 
 
 Yu ^"^ Reports, Appeal Casea, 
 
 ■7'^ Arkansas — Reports. 
 
 "Jr, • Atkyns- Reports 
 
 t ' ::' Atlantic Reporter. 
 
 „ * f '"* Barnewall & Alderson ^ Reporta . 
 
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 T^,t^^ «a«o°'« Abridgment 
 
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 P harbour (New York) -Reporta 
 
 Jf*^ Beavan— Reporta 
 
 R-°*" M ' ^' Bingham - Reporta 
 
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 tlii'u Brown's Chancery -Reporta 
 
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 p J" • • • • ; Common Bench - Reporta 
 
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 p ^' ^ Circuit Court Appeals - Reporta 
 
 i; p J; Crompton & Jervis - Reporta 
 
 p ^" f: ^^ Reports, Common Pleas Division. 
 
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 ^«^*E Cabab6& Ellis -Reporta 
 
 5^*' * California — Reporta 
 
 C«°*- ^^e- Century Digest. 
 
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 prr' • i*^ Reporta Chancery Division - Reporta. 
 
 ^'- * f • Clark & Finnelly - Reporta ^ 
 
 '^ "'' Coke on Littleton. 
 
XllV ABBREVIATIONS USED IN THIS VOLUMIB. 
 
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 „ " i • Hurlstone & Coltman - Report* 
 
 „ 77,' Hurlstone &Nomian- Report* 
 
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 HZni; ■ ■ * • S*"^"** ^^"'^^ ^^^^^^ - Report* 
 
 2r Humphrey (Tennessee) -Report* 
 
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 : •; Illinois — Report* 
 
 J"„ Pf Illinois Appeal-Report* 
 
 J^P- ^^ Imperial Statute. 
 
 :"?•• ' Indiana -Report* 
 
 jI^^P Indiana Appeal-Report* 
 
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 tf^ Jacobs Walker-Report* " 
 
 i*° Jacob-Report* 
 
 7^°- Johnson -Report* 
 
 ZZl' ni ^°?"««° <.N«- York)- Report* 
 
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 ""•• Kansas — Report* 
 
ABBREVIATIONS USED IN THIS VOLUME., 
 
 xlv 
 
 . 1^ 
 
 sporta 
 
 L. J. N.S.. 
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 ^*y * J- Kay & Johnson - Reports. 
 
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 r" ^' *^* • Lower Canada Journal. 
 
 ^* •'• Law Journal. 
 
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 r" ^" ^ ^* Law Journal, Common Pleas — Reports. 
 
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 Law Journal, New Series. 
 
 .... Law Journal, Old Series 
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 Law Journal, Queen's Bench — Reporta 
 
 .... Law Reports. 
 
 ^ ^ ^'■" Law Reports, Ireland. 
 
 ^ T. Law Times. 
 
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 ^ ■^°°' Louisiana Annual — Reports. 
 
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 ^- * W xMeeson & Welsby — Reports. 
 
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 **i°'> ^fichigan- Reporta 
 
 ^|"o Minnesota— Reporta 
 
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 ^'^ Mississippi — Reporta 
 
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 ^°' -^PP Missouri Appeal — Reporta 
 
 Ma App. R Missouri Appeal Reporter. 
 
 Moo- * M Moody & Malkin —Reporta 
 
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 Moa Ind. App Moore's India Appeals — Reporta 
 
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 Mos ..,,, Moseley — Reporta 
 
 My- & CS. Mylne & Craig— Reporta 
 
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 ^- * P Neville & Perry — Reporta 
 
 ^' North Carolina — Reporta 
 
Xlvl ABBREVIATIONS USED IN THIS VOLUME. 
 
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 N- W. R North Western Reporter. 
 
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 Ohio C. C Ohio Circuit Court — Reporta 
 
 Ohio CD Ohio Condensed Cases— Reporta 
 
 0"t- Ontario— Reporta 
 
 Ont. App Ontario Appeal — Reporta 
 
 Of^K- Oregon — Reporta 
 
 P' 0. ... Privy Council. 
 
 ^" ^* Law Reports. Probate Division. 
 
 P- Wma Peere Williams — Reporta 
 
 ^^ Peunyylvania ~ Reporta 
 
 PaO'R Paciflo Reporter. 
 
 Pa'Ke Paige (New York) — Reporta 
 
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 Q. B. (1891, Q. R). . . Law Reports, Queen's Bench Division, 189k 
 
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 ^ C. Supreme Court 
 
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 Ta™"- Tamlyn — Reporta 
 
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ABBKEVIATION8 USED IN THIS VOLUME. 
 
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 ^- * ^ Turner & Russell —Reports. 
 
 ^y^J Tyrwhitt- Reports. 
 
 !^' ^* ^* ^ Upper Canada, Common Pleas— Reports. . 
 
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 ^•^*-* West Virginia — Reporta 
 
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 "^ash. R. P Washburn's Real Property. 
 
 "^«°<1 Wendell (New York) - Reporta 
 
 ^l'^** Wheaton (United States) — Reporta 
 
 ^'* Wisconsin — Reporta 
 
 ^' * C Younge & CoUyer — Reporta 
 
 ^'&C.C, Younge & Collyer's Chancery Casea 
 
 ^- * '^' Younge & Jervis — Reporta 
 
 ^°^ Younge— Reporta 
 
 xlvii 
 
THE LAW OF ESTOPPEL 
 
 »T 
 
 MISEEPRESENTATION. 
 
 CHAPTER I. 
 
 INTEODCCTIOK -' 
 
 ,S^'L^''^\^"^^. '""PP"' '"'" (1) Estoppel bv record- 
 (2) Estoppel by writing (or doedV and mv,, ■ ."'< 
 
 (Estoppel by matter in The oonntry) wil™ h'^'"' '" ^"'^ 
 
 divisions to-day, but the third ci/L ^^ la "e ^haTIdl'" 
 
 by acceptance of an estate as E i^ Vi}^^' ^^ acceptance of rent and 
 
 t'^nr.°l^'"'«'°° makethr/peSl o"bse^rvaS *»;.*', ^>"'eton pStteTht 
 
 topped by „,atter in the countrV w/tbourany wri .^^^^^ ™*" «'''»" "e esl 
 
 Such estoppels are now said to be obsolete"' buf thof • . 
 
 only be said that "acceptance of rent" ! ™^^"°* 
 
 familiar to us but that thrn ? , ^' ^" ^'^^PP«^ ^« still 
 lies all of CdCo^T^^^^ "' ''''^^'' ^^"^'^^ ""^er- 
 
 .ct as 3=n:Ji;S&^S^. JS-J^^Ja.^^^ to treat, 
 
 yeuh:';^r:fir/n:s::tt etr%.r^ ^- '- ^"'-^^^ to 
 
 pel by record and estop^l by deed" m' '"'r ^' °*'^" *^° «»*e«oriea 
 
 from all the heterogeneous cal' IFPf L'«- "Sa (a). And see Lyon 
 
 Which are not these!^" TZ r" T' S^?ii«^*>' ^« ^- * W. 309; i J ^ 
 
 iniended to cover cases of estoppd "'arXVji r. 
 
 by misrepresentations; and such bLh ° ?*°PP"'' ^^ ^ 
 
 cases have only b«en assigned to ^t * °° ^'*°PP^' ^^"» ^'J")' «5. 
 
I 
 
 '\ ' 
 
 * INTRODUCTION. 
 
 At the present day a vendor, if by his deed he have assumed 
 to convey an estate in fee, is estopped from asserting other, 
 wise. In Lord Coke's time the deed would have had the same 
 effect; and, if the conveyance had been by parol, accompanied 
 by livery of seizin, there would have been the same estoppel 
 Estoppel -'by liverie," therefore, is clearlv within the class es- 
 toppel by contract, as described by Mr. Bigelow. The other 
 three instances mentioned by Lord Coke proceed upon identical 
 principles. 
 
 Estoppel in pais, then, or rather the principle connoted by 
 that expression, is far from obsolete. The estoppel of a bailee 
 to deny the bailor's title; the estoppel of an acceptor of a bill 
 to deny the signature of the drawer; the estoppel of a tenant 
 to deny the estate of the landlord; and scores of other cases 
 depend upon it. 
 
 There has been a still more remarkable inclusion under the 
 title estoppel in pais; one wholly unknown in Lo.-d Coke's 
 time, namely, estoppel by misrepresentation. Estoppel of this 
 sort does not in any way depend upon contract, and cannot 
 claim sufficient kinship with Lord Coke's four instances to 
 merit inclusion with them in his class "Estoppel in Pais^> 
 JNevertheless,/awfe de mieux, there it has gone. 
 
 Subdivisions of Estoppel is Pais. 
 
 Mr. Bigelow, the principal text writer upon the subject of 
 es oppel, retaining the phrase "estoppel inpais," subdivides it 
 mfe^ (1) estoppel by contract; ana (2) estoppel by conduct.* 
 Estoppel by conduct he subdivides into: (1) estoppel by mis- 
 b7wTer''''°" ^'^ ''''^^'^ ^^ negligence; 3 and (3) esloppel 
 
 The present work does not treat of estoppel by record; nor 
 
 of es oppel by deed; nor yet of estoppel bv contract. Of es- 
 
 toppel by negligence, apart from misrepresentation and as an 
 
 nstance of it, it denies the existence.' And estoppels by 
 
 waiver are dismissed with Mr. Bigelow's remark that 
 
 call theK?p5°el?'""''' '' "'^""°«' ""''' t^ao giving a new name to 
 
 » Biffelow on Estoppel (5th ei), 2o, 
 453, 459, 556. 
 ■T I, p. 556. 
 
 <Id., p. 600. 
 « Seech. IX. 
 • oigei 
 
INTRODrOTlON. ^ 
 
 a subdivision of estoppel by coJnTt„T°^'^. '^" """ 
 of the subject, the ell (.^oppe^b; conduct is"n " ""!!"" 
 the sab-class (estoppel by misrep-esenftr;'. T""*"" """ 
 the re^ubdivision™, the "ulZ e" to' " V ' '"°"""'"'» 
 tion) into »isrep,^ntatio„ bvT„t,^LJ™^''""■''"• 
 tionbycondaeti thus reproduo"in7itooMl h^ m'Sfepresenta- 
 second analysis of itself."^ It Zfd be Setter toT."' '" ""' 
 pel in i^U into estoppel by eontralt .nH , , , u""* "'""P" 
 resenlation. Both of thesT then^ t '"'"'' ^^ "''"P- 
 vided (if thought advVsabI?H„^!.ir^. <>« fespeotively subdi. 
 ^^\ k 1 ^ auvisaoie) into contract and misreDresflnfntmn 
 
 (1) by language, and (2) by conduct "^''Representation 
 
 negligence -is defective (1) because it ^,17^^' ^ 
 
 main division into c^c^n^rZll a *° recognise this 
 
 -hich "staZent" is biuh? ™^«.^«P^^««"t«tion, in both of 
 
 duct" is implT andr2VL.^'''''°°'''^"'"^^^^"b>'<'«"- 
 lo«r fK. .1 ' ^ ^ because, concurring vith Mr RiVp 
 
 » unable rrCr^""""''""""'""- He is, however! 
 does no, try to do ^f ^ ^""' "" '°^'""'=« »' "-i-'ee.! 
 
 has been n^e by ^.me third n» t'^" '"'-«P'*«»"'atio„ 
 
 much service. *^' P*"'*'" ^^" ^« f°"°d to be of 
 
 T J ^ , Definition. 
 
 Lord Coke tells us that 
 
 oTtee'StS--^^^^^^^^^^ 
 
 ^For misrepresentation mar be 
 by conduct, or by direct asaertion. 
 
 ' 10th ed. 834. 
 
INTEODUOTION. 
 
 Estoppel -in paia has been well defined to be • ' 
 
 nial to the contrary." ' °"^° previous act, allegation ov de- 
 
 Mr. Bigelow describes estoppel as follows:* 
 fromTcTo^VonCtfwMVS^ 
 
 or in Virtue Of tf^^'oZt^^f-^l^Z'^SllS^. i^%St& '^^ '^ 
 
 Of this It may, respectfully, be said that it hovers between a 
 
 definition and a statement of conditions: that as the laUer it 
 
 Mr. Cabab6's definition is as follows: » 
 
 wWci^;?S;e''iS%oLVf deLmSS?^ of fact irrespective of its truth, 
 out of a given tranSionf t£ dS! ItrJ!.^^^' and obligations arising 
 one^notger.or one of the^ ?s S^e Jtl^^^as^^^^^^^^^^^ 
 
 ^AnM^"''*"'' ^'^^^"^ ^^'''* ^«'«PP«1 i« said to be 
 an e^t?elThS rnroSS^sfve'Sltr??' '*" ^^'^^^ ^ " "'^^'-on of 
 
 ton?.! P'^'^^^V^f '' '""' "° ^^°*^ '•«^s°" for describing an es- 
 
 SnT'" ''"^'f""-" ^^ '•"^Pe'J^ent (which pfe'ent 
 denial of an alleged fact) may be equivalent in effect toTn ad 
 mission; but it is not an admission. Inabilitv fnTL 
 
 leading so to describA it ti.« j amogetner mis- 
 
 g ov lu uoscrioe it. ihe word, moroovnr wiU ««* «^ 
 
 abandoned it.» ^ ' ^'^'^"^"' ^^^ ^"^•'°d"°«d it, has 
 
 •Jacob. And see Bouvier; also 
 Stephen on Pleading (7th ed.), 181. 
 »0n Estoppel (5th ed.), 46a 
 » On Estoppel, 108. And see Eve^ 
 est & Strode on Estoppel (p. 3j to the 
 same effect 
 
 MOthed., vol. 3, 736. 
 
 "Sir. Bigelow in the third edition 
 of his work defined estoppel "as an 
 express or implied admission," etc. 
 and this was adopted by Bomn of the 
 American judges. See Zuchtmann 
 V. Roberts (1871), 109 Mass. 58, nnd 
 
 cases referred to in Bigelow on Es- 
 toppel (5th ed.), 458. note 1. See also 
 the language of Bramwell, L. J., in 
 Simm V. Anglo-American Co. (1879) ft 
 Q.RD. 203, otherwise and probably 
 
 Q. B. 396, and of Bayley, J., i„ Heane 
 
 v^Rogers(1839).9 a &C. 577. quoted 
 m Richards V. Johnston (1859). 4 H 
 & N. 668; 38 L. J. Ex. 833. lu ,^s 
 
 ^^J^T ^"'' ^'^'^^"^ ^«« dis- 
 carded the language. 
 
INTEODUCnON. g 
 
 JtSTIFICATIok OF EsTOPPEL. 
 
 ortl°!;''T Tu ''^t ^^«"i^i«° of estoppel as "an impediment 
 or Hr, 'which has the effect of precluding a man from "allec.. 
 1. « or denying a fact," the question naturally arises: Wh'v 
 should any one ever be so precluded? Surely the facts oughl^ 
 to be known, and should govern the rights of the parties 
 
 Suppose however, that goods are delivered to a warehouse- 
 man for storage; and when the bailor requires delivery the 
 warehouseman refuses, upon the ground that the bailor cannot 
 prove a clear title to the goods. One sees at a glance that the 
 warehouseman should not be permitted to take such a position • 
 
 th« Ml' 7ru'fV" f "'' ^"^ '^' P"'^^^^ ^^ '^^ »>^"™ent; 
 the title of the bailor has been assumed, and impliedly agreed to 
 
 This IS estoppel by contract; and it is based upon the sound-' 
 est equity which says that not only, or indeed mainly are the 
 facts as they exist those which govern the relations of the par- 
 ties, but those chiefly which the parties have assumed and 
 agreed upon. 
 
 Again suppose that the owner of property stands by and al- 
 
 r f . J^-l^.^^y another person to one unawar^e of the 
 
 real state of the title; the owner is and ought to be estopped 
 
 from asserting his position. He has misrepresented, or rather 
 
 old t' 1 ^'^^."^^-^P^^^e^tation of the facts, 'and is et 
 
 topped, therefore, from asserting them. This is estoppel by 
 
 p^rnTvoltr '' ' ''' '''' '' '''''''' --^ «'^" ^^' 
 In the earlier years of the development of the law of estop- 
 
 ulLnnr^TK"''f ' ^""' '° ^""^ ^^°)' ^" ^his was little 
 understood, and the phrase " estoppels are odious » represented 
 
 eal ZT tT. "' *'' "'"^'^ '" P^^^^"' '"^^ '^^^-rtion of the 
 real facts. The language persists in even some of the more 
 recent cases. In 1853 Lord Campbell, speaking of estoppel by 
 misrepresentation, said: » ^^i-uppei oy 
 
 odi^^iJ'L'SS'bfsStTmade^'^^^^ *''"*« °»* *^« *-'!, and is 
 
 c;ir.T'hi?:_?- _''/'. '^"^^^l^y ""^^'the truth to be told would con. 
 
 (1868) 85 Cal. 558. U was said that fair adva„ Jge " """ '" "" 
 
 the doctrine is a hursh one, and is 
 
6 
 
 INTRODUCTION. 
 
 ;, I 
 
 In the same case Crompton, J., more cautiously said : 
 
 •*I do not think that an estoppel of this liind is always odious; in many 
 cases I think it extremely equitable to act upon that doctrine." 
 
 In 1878 Bramwell, L. J., said: » 
 
 "Estoppels are odious, and the doctrine should never be applied with- 
 out a necessity for it" 
 
 But in the following year he said : ' 
 
 "I do not wish to speak against estoppels; for I do not know how the 
 business of life could go on unless the law recognized their existence." 
 
 The true justification for estoppel by personal misrepresen- 
 tation is clearly put in a note in the eleventh edition of Coke 
 upon Littleton : 
 
 "No man ought to allege anvthing but the truth for his defense; and 
 what he has alleged once is to be presumed to be true, and therefore he 
 ought not to contradict it; for as it is said in the 3 Inst 272, Allegam con- 
 trana non est avdiendus." * 
 
 Blackburn, J., well states the matter:* 
 
 "Now sometimes there is a degree of odium thrown upon the doctrine 
 of estoppel, because the same word is used occasionally in a very technical 
 sense; and the doctrine of estoppel in pais has been thought to deserve 
 some of the odium of the more itechnicaf classes of homologation. But the 
 moment the doctrine is looked at in its true light it will be found to be a 
 most equitable one, and one without which in fact the law of the country 
 could not be satisfactorily administered. When a person makes to another 
 a representation. 'I take it upon myself to say such and such things do 
 exist and the other man does really act upon that basis, it seems to me that 
 it IS of the very essence of justice that between these two parties, their 
 rights should be regulated, not by the real state of the facts, but by that 
 conventional state of facts which the two parties agree to make the basis 
 of their action ; and that is what I apprehend is meant by estopoel in vais 
 or homologation." •> rr j' 
 
 The rationale of estoppel by misrepresentation is put in epi- 
 grammatic form by Mr. Justice Swayne of the Supreme Court 
 of the United States, as follows:' 
 
 1 "I* P'ooeeds upon the ground that he who has been silent as to his al- 
 leged rights when he ought in good faith to have spoken, shall not be heard 
 to speak when he ought to be silent" f » « " ucmu 
 
 And little can be added in justification of estoppel to what 
 was said by Perley, 0. J., in distinguishing the "legal " estoppels 
 in pais of Lord Coke's time from the more modern « equitable 
 estoppel:"* 
 
 ^Baxendale v. Bennett (1878), 8 Q. 
 B. D. 829; 47 L. J. Q. B. 624. 
 
 >Simm V. Anglo-American (1879), 
 P Q. R D. 202; 49 L. J. Q. R 393. 
 
 » Coke, Lit, L. 8. c. 12, Jj 687, note 1. 
 
 <Burkinshaw v. NicoUs (1878), 8 
 App. Cas. 1026; 48 L. J. Ch. 179, ap- 
 proved in Re London Celluloid Co. 
 (1888), 89 Ch. D. 202; 57 L. J. Ch. 843; 
 Tomkinson v. Balkis (1891), 8 Q. B. 
 618; 60 L. J. Q. R 658. And see 
 
 Blackburn on Sales, 162. Distinction 
 should be made between estoppel by 
 deed and estoppel by misrepresen- 
 tation, the latter of "which is 
 founded upon reason:" Per Jessel, 
 M. R, in General Finance Co. v. Lib- 
 erator (1878), 10 Ch. D. 20. And see 
 
 _ ,.,, i:,!3vvrj;j«;,, it— iu. 
 
 » Morgan v. Railroad (1877), 06 U. R 
 720. 
 
 •Horn V. Cole (1868), 51 N. H, 200, 
 
INTEODrOTION. 
 
 with much BtrictnessVinstSrties that £t Jem ua' ^'"^ ^°^«V'}f,'* 
 estoppels are admitted on threxactlv onnn«ifi L^^^f*^ * «' * Equitable 
 equity and justice of the indlvldSa S^ bv nr^v^n?/!. °'*P''*''"°*'°5 "'« 
 asserting his rights under a general tSmical ?ulJ nf «£ u Pi^'^ '•'om 
 conducted himlelf that it would bTcontrirv to In ,u ^7 '^^'l" ^® ^""^ ^° 
 for him to allege and provlthe trSwS" ^ *^"'*^ *°"^ ^""^ conscience 
 
 fh J Hi r'T^ ""fi?' f ®'"^'^'' ^'^^^"S ^^^^«' »«* Perceiving 
 the distinction of Perley, C. J, limits the application of th^ 
 word oatotis m this wav : ' 
 
 utiluy'o/SfdoctriSt^o^^Xpt^^^^^^ 
 
 how essential it is to the TuicJ^and Si trLio*.^*'*'"'?*^''^:- Perceiving 
 man should be able to putS fn the co^duof .nH °. °^ ''"'*"'^' ^^""^ °°e 
 fellow, they have inclined to hold such cond»p^^^^^^ of his 
 
 binding in cases where a iSSf ot in^us?ii?^«.fiH"iS^ ^representations 
 ing their effect as revocable AUhesimrtin^Twi'^ ''t''^^ ^^ ^'^eat- 
 to allow men to be entrapped S formSTtatemtS^LiT^ ^^''- ""^'""ne 
 were perhaps looked upo^/as uU,np"l' fX„ mSe anThfvT^^ 
 one ever was deceived or induced to aUor hs= J^T*- ' ^^^ "^ which no 
 etili as formerly considered odious." position; such estoppels are 
 
 But this is equivalent to saying that estoppels are odious onlv 
 in cases m which there is no estoppel; for if «no one ever wa's 
 deceived or induced to alter his position," one of the essential 
 conditions of the existence of estoppel is absent.' 
 
 HisTosY OF Estoppel by Misrepresentation. 
 In equity it could be said as early as the year 1801 that it 
 
 WJiS 
 
 8o*n go7ng Jo^deal in a m^tte^fyin^Irfr'^'^l^^^i^ '?*'*« *« ""other per- 
 tug. theWr sh-afl "^^^^X^^lX^^'^^^^^^fi^^r^^^^^^ 
 
 jm earlier (in 1787) Mr. Justice Ashhurst, in a case at law/ 
 
 of t^lnnSeKrs^oTsVuVsSK^b^^^^^^^ principle that whenever one 
 such person to ocSn%r lormu'sJ'IultiSt"' * '''''^' ""' ^'''^ ^''^'^'^^ 
 
 291, 89a See also Stevens v, Dennett 
 <1872X 61 N. H. 883; Am. & Eng. Enoy. 
 <§u ed,), vol. II, jjSs, u. a 
 
 » 10th ed., vol. II. 840. See also Am. 
 A Eng. Ency. (3d ed.), vol. II, 888, n. 8. 
 
 'Seei)o«f, ch. IL 
 
 *Per Lord Eldon. Even° ^ "io'- 
 nell (1801X 6 Ve& 18& 
 
 ^Liokbarrow v. Mason (1787), 8 T. 
 R. 70. 
 
ra "ll l>plilMB HJ ^,.aii 
 
 8 
 
 INTKODUCTION. 
 
 Although not then so recognized, these doctrines were based 
 upon principles which in scientific classification must be re- 
 ferred to estoppel. The equity doctrine of restitution has in- 
 dt >d quite faded away, leaving estoppel in almost undisputed 
 possession of the field. Mr. Justice Ashhurst's dictum is still 
 much quoted, and perusal of a subsequent chapter' will dem- 
 onstrate that it was a very notable effort to formulate the prin- 
 ciples of the law of estoppel by assisted misrepresentation. 
 
 It is very remarkable that although these principles were 
 blocked out in 1787, yet it was not until fifty years afterwards 
 (until Chief Justice Denman's famous sentence in Pickard v. 
 Sears^) that courts of law first became thoroughly aware that 
 there was a principle of decision, consonant with tb ^ir system, 
 which enabled them to apply that equity which wus essential 
 to the proper administration of justice. It is not asserted that 
 Pickard v. Sears was the first case of its kind,» but it is in- 
 dubitable that that decision, marks an epoch in the history of 
 the development of the law, and gave to the idea of estoppel 
 by misrepresentation marked vitality and impetus. It formu- 
 lated a principle which has spread into almost every depart- 
 ment of the law. The principle was this: 
 
 '•The rule is clear that where one by his words or condn^'f wJif,.ii„4 
 rauses another to believe the existence o^f a l^vSzSt^ltthin^^nAV 
 
 Of this common-law rule Vice-Chancellor Bacon, in 1881 
 said:' ' * 
 
 iSeech.XIV. 
 
 *(1837)«A,&E.469. 
 
 »0,n the contrary, that case 
 avowedly proceeds upon the earlier 
 oases of Heaue v. Rogers (1820), 9 B, 
 & C. 580, and Graves v. Key (1833), 3 
 B. & Ad. 818, note (a). The present 
 writer would also point to Pickering 
 V. Busk, in 1813 (15 East), as a case 
 !R some respects taore iuipuitunt 
 and deserving of distinction than 
 
 Pickard V. Seara See also the Amer- 
 ican cases prior to ''iokard v. Sears, 
 of Stephens v. Baird (1828), Cowen,. 
 274 (N. Y.); Welland v. Hathaway 
 (1833), 8 Wend. 480 (N. Y.). 
 
 ♦This word "wilfully » will be dis- 
 cussed hereafter. 
 
 "Pickard v. Sears (1887X 6 A. & E. 
 474 
 
 «Keate v. Phillips (1881), 18 Ch. D 
 577; 50 L. J. Ch. 664. 
 
INTfiODUCTION. g 
 
 To the pres9nt.day student it would apDear thnf Lth « . 
 were sWi, evolving and disengagingX 2e^^^^^^^^^ 
 
 ft!' J ''"r f '^"^'^ "" ^^"•'^ ^^« !««« trammeled han 
 Its sister courts by traditions and "cakes of custom »hn7-? 
 
 ChTeft'r- '^r' ^'^' ^'^^ ^''^'^ °^ Mr.rtirALrs and 
 Chief Justice Denman and Lord Ellenborough^ are the mos^ 
 
 i In Pickering v. Busk (1813), 15 East, 4a 
 
CHAPTER II. 
 
 CONDITIONS OF ESTOPPEL BY MISREPRESENTATION. 
 
 The essentials of estoppel by misrepresentation will be con- 
 sidered under the following headings : 
 
 1. There must be a misrepresentation. 
 
 2. Either (1) by the estoppel-donier (personal misrepresenta- 
 tion); or (2) by some person whose representation he has made 
 credible (assisted misrepresentation). 
 
 3. There must be a disregard of some duty. 
 
 4. The misrepresentation must be as to fact or law— not 
 merely of intention or opinion. 
 
 5. The misrepresentalion must be of something material. 
 
 6. Fraud or bad faith m the es* ^ppel-denier is not essen- 
 tial— an innocent misrepresentation will estop. 
 
 7. Negligence (carelessness) is sometimes essen till. 
 
 8. The estoppel-asserter must be a person to whom imme- 
 diately or mediately the misrepresentation was made. 
 
 9. The estoppel-asserter must, on the faith of the misrepre- 
 sentation, change his position prejudicially. 
 
 10. The estoppel-denier must have reasonable grounds for 
 anticipating some change of position upon the faith of the mis- 
 representation. 
 
 11. The change of position must be reasonably consequent 
 upon the misrepresentation or the assistance. 
 
 A discussion of each of these will supply a comprehensive 
 view of the subject. Afterwards will follow some applications 
 of them to various branches of the law. 
 
 The Supremo Court of the United States has lately summed 
 up the points which a plaintiff in an action for the rescission 
 of a contract must establish: ' 
 
 1. That the defendant has made a representation in regard 
 to a material fact. ^ 
 
 2. That such representation is false. 
 
CONDITIONS OF ESTOPPEL. jj 
 
 m:ZP ""^ "'"' '"^ ""*«-^ -""-a we find the 
 2' a'.tr.'l ° '" °"°''P'' ^™1 1 »■"! 2 in rescission 
 
 10 in estoppel equals 4 in rescission. 
 
 7 in estoppel is inapplicable in rescissidh. 
 
 This leaves 6 in estoppel to comnare or mfK * 
 with 3 i^. rescission. In Enc^lanTcall /' *° °°"*''^^*> 
 American states there is mor« nf k ' ^""^ ""^"^ °^ ^^« 
 
 3 in rescission is fltd to be rntenatr"'' ''" °^"^''^^'' ^^^ 
 
 »Seepoa<, ch. VIII. 
 
CHAPTER UI. 
 
 CONDITION NO. 1. 
 
 Tliere Must he a Misrepresentation. 
 
 The subject of this work being "Estoppel by Misrepresenta- 
 tion," we are clearly open to criticism in positing misrepresen- 
 tation as an element in that kind of estoppel. Justification 
 might be obtained by changing the title of the book, but that, 
 for other reasons, is inadvisable. 
 
 It may, however, be urged in extenuation that we are deal- 
 ing with several very large classes of cases; that these cases 
 are not within any of Lord Coke's categories (Estoppel by Rec- 
 ord, Estoppel by Dcod, or Estoppel in Pais); that they are of 
 modern recognition, and of recent and portentous growth; that 
 they all present a common feature, namely, misrepresentation ; 
 and that for a place in this new category we may say that 
 " there must be a misrepresentation." 
 
 Definition op MisRBPaESBNTATioN. 
 
 Mr. Bigelow's definition of misrepresentation is sufficient:' 
 " By misrepresentation is meant a false ' apression of some fact, or set of 
 facts, created upon tlie mind of one perse a by another, by language, or by 
 lanp lage and conduct together, or by conduct alone equivalent to lan- 
 guage, where there appears to be no intention to warrant the same." 
 
 Necessity for Miskepeeskntation. 
 
 There can be no reason to doubt the correctness of Lord Jus- 
 tice Bram well's statement* that this modern doctrine of estoppel 
 " never can be applied except in cases where the person against whom it is 
 used has so conducted himself, either in what he has said or done, or failed 
 to say or do, that he would, unless estopped, be saying something contrary 
 to his former conduct, m what he had said or done, or failed to say or da" 
 
 In Other words, no one is to be estopped from asserting a 
 fact unless there has been some prior misrepresentation jof that 
 
 1 On Estoppel (5£h ed.), 556, see Ex parte Adamson (1878), 8 Ch. 
 
 SBaxendale v. Bennett (1878), 8 Q. D. 817; 47 L. J. Bk. 104 
 a D. 525; 47 I* J. Q. R 634. And 
 
THERE MUST BE A MISEEriiESENTiTIOl,. 13 
 
 fact, apon the faith o, .hioh ,„me person has changed his posi- 
 
 iffgofatrt f:;'!e5o"r b° "'"/t "•"' ^'•'- ^ p---'- 
 
 6 a, *oiuicc ror i,50, to be reduced to one sbilUntr if th^ 
 
 him fr„„ "he I^nerlZtLT^^™^ '"" ""« "^^^"^ 
 *u . "'^"®^> S"a handed him over to tho nlninti-ff „* 
 
 ^weT/odTa^;:"* '"' plaintiff that the ZX^^TC 
 
 k«i^*u X x. "''^''H''*'" i-^e aog. In a new contest over him iMvoa 
 neld that the owner was nnf «cf j -^'"^er nun it was 
 
 Plaintiff hxrXh !u^ u estopped as against the former 
 
 plaintiff by what had happened from asserting his title Th!!! 
 
 Classification of Misrepresentation 
 
 sUion Of th^flaw ll IT^^ ' Th^rrJ! tlf^^ 
 lowjng classification should constantly be borne in mind 
 Misrepresentation may be 
 
 1. Personal, or 
 
 2. Assisted. 
 And may be 
 
 1. Direct, x)r 
 
 2. Indirect. 
 And may be 
 
 1. Active, or 
 
 2. Passive. 
 And may be 
 
 1. Expressed, or 
 
 2. Implied. 
 
 Personal and Assisted Misrepresentation 
 Direct and Indirect Misrepresentatiok. • 
 
 And this one 
 
 in 
 
 chapt 
 
 ore X and Xlll. 
 
 ' Sandys V. Hodgson (1889). 10 A, & E. 473; 8 L. J. Q. R 344 
 
u 
 
 CONDITION NO. L 
 
 AonvB AND Passive Misrepresentation. 
 
 . . t 
 
 Passivity can be penalized only where a duty to be active 
 
 can be predicated. Chapter Y discusses that aubject. 
 
 Chapter VIII makes use of the distinction in hand in order to 
 harmonize the cases relating to the necessity for bad faith as ^ 
 an element in misrepresentations which estop. 
 
 And chapter IX will indicate that passivity, as the result of 
 carelessness rather than desigh, may work an estoppel. 
 
 Expressed and Impi.ied Misrepresentation. 
 
 This classification is by no means the same as that just dealt 
 with (although frequently confounded with it), as will at once 
 be seen when it is observed that an active misrepresentation 
 may be either expressed or implied in the words or conduct in 
 which it is embodied. In fact, an implied as distinguished 
 from a passive misrepresentation may be said to be an infer* 
 ence properly drawn from some activity. And the question 
 arises whether such inferences may freely be drawn, or whether 
 we are to say with Cok^ upon Littleton : ^ 
 
 " Every estoppel, because it concludeth a man to alleadge the truth, 
 must be certaine to every intent, and not to be taken by argument or in- 
 ference;" 
 
 and with Kav, L. J. : • 
 
 "In order to create an estoppel, the statement by which the defendant 
 is held bound must he clear and unambiguous; " 
 
 and with Mr. Bigelow : • 
 
 "The representation, further, to justify a prudent man in acting upon 
 it must be plain, not doubtful or matter of questionable inference. Cer- 
 tainty is essential to all estoppel& The courts will not readily suffer a 
 man to be deprived of bis property where he had no intention to part 
 with it." 
 
 Some palliation of 'the rigor of the " legal " estoppel, fit- 
 tingly denominated " odious," * is obtained by the prescription 
 of perfect identity between the misstatement alleged to have 
 been made and the fact as the estoppel-denier desires to show 
 it ; but the justice of the requirement is less obvious when ap- 
 plied to those " equitable estoppels " which promote " the equity 
 
 I L. 3, c. 18, g 567. And see Am. C. P. 49; Onward v. Smithson (1893X 
 
 & Eng. Ency. (2d ed.^ vol. 11, p. 388, 1 Ch. 14, 15; 62 L. J. Ch. 138. 
 
 n. 6. 3 On Estoppel (5th ed.), 57a And 
 
 » Low v. Bouverie (1891), 8 Ch. 113; see cases there cited, and Keating v, 
 
 60 li. J. Ch. 504. And see Kepp v. Oiiue (1874), 77 Pa. 89. 
 
 Wiggett (1850), 10 G B. 63; 20 L. J. Mnfe, ch. L 
 
THEKK MUST BE A MISREPEE8ENTATI0N. 15 
 
 and justice of the individual case.»« In the interpretation of 
 statutes we are familiar with the distinction between penaliz- 
 lufr and enabling statutes; and for the modern estoppel hv mis- 
 representation we need have little hesitation in making 'appH. 
 cation of the language of Pollock, C B • 
 
 ^-oS^!S&lZ\'nl^^^^^^^^ so con. 
 
 ment or license, whether the party intends tSt h^Jn,.f^^^°^ °' *" *«'««• 
 has the effect that the partyS^sinK that laL.?fi ^^ k'^'u'^'' *° <"• "<>'• ** 
 himself, cannot afterwS eain^y . he "f^^^^^ •'^?° ^^^^ conducted 
 from his words or conduct:"^ reasonable inference to be drawn 
 
 A few examples will be useful: 
 
 A representation by a company that its debentures are Wallv 
 transferable may be implied from the fact that their form so 
 indicates.' , 
 
 n a company represents that its shares^'are paid up, it must 
 
 in »'ht° T. * "P'^«""'«»'' " ">« they are paid up in the way 
 m which they are to be paid up "-for example, in cash « 
 
 A merchant being about to furnish defendant's sons with 
 goods on credit inquired of defendant whether his son had as 
 
 thatTh ;T/"" '""' P'-P^^'y' '»»'»'"'■■' ~d 
 
 Intatfon ; *''' " "^° "" ■■'°°°^^'»"' -'"" ">« "P™" 
 
 A railway company may agree to carry goods, and vet not 
 be estopped from asserting that it was, as to those lods a 
 common carrier. By agreeing to carry the goods ther^is not 
 an .mphed representation that it is bound to carry them- 
 
 A trustee of a fund who receives notice of a charge upon it 
 s under no obligation to volunteer information af to prior 
 
 ts; oMhe rndr '^^""^ ''° "-"''^ -•>—">- -» 
 
 ' Ante, oh. L 
 
 2 Cornish v. Abington (1859), 4 H. 
 & N. 556; 28 L. J. Ex. 26a. Approved 
 in Thomas v. Brown (1876), 1 Q B D 
 722;45L.J.Q.B.8ll. And see per 
 Lord Cairns in Peek v. Gurney (1873) 
 
 L. R 6 H. L. 377; 43 L. J. Ch. 19; 
 Bigelow on Estoppel (5th ed.), 634- 
 andpos^, ch. XII. ' 
 
 ^ 3 Goodwin V. Roberts (1876), 1 App, 
 Cas. 47U; 4.1 L. J. W. B, 
 
 729; Easton v. London (1886). 34 Ch 
 D. 95; 56 L. J. Ch. 569. 
 
 *Burkinshaw v. NicoUs (1878) 3 
 App. Cas. 1021; 48 U J. Ch. 179. ' 
 
 ftCorbett v. Brown (1831), 8 Bing. 
 33. And see Tapp v. Lee (1803), 3 
 Bos. & P. 367. 
 
 "Phelps V. Illinois Ry. (1880), 94 
 111. 548. 
 
 ford (1883), 24 Ch. D. 93; 62 L. J, 
 
 Re Rom- 60 L. J. Ch, 
 
 Ch. 
 
 594. 
 
MMMH 
 
 16 
 
 CONDinON NO. 1. 
 
 A trustee replied to certain interrogations as to incum- 
 brances upon the trust property. Afterwards it was sought 
 to make the trustee liable in respect of certain incumbrances 
 of which iio had made no mention. Lindley, J., said : 
 
 " But the diflaou)ty of aflfording the plaintiff relief oi) this ground arises 
 from the amhiguity of the defendant's letter* They are quite consistent 
 with the view that the incumbrances mentioned by the defendant were 
 all he knew of or remembered. A statement, however, to that effect would 
 not estop him from stating that there were others which he did not know 
 of or remember. . . . Knowledge, and means of knowledge, are very dif- 
 ferent things; and if a person truly says he only knows or remembers so 
 and so, is it right to treat him as saying that he knows more, even if it is 
 uis duty to inform himself accurately before he speaks."! 
 
 Where the holder of a chattel mortgage, on payment of a 
 portion of the note secured by it, sii renders the note to the 
 maker after allowing it to be marked «' paid," he is estopped 
 as against a lona fide purchaser of the mortgaged property, 
 who i)urchases in reliance on the evidence of payment shown 
 by the note in the mortgagor's hands, to claim that there is a 
 balance due on the mortgage.* 
 
 But the result would be different if the note was not marked 
 l)aid, but merely given up in exchange for a renewal of it. 
 
 ♦I, '^ Y°u''*T?°u.*^'"'^ ^^^^ ^°y reasonable man would take possession of 
 *i A°u ^- "ooj"8on to be equivalent to a representation bv the plaintiffs 
 that the price of the piano was paid. The practice of renewing notes is so 
 common that the defendants, as business men, can scarcely have excluded 
 it from their contemplation." * j x. i*ucu 
 
 A patentee, in urging a customer to give his machine the 
 preference over another that was offered in sale, said in sub- 
 stance: "Now, do give mine a trial; you will find it a very 
 much better machine." But this was not a representation that 
 the other machine might safely be purchased— that it was not 
 an infringement upon the patent. The statement was not equiv- 
 alent to « now, just try, and see which is the best machine, 
 and then you may take whichever you think to be the best."' 
 It was putting forward " one strong commercial reason why he 
 desired the defendants to purchase his machine;" but it was 
 not a suggestion that he intended to abandon any legal rights; 
 nor was it a representation that the other machines were no in- 
 fringement upon his patent.* 
 
 Ch n if Tr^^f «.*.?• °- ^^^' ^ '^"°» ^- ^'°"« <1878X 9 Ont. 
 Ch. D. 61; 46 L. J. Bk. 70. App. 291, 299. 
 
 'Finks V. Ttnr^lr MflQ^\ in a \Kr n A-n . « . . 
 
 10»4 (Tex.). 740. 57 l. J. Ch. 11. 
 
THERE MUST BE A MI9REPKESENTATION. 
 
 ir 
 
 Where it is alleged that some person has beon h.i i , 
 partner (although not really suclO it k .11 """^ *'' " 
 
 person said to be a partner shouM Vu u r'"'' ^^''^ ^^^' '^'^ 
 
 The distinction appears to be JeUfo 'nded luther^"'" 
 
 ..ave been ZjTy ZiZ -bil^otd ^b?/ ?""' ""' 
 adapted to bis deceivin., Tf ,■„ ' ""^ ■'^^n '''e H 
 
 ond case no fraud v»si„, ! ■ •"""■ ^'S'xr'cnt. I„ the sec- 
 honestlvmadeuseo ad"r '' "" """''^"""^ P'''»^<' 'vas 
 was taken out of it a r. f 'k ""''■""? f<"n that intended 
 
 that „eani„;ii;:;rn:rxT:'„;r,:rrb"^ "''" 
 
 oastly distingnisbable from the other! ""^ * "^ " 
 
 iMartyn - Gray, 14 C R ^N «5 ^ «t 
 830 <^- a(N.S.) 'Low V. Bouverie (1891). 8 Ch 
 
 =«Bishop V. Balkis (1890) 25 O R n ,• , '^' ^^' ^^*- ^^ee analoev • 
 
 ". 513; 59 L J. Ch! S To^pki^! (S) 1 '^ ^r™^"*'^^' ^- ^^^ 
 
 «on V. Balkis (1891). 2 Q. B. D 614 6o K' "r^ ^^'^' ^« ^ J' Ch. 253; 
 
 L. J. Q. a 658; (1893) A. a 396; 63 ST^/ " ^""'^" '"'"'^^ '' ^ '^• 
 . L. J. Q. B. 134; Re Concession's T^ust 
 a890).3Ch.757;6aL.J.CU.9aa 
 
CHAPTER IT. 
 
 CONDITION NO. 2. ^ 
 
 The misrepresentation must le made either (1) ly the estoppel- 
 denier {personal misrepresentation) \ or (2) hy some person 
 whose misrepresentation the estoppel-denier has made cred- 
 ible {assisted misrepresentation). 
 
 Pehsonal Misrepresentation. 
 
 •j"'li?'^ *'*^®' **' *''® '^'"^ °' estoppel we are called upon now to con- 
 sider, the party has, I conceive, either himself made, or authorized to be 
 made, a statement of fact untrue, or he has conducted himself so as to jrive 
 rise to the belief of a fact untrue," i «■" »• c 
 
 The first of these alternatives needs little enforcement. It 
 means merely that a raaii is not to be damaged b}' a misrepre- 
 sentation which he has neither made nor authorized,' unless 
 i ndeed he comes within the second class of cases. For example^ 
 if a man be held out as a member of a firm, ho cannot be liable 
 if he was ignorant and innocent of all that was done. 
 
 "The holding one's self out to the world as a partner . . . im- 
 ports at least the voluntary act of the party so holding himself out . . 
 and 18 altogetherincompatible with the want of knowledge that his name 
 Has oeen so used. ^ 
 
 And so where the estoppel-denier's name appeared in a list 
 
 of shareholders, which without his knowledge had been shown 
 
 to the estoppel-asserter by the secretary of the company, and 
 
 the secretary had no authority to disclose the list, it was held 
 
 that there was no estoppel.* 
 
 Assisted Misrepbesentatio.v. 
 
 The second alternative of the condition confronts us with 
 problems altogether peculiar to the law of estoppel. It will 
 be observed that it implies, notwithstanding what has already 
 
 »r ■ Channel], B., in Swan v. N. 
 R A. (1862), 7 H. & N. 657; 81 I* J. 
 Ex. 425; Fi'-st Nat Bank v. Cody 
 (1894), 03 Ga. 127; 19 S. E. R. 831. 
 
 «'•«- Mirrt-stviiu:: 13 IlfCt'SSarV lOF 
 
 present purposes between misrepre- 
 
 sentation by the estoppel-denier him- 
 self and by his agent. Quifacitper 
 alium, facitper se. 
 
 3 Fox V. Clifton (1830), 9 L, J. C. P. 
 £Gi. 
 
 ♦Id. 
 
 L 
 
MISEKraEMOTAIIOK-Br WHOM. jj 
 
 shall see, that he mav h„LV '^^?" "°P'"' '"''"'". «» "e 
 
 it he has '^lm7.Ht:x^r^:''r'r''''^'''' 
 
 of aay intention to do so and alth™.»^ ^^^^^ ''"'*°"' 
 
 representation untiuL^theifschreAJh'"''™ "'""^ ""^ 
 This class of cases the wrUervrnr^?^ ^" """"-P'^l-ed. 
 
 Hisrep^sentation ; " ZllLZloZ^'ZZTl^^'^ 
 
 ™,ved.snp%ettrirra~tr.^r,t"r7 
 
 I pay £200 upon it- anrl affo« ^ f"s«'oP*^oO, afterwards 
 seLg that £25 "is s"m^X^ ^^ -P- 
 
 amount. I am not 681000^^^5' mortgage for that 
 
 £50 due. I have nott ^nt ^''''''"^ *^^' '^^'^ i« «^l^r 
 
 sentation of t hT^r ^^^^ T^^XT'' '^ l'^ "^^^^P^^" 
 the mortgage purport ^ecureSranrT ^"^^^ *^^' 
 receipt of that amount); Zonf/l^o::^^^^^ 
 
 vanced; and that, concealing this fact tha - V" ""'^''^ "^■ 
 mortgage for £250 T ««, ' ^ mortgagee sells the 
 
 ancelhfch Ihf ve „iven t^hr "''"'''''' '^^'^"^^ ^^ *'^« «««i«t- 
 edgment has mad/reSibl the r'''''°'''^°"' myacknowl- 
 gagee.i ^ ^^^ misrepresentation of the mort- 
 
 iBickerton v. Walker (1885), 31 
 
 ChI).,5i;55L.J.Ch.287;aadse 
 West V.Jones (1851). 1 Sim. (N. S) 
 
 5? W^t''^^^''*''^^ (l861),80Beav: 
 81. Webb V, Heme Bay (1870) L. R 
 
 ;Q^B642;39UJ,Q.J^JIi,t„S: 
 V London (1896V 23 ont App. 139- 
 20 S. C Can. UF, But see 3yckman 
 
 V. Canada Life a870). 17 Gr. 550. In 
 
 the Unued states disJnction must 
 be made bet«reen three classes of 
 mortgages: (1) Where the mortgage 
 secures payment of a ^-^ .»"»" 
 nn*« ♦!,- F»j'ineni; or a promissory 
 note the law is as stated in the text 
 except m Illinois (Ho.tetter v. aSI 
 _ander(1876).23Minn.559).Ne;vJer. 
 
 fe 81). Ohio. Oregon (Jones on Mort! 
 «a«e8 (.Hhed.),g884fl.),and^n. 
 
 «a8. (2) Where the mortgage se- 
 cures payment of a bond the llwt 
 
 boLl^T^'r^''-^ But if the 
 should I, *™^'«tory sort there 
 should be no distinction, for the 
 
 fo"r.f ' °'''*°PP^^ apply equalf^ 
 to both cases: First Nat Bank v 
 
 (8) Where the mortgage secures 
 payment of money onlyf it is ^d 
 
 .nJo„es.§841(a).that«nassigTe 
 takes subject to the mortgagee's 
 
 eqmies; but the only case XTis 
 
 !!!;^k!!!'_"1'."« *"« q^-^t-on was 
 ..^„ '^^'K-'ee took sub- 
 
 wh!!r J *''* instrument), but 
 whether he was bound by subsequent 
 
I I 
 
 20 
 
 CONDITION NO. 2. 
 
 Under What Circumstances.— The question, then, for solu- 
 tion is this: Under what circumstances shall one person bd 
 estopped by reason of assistance given to the misrepresentation 
 of another? 
 
 The present writer, aware of its dangers, is unwilling to ad- 
 vance any well-defined rule; but perhaps he may be permitted 
 to suggest a phrase which may prove to be of some service. A 
 perusal of the cases leaves upon the mind this impression : that 
 one man may be estopped by a misrepresentation made by an- 
 other, when the former, in breach of some duty to the deceived 
 person, has supplied the defrauder with that which teas neces- 
 sary to make the representation credible. If the fraud was ac- 
 complished without assistance, there can, of course, be no 
 estoppel (of any one but the defrauder). If, although there 
 
 accountings. The reasoning in First be clear departure from the agree- 
 Nat. Banii v. First Nat. Bank (1880). ment of the n.ortgagor and mort- 
 2a Hun, 339 (N. Y.), strongly sup- gagee, to which the assignee subse 
 ports tlie contrary view. 
 
 Mr. Pomeroy.criticisingthe United 
 States Supreme Court case of Car- 
 penter V. Longan (1873), 16 Wall. 
 271, in which it was held that the 
 assignee of a mortgage securing a 
 promissory note takes free from 
 equities, says that the argument 
 which supports it is " that the debt 
 is the principal thing and the mort 
 
 quently in good faith became a 
 party. ... If one of two inno- 
 cent persons must suflfer by a de- 
 ceit, it is more consoviant to reason 
 that he who ' puts t.ast and confi- 
 dence in the deceiver should be a 
 loser rather than a stranger.' " This 
 principle is that of estoppel (see 
 post, ch. XIV) as applied to ambula- 
 tory choses in action. See ch. XXIV. 
 
 gage is the mere adjunct of the It covers the case of a mortgage to 
 
 debt;" that the answer to the argu- 
 ment is that " tile note and the mort- 
 gage do not together constitute a 
 promissory note;" that the rule as 
 to notes " was first adopted by the 
 courts ai has ever since been main- 
 tained solely with a view to promote 
 the interests of merchants, and to 
 secure the success and freedom of 
 mercantile and commercial deal- 
 ings. A promissory note accompa- 
 nied by a mortgage is not in any 
 pense a mercantile or commercial 
 security." There are two answers 
 to this: 
 
 secure payment of n loyas well as 
 one to secure paym« it of a note. 
 
 (3) It is not correct to say that the 
 rule as to the assignee of notes tak- 
 ing free from equities has been con- 
 fined to "mercantile and commer- 
 cial dealings." It has been much 
 more widely extended, and now 
 covers all ambulatory transactiona 
 See ch. XXIV. 
 
 Some recent cases are State Bank 
 V. Flathers (1893), 45 La. Ann. 78; 18 
 S. R 244; Pertuit v. Damaro (1898), 
 50 La. Ann. 893; 24 S. R. 681; Ferris 
 V. Briscoe (1898), 78 111. App. 242; 
 
 /«\ mi J 1 . — •o*^*,^ v"->vu/, «o in. ADD. Z455: 
 
 (1) The underlying argument of Jones v. Dulick (1898), 55 Pac. R. 523 
 
 the court is inadeauAt^lv ata^o/i t* /tr..^ .. »*-_.. _ \> ' .77* "". "^^ 
 
 18 as follows: "To let in such a de- W. R. 770 (Wis.), 
 fense against such a holder would 
 
MISBEPRESENT^TION — BY WHOM. ©l 
 
 was assistance, yet the assistance was an immaterial factor in 
 tiie accomplishment of the fraud, there ought, likewise, to bo 
 no estoppel - the assistance did not furnish the occasion or the 
 opportunity for the fraud. But if the assistance was in some 
 way essential to the success of the fraud - furnisljed the occa. 
 sion or opportunity for it: made credible a representation which 
 without xt, could not have been successfully made,- then, if there 
 has been a breach of some duty in rendering that assistance 
 estoppel will ensue.i atauue, 
 
 It is not intended at this place to deal at length with the 
 cases 1 lus^rative of the subject. It will be suffident for Z 
 general view which the first part of the work is intended to pre- 
 
 Zlh % !r '^^'^'T"'f'^ '^'^P^^^' ^^^^" ^'^^ different 
 branches of the law, should be shortljrnoted. At the same 
 
 time, m the doctrinp of estoppel by assisted misrepresentation 
 a':: rm^altX! ""''^^'^ ' "^"^^ '^""^^ '^ -^^^-- 
 
 anf rirr^ «f /^^'^^.- 1 employ an agent to sell my horse 
 and tell him not to warrant. By representing that he has suf. 
 ficuent authority, he sells the horse, giving a warranty. In tht 
 case there is no reason why I should be estopped from denving 
 my agent's autority to warrant. My agent has made a2 
 representation, but he had no authority from me to do so; and 
 
 'Happily not much originality- 
 can be claimed for the phraseology. 
 The term "assisted misrepresenta- 
 tion," and the other language em« 
 ployed, were suggested by happy 
 conjunction, during study, of sev- 
 eral judicial utterances. Lord Den- 
 man, in one of the eariy leading 
 cases (Gregg v. Wells (1839), 10 A. & 
 E. 97; 17 L. J. Q. B. 193), said: "A 
 party who negligently or culpably 
 stands by and allows another to con- 
 tract, on the faith and understand- 
 ing of a fact which he can contra- 
 dict, cannot afterwards dispute that 
 fact in an action against the person 
 whom he himself has assisted in de- 
 ceiving/^ Pry, J., in Northern Couu- 
 t!sg V, Whlpp (1334), 2G Cii. D. 494; 
 53 L. J. Ch. 629, said: "That the 
 court will postpone the prior legal 
 
 estate to a subsequent equitable 
 estate, where the owner has assisted 
 m, or connived at, the fraud which 
 has led," etc. Bayley, J., in another 
 case (Boysou v. Coles (1817), M. & 
 S. 84), said: "But this rule will cer- 
 tainly not apply where the owner of 
 goods has lent himself to accredit 
 the title to another person." And 
 Grose, J., in still another case (Lick- 
 barrow V. Mason (1787), 3 T. R.63), in 
 which the owner of goods, by in- 
 dorsing over a bill of lading, was 
 held to be precluded from the right 
 to stop in transitu, said: "A bill of 
 lading carries credit with it; the 
 consignor, by his indorsement, gives 
 credit to the bill of lading: and on 
 the faith of that, money is ad- 
 vanced." 
 
mSM 
 
 22 
 
 CONDiriON NO. 2. 
 
 I have in no way made his representation credible. Supposing, 
 however, that in selecting the agent I had chosen a horse 
 dealer — that is, one whose usual powers are understood to in- 
 clude a power to warrant. In this case I ought to be estopped, 
 because I have by the selection of ray agent made the misrep- 
 resentation as to authority credible.^ s 
 Again varying the case: Suppose that I sent my agent with 
 the h >rse to a fair (where it is usual to give a warranty), with 
 instructions to sell but not to warrant, and he sold and war- 
 ranted. I am in this case also precluded from denying my 
 agent's authority to warrant, because, by allowing my agent to 
 operate at a fair where warranties are usually given, I have 
 made credible his misrepresentation of his authority.' 
 
 BiUa and Notes.— I draw a note and leave it in my desk un- 
 signed. It is stolen. My name is forged, and the note passed 
 to an innocent holder. I am not estopped. I have not made 
 credible the representation that the note was my real obliga- 
 tion.' Varying the case: Ig'vea friend an accommodation 
 acceptance which he afterwards returns unused. I tear it in 
 two (but so neatly that the severance might well be taken to 
 have been for safer transmission through the mails) and throw 
 it on the ground. He picks up the pieces, pastes them together, 
 and passes the bill. I am liable; for I have by insufficient can- 
 cellation made credible the representation that the acceptance 
 was genuine.* 
 
 Varying the case again : Suppose that the forged note is pre- 
 sented to me for payment, and that I forbear denouncing the 
 forgery until after the holder's position has been damaged by 
 the flight or change of circumstances of the forger; I am es- 
 topped by the assistance which 1 have rendered to the success 
 of the fraud.' Seeing « the mistake into which he had fallen, 
 it was my duty to be active." • 
 
 Partnership.^ Members of a firm, for the purpose of obtain- 
 ing credit, falsely represent that I also um a moraber of it. I 
 
 iir 'f 
 
 • See oh. XXV. 
 
 2 Seech. XXV. 
 'Seech. XXV. 
 
 * Ingham v. Primrose (1859), 28 L. 
 J. C. P. 294 The case has been much 
 suspected. See oh. XXV. 
 
 •McKanzie v. British Linen Ca 
 (1881), tt App. Caa 82. And see oases 
 cited with this one in ch. XI. 
 
 BRamsden v. Dyson (1868). L. R 1 
 H. L. 140. 
 
 11 If 
 
MISKEPBESENTATION-BY WHOM. 23 
 
 have ceaso,urb ;„ "„o 'ir T ' " ""T"'"' ""= «™. ''«' 
 persons with ^^o2'^: ZZTr^^T''^'^ ^^•'^ '° 
 tinned to give credit to thefl™ 1^^ the! '° f"""' """■ 
 remaining parties that I was ^in „ ^P'^^^"'*"™ ot the 
 
 because n./previo«s co n"c ion ithTh^fl:™ a'd fr^"'^' 
 of the nsual notice of dissolution have mad^Th. ' "^"'^ 
 tion credible.' ""^ '"* misrepreseuta- 
 
 shares ; . a certain onm J t "'"'"""S »" be the owner of 
 
 one Who Mi:r:;r;rnL:rt!:::rr r '- 
 
 had, throu..h inadvef/.r/ f ^"f'"'* "■«' ""e oompanv 
 .hip of the tes anTtl; '2 ""^ " """'*«'"'' «' »'™''- 
 deuce of my 0,™^^ th " ''°'' '^'' ™"'^ "P"" " *'*" 
 because byi oSaVu htd TSeZ'' """ "^ "^"PP^^- 
 «nd made it credible.' ^ ■msrepresentation 
 
 to another person who ha 1 „^iee "f C f ^' *''« «^""« 
 no ground exists for holding the flit ,„L, ' "«""°''™°ee; 
 
 this misrepresentation, and^he is ^off/r'''''''''''* '" 
 his true position Thl mi,!, I e^'oPPed from asserting 
 
 second mortgag^ in tIC th ""^ '""' "■« '""^ " ">« 
 mortgagor. V^vthe™ ^'^f ""'"PPorted assertion of the 
 
 resenltlon thlTr^l hfdToV"" """ '" '"« "--"P- 
 from the first mon«i^L '■ ^^ '°°"' P"'«'"' obtained 
 
 he had, in supprtSlreZLt o ' '!"* "T" '^ '""' """ 
 ship, produced the d^dsTThT ., '"""'"''''^ ""'"er- 
 
 mortgagee may now t ttopoT^'H""'?*-- T"* «"' 
 
 »:«rap:,l^- ''«'''•"»»'•« 87 1- J. Q. a. 7a And, 
 *See oh. XXVII '** "'^ ^^^^^ »n oh. XXIL 
 
 » Re Bahia (ISOsi, L. R 8 Q. a 584; *^'^^'*' ^'^ ^'^ 
 
 
rf 
 
 :.ir 
 
 CdNDITION NO. 2. 
 
 iijl 
 
 ill i 
 
 ti 
 
 other "^ith the money; No. 2 procured the mortgage to h?f 
 executed by the mortgagor, who signed the iisusl receipt for 
 the money; tbe mv/rtgage was sent to the otL- r ti istee (Iso. 1\ 
 and executed by hita; some of the money wn,: knpt by t-astoe 
 No. 2, and was therefore never recei/ed by vhe mortgagor; 
 Kg. 2 afterwards died ; and the (suestion arose between the sur- 
 viving trustee (No. 1) i nd the \* -tgagor as to whether the 
 latter owed the sum retained by No. 2. It was Laid that t'ie 
 mortgagor was estopped hy the aclv :ow; idgmont upon the mort- 
 gage. He had enabled IS o. 2 to represfcsit .o No. 1 tlsat, be (thut 
 rao^f pgor) had received the whole amouLV^ and h.vl thus pre- 
 vent tv:! dii' every of the fraud.' 
 
 Oste-'/:»lU:: Ownei\^!iip. — There are very many cases in which 
 estoppel ',. doe to assisted misrepresentation by ostensible own- 
 ership, 1 hat is to say, the true owner ci property may h& 
 estopped from asserting his title by enabling some other person 
 to succCi^sfully represent himself as the owiu r, and thus to de- 
 ceive an innocent purchaser. 
 
 Where the true owner has really transferred the title, audit 
 has fraudulently been passed on to an innocent transferee, the 
 true owner may also be said to be estopped. But that case can 
 be viewed as one in which the purchaser, having actually got 
 the estate in the property, is entitled to hold it without refer- 
 ence to estoppel, as against a merely equitable claimant. Which- 
 ever ground may be thought to be the true one, the result, at 
 all events, is unquestioned.^ 
 
 Estoppel must clearly be invoked, however, where not the 
 title itself, but the appearance of it only, has been conferred 
 upon the fraudulent grantor — for example, by transferring to 
 him for particular purpose a bill of lading. In such case it is 
 impossible for the innocent purchaser to say that he has any 
 title at all; and his position must be maintained by estoppel^ 
 grounded upon the misrepresentation of tb custodian of the 
 bill and the assistance rendered by its real (. j*. Many such 
 cases will h^ 'ound in subsequent chapters. 
 
 And estc , '. must be appealed to v"'?-;' 
 
 1 West V. Jones (1831), 1 Sim. (N. S.) of solutic. i v, ; 
 205. And see London v. Suffield (that wh; w ■ 
 (1897), 2 Ch. 608; 68 L. J. Ch. 790. ble estate. & 
 
 2 The case becomes more difficult * Poat, cha 
 
 Ithough the title 
 
 on the purchaser takes. 
 . '' cftUed^ :\~\ e"uita- 
 •. XVL 
 ? to XX VI. 
 
MISBEPRESENTATION — BY WHOM. £6 
 
 itself has been vested in a trustee, the person misled by the 
 appearance of beneficial ownership is not a sub-purchase;, but 
 a creditor of the trustee. Usually a creditor can sei^e such 
 estates only as his debtor in reality owns; and if the debtor be 
 a trustee, his creditors are not commonly entitled to levy upon 
 the trust estate.^ It has been held, however, in a great many 
 cases that if the property has been transferred to the debtoV 
 m order that by his appearance of financial strength he mav 
 obtain credit the true owner may be estopped from settino-up 
 his benefacial title against creditors.^' For estoppel in such 
 cases It IS not sufficient that the title to the property has been 
 vested m the name of the debtor;" so to hold would be to add 
 a new terror to trusteeship.* Intent to mislead creditors must 
 more or less clearly appear.* 
 
 Concealment of an incumbrance « upon the debtor's own prop- 
 erty, or concealment of a debt due by him,^ may, upon similar 
 grounds, have the effect of estopping the incumbrancer or cred- 
 itor from asserting his claim. The reputed ownership clause 
 of the English bankruptcy act has given statutory approbation 
 to this principle.* 
 
 'Re General Horticultural Co. 
 (1886), 33 Ch. D. 512; 55 L. J. Ch. 608; 
 Badeley v. Consolidated (1888), 88 
 Ch. D. 238; 57 L. J. Ch. 468; Camp- 
 bell V. Gemmell (1890). 6 Man. 353; 
 Case V. Bartlett (1898), 12 Man. 280; 
 Root V. French (1835). 13 Wend. 570 
 (N. Y.); Bryant v. Whitcher (1872), 
 52 N. H. 158. See as to creditors of 
 a shareholder in a company, after he 
 has executed a transfer, but before 
 it is registered, ch. II. 
 
 2Tapp V. Lee (1803), 8 Bos. & P. 
 367; Corbett v. Brown (1831).8 Bing. 
 
 83; Graham v. Thompson (1892), 55 
 
 Ark. 296; 18 S. W. R 5a 
 3 Breeze v. Brooks (1880), 71 Cal. 
 
 169; 9 Pac. R 670; 11 id. 885; Rob- 
 
 erts V. Trammel (1890), 15 Ind. App. 
 
 445; 44 N. E. R. 331. 
 <Kern v. Day (1893), 45 La. Ann. 
 
 71; 12 S. R. 6; Girault v. A. P. Hotal- 
 
 ing Co. (1803). 7 Wash. 90; 34 Pac. R. 
 
 471; Hill V. Van Sandt (1895), 1 Kan. 
 
 App. 367; 40 Pac. R 076. 
 
 » Trenton v. Duncan (1881), 86 N. Y. 
 221; Kingman v. Graham (1881). 51 
 Wis. 233; Leete v. State Bank (1893), 
 115 Ma 184; 21 S. W. R 788, 793; In- 
 gals V. Ferguson (1894), 59 Mo. App. 
 299; Warner v. Watson (1895), 35 
 Fla. 402; 17 S. R 654; McClain v 
 Abshire (1895), 1 Mo, App. R 754; 63 
 Mo. App. 333; Iseminger v. Criswell 
 (1896), 98 Iowa, 383; 67 N. W. R 289. 
 
 •Trenton Bank v. Duncan (1881), 
 86 N. Y. 221; Curtis v. Wilcox (1892) 
 91 Mich. 329; 51 N. W. R 992; Bray- 
 ton V. Harding (1894), 56 111. App. 
 363; Wachusett v. Sioux City (1894), 
 63 Fed. R 366; Bacon v. Harris (1894) 
 63 Fed. R 99; Baker v. Soavev (1895)! 
 163 Mass. 533; 40 N. K R 863; Syl- 
 vester V. Henrich (1895), 93 Iowa, 489; 
 61 N. W. R 943. 
 
 7 Powers V. Large (1889), 75 Wis. 
 494; 43 N. W. R Ilia 
 
 8 See reference to this statute in 
 ch. XL 
 
i I 
 
 i[ii 
 
 26 
 
 CONDITION NO. 2. 
 
 Statidinff h/.— Terhaps the most familiar form of assisted 
 misrepresentation is that in Avhich an owner of property stands 
 by while it is sold by another person to an innocent purchaser. 
 Since PicJcard v. Sears ^ it might well be thought to be clear 
 that an owner of property would be estopped, as against an in- 
 nocent purchaser of it, were he to stand by and allow it to bo 
 sold without disclosing his title. Ritchie, C. J., of the Cana- 
 dian Supreme Court, however, in a case involving the validity 
 of a tax sale, said : ' 
 
 tnl^^ *° *A®. *8*oRPel claimed. I do not think that the mere fact of . . . 
 .Trlfhl^}^^ ^'® ff "°^ forbidding it or protesting against it would 
 estop them from contesting its validity: nor the mere fact of . . .re- 
 questing D. to attend the sale and bid the property in. . . . All the 
 "foBnr"«ZZ°*' * • '■? ^.'^^U.^^ plaintiffs knew of the mle, and did not 
 
 The learned judge was of opinion that there was no estoppel 
 because the defendant (the purchaser) did not know that the 
 plaintiffs (the owners) were represented at the sale, and that 
 therefore, ' 
 
 "i**^.^^'®"*^*."* T"^ ^^o*) a* a" influenced by what the . . nlalnt 
 iflfs did or omitted. So far as the defendant is concerned there is no ren 
 
 fhSihonHh^' *^ ^r *' "}}' V"^ ''^'^^'^'y none made S the °ntS 
 that It should be acted upon by her. . . .In other wordn *ho h1>'1«Vi 
 
 ants were never deceivedfor in^duced to alter the&TftfanJXtt 
 
 i™«ed'ien^'°'*'*'P'"'"*'*^\- ' * Therefore in tKSS'thJ fwj grea^ 
 Ihf ^ » !f \ V • .f * wanting, namely, that the plaintiflF intended that 
 
 1(1887) 6 A. & E. 469. See the 
 following cases: Proctor v. Bennis 
 (1887), 36 Ch. D. 740; 57 L. J. Ch. 11; 
 Ogilvie V. West Australia (1898), A. C. 
 257; Davis v. Snyder (1850), 1 Gr. 
 134; Robin :nn v. Cook (1884). 6 Ont. 
 590; McDiarmid v. Hughes (1888), 16 
 Ont. 570; Cady v. Owen (1861), 34 Vt. 
 598; WoodhuU v. Rosenthal (1875), 
 61 N. Y. 382; International v. Bowen 
 (1875), 80 111. 541; Studdard v. Lem- 
 mond (1878), 48 Qa. 100; Chapman v. 
 Pingree (1877), 67 Me. 198; Morgan 
 V. Railroad Co. (1877), 96 U. S. 716, 
 720; Wagner's Appeal (1881), 98 Pa. 
 St 77; Trenton Banking Ca v. Dun- 
 can (1881), 86 N. Y. 221; Bradley v. 
 Luce (1881), 99 111. 284; GriflBn v. 
 
 Kinhnia /lOSa^ Kt M.-.U swk. in -xr ■,,-, 
 
 _ ^. — ..,., .J, i-tivii. uj.j; xi ^Tj, w^ 
 
 E. 68; Miller v. Ross (1895), 107 Mich. 
 538; 65 N. W. R. 662; Moreland v. 
 
 H. C. Fricke & Ca (1895), 170 Pa, St 
 83; 82 Atl. R. 684; Bates v. Swiger 
 (1895), 40 W. Va. 420; 21 S. E. R. 874; 
 Camp V. St Louis (1895X62 Mo. App. 
 83; Stephens v. Head (Ala., 1898), 24 
 S. R. 738; Ashurst v. Ashurst (Ala., 
 1898), 24 a R 760; Nodle v. Haw- 
 thorne (1899). 107 Iowa, 880; 77 N. 
 W. R 1082; Kastrup v. Prendergast 
 (1899), 179 111. 553; 63 N. E R 995. 
 
 "The term 'standing-by' . . . 
 does not mean actual presence or 
 actual participation in the transac- 
 tion, but it means a silence where 
 there is knowledge and a duty to 
 make a disclosure." Anderson v. 
 Hubble (1888), 93 Ind. 578; approved 
 in Kuriger v. Joest (1899), 62 N. E. R 
 
 vos. 
 
 2 Flanagan v. Elliott (1886), 18 S. a 
 Can. 44a 
 
W8BEPBE8EKTATIOS — BT WHOM. 
 
 2T 
 
 I stand by and alW anoZ/fn »°''° °' ""« '»""• '"''■en 
 purchaser may ZyZZlb. T^ "f ^'"^"^ «» "'»• '"» 
 resentation, for he acZ unlJ a ""'*'=' "P°" "^ '■"'=™P- 
 vendor. B'ut that i:"^/^ 'iTZr"'"'™ "' "^ 
 personal misrepresentation tS .h ^ " """ '"'° "' 
 
 the misrepresentation ,„othe;„wh?chT ^ '^"'^^' ""^ 
 has assisted, is bevond disnntl »nH ,T , «^'°PPeM«nier 
 does an owner J^"tTZhl °°'^ "J"*'"™ <=»" >«. 
 
 by. and giving no" t7h° t.tirrTrr''''""''^ ^'"""'"^ 
 fully snbmitt^, must be snpp^ ted « at alTr".^" " "'''^'- 
 that the sale was one for ,.V ' ? ' ""^ "" "guraent 
 
 pended upon its egu arUr "nTthatT "'""' ''' ™'"«'-^ "- 
 .ion Of re^ulari,, (^s tow^h'ioh b 'o, e'r m,?h; Z T^'f 
 was, on te as uninfopmofi .. .1. I ^ ' ''°' *"•* '"<'««<1 
 
 the time of tbeZe " ' '^""'^'^ "^ "<" -''^J'«='i»« at 
 
 «on'St:«o?t:i:iSE"™ r "-''" "^ ■- -•'«- 
 
 Judgement inst oitrr^rrrLr '■-''■^ ''--- 
 
 i<f without any aot?oe of tie real Si 
 
 oha»i- whV; v^' u? .'forwards sold 1 
 
 

 n' 
 
 ^i! 
 
 • I 
 
 !i ! 
 
 i 
 
 CHAPTER V. 
 
 CONLiiii^, NO. a 
 
 There Must he a Disregard of Some Duty. 
 
 Introductory. 
 
 Everyone is familiar with the maxim Sic utere tuo vt 
 alienwn nan Iwdas, in its application to property of physical 
 character. It is not dissimilar from Mr. Herbert Spencer's 
 definition of the compromise which the social state imposes be- 
 tween " that positive element implied by each man's recogni- 
 tion of his claims to unim-^eded activities and the benefits they 
 bring," on the one hand, and "that negative el. ..ant implied 
 by the consequences of limits which the presence of other men, 
 having like claims, necessitates," on the other.» His fr "nula 
 is this: "Every man is free to do that which he wills, provided 
 he infringes not the equal freedom of anv other man."* What 
 is the relation of such rules and maxims to the realm of busi- 
 ness and commerce ? 
 
 Man in the whirl and cr iplexity of modern conditions and 
 engagemt ^^ is fu. less an ...dividual .ban a member of a society 
 owing duties to his fellow members. He is a unit, no doubt, 
 but one havin^- relations and associations productive of re- 
 sponsiuilitieo. As in the i . sic^l domain he owes a duty of 
 carefulness and circumspection and behavior, regulated by the 
 peculiarities of his personal a'ir(»umcnt; and a;, m the region 
 of morals he is debto Ith^ gh sometime^- without leg.d en- 
 forceraent)t hisfello;v en . also in tho a fairs of commerce 
 and business he is obliged to observe and ha\ - sorau degree of 
 regard for the interests of others. He cannui always safely 
 "do with his own as he pleases." 
 
 That the duties thus imposed are not absolute but relative to 
 the conditions which may obtain from time to time^" is but to 
 
 > Justice, 87. & N. 781; 26 L. J. Ex. 171= approved 
 
 •See Degg v. Midland (1857), 1 H. 800; 31 L. J. Q. B. 80. 
 
DISKKGAKD OF SOME DUTY. 
 
 21» 
 
 «ned by the necessities of llr a^Wtt, we ?^''°^''"^'^^ 
 «re the relations of life s 1 Av.delr' T °° """ ""' ""'^ 
 
 pi-ities, h„t t'.atthei::ir':s„raU":rar:ra'"- 
 
 «.ak,„g ,.ap.d head as agai.st those of mere LSis: ■ 
 
 In the same sense, Mr. Herbert 
 Spencer, in his ,ta of Ethics 
 
 <pp. 238, 239),say8:- Social evolution 
 has been bringing about a state in 
 which the claims of the indivi lual 
 to the proceeds of hi. activities and 
 to such satisfactions as they bring 
 are more and more positively as- 
 sorted; at the same time that insinf. 
 anceon others' claims, and habitual 
 respect for them, have been increas- 
 ing- . . . Regard for the well- 
 being IS increasing pari passu with 
 the taking of means to secure per- 
 sonal well-being." Again (p. 207). 
 -And here as before each is person- 
 ally interested in securing good 
 treu'montof his fellows by one an- 
 other. For in countless ways evils 
 are entailed on each one by the prev- 
 alence of fraudulent transa.Hms" 
 la his "Ecri -iascieal Institu- 
 tJons (p. 835) in si>eaking of the 
 future of the priest (had he been 
 thinking of estoppel lie would have 
 «aid "judge") he says: "At the 
 same time insistance on duty, which 
 has formed an increasing element 
 >n rehgious ministration, may be ex- 
 pecte.l to assume a marked predomi- 
 nance and a wider range. 
 All matters concerning individual 
 and social welfare vill com. to be 
 dealt with, an, ac.ief function of 
 one who stands in the place of a 
 minister (judges will be not so much 
 that of emnhasizine ni-n««^*„ ^i 
 ready accepted, as thatTf" "dereloi^ 
 mg men's judgments and sentiments 
 
 m relation to thosp more difficult 
 questions of conduct, arising from 
 the ever-increasing complexity of 
 social life." f j ui 
 
 ., l"" "Justice "the same writersays: 
 For let us remember that there is 
 now recognized, by law and by pub- 
 lic conscience, the truth that not 
 only actual physical mischief to 
 others, but also potential physical 
 mischief to others, are flagitious" 
 (P-JO). "With the progress of civil- 
 ization the administration of jus- 
 tice continues , extend and to 
 become more efficient" (p. 208). 
 Thus while in uncivMized societies 
 and in early stages of civiiize.l so- 
 cieties, the individual is left to de- 
 fend his own life, liberty and prop- 
 erty as best he may, in later stages 
 the commnnity through its govern- 
 mentm. and • :re undertakes to 
 aerend them i'o ..-.x " (p. 153) 
 
 Andthepror, has been recently 
 well described by Alexander Suther- 
 land (The Origin and Growth of the 
 Moral Instinct, vol. II, p. 22)- "We 
 kno.v.as a matter of fact, that in 
 the development of human society 
 >t .3 not law V -,ioh gives rise to 
 duty, nor duty which is the founda- 
 
 ttonofmorality; but that morality 
 originates in sympathy; crystallizes 
 
 vaguely into duty; and duty, thus 
 formed, finds a voice and a definite 
 scope in law. Then law by reactive 
 .orce gives new strength to duty, 
 and^^duty adds continuity to sym- 
 

 ill 
 
 8^ CONDITION NO. a 
 
 "An Approphiatb Meastjhe of Pbudenoe." 
 
 Sir Frederick Pollock in his work on Torts says: » 
 
 ^nflllLt JTL*"' ™°4«/'} '*^ o? negligence, with its many developraent«, 
 enforce* the uuty of fellow-citizens to observe, in arying circumstanced 
 Thi'S?'"''? •""'^- ""'"u*"? ""^ P^^denee to avoid cAusi ng harm to oneaSin 
 as noirn^te '" which we are under no such duty appear at this day not 
 .troi^^UK**"** "vf exceptional. A man cannot keep shSp, or walk into the 
 of ?hiLl?^H°"' b«»°K entitled to exj,ect. and bound to practice observance 
 of this kind, as we shall more fully see hereafter. If there exists then a 
 positive duty to avoid harm, mucii more must there exisj whether it bS 
 ^o expressed in the books or not. the negative duty of not dofng wUfS 
 
 ceTon^*'^Tt*tw"«'""™V''"*r TF'^ subject to the ne^sli^«! 
 ceptions. The three mam heads of duty wiih which the law of torts i» 
 concerned, namely, to abstain from wilful injury; to respect the property 
 «uti*'«r' """^ '" T ^'^' diligence to avoid causing harm to othm-F,a^Z 
 elLlfrpH "comprehensive nature. As our law of contract has been gen- 
 eralized by the doctrine of consideration and the action of aaaumpaiTao 
 
 Uon,°on thTcSL'"'' "'°°^'' ''^ '''' ^'^'^^ ""*^ ""'°'" applicationfjf'ac'! 
 
 Widely comprehensive rules of such character find multitu- 
 dinous illustration : You may construct reservoirs or fish-ponds, 
 but — You may burn rubbish-heaps or enjoy bonfires, but — 
 You may build a factory or play a piano, but— » 
 
 What is "an appropriate measure of prudence," the same 
 
 » Pollock on Torts (oth ed.). 23. 
 
 »To remind readers of the general 
 law, the following quotations are 
 given from Underbill on Torts (4th 
 ed.. 16G and 66): 
 
 "Negligence consists in the omis- 
 sion to do something which a reason- 
 able man would do, or in doing some- 
 thing which a reasonable man would 
 not do. Blyth v. Birmingham Water 
 Ca (1856), 25 L. J. Ex. 2ia 
 
 "It is a public duty incumbent 
 upon every one to exercise due care 
 in his daily life; and any damage re- 
 sulting from his negligence is a tort 
 
 "Thus where the plaintiflf was in 
 the occupation of certain farm build- 
 ings, and of corn standing in a field 
 adjoining the field of defendant, and 
 the defendant stacked his hay on the 
 latter, knowing that it was in a 
 highly dangerous state and likely to 
 catch fire, and it subsequently did 
 ignite, and set fire to the plaintiflf's 
 
 nrnnart.v if nrao koM H'^t. 4.1,. 
 
 ant was liable. Vaughan v. Menlove 
 (1837). 3 Bing. N. C. 468. 
 
 "So where the defendant intrusted 
 a loaded gun to an inexperienced 
 servant girl with directions to take 
 the priming out, and she pointed and 
 fired at the plaintiflf's son, wounding 
 and injuring him, the defendant was 
 held liable. Dixou v. Bell, 5 M. & S. 
 
 lea 
 
 "A master is bound to take reason- 
 able precautions to insure liis serv- 
 ant's safety; and if, through the 
 absence of such reasonable precau- 
 tions, or through the breach of some 
 duty incumbent on the master, or 
 through the personal negligence of 
 the master, the servant is injured, 
 the master will be responsible. Or- 
 mond v. Holland (1858), E. R & E. 
 103; \shwix v. Stanwix (1861), 80 L. 
 J. Q 183." See also Black v. Christ- 
 churuli, eta (1894), A. C. 48. 63 L. J. 
 P. CLSa; 
 
 UCItfUU- 
 
DI8RK0ARD OF SOME DV'tY. gl 
 
 learned author discusses in a passage to which the present 
 writer desires to subscribe:* »^u lae present 
 
 ;nu;?ileffot^e^^^ n,o,t clear,, 
 
 the wronj? itself is failure to act with rtnff^t' • ?l *^®?^ *'"^ substance of 
 •the omission to do 80.nethin?whidi a reaSw' ^' ^'^ ^^^ ^^"ned «* 
 cons.derations which ordinarHy ree late tifron^^^ man guided by those 
 would do; or doinR something l^hi^h 1 i"® condu'-t of human affairs 
 Bot da' Now a rlZZile^^ano^^l^Af^^^^^^ man woild' 
 
 mate of probabilities. If men went a bon^ f « only by a reasonable esti- 
 every risk to themselves or othe^ whiS mi^h^^hf-* themselves against 
 be oonce ved as possible, humanVfflirs co.rl A ^ *"8e"iou8 con iectnre. 
 reasonable man then to whose heh^vI^rtJLj^. ^ ""f"'^^ ^^ «* all. The 
 duty will neither neglect St he can forpn««V° ^°°\ *^*'^« standard of 
 anx.ety on events that are ffely possible Htw.f.'°''?'''^L?'°'^ ^'^^t® »"* 
 by the measurft nf «.i,„^ „!^_-Z ?°^^!"'e- «e will order his precaution 
 
 by the .measure" of"w| at aS'i ffi v i n Si V' "^'^'- 
 This being the stanrlnr.l itTji 1, ^.-'? ^"^ known co 
 
 within ce?Uin fXXXi^J^l^Vl^^^^^^^^ -«« (notbeini 
 
 within certai. 
 is not such as 
 
 course of things. 
 
 and guard against that wh olf no reasonlwe tn ^''IS'"'^ *° anticipate 
 appears to contain the onlv rule tenable on «ri^^" i'*^''"^** **P«ct to oobur. 
 founded solely on negligence 'Mfsphi^f PJ.'."^:'P'« ^'^''^ ^he liability in 
 have been foreseen. afrSh no rL<,nLh?J''*' '^^"''^ ^^ "° possibiHtv 
 pated.' may be the ground of leaSl comn.nifi P*"°", ^""''* ''^ve antici- 
 ceptional severity, and such rKfnr^il^^*'°° ""'^^ ^o'"'* ru'e of ex- 
 
 Application oi- the Pbinciple to Estoppel 
 The present writer believes that this prineiple-" Observe 
 
 h.,r^ ,r *''*.'='"'' corner-stone not only of the law of torts 
 
 thatl 'r.°''^'°PP=' '>y "-i^'ed misrepresentaZ; and 
 that the contasion we are to meet with in the present chLter 
 « largely duo to lack of recognition of that fact ^ 
 
 TwomamstumWJngbloeljsareenoountered. First althon<rh 
 n vanonsdepartments of the law to which estoppcUs ^3 
 
 factor yet other reasons for the decisions than the true one 
 are put forward and accepted as satisfactory. Secondly Zo 
 are many cases in which all possible application orthe prLcT 
 
 -On Torts, 630. This definition 
 has mot with very general approbar 
 
 tioij in the United Statea Jaggard 
 on Torts, 810, n. 
 
32 
 
 CONDITION NO, a 
 
 pie is completely denied. An effort Avill be made to show that 
 the principle has been in some branches of the law of estoppel 
 in reality accepted; to uphold the principle as one necessary 
 to the condition of commercial nations; and to urge its adop- 
 tion in certain lines of cases from which it is at present ex-, 
 eluded. 
 
 But first observe the relation and application of the princi- 
 ple in hand to estoppel by assisted misrepresentation. In other 
 words: How can the duty of observing « an appropriate meas- 
 ure of prudence to avoid causing harm to others" have any 
 bearing upon the law of estoppel? 
 
 Suppose that a mortgagee hands over the title deeds to the 
 mortgagor, and that the mortgagor fraudulently deposits them 
 with a banker as security for a loan. The mortgagee may 
 now be estopped from setting up his title against the banker; 
 and the reason is that he has assisted the misrepresentation of 
 unincumbered ownership made by the mortgagor— he has 
 made that representation credible.* But we cannot arrive at 
 this result without bringing our principle into operation as a 
 major premise. We must say that there is a duty to " observe 
 an appropriate measure of prudence to avoid causing harm to 
 others;" that the mortgagee in handing over the deeds com^ 
 mitted a breach of that duty (for he knew that he was equip- 
 ping the mortgagor with a simple method of defrauding other 
 people); and that for such breach of duty he is estopped -for 
 
 UUties which may of necessity, or in reasonable probability, inflict S- 
 The rule applies that 
 
 iccts that dutv; and when tha mL„ ,„ iK' .T o' J"? business, neg- 
 
 deny tlfa he aSe^iS the Sfner in ^^ ^h t) ''"T," " "°' Permitted to 
 such fraud to believe him toTt!"» * '^ """'^ person was led by 
 
 * 
 
 PPLICATION OF THE PkINCIPLE TO EsTOPPEL DeNIBD. 
 
 It is Of the greatest importance that this relationship be- 
 tween duty and estoppel should be clearly appreciated. From 
 
 I ^0A manv c'l-kitlnM ^^- « . 
 
 — _. ,,„, vaocs rcicrrca 
 
 to in chapter IV. 
 =! Juggard on Torts, 885. 
 
 3 Stepiiens Dig. L,aw of Evidence 
 (3d ed.), 124 
 
D18REGAED OF SOME DUTY. 33 
 
 imponmt case > Wildo, B., said : " ^"^ 
 
 direotfons. The action f°rSl?«S^,Z'.'r,'"'' Pf'^^'' '" SiifeS 
 f^tiOD towards the oiaintiffa t? ..™ P'oceeds from the idea of an ohli. 
 the plaintiff', injary. The doSriS! S'V"" ? ■"■«»<"■ »f «!» obligatton ti 
 
 of his own misfortune, andSchiriiZr^'P'"""" *»''='''« autbSj 
 
 -. . . It would be verv fiiUi^iX!!^ tH^^L^ '"* consequences on other<L 
 
 ng an estoppel or noS/afc wheth^n ',"^ ""."f "i'oumstances irS 
 
 tor negligence would li°> ^ "bether, reversing the parties, an action 
 
 r^ltlt"'"'^'""''!.'"' '' ^''"' ™^'"= Does estoppel by misreD 
 resentation depend upon breach of duty 8 The LrnL h "^ 
 
 just quoted) would answer in the ..jL^'Z ItwIX" 
 
 »e estopped. Zt ^^rC ZZ^ZlZt^tl^y fht: 
 you were the author of your own misfortunerand I^t t 
 charge the consequence of it upon others. But thi3 is not cor 
 
 L^st- ;i;"/rhir;'rTsttrth:;t^^ tr 'j^ 
 
 bystander is estopped (if at=all), not 2:^X2X^11: 
 o his o>™ misfortune, but because he was the author or part 
 
 oh r hteruT,'" r°""'-- ^"' " "«•"='«« ^ caused to'au 
 other there is no legal responsibility for it in the absence of 
 
 the breach of some duty owed to that other; there must there 
 
 ore have been some duty; and thus we arrive at the nee ssTtv 
 
 for the e^iste-ce of duty as a requisite of estoppel. I," acco f 
 
 • X' I I'll"" " r ""* '" "'« Ho»se oTLords:' 
 1.C acSlraJdTsWeT;''.''dVe;S 'Sl^ "' '^ ""'" " "- "r "•", to 
 
 1 /^ ^_ 
 
 'Svvanv.N.B.A.(18G2).7H.&N. 
 68o; 81 L. J. Ex. 437. Much can be 
 said m favor of the altc^rnative t, jt 
 here suggested. It would be very 
 anomalous if certain negligence 
 could be penalized hv esfnnnoi. i.,,*. 
 
 See the discussion in chapter XVI' 
 and Evans v. Bicknell (1801). G Ves! 
 173; Lynch v. Murdin (1841), 1 Q. B. 
 
 ^J*«n]sden v, Dyson (1S8B;, L. R. 1 
 HO. And Bee Vieie v. JutJson 
 
 that the negligent person vvould go (1880) 83 NY S- N V"f "" 
 
 free were the circumstancoH not RDtherv nsfi-. ,nt '^r xf'' ^"''"^ ^• 
 
 such that estoppel would hurt him. St S/ ^^* '''^ ""■ ^' '''' ^* ^' 
 8 
 
84 
 
 CONDITION NO. 3. 
 
 Try the alternative: that there is not, in a case of estoppel 
 by standing by, the element of duty. We must then say that 
 the bystander did perfectly right in silently permitting the 
 fraud to be committed (for there was no duty incumbent upon 
 him to reveal his title), and for doing that which was perfectly 
 right he must lose his property — must be estopped. That is 
 not very satii^factory. 
 
 "Before any person can complain of negligence he must make out a' 
 duty to take care: and that duty can only arise in one of two ways, namely, 
 either by contract, or by the law imposing it."l 
 
 " A person cannot be said to be culpable in not doing a particular thine, 
 unless It is his duty to do it." 2 * 
 
 It is equally clear that in all other oases of estoppel there 
 must be the element of breach of duty. In all of them it is not 
 that the estoppel-denier has been the author of his own mis- 
 fortunes, but that he has got some other person into trouble. 
 In all of them he, upon the facts, is unhurt; and what we have 
 to do is to find some reason for saying to him : " You must not 
 assert these facts." The only reason vtc can give is that upon 
 the faith of his misrepresentation or assisted misrepresentation 
 of the facts some other person has changed his position. But 
 if he was perfectly right in misrepresenting — that is, if the 
 law did not impose upon him any duty not to misrepresent, or 
 to aid in misrepresentation, there is no reason (known to the 
 law at least) why he should not assert the facts. If he has done 
 something (legally) wrong, then penalize him. If he has been 
 silent when he ought to have spoken, then, and not otherwise, 
 compel silence when he wishes to speak. 
 
 The Principle Already in Operation. 
 
 It has been said that the duty of " an appropriate measure of 
 prudence " has been allowed (although frequently unconsciously) 
 to govern the decision of cases in various departments of the 
 law (besides that of tort). For example, it is your duty in draw- 
 ing a check not to leave tempting spaces in it; for thereby 
 your banker may be defrauded.^ It is your duty not to allow 
 your mortgagor (except under special circumstances) to have 
 the custody of the title deeds; for thereby some money lender 
 
 1 Per Bramwell, J., in Dickson v. Cooke (1848), 3 Ex. 654; 18 L. J. Ex, 
 Reuters (1877), 3 C. P. D, 5; 46 L. J. 114, 
 
 ^- P- ^*'' 'Young V. Qrote{\m\ 4 Bing, 233; 
 
 3 Per Aldersou, B., in Freeman v. 12 Moo. 484; 6 L. J. C. P. 103k 
 
 "xmimSmmiSSm-iSSSli 
 
 SttimMexmfiammeimnmr)^ im.s>msi£^?ar, 
 
DISfiEGAED OF SOME DDTY. 35 
 
 may be defrauded.. It is your duty not to' permit others to 
 have possession of your « negotiable " securities, for the" bv 
 purehasers of them may be deceived.' It i, your duty not to 
 furnish your trustee with evidence that he is the btnefl ill 
 owner; for therewith he may cheat some innocent puZfr 
 It s your duty not to permit your agent to have an apparent 
 authority larger than his real authority for therVv otC 
 may be tricked.. It is your duty, when «tilg from parted 
 ship, to give notice of that fact; for otherwisf credit may be 
 furiXl'r'"'';'^™' '=°""°"«' membership.. ItTsTou 
 
 beuL, i^K f * "r™" '° "^ "■»' " '« that which you 
 be leve t to be; for otherwise some third person may be led to 
 believe that you have agreed to that which in reality you have 
 not even considered.. It is sometimes by usage your duty o 
 e^mme an account delivered to you, and to gfve timely 2ie 
 of your objections thereto; otherwise the other party «! 
 
 taken ' t^t " "^ r"'"""" ""'"" "« -"'" »"" ™S ™ 
 mel' whch « h" ""'^ '» ''""'"'^ '=''™ "i"" '^fe^nee to docu- 
 Zm "for o h 7*°"" ™™"«'» '"''"'"S attached to 
 
 1«1'.. « i** P"'™' "''^'y t° deal with the docu- 
 
 ments" may suffer damage.' 
 
 The law of estoppel is the legal sanction for all such duties- 
 and provides for their disregard the penalty of silenceln re' 
 pect to all rights and claims which, ..t'the pLer time o„X 
 to have been put forward. ' ^ 
 
 But Otheb Eeasons Givis-. 
 The application of the law of estoppel to many of these cases 
 has not, however, been sufficiently observed ; Ld in its aT 
 sence. or even sometimes in declared opposi ion to it other 
 reasons have b,en offered for the results arrived at iffor 
 example blank spaces nave been left in your check Tt'lZ 
 been said that you thereby authorized theVuTee to fllUhem 
 
 * See oh. XIX uq . _ 
 
 "See ch. XXIV. " Ambulatorv » 7n? .r 
 
 ought to be 3ub«tit«tfd for 'So. m ZZZl " T'' ^''''^' ' ^''' 
 tiable," ^ „ ' ^^^^her v. x\forgan (188C), 117 
 
 T T Ct Art rN _ 
 
 *Seo oh. XVII to XXVL '"'' '^' .'^\ '='^^ reren-ucoa to these 
 
 * See oh. XXVI °*^*^ '" *"''' '^^• 
 
 'See ch. XXVli. 1 /n T'r.*Y/" '^'""^"^ ^"^^*""" ^^^SS), 
 
 11 Q. B. U 770; 53 L.- J. Q. fi. 690, 
 
86 
 
 CONDITION NO. a 
 
 up ' — a plea that would not save the payee from a charge of 
 forgery, for it is not true. If you allow your mortgagor to 
 have the deeds and thus to pose as unincumbered owner, the 
 reason given for your postponement is that "a second mort- 
 gagee who has the title deeds without notice of any prior in- ^ 
 cumbrance shall be preferred;'"* a proposition which, as we 
 shall see,' holds good only where, according to the principles 
 of estoppel, it ought to do so, and in other cases is falsified. If 
 you intrust your negotiable securities to a broker who trans- 
 fers them in defiance of your instructions, it is said t' t you 
 lose because « the law merchant validates in the interest oi com- 
 merce a transaction which the common law would declare 
 void;"* and that "the ordinary rules of the common law are 
 made to bend;"» whereas the ordinary rules of estoppel are 
 quite sufficient for the case.* If you permit your agent to have 
 an apparent authority larger than the real, it is said that you 
 are responsible for the agent's acts because "the authority of 
 the agent to perform all things usual in the line of business in 
 which he is employed cannot be limited by any private order 
 or direction not known to the party dealing with him;"^ 
 whereas the truth is that you can limit him as much as you 
 like, but that if, notwithstanding such limitation, you allow 
 him to act as though there were none, you are estopped from 
 setting it up. And if you execute a document which does not 
 reflect your true agreement, it is said that one sort of fraud 
 upon you will render the document void, whereas another will 
 render it voidable only — a bit of lochomachy that will not 
 stand investigation.^ 
 
 Common Characteristics — Estoppel. 
 Gathering all such cases together, we find that they have 
 this strong common characteristic, that there has always been 
 1 Montagu v. Perkins (1853), S3 L J. a Ser post, ch. XIX. 
 
 ^"2^ ^^':-n ,, *®"''^" ^- N. B. A. (1862), 7 H. & 
 
 8 Goodtifcle V. Morgan (1787), 1 T. R. N. 031 ■ 31 L. J. Ex 436 
 763: Layard v. Maud (1867), L. R, ftPer Byles, J., in S«-an v. N B A 
 
 4 Eq. 897.406; 86 L. J. Ch. 609; (1868). 3 H. &C. 185; 38 1! J Ex. 87a 
 Hunter v. ^Walters (1871), L. R 11 « See iw«f, ch. XXIV. 
 
 Eq, 816; 41 L. J. Ch. 175; Spencer 
 
 J«i T- » 
 
 Ch. 603; Lloyd v. Jones (1885), 39 Ch. 
 D. 880; IJ4L. J.'Ch. 98!. 
 
 ^Smith's Mer. Law (8th ed.), p. 575; 
 ana see puat, ch. XXYL 
 8 See oh. XXV. 
 
 "' "^^^'*^jwyffi'^B7JSSW^yjv\y^'!'^)?^^ 
 
DISKEGABD OF SOME DUTY. 
 
 37 
 
 some fraud perpetrated by which one of two innocent persons 
 
 frand?/"H"'/'''/'"P'''^"'""^ innocent person ha^s been 
 fraudulently transferred to another; the obligation of one in 
 nocent person has been fraudulently passed on to, or created 
 in favor of another), and the ,uestion.is, Who i; to suS 
 a dutv ;^"nf «"ch cases, the law of estoppel replies: There is 
 a duty to observe "an appropriate measure of prudence to 
 avoid causing harm to others; » and if, in breach of this duty 
 one person has assisted the misrepresentation of another - 
 supplied that which has made it credible -he ought to be 
 
 caused '' "^"'"'' '^' P''^'" '" ^^'"^ '^^ ^^^ ^^^ b^<^" 
 
 Egoism and Altruism. 
 
 Coming now to the departments of the law in which the 
 
 application of the principle in hand has been denied, let it be 
 
 observed tnat there are two views which may be taken with 
 
 reference to the conduct of affairs: the egoistic and the altru. 
 
 nT' ^'Z ^""^ '^ '^' ^^'^^'' I «^ay do as I please with my 
 own, and others may look after themselves. Actin- upon thi. 
 
 and negotiable instruments with whom I choose; allow mv 
 agent to misrepresent his authority as he ihinks tit; stand by 
 as an indifferent spectator while other people assume to sell 
 my property ; and if any one is injured I shall tell him to pur- 
 sue the one who defrauded him with such civil or criminal pro- 
 cess as IS appropriate. ^ 
 
 Following the other view- the altruistic -I shall have a 
 care that I am not made an accomplice, or even an unwitting 
 instrument, m frauds upon otliers; I shall refuse co give on 
 portU|w,; o occasion for misrepresentation; and, profiting by 
 expcnonce of recurring rascalities, 1 shall so use my -mn liber- 
 
 of^:^^:::::'''''' '^ ^^^"^ ^^'^^^ ^^ ^'^ "^^^^^-'-- 
 
 nl^' ^^Y'^l""- \'7 ""' ^^'^"i^ablo by law is necessarily the 
 outcome of a highly developed state of society. In earlier 
 stages the idea would not only be unfamiliar, but would be op- 
 posed to all the analogies of the time.^ It Lus emsrg«a (n= have 
 
m ■ ;l^ . 
 
 f 
 
 38 
 
 CONDITION NO. 8. 
 
 Other ideas) from observation of the injuries worked by its dis- 
 regard But the induction is not yet complete, and although 
 in the future some finished and detailed code of conduct as ap- 
 - plied to the transaction? and affairs of business and commerce 
 may be formulated, the authorities as yet provide none such. 
 ±or the present we must be content when (as is not always the 
 case) the broad law of reasonable care for the interests of others 
 IS held to be incumbent upon us. 
 
 The Altruistic Yiew Advocated. 
 
 Speaking generally, the vic.v advocated in this work is the 
 altruistic. The principles which obtain with reference to phys- 
 ical relations ought, it is believed, to regulate business inter- 
 course ; and the language of Sir Frederick Pollock above quoted ^ 
 should be imported into the law of estoppel : 
 
 forL?tr du\y™f1Xl'.St^^^^^^^^^^^ '^ ™?"y developments, en- 
 
 appropriate nfeasure oV/rSS\7atTckLVnXK^^^ 
 
 In the realm of torts it is plainly seen that if the owner of 
 hay (m a highly combustible condition) will unnecessarily stack 
 It against a neighbor's barn (although on his own land), he 
 ought to be liable if it cause the barn to burn.^ But it is bv 
 no means so clearly recognized that if the maker of a blank 
 note (a highly "negotiable" document) will so carelessly deal 
 wi h 1 that It IS fraudulently made use of to filch money from 
 a third person's pocket, the maker ought to stand the loss. It 
 18 an accepted principle in torts that 
 
 peZr o"'p;op"e?ty oTothersfteld aS'"7, "^/^"^^"^ "'*'^ "^"^ *« «'« 
 measure of LuSion'^togSaMlgai's^^^^ ^°' '''' ^'^ of a certain 
 
 large for direct participation in gov- 
 ernment? Prof, Seeley makes an- 
 swer: "You might as well ask, Why 
 did not Augustus discover Amer- 
 ica?" "Introduction to Political 
 Science," p. 164 
 
 * Ante, p. 30. 
 
 ^Vaughan v. Menlove (1837) 3 
 Bing. N. C. 468. And see the prin- 
 ciples laid down by Cockburn, C. J 
 
 !foZ*"^,!?*° -!• '^^^ ^«'e Ry. Co! 
 \z~jv}, o a.ts: i\. OSj; 59 L. j. Kx 247- 
 •nd by Bramwell, L. J., in Powell 
 
 V. Fall (1880). 5 Q. R D. 600; 49 L. J. 
 Q. B. 428. 
 
 «Dean v. MoCarty (1846), 3 17. G 
 Q. B. 448; Buchanan v. Young (1873) 
 2a U. C. C. P. 101; Gilson v. North' 
 Grey Ry. Co. (1872), 83 U. C. Q. B. 
 138; Furlong v. Carroll (1883), 7 Ont. 
 App. 145; Booth v. Moffatt (1896), 11 
 Man, 25; Owen v. Burgess (18?Q), id. 
 75; Citizens v. Lepitre (1898), 29 a a 
 Can. 1; Makin.q v. Vicrrf^tt- /iano\ an 
 a a Can. 18a ■""=="" -"^''" 
 
DISREGAED OF SOME DUTT. , 39 
 
 But it is alleged that a company owes no duty to anybody to 
 take care of its seal, so as to prevent the fraudulent execuLn 
 of documents which may ruin other people.^ 
 
 Various Cases op Duxr. 
 
 is f dT o?ti^' f '""^ '° ""^^ " '"'^ •'«'" ''^W "-at there 
 is a duty of carefulness not to offer obrions opportunities for 
 
 sentatives of the various classes maybe met with in their 
 appropriate places throughout the work. A som that com 
 prehensive summary, however, will be instructive and wH 
 rJltrit T"-' '- '"- "' '^° altruisSctw'-:! 
 1. Osiensible Ownership.- Such view has been widelv ac 
 
 -rnr owitti^^f ~ "^'- «'- -»--«^ 
 
 (a) An owner of property may not stand by and permit an 
 innocent person to be deluded into purchasing property to 
 which the vendor has no title. ^ property to 
 
 be aSraLTstt^^^^^^^ '^^ ^^^ fallen, it was my duty to • 
 
 but KpX"t dSS'To^'ff "?^^^^^^^^ not onlytheopportunity 
 
 someone is relying thereon and i^^K^ ^^^'"^ ^''®"* '""s' Jcnow that 
 would not if if tr^uth wire knotn'to h^^'-^''^^ °' «''«»' ^o act. as he 
 
 aUe/hirfSoi'olf^hi' Sh'l!?a*fa1t'^^htS ^"''^ '^*"'' T' -^^-^ 
 afterwarais take advantage of that altPmHon-i,! f.*" contradict, cannot 
 m Freeman v. Cooke, whfn ?t was sa d Sm/ J'^' ^K'^^^f ^^ corrected 
 another to act without objecth^l wh^n^^^ z,."^" ^*^"<*^ ^^ and allows 
 mse there is a duty to apealThislilen^ InT^ ?^ TTu"^^ ^''"^^ ^^ other- 
 he proposed the act himseit"" " '^ preclude him as much as if 
 
 JaI ^ '^/['^^^ ^'""P^"^'^ ^''""'^' ^y '"intake, two delivery 
 
 9t::xro7rr„d^f^riitrrmi:i 
 ::;rh^:(Ztt;°t[ori:r'^"''^-^----^ 
 
 Spa 'iti'ftvi 
 
 ^■^.*n .!,,.„„, .a, sr„r;^^H=:«^,t'rv:^c " 
 
 .• Al,e„-v. Sh.„ (,88,, e, N. H. »,, """'i' ^^ ? T.l ^^T. '' ?- 
 
 <3UuiK Vieie V. Judson, 83 N. Y 32- 503 '" ''"'"' "'*" ^"'°^" ^'*^" 
 
 Taylor v. Ely, 25 Conn. 250; Marshall 4Polak v. Everett ^87fl^ 1 o n t. 
 
 -• Pierce, 13 N. H. 127; Batchelder 678; 45^ J Q B 869! ^' ^^ ' ""' 
 
40 
 
 CONDITION NO. a 
 
 ^oi'alZ'XVcum^^^^^^^ °''*'^ «''«'» *o ^^^^<^»*o <^ndper^ likely 
 (c) Por the same reason, a company owes a duty of careful 
 n s in issuing certificates as to the ownership of'^sh ""1^ 
 
 sentation. They are intended « to be acted upon by purchas- 
 ers of shares in the market." » ^ purcnas- 
 
 ia^ttem?riTh'V?'''"°^^ '^ '^"'^ "^^^^^°^5 representation* 
 m tnem are to be taken as having been 
 
 ad"Snce\^We7aUh o'uhl™..r"^ °' ''"^•"««»' '»>ght th.nk fit to make 
 And there is therefore a duty of carefulness with ree-ard to th^ 
 
 ZTonl^t'"''''''''''^'' ^^^'^^^^ persons tr^llX 
 may be offered in support of representations of ownership of 
 
 suS dltnrsf "'""" '° "^^^'^"^^ -->^«' -<^ other 
 2. OitensiUe Affenoy.-The remarks just made with refer 
 
 all:'T,efr"^^^^^P, T ^^"^"^ ^PPlieableTjS: 
 or agency Every one must observe such reasonable Drecau 
 ions as will prevent his complicity in misrepresentadon as ta 
 
 tha7tt "'' ''u" "*^"''^^^ '^'^'''' It is upon hi "roLd 
 ha the reasonableness of the Factors Acts can be upheld and 
 hat the appearance of larger powers than those really'con. 
 ferred will often work estoppel.' ^ 
 
 3 ZnlUng into Security.- U will be observed that of the 
 instances above referred to, some are cases in which active mt 
 representation is forbidden, but some also are cases in wh^I 
 activity IS imposed as a requisite of reasonable soda co duct 
 It IS in such instances, of course, that the altruistic theory finds ' 
 ts highest development: calling as it does, upon every one ta 
 
 If need be) an appropriate measure of prudence to avoid caus 
 
 1 Coventry v. Great Eastern Rr. 
 Co. (1888), 11 Q. R D. 776; 52 L. J. Q 
 a 694. ^' 
 
 2 Re Bahia (1868), L. R. 3 Q. R figi; 
 37 L. J. Q. a 163; and see cases cited 
 with this one in ch. XXII. 
 
 3 Per Lord Herschell in Balkis v 
 Tomkinson (1803), A. C. 403; 68 L. J. 
 ^j. a. liii. 
 
 "Seech. XXir. 
 
 «Holton V. Sanson (1862), 11 U. a 
 C. R 606. And see ch. XXII. 
 
 'Prospectuses and company re- 
 ports, for example. See ch. X. 
 
 ifioo «U WITT 
 — *— *» it. ^X T i, 
 
 »Seech. XXIIL 
 
. DI8REOAED OF SOME DUTY ' a^ 
 
 sistently as the writer thinks it howrr., "'"""'S''- ""=»■>- 
 a bill ia which the drawer hi Uft "'^'''.■'""i may accept 
 
 obrious temptation tH^dln, •''*'''' '''i''''' ""'" "•« ""o^' 
 may tell the'victim that "°"''" °' ""' ''«'°"'". »°d 
 
 modern affairs ^' ''°'' '°d"P«°sabIe feature of 
 
 of a firm retires from it, he is under "^d't J'"' •" "™^'*' 
 
 :'MS:;ttt^T"r:ri4"^--"-^ 
 mc„u^,riawfh:rsire:ii^ix^x irr ''T'- 
 
 a partner might havi retired since ie I« f ■"°''' "'"' 
 
 should have inquired." No dolt tht ''^' "•''"™>="»'' : they 
 said if the ego?stic view were the c„ re r ne^'k'T;^'^ "^ 
 
 -.usingfartoirrmrrerri^tr^-? 
 
 (1881), 6 App. Cas. 82. And see cas-s 
 cited with this one in cli. XI 
 
 a^'^w V*"*?'"" (^^^2), 7 App. Cas. 
 oo^'^L. J. Ch. 915. 
 
 I J-^"^^^ " tii»ster Signs a bill of 
 
 ?1l? ^\«°°'^' »°* P'^t on boaru. 
 It IS heid that the ownere of the sbip 
 
 are not liable to an innocent trans- 
 
 ttTf ^'^t''"- I' ^« «-id that the 
 transferee knew that the master had 
 authority to give bills for goods 
 r-r-- — -v* asiu cnas ne shuuld 
 have inquired. See the subject dis- 
 cussed in oh. XX VL 
 
42 
 
 CONDITION NO. 8, 
 
 5. The following general statements of the law are not too 
 comprehensive: 
 
 "Whenever one person is by circumstances p. iced in such a oosition 
 wmS/«fnn *° another that every one of ordinary sense who diKnk 
 iTu nwn ,.^nS® recognize that if he did not use ordinary care and ski in 
 «r ol^n TrJ'V;* T^ '■^«'""'* '° *''«^« circumstances hi would cause dan! 
 ger of injury to the person or property of the other, a duty arises to use 
 
 wfy «'»'•« an<i 8kin to avoid such danger." i 
 othpr i®r«nn F^'^,'^ perceives that, in a matter of interest to himself, an- 
 other person s acting, or about to act. or likely to act, in a mode in which 
 asa reasonable man he would not act or be likely to act if he knew the 
 
 Sreaffac.?," ^r*"* °" ^'^^P}^^* of the former to inform he Kr of 
 ?hf *.l *•:•*' ''he IS aware of them, and if the relative position in which 
 the two parties stand towards one another is such that the latter mieht 
 
 iwa?e StLm!'-^* '^' '^''"" *° '"" ^'"^ ^^' '^"^ ^^«^« if the former'"wl5e 
 
 Spaces Carelessly Left in Documents. 
 
 These opposing views (egoism and altruism) have come into 
 very notable conflict with regard to the question whether a 
 party to a negotiable instrument may safely leave in it spaces 
 whi( r, n-;;(y easily be made available for increasing da amount. 
 Thti iiUM?j 5ct has been elaborately discussed in the very recent 
 castJ of Jhholfield v. Londeslorough^ and in it the old case of 
 Town, J /. Grote*' was once more dissected, explained, supported 
 and condemned. Let us consider these cases somewhat closely, 
 and more especially the later of the two, for by it the prin- 
 ciple of egoism has received a predominance which is not only 
 opposed to the decisions in many other analogous cases, but 
 which the present writer believes to be highly injurious to 
 commercial intercourse. 
 
 (1827) Toung v. Grote—" that fount of bad argument." » A 
 depositor in a bank signed a blank check, and left it with his 
 wife to fill up as required. The wife directed a clerk to fill it 
 up for £52.2. He did so and showed it to her. She then in- 
 structed him to get it cashed. He increased the amount of the 
 check by £400 (inserting the necessary figure and words in 
 spaces which he had left for that purpose), and drew the larger 
 sum from the bank. It was held that the customer and not 
 the bank should suffer the loss. 
 
 I Heaven v. Pender (1883), 11 Q. B. 
 D. 509; 53 L. J. Q. B. 703. 
 
 2Cabab6 on Estoppel, 81. 
 
 •(1894) 3 Q. B. 680; 63 L. J. Q. B. 
 
 s yi-.-tr'j; i 1^-. x3. ooo; 04 Jb. J. Q. B 
 
 293; (1896) A. C. 514; 65 L. J. Q. B. 59a 
 
 *(1837) 4 Bing. 253; 5 L J. C. P. 
 165; 13 Moo. 484. 
 
 »So Esher, M. R., in Scholfield v. 
 Londesborough (1895), 1 Q. R 543- 
 64 L. J. Q. B. 393. 
 
DISREOARD OP SOME DCTT. I ^g 
 
 ion as to theground uS "h l^o: • ^w" "^ °' "P'"' 
 tions have been madiToo .^ *u ^ P'^oceed , (2) various sugges- 
 
 have pr^^eedCi; a'd (3 o tTud" T" r""" '^'"^ ^'"'»"' 
 rigbt grounds wonld hav fed ^''»-;fP'«;"l7 declare that the 
 
 decision, although someXt ^^T" """"■"'i""-' The 
 
 condition that i^t coXu^'to .necr"" "''"''^^* ""' ™'^ ^ 
 
 oS^dS^frttet lT' r^ ~"'"«'°' 
 thoritativoly declared the h»ri . ' '" "''^ ■=»'« h"^ »- 
 
 «ned to'checiTs! andres ofal^rbiiTs^r'^ T" "« "°°- 
 case was one in which a dmwer „ ah ' ■-■*■■'' 
 
 N. B.^*''a85rrST.4\^^^^^ f;fV'-r'^^^°^^^^^-*'^« House 
 L. J. C. P. 113; (1862) 7 H & N 703 tL^ v '' '* ^'"' ^ "^'"'^' ^e found 
 81 L. J. Ex. 425; 8 H. & C 175 32 ^„lJ°"°^ ^^ ^''''*« ^^« "«' i« ^"7 
 L J. E .. 873; Sooi^te v. MetroDontan T^ "^'f PP^oved, and it has been rec- 
 (1873). 27 L. T. N. S. 8497Ha,i?ax v iXtV"^.'"^ subsequent cases'' 
 Wheelwright (1875). L. R lOEx I83 J°l*f^°'-'i<^™«-orthsaid: "There- 
 44 L. J. Ex. 181: Baxendale v S thl;. '°^ *^* "'^^ °^ "^« ^«-t«. 
 nett (1878), 8 Q. R d. 533- 47 K J ! """^ '^ ^^" sustained, and 
 
 Q. B. 634; Mayor v. Bank of fiLLd i?^'"" *° ^^""^ ^^'^ ^^» ^^^^^ded." 
 0887). 21 Q. a D. 163: 57 W Q J' ^J ^^'-^.^^'^ fo"owed in Halifax 
 B 418; Scholfield v. Londesborou.h 183 ill Tf ^'^^'^' ^ ^ ^« Ex. 
 (1894). 2 Q. a 660; 63 L. J. Q. B 649 I t t Z^^'^- ^^^- ^"^ ^» Mayor 
 (1895) 1 Q. a 536; 64 L. J. Q fi ,fi?""\"' ?"«'*°'* (^887). 81 Q. a D. 
 293; (1896) A. C. 514; 65 L. J. | b th! hi ^h ""• ?" ^ *^'' ^^^' J- ««'d 
 593; Greenfield v. Stowell (1877) 123 !rl ^ •??^''' '* "^*« »"o«* P^op- 
 Mass. 196; Worrall v. Gheen (ISef) ^X '■^''^" See also the referenc^ 
 39 Pa St 388. ^'^^^^' '^ Y^f^^^o v. Bank of England, 22 Q. 
 
 ^in Baxendale v. Bennett (1878). 8 D 243 Is f i^nS' ^ ^^= ^^ «• ^' 
 a n. saa. ^-y T T ^ ^ _. .^ _'"> <^ ^- -^43. 58 L. J. Q. fi. 857; (1891) A C 
 
 2-RD.533;47I.j.Q.a62TBrett 
 L. J., said that "the observations 
 
 Z/ I ^^^ ^"^' '° ^'^"'^ of Ire- 
 land V Evans have shaken Young v 
 Grote." But this is a mistake^s 
 
 s7h.rr!^!"'^^^''-'-.j..i„ 
 
 107; 60 L. J. Q. a 145. 
 
 n'Jl^T^^^'^^ ^- Londesborough 
 (894). 8 Q. a 660; 63 L. J. Q. a 649- 
 (1895)1 Q.B.536;64L.J.QBo93: 
 
 (1896)A^C.514;65I.J.U;S 
 
 JholW;ri:;rirj('l8l)VS fsrc ^.-^•^ ^' 
 
 Q. B. 66.<}; fi« L. T r> o «"r \^°^*^>2 13 L. C. Jurist. 863. 
 
 reference, ho^ve;er?io"the"opinio^o? ,,/*'"^"- followed in Bank of Ham- 
 
 the judges in that case declared by m" ^' '''"*' ^'"'^ ^'^^^' «^ ^^^^ 
 

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44 
 
 OONOITION NO. & 
 
 liable (according to Toting v. Grote) if he leaves spaces which 
 are fraudulently filled up; but the acceptor of a bill is not. 
 
 Young v. Gbote. 
 
 Examining Toung v. Grote (the check case) with a view of as- 
 certaining the ground of decision, we have to admit that those 
 who desire to suggest estoppel as its foundation are fairly met 
 with the statement that estoppel is not once referred to either 
 by counsel or judges; that the decision was in 1827, while the 
 doctrine of estoppel was not familiar to coramon-law courts 
 until Pickard v. Sears^ in 1837; and that if estoppel had been 
 the ground, it would, therefore, naturally have so appeared. 
 Upon the other hand, inasmuch as principles are never first 
 thought out and afterwards applied, but arise experimentally 
 and empirically, it is quite possible that the decision in Young 
 V. Grote may be referable to doctrines which were but subse- 
 quently formulated — to the principle of estoppel by assisted 
 misrepresentation, which is even yet largely undeveloped. And 
 this view would account for the absence of the word "estop- 
 pel " in the case.' 
 
 Every judge in Young v. Grote refers to the drawer's negli- 
 gence as being the cause of the loss. But how can negligence 
 be material? In this way: The check was not that of the 
 customer; it was a forgery; the banker ought not to have paid 
 a forged check; therefore he ought to lose. But although the 
 check was forged, yet if the customer was estopped from so 
 saying, the result will be otherwise. And he ought to have 
 been estopped. The check was represented to be the genuine 
 order of the customer, and the customer having through negli- 
 gence assisted the misrepresentation (provided an opportunity 
 
 by many other judgea See per Keat- 
 ing and Williams, JJ.. in Re Swkn, 
 7 C. R N. a 441, 446; 80 I* J. C. P. 
 117, 131; {wr Ch-^asby, B., in Halifax 
 V. Wheelwright (1875), L. R 10 Ex. 
 198; 44 L. J. Ex. 186; per Lopes, J., in 
 Scholfleld V. Londesborough (1895), 1 
 Q. a 546; 04 L. J. Q. B. 308; per Cole- 
 ridge, C. J., in Arnold v. Cheque 
 Bank (1876), 1 G R D. 586; 45 I* J. 
 
 16 Ad. &E. 400. 
 
 »That estoppel is the true ratio 
 decidendi is afflrnied by Lord Cran- 
 worth in Bank of Ireland v. Evans 
 (1855). 6 H. L. a 418; and Erie, C. J., 
 in Re Swan (1859), 7 C. R N. S. 433; 
 80 L. J. a P. 118; distinctly denied 
 by Cockburn, a J., in Swan v. N. R 
 A. (1868), 8 H, & C. 189; 83 L. J. Ex. 
 879 (but put upon a ground quite 
 
 0OQa{:'^ lit W<l:h •■tnnnal a» ^l.-^ 
 
 ^^ — .. ^j — ,. .^^^ V-tltX|J~ 
 
 tcr XIV); and doubted and debated 
 
 
DISREGARD OF SOME DL'TY. 45 
 
 ^st d T^iT "'"' T^ '""^ "'* '*^"™ particalarize it as follows': 
 
 state to her husband's clerE to get chLnid 5;» ^o^^i''^*-'^ T^^ '* '" ^hat 
 <ttn% to effect tlie fraud.'' ^ ^'langed, thm affording htm an oppor. 
 
 It is useless, however, to say that "too much opportunity '» 
 for fraud was given unless there is some duty not to give "too 
 
 rdutvT?ff"''^-" "^"^ "' "'^•^ ' '""''''"''^ ««>' '"^^^ -^Slect 
 of duty, by affording opportunity for fraud, was the ground of 
 
 the decision. If so, it is but the work of translation to couch 
 the same idea in the language of estoppel: The clerk repre- 
 sen ed the check to be genuine; the banker, upon the faith of 
 that representation, changed his position (paid the money); the 
 misrepresenter and those who assisted him are estopped from 
 denying the truth of the representation; the drawer having 
 ^ven 'too much opportunity . . . to the clerk to effect 
 the alteration of the check » assisted the fraud ; and he is, there- 
 lore, estopped. ' 
 
 If we are wrong in so saying we may at least quote the testi- 
 mony of Baron Parke, who was one of the judges engaged in 
 the case, and who afterwards sitting in the House of Lords 
 
 i»g the check, which adiZreTlteSv^nt^rS^^^u^!! the mode of draw- 
 plain of the payment." ""»wif jj lue cneck itself, could not com- 
 
 Preclusion from assertion of rights is estoppel. 
 
 , SCHOLFIELD V. LoNDESBOROFOH. 
 
 The reasons which, in Scholjleld v. ZondeshorouoL led to a 
 contrary conclusion in the case of an acceptance may be sum- 
 marized as follows: J oBum 
 
 (1) Tounff V. Grote was the case of a check, not of a bill. 
 
 > The last English case on the sub- 
 jeot dedarea that Young v. Qrote 
 cannot be supported upon the ground 
 of negligence. Union Credit Bank 
 V. Mersey Docks (1899). 3 O. R 20.1. 
 «» U J. Q. a 848. The court, how' 
 
 ever, distinguishes between estoppel 8 H. L. G 
 
 by negligence and estoppel by mis- 
 representation, not observing' that 
 negligence can be a factor in estop- 
 pel only where there is repiesenta- 
 
 tinn Qao <.K tit 
 
 — -~-T VII. i..a^ 
 
 » Bank of Ireland v. Evans (1855;^ 
 
4e 
 
 OONDITION NO. & 
 
 ! I 
 
 (2) Bills are drawn not by an acceptor but by the drawer. 
 The acceptor is, therefore, not responsible for the form of the 
 bill ; and it " might lead to many complications " were duty as 
 to its form to be placed upon him. 
 
 (3) "Protection against forgery is not the vigilance of par- 
 ties . . . but the law of the land." The general spirit of 
 the law is opposed to individual responsibility for the crimes of 
 others— egoism is the rule, not' altruism. 
 
 (4) It ie impossible to posit a duty not "to facilitate fraud." 
 
 (5) The cause of the mishap was not the carelessness of the 
 acceptor but the forgery of the drawer. 
 
 The first and second of these reasons would almost certainly 
 not have been thought by themselves to have been sufllcient 
 for the decision. The first is rather a g ound for distinguish- 
 ing Young v. Grote than for supporting the case in hand; and 
 the second has, palpably, not sufficient strength to overcome the 
 effect of a contrary view npon the remaining points. They 
 may therefore be passed 'vith a few words. The fifth ground 
 will be discussed in a subsequent chapter.* 
 
 I. DisTiNonoN Between Checks and Bills. 
 
 sod a bill' lord "Watson 
 
 Distinguishing between a cht 
 said:* 
 
 "The duty of the customer arises direc.ly out of the contractual rela- 
 tion existing at the time betwe^r him and the banker, who is his manda- 
 '*""y;u. , I® " no such connection between the drawer or acceptor, and 
 possible future indorsees, of a bill of exchange." 
 
 And Lord Shand said : * 
 
 "The case of Young v. Grote. between a banker and his customer, wa» 
 one in which there was the relation of parties confracting with each other." 
 
 In Other words, the contract between a banker and his cus- 
 tomer may imply a promise on the part of the latter to use 
 reasonable care not to give opportunity for fraudulent manipu- 
 lation of his checks; whereas there is no contract (and cannot 
 very well be) between an acceptor and a future indorsee to the 
 eflfect that he has already taken such precaution. 
 
 > Ch. I3L 
 
 > " A check it a bill of exchange 
 drawn on a banker, payable on de- 
 mand." The Bills of Exchange Act. 
 
 4-t nn/l iA Vin /TtnnV nV, a% ana. ro 
 
 1- . . ._ j_^ ..,„ .J, J _ ,„^ {}y 
 
 Vic. (Can.), ch. 88, g 73. 
 
 •Scholfleld V. Loudesborough (1896), 
 A. C. 537; 65 L. J. Q. R 604. 
 
 « (1896) A. C. 648; 63 I* J. Q; R 609t 
 And see also Lord Macnaghten (1896), 
 A. C. 515; 65 L, J. Q. B. dOS, 
 
DI8RB0AKD OF 80UX DUTY. 
 
 4T 
 
 Bat if estoppel by assisted misrepresentation be the true ratio 
 decidendi of the check case, all questions of contract are irrel. 
 evant. If an owner of property stand by and seo it sold to an- 
 other he is estopped, not because of any contract between him 
 and the true purchaser, but because, 
 
 ^•^He has conducted himself so as to give rise to the belief of a fact un- 
 
 The question, then, is whether there can be any duty, apart 
 from contract, not to afford "too much opportunity" to com- 
 mit a fraud. If there is, it is immaterial that there was no 
 contract. The point then is included in the large question of 
 axistence of duty. 
 
 II. AccEPTOB Not Responsiblb for Form of Bill, 
 
 Upon the second point Lord "Watson said:* 
 
 vni"-^" "f/I^' " "°^ '""*'• <^*^» which occur in the course of business, the 
 bill IS written out by the drawer and sent by liim to thTMoeDtof^o i^ 
 w'in*fJJ."„f '^****° ^ 'J?" *>. . Assuming the appelSint^s ??Xenrto iS 
 well founded, t would be within the rigKt of the acceptor to return tS 
 itii. nf'tt I'J/ "**"' not drawn so as to exclude all feSonibKablC 
 UJ^s of fraud or forgery. The exercise of that right might lead tovery 
 great complications in commercial transactiona" ^ 
 
 Lord Shand said : * 
 
 Jen. addition and might refuse acceptance, to the serious injurv of the 
 
 fn^t^lH^hL'^wff /" * ''.'"'■!r <" «br^d. or of a drawer who SSuhav! 
 mdonied the bill for value given before acceptance." 
 
 With deference, it may be replied that the obligation of a 
 drav»ee cannot include that of accepting an improperly drawn 
 bill.» But waiving that point, all that has to be insisted upon 
 is that an acceptor, when he sees invitation to fraud in the 
 form of spaces upon the face of the bill, should draw a pen- 
 mark through them. He need not return the bill, or decline 
 acceptance; he can, without altering the bill, remedy its If.fect. 
 
 It will be observed, too, that the point in hand would raise 
 a distinction between a bill and a note with regard to liability 
 in case of alteration; for if the acceptor of a bill be not re- 
 sponsible for its form, at aH events the maker of a note cannot 
 
 iRamsden ▼. Dyson (1866), L. R 1 
 H. L. 140. 
 
 'Swan V. N, B= A= (1862V ? H. * N, 
 657; 81 L. J. Ex. 42S. " ^' 
 
 *Scholfield V. Londesborough, 
 (1896) A. C. 587; 65 L. J. Ql a 604. 
 
 *(1896) A, C. 540; 65 L. J. Q. R 610. 
 And see also per Lord Macnaghten, 
 \- — ; '-^ ^. i«o; vo i* «-. (^. a o«s. 
 
 ^American Water Works Ca t. 
 Venner (18»2), 18 N. Y. Sufk 878. 
 

 
 1 
 
 
 
 
 
 ■1 
 
 4S 
 
 CONDITION NO. & 
 
 Shelter himself in that way. It raa> probably be assumed that 
 the argument in hand would not be a sufficient or satisfactory 
 ground /or upholding such a distinction. And it may well be 
 asked, too, whether there is a ditference between a bill writ- 
 teu by the acceptor himself and one prepared by the drawer? 
 
 III. No DuTT TO Guard Aoaint Cbimk. 
 
 This may bo said to be the principal ground of decision in 
 the Stiholjield v. Londesborough case. Lord Halsbury said : » 
 
 "' *7hal"i^«T''""' "^''l* • • •,**'* ^**^« proposition of Bovill. *G J.. 
 '♦« \t ' "'a' People are not supposed to commit forjrerv and that Vha n»^ 
 
 l,!Htl°"f"«**"'^ {?''«*'j:y •" not the^iKilance of part fre^xdSdiDK She bE 
 biiity of committing forgery but tlie law of tliJ iund." * ^^ 
 
 Lord "Watson said : ' 
 
 "It is not consistent with the general soirit of theUw to hnM inn/».»»<. 
 
 VS. TStt"" "f t-kinlmeasuri; to pre^enVThJ^ommtoSf 
 a crime which they may have no reason to anticipate." •"•""on or 
 
 And Lord Macnaghten said : » 
 orlmTnalK.'°"°° °' '"^""' '^ ^'^^^' ^^^' '«'* *« *»>« operation of the 
 
 These dicta are quite in line with some previous judicial 
 utterances. For example Brett, J., said : ♦ 
 
 acM^^^^^^^^^ 
 
 Bucli^a duty is to enunciate a startling propSffiVwSh^VnoVte S^ii! 
 
 Fry, L. J., said:" 
 
 Aad Bramwell, L. J., said:* 
 
 Some dissenting opinions in Soholjlcld v. Zonde^horouoh are 
 as follows: " 
 
 Per Charles, J.: » 
 
 »(1896) A. G 882; 65 U J. Q. R 
 601. And see Soollans v. Rollins 
 (1899), 58 N. E. R 803 (MasaX 
 
 »(189(J) A. G 587; 65 L. J. Q. R 
 
 •(1896) A. G 544; 65 L. J. Q. R 
 807. ^ 
 
 <Soci6t6 T. Metropolitan (1878), 27 
 
 L. T. N. ft RM A„A TT_i-_ 
 
 -. _.. — -...., ctrc U'lllWK T. 
 
 Mersey Docks (1899), 2 Q. R 205; 68 
 
 L. J. Q. R 842; Goodman v. East- 
 man (1828), 4 N. H. 455; Worrall v. 
 Gheen (1861X 39 Pa Sfe 888; Collier 
 V. Miller (1898), 187 N. Y. 882; 88 N. 
 E.R874. 
 
 » Union Bank v. Kent (1888), 89 Ch, 
 D. 248; 57 I* J. Ch. 1027. 
 _ • Baxendale v. Bennet (1878X 8 Q. 
 B, D. oaO; 47 L. J. i^, B. aSd 
 
 ^1894)3<3. R604; 03 L. J. Q. R 
 
Bsume that 
 
 DISREGARD OF SOME DLTV. ^ 
 
 quent holder., .hould not W to tJ^-.,£;:^™"'^'y.^*'i'''« ^ •»» 'uC 
 taking reasonable care that thJ dScunZt -h3t!l' ^'*1*^*" "'« ^"tyof 
 cepted as not to offer obvious opSunUle. for thi* "^ 'r*'"*^ "hen ac- 
 
 Per Blackburn, J.: « 
 me^^aXr a^S^^^^^^^^ does, bv the la. 
 
 -nPetrr?o^^S5%'Si^ they must use rea- 
 
 PerCookburn, C. J.:« 
 
 •nc^JuSfftStely.Teru^"^ »'.'>"o™ble men: but experi- 
 
 mght least be expected ?n thrmS^Sj^VT??'*"^ '"»PP«'' "^hen t'hev 
 this case, from the carilessneaif ^Vh^ °' instances thiroccurs. as in 
 
 take the precautionST Sures Vhi^ th? «'""*.*^ ""-^ *•>« °™Sion S 
 would prescribe." ««wures which the regular course of business 
 
 Per Day, J.: » 
 
 corporators of' his^£>dj!lJJaSe?t"i8^oM«"FS^"*^*"*^.*"'"*'»"taWe to the 
 
 «r'^V?^«'"*^« offense Sava iin "h?mLS?nrr^***"'".*?"y •"«« ^"'1 
 placed in his way — that no man n. 2L ♦ i ^ °' opportunities which are 
 
 mend itself to me, nor to my exMri»n.^ nAT ° ft5'°"'"« ^oes not com- 
 to the common sense of m"J fn SneraT" '''*'^'^' "°*"' ^ •'^o"^ think. 
 
 Per Wills, J.: • 
 
 mus^?Kwe';nTm"iftte'i'4 *"'*£"? <«>ntrlbuted to the forgerr 
 Jjen. and acted upo^n%"h1stwneTriS;t''rs ^^H^^tB^ 
 
 nLwt* "° ^"*"*"' '• Sullivan 
 <1890). 44 Kan. 598; 25 Pac. R. 86; 
 Atchison V. Bras8fleld(1893).51 Kan 
 187; 83 Pae. R. 814. The Code Nai 
 poleon has the following: « m2 
 Tout fait quelconque de I'homme 
 qui cause a autrui un dommage. 
 oblige celui, par la faute duquel il 
 estarriv6.alereparer. 188a Cliacun 
 est responsable du dommage qu'il a 
 cau86, non seulement par son fait 
 
 raais ennnro noB -~ I! ' 
 
 ---— t— ^ urgwgcnoa ou 
 
 par son imprudence." 
 
 ^^(1895) 1 Q. B. 646; 64 U J. Q. r 
 
 »Swan V. North British (1868). 3 
 H. & C. 188; 88 U J. Ex. 277. 
 
 » Soci6t6 V. Metrojiolitan (1878X 27 
 I* T. N. S. 858. 
 
 M«il?'oTl,''- ^'^^^^ Lyonnais Ca 
 
 (1877), 8 C. P. D. 41 ; 47 L J. C. P. 241. 
 
 "Merchants v. Bank of England 
 
 mn 81 Q. a d. 168; 57 L. J^K 
 
 •Id, 107, 488L 
 
50 
 
 OOMDinOM NO. & 
 
 V ': 
 
 Per Penniylvania court: ' 
 
 "It |« the duty of the maker of the note to guard not only himself but 
 the public against fraud and alteration, by refusing to sign negotiable 
 paper made in such form as to admit of fraudulent practice upon them 
 with ease and without ready detection." 
 
 Crinuf and Any Other Fraud. — The first step towards cor- 
 rect appreciation of the point in controversy is to ascertain 
 whether it is correct to say that there is no difference 
 
 *♦ between a fraud carried out by means of a forgery (by means of a crime) 
 and any other fraud " > — 
 
 to ascertain whether it can be said (with Baron Bramwell) 
 
 "that every one has a right to suppose that a crime will not be committed, 
 and to act on that belief; " * 
 
 and at the same time admit that like security cannot be in- 
 dulged with reference to frauds which hcve not been declared 
 to be criminal. 
 
 In the first place it is quite clear that no one deems it pru- 
 dent " to act on the belief that a crime will not be committed '^ 
 when the risk is his own. Houses are locked at night purely 
 because one's right to trust everybody and to act upon that 
 trust would probably induce theft. Portable valuables are care- 
 fully guarded for the same reason ; and the notion is general 
 that money is safest in a tightly-buttoned pocket. 
 
 Every one protects himself by appropriate measures of pru- 
 dence against crimes as well as against frauds. Can there be 
 any distinction between them with reference to our duty to our 
 neighbors ? The effect of an affi rmati ve answer is tb at al though 
 every one must exercise " an appropriate measure of prudence " 
 not to afford an opportunity for fraud at the expense of third 
 persons, yet that no prudence at all is necessary where the 
 fraud can only be accomplished through crime. In other 
 words, " while every one has a right to suppose that a crime 
 will not be committed, and to act upon that belief," no one 
 has a right to assume that z. fraud will not be committed, and 
 to act upon that belief. 
 
 Were the distinction well founded there would be this some- 
 what curious result, that alterations in the criminal law would 
 entail changes in the duty of carefulness as to the interests of 
 others. As against certain frauds we must take reasonable 
 
 » Zimmerman V. Rote (1874), 75 Pa. 2 Shaw v. Port Philip (1884), 13 
 St 191. And see Brown v. Reed Q. R D. 109; 53 L. J. Q. R 878. 
 (1875), 79 Pa. St 87a *Ante, p. 4a 
 
W8HEGAKD OF 80MB DUTY. g, 
 
 precantions in the interests of our neiirhbcrs- buf «l,«..u 
 
 ita amount But to L^^v !"""*"•" """' "«> •" "> '""-^ 
 fore it w J 8to?e„ r.H K f"''P'^ """ "■« ««»P<«no6 be- 
 
 .M^time witb -r„oe^:r jou:tC"'"c:,tror 
 
 m the case just referred to said : ^"'eriage, u J., 
 
 of prudence "tomelv » »„ , T ''" "l'P"P"«o "oasure 
 
 o^Lea, a:a tttLrrirrcrr::^ "-« ^" 
 
 Th.s oa« .s a good example of the point in hanj, and well 
 
 ^ Ante, IK id. . „ _ ^ 
 
 » Arnold V. The Cheque Bank m7R^ tt ^' »f " *" '"''^ ^'"® Art Society 
 
 >c.p.D.«,M5uj.rp^4'''A"U^To'S"';„'.'^':"**''''* 
 
62 
 
 CONDITIOX Na & 
 
 
 illustrates the dictam of the same learned judge In the same 
 case: 
 
 ^.r K."**"-i'"*' If ."?'*'■* c»relM« with regard to the rustody of • thing that 
 c«n be made availablH only by means of a forgery than If by mere larMuy.* 
 
 But observe that the distinction here made is between crimes 
 of different classes, and not between crime and fraud. Larceny 
 is more common, more easily accomplished, than forgery; 
 therefore (the learned judge would argue) more care must be 
 taken to guard against the one than against the other. There 
 must be "an appropriate measure of prudence." 
 
 The rensonablfiness of this may at once be seen if we note 
 the difference between filling out a note but not signing it, on 
 the one hand, and signing a blank note but not filling it out, 
 on the other. Keither document can be used without forgery.* 
 In the latter case, however, the maVer may very well be liable; « 
 while in the former he cannot. The distinction here is not be- 
 tween crime and fraud, nor yet between crimes of different 
 degree, but proceeds upon the duty to " order his precaution 
 by the measure of what appears likely in the known course of 
 things." 
 
 There are many other cases in which a man may suffer, if he 
 act upon his "right to suppose that a crime will not be com- 
 mitted." For example, believing in another's honesty he may 
 lend him a horse, and find that the animal has been sold in 
 market overt; believing in a broker's honesty he may intrust 
 him with blank transfers of shares to be used only upon instruc- 
 tions, and find that the trust has been violated and the shares 
 appropriated; believing in a solicitor's honesty he may execute 
 a document which has an effect quite different from that rep- 
 resented to him, and nevertheless he is bound by it in favor of 
 a third person to whom it has been transferred ; a company bo- 
 lieving in its secretary's honesty may give him authority to 
 issue certificates of shares and guarantee the genuineness of the 
 signatures to the certificates, and find that he has forged the 
 necessary names and issued a certificate for his own benefit;' 
 in short, a man believing in another's honesty may permit the 
 
 ' For it is not only forgery to sign 
 a name to a document, but also to 
 write a document orer a name. Reg. 
 V. Wilson (i»4»X ir i* J. M. C. 83; 
 Byles on Bills (15th ed.X 842, ff. 
 
 »See ch. XXV. 
 
 •Shaw V. Port Philip (1884X 18 Q. 
 a D. 108: 58 U J. Q. R 86flL 
 
DIUUCUAKO OW tOMM OCTT. 
 
 58 
 
 appearance of ownership or agency in him. and be estopped bv 
 transactions carrietl out upon the faith of such anpoaranr ni 
 matter how assuredly the rascal must go t^gac^?^ "'' "' 
 to itir'"!^'!" P«>hibiting the manufacture of paper similar 
 to that used for Bank of England notes acted not ur^rthe 
 ground that every one has a right to suppose that crime wil! 
 
 ii^Zifr^'u'' "^'^ ''' ground's^ pa;^^n„: 
 
 LT h Ii^ ** """" "°' '° ''^'''^ opportunity for cri, .e.« And 
 it ,s hard to answer Mr. Justice Denio's remark : 
 
 estopped from wtting up . ^t hat h5 ri^n!""*"' **' * '? ^'«''"' •igrmtures 
 Action of nearly the same kinrf m ..» 'iT P*P*' ^" "<>' '»'• genuine act A 
 f.vor of the to«Vyrfrho?dei"o1 n";^!.^!.!?!^!"^!^,^ '^^^ •« •oSn in 
 
 PiiHn cinuhtion b» the thterrSShnCHfrnT. .'''..•• '^° ■'»'•" ••><! 
 hlony, anii yet Dothlog 1. olMrir i "" * — ^ " 
 
 upon paper thus oircuraalanced"* 
 
 A novel dutinotion Us very recently been made by Biffhain J 
 
 Bolding that in the former cau the perwn whose name ia 
 forged may be bound, but in the latter he will n^ T the 
 e.«, m question ' a mortgagee of «areho««xl gL" tve t„ the 
 
 direct the delivery of but certain of the goods. But thevdif 
 fered in that one of them fully describ^ the pal t te 
 
 tut ir^\'"l: '!u' • "^ <"■ '"■' '°™ "-O •'""The ,1^ 
 tu^, m which the mortgagor inserted the iest of the gS- 
 wh. a the other the description of the good, to be deuCl 
 
 In ^ h ■"' *""'°"'^ by making it answer for all the ^s 
 
 won lndTtherh"'".'T'^' "" '" °"« "■« "-'sag™ 
 won, and in the other he lost. The learned judge held that 
 
 where there was some authority from a principal to an .1 
 to fill up a document, the principal was bound even if the a«n 
 exceeded his authority; but who.^ there was no author^; 
 all the mortgagee could not be bound a-Mority at 
 
 „.„T'l^''*'!?"°° '' ""y ""^ '"•"oi'ted that when an agent ex- 
 ceeds his authority he ceases to act as agent and bindsK 
 
 ..:9:e„^7i:e *;:;?:: Vxy';.'-:: v.'^r"---" '•«-'-*«». 
 
 XXvI inclusive. 4 it-'— 
 
 § 14; Atkyns v. Kinnier (1850X 4 Ex. . 'w ** J. V- «. «4a. 
 
 783; 19 I* J. Ex. 181 
 
•• OONDITION NO. & 
 
 alone. Both cases are therefore the same In this, that tie un- 
 authorized act was the act of a stranger. The}' are also alike 
 in this, that being unauthorized the mortgagee could not pos- 
 sibly be bound by the act done in his name. The question there^ 
 fore is simply whether, although the mortgagee is not bound, 
 yet he is for some reason estopped from so saying. 
 
 Now observe that ostensible agency is out of the question in 
 both cases, for there was no appearance of agency of any kind 
 in either of them. When the orders were taken to the dock 
 company they were complete, and appeared to have been ex- 
 ecuted in their perfected form. The company could not say 
 that they relied upon the appearance of authority to fill up the 
 blanks — they knew nothing of blanks, and nothing of agency. 
 
 The appearance to the dock company, in both cases, was that 
 of ownership and not agency; and the only question therefore 
 is whether the mortgagee can be said to have been responsible 
 for such appearance— whether he exercised "an appropriate 
 measure of prudence." This brings us sharply to the point: 
 Has "every one a right to suppose that a crime will not be 
 committed, and to act on that belief?" If so the decision with 
 reference to both delivery orders ought to have been the same — 
 that is, in favor of the mortgagee. And if such a right cannot 
 be predicated in all cases, are we to distinguish upon the ground 
 that the forger in one of them ijad power to do something 
 other than what he did; and in the other had power to do 
 nothing? Or are we not rather to say that forgery, when made 
 easy and tempting, is not a wild improbability; that the rule 
 of " an appropriate measure of prudence " requires that « a per- 
 son whose negligent act has directly contributed to the forgery 
 must bear the loss;" and that there was the same imprudence 
 m the one case as in the other; for in both a space was left in 
 which the description of the unreleased goods could easily be 
 filled in. If a vendor of laml were to execute a conveyance in 
 which a blank half-page followed the parcels, it would hardly 
 be fair of him to attempt to throw upon an innocent purchaser 
 of added property the burden of a loss mainly attributable to 
 the opportunity he had afforded for fraud. 
 
 Degree of Probabiliiij,— There are degrees of probability as 
 to the commission of crime. Were I to leave money upon the 
 
 desk of a nil hi inlv fpa/^nan^n/l ^t« T_.-..|.^ « • . . 
 
 « -1 a J. ^. -.«,„vuiw« Oixit-c, i iuigui, saieiy say tuat it 
 
DI4REOARO or SOME DLTV. m 
 
 t<i:;rrr^ eni-j^rr .-^^r^^^^^^^^ -j'^ 
 
 of prudence" provides for^T^!- !''P"'P""'""«'«"'" 
 . Jn.. and ^.sT^tJr 1^ Srv^^^^^^^^ 
 
 .o estaMUh so^e order o", ::::,:^,e '^Z;^Z'" " ^""" 
 affairs, any duty ofa^ l"!r^"' ?"? "'' " """»-'- 
 
 answer .o^his'c:nnrb:"dir"^':t"„trLr •'■''' 
 
 'w °** (1896), A, C 533; 65 I* J. Q. R 597. 
 
06 
 
 CONDITION NO. 8. 
 
 Hgible that he should not be permitted to Kt up his own act or neglect to the 
 l""?/««',f« of the banker whom he has misled or by neglect permitted to be 
 
 And may it not be said that if an acceptor " by any act of 
 his has induced " a transferee in due course " to act upon the 
 document by his act or neglect of some act usual in the course 
 of dealing between » merchants, « it is quite intelligible that he 
 should not be permitted to set up his own act or neglect to the 
 prejudice of the" transferee, "whom he has thus misled or by 
 neglect permitted to be misled ? " The principle is the same. In 
 both cases a party to a negotiable instrument is guilty of the 
 neglect of "some act usual in the course of dealing " » (whether 
 " between them " as individuals or as members of the public is 
 immaterial);* in both that neglect has been taken advantage 
 of by another person who "has induced the banker (or trans- 
 feree) to act upon the document ; " in both, therefore, there ought 
 to be estoppel. 
 
 Further support may also be obtained from the law with 
 reference to blanks wilfully left in a negotiable instrument, 
 as distinguished from spaces carelessly left there. In the chap- 
 ter on "Execution of Documents "» it is shown that if an ac- 
 ceptanca be intrusted to another, with authority to fill it up 
 for £100, and he fraudulently insert £500, and the bill come 
 to the hands of a transferee in due course in complete form, 
 the ground of the acceptor's liability is estoppel. The estoppel 
 results from the representation made by the negotiator to 
 the transferee that the bill was the real, completed obliga- 
 tion of the acceptor, and the acceptor is estopped by such mis- 
 representation (although not his) because he assisted it, pro- 
 vided an opportunity for it, did that which was necessary ta 
 make it credible. 
 
 The acceptor's liability in such a case is undisputed; and the 
 only possibility of distinction between it and the case under 
 discussion is that in the one (when blanks left) opportunity for 
 fraud was wilfully given, whereas in the other (when spaoea 
 left) it was carelessly supplied. In both there was crime; in 
 both opportunity was given for the crime; in both "the cause 
 of the mishap was " (or was not, as one may choose to say) 
 
 » It may safely be affirmed that ne- ' See ch. X. 
 gotittble iustruments are not usually * (Jh. XXV. 
 drawn as was th« one in question. 
 
DISBBOARD OF SOME DUTY. ^>r 
 
 the forgery, and not the blanks pr spaces; in both there ou^ht» 
 or ought not to be estoppel. ^^i-a mere ought 
 
 An acceptor may then be liable although a forgery has in 
 tervened; and the only question is: Should he beTble ^ he 
 hav^ mth careless indiffen^nce to the interests of othel si 
 pM'too much opportunity "for the fraud - if he hav; nit 
 used "reasonable care not to aflford opportunity for !t»Brr 
 ir^mmindthegenemlprincipleofsJaUife"!^^^^^^ 
 required to use due diligence to avoid causing harm to others » 
 It IS submitted that the answer ought to be fn the almaliVe. 
 
 IT. IMPOSSIBILITT OF A RuLK NoT TO F,' CILITATe" FbAUD. 
 
 Lonl Jr -.e Rigby, as to the possibility of framing a mU 
 as to facilities for fraud, said : » naming a rule 
 
 fraud. Thisis a diSt proi^^^^^ de«fwi? '"^J^.''/"' ^« /°«W^« 
 facilitate fraud? If such nSSexSi it m .!!'*''; Wliat is a duty not to 
 a duty not to facilitate a partJcul^kSdoTfriiH' ^^^^'^^^ ^ """i^d to 
 ing. I may point out that any one who accV^^^ illustrate my mean- 
 
 in one sense, an act which facilitatP»^«^fHP^ * ''"^ payable to order does, 
 the bill may get can commit «fSr«rfiS4iS!«^^ '"*<> «'»»<«« hands 
 
 is no great difficulty in so doing, aJ5 KJ n^^^iJ^^^'f '''^5'«- There 
 exists to ,ts full extent, whyftroid'^^rairp^tiltt^^ 
 
 And Lord Halsbury added : « 
 
 ut f^^'T^l °*'"^ ^ '"""^ ^y »'««»« it too broadly 
 aat no one shall endanger l,fe would be to invite the criticisms 
 
 rule that an acceptor of a negotiable instrument must « tate 
 reasonable oare that the document should be so framed 
 as not to offer Oviou, opportunilu, for the commission of 
 onme' w,ll undoubted^ become much more vulnerabTe « ex 
 pressed as "a duty not to facilitate f,a„d.". Such Ifom of it 
 
 (1885), 1 * a DM: M L. J. Q. R aSa. 
 ■14(1800), A.C531;l)3I.J.(jR59j 
 
58 
 
 CJONDITtON NO. & 
 
 11 U 
 
 
 almost, forces the remark that, if so, no one must accept a bill 
 at all; an observation which is quite inapplicable to the rule as 
 more carefully framed. 
 
 Because the law does not prohibit the use of the streets, or 
 the making and circulation of negotiable instruments, it does 
 not necessarily follow that it must altogether refrain from pro- 
 pounding regulations for the conduct of persons using or mak- 
 ing them. It is true, no doubt, that 
 
 "It is impossible to carry on the common affairs of life without doing va- 
 rious things which are more or less likely to cause loss or inconvenience 
 to others, or even which obviously tend that way; and this in such a man- 
 ner that th^ir tendency cannot be remedied by any means short of not 
 acting at all." ^ 
 
 But although true, it is not a very convincing argument 
 
 against the validity of a declaration that 
 
 "The law of negligence enforces the duty of fellow-citizens to observe in 
 varying circumstances an appropriate measure of prudence to avoid caus- 
 ing harm to another." ^ 
 
 Nor is it a satisfactory reply to the remark of Lopes, L. J., 
 
 in an earlier stage of the Scholjield v. Londeaborough case : • 
 
 " It would be passing strange if a person who accepts a negotiable instru- 
 ment, such as a bill of exchange, and who thus permits it to go forth on 
 the credit of his name, he being the pei-son primarily liable to all subse- 
 quent holders, should not owe to those subsequent holders the duty of tak- 
 ing reasonable care that the document should be so framed when accepted 
 as not to offer obvious opportunities for the commission of a crime," 
 
 As to highways, the rule is that 
 
 "For the convenience of mankind in carrying on the affairs of life, people 
 as they go along roads must expect or put up with such mischief as rea- 
 sonable care on the part of others cannot avoid."* 
 
 And in the ways of commerce may it not be said with Bo- 
 
 vill, 0. J., in a case of the class in hand : ' 
 
 "Parties cannot prevent forgery being committed; they must use rea- 
 sonable care not to afford opportunities for it." 
 
 Again in the law of torts the rule is undoubted that 
 
 "A man who orders a work to be executed, from which in the natural 
 course of things injurious consequences to his neighbor must be expected 
 to arise, unless means are adopted by which such consequences may be pre- 
 vented, is bound to see to the doing of that which is necessary to prevent 
 the mischief." « ^ 
 
 And was not Cockburn, 0. J., undoubtedly right when he 
 said : 
 
 "The mercantile community are as a body honorable men; but expe- 
 rience unfortunately tells us that frauds pccasionally happen when they 
 
 1 Pollock on Torts (5th ed.), 141. Mather (1875), L. R. 10 Ex. 867; 44 
 
 *Id. 22. LJ. Ex. 176. 
 
 •(1805) 1 Q. a 546; 64 I* J. Q. B. »Soci6t6 v. MetronoHtan MfiTSV 97 
 
 «»3- L. T. N. a 854. 
 
 «Per Bramwell, B,. in Holmes v. « Per Cockburn, C. J., in Bower ▼. 
 
DISKIlOiiiD OP 801IE DOTT. 59 
 
 Jorb/o'or'fo ".L":™'"?""^ '" "'^''"•^ '"■» ->« of 
 
 to the ezeouZ oMheV'or to .r^"' "•''''' '"'"™«"" than 
 «very^ay physical Jife' '^* ""'ftudinous incident, of 
 
 .Ka:;i: ^.^ZtiTattrj. tr^r "■■'"---^• 
 
 some material condition is addo^ »! /' . '"""" '" '"''• 
 Ponoll; the acceptor is struck S th, f ,t"°L' '" "S" '^d 
 but nevertheless accent^ »nH T a ""''"^ °"°''<^ »" '™»<). 
 foot-note and pasr?he' MI Or ''' "' ?""' '""' "»' "■« 
 is written in ink bTt uL ' • ■ '^'"^ "■" ""» """dition 
 
 out oir wither afforSiu^r Tj^" '"""'' '^^ •» ''"^'r 
 Such cases are of Zlent^ '''''"*™"'=« of alteration 
 Unfortunately howev?tr "f"""*""* i» the United States. 
 I««, and judl anZv^' i*"? '" ""f <>'s»reen,ent as to the 
 
 ofjie,uLfr tr.t^riyi'T.r "'"™ "-'" «•'■- 
 
 vrHrtiiiht'i^^S^""— ^^^^^^ 
 
 ''^"^'''''-""■'sid^rrirer^trr^' *' '^' 
 
 and prudent from tKe nei^^igence and f,4?,H ''? P';o*e°«on of thi inn<SenE 
 insertionor erasure, without d^f^ofnli* * alteration to be made, either bv 
 
 Peate (,876). 1 Q. R D. 826; 45 L J. 
 ;?«S.1?V«!?«»«he8v.Peroival 
 
 A A li '• ChriRtchurch (1804). 
 A. C. 48; 88 I* J. R c. 8a 
 
 ' ^nfe, p. 49. 
 
 ' As to Whlnh Baa «U -VtrT*-. 
 
 *Ante,p.4S. 
 
 < On Bills and Notes, 19a 
 •Id. 194. 
 
60 
 
 CONDITION NO. 81 
 
 
 I ' 
 
 when the opportunity which he has afforded has been embraced, and the 
 instrument filled up with a larger amount or different terms than those 
 which it bore at the time he signed it" 
 
 "Tlie true principle applicable to such cases is that the party who puts 
 the paper in circulation invites the public to receive it of any one having 
 it in possession with apparent title, and he is estopped to urge an actual 
 defect in that which through hia act ostensibly has none." 
 
 " It is the duty of the maker of the note to guard not only himself but 
 the public apainst frauds and alterations, by refusing to sign negotiable 
 paper made m such a form as to admit of fraudulent practices upon them 
 with ease and without ready detection." 
 
 " The inspection of the paper itself furnishes the only criterion by which 
 a stranger to wliom it is ottered can test its character, and when the in- 
 sp«ctiou reveals nothing to arouse the suspicions of a prudent man he 
 will not be permitted to suffer when there has been an actual alteration." > 
 
 Some cases no doubt may be very close to the line which 
 separates the prudent from the imprudent act. For example, 
 leaving a very small space after the word "eight," which is 
 made use of to insert the letter " y," may to some appear in 
 one light, and to some in another.' Such border cases, how- 
 ever, embarrassing as they may be, are never thought in other 
 branches of the law to vitiate the rule which requires " an ap- 
 propriate measure of prudence to avoid causing harm to one 
 another." Nor do such difficulties render impossible the as- 
 sertion of a duty " to take reasonable care that a document 
 should be so framed ... as not to offer obvious opportu- 
 nities for the commission of crime," ' or of a duty to keep your 
 signature under your own control. 
 
 iln favor of Mr. Bigelow's view 
 are: Swaisland v. Davidson (1883), 3 
 Ont 830; Holmes v. Trumper (1871), 
 33 Mich. 437; Benedict v. Cowder 
 0873). 49 N. Y. 396; Greenfield v. 
 Stowell (1877X 138 Mass. 196; Knox- 
 ville Bank v. Clark (1879X 51 Iowa, 
 2(«9, 1 N. W. R 491; Fordyce v. Kos- 
 minski (1887), 49 Ark. 40, 3 S. W. R 
 893; Columbia v. Cornell (1888), 130 
 U. & 055; Burrows v. Klunk (1889X 
 70 Md. 451, 17 Atl. R 378; Simmons 
 v. Atkinson (1893), 69 Miss. 863, 13 a 
 R 263; Exchange Bank v. Bank 
 (1893), 7 C. C. A. 1 .. 58 Fed. R 140; 
 Soarles v. Seipp (1895), 6 S. D. 473; 61 
 N. W. R 804; Walsh v. Hunt (1898), 
 120 Cal. 46, 53 Pao. R 115. Upon 
 the other hand Mr. Daniel's lan- 
 guage: " It is the duty of the maker 
 of the note to guard not only him- 
 self but the public against fra\td 
 
 and alterations, by refusing to sign 
 negotiable paper made in such a 
 form as to admit of fraudulent prac- 
 tices upon them with ease and with- 
 out ready detection," is to be found 
 in Goodman v. Eastman (1828), 4 N. 
 H. 455; Isnard v. Torres (1855X 10 La. 
 Ann. 103; Yocum v. Smith (1872), 63 
 111.331; Zimmerman v. Rote (1874), 
 75 Pa. St 190; Brown v. Reed (1875), 
 79 Pa. St 370; Blaky v. Johnson 
 (1877), 13 Bush, 107 (Ky.); Leas v. 
 Walls (1883), 101 Pa. St 57; Scotland 
 v. O'Connell (1886), 33 Ma App. 165; 
 Lowden v. National Bank (1888), 88 
 Kan. 533, 16 Paa R 748; Weidman 
 V. Symes (1899), 79 N. W. R 894. 
 
 ^ Society V. Metropolitan (1878), 27 
 L. T. N. S. 854; Leas v. Walls (1883), 
 101 Pa. St 57. 
 
 * Ante, p, 49, 
 
DISREGARD OF SOME DUTY. --J 
 
 4 And the roles for all snch oases ought to be the r«,n,r«. 
 meDt of « an appropriate measure of prudence t, avoi?lt 
 mg harm to one another." "®" 
 
 r4rd7o\*Lrer^KSV;e?/otToVdTnr ^ P«rf«on with 
 
 at once recognize that if h/^H ««♦ .^^'"^ry sense who did think would 
 
 conduct witff remrd tS, thoL cir^?.mff ordinary care and skill in hilown 
 jury to thepersSor^^iSrty iuh" Sr?H.r"'**-°*"^ danger oHn" 
 care and skill to avoi/su^h dinger "i °*''*'' * **"'^ "'^^ ^ use ordinary 
 
 fel^n^H ^""'P'"' " ^^ ^"^ *°* ^^ *»'« has in<J"ced » a trans- 
 fei^e in due coarse «to act upon the document, bv his act or 
 neglect of some act usual in the course of deal n7h«l » 
 
 ^Cl^^'"" ^"'^"'-^^^^^ thath^^ruTd^n^ t;^^^^ 
 mitted to set up his own act or neglect to the prejudice of th^ 
 
 nities for the commission of crime." opportu- 
 
 CusTODT OF Negotiable Insruments.' 
 Is there any duty of circumspection as to the custody of siirncd 
 but unissued negotiable instruments, or of signed sHpsof n!n«r 
 which may readily be converted iaio docum^ents o^at^ar 
 acter ? Much reason will be found in another chapter 'for an 
 affirmative reply. A few considerations at this pU iZ Te 
 
 If a land-owner create a magnificent fish pond which event. 
 
 prudence which «a disnr«af o«^ *: . .^»8"*^e ot 
 
 ^, „„^ vaufciuus person would or ought 
 
 continue to 
 
 s TT ill . __ com 
 
 * Until chapter XXIV we must, in able." 
 deference to current phraseology, «Uh. XXIV. 
 
 the word "negoti- 
 
62 
 
 OONI'^ION NO. & 
 
 to use if the whole risk and k ^ were to be his own." » And 
 may it not very well be said with reference to a signed bill left 
 in a drawer or upon a desk that the signer has brought into 
 existence an article of dangerous and elusive character, easily 
 picked up, and readily made the instrument of injury toothers; 
 and that if damage ensues it is not sufficient for him to urge 
 that, usually, people are honest; even as in the dam cases h& 
 would not escape because, usually, there were no floods. Would 
 he leave signed notes lying about " if the whole risk were hia 
 own ? " In that case probably he would tear up the notes and 
 write others when he wanted to use them. The principles un- 
 derlying the following excerpts from the law of torts ought to 
 be applied to negotiable instruments : 
 
 "If I am guilty of negligence in leaving anything dangerous in a place 
 where I know it to be extremely probable that some other person wifi un- 
 justifiably set it in motion to the injury of a third, and if that injury 
 should be brought about, I presume that the sufferer might have redress 
 by action against both, or either of the two^ but unquestionably against 
 the first." ' 
 
 "The risk incident to dealing with fire, fire-arms, explosives, or highly 
 inflammable matters, corrosive or otherwise dangerous or noxious fluids, 
 and (it IS apprehended) poisons, is accounted by the common law amone 
 tbosewhich subject the actor to strict responsibility. Sometimes the term 
 'consummate care ' is used to describe the amount of caution required: but 
 it IS doubtful whether even this be strong enough."* 
 
 " The risk incident to dealing with " negotiable instruments 
 would seem to require the same standard of "consummate 
 care,*' and ought not to be shouldered oflF upon those who in- 
 nocently suffer because such care is disregarded. 
 
 Distinction may well be made, in the dam case, between 
 water accumulated for merely ornamental purposes and water 
 in a mill dam; and a higher degree of care may be exacted in 
 
 ^ Per Chnnceller Walworth in New 
 York V. Bailey (1845), 3 Denio, 43a 
 And see Rylands v. Fletcher (1868), 
 L. R. 8 H. I* 841; 87 L. J. Ex. 161; 
 Lapham v. Curtis (1838), 6 Vt S71; 
 Shrewsbury v. Smith (1853), 66 Mass. 
 177; Hoffman v. Tuolumne Ca 
 (1858X 10 Cal. 413; Todd v. Cochell 
 (1860), 17 Cal. 97; Everett v. Hy- 
 draulio (1863), 28 CcL 225; Gray v. 
 Harris (1871), 107 Mass. 492; Losee v. 
 Buchanan (1873). 51 N. Y. 476; Gar- 
 land V. Towne (1874X 55 "!!. H, 55; 
 Marshall v. Welwood (1876), 88 N. J. 
 JL 839; Gorham v. Gross (1878), 123 
 Masa382l 
 
 'Per Lord Denman in Lynch v» 
 Nurdin (1841), 1 Q. B. 85; 19 L. J. Q. 
 R 7a See Lygo v. Newbold (1854),. 
 9 Ex. 803; 23 L. J. Ex. 108; Great 
 Northern v. Harrison (1854), 10 Ex. 
 876; 23 L. J. Ex. 808; Caswell v. Worth 
 (1856), 5 E. & R d49; 35 L. J. Q. B. 
 121; Mangan v. Atterton (1866)^ L. R, 
 1 Ex. 239; 35 L. J. Ex. 161; Austin 
 V. Great Western (1867), L. R. 2 Q. B. 
 443; 86 L. J. Q. R 201; Citizens v. 
 Lepitre (1898), 89 S. C. Can. 1; Mak- 
 ins V. Piggott (1898). 39 S. C. Can. 188. 
 
 * Pollock on Torts C5th sd,^ 470!, 
 
BISBEOillD or SOUE DCTr. j, 
 
 the formep instance than in the latter Th;. 
 
 in accord with tho <!!...■„«..• v ''■'"' ''"'''•I be quite 
 
 domestic ■ or Ichan Xr °*" ''"'^°' ""^ '°°'' "» '»' 
 ."d »ere bonfl^rl " r'T",r'" °''"" '"■«''-'' 
 held that a n.an is not al.v.vrii«w" ' """" ■'"*"'» " " "^ 
 Um but stolen from hfrdkHn , "''•''" ' '""° "'S""" by 
 between cases in^hich Th. ?" "'«'" " '«"' be made 
 
 to «r.e in retail! the 'oLTn"" '";? ?° '"""«"«'« P^Po'o 
 little precaution Xrefe ° njrr""'' *"" '" "'"'"' *« 'ook 
 a»d, on the other case" towl" f °"""^^™ '"o""' '"""d, 
 
 be allowed a docu-meTwhir 'wrK r"'^ '"°""'"' 
 his personal vigilance. '° "^® '<* escapo 
 
 CrSTOBT or SEil 0» CoWiST. 
 
 tio^s°:tt"«tt1 S l"; ^'"'^'^' ^-' -*"-» «". <.«e. 
 corporation Lk H i 1 1 ITT^ 'T '" ""« """"^y »' 
 issued notes within easy wacH '" '°"™ "8"'^ "" ""■ 
 
 be overcome by entic'n^ telt. P°""°' """^ ?""•='?'» ""ay 
 company be lZTl^^Z:Z ZT'^ "''""' ^^ » 
 seal, and may require persons „l,Tfc ^* """'^J' »' it* 
 
 exchange for th'at whrappTatl " bf """ '"'"' '"""'^ "^ 
 document to look to the crfrnlTi . P"'P°'''^ *'=«""e'l 
 And such seems, unfortonTi 1 T '°' ""'■• ™«sfaction. 
 
 fled in the House ofTlr^sbvS''! ^ 'f f""" ^' '''« J"»«- 
 "Now we ,11 conm,^ ■'^ " ^"''« '" 'bis way:> 
 
 ;See U Geo. 8 (I,of.). ch. 7«. S 8& Ou,.n» . ».._ . . 
 
 -occ i nomas on Negiiirenceflihff. xr V^ ""rgess, id. 75; Dean v 
 
 Boofl, V. M.«..t (.A U M.?^: "S'? "f ^ 5 P- C ft B. «&° 
 
7' 
 
 64 
 
 CONDITION NO. & 
 
 which it is kept, and a servant or stranger should take it up, it is impo«si> 
 ble, in our opinion, to contend that a banker paying his forged check 
 would be entitled to charge his customer with that payment" 
 
 The question, "To what extent is it to go?" has been fre- 
 quently re-echoed in later cases ;^ but the answer is not diffi- 
 cult, and is to be found in the phrase "an appropriate meas- 
 ure of prudence." Such a principle supplies also a ready reply 
 to the learned Baron's other questions: (1) It would not be 
 contended that an owner of goods would be estopped were 
 they stolen by a servant and sold, for possession of the goods 
 by the servant in no way misleads the purchaser. The master, 
 therefore, has in no way accredited the title of the servant; he 
 has in no way assisted the servant's misrepresentation of own- 
 <^rship; he has not omitted to observe an appropriate measure 
 of prudence.' Nor (2) would the owner of a check-book be 
 estopped were it stolen and his signature forged. Ownership 
 of a check-book cannot be said to be the disregard of " an ap- 
 propriate measure of prudence." Vary this last case a little: 
 sgppose that the check-book owner signed a lot of checks in 
 blank and left them so as " to offer obvious opportunity " for 
 their theft, and that they were stolen and cashed by the banker; 
 should not the signer be estopped from denying the making of 
 the checks? There would be crime in both cases. 
 
 The case was followed with some misgiving in Jfayor, etc. v. 
 £ankofEnglandj*'Wi\li9t 3., saying: 
 
 "But for that case I should have thought that the mode of keeping the 
 seal was eminently calculated to facilitate if not to invite the commission 
 of forgery." » 
 
 But the law is as stated by Baron Parke. The present writer 
 trusts, however, that the method of avoiding it adopted in 
 Shaw V. Port Philip* (although unavailing in a subsequent 
 case') may end in its overthrow. In that case the company 
 was held bound by its seal, although fraudulently affixed by 
 the secretary, because the secretary had been " held out by the 
 company as their agent to warrant the genuineness of the cer- 
 tificate." 
 
 1 Development of the law has fre- 
 quently been impeded by such a 
 question. A good example of the 
 argument is to be found in the 
 judgment of Grose, J., in Pasley v. 
 Freeman (1739), 3 T. R. 5% 
 
 'See oh. XXL • 
 
 •(1887) 21 Q. R D. 160; 67 I* J. Q. 
 E418. 
 
 *(1884) 18 Q. R D. 108; 88 I* J. Q. 
 B.369. 
 
 •Mayor v. Bank of England (1887), 
 24 Q. a D. m; 67 L. J. y. a 418. 
 
B'SBEOAM, OF SOME DIHT. 
 
 *;::': .t "-"^-^ »' » X ; err ' ""^ '''"'«'- 
 
 ground that any negligence intL }\ " P^^wds upon the 
 
 wbioh IS another point, and ig Kl J" "*" "'"'« »' "• 
 
 In the meanwhile it fa "orrh n^ ~ ?*"" '""■' 
 
 "'»ry with the key of vour ' r ^« """ '"■«'"? your sec 
 
 i« theft of yonr dete tur^I ^t " J"""'"""^ ^onnit^ wfth 
 
 »ga.nst a pu.^haaer fromThe^. ° """ °°' y°" ««« '<> them « 
 
 So'-biiity... it i, «.id; b„f:e'th,';,7e°er ""'^'•°""<' »' "- 
 
 EoBBEB Stamps. 
 ihe introduction of rubb*,. ... 
 
 7' We, T the dictum of Baron P».t^ "^^ '"«»• '» "o-nmer- 
 «'«>• In olden days when 2. ' " ""« W-ed to them 
 t-res, them was obU^orof ™LT "^ -■"^^'«' »' 4n« 
 'mposed upon the o^e^of th^m "'i^ "' '° ""'' ""st^S^ 
 
 r ; ""^y '»"« "is stamp wherTver h ,"''"' "=* '»" «■« » 
 ■nstruments to which it mav h- . TJ" P'™**. ""d plead to 
 -ight to suppose that . rimeS'l^ """ "-ery'^ufaL" 
 •"t on that belief;" (2) that "if ,i ^ "ommitted, and to 
 Wy of the seal (;tamp), it L velr "" "'^'o"' '° "-o ou^ 
 the aot; " and (3) that ?he ne^wl? """"''^ """""oW ^vith 
 connected with, the transfer fi^!^,"""" '"' '"'<» i-mediaTl 
 ^ama gentleman has Tr^dy ^c ™ dT' ^'"" ^ P«"«^^ 
 ''I'-ch his stamp had been frardTn '^ "P"" « «''«*'t„ 
 
 lawful to have a stamp "a„dh^ *PP"^' '^o^ "it s 
 <"'tto a check is not "the „^T ""^ '""""ulent affl,^' 
 -V negligeuee in its custod;.. """^ ""' P~'"""« 'es "t " „? . 
 
 MisoErxAKEoffs Cases ra Vhiob V„ v 
 , Throughout this volume i„ th7 ""'• 
 
 found numerous cases iuwh ch bt.' •^'''''''^ P'*"". «•« be 
 '"•-ess or disclosu™ has btn afflr:::;'^T, '"'"""y «' -'- 
 'S«ch.ix onirmed. There are a few de- 
 
 5 0^1;.?°?1«<' ^- London nSM, 
 
 i;S8U 31 Q. R n ,^ ,„^ „ , , „ 
 
 
 45«; 40 Atl R 96ft 
 
«(} 
 
 CONDITION NO. 9, 
 
 tacbed authorities in which the existence of duty has been 
 denie<l that may be conveniently collected here. The attempts 
 in them to impose obligation to action are instructive as show- 
 ing the length to which it has been thought possible to carry 
 the doctrine of an appropriate measure of prudence. 
 
 (1851) Mangles v. Dixon} A ship owner assigned "the 
 amount due" upon a charter-party to a third person; the as- 
 signee gave notice of the assignment to the charterer, who did 
 not volunteer the information that the charter-party was some- 
 what misleading, and that " the amount due " was in reality 
 not as much as that shown by the document. No estoppel; for 
 the charterer was not bound to assume that the assignee was 
 unaware of the true situation. There was no duty to volunteer 
 information to one who probably already had it. 
 
 (1857) Simpson v. Accidental^ etc? After the death of an 
 insured person, the insurance company refrained from inform- 
 ing the executors that a premium was overdue, and that non- 
 payment for a few more days would vitiate the policy. HeUJ, 
 that there was no duty upon the part of the company to proffer 
 the information. 
 
 (1871) Smith V. Hughes* Defendant agreed to buy some 
 new oats believing that they were old oats. Ho bought by 
 sample, and the seller said nothing to mislead the purchaser. 
 
 Heidi that 
 
 " The passive acquiescence of the seller in the self-deception of the buyer 
 did not entitle the latter to avoid the contract" " Whatever may be the 
 case in a court of morals, there is no legal obligation on the vendor to in- 
 form the purchaser that he is under a mistake, not induced by the act of 
 the vendor." 
 
 (1876) Polah v. Everett* A surety stood by while the cred- 
 itor, by dealing with the debtor, released him. No duty ta 
 
 warn the creditor: 
 
 "To say that a person who, being a surety, becomes aware that the cred- 
 itor is going to give time or do something else which if done without his 
 assent may discharge him, is bound to warn the creditor against doing it, 
 is a thing for which no authority whatever has been cited." 
 
 (1886) Clark v. Eckroyd? Vendors shipped the goods sold^ 
 
 but the purchasers never received them owing to their being 
 
 1 8 H. ]L C. 702. And see reference 
 to this case in ch. XL 
 2 2 C. B. N. a 257; 26 L. J. C. P. 389. 
 8(1871) L. R. Q. R 697; 40 L. J. 
 
 ♦ (1876) 1 Q. R D. 669; 45 L. J. Q. R 
 365. 
 
 » 12 Ont App. 423. And see Dur- 
 rant v. Ecclesiastical, eta (1880), 6 
 
 T/.»««.»«- r> n r» nttA. ra t t r* 
 
 i^twjj^t- '^1 «^ j-'t vtrx, w xjj VI "tgi 
 
 
 ance (1892), 23 Ont 73. See, however, federation ▼. Merchants (1894), 10- 
 oh. VL Man. 69. 
 
 be 
 of 
 im 
 
W8KEOARD or 80MK DlTT. ' 
 
 carriers for unpaid charges Tt w^ "'' '""' •*«" 'o''' by the 
 <■«' the purchaser had b^Llnt rr'™*"^ "^ ""> ^-^or 
 
 h d beeu received, and tu'uhu, he'rr'"'.'''''' '""^ 8»°<"» 
 into security and deprived of a„ ^ """^ '"^ '««■' ""Hed 
 
 goods. ^M^ tfc,, tl;„rchas" T"""''^ °' """^^^g tl« 
 ny.ng receipt of the gois: """ ""' «»'0PP«1 '^om d J 
 
 J-'iAt it Was tinf' ^* 
 
 SuATMAar. 
 
 ««»« which the orimTaalt^i"! "T" """go'^er denied ia 
 toother... "Thepreve„tl:S"!''''r"'''"^"''''™ 
 
 --..e^r^^^^^^^^ 
 
 «/»e,thet tTd rr c^a",' C? ^ ""''"' *"» '"'--ntion 
 f »t party from the buSeu ofth, '"""^ '" ^"o '"e neX 
 duty has brought about ' "' '°^' '''""'' ^^ disregar^'of 
 
 ^-,.t;t\rirr,:yiuX^^^^^ 
 
 '"f 'h; ««rcise of «an appropr^lTir ° f » ■•■"« ■^'■i'- 
 
 8. A large number of welwS^ ™ "' prudence.'' 
 only by the acceptance exnt.!^ • °^^ "" >« supported 
 ^ 9. WithoutsucLruJeTnT'^ ?''"'?"«''' Of suoha^ull 
 be impossible. WithouHrJ'tr' ">.»' '"rts, social iifo ^t,,, 
 oi estoppel, financial and'comr.""?'"^ P^'^'P'^ in the law 
 '"■peded and distracted '"'""°''™'" olairs would be much 
 

 i 
 
 CHAPTER VI. 
 CONDITION NO. 4 
 
 The Misrepresentation Must he as to Fact or ZaUf Not as to 
 
 Intention or Opinion. 
 
 Fact and Intention. 
 
 Lord Selborne in Maddiaon v. Alderaon^ said: 
 
 "The doctrine of estoppel br representation is applicable onlj to repre- 
 sentations as to some stale of facts alleged to be at the time actually in 
 existence, and not to promises de futuro, which if binding at all must be 
 binding as contracta" 
 
 Jorden v. Money* is the leading authority: 
 
 "When a person possesses a legal riKht, a court of equity will not inter- 
 fere to restrain him from enforcing it, though between the time of its crea- 
 tion and that of his attempt to enforce it he has made representations of 
 his intention to abandon it. Nor will equity interfere even though the 
 
 Earties to whom these representations were made have acted on them, and 
 ave in full belief in them entered into irrevocable engagements. To raise 
 an equity in such a case there must be a misrepresentation of existing 
 facts, and not of mere intention." 
 
 In that case Lord Cranworth said : 
 
 " I think that that doctrine (the doctrine of estoppel) does not apply to 
 a case where the representation is not a representation of fact, but a state- 
 ment of something which the party intenas or does not intend to da In 
 the former case it is a contract, in tb" !atter it is not" 
 
 Intention Yay Involve Fact. — }. Tpresentaticri 98 to inten- 
 tion may, however, under ce 't:i.iu cficuiiistances oe a represen- 
 tation of fact. For example, in Edgington v. Fitzmaurice* & 
 prospectus stated that " the objects of the present issue are " 
 to make certain purchases and alterations; whereas the real in- 
 
 1(1888) 8 App. Ca& 478; S3 L. J. 
 Q. B. 787. And see Prole v. Soady 
 (185T 2 Giff. 1; Piggott v. Stratton 
 (186:,, 1 De O., F. & J. 83; 29 L. J. 
 Ch. 8; Orr ▼. Orr (1874), 21 Or. 897; 
 Merchants' Bank ▼. Lucas (1888), 15 
 Ont App. 686; 18 S. C. Can. 705; 
 Langdon t. Docd (1865), 93 Masa 
 488; White t. Ashton (1878), 61 N. T. 
 
 *(1864) 5 H. L, Cas. 185; 88 L. J. 
 
 Ch. 865; approved in Citizens v. First 
 Nat Bank (1873X L. R. 6 H. L. 852; 48 
 L. J. Ch. 269, and Chadwick v. Man- 
 ning (1896X A. C. 281 ; 65 L. J. P. C. 42. 
 See Keating t. Orme (1874), 77 Pa. 
 St 89; Jackson y, Allen (1876). 120 
 Masa 64. 
 
 >(1885) 29 Ch. D. 459; 65 L. J. Ch. 
 G50; Old Colony v. Dubuque (1898), 
 
 Art ■■:«- .1 •w% m^%4 
 
 07 XeU. £U iVit 
 
»ACr, LAW, tXTENTION, OPINION. ^g 
 
 tention was to pay off liabilitiAfl Tn „ 
 
 ton, L. J, said: ''^^'^'^'^'' .^"^ ^^ action of decei , Oct. 
 
 thi;t'fhrSerXl IhS inlnTJfuroi^J"* "^'«'»''"' o' «n intention. ., , 
 make the defendant, ibirtStrpTaTnUff °?"''^ *°l° ^•'^'^'^* ™Sid no 
 nnent of intention, but it is nAvr/).!,;?.. , .. ^ '*«'"^® that it was a state- 
 not be fairly »aid thJt the objeTJ ofth^e l^lLtX f{"'*' ""-^ ' ''^ -^^ 
 
 iiowen.L. J., m another case 'said- 
 ^j^;The .tate of a man', mind i, aa mu.h a fact aa the .tat. of hi, dige- 
 
 1 ought to be estopped as against ray interlocutor from don; 
 
 any con.ideration, thSugh Effectual alf 5 "p'*® *">*• ""supported by 
 agreement, yet. if the sSretrhw bLen fndn^l^f ' ^'^^^ merdyasaJ 
 neglect any of the means wfiichmSht h2veK«l'^^ "f^ an assurance to 
 SJlr'*'"^'^ may have that effect af an etton^tJ^ ^^ for his indemnity, 
 tract, and amount to a defenw acrainst Ani «?,^ "^'' '^ " ^a"t» aa a coni 
 the creditor." "etense against any subsequt t action brought by 
 
 But the answer to thw is aonarent if tu ^ i_ , 
 
 'Preston ; Mann ffli r„l „. » '^'^ """^'' <^ '• Whoatp v. 
 
 I»A li 88 N. E. R 467, 2^t. I'l ^jl^'Ofh-rd v.B.te.(185SX 
 Baim (18M), 87 Tei. 582; 27 a W R ^ n^i^«S>'? f i* "'• * ^ *»' ""» 
 Ta s!'"^ '• '^'""' ""'"^- ^ ^ » E.; «; 19 U J. Ex. 
 
70 
 
 OONDinON NO. 4 
 
 duced to change his position, for he knew perfectly well that 
 
 the creditor was not bound by the assurance and was at liberty 
 
 to change his mind at any time. Stephen, J., in Alderaon v. 
 
 Maddison^ said : 
 
 '• The difference between the classes of misrepresentation which do and 
 do not bind seems to me plain. To say, ' I have cancelled this bond,' 'vhen 
 you have not, is to tell an untruth. To say, ' I intend to cancel this bond,' 
 is to make a statement as to a present movable intention. If a person 
 cliooses to act on such a representation without having it reduced to the 
 form of a binding contract, he knows, or ought to know, that he takes his 
 chance of the promisor changing his mind." 
 
 An assurance which may be withdrawn the next or any suc- 
 ceeding minute cannot be alleged as a ground for change of 
 action. If it be urged that the creditor may have observed that 
 the surety was refraining from enforcing his remedies, the reply 
 is that the case (if thus altered) may have become one of con- 
 tract — one in which there is a consideration because of the 
 detriment sustained " with the consent, express or implied, of 
 the defendant." i , 
 
 In another case' it is said: 
 
 "If one having a right to redeem real estate under mortgage assures a 
 proposed purchaser of the fee that he will not redeem, and this assurance is 
 ^ven for the purpose of inducing such purchaser to buy, and he is thereby 
 induced to buy, the owner of the right will be estopped afterward to en- 
 force It against the purchaser or his assignees." 
 
 But this is not estoppel at all, but contract pure and simple. 
 " In consideration of your assurance that you would not redeem 
 I became the purchaser." If there be no contract, the language 
 cannot form the ground of estoppel, for it was known to be an 
 expression of intention merely and so not binding — known to 
 be nothing. It could not therefore be put forward as a reason for 
 a change of position ; and a change of position upon the faith 
 of another's assertion is necessary to estoppel.' 
 
 Distinction must be made between the representation, "I 
 
 1(1880) 6 Ex. D. 803; 49 L. J. Ex. 
 801. 
 
 2 Southard v. Sutton (1878), 68 Me. 
 675. There are many other cases. 
 Some of them almost avowedly pro- 
 ceed upon contract, and are not 
 quite open to the criticism of the 
 text Others directly support the 
 doctrine under consideration. See 
 Harris v. Brooks (1838), 88 Mass. 195; 
 Whitn V. IVnlkAr (■\nm\ Ri Til 400. 
 
 ■ ■■ ■■ \-'- — rt *" *''' "-—"^1 
 
 Reimeosnyder v. Qans (1885), 110 Pa. 
 
 St. 17; 3 Atl R. 425; College v. Tut- 
 tle (1887), 71 Iowa, 596; 33 N. W. R. 
 74; Moore v. Trimmer (1890), 85 8. C. 
 608; 11 S. E. R. 548; Shroeder v. 
 Young (1896), 161 U. S. 834; 16 S. C. 
 R. 518; Ricketts v. Scothorn (1898), 
 67 Neb. 6; 77 N. W. R 865; Gilbert 
 V. Richardson (1898), 51 a W. R 134 
 (Tenn.). Some of these are clear cases 
 of contract. 
 
 1C1_ U ITT 
 
 - i.?cc v'u. .a.u 
 
FACT, LAW, INTENTION, OPINION. ' /^^ 
 
 cause the™ is o>U L„l:«tVb„?^\tTttt''''''' •■'■ 
 
 one of two tuZ- (nuZ "1""'°°' .*". *^" "" ™»y mean 
 the present time^ h„; „„";"? f."^" '«""« <" "■;»<! and at 
 (2) "I p™n,ise yon Zt I Xn 't°lr"'°'^ -"-"""""" "' 
 former langna^ were us«lTl f."* "^ °^''"" " ">« 
 
 if the latter ef^rrolt^Jd "7° '"^^'^'"PP''"' """» 
 will be found to te eUheHn on^ f ™ ''°""^'"- ^'='' <^ 
 
 There are several JalTinrh T^'^ " '"" ""'''•' 
 by the owner ofTrowry baT hfw",1 ""^"""^ "^ '^"' S*™" 
 of iMf another ^rCtm^^l^^^ r^t ^'T'"™ 
 consideration is clearly stated in one of thl • • '"'"" "^ *" 
 
 binding contract; and if the nlSfff „♦ "'''^ conduct that will mafcA « 
 
 ut]l:rb:ttsreuhr''''r'''^'^'''''™p-«-- 
 
 ss'J*? "A J- "" "««* « Oiff- «»; (I8M^V''r ,^"^""" '• William. 
 W4) L R 19 E,. 174; 44 L /ch « R ^ 4 . ^.^ "■ *"' « t- * 
 
 Cta467i53I.J.fta,i,/'''*»l' 
 

 ■ 
 
 72 
 
 CONDITION NO. 4. 
 
 principle of action. For example, if a surety may rely upoi* 
 a creditor's expressed intention not to sue the debtor, although 
 there is no contract to that effect, why may not a policy-holder 
 rely upon the insurance company's expressed intention to no- 
 tify him of the due-date of the premiums, although there is no- 
 contract to that effect? Ought the company to be estopped 
 from saying that any premiums ever fell due if its intention is- 
 not carried out, and for years no premiums are paid?* 
 
 Fact and Opinion. 
 
 All that need be said as to the distinction between fact and' 
 opinion is to be found in a judgment of Garbert, J. : ' 
 
 "The general rule is that a representation cannot form the '>t i<s of an 
 S«„'"'TS'^'i?l^° 'ff* '' •™'''^^* *°? matter of fact as distinguisii'ed from, 
 ^ni^ Jk® *Ik®*""^ *"f ^ '° "^^^""e ^^^ distinction. The true S 
 appears to be that a fraudulent misrepresentation canuot itself be the 
 mere expression of an opinion entertained by the party makine it- but 
 where such party makes a statement which might otherwise be only an 
 
 H8l?mrifo?A°®^°°**^*^*?*'^?* J''® '"«''® expression of his opinion, but 
 affirms it as a fact material to the transaction to which it relates, so that- 
 the person to whom it is addressed may reasonably treat it as a fact and 
 mlTinn nf*ff "?°'' It accordingly, then such statement becomes an afflr- 
 ^^T,y^L^ ^**''' '^'**"'i *i?® meaning of the general rule, and may be a. 
 fraudulent misrepresentation. 8 Pom. Eq. Jur., 2d ed., § 878.) If theVe^ 
 8trf,nHniT»f ^H °^ '"^*' * character that they will blar either the^Sl 
 struotion that they were expressions of opinion or statements of fact the 
 "^A^^^^JLi^Hl"^ ^^^y ^®'"« °»"s* ^ decided by the jury (a Suth. Dam Sd 
 ed §1167; Teaguey Irwin. 127 Masa 217; Sterne v. Shiw, 124 ]W 69)- 
 but in order to justify a finding that they were representotionfoMact' 
 oteir'^rf^Wh'r"*" »"^°«P«bIe of knowledge, is distSgufshed from 
 fvl 8 r»/^.®?o''p°*^'l,"r?ir?.*.®'"°« ^' Shaw, supra; Nounnan y. Land 
 Co., 8 CaL 1; 22 Pac. R. 515; Williams y. MoFkdden, 28 Fla. 147- 1 a r1 
 61b; Parker v. Moulton, 114 Mass. 99.) " ' ***•"- 
 
 Fact and Law. 
 
 Two reasons have been put forward in support of the asser- 
 tion that no relief can be grounded upon misrepresentation 
 of law: (1) that everybody is assumed to know the law, and 
 therefore there can be no effective misrepresentation of itr 
 and (2) that nobody should depend or act upon what another 
 person asserts to be the law, for it is a matter of opinion only. 
 
 J See Insurance Ca v. Mowry (1877), 
 96 XT. a Mi. Something in such 
 £ases may be said in favor of waiver 
 of punctual payment as a ground of 
 forfeiture. Chicago t. Werner (1875), 
 80 III 410; Insurance Co. v. Eggleston 
 (1877), 96 U. a 672; Lyon y. Travel- 
 
 lers (1884X 65 Mich. 141; 20 N. W. R. 
 829. 
 
 » American Nat Bank y. Ham- 
 mond (1898). 55 Pac. R. 1090 (Cola). 
 And see Akin v. Kellogg (1890), lift* 
 N.Y.44a Incidentally the subject is- 
 recurred to in a later part of the 
 preSeut chapter. 
 
FACT, LAW, INTENTION, OPINION. 
 
 eve' ^rpo^^fr:-^rrt"''r°''p«''-' ««" -» 
 
 fact than that propomLh^r ^ "Pf^'""" '» i-dubitable 
 quoted oaae of S"." ztX- '='"""-™«'' » «"> oft- 
 
 and together with all faZ«r„'r°~ "'*''' »''''» ««'S»^" 
 rid of before the law can t S?'^t ''•" """' ^ «<" ^«'' 
 The flotioa is Zprdtll ^ "" ,f '™«fl<»"ly arranged, 
 partment of orimTNo d„„t T'"^ '^'»"''"« '" "■« "«- 
 was ignorant ofTelawVe Ijhr " """l ""^ """"^ 
 to answer him. Bnt wln^^ft »?• 'T'""8 ''''"'^with 
 .bsn«i as to presume to b^tte Tt ih . M'""' '""^ '' ^ 
 to be false. It is QnC^mlJ ], "^ ""'"' "' ">«'» '="°'v 
 feoaind bin. that ^U.ZZ f so^t 3 .7.7 ""'' '° 
 
 asstixrrora^'tr^^^^^^^^^^^ 
 
 its modification and oonSctbt: LIT ^^ *" '""""^ 
 ons inwhioh the plain W,h ?.',.? ""* "'"'°' »" """■e'- 
 law has been alwS to ^er t^ " lT> '" "'" '°<»' '"^ 
 to be absolutely true, then? c„ "^'U iT^I no'^'*''" 
 misrepresentaUon as to a matter of \JZT "° '*"""'» 
 would always W that thetaCell'^eTbr wtS^ 
 
 '(1803) 3 East. 47a 
 jPulIen V. Ready (1748), 3 Atk. 
 oyi; Lewis V. Jones (1825). 4 B. & O 
 513; Midland Ry. v. Johnson (1858).' 
 LS ^ ^- ®^^' Rashdall V. Ford 
 (1860) L. R. 3 Eq. 754; 35 L. J. Ch 
 
 Eq.9l;41L.J.Ch. 784; Pollock on 
 Contracts^ 405; Kerr on Fraud (8d 
 ecl.X 53; Chand on Consent, 90, 91- 
 " - -xuxvco i^iaiK), u Man. 146; 
 
 ?^'/^ ^/ Gh. 785. And see Camp, 
 bell V. Edwards (1876). 34 Gr. 175 
 
 606; 3 L. J. K. B. O. a 27. And see 
 per Lord Chelmsford in Midland v 
 Johnson (1858). 6 H. L. C. 811; and 
 perGwvniiA J i« r-..,- _ J . 
 
 (1876), 26 U. C. C. P. 439; Cole v. 
 Pope (1898), 29 S. C. Can. 291. 
 
u 
 
 CONDITION NO. 4. 
 
 I 
 
 im 
 
 But surely this is trifling with the truth, and treating as in- 
 controvertible that which is frequently said in satire or jest. 
 The law may be open to disparaging remark because of its 
 proverbial uncertainty, but it is worse than unfortunate if our 
 only reply is that the chaise is untrue— unless indeed we do 
 verily believe that everybody is so perfectly familiar with every 
 pomt which can possibly arise that it is inconceivable that, even 
 under pressure of weightiest assertion, any one can ever make 
 ^ mistake about it. 
 
 Consider too whether it would not be more reasonable to 
 hold that every man must be taken to be cognizant of the facts 
 with reference to which he is dealing than that "every man 
 must be taken to be cognizant of the law." And yet that is 
 never an answer to a man who complains that the facts have 
 t)een misrepresented to him; nor is he told that he could with 
 ^'ordinary vigilance and attention" have tested the matter for 
 himself.* 
 
 11. Zaw a Matter of Opinion.— This becomes apparent when 
 -we turn to the other reason for denying relief in cases of mis- 
 representation of law, namely, that law is a matter of opinion 
 only, and that therefore no one ought to depend or act upon 
 another person's representation of it. In other words (and 
 with much greater truth than in the former case), the law is 
 very uncertain; if anybody makes an assertion as to it, he may 
 bo right or he may be wrong; he is merely giving you his opin- 
 ion; and you must not act upon that— you should go and in- 
 quire as best you can. 
 
 "A representation of what the law will or will not permit to be done in 
 one on which the party to whom it is made has no rigG to reK- andTf he 
 does so it » his folly, and he cannot ask the law to relieve hiV.; from thf 
 oonsequenoes. The truth or falsehood of suira repStat?on Tn hi 
 tested by ordinary vigilance and attention. It is an opinion in regard to 
 the law, and is always understood as such." a «P»nion in regard to 
 
 If a representation of law was always accompanied, expressly 
 -or impliedly, by the remark that it was given as a matter of 
 opinion only, much could be said for this view; but the author- 
 ities supply us with many cases in which precisely the opposite 
 remark is made or implied — cases in which, by purposely and 
 strenuously misstating the law, a fraud is accomplished. 
 
 iBloomenthal v. Ford (1897), A. G 
 158; 66 L. J. Ch. 858; David v. Park 
 <18?0), 103 Mttsa oOi. And see oh. XI, 
 'Sub-tit "Means of knowledge." 
 
 « Fish V. Clelland (1864), 88 111. 24a 
 And see Starr v. Bennett (1845). a 
 Hill (N. Y.), 808; Upton v. Tribilowjk 
 (1875), 91 U. S. 45., 
 
WOT, Liw, INTEHTIOK, OPramK. ^j 
 
 One can easily nnderstand that if a on<.»f i«n ..■ 
 
 construction of a document as trthe IS "^ "'""' "■« 
 
 -and she should sav th«. ,.' '"^ "S"' "'» "Oman to dower, 
 
 wonld not jnstifTacdon h^ r ""l "''*"'»<' '» "' ■"" "'"""k 
 tranrfeiible, "^ """ "* <'«'«"ta«s were legally 
 
 onfruirto^^^l-^tri:*"' ff-'^'-'- - tohave 
 "Presentati^rof C that T; star.""" *'"'""'' ''^ *° ""»■ 
 
 olear understanding^ w the Hiff T '° """^ '° '°"« 
 
 example, in one v1^.Tt I *''*"*°<» between them. For 
 
 structbn ot Z^^^°'tf '^ " ""^ »« '"at « the eon- 
 itwasthonghnhXri^r??r.'''''''''»"''''''»*^»"'l 
 facV e.en If yon have Ioa2 ??''""'"? '^ " """«" »' 
 documents; foraSthon^h?, * " ^"'"' *' ""-struction of 
 
 result also if ma^r oftw-'^rie" I^^I "'' '"'' "^ "■« 
 because of mistake m £ ,'i, "■"'«""> ">ird relief was given 
 
 ChelmsfordltHng tht .^mTtrfff " ■^«.°-'. ^r" 
 doubtful construction of a „1T' .. ''"/"""g "pon the 
 
 tace of a weU.k"not Xlp^r^ LT-^ ~"' ''^ '"« 
 
 law, or of fact as the reJltTf ' ""*' " "atement of 
 
 panyhad repr:::tdr 'th re' ^ ?„f' *"? ""■"-- 
 rendering the shares nnas^rWc ' th»t"* "' '" """'«' 
 And will it become one of C if tl ' """'^ "^ '«<*» 
 
 butofdoubtfulinterprlteit/Trnt/r'rT''''''''''™ 
 -nt that their comU has p^r 'to' tr Ibrr ^ 
 
 JFairweather v. Archbald Mfifls^ ,,..« ""ures, is 
 
 15 Gr. 255. And see fitebl on £ J S'S!? ^'f'^' ' ^''- ^- ^»3; 45 L. 
 toppel (5th ed.). 57a ^ °^ °° ^ f'^- 809 See also Barber v. dark 
 
 ' Per Kay. L. J., in Re Romford R ,?' ^" ^°*- '^^^^ ^« O"*- ^pp. 436; 
 
 And see ch. XXIV, sub-tit « NeJtZ t^^. ?^' ^'°^ ^' ^^oo^ttle (1858), 1 
 
 bflitybyestoppel."citingGoSt Z2\ST^' ''' '"''''''• ^^ ^^n- 
 Roberts, and other casea « Jl *<^^! Po^eroy, Eq. Jur. 1176. 
 
 C '«*!f ';•* r "^"'^"^^^ <'8o8), 6 H. L. 6 H L "t"*"^ ^^ ^'"° ^^^^^^ ^^ «• 
 r.5.*'_ ^"^ see Powell V. Smith fLr:T _ . 
 
I,\ 
 
 76 
 
 t.» 
 
 ooNonroN ko. 4 
 
 that a representation as to law or fact? Possibly either or 
 both. For it is said that if the reason why the company had- 
 not such power was that sufficient stock (a pre-requisite of 
 debentures) had not been stbscribed, the representation was 
 one of law ; but if the right to issue had accrued and, « having 
 exhausted that power, the directors had stated that they stUl 
 had power to issue debentures," the representation would have 
 been one of fact.* And what is to be said of a representation 
 that a patent is valid when the point is whether it is for a 
 "new and useful" invention ;* or a representation that a man 
 is a shareholder in a company ; » or a representation that a writ 
 has been "returned in due form of law;* or a representation 
 that A. is the wife of B. ? Perhaps this is the best that can be 
 said : 
 
 " There is not a single fact connected with personal status that does not 
 more or less involve a question of law. If you state that a man is the eldest 
 5k^4.°;i.* "»»5"a8e' yo" state a question of law, because you must know- 
 that there has been a valid niarriage, and that that man was the first-born 
 son after the marriage, or in some countries before. Therefore, to state 
 that It IS not a representation of fact seems to arise from a confusion of 
 ideaa It is not the less a fact because that fact involves some knowledire 
 or relation of law. There is hardly any fact which does not involve it. If 
 you state that a man is m possession of an estate of ten thousand pound* 
 a year, the notion of possession is a legal notion and involves knowledee 
 oflaw; nor can any other fact in connection with property be stated whwh 
 l^iZf *"'!?^''^ *"5'^ knowledge oflaw. To state that a Ian is entitkdto 
 ten thousand pounds consols involves all sorts of law." » 
 
 We see now sufficiently the difficulties which confront those 
 who assert that relief will be given as against mistakes of fact 
 but not as against mistakes of law. Categories have to be 
 made; for we have not got them, but only the promise of im- 
 mense difficulty in their construction. 
 
 There are moreover two very important points to be noticed 
 in connection with the maxim Ignorantia juris hand excusat, 
 if "the word Vw*' is used in the sense of denoting general 
 law," as Lord Westbury declares is the correct sense of it;» 
 or if, as Lord Chelmsford has it, the maxim applies only to 
 "ignorance of a well-known rule of law." " 
 
 iRashdall v. Ford (1866X L. R 3 
 Eq. 750; 85 I* J. Ch. 769. 
 
 *VermiIypa v. Canniff (1886X 13 
 Ont 164; Hub^r v. Ouggenheimer 
 (1898), 89 Fed. R 59a 
 
 » Broughton v. Hutt (1858), 8 De G. 
 & J. 560; 28 L J= Gh. 167. 
 
 Bennett (1848), 6 HiU 
 
 < Starr v. 
 (N. Y.), 303, 
 
 8Eaglesfleld v. Londonderry (1876). 
 4 Ch. D. 702. 
 
 "Cooper V. Phibbs (1867), L. R 2 
 H. L. 170; 45 L. J. Ch. 809. 
 
 • Mfdlaad V. Johnson (iS5S), 6 H. 
 I. C. 811. 
 
FACT, LAW, INTENTIOir, OPINION. , 77 
 
 "ThJdir l' *^t '"^^°'''"' ^'^ S^°''3^'« Equity : 
 t^^^^T^nS^^^^^ of a plain and settled prin. 
 
 18 not of Itself very intelligible, or nract r»^fJ »^»»?^ * foundation of title, 
 o^' Tfr'^ •" " ^^Vnd^nTeleSnLTrr'iToJ'u^ '"'^ °' "P^^"' 
 
 in5yK'S,lro?i:,;et/^."!ll »» K.„eral,v known 
 
 posmon, cental iml«&litr, <»■ oonldenoe abufed""' """"^ "'»''™«' "»• 
 VV6 thus seem to arrive at the conclusions that th« ™..: 
 
 r:':™(rotrfuror^^--";(f^^^^ 
 
 but that the distinction is aC ^iZT, '^"°"' ^""'"'"'y ' " 
 
 =:.2h^^nr9tfP^^^^^^ 
 
 to he familiar wirtr rain'S^erK ^^^^^^^^^ 
 
 ;t:ir ^it" %t '° -^^-'^'^ -^»t" eS' i^-^^r 
 
 posiuon to It. This presumption that "everv man mu«f hi 
 
 i^^gu^;rmit?nV^'""''"'?--'^^^^^^^^^^^ 
 elusion'- Tfe^s^^h^tthr/rr::^?^' ''- ""■'• 
 
 .entaUon of law, but as we have already ^M "[he ^Z"'" 
 numerous in which the plain fact that thi^i ^d noTlnow 
 the law has been allowed to assert itself • " and it il ^^ 
 " well aelt w that where there b a ml.t.tr„# ,' *""""■'<"' 
 positive fraud on the other or l„.!!.I?.fiS "V"" '"' ''°» •f<ie. «»« either 
 whioh tend, to oonflrm tS mietaki iSl L!;-""'?'.^''^ "•"'Ptive ooSduoJ 
 «nd daty ot equity to award relM"? "" "''"''' " » "o right 
 
 This is made sufficiently clear by Zans^o^ „. z„„,<,^„ , 
 
 »18thed.l2a .17 ., ^ _ 
 
 »8neU'8 Eo- nuh -d^ a^^ .^. ., f ^^''*"<* ^- billets (1894). 141 
 
 -e Frigg V. Read a«4t'5 Hu4l " '' ''' «^ ^- ^ ^ «^ ' 
 
t.> 
 
 78 
 
 OOBTDITION NO. 4. 
 
 in 1750, a case of misrepresentation as to right of succession-* 
 Legge v. Croker in 1811, a case of misrepresentation as to a 
 right of way;' Champlain v. Laytin in 1836, a case of mis- 
 representation as to dedication;' Wheeler v. Smith in 1850 a 
 case of misrepresentation as to the effect of a will;* Southalt 
 V. Rigg m 1851, a case of misrepresentation of the liability of 
 an apprentice to make up deficiency in his master's fee;» Cow- 
 ard V. Hughes in 1855, a case of permitting a woman to believe 
 m her liability;' Jordan v. Stevca in 1863, a case of misrepre- 
 sentation as to the validity of a lease commencing infuturo''' 
 Earl Beauchamp v. Winn in 1S73,8 and Cooper v. Phippa in 
 1867,9 cases of purchasers buying their own property; Hirach- 
 field V. London in 1876, a case of misrepresentation as to ef- 
 fect of a release of damages;" Rart v. Swaine in 1877, a case 
 of misrepresentation as to tenure of land sold ; " Snell v. Inaur- 
 anoe Co. in 1878, a case of misrepresentation as to a policy in 
 the name of one partner covering the firm's interest; »2 Steward 
 V. Kennedy in 1890, a case of misrepresentation as to necessity 
 for "ratification of the court;"" and in Wilding v. SanderaL 
 m 1897, a case of misrepresentation as to the effect of a docu- 
 ment;" and many other cases.^' x 
 
 Eatoppel-ThQ cases relating to misrepresentation of law 
 have not so far involved the peculiar remedy of estoppel. They 
 have been those in which relief by rescission and restitution 
 principally have been awarded. There can be no doubt, how- 
 ever, that the principles involved in both classes of cases are so. 
 far similar that we are safe in applying (with some little cir- 
 cumspection) the authorities of the one when treatino' of the 
 other. ** 
 
 iMosely, 364; 2 J. & W. 205. See 
 reference in Stewart v. Stewart 
 (1838), 6 CI. & F. 960. 
 
 2 1 Ball & B. 506. 
 
 »6 Paige (N.Y.), 105. 
 
 *9 How. (U. a) 55. 
 
 «11C. B, 481. 
 
 «1K&J. 44a 
 
 ^51 Me. 79. 
 
 8L.R6H.Li33a 
 
 9L.R8ttL.l49. Seep. 164. 
 
 l»3Q. B. D. 1; 46L. J. Q. B.94 
 i'7 Ch. Div. 43; 47 K J. Ch. 5. 
 
 1298 IT. S. 85. 
 »15App. Caa 108. 
 "(1897) 3 Ch. 584; 66 L. J. Ch. 467, 
 634. 
 
 "Laing v. Taylor (1876), 26 U. C. 
 C. P. 430; approved in Brown v. Hol- 
 land (1885), 9 Ont 57; Champlin v. 
 Laytin (1838X 6 Paige (N. Y.), 195, in 
 which it is suggested that the ground 
 of relief is fraud rather than igno-^ 
 ranee of the law; Qoodenow v. Ewer 
 
 (1860). 16 CaL 461^ Rno-<ra « Wo,.™ 
 
 id. 5C0. 
 
TACT, LAW, INTENTIOy, OPINION. *JQ 
 
 Jnnocent Misrepresentation. ^Betove leaving the lubiect it 
 should be noted that it is not at all necessarv for relieftha 
 the misrepresentation should be fraudulent, in innocent rais 
 representation is just as disastrous to the person Seceive^a 
 
 top'pe" "'' ''^"'°^'^ '^^ '' '' '^^-^y - Srouna for e" 
 »Snell V. Insurance Ca (1878), 08 U. a 85. And soe ch. VIIL 
 
 4«7, 
 
CHAPTER VII. 
 
 'I 
 
 CONDITION NO. 5. 
 
 The Misrepresentation Must be of Something Material 
 
 tinUl T °^'^''^"3^ *« *l"°t« °»"ch anthority for the proposi- 
 tion that a misrepresentation to have any effect upon the rela- 
 tions of parties must be as to something ^hich might have 
 affected those relations. ® 
 
 €stop^™*"" *"'«*'^' ^'^^^'^ ^ °«'t»^" traversable nor material, shall not 
 
 The test of materiality may be stated as follows- 
 
 flentetioTgiifng Sir^fo^tL'^rr^T'^K''''"'''"''*"''' *»-'** i» » «Pre- 
 which appfar'stl meTbS th" '^.,r?onot'^ ftl SnThioh*?^:^'^*"*-^" ^^^ 
 
 Or, in the language of Pollock on Contracts:' 
 
 moT«'J°"r'°^ 'I ^u"^ ^ ^"^''^ ^^^^' ^*«« ^°d '^presents a 
 more rigid view of the matter: 
 
 de<;iSo?iacK;S^^^^ "bitrary or accidental 
 
 directed by certain precedents ind r.^ul f^""^*^ are governed or at least 
 state at present that^the f rSSd must be mSi^f .n^^lf'' *' 'f «"ffi«ient to 
 action which is to be avoided- for ff i? rP^fl . "*' ^°}^^ contract or trans- 
 only in a trivial anXimportant way i? afforl^nn ***" '°?V^"' ?"• *« *'»« 
 of the court It must, therefore rS !?i«Ki ° ^''5^°'^ ^'' ^^^ action 
 tract and aflfect its ve^ essenc^and subt^"- V°^^^ ^"^ *'>« con- 
 
 standard by which to determine whethl??h^r„,!'i u'^ll " °° P°«^*'^« 
 not No better rule can be^ivpn fnr A^Jii- ^fu"** ^^ **^"s material or 
 the fraud be such tL^L^ ii^««f k ***<''<^'?« the question than this: If 
 have bSen mTde or the tranSS?f ^ ?«?*^*«* could not 
 
 but if it be shown or mlde^Sbie th«Tt^» It*^' "l^*? *' '^ ™*»">«1 to it; 
 done in the same w^- if tFie fraud ^^^^^^^ 
 
 deemed material. Wither the™ aud^ material ^''T^'^''' *=^°"°» ^ 
 be. on the decided weight of authority a Zp«h.S ?' otherwise seems to 
 question of law; but it is obvS thafin S °" ^or the jury and not a 
 swer this question witUlt inTuVttVfr^rt^heTou^J/'V"^ «*°°°' «"" 
 
 » Vin. Ah, VOL X p. 432. 
 
 » Per Romilly, M. R, in Pulsford v. 
 Eichards (1853X 17 Beav., 98; 83 I* 
 J. Ch. 558. 
 
 »6th ed., p. 56a For examples as 
 
 to materiality, see Leake on Con- 
 tracts (13th ed.), 813 sq., and Royal 
 Ins. Ca V. Byers (1885). 9 Ont 120. 
 
 *Per Miller, J., in McAleer v. 
 Horsey (1871), 33 Md. 453. And see 
 
8, 
 
 ■clistinotlv and direXto Vh. ""!'^'"-'»"="'««<'° must "relat'e 
 bis identity (by Tern, oL7""°"'. ""'"'^■''■"•er concealed 
 
 vendor, and pr«ured hif vendor J "^'"l '"''^'-' '»■• ^i' 
 purchaser. The sub-puXetL^idT™^ "'r' '° "'» '"'- 
 inqoirios had he been a,™r^ of 1^, ^^^T'^^ """"' "arefnl 
 to rescind his agreement* °°"' *'" ""= "»'<' ««'itled 
 
 bee':^:,,tTby™'Ln''fo';1t'^'^" " --P--.atio„ has 
 his misstatement wa S,m te,W '^hT"''',': *° °"'"«-' '"»' 
 him to disprove the^^^rC' """^ ""^ """"y "PO" 
 
 -„ aistinctio„ ^etlr-SrasVtt „:Sro? 
 
 f M& '■ °°««°°'"""' 0898). 88 Fed. 
 
 ^Hutchinson v. Calder (18831 i 
 versed on amMal h.,f ^-.* .. 
 
 ground that-^ucTa-n;-;-;:;::;^^;;! 
 
 tion would not be material Id. ISl 
 6 
 
 4 iJe a, J. & s. 818; 48 L. J. Ch 521 • 
 
 •Per Lord Cranworth in p .. 
 
 1^ See post, Ob. XL 
 
S2 
 
 CONDITION NO. d. 
 
 misrepresentations and questions as to whether a change of 
 position took place upon the faith of such misrepresentations. 
 Bat it may be said that a change of position upon the faith of 
 a misrepresentation proves its materiality. And, given a ma- 
 terial misrepresentation, followed by a change, and the propter 
 will be easily inferred. There are cases, too, in which neither 
 factor is palpably existent, and presumptions have to be re- 
 sorted to. 
 
 Assisted Misrepresentation. — It is obvious that in oases of 
 assisted misrepresentation, not only must the misrepresenta- 
 tion have been material, but the assistance also must have been 
 of such character as to have influenced the result. The for- 
 mula adopted in this work to express the requisite relation be- 
 tween the assistance rendered by the estoppel-denier and the 
 action of tho estoppel-asserter is that the change of position 
 must be reasonably consequent upon the assistance. This sub- 
 ject is treated in a subsequent chapter.' 
 
 »Ch.XIII. ' 
 
CHAPTER VIII. 
 CONDITION NO. 4 
 Fmui or Bad Faith U m Emntial. ' 
 
 i" it? or may it be o, nlrf^.w? ™ ^ '"'"' "' ""d f*"" 
 ".er, i, a much deepe~f„r?r"n "'"'™°'"' I""'"'', 
 reoting our ethical inmiirv ! ?• ^ *"^ ""' """"S"" o*) di- 
 .a«on at .11, but to th'SiTe "'h "°V° '"<■ ""-P'-o"- 
 
 Misrepresentation may be foundtT.. 
 l"": (1) Deceit, (2) ^^^ritil^Zt'^T'^l''' '""'« 
 our .ur,ey of it the better „e sh:,! u'ulttnTit ^'^ """ 
 
 I. MiSRBPBESENTATION AND DeoEIT 
 
 fol Wi!*"""'' '»' <" ->-«"» of an estoppel' contain, the 
 
 relation to thVf^t.°if"°tf °'™™««S in whfch 'f?„Th"» ""■" 
 
 w Mie lacisf, be was bound to knnar *t^i ^"^^'^' trom his peculiar 
 
 it ^Tbrja = "•' " ~ ""' -- ™^ur:fX5. .. 
 
 .„. , . ''"' '"" ""»'» «=■■'»»»' «■« pos. 
 
 «e WiUmott .. Barber £,? „ Ch "' ''"°« "'°" «'«'»■■ •• acoui. 
 
\.\ 
 
 84 
 
 CONDITTON NO. 6. 
 
 sible cases, for they include eases where a representation has ' 
 been made which is known to be false, and those in which it is 
 made " without knowing whether it was true or false." It is 
 useless then to inquire whether the asserter " was bound to 
 know the true state of things;" for whether he was or was' 
 not so bound he is estopped (1) if he make a representation 
 which he knows to be false, and (2) which may be false.^ 
 
 2. The present writer cannot agree either that an action of 
 deceit will lie merely because the misrepresenter " was bound 
 to know the true state of things" in the absence of that fraud 
 which would place the instance in one of the other categories. 
 In the leading case of Derry v. Peek,* Lord Herschell said : 
 
 "I think the authorities establish the following propositions: First, in 
 order to establish an action of deceit, tliere must be proof of fraud, and 
 nothing short of that will »affice. Secondly, fraud is proved when it is 
 shown that a false representation has been made, (1) knowingly, (2) with- 
 out belief in its truth, or (3) recklessly, careless whether it be true or false. 
 Although I have treated the second and third as distinct cases, I think the 
 third IS but an instance of the second, for one who makes a statement 
 under such circumstances can have no real belief* in the truth of what he 
 statea" 
 
 And although the learned judge refers to cases in which "a 
 person within whose province it lay to know a particular fact," 
 it is " only for the purpose of putting them aside " as being « in 
 an altogether diflFerent category from actions to recover dam- 
 ages for false representations, such as we are dealing with." 
 
 3. Nor can the present writer agree that for "estoppel the 
 same things are requisite" as in the action of deceit. The lat- 
 
 knew his statements to be untrue, 
 are but different methods of stating 
 the same ultimate fact, viz. knowl- 
 edge. McBeth V. Craddock, 28 Ma 
 Appb 880; De Lay v. Carney Bros., 
 100 Iowa. 687; 69 N. W. R 105&" 
 
 a (1889) 14 A. G 857; 68 I* J. Ch. 
 864. See the Derry v. Peek scholia 
 cited with it in ch. XVL 
 
 * As to this point of reality of be- 
 lief see AUcroft v. Bishop of Lon- 
 don (1889), 28 Q. R D. 414; 88 L. J. 
 Q. R 885; 24 Q. B. D. 818; 5» L. J. 
 Q. R 169; (1891) A. C. 666; 61 L. J. 
 Q. R 68; Angus v. Clifford (1891), 2 
 Ch. 449; 60 L. J. Ch. 448; White v. 
 oaffc Ktav;:), iv urn. App. io5; Turner 
 V. Francis (1894X 10 Man. 840; 88 & C. 
 Can. 110. 
 
 ' In Watson v. Jones, 25 a R 683 
 (Fla.), it is said: "We are therefore 
 of opinion that proof of scienter in 
 the third phase does not give another 
 or different right or ground of ac- 
 tion from that given by proof under 
 the first phase, but that it simply es- 
 tablishes the same ultimate fact, viz. 
 knowledge, by a different class of 
 evidence; and consequently that an 
 allegation that defendant 'knew' 
 his representation to be false is prov- 
 able by evidence embraced in the 
 third phase. In other words, an aver- 
 ment that defendant's situation or 
 means of knowledge were such as 
 
 nia<1a it lita Att^mw tf^ !>•.<>... _.I..^|. 
 
 his statement was true or false, and 
 An averment that defendant well 
 
FRAUD NOT ESSENTIAL. 
 
 tation has 
 vhich it is 
 56." It is 
 
 bound to 
 as or was 
 3sentation 
 Ise.i 
 
 action of 
 'as bound 
 ibat fraud 
 ategories. 
 1 said : 
 
 is: First, in 
 fraud, and 
 
 when it is 
 ly, (2) with, 
 rue or false. 
 I think the 
 i statement 
 
 of what he 
 
 wbich "a 
 liar fact," 
 being " in 
 )ver dam- 
 ig with." 
 oppel the 
 The lat- 
 he untrue, 
 I of stating 
 viz. knowl- 
 >ck, 28 Ma 
 rney Bros., 
 L 1051" 
 3 I* J. Ch. 
 jek scholia 
 
 ality of be- 
 >p of Lon> 
 4; 68 L. J. 
 8; 69 L. J. 
 «; 61 L. J. 
 rd (1801), 2 
 : White v. 
 oai Turner 
 I40;S6&C. 
 
 85 
 
 ter, as we have just seen, must be based upon "fraud, and noth- 
 ing short of tbat will suffice." » In estoppd, on the o her hand 
 as we shall abundantly see, a perfectly innocent misrepresenta! 
 t on, or even innocent assistance rendered to a misrepresenta- 
 tion of another person, may be quite sufficient for estoppel.' 
 
 II. MiSKEPEESBNTATION AND RESCISSION. 
 
 In some cases of misrepresentation rescission of the contract 
 
 "I tl?.^ ' '" '""'' '^'^'' '' ^''P^'^i^^ by Lord Herscbell: » 
 
 tion^'el^ViSffie'Sife^i?^^^^^^^ .T»> - ac 
 
 rescission of a contracnnttLaroZTnfS^^^^ one brought to obtain 
 fact The principlerwh?d/wv^e7n^h« L^*f ?''*'^'°'*°'?.°' » material 
 Where resc^ission^is claiSedTte onlv n«l^^^^^ are widely different. 
 misrepiBsentation; tLnXo^e^r&^t^T^.^vJ^'°''t^^''^^^'^'^ '^«« 
 ever /ree from h\amethrwK^B X.!iZJi?^^l ^^^ 
 obtained by m.isrepresentatff SnnSt stenl In SnTcSS'ni??"*^^" 
 the contrary, it is not ennncrh *« oofoKiifu • *" action of deceit, on 
 conceded on all hLds tS^meU,ini^«« mwrepresentation alone; it is 
 
 upon the defSndanMhoSgrehi^&na "^^^ 
 
 ditional elements are leqSsite." of controversy what ad- 
 
 HI. MiSEEPBBSENTATION AND EsTOPPEL. 
 
 Misrepresentation as a basis for an action of deceit then 
 must according to the present state of the law, be fraudulent. 
 Un the other hand, misrepresentation as a ground for rescission 
 
 * Reference, of course, is made to 
 the present state of the law. See, 
 however, the chapter on Deceit, 
 ch. XVL 
 
 'Mr. Bigelow at page 629, note 1, 
 himself says: "As there need not be 
 any actual design that the repre- 
 sentation should be acted upon, 
 there need be no design to defraud." 
 »Derry v. Peek (1889), 14 App. Ca& 
 859; 68 L. J. Ch. 864; Reese v. Smith 
 (1869), L. R 4 H. L. 81; 89 U J. Ch. 
 855 (per Lord Cairns); Petrie v 
 Guelph, 11 a G Can. 450; Jordan v. 
 Provincial (1898), 28 a C. Can. 664; 
 Budd V. McLaughlin (1896), 10 Man. 
 75. A very capable jurist (Strong, 
 C. J.) has sugirested a distinction be^ 
 tween executed and executory con- 
 tracts, holding that for rescission of 
 the former the misrepresentation 
 
 must be fraudulent (as in deceit^ 
 but otherwise where the contract 
 remains executory. Bell v. Macklin 
 (1889X 15 a C. Can. 581. This may 
 at all events be said: That rescission 
 ought to include restoration to the 
 status quo ante; that where the con- 
 tract has been executed, complete 
 restoration is frequently impossible; 
 and that if there has been bad faith 
 the court might be less careful upon 
 that point than if the misrepresen- 
 tation had been made innocently. 
 If the point is well taken it will in- 
 volve the consideration of contracts 
 partly executed; and perhaps a dis- 
 tinction as to the heinousness of 
 the fraud as coiapai'ed with the com- 
 plexities of the change of position — 
 perhaps to the exercise of judicial 
 discretion in such cases. 
 
86 
 
 CONDITION NO. 6. 
 
 of a contract may be innocent. What is the l&w with refer- 
 ence to misrepresentation as a ground of estoppel? 
 
 Diverse Views. — Upon such a fundamental point as the ne- 
 cessity for fraud as an element of estoppel we would expect to ^ 
 find the authorities agreed. For plainly little can be done 
 towards a philosophy of estoppel without settlement of this 
 main question, Is moral culpability essential to estoppel? 
 
 In Smith's Loading Cases it is said : 
 
 "But if the representation was made under a mistake, and in ignorance 
 of the facts, there will be no estoppel." i 
 
 Story's Equity has the following: 
 
 "This doctrine of estoppel in paia in ordinary oases grows out of a 
 fraudulent purpose and a fraudulent result"' 
 
 In a Canadian case it is said : 
 
 "The general rule is that fraud is necessary to the existence of an es- 
 toppel by conduct The person must have been deceived; the party to 
 whom the representation is made must have been ignorant of the truth of 
 the matter, and the representation must have been made with knowledge 
 of the facta"* 
 
 And in the United States Supreme Court it is said that: 
 
 "For the application of that doctrine there must generally be some in- 
 tended deception in the conduct or declaration of the party to be estopped, . 
 or such gross negligence on his part as to amount to cor tructive fraud 
 by which another has been misled to his injury."* 
 
 Upon the other hand there is in many cases the flattest con- 
 tradiction of this doctrine. For example Lord Cran worth said : • 
 
 "It is not necessary that the party making the representation should 
 know that it was false; no fraud need have been intended." 
 
 loth Am. ed., Ill, 2116. And see 
 Holcomb V. Boynton (1894), 151 111. 
 294; 87 N. R R. 1081. 
 
 «13th ed. 1544. The cases in the 
 United States are conflicting. In 
 favor of the above quotation may be 
 found: Hill v. Epley (1838), 81 Pa. St 
 881; Biddle Boggs v. Merced (1859), 
 14 Cal. 867; Zuchtman v. Roberts 
 (1871), 109 Mass. 58; Stephens v. Den- 
 nett (1873), 51 N. H. 834; Brant v. 
 Virginia (1876). 93 U. S. 885; Staton 
 V. Bryant (1877), 55 Misa 201; King- 
 man v. Graham (1881), 51 Wis. 333; 
 8 N. W. R 181; Powell v. Rogers 
 (1«83), 105 IlL 823; De Berry v. 
 Wheeler (1895), 128 Ma 34; 30 S. W. 
 
 •D 
 
 
 
 (1895), 13 Utah, 1; 40 Pac. R 70i 
 It is sometimes thought that negli 
 
 gence as evidence of fraud will suf> 
 fice. Sullivan v. Colly (1896), 18 C 
 a A. 193; 71 Fed. R 460. For the 
 contrary opinion: Pitcher v. Dove 
 (1884), 99 Ind. 175, 178; Trustees v. 
 Smith (1890), 118 N. Y. 640; 23 N. E. 
 R 1102; Stiff V. Ashton (1891), 156 
 Mas* 130; 39 N. E. R 208; Moore v. 
 Brownfield (1894), 10 Wash. 489; 89 
 Pao. R US, And see cases cited 
 with Brant v, Virginia, post, ch. XII. 
 »Per Ferguson, J., in McQee v. 
 Kane (1887), 14 Ont 284. And see 
 Howard v. Hudson (1858), d K & E 
 11; 33L. J. Q. B. 841. 
 
 * Brant v. Virginia (1876), 98 U. a 
 885. 
 
 * Jorden v. Money (iSoi), S H. Lb 
 a 213; 88 L. J. Ch. 86& 
 
FBADD NOT ESSBNTIAL. 
 
 87 
 
 And Lord Cairns said : 
 
 ^roiiZ'^TJ&^Tey^^^^^^^^ to which they 
 
 I^Z Su^^^'' ^« -^-^'>'^« - SfThe7 haY:S *rt^dS ^U^h^lLnneC' 
 
 bndbXf f--f«^--.-- Attempts have been made to rec- 
 oncile these conflicting views by retaining the word "fraud » 
 4nd dispensing with its reality -in this ingenious fashion * 
 
 ^d conduct would render itTfSud for H.«^-'^^°**' ^i"® circumstances 
 p-eviou8lv induced or suffered anoHi/rLKi^*"^*^ *^ ^^^^ ^^at he had 
 tae door fs shut against aSeS^ a rrJ.ff^°K^®''®''®,.*°"* tal^e ac«on upon; 
 jary by the party^Srt?5 It K.^^^ n.h J** '^*'"'** '««"'* '» <ioing anin! 
 science and lionest dealinl he oSt nn? *' ^"°°' °^ ^"^^^ »" ?ood con- 
 fl-evious conduct This is sufflcSJo^* *^ '^ permitted to gainsay his 
 3ement of moral wronl ISd tS na«7?? *'' estoppel and bring in the 
 <t evil design." 8 ^' ^ *''"® °®®'* ^ »<> preoeaent, corrupt motive 
 
 i It Will be observed that the reconciliation is effected bv re 
 
 &?' ZtT'^' '^^"^ ^°^ ^"^ ^^ ''^ trantctl^n To 
 Tn. ; r.l T *^^ "Misrepresentation, which may now be 
 
 tS; eVt rT' ''' '"''^' "'•^^' ^^ permitted wouW 
 ^utrwoilH h" T '^' '"^^"^^ purpose to the final result. 
 
 Cement if morT '' T-^''^ *^ ^^^ ^^^* *^«^^ «^"«^ be an 
 Ln«r* u i '^'^'"^ '"^ * ^^b'^'" before he can be com- 
 
 Sin wh'I th '^^'^-"''^^ -- -St be one (it would be 
 ^d) in which the circumstances and conduct would render it 
 a fn.ud for the party to deny (payment of) what he had pr 
 
 "fraud »r\'' '"''''*'' ^"^^*^«^ '«" 1-^ ^^' This word 
 fraud, after being emptied of all meaning, is often usJd [n 
 
 w?u Id rr ^''^^ "'r' ^^ ^"P^^'^°^^'^ undetood, but whi h 
 would be clear enough were it completely omitted » We can 
 
 d^pense with it here. A little care in distinction and clLTfi' 
 oationis all that is necessary. ^ »"u wassin- 
 
 ^econciliation.-'Readers will remember that misrepresen 
 
 rrmrbe^^rr^"^^ ^^ ^^^^^^^^'-^ thaUhTasI; 
 ^nce may be either active or passive.* Leaving the proof to 
 
 'Reese v. Smith (1889), L. R 4 H 
 L. 70; 891. J. Ch. 849. And see per 
 -Jessel, M. R, in Eagleslield v. Lon- 
 donderry (1876), 4 Ch. D. 704. 
 
 'Herman on Estoppel and Res Ju- 
 uicata. see. 77R. An<i »««. d-** 
 
 ■V. Lytle (1849X 1 Jones. 63; Dezell v. 
 Odell (1848), 8 Hill, 316; Hill v. Epley 
 <1858).8lPa.St.884 
 
 •See ch& XVIII and XIX. 
 
 *Ante. p. la Assisted misrepre- 
 sentation occurs where the misrep- 
 resentation has been made by some 
 third person, but it has been made 
 credible by some act or omission — 
 by some assistance, of the estoppel- 
 denier. This assistance may be ao- 
 tive, as where a mortgagee hands to 
 
88 
 
 OONDITIOK NO. 61 
 
 follow let it be at once said: (1) that where the misrepresen- 
 tation is that of the estoppel-denier (personal misrepresenta- 
 tion), a misrepresentation will not the less work an estopped 
 because it is honest and innocent; (2) that where the misrepre- 
 sentation is that of a third party (assisted misrepresentation)^ 
 the assistance, if active, will not the less work an estoppel be- 
 cause it was rendered honestly and innocently; (3) and that 
 the dicta which require culpability or bad faith as a pre-requisite 
 of estoppel must be confined to cases of assisted misrepresent 
 tation where the assistance is of passive sort. 
 
 If with this classification in view the authorities are again 
 consulted the conflict among them will almost entirely disap- 
 pear. "Where, as in Story or the United States Supreme Court, 
 it is asserted that fraud is requisite to estoppel, it will be found 
 that the kind of estoppel in view was that usually referred to as 
 estoppel by standing-by, that is to say, cases of misrepresenta- 
 tion by passive assistance. And when Lord Granworth and 
 many others deny the essentiality of fraud, it will be found 
 that they are speaking with reference to cases of personal mis- 
 representation, or those when the assistance is active. 
 
 Applying then the dicta to their particular cases merely, we 
 might be led to say generally with Lord Granworth, that " no. 
 fraud need have been intended," but that cases of standing-by 
 seem to be an exception to the rula 
 
 Misrepresentation by Passive Assistance. 
 
 When, however, we examine more closely this exception we 
 shall see that it is such in appearance merely. "We shall find 
 indeed that there must be culpability in all cases of standing- 
 by, but, carefully distinguishing, we shall discover that it is a 
 requisite of existence of the misrepresentation, and not at all 
 an essential element in the estoppel. In .other words, there i» 
 culpability in such cases because they are a category of cul- 
 pable actions, and not because fraud or evil intent is necessary 
 to estoppel. 
 
 Whether estoppel will ensue when an owner of land stands- 
 
 the mortgagor the title deeds, and, where the owner of property standi 
 
 thus equipped, the mortgagor rep- by while it is sold to another to &»; 
 
 resents himself as unincumbered innocent purchaser. 
 owner. Or it may be passive, as 
 
FBAUD NOT ESSENTIAL. y gj^ 
 
 by while it 1-8 sold f . an innocent purchaser depends, no doubt, 
 upon whether the by-stander intended to ni^slead; and tocl 
 hastily It may be said that the case shows therefore that fraud 
 
 VnT'fu '^ '^" T^^'^' ^"* '' ^"«t b« -b^erved that 
 fraud (m the case m hand) is necessary to the existence of the 
 
 misrepresentation on the part of the by-stander; and all that 
 can be said as to the estoppel is that there must be a misrep- 
 resentation - moral quality of it unessential. 
 
 The point is important. Observe what it is that I allege 
 when 1 silently stand by. Do I assert that I have no interest 
 n the property? If so, I would of course be estopped. But 
 that IS not the proper interpretation to put upon silence. In 
 America, at least, where land is designated almost exclusively 
 by figures, few property owners can bear in mind the descrii>. 
 tion of their holdings. If one of such persons witnessing a sale 
 of land were asketl whether he had an interest in it, his an- 
 swer would probably be: «I do not know; if you wish I will 
 look It up and tell you." By such a statement he would not 
 be estopped. Innocent silence means nothing further i* in- 
 deed It even goes as far as that.» In innocent silence, there, 
 fore, there is no misrepresentation or assistance to misrepre- 
 sentation. It therefore cannot estop. 
 
 Consider two of the leading dicta as to estoppel by standing, 
 by. In one important case Lord Cran worth said • « 
 
 take into whichht?^menitl^» i«T?^'f '\1*'*^V''^*» ^*««' ''^^ "»«- 
 adverse title; and S-itS^uldS dLl^Jl'^ii^ active and testate my 
 passive on such an ocMsion iJ, nrH«r -*» ®^* i° ""^ *° •'^'na>° wilfully 
 Which I mighFhJJe prevented" " a't^'wards to profit by the mistakj 
 
 And Chancellor Kent is to the same eflFect-» 
 
 pu^h^seXSd^Tvfibl? on. '^fer another to 
 
 of title without making know! hifJiHim h^ i?« ^^'l^'^^ous impres»ion 
 after to exorcise his le|»l 5ght\^1„"s?Sh ^^ia" ' ** ^'"'''''^ '""''"^ 
 
 » Willmott V. Barber (1880), 15 Ch. 
 D. 96; 43 1* J. Ch. 793; Low v. Bou- 
 verie (1891), 8 Ch. 83; 60 L J. Ch. 6.-54. 
 
 'Ramsden v. Dyson (1866), L. R. i 
 n. ift j-rv. J3UU see iiKtSC inaia, etc. 
 Ca V. Vincent (1740X 8 Atk. 83; Pick- 
 ard V. Sears (1887), 6 A. & E. 469; De 
 Bussohe V. Alt (1878), 8 Ch. D. 814; 
 
 47 L. J. Ch. 881; Gray v. McLennan 
 (1886), 8 Man. 887; Hill v. Epley (1868) 
 81 Pa. St 884. '' 
 
 •This statement of the law has 
 been widely adopted in the United 
 States. Bigelow on Estoppel (6th 
 ed.X p. 586, and note. 
 
•90 
 
 CONDITION NO. & 
 
 Observe the condition fop ostoppol: "When I saw the mis- 
 take into which he had fallen," or when I "suflFer another»'to 
 «ct « under an erroneous impression of title." Standing-by 
 merely will not estop, for although near-by I may not see that 
 there is any mistake or any erroneous impression — will not 
 •estop, therefore, because there is no misrepresentation. 
 
 In order to see « the mistake » three things seem to be requi- 
 
 ■SILO * 
 
 1. I must be aware of my own right. 
 
 2. The other party must be unaware of my right. 
 
 3. I must have reasonable ground for assuming the other 
 iparty's ignorance.* 
 
 A few cases will help to an appreciation of these points: 
 Wtllmoit V. Barber.^ A lease contained a clause prohibitive of 
 •sub-leasing; a sub-lease was made; the sub-lessee entered and 
 expended money to the knowledge of the head landlord; both 
 the head landlord and the sub-lessee were unaware of the pro- 
 hibitory clause: held, that the head landlord was not estopped 
 Observe that the head landlord had made no representation of 
 any kind. The utmost that was charged against him was that 
 he stood by and allowed his tenant's misrepresentation of a 
 right to sub-let to take effect. 
 
 This case illustrates two of the points in hand: (1) The es- 
 toppel-denier was unaware of his own right; and (2) he had no 
 reason for assuming that the other party was ignorant of that 
 which a prudent man would have ascertained. As to the first 
 of these, Fry, L. J., said: 
 
 isJnre^ofhfa'own'riihra^'r- °-^ *^« '?8»^ '*8^t' ™»8* know of the ex- 
 IhoSiStiff!" ^ ' ^^'""^ " inconsistent with the right claimed by . 
 
 And as to the second he added: 
 
 restrain Bouyer from exercising his legal right." cannot 
 
 Manfflea v. Dixon.' A ship-owner assigned "the amount 
 <lue to him under a certain charter-party; according to the 
 «hartei-party the amount due was|l,OuO; the assignee notified 
 the charterer of the assignment, and the charterer said noth- 
 
 toppel in ch. XI, sub tit " Means of 793. ** «. x^h. 
 
 Knowledge." » (1852) 8 H. L a 703. 
 
FEAUD NOT ESSENTIAL. 
 
 w the mis- 
 other " to 
 anding-by 
 >t see that 
 - will not 
 
 D. 
 
 I be requi- 
 
 ;he other 
 
 le points: 
 ibitive of 
 lered and 
 >rd; both 
 ' the pro- 
 jstopped. 
 tation of 
 was that 
 bion of a 
 
 I The es- 
 e had no . 
 b of that 
 the first 
 
 of the ex- 
 
 laimed by 
 
 snt man, 
 
 S6« » • • 
 
 ntiff was 
 I cannot 
 
 amoant 
 J to the 
 notified 
 d noth- 
 
 L.J. Cik 
 
 91 
 
 ^°^' . ^A^^'"^"^® "^'^^^ ""^^ "<^'^ t^i"k that he had an assign- 
 men of $1,000. The facts, however, were that the owner l^nd 
 char erer were jointly interested in the venture, although the 
 char er was otherwise drawn; $500 therefore, and not $1,000. 
 was the amount due from the charterer to the owner The 
 assignee, having relied on the charter-party, claimed that the 
 -charterer was estopped from denying liability for the whole 
 
 til: V, ! "'^'^ ^^* ^^ ^^^ "^«'«^ ^y a document executed 
 by the charterer and by the fact that when he gave notice of 
 
 V^TScT ''"'"" '"^""' ^'^ misrepresentation 
 
 Separate the grounds: First, the charter-party was mislead- 
 ing Yes, but that was a contract between two persons who 
 perfec ly understood one another. It was a chose in acting 
 ^nd a trans er o the debt evidenced by it would carry with i 
 ■all the equities;; the assignee knew this, and knew that there 
 ^ight be equities; he made no inquiries; no' estoppel, there- 
 fore, thus far. Secondly, when notice of the assignment was 
 
 f ^to hil th r.r'' ""'' ^' ^"""^ '" ''^''^ ^^*^«"* question 
 put to h m, that there were equities? The House of llrds re- 
 
 phed m the negative- the charterer was not bound toTsumt 
 
 Z '"T' 'n'!; " ''""^ ^'^ ^^^'^ P^««*^°«^ ''P-- tt^e assignee; 
 he might wel have taken it that he had satisfied himse/as to 
 the true position of the matter; he was not aware of the a^ 
 «ignee's ignorance.' ^ 
 
 Proctor V Bennis} This was also a case of standing-by. It 
 ^as c aimed that a patentee was estopped from setting up his 
 parent as against persons who had purchased an infrindng 
 tnachme. And it was suggested by Cotton, L. J., as a"efsof 
 
 SITT^' '''^^ ''^ ^^'^^'^'^-^ - reason I \':^Z 
 that the purchaser was unaware of the patentee's rights, kt 
 ^ tinguishmg between estoppel by passive assistance and estop! 
 pel^by personal misrepresentation, Mr. Bigelow says of this 
 

 I 
 
 92 
 
 CONDITION NO. 6L 
 
 fSnirS^TJr tBe'nVir" *^ ""Tn ^?- «"PP<««^by Lord Justice Cpt. 
 
 The auctioneer case is totally different; it is one of personal 
 misrepresentation; the auctioneer himself makes the repre- 
 sentation; and the only requisite for estoppel is that position 
 should have been ohapged upon the faith of the representation, 
 in the patent case there was no misrepresentation by the estop- 
 pel-denier, and the question involved is, Under what circum- 
 stonces 18 it "ray duty to be active?" And the answer is 
 When I see another person falling into mistake; and I see na 
 mistake unless I hf ve reason to believe that the other partv 
 does not understand ais situation. 
 
 It must be observed, too, that Lord Justice Cotton did not 
 suggest that an estoppel-denier must "know that the other 
 party is acting in ignorance."' He said : 
 
 The case involves two of the three points under consideration, 
 namely : (1) That the estoppel-asserter must be unaware Df tbe^ 
 estoppeWenier's right; and (2) That ihe estoppel-denier must 
 have had reasonable ground for believing in the other partv's. 
 Ignorance. *^ '' 
 
 Sumnjarizing, let it be observed that fraud or bad faith is not 
 essential to estoppel, although it is a necessary ingredient in 
 misrepresentation by passivity. There is not in such oases a 
 real exception to the general rule that for estoppel " no fraud 
 need have been intended." Upon the other hand, however, it 
 would be quite correct to say (in such cases) that there "must 
 have been knowledge actual or virtual of the facts," and that 
 he estoppe "grows out of a fraudulent purpose and a fraudu- 
 lent result.' Reconciliation of the conflicting dicta is acoom^ 
 plished by classification. . 
 
 » Mr. Justice Fry, in another case 
 (Willmott V. Barber (1880), 15 Ch. D. 
 96; 43 L. J. Ch. 792), puts the point 
 more strongly: "Fourthly, the de- 
 fendant. the possessor of the legal 
 right, must know of the plaintiflf's 
 mistakeu belief of his rights. If he 
 does not there is nothing which calls 
 upon him to assert his own right" 
 
 Were this language to Le taken ab- 
 solutely, it would be only in the very 
 rarest of cases that a bystander 
 could be estopped. He could always 
 urge that he attributed the purchas- 
 er's action to rash stunidit? '^■f -^--K 
 less aggression, and 'not"' to' igno- 
 rance. 
 
fbaud not. essential. 
 Personal Misrepresentaiton. 
 
 OS 
 
 It was unfortunate that the leading case of estoppel in pais 
 </ tcJcard V. Scars) > was a case of misrepresentation assisted by 
 passivity; for, that fact being overlooked, the rule there laid 
 down has been taken to be of general application.' It is this- 
 
 Juoes him to act on that belief so as^o alt^r hu nJ^n ® ?' thingfl and in- 
 
 The word « wilfully," or some other word indicative of a de- 
 sire to mislead -indicative of fraud, was there necessary; for 
 tne case, as we say, was one of passivity fin which fraud is nec- 
 essary to the fact of misrepresentation, although not to the law 
 of estoppel); but that the word was out of place in cases of 
 personal misrepresentation became apparent upon the first oo- 
 ^asion in which the rule was applied to an instance of that kind 
 Unfortunately, however, in that case the word itself was quali- 
 fled, or rather almost eliminated from the general definition, 
 instead of being left to its operation in the class of cases to 
 which It had been applied and to which it properly belonged. 
 This was said: «- r j 5 u. 
 
 »(1887)6A.&E.469. 
 'It is not here asserted that the 
 rule was not intended to be of gen- 
 eral application. No doubt its lan- 
 guage (" by his words or conduct ") 
 ^jovers cases of both active and pas- 
 sive misrepresentation. Two years 
 afterwards, however, the same court 
 had to deal with another case of 
 passive misrepresentation (Gregg v. 
 Wells (1839), 10 A. & K OT; 8 L. J. 
 Q. a 198), and the language there 
 used was carefully confined to that 
 ^lass of cases, and was intended to 
 supersede the expression in Piokard 
 ■V. Seara Lord Denman (the same 
 judge whose language is quoted 
 from in the earlier case) said in the 
 Joter: "Pickard v. Sears was in my 
 tnind at the time of the trial and the 
 
 principle of that case may be stated 
 even more broadly "—also more nar- 
 rowly— "than it is there laid down. 
 A party who negligently or culpably 
 stands by and allows another to con- 
 tract on the faith of an understand- 
 ing of a fact which he can contradict 
 cannot afterwards dispute that fact 
 in an action against the person 
 whom he has himself assisted in de- 
 ceiving." Estoppel by passive assist- 
 ance must be based on culpability. 
 Nothing is predicated of other sorts 
 of estoppel. 
 
 •Freeman v. Cooke (1848), 8 Ex. 654; 
 18 L, J. Ex. 114 And see Howard v. 
 Hudson nftRAV 9 PI j»- n t . on T r 
 
 Q. B, 841; Continental Bank v. N». 
 tional Bank (1872), 60 N. Y. 675. 
 
u 
 
 CONDITION NO. 6L 
 
 This language perfectly fits the case in which it was ased 
 (one Of personal misrepresentation); and the only objection to 
 It 18 that It assumes to alter a rule which had been formulated 
 m view of another class of cases (misrepresentation assisted by 
 passivity) m order to make it suitable for the one in hand. For 
 as the writer sees it, both rules were correct. In the case of 
 misrepresentation assisted by passivity, the misrepresentation 
 , m ust from Us nature (but for no other reason) be wilful ; whereas 
 m cases of personal misrepresentation (which may be either 
 honest or dishonest), it is sufficient that it was int;nded to be 
 acted upon. 
 
 In these oases of personal misrepresentation, then, we set 
 away altogether from any question of fraudulent intent in the- 
 misrepresentation And the question is merely, Did he intend 
 what he said or did to be acted upon? or, as we shall hereafter 
 more accurately put it. Had he reasonable ground for antici- 
 paU^ng a change of position in consequence of what he said or 
 
 ft ^^Zls^inlt^^^^^^^^ ?ood faith, if 
 
 between himW aJd tlKX*^' Jf hL%SfK'****''* *" ^"°*^ ^^ ''' '^ 
 
 Aotivelt Assisted Miseepeesbntation. 
 
 Cases of passive misrepresentation have already been dealt 
 with; and it has been shown that the bad faith which appears 
 m them is a requisite of the existence of the alleged misrepre- 
 sentation and not of any rule of estoppel. Personal misrenre- 
 sentation has just been disposed of. fire remains to be deaTt 
 wih those cases in which estoppel is claimed because of active^ 
 assistance rendered by the estoppel-denier 
 
 For example oases in which a railway company or a ware- 
 houseman ha^ issued delivery orders for goods which werl 
 never received, and some third person has\dvanced moneT 
 
 ; ^P^ShtdwS, V. C. in west v. ^d^^JZ'l ^SUV^N^^S* 
 
 J. Ch. sea And see per Parke R. in Anderson v. Hubbies a883 QH Tn^ 
 Freeman v. Cooke (1848). 8 Ex. 663: K7ft. r^.,^. „ t^. "_ _llll^J'iL'"^- 
 
 (1003), 8 H. I* C. 784; Low v. Bou- 
 
FRAUD NOT E8SENTIAU 
 
 9& 
 
 upon the representation of the holder of the orders (assisted by 
 the documents) that he was the owner of the goods > Or I 
 company has issued a certificate that A. was the owner of cer. 
 tarn shares a though he was not; and upon the representation 
 of A., assisted by the certificate, he has sold the shares to aa 
 nnocent purchaser.' Or a mortgagee has given up the deeds 
 to the mortgagor, who, thus equipped, has mortgaged the land 
 as though he were the unincumbered owner of it/ In all such 
 
 I fT" '^'' ^°' "^''^PP^^ "'^° ^'•^"d need have been in 
 tended on the part of the person to be estopped. HeTfre- 
 
 ^ Th ^ rl'T ^'''^'' '^^^ "■ '"^^'•epresentation has been made. 
 Indeed the law may with confidence be said to be that if 
 
 fraud immaterial, but that such excuses as oversight, or mis. 
 
 ^ra';rr'' ' u"' '^" "^^'^*""°^ ^^« *^« '^«"lt of deception 
 practiced upon him. will not avail the estoppel-denier. A few 
 ca^s from vahous departments of the law will be useful here 
 Mortgages.-. A mortgagor will be estopped as against an 
 
 sideration expressed m it has not been advanced to him, if ia 
 tJTAl ^^ ^°^«rsement upon it he has acknowledged 
 receipt of the money. In such a case Fry, L. J said- 
 
 those whom they trusted aK 8,uKL*^k- **?' ^^^^ ^^'^ deceived by 
 clear. But they were inVvJr.t LT *'^f °''Jects of sympathy, is equally 
 Bates, or Istle^ tTe means of dSceivl'n'J'^h*"'* ^^"'^^ '""A ^andS "f 
 the view of a court of eqSuy demeritl"? ^'^°^ *°** ^^^^ *'« *" 
 
 itfrSf!"'". "^ f""""-' ®^ '^'^ * '^'""P^"^ ^^"1 be estopped bv 
 Its certificate of ownership of shares, although the seal may 
 
 1': '^:?,^"^"^«"% affiled by the secretty of the oZ 
 pany, and the sig.iature of a director forged. The company 
 
 senu~^^' '''''"^' "'^"^'^'^^' '^^^^^^^ - *^« --P- 
 
 > Coventry v. Great Eastern (1883), 
 11 Q.B.D. 776:53L. J. Q. b. 694; 
 Henderson v. Williams (1895), 1 Q R 
 581; 64 1* J. Q. B. 308; Saderquist v. 
 Ontario (1887), 14 Ont. 586; Fourth 
 National v. Compress (1883), U Ma 
 App. 83a But see Second National 
 V. Wailbridge (1869), 19 Ohio St 419. 
 
 ^ Infra. 
 
 ^ Infra. 
 
 <Bickerton v. Walker (1885), 81 
 Ch. D. 151; 66 L. J. Ch. 837. Sefr 
 cases cited with this one in ch. IV. 
 
 »Shaw V. Port Philip (1884), ISO. 
 B. D. 103; 53 L. J. Q. B. 869. Dis- 
 tmguish Evans v. Bank of Ireland 
 
 ^ . ,. .., ^, . . a_;3^ _„y iaercftauts- 
 
 V. Bank of England (1887), 21 Q. R D. 
 160; 57 L. J. Q. B. 418, as pointed out 
 in the latter case. 
 
w 
 
 OONDmON NO. 8, 
 
 Oatensihle Ownership. — 
 
 contract, the person so clothetf mnv^^ro^ i *° chattels, in pursuance of a 
 Koodfaith purSer We are Xh'-^"^^'' '"' unimpeachable title to » 
 distinction in that regard between^hafVil-*"*'"^'" 1°?^ «°°^ ""»«»" '«' *> 
 be assigned by ndorSSent so «« iJl^il^^.V''^ ^""^^ instruments as may 
 title."' ^ 'nuorsement so as to give the assignee a complete legal 
 
 noMhat'a'jJjsoSjble ^eTs^n woTd' inl^Zf k"'''?^ intentionally or 
 5Ji«;«-"' ^" that^inSe:?e^'i;e'"sfilVra?te7rd"s X^'d^fe 
 
 Partnership.- A person who is induced by fraud to hold him- 
 self out as a partner cannot escape estoppel merely because he 
 was misled by the fraud.' 
 
 J/'w*^..- A trustee of a fund was asked as to its condition, 
 and replied erroneously, having forgotten that he had been 
 formerly advised of a charge upon it. His forgetfulness was 
 not «^lowed to avail him. He was estopped by his answer.* 
 
 JSegotiahU^' Inatruments.- An acceptor of a forged bill 
 who by his conduct had intimated to his banker that it was 
 genuine and would be presented for payment, was estopped 
 
 loss which has been the consequence '"• ' '*"«''' *° '*»'^ '*»« 
 
 Infancy. — 
 
 'Moore v. Moore (1887). 112 Ind. 158; 
 18 N. K R 07a And see Sheppard v. 
 Union Bank (1863), 81 L. J. Ex. 154; 
 Baines v. Swainson (1863), 83 L. J. Q. 
 a 281; Babcock v. Lawson (1880) 5 
 Q. a D. 884 ; 49 L J. Q. R 408; Kings- 
 ford V. Merry (1856), 11 Ex. 577; 1 H. 
 & N. 508; 26 L. J. Ex. 168; Pease v. 
 Gloaheo (1866), I li 1 P. a 289, 280- 
 25 I* J. P. c. 166; Root v. French 
 (1885), 18 Wend. 570. approved in 
 Henderson v. Williamis (1895), 1 Q R 
 539; 64 L. J. Q. R 808; Trustees v. 
 Smith (1890). 118 N. Y. 640. 88 N. E. 
 R. 1009; Bra-it v. Virginia (1876), 93 
 U. S. 827. And see the discussion in 
 ch. XX? 
 
 » Cornish v. Abington (1859), 4 H. 
 
 & N. 556; 88 L. J. Ex. 263; Sheppard 
 V. Union Bank (1868), 81 L. J. Ex. 
 154; Baines v. Swainson (1888), 83 L, 
 J. Q. B. 881. But see McGee v. Kane 
 (1887), 14 0nt. 234. 
 
 'Ellis V. Schmoeck (1889), 5 Bing. 
 581; 7 1* J. C. P. 231; CoUingwood v. 
 Berkeley (1883), 15 C. B. N. S. 145; 
 Maddick v. Marshall (1864), 16 C B 
 N. a 887; 17 id. 889. 
 
 * Burrowes v. Lock (18051 10 Ves. 
 470. 
 
 'Vagliano v. Bank of England 
 (1883), 22 Q. R D. 103; 58 L. J, Q R 
 27: 23 Q. R D. 843; 58 L. J. Q. R 357. 
 (1891) A. C. 107; 60 L. J, Q. R ]4A 
 
 Md. (1891), A. a 183; 60 L. J. Q. R 
 145. 
 
 miasm 
 
FKAL'D NOT ESSENTIAL. 
 
 07 
 
 l'^i°l^"iZ'afeiLfJ^^^^^ «'°-d of his minority, and 
 
 Mr. Pomekot's Point. 
 Mr. Pomeroy distinguishes between lands and ffoods • 
 
 in PrSe"d'?r^rat?tlSgr"£^ an owner'of tond 
 
 r^preMnMUons or coii(»slm.i.f kSSi 'J ''''"»«»» »' intent ODallr f«l8« 
 
 .«quitiible estoppel; "> ^^ " '"° ?«»« daj. treated as examples of 
 but he thiDks wrongly so, for the case is one which belong to 
 *al.erequuable doctrine, and "is confined to estatesinS '° 
 h reply ,t may be said: (1) It seems to be hard^ worth 
 while making a category of cases in which " fraud nlencoir^t 
 
 s3r. H T ?' T""^"""-" (2) It would be difflcu 1 1" 
 support a distinction between goods and lands with referent 
 
 1 "tl^ud *" "*'" "' "■" P""^ '"» »' estoppefor h" 
 sav. "' '*"^i» ""'"P^^-t^tioo. (3)Mr.Pomeriyhim. 
 
 >roZty "th^uv:"«; "r? ""'°°-' ^^y^^V an owner of 
 property , that this is •' a true estoppel in equity ; '• and that 
 .n such cases "a fraudulent intention to deceive or mMei^d is 
 not essential.... The result would thus be thalstandW bvin 
 silence without intent to defraud would estop, but ihSud. 
 ulent assertion to help the deception would not -at altevenU 
 
 belong to "earlier equitab' loctrine." "»<.woma 
 
 C)nolu8ioh; 
 
 Summarizing it may be said ^ 
 
 1. That fraud or bad faith is not a requisite of estoppel ; 
 
 2^ Although It IS often found in misrepresentation, wd is a 
 necessary element in cases of misrepresentation by passivity 
 and murepresentation is of course essential to estoppel^ ' 
 
 ' Wright V. Snow (1848), 2 De G. & 
 om. 821. 
 
 «OnEq.Jur., 860.805. 
 
 7 
 
 •Id., 860.807. 
 
 *Id., sea 818. 
 
CHAPTER IX. ^ 
 
 CONDITION NO. 7. 
 
 Negligence (Carelessness) is Sometimes JEssential 
 
 The subject of "Estoppel by Negligence" is in a most con- 
 fused and peculiar condition. Rules and amendments of rules 
 have been devised and elaborated by the judges; the authors 
 have been quoting, applying and illustrating those rules;' and 
 yet the principal writers on estoppel are far from sure whether 
 cases of estoppel by negligence can exist. If possible, at least 
 they "must be uncommon; »» and "it may be going too far to 
 say that in the nature of things there can be no such case.'" 
 The present writer believes that with the help of some short 
 preliminary investigations the subject can be made intelligible. 
 . Mgiigenoe.— Before entering upon an exposition of the sub- 
 ject, it is essentially necessary that we should arrive at an uri- 
 derstanding of the sense in which the word "negligence" is 
 being used. 
 
 It is to be regretted that the connotations of the term lead 
 off m two different directions. On the one hand, all neglect 
 ctf duty is negligence, and embraces, therefore, intended wrong 
 Upon the other hand the action of negligence is usually con- 
 sidered as being limited to that class of cases in which the act 
 complained of has been due rather to carelessness than to in- 
 tention. 
 
 Confusion has arisen from this double signification of the 
 •word. In one case,* for example. Lord Eldon spoke of 
 J-^hat gross negligence that amounts to evidence of a fraudulent inten- 
 
 Of which Fry, L. J., said» that the expression was 
 
 » Bigelow on Estoppel (5th ed.), 853- 
 659; Cabab6 on Estoppel, 98-104; Ev- 
 erest & Strode on Estoppel, 853-870; 
 Smith's Leading Cases (8th ed.), 907- 
 tjii; oGvea on T'.egUgeaoe (ad ed.), 
 1568-1649; Addison on Torts (6th ed.), 
 745; Lindley on Companlf f6th ed.). 
 486. 
 
 2Bjgelow(6thed.), 65a 
 »Cabab6 on Estoppel, 10. 
 * Evans r. Bioknell (1801), 6 Ves. 
 190. 
 
 » Northern Counties v. Whipp 
 (1884), 26 Ch. D. 489; 53 I* J. Cli. 680. 
 
OAEELESSSms SOMETIMES ESSENTIAI. ' 99 
 
 "nS^tlr- IT:^ ■"" r 'T"' "g"""**""- of the word 
 
 charge of someduty. If it meant all breach otdnty, the action 
 of neg igenoe would embrace the whole field of torts and M^ 
 tonoally. of contracts also; whereas in reality it tan" ea"" 
 for carelessness in the discbarge of some duty mer^,/°Onr 
 
 and "carelessness" to express respectively the two Wefs for 
 at present we either risk misconception, or we ha™ t^rni • 
 
 when nsing the word "negligence,»'inwLtsZetl^^^^^^ 
 For example, Sir Frederick Pollock, affirming that ^'^"'^^• 
 
 "Thus we ,rrt.e iuhi mM„f ,3 °S.t^» »»« ">«» to .notfet. °» 
 
 Sr:? «Zf p." '» "-'r'"-'- of torts, «, a snbdivi. 
 lunoi uronpo. But negligence, in the wider sense of th« 
 breach of duty, would embrace all torts and notolutnle 
 merely a subdivision of them. Perhans it wlu h "°"f ™"'» 
 confine negligence to the generic utS the wl^and .doM 
 carelessness tor the speciflo subdivision ^ 
 
 Mr. Seven's book on "Negligence," too, is notasurvey of all 
 the cases m which there is a breach of duty, as froml «tle 
 one might expect, but is ™® 
 
 ^ On Torts, 48a 
 
 2 On Torts, 17. 
 
 » Page 86a " Negligence is the ab- 
 senoe of care, according to the cirw 
 ~~""'^"'-"- "f "iCB, J., la Vaughan 
 
 «8«; 80 1* J. Ex. 34a 
 *PoIlocl£ on Torts, 7. The cases 
 
 treated of under that title are those 
 which are embraced within the rule 
 that "One who entera on the doing 
 of anything attended with risk to 
 the persons or property of others is 
 held answerable for the use of a cer- 
 tain measure of caution to guard 
 against that risk." Id. 8Sa 
 
1! 'i 
 
 100 
 
 CONDITION NO. 7. 
 
 rf°?*1.5^ ?,mn '"*"***7?° the whole law of England from the standpoint 
 doiSg" 1 '"^°' **^ ^*«*^ ^""^^ excluding* only intentional wSbng- 
 
 Having thus determined that the action of negligence (or 
 better, carelessness) is, in reality, but one of various classes of ^ 
 actions for neglect of duty (that is of negligence), we may define 
 carelessness, when it arises in connection with duty, as 
 
 * the onaission to do something which a reasonable man. euided bv those 
 woA'n**°^' ^^""'^ ordinarify regulate the conduct ofCanJffS 
 not da"*' °'" * soraetljing which a prudent or reasonable man would 
 
 Or, as put by Mr. Oooley : 
 
 nS-tf ^ii^'f *** observe for the protection of the. interests of another tliat 
 dSnd?" » ' ^'^ *"* vigilance which the circumstances justly 
 
 Estoppel by Carelesamaa.— We are now ready for the state- 
 ment that estoppel by negligence means estoppel by careless- 
 ness — that is by 
 
 or'^n{°„'S'!fi°°**?'*°^??l^^°«^'^5'°''*'"«a«onaWeman . . . would do, 
 or doing something which a prudent and reasonable man would not do; " 
 
 It being understood, of course, that such carelessness is in breach 
 of some duty arising out of contract, relationship or otherwise. 
 Following the lead of Mr. Justice Lindley,< then, and actu- 
 ated by the considerations just referred to,*estoppel by negli- 
 gence will hereafter be referred to as estoppel by carelessness. 
 The change will enable us to get rid of the idea that we are 
 speaking of estoppel with reference to all breaches of duty. 
 We are dealing with "an aspect, not with a division, of the 
 law." » 
 
 Miarepresentation.^'Note next that in estoppel, carelessness 
 is only important when it is associated with misrepresentation. 
 Carelessness without misrepresentation may indeed give rise to 
 an action for negligence. But for estoppel you must say that 
 you were misled by some falsity, and that your opponent ought 
 
 I2d ed. & Consider Austin's di- 
 vision into negligence, recklessness, 
 and heedlessness. Lecture SO, § 6321 
 
 V. Midland Ry. Ca (1857), 1 H. & N. 
 781; 26 L. J. Ex. 161. 
 
 •Cooley on Torts, 68a See Jag- 
 gard on Torts, 810, n., 880, 826. 
 *0n Companies (5th ed.), 486. 
 'Using " negligence " In its wider 
 signification, every case of estoppel 
 would be one of "estoppel by negli- 
 gence," for there could in no case be 
 
 . the penaity of estoppel unless there 
 
 some circumstances of time, place or had been some breach of duty- 
 person." Per Bramwell, R, in Degg something un-ong done. 
 
 'Per Alderson, B., in Blyth v. Bir 
 mingham (1866), 11 Ex. 788; 25 L. J. 
 Ex. 9ia And see per Brett, J„ in 
 Smith T. London, eta Ry. Ca (1870), 
 L. R. 5 C. P. 102; 80 L. J. G P. 68. 
 "There is no absolute or intrinsic 
 
 "'■©••STiiVTri 
 
 it is aiv.aj-s relative to 
 
 P 
 
CARELESSNESS SOMETIMES ESSENTIAU 
 
 101 
 
 ;S?i 
 
 to be precluded from asserting the facts, because of his action 
 or inaction — that is, by the carelessness of which you com- 
 plain. *' 
 
 Personal and Assisted Misrepresentation.-^ The only other 
 prehminary necessary to consideration of the main question is 
 the observation of the distinction between personal and assisted 
 misrepresentation. I hold myself out as a partner and am es- 
 topped from denying membership in the firm — that is per- 
 sonal misrepresentation. A mortgagee hands over the title- 
 deeds to the mortgagor, who uses them as evidence of the truth 
 of Am (the mortgagor's) representation of unincumbered owner- 
 ship, and so misleads an innocent purchaser; and the mortgagee 
 18 estopped. But not, observe, because of any misrepresenta- 
 tion made by him, but because merely of the assistance which 
 he has rendered to the misrepresentation of the morto-agor — 
 he has furnished an opportunity for fraud, he has done that 
 which has made the misrepresentation of another person cred- 
 ible.* '^ 
 
 Personal Misrepresentation.— Terasal of a previous chapter' 
 will leave little room for doubting that it is not in cases of this 
 class that we are to look for instances of estoppel by careless^ 
 ues8.» The assertion is not intended that every case of per- 
 sonal misrepresentation is the result of evil intent, and that 
 there are no instances in which misrepresentation is not due to 
 carelessness rather than to* dishonesty. What is meant rather is 
 that personal misrepresentation will estop, whether it is due 
 to one cause or the other, and that consideration of « how the 
 representation came to be made »— whether through careless- 
 ness or intention — is therefore immaterial. 
 For example, a trustee of a fund, with a view to deceive, rep- 
 
 9Ma„»J ; TT . adjadged. The case would be tho 
 
 an N V «;j '" ""' ^^'^ ^^^*^ •""'^ »' ">« misleading was due to 
 
 ^«f ;? ! 1 ""^^ "^^^ ^ ''°"*'*' carelessness in oral communioation; 
 
 diet this statement An indorser of but it is preferable to relegate such 
 
 a note wrdte his name so badly that cases to the principle (ante, a 16) 
 
 the initial "M.» looked like "A. C.» th*t r».a«„oKll«.-*^ JZflllJ^' 
 
 and he was held to be estopped by from statements or conduct justi* 
 
 his care'essness from denying notice flea action according to such infer- 
 
 «! **J7J*°'! miscarried be- ence. and will carry estoppei with it. 
 cause of the defective autograph. It ■/ ft' ^ 
 
102 
 
 CONDITION NO. 7. 
 
 resents that the fund is uncharged, and he is estopped from 
 asserting otherwise. But. if he had made the same represerita- 
 tion in perfect good faith but carelessly (having for the moment 
 forgotten), he would have been likewise estopped.' Again, 
 were there both the presence of good faith and the absence of ' 
 carelessness (which might happen in some cases by the misrep- 
 resenter being himself fraudulently misled), yet even in that 
 case there would be estoppel.' The element of carelessness, 
 therefore, is immaterial where the misrepresentation is per- 
 sonal. 
 
 «f »nSf .« *° T^° ^f? "**^® *^® misrepresentation, under whatever oircum- 
 stanoe^ musi bear the consequences of those rer esentation^ and nofc th« 
 man who has trusted to the representationTso m ^^.V}*"°°«' ^^'^ ""^^ t»»e 
 
 Assisted Misrepresenta^tion.— It is in this class of cases then, 
 if at all, that instances of estoppel by carelessness are to be 
 found. But hitherto the existence of the class itself has not 
 been sufficiently recognized, nor has it till now* received a dis- 
 tinguishing name; and it is therefore not matter for much 
 surprise that that of which we are in search has not been with 
 precision disentangled, nor its true affinities observed. 
 
 As in cases of personal misrepresentation, so also in those of 
 assisted misrepresentation, the general rule regards merely the 
 act done, and is entirely indiflferent to the motive or reason for 
 it, or the carelessness or diligence that may be in it. 
 
 ««#'Ti'^®*'^"'® " that if a man so conducts himstilf, whetJier intentionalbi or 
 vx>t, that a reasonable person would infer that a ceSltote S tSJ^f 
 
 For example, if a company were to issue a false certificate 
 as to ownership of shares, upon the faith of which a third per- 
 son changed his position, it would be estopped whether wrong- 
 ful intent or good faith, carelessness or diligence underlay the 
 act.' '' 
 
 I Burrowes v. Look (1805), 10 Vea. 
 470. 
 
 'Per Lord Selborne in Bank of 
 England v. Vagliano (1891), A, C. 188; 
 68 L J. Q. a 146; Ellis v. Schmoeck 
 (18a9X 6 Bing. 531; 7 L. J. Q. B. 231; 
 CoUingwood v. Berkeley (1868), 15 
 C. B. N. a 145; Maddick v. Marshall 
 (1864), 16 C. R N. a 887; 17 id. 829. 
 
 Psr James, I* J., in Hunter v. 
 Walters (1871), L. K. 7 Ch. 8^ And 
 see per Lord Cairns in Reese v. Smith 
 
 ), L. R 4 H. L 84; 80 L. J. Ch. 
 849; and per Jessel, M. R,, in Eagles- 
 feld V. Londonderry (1876), 4 Ch. D. 
 704. 
 
 ♦This chapter in somewhat modi- 
 fled form was first published in The 
 Law Quarterly Review, October. 
 1899. 
 
 » Cornish v. Abington (1859). 4 H. 
 & N. 65tt; 28 L. J. Ex. 262; West v. 
 Jones (1851X 1 Sim. N. a 207. 
 
 « Re Bahia, etc. (1868), L. R. 8 Q. a 
 
OAEIHEBsmiss SomillMES BSSESmi. l; 103 
 
 Close inspection, however, of the cateeoir of assi,*^ ™i.. 
 representation ,vill discover various lines^Les iTw^hT 
 operation of estoppel by carelessness may bt^W^ °^iJ'! 
 thatthe principles by which most of the c«^ have ten^e 
 cided have any relation to estoppe! - indeed oni,B!,th. • 
 oiples and rules have been invoked Ne^hT T ^"^ 
 writer believes thathis ra,io^^M:mTr^i^:^T 
 oan he but clearly present it to the profliion "^ "^P"^ 
 
 Acceptance unfortunatoiy involves somethins of a i„,J, 
 
 f ™l^:;i; tTerarlT^es^nlTsZetasS^ 
 rn^^nTn^br^ire"^-*--"''-'-- 
 
 2. And there are others (one very notablr^ fmm ^i.- u 
 many courts have excluded all questLrof <^[ L^^^^^ 
 wh.ch the present writer would Lve in al.;^^^^ . 
 
 in whthTsttn„!f ;f '"T"*-- ^P*'"^"^ '^' fi^«^ <^'-^^ of cases 
 an wli.oh estoppel bj cardessness may be found, suDDose thafc 
 
 ITk' !r^'^ '"'° '^''^'''^S a dLment whlchTafter 
 wards by the knave passed on to an innocent tmn«Ll ! 
 is to lose, and why? mnocent transferee; who 
 
 Theprssent law dividing the cases into void and voidable 
 documents (so much fraud - amount very uncertain Tn^T 
 document is voidable, more fraud andThe docum^nT ^^^^^^^^^^ 
 gether void) declares that if the document be voidaWe onlv tJ 
 
 :r LT It ti ? "- n*'^ '-' f^iiT:^i:^^ 
 
 seTf unon H,-/ ♦ ^^^ ^''^'''''on for the most part expends it- 
 ^elf upon distinctions between cases in which th. dupe was dt 
 ^ ived as to the aottml contents of the document, and !n oThet 
 as to Its legal effect- between cases in which thrdeception 
 was as to tne land affected by the document, and in othe^^ 
 
 5W; 87 L. J. Q. R 176. And see 
 ^^ cited with this one, chapter 
 
 ^1 Kennedy v. Green (1834), 3 M. & 
 »- VAs; vorley v. CkK)ke (1857), 1 Gift 
 830; a I* J. Ch. 185; Ogilvie v. 
 Jeaffjreaon (1860), 2 Gift 863; 2C u 
 
 I 
 
 i'c.^\^'^' ^^^' ^' MoKinnon 
 (1869). U R 4 0. P. 704; 88 L J. G P. 
 810; Hunter v. Walters (1871). I* K 
 7 Ch, 8?: 41 L. J, Ch. l?" 
 J Vorley v. Co^ke mii 1 Gift 230; 
 
 nit. \?^ ^^*' Herohmer v. Elliott 
 (1887), 14 Ont 7U 
 
104 
 
 OONDinON KO. 7. 
 
 t6 the disposition made of it,» and so on. The character of the 
 dupe, whether he is "layman or lettered ;" » the character of 
 the occasion, whether it was one "in which no extraordinary 
 caution was necessary;"* and similar points are also referred 
 to, but in order for the most part to ascertain whether the 
 document is void or voidable. 
 
 Here and there, indeed, the applicability of estoppel is to W 
 noted. For example, Mellish, J., in 1871 declared it to U "a 
 doubtful question of law » whether the dupe « may not by ex- 
 ecuting it negligently be estopped; " * and Erie, 0. J., in a case 
 m which blank but executed transfers of shares wefe improp- 
 erly filled up, said that although they were originally 
 i!f *!}*i*?*! '**'**' y®! "* between Swan and a purchaser . . . thev mav- 
 
 s*w.r;is arupSWi.'' "'°' '"'°°""" '•^"°"' ^ ^'^ 
 
 To the present w ^ter the matter assumes the following form r 
 No document obtained by m\ representation (whether it be the 
 vilest, the most ccTmpiex, the most simple, or the most inno- 
 cent) is binding upon the dupe; its character remains constant 
 (it cannot change); accompanying it into whatsoever remotest 
 hands it may come; nevertheless, as against persons who hive 
 been led by the docment to change their position, the dupe 
 ought to be estopped from denying its validity. The author- 
 ities declare that negligence on the part of the dupe is an es- 
 sential part of the case aguinst him. If so, then the estoppel 
 occurs where carelessness exists, and we thus have an instance 
 of estoppel by carelessness.' 
 
 2. Priorities.— Another class of cases may be typified by 
 the mortgage case already referred to: A mortgagee handa 
 over the title-deeds to the mortgagor upon some trumped-up 
 excuse; and the mortgagor, fraudulently using them as evi ' 
 dence of his assertion of unincumbered ownership of the prop- 
 erty, conveys it to an innocent purchaser. The present writer 
 would say that in all such cases the mortgagee ought to be es- 
 topped from setting up his title to the property. The decisions^ 
 however, distinguish between cases in which his conduct wa» 
 
 < Hunter v. Walters {1871X L, a 7 
 Ch. 82; 41 L. J. Ch. 175. 
 
 •Swan V. N. R A. (ISflOX 7 GR 
 N. a48i; 8oL. J. 0. F. lia 
 
 * See the subject treated at length 
 in chapter XXV. 
 
 1 National V. Jackson (1886), 33 Ch. 
 D. 1. 
 
 >Thoroughgood's Case (1582), 3 
 Coke,9«. 
 
 " Ogilvie V. Jeaffreson (i860), 2 diflt 
 858; 20 L. J. Ch. 903^ 
 
OAREIiESSNKBS SOMETIMES ESSENTIAL. 
 
 105 
 
 »/e "a 
 
 reasonable and those in which it was neghgent.» And thus 
 again is there estoppel by carelessness. 
 
 But the principles usually applied in such cases are not those 
 of estoppel. The rule that "possession of the deeds gives the 
 better equity" is that most usually invoked.' GiflFard, V. C, 
 however, properly protests that mere possession of the deeds 
 will not give priority. 
 
 to hJv*i"hireffect»S°'°^ "^^ °' **'''*"^* °° '^« P»'* °' '^« fl"' mortgagee 
 
 And Fry, L. J., has declared the law to be: 
 
 ««,!'{Sfii i^*® court will postpone the prior legal estate to a subsequen*. 
 Xph hLM*f f Tl?®" the owner has a«««*ed in or connived at the fraud 
 which has led to the creation of a subsequent equitable estate."* 
 
 Estoppel is at the foundation of such language: the owner 
 of the first estate is first; but he is estopped from so saying. 
 
 3. It is MO doubt the duty of every person — at the peril of 
 eotoppel — not to render assistance to the misrepresentation of 
 authority to act for him which may be made by other persons. 
 But what are we to say when a man does not intend to aid the 
 misrepresentation, but nevertheless through carelessness doea 
 so ? In a recent case ' it is said that 
 
 I persons 
 
 upon 
 
 apparent 
 
 agency." 
 
 This is not couched in the language of estoppel, which would 
 not say that " ostensible authority . , . may be conferred; '^ 
 but that, there being ostensible authority, the ostensible prin- 
 cipal is estopped by his carelessness from denying its real ex- 
 istence. 
 
 4. Maryland supplies us with the suggestion of another ex- 
 ample. We shall see that there is some substantial ground 
 for the opinion that bank customers are under obligation to 
 examine their pass-books at the usual monthly balancing, and 
 
 'Thorpe v. .HouldswortI\ (1868), 
 I* R 7 Eq. 147; 88 L. J. Ch. 194. 
 
 * Northern Counties v. Whipp 
 (1884), 28 Ch. D. 494; 58 L. J. Ch. 629. 
 
 'Thompson v. Skelton (1896), 49^ 
 Neb. 644; 68 N. W. R 1055. See also 
 Holt V. Schneider (1899), 77 N. W. R. 
 iOSo (Neb.); Leste, v. Snyder (1898), 
 53 Pftc. R. 615 (Cola); Cola Civil 
 Code, 8 2300; Heald v. Henley (1891)» 
 89 Cal. 632; 87 Paa R. 67. 
 
 » Evans v. Bicknell (1801), 6 Vea 
 174; Waldron v. Sloper (1852), 1 Dr. 
 198; Clarke v. Palmer (1882), 21 Ch. 
 r>. 124; 51 L. J. Ch, 834; Newman v. 
 Newman (1885), 28 Ch. D. 674; 54 L. 
 J. Ch. 598. 
 
 *Gordtitle v. Morgan (1787), 1 T. R 
 
 Eq. 897, 408; 86 L. J. Ch. 669: Spencer 
 V. Clark (1878X » Ch. D. 142; 47 L. J. 
 Ch. 692; Lloyd v. Jones (1885), 29 
 Ch. D. 229; 54 I* J. Ch. 931. 
 
106 
 
 CONDITION NO. 7. 
 
 then to make known their objections.' Sometimes forged 
 checks are paid by bankers, and the customers to whom they 
 are charged, after permitting their accounts to be balanced 
 from time to time without troubling themselves with their 
 verification, finally refuse to be debited with the forgeries In 
 such a case» it was held that it should have been left to the 
 jury 
 
 W '£ljf'*''" *M! *?® ^Ppe"ant8 had knowledge in fact that the forireries 
 hIm *° committed, or that from carelessneis and indifference to th« 
 fl^]^^^ of othera thev failed to inform themselves from sourolJof fnformL 
 tion readily aocessi&le to them, and which by the exerciSe SfordinSrvTlT 
 
 grl^riSJh^aXTncTmUS^^^^^ ^^«^°^^ '° the^r/fSS'tt 
 
 6. Vermont suggests still another case. The owner of land 
 
 stood by while a house was built on his property by the adjoin- 
 
 mg proprietor, but he did not know that it was upon his side 
 
 of the boundary, mid, that he had been guilty of 
 
 1*/Jf\^°®* car-lsssnesa and indifference to the rights of others that would 
 estop hira from .etting up title in himself." « » « "» omers tnac would 
 
 The court does not seem to have been so much impressed as 
 18 the present writer with the gross carelessness of the builder 
 of the house. Had the holding been essential to the decision of 
 the case the point might have received closer consideration. 
 
 6. For a further class of cases we are indebted to legislation. 
 Suppose that a shipowner issues a bill of lading for goods not 
 shipped, and that the bill is transferred for value to a honajlde 
 purchaser; who should lose, the signer of the bill or the pur- 
 chaser of the goods? Our general rule* would condemn the 
 signer « whether intentionally or not " he led the purchaser to 
 infer the existence of the goods. By statute, however 
 
 S"sl°? X^^'^X :l;s»e ?o!/?;^Sal*i;'%^"^^'' °' °' *^« ^"^-' 
 
 In the United States authorities differ, but probably the 
 weight of them is in favor of the proposition that the ship- 
 owner will be estopped by signing a false bill of lading whether 
 he was careful or negligent.' In England the estoppel is 
 founded upon carelessness. 
 
 > Devaynes t. Noble (1816X 1 Mer. 
 536. And see cases cited with this 
 one in oh. XL 
 
 'Hardy v. Chesapeake (1879), 61 
 Kd. uoa 
 
 » Greene v. Smith (1884), 57 Vt 268. 
 
 *Ante,]^ 103. 
 
 » 18 and 19 Via (Imp.), ch. Ill, § 8; 
 
 63 Via (Can.), ch. 30, § a 
 
 " Porter on Bills of T^diiKy ss 4aa, 
 43& ='cc«»= 
 
CABELE88NE88 80MrnME8 E88ENTIAI,. ' IQT 
 
 1 mis and Notes.-. The English authorities • have excluded 
 
 tZT"" ''.r''^^'^'^ f-"^ a cla8s of cases in which there 
 IS strong minority opinion for asserting that it ought to plav a 
 
 ^ImZTi' '"' """^^'^"^ ^^ ''' decisions'the acc'epTo: 
 of a bill may leave spaces in it which would tempt the virtue 
 o many an one who would shrink from bolderUs of for 
 gery;» he may attach conditions in lead pencil, or upon mar- 
 «inal spaces, and if they are rubbed out or cut off throw the 
 
 rr? ^d IT *'' f "^'^" ^^ ^^^ ^""^-'^^ PurchaseL^'o 
 vh«^; .r "*^, ^'*'^' ''^""^ "^*«« «r «^e<'»ted blanks 
 
 think that anybody would avail himself of them ; 
 
 fmud*e'4 ^T^^ftt'^Z^^V'^f^' ^y ^'^^^.^'^^^ *»>« theft or 
 clerks an5 servants and X« hid s^cSm** '*''*'"" ^° * ^''^ **> ^»^>°h 
 
 duty of carefulness as to tempting spaces is imposed upon the 
 
 ^r.t f ^ "".^''i '^ ^^" ^^^^ '° ^^«'^«y y«"r acceptance you 
 ought to do It effectively, and not merely by tearing it in half 
 which would give it the appearance of separation for^afe tranf: 
 mission merely; but these cases are far from having that Tut 
 sequent sanction which the present writer could wish them 
 1 here are also some comforting cases in the Pennsvlvania 
 « The majority opinion, however, is that of Lord Ha" 
 
 '^E^^ttt^ryll'Lr^l'^L'^^^^ ;.' .the protection 
 
 committing forgery but the Sw of the Sn A" ""^^^"^^'^^ *h« possibility of 
 
 The present writer, bearing in mind the general rules relating 
 
 *See all the cases discussed in 
 chapters V and XXV. 
 
 *Scholfield V. Londesborough 
 (1894), 2 Q. a 660; (1895) 1 Q. R 686: 
 <1896) A. C. 514; 68 L. J. Q. B. 649; 64 
 id. 293; 65 id. 593. 
 
 » Harvey v. SmitH (1870), 55 III. 224; 
 Zimmerman v. Rote (1874). 75 Pa. St 
 188; Cochrane v. Nebeker, 48 Ind. 
 459; Walsh v. Hunt (1898X 120 Cal. „ 
 
 4B: R9 Poo » lilt, o j-i^. , 1 
 
 -. ,^ ,^,j^ isrraiaiana v. a 
 
 Davidson (1888X 3 Ont 820. 
 <Bigelow on Bills and Notes, 177. 
 
 »(1827)4Bing. 253; 5 L. J. C. P. 
 165; 12 Moo. 484. 
 
 '(1859) 7 0. B. N. a 82; 28 L. J. C. 
 P. 294. 
 
 'Brown v. Reed (1875X 79 Pa. St 
 870; Leas v. Walls (1882), 101 Pa. St 
 87; Robb v. Pennsylvania, eta (1898). 
 40Atl. R969. 
 
 8ScholfieId V. Londesborough 
 (1896), A. C. 582; 65 L. J. Q. R 601. 
 Kee the matter fully discussed in 
 oh. V. 
 
108 
 
 CONDITION NO. 7. 
 
 to social relations, would rathei- agree with Mr. Justice Black- 
 burn and others who hold that 
 
 "The person putting in circulation a bill of exchange does by the law 
 «««t .*"' °T*u* d"*y to "III parties to the jill to take Reasonable precau- 
 tions against the possibility of fraudulent iltarations of it." » 
 
 Were this the law, then breach of it would furnish a clear case 
 of estoppel by carelessness. For we would have to say, not that 
 the forged acceptance was that of the defendant, but that by 
 his carelessness he was estopped from denying it. 
 
 The Leading Cases. 
 
 Passing on to consider the rules framed for estoppel by negli- 
 gence, a short statement of the facts in the two leading cases 
 and a citation of the rules in judicial language will be of ad- 
 vantage. 
 
 1. (1 855) Bank of Ireland v. Evans? The secretary of a com- 
 pany having been allowed the custody of the seal fraudulently 
 affixed it to powers of attorney for the transfer of bank shares 
 owned by the company. In an action between the company 
 and the bank, which had acted upon the transfers, Parke. B.. 
 said: 
 
 i-.'l?j*«°'®"' T^e **>'"k, that the negligence in the present case, if there 
 l*B any, is much too remote to aflfect the transfer itself and to cause the 
 trustees to be parties to misleading the bank in making the transfer oo 
 ^l oiTr Po«^er of attorney . . .^ We concur with Mr. Justice Jack- 
 son and Justices Ball, Compton and Towns, and the Chief Justice Leroy, 
 in thinking that the negligence which would deprive the plaintiffs of their 
 nglit to insist that the transfer was invalid must be negligence in or im^ 
 mediately connected with the transfer itself."* 
 
 2. (1859) Ex parte Swan;* (1862) Swan v. North British A. 
 Co? The owner of shares in two companies, A. and B., em- 
 ployed a broker to sell those in A. and gave him ten executed 
 transfer forms in blank. The broker fraudulently used two of 
 
 1 Swan V. North British (1863), 2 H. 
 «fc C. 183; 38 L. J. Ex. 277. The pres- 
 ent writer would not, however, in- 
 voke the law merchant. See post. 
 oh. XXIV. 
 
 2 5 H. L. C. 889. See a similar case. 
 Merchants, etc. v. Bank of England 
 (1887), 21 Q. a D. 160; 87 Lu J. Q. R 
 4ia But seo Shaw v. Port Philip 
 (1884X 13 Q. a D. 103; 58 L. J. Q. B. 
 369. 
 
 •Lord Esher thought that Parke, a. 
 
 meant by "immediately connected 
 with the transfer itself " something^ 
 almost equivalent to "in the trans- 
 fer itself," and he said " that the way 
 to construe it is \\i&t the negligence 
 must be proximately connected with 
 the transfer itself." Merchants, etc 
 V. Bank of England (1887), 81 Q. a 
 D. 178. 
 *7 C. B. N. S. 400: 80 L J, C. R HA 
 »7 H. & N. 603; 2 H. & O. 175; 81 
 L. J. Ex. 425; 82 L. J. Ex. B7a 
 
OARKLK88NE88 SOMEHMES ESSENTIAL. 
 
 100 
 
 them to transfer the B. company shares, stealing the certificates 
 to enable him to accomplish his purpose. Company B. acted 
 upon these transfers, and in the action between it and the orig- 
 inal owner of the shares it was held that the owner was not 
 estopped from denying the execution of the transfer. Baron 
 Wilde, m the Exchequer, formulated a rule as follows: 
 
 ^J'Z«?' J' ^® '\*,' '*** P***®" *"*o t*»e belief of a certain state of facts bv 
 conduct of culpable neglect, calculated to have that result and thev have 
 acted on that belief to their prejudice, he shall not S heard afteJwardZ 
 as against such persons, to show that that state of facts did not eSst?' 
 
 Upon appeal > Blackburn, J., referring to Baron Wilde's lan- 
 guage, said as follows: 
 
 ",T,*''?:>8 'fry nearly right, but in my opinion not auite as he omit, fn 
 qualify it bjr saying that the neglect must he in V VScSn tS/JnJ 
 be the proximate cause of the leading the party into that Stake- and 
 also, as I think., that it must be the n^lect JfuoL duty tLTSolik^to 
 the person led into that belief, or, what coines to the same thin J *^^f h^ 
 general public of whom the person is on^ and no? mereTr^eg&^ 
 rrnJ^*P-"f*°' *" '*'"P".^' '°*he party himself or eveS 5f Sme du?y 
 
 ^«?«*.— Summarized from the principal cases, then* the 
 rules may be stated as follows: 
 
 1. There « must be the neglect of some duty that is owing 
 to the person led into that belief." 
 
 2. " The neglect must be in the transaction itself." 
 
 3. "The omission must be the proximate cause of the lead- 
 ing of the person into the mistake."* 
 
 Lot us now look at the criticisms of these rules by the prin- 
 cipal text-writers: 
 
 Mr. Bigelow's Criticism.^ Heterring to these rules, Mr. Big- 
 elowsays:* 
 
 ».ilhilf °^^"' •^o^^ej^/' *hat cases of estoppel arising out of neglieence 
 without a representation must be uncommon. Thev cannot fall wfth?n 
 the propositions of Mr. Justice Brett.6 . . ? for tS prZ^iUon^te^^^^^ 
 shows that a representation (by conduct) has bean nmde."' ^ 
 
 18 H. & C. 181; 32 L. J. Ex. 27a 
 »The learned judge illustrates this 
 point by reference to the case of the 
 maker of a blank note which he in- 
 tends to be filled up "and delivered 
 to a series of holders" 
 
 3 Bank of Ireland v. Evans (1855), 5 
 ^L" C. 981; Ex parte Swan (1859), 
 7 U ii. In. o. 400; 30 L. J. C. Jf. 113; 
 Swan V. N. R A. Ca (1862), 7 H. & 
 N. 603; 31 L. J. Ex. 425; 8 H. & C. 
 
 175; 88 1* J. Ex. 873; Carr v. London 
 
 (1875X L. R 10 Jl P. 807; 44 L. ^ C. 
 
 P. 109; Scholfield v. Londesborough 
 
 (1894), 2 Q. a 660; (1895) 1 Q. B= 538; 
 
 (lb96) A. C. 514; 63 I* J. Q. R 049; 
 
 64 id. 893: 65 id. 59a 
 * See &. ollans v. Rollins (1899), 63 
 
 1^. E. R 863 (Mass.). 
 »0n Estoppel (5th ed.), 658, 654, 
 "In Carr v. London, supra. 
 
110 
 
 CONDITION NO. 7. 
 
 Mr. Bigelow seems to be in search of some instance "of es- 
 toppel arising out of negligence without a representation; » and 
 he appears to assume that the rules were formulated for casea ' 
 of that sort.* This is the more remarkable because he observes 
 that the cases in which the rules were formulated "cannot fall 
 within the proposition of Mr. Justice Brett, ... for the 
 proposition itself shows that a representation (by conduct) Ao* 
 been, made." Inasmuch, then, as the cases themselves involved 
 a representation, it would be < tremely improbable that the * 
 rules framed by them should have been intended for cases in 
 which there was no representation; more particularly when 
 as is asserted, it is extremely difficult to find such a case. * 
 The solution of Mr. Bigelow's difficulty lies in the difference 
 between personal and assisted misrepresentation, without re- 
 gard to which it may be said with equal truth that there may 
 or may not be estoppel by carelessness without misrepresenta- 
 tion. We may say first that there can be no estoppel of any 
 kind unless there has been some misrepresentation — that is 
 unless the estoppel-asserter has by somebody been deceived' 
 Some fact must be misrepresented before there can be estoppel 
 against the assertion of that fact. But we may also say that 
 there may be estoppel by carelessness without misrepresenta- 
 tion — Jy the estoppel-denier. In other words, there may be 
 estoppel by carelessness where the misrepresentation is that of 
 a third person; that is, in cases of assisted misrepresentation. 
 Not being able to find a case of "Estoppel by Negligence " 
 Mr. Bigelow imagines one: » 
 
 wJiif hi'i® ""PP°^^ **>»* a "an has been fixed with constructive notice 
 ^^ ij T '^®**"i °^ •*" neg.igence has not become knowledge to hiS of 
 
 X'jSSSiSi dTnVJnJ if ""^ ^r°^' '^^' *^'« right isfS his knowl' 
 f* P ' *'~?' °®'°8 disposed of by another as that other's orooertv und that- 
 
 and'i^theT£cf/i°.S P^^^^aser for value. wifhSnS«,^oAhe right! 
 ana in the absence of the neghgent party. Here would be a case of n«irlil 
 gence which could hardly be treated upon the f(K)tini of a renJ^Statifh. 
 p?esent "?'• ""*' " ""'^^^^ "^' ""PP*^'"* «" thS^oJLrTm^nte of it 
 But the case is clearly one of misrepresentation — misrepre- 
 sentation by a third party. The vendor is posing as owner of 
 property m which the estoppel-denier has some interest; that. 
 
 I See the whole context, 653, 654. 
 Bigham, J.^too, thought with Mr. 
 BigcJov*. Ho said that Swan v. 
 North British was a case "in which 
 estpppel by negligence was at- 
 
 tempted to be set up. . . . The 
 present case is one of estoppel by 
 representation." Union v. Mersey 
 (1899). 2 Q. B. 810; 68 I* J. Q. R 842. 
 *5thed.654. 
 
CARELESSNESS SOMETIMES ESSEVTIAL. HI 
 
 is to say the vendor is representing that he is the absolute 
 owner whereas he is not. And the question is, Whether the 
 bystander is, or is not, estopped by the assistance rendered to 
 that misrepresentation by his silence ? The very foundation of 
 the complaint is that the purchaser was misled 
 
 Moreover it is far from clear that the case is one of estoppel 
 at all .ui .ngthenmg the case for estoppel, let us assume That 
 the .yBtanti. s conduct is to be taken as an actual representa- 
 tion h| un (vr addition to the misrepresentation of the vendor)- 
 the qu .ti-^r^ .vill then be, What was the representation that he' 
 rfl VI '* * '^P'^'^^'^^ion that he had no right; ormerely 
 that he did not at the moment, know of any? If the latter, 
 then all he would be estopped from asserting would be that at 
 
 . iT. u^ f'f ^"'*'' °^ ^'' "«*^^- ^f ^« ^^d in words as- 
 serted that he did not at thai time know of any rights, he would 
 not have been estopped from asserting that he had subsequently 
 
 thrihaf » ^'' ''"''^"°' "*''''''' ^' ^"^"'^ *^ ^'^'^ °^°^^ 
 
 ^r. Cahabe's Criticism.- Mr. Cabab6's criticism of the rules » 
 follows that of Mr. Bigelow, but improves upon if 
 
 cases in winch the JoSSct would ilv«r^r?*?K«'^^"«« *,° *" ««toPP«» *«»• 
 thp.e can be no such ca^s-ffs?^it will -.^,*^**' "* *?u® "^^^''^ *>' things, 
 
 jac^. although .w neg^&ire-r?rt;« -^^^^^^ ;f 
 
 Mr. Cabab6 describes the situation necessary for estoppel by 
 carelessness with very considerable accuracy in his last sentence, 
 and considering that he had no concrete case in view the Ian'' 
 guage IS singularly fortunate. Observe how completely it fits 
 the case of assisted misrepresentation (already suggested), in 
 which the mortgagee allowed the mortgagor to have the deeds 
 with the aid of which he posed as unincumbered owner of the 
 property. Here the delivery of the deeds « Droximat«l ^ .»a— 
 
 iWilmott V. Barber (1880), 15 Ch. 
 D. 06: 49 L. J. Ch. 793; Low v. Bou- 
 verie (1891). 3 Ch. 82; 60 L. J. Ch. 594; 
 
 Robinson v. Nail (1899), 53 a W. R. 
 49. 
 
 2 On Estoppel, 100, 101. And see 97» 
 
11^ 
 
 CONDITION NO. 7. 
 
 another lo believe in the existence of facts (namely, uninetfm* 
 bered ownership), although it (handing over the deeds) does ' 
 not amount to a representation of these facts." Such cases are 
 by no means rare: they are legion. * 
 
 But Mr. CababS's language is somewhat too inclusive, as an- 
 other of his sentences suggests. For there are many cases 
 within his description (wide enough for all cases of assisted 
 misrepresentation) which could not be said to be cases of es- 
 toppel by carelessness; because in them the conduct would 
 have given rise to estoppel, " even though it were- not negli- 
 gent" — cases therefore in which the presence or absence of 
 negligence is altogether immaterial; cases within the general 
 rule which « regards the act done, and is entirely indifferent 
 to the motive or reason for it, or the carelessness or diligence 
 that may be in it." i Estoppel by carelessness is not coexten- 
 sive with estoppel by assisted misrepresentation, although in- 
 eluded in it. 
 
 We are now prepared for an examination of the rules. 
 
 EULB No. 1. 
 
 ** There mu»t be the neglect of atme duty that is owing to the person wiisfcd" 
 
 This rule is undoubtedly valid, but it cannot be limited to 
 any class of cases— to cases of personal, or assisted, misrepre- 
 sentation, or to cases of estoppel by carelessness. For it is im- 
 possible thaf there can be estoppel of any kind unless there be 
 a breach of some duty to the person misled. To say other- 
 wise wouid be to alBrm that the penalty of estoppel should be 
 inflicted upon a person who had acted quite properly. The 
 rule itself is indisputable; but it is not one applicable to estop- 
 pel by carelessness only. 
 
 EuLK No. 3. 
 
 " The neglect must be in the transaction itself." » 
 
 I is in cases of assisted misrepresentation alone, as we have 
 seen,' thnt we are to look for instances of estoppel by careless- 
 
 i Ante, p. lOZ else it See Agricultural v. Federal 
 
 8 This i-ule having been so fre- (1881), 6 Ont App. 800. 
 
 qu. tiy ap oved, it requires the 'Ante, pp. 101^ 103. For .mses of 
 
 courage of strong conviction to oriti- person U micrepresentation the rule 
 
OAKELE88NE88 80MKTIME8 ESSENTIAL. ' 113 
 
 <iess; and yet it is not too much to sav thaf it io • 
 
 itself." 1 ™*'^»''® s^^^'o be «m the transaction 
 
 estopped because he has aflforded opportunitv or nl • V 
 
 w^ro the person whose name was forged carelLV"tmain 
 
 denier mmt have ",d ^^rbt °'*f"'''P'«''''yr"«>n of Its being 
 ground tor ^ppo^lZth^^^Z , * f °^ ""' °'""'='' " "l-'raoter « 
 
 re.enutio.,o'r;:i*.;;:s„'X "^ Lii^'*-.!'!-.'""" •^'°?'>"-^ 
 
 1 TUi- -.-. — : ." "»'""• 
 
 '"" ^latciaunc wouKi juatifvMr. 
 Cababe'8 remark "that the condi- 
 tions to be complied wih before 
 8 
 
 but not for the reason which he 
 giyea (see ante. p. in). 
 
lU 
 
 CONDITION NO. 7. 
 
 quiescent, not advising the banker of the forgery until after the . 
 banker's positibn had been changed, he would be estopped.^ In 
 such cases it is, of course, impossible to say that the carelessness 
 was in the transaction itself. \ 
 
 Conclusions. — We have thus reached the following conclu- 
 sions : that there are no cases of estoppel by carelessness under 
 the heading personal misrepresentation (in that department the 
 question is not as to the state of mind of the estoppel-denier, but 
 whether he had reasonable ground for supposing that his rep- 
 resentation would be acted upon); that among cases of assisted 
 misrepresentation there are instances of estoppel by careless- 
 ness; that in none of them, however, is the carelessness in the 
 transaction itself; nor is it possible for it to be so; it always 
 either precedes the transaction or is subsequent to it. The only 
 alternative to this assertlpn is to say that, in the instances 
 given, the carelessness was "in the transaction itself." But to 
 so say is to aifirm that which our leading cases '^ deny; for in 
 them (parallel cases of assisted misrepresentation) the alleged 
 carelessness was said not to be " in the transaction itself," and 
 for that reason it was held that there was no estoppel.^ 
 
 iMcKenzle v. British Linen Co. 
 (1881), 6 A pp. CasL 82; Cairncross v. 
 Lorimer, SMacq. 827,830; Merchants' 
 Bank v. Lucas (1887), 13 Ont 520; 15 
 Ont. App. 573; 18 S. C. Can. 705. Dis- 
 tinguish between ratification and 
 estoppel in such cases: Scott v. Banlc 
 of N. B. (1894), 23 S, C. Can. 287; 
 
 rsyth V. Day (1838), 46 Me. 196. See 
 ante, p. 106. 
 
 2 Ante, p. 103. 
 
 > There is a certain ambiguity in 
 the phrase "in the transaction itself" 
 which in Coventry v. Great Eastern 
 Ry. Ca (1883, 11 Q. B. D. 776; 52 h. J. 
 Q. R 694) was made use of to over- 
 come the application of iilie rule. A 
 railway company (through careless- 
 ness) issued two delivery orders for 
 the same goods and the plaintiffs ad- 
 vanced money upon the faith of the 
 second of them to its holder. Brett, 
 M. R, said: "Then was the negli- 
 gence of the defendant the 'proxi- 
 mate ' cause of the loss sustained by 
 the plaintiffs? I use the expression 
 
 'proximate cause as meaning the 
 'direct and immediate cause.' Here 
 the production of the document 
 was the direct and immediate cause 
 of the ad-, a lice of the money." And 
 the learne judge held the case to be 
 within the rule — that the negligence 
 was in tlie transaction itself. But 
 distinction is here overlooked be- 
 tween the negligence in issuing the 
 certificate, which was the act of the 
 company, and "the production of 
 the document," whicli was the act 
 of its holder. The learned judge 
 says that "the production of the 
 document" was the direct and im- 
 mediate cause, etc. Granted. Then 
 the negligence was not. The negli- 
 gence was not "in the transaction 
 itself," but in a document executed 
 prior to the transaction, which an- 
 other person made fraudulent use 
 of, and yet the company was es- 
 topped. The same reasoning applied 
 to the Swan case would vary its re- 
 sult 
 
CARELESSNESS SOME'nMES ESSENTIAL. ! U5 
 
 Let ns look again at these cases, and see what, with their 
 help, we can make of the rule in hand. 
 
 In the Bank of Ireland v. Evana case,i the secretary of the 
 company fraudulently affixed its seal to a transfer of shares 
 and- sold them to an innocent purchaser. The company was 
 not estopped because its carelessness in trusting the secretary 
 with the seal was "not in the transfer itself." Very well 
 I^ow recall the mortgage case, in which a mortgagee, who al- 
 lowed the mortgagor to have possession of the title-deeds, was 
 estopped as against an innocent depositee -was estopped al- 
 though his carelessness in trusting the mortgagor with the 
 deeds was not "in the transaction itself, but prior to it " 
 
 In the one case the company intrusts its seal to its secretary • 
 the secretary makes fraudulent use of it; and the company is 
 not estopped. In the other a mortgagee intrusts his title- 
 deeds to his mortgagor; the mortgagor makes fraudulent use 
 ot them ; and the mortgagee is estopped. It seems to be suffi- 
 ciently clear that any distinction between these cases is not to 
 be found in the fact that in one of them the carelessness was 
 m the transaction itself and in the other that it was not; and 
 that the point of difference (if there be any) must arise from a 
 comparison of the conduct of the estoppel-deniers-by the 
 conclusion that the company in intrusting its seal to its secre- 
 tary was not guilty of carelessness at all (for the seal must be 
 intrusted to somebody); but that a mortgagee cannot quite so 
 easily justify his unnecessary and unusual confidence in his 
 mortgagor. In other words, that there is not in the one case 
 but there is m the other, something done « which a prudent 
 and reasonable man would not do »_ that is, some careless- 
 ness. 
 
 Turning now to Swan's case, note that he was not estopped 
 for the reason that his carelessness in executing the blank 
 transfers and giving them to the broker was not negligence 
 in the transaction » between the broker and the innocent pur- 
 chaser. Vary the case a very little. Suppose that Swan, 
 when giving to the broker the blank transfers, with instruc- 
 tions to sell the A. Company shares, had also given him, not 
 only tne A. OomnRnv/>orfif5iiof«r, u..* -i— / ■ ,. 
 
 the B. Company certificates. There is very little doubt that 
 
 ' Ante, p. loa 
 
116 
 
 CONDITION NO. 7. 
 
 Swan would now be estopped, for he has perfectly equipped 
 his broker for fraud.' But his negligence can no more be said 
 to be " in the transaction itself " now than it was before. Ia» 
 this case also, then, it cannot be said that the absence of estop- 
 pel was due to the carelessness not being " in the transaction 
 itself." The question again would be one of reasonable care — 
 reasonable to hand over blank transfers if you retain the cer- 
 tificates, but unreasonable to hand over both. The question of 
 in, or out of, the transaction seems to be quite irrelevant. 
 
 The present writer by nc» means agrees that there was no 
 carelessness in the Bank of Ireland v. Evans case. Upon the 
 contrary, he adopts the language of Day, J., in a subsequent 
 case : ' 
 
 "The grossest negligence seems to have acoompanied this confidence, 
 because, notwithstanding all the warnings which most men experienced 
 in the affairs of the world have had, that no man is to be trusted without 
 the exercise of reasonable care by those who have to look after the affairs 
 of other people, it seems to have been thought that the common seal and 
 the affairs of the company might be intrusted to their clerk without any 
 check or superintendence of any sort or kind being exercised over him by • 
 the corporators or any of the officials of the company. One can scarcely 
 Imagine a case of grosser negligence than the negligence of all connected 
 with the affairs of this company in their dealings with their clerk. It is 
 not for me to suggest that every clerk, or any clerk, ia to be suspected of 
 evil doing, but it is idle to talk of the absence of necessity for exercising 
 due and reasonable care over the officers of any corporate or other body. 
 A person who was looking after his own affairs would take very good care 
 to see that his seal, if it had any value, was looked after; but here a cor- 
 porate body, who can only speak and act by its common seal, are content, 
 one and all, to Intrust the common seal to. an officer over whom they exer- 
 cise not the slightest superintendence." 
 
 If this criticism be just, and if for estoppel it be not neces- 
 sary that carelessness should be in the transaction itself, then 
 the Banh of Ireland v. Evans case should have been otherwise 
 decided. 
 
 Swan in his cases seems to have been freed from the charge 
 of carelessness because of bi" retf^ntion of the certificates, 
 without which it was thought the blank transfers would be 
 useless. With that reasoning no fault is at present found. 
 
 Result and its Explanation. — Our reasoning has produced 
 the extraordinary result that a rule so well established, de- 
 
 » The judgments largely turn upon 
 the fact that the broker had to steal 
 the certificates in order to perpetrate 
 the fraud, and that therefore Swan 
 had a string to his blank transfers. 
 And see Colonial Bank v. Cady (18'J0), 
 16 A. G 297; 60 L. J. Ch. 181; Marsh- 
 
 all V. National (1893), 61 L. J. Ch. 46B: 
 Pennsylvania Railway Co-'s Appeal 
 (1878), 86 Pa. St. 80. 
 
 ' Mayot', elc. V. Bank of England 
 (1887), 21 Q. R D. 162; 67 I* J. Q. R 
 418. 
 
CARELESSNESS SOMETIMES ESSENTIAL. 
 
 117 
 
 fined and explained as the one in hand is quite impossible of 
 application. An investigation of its origin will unravel the 
 mystery, and reveal the fact that inattention to a somewhat 
 palpable distinction was responsible for the confusion. 
 
 Young v. Groie,^ "that fount of bad law,"' was at the hot- 
 torn of the trouble. A drawer of a check left spaces in it, 
 which were fraudulently made use of to raise the f»mouD*. ojf 
 It, and it was held that the drawer, because of his carelessness, 
 anu not the banker, must lose. The carelessness was in the 
 drawing of the check — in the document itself. 
 
 Then camo^a^i^ of Ireland v. Mans* in which the secre- 
 tary of the company fraudulently applied its seal to certain 
 transfers of shares. The company was not estopped because 
 (per Parke, B.) 
 
 ♦hiV®*{!**l''^®°f ® ^'^'°.'^ ^P"'^ deprive the plaintiflf of his riirht to insiafc 
 that the transfer was invalid must be negligence in or immeaiatelv oon 
 nected with the transfer itself. Such waftKe ca«e of FoSS^SSJolJ" 
 
 Note ttdt the learned Baron does not say «in the transaction 
 Itself," but in « the transfer itself," that is, in the document of 
 transfer. In other words, the negligence must not be merely 
 m leaving a seal in the hands of a secretary — that is too re- 
 mote — but in the transfer itself. He distinguishes between 
 Toung v. Groie, in which the neglect was in the check itself, 
 and the case in hand, in which it was not "in the transfer it^ 
 self," but in leaving the seal with the secretary. 
 
 Shortly afterwards came Swan v. N. B. A.* in which the 
 broker used the executed but blank transfers to assign shares 
 which he had no authority to deal with. Here now was a case 
 in which, if there was any negligence at all, it was "in the 
 transfer itself,' that is, in leaving blanks in the transfer. The 
 court held, however, that thum was no estoppel u-r.withstand- 
 ing the blanks; that is, notwithstanding that tL. neglect t aa 
 «in the transfer itself." The previous rule, therefore, h id to 
 be changed, and it was said "that the neglect must be tu the 
 transaction itself." * 
 
 >(1827)4Bing.258, 13 Moore, 484; 
 5 L. J. G P. 165. 
 
 »So Esher, M.R,in8oholfleld v. 
 Loudcsborough (iSOo). 1 Q. E oSd: 
 04 L. J. Q. a 29a 
 
 »(1885)5H.L.G889. 
 
 « (1859) 7 C. R N. a400; 80 I* J. 
 C. P. 118; (1882) 7 H. & N. 608; 81 
 L. J. Ex. 425; (1868) 3 H. & G 175: 
 82 L. J. Ex. 27a 
 
 »It was made still more definite 
 afterwards in Carr v. Loudon (1875, 
 
CONDITION NO 7. 
 
 Bat so to say was entirely to &,te^ .he rule ^.ad create one 
 that would apply in c?,ses to which j. .'•^■» 1 .rke Itw! no idea 
 of extending it. It, is cleanly one thing to say tluio where a 
 fraud has by some kr ave been perpetrated by the help of some 
 document, t!n osten > 1 . signer of the paper is not estopped 
 unless he h&a been caroiess with regard to it (.vhich was the 
 ground of distinction b?tw.t)n loung v. Grote ai)d Bank of 
 Ireland V. FvaTis); and quite anc ther thing to say that for es- 
 toppel by carelessness the ncgltcn must be in the transaction 
 r gtween the knave and the innocent purchaser. It is com- 
 i oiely to change the period and place at which the careless- 
 ness is required to appear, and to transfer it from the document 
 fc-nd its oxecution (if there be a uocument in the case) to some 
 fraudulent transaction in which .1; was subsequently used by 
 some other person. 1 1 
 
 The change was unconsciously made. The ambiguity of the 
 word " transfer" was not observed. Baron Parke intended by 
 it the document of transfer, but he has been taken to have used 
 it in the sense of the transaction by which the transfer of the 
 shares had been accomplished.* 
 
 Observe the effect of the amendment of the rule upon some 
 of the cases of estoppel by carelessness. We have seen that a 
 man who, through his own negligence, is tricked into signing 
 a document, may be estopped by it as against an innocent pur- 
 chaser. This is quite in harmony with Baron Parke's rule — 
 the negligence is in the document itself. But according to the 
 amendment there could be no estoppel because the negligence 
 was not "in the transaction itself," that is, in the subsequent 
 transaction between the knave and the innocent purchaser. 
 
 The effect is still mora marked in (he mortgage case. To it 
 Baron Parke's rule has no applica; • whatever, for it is not a 
 case in which there is a documen .jh which to connect neg- 
 lifcrtse. And again, the am idrr »t; would reverse well-settled 
 d€f A >ns; for the mortgagee' Av .lossness in handing over the 
 deeds to the mortgagor cauA^ : lossibly be said to be in the 
 
 itwlnchitssadthatthenegligenoe th gligent which prepared the 
 must be "in the transaction itself ^ '. that act. and madVit pos- 
 
 Jti^n ?rif »? J*M T *''" *""'■ <^®^*>' " ^°*^ ^PP- «!»' Agricultural 
 action itself" is held down f. the v. Federal (1881), Ont App. 200. 
 
CAEELES8NE88 SOMEWMES ESSENTIAL. 
 
 119 
 
 subsequent transaction by which the mortgagor pledges the 
 deeds to an innocent depositee. 
 
 Analogy from Law of Torts. ^ It the point that the rule in 
 hand cannot apply to cases of estoppel by assisted misrepre- 
 sentation has not been made sufficiently clear, a reference by 
 way of analogy to the law of torts will supply the defect. Sup- 
 pose that in carelessly handling some explosive I discharge it 
 and wound a neighbor; I am liable; the carelessness was in the 
 transaction itself, and the case is one in which I have person- 
 ally inflicted the injury. Suppose again that I had so care- 
 essly packed and labeled an explosive that a carrier in hand- 
 ling It with accustomed care discharged it and injured some 
 people; I should again be liable,' although I did not personally 
 inflict the injury, and although the carelessness was not in the 
 transaction itself. The negligence was in the previous packing 
 and labeling (as in the Swan case it was in the previously pre 
 pared document); it was not in the explosion, although the ex- 
 plosion was reasonably consequent upon the carelessness (just 
 as m the Swan case it was not in the broker's transaction, al- 
 though that, in order to estop, would have to be reasonably 
 consequent upon leaving blanks in the transfer). 
 
 That negligence must be in the transaction itself will not 
 answer as a rule in torts, nor will it .in estoppel, which in many 
 of its aspects is very closely allied to tort. 
 
 ' '■ Rule No. 3. 
 
 " The mghct must he the proximate cause of the leading of the person into 
 
 the mistake," 
 
 We have arrived at the conclusions (1) that it is among cases 
 of assisted misrepresentation only that we can find instances of 
 estoppel by carelessness, and (2) that in such cases it is impos- 
 sible that the carelessness can be "in the transaction itself" 
 And we are now to see that the present rule is also an impos- 
 sible one, for "the neglect" in cases of assisted misreprosenta- 
 tion never can "be the proximate cause of the leading of the 
 person into the mistake." There is always interposed the mis- 
 
 m laot tae word " prox> 
 
 
 
 'Parrant v. Barnes (1862), 11 C R N. S. 568; 81 1* J. a P. 187. 
 
120 
 
 CONDITION NO. 7. 
 
 imate" has been felt to be altogether inappropriate, and pr^ 
 
 posal has been made to change it. Said Lord Esher: » 
 
 Bte^d '^'theitf^lr^ilS^^^A?'''' '° *»»• proposition the word 'real' in- 
 
 And Lopes, L. J., agreed with him. But Fry, L. J., said: 
 than'tt ?erm'' pSa?e.- ' ''''' ' ''"' ' '" ^^^ "^^ ''«« '«"» '^'ficulty 
 
 With this last the present writer agrees. Neither word i* 
 applicable for the reason already given. "Proximate," th* 
 carelessness and the result can never be (in the line of cases in 
 tiand). And there is no single " real » cause, but always twa 
 causes, la the mortgage case the innocent purchaser was de- 
 ceived by (1) the misrepresentation of the mortgagor that he 
 was the unincumbered owner; and (2) by the mortgagee's as^ 
 sistance m handing over the deeds. In Swan's case (as amended 
 for purposes of illustration) the innocent purchaser was de- 
 ceived by (1) the misrepresentation of the broker, and (2) tha 
 assistance of Swan, who executed the blank transfers and handed 
 over the certificates. In both of these, and in all other such 
 cases, there are two efficient or real causes, and the negligence^ 
 18 not the proximate one. 
 
 If the word « proximate » is to be retained at all, it must be^ 
 in some such sentence as that of Keating, J., in the Swan case.* 
 \ve must not say, as above, that 
 
 the S'kS • "'"'*'' ''« »"-°"'"»*« °^^ »' *»>« >«»din« of the person Inta 
 but with Keating, J.: • * • 
 
 trlfe"^"""' ^""""'^^ *"•* proximately enabled the broker to effect the 
 although the sentence is not a fascinating one. 
 
 But for the fact that it is difficult to think in such cases aa 
 tnose in hand of two proximate causes,* there would be less ob- 
 jection to the following: ' 
 
 "Where twoefficient proximate causes contribute to an injury, one who, 
 
 1 Seton V. Lafone (1887), 19 Q. B. D. 
 71; 66 L, J. Q. R 415; 19 Q. B. D. 74. 
 But see the L. J. report, pt 417. 
 
 ^The writer is not unmindful of a 
 criticism of Lopes, J., in Scholfield 
 V. Londesborough (1895X 1 Q. B. 552: 
 "It might as well be said that . . . 
 
 — -^-^ ••=^!i £ivui » iiuuse and 
 
 injured a passenger in the street, 
 through the negligence of the de- 
 
 fendant's Servants, that the sack was- 
 the proximate cause of the injury, 
 and not the negligence." In the 
 cases referred to in the text there i» 
 
 an intervening and independent act,, 
 of a new actor. 
 
 »Swan V. N. B. A. (1868), 2 H. & a 
 170; 33 L. J. Ex. 278. 
 
 ♦Cold and humidity may be two 
 proximate causes of rain; but it i» 
 
OABELKSSNESa SOMEtlMES ESSENTIAL, ' 121 
 
 5L'*/*°'^" negligent act, brought about one of such causes, is liable for 
 the injurious consequences resulting therefrom." i 
 
 Upon the whole the present writer suggests that the word 
 
 "proximate" should be discarded, and offers as a substitute for 
 
 the rule under consideration the requisite that 
 
 ;;tVnru?s-r c?re^^^^^^^^^^ p«''"*'° °^"''* •»-« ^^^ '— »>'y -- 
 
 to the elucidation of which a chapter will be devoted.' 
 
 Observe the distinctions between the two rules — the one 
 under discussion and that suggested. Orthodoxy requires that 
 the neglect should be the proximate cause of the mistake; but 
 such close association is, as we have seen, impossible. Innova- 
 tion demands merely that one thing should have been reason- 
 ably consequent upon the other. Another alteration is perhaps 
 more verbal, although not without substantiality. It suggests 
 that it is the change of position, and not merely the change of 
 thought (some mistake), that has to be reasonably consequent 
 upon the carelessness. 
 
 SUMMABT. 
 
 The result of the foregoing considerations is as follows: 
 
 (1) There can be no estoppel without misrepresentation j 
 there can be no such thing as estoppel by carelessness unless 
 some one has been deceived. 
 
 (2) It is not, however, at all necessary that the person said 
 to be estopped by the carelessness should have himself made 
 the representation, or should have hem h, tny way a party 
 to it. ' 
 
 (3) Upon the contrary, estoppel by carelessness never arises 
 w^ere the misrepresentation is chargeable to the careless party. 
 That would be a case of personal misrepresentation ; and in 
 such cases estoppel would ensue whether there was carelessness 
 or not. 
 
 (4) It only arises where the carelessness is by one person and 
 the misrepresentation by another; that is, in cases of assisted 
 misrepresentation. 
 
 (5) Hide Ifo. 1: « That there must be neglect of some duty 
 
 not quite so clear that in Swan's case i Waller v. Missouri, etc. Ry. Ca,. 
 \t won'-d v^-e correct to guy that the =.9 Ma App. 410; I Ma App. 58. 
 broker's fraud and Swan's negli- 2Ch.XIIL 
 genoe were both proxi mate causr s of 
 the injury done to ih*- vsrohacer. 
 
CONDITION NO. 7. 
 
 I 
 
 that 18 owing to the person misled," is of general application, 
 and IS not confined to cases of estoppel by carelessness 
 
 (6) RuU No. 2: « That the neglect must be in the transac- 
 tion Itself," is vr^' : Possible in estoppel by carelessness - 
 the neglect is necessarily always either prior or subsequent to 
 
 the transaction itself." 
 
 (7) IduleNo. 3: "That the neglect mnst be the proximate 
 cause of the leading of the person into the mistake," is impos- 
 sible of application in cases of estoppel bv carelessness. The 
 proper rule is that "the estoppel-asserter's change of position 
 must have been reasonably consequent upon the carelessnosb " 
 
 (8) Cases of estoppel by carelessness are not at present un- 
 common. They should be determined upon the ground well 
 known in actions of tort th^t people ou^Ht to be punish, d for 
 r,?nfi^*L?J??'°" to do something which a reasciaoke man. guided bv hose 
 wn„ H i^*'°"f ''^^'°^ ordinarily regulate the conduct of human a ° 
 not di " *^ somethmg which a prudent and reasonablSSan w. 
 
 rs 
 d 
 
 punished sometimes by damages, and sometimes by estoppel 
 
CHAPTER X 
 
 CONDITION NO. a 
 
 The Jrypelasserter Must he a Person to Whom, Immedi- 
 uiely or Mediately, tlw Misrepresentation was Made. 
 
 Immediately.- The mere fact that there has be. . a misrep- 
 resentatiou, and that somebody has acted on it, will not be 
 
 wortT"^ ^"^ '''°''' ^"^ ^''°PP^^- ^' ™ ^""'^ ^^ I^^^-^ Cran- 
 
 And as was said bj Cieasby, B, in Hosegood v. Bull: « 
 been given 2> him thlt theTnfo^^^^^^^ ^^^^^ 
 
 relief on the groun^^f m^enreXtS^^^^^^^^ If ^^^^^^^^^ ^'»cfi 
 the individuafto whoa. t^^Z^S^.^V^.^^^^^^^^Z't"''' 
 m Za Zt^r^ u Oould^ a surveyor gave to his employer cer- 
 tificates as to the progress m.le in building two houses, which 
 <5ertifacates were untrue. I , on ti faith of these ceruficates 
 another person (the mortgagee of . t. employer) advanced cer. 
 tarn moneys. It was held that the surveyor was not liable to 
 the mortgagee It had not been intended that the certificate 
 should bo acted upon b • any person other than the person to 
 whom It was given. The mortgagee wis a stranger to the 
 misrepresentation. The decision would be the ame; no doubt 
 were a subsequent purchaser of land to act upon a certificati 
 as U the tile givP by a solicitor to a previous pur. aser. 
 he solicitor would be liable to his client, but not to others.* 
 
 1 Jorden v. Money (1854), 5 H. L. C. 
 213; 88 L. J. Ch. 865. And see Kin- 
 ney v. Whiton ^877), 44 Conn. 233; 
 Maguire v. Selden (1886 1, 103 N. Y. 
 
 man (1899), 83 a E. R. 427 (Ga.). 
 '(1877) ML. T.N. a 620. 
 
 Al'ttW- 
 
 '(1898) 1 Q. B.491; 63 L. J. Q. B. 
 80.3. To same eflfect is Atkins v. 
 Payne (1899), 190 Pa. St 6; 43 AtL 
 R878. 
 
 * Bui ai. abstracter of titles would 
 be under oiligatit ^ to a third per- 
 son if he knew that the abstract was 
 
124 
 
 CONDITION NO. 8. 
 
 JT' Hatehj; Intended to he Passed on.— Upon the other hand^ 
 it would be a grievous mistake to assume that there will be es- 
 toppel only as against the particular person to whom the mis- 
 representation is immediately made. As there are ambulatorv 
 promises/ that is to say, promises intended to be redeemed 
 to persons other than the immedule contractor, so also are 
 there ambulatory representations; that is to say, representa- 
 tions that are intended to be passed on, intended to influence 
 the action of third persons. 
 
 "It is now well established that in order to enable a person injured by a 
 false representation to sue for damages it is not necessary that the repre- 
 sentation should be made to the plaintiff directly; it is sufficient if the 
 rejpresentation is made to a third person to be communicated to the plaint- 
 iff, or to be communicated to a class of persons of whom the plaintiff i» 
 one, or even if it is made to the public generally with a view to its beinij 
 acted on, and the plaintiff as one of the public acts on it and suffers dani- 
 ages thereby."' , 
 
 Current methods of explanation would suggest the phrase 
 "estoppels bind parties and privies" as a sufficient solution of 
 the law as to ambulatory representations. That phrase, how- 
 ever, was not originally intended to apply to estoppel by mis- 
 representation, and a portion of a subsequent chapter* will be 
 devoted to proving its inapplicability to that subject. For the 
 present it will suffice to point out that « privity " assumes the 
 existence of some property to which the estoppel is, as it were, 
 annexed, and with which it runs. The ideas of an estoppel in 
 gross and of its being transferred in unattached form to some 
 third person are, of course, quite foreign to the usual use of the 
 phrase under consideration. Such phenomena are, however, 
 by no means uncommon in the law of estoppel. Take a few 
 cases : 
 
 Misrepresentation as to Solvency. — For example, let us vary 
 a little the Hosegood v. Bull case. Let us suppose that when 
 A. asked B. as to O.'s solvency it had appeared to B. that the 
 information was being obtained in order to be passed on to 
 some one else. This variation would change the result, and B. 
 would now be estopped as ,'ainst this other person. Some- 
 
 required for his purposes and was to 
 be used by him. Brown ▼. Sims 
 (1899), 58 N. E. R. 779 (Ind.). 
 
 •Seech. XXIV. 
 , » Per Qnain, J., in Swift v. Winter- 
 
 botham (1873), L, R 8 Q. B. 258; 43 
 L. J. Q. E 111; approved in Richard- 
 son V. Silvester (1878), U R. 9 Q. B. 
 36: 4.3 li .r Q. B. L 
 >Ch. XV. ^ " 
 
MISREPRESENTATION — TO AVHOM. 
 
 125 
 
 times asage alone would suffice to indicate to B. the purpose of 
 the inquiry: 
 
 ««ri' '"""t be intended that the an«w rs to such inquiries would be sent 
 not merely for the use or benefit of the bank making the inquiry, but for 
 the use and benefit of the customer on whose behalf the inquiry is made. 
 K„:.i,' * the present case it has been proved to be the usage amongst 
 bankers to make inquiries of this kind on behalf of their customera" i 
 
 Partnership.— -l^x earlier times the application of estoppel to 
 
 partnership {i. e., a person not in fact a partner bein^ liable 
 
 nevertheless as such, because of his having been so represented) 
 
 was not clearly comprehended; and it was laid down that if 
 
 the alleged partner had been held out "to the world" as a 
 
 member of the firm, he would be liable to everybody upon its 
 
 obligations.* But this is not the modern doctrine; and if a cred- 
 
 itor of a firm now assert that a person was a member of the 
 
 partnership when in fact he was not, it must be upon the ground 
 
 that the latter misled him, and not that everybody else was 
 
 misled. But the holding out need not be directly to the person 
 
 deceived. 
 
 "The defendant would be bound by an indirect representation to the 
 plaintiff arising from his comiuct. as much as if he had stated to him dl- 
 recthr and in express terms that he was a.partner, and the plaintifl had 
 acted upon that statement"* 
 
 Commercial Instrumental ^<c.— Another class of documents 
 intended to be passed on embraces delivery orders, warehouse 
 receipts, bills of lading, and other instruments known to com- 
 meroe. 
 
 Delivery Orders.— Yor example,* a railway compan}^ by 
 mistake, issued two delivery orders for the same goods. Upon 
 
 1 Swift V. Winterbotham (1878), L. 
 R t Q. B 244: 48 L. J, Q. R HI; L. 
 R 9 Q. L. 301 ; 48 K J. Q. R 66. Com- 
 pare S'ii-st Nat Bank v. Marshall 
 <1895), 108 Mich. 114; 6.5 N. W. R 604. 
 The cases cited are not the most sat- 
 isfactory examples of the point in 
 hand, as they may be referred to the 
 law of principal and agent — the in- 
 quiring bank was the agent for the 
 real inquirer. It is just as well, how- 
 «ver, to note that estoppel by misrep- 
 resentation may exist in favor of an 
 undisclosed principaL 
 
 2Waugh V. Carver (1793). 3 H. Bl. 
 235; De Berkom v. Smith (1798), 1 
 Esp. sa And see ch. XXVIL 
 
 • Dickenson v. Valpy (1829), 10 R 
 & C. 140; 8 L. J. K. R 61. And see 
 Vice V. Anson (1827), 7 R & C. 409; 
 6 L. J. K. B. 24; Marty n v. Gray (1863), 
 14 C. B. N. S. 839; Re Fraser (1892), 
 2 Q. B. 637; McLean v. Clark (1893), 
 20 Ont App. 671 ; Hannah v. Baylor 
 (1887), 27 Mo. App. 303; Denishorne 
 V. Hock (1886), 112 Pa. St 240; 3 Atl. 
 R 777; Burrows v, Grover (1897), 41 
 S. W. R 822 (Tex.); Nofsinger v. 
 Goldman (1808), 55 Paa R 425. And 
 see ch. XXVH. 
 
 ♦ Coventry v* Grea* E 
 
 " ■ ■■ -J' 
 
 (1883), U Q. R D. 776; 52 L. J. Q. R 
 694. 
 
126 
 
 CONDITION NO. a 
 
 the faith of the second of them a third person advanced money^ 
 
 and the railway company was estopped as against him from 
 
 denying the representation contained in the order. "There 
 
 was evidence of custom to sell or pledge goods upon the faith 
 
 of a document of this kind "— evidence that it was intehded 
 
 to be passed on. Brett, M. E., said: 
 
 "It is true that there can be no negligence unless there be a duty; but 
 Here the documents have a certain mercantile meaning attached to them, 
 and therefore the defendants owed a duty to merchants and persons iiiielv 
 to deal with the documents." t^ ow = .i«.cijf 
 
 Warehouse Eeceipts.— Where a warehouse receipt is given 
 
 for goods not actually received, knowing that the receiver 
 
 would produce it to 
 
 "intending purchasers; or, in other words, take it into the market and. on 
 the faith of the truth of the representation therein contained, ... sell 
 that quantity so stored to any perpon desirous of purchasing it," 
 
 the warehouseman is estopped, as against any person purchas- 
 ing on the faith of the receipt, from denying its truthfulness." 
 
 Letters of Credit— It has been well held tha% whatever may 
 bo the effect of a letter of credit at law, it constitutes a con- 
 tract to the benefit of which all persons taking and paying for 
 bills on the faith of it are entitled in equity, without regard to- 
 the equities between the bank and the holder of the letter.' 
 
 Bills o/*Zarfm<7.— Eepresentations in bills of lading aro to- 
 be taken as having been 
 
 "made to any one who, in the course of business, might think fit to make- 
 advances on the faith of them." 3 KLUUHIAP 
 
 Certificates </ ^/?are5.— Company's certificates of shares are 
 
 intended « to be acted upon by the purchasers of shares in the 
 
 market,"^ and consequently the company is estopped by them, 
 
 as against persons who purchase upon the faith of them. A 
 
 share certificate issued 
 
 "to give the shareholder the opportunity of more easily dealing with his- 
 shares is a declaration by the company to all the world that the person 
 in wh^se name the certificate is made out and to whom it is given is a 
 
 1 Hoi ton V. Sanson (1862), 11 U. 0. 
 C. P. 606. See ch. XXII. 
 
 2 Re Agra & Maaterman's Bank 
 (1867), L. R 3 Ch. 391 ; 86 L. J. Ch. 223. 
 See also Re Blakely (1867), L. R 3 
 Ch. 160; 36 L. J. Ch. 665; Quebec 
 fiank V, Taorgart (1896^. 2? Ont lfA» 
 
 'Armour v. Michigan, etc. Ry. 
 
 (1875), 63 N. Y. Ill, 123. See ch.. 
 XXIV. 
 
 * Per Lord Herscheli in Balkis, etc.. 
 Co. V. Tomkinson (1893), A. C. 403; 6a 
 L. J. Q. B. 134. 
 
 »Per Cockburn. C. J., in Re Bahia, 
 ■zl-^. ucuo;, u. n. a ^^. n. 0C34; 6'! iM J, 
 Q. B. 166. See cases citod with this- 
 in oh. XXII. 
 
MISBEPBESBNTATION — TO WHOM. 127" 
 
 Prospec(uses.-.The law upon this subject will appear from 
 the following cases : rr -^ 
 
 {1855) Scott V.Dixon} Plaintiff bought some shares in a 
 company upon the faith of statements contained in a report 
 made by the directors to the shareholders. Copies of it were 
 left at the bank and were to be had by share brokers or any- 
 body applying for them who was desirous of information with 
 regard to the affairs of the bank with a view to the purchase 
 of shares. Plamtiff had obtained a copy of the report before 
 purchasing his shares. The directors were, upon evidence given 
 of the intention to circulate the report, held to be liable? but 
 the case would probably have been decided in the same wav in 
 t^he absence of such evidence upon the ground that (per Camp- 
 
 This was a case of a report. But distinguish between a re- 
 port and a prospectus : 
 
 (1873) Peeh v. Guvney? The promoters of a company issued 
 to the public a prospectus for the purpose of obtaining subsorip- 
 tions for shares. After the shares had been allotted the plaint- 
 iff purchased some shares in the market. Held, that he was 
 not one of the persons to whom the prospectus was addressed. 
 Lord Uolonsay said : 
 
 (1896) Andrews v. Mockford:'' 
 
 In such case the directors would be liable to subsequent pur- 
 chasers of the shares. ^ ^ 
 
 1 ?9 L. J. Ex. 63. 
 
 ''See also New Brunswick, eto. v. 
 Conybeare (1862), H. L. C. 711; 81 
 L. J. Ch. 297; Western Bank v. Addie 
 (1867). L, TL 1 Sa *; D. 145. 
 
 »L.R. 13 Eq. 79; 41 I. J. Ch. 436; 
 L. R. 6 H. JL 377; 43 L. J. Ch. 19. 
 
 ♦The allottee himself, no doubt, 
 could have sued. Gerhard v. Bates 
 a852), a El. & a 473; 23 L. J. Q. B. 
 364; Henderson v. Lacon (1867), I* R. 
 
 «> Jk4V|i <w-tt/. 
 
 » Per Kigby, L. J. (1896), 1 Q. B. 872; 
 65 L. J. Q. B. 30a 
 
123 
 
 CONDITION NO. 8. 
 
 Commercial Agencies.— Bepresentationa made to a commer- 
 cial agency are intended to be acted upon by the patrons of 
 the agency, and will operate as estoppels in favor of such of 
 the patrons as may, upon the faith of them, change their posi- 
 tion.^ ' , 
 
 Stoc^ Exchange.— In the same way representations to a stock 
 exchange are intended for the members of it. In one case^ 
 Bram well, B., said: 
 
 trul'irf^mf n^^^ ^'™"^® *'''°S ^ ^P^^ ^^^^ 'f » ™a° makes a verbal un- 
 Zrrnr^iV^^J' *° *°^ ^ u?°°' "^ ?°' fn^t^inoe that the shares in a particu- 
 
 nis iriends to buy. that he is to be liable to any one who buys on the faith 
 of such representations. But it is not a bad rule that a peSi who makes 
 SiSbilfrhirr''"***'^"* ^^^'^^ *« intended to be geLmlly oirSZted! 
 JheiteqttesmSJKT" -^""'^'^ l*^ -««°« upo# it. how^ever remote 
 
 And Pollock, C. B., said: 
 «, ^^i'j^tT"^ buying shares on the stock exchange must be considered 
 be made I^j'i!"? " '"^'^ contemplated that the representations woSd 
 be made. I am not prepared to lay down, as a general rule, that if a ner- 
 son makes a false representation, every one to whom it is reoeated and 
 also acts upon it may sue him. . . . Generallyrif a fti L SS^^^^^^ 
 
 rt*h?f*f ;?'".* '' "^'^^ V^K^ ^^«^ t° deceive tEartJ who is injured by 
 It. that affords a ground of action. But I think tliat there must alwavs 
 be this evidence against the person to be charged, viz.: that the nfaSfff 
 KuTlSmld^'nrT *° ^'^""^ ^ contemplat^ed that the represeftSn 
 ««,aJf K *• '• °'. * P®"*^"." "''^o™ tlie defendant ought to have been 
 aware he was injuring or might injure." "ugut i,u uave oeen 
 
 Of this and a similar case Lord Chelmsford said: 
 «,a"f?}l <^^0'8'onf, and the grounds on which they proceeded, appear to 
 me to be extraordinary, and I cannot bring my mind to agree wlih Em • "° 
 but It is apprehended, nevertheless, that the law is well founded. 
 
 rt2!/ei>6W*.— Title deeds are clearly documents which are 
 intended to be passed on; and a duty of carefulness, therefore, 
 exists m regard to persons who may subsequently acquire an 
 interest in the land. The subject is discussed in a subsequent 
 chapter.* 
 
 "^^"5^^/«w5c*."— Frequently,intheTJnitedStates,anobligor 
 indorses upon his obligation a certificate to the effect that he 
 has « no defenses, equities or set-offs of any kind." The plain 
 intent of such certificates is that they ghall be acted upon by 
 transferees of the obligation; and such transferees are entitled 
 to take advantage of them by way of estoppel* 
 
 1 Stevens v. Ludlum (180!), 48 Minn. 
 160; 48 N. W. H. 771; Irish, etc. Bank 
 V. Ludium (1893), 49 Minn. 255; 81 N. 
 W. R. 104G. 
 
 'Bedford v. Bngshawe (1859), 4 H. 
 &N. 538; 29 L. J. Ex.59. 
 
 "Peek V. Guiney (1873), L. K. G 
 II. L. 897; 431* J. Ch. 19, 
 
 * Ch. XIX, 
 
 8 Gray y. Bank of ICftRf.v.^ljT-^'fiR'?^ 
 89 Pa. 8t 365; Penn. R R. cV's Aji^ 
 peal (1878), id. 80; Robertson v. Hay 
 
MISliEPBESENTA'aox — TO WHOM. 1 I29 
 
 **]SregotiaUe Imtrumenfs:' » — BWls and Tint«= a .« • * 
 xvhirh in nn ^c^^ ' 1 °°^®^ ^'^^ instruments 
 
 Suffice P^''' " '^°°^^ ^"^^^^^i^« r-fe'-'«ce must 
 
 binior'Xfl^^SX'inV^^^^^^ ," pai:ty signing in blank a check 
 
 and delivered toTseriL ofl^SS^' anf thl^J^?'* 'Y '^ ^^'^^" ^e filfed .p 
 
 liolders '-n the position indicated fnth/fi!,?t°''^ H® ^^^"'^s *« «" thesi 
 
 %^- CooL. He means the holde? to be^ndS^H^/ ? V"ile°?«°* °' 
 
 If It had been filled up tTomthlftrJ^>i°^^ *° ^^^^ ^^^ J°stru. 
 
 Fr^emln"v*£^or'"^" indicated"^ThVfi'^a?i°?.,!\« fh'J^^*^ '^» thes? 
 .nep^it^tee?KS-.l;21^^^^^^^^^^^^ 
 
 Of chZs Tnl^^n" "^'^ 'egal recognition of the assignability 
 orcnoses in action is rapidly increasing the classes of dnn.f 
 ments which are made with the intentiof of bein~d on to 
 others. The assignees of such documents take themTree from 
 oquihes existing between the parties to them * And the t'T 
 -cy IS to hold the parties to them estopped by the rept nta" 
 tions contained iu them. Consider under thisLLinA^^^^^^^^^^^^^ 
 Tn at^oHlutlf ^^' 1 A -ngagedebt is no doubt a ho 
 wirbe Is^^^^^^^^^^^ n^ "°^^^^^°^ ^^y --" believe 
 
 gagetTr^rtitirSat^^^^^^^^^^^ iz: 
 
 ;>pon, perhaps depLrC ^:^:ZZ"r' 
 hoe With the prevailing tende'ncy to impose a dityo'cr^ 
 fulness for the interest of people who mly be mislfd ^ ^^ 
 
 Myreeentaiionto Person Who Will ProlaUyte Applied to 
 
 t'trZT r^^^^^ bouse owied ceSnIt 
 
 tmgs m 1. He leased his interest, and procured the landlord 
 
 (1879), id. 844; Hutchinson v. Gill, id. 
 253; Riggs v. Pursell (1878), 87 n' Y 
 370. h ^ . X. 
 
 1 Until we reach chapter XXIV 
 the word " negotiable " and its deriv- 
 atives mu8t be use'^. 
 »Ch. XXIV. 
 ^Per Blaokbo-a, ,1, in Swan v. 
 
 North British (1868), 2 H. & C. 183; 
 82 L. J. Ex. 27a 
 
 /,!?* ."^^"■^ * Masternian'8 Bank 
 
 llo^\^;^^^'^-3«^'«8^J-Ch. 
 -ii^. And see the whole matter die> 
 cussed in chapter XXIV. 
 
 90^ "^f^/^ ^"" ^' ^^^' ''^ '- ^' Ch- 
 aii. And see the casos referred to 
 ?vith this one ic chapter IV. 
 
130 
 
 CONDITION NO. 8. 
 
 to accept the purchaser as tenant. By the agreement betwqeit 
 the landlord and the new tenant the former was to be entitled^ 
 at the end of the term, to deduct any arrears due from the- 
 tenant from a valuation of the fittings. The original lessee- 
 was aware of this agreement and made no objection to it. 
 Clearly then, as between him and the landlord, he would 
 have been estopped from setting up his ownership. But the 
 question did not arise between them. The new tenant after- 
 wards sold the good-will of the business and tH(^ fittings upon 
 the misrepresentation that he was the owner l iCreof ; and he 
 referred his purchaser to the landlord, who informed him that 
 the person assuming to sell was in fact the tenant. It was. 
 held that the owner of the goods was estopped.' 
 
 In this case it is not, at first sight, quite clear why the 
 owner of the goods should, be estopped by what the landlord 
 said; but when it is considered that the owner misled the 
 landlord, and that he knew that any persons desirous of deal- 
 ing with the tenant would, in the usual course, go to the land- 
 lord for information as to the ownership of the goods, the- 
 soundness of the decision becomes more apparent. 
 
 Misrepresentation hy Appearing to Subscribe for Shares. — 
 Where shares are subscribed in order to induce others to invest 
 and the scheme is successful, the decoy is estopped as against 
 the dupes from asserting a secret arrangement with the com- 
 pany.2 
 
 Ambulatory and Non-ambulatory. — That there are ambula- 
 tory as well as non-ambulatory representations may now b» 
 taken as having been sufficiently established. 
 
 lOreKK v. Wells (1839), 10 A. & B. 
 00; 8L.J. Q. B. 193. 
 
 2 (1858) 31 Pa. St 43a 
 
CHAPTER 21. 
 
 CONDITION NO. 9. 
 
 '^'^'l^PP^^-^^serter Must, on the Faith Of the Misrepresmta- 
 Uon, Have Changed His Position Pr^uaicZTy 
 
 party estcj)ped."f >"™»«n reliance on the words or conduct of the 
 
 ,o™thing.h,re..no4arhi°srordZi^u°jt«L^rdr^^ 
 
 n. On the faith, etc. 
 in. Prejudicially. 
 IT. Purchaser for value without notice. 
 
 I. Change of Position. 
 Change of position to misrepresentation bears somewhat th« 
 same relation as consideration to contract. A i^sZresenta 
 
 quences. But the point must be noted, and even dwelt uoon 
 for It sometimes in practice escapes observation Note^U 
 apphcatio. in thefollowing case. Defendant, having th^ai 
 
 -'^inZTlT r '^" ' ^^^'^"^'^^ ^' '^^ causl of de'en 
 -. , m which he admitted having a warrant for plaint ffl 
 - iv.charge on . certam date. Plaintiff, believing this wTr an 
 *o be insufficient (not acting upon the admiesiof), .ppHed for 
 
 'Lingonner v. Ambler (1895), 44 
 Neb.816;«3N.W.R.486. And see 
 
 Tower v. Hoslum (1891), 84 Me. 86; 
 
 34 At . a, 58? ; Stanton v. Estey (1892), 
 
 90 Mich. 12; 31 N. W. R. 101; Pear' 
 
 son V. Brown (1898), 105 Ga. 803; 81 
 
 !;; «^' 'f'' 9^'Jf ^d3 ;% McClur6(1898), 
 
 »•-• -aiO; iipp, 55, Jctuiihon V. Miller 
 
 (1384), 64 Iowa, 403; 20 N. W. R. 491, 
 'Per James, L.J.,in Ex parte Ada m^ 
 
 sou (1876). 3 Ch. D. 8x7; 47 L. J. Bk. 
 103. And see Low \. Bouverie (1891) 
 
 3Ch.lll;60L.J.Ch.5{><;ConradT. 
 Fisher (i889X 87 Ma App. 352; D^an 
 V. Crall (1894X 98 Mich. 591; 57 N. W. 
 R S18; Barry v. KirkJand (1898), 62 
 Pac. R. V71 (Ariz.)' w^ja. „ i?/-^. 
 (1899), 180 Ilj. 616^ 54 N. E. RMS- 
 Oak Creek V. Heii«^r (1899, Neb.), m 
 N. W. R.89L 
 
132 
 
 CONDITION "Ito. 9. 
 
 lO ti 
 
 an order for his discharge when the date should arrive, which 
 order was refused. Having been detained three davs beyond 
 the date mentioned in the wari^nt, he sued for damages. In 
 this action the defendant denied having the warrant, and it 
 appeared that he had a copy of it only, mid, that he was not 
 estopped by his previous admission or representation, for the 
 plaintiff had in no way acted upon it.' 
 
 There can of course be no Bum change of position as will 
 result in estoppel if it chronologically precedes the misrepre- 
 sentation complained of." It is impossible, too, that any repre- 
 sentation can be acteu upon if its existence be unknown to the 
 estoppel-asserter. In a case,' therefore, in which it was said 
 that a principal was estopped from denying that his agent had 
 certain powers, because he, the agent, had been intrusted with 
 certain general authority, from which the existence of these 
 powers would naturally be inferred, it was held that the prin- 
 cipal was not estopped as against a person who was not aware 
 of the general authority, and who, therefore, could not have 
 drawn the inference. 
 
 It has been held in jurisdictions in which registration of a 
 transfer of shares is necessary to the passing of the property 
 m them, that creditors of the transferrer can attach the shares 
 prior to registration. If the creditors had advanced their 
 money — changed their position — upon the faith of their 
 debtor's ownership of the shares, something could be said for 
 them; but the cases often ignore the necessity for change of 
 position of any sort.* 
 
 1 Howard v. Hudson (1853), 3 El. & 
 B. 1; 22 L. .J. Q. a 841. 
 
 » Barnard v. Campbell (1874), 55 N. 
 Y. 458; Ehrler v. Braun (1887), 120 
 111. 503: 33 111. App. 319; 13 N. E. R. 
 603; McManus ▼. Watkins (1893), 55 
 Ma App. 92. 
 
 » Miles V. Mollwraith (t883), 8 App. 
 Cas. 120; 52 L, J. P. C. 17. And see 
 Stewart v. Rounds (1888), 7 Ont App. 
 615; Murphy v. Barnard (1894), 163 
 Mass. 72; 38 N. E. R 29. But see 
 Hanover Nat. Bank v. American 
 (1896), 148 N, Y. 78; 48 N. E. R 618. 
 
 'akownegaa v. Cutter (1860), 49 
 Me. 815; People's Bank v. Gridley 
 
 (1879X 91 111. 459; Union Bank v. 
 Laird (1887). 2 Wheat 890; Hirsch v. 
 Norton (1^8), 115Ind. 341: 17 N. R 
 R 618; Pierce v. Horner (1895), 148 
 Ind. 626; 42 N. E. R 88& See, liow- 
 ever, Lightner's Appeal (1876), 82 Pa. 
 St. 301; "Moore v. Albro (1880), 129 
 Mass. 9; Sibley v. Quinsigamon 
 (1882), 133 Mass. 515; Burgess v. Seljg- 
 man (1882), 107 U. a 20; Masury v. 
 Arkansas (1899), 35 C. C. App. 476; 93 
 Fed. Rep. 603; Colebrook on CoL See. 
 252. In Massachusetts legislation 
 was pasRed to correct t.!is Henjirf-.tr^ 
 of the cases from principle. Newell 
 T. Williston (1885), 188 Masa 840. 
 
CHANGE OB^ POSITION'. 
 
 13a 
 
 resentation must have been « acted upon » in order that it mav 
 produce estoppel. That is not quite accurate; for, if the 71 
 representation arrested action, it would have^heame effect 
 "uTotlr'^'Z'-'''''''' position-is the requisitT 
 
 bas means in his power to retri6v«M,?lflf-®'* "* reliance upon it, but 
 statement and in consequence ontLrpfS^'n-'°f°' *"''• "^'^'^'"8 "P^" the 
 his claim will be upheld."! refrains from using these means, 
 
 "lulirinTo ™""^.rr «^,^«*Wel in Which a person has been 
 with H . ''°""'^ ^"^ ^^' "'''^^ satisfied "-cases in 
 which he has not parted with money or property on the faith 
 of the representation, but in which he has lost so'me chance of 
 recovering ,t. A careful examination of one of these' wU 
 
 had^cL: fr 1^' ^^^^''\-«- ^-riedly. Some solicitor 
 had a client (No. 1) possessed of a mortgage; they agreed for 
 the sale of it to another client (No. 2) and ieceived^the pu" 
 chase-money from him; they then procured No. 1 to execute 
 an assignment of the mortgage to No. 2 by fraudulently mt 
 representing Its nature; the assignment was afterwards handed 
 to JNo. 2. Both clients now thought that they owned the 
 
 2n ^'^!l^"^ ^^"^ ''™^^°'^ ^''' ^"« y^^'' afterwards of that 
 opin on, the mortgagor paying interest to one of them and the 
 solicitors to the other. 
 
 Then the question arose, Who is to lose? No. 1 took the 
 
 yet that No. 2 had not paid the purchase-money; he (No 1 
 
 had not received it, and the solicitors had no authority from 
 
 him to do so. No. 2 had to admit thatthat position was valid; 
 
 but he contended tb.t No. 1 was estopped from asserting tha 
 
 he money had not gone to him, because, in the assignment of 
 
 the mortgage, he had acknowledged the receipt of it. No 1 
 
 replied that that also was true, but that No. 2 had not chanc^ed 
 
 his position upon the faith of that misrepresentation, for'he 
 
 had paid over his money to the solicitor before the assignment 
 
 I Continental Bank v. National 
 Bank (1872), 50 N. Y. .575. And see 
 London v. Suffield (1897), 3 Ch. 008; 
 68 L. J. Ch. 780: Tobin v. Allen (ia.TR\ 
 53 Misa 563; Bank of U. S. v. Bank of 
 Georgia (1825), 10 Wheat 38.3; Farm- 
 ers V. Orr (1899, Ind.), 55 N. E. R 85. 
 
 2 Gordon v. James (1885), 30 Ch. D. 
 249. See also Herchmer v. Elliott 
 (1887). 14 Ont. 714; Re Swinbanks 
 \!-~:~;, ii x^u. .1!. rA7t. 4o ij, J. nk. iau; 
 Re Bellamy (1888), 24 Ch. D. 887; 58 
 L. J. Ch. 870; Re Hetling & Blerton 
 (1893), 3 Ch. 275; 62 L. J. Ch. 783. 
 
134 
 
 CONDITION NO. 9. 
 
 Tvas executed. Once more No. 2 bad to admit the fact allege,d, 
 
 but he urged that after he parted with his money he received 
 
 the deed; that it then appeared to him that the money had 
 
 reached No. 1, and that he (No. 2) was, by such appearance, 
 
 lulled into inactivity. The question then was narrowed to 
 
 this: Had No. 2 acted upon the misrepresentation contained 
 
 in the assignment? If he had, No. 1 would be estopped. The 
 
 judges said as follows: 
 
 Cotton, L. J. : 
 
 " By puttinf; that deed Into the hands of their agent (the solicitors) they 
 (i.<o. 1; enabled him to represent to James (No. 2) that that money . . . 
 was really paid to them on the transfer of this security." 
 
 Lindley, L. J. : 
 
 "The plaintiffs, by their carelessness you may say, but I shou.i rather 
 sav by their act, enabled Dodge (the solicitor) to deceive James (Na 2) and 
 lull him into security, and prevent him having recourse to those who got 
 his money from him by a trick." 
 
 Fry, L. J.: 
 
 "I think the result of that would naturally be that James (Na 3) would 
 not make that inquiry and search after the money which he would have 
 made if he had found that after paying it to Dodge & Phipps (the solic- 
 itors) it had not been invested. I think, therefore, that the defendant 
 James (No. 2) has an equity which he may rightly set up in this case against 
 the equal equity of the plaintiffs as unpaid vendors." 
 
 This reasoning is worth examination. It was admitted 
 in the case that if No. 2 had paid his purchase-money to the 
 solicitors at the time that he received the assignment he would 
 have had no case. He would have had none, because he would 
 have known that the misrepresentation contained in the as- 
 signment could not be true, and he could not, therefore, have 
 acted upon it; he would have known that although the assign- 
 ment represented that the money had been paid, it had not in 
 fact been paid, for he had not then paid it; he would not have 
 been misled, and so there could have been no estoppel. The 
 only question in such case would have been whether the solic- 
 itors had authority to receive the purchase-money; and by hy- 
 pothesis they had not. In such case,* therefore, the purchase- 
 money not having been paid and No. 1 not being estopped from 
 denying that it had, his right to payment would have been in- 
 disputable. 
 
 Putting the case more shortly : A purchaser receives through 
 the vendor's solicitor a conveyance containing an acknowledg- 
 ment of receipt of the purchase-money, and simultaneously or 
 subsequently pays the purchase-money to the solicitor; the solic- 
 
CHAjrOE OF POSITION. 
 
 135 
 
 nop 1,^ no authority to receive the money and the vendor is 
 entitled after^rds to enforce payment. On the other hand 
 jTr'- """' "" P-'-ta-n^oney to the soIiciLr an" aZi 
 ward, receives a conveyance containing an acknowledemert 
 
 What IS the distinction? It is this: In the former casTthe 
 purchaser was not misled.. I„ the latter he w^s iTboth 
 «ases the deed represented that the vendor harreceived the 
 
 for h„ I '" '''«/''™« "a^* the purchaser was not deceived 
 for he knew the fact to be otherwise; whereas in the Utter 
 
 theTertrrtiT' '" '"™^^' '^ •'»'-«'> -■>- •■ «- "eS 
 
 Z^u } " representation which it contained (that the 
 
 acted upon the misrepresentation to his disadvantage (by re- 
 maining quiescent), and the vendor was estopped. ' ^ 
 
 Note the character of the disadvantage which the purchaser 
 .n the case just dealt with sustained. He did not lose plertv 
 Z T?^' ';', "* '"'' "" °Pl»''»nitr to recover hrmoney !l 
 monerXt r ""m r " '"^ '"l-'-y a»d search aftefthe 
 money which he would have made "-that was enongh. 
 
 Note, secondly, that the action of the man estopped was in 
 the two supposed cases, precisely similar; and yetTu tL one 
 he IS estopped and in the other he is not. In botCl he Z 
 cuted the assignment without receiving the money in bTtl 
 the a^gnment, contrary to the fact, represented that he had 
 received the money; in both he acted honestly; in both the^ 
 « long delay; in both, therefore, there is the slme dtree of 
 carelessness; and in both the same innocence of intt°nUona 
 misrepresentation. The difference in the cases lies in tWs Z 
 misrepresentation does not necessarily result in estopped th" 
 
 ^erslTh" °"'V'™ '"'"■' ""^» °' misleading an'o he 
 person to his a-.sadvantage; and where that has hap^ned the 
 question of fraud or b,,d faith is immaterial. ^ 
 
 MotAdmsin^ -^f Forgery.-The cases will now be easilv 
 
 anlXr h- kV'"""''™ '""' « ^ """'^ namlbe fo^g i! 
 and after himsel becoming aware of the fact he refrain from 
 advising the holder of the document. »nj K. .„,.„. '™..,T 
 
136 
 
 CONDmOM KO. a 
 
 action the holder's position is changed (by the death, escape or 
 
 bankruptcy of the forger, or othe: vise), there will be estoppel 
 
 of the man whose name was forgeu. 
 
 h«n J »T^'i'*? ^ * ™°^* unreasonable thinpr to permit a man. who kne«r the^ 
 bank was relying upon his forged signature to a bill, to lie by and not tl 
 
 thi "ifotS^' ^n T^ ^' "^r '^^n^' P«'"«" ^f the bink wal altered for 
 the worse. But it aoDears to me that it wonlH a «.«..„ ii„ «^„*,„-„ ZTi-r. 
 
 he did so, the bank was in no worse position than ii was at the time when 
 It was first within his power to give the information." » 
 
 JV^ot Objecting to Accounts.— Suppose that a liian whose forged 
 checks have been paid by his banker had no actual notice of the 
 forgeries, but that had he examined his bank pass-book he- 
 would have found them charged against him; is he estopped 
 by reason of his inactivity ? It has been said that 
 
 '«a depositor owes no duty to a bank to examine his pass-book or canceled 
 checks with a view to the detection of forgeries." 2 t.anceiea 
 
 And even if the depositor should execute from time to time, at 
 ti;e instance of the bank, the usual certificate that the balance 
 •^1 own by the pass-book is correct, it may well be said that 
 iuch transaction is nothing but an account stated, which may 
 ;je rectified if it be erroneous. 
 
 Custom, however, must be reckoned with here as elsewhere. 
 As early as 1815 it was reported by the master in chancerv » 
 that '' 
 
 •for the purpose of having the pass-books made up by the bankers from 
 their own books of account, the customer returns itVthem frSm Ume to 
 
 iMcKenzie v. British Linen Ca 
 (1881), 6 App. Cas. 83; Cairncross v. 
 Lorimer (1860), 3 Macq. 830; London 
 V. Suffield (1897), 2 Ch. 608; 66 L. J. 
 Ch. 790; Pratt v. Drake (1859), 17 
 U. C. Q. B. 27; Merchants' Bank v. 
 Lucas (1887), 13 Ont 520; 15 Ont. 
 App. 573; 18 S. C. Can. 705; Forsyth 
 V. Day (1858), 46 Me. 196; Bank v. 
 Buffington (1867), 97 Mass. 498; Con- 
 tinental V. National (1872), 50 N. Y. 
 585; Hardy v. Chesapeake (1879), 51 
 Md. 563; Leather, etc. Bank v. Mor- 
 gan (1886), 117 U. S. 96; 8 S. C. R. 
 657; Schway v. Bank (1887), 67 Tex. 
 217; 2 S. W. R. 865; Kuriger v. Joest 
 (1899, Ind.), 52 N. E. R 764; Farmers 
 V. Orr (1899, Ind.), 55 N. E. R 35. 
 Distinguish between estoppel and 
 ratification in such cases: Scott v. 
 
 Bank of N. B. (1894), 23 & 0. Can. 
 287; Forsyth v. Day (1858), 46 Me. 
 196; Wiechers v. Central Trust Co. 
 (1894), 80 Hun, 576; 30 N. Y. Supp. 
 593. Distinguish Mangles v. Dixon 
 (1852), 3 H. L. C. 702. 
 
 2Wachsman v. Columbia Bank 
 (1893). 56 N. Y. 601; 26 N. Y. Supp. 
 885; 28. id. 7U. And see Devaynes. 
 V. Noble (1815), 1 Mer. 530; Manitoba 
 v. Bank (1889), 17 a C. Can. 692? 
 Agricultural v. Federal (1881), 6 Ont. 
 App. 192; Merchants v. Ludas (1887),. 
 13 Ont. 520; 15 Ont. App. 573; 18 S. 
 0. Can. 705; People v. Bank (1879)» 
 75 N. Y. 548; Viele v. Judson (1880), 
 82 N. Y. 32; Leather v. Morgan (1886), 
 117U. S.Ofi-flS r. p RKf. T„...„_ T -_ 
 
 . — _ ...„ r.iauu- 
 
 don (1891), 92 Cal. 14; 27 Pac. R llOOi. 
 'Devaynes v. Noble (1815), 1 Mer. 
 
CHANGE OF POSITION. 
 
 13T 
 
 U.e d" on IS i? sT/ft^'for'^ffiV"'"*' .^'"». '"^^^ *>y them up to 
 customer, who thereupon LaminesiraK *°^'^ 
 
 omission, brings or sends it bSJ^bi rectified -orTf nT^' ""Jy ^"^'^ ""^ 
 garded as an admission that the entries are' correSE^" '' *»'« «'»«°«« « '«- 
 
 folbws!"'^"^ '^' '"''""' '"'""' "^^y ^^^^ ^« ^^S'*^^ ^'^^ it aa 
 
 ha;bTco'r UTcSn' TisTne^i'o 't' ^" '^^^^^ -"^ered which 
 • ■ . other principles . .ne into^^rl^nn L^h*'°" ^"^ '"^''^'^^ °f ''•aud. 
 count who is under a duty from thfi^a^?, ZK"" ? P*""'^ '<» * ^^^^ed acl 
 examine it within a rea8oLhl«^,ml o« ^t^ °' busmess or otherwise, to 
 and give timely nJtfce of hiiob^e„t1nn,'" ^^'^^ *° opportunity to do so? 
 make such examination himself ortniv^/.'^°' r?*"'^*^ altogether to 
 other for him; by reason of wffh neeliJlnn!. H ™?u^ '° ^"""^ ^""h by an- 
 the account as having been aSe3*^^ nr Jn''**'"^P*J*^'"^'>''"K "Po» 
 steps for his protectionrwhic W S an^ «, ^^^^u^^^' ^""^ ^»''«d to t^te 
 been given. In other wolds parties ti a ^^I.^h"^*^ ^*^^ ^"'^^ ^"^^ "ot<c« 
 by their conduct from questio^n^ftJ^coVcfusiveS/.? "''^ ""' ««'°PP«<i 
 Meane of Knowledge,- 1% is sometimes said that chancre of 
 
 eatnrbh "'' ""' '^ "^^^^^^ ^' *^^ estoppel-asserter olid 
 reasonably have ascertained the falsity of the misrepresenta- 
 tion made to him. On the other handfit is broadly la'id down 
 
 "t nottri?^''''"''!;?' ^""''^ "P°" ""^ *^^ estoppel-asserter. 
 ^ js ^ot the less a ground for relief because he had the means of knowK 
 
 is m^/e bj'oVe prr?;to"S^^^^^^^^ an unequivocal statement. 
 
 that statement can get^rid of the eltonne w^^^^^^^^ *^^ P"*^ ^^o made 
 
 acting upon it, by savinc' thAf if tiff PP ^^ich arises from another man 
 
 ment>a^ reflected a^nrthough all aC Vh^^'^M't "'*'»« '*>« «ta?e 
 that it could not be true ..3 ^*"'' '*" *'**'"' '' ^o would have come to see 
 
 from inqS^ 3 n'Igll'c'tris' mlan?o7tn^f'""^ f?"^^** *J^« P-*^: to desist 
 with hiiSw^ made them to s.wXtthe?rf^^^^^ "o^ '•est 
 
 tained, and it was wrong to crSit them." * ^*^^''^ ""'^^^ ^»^e been ascer- 
 
 536. In Leather, etc. Bank v. Mor- 
 gan (1886), 117 U. S. 96: 6 a C. R 657, 
 It was said that « This report is quite 
 as applicable to the existing usages 
 of this country as it was to the usages 
 of business in London at the time it 
 was made." 
 
 1 Leather, eta Bank v. Morgan 
 (1886), 117 U. S. 107; 6 a C. R 65?. 
 And see Weinstein v. National Bank 
 (1877), 69 Tex. 38; Hardy v. Chesa- 
 peake (1879), 51 Md. 563; Dane v. Bank 
 of the Republic (1881), 138 Mass. 156; 
 Frank v. Chemical, eta Bank (1881) 
 84 N. Y. 209; First National Bank v 
 Allen (1893), 100 Ala. 476; 14 S. R 
 835; Clark v. National Bank (1898i. 
 63 N. Y. Supp. 1064. 
 
 »Willmottv.Barber(1880).15Ch D 
 106; 49 L. J. Ch. 792. And see Dyer 
 V. Hargrave (1805). 10 Ves. 505; Do- 
 bell V. Stevens (1825), 8 R & C, 683- 
 Directors of Central Ry. Ca v. Kisch 
 (1867). L. R 2 H. L. 120; 36 L. J. Ch. 
 849; Redgrave v. Hurd (1881), 20 Ch 
 D. 1; 51 L. J. Ch. 113; Smith v. Chad^ 
 wick (1882). 20 Ch. D. 27; 9 App. Cas. 
 187; 51 L. J. Ch. 597. But see Mc- 
 Lean V. Clark (1891), 21 Ont 683; 80 
 Ont App. 660. 
 
 "Per Lord Herschc!! in Bloomen^ 
 thai V. Ford (1897). A. C. 158; 66 L 
 <}. ^-11. ^jo; lyavia V. Fark (1870), 103: 
 Mass. 501; Strand t. Griffith (1809) 
 97 Fed. R 854. ^' 
 
 * Graham v. Thomj ^92^ 55. 
 
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 1993. Applied Imag*. Inc. All Rights RMvrvad 
 
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188 
 
 CONDITION NO. A 
 
 Observe, however, that these quotations refer to cases of ac 
 tive misrepresentation only -you must not turn a man away 
 from his means of information. As to oases of passivity. 
 Mr. Bigelow says: 
 
 But probably it would be more correct to limit the statement 
 to cases in which there was no " reasonable ground for antioi- 
 patmg some change of position," without reference to the rec- 
 ord. For example, if the owner was not only aware that no 
 search of tne records had been made or was intended, but. on 
 the contrary, stood by while the transaction was actuallv com- 
 pleted and the money paid over, without any search, he'ouffht 
 to bo estopped. " » o 
 
 be aoTii?'! "'' '^' "*"*•''* ^°*° ''^^^^ he had fallen, it was my duty to 
 And there seems to be no good reason for distinguishinff, in 
 this respect, between information in a registry office and in- 
 formation anywhere else* when the "silence is treacherously 
 expressive."* ««vuai^ 
 
 Registration does not interfere with the operation of that 
 statutory estoppel founded upon the doctrine of reputed owner- 
 ship ,n bankruptcy cases.' The fact, too, that a partnership has 
 been registered is no answer to a creditor who has sold his 
 goods upon the faith of a representation as to its constitution ' 
 
 Ark. 299; 18 a W. R. 6a The court 
 referred to Gammlll v. Johnson, 47 
 Ark. aaS; Bigelow on Est 687; Dodge 
 ▼. Pope, 98 Ind. 480: David v. Park, 
 103 Mass. 501; Holland v. Anderson, 
 88 Ma 68; Evans v. Farstall, 68 Misfc 
 80; Klefer v. Rogars, 19 Minn. 82, 
 
 > On Estoppel (5th ed.), 594. 
 
 'Kingman v. Graham (1881), 61 
 
 Wia282;8N.W.Ri81;Markham 
 T. O'Connor (1874). 58 Ga. 18a 
 
 » Ramsden v. Dyson (1806X L. R. 1 
 H. L. 141. And see cases cited with 
 this one, ante, p. 89. 
 
 ♦The cases to which Mr. Bigelow 
 refers are admittedly contradictory. 
 The suggestion in the text will heln 
 *o reoonoiie those of them which are 
 
 not referable to other principles. 
 See also Knouff v. Thompson (18511 
 16 Pa. St 867; Fisher r. Mossman 
 (1860X 11 Ohio St 48; Graham v. 
 Thompson (1898). 55 Ark. 896; 18 S. 
 W. R 68; Wynne v. Mason (1895), 72 
 Miss. 484; 18 a R. 488; Two Rivers 
 Ca V. Day (1899), 108 Wia 888; 78 N. 
 W. R 440. 
 
 »Per Thompson, J., in Niven v. 
 Belknap (1807), 2 Johna 589 (N. Y.X 
 And see Guffey ▼. O'Reilly (1885), 88 
 Ma 418, 485. 
 
 •Stansfeld v. Cubitt (1858X 8 De O. 
 * J. 888; 87 I* J. Ch. 266; Ex parte 
 Harding (1878), I* R 16 Eq. 828; 48 
 
 T McLean v. dark (1891), 31 Qnt 
 
OBAHOI o» PonnoN. 
 
 139 
 
 •nd require activity at mv handr' " assumption 
 
 «^h«" t '^^''"*'° °^ PoHtiont-UX us oo,v note two case, 
 
 crJiS ittrnTn^'u^ItSX^SiS.^^^^^^ ?S"- !'• •^'t«' having had 
 draw on his agent o2 the faith tKijA^^^-andh^ been allow^ed to 
 be called upon to pay them back "» "' belonged to him, he may 
 
 Change hy Bringing an Action.- A man who had been bitten 
 
 ^LJxot:^^ """tS"^^ owned itfand she^ld i be" 
 e«to,li f A .*°°°'^"^«^^^ «»«d her. Held, that she was 
 estopped from denying ownership, if she knew thkt the nqulrv 
 was made for the purpose of finding out who was liableZthe 
 
 «88; 20 Ont App. 680. Legislation 
 m«y, of course, otherwise declare 
 Caldwell V. Accident, eta (1894). 84 
 H C. Can. aca See also Bisseira Ex'rs 
 V. Warde (1895X 129 Ma 489. 81 a W 
 R 938; Weeks v. Palmer Bank (1895X 
 44 NeU 084; 63 N. W. R 874; Arm- 
 
 •trong V. Potter (1894), 108 Mich. 409: 
 
 61 N. W. R 657. 
 
 'See the subject discussed in 
 ■on. VIII. 
 
 'Skyring v. Greenwood (1825). 4 
 
 " ' - titt arc i3ns«r v. i^iclon 
 
 <1886). id. 715; 4 L J. Q. R 29; Daniel 
 
 V. Sinclair (1881), 6 App. Gas. 190; 50 
 1* J. P. C. 60; Cave v. Mills (18631. 7 
 
 H. & N. 918; 81 L. J. Ex. 265; Van 
 Hasselt v. Sack (1859X 18 Moa P. C. 
 18^ But see Hume v. Bolland (1888). 
 
 ,So^ f ^*^£' *"** ^«- '• Blenhinsop 
 1893). 1 q. R 48; 61 L. J. Q. R m 
 
 in which it is said that the case had 
 gone to the full extent of the law. 
 
 ifli^°i.^ ^' ®''®PPa'"<* (1888X 50 Miclu 
 ;. . * miw-epresentation might 
 well have affected the nu».fiQ„ «# 
 the disposition of the costs of the 
 action. 
 
:W. 
 
 \ 
 
 140 
 
 CONDITION NO. ft 
 
 A Possible Change of Position.— U is clearly not sufficient 
 that there might have been a change of position, if in reality 
 there was none. For example, if a company upon the faltb 
 of a forged document transfers some shares, and the true owner, 
 although aware of the transaction, does not advertise the com- 
 pany until after the dc laration of dividends which wi?>A<have ' 
 been, but were not, paid to the transferee, there will be no es- 
 toppel.* 
 
 II. On the Faith, kto. 
 
 Change of position will not estop unless it can be attributed 
 to faith in the misrepresentation complained of. It is clear, 
 therefore, that there will be no estoppel if, notwithstanding 
 the existence of misrepresentation, the estoppel-asserter had 
 knowledge of the truth;' or if the misrepresentation were 
 withdrawn before it was acted on ; ' or if it were not believed, 
 but on the contrary investigated and tested.* And the fact 
 that one person changed his position upon the faith of the 
 representation will not enable another to sot up estoppel.* 
 
 Observe this case closely: Safe-makers transferred posses- 
 sion of a safe to a bargainee under a contract of hire and sale, 
 and, at his request, painted his name upon it. The bargainee 
 afterwards sold the safe to a purchaser who relied upon the 
 painted name as evidence of title. He was nevertheless de- 
 feated because he could not show that he was aware that it 
 had been painted there hy the safe-makers: 
 
 if JJ'lfnS*' h*f "j* °i *^® "2™® °" *^® ^'® "^"^ » perfectly innocent acfc in 
 i^L Vwi o''V-°!^«^l^T"'^*1"® °"'y '"'O'" the circumstances of its beinR 
 done by the plaintiffs) if not known to the defendant it was no represen- 
 tation, which is the gist of the defense."* represen 
 
 » Davis V. Bank of England (1824), 
 2 Bing. 393; 5 B. & C. 185. See also 
 Barton v. London, eta Ca (1889), 24 
 Q. R D. 77; 69 L. J. Q. B. 8a 
 
 » Proctor V. Bennis (1887) 86 Ch. 
 D. 740; 57 L. J. Ch. 11; Cooke v. 
 Eshelby (1887), 18 App. Cas, 271; C8 
 L. J. Q. R 505; Re African Gold Co. 
 (1899), 1 Ch. 414; 68 L. J. Ch. 215; 
 Cooper V. Great Falls (1895). 94 Tenn. 
 588; 80 S. W. R 85a As to means 
 
 ^f Irr 
 
 
 1" "• 
 
 < Freeman v. Cooke (1848), 2 Ex. 
 
 654; 18 L. J, Ex. 114; Sanitary v. 
 Cook (1897), 169 III. 184; 48 N. E. R. 
 461. 
 
 * Small V. Attwood (1882), 1 
 Younge, 407; 6 CI. & F. 288; Royal 
 Ins. Co. V. Byers (1885), 9 Ont 120. 
 But there is no obligation to inves- 
 tigate, supra. 
 
 » Heane v. Rogers (1829), 9 R & C. 
 677; 7 L. J. K. R 285. 
 
 • Walker v. Hyman (I877X 1 Ont. 
 App. 345. 
 
OHANaE OP POSITION. 
 
 141 
 
 sntJScient 
 in reality 
 the faltb 
 ne owner, 
 I the oom- 
 nght have 
 be no es- 
 
 .ttributed 
 is clear, 
 istanding 
 jrter had 
 ion were 
 believed, 
 the fact 
 h of the 
 >pel.' 
 
 i posses- 
 and sale, 
 bargainee 
 upon the 
 eless de- 
 9 that it 
 
 ent act in 
 f its being 
 I represen- 
 
 unitary v. 
 8 N. E. R. 
 
 (1B82). 1 
 
 !82; Royal 
 
 Ont 120. 
 
 to i^ves- 
 
 9R& C. 
 
 7X 1 Ont. 
 
 He had not acted upon the raisKjpresentation of the manu- 
 faoturere, for he did not know that they had made it. 
 
 In another class of cases the rule receives confirmation. I 
 buy goods from a man who sometimes sells for himself and 
 sometimes as agent for others. Upon the occasion in question 
 I make no inquiry as to ownership or agency. It turns out 
 that my vendor was an agent merely ; and when the true owner 
 sues for the price the question arises whether I can set off a 
 debt due to me by ray vendor, the agent. I plead that the 
 plaintiff allowed the agent to appear to be the owner, and that 
 be (the plaintiff) is therefore estopped from asserting other- 
 wise. But the sufficient reply is that I did not act upon the 
 faith of any representation of ownership— no one said that 
 the ageiit was the owner, and the facts did not imply it.» 
 
 A common sort of case is that in which a company issues 
 {usually by mistake) a false certificate of shares. Upou the 
 faith of the certificate an innocent transferee purchases the 
 shares. The company is estopped from denying the truthful- 
 ness of its certificate." The point will be appreciated by ob- 
 serving a case in which a share transfer to a bona fide purchaser 
 is forged; the purchaser registers the transfer, obtains a cer- 
 tificate of ownership, and afterwards wifN the help of the cer- 
 tificate resells the shares. Here the company is not estopped 
 as to the first purchaser, for he did not act upon the certificate; 
 in fact it was he who by means of a forged transfer procured 
 the company to issue the certificate; b.tthe company is es- 
 topped as against the second purchaser, for he changed his posi- 
 tion upon the faith of the certificate.* 
 
 u»wS*r!lJ ♦^" ^ seen that in all ctaka where such a question arose the 
 {he iLion I'S w'ffi*'?""" Tvf* "*'*• ™*de dependent on the fact whether 
 Ir»nF?«7if«l ^^ '*!?'■ *''? r^S'stry of the shares was changed was a 
 l«1?« tfr^S' #*'J?*''?^?:'«"«' »*"* °° "'« question whether he parted with 
 
 Jil f^ an Sf.'**' ' °M^* °*T 'f*l»*'y' "°d" circumstanoes Vhich gave 
 rlue to an estoppel on the part of the corporation."* 
 
 Seeming deceptions — Some cases, in which not an individ- 
 ual but a class of persons claims the estoppel, seem to depart 
 from the rule. For example, where one person took shares 
 
 J Cooke V. Eshelby (1887), 13 App. 
 <3a& 871; 56 L. J. Q. R 608. And see 
 the matter discussed in ch. XXVL 
 
 s Re Bfthia (1868), L. B. 8 Q. a 684; 
 9t L. J. Ch. 176. And see cases cited 
 with this one in oh. ZXIL 
 
 'See Thompson on Corporations, 
 §§ 8555-2567; Telegraph Ca v. Daven- 
 port (1878), 97 U. a 869. 
 
 ♦Trimble v. Bank (1897), 71 Ma 
 App. 480; approved in Humb.'eton v. 
 Central (1876), 44 Md. 651. 
 
i! 
 
 142 
 
 OONDITIor NO. Ot 
 
 in a company in order to indaco others to subscribe, upon a. 
 secret agreement that he was to pay for the shares by commis- 
 sions to be allowed him, he was estopped in winding-up pro- 
 ceedings from setting up bis contract as against other share- 
 holders, although it did not appear that any shareholder had. 
 changed his position upon the faith of the action/ 
 
 And so where a judgment creditor conveyed some property 
 to his debtor by a deed which appeared to release the debt, h& 
 was estopped as against subsequent judgment creditors from 
 asserting otherwise, although it did not appear that the deed 
 had a rec*'3d their action.' It was said that 
 
 "it is not an unreasonable presumption that the judarment creditors acted 
 on it" 
 
 The "reputed ownership" clauses of the "Bankruptcy Act,. 
 
 1883 " (Imp.) form another instance of the same kind.* Section 
 
 111 of that statute declares that 
 
 "all goods being at the comtnenoement of the bankruptcy in the posses- 
 sion, order or disposition of the bankrupt, in liis tnide or business, by the- 
 consent and permission of the true owner, under such circumstances that 
 he is the reputed owner thereof," 
 
 shall form part of the estate. The goods may have come into- 
 tha possession, of the bankrupt after every debt had been in- 
 curred, and it may therefore be impossible to say that any 
 creditor had been misled or had acted upon the appearance of 
 ownership; but that consideration is immaterial.* 
 
 Departure in these cases from the rule under consideration 
 can be justified, if at all, only because of the necessity of plac- 
 ing a number of persons in a class, and of examining the rela- 
 tion of that class to the estoppel-denier. Were the relation of 
 each individual creditor to the true owner of goods (in reputed 
 possession cases) to be investigated, very possibly it would be 
 found that some had acted upon the appearance of ownership 
 iu the debtor and some had not. Those who had acted upon 
 it would alone be entitled to set up estoppel; and they would 
 
 1 Re General Provident (1860), L. 1;. 
 Eq. 74; 88 L. J. Ch. 58a 
 
 2 Water's Appeal (1860), 85 Pa St 
 527. 
 
 > See the subject discussed in chap- 
 ter XXL 
 
 4 TTnQn ths othsr hsHi! the tpiss 
 owner may, so far as the statute is 
 ooncernedi subtract his goods from 
 
 the estate (althougu credit may hav» 
 been obtained upon the faith of them), 
 after an act of bankruptcy has been 
 committed, provided he does so be- 
 fore the date of the receiving order. 
 Young v. Hope (1848), 3 Ex. 105; Qra- 
 
 -*«*»;» wt X. xAztT^i \xvt7a/, xrr \^-. a, lot; sa 
 
 L. J. a p. 10; Ex parte Montagu 
 (1876), 1 Ch. D. 654 
 
I 
 
 •e, upon a, 
 y oommis- 
 ig-up pro- 
 ler share- 
 older badv 
 
 property 
 9 debt, b& 
 bors from 
 ) the deed 
 
 litors acted 
 
 ptoy Act,, 
 * Section 
 
 the pomcs- 
 less, bj the- 
 bances that 
 
 some into- 
 i been in- 
 that any 
 arance of 
 
 lideration 
 
 Y of plac- 
 the rela- 
 
 3lation of 
 1 reputed 
 would be 
 wnership^ 
 ted upon 
 By would 
 
 1; may have 
 th of them). 
 
 Y has been 
 loes so be- 
 ring order. 
 c lOS; Gra- 
 
 T% 4nA. An 
 
 £3. loi; so 
 
 I Moutagu 
 
 CHANGE OF POSITION. 
 
 143 
 
 alone, then, obtain the benefit to be derived from a sale of the 
 goods. But that superiority over other creditors they never 
 expected to get. They thought that the goods were the debt- 
 or s; and m case of bankruptcy would be shared in by all 
 creditors alike. If then the goods are to be taken awav from 
 the true owner because he is estopped as against some creditors, 
 fairness seems to require that they should be shared in by all 
 the creditors ; and this may be no detriment to the true owner - 
 the only other person interested. 
 
 There are many cases in which a creditor having actually 
 been deceived by the appearance of ownership, estoppel as 
 against the true owner has been declared. To them there can 
 bo na objection; but there are some in which the presence of 
 that factor has not been thought to be essential and the statute 
 makes no such requirement. 
 
 The law upon the subject is in much confusion owing prinoi^ 
 pally to the cross-currents of legislation and estoppel. Safe 
 ground for ccmn^encement may be found (as so often happens) 
 in an early decision.^ A bankrupt bought his estate from his 
 assignees, but did not get his discharge; he continued to trade 
 for four years when he again failed; heU, that the creditors 
 under the second bankruptcy were to be preferred to those 
 under the first. Lord Camden said 
 
 Ks^tb/andl^tJi^^^^^^^^^ 
 
 In other words, the first creditors were estopped to "et up 
 their title to goodd which they might have seized (being covered 
 by the first assignment) as against subsequent creditors who 
 had dealt with the debtor upon the faith of his ownership of 
 the goods; the subsequent creditors had changed their position 
 upon the faith of that appearance; and those who might have 
 prevented the misleading appearance were estopped. 
 
 For estoppel of this kind it is sometimes said that it is neces- 
 sary that the first creditors should know that the debtor waS 
 deceiving other persons.' But that holding is not in harmony 
 
 • Trougton v. Qltley (1766). AmU 45 L J. Bk. 96; Re Clark (1894). 2 O. 
 »Ex parte Ford(1876UCh.D. 521; r(S«?Si,'^^lL^,^^^ 
 
144 
 
 CONDITION NO. ft 
 
 with the principles of estoppel as applied in other departments 
 of the law.' According to these it would be ^uite sufficient 
 that the debtor should have been permitted to occupy such a 
 position as enabled him to obtain credit upon the faith of his 
 appearance of ownership. It is quite clear that if an owner of 
 property permit some other person to appear to be the owner, 
 he will be estopped from asserting his title as against a pur- 
 chaser who has changed his position upon the faith of such ap- 
 pearance.' And it vould be no answer to say that the true 
 owner was not awart that a fraud was being committed. 
 
 For example, if the debtor (in the case above under consid- 
 eration), instead of incurring new debts, had sold the goods, 
 the purchaser would be secure and the old creditors would be 
 estopped. It would not be suggested that the case would be 
 diflFerent if they did not know of the sale.' They are estopped 
 because of the ostensible ownership — of the opportunity to de- 
 fraud which they have supplied. 
 
 Perhaps the true line is to be drawn, not between cases in 
 which the first creditors knew that fresh debts were being in- 
 •curred, and those in which they were ignorant of that fact ; 
 but that the point for observation is whether or not they were 
 aware that the debtor had acquired property which they might 
 take, and upon the ostensible ownership of which he might ob- 
 tain credit. 
 
 TJie Actuating Motive. — It is frequently a nice question 
 whether the action was or was not taken " on the faith of 
 the misrepresentation." For questions of fact it is impossible 
 to lay down exhaustive rules; but a few points may advan- 
 tageously be noted. It was held in Redgrave v. Ilurd^ that 
 
 "If it is a material representation calculated to induce him to enter 
 into the contract, it is an inference of law that he was induced by the 
 representation to enter into it" 
 
 But the later authorities hold that tJie inference is one of 
 fact, and not of law.* 
 
 Mass. 18; Breeze ▼. Brooks (1886), 71 
 Cal. 169; 9 Pac. R 670; 11 id. 885. 
 But see Pierce v. Horner (1895), 148 
 Ind. 626; 43 N. R R 228; MoAdow v. 
 Hassard (1897), 58 Kan. 171; 48 Pac. 
 1184& 
 
 ^Ante, ph 90 et seq. 
 
 «8eech8.XXI,XXIL 
 
 •Re Morgan v. Knight (1864), 15 C. 
 
 R N. a 669; 88 L. J. C. P. 168; Cohen 
 V. Mitchell (1890), 85 Q. R D. 362; 59 
 L, J. Q. R 409; Re Clark (1894), 2 Q. 
 B. 409; 03 L. J. Q. R 806. 
 
 «(1881) 20 Ch. D. 21; 61 L, J. CIi. 
 11& 
 
 » Smith V. Chadwick (1884), 9 App. 
 Cas. 196; 68 L. J. Ch. 878; Smith v. 
 Land & House Corp. (1884). 28 Ch. D. 
 
CHANGE OF POSITION. 
 
 partments 
 suffioient 
 py such a 
 litb of his 
 owner of 
 be owner, 
 tst a pur- 
 f Buob ap- 
 ; the true 
 ted. 
 
 er consid- 
 le goods, 
 would be 
 would be 
 estopped 
 tity to de- 
 
 ] cases in 
 being in- 
 bat fact; 
 hev were 
 ey might 
 night ob- 
 
 question 
 faith of 
 apossible 
 y advan- 
 {* that 
 
 a to enter 
 3ed by the 
 
 is one of 
 
 168; Cohen 
 D, 262; 59 
 (1894), 2 Q. 
 
 il L J. Ch. 
 
 84), 9 App. 
 ; Smith v. 
 ),28Ch.D. 
 
 143 
 
 whethef hadZ-'. ?.T' '' exceedingly difficult to ascertain 
 
 . Whether, had the truth been known, the action of the person 
 
 <lece,ved would have been altered. In such cases this aUeast 
 
 may be said : that the position of the estoppel-asserter ™ 
 
 ' rlZZ' "^T'''' ^'° ^^^^"' ''''' ^^ was deprived of h 
 r.ght of consideration. This itself, in a doubtful instance 
 may be thought to be a sufficient change of posLn WthTn 
 the rule. In one case Turner, L. J., said • ' 
 
 t-ieSnZ\ZZ\?onl^^^^^^^ «"?dof the change of 
 
 whether they would or wm.M «-?* T^ ® P'aintiffs would have pursued— 
 have done ^; Tut it fl eal^^'ctart^X^^^^^^^ '''? P°"> TlVey might 
 whether they would or ATuirnot"hnff^^J"'*^l*'."u°*' *?"* ^« <^annot say 
 cation Should have been Tadefn wdeJ^hf /?h"'*'" •*'L"** '"^^ ^^'"""""'^ 
 option upon the subject." "'** ^^^^ ™'8'»* exercise their 
 
 wi[?.Th/^'''f "■^'''"*"'"'^^"S; point arises in connection 
 
 iT^UrT ^T'- ^"PP"'^ " misrepresentation to be fol- 
 o V ed by a change of position ; must the estoppel-asserter prove 
 that It was the misrepresentation which induced the change o? 
 position ? or must that be assumed until the contrarv s sho^n 
 Probably much depends upon the facts of each iase but a 
 
 fnWof' y " ""r ™^^ ^^' ^" ^^- consideration, in 
 infant of extravagant habits arranged with an intimate friend 
 to borrow £53,000 He gave to this friend several acceptaTces 
 
 forvarioussums,which,unknowntotheinfant,weredisclr^^^^^^ 
 by the friend and two associates. As the infant's majority ar^ 
 preached, the three persons (still holders of the bills) becam^ 
 anxious; the friend represented to the infant that he biUs 
 were in many hands; that they would be presented at his bank! 
 <.r s, where there was no money; that it would be adville to 
 get some one to buy them up, upon a promise of security after 
 majority and that this somebody should be another of the 
 
 Lt^l H ' ^f "' '^"^'' ^"' "^« ^"^--«d of the attempt ^ 
 said to be made to get in the bills. The day after he came of 
 
 age he gave security for the amount, believing that the biUs 
 
 bad in fact been bought up. In his action to set fside fie secu" 
 
 ties It was contended that the misrepresentations were immat^ 
 
 rial; and that had the infant known that the bills wereZayt 
 
 16; Hughes v. Twisden (Ism. 84 
 W. R.600; 65 L. J. Ch. 481. " '" 
 » Traill v. Baring (1884), 4 De G.. 
 
 J. & a 880; 83 L. J. Ch. 
 10 
 
 521. 
 
 ,,„.„,, ^i irt-av. u2S; V u. ju G 75J. 
 And see Bailey v. Sevmour (1894V. 4'> 
 S.C.8?8; J}0&E.R.6a ' 
 
146 
 
 CONDITION NO. 8. 
 
 held, rather than recently bought up, he would have given the- , 
 security all the same. The Master of the Eolls agreed that "it 
 is highly probable " that the infant would have done so. But it 
 was held in the House of Lords (per Lord Cranworth) that 
 
 "the issue is not whether tiie plaintiflf has shown that he would not hav» , 
 executed the securities but for the representation of Smith; but whether 
 Smith has satiafle i us, or can satisfy us, that the plaintiCF would have ex>^ 
 eouted them without The onus probandi is on Smith in this case." 
 
 " But the question is, would he have given the securities if the whole 
 truth had been told to him? I think even tliis young man, when called 
 .upon to execute the bond, would have started if he had known all that was 
 
 f;oing on. But at the same time it is quite unimportant It does not lie 
 n the mouth of these persons to say what he would have done if they had< 
 not concocted the fraud, and if there had never been any deception at all 
 practiced." 
 
 Per Lord Chelmsford : 
 
 "How is it possible to say in what manner the disclosure would have 
 operated upon Kay's mind, that he had been the dupe of a scheme of de- 
 ception, which up to that moment had been successful in inducing him to^ 
 believe that Adams had befriended him in taking up the bills, and that 
 Smith had kindly co-operated with him." 
 
 Several Reasonn for Changing Position. — Although the es- 
 
 toppel'denier in changing his position may have relied not 
 
 only upon the misstatement complained of, but also upon som& 
 
 mistake of his own, 
 
 " his loss none the less resulted from that misstatement It is not neces- 
 sarj' to show that the misstatement was the sole cause of his acting as he- 
 did." i 
 
 In another place it is said that: 
 
 "If, however, the plaintiff mainly and substantially relied upon the- 
 fraudulent representation, he will have his action for damages, though he- 
 was in part influenced by other cause&"> 
 
 III. " Pbejudicially." 
 
 The change of position, to effectuate estoppel, must have- 
 been prejudicial to the estoppel-asserter. If he really bene- 
 fited by the change or was in no way hurt by it, he has noth- 
 ing to complain of. This is plain enough, but is not always 
 remembered. For example, it seems to be reasonably clear, 
 as above noted, that a company will not be estopped by an 
 erroneous certificate of shares unless some person has, upon the 
 faith of it, come to some damage. But in the last English case 
 upon the subject' the point is overlooked. In it the certificate 
 
 1 Edginjgton v. Fitzmaurice (1885), 
 29 Ch. D. 481; 55 L. J. Ch. 650. 
 
 'McAlser v. Horse v (1871), -35 Md. 
 48a And see Thomas v. Orise (1808), 
 41 AtL R. 883 (DeU 
 
 •Parbury's Case (1896), 1 Ch. 100; 
 65 L. J. Ch. 104. See an opposite con- 
 clusion In Hatnbleton v* Central 
 (1876), 44 Md. 551. and in Wright'» 
 Appeal (1882), 90 Pa. St 435. 
 
CHANGE OF POSmoX. 
 
 147 
 
 ir^ to a purchaser of the shares after the purchase-money 
 for them had been paid. It may be said that, upon the faith 
 of the cert.hcate, the purchaser accepted the shares; but there 
 was nothing to show that that was «a change for the worse." 
 That he was « lulled into security," and so lost some chance of 
 Irguld'^ """""^^ ^''"^ ^^^ fraudulent grantor, was not 
 
 Ihmaff,, Heal or Assumed:- Diflference of opinion exists as 
 to the necessity for proof of actual damage in cases of estoppel 
 by "lulling to rest." It would, in many cases, be absolutely 
 impossible to prove that, had the estoppel-asserter been active 
 he woud eventually have been any better off than if he had 
 done nothing, although the result might have actually been so. 
 The question is, again, one of speculation rather than of fact. 
 A bank-depositor^ name is forged to a check; the bank pays 
 the money; the depositor becomes aware of the forgery but 
 
 tZl^r.'-""" 'f '^"P^" ^^^"^^ notifying the bank; and 
 
 meanwhile, it is said, a chance of some civil Remedy or an op. 
 
 portunity to arrest the forger is lost. Is the depositor estopped ? 
 
 In one case' It was said: kp««« 
 
 JLT f ^' ^"^"^ '' ^'^^ ^""" ^'^^ '^^^ it i« °ot sufficient 
 endence of damage to prove that the f.,,.r was within the 
 
 Cl Tu"^ had exigible property th. r., at the time when 
 
 notice should have been given to the bank, without proof of 
 
 how long the payee and the property remained within reach." ^ 
 
 A« tT^h f ''"' ^^"'^ ^''' ^"*™" ^^^"^ t^o extremes. 
 As to the formei- case, Brett, L. J., would say • • 
 
 but also that tkey hSXiZi.ZaXlXA'':Z"t^'' """' *" '^"*- 
 The mere postponement of the civil remedy by delay in dis- 
 closure does not necessarily and of itself constiiute a change 
 
 V. tt 003, 40 L. B. Q. B. 51. And see (1879X 5 Q. R D. 811- 49 I. T o r 
 
 2 Indiana, eta v. First Nat Bank 
 (1894), 9 Ind. App. 185; 88 N. E. R. 884 
 
 
148 
 
 CONDITION NO. 0. 
 
 of position.* The contrary indeed was held in a court of first 
 
 instance,' nrhere the chief justice said: 
 
 * 'J^'^y n^'ght have sued for money had and received before the maturity 
 or the note, and this earlier right of action mlRht have been Rreatly to 
 their benefit The defendants who, by their oonduot, deprived the plaint- 
 iffs of the opportunity of resortinj? to that remedy, are not to be permitted 
 to require the plaintiffs to prove that resort to that remedy would have 
 oeen productive of gain or advantage to them." 
 
 And in the court of appeal the chief justice, in a dissenting 
 judgment, approved this language; » but by the majority of the 
 judges it was thought to be 
 "a suggestion too speculative to be the foundation of a legal right"* 
 
 The case of London, etc. v. Bank of Liverpool^ is not quite 
 consistent with the broadest statement of the law. There a 
 bill was paid although the indorsements were forgeries, and the 
 action, which was for repayment, failed, Mathew, J., saying: 
 
 "It may be that no legal right may be compromised by reRson of the 
 payment For inatance. the acceptor may pay the bill and discover, on the 
 same day, that the bill is a forgery, and so inform the holder of it so that 
 the holder would have time to give notice of dishonor to the other parties 
 to the bill; but 9ven in such a case it is manifest that the position of a 
 man in business may be most seriously compromised even by the delay of 
 
 A distinction, no doubt, must be made in cases relating to 
 "negotiable" instruments upon the ground that the lapse of a 
 day may mean the expiry of the period within which to give 
 notice of dishonor;* but is there distinction upon any other 
 ground t Must there not always be damage in order that there 
 may be estoppel?' 
 
 Although in many jurisdictions it is illegal to compound a 
 
 criminal charge, yet it must be admitted that, aside from that 
 
 point, 
 
 "the arrest and detention of a swindler are powerful means in coerolnir 
 restoration of property he has unlawfully obtaineu, and the loss of these 
 
 ' Merchants' Bank v. Lucas (1881), 
 13 Ont 52U; 15 Ont App. 678; 18 S. 
 C Can. 70i 
 
 >18 0nt589L 
 
 »15 0nt App.676L 
 
 < Id. 687. 
 
 •(1896) 1 Q. a 11; 65 L. J. Q. R 84 
 See also Smith t. Mercer (1815), 1 
 Taunt 76; Cocks v. Masterman (1889), 
 9 a & G 905; Clark v. Eckroyd 
 (1886), 13 Ont Appi 429; Bank of 
 Uuitsu States t. Bank of Georgia 
 (1825X 28 U. a 88a 
 
 «See Wilkinson ▼. Johnson (1824), 
 
 8 a & a 428; Mather v. Maidstone 
 (1856), 18 C. a 273; 25 I* J. G P. 810; 
 London v. Bank of Liverpool (1896), 
 1 Q> a 7; 65 L. J. Q. a 80; Ryan v. 
 Bank of Montreal (1887), 14 Ont App. 
 660; Irving Bank t. Wetherald 
 (1861), 84 Bark 823; (1887) 86 N. Y. 
 835; Merchants' Bank ▼. National 
 Bank (1869). 101 Masa 281. 
 
 'Salem y. Gloucester (1820X 17 
 Mass. 1; Corser y. Paul (1880), 41 N. 
 H. 24; Bank y. Wentzei (1893), 161 
 Pa. St 142; 24 Atl. R 1087; Euriger 
 y. Joest (1899), 52 N. E R 764(Ind.X 
 
CHANGE OF PCWITIOH, 
 
 Ud 
 
 SS'Sp S^:^LSi:i.-S:^^^ another e. 
 
 And 80 It is thought that the escape of the swindler is a suf- 
 ficent change of position.* But the following is worthy of 
 consideration: ® "^ 
 
 proper foundations laid "fo"r{hlKhe"rTsSoS.'??°^^''"*"' ^'^^^ '' * 
 In general it may be said that there must have been some 
 Change of position; and perhaps it can be said that that requi- 
 site will be satisfied if the estoppel-asserter has "lost afair 
 chance to retrieve his position."* 
 
 IV. PUROHASEB FOB ValuB ^ITHOUT NoTIOB, AND FaLsAvEBT. 
 
 The phrase "purchaser for value without notice" has been 
 used in two connections. In one of these it may be said to 
 have described an eflFective legal situation; and in the other 
 to describe a person merely who may or may not be entitled 
 to succeed in his litigation. We must shortly distinguish cLoso 
 and get rid of the former, in order that we may deal clearly 
 with the latter. Observe then the difference between — 
 
 1. The defense of purchaser for value without notice, when 
 pleaded to a bill appealing to the old auxiliary jurisdiction of 
 the court of chancery; and 
 
 2. The position of purchase for value without notice, when 
 It arises m a suit in which relief (not discovery merely) is 
 
 The now useless subtleties which belonged to the former 
 class of cases have, in most jurisdictions, been sent to limbo by 
 the provisions of judicature and other acts; and it seems to the 
 present writer that the learning as to the latter class ouc^ht to 
 be merged m, for it forms part of, the law of estoppel, ft may 
 
 lJ„?";ii?,?*ti S^J" '• ^'***°°*^ ^"* ^' ^"* Nat Bank (1891). 6 
 Bank (1872). 50 N. Y. 576; Bank v. Ohio a C. 180; GrabiU v. Bearden 
 
 fTM ^'^^' ''^'' '""• (^«»''>' «2 Ma App. 469. ° 
 
 ,„/•'''■*' N*'- ^nk V. Merchants 3 white v. Contin«ntiil Vot Ba"i' 
 
 iSi'^'^® ?""• *^*' ^^ ^- ^- '^"P^ (»8''8)' 8* N- Y. 82a "" 
 
 1070; Harlem v. Mercantile (1895), iAnte, p. ISi 
 81 N. Y. Supp. 790. But see Van 
 
150 
 
 CONDITION NO. 9. 
 
 *:M 
 
 survive for a time because of its association with the legal es- 
 tate; but that is an unhealthy conjunction, from which longev- 
 ity, luckily, cannot be expected.* 
 
 Auxiliary Jurisdiction. — A defendant at law often found it 
 necessary, for the proper conduct of his case, to obtain discov- 
 ery from the plaintifiP. As (in the earlier days) the practice at 
 law made no provision for such discovery, the defendant was 
 driven to the court of chancery, where he filed his bill in aid of 
 his defense at law. To such a bill the plea of purchaser for value 
 without notice was, of itself, a sufficient defense. The court 
 held that it would do nothing that might ahect the prospects 
 in another forum of a man who was a purchaser for value with- 
 out notice.' The court made no investigation into the merits 
 of the case or the rights of the parties. It was not called upon, 
 and in fact held that it had no jurisdiction, to do so. It found 
 its defendant in a compldte legal situation and it merely left 
 him there. 
 
 The union of the courts has abolished this auxiliary jurisdic- 
 tion of the chancery, and has thus ended the necessity for con- 
 sidering purchaser for value without notice ^rom that point of 
 view. 
 
 Concurrent Jurisdiction. — It will readily be seen that the 
 courtof chancery could not maintain the attitude just referred 
 to when it was asked not to assist in the conduct of a suit in 
 another forum, but itself to decide the dispute, and for that pur- 
 pose to adjudicate upon the rights of the litigants. 
 
 For example, two mortgagees are claiming priority over one 
 another. No. 1 brings ejectment at law against No. 2; and 
 No. 2, in aid of his defense, files a bill against No. 1 for discov- 
 ery. The bill will be dismissed if the defendant in it (No. 1) 
 be a purchaser for value without notice. Nothing is decided 
 
 1 See oh. XVIII. 
 
 > There was some doubt as to 
 whether the plea was effectual if the 
 plaintiff bad the legal estate and the 
 defendant only the equitable. In 
 the fourteenth edition of Sugden's 
 Vendors and Purchasers (vol II, 684 
 et seq.) will be found a strong argu- 
 ment in favor of the proposition that 
 equity " regards not the quality of 
 the estate, but the character of the 
 
 person," by which is of course meant 
 his merits. See also per Lord Cran- 
 worth, in Colyer ▼. Finch (1858), 6 
 H. L. C. 920; 36 L. J. Cb. 6& If the 
 plaintiff had not the legal title it 
 seems to have been immaterial 
 whether or not the defendant had it 
 Bowen ▼, Evaqh (!844), IJ. & I. 968. 
 264; Hunter v. Walters (1870), L. B. 
 11 Eq. 814; 41 Ia J. Cb. 17S. 
 
CITANGB OF POSITION. 
 
 151 
 
 •except that equity will not help No 2'8 defense in the eject- 
 raent suit. But if No. 2's bill had sought relief, and not merely 
 discovery— had asserted priority and prayed for foreclosure, for 
 ■example,— the court would have had to pass upon the merits of 
 -the case; and it would not have been prevented from so doing 
 by proof that the defendant was a purchaser for value with- 
 out notice. The fact would not be ignored. It would be taken 
 into account and given its proper effect in considering the 
 right of priority. It did not of itself oust jurisdiction.^ 
 
 In other words, it was not and is not a complete legal situ- 
 ation (M when discovery merely was sought), but half of one 
 only. For example, a second purchaser cannot r to the first • 
 'I purchased without notice of your conveyance, and there- 
 fore I am entitled to priority over you" — that is but one-half 
 ^f a legal situation, and may be called the subjective half as 
 ■describing the mental attitude of the claimant. To Kucceed he 
 must also say that his opponent was in some way to blame for 
 his^ having been misled, which is the other, or objective, half 
 •of his position. 
 
 A very common case is one in which a first mortgagee has 
 intrusted the title-deeds to the mortgagor; and the mortgagor 
 has fraudulently deposited them with some innocent third per- 
 «on as security for a loan. In such case the depositee's posi- 
 tion IS, (1) subjectively, I had no notice of your claim; and 
 (2) objectively, you were to blame for that. ' 
 
 Another class of instances is that in which the owner of prop- 
 ■erty stands by while u third person sells it to an innocent pur- 
 chaser; and the latter says (1) I kad no notice of your title, 
 ^nd (2) the fault was yours. 
 
 I^stoppel—Bnt we are already clearly within the lines of es- 
 toppel. The latter case is always so recognized, and the former 
 18 an mstance of estoppel by assisted misrepresentation;' for 
 
 > Some of the cases are: Williams 
 V. Lambe (1791), 8 Bra C. a 264; 
 'Collins V. Archer (1830)» 1 R. & M. 
 884; Phillips v. Phillips (1861) 4 De G., 
 F. & J. 208; 84 I* J. Ch. 806; Stack- 
 Ihousev. Countess of Jersey (1881), 1 
 J. a; U. 721; 80 L. J. Ch. 481; Colyer 
 T. Finch (1884). 19 Beav. 800; 5 H. L. 
 C 905; 88 L J. Ch. 68; Newton v. New- 
 
 ton, I* R. 4 Ch. 144; 88 L. J. Ch. 145; 
 Frazer v. Jones (1848X 17 L J. Ch. 
 858; Heath v. Crealock (1878), L. jft. 
 10 Ch. 22; 44 L. J. Ch. 157; Ind v. 
 Emmerson (1887), 88 Ch. D. 828; 12 
 Apu Cas. 800: 56 Lb J. Ch. 98Q; C^?s 
 V. Cave (1880), 15 Ch. D. 689; 49 1L3. 
 Ch. 50S. 
 *Seeoh.ni. 
 
152 
 
 CONDITION NO. a 
 
 when the mortgagee handed over the deeds to his mortgagor 
 he did that which made credible the representation of the m©rt> 
 gagor (that he, the mortgagor, was the unincumbered owner 
 of the property), and he (the mortgagee) is estopped by the as- 
 sistance thus rendered to that misrepresentation. 
 
 Observe the association of purchaser for value without notice 
 with estoppel: There are two factors necessary to an estoppel 
 by misrepresentation: (1) The estoppel-asserter must (subject- 
 ively) be one who has changed his position upon the faith of 
 something, and (2) (objectively) that something must be the- 
 misrepresentation or assistance to misrepresentation of another 
 person. And this is but a more comprehensive, and therefore 
 better, way of saying (1) that the estoppel-asserter must (sub- 
 jectively) be a purchaser for value without notice; and (2) that 
 (objectively) the estoppel-denier must be responsible for the 
 mishap. A word as to eaph of these two points. 
 
 The first is probably clear enough. A "purchaser" in its- 
 wider sense includes, of course, a mortgagee, a lessee, and so on. 
 But we must still extend its signification and make it embrace- 
 "one who changes his position," even if the change be nothing- 
 but a forbearance to act. For, as we have abundantly seen, & 
 man may be estopped if under certain circumstances he has- 
 been " lulled into security " — into inactivity— by the estoppel- 
 asserter.'- 
 
 The second point will become obvious when it is noticed that 
 purchaser for value without notice never arises except in cases, 
 in which the purchaser says that he has been misled by some- 
 body's misrepresentation. His case always is, " I bought from 
 a man who pretended to be the owner;" "the person with 
 whom I dealt appeared to be entitled to bargain with me," etc. 
 In other words, misrepresentation is always the prime factor 
 in the " purchaser's " position. 
 
 And so it is in estoppel. 
 
 Note next that the misrepresentation complained of in sucb 
 cases is not that of the estoppel-denier, but of some third person. 
 For example, in the mortgage case (in which the mortgagee- 
 loaned thp deeds to the mortgagor, who fraudulently deposited 
 them with a banker) the misrepresentation is that of the mort- 
 gagor, and the banker wins because (in the older phraseology) 
 
 ^Ante, p. 18a 
 
OHANOE OF POSITION. 
 
 153 
 
 (1) he was a purchaser for value without notice, and (2) the 
 
 m hfh^ T' ^]\"'^^'' °^' (^'^ '^^ ^^°g"^g« «f estoppel) 
 (1) he had changed his position upon the faith of the misrep- 
 resentation of the mortgagor, and (2) the mortgagee had as- 
 sisted the misrepresentation -had done that which had made 
 lb credible. 
 
 Legal EaUOe.^ Purchaser for value without notice is, accord- 
 ing to the present state of the law, one-half of another legal 
 
 seen) I bought the property relying upon a misrepresentation 
 of ownership, for which the first purchaser was responsible • » 
 
 I ^.Tl "^^ "^ ^^^^^^^ ^' "P^"^ a misrepresentation for 
 which the firat purchaser was not responsible; nevertheless I 
 
 enHHr V^^ ^^^^ '''^'^'^ ^"^ ^ ««^ ^^' '^^' reason 
 
 entitiea to pnority." 
 
 This subject is fully dealt with in another chapter ;» and alt 
 that need be here said is to point out that again "purchaser for 
 value without notice" is but one-half of the legal situation 
 which IS alleged;' and that pending the disappearance of that 
 situation (as indicated in the chapter referred to), purchaser 
 for value without notice must continue to be a legal factor 
 and one not to be superseded by the larger phrase, "one wha 
 changes his position upon the faith of a misrepresentation." 
 
 .__ SUMMABT. 
 
 We now see: 
 
 (1) That purchaser for value without notice is not of itself a 
 lega situation, and never was, except when pleaded to the 
 auxiliary jurisdiction of the court of chancery. It is one-half 
 merely of a legal situation. 
 
 »Ch.xVlii. 
 
 » It Is again the subjective half, re- 
 quiring for its complement the pos- 
 session of the legal estate. Or, to 
 put it the other way, " Being pur- 
 chasers for value without notice, 
 they cannot succeed unless they can 
 make out that, having an inferior 
 equity, they have clothed it with 
 iegfti estate" (The man is no use 
 without the clothes; nor are the 
 clothes without the man. Each is 
 
 one-half of the situation): Per Kay, 
 L. J., in Powell v. London (i898), l! 
 R 2 Ch. 564; 62 L. J. Ch. 795. See also 
 Phillips V. Phillips (1861), 4 DeO., F 
 & J. 208; 84 L. J. Ch. 896; Cave v. 
 Cave (1880)^ 15 Ch. D. 639; 49 L. J. Ch. 
 603; Harpham v. Chacklock (1881), 
 19 Ch. D. 207; Roots v. Williamson 
 (1888), 88 Ch i> 485: 5? r j. nu^ oq*-- 
 Forse v. Scrtieign (1887), U OnL 
 App. 482; Utterson v. Rennie (1892), 
 81 a G Can. 2ia 
 
154 
 
 CXJNDITION NO. 9. 
 
 1 
 
 (2) It was only effective when conjoined with (a) legal estate, 
 •or (6) misrepresentation. 
 
 (3) The doctrine of legal estate, owing its existence to the 
 former defective administration of justice in England,* mast, 
 ■needs wither and die now that the defects are gone. Purchaser 
 for value may be allowed to live meanwhile. 
 
 (4) But no longer; for the alliance between the purchaser for 
 -value and raisrepresei ation has been superseded by estoppel ; 
 and his identity has been lost in the larger phrase, "one who 
 •changes his position prejudicially upon the faith of the mis- 
 representation" — that is, as suggested in the preface, a fals&vert. 
 
 »Seech.XVm 
 
 s 
 
 t 
 h 
 
CHAPTER XIL 
 
 CONDITION NO. 10. 
 
 The EstoppeUenier Must Have Heasonalle Ground for Antici- 
 pating Some Change of Position Upon the Faith of the 
 -Representation. '' 
 
 DiSTINOTIOX. 
 
 The previous chapters have mmie familiar the propositions that 
 estoppel may occur (1) because of some personal misrepresenta- 
 tion, or (2) because of some assistance rendered to the misrep- 
 resentation of another person; and we have now to inquire as 
 to the character of the relation which must exist between the 
 change of position of the estoppel-asserter on the one hand, and 
 the misrepresentation or the assistance of the estoppeWenier 
 on the other. 
 
 Manifestly such relation will have one of two aspects: First 
 It may be regarded from the standpoint of the estoppel-denier! 
 and for him the rule will be that he must have had reasonable 
 ground for anticipating some change of position upon the faith 
 of the misrepresentation. And secondly, it may be regarded 
 from the standpoint of the estoppel-asserter, for whom the rule 
 win be that the change of position must be reasonably conse- 
 quent upon the misrepresentation or assistance 
 
 Confining ourselves in this chapter to the first of these aspects, 
 observe that there are two sorts of cases which may arise • 
 
 1. Inquiries may be made of the estoppel-denier, but the pur- 
 pose of them not being known to him he may make a careless 
 and inaccurate reply _ he had no reason to anticipate action of 
 any kind. The case is one of personal misrepresentation.' 
 
 2. The estoppel-denier observes action or preparation for 
 action; but he is unaware that certain facts known to him are 
 unknown to the actor, and he is silent and thus misleading- 
 ne uaa no reason for assuming that the action was because of 
 faith m his passivity. The case belongs to the class of estoppel 
 oy passive assistance. 
 
156 
 
 OONDITIOir NO. 10. 
 
 In the first of these cases the estoppel-denier is aware that he 
 has made a misrepresentation, but he has no reason for thinking^ 
 that it is to be followed by action. In the second he is aware 
 of intended action, and by his silence he has misled the aotor,.v 
 but he has no reason for believing that the action is being taken 
 upon the faith of his silence. 
 
 1. Personal Misrepresentation. 
 
 Suppose that a stranger asks me as to the ownership of a. 
 horse that I am riding, and I tell him that it belongs to my 
 brother. Afterwards the stranger, who turns out to be a bailiflF^ 
 seizes the horse under an execution against ray brother, and 
 claims that I am estopped from denying the truth of my asser- 
 tion. I am not estopped.^ I had no ground for anticipating 
 any change of position. Had I known that the stranger had 
 a purpose in making his inquiry, my answer might have been 
 diflferent. 
 
 "Certainly no one can be estopped by a deceptive answer to a qaestioi^ 
 winch he may rightly deem impertinent and propounded by a meddling 
 
 And SO it was held' that 
 
 "a bank which received a letter from another bank asking in regard ta 
 the character and financial standing of a certain «>erson, without any inti- 
 mation at, to the making of a loan, is not estopped as against a loan subse- 
 quently made by the inquiring bank to claim a chatteLmortgaRe lien on 
 the man's property." 
 
 It will be seen that the inquiring bank's object might as well 
 Lave been with a view to collecting a debt ad of making a loan. 
 The answering bank had no reason for anticipating a change 
 of position. 
 
 For a similar reason, if the maker of a note is asked if it is- 
 ail right and he says it is, he will not necessarily be estopped 
 from denying liability. It may be that the inquirer, after the 
 conversation and ujjon the faith of, bought the note; but for 
 
 J Allum V. Perry (1878). 68 Me. 233; 
 Tillotson V. Mitchell (1884), 111 III. 
 618; Fountain v. Whelpley (1885), 77 
 Me. ISa 
 
 a Per Metoalf, J., in Pierce v. An- 
 drews (I860), 60 Mass. 6. And see 
 New Brunswick v. Convbeare a862i 
 9 H. L. C. 736; 81 L. J. Ch. 297; Florida 
 V. Hope (1898), 18 Tex. Civ. App. 161; 
 
 44 a W. R. 10; Nicols v. Peck (1898), 
 70 Conn. 489; 39 AtL R. 803; Shields 
 V. McClure (1898), 75 Ma Aopi 681. 
 
 * First Nat Bank v. Marshall (1895),. 
 108 Mich, 114; 63 N. W. R 604. Com- 
 pare Swift V. Winterbotham (1«''8),. 
 Ll R 8 Q, R. 344? 49 IV .r o. n l!Qt 
 IaR9(^B.U01;48L.J. qTe 66, in 
 which usage had some effect. 
 
ANTICIPATION OF CHANGE OF POSITION. [ 167 
 
 . This doctrine may easily be carried to excess. For example 
 the statement that «Auiupie, 
 
 frrl^nJSlgK^JelJS?^^ estop the alleged principal 
 
 representations were made und«r ^U o?"*™*'^ '" '"» ''^^^^l'- ""'ess the 
 should have expect-d tffi th^v wn.^M L*'''V"!?^**"««8 ^^''^ the principal 
 injury of an innocent parJy."» "P°° '" ^^^"^ ^**"'' *» ">« 
 
 can be agreed to only if qualified by saying that most usually 
 
 th J h"""'-?,',^ ' T """'^''' ^^ ^'' ^^^"' ^« ^^Sht to assume 
 hat he will be taken seriously, and as intending%o produce a 
 n.al injpression which may be acted upon by the person to 
 whom the representation is made. And co where a person who 
 was about to purchase some property wrote to another asking 
 the amount of his claim against it and was told $50, the court 
 
 ter"5a"i SS a 'Zf gSsy'a^^fnSSSf '"^^^^^^ "t«'*."* *'"«* *he let 
 near-bycitywritiniralPttpr »V^J^? ^'-^ Here was a business firm in a 
 
 ness mattS. ?s th! coSrffolSiSmeThal b^ ^ b"«'^ 
 
 ness men receive, such inauiSTlettpJL «. 2^ I'f ° "^l'^' o"* ^^at busi- 
 without a desire to use or A ~»^«„ti *" ? matter of mere curiosity 
 of the respo^seL a Sis forS^ ?n\.!'P^**"°° *''** "«« ^>» ^ made 
 not requirVd to rJapoKd resJiJnd." "* "*"'"^ ^•^"'*°'' ^^'^^ 
 
 Or^nT'^'r/'''"' '" u^ ^' ^^^''^ *"P^-5^ ^""'^^y ^^^ d^<^i^ra Of Lord 
 
 M Zl /"^" ""^^'^ ''^^ '^"^'''^^ ^'^ »»«»d is modeled): 
 BhouldKw Vha?it*;SS*fX^ *no fraud^«J^ T'^'^'l '»>« '^Presentation 
 time. But if theUrty ha?u^wS?inrfvm?«i!2 ^a^ejieen intended at the 
 he has misled anffi? wfdSJlS ^*7n,?™if ** another, you must add that 
 ground for supposing that the M2ouwhZ*h«°^^ that he had reasonable 
 upon what he was afying." » ^ °™ ^^ ''*' misleading was to act 
 
 This is but put in another form when Baron Parke said: 
 
 » Andrews v. Lyons (1865X H Allen 
 (Masa), 849; EhrJer v. Braun (1887) 
 33 111. App. 891; 130 111. 608; 13 N.' 
 E. R 996; Smith v. Roach (1894), 59 
 Ma App. 116. It would be otherwise 
 If the maker knew that the inquirer 
 contemplated purchasing: Freeuv v. 
 Hall (1894), 98 Ga 706; 81 a E." R 
 168; or if he knew that the inquirer 
 was the holder, and the inquirer was 
 •a.rc-.: w rcss or inactivity by the 
 answer. See Plumer v. Lord (1864 
 91 Mass. 456), in which there had 
 been representations as to the exist- 
 
 ence of a par nership before credit 
 given, and with no intent to procure 
 it — no estoppel. See also cases in 
 eh. XI, under subtitle "Lulled into 
 Security." 
 
 •Clarke v. Dillman (1896), 108 Mich. 
 625; 86 N. W. R. 670. 
 
 ^Mississippi V. Ottumwa Belle 
 (1897), 78 Fed. R 64a 
 
 * Jorden v. Money a854v « rr l. r* 
 ai8; 88 1* J. Ch. m. And see We^ 
 V. Jones (1851X 1 Sim. N. a 805; 80 
 L. J. Ch. 863; Mangles v. Dixon (1858), 
 8 H. L. a 708; Manufacturers' Bank 
 
158 
 
 CONDITION NO. 10. 
 
 
 that it was meant that he should act upon it, and did act upon it tut true^. 
 the party niakinK the representation would be equally precluded from con- 
 testing its truth." I 
 
 To the same eflFeot an American case has it, that 
 
 "if the circumstancps are Such that a reasonable man under the cireum->- 
 stances would anticipate that it was to be acted upon, that will be suf- 
 ficient"* 
 
 Born V. Cole » is an important case upon the subject in hand 
 because of the valuable judgment of Perley, C. J., which it. 
 contains, whatever one may think of the justness of the con- 
 clusion arrived at. The owner of certain goods represented to 
 Cole that they were the property of A. ; he did so in order to 
 avoid their attachment by his own creditors, of whom Cole was 
 not one; thereupon Cole sued A. (who happened to be his 
 debtor), and attached the goods; the owner of the goods was 
 not aware that Cole was a creditor of A., and had no intention, 
 of misleading Cole — it vfas his own creditors that he was con- 
 triving to deceive, ffeld, that the owner was estopped, for 
 •• whatever the motive may be, if one so acts or speaks that the natural 
 consequence of his words or conduct will be to influence," etc. 
 
 The case is out of harmony with those already referred to.. 
 The deflection is probably due to the too sweeping assumption 
 that all natural consequences are to be debited to any one who 
 makes a misrepresentation, whether the person deceived had or 
 had not reasonable ground for believing that the representation 
 was intended to produce action upon his part. The circum- 
 stances of the case (for which see the report) make it perfectly 
 clear that the misrepresentation was made by the owner of the 
 goods, not for the purpose of producing action by A.'s creditors, 
 but in order to insure inaction upon the part of his own; and 
 that Cole, to whom the misrepresentation was made, had ho- 
 
 V. Hazard (1864), 80 N. Y. 286; Wal- 
 lerioh v. Smith (1896), 97 Iowa, 308; 
 66 N. W. R. 184; Moore v. Spiegel 
 (1887), 148 Masa 413; 9 N. E. R 827. 
 i Freeman v. Cooke (1848), 2 Ex. 
 654; 18 L. J. Ex. 114. To the same 
 effect: Preston v. Mann (1856), 25 
 Ck>nn. 128, 129. And see the third 
 proposition in Carr v. London (1875), 
 L. R. 10 0. P. 816; 44 L. J. C. P. 109. 
 Consult Bigelow on Estoppel (5th ed.), 
 pp. 628- 629« and the cases therix 
 cited; and the later cases of Ford v. 
 Fellows (1889), 34 Ma App. 630; 8 a 
 
 W. R 791 ; Westbrooke v. Gurdereau 
 (1893), 8 Tex. Civ. App. 406; 22 S. W. 
 R. 69; Kiersky v. Nichols (1895), 29 
 S. W. R 71 (Tex.); Daugherty v. 
 Yates (1896X 18 Tex. Civ. App. 646; 85 
 S. W. R 937; Sessions v. Rice (1886), 
 70 Iowa, 806; 30 N. W. R 735. 
 
 2 Two Rivers Ca v. Day (1899), 102; 
 Wis. 828; 78 N. W, R 442. And see 
 Kingsman v. Graham (1881), 51 Wi& 
 882; 8 N. W. R 181; Tracy v. Lincoln, 
 
 X*'-"-'t/, xTt7 iTlttrss. out ; nt it. sn, xu !«;;• . 
 
 '(1868) 51 N. H. 297. 
 
ANTICIPATION OF CflANOE OF POSITION. ; 159, 
 
 rrupon^it"^^"'' '^"' '^""' """" ""^' ^'''"'^"" '^^' ^' «^°">^' 
 
 Zt^A^man vMerts^ errs ia contrary fashion. A vendor 
 biU fo7ZJnl"^ agreement) gave to the purchaser a receipted 
 bill for the goods, which was exhibited to a sub-purchaser as 
 evidence of ownership; and it was held that the original vendor 
 was not estopped, because there was no design to mislead and 
 no intention that anybody should act upon the faith of th^ 
 document. The point that «a reasonable man under the cir 
 
 ZSed. "" "''"'''' '''' '' "'^*^ '^ '^'^^ "P«"" ^-- 
 Mr. MarUy's F/.u,.- There is some curious confusion with 
 reference to this subject in Markby's Elements of Law: ? 
 
 intention on tlie part of A. to do sometS ?hi^ "'f^ the existence of an 
 if that intention existed, whether TreaKri'lt '®*^*^ 'f^"'** \ **'« ^m^?.%. 
 are always put as cases of estnnLi. fho/^'lu**-'"' °"*- ^^^ tl>ese cases 
 is assumed to exilt. wiLther it ex^sN ornnV"' *u »"*^°t«>° »« do this thing 
 attribute the legal rSttlthefctwmin^h ^ ^""^^^ ^ '""«*» si'"?'" ta 
 of consequences, but no one has evU thou ^^^^^^^^ *°.t'»! intention 
 
 tlie view that the legal result of An Lfl^^*^°' *''•?' ^ redded are we to. 
 tion of the doer of S r^^^S ^^.^'1^1^^^^^ °° t»^« --^al condi- 
 
 The most obvious comments upon this passage are: 
 
 1. The vievv that "the legal result is the same" (namely es. 
 toppel) whether the intention really exists, or from^ thels op- 
 peMenier's conduct it may reasonably be inferred to exist, 
 cannot fairly be translated into, "that is, the intention to ^l 
 this thing IS assumed to exist whether it exists or not." 
 
 2. ^or can such translation be debited to estoppel; which 
 indeed IS constantly pointing out its inaccuracy, and insisdnt 
 tha the reason for attributing legal consequences to the con 
 duct in question is precisely not because intention existed, oris 
 assumed to exist, but because the estoppel-denier is estopped 
 
 nT.h'^rr^/'f '' ^'^ ^^^^^-baving misled another pe^r«C 
 into the belief of a certain state of facts, he is precluded from 
 denying their existence.' 
 
 J\^^^ F'^'^T'^ alternative is "to attribute the legal result 
 to the act without any reference to the intention of conse- 
 qaences." But the only "act" which is attend.' by legal re- 
 suits IS the conduct from which "B. may reasou...y infVr th^ 
 
 '(1871) 109 Mass. sa And see cases 
 cited with this one in ch. XXL 
 
 *4thed.,§83a 
 *See anfe, ch. I, 
 
160 
 
 CONDITION NO. 10. 
 
 :isl: 
 
 existence of an intention (of consequenoos) on the part of A." 
 The "act" therefore is inseparable from "the intention of con- 
 sequences," and can only be spoken of with reference to it. 
 
 4, Mr. Markby replies to himself (although somewhat defect- 
 ively), when, after referring to an example, he says: » 
 
 rr.l^^i'^^.'i^^^A '"'5''? ^f"* *o sugKest that the reference of an act to the 
 Zl^ltl *"i5"'*®n ' ^i;?."**^'' °' '' '" relation to the consequences is but a 
 pretense after alL This, however, would be an erroneom conclusion. If 
 an act produced a legal result merely because a particular person did it. 
 and not at all because of the mental attitude of that person as regards the 
 
 fn^S^"*^*^? '!'*^" ''^**J.^ '*• *'«"«>« existence of Jiroumstanois aflfect- 
 ing that attitude would have no eflfeot." ""c^" 
 
 Intention or Negligence.— -It is frequently said that 
 " there must generally be some intended deception ... or such neeli- 
 gence . . . as to amount to constructive fraud."! 
 
 But' the word " fraud " is here, as very frequently elsewhere,' 
 used in wholly artificial fashion, and as a cloak merely to the 
 lack of clearness of perception; for in some of the instances in 
 which it occurs, as well as in many of those already referred 
 to in this chapter, there was not the slightest tinge of bad 
 faith. Those in which real fraud is put forward as the ground 
 of decision are, for the most part, cases of passively assisted 
 misrepresentation, in which, as we have seen, fraud is a neces- 
 sary ingredient in the misrepresentation, although sometimes 
 upon that account thought to be an essential requisite of es- 
 toppel.* 
 
 2. Assisted Misbepbesbntation (Passive), 
 
 In this class of cases the estoppel-denier observes action or 
 preparation for action, but he is unaware that certain facts 
 known to him are unknown to the actor, and he is silent and 
 80 misleading. In such case there is no estoppel because he 
 had no reason for assuming that the action is being taken upon 
 the faith of his passivity. 
 
 This subject has already been sufficiently treated.' It is there- 
 
 ^ Elements of Law, g 288> 
 > Brant v. Virginia (1876), 98 U. S. 
 885. And see Evans T.Bicknell (1801), 
 6 Vea 190, commented on in North- 
 ern Counties ▼. Whipp (1884X 86 Ch. 
 D. 489; 68 L. J. Ch. 6550; Patterson v. 
 Hitchcock (1877), 8 Cola 688; Hardy 
 V. Chesapeake (1879), 61 Md. 668; 
 Griflath V. Wright (1883), 6 Cola 248; 
 Greene v. Smith (1884X 67 Vt 368; 
 
 Birch V. Steppler (1888X 11 Cola 400; 
 Griflath V. Brown (1888), 76 Cal. 860; 
 Montgomery v. Keppel (1888X 76 Cal. 
 128; Sullivan v. Colby (1896), 18 C. a 
 A. 198; 71 Fed. R 460; Am. & Eng. 
 Ency. (2d ed.), vol 11, p. 4821 
 
 *See ch. XVIIL sulvtftle "Nothing 
 but Fraud," and ch. XIX. 
 
 < See ante; ch.yill. 
 
 ^Ante, p^ 18& 
 
AWICIPATIOK OF OHANOK Of WMmOK. 161 
 
 !hrreT„T!S!rj,''r *" '" ""•" ""'" «° "■»'"<' ""-jo™ that 
 «P«n the f.Uh of '<■»; sHeneT- * " "'"'"«* "' P""""- 
 
 3. AsStSTM) MlSREPSESUKTiTIOK (Aotivk) 
 
 d':s^tor:;r"'""'''"^-''""'»'°«'"^»'» 
 
 6 vuapter. ii we cannot say in such cases thnf *h^ 
 
 ioVflie in wlrr.""""" '*'»'"''' "'""o '"■■'"P'^seL. 
 cT „.™r.^T •"^■"''"S "-y misrepresentation «t all) we 
 Z Tk ** 'f-'" '"' ™'»PP«' """ 'he change o iJi! 
 Zt ntnT'^'T"'' """" ""^ '««° """onaw/oo':^ 
 
 SUMMART. 
 
 Conclusions from the foregoing are as follows: 
 W reasonaoie ground for .opposing that the peraon wl^^lie 
 
 11 
 
 ^Ante, p. Sa 
 
OONDITION fO. la 
 
 was misleading' f*in ^oing to act upon what he wm saying; that 
 is to say, reasouabld gfounct for anticipating so e change of 
 position. This is a rule /or persona) misrepresentation. 
 
 2. In cases of estoppel by passive assistance there is no dat^ 
 to speak unless " I perceive his mistake ; " that is to say, unless 
 I have reasonable ground for anticipating some change of posi- 
 tion upon the faith of my silence. 
 
 8. The requisite under consideration is not applicable to cases 
 of estoppel by active assistance. A rule for them will be found 
 in the succeeding chapter. 
 

 CHAPTER XIII. 
 
 CONDITION NO. U. 
 
 TA. Change of Portion Umt he Rea«m<a,ly Consequent Upon 
 the MwepreaentaOon or the Auistanee. 
 
 We have seen that, in order to effect an estoppel, the estoD- 
 pd^sserter must have changed his position a^Vthe fa th 5 
 the m,srepresentatio„. We have also seen thai in tj"^ 
 of cases the estoppel^enier mnst have had reasonable «o3 
 for ant.c,pat,ng that eome change of position woald takfZ™ 
 But snpp^ that the change ^hich ensnes is not only not iTt 
 
 fnTfnr' thf ' ?^ "' """"K "PO" "■" "»«"» by send- 
 
 h/.„ r .*"""' ""'■''' "■» """"y company be es^m'^ 
 by snch a change of position! Or supposUg that a w^re- 
 honseman, believmg that he had in store certain g^7Z. 
 mand.payment of «ntfor them from a pe^on whHd not 
 own them; ,.d that 8u,h pc«on. instead of paying the «„t 
 « - warehouseman intended, purchases the goods from"he 
 re^ mvner, « the warehouseman estopped by* nch change of 
 
 The Barry v. Croskey Rules. 
 
 we'^isllt :»'''• "^^ '''' '''' '""^ ^^^"^^«"^ P--Ples 
 
 t-^^meSZl^lSi^^}'^^^^^^^^ 'or the consequences of » 
 
 and so acting is injured or /amSfied.' "^° "*"'*"* *''*' °'*'« "^^ 
 
 »Mr. Bigelow's language is too 
 general He says (on Estoppel. 5th 
 
 ed.. dl 680): "And if m»»* :. ,. 
 
 the party acting upon the represeh- 
 tation was justified in so doing, how 
 he has changed his position." The 
 
 circumstances in Moore v. Spiegel 
 (1887), 148 Masa 413; 9 N. E. R. 827. 
 wouiu form a fair test of the stated 
 ment 
 
 -^ Barry y. Croskey (1861X 8 J. &H. 
 1; 31 L. J. Ch. 181, 
 
164 
 
 CONDITION NO. 11, 
 
 "Secondly. Every man must be held responsible for the consequences 
 of a false representation made by hira to another, upon which a tMrd pet- 
 ton acts, and so aciiing is injured or damnified — provided it appear that 
 such false lepresentation w^s made with the intent that it shouldbe acted 
 "P°^. y 5?" '^"^ person in the manner that occasions the injury or loss!^ 
 Thzrdly. But to bring it within the principle, the injury, I apprehend, 
 must be the immediate and not the remote consequence of the reoresen- 
 tation thus made." 
 
 This language was quoted by Lord Cairns in 1873 • with the 
 
 remark that the principles 
 
 "appear to me to be consistent with what is stated by all the authorities 
 that might be referred to." 
 
 It was also quoted with approval by Lord Esher in 1896.* 
 
 According to Barnj v. Croskey, then, the law is as follows: 
 
 1. Where the misrepresentation is made directly to the es- 
 toppel-asserter, it is immaterial whether the change of position 
 was or was not that which was intended ; provided that it be 
 the immediate and not the remote consequence of the misrep- 
 resentation. 
 
 2. But where the misrepresentation is made indirectly to the 
 estoppel-asserter, then the change of position must be not only 
 the immediate and not the remote oonsequenoe of the misrep- 
 resentation, but it must also be that which was intended by 
 the person who made the misrepresentation. 
 
 In other words, if the misrepresentation be made directly, 
 there will be estoppel, whether the action was that which was 
 intended or not ; but if the misrepresentation be made indirectly 
 (made to some one else but passed on), then the action must be 
 that which was intended. 
 
 The Carb r. London Exiles. 
 
 The text-writers almost unanimously omit reference to the 
 
 Barry v. Croshey rules. They all quote the better known and 
 
 more frequently cited rules formulated by Brett, L. J., in Carr 
 
 «. London^ which are as follows : 
 
 1. "One such proposition is, if a man by his words or conduct wilfully 
 endeavors to cause another to believe in a certain state of things w/»ioA the 
 first knows to be false; and if the second believes in such a state of things, 
 and acts upon his belief, he who knowingly made the false statement is 
 estopi >d from averring afterwards that such a state of thing* did not in 
 ' fact exist 
 
 1 Peek ▼. Ourney (1878), L. R 6 H. 
 lU 4!8: 48 Lt J= Ok m 
 
 > Andrews v. Mookford (1806), 1 Q> 
 a 878; 68 1* J. Q. a 803. 
 
 »(1875) I* R 10 G P. 816; 14 L. J. 
 n jy tna 
 
 -vr at ff ivvt 
 
k 
 
 consequences 
 h a third per- 
 t appear that 
 ioufa be acted 
 Iruury or lots. 
 I apprehend, 
 the represen- 
 
 5 ' with the 
 
 e authorities 
 
 jr ia 1896.2 
 follows: 
 '' to the es- 
 of position 
 I that it be 
 the misrep- 
 
 jotly to the 
 )e not only 
 he rnisrep- 
 itended by 
 
 !e directly, 
 which was 
 » indirectly 
 >a must be 
 
 inco to the 
 :nown and 
 J., in Carr 
 
 uot wilfully 
 gs whiak the 
 te of things, 
 itatement ia 
 s did not in 
 
 )16: 44 L. J. 
 
 CHANGE OF POSmON -BEASONABLY CONSEQUENT. 165 
 
 exp^i'^Sro'^bTco'Sdu^cWSr "• ^ ^ *^»' '' » »«»«. either in 
 exfstence of a certain stSteSff?cttthioffif?^*i^'°? ^ »"other of thS 
 
 a^^Mhe first is estop%te.%*'LVli7&%°^^^^^^^^^^ 
 
 ingVattrrc^u'^rtL^^i^ti?^ 
 
 conduct to mean a certain re^eMntotionnl^^^^^^^ man would take his 
 representation, and that the lE was fntendS^^^ *"*'* that U.was a true 
 ular way, and he with such belief d^ Ti ?« /a '? *'*'* 'J»'°u°. '' *" apartio 
 first ,s estopped from denyin^tSt't^l ^c'ti Ve'r^a^pVeJe'Si^''^^^' '""^ 
 It wi 1 be Observed that these Carr v. Zondon rules were 
 formulated m 1875. The £a..y ^. Oroske, rules had bl 
 
 ; rL^t s:r96.r" ^"^^^ ^^^ ^^^^^^^^^ *-"'Ar 
 
 yeare later (m 1S96) they were approved by the same ndim 
 who formulated the Carr v. ZonZ rules. ^Lo^ ZL t? 
 as we have noted, i„ that last named year said that the &^^ 
 
 authS" "" " '"°'^'"" "''" -""" '^ ^'^^ ^y "iS 
 
 The .Rules Compaked. 
 
 JL comparison however, of these rules shows that they pro- 
 ceed upon widely different prineiples. The £arn, vZZ, 
 setd,st.ng«ish between eases of direetand indiZ mfaZre 
 sen.at.on and assert that where the misrepresentaTonTdT 
 
 orTot'bu^thTT'' "";"■" '"^ '"'""■' ^""^ -^ '"»' ""^^^ 
 or not, but that where it is indirect the action must be th»t 
 
 which was intended. In the Carr v. LoncUn. prepositions there 
 
 » no trace of this distinction. The second of them inde^ H 
 
 eave r«,m for the introduction of the idea, but that ius nol 
 
 o^d^ '?""" ^l l'"' "PP"-^'™ "^O' »' i"» '"e casl nder 
 consideration, and by comparison of it with the thi«i rule 
 
 wholly dissimilar sort, namely, between cases in which the 
 
 «toppel-denier.' wilfully "represents that which hr«knowI 
 
 ■ um"'°1''*°'°^>'»!"' "«»» '" "bioh there is no mZ 
 
 i^tt^tin^indL "" ' be estoppel, whether the action taken 
 is that intended or not; but where the misreDresentatmn i. 
 honest (Kules 2 and 3) the action must be Mwh oh was in 
 tended, or at «1] «^a«*„ *u-* „.i-. . . »>uiuu was in* 
 
 ««« ♦ "u i ' " '"° ■'"'*'' ""'°" '^° * reasonable man would 
 
 seem to have been intended. In the Barry v. CroskeurZ 
 there is no trace of such a distinction. ^ 
 
166 
 
 OONlJlTION NO. IL 
 
 "Now it is quite apparent that these two sets of rules cannot 
 subsist together. For if we apply them to a case (of frequent 
 sort) in which there is a direct and honest misrepresentation, 
 but no intention or seeming intention to produce the particulate 
 action which ensued, then, according to the Barry v. Croikey 
 rules, there would be estoppel; but according to the Carrv. 
 London rules there would not. And contrariwise, if we as- 
 sume a case in which the misrepresentation \z indirect and dis- 
 honest, and the action not that intended, then according to 
 Barry v. CroaJcey there would be no estoppel, but according to 
 Carr v. London there would. 
 
 Classification Neokssaet. 
 
 A review of the cases will show that neither set of rules has 
 been consistently acted upon? and this further, that they are 
 not, in their form, even adapted to a large number of the cases 
 to which they have been applied. The confusion has arisen 
 from an insuflftcient classification of the subject. It has been 
 assumed that in all cases of estoppel by misrepresentation the 
 estoppel-denier must have communicated with the estoppel- 
 asserter, either directly or indirectly, and in so doing must have 
 been either honest or dishonest. But this is not true, for in the 
 largest class of cases the misrepresentation is not made by the 
 estoppel-denier at all, and therefore neither directly nor indi- 
 rectly, neither honestly nor dishonestly. 
 
 The class of cases just referred to is that spoken of in this 
 work as that of actively-assisted misrepresentation. It em- 
 braces those multitudinous instances in which the misrepresen- 
 tation has been made by some third person who has through 
 some action or inaction of the estoppel-denier been enabled to 
 make his misrepresentation credible. For example, a mortga- 
 gee hands the title-deeds to the mortgagor, who, in fraud of the 
 mortgagee, deposits them as security for a loan. In tTiis case 
 the misrepresentation is that of the mortgagor in asserting that 
 he was the unincumbered owner of the land; and the depositee 
 can obtain priority only if it be held that the mortgagee, by 
 having parted with the deeds (by having assisted the misrepre- 
 sentation), is estopped from asserting his title. In other words, 
 
 if the dCDOSitee's action was rAARnnn.h1v nnneonnonf iinrwn *v.^ 
 
 assistance rendered by the mortgagee to the misrepresentation 
 of the mortgagor. 
 
OHiNOE OF POSmON^HEASOMBLT OOSSEQOENl; 167 
 
 eitlTdLT::: indrl'^r • ^'^ '^ -» -i-opresentation, 
 
 the ^^w^rn^^^r^^d'Trrrrr -^ '" -^ 
 
 Personal Misbepbesentation. 
 
 oft'fuirrS^^^^^^^ Tf^ ^'^^^^ -^ -* - other 
 
 posaiHo, som prind^^^^^ ^^^^ ^"^ «^«o *« evolve, if 
 
 of actively Jsisted mil ! ^''^°* P'*'^**^ ^^^ (^^^^^ 
 
 th. ^"""^^^^^^^s^^ed misrepresentation), let qs review a few of 
 tilt) cases, commencinff with thA t«r« Lu- u ^^^*^^^ «• ^©^ of 
 under discussion. ^"^ ""^'^^^ ^^ntain the rules 
 
 tattTe^ua^'S St'' ^t T * ^^'^^"^ *>^ ^-P-en- 
 « cornered" Z «h^' 7^°'°''' preparing for such action, 
 
 m the manner m which the plaintiff had acted noontt ?h! 
 
 enteredinto by the plaint ffTn th,?caS sh^^^^t'*^'"? ' ","°^*« ^"^^ »««" 
 «till less that such bargains shoSd b^'«n?«rl5®K'"*'*^'°'**'«i'" benefit -• 
 jury of the parties who^av; SStered iJto them " ^ * ^"^'^ ''^^ *° *^« »°- 
 
 the coiZ':^ri:v^^^^^^^^ 'y ^^« --pany; 
 
 '(1861) 8 J. AH. 28; 811. J. Ch. 121. 
 
168 
 
 CONDITION NO. 11. 
 
 Were we to apply the principles of Carr v. London to this 
 case we should have to arrive at a conclusion contrary to that 
 of the court. We should have to say that the company would 
 have been estopped; for the misrepresentation was dishonest ^ 
 and m such case, according to that authority, it is immaterial 
 that the action was not that intended. 
 
 Carrv. London} A railway company by mistake sent ta 
 plamtiff an advice note indicating the arrival of certain good* 
 for him. Upon the faith of this advice note the plaintiff sold 
 the goods. Held, that the company was not estopped from 
 showing that the goods had never reached their hands. Brett 
 L. J., said : * 
 
 *-«2*i*'*'*"°*' ^ '* ^^^^ *° "S' ** t'uly affirmed that the defendants in 
 
 note IS that the consignee ahoulU tend for the goods." aavioe 
 
 In this case the representation is made honestly; and there 
 18 no estoppel because it was not acted upon in "the particular 
 way" intended. But under the Barry v. Cro^key rules there- 
 would have been estoppel; for, the misrepresentation being di- ' 
 reot, the character of the action taken is immaterial. 
 
 The Rules Criticised. 
 
 Here then we have two cases, both of thorn decided, as one 
 would think, properly; and yet the rule upon which each pro^ 
 ceeded would reverse the decision in the other case. This 
 rather suggests that both the rules must be defective. 
 
 Barry v. CroaJceij. A priori it is not easy to see why the 
 nature of the change of position of the estoppel-asserter (that 
 mtended or not intended) should be dependent upon whether 
 the misrepresentation was made to him directly by the estoppel- 
 denier, or made to someone else with the intention that it 
 should be passed on to him.^ In both cases the misrepresen- 
 tation is the same; in both it is made by the person held re- 
 sponsible for it ; and in both it is acted upon by the person whom 
 the estoppel-denier intended should act upon it. In both cases 
 then there should be estoppel if (may we not add?) the change- 
 
 P T^.^1 ^ R- 10 C. P. 17; 44 L. J. on he cannot (for that reason) com> 
 ^•f'^y-^' plain. Seech. 2. 
 
 *U it IS not intended to be passed 
 
CHANGE OF P08,TI0H-mAS0NAB,.V COKSBJDEOT. 169 
 
 l';';!S:„t'^'"""^ '"""^"»' ""<'■' '"« -"O" Of the 
 
 t.on ,8 that which "a reasonable man would Tke" ifl^^^^ t 
 .n^nded, ia .his not another way of saying'ttatte a otrmt: 
 
 Z^Z:T""f^T''''"" "P°" the misr^presen tat^r 
 no!!,^ "" *°'' ^'"""""' ™P'-«»ntatio„ then may we 
 
 not say, m cases of personal misrepresentation, that the change 
 
 :nC„7 ""' "' """"^"^ "'-'^-' "P"" 'to «"-P- 
 
 Assisted Misrepresentation (Passive). 
 
 tin!"" ^^.T' '" '''''^' °^ standing-by, that the change of posi- 
 tion must be reasonably consequent upon the passivf^rL'but 
 
 »In Bedford v. Bagshaw (1859), 4 
 H. & N. 548; 29 L. J. Ex 59, Baron 
 Bramwell said: "But it is not a bad 
 rule that a person who makes a 
 fraudulent representation which is 
 intended to be generally circulated 
 shall be liable to any person injured 
 
 by aotinor nnnn if h^.^ . 
 
 - " -r — •~! ■•^■■T'cr^r rcnsoce 
 
 the consequences may be." Observe 
 that the learned Baron does not say 
 however remote the action may be 
 
 from the misrepresentation, but this: 
 that If the representation be acted 
 upon, then there is liability for the 
 remotest consequence of that action 
 Possibly this distinction was not 
 present to the mind of Wood, V. C, 
 when he said of the dictum: "That 
 amy be sound doctrine in measuring 
 the limits of moral responsibility " 
 Barry v. Croskey (1861), 2 J. & a 19- 
 81 L. J. Ch. 181. 
 
170 
 
 CONDITION NO. 11. 
 
 insisting upon one of the data of the case. For the case is that 
 the true owner stood by and witnessed a disposition by another 
 person of his interest in the property to one who purchased 
 upon the faith of the raisrepresentation of ownership. In a^ 
 preceding chapter i wo saw that in such a case there is estop- 
 pel where (1) the estoppel-denier was aware of his own rights; 
 <2) the estoppel-asserter was unaware of these rights, and (3) the 
 estoppel-denier had reasonable ground fok- assuming the exist- 
 ence of such ignorance. Where these facts co-exist the estop- 
 pel-denier has « reasonable ground for anticipating some change 
 of position," and the particular change plainly is « reasonably 
 consequent upon the assistance" rendered by the silence of the 
 estoppel-denier, for it was the change which he anticipated. 
 
 Assisted Mi^bepeesbntation (Aotive). 
 
 As has already been suggested, neither of the two sets of 
 rules (above quoted) is adapted to oases of aotively-assisted mis- 
 representation, for in these it is impossible to make the distinc- 
 tion between direct and indirect, honest and dishonest, misrep- 
 resentation. The question in such cases involves primarily the 
 conduct, not of the person making the misrepresentation at all, 
 but of a third person — the person rendering the assistance — 
 who sometimes has no cognizance of the misrepresentation. 
 
 Recurring to the case of the dteds handed over by the mort- 
 gagee to the mortgagor, and the mortgagor pledging them, it 
 will at once be seen that we cannot determine the question of 
 the mortgagee's estoppel (1) by considering the moral quality 
 of the misrepresentation (for the misrepresentation was that of 
 the mortgagor) ; nor (2) by asking whether the depositee would, 
 as "a reasonable man," have taken it that the mortgagee in- 
 tended him to advance money upon the deeds (for the depositee 
 knew nothing of any mortgagee, and indulged, therefore, and 
 could indulge, no speculations as to his intentions).' Conceiv- 
 
 i Ante, oh. VIIL 
 
 2 A partner who haa retired is es- 
 topped from denying that he is a 
 party to a contract made with a cus- 
 tomer in the partnership name un- 
 less th> customer has notice of his 
 retirement; yet It cannot be sup- 
 
 posed liiat he intended that the con- 
 tinuing partners should pledge his 
 credit in fraud of him. See per 
 Parke, R, in Freeman v. Cooke (1848), 
 
 2Ez.Afl4! IS T. .T W» 11A qa^-t— 
 
 Hoig V. Gordon (1870), 17 Gr. 699. 
 
CHANGE OB POSmOK -^ EEA80NABLT OOXSEQiIent. 171 
 
 sometimes immaterial » ^ ^* '^** ^^^ ^» 
 
 mast be r.^uMy^Z^^^'^^:!^^'''''^ "«" "■» change 
 the mistepresen Jion^ ^ '^ ""^ •^'""« """iered to 
 
 APPUOATIOH TO THE OiSBS. 
 
 Applying retrospectively this saff!w«t«H «,i. »^ .i . 
 cipal oases, we find it suffloient ZrT^ t! T' ""X""" 
 %the action taken was held not to wrt . '^ *• '^'^ 
 it was not the action^nnt^ > . 7 . *" "'"PPe'. "wause 
 
 that not reatnaCcoZtnf :'„; 't^'e "' "" ""'"'^ '"^° 
 And the validitv J,h^ •"^«»''t upon the misrepresentation. 
 
 ing: WheTher ff tit TT"."* "'*' ""y "» '«''«' ^y ask- 
 butnrthat Intended th""' ^ ^'' """""""'y oo-^uent 
 The rule snfliceraas„',t7«;:"z "f T '^■' "'"P"-" 
 for goods and not soling them wafTht" ^""^ " """'"8 
 it was also that which was Zsrabtr """ "'""'«'■ 
 
 m-srepresentation. W. ZZZZ'^SIZ"'^-' ''" 
 
 thaX^a^XdlrnTd '"'° ^""^-'^^) "^^-d 
 they (mistakenh-i T^rK^ ^^ ""'* '° "'^ ?'»"««» "ho 
 
 "rirth^e'ttxrw^^Cp'r^^^^^ 
 
 they had the goods. ^^"^ '™'° '^^y'-'S that 
 
 co«lingtX™°J '^■^.' '"{'"'"'" miBrepresentation. Ac 
 
 bonest it was not LZ ''"''°"?^ V^ misrepresentation was 
 
 probably J'^rlrnlh, ''"' '" *^! °'"°°''' ^°^«°^«^' "^^ 
 L^-^T.7''^ r . * ^^easonable man would have tak«n ,t » 
 
 "as inienaea to act upon it. ' 
 
 vtittb uc 
 
 •(1887) 18 ^ a D. 189; 19 Q. a D. 68; 56 L. J. Q. a 4ia 
 
172 
 
 CONDITION NO 11. 
 
 Compare this case with Carr v. London, in which it was said 
 that the railway company was not estopped by sending inad- 
 vertently an advice-note of the arrival of goods, although the^ 
 supposed consignee acted upon the note by selling them, be- ' 
 cause such action was not that intended by the railway com- 
 pany — the intention was " that the consignee should send for 
 them, not that he should sell them." In both these cases thfr 
 misrepresentation was direct and honest, and in neither waa 
 the act done that which was intended. How comes it then 
 that in the one there was estoppel and in the other not? 
 
 The result can be justified only by attending to a feature of 
 the Seton v. Lafone case, which in the decision of it was over- 
 looked, namely, that the wharfingers had issued warrants for 
 the goods which were held by the person from whom the- 
 plaintiflFs purchased. NcJw suppose that the wharfingers had 
 not demanded the rent at all, had had no communication of 
 any sort with the plaintiffs, and that the plaintiffs upon the- 
 faith of the warrants alone had purchased the goods, the wharf- 
 ingers would still be estopped from denying their custody of 
 the goods.' We may say then that the letter demanding rent 
 had nothing to do with the true ratio decidendi; and that the- 
 true ground of decision is that the wharfingers having issued 
 warrants for the goods, and the purchase of the goods being a 
 reasonable consequence of such warrants, the wharfingers are^ 
 estopped. 
 
 Carr v. London was right then, because making a sale of 
 
 goods is not reasonably consequent upon the reception of aa 
 
 advice-note from a railway company announcing their arrival 
 
 the only reasonable consequence is that he should send for 
 
 them. And Seton v. Lafone is right because the purchase of 
 
 goods is reasonably consequent upon the existence of warrants 
 
 for them in the hands of a person claiming to own them. The 
 
 judgment in this latter case indeed may be cited against the 
 
 Carr v. London rule as to the necessity for the action being^ 
 
 that intended — although that is now probably unimportant. 
 
 Lord Esher said that it 
 
 "was reasonable as a matter of business for the plaintiff to do what he 
 dJd as a result of his belief in the defendant's statement" « "I do not think 
 
 » Coventry v. G. E. Ry. Co. (1883), 
 11 Q. a D. 776; 53 L. J. Q. B. 694. 
 And see ch. XXIII. 
 
 2 The present writer does not here 
 aiBrm that the plaintiff's aot was 
 reasonably consequent upon the mis- 
 
OHAMK or POSITION -^BEAeONiBLV OOHSEQtW ITS 
 
 upon it" 1 statement to act in any particular way 
 
 Covenlr!; v. G. E. Ry. Co? A railway company, bv mistake 
 
 rented \''"T^^ 'i'^^ '^ "^^^^^ '' \oJ.I^i^. k h d tt 
 received;, the plamt.ff advanced money upon it and the com- 
 pany was estopped. This case is somewhat similar to the cZr 
 ■V. London case, m which an advice-note was sent by a rau' 
 way company in respect of goods which it had not Leived. 
 It will be remembered that in this latter case the railway com- 
 
 trir?'! "''^P'"'^- ^"^^ ^""''^'''^ i^ '^^ Coventry case 
 the defendant IS estopped. ^ j' '^ase 
 
 The reason sometimes given is that in the Coventry case 
 
 there was negligence, and in the Carr case no negligence-' but 
 
 n that respect the cases are identical. The distinction ealy 
 
 seen. In the Coventry case "there was some evidence of a 
 
 this kind. That 18 to say, the railway company was aware 
 when accepting the delivery order that the acceptance mi^ht 
 Je used as evidence of the truth of the representation that they 
 held cer am goods on account of the person offering them for 
 sale. (It IS the case of the wharfinger's warrants over again.) 
 The action of the purchaser therefore was reasonably conse- 
 quent upon the misrepresentation of the railway company (it 
 could not be said that the company intended any action to be 
 taken), and it was therefore estopped 
 
 obt^f^T ""'y""'* ^ "^^''S^Sov upon pretended excuse 
 obtained from the mortgagee possession of the deeds; the mort- 
 gagee neglected to get them back again, and the mortgagor 
 
 thought to be sufficient for the dec- ' '"- ^" 
 
 laratlon of an estoppel in a case (of 
 direct and honest misrepresentation) 
 in which it was impossible to say 
 that the act was intended by the es- 
 toppel-denier. The case is thus made 
 use of to assist the writer's formula, 
 and not because he is of opinion that 
 — „- „,j^^j. mtsrepreseuta' 
 
 »(1887)19<}.aD.78;66L.J.Q.B 
 417. 
 
 2(1883) 11 Q. a D. 776; 63 K J. n 
 B. 694. * 
 
 'Everest & Strode on Estoppel, 
 p. 885, note. 
 
 *(1852) 1 Dr. 19a See also Kettle- 
 well V. Watson (1882), 21 Clu D. 686; 
 
 tion) there is any real dlsTirclTn^"-' ^c^^ Sis'^ and 1^1?'' '"''''l '' ^ 
 tween it and that other phrase that Xl2' ' * " "^' '° °''*P*''' 
 
 ^'a reasonable man would take it" . 
 
174 
 
 CONDITION NO. 11. 
 
 fraudulently deposited them with a third party as security for ft 
 loan. Here the first mortgagee is estopped because (the other 
 conditions being present) the action of the second mortgagee 
 is reasonably consequent upon the assistance given to the misr 
 representation. It would be impossible to say that the action 
 taken by the second mortgagee was that which he, "a reason- 
 able man, would take it " was intended by the first mortgagee,, 
 for the second knew nothing of any first, and could not possibly,, 
 therefore, have speculated as to his intention. 
 
 Smith V. Orouette> The real owner of a business permits it 
 to be so carried on that another person appears to be the pro- 
 prietor of it; and he is estopped from asserting his ownership 
 as against persons dealing with this ostensible owner, for their . 
 action is reasonably consequent upon the appearance of owner- 
 ship. Here again it would be impossible to say that the action 
 of persons dealing with ttle ostensible proprietor was that which 
 they (as reasonable men) would take it was intended by the- 
 real owner; for again they knew nothing of any owner other 
 than the ostensible one. At the furthest such a person might 
 have reasoned thus: If the ostensible owner of this business is. 
 not the real owner (and I have no reason to suspect anything 
 of the sort), then I, as a reasonable man, may take it that the 
 real owner, whoever he may be, intqnds that I should sell to 
 this ostensible owner as though he were the real owner, and 
 if I do so the real owner will be estopped from asserting his. 
 ownership." Needless to say no such process takes place. 
 
 Pboximatb Cause. 
 
 This chapter to be complete should deal with the phrase 
 " proximate cause" and the cases in which it is employed. It 
 has been thought, however, to be more advisable to treat of 
 that subject in the chapter on "Estoppel by Negligence,"* for 
 it is in connection with « the negligent act or omission," rather 
 than with the misrepresentation, that the phrase has been 
 
 1(1885) 2 Man. 814; Vineberg v. 
 Anderson (1890). 6 Man. 855. And see 
 Dunlop V. Lambert (1888). 6 CL & F. 
 600; Ramazatti v. Bo wring (1860), 7 
 \j. D. 1^. a. oai; s-j Xm J. w. 1'. «>0j iijt 
 parte Dixon (1876), 4 Cli. D. 183; 46 
 
 L. J. Bk. 20; Howland v. Woodruff 
 (1875), 60 N. Y. 78; Rogers v. Robin- 
 son (1895). 104 Mich. 329; 63 N. W. R. 
 403. 
 = Seecii. IX. 
 
irity for a 
 [the other 
 lortgagee 
 y tho misr 
 ;he action 
 a reason- 
 ortgagee^ 
 possibly^ 
 
 )ermits it 
 ) the pro- 
 wnership 
 for their . 
 )f owner- 
 he action 
 lat which 
 id by the- 
 ler other 
 3n might 
 usiness is- 
 anything 
 that the 
 d sell to 
 ner, and 
 rting his. 
 ace. 
 
 3 phrase 
 ^ed. It 
 treat of 
 je,"«for 
 " rather 
 as been 
 
 Woodruflf" 
 V. Robin- 
 ) N. W. R.. 
 
 CHANGE OF POSITION — REASONABLY CONSEQUENT. 175 
 
 from'^hr?^''^'^ ^' r" '" P'"'*"'''^' ^'^^^^^r. q^oti"^ 
 from the law of torts, between which and estoppel there is 
 
 much analogy, to say that changes of position which are "rea- 
 sonably consequent " are those 
 
 ca^e^'wuS t^eTrsl^SSSScST^^^^^^^^ knowledge b^in^ in the lik. 
 opportunities ^obirTSnf might be Sted 't^ ^nV*"** having the like 
 
 natural and probable?" i actually foresees is to him at all events 
 
 Or as put in the United States: 
 
 gen'c?-! iSiK SeS'uetVSiTnde^'thrB^i'' consequence of the negli- 
 the case might and oS to ha°ve Ui^ 8""o«nding circumstances of 
 likei;toflo#fromhisS"3 ® been fofeseen by the wrong<loer aa 
 
 cJsTquJ^crof'SirtlSsT^^^^^^ tJ'^tthe natural 
 
 change his condition, he is leeaHv nh«rLr^ \t? influence another U> 
 sign, to induce the other to SevJ Wm f nd n T^'f *" *° '^l^'^A « ^"'»» Re- 
 proves to be the actiial result" 3 '"* *"•* *° *''' "P<«» 'hat belief, if such 
 
 SOMMABT. 
 
 From what has been said it may be affirmed that: 
 
 1. Tbe ^arry v. CrosTcey and Carr v. London rules are in- 
 compatible the one with the other. 
 
 2. The requisite as to the character of the change of position 
 should not in any way be affected by the directnefs or indirect- 
 ness of the misrepresentation, as held in Barry v. Croskey. 
 Zon^r ''' ^"^'^^ ''' dishonesty, as affirmed in Caj-r v. 
 
 4. Neither set of rules is applicable to the large number of 
 cases classed under actively-assisted misrepresentation; for in 
 
 ?rTnV T'^J"^^'^^"^'' °^^^"' °^ representation eithei direct 
 or indirect, either honest or dishonest. 
 
 5. In the preceding chapter we saw that for cases of per- 
 sonal misrepresentation, and passively-assisted misrepresenta- 
 tion, a condition of estoppel is that "the estoppel-denier must 
 have reasonable ground for anticipating ^mfchange of posi- 
 tion upon the faith of the representation." 
 
 6. In the present chapter we have seen that in cases of per- 
 
 1 Pollock on Torts. 2A > n j. „ . . ^ _ 
 
 ''Robb V. Pennsylvania (1808). 186 12a""'"" " ^'°" ^'"^^ '' *^"°- 
 Pa. St 456; 40AtLR96a 
 
176 
 
 OONDITIOW NO. 11. 
 
 sonal misrepreseniation the change of position must have been 
 that " reasonably consequent upon the misrepresentation.'" 
 
 7. In ases of assisted misrepresentation by passivity the 
 rule is ex necessitate rei that the change must have been rea- 
 sonably consequent upon the assistance rendered to the mis- 
 representation. 
 
 8. And in cases of actively-assisted misrepresentation the 
 same rule must apply. 
 
 9. The rule therefore for all classes of oases is that " the 
 change of position must be reasonably consequent upon the 
 misrepresentation or assistance." 
 
 10. If the "particular consequence" has been "intended or 
 foreseen by the "^estoppel-denier, that "is to him at all events 
 natural and probable." 
 
 
CHAPTER XIY. 
 ^E UCKBARBOW „ "ASO., a^hxUPAX . WHEELWB.OHX 
 
 TAe Lickbarrow v. Mason Rule. 
 
 iTB-r ■ !; ^ "PPlied as that formulated by Ashhurst T in 
 1787, m the case of ZicBarraw v. Mcmn: . ^ "'' ^■' "" 
 
 oftwojSnf^rlSrm" .'s^„'S?h^?J"" P''"jlPl» thai whenever on, 
 
 .«ch third pe^r.0 oc<»ro?.r^''i,t.ruri'„\'!;''''' - ""^ "•"» 
 
 ohaptriV wurar*' "" T^'^S P-S-^' ""^ particularly 
 
 to r:,L!-o7r ;\"ur:tt:aii:vt"4it'" t-' 
 
 Assisted Misrepresentation » Th!! ' Estoppel by 
 
 thing by hhn said, ^o..ZtX^ ^^I'^^ZLT''^ 
 representation credihip tk^ i ^"® '"® '"^s- 
 
 .«ch third pe JnToUo: ttef :/ ^itt"' ""^''"'^ 
 put, "gave the agg«ssor the ^^^ IkZ^ir:^T, 
 
 »2 T. R 68; 1 H. Bl. 357; 8 East. 
 ^1. The case was preceded in prin- 
 ciple by Fitzherbert v. Mather (1785), 
 1 T. R. la For references to the 
 rule see. in addition to the cases 
 referred to throughout this chapter- 
 Tayler v. Great Eastern (1859), 88 L. J. 
 Ch. 289; Gordon v. James (1885), 30 
 Ch^ D. 258; Henderson t. Williams 
 (189.)). 1 Q. R 529; 64 L. J. Q. R SOS- 
 Dow8 V. Greene (1882), 24 N. Y. 845- 
 Trustees of Union College v. Wheeler 
 18 
 
 (1874X61 N. Y. Ill: Friedlander V 
 Texas (1888). 180 U. a 425; 9 8. C. R 
 570; Bangor v. Robinson (1893). 52 
 Fed. R 520; Miller v. Parker (1898). 
 155 Pa. St 208; 26 Atl. R 303; Timp. 
 eon V. Allen (1898). 149 N. Y. 513; 44 
 
 .^;.„^^ "*' ^°'^'' ^- Pennsylvania 
 (1898). 188 Pa. St 458; 40 Atl. R 98a 
 The rule is to be found in the CaU- 
 
 ..,T!i \.uut;, sec. J»4a 
 
 .,o,o^1°*^'^*"** ^ Ca's Appeal 
 (1878). 86 Pa. St. lOa 
 
 r-'. 
 
178 
 
 LIOEBARKOW V, MASON BULE. 
 
 be essentially requisite in estoppel — that there must have been 
 a change of position on the part of the estoppel-asserter; that 
 such change must have been reasonably consequent upon the* 
 misrepresentation; that the misrepresentation must have beea, 
 as to some matter of fact ; that the fact must have been a ma- 
 terial one; that the assistance rendered must have been in 
 breach of duty, etc. But most of these are sufficiently implied 
 by the language of the rule. That there has been a " loss " 
 implies that there was a prejudicial change of position; and 
 that the third person was enabled " to occasion the loss " im- 
 plies that the assistance rendered was material and that the 
 loss was consequent upon it. We find, indeed, nothing about 
 the misrepresentation being one of fact as contradistinguished 
 from intention, nor about breach of duty; but the rule is to 
 be taken as a short statement of " a broad general principle," 
 and may well be excused for omitting that which may have 
 been deemed to be obvious. It must be remembered, too, that 
 it was formulated in 1787, or just fifty years before the case to. 
 which, more to than any other, we are indebted for the con- 
 scious introduction of the modern law of estoppel by misrep- 
 resentation.' 
 
 The rule then appears to be but a short and pregnant state- 
 ment of the essential principles of estoppel by assisted misrep- 
 resentation. But this has been stoutly denied. Two assertions 
 have been made with reference to it: (1) That it is a rule quite 
 disparate from and independent of the law of estoppel;' and 
 (2) that either it is " not to be understood*at all in its gener- 
 ality " or else that it "cannot be supported."* 
 
 I. That the Rule is Disp abate prom Estoppel. 
 
 Lack of sufficient classification has produced the impression 
 that for estoppel the misrepresentation complained of must 
 have been that of the estoppel-denier himself: It is overlooked 
 
 1 Piokard v. Sears (1887), 6 A. & E. 
 469. 
 
 2 London v. Wentworth (1880), 5 
 Ex. D. 96; 49 L. J. Q. B. 857. And 
 
 T* it. t7. jro* ;£oucr;, i Vi XJ. 
 
 N. a 446; 80 L. J. C. P. 118. 
 
 » Per Lord Field In Bank of Eng- 
 land \. Yagliano (1891), A. C. 169; 
 60 L. J. Q. a 177. And see per Lord 
 Coleridge in Arnold t. Cheque Bank 
 \i.!3iv}, i \j. £-. u, aov; to u o. w. r. 
 665. 
 
UOKIUSBOW. V. MASON EULE. ^ 179 
 
 (usually uuwittiugly) by thi Si H ^'"l- '''*'°'» 
 
 of that sort do ocfur oLr pS^'trih ",'"'" '^'^ 
 are applied t„ .ie». look aS^f them; °" °' "'°'''"' 
 
 the l^uke. jr;e M itiTe' 'Z:iTZ t T'T *° 
 
 . '»thosubse;lCthe„„;Xr".raH„?rr t """" 
 misrepresentation would estoo fhlfil? ^ . '*°' P°"°°«' 
 sistance rendered bv him TlVt ' »ortg.gee, so also as- 
 
 ' gagor will estorhim ' "'^'^presentation of the mort- 
 
 . And observe that this is also within the Liokbarrow rule • for 
 an e»„p,e o, the lickbar.w gfuLfTl tlaV" '"' *^''°« 
 
 .a^^ tf s-^riXtTs Lrnti^rs 
 
 too large an amount. In such a case PoUock.S; ^IZ the 
 < 1- J. l-n. ««, And Ke Powell ,. London am), I 
 
180 
 
 LICKBARBOW V. MASON BULE. 
 
 operation of estoppel, and declares in favor of the Lickbarrow 
 rule.^ 
 
 '' In manv of the cases and text-books in which the liability of the ac- 
 ceptor of a bill of exchange, under circumstances similar to those which 
 occurred in the present case, has been discussed, it has been rested upon 
 the ground of estoppel; and with reference to this Bramwell. L. J., lias 
 recently said with great force in the case of Baxendale v. Bennett,* 'Es- 
 toppels are odious, and the doctrine should never be applied without a 
 necessity for it' It never can be applied except in cases where the person 
 against whom it is used has so conducted himself either in what he has 
 said or done, or failed to say or do, that he would unless estopped be say- 
 ing something contrary to his former conduct in what he had said or done 
 or failed to say or do. This language might be, not improperly, applied to 
 the present case; but for our own part toe should prefer not to use the tcord 
 ^toppel, which seems to imply that a person by his conduct is excluded 
 from showing what are the true facts; but rather to &<iy that the question 
 is whether, when all the facts are admitted, the acceptor is not liable upon 
 the well known principle that tvhere one of two innocent persons must suffer 
 for the fraud of a third, the loss should be borne by htm who enables the 
 third person to commit the fraud." 
 
 But, with deference, estoppel does not exclude facts.* Its 
 action is to preclude son^e one, " when all the facts are admitted " 
 or proved, from availing himself of them: A man is sued upon 
 an acceptance which is not his; he so pleads; a verdict goes for 
 plaintiff (that plaintiff did accept); but this is contrary to the 
 fact, and can only be upheld because the defendant upon the 
 evidence (not by exclusion of it, for it is all given) is estopped 
 from relying upon the truth of his plea. Moreover the Lick- 
 barrow rule, upon which the learned judge relies, cannot make 
 the defendant liable upon the acceptance, unless it is to be taken 
 as saying to the acceptor, "You assisted in the fraud; there- 
 fore, although the acceptance is not yours, you are precluded 
 from so saying." But that is clearly estoppel. If the acceptor 
 had himself represented that the instrument was obligatory 
 upon him, there would be no hesitation in applying the word 
 "estoppel" to his conduct. It is equally appropriate when he 
 assists the misrepresentation — when he "enables the third 
 person to commit the fraud." 
 
 Principal and Agent. — There are many cases in which an 
 agent may bind his principal although instructions are ex- 
 ceeded. This is, as the writer sees it,* clearly upon the ground 
 ,of estoppel by assisted misrepresentation. The agent has mis- 
 
 ^ London v. Wentworth (1880), 5 
 JeJx. D. 104; 40 L. J. Q. E 661. 
 
 ^Baxeudaie v. Bennett (1378), 8 Q. 
 R D. B39; 47 I* J. 0. P. 635-6. 
 
 * Sec cb. XV, sub-title " Estoppel as 
 a rule of evidence." 
 <Seech. XXVL 
 
UOKBARROW y. MA80H KULE. 1 Jgl 
 
 represented the extent of his authority; the principal has in 
 
 topped for that reason from denying that the agent had not 
 the authonty alleged. Mr. Justice Story" nevSeTrn 
 some of the other jndg^. refer it to the Lick^r" v ^^ and 
 Mr ftgelow refers it to the law of principal and agin". ' 
 
 he enabTd Th '^"'''™ ""' "^^ ^"'""P^' » '«W<> >«oanse 
 act ,n question. Suppose that he had personally made th! 
 misrepresentation - had said in so many words that ^e L^„I 
 had a power of attorney which gave the requisite anthoX 
 that upon production of the document no such authority was' 
 
 iTaWitr-Thrrl" ""i "" "' ""■""P"' "'«™"P"" "P"d!a^ 
 
 would be the ground of his condemnation. And it is not the 
 
 ess so because his conduct, instead of his language has mlted 
 
 he estoppel-asserter-he has enabled the aLuo o^a^lnl 
 
 loss, and he must sustain it, that is. be estopSl * 
 
 f^rtnT-^ '^■T^'*''°°8'' i" the lines of cases above re- 
 fe red teas well asm others the application of estoppel isdenirf 
 
 LJ ,^'t "^^"^ "■" '"« '°^"'" '" "e arrived at wouTd 
 be affected by pursuing the principles of estoppel. sJerZ 
 less occasions frequently arise in which the benefit oflc ear 
 view of the specifle application of correct principle becomL 
 very app, t. p ^^^^^.^^ .^^^.^ ^P P^^ "^^"^ d 
 
 tern Z7 ^f V"'" " ^'^ °' "'™' ^"^ -"'"'"""s so d 
 them to a imajlde sub-purohaser, Cockburn, 0. J., in deciding 
 against the original owner, said : ' > ^- « •. >» aecidmg 
 
 ' Story on Agency (9th ed.), J5 127. 
 
 =» Gordon v. Janaes (1885), 80 Ch. D. 
 358; Erbv. Great Western By. (1881). 
 5 a C. Can. 200. ^' 
 
 «0n Estoppel (5th ed.X pp. 457, 503, 
 n., 585, 66«. See the point discussed 
 in ch. XXVI, 
 
 <Moyoe v. Newington (1878X 4 Q. 
 a D. 82; 48 L. J. Q, a 135. xbe 
 case was overruled in Vilmont v. 
 
 Bently (I886X 18 Q. R D. 322; 12 App. 
 Cas.471;57L. J. Q. B. 18, because 
 of the statute 24 «fc 35 Vic, c. 96, 
 8 100; but the reasoning of Cockburn,' 
 C J., remains unaffected. See Ben. 
 jamin on Sales (4th Eng. ed.), 425, n. 
 it was foiiuwed in Babcock v. Law- 
 son (1879), 4 Q. B. D. 894; 5 Q. R D 
 284;49L.J.Q.R40a 
 
 I 1 
 
182 
 
 LIOKBARKOW V. MASON BULE. 
 
 the property to pass, yet that, the contract failing to take efTeci, the prop* 
 erty still remains unaltered; yet the question is now so concluded by au- 
 tbority as to be no longer open to discussion. We must now take it to be 
 *8ettlea . . . that though a seller is induced to sell by the fraud of the 
 buyer, and although it is competent to the seller by reason of such fraud 
 to avoid the contract, yet till ne does some act to avoid it the property re- 
 mains in the buyer; ' and that if he, in the meantime, has parted with the 
 thing sold to an innocent purchaser, the title of the latter cannot be de- 
 feated by the original seller. The reanomng on which this condunon is 
 baaed may not appear altogether connatent tvith principle, and agreeing in 
 the result we should prefer to adopt the view of the American courts as 
 stated in the case of Root v. French,^ a case decided in the Supreme Ciourt 
 of Judicature of the Stat« of New York, according to which the preference 
 thus given to the right of the innocent purchaser is treated as an exeeptioti 
 to the general law, and is rested on the prirMple of equity that where one of 
 two innocent parties must suffer from the fraud of a third, the loss should 
 fall on him who enables such third party to commit the fraud." 
 
 With great respect for so learned a judge it must be said that 
 if the Lickbarrow rule which he invokes had been seen to be 
 but the law of estoppel, not only would the reasoning to which 
 he refers appear to have been quite consistent with principle, 
 but the case would not have to be put in the unsatisfactory po- 
 sition of " an or 3eption ' to the general law." No doubt the 
 reasoning would show that, there being in fact no contract, 
 *'ihe property still remains unaltered," and therefore that the 
 sub-puiehast/^ could take nothing; but the case is one of as- 
 sisted misrepresentation, and the law of estoppel provides that 
 under such circumstances, although the property is in the orig- 
 inal owner, yet he is estopped from so asserting. This is the 
 general law, and not an exception to it. 
 
 The case is this: "The contract failing to take effect, the 
 property still remains unaltered" in the first owner; neverthe- 
 less be has "intended the property to pass" — has intended 
 that his purchaser should appear to be the owner; and has thus 
 enabled the purchaser to hold himself out as having the right 
 to sell. This is, then, a case of estoppel, not indeed by the 
 misrepresentation of the estoppel-denier himself, but by reason 
 of the assistance rendered by him to the misrepresentation of 
 ownership made by his vendee. 
 
 Mr. Pomeroy'B Concurrence. — The present writer is glad to 
 have the concurrence in the above conclusions of so able a 
 w;riter as Mr. Pomeroy. In his Equity Jurisprudence he says: 
 
 " When all the varieties of equitable estoppel are compared, it will be 
 found, I jthink, that the doctrine rests upon tne following general princi* 
 
 1 Tlnf hnur niin If. 
 
 t'ki 
 
 when, by hypothesis, it has never 
 got there ? 
 
 
LIOKBABKOW V. MASON EULE. J 83 
 
 -one of them who by his conduct lof-^f * *°?^ »t must be borne by that 
 4>ossibIe. This is oLfessedly^^^^^^^^ ^i^'^derea the fnjury 
 
 implied authority of aKent/ which ^r«S °Ju^ ?""!*« concerning the 
 ability to be applfcatiof lof t^e doct?fnp nf°i*?^* ^Z ^"'*«*'' «>* *''« '"l^est 
 righteous prinSfple is suffiSLntfand i^onesiSnl^^^^^^^ Jhislnost 
 
 •of such estoppel.^' i aione sufficient, to explain all instances 
 
 II. That the Rule Cannot be Supported, at All Events in 
 
 ITS Generality. 
 ^ In 1876, Coleridge, 0. J., referring to the Lickbarrow rule, 
 
 8ui;i?ct''Sh7c^'lS'ol"rhKS *wt5!«ISl'"»"^^-»* --S on the 
 loss 'must be understood to mernbv somA-nf «* ^/^I" to occasion the 
 ^"7 transaction itself. See PrSman v? cU a Ex '*K^%'^?'%"'t^° '^' 
 The correct rule seems tn na *« kI ♦iT * v^^*.* ^ f^^ o54; 18 L. J. Ea. 117 
 
 J., in his jad^nfeSt'in Swa"n ^K B^ cSl H. a".^ ^*«r tt BlackUn. 
 where, referring to the iudement ofwiw^ n u ^ ^'}^^' ^^ ^ J- Ex. 877 
 
 to qualify the Sile (he hafSated) bT if ?in^* t^Slhi" "^^^^ **>«* ^« °'°''« 
 the transaction it*elf, and be the nrn^mi^S **^ the neglect must be in 
 into that mistake; and also must hA?hT^*^^*°**"^ °' '«*<*>«« the party 
 to the person led into theTfiefi? whil^«'*°* *'^*'^T <»"ty that is owing 
 the general public of Sm the Sr^^l S°r»ni° *^* '^'"l *^'"?' ^'^^ 
 what would be prudent in resDenf J!f ?i,f ®; ^u*^ °*>* merely neglect of 
 
 trarr^sf^j^.^^^p^--^^^^^^^^^^^ 
 
 ^^ And in 1891, Lord Field, in the House of Lords, said as fol- 
 
 4itaSaf f b^d°gen?ral 2rincSleTh„T' ^'r""' ^ ^- «• ^0) Ashhurst. J., 
 parties must suflferHlTaft ofTjhir^iSffhf ^"^°^ *^° '""o^^^t 
 person to occasion tfte loss must 8Sri??°W,?*® ^^'^ '*'" «°aWed woh 
 and one of this House ofereat imnnr?««3 u ®"* J"^""® '^cent decisions, 
 propiMition is not toT unSt<STn alf kk r„V*K^' "'^°^° t^*' *h5 
 ported; and this was very cleaVlvMint^H «.^? generality or cannot be sup- 
 I think, cited in arBUHiTnt ?a rL?? ^u°"* *" ^^^ cases which were not 
 Bank,lC.RI).678Jf" '^^"°^** ""' ^^«^"« ^ank and Arnold v?c5y 
 
 1 8d ed., § SOa Mr. Markby exhibits 
 little appreciation of the Lickbar- 
 *ow rule, and none of estoppel by as- 
 sisted misrepresentation. He says 
 (Elements of Law, 4th ed.; § 716): 
 " The liability is not placed upon the 
 ground of misconduct, but of causa- 
 tion. If this principle were once ac- 
 knowledged the door would ' e open 
 to a very large extension of legal 
 liability." And in the note referring 
 to Baboock v. Lawson (1879),4 Q. B D 
 ^94; 5 Q. a D. 884; 49 L. J. Q. R m. 
 ho says that tue chief justice « seems 
 to have thought that the j ight of an 
 innocent purchaser to retain goods 
 
 which he had bought and of which 
 he had obtained possessioi, from a 
 person who had himself obtained 
 them by fraud, also rested upon the 
 principle that the original owner 
 had enabled the seller to commit the 
 fraud. I should doubt the correct- 
 ness of this view; at any rate it is 
 quite a modern view." For a dis- 
 cussion of the point see ch. XXI and 
 
 2 Arnold v. Cheque Bank (1876X 1 
 
 *Bank of England v. Vagliano. 
 (1891), A. a 169; ML J. Q. a 177. 
 
184 
 
 LI0KJ»AREOW V. MASON BULB. 
 
 All that will be said at present with reference to the case* 
 from which these extracts are taken is that the former of theni 
 very specifically treats the Lickbarrow rule as being a part of 
 the law of estoppel. The qualifications of the rale said to be- 
 necessary are fully discussed in another part of this work.' 
 
 The Lickbarrow Case. 
 
 The above references to the ubiquity of the Lickbarrow rule 
 will justify the assertion that it « has admitted of very general 
 application.'" It was, as the writer viewd it, a very remark- 
 able attempt to formulate that doctrine of estoppel by assisted 
 misrepresentation which still stands in need of much clear ex- 
 planation. For it was not the simple case of personal misrep> 
 resentation, but the fnore complicated application of estoppel 
 as against not the person who made the misrepresentation, but 
 against the one who furnished the opportunity for it and made 
 it credible. 
 
 The facts of the case were that an unpaid vendor of goods 
 shipped them to the purchaser and indorsed to him the bill of 
 lading; the purchaser transferred the bill to a sub-purchaser; 
 pending the transit the first purchasei became insolvent and*^ 
 the original vendor asserted a right to stop in transitu. Her 
 argued that he had the right to stop as against his purchaser,, 
 and that the purchaser could not deprive him of it — in other 
 words, that no one claiming through the purchaser could be in 
 a better position than the purchaser himself. He was, however, 
 unsuccessful, because the original vendor had, by indorsing over 
 the bill c lading, enabled his purchaser to represent that he 
 had a clear title to the goods. Grose, J., said: 
 
 "A bill of lading carries credit with it; the consienor. bv his indorap. 
 ?anii'T '"■'^** ^'^ *^' ***■" ''^ ^"^'"^' ""^ *"* ^^' faiilfilSt SnS 1 J S 
 
 The case itself, then, is an excellent example of estoppel by 
 actively assisted misrepresentation, and is decided in accordance- 
 with the rules applicable to that branch of the law. 
 
 »Ch.IX. 
 
 » Per Chapnell, R.in Swan v.North 
 B. A. (1862X 7 H. & N. 658; 81 L. J. 
 Es.425. 
 
 » Lickbarrow v. Mason (1787), 8 T. R. 
 78. Kemp v. Falk (1883, 7 App. Cas. 
 
 678; 63 L. J. Ch. 167) decides tbatt 
 there is a right to stop notwithstsnd- 
 ing an assignment of the bill of lad- 
 iKg, bat not to the pi-ejudioe of the 
 assignee — only as against othwr per* 
 sons interested. 
 
HALIFAX V. WHEELWEIGHT »CLB. 185 
 
 Summary.— We may then say : 
 
 1. That the Lickbarrow rule was a first attempt at formula- 
 sentadon ^""°'^^^ °^ ^''*'^^^^ ^^ "^^'"^^^ '''^'''^^ misrepre- 
 
 2 That it is not in conflict with, nor is it a competitor of, 
 the law of estoppel. It is not suggested that they lead to di^ 
 vergent conclusions. 
 
 3. Whether the rule can be supported in all its generality, 
 ekeThere! '^^ ^"^ *^' modifications suggested, h discussed 
 
 Tlie Halifax v, WheelwHgU Rule. 
 
 Ealifaxv. Wheelwright^ was a case in which spaces carelessly 
 left m a check were fraudulently filled up and the increased 
 amount drawn from the bank. The drawer was made to suffer 
 he loss. The applicability of the law of estoppel was ques- 
 tioned, and the following general principle held to be that 
 which governed the case: 
 
 misled by that defSrwUhouJLrfSuKrhL^S'n""' * ^'^'^ '^'^^ ^''^ 
 Although this rule was approved of by Lopes, J., in SchoL 
 field v.UnMor<yugh,^ yet, with deference, it is submitted that 
 It has no validity. If the words « wrong " and « default » imply 
 the disregard of some legal duty, and the "consequences" re- 
 ferred to are the reasonable consequences of that disregard of 
 duty, then indeed it m.^ be said that the rule, although in- 
 sufficiently expressed, is not altogether wrong, for the princi- 
 pal elements of estoppel are now present in it. But it would 
 rather seem, from the explicit exclusion of estoppel, that some 
 less stringent signification of these words was intended -that 
 although there was no estoppel, yet that the drawer should 
 suffer. But it would be difficult to say which one of the requi- 
 sites of estoppel could be dispensed with. 
 
 In any event the rule is insufficient for its purposes; for its 
 ^nguage is inapplicable to the case to which it is applied 
 When the drawer of a check, the careless spaces in which have 
 been filled up, is sued upon it, and he pleads forgery, the nasA 
 
 (1876) I* R. 10 Ex. 188; 44 I* J. 2 
 
 Ex. lai 
 
 29a 
 
 (1896) 1 Q. a 663; 84 I* J. Q. a 
 
186 
 
 HALIFAX V. WHEELWBIOHT BULB. 
 
 18 not one in which he seeks to "take advantage of his own 
 wrong," or indeed to obtain an advantage of any kind. He is 
 rather contending against his opponent's claim to advantage. 
 His plea is, "I did not draw that check," which is perfectly 
 true; and the only reply to him is that he is estopped by hi^ 
 -carelessness from so saying. He has not himself represented 
 the check to be genuine; but he has given opportunity for the 
 tnisrepresentation — has assisted it, and is therefore estopped. 
 
 \ ( 
 
CHAPTER XT, 
 
 NATURE AND EFFECT OF ESTOPPEL* 
 
 Lord Justice Brett in 1879 said : » 
 ^ct:;i?;«7^^^^^^^^^^ nature of the trans- 
 
 *he es toppe exists and the i^ZntZ UeZ^^dJ' ^"^^ ^° '^^^ ^»-0' 
 
 ipe«on f:om rnyiS^Vo^SnlSl^^a^ta^'^ "^ ''^'^■^«' ^* P'«-«n*3 a 
 Lord Justice Lindley in 1891 said-' 
 
 ESTOPPEI AS A OaoSE OF AonoH. 
 
 certain shares. Upon tbe fluh ofThil lt« , """^ °' 
 purchases the shares tL T • "»"'fl'=»«e some one 
 
 'enpng the pUha^^s lm.'^ZZl:Z "'7^ '""" 
 not sae the company direct v n™n f h^ purchaser can- 
 
 deceit, for there was^noTaud • Nor IT"""^""*'"" ■" 
 company gi,i„„ hi- .u;,"''"„- ^" «"■ ^e insist upon the 
 
 thoi^c/sfarcs^av: telTLtt Tth^ Tl^ '"T 
 damages for refusal to register him ^..haretw" ° To'thls' 
 th» company, only possible defense would be tit he w^ no" 
 
 »Simm V.Anglo-American (1879). 
 5Q.RD.807;49L.J.Q:R89a 
 
 J^lV I' i*'°°® ^^^7^ ^9 Q- B. D. 
 70; 58 I* J. Q. a 415, 
 
 •Low V. Bouverie (1891), 8 Ch. 101; 
 60 I* J. Ch. 894 See also per Bowen. 
 ^ J. (ivwii 3 Ufa. 105; 6U L. J. Cb. 601 ; 
 Howard V. Hudson (1858), 2 EL & a 
 8; 23 L. J. Q. a 841; Langdon v. 
 
 Dowd (1865). 93 Mass. 438; Andrews 
 V. Lyons (1865), 98 Mas& 849. 
 
 a^^rf \ ^^u^ ^^^^' ^* ^PP^ Caa 
 837; 68 L. J. Ch. 864. 
 
 37 L. .1. O R tna. »... . ' 
 
 -• -- "V, XJaiSJS T. XUuiUD> 
 
 son (1891). 8 Q. R69i;(1898).A.a 
 
 485; 63 L. J. g. a 184; Re Ottos, eta 
 (1893). 11 Ch. 618; 62 i J. cT^^ 
 
18S 
 
 NATURE AND EFFECT OF ESTOPPEL. 
 
 entitled to be registered ; and, as the company is estopped from, 
 so saying, the purchaser succeeds. 
 
 Nominally, the cause of action in the case is the refusal to. 
 register the shares. In reality the cause of action is based upon 
 the misrepresentation, for it was impossible for the company 
 to register the shares. Technically, no action could be brought 
 upon the misrepresentation because there was no fraud. Really, 
 the action was brought upon the misrepresentation ; but that 
 fact was well concealed and only brought in by way of reply. 
 The method was this: The purchaser alleged (knowing it to 
 be false) that he owned the shares; the company pleaded that 
 the purchaser was not the owner; and the purchaser succeeded 
 because the company was estopped from so saying. 
 
 If now we are to ask whether or not the estoppel created 
 the cause of action, we may answer as we please. It may h& 
 said that the estoppel created the cause of action, in the sense, 
 at all events, that it was the principal feature of the case. But 
 just as reasonably we may say that it was the refusal to regis^ 
 ter which created the cause of action (although registration was 
 impossible), and the estoppel merely the reason for its success. 
 
 Further consideration of the point, however, is unnecessary,, 
 for if the subject be well understood it is a matter of compar- 
 ative indifference what view we take of the quoted propositions. 
 
 Estoppel as a Eule of Evidence. 
 We have seen that Lindley, L. J., declared that 
 
 "Estoppel is not a cause of action — it is a rule of evidence which pre- 
 cludes a person from denying the truth of some statement previously made 
 by himself. * 
 
 Estoppel, in this view, is a rule as to the admissibility of evi- 
 dence — one in preclusion of certain testimony. In this sense 
 it has been asserted that 
 
 "Where the doctrine of estoppel applies to a case, any testimony at vari- 
 ance With Its full application thereto becomes incompetent"* 
 
 And IBigelow, 0. J., said: 
 
 " Such a representation is sometimes, though not very accurately, said 
 to operate as an estoppel; but its eflfect is rather to shut out a party from 
 offering evidence in a court of justice contrary to hia previous statementa" * 
 
 lAnd 8e6 Onward v. Smithson 
 U893), 1 Ch. 14; 63 L. J. Ch. 188; Heiw 
 maon on jsatoppei, g »9e. 
 
 'Oaston V. Brandenbury (1894), 43 
 a a 848: 80 & E, E, 158. And see 
 
 International v. Bowen (1875), 80 IIU 
 541. 
 
 » Langdon v. Dottd (1865), 92 Maak. 
 485. 
 
NATURE AND EFFECT OF ESTOPPEL. 189 
 
 With proper respect, the' present writer submits that this 
 view IS untenable, for the following amongst other reasons: 
 
 I. As a matter of practice the question does not usuallv arise 
 by way of objection to evidence, and most frequently cannot 
 so arise. Take the concrete case above referred to (where a 
 company issued an untruthful certificate as to shares) and ob- 
 serve its course: The purchaser (from the certificate-holder) 
 sues the company for damages for refusal to register. In open- 
 mg his case he proves his title to the shares by producing the 
 company's certificate and the transfer to himself, and he proves 
 demand and refusal; the company disproves the plaintiff^ title 
 by showing that the certificate was erroneous, and that the 
 original holder of it had in reality no shares; the purchaser, in 
 reply, proves that he acted upon the faith of the certificate - 
 proves estoppel. Maru that the purchaser could not preclude 
 
 nr,>Tr'V\P''''''^^^'^""°''"'^^"^°^^« o^^^« <'ertificate, 
 
 oMf ln!i .r. . r ^P^"*'"^ *^^^ ^^ ^^^ ^''^^ "P«^ the faith 
 of It, and that feature was necessary to the estoppel. Of course 
 
 the purchaser might have proved this in opening, but it would 
 have not on y been unnecessary but impolitic for him to do so 
 The estoppel then, in this case, does not arise as a question of 
 Ividence't '' ^ ^^^"^tion from, or legal consequence of, the 
 
 II. If estoppel be a rule in preclusion of evidence, how is it 
 to be applied ? There can be no estoppel unless ther^ has been 
 a misrepresentation; unless the misrepresentation has been 
 acted upon; unless all the other various requisites are present. 
 Olearly It is for the jury to find the existence of the facts nec- 
 essary to the estoppel ; » and it cannot be thought that it would 
 be proper for them, pending the trial, to interpose a verdict 
 upon that point. But the evidence could not otherwise be pre- 
 
 »The law as to waiver, as to eleo* 
 tion, as to " blowing hot and cold," 
 are clearly not part of the law of 
 evidence, although in this connec- 
 tion we use the phrase, familiar in 
 estoppel, that a man will not be al- 
 lowed to asaumn nr assert ^.vr-. '-. 
 consistent positiona 
 
 »In Pennsylvania it is said that 
 "whether an estoppel results from 
 established facts is a question for 
 
 the determination of the court" 
 Lewis V. Carstairs (1843), 5 Watts & 
 S. 809; Keating v. Orme (1874). 77 
 Pa. St. 9a And see Gunn v. Bates 
 (1858). 6 Cal. 268; Odlin v. Gove (I860), 
 41 N. H. 465. In this view the evi- 
 dcuee woaid aii go to the jury; the 
 jury would iind as to misrepresenta- 
 tion, action upon the faith of it, eta, 
 and the court would apply the law 
 of estoppeL 
 
190 
 
 NATITHE AND ETFEOT OF ESTOPPEL. 
 
 III. Nor is estoppel a rnle of evidence, in the sense of being- 
 a test or aid in the weighing of evidence when admitted. Th& 
 question is not one of weight of evidence. It is rather this^ 
 that although the evidence proves indubitably that the fact is 
 so and so, other evidence requires the court to act contrary to^ 
 the fact. For example: An infant defendant pleads his non- 
 age as against his conveyance; he is allowed to prove it (the^ 
 evidence is admissible); the plaintiff proves representation of 
 full age, acted upon; and the infant is estopped from denying 
 it. Here is no question of admissibility or weight of evidence, 
 but a mere question of law — who upon these facts is to suc-^ 
 ceed? 
 
 ly. The testimony which would be shut out by the rule under 
 examination is sometimes necessary in the consideration of 
 (1) the nature of the relief to be granted; and (2) the amount of 
 damages to be awarded, tin such cases it would be impossible 
 to exclude the evidtsnce. 
 
 (1) The NaUre of the Relief. -^ The nature of the relief some- 
 times depends upon whether or not success is attributable to es- . 
 toppel. Take the case of a warehouseman giving, by mistake, a 
 certificate that he holds goods for one man, whereas in reality he 
 holds them for another; upon the faith of the certificate a third 
 party buys the goods from the certificate-holder, aud the ware- 
 houseman is estopped from denying that the purchaser has ob- 
 tained a good title. Consider now the warehouseman's position . 
 On the one hand he holds the goods for .he true owner; and 
 on the other he is estopped from denying that he holds them 
 for the purchaser. Plainly he cannot gw^ them to both ; and 
 just as plainly, no court will wittingly order him to do so. 
 Now, if estoppel be a mere rule of evidence— if it does not 
 affect the nature of the relief to be granted — the purchaser, 
 in the case supposed, will be entitled to specific delivery of goods- 
 which do not belong to him, and which the defendant ought 
 not to deliver to him; and the court must so award 
 
 But this is precisely that which the courts decline to do. It- 
 was in a case of this sort that Lord Justice Brett said: 
 
 '* In a similar manner a person may be estopped from denying that cer- 
 tain goods belong to another; he n; r be oonipelled by a suit in the nature 
 2l^° *'?,*'°°u?: fo^e'.tojJeliyer them ujp if he has them in his possession 
 an-.i sPv-er j.ia euatroi; uut if the b0<>3s ir. respeet uf vhich he has es- 
 topped himself really belong to 8omeb<»dv -ise, it seems impossible tn sup- 
 pose that by any process of law he aai. be comp«Ued to deliver over- 
 
NATUBB AND EFFECT OF ESTOPPEL. 
 
 in 
 
 of trover against him; but thatTS^n^^^^^ "'.^ »«"on 
 
 no property has really passed to hU^f^L^^""'!.!?.^?':",.**?® «'>^^' "ecausj 
 
 no property has re.Uy[pas^dto^Cmrhe^^n^^^^^^^ ^J^jjf^ 
 
 Kere"e;*^ti.r;:^":i'"[ri^!!L'^-^^^^ 
 
 Scr?X«'S'a°c<foTbVtwP«n7.,I*^ "*'"^* '^'J*'® transaction; «"on/« 
 exists and theV{Z''^A'eZl^6.'K"^'' "" ''^'^ '«^«' *»»« «»topJ:?f 
 
 oaln ^7 ''T ''r^ 'i^f ' '° something like fiction, a sure indi- 
 caion ot undeveloped law. The plaintiff cannot directly sue 
 for damges for the misrepresentation (absence of fraud is in- 
 superable), but he may sue in trover for the goods in the sure 
 and certain hope that the court will deny him the restitution 
 which he claims, and give him the damages which he dare say 
 nothing about. The damages whicl: he asks are based uZ 
 his right to the goods, and are alternative for their detendon" 
 but the damages which he gets are based upon the fact that he 
 has no right to the goods; that his only right is to damages be- 
 cause he was misled by the warehouseman. If this be not a very 
 thinly veiled action in deceit, it is something very nearly akin 
 
 (2) Amouni of Damages.-lt has been s.nl that estoppel can- 
 not be merely a rule of evidence b^ .se, ia some cises, it is 
 a necessary factor in the consideration of the amount of dam-' 
 
 Zf .^ 'T'^"^' ^' ''^'^' '° ^" somewhat extraordinary 
 that m the discussion of estoppel we are led into a considera- 
 tion of measure of damages, but that is unavoidable in the 
 present state of the law. An action of deceit lies for misrepre- 
 sentation and the dama-es are so and so. Is there also an ac- 
 tion in estoppel for misrepresentation resulting in damages? If 
 not, there IS something that bears that appearance. It differs 
 
 rom deceit in this: that fraud is not a necessary ingredient in 
 It. It resembles deceit in this: that it is based upon misrepre- 
 sentation and sounds in damages. We are perilously close to 
 contradic ion here: No action for misrepresentation in the ab- 
 sence of fraud; some such action although no fraud.' As to- 
 the amount of damages consider the following cases • 
 
 (1870) ^a.^,,. FronUno} Plaintiff boughtand paid for shares; 
 in doing so he did not rely upon any representation of the" 
 company; he did not at once register his transfer; afterwards ^ 
 
 'Siram V. Anglo- American miV). 
 
 ■^ Q. R T>. 5:" - 4S Lfc J. <^ B. 898. And 
 
 2Seech. XVI. 
 
192 
 
 JXATVSE AND EFFECT OF ESTOPPEL. 
 
 a call was made and the vendor (still appearing upon the 
 register) paid it; the purchaser now registered and obtained a 
 certificate of ownership of the shares; on the faith of the cei^ 
 tificate he prxid the amount of the call to the vendor; after- 
 wards the company ascertained that it had made a mistake . 
 (another person in reality owned the shares) and it removed 
 the purchaser's name from the register. The purchaser sued 
 the company for the wrongful removal of his name; the com- 
 pany's defense was that he did not own the shares; the pur- 
 chaser replied that upon the faith of the certificate he hadv, 
 changed his position. Now observe that the extent of the 
 change was not the purchase of the shares and payment for 
 them (that had taken place prior to the issue of the certificate), 
 but payment of the calls only. Nevertheless the purchaser 
 recovered the full value of the shares. Having changed his 
 position, although slightly, the company was estopped from de- 
 nying his title to the shares, and being estopped the company 
 had no defense to the action for the wrongful removal of the 
 name from the register. 
 
 Orisaler v. Powers^ is to the same efl'ect: A mortgage for 
 $20,000 Avas purchased for $16,000, and an assignment taken 
 upon the faith of a representation by the riiortgagor that the 
 expressed consideration was the amount really due upon the 
 mortgage. The assignee sold the mortgage to a sub-purchaser 
 for its face value, and the mortgagor sold his equity of redemp- 
 tion. In reality nothing had been advanced upon the mort- 
 gage. Creditors of the mortgagor then claimed that although 
 the mortgagor was estopped by his representation, it was only 
 to the extent to which the representation had caused damage; 
 that the assignee had only paid out $16,000 upon the faith of 
 the representation; that to that extent alone was there es- 
 toppel; and that their debtor (the mortgagor) was therefore 
 entitled to the difference between that amount and the amount 
 for which the assignee sold the mortgage, namelj^ $4,000; 
 which money they demanded from the assignee. It was held' 
 that the mortgagor was altogether estopped, and not merely 
 to the extent to which money had been paid out. In this case 
 it was said that 
 
 r.fif J^iVfi?*l*^''fK.'^'^ ^^ * false representation, acted upon, is commen- 
 surate with the thing represented, and operates to put the party entitled 
 
 »(1880)81N. Y. 87. 
 
^NATUEE AND EFFECT OF ESTOPPEL. 103 
 
 J2n*ted waTt?uef SfdlhaWLn^hl^^'"^ '^".''1*?°'^ «' '' *he thing repr.- 
 a chattel, or securitrtS remedy of 1^^?"^"*'°" " "**'* «° the*'sale of 
 <5overy. simply, of th^ money ad vp' *i if^h'''''*''^^'^ "°' ""'*«<* *« » »<'■ 
 benefit beyo'nJ'that. if SieTotl;: oeen aVr%Sented'" "°"'^ ''"^^'"^ * 
 The true way to look at this case is not to fix attention upon 
 the amount of money paid out, but to ask, What did the as- 
 
 Z^T.u T""^^^^^'^^ °^*^^ representation? The answer 
 « that he bought the mortgage. If, then, you cut the mort- 
 
 fxtenti'''''' '"^^^ *° $16,000 you damage, him to that 
 
 In connection with this case Mr. Bigelow says- 
 
 all other estoppelKSfieaHv- it iftp« ilTh®"''''^ "^ ^?'] ^ °P«fat«) »ke 
 
 S,r Frederick Pollock in his work on Torts ■ expresses the 
 opinion that, with reference to "certain cases of fraud 
 the Court of Chancery . . . wonld award peounia'ry'con,: 
 pensat on, not in the name of damages, indeed, but by way of 
 resutution or 'making the representation good,' " and adds: 
 
 doubt, be effectually exc"5ded by tht i^iSfn *'°° °' *^** 1'°^ ^o"'**' »<> 
 out them it NrouldToSy be M^eful on"" "' '° ''*""'^' ^"* *"«° «'^^''- 
 Notwithstanding these opinions there seem to be various rea- 
 aons for beheving that the principle proceeded upon is open 
 to discussion, and, at the least, to qualification. Observe that 
 the action is really founded upon misrepresentation; and that 
 the verdict IS really in damages for that misrepresentation - 
 
 y! Zt ""f ^'^^"'^ "°^'' ^^'^^^ appearance. Why, then, 
 should the damages be assessed upon a principle diflferent from 
 that acted upon in deceit, where also the foundation is misren- 
 resentation ? The following authorities, moreover, are not con- 
 sistent with those just cited. 
 
 (1886) Seton v. Zafone* A wharfinger, believing that he 
 held certain goods, wrote a letter to a broker whose name had 
 bfl«n connected with them, for storaee 
 
 'And see Fall River v. Bufflnton 
 (1867), 97 Mass. 498. 
 » On Estoppel (5th ed.), 651. 
 18 
 
 storage rent; upon the faith of 
 
 •Pollock on Torts (5th ed.), 187. 
 *18Q. RD. 189; 19 Q. R D. 68: 66 
 L. J. Q. a 410. 
 
194 
 
 NATUHE AND EFFECT OF E8T0PPBL. 
 
 this letter the broker purchased, for a trifle, the warrants whicl> 
 the wharfinger had issued; the wharfinger then ascertained 
 that he had not the goods; and the broker sued for them. Thc^ 
 parties had fixed the damages, but the court intimated that 
 those recoverable werd probably not the value of the goods, but 
 the amount disbursed by the broker. 
 
 Lord Lyndhurst, in Hume v. Bolland^ said : 
 
 "If your situation is not altered vou cannot maintain an action. If it 
 is altered, must not the amount of damages to be recovered depend upoi»< 
 the extent to whiohit is altered? " 
 
 In Smith's Leading Cases is the following: ' 
 
 "It is suggested that the truly equitable mode of dealing with such 
 cases would De to ascertain, where practicable, the amount of actual dam-^ 
 nifioation sustained in consequence of the representation relied on, and to 
 this extent only to give relief." 
 
 In some oases other doctrine would work injustice. For ex-, 
 ample, in Re Romford^ upon the faith of certain representa- 
 tions of a company as to the validity of its debentures, money* 
 was loaned upon a deposit of some of them. The lender, in 
 suing upon the debentures, contended that, the company being 
 estopped, he was entitled to recover their face value; but he 
 was awarded the amount of his advances only. Observe that 
 if the lender had recovered more than his debt, the excess^ 
 would have gone into the borrower's pocket. But that would 
 have been inequitable, for the company, upon the facts, was 
 not estopped as against the borrower. If estoppel were a mere 
 rule of evidence, and had been' applied in this case to the ex- 
 clusion of the facts, the borrower would have unjustly got the 
 advantage of the estoppel. 
 
 Consider the following case: Shares in a company are trans- 
 ferred by forgery; the shareholder, after becoming aware of 
 the forgery, omits to notify the company ; the company pays 
 dividends to the transferee, but is not otherwise damnified; 
 afterwards the shareholder notifies the company of the forgery. 
 The legal situation, now, is this: The true owner is entitled ta. 
 have the shares restored to his name in the shareholders' reg- 
 ister;* he is entitled to future dividends; but he cannot require 
 the company to pay a second time the dividends already paid 
 
 i(1882)lCr. &M. 138. 
 
 3 8th ed. 913. Omitted from 10th ed. 
 
 i (188K) ^4 Oh. D. 85; 52 L. J. Ch. 
 720. And see Smith v. Slavin (1898), 
 69 Hun, 811; 28 N. Y. Sup|K 50a 
 
 * Unless, indeed, by his inactivity^ 
 the company has lost an opportu- 
 nity to indemnify itseif by pruueed- 
 ings against the forger. See ch. XI,. 
 sub-title "Lulling to rest." 
 
NATURE AND EFFECT OF ESTOPPEL. 195 
 
 to the assignee, for as to these he is estopped by his inaction 
 from asserting title to them.^ If, however, estoppel were a 
 matter of evidence merely, the true owner would lose not only 
 the past dividends, but the shares themselves; for his inactivity 
 while dividends were being paid, would constitute an estoppel 
 as against his title, and thus exclude all evidence of it 
 
 There is another class of cases which illustrates the necessity 
 for admission of the evidence as to the estoppel; namely, that 
 class of cases m which, although there has been a misrepresen- 
 tation and consequent estoppel, yet the misrepresentation has 
 as It were, been withdrawn bofore all the damage has occurred! 
 Evidence therefore must be given not ojily of the misrepresen- 
 tation, but of its withdrawal. The taw is clearly stated by 
 Williams, J. : j j 
 
 tat;r'fi;S,*S?t" rr? J^I^^ '^S^ t\J-^^^ ^^e represen. 
 made to you, and so far as vou lia^ n.^ «^?^? *° ^^1 representation I 
 Jjaet it../nd're.„ire y"^. Z t^o^lriAt^SfpieSi^S i^net^^iS 
 
 For example, a landlord represents that the rent is payable 
 to another person; the landlord would be bound to the extent 
 to which the tenant had paid, or become bound to pay, rent to 
 the other person, but not in respect of rent as to which the 
 tenant had not changed his position.' So if a person represent 
 to a sheriflf that he is the defendant against whom the sheriff 
 has a warrant, and is consequently arrested, he may be es- 
 topped from suing for the arrest; but the sheriff could not 
 justify the detention of such person after notice that he was 
 not in reality the defendant.* So, too, it is said that if a pat- 
 entee sells certain of his patent rights he may be estopped to 
 deny the validity of the patent in an action against him for 
 breach of agreement, but, upon the assessment of his vendee's 
 damages, he may show that, notwithstanding the patent other 
 persons have the right to manufacture and sell.» 
 
 Parties and Privies. 
 
 Further complication of the subject in hand arises from the 
 statement (above quoted) that "estoppel has no effect upon the 
 
 'Davis V. Bank of England i\9.'!**\ 
 SBing. 898. ° —%'••--;, 
 
 !* White V. Greenish (1861), U C. R 
 N. 8. 80a 
 »Ibid. 
 
 N, 
 
 04. 
 
 * Bunston V. raterson (1857), 'i 0. ft 
 
 S. 495; 8f ' ' 
 
 Jackson 
 
 i (1870), 120 Mas& 
 
196 
 
 NATDEE AND EFFECT OF ESTOPPEL. 
 
 real nature of the transaction." Suppose that I purchase a 
 horse from a jnau who has u title while the true owner stands 
 by. In such case, as is well known, the true owner is estopped 
 from setting up his title as against me. y 
 
 I. Suppose, however, that the true owner subsequently sells 
 the horse to a third person, is that person estopped as against 
 me? 
 
 II. Or suppose that subsequently a creditor of the true owner 
 obtains a judgment against him, and the sheriff seizes and sells > 
 the horse under that judgment, is the purchaser estopped as 
 against me? 
 
 III. Or suppose that after my purchase I resell, is the true 
 owner estopped as against my vendee? 
 
 I. Does Estoppel Bind Pueohasers feom the Estoppel-denibe? 
 
 In considering the first two of these cases a distinction must, 
 at the outset, be made. The conduct of the true owner may 
 be sach as to justify the inference that he was a party to the 
 sale. In such case no question of estoppel arises — the pur- 
 chaser, of course, takes a good title. The cases we have to 
 deal with are those in which no such inference can be made — 
 cases in which the purchaser has no title, and can defend his 
 possession upon the estoppel only. 
 
 Parties and Privies. — The rule usually accepted for the cases 
 in hand is that " estoppels are binding upon parties and priv- 
 ies." ^ If this be a sufficient rule we have only to inquire, "Who 
 are privies? and the answer to this question being (as one 
 •would think) simple enough, there ought to be no difficulty in 
 solving all such questions. Let us see. 
 
 Lord Mansfield, in the leading case of Taylor v. Needham^ 
 
 said : 
 
 " He who takes an estate under a deed is privy in estate, and therefore 
 never can be in a better situation than he from whom he takes it." 
 
 And in later times Mr. Tiedeman declares that estoppel 
 
 " can only operate upon, and be claimed by, parties to the transaction in 
 which the misrepresentation or concealment was made and their privies, 
 whether by blood, by estate or by contract" • 
 
 iSee Richards v. Johnston (1859), The text-writers proceed in the same 
 4 H, & N, 668: 28 L= J-. Es= 8^9: Rich- way. Bigelow on Estcnnel (5th ed 
 
 ards v. Jenkins (1887), Id Q. B. D. 451; 
 50 L. J. Q. B. 298; Welland v. Hath- 
 away (1832), 8 Wend. (N. Y.) 480; 
 Union v. Wilmot (1883). 94 N. Y. 83a 
 
 oh. 8, S12, 597; Everest & Strode on 
 
 Estoppel, 62. 
 « (1810) 2 Taunt 28a 
 « On Equity Jurisp., § 1 14. 
 
NATDKE AND EFFECT OF ESTOPPEL. 
 
 197 
 
 ^ Mr. Bigelow, however, in his work on Estoppel says that 
 
 tt does not in modern times constitute a case of nrivitv for thn nnrn^B^a 
 of estoppel, to show that one man holds a co'veyaKSm Loth??^ 
 And again he says : ' 
 
 nf 'l5r„?^*'°*^J *° ^^f position heretofore taken concerning the relation 
 tl^l'^^°'' ^"'i '^'■^'i**^ '° conveyances of real estate, it would seJm that 
 
 Sd"sti^i?si ^si;s^' '^^ '^'^' -' '^ ^ SiS to-iiJe 
 
 The careful wording of Mr. Bigelow's illustration implies that 
 If the second purchaser had notice, or had not given value he 
 would not «be entitled to the goods as against the first pur- 
 chaser." But this result is contrary to the principle illustrated, 
 which puts all cases (notice or value or none) in the same cate- 
 gory, and says, generally, that «a purchaser of goods is not a 
 privy in estate or otherwise with his vendor." 
 
 Mr. Hermann exhibits the same incongruity— persons who 
 claim under an estoppel-denier are privies, and therefore es- 
 topped, but not if they had no notice. At section 793 of his 
 work on Estoppel he says: 
 
 ««f!!.^"„i?'^°fP^\^™^™*'f^ *°.^*8 conclusive effect parties and privies, and 
 estops all w&o cla.m under the person originally birred: Thurthe buver 
 of a chattel was held to be within the bar of an estoppel inn^iaerowJnl 
 out of the acts and declarations of the vendor AndXe rSK tKmf 
 
 nf t'h?-*"? *° ^V^^^ '"J*"'^' ^"* *« *»>« interest Conferred by In estoS 
 «.^ho ^ description is, where real estate is involved, essentially eauiSSe 
 subsequent purchasers will not be bound without notice!" e^u'taoie, 
 
 The contradiction is here shaded by the interposition of an 
 
 alleged diflference between personalty and realty. But it is 
 
 s'lrely impossible to say that "an estoppel of this description 
 
 IS, where real estate is 'nvolved, essentially equitable," and that 
 
 It has some other character when personalty is in question. To 
 
 the same effect as these text-writers are some of the cases in 
 
 which it is boldly said that estoppels bind 
 
 "those in privity with him, unless purchasers for value without notice."* 
 
 1 6th ed. 846; and see p. 422. Ever- 
 est & Strode on Estoppel, p. 62, do 
 not agree with Mr. Bigelow. They 
 say: "Lord Coke classes privies 
 under the three heads: 1. Privies 
 iu bioou; 2. Privies in law; and 
 8. Privies by estate. But as regards 
 estoppel, the same doctrine applies 
 to each class, viz., that one who 
 
 claims through another is, to the ex- 
 tent of his claim, subject, and able 
 to take advantage of all estoppels 
 affecting the person through whom 
 he claims." 
 »Id., pt609. 
 
 'Thistle V. Buford (1872), 50 Ma 
 
 278. 
 
o 
 
 108 
 
 KATUBK AND EFFECT OF ESTOPPEL. 
 
 These quotations leave the investigator in much perplexity. 
 Estoppels bind parties and privies ; a privy formerly was one 
 who took an estate from another; but in modern times, and 
 with reference to estoppel, one who takes an estate from an- 
 other is or is not in privity according as he is or is not a pur- 
 chaser for value without notice. This has not a very satisfactory 
 or convincing appearance. It seems tc indicate that any ques- 
 tion of privity may be dispensed with ; and that attention should 
 be directed to " purchaser for value without notice." 
 
 The familiar attempt to make old rules fit new lines of cases 
 is here . ery apparent. Estoppel by misrepresentation was not 
 thought of when the rule as to parties and privies was formu- 
 lated, and it does not suit such sort of estoppel. For confirma- 
 tior of this statement one has not vainly to endeavor to apply 
 it to estoppel by misrepresentation, but merely to read it. It 
 was as follows:* 
 
 "Every estoppel ought to be reeiprocaJ, that is, to bind both parties; anr^ 
 tkia is the reason that regularly a stranger chall neither take advantage of 
 or be bound by the estoppel; privies in blood, as the heir; privies in estate, 
 as the feofifee, lessee, etc.; privies in law . . . shall be bound and takd 
 advantage of estoppels." 
 
 But estoppel by misrepresentation is essentially and necessarily 
 unilateral (cannot be reciprocal);' and we thus see that the 
 reason why estoppels should bind parties and privies t.oes not 
 and cannot apply to estoppel by misrepresentation.' 
 
 If for any reason, then, we are to apply the rule, that es- 
 toppels bind parties and privies, to estoppel by misrepresenta- 
 tion, it will be to solve the useless question " Who are privies? " 
 rather than, by knowing the answer to that question, therefrom 
 to argue thei existence of estoppel. For no one would guess 
 that while a purchaser without value, or with notice, is in 
 privity with his vendor, yet a purchaser for value and without 
 
 1 Coke on Lit, L. 8, o. 13, § 667. 
 And see Com. Dig., Estop^ R ; 10 Vin. 
 Ab.43S. 
 
 3 The old language, however, — "es- 
 toppels mustordinarily be mutual" — 
 is still _ sometimes employed with 
 reference to estoppel by roisrepresen- 
 f.nfjnti. Bee Hermann qq TCatAnnol. 
 ^ 79i); Wright ▼. Hazen (18S3), 24 Vt. 
 
 14a 
 
 *The rule as to parties and privies 
 
 has, with reference to estoppel by 
 judgment, been held to include, not 
 merely the actual parties to the suit 
 and their representatives, but other 
 persons in the same interest who 
 have stood by while the fight pro> 
 ceeded, ready to take advantage of 
 
 t.ha rssnlt hsd it befit! fEVOFEble tc 
 
 them. Re Lart Wilkinson v. Blades 
 (1896), 2 Cli. 788; 65 L J. Ch. 816. 
 
NATITRE AND EFFKOT OF ESTOPPEL. 
 
 199 
 
 . notico IS not, did we not see that in the former he ought to 
 
 be estopped, and in the latter he should not. In fact we are 
 
 arguing not from a rule uU privity, iU estoppel; but from uU 
 
 •estoppel, tU privity; which leaves us very much in the predica- 
 
 ment of tfie proverbial searcher for the hoe and the shovel.^ 
 
 Method of Solutio',..-The only alternative seems to be the 
 abandonment of the rule of privity as an aid to the solution of 
 the question And in truth nothing is lost by its abandonment. 
 Start from this, that only one of t'.e competing parties can, as 
 a matter of fact and law, have the title; then ask, Is there any 
 reason why it should be taken away from him? and the solu- 
 tion will come without reference to privity. 
 
 An owner stands by while I purchase hi's property; he has 
 the title yet (I have not got it); but he is estopped as against 
 me from setting it up; the true owner sells to another; is this 
 . second purchaser « bound by the estoppel ? » To this question 
 the answer may appear .^u be uncertain. Change the form of 
 ^i-'ffi ,'...' purchaser is entitled to the property? and the 
 difficulty disappears; for the mind at once reverts to a well- 
 known rule which is sufficient for the solution of the problem 
 Btdefor PrioHty.-Th&i rule is that the holder of a prior 
 equitable right has priority over the purchaser of a subsequent 
 estate (whether legal or equitable) without value, or with notice 
 ■of the equitable right, but not as against a subsequent pur- 
 chaser for value and without notice.^ 
 
 EquitaUe Hight-The first question then must be whether 
 an estoppel-asserter can be said to have an equitable right. If 
 
 » Mr. BIgelow makes this very clear 
 (on Estoppel, 6th ed., 483): "Privity 
 in estoppel, it cannot be too strongly 
 laid down, ip a liflfereftt thing from 
 privity in contract The position of 
 privity in contract is one of mutual 
 relation, as between contractor and 
 -contractee, and cannot be supported 
 without a consideration, actual or 
 •(as in deed) implied. . . . Privity 
 in estoppel, on the other hand, is 
 purely a relation of succession or 
 =aubordination of rights, and is in- 
 •consistent with consideration, or at 
 least independent of it. The heir is 
 4he type of a privity in the law of 
 
 estoppel. He is bound because he 
 takes without value. It is right 
 that he should be bound; no in- 
 justice is done him." With respect 
 the present writer suggests that 
 first ascertaining upon general prin- 
 ciples whether a third person 
 "should be bound » by the estoppel, 
 and then declaring that such third 
 person is for that reason a privy, is 
 an inverted and valueless proceed- 
 
 2 See cha XVIII, XIX, XX; and 
 Peavy v. Seigler (1897), 48 S. G 496- 
 28 S. E R. 885; Stone v. (Jeorgiii 
 (1899), 38 a K R. 861 (Ga). 
 
200 
 
 NATUBB AND EFFECT OF ESTOPPEL. 
 
 he has, then the rule just mentioned applies to his case, and' 
 questions of privity are superfluous. 
 
 And first let Us understand the distinction between the terms 
 " equitable right » and « equitable estate." Omitting the adjec> 
 tives I may say that I have a "right" to an "estate," which^ 
 implies that I have not the estate, but only a right to get it. An 
 « equitable right " then means a right to get an estate, enforce- 
 able in equity merely ; while an « equitable estate " is something- 
 already in possession, although formerly recognized only by 
 the court of chancery. For example, a mortgagee was induced 
 by fraud to release his mortgage; the mortgagor afterwards 
 made equitable mortgages of the estate, and the first mort- 
 gagee upon discovery of the fraud claimed priority over the 
 subsequent incumbrancers. In this case the first mortgagee 
 had an equitable right, as against the mortgagor, to set aside 
 the release, but, having np equi table estate or interest, he was- 
 postponed to the other mortgagees.* • 
 
 Estoppel an Equitable Right— There are many reasons whicb 
 support the assertion that an estoppel-asserter has, at the least 
 an equity or equitable right. * 
 
 1. Perusal of a subsequent chapter « will show that that which 
 is in reality estoppel has heretofore been well hidden under 
 the term « the equities." Not only can there be no objection 
 to saying that a purchaser (claiming an estoppel) has " an 
 equity" against an owner who stands by and allows his prop- 
 erty to be sold by a third party, but the term has much pro- 
 priety. It is a loose term, no donbt; but what we mean is that 
 estoppel is sufficiently of the nature of "an equity" to be so 
 classed when considering ai qu stion of priorities. In other 
 words, if one were formulating a law of priorities, he would 
 not distinguish between a right by estoppel and other rights 
 known as "equities," and say that while "an equity" under 
 certain circumstances might give priority, yet that a right by 
 estoppel was not sufficiently of "an equity" to have that 
 effect. 
 
 2. The words "an equity "are frequently used to express, 
 the right, to an estoppel. For example, in the House of Lord* 
 there is the following: 
 
 "To raias an a/mifo' «» a,.^u - it.- . . 
 
 or existing facta, and not mere intention." » ''i"cwiui,«i,iuiF 
 
 * Eyre v. Burmester (1864), 4 D., J. 
 & a 485- 10 H. L. C. 90. 
 
 2Ch. XVIII. 
 
 » Jorden v. Money (1854), 5 H. L. C. 
 
NATURE AND EFFECT OF ESTOPPEL. gQl 
 
 know it to be false." '^''i"^«^°'^a"on good, if he knew or was bound to 
 
 A \ \^^'t'*" ^^"« q"««^'«n that if I contract to sell land to 
 
 Lfl^^l ^"^ "^"'^^ " '^'^"'' "^"- ^^ "»'S^^ ^^^'^ be asserted 
 that he has acquired an equitable estate -at all events sub 
 modo, and as between the parties: 
 
 medS'Jue'^f^irth; SwrerlhtpVtTe S«7'^ * P"^-°^»«^ ^^ *be im- 
 that contract." » ownersnip of the estate is, in equity, transferred by 
 
 wi;h allThrriaf ofMr'^Smll/'utft^e^ '? k^^""'^' '"'-'ed 
 
 purchase, the PurchLi becomes fnennlf^fh'P'^ *^*'' ^/ t contract of 
 This rule applfes only as K^S tL n1,rHLV'V'^"".°^ ^^^ property, 
 be extendecf so as to Kt thnn?pr«ff «f ?K*° the contract, and cannot 
 forthepurchas?ofan equtabfeSewo^M^^^ ^^ ' could, a contract 
 ance. before the contiTt is caiSed InTo i J^ff equivalent to a convey- 
 again^t a stranger to the'^cL^cZlilr efufttst^^^^^^^^ 
 
 Suppose, then, that instead of myself contracting to sell I 
 stand by while a third person (pretending to be the owner) 
 sells and conveys the property. Has the purchaser «an equitv '^ 
 against me, or is the only fit language «1 am estopped?" Ob- 
 serve the principle upon which the court of equity would oriff- 
 mally have proceeded against me; 
 
 a c Jrtof e'qS^ eSnV'^^^^ «'^*"' «°/«r as the powers of 
 
 shall be com^peKdS make theTgl,^! representation were true, and 
 
 185; 23 L. J. Ch. 865. See also Higgs 
 V. Northern (1869J, I* R 4 Ex. 887; 
 as L. J. Ex. 233; Citizens v. First 
 National (1873). L. R 6 H. L. 352. 43 
 L. J. Ch. 269; Re Romford (1883), 24 
 Cb. D. 85; 52 L. J. Ch. 729; Chad- 
 wick V. Manning (1896), A. C. 231; 
 65 L. J. P. C. 4a 
 15th ed., p. 557. 
 
 2 Evans v. Bicknell (1801), 6 Ves. 
 18a And see Keate v. Phillips (1881) 
 18 Ch. D. 560; 50 L. J. Ch. 664. 
 
 'Per Lord Westbury in Rose v. 
 Watson (1864), 10 a L Q 678; 88 T^ 
 J. Ch. 385. And see Lysaght v. Ed- 
 wards (1876), 2 Ch. D. 499; 43 L. J. 
 Ch. 554; Tailby v. Official Receiver 
 (1888), 13 App. Cas. 523; 58 L. J. Q. 
 
 B. 75; White v. Southend Hotel Ca 
 (1897), 1 Ch. 767; 68 L. J. Ch. 387. 
 
 * Per Lord Cottenham in Tasker v. 
 Snaall (1837), 3 My. & Cr. 70; 7 L. J. 
 Ch. 19. And see Re Carpenter (1854), 
 Kay, 418; Re Cuming (1869), L. R. 
 6 Ch. 72; Re Colling (1886), 33 Ch. D. 
 833; 55 L. J. Ch 486; Canadian P. 
 Ry. V. Burnett (1889), 5 Man. 426; 
 Hill V. Cumberland (1868), 59 Pa. St. 
 474. 
 
 »Per Lord Selborne in Citizens' 
 Bank v. First Nat. Bank (1873), I* R. 
 •^ ix. xj. ow; ta xj. u". ud. *Otf. And 
 see Favill v. Roberts (1855), 50 N. Y. 
 222; and the discussion of the sub- 
 ject in ch. XVI. 
 
202 
 
 NATUBE AND EFFECT OF ESTOPPEL. 
 
 Note now the very close parallel between contract and es- 
 toppel. In contract, equity regards the estate as " transferred 
 by that contract." In estoppel, the representation is treated 
 4is if it were true — that is. as if the estate had been tran^ 
 ferred. In both cases the doctrines are peculiar to courts of 
 equity. In contract, the estate psisses — sub modo no doubt, 
 and only as between the parties. In estoppel, tLb same thing 
 may be said. In contract, a conveyance in accordance with its 
 terms may be enforced. In estoppel, the by-stander shall be 
 •compelled to make the misrepresentation good — that is, to ex- 
 ecute a conveyance. In neither is there an actual transfer. In 
 both a transfer will be directed. In view of all this, is it pos- 
 sible to say that contract will give rise to " an equity," hut 
 that estoppel will not? or that the rights acquired by estoppel 
 Are less complete than those acquired by contract? 
 
 If there is to be a distinction between contract and estoppel 
 in this respect, the results should be reversed. In contract, 
 there is no pretense that the estate has passed,— there is a mere 
 agreement to pass it; and it is the court, and not the parties, 
 that proclaims that it has already passed. In estoppel, on the 
 other hand, the parties to the transaction intend and stipulate 
 tor the passing of the estate — the purchaser believes that the 
 transaction is completed and closed, that he has in fact and in 
 reality got the estate; and the by-stander is to be " treated as 
 df the representation were true." There is, therefore, in estop- 
 pel stronger reason than there is in contract why the court 
 should declare the existence of an equity to the thing pur- 
 •chased. 
 
 The Question Answered.— We may take it, then, that the 
 effect of an estoppel is to give the estoppel-asserter "an 
 equity," and further, that it passes the estate, but suh modo 
 only and merely between the parties. And v;e are now in a 
 position to make reply to our question : "An owner stands by 
 while I purchase his property; he has the title yet (I have not 
 got it); but he is estopped as against me from setting it up; 
 the true owner sells to another; is this second purchaser 
 * bound by the estoppel ? ' " 
 
 "We reply that the data are insuflacient and that the question 
 is erroneous. For explanation we add: The first purchaser 
 has an equity against the vendor capable of enforcement against 
 
NATUBE AND EFFECT OF ESTOPPEL. 
 
 203 
 
 liira Whether that equity is enforceable against the second 
 purchaser (who has the title) depends not upon any question 
 of estoppel binding parties and privies, but upon this merely 
 (and according to familiar rule): Was the second a purchaser 
 for value without notice of the prior equity ? 
 
 Mr. Bigelow's statement, then, that «a purchaser of goods 
 18 not a privy m estoppel or otherwise with his vendor, so as 
 to be affected by an estoppel in pais resting upon the vendor 
 in respect of the goods," is not correct -that is, if " privity" 
 18 to determine priority. Nor is the affirmative of that propo- 
 sihon correct. For the truth is that the purchaser is, or is not, 
 affected by his vendor's estoppel according to circumstances. 
 
 AppUcaiion8.-Let us now apply our principles and method 
 to the case of Keate v. Phillip,? Its somewhat complicated 
 Jacts may be (sufficiently for our purposes) summarized as fol- 
 lows: The owner of an equity of redemption stood by while a 
 confederate, claiming as tenant under a fictitious lease, mort- 
 gaged his apparent estate to one who made no inquiry into the 
 title; the confederate afterwards got in the legal title (he is 
 now estopped as against the mortgagee, or in other ^ ords the 
 mortgagee has an equity against him), and subsequently he 
 (the confederate) deposited the deeds with a banker (who had 
 no notice of the prior mortgage) as security for a loan. Ob- 
 serve that the competing claims (of the mortgagee and banker) 
 ^re both equitable; that if the equities (t. .., the merits) are 
 •equal, the first in time should prevail; that the mortgage was 
 •only created, if at all, by estoppel of the owner of the land; 
 
 »Per Lord Henley in Stanhope v. 18 Utah, 258; 55 Pac. R 372 mav be 
 
 ^rneya761).3Eden.85. And see cited for th; proposiUonil^t^u^. 
 
 ^fs?^ TnV "^"J^^^f ^'^i^' ^^ chasers from an estoppel-denier will 
 
 ^T^« «^Vi. «r, °°''^ V. Bowen be bound even without notice of the 
 
 <1«.5 80111.541. estoppel. Possession of the estoppel- 
 
 ^v^h ^l^^^^'^^^l^'"'^ ^^^"^ '^^en thought to constitute no. 
 .. ...^.„ ,^.. .^^ ^3Q. j3jiQj.j. jj^^. jj^j. ^jjg judgment is not out 
 
 hard V. Sutton (1878). 68 Me. 575. See upon that ground. ^ 
 
 also Tied. Real Prop., J? 731; 3 Wash. »(1881) 18 Ch. D. 660; 50 L. J. Ch. 
 Real Prop. 91. Clark v. Kirby (I898X 664. . «" i* J. i^h. 
 
204 
 
 NATURE AND EFFECT OF ESTOPPEL. 
 
 and that something may be said in depreciation of the mort- 
 gagee's merits, for he made no inquiry as to the title. How^ 
 then, are the rival 'aims of the mortgagee and banker to bfr 
 settled ? 
 
 Observe that the mortgagee (the first in time) has an equity ' 
 merely as against the true owner (he has no estate, for he claims, 
 through one who had none); and that the banker has an equi- , 
 table estate. We say then that the banker has the estate in 
 dispute; and (following our method) we ask, Is there any rea- 
 son for taking it from hira ? And none can be assigned, for his 
 merits are at least equal to those of the mortgagee (probably 
 superior, for the mortgagee took no precaution and made no 
 inquiry as to title) — he is a purchaser of an estate for value 
 without notice of an equity. He is therefore entitled to pri- 
 ority. 
 
 This seems to be simple enough. But when the word "es- 
 toppel " instead of « an equity " is used, and when the other 
 question is put : Whether the second purchaser or the estate is 
 "bound by the estoppel?" confusion ensues. For example, in . 
 the case in hand we have the following in the judgment of 
 Bacon, V. C. : 
 
 " It cannot be said that because a man commits a misdemeanor with re- 
 lation to a certain estate that the estate is thereby forever bound. No case^ 
 has been quoted that goes anything like that length. The equitable right 
 and the equitable estate a:« distinguished in some of the cases which have 
 been inentioned. Stanhope y Earl Vernev (2 Eden, 81), an old case, but a 
 case decided by one of the most eminent judges that this jurisdiction has 
 possessed (Lord Chancellor Northington, in June. 1761), clearly makes a dis- 
 tinction between an equitable right, a personal obligation, and a right which 
 attactiea itself to the land, or to the substance of the thing which is the 
 subject of the contract or transaction. I have heard no such case men- 
 tioned." 
 
 " Admitting, as I have no reason to doubt, that Dimsdale was a male- 
 factor, and that he had committed a gross fraud and made use of Tait a» 
 an Instrument, and that he had imposed upon the plaintiff and upon Phil- 
 lips, what of that? How does that touch the estate f It would be miscon- 
 duct for which he could be punished, and a wrong which could be redressed 
 against him personally; but I am at a loss to see how it touches the estate. 
 This brings it close to the doctrine of estoppel which has been argued at 
 such length and with great ability." 
 
 "There are many observations in the cases that have been cited to me, 
 some of them little better than commonplaces, others highly interesting, 
 most of them curious and entitled to great attention; hut I have never 
 heard that, because a man commits a personal wrong, that he therefore de- 
 prives himself of all right of dealing with property which is his in favor of 
 a subsequent purchaser. Now that is the whole case before me. . . . 
 It cannot be said that there is a representation which so deprives the owner 
 of the equity of redemption, that is all that Dimsdale had, as he cannot 
 
 afterwards deal with thut fnr valno t.n n novann tii'hn vwiuo li<«M .»> t,,^^^ l..'.^ 
 
 money on the security of it." i 
 
 1 Keate v, Phillips (1881X 18 Ch. D. 578; 50 L. J. Ch. 669. 
 
NATCBE AND EFFECT OF ESTOPPEL. 
 
 206 
 
 The last few words are significant. They partially reveal 
 the real p-'nt of the case, and qualify all that has been said. 
 If a man "comnaits a personal wrong" (such as tliat in hand) 
 <ioes he "deprive himself of all right of dealing with the prop! 
 «rty . . . in favor of a subsequent purchaser?" And the 
 answer is not a categorical negative, as the judgment assumes, 
 but this: that it depends upon circumstances — depends upon 
 whether the purchaser is or is not one fn -,lue without! notice. 
 Suppose that the subsequent purchas jr, in ti.., case in hand, had 
 known all the facts — had known th, .fc r'-e tru. owner, through 
 a confederate, had induced the first u--;.tgacr , to lend money 
 upon a fictitious lease of the property,'tu i knew therefore that 
 the first mortgagee had an equity against the true o.vner — 
 It would have been impossible for him (the subsequent pur- 
 chaser) to obtain priority. In such case it might be said (in 
 opposition to the conclusion arrived at in the judgment) that 
 the true owner had deprived « himself of all right of dealing 
 with the property; " but it would, of course, be better to say 
 that the purchaser of a subsequent estate has no priority over 
 a prior equity of which he has notice. 
 
 Reference to another case, in which it was said that estoppel 
 did operate as against those claiming under the estoppel-denier, 
 will be useful. A land-owner handed to a lady, as security for 
 a loan, a package which he untruly represented to contain the 
 title-deeds; afterwards he deposited the deeds with another 
 person who had no notice of the first transaction. In such a 
 case Lord Sel borne said:^ 
 
 "As between Edward Mucklestone [the land-ownerl, who sijrned that let. 
 ter. and the representative of Mrs. Shkw ft he package CldSf to whorn k 
 wasaddre^ed Ihave no hesitation whatever in hSlding that wlateve, 
 P«nnv*h'nu'^t;° Mi-s. Shaw's hands, a good equitSe^secSity on the 
 teT^'l"'' estate was created as between those persons, which Edward 
 Mucklestone and those claimi,ig under him would be estopped fromat anv 
 JLTh^IS^kT ^«P"**°K- I^'i" e^en go to the length of saving ?hat^ 
 W iffiiHf **^°* ^° K'^^y '^^^^^ '«'««"g to **»« Pennybank estate at all. 
 been ^fflot^J.J'"" "^ ^"'*"« *° ^ «°' «"" *»»« ^ame security would have 
 
 The contest here (as Lord Selborne puts it) is between two 
 ■equitable estates. Applying the ordinary principles of prior- 
 
 1 Dixon V. Mucklestone (1872), L. R De G. & J. 1 ; 27 L. J. Ch. 220: Hunt v. 
 
 ^ Ch. 169; 43 L. J. Ch. 210. See also Elmes riSfiO^. 2 D P *: -T kts. an r ' 
 
 Sharp V. Foy (1868), L. R 4 Ch. 85. J. Ch. 255; Ee Ingham (1893),' 1 01." 
 
 The facts cannot be understood with- 852; 63 L. J. Ch. 100; Colyer v. Finch 
 
 out reference to 19 L. T. N. S. 541. (1856), 5 H. L. a 905; 36 I* J. Ch. 65. 
 <;orapare Roberts v. Croft (1857), 2 
 
206 
 
 KATUBS AND BFFKOT OF ESTOPPEL. 
 
 ity, we would say that the case was simple — the first in time^, 
 has of course priority. Introducing estoppel, we have to say 
 that the depositor of the deeds was estopped in favor of the- 
 first purchaser, and (in opposition to other dioia) that " those^ 
 claiming under him " are likewise estopped. 
 
 Comparing the two cases, then, we see that it is impossible 
 to aifirm, generally, that estoppel does or does not4iepriveuth& 
 estoppel-denier of " the right of dealing with the property ; " or 
 that "those claiming under him" are bound by his estoppel. 
 Everything depends upon (1) whether the competitors are equal 
 in position with reference to the estate, and (2) whether the 
 second purchaser gave value or had notice. In fact it becomes 
 apparent that under the word "estoppel" we are concealing 
 "an equity;" and that when we use that term, and apply the 
 ordinary principles, all difficulty disappears. 
 
 An Equity or an Equitable i^tate.— 'Fov the sake of clear^ 
 ness in the preceding exposition, estoppel has been treated as- 
 equivalent to "an equity," merely; but there is much to be 
 said in favor of the view that estoppel by misrepresentation 
 may frequently pass an estate. The point is somewhat outside 
 the scope of the present work and can be touched upon but. 
 slightly. The main objection to such view is that some sort 
 of conveyance is essentially necessary for the transfer of land. 
 But there are several answers to that: 
 
 1. Estoppel by deed is usually thought to pass an estate, al- 
 though the very point is that the deed itself does not convey it.* 
 " Inurement " is the word which seems to help us over the diffi- 
 culty— the title will inure 
 
 "by direct operation of law with the same eflfeot to all intents and pur- 
 poses as if such estate had originally passed by the dtt '." * 
 
 2. In Smith's Leading Cases it is strongly maintained that 
 covenants in a deed run with the land, although the title passes, 
 not by the deed but by estoppel.' 
 
 1" Estoppels which run with the 
 land, or work thereon, are no mere 
 conclusions; they pass estates and 
 constitute title; they are muniments 
 of title, assuring it to the purchaser." 
 Favil V. Roberts (1855), 50 N. Y. 28?, 
 
 ^Bawle on Covenants for Titia 
 (5th ed.), g 348 (citing s cloud of 
 cases) ; Kerr on Real Property, § 2375 ; 
 Haupin on Marketable Titles, g 218; 
 
 Am. & Eng. Ency. (2d ed.), vol. 11^ 
 p. 418, n. 1; Boulton v. Hamilton 
 (1 .4), 15 U, O. C. P. 185. There i» 
 legislation in some of the states upon 
 the subjfi '■. See Am. * Eng. Enoy» 
 (2d ed.), vol. 11, p. 419. 
 
 IHaa nnfsB txt '■Inanntkr'a Pnaa /infK 
 -X ^...^l. 
 
 ed.), vol. 1, p. 58. And see Trust & 
 LoanCa v. Rattan (1877), I a CCanw 
 584 
 
NATUKE AND EFFECT OF ESTOPPEL. 
 
 20T 
 
 3. Kights in land may be acquired by dedication,' and so with- 
 out conveyance. 
 
 4. A « parliamentary title " is obtained by protracted adverse^ 
 possession without conveyance. 
 
 5. A deposit of title deeds creates an equitable estate, and 
 not a right merely.* 
 
 6. Eecovery in trover and satisfaction of the judgment passes 
 title to goods without conveyance. 
 
 7. The United States Supreme Court has held that a title rest- 
 ing upon estoppel by misrepresentation is sufficient to support 
 an action of ejectment.* And in a later case the same court, after 
 referring to the effect of estoppel by deed as a transfer of the 
 estate, said: 
 
 "Why may not a like transfer be held to have been made in this case? 
 ihe reason given for the rule of inurement and estoppel by virtue of con- 
 veyances IS that It avoids circuity of action. Does not the same consider- 
 ation apply with equal force in case of estoppel in paiaf Why is it 
 necereary to go ?nto equity in one case, and not in the other ? It has never 
 been held that the statute of frauds applies to cases of inurement, and it 
 has b^n conceded that it does not affect cases of dedication. Where is. 
 the difference m principle in this respect between those cases and the one 
 before us ? ' 
 
 Whatever difference there may be as to the usual effect of 
 estoppel by deed passing a subsequently acquired estate,* it ap- 
 pears to be conceded that in the case of leases estoppel does 
 pass the estate.' The explanation of chis is said to be the fact 
 of the possession of the lessee; possession being "notice of an 
 interest, the nature or extent of which a purchaser is bound to 
 ascertain."* But this reasoning is inverted, for it is this: Be- 
 cause possession gives notice, therefore a lease passes an estate 
 by estoppel; and it is a rule, therefore, for finding out, upon 
 consideration of the rights of the parties, when the estate 
 
 »Key8 V. Williams (1838), 8 Y. & 
 
 C. Ex. 65; Hockley v. Bantock (1826), 
 1 Russ. 141. Such a mortgage may 
 be foreclosed. James v. James (1873), 
 L. R 16 Eq. 153; 43 L. J. Ch. 886; 
 Backhouse v. Charlton (1878), 8 Ch, 
 
 D. 444; Lees v. Fisher (1883), 22 Ch. 
 
 2 Stoddard v. Chambers (1844), 48 
 U. 8. 816. 
 
 » Oiokerson v. Colgrove (1879). 100 
 U. 8. 688. And see Kirk v. Harail- 
 ton (1880). 102 U. 8. 68; Cleveland v, 
 Cleveland (1899), 93 Fed. R. 128. 
 
 *See d? -oussion in Bigelow on Es- 
 toppel (P h pd.), 384 ff. ; Ra wle on Cov- 
 enants ; .>r Title (4th ed.), 404 ff. ; Boul- 
 ter V. Uamiltcn (1864), 15 U. C. C. P. 
 125; Featherstone v. McDonnell 
 (1865), id. 162; Baxter v. Bradbury 
 (1841), 20 Me. 200; Bank of Utica v. 
 Mersereau (1848), 8 Barb. (N. Y.) 628. 
 
 » Bigelow on Estoppel (5th ed.), 420; 
 Trevivian v. Lawrence (1706), 1 Salk. 
 276. 
 
 <* Bigelow on Estoppel (5th ad,), 4S1. 
 
208 
 
 NATURE AND EFFECT OF ESTOPPEL. 
 
 passes; instead of one by which to ascertain the rights of the 
 parties. 
 
 Probably upon close investigation it will be found that the 
 difference between estoppel by misrepresentation and estoppel 
 by deed is to be found merely in the fact that in the latter the 
 subsequent purchasers have more frequently notice of the es- 
 toppel than in the former; and it has become usual, therefore, 
 to say in the one case that the purchasers are bound, and in 
 the other that they are not. 
 
 It may be found too that in some cases "an equity" may 
 arise by estoppel and sometimes " an equitable estate." And it 
 is hardly necessary to add that where estoppel has the effect 
 of passing an estate, the same rules will apply to contracts for 
 priority as in other cases in which estates are by other means 
 transferred. 
 
 Effect Tinder the Faqtora and Sale of Goods J c^.— These 
 statutes do not proceed upon any of the lines which have been 
 discussed. They provide that under certain circumstances of 
 ostensible ownership and ostensible agency an unauthorized 
 disposition of goods is to have the same effect "as if such per- 
 son were the owner of the goods," or " as if he were expressly 
 authorized by the owner of the goods to make the same." ' The 
 effect of these provisions is not only to estop the true owner 
 from setting up his title as against an innocent purchaser, but 
 to pass the legal title to the purchaser. In such cases a subse- 
 quent purchaser from the true owner, even if he had no notice 
 of the prior disposition, would have no claim to the goods; for 
 he has not, as in cases outside the statute," the legal or in fact 
 any title to them. 
 
 II. Does Estoppel Bind Creditors of the Estoppbl-denier ? 
 
 The solution above offered cannot, unfortunatelj'^, be said to 
 be quite in harmony with the eases with which we have now 
 to deal involving the following question: Suppose thnt the 
 owner has become estopped (by standing by while his property 
 is sold by another) from setting up his title as against the pur- 
 
 5 Factors Aot, 52 & 53 Vic. (Imp.), 57 Via (Imp.), oh. 71, g 35 (1); 59 Via 
 ch. 45, g§ 8 (1), 7, 8; Rev. St Ont., ch. (Man.), ch. 25, § 84 (1). 
 150i §§ 5, 11 ; Sale of Goods Act, 56 & 
 
NATUKE AND EFFECT OF ESTOPPEL. 
 
 209 
 
 iTl' . i ^'^'^^''^^ ^J^taiDs judgment against the owner; 
 
 and that the sher^ sells the property under execution against 
 
 him,- 18 the sherjflfs purchaser of the owner's interest likewise 
 «stopped as against the first purchaser ? 
 
 _ Privity.-- Working along the line of pnvity we would find 
 It hard to give an answer, and might possibly proceed as in the 
 oases already considered; that is, ascertain upon general prin- 
 ciples who ought to have priority, and then, in accordance with 
 the conclusion so arrived at, declare that the sheriff's purchaser 
 was, or was not, in privity with the vendor, and so bound bv 
 the estoppel. ^ 
 
 For the existence of privity in such a case (if we were to in- 
 vestigate this first) one might say that a purchaser at a sheriff's 
 sale gets that which the debtor Lad, subject to all equities of 
 «very sort; that he can be in no better position than the debtor- 
 that privity of estate exists, not only when the grantor himself 
 conveys the estate, but also when under legal authority it is 
 conveyed by some one else for him : i that therefore the sheriff's 
 purchaser is in privity with the debtor; and that he is for that 
 reason bound by the estoppel which affected him whose estate 
 be has acquired. Plainly, if we are going to come to the conclu- 
 sion that the sheriff's purchaser is estopped, and argue that he 
 IS so because of his privity, we can make somcohing of a case » 
 JVo Frtmty.- Against the existence of privitv in such a case 
 (If we are going to say that the sheriff's purchaser is not in 
 privity with the vendor, and consequently is not estopped) we 
 may reason somewhat in this fashion: 
 
 the sheriff to seize the Roods of the deBtnr Tif; »L-i« • ^ -T* '^'''ects 
 
 ti^i'^is:t^^i''ii?&^^^^^^^ a'4 sKi^go^snrth^^ 
 
 oebtor or not ? « If t&e execution creditor could for this purple S iid 
 
 i"He would have been estopped 
 from setting up his own fraud; and 
 as he would have been estopped, his 
 trustee in bankruptcy, who is suing 
 upon the relation between him and 
 the defendant, is just as much es- 
 topped as he was." Per Brett, Ls J., 
 in Harris v. Truman (1883), 9 Q. B. D. 
 3t4; 6i L. J, Q. B. 838. And see Re 
 South Essex Estuary Ca (1871), L. R. 
 11 Eq. 187; 40 1* J. Ch. 168; Re Wheal 
 Unity Ca (1880), 15 Ch. D. 18; Bloom- 
 14 
 
 enthal v. Ford (1§97), A. C. 156: 66 
 L. J. Ch.358; Waohusett, etc. v. Sioux 
 City, etc. (1894), 63 Fed. R. 866, 871. 
 
 * Parker -V. Crittenden (1870), 87 
 Conn. 148; International Bank v. 
 Bowen (1875), 80 HI, 641. 
 
 'Per Woodward, J., Water's Ap. 
 peal (1860)^ 85 Pa. SL 53<!, 
 
 * Per Martin, R, Richards v. Johns- 
 ton (1859), 4 H. & N. 664; 38 L. J. Ex. 
 823, 
 
at% 
 
 ^A;fUIUi Ata> WWJiffS OV 9ST0PPBI« 
 
 to olaini thvough, and uvjieTi ^ execution debtor, so as to b^ In pri vitr 
 with him, he might be estopped. But I do not think that he can be said 
 so to clMm; be dabms thrasgk. aad Imt. Hie law, a« agaiaat kb* enw pu i iiift 
 debtpr. 4«d not trough, and under, him." >. 
 
 Solation of the question in hand, bj a discussion of the ex- 
 istenQQ of pririty, does not appear to promise great suoces*, , 
 
 The Cases. — Distinguishing among the authorities whicht 
 proceed largely upon that line, Ave find that in England it is. 
 thought that there is no privity and no estoppel. In the formei" 
 of the cases cite4 in the notes,' Martin, B., said : 
 
 " No authority has been cited to show that a judgment creditor is party; 
 or privy, to t' e act of the judgment debtor." 
 
 The iatter of the cases was one in which a bailee, being es- 
 topped to deny the title of his bailor, was held not to be upon 
 that account estopped as agaioat an execution ereditor of the- 
 bailor. Lord Esher said: 
 
 " But even then tliere would be merely an estoppel between those par> 
 ties, and such an estoppel woulJ give the claimant no real title to. or in- 
 terest in, the goods. Such aki estoppel merely prevents the party who is> 
 estopped from saying, as against some other party, that the goods do not 
 belong to such other party, though in fact they do belong to him; aid it 
 clearly takes effect as between parties and privies." 
 
 So also in Nebraska * the owner of a business, by represent^ 
 ing that it belonged to his wife, induced persons to sell goods 
 to the wite and to take a xiiortgage as security. Other persons 
 (having no knowledge of the misrepresentation) sold goods to- 
 the husband, and afterwards issued attachments against him. 
 Held, that the attaching creditors were not bound by the es- 
 toppel, and consequently took priority over the mortgage. 
 
 And in New York* an owner stood by while another mort- 
 gaged his estate; afterwards the owner's interest was sold 
 under execution against him; and the purchaser under execu- 
 tion was held to be entitled. O'Brien, J., said: 
 
 "The rule that estoppel binds parties and their privies in estate and 
 blood applies only when subsequent parties represent the rights and es- 
 tate of the party who created tiie estoppel, and nothing mora It does not 
 apply to a party who, in the process of transferring real estate, has ac- 
 quired a better title than his predecessor had." 
 
 With respect, it may be said that this is reverting to the 
 hoe-and-shovel process. For the question is whether the sher- 
 iff's purchaser did acquire " a better title than his predecessor 
 
 1 Per Lord Esher, Richards v. Jen- 
 kins (18S6), 18 Q. a D. 456; 56 L. J. 
 
 
 a Richards v. Johnston (1859), 4 H. 
 & N. 664; 28 L. J. Ex. 833; Richards 
 
 v. Jenkins (1886), 18 Q. B. D. 451; 56- 
 L. J. Q. B. 293. 
 
 Neb. 427; 46 N. W. R. 471. 
 
 * Lyon V. Morgan (1894), 148 N. f; 
 609; 88 N. E. E. 961. 
 
SATDBl A»D EFFECT Of ESTOPPEL. 211 
 
 had." To ascertain that we must (following the method r 
 vogue) first ascertain whether there was privity between these 
 two persons. But the learned judge says that there was no 
 privity because a better title did pass. The answer to the 
 question in judgment is assumed in order to ascertain whether 
 there is privity, instead of ascertaining whether there is priv- 
 ity m order to answer the question in judgment. Perhaps 
 both methods are wrong. 
 
 Upon the other hand, in Connecticut, where the owner of a 
 chattel was estoppel by standing by while it was so sold, the 
 purchaser was held to be entitled to maintain replevin for it 
 as against attaching creditors of the owner.i The ground 
 taken was the existence of privity of estate between the cred- 
 itors and their debtor, the owner. 
 
 In Kentucky it is held 
 
 - ^ A Pennsylvania case* has been cited for the proposition 
 
 that no privity exists between creditor and debtor."* That 
 
 - 18 strictly accurate, but must be carefully interpreted. In the 
 case m question a vendor conveyed to a purchaser by u deed 
 
 , with general warranty and containing a receipt for the pur- 
 chase-money. The money in reality was not paid, and the 
 vendor took judgment against the purchaser for the amount 
 Other judgment creditors of the purchaser contended that the 
 vendor was estopped by his deed from asserting that the money 
 was not paid, and sought priority over his judgment. It was 
 held that they could not set up the estoppel which their debtor 
 might have set up. That seems to be clear orjough." The pur 
 chaser (possibly) might have defended the action of the ven 'or 
 upon the technical ground that although he had not paid the 
 money, yet that he held a receipt for it. But not havino- done 
 so. It IS hard to see how his other creditors, after the judgment 
 had been obtained, could get any benefit from such a point.* 
 
 1 Parker v. Crittenden (1870), 87 
 Conn. 14a And see Kern v. Day 
 (1893), 45 La. Ann= 71; 12 a R. 8. 
 
 ^Couchmau v. Maupin (1879), 78 
 Ky. 87. 
 
 'Water's Appeal (1860), 85 Pa. St 
 528. 
 
 % 
 
 * Bigelow on Estoppel (5th ed.), 84a 
 *See also Sunderlin v. Struthers 
 
 /•toa 4\ A-v -n .^. -- - 
 \xt.-Jt;, ii r-U. Ot. HI. 
 
 8 The case is one of a class to which 
 Heane v. Rogers (1829), 9 B. & C. 577; 
 7 L. J. K a 283, belongs, although 
 that is not always qui^ recognized. 
 
212 
 
 . NAT PEE AND EFFECT OF ESTOPPEL. 
 
 Ground of Error. — To the present writer it has always ap-* 
 peared that much of the error encountered \\\ the development 
 of the law is attributable to an exce,>-. of deductive reaso'^inc. 
 That method is right. enough, provided that by induction your 
 major premise has been made perfectly secure. The certainties 
 of yesterday, however, are the dubieties of to-v^ty; and i . be- 
 hooves the lawyer (perhaps of all others), by fieqaent scrutiny, 
 to keep himself free from formulas that have ceased to he 
 true. 
 
 Had we never lieard that -at v>pels bhid parties and privies, 
 there would, one would thiul, he ''ittic douht that a sheriff's 
 purchaser could occupy no bettei- po uou fcluu. that of the ex- 
 ecution debtor. But the old ro,"\:)„ rnrKiulated for totally dif- 
 ferent lines of cases, isappea'ed U~ a,a though it were a statute, 
 and other principles are overridden that it may have full sway. 
 The result, as one may iniagine, has been unsatisfactory. 
 
 Tru' Position. — The position is this: The owner who stands 
 by continues (after his estoppel) to have the legal title in the 
 property ; > nt he has no equitable interest in it, or at all events 
 no equitable right to it; upon the contrary, as between him 
 and the other party, he can claim neither property nor pos- 
 session. Subsequtintly, all his interest in the chattel is sold by 
 the sheriff; and now it is said that the sheriff's purchaser has 
 acquired not only the legal title which the debtor had, but 
 ulso the heneiicial, which he had not. 
 
 It is trite law that the sheriff can sell nothing but that which 
 the debtor has. But it is argued that the debtor had, as a 
 matter of fact, both the legal and the beneficial title; and was 
 merely under a disability, personal to himself, to set it up — 
 that, by virtue of an estoppel as against him, he was precluded 
 from asserting his rights. Translate, however, " estoppel as 
 
 See Richards v. Johnston (1859), 4 
 H. & N. 668; 28 L. J. Ex. 823. Sup- 
 pose that a defendant is sued upon 
 a contract entered into upon his be- 
 ]ialf by one who had uo authority 
 to make it, but who was held cut by 
 the defendant as having such au- 
 thority. The defendant is ncv liable 
 by estoppel. But it could hardly be 
 contended that his other creditors 
 could exclude the plaintiff from the 
 
 debtor's estate upon the ground that 
 there was in fact no agency, and 
 that br •ihe estoppel they, at all 
 events °e not bound. Such cases 
 are enl , . / distinct from those with 
 which we have been dealing, viz., 
 those which involve ownership of 
 property. See also Allan v. McTav- 
 isli "(1883), 8 Ont App. 440; Young v. 
 Ward (1898), 24 Ont App. 147. 
 
 |)W' 
 
NATUBE AND EFFECT OF E8T0PPEU 
 
 Md 
 
 ^Vjainst him" into "an equity in favor of the other party," » 
 ana the reasoning disappears. For the position then in this: 
 p a debtor has the legal title to the property, but in equity he 
 fc£.!j no right whatever to it. So stated the difficulty is gone. 
 
 Suppose that instead of standing by while the chattel was 
 being sold (as in the case under assumption) the owner had 
 contracted that he would never question the validity of the 
 sale. Here also the title would have remained in him, but he 
 Tvould be bound by his contract not to set it up, and the pur- 
 cliaser would have an equitable right to the property. If, after- 
 wards, the sheriff sold the property under execution against 
 the former owner, no beneficial interest would pass. And would 
 the law be reasonable which provided that if the owner had 
 induced the first purchaser to take the title by contracting that 
 he would never question it, the result would be entirely differ- 
 ent from what it would be if he had induced him to take the 
 same property by misrepresentation, the legal effect of which 
 is to preclude him from questioning it. 
 
 Joint and Separate Creditora of Partners.— A further diffl. 
 culty is presented by such a case as this: E. is the proprietor 
 of a business, and has certain creditors as such; to other cred- 
 itors C. has been held out as a partner ofE.; R's creditors 
 claim that the assets are separate assets of E., and the other 
 creditors claim that they are partnership assets of E. and 0. 
 
 Upon the principle of parties and privies being bound by es- 
 toppel, and creditors not being in privity with their debtors, 
 E.'s creditors have clearly the best of it, for the fact is that the 
 assets are separate. In He Rowland cfe Crankshaw^ however, 
 Lord Cran worth arrived at a contrary conclusion. But the judg- 
 ment is uninstructive, for the learned judge rested his decision 
 on the argument that 
 
 luiPl?"^®'®'* \^?. ^™**® *° ♦;!'» °*"ne o' the firm, any persons tradine 
 
 Sv &*'^*?,^'"^1^** «*y .**?** ^ *°<* C- "« *»>« Pwsbns with whom 
 they dealt, and the goods are joint goods." 
 
 They are so entitled, no doubt ; but can they so say, as against 
 
 persons who traded with E. alone upon a different representee 
 
 tion (one according to the very fact), and who knew nothing 
 
 of the misrepresentation upon which the joint creditors say that 
 
 *See, however, the Scotoh law: 
 Inglis V. Robertson (1898), A. C. 618; 
 67 L. J. P. C. 108. 
 
 «(1860)L. Rich. 484 
 
814 
 
 VATUBX AW EFrKOT OF ES'TOPFEL. 
 
 they tmded? If the joint creditors are entitled to say that they 
 acted upon a representation of partnership and that the assets 
 are therefore joint, why may not the separate creditor say 
 that he acted upon the contrary representation and that there- 
 fore the assets are separate? The doctrine of "reputed owner-^ 
 ship " would go far to settle the diflBculty in cases of bankruptcy; 
 The question then would be one of general repute, and would 
 bind everybody. But Lord Cranworth distinctly said that " the 
 question of reputed ownership has nothing to do with the case," 
 In a subsequent instance of somewhat similar character. 
 Ex parts Hayman^ a business which really belonged to a father 
 was so. carried on that nine creditors out of eighty-two "de- 
 posed that they had . . . always treated the son . . . 
 as being in partnership with the father." A separate creditor 
 of the father desired to prove against the assets of the business 
 as being the separate esti^te of the father, but he was unsuccess- 
 ful. !^igallay, L. J., rested his judgment upon the principle of 
 Re Rowland ds Crankshaw. James, L. J., also approved of 
 that case, but said that the principle of reputed ownership 
 seemed to undeplie it.' Thesiger, L. J., alone met the real 
 qumtion when he said : 
 
 " If the conaeqaence that the stook-in-trade is to be held to be joint prop- 
 erty, where there is an ostensible partnership, is merely an offshoot of tl»e 
 doctrine of repated ownership, then I can well understand that, in such a 
 case, the rights of the separate creditors should be debarred, and that they 
 should not oe entitled to prove in oonipetition with the joint creditors. 
 But if this result is supposed to flow from the doctrine of ostensible part- 
 nership »er $e, then I must say, for myself, that I cannot see why, in such 
 a case, the rights of the separate creditors should be any less than the joint 
 creditors. The law relating to ostensible partnership is founded on the 
 doctrine of estoppel; and although the doctrine of estoppel might be per- 
 fectly good as between those who contract >vith the joint creditors them- 
 selves, I do not see why, in the event of bankruptcy, that estoppel should 
 apply to the separate creditors, whose rights before bankruptcy stand very 
 much in the same position as those of the joint creditors. On the one hand 
 you have a joint creditor who had, before the bankruptcy, a right of action 
 against his particular debtor; and a right, upon obtaining judgment in that 
 action, to seize the property which was in fact separate estate. On the 
 other hand you have joint creditors who are entitled to sue the two part- 
 ners on the ground of the ostensible partnership, and who, in the event of 
 their obtaining a judgment, would be entitled to seize the same property 
 although separate estate. But when the bankruptcy arises, and there is to 
 be an administration of the estate, it would seem to be just that the sepa- 
 rate creditors should have a right against the estate which was in fact 
 separate estate, and the joint creditors should have a right against the 
 estate which was held out to them as joint estate." 
 
 This would nq doubt be just, but it is unobtainable. For 
 
 there is but one estate; and if the separate creditors are to 
 
 »(1878) 8 Ch. D. 25; 47 L. J. Bk. 54. ait will be remembered, however. 
 
 that Lord Cranworth said otherwise.. 
 
■ KATUBK AKD EFFJSOT OF ESTCffPEL. 
 
 816 
 
 take It b«cftan it is «in tact ieparate estate," and the joint 
 creditors are to take it because it * was held out to them as 
 joint estate" there will not be as much left as usual for the as- 
 wgnee. The present writer suggests that it is impossible to 
 *i^de the separate creditors, for the estate is in fact separate,* 
 and they have done nothing to preclude them from so saVing 
 Upon the other hand, the joint creditors cannot be excluded. 
 As a matter of fact they are not joint, but separate, creditors; 
 4»«ving, m addition, a right by estoppel to hold some other 
 persoo also liable if they so desire. They cannot be compelled 
 to assert that they are joint creditors in order to oust them 
 from participation in the assets. 
 
 In some instructire cases' in the United States the matter 
 IS put in this way: The right which partnership creditors have 
 to priority over separate creditors in respect of partnership as- 
 sets IS founded upon the right of each partner to require part- 
 nership assets to be applied to partnership debts before any 
 partner can participate; partnership creditors are subro«rated 
 to this partnership right, and so exclude the separate creditors 
 from partnership assets; but this reasoning cannot, of course, 
 apply where there is in reality only one partner, for in such 
 case there is no partnership right to which creditors may be 
 subrogated; therefore creditors of a partnership by estoppel 
 only can have no right to exclude separate creditors. For ex- 
 ample, if A. represents that B. is his partner, and thus misleads 
 creditor No. 1, A. is of coarse estopped to deny the partner- 
 ship; but creditor No. 2 (of A. alone) would of course be in no 
 way estopped to deny it; and No. 2 would take the assets as 
 separate, because, there being no real partnership. No. 1 can 
 have no right by way of subrogation to exclude him. 
 
 No objection to this reasoning or its result can be made so 
 far as it indicates that No. 1 cannot exclude No. 2. But the 
 inference must not be drawn that No. 2 can therefore exclude 
 No. 1; for, as has just i.-^m said, he is in fact a separate cred- 
 itor also, and only by aa estoppel, which he may or may not (as 
 he pleases) set up, can he be said to be a partnership creditor. 
 Beputed Ownership Clauses.— Ohserve the effect of the re- 
 
 ." ivxctiiuti tu fciiu puruus ana privies 
 
 DUted ownnrRhin r>.1anr,oa 
 
 J - ^ .^, 
 
 J See Meridian Nat. Bank . M'Con- Grabenheimer v. Eindskotf (1885) 64 
 ica (1804), 8 Ohio C. C. 442. tex 43. ' 
 
 » Glenn v. Gill (1853), 2 Md. 1; 
 
216 
 
 I7ATDBB AND EFFECT OF ESTOPPEL. 
 
 rule. The act declares ^ that all goot , tho j •session, order 
 or disposition of the bankrupt in U6 UvA,, < .• business, by the 
 consent and permission of the true owner, under snch circum- 
 stances that he is the reputed ',.vner thereof," shall form part 
 of « the property of the bankrupt, divisible amongst his oreo- 
 itors." This law proceeds upon a rough applicat^'^- -' *he 
 principles of estoppel. The true owner of the -.oods has al- 
 lowed the bankrupt to represent himself as the owner of the 
 gootis; upon the faith of this apparent ownership, credit has 
 been given; and the titf owner having assisted in the misrep- 
 resentation is estopped.^ Upon the principles of estoppel, then 
 the true owner oupht to be estopped.' But if estoppels bind 
 only parties and pr vies, and if creditors are not in privity 
 with their debtor, then any creditors of the true owner ought 
 not to be estopped, The effect of the statute, nevertheless, is 
 to estop such creditors equally with their debtor -- the true 
 owner. Here then is a most important inroad upon the doc- 
 trine that estoppels bind only parties and privies; or else upon 
 the holding that cr«<^itors are n, t in privity \yith their debtors;; 
 and will be some help, it is hoped, to the reconsideration of the 
 decisions which enable a sheriff's purchaser to take property 
 as to which the execution debtor had not a shade of equitable 
 title that he himself could enforce. 
 
 In the absence of legislation it hf>.9 been held in .^ lassachu 
 setts ^ that 
 
 !!?«.. *?'*"f^®i!*u"°1?'"*^® insolvent laws does not vest in the assignee* 
 property which has been put into the hands of the debtor for thf ffJud- 
 ulent purpose of giving him a false cmHt, alt^ .■ i some of thr °r«H^*r «I 
 may have been defraudeu thereby; " '*'' -reditor* 
 
 M6 & 47 Vic. (Imp.}, oh. 52, § 44 (3). 
 
 2 See Robson on Bankruptcy (7th 
 ed.), 5ia In Ex parte Hayman (1878), 
 8 Ch. D. 88, 47 I* J. Bk. 64, Jaraes, 
 L. J., said: "The doctrine of re;; ted 
 ownership is only an applicaaon of 
 the common princ .id that peopl^ 
 must make good their representa- 
 tiona" In the text it is said that the 
 statement " proceeds upon a rough 
 applioatiop of the principles of es- 
 toppel." It is not always true that 
 or^difc him been srivsn iii^^n t.hs f-if!- 
 of the apparent ownership. For es- 
 
 toppel, strictly, there must >- action 
 by the estoppel-asRf ter up' n the 
 faith of the appr*, o'- ership. 
 There co tid be no e ppe ithout 
 such acvion but for t statute. 
 
 » Ex parte Ford (1876X 1 Ch. D. 53! ;; 
 45 L. J. Bk. 96. The case shows that 
 the determining factor, here as else- 
 where, is whether the true owner 
 had notice of what was being done. 
 And see Re Clark (1894), 8 Q. a 898^ 
 63 L. J. Q. a 806. 
 
 ' Audenried f. Boitdley (1662), 82 
 Masa 383. 
 
 11; 
 
NATCBK AND EFFECT OF K8T0PPEI. 217 
 
 that '^*' ^^^^ '' ^^^ "^'^ ^''®'' ""^^'^ *^^ ^^*1 ^*^ P'-«^ided 
 
 or which might have bp>n taken on ««J„« ®*°'*^'*^'?"^** or conveyed 
 him. at the tfme of the fl«t publico" x"''°° "P°° * judgment agaW 
 
 Bona Fide and Fraudulent Debentures.^ The subject under 
 consideratioo has arisen in still another form. Suppose that a 
 company, having executed certain debentures, so deals with 
 them tuat one of the directors is enabled fraudulently to dis- 
 IZf. '^"V"' ^'' "^'^ ""''' ""^^'" '"^'^ circumstances as 
 
 hands of «T '^\T^^^^ ^'""^ ^'^P"'*' ^ '^''' ^^"^i'y i" "»e 
 hands of a bonajlde assignee; and suppose that there are other 
 
 debenture holders of the company whose holdin^^s are good 
 without estoppel; are, or are not, these other debenture hold- 
 wfll ,^r"K .^^^'^^fWeP'ofthecompany? In other words, 
 wi I tho holders of the fraudulent debentures rank with the 
 holders s the valid ones? In Mowatt v. Castle^ it is said: 
 
 (^ood oJly . ^'SDel^^ttToi.^H''* Ttf^' "*^« «°™P"y »««"«d others » 
 ]^evio£?y acq.&rigiK3 against them kfl^^^^ bind those who hid 
 selves by an ad, sionT but Iman cannAt WnH ?P"?P»"^ "«'gh* bind thenj- 
 do not chiim , -r h m but^ho b2?or« i^« ^^'"? admission those who 
 right" '^° oetore the admission had acquired a 
 
 The judgment k undecided the point whether holders of 
 Subsequently issried ^aonest) debentures would be estopped to 
 deny the va hdity of a prior fraudulent issue, with an indication 
 ha probably they would. This would lead to the confusion 
 that, of three classes of holders, those pr.or to the fraudulent 
 issue would take priority over that issue; those subsequent to 
 that issue would rank equally with the fraudulent issue; while 
 of necessity those issued both prior and subsequent to the 
 fraudulent issue (being both regular) would rank equally; that 
 is to say, A. would be prior to B. and equal to 0. ; but B and 
 O. would be equal, which is something of a tangle 
 
 What vvould be the law had the debtor been an ' dividual 
 instead of a company? Suppose that . bankrupt's liability to 
 one claimant depends upon estoppel; t .e cl imant any the 
 less a cr iitor? A warehousemai for example, has given a 
 certihcate that he holds goods for c ae man, whereas in reality 
 he hold, them for another. On the faith of the certificate. X 
 
 1 General Statutes, oh. 118, § 44. 
 
 "(1886) 84 Ch. D. 63. See Colum- 
 bia v. Cornell (1875), 91 U. S 404. 
 
iil8 
 
 JXATVaM AND EFrSOT OF ESTOPPEt. 
 
 ' 
 
 I '• 
 
 Bi! 
 
 a 
 
 purchases the goods and sues the warobouseman in trover for 
 refusal to deliver. X.'s case depends upon the warehouseman 
 b«ing estopped from denying the re' resentation of ownership 
 contained in the certificate. Is he any the less a creditor be- 
 cause of the nature 6t his case ? ' ; 
 Again, suppose that an agent is permitted to represent him- 
 self as having certain authority, which in reality he has not; 
 the principal, being sued ipon the contract of the agent, denies 
 the agency, but is held to be estopped by his conduct; is the 
 plaintiff any the less a creditor because of the character of the 
 arguments which lead up to his judgment?* 
 
 And so in the case of a company: It has not issued debent- 
 ures, but it has done that which, so far as it is concerned, is 
 the exact equivalent — debentures have been issued under such 
 <jircumstances that the company cannot deny that it has issued 
 them. This clearly appears when we consider that if the com- 
 pany were sued upon the debentures judgment would certainly 
 be given against it, and the decision would be that it had issued 
 them. The argument of the other debenture holders would be 
 that by their agreement with the company their debentures were 
 to rank with all other debentures which the company might 
 issue, and that in very truth the company did not issue any 
 others. But is not that a question between the company 
 and these other claimants; and if as a matter not of consent, 
 or of arrangement, or of compromise, but of strict law, as evi- 
 denced by the judgment of the court, the company did issue 
 them, can a third party say that it did not? 
 
 Suppose that some prerequisite of internal arrangement of 
 the company had been omitted in making the issue, but that 
 the purchaser was unaware of the omission and gave full value 
 for the debentures; could other debenture holders insist that 
 the debentures were not really issued?* Strictly, of course, 
 they were not, but under the cases* the company could not set 
 «p the omission. In both of these cases the company is liable 
 
 ^ See Heane v. Rogers (1829), 9B.& 
 €.577; 7 L. J. K a 283, and other 
 ■cases cited r- % p. 212, note. 
 
 ■ * It was thought that, the company 
 being estopped, its areditorn were 
 also estopped in Sioux City v. Trust 
 Ca (1897), 88 Fed. R 134 And see 
 
 Robinson v. Montgomery (1896), 3 
 Ch. 841, 849, 850; 65 L. J. Ch. ? 5: 
 Re South Essex (1870), L. R. 11 iiq, 
 157; 40 L. J. Ch, ISa 
 
 tap «»Ui^tt D^*...*! _ n^ ^ 
 
 (1856X 6 EL & B. 827; 25 I* J. Q. B. 
 817, is the leading example. 
 
KATDM AND BFFBCT OF KflTOPPBL. 
 
 teoause of 
 
 S19 
 
 Mtoppel,* and the fact that in one cam it ,ma « ♦ 
 get the money, and in the other thJfi^AA ^ "°* 
 
 U d„T^„^k"" "" '!"' '""' "P "" '■»'■'« o' them canno? 
 w J > '^u ° "^ntntatory list in winding-up proceeding 
 
 ^tir ''f "!,'°"'' " "" °'""I»'V stopped! but oTeT^r 
 holders and creditors suffer because of it wl.i,- ^ 
 
 w«n p,id to the company up<r:hr.h'.;:s; fetZirin:: 
 
 «.d^cr^.tors cannot .nterpose a defense not available to the 
 
 ^s in it procn^d a friend to' LuTa tretl'lilrfr 
 
 Inev Bot^T "" "^""'^ "' "■« ■««?' » """k advanced 
 monej. Both the owner and the friend were then estoDoed 
 from denying that the goods were validly pledZ TfLf 
 
 ^nk a„"d th! bT't""."' *"' S°""" """ ^-^'O "«mt a 
 tank, and the bank sold them. Other creditors subsequentlv 
 
 obtained judgments against the owner, and reouired tZS 
 
 toac«.u„tforthe proceeds of the goods.' TheZ^oot:i t ,1 
 
 If the law be that a man's creditors can occupy a betuTrs 
 
 tion than himself), for the goods never were in f.^ nLT i" 
 
 to the bank, and when the olner d^ed he^I m„\t' ^fi:" 
 
 r^'thrrmTnt '° " V'T'^'™'"' '"" "-« '>-™« «-" 
 otherwir """"""^ '"''^°- ■ "' "■« «•»" held 
 
 ?».;;^„'eSd&^7h??^rXbiitK^^ 'M «'* o'"" 
 
 «f M. (the owner), but In aiiv e°«M lb.™ L- '' l^V ^"""g the life 
 
 'OCM timtdi when the tank srfd f,nH„ S being no creditor who had any 
 
 «PPIT .he proceed, to «Xei'ir^tlm1|a?„T.'&'e&^? '"^ ''«'-« 'V 
 
 'In the latter case, by sel'inB the 2q<>o u» r j 
 debentures it has renrL, ."Vuf. ,. ?!! Kf^London. eta (1888). 89Ch. 
 
 allnece8sarypreUminarie"sha7ei;;e;" t^alTVoid'^lSOri'A P^'ii'^T'"" 
 observed and is bound by the repre- Ch 25a ^ ' *^' ^^ ^ •'' 
 
 sentation. ./.«„ 
 
 •(1883) 10 Ont 5-^. 
 
220 NATUKE AND EFFECT OF ESTOPPEL. 
 
 The second ground of decision is probably unassailable. The 
 creditors might possibly have followed the goods into the 
 hands of the bank's purchaser, but the bank itself could only 
 be liable for conversion, and at that time (the time of its sale 
 of the goods) the creditors had no judgment, and so no lotus 
 standi for complaint. , , 
 
 To the first part of the decision it may well be replied that 
 nothing which the friend did could affect the situation He 
 had given the receipt, which (save by estoppel) amounted to 
 nothing. Afterwards taking possession of the goods and hand- 
 inff them over could add nothing more. 
 
 The case thus illustrates an inclination to uphold a title 
 ac^ainst the creditors of the owner which is good against the 
 owner himself; and a disinclination to permit creditors to 60- 
 cupy a better position than their debtor. But the ««PPO^tiog 
 principle is overlooked; the principle, namely, that would treat 
 estoppel as an equity, and so relegate the case to the ordinary 
 rule that a creditor can take nothing but that to which his 
 debtor is in equity, as well as at law, entitled. * 
 
 Andthededsion suggests this further: Whether, in many 
 of such cases, it could not fairly be held tbat^e Utle rea"y 
 passed. The owner intended that the goods should be pledged 
 to the bank; the bank intended the same ^t^i^S; *^«^ °^""J l^"' 
 dorsed and handed t. the bank a document which the owner 
 represented and the bank believed to have that effect; is there 
 not here, in reality, a pledge of the goods? In a somewhat 
 
 similar case Martin, B., , v. ^ #«.,«^ that there had 
 
 "would have been better pleased if the jury had found that there had 
 been in reality a passage of the title. 
 
 III. Does Estoppel Bikd i^ Favob of an Assignee of the 
 
 Estoppel- A88ERTER ? 
 
 So far we have been considering the right of the estoppel- 
 
 asserter to urge the estoppel, not only against the ^toppel- 
 
 denier, but against his assigns and other persons. We have 
 
 nowti deal with the converse case, namely, the right of an 
 
 adsi-nee of the estoppel-asserter as against the estoppel-denier. 
 
 For example, the true owner stands by while I purchase his 
 
 I Richards V. Johnston (1859). 4 H. too Pickard v. Sears (1887). fl A. & E. 
 
 A N. 665; 28 U J. Ex. 828. Consider 469. 
 
NATURE AND EFFECT OF ESTOPPEL. 
 
 221 
 
 )le. The 
 into the 
 luld only 
 if its sale 
 I no lobua 
 
 plied that 
 tion. He 
 on n ted to 
 and hand- 
 Id a title 
 gainst the 
 ors to 6c- 
 upporting 
 rould treat 
 J ordinary 
 which his 
 
 ', in many 
 iitle really 
 be pledged 
 3 owner in- 
 the owner 
 jt; is there 
 somewhat 
 
 lat there had 
 
 SEE OF THE 
 
 he estoppel- 
 le estoppel- 
 , We have 
 right of an 
 5ppel-denier. 
 purchase his 
 
 1887), 6 A. &E. 
 
 horse from another; I resell'the horse; is the true owner es- 
 topped as against my purchase? 
 
 Upon this subject the following commends itself to one's 
 judgment: 
 
 exii'S'^n7^Ll\fT^u^^J^^K''^'^^^'' **^« principle of estoppel relied on 
 exists m favor of the holder of a note, against the defense of tiie laaker tn 
 the payment thereof, it is available in favor of throerson to thnm th2 
 holder assigns it The reason of this rule i? obvioL^fo? if ?hT est^nnel 
 did not operate in favor of the assignee, the value of the note in thp hil'^i 
 
 sen ana transfer all his title thereto would be impaired. This Drincinl« nf 
 the Uwis fully supported by the authorities cit^ed in the orSnal opin^ 
 
 So also it has been held that if the true owner stand by and 
 
 allow nis property to be sold to an innocent purchaser, the true 
 
 owner is estopped not only as against such purchaser, but as 
 
 against any other persons to whom he may convey it.» Gettino- 
 
 away from the uncertain question of privies, and applying every- 
 
 day principles to the case, a similar conclusion is reached- We 
 
 would say that although the title remained in the true owner, 
 
 yet that his purchaser was in equity entitled to the property- 
 
 that an equity is capable of transmission ; that the purchaser 
 
 m selling to a sub-purchaser placed him therefore in the same 
 
 position as he himself was; and ^.hat, for this reason, the owner 
 
 could not claim the property against the sub-purchaser. When 
 
 estoppel is viewed as an equity many things become clear. 
 
 T J.^r'^'J^^J'^ J- ^^'^'^^ ^^^^^^' ^^^ Richards v. Johnston (1859), 4 R & N 
 Ind. 1; 88 N. E. R 467; 89 N. E. R. 664; 28 L. J. Ex. 828. iartin. R. .aidi 
 
 IT trr ^ « , "In such a case the party is estopped 
 
 llJ dZ°°p "J ^"''I ^T^' '' ''• ""' ''^"^ ^'^P"""* "^«^' truth witK 
 rionJ^TnK h"'^ "Estoppelsby spect to that person, and those claim- 
 record and by deed, as is well known, ing under him, and in that transac- 
 run in favor of and against the priv- tion." See also Kinnear v. Markev 
 les in estate of the immediate parties (1877), 85 111. 96; Wortham v. Curlev 
 to the estoppel, ab well as for, and (1888), 75 Ala. 356. Distinguish The 
 against, the parties personally^ and John ShilLto Ca v. McClung (1892) 
 I see no reason why estoppels inpaia 2 C. C. App, 626; 6 U. S. App. 128; 61 
 should not be within the rule as they Fed. R. 86& PP- *«. oi 
 clearly artfurithin the principle." In \ 
 
i 
 
 CHAPTER XVL V 
 
 DECEIT AND ESTOPPEL. 
 
 MisrepraMBtatioii may, with regard to its eivil paaiihm«nty 
 be considered as (1) giving rise to an action of deceit; (2) aa 
 giving rise to a bill in equity for restitution; and (3) as giving^ 
 rise to an estoppel. 
 
 1. AcUom of Deceit — Ever sinca Pasley v. Freeman^ courts 
 of law have been familiar with actions of deceit based upon 
 misrepresentation ; for example, a misrepresentation as to the 
 financial ability of a third person, whereby the plaintiff is in- 
 duced to give credit, and thus suffers damage. 
 
 2. Eestitution. — Courts of equity always exercised jurisdic- 
 tion in cases of fraud. And two years after Paaley v. Free- 
 man (above referred to) had been decided, it was said that that 
 case, "and all others of that class, were more fit for a court of 
 equity than a court of law." 
 
 Pasley v. Freeman was, nevertheless, a case in which the 
 remedy seemed to be peculiarly in damages: "You misrepre- 
 sented the financial ability of ray debtor; on the faith of your 
 misrepi'esentation I gave him credit; pay me the damages 
 which I have sustained." Courts of equity were not accus- 
 tomed to award " damages." The word implied legal, rather 
 than equitable, jurisdiction. But the word could be changed 
 and the reality veiled; so, instead of "damages," the court of 
 equity decreed " restitution ; " and " breach of duty" gave way to 
 a sort of performance of the representation : " Because of your 
 misrepie.sentation I have lost so much money; I have an equity 
 (not an action) against you, to make the representation good — 
 not to pay me damages for my loss, but, by making the repre- 
 sentation good, to keep me free f ro)n damage." Thus, referring 
 to Pasley v. Freeman, Lord Eldon said : ^ 
 
 "It Jina occurred to me that that case upon the principles of many de- 
 cisions in this court, might have been maintained here; for it is a 'very 
 
 » (lim) 8 T. R. 01. (ISOS), 10 Ves. 475. And see Pulsford 
 
 2 Evans V. Bicknell (1801), 6 Ves. v, Richards (1«5;U 17 Ben v. 87; 23 L. 
 188; approved in Burrov/es v. Lock J, Ch. 55». 
 
PEOKXT AND BSTOPP|UU 
 
 223: 
 
 false.* ^<*™^®'' «•« *»»•• that representation good if he knows it to b» 
 
 III later years the subtlety of this excuse for equitable juris- 
 diction was, to some extent, lost sight of. For example, in a 
 case> m which directors of a company were being sued in 
 equity for a misrepresentation, upon the faith of which the 
 plaintiff had taken certain shares. Lord Chelmsford said- 
 
 3. ^*toi>p6?.— Misrepresentation, acted upon, may also give 
 rise to an estoppel, as is sufficiently well known; and estoppel 
 is so nearly allied to deceit that Baron Parke in one of the 
 leading cases * said : 
 
 fron for it^'^ ^ °'*°'^'' '^°"''* ^^ responsible to him m an ac- 
 
 Estoppel will be declared then under circumstances similar 
 to those requisite for an action of deceit; and restitution is a 
 remedy which may very well supplant deceit altogether. This 
 seems simple enough. But let us see. 
 
 Various Remedies in Same Case.— J^et it then be observed 
 that the same misrepresentation may give rise to an action in 
 deceit, to a claim for restitution, and to an estoppel. For ex- 
 ample, an intending mortgagee of a fund inquires of the trustee 
 of It as to incumbrances, and is fraudulently told that there 
 are none; whereas in fact the fund has alreadv been charged. 
 The mortgagee may now sue the trustee for "damages or for 
 
 K 300; 4J L. J. Ch. 33, is U J. Ex. il7. And see Evans v! 
 
 8(180.3) 10 VoM, 47n 
 (1860) 1 De G., F, & J. ,'>18j 29 L. Tayl 
 
 J. Ch. UTH, 
 
 cicKHc;; (1.-5UI;, o V».-«, lOi; Lee v. 
 
 or {18W)). 33 ?^ Y, 165; 11 N. Y, 
 Supp. 131. 
 
224 
 
 DECBIT AND E8T0FPBL. 
 
 restiiution, or, aided by estoppel, he may require the trustee 
 to hand over the fund. In the last alternative the trustee's 
 only possible defense is that the fund has already been charged ; 
 anu this defense he is precluded from setting up because of the 
 misrepresentation.^ \ . 
 
 Bui Conditions Diverse. — There being, then, these various 
 remedies for misrepresentation, one would naturally be led to 
 think that the conditions or requisites of the misrepresentation 
 would, for the application of each of them, be identical. But 
 such is not, unfortunately, the present state of the law. On th6 
 contrary, the authorities seem to leave no room for escape from 
 the embarrassing conclusion that for deceit there must be, but 
 for estoppel there need not be, mala fides; while for restitu- 
 tion — well, we shall see. 
 
 1. Deceit. — According to the leading case of Derrxj v. Peek,'' 
 
 "In order to sustain an action of deceit there must be proof of fraud, 
 and nothing short of that Viil suffice." 
 
 It has been said that deceit will lie in cases in which fraud 
 may be imputed, although it does not actually exist: namely, 
 in cases where the party making the representation was "a 
 person within whose special province it lay to know a particu- 
 lar fact."' But Derry v. Peek lends no countenance to that 
 view.* It does, indeed, deal with such cases, but only to put 
 
 iBurrowes v. Look (1805), 10 Vea 
 470. 
 
 «(1887) 14 App. Caa 874; 58 L. J. 
 Ch. 886. 
 
 'See Bigelow on Estoppel (5th ed.), 
 610; Gerner v. Mosher (1899), 78 N. 
 W. R 384 (Neb.). 
 
 * Nor do any of the English or Ca- 
 nadian Derry v. Peek acholia: Glaeier 
 V. Rolls (1889), 42 Ch. D. 486; 58 L. J. 
 Cli. 325, 820; Tomkinson v. Balkis 
 (1891), 3 Q. B. 614; (1893) A. G 405; 
 60 L. J. Q. B. 558; 63 id. 134; Angus 
 V. Cliflford (1891), 2 Ch. 475; 60 L. J. 
 Cli. 448; Low v. Bouverie (1891), 8 
 Ch. 88; 60 L. J. Ch. 594: Le Lievre 
 V, Gould (1898), 1 Q. B. 491; 83 L. J. 
 Q.B,858; Onward v. Smithson (1898), 
 1 Ch. 1; 62 L. J. Ch. 138; Garland v. 
 
 Tl»rtj\-i|^w^«% /iQQR\ A On*. CV^ii- rVv^.^ 
 
 Medal v. Lumbers (1899), 26 Ont. App. 
 78. 
 
 In the United States some of the 
 cases exact the presence of real 
 fraud; in others, fraud of very di- 
 luted character suffices; and in 
 others it is dispensed with alto- 
 gether. A g-c/od deal to the follow- 
 ing effect may he found : " An action 
 to recover damages for deceit can- 
 not be maintained without proof of 
 fraud as well as injury. . . . But 
 while there must be a furtive inteiit, 
 it may exist when one asserts a thing 
 to be true which he does not know 
 to be true, as it is a fraud to affirm 
 positive knowledge of that which 
 one does not positively know," Hed- 
 cock v. Osmer (1897), 158 N. Y. 603; 
 47 iS. E. R 928; Chatham v. Moffatt 
 mm), 147 Masa 403; 18 N. E. R, 168. , 
 
 iJJC lOilOV.'iUg cAi'laOiJ iiuiu t% juug* 
 
 raent in Florida of Carter, J (Wat- 
 son V. Jones, 1899, 25 a R 682), is 
 
BTOBIT AND KSTOPPBI. 
 
 sas 
 
 them aside as being "in an altogether different categorv from 
 
 ^eZL^Z'''Z'^"'T'^ ^presentations sl^afw™ 
 «ie ueaung u ith. The general statement that for deceit « thpra 
 
 2. Jie.tiMion.- Ono ot the leading cases as to restitution is 
 
 tSl "nl 1:'"'"'""^ °''^.'-«'«' '^'-'^ answer fhat S 
 were no incumbrances upon it. The answer, although false 
 
 was g ven m good faith, for the trustee had forgotten fhe fact 
 
 of a previous charge. Restitution was decreed, but whether 
 
 upon the ground that there was "gross ne-li^ence" in thi 
 
 7oZZrZ ""' V'' '""•' "^^^ An aSof "decei 
 would not lie under such circumstances « 
 
 Sir Frederick Pollock limits the cases in which the court of 
 equity, prior to the Judicature Acts, decreed restituUon to 
 
 well worth its length : " In Alabama, 
 Colorado, Nebraska and some other 
 states the courts do not seem to re- 
 quire proof of scienter in cases where 
 the party making a false representa- 
 tion professes to speak from his own 
 knowledge. Munroe v. Pritchett, 16 
 Ala. 785; Jordan v. Pickett, 78 Ala. 
 331; Goodale v. Middaugh, 8 Colo 
 App. 223; 40 Pac. R. U; Johnson v. 
 Guhck, 46 NeU 817; 65 N. W. R 883. 
 In oth.r states the charge of fraud- 
 ulent intent in actions for deceit 
 may be maintained by proof of a 
 statement made as of a party's own 
 knowledge which is fiihe, provided 
 the thing stated is not merely a mat- 
 ter of opinion, estimate or judgment, 
 but IS susceptible of aotual knowl- 
 edge, in which case it is deemed that 
 the fraud consists in stating that the 
 party knows the thing to exist when 
 he does not know it to wxist. anr^ fa 
 such cases a belief in its existence 
 will not warrant or excuse a state- 
 ment of actual knowledge. Fisher 
 V. Mellen, 108 Mass, 503: Furn.af^ n.-. 
 V. Moir»tfc, 147 Mass. 403; 18 N. E. R 
 163; Hadoook v. Osmer, 153 N Y 
 604; 47.N.E.R.933; Bullitt v, Farrar* 
 18 
 
 43 Minn. 8; 48 N. W. R 566. It ig 
 also held in these states that if 
 the representations were not made 
 as of the party's own knowledge, 
 then the evidence must show that 
 the party knew them to be untrue, 
 and evidence that he had reasonable 
 cause to believe that they were un- 
 true will not constitute sufficient 
 proof or scienter. Pearson v. Howe 
 1 Alien, 207; Stone v. Denny, 4 Met' 
 (Mass.) 151; Tryon v. Whitmarsh, 1 
 Met (Mass.) 1; Marsh r. Falker 40 
 N. Y. 562; Marshall v. Fowler, 7 Hun 
 237; McKown v, Furgason, 47 Iowa, 
 636 And see Braley v. Powers (1898), 
 
 ^^Me.203;42Atl.R362^Pierattv. 
 Vou.r.: (1890), 49 S. W. R 964 (Ky )• 
 
 '^!:\f * ^' ^*^* <^^^^)' 50 S. W. R 
 tfO: (X ijc); Krause v. Busaeker (1900^ 
 < ■-. W. R 406 (Wis.); Grinnell on 
 Deceit, 28, 198. 
 
 J (1805) 10 Vefc 470. 
 
 "The earlier case of Evans v. Bick- 
 nell, abov; quoted from, seems to 
 f .T *!'"*. **'® Kft-und of relief would 
 wv t.-sr^t "lie iiiowe it to be false." 
 
 «Low V Bouverie (1891), L. R, 8 
 Ch. 83; 60 L. J. Ch. 594. But see 
 PolJook on Torts, 244-848. 
 
226 
 
 DECEIT AND ESTOPPEL. 
 
 « certain cases of fraud (that is, wilfully or recklessly false rep- 
 resentation of fact)."* But the equity doctrine of constructive 
 fraud enabled the court to find guilty a man as against whose 
 moral purity of action not a word could be said. And " con- 
 duct fraudulent in the eye of this court," varied so frequeritly 
 with the eye which the court happened for the moment to be 
 employing," that it is impossible to say that for restitution 
 there must be mala fidea^ as in deceit;' or, as in estoppel, that 
 " no fraud need have been intended." 
 
 3. Es*.02>peL — For estoppel it is reasonably clear that 
 "it is not necessary that the party making the representation should know- 
 that it was false; no fraud need have been intended."* 
 
 CompaHson.— ^% thus see that for deceit there must be 
 fraud ; that for estoppel there is no necessity for fraud ; and that 
 for restitution there must be fraud, but that it may be fraud 
 of constructive chara,cter — fraud "in the eye of this court."* 
 
 Peculiarity in Application of Remedies. — These anomalies; 
 in the requisites for relief find some parallel in those discov- 
 ered in the application of the various remedies. For, observe 
 that, very frequently, the remedy by estoppel may not be ap- 
 plicable to tue particular case, although estoppel may actually 
 exist. That is to say, although the misrepresenter may be 
 estopped uom denying the truth of the misrepresentation, yet 
 sometimes such inhibition will not hurt him nor help the other 
 party. 
 
 For example, suppose that a man agrees to lend money upon 
 mortgage of a house in course of erection, and to advance the 
 money, as the building progresses, upon the architect's certifi- 
 cates of the amount expended ; that the architect is aware of 
 the arrangement; and that he, inadvertently, issues false cer- 
 tificates, upon v/hich the mortgagee advances so much money 
 that he loses some of it. Under these circumstances the archi- 
 tect will not iM liable in deceit," for there was no fraud ;^ and 
 
 » On Torts, 187. 
 
 2 See the subject discussed in ob. 
 XVIIL 
 
 3 Since the Judic»cur» Acts, Derry 
 V. Pefek, 37 Ch. D. *=- 14 App. Cas. 
 Wl: 58 li J= Gh= H«k i«= no doubt, 
 tlie governing autnaity. Restitu- 
 tion can no longer oe looked upon 
 as a distinct remedy, 
 
 *Per Lord Cranworth, in Jorden 
 
 V. Money (1854), 5 H. L. C. 213; 23 L. 
 j. Oh. 868. And see ante, ch. VIII. 
 
 "i^sto the analogous methods of 
 employing tlie word fraud, see ch. 
 XVIIL 
 
 «Le Lievre v. Gould (1893), L. R. 
 1 Q. B. 491; 62 L. J. Q. B. 353. And 
 see Atkins v, Payne (1899), 190 Pa. 
 St. 5; 43 Atl. R. 878. 
 
 7 The reason stated in the judg- 
 
DECEIT AND ESTOPPEL. 
 
 22r 
 
 although he Will be estopped from denying the tnith of his 
 certificates, the estoppel will not hurt hinx nor benefit the mort' 
 gagee. 
 
 Again suppose that a warehouseman, through inadvertence 
 represents to you that he is holding' certaif goods forT 
 
 I^i^Zl " ^^^^^«.»^-g t^- forB.; and fhat upon tie 
 faith of this representation you buy the goods from A. Under 
 these circumstances you cannot sue the warehouseman for dam' 
 ages in deceit, for there was no fraud. But in this case estoppd 
 will help you to relief. Your course is to bring trover S 
 him for the goods; to allege (quite contrary tl the fLTtha 
 the goods are yours; and, when thetrial comes on, estop him 
 f om denying your ownership, by showing that you acted upon 
 his misrepresentation.* « upon 
 
 tur?.n r ?''/'' '^' '"'" °^ '^' ^''^'^''' y^^^ ^«r« "nable to 
 tu n to practica account the estoppel which you could undoubt- 
 
 l'Jl"^'"1 ""; ^' ™ '^'"PP^^' ^"* y«" «°"»d make no 
 ^ use of the estoppel. You could not sue him for anything, and 
 
 succeed by preventing assertion of some fact. You had £ sue 
 . him m deceit or not at all. The wrongs in the two cases are 
 
 dentical ; yet in the one case there is a remedy and in the other 
 
 there is none. 
 
 The Anomalous I?esult.-The anomalous result then ensues 
 . that an mnocent misrepresentation will or will not be attended 
 by punitive consequences, according as the chance circumstances 
 will or will not permit use to be made of the peculiar princi- 
 ples of estoppel. If fraud be absent you cannot sue in deceit - 
 you cannot, therefore, base your action upon the allegation that 
 a representation was made to you, and that it was false. But 
 If by alleging certain truths and adding to them a. a furtAer 
 truth the representation made to you (which is in reality false) 
 you cat! frame a cause of action, you will succeed; because the 
 defendant will be estopped from denying the truth of the only 
 talse statement in your claim. In other words, you cannot 
 succeed by alleging that the defendant made a representation 
 
 betweenthe architect and th« inort 
 gagBe. xiic»i, remark is appropriate 
 
 were to be relied upon, nn<j hs frau.-3. 
 ulently falsified them, he would have 
 
 to the suggestion of the existence of been liable 
 
 contract, but not altogether as a iSimm t. Anglo-American n«7fl> 
 
 reply to a demand in deceit If the 5 ^J. B. D. 188; J Tj^B m 
 
22S 
 
 DECEIT AND ESTOPPEL. 
 
 which was false ; but may (sometimes) succeed by alleging the 
 false to be true. In the former case, could you succeed, you 
 would have to prove that the representation was false; while 
 in the latter you win by preventing the defendant from show- 
 ing the same thing! 
 
 The present tangle may well be illustrated by three cases : 
 
 Burrowes v. Look (already cited). The beneficiary of a fund 
 wanted to borrow on it. The intending lender applied to the 
 trustee of the fund for information as to charges; and the 
 trustee, through forgetful ness, wrongly stated that there were 
 none. The trustee had to make good the loss. Observe that, 
 under Derry v. Peek, the trustee could not be sued in deceit, 
 for there was no fraud. In estoppel, however, the lender could 
 say to him : " Pay me over the fund ; " and the trustee could 
 not defend himself (by setting up the prior charge), beca jse 
 of his misrepresentdtion (that there was none), which estops 
 him. 
 
 Slim V. Croucher} An intending borrower offered, as secu- 
 rity, a lease which he said he was about to get. The lender 
 required a written intimation from the landlord that he would 
 grant the lease; and this the landlord signed. Afterwards it 
 turned out that the landlord had previously leased the land to 
 the borrower, and that the borrower had already assigned the 
 lease to another person. The landlord had forgotten about the 
 previous lease when signing the intimation that he would grant 
 one. The landlord was held to be liable in damages. 
 
 These two cases seem to be very much alike. In both a man 
 within " whose province it lay to know the particular fact " (if 
 that has anything to do with it) had forgotten it, and by mis- 
 representation had induced an innocent person to change his 
 position for the worse. But it seems now to be clear that while 
 the decision in the former case was right, that in the latter was 
 wrong." The explanation is this : In the case of the trustee of 
 the fund, the misled mortgagee could sue for the money ; and 
 the trustee, being estopped from setting up the earlier charge, 
 would have no defense; while in the case of the landlord the 
 action was (necessarily) purely for damages for the deceit, and 
 
 «f rfAi-i/yVi* fr\ KoTTA Hpciili!^ tcW WJi.nt. f>"f "frSLnH. 
 
 If filivn ^fJho inr\*»f- 
 
 1 (1880) 1 De G., *'. & J. 517; 29 L. « See Low t. Bouverie {1881), L. R 
 J. Ch. 278. 8 Ch. 83; 00 L. J. Cb. 594. 
 
DECEIT AND ESTOPPEL. 
 
 22» 
 
 'fVio tvirkT»t_ 
 
 gagee of the lease) could have framed his action against the 
 
 Zn7u '\? 'T'u ^' ^'°'^' ^^ '^^ ^^^Wel, he would have 
 been all right. But he could not. 
 
 fnother Illustration.- Suppose that I have a mortgage, and 
 that upon bemg applied to, by a proposed subsequent incum- 
 T}.T^"'l erroneously tell him (believing such to be the fact) 
 that my debt has been paid. In such case I would not be liable 
 
 Ll'^'iV^ ""' '""' "° ^'^"^)' but I would be estopped 
 from settmg up my mortgage as against the subsequent incum- 
 
 fnXr'; rl'^' "°"'' '^ ''^ '^^'' equivalent of damages, 
 m deceit, for the misrepresentation. Suppose, however, in the 
 samp se, that my mistake arose from the fact that I had as- 
 «gt uy mortgage to a purchaser of it - the debt had not (as 
 I represented) been paid, but had been transferred to a third 
 person, to whom it was still due. In such case I would not be 
 liable in deceit (because of no fraud); and there is no way to 
 get at me through estoppel. I am estopped, no doubt, from 
 ever saying that the debt is not paid, but that (under the cir- 
 cumstances) cannot injure me nor benefit the person to whom 
 1 made the misrepresentation. 
 
 r.t-I^V •^'^^''t'fT'~ ^ ^^•a'-ehouseman issues a warehouse 
 certificate m which, by mistake, he acknowledges the receipt 
 of more grain than he actually received; a third party buys 
 the larger quantity upon the faith of the certificate; he sues the 
 warehouseman m deceit, and is beaten because of the absence 
 of fraud. Better advised, another purchaser in a precise y 
 similar situation demands the grain and sues for its delivery, 
 the warehouseman says that he never had the grain; but the 
 purchaser estops the assertion with the certificate, and recovers 
 (not the grain, for there was none, but) damages.^ It is not 
 permissible, however, to suggest that he got damages for the 
 misrepresentation in the receipt, for the other case shows, of 
 course, that that could not be done. 
 
 Anomaly Induces Harm.ony.-i^v, of this sort, which de- 
 ckres for relief, not upon the basis of the wrong, but upon the 
 
 ingenuity and judicial inclination are thereby di> .ced to the 
 
830 
 
 DEOKIT AND E8T0VPEL. 
 
 expansion of the law in one direction or another, and thus to 
 the establishment of harmony. 
 
 For example, what is to be done with this case?* A corpo» 
 ration (by mistake) gives to A. a certificate that he is the owner 
 of certain shares; so armed, A. sells the shares to X.; and the 
 corporation, having discovered its mistake,* refuses to recognize 
 X. as a shareholder. Now, what can X. do? He cannot sue 
 the corporation for deceit (for there was no fraud). Can he 
 force the corporation to put him on the register? The only 
 defense the corporation could make to such an application 
 would be that the applicant is not entitled to be a shareholder; 
 and from this the corporation is (in the supposed case) es- 
 topped by its representation. This seems, then, to be a likely 
 remedy. But if, as may be the case, the company's register is 
 already full — all its authorized shares have been issued — such 
 remedy is impossible.' What then ? Why this : that ingenuity 
 and inclination will discover ihnX X. can sue the company for 
 damages for refusing to put i:':r.i on the register; and (the com- 
 pany being estopped frora ; v ;:,:; that he ought not to be there) 
 that X. will recover exactly the same damages as if he had 
 sued in deceit. The company is not liable for damages in de- 
 ceit for the innocent misrepresentation; but it is liable for dam- 
 ages because of the deceit — although in round-about fashion. 
 Lord Macnaghten said : 
 
 "The company are not asked to make good their representation by trans- 
 ferring shares to Tomkinson. Tliey are called upon to pay damages in 
 order to compensate Tomkinson for loss to which he has oeen put by rea* 
 son of their misrepresentation." * 
 
 And that is precisely what Derry v. Peek declares cannot be 
 done in the absence of fraud. 
 
 Observe closely the modus operandi in this last case. The 
 purchaser of the shares cannot say : " The company represented 
 to me that A. was the owner of the shares ; I acted upon that 
 representation; that representation yv&s false; lam entitled, 
 therefore, to damages." But he "an say: " The company rep- 
 resented to me that A. was the owner of the shares; I acted 
 upon that representation ; that representation was true (at least 
 the joompany cannot say that it is not); the company will not 
 
 1 Re Bahia (1868), L. E= S Q< R 584: 2 Tjgw. » Cham wood '1884^. 1 GaU 
 87 L. J. Q. a 176. And see cases & S. 419. 
 
 cited with this one in cb. XXIL > Balkis 7. Tomkinson (1803), A. C 
 
 410; 63 U J. Q. R 141. 
 
DEC ..IT AND ESTOPPEU 
 
 231 
 
 aai^ i noK 
 
 register me; lam entitled, therefore, to damages." The former 
 
 the pla,„fff ass, .is misrepresentation, I.e cannot prove fraud 
 ow er of't^'e^h -ticn for ;.f„sing to agister tbo'plaint ff as 
 owner of the shares, and will lie, because the plaintffl refrains 
 from asserfng ^.-.representation (which is his rea .rrunTrf 
 oorapla,nt), and the company is estopped fromavowi Ai 
 
 though the damages in both cases are the same, ( can be 
 
 ra~nd°::fo' T''"' '"' ^"^ «™™"-' •"" -y by a 
 careful and enforce! suppression of it. An innocent misrep- 
 
 rosentahon .n this way resnlts in damages in spite of ^^^l 
 
 1 eek and crcu^y is once more the road to harmony. ^ 
 
 -nifr^;;Crrtir'"'"'-'''^ "^""' "■'"■ -™ - ^ ^^^^^ 
 
 estoppdfo^ "''°"'" ''"■' """ *™"'"' '"■ "''*'' -^-«' "--i 
 (2) Mayb;sufBeientforboth,butnnavailabIeinestoppel;or. 
 
 .vir:Cer;:r "- ''°''- ^-^ ^»' -«»'-'-. -^ 
 
 It seems that one factor in each case is the presence, or ab- 
 
 there ,s fraud there >s al -ays an action of deceit, but onlv 
 omefmes effective estoppel; and that where there is „o,S^.d 
 there .s no achon of deceit, but, according to merit chan^ 
 there may or may not be estoppel accompanied bv dama»™ 
 
 :^'s: rtfu^r '"" "™"* '« ---^ -'^--s 
 
 Dn?ci„Te mT'"'"').""' "'■'""' """y '^"^ to » «™io» of the 
 principle laid down in Derry «. Peek,' ^^^ ,„ j,,^ establishment 
 
 oMhe^action of deceit upon the same ground as est^^^ 
 
 etanoe. in which the mrtrZtStl i^^l"'^° :!}■ "' '"^" "taum- 
 «oted on then pnraa A,feth"™rtvmkiL?h!f°"'''^ '"'P»«!»= " »"' >» 
 by It, „ between himielt .nd'tCXmh! hw SS"""'""" " l^""" 
 
 present fraud is necessary to an action of deceit, bnt is unnec- 
 
 ^The fact that thn onaa iVo^ip ^.- 
 «t once partially revised by Parlia- 
 ment may help to get rid of its prin- rCh! 86a 
 <!iplo. See 53 & 64 Vic. (Inipt); oh. 
 
 -Per Lord Cranworth In West v. 
 Jones (1851), 1 Sim. N. & 207; 80 I* 
 
IMAGE EVALUATION 
 TEST TARGET (MT-3) 
 
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 /IPPLIED^ IN/MGE . Inc 
 
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232 
 
 DECEIT AND X8T0PFEU 
 
 essary in estoppel. It is, as the writer thinks, impossible to 
 introduce the elemeai of fraud into estoppel as a prerequisite. 
 And if deceit will not lie without fraud, then we must be con- 
 tent to say that 
 
 "an innocent misrepresentation will, or will not, be attended by punitive 
 consequences, according as the chance ciroumst&noes will, or will not. per- 
 nut use to be made of thepeouliar principles of estoppel" 
 
 This is not the best conceivable example of stable equili- 
 brium. Some judge some day will breathe upon it. 
 
 So also with the equitable doctrin? of restitution. If th» 
 word "fraud," tempered and qualified by construction, may 
 be applied to oases in which there is no element of fraud (in 
 the sense of bad faith), the breach between the requisites of 
 restitution and estoppel may be bridged. Not the lawyer, in 
 this case, but the etymologist only, will be required to make 
 the situation comprehensible. 
 
 A Suggestion.— IhQ following line of thought has much en- 
 gaged the writer's mind in pondering the anomalies above re- 
 ferred to: ' 
 
 Can it be said that the idea of duty has nothing to do with 
 estoppel? Follow this: For breach of duty the law providea 
 punishment (awards damages); but in estoppel there is na 
 breach of duty, and there is no punishment, but merely se- 
 quence, or consequence. For example: When I stand by while 
 another sells my property to an innocent purchaser, I am 
 guilty of no broach of duty. I have a right to stand by if I 
 like. I may, if I choose, allow another to sell my property. I 
 can do as I please with my own ; and permit another, if I wish^ 
 to do as he likes with it. I am guilty of no breach of duty in 
 allowing him to sell my property, and therefore cannot bo 
 punished as for a breach of duty. But if I allow another per- 
 son to sell my property a consequence ensues, namely, that I 
 cannot afterwards assert ray title; that is, that I am estopped. 
 
 Further observe that this view seems to obviate inquiry inta 
 the question of punishment in damages: I have permitted an- 
 other to sell my property; I cannot afterwards set up my title; 
 no injury then has been done to the purchaser; he thought 
 that his vendor had the title; I am precluded from asserting 
 otherwise; the title then is as the purchaser understood; and 
 1^8 i.as Sot u6en in jured ; thero is no question of Uatuuges. 
 
 Consideration of estorr :i ^y contract, too, furnishes analogy. 
 
 ■ \ ! 
 
DECEIT AND ESTOPPEL. 
 
 833 
 
 For example, a bailee is estopped from denying the title of his 
 bailor. That is because, in the contract of bailment, the title 
 of the bailor is taken, as between the parties, U) be a fact. The 
 bailor may have misrepresented his title; but that is immate- 
 rial; no question of duty not to misrepresent is involved; the 
 point is, that that which between the parties was taken to be 
 a fact is, and remains, a fact 
 
 And so in estoppel, not by contract but by misrepresenta- 
 tion, may it not be said that in this also the question of duty 
 is not involved. I misrepresent if I choose, and the conse- 
 quence is merely this: that that which I have represented to 
 be a fact is, and remains, a fact, so far as I am concerned. 
 
 Take an example:' A mortgage purports to secure $250, 
 and the receipt of the amount is acknowledged upon the docu- 
 ment by the mortgagor; but $100 only was advanced; the 
 mortgagee assigns the mortgage, representing that $250 is due 
 upon it, and the mortgagor is estopped from asserting other- 
 wise. What is the rationale of the decision? Is it that the 
 mortgagor, in executing the mortgage and the receipt, owed a 
 «luty of carefulness to those into whose hands the mortgage 
 might come? Or is it that the mortgagor, having assisted in 
 the misrepresentation (having made it credible), is really a party 
 to it, and is visited with the usual consequence, namely, that 
 that which he has represented to be a fact is, and remains, as to 
 him, a fact? 
 
 Test the case in this way: If there was a duty of careful- 
 ness, and a breach of that duty, then an action of negligenci* 
 will lie; for such an action is based upon breach of duty. But 
 (assuming that there was no fraudulent intent in the mort- 
 gagor) no such action could bo maintained (while i>«v7 v. Peek 
 stands). And, if not, it would seem that there can have been 
 no duty of carefulness such as suggested. The estoppel, then, 
 must have arisen as a consequence, and not as a punishment for 
 breach of duty. 
 
 Again, recurring to the architect's case in which a mort- 
 gagee advanced money to the owner of buildings upon the 
 faith of the architect's certittcates of amounts expended upon 
 them, observe that the reason given for the absence of liabilifev 
 
 » Bickerton ▼. Walker (1885), 81 Ch. D. 151 ; 55 I* J. Ch. 287. See 0C5*8 
 cited with this one in oh. IV, 
 
234 
 
 DBOEIT AND KSTOPr^CX^ 
 
 I- I 
 
 on the part of the architect was that he owed no duty to the 
 mortgagee. Tet there can be little doubt that the architect 
 would have been estopped by his certificate had the case been 
 one in which his estoppel would have been of any benefit to 
 the mortgagee. There was no breach of duty ; but there was 
 the usual consequeDce attending the misrepresentation. ^ 
 
 Finally, returning to the mortgage case: Suppose the mort- 
 gagor bad executed the mortgage, and given the receipt, for 
 the purpose cf enabling the mortgagee to repretient that $250 
 was advanced upon it; he would be liable in an action of deceit ' 
 because he was a party to the misrepresentation. This in- 
 volves, as we have seen, the idea of a breach of duty towards 
 the assignee. If the mortgage and receipt had been given 
 without intention to defraud, the mortgagor would clearly not 
 be liable in deceit. Those propositions involve these ; thac if 
 the mortgagor was, knowingly, a party to the misrepresenta- 
 tion he was guilty of sope breach of duty ; and if he was inno- 
 cent, then he was not so guilty. But this is equivalent to 
 saying that (for the purposes of an action of deceit), although 
 there is no duty not to misrepresent, there is a duty not, wit- 
 tingly, to do so. 
 
 The idea of duty, then, is linked to some extent "vith mis> 
 representation. And is the solution of our difiic s this: 
 that there is a duty not fraudulently to misrepreseti-: ; for a 
 breach of this duty action will lie; that apart fiomfrau«i there 
 is no duty of carefulness not to represent; but that all repre- 
 sentation as to fact carries with it the obligation of consistency 
 and the consequence of estoppel. 
 
 Suggested Solution Unsatiafactory. — Such solution is unsatis- 
 factory, for while it may apparently have the merit of sym- 
 metry yet it in reality leaves all the anomalies above referred 
 to in full operation. In fact it takes no cognizance of the most 
 striking of them. 
 
 In the Bahia case the company was estopped by its certifi- 
 cate; and the result was, not the mere "consequence" that it 
 had to register the purchaser of the shades (for it could not do 
 so, the register being full), but the result was damages — 
 damages for the loss occasioned by the misrepresentation. An 
 innocent miorepresentation thus resulted in damages; while 
 
 1 Evans T. Bicknell (1801), 6 Yes. 191. 
 
DECEIT AND ESTOPPKU 
 
 t85 
 
 •Derry v. Peek has authoritatively detormined that only in 
 <5a8es o! fraud cap there be damages for misrepresentation. 
 
 If, in the Bahia case, the frame of the action had been, " The 
 company represented to me that A. was the owner of the shares ; 
 I acted upon that representation; that representation was 
 false,' I am entitled, therefore, to damages," the company 
 would have won, because there was no fraud. Put, however, 
 m another form, and the company loses: " The company rep- 
 resented to me that A. was the owner of the shares; I "acted 
 upon that representation; the representation was tme; the 
 •company nevertheless refuses to register mo; 1 am entitled, 
 therefore, to damages.'' State the case naturally, and you lose. 
 State it artificially, and yon win I 
 
 Were Jie Bahia but a solitary case we might, for the time, 
 «hut our eyes to it, upon the ground that "questions danger- 
 ous to all theology ought not to be raised." But Simrn v. 
 Anglo- Atnerican^ (typical of many cases) must also be reck- 
 oned with. Not a company this time, but a warehouseman, 
 innocently issued an erroneous certificate of ownership, upon 
 the faith of which a purchaser of the goods referred to in it 
 changed his position. The purchaser demanded the goods, and 
 the warehouseman replied that, since issuing the certificate, 
 he had ascertained that the goods really belonged to some one 
 else. The warehouseman now is not liable in deceit, there hav- 
 ing been no fraud. And it is impossible that he can be ordered 
 to deliver up the goods, for they belong to a person who is in 
 no way implicate.: in the misrepresentation. The purchaser 
 seems to be remediless. He cannot complain of the deceit, for it 
 was innocent; and he cannot have the goods, for they belong 
 to a stranger. Nevertheless his course (although tortuous) is 
 clear; and his goal (although not the one he may strive for) is 
 well assured. He cannot have the goods, and' will not get 
 them, but he must sue for them as though he could. On the 
 other hand, the damages which will finally be awarded to him 
 because of the misrepresentation must meanwhile remain un- 
 claimed. With artful indirection he sues for delivery of the 
 goods; the warehouseman answers that the goods are not the 
 
 plaintiff's, which is thn fantr t.ho nUintiflP ,u>»i;^« ^r.4. I T - - 
 
 /,^?7l*A^ °- ^^^' *» L. J. Q. B. 89a And see ReK- v. Chamwood 
 (1884X 1 Cab. & £. 419. 
 
I 
 
 I I! 
 
 I 
 
 I ;|j 
 
 236 
 
 DECEIT AND K8TOPPBL. 
 
 ically, not7, the plaintiff ought to be awarded the goods. But 
 Lord Justice Brett gives judgment as follows :i i 
 
 " In a similar luaoner a person may be estopped from denying that cer- 
 tain goods Iwlong to another; he may be compelled by a suit in the na'ture 
 of an action it trover to deliver them up, if he has them iu hiu possession 
 and undar his control; but if the goods in respect of which he has estopped 
 himself really belong to somebody else, it seems impossible to suppose that, 
 by any process of law, be can be compelled to deliver over anotner's goods* 
 to the person in whose favor the estop-iel exists against him; that persou 
 is entitled to maintain a suit in the nature of an action of trover against 
 him; but that person cannot recover the goods, because no property has 
 really passed to him; he can recover only daraagea In my view estoppel 
 has no effect upon the real nature of the transaction; it only creates a 
 cause of action oetween the person in whose favor the estoppel exists and 
 the person who is estopped." 
 
 The warehouseman is not liable for damages in deceit for 
 the innocent misrepresentation ; but he is liable for damages 
 because of the deceit — in round-about and artificial fashion. 
 
 In such cases as the two just dealt with, there seems to be 
 no escape from the conclusion (while Derry v. Peek stands) 
 that if the facts are stated naturally and in support of the real 
 ground of complaint the* plaintiff will be beaten; whereas ho 
 will succeed if he state the case artificially — asserting as his 
 grievance that of which he cannot complain. His grievance is 
 the misrepresentation. Of misrepresentation he must say noth- 
 ing. To the shares, or to the goods, he has no right. These 
 he must assert to be his. Damages for the deceit (if anything) 
 are what he is entitled to. Of such claim he must not say u 
 word. Damages for not giving him the shares or goods he 
 ought not to get (because such damages are given in lieu of 
 specific delivery, and to delivery he is not entitled). Such 
 damages are awarded him. 
 
 Phincipal and Agent. 
 
 There is another point at which the orbits of deceit and es- 
 toppel intersect, and there too a third factor must be taken intu 
 account. The ensuing problems will be merely stated hero. 
 Their solution will be suggested in a later chapter.' 
 
 The law ot principal and agent supplies many cases in which 
 the act of the agent, being admittedly unauthorized, the ques- 
 tion is whether or not tha principal is bound by it Answer 
 of geperal sort is sometimes made to the effect that the prin- 
 
 iSimm T. Anglo-Amerioan (1879), 
 5 Q. a D. S07; 49 L, J. Q. & 893. 
 
 »Ch. XXVL 
 
DECEIT AMD E8TOPFEL. 
 
 237 
 
 But 
 
 cipal is bound if the act was "for the master's benefit." But 
 this statement is of coursie much too loose; for according to it 
 liability would depend upon the mere intent of the agent, 
 apart altogether from the nature of his authority. More nar- 
 rowly it is said that if the agent is employed to perform "a 
 class of acts," liability for an act within the class is to be de- 
 termined by a consideration of master's benefit or agent's ben- 
 efit. 
 
 But we must distinguish. The case may arise in three ways : 
 <1) In an action of pure tort; (2) in an action of deceit; (3) in 
 estoppel. 
 
 (1) Pure Tort— An omnibus driver, in defiance of instruc- 
 tions, upsets a rival omnibus, or runs over a pedestrian ; the 
 master is liable 
 
 *' provided that what was done, was done not from any caprice of the serv- 
 ant, but in the course of his employment" ^ 
 
 (2) Deceit. — A secretary of a company made a false reply 
 to questions relating to certain debenture stock of the com- 
 pany; he had been authorized by the company to answer such 
 questions, and the company was held not to be liable because 
 he "did not make the statements for the defendant but for 
 himself " — that is, for his own fraudulent purposes.* 
 
 (8) A secretary of a company, not having been intrusted 
 with the seal, got possession of it and afiixed it to a certificate 
 of shares, forging also the signatures of the necessary directors. 
 He was acting entirely for his own benefit; but the company 
 was held to be estopped by his action.* 
 
 The form of the remedy ought not to require such anoma- 
 Ions conclusions. 
 
 1 Limpus ▼. London (1863), 1 H. & 
 C 686; 82 L. J. Ex. 8S; Bayley ▼. 
 Blanohester (1872X L. R 7 C P. 420; 
 48 1* J. a P. 78; Weir v. Bell (1878), 
 8 Ex. D. 84A; 47 L. J. Ex. 708; Bar- 
 wick V. English (1867), U R. 8 Ex. 
 859. 
 
 >Beg. T. Chamwood (1887), 18 Q. 
 
 aD.714;S6L. J. Q. a449. And see 
 cases cited with this one in ch. 
 XXVL 
 
 •Sliaw V. Port Phillip (1884), 18 Q. 
 R D. 108; S8 L. J. Q. R 872. And see 
 cases cited with this one in cb. 
 XXVI. 
 
m 
 
 B 
 
 CHAPTER XVII. 
 OSTENSIBLE OWNERSHIP AND AGENCY. ' 
 
 Having now some olear understanding of the principles of 
 estoppel by misrepresentation, let us carry them into the vari- 
 ous departments of the law to which they are applicable. 
 
 Observe first that it is (1) title to property, and (2) liability 
 upon contract, with which we have to deal; or rather the pre- 
 clusion of the assertion of (1) rights to property, and (2) non- 
 liability upon contract. And next, that all the cases arise in 
 one of two ways; either 
 
 1. Some person has appeared to be the owner of property,, 
 when in reality he was npt. This class may be referred to the 
 title "Ostensible Ownership;" or 
 
 (2) Some person has appeared to have authority to do some- 
 thing, when in reality he had not. Such cases will be dealt 
 with under "Ostensible Agency." 
 
 Application of estoppel to such cases might be thought to> 
 involve little difficulty. Twenty years prior to the leading 
 case upon estoppel by misrepresentation,' Bayley, J., in Boyaon 
 V. Coles'* had said with reference to ostensible ownership:' 
 
 "It is laid down as a general rule that the pawnee cannot have a better 
 title than Ihe pawner. And so it is of vendor and vendee, except in the 
 case of a sale in market overt But this rule will certainly not appl}' 
 where the oumer of goods has lent himself to accredit the title of another 
 person by placing in his power those symbols of property which have en- 
 abled him to hold himself out as the purchaser of the goods." 
 
 Lord Herschell, in a recent case,* uses similar language: 
 
 " If the owner of a chose in action clothes a third party with the ap- 
 parent oiimership, and right of disposition of it, he is estopped from as* 
 serting his title us against a person to whom such third party has disposed 
 of it and who received it in good faith and for value." 
 
 The law of ostensible agency, too, has upon many occasions 
 
 been more or less accurately laid down : 
 
 "If a man by his conduct holds out another as his agent, by permitting 
 
 1 Pickard v. Seara (1837), 6 A. & E. 
 469. 
 
 2(1817)6M.&*a28. 88. 
 
 >Ck)ionial Bank v. Cady (1890), 15 
 App. Caa 267; 60 "L. J. Ch. 181. See 
 also Ontario Bank v. MoTaggart 
 
 (1806), 37 Ont 166; Moore v. Metro- 
 politan (1873), 65 N. Y. 47; Mott v. 
 Clark (1848), Pa. St 309. 
 
 ^Colonial Bank v. Cady (IbOO), 15^ 
 App. Cas. 385; 60 L. J. Ch. 141. 
 
08TKS8IBLE OWNERSDIP AXD AOENOY. 
 
 230 
 
 him to act In that character » and deal with the world as a general acent 
 he must be taken to be the general agent of the person for whom he so acti.! 
 and the latter is bound though in a particular instance the agent mav 
 have exceeded his authority. It is even so in the case of a special agent."* 
 "The general rule of law is that wliere a person has obtained the prop- 
 erty of another from one who is dealing with it without the authority of 
 the true owner, no title is acquired as against that owner, even though 
 full value be given and the property be taken in the belief that an un- 
 questionable title thereto is being obtained; unless the person taking it 
 ain show that the true owner has so acted as to mislead him into the be- 
 lief that the p<r8on dealing with the property had authority to do so. If 
 this can be shotcn, a good title is acquired by personal estoppel against the 
 true owner."* ^i- o 
 
 Confusion. 
 
 Although these doctrines seem to be suflBciently clear anil 
 manifestly just, yet much confusion exists concerning them, 
 due largely to the following considerations: (1) Ostensible own- 
 ership and ostensible agency are frequently confounded the 
 one with the other; (3) other principles, to the exclusion of 
 those of estoppel, are in vogue in various branches of the law, 
 notably in the law of real property and clioses in action ; (3) in- 
 stead of ostensible agency, unfounded distinctions between gen- 
 eral and special agents and various other considerations are 
 frequently invoked. 
 
 Ostensible Ownership and Ostensible Agency. — That the dis- 
 tinction between ostensible ownership and ostensible agency is 
 sometimes overlooked may be noted in a judiciallv indorsed* 
 paragraph from such a substantial work as Chi / on Con- 
 tracts : ' 
 
 "It is said that if the real owner of goods suffers another to have pos- 
 session thereof, or of those documc nts which are the indicia of property 
 therein, thereby enabling him to hold himself forth to the world as having 
 not the possession only, but the property, a sale by such a person without 
 notice will bind the true owner. But probably this proposition ought to 
 be limited to cases where the person who had the ponsession of the goods was 
 one who, from the nature of his employment, might be taken prima facie to 
 have had the right to sell.'' 
 
 But, with submission, it is diflBoult to see that the nature of 
 
 the employment of an ostensible owner has anything more to 
 
 do with the case than has the style of his clothes. If the owner 
 
 of goods represents (or assists some other person to represent) 
 
 that a clergyman owns them, and thereby induces an innocent 
 
 1 Or in any other way. 
 
 2 Smith ▼. MoGuire (18d8), 8 H. & 
 N. 5«3; 27 L. J. Ex. 465. 
 
 * Simmons t. London (1802X A. C 
 215; 61 L. J. Ch. 72a 
 
 ♦Higgins V. Burton (1857), 26 L. J. 
 Ex. 842; Johnson v. Credit (1877). 3 
 C. P. P 224; 8 C. P. D. 41; 47 L. J. 
 C. P. 24 ». 
 
 •See 10th ed. 855. and 12th ed. 442. 
 
S40 
 
 08TKN8IBLE OWNER8BIP AND AOEXOT. 
 
 
 !i 
 
 purchaser to pay over bis money, can the result be different 
 from a case in wbicb tbe ostensible owner was a lawyer, a 
 broker, a judge, or a footman t 
 
 Probably the learned writer never intended to say that it 
 would; and tbe explanation of his use of the language quoted 
 is to be found in inattention to tbe distinction between ostensi- 
 ble ownership and ostensible agency. The two things are in 
 the passage confused together. If an owner represents that 
 somebody else is the owner, the nature of the employment of 
 that other person is clearly immaterial. Estoppel by ostensi- 
 ble ownership, therefore, has nothing to do with nature of em- 
 ployment. 
 
 But it may have something to do with ostensible agency. 
 Suppose that I hand over a bill of lading of my goods to a 
 factor with instructions not to sell the goods, and he does sell 
 them; I am estopped from setting up my title against the pur- 
 chaser. But why ? Npt because the factor appeared to be the 
 owner of the goods, for being a factor he did not so appear 
 (every one knew him to be an agent merely); but because being 
 a factor and having possession of indicia of title to ray goods 
 with my assent, he appeared to have authority to sell. Note 
 that if the person who had the bill was not " one who from the 
 nature of his employment might be taken prima facie to have 
 the right to sell," there would have been no appearance or au- 
 thority to sell, and no estoppel. There might of course be 
 ostensible ownership.^ 
 
 "Nature of his employment" may therefore be a factor in 
 cases of ostensible agency, but can have nothing to do with 
 ostensible ownership — with a case in which the owner has en- 
 abled another " to hold himself forth to the world as having not 
 the possession only but the property." 
 
 Confusion in Factors Act. — Some of tbe provisions of the 
 English Factors Act proceed upon the principle of ostensible 
 ownership, and others upon the principle of ostensible agency. 
 Some of tbe clauses provide that sales and other dispositions of 
 goods, made under certain circumstances by persons intrusted 
 with goods or documents of title to goods, shall be as valid " as 
 if such, person were the owner of the goods; " while others de- 
 clare that sales shall be " as valid as if he (the person selling) 
 
 > Bee the point referred to in oh. XXU. 
 
as 
 
 OSTKNSIBLE OWUKHflHIP AND AGENCY. £41 
 
 Z'^Zl^f' '"'''""^ '^ ^'^ "^'^''^ '' '^^ ff^o^« to make 
 To some extent tlie distinction bettveen cases in which the 
 vendor appears to be acting as agent and those in w ch he 
 appears to be acting as owner is in the acts properlv observed 
 In clause 2. for example, which provides ior Ifs of s lo ' 
 etc., by persons whose business is that of an agent, the lanKuatfe 
 IS appropnate-the transaction is to "be as valii as f he w!! 
 
 same But there is not the same consistency in the clauses 
 
 of goods. Here one of the clauses, 7 (1), proceeds upon osten 
 
 ^/W in -The Sale of Goods Act --In «'The Sale of 
 
 hi. conductVeciidSte^^^^^^^ i. ^l 
 
 The draftsman of this provision had in view Ihe tse of an 
 
 agent with ostensible authority to sell, and he prov^ed that 
 
 'autirto' rn'"^^ f-- ^--Ving the exiLnce of e 
 b« 1. 1, t ^' overlooked the fact that an owner mav 
 
 be estopped by ostensible ownership as well as bv ostensTb'e 
 agency, and made no pr- vision for the case ^^^^n^^'^le 
 
 Ooyusion EUewhere. - The following is a fair example of 
 mai^v ^ssages m which the same confusion is apparent:'^ 
 
 hJm ipso facto iu law towards thLWir "• ^^'^ Posfewion thereof, gives 
 fectUHllywIl or plS«thVil?*Sf/..|?K°«^ '«•»•» the right toef" 
 absolute owner of t^hesfsecSe- ««,??.«« J'" V"« ^^% "««"* ^he apparent 
 ownership, he preoIuS hiSf frZ hi^^'?"^"*^.**" '*™ a" 'he »n& of 
 i««a ^fe'tranfferT Or toSt i^in aio^^^^^^^^ 
 
 same.position aVifhe ^^VZicel^XteZZV' ^h" "gent 8tand8Tn"t~he 
 lwiththeBecurffi;KrS;*'a"Urn^gTt^^^^^^^^^^^^ 
 
 » «8 Vic. (Imp.X ch. 45. § a (1>. And 
 see Sg 8.9.- 
 
 'Similar confusion is to be found 
 Jn the Ontario statute (R a, oh. lUOX 
 by which it is declared that an asrpr?* 
 intrusted with possession «'8han be 
 <l«»med the owner . . . notwith- 
 standing the purchaser has notice 
 16 
 
 that he is contracting only with an 
 agent" In such case the assump- 
 tion ought to be of authority to sell, 
 and not of ownership. 
 
 * 56 & 5? Vic. (Imp.), oh. 7i, § ai; 08 
 Vic. (Man.X ch. 25. § 81. 
 
 * Young V. MacKidtr (1895), 25 & G 
 C»n. 879. 
 
242 
 
 0STEN8IBLB 0WNBB8HIP ASD AQBMOY. 
 
 1^ 
 
 I 
 
 Observe that "the agent^* 1% said to become "the apparent 
 absolute owner," wherefore the owner is estopped "from dis- 
 puting the title;" and this is put "in another way" bysayiny 
 that " the agent stands in the same position as if he had a power 
 of attorney from the owner." This is not another way of put- 
 ting the same case, but is a remark with reference to a totally 
 different case. 
 
 Another example occurs in the third quotation at the com- 
 mencement of this chapter. It is said that 
 "if the owner of a ohoee in action clothes a third party with the apparent 
 ownership and right of disposiition of it, he is estopped." 
 
 If the third party has the "apparent ownership" he would 
 of course necessarily have the apparent " right of disposition of 
 it." The word or substituted for " and " would probably more 
 accurately express the idea grasped at. The sentence would 
 then apply to the two cases of ostensible ownership and osten- 
 sible agency, instead pf redundantly to one of them only. 
 
 Confusion — A Further Point.— In distinguishing between 
 ostensible ownership and ostensible agency, special care must 
 be taken in cases in which (as is possible) the ostensible owner 
 may be in reality an agent — confusion is more probable in such 
 oases. An example will illustrate: An agent of a policy-holder 
 instructed a broker to collect from the insurance company ; thfr 
 broker thought that the agent was the real owner of the policy ; 
 the broker collected and set off against the agent; held, that 
 the principal could not compel him to do otherwise.' The agent 
 here, although an agent, was the ostensible owner; the broker 
 dealt with him upon the faith of such appearance; the real 
 owner having permitted the appearance, was estopped. Bowen,. 
 
 L. D*., said : 
 
 " If A. has allowed his agent B. to appear in the character of a principal 
 he must take the consequences." 
 
 Benefit of Distinction. 
 
 This then is the first point to which to direct attention and 
 indeed to insist upon, namely, the difiPerepce between ostensible 
 ownership and ostensible agency. For the distinction, although 
 
 » Montagu v. Forwood (1893). 2 Q. R Bowring (1860). 7 C. B. N. S. 851 ; 29^ 
 
 850. For other cases of this nature L. J. C. P. 80: Smith v. Urouett* 
 
 see Ex parte Dixon (1878), 4 Ch. D. (1885), 3 Man. 814. 
 183; 46 L. J. Bk. 20; Ramazotti ▼. 
 
08TENHDLB 0WNKS8HIP AND AOENCT. 
 
 ■uffloienti}' obvious, is, ps we hare seen, very frequently disre 
 garded, and its oversight involves much confusion. Observa- 
 tion of it would relieve several departmenU of the law of some 
 diffloulty. Take a few examples: 
 
 NegotiahU Inttrumentt.— A note is signed in blank ; author- 
 ity is given to « Galley " > to fill it up for i-100 and negotiate it; 
 Galley fills it up for £500 and passes it on; and the signer is 
 (we shall say) lUble for the £500. The reason given for this 
 IS that 
 
 world t1« bill aa accepted by him. He enSbles his agen?'to repfeinUi S^^ 
 rlii^^SLTn iw*''""!^ with a general authoritvran I he cSnn^tSay^ 
 a bona fide holder for value who has no notice of any secret otiDulati .^ 
 m^« M*"* '^*" -eoret stipulations between himself a^ the a£nt.an^ 
 ^0.-^/^*". **° * principal in the case already put. where hS enables hi 
 l^Sn.^'^^'^^tSS^^^^^ *"• »•" •*"•" '« represe'nt^im«,lfri,ti"n'g u^de? 
 
 But the reason is not always this. Everything depends upon 
 the circumstances of the case. Did the transferee know that 
 the bill Bad been given to Galley in blank ? Then he knew that 
 Galley was an agent; the case is one of ostensible agency; 
 possession of the bill is evidence of anthority to fill it up; Galley 
 therefore appears to have the requisif.j authority, and the prin- 
 cipal is estopped from asserting otherwise. But if Galley had 
 filled up the bill before offering it in negotiation, then the trans- 
 feree knew nothing of agency; he believed that the bill was 
 issued in completed form; he believed Galley to be the owner 
 of the note; and the law of ostensible agency has nothing to 
 do with the case; the question becomes one of ostensible owner- 
 ship. This distinction has often been disregarded. The sub- 
 ject will be dealt with in a subsequent chapter.* 
 
 Priorities.— In another department of the law we meet with 
 the two following cases: 
 
 PerryHerrick v. AUwood*—K legal mortgagee of real estate 
 handed over the deeds to the mortgagor, with the intention of 
 enabling him to raise £15,000 upon them. The mortgagor bor- 
 rowed £50,000 upon them from one who knew nothing of the 
 mortgage. Held, that the true owner of the deeds (the legal 
 
 > Russell V. Langstaffe (1780), DoHg= i r* jry.w. 
 
 *^i- ^ „ , . *(1857) 25 Beav. m-, 2 De G. & J. 
 
 ^Montague v. Perkins (1853), 23 21; 27 L. J. Ch. 12L 
 I* J. C. P. 187. 
 
244 
 
 OSTENSIBLE OWNEBSHIP AND AOENOT. 
 
 mortgagee) was the one to suffer. The case is one of ostensible 
 ownership. 
 
 BrookUahy v. Temperance} — The owner of certain title-deeds 
 
 employed an agent to raise money upon them; and at the same 
 
 time directed him not to borrow more than a specified sum. 
 
 The agent went into the market and, upon the deposit of the 
 
 deeds, obtained a loan in excess of the amount prescribed from 
 
 a hmafide lender who knew of the agency, but who had neither 
 
 notice nor knowledge of its limitation as to amount. The agent 
 
 pocketed the excess. Held^ again, that the owner of the deeds, 
 
 and not the lender of the money, was the one to suffer. But 
 
 is that right? The ca^'e is one of agency, not of ostensible 
 
 ownership as was the previous case, but the distinction is not 
 
 observed. Indeed, Lord Herschell said: 
 
 "I confess I am quite unable to see any distinction in principle between 
 the two cases which would render it right, proper or reasonable that in 
 the former case a lender should not be bound by a limitation of authority 
 of whioh he was unawf^e, but that in the latter case he should be so 
 bound." • 
 
 With great respect for the opinion of so eminent a judge, 
 the present writer cannot but think that the distinction is very 
 apparent. In the one case the lender of the money believed that 
 he was dealing with an owner. In the other case he believed 
 that he was dealing with an agent. To the latter of these the 
 ordinary law of principal and agent applies; but to the former 
 it has no application, for the case is one of ostensible owner- 
 ship. In the agency case the law says to the lender: "You 
 are aware that you are dealing with an agent. You must, as 
 in other cases of agency, ascertain, at your peril, the extent of 
 the agent's authority." In the ownership case such language 
 is altogether inapplicable; for the lender knows nothing of a 
 principal or of an agent. He believed in ownership, and had 
 no suspicion of agency. \ 
 
 But what is the effect of such a distinction? Observe that' 
 in both cases the real owner of the deeds has not personally 
 pledged them, and that no one having his authority has done 
 80. If, then, the real owner is to be bound by the pledge of 
 the deeds, it must be because he is estopped from denying that 
 the person pledging had power to do so. Now he can be es- 
 topped onij if he is iu some way responsible for the fraud of 
 
 I (1895) A. G 181 ; 64 1* J. Ch. 487. 
 
 * ! ' 
 
OSTKKBIBLK OWKBMHIP ASD iOEKOT. 345 
 
 the person pMpg-it he has assisted the misrepresentation 
 
 ■ th/rf "'^"^'""uP"'**- I-l^o^lHerschell'sZ^rnwhich 
 
 ^.^^r '".""" '"" P'"^- "« "^ Oealing with was an 
 
 agent) the r^n.ng then wonld have to follow this oonrst- 
 
 th~ •''"■'*"°,"'°'"°^ '"' ■««■" to bofrowa certain snm 
 the agent .mproperly represented that his authority was mora 
 ex^ns,ve than it really was, the lender, npon the & tMs 
 misrepresentation, changed his position; the real owner was in 
 some way responsible for the misrepresentation -had done 
 
 topped from denying it, trath." But what did he do? (1) He 
 gave authority to borrow a certain sum of money and th^ 
 question then is. Does that i .ny way assist the mtW^^^! 
 tetion that the agent had power to borrow a larger amZt J 
 Suppose that the principal had authorised the a^ut to sign" 
 promissory note for £100, and the agent, misrepresenUrhit 
 authonty, signed his principal's name to a note for £500? the 
 principal won d dearly not be liable. And the rearnVs'that 
 giving authority to sign for the smaller amount in nTwl t 
 siste a misrepresentation of any greater authority. (2) C 
 does the agent's possession of the deeds render any assistant 
 o the misrepresentation as to the amount to be borrowed 
 
 thatT"" ^ °"' T" "' "■« "««'' "'"""'h" may imply 
 tha the possessor has advanced money npon them, but no^ 
 
 ouZTh ''■ VT' ""' °' '™P'" "^""y' «°d the -^'oning 
 ought to be as fo lows: "The owner did not himself borro>f 
 the money, nor did any one having his authority borrowT 
 neverthele^, ,f he has represented or assisted the misrTp II 
 
 ZtTLV^" T""'" '-"'"'"''ority, he is estopp'ed, 
 but he did neither the one nor the other, and he is therefore 
 not responsible for nor bound by the act " ■ 
 
 The other case (PerryB^rrick v. Attwood) is entirely differ- 
 ent. In It the mortgagor represented himself to be the nnin- 
 cumbered owner of the property and the title-deeds. Upon 
 
 this 1<AntiaoAnf«»: *U- %-■, . Vjpuu 
 
 j..._.„t„ ,„„ ,gjj^jQ^ coanged his position; the first 
 mortgagee assisted the misrepresentation and made it credible 
 
 « ^'^Jr^LTcrr" ""'"''' '" ''"'•''"•^ '' M<»tgo„.ery (1896, 
 
\'i 
 
 246 
 
 OSTENSIBLE OWNEB8HIP AND AOSNOT. 
 
 to all men by handing over to the mortgagor all the title- 
 deeds. He was therefore rightly estopped. The case is one 
 of ostensible ownership. 
 
 Sale of Goods.— In still another department an erroneous de- 
 cision was given because of the confusion of ostensible owxyer- 
 ship and agency.* The owner of a table-top sent it to a dealer 
 in such things, to be sold upon certain specified conditions. The 
 dealer disregarded his limitations, and the owner was held not 
 to be bound by the sale. The case was one of ostensible owner- 
 ship, and the owner ought to have been estopped by the assist- 
 ance rendered to the dealer's misrepresentation of ownership. 
 If I permit my goods to appear upon a bargain counter, I am 
 surely estopped by a sale, whatever my instructions may be. 
 The judgment, however, proceeds upon ostensible agency, and 
 results in favor of the owner. "Willis, J., said: 
 
 " The true test is, I take it, whether the authority given in fact is of such 
 a nature as to cover a right to deal with the article atalL . . . The 
 foundation, however, of the whole thing is that the agent should be au- 
 thorized to enter into some transaction; " 
 
 and inasmuch as there was no authority at all to sell (the con- 
 ditions not having arisen), the learned judge decided that the 
 owner was not bound by the sale. 
 
 But the test and foundation of ostensible ownership is not 
 this. Nor is it true even of ostensible agency that the agent 
 must " be authorized to enter into some transaction." Osten- 
 sible agency proceeds upon misrepresentation, and there may 
 be misrepresentation as to the existence as well as to the extent 
 of agency." Lord Ellenborough's dictum is good and reason- 
 able law: 
 
 "If the principal sends his commodity to a place where it is the ordi- 
 nary business of the person to whom it is consigned to sell, it must be in- 
 tended th«it the commodity was sent thither for the purpose of sale. . . . 
 When the commodity is sent in such a way and to such a place m to ex- 
 hibit an apparent purpose of sale, the principal will be bound and the pur- 
 chaser safe." * . . 1 
 
 The necessity for a clear understanding of the pnnciples under 
 
 discussion was very apparent in the recent case of Watteau v. 
 
 Fenwiok* One would think that nothing could be clearer than 
 
 the following propositions: 
 
 " Where there is neither agency in fact, nor any holding out as agent, 
 
 1 Biggs v. Evans (1894). i Q. a 89. » Fiokeiing v. Busk (i82i), 15 East, 
 
 See also the reference to Watteau v. 4a And see cases cited with this 
 
 Fenwick, ch. XL one in ch. XXI. 
 
 « See ch. XXVL * (1898) 1 Q. B. 848. 
 
1TBN8IBLE OWKBBSHIF AND AOENOT. 
 
 247 
 
 and the dealing in with the party as prinoipal, there can be neither undis- 
 closed principal nor prinoipal by estoppel."* 
 
 In Other words, a man cannot be liable upon contract nnless 
 <1) he himself makes the contract; or (2) some one with his au- 
 thority, or (8) some one who appears to have his authority, 
 makes it for him. 
 
 But these propositions are practically denied in the case in 
 hand, the court being misled by a false analogy. The facts 
 were that a brewer allowed his manager to appear as owner of 
 the business, but forbid him to buy goods from third persons; 
 the manager did buy from a person who believed the manager 
 to be the owner; and it was held that the brewer was liable to 
 the vendor for the price of the goods. 
 
 Now the only misrepresentation (the only false appearance) 
 was as to the manager's ownership. The brewer, therefore, 
 might well be estopped from denying such ownership; and if 
 judgment had been obtained for the price of the goods against 
 the manager, the vendor might very well have seized under his 
 -execution the goods in the shop as belonging to the debtor. 
 But there could be no Uahility on the part of the brewer for 
 the money; for (1) he did not contract, nor (2) did any one 
 having his authority contract, nor (3) did any one having the 
 appearance of his authority contract. Willis, J., however, said : ' 
 
 "The principal is liable for all the acts of the agent which are within 
 the authority usually confided to an agent of that character, notwithstand- 
 ing limitations as between the prinoipal and the agent the principal nuts 
 tippn that authority. It is said that it is only so where there has been a 
 holding out of authority, which cannot be said of a case where the person 
 supplying the goods knew nothing of the existence of a principal But I 
 do not think sa Otherwise in every case of undisclosed principal, or at 
 least in every case where the fact of there being a principal was undis- 
 •closed, the secret limitations would prevail and defeat the action of the 
 person dealing with the a^nt, and then discovering that he was an agent 
 «nd had a principal. But m the case of a dormant partner it is quite clear 
 law that no limitations of authority as between the dormant and the active 
 partner will avail the dormant partner as to things within the ordinary 
 authority of a Mrtner. The law of partnership is on such a question noth- 
 ing but a branch of the general law of principal and agent; and it appears 
 to mo to be undisputed and conclusive on the point now under discussion." 
 But the distinction between the two cases is clear: A part- 
 ner, although dormant, is a member of the firm, and when a 
 contract is made by an active partner the dormant member is 
 as much a party to it as if specially named in it. If, there- 
 
 1 Per Osier, J., in Beoherer v. Asher 
 <1896), 38 Out App^ 210. And see 
 note in 9 Law Quarterl: -fov. 111. 
 
 « Watteau v. Fenwiok v' ii/8), 1 Q. R 
 
 848L See alao Edmunds v, Bushell 
 (1865), L. R 1 Q. B. »7; 85 Lu J. Q. a 
 20; Hubbard v. Tenbrook (1889X 124 
 Pa. St 291; 18 Atl. R. 817. 
 
94S 
 
 OSTENSIBLE OWNERSHIP AND AGENCY. 
 
 I. 'itil 
 
 fore, the contract be within the ostensible purposes of the dtm, 
 the dormant partner is estopped to set up secret arrangements.' 
 The appearance of real authority in the active partner is the 
 determining factor; and the case is not outside the three' requi- 
 sites of liability above referred to — it is an example of the 
 third of them. The language of the learned judge indeed jo 
 indicates when he says that the dormant partner will be liable 
 "as to things with respect to which there was appearance of 
 authority to contract." 
 
 The brewer's case is entirely different. In it the brewer wa» 
 not a party to the contract --as was the dormant partner. It. 
 was not therefore a case in which a certain person, being ad- 
 mittedly and, as a mere matter of fact a party to the contract, 
 the question is whether there had been the appearance of au- 
 thority to put him in that position; but a casein which he 
 was not a party to the contract at all, and the question ia 
 whether he ought to be liable upon it. He was not a party,, 
 because (1) he had not bade the contract; and (2) no one with 
 his authority had made it for him; and (8) no one having any 
 appearance of his authority had pretended to make him a party 
 to it — how then could he be liable? 
 
 Ostensible Ownership. 
 
 Before proceeding to practical exposition let us have a cleai* 
 idea of estoppel by ostensible ownership. Why is it that thfr 
 real owner of property is sometimes bound by a sale of it made 
 by another person— by a person who had no authorit;. from 
 the real owner to sell and who did not pretend that he had 
 any such authority? 
 
 The reason is not, as is sometimes said, that the true owner 
 has by his conduct really assented to the sale; that he is in 
 some sense a party to it; and that therefore he is as much 
 bound by it as if he were the sole vendor. No doubt the cir- 
 cumstances may iri some cases warrant the implication of the 
 true owner's concurrence in the sale. It may even be that such 
 concurrence ought to be inferred in .ery many cases in which 
 it is not. But so long as there is a case in which the assump- 
 tion cannot be made, we must find some scientific ground upon 
 which we are entitled to say that, although the tru^ owner waa 
 not a party to the sale, yet he is bound by it. 
 
OSTENSIBLE 0WNBB8HIP AND AGENCY. 249 
 
 ^ Kor is the reason that the true owner has by his conduct in 
 effect authorized the sale: that the ostensible owner has, in this 
 view acted under the authority of the true owner. There are 
 indeed ca^ m which the principle of ostensible agency has to 
 be invoked; but for cases (1) in which there is no relation be- 
 tween .rue owner and vendor, and (2) in which the purchaser 
 
 th7« ^^n?"'? ^.^«'^«^«J" '^^ «"«tence o' any such relation, 
 this explanation is insufficient. 
 
 The real facts point to the true conclusion. They are : (1) The 
 vendor represented that he was the owner (not that he had au- 
 thority to sell); (2) the purchaser believed that representation 
 to be true; (3) upon the faith of that representation the pur- 
 chaser changed his position; (4) tho true owner in some way 
 assisted the misrepresentation of ownership; and (5) he is es- 
 topped by reason of this assistance. 
 
 TJniveesal AppLxoABiLnr. 
 There is nothing in the statement of this principle that would 
 indicate it. applicability to one kind of property rather than 
 another; and it will be one of the chief objects of the succeed- 
 ing chapters consistently to carry it through the various de- 
 
 The difficulUes in the way, however, are almost overwhelm- 
 ing. Although the justice that underlies the law of estoppel 
 has always m some degree actuated the judicial mind, yet time 
 and multiplicity of cases were essential for th^ development of 
 Its true principles; and it is not surprising that that develop- 
 ment should in various departments have taken somewhat dif- 
 terent courses, and sometimes gone awry. 
 
 For example when estoppel is mention^ in connection with 
 the law of real property, the mind at once reverts to the one 
 case of a true owner standing by while another person pur- 
 
 tnTi "T TT' """ "''''' ^""*^^"^^ "P^" t^« by-stander's 
 land. And when questions of priorities arise we think not of 
 
 ph^Tf7tThtT''''T'"°"'*'' ^»*"PP«'»Po» which he decid'ed"the 
 decision of Lord Cottenham was re- 
 
350 
 
 OSTENSIBLE OWNERSHIP AND AOENOT. 
 
 estoppel, but of the old maxims, " When the et, '<« are equal,'' 
 etc., "Prior est tempore" etc., and we make in^ .iry as to the 
 locality of the deeds. An effort will be made to supersede these 
 maxims by the law of estoppel. 
 
 From the subject of bills and notes, estoppel is almost unani- 
 mously excluded. "Negotiability," in sharp antagonism to the 
 general law, is said to rule this department. It is the author's 
 view, however, that the " law merchant " must give place to es- 
 toppel by ostensible ownership and agency, and that thereupon 
 harmony will replace antagonism. 
 
 Questions of title to goods obtained by means of bills of lad^ 
 ing or other documents of title are now decided (1) by analogy 
 to the law of goods themselves; (2) by considerations of semi- 
 negotiability; and (3) by Factors and other Acts. The view 
 will be advanced that the law as to goods acquired by means 
 of paper title ought not to be different (for the purposes in 
 hand) from the law a^ to real estate, title to which is always 
 documentary. In other words, that the principles of estoppel 
 by ostensible ownership and agency apply to both alike, as well 
 as to all other sorts of property. 
 
CHAPTER XVIII. 
 
 OSTENSIELS OWNERSHIP AND AGENCY -LAND -THE LEGAL 
 
 ESTATE. 
 
 Few rules are better known, and thought to be more firmly 
 established, than that which prescribes that where the equities 
 are equal the law will prevail. Yet we shall see that it is open 
 to at least four objections: (1) that it owes its origin to imper- 
 fect administration of justice; (2) that all reason for its ex- 
 istence ceased with the recent removal of that imperfection; 
 (3) that it is an irrational, incongruous, and disturbing factor 
 inour system of jurisprudence; and (4) that it is inconsistent 
 with the modern principles of estoppel by ostensible owner- 
 ship, by wbich it ought to be supplanted. 
 
 From the standpoint of estoppel (which heretofore, however, 
 has had little place in the discussion of the subject) we would 
 say that, as between two competing grantees of an estate 
 (legal or equitable is wholly immaterial), one of them, namely, 
 the first alone, can have it; and that, if the second is to be 
 preferred, it must be not because the second has the estate 
 (for he has it not), but because, for some reason, the first is 
 estopped from setting up his priority. 
 
 The rule above quoted, however, proceeds in wholly differ- 
 ent fashion. Note three points: 
 
 (1) It inquires into the equities of the competitors (that is, 
 into their respective merits'); and, finding them to be equal, 
 awards r,t ^xity, not to the man who really has the estate in 
 question (having fii-st got it), but to the one who, through 
 chanoe, luck, or otherwise, has or can grab the legal estate — 
 whether he be first, second, or fortieth. 
 
 (2) Nor is this the fuU oflFense of the rule; for in examining 
 into the merits of the contestants it is held that "nothing bat 
 
 7 -- C3 it'nvtj iivgiijjcjiuc, veiiiuQsii cue pnonw 
 
 i Rice V. Rice (1858), 3 Dr. 78; 28 L. J. Ch. 28»; Bailey v. Baroes (1894X I 
 Ch. 25; 68 L, J. Ch. 781 
 
252 
 
 OSTENSIBLE OWNERSHIP AND AOENCT. 
 
 I I 
 
 Of the legal claimant." « There are therefore different balances 
 wherein to weigh the merits of legal and equitable claimants. 
 The merits may be far from really equal; the legal claimant 
 may, as we shall see, be negligent in very high degree; the 
 equitable claimant as diligent and as careful as possible, and 
 first m point of time; and yet a happy dutch of the legal es- 
 tate will discomfit the one who has not only the greater merit 
 but also the natural priority. * 
 
 (3) The phrase just used («a happy clutch") is not inappro- 
 priate; for the doctrine that the legal estate carries priority 
 with It has led to this singular and anomalous result, that it 
 resembles the greasy pig which being, in general scramble, 
 seized by some lucky competitor, gains for its captor the prize, 
 provided that he h^s seized it according to rule, and has not. 
 too soon let it slip. 
 
 ^HB SCBAMBLK. 
 
 This third point may be dealt wich first. Hooper v. Earri^ 
 son gives a good view of the sport. A first mortgagee had 
 the legal estate, and a power of sale with the usual declara- 
 tion of trust as to surplus moneys. He devised the estate to 
 the third mortgagee, who now having the pig (and for that 
 reason only) became entitled to priority over the second mort- 
 gagee. In ignorance of the rules of the game (as he after- 
 wards learned) this third mortgagee sold the property under 
 the power in the first mortgage. The second mortgagee then 
 contended that he was back again in second place, for the 
 contest now was over the purchase-money, and not over the 
 land - the pig having foolishly been let slip. If it were over 
 the land, of course the third mortgagee was prior, for he 
 had had the legal estate. But if over the money, and the piV 
 gone,—? Sir W.Page Wood said: 
 
 V «S".Wi^*i'll'?_."_°':^«*8?«),°» advanced the money (to 
 
 of his own pocket, and have held the 
 
 pay off the first mortgagee) out 
 1 Plumb V. Pluitt (1791), 3 Anstr. 
 
 AACi ». A « '■ Muokleston (1872), I* R. 8 Ch. Adu 
 
 (1801), 6 Vea. Hi, 190; Martinez v. Whipp (1884), 26 Ch D 494- MIT 
 
 Cooper (1826), 2 Rusa 198; Farrow Ch. 6S». ' * 
 
 V. Rees (1840). 4 Beav. 18: Howit ^ !»/io««v «, «- -. » ... . , 
 
 Loosemore(1851).9Ha^^458; 21 ll j! BateT;! ;«^esV894U cf^ S^ 
 
 Ch. 69; Colyer v. Finch (1856), 6 H. 68 1* J. Ch. 7a ^«- »«» «». 
 I* C. 906; 2eU J. Ch. 65; Dixon v. 
 
LAND — THE LEGAL ESTATE. 
 
 253 
 
 whol6 legal estate for the two debt& ... Or he mlRht have raised 
 the money by transfer of the mortgage, and have procured the Derson 
 ^nfJ!^\ *''* legal estate to execute a declaration t?iat he would KK 
 
 «?H?J*l'*l,"''°"!?'u*?'?"i'*£'°*'^^?»«» ''»*"• »«'• secondly, to secure that 
 of Harrison; and had he taken this course Harrison would now be the 
 person having the best right to call for it . . It is said «iat this 
 would renderlt a mere matter of machinery: but that in truth is the re? 
 suit of the whole doctrine of this court about the legal estate, and a vert 
 singular machxney it sometime* u. It is merely a question of how far J 
 ^J^^i"^ °,i"tJf'*"?"'!^ ^'f^Qedto lay hold of this tabula in nau- 
 fragtoMsallowai to aeixe it Even after bill filed bv a second incum- 
 brancer he is allowed to seize it, but it is on that he rests. It would aeem 
 
 2/!!!S'**17r",f'^J???*"J!'i'i? ^y. ^WcfcrW. court entertain, of not 
 allomnp nghtato be dw^wrbcd bp third persona; and there was some legal 
 hesitation and doubt as to allowing a person holding the legal estate to 
 hand it over to the one or the other, as he thinks fit All that ia a verw 
 Pfculiar part ofthia doctrine; but tlie court has never gone beyond this; 
 and if It does not find the legal estate interposed it deals with tie money 
 according to prioritiea" ujuuc^ 
 
 The pig had been lot slip, priority had gone with it; the 
 court did "not find the legal estate interposed ;» and Harrison 
 was relegated to the third place, from which, indeed, nothing 
 but the pig theory had ever removed him.' 
 
 The rules which govern the scramble for the legal estate; 
 under what circumstances it is fair to seize it; » at what time 
 it may be seized; * what persons may, or may not, help you to 
 seize it;» whether or not you must give value for it; to what 
 extent it must be complete when you get it;* and what per- 
 
 ^ Freely translated in this ccnnec- 
 tion— pig. 
 
 * "Being purchasers for value with- 
 out notice they cannot succeed un- 
 less they can make out that, having 
 an inferior equity, they have clothed 
 it with a legal interest" This was 
 said with reference to the purchase 
 of share& Per Kay, L. J., in Powell 
 v. London (1893). 3 Cb. 664; 63 L. J. 
 Oh. 8031 
 
 * Saunders v. Dohew(1693),3 Vern. 
 871; Willoughby v. Willoughby 
 (1787), 1 T. R 768; Allen v. Knight 
 (1846), 8 Ha. 373; 15 U J. Ch. 430; 16 
 L. J. Ch. 870; Baillie v. McKewan 
 (1865X 35 Beav. 177; Dodds v. Hills 
 (1865X 3 H. & M. 484; Pease v. Jack- 
 son (1868X L. R. 8 Ch. 576; 87 I* J. 
 Oh; 735; Piloher v. Rawlisjs {tfl70^ 
 L. R 11 Eq. 58; L. R 7 Ch. SS*- •) 
 L. J. Ch. 105; 41 I* J. Ch. 485; ^.^.^ 
 Dial Bank t. Hepworth (1887), 86 
 
 Ch. D. 86; 56 L. J. Ch. 1089; Taylor 
 v. Russell (1891), 1 Ch. 8; (1893) A. C. 
 344; 60 L. J. Ch. 1; 61 L. J. Ch. 657; 
 London v. Goddard (1897), 1 Ch. 048; 
 68 U J. Ch. 361; Merchante' Bank v. 
 Morrison (1873), 19 Gr. 1. 
 
 * Dodds V. Hills (1865), 3 H. & M. 
 434; Baillie v. McKewan (1865), 35 
 Beav. 177; Reg. v. Shropshire (1873), 
 L. R 8 Q. B. 430; L. R 7 H. L. 496; 
 45 L. J. Q. EL 31; Blackwood v. Lon- 
 don (1874), L. R 6 P. G 93; 43 L. J. 
 P. C 33; Mumford v. Stohwasser 
 (1874), I* R 18 Eq. 556; 43 L. J. Ch. 
 694; Harpham v. Shaoklock (1881), 
 19 Ch. D. 307. 
 
 •Sharpies v. Adams (1863). 33 Beav. 
 218; Maxfleld ▼. Burton (1873), L. R 
 17 Eq. 15; 43 L. J. Ch. 46; Mumford 
 
 Ti «i-jrti¥B33cr [losthlj. it. io iiq. ooo; 
 
 43 L. J. Ch. 6»4-, Garnham v. Skip, 
 per (1885), 55 L. J, C\u 36a 
 « Roota v. Williamson (1888), 88 Ch. 
 
254 
 
 OSTENSIBLE OWNERSHIP AND AOENOY. 
 
 li t 
 I? 
 
 f. li 
 
 sons have the best right to seize it,' do not interest as here. 
 They may in all their subtle refinement be found in the oasea 
 noted belovir as well as in countless others. 
 
 A Oenebal View. 
 
 A more general view of the operation of the mie nnder oon-^ 
 sideration is furnished by the case of C(we v. Cave.* Trust 
 property was, in fraud of the beneficiaries, mortgaged by the- 
 trustee to several innocent persons in succession. The first of 
 these, of course, alone had the pig; that is, the legal estate. 
 His mortgage was good against the beneficiaries. The others 
 hail no pig, but equitable estates only. Their mortgages were 
 bad as against the beneficiaries.' Why should the law not be^ 
 the same in both cases? In both the trustee did the same wrong. 
 In both the beneficiary had to bear the same (if any) blame^ 
 namely, that he had a fraudulent trustee. In both cases the^ 
 mortgagee was innocent, paid his money and completed his 
 transaction. But in the one case the courts decide for him, 
 and in the others against him. And if the man with the pig 
 had chosen to hand it over to a third, fourth or fifth incum- 
 brancer the courts would have declared in favor of the one so- 
 selected. Ubi pig, ibi priority. 
 
 Contrast with this the result to be arrived at by the applica- 
 tion of the manifestly reasonable principles of the law of es- 
 toppel by ostensible ownership: 
 
 "Where the owner . . . has lent himself to accredit the title of an- 
 other person by placing in his hands those symbols of property which have 
 enabled him to bold him,3elf out as the purchaser," * 
 
 he is estopped as against any person who upon the faith of 
 the ostensible ownership has changed his position. Applying- 
 this principle to Cave v. Cave we should say that the benefici- 
 aries were estopped as against all the mortgagees from setting 
 up their title. They had permitted their trustee to pose as the 
 owner of the land; upon the faith of his ostensible ownership- 
 
 D. 485; 57 L. J. Ch. 985; Powell v. 
 London (1893). 1 Cli. 610; (1898) 3 
 Ch. 555; 88 L. J. Ch. 803. 
 
 1 Moore v. Northwestern (1891X 3 
 Ch. 599; 60 L. J- Ch. 687; Newman 
 V. Newman (1885), 88 Oh. D. 674; 51 
 L. J. Ch. 598. 
 
 2(1880) 15 Ch. D. 639; 49 L. J. Ch. 
 605. 
 
 * And see Re Morgan (1881), 18 Clu- 
 D. 99; 60 L^ J. Ch. 651. 834. 
 
 ^Boyeon v. Coles (1817). 6 M. & S. 
 84. The language refers to goods, 
 but the principle is the same as to- 
 all property. 
 
LAND — THB LEOAL ESTATE. 
 
 855 
 
 innocent persons had been induced to change their position; 
 therefore estoppel ; pig consideration — zero. 
 
 The present law, however, declares that the beneficiaries and 
 the mortgagees have etjual merits; it takes no notice of the 
 doctrine of estoppel by ostensible ownership which would hold 
 them to be most unequal; and everybody's merits being thus 
 said to be equal, it adjusts the rights of the parties according 
 to the ubi pig ibi priority notion, and not with the slightest 
 regard to any principles of justice or fair play. 
 
 It is with reference to difficulties and anomalies such as these 
 that the language of Lord Selborne in Dixon v. Muokleston^ is 
 peculiarly applicable : 
 
 "It is impossible to reflect on this injustice witliout finding very cogent 
 arguments in favor of soane attempt to improve the state of the law as to 
 title to real estate, and to get rid of the ditBcuIty which arises from the 
 distinction between a legal and an equitable estate; " 
 
 as also the language of Lindley, L. J. : » 
 
 "The reasoning is technical and not satisfactory; but as long ago as 1728 
 the law was judicially declared to be well settled and only alterable by act 
 of Parliament See Brace v. Duchess of Marlborough."* 
 
 The Imperial Parliament at one time did enact that * 
 
 "After the commencement of this act, no priority, or protection, shall 
 be given, or allowed, to aqy estate, right, or interest, in land, by reason of 
 such estate, right, or interest, being protected by, or tacked to, any legal 
 or other estate, or interest, in such land; and full effect shall be given iu 
 every court to this provision, although the person claiming such priority, 
 or prot«ctton, as aforesaid, shall claim as a purchaser for valuable oonsid* 
 eration and without notice." 
 
 But the statute was short-lived. It was repealed at the en- 
 
 suing session.* The scramble still goes on. 
 
 Origin op the Dootbinb. 
 
 As has been already said, the priority accorded to the legal 
 
 estate originated because of the defective administration of 
 
 justice. Equitable estates and interests were those 
 
 "which were enforceable under the separate jurisdiction of the courts 
 of equity, and which in the courts of common law were either not enforce- 
 able, or if enforced were enforced only as contracts giving a right to dam- 
 ages for a breach, not as giving any specific claim to or over the lands or 
 hereditaments affected by them." * 
 
 An equitable claimant, therefore, was compelled to seek his 
 
 remedy in a court of equity. There he asserted that the holder 
 
 1(1878) L. R 8 Oh. App. 158; 43 
 li J. Gh. 918. 
 
 » Bailey v. Barnes (1894), 1 Ch. 88; 
 C8 I* J. Ch. 7a 
 
 »(1788) 3 P. Wms. 401. 
 
 «37&88Vi&, ch. 78,§7. 
 
 A oo Om an xrj_ -i. am a .aa 
 -trj w, Oi7 T If., UU. OJ, g l-iV. 
 
 « Ency. of Laws of Eng., vol. 89. 
 And see Goodeve's Beal Property 
 (3d ed.), 358 et seq. 
 
896 
 
 OflTENSIBLB OWHrKKSHIP A»D AOKNOT. 
 
 of the legal title ought to be coni{>elled to convey it to bini. 
 But the holder oi the legal title might also have merits — he 
 m'qrht also be an innocent porchaser, although subsequent in 
 pojnf of time. And the queb ion vas whether the court of 
 equity, as between two innocent persons, would exercise its 
 extraordinary jurisdiction and compel a conveyance of the legal 
 estate. It held that it would not. It left the parties to such 
 skimp justice as the law afforded. It felt "itself checked 
 . and an obstacle thrown in its way " by this legal view 
 of the case. 
 
 If neither contestant had the legal estate, the court, relieved 
 of all embarrassments, administered unfettered justice, and de- 
 creed a , between two innocent holders that he had the estate 
 who had first acquired it. What else could it declare? * 
 
 The situation is well described by Sir W. Page WooJ: « 
 
 " The whole doctrine of this court about the protection afforded by 
 means of the legal estate is simply this: A party getting the legal estate 
 acquires no new right in feqaity in any way. But equity regarding all the 
 persons who have incumbrances according to their priorities, comiderina 
 inatthe equitable interests pass jmt rs the legal interest does* by the effect 
 or the deeds, find* itself ekeckedai ittnes and an obstacle thrown in its way 
 by an incumbrancer's saying: 'I have got the legal estate interposed; I 
 Insist It is mine at law, and there must be a superior equity shown in 
 order to deprive me of my legal estate.' It is merely staying the hands 
 of the court by resting mxx that legal estate which this court will not deal 
 with unless a superior equity can be shown; and although the court holds 
 that priority will give equity, yet it does not hold that it gives so superior 
 an equity as between several incunibranotirs as to enabfe a person who 
 has an anterior charge to wrest the legal estate from the person who has 
 obtained it without notice of the anterior charge, and who has not parted 
 with It This is the whole effect of the doctrine, and none other." 
 
 The defect then in the administration of justice out of which 
 grew the doctrine of the priority of the legal estate was that 
 courts of law refused to recognize equitable \u.^ ( f, The 
 court of equity, on the other iiand, doing what it c?>Uifi :.. this 
 and other ways to improve and rationalize the iaw, uid recog- 
 nize such interests. In contests for priority between adverse 
 ckimants of equities, inasmuch as the law regarded neither of 
 thte the court of equity was unhampered, and was able to 
 sa;^ t ; t . i Are*, was first, unless his conduct had deprived 
 
 Er. Eq. 69; Pryce v. Bury (1854), 
 L. R. 16 Eq. 153, n.; 28 L. J. Ch. 076; 
 James v. James (1878), L. R. 16 Eq. 
 158; 43 L. J. Ch. 886; Backhouse v. 
 Chariton (iatS), 8 Ch. D. 444; Lees v. 
 Fisher (1883), 38 Ch. D. 288; Snell's 
 Equity (llth ed.X 84a 
 
 *It hjs! J. '.riHar idea, however, 
 of iL'?r;.i.. . \ See cb. XX 
 
 ^Eocp^-r V. Harrison (1866), 3 K & 
 J. 108. 
 
 -oceos I.U luis, xxucsiey v. caniccE 
 (1836X 1 Buss. 141; Keys v. Williams 
 (1888), 8 Y. & G Ex 05^ 463; 7 U J. 
 
LASh—iflK LEGAL ESTATE. 
 
 257 
 
 hira of that position. But where the n^cond in point of time 
 
 ttvTTTu' ''' ^^^^ ^^^'^^^' ^^'^^ wa.Tor!,r 
 
 firhn.th Tk ^^ """u "^^^^'^ t*^'^^ the legal cJanna,.' was 
 fi«t. but that he was the only one that had anv title at all. 
 The court of equity, on the other hand. « considering that equi. 
 table interests pass just as the legal interest does," would fain 
 Lave decreed, m this case also, that the first was first. But it 
 found "Itself checked " by the opposing doctrine of the courts 
 
 «! h?i '^^ . r'"^ P*'"''"' ^ ^"^""''^ ^^''' J"t>giients just 
 
 as had the court of equity.* , *' 
 
 Ostensibly the court of equity submitted; but in realitv it 
 set to work one of its most potent jurisdiction-a .gnienting 
 weapons, with which it cut deeply into the legal prio Ity. The 
 court said, "Yes, the legal estate has, of course, the prion' v; 
 but not when its owner has been guilty of fraud." ( oarts o 
 aw could hardly dispute that position; and, once f arlv es- 
 tablished, equity under cover of the word "fraud" .;ecreed 
 postponement of legal estates, even when there was no fraud 
 or such semblance of it only as was "conduct fraudulent n the 
 eye of this court." 
 
 The word, however, still remains as the ground of the aris- 
 diction _ the word which was used as a mask to an attack u pon 
 imperfect administration of justice. The time has arrived ^^ Un 
 It ought to be thrown off; for the courts as now constituted re 
 no longer checked by opposing and defective doctrines of a iy 
 other court. All courts now recognize that "equitable int. r- 
 ests pass just as the legal interest does." It was lack of th ^t 
 recognition by courts of law that gave the legal estate its doml- 
 natmg influence. Ceesat ratione legU, cessat ipsa lex; especially 
 when the ;^ 18 of such incongruous character.' ^ 
 
 >It was not without a protest, found productive of irreat exn^n^ 
 
 the law to potice md enforce equi 
 ties was allowed to continue and 
 breed anomalies. As early as 1787, 
 Ashhurst, J., said (Goodtitle v. Mor- 
 gan (1787), 1 T. R at p. 763): "It is 
 true that formerly the court? qf law 
 did not take notice of an equity or 
 a trust, for trusts are within the 
 original jurisdiction of a court of 
 
 of the Hall; whenever this court 
 has seen that the justice of the case 
 has been clearly with the plaintiff, 
 they have not turned him round 
 upon this objection. Then if this 
 court will take notice of a trust, why 
 
 should theu not tnho nnts^ ^* 
 
 „ — — .„.. ^.j .^„ 
 
 tguxty . 
 'Lord Hardwicke (than whom 
 
 ^»UK bueon..,e.„u.„^™ ^^^.^t^z^^tl::^, 
 
253 
 
 OSTENSIBLE OWNEBSHIP AND AOENOT. 
 
 * Cessat Ratione Legis, Cessat Ipsa Lex. 
 
 Legal estates were those cognizable by courts of law ; and 
 equitable estates, those of which courts of equity alone took 
 notice. "When, then, we ceased to have courts of law and courts 
 of equity, it might have been anticipated that distinction be- 
 tween the estates would have vanished. But its annihilation 
 was hardly even suggested. A large part of the jurisprudence 
 of the country had grown up upon its foundation; and the 
 courts continued to speak of legal and equitable estates just as 
 though there still were such things, and to apply the rules de- 
 veloped in connection with the phrases. A recent writer, re- 
 ferring to the Judicature Act,' has well said : * 
 
 "Section 24 of the above-mentioned act in effect enacted that, in futurc» 
 courts constituted by the act, which embraced the previously existing^ 
 courts, both of law and equity, should give to all equitable estates, rights,, 
 titles and claims the same effect which would have been given thereto by 
 the court of chancery before the passing of the act Since the coming inta 
 operation of the act, equitjable estates and interests have therefore been 
 equally enforceable with Ifegal estates and interests and in the same forum; 
 and it follows that, in this sense and to this extent, being enforceable in 
 the courts of law, they might now be styled legal estates and interests." 
 
 Another writer (whose book is highly creditable to him) 
 
 thinks that 
 
 "the important thing is to get rid of this double ownership as quickly as 
 possible; and now that the conflict of jurisdiction out of which arose this 
 conflict of law is abNolished, it ought not to be difficult to accomplish thi» 
 reform."* • 
 
 That which had made distinction between legal and equi- 
 table estates was thus sent down to oblivion; the distinction 
 had always been an incongruous and disturbing factor in our 
 jurisprudence; courts of equity had found themselves "checked 
 . , . and obstacles thrown in their way" because of it; 
 fraud-tictions had been invented and elaborated wherewith to- 
 minimize the rvils of it; and judicial tears had been shed over 
 it, because thereby priorities were oft-times settled not accord- 
 
 has said: "It could not happen in 
 any other country but this, because 
 the jurisdiction of law and equity 
 is administered here in different 
 courts. . . , But if this had hap- 
 pened in any other country, it could 
 never have made a question; for if 
 the law and equity be administered 
 by the same jurisdiction, the rule 
 qui prior eat tempore, potior est jure 
 must hold." (Wortley v. Birkhead 
 
 (1754), 3 Ves. Sr. 57^) Unfortunately 
 Canada and the United States in- 
 herited the anomaly with the di- 
 vided jurisdiction of the courts. 
 
 1 Imp. St 86 & 87 Vic, ch. 66. 
 
 SEncy. of Laws of Eng., vol. 89. 
 / nd see Emmerson ▼. Ind (1886), Z^ 
 Ch. D. 323: 55 L. J. Ch. 903. 
 
 sMarkby's Elements of Law <4th 
 ed.), sea 835. 
 
LAND — THE LEGAL ESTATE. 
 
 259 
 
 ing to principles of justice, but according to the favor or whim 
 of the pig-possessor- "a mere matter of machinery 
 and very singular machinery," it was said. A chance he;e. ine 
 wpuld think, for cessat ratio..c legis, cessat ipsa lex: but it was 
 missed, and we still conjure with the ghost of the legal estate, 
 t ea ing him as if he were still alive and of such stout sub! 
 stantiahty as to command our continued deference and respect. 
 
 "NoTHiNa BUT Fraud," etc. 
 
 Reference has been made to the flank movement by which 
 courts of equity succeeded in turning, to a certain extent, the 
 position occupied by the legal estate. «The legal estate has, 
 of course^ priority, but not when its owner has been guilty of 
 fraud. From this it results that the maxim « Where the equi- 
 ties are equal the law will prevail" is too narrow, for where 
 they are not equal the law will still prevail. Fraud is neces- 
 sary to turn the scale. The rule, then, may be better expressed 
 in the language already quoted : 
 
 ;U;M^ as . ev^ 
 
 That 18 to say, the legal claimant, whether he be first, second 
 or fortieth m point of time, is to be first in fact, unless he has 
 
 l^iHt «T"!i' f '' '"''• ^"""^ ^'- ^«™^^«^ ^^« * Paragraph 
 entitled "Fraudulent mtent necessary in an estoppel affecting 
 the legal title to land." » ^ 
 
 But why say « fraud or evidence of fraud ? " The court can- 
 not say that there is fraud unless there is evidence of it; and 
 surely evidence of fraud will be useless unless it be suflicient 
 to prove fraud. The only answer to which is that we are 
 dealing with "a mere matter of machinery, . . and a 
 very singular machinery it sometimes is," about which we 
 must be content to find some mystery. We may observe, how- 
 ever, that the fraud in question may be of purely fictitious 
 character; that the word "fraud" does not necessarily imply 
 that there was «an actual intention to commit a frn„d-»» ^LV 
 tbe -gross and voluntary negligence" spoken of must indeed 
 
 ' Oa Eq. Jur. (ad ed.). g 807. 2 Dowie v. Saunders (1864). 8 H. & 
 
 M.251;84L.J.Ch.87. 
 
260 
 
 (MTENSIBLE OWNERAHIP AND AOEKOT. 
 
 be such as will be evidence of fraud, but that the fraud of 
 which it is evidence may be absolutely non-existent.* For ex- 
 ample, in a very recent case,' Sir F. H. Jenne said thut there 
 was 
 
 l^^J^i'iP^^u «> IK'OM as would justify the court of chancery in concluding 
 that there had been fraud in an artificial sense of the word. . . . I do 
 not mean to suggest that there was any fraud in fact" 
 
 Mr. Beven has said all that can be said * in defense of this 
 seeming confusion, but, it is thought, with scant success. The 
 argument may be put in this way: No man can claim an es- 
 tate against another person whom he has defrauded out of the 
 estate; a purchaser acts for himself, and owes no duty of care- 
 fulness to anybody else; there are, however, certain well-known 
 courses of procedure usually adopted by purchasers; and if 
 they depart from those well-known courses, with the result 
 that they come into competition with other claimants to the 
 property, their action may be taken as evidence of an intention 
 to defraud those other claimants, although in admitted fact 
 there was no such intention.* The startling result of which is 
 that, although evidence of that which does not exist is usually 
 associated with perjury, here it becomes the foundation of ju- 
 dicial decision. Lord Justice BramweU's vigorous language 
 ought to have ended further perversion of the word « fraud " 
 and would have done so had the road been clear without it: 
 
 "I am of the opinion, with an exception I will presently avert to, that 
 to make a man liable for fraud moral fraud mustte proved against him. 
 
 jumnuU (1848), 6 Moa P. C. 810, and 
 of Parke, R, in Egerton v. Earl 
 Brownlow (1853X 4 H. L. C. 124; 23 
 L. J. Ch. 84a And see per Williams, 
 J., id., p. 77, and per Alderson, B., 
 id., p. 109. Mr. t>omeroy agrees that 
 courts of equity "have always 
 treated the word 'fraud 'in a very 
 elastic manner." On Equity Jur. 
 (2d 3d.), $; 80a And see per James, 
 L. J., in Torrance v. Bolton (1872), 
 L. R. 8 Ch. App. 124; 42 L. J. Ch. 179. 
 
 'Oliver v. Hinton (1899), 2 Ch. 264; 
 68 I* J. Ch. 583. In the same case 
 Lindley, M. R, substituted "gross 
 negligence " for fraud. 
 
 3 On NegiJgenoe, 1634 And see 
 900 flf, 1624-162a 
 
 *See Agra Bank v. Barry (1874X 
 L. R. 7 H. L. 18Si 
 
 1 In Pollock on Contracts (6th ed.), 
 604 (see also pp. 401, 403), it is said: 
 "It must also be remembered that 
 for a long time equity judges and 
 text writers thought it necessary or 
 prudent for the support of a bene- 
 ficial jurisdiction to employ the 
 term 'fraud' as nomen generalia- 
 aimum, 'Constructive fraud' was 
 made to include almost every class 
 of cases in which any transaction is 
 disallowed, not only on grounds of 
 fair dealing between the parties, but 
 on grounds of public policy." For 
 judicial condemnation of "subter- 
 fuges and contrivances and evasions 
 
 11,- i-isivu ju'.igc3 ill miigiaziii long 
 
 resorted in struggling against" 
 other rules, see the language of 
 Lord Campbell in Raraloll v. Soo- 
 
LAND — THE LEGAL ESTATE. 261 
 
 I do not understand lecal fraud m mv min/i u i 
 than legal heat or legal cold.Twl liSif rfr TJ^-i V'V »«> "nore meaning 
 be a well-founded cSmplSt ofigll fraudTr nf *'*^' ,J'^«'-e never can 
 where some duty is shown and SelitivAH^hf *y»'"K else, except 
 
 iliogical and unm^nSrw^ fhrc?n*slrurtTnSl.t^ ^'i' *° * P'^-" 
 For example, the owner of an estate deposits the title-deeds 
 as security for a loan (that is, makes an « J^uitable » mortal 
 of the property'), and afterwards conveysVhe legal estateTo a 
 subsequent mortgagee, who makes no inquiry for Ihe deeds 
 
 that the subsequent mortgagee had not the slightest idea o 
 defrauding anybody; that he was absolutely unaware of the 
 existence o the equitable mortgage; and yet he will be re 
 fused priority, because it is said that not asking for the deeds 
 was "evidence of an intention" to defraud a possible holder o 
 the deeds.» It may even be that as a trustee he thought the 
 
 wt b k'^ TT '^' ''^ '^^^^' nevertheless his inact on 
 
 will be ascribed to fraud.* Fictitious fraud is thus postulated 
 in order that justice may be done. There must be somethtg 
 more rational than this, somewhere. ^ 
 
 And observe further, as to frauds of this sort, that had the 
 second mortgagee asked for the deeds and been put off w th 
 some excuse the stigma of bad faith would not have attached 
 to him;» and if, upon asking for them, he had been given a 
 bundle which was said to contain them, but did not, his char! 
 
 »Win V. Bell (W8), 3 Ex. D. 848; 
 47 L. J. Ex. 707. 
 
 *In Parker v. Carolina (1898), 53 
 S. C. 583; 31 S. E. R. 676, it was said 
 that "the rule is well established in 
 England, and has received some 
 support in this country, that an 
 equitable mortgage on the land is 
 created by the deposit of title-deeds 
 as security for debt; but the doctrine 
 IS generally rejected in the United 
 States. The rule as administered in 
 England grew out of the fact that 
 there was no general system of reg- 
 istration, as in this country, and the 
 
 system Ot J^nnvavanninn >»..^ J i^ 
 
 -J- s "^"ucitru It 
 
 necessary to have possession of the 
 muniments of title." And see Tiede- 
 man on Real Property (8d ed.), g§ 289, 
 
 290. For those accustomed to the 
 American law the supposititious case 
 m the text may be varied by substi- 
 tuting a contract for a mortgage in- 
 stead of a deposit of the deeds. 
 
 * Worthington v, Morgan (1849), 16 
 Sim. 547; 18 L. J. Ch. 283. 
 
 < Lloyds Bank v. Jones (1865), 29 
 Ch. D. 221; 54 L. J. Ch. 931. 
 
 •Plumb V. Fluitt (1791). 3 Anstr, 
 438; Hewitt v. Loosemore (1851) 9 
 Ha. 449; 21 U J. Ch. 69; Espin v. 
 Pemberton (18.'-;0), 5 Jur. N. S. 157; 28 
 L. J. Ch, 808; 28 id. 311; Agra Bank 
 V. Barry (1874), L R 7 a L, 185; 
 Garnhaiu v. Skipper (1883), 65 L. J. 
 Ch. 363; Newman v. Newman (1885) 
 28 Ch. D. 674; 54 L. J. Ch. 59a 
 
202 
 
 OSTENSIBLE OWNERSHIP AND AGENCY. 
 
 acter, though he never untied the string, would have remained 
 unstained.' Fictitious fraud is plainly of somewhat ambigu- 
 ous and refractory character. 
 
 . For we seem by these results to be compelled to say that it 
 is the duty of a mortgagee to inquire for the deeds, and not his 
 duty to look at them when he gets them ; that he will lose'pri- 
 ority if he does not ask for the deeds, but gain it if he does, 
 though he never gets them, but only a bundle of other things; 
 that he will be declared to have acted fraudulently if he care- 
 lessly leaves the deeds outstanding, but to have comported him- 
 self as a gentleman if he receives a parcel which he thinks 
 contaiins them, and never bothers himself to open it. 
 
 Ingenious and elaborate as all this is, its radical defect surely 
 is its lack of reality.* And its lack of reality is attributable to 
 the fact that a wrong principle is being applied — fiction is em- 
 ployed (once more) to avoid the disastrous effect of rooted ideas. 
 As between two clairpants, one has that sort of an estate which 
 in former days and because of defective administration of jus- 
 tice had a tactical but unmerited advantage; the advantage 
 in those days could be taken away only upon the ground of 
 fraud; in many cases, however, in which there is no fraud, jus- 
 tice plainly requires a decision against the legal title; fraud is 
 therefore imagined or imputed; and with the help of fictitious 
 fraud justice is done. 
 
 Until a recent decision of Mr. Justice Kay • a further refine- 
 ment existed of most annoying and elusive sort, namely, between 
 the character of the fraud which would postpone a prior owner 
 if he held the legal estate, and the character of the fraud which 
 would postpone him if he had the equitable estate only. It was 
 thought that as the legal title was stronger than the equitable 
 it would take more fraud to postpone it. And when it is re- 
 membered that the fraud necessary to postpone the legal estate 
 did not necessarily imply the existence of "an actual intention 
 to commit a fraud," * but was itself of a most special and imagi- 
 nary description, it is with a sense of great relief that we wel- 
 
 iRatcliflfev. Barnard (1871), L. R 
 6 Ch. 653; 40 L. J. Ch. 777; Colyer v. 
 Finoli (1856), 6 H. L. C. 905; 28 I* J. 
 Ch. 6?^ 
 
 2 See the subject discussed in ch. 
 XIX. 
 
 •Taylor V. Russell (1891), 1 Ch. 8; 
 CO L. J. Ch. 1; (1892) A. CL 281; 61 
 L. J. Ch. 657. 
 
 * Dowle V. SaUUuers (ioGi), 3 H. & 
 M. 250; 34 L. J. Ch. 87. 
 
LAND — THE LEGAL ESTATE. 
 
 268 
 
 i, ^ht! "''°'^ ''°""'*''' *"" P""»' ! '" «" ""at we can yet say 
 
 P< isible whii io „ t "'■"'" specification is im- 
 
 p< isioie, which IS perhaps not to be wondered at the thin^ 
 Itself being not real but fictitious. ^ ^ 
 
 Estoppel. 
 Such a state of the law may well be said to be '• irrational 
 incongmous and disturbing." That it is inconsis on withthe 
 modern principles of estoppel is sulHciently apparent when it 
 
 namel ,r flr,,T ' " u"^"^^' '"'""'terial), one of them, 
 namely the flrst^ alone can have it; and that if the second is 
 
 tate (for he has it not), but because for some reason the flr!t7s 
 stopped from setting np his priority. The snbstitntbn of eL 
 
 imputwl fraud. Its introduction would no doubt involve a sood 
 deal of change, not only in the treatment of thrcasi to 
 aometimes in their results. Nevertheless, sooner or atcThar 
 Zsir ' r.'»''"^''«'» "^'-een the taw of estoppe by o . 
 teusible ownership and the law of priorities. No'tL JtZ 
 
 er^ stand by and permit another to deal with it as owner he 
 will be estopped as against a purchaser for value EstonD^Ii! 
 no way requires for its operation that the pur W shThtve 
 acquired the legal estate. It is snflicient that he have in some 
 way changed his position'- he may have acquired I me^sj 
 eq-ty, or indeed acquired, in very fact, nothing at all 2Zt 
 pe^acts wholly irrespective of such considerations -chan-S 
 position is all that is essential. <.uange oi 
 
 K.y. T.„„rv. «„«;., ".siTc! "iSfrir""^ 
 
261 
 
 os'rlB? 
 
 N81BLE OWNERSHIP AND AGENOT. 
 
 Observe the law with reference to " non-negotiable " choses in 
 action. Until the statute permitting their assignment, it Was 
 impossible for a purchaser to acquire a legal estate in' them, 
 and yet a purchaser from an ostensible owner of them might 
 estop the true owner from setting up his title. If the true 
 owner had assisted the ostensible owner in his misrepresenta- 
 tion of ownership, by furnishing him with the indicia of title 
 to them, he would be estopped.' Change of position, not the 
 acquisition of the legal title, is all that is required for estoppel. 
 
 Note, too, the law or principal and agent with reference to 
 estoppel. A principal in some way assists a misrepresentation 
 of his agent as to the scope of his authority; a third person 
 acts upon that misrepresentation, and the principal is bound. 
 It is not necessary that the third person should have acquired 
 any legal estate. In fact, frequently the question is not one of 
 estate at all. Change of position is all that is essential. 
 
 So also in regard to) the law with reference to the execution 
 of documents. An owner is tricked into executing a deed; 
 the deed is not binding because of the fraud; upon the faith of 
 the deed some third person changes his position, and the owner 
 is estopped from asserting that the deed is not his. In this de- 
 partment of the law it has not been thought necessary as a pre- 
 requisite of estoppel that the purchaser should have the legal 
 estate. Change of position is sufficient. 
 
 Application. 
 
 Suppose the owner of property, real or personal, transfers 
 it absolutely — title, evidence of title, and possession — to a 
 trustee in such a way that there is no trace of a trust visible; 
 and that the trustee afterwards fraudulently disposes of some 
 estate in the property to an innocent purchaser for valuo. 
 This, according to the law of estoppel, is a clear case; the 
 owner is, of course, estopped,— he has accredited the title of 
 his trustee and cannot deny it.' According to the rule under 
 discussion, however, the case depends upon the nature of the 
 estate which the purchaser obtains. The competing principles 
 are here in sharp conflict. One of them must eventually give 
 way.. 
 
 »See ch, XXIL 61 N. Y. 345; Clarke v. Roberts (1881). 
 
 "Dillage v. Commercial Bank (1873), 35 Hun (N. Y.), 8& 
 
LAND — THE LEGAL B8TATK. 
 
 265 
 
 The case of Cave v. Cave} already referred to, well illustrates 
 the SI uation: A trustee mortgaged the trust property success- 
 ively to several persons; the first mortgagee got the legal es- 
 tate; the others, of course, did not; in the general settlement 
 the hrst mortgagee was held to be prior to the beneficiaries, 
 and the other mortgagees to be subsequent to them. Estoppel 
 Avould have given priority to all the mortgagees. 
 
 It IS impossible by any process of reasoning to justify the 
 conflicting results arrived at in the case just mentioned. We 
 may, if we wish, say that every purchaser is aware that his 
 vendor may be a trustee and may be acting in violation of his 
 trust; therefore caveat emptor, for if such be the fact he gets 
 no title to any sort of estate.' Or we may say that « where 
 the owner has lent himself to accredit the title » of the trustee 
 he will be estopped from setting up his title against any estate 
 which the trustee may wrongfully convey to an innocent pur- 
 chaser. But it is irrational to apply one of these principles to 
 a case m which the trustee fraudulently transfers one estate in 
 the property ; and the other to a case in which he fraudulently 
 transfers another estate. 
 
 Either view is logical and comprehensible. It may be said 
 that the law of trusts is well recognized; that there is no neff- 
 ligence in having trustees, or even a single trustee; nor any in 
 allowing him to act without check or oversight. Caveat emptor. 
 Let all purchasers of all estates take care of themselves 
 
 Such reasoning is good. But it is applied only when the 
 purchaser has taken an equitable estate -in such cases it ia 
 supposed to be unanswerable. In one instance » not only were 
 shares absolutely transferred to a trustee, but he qualified upon 
 ^ 639; 40 L. J. Ch. 
 
 1 (1880) 15 Ch. D 
 505. 
 
 2 Reg. V. Shropshire Ry. Co. (1873), 
 
 J-s -g. t^^ -rw, J_l. iv, « £1. Ia 3VD; 
 
 45 L. J. Q. B, 31. 
 
 » Per Lord Romilly, in Baillie v. Mc- 
 Kewan (1865). 85 Beav. 183. And see 
 Bradley v. Riches (1878). 9 Ch. D. 189; 
 
 47 L. J. Ch. 81 1 ; Carritt v. Real (1889), 
 
 48 Ch. D. 263; 58 L. J. Ch. 688; Re 
 Richards (1800), 45 Ch. D. 589; 59 L. 
 J. Uh. 729; Moore v. Kane (1894X 24 
 Out. 541. 
 
 < Per Turner. I* J., in Cory v. Eye 
 (1868). 1 De G.. J. & S. 189. 
 » Howard v. Sadler (1893), 1 Q. R K 
 
266 
 
 dSTENSIBLE OWNERSHIP AND AOUNOV. 
 
 them and acted as a director; yet the true owner was not es- 
 topped to deny the trustee's ownership as against an equitable 
 interest in the shares wrongfully created by the trustee. The 
 Jaw permitted directors so to qualify; acting as a director was 
 therefore no evidence of ownership; the purchaser knew that 
 the ostensible owner might be a trustee. Caveat emptor. " 
 
 In another case the deed by which the trust was constituted 
 indicated that the purchase-money had been paid by the trustee. 
 It cherefore, to that extent, negatived the idea of a trust; and 
 yet the true owner's estate was upheld as agaic.t the equitable 
 estate of a purchaser from the trustee. The indications were 
 misleading, but might have been suspected to be such. Caveat 
 emptor. 
 
 In yet another case ^ a solicitor took a mortgage in the name 
 of his clerk, and left it and the deeds in the clerk's possession ; 
 the clerk fraudulently deposited the deeds (created an equitable 
 interest); and the soMcitor was not estopped. The clerk might 
 be a trustee. Caveat emptor. 
 
 All that can be said as against such reasoning is (1) that it 
 is just as applicable to the case of a purchaser of the legal es- 
 tate as to a purchaser of an equitable estate, while it is ap- 
 plied to the latter only; (2) that it ought, therefore, to be 
 applied to both such cases, or else be discarded altogether; and 
 (3) that the principles of estoppel are those properly appli- 
 cable to all such cases, and would have decided the other way 
 the cases which have just been cited. 
 
 According to the law of estoppel, 
 
 " where the owner has lent himself to accredit the title to another person, 
 by placing in his power those symbols of property which have enabled him 
 to hold himself out as a purchaser of the goods, 
 
 such owner will be estopped from setting up his title; and it is 
 quite immaterial, in the application of such law^, what sort of 
 an estate has been acquired by the purchaser — change of posi- 
 tion upon the faith of the representation is all that is requisite. 
 Estoppel says that if a man selects a rascal as his trustee, 
 and supplies him with completest cheating apparatus, he must 
 himself bear the burden of the ensuing rascalities, and is not 
 to be allowed to shoulder them oflf upon such persons as may 
 be s,windled, and that the diflference in the sort of swindle can- 
 not att'oct the result. 
 
 »Carritt v. Real (1889), 42 Ch. D. 268; 58 L. J. Ch. 68a 
 
I.ASD — TKE LEGAL ESTATE. 267 
 
 ■ i~^o,Ur7c''""''°' "^ ""^ "■""'«' J"'' <1"°'«<1 fa the 
 iTbM. Ires of?r'" ^"^^ "' ^'-"P'^'^'-' I' "■« a .«se 
 luo uirectora (Holyoke), who borrowed monev nnon th. 
 shares, and promised to execute a traosfer of them Th. . 
 
 either that these shares were iHa T.onlfl P'l**''" " "''^^ perfectly Possible 
 
 ^c that thev were the^pr^^JSty of S itLrr/*^ '^'tR^'^P'^^ f^"S«'^ 
 by equitable transfer or eoiilfohif^r! • '"^'^ PPrson. If he dealt merely 
 
 turned out that theXneVc?al 'o^'„\S« T. l^^'^'' "°'y°^«' ««" '^ S 
 coextensive with his legal title wKX^i^^^'^^Ke was coincident and 
 ingly. so far as Holyoke was r.nnn«rni!r ^°^'^ ' .'"^ "^^ ^ou'd be accord- 
 hand, it should turn^Sthat iSyoK^^^^^^ h^l^' ''^ the other 
 or was not co-extensive with the whole of h So** '°*"^1' ""»« «**•>" nil, 
 «ay any person dealing with Sv^ke bv wi^ «f P***":^"^,'®?** **''«• then I 
 tract should have known thaVhe^ coulTonl/n°hf !^""**^i? ^"«*'n o*" con- 
 perfect and would not bind tL reaf beneSjiaf own'er » '"" "*^'"*^ "'*« *™- 
 
 <iuZuon tlrZ^'u'' ''^^""^'^^ ^^^^ °«^ *«"°h the real 
 question. Ko doubt the purchaser knew that Holyoke-m Jht 
 be a trustee (for every ostensible owner may be at'^steeVbu 
 
 tuL rir "f '^"^' ^^^^ ^^^^ P"r<'^a-r takes tie wj 
 t^le as when he takes the equitable. And the quesUon I 
 
 Why should such knowledge ruin an equitable tirandhave 
 
 e" hti both ' '''"'u'''' '''^" '^ '^' -™« -^-«"'e ovvn! 
 ership m both cases; the same responsibility in both on the part 
 
 of the true owner for such appearance of ownershio andTn 
 botha^t^^^ 
 
 Substitute fob Fhaud or Evidence of Fbaud 
 
 rordrsirj.n^-\^°-"-'''-)-e.--=^^ 
 
 tZ^t '"'"T '^ "»','"'«'">"■ For if, as has been contended the 
 true principles applicable to the cases in hand arethose of es 
 toppe by assisted misrepresentation, then the co d ct exaC^" 
 
 Sl^t'PT/;^ '•^:."'« '»- o'-toPPel in all othel dell:! 
 m.„„ „. .„. ,„v. lae standard is a high one. It imposed the 
 
 '0878, L. E. 8 % R 420, L R. 7 a I. M5, « L. J. Q. a 81. 
 
268 
 
 OSTENSIBLE OWNEBSHIP AND AOENOT. 
 
 social daty of exercising " an appropriate measure of prudence 
 to avoid causing barm to others;"' and it makes little allow- 
 ance for mistakes and oversights which have resulted in dam- 
 age to other people.' 
 
 The introduction of such ideas into the law of priorities will 
 probably not be at once conceded by the profession. But event- 
 ually it will be recognized that in the application of estoppel 
 to the various branches of the law there must be some one 
 standard of conduct for all of them. A greater degree of pru- 
 dence may be required in some departments than in others; but 
 that will be because of some greater probability of dangtt to 
 other people, and not because it is impossible to point to a gen- 
 eral principle such as that requiring "an appropriate measure 
 of prudence to avoid causing harm to others." 
 
 And further, we shall eventually, by comparison of cases from 
 the different departments, arrive at some unifying understand- 
 ing as to the " measure of prudence " which will be considered 
 to be " appropriate." Here the egoistic and the altruistic views 
 of conduct will meet in sharp conflict; but the battle will be to 
 the latter, for man's development tends now strongly in that 
 direction.* 
 
 Apologies fob the Old Eulb. 
 
 The usual defense of the rule which favors the legal estate 
 may be stated as follows : 
 
 "When we hear, therefore, of a purchaser for valuable consideration 
 taking the title free of every trust, or equity, of which he had not notice, 
 it is intended that he is a purchaser of a title perfect on its face; for every 
 
 {mrchaser of any imperfect title takes it with all its imperfections on its 
 lead. It is his own fault if he confldes in a title which appears defective 
 to his own eyes; and he does so at his periL Now every equitable title is 
 incomplete on its face; it is in truth nothing more than a title to go into 
 chancery to have the le^al estate conveyed, and therefore everjr purchaser 
 of a mere equity takes it subject to every clog that may lie on it, whether 
 he has had notice of it or not. But the purchaser of a legal title takes it 
 discharged of every trust, or equity, which does not appear on the face of 
 the conveyance, and of which be nas not had notice either actual or con- 
 structive."* 
 
 > See ch. V. 
 
 aSeeclLVIIL 
 
 •Seech. V. 
 
 * Chew V. Barnet (1824), 11 Serg. & 
 K. (Fa.) <$92; quoted lu £-.aus v. 
 Roanoke Sav. Bank (1897), 93 Va. 
 
 Eyre, C. J., in Plumb v. Fluitt(1791), 
 2 Anstr. 483. " The person who takes 
 the legal estate ^thout the deeds, 
 in a case like this, appears to me, 
 unless there be fraud, to be less 
 blamable than he who takes the 
 
 294; 28 a EL B. 839. And see per deeds without the estate." 
 
LAND — THE LEGAL ESTATE. 
 
 269 
 
 To this several answers may be made : 
 
 1. It is but a method of alleging the former imperfection of 
 the admmistration of justice. If the equitable title was ira- 
 perfect, it was only because the law was imperfect in refusing 
 to recognize equitable titles -an imperfection which has now 
 been removed. 
 
 2. The major premise of the argument is' that a purchaser 
 who takes with knowledge of one imperfection ought, for that 
 reason, be held to have taken it subject to every other imper- 
 fection which it may have -a man takes a title imperfect in 
 Its legal aspect, therefore he « takes it subject to every clog » A 
 purchaser of the legal estate, then, subject to a lease (one im- 
 perfection) ought to take it "subject to every other clog that 
 may lie on it?" That would not be pretended; but it is just 
 as rational as the contention that a purchaser subject to a lec^al 
 mortgage takes the property " subject to every other clog." 
 
 3. The contention presupposes that all purchases are of the 
 whole estate in the property: "It is his own fault if he con- 
 fides m a title which appears defective in his own eyes." But 
 If a purchaser has agreed to purchase subject to a legal mort- 
 gage, the title to the thing sold does not appear to be defective. 
 On the contrary it appears to be perfect. 
 
 Actual and Contbaotual Estates. 
 
 From what has been said it might be inferred that "legal" 
 and "equitable" estates had become altogether solecisms and 
 anachronisms. A legal estate was once recognized bv courts 
 of law; an equitable estate was recognized by courts of equity 
 only; there is now but one court; therefore the distinction 
 must be at an end. 
 
 It must be remembered, however, that although the phrases 
 connoted much that was unreal and defective, vet that they 
 served to separate two sorts of estates between which there 
 was real distinction; and that such distinction still remains and 
 must remain, although it can no longer be said that there exists 
 a court 'whose jurisdiction is limited by it. 
 
 For there must always be adiflferenoe between a convnyar.ce 
 of land and a contract to convey it. In the former case"tbe 
 transferee has the land; while in the latter he has only a con- 
 tract under which he is entitled to get it. And if we are con- 
 

 370 
 
 OSTENSIBLE OWNERSHIP AND AOENCV. 
 
 : ?nt to attach misleading, or at best non-significant adjectivoa 
 for the purposes of classification, we may still continue to call 
 the one a "legal" and the other an "equitable" estate. But 
 it would be absurd and unscientific to perpetuate phrases that 
 have lost their meaning, and that are associated with all sprts 
 of irrationalities. Other and more appropriate names must bo 
 found. 
 
 The present writer ventures to suggest that where the titl& 
 has been transferred the purchaser has an actual estate; and 
 where he has but a right to get the title he has a oontraotual 
 estate.* 
 
 Now it must be observed that the language which we have 
 been suggesting is not inconsistent with the statement that 
 where the equities are equal the actual will prevail over the 
 contractual. For the position assumed was that, as between 
 two competing grantees, one of them has it and can lose it only 
 by estoppel. The defects of the current rule are those pertain- 
 ing to its origin, principally the failure of the courts of law to- 
 recognize in any way the existence of those estates in land 
 which were known as equitable estates. For example, if land 
 already under mortgage were subsequently sold to two per- 
 sons, each having no notice of the other, the rule awarded prior- 
 ity to the one who succeeded in getting the mortgagee to con- 
 vey the legal estate to him. It was said that this one had the 
 only estate which a court of law would recognize; that the 
 equities were equal, and that the law must prevail. To un- 
 sophisticated people it is very clear that a mortgagor has often 
 a very substantial estate in the land, and that the law is irra- 
 tional which declines to regard that fact. 
 
 Applying the proposed phraseology to the same case, we 
 would say that the first of the purchasers from the mortgagor 
 acquired the estate which he had to sell (had the actual estate);, 
 that if the second purchaser is to be preferred it must be be- 
 cause the first is in some way estopped from setting up his es- 
 tate; and that nothing which the mortgagee may do can in any 
 way affect that result. 
 
 And we do not say that the first purchaser wins because of 
 
 Ut is a curious coincidence that might be invoked to support the an- 
 fanciful etymology (confro-actual) tithesia here suggested 
 
LAND— THE LEGAL ESTATE. 
 
 271 
 
 ordinary r .ople have solid substantiality; but merely because 
 the possessor of an estate naturally retains it, unless sotnebodv 
 can present a reason for depriving him of ii-melior est con- 
 ctitio possidentis. 
 
 We would say that the first purchaser has the estate in ques- 
 tion and that the other has nothing, and has no means of getting 
 It which are not open to anybody else. That a contrary conclu- 
 sion IS at present accepted is due to the rule under considera- 
 tion, which, however necessary during the discord between 
 courts of law and equity, has now lost all its raison d'etre 
 
 If we wish to keep as close to the old phraseology as possible 
 we may say that where the merits are equal the actual will 
 prevail over the contractual. 
 
 Support for Kew Methods. 
 
 The mlu as to the priority of the legal estate having arisen 
 and beon most frequently applied in cases relating to real estate 
 Its pre-eminence and dominating function in that branch of the 
 law has rarely been attacked and never (save for a year by stat- 
 ute) overthrown. In other departments of the law.'however, in 
 which the principles of estoppel are frequently applied, the 
 courts have dealt the legal-estate theory some notable blows 
 
 For example, in cases relating to transfers of company shares 
 the supremacy of the legal estate, although still fairly ac- 
 knowledged,* has been much shaken. Questions have arisen in 
 this way : An executed transfer, but blank as to the purchaser's 
 name, has been handed to a broker for a particular purpose; 
 the broker fraudulently disposes of the shares; and the ques- 
 tion IS, Who IS to lose — the real owner or the purchaser ? » In 
 such a case Lord Watson would substitute considerations of 
 estoppel for those relating to negotiabilitv and legal estate: 
 
 O '^%^' f ^'pT'iJi^T ^??^' ^ ^ ® ^^^' >' ^ ^^- »• 8«5 58 L. J. Ch. 1089; 
 Q. a 31; Colonial Bank v.Hepworth 62 L. J. Ch. 803. 
 
272 
 
 bSTENSIBLE OWNERSHIP AND AOENOT. 
 
 to it. In other words, the foundation rests in the principle of estoppel. 
 Thus far the principles of American cases appear to me to be in harnmny 
 with the principles of English law" 
 
 "Cases . . . which relate to competition between equitable and te]9;(il 
 rights to stock or shares have really no bearing here. Whether the re- 
 spondents iire estopped from saying that Blakeway had not their author- 
 ity to dispose of the certificates in question is in my opinion the sole ques- 
 tion presented for decision in these appeals." ^ 
 
 Lord Herschell in the same case adopts estoppel as thd true 
 
 ground of decision : 
 
 "If the owner of a chose in action clothes a third party with the ap- 
 parent ownership, and right of disposition of it, he is estopped from assert- 
 ing his title as against a person to whom such third party has disposed of 
 it and who received it in good faith and for valUv*. And this doctrine has 
 been held by the court of appeals of the state of New York to be applica- 
 ble to the case of certificates of shares with the blank transfer and power 
 of attorney signed by the registered owner, handed by him to a broker 
 who fraudulently, or in excess of his authority, sells or pledges them. The 
 banks, or other persons taking them for value without notice, have been 
 entitled to hold them as against the owner. As at present advised I do 
 not see any difference between the law of the state of New York and the 
 law of England in this respect" 
 
 In a similar case in Illinois, Scott, 0. J., said : 
 
 "The effect of what was done was to place the equitable title to the 
 stock in the assignee, iind if it was done for a valuable consideration it 
 will surely be obligatory on the assignor, if living. In such cases it h a 
 matter of no concern to the assignor whether the assignee ever avails him> 
 self of the power of attorney embodied in the assignment to have the stock 
 transferred to him on the books of the corporation, so that he may become 
 the legal as well as the equitable owner. Equity will certainly give the 
 assignor no relief against the bona fide sale of stock in that way, although 
 the assignee may never choose to have the stock transferred to him under 
 the by-laws of the corporation." * 
 
 To the same effect is the later case in the same state: 
 
 " So far as concerned third persons dealing with him without notice of 
 the secret agency and trust he was the absolute owner in his own right, 
 with full power and authority to convey, lease or otherwise contract in re- 
 gard to the property, or any part thereof, or any interest therein." > 
 
 This principle sometimes leads in Canada and the United 
 
 States to the complete disregard of the argument derived from 
 
 the position of the legal estate.^ For example, in one case in 
 
 which the legal title to land was outstanding in the Crown, a 
 
 trustee made a fraudulent disposition of the property and the 
 
 purchaser was held to be entitled as against the beneficiary. 
 
 Boyd, C, said : 
 
 "Briggs V. Jones illustrates the very reasonable proposition that where 
 the owner of land transfers it to another so as to enable him to deal with 
 it as his own, he is guilty of such culpable imprudence that he cannot 
 afterwards assert his title as against rights which that other may have 
 created for value in favor of an innocent third party."* 
 
 1 Colonial Bank v. Cady (1890), IS 
 An T. J r.h lai 
 
 A^n Caa. 26? 
 
 3 Otis V. Gardner (1888), 105 111. 443. 
 * West Chicago v. Morrison (1896^ 
 160 III. 288; 48 N. E. R. 897. 
 
 <See Tiffany & Bullard on Trusts, 
 19? ff. 
 s Moore v. Kane (1894), 24 Ont 644. 
 
of eatoppeL 
 In hartumii/ 
 
 le and leio^I 
 her the re- 
 teir author- 
 le sole quee- 
 
 3 tbd true 
 
 ith the ap- 
 rom assert^ 
 disposed of 
 octrine has 
 be applica- 
 and power 
 o a broker 
 ihem. The 
 have been 
 dvised I do 
 >rk and the 
 
 !;itle to the 
 deration it 
 ases it i» a 
 avails him- 
 e the stocii 
 lay become 
 ly eive the 
 jr. although 
 him under 
 
 ;e: 
 
 it notice of 
 own right, 
 tract in re- 
 
 e United 
 [ved from 
 e case in 
 Crown, a 
 Y and the 
 neficiarv. 
 
 that where 
 
 9 deal with 
 
 he cannot 
 
 may have 
 
 on Trusts, 
 24 0nt544. 
 
 LAND — THE LEGAL ESTATE. q,o 
 
 In England it would nsoallv bs <aiH ii,.* .u . . 
 outstanding, and that in s^bZl^^:'!^^ '''''' ^'^^ 
 «qual equity and bein» fl«f in,- , ^"^O^'^^'y, having 
 
 the case referred to bf Bo 'd n "" -■ '" '"^'''"°"'- """' 
 and malces use of the uTgL'^Vesr: I"! f ^".T''"""' 
 gagee lent the lease to the m^rtljorTr h """""" ""'"•'■ 
 .»« money upon it, but at tCT^ZXmZ'"'°T "' ""'" 
 give notice of the prior oharee- th« r„ , ""rtgagor to 
 
 mortgage, borrow^ from ^11 ^.d "^°''' T "^"""S '''« 
 depositee had priority, ^Z^'^ ''°'^"''»' ^'^' ""at the 
 
 dei^r tre'^oa^terret^'iriftr «"- "■« 
 
 "the imprudence of the plaintiffs inT. ^ '^ '^ ^® *''"« ^^at 
 
 then also the decision is wronir BnttLj •• . 
 
 b^ the sanction of the House^of ^1'' ''^''""' " "^' *»<' 
 
 bcttd^^^t^.lttiu'hr' '"i °''*°'""f °™-"'P - 
 the customa,y "a'slli:gVthTe,er^'»f ^ apparent that 
 
 «> very "technical and^nsati flt^ry" hat'ft cflf T"";! 
 longer survive- and if win k^ ^^•'"ry mat it cannot much 
 
 answer to Z'Zo2flZ"r^"""' '"«™"ton,ake 
 Grover, J. : * '°"°™S ^^^'Pt ttom a notable judgment of 
 
 maxim that, when one of two innn»l!^f :?'*°®*PP'JcationoftheWal 
 
 pJifSi;^''^*^^ See also 
 ^erry-Herriok v. Attwood (1857) 05 
 Beav. 806: 3 De O. & J. 2,. 07 ? f 
 
 81Ch.D.696;86Ch.Div.50a ^' 
 'Ante,p.26S. 
 
 'See Perry.Herrick v. Attwood 
 18 
 
 a867),25BeaT205;3DeG.&J.ai. 
 37 I* J. Ch. 121; Brocklesby v. Teml 
 perance riSMv a r-i, ion. /."L.-^ . " 
 
 178;64I.j:Ch:43a^""^''''^^^- 
 
 *Moorev. The Metropolitan (1873). 
 
 Michigan Ry. (I875), 65 N. Y. I2a 
 
2n 
 
 08TEN8IBLB OWNERSHIP AND AGENCY. 
 
 f I 
 
 son, from asserting his title, while under the same state of faote he may 
 reclaim from suoh purchaser a bond and mortgage, or a certificate of in- 
 debtedness like the one in question? As to the former he is estopped, while 
 as to thn latter the same state of facts, it is insisted, will work np such re- 
 sult. The counsel for the plaintief insists that such distinction should be 
 made for the reason that the purchaser of corporate shares and chattel* 
 from the apparent owner obtains a legal title which is valid and may be 
 asserted in a court of law, while the assignee of a chose m action, not n^ 
 gotiable at common law, obtained an equitable title only; and tha^ the 
 equity of the former owner, being prior in time to that acquired by the 
 purchaser, is superior thereto, the rule in equity being that, where the 
 equities are equal, the first in time shall pre vail ; but upm what ground 
 trie «ame state of facts that toill estop a party from the assertion of a legal 
 title will not estop him from the assertion of an equitable, the counsel f axis 
 to show, for the very good reason that no suoh ground exists. It ts so oOw- 
 ous that the estoppel should upon principle apply to the latter equally with, 
 the fprmer, that a distinction can only be justified upon authority. 
 
 Factors Acts.— It is worth noting that the Factors Acts,* pro- 
 ceeding as they do upon rough principles of estoppel, operate 
 quite independently of considerations of legal estate. They pro- 
 vide that under varying circumstances " any sale, pledge or 
 other disposition" of goods by an ostensible owner or agent 
 shall be as valid "as if such person were the owner of the 
 goods," or " were expressly authorized by the owner of the 
 goods to make the same." 
 
 As we have seen, the present law declares that if a trustee 
 should fraudulently create an equitable mortgage of the estate, 
 the mortgagee and not the beneficiary would be the one to 
 suffer;, for he has not acquired the legal estate, the equities 
 are equal, and the beneficiary is first in time. Estoppel would 
 otherwise decide; for the mortgagee upon the faith of osten- 
 sible ownership had changed his position. The Factors Acts 
 similarly protect, not merely where there has been an absolute 
 sale, but where also there has been a " pledge or other disposi- 
 tion " of the property. 
 
 American. Law.— With, the dual system of courts it was in- 
 evitable that some of the resulting anomalies above referred to 
 should be introduced into the United States. Kegistration sys- 
 tems with respect to transfers of real estate; the greater in- 
 clusiveness of the application to choses in action of the laws 
 of "negotiability ; "' and the complete recognition of the prin- 
 ciples of estoppel in the same department, have, however, in 
 later years reduced the number of cases in which appeal is 
 made to the legal estate almost to zero; and their vanishing 
 
 1 59 & 58 Vic. (Imp.X oh. 45; Rev. 
 St Ont (1897), oh. 150. 
 
 2Seech.XXlV. 
 
II he may 
 itB of in- 
 >ed. While 
 ) such re- 
 ihould be 
 [ ohattela 
 i may b© 
 n. not ne- 
 bliat^"the 
 ed by the 
 rhere the 
 it ground 
 of a legal 
 msel fails 
 8 80 obvi- 
 tally with 
 
 3t8,* pro- 
 operate 
 hey pro- 
 edge or 
 >r agent 
 r of the 
 p of the 
 
 LAND — THE LEGAL ESTATE. 275 
 
 i«Sr "" *"" """""-'»'' "^ "-^--g -ega^d for it, 
 
 the ,«„e , „ior s •: ^z ^r " --^ '-'-'' 
 
 »h.re «. righto of i-S.^^^S^''^'Z°tn^A??J'" "«^«^ 
 ' Chew V. Barrett. 11 Sero- J^it noa «... 
 
 Ik trustee 
 le estate^ 
 3 one to 
 equities 
 el would 
 of osten- 
 ;ors Acts 
 absolute 
 p disposi- 
 
 t was in- 
 ferred to 
 ition sys- 
 eatjer in- 
 the laws 
 the prin- 
 wever, in 
 appeal is 
 vanishing 
 
CHAPTER XIX. 
 
 OSTENSIBLE OWNERSHIP AND AGENCY -LAND -POSSESSION 
 
 OP THE DEEDS. 
 
 Yarious rules, or various statements of the same rule, have 
 been formulated with reference to possession of the title-deeds 
 in contests for priority. 
 
 I. Inl787Bullar, J., said: 
 
 « It is an established rule in a court of equity that a second mortgagee 
 who has the title-deeds, without notice of any prior incumbrancer, shall be 
 preferred; because if a mortgagee lends money upon mortgage without 
 taking the title-deeds, he enables the mortgagor to commit a fraud. » 
 
 II. In 1853 Kindorsley, V. C, said: 
 
 "As between two persons whose equitable interests are of precisely the 
 same nature and quality, and in that respect equal, the possession of the 
 deeds gives the belter equity." * 
 
 III. And in 1867 Malins, V. C, said: 
 
 "I have not a shadow of doubt that where there is merely an equitable 
 mortKage unaccompanied by the legal estate in every case where the equi- 
 Sble mortgagee either omits to get, or, having got, gives up possession of 
 SedeTds, fie must always be postponed. . . . Ii«°'^« t^»«»«® °„^?J^ 
 general principle that one equitable mortgagee without jwssession of the 
 deeds must be postponed to another who has that possession. » 
 
 The first of these rules at once suggests estoppel by osten- 
 sible ownership. A mortgagee leaves the title-deeds in the 
 hands of the mortgagor; he thus, as is said, " enables the mort- 
 gagor to commit a fraud,"— he enables him to pose as the un- 
 incumbered owner; upon the faith of this appearance a third 
 person changes his position, and the mortgagee is properly es- 
 topped. 
 
 For estoppel, however, it is essentially necessary that the sub- 
 sequent mortgagee should have become such upon the faith of 
 the mortgagor's possession of the deeds— upon the faith of his 
 
 » Goodtitle v. Morgan (1787), 1 T. B. 
 762. 
 
 2 Rice V. Rice (1853), 2 Dr. 77; 23 L. 
 J. Ch. 391. 
 
 » Layard v. Maud (1867), L. R. 4 Eq. 
 887, 406 : 86 L. J. Ch. 669. Dissented 
 from in Thorpe v. Holdsmith (1868), 
 L. R. 7 Eq. 189; 88 L. J. Ch. 194; re- 
 asserted in Hunter v. Walters (1871), 
 
 L. R. 11 Eq. 816; 41 L. J. Ch. 175; 
 cited in Spencer v. Clark (1878), 9 
 Ch. D. 143; 47 L. J.Ch.694; and con- 
 sidered to be too p'ear for proof in 
 Lloyd v. Jones (18b6), 29 Ch. D. 229; 
 64 L. J. Ch. 981, which, in its terms, 
 was thought to go too far, Re Cas- 
 tell, Roper v. Castell (1898X 1 Ch. 815; 
 67 L. J. Ch. 169. > 
 
(•< 
 
 LAND — P08SK8SION OF DEEDS. 
 
 277 
 
 ostensible ownership of the property. AH the above rules omit 
 this factor and apply to cases in which it is absent. For ex- 
 ample, suppose that a second mort^ragee advanced his money 
 upon the unsupported statement of the mortgagor that he was 
 the unincumbered owner, and that afterwards the mortgagor 
 obtained the deeds from the first mortgagee and handed them 
 over to the second, the rules would give the second priority. 
 But estoppel would not; for he had not, upon the faith of the 
 deeds being in the hands of the mortgagor, changed his posi- 
 * *>; J^V"^«!,associate priority mechanically with possession 
 of the deeds. Estoppel asks: How they got there? 
 
 The second rule (in some respects the best of the three) is 
 very difficult of application- because of the requirement that 
 the equitable interests shall be "of precisely the same nature 
 and quality." This language might be taken to mean that in 
 addition to the fact that both estates were equitable both of 
 them were of identical character; for example, that they were 
 both mortgage estates. But that was not the meaning of the 
 learned judge, for the case he had in hand was one between an 
 unpaid vendor claiming a lien for purchase-money, and an equi- 
 table mortgagee with whom the deeds had been deposited bv 
 the purchaser. These equitable estates the learned judge held 
 were "of precisely the same nature and quality," and he gave 
 priority to the mortgagee because, having the deeds, he had 
 the better equity. 
 
 If this second rule (that of Kindersley, Y. 0.) is defective, 
 nauch of the judgment in which it is found is, nevertheless, of 
 the greatest value ; and although stated by way of exception to, 
 or modification of, the rule there laid down, it is, as the writer 
 thmks, the best exposition anywhere to be found of the true 
 view of the subject. The Vice-Chancellor's rule is quoted every- 
 where; the extracts from the judgment given below are almost 
 never met with. The learned judge said • 
 
 oircumstanoe, give the better equity. The deeds mavKfltf.^^^,®'*" 
 
^78 
 
 OSTfiNSIBLE OWNERSHIP AND AGENCY. 
 
 I 
 
 justice which a court of equity applies universally in deciding upon con- 
 tested rights." 
 
 " Indeed, it appears to me that in all cases of contest between persons 
 having equitable interests, the conduct of the parties and all the circum- 
 stances must be taken into consideration in order to determine which has 
 the better equity." 
 
 And after stating that the text-writers mislead, 
 " when an opinion is expressed that the one or the other has the better 
 equity," ' 
 
 he adds: 
 
 "If I am right in my view of the matter, neither the one nor the other 
 has neceosarily, and under all circumstances, the better equity. Their equi- 
 table interests, abstractedly considered, are of equal value in respect of 
 their nature and quality: but whether their equities are in other respects 
 equal, or whether the one or the other has acquired the better equity, must 
 depend upon all the circumstances of each particular case, and especially 
 the conduct of the respective parties. And among the circumstaneea which 
 may give to one the better equity, the poaaeation of the title<teeds ia a very 
 material one." 
 
 We have still no reference, by name, to the law of estoppel; 
 but we have oondact (the ground upon which estoppel proceeds) 
 as the basis of decision, and we have the conduct of the prior 
 equitable owner put fprward as a reason for postponing him to 
 a subsequent purchaser, who was misled by that conduct and 
 changed his position upon the faith of it. That is estoppel. 
 
 Possession of Deeds a Cieoomstanob. 
 
 Adopting then (provisionally, and subject to a modification 
 to be afterwards noticed) the language of Kindcrsley, V. 0., 
 just quoted, the next question is as to the proper weight to be 
 attached to possession of the deeds. If we cannot say 
 "that the possession of title^eeds will, in all cases and under all circum- 
 stances, give the better equity," 
 in what cases and under what circumstances will it do so! 
 
 Going back to 1801, we find Lord Eldon declaring that there 
 is no ground for the postponement of the prior claimant, 
 "unless there is fraud or concealment or some such purpose, or some con- 
 currence in such purpose; or that gross negligence that amounts to evi- 
 dence of a fraudulent intention." i 
 
 At the Other extreme we have the rule of Malins, Y. 0., above 
 
 quoted^ that 
 
 "in every case where the equitable mortgagee either omits to get, or, hav- 
 ing got, gives up possession of the deeds, he must be postponed.' 
 
 Between these, estoppel urges that (1) if, even without fraudu- 
 lent intent, the first mortgagee accredits the title of the mort- 
 natrnv hv nllnwincr him the oustodv of the decds: and (2^ if the 
 second mortgagee be misled to his damage by such permitted 
 custody, then the first ought to be postponed to the second. 
 1 Evans v. Bickcell (1801), 6 Ve& 191. • 
 
 

 liND — roj8E8SION OF DEEDS. gyj 
 
 Jh "^"1^ P"' "' "■'' P™f''"«J ™1« of estoppel fthat the 
 second mortgagee must have been misled^ will !„ i:? 
 cepted once the applicability of estJ^ 1 1^ T. subS aT 
 mitW; but justification of the fl,.t ^art (the nonXntaUtt 
 of fraudulent intent) will probably have to be based upon a 
 
 S Tr- "'"'"?'?'" "'«'°8'>-""> the deparTmenTo? 
 tlie law, upon a recogmtion of the universality of the principle ■ 
 The foUowmg tabulated result of the principal authorities wU 
 
 tZVtZ: '^""""^ """'"'"'■^™ ''- "' ""« ^»' 
 A. Legal Estate v. Equitablb Estate. 
 
 CASES WHBBB EQUITABLE 
 MOBTOAOEB FIB8T AND 
 LEGAL MOBTGAGBE SEC- 
 OMBl. 
 
 (1) 1849. Worthington v. 
 Morgan 
 
 WHO HAD 
 
 DEEDS. 
 
 Mfg. 
 
 <8) 1791. Plumb v. Fluitt 
 
 •(8) 1851. Hewitt v. Loose 
 more 
 
 <4) 1859. Espinv.Pember 
 ton 
 
 (5) 1874. Agra Bank v. 
 Barry 
 
 (6) 1885. Garnham v. 
 Skipper 
 
 X 
 X 
 
 X 
 X 
 X 
 X 
 
 WHO WON. 
 
 %' X "X 
 
 <D 1871. Ratoliffev.BarnJ 
 
 »«* X 
 
 <8) 185a Lloyd v. Att 
 wood 
 
 BEMABKa 
 
 X 
 
 X 
 
 X 
 
 Legal omitted to make 
 all inquiry for deeds. 
 
 Legal made inquiry, but 
 reasonable excuse 
 made for non-produo- 
 tion. 
 
 DittOb 
 Dittos 
 
 X Dltta 
 
 X 
 
 X 
 
 <1) 16 Sim. 547; 18 L. J. Ch. 283. 
 <3) 2 Anst 4aa 
 
 <8) 9 Ha. 449; 21 L J. Cb. 69. 
 <4) 6Jur. N.S.167. 
 
 'Seech.VIIt 
 
 Ditta 
 
 Legal received bundle 
 and thought he had all 
 the deeda 
 
 Mortgagor got deeds 
 from equitable by 
 , fraud and gave them 
 I to legal 
 
 (5) Lk R 7 H. L 185. 
 
 (6) 34 W. R. 185; 55 1* J. Ch. 26a 
 
 (7) L R 6 Ch. 662; 40 L J. Ch. 147. 
 
 (8) 8 De G. & J. 614; 29 L J. Ch. 97. 
 
280 OSTENSIBLE OWKEBSHIV AND AGENCY. 
 
 A. Leoal Estate v. Equitable Estate — Continued. 
 
 OASES WHEBB LEOAL MORI- 
 OAOEE FIRST AND EQUI- 
 TABLE MORTOAOBB SEO- 
 ONa 
 
 WHO HAD 
 DEEDS. 
 
 WHO WON. 
 
 REHARK& 
 
 mg. 
 X 
 
 X 
 X 
 
 LmoI 
 
 sag. 
 
 Mg. 
 X 
 
 Legal 
 Mtg. 
 
 \ _ 
 
 (9) 188!l Lloyds' Bank v. 
 Jonea 
 
 r. 
 
 (10) 1835. Newman V.New- 
 man 
 
 X 
 X 
 
 Legal omUted to mak& 
 all inquiries for deeds. 
 They ware trustee* 
 and thought the soHq- 
 itors had them. 
 
 Legal parted with deeds 
 on reasonable excuse 
 and deposited with 
 equitable. 
 
 Legal received bundle 
 and thought he had all 
 the deeda 
 
 (11) 185a Colyer v. Finch. 
 
 (9) 29 Ch. D. 281. (11) 19 Beav. 600; 5 H. L. C. 905 ; 
 
 (10) 28 Ch. D. 674; 28 L. J. Ch. 674 26 L. J. Ch. 65. 
 
 B. Legal Estate v. Legal Estats. 
 
 TWO MORTGAGEES CLAIM 
 LEGAL ESTATE, SECOND 
 HAS PESOS. 
 
 WHO WON. 
 
 
 Mtg. 
 
 Mtg. 
 
 
 (1) 1882. Clarke v. palmer 
 
 (2) 1860. Hunt v. Elmes. . . 
 
 X 
 
 X 
 
 First allowed mortgpgor to retaio 
 deeds, and was postponed not only 
 to second, who got the deeds, but 
 to third, who did not And see 
 Goodtitle v. Morgan (1787)^ 1 T. IL 
 763. 
 
 Solicitor mortgaged to first, his cli- 
 ent,and gave him bundle in which 
 client thought deeds were. 
 
 (1)21 Ch, D, 124: 61 L= J= Gh= (2) 3 De G., F^ & J» 578; 30 L. J. Gh- 
 684. 255. 
 
LAND — POSSESSION OF DEEDS. £81 
 
 B. Legal Estate, v. Legal Estate ^Continued. 
 
 TWO M0BT0AGEB8 CLAIM 
 LEGAL ESTATE, SECOND 
 HAS DEEDS. 
 
 WHO WON, 
 
 let 
 Mtg. 
 
 (8) 180J. Evans v. Bicknell 
 
 (4) 189a Re Ingham. 
 
 td 
 Mtg. 
 
 BEMASEa 
 
 (5) 1884. Northern Coun- 
 
 ties V. Whipp. . 
 
 (6) 1698. Re Castell; Roper 
 
 v.Castell.... 
 
 X 
 
 X 
 
 First had the deeds; he loaned them 
 to mortgagor for specific purpose: 
 mort^gor used them to effect 
 second mortgage. 
 
 One of two trustee mortgagees gave 
 up deeds; afterwards received 
 bundle and thought he had deeds. 
 Conduct might have postponed 
 him, but not the estate. 
 
 Deeds stolen from first by mort- 
 gagor, and given to second. 
 
 Company gave mortgage to secure 
 I debentures; retained deeds and 
 afterwards deposited them. 
 
 W Imilm: ,si.,.o^,oa ,i' » ^-^ i^ «^= •» I- J. Oh. 
 
 0. Equitable Estate v. Equitable Estath. 
 
 CONTEST BETWEEN EQUITA 
 BLE MOBTGAGEBS. 
 
 WHO HAD 
 DEEDS. 
 
 WHO WON. 
 
 
 
 irt. 
 Mtg. 
 
 td. 
 Mtg. 
 
 X 
 X 
 
 X 
 
 Irt. 
 Mtg. 
 
 X 
 X 
 
 »d. 
 Mtg. 
 
 RE1CAHK& 
 
 (1) 1820. Frere v. Moore. . 
 
 (8) 1867. Layard v. Maud 
 (8) 1846. Allan v. Knight 
 
 (4)ld5a Rice V.Rice.... 
 
 X 
 
 X 
 X 
 
 Where no legal estate. 
 Qui prior est tempore, 
 etc. 
 
 See ante, p. 37a 
 
 In absence of evidence 
 that first improperly 
 gave up deeds no such 
 assumption. 
 
 Unpaid vendor gave 
 
 
 
 ' 
 
 I ! aeeaa lo puroliaser. 
 
 (1) 8 Price, 475. 
 
 (8) L. R. 4 Eq. 897; 86 L J. 
 
 (8) 6 Ha. 273; 15 I* J. Ch. 48a 
 Ch. 669. (4) 8 Dr. 78; 38 L. J. Ch. m. 
 
li 
 
 282 OSTENSIBLE CWNERSHIP AND AGENCY. 
 
 C. Equitable Estate v. Equitable Estate — Continued. 
 
 CONTEST BETWEEN EQUITA- 
 BLE UORTOAOEES. 
 
 WHO HAD 
 DEEDS. 
 
 (5) 1857. Roberts v. Croft 
 
 (6) 187a Dixon v. Muok- 
 
 leston 
 
 (7) 1857. Carter v. Carter 
 
 (8) 1852. Waldron t. SIo- 
 per 
 
 ut 
 
 Mtg. 
 
 <9) 1861 Dowle v. Saund- 
 ers 
 
 (10) 1888. Re Vernon......' 
 
 <11) 1890. Re Richards. . . . 
 
 (19)1881. Re Morgan. 
 
 (18) 188a Union Bank of 
 London t. 
 Kent 
 
 (14) 188a Farratidv. York- 
 shire Bankine 
 Co 
 
 9d. 
 Mtg. 
 
 X 
 X 
 
 X 
 
 WHO WON. 
 
 lit. 
 Mtg. 
 
 X 
 X 
 
 id. 
 Mtg. 
 
 X 
 
 X 
 
 X 
 
 Remarks. 
 
 First believed he had the 
 deeds. 
 
 Ditta 
 
 Deeds may be left with 
 mortgagor if he be ond 
 of several ownerai 
 
 First gave up deeds on 
 excuse ana neglected 
 to get them back. 
 
 Deeds given up by solic- 
 itor of first; client not 
 postponed; but solic- 
 itor (as assignee of 
 client) postponed. 
 
 Solicitors of first gave up 
 mortgage, eta 
 
 Ditta And see Frith i. 
 Cartland, 2 H. & M. 
 417; 84 L. J. Ch. 801. 
 
 Trustee of first deposited 
 deed for loan to him- 
 self. See also Cave v. 
 Cave (1880). 15 Ch. D. 
 639. 
 
 First had equitable mort- 
 gage of leaseholds 
 prior to the execution 
 of the lease. After its 
 execution it was de- 
 posited with second 
 mortgagee. First did 
 not know when second 
 created that lease had 
 been executed, and so 
 not negligent in leav- 
 ing it witn lessor. 
 
 First stipulated to get 
 deeds, but neglected to 
 enforce delivery. 
 
 (5) 2 De G. & J. 1; 27 L. J. Ch. 220. 
 
 (6) I* R 8 Ch. 165; 42 L. J. Ch. 210. 
 
 (7) 8 K. & J. 18; 27 L. J. Ch. 74 
 
 (8) i Vt, ids. And see Hall v. West 
 End (1888). 1 Cab. & E. 161; Ex parte 
 Reid (1848X 17 I^ J. Bk. 19. 
 
 (0) 2 H. & M. 242; 84 L. J. Ch. 87. 
 
 (10) 82 Ch. D. 165; 88 id. 403; 56 L. 
 J. Ch. 12. 
 
 (11) 45 Ch. D. 589; 59 h. J. Ch. 72a 
 
 (13) 18 Ch. D. S3; 50 L. J. Ch. 834. 
 (18) 89 Ch. D. 288; 57 L. J. Ch. 1022. 
 
 (14) 40 Ch. D. 182; 58 L. J. Ch. 
 
LAND — POSSESSION OF DEEDS. 2S3 
 
 A ^R^i^nf •'>'' '^.■*» ""''<'» ("-^-^ "» be referred to as 
 A, iJ. and C.), It must be observed that the A. and B. cases are 
 
 the iZ^ f """"u^ '"°'''«"«* " «"' '» P"'"' <" 'too. yet 
 le.iS.r^^?! ^'' ■^"'""" •^'^'« P™"'y because o ho 
 ZinT ; *''''"'° J"''""" »'"»y' " "bether there is anv 
 jmson for depriving the legal mortgagee of such prioritv. In 
 other words the legal mortgagee is in reality second; the law 
 
 2C: t*" ^ ^" '^ "■"« ''°y"''°« '" b" conduct whil 
 relegates him to the second place!' 
 
 u2l^' 7^ '"' ""^ "•''"' '"°'^' "" ''^ '"■» »"y disturbing 
 feature. In them priorities are declared free from any check 
 
 or interposed obstacle. In them Brstin time is first to 'ret 
 unless — as we shall see. 
 
 nnw-!"^^'*'^**'"*^ *^^ ^^^^ °^ possession of the deeds upon 
 pnor,f,,es we must take it, then, that where the legal estate 
 
 /ae*. pnonty. And the question in all the cases is, WhatTffect 
 upon such priority has possession of the deeds? 
 That possession of the deeds has no effect whatever upon 
 
 added that conduct with reference to such possession hL fre- 
 quently overpowering influence. What is meant is that from 
 
 but 27/h ^'^'''' ^^ '^' ^^^^ "^^^^°g ^"^ be argued ; 
 tiy ..' circumstances under which possession has been 
 parted with or acquired constitute the essential element. At 
 the furthest possession unexplained may sometimes be evidence 
 of these circumstances; but careful distinction must be made 
 between possession as a factor in the inquiry (which it never is) 
 and possession as some evidence of a factor (which it may be) » 
 
 * Estoppel cannot follow here. Es- 
 toppel operates when he who would 
 otherwise have been first has misled 
 bis rival But in the A. cases he who 
 would otherwise have been first (the 
 legal mortgagee) has not misled any- 
 Ijody^ for his opponent's mortgage 
 -ss takes prior to tii6 legal mort- 
 gagee acquiring his interest That 
 estoppel seems to halt here h not 
 
 due to its defective powers, but to 
 the anomalous and disturbing effect 
 of the legal estate. 
 
 »In Allen v. Knight (1846), 6 Ha. 
 272;. 16 L. J. Ch. 480, it was held that 
 from possession of the deeds by the 
 mortgagor it could not be assumftd 
 that the mortgagee had Improperly 
 handed them over. 
 
28^ 
 
 OI^ENSIBLE OWNEHSHIP AND AQEKOT. 
 
 
 In other words, as between competing grantees the first in * 
 time (or the holder of the legal estate) alone can have it; if the 
 other is to be preferred it must be, not because such other has 
 the estate (for he has it not), but because, for some reason, the 
 first is estopped from setting up his priority; and such estoppel 
 may arise from conduct with reference to possession of ,the 
 deeds. That is the whole effect of the possession of the deeds 
 in questions of priority. 
 
 Let us get a firm foundation: 
 
 " If a roan makes a mortgage, and afterwards mortgages tbe same estate 
 to another, and the first mortgagee is in combination to induce the second 
 mortgagee to lend his money, this fraud will without doubt, in equity, post- 
 pone his own mortgage. So if such mortgagee stands by, and sees another 
 lending money on the same estate without giving him notice of the first 
 mortgage, this is such a misprision as shall forfeit his priority." ^ 
 
 This language (used in 1716) should since 1837 have given 
 
 place to the phraseology of estoppel: 
 
 "Where one by his words or conduct wilfully causes {induces, per Pol- 
 look, C. B., in Bill v. Richards, 8 Jur. N. S. 622) another to believe the exist- 
 ence of a certain state of things and induces him to act on that belief so 
 as to alter his own previous position, the former is concluded from aver- 
 ring against the latter a different state of things as existing at the same 
 time."' 
 
 The next step is this: that if an owner may be estopped by 
 standing by while another poses as entitled to deal with the 
 property, so also he may be estopped by furnishing this other 
 with the title-deeds under such circumstances as will enable him 
 to represent himself as the true owner. 
 
 For example, if a mortgagee were to deliver up the deeds to 
 the mortgagor in order to enable the mortgagor to hold him- 
 self out as the uninf rnbered owner,* th( mortgagee ought to 
 be estopped from setting up his mortgage as against the person 
 duped by the mortgagor. Observe that it is not the possession 
 of the legal estate or possession of the deeds in these cases 
 which enables the second mortgagee to claim priority ; but the 
 fact that the first mortgagee has, by his conduct, enabled the 
 mortgagor to hold himself out as the unincumbered owner. 
 Giving to the mortgagor possession of the deeds is but one 
 
 1 Peter v. Russell (1716), 1 Eq. Ca. 
 Ab. 822; 2 Vern. 736. See also Ibbot- 
 sen V. Rhodes {1706), 3 Vern. 554; 
 Berisford v. Milward (1740), 2 Atk. 
 
 3 Pickard t. Sears (1887), 6 A. & K 
 474. 
 
 'This qualification was made in 
 Re castell (1898). 1 Cb. 821; 67 L. J. 
 
 49; ajhriisss T. Ha.wkaa (1853). 4 D.^ Gh. IM, 
 M. & G. I8t Hooper v. Gumm (1868), 
 L. E. 2 Oh. ^t; So L. J. Ch. 605. 
 
LAND — POSSESSION OF DEEDS. 
 
 285 
 
 of the ways in which the first mortgagee may assist in deceiv- 
 ing the second mortgagee. It is an example, merely, of the 
 operation of the rule of estoppel, and is in no way dependent 
 upon any magical influence attaching to title-deeds 
 
 And as the mortgagee, by leaving the deeds with the mort- 
 gagor, has authorized this inference, he is estopped from deny- 
 ing the fact. That is rational. It is the law of estoppel. All 
 the cases must be sustained by parity of reasoning; and the 
 rules are invalid which proceed upon possession of the deeds, 
 and not upon conduct with reference to such possession. 
 
 Proceeding in wholly ditferent fashion the cases above tabu- 
 lated may be taken to have established the following propo- 
 sitions: Off 
 
 1. Nothing but fraud, or such gross and voluntary negligence 
 as IS evidence of fraud, will oust the priority of the first claim- 
 ant: A., 2, 3, 11; B., 3, 5; C, 6.» 
 
 2. Fraud will be imputed if you do not ask for the Jeeds: 
 A., 1, 9. 
 
 8. Unless indeed you are not entitled to them (as in the case 
 of one of several owners mortgaging his share): C, 7. 
 
 4. Fraud will be imputed if you do not get the deeds, even 
 if you believe that your solicitors have them: A., 9. 
 
 6. Fraud will not be imputed if you osk for the deeds, and, 
 not getting them, are given some apparently reasonable but 
 reaiiy untrue excuse: A., 2, 3, 4, 5, 6. 
 
 6. Nor if you ask for the deeds and, receiving a bundle in 
 which you are told they are, you do not discover that they are 
 really not there: A., 7, 11; B., 2, 4; C, 5. 
 
 7. Fraud will be imputed if you give up the deeds* B !• 
 C, 4. or . •, , 
 
 8. But not if the mortgagor alleges some apparently reason- 
 able but really fictitious purpose in asking for them : A., 8 10- 
 B.,3. ' » » 
 
 9. Fraud will be imputed if, giving them up, you do not in- 
 sist upon their return within a reasonable time: C, 8. 
 
 13 Dav. Con. (4th ed.), 289, 240. and (1892) A. C. 262; €1 L. J. Ch. 657. 
 
 »See also Taylor v. Russell (1891). per Lord Macnaghten. 
 1 Ch. 8; 60 L. J. Ch. 1, per Kay, J.; 
 
2S6 
 
 OSTENSIBLE OWNERSHIP AND AGENOV. 
 
 10. Or if for any reason you could not originally get th& 
 deeds, you neglect to obtain them within a reasonable time 
 after it becomes possible to do so: C, 13, 14. 
 
 11. Fraud will not be imputed if you leave the deeds with 
 your solicitor, and he gives them up to the mortgagor. The- 
 solicitor, did he afterwards take an assignment of your n^ort 
 gage, would be postponed: C, 9, 10, 11. 
 
 12. Fraud will not be imputed if you leave the deeds with 
 the trustees of your estate, who deposits them as security for 
 a loan to himself: C, 12. 
 
 13. JiTor if the deeds are stolen from you: B., 5. 
 
 14. If the mortgagor be allowed to retain the deeds the 
 mortgagee will be postponed, not only to the second mortga- 
 gee, to whom they are delivered, but also to a third mortgagee 
 who never got them: B., 1. 
 
 It is not necessary to repeat what was said in the preceding^ 
 chapter | as to the unreality of much of this. If jurisprudence 
 is to maintain its claitti to rank as a science, its exppnents must- 
 discard fictitious fraud and learn to build with more solid ma- 
 terial. 
 
 One essential and valuable point extractable from the above 
 cases is that, not possession of the deeds, but how they got 
 there, is the important and determining factor.* For example,, 
 a mortgagor, in fraud of his mortgagee, deposits the deeds with 
 a banker; does the banker acquire priority over the mortgagee? 
 Nobody can tell without further information; and yet the rules 
 quoted at the opening of this chapter expressly cover the case. 
 What can be said ? 
 
 1. If the mortgagor stole the deeds from the mortgagee, the 
 mortgagee has priority: B., 5. 
 
 2. If the mortgagee never asked for the deeds, and so never 
 had them, the banker probably has priority: A., 1, 9; but see 
 C, 7. 
 
 And so on, and so on, throughout the illimitable variety of 
 cases, some only of which are to be found in the foreffointr 
 tables. ' ® * 
 
 Were there still room for doubt that it is conduct with 
 
 »Ch,XVIIL 
 
 = Bee Thorpe v. Houldsworth (1888), 
 L. R 7 Eq. 147; 88 L. J. Ch. 198; 
 National v. Jackson (1886), 88 Ch. D. 
 
 18; Fai-rand v. Yorkshire a888). 40 
 Oh. D. 189: 58 L. J. Ch. 841; Powell 
 V. London (1893X 1 Ch. 616; 62 L J.. 
 Oh. 795k 
 
LAND — POSSESSION OF DEEDS. 
 
 28T 
 
 reference to the deeds and not possession itself that affects pri- 
 onty, a consideration of. case B. 1 would certainly dispel it 
 in that case the first mortgagee allowed the mortgagor to re- 
 tam the deeds; the mortgagor, in fraud of this mortgagee 
 made two ubsequent mortgages; the second mortgagee got 
 the deed., and the third, of course, did not; but he know where 
 they were. Now if it be possession of the deeds that gives 
 priority, the second mortgagee will be preferred to the first 
 for he (the second) has the deeds; but the third mortgagee 
 will not be so fortunate, because he has not the deeds. The 
 decision, however, is otherwise, and third mortgagee as well 
 as second was given priority over the first. Estoppel would so 
 say for the third as well as the second mortgagee was misled 
 by the locality of the deeds, for which the first mortgagee's 
 carelessness or trustfulness was responsible. 
 
 Estoppel the Applicable Doctrine. 
 
 But, having eliminated fictitious fraud from our philosophy 
 to what principle of judicial action are such cases to be re- 
 ferred? If a mortgagee stands by and allows the mortgagor 
 to appear as the unincumbered owner, the mortgagee is said to 
 be estopped. And if the mortgagee furnish the mortgagor with 
 the deeds and so enable him to pose as the unincumbered 
 owner; or if, by not asking for the deeds, or by conduct of anv 
 other sort, ne give the mortgagor equal assistance, shall we nJt 
 say that, in these cases also, the reason for his postponement 
 is estoppel? *^ . 
 
 In the case above referred to (where the third mortgagee, 
 who had not the deeds, as well as the second, who had them 
 obtained priority over the first because he had allowed the 
 mortgagor to retain them). Hall, V. C, said: 
 
 The "principle of equity" to which the Vice-Chancellor 
 referred cannot be that as between persons with equal eaui- 
 wes ne w iio has the deeds is to be preferred, for the third mirt- 
 1 Clark V. Palmer (1882), 31 Ch. D. 129; 51 U J. Ch. 686. 
 
'288 
 
 0$^ENSIBL£ OWNKBSHIP AND AGENOT. 
 
 gagee had not the deeds. It is only by fixing attention upon 
 the locality of the deeds, instead of upon the conduct of the 
 first mortgagee, that one misses the fact that it is such con- 
 duct that, according to the principles of equity (estoppel), de- 
 termines priority ; and that it must have been to such prin- 
 ciples that the VicorChancellor referred. ^ 
 
 And there is much in the language of many of the judges 
 which may be appealed to in support of the view here advo- 
 cated. Estoppel is not, indeed, directly invoked, but the lan- 
 guage frequently not only demonstrates that it is conduct 
 with reference to the possession of the deeds and not the mer^ 
 possession of them that is important (as we have already seen), 
 but that such conduct has the effect of inhibiting assertion of 
 priority — which is estoppel. For example, in National Pro- 
 vincial Bank of England v. Jackson^ Cotton, L. J., said: 
 
 " As between equitable claims the question is whether one party has 
 acted in such a way aa to justify him in inaiating on hia equity as against 
 the other." 
 
 The only criticism lo which this statement seems to be open 
 is that it ought not to be confined to "equitable claims;" for 
 with reference to legal estates as well as equitable the ques- 
 tion must always be whether the first owner "has acted in 
 such a way as to justify him in insisting on his * (estate) ' as 
 against the other;" 
 
 In Northern Counties Fire Ins. Co. v. Whipp' the law is 
 
 stated to be 
 
 " that the court will postpone the prior legal estate to a subsequent equi- 
 table estate, where the owner has assisted in or connived at tha fraud 
 which has led to the creation of a subsequent equitable estate; of which 
 assistance or connivance the omission to use ordinary care in inquiry 
 after or keeping title deeds may be, and in some cases has been held to be, 
 sufficient evidence, where such conduct cannot otherwise be explained. 
 . . , But that the court will not postpone the prior legal estate to the 
 subsequent equitable estate on the ground of any mere carelessness or 
 want of prudence on the part of the legal owner." » 
 
 And if we ask, Upon what scientific ground will the court, 
 
 in such cases, decree postponement of the incumbrancer who 
 
 has the legal estate? there can be no answer but that supplied 
 
 by the law of estoppel: 
 
 "Where one, by his words or actions, wilfully induces another to be- 
 lieve the existence of a certain state of things, and induces him to act on 
 
 1(1886) 88_Ch. D. 18, approved in 
 Farratsd t. Yorkshire (1883). 40 Ck 
 D. 189; 58 I* J. Ch. 888. 
 
 >(1884) 26 Ch. D. 494; 68 L, J. Cb. 
 685. 
 
 ' See also the language in Powell 
 V. Luuuon (1598), i Ch. 615; 6d L. J. 
 Ch. 795; and Re Castell (1898X 1 Ch. 
 821; 67 L. J. Ch. 168. 
 
l^ND — POSSESSION OF DEEDS. £89 
 
 Feaud and Caeblessnbss. 
 
 A7A^u^u''^ ^«^*" ^*®^^>' 6 A. & R 1 cha VIII IX XVTTT 
 474; BUI v. Rioharde (mi), 8 Jur. ^ ' ^^^"* 
 
 rf . 8. SS2, 
 
 19 
 
 2,*^^ 
 
 as 
 
CHAPTER XX. 
 
 OSTENSIBLE OWNERSHIP AND AGENCY- LAND -QXH PftlOB 
 EST TEMPORE POTIOR EST JURE. 
 
 This rule seems to be so transpaiontly just and reasonable aa 
 to require no support. Closer inspection, however, more es- 
 peciaUy as to its conventional meaning and application, may 
 lead us to a contrary conclusion. The two foregoing chapters 
 have made it clear that, as the law at present stands, the rule 
 in hand is not only not of primary iirportance, but tha it is 
 subsidiary to ti\'o other rules. The three rules, in their ac- 
 cepted order of importance, may be shortly thus stated; 
 
 Rule I. Wheie the equities are equal, the law (the legal title) 
 
 will prevail. 
 Rule II. Where the equities are equal, possession of the deeds 
 
 gives priority. , . 
 
 Rule III. Where the equities are equal, the first m time has 
 
 priority. 
 
 Now, supposing that the equities (the merits) being equal, 
 A. has the legal estate, B. has the deeds, and C. is prior in point 
 of time; then the first rule will give priority to A., the second 
 rule to B., and the third rule to C. This conflict has been 
 avoided by subordinating rule II to rule I, and rule III to- 
 both of them. They therefore should be understood in this 
 
 way: 
 
 1. When the merits are equal, he with the legal estate mU 
 
 be prior. 
 
 2. If neither competitor has the legal estate, then he witb 
 
 the deeds will be prior. 
 
 3. If neither competitor has the legal estate c. «he deeds, 
 then he who is first in time will be prior. 
 
 The preceding chapters have presented some reasons against 
 the continuation of the dominating influence of that which is 
 still called the legal estate; and some reasons for the conten- 
 tion that the possession of the title-deeds is of much less im- 
 portance than the conduct which placed them there. We are 
 
I-ANfi — PIHST IS TIME. 
 
 291 
 
 deretood and applied, can be allowed to stand. 
 
 Conventimal Meaning and Appltcailon.-A priori and anart 
 .together ton. the anthorities, one would sa/thaUho Xn 
 hand mnst be a valid one. It seems moreovJto be in perW 
 harmony with the principles of estoppel, which (as has al^X 
 been pointed oat) may bo taken as saying that, as tetTeen 
 
 competing grantees of an estate, one of them%lone^n"mX^e 
 first, can have it; and that, if the second is to be preferrM it 
 
 set .ng op h.s pnonty. With like meaning the ruk in hand 
 
 t:^zx:i7 "^ "■""? "^ ^"'" <'-• ""- 'fc-^ 
 
 onew^rh Z. '''°PP'°K ^-'yl'ody.) the first in time (i ... the 
 one who has the estate) shall prevail. \ , ""a 
 
 n„!.'"i'"'?J^i"°°^ '^'°« """' '''«""''»'. «=t<>PPel oan have no 
 ridi^T' ™le —"loss indeed its interp',;tations and Z 
 
 ihere is the widest divergence, arising principally from disa- 
 greement as to the word "equities" (or meriu). which seems 
 
 to the principles of estoppel. For in the law of prioritioi mer^ 
 
 horjfl'^"]'' ■* ''"'" ""'<=" i° "■« •»" of estoppel are 
 thought to be widely nne<,ual; and a first purchaser malr 
 
 cape moral condemnation and consequent loss o, prior tvuX 
 the former law while under the latter he would be saidto bkvl 
 «. conducted himself as to be estopped from setting up his ml 
 oi J» t"^r '» '""^'We to discrepant underlying prin- 
 
 as^sLi '"^ *" "'"' '"'' (^'"PP"') "'"'epresentafi^ or 
 assi tance in misrepresentation, however innocent, will estop; > 
 wl le according to the other it is said that '■ nothing but fraSd . 
 or uch gr<«s and voluntary negligence as is evidenf e of f r^nd 
 will oast '-the pnor claimant." And these results are derfved 
 from conflicting ideas as to the duty of a purchaser of p " 
 
 ,, „.„.^.,^ ,.^^„. ^.^^. pg laKea. According 
 
 * See oh. VIII, 
 
 *Ant€, p. 259. 
 
 »Ch. V. 
 
292 
 
 OSTENSIBLE OWNEBSHIP AND AOENOT. 
 
 11 
 
 to the former I may do as I like with my own, allowing all other 
 
 persons to look after themselves ; I may take such precautions as 
 
 will insure my safety and leave to others the care of their oivn 
 
 well-being; I must not defraud others, no doubt, but I am 
 
 under no obligation to protect them from fraud. According 
 
 to the other view, j^nd in harmony with the law of torts, it 
 
 may be said that 
 
 " the whole modern law of negligence, with its many developments, en- 
 forces the duty of fellow-oitizens to observe, in varying oiroumstances, an 
 appropriate measure of pr idence to avoid causing harm to one another." > 
 
 The rule under consideration (as developed by the cases) re- 
 flects the egoistic view, while estoppel strongly tends towards 
 the altruistic. Hence the opposing deductions : (1) Fraud, or evi- 
 dence of it, is necessary to postpone the prior e3tate; (2) Fraud 
 ^ is not necessary for that purpose. 
 
 . Law of Priorities. — The origin and restricted development 
 of the principles hitherto applied to the law of priorities are 
 partially responsible for the view of merits adopted in its ap- 
 plications. As we hate already seen equity, in order to miti- 
 gate the injustice arising out of the refusal of t! o courts of law 
 to recognize trusts, intervened even to the disparagement of tl>e 
 legal estate upon the ground of fraud, and under cover of that 
 word declared in favor of beneficia-^ies where there was, in 
 reality, no fraud at all.' Nevertheless, the ground of jurisdic- 
 tion was fraud, and it was impossibi.> for equity courts alto- 
 gether to dissociate their decrees from moral obliquity, or at 
 least the imputation of it. 
 
 This explanation does not hold good in casos of contests be- 
 tween merely equitable claimants. But it cf*n well be under- 
 stood that that which was necessary to jurisiliotion in the one 
 class of cases should find expression and place in the other; 
 and that fraud, being deemed essential to displace the priority 
 of the legal estate^ should also be thought to be in some meas- 
 ure indispensable to the deposition of the priority of the first 
 in point of time. 
 
 Lcm of Eatopjpd. — In subsequent chapters' many authorities 
 
 are quoted in support of the proposition that 
 
 "where the owner of ^oods has lent himself to accredit the title of an- 
 other person by placing in his power those symbols of property whioh have 
 enabled him to hold himself out as the purchaser of the goods," 
 
 1 Pollock on Torts (5th ed,), 22. » Ante, p. 259 fC » Cha XXI-XXIV. 
 
LAND — FIB8T IK tIMK. ggj 
 
 principle is applicable to land. We have in k n.^K- u 
 fraud, or evidence of fraud norrll «f ,• " "^^^ing about 
 may have been perfectlv innni . ""'S^^Sence. The owner 
 been defrauded o^trfcS into? ' T^ ^"^""^ ^^^^'^^ ^ave 
 tensible owner- it i'ilfrr^f"^ '^" title of the os- 
 and he is therefor! ;:;;"p':d^^"^^^ '^ ^^ -^-^^^'ed the title, 
 
 sometimes the law of nriori fjr T S ^^^^^^ and stocks 
 
 times the law of ertoppSsth^^^^^^ 'P'^'" "^ ^'^^ ««'°°- 
 one, for the discuss^gofroff Ij^^^^^^^^^ ^° -i^-^^ 
 
 seldom, or never are th« orT "^ " ^'"'' ''^ *^® *>^^«''' and 
 face.! . ''' ^'' ^^" °PP°«^°S principles brought face to 
 
 Apposing Cotidua{on3.— The div^r^r.* , u 
 
 pel may best be appreciated bv ob"ePvattr„, °' ^''''P- 
 
 For that purpose C-L .. OaJ' ZrCteed T^f °"°; 
 of many iuch. ^ selected. It is typical 
 
 Land is conveyed to a trustee in such a wav th»» n„ * 
 the trust is visible: in fraud nf ti,! u T*f . "' no trace of 
 
 makesseveralsuoce sive ™gL to Zt'""^ f" '™^«" 
 whom have notice of the "urt • f,^ ll f ''.°°P'°' """^ »' 
 priorities say that the ^mZUT^'t STbt H"? '"^ 
 are second, and the other mortg^e'es foUorin the "otr "" 
 
 (the" ri^r :;VriiS: mtt^er t' ""' '•-"'^"-■' 
 legal estate.^ But that rZrfofwV" m P""""^'"" <" ""> 
 
 i.rt:£SSS^-^-^ 
 
 ershin anrl f hof ,u ^^^\^^^ «'8 misrepresentation of own- 
 
 the^X' ""^ "" ""'™'"'" -'»Pl-» fro- «-erT„g 
 
 » See cha XXII. XXIII. XXIV. 
 
 HmO) 15 Ch. D. 689; 49 L. J. Ch. 
 005. 
 
 Sin Newall v. C. F. R R. Co. (1878), 
 
 It 18 further settled by these adjudi- 
 cations that if a bill of lading is as- 
 rtgned and the legal tif le passed to a 
 oona fide purchaser for a valuable 
 
 consideration before the right of the 
 stoppage is exercised, the lien of the 
 vendor ceases as against the assignee 
 on the well known nrin,>,-ni» ♦!,„,. . 
 secret trust wiU not'be enforced'as 
 against a bona fide holder for value 
 of the legal title. In such a case, if 
 the equities of the vendor and as- 
 signee be considered equal (and this 
 
m 
 
 OSTENSIBLE 0WNEB8HIF AND AOENOr. 
 
 The other part of the decision (the postponement of the later 
 mortgagees to the beneficiaries) rests upon the maxim in hand 
 (first in time, first in law). It declares that the merits of the 
 opposing cla-mants are equal, and that the beneficiaries are 
 first in time; both parties were innocent of fraud and the equity 
 of the beneficiaries was the earlier. But estoppel denies* the 
 equality. It asserts (in the earlier language in whioh it was 
 
 couched) 
 
 " that whenever one of two innocent persons must suffer by the acts of a 
 third, he who enables such third persor to occasion the loss must sus- 
 tain it." 1 
 It asserts that where the owner of property 
 
 "has lent himself to accredit the title of another person by placing in his 
 power those symbols of property whioh have enabled him to hold himself 
 out as the purchaser "> 
 
 of the property, he is estopped from setting up his title as 
 against persons who have changed their position upon the faith 
 of the misrepresentation of ownership. 
 
 In other words, Gave v. Cave^ would be decided one way 
 under the present law of pri rities, and another way under the 
 law of estoppel by ostensible ownership. For the former law 
 nothing can be urged but its unfortunate origin and tortuous 
 history. The latter is solidly founded upon reason and justice. 
 
 Suppose that in Cave v. Cave the creator of the trust had 
 vested the title in a trustee with a view to the commission of a 
 fraud — with the design that the trustee should create equitable 
 mortgages whioh would be invalid as against the beneficiaries, 
 it would then be very clear that the merits would not be equal,* 
 and that all the mortgagees ought to hav priority. Are tbe 
 merits equ; if without such design the settler fully equips his 
 
 is certainly the light most favorable of such circumstances as render the 
 
 to the vendor in which the transac- 
 tion can be regarded), the rule ap- 
 plies that where the equities are 
 equal the legal title will prevail. 
 But in such a case it would be diffi- 
 cult to maintain that the equities 
 are equal. The vendor has volun- 
 tarily placed in the hands of the 
 vendee a muniment of title, clothing 
 him with the apparent ownership of 
 
 4'ko>/v/^n<1cl nnil a nomrtn doalinir nrith 
 
 vit'.> ^ -"7 — — — J {5 
 
 him in the usual course of business 
 who takes an assignment for a val- 
 uable consideration ' without notice 
 
 bill of lading not fairly and honestly 
 assignable ' has a superior equity to 
 that of the vendor asserting a recent 
 lien, known perhaps only to himself 
 and the vendee." 
 
 1 Seech. XIV. 
 
 s Ante, p. 292> 
 
 • And very many other cases. 
 
 ♦Kettlewell v. Watson (1884), 21 
 Ch. D. 685; 51 L. J. Ch. 281; 26 Ch. D. 
 503; 58 L. J= Gh= 717, The decision 
 well illustrates the absence of the 
 principles of estoppel from current 
 methods of dealing with such cases. 
 
LAND — FIRST IN TIME. 
 
 2t)5 
 
 trustee with the completest means for commission of the fraud ? 
 
 VrltZZT^ "^" appririate meLuro 
 
 prudence to avoid causing harm to others?" An answer mav 
 
 tr^Z!Z'7!"l ^""'^^-I' » » remarkable fact that if a 
 h m of »^. ?T"^ constituted, a fraudulent disposition bv 
 tneficiaJvTw V"'"°'' '" "■* P"''^"^ "'" -o' '"f«=t thi 
 ZetnM^fh ? ""J"'' '^''^' ■"" "■«' ""e result will be 
 
 In ZTmto. «. maters' B, solicitor obtained by fraud from a 
 ohent a oonveyanoe of certain lands. Afterwards the sSor 
 ma^e an equitable mortgage of the lands, and this morW 
 was upheld as against the true owner. N^w, as we ha"eS 
 
 fearTrn'vTIt ''° ""° °' P^P^''^ " » trustJ^^I thZ' 
 fear of any equitable mortgage which the trustee may create 
 
 Tf the L"!?,,'" """" ""'"' """ " "■« -vner is defrauded oui 
 of the tiUe the perpetrator of the fraud may make a good equi 
 
 of?he «" "^T "■ ™"'^ °^''"»'"« incumbrance in fraud 
 
 constLrf T'^:' 'f * P""^" "'"' ■"" "™'»ntarily been 
 constituted a trustee (or ^wwarustee) may do so. 
 
 rf Ji!f -L' '■"'°' °' ™'°PP»' ("'>''''' t™a' of conduct) the 
 decwions, ,f d.verae, ought to be reversed. In both c^ Z 
 
 S^ slTd that arhT' ""T'^P- '" '"'"' ''^''^ "■»" i' "4ht 
 !!„f, ; I ^"'**'' ""* "™ '■"""»"' Pc-^ons the owner 
 ought to suffer. But in the second case (where the owner hal 
 
 Tfr^^l^V '°^'^ ^^ '"' *■"" ''° <""» •"" intend to enable 
 fectly wel that he was equipping his trustee for fraud. 
 Estoppel would, however, not so distinguish. In both cases 
 
 de^w rr;: f v™* *""■" "'"pp^" 'y "■« -site"! 
 
 <lered to the trustee's misrepresentation of ownership; and the 
 
 'Ch.V. 
 
 *a878) L. R 11 Eq. 815; 7 Ch. Apa 
 75; 41 L. J. Ch. 17i *^ 
 
 •See cha. VIII, XXII, XXIV. 
 
CHAPTER XXI. 
 
 OSTENSIBLE OWNERSHIP AND AGENCY -GOODS -POSSESSION. 
 
 Cases involving estoppel because of ostensible ownershij) of 
 goods may be divided broadly into: 
 
 1. Those in which some onn other than the owner is in pos- 
 session of the goods themselves. 
 
 2. Those in which some one other than the owner is in pos- 
 session of docaments of title to the guods. K 
 
 The present chapter will be devoted to the former of these 
 branches of the subject, leaving the latter to succeeding pages. 
 
 Land and Goods.— In the three preceding chapters we have 
 been dealing with the rules at present in vogue with reference 
 to priorities in oases relating to land. Two of these rules, how- 
 ever, are sometimes applied to the decision of cases involving 
 chattels, namely, those relating to the legal estate and to pri- 
 ority in point of time. But it is very curious to notice that in 
 oases concerning goods the principles of estoppel are much 
 more frequently appealed to than in litigation relating to land. 
 Perhaps one might have so anticipated, for the rules were 
 evolved in real-estate cases, while the principles of estoppel by 
 misrepresentation had their origin very largely in actions re- 
 lating to personal property. 
 
 Having already said all that is necessary with reference to 
 the rules, and having shown that even in relation to land they 
 should be superseded by the principles of the law of estoppel, 
 we shall in the present chapter deal with questions of osten- 
 sible ownership (by possession) of goods as determined by those 
 principles. Indeed, the cases that we shall meet themselves 
 usually so proceed, although here and there the old rules are 
 brought into requisition.* 
 
 Accrediting the Title.— Yor example, we are quite familiar,, 
 in the law of personal property, with the statement that the 
 maxim nemo dat quod non hahet 
 
 "will certainly not apply where the owner of goods has lent himself to 
 accredit the title of another person." » i"""**! lo 
 
 1 OtxA •.a4'~V1_ 1> 
 
 — £31 !.•„_ 
 
 T. ouruj/— aire 
 
 (1873), L R. 8 Q. R 420; L R 7 H. 
 I* 496; 45 L. J. Q. R 81. 
 
 14. 
 
 Boysou V. Coies (iSiT), 6 M. & G. 
 
00OD8 — P088E88IOW. j^ 
 
 the ooBrt. would haTedtt- ?:? u™'-*"**' "«'«• There 
 table pureha J .'Jbe : IC:', traroor' T" ^"V 
 incomprehensible- • ahnn^ oii f.*"^^' *°'"»^' constructive and 
 
 ». . ^d thai p-r. :f;rrur.-rer e!: 
 
 goods m„.., because he ha, ^hf. I: oL^^^'^ »"- »' 
 
 e."pMi"^'L^.:rr.3rt[rr at- ^^^^^ ' -'^" "« 
 
 ohaserj for I would have accredits TT, r"'"^" P"""' 
 "listed iu the fraud b^ gbCt^ 'L1' 'r ^7™'"'''« 
 owne^lup of the horse.' Iut"t1.aris7„t'r 1:""^""' °' "■•' 
 
 poSeit^^itsrnr^:-^^^^^^^ 
 
 'Newbold V. Wright (1838), 4 
 Rawle (Pa.). 213; Saltus v. Everett 
 
 (1838), 20 Wend. (N.Y.) 267; Peeriei 
 etc. V. Gates (1895), 61 Minn. 124; 63 
 
 N.W.R 260; Baker v.TayJor (1893). 
 
 54 Minn. 71; 55 N. W. R. 823; Hed' 
 
 nf if w^« ''"' ^^^^^^' ^^ Minn. 27; 
 
 55 N. W. R. 116; Sage v. Sheoherd 
 
 290. 52 N. E. R. nZQ; Atlanta v. 
 Hunt (1897X 100 Tenn. 89; 42 S. W. R. 
 48a Article 1599 of the French Civil 
 Code declares that "La Vente de la 
 chose d' autrui est nulle;" but ar- 
 . i..ruviac3 5oat "En fait 
 ae meubles, possession vaut titre." 
 ihere are special provisions as to 
 lost or stolen goods, but. with these 
 
 exceptions, an innocent purchaser 
 from one in possession is protected. 
 
 |r93ri''^ "^^'"^^^ ^°^^' ^«»«' 
 The Indian Contract Act of 187^ 
 section 108 (3). provides that, if one 
 joint owner of goods "has the sole 
 possession of them by the permission 
 of the co-owner." a purchaser for 
 va ue without no|ice acquires a good 
 title. 
 
 «',w/o.^'°°'°"' ^- J' i" Covin V. 
 
 J !f > ^ ^'"'° (N. Y.), 837. And 
 
 Tn Y 38a '''°*' ''''• ^"^ <^'^*^' 
 
 « Per Bramwell, R. in Gabarronv. 
 Kreeft (1875). L R. 10 Ei. 38' 44 L. 
 J. Ex. 24a 
 
!S0S 
 
 OSTENSIBLE OWNERSHIP AND AOENOT. 
 
 merit that the title is not to pass until the price is paid, the 
 vendor is not estopped from setting up his title as against sub- . 
 purchasers.' Owing to the very general adoption of this method 
 of sale, however, the legislatures have in some jurisdictions in- 
 tervened and altered the law in respect to possession of goods 
 by vendees (and also 1 v vendors) as indicative of title.' 
 
 Possession Implying Ownership. — The cases in which posses- 
 sion may be taken as indicative of ownership usuall}' turn upon 
 {1) the character of the goods; or (2) the character of the place 
 to which they are sent; or (3) the customary employment of 
 the person to whom they were intrusted. Other cases arise, 
 but they are usually those in which circumstanc* other than 
 that of possession point to ownership. 
 
 I. Character of the Goods. — The reasonableness of the fol- 
 lowing is clear: 
 
 "Goods which from their nature are intended to bt fixed to and become 
 part of realty are giyen into possession of a bargainee under a contract of 
 'Conditional sale: and if tl^ese goods are attached to the realty, the vendor 
 may be estopped from setting up his title as against an innocent purchaser 
 for value." ' 
 
 And the distinction between allowing furniture to remain in 
 the bouse of a jeweler and peiynitting him to expose your dia- 
 monds among his own in his shop can readily be appreciated. 
 In Meggy v. Imperial^^ where a trustee in bankruptcy had al- 
 lowed furniture to remain in the hands of the bankrupt, who 
 had mortgaged it, Bramwell, L. J., said: 
 
 "I* a wine merchant be left in possession of wine, the fair inference in 
 that it is his own, and a person may be justified in advancing money upon 
 the security of it; here the goods being household furniture, no infer- 
 «nce would be drawn that the insolvent had them in his possession for the 
 purpose of selling them." 
 
 II. Character of the Place. — The character of the goods is 
 usually important, however, only in connection with the char- 
 ■acter of the place to which they are sent. For example, in the 
 
 1 Mason v. Bickle (1878), 2 Ont App. 
 «91; Austin v. Dye (1871). 46 N. Y. 
 600; Zutchman v. goberts (1871), 109 
 Mass. 63; Miller v. Parker (1898), 155 
 Pa. St 208; 26 AtL R. 803; Rodgers 
 T. Bachman (1895), 109 Cal. 853; 43 
 Pac. R. 448; Ensley v. Lewis (1899), 
 «5 S. R 729 (Ala.); Cottrell v. Carter 
 <1899), 68 N. E. R 375 (Mass.). See a 
 distinction in Comer v. Cunningham 
 <1897), 79 N. Y. 391. 
 
 a Seech. XXIII. 
 
 » McDonald v. Weeks (1860), 8 Or. 
 297. But see Vulcan v. Rapid City 
 (1894), 9 Man. 677. Distinguish Ste- 
 vens V. Barfoot (1885), 9 Ont. 692; 13 
 Ont. App. 866; Poison v.Degeer (1886), 
 12 Ont. 275. 
 
 * (1878) 8 Q. R D. 717. And see 47 
 L. J. Q. B. 119. See Giannone v. 
 Fleetwood (1898), 93 Ga. 491; 21 S. E. 
 R76. 
 
GOODS — P088E88IOW. 
 
 299 
 
 rr ^T 'f'""^ *^' '^ ^"^ "°' "^••^'^^ b«<^«"«e U.e goods were 
 Glased as furniture that the true owner escaped ; for if w 
 
 ':rt^:ry^l': ^'V^^^^ ^-nituredealert'he [IZl^ 
 certainly have been different from what it was. The true rule 
 
 men the commodity is Jnt in Sh a lav il^il^ ^"1^°"' ?' »«'«• • • • 
 
 ^a^^Lff/-* p"'- ' "V?ht p*„-n^?^y t*a tXuVd'rdrhJVu^: 
 
 in'l^'ir' '? "' ''""'^' ''^ *PP'^°^^^« "«' ™«''«lj to a case 
 m which goods a.. .nUn.i ,d to the proprietor of a business 
 but also where some ....n (in truth an Igent merely) pS 
 Tided with a shop and a stock, and o becomes in appearanct 
 * trader and the proprietor of the business.' ^i^i^^^'-*"^^ 
 
 And not only by permitting a trader to present the appear- 
 unce of ownership of property will the true owner be estopped 
 as agamst purchasers, but he may also be estopped as aZst 
 orechtors of the trader who, upon the faith of su7h appeafa ce 
 have given him credit* ' pcarance, 
 
 HI. Umal Employment of the P.r,.n.- There are many 
 cases in which possession of goods will be evidence or appear. 
 
 tS^^l ^TT '"''"^'"^ ^^'^ ^^«™- ^««tors are not 
 
 wihm the scope of the present chapter. Their possession does 
 not indicate ownership, but agency merely. Their case there 
 fore fals under the heading of ostensible agency, and wHl be 
 dealt with m another chapter.' 
 
 ' It would be better to say "If the 
 owner." 
 
 2 Pickering v. Busk (1818), 15 East. 
 43. And see Lausatt v. Lippincott 
 (1881), 6 Serg. & R (Pa.) 392; Towle 
 V. Leavitt 1851), 88 N. H. 358; Taylor 
 V. Pope (1868), 45 Cold. (Tenn.) 416; 
 Quinn V. Davis (1875), 78 Pa. St. 15; 
 Spooner v. Cummings (1890). 151 
 Masa 813; 23 N. E. R. 839; Uwen- 
 berg V. Hayes (1897), 91 Me. 499; 89 
 Atl. R 469: Atlanta v H"n* /loa-*. 
 100 Tenn. 89: 42 S. W. R 483; Heath 
 V. Stoddard (1898), 91 Me. 499; 40 Atl. 
 
 'Smith V. Orouette (1895X 2 Man. 
 814. And see Ramazotti v. Bowrine 
 (I860), 7 G a N. S. 851; 89 L. J. C 
 P. 30; Ex parte Dixon (1876), 4 Ch. D. 
 183; 46 L. J. Bk. 20. Merely finding 
 a person in charge of a shop does not 
 warrant the conclusion that he has 
 authority to purchase good& Vine- 
 berg V. Anderson (1890), 6 Man. 885. 
 
 ♦Troughton v. Gitley (1766), AmU 
 ^30.^ See the subject discussed ante, 
 ch. X!. 
 
 6 Scientifically it should be dealt 
 with in chapter XXVI, which treats 
 
 R. 547; Van DuzenT Wleblut ^l'":;" ^^^^^ ^^^I, which treats 
 <1899).77N.W.Rj7orMinnT ^^ .f .^""'"'^ «f ncy. The Factors 
 
 IJainn.). Acts, however, do not accurately dis- 
 
800 
 
 OSTENSIBLE OWNERSHIP AND AOENOY. 
 
 Traders. — Bankruptcy acts sometimes contain provisions 
 
 known as reputed-ownership clauses. They.constitute a sdrt 
 
 of statutory estoppel peculiar to persons in trade or business, 
 
 and varying in its principles from those beaten out by the 
 
 courts. The English act has the following: » 
 
 "All goods being at the ootumenoement of the bankruptOT In the poB- 
 session, order or disposition of the bankrupt in his trade or "business by 
 the consent and permission of the true owner, under such oiroumstanoes 
 that he is tlie reputed owner thereof," 
 
 shall form part of the estate. Observe the points of agreement 
 
 and ditiference between this provision and the law of estoppel : 
 
 1. They agree in requiring the consent and permission of the 
 owner — goods stolen or borrowed, or otherwise wrongfully 
 placed as part of the trader's stock, will not aflfect the owner. 
 
 2. They agree in requiring an appearance of ownership; that 
 is, the existence of such a state of affaiis as might mislead cred- 
 itors. 
 
 "The policy of the Bankrupt Act . . . never was so unjust as to 
 take his J)roperty, unless it was left by him in such circumstances as that 
 credit might have been obtained upon it"' 
 
 And so where it is customary to leave goods in the possession 
 of persons in a certain line of business, possession does not in- 
 dicate ownership; no one would be deceived, and the statute 
 does not apply.' 
 
 3. Estoppel requires that the estoppel-asseicter should have 
 been actually misled by the appearance of ownership; but for 
 the operation of the statute that condition is altogether unnec- 
 essary. For example, the statute applies although the goods 
 may have come into the possession of the trader the day before 
 his bankruptcy and after every debt has been incurred; and it 
 is not only unnecessary that e\ ory ranking creditor should have 
 given credit upon the faith of the appearance of ownership, but 
 it is quite unimportant whether any one creditor did so. 
 
 . 4. Under the law of estoppel, if the owner of goods were at 
 
 i# ^ s 
 
 tinguish between ostensible owner- 
 ship and ostensible agency, and they 
 contain, moreover, provisions appli- 
 cable tb persons v^.her than factors. 
 For these reasoi^is the points to be 
 noticed in connection with the acts 
 are grouped together a chapter 
 XXIIl! 
 
 U8 & 47 Vic. (Imp.), ch. 62, g 111. 
 See ante, ch. XI. 
 
 2 Per Lord Blackburn in Colonial 
 
 Bank v. Whitney (1886), 11 App. Cas. 
 486; 66 L. J. Ch. 47. 
 
 * Re Goetz, Jonas & Ca (1898), 1 Q. 
 B. 787; 67 L. J. Q. a 677; Ex parte 
 Watkins (1878), L. B. 8 Ch. 630; 42 
 L. J. Bk. 60. Compare the statute 
 which declares for estoppel where 
 a vendor remains in possession of 
 goods "under those circumstances 
 which create a representation of 
 ownership" (ch. XXIII). 
 
GOODS — POSSESSION. 
 
 301 
 
 
 any time estopped by the appearance of ownership (in another 
 pe^on) acted upon he would necessarily reml^^ that posT 
 
 lod Jt! ! ' ^'''"'"'' P"''"^^^ *^« «^"^^ t° retake his 
 ff t«rthl ^ ' -P""' '" ''^^ ^"'" ^* '^' ^«««^^i"g order, even 
 
 ": br^r ^^ ^^^ ^^ ^^-^^-^^^^ -^ ^^- -^^- 
 
 inJtirJv^'*''^ '^^', *^' '*^'"*" " * '«"g^ approach to that 
 justice which 18 meted out by the law of estoppel It is diffl- 
 
 Th l^t !Y ''^'°" ^°' ^^"^^''^ o^^r t creditors goods in 
 which their debtor had not a shadow of an interest. Ihich n 
 
 quently happens, they had never heard of. And it is just as 
 
 «^i. hT^ "" ""^T *^' ^'*^'°^ notoriously obtained all the 
 credit he had upon the faith of his ostensible ownership of the 
 
 f^^'.K*' '"fr 1 *^l* '^' *''"" ^^"^^ «^^^^ »>« allowed to sub- 
 tract them the day before the receiving order. The best per- 
 haps that can be urged is that for bankruptcy proceedings some 
 arbitrary rules must be set, and that these are as good as others. 
 
 L^r. K r'^ "^ '"^ ""^'^ *" '^^ creditors would be 
 found to be m the same position with reference to goods in pos- 
 
 ToTtH ''' bankrupt- that all, or that none of ^them, would 
 prove their right to an estoppel. Some general standard apart 
 altogether from considerations of individual situation therefore 
 IS formulated.' 
 
 F.n^, ana? r.n^^.- A purchaser may be estopped from 
 asserting his title as against a subsequent purchaser from the 
 same vendor If he permit the vendor to remain in possession of 
 the goods. And similarly, a vendor having made a contract to 
 sen goods may, by delivery of possession to the purchaser, be 
 estopped from asserting his title or lien as against a subsequent 
 purchaser. Such case, should properly be treated of in the 
 present chapter, but f r convenience they are relegated to an- 
 
 ^. Poamsion Accompanied hy Other Circumstmces.^ 
 
 Nor is it enoS so to doTh^t the own^il w PoP^rty against the owner. 
 Something mow mwtte coSoled wi^h «nShl5^^ agent into the possession. 
 
 i young T Hope (1848). 9 Ex. 108; «See ante, oh. XI, p, 148. 
 
 410; 28 I* J. C. P. 61; Ex parte Mon- 
 tague (1876), 1 Ch. D. 654. 
 
302 
 
 OSTENSIBLE OWMEBSHIP AND AOENOY. 
 
 the owner. That something more exists in the cases where the owner has : 
 invested his agent in possession with an apparent power to sell, or with 
 the title to the property, or toith the customary tndicia of title, which piirj^rt 
 that the title or right of property is in the party having the possession. 
 The obvious justice is that if the owner has put the agent in possession 
 and he has by acts of any kind held out the agent as having authority to- 
 sell, or has given the agent the means of holding himself out as the owner, 
 in such cases tba purchaser who has been thereby misled and been induced 
 by reason of such apparent authority or indicia of title to part with his , 
 money or the property, without notice of the real fact that the agent has no 
 authority to sell, or that the seller in possession is not the real owner, upon 
 plain principles of natural justice is entitled to hold the property agamst 
 the owner."! 
 
 Obtained hy Fraud. — The most important line of oases which 
 may be noted under this heading are those in which the owner 
 of goods has been prevailed upon to hand them over upon some- 
 misrepresentation, and the swindler has disposed of them to aa 
 innocent purchaser. Who is to lose? 
 
 Some of the authorities turn upon the distinction between 
 cases in which there is a contract for the sale of goods (al- 
 though induced by fraud), and those in which there was na 
 contract at all, alth9Ugh sometimes the appearance of one. 
 For example, where a broker got possession of goods from the- 
 owner by pretending to have sold them on account of the 
 owner to S., which was not the fact, it was said that there was- 
 no contract at all.' So also where one Blenkarn bought gocas,. 
 knowing that the vendors thought that they were selling to a 
 reputable firm known as Blenkiron & Co., it was held that 
 there was no contract.' Following this distinction it is said 
 that where there is a contract, the title of the goods passes;, 
 that it therefore passes also to the sub-purchaser; and thatt^is 
 latter, having the legal title, and as good an equity as ilie 
 original vendor, is entitled to maintain his purchase. In the 
 absence of a real contract, on the other hand, it is said that 
 the title is still i. the original vendor, and that there ard no 
 equities superior to his. It is therefore held that in order to> 
 defeat the true owner, 
 
 "he must have parted with i>08session of his property with intent to pas» 
 the title to the wrong-doer, thus giving him the apparent right of disposal." * 
 
 1 Taylor v. Pope (1868), 45 Cold. 
 (Tenn.) 416. Approved in Atlanta v. 
 Hunt (1807), 100 Tenn. 89; 42 S. W. 
 B.483. 
 
 aHollins v. Fowler (1873), L. R.7 
 Q. K'eiG; 41 L. J. Q. B. aTT; JU K. 7 
 H. L. 757; 44 I* J. Q. B. 169; Soltau 
 T. Gerdau (1890), 119 N. Y. 880; 43 
 Hun, 537. 
 
 JCundy V. Lindsay (1870), 1 Q.B. 
 D. 848; 2 Q. B. D. 96; 8 App. Caa 469;. 
 45 li. J. Q. B. 881; 46 L. J. Q. B. 233; 
 47 L. J. Q. B. 481. See Bush v. Fry 
 (1888), 15 Ont 138. 
 
 * Buruard v, iJaiupbell (1374), Oi> 
 N. Y. 76. See S. C, 55 N. Y. 456; 
 Neal T. Williams (1841), 18 Me. 891; 
 Coombs r. Chandler (1877), 88 Ohio,. 
 
GOODS — POSSESSION. 
 
 8oa 
 
 the%Tndo'?fo?m?8fefl^1rj?eTol?t^^^ the intention bv 
 
 deeuntathevendM^S^^^^^^ 
 Some Of the legislation is in line with this view: 
 
 hJnot beeS^voilfedlt^Z'^'n^^^ title thereto, but his titl. 
 
 title to the goods, provided he buv! ?Lm1« ^•i*^-?ii*y".*°9"'''^''' » good 
 of the seller's def eSt of tftle/^a*'"^* *''®'" '° «^*^ ^'^'^^ a^d wfthout notice 
 
 tn w"h-*?T 'l^']''^^^' ^^'^ a ^ery important view, according 
 to which the distinction between contract and no contract be 
 comes, under certain circumstances, unimportant. For if the 
 result of the transaction (whatever it may be) is that the swin. 
 dler appears to have the title, then the question of estoppel bv 
 ostensible ownership arises. Here we must distinguish between 
 
 ,n I • V.u' *^' ''''''^^^' ^^'^^'^^ P^«^««^i«" merely, and those 
 n which the true owner hands over to him some evidence of the 
 title In the latter case there is no reason to doubt that a sub. 
 purchaser would be protected by estoppel of the true owner, 
 flrmrd o?Sfflrm"d S ferS«^fh"' *'T *"? «*"?'™«<^ ""^^^^ ™ighfc be af- 
 
 But if the swindler obtained possession merely, and under 
 such circumstances that it could not be said that there beinc a 
 contract he acquired the legal title, the result is usually differ- 
 ent. Ihe case then may be said to become one in which the 
 innocent sub-purchase, relied upon mere possession as evidenc- 
 ing title, and that he has himself to blame; for (apart from 
 market overt) the possession, even of a merchant, is not a suffl- 
 
 178; Holland v. Swain (1879), 94 111. 
 154; Tiedeman on Sales, S 827. and 
 the many oases there cited. 
 
 iKingsford v. Merry (1856), 11 Ex. 
 877; 25 L. J. Ex. 166. Approved in 
 Pease v. Gloahec (1866), L. R 1 P. O. 
 829; 85 L. J. P. C. 66. And see ante. 
 ch. VliL 
 
 'As to the meaning of the word 
 "voidable," see ch. XXV. 
 
 (Imp.), ch. 71,. 
 
 •See 56 «& 57 Via 
 sea 2a 
 
 * Henderson v. Williams (1895), 1 
 Q. a 525; 64 L. J. Q. B. 810; Viokers 
 V. Hertz (1871), L. R. 2 a & D. 118; 
 Quirk V. Thomas (1858), 6 Mich. 120; 
 
 •• ■ "a^ \iwau/, iirx aiasB. «vo; 
 
 41 N. E. R 279. 
 
304 
 
 OSTENSIBLE OWNEBSHIP AND AOENOT. 
 
 cient foundation for title. A corollary from this is that if the 
 swindler, after thus acquiring possession, should himself ware- 
 house or ship the goods and so procure a document of title to 
 them, the sub-purchaser's position would not be improved.* It 
 will be observed that it was not with the assistance of the true 
 owner, in this case, that the swindler became possessed of the 
 document of title. It has been held, however, that if the goods 
 had been warehoased by the original owner, and he assented 
 to the transfer of them in the books of the warehouseman, he 
 would be estopped, even although there was no other evidence 
 of title.' 
 
 It must not be thought, however, that this line of decision 
 at all interferes with the validity of the distinction' between 
 cases of contract and no contract. It merely reminds one that 
 even in cases in which there is no contract the true owner may 
 by his conduct be estopped from setting up his title. 
 
 Other Cases. — Therq are many other cases exemplifying the 
 principle under consideration. For example, if a safe manu- 
 facturer, besides handing over possession of a safe under a hire- 
 and-sale contract, should paint the purchaser's name upon it, he 
 would be estopped.' A distinction is made, however, where a 
 sub-Durchaser has no reason for thinking that it was the man- 
 ufacturer who had painted on the name ; because, in such cases, 
 even if there had been a misrepresentation by the manufact- 
 urer, the sub-purchaser was not aware of it — for all he knew 
 his own vendor might have painted on the name, and he there- 
 fore did not act upon the representation as being that of the 
 manufacturer.* 
 
 So also possession coupled with a receipt for the purchase 
 price would accredit the title and estop the true owner, even 
 although the money had not in fact been paid, nor had the title 
 passed. "Settled by note" would be sufficient for such pur- 
 pose.' 
 
 iSoltau V. Gerdau (1890X 119 N. Y. St 818; 83 Atl R 1039. As to hire- 
 
 and-sale contracts see supra. 
 
 * Walker v. Hyman (187r), 1 Ont 
 App. 84& And see oh. XL 
 » Quebec Bank v. Taggart (1896), 27 
 
 x^ssti tvtn 
 
 48 Hun, 637 
 'Henderson v. Williams (1895), 1 
 Q. R 026; 64 L. J. Q. R 809. 
 3 O'Connor t. Clark (1896), 170 Pa. 
 
 

 CHAPTER XXII. ' 
 
 «ss,sU„oa„aeali„g„Uh the ,„es.o„s ..i^tZTJ::l 
 
 (8) those whi htSJe; darcothe''';: r7"'^ " ""«■ ""0 
 ready passed. CeHilZToZX oTZT''', T "'■ 
 are examDles of thA f!,..f «i °^"®'^s'iiP of ships and shares 
 
 authoritatively -diLetosIe, te: pT^t: ^^3^' ''^^ ' 
 ors have parted with their interest^'n .h?,h ^ ^«™"'- 
 
 himo^if. -_j -i, /. . decora ot a conveyance from A to 
 
\m 
 
 1 f fi 
 
 300 
 
 OSTENSIBLE OWNERSHIP AND AOENCV. 
 
 sistent with the conveyance or record. It is a clear ''aj-e r,t 
 estoppel by assisted misrepresentation. Reoognij;f tint bills 
 of lading, warehouse re«'oipts, delivery orders, dock -^atiants^ 
 transfers of shares, etc., ure documents of title in tht- soi*sc^ 
 above indicated, and that estoppel applies to tl am as j a it pointed 
 out, and mountains of difficulty will disappear , 
 
 Such law (although not it^ methf/i v>f statement) is quite 
 familiar in its relation to reai estate. it> is there teriiird "es- 
 toppel by deed," which is said to bind " par 'es acd privies. ' 
 It has already bean traated of at some length,^ an«i it is recurre-l 
 to hero msreJj for the purpose of contrasting it ^ ith t!; : more- 
 comprehtii- vive /r'ound of estopi)el above suggested, which, it 
 will be obienaci applies u'hether the subject-matter of the 
 transaction i:^ .'n ■ or personal estate, whether the document of 
 title is or is rot a deet!, and whether the sub-purchaser does^ 
 or does not acquire a *' legal" or any estate.' 
 
 And probably apart from profound learning u>on the sub- 
 ject, this estoppel view of the matter would evoke little oppo- 
 sitioa. But the accumulation of precedents invo]7ing other 
 principles, the diversity and antagonism of those precedent* 
 and principles when applied to different sorts of documents of 
 title, and the existence of statutes which proceed upon no prin- 
 ciple at all, render the establishment of our suggested method 
 of treatment impossible, or nearly so, — at all events for the- 
 present. 
 
 We have already seen that in the law of real property the^ 
 guiding principles are (1) a factitious reverence paid to the 
 " legal " estate with reasoning very " technical and not satis- 
 factory ; " ' (2) mechanical rules as to the possession of the title- 
 deeds; * and (3) astonishing juggleries with the word " fraud." *• 
 We are now to see that the law as to bills of lading hovers 
 between a view of symbolism, and a notion of negotiability with 
 accompanying antagonism to the general law ; tha^ in the realm 
 of dock warrants, etc., we have confusion plus di ting stat- 
 utes, while to sh»'"p transfers alone has the doctr ■ o^ estoppel 
 been at all adequ- r applied — helped ther v - the absence^ 
 from 80 modern a bubject, of ancient form ■ and perplexing 
 
 2A8 to "legal" and 
 estates, see cb. XVIIL 
 
 'equitable" 
 
 ■^4*1^5. nh. X ■' 
 *Ante, ch. XIX. 
 ^Ante, p. 250. 
 
GOODS — D00DMENT8 OF TITLE. 
 
 807 
 
 acts of parliament. It should be added that the American cases 
 
 ' ulu T^^ P""'*' ^^'' ^'P^'^ *^ '*>« criticisms of this para- 
 graph than the English. * 
 
 Division op the Subjeoiv 
 
 Before entering upon exposition it is very necessary that we 
 should understand exactly what kinds of documents of title we 
 are to deal with, and to justify their inclusion in one ohapter- 
 for some of them are not usually thought to be very closely as- 
 sociated. Let us notice four classes: '■ 
 
 1. Documents usually referred to as convevances, whether 
 of lands or goods. ' i ""«''"*?r 
 
 2. Bills of lading. 
 
 3. Dock warrants, warehouse-keeper's certificates, warrants 
 or orders for the delivery of goods and other such document. 
 Ihese will be grouped under the phrase « dock warrants, etc." ' 
 
 4r. i^ernticates and transfers of shares. 
 
 1. Conveyances.- While it may very well be said that a writ- 
 ten document is necessary to the transfer of land, yet in its 
 original purpose a deed was rather intended to be evidence of 
 the transfer than the transfer itself, and its evidential ohar- 
 ac ens still maintained by its form.'' With regard to such 
 title-deeds we may safely say that they are regarded as evi- 
 dence of the ownership of the person in whom they show title 
 and are intended to be representations of that fact to all per-' 
 sons dealing with the grantee. The reason therefore for the 
 estoppel for the grantors, as against persons who purchase 
 upon the faith of such deeds, is very apparent. Let us observe 
 whether the same thing cannot be said of the other documents 
 to which we have referred. 
 
 2. BilU of Lading.- Km of lading is a receipt given by 
 a common carrier for the goods shipped; it shortly describes 
 
 Acf tL*nh/"Tr' °^ *''" ^*'='°«' «' purporting to authorize, either by 
 Ac . the phrase "document of title " indorsement or by deliver;, the LT 
 
 wa ran't T^^^''' ? '''*"^' '^'^ ^««°' *^' ^"^^ d Jument to tmns^er 
 
 warrant warehouse-keeper's certifl- or receive the goods thereby reore^ 
 
 cate and warrant or order for the sented." 62 & 53 Vic. (Iml) cK 
 
 delivery of goods, and anv other dor. 8 i a. k ^a — t.-_ ^ "^i' *"*• ^'' 
 
 uments used in the ordinarv course 150 '"{l (8) °" """ "'" "'''" *'''* 
 
 or on^rT *; ^'"^Z °^ ***" possession 2 . This indenture witnesseth." 
 or control of goods, or authorizing 
 
808 
 
 68TBN8IBLK OWNEBSHIP AND AOENOT. 
 
 the goods; indicates the place of shipment and delivery; and 
 usually it contains a number of conditions regulating the obli- 
 gations of the parties, amongst the rest that certain freight is 
 to be paid. The most notable part of it, for our present pur- 
 pose, is some such phrase as "deliverable to A. B. or order." » 
 A bill of lading is sometimes said to be a contract, and legis- 
 lation so treats it,« while Baron Bramwell declares that the 
 statute is inaccurate: 
 
 "To ray mind there ia no contract in it It is a receipt for the eoods 
 stating the terms on which they were delivered to and received by the 
 ship, and therefore excellent evidence of those terms, but it is not a con- 
 tract; that has been made before the bill of lading was given."' 
 
 Whether a receipt only, or a contract, it is at all events a 
 document that is not intended to be operative merely between 
 the original parties to it. It is intended to be a representation 
 to the commercial world that the goods mentioned in it have 
 been shipped on account of the person to whom they are made 
 deliverable.* And when the person to whom it is issued in- 
 dorses it and hands it over to another person, such action is re- 
 garded as a declaration or representation that the transferee 
 is entitled to the goods, and that the transferror has thence- 
 forward no interest in them. In other words, a bill of lading 
 is a document of title," and its indorsement ought to estop a 
 
 ^ Without some such words a bill 
 of lading is not ambulatory, and no 
 person ought to take it to be a rep- 
 resentation intended to be passed on 
 to othera Henderson v. Comptoir 
 (1873), L. R 5 P. C. 200; 42 L. J. P. C. 
 60. See as to bills of exchange and 
 promissory notes, 45 «fe 46 Vic. (Impi), 
 ch. 61, § 8; 5a Via (Can.), ch. 83, g a- 
 
 2 18 & 19 Via, ch. Ill, § 1. 
 
 'Sewell V. Burdick (1884), 10 App. 
 Ca& 105; 53 L. J. Q. B. 399. But see 
 per Lord Esher in Leduc v. Ward 
 (1888), 20 Q. B. D. 480; 57 I* J. Q. B. 
 879. 
 
 ♦This is now perfectly clear. See 
 18 & 19 Vic. (Imp.)^ ch. Ill, § a It is 
 the chief postulate in the cases of 
 which Grant v. Norway (1851X 10 
 C. B, 665; 20 L. J. C. P. 93, is the lead- 
 ing esampxc. See Habbersty v. 
 Ward (1853), 8 Ex. 830; 22 L. J. Ex. 
 113; Holton v. Sanson (1862), 11 U. C. 
 
 C P. 606; The Schooner Freeman v. 
 Buckingham (1855), 18 E jw. (U. S.) 
 182; Pollard v. Vinter (1881). 105 
 U. S. 7; Bank of Batavia v. New 
 York (1887), 106 N. Y. 195. Arkansas, 
 California, Dakota, Kentucky, Mary- 
 land, Minnesota, Missouri, New York, 
 Pennsylvania and Wisconsin have 
 statutes declaring that bills of lad- 
 ing are negotiable. Porter on Bills 
 of Lading, §§ 443-451. There is some 
 judicial opinion contrary to the text 
 See Erb v. Great Western Ry. Co. 
 (1882), 3 Ont App. 456, 459, 46a 483; 
 5 S. C. Can. 193; Gunn v. Bolckow 
 (1875), L. R 10 Ch. 491; 44 L. J. Ch. 
 782. 
 
 » " A bill of lading is a transferable 
 document of title." Per Lord Black- 
 burn in Glynn v. East & West India 
 (18S2), 7 App. Gas. 644; Hatfield v. 
 Phillips (1845), 13 CI. & F. 861; Colo 
 V, North Western (1875), L. R 10 C. 
 
GOODS — DOCUMENTS OF TITLE. 309 
 
 transferror from asserting any interest in the goods as against 
 
 inZT' ""n ''' '"^' ^' ^'^ indorsement have chf^^ed 
 
 tbeir position just as a conveyance of land estops its granfor. 
 
 3. Bock Marrams, etc-The third class of documents fre- 
 
 rZ^ff K^'* ''' "'•'''"''''''' '*°-) "^ sometimes in the form o^f 
 receipts, but sometimes merely as follows: 
 
 Perr^SSo'24SrD°t*'?87l°y^f' I^Portedin the Hartfell. Entered by 
 dorsemVnt ;&reon?^ Deliverable to Petrocochino or assigns by il 
 
 bol';?-t^7e good:- r'°* '^ '^' """'^ <*^"'»«°* *»"ed by us as a legal sym- 
 
 ahhnf ^f "™'"*'' '^'^^ "' sometimes called contracts;' and 
 m th«f r "'' "'"'"-^ °° ^"P^^^^ contractual stipulations 
 m them, such as are to be found in bills of lading, the present 
 writer raises no objection to their being so stvled. But whether 
 
 ttrr ""•: T ^V" ^^^^ °^^^^ ^^^'^^ ^•^-^ documents als" 
 It may be said that they are evidences of title,' and intended to 
 
 be representations of that fact to persons dealing with their 
 
 ^l^ ttTsi? '' ''-'' '' ''-' ^^^^ '''' «^ '^'^^^ -^ - 
 
 4. Shares in Companies.- Certificates and transfers of share, 
 are not usually classed with such documents of title as those of 
 which we have been speaking; but they are for our purpose 
 closely associated with them. Corporations issue certificates 
 of shares in order to enable their shareholders the more easily 
 to deal with their shares. These, too, are not merely receipts or 
 con raots, operative only as between the company and the par- 
 ticular shareholder; but are intended as representations to third 
 persons as to the ownership of the shares.* A company', c.r- 
 tifacates of shares, therefore, are documents of title in the -a ae 
 sense as are bills of lading, dock warrants, etc. ; that is to say 
 they are representations by the signers of them as to the owner- 
 
 P. 863; Merchants' Bank v. Phoenix 
 
 (1877), 5 Ch. D. 216; 45 L. J. Ch. 418; 
 
 Michigan v. Phillips (1871), 60 111. 198. 
 iSetoD V. 7.afone (1887), 18 Q. B. D, 
 
 140; 19 ; • j8; 56 L. J. Q. B. 415. 
 
 See another form in Merchanta'Bank 
 
 V. Phoenix (1877). 5 Ch. D. SOo; 48 L. J. 
 
 Ch. 418. 
 
 _ 1, ._.,, „_,_3 ^™ j,jj_^^ ^^jj^ 
 
 'So ig ago as 1817, Dallas, J., 
 said the' a dock warrant "is the 
 title deed of the property;" and 
 
 Park. J., said: " No man living would 
 have purchased these goods unless 
 the dock warrants had been pro- 
 duced. They were the key to this 
 property." Lucas v.Dorrien,7Taunt. 
 290, 291. In some states warehouse 
 receipts are by statute negotiable. 
 Collins V. Rosenbaura (1897), 43 & W. 
 K. 706. 
 
 *Re Bahia (1868), L. R 3 Q. a 594; 
 87 L. J. Q. B. 181. 
 
310 I 
 
 OSTENSIBLE OWXERflHIP AND AOENOY. 
 
 ship of the prope'-* f. ♦ pf\ to in them. A bill of lading in- 
 dicates that th« goouk >H being carried on behalf of A. B. or 
 order; and a cainpiv.iy's certificate indicates that certain shares 
 are owned! bv A. B. To these extents the documents are rep- 
 resentations as to title. 
 
 That such documents are usually transferred by different 
 methods is not a distinguishing la-'vj:-- ot any importance for 
 our purpose. A bill of lading is transferable by indorsement of 
 signature merely ; and shares by a separate document (although 
 8or.i(;time8 indorsed upon the certificate) which expresses that 
 whio'i an indorsement implies. One form is more compendious 
 than the other, that is all. And the effect (for our purposes) is 
 iduntical. When A. B. indorses over his bill of lading to an- 
 other he enables that person to pose as the owner of the goods, 
 and he ought to be estopped as against any third person who is 
 subsequently misled by such ostensible ownership. And when 
 A. B. executes a transfer of his shares to another, the e^'ect is 
 the same so far as third persons are concerned. 
 
 Resemllances. — Of certificates and transfers of shares, then, 
 we may say as well as of bills of lading, dock warrants, etc., 
 and conveyances of lands and goods: 
 
 1. That they are documents of title. 
 
 2. That they are used 'n tiie ordinary course of business as 
 proof of the ownershi[) of the prt lerty they describe. 
 
 3. And that t v arp ambula ry — thfvt is, intended to be 
 passed on to other persons, and to be acted upon by strangers 
 to them.^ In fact all the documents to which reference has 
 boen made uio titlj papers. Bills ^ lading, dock warrants, etc., 
 and share transfers bear the same relation to good" r.nd sUares. 
 as do title-deeds to real estate, i • ' ch^ lav of estoppel as to 
 all of them ought to be th " 'ame - that is to say, th same 
 principles of estoppel by os isi ownership lould apply 
 equally to all such cases. 
 
 " The ground of these decisions is the same in relation t<- >al and per- 
 sonal estate. It is that the delivery of the thing by the owner to one who 
 
 1 Questions are mooted as to 
 whether shares are, or are not, choses 
 in action: it being suggested that 
 
 426; C6 L. J. Cb. 48; Robinson v. Jen- 
 kins (1890), 84 Q. B. D. 875; 59 L. J. 
 Q. B. 147. With such questions we 
 
 t.hnv aro nhrtaoa nrinr fnrnarint'.ratinn. Vinvo nnt.hincr tn An. 'Wp 
 
 loalinv 
 
 and property ! terwarda Colonial 
 Bank v. Whinney (1886), 80 Ch. D. 
 261; 65 L. J. Cb. 685; ll.App. Caa 
 
 with the title to shares, and for that 
 purpose the inquiry is imumteriaL 
 
GOODS — DOCLMENT8 OF TITLE. 
 
 311 
 
 fcll°cft„'I±"a°rLtTf"^^^^^^^^ '''' °; *^^ P«'»y transferring, 
 
 purchaser underXiX?, n[rXSLtT^/t^lV^,JS^^^ 
 
 <ler8tood relating to real estate and that which obtains witi. 
 re erence to documents of titl. to goods and shares is so great 
 that It would be impossible to combine the former with the 
 latter in one method of treatment. Eeal estate title-deeds have 
 already been dealt with; we shall now as far as possible unite 
 all other documents of title in one chapter, premising merely 
 that even amongst these we must be prepared for annoying 
 <livergencies and depnrtures from common principle. 
 
 The Tkue "View. 
 
 It will be well at the outset to explain more fully the au- 
 thor s view of the principles applicable to the subject^ hand. 
 It has already been said that the maxim nemo dat quod non 
 
 ^cZlZl^&;!:o'l^!gil^ll^\ °"°" °^ ^"^^ ^- '«°* •''--If ^ ac- 
 Now there are two methods of accrediting the title of an- 
 other person: (1) by really, and (2) by ostensiblv. esting it in 
 m For example of the former: I convey cer'tain lanu abso- 
 ■ y to a person, who is to hold it subject to my orders, and 
 the tru. tee uses the deed to accredit his representation of bene- 
 ficial ownership. For example of the second: A mortgagee 
 lends the title-deeds to the mortgagor, who fraudulently pre- 
 sents them to a banker as evidence of unin .Qbcmd title In 
 both oases the result to the third person is the «a^ that is to 
 ■say he is deceived by the appearance of beneficial ownership 
 and for that appearauce the true owner is responsible, and by 
 It ought to be estopped. ' ^ 
 
 There are, of course, many other ways in which the anpear- 
 anoe of ownership may be presented; but for present purposes 
 It 18 not necessary to do more thuu to remind the reader of the 
 next preceding chanter, in which r-ssession, as a prime factor 
 in appearance of o nership, is treated of. 
 
 _iPer Parker, C. J., in Somes v. 
 Eiewei (io2*), 19 mass, sui; and see 24 
 AViUiama v. Given (1849), 6 Gratt. 
 
 <Va.) 37a 
 
 ^Boyson v. Coles (181?^ 8 M. & S. 
 
812 
 
 dpTENSIBLB OWNERSHIP AND AOENOT. 
 
 We have now to apply the general principle above quoted to 
 documents of title to good and shares. 
 
 Purchase of Merchandise from a Merchant— CommenQfi at 
 the beginning. Supnose that a merchant has in his warehouse 
 certain goods belouging to a class in which he usually deals- 
 and suppose that, seeing them there, you purchase them. What 
 18 your position as to title? Apart from considerations of es- 
 toppel one would say that you acquired exactly the same title 
 that the nerchant had - nothing more, for nemo dat quod non. 
 habet. But observe three things: 
 
 (1) Our leading principle that the maxim nema dat quod nor^ 
 habet 
 
 ;c^«dr«irt!.ro\^^^^^^^^ °"°" «' «-^« •^^ '-' "">»eif t. 
 
 (2) Therefore, if the real owner of the goods has permitted 
 the merchant to present the appearance of ownership of them 
 by having them in possession as if for sale, he (the true owner) 
 will be estopped as against innocent purchasers. 
 
 (3) And this will be the case even if the true owner haa 
 been induced by fraud to permit the appearance of ownership.* 
 
 We may say, then, that in the case supposed you will be 
 reasonably sure that your purchase from the merchant will 
 give you a perfect title to the goods. For either (1) the goods 
 really belong to the merchant; or (2) the true owner will prob- 
 ably be estopped from otherwise saying, either because he 
 has voluntarily permitted the appearance of ownership, or 
 (3) because he has been defrauded into permitting such appear- 
 ance. You will run the risk, in some jurisdictions, of the mer- 
 chant having stolen the goods; in others (upon considerations 
 of market overt) you will be safe against even that possibility 
 and there may, in rarest cases, be some extraordinary concate- 
 nation of circumstances that will work your disappointment 
 On the whole, however, it may be said that your title will be 
 unassailable-the case, remember, being that of a merchant 
 having merchandise on hand and ostensibly for sale. 
 
 Vary a little the case just put: Suppose that the goods are 
 not upon the merchant's own premises, but are in a public 
 warehouse and held there for him. The mi hant is now none 
 the less m possession of the goods; they are none the less os- 
 
 ^Ante, ch. VIII. 
 
GOODS — DOCUMENTS OF TITLE. 313 
 
 '2h!'^^,^'V''^''T!^'^'^ Tour 
 
 rights, therefore will be exactly the same as in the former 
 
 case^ Nor, o early, can such result be altered if, instead of X 
 
 goods bemg in a warehouse upon land, they ar; in a different 
 
 structure upon the water, and moving Ihere 
 
 Jecl "wTZf convenience interposes in the cases last sup- 
 posed. When the goods were in the merchant's own custod v 
 you could see them, and be thus readily assured of their exis^ 
 
 to vou r/"r''rr" ^^^ 'PP^'^^^"^^ «^ ^^^^« ^-^^f-^tory 
 to you But when the goods are in other places, and more 
 e pecia ly when at sea, how are you to be assured of the truth 
 .. ';^;\'^'^''^^^^' represents to you as to existence and 
 custody? Observe that it is precisely for the purpose of an 
 swer ng your question that he has provided himself with a bill 
 of admg (lock warrant, etc.; and he presents it to you as an 
 instrument which accredits his representation^ 
 
 Ftrst Conclusion.~U is thus a document which assists the 
 merchant s representation. It was signed by the ship-owner or 
 dock-owner for the very purpose of being used in that way' 
 and the iirst conclusion, therefore, which we arrive at is that 
 he (the ship- or dock-owner) ought to be estopped, as against 
 persons who change their position upon the faith of it, from 
 denying the truthfulness of its contents. For example, i such 
 
 ?...n "T. , "' ''''" ''^"'' '" ^"°'-' ^^ "^^^ b««" obtained by 
 mean of false representations, purchasers from the holder of 
 
 It ought not to be atrected. They relied upon the docum nt 
 What the signer of it relied upon is his own affair 
 
 Second Conclusion.--Rtivm. purchased the goods you take 
 a transfer of the document. Why? Xot because you have 
 
 rJ T""^^"^^^^ *^'9'o^'^ "PO" the representation con- 
 tained m the document, which was that the goods were held on 
 
 1 Tlie Factors Acts, 52 & 53 Vic. 
 (Imp.), ch. 45, § 1 (4); Rev. St. Ont.. 
 ch. 150, § 1, are sufficiently accurate 
 in speaking of such documents as 
 being " used in the ordinary course 
 of business as proof of the posses- 
 
 — vuiiixut VI goods." Tile 
 
 woi i "control," however, is either 
 redundant or meaningless. And the 
 latter part of the same sentence is 
 
 not right. It can haidly be said 
 that such documents are used as 
 "authorizing or purporting to au- 
 thorize, either by indorsement or de- 
 livery, the possessor of the document 
 to< transfer ... the goods." A 
 warehouseman (that is, a bailee) can- 
 not grant to, or withhold from, the 
 owner of goods the power to trans- 
 fer them as he pleases. 
 
3i4 
 
 OSTENSIBLE OWNERSHIP AND AGEKCT. 
 
 behalf of your vendor. And you require a transfer of the 
 document in order to be able to prove to persons dealing with 
 you that the merchandise is now held for you, and also-, if you 
 so desire, to obtain the attornment of the dock-owner. The 
 document is in ambulatory form (redeemable to " order " or 
 "assigns"), and it was thus drawn so that it might answer your 
 purpose by attending any subsequent disposition of the goods. 
 
 It has become now more clearly a document of title. Previ- 
 ously it might be taken to be a sort of certificate of ownership 
 (to the extent of possession at all events, with all that is thereby 
 implied). Now, however, it is being used as a record of an as- 
 signment of the goods. The Indorsement upon the document 
 is not in itself (as we shall shortly see) a transfer of the goods. 
 It is a record merely of that transfer. It is a declaration by 
 the transferror that he has assigned the goods and that he has 
 no claim upon them. Moreover it is a declaration which the 
 transferror intends that other persons shall act upon, and upon 
 the faith of which subsequent purchasers are entitled to rely. 
 And so we arrive at the second conclusion, that as against such 
 subsequent purchasers the transferror ought to be estopped from 
 asserting any right to the goods. 
 
 Remember these two conclusions: 
 
 1. Th ; signer or issuer of a dock warrant, etc., is estopped, as 
 against persons dealing with the goods upon the faith of it, 
 from denying its correctness; and 
 
 2. A transferror of such a document is also estopped as against 
 such persons from asserting any interest in the goods. 
 
 Shares. — The foregoing remarks have had relation to docu- 
 ments of title to goods; but much that has been said may be 
 repeated with reference to documents relating to company's 
 shares. "We do not indeed in this case, as in the other, com- 
 mence with possession by the owner of the thing itself (the 
 goods), for shares are AvhoUy incorporeal and intangible. "We 
 fix attention merely upon the documents — the certificate of 
 shares and the transfer of them. 
 
 Observe that a company issues its certificate not merely nor 
 principally for the satisfaction of the owner of the shares, but 
 as evidence of his ownershiD with the intention that it shall be 
 presented to and acted upon by other people. 
 
 "This power of granting certificates is to give the shareholders the 
 opportunity of more easily dealing with their shares in the market, and to 
 
GOODS — DOCUMENTS OP TITLE. 816 
 
 , L^'rStSS.^ ^'^^ ^' «^">°« ^'^^^ ^e^ bj. at once showing a 
 
 First Concrusion.-~lt is therefore (ia higher degree than a 
 
 no tof "^ " '"' "^"^"^' *°^ ^^ -^^^-'« absoSt ie and 
 
 own XTino'tr^'^r °'*^'^^ "^^^^^^> « certificate of 
 ownership or m other words a representation by the comoanv 
 
 ■th»t It shall b. «> W b" he perwn toU„nf?,°l'™°'' "'"■ 9" ""^-'ion 
 in the sale and transfer of shares.^ *""°' "'"' '"'«'' "Pon 
 
 «f 7!! 'J-fi' "^"'D ""™ *"""■ '''"^' "onolosion that the si.ner 
 of a certificate of ownership is estopped by it as a.rai„st perlon! 
 who have acted upon the faith of it. ° "^ 
 
 &W Cmeluaion.- Alienation of shares, in order to be anite 
 
 complete, ,s freqnently required (by statute charter or bX^ 
 
 o be transacted at the oHice of the company. But, owCto 
 
 ,CST ^ ''"'""^ "''"' °^°°""°S f"-^''" ta which a blink 
 
 with a J "r^ °' "-e assignee, and accompanying them 
 T«th a power of attorney to fill up the blank, and do all Z 
 
 necessary to the completion of the transfers. In such condition 
 
 the papers may pass through many hands before they rS 
 
 some one who desires to have himself registered. And it wm 
 
 a^v brr» oftherl' ''"' l'""' '"^ ""^'"^ ^ -»^"" 
 own name! ' ^"^ ^""' ""^ ^" '"« "'ank with his 
 
 Possession of a certificate of shares, then, accompanied by a 
 blank transfer, places the bearer in a posit on similar to that 
 occupied by the holder of a dock warrant, etc., for they both 
 
 IctTunon h "l* "^"'''■' "' ""' ""<"" >^ i-'^'ded to be 
 acted upon by subsequent purchasers, and is therefore a re^ 
 
 ■^f.S-?''".'".?/.'"KeBahl.. Per B„„„, ^ J., m Ke Ottos, et. 
 
 etc (1868), U R 8Q, a 5H598; 87 L. 
 J. <}. a 181. And see per Lord Hep. 
 "ohell, in Balkls v. Tomklnson (1898) 
 A. Q 403i 08 U J. g. B. 187. "A oc,^ 
 -....^^^ ,- „„. j.„„ _ pjoiiiissory note; 
 U does uot transfer a chose .in ac- 
 tion; it is only a lepresentation," 
 
 (1898). 1 Ch, 628; 63 L. J. Ch. 170. 
 
 2 Because it is a certificate as to 
 perfect title; while the bill of lading 
 IS only as to posse/Mion. frnm rvH-f^H 
 you may draw your own inferencei 
 
 »Per Cockburn, C. J., in Re Bahia, 
 eta (1868), L. R 8 Q. B. 595; 87 L. J 
 Q. a 181. ' ^o. 
 
31(> 
 
 OSTENSIBLE OWNERSHIP AND AGENOT. 
 
 ii ' 
 
 resentation to thorn which will estop the transferror's assertion 
 of any claim which he may have. Such were our conclusions 
 in the case of dock warrants, etc. 
 
 This all seems to be reasonably clear and satisfactory. Let 
 us turn to the law as it is, observing (more particularly as to 
 the second of the results just mentioned) not only the very 
 general absence from the cases of the law of estoppel which 
 should govern them, but the great and fundamental differences 
 between the principles which have been applied to the respective 
 documents. 
 
 Estoppel of the Signer. 
 
 Not much difficulty exists with reference to the position of 
 the signer of a document of title. Upon the whole it is fairly 
 well recognized that he is estopped from denying the truthful- 
 ness of the statements which the document contains.* But 
 there are some points jbhat deserve notice. 
 
 1. What is the effect upon the liability of the signer of a 
 
 document, if the document has been obtained from him by 
 
 fraud and passed on to ignorant purchasers? As to bills of 
 
 lading an English statute provides that they 
 
 " shall be conclusive evidence of such shipment . . . notwithstanding 
 that such goods or some part thereof may not have been so shipped; " 
 
 buteontains a proviso, 
 
 " that the master or other person signing may exonerate himself in respect 
 of such misrepresentation by showing that it was caused without any de- 
 fault on his part, and wholly by the fraud of the shipper, or of the holder, 
 or some person under whom the holder claims." ^ 
 
 Upon the other band, no legislation regulates the decision 
 of similar questions in the cases of dock warrants, etc., and 
 certificates of shares; and the courts have arrived, as to them, 
 at a result quite different from that declared by the statute. 
 The authorities are clear that a company cannot escape from 
 the representation in its certificates upon the ground of pres- 
 ence of fraud and absence of negligence ; * and although neg- 
 
 For example, he may add to the de- 
 scription of the goods such words as 
 "quantity and quality unknown ; " 
 The Proaperino (1873), 29 L. T. 033; 
 The Ida (1875), 38 L, T. 541. 
 2 18 & 19 Vic. (Imp. ),ch. Ill, §8. See 
 
 3 Re Ottos, etc. (1893), 1 Ch. 618; 63 
 \m J. Ch. 170. 
 
 1 Merchants Bank v. Phoenix (1877), 
 5 Ch. D. 205; 46 L. J. Ch, 418; Cov- 
 entry V. Great Eastern (1883), 11 Q. 
 B. D. 776; 52 L. J. Q. b. 694; Helton 
 V. Sanson (J863), 11 U. C. a P. 
 608; McLean v. Buffalo (1865), 23 U, 
 \j. V(% 13. -xiz; ^i :u. .-.rj; (31. i.uui.r; v. 
 
 Larned (1883), 103 III, 293. The ship- 
 per may of course protect himself 
 by the form of the bill of lading. 
 
GOODS — DOCUMENTS OP TITLE. 81T 
 
 ligence is in one instance (a case of a dock warrant • ) treated as 
 
 upon which others are invited to act must take the resZs^bS 
 ity ot Its correctness, and will not be permitted to fu IfiTwith 
 excases his undertaking to deliver goods. Apart tolt^^. 
 
 tween a bilTof^' r"'' '^'^ ^'^'^'^^^ ^^ - distinction - 
 tween a bill of lading and a dock warrant witli reference tr. 
 the estoppel of the signer of them.' reference to 
 
 2. It is a curious instance of the tendency to associate a point 
 whSTt ^f r^^^'^y with that branch of the law or^; in 
 which It has first arisen to find that when a bill of ladin/for 
 goods not actually dipped is signed not by the carrier h'm^setf 
 but by an agent for him, the defense of no authority in heT^elt 
 IS at once raised ; * while similar defenses are never'^hou ' t ot in 
 oases of dock warrants, etc.,» or of certificates of shares «ilued 
 m error. And yet the point is of course of as much importance 
 m these classes of cases as in that. portanco 
 
 3. It might be assumed from Seion v. Lafone ^ that the signer 
 
 1 Seton V. Lafone (1887), 18 Q. R D 
 139; 19 id. 68; 56 L. J. Q. B. 415, 
 
 2See chs. VIII and IX; Wichita 
 V. Atchison (1878), 20 Kan. 519. It 
 should be remembered that none of 
 the documents can in any way estop 
 persons who are not parties to them. 
 They are not evidence of title as 
 against other persons, as, for exam- 
 ple, a bill of lading is not evidence as 
 against persons from whom the con- 
 signer has stolen the goods. Ogle v. 
 Atkinson (1814), 5 Taunt. 759; Fin' 
 *y ^'^i^erpool (1870), 23 L. T. N. S. 
 251. The representations in them 
 moreover are to be taken as of the 
 date of their issue. A company by 
 its share certificate represents that 
 on the day of its date a certain per- 
 son was entitled to certain shares. 
 Whether such person has subse- 
 quently sold them or not is a matter 
 for inquiry by the purchaser. And 
 «ven if the c. tifioate should inti- 
 mate that ho transfer wrsv;!.-' 
 
 ■pei 
 
 mitted without surrender of the 
 certifloate, the purchaser may n-^t, 
 assume that the oomi;any has not 
 
 waived that formality and permitted 
 a transfer to be made. Smith v 
 Walkerville (1898), 28 Ont. App 102.' 
 3 Dean v. Driggs (1893), 137 N. Y. 
 288. 
 
 *Seepo«<, ch. XXVI, citing Grant 
 V. Norway (1851), 10 C. B. 688; 20 L. J 
 C. P. 98: etc. 
 
 »aee Merchants' Bunk v. Phoenix 
 (1877). 5 Ch. D. 205; 46 L. J. Ch. 418; 
 Coventry v. Great Eastern (1883), 11 
 Q. R D. 776; 62 L. J. Q. B. 694; Mc- 
 Lean v. Buffalo (1865), 23 U. C. O B 
 448; 24 id. 270. ' 
 
 6 Be Bahia, etc. (1868), L. R. 8 Q. B 
 684; 37 L. J. Q. B. 176; Hart v. Fron- 
 tino (1870), L. R 5 Ex. ill; 39 L. J. 
 Ex. 93; Simra v. Anglo-American 
 (1880), 5 Q. a D. 188; 49 L. J. Q. R 
 393; Re Ottos, eta (1893), 1 Ch. 018- 
 62 L. J.Ch. 166; Tomkinson v. Balkis 
 (1891), 3 Q. B. 614; (1893) A. C. 396- 
 «3 L. J. Q. a 134: Re Coucessions 
 Trust (1890), 3 Ch. 757; 65 L. J, Ch. 
 
 '^(1887)18Q. B.D.189;19id.88;56 
 I* J. Q. B. 415. 
 
318 
 
 OSTENSIBLE OWNEESHIP AND AGENCJV. 
 
 of dock warrants, etc., would not be estopped by them. It> 
 that case a warehouseman, believing that a certain broker held 
 the warrants for certain goods, wrote to him forrenl; the 
 broker had not the warrants, but after receiving the letter he- 
 purchased the goods from the holder of the warrants ; afterward* 
 he demanded the goods from the warehouseman and was told 
 that the letter had been written by mistake, that there wero- 
 no such goods. The question debated was, Whether the ware- 
 houseman was estopped by his letter — was this letter the prox- 
 imate cause of the purchase of the goods? It was held that it. 
 was; although in another case a railway company having sent 
 to a consignee of goods an advice note of their arrival, in con- 
 sequence of which the consignee sold them, it was held that 
 the reasonable consequence of such a note was not that the con- 
 signee should sell the goods, but that he should send for them.* 
 In the same way it might well have been said (with reference- 
 to the letter to the broker asking for rent) that the reasonable 
 consequence was that he should pay the rent, not that he should 
 buy the goods. 
 
 But the true point of the case was overlooked. The ware- 
 houseman could not be estopped by his letter, for the reason 
 just given — because purchase of the goods was not the reason- 
 able consequence of a demand for rent. But he was estopped 
 by his outstanding warrants upon which, as well as upon the 
 letter, the broker relied. Had the Ijroker received no letter at 
 all, but bought the goods upon the faith of the warrants alone,, 
 the warehouseman would have been estopped. The letter upon 
 which the case turned was an immaterial factor. The war- 
 rant was all-important, for as was said in another case ; 
 
 "If he chooses to issue it in this shape, he tells all the trade that they 
 may safely deal on the faith of that warrant; and whether or not it be- 
 comes a negotiable instrument at common law as distinct from equity is- 
 to my mind utterly immaterial," 2 
 
 4. It should be observed that the statement that the signers 
 
 of the documents under discussion are estopped to deny their 
 
 truthfulness applies only to those matters of which it might. 
 
 be supposed that they had cognizance. No one imagines, for- 
 
 example, that the master of a vessel opens all the packages. 
 
 1 Garr v. London (1875)-. Lb R 10 C- 
 P. a07; 44L. J. C. P. 109. 
 2 Per Jessel, M. R, in Meiohants' 
 
 Bank v. Phoenix (1877), 5 Ch. Div.. 
 205; 46 L. J. Ch. 4ia 
 
GOODS — D00DMENT8 OF TITIB. 
 
 31» 
 
 Shipped or that he has any special information as to their con- 
 ten s If, therefore, he should issue a bill of lading for barrels 
 of Portland cement," and if the barrels (although so labeled) 
 contained something else, the ship-owner would not be liable ^ 
 It, however, a dock warrant indicated that the goods were 
 in free warehouses," meaning thereby that they were not sub. 
 ject to duty, the dock-owner would be estopped by the asser^ 
 
 Estoppel of the Transferror — Bills of Lamto. 
 
 In LicUarrow v. Maaon,^ an early and most important case 
 this question arose: A vendor of goods sent to the purchased 
 a bill of lading to the latter's own order; the purchaser sold 
 the goods and transferred the bill; and afterwards the first 
 vendor claimed a right to stop in transitu for non-payment of 
 his purchase-money. Frpm the point of view of estoppel this 
 IS a clear case -the second vendor's representation of unin- 
 cumbered ownership had been assisted by the transfer to him 
 of the bill of lading, and the first vendor ought to be estopped 
 because of the assistance. And it was so held; for, although 
 the word " estoppel " is not used, the judgment of Ashhurst, J 
 contained that memorable sentence which was in reality the 
 earliest formulation of the principle which in the present work 
 is referred to as "estoppel by assisted misrepresentation- "« 
 
 such third r,erson^o occaTou'hf fossCsrsSSafn'it "^^^^^ '' "^" '''^''''^ 
 Observe that this is a principle which will apply not merely 
 to the case of a consignor depriving himself of a right to stop 
 ^ntran8^t^c but that it is equally applicable to ail cases in 
 which the holder of a bill enables a third person, by transfer- 
 ring it to hivs, to pose as owner of the goods. It is noteworthy 
 however, t .at .ki ough the wide generality of the rule has 
 been coser.od ar^d made mrch use of in almost every other 
 branch of u^, ]zw, it has been very largely limited, in the de- 
 
 »Dear. /. Driggs (1893), 137 N. Y. 
 74. Sec also Warden v. ( 
 6 Watts (Pa.), 424; Hale 
 
 !ltv ^.'^^ *i®^ Warden v. Greei ( 1 837), East, 21. 
 
 '(1787) 3 T.R.63; 1 H, BL 367; & 
 
 Milwau- < Seech. IV. 
 
 3 First Nat. Bank \. Dean (1803). XIV. 
 187N. Y. 110, 
 
320 
 
 OSTENSIBLE OWNERSHIP AND AGENCY. 
 
 partraent in which it originated, to the particular case then in 
 hand, namely, to the preclusion of the consignor's right to stop 
 in transitu; other rights of the consignor are not supposed to 
 be affected. The principal reason for this no doubt is that one 
 ground assigned for the cessation of the right to stop m trans- 
 itu was that bills of lading were negotiable, and that the tmns- 
 feree of it therefore might take a greater right than that of 
 his transferror (the consignee). When, however, attempts were 
 made to affect other rights of the consignor, it was said (in op- 
 posite sense) that a bill of lading was merely a pymbol of the 
 goods, and that a person in possession of goods could give no 
 better title than that which he himself had. Underlying both 
 of these opposing views was the idea 'itill very prevalenl) that 
 the indorsement of a bill of lading passes title to the goods. 
 "We must come to some very clear understanding upon these 
 three points. 
 
 Passing ths Property. — In the leading case of LicTcbarrow v. 
 Mason it was said that " the delivery of a bill of lading is a 
 delivery of the goods themselves." ' In 1823 it was confidently 
 stated that 
 
 "a bill of lading is exactly like a bill of exchange, and the property it 
 refers to passes by indorsement of it, but not by delivery without indorse- 
 ment." 2 
 
 In a later case Alderson, B., declared that the " negotiability " 
 of a bill of lading was something different from the " negotia- 
 bility " of a bill of exchange, and affirmed that it meant merely 
 the " passing property in the goods : " 
 
 "Because in Lickbarrow v. Mason a bill of litding was held to be nego- 
 tiable, it has been contended that that instrument possesses all the prop- 
 erties of a bill of exchange; but it would lead to absurdity to carry the 
 doctrine to that length. The word negotiable was not used in the same 
 sense in which it is used as applicable to a bill of exchange, but as passing 
 im property in the goods only. 3 
 
 This language passed into many of the cases and much of 
 
 the literature. For example it was (1886) said in the Privy 
 
 Council : ' 
 
 "A bill of lading for the delivery of goods to order and assigns is a ne- 
 rotiable instrur.ient, which by indorsement and delivery passes the prop- 
 erty in the goods to the indorsee, subject only to the right of an unpaid 
 vendor to stop them in tranaitiu" 
 
 ^ApPB. J 'Thompson v. Dominy (1845), 14 
 
 SA<dterman v. Humphery (1823), M. & v. 408; 14 L. J. Ex. 320, 
 
 1 C A P. 53. And see .Jenkyns v, i Peace v= Gloabec {186<3). Lu R 1 
 
 Xfttame U8M). 8 Sc. N. S. 524; 18 L, P. C, 287; 35 L. J. P. C. 66. See also 
 
 J. C P. 186; Blake v. Belfast (1880), Bank v. Henderson (1874), L. R. 5 P. 
 
 6 L 1. It. 4m C. 512. 
 
 
 1 
 s 
 
 |! 
 1 
 
 V 
 
 c 
 
GOODS — DOCUMENTS OF TITLE. 331 
 
 -t^ in goods ma/u^Xpa^'t! tSffij^^^i^ indorsement, the prop. 
 
 «S!itf LT"*^' " ""'''"^ '"^ ^^' United States: 
 promiy n^S^ary^ef tLTarf ^^'^ instruments in the full sense that 
 reasons for this areThaUhey are wJS^ '*^'"^ negotiable AmoSK the 
 that where indorsed inSk7hey!arZ?3?J^^^ instrumlnf^ 
 
 to hand and that the communut^e^vP?rriil*''^ ™1^® '^^"^e'-y from hS 
 on the face of them," a """"""y gives credit in reliance on what appeare 
 
 the property does not pass by tKTn rfn^oJ^l^'u^^V^'^^ the truth is tha^ 
 nrnn°'. °^ ^'V?'» "'« ffir8TmenV"«'^radT"lf ^."^ ^^ the contract in pm' 
 KSI'T"'^ P*- *o *»>« -ndeVlvTn1^ou'/h^hTKa of iTiiiV^'a'' J^^ 
 
 - biu'ld" i^S^i'^^^^^^^^ Ellenborough held that 
 
 ment and deliviySrf^S'SnSldr^^^ "?°». * ^'^Me indorse- 
 as a direct delivery of the goods thpmltLf ^'^'^^'l' 'P ^he same manner 
 «anno< operate further." ^ ^ theraselvea would do if so intended, 6m?/? 
 
 For it is clearriUhat,7«K?ii K ? assertion is correct. 
 .oao^a an. ,e. .he pa„.s inte^'a r ;?^;lt r;;;;' 
 
 the property i„ g«J, Zr St ?1, M T'. ^"""S*". " Ohio & C. 
 I... ,11 ...1... ._ "eveniie- ill. 1J9; American v. Benderson 
 
 less all rights in respect to the con- 
 tract contained in the bill of lading 
 continue in the original shipper or 
 owner: "and enacts that "1. Every 
 consignee of goods named in a bill 
 
 of ln.HinaF anA . 1 
 
 o' lading, and every indT™. J P" Lord Ellenborough in Ne». 
 
 blU o< lading .„ .bl' r^: °L* Z L ITl"-/ !^"' ": ^^^ - 
 
 bill of lading to whom the property 
 m the goods therein mentioned shall 
 pass upon or by reason of auch con. 
 -ngnment or indorsement, shall have 
 transferred to and vested in him all 
 rights of suit, and be subject to the 
 same liabilities in respect of such 
 goods, as if the contract co.v.t^ir-.^^ 
 IntJiebill of lading had been made 
 with himself." And see 53 Via (Caa). 
 
 oh. 8a -^ 
 
 SI 
 
 (1890). 26 S. R (Ala.) 498. 
 *The statute above referred ta 
 ^Sew-ell V. Burdick (im), 10 App. 
 
 Cas. 105; 54 L. J. Q. B. 156. 
 »Per Lord Ellenborough in New- 
 
 per Lawrence. J., id. p. 43. See to 
 the same effect, Jenkyns v. Usborne 
 1844), 8 S^. N. S. 505; 13 I. J. u. P. 
 196; Sanders v. McLean (1883), 11 Q 
 
 B..D.837;53L.J.Q.,B.481;Sewellv. 
 Burdiok (1884). 10 App. Cas. 74; 53 L. 
 
 . ^'?'.??^'„^°*'^^^ on Bills of Lad- 
 •"». « 4yS ii. .Lord Hatlierly's dic- 
 tum in Barber v. Meyerstein (1870) 
 
 L.R4H.L.825;89L.J.C.P.l87.Js 
 too broadly stated. 
 
323 
 
 OSTENSIBLE OWNERSHIP AND AGENCY. 
 
 will pass.^ And the correct view of the effect of an indorse- 
 roent of a bill of lading is no doubt that » . . . .u 
 
 of the bill acquires no interest in the gooda 
 
 We may say then that the indorsement of a bill of ladmg^ 
 has no effect whatever upon the passing of the property m the 
 goods If the intention was that the title should pass, it ha* 
 alreadv gone by the contract; and if it was not so intended, 
 the title remains unchanged, even if the bill be indorsed In 
 other words, goods afloat or ashore, covered or uncoverod by 
 bills of ladin<r, are transferred in the same way ; that is, by agree- 
 ment to tha^ effect. The most that can be said is that an la- 
 dorsement of a bill of lading midencea a transfer of the goods: 
 
 tiSn of the pSs that tie title and possession should pass to Gibson. 
 
 JSregotiaUlity.-The jury in the leading case of LiokharrovT 
 V. Mason is to some extent responsible for the idea that bills of 
 ladintr are " negotiable," for they found that 
 "bythe custom of merchants, bills of lading , : '.f^ °'^" °' ""^^ 
 £-- -^ ^<;rsU,g sStf S^iSSr '^^^«Sk deliv^i,St 
 transmitting the same so indorsed. 
 
 Ashhurst, J., in the same case said that 
 « the instrument is in its nature transferable ; in this respect, therefore. th.» 
 is similar to the case of a bill of exchange. » . ^ *u- . „ 
 
 As we have already seen, Alderson, B., corrected this, say- 
 ing that although 
 "iJuokbarrow V.Mason a bill of lading was held to be neflfoitadte . . ► 
 
 1 For example, an indorsement to 
 the agent of the consignor for some 
 particular purpose will not pass the 
 property. Coxe v. Harden (1803), 4 
 East, 211; Brandt v. Bowlby (1831). 3 
 B & Ad. 933: Moakes v. Nicholson 
 (1865), 34 L. J. C. P. 27a "Delivery 
 of a bill of ladinR with intent to pass 
 the title has that effect although 
 the bill is drawn to order and is not 
 indorsed." See City Bank v. Rome 
 '■•2?fi\ iS fi. Y. 1S6. And see Bank 
 of Green May v. Dearborn (1874), 115 
 Slass. 219; Holmes v. German (1878), 
 
 87 Pa. St 595; Porter on Bills of 
 Lading, § 496 fit. 
 
 « Blackburn on Sales (8d ed.), 391. 
 
 3 The words "and possession" 
 should be omitted. The indorsement 
 does not "go very far to show" a 
 right to take possession, for it is it- 
 self "an authority to receive th& 
 goods" — that is, to take possession. 
 It goes far to show " a right of prop- 
 erty." 
 
 ♦ Gibson v. Stevens (1850), 8 How. 
 
 (U. S.) 400. 
 »(1787)2T. R., p.63. 
 
 «Id., p.71. , 
 

 GOODS — DOCUMENTS OF TITLE. 823 
 
 ••b,S'„? ? " """ '"'' '" "•« U°"»'' states that "^^ 
 
 In these and many other cases the ,vord was bein^ os«i t„ 
 ^mo //a^ ^wofi? non hahet, yet that where there was a hill ^f 
 hlrffi^^ --;-- *« ^e othe^:is7 ?he be 
 
 ind^em'e^tTrLX" VrL^ undoubtedly by 
 
 with the general principte!^law\h^^^ m.^'T^'fi'?^^ '' '« °« mrinnce 
 fer to another a right which h« Mn,c i^if" ^'*°"''* ^ allowed to trans- 
 founded on the nature o^thlinff^^^l^''*'' °°*5 ^ut the exception is 
 bill of exchan.e"a «So4w« TnTuZTt forr«''°"' '"'j'^'^ beinTiike a 
 commerce hasWn allowed to hrvearpff;^?^ J ® '?®""** convenience of 
 prtnctples of law. But this opVratiL of f hifl nf ^^•""''e ^''» ''^^ ordmary 
 Its negotiable quality. appeStr^to b^ Ponfi^tn'I'^V^'''^'^^'^^^^ from 
 person who transfers the right is h^splftnT^'^ *° the case where the 
 
 Jh.s .dea was reprodueed in the Privy Couneil. whem it was 
 
 'little consideratinn h/M..^,.». ™:ii _._..... 
 
 ceptioo ia 
 
 Very httle consideration, however, will make it clear that 
 this notion of the negotiability of a bill of lading is der„dent 
 
 the title to the goods and must fall with it. The last ono^ 
 tion, for example, speaks of the holder of a bill of ladtnl ta„T 
 'erring a greater right than he himself has, becau e of tbt 
 negotiable quality of the document. Observe thrtth'reattr 
 right that IS transferred is not to the bill but to the go is and 
 that this passes because of some quality of the b«l R,,?^ 
 
 goods the effect is clearly attributed to the wrong cause. More! 
 
 1 A..^- «-» 
 
 ^ Ante, p. 820. 
 
 2 Ante, p. 321. 
 
 'The words "the actual owner" 
 do not mean the owner of the goods, 
 tor lUo there would no point in ;,he 
 i-ie.cacs to - variance with the gei; 
 eral principles of the law." 
 
 *As to negotiability and its "va- 
 
 riance with the general principles of 
 the law." see ch. XXIV. 
 
 8 Jenkins v. Usborne (1844), 8 Sc 
 (N. S.) 533; 7 M. & G. 878; 18 L J C 
 P. 196. ^ ". v.. 
 
 « Rodger V. The romptoir (1869), L. 
 3. 3 P. C. 405; 88 L. J. P. C. 80; ap- 
 proved in Bank v. Henderson (1874) 
 L. R 5 P. C. 518. /' 
 
821 
 
 OSTENSIBLE OWNKE8HIP AND AGENCY. 
 
 orer to speak of negotiability as a reason is mereiy to raise 
 the questionbj "What is negotiability?" and "How can it pro- 
 duce such an effect?" In another chapter' will be found suf- 
 ficient ground for suspecting that the word " neg liability " 
 merely masks that which is misunderstood, and that by itself 
 it explains nothing. 
 
 Symholism.— There remsiins the other view of bills of Inding. 
 It is said that they are symbols merely of goods, and must bo 
 governed by the law of that which they symbolize; and inas- 
 much as an unauthorized disposition of goods intrusted to an- 
 other person will not affect the titlo of the true owner, so 
 neither can a wrongful disposition of the symbol. Lord Camp- 
 bell upheld this view in a passage often referred to: 
 
 "It is not enough that they had become bona fide holders of the bill of 
 lading for valuable consideration. A bill of lading is not. like a bill of ex- 
 change or promissory note, a negotiable instrument which passes by mere 
 delivery to a bona fide transferee for valuable consideration without re- 
 gard to the title of the t parties who made the transfer. Although the 
 shipper may ha- . Indorsed in blank a bill oflading deliverable to his as- 
 signs his right h j r»». affected by an appropriation of it without his author- 
 ity. If it be ot.>i*; 4 horn him or transferred without hia authority, a s ib- 
 seauent bona ■' i'' transferee for value cannot make title under it as against 
 the shipper - !,* - dj. The bill of lading only represents the goods; and m 
 this instance ihr^ Iransfer of the symbol does not operate more than a trans- 
 fer of what is reirriented.' * 
 
 It will readily be seen how far we are now from negotiabil- 
 ity. We are in fact at the other extreme — title to goods can 
 be acquired in certain ways only ; a bill of lading " only repre- 
 sents the goods;" and "the transfer of the symbol does not 
 operate more than a transfer of what is represented." Bills 
 of lading in this view are no more negotiable than are the 
 goods themselves. 
 
 But this theory leaves completely unexplained and inexpli- 
 cable the undoubted and seemingly peculiar effect which the 
 existence and transfer of a bill of lading has upon rights of 
 parties to goods; for, as we have just seen, 
 
 "an actual owner of an indorsed bill of lading may undoubtedly, by in- 
 dorsement, transfer a greater title than he himself has," which is "at vari- 
 ance with the general principles of the law." 
 
 To meet this ax.ficulty, Mr. Porter, in a very good book upon 
 Bills of Lading, endeavors to establish a via media between 
 
 (2d ed.), 398. And see Burton v. Cur- 
 
 /■<oaa\ Al\ Til tton. 'WoBfarn v^ 
 
 iCh.XXIV. 
 
 sGui'uey V. Behrend (iS54), 3E. 5; , 
 B. 638; 23 L. J. Q. B. 265. See to Wagner (1873), 65 III 197. 
 same effect, Blackburn on Sales 
 
GOOI.^ — DOCLMENTS OF TTfLK. ggS 
 
 nieasureai by a monetary standard »i'°'*'"'"*'°^» representing pure vK 
 
 NEooniBiLirr, Symbolisk, and Estoppel. 
 count for Th L l^t Z'fi"'' .*' "^^ "" '""'""^ '" "^ 
 the transit, .ese.ls the ,J. andt tef ov^t'S 'ojff 
 be observed is tba? ^honTb . :h ~.o„M ^I ""t •"""' '" 
 
 ' Porter on Bills of Ladine iS 417 Tf «.„= » . 
 
 See also Am. & Eng. Ency (3d ed I' tl!« *' ''^'°""' ^° transferring 
 IV. 546; Barnard v CamX 1 (1874 ' ^ttrr""'"" "' '^' ^'^^'''y °' thf 
 
 55 N. Y. 462; Shaw v. Soad Co S °' "i ^"^^ouse is of the goods 
 
 (1879), 101 U. S. 564; FiSlnder v T" "'^ "> **' °'' «' the store keep- 
 
 Texas Ry. (1888). 130 U S 423; pji f" 'S °' n"' 'V'' ''^'"'-^ '» 
 
 lard V. Reardon (1895), 13 C C Ana wh»„ T''I '■''***''^ ^'^ «««" "^at 
 
 171; 65 Fed. R. 848; Raleigh vLmv« ^'"'r «** ^^^ *he word affords no as. 
 
 (If 7), 101 Ga. 320; 28 a KR 867!" vT^TuZ ^ P-^Iern which Mr. 
 
 (Ib97), 101 Ga. 320; 28 a E. R 867. 
 
 'There can be no objection to the 
 use made of the word in Michigan v. 
 
 Phlllina /IB'Tlt oath .^^ . * ' 
 
 - — ^'•»u.<riii wnicn air. 
 Porter had in hand; for when we 
 have said that symbolical delivery 
 has the same eflFect as actual deliv- 
 
 
 Phillips (1871). lo iFl .Thei it [s erv w;."'"^^'^^''* '^^ «^*-' <'*'»^- 
 
 said that "the deliver. .VTufun." ^7.""^ have deprived the word of 
 
 lading to the bank was"a gZi^^. "i 'n7s7T'7'r. «» 
 
 bohcal delivery of the higfwineT^o Eas^ll ' ^^ ^ ««' ^ ^ ^^' 857; 6 
 as to vest the property in the ba^k. 
 
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 /^PPLIED^ IIVMGE . Inc 
 
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 e 1993, Appliad Image, Inc., All Rights RsMrvad 
 
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 ^2^' 
 
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826 
 
 OSTENSIBLE OWNERSHIP AND AOENOT. 
 
 tliat bo has sold the goods and has no further interest in them. 
 Ho is estopped by the ostensible ownership of his purchaser. . 
 For lack of such elucidation the idea of the "negotiability" of 
 the bill was seized upon. The word had seemed in some way 
 to explain why it was that a transferee might acquire a better 
 title to bills of exchange than his transferror had. Why might 
 it not be as effective and comforting in the case of bills of lad- 
 ing? , 
 
 Unfortunately for such a doctrine it involved conclusions that 
 the courts declined to admit. For example, if a bill of exchange 
 were fraudulently transferred by its custodian to an innocent 
 purchaser its " negotiability » provided the transferee with a 
 good title. The courts, however, refused the same result in the 
 case of a bill of lading; and for such cases it was said that a 
 bill of lading was a symbol of goods, and that a "transfer of 
 the symbol does not operate more than a transfer of what is 
 
 represented." * 
 
 But, in its turn, this doctrine will not suit the other case; for 
 in it the transfer of the bill of lading does " operate more than 
 a transfer of what is represented." The two views are thus 
 seen to be quite antagonistic; and neither of them will explain 
 the phenomenon to which the other of them alone can be ap- 
 plied. They are both therefore incorrect. 
 
 Observe finally that the symbolic view rests upon two ideas: 
 (1) The notion that the indorsement of a bill of lading has 
 some eifect upon the property in the goods — "a transfer of 
 the symbol does not operate more than a transfer of what is 
 represented"— (which, as we have already seen, is a mistake); 
 and (2) the notion that inasmuch as a good title to chattels can- 
 not be given when " transferred without his (the true owner's) 
 authority," it cannot be transferred either where the goods are 
 represented by some symbol. 
 
 But the assumption that title to goods themselves cannot be 
 80 passed is erroneous. It is a matter of most frequent occur- 
 rence (as we have abundantly seen') that ostensible owners 
 and ostensible agents confer perfectly good titles to property 
 which they neither own nor have any authority to deal with. 
 
 ! flea Psaas r= Qloftheo (1866), L. R and also The Argentina (1867), I* R. 
 1 P. C. 219; 85 L. J. P. C 86, in which 1 A. «, K aTO; 5U L. J. P. G 17. 
 the dictum i» practically reversed; 'Ch. XXL 
 
GOODS — DOCL-MENTfl OF TITLE. 307 
 
 «f goods at a warehZ,! ^ ^/ "/{ "™"' ™^«' An owner 
 in fhe hooksot^TlZLT"" ''^'™""^ to transfer them 
 dlep. It was held thlfh "^''°' '° "" "'"»« »' 'he swin- 
 
 «nd the sTvTnS Hand haUhrr T"^' ''■""■«^" '"« «'"Pe 
 W not passed, b" n the, ^tbat th'eT"'^ *" '"' ^^'^ 
 from so sayine (bv r>n<inn „fT """P* ™' estopped 
 
 -inaier) afagU'ft ;;:Zc: n'tXrhtr'' Zr''" "' ''"' 
 
 been supplied^^K^l'':, ''."! *«» «<""^ited as the owner- 
 ship oredibfe Id th. , """^^ ''^ »«"'"™ »' <>« owner- 
 
 boll: .rx^rr.n'ttr •"".r'''''''''-'" "■»» »- -^y- 
 
 2 the title J^ «^:reXitvi:d^rrd '"^"'^- 
 
 a.' The blil taT"; """""^ ™" "»" ""' the bill of lading 
 
 *. And an indorsement of it will p»tnn ti,. * 
 asserting any claim as «™i„.f • ^ * '""^ """^ 'fom 
 
 of the doctrine of™ toDoTh" '"^T' ''"■^'"''»" ""y '^"»'' 
 second conclnsion ■^"""'^ *™'"«<' '»«"P«sentation - the 
 
 viettmr;Jbi^twl7™r'''"r8 "■""■» -"•-e-ial 
 
 that a most e.eellent star7 rJl"The rilh. h ''"'«'°'»"'<' 
 «arlyas 17S7 Ashhi.r.. T • **' road was made as 
 
 peamnoe of owttl o J^^; ^fl'"*^ ""'' "'"">"•'' '" the ap- 
 
 Q. aaoa 
 
 'Lickbarrow v. Maaon 
 
 T. Rea 
 
 (1787X « 
 
823 
 
 0STKN8IBLB OWMEBSHIV AMU ▲OBMOY. 
 
 Consider this oase {LicJcharrovo v. JUagm), for it is the leading 
 one with reference to indorsed bills of lading, although its chief 
 principle has been widely departed from. The case was prior 
 to the modern formulation of the doctrine of estoppel, but ob- 
 serve how closely in the quotption just given it follows lines 
 now familiar; and although it introduces the idea of negotia- 
 bility, and the passing of property by the indorsement of the 
 bill, yet the law merchant is repudiated, and the rationale is 
 " because it would be enabling either of the original parties ta 
 assist in a f iraud." Ashhurst, J., said : ^ 
 
 "As between the vendor and third persons the delivery of s bill of lad- 
 Ine is a delivpry of the goods themselves; if not, it would enable the oon- 
 siirnee to make the bill of lading an instrument of fraud. Theconnqne« 
 of a bill of lading trusts to the indorsetnent; the instrument is in its nature 
 transferable in this respect, therefore this is similar to the case of a bill of 
 exchange. If the consignor had intended to restrain the negotinbility of 
 it, he should have confined the delivery of the goods to the vendor only, 
 but he has made it an indorsable instrument So it is like a bill of ex- 
 change, as in which case between the drawer and the payee the consider- 
 ation may be gone into, yet it canriot between the drawer and an indorser; 
 and the reason is because it would be enabling either of tlie origtntUpartiea 
 to assist in a fraud. Tlie rule iiJound£d purely onprtncipUs of law and 
 not on the custom of merchants. Tlie custom of merchants only establi&aea 
 that such an instrument may be indorsed; but the eflEeot of that indorse- 
 ment is a question of law. which is that as between the original parties the 
 consideration may be inquired into, though when third parties are con- 
 cerned it cannot This is also the case with respect of a bill of lading. 
 
 And Grose, J., more pertinently said : ' 
 
 " A bill of lading carries credit with it; the consignor by his indorsement 
 gives credit to the bill of lading, and on the faith of that money t« advanced. 
 
 Unfortunately the " broad general principle" of estoppel scv 
 admirably embodied in the«ie quotations was not appreciate-', 
 by succeeding judges. To them " negotiability " and antago- 
 nism to the general If w was all that could be said in explana- 
 tion of the fact that an owner might lose his title by the 
 ostensible ownership of another. 
 
 American Law.— In the United States, although there are 
 many cases in which the judgments proceed upon considera- 
 tions of " negotiability," there are others which seek to combine 
 « negotiability " with estoppel; and there are a few which may 
 
 i2T. R71. 
 
 >a T. R. 7a BuUer, J., in one par- 
 agraph takes lower ground and bases 
 the right to stop in transitu upon 
 the fact that the indorsee ha the 
 legal property ID the goods, whereas eb. 71, § ^"f' 
 the vendor-shipper has an equitable 
 
 right only. 8 East, 80 (n.), 86 (n.V 
 This is not elsewhere put forward* 
 and is inconsistent with Kemp v.. 
 Falk (1881), 7 App. Cas. 677; and th© 
 Sale of Goods Act, 06 & 57 Vic. (Imp.)* 
 
GOODS — DOCUMENTS OF TITLE. 
 
 829 
 
 b« cited in support of the present writer's vie^. Tlie follow- 
 ing is an example of the combination referred to: 
 
 not*Sth«'«ml"*JlI ^^^ "'"*' ''J""™ ^^^g a negotiable inBtrument, ahhongh 
 not m the name sense as promissory notes or bills of exohanjre one u-fio 
 
 Ini^H y 5"^ *' °"' !" *"«^'«'' »° claim the goods asiiS oil l±o 
 innocently advances v»iue on it, if one of the two must suffer."" 
 
 Mr. Colebrook, with an uncommonly clear view of the appli- 
 cation of the principles of estoppel (but still holding on to 
 "^t/aw-negotiabiiity"), thus summarizes some of the cases and 
 says: 
 
 .,J'^* *"" become a very common transaction in the commercial world t** 
 use documents and indicia of title. gwaaj-neKotiable under blank TnTmLu? 
 ment. as certificaU-s of stock, bills of lad"nTwareLu5e and cotton ,?r^ 
 
 payment of loans, and diccounts of commercial Daoera. »aoh LnJtnLi 
 wcurit iesare reaJily converted Into fund^and thWue thereof lleisiry 
 determined by tlie quotations of the great exchangea Thenilel o/ eS 
 i^linJl/T" "I *q"*t«ble estoppel are invoked foF the protSn of t"?^ 
 pledgee for value without notice of such gKan-negotiable collateral wcurU 
 
 ?idonJ™f„rK*"l**'°?',S'?"'*'"*^ "' «"°h dScuments of t^?^e^Sder 
 indoreement in blank and delivery are regarded as of vial weiirht a. rnn. 
 resentations contained in commercial pa^r. and the mnsfeTtfereS ^?: 
 'IZ^tT of t»'« privileges enjoyed by the indorsee for vaCof negotiable 
 dLZd n\l.^t innocent pledgee for value of certificates of s*t»ck C ii! 
 
 IXfn unimirhif^ M^**^K"^P°^"°'*"o''•«y *» transfer is vested 
 hJ Vl ^ "T**'^*''*®.Vi'® *o *••« ■*"»«*« o' stock. The presumption arises 
 by the poswssion of oertificatesof st ck indorsed in blan^c that theTlSeur 
 is the owner, although the certificate and indorsement are in the name f 
 ^^I'nr^'^f- Penledgee's title is protected a" against the ownTr "n 
 ^„ in'5!{'*„*"*\.'"T?P'"°Pr**o" '^^^'^ »"ch owner through his m£ 
 nro^ri^ jSh*"''^-^''*" l^^'^^^^^ ^o a third person documents of indicia ot 
 property indorsed in blank, so that ;;e has the legal title and ammrent 
 ownernhtp, andU thus enabled to deceive an innocent pledaee a "vaSfCl, 
 monev „pon the faith thereof. The rules of equitibrcSpS are^also 
 applied m favor of the bonaflde pledgee for value of Mils Sfftnaware^ 
 SSStiS"'^'*' «°^»«°-P"« '•o^'^ «°d other a«««.neiotUble SateS 
 
 To this may be added a paragraph from a recent American 
 decision. It quotes from Lora Hersohell » as follows : 
 
 «r/'JS-t*V*''*li'""'®,°' *'*® '*'^> *hat where a person has obtained the 
 property of another from one who is dealing withlt without the authori y 
 
 ?.!ilvnfn"^hf '*■"*'■' "° V'l« '« acquired as against that owner. eveutSH 
 [iolah^ Hn/tr" t"** *''* P'^P^r^y ^ ?''«" *" 'he b^ief that an unS 
 -i«^«^i /ll'*.*''*""*'° '» ^>nK obtained: unless the person taking if can 
 ^owthat the true owner has so acted as to mislead him into tlXliS that 
 the person dealing tvith the property hail authority to do sa ffthUtVnbe 
 shoum,agood tttle is acquired by personal estoppet against the tmeoZer!^' 
 And then proceeds: 
 
 ^al^u Pt"""*"" 'ofm and phraseology of ordinary bills of lading, and the 
 SfS '^ •'"'**" ':^"'*"^* ?'*««/* "PO" *hem. and credit given theS in com* 
 mercial commuuities, render the principles of these expressions SpecJalTy 
 
 * *Si"*/**J* ^*''<'o'» (»805X 18C.C. See the cases there cited; and see 
 
 A. 171: 65 Fed. R. AM. ^ unn ' ^* 
 
 »0a Collateral Securitie^ p. 84. » Simmons v. London (1898), A. a 
 
 815; 61 L. J. Ch. 73a 
 
880 
 
 OSTENSIBLE 0WNEU8QIP AND AOENOY. 
 
 applicable to them: and common honesty, in the light of modern businew 
 and financial methods, throws a special burden on those who put them 
 out." » "^ 
 
 Such and similar language is having its effect in breaking 
 
 down that view of the law which is well represented both in 
 
 England and America bj' the following quotations from Smith's 
 
 Mercantile Law: 
 
 "Tlierefore, save in cases within the Factors Act, deliTery by a person 
 who has improperly obtained it, or without authority from the owner, of 
 a bill of lading mdorsed in blank to a bona fide transferee for value, con- 
 fers no title to the goods which it represents."' 
 
 By the American annotators of the same work it is said : 
 
 " Nothing can in fact be a greater departure from the principles and 
 a!>alo«ies of the common lair than to treat bills of lading or other docu- 
 iientttiy evidences of title to chattels personal as negotiable instruments. 
 Instruments which represent choses in action may be negotiable because 
 the right cannot be separated from the instrument, and has no distinct or 
 actual physical existence. And even there negotiability only exists in the 
 case of absolute promises for the payment of money, a thing negotiable in 
 itself and which cannot be reclaimea by the true owner of any one who has 
 received it bona Jkle and in exchange for valuable consideration. But 
 chattels personal are wholly insusceptible of negotiation * in themselves, 
 and it is manifestly inconsistent ^o give the documents which represent 
 them a different character. The result of the cases, therefore, as a whole 
 seems to be that wliile on the one hand the possession of bills of lading or 
 other documents of the same nature may be evidence of title, and equiva- 
 lent for some purposes to actual possession, vet that on the other u does 
 not conatitute title nor dispeme tcith the rtde nemo plua Juris ad alium 
 trantferre /wtest, quam ipse habet."* 
 
 Some Later CIases. 
 
 Although it cannot yet be said in England that there has 
 been any substantial recognition of tLe principles here advo- 
 cated, yet the cases are moving in the direction which these 
 principles justify ; and there is much in analogous departments 
 of the law which can be cited in i;heir favor. As we have al- 
 ready noted, the only qualification of the doctrine of " symbol- 
 ism " was that ii^dorsement of a bill of lading would deprive a 
 consignor of his right to stop in transitu; any other rights 
 which he or anybody else might have were unaffected. 
 
 But observe the entrance of the wedge in 1866: A bill of 
 
 1 Pollard v. Reardon (180S), 18 a a 
 A. 171; 65 Fed. R. 850. 
 
 *10thed., ToLI, 846. 
 
 * Observe how a change from the 
 usual expressions "negotiable" and 
 "negotiability" to " tiegotiation " at 
 «DcechaiiengesatteDtion,aDd makes 
 u« wonder whether after all goods 
 
 are incapable of being the subject of 
 negotiation — ar<3 not "negotiable." 
 Cannot they be sold and transferred? 
 See the phrases discussed in chapter 
 XXIV. 
 
 *8th Am. ed., § 122& And see 
 §1730. 
 
OOODS — DOOl'UENTS OP TITLB. 
 
 331 
 
 lad ng wa. sent to the vendor's agent with authority to trans- 
 
 ™1. P"'-'''"'^""'"'^': "y mean, of . fraudulent pretest the 
 
 n^ %**"° «"" ^^''''"' ■" "' «"«' "'"■ "» he p sold the 
 «ood, No,, apimrently it was «J™itt„d that if the bill had 
 
 b«,n obtamed by the same sort of fraud from the shipper he 
 «ould have suecessfully claimed the goods; but the IbkLr 
 ianng indorsed the bill to an agent (fL whom it was X ' 
 
 ,m^r.?ThT °"'/°'?''" """ '""' ^»'"i"»»'» p-^viotd i: 
 
 TS , T "' "' ' '*'"'"'' ^"^ »<" °P«""« "">™ than a 
 transfer of what is represented ") 
 
 in the present case the Bhivwrot£lrL^! ? neRotmbie instrument. But 
 ing, indorsed it to order aKL?inilnTforJ'*!^'"/-.°'**i"«'* * "'"' «' '"rt- 
 the express purpose of it tSintffnrfor.oVi?^*''**^'* 'if**^- <»'« a^ent) for 
 T." (the original purchasers)!! * °""'* ^^ ^"^ ""'^ '^^"ded over to S. & 
 
 The next step- was to hold (1867) that although the agent 
 had express instructions not to part with the bill of lading 
 without receiving payment, yet if he did so an innocent trans 
 fereewas safe.' Clearly, if an agent (apart from special cir- 
 cumstances) had been intrusted with goods to be handed over 
 to some one only upon receiving certain moneys, a breach of 
 bis instructions would in no way affect the pLcipa tJs 
 last decision can be justified upon the principles o^ estoppe 
 only It goes beyond the legislation which provides ^ 
 
 an?^rri.s\te"rTo'w°nV;*i? tt^S^^" ^tS/"'^"''^ *~-'--«^ ^ 
 document to a person who tok% the I^Mm«„f i ""^ ^^.\ "^""'ers the 
 ah!e consideration. . . tL»nLi^^T"^ "? Rood faith and for valu- 
 or stoppage in <raA*,i«, can onlv Ki^K/fe''* »' \"' *>r retention, 
 transferee." « ^ *^ exercised subject to the rights of the 
 
 Moving still further away from Lord Campbell's view is 
 the case of^an* of India v. Henderson (1874) in the Privy 
 
 that they were to be sent to the purchaser's agent, who was 
 
 » Pease v. Oloahec (1866). L. R i p. 
 C. 219; 85 L. J. P. C. 66. See similar 
 distinction taken as between a bill 
 of exchange intended to be issued 
 and one not so intended, in chapter 
 
 -The Argentina (1867). L. R. 1 A. 
 & E. 878; S9 UJ.F.C 17. 
 
 •The Factors Act, 68 & 68 Via 
 (Imp.X oh, 45, § 10. 
 
 *L. R 5 P. C. 501. See similar 
 cases, but disposed of upon other 
 grounds: Rodger v. Comptoir (1869). 
 
 L. R 2 P. P flOsi. na T t t» X ». 
 . . ._.. ^ a. r. x^ 3U; 
 
 Henderson v. Comptoir (1878), L. R 
 6 P. C. 258; 42 I* J. p. c. 60. 
 
 m 
 
883 
 
 OSTENSIBLE 0WMEB8HIP AND AOKNOT. 
 
 to remit the proceeds for applicatiou upon the porohase-money ; 
 
 the purchaser having received the bill of lading for this spe- 
 
 oiQo purpose, fraudulently pledged the goods and indorsed the 
 
 bill to a bank; held, that the bank had acquired a good title. 
 
 In further development of the same principle is the recent 
 
 (1895) case of Henderson v. Williams} It was a case of goods 
 
 not at sea, but in a warehouse, in which the owner was tricked 
 
 into a transfer of them. The court held that the transfer was 
 
 not made in punmance of any contract, and therefore that no 
 
 title passed, but 
 
 " the true owner havin, : enabled F. to hold himself out sa the owner could 
 
 not set up his title aga ust that of the purchaser; " 
 
 In other words, ostensible ownership will estop even where 
 the appearance of title is not only not with the assent of the 
 true owner, but has been obtained by fraud upon him. 
 
 With such cases in view what ought to be done with such 
 a point as this ? A vendor sertt to his purchaser a bill of lading, 
 and also for acceptance a bill of exchange for the price; the 
 purchaser ought to have retained the bill of lading unless be 
 accepted and returned the draft; he did neither, but wrong- 
 fully transferred the bill of lading to an innocent purchaser. 
 The case seems to be simple enough — the original vendor is 
 of course estopped, for he has permitted the appearance of 
 ownership in another person. Unfortunately, however, there 
 is a provision in the Factors Act ' which declares that 
 
 " where a person having bought or agreed to buy goods, obtains with the 
 eonaent of the seller possession of the documents of title; " 
 
 from which it was assumed that the only question was whether 
 the first purchaser was or was not " with the consent of the 
 seller in possession of the documents of title; " it was held that 
 he was not; that the act did not help the sub-purchaser'; and 
 that he must lose — not a word about estoppel, or the case of 
 Henderson v. Williams above referred to.' Upon appeal a dif- 
 ferent reading of the statute led to an opposite conclusion.* 
 
 1 (1895) 1 Q. a 521; 64 I« J. Q. B. 
 808i And see the discussion in chap- 
 ter XXL 
 
 Si 53 & S3 Vio.. oh. 45, g 9; The Sales 
 of Goods Act, 56 & 57 Vic. (Imp.), 
 
 -U n>< UOK/Ot. ROITJn /Man \ nk <M 
 
 824(2). 
 
 1 Cahn T. Pocketts (1898), 3 Q. a 
 61 ; 67 L. J. Q. B. 62& For other in- 
 stances of the baneful effect of the 
 Factors Act, in diverting attention 
 from principle, see chapter XXIII. 
 
 4/iaoQ\ inn A^ft> ah t. t n n 
 
 S1& 
 
OOOD8 -— DOCUMENTS OF TITLE. 
 
 833 
 
 Amertcan Authorities.- Although it cannot be said that any 
 early exposition of the law equals in value the sentence which 
 we have several times quoted from Mr. Justice Ashhurst's 
 judgment xnLtckharrow v. Mason, yet fortune so willed that 
 a dictum of Mr. Justice Story in 182? should have in America 
 a greater effect in rightly directing the law as to bills of lad- 
 ing than that of the English judge had in his country." Judge 
 fetory said : j b 
 
 It will be seen that we are by this statement of the law at 
 once away from the mere question of the effect of the transfer 
 of a bill of lading upon the right to stop in transitu: and 
 although we have wrong basic principles: (1) that the indorse- 
 ment of a bill of lading passes the property in the goods; and 
 (2) that the assignee is an agent, yet that is a defect, not in 
 the statement of the law but in the reasons given for it 
 
 The error nevertheless had its effect; so that even after es- 
 toppel was thought to be the true ground of decision, its prin- 
 ciples were not at once completely grasped. For example, a 
 bill of lading was handed to an agent to be delivered to a pur- 
 chaser of the goods when a draft for the purchase-money was 
 paid ; the agent gave it up upon receiving an acceptance merely 
 of the draft; the purchaser pledged the goods; and it was held 
 that the pledgee could not retain the goods as against the orig. 
 »ial vendor, for the agent had no authority to transfer the biU 
 Estoppel would of course decide the other way.* 
 
 More in harmony with the principles of estoppel is a later 
 case: The owner of goods, in pursuance of an arangement with 
 
 » As to the eflfeot upon the general 88& See Munroe v. Philadelnhiii 
 lawofMnJusticeAshhurst'sdiotum, (1896), 75 Fed. R 546. ""'«*'«»?'"» 
 
 ^Thi-^-T' .., t..v . *StolIenwerck v. Thacher (1874)^ 
 
 JThislstoowIde. Ifthegoodshad 115 Mass. 824 No objection upon 
 
 been shipped by a thief of them, no the ground of estonnel -«„ Z S 
 
 zT&uBxer or the bill of lading could to Saltus v. Everet"t'(18bv SJOWenl 
 
 oust the true owner. (N. y.) gea 
 » Conard ▼. Atlantic (1838), 26 U. a 
 
 I' -ii 
 
834 
 
 08TBMBIBLB OWNERSriP AND AOVNOT. 
 
 H purchaser, delivered then to a carrier, talcing a receipt indi- 
 outing that " bills of ladi.ig will be issued on return of this re- 
 ceipt;" the owner retain«jd the receipt; the carrier notwith- 
 standing his receipt issued a bill of lading to the purchaser, 
 who pledged it; held, that the pledgee was entitled as against 
 
 the owner.* 
 
 To the same effect is a very recent case in the federal courts. 
 Goods in process of shipment were transferred by bill of sale; 
 the purchaser neglected to ask for a bill of lading; the vendor 
 got it, and with its assistance fraudulently resold the goods; 
 the second purchaser was preferred. Proceeding upon the prin- 
 ciples of estoppel the court inquired 
 
 "whether the plaintiffs had by their own conduct enabled Snnith to 
 hold himself forth to the world aa havinjc not the poM^'salon only, bu* the 
 property?" and added: "When Pollard, Pettus & Ca accepted from Mana- 
 fleld a bill of sale of the hides in question, they knew that In the rejcular 
 course of businees a clean bill of lading for them would issue tohim,olotl|- 
 inir him with the customary indicia of absolute ownership. They took 
 the chances arising from this. They must stand as though they assented 
 to it, and they can claim no right against any one who dealt with Mansfleld 
 In good faith relying upon it. Their presumed assent to the Issue of the 
 bill of lading to Mansfleld Is emphasised by their laches in applying for it 
 Whatever may be the nature of their right it cannot prevail against Rear- 
 don's title under the bill of lading."* 
 
 Similar to the Privy Council case of Bank of India v. Hen- 
 derson above referred to' is that of Munroe v. Philadelphia,* i«v 
 which a transfer of goods, and indorsement of its covering bill 
 of lading in breach of trust, was held to give a good title to fchfr 
 
 transferee. 
 
 One further American case. Its dicta relate to warehouse re- 
 ceipts, but the same principle governs all sorts of documents 
 of title. Notes payable in property were by the law of the 
 state transferable but not negotiable. They were left with an 
 agent for collection, who fraudulently transferred them to an 
 innocent purchaser. It was held that the true owner 
 "having put its agent in possession of the notes, which showed on their 
 face that the latter was owner, was estopped from questioning the title of 
 
 ' *»A*pledgVe himself may. by his neglect or through misplaced confi- 
 dence, bring himself within the rule of equitable estoppel; as where he has 
 
 1 Fourth Nat Bank v. St Louis 
 (1882), 11 Ma App. 888. In England 
 in a somewha^t similar case (Schuster 
 v. McKellar (1837), 7 E. & R 704; 80 
 T. .r O, R 28l)t where the vendor had 
 the mate's receipt, and a bill ought 
 not to have been issued until receipt 
 
 had been given up, the decision was- 
 the other way — the vendor won. 
 
 s Pollard V. Reardon (1895), 18 G a 
 A. 185; 03 Fed. R. 8521 
 
 >^nfe, P.S81. 
 
 «75Fed.B.643. 
 
OOOD9 — DOCCMKNIS OF TITLE. 335 
 
 wt up his title as aKHinst n L^nln ni 1 ""* ''•>'' K'^e '» e»top|M.(l to 
 pood •faith for value «dTncedon^//e"^7^^^ the receipt in 
 
 [Ike rule applies where the owner of Jun^rtl ..n *'" """^ rx)8dewilon. The 
 house receipts in his own name lL?ni^ElL^ 1 " ^f ^^'^^ *° ^ake ware- 
 and the receipts are neKStSleksoX^^™ .^^ K^^^. fraudulent conduct, 
 for value witl.out noUcK tlw fmud ^^^^^ '^'"'"'^^ *" » bona fide pledgee 
 
 « s^MUmT '""^ '' " '" '^'''''"'' ""^"^ " negotiability » and 
 The extent to which we have departed both in England and 
 America from the idea t.at "the transfer of a symbol does not 
 operate more than a transfer of what is represented " will now 
 be appreciated. It is hoped too that what has been said will 
 sufficiently prove that such departure is to be in no way at- 
 tributed to the "negotiability" of bills of lading; but that it 
 must be set down to clearing apprehension of the principles of 
 estoppel by ostensible ownership and ostensible agency. 
 
 Dock "Warrants, etc. 
 The law as to dock warrants, etc, has pursuod a coarse some- 
 what similar to that just traced in dealing with bills of lading 
 mat is to say, it commenced with the enunciation of sound 
 general principles; those principles were speedily lost sight of 
 to reappear here and there as ineffective dicta or for the mere' 
 purpose of being condemnetl; while nevertheless some "stream 
 of tendency which maketh for righteousness" was accomplish- 
 ing useful work -a tendency thir 'me manifesting itself in 
 acts of Parliament and thwarted b f be courts 
 
 nf f" fin^ f«^.- What can be better than the declaration 
 or Lord Ellenborough in 1812: 
 
 t,j;?W|?roi?r;ranV^^^^ '^' P^r^'es and to the external 
 
 a^nrtdSSt""^ 
 
 Unless, indeed, it be the statement of Bayley, J, in 1817, that 
 nemo dat quod non hahet 
 
 propeVlTwhich-^haJe'i^ ^^<^ «y™bols of 
 
 8sa?f «- -i^-^K^ffl/ss KS ns^i ;? 
 
 > Atlanta v. Hunt ri8«7L ion T«nn 
 8»; 43 & W. R. 482. And see cases 88. 
 there cited. 
 
 « svactiug r, X3U5E {IxilZ}, 15 JSttst, 
 
 •Boyaon v. Coles (1817), 6 M. & S. 
 
 ,.s:,;: -^ 
 
SM 
 
 OSTENSIBLE OWNEBSIIIP AND AOBNOY. 
 
 To the same effect Abbott, C. J. (1824), bcld that tbe ques- 
 tion which ought to have been left to the jury was 
 
 "whotlier the plaintiffs hud by their own con<luct enabled Smith to hold 
 himaeljr forth •» the world a* having not the iKMwession only, but tl»e prop- 
 erty."! 
 
 Nothing could be more satisfactory than these expositions 
 of the law. And for tbe future it seemed as if the only ques- 
 tion was to be one of fact: Did the true owner "accredit the 
 title" of the ostensible owner (by handing over to him docu- 
 ments of title or otherwise)? If so he is estopped. 
 
 Unfortunately, however, the law as thus stated was almost 
 immediately overlooked. Afterwards it was qualified and min- 
 imized, then overruled, and finally underwent partial and in- 
 congruous resuscitation by acts of Parliament, which well-nigh 
 sent to oblivion the principles upon which it rested. 
 
 Submergence.— In 1825 (one year only after the decision of 
 Abbott, 0. J.) Best, C. J., had a case before him very much 
 like those already referred to, and he decided against the inno- 
 cent purchaser, deploring that the state of the law gave him 
 
 no alternative: 
 
 " Had I authority to alter tlie law, as the mode of carrying on commerce 
 has altered, I would say that when the owner of property conceals him- 
 self, whoever can prove a good title under the person whom the conceiiled 
 owner permits to hold it should retain that property against the owner; 
 but this is not yet the law of England."* 
 
 The decision may be taken to be the commencement of a most 
 curious struggle (still unfinished) between Parliament and the 
 courts, the former endeavoring (by its Factors Acts) to bring 
 the law into harmony with mercantile usage, and the courts, 
 with minutest criticism, declaring that Parliament has not yet 
 effectively done it. Not principle nor commercial usage, but 
 inclusion within literal and narrow interpretation of statutes, 
 became the test of ownership of merchandise, with such results 
 as we might expect. Unfortunately, too, some of the states of 
 America and provinces of Canada became involved in the con- 
 test. 
 
 fl! 
 
 84. Compare the finding of the jury 
 in that case with the finding in Spear 
 ▼.Traver8(iei8),4Campi251: "That 
 in practice ,the indorsed dock war- 
 rants and certificates are handed 
 from seller to buyer as a complete 
 transfer of the goods." 
 
 »Dyer v. Pearson, 8 R & C. 88. 
 
 « Williams t. Barton (1825), 8 Bing. 
 189. See also per Parke. &, in Phil- 
 lips v. Huth (1840), 6 M. & W. 006; 9 
 L. J. Ex. 
 
 1%' 
 Id, 
 
OOOD8-- DOCUMENTS OF TITLE. 
 
 MT 
 
 serv ce. For exami»l« o J„ii i . , "" '" effective 
 
 •nd .he ,«„„ ..„ .h. „™, .,'lf K eSd' S.ir/.^lriJSr' •" •""■»"V- 
 -against a„ ,„„„e„t p«reh"^r omT,;; ""' °' "" «"""' 
 
 attention from principles TblTrrl 1 '''"'^ '° ^''"••' 
 
 e>ting episode in tlie strageloV but th. r ' * ■"■ '"'"■ 
 
 formidable obstacle sro„lfi'aiiatv.rr' T"'"' " » 
 ojple.. a«. the learned chie; El^rK d^t^ ■;;'"■ 
 
 5r;:jr2:vXd'riirrrrb^^^ 
 
 tributed to other departments of the".^ F^ "rd HaTheT" 
 
 tion .„d i, mtaled by u'". "" I*™" "'''» «''« «»<lit to thrjU„! 
 
 and Lords Chelmsford and Colonsav had agreed with him Th. 
 case, however want off in tk. r j "S'"""! wiin mm. Ihe 
 of tL p. ! . '^* ^"^^ "P°" misleading anali-sia 
 
 olerrVh:'::;!:t«\r--""'"-«>^» 
 
 'Cole V. North Western (1875). L. 
 R. 10 G P. 888; 44 L. J. C. P. asa 
 
 »Per Cockburn. C. J., in Johnson 
 J^"2^^*<^877XaGP.D.40;47L.J. 
 
 'Before it; wna h<>a>/i 4> . 
 
 40 & 41 Via (Imp.), ch. 39. 8 a See 
 now Factors Act, 5.» & 58 Vic. (Imp.) 
 ch. 45. 88; Sale of Goods Act, 56 & 57 
 Si 
 
 l'"" I'T^'"''- 7J. §85(1); 59 Vic. 
 (Man.), oh. 25. §25(1). And see Bur- 
 ton V. Cnryea (1866). 40 III. 820- 
 Western v. Wagner (1878X 65 III. 197. 
 _ * Henderson v. Williams (1895) l 
 SI' ii. 53i; 64 L. J. y. R 808, will howl 
 ever be of much service. 
 
 'Vickers V. Hertz (1871X L. R 3 
 Sc. App. 113. 
 
33S 
 
 OSTENSIBLE OWNERSHIP AND AGENCY. 
 
 E M 
 
 Let us consider for a moment the case from which Chief 
 Justice Cockburn's words are taken. " The owner of warehoused, 
 goods sold them, but retained the warrants, and the purchaser 
 took no steps to have the appearance of title in the warehouse- 
 man's books changed in his own favor; the vendor resold the 
 goods to an innocent purchaser; and the first purchaser, not- 
 withstanding his assistance to the ostensible ownership of the 
 vendor, was held to be entitled to the goods. The learned 
 chief justice is quite satisfied as to the demands of justice; and 
 that there was wanton inattention to the interests of other 
 persons; but he declares that he is not satisfied that 
 "at common law the leaving by a vendee goods bought, with the docu- 
 ments of title, in the hands of a vendor . . . would on a fraudulent 
 sale or pledge by the party so possessed divest the owner of his property, 
 or estop him from averting his right to it If this had been so there 
 would have been, as it seems to me, no necessity for giving effect by statute 
 to the unauthorized sale of goods by a factor.' 
 
 From the standpoint of estoppel the case is of course a very 
 clear one; and as we have said, the "stream of tendency" op- 
 erating through Parliament at once corrected the decision. But 
 Parliament declared no principle. The court had said that if 
 a purchaser of goods misleads people by leaving the documents 
 of title in the possession of the veiulor he is nevertheless safe, 
 and the second purchaser must lose. And Parliament with cate- 
 gorical negative declared that if a purchaser leaves the docu- 
 ments with his vendor he should lose, and the second purchaser 
 should have the goods. 
 
 The effect of the statute then is to leave the matter in very 
 incongruous and unsatisfactory form; for a single instance of 
 the application of a general principle is separated from all 
 other instances, and the law as to it, being arbitrarily declared 
 by Parliament to be so-and-so, the inference is suggested that 
 other cases ought to be otherwise determined. 
 
 Resemblance to Bills of Lading.— Ixi fact the difficulties en- 
 countered in dealing with dock warrants, etc., were threefold : 
 (1) The law as to bills of lading had not been placed upon a 
 proper basis; (2) the essential resemblance between bills of 
 lading and other documents of title was not observed; and 
 (3) the unifying principle of estoppel was not applied to them. 
 
 For example, aithough as we have seen a transfer of a bill 
 of lading to an innocent purchaser would clearly cut out the 
 right of the consignor to stop in transitu, yet it was said that 
 

 0(X)DS — DOCUMENTS OF TITLE. 339 
 
 it was Otherwise in the case of a delivery order.' This ruling 
 n Its urn u^s reversed by Parliament; butagain no principlf 
 IS enunciated, agam a mere categorical contradiction : ^ 
 
 anJenVoSr„"*or?f^1,J™°,t'^^^^^^ same eflFect for defeating 
 
 lading has for defeatif^'tJj ^RWoSg^S ?r«t^L™.^^^^^^ '' '^ '''' '' 
 The result is that when some other documents (certificates 
 
 he 17' 1 T "'' "^^'' "*^^°^ "« '^-«-^^ -* to bewTthin 
 !r!„!HT ,''^?"'°''^P''°^^^^^^ ^^^'^°»g^ i^ trade they 
 
 are used for exactly similar purposes), the statute does not apply 
 and injustice is again done. So capable a judge as James L J 
 argues in this way; ^ »» .^ames, u j., 
 
 cerli'Scltls' acco?dTnt ?o tte cuitom of « '"" "^i *J**- *' '•« «?'<^ t'^-* «"«h 
 in fact warrants. To sav that i^ in tr„*h ,- '° *'?^? '" «''»''»'• ^^ses, are 
 No custom of the tradeJan make a oprf.^fin^*^^ SJ.*""/ '^'?'«»> "^nnot be. 
 rant What is evidently me^ntbv ?h?f^nt*® ?• *"" °^ exchange or a war- 
 V deposit the certificate L if they were war^iil" tu \ • '' ^.l"** P^°l''« 
 comes ta Everybody knoVs tha7i™!„To 1^ '^^*' " ""^a^y ^''at it 
 inger or warranUngLmZdy elsrwho ha«^rl^^^^^ warranting a wharf- 
 liver them. The owner of?h J .^il!!^ • *^ Poss-^ssion of the goods to de- 
 is the bailee of the Ss to delfver ^IT^ tS T^^^^'l^^ to the person who 
 rant. Such warrants are conSLntlvd^^^^^ H'u " ^*??'i" '"^a"' ^ya war- 
 they are properly and vludfvSf wifh l-Y'*'*' *".^ '' i**«7«'"« negotiable 
 by saying^^thVt such cert ficatelac^rdin^ ? security And what is meant 
 in similar cases, are irfac?wa;?anS <^S to the ^ ''•<^° *^ade 
 
 money upon warrants. Thi>v mft 1!^^ ""'^ °^ ^'"8: that persons lend 
 they cannot aUer the naturJoTtL di.?,^°T '**'.?*"°'' «« ''^ey ''ke. but 
 sons who have got tZse certificate! ami mon"", ^:? P'^^^i''^ °' '^e per- 
 would in any way alieot the man..fft^H,l??"7 '®"**^" ** between them, 
 manufacturer haJ in tS^X^r^lllS^S ^^^L^tT^ S^-^' "'" 
 bo also in i^am^/oe ^,. Bain* unpaid vendors gave to their 
 purchaser the following document* 
 
 . : ^^^nToSTotrnVa^c?^^^^^^^^^^^^^ "''« ^°^--^ »>-eon 25 tons 
 
 «i Jtl"!?' ^HTiK*'"^ '^^^ *^^ ^""^^'^ ^'>^^ *^« document, 
 ti^h^Xt^iilS^^^^ to all p'ersons 
 
 the property of R & S^tfe &p"u?ce«4^« &a"lirnt"ctS.'S 
 and the purchaser resold the goods and indorsed the document 
 to his vendee. Under these circumstances estoppel ought to 
 preclude the vendor from asserting his lien as against any one 
 
 iJenkyns v. Usborne (1844), 8 Sa 
 N. S. 505; 13 L. J. C. P. 196; approved 
 m Barnard v. Campbell (1874), 65 N. 
 Y. Supp. 461, 463. And see McEwan 
 V. Smith (1849), 2 a L. 0. 809. 
 
 2 The present statute is 52 & 53 
 Vic. (Imp.), oh. 45, § 10. 
 
 *Ounn V. Bolokow (1875), L. R 10 
 Ch.,491; 44 L. J. Ch. 732. 
 
 *(I876) 1 a P. D. 445; 45 L. J. C. P. 
 264. Merchants v. Phoenix (1877), 5 
 Ch. D. 216; 46 L. J. Ch. 418, which 
 followed in the next year, is almost 
 ,,, -.,t,j raituciyu V. cam, ex- 
 cept that the document was of more 
 familiar character; and the vendors 
 were estopped. 
 
I I 
 
 340 
 
 08TENSIBLK OWNERSHIP AND AOENOT. 
 
 changing his position upon the faith of the instrument; but 
 the case goes off upon the ground that the instrument was not 
 one of customary character. 
 
 The point missed in such cases is the generalization of the 
 quotations above given, and the application of these quotations 
 to commercial usages as they arise and develop. 
 
 Under previous headings will be found further discussion 
 of the subject in hand, and in a later chapter the Factors Acts 
 (without discussion of which the present chapter would be pal- 
 pably defective) are treated of at length.^ The reader is re- 
 quested to refer to those other parts of the book for that which 
 might very well appear here, but which is too long for repeti- 
 tion, and is more necessary elsewhere. 
 
 Shares in Companies. 
 
 Estoppel, in its application *to shares, has the same two as- 
 pects as have been noted when dealing with other documents 
 of title, namely : (1) Estoppel of the company that issues share 
 certificates; and (2) estoppel of the transferrors of shares. 
 
 Estoppel of the Company. — Upon this we need not dwell. 
 Let it suffice at this place to say that the law now is clear that 
 a company is estopped by its certificates from denying the fact 
 represented by it as against persons who change their position 
 upon the faith of it.' 
 
 Eatojypel of the Transferror. — Cases in which a transferror 
 of shares may be estopped may be divided Into two classes : 
 (1) Cases in which shares have been completely transferred to 
 a trustee, who, in breach of his trust, makes some disposition 
 of them ; and (2J cases in '-'hich blank transfers have been in- 
 trusted to some one who misuses them. 
 
 Shares Transferred to a Trustee. — There ought to be no dif- 
 ference between lands and shares in cases of priorities arising 
 out of breaches of trust; but yet the assertion may well be 
 ventured that if a case involving land were put to a well-read 
 
 iCh. XXIIL 
 
 iRe Bahia (18,68), L. R 3 Q. R 584; 
 
 (1890), 25I3. a D. 77, 612; M L. J. Ch. 
 565; Toiukinson v. Balkis (1891), 2 Q. 
 B. D. 614; 60 L. J. Q. E 658; Re Ottos 
 
 (1808), 1 Ch. 618: 63 L. J. Ch. 166; Re 
 Concessions (1806), 2 Ch. 767; 65 L. J. 
 Ch. 909: Moorea y. Citizens (1888K 
 111 U. a 150; 4 S. C. R. 845; Trimble 
 V. Bank (1807)^ 71 Ma App^ 467. 
 
GOOD. D0CL-MENT8 OF TITLK 341 
 
 lawyer, he would at once inquire about the Wal estate and if 
 U^la^^^ 
 
 With reference to land no doubt the law is at present firmlv 
 founded upon various "technical and unsatisfacto J- rut^al 
 to legal and equitable estates. If the purchaser frnrnfr 
 
 iect' Ind ti ' "^"^''' ^^' ^'^^'^' ^'''Sth with that sub- 
 whth 1 ^^ ^'^ °^' ''^°^^"& °^««« relating to shares in 
 
 which the same rules have been applied.' But the ratTona^ 
 prmcples of estoppel by ostensible ownership are supeTsedW 
 TrX 1 Uh"^^^^^^ -^-^ if indeed reem! 
 
 the field ^ '^' '''' ' ''"^^ ^'"^^ '^ ^' ^" P^^^^^^i^'^ of 
 
 pafsTttThfo^'^'f "r '""^ P^^"' ^°^ '^ °^°^-^ ^et us 
 pass on to the consideration of cases in which the trustee not 
 
 lently fills up blank transfers intrusted to him. For if in such 
 
 an instance a purchaser (upon principles of estoppel) is sa?e rre 
 
 pective of questions of legal estate, we shall hive L dffflculty 
 
 m the simpler case which we are leaving behind. ^ 
 
 The Swan cases in 1859-1863* with reference to shares are 
 
 panics- A and B.- employed a broker to sell the A shares 
 and gave him several signed but blank transfers; the brS 
 
 and sold them to an innocent purchaser. After much doubt it 
 
 Zedtfl-''^' ^'^ r ^™^ o^thesharrtn" 1! 
 topped by handing over the blank transfers. But the iudir. 
 nents leave little room for doubt that had the true ownfr 
 
 vTt^IT^'^^V'^'l'^'''^^ *^^ ^^^"^''•^ intrustingWm 
 with the B. certificates, he would have lost his shares. 
 
 ^ Ante. p. 28S. 
 
 »Ch. XVIU. 
 
 •Reg V. Shropshire (1878), L. R. 8 
 Q. R 4t0; L. R. 7 H. L. 496; 45 L. J. 
 Q. B. 81; Marshall v. National Bank, 
 etc. (1898), 61 L. J. Ch. 465; Weaver 
 V. Barden nfl79i ^o v v aaa un..^ 
 ever the true ground of decision 
 there is no doubt that the purchaser 
 
 will be safe if be acquire the "legal " 
 title. Crocker v. Crocker (1865X 81 
 
 *Ex parte Swan (1859), 7 C. R N 
 S. 400; 80 L. J. C. P. 118; Swan v.' 
 North British (1862). 7 tt & N. 608- 
 3i L. J. isx. 425; 2 H. <fe U 176: 88 L. 
 
 J. Ex. 273. , 
 
1 
 
 842 
 
 OSTENSIBLE OWNERSHIP AND AOENOT. 
 
 A few years afterwards (1871) a New York case of much im- 
 portance {McNeil V. Tenth National Banh^) was decided. The 
 owner of shares pledged them with bankers, giving to them the 
 certificate upon which was indorsed a blank assignment and 
 power of attorney to do "all necessary acts of assignment and 
 transfer;" the bankers fraudulently disposed of the shares; 
 and the owner was held to be estopped upon the ground 
 
 "that where the true owner holds out another or allows him to appear as 
 the owner of or as having full power of disposition over the property, and 
 innocent parties are thus led into dealing with such apparent owner, they 
 will be protected." 
 
 The principle of thi;^, decision has been approved in Pennsyl- 
 vania By. Co:a Appeal (1878),' in Otia v. Gardner (1883),' in 
 Colonial Bank v. Eepworth (1887),* and Williams v. Colonial 
 Bank (1887, 1890),» in Bone v. Boyle (1890)," in Waterhouse v. 
 Bank of Ireland (1892),^ in Rohinson v. Montgomery sJdre (1896),* 
 in Coffey v. Coffey (1897)," in Boulthee v. Qzowski (1897)," in Gil- 
 lert V. Erie (1898)," in Smith v. Rogers (1899)," in Brown v. Equi- 
 table (1899)," in Masury v. Arkansas (1899),'* and may now be 
 said to be firmly established. 
 
 The interesting question now arises. Upon what principle can 
 such decisions rest? It seems to be impossible to stretch the 
 word " negotiability" so as to acqount for a transferee of shares 
 acquiring a bettor title than that of his grantor.'* The doc- 
 trines associated with distinctions between legal and equitable 
 estates too are insufficient, for in many of the cases only an 
 equitable ■ iterest (as it is still called ") in the shares was trans- 
 ferred. Both of these suggestions moreover have been dis- 
 tinctly repudiated in the House of Lords as woU'as in the United 
 States. 
 
 1(1871) 46 N. T. 82& 
 
 '86 Pa. St. 80. And see Davey's 
 Appeal (1881). 97 Pa. St 153. 
 
 > 105 111. 486. 
 
 *86 Ch. D. 68; 86 L. J. Ch. 1097. 
 
 »86Ch. D. 659; 88 Ch. D. 888; 67 
 L, J. Ch. 826; & G. «u6 nom. Colonial 
 Bank v. Cady (1890), 16 App. Cas. 267; 
 60 L. J. Ch. 181. 
 
 •27L.R.Ir. 137. 
 
 7 20L.R.Ir. 884 
 
 • 74111. App. 241. 
 
 M24 Ont App. 602; 29 S. C. Can. 54. 
 
 11 184 P& St 554; 89 Atl. R. 29L 
 
 U80Ont256. 
 
 "78 N. W. R. 108; 79 N. W. R 968. 
 
 i«93Fed. R.603. 
 
 i^See the remarks of Jessel, M. R, 
 with reference to warehouseman's 
 warrants in Merchant .. Phoenix 
 (1877), 6 Ch. D. 205; 46 L. J. Ch. 4ia 
 See ch. XXl'7 at to this word "ne- 
 gotiability." 
 
 UCaa tVia voinarlra 4n nil. TVTTT- 
 
GOODS — DOCCMBNT8 OF TITLE. 343 
 
 The only remaining ground seems to be estoppel; but this 
 nn ir J:,^ repudiated by Kekewich, J., saying that it was 
 not applicable (to a case in which certain executors intrusted 
 Messrs. Thomas with blank transfers) in 
 
 ;xec\ftS^\*?'^^^^^^ ^ suggested that the . 
 
 judgment goea^^on an examSaS of Te JeaT^^^ ^y * 
 
 eluded from assertinir in mv iiVA<««»!,*.- *!-?»,"• ™ "*' t'>«y ^re pi«». 
 the custody o7rhVi"K S^^Tft - '- - »- 
 
 them as they from time to time considered dSabfeM 
 
 Kilt t-kin «•_ -. l._Jl» .. 
 
 Butthis ts precludiug them from asserting the truth- for 
 the admitted fact is that the brokers were not so authorized. 
 They appeared to be authorized; and upon the faith of that 
 appearance a third person changed his position - that is es- 
 
 Mr. Justice Chitty admits estoppel as the governing prin- 
 ciple, but states it in this way: « S P"n 
 
 anil^cUdit"ii'n?nVS?rheL'diu''m^^^^^^ ^^ P"'^"^^ P'o-«<» 
 
 to hand, the right princiSe to adon^S rlffr "^^V 51'®^ ^^'^ ^'""^ hand 
 where (as is thi cJ^^toremen^BZ^nJfr!^^''''^ ^i""^*"" 'I^ ^°^^ that 
 
 ro^Ji'^iSils^iS 
 
 from denying the title of 8uch"holdlr?o?t"fe 'Wme teii^ " ' ""'"'^^^ 
 But there is confusion here. If « each prior holder confers 
 . . .an authority to fill in the name of the transferee » it 
 IS incorrect and unnecessary to add that he "is estopped from 
 denying such authority." If he has really given authoritv he 
 cannot deny it anyway. The question only arises when there 
 18 no authority m fact; and then there is estoppel, not because 
 there is authority, but because there is the appearance of au- 
 thority, and by that the true owner is estopped 
 
 Mr. Justice Chitty's solution is open to the criticism that it 
 imports as a fact that which is admitted to be untrue It is 
 ^id that "each prior holder . . . confers an authority to 
 fill in the name of the transferee;" but that is precisely what 
 he does not do -it is exactly because it was not done that 
 the trouble arises making necessary an appeal to estoppel, 
 which admits that there was no authority, and precludes the 
 owner trom so alleging. That is better than changing the 
 
 This remark supplies the answAK tn Mp t„»*;-^ t.--ji l, 
 suggested explanation of Mr. Chitty's language - that the per- 
 > Williams V. Colonial Bank (1887). 86 Ch. D. 671 ; 87 U J. Ch. 884 
 
844 
 
 OSTENSIBLE OWNERSHIP AND AOENOT. 
 
 son upon whom authority is supposed to be oonferred raust not 
 only be " the holder for value of the certificates," but also " tho 
 person entitled to the certificates." ^ If it be necessary to prove 
 the existence of authority, then no doubt it is only persons 
 rightfully entitled to the certificates that can exercise that au- 
 thority, for to them alonewas it given; but if the estoppel 
 arises from the appearartce of authority, then it may exist apart 
 altogether from the rightfulness of the title. 
 
 One further point: The suggested solution will not apply at 
 all under certain circumstances. If the person intrusted with 
 the blank transfer exhibits it in its incomplete condition to a 
 purchaser, there is no doubt appearance of (even if no real) 
 authority to fill up. But suppose that the person intrusted 
 has filled up the blanks with his own name before exhibiting 
 them, there is then no appearance of authority, and no neces- 
 sity for any. The document appears to have left its signer's 
 hands in complete form. The case has now changed from one 
 of ostensible agency to one oi ostensible ownership.' 
 
 We thus arrive at the conclusion that the true rationale of 
 the decisions in hand is ostensible agency, where the purchaser 
 is aware of the existence of blanks ; and ostensible ownership,, 
 where he has no such notice; and that " negotiability " and 
 legal estate have nothing to do with the questions. Perhapa 
 it is too much to hope that the mere dicta of Lords Watson 
 and Herschell will put a sudden termination to " negotiability '^ 
 and legal estate as factors in such problems. Kevertheless 
 they will certainly help powerfully the present trend of the 
 law in that direction. Lord Watsoji has said : 
 
 " Even when the delivery (that is by the peraons intrusted with the trans- 
 fers) has been fraudulent, as in the present case, the Supreme Court of 
 New York has held that the registered owner cannot reclaim the document 
 from a holder who has given valuable consideration in good faith and 
 without notice oS the fraud. But it is necessary to observe that tlte deets- 
 ion of the court did not attr^ute to the instrument any privilege or nego- 
 tiabuit^; in the legal cense of that term. It was based . . . upon the 
 circumsti^ace that the registered owner has so dealt with that certificate 
 as to lead the purchaser for value to believe that he was taking a good 
 title to it. In other words, the foundation rests in the principle of eatopp^^ 
 Thus far the principles of American cases appear to me to be in harmony 
 with the principles of English law."* 
 
 Lord Watoon added that cases 
 
 "which relate to competition between equitable and legal rights to stock or 
 shares have really no bearing here. Whether the respondents are estopped 
 from saying that Blakaway had Kot their authority to dispose of the oer- 
 
 1 Williams v. Ck>lonial Bank (1888), 
 88 Gh. D. 407; 57 L. J. Cb. 82& 
 
 » See ante, oh. XVIlu 
 
 'Colonial Be ok v. Cady (1800), 1& 
 
I 
 
 I 
 
 GOODS — D0CCMBNT8 OF TllLE. 845 
 
 cK?n Iherap*J;;i?;> ""^ °P^°'°°' *»»« "ol« question presented for de- 
 
 Than these quotations there are few in all th« K««b 
 .coeptable to the present writer- WerTthey Xt« 
 
 m the determination of cases which involve the iMs bv one of 
 two innocent parties on aooonnt of the fraud of .ThirJ wouW 
 soon be seen to be part, merely of obsolete svstoms and Tdea, 
 
 oftr^T T^ '"''"''^ *""""? P-'^e'-ts itself in the r^ 
 of blank transfers of shares, which has not to be enconnte^ 
 n dealing with blanks in notes and bills of lading; for t™^ 
 
 au?horr rr"""r "" """" -"• ""O " « »"• tba ttht 
 ^thority to fill up a document under seal must itself be under 
 
 case^ and if there be no redelivery of the transfer after it, 
 completion, it is said that it is not sufllcionUv executed" 
 
 Distinction must, however, again be made" between oases in 
 which the purcha^r is aware of the insuiflciency of the^ecu 
 tion and those in which he is not. Suppose that I ex^ra 
 tmnsfer o share, in blank and hand it to a broker, wh'Xte 
 handing it over, and unknown to the purchaser Ml, 171^! 
 purchaser's name My execution of the documen is rrj^ lar 
 and It may even be said that the deed is not mine at all! But 
 hat 1, not the question. E,toppel is not troubled wUh facte 
 It deal, with appearances. The document appear, to have S 
 proper y executed; I am responsible for such appearand -^S 
 I ought to be estopped.' pr^nioce, ana 
 
 Some discussion of the alternative case -where the nnr- 
 will be found in another chapter.' " 
 
 DOODMENTS OP TiTLB LoST OR StOLEN. 
 
 btatea and Canada as at present received is correctly stated 
 
 * Society Generale v. Walker (1885), 
 
 App. Cas. 278; 60 L. J. Ch. 187. And 
 see per Lord Herschell to same ef- 
 fect 
 
 » Negotiability was -schewed aJpo 
 by Jessel, M. R, with reference to 
 warehouapmon'a uTDai.ni.f- <_ %g~^- 
 
 Chants v. Phoenix (1877), 5 Ch. Di 205- 
 48 L. J. Ch. 4ia 
 
 11 Appt Cap. 20. 
 
 »8ee per Lord Herschell in Colo- 
 nial Bank v. Cady (1890). 15 App^ Cas. 
 28a See also the discussion as to 
 blanks in biiis and notes in ch. IV; 
 and as to estoppel with reference to 
 deeds in ch. XXV. 
 <Ch.XXV. 
 
346 
 
 OSTENSIBLE OWNERSHIP AND AOSNOY. 
 
 in the following extract from a valuable judgment of Senator 
 
 Vanderplanck : 
 
 "The honest purchaser who buys for a valuable consideration In the 
 course of trade without notice of any adverse claim or any circumstances 
 which might lead a prudent man to suspect such adverse claim will be pro- 
 tected in his title against the original owner in those cases, and in those 
 only, where such owner has by his own direct voluntary act conferred upon 
 the person from whom the bona fide vendee derives title the apparent 
 right of property as owner or of disposal as an agent"* 
 
 Mr. Justice Bayley's dictum, it will be remembered,' is not so 
 explicit. The test there proposed is whether " the owner has 
 lent himself to accredit the title of another person " — nothing 
 as to the act being voluntary. 
 
 One of the clauses of the Factors Acts, too, is outside the 
 Senator's rule; for by it if a vendor of goods " continues or is in 
 possession of the documents of title " — whether with or with- 
 out the knowledge or assent of the purchaser is immaterial — 
 a resale by the same vendor to an innocent purchaser will cut 
 out the first buyer.* 
 
 In the Supreme Court of the United States it has been cau- 
 tiously remarked that 
 
 " it may be that the true owner by his negligence or carelessness may have 
 put it in the power of a finder or thief to occupy ostensibly the p<»ition of 
 » true owner, and his carelessness may estop him from asserting his right 
 against a purchaser who has been misled to his hurt by that careless- 
 
 11688*''^ 
 
 and' the point has been distinctly decided in accordance with 
 this view in the state of Georgia.' 
 
 In England, too, it must be said that even where by statute 
 an owner of goods is to be estopped by the possession by an- 
 other person of the documents of title, the consent of the owner 
 (which is sometimes made a prerequisite) may be of very qual- 
 ified character, namely, one obtained by fraud.' And where 
 it is sought to estop a company by its certificate of shares, it 
 is not sufficient answer that the certificate was obtained b^ the 
 
 I Saltus V. Everett (1838), 20 Wend. 
 279. See also Gurney v. Behrend 
 (1864), 8 E. & R 634; 28 L. J. Q. B. 
 266; Pease v. Gloahec (1886). L. R 1 
 P. C. 219; 85 U J. P. C. 66; Comraei^ 
 cial Bank v. Colt (1853). 15 Barb. (N. 
 Y.)506. 
 
 Siinfe.p.812. 
 
 3 52 & 53 Vie. (imp.), ch. 15, g 8. And 
 see the Sale of Goods Act, 56 & 57 Vio. 
 
 (Imp.), ch. 71, § 25 (1): 69 Via (Man.), 
 oh. 25. § 24 (1). 
 
 <Shaw V. Railroad Ca (1879), 101 
 tr. S. 565. 
 
 • Lowe V. Raleigh (1897), 101 Ga. 
 820; 28 S. E. R 867. 
 
 •Sheppard v. Union Bank (1862), 
 81 L. J. Ex. 154. And see Baines v. 
 
 a :^..... /ifiA9\ no T. 
 
 and ante, ch. VIIL 
 
 -T O R SSI. 
 
GOODS — DOCUMENTS OF TITLE. 347 
 
 froti"""' "' ''■'" "^ "-»' <" « 'orged transfer „.om tbe 
 
 the true owner, made oat in the name of the thief' 
 
 » Jh'^ri " P"""'''* ""S"" ""' ^ P'ooeed? In treating, of 
 
 :.: •:LTh7t °°"'""' -^ "■"" -« -- '- -h" „7tr i:' 
 
 same. The documents are t^ZfSraW?. ?Lv*''^° securities must be the 
 redeemable to the holder) ostenK o«,nn!iif?^ ''V? '*'*''> *hem (by beine 
 brokers) ostensible agencyrthrtrue o^n^PhlL""^ ^^J"'- °'' ('" the case of 
 . (by careless custody or bv lack of L-^TP *' *' assisted in this appearance 
 the documents); anVhefs. therefLe as aS«i'«°" '^" transfeSbility of 
 value, estopped from asserting his tU?ft*^ *° innocent purchaser for 
 
 doJ'l'rof tli'Y "PP^^V- "■« •»» »' 'ost or stolen 
 .t m the name of another, in which case I ought to be eTtlned 
 
 to stop tn ^m/mVw was that s "^ oi me ngut 
 
 eJh';i:Si:?pro^it'-'''''''"'"-^"°«*°»'^^^^^^ 
 
 » Re Ottos (1893), 1 Ch. 618; 63 1* J. 
 ^h, 168. 
 
 ' Bangor v. Robinson (1892X 62 Fed. 
 R. 520; Young t. Brewster (1895), 62 
 Ma App. 62a 
 
 ^'Winter v. Belmont (1879), 68 CaL 
 42a Compare Re Swan (1859). 7 C 
 
 R V fl Ann. OA X , : /' ' ^' 
 
 — ■ J. u i\ ii3; and 
 
 V fl Jnn. 
 
 an 
 
 Swan V. North British (1862X 7 tt & 
 N. 603; 81 L. J. Ex. 425; 2 H. & C 
 175; 82 L. J. Ex. 27a 
 
 <Ch. XXIV. 
 
 •(1787)3 T.R 71. See the same 
 reasoning applied to notes in Grant 
 V. Vaughan (1726X 8 Burr. 152& 
 
 * Wokey V. ' <, (1820), 4 a & Aid. t . 
 
818 
 
 OSTENSIBLE 0WNSB8HIP AND AOENOT. 
 
 The contrary view is put by Fuller, 0. J., of the United Statei 
 
 Supreme Court, in this form : 
 
 "They (bills of lading) nre regorded m «o much pottpn. grain, iron or 
 other articles of merohandise. in that they are symbols of ownership ofthe 
 Roods they cover; and as no sale of goo<U lost or stolen, though to a Oona 
 fide purchaser for value, can divest the ownership oi! the person who lost 
 theni or from whom they were stolen, bo the sale of the symbol or mere 
 representative of the goods can have no such effect ^ 
 
 But the answer to this argument is not difficult. Possession 
 of goods is, usually, no ropresentation of ownership of them. 
 I may lend a friend my horse without any danger of mislead- 
 ing anybody by the change of possession. "Were I to give my 
 friend a bill of sale of the horse, to be used only after the hap- 
 pening of some contingency, the situation would be entirely 
 different. 1 ought in such case to be estopped, although un- 
 authorized use was made of the document.' And so also if my 
 title to certain goods is evidenced by a bill of lading to me or 
 my order, and I indorse it to my friend with a view to certain 
 application of it, and my qonfidence is abused, again 1 ought 
 to be estopped. The distinction, therefore, between possession 
 of goods and possession of a document of title to the goods is 
 the distinction between goods and evidence of title to goods — 
 between no appearance of title to the goods and ostensible own- 
 ership of them. 
 
 The law as to mere possession is the same as to real estate. 
 I am in possession of certain land — that is not a representa- 
 tion by anybody that I am the owner of it; and if some one 
 were to purchase from me, depending upon my possession as 
 proof of my title, he would merely disclose very unusual igno- 
 rance of our system. If, however, the documentary title stands 
 in my name, there is a representation by the true owner that 
 the land is mine, or at all events such strong assistance ren- 
 dered to my representation of ownership that ho ought to be 
 estopped as against an innocent purchaser.' 
 
 It is quite apparent, then, that the thief or finder of a docu- 
 ment of title deliverable to bearer is in a very different posi- 
 tion, so far as the public is concerned, from the thief or finder 
 of goods. In the one case he is the ostensible owner, and in 
 
 iFriedlander v. Texaa (1888). 180 
 U. S. 428. See also Shaw v. Railroad 
 (IBttf), 101 U.& 5&7; Raleigh v. Lowe 
 (1897X 101 Ga. 820; 28 S. E. R. 867. 
 
 *Davis T. Bradley (1851), 94 Yt. 55; 
 NiKon v. Brown (1876), 67 N. H. 84. 
 
 124; 51 L. J. Cb. 634 
 
GOODS — DOCUMENTS OF TITLE. 
 
 849 
 
 ead^ople in the one case, while in the other he is not. And 
 
 h„! r .J ."""*"• "" "P'y » "■«' he is- that he mSrht 
 have kept his documents more seoorely, and at all evenl! mif ht 
 
 a^albretr' "/T' "' '"""" "' "»'™«™ indorse™ nTfn- 
 avadable to fr.,d«lent people, of whom, as he knew, there is 
 
 Farther light npon the subject in hand may be had bv refer- 
 ence U> the di«,„ssion of the reasons which underlie Ihe law as 
 
 a tbief or finder.' The same reasons are equally applicable to 
 
 n which the necessity for fraud or even voluntary action -o^ 
 the part of the estoppel-denier is discussed and denied and IJ 
 which the duty which one member of society ow^s .^^inoth ^ 
 S„!k *'"■»««"'".«.» » the physical world i, insisted upon" 
 Much will be found in these chapters to lead the mind to the 
 conclusion that for estoppel neither trend nor volunry I°t „n 
 IS essential; that Mr. Justice Ashhurst's dictum- 
 
 ought to be taken as a "broad and general principle- » that 
 the word "enables'; should receive no narrow signmcaton 
 and that the principles of the law of torts- '*"'"'"""'"• 
 
 "The whole modern law of neelijrence with if« «,o„„ a i 
 ''l^lV^'.^^'y ot fellow-oitizeJs'fo oS^^vf i^*t,TJi!l^ -c^SSnc? """ 
 
 others."' 
 
 forces the duty orfellow.oiti3'fon?Lrv.*V*' '""•"^ developments, en- 
 sons or property of others if hp&^n.l^iJlV".? ^*-H^^^ ^ith risk to the per- 
 
 sons or properVFof others KfdlsZrablf foJ?hl'^J''i^ '•"\*°.*»'« P^""" 
 ure of caution to guard against the risk™ -! "" °' * **''**'° ""eas- 
 
 are not limited to physical relations, but have equal applica. 
 tion to commercial intercourse. appiica 
 
 • Ex parte Banner (1878). I* R 2 
 Ch. 27a V ;.**«. * 
 
 »Ch. XXIV. 
 
 »ch.vni. 
 
 <Ch.V. 
 
 ' Ante, p. 827. 
 •Pollock on Torts, p. 89. 
 TDean v. MoCartj (1846), 8 U. a 
 Q. B. 44& 
 
CHAPTER XXIII. 
 
 OSTENSIBLE OWNERSHIP AND AGENCY — GOODS — LEQISL A- 
 
 TION. 
 
 i I I 
 
 Development of the luw has been due in very large measure 
 to the courts rather than to the legislatures; and the names of 
 Mansfield and Marshall remind the student that there are large 
 departments of our jnrisprudence which are luckily open to the 
 charge of having been "judge-made." We have now in hand^ 
 however, a subject which has for many years been a battle- 
 6*i\d upon which legislatures^ struggling against the courts, have 
 u ide many endeavors (although not of the happiest sort) to 
 conform the law to the necessities of mercantile usage. 
 
 The Questions and the Hules for Them.— Shortly stated the 
 questions at issue relate to the position of persons in whose 
 favor factors and others have made unauthorized disposition of 
 goods. In the preceding chapters we have seen that the courts,, 
 without the aid of statutes, worked out principles of estoppel 
 which seemed to be of sufficiently general import to include 
 factors and everybody else. Eecalling them, sufficiently for 
 present purposes, we may say that they are as follows: 
 
 1. Nemo oat quod non habet, 
 
 2. But that rule 
 
 "will certainly not apply where the owner of gocc?? has lent himself to> 
 accredit the title to another person." 
 
 3. "Where a principal has by his voluntary act placed an a^ent in suou 
 a situation that a person of ordinary prudence, conversant with business 
 usages and the nature of the particular business, is justified in presuming 
 that such agent i<is authority to ]))erform a particular act and therefore 
 deals with the agcr. '... ^he principal is estopped, as against such third person^ 
 from denying the h ^nt'i authority." 
 
 Utiles Wide I^no ' . " r Fartor Cases. — These rules, embrac- 
 ing as will be ob r? . ' t'^- t-.vo principles of ostensible owner- 
 ship and OS ten si. Vt »,_ ?)ii:*,y, plain' v cjiough cover the case of 
 factors; for factors whon they deal with the goods of other 
 
 ■nftnnlft mnct'. AitViAr ("W Ha t.ho nofoneihia nnrriAra nf thorn ni» 
 
 (2) the ostensible agents of the persons who do own them ; and 
 they are therefore within the principles provided for all such 
 
LEQISLA. 
 
 measure 
 names of 
 are large 
 ea to the 
 in hand, 
 a battle- 
 irts, have 
 ; sort) to 
 ). 
 
 tated the 
 in whose 
 ssition of 
 le courts^ 
 estoppel 
 > include 
 mily for 
 t: 
 
 liimself to 
 
 int in Buoii 
 h business 
 }resuming 
 therefore 
 [rd person, 
 
 embrac- 
 e owner- 
 ) case of 
 of other 
 
 tViom rki» 
 ; — 
 
 em; and 
 ' all such 
 
 OOODS — LEOWLATIOir. 
 
 851 
 
 sTr^r t?« 7 V ''"' '"^'' " "'"""^^ '""''^''^^ ^'itb posses- 
 sion or the rnd^cta of possession of the goods ig not a reu on for 
 
 dra^ving a distinction between factors and other agents for 
 
 (1) proprietors of sales-stables are also usually intrusted whh 
 
 horses that are to be sold (Many other such ca^m g t els , 
 
 be montmnod): and (2) the fact that an agent is intru^sted w th 
 
 w) IU8 oa ,e of the general principles. 
 The correctness of this latter statement may require a littlo 
 
 tfodr'u "' "'r' ^t^~^ to observe sLe di 
 tions. Let us consider the following cases • 
 
 titll\J?h ^'''°" n""""''"^ ""''^ '^^'^^^^^ °^ ^be documents of 
 
 2M w7 Tf' "^T'' '' " '^°'^^' ^"^ ^" "° other wav. 
 {2} Add to that case the circumstance that the owner of the 
 goods has m some special manner accredited the title of the 
 factor -- that is, made him appear to be the ou>ner. 
 
 3 The person intrusted is a merchant, and not a factor at all. 
 
 teniL ?• '''"J° "^°^' '°^' '^^ ^'ff^r^^^^ between os- 
 
 tensible ownership and ostensible agency. 
 
 1. Ca,e of a Factor.- K man is well known to be a factor 
 and not a trader; and nevertheless he is in possession of b lis 
 
 sessor of the bills appears to be not an owner, but an a Jnf 
 and he extent of his agency must, of course, be inquired int ! 
 
 T . . ^ '^''^ '^^t t^« ^^^to"" having the bill of ladin<. 
 
 Eii^orgh^^^ °^^^^^^^^^ ^^^-^' ''' — ^« ^^- of^L::3 
 
 " By the terras of the bill of lAtJinir *u j 
 
 V08 (the factor), and for anVthinS th**/«;.; ^\ ^JT^^ ^«" consigned to 
 of Vos; . . . ' but it is to Wial^to H« f hPP-^*'"^ *° *^? contrary to the use 
 a factor, that I cannot Jel/on thl J argument-r^ **'"' ''*' P"*^ ''" ""'^ 
 
 The case is one of known agency. The law governing, such 
 cases 3 general, and covers the case of factorsls of airother 
 agents. 
 
 2. Case of a Factor SpeciaUyAccr. uted.-Th^ man is a fac 
 
 ie bill of lading he is otherwise ac- 
 
 UUlUItlj 
 
 1 Martini v. Coles (1813), 1 M. & a 144 
 
852 
 
 OSTENSIBLE OWNERSHIP AND AOBNOY. 
 
 ii> 
 
 credited as owner. The law in this case is, or ought to be, 
 
 that 
 
 " where indeed a factor, by the assent of his principal, exhibits himself to 
 the world as owner, and by that means obtains credit as owner, the prin- 
 cipal will be liable who furnished the means." ^ 
 
 The case is one of ostehsible ownership. The law is clearly 
 of general application. That is, it would apply to persons 
 other than factors who were permitted by the owner of goods 
 to present the appearance of having title to them. 
 
 3. Case of a MercJiant—The man in possession of the bills 
 is known to be a merchant who trades in his own goods, and 
 does not usually act as a factor. He is now an ostensible 
 owner, although perhaps in truth a factor in the particular 
 case. He may, indeed, happen to be known to those dealing 
 with him as an agent, and if so he is, to them, an agent; but 
 to persons without special information he appears to be the 
 owner of the goods, and t^e true owner may be estopped as 
 against an innocent purchaser upon that account. The case is 
 one of ostensible ownership. The law relating to all such cases 
 is comprehensive, and includes all cases of ostensible ownership. 
 
 4. Case of a Factor and Merchant. — The man is both a factor 
 and a merchant. In such case possession of the goods cannot 
 indicate either ownership or agency specifically, but it does in- 
 dicate either one or the other alternatively — in other words, 
 you cannot tell whether the possessor is holding the goods 
 as a merchant or as a factor; you cannot say, therefore, whether 
 he is an ostensible owner or an ostensible agent; but he is one 
 or the other, and whichever he is the purchaser is safe. There 
 is no necessity here for any special provision in the law for the 
 case of factors. The law is quite general. 
 
 These distinctions are ot prime importance, but are hardly 
 ever alluded to,* although in other branches of the law they 
 are to some extent familiar. In fact, it is sometimes denied 
 that such distinctions exist. Were it but observed that intrust- 
 ing a factor with possession is but giving to an agent an ap- 
 pearance of authority to sell ; that that is but one of the many 
 ways in which such an appearance may arise; that the law 
 
 
 ar a tice than the others^ Lord Eillen- 
 
 147, 148; Kent's Com. (13th ed.), H, borough makes reference to the 
 
 900; Gray v. Agnew (1880), 95 111. 820. fourth in Martini v. Coles (1813), 1 M. 
 
 2 The second has received more no- & S. 140. 
 
GOODS — LEGISLATION. 353 
 
 Of estoppel applies to all cases of ostensihU o ' , . 
 appearance of agency to do 11^?.*^ ?"°^ ^*^** ''' «* 
 
 ences among the cases L nn. «f ,^°"«)' and that the differ- 
 
 constitutes Carrnce orarcv ri^ '"' ""^^^ " ^^ ^^^^ 
 then much of the difficuUy abouff . ^?''''^" °^ "««ff«)' 
 relating to them would Zapperr/'^ '"' *" ''^^ ^^«^"^«« 
 
 Eeview of the Leoislatioit. 
 legislation wl^ichTas bZ itZ' ""•'^'""■""essary all the 
 
 oiples of estoppel, pifc™^^ ^ti « m " T ,"•' ?"" ""- 
 
 'eave littlf to be S C ' heloiT" ^^ ^*"" "> V 
 methods to the la«r „, estoDn.1 «... reference of their 
 
 H not two, mistakes! the Scat;'?::"'' '•'"' """'« »-• 
 the purpose of rectifvinl .(, d , ^'^ principles. For 
 
 thenoeforwa,^ wTh CandTh ""'""™' '"'"™°"=d! "-d 
 
 principle, we haveltbZ but thrdr°T""' °""'°"' "' 
 amending statutes. dreariest interpretation of 
 
 ^"oiofs Could 2fot Pkdn^ — Th^ « ... 
 ing that a factor oonld n^t/e^ J^!^"" ""^"° ''^^ in deolar- 
 principlethisisthesiraplesroufsZ^^^ Upon 
 
 to be such) is in possestn^f goods hlT'" ^ '"«'- ("""'vn 
 Of co„«e not, if no such pow rCas give" o hCr? '"'='^' 
 he! But if by the custom of th. P • "' ^^""' <"»■''' 
 factors usually have such potlrM"!.'" "''"'"' *'" "V""^^ 
 possession of his go^s "„ snc^ » ' '"' """""!»' "-^ 8"''"? 
 
 denying the e.isCe ^utori'vTr'" "" ™'"P'*'' '-■" 
 
 -»- _n case Of :srttTtr^^^^^^ 
 -"dr„itrae^riXp=?---- 
 
 ;4GeaIV.,oh. 8a .._ 
 
 * 18 East. 3a *4 Camp. 251. 
 
 »1M. &ai4a •«M.&S. 24. 
 
 93 «See ch. XX VL 
 
i ! 
 
 I I 
 
 llil 
 
 iHi I I I. 
 
 354 OSTENSIBLE 0WNEB8H1P AND AGBNOT. 
 
 law is always arbitrarily enunciated as though it had been re- 
 vealed from heaven that « a factor cannot pledge. ' It so com- 
 menced in a case of which the following is the whole report j 
 and it 80 yet remains where statutes have not repealed it : 
 
 ^To'rd Mansfield indeed seems to have ignored this decision ;» 
 but other judges, although they have regretted H, and com- 
 plained of it, and even in a surreptitious way hmted that it was 
 misreported,' have devoutly followed it and declared it to be 
 too firmly settled for question. Said Lord EUenborough m 1811 : 
 
 "iSfr complaints may , bo foond all throagh the books ,• and 
 the solidity of the law is thus referred to in an Illmois case: 
 
 by decision of the courts."' ♦„««-♦;«. 
 
 And when evidence was offered to show a custom at a partic- 
 ular place for a factor to pledge, it was rejected as 
 •^ an aLmpt to set up a custom in opposition to a general principle of law, 
 which cannot be permitted. « , • ^«f «* f ha Uw 
 
 Sometimes indeed reasons are offered m support of the law. 
 
 '^'r :r a^w/^ i^ not permitted to pledge is that his au- 
 
 autliority."* 
 
 sQray v. Agnew (1880), 95 111. 820. 
 
 TNewbold v. Wright (1838). 4 
 Rawle (Pa.). 318. And see Meohem 
 on Agency, § 994. 
 
 SLausatt v. Lippinoott (1831). o 
 Serg. & R. (Pa.) 393. And see Kinder 
 V. Shaw (1807X 3 Mass. 397; Rodriguea 
 v.Heflferman(1821),5 Johns. Ch.(N.Y.) 
 417; Newbold v. Wright (1888), 4 
 Rawle (Pa.). 311; Gray v. Agnew 
 /igftOv 95 m, 819: Allen v. St. Louis 
 (1886). 120 U. S. 82. 
 >Mechem on Agency, § 994 
 
 1 Patterson v. Tash (1742), 2 Str. 
 
 1170. 
 
 2 Wright V. Campbell (1767), 4 Burr. 
 
 2047; 1 H. BL 628. 
 
 • Gibbs, C. J., told a reporter " that 
 this case was misreported, but that 
 having been acted upon it could not 
 now be shaken." Bonzi v. Stewart 
 (1842). 4 M. & a 807. 
 
 * Pickering v. Busk, 15 East, 44. 
 Ogee Hariim v. \/oic3 \i.^'.-ji, ^ i'»' 
 
 & 8. 145; Horn ▼. Baker (1858), 11 
 CaL 893; Story on Agency (9th ed.), 
 124, n. 
 
)een re- 
 30 corn- 
 report^ 
 it:^ 
 
 -er to sell 
 property ' 
 igh ther© 
 iry found 
 
 icision;* 
 ad corn- 
 it it was 
 it to be 
 in 1811: 
 
 pledger of 
 r for sale; 
 ever been 
 
 ks;' and 
 } case: 
 
 n England 
 by legislft- 
 abrogated 
 
 a partic- 
 iple of law^ 
 : the law. 
 
 hat his au- 
 
 I agent, and 
 }cope of hi» 
 
 , gs 111. 820. 
 b (1838), 4 
 lee Mechem 
 
 tt (1831), 6 
 1 see Kinder 
 
 ; Rodriguez 
 ns.Ch.(N.Y.) 
 ht (1888), 4 
 r V. Agnew 
 
 V. St Louis 
 
 §004. 
 
 GOODS — LEGISLATION. o-^ 
 
 "y cow; and Vv:£ral7„ tr"7„''°'-"''T'''''''-» 
 which often load to a onZt ''"™"°"' "' "'"ge and estoppel, 
 
 by the staple statmenttha^ra"?"^ '° *at arriviTat' 
 pal if he has no anthoritytT- "*"°'" "'"" ""^ P""- 
 
 consid'e^Ifo: i,^^'""^ " "^ '"'^''^ «"" «■« '™e point for 
 
 •hat will not he°p us V tt^ *.*" *" *" ?"•"'»'='«'■ »"' 
 
 to be a factor- horrn he nC ,\'T' "'"' *» ''"°»'" 
 do so? ^^ P'"*** '' •■« has no authority to 
 
 A Je •of:^rrrarpt'^inrtte'"' r ■^'""^^ -^ ">' 
 advance money on JX^t.i i^ v"""""" '""■ » '"'o' to 
 
 «.If in funds by ZSXl TTf *", ^J" """ "" ''"P'°8 "»- 
 
 tant to be indeanitei;^gr;d'°:„f .^ T"" ""k" '"" '"P"'" 
 English Parliament oLmen^ed'to s t^ ofTr ^"/ ""l'"^ 
 statute (1828) recites that ■ "'""^ '*"'* Tl"* 
 
 t.o?err:arnt:::rn^r"^ 
 
 mattera to which thev werTtn, ^ !f *" ''°' ""'"«'' «» ""e 
 
 -re of generarcharTc:rTndtl"at^ tl"^ ""'^ *" '"'•"^' ""' 
 intrusted with any Eoods.M*"^^'"*"' • • • 
 delivery thereof" Th.„nf '. ' ^ ""^ """o' lading for the 
 
 were tlken Tl alelLtTveT "'"°'"' ""^ """"'■' "«'' 
 of the law relatL to a "I ''^'"''"°° »' ">« "hole scope 
 
 th^«:..«.. princi^ir wtr:«rCntoi^-^^^^^^^^ 
 
 '"'*"*" «» out Of View, discussion centeriig-upo- sul^Z 
 
 *9thed., 12411. 
 
 »4 Qea IV., ch. Sa 
 
 »6GeaIV.,oh.04 
 
11 i 
 
 !!i 
 
 
 856 
 
 OSTBNSIBLB OWNERSHIP AND AGBNOT. 
 
 tions as, Who was a « person? »» When could he be said to be 
 "intrusted?"' For what could he pledge? etc' 
 
 With the humiliating acknowledgment that " much litigation- 
 has arisen on the construction of the said recited act;" and 
 while one of the extraordinary decisions upon its language was 
 on its way to the House of Lords,* Parliament again (1842) 
 intervened,' reciting that which the courts had declined to ac- 
 knowledge, namely, that 
 
 «' advances on the security of goods and merchandise have become aii usual 
 and ordinary course of business." 
 
 Again in 1877, and while another erroneous decision was 
 being considered in appeal,' further legislation was passed;^ 
 and still more recently (1889) all the previous acts were amended 
 and consolidated.' 
 
 Let us consider the main provisions of this last statute, ob- 
 serving their unprofitableness: 
 
 1. "Where a mercantile agent is, with the consent of the owner, in 
 Dossession of eoods, or of the doduments of title to goods, any sale, pledge 
 ot other disposition of the goods made by him when actmg m the frdimiry 
 course of business of a mercantile agent shall, subject to the provisions of 
 this act, be as valid as if he were expressly authorized by the owner of tbe 
 goods to make the same." » 
 Admittedly there was no necessity for this provision so far 
 • as it related to sales. The reason was that by the custom of 
 trade a mercantile agent intrusted with possession of goods 
 usually had power to sell; wherefore although in a particular 
 case there was no authority to sell, yet there was (owing to 
 the usage) an appearance of such power; and the owner was 
 estopped by the ostensible authority. No statute was neces- 
 sary for this result, for already the law had declared that: 
 
 " If the owner of goods had so acted as to clothe the seller or pledger with 
 apparent authority to sell or pledge, he was, at covxmon law, precluded as 
 
 1 Monk V. Whittenbury (1831), 2 B. 
 & Ad. 484. It is "difficult to say 
 precisely what is meant. " Janberry 
 V. Britten (1838), 5 So. 655; Wood v. 
 Rowoliife (1845), fi Ha. 191; Lamb v. 
 Attenborough (1863), 1 R & S. 831; 
 81 L. J. Q. B. 41; Baines v. Swainson 
 (1863), 4 B. & S. 270; 81 L. J. Q. B 
 281; Heyman v. Flewker (1868), 18 G 
 B. N. S. 519; 52 L. J. C. P. 183. 
 
 ' FiiiUips V. xium iio-iu;, u ^. ot tt . 
 572; 9 L. J. Ex. 823; Hatfield v. Phil- 
 lips (1842), 9 M. & W. 646; 12 CI. & F. 
 ii43; 11 L. J. Ex. 425; Bonzi v. Stew- 
 
 art (1843), 4 M. & G. 295; 11 L. J. G P. 
 228. 
 
 » Taylor v. Truman (1880), 1 Moody 
 & Mai. 453; Taylor v. Kymer (1832), 
 8 R & Ad. 880; 1 L. J. K. B. 114. 
 
 < Hatfield v. Phillips (1842), 9 M. & 
 W. 646; 13 CI. & F. 848. 
 
 »5&6Vio. (Imp.), ch. 89. 
 
 « Johnson v. Credit Fonder (1877). 
 8 C. P. D. 41; 47 L. J. C. P. 241. 
 
 7 40 jfc; 41 Vic. (Im>\V ch= 89= 
 
 8 52 & 58 Vic. (Imp.), oh. 45. 
 
 • The Factors Act, 52 & 58 Vic. 
 (Imp.), ch. 46, § 2 (1). And see Rev. 
 St Ont. ch. 150, § & 
 
GOODS — LEGISLATION. 35^ 
 
 Kfa^u'ary'L^^^^^ act on the faith of that ap- 
 
 ^sult as to then, waa the S L'ff t hfd nr/g^'nTr^'^' '^"'^ *" « 
 And the continffent "if" /of i-k^ u .7^' -°''- * 
 
 «o Kll them in hi, „„„ „,„, .,' "• P'"»<'fame authomjr from you to bim 
 
 parent right ofdisv^Zofpm^fuSiZ'Z^''^^" ^ ^ssumeThea^ 
 
 ««.Jt * .® principal uend his TOoimcSitv*^^ ^i '^^ authority. 
 
 nary business of the nerson to v^«!^/»^ "^ * P**<* ^^ere t is the ordi- 
 
 to goods, he may sell or pledge »„d give a gooTtiUe^notl ' 
 fme, ho.e,e, because of <«te„sib!, agefey. b„! b^a^' o" 
 
 »C3ole V. Northwestern (1875), L. 
 R. 10 G P. 863; 44 L. J. G p. 28a 
 See also per Gould, J., in Cartwright 
 V. Wilmerding (1862X 84 N. Y. 636. 
 
 'Pickerinv v. nnair /ioia> <* n . 
 
 8J See cases cited with this one in 
 'Lausatt v. Lippincott (1831X « 
 
 aSw«^^"-L'®'' ^«y'"'^- Pope 
 (1868X 45 Cold. (Tenn.) 416; Atlantic 
 
 V, Hunt (1897X 100 Tenn. 89; 48 a W 
 
 R 488; Lewenberg v. Hayes n8fl7i 
 
 HlMe.l04;8«Atl.R.469:"Heathv: 
 Stoddard (1808X 01 Me. 499; 40 Atl 
 R 547. ' ^*'' 
 
I J, 
 I i 
 
 ir > M 
 
 m 
 
 \ 
 
 i lit-; 
 
 I iljl 
 i if I 
 
 ii «1 T) - 
 
 I i •! 
 
 358 ' OSTSHMWJl'o^S™""" *™ *''™"' 
 
 ostensible ownership. ^<".^' '^-"-^''fZl^jf::^:'!, 
 the person who has possess,on >s neUher -J*"^' "° ^^,j„^^ 
 and is known (by the purchaser) to be m age" ^ 
 
 sort For the prinoiple is ''»''»y» *' .^"^.^'ller to sell 
 (whoever he may be) a person who »s«='"y J»» ^ ^ ,„t^ 
 
 no exception from us genoim v _•,.,!„» his instructions, 
 
 purchaser is aware that the agent « violating h« inst 
 Possibly it may be "a^ *at he was not then ««'^g " 
 S conrse'of business." But M^^^^^^^ 
 would apply to a case in wh ch *« P"™^^^^;;, „„„,d „ot 
 o. the violation of his '--''?^°''^l^Z,fl^lt\u^n^" 
 
 Z in which ^^^^:,;:^\:;^^Z'l^. as sugges. 
 
 tje':,rtruertJnr::T3ri.'direct^ '-»- ^-^ 
 
 mentioned. 
 
 a. ..Where a mevcantile apnt haj -i«J t^^ 
 
 in possession of 9?<>d^,foU^l'*^;SiThave been valid if the consent 
 
 pledge or other 3»?P09>*»o^7°!S?LjrhSanding the determination of the 
 Ead continued shalf be valid notw^^^^^^ 
 
 consent; provided that tJ«Pf^° Sent has been determined." i 
 the time thereof notice that the oo"*^"^ j^^ ^j^ that if 
 
 rnnstruinff one of the earlier acts the couris nau bai 
 
 poSr ':f the goods o^t"'— yeuircrser^oM 
 
 r rJbrwSXrthrrd^not apply.even though 
 
 "er had permitted the P.»»-;-,f ^^^w'p The 
 and the purchaser k-- -^-^ o jj« ^^^Zt^ this 
 merest glance outside the statute «»"'» jj„i^„t 
 
 Hh c^jt'trn^'^eTtirrwSeXfactorbad 
 
 r ^riblfa^'.^ seU; and this admitUd of but one 
 
 (Imp.), ch. 45, 8 » ^«)* , « « 
 
 SFuentes v. Montis (1808). I* R 8 
 
 ill ni! 
 
I »> 
 
 GOODS — LEGISU.TION. 
 
 359 
 
 answer. The debate, however, did not touch this point, but 
 was directed to an interpretation of the statute -tp ascertain- 
 ing whether the factor could still be said to be « intrusted » 
 with the possession. Hence the above clause. So great a 
 judge as Willes, J., acknowledged himself to be absolutely help- 
 
 pressed in the lanUage tKaruLd ffi?°THl"'^ J^^^^ «« «• 
 
 It is impossible to imagine what the result would have been 
 had Lord Mansfield been troubled with views of unconstitu- 
 tionality when he was, somewhat radically, amending "the 
 aw from time to time with reference to mercantile conven- 
 ience; and had he thrown upon Parliament, as to bills and 
 to flctor^"^^ "" ''^ '* ""^^ compelled to assume with reference 
 
 <x)n8entoftbeownM innoSnni»S.^'"j? **■" l»a^«g been, with the 
 any other documents oftffioth«^nS! ^^^ ^presented thereby or of 
 tioned documents shaU tnrtht «„ .^^^^5 P<»s«88ion of the first men- 
 the consent SthI owie/" » * ' ^""'^^ °' ^^'^ «*«*• ^ <*««°'«d to be with 
 
 The courts had held, in construing the statutes, that if an 
 agent had been intrusted with one document, and of his own 
 motion got it changed for another document, he was not in 
 possession of number two "with the consent of the owner" 
 and therefore that the act did not apply. For example, a 
 factor, being intrusted with a bill of lading, and the goods at 
 the termination of the voyage having gone to a warehouse, the 
 factor gave up the bill of lading and got a dock warrant. Upon 
 general principle the case is simple enough; but looking mi- 
 nutely at the statute the courts said that the factor was not 
 la possession of the dock warrant "with the consent of the 
 
 i Fuentes v. Montis (1868), L. R. 8 
 C. P. 28a 
 
 2 The language of Willes, J., is a 
 Temarkable illustration of the truth 
 of Mr. Markby's remark (Elements 
 of Law, 4th ed.. § 93) : " Well estab- 
 lished as the practice of the judges 
 making the law has now become in 
 
 England, it is not easy to reconcile 
 ourselves to the notion when the 
 practice is brought under our obser- 
 vation." 
 
 •The Factors Act, 88 & 68 Vic. 
 St. Ont, ch. 160, § 4 
 
860 
 
 OSTENSIBtB OWSTEBSHIP AND AOBNOT. 
 
 !ii 
 
 • :i 
 
 -I : 
 
 ml ' 
 
 I, I 
 
 owner!" » While one of such decisions was on its way to the 
 House of Lords, Parliament interposed with the above clause .» 
 The courts had also held that if a factor had deposited cer- 
 tain warrants as security for an advance, and had afterwards 
 substituted other warrants as security for the same advance, 
 the case was not within the statutes, because no advance had 
 been made upon the second set of warrants.' The above clause, 
 in conjunction with another, corrected that anomaly. Atten- 
 tion to the principles of estoppel would have led to contrary 
 decisions in these cases and rendered appeal to Parliament un- 
 necessary. 
 
 4. 'Where the owner of goods has given possession of the goods to an* 
 other person for the purpose of consignment or sale, or has shipped tne 
 goods in the name of another person, and the consignee of the goods ha» 
 not had notice that such person is not the owner of thfe .goods, the con- 
 sienee shall, in respect of advances made to or for the use of such person^ 
 have the same lien on the goods as if such person were the owner of the 
 goods, and may transfer any such lien to another person. 
 
 The statute is not now dealing with goods intrusted to "a 
 mercantile agent," but with all cases of agency. The clause 
 is badly drawn. It provides that if possession of goods be 
 given to another person with instructions to sell, then " the 
 consignee" shall have a lien for advances. That is to say, if I 
 give possession of my horse to an agent to sell, and he mort^ 
 gaged the horse, I would not be bound; but if my agent were 
 to consign him to somebody and get advances on him, I would 
 be bound. Estoppel would have nothing to say to either case, 
 for it is one simply of no authority to pledge and no appear- 
 ance of such authority. Estoppel would agree to the provisions- 
 (1) that if possession be given " for the purpose of consignment " 
 (in the name of the person intrusted), or (2) if the owner " has 
 shipped the goods in the name of another person," then the 
 assignee shall have a lien for advances; for in such cases there 
 is, with the assent of the owner, ostensible ownership in tho 
 person intrusted. But estoppel would of course draw no dis- 
 tinction between the case of the "consignee," and any other 
 person being misled by the appearance of ownership; nor would 
 
 •Bonzi V. Stewart (1842), 4 M. & O. 
 295; 11 L. J. C. P. 228. 
 *The Factors Act. 62 & 68 Vic 
 And ses Bev^ St^ 
 
 12 CL & F. 848; 11 I* J. Ex. 424 ' Ont, ch. 150, § U. 
 35&6yic,ch.89, §4 
 
 » Close V. Holmes (1887X 2 Moody 
 & R. 22; Phillips v. Hutb (1840), 8 
 M. & W. 572; 9 L. J. Ex. 883; Hatr 
 
GOODS — LEOISLA'nON. 
 
 861 
 
 ((, 
 
 it say that the consignee should be protected "in respect of 
 advances" and should not be protected did he buy, the goods 
 The case being one of ostensible ownership, it is immaterial 
 who the person is that acquires an interest in them or what 
 the nature of ♦hat interest may bev 
 
 ♦h/;^^''®™ ? JJf"5° '^'""^ *<'W «<xxJ« continues or is ill Dossesiiion of 
 
 t£ «me." f* "P'*"'y authorized by the^owner of thf gS^s to iTaK 
 The courts had held that if a vendor sold goods but retained 
 
 the documents of title to them, a subsequent sale bv the same 
 
 vendor to another purchaser passed nothing;' and'before the 
 case could be heard in appeal Parliament declared otherwise 
 
 by the adoption of the above clause.* 
 
 But the enactment went beyond the case, and raised further 
 difficulty. It applies not only to a case in which a vendor re- 
 tams the documents of title and so misleads a subsequent pur- 
 chaser, but to one in which the vendor retains "possession of 
 the goods." 
 
 Now distinguish: (1) A merchant sells goods but retains 
 possession of them in his warehouse and resells them; the first 
 purchaser ought to lose, for possession under such circum- 
 stances indicates either ownership or authority to sell.* (2) I 
 buy from a farmer a horse, pay him and take a bill of sale of 
 him, and the farmer agrees to send him to my house, but in- 
 stead of doing so resells him. Apart from any local rer^istry 
 acts I am not estopped, because mere possession under such cir- 
 cumstances is not ostensible ownership.' (3) But suppose that 
 the second purchaser is some one who has previously known 
 that the farmer was the owner of the horse, and relied upon 
 such knowledge and possession as indicative of the continua- 
 tion of the title? 
 
 Itt the United States it has been broadly asserted that 
 •' when thesame thingis sold to two diflferent parties, by eontraots equally 
 
 >The Factors Act. 82 & 58 Via "Johnson v. Credit (1877). 2 C P 
 anip.;. ex^ .0. p 3; Sale of Uoods Act. D. 324; 8 id. 82; 47 L. J. a P. 224 ' 
 
 JS V- !""• ?Ti *'•'• '*' § *^ ^'>' '^ * 41 Vic. (Imp.;, oh. 89. § a 
 69Via(MaaXch.25,§a4(l> *Ante,p.m. ^ 
 
 •Ante, Tp. 297. 
 

 I! 
 
 I! 
 
 I ill' 
 
 i 'i! 
 
 I 
 
 hi,; 
 
 868 
 
 OSTBNSIBIJ? OWNERSHIP AND AOBNCT. 
 
 valid, and the second vendee is without notice of the first sale, he who 
 first obtains possession is entitled to the property."' 
 
 "It is tlib <lootrine of Shaw v. Levy, 17 8. & R 99, which remains un- 
 phaken in this state, that if a vendee allow a vendor to remain in posses- 
 sion, or after a formal delivery immediately restore the possession to him, 
 and he afterwards sell and deliver the goods to a bona fide purchaser for 
 value without notice of the prior sale, such purchaser is entitled to the 
 goods as against the first vendee and all claiming under him. * 
 
 The general principle is recognized that 
 "allowing a person, therefore, to have actual possession of chattels, unless 
 there is some other fact connected with it, is not an act which holds him 
 out to the public as owner, or as authorized to sell it as his own. Ihe 
 doctrine ot caveat emptor, as to any title the purchaser may acquire, ap- 
 plies Brown v. Wilmerding, 6 Duer, 225. But when the possession re- 
 mains in the original owner or after a formal delivery it is restored with- 
 out any notorious break in the continuity of it under a secret understand- 
 ine or agreement with him as servant, agent or bailee, this is an element 
 which makes a very important difference in the case. That inquiry which 
 the party dealing with the possessor is bound to make, and whicr. the law 
 presumes him to make, leads him back to the original title, and thus his 
 dilisrenoe will only avail to confirm the deception. The vendee having ac- 
 quired possession under his purchase must have enjoyed it as long and m 
 such a manner as to show that the delivery to him was not merely formal 
 or colorable, before he can safely transfer it back to the vendor. Breck- 
 enridge v. Anderson, 8 J. J. Marshall, 714; Jarvis v. Davis, 14 B. Monroe, 
 529; Stevens v. Irwin, 15 CaL 503." 
 
 The law thus stated wouM lose something of its arbitrary 
 appearance if it were stated in terms of estoppel. The first 
 quoted rule, that, as between two purchasers, he who first gcti 
 possession has the better title, appears at first view to be as 
 simply dogmatic as the rule which gives to the legal esUte the 
 determining faculty; and th« objection to the last qi^otation is 
 that its reasons apply as well to a case in which the second pur- 
 chaser was misled by the ostensible title of the common vendor 
 as to one in which he was not. 
 
 A pi'iori one would say that as between two purchasers he 
 has the title who alone acquired it — that is to say, the first of 
 them; and that if any one else obtained possession (whether he 
 be called a second purchaser or not is immaterial) he cannot 
 have the title, but the possession merely. To this let us add 
 that where the first purchaser "has lent himself to accredit the 
 title" of his vendor so "as to mislead" the second purchaser 
 « into the belief that the person dealing with the property had 
 authority to do so," the first purchaser will be estopped from 
 setting up the facts. 
 
 1 Winslow V. Leonard (1854), 26 Pa. 
 Sts 18. And see.Lanfear v. Summer 
 (1831), 17 MASS. 118; Brown v. Pierce 
 (1867), 97 Mass. 46; People's Bank v. 
 Cayley (1880), 92 Pa. St 627; Cum- 
 
 mings ▼. Oilman (1897), 90 Me. 624; 
 88 Atl. R 58a 
 
 » Davis v. Bigler (1869). 62 Pa.. St. 
 247. And see Webster v. Peck (1868X 
 81 Conn. 495. And see a note in ths 
 Harvard Law Rev., vol. 11. !>• 41& 
 
GOODS — LBGI8LATI0N. 
 
 B68 
 
 who 
 
 The only question then is whether the first purchaser by 
 leaving his vendor in possession, has accredited the title of the 
 vendor, and so misled the second purchaser. 
 
 In discussing this point it may be said, on the one hand, that 
 possession is not evidence of the vendor's title; that he may be 
 a thief, or a borrower, or a bailee of any description; that for 
 this reason no faith ought to be placed upon possession as evi- 
 dence of title, and that tne second purchaser, therefore, cannot 
 say that he was deceived by it. 
 
 Upon the other hand there is much in the suggestion that pos- 
 session, if no evidence of title, is at all events a starting point 
 for inquiry as to title; that ordinarily a vendor is asked as to 
 his predecessors in title; that in this way investigation may 
 begin; and that if the vendor has been left in possession by the 
 first purchaser, and has thus been enabled to vouch his original 
 title and not that through his vendee, any chance of discover- 
 ing the first purchaser's interest is taken away. 
 
 Such doctrine is applicable, however, only irr oases in which 
 inquiry ps to title has, in fact, beea undertaken and has been 
 vitiated by the continued possession; and not in cases in which 
 It might have been vitiated had such inquiry been made by the 
 second purchaser as « the law presumes him to make." Estop- 
 pel applies only in cases in which the estoppel-asserter has been 
 injuriously affected by the act complained of, not to those in 
 which he would have been injured if something else had oc- 
 curred than that which really happened. 
 
 The clause in the Factors Act appears to ignore all such con- 
 ditions as those suggested. It seems to apply to everv case of 
 a vendor being left in possession, whether the fact had any 
 bearing upon the second purchaser's action or not. It is hardly 
 too much to say, however, that the decisions have amended the 
 statute. 
 
 " There is no inflexible rule of law that because a man who was once th« 
 owner of goods and has sold them remains in posseSon of thim he must 
 therefore be held to be the reputed owner. The statute does nSt'sav Siat 
 If he remains ,n possession with the reputation of omie^ma^und^ 
 those ctreutnatances which create a r^»>re8eniation ofomSiS^theX^ 
 property will pass to his assignees; but it is alwa^TnnestW n7^f«^* 
 whether or not the circumstances are such L to cKerafreJrlL^ 
 
 J ^?^ ^'^ Selborne in Ex parte Bk. 51. See Re Gaetz v. Jones a8981. 
 Watkins(1878).L.R8Ch.628;43I. J. 1 Q. R 787; 67 L. J. Q. R W7. 
 
II ifl 
 i' 
 
 1 
 
 864 
 
 08TKN8IBU OWNiaSHIP AND AOKNOY. 
 
 The aroendmout consists in adding after "oontinuec or is in 
 possession of t!u goods," the words " with the repuuition of 
 ownership and under those circumstances which create a rep- 
 resentation of ownership."' This robs the statute of much of 
 its purely arbitrary and mechanical character. One further 
 amendment and it would be reduced to the reasonableness of 
 the law of estoppel, namely, that the second purchaser should 
 have been misled by the "misrepresentation of ownership." 
 
 Possibly this is implied in Lord Selborne's language. If so, 
 then the statute merely reflects a single instance of the law 
 of estoppel, and is misleading because by indicating that if a 
 vend^rr be allowed by a vendee to mislead people by ostensible 
 ownership, then the vendee ought to lose; whereas the law is 
 general and applies to everybody — being a vendee does not in- 
 crease or decrease a person's duty of "an appropriate measure 
 of prudence" for the welfare of others.' 
 
 a " Where a oerson having bought or agreed to buy good* obtains with 
 th« Consent of th^SlerposS^Xn of the goods, or of the documents of 
 
 owner." • * ^t. i * t* « 
 
 This case is to some extent the converse of the last. It a 
 purchaser may be estopped by leaving the documents of title 
 in the hands ot his vendor; so also may a vendor be estopped 
 by handing them over prematurely to the purchaser. Again, 
 the clause was passed to overcome a decision which the mer- 
 cantile community could not understand. An owner of goods 
 shipped them in two quantities but under one bill of lading. 
 The owner's agent sold the goods to two different persons ; 
 gave one of them (A.) the bill of lading; and got that purchaser 
 to give to the other (B.) a delivery order for his part of the 
 goods. B. resold his goods to X. on time, and handed him the 
 delivery order; X. pledged the goods, and passed on the order. 
 
 1 The phrase " reputation of owner- 
 ship " was borrowed no doubt from 
 the reputed ownership clauses of 
 the bankruptcy acts. See ch. XXL 
 
 2 See a note in Harvard Law Rev., 
 vol U, p. 4181 
 
 • The Factors Act, 68 & 68 Via 
 (Imp.), ch. 45, § 9; The Sale of Goods 
 Act, 56 & 67 Vic. (Imp.), ch. 71, g 25 
 (3); 5H Vio. (ioan.;, cu. sw, a <^ ^«';» 
 
O0OD8 — LB0I8LAT10N. 
 
 865 
 
 )r is in 
 iion of 
 » a rep- 
 luch of 
 further 
 ness of 
 shoald 
 lip." 
 
 If so» 
 the law 
 [lat if a 
 tensiblo 
 e law is 
 3 not in- 
 neasure 
 
 nins with 
 ments of 
 I mercan- 
 nder any 
 t for sale, 
 effect as 
 agent in 
 nt of the 
 
 St. If a 
 i of title 
 estopped 
 Again, 
 the mer- 
 of goods 
 )f lading, 
 persons; 
 )arcbaser 
 rt of the 
 1 him the 
 ihe order. 
 
 & 53 Vic. 
 le of Goods 
 eh. 71, g 25 
 
 a nt /a\ 
 
 The p.jdgee would now seem to be safe; but it was held that 
 B. could stop in trangitu because the goods were being dealt 
 with under a delivery orner only, and not under a bill of lad- 
 ing.' Estoppel would of course not recognize the distinction. 
 The baneful effect of the legislation has recently been very 
 forcibly illustrated. But for it a case of this kind would be 
 free from all difficulty: A vendor sent to his purchaser a bill 
 of lading, and also for acceptance a bill of exchange for the 
 price of the goods; the purchaser ought to have returned the 
 bill of lading, unless he accepted and returned the draft; he did 
 neither, but wrongfully transferred the bill of lading to an in- 
 nocent purchaser. From the standpoint of estoppel the case is 
 perfectly clear, for the vendor has accredited the title of the 
 purchaser. Arguing, however, from legislation, a contrary re- 
 sult was at tirst arrived at, the case not being thought to be 
 one " where a person having bought or agreed to buy goods 
 obtains with the consent of the seller possession of the docu- 
 ments of title." Upon appeal a diflFerent view of the statute 
 was taken.' 
 
 The clause moreover goes far beyond that which was in- 
 tended, and is open to the criticisms above applied to the pre- 
 ceding paragraph of the statute. The principal of its unex- 
 pected results has been its effect upon hire and sale agreements— 
 those contracts which contemplate an eventual sale, but for 
 security for payment provide that meanwhile the property in 
 the goods is to remain in the vendor. Id such cases a honajide 
 purchaser from the purchaser (if in possession) will be secured.* 
 If, however, the effect of the agreement is, not that the pur- 
 chaser shall be boundto buy, but merely that he shall have an 
 option to purchase, the act does not apply.* 
 
 7. "Where a document of title to goods has been lawfully transferred 
 to a person as a buyer or owner of goods, and that person transfers the 
 document to a person who takes the document in good faith and for valu- 
 able consideration, the last mentioned transfer shall have the same elfect 
 
 1 Jenkyns v. Usborne (1844), 8 8a 
 N. a 505; 18 L. J. C. P. 196. Spear v. 
 Travers (1815), 4 Camp. 261, was not 
 referred ta 
 
 *Cahn v. Pocketts (1898), 3 Q. R 
 
 VS., tit ij. a. ^. 13, u^a; (loay; l \^ a, 
 68 L. J. Q. a 615. 
 »Lee V. Butler (1893), 3 Q. R 818; 
 
 62 L. J. Q. B. 591. The law would be 
 otherwise were there no statute. 
 See ante, p. 297, 8. 
 
 * Helly V. Mathews (1894), 2 Q. B. 
 272; (1895) A. C. 471; 63 L. J. Q. B. 
 577; 64 id. 405. And see Pyne v. Wil- 
 son (1895), 1 Q. B. 658; (1895) 8 Q. R 
 587; 64 L. J. Q. Bu 82a 
 
366 
 
 08TKN8IBtE OWNERSHIP AND AGENCY. 
 
 '*'Thi8 clause was passed because of the distinction above al- 
 luded to between a bill of lading and a delivery order It was 
 said that a vendor retained his lien although he had handed 
 over a document of title (other than a bill of lading), and had , 
 thus apparently transferred the complete title. His right, it . 
 was said, remained until possession of the goods had been taken 
 by the innocent purchaser.' The idea was that the indorse- 
 ment of a bill of lading passed the title to the goods but that 
 the transfer of other documents of title did not, and therefore 
 the necessity for possession in order to vest the right to stop 
 in tramitu. As has already been seen, ^^o^^^j;' f-'^Pf J. ^^ 
 fioods passes by contract, and indorsements of bills of ladmg 
 and other documents have no effect upon it. Estoppel, too, as 
 has been said, makes no distinction among those documents of 
 title which in the mercantile world are taken as indicative of 
 
 ^'^^mTnary.- Reviewing all the sections above quoted, we 
 find that the general principle of estoppel by ostensible owner- 
 ship and ostensible agency is cut down to seven very sharply 
 defined cases selected from infinity, because by merest chance 
 they had happened to present themselves in more than usually 
 conspicuous form — that is, in notable law-suits: 
 
 1 The case of a « mercantile agent" being m possession of 
 goods or the documents of title to goods, with the consent of 
 
 the owner. . . . , . 
 
 2. Or without that consent, if it at one time existed and its 
 
 cessation was unknown. 
 
 3 Or if there had been consent to the possession of previous 
 documents, by means of which the later ones were obtained. 
 
 4 The case of goods given to "another person" (not neces- 
 sarily a mercantile agent) for consignment or sale; and the 
 case of goods shipped in the name of another person. In such 
 cases a "consignee's" advances are protected. 
 
 6. The case of a vendor remaining in possession of the goods 
 or of the documents of title. 
 
 iThe Factors Act, 62 & 58 Vic. 
 (Imp.), oh. 45^ 8 10. 
 
 « Jenkyns v. Usborne (1844), 8 So. 
 N. a 505; 13 L. J. a P. 196. 
 Mnfe, p. a-'2. 
 
GOODS — LEGISLATION. 
 
 867 
 
 as the 
 In trartr 
 
 )ve al- 
 It waa 
 tanded 
 id bad , 
 ight, it . 
 1 taken 
 adorse- 
 at that 
 erefore 
 to stop 
 erty in 
 lading 
 , too, as 
 lents of 
 Eitive of 
 
 (ted, w© 
 
 owner- 
 
 sharply 
 
 ; chance 
 
 usually 
 
 ssion of 
 nsent of 
 
 1 and its 
 
 previous 
 
 rained. 
 
 ot neces- 
 and the 
 In such 
 
 he goods 
 
 1844), 8 So. 
 
 6. The case of a purchaser obtaining possession of the goods 
 or the documents prematurely. 
 
 7. The case of a document of title lawfully transferred to a 
 person as a buyer or owner of the goods, who transfers to an- 
 other. In such case the right to stop in transitu is gone. 
 
 Next notice that the first three of these cases are instances 
 of ostensible agency, and the last four of ostensible ownership, 
 although the draftsman did not so observe; for in numbers 5 
 and 6 it is provided that the transaction is to have the same 
 effect as if the ostensible owner were in reality an agent, in- 
 stead of in reality the owner. 
 
 Lastly, note that the result of the provisions is not in all 
 cases the same. While in numbers 1, 2, 3, 6 and 6 an innocent 
 person who acquires any interest, whether by " sale, pledge or 
 other disposition," is protected, yet in the fourth case the pro- 
 tection aiforded is only "in respect of advances;" and in the 
 seventh the interests excluded are only " any vendor's lien or 
 right of stoppage ixt, transitu." 
 
 The partial and incongruous character of the legislation is 
 very apparent. A vendor of goods may be estopped, although 
 another person who had misled in precisely similar fashion 
 would not be; a purchaser may be estopped if he permit his 
 vendor to have the documents of title, but will not be estopped 
 if he give them to anybody else; an owner will be estopped if 
 he ship the goods in the name of another person, as against the 
 consignee and "in respect of advances," but he will not be 
 estopped as to other persons, or if the consignee h&ve purchased 
 the goods; where a document of title has been transferred 
 " to a person as a buyer or owner of the goods," the transferror 
 will be estopped as against an innocent purchaser in respect of 
 his vendor's lien or right to stop in transitu, but not in respect 
 of other claims to the goods. 
 
 But the principal objection to the acts is that in so far as 
 they accord with the principles of estoppel they are not only 
 unnecessary but injurious (for they divert attention from those 
 principles and fix it upon interpretation of the language of 
 statutes); and so far as they conflict with the law of estoppel 
 
 fhotr ava rjininna fnm tLon nnn »U<<.>. .^~~..»_ i._j U-'- ; •-i- 
 
 and unamenable to reason. 
 
i! 
 
 1 
 
 I 
 ill ill 
 
 ill! 
 
 368 
 
 ostensibi^ ownership and agbnot. 
 American Legislation. 
 
 The early English legislation, with certain alterations, passed 
 into the statute books of several of the states of the TJnion.V 
 But the confusion wrought in England was largely obviated 
 by (among other methods) a most fortunate, or most courage- 
 ous, misinterpretation of the acts. 
 
 The New York statute of 1830 provided that 
 "every factor or other agent intrusted with the possession . . . shall 
 be deemed to he the true owner thereof, so far as to give validity to any con- 
 tract made by such agent with any other person for the sale or disposition 
 of the whole or any part of such merchandise, for any money advanced, 
 or negotiable instrument, or other obligation in writing, given by such 
 other person on the faith thereof." 
 
 And the words "on the faith thereof" were held to mean on 
 the faith of the agent being the true owner, and not on the 
 faith of the possession of the goods or document of title." This 
 construction was adopted by the Ohio courts.* 
 
 The effect of these decisions was to bring the statutes into 
 complete harmony with the law of estoppel. For thus con- 
 strued, they really enact that when factors and other agents 
 are permitted by the true owner to hold themselves out as 
 owners of the goods, purchasers and others may claim the bene- 
 fit of estoppel. 
 
 The other legislatures which passed Factors Acts do not 
 seem to have encountered the opposition from the courts which 
 was presented by the judges in England; and upon the whole 
 it may be said that the development of the American law has 
 been but very slightly affected by statutory provisions. The 
 cases touching those enactments, therefore, do not require to be 
 separated from those relating to the general law, and are for 
 that reason not specially noted in this chapter. 
 
 An exception perhaps should be made from this statement 
 with reference to the " doctrine " that a factor cannot pledge, 
 the cases upon which have been referred to in the foregoing 
 
 1 See Kentucky, 1880, May 5; Maine, 
 Rev. St 1883, ch. 81; Maryland, Rev. 
 Code, 1870, ch. 34; Massachusetts, 
 Pub. St 1883, oh. 71 : New York, 1830, 
 ch. 179; Ohio, 1880. Rev. St, § 8214, ff ; 
 Pennsylvanja, Factors, 2; Rhode Isi- 
 and. Pub. St 1883, oh. 186 j Wiscon- 
 
 sin, Rev. St 1878, § 8345. See Stim- 
 Bon's Am. St Law (2d ed.), §§ 4880- 
 4888. 
 
 i Stevens ▼. Wilson (1844), 6 Hill, 
 612; 8 Denio, 473. 
 
 iOieveiand v. Shoeman (1883), 40 
 Ohio St 170. 
 
GOODS — LEGISLATION. ggj 
 
 The Cahforoian judges showed n^f J k?. ? «>M,d«ati„„.<i 
 haps timely temeritv i^ !k r u- '""* dexterity- per- 
 
 fflcktion which HmUe7?.?"? "'«"'J<«W"e" by aqLl- 
 
 24 "* 
 
! i 
 
 ! ill 1 1 i 
 
 ! 1 1 ' 
 
 i 11' I ' 
 
 1 !!■ ! 
 
 .jl ■ 
 ii 
 
 ii !i 
 
 r*' 
 
 CHAPTER XXIT. ^ 
 
 I„ the application of estoppel to negotiable instpnmente d.ffl- 
 
 ,o perplexing ?"t'°^J^'^lCtSf "Cmerohant." Om- 
 -^^irntr^fi:!: t. a« wiU, .na a. 
 
 ^f^te-Sntfrto'the meaning „. the term "negotiable." 
 I S^;n«ption of the pH-iples of t^e 'aw o^estoppel 
 
 -pfrt^r^h^'ifriftbiur^^^^^^^ 
 
 property? wny is » vua ^^^^ ^^^ ^^^ 
 
 Mr. Justice Byles, in Swan v. N. B. A, saia . 
 
 . l(l863)2H.&ai84 And see 88 L. J. Ex. 277. 
 
CnoSES IS ACTION. 
 
 871 
 
 cnoN— 
 
 nts diffi- 
 
 is uncrit- 
 ilies. As 
 existence 
 ipotence^ 
 oents are 
 t.» Om- 
 l, and are 
 
 srotiable." 
 ioppel. 
 
 is it that 
 r can pass 
 to chattel 
 
 an agent 
 the law.i* 
 man write 
 over it, he 
 would not 
 
 I questions 
 I law mer- 
 flaw. All 
 I, which, as. 
 got there," 
 L law, is ex- 
 rrent treat- 
 
 td« or become 
 konest acquis!- 
 
 ever, declares that he did say a ° „d 2^7 T'"'""' '"•"^■ 
 
 m-t. This comes out vepv cLrirln ,k t n °°''*°' '""^' »»''- 
 
 Bamn Pollock; and eseoppeUs 1«L^^^^^ 
 
 „ "Ias«ch.o«« theaoceBtorl.iK! ? '''°"' operation: 
 
 the KMon for Ms £ nM K«» Ifff *" ».<»»« Afe holder . ,„^ 
 
 role « to .utKy Mniotfc: J? "« Present cMe 'f .'" " l'|fi"';'»'- "■• 
 
 well knowS JrinciX S^^T^™'^ '^e aocepffis not l^hi^^"^"*'**" ^« 
 * This passacre having k„ ,^ , . '' 
 
 »Thi8 passage having been cited to 
 Mr. Justice Byles in a subsequent 
 
 He P '.I"- ''°^'""°« (^««^^ ^ 
 
 818). he said: "If that be right it 
 case of a comnloto in.*. . ., 
 
 can hardly be appUcab^7oT case 
 where a man's signature has Cn 
 
 titnTold''*'""'"'^'^''^^--" 
 
 SlA^T'^J- ^»"«»taffe (1780X Doug. 
 (IHBO), 6 Man. R. 343. 
 
 Ex^n"?n? 7' ^^"t^orth (1880). 6 
 
 Ex. D. 104; 49 L J. Ex 661. See in 
 the same sense. Marsfnn . a..." 
 
 0841). S M. & W. 504; Foster vfMc! 
 Kinnon (1869X L R 4 C. P 713.^ 
 
 L.J.CP.8i6;BeohuanalandvW 
 2-(1898X8Q.a670;67I.j:<rB. 
 
;"! I 
 
 ill 
 
 i 
 
 liil 
 
 Ml 'I" 
 
 572 OSTENSIBLE 0WNEK8HIP AND AGENCY. 
 
 and transactions Within its T^'^^l^n ^eB^^^fnMj^vM^^^^ 
 L if made with title and a^^J^S^onwha^ver. Tall along implies a 
 estoppel It. vaHd'ites no transaction ^"Jf 7J;bidden for equitable rea- 
 transaction itself invalid, and a ^J«o° ^J^J a different way. founded upon 
 sons to set up that invahdity^. It operates in a^m . ^^ ^^^^^ ^^ ^ 
 
 principles of equity and fa?"»f8^j°iX8unoort8 title in negotiable instru- 
 Wider 'basis than, the pnncple J^^ich supports title K^^ ^^^ ^ 
 
 SeroVtJalr^Jurn^oVc^^fl^^^^^^^ »-e become negc 
 
 tiable by the demands of commerce. 
 Williams J., put the matter in this way: 
 
 ^m™.» ?h.t such '■rf''^^A'SZTZ''^l^.'^^^«^'^' 
 
 that thi. may not talmpeded^tlsrequMiKUiatio against those who by 
 
 Sa°&'»V.r».*hSf ^i^^tS ffLT^« oi ,uoh Currency.". 
 
 Tn the oDinion of Lord Herschell, 
 nhegenerKeonawisthat Where ^^^^^^^ 
 
 of another from one who is d/a»»°8.f'i\£™er even though full value 
 frue.owner.notitleisacquir^da^^^^^^^^ 
 
 be given, and the. property °« **'f®,° , thrDertJon taking it can show that 
 titli thereto is being obtained; unU^^s the pmont^^^ 16 ^^^^ ^^^ 
 the true owner has so acted as to misleaa mm into i ^^ ^ ^^^^^ 
 
 son dealing with the PJ°1P"*y J*l^«S»?ei agai^^^^ true owner. There 
 fA^eSMS aeKra^^^^^ case of negotiable instru- 
 
 "l^rnally, Mr. Bigelow, in his recent.work on Bills and Notes, 
 referring to transferees of them free from equities, says: 
 
 n^rrSirP^Sr speaks of the doctnne as 
 «a n^Uive exception to the ordinary principles of legal ownership. '» 
 Tnr,::r.-These quotations (1) bring the law m^^^^^^^^^^ 
 and the common law into sharp antagonism. "The law mer 
 ^hlt validates . . a transaction which the common law 
 "dlltvold;" (2) show that reconciliation has been at. 
 Tempted in some cases by the adoption of "^o^^^^^f/J 
 fiction," namely, imagined but non-existent pnncipal-and-agent 
 authority; (3) declare that the law of estoppel has nothing to 
 TwTh any such cases; and (4) support the application of 
 "the well-known principle that when o-e of two innocent per- 
 sons must suffer from the fraud of a third, the loss should be 
 borne by hi'n who enabled the third person to commit the 
 
 fraud." 
 
 iSwan v. N. B. A. (1863), 7 H. & N. 
 608; 81 L. J. Ex. 43«. 
 
 » Ingham v. Primrose (1859), TUB. 
 N. S. 86; a L» J. C. P. 295. 
 
 .d! ~. ^ T^n<1nn ^892^ A. C. 
 
 -OIUISIIUlll ■" •- 
 
 215; 61 L. J. Ch. 789. 
 
 * P. 206. And see p. 8. 
 
 i Pollock on Contraoto (6th ed.), 427. 
 And see p. 218. 
 
effectual 
 nciple of 
 ni plies a 
 ;able rea- 
 ded upon 
 ests OD a 
 le instru- 
 e exigen- 
 me nego- 
 
 I law mer- 
 J in order 
 for value 
 B who by 
 
 property 
 ■ity of the 
 full value 
 estionable 
 show that 
 at the per- 
 
 be shown 
 ler. There 
 Me instru- 
 
 id Notes, 
 
 ys: 
 
 lors and in 
 ty that af* 
 
 IS 
 
 3hip."» 
 
 merchant 
 
 law mer- 
 amon law 
 a been at- 
 ing like a 
 and-agent 
 lothing to 
 ication of 
 ocent per- 
 shoald be 
 ommit the 
 
 fl892>. A. C. 
 
 (bthed.),427. 
 
 CHOSE8 IN ACTION. 
 
 373 
 
 ; a that could again be said for so holding was that 
 
 tion IS founded on the nature of t hi fnlL"'''i'? ''*^ °°*''' ^"t the excep- 
 
 ike a bill of exchangl. S neS,tiaWe in?trZ!n'. '? I'if t^o". ^hich bein£ 
 
 lence of commerce TmsVirXwed to W« .n ""J^*^^* *^?°"** °o°^«^- 
 
 the ordinary principles of law."i **° ®*^®*'* «' variance with 
 
 The Law Merchant. 
 
 What then is this law merchant which opposes itself to th« 
 common law and dominates it? and whence'dU t col? A 
 a matter of fact, and not merely of phi^se, may we not even 
 ask whether there is a law of merchants, in an^y other sense 
 than there is a law of financiers or a law of tailors ?Fre^^^^^^^^ 
 use of the word has almost produced the impression Zta 
 there was a civil law and a canon law, so also ?here was some 
 where a "law merchant," of very peculiar autho^^ and sanC 
 tity; about which, however, it is now quite futile to inZe 
 and presumptuous to argue.' inquire 
 
 If the cnstom of merchants as to bills of exchan-^e was rec 
 ognized by the courts, so also has the custom of financL a 
 to the "negotiability" of bonds and scrips been re ognTed 
 but no one would think of referring to the "law financier'' in 
 speaking of that "negotiability." The custom of financfes Z 
 of social clubs or other organizations or coteries, is obr;ed 
 
 Llr. I' ^' '"' ^"^' ""' ^^^^"«« ^'^^ «"anci;rs or c ubs 
 enacted or had power to enact laws, but because it is with ref! 
 erenceto those customs that the parties have acted o con- 
 
 J Per Tindall, G J., in Jenkyns v. 
 
 dsborne (1844), 7 M. & G. 699; 13 L. 
 J. C. P. 196. See also Williams v. 
 Colonial Bank (1883). 38 Ch. D. 888; 
 61 L. J. Ch. 826; Bank of Batavia v 
 New York (1887), 106 N. Y. 145; 18 
 N. E. R. 43a As to tlie alleged an- 
 tagonism in oases of bills of ladinjr 
 see oh. XXIV. 
 
 2 In Blackburn on Sales (8d ed.). 
 817, it is said that "there is no part 
 of history of English law more ob- 
 scure than that connected with the 
 
 common maxim that the law mer- 
 chant is part of the law of the land. 
 In the earlier times it was not a part 
 of the common law as it is now, but 
 a concurrent and co-existent law ex- 
 forced by the power of ths realm, 
 but administered by its own courts 
 in the staple or else in the Star 
 Chamber." It js not suggested, how- 
 ever, that it is from precedents in 
 these courts that the modern law is 
 derived. 
 
111! 
 
 I 1 
 
 i 
 
 874 
 
 OSTBNSrBTK-OWNBRSHIP AND AOBNOT. 
 
 tracted ; and it is with reference to them, therefore, that rights 
 and liabilities ought to be adjusted. When these or an}^ other 
 customs obtain general acceptance by the community they then 
 pass into and for the first time become laws. Modus et con- 
 
 <ventio vincunt leges} 
 
 The rules respecting bills and notes are not traceable to any 
 foreign or extraneous body of laws, but have been derived from 
 the usages and customs of the people;' from whence also are 
 derived the main part of the whole body of the law. And it 
 would therefor^ be very extraordinary were we to find some 
 portion of our law in antagonism to other parts of it; for we 
 should then have to say either that one part of our usage was 
 out of harmony with the rest, or else that, in process of crys- 
 tallization into law, it had become so. The present v. nter begs 
 to subscribe to the following extracts rather than to those 
 
 which allege antagonism: 
 
 "Thi« phronolozical list of authorities tends to elucidate the manner in 
 
 °' De'scribing the law merchant, thus, as part of the general law 
 makes the assertion of antagonism much more difficult than if 
 it be thought of as some imported and despotic code to which 
 "the ordinary rules of the common law are made to bend. 
 We feel that reconciling principles between a part and the 
 
 «See Goodwin v. Robarts (1875), 
 L. R. 10 Ex. 846; 44 L. J. Ex. 162. In 
 Woodworth v. Bank (1831), 19 Johna 
 (N. Y.) 416, there is the following: 
 " The law merchant, says Maly nes in 
 the time of King James, is a cus- 
 tomary law approved by the author^ 
 ity of all kingdoms and common- 
 wealths, and not a law established 
 by the sovereignty of any one 
 prince." __ 
 
 • Dunlop V. Silver (IsOi), 5 u. 3. 
 App. 874, a most valuable exposition 
 of the early law. 
 
 4 Christian's note to 1 Bl. Com. 19. 
 
 1" Usage adopted by the courts, 
 having been thus the whole of the 
 so-called law merchant," per Cock, 
 burn, C. J., in Goodwin v. Robarts 
 (1876), L. R. 10 Ex. 8S3; 44 L. J. Ex. 
 165. Negotiability of bills is but an 
 example of that which Mr. Herbert 
 Spencer speaks when he says (Man v. 
 The State, 298): " One of the most fa- 
 miliar political truths is that, in the 
 Cfturss cf social evolutions, usage 
 precedes law; and that when usage 
 has been well established it becomes 
 law by receiving authoritative in- 
 dorsement and defined form." 
 
, rights 
 
 \r other 
 
 3y then 
 
 et con.' 
 
 to any 
 sd from 
 ilso are 
 And it 
 d some 
 for we 
 ige was 
 of crys- 
 ter begs 
 o those 
 
 aanner in 
 courts of 
 ws that it 
 law, but 
 ! coequal 
 
 onsuetudo 
 
 md. The 
 
 contracts. 
 
 marriage 
 
 lerai law 
 t than if 
 to which 
 ,o bend." 
 and the 
 
 irts (1875), 
 Sx. 168. In 
 ), 19 Johns, 
 following; 
 Malynes in 
 3, is a cus- 
 the author- 
 I common- 
 estabhshed 
 any one 
 
 jl), 5 u. 3. 
 ) exposition 
 
 Bl. Com. 75. 
 
 CnoSBS IN AOTTON. 
 
 878 
 
 Arhole must exist, unless indeed our jr ..->rudence is, so far an 
 absurdity. Let us return to antagonism at all ever^ts'only'? 
 barmonizmg efforts shall fail. ' ^ 
 
 ^Z^l wt? ''Z^^^^^^^^^^^- And let this meanwhile be an- 
 «wered: What custom of merchants was recognized by the 
 courts? A custom that the transferee could sue m his own 
 name? Ko; custom could not possibly affect that question, or 
 de^rmme that n equity he could, and at law he' couldlt 
 
 that a thief could pass a good title? No; there I no more 
 
 ^ebted to farme.^ for the law which declares that the purchaser 
 of land, taking the legal title, is not affected by equities or to 
 
 a ;r:"t/°H ''^ t"^"" *'^* *^« '''^''' ^ ls cTgi : 
 
 a good title by a sale m market overt. Then it must have been 
 thrlr M '^^*™"«f«'"e« acquired the legal title, and not 
 the equiteble only Once more, no; the merchants were not 
 sufficient y skilled in such abstruse matters as to draw a finely 
 <lividing hne among them. No custom then? Yes; this and 
 nothmg but this: The law finally and with much apprh nsio 
 
 7eZuTAlT '''' '™'"'^'°^^ promises-,rLises re- 
 deemable to third person-had by custom become an essential 
 requisite of commerce; and the courts thereupon set themselves 
 to develop law applicable to instruments of that kind, naming 
 them "negotiable » instruments. The simplicity of the law had 
 declared that there could not be a contract redeemable tlper 
 sons other than the immediate contractor; the merchants said 
 that they constantly used such contracts, could not indeed get 
 along without them; and the usage finally received "author- 
 itative indorsement and defined form." 
 
 To the writer it has always seemed to be somewhat absurd 
 to suggest^that such works as those of Mr. Justice Byles, Mr 
 Daniel and others were the result of investigations into the 
 
 rlrdT r,!; •^"^^"^^^ ^^^ (°ot merchant^made), with 
 Lord Mansfield as chief builder, is what we have here. 
 
 " Nbootiabilitt." 
 
 After being Jniorraed that "it is negotiability that affords 
 the coloring and the contrast » » between the law merchant and 
 
 ^ Ante, jp. 872. 
 
376 
 
 08TEN8IBLK OWNERSHIP AND AOSNOT. 
 
 iii 
 
 1 
 
 i 
 
 :f;h:i;i-i 
 
 the common law, it is somewhat depressing to find that them 
 is very little agreement as to what " negotiability " really is. 
 Probably many would agree with the widely-quoted language 
 of Blackburn, J. It will furnish at any rate a sufficient basia 
 
 for discussion: 
 
 «BilU of exchange and pronaissory notes, whether payable to order or to- 
 the bearer, are bv the law merchant negotiable in both senses of the word. 
 The person who, by a genuine indorsement, or where it is payable to bearer 
 by a^elivery, becomes holder, may sue in his own name on the contract, 
 and if he is a bonafide holder for value he has » Koo^ **"« °°*r''i^«'":"i- 
 ing any defect of title in the party (whether indorser or deliverer) from 
 whom he took it." 1 
 
 I. Transferee Suing in His Own iTame.— The first of these 
 distinguishing characteristics of bills and notes— that a trans- 
 feree can sue upon them in his own name'— is very easily dis- 
 placed, and that in four different ways: 
 
 (1) Assignees of covenants "running with the land" can su& 
 upon them in their own name.* This is not because of any 
 law merchant or law farmer, but because the covenant waa 
 made with the person who, for the time being, might have the 
 land. That is to say, the covenant was ambulatory. 
 
 (2) It was for the same reason, and not because the law mer- 
 chant so declared (i^n absurd idea), that the transferee of a 
 note could sue upon it in his own name. 
 
 "The note is an original promise by the maker tn pay any person wha 
 shall become the beartr; it is therefore payable to any person who sue- 
 cessivelyholds the note bona fide, not by virtue of any assignment of the 
 pSSeTbut by an original and direct promise moving from the maker to- 
 
 ''**«fe"reri8de»crtp<»oi)€r«oruB,and a person may take by that descrip- 
 tion m will wTanyothlr. In the nature of the contract there is no im- 
 
 I Crouch V. Credit Foncier (1878), 
 L. R. 8 Q. B. 874; 42 I* J. Q. B. 188. 
 Quoted approvingly in Pollock on 
 Contracts (6th ed.\ 219; Chalmers on 
 Bills (5th ed.), 103; McLaren on Bills, 
 197, 445; Addison on Contracts (9th 
 ed.), 1096; Cabab6 on Estoppel, 180. 
 And see Bouvier's Law Die. (Rawle), 
 title " Negotiate." To same effect 
 per Bowen, L. J., in Simmons v. 
 London (1891), 2 Ch. 294; 60 L. J. Ch. 
 
 824. 
 
 «In a noteworthy judgment in 
 Shaw V. Railroad Ca (1879), 101 U. S. 
 657, Strong, J., contends that '•the 
 cai»bility of being thus transferred, 
 80 as to give to the indorsee a right 
 
 to sue on the contract in Ms own 
 name, is what constitutes negoti- 
 ability." The acquisition of a betted 
 title than that of the transferror he 
 treats as a consequence of this capa* 
 
 bility. 
 » Onward V. Smithson (1898), 1 Ch. 6r. 
 
 62 L. J. Ch. 188; Spencer's Case and 
 notes, 1 8m. L. C. (lOth ed.) 52, if t 
 Mitchell V. Warner (1825), 6 Conn. 
 498; Tapscott v. Williams (1841), 10 
 Ohio, 44& 
 
 * Per Story, J., in Bullard v. Bell 
 (1817), Mason, 248. And see Reed v. 
 Inghaui (ivvS). 3 DaiK (Fa.) 50", and 
 Thompson v. Perrine (1882), 106 U. S. 
 593, And see post, p. 888. 
 
OH08E8 IN AOnOK. 
 
 877 
 
 propriety In doing so. It is a contract 'to pay the bearer, or the person to 
 whom he may defiver it ' (whether it be a note or a bill of exchaSand 
 tLll "JP"8°»n* to the contract that the drawer should object that the 
 bearer has no riRht to demand payment from him."i 
 It hi. inH*^^ words. < or to his orcfer.' give authority to the plaintiff to assign 
 insl'rlrtoThe" assigned"?" ''«"^'"^°* "^ '''' ^"''*"^" '»'*''>« -o"^'* 
 dp*!7 wh?^r?o°«r?"^ sufficiently described at the time that 'tis made a 
 Tnt^'M *?' Its delivery; and suppose a bond were now made to the 
 
 Lord Mayor of London, and the party seals it, and after this man's mayor! 
 ?iiy««7' 'j® ^^''/e's the bond to the subsequent mayor, this is good, et 
 tradtho facet chartam loqui. And by the delivery he ekpounds the person 
 oerore meant; as when a merchant promises to pay to bearer of the note 
 any one who brings the note shall be paid." s ^ ' * °'®' 
 
 (3) All choses in action may be sued upon in equity in the 
 name of the transferees of them. The characteristic in hand, 
 therefore, is that of the courts of law rather than that of cer- 
 tain choses in action ; and that which has been spoken of as a 
 distinguishing characteristic of bills and notes is really but a 
 point of practice, upon which different courts took opposite 
 views.* 
 
 J Grant v. Vaughan (1764), 3 Burr. 
 1597. See also Carter V. Palmer (1700), 
 12Mod. 880; Peacock v. Rhode8(1781), 
 Doug. 686; Re Agra (1867), L. R. 3 
 Ch. 891; 86 U J. Ch. 832; per Bowen. 
 L. J., in Easton v. London (1886), 34 
 Ch. D. 112; 67 L. J. Ch. 832; and per 
 Lord Watson in Simmons v. Lon- 
 don (1893), A. C. 20: 61 L. J. Ch. 8ia 
 But see Re Blakely (1867), L. R. 8 Ch. 
 158; 86 L. J. Ch. 655, and Dixon v. 
 Bovill (1856), 3 Macq. 13, 14. 
 2 Hill y. Lewis (1794), 1 Salk. 132. 
 » Sheldon y. Hurtley (1680), 2 Show. 
 161. Upon general principles it ia 
 much easier to understand why bills 
 and notes should be sued upon in the 
 name of the transferee than why 
 they should not. In other words, if 
 we look at some of the documents 
 themselves (e. g., " I promise to pay 
 to the bearer hereof," or to "Ship 
 Fortune or bearer"), it is hard to 
 imagine bow it came about that there 
 was any other course than that the 
 action must be brought in the name 
 of the bearer: for the promiRp in 
 made to him. The best that can be 
 said for the other view is that the 
 maker of a note promises the person 
 
 to whom he gives it that he will 
 pay it to the bearer; and that he 
 makes no contract at all with the 
 bearer: "I promise you that I will 
 pay to the bearer." This is, how- 
 ever, not only to alter the form bufc 
 the substance of the note — probably 
 to take it out of the category of notes 
 (as usually understood) altogether. 
 If I were to advertise that I would 
 pay $5 to "the finder" of my dog, 
 there could be no doubt that any 
 one who answered that description 
 could sue me for the money. My 
 contract was not with the news- 
 paper. Williams v.Carwardine (1833), 
 4 a «& Ad. 631; Denton v. Great 
 Northern (1856), 5 E. & B. 860; 25 L. 
 J. Q. B. 129; Warlow v. Harrison 
 (1858), 1 E & E. 295, 809; Scott v. 
 Pilkington (1862), 3 B. & a 11; 31 L. 
 J. Q. R 81. 
 
 * That the point was one of prac- 
 tice becomes very clear when it is 
 remembered that although an as- 
 signee of a chose in action was not 
 
 nArmiffad tn eim nf lonr tw* Ki- <^«._ 
 
 X-— -— — — *- -" -..-., ,mv *««*> .1. -JSt? VTTil 
 
 name, yet his real presence was ac- 
 knowledged when suihg in the name 
 of his assignor. To a defense, valid 
 
878 
 
 OSTENSIBLE OWNERSHIP AND AOENOT. 
 
 (4) Whatever may be thought of these three points, it will 
 not be doubted that in many jurisdictions modern statutes have 
 abolished all distinctions between "negotiable" instruments 
 and other choses in action (arising out of contract), with refer* 
 ence to tbo right of assignees to sue upon them in their own 
 nAmes. All transferees may now so sue. 
 
 As to this first characteristic then we may say either that it 
 never existed or that if it did it has been abolished. 
 
 11. Honest Acquisition Confers Title. — It is very extraordi- 
 nary that it should ever have been said that a distinguishing 
 characteristic of " negotiable " instruments was that honest ac- 
 quisition of them confers title. Consider these points: 
 
 (1) A " negotiable " instrument is a " negotiable " instrument 
 whether it is due or overdue; and yet honest acquisition of it 
 at one stage of its career will (generally) confer title, but when 
 it is past due an honest transferee takes what is given him 
 and no more. The language of Strong, J., seems to be correct: 
 
 "A bill or note past due is nt^oh'ab/e . . . but its indorsement or de- 
 livery does noi cut off the defenses of the maker or acceptor against it 
 . . . and it does not Rive to the purchaser of lost or stolen bills the 
 right of the real owner." ^ 
 
 The codes, too, tell us that 
 
 " where an overdue bill is negotiated it can be negotiated only subject to 
 any defect of title affecting it at its maturity."' 
 
 What can be made of such a sentence with present ideas of 
 
 "negotiability?" 
 
 (2) Again, it is not true, even of current instruments, that 
 honest acquisition will always confer title, for it will be no as- 
 sistance if the signatures to them have been obtained by certain 
 frauds,' or if the amount payable has been fraudulently in- 
 creased,* or if the signature to a blank piece of paper has been 
 
 as against his assignor, it was some- 
 times a good replication that the 
 plaintiff (the assignor) was suing as 
 a trustee for the assignee, who was 
 therefore the real plaintiff. In other 
 words, courts of law allowed trans- 
 ferees to assert their rights through 
 their trustees, whereas equity per- 
 mitted the same thing to be done 
 directly. See Master v. Mi Her 1 791), 
 4 T. R. 840, judgment of Bnller, J., 
 pcuaim. See post, p. 888. 
 
 J Shaw V. Railroad Ca (1870), 101 
 U. 8. 557. 
 
 » 45 A 46 Vic. (Imp.), ch. 61, g 86 (3); 
 68 Vic. (Can.), ch. 33, g 86 (8). . 
 
 •Foster v. McKinnon (1889), L. R.^ 
 4 C. P. 704; 88 L. J. C. P. 810; Second 
 Nat Bank v. T^ewitt (1896), 59 N. J. 
 L. 57; 84 Atl. R. 9H8. 
 
 * Sohofleld V. Loniipsborough (1894), 
 2 Q. B. 660: 63 L. J. J. B. 649: (1895) 
 1 Q. B. 536; 64 L. J. Q. U. 298; {IdW} 
 A. C. 514; 63 L. J. Q. R 59a 
 
 ll ' JJt ' j i Jtf ii JiM MWBWg'Wt 
 
its, it will 
 tutes have 
 struments 
 v'ith refer- 
 their own 
 
 ler that it 
 
 extraordi- 
 nguishing 
 honest ac- 
 rs: 
 
 istrument 
 ition of it 
 but when 
 jiven him 
 e correct : 
 
 ment or de- 
 r against it 
 en billa the 
 
 J subject to 
 it ideas of 
 
 ents, that 
 be no as- 
 by certain 
 lentlv in- 
 ' has been 
 
 . (1879), 101 
 
 .61,886(2); 
 
 1(2). 
 
 (1869), L. R. 
 $10; Second 
 96), 59 N. J. 
 
 •ough (1894), 
 
 . 849: (1895) 
 
 293; (1896) 
 
 0H0SE8 IN ACTION. 
 
 «7« 
 
 stolen and conrerted into a bill,* or if even a completed but un- 
 issued bill be stolen,' or if a material alteration has been made 
 in a bill,» or in many other cases.* 
 
 (3) Nor can it be said that the " honest acquisition " doctrine 
 is confined to "negotiable" instruments, for there is the evei^ 
 widening class of cases provided for by that most important 
 rule: 
 
 "Generally speaking, a chose in action assignable only In equltv must 
 beassigned subject to the equities existing between the original parties to 
 the contract; but this is a rule which must yield when it apr)ear8 from the 
 nature or terms of the contract that it must have been intended to be as- 
 signable free from and unaffected by such equities."* 
 
 (4) The cases are legion, moreover, in which acquisition of 
 «uch " non-negotiable " articles as goods and lands will confer 
 a better title than that held by the transferror: 
 
 (a) A mortgagee allows the mortgagor to have the deeds and 
 they are fraudulently deposited as security for a loan. The 
 depositee gets a better title than the depositor had.' 
 
 (5) Goods intrusted to a mercantile agent may be sold and a 
 good title passed, although he had no interest in the goods and 
 no right to sell them.^ 
 
 » Byles on Billa (I5th ed.). 255; Dan- 
 iel on Negotiable Instruments, §814; 
 Parsons on N. & B., vol. 1, 114. 
 
 'Baxendale v. Bennett (1878), 3 g, 
 R D. 525; 47 L. J. C. P. 624; Bigelow 
 on Bills and Notes, 177, 178, and cases 
 there cited. But see per Williams, 
 J., in Ingham v. Primrose (1859), 7 
 C. a N. a 82; 28 L. J. C. P. 294. 
 
 •Calvert v. Baker (1838), 4 M. & W. 
 417; Desbrow v. Wetherly (1834X 1 
 Moa & R. 488; Crotty v. Hodges 
 (1842), 6 Sa N. R. 221 ; 4 M. & G. 561 ; 
 11 L. J. C. P. 289; Burchfield v. 
 Moore (1854), 28 L. J. Q. B. 261. See 
 the codes, 45 & 46 Vic. (Imp.), ch. 61, 
 § 64; 58 Vic. (Can.),cli. 33, 8 63; Mid- 
 augh v. Elliott. 1 Mo App. 462; King- 
 ston Sav. Bank v. Bosserman (1893), 
 62 Ma Apf). 289; Mount Morris v. 
 Lawson (1894), 58 N. Y. St R. 35; 7 
 MisG R. 228; 27 N. Y. Supp. 272; 68 N. 
 Y. St R. 482; 10 Misc. R 3.50: 81 N. 
 Y. Supp. 18; Newman v. King (1896), 
 64 Ohio St 278; 43 N. R R flSa 
 'Master v. Hill (1768), 4 T. R. 820; 
 
 5 T. H. mi\ 2 H. Bl. 140; Mason v. 
 ey(ijJ3), 11 M. & W. 593; 12 
 *-. J. Ex. 425; Harrison v. Cotgresve 
 (1847), 4 C. B. 562; 16 L. J. G P. 198; 
 Warrington v. Early (1853). 2 E. & B. 
 768; 23 L. J. Q. B. 47; Gardner v. 
 Walsh (1855), 5 R & B. 91; 24 U J. 
 Q. 3. 285; Hirschfleld v. Smith (1808). 
 L. R. 1 G P. 340: 85 L. J. G P. 177; 
 Hirschman v. Budd (1878), L. R 8 
 Ex. 171; 43 L. J. Ex. 113; Vance v. 
 Lowther (1876), 1 Ex. D. 176; 45 L. 
 J. Q. R 200; Columbia v. Cornell 
 (1888), 130 U. a 658; Hosier v. Beard 
 (1896), 54 Ohio St 898; 43 N. E. R 
 1040; Swinney v. Edwards (1898), 65 
 Paa R (Wyo.) 808. 
 
 ORe Agra & Masterman's Bank 
 (1867X L. R 2 Ch. 397: 86 L. J. Ch. 222. 
 
 • Perry-Herriok v. Attwood (1857). 
 SDe G. & J. 21; 27 L. J. Ch. 121; 
 Brocklesby v. Temperance (1895), A. 
 G 178; 64 li Z-. Ch. 438. 
 
 'The Factors Act, 52 & 58 Vic. 
 (Imp.Xch.45,g§8,7,8,9, la 
 
880 
 
 OSTEl^SIBLB OWNERSHIP AND AGENCf. 
 
 ili 
 
 < 
 
 ! ! 
 
 111! 11 
 
 ll 
 I 'ii 
 
 ili! 
 
 llll 
 
 i 
 
 i 
 
 ■ ! 
 
 I 
 
 {o) Any one held out as the owner of goods may transfer a 
 better title than he has — at least the owner will be estoppe4 
 from asserting to the contrary.* 
 
 {(i) A purchaser in market overt may obtain a better title 
 than thEt of his vendor. 
 
 These examples, and others that will readily occar to any^ 
 one, amply warrant the statement that there is no antagonism 
 between the law relating to bills and notes and the rest of the 
 law in the respect referred to. On the contrary, we see that 
 the phrase " Honest acquisition confers title " applies in many 
 branches of the law other than that relating to bills and notes. 
 And we shall see that it applies in all departments for the same 
 reason. 
 
 It may be urged that, at all events, there is a distinction be- 
 tween bills and notes on the one hand and chattel property en 
 the other, where title is acquired from a thief or finder. But 
 once more, it is not always true that a good title to a bill or 
 note is obtained from a t)iief or finder. The authorities seem 
 to be agreed that if a signed blanl^ bill be stolen and filled up, 
 the transferee gets no title;' and it has been held that if a bill 
 complete, save by delivery (and therefore an unissued bill), be 
 stolen, no title to it can be acquired from a thief.' 
 
 And it is not always true that a thief or finder of chattels 
 cannot give a better title than he himself has. Sale in market 
 overt is a sufficient contradiction of the statement. And the 
 fact that the law governing such sales is part of the general 
 body of the law is some indication that sufficient sanction for 
 a similar result in the case of bills and notes may also be found 
 without going outside of it. The transferee of stolen bonds 
 takes a good title.* 
 
 III. Negotiability and Tranafer ability. — Abandoning then 
 these two customary significations of '^ negotiability," let us 
 
 iSee ohs. XXI, XXII. XXIIL 
 sByles on Bills (15th ed.),355; Par- 
 sons on N. & R, vol. 1, 114; Daniel 
 on Negotiable Insts. (4th ed), §g 814, 
 840. See the subject discussed in 
 oh. XXV. 
 
 • n i_i- _ r> _.i.4. /loi^nv o /\ 
 
 R D. 635; 47 L. J. C. P. 634. And see 
 Bigelow on B. & N. ITG, ff ; Daniel on 
 Negotiable Insta (4th ed.^ voL 1, 
 
 g 880. It is doubtful whether the 
 Bills of Exchange Act has affected 
 this and the previous point Prob- 
 ably it ha& See §§21, 29. 
 
 <VenabIes V. Baring (1892). 8 Ch. 
 627; 61 L. J. Ch. 609; Bechuanaland 
 
 .. r ~_.4.._ /iono\ a r\ r> ana. at r T 
 
 Q. B. 986; Whiteside t. First Nat. 
 Bank (1898), 47 S. W. B. 1108 (Tenn.). 
 
 MiaiBiiMiagHWiiaiii wnc i aiiwawni 
 
transfer a 
 ) estoppe^ 
 
 t 
 
 >etter title 
 
 lar to any^ 
 ntagonism 
 rest of the 
 e see that 
 )s in manv 
 and notes, 
 •r the same 
 
 [notion be- 
 roperty en 
 ider. But 
 ;o a bill or 
 rities seem 
 I filled up, 
 at if a bill 
 3d bill), be 
 
 >f chattels 
 in market 
 And the 
 [le general 
 action for 
 > be found 
 len bonds 
 
 Qing then 
 ;y," let us 
 
 whether the 
 laa affected 
 oint Prob- 
 
 [1892), 8 Ch. 
 chuanaland 
 
 ilKU. ai*T T 
 w*Ji VI j-n Vi 
 
 First Nat 
 1108 (Tenn.). 
 
 CHOSES IN ACTION. 
 
 381 
 
 try the dictionary meaning, namely, " transferability." This 
 
 has been adopted by some writers, but only very sum'marily 
 
 to be departed from. For example, in " Daniel on Negotiable 
 
 Instruments " we find it stated that 
 
 *an instrument is called nogot" .tie when the legaltitle to the instrument 
 itself, and and to the whole amount of money expressed upon its ^ace, may 
 be transferred from one to another by indorsement and delivery by the 
 holder, or by delivery only." 1 
 
 But the learned author approves of such language as the fol- 
 lowing: 
 
 " Written contracts are not neeeasarily negotiable, simply because by 
 their terms they inure to the benetit of the bearer. Doubtless the certifi- 
 cates were assignable, and they would have been so if the word ' bearer ' 
 had been omitted, but tkey were not negotiable instruments in the sense 
 supposed by the appellant& Holders might transfer them, but the as- 
 signees took them subject to every equity in the hands of the original 
 owners." * 
 
 Here then are documents which are transferable but not 
 
 negotiable. In another paragraph, referring to bills of lading, 
 
 the same writer says: 
 
 " Bills of lading are generally classed among negotiable instruments 
 and are frequently spoken of as negotiable like bills of exchange by text- 
 writers and by jurists of high reputation and authority.* But while they 
 are assignable and possess certain capacities of negotiation which assimi- 
 late them quite closely in some respects to negotiable instruments, they 
 are not negotiable in the same sense as bills of exchange or negotiable 
 promissory notes.* And it is more correct to speak of them as quasi-nego- 
 tiable instruments, since they are rather like, tlian of, them."> 
 
 It would of course be quite out of the. question to substi- 
 tute for " quaei-negotmhle " the phrase " gwaw-transferable." 
 That would be to alter Mr. Daniel's meaning, which was that 
 although bills of lading were capable of complete transfer, yet 
 that they lacked some of " the peculiarities which attach to 
 negotiable paper " — in other words, they are completely trans- 
 ferahle^ but only quaai-negotiuhle. 
 
 Not much help is to be obtained from the codes. We find 
 it stated in the English and Canadian compilations that 
 
 " a bill is negotiated when it is transferred from one person to another in 
 in such a manner as to constitute the transferee the holder of the bilL" * 
 
 1 Sec. 1. See also Smith's L. G (10th 
 ed.), 456; and Addison on Contracts 
 <9th ed.X 1098. 
 
 3 Railroad Ca v. Howard (1868), 7 
 WalL 415. Quoted by Mr. Daniel, 
 1456. 
 
 «Liokbarrow v. Mason (1787), 2 
 T. R 68, in which the jury found 
 " that by the custom of merchants 
 bills of lading . . . to order or as- 
 signs have been and are ... ne- 
 
 gotiable and transferable." Berkling 
 v. Watling (1837), 7 Ad. & R 29; 
 Bell v. Moiss, 5 Whart 189. 
 
 4 Ourney t. Behrend (1854), 8 K & 
 a 62S; 23 L. J. Q. E 265; Barnard 
 V. Campbell (1874), 55 N. Y. 462; 1 
 Smith's Lead. Oas. (lUth ed.), 6da 
 
 » Schouler's Personal Property, 
 410, 605; Davenport ▼. Homeyer 
 (1869), 45 Ma 145. 
 
 « 45 & 46 Vic. (Impi), cb. 61, g 81; 
 
!! 
 
 Ill 1 1 
 
 .5 'i, 
 
 382 
 
 > OSTEJTdlBLV OWNERSHIP AND AGBNOT. 
 
 But if we were to say that a blacksmith's account " is nego- 
 tiated when it is transferred from one person to another in such '< 
 a manner as to constitute the transferee the holder of the" 
 account, the assertion would be quite as valid and just as fruit- 
 less. For the gist of both statements is merely that bills and 
 accounts may both alike be transferred — a remark that, of^ ; 
 course, does not help one to appreciate any distinction between 
 them. 
 
 The last hope of intelligibility (upon the view that negotia- 
 bility means simply transferability) seems to be removed with 
 Mr. Chitty's perfectly accurate remark that 
 
 "it is now well established that it is not essential to the validity of a bill 
 that it should be transferable from one person to another." ^ 
 
 If now we say that bills are negotiable instruments; that ne- 
 gotiable means transferable; and that bills are very often not • 
 transferable, we have some notion of the confusion to which 
 current phraseology has reduced us. 
 
 The great uncertainty boncerning the meaning of this word 
 " negotiable" becomes so conspicuously noteworthy when, stand- 
 ing by itself, it has to be construed, that one cannot but be sur- 
 prised that it should continue to be used as though it had some 
 
 S8 Via (Can.), oh. 88, § 81. The 
 codes also provide that a bill con- 
 taining "words prohibiting trans- 
 fer .. . is not negotiable " (g 8). 
 But the codes, of course, do not 
 mean that such a bill cannot be 
 transferred. For as Chalmers says 
 (on Bills, p. 130): "A bill may be 
 transferred by assignment or sale, 
 subject to the same conditions as 
 would be requisite in the case of an 
 ordinary chose in action. Thus C 
 is tlie holder of a note payable to 
 his order. He may transfer his title 
 to D. by a separate writing assign- 
 ing the note to D. (Re Barrington 
 (1804), 2 Sch. & Lef. 112); or by a vol- 
 untary deed constituting a declara- 
 tion of trust in favor of D. (Richard- 
 son V. Richardson (1867X Lk R. 8 Eq. 
 686); or by a written contract of 
 sale (Shelclon v. Parker (1875), 8 Hun 
 (N. Y.). 498)^ A bill is a chattel, 
 therefore it may be sold aa a chatteL 
 
 A Mil is a chose in action, therefore 
 it may be assigned as a chose in ac- 
 tion," 
 
 » Chitty on Bills (11th ed.). Hi For 
 example, days of grace are allowed 
 on a note payable to A. without add- 
 ing "or to his order or bearer," 
 Smith V. Kendall (1794), 6 T. R, 183. 
 Of a similar note it was said that- 
 "it is not necessary that such a note 
 should be in itself negotiable, it is- 
 suffioient that it should be a note for 
 the certain payment of a sum of 
 money, whether negotiable or not "" 
 (per Le Blanc, J., in King v. Box 
 (1815), 6 Taunt 828); and a oonvio- 
 tion for forgery of such a document- 
 was sustained. And see Whyte v. 
 Heyman (1859), 84 Pa. St 14a Now 
 by the codes— altering the law, 45 &: 
 46 Via (Imp.), ch. 61, § 8 (4); G& Via 
 (Can,), ch. 88, § 8 (4)— such a note is. 
 "negotiable." 
 
 M ii i iM ii l wiiiimiiiffinnBi 
 
t " IS nego- 
 ber ia such '< 
 3r of the '* 
 st as frait- 
 t bills and 
 k that, of* 
 n between 
 
 it negotia- 
 oved with 
 
 lity of a biU 
 
 j; that ne- 
 
 often not 
 
 1 to whioh 
 
 this word 
 lien, stand- 
 out be sur-^ 
 
 had some 
 
 n, therefore 
 zhose in ac- 
 
 d.), nn. For 
 are allowed 
 without add- 
 or bearer." 
 
 6 T. R. 18a 
 IS said that- 
 such a note 
 )tiable, it is- 
 >e a note for- 
 r a sum of 
 ible or not "" 
 [ing V. Box 
 id a oonvic- 
 a docuinent- 
 e Whyte v. 
 ;. 14a Now 
 he law, 45 &: 
 
 (4); 03 Vic 
 oh a note ia. 
 
 CHOSKS IN ACTION. 
 
 383 
 
 clear definition. For example, an American statute provided 
 
 that bills of lading ' 
 
 -shall be negotiable, and maybe transferred by indorsement and deliv- 
 ery," 
 
 and another act declared that they 
 
 "shall be negotiable by written indorsement thereon and delivery in the 
 same manner as bills of exchange; " ' 
 
 whereupon arose for decision the question whether transferees 
 took a better title than that held by the transferrors; and an 
 answer quite contrary to generally accepted notions was given 
 by the United States Supreme Court: 
 
 " The capability of being thus transferred so as to give to the indorsee a 
 rieht to sue on the contract in his own name is what constitutes negotia- 
 bilitv . . . In regard to Us and notes certain other consequences gen- 
 erally, though not always, follow. . . . But none of these consequences 
 are necessary attendants or constituents to negotiability or negotiation. 
 They may exist without them." i 
 
 The bills of ladino; were negotiable, but honest acquisition of 
 them did not or ' itle. 
 
 So in an E ^ . i case evidence had been given that certain 
 bonds were negotiable, and the judges could not agree what 
 that meant. Bowen, L. J., declared that although the bonds 
 passed by delivery, yet it did not follow 
 
 " that delivery by a person who has no title confers nevertheless a title on 
 a bona fide holder." ' 
 
 But in the House of Lords, Lord "Watson thought that 
 "it necessarily follows from the negotiable character of the documents 
 that Delmar, who was lawfully in possession of them for a special purpose, 
 was nevertheless in a position to give a valid title to any person acquiring 
 the bonds from him in good faith." 
 
 IV. What then ia NegotiaUUty f — The difficulties commence 
 to dissolve as soon as it is observed that the word " negotiable " 
 is used in two senses. The primary meaning unquestionably is 
 transferable; but consider the following sentence: 
 
 » A non negotiable promissory nole is a mere chose in action; as such t7 
 »■« assignable, and the assignee thereof may maintain an action thereon in 
 his own name." ' 
 
 The language is in perfect harmony with our ideas; but of 
 course it does not mean that a non-assignable note is assign- 
 able. In like manner, and in language that is customary, Mr. 
 Daniel, treating of " the transfer of certificates of deposit," * 
 expresses doubts as to whether they are negotiable." Stock 
 
 »Shaw T. miiuxiau vui v'"'"/' '■^'■ 
 U. S. 557. 
 
 2 Simmons v. London (1891), 1 Ch. 
 294; 60 I* J. Ch. 824; (1892) A. G 
 213; 61 L. J. Ch. 727. 
 
 ? Rarry v. Waohosky (1899)-. 77 N, 
 W. R. 1080 (Neb.). 
 
 <On Negotiable Instruments, 
 §1703. 
 
 •Id., §170a 
 
384 
 
 pSTENSraUE OWNERSHIP AND AGBNOT. 
 
 m III' 
 
 certificates are undoubtedly transferable, but Mr. Daniel says 
 that they 
 
 "are not regarded as strictl- negotiable, although the/ inure to the bene- 
 fit of the bearer, and may I. classed amongst instruments quaai-negoita- 
 
 The truth is that " negotiable " has an original and an ac- 
 quired signification. Originally it meant transferable; but 
 afterwards it was used to indicate the supposed effects of 
 transfer, namely, that the transferee (1) took free from equi- 
 ties, and (2) could sue in his own name. And thus we say 
 that certain choses are transferable, although not negotiable — 
 meaning that they are transferable, but that certain effects do 
 not accompany their transfer.' 
 
 According to primary meaning, then, a " negotiable " instru- 
 ment is a transferable instrument; and in that sense the word 
 truly indicated, at one time, a real distinction among choses in 
 action. The secondary meaning, however — that in which it 
 is taken as indicating the existence of peculiar effects of trans- 
 fer — was always inaccurate and unscientific; for as to the 
 transferee bringing an action in his own name, that is the nor- 
 mal result or effect of all transferability; and as to honest ac- 
 quisition conferring title, this secondary meaning arrogates to 
 the transfer of bills and notes alone, an effect (1) which existed 
 sometimes in the case of other property, and (2) which some- 
 times was absent from bills themselves. In other words, " ne^ 
 gotiable " was used (in the secondary sense) to mark off bills 
 and notes from other choses in action, by a peculiarity of which 
 they not only had no exclusive possession, but which frequently 
 was altogether absent. However dubious to some lawyers this 
 assertion may appear to be, there is at least no doubt (1) that 
 at the present day all choses in action arising out of contract 
 are transferable; and (2) that any rule as to transferees of 
 choses in action taking free from equities is by no nieans con- 
 fined to bills and notes, but is, as we have seen, 
 
 "a rule which must yield when it appears, from the nature or terms of 
 the contract, thjit it must have been intended to be assignable free from 
 and unaffected by such equities."* 
 
 1 Id., § 1708. Consider also the sen- 
 tence from Chalmers on Bills (5th 
 ed. 115): "The character and inci- 
 dents of negotiability depend upon 
 the time of negotiability." 
 
 8 Ash hurst, J., as early as 1787 had 
 said: "The custom of merchants 
 
 only establishes that such an instru- 
 ment may be indorsed, but the effect 
 of the indorsement is a matter of 
 law." Liokbarrow v. Mason, 3 T. R. 
 71. 
 *Ante, p. 879. 
 
 
CH08K8 IN ACTION. 
 
 3"5 
 
 miel says 
 
 the bei^e- 
 an-negoita' 
 
 id an ac- 
 ible; but 
 effects of 
 rom equi- 
 18 we say 
 otiable — 
 effects do 
 
 3 " instru- 
 the word 
 choses in 
 which it 
 of trans- 
 is to the 
 i the nor- 
 lonest ac- 
 ogates to 
 h existed 
 ch some- 
 rds, " ne- 
 : off bills 
 of which 
 equently 
 yers this 
 i (1) that 
 contract 
 ferees of 
 jans con- 
 
 r terms of 
 free from 
 
 an instru- 
 t the effect 
 matter of 
 on, 3 T. R. 
 
 We must get away, then, from the terms « negotiable" and 
 « non-negotiable." For (1) their primary and only true mean- 
 ing has been lost to them ; (2) that meaning would now be useful 
 only to distinguish between choses which arise out of contract 
 from those which do not (for the former are by statute assign- 
 «ble — *. e., negotiable, while the others are not), and the word 
 "transferable" (having no false connotations attached to it) is 
 better for tliat purpose; (3) the acquired meaning of the terms 
 was never scientific -at all events at the present time they 
 are inaccurate and misleading. 
 
 Ambulatory and Non-ambclatort. 
 Nevertheless, as the quotation just made sufficiently shows, 
 there is a real distinction among choses in ^ion (arising out of 
 contract), namely, between those "intended to be assignable" 
 free from equities and those not so intended— or, as the 
 present writer ventures to suggest, between ambulatorv and 
 non-ambulatory contracts. All contracts are now transferable 
 <negotiable); but some are intended to be redeemable to per- 
 sons other than the immediate promisee; are intended to be 
 passed on from hand to hand; are intended, that is, to be am- 
 bulatory. 
 
 Of such contracts there were in early times none (the simple 
 preceded the complex), and the courts declined to acknowledge 
 their validity long after they came into existence, and the cus- 
 tomary rules concerning them were well known to everybody 
 Foreign bills of exchange formed the thin edge of the wedge- 
 the statute of Anne > overruled Chief Justice Holt in his refusal 
 to sanction the admission of promissory notes; in 1758 a bank- 
 note was held to be negotiable;' in 1764 a draft or check on 
 a bank;' m 1871 a note indorsed in blank;* exchequer bills in 
 1820; » and bonds of the King of Prussia, payable to the holder, 
 in 1824.' 
 
 All these instruments have a common characteristic (thev 
 are intended to be ambulatoryX but one that is by no means 
 necessarily confined to them, as we shall see later on. Some 
 members of a class must necessarily be known before the class 
 
 »8&4Anne,ch. ft 
 2 Miller v. Race, 1 Burr. 45a 
 'Grant v. Vaughan, Q Burr. 1518. 
 85 
 
 < Peacock v. Rhodes, Doug. 636. 
 » Wookey v. Pole, 4 B. & Aid. 1. 
 •Gorgier v. Mieville, 8 B.&C.4& 
 
iil!!i 
 
 
 i itiiip 
 
 IP 
 
 !l I. 
 
 386 - OSTENS^LB OWNERSHIP AND AGENCY. 
 
 itself can be accurately described; and non-recognition of a 
 true distinguishing characteristic has often led to unnecessary ^ 
 diificulty. Thus it happened that it remained for Lord Cairns 
 (1862), in perhaps the most noteworthy single sentence of mod. 
 em law, to indicate the clear and simple ground upon which 
 rested the asserted peculiarities of "negotiable" instruments, ^ 
 It is worth repeating: u„„.««. 
 
 be assigned subject to the eq^^jf.f "'^;;-? "ield when it appears from th© 
 
 '^tS^r^Si.^i?iZ''ci;s:o:^^^ to be a. 
 
 ?4naWe free from and unaffected by such equmes."! 
 
 In Other words, when it is intended that an obligor is not to 
 se; up equities, he is not to be permitted to do it. Strange that 
 there should ever have been any difficulty about that proposi- 
 tion — particularly in getting it stated. 
 
 Observe how this sentence and the statutes cut into our no- 
 tions of "negotiability." A "negotiable" chose in action is 
 one transferable at law, ^pon which the transferee may sue m 
 his own name. Is it? Then all contracts arising out of con- 
 tract are now " negotiable." A « negotiable " i^^^-;" J"^^': ^^^^^ 
 that passes to a transferee free from equities. Is it? Then aU 
 contracts "intended to be assignable free from and unaffected 
 by such equities" are "negotiable;" and overdue bills and 
 
 notes are not. 
 
 The Ctclb. 
 
 Observe the cycle through which we have come : (1) Certain 
 instruments (bills, and afterwards notes) were intended to be 
 ambulatorv - to be performed to transferees, and therefore to 
 be assignable free from equities. (2) The law with certain 
 misgivings, sanctioned the intention and enforced the contracts. 
 (3) Customs expanded ; contracts other than bills and notes arose 
 which were intended to be ambulatory. (4) But the law re- 
 mained orystallized-bills and notes, and at the utmost, checks, 
 exchequer bills, and finally foreign government bonds -^ a I eo 
 nomine and not as examples of a class, are alone " negotiable ; 
 transferees of all other choses in action (although m reality also 
 members of the class) must take subject to equities. (5) Ihen 
 . ^ . — .'^u u:» ^»^^»»i'r%n frt t.hfi iTAneral rule as to as- 
 signees of choses in action taking subject to equities, namely, 
 
 »4nfe, p.879. 
 
ition of a 
 I necessary ' 
 )rd Cairna ' 
 se of mod- 
 3on which 
 itruraents* 
 
 equity must 
 al parties to 
 ars from the 
 led to be as- 
 
 >r is not to 
 range that 
 at proposi- 
 
 ito our no- 
 1 action is 
 may sue in 
 out of "on- 
 raenc is one 
 ? Then aU 
 unaffected 
 e bills and 
 
 (1) Certain 
 ended to be 
 therefore to 
 ^ith certain 
 te contracts. 
 I notes arose 
 the law re- 
 nost, checks, 
 jnds — • all eo 
 negotiable;" 
 1 reality also 
 8. (5) Then 
 lie as to as- 
 ties, namely. 
 
 0HOSE8 IN jiCnON. 
 
 8sr 
 
 that such is not the case where the choses were intended to be 
 ambulatory; a dictum which placed all instrumenU belonging 
 to the same class upon the same footing. 
 
 So we started and ended very reasonably — documents in- 
 tended to be redeemable to third persons shall be so redeemed; 
 although for many intermediate years we refused to admit the 
 generality of the proposition, stumbling foolishly over law mer- 
 chant and negotiability. 
 
 Choses in action, then, intended to be ambulatory are ambu- 
 latory, even although an equitable title to them merely may pass 
 by transfer. But if this be toe diflBcult a proposition for minds 
 addicted to legal estate priorities, they may be comforted by 
 the statute which provides that to all choses in action arising - 
 out of contract the legal title shall pass where the transfer is 
 by writing. This may still leave open the annoying anomaly 
 that the transferee of an ip..trument payable to order (his as- 
 signment being in writing) would be more favored than the 
 transferee of a document redeemable to bearer (his assignment 
 having been by delivuiy only). But the anomaly would be too 
 absurd and worrying to live long. It would be unanimously 
 clubbed upon its first appearance. By logic or club we must 
 retain the faith, now that we have again got it; that ambula- 
 tory contracts are ambulatory. 
 
 Decay of the Old %«/m.~Some idea of the old system and 
 the inroads upon it — the evolution out of it — may be ob- 
 tained by the perusal of two quotations. The first 'is taken 
 from a judgment of the United States Supreme Court, in which 
 may be found a most elaborate and exhaustive elucidation of 
 theoldlaw.i In it there is the following:* 
 
 in "2h^»^\ li!"*^''^ answered that the antiquated doctrine that a chose 
 in action s not assignable was introduced in early times before neirotiahl« 
 instruments were in use when trade was carried on in its simplSorm 
 and when the principal if not the only purpose intended to bi^^answS 
 
 Siann'"'-® "^"^ 1° P'*^^"* maintenance "in controversies respect^urtuTes 
 to land .. was to prevent the poor man from beine ooDrP^rt hv - «VI 
 erfu antagonist, to whom his c*ompetitor mghtTss^n^K't^^^^^ 
 by his wealth his influence or his power might p:ev4t j-uS At wh«? 
 titne or by what means it was first applied to Dersona riXs ta nof JT 
 
 t&M to apply to those instruments which by their nature andtheolini^.ni 
 contract of the parties were made negotiable. Every n?an has a nSra 
 l'^!^h^^J^!ttJ:?Ph f°°*f»«t.« as he pleases, provided\hS^ are not reoZl 
 
 'Dunlop V. Silver (1863), 5 U. S. Anp. 367, 
 
 »Atp.48a 
 
888 
 
 OI|TEN8IBtB 0WNEH8HIP AND AGENCY. 
 
 !!:!l|lii! 
 
 liiilri 
 
 1 1 1 
 
 to their ppirit and intent The reason of the rule was to prevent mainte. 
 nanoe. Ca Lit 214. But no man could be oppressed by maintenance who 
 had expressly agreed to pay his debt to such a person as Ins creditor might 
 appoint" 1 ,^ 
 
 With the above should be read a very able judgment of 
 
 BuUer, J.* In it he said : 
 
 "It is laid down in our old hooks that for avoiding maintenance a chose 
 in action cannot be assigned, or granted over to another. Co. Lit 214a, 2«6a, 
 2 Roll 45 1. 40.» The good sense of that rule seems tome to be very quep- 
 tionable; and in early as well as in modern times it has been so explained 
 away thkt it remains at most only an objection to the form of the action 
 in any case. . . . Courts of equity from the earliest times thought the 
 doctrine too absurd for them to adopt and therefore they always acted in 
 direct contradiction to it; and we shall soon see that thi courts of law 
 also altered their language on the subject very much. ... 
 
 "After these cases we may venture to say that the maxim was a bad 
 one. and that it proceeded on a foundation that fails. But still it must be 
 admitted that though the courts of law have gone the length of taking 
 notice of assignments of choses in action, and of acting upon them, yet in 
 many cases tliey have adhered to the formal objection that the action 
 shall be brought in the name of the assignor and not in the name of the 
 assignee. I see no use or convenience in preserving that shadow when 
 theiubstance is gone; and that it is merely a shadow "XnTJt wTk in 
 later oases in which the courts have taken care that it shall not work in- 
 
 ^"'•Thete is' no reason for confining the power of assignment to the two 
 instruments which I have mentioned; and I will rhow you other cases in 
 which the courts have allowed it First in Fennei v. Mears, where the de- 
 fendant a captain of an East-Indiaman. borrowed £1,000 of Cox. and gave 
 two respondentia bonds, and signed an indorsement on the baok of them, 
 acknowledging that in case Cox chose to assign the bonds he held himself 
 bound to pay them to the assignees. Cox assigned them to the plaintiff, 
 who was allowed to recover the amount of them m an action for money 
 had and received. De Grev. Ch. J., in disposing of the motion 'or a new 
 trial, said: ' Respondentia bonds have been found essentially neoewary for 
 carrying on the India trade; but it would clog these securities and be pro- 
 ductive of great inconvenience if they were obliged to remain in the hands 
 of the first obligee. This contract is therefore devised to operate upon sub- 
 sequent assignments, and amounts to a declaration that upon such an as- 
 slKnment, the money which I have borrowed shall no longer be the money 
 oFZhntot B.. his substitute. The nlaintifl s certainlv entitled ta the 
 money in conscience; and therefore afso I think at law; tor the def ndant 
 has promised to pay any person who ts entitled to the money. 
 
 » Masters v. Miller (1791), 4 T. R 
 840; and also the exposition c ' Cook- 
 burn, C. J., in Goodwin v. Robarts 
 (1875), L. R 10 Ex. 846: 44 L. J. Ex. 
 157, which did much to bring the 
 law into harmony with modern 
 finance. 
 
 sSir Frederick Pollock would as- 
 sign a different reason. He says (On 
 Contracts, 6th ed., p. 206): "The ori- 
 gin of the rule was attributable by 
 Coke to the ' wisdom and policy of 
 the founders of our law ' in discour- 
 aging maintenance and litigation; 
 bat it is better explained as a logical 
 consequence of the archaic view of 
 
 a contract as creating a strictly per- 
 sonal obligation between the cred- 
 itor and the debtor." In truth the 
 founders of our law were too much 
 given to inalienability, for which 
 probably the necessarily personal 
 relation of the feudal system is 
 largely responsible. Lands were in- 
 alienable and non-devisable, until 
 the equity lawyers invented their 
 system of uses. And even after Quia 
 
 •rx ^. a i.1.- at.^i.,i^ ^t UTllla 
 
 XUlUpfcUrCS situ cue :jl-=v.:-.Tr •.-- •' »•-— r 
 
 rights of entry remained inalien- 
 able—upon the ground mentioned 
 in the text 
 
CH08E8 IN ACTION. 
 
 389 
 
 it raainte* 
 ance who 
 tor might 
 
 ment of 
 
 ce a chose 
 214a, 266a; 
 very q^uee- 
 explained 
 the action 
 lou^ht the 
 rp acted in 
 rts of law 
 
 was a bad 
 it must be 
 of taking 
 lem, yet in 
 the action 
 ime of the 
 dow when 
 it from the 
 3t work in> 
 
 to the two 
 er cases in 
 lere the de- 
 ;, and gave 
 ;k of them, 
 sld himself 
 le plaintiff, 
 for money 
 for a new 
 cessary for 
 ind be pro- 
 1 the hands 
 e upon sub- 
 such an as- 
 the money 
 itled to the 
 s de/ adant 
 
 strictly per- 
 Q the ored« 
 a truth the 
 e too much 
 for which 
 ly personal 
 ; system is 
 ads were in^ 
 sable, until 
 rented their 
 n after Quia 
 
 ned inalien* 
 I mentioned 
 
 " And In Winch v. Keeley, K. B. Hil. 27 Gea 8. where the obligee assigned 
 over a bond, and afterwards became a bankrupt, the court hblds that he 
 might^notwithstanding maintain the action. Mr. J. Ashhurst said: 'It is 
 true that formerly courts of law did not take notice of an equity or trust; 
 but of late years, as it has been found productive of great expense to send 
 the parties to the other side of the hall, wherever this court has seen that 
 the justice of the case has been clearly with the plaintiff, they have not 
 turned him round upon this objection. Then, if this court will take notice 
 of a trust, why should they not of an equity ? It is certainly true that a 
 chose in action cannot strictly be assigned, but this court will take notice 
 of a trust, and see who is beneficially interested.' " 
 
 We see here the old law — contracts must be sued upon in the 
 name of the original parties to them — law formulated for cer- 
 tain kinds of contracts, fading by usual process before the in- 
 troduction of other sorts of contracts to which it is inapplicable. 
 It is clear that these early judges were not conscious of excur- 
 sions outside the general law. They were quite aware that 
 they were dealing with a new kind of contract ; but they were 
 applying to it their general law, with such expansions to suit 
 noyel conditions as they could devise. 
 
 SUHHAKT. 
 
 Let us sum up the conclusions arrived at: 
 
 1. As to the alleged distinction between " negotiable " and 
 "non-negotiable" instruments upon the ground that "the per- 
 son who becomes holder may sue in his own name on the con- 
 tract," we may say : 
 
 (a) Originally and correctly the distinction was attributed to 
 the difference between the contracts themselves, and not be- 
 tween the general law and the law merchant. That is to say, 
 a contract with A. could not be sued upon by B. ; but a con- 
 tract with the bearer of a document could be sued upon by the 
 person so described. 
 
 (6) The distinction therefore is one between ambulatory and 
 non-ambulatory promises; and not one between bills and notes 
 on the one hand, and — covenants for title (for example) upon 
 the other. 
 
 (o) In any event the right to sue in the name of the trans- 
 feree was a mere point of practice in the courts. 
 
 (d) And has now by statutes been abolished. 
 
 2. Aa t^ t.hfl nt.hftr nllanro/l r1iefin/*t'i/\n tKot- a twnne.tr^t.nn.uUn^ 
 
 — — -«*WQ-.-*- ^..,».,..,,^,^.„ vutvv St vt ctnciT:ri i?^ uno 
 
 a good title notwithstanding any defect of title in the party 
 from whom he took it" — we may say: 
 (a) Transferees of " negotiable " instruments sometimes take 
 
890 
 
 OSTENSIBLE OWNERSHIP AND AOENCT. 
 
 E ' 
 
 'HI 
 
 t,i'i 
 
 It ,1 
 
 subject to equities, and transferees of other choses in action 
 sometimes take free from thcQi. _ 
 
 (5) Purchasers of such "non-negotiable" coranaodities as, 
 goods and lands often acquire better titles than those of their 
 
 vendors. , »^ 
 
 (o) And, as we shall see, for precisely the same reason as do 
 
 transferees of ♦* negotiable " instruments. 
 
 3 If by « negotiability " we mean merely Hi nsferabihty, we 
 better say so; for "negotiability" has now too many mean- 
 jncrs — or none at all. 
 
 4 There are two very distinct classes of choses in action, 
 which not being describable by any known terms may (until 
 better is suggested) be called ambulatory and non-ambulatory. 
 
 Betro8peot.-l^>o)s.m^ back over the many legal battle-fields 
 we can now see that this classification contains the principle 
 which was struggling towards the light; and we can rightly 
 gauge the forces opposed td it. The " wisdom of the common 
 law » declared against the recognition of trusts. Thus arose 
 the war of legal and equitable estates, not to be completely 
 terminated even by the annihilation of the contestants.^ The 
 same wisdom forbade the sale of rights of entry until overruled 
 by statute. And the same wisdom declared that " for avoiding 
 maintenance a chose in action cannot be assigned or granted 
 over to another." To this is due all the trouble about negoti- 
 ability To evade it all sorts of subterfuges and fictions have 
 been resorted to. Probably we have not altogether done with 
 them yet; and "negotiability by estoppel" has recently been 
 added to our perplexities.* 
 
 Fbsebom from Equities. 
 There are generally supposed to be two points at which 
 "negotiability" affects the rights of the holders of bills and 
 notes The first has regard to equities affecting liability upon 
 them; and the second relates to the equities of the real owner 
 of the paper against some holder of it who claims title through 
 a finder, a thief, or a fraudulent trustee. These two cases must 
 
 1 Recent, legislation in many juris- tates, by -i^»f J^« J^^^^V^Tttni 
 
 dictions has merged courts of equity a'f-«>f f/^ ^J **>; "°« ^^'^'^ *"'' 
 
 and law into one court Neverthe- tabooed by the other, 
 
 less we still speak o£ equitable es- ^See infra. 
 
actiou 
 
 ties as, 
 )f their 
 
 >n as do 
 
 lity, we 
 r mean- 
 action, 
 ,y (until 
 ulatory. 
 Lie-fields 
 )rinoiple 
 rightly 
 common 
 us arose 
 npletely 
 s} The 
 iverruled 
 avoiding 
 granted 
 it negoti- 
 ons have 
 one with 
 itly been 
 
 at which 
 bills and 
 ility upon 
 sal owner 
 e through 
 sases must 
 
 1^1 i.\.~^ 
 
 1 itivax: tiiiEXB 
 
 e court and 
 
 CH08E8 IN ACTION. 
 
 391 
 
 be treated separately in order to ascertain accurately the true 
 foundation of the law which governs them. The law we know 
 fairly well; what is the rationale of that law? 
 
 I. Equities of the Obligors. — There is a choice of explanations 
 in the case of the first of these problems (Why cannot the 
 maker of a note set up his equities as against a lona'fide trans- 
 feree of it?); and neither of them is indebted for its rationality 
 to the law merchant: 
 
 (a) One of them has already been indicated: the maker of a 
 note is liable upon it to a holder in due course, although he 
 may have equities, because 
 
 "the note is an original promise by the maker to pay any person who shall 
 I ?j™l' bearer; it is therefore payable to any person who successively 
 holds tho note bona fide, not by virtue of any assignment of the promise, 
 but by an original and direct promise, moving from the maker to the 
 bearer."! 
 
 Observe carefully what is here meant. It is not that the 
 transferee does not acquire title to a note " by virtue of any 
 assignment" of it; but that, having so acquired it, the promise 
 that he sues upon is one directly with himself. That is to say, 
 he does not allege that the maker promised the payee that he 
 would pay a third person ; but that the promise was to the 
 transferee, although at the time of the promise he was an un- 
 ascertained person. In this view the case would be analogous 
 to promises frequently made by advertisement to pay to the 
 finder of a lost article, in which the promise is not with the 
 newspaper (as we have noted), but with the person who an- 
 swers the description contained in the promise. Tlie promise 
 is " an original and direct promise moving from the " adver- 
 tiser to the finder. 
 
 (J) Perhaps, however, the better view is that of Page "Wood, 
 
 L. J., who, in holding a company liable upon its bonds notwith- 
 
 ing equities between it and the original holder, said: 
 
 " Where there is a distinct promise held out by the company informing 
 all the .world that they will pay to the order of the person named, it is not 
 •competent for that company afterwards to set up equities of their own."* 
 
 In other words, although there may be equities, yet the com- 
 pany is estopped from setting them np. It issued bonds re- 
 deemable to bearer; it was aware that the bonds, being ambu- 
 latory, would probably be transferred to third oarties: it mio-ht 
 
 1 Ante, p. 876k 
 
 »Re Oeneral Estates Co. (1868), L. 
 R 8 Ch. 758; 88 L. J. Ch. 283. 
 
802 
 
 OSTENSIBLE OWNERSHIP AND AOBNCY. 
 
 '■lii 
 
 ,!!'^ 
 
 have placed upoa the face of the bonds notice of the equities; 
 it enabled the original holder to deceive innocent purchasers, . 
 and it is consequently estopped from setting up its equities. 
 Here we arr *pon firm ground. No support is required from 
 the law merchant, nor from "negotiability." We are not in 
 antagonism t. ^ the general law. We are appealing to it. 
 
 II. Equitiea of the True 6>w>n«r.— When a thief, a finder or 
 a fraudulerigtrustee of a "negotiable" instrument transfers it 
 to a holder in due course, it is said that the transferee takes it 
 free from the equities, meaning thereby that a good title passes 
 to the purchaser. But the phrase is wrong. The transfer doe* 
 not affect any equity of the true owner of the document. It 
 disturbs his legal title. This premised, let us ascertain the ra- 
 tionale of the law. 
 
 The usual suggestion is " law merchant" and « negotiability 
 in hopeless antagonism to the general law : 
 
 «Thri law merchant validate in the interest of commerce a transaction 
 which the roSmSnIaw would declare void for want of title or authority." ^ 
 And thus, when the question of title to lost, stolen or mis- 
 appropriated bonds came to be decided, and the courts felt that 
 transferees in due course ought to be protected, the Canadian * 
 and American* judges declared that the bonds were " negotia- 
 ble." That was thought to be a sufficiently satisfactory solu- 
 tion of the problem. 
 
 In England ». different and a most peculiar course was adoptetU 
 Most of the judges were quite unwilling to hold that bonds 
 were "negotiable," and yet they were unable to see any other 
 ground upon which they could decide in frvor of the trans- 
 feree. They therefore determined that although bonds were 
 not « negotiable," yet that the persons dealing with them were 
 estopped by their form (payable to bearer) from so saying. 
 We shall return to this point. 
 
 "Negotiability," then, whether real or by estoppel, is th& 
 reason assigned for holding that the transferror's title may be 
 improved by his assignment; but this explanation is altogether 
 unsatisfactory, for " negotiability," as we have seen, itself stands- 
 very much in need of explanation. 
 
 Mnfcp.871 »Daniel on Negotiable Instru- 
 
 aMcKenzie "v. Montreal (1878X39 ments. g 1600. And see tn/ra. 
 U. a G P. 871. 
 
OfiOBES IN AOnOBT. 
 
 equities; 
 rcbasers^ 
 
 equities, 
 red from 
 re not in 
 
 it. 
 
 finder or 
 ansfers it 
 Q takes it 
 tie passes 
 isfer doe& 
 nent. It 
 in the ra> 
 
 liability 
 
 J^ 
 
 trAnsaction 
 uthority." ^ 
 
 3a or mis- 
 
 s felt that 
 
 >nadian * 
 
 " negotia- 
 
 tory sola- 
 
 s adopted, 
 dat bonds 
 any other 
 the trans- 
 jnds wer& 
 ihem were- 
 BO saying. 
 
 pel, is the- 
 ,le may be- 
 altogether 
 ,self stands. 
 
 Me Instru- 
 infrti. 
 
 Estoppel by Ostensible Ownership and Aoenot. 
 
 Although without much direct support, the present writer 
 ventures to suggest that the true foundation for the decision 
 of such cases is to be found not in " estoppel by negotiability,'* 
 nor in " negotiability " of any kind, but in estoppel by ostensi- 
 ble ownership or ostensible agency. 
 
 Let us commence with ^emo dat quod non habet. That prop- 
 osition looks as though it ought to be universally true. But 
 it is said that it fails in the case of " f tiable" instruments, 
 and that a man can give that whi^ti be h.hA> not got, provided 
 he is dealing with a " negotiable" lo nm^jni Is the principle 
 a true one ? And, if so, are " negotiac'rt ' doc ments exceptions, 
 and the only exceptions to it? 
 
 Let us remember that if a thief sells a horse in market overt 
 he gives a title that he has not got. And if a mortgagor, hav- 
 ing been foolishly intrusted by the mortgagee with the title- 
 deeds, conveys to an innocent purchaser, ho gives that which 
 he has not got.' In short, the cases are legion in which osten- 
 sible owners of property give bona fide purchasers that which 
 they have not got. 
 
 But we are going much too fast, and, although with plenty 
 of precedent for it, are using language in much too loose a 
 fashion. Is it true that an ostensible owner of property can 
 convey to a purchaser a better title than he has? Should the 
 true owner of a horse stand by while a pretending owner sold 
 the animal to an innocent purchaser, it would be quite inac- 
 curate to say that the vendor gave a better title than he had. 
 He could not do so. And the language really imports nothing 
 but this: that although the purchaser has acquired no title at 
 all, yet that the true owner is e;>iopped from so sa^'ing. 
 
 Nemo dat quod non habet is then true — universally true; but 
 its truth in no waj'^ prevents an owner of property from being 
 estopped by his conduct from setting up his good title as against 
 a transferee who has none.' 
 
 That is the point. And it applies as well to " negotiable " 
 instruments as to all other sorts of property. When so applied 
 
 * Ferry-Uerrick v. Attwood (1857), 
 2 De O. & J. 21; 27 L. J. Ch. 121; 
 Brockleflby v. Temperance (1895X A. 
 C. 178; 04 L. J. Ch. 438. 
 
 '■'See a good discussion of the 
 maxim ib McMahon t. Sloan (1849), 
 12 Pa. St 220. 
 
394 
 
 •OSTENSIBLE OWNERSHIP AND AGENCY. 
 
 it solves all the difficulties which, being thought to be insolv- 
 able, have been referred to the inscrutable play of the law- 
 merchant operating in antagonism to the common law. 
 
 Eertiembering, then, that ostensible ownership may often 
 estop a true owner (of all sorts of property) from setting up 
 his title as against an innocent purchaser, attention must be 
 directed to the fact that the appearance of ownership takes its 
 color sometimes from the character of the property in ques- 
 tion, sometimes from the nature of the usual employment of 
 the ostensible owner, and sometimes from the customs of the 
 locality in which the transaction takes place.' Observe next the 
 distinction between the appearance of ownership (1) of goods 
 and (^) of ambulatory instruments. Possession of goods is 
 (usually) no indication of ownership of them, and therefore no 
 one is misled by possession ; but — 
 
 "Every holder of the bill takes the property, and his title is stamped on 
 the bills themselves. The property and possession are inseparable. This 
 was necessary to render them 'negotiable; and in this respect they differ 
 essentially from goods of wliich the property and possession may be in 
 different persona"* 
 
 A holder of a bill then appears to be the owner of it, while 
 there is usually no such appearance in the case of goods. Now 
 the law of estoppel by ostensible ownership of goods is well 
 known, and may shortly be stated to be, that if an owner per- 
 mit another to appear to be the owner he will be estopped as 
 against persons dealing with that other. And the rule includes 
 of course ambulatory instruments; the only distinction between 
 them and goods being as to the circumstances which constitute 
 
 iSeech. XXVL 
 
 a Collins v. Martin (1879). 1 Bos. & 
 P. 651. And see per Lord Mansfield 
 in Peacock v. Rhodes (1781), Doug. 
 636; Saltus v. Everett (1838), 20 Wend. 
 (N. Y.) 276; Murray v. Lardner (1864), 
 2 Wall. 110; Craig v. Vic' burg 
 (1856), 81 Miss. 216; Commissioners 
 V. Clark (1876), 94 U. 8. 278, 285; Mar- 
 tin V. Martin (1898), 174 111. ;i; 51 
 N. K B. 691; Cent Dig. vii, 3351, 2, 8. 
 The language quoted in the text is 
 
 book-keep' r. What is meant is that 
 possession and appearance of prop- 
 erty ac } inseparable. Even that is 
 not universally but only commonly 
 true. Circumstances may sometimes 
 indicate agency, and not title. It is 
 very instructive in this connection 
 to note the reason why assignment 
 of a bill or note by a separate paper, 
 and not by indorsement, is said to 
 pass the equitable title only: "For 
 such mode of transfer separates the 
 
 icacCUraie 
 
 PrOjjcrtjr anil possss* 
 
 rkf o^cershi*^ from th€ 
 
 siou of tiills, as of au^ut else, are 
 separable; otherwise I could never 
 bring trover for bills against my 
 
 paper itself." See Daniel on Nego- 
 tiable Instruments, g 748. 
 
 I Mi 
 
 'i"i 
 
0HO8E8 IN ACTION. 
 
 395 
 
 5 insolv- 
 the law- i 
 
 »y often 
 tting up 
 mast be * 
 takes its 
 in ques- 
 rraent of 
 [IS of the 
 next the 
 of goods 
 goods is 
 •efore no 
 
 knmpecl on 
 ible. This 
 ;hey differ 
 may be in 
 
 it, while 
 3s. Now 
 s is well 
 ?ner per- 
 opped as 
 includes 
 between 
 onstitute 
 
 ant is that 
 36 of prop- 
 ren that is 
 commonly 
 sometimes 
 title. It is 
 connection 
 issignment 
 rate paper, 
 , is said to 
 only: "For 
 parates the 
 from tlie 
 il on Nego- 
 
 appearance of ownership. In the case of ambulatory docu- 
 ments mere possession of them is enough;' while as t6 goods 
 sthere must be something more. But in both cases alike the 
 true owner must avoid the appearance of ownership in another 
 person. And therefore the owner of an ambulatory instru- 
 ment must, if he wish to be safe, keep it in his own possession. 
 
 Estoppel hy Ostensible Agency. — Sometimes the validity of a 
 transferee's title must be attributed to ostensible agency rather 
 than to ostensible ownership. In the case of goods, for ex- 
 ample, the owner may be estopped by a person alleging his 
 agency to sell, although none in fact existed — if the owner has 
 permitted the appearance of agency. The usual case of a sale 
 by a factor in defiance of his instructions is a suflBcien illus- 
 tration of the point. In the same way a bill-broker having bills 
 in his possession may be understood to be an agent merely ; and 
 a transferee of the bills would therefore be unable to plead chat 
 the broker was the ostensible owner of them. Ostensible agency 
 to deal with the bills would answer the same purpose. 
 
 Lo§t or Stolen. — It may be suggested that this explanation 
 is insuflBcient in the case of lost or stolen documents. No 
 doubt it may be said if an owner of bills or of goods permit 
 the appearance of ownership or agency in ansther person he 
 ought to be estopped as against an innocent purchaser; but 
 bow can that apply to cases in which the true owner gives no 
 such permission, to cases in which, indeed, he may be actively 
 endeavoring to neutralize false appearances? 
 
 Much analogy to the law of estoppel is to be found in the 
 department of torts which declares for liability as well where 
 injury is due to carelessness as where it is the result of pre- 
 meditation. And so also in the law of estoppel if, through 
 the carelessness of the true owner of -property, another person 
 is enabled to pose as its owner, he ra ly be estopped to the same 
 extent as if the deception were designed. 
 
 An owner of ambulatory instruments is aware that posses- 
 sion of them is evidence of their ownership. It behooves him, 
 therefore, to exercise " consummate caution " with regard to 
 them, and if they escape him, he and not an innocent purchaser 
 
 1 Possession of an equitable assign- ship of the fund. State v. Hastings 
 ment of money is ostensible owners (1862), 16 Wig. SUL 
 

 11 
 
 . ! PI 
 
 li! ill 
 
 ml' 
 1,1 iJii.. 
 
 I 
 
 
 i 
 
 iiiiiiiil 
 
 896 
 
 OSTENSIBLE OWNERSHIP AND AGENCY. 
 
 This law is not more drastic than that which 
 
 ought to suffer. 
 
 provides that 
 
 "more than ordinary care, nay 'consummate caution,' I is reauired of ner. 
 sons dealing with dangerous weapons; » a required or per- 
 
 and is supported by the dictum of Lord Coleridge: 
 
 thiitl^aThi '^^Z^ more careless with regard to the custody of a thing 
 ceSyr ? available only by means of forgery than if 6y mere lar- ^ 
 
 more careless, for example, of a wardrobe, than of money or 
 company bonds. 
 
 Owners of ambulatory instruments have two courses open to 
 them. They may, by appropriate indorsement, restrict the 
 transferability of their documents; or they may leave them 
 payable to bearer. If they adopt the former alternative they 
 are safe from loss and theft. But if, for their own purposes, 
 they prefer that the instruments should remain payable to 
 bearer, they must provide sufficiently against their escape, in 
 order that innocent purchasers may not be swindled. This 
 doctrine found acceptance^as early as 1764: 
 
 and o™n?^^t ^f **'^?'**'"*"** */! >°°««ent. vet as Bicknell lost the note 
 and Grant took it m the coursa of trade bona fide and upon a valuable con! 
 sideration. Grant has the better equity. But if their^equity were oSy 
 *S-fi« m"L'"'°«°*°^ 8*^^ >■"'« '^»t mdiorest conditio posliSLHul 
 side and none on the other, that also would turn the scale; ac^if there be 
 f«Y/w.^A*''"*•^^**.*^''' pa«« it should seem to have be;n rather Impi^ 
 
 And in 1820 Mr. Justice Best, in dealing with misappropri- 
 ated exchequer bills, which the owner had kept in blank instead 
 of rendering them useless to others by filling in his own name 
 said : * 
 
 "It is the plaintiff's own negligence in not filling up the blank thafc hait 
 
 If^Sf?^'^ ^Tr^^^^^.H ^H defendants to ascertain thJt he Sd ad? 
 r ght to it; and It would therefore be inconsistent with the law of justice^ 
 that under such circumstances he si Ud be allowed to call on them to 
 make good the loss that had arisen from the fraud of his agent" • 
 
 'Per Earle, C. J., in Potter v. 
 Faulkner (1861X 1 R & a 805. And 
 see Dixon v. Bell (1816), 5 M. & a 
 198. 
 
 * Pollock on Torts (5th ed.), 46, 455. 
 
 'Arnold v. Cheque Bank (1876). 1 
 0. P. D. 581; 45 L. J. C. P. 662; 
 Hatchett v. Gibson (1848X 18 Ala 687. 
 
 -r^i TTiiiuut, .;., in uranc v. 
 Vaughan, 8 Burr. 152ft See the same 
 reasoning applied to vouchers in 
 
 Cowdry v. Vanderberg (1870), 101 U. 
 a 672; to bills of lading in Lickbar- 
 row V. Mason (1787), 2 T. R. 71; to 
 stock certificates, with blank but 
 signed transfers and powers of at- 
 torney, in National v. Gray (1898). 12 
 App. D. C. 27ft Contra, Scollans v. 
 Rollins (1899), 58 N. E. R 868(Mas8.X 
 
 s More specifioaiiy estoppel. 
 
 •Wookey v. Pole (1830X 4 R & 
 Ald.L 
 

 CH08E8 IN ACTION. 
 
 397 
 
 Bills and notes if stolen or found may be passed with a good 
 title ; bonds may now be said to be |n the same category t Uhev 
 are so placed because they are of ambulatory character; and 
 the same considerations that warrant such law as to these in- 
 struraents will justify the application of its fundamental prin- 
 ciple to all other ambulatory documents. Let their owners 
 observe « an appropriate measure of prudence to avoid causing 
 harm " to others.' v ° 
 
 Estoppel and Ambulatoet Instruments. 
 
 Aided by the principles of estoppel let us for a moment con- . 
 aider an ambulatory instrument apart from all legal notions of 
 negotiability and law merchant and fictions. The case is the 
 simplest. Take the usual points: 
 
 1. I promise to pay to A. or bearer; or a company issues a de- 
 benture payable to A. or bearer; or a bank issues a deposit 
 receipt redeemable to bearer; or a man gives me a voucher 
 payable to my order; there are equities between the original 
 parties to the document; but these equities cannot be set up 
 between the obligor and the transferee. Why? Because the 
 obligor intended the document to be ambulatory; he enabled 
 the holder to pass that which appeared to be an unconditional 
 obligation; and he is estopped by the assistance which he has 
 rendered to the misrepresentation of no equities 
 
 2 I give to « Galley » an acceptance, blank ks to amount, 
 authorizing him to fill it up for £100; he inserts £200; and I 
 am liable to a holder in due course for the larger amount. 
 Why ? Not because Galley had authority ; nor because he must 
 (despite the evidence, and by fiction) be held to have authority • 
 but because he had ostensible authority to fill up the blank for 
 any amount the stamp would cover;' and I am estopped be- 
 cause I equipped him with such appearance of authority.* 
 
 » Venablea v. Baring (1892), 8 Ch. 
 C27; 61 L. J. Ch. 609; Bechuanaland 
 V. London (1898), 8 Q. R 668; 67 I* J. 
 Q. B. 986; Trust & Loan Ca v. Hamil- 
 ton (1857). 7 U. G G P. 98; Wliiteside 
 V. First Nat. Bask (1898), 47 a W. R. 
 1108 (Tenn.). 
 
 ^Ante, p. 80. The law has not, 
 however, as yet gone that far. Ex 
 parte Swan (1859), 7 G B. N. S. 400; 
 
 80 L. J. G P. 118; Swan v. North 
 a A. (1868), 7 H. & N. 608; 81 L. J. Ex. 
 486; 8H. & G 175; 83 L. J. Ex. 878; 
 Bangor v. Robinson (1893X 68 Fed. R. 
 
 680. 
 'Or for asT 
 
 
 jurisdictions where there are no 
 stamp lawa 
 
 <SeeohaXXV, XXVL 
 
398 
 
 OSTENSIBLE OWNERSHIP AND AGENCY. 
 
 il!i!il;i 
 
 I; I i 
 
 JiPli, !w 
 
 i.!'iiil 
 
 3. Suppose that the holder of an ambulatory instrument in- 
 trusted it to some agent, who fraudulently transferred it to an 
 innocent purchaser; the holder must sustain the loss. Why? 
 Because the agent appeared to be the owner of the instrument; 
 the true owner enabled him so to represent; and the true 
 owner is therefore estopped by the assistance rendered to the 
 misrepresentation of ownership. Possession of a chattel is not 
 usually ostensible ownership of it, but 
 
 ery holder of the bills takes the property, and his title is stamped on 
 bills themselves. The property and possession are inseparable."^^ 
 
 The holder of a bill or note is therefore the ostensible owner 
 
 "ever 
 the 
 
 C? it. 
 
 4. Suppose that the holder of such an instrument loses it, or 
 that it is stolen from him; a transferee of a finder or thief 
 will take a good title. Why ? Because of the ostensible owner- 
 ship of the finder or thief. But how has the true owner as- 
 sisted in any misrej^resentation of ownership? By lack of 
 vigilance in its custody g or, at all events, by the fact that he 
 chose, knowing the risk, to keep the instrument in easily trans- 
 ferable form. He might have restricted its negotiability by a 
 word. He cannot, for his personal convenience, throw risks- 
 upon other people. 
 
 Illustration.^. — A few words in illustration : If 1 send my 
 horse to boarding-stables, no one has the right to presume that 
 the horse is there for sale. But if I should send him to sale- 
 stables — that is, to a place which is devoted solely to the cus- 
 tody of horses on sale,— I would certainly be estopped by 
 ostensible agency from asserting my title as against a pur- 
 chaser in due ooursei.' No special law decrees this difference. 
 The general law of estoppel is ample. In the first case the- 
 circumstances do not amount to a representation of agency l 
 in the second they do; and ostensible agency may result in ep- 
 toppel. Precisely the same law applies to bills and notes. 
 Blanks in them indicate agency to fill up, and ostensible pov-er 
 will estop. 
 
 In France the rule as to movables is " Possession vaut titre.'* 
 Chattels "are there on the same footing as these bonds, trans- 
 ferable by delivery, are with us."» But it is impossible to say 
 
 MacNider (1895), 25 S. C. Can. 278.. 
 
 Mn<e;p.804 
 
 3 See oh. XIX. 
 
 • Per Ritchie, C. J., in Young v. 
 
 But see per Blackburn, J., in City 
 Bank v. Bai-row (1880). 5 App. Gas. 078, 
 
0H08E8 IN ACTION. 
 
 399 
 
 strument in- 
 srred it to aa 
 loss. Why? 
 iastram^nt; 
 nd the true 
 dered to the 
 {battel is not 
 
 is stamped on 
 larable."* 
 
 Qsibie owner 
 
 it loses it, or 
 
 der or thief 
 
 isible owner- 
 
 e owner as- 
 
 By lack of 
 
 fact that he 
 
 easily trans- 
 
 iability by a 
 
 , throw risks- 
 
 f I send my 
 presume that 
 him to sale- 
 y to the CU8~ 
 estopped by 
 ;ainst a pur- 
 is difference, 
 irst case th& 
 I of agency J. 
 J result in es- 
 s and notes, 
 nsible pover 
 
 n vaut titre.'* 
 bonds, trans- 
 jssible to say 
 
 S. C. Can. 278.. 
 urn, J., in City 
 i.6App.Cas.078,. 
 
 that m France it is the law merchant that declares in the in- 
 terost of commerce, as to all movables, that "honest iacquisv 
 tion confers title." It confers title because "possession vaui 
 titre; and that is the reason also with us in the case of bills 
 and notes. 
 
 Suppose that a mortgagee intrusts the deeds to tyhe mort- 
 gagor, who fraudulently deposits them as security for a loan- 
 the mortgagee is estopped. Why? Because he has enabled 
 the mortgagor to appear as the unincumbered owner » That 
 is an application of the familiar rule of estoppel. Now sup- 
 pose that the owner of a bill intrr?ts it to another, who fraud- 
 ulently transfers it for his own benefit; the owner again loses. 
 But this IS said to be by virtue of the law merchant, which 
 • validates m the interest of commerce a transaction which the 
 common law would declare void." ^ The results are identical, 
 but are said to be arrived at by antagonistic principles. 
 
 The holder of a note and a land mortgage as collateral se- 
 curity placed them iq the hands of another under such cir- 
 cumstances as enabled the latter to represent himself as their 
 owner; he did so, and assigned them to an innocent purchaser » 
 And are we to say that the law which declared in favor of the 
 transferee as to the mortgage was the common law; that the 
 law which declared in his favor as to the notes was the law 
 merchant; and must we add, in the latter case, that "to this 
 despotic but necessary principle the ordinary rules of the com- 
 mon law are made to bend"" 
 
 s» 
 
 If "negotiability" and legal estate principles are to con- 
 tinue to influence decisions, the effect of the statutes authoriz- 
 ing the assignability of "non-negotiable" choses in action will 
 raise some perplexing questions. In this way: Bills and notes 
 were assignable at law; a purchaser of them for that reason 
 (shall we say?) took them free from equities; now by statite 
 other choses are transferable at law; purchasers of them there- 
 fore ought also to take free from equities; but the same statute 
 provides that they are to be held subject to equities. 
 
 S- J. i?l JJ:ilTu.^^"r. ^?.« fj^^'^t'^l V. Temperance (1895). A. 
 
 cjple: See g§ 931-935. 
 iPerry-Herriok v. Attwood (1858), 
 
 'See ante, p. 371. 
 
 'See ante, pp. 19, 20, note. 
 
400 
 
 OSTENSrs 
 
 OWNERSHIP AND AGENOT. 
 
 ^ii 
 
 The difficulty is emphasized when attention is directed to a 
 " negotiable " and a " non-isegotiable " note. A note may be 
 made payable to " A. and ivp other pen;on." Prior to the stat- 
 utes such an instrument could not be transferred at law, al- 
 though it was assignable in equity. It may now be oompletaly 
 transferred, and the legal property will pass to the purohaeer. 
 Why then does the statute provide that the usual e!Tect of an 
 assignment of a legal interest shall not en -.e? "W !s y vill the 
 purchaser not take free from unknown equity? 
 
 The answer is to be found only by disregfii ling old idea' of 
 "negotiability ' and lef^al estate, rnd by attending to the lis 
 tinotion between conti' vJi .yhich are intended by the parties 
 to be ambulatory, and thvi^» vci 'rb are Attended to be fulfilled 
 as between the parties only. Ft r nJthougu now both classes of 
 contracts are assignable at fry, and therefore the principles 
 regulating the rights oi trant^ferees of them must be identical, 
 that is far from sayiog that, all distinction which exists in the 
 contracts themselves must'be abolished. It will at once be seen 
 that if I promise to pay to " A. or bearer," a transferee of the 
 con i "act may well assume the absence of equities between me 
 and A, -, whereas, if I promise to pay to " A. and no one else," 
 the opposite assumption should be drawn. If I made a note to 
 "A. or bearer" and underwrote a warning as to equities be- 
 tween A. and me, a transferee would take subject to such equi- 
 ties. Kestricting the negotiability of a note by drawing it to 
 *^ A. avid no one else " has the same eflfect. 
 
 If then we ask. Why is it that transferees of bills and notes 
 take free from equities, and the assignee of some other instru- 
 ments do not? the answer is as follows: Bills and notes are 
 usually intended to be ambulatory — intended to be redeemed 
 to third parties; and these other instruments, although aBsign- 
 able at law, are usually intended to be redeemed a^ between 
 the original parties to them ; to both oases must be applied the 
 principles of purchasers for value without notice and estoppel ; ' 
 certain instruments indicate by their form the absence of equi 
 ties, while certain other instrun 's carry with them (exy. 7.?^^ 
 or by convention) a warning oi dee of equities; a port . .i«54 
 
 »In the light of chapter XI the out notice and" might be om ' , ■ 
 words "purohasen for value with- from this sentence. 
 
 
OH08E8 IN ACTION. 
 
 401 
 
 ; be oni.i?iAKl 
 
 for value may take free from equities of which he has no no- 
 txc, but not from those of which he had warning. ' 
 
 Taere seems, then, to be a very plain path through all this, 
 wbon the law merchant obstructions are removed. The prin- 
 c!| ^3 employed is not onlynot antagonistic to the general law 
 but 18 a part of it. And that principle is at the present time 
 in very active operation, and is being applied, although not al- 
 ways consciously, to the decision of many cases. 
 
 NEGOTIABILI'Tr BY EsTOPPEL.* 
 
 Although the reader may now see his wav through the vari- 
 ous difficulties with which we have been dealing (without the 
 aid of law merchant or "negotiability »), he cannot afford to 
 be Ignorant of the doctrine of "negotiability by estoppel" 
 which has been put forward as the solution of all such ques- 
 tions, and a few pages must therefore be devoted to it 
 Pressed by the apparent impossibility of applving the word 
 negotiable" to bonds- documents under seal with various 
 contractual complications - it was at length ingeniously sug- 
 gested that the parties might be estopped from saying that such 
 instruments were not negotiable. In other words, that al- 
 though the courts themselves would have to declare as a mat- 
 ter of law that certain documents had a certain character and 
 none other, yet that a litigant could not only contend to the 
 contrary, but might even preclude himself from assertino- the 
 law to be that which it indubitably is. 
 
 Observe the wide difference between this sort of estoppel 
 and that above suggested, namely, that a man may be estopped 
 from denying the ostensible ownership or agency of another 
 person Estoppel from denying negotiability means, or implies, 
 this : If these documents were by law negotiable, the transferee 
 would have a good title to them, free from equities; the owner 
 IS estopped from saying that they are not negotiable; there- 
 fore the transferee has a good title. The other view is entirelyr 
 different. It is this: If the transferror had been the owner of 
 these documents, or had he had the owner's authority to sell 
 
 them, the transfflrAo nrrkni/i hn^j^ « « i a.-ai.. x.. 
 
 ,,„rv a gvuu i.i\,i{:; ihe owner is es- 
 
 86 
 
402 
 
 OSTBNStBLB 0WNEK8HIP AND AGENCY. 
 
 II !l 
 
 
 1 1 
 
 if m 
 
 topped from saying that tho transferror was not the owner or 
 his duly authorized agent; therefore the transferee has a good 
 title. In the former case the estoppel is as to the legal char- 
 acter of a document. In the latter as to ownership or agenby 
 with respect to it. With the latter olass of cases — estoppel by 
 ostensible ownership or agency — we are perfectly familiixr. ^ 
 Estoppel as to the legal character of a document is novel. 
 Negotiability by estoppel was put in this way by Lord 
 
 Cairns: 
 
 "Tlie scrip itself would be a representation to any one taking it— a rep- 
 resentation whicli the appellant must be taken to have made or to have 
 ȣen a party to-that if the scrip were taken in good faith and for value 
 the t^rson taking it would stand to all intents and purposes m the place 
 S th^previous Ker. Let it be assumed for a moment that the .nstru- 
 ment was not negotiable; that no right of action was transferred by the 
 dSivervTand that no legal claim could be made by the tak,,r in his mva 
 name against the foreign government; still the appellant is in the positioij 
 Sf a peilon who has mtde a representation on the face of his scrip that ,t 
 would pass with a good title to any one on his taking it in good faith and 
 fo?val5?; and who^has put in the power of hs agent to Tiand over the 
 snrio with this representation to thosa who are induced to alter their posi- 
 «o7on the fiithSf the representation. My lords. I Am of opin on that on 
 dSrinesweU established, of which Pickard v. Sears must be taken to be 
 aS^exaTpirthrappellant cannot be allowed to defeat the title which the 
 respondents have thus acquired." ^ 
 
 This is the view that the estoppel is as to the legal character 
 of the document. The representation " made on the face of hia 
 scrip " is " that it would pass with a good title." 
 
 In the same case Lord Hatherly presented the other view, 
 namely, that the broker was the ostensible owner or agent for 
 the sale of the scrip; that the true owner had enabled the 
 broker so to appear, and that the owner was therefore estoppeil. 
 But, strangely enough, he indicates that this view is the same 
 as that propounded by Lord Cairns. Lord Hatherly said: 
 
 "The appellant, therefore, gives the broker scrip which is and for the 
 last fifty years has been disposed of every day m the market, and has tor 
 Si those vearal«en so disposed of upon the sole representation by the 
 holder°tle seTleror pledger to the pereon towhom fie wishes to sell or 
 pledge it. and that without any suspicion being aroused to suggest the ne- 
 cessftv or even the propriety of asking a single other question. Can a 
 ™n whoTn that manner Quired the instrument, who knows that a* 
 tone as he has it safe in his pocket, in his box, or m his desk, he can re y 
 on that ins rument; but that as soon as he parts with it the new holder will 
 Is he did. become in a position to claim those bonds which he himself might 
 have claimed if he ha(f retained possession of t»»e scr.p -can he. by plac- 
 ing it in the hands of a broker, with no instriictions «;l»atever, except to 
 difpose of it as he may direct -can he according to the principle of the 
 ca^hichwere refer/ed to in the course of the argument, with regard to 
 SiTdnnana,,. hold anv nerson to be bound by that limited agency, when, 
 on'the fiEe of it, that which constitutes, you may »ay. li.e »"*^»i^"^f °\^"^* 
 agent, namely, the possession of the document, appears to be sufficient 
 
 I Goodwin V. Robarts (1876). 1 A. C. 490; 45 L. J. Q. B. 74a 
 
 
CH0SE8 IN ACTION. 
 
 408 
 
 kvner or 
 J a good 
 ul char- 
 agenCy 
 )ppel by 
 amilUir, 
 rel. 
 )y Lord 
 
 it— are p- 
 r to have 
 for value 
 the place 
 lie instru- 
 ■ed by the . 
 a his own 
 le position 
 ip, that it 
 faith and 
 I over the 
 their posi- 
 >n that on 
 iken to be 
 which the 
 
 (haracter 
 ice of his 
 
 ler vieu% 
 igent f«jr 
 ,bled th& 
 3stoppetl. 
 the sanie 
 said: 
 
 ind for the 
 ind has for 
 ;ioa by the 
 I to sell or 
 lest the ne- 
 on. Can a 
 }W3 that a» 
 \\e can rely 
 holder will, 
 nself might 
 he, by plac- 
 r, except to 
 ciple of the 
 I regard to 
 ency, when, 
 
 6 sufficient 
 
 r4a 
 
 /irj%ii'a^?felt?rc^^^^^^^^^ -^thrny noble and 
 
 of on tlitt ground alone? t'^^nking that this case might be disposed 
 
 In a later case ' the court of appeal judges adopted Lord 
 Cairns' view holding that the owner must lose because he wis 
 aware that, although the bonds were 
 
 tw^ln «itanS"""''' ''•'"""^'' '""'^ -"« *o be treated as such be- 
 Bowen, L. J, referred to both views of estoppel, and indi- 
 cated that, practically, they ran into one another!^ He saii 
 
 poin?s'rf?°'bTprtSctJr^^^ -ith fron, tWo 
 
 that Lord Sheffield - having dB in f Ha h-n^f »""*'»«'•• You may say 
 with the intention that they shS be fmSsfprr.H t"*^!f **l*^«"« '^""'^^ 
 and held his agents out to tL woddas clS/wth^^^u"'*-.*''!^^ *8^"^«' 
 them as negotiable, cannot after wArrtawo ''i** authority to transfer 
 limitation of autKy whLK h/« ^«/f *%^^ ''^^''"K or any 
 
 those who took the M whiS! JrveTenTo fl"c!^te? "?f "*'' P'"^*"^''^^ 
 that as regards Lord Sheffield anTILK ,^u°^^^^' ^'^ ^O" ™ay say 
 negotiable\y estoppel,^aS ttre^ore Lorf SheZlJ'T'*" ^V% W"« 
 saying that tf.e leg^T title to tKSds S not inS'binf '^"'"''^ *'°^" 
 In ZoT>donv. Simmons^ Lord Watson recurs to Lord Cairns' 
 view of « negotiability by estoppel." He said • 
 
 do^umet wSl '^sTS {.and 'toai^ii^ ?' *° ^P'--* '»'*' *»>« 
 
 be entitled to c& f uTflTlit of ite termS." "'"' * ^''"" "^^^ ''^^^^ ^"» 
 
 But he seems also to approve of the other view, for he added • 
 
 thin^ t'fndtlt^S^^i^^o^nt™;; rhaf wlifh^e^XC J'^f^^^^S °^ ^y' 
 mar or to a customer, he hld^fS^Kioift^^^; d*e'a^^ w'iJhlh^i^.'?^^'^ *** '^'^ 
 The present writer has found it impossible to accept Lord 
 Cairns view of estoppel, although so substantially indorsed. 
 Eeduoed to simple terms the proposition is this: A non-nego- 
 tiable instrument payable to bearer is in itself a representatio.. 
 that It is a negotiable instrument, and such representation will 
 estop some one from denying that such is its legal effect. But 
 surely a non-negotiable instrument or any other document can- 
 not m Itself be a representation that it is anything but what 
 n IS. If, connected with the instrument, there was some mis- 
 representation of its character, that would be another matter 
 A man may allege that he is a woman, but he can hardly, him* 
 self, be such a represe!T^^^tion. 
 
 Observe further thu^ .ae point is that the document is a rep- 
 resentation "that it would pass, with a good title, to any one 
 
 J^n"«'i^;fr°V!.'':^'*"''^'^^^^' ^*"^' (^888), 18 A. C.333; 57 L. J 
 S4 Ch. D. 95; 56 I* J. Ch. ,69; S. C. Ch. 986 . «*« i* J. 
 
 ««6 nonu Sheffield v. Lc ,lon, eta 2(1893; A. C. 813; 61 L. J. Ch. 72a 
 
404 
 
 OSTENSIBLE OWNERSHIP AND AGENCY. 
 
 on his taking it in good faith an^i ' < ine." But the only 
 feature that can be referred to . iuopo* o of this is that the i 
 instrument was payable to " beartr, ar.d that surely cannot 
 amount to a representation tlmt according to law tlie title of 
 a new bearer would be any better than that of an old one.^ 
 
 Another essential ingredient, too, of estoppel is entirely ab- i 
 sent from the cases, namely, evidence that the ■ ' of the 
 bonds was misled by the misrepresentation, and upon the faitii 
 of it changed his position. The probabilities are that he had 
 exactly the same (pinion as the true owner of the documents 
 had, and that he aci.-d exclusively upon his own ideas of nego- 
 tiability. 
 
 Considerations in Scppobt. 
 
 Market Overt.— It is noteworthy that the application of the 
 law of estoppel suggested by the present writer, or something 
 very nearly akin to it, wa* the foundation for holding that a 
 purchaser from a thief in market overt was to be protected 
 from the true owner. Cockburn, 0. J., in Crane v. London 
 
 said: 
 
 "Look to the origin of the law as to such salea It arose at the time 
 when there was much greater simplicity of practice between buyer and 
 seller. The practice then was to buy in markets at fairs. Shops p 
 verv few in London, and persons wliose goods vere taken feloniously 
 would know to what place to resort in order to iind them. I can therefore 
 quite understand that the law in question was establisl d for the protec- 
 tion of buyers, that if a man did n ■ pursue hin goods o market where 
 such goods were openly sold, he ougi nt to ' erfere v, the right of the 
 honest and honafide purchaser."* 
 
 Observe the close analogy here presented to estoppel as ap- 
 plied to bills and notes. As we bav.: seen, " title is stamper^ on 
 the bills themselves;" the holder .nay, thereto e, properly be 
 presumed to be the owner; the real owner mie-bt have kspt 
 them " in his pocket; " but if he permitted others to have them, 
 the representation of ownership which tht.^ ars 1 with them 
 would estop him rr< -n asserting iiis title. o i' a in the case 
 of sales of wods ia market overt. There possession indicates 
 ownershii., and if a man does not " pursue his goods to maN 
 ket," but allows the representation of ownership in others to 
 be made, " he ought not to interfere" — he is estopped. 
 
 iSee tlie judgment of the same Williams v. Colonial Bank (1888), 36 
 learned iudge in Re Natal (180 ), L. Ch. D. 659; 57 L. J. Ch. 826. 
 R 8 Ch. aOO; 87 h, J. Ch. 863. Also «(1884) 5 R & S. 818. 
 
OH08E8 IN ACTION. 
 
 405 
 
 the only 
 I that the 
 y cannot 
 le title of 
 I one.^ 
 tirely ab- 
 s. of the 
 the faitn 
 at he had 
 ocuraents 
 3 of nego- 
 
 ion of the 
 jomething 
 ing that a 
 protected 
 ;. Loiidon 
 
 at the time 
 I buyer and 
 Shops v-t^re 
 feloniously 
 an thorefore 
 r tht piotec- 
 ai'ket wliere 
 right of the 
 
 ppol as an- 
 tarapef^ on 
 roperly be 
 have kapt 
 liave them, 
 with them 
 n the case 
 n indicates 
 ds to ma^- 
 1 others to 
 )ed. 
 
 ink (1888), 36 
 828. 
 
 Lo98 of Seal.— Further support for the views advan^sed may 
 be gathered from the olden times, when every man of property 
 had his own distinctive seal, with which, rather than with his 
 signature, he executed his obligations. In those days a finder, 
 a thief, or a fraudulent custodian of the seal might bind the 
 owner in favor of innocent persons, upon the ground that «/<? 
 (the owner) should have taken better oare of it." Sufficient of 
 the learning upon this subject for present purposes is contained 
 m ti >^ following extract from a judgment of Wills, J • 
 
 says that a man may get rid of hia deeds by showing varTiS mattera'^'sSi 
 as duress, mistake, or the like, but adds the qualificStro"t"at7ftercm^«^&« 
 notmgtn the u-ay of negligence on his own j«rt-Min in fusting Eeal 
 to his seneschal or his wife. Britton says tWt .t man mav plead that tlfa 
 writing ought not to affect him. for when it was made he iad lost hfs sea! 
 ai_.^ caused It to be cried and published at the churches and m°ukets- so 
 that If anything was made un5er that seal after acertain day on which it 
 was lo^.l It ought not to aflfeot him (book 1. ch. 29. pi. "x A SoJs account 
 is given ,1 Mr. Nicholl's note (vol. 1, p. 164 of his edition^ of » nW?.f fh^» 
 descripti r, relating to the seal of AVSolddeThorley 'which wff me't ^nd 
 AssizSaO rnfn.Th''^*^'"''** of acknowledgiient at the Hertford 
 ^ertU^nf;nt« i t.!; i '^^ f ^^ »" question by the said Arnold; and two ad- 
 
 sealefwitS ft Ir . /frtlU T^' '^*7J".« 9^ P"^"° *^«* ^^^ instrument 
 seaiea w itn it er a certain day would be forgery, are eiven in Blount's 
 
 .^rl^clduc'' in rle't' '''hn "'"^? "SigiUum." «' passage 'f?om BrSn 
 
 ruJrb^t^w'ith'ut'^a.'^ ttiS reSa?. i*'^ ""^ °' ^"'^ ^'^'''««°*^ «- 
 
 Neglect as tr the c usto^ly of your property then, be it horses, 
 seals or transferable documents, may, where other persons are 
 misled hy ostensible title in possessors of them, estop the owner 
 from following his property. This is general Uw and was nr 
 borrowed from the law merchant.' 
 
 Further Cons/' deration in Supporf.— Acknowledging that 
 there is not much direct and specific support for the proposi- 
 tion contended for in this chapter, it is nevertheless of interest 
 to note the trend !n that direction (culminating in som thing 
 little short of formulation of the principles enounced), and to 
 put in contrast the older view and the reasons for i^ 
 
 »(1887)21Q. B. D. 166. 
 
 2 In Pi 'ock on Contracts (6th ed.), 
 185, refei ng to the loss of seals, it 
 IS saia: ""Xuai the practice of pub- 
 lishing ormal notice in oa^ of loss 
 really existed is shown uy the exam- 
 
 ple gir<^n in HI nmt's Ln v Diction- 
 8 V, s . Sigilluui, dated 18 Ric. IL 
 In modeiTi law such questions, when 
 tiny occur, come under the head of 
 estoppel," 
 
406 
 
 OSTENSIBLE 0WNEK8UIP AND AOKNOT. 
 
 li! 
 
 m I 
 
 Commencing Avith rabney, it is usually said that the reason 
 that a thief can pass a good title is because 
 
 "of the currency of it; it cannot be recovered after it has passed in cur: 
 renoy;"V 
 
 that is to say, a good title to money passes because it is money I 
 And if we ask for something more satisfactory than this, we 
 may find ii in Lord Shand's remark (one hundred and thirty- 
 live years afterwards) with reference to some cash which had 
 been intrusted to an ag. ut, and by hi; -rongfully diverted to 
 
 his own purposes: 
 
 "He has thus the opportunity, and may take advantage of this, to mis- 
 apply and to appropriate to his own use the money intrusted to h.m. » 
 
 This reason must, however, find foundation in some specific 
 law, and its proper reference is clearly apparent. The true 
 owner enabled his agent to pose as owner, and is therefore es- 
 topped by the assistance rendered to his misrepresentation of 
 
 ownership. 
 
 If the reason in the case of money was because it was money, 
 the rule was applied to bills and notes because they are "like 
 80 much money," and are « negotiable: " 
 
 "If a bill be payable to A., or bearer, it is like so much money paid to 
 whomsoever thHote is given; that let wlmtever accounts or conditions 
 soever be between the party who gives the note, and A. to whom it is 
 Biven, yet it shall never affect the bearer. » „„ ^# „^„„« 
 
 ^ "Bins of exchange and promissory notes are representatives of money 
 circulating in the commercial world as such. * tu„ !„„„«- 
 
 "The re'ason is that such negotiable instruments have, by the law mer- 
 chant become part of the mercantile currency of the country. 
 
 .'A negotiable instrument for the general convenience of commerce has 
 been aUowed to have an effect at variance with the ordinary principles of 
 law."* 
 
 Money passes with a good title because it is money ; and notes 
 because they are like, money; and then a foreign bond because 
 
 it 13 like a note. It is * 
 
 "in its nature precisely analogous to a bank note payable to bearer, or to a 
 
 Freem. 257. And see per Channell, 
 • B., in Moss v. Hancock (1899), 2 Q. B. 
 119; 68 L. J. Q. B. 657; Byles on Bills 
 (15th ed.), 186: Foster v. Green (1862), 
 81 L. J. Ex. 158. 
 
 1 Per Lord Mansfield, in Miller v. 
 Race (1758), Burr., p. 457. And so 
 where a £5 gold piece, which, al- 
 though current coin, was some- 
 thing of a curiosity, bad been stolen 
 and sold to a dealer in curiosities, 
 the title revested in the owner upon 
 conviction of the thief. Moss v. 
 
 ■rr^ /i0oa\ Q O T* 111- fiS I^ .T. 
 
 Q. B. 657. ' 
 
 2 Thomson v. Clydesdale (1893), A. 
 a 291; 62 L. J. P. C. 91. 
 
 » Crowley v. Crowther (1702), 2 
 
 4Friedlander v. Texas (1889), 130 
 U. S. 416. 
 
 »Per Williams, J., in In; -ham v. 
 Primrose (1859). 7 C. B. N. S 3. 
 
 « Per Tindal, J., in Jenkyns v. Us- 
 borne (4844), 7 M. & G. 699; 18 L. J. 
 C. P. 196. 
 
e reason 
 
 led In cur: 
 
 i money ! 
 this, we 
 d thirty- 
 hich had 
 verted to 
 
 his, to mis- 
 . him." 2 
 
 e specific 
 
 The true 
 
 refore es- 
 
 itation of 
 
 IS money, 
 are " like 
 
 ney paid to 
 conditions 
 whom it is 
 
 )s of money 
 
 le law mer- 
 
 mmerce has 
 irinciples of 
 
 and notes 
 id because 
 
 sarer, or to a 
 
 er Channell, 
 1899), 2 Q. a 
 yles on Bills 
 areen (1882), 
 
 IS (1889), 130 
 
 I Ini'ham v. 
 
 N. S 3. 
 nUyns v. Us- 
 699; 18 L. J. 
 
 CnOSBS IN ACTION. 
 
 4U7 
 
 is the holder of ii ha "Sower to iivl hh. f*'"® '""''' °^ '*'*'• *''»^ whoever 
 ing it" « ^ ^^ *° '^'''® ""® *° «"y person honestly acquir- 
 
 The transition stage from mere empiricism to rationality 
 may be represented by language of Lord Cairns with reference 
 to certain misappropriated scrip for bonds: 
 
 know nothine of the tiVl« nf th^ a^l^u "*°"^ '5® ^°"P would come cou d 
 he might hav^e given ti his agenl"?^ °' °' *"^ ^'^"""^ instructions 
 
 In other words, the broker had ostensible authority to sell- 
 ostensible authority cannot be displaced by "private instruct 
 tion ; therefore, although there was no authority to sell yet 
 the true owner is estopped from so asserting. That is the or- 
 dinary law of estoppel. 
 
 To the same effect, but much more nearly approaching scien- 
 tific statement, is the language of Mr. Justice Tascherau in a 
 case m the Canadian Supreme Court with reference to bonds- 
 
 ritiel"anTct^"e^r'i?g'i^prh"iL*'aHZ'*S^^^^^^^ 
 
 himself from dispu4/the t^le''l\X's^^,u1X^^^^^ 
 
 There is much in the United States authorities which may 
 be cited m support of some of the views here advocated. For 
 example, in Colebrook on Collateral Securities it is said- 
 
 in any^Ert'^Shfsia^.tt^^^^^^ P-perty 
 
 position, third parties who are thereby in§ScPdtn!iiai 1°^'^"'^'' °* ^'«- 
 tected is anplie^d to choses in action „^on"nlXblefncKL^^^^^^ ^""^ 
 
 pledgees advancing value^upon'th? fai?h and crpd ? of°- ?.^!,^^ ''^"« ^'^^ 
 tjtle and apparent^absolute Cnershf; withl^^ol e/ hatthHS th« 
 pledgee is a fraudulent misappropriatfon an^ an uJauthoriled a?t"» 
 
 JQorgier v. Mieville (1824), 8 B. & 
 C46. 
 
 2 Goodwin v. Robarts 0876), 1 App; 
 Cas. 476; 45 L. J. Q. B. 748. 
 
 » Young V. MacNider (1895), 25 a C. 
 Can. 272, 279. 
 
 *P. 590; citing Cowdry v. Van- 
 derburgh (1879), 101 tr. s" 573; Mc- 
 Neil V. Tenth Nat. Bar (1871), 46 
 N. Y. 325. See to same eflfect, per 
 Boyd, C, in Re Central Bank (1899). 
 17 Ont. 586. 
 
 »P. 487; citing Coombes v. Chandler 
 (1877), »3 Ohio St 178; Moore v. Bank 
 (1873), 55 N. Y. 41; McNeil v. Tenth 
 Nat Bank (1871). 46 id. 325; Cowdry 
 v. Vanderburgh (1879), 101 U. S. 672; 
 Davis V. Beckstein (1877), 69 N. Y. 
 442: Werrinh r \roKrtT.Jr.«i r"^ t>__i- 
 
 (1865), 16 Ohio St 296; Dillaye v. 
 Commercial Bank (1873), 51 N. Y. 345; 
 Clark V. Roberts (ISSI), 25 Hun, 86. 
 
40S 
 
 OStENSIBLB OWNERSHIP AND AGENCY. 
 
 So also in Bigelow on Estoppel:* 
 
 " It should be observed that while the rule in Pickard v. Sears finds most 
 frequent eipressir in transfers of property, .it is °ot «onfined to such 
 caSHt incLdes all oases of false representation and « ^^d^"* "^^^^^^^ 
 whatever the nature of the transfer. ... So again, if a man purcnase 
 So/£ and fS value an unnegotiable chose in action from one whom 
 SroVne? has, by assignment or otherwise, conferred tne apparent abso- 
 Ste owne'rship. hJ obtfins a valid title against the ^^eal owner. supjK)smg 
 the act of purchase to have been induced by such act of the owner. 
 
 And in England in a case' in which a transfer of shares, 
 blank as to the purchaser's name, was given to a broker who 
 misapplied it, Lord Hersohell said: 
 
 "If the owner of a chose in action clothes a third party with the ap- 
 oarent owneSiip and right of disposition of it. he is estopped from assert- 
 fnStme Is against a person to whom such third party has disposed of 
 kind who r?ce*vJd it in good faith and for value. And this doctrine haa 
 been h3d by the court of fppeals of the state of New York to be applicable 
 to the case^f certificates ff shares with the blank t|*.-«fer and po-er^ of 
 attoinev siirned bv the registered owner, handed by hiia to a DroKer wno 
 fraudulentfy or in excess of his authority sells or pledges them. The bank 
 nr Sr Sons takine them for value without notice, have been entitled 
 ?o hold tSIm as against thlow^r. As at present advised, I do not see any 
 cUfference tetwiefthe Lw of thTstate of /e w York and the law of England 
 in this respect"* 
 
 It will be observed that these supporting quotations all deal 
 with « non-negotiable » choses in action. They sufficiently es- 
 tablish the principle that ostensible ownership or agency of 
 such documents may estop the true owner from setting up his 
 title to them. But it has not hitherto been observed that the 
 same doctrine applies to ''negotiable" instruments also (why 
 should it not?); and that there is no necessity, in their case 
 either, for an appeal to the law merchant and its " antagonism " 
 to the ordinary law. 
 
 i\ 111! 
 
 15th ed.. p. S83; citing Moore v. 
 Metropolitan Bank (1878), 55 N. Y. 
 4'; Henty v. Miller (1883), 94 N. Y. 
 64; Cooinbes v. Chandler. 33 Ohio 
 
 St ITS. 
 
 2 Mr. Bigelow did not observe the 
 general application of this language 
 in his later work (on Bills and Notes) 
 when he wrote (p. 8): "Purchase of 
 land or goods for value and without 
 notice cuts off equities; that is a 
 cardinal r»iie of law aati aiways nzs 
 been in courts of equity. But it has 
 never been applied to undertakings 
 to pay in the case of common-law 
 
 contracts; applied to undertaking?* 
 to pay, as purchase for value witli- 
 out notice often is. the principle ha» 
 reference to bills, notes and check* 
 
 only." 
 
 » Colonial Bank v. Cady (1890). 1» 
 App. Cas. 257; 60 L. J. Ch. 181. 
 
 ♦ For the New York law see Mc- 
 Neil V. Tenth Nat. Bank (1871). 46 
 U. Y. 825. See also in Ontario. Smith 
 V. Rogers (1899), 30 Ont. 256; and in 
 T-»iond. Home v= Boyle (1890), 27 L. 
 R Ir. 187: Waterhouse v. Bank of 
 Ireland (1893), 39 L. B. Ir. 884. 
 
 
CH08E8 IN ACnON. 
 
 40d 
 
 ids most 
 to such 
 silence^ 
 lurchase 
 e whom 
 !i)t abso> 
 ipposing 
 r."« 
 
 shares^ 
 er who 
 
 1 the ap- 
 m assert- 
 iposed of 
 brine ha» 
 pplicable 
 power of 
 jker who 
 rhe bank 
 1 entitled 
 it see any 
 England 
 
 all deal 
 mtly es- 
 ;ency of 
 g up his 
 that the 
 so (why 
 leir case 
 jonism '* 
 
 lertakingf^ 
 ilue wiUi- 
 noiple ha» 
 ,nd checks' 
 
 T (1890), 1» 
 
 181. 
 
 ,w see Mc- 
 : (1871), 4ft 
 irio, Smith 
 !56; and in 
 1890), 27 L. 
 J. Dank of 
 
 881 
 
 Summary. 
 
 It is advisable to sum up what has been said: 
 
 1. A chose in action is ambulatory or non-ambulatory. It 
 may also be sometimes the one and sometimes the other. A 
 promissory note, for example, may be ambulatory (rddeemable 
 to third persons) or non-ambulatory (redeemable to a certain 
 person only). It is always " negotiable " in the sense that, being 
 a chose in action arising out of contract, it may be transferred. 
 It is sometimes not " negotiable," in the sense that a transferee 
 of it will take subject to equities. 
 
 2. Contractors in ambulatory agreements are estopped as 
 against innocent transferees from setting up equities which may 
 exist between- them and their immediate contractees. 
 
 3. The true owners of ambulatory contracts may be estopped 
 from asserting their title to them by permitting the appearance 
 of ownership in other persons. 
 
 4. These results are in no Avay due to the law merchant; 
 they are not in antagonism to the general law; they are parts 
 of it. 
 
 5. The word "negotiability" with its double entente is not 
 only unnecessary, it is disturbing and distracting. 
 
 6. There is no such thing as " negotiability by estoppel." 
 Having thus opened up a new category (ambulatory instru- 
 
 ment-i) -et us take a short survey of the documents to be placed 
 in it. 
 
 Bonds. 
 
 If the views here advanced are correct, there would seem to 
 be no reason why compaay bonds should not always have been 
 as "negotiable" as promissory notes;' and why a holder of 
 them in due course should not have always been free of equi- 
 ties. Nevertheless it has only been within the last year in 
 England' that their absolute "negotiability" has been recog- 
 nized, and only with the assistance of the invention of a new 
 doctrine was that result arrived at. A short resum6 will bo 
 instructive. 
 
 > Reference is intended to bonds in- 
 tended to be ambulatory. Those of 
 other character are not of course 
 assignable free from equities, for 
 they are not so intended. Coles v. 
 
 Jones (1715), 2 Vern= 69?; Gator v. 
 Burke (1795), 1 Bra C. C. 434; Gould 
 V. Close (1874), 21 Gr. 27a 
 
 * Bechuanalaud v, London (1898), 2 
 Q. B. 658; 67 L. J. Q. B. 986. 
 
i / 
 
 
 iii. >* 
 
 410 
 
 OSTENSIBLE OWNERSHIP AND AGENCY. 
 
 The question of the " negotiabilit}' " of bonds arose in Gorgier 
 V. Mieville,^ in 1824. Bonds of the King of Prussia payable to 
 the "holder" had been misappropriated by an agent. There- 
 Avas evidence that " bonds of this description were negotiated 
 like exchequer bills." Abbott, C. J., said: 
 
 "It is tht^refore in its nature precisely analogous to a bank note payable 
 to bearer or to a bill of exchange in blank. Being an instrument therefore 
 of the same description it must be subject to the same ru'.e of law, that 
 whoever is the holder of it has power to give title to any person honestly 
 acquiring it." 
 
 In 1867, in P.e BlaTtely^ it was held with reference to a com- 
 pany bond payable to bearer, that a transferee could not sue 
 upon it in his own name, but had an equitable title only; that 
 although an assignee of a chose in action takes subject to equi- 
 ties, yet that the obligor can contract to pay free from equities; 
 that a bond payable to bearer is not necessarily such a con- 
 tract; but that there being in fact at the time of the issue of 
 the bonds an intention of jihe company that they should be 
 transferred, such intention debarred the company from setting 
 up the equities. In other words, a transferee of company bond 
 payable to bearer was not safe unless he could show that the 
 company had contemplated a transfer of it; and that such in- 
 tent dia not sufficiently appear by the bond being payable to 
 
 bearer. 
 
 With some hesitation this difficulty was surmounted, and it 
 is now said that " the negotiable character of the bond depends 
 on the bond itself;"' and that the use of the word "bearer" 
 exhibits an ambulatory intent, independently of evidence of 
 extraneous intention.* 
 
 Escaping this point (that bonds are negotiable or not accord- 
 ing to extrinsic evidence of ambulatory intent), it was said 
 that they could only be negotiable if (as in the case of bills 
 and notes) they were for a certain amount, and payable un- 
 conditionally, and at a certain time, and so on. Judges felt 
 themselves much pressed with this objection. Was there a 
 condition for payment by successive drawings;" or was there 
 
 ?.(1834) 8 B. & C. 45; 2 L. J. K. B. 
 206. Qlyn v. Baker (1811), 13 East, 
 609, had decided the point adversely 
 (subject to tde possibility of evidence 
 otherwise) ?i8 to East India bonds; as 
 to which sec 51 Qea III., oh. 64. 
 
 » (1867) L. R. 8 Ch. 154; 50 L. J. Ch. 
 «0S. 
 
 »Venables v. Baring (1892), 3 Cli. 
 527; 61 L. J. Ch. 609. 
 
 « See infra, sub-title " Intended to 
 be assigned." 
 
 6 Crouch v. Credit Fonoier (1873), 
 L. R, 8 Q. a 874; 42 L. J. Q. R 18a 
 
OHOSES IN ACTION. 
 
 411 
 
 a mortgage as security, with provisions limiting the po^vers of 
 the bondholder; ' then there was a contractual relalrion outside 
 of the promise to pa}^ and associated with it which precluded 
 the idea of « negotiability." No authoritative decision has yet 
 declared that such considerations may be disregarded.* We 
 are, however, rapidly reaching an intellectual climate which is 
 very fatal to them; in fact the question will necessarily arise 
 whether such objections can properly be held to affect the 
 " negotiability " of even bills and notes. Though some of the 
 asserted essentials of a note may be absent, yet if the instru- 
 ment was intended to be transferred, does not a transferee, 
 «pon the principles enunciated, take free from equities?' 
 
 Eeturning to bonds unaflfected by these special provisions, 
 it may be observed that notwithstanding the partial recogni- 
 tion of their "negotiability" the judges were loath to admft it 
 ^Mn the full sense of the word." The term had for so long 
 been confined to bills and notes, and its derivation was so 
 thoroughly understood to be from the law merchant, that it 
 seemed to be impossible to apply it to documents of more 
 modern use. Accordingly in 1873 we find Blackburn, J., say- 
 ing: 
 
 "but as the instruments themselves are ohly of recent introdujtion it 
 can be no part of the law merchant." * miroaujuon it 
 
 Bowen, L. J., too, in one case hesitated to say that they 
 were negotiable, suggesting the presence of a seal as being 
 a difficulty in the way.^ And in another case in the face o1 
 evidence and admission that they "are dealt with as negoti- 
 able securities," the same learned judge objected that there 
 was no evidence 
 
 "that delivery by a person v. ho has no title confers nevertheless a title on 
 a bona fide holder for value without notice." « ««neies8 a utie on 
 
 1 Easton v. London (1886), 84 Ch. 
 D. 95; 56 L. J. Ch. 569; S. C. mh 
 nom. Sheffield v. London (1888), 13 
 App. Cas, 383; 57 L. J. Ch. 986. 
 
 -Goodwin V. Eobarts (1875), L. R, 
 10 Ex. 76, 857; 1 App. Caa. 476; 45 
 L. J. Q. B. 748, dealt them a very 
 severe blow. 
 
 ".See practically to that effect. 
 Bank of Hamilton v. Harvey (1885), 
 9 Ont. 658; 16 a C. Can. 714. 
 
 * Crouch v. Credit Foncier (1878), 
 L. 1, 8 Q. R 874; 42 L. J. % B. 18?i. 
 
 » Easton v. London (1886), 34 Ch. 
 D. 113; 56 L. J. Ch. 569; S. C. mb 
 nom. Sheffield v, London, 13 App. 
 Cas. 833; 57 L. J. Ch. 5)86. No diffl- 
 culty was felt upon this ground in 
 Canada (Bank of Toronto v, Cobourg 
 (1884), 7 Ont, 1); nor in the United 
 States: Daniel on Keg, Inst., ^§ 1487, 
 1500. 
 
 « Simmons v. London (1891), 1 Ch. 
 3^4; 60 1m J. Ch, 813; (1892) A. C. 
 201; 61 L. ,r. Ch. /aa 
 
412 
 
 0STEN8IBLB OWNERSHIP AND AGEKOY. 
 
 A further point raised a distinction between foreign and 
 domestic bonds -raised much difference of opinion upon that 
 qn'.stion,' which it may be hoped has been settled m favor of 
 no distinction, by a recent judgment of Mr. Justice Kennedy. 
 
 American Law.- The United States courts do not appear to 
 have been much troubled with such points. Pennsylvania in 
 1860, indeed, heroically declared that 
 
 -we will not treat bonds like these as negotiable securities. On this 
 ground we stand alone. All the courts, American and Enghsh, are against 
 us. Be it so."* ,, 
 
 But in 1884 Mercer, C. J., of the same State said : 
 
 "The clear intent of the maker was that they should P«??a« negotiable 
 paper W?th the language of negotiability on its face did the seal im- 
 Pressed thereon destroy the negotiability of this bond ? « 
 
 No. And with this larger view (what was " the clear intent 
 of the maker ? ) the other courts agree.* 
 
 Canadian Zai^.- The Canadian courts too solved, or at least 
 avoided, all difficulty as to ,bonds by declaring them to be ne- 
 gotiable." * 
 
 Other Ambulatory Contracts. 
 
 <9m>>-5ondf*.-It lias been said that various objections 
 were made to the recognition of debentures as negotiable m- 
 struments upon the ground of lack of some supposed essential 
 
 iLang V. Smyth (1831), 7 Bing. 
 293; Smith v. Wegnellin (1869), L. 
 R. 8 Eq. 198; 38 L. J. Ch. 465; 
 Crouch V. Credit Foncier (1873), L. 
 R 8 Q. B. 884; 43 L. J. Q. B. 183; 
 Goodwin v. Robarts (1875). L. R. 10 
 Ex. 76, 345; 1 i^pp. Cas. 476; 45 L. J. 
 Q. B. 748; Picker v. London (1887), 
 18 Q. B. D. 515; 56 L. J. Q. B. 299; 
 Williams v. Colonial Bank (1887), 
 80 Ch. D. 403; 57 L. J. Ch. 826; 38 
 Oh. D. 888; 58 L. J. Ch. 826; a C 
 8u6 nom. Colonial Bank v, Cady, 15 
 App. Ca& 367; 60 L. J. Ch. 181; Veua- 
 bles V. Baring (1893), 3 Ch. 589; 61 
 L. J. Ch, 609. 
 
 2 Bechuanaland v. London (1898), 
 2Q. B.658; 07L. J. Q. B.986. 
 
 3 Diamond v. Lawrence (1860), 37 
 
 Pa. St. 85a 
 
 ♦ Masoa v, Frick (1884), 105 Pa. St 
 163. And see Carr v. L© Fevre(iB56), 
 27 Pa, St. 4ia. 
 
 sDelafteld v. Illinois (1841), 2 Hill 
 (N. Y.), 177; Chaplin v. Vermont. 
 (1857), 74 Mass, 575; White v. Ver- 
 mont (1858), 63 U. S. 575; Mercer v. 
 Haokett (1863), 68 U. a 83 (overrul- 
 ing the Pennsylvania case of 1860); 
 Morgan v. United States (1885), 113 U. 
 S. 476; Provident V. Meroer(1898), 170 
 U. S. 18; S. a R. 788; American Nat. 
 Bank v. American Wood Co.(1895), 19 
 R I, 149; 83 Atl. R. 805; Strauss v. 
 United Tel. Co. (1895), 164 Mass. 130; 
 41 N E. R. 59". Whiteside v. First 
 Nat. Bank (1898). 47 a W. R. 1108 
 (Tenn.); Daniel on Neg. Inst., seca. 
 1487, 1401<i, 1500; Colebrooke on Coll. 
 Sec. 8; Massachusetts Pub. St., oh. 77, 
 
 §4, 
 
 » McKenzie v. Montreal (1878), 29 
 u. o- ^•', «'• SoS, iians oi iu»t;i:i- -•• 
 Cobourg (1884), 7 Ont. 1; St Cesaire 
 V. MoFarlane (1887), 14 a C Can. 73. 
 
 "1 V' IjJ! 
 
0H0SE8 IN ACTION. 
 
 41? 
 
 
 of form. These variations from old time rigidity were to some 
 extent overlooked, but a point of dissimilarity arose ih Oood- 
 win V. Robarta^ which could not be altogether blinked : 
 
 "That these instruments be payable in money has always been essen- 
 tial, and the custom of merchants to that effect has received the sanction 
 of statute."* 
 
 And here is a case* of a document not for mcnev a't all, but 
 
 for the delivery of bonds, and redeemable at very uncertain 
 
 time. It was as follows: 
 
 " Received the sum of twenty pounds, being the first instalment of twenty 
 per cent upon one hundred pounds stock, and on payment of the remain- 
 ing instalments at the period specified the bearer will be entitled to receive 
 a definite bond or bonds for one hundred pounds after receipt thereof from 
 the Imperial Government." 
 
 Scrip in this form (which was admitted " to pass ... by 
 mere deliveiy as a negotiable instrument transferable by de- 
 livery ") was left with a broker to be dealt with as the owner 
 might direct; and the broker fraudulently pledged it for his 
 own benefit. Ancient law merchant will evidently not help 
 the pledgee. Bills and notes are undertakings to pay money. 
 This document is one declaring that upon payment of money 
 certain bonds will be delivered " after receipt thereof from the 
 Imperial Government." It appears to be an ordinary contract- 
 ual obligation ; and legal-title theories are of no avail. Accord- 
 ing to all our notions it is " non-negotiable," and the purchaser 
 must take subject to all equities. 
 
 The case is at the parting of the ways, or rather, perhaps, at 
 
 their final rupture, though certain tendencies may remain for 
 
 a little. Baron Bramwell's great good sense is of inestimable 
 
 value. A Prussian bond redeemable in money, he says, has 
 
 been held to be negotiable; and to distinguish between a bond 
 
 and 
 
 " something prepaK.tory to a bond being given . . . would be draw- 
 ing a distinction which would be utterly unintelligible to the commercial 
 world at large " — 
 
 subversion of the legal ir oil. ,'.. luckily overlooked. And it 
 
 was fortunate that Cookbv.rr, C. J., sat in appeal. Ancient 
 
 law merchant, without whicL lo has been said * there can be no 
 
 negotiability, ho thus dealt with: 
 
 "Usage adopted by the courts having been thus the origin of the whole 
 of the so-called law merchant as to negotiable securities, what is there to 
 
 - viSVO} 1m li, Ivj ijA^ VU, <i%'j, 1 App, 
 
 Cm. 478; 45 L. J. Q. B. 748, 
 
 - BigeloTT on Bills and Notes, 14. 
 
 3 Goodwin v. Eobarts (1875), L, R. 
 
 lO iiix. 7K, t)*!; i App. Gtts. 475; 45 L. 
 J. Q. B. 748. 
 
 * Crouch v. Credit Foncier (1873), 
 L. H. 8 Q. B. 886; 48 L. J, Q. B. 183. 
 
414 OSTENSIBLE OWNEKSHIP AND AQEKOY. 
 
 prevent our acting upon fe principle -ted «pon> by our pred^cess^^^^ < 
 
 representative of the sum it IS intended to secure. 
 
 The House of Lords, however, hesitated.^ Unprepared to 
 declare for negotiability, their Lordships find relief in estop- 
 pel, Lord Cairns promulgating the doctrine of negotiability 
 by estoppel, while Lord Hatherly more correctly, as the pres- 
 ent writer thinks, applies the well-known principles of estop- 
 pel by ostensible agency. Estoppel of some sort at all event* 
 we have arrived at; negotiability by estoppel we have already 
 
 dealt with. . , - „ * 
 
 Scrip for Shares.— The c*se was almost immediately followeic 
 by Rmihall v. Metropolitan.' This time scrip for shares (ad- 
 mitted to be customarily passed « by mere delivery as a nego- 
 tiable instrument transferable by delivery"), deposited with 
 and misappropriated by a broker, is the subject of controversy. 
 Held that the document was « negotiable," and passed frefr 
 from eq. ities to a holder in due course; but if not it was at 
 the least " negotiable by estoppel." The commercial world i^ 
 evidently having its way -the particular language employed 
 being a matter of indifference to it. 
 
 Mortgage-delenture8.-The influence of Cockburn, 0. J., waa 
 of value in a case preceding those just referred to.* Bonds 
 might be negotiable, but what was the position of mortgage- 
 debentures, or rather documents which, containing no promise 
 at all,» merely mortgaged a proportionate part of the rates ot 
 a municipality? By statute these mortgages were assignable, 
 
 little attention was paid in the case 
 to the Lord Cairns dictum. See 
 ante, p. 386. 
 » (1876) 2 Q. B. D. 194; 46 L. J. Q- B. 
 
 846. 
 
 * Webb V. Heme Bay (1870), L. R. 5 
 Q. B. 642: 39 L. J. Q. B. 331. 
 ^» Absence of a promisee is no ob- 
 jection in the United Statea Dan- 
 iel on Neg. Inst, § 1494. 
 
 1 L. E. 10 Ex. J53, and see 355. 856; 
 44 L. J. Eat. 157 if. See, to same ef- 
 fect, Mercer v. Hackett (1863), 68 
 U. S. 83. where it is said that " this 
 malleability to «■* *^e necessities 
 and usages of tb» iBercantilQ and 
 
 liuiiiiiicrciai ■«■»<.— - '~ •" •-■="■ ' ~ 
 
 valuable characterartics of the oom- 
 mon law." 
 
 3 It ia very extra.^inary that so 
 
CUOSES IN ACTIOX, 
 
 415 
 
 and the assignee was to have the benefit of the security trans- 
 ferred. Cockburn, C. J., said: ' 
 
 " The defendants issued the debentures with the knowledge that they 
 were capable of being transferred and would very likely be transferred to 
 a holder for value; how can it lie in their mouths to say that the transac- 
 tion in respect of which they gave these debentures was illegal? " 
 
 And Lush, J., going still further, said : 
 
 " Now the effect of these sections I think is to make these mortgages 
 negotiable securities, and to attach to them the incidents of negotiable se- 
 curities; one of which is that an innocent holder for value . . . acquires 
 a title of his own, unaffected by any infirmity to which the title of his as- 
 signor would have been subject." ' 
 
 Mortgages. — It is interesting to note the application of the 
 principles in hand to the case of a mortgage. Here wc have a 
 debt — a chose in action ^ — and real-estate security for its pay- 
 ment. By its terms and by usage the document is intended to 
 be ambulatory; but the transfer of it is a matter requiring 
 time for its accomplishment, and it is therefore unsuitable for 
 the rapid financial operations of the moment; moreover its 
 payments are usually long deferred, and thus changes in the 
 relations of the parties to it are more customary than in the 
 case of shorter dated commercial paper. 
 
 The law of estoppel has adapted itself to these peculiarities. 
 It is customary for a purchaser of a mortgage to make inquiries 
 of the mortgagor as to the state of the account between him 
 and the mortgagee; and it is not doubted that by his answers 
 the mortgagor would be estopped. No such inquiry is made 
 in the case of bills and notes, and transferees of them are not 
 affected by premature payments. The reason is to be found in 
 custom, and the custom is founded upon the considerations above 
 suggested. Estoppel proceeds upon misrepresentation. In the 
 case of a mortgage premature payment will not mislead be- 
 cause of the custom to inquire, which the mortgagor may de- 
 j)end upon being pursued. There is no such custom in the case 
 of bills and notes; premature payment will mislead, and the 
 payer may have to pay again. 
 
 But observe that if a mortgage be offered in sale to me, al- 
 though I ought to inquire as to alterations of relations between 
 the parties, I have no reason for doubting that the document 
 is a real instrument, and that it truthfully sets forth the trans- 
 action as it originally existed. For example, if £200 appears 
 
 • But see Jones v. Duliok (1898), 55 Q. B. 205. See, however, Hopkins v. 
 Prtc. R. 522 (Kan.). Hems worth (1898), 3 Ch. 347; 87 L. J. 
 
 * Martin r. Bearmau (1880), 45 U. C. Ch. 526. 
 
41G 
 
 OSTENSIBLE OWNERSHIP AND AGENCY. 
 
 to be secured by it (and more especially if a receipt for that 
 amount appears upon it),I ara not bound to imagine that only 
 £40 was really advanced. The mortgagor knew when executing, 
 the document that it was of ambulatory character; he knew 
 that people *vould rely upop its appearance; and he is therefore 
 
 estopped.' , -r. * 
 
 "But they were inexact and careless, and placed in t^e hands of Bates 
 or Astley the means of deceiving other persons, and these are m tlie court 
 of equity denaerits."2 , „. i. u 
 
 This law is of special importance in the United States, where 
 usually a mortgage debt is also represented by a promissory 
 note. It was there said that the mortgagor was estopped upon 
 
 principles , j, ^ a 
 
 "which forbid a man who, as security for negotiable notes had execu ed 
 a morteaee ... to impair its binding force and effect by Pieacung 
 Secret fauUies created by his own fault, negligence or.imprudence and of 
 which the subsequent holder of the notes Sa3 no notice and no means of 
 information." 8 • j- *• 
 
 Votichers.Sometimes vouchers or certificates, indicating 
 that persons named in them are entitled to certain sums of 
 money, are intended to be ambulatory; and transferees of 
 them will therefore, upon principles of estoppel, take free from 
 equities. In one case * a contractor obtained a certificate from 
 the auditor of a board of works that he wa^ entitled to 
 $8 451 88; the contractor indorsed the certificate in blank, and 
 deposited it as security for a loan of $3,160.; and the pledgee 
 fraudulently disposed of it to an innocent purchaser; it was 
 
 held that 
 
 "the complainants could have expressed in their indorsement the purpose 
 nf the deoos t . . -that it was as security for a specified sum of 
 money -and'thus imparted notice to all subsequent purchasers or a^ 
 Riffnees that the pledgee had only a qualified interest in the claim. But 
 haS indoiS their name in blank, they virtually authorized the holder 
 fo transfer or^ispose of the certificate by writing an absolute assignment 
 over their signature." , • j «. 
 
 In a case of somewhat similar circumstances the judgment 
 (frequently cited) is summed in the bead-note as follows: 
 
 "A bona fide purchaser for value of a non-negotiable chose in action 
 from one upon wC the owner has by assignment conf"";,^ J J^^f «P{«^;- 
 Pnt absolute ownership, where the purchase is made upon the faith of such 
 Apparent ownership, obtains a valid title as against, the real owner, who 
 is estopped from asserting a title in hostility thereta 
 
 1 Bickerton v. Walker (1885), 31 Cb. 
 D. 151; 55 L. J. Ch. 227. And see 
 
 i ... ..._ l__U 1\T 
 
 uaaes oilcii iiViSn ISIS ui:w if- vi:. i - - 
 
 2 Per Fry, L. J. 
 
 'State Bank v. Flathers (1892). 45 
 Liu Ann. 78; 13 S. E. 244 See note, 
 ante, pp. 19, 20. 
 
 *Cowdry v. Vandenburgh (1879), 
 101 U. S. 572. But see Crawford v. 
 Rnard (1899). 58 Pao, R- 816; Ham- 
 mond v. Evans (1899), 55 N. E. R. 784 
 (Ind.). 
 
 9 Moore v. Metropolitan (1878), 55 
 N. Y. 41. See also Armour v. Michi- 
 
0H08ES IN ACTION, 
 
 417 
 
 In the judgment it is said : , j 
 
 otlie3^1hT«Prfn^I!rrl*° ^- ^^^ ^'^u"®'" ?'«l^a»-e« or Chattels delivers to an- 
 oiner the scrip or possession of the chatte s, together with an nhanliito 
 
 Si?f *''?"'^" °' *" '"« *'"« thereto, he therfSenables him to hSm 
 J^!lf J ^ ?' *°° ".after he has so done, the owner was oennitted to 
 Sai^ancfis*^ Z'^hM' ''*'f ^^?'?«* those dealing upon the Sh iflheS^ 
 fraS" dishonest might combine and practice the grossest 
 
 Bank Dooumenta.— Loiters of credit are peculiarly of am- 
 bulatory character.! So, usually, are deposit receipts' and cer- 
 tified checks.' 
 
 Zife Policies.— Drawing still further away from the former 
 narrow list of « negotiable " securities, we come to a document 
 of d*^batable character. The owner of a life-insurance policy 
 tr . rred it apparently absolutely, but really as security only 
 foi .joney lent; the assignee, being thus the ostensible owner, 
 fraudulently assigned the policy to an innocent purchaser, who, 
 it was held, took it free from equities.* It may be said that a 
 policy is a "non-negotiable" chose in action, and that it there- 
 fore carries with it all equities of prior holders.* A fair reply 
 
 gan Ry. (1875), 65 N. Y. 123; Cudahy 
 Ca V. Sioux (1896), 21 C. C. A. 438; 
 75 Fed. R 47a 
 
 iPillans V. Mierop (1765), Burr. 
 1663; Pierson v. Dunlop (1777), 
 Cowp. 571; Re Agra (1867), L. R. 2 
 Ch. 891; 36 L. J. Ch. 222; Bank of 
 Montreal v. Thomas (1888), 16 Ont. 
 603; Russell v. Wiggins (1842). 2 
 Story, 213; CoolidRe v, Payson (1817), 
 15 U. S. 66; Boyce v. Edwards (1880), 
 29 U. S. Ill; Carnegie v. Morrison 
 (1841), 2 Met (Mass.) 381; Franklin 
 V. Lynch (1898), 52 Md. 270; Johan- 
 nessen v, Munroe (1899), 185 N. Y. 
 <541; 53 N. E. R.585. 
 
 « See 8 & 4 Anne, ch. 9: Nicholson 
 V. Sedgwick (1690), 1 Ld. Ray. 180; 
 8 Salk. 67; Partridge v. Bank of Eng- 
 land (1846), 9 Q. B. 396; Re Coramer- 
 cial Bank (1897), 11 Man. 494; Re 
 Central Bank (1889), 17 Ont 574; 
 First Nat Bank v. Security (1892), 
 
 M NpK 71 • si W ■«? B ona:. t?-:_i- 
 
 • ~ ■-■ -•- ""-?i XXISR- 
 
 wood V. First Nat Bank (1894), 40 
 Neb. 484; 58 N. W. R 1016: Sauce v. 
 Exchange (1894), 40 Neb. 497; 58 N. 
 
 27 
 
 W. R. 1135; Hager v. Buffalo (1894). 
 81 N. Y. 448; Antem v. Crahan (1899). 
 81 111. App. 502. But see Mander v. 
 Royal (1869), 20 U. C. C. P. !25; Lee 
 V. Bank (1879), 30 U. C. C. P. 255; 
 Richer v. Voyer (1874), L. R. 5 P. C. 
 461. 
 
 « American v. Crowes (1899), 83 III. 
 App. 537. 
 
 < Quebec Bank v. Taggart (1896), 
 37 Ont 163. And see Bridge v. Con- 
 necticut (1890), 152 Mass. 343; 25 N. 
 K R. 812. 
 
 » And it was very recently so held. 
 Brown v. Equitable (1898X78 N. W. 
 R. 103 (Minn.); " The defendant has 
 done nothing upon which to base an 
 equitable estoppel except the bare 
 fact that plaintiJf delivered posses- 
 sion of the policy lo H.. accompanied 
 by an absolute assignment without 
 any expressed conditions or limita- 
 tions, and therein clothed him with 
 Ai -• I..- J- • « _ . - 
 
 i::t: zntiztTta oi uOSC iuw OWDel'silip,^ 
 
 Usually the bare .. ot of enabling 
 another person to mislead third per- 
 sons by appearing to be the owner 
 
413 OSTENSIBLE UWNKBSHI? AND AGENCY. 
 
 i« that lands too, are somewhat " non-negotiable," but that if 
 IV vVer ot^^^^^ execute, an absolute conv^^^^^^^^^ 
 
 '"Throrrunfortunatel;' c... plicated by the fact that the 
 Ihe case is executors but it is neverthc- 
 
 he w« e.topp.a by h.. '"'''»" •^^;°''^ Jjt' distinction between 
 
 Se™rte:;:r«i"^"-„rt:aship.o;„erassig^ 
 ,:=:..pa^.-:ej- 
 
 assio-nee " what is due, i-ne c ie'"='^ 
 
 oeyL property is thou.htto I. an ^^ ^ ^,^^3^ Ve\r ^^^^^^^^^^^^^ 
 
 aoTply sufficient ground of estoppel ^ J^ Ch^^^^;^^.^, ^,,,,^, 3 Ch. 841; 
 
 See the dissenting judgment mthe Montgo^^ y^^ 
 
 same case, and the resu^ »iv« .^ "', ^^'^^^ mcN. & Q. 487; a H. L.a 
 
 1 See cb. XXH. 
 
 2(1887) 86 Ch.D. 659; 38 Ch. D. 888; 
 
C HOSES IN ACTION. 
 
 419 
 
 ter-party; he knew nothing of the partnership arrangement, 
 and naturally thought that the .stensible charterer was liable 
 to the ship-owner for the whole of the freight. Lord Cotten- 
 hani held that the ostensible charterer was liable to the assignee 
 for tho freight, iccording to the terras of the charter-party; 
 
 i'/«rJl°^\?"'-' '^'"* *!J® ^^'"'^^ ^1"'^^" suppressed, but the party claiminfr 
 IL ^K * apparent owner with proof, resting upon their own declara- 
 tion that none existed, and therefore cannot afterwards -I an act 
 founded upon such apparent right as against a party claiin der it" 
 In the House of Lords, however, this decision w.. versed; 
 but unfortunately the principle which supported it (above 
 quoted) was entirely overlooked. Lord St. Leonards said : 
 
 ♦ 1 i"^i'i® ?^^l 8''°""*i on which I understand the decision was rested was 
 this: that where a man having an interest in property stands by and sees 
 another man dealing w ith that property as owner with another person who 
 13 Ignorant of the want of title in the person with whom he is dealinir 
 equity wi I bind the man who stands by.^ ... I cannot find any facfs 
 to bring this case within that rule. There was no standing by on tiie part 
 of Messrs. Mangles when they saw Messrs. Boyd dealing with Messrs. Dixon, 
 tlie bankers; the dealing was behind their backs, five or six months be- 
 tore; they did not even know that the transaction had taken place." 
 
 Lord Cottenham was therefore overruled; but it cannot be 
 said that his view of estoppel by having "armed the apparent 
 owner with proof," etc., was dissented from; for it was not 
 considered. 
 
 But there is a further pc int in the case (as the foregoing dis- 
 cussion has made appare it), namely, whether a charter-party 
 is such a document as is intended by the charterer to be trans- 
 ferred by the ship-owner free from the equities between them. 
 If yea, then it is submitted that Lord Cottenham's judgment 
 ought to stand. But if nay, then the rule put forward in the 
 House of Lords that an assignee of such a chose in action takes 
 it subject, etc., is that which should govern the case. 
 
 Generally.— We have now arrived at this: Bonds, mortgiige 
 debentures, scrip for bonds, scrip for shares, mortgages (as ex- 
 plained), vouchers, letters of credit, deposit receipts, blank trans- 
 fers of shares, life policies, and many other such documents are 
 " negotiable » instruments. At all events it is quite immaterial 
 whether they are or not, for either through negotiability by 
 estoppel, or estoppel by ostensible ownership or agency, a good 
 title free from equities will pass to a holder in due course. 
 We are a long way from law merchant with its certain days, 
 and times, and amounts, and antagonisms to the general law. 
 
 There is still, however, much reluctance completely to adopt 
 
 
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 /APPLIED 
 
 J IIVMGE . Inc 
 
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 ^ Phone: 716/482-0300 
 :=: Fax: 716/288-5989 
 
 O 1993, Applwd lm«gt. Inc., All Rtghtt RcMfVMt 
 
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 420 
 
 OSTENSIBLE 0WNEB8HIP AND AOBNOT. 
 
 the inevitable change of view. Expressions are, and for some- 
 time no doubt will be met with, such as 
 
 "documents which, though not negotiable in the strict sense of the word, 
 were . . . equivalent to securities to bearer." ^ 
 
 When, however, the current connotations of the word " nego- 
 tiable " are displaced and the term " ambulatory " adopted, such 
 language will cease, for the uncertain and mysterious signifi- 
 cance of "negotiability" will have passed away. This is well 
 illustrated by the decisions referred to in the next succeeding 
 paragraph. 
 
 Promises to Pay Money. — It is a most curious fact, and one 
 which well illustrates the frequently baneful effect of codifica- 
 tions, that while the law is (as we have just been observing) 
 rapidly expanding upon the lines above indicated, so that we 
 are now fairly well able to say that choses in action pass to a 
 transferee free from equities where that was the intention of 
 the parties (the wit of man has at length come that far), certain 
 promises to pay money to order or bearer, on the other hand, 
 by reason of certain recent decisions in England and Canada 
 bid fair to become an exception to the rule. 
 
 A promissory note is by the codes closely defined. This is 
 within the prescribed limits, and this is not. Any addition to 
 the given form takes the document out of the category of 
 notes. And if it is not a note, then it is thought that all its 
 equities must assuredly accompany it upon transfer.* The re- 
 sult then is that a document which is very nearly a promissory 
 note or bill of exchange carries its equities with it — even if it 
 be one intended to be redeemable to third persons — because 
 of the codes; while documents having no relation to bills or 
 notes (and very much less like them), but which are also in- 
 tended to be ambulatory, do not. The fault of the decisions is 
 that they are still using the old classification of " negotiable " 
 and " non-negotiable " instruments.* The language of Malins, 
 
 1 Williams v. Colonial Bank (1887), 
 86 Ch. D. 671 ; Carr v. Le B'evre (1856), 
 27 Pa. St 4ia And see quotations 
 ante, p. 381 ff. 
 
 « Kirkwood ▼. Smith (1886), 1 Q. R 
 683: Bank of Hamilton ▼. Oillies 
 (iSdu), IS Man. 4S5. 
 
 <Th«> .^..£38 in the United States 
 
 vary very much as to the effect of 
 unusual clauset. :'a notes. The most) 
 recent of them are Citizens v. Boose 
 (1898), 75 Ma App. 189; Louisville v. 
 Gray (1899), 26 & R. 205 (Ala.); Third 
 Nat Bank v. Spring (1899). 69 N. Y. 
 
 a mnt. a-l_..-U .. /MUn^- /lOIMlX 
 
 82 Pa. Ca Ct 884 
 
CH08M I« AOnoJT. 
 
 421 
 
 or some- 
 
 Intended to be Assigned. 
 
 For complete answer to the second question we sh«ll h„.. ♦ 
 await some further development in tL cases Th« n I '^ 
 far raised involve the signiLance of such vTrds L "hTtran" 
 
 of such an instrument, an assign bv deed Vn Jj- ^''^.'°a'-y construction 
 an assignee of a bond or other clxS in action o A h'^" "' *. ^^^ '" ^^^ich 
 • . • •, We then find added theseTords* ^^ T^f, ^'^^ •« ^feated. 
 
 time being of this debenture.' As TSmlerstand 'th^ *° H*® ^°'•^«'• fo' the 
 mg more than this: In order tolave troublo -nH f ® words, they do noth- 
 
 iiJ^^ J''? debenture to be in as good jDositTon «,Tg"'f .^P^ P^^son who 
 sign of It by deed, and will not fnsist unon Mo *' *'*'^ A*"* ^«<"ne the as- 
 «nK a formal assignment; but thSie i^nothfnP'^l'"? **" *>*'« "^^ P'oduc- 
 wJnoh, as it seems to me, s intended io S f h '^i"'^***':" *« these*^ words 
 S * ^*^'- Po«"on than an a»S b^deed^f °^^"' %\ **»« *>« »^'nK* 
 therefore . . . in the construJSn'&rdeb^niure illrtcJ^foTe^g'i^S 
 
 ^^[Tu'jlctsSr'^^" ?!/,"!- ^*c.son . Swansea 
 'Ante, p. m. ;;-^^'^«*'»JB.44:S8L..i.y.B 
 
 •(1808) I. R. 8 Ch. 855; 87 L. J. Ch. ^ ft^lf rct'sr^' "* "^ '* ""^ 
 
< "■ .:\. 
 
 422 
 
 OSTENSIBLE 0WNEB8HIP AND AO'JNCT. 
 
 to renounce the ordinary rule that the assignee of a chose In action niu»t 
 taUe subject to the equities between the original partiea" 
 
 In a casa of about the same date, however, in which debent- 
 ures were payable in a similar way, Kolt, L. J., said : ' 
 
 "They are payable to bearer, and the object and intention of the parties 
 in making them so payable was, no doubt, to give to any person taking 
 them the right of resorting for payment directly to the obligors without 
 regard to any equities that might exist between them as the original 
 obligeea" 
 
 Lord Cairns, subsequently in the House of Lords, seems to 
 have adopted L. J. Eolt's view rather than his own, for he 
 
 said : ' 
 
 "The use of the word 'bearer' in the scrip itself made it negotiable; it 
 made the Russian government liable to deliver a bond and pay money to 
 any one who was the actual holder of the scrip. . . . And the actual 
 bearer was in no way bound by any legal liability or by any equities that 
 might be set up as to any of the previous holders of the scrip." 
 
 And it may now be said (as already indicated) that " the nego- 
 tiable character of the bond depends on the bond itself;"* ami 
 that the use of the word " bearer " renders a document negoti- 
 able, independently of extraneous intention.* 
 
 A distinction may possibly be made between obligations en- 
 tered into with the obligee and "his assigns," and those in 
 which other more general terms are used, such as " the bearer" 
 or " the holder." But probably the line is not to bo drawn al- 
 together with a view to the use of one particular word rather 
 than another, but keeping in mind the nature of the docu- 
 ment. In that case we shall jud^^ the intention to make 
 the instrument transferable free froc the equities, not onl; 
 from " the nature or terms cf the contract," but by inference 
 drawn from both of these sources. 
 
 Conclusion.— Enough has been said to indicate the safe line 
 of further development. 
 
 Lauds are intended to be transferred; so are goods; so are 
 some choses in action. 
 
 The law as to all classes of property is the same. Ostensible 
 
 1 Re Blakely (1867X L. R 8 Ch. 159; 
 87 L. J. Ch. 420. And see to similar 
 eilect, Re General Estates Co. (1868), 
 L. R 8 Ch. 758; 88 K J. Ch, UZ. 
 
 'Goodwin v. Robarts (1876), 1 App. 
 Cas. 485; 45 L. J. Ch. 750. And see 
 BIcKenzle v. Montreal 0878), 29 U. C. 
 g. P. 388. 
 
 •Per Kekewich, J., in Venables v. 
 
 Baring (1893X 8 Ch. 627; 61 I* J. Ch. 
 609. And see Higgs v. Northern 
 Assam Ca (1869), L. R 4 Ex. 887; 88 
 L. J. Ex. 283; Re Imperial Land Co. 
 (1871). L. R 11 Eq. 478; 40 L. J. Ch. 
 79; Webb v. Heme Bay (1870), L. R 
 6Q. R651; 89 L. J. Q. B. 221. 
 
 » Goodwin v. Eobnris (1876), 1 App. 
 Caa 476; 45 L. J. Q. B. 74a 
 
CII0SE8 IS AOTIOW. 
 
 423 
 
 diate contraotee or to SI .-^eomed to the imme- 
 
 to ask whether„r out a nTo" M^; " " "°'.-«-°' 
 a-;.ato,- or »o„.a.Mator;r;rr;eTJe'^ ^ 
 
 strumsnts to >vhicb it bel^^ ""reference to the class of in- 
 theia..,esto;rar:XL'tr^^^^ 
 
 ng CO tde rights of innocent transferees. 
 
 OVEUDDE PaPEB. 
 
 m.^m\ruo\ti:„;™„n:iL'"' ^"7"" ""«-■""» -- 
 
 «ny asserted »w"lnhe 1? °''I^"° ^"^'^ -^l'"' 'ron, 
 
 «abj<ot to equities is that he has not^'^e ,h, ""'* '»''™ " 
 
 refused; this refusal m.yu',:^::^^'^'^'^'' 
 of equities; the DurchH^p\. cV,«»m u . "^® °^ ^'^e existence 
 
 would hav; disLveS « i fr h„ r ',""''""'' " *■« '"«' i" 
 actual or constructr/e ? S a„d f? Z'"''™ ""'" '"'"~ 
 hold subject to them. ' """ '*»*"' ""ght to 
 
 . tt\rre:rxTd'::e''auh"°"°"-. ^'■^ ^""- <" """"' 
 
 <a) the equities^f h'tri vVer7,C "' ''" °'"*°™' "»" 
 the legal title of this true Zer No^ IT™' 7 "■■ "'"" 
 out equities applies very foSv to fh, 'T '"' "'"''"e 
 but it has no "wtion to^he latter "■ °' ""^ '^'■' 
 
 oslTuto^'l^'^'^^l "r™"""' '■°'« P-'y-'W^ ^ bearer 
 sonsliablrurou't e „r"a^*tf ™"f "' '"""'"» »""' P- 
 that there ar^ none helh™ h„^".l "' "'''""• »»'' " '»'" 
 
 «tmn«er demands" tV^Ml"-^' '""'"'•' ""*"""'' «'""» 
 '.^s ^nt Of the -.or V;:;-^-«47 - -^--s 
 
it! 
 
 II 
 
 ; t 
 
 1 
 
 -1 i 
 
 i 
 
 i! 
 
 424 
 
 08TES8IBLK 0WNEB8H1P AND AGENCY. 
 
 when it was transferred; and therefore that the transferee 
 took it subject to all defects. It is at once apparent that th© 
 principle of nowice, actual or constructive, will not aid this claim- 
 ant. Nothing but ipse distit and law merchant will fit his case. 
 
 Clearly our theory of ostensible ownership condemns him. 
 The holder of a bill to bearer appears to be the owner of it— 
 "the property and the possession are inseparable.'" Due or 
 not duo does not affect or modify this appearance. The true 
 owner is as much estopped by ostensible ownership of a dead 
 horse (overdue as w« may say) as of one still able to trot. 
 
 Nevertheless law merchant has had its way both in cases' and 
 codes;' and the distinction has not sufficiently been drawn be- 
 tween equities in favor of persons liable upon a bill or note, and 
 assertions of title to the instruments themselves.* It is to bo 
 remarked, however, that as soon as the same question arises a* 
 to bonds (when the close association between bills and law 
 merchant ceases to dominate the mind) we easily slip into 
 
 rationality and estoppel: 
 
 "I am of opinion that the appellants, having placed their bonds trana- 
 ferableWelivery in Welch's h^ds. and having thus enabled hina to derl 
 wi?h"fheL as hi7own,are. now. when he has -mmUted a fraud w^^^^^^^ 
 
 mus" rSt in a 'ro«';rtire7to themselves or to the respondents, precluded 
 from aMcrtine their title in such a way as to throw the loss «Pon the re- 
 ^^S^ hx%plyiihhi> principle'ofeatoj^pelit appear, that the ctr- 
 ;SSS« of theVida^beingl^verdmi is of no tmportanee."^ 
 
 TheUnited States Supreme Court did not slip so easily. It 
 has maintained that the same rule applies to bonds as to bills and 
 notes.' But in declaring that although default has been mado 
 in payment of interest, yet that the holder of the instrument 
 may be free from equities in respect of the principal sum, it has 
 removed the only ground upon which the rule can be supported. 
 
 (1868), L. R 6 Eq. 859; McArthur v. 
 MacDowell (1898), 28 S. C. Can. B95), 
 involves the distinction referred to 
 in the text, and may yet serve to 
 establish it, if ostensible ownership^ 
 
 Mnfc, p. 894 
 
 a Lee V. Zagury (1817). 8 Taunt 114; 
 1 Moa 656; West v. Maclnnes (1864), 
 88 U. C. 857; Re European Bank 
 (1870). L. R 5 Ch. 858; 89 L. J. Ch. 
 688; Byles on Bills (15th ed.), p. 40, 
 note. But see Moore v. Metropolitan 
 (1878), 65 N. y. 41; Pomeroy on 
 Equity, § 107 ff, 
 
 » 45 & 46 Vic. (Imp.X oh. 61, § 86 (2); 
 58 Vic. (Can.), oh. 88, § 86 (3). 
 
 * The remark that " the indorsee of 
 an overdue faiil takes it subject to 
 the equities of the bill, not the equi- 
 ties of the parties" (Re Overend 
 
 fails. 
 
 8 Per Strong, C. J., in Young v. 
 MacNider (1896), 25 S. C. Can. 277; 
 and see p. 881. See also McKenzie v. 
 Montreal (1878), 29 U. C. C. P. 888. 
 
 • Cromwell v. Sao (1877), 96 U. S. 
 51. And see Morgan v. United State« 
 
 /.oa.\ lio TT a ilTA. anil Ttillnn nn 
 
 (ICCI/, liu '-■' »-" "»»"J — — — --"^ 
 
 Mun. Corp^, §g 486, 6ia 
 
CH08E8 IN ACTION. 
 
 425 
 
 I:e^*:^;^!;\r:A!™ -"' ^'"^ "^"";<» attach to an over, 
 it is his dutv 2, ™. k • " •'■'graco'l to tlie indoraoe, and 
 gmZ^mL^uZ , '°?°'"™ """"'"'"git;" and it i, die- 
 
 it »»bioot to ecuitie, b:L3reXXi't;: "i r 
 
 meat (about which he can inqui™), b'utti ^oSed hCi-' 
 
 Tt ^mr,"""^"" '""'""'"-'" ""«" "« »- knoworXi 
 
 This distinction received the sanction of the TTn-i^. „f t i 
 
 ■n an early case- and it was accept^ b/cha^.SrK^l^^'''' 
 
 the aaniirnaa o 17 o«- »„-" eiiuiiies it was subiecfc tn m th^ 1 J_ 
 
 action takes itsubjTct tTthr^Z eauJtiSi^. •""* the assignee of a chose in 
 S. he assignee. 3 Vern! 691-^? !^ Wma ISf '1''^' ^i°o^ ''i^ ^and" 
 But this rule is generaliv under«fnn/i f^ ^ xu ' * ^^* ^38; 4 Ves. 118. 
 original obligor or debtor??^Jd njtin eZftv V*^ .f^"'*-'^* residing i„ Ihe 
 8on against t^e assignor. . TlJeaSl ^*"^'?« *** «""» 'lilrd per! 
 «"l^°!!:_V*i««^hatllaim«WmkyhrveTE."/l"/.^":*rK^^^^^ 
 
 and aSoe;tain what claim- 'h.'^' ?" *-^'K°«« can always go t 
 action -She^'tsal^lZnrS&Z^^u:' S? ^on/ofStheV cVoTeTA 
 ab e with the utmost dilKce?KSSa^^ th« T.'^^^ ^."' ''«• ^^^ "«' ^2 
 third person against the obligee."* '"*'"^'° '^e Iktent equities of some 
 
 The principle upon which the assignee of a non-neirotiRhl« 
 chose in action takes it free from equiUes between prioXlde: 
 n il , A^^''""':' '" '^'^^^^^^^ '« ''^- «nore olearlTdefined 
 
 _J Redfern v. Ferrier (1818). 1 Dow. title to them, a purchaser from him 
 
 'Murray v.Lylburn (1817) 8 Johns. 7f^!l ^^ I^'f^ '^^ *•*« **i"'««» 
 Ch. (N. Y.) 441. See alw Mott V ^' ^''^ .beneficiary; but if overdue 
 
 Ciark (1848 . 9 Pa. St 399 Wm 1^ ^^ •"*"' 7'" '*°'^"' *»>« '^ief not 
 
 V. Donnelly (1898^. 54 Neb m 7J v * '? *'« '° *^^" «*»""* °°* by 
 W. It «n/ Vu_ ',-*.^.® .V"^' J."* ^- transfer affect the title of the true 
 
 W. R 601. The latest New' York 
 case is not in harmony with the 
 Chancellor's view. David Stevenson 
 V. Iba (1898), 155 N. Y. 824; 49 N. E. 
 R. 677. Tlie United States Supreme 
 Court, while regarding it favorably 
 m 1878 (National v. Texas, 87 U. a 78) 
 has in later cases departed from it 
 Cromwell v. Sac (1877), 96 U. a 51- 
 Morgan v. United States (1884), 118 
 U. a 47a In Illinois a distinction 
 — . .!P, „ n.ttTrii ueiween equities 
 and the legal title. If a trustee held 
 overdue securities and had the legal 
 
 owner. Rockford v. Young M. C. A 
 0898). 78 III. App. 180; aflBrmed. 5^ 
 N. E. R. 297; and see Henderson v. 
 Case (1879). 81 La. Ann. 816. Accord- 
 ing to this view if a trustee held 
 notes for custody only and had not 
 therefore the legal title to them, a 
 fraudulent transfer would not affect 
 the true owner. But we have seeo 
 much reason for the oi^nion that in 
 such case ho ought to be estopped 
 by the ostensible ownership of th© 
 trustee. 
 
CHAPTER XXV. 
 
 OSTENSIBLE OWNERSHIP AND AGENCY — EXECUTION OF DOC- 
 UMENTS. 
 
 There are two classes of cases to which attention is now 
 asked : 
 
 I. Cases in which the execution of documents has been fraud- 
 ulently obtained; and 
 
 II. Cases in which executed documents have been fraudu- 
 lently completed. 
 
 And the questions for discussion are: (1) Under what cir- 
 cumstances are signatories bound by the documents with re- 
 gard to third persons who have changed their position upon 
 the faith of the documents? and (2) Upon what ground does 
 such liability rest? 
 
 Estoppel the Ground of Decision. — It may be as well at the 
 outset to suggest that the rules for such cases are those of es- 
 toppel as applied to cases of assisted misrepresentation. In- 
 stances arise in this way: The signature, whether fraudulently 
 obtained or fraudulently applied, is by the defrauder repre-' 
 sented to some innocent party as being of obligatory character, 
 while, as a matter of fact owing to the fraud, it is not. Now the 
 law of estoppel provides that a misrepresentation will estop 
 not only him who makes it, but him who, in disregard of some 
 duty, did that which provided the opportunity or occasion for 
 the misrepresentation, and so made the misrepresentation cred- 
 ible.* Applied to the case in hand, then, estoppel would say 
 that if there be a duty of carefulness in the execution of a doc- 
 ument towards persons who afterwards and upon the faith of it 
 may change their positions; and if that duty be disregarded; 
 and if upon the faith of the document the position of some third 
 party is changed, then the executing party will be estopped. 
 One further qualification ought to be expressed, namely, that 
 the document must be one of ambulatory character; that is to 
 cav one that not merely onerates between the original parties 
 
 1 See cb. IV. Tlie presence of other necessary conditions is assumed. 
 
EXECUTION OF DCKJLMENTg. ^j-y 
 
 ™o««.^:p'o"'L" L^aXtr ioX^rro,^,- 
 
 inonoy to the defrRiifl«r. tu . payment of the 
 
 ments and ?v ' ^ mortgagee acts upon these docu- 
 
 hirL.„ ""P"^' "" •'"'y »' <»«fdne8s upon me I 
 
 ^though the documents we« not binding' 2"^, Jhlni 
 
 faith oTfh m „ Xrtr; r^^K '" '"'""°" "P"" '"o 
 donning their ;b;>t?;;ha:ote:^''™ '^''■""' -topped f^om 
 
 I. Execution Feaudulbntlt Obtained. 
 Astudy of the authorities of this class reveals the greatest 
 
 am 1,^ Z) . rf ""'y- """ '"^y -V ''"en closely e" 
 layman and not a lettered" individual, and a dupe of Zter 
 
423 
 
 0STES8IULB OWNKIWHIP AND AOKSOT. 
 
 pretension ; between occasions in " which no extraordinary catt- 
 tion was necessary" and those in which it was; between cases 
 in which the dupe was deceived as to the actual contents of 
 the document, and in others as to its legal effect; between case» 
 in which the deception was as to the land affected by the docu- 
 ment, and in others as to the disposition made of the land ; and 
 above all between cases in which the document was void, and 
 in others in which it was voidable. 
 
 To the writer all these distinctions may be supplanted by the 
 law of estoppel; and the various circumstances referred to will 
 have their due effect in helping us to determine whether or not 
 in each particular case the dupe ought to be estopped. 
 
 The Authorities.— A short review of some of the authorities 
 is necessary to make this clear. 
 
 (1582) In Thoroughgood'a Ctwe* Lord Coke held that if a deed 
 
 be read or explained 
 
 "to the party who delivereth it i . . . in other words than in truth it i* 
 
 'S 
 
 It 811(111 noi oinu . . . •oat ht who maketh it be a layman and 
 beina'not lettered ba (without covin in himself) deceived: and that ih proved 
 
 t sliall not bind 
 
 K tL"luTfo;nr.;rplea7ing in^u^^^^^^^ timt Y8-to;^8ay. that he was a 
 
 laVnan ind not learned, anS that the deed was read to him in other 
 words." , , , , . 
 
 Lord Coke said nothing as to lettered but lazy people who 
 complacently assume the truth of that which is told them and 
 are deceived ; but it is not hard to see what he would have said 
 
 to them. 
 
 In Touchstone (56) we find the following: 
 
 "So if the party that is to seal the deed can read himtdf and doth not, 
 or beinjr an illiterate or a blind man doth not require to hear the deed 
 read or the contents thereof declared, in these cases, albeit the deed be con- 
 trary to hit mind, yet it is good and unavoidable. 
 
 These two authorities are old, but their doctrine is whole- 
 some. 
 
 (1831) In Edwards v. Brown^ it is said: 
 
 ••I airree with my brother Russell that whatever shows that the bond 
 never was the deed of the defendant may be given in evidence under nov» 
 ett factum. But if the part/ actually executes it, a°d *«» °oX^^lSi 
 the time to execute it, and was not deceived as to the actuai eontent» 
 of the^nd. though he might be misled as to the legal effect, and though 
 he mfght hive been entitled to avoid the bond by stating that he was s» 
 misled, it nevertheless became by the execution the deed of the defendant. 
 Lnd he is not at liberty upon the plea of nan est factum to say it was not" 
 
 (1852) Hioms v. Jlolton* The execution of a deed wa» 
 " fraudulently obtained " (particulars not given;, upon the faith 
 
 of vvliicu money was auvunucu uj » uQiru ^v. 
 
 
 12 Rep. 9(1. 
 
 »lCr. &J. 811; 9L. J. Ex.981 
 
 >16 Beav. 38a» 
 
EXECLTlO» or DUCLMKNTI. 
 
 4at 
 
 John Rorailly held the dupe 
 
 was 
 
 bound, although " he did not un- 
 :•" He was probably a lettered 
 
 derstand wl 
 individual. 
 
 (1867) VorUy v. Cooler} A solicitor laid before his client a' 
 r/ hTr?L"*^ "'''' '"''* ^^^''^^ ^^'^""^ °^'"8 ^° ^he solicitor, 
 
 The «ollh * n'!.**''?* "-""^''^ * ™°'''«^'^«« ^°'' ^he amount 
 The solicitor told the client that the instrument was a cove- 
 nant to produce title-deeds, similar to other instruments wl.?ch 
 he had theretofore executed. The client took the solicitor's 
 word for It, and executed the mortgage, which, of course, was 
 sliortly afterwards transferred to an innocent holder for value 
 Kindersley, V. C, decided in favor of the dupe, saving: 
 
 the act and deed <,f h n whoLd noS.l .T,?^."'''?,''^ applied cannot be 
 
 Ko distmction here between lettered and lay people 
 
 (1860) Ogilvie v. Jeafreson,^ three years later and by the 
 same judge, was to the same effect, but with this important 
 suggested qualification: 
 
 no;r/oUtfj"iXr^i^^^^^^^^ '•^^ ~--«- -- -« on which 
 
 (1869) Foster v. McKinnon? The indorsement of a bill was 
 obtamed L raudulently alleging that it was a guaranty, simi- 
 lar to onb previously given. The bill was "in the ordinary 
 shape of a bill of exchange, and bore a stamp, the impress of 
 which was visible through the paper." The dupe placed his 
 signature on the back of the bill, immediately after that of an- 
 other mdorser. In an action upon the bill bv a honafid^ holder 
 a verdict went for the dupe upon the following charcre- 
 
 f "dander tZ'i'jfeJ^tf ".'^r'' «'«"«^ '* Su^Sw" n^tZJ ulas a WU 
 
 In term this charge was held to be right; but the court was 
 evidently not v&ty well satisfied that there was no negligence, 
 
 llGiff. 280; 27 I* J. Ch. 185. 
 «2Giff. 853; 28 L. J. Ch. 905. 
 
 •L.R 4 C. P. 704; 
 810. 
 
 L. J. G P. 
 
480 
 
 08TEN8IBLK OWNBHflBlP AND AOKNOY. 
 
 for a new trial was ordered so that there might be "further 
 investigation." 
 (1871) In Hunter v. Waltera^ Lord llatherley said: 
 " I apprehend that if a man executes a solemn Instruuient by which he 
 conveys an Interest, and If he signs on the back a ''j^'P' («' "Xk^^^ 
 docunient which, us the vioe-chancellor observes, could not be mtataken,— 
 hTmnnot affect not to know u,hat he i« doing and it Is not enough for him 
 afterwards to say that he thought it waa only a mRtter of form. 
 
 Mellish, L. J., said: 
 
 " Now in my opinion it la still a doubtful question at law, on which I da 
 not wish to Rive any decisive opinion, v lu-ther, if there be a false repre- 
 Mntatlon res|»eoting the contenh of a deed, a person who Is an educated 
 !^r«o« and who nilKht by a very simple means have satisfied himself aa 
 to what U?e contents of the dee.l really were may not. 6// executing xt 
 \?e(diaentlu (>e eatouped as between himself and a person who innocently 
 ;.Sr u^.^heCS^of the deed being valid and who accepU an esUte 
 under it" 
 
 And James, L. J., said : 
 
 "I am of opinion that the rule of equity Is the rule of common sense, 
 that the principal must suffer for the fraud of his ag.^"^. «"«; "oj 'J* 
 strancer who isUealing with the agent; that the man who haa made ths 
 rJu^esentationeli e,, the man who although deceived has executed the doc- 
 nS?^unTrwMi^r circumstances, must t^ar the consequence, of those 
 ?e^re8entations, and not the man who has trusted to the representation* 
 so made." 
 
 (1886) National v. Jackson} One Jackson induced his two 
 sisters to execute conveyances of property to him by telling 
 
 them that they 
 
 "were two deeds respecting the mortgage of £700. which it was necessary 
 timt JheTshSld sign, as & was going to clear off King's mortgage and 
 send the deeds to King." 
 
 Cotton, L. J., said : 
 
 "The defendants trusted Jackson, both as their brother and solleitor, 
 and cannot be said to have been guilty of neg ect in so doing. ... 
 Now the rule of law is, that if the person who seals and delivers a deed is 
 misTed by7he roiStatement or misrepresentation of the If "onX«'"''°f 
 the execution of the deeds, so that he does not know what is the instr u- 
 mentto wh°oh he puts his hand, the deed is not his deed at a I ; because 
 he was ndther rainUed nor intended to sign a document of that character 
 or ^aL Is, for instance, a release while intending to execute a lease. Such 
 a deed is wS . On the evidence it is clear that nothing was said to 
 
 mislead them as to the naf«re of the instrument th^y.^«'« «f but ?t^is in 
 Ji ^«.Vhtfnl how far thev understood the nature of the deeds, but it is in 
 ^.S/SJh oi SrupnutL evidence that they knew thnt the d^d» dealt xn 
 Zme way vnth their houses. This contention therefore fails." 
 
 Lindley, L. J., said : 
 
 " It is impossible, consistently with legal principles, to hold the convey- 
 ance executed by their sisters absolutety void They knew that*heu»^ 
 M^dtithetrholses although they did 7* «»^«'-»*«"f/';«f ^ff' j.^^f 
 ♦ r isted their brother and were cheated by him. On t»e,^a"*'^°'^.'5y.f ' 
 Thnrm^lCrood's caw aiid other cases these deeds cannot be considered 
 JS thoWhey iSty b? it aside as voidable, except as against a pur- 
 chaser for valuts without noiicc. 
 
 IL. R 7 Ch. 83; 41 L. J. Ch. 175. 
 
 >88Ch.D.t 
 
EXECUTION OF DOCLME.NT8, 
 
 481 
 
 further 
 
 which b» 
 loney — *» 
 ifltaken, — 
 h for him 
 
 rhioh I do 
 ilse repre* 
 \ educated 
 himself as 
 •editing it 
 nnocently 
 an estate 
 
 ion sense, 
 id not the 
 made the 
 id the doo- 
 ea of those 
 sentations 
 
 bis two 
 y telling 
 
 necessary 
 rtgage and 
 
 id solicitor, 
 ng. . . . 
 ■8 a deed is 
 I procuring 
 the instru- 
 ill: because 
 t character 
 lease. Such 
 was said to 
 icuting. It 
 but it is in 
 eda dealt in 
 
 the convey- 
 hat they re- 
 ffect. They 
 uthority of 
 considered 
 ainst a pur- 
 
 Lopes, L. J., said : 
 
 this they relied on t^.e^rKheil." "'* '*'*"' °' them -but as to 
 
 (1SS7) Ilerchmerv. Elliott} A female mortgaffee left her 
 mortgage with her solicitor. Subsequently she executed an 
 assignment of it upon a representation made by the solicitor 
 Umt It was a document to extend the time for payment. Bovd 
 C, said : r j j f 
 
 heKv he^r «ii^h„^ ^^l*'""'?" o' the term of pay.nenrof tS mo i^I^. 
 
 (isyy) Onward v. ^mithson? A deed was executed upon 
 the faith of a misrepresentation as to the land which it af- 
 fected — probably the most important part of a deed,— and it 
 was held not to be void. 
 tJ'J^^ they intended to execute a deed containing what this deed did com- 
 
 5f the*'S haiTt Sated to?'."" T '^"I^k '' ""/ "i V"^"'«"' concealment 
 oi ine lacc that it related to land which they had already conveyed." 
 
 Void and Voidable.— One cannot peruse these various opin- 
 ions and retain any clear view of the distinction between void 
 and voidable deeds.» (1) if we take the distinction to be be- 
 tween deception "as to the actual contents" on the one hand 
 and "as to the legal effect" on the other (Edwards v. Brown, 
 ante), we find ourselves confronted with J^ational v. Jackson 
 (ante), and find it impossible to say whether the circumstances 
 of that case brought it within the one or the other class. There 
 the dupes "dealt in some way with their houses," and they 
 
 ' 14 Ont 714. But see Dominion 
 Bank v. Blair (1880), 80 U. C. C. P. 
 591. 
 
 »(1893) 1 Ch. 14; 62 L. J. Ch. 188. 
 
 * In Kerr on Fraud (3d ed., p. 9) 
 the matter is put thus (the italics 
 are by the present writer): "A dis- 
 tinction must be taken between caries 
 where a man executes an instrument 
 with the mind and intention to exe- 
 cute it, though his assent may have 
 been obtained by frAnrj, and ca-ses 
 where a m^n is by fraudulent con- 
 trivances induced to put bis hand 
 
 and seal to an instrument which he 
 never intended and had no mind to 
 execute," If by this is meant that 
 there is a distinction between cases 
 in which a man intends to deliver tL. 
 deed and those in which he does not, 
 the proposition can be readily as- 
 sented to, but in that case it has no 
 relation to the problem of void and 
 voidable deeds. If thore be some 
 other meaning in the sentence, its 
 '...asive quality well illustrates the 
 prevalent confusion. 
 
11 
 
 it 111!! I 
 
 433 OSTENSIBLE OWNERSHIP AND AOKNOT. 
 
 knew nothing as to the effect of the deeds because they knew 
 little or nothing of their contents. We have also to explain 
 Onv^ard v. Smithson (ante). (2) If we take the distincUon to 
 be between cases in which a document is ^^^^^^^^ " ^^^.\*^^ 
 mind and intention to execute a deed of a different kind and 
 for a different purpose from that which by deceit and fraud 
 was substituted" {Vorley v. Cooke, ante), we are met with the 
 quotation from Touchstone {ante) that in some such cases, al- 
 beit the deed be contrary to his mind, yet it is good and un- 
 avoidable;" by the statement in Ke^imdy v. Green tha.t a 
 man is not to avoid the consequences of a want of due diligence 
 by stating that he has neglected those means which would have 
 been required if he had used reasonable caution," and by the 
 statement in Hunter v. Walters {ante) that sometimes a man 
 « cannot affect not to know what he was doing." 
 
 The strong impression left by the cases is that the terms 
 "void" and "voidable" are used teleologically, so to speak, 
 rather than in a scientific classification. That is to say, we 
 have no specification of the essential elements of the two classes 
 of documents; but the words represent vaguely the quantity 
 of mora^. shock which the various cases produce - a very abom- 
 inable fraud, and we say "void;" one not so disturbing, and 
 we say " voidable." 
 
 The justness of this criticism will become very apparent 
 to any one who endeavors to follow the words into the numer- 
 ous cases relating to the transactions of infants and lunatics. 
 Perhaps the best that can be said with reference to the con- 
 tracts of infants is contained in the old dictum of Eyre, C. J. : 
 
 S;?^wS rc^ntrfs o 'an uncertain naU^^^^^ to beaefitor pre3ud.ce. 
 it is voidable only at the election of the infant. 
 
 In an able judgment Hemphill, C. J., suggested 
 ..that if the semblance of benefit be regar^^^^^^ '^,SIZ 
 
 tional and consistent rue would be that^^^^^^^^ ^ ^^^^^^ 
 
 ?ofrJn7art"h\fti5?S.:^^^^^^^^^^ .^ 
 
 But the learned Chief Justice is constrained to avow that 
 
 611. 
 
explain 
 tion to 
 nth the 
 ind and 
 d fraud 
 dth the 
 ases, al- 
 and un- 
 that " a 
 liligence 
 jld have 
 I by the 
 I a man 
 
 16 terms 
 speak, 
 say, we 
 o classes 
 quantity 
 py abom- 
 >ing, and 
 
 apparent 
 e numer- 
 
 lunatics. 
 
 the con- 
 re, C. J. : 
 
 he infant's 
 , it is good; 
 ■ prejudice, 
 
 he more ra- 
 eemed void 
 Id be better 
 i 
 
 W that 
 
 Session, and 
 ts of minors 
 
 1852), 8 Tex. 
 lere cited. 
 
 EXKOUTION OF DOCL'MENTS. 403 
 
 '^'^Ih'tl^lltlL^l^^^^^^ Jhat the criterions by 
 
 vol-ed in doubt and dKlty?"!*' '*''*" ^ determined, remain ii^ 
 
 The law in the United States with reference to the contracts 
 
 TailT T V.'"^'"^ satisfactory, for in such cases much L 
 
 said to depend (m addition to considerations of benefit or dis- 
 
 advantage) upon whether "the incompetent has been placed 
 
 under guardianship." « *^ 
 
 The same uncertainty attends deeds made under duress, and 
 there is the same attempt to divide them into void and void- 
 
 The justness of the criticism (that the words are customarily 
 used in loose and indefinite fashion) may also be argued from 
 the ambiguous way in which they are employed in statutes- 
 
 LtenlH / '. ""T^ ^'•'^"'"'^^ "^^•^ ^^^«" "voidable" is 
 mtended ;« and also from the fact that sometimes judicial lan- 
 guage indicates that although a deed may be "null and void, 
 yet. as between S. and a purchaser for value on the faith that 
 they were valid, they may be valid." * 
 
 To the writer it appears that the current phraseoloc^y was 
 employed /a.^fe de mieux; or rather, perhaps, in defadi of a 
 clear apprehension of the principles involved. The two classes 
 
 tlT ZTu '^'^'^^ '""" '^ exist -those in which the signer 
 ought and those in which he ought not to be bound; and the 
 reason also was (for the most part) seen, namely, carelessness. 
 What was not understood was, upon what principle a deed 
 co.ld be not binding when executed, as between thrparties to 
 It; and yet afterwards, without any further act on the part of 
 
 ' Id. 86. 
 
 'Devlin on Deeds, vol. 1, 73, 74; 
 Allisv. Billings (1848), 6 Met. (Mass.) 
 417; Cookrill v. Cockrill (1899), 84 C. 
 C. App. 254; 92 Fed. R. 811. 
 
 » Anson on Contracts (2d Am. ed.), 
 177; Clark on Contracts, 363; Chand 
 on Consent, 63; Bush v. Brown (1875), 
 49 iDd. 577; Oregon v. Forrest (1891). 
 128N.Y. 83;28N. E. R 137: Sorn- 
 borger v. Sanford (1892), 34 Neb. 498; 
 53 N. W. R. 868; Miller v. Minor 
 (1893), 98 Mich. 163; 67 N. W. R 101. 
 *See Ewell v. Daggs (18831 108 
 88 
 
 U. a. 143; Bennett v. Mattingly (1886)1 
 110 Ind. 203; 11 N. E. R 792. 
 •Per Erie, C. J., in Swan v. North 
 
 B. A. (1859), 7 C. B. N. S. 430; 30 L. J. 
 
 C. P. lia With reference to judg- 
 ments, too, we are verj truly told 
 that "the distinctions between void 
 and voidable judgments are very 
 nice, and they may fall under the 
 one class or the other as they are re- 
 garded for different purposes." Ex 
 parte Lange (18?S), ig y,r-j|, .tj g^. 
 175, 178. ^ ' 
 
r.ij 
 
 ' ' 
 
 I HI 
 
 \ ' ' 
 
 434 OSTENSIBLE OWNERSHIP AND AGENCY. 
 
 the Signer, become binding upon him as against other persons. 
 
 Thus Tt was said that there is no case 
 
 ..that shows that an inBtrp^ent which when eec^^^^^^^^^^^ 
 
 wKSed and unauthorized by instrument under seal ' 
 
 Distinctions were therefore attempted between degrees of 
 fraud practiced on the dupe rather than between degrees of 
 carelessness exhibited by him. And it was said that if the 
 fraud of the knave was of certain (not very certain) character 
 the deed was void against strangers; instead of saying that if 
 the carelessness of the dupe was the cause of his deception he 
 was estopped as against those strangers from asserting that it 
 
 was void. , - ^ u 
 
 Soluiion.-n\ght\y viewed, no document obtained by mis- 
 rei)resentation (whether the vilest, the most complex, the most 
 simple, or the most innocent) is binding upon the dupe; and its 
 character remains constant.(it cannot change), accompanying it 
 into whatsoever remotest hands it may come.'' As against per- 
 sons, however, who upon the faith of it being a valid docu- 
 menthave changed their positions, the dupe, if the fault be 
 chargeable to his carelessness, is estopped, for he has assisted 
 the misrepresentation and provided the opportunity for it. That 
 
 is the rationale of the matter. , • . u *. 
 
 It may be suggested that admitting this solution to be theo- 
 retically sufficient, yet that it is of no practical utility, for we 
 are still left to the uncertainty of the word "carelessness. 
 That is perfectly true ; but it is something at all events to khow 
 that it is carelessness that we have to deal with; for we shall 
 then, for the first time, be in a position to develop rules for 
 future guidance. That carelessness must be defined and ascer- 
 tained £ little reason for eliminating it from our jurisprudence; 
 and the advance obtained by regarding the matter from an 
 estoppel standpoint may readily be appreciated by observing 
 the reason at present given for regarding a document as void: 
 
 O" 
 
 B 
 
 denoe the very deed to which iho 
 learned judge referred was after- 
 wards an example of that which he 
 thought to be without precedent. 
 
 ocf „ „ u^t^mar nHQi-V 10 Mass. 
 
 188; Williams v. Given (1849), 6 Grat. 
 (Va.) 268; Onward v. Smithson (1893), 
 1 Ch. 14; 6-2 L. J. Ch. 188. 
 
EXECUTION OF DOCLMENTS. 
 
 436 
 
 ersons. 
 
 pable of 
 deed by 
 lie part^ 
 
 rees of > 
 jrees of 
 i if the 
 iracter^ 
 ■ that if 
 tion, he 
 I that it 
 
 bv mis- 
 he most 
 ; and its 
 nying it 
 inst per- 
 id docu- 
 fault be 
 assisted 
 it. That 
 
 be theo- 
 r, for we 
 essness." 
 
 to khow 
 we shall 
 rules for 
 ,nd ascer- 
 >rudence ; 
 
 from an 
 3bserving 
 t as void : 
 
 aud exists, 
 >nipany the 
 
 •ok (1841), 7 
 
 .492. 
 
 !4), 19 Mass. 
 
 849). 6 Grat. 
 
 thson(1893), 
 
 It is something to be able to relieve the courts from such con- 
 • tradiction as this, and to substitute the remark that although 
 the signer did in contemplation of everybody sign the contract, 
 yet that because of the fraud he is not bound by it; and that 
 he 18 or is not estopped from so saying according as his conduct 
 may or may not exhibit «an appropriate measure of prudence 
 to avoid causing harm " to others.' 
 
 It is not asserted that there is no true distinction between 
 void and voidable deeds. Beyond question there is a very 
 clear Ime between them, determinable by the well-known con- 
 sideration that some of them are capable of confirmation and 
 others are not.' According to this classification, certain deeds 
 (such as those in violation of public pohcy) are void ; and deeds 
 obtained by misrepresentation (whatever the character of it^ 
 are voidable; that is to say, are capable of confirmation.* It 
 would be clearly unscientific and confusing were we by dif- 
 ferent definit,ions and fresh considerations, to subdivide these 
 voidable deeds again into void and voidable. 
 
 The matter, therefore, may be put in this form: (1) The 
 dupe having been misled, is not bound by the document, and 
 as between Him and the knave there is no estoppel; but (2) as 
 between him and innocent parties he will be estopped, if he 
 have been careless, "albeit the deed be contrary to his mind " 
 He will be estopped although he was tricked into executin<. a 
 document of a nature wholly different from that which he"in 
 fact believed it to be — 
 " by executing it negligently be estopped as between himself and a person 
 
 1 Foster v. MacKinnon (1869), L. R 
 4 C. P. 711; 38 L. J. C. P. 310. 
 
 2 Ante, p. 80. 
 
 »Cumining8 v, Powell (1852), 8 Tex. 
 85. The continental division into 
 (1) absolutely void (a g., a will of an 
 infant), (2) relatively void (e. g., a 
 bishop's lease "exceeding the period 
 prescribed by law; which is good as 
 
 __ — 1 11,. „!^nvp, Lrui iiui as againsc 
 
 hia successor"), and (8) voidable, 
 namely, «t j^se which produce their 
 legal reaxit, but this result can be 
 
 set aside by the action of some per- 
 son concerned " (Markby's Elements 
 of Law, sec. 273), is scientific. It re- 
 mained for English-speaking lawyers 
 to subdivide this voidable class into 
 void and voidable. See it referred 
 to in PearsoU v. Chapin (1862), 44 Pa, 
 St, 15; Seylar v. Carson (1871), 60 Pa, 
 St. 81. 
 
 » Ifc cannot be contended that in 
 any of the instances above given the 
 document could not have been con- 
 firmed by the dupe. 
 
u *., 
 
 436 
 
 08TEK8IBLB OWNERSHIP AND AGENCY. 
 
 who innocently acts uj.pn tlie faith of the deed being valid and who ao 
 
 cepts an estate under it." ' 
 
 Or, as put in Coote on Mortgages:' 
 
 .♦Where two innocent peis-ons are aCEected by the fraud of the solicitor, 
 the S who!?; sl^^ing^uraentB, although m ignorance, enables the 
 solicitor to commit the fraud, suffers. , ,. , j i tt^^A 
 
 In this view the distinctions between lettered and unlettered 
 individuals, between occasions calling for "extraordinary cau- 
 tion » and other occasions, etc., are distinctions not in the law 
 but in the facts. The question must always be whether the 
 dupe has acted with reasonable diligence or whether he has been 
 careless, and the circumstances (including those just referred to) 
 of each case must be taken into account in judging his conduct. 
 United States Law.- The law in the United States seems to 
 be fairly established upon this basis. Chief Justice Gibson thus 
 
 states it : . , , m 
 
 "If a Dftrtv who can read will not read a deed put before him 'or execu- 
 
 ♦5„„.nr?fSff unable to read, will not demand to have it read and ex- 
 
 ffiedVo\'im?LTg«fC^^ negligence, which I take it is not the 
 
 subject of protection either in equity or law." » 
 So in Oreen v. Wilkie it is said that 
 
 hands of a bona ^purchaser. * 
 
 iPer Mellish, L. J., in Hunter v. 
 Walters (1871), L. R. 7 Ch. 82; 41 L. 
 J. Ch. 176. 
 
 2 4th ed. 856. So also, if a creditor 
 be fraudulently induced to give up 
 some of his securities, he. and not 
 the surety, must suffer. Merchants' 
 Bank v. McKay (1890), 12 Ont 49a 
 » Re Greenfield (1850), 14 Pa. St 49«. 
 <(1896) 98 Iowa, 74; 66 N. W. B. 
 1046. Signer must read if he can. 
 Roach V. Karr (1877), 18 Kan. 629; 
 ^tna V. Franks (1880), 63 Iowa, 618; 
 6 N. "W. R. 9; Cowgill v. Pettifish 
 (1892), 61 Mo. App. 364; Kalamazoo 
 V. Clark (1892), 62 Mo. App. 593; El- 
 mendorf v. Tejada i:'>3). 23 S. W. R. 
 935 fTex.); Metcalfe v.Metcalfe (1893), 
 85 Me. 478; 27 Atl. R. 467; Blaisdell 
 
 V. Leach ,(1894), 86 Pac. R. 1019; El- 
 
 dridge v. Railroad Co. (1805), 88 Me. 
 
 191; 88 Atl. R. 974; Hill v.Yarbrough 
 
 (1896X 62 Ark. 826; 85 S. W. R. 433; 
 
 Engstad v. Sy verson (1898), 73 Minn. 
 
 188; 75 N. W. R. 125; Olson v. Roy- 
 em (1899). 77 N. W. R. 818 (Minn.). 
 If signer cannot read he must require 
 the document to be read to him. 
 Metcalfe v. Metcalfe, 85 Me. 473. 
 There roust be no carelessness. Webb 
 V, Corbin (1881), 78 Ind. 408; Green 
 V. Wilkie (1896), 98 Iowa, 74; 66 N. 
 W. R. 1046. For example, if the 
 document be improperly read by a 
 stranger, and neighbors are present 
 who might have been appealed to, 
 the signer is bound. Swamell v. 
 Watson (1874), 71 IlL 456. Distinc- 
 tion is sometimes taken where the 
 document is altogether different 
 from that intended. Webb v. Cor- 
 bin, ante; and Green v. Wilkie, ante. 
 But the general argument (as above) 
 leaves no room for such a considera- 
 
 the dupe has been deluded as to the 
 whole document, or as to part or 
 parts of it only; but whether he has 
 
EXECUTION OF DOCUMENTS. 
 
 487 
 
 who 8<y 
 
 solicitor, 
 bbles the 
 
 lettered 
 iry cau- 
 the law 
 her the 
 las been 
 irred to) 
 jonduct. 
 ;eems to 
 son thus 
 
 for execu- 
 id and ex- 
 is not the 
 
 tt from in- 
 leable toith 
 J it in the 
 
 on V. Roy- 
 18 (Minn.)- 
 ast require 
 ,d to him. 
 ) Me. 473. 
 less. Webb 
 103; Oreen 
 , 74; 66 N. 
 pie, if the 
 r read by a 
 are present 
 ppealed to, 
 Jwamell v. 
 B. Distinc- 
 i where the 
 r different 
 'ebb V. Cor- 
 Vilkie, ante. 
 it (as above) 
 a considera- 
 
 ed as to the 
 
 to part or 
 
 ether he has 
 
 In some cases even the excuse of reasonable diligence seems 
 
 to be excluded; and it is certainly more in accordance with 
 
 principle that the person selecting the rascal should suffer, 
 
 rather than he who is misled by him. 
 
 «n '\Yl!^?, this same principle it is almost universally held that whenever 
 an instrument IS procured from one person by the fraud or vHlainv of 
 
 If all the rights which the instrument apparently Kives should at tlm?Hma 
 honiflrr'^l be transferred to ai.othe^r'^ho KK aninnoc^t^^^^ 
 bona fide holder for value, the innocent and 6ona /We hddercou?d enforce 
 [nn™^"™^"' against the maker, although the maker might aVotea^ 
 
 ing that the instrument was void as against the innocent bX^We holder™ 
 Analogy.— Useful analogy may be found in one of the points 
 considered in a previous chapter.' We there saw that if an 
 owner of goods were swindled into parting with possession of 
 them, a purchaser from the swindler would be protected if the 
 title had passed from the owner to the swindler; but if it had 
 not passed — if there had been in reality no contract at all be- 
 tween them — then of course the swindler's vendee could take 
 nothing. We also saw, however, that although there might 
 be no contract, yet if the owner had equipped the swindler 
 with indicia of ownership of the goods, the owner would bo 
 estopped from denying that the title had passed. 
 
 These principles are applicable to the subject under discus- 
 sion. For where a transfer of property is executed, the title 
 passes to the grantee even though he be a swindlet (for the act 
 is separable from the motive which induced it, and is an act, 
 although revocable for fraud); and the swindler, passing on the 
 title, gives to the innocent purchaser that which he can be de- 
 prived of by superior equity only. 
 
 But waiving this point, the intervention of estoppel, as in the 
 analogous case above referred to, ends the dispute. For even 
 if it be admitted that the transfer from the owner to the 
 swindler is void, yet the owner is estopped from so saying as 
 against an innocent purchaser who has relied upon the docu- 
 ment. The question then becomes, not one 
 
 v^!lSl'"*°l°f *^'«a<«5.™inj?an7 contract "-not a question of void and 
 voidable --Ijut a question whether the owner of the goods has by his oon- 
 
 too easily fallen a prey to the would be bound by a note which he 
 
 swindle - whatever its character. signed under misrenreiwntaHnn- Tf 
 
 I State v. Matthews (1890), 44 Kan. the rule of "reasonable diligence" 
 
 696; 25 Pa& R. Sft And see Atch- be sufficiently drastically construed 
 
 ison V. Brassfleld (1893), 51 Kan. 167; and applied, it may meet the require- 
 
 88 Pac. R. 814. It would hardly be ments of all cases, 
 
 contended, however, that a lunatic « Ch. XXL • , 
 
488 
 
 OSTKNSIBLB OWNERSHIP AND AOENOT. 
 
 heated hira, or to whom he ho» 
 he owner so as to give a good 
 
 duct allowed the person who has eith 
 intrusted the goods, to hold himself ou- 
 title toabona^de purchaser for value. * 
 
 II. EXEODTION FkAUDDLENTLY CoMPLEl'BD. 
 
 The conclusion arrived at in the preceding paragraphs that 
 there is a duty of carefulness with reference to the execution 
 of documents upon the faith of which other persons may change 
 their position -a duty that one shall inform himself as to the 
 contents of that which he signs -does not involve, but is not 
 disparate f rem that which is now to follow, namely, that there 
 is a duty of carefulness not only as to the contents but as to 
 the form and custody of such documents. 
 
 Once admitted that towards one's fellow-men there is some 
 duty of carefulness that one is not too readily made an instru- 
 ment for their undoing, and it would seem difficult to say that 
 opportunity for fraud ought not to be given by carelessly sign- 
 ing a document the contents of which were misrepresented; 
 but that such opportunity might with impunity be given by 
 signing an incomplete document which was afterwards fraud- 
 ulently filled up, or by intrusting a completed instrument to 
 the custody of one who made fraudulent use o| it. That in 
 one case the fraud is prior, and in the others subsequent, to the 
 execution of the instrument, is not sufficient ground for distinc- 
 tion; and there is the same carelessness and betrayed trustful- 
 ness in all such cases. 
 
 Division of the Si^Jeot-Yor the sake of clearness it will be 
 
 well to divide the subject into: 
 
 I. Documents confided to another person. 
 II. Documents stolen or found. 
 Cross-divisions will be made as follows: 
 
 (1) A. Documents in complete form. 
 B. Documents in incomplete form. 
 
 (a) Blanks purposely left. 
 
 (6) Spaces carelessly left. 
 
 (c) Signed, but otherwise blank slips of paper. 
 
 (oa) Blanks or spaces known to the transferee. 
 
 {hb) Blanks or spaces unknown to the transferee. 
 
 (2) A. " Negotiable " instruments. 
 B. Other docum-^ats. 
 
 >Henderson v. Williams (1895). 1 subject more fully discussed, ante, 
 Q. B. 627; 64 L. J. Q. B. 808. See the p. 803. 
 
EXECUTIOy OF D00CMENT8. 439 
 
 I. Documents Confided to Another Persok* 
 A. "neootiable" instruments. 
 Premising that the word « negotiable » is being used in its 
 common acceptation,! observe that various cases may arise: 
 
 (1) A signed document, in complete form, may be left with 
 some one for custody merely, or for delivery upon the happen- 
 ing of some contingency. 
 
 (2) The document so left may be in blank- blank spaces or 
 entirely blank. ^ 
 
 (1) Completed Negotialle DocumenU.-^ As to these cases the 
 present writer adopts the language of Mitchell, J • 
 
 In a very recent case in the Supreme Court of the United 
 otates Mr. Justice Brewer said • 
 
 ment the inquiry is always or»n whpfhkr fh-. *M°** '"I' °° **>« '^stru- 
 been performed? WhilSIr TJy be the 5uf«T'!!^°°.?' *^^ ^^''''''" »>«« 
 
 Mr. Danielin his valuable book on Negotiable Instruments 
 takes a different view: 
 
 »It8 meaning is discussed in ch. 
 XXIV. 
 
 2 First Nat Bank v. Compo (1895), 
 -: Minn. 374; 63 N. W. R. 731. And 
 see Fearir g v. Clark (1860), 83 Masa 
 74; Morris v. Preston (1879X 93 111. 
 215; Chase Nat Bank v. Faurot (1896) 
 149 N. Y. 533; 44 N. E. R. 164; Galvin 
 V. Syfers (1898), 53 N. R R. (Ind.) 96; 
 Cross V. Currie (1880), 5 Ont App. 31 ; 
 Merchants' Bank v. Good (18901 6 
 Man. 839; Bills of Exchange Act 45 
 & 46 Vic. (Imp.), ch. 61, § 81; 58 Vic. 
 <Can.), ch. 33, g 31. 
 
 ! agent 
 
 'Provident v. Mercer (1898), 170 
 U. S.'593; 18 S. C. R. 788. And see 
 Vallett V. Parker (1831), 6 Wend. 
 (N. Y.) 630; Graflf v. Logue (1883), 61 
 Iowa, 707; 17 N. W. R 171; Long IsL 
 and V. Columbus (1895), 65 Fed. R. 
 455. But see Burson v. Huntingdon 
 (1870), 31 Mich. 416. 
 
 * Sec. 854. And see Ontario Bank V. 
 Gibson (1886X 8 Man. 408; 4 Man. 440. 
 
 — 1 — s,..^.c7 iiwau V. i/ixon 
 
 (1851, 6 Ex. 869; 30 L. J. Et 295) as 
 favorable to his views; but that case 
 is complicated with the circum- 
 

 410 
 
 OSTENSIBLE OWNERSHIP AND AGENCY, 
 
 This reasoning would be appropriate were the question one 
 of acrency. But it is not; it is one of estoppel by ostensible 
 ownership. It is within the language of Lord Herschell when ' 
 
 ho s&.ici * 
 
 "If the owner of a chose In action clothes a third party with the appar- 
 ent ownershirand right of disposition of it. he i» estopped from assertinjf 
 Ws tillHr igSt aVrson to whom such third party has disposed of it, 
 and wlio received it in good faith and for value. . • u *v, 
 
 A distinction is sometimes taken between cases in which the 
 
 depositee was to remain a mere custodian, and those in which 
 
 he was to become active upon the happening of a contingency. 
 
 " Whether the acceptor of a blank bill is liable upon it depends upon his 
 
 having issued the acceptance intending it to be used. 
 
 But it will be observed that Lord Herschell's language ap- 
 plies to the one case as well as to the other. 
 
 TLe ground of estoppel in such cases is clearly ostensible 
 ownership (or in some special cases ostensible agency). As we 
 have already seen,» the possession of a negotiable instrument 
 carries with it the appearance of ownership; the person in- 
 trusted therefore is the ostensible although not the real owner 
 of the document; the obligor is in some measure responsible 
 for this appearance of ownership -he has assisted the misrep- 
 resentation of ownership by handing over the evidence of it^ 
 and for that reason ought to be estopped. 
 
 Blanks in NegotiahU Inatruments.-^The instrument which i* 
 confided to another person may be in blank form. Let us deal 
 more at length with such documents, for if when they are 
 fraudulently tilled up and transferred obligors are liable upon 
 them, any question as to liability were the instruments in com- 
 pleted form when parted with will be set at rest. 
 
 A form of note is indorsed and given to another person, with 
 authority to fill it up for £100; in fraud of the maker, thia 
 person fills it up for £500* and transfers it for value; is the 
 
 stance that the bill was incomplete 
 in form when taken by the trans- 
 feree; and the language of the judg- 
 ment leaves it uncertain whether 
 that fact was not the ground of de- 
 cisioa 
 
 2 Per Brett, L. J., in Baxendale v. 
 Bennett (1878), 3 Q. B. D. 526; 47 L. 
 J, Q. B. 624; Whitney v. Snyder 
 (1870), 3 Lans. (N. Y.) 477; Led wick 
 V, McKine (1873). 53 N. Y. 307; 
 Schuylkill v. Copley (1871), 67 Pa. St. 
 
 ?°!^,onia,. Bank V- Cadv (1890). 15 386; Kagel v. Totten (1882), 59 Md. 
 
 Ap^^CaI"267; 60 L. J. Cli. 131. See 447^ Randolph on CommerciaiFaper, 
 
 also per Lord Cairns in Goodwin v. § ISl. 
 
 Robarts (1876), 1 App. Cas. 476; 45 L- »^nie,p.894. 
 
 J.^B. 748. *^°^ this and other supposititious 
 
BXEODTION OF DOCUMENTS. 
 
 441 
 
 maker liable? and if so, why? Lord Mansfield would have 
 answered both questions in this way : 
 
 sum. The defendant said, 'Trust Galley to any amount, and I will Se his 
 security. * , , - -^ ..»> 
 
 This view has been very widely approved in English, Cana- 
 dian and United States courts.' Indeed, in a recent case, it is 
 said that it " has never been disputed." » And Mr. Bigelow in 
 his latest work (1893) has the following: 
 
 "The rule of law upon this point may be thus stated: One who writes 
 niirK'"®**«n'''*^l'u*^*'®''*°''' drawer, or indorser.and intrusts the paper to 
 another to fill up the contract and make him a party to a negotiable in- 
 strument, thereby confers upon Vie person so intrusted in favor of bona fide 
 holders for value the right to complete the contract at pleasure, so far as 
 consistent with the instrument as written or printed, at the time it is de- 
 livered to the person intrusted with it" * 
 
 Criticism.— But this language is inexact. Either the power 
 was conferred or it was not. The case is impossible that it 
 was not conferred and yet that it was, even if we add to that 
 statement, « in favor of lonafide holders." If it was conferred, 
 then cadit qumtio. If it was not conferred, then it is impos- 
 sible that the signer can be liable on the ground of authority. 
 
 Observe further that there are two classes of cases, and that 
 the explanation, "Trust Galley to any amount," can have no 
 reference at all to one of them. If the transferee knows that 
 the document was delivered in blank, then it may be that its 
 appearance indicates to him the existence of authority to fill 
 up. But if Galley fills up the blanks hefore going to the trans- 
 feree^ and the transferee knows nothing of there having been 
 blanks — believes that the instrument was complete when it 
 was signed,— then no message about Galley's authority can 
 have come to him. "Trust Galley" has nothing to do with 
 such a transaction. 
 
 cases we shall assume that, in juris- 
 dictions in which there are stamp 
 laws, the amount filled in does not 
 exceed the amount warranted by 
 the stamp affixed. 
 
 1 Rus^Ii V. Langstaflfe (1780), Doug. 
 514. And see Schultz v. Astiey 
 (1836), 8 Bing. N. C. 544; 5 L. J. C. P. 
 180- 2 Sc 8!S; St^ssing t. South 
 Eastern (1854), 3 E. & B. 556; 83 L. J. 
 Q. B. 398; Roba •. Tucker (1851), 
 16 Q. B. 560; 20 u j. Q. a 270. 
 
 'Schofleld v.Londesborough (1895), 
 1 Q. B. 555; 64 L. J. Q. R 293; Mc- 
 Innes v. Milton (1870). 80 U. C. Q. B. 
 489; Van Duzer v. Howe (I860), 21 
 N. Y. 535; First Nat Bank v. John- 
 ston (1893), 97 Ala. 655; 11 a R. 690; 
 Market v. Sargent (1893), 85 Me. 849; 
 27 Atl. R 103. 
 
 *Fer Kiiiara. J., in Merchants' 
 Bank v. Good (1890), 6 Man. 346. 
 
 *0n Bills and Notes, 887. 
 
442 
 
 OSTENSIBLE OWNERSHIP AND AOENOY. 
 
 Little notice, however, has heretofore been taken of this dis- 
 tinction, Lord Mansfield's dictum being supposed to be appli- 
 cable to all cases. Of it Mr. Daniel says: 
 
 "Tliis aJinirable statement of the law is almost unj^e«a"y q»ot*'^;!'*J 
 approval and followed as a precedent, applying equally to maker, acceptor 
 
 '^"^.S^Tr jroiKs uTs^i that if he knew that the paper had t.en 
 Bifined as a blank and filled up by force of authority by the holder, he 
 should inquire as to the extent of such authority and '/he fails to do so 
 he takes tlie paper at his peril. But this qualification of Lord ManHfteids 
 doctrine that the blank signature ia 'a letter o^f ^^'^ for an mdertnite 
 sum • does not impress us as an improvement upon it. The paper being hm- 
 itlessin its terms is prima facie limitless as to the authority it confers. 
 The holder is invested with a general authority as to that P^il" ; and the 
 craphic phrase of Lord Mansfield describes it to pertection. High authoi- 
 itiei, including Storjr and Parsons, concur in these views, which seem to us 
 clearly the most philosophical."* 
 
 The language most frequently met with in the cases is this: 
 
 "Where a party to a negotiable instrument intrusts it to the custody of 
 
 another with'^blanks not'^fiUed up, .. . . euch negotiable instrument 
 
 carries on its face an implied authority to fill up the blanks and perfect 
 
 the instrument" ' m j< 
 
 Blanks in Negotiable Instrumenta Known to the Transferee. 
 Taking this class first, observe that the case we have to deal 
 with is one in which Galley (the custodian of the instrument) 
 has either no authority at all to fill the blanks or else has au- 
 thority limited to a certain amount; and that Galley exceeds 
 his authority and passes the document to a person who knows 
 of the blanks. It is resorting to mere fiction in such a case to 
 allege that the obligor said: "Trust Galley to any amount." 
 The blanks may indeed have given to Galley the appearance 
 of widest authority, and such ostensible agency may estop the 
 obligee from denying the existence of such authority, but that 
 is another matter. 
 
 Instances of estoppel in analogous oases are very familiar in 
 the law of principal and agent. An agent may in many cases 
 exceed his authority, but yet, the circumstances surrounding 
 the agency having been such as to indicate the existence of the 
 assumed power, the principal is estopped from denying its ex- 
 istence.* When I am dealing with one whom I know to be 
 
 lOn Negotiable Instruments (4th 
 ed.), § 143. 
 
 a Sec. 147. And see First National 
 Bank v. Cpmpo (1895), 61 Minn. 274; 
 «3 N. W. K. 731. 
 
 iQoodman v. Siraonds (1857), 61 
 U. S. 861 ; Bank of Pittsburgh v. Neal 
 (1859), 68 U. S. 107; Whitmore v. 
 Nickerson (1878), 125 Mass. 496; Ellis 
 
 V. Wait (1898), 4 8. Dak. 454; 67 N. 
 W. R 231; Market v. Sargent (1893), 
 85 Me. 851; 27 Atl. R. 192. And see 
 Am. Cent. Dig. (ed. VII), pp. 134-147, 
 
 cited. 
 
 * See the subject fully treated of 
 in ch. XXVL 
 
EXECDTION OF DOCUMENTS. 
 
 443 
 
 acting as an agent, the general rule is tliat I must, at my peril, 
 inform myself as to the scope of his agency. I may, however,' 
 be misled by some act or omission of the principal; and it is 
 upon this ground that the principal is sometimes estopped. 
 
 For example, a broker is emj)loyed to buy and sell shares in 
 the market. In dealing with him I may be aware that he is 
 acting as an agent; but, in considering his authority, I am en- 
 titled to assume that he has those powers which a broker, so 
 acting, usually has.' Employment of a man in the line of 'his 
 business is usually accompanied by delegation to him of the 
 powers which he customarily exercises; and the principal is 
 «stopped by the appearance of usual authority from asserting 
 the existence of any unusual instructions which he may have 
 given but of which I have no notice. 
 
 Somewhat in the same way, custom may have attached to 
 the possession of a blank note a presumption that the holder 
 has power to fill it up for any amount he chooses. If so, the 
 signer would be estopped from asserting the existence of 'any 
 unknown limitation of that power. We cannot indeed say 
 that signing a blank note « thereby confers upon the person so 
 intrusted, in favor of hona fide holders for value, the right to 
 complete the contract at pleasure " (for the real fact may be 
 quite otherwise); we say merely that the signer is estopped, 
 by the appearance of power, from denying that it was con- 
 ferred. 
 
 Cu8tomai>y Effect of Blanks.— The cases are not quite unani- 
 mous as to the existence of such a custom.' They are, how- 
 ever, overwhelmingly in favor of it; and the law, whatever 
 one may think of it,» firmly establishes the inference of au- 
 
 1 Sutton V. Tatham (1889). 10 A. & 
 E 30; 8 L. J. Q, B. 210; Pickering v. 
 Busk (1812), 15 East, 45. 
 
 'See a strong judgment of Kin- 
 dersley, V. C, in Hatch v. Searls 
 (1854), 2 Sm. & G. 147; 23 L. J. Ch. 
 4«7. See also Awde v. Dixon (1851), 
 8 Ex. 869; 20 L. J. Ex. 295; Hogarth 
 V. Latham (1878), 47 L. J. Q. B. 339. 
 
 * Presumption proceeds upon prob- 
 ability. We presume that an event 
 happened because experience has 
 indicated its probability. We can 
 
 hardly say that we are entitled to 
 presume the existence of a fact 
 when we are reasonably sure that it 
 never occurred. In the present case 
 it is said that one ought to assume, 
 from the mere possession of a blank 
 note, that the holder of it has au- 
 thority to fill it up for " any amount " 
 however magnificent, or, as Mr. 
 Bigelow puts it, "at pleasure," In 
 Canada, at all events, where for- 
 tunes are somewhat limited, such 
 unbounded authority is of the very 
 
444 
 
 ©•TlNBinf B OWNERSHir AND AGENCY. 
 
 9 : 
 
 thorif- to fill up blanks' We have been speainng so for of 
 blanks 1 r amounts merely. The same rule applies to other 
 blanks (for date, f't«»ce of payment, and so on); and with better 
 reason, for presurai^tion proceeds upon probability, and it is 
 ranch more likely that absolute discretion was conferred as to 
 such features of the document than as to the amount of it.' 
 
 Estoppel the True Ground for Dechion.— Proceeding by 
 elimination it is quite clear that liability in such cases does not 
 proceed from the fact that the signer himself made the instru- 
 ment, or from the fact that any one having authority »■ <' . so 
 
 rarest occurrence. And In other 
 countries, apart from unusual famil- 
 iarity with the pleasures of unmeas- 
 ured wealth, it is certain that in the 
 very large majority of cases one 
 ought rather to anticipate that some 
 maximum amount had been agreed 
 upon than that it had not In busi- 
 ness affairs every one knows that 
 there is almost always some limit 
 axed. 
 
 No doubt the law, for ulterior 
 purposes, may arbitrarily detach 
 probability and presumption, and 
 may declare that a certain act shall 
 be taken as conclusive evidence of 
 some intention which is not com- 
 monly associated with it But un- 
 reasonable rules are bad ones. And 
 it is unfortunate if we are compelled 
 to say that although as a matter of 
 fact the maker of a blank note sel- 
 dom confers power uvon the holder 
 of it to fill it up for " any amount," 
 yet, as a matter of law, he always 
 does so. Fictions have no place in 
 fully-developed jurisprudence. 
 
 The cases, too, show the impos- 
 Ribility of getting it into everybody's 
 he?, i that when one really says to 
 f.T-ley, "I authorize you to fill up 
 this blank for $5," he technically 
 says to ti' world: "Trust Galley to 
 any amount; and I will be his se- 
 curity." And the frequent reap- 
 pearance in the courts of Galley's 
 surprised principals, amazed at the 
 magnificence of their intrusted con- 
 
 fidences, almost leads one fo wish 
 that legal presumptions had some- 
 times closer relations to the undis- 
 puted facta 
 
 One can easily see how the pre- 
 sumption arose, and was in its in- 
 ception reasonable. If upon a blank 
 note the maker should write "to 
 be filled up with any amount not 
 exceeding $1,000," it could fairly 
 enough bo held that he had given 
 authority up to that amount And 
 if under the provisions of some 
 stamp act he should affix duty sufii- 
 cient for a $1,000 note, the same 
 meaning might very well be taken 
 out of his action. And the law so 
 commenced. But it is irrational 
 from that to argue that if there be 
 no limitation upon the note the au- 
 thority is unlimited. For that is to 
 m&V'- ;. reasonable inference respon- 
 sible lov ■•nt: Known to l»e unrea- 
 soruble aud r 'tu-existent 
 
 xi;2 ^Aeh are however very puz- 
 zling. 45 & 46 Vic. (Imp.), ch. 61, 
 § 20; 53 Vic. (Can.), ch. 33, § 20. 
 
 2 Cason V. Grant (1895), 97 Ky. 487; 
 31 S. W. R. 40. But there would be 
 no presumption of authority to fill 
 in " with interest at six per cent" 
 Gettysburg Bank v. Chisholm (1895), 
 169 Pa. St 564; 33 Atl. B. 730; Farm- 
 ers' Bank v. Norrich (1896), 89 Tex. 
 
 Bank v. Webster (1899X 79 N. W. R. 
 1068 (Mich.). 
 
EXECUTION OF DOCUMENTS. 
 
 44ft 
 
 made it fc hira. Ejc hypnthesi these are not ine facts. How 
 
 then can he be liable? ixi one way only as the writer sees it 
 
 and that is by esto[ pel — by estopping liim from denying that 
 
 the contract is his. As against this, however, there' is much 
 
 authority. There is the opinion of Haron Pollock: ^ 
 
 "In such a case the acceptor J9 liable to a 6o«a /' (p holder. . . . and 
 the reason for this is not because the the acceptor gave authority for this 
 or that name to be inserted,— for in truth he gave no such authoritv.— 
 but because, in favor of commerce, it is essential to uphold the negotiabll- 
 ity of bills of exchange. That this is so mav be further illustrated by a 
 casein which a fraud is practiced upon the acceptor of a bill drawn in 
 blank with reference to the amount. . . . Here Is a clear abspnoe of 
 authority and a fraud against A. (by inserting £75 instead of £50), y he 
 18 liable for the reason we have given. . . . In the present case . 
 the ordinary rule as to authority cannot be adhered to, and aoinethinu like 
 a fiction must be resorted to in favor of a bona f le indorsee for value, or as 
 we should prefer to say, the law merchant iii ^uch a case holds that al- 
 though the acceptor did not authorize the d raver's name to be used he 
 enabled the jwrson to whom he gave the bill to «»» it, and so to give the bill 
 currency, and this as against the acceptor is sufficient to render him lia- 
 ble. . . . Estoppels are odious. . . . We shtmld prefernot to use the 
 toorr'. estoppel, which seems to implv that a pers. a bv his conduct is ex- 
 cluded from showing what are the true facta, bu rather to say that the 
 question is whether, when all the facts are admit d, the acceptor is not 
 liable upon the well-known principle that where 0( ' ofttco innocent per- 
 sons must suffer from the fraud of a third, the loss nhould be borne by him 
 who enabled the third person to commit the fraud." 2 
 
 With great respect for so learned a judge it must be said 
 that while he was condemning estoppels a> odious he was 
 really deciding the case upon principles peculi r to that branch 
 of the law. The learned judge said: "He enabled the person 
 to whom he gave the bill to use it and so to g ve the bill cur- 
 rency " — that is to say, the signer had, by his c nduct, induced, 
 or assisted in inducing, the holder to believe tt at the bill was 
 a genuine obligation, and the holder had acted upon that be- 
 lief. In other words, although the instrument as not a real 
 obligation the first holder of it had represente( to the trans- 
 feree that it was; the signer had assisted in this i isrepresenta- 
 tion — had given opportunity for it and made it credible; and 
 
 1 London v. Wentworth (1880), S 
 Ex. D. 104; 49 L. J. Ex. 657. 
 
 - See in the same sense Marston v. 
 Allen (1841), 8 M. & W. 504; 11 L. J. 
 Ex. 132; Foster v. McKinnon (1869), 
 L. R. 4 C. P. 712; 88 L. J. C. P. 310; 
 Swan V, N. B. A. Ca (1863), 3 H. & C. 
 IS,"?: .?2 li J, Kjf. 273. It was nrohahlv 
 to this principle that Lord Esher re- 
 ferred when he said (Baxendale v. 
 Bennett (1878), 3 Q. B. D. 535): •• When 
 
 a man has signed a blank accept- 
 ance and has issued t and author- 
 ized the holder to fill up, he is lia- 
 ble on the bill whatevt ^ the amount 
 may be, though he has given secret 
 instructions to the holaer as to the 
 amount for which he shall fill it up; 
 
 .«. -».~^ T;ff.evtt:it rtto Uycfct tO UCCCXfC 
 
 an innocent party and he is liable." 
 But the language is also referable to 
 estoppel 
 
446 
 
 OSTENSIBLE OWNEESHIP AND AGENCV. 
 
 was therefore estopped from denying the truth of the repre- 
 sentation.' To estoppel the learned judge prefers, as he says, 
 " the well-known principle that where one of two innocent per-' 
 sons," etc. But, with respect, that principle is either estoppel 
 or it is nothing, as will appear by reference to the chapter of 
 this work devoted to it.' 
 There is, also, against us the opinion of Mr. Bigelow : ' 
 " The rule that one who has left with another his signature to an incom- 
 
 Elete mercantile instrument or other contract — that is, with a blank to- 
 e filled in — is bound by the act of that person in completing the instru- 
 ment has been called an estoppel. Estoppel by conduct broadly this can- 
 not be, for the principal's conduct in trusting the agent is not, or majr not 
 be, in the other's change of position, or in immediate connection with it, a* 
 it must be for an estoppel.* Nor is there any false representation — the only 
 other kind of estoppel the case could fall under. On the contrary there is a 
 true representation, to wit, agency; and the oiily question is how far the 
 agency ought to extend. That is not estoppel, but agency pure and simple j 
 the agent has only exceeded his instructions." 
 
 But there may be misrepresentation as to the extent of agency 
 as well as to its existence.' If a man represents that he has- 
 authority to fill up a blank with £500, and his authority ex- 
 tends to £100 only, surely it is an undue stretch of charity 
 to say that " there is a true representation," and that the only 
 justifiable criticism is that "the agent has exceeded his in- 
 structions." Again, Mr. Bigelow takes it that the only repre- 
 sentation made is as to agency. But if the transferee knew 
 nothing of blanks, there is no representation of agency or ap- 
 pearance of agency. The tacit and real representation is that 
 the note was a completed instrument when signed. This i& 
 false, and it is because the maker has assisted in that misrep- 
 resentation that he is estopped by it and is liable to those who 
 have acted on the faith of it. 
 
 As against these authorities may be set the following from 
 
 Jervis, C. J.:* 
 
 "The rules applicable to the question of authority on this bill of ex- 
 change do not diflfer from those which ought to govern the question if ib 
 arose in the case between principal and agent In the case of a blank ac- 
 ceptance prima facie the person giving it gives the person to whom it is 
 given authority to fill it up for the amount and for the time limited by the 
 stamp laws. As between these two there may be secret stipulations bind- 
 ing upon them, but not binding as between the public and the person 
 
 ^For a discussion of the principle 
 here involved, see ante, oh. IVt 
 
 3 On Estoppel (5th ed.), 457. 
 ♦This position is believed to be 
 unsound. It is dealt with in oh. XVL 
 
 BSeech. XXVL 
 
 6 Montagu v. Perkins (1853), 23 L. J.. 
 G= P= 187= Sea also Brocklesby v. 
 Temperance (1895), A. C. 178; 64 L 3^ 
 Ch. 433; Merchants' Bank t. Good 
 (1800), 6 Man. 837, 347. 
 
EXECUTIOX OF DOCUMENTS. 
 
 447 
 
 and to UiidhispSmival? rJlJU* ^"''^u "* '"'"'^P^^'^^i to contract foi 
 And the following from Bowen, L. J • 
 
 That estoppel is the only ground upon which it can be held 
 that a principal is liable in « the ordinary case of an agent held 
 out to the public at large as competent to contract for and bind 
 bis principal" is urged in a later chapter." 
 
 Some direct support for the views here advocated is to bo 
 obtained too from a cautious note in Byles on Bills- » 
 
 tions of Williams, J., in Ex Darte Swan 7 P R liV a ^tf '^^ obseiva- 
 Channel, B.. in SwanV. N B.Tco:Sf lI J. Ex m'' ^^^ ^^^'^•"' ^•' '^°'* 
 
 In all fairness, however, it must be admitted that no verv 
 explicit reference to estoppel is to be found in the language of 
 either of the learned judges who are here cited in support of 
 the application of its doctrines. 
 
 Blanks in NegotiaUe Instruments Unknown to the Trans- 
 feree.-U Galley fills up the blanks before ofiFering the instru- 
 ment in transfer, then, as has been said, Lord Mansfield's die 
 turn ("Trust Galley," etc.) has no application; for the trans- 
 feree cannot allege that he believed that Galley had authority 
 to fil up the blanks. His position in such case is that he be- 
 lieved that the instrument was completed at the time of its exe- 
 cution ; that the signer is responsible for that belief (having 
 supplied Galley with a document which can easily be turned 
 to a fraudulent purpose); and that he is therefore estopped 
 from denying that it was so completed. Estoppel can have no 
 competitor in this case as the ground of decision. 
 
 Spaces as Distinguished from Manks.-Let distinction be 
 made between blanks purposely left in documents (sudh as for 
 amount, date, etc.) and spaces carelessly unfilled with pen 
 scratch, which are afterwards fraudulently filled up- for ex- 
 ample, a space left after the words "three hundred," to which 
 
 1 Garrard v. Lewis (1883), 10 Q. R JCIi. XXVI. 
 ^•^ »15thed.85i 
 
us 
 
 OSTENSIBLE OWNEESHIl* AND AGENCY. 
 
 is added "and fifty." These latter cases are dealt with in 
 chapter V. 
 
 Sigiied hut Otherwise Blank Slips of Paper.— The distinction 
 above drawn between cases in which instruments containing 
 blanks are (1) known, and (2) not known, by a transferee to 
 have been executed in incomplete form, becomes of greater 
 practical importance when the paper signed is otherwise al- 
 together blank. 
 
 Imperfeotion Known to Transferee. — If a person in posses- 
 sion of such a paper were to offer it in negotiation alleging 
 authority to fill it up as he pleased, the transferee would un- 
 doubtedly have to take the chance of the assertion being well 
 founded. There is no authority, so far as the present writer is 
 aware, which would afford him any comfort. If the sig! r^r had 
 affixed a revenue stamp the result would be otherwise,^ for the 
 signer has then indicated the existence of agency. 
 
 Imperfection Unknown.-r 'M.ore difficulty arises where the 
 slip has been completely filled before it is offered in negotia- 
 tion — where it has the appearance to the transferee of having 
 been issued in perfect form. Upon this point the cases are 
 far from satisfactory ; due probably to oversight of the law of 
 estoppel. For the question is not. Was there sufficient au- 
 thority to fill up the slip? nor yet. Was it the signer's i"hten- 
 tion that a note should be made of it; but Did the signer as- 
 sist the fraud in such manner as to estop him from alleging 
 defect upon either of these grounds?— has he exercised "an 
 appropriate measure of prudence to avoid causing harm" to 
 others.* Some of the cases are cited in the notes.' They are 
 not reducible to any principle. 
 
 To the present writer there is little difference between the 
 case of a paper partially blank and one altogether blank, 
 where the authority to fill up has been violated ; for in both 
 there are fraud and forgery, assisted by a signature intrusted 
 to a rascal. In both the person who has selected the swindler 
 and not the person cheated by him should lose.* 
 
 U5 & 40 Vic. (Imp.), oh. 61, § 20. 
 
 •i Ante, p. 90. 
 
 3 McDonald v. Muscatine (1869), 27 
 Iowa, 819; Abbott v. Rose (1878), 63 
 Me. 194; Breckenridge v. Lewis(1893), 
 
 84 Me. 849; 34 Atl. R. 864. See a val- 
 uable judgment of Denio, J., in Van 
 Duzer v. Ilowe (1S60), 2i N. Y. 531. 
 * See remarks, post, p. 463 S. 
 
EXECUTION OF D00DMENT8. 
 
 449 
 
 Iff 
 
 SUMMARY. 
 
 As to negotiable instruments we may then say • 
 
 son. «lh V" '°™^^''^ ^°''° ^^^y *'•« intrusted'to other per- 
 sons, either for custody merely or to be delivered upon the 
 
 theTtolld ' °.^"!i"^-«^' ^^« oWigors will be liable upon 
 them to holders in due course, although the authority of the 
 person intrusted is exceeded. auinoricy or tde 
 
 2. Obligors will also be liable in like cases, even if the instru- 
 ments have in them certain blanks, whethe'r the exste ce of 
 such b anks were or were not known to the transferees, 
 ture thl Kr^''' were altogether blank, save for the signa- 
 awl oMh ^?''' 7^".*^' ^''^^' '^ '^' '^'^-^^^rees were not 
 
 Tble if he t^^r'^'r '' ''^ ^^'"^ °^ "«°-^^^^^-. but no 
 xiabJe If the transferees knew of the defects 
 
 4. Estoppel is the true ground for decision in all such cases. 
 
 B. NON-NEGOTIABLB INSTRUMENTS. 
 
 r.mMt'Z^T oonsidering as a class, documents which are 
 orni H 7, "»<"'-"/8''fable,"we must asoerteia whether 
 or no deeds^ because of their sealed character, can be properly 
 
 uttnltl t'hT °' '"^ "'«- ^'- --"^ "' -P"' 
 
 And it is therefore sometimes held that if a deed be de- 
 P08 ed in escrow with instructions to deliver it upon a certain . 
 contingency, and it be otherwise delivered, and theVran?^ 
 
 ZZttT """^"^ •'"■^'"'"'' '"" '"» •5-" » "'Ctl^ 
 
 inco^'Iii"f " T'^^^'' '^'"'- ^"PP"'' *•■" "■« ^^ i» "ot only 
 
 .tt Zd '"'^P^T "* *"'*'' "P '"""'°' ^""'ority before 
 t.s handed to h,m. Can estoppel avail? In such a case Mar- 
 tm B., said there was no authority which shows tbat 
 
 « Henry v. Carson (1884), 96 Ind. 
 428. And see Everts v. Ai^noB na?it\ 
 4 Wia 856; 6 Wis. 445; Chipman v.' 
 Tucker (1875). 88 Wis. 43; Harkraeder 
 " 7i 66 Miss. 383; Allen 
 
 V. Ayer (1895), 26 Oreg. 589; 89 Paa 
 
 
 *See cases in preceding note. 
 ac> -North " 
 
 89 
 
 & N. 649; 81 L. J. Ex. 484 
 
 (1863), 7 a 
 
450 OSTENfllBLE OWNERSHIP AND AQENOy. 
 
 A like view was taken in the same case by Buries, J.;' and in 
 another case by WiUes, J.;* and although tlie point appears 
 not to have been pressed upon the appeal from the former of , 
 thesd cases,' yet it finds acceptance in a modified form in the 
 judgment given bv Cockburn, C. J.* 
 
 In Everest and Strode on Estoppel, too, it is said that 
 "the doctrine of estoppel by executing instruments in blank is confined ta 
 negotiable instruments; and does not apply to deeda » 
 
 At first sight the point seems to be somewhat formidable, ino 
 
 deed is incomplete; the signer does nothing further; no one 
 has authority to perfect it (and of this there can be no ques- 
 tion, for authority to complete a deed, it is said,' must itself be 
 by deed); how then can the document become operative? 
 Upon reflection, however, the difficulty disappears. For the 
 , problem as to deeds is not different from that involved m other 
 ' cases In both it is admitted that the instrument was incom- 
 plete when signed, and that it was completed without sufficient 
 authority. In both then, according to the facts, there is no 
 binding document. But it is of the essence of the principles of 
 estoppel that under various circumstances people may be pre- 
 cluded from setting up the facts; and a man may as well be 
 estopped from saying that a deed is not his deed as from say- 
 inff that a note is not his note. In a vigorous passage Wilde, 13.^ 
 protests against the limitation of estoppel to negotiable mstru- 
 
 ments: ^ . ,.- „„„t 
 
 "It is therefore, independent of negotiability; it operates »« a a^jfj^ent 
 
 become^negotiable by the demands of commerce.''^ 
 Mellor, J., was of the same opinion and put it thus tersely . 
 
 Estoppel operates ^ , ^ u 
 
 1 Id. ; 2 H. & C. 184: 83 L. J. Ex. 37& 
 
 « Re Swan (1859), 7 C. K N. S. 400; 
 30 Lu J. C. P. 113. 
 
 3 Swan V. North B. A. (1863), 3 H. 
 & C. 175; 82 L. J. Ex. 278. 
 
 *Id. 
 
 » Page 358i 
 
 8 This old doctrine Is losing some 
 of its aathority. Leonard v. Merritt 
 (1830), DrA 281; Bank of Montreal v. 
 
 Baker (1862). 9 Or. 97, 298; Martin v, 
 Hanning (1800), 26 U. C. Q. B. 80. 
 A more recent case proceeds upon 
 estoppel. Bank of Toronto v. Co- 
 bourg (1884), 7 Ont. 1. And see the 
 American cases as to bonds infra r 
 on'i "Wnshhiirn on Real Prop. (5th 
 ed.), vol. 3, p. 266, note. 
 
 7 Swan V. North B. A. (1862), 7 «. 
 & N. 634; 81 L. J. Ex. 428. 
 
EXEODTION OF DOCUMENTS. 451 
 
 the reTch oAr''- ^^^^ '""'^ ^^^^ *° ^^ P^^^^^ outside 
 
 Hn!„ .u P""°'P^^'°^««''^PP^»- "a deed or any other 
 document has m reality not been executed by a party to it but 
 
 wh TfT' '^^' '' ^^«' ^°^ i* appears so to have been 
 why should he not be estopped? If, fo'r example, a man S 
 and seals a document, and procures it to be at est^d in fh. 
 
 Z^ Tf ^^""^ "P' *"^ "P^'^ ^^^ f^^th of the documentTn its 
 
 toiet^;;r^^"^^°^^°^^"^^^^^^p^^^^^^^^ 
 
 enf Is'haTth?' '^' '"'^P'^"' *'"' ^^ ^^^« ^'^ ^-^^ at pres- 
 of e sole, T n^" ' ^f"' ^"^^ °°^ °"«^ ^»^*^ ^PPl'cation 
 o rsea, n T^. ^^fi^ld -as not much troubled because 
 or a seaJ, m Texira v. Evans; » and although he Avas overrulpd 
 
 dTd *?et'r f ^'^^ ^"''^^^^^^ ^° ^^'"P^^^- dermustTby 
 of !.;tho . ' "^"^ "'^^PP'^ wherewith to reply that lack 
 
 of authority is granted but is quite immaterial. 
 
 A very recent (1899) writer in the United States » adheres to 
 
 doirth ^'''^ "°''^''" documents continues. And no 
 
 doubt there are many cases which so say; but thev all over 
 look theestoppel point, which nevertheless'^i; by nomean w th! 
 out expos:tion and application in that country.e Tnd there 
 
 ^TlX:^i:'::^X:^^-^^ -^^ language Of 
 
 « If a party will leave a deed executed by him in the hands of another 
 
 ^,7/H ^ ^- * C. 177; 83 L. J. Ex. 
 "i74. See also per Erie, G J. 
 
 2 An attestation clause is evidence 
 of delivery. Evans v. Grey (1882). 
 L. R. Ir. 839. ' 
 
 IHiterl 1 4no4- (MO 
 
 <Hibblewhite v. McMorin (1S40), 6 
 
 m4«1 ,^ Ta ^"""^ '• Whitton 
 (1848), 1 H. L. C. 83A 
 
 •Randolph Qji Commercial Paper, 
 
 § 184. See a better opinion in Wash- 
 burn on R P. (5th ed.). vol. 8, p, 856 
 note. ' 
 
 « See State v. Pepper (1869). 81 Ind. 
 76; Smith v, Peoria (1871). 59 III dio. 
 Bartlett v. Hoard, id. 864. The case 
 of State V. Dean (1867), 40 Ma 484, 
 probably goes too far, for there was 
 no ground of estoppel in it. 
 
 estate V. Peck (1865),J53 Me. 284; 
 
:462 
 
 OSTEI^SIBLE OWNERSHIP AND AGENCY. 
 
 nerson and that deeS so left in his hands is made by him a security td a 
 third party, who acts honestly and fairly in the tranfa^^on I am by no 
 means satisfied that it is competent for the person who has left the deed 
 K hands to set up against the third party, who has honestly taken it . 
 Z security, the fact, if fact it be, of fraud havmg been committed upon 
 the person having it" 1 , . , • 
 
 Perhaps enough has now been said to warrant the inclusion 
 of deeds with other "non-negotiable" instruments in the re- 
 marks which have to be made concerning them. 
 ■ Completed Non-negotiable Instruments.— No distinction upon 
 principle can be made between negotiable and non-negotiable 
 instruments which have been intrusted to some person either 
 for custodj^ merely, or to be delivered upon the happening of 
 some contingency, when the decision of such cases is based 
 upon estoppel. No doubt if we were to admit considerations 
 of law merchant and negotiability (as to which see chapter 
 XXIV) ; or if we referred the point to the law of agency merely ; 
 or if we ran wreck upon the theory that authority to complete 
 a deed must itself be by deed, we might have to say that al- 
 though the makers of the deeds " themselves have created the 
 agency or trust by means of which the fraud . . . has been 
 committed," yet they are saved by the presence of a seal. But 
 the law of estoppel disregards all such points. It fixes atten- 
 tion upon the fact that the purchaser has changed his position 
 upon the faith of some misrepresentation of ownership; that 
 the person who "created the agency or trust" assisted the mis- 
 representation and made it credible; and declares that by rea- 
 s m of such assisted misrepresentation he ought to be estopped — 
 seal or no seal very immaterial. 
 
 458; and the Canadian case, Reg. v. 
 Chesley (1889), 16 S. C. Can. 308. 
 See as to a mortgage, Garland v. 
 Wells (1883), 15 Neb. 298; 18 N. W. R 
 132; Hollis v. Hairis (1892), 96 Ala. 
 288; 11 S. R 377; Lloyds v. Bullock 
 (1896), 2 Ch. 192; 65 L. J. Ch. 580. A 
 case of forced delivery, Gould v. 
 Wise (1893), 108 CaL 865; 82 Pac. R 
 676; 41 Pac. R 408. 
 
 1 Greenfield v. Edwards (1865), 2 
 DeG.,J.&S.696. And see per Wilde, 
 P^, in Swan v. North R A. (1862), 7 
 H. & N. 631; 81 L. J. Ex. 425; Ben- 
 terick v. London (1898), 8 Ch. 141; 62 
 L.J. Ch. 858. . 
 
 Smith V. Peoria (1871). 59 ill. 412; 
 McCormick v. Bay City (1874), 28 
 Mich. 457; Nash v. Frigate (1874). 24 
 Grat (Va.) 202; Hunt v. States (1876), 
 53 Ind. 321; State v. Potter (1876), 68 
 Mo. 212; Brown v. Probate (1880), 42 
 Mich. 501; 4 N. W. R 195; Lyttle v. 
 Cozard (1889), 21 W. Va. 183; Pala- 
 cios V. Brasher (1893), 18 Colo. 593; 84 
 Pa& R 251; Rose v. Douglas (1893), 
 62 Kan. 451; 84 Pac. R 1046; Dol- 
 beer v. Livingston (1898X 100 Cal. 
 
 017; JJO rac. a. oso; 
 
 
 Hill (1896), 100 Mich. 246; 67 N. W. 
 R 121; Stoner v. Keith (1896). 48 
 Neb. 279; 67 N. W. R 811; Hart v. 
 Mead (1897). 58 Neb. 158; 78 N. W. R 
 
EXECUTION OF DOCUMENTS, 
 
 453 
 
 re- 
 
 But of course wo will not apply this principle unless the as- 
 sistance referred to has been of effective quality, if a deed 
 from A. to B. has been delivered in escrow and been iraprop. 
 erly handed over, and B. afterwards sells the property to C 
 
 A. ought to he estopped because of the ostensible ownership of 
 
 B. But B. could not claim the same estoppel ; for he did not 
 act upon any representation of ownership— he did not think 
 ^at the custodian of the deed was the owner of the property 
 He knew that he was an agent merely; and as to the extent of 
 authority, inquiry ought to have been made -as in other cases. 
 
 Blanks tn Non-negotiaUe Instruments.— Let it be remem- 
 bered that with reference to bills and notes we found two prin- 
 ciples of estoppel in operation : 
 
 1. Where an agent exceeds his authority the principal may 
 be estopped from denying the existence of the assumed author- 
 ity, if he has enabled the agent to mislead the person with 
 whom he dealt. That principle was applied in this way: In. 
 trusting a person with a blank note is evidence of such person's 
 authority to fill it up as he pleases; therefore the signer of a 
 blank note is estopped from denying the existence of such au- 
 thority as against any one who dealt upon the faith of the 
 appearance of authority. 
 
 2. If the blanks have been filled up prior to delivery of the 
 document then also the signer is estopped, not because of os- 
 tensible agency (for nothing in this case is known of agency) 
 but because of the appearance of an originally completed docu- 
 ment, for which appearance the signer is, by his assistance ren- 
 dered to the fraud, responsible. 
 
 Now observe that there is nothing in these two principles 
 which suggests their limitation to cases of bills and notes; and 
 that there can be no reason why persons who have been misled 
 by other documents in similar ways should not have the like 
 benefit of the law of estoppel.' 
 
 Blanks Knoion to the Trnnsferee.— -Por example, it has been 
 quite customary to execute transfers of shares leaving the name 
 of the transferee blank; and the hiatus is filled up only when 
 some one of the successive owners desires to register the trans- 
 fer. Of such instruments Lord Mansfield would no doubt have 
 
 n' ^^^tj' I' ^* 5"*r^ <'®^''^' ®^ ^''°'^" (^^»*)' «» »f^- APP. 431 : Jewel 
 U. 8. 889; New England, etc. v. v. Rock River (1881), 101 111. 57. 
 
454 
 
 OSTENSIBLE OWNEESHIP AND AOENOT. 
 
 said that their plain import was "Galley or any subsequent 
 holder may fill up as he pleases," and some of the more mod- 
 em judges would have agreed with him. In one case Chitty, J., 
 
 go 1/1 * 
 
 " Hftvine reeard to the practice proved, and the condition in which these 
 docum*en?8^"f when they^ass frL hand to hand, the «gh .p^^'P « *^ 
 ftdoDt with reference to them is to hold that where . . • *"«."*"°,?" 
 SduTvsiKned by the registered holders of the share^ each prior holder 
 confe?8UwntheXnaVcte holder for value of the certificates/or the tune 
 STanCthority to fillinthe name of the transferee and ^i' estopped 
 frZdenSmcn authority; find to thi^ extent f^^^^^ 
 not further, is estopped from denying the title of such holder for the time 
 bv'ing."! 
 
 It will be observed that everything depends upon custom. 
 No one would suggest, with reference to a conveyance of land, 
 that the existence of blanks in it indicated authority to till 
 them up.» Custom has, however, attached that interpretation 
 to a blank for the name of the transferee in share transfers;' 
 such blanks, therefore, constitute a representation by the signer 
 of them that the holder has authority to fill up, and by such 
 representation the signer is estopped as against a purchaser for 
 value without notice. 
 Lord Herschell recently said : ♦ 
 
 ••And this doctrine has been held, by t^e court of appeals of the sta^^^^^ 
 New York .» to be applicable in the case of certificates of shares with the 
 blank transfer andpower of attorney signed by the registered owner, 
 handed bv him to a broker who fraudulently or in excess of his authority 
 sens or pfedgS them. The banks or other persons taking them for value 
 wthout notice have been entitled to hold them as ^sainst the owner. A^ 
 at present advised, I do not see any difference between the state of New 
 York and the law of England in this respect. 
 
 No assumption of unlimited authority to fill up would prob- 
 ably arise in case of blanks left for the description of the shares 
 
 a universal, practice on the Stock 
 Exchange, between the brokers and 
 jobbers or dealers in shares, for the 
 broker or dealer who sells, to deliver 
 the deed of transfer of the shares to 
 the dealer who purchases in blank 
 
 1 Colonial Bank v.Hepworth (1887), 
 86 Ch. D. 53; 58 L. J. Ch. 1089. There 
 is some confusion here. If by hand- 
 ing over blank transfers "each prior 
 holder confers . . . an authority 
 to fill in the name of the transferee. 
 
 there 1. no pUc. or ground for a. - '?«';?»•"« °'*»™™'":^ 
 
 toppel. It is because such authority 
 is not always so conferred, but be- 
 cause it appears to have been con- 
 ferred, that estoppel arisea 
 2 Ellis V. Wait (1893), 4 S. D. 454; 
 
 5K «» »wp »% r\^\f\ 
 
 »In Taylor v. Great Indian, etc. 
 Co. (1859, 4 De G. & J. 571; 28 L. J. 
 Ch. 709), Turner, L. J., said: "It ap- 
 pears that it is a common, perhaps 
 
 leaving the name to be filled in when 
 the dealer who purchases may him- 
 self find a purchaser for the shares." 
 
 * Colonial Bank v. Cady (1890), 15 
 App. Cas. 285; 60 L. J. Ch. 131. 
 
 » As to the New York law. see Mo- 
 Neil V. Tenth National Bank (1871), 
 46 N. Y. 325. See also the cases cited 
 with this one in ch. XXIL 
 
BXECDTIOJT OF DOCUMENTS. 
 
 455 
 
 to bo transferred. A purchaser from a holder of sucji a trans- 
 fer would not be justified by custom in believing that the signer 
 had given authority to fill up any class and any amounfoJ 
 shares. In such case the purchaser would be in the usual posi. 
 tion of one dealing with a person known to be acting as an 
 agent; he would have to inquire as to Lis authority, and no 
 answer to such mquiry would be found in the form of the doc- 
 mnent, ^s in the case by custom where the transferee's name 
 merely is omitted. 
 
 If, however, transfers blank as to the description of the 
 shares were filled up before negotiation, and the transferee 
 had no reason to suspect that the document was incomplete 
 when executed, then the signer ought to be estopped from de- 
 nying the validity of the document, upon the principle laid 
 <Jown by Kindersley. V. C, in Hatch v. Searles} 
 
 General AppUcahility of Edoppel.-li will now be seen that 
 there IS thus far no dilference in principle between bills and 
 notes and other documents with reference to blanks in them 
 Avhen signed. The question always is. What, according to cus- 
 tom do such blanks import? If they indicate the existence of 
 authority to fill up, then there is estoppel. If they do not so 
 indicate, there is none. Custom established the law as to bills 
 and notes. It can do the same for other documents- 
 
 our acting upon the princiDle ftofi!i .^t^>^f, if ' **** JS^there to prevent 
 lowed in the p?ecedent?"heyTave eft to^us? ^Wh' V^^.fl^'^l^orB, and fol- 
 new usage which has sprune ud undlr aiLL -^^ '^ \* ^° ^ ^^^ *hat a 
 admissible than the Llgeofnastt^mP^?wf^^ circumstances is to be less 
 
 to the admission andTdfptloHf'u ^g'e n ^^^S'^AH^tt °°^ ^^"* 
 character, as thoueh the law JiaH hZ « fl^„ii J } a"?gether cognate 
 «ome positive andfeilm^y tna^tment ? ' / '''''°'yi>^^ »«d settled by 
 
 Not merely transfers of shares, then, but bills of lading 
 warehouse and cotton-press receipts, and other like symbols of 
 property are all subject to the same principle.' The question 
 as to all documents is the same. 
 
 BlanJcs Unknown to the Transferee. - A^ has already been 
 pointed out,* where the existence of blanks is unknown 'to the 
 transferee, the ground of estoppel is not, and cannot be, the 
 
 »Colebrook8 on Collateral Secu- 
 rities, 34 And see the cases there 
 cited. 
 
 » (1854) 2 Sm. & G. 147; 23 L. J. Ch. 
 467, And see Reg. v. Chesle/ (1§89). 
 16 S. C. Can. 30(1 
 
 2 Per Cockburn, C. J., in Goodwin 
 T. Robarts (1875), L. R 10 Ex. 851; 44 
 I* J. Ex. 157. 
 
 <See cases ante, p. 451, note 7. 
 
456 
 
 OSTENSIBLE OWNERSHIP AND AOENOY. 
 
 presumption of authority to fill up the blanks, but the justifi- 
 able assumption that the document was complete when exe- 
 cuted. It is obvious that the reason for estoppel in such cases , 
 applies equally to negotiable and non-negotiable iastruments; 
 although, no doubt, it is more frequently invoked in the former 
 than in the latter class of documents. Blanks in a bond, there- 
 fore, left by the sureties and filled up without authority will 
 not constitute a defense as against an obligee who has had no 
 notice of them. 
 
 And where a deed, blank as to consideration and name of 
 grantee, but signed and sealed and indorsed by the proper offi- 
 cer, with a certificate of execution, was delivpi ad to an agent 
 for use in case he found a purchaser; and the agent filled in hia 
 own name and a pretended consideration, and sold the land as 
 his own to an innocent purchaser, it was held that the grantor 
 was estopped.' 
 
 II. Documents Stolen ob Found. 
 
 A. negotiable lJ;;;fRUMENTS. 
 
 Present Uncertainty.— It is curious that there should be 
 doubt as to the liability of the maker of a note who loses it, or 
 from whom it is stolen. A well-known writer, in a recent work 
 as to stolen instruments, says: 
 
 "Thus it is laid down that where a negotiable instrument is stolen or 
 fraudulently taken from the acceptor or maker, such party cannot be re- 
 Sc?to pay it to any holder whatever; and that. too. though the acceptor 
 or maker may have made the theft or fraud easy by putting the pai»r i» 
 an unlocked drawer in a desk to which clerks and servants and others had 
 access." ^ . 
 
 In the case of a lost note, on the other hand, there might, in 
 
 view of the same writer, be liability: 
 
 "If this be sound doctrine, it will follow that where the instrument got 
 
 into circulation by being dropped, picked up 5"^ p^&sed^ th^ere^lm^s Jjeett 
 
 ry, unless the dr 
 
 strument tran 
 gence." ^ 
 
 no delivery, unless the dropping was negligent; possibly to drop a nego- 
 Sble instrument transferable t»y delivery would be presumptive negh- 
 
 The learned author deprecates the introduction of the princi- 
 ples of estoppel intb the discussion of the case of a stolen note> 
 because " theft is not the natural consequence of negligence " 
 in the method of its custody. May it not, however, similarly 
 
 1 ... .1 -D _ t^.^„A «/%tf> thi* tho -frpnrlnlAut. nRRsinflf 
 
 be said m me cust; ui a luuuu noit i-utiv n.^ ..«5- '- , s 
 
 I Pence v. Arbuckle (1876), 22 Mion. 
 417. And see cases as to mortgages, 
 ante, p. 453, note. 
 
 •i Bigelow on Bills and Notes, 177. 
 »Id. 
 
EXECUTION OF DOCUMKNTS. 
 
 457 
 
 . '» 
 
 of it is not the natural consequence of the maker losing it? 
 Yet in such case the author thinks that there may be liabil- 
 ity and estoppel. If in both cases there is the criminal appro- 
 priation of another person's property, and in both an inno- 
 cent purchaser for value, ought not the result in both to be 
 the same? 
 
 Baxendale v. Bennett. — In the well-known case of Baxendah 
 V. Bennett^ a blank acceptance was returned before issued to 
 the acceptor, who put it in a drawer from which it was stolen. 
 It was held that the acceptor was not liable. Bramwell, L. J., 
 said: 
 
 "la it not a rule that every one has a right to suppose that a orime will 
 not be committed and to sot on that belief ? ... If suppose there was 
 no stamp law. and a man simply wrote his name, and the paper was stolen 
 from him, and somebody put a form of check or bill to the signature, 
 would the signer be liable ? " 
 
 Referring to Young v. Orote and Ingham, v. Primroaey he 
 
 said that they 
 
 "go a long way to justify the judgment; but in all those cases, and in all 
 the others when the alleged maker or acceptor has been held liable, he has 
 voluntarily parted with the instrument; it has not been got from him by 
 the commission of a crime. This undoubtedly is a distinction, and a real 
 distinction." 
 
 Brett, L. J., put the case upon this ground; 
 
 "Whether the acceptor of a blank bill is liable on it depends upon his 
 having issued the acceptance intending it to be used." 2 
 
 A Crucial Question. — Lord Justice Bram well's question is a 
 crucial one; and if, as- he assumes, there is but one possible 
 answer to it, much difficulty will arise in drawing an intelli- 
 gible line between cases in which there is liability and those in 
 which there is none. 
 
 The point is simply this: A man has a habit of writing Ins 
 name upon blank forms of promissory notes, and leaving them 
 carelessly within reach of every one; somebody fills in the 
 blanks in one of the papers, and passes it to a lona fide holder 
 for value; is the signer liable? Or (to bring the case more 
 clearly within the Lord Justice's language), suppose that the 
 note was put " in an unlocked drawer in a desk to which clerks 
 
 J (1878) 3 Q. R D. 525; 47 L. J. Q. B. 
 634. 
 
 2 This distinction has found favor 
 in New York. Ledwick v. McKim 
 (1873), 58 N. y. 307; Davis v. Best 
 (1887). 105 N. Y. 67. It had been 
 
 otherwise held in Oould v. Legee 
 (1856), 5 Duer, 870; differing from 
 the earlier case of Hall v= Wilson 
 (1853), 16 Barb. 555. See also Schuyl- 
 kill V. Copley (1871), 67 Pa. St. 386; 
 Kagel V. Totten (1882), 59 Md. 447. 
 
4!S8 
 
 OSTENSIBLE OWNERSHIP AND AOEFOY. 
 
 and servants and others had access," from whence it was stolen 
 and made into a note; would the signer be liable? 
 
 Complete and Incomplete Instruments.— To these fundamental 
 questions the answer of the authorities is in the negative.' But 
 as soon as one gets away from the simplest form of the ques- 
 tion the cases commence to vary, and the lack of principle of 
 decision becomes apparent. For example, Mr. Daniel distin- 
 guishes between complete and incomplete instruments. As to 
 the former he says : 
 
 <» 1' ^J"""5 *\'® '""'*?'■ *"*" Pef'ected the instrument and left H undelivered 
 m A safe, desk, or other receptacle, it should then be at his hazard. Such 
 H^JLZ^ ♦K®'".'*'^,® '°^"f® and not for preservation. The maker creates the 
 lu.^J u' ^^*"* elo gned by keeping them on hand, and places them on 
 the same base as negotiable papers which have been put upon tlie market. 
 When once issued the purchaser is protected and the owner loses, even 
 though he had guarded fiis property with bolt and bar; and if bankers and 
 others who reiust necessarily be in possession of negotiable securities in the 
 course of trade are not protected, we can discover no principle which can 
 be invoked to protect one who holds his ojvn paper contrary to the ordi- 
 nary wants and usages of trade." » 
 
 As to incomplete instruments, on the other hand, the same 
 author says: 
 
 K J!?*?® ^^A°^i '']*f* °' °.^f^^ *'"^^^' ^''®'» a" incomplete instrument has 
 b?en signed and stolen, without any delivery to an agent in trust or other- 
 
 M«^Ll.f "®°l°.^' ^u '"°^ °*/^^ °<* *'■"''' for any purpose has been created. 
 No instrument has been perfected. No appearance of validity has been 
 given it No negligence can be imputed. Therefore if the blank be filled 
 It 19 sheer forgery, in which the maker is in no wise involved, and he is 
 not therefore bound, even to a bona fide holder without notice."' 
 
 Lord Justice Bramwell, as we have seen, would not have ad- 
 mitted the validity of Mr. Daniel's distinction between the 
 theft of a complete and an incomplete instrument. His prin- 
 ciple: 
 
 '^It li°°* * ''"A® t*"** fY^y °"® ^*^ * "«^' *o suppose that a crime will 
 not be committed, and to act on that belief ? " ' *^ '" 
 
 applies to both cases alike. Lord Justice Brett would also re- 
 pudiate the distinction, basing his opinion, however, not upon 
 the ground of crime, but because liability depends upon issuing 
 
 J To the cases already cited add 
 First Nat Bank v. Zeims (1894), 93 
 ■Iowa, 140; 61 N. W. R. 488; Byleson 
 Bills (16th ed.), 853. See, however, 
 Cooke V. United States (1875), 91 U. 
 S. 889. Treasury notes were fraud- 
 ulently printed from the genuine 
 plates and the treasury was held to 
 be liable upon them. Nd signature 
 was necessary. Distinguish Colum- 
 
 bia V. Cornell (1888), 130 U. S. 655, 
 where the word "canceled," writ- 
 ten in ink upon negotiable certifi- 
 cates, was erased, and the certificates 
 passed. 
 
 2 On Negotiable Instruments (4th 
 ed.), vol. 1, p. 85a. 
 
 « Id. 853. The same distinction is 
 made in Parsons on Bills and N^t^s, 
 vol 1, 114 
 
EXECUTION OF DOCUMENT. 
 
 «n instrument "intfinHin™ u * • 
 
 ritls we think -etflpHi u "^'''"'"«"<^-' 
 
 ti-y; and, in order tha^^T"^ P*""*"^ ^he nieroantUe p,.1 rin**''"'^."*^'''*^^ 
 cent holders for i„i " f*"^ ""ay "ot b© imoerfiH u pu^rency of tlie coun- 
 aK«in8? those ^'^J^bv^f'^ould »?«^ve a Hght'^to en -Vt'^"'"'^" *»'«' '""^ 
 currency." i'« '^^^ ''^ making them hHve^au8V?he.7to''brrpart"oVsu7 
 And Cockburn C T m u ' ' 
 
 there would be lUiHt; Z'o ^hetTfar- '7 ''°"^^^ ^^^^ 
 been completed prior to its be n ' ^ instrument had not 
 
 Wcitson V. Hujp he said. ^ ^^^^^^'^^^ly applied, for in 
 "I consider the law t k^ 
 
 hands of aio he*r pSn ''iV'?""^^^' ""^ ^^ows lJc"h^aner 1°"'? ^^^ ^' 
 ation and withmif., *' ^ho transfers the samflV^ 0^^^^*^ *^8^' '"tothe 
 however fraudulpn^ «"V?' «."^h party is liabl^ to ^n'^K^l" ^°'' consider! 
 ">ay havett-'"' ""' '^'°'''«'" «*» ''^'"^t Sm the trSfex'M^^ '''^^^."• 
 
 lord Justice Brar,fr^:7,',V' "' *°^^' ^ '''^^-^^-- 
 upon the supposition that a chL: 1 1 ^ b" ™'" "'^^^ ^^^ 
 ample contradiction not only aHo on " ^^'"'"itted finds 
 
 overwhelming matter of fact) bu u^h '''''" '''^^'''^' (^' ^n 
 of others in various departmeits o T^''"" '° ^^^ '°'«^««ts 
 
 tortsmanyexamplesare rt;th and'thr, '%''^ "^^"^ «^ 
 misrepresentation is 1-irrr^lv / , f ^® ^^^^ ^^ estoppel bv 
 
 ,Not, bowovo, to ,::,? 'i r.-.t'o^n '"v---' ™-' 
 
 >ow«,g ma^ be taken to be u„d "„'te1 W.""" "°'^^' "=« ""- 
 
 FAnd It can hardlp be aro'uafl th., it .u . 
 
 mer may be .ad^ liableXl 'e v i t b"^°" °' » ^"P »' 
 
 y rorgery, it is beyond the bounds 
 
 i:n^^^.':^ An^ see Mc 
 
 49a; " " ^'^'■"^' '^ ^' c. Q. a 
 
 »Per Byles. J., in Swan v. North 
 
 Bm.sh(1863).2H.&c.l8aTsSa 
 report in Sa I, j. e^ 3..^^ ^^^^ *he 
 
460 
 
 OSTBNSIBUB 0WNEH8HIP AND AGKNOY. 
 
 of reason to hold that the signer of a completed note may b0 
 made liable by larceny. 
 
 The distinction of Lord Justice Brett: 
 
 "Whether the acceptor of a blank bill is liable on it depends upon his^ 
 having issued the acceptance intending it to be used, 
 must, of course, be subject to this: that the acceptor ma^ be 
 estopped from denying the issue of the bill, and his intentions 
 with regard to it, by appearances for which he is responsible. 
 And the argument comes back once more to the question of 
 "the duty of fellow-citizens to observe in varying circumstances an ap- 
 propriate measure of prudence to avoid causmg harm to others ^— 
 the duty, in this case, of preventing the appearance of a note 
 issued and intended to be used. May it not be said that 
 "It is the duty of the maker of the note to guard not only himself, but the 
 pubic, against fraud and alteration by refusing to sign negotiable paper 
 made in such form as to admit of fraudulent practice upon them with 
 ease and without ready detection."* 
 
 Egoistie and Altruistic Views.— A& has already been said, 
 there are two views which may be taken with reference to the 
 conduct of atf airs — the egoistic and the altruistic. According 
 to the former, as applied to the subject in hand, I may sign my 
 name to as many pieces of paper as I wish, scattering them 
 broadcast among my neighbors, leaving other people to take 
 the risk of forgery; I may amuse myself by signing dozens of 
 completed notes and carelessly permit "clerks and servants 
 and others" to remove them if they please, aware that not I, 
 but other people, must suffer for my alleged faith in universal 
 honesty ; I may, with easy indifference, leave spaces of the 
 most tempting character in notes which I sign and issue, and 
 if they be improperly filled and my seeming liability increased, 
 I may say that I acted upon the assumption that there was no 
 one in the world that would do such a thing, and that there 
 are places to which, with certain difficulties of procedure, such 
 an one mav be sent. 
 
 According to the altruistic view, I shall have some care for 
 the interests of my fellow-citizens. Being perfectly aware th«^ 
 the world is full of rascals, and that my pretense of other be- 
 lief is absurd, I shall not furnish them, if I can avoid it, with 
 tempting opportunities for defrauding others. As I would not 
 
 iT>^i;f.^,^ ^n Tcr''« %% BeA antS: 
 oh. V, paasim. 
 
 2 Zimmerman v. Rote (1874), 75 Pa. 
 8t 191. And see Brown v. Reed 
 
 (1876), 79 Pa. St. 870. See cases re- 
 ferred to with these in oh. V. 
 s See ch. V. 
 
B^JEOUTION OF D00PMENT8. 
 
 461 
 
 note 
 
 indulge myself in signing slips of paper were the risk of notes 
 being written on them my own, so, also, shall I exercise proper 
 circumspection where there is danger to others. And as notes 
 are made for use and not for storage, I shall refrain from sign- 
 ing them until they are needed, or at least so draw them that 
 they may not be immediately negotiable. I would do that 
 were the risk my own.' 
 
 Ostensible Ownership. — Liability in all such cases must rest 
 upon the principles of estoppel by ostensible ownership. A 
 thief appears to be the owner of the instrument which he pro- 
 poses to negotiate. Possession of a watch does not indicate 
 ownership;* but the property and possession of bills and notes 
 are inseparable. 
 
 X,- "^y.^^y. ^^o'^^er of *he bills takes the property, and his title is stamped in 
 the bills themselves." 3 
 
 Possession of a bill is ostensible ownership of it. If the 
 real owner assists in the misrepresentation of property by an 
 ostensible owner, such real owner ought to be estopped from 
 setting up his own title. And it is hard to see how such as- 
 sistance can more eJBfectually be afforded than by bringing into 
 existence that which from its very nature carries with it a rep- 
 resentation of ownership. Did I write upon my goods, " The 
 bearer is the owner of these," I would certainly be estopped 
 from setting up my title to them, even though some one tempted 
 by the writing had stolen them from me and passed them on. 
 I would have assisted in his misrepresentation. And if I ore- 
 ate a document which carries with it to everybody a similar 
 assertion, I ought likewise to be estopped.* 
 
 Incomplete Instrvments. — These remarks have primary ref- 
 erence to cases of completed instruments which have been stolen 
 
 'This precaution would insure 
 safety, for it would be unreasonable 
 to hold that a thief ooald effect a 
 transfer by forging my signature. 
 First Nat Bank v. Bremer (1893), 7 
 Ind. App, 685; 84 N. E. R 1017. See, 
 however, Wegner v. Second Ward 
 (1890X 44 N. W. R 1096; Tobin v. 
 Manhattan (1893), 57 N. Y. St R 866; 
 
 A Mian \> 1in. OA M 17 C.__ *i. cm 
 
 id. 1124. And see Leather v. Morgan 
 (1887), 117 U. a 96; Walters v. Tlelk- 
 meyer (1897), 70 Ma App. 871. 
 
 'Qabarron v. Kreeft (1875), L. R 
 10 Ex. 281 ; 44 L. J. Ex. 238. See ch. 
 XXI. 
 
 'Collins V. Martin (1797), 1 Bos. & 
 P. 851. 
 
 ♦Some authorities are, however, 
 otherwise. Ledwick v. McKim (1878), 
 63 N. Y. 307; Hinckley v. Bank (1881), 
 181 Mass. 147; Bangor t. Robinson 
 \ic!3«;, U5 xcu. «. osu; xoung v. 
 Brewster (1895), 63 Ma App. 62a 
 
468 
 
 OSTENSIBLE OWNERSHIP AND AGENOV. 
 
 or found and subsequently passed on. Let us now look at Mr. 
 Daniel's reasons for a contrary conclusion in the case of in- 
 complete instruments — those in which blanks have been left- 
 He mentions five: 
 
 1. "No trust for any purpose has been created." But there 
 was no trust either in the case of the completed instrument. 
 
 2. " No instrument has been perfected." Nor in the other 
 case either; for delivery is necessary to a perfected note.* 
 
 3. " No appearance of validity has been given it." As the 
 authorities stand, the holder of a blank note has the appear- 
 ance of authority to fill it up. A blank note is then just as 
 available in the hands of a thief as is a completed one. There 
 is therefore in both cases the same appearance of validity. 
 
 4. " No negligence can be imputed." But there is exactly 
 the same negligence in the one case as in the other. 
 
 6. « If the blank be filled it is sheer forgery, in which the 
 maker is in no wise involved." And in the case of the com- 
 pleted note there is sheer iarceny, " in which the maker is in 
 no wise involved;" and also the wrongful emission of the doc- 
 ument which may well be argued to be a further criminal act. 
 
 It is difficult then to see any ground for distinction between 
 a complete and an incomplete note. They are equally nego- 
 tiable, and over both the maker ought to exercise the same 
 vigilance and control. 
 
 Among the authorities relating to instruments fraudulently 
 appropriated the much-discussed case of Ingham v. Primrose * 
 may be noticed. A drawer of a bill returned it to the accom- 
 modation acceptor unused. The acceptor, intending to cancel 
 it, tore it into two pieces and threw them on the ground. The 
 drawer picked them up, pasted them together, and passed the 
 bill. The appearance would not have suggested anything but 
 a severance for more secure transmission. The acceptor was 
 
 held to be liable 
 
 "because the defendant, by abstaining from an effectual OTncellation or 
 destruction of the bill, has led to the plaintiflfs becoming the holder of it 
 Cor value." 
 
 In other words, he has provided an opportunity or occasion 
 for fraud —has by his negligence made credible the misrepre- 
 
 l See the Oodes, 45 & 46 Via (ImptX « (1859) 7 C. R N. S. 83; 88 I* J. a 
 ch. 61, § 81; 68 Via (Can.), oh. 88, P. 894. 
 §81. 
 
EXECUTION OF DOCUMENTS. 
 
 463 
 
 sentation of the drawer that the paper was a real obJigation. 
 He is therefore estopped from denying that it is such. • 
 
 Although the case has been seriously questioned in Baxm- 
 dale V. BenneU}- the writer ventures the opinion that it is well 
 founded, and ample justification for it can be found in the 
 principles of the law of estoppel. There seems to be little 
 reason for holding an acceptor liable upon a really uncanceled 
 bill confided to another person who fraudulently negotiates it, 
 if he is not to be liable upon one which is in appearance at 
 least uncanceled, and which he throws down in the presence 
 of the person to whom a moment before it had been confided. 
 There is a difference in the acceptor's intention, no doubt; but 
 none in the facility afforded for fraud, and none in the posi- 
 tion of the transferee. 
 
 Signed Slips.— It distinction between a completed and a 
 blank note may be denied (upon the ground that the latter 
 carries with it ostensible authority to fill it up), the same argu- 
 ment will not apply when comparing the case of a completed 
 note with that of a mere slip of paper bearing a signature, for 
 there is not in that case any appearance of authority to sub- 
 scribe a note. If, indeed, a stamp required by the local law 
 had been alfixed by the signer, the case would be different and 
 within the statutory law as to Wank notes.* But if the slip be 
 entirely blank it cannot be said that there is ostensible au- 
 thority to write on it a bill or note; and if there be no osten- 
 sible authority there can be no estoppel by appearance of 
 agency. 
 
 This remark, however, is necessarily limited to cases in which 
 the transferee knew that the superscription had been added 
 by some one other than the signer.' If the instrument be in 
 complete form when offered in negotiation, then its appear- 
 ance indicates that the body of it was written prior to the sig- 
 nature; and the case is not at all one of ostensible authority 
 to fill up blanks. In such a case, if the signer is to be liable, 
 it is upon the ground already indicated, namely, 
 
 nr-Il^io"**/ °^ fellow-citizens to observe, in varying circumstances, an ap- 
 propnate measure of prudence to avoid causing harm to others." * 
 
 i (1878) Q. a D. 582; 47 I* J. Q. « See the same distinction noticed, 
 ^ "**• ante, ip. 455. 
 
 *Po«f, pp. 464, 465. And see the *Seean<^p.8a 
 Codes, 45 «fc 4« Vic. (Imp.), oh. 61, 
 i; 20; 68 Via (Can.), ch. 83, § 20i 
 
 ^1 
 
464 
 
 OSTENSIBLE OWNERSHIP AKD AOBNOY. 
 
 Can it be said that there is an appropriate, or indeed any, 
 measure of prudence in spreading broadcast your autograph 
 upon slips of paper suggestive of promissory notes, and in 
 blindly trusting to the impeccability of the world? 
 
 Distinction is made between completed or blank instruments 
 on the one band, and mere autographs on the other, by Beck, 
 
 J.,^ as follows: 
 
 "The reason is obvious. The maker ought to suffer on account of the 
 fraudulent act of one to whom he intrusts his paper or who is made agent 
 n respect of it, rather than an innocent party. The 1*^ esteems him in 
 fault in thus putting it in the power of another to perpetrate the fraud, 
 and requires liim to bear the loss consequent upon this negligence. In the 
 ?ase under consideration, no fault can be imputed to the defendant He 
 did not intrust his signature to the possession of the forger for the pur- 
 Dose of binding himsllf by a contract He conferred no power upon the 
 Sartv who coSm tted the^ crime to use it for any such purpose, fee was 
 SJtguTltyof iTegligence in thus giving it, for it is not "nusual. in order 
 ?o identify signatures and for other purposes, for men thus to make their 
 autographs." o H/T •*• 
 
 But do not the same remarks apply to both oases i May it 
 not be said in both cases that " he did not intrust his signature 
 ... for the purpose of> binding himself by a contract;" 
 that "he conferred no power upon the party who committed 
 the crime to use it for any such purpose;" and that «he was 
 not guiltv of negligence, . . . for it is not unusual . . . 
 for men thus " either to intrust their bills for custody or to give 
 their signatures for identification. And may it not be added, 
 too, that " the maker (signer) ought to suflfer on account of the 
 fraudulent act of one to whom he intrusts his paper . . . 
 rather than an innocent party," etc.,— for there is not much dif- 
 ference between "intrusting" your clerk with papers partially 
 blank which you tell him to put in the safe and which he mis- 
 appropriates, and "trusting" that he will not appropriate and 
 use other papers wholly blank (with the exception of your ac- 
 commodating signature) which you put in his way. In both 
 cases trust is betrayed; in both crime is committed; in both an 
 innocent purchaser has paid out his money; and in both you 
 have supplied the opportunity for the fraud. Should you not 
 be more careful for the interests of others? What is "an ap- 
 propriate measure of prudence?" 
 The English Code provides:' 
 " When a simple signature on a blank stamped paper is delivered by the 
 
 1 Caulkin* v. Whisler, 87 Iowa, 493. 
 Quoted by Mr, Daniel (on Negotiable 
 Instruments), 495. And see Ford v. 
 Auger (1874), 18 L. C. J. 296; Banque 
 
 Jacques Cartier (1886), 18 Que. L. R. 
 89, 
 
 245 & 46 Vic. (Imp.), oh. 61, g 20; 
 88 Vic. (Can.), oh. 61, g 8a 
 
EXECUTION OF DOCUMENTS. 
 
 465 
 
 "Will cover." ^ *' * complete bill for any amount the^ stamp 
 
 Kflf^ C^^adian Code is similar, but omits all reference to 
 
 t r^ d'Jl ' Tf'''''^' "^'°^^' ^^ *° ^^^^^--^ '^-' ^ '"ere signa- 
 ture delivered « in order that it may be converted into a bill 
 operates aspnma facte authority," etc. The transferee must 
 therefore, inquire whether it was delivered for the purpose of 
 bein^converted; but he need not inquire as to the particulars 
 of the authority, or as to any conditions attached to its exer- 
 cise. You may not assume that there was any authoritv at all. 
 
 IJ^V ■. T '''^'' ^°'' ""^^ ^''""^' *^^^ 't ^^^s absolutely un- 
 limited and untrammeled! 
 
 Current Practice.-In considering the cases upon the sub- 
 ject m hand one cannot help attributing their rarity to the 
 umversal existence of a very strong sense of the danger of 
 either storing blank notes or distributing signatures, an'd also 
 ot the absolute necessity for care with regard to them. Were 
 a well-known merchant to amuse himself by leaving his auto- 
 graph on blank slips of paper in hotel reading-rooms, and 
 were some rascal to superscribe a note upon one of them it 
 would seem to the writer to be a mere travesty of justice to say 
 that he should not be liable (1) because he did not intrust the 
 paper to any one, (2) because he conferred no power upon any 
 one, and (3) because he was not guilty of any negligence. M^. 
 Daniel is, however, of a diflferent opinion. He says • » 
 
 _ Bat cannot it fairly be argued that the negligence consists 
 m attaching « no words to it." When it is considered that 
 there are so many simple methods of protecting an autocrraph 
 from misapplication {e. g., placing it at the top of the page in- 
 stead of at the bottom; superscribing the words « Yours very 
 truly;" fiUing the blank above with a pen-scratch) - methods 
 which are adopted by probably every reasonable business man 
 (despite the authorities which indicate that there is no negli- 
 gence m doing otherwise), is it too much to say that if such 
 simple, every-day precautions are neglected there is suffioient 
 carelessness to estop? Is there not in this region also a 
 
 ;t*eU^?Lt1^ct^s?„VL^^^^^^ - "^PP-P-t^ ~ of 
 
 J On Negotiable Instruments, 858. 'Ante, p. 80. 
 
 of) • 
 
466 
 
 OSTENblBLB 0WNBB8HIP AND AGBNOY. 
 
 For example, payment of a bill before due date « a satis- 
 faction of it. But suppose that afterwards it be fraudulently 
 reissued to an innocent holder, the parties to it are liable. They 
 should have destroyed or canceled it -they owed a duty to . 
 
 their fellow-citizens to do so. 
 
 4.T4. <a tha Hiitv of bankers to make some mema on bills and notes 
 whlJS U'e^l^Sn^^'idrbSuf tW do no, the ho,^^^^^^^^^^ 
 cannot be affeotad by any payment made before they are ane. 
 
 It may indeed be that liability should not arise out of some 
 new product of "ingenious wickedness;"' but it is quite an- 
 other thing to declare that the strongest temptation to the 
 simplest fraud may be held out to all the rascals in the world, 
 and that the teraptor should not be the one to bear the loss. 
 
 UnisBued BilU Under the Co^.~ Section 21 of the Code* 
 provides that . , 
 
 ■^^1 IfiSwSS'tote p.rtl«, and .. regard, a «mot. p.rt7 other 
 
 him is presumed until the contrary IS proved. ,. _ i^ 
 
 This legislation terminates controversy m junsaiotions m 
 which itis in force as to liability upon a completed bill or note 
 which is stolen or found and passed on to a holder in due 
 course The signers of such instruments can no longer sup- 
 pose that a crime will not be committed, and act on that be- 
 lief " They can no longer urge that liability depends upon 
 having issued the instrument "intending it to be used." Lar- 
 
 cenv may make him liable. ,. , . • * 
 
 But it is doubtful whether the statute applies to incomplete 
 bills, and still more questionable whether it was intended to 
 provide for the case of a mere signature. The language is, 
 "Everjr^contractonabill . . . is incomplete and revocable until 
 
 andThere the instrument is in blank, and still more where 
 
 iPer LonJ Ellenborough in Bur- 
 bridge V. Manners (1818). 8 Camp. 
 i98, 195. And see Wheeler ▼. Guild 
 (1888), 87 Mass. 515. 
 
 '•< Columbia v. Corneli (1888), i3(> 
 U. S.66& 
 
 * 45 & 46 Vic. (Imp.X oh. 61 ; 68 Vic. 
 (Can.), ch. 83, ii 21. 
 
EXECOTION OF D00CMENT8. 
 
 467 
 
 there is nothing but a signature, can it be said that there is a 
 contract » » Possibly it may be argued that the clauses quoted 
 (assisted by section 20) do apply to the case of blank notes, but 
 that the legislation does not touch the question of papers oarry- 
 mg nothing but signatures. 
 
 The statute does, however, take us away from the brinoiples 
 of Lords Justices Bramwell and Brett above dealt with, viz.: 
 (1) Ihat no liability can arise out of a crime; and (2) that the 
 question of liability depends upon ««his having issued the ac^ 
 ceptance intending it to be used." And it gives some eflfect to 
 the principle of appropriate prudence where the interests of 
 others are involved. 
 
 The question in cases not provided for by the statute ought to 
 be whether requisite prudence has been exercised. Some obser- 
 vntions upon this subject are to be found in a preceding chapter." 
 
 B. NON-NEGOTIABLE INSTRUMENTS, STOLEN OB FODND. 
 
 „ The terra "negotiable" is being used in this chapter in its 
 customary acceptation. But the term is inaccurate and mis- 
 Ieadia|y,and in considering the difference bettveen" negotiable" 
 and ♦♦wop-negotiable" instruments when misapplied, stolen or 
 found, perusal of a previous chapter is recommended.' Refer- 
 ence 18 also requested, for the purposes of the present section, 
 to the dfscussion in a previous part of this chapter of the mis- 
 application of non-negotiable instruments by persons to whose 
 custody they had been confided.* 
 
 In considering the question of liability upon non-negotiable 
 instruments when stolen or found, as indeed all other questions 
 relating to estoppel by misrepresentation, 
 
 cannot be too strongly insisted upon. Opinion will vary as to 
 the degree of prudence required ; but once we get away from the 
 idea that one cannot throw the burden of suggested dishonesty 
 on other people's shoulders, and adopt in place of it the view 
 that an appropriate measnre of prudence " means that althouijh 
 abTer/ertTo?ri^^XS,5^j;f ,^^?-^^^^^ they inust u^ reason- , 
 
 * Ante, p. 30. 
 
468 
 
 OSTENSIBLE OWNERSHIP AND AGENCY. 
 
 and that " too much opportunity" * must not be given for the 
 commission of fraud, there will be less divergence of opinion. 
 Meanwhile let it be noted that some progress has already been 
 
 made. 
 For example, stolen company bonds may be passed with a 
 
 good title.' 
 
 And if a certificate of shares should be taken in the name of 
 a non-owner, and he should steal it and sell the shares, the pur- 
 chaser would be safe,' although it is thought that it would be 
 otherwise were the thief an entire stranger to the shares.* 
 
 It has been held, too, that although the thief of a bill of lad- 
 ing cannot give a good title to the goods represented by it,* yet 
 if the theft be due to the negligence of the owner of the bill 
 the result would je otherwise.* 
 
 But if a mortgagor sho ild steal, or even upon fraudulent ex- 
 cuse obtain the title-deeds from the mortgagee, and make use 
 of them adversely to the mortgagee, the purchaser would take 
 the equity of redemption onljr.' 
 
 To the writer the only distinction between different classes 
 of documents (for the purposes in hand) rests upon the facility 
 with which they lend themselves to fraud. A completed note 
 can be passed with somewhat greater difficulty than money; 
 but, given a person willing to purchase it, its jiosse^ion evi- 
 dences the title of the holder.' If, therefore, its owner allow 
 it to escape, he, and not an innocent purchaser of it, ought to 
 
 lose. 
 
 Transfers of shares under present methods are as easily 
 transferred as notes.' If, then, an owner of shares will execute 
 
 1 Per Best, C. J., in Young v. Grote 
 (1827), 13 Moore, 484; 4 Bing. 258; 5 
 L. J. G P. 165. 
 
 iVenables v. Baring (1892), 8 Ch. 
 527; 61 L. J. Ch. 609. And see cases 
 cited with this one, ante, p. 880. 
 
 8Wint«r V. Belmont, 53 Cal. 428. 
 Cf. Ex parte Swan (1859), 7 C. B. N. & 
 400; 80 L. J. C. P. 113; Swan v. North 
 British (1863). 7 H. & N. 003; 81 1* J. 
 Ex. 425; (1863) 2 H. & G 175; 82 L. J. 
 Ex. 276. 
 
 * Bangor v. Robinson (1872), 62 Fed. 
 R 620. And see Young v. Brewster, 
 1 Mo. Appi R. 677; 62 Ma App. 62a 
 
 •Gurney v. Behrend (1854), 8 El & 
 B. 622; 23 L. J. Q. R 265; Shaw ▼. 
 The Railroad (1879), 101 U. 8. 565. 
 
 <)Lowe V. Raleigh (1897), 101 Ga. 
 820; 38 S. E. R. 867. 
 
 7 Northern Countie8V.Whipp(1884), 
 26 Ch. D. 482; 53 L. J. Cu. 629. And 
 see cases referred to with this one in 
 ch. XIX. 
 
 9 Ante, p. 894, 
 
 » McNeil V. Tenth Nat. Bank (1871), 
 
 JA -ft^T XT one A **A o'*^ MAAAa <nj4-A<1 
 
 ^U IT?* X« ViStJj X1.UIX B^^ \fttv^a viva's- 
 
 with this one in oh. XXIL 
 
EXECDTION OF D00UMBNT8. 
 
 469 
 
 cited 
 
 Wank trans' . of them prior to their being required, and alloir 
 Ihem to ascape, he, and not an innocent purchaser 6f them 
 < ught to lose. 
 
 The same reasoning would reverse the decisions above re- 
 ferred to, in which it is held that a purchaser of land from a 
 mortgagor ought to suffer and not the mortgagee, when the 
 mortgagee hands over to the mortgagor (upon reasonable but 
 fraudulent excuse) possession of the title-deeds; and it would 
 impose, consummately careful » circumspection on the part of 
 the holders of bills of lading whose whim it was to keep them 
 on hand in negotiable form. 
 
 " Negotiablb." 
 
 The reader should be now reminded of what has been said in 
 the preceding chapters as to the use of the word "negotiable," 
 and the suggestion that it should be superseded by the term 
 "ambulatory." Thus far in the present discussion the old 
 word has for convenience sake been used, for we have been en- 
 .traged in the inquiry whether there is a distinction between 
 instruments heretofore styled "negotiable" and other instru- 
 ments, with reference to the applicability of the principles of 
 estoppel to them. We have found that there is no distinction. 
 And it should now be pointed out that there could be none, 
 for (1) there is no distinction between « negotiable " and " non- 
 negotiable" instruments; (2) the proper division is into "am- 
 bulatory" and "non-ambulatory" documents; and (3) the am- 
 bulatory list embraces some "non-negotiable" as well as all 
 " negotiable " instruments. 
 
 Is there then some distinction between ambulatory and non- 
 ambulatory documents?— that is to say, between documents 
 intended to be operative between the original parties to them 
 only and those intended to be passed on? Yes, there is the 
 very clear and important distinction that third persons do not 
 acquire interests under non-ambulatory documents. There is 
 therefore no estoppel in connection with them; for there is no 
 estoppel between thfe original parties to the instrument (when 
 it has been obtained or completed by the fraud of the estonneU 
 asserter); and no estoppel as against third persons, for there 
 are none such in the case. 
 
 ^ Ante, pp. 63, 88Jl 
 
470 
 
 OSTENSIBLE OWNERSHIP AND AOENOY. 
 
 11 
 
 The estoppel, then, of which we have been treating occurs 
 in cases of ambulatory instruments, and as against persons who 
 have changed their position upon the faith of their being validly 
 executed. And any distinctions to be met with among such - 
 documents are to be attributed not to the inapplicability to 
 any of them of the unvarying principles of estoppel, but to the 
 difference in usage with reference to them. For all cases alike 
 
 the law imposes 
 
 "the duty of fellow-cltizens to observe, in varying circumstances, an ap- 
 propriate measure of prudence to avoid causing harm to others. * 
 
 Summary of the Chapter, 
 i. execution fraudulently obtained. 
 
 1. The true distinction between void and voidable transho- 
 lions is deternjined by the consideration whether or not they 
 are capable of ratification. 
 
 2. Documents impeachable because of fraud are voidable, 
 and not void, for they may always be ratified. 
 
 3. As between a swindler and his dupe, transactions may be 
 
 rescinded. 
 
 4. But if there have been carelessness on the part of the 
 dupe, he will be estopped as against innocent third parties who 
 have changed their position upon the faith of an executed docu- 
 ment. 1 • u 
 
 5. Distinctions between lettered and unlettered people, with 
 reference to occasions calling for "extraordinary caution," etc., 
 are merely factors in determining whether the dupe has ob- 
 served that rule of oondnct by which every one is required to 
 exercise "an appropriate measure of prudence to avoid oaus- 
 ing harm to one another." 
 
 6. Analogy from fraudulent purchase of goods. If the owner 
 of goods, although induced thereto by fraud, has transferred 
 the property in them to another, an innocent sub-purchaser will 
 be protected. If the property has not passed— if there has 
 in fact been no contract between the swindler and the dupe — 
 a sub-purchaser takes nothing. Nevertheless, if the dupe has 
 equipped the swindler with indicia of title to the goods, he 
 u. ^4-yv»,»<»i ffi^m Aonvinir thn existence of a contract 
 
 under which the property passed. 
 
 n i4n<e, p.80. 
 
EXECUTION OF DOCUMENTS. 
 
 471 
 
 n. EXECUTION FKAUDULBNTLY COMPLETED. 
 
 A. Negotiable instruments: ' 
 
 (a) Completed instruments intrusted to other persons 
 will carry their obligation to pay with them, al- 
 though the authority of the persons intrusted is 
 exceeded. * 
 
 (J) Blank instruments are in the same category. 
 (o) Signed slips will carry liability if the transferee had 
 no notice of their original imperfection; otherwise 
 there is no liability. 
 B. Non-negotiable instruments: 
 
 (a) Completed instruments intrusted to other persons will 
 estop the signers of them in favor of those who 
 change their position upon the faith of them. 
 {b) Blank instruments are subject to the same principle- 
 • but observe that where the existence of the blanks 
 IS known to the estoppel-asserter, he wjli be safe only 
 m cases in which custom authorizes him to infer 
 authority to fill up the blanks. 
 C. Documents stolen or found: 
 (a) Negotiable instruments: 
 
 (1) There is no difference between complete and 
 
 incomplete instruments. 
 
 (2) Nor between those intended, and those not in- 
 
 tended, to be issued. 
 
 (3) There is no rule that every one has a right to 
 
 suppose that a crime will not be committed, 
 and to act on that belief. 
 
 (4) Estoppel declares for liability in all such cases. 
 
 (5) Signed slips are distinguishable, but here too the 
 
 rule ought to exact "an appropriate measure 
 y^^ ^r ^^ prudeuce to avoid causing harm to others." 
 {6) Non-negotiable instruments: 
 
 (1) The rule just quoted ought to apply to all sorts 
 
 of instruments. 
 
 (2) Stolen or found company bonds pass with a 
 
 good title. 
 
 (3) The law is approaching the same conclusion as 
 
 to company shares. 
 
 (4) And also as to bills of lading. 
 
472 
 
 0STBN8I0LE OWNKBSHIP AND AOENOT. 
 
 (5) But a mortgagee is thus far safe as against dam- 
 
 age through abstraction from him of the title- 
 deeds. 
 
 (6) The true distinction among all classes of docu- 
 
 ments ought to be made with reference to the 
 facility with which they lend themselves to 
 fraud — failure to exercise "an appropriate 
 measure of prudence" should be the test of 
 estoppel. 
 D. The classification into "negotiable" and "non-negotiable'* 
 instruments is unscientific and misleading. 
 
CHAPTER XX 71. 
 
 OSTENSIBLE AGENCY - PRINCIPAL AND AGENT. 
 
 The principal difficulties in the way of scientific treatment 
 of the law of principal and agent are four: (I) the vogue of se- 
 rious misconceptions relative to the classification of agents into 
 general and special; (II) lack of clear appreciation of the appli- 
 cation to the subject of the principles of the law of estoppel; 
 (HI) misunderstanding as to the effect upon an unauthorized 
 act of its having been done "for the master's benefit;" and 
 (IV) confusion arising out of the phrase « within the scope of 
 his apparent authority." An attempt will be made to clear 
 away these difficulties. Their discussion will form the four chief 
 divisions of the present chapter. 
 
 Some Propositions. 
 
 It will !. ell, however, to interpose and tentatively suggest 
 B. few .simple propositions: 
 
 1. A man cannot be bound by the act of another unless he 
 authorized it.' 
 
 2. mvertheless, if he personally represents that he has au- 
 thorized it, and on the faith of that representation some third 
 party has changed his position, he ought to be estopped from 
 denying the existence of authority. In such case the act was, 
 and remains, unauthorized; but there is estoppel against so 
 saying. 
 
 3. Assisted misrepresentation also will estop:' If the osten- 
 sible agent is the one who makes the representation of author- 
 ity, and the supposed principal ha^ merely assisted that repre- 
 sentation—done that which has made it credible — he will be 
 as much estopped as if he had himself made the representation. 
 For example, if I should employ a broker to sell some shares, 
 he would appear to have all the authority usuaiiy possessed by 
 a broker.5 Jnow suppose that 1 had in fact limited that au- 
 
 1 Ratification as a ground of liabil- 2 see ante, ch. IV. 
 ity is not within tJie scope of the 'Pickerinjc v. Busk (1812). 16 East, 
 «*»»?'«'■• 88. And see tVa. 
 
474 
 
 OSTENSIBLE AOEKOY. 
 
 thority, and the broker nevertheless acted as though it were 
 unlimited, I would be estopped from denying his possession of 
 customary power; because I had, by my employment of that 
 particular sort of i^ person, given the appearance of usual au-' 
 thority. 
 
 4. Eepresentation of the .existence of authority may arise in 
 two classes of cases: 
 
 (a) There may be a representation that the person acting 
 was an agent, when in fact he was not. 
 
 (h) There may be a representation that the person acting had 
 larger powers than he in fact had. 
 
 In other words, there may be representation (1) as to the 
 existence of agency ; or (2) as to the extent of it. This distinc- 
 tion (although probably not scientific) will be of much service. 
 
 I. General and Special Agency. 
 
 It will observed that in tfee above short but comprehensive 
 view of the principles of estoppel as applied to the law of 
 principal and agent, nothing is said as to the much-used dis- 
 tinction between general and special agents. Indeed there ap- 
 pears to be not only no necessity but no place for it, Never- 
 theless there is hardly any distinction more generally affirmed 
 and more frequently appealed to. "We must see what there is in it. 
 
 The most usually adopted statements of the distinction are 
 constructions of the language of Lord Ellenborough which is 
 
 quoted everywhere: 
 
 "When that question is discussed it may be material to consider the 
 distinction between a particular and a general authority; ti»e latter of 
 which does not import an unqualified authority, but that which is derived 
 from a multitude of instances, whereas the former is confined to an indi- 
 vidual instance." ^ 
 
 A general authority is that " which is derived from a multi- 
 tude of instances;" and a particular authority "is confined to 
 an individual instance." Does this mean that if particular au- 
 thority be given in a multitude of instances, then at some 
 point in the sequence, or at the end of it, the authority will 
 become general? If so, and there be some real distinction be- 
 tween the power of a general and special agent, it is extremely 
 
 1 Whitehead ▼. Tuokett (1813), 15 Butler v. Maples (1869), 9 Wall. (U. a) 
 East 408. Among the scores of cases 766. 
 and text books see a discussion in 
 
PBINOIPAL A»D AGENTS 
 
 475 
 
 important that we should be able to say exactly how many 
 instances make up the magic number? Unless indeed'we ar'e 
 to be told that the multitude of instances spoken of are not in- 
 stances of particular authority at all (changing mechanically 
 «to general authority), but instances, all of them, of general 
 authority. In which event, however, a new difficulty confronts 
 us, for the first of the series is then, ex hypothesi, a case of 
 ^neral authority; while according to our definition it can only 
 be a case of particular authority, for it is "confined to an in- 
 dividual instance." 
 
 It is hard to see how the extent or nature of an agent's au- 
 thonty can, m any way, depend upon the frequency or in- 
 frequency of the employment. Powers of all and every sort, 
 twhmited as well as the most restricted, may be bestowed 
 «pon the agent at his first employment; and may be so con- 
 tinned throughout his life-time. And his exercise for decades 
 of the powers which are given him cannot alter, or affect, or 
 enlarge their extent. . 
 
 For another and altogether different purpose, no doubt 
 former acts of agency are frequently of great importance: 
 You want to prove that A. is B.'s agent, with certain powers; 
 and you know that on previous occasions A. so acted with B 's 
 consent. But observe that these previous instances (even 
 though there be a multitude of them) do not in any way en- 
 large or affect the character of the agency.^ They are merely 
 evidence of an express grant of that sort of authority which 
 the agent has theretofore exercised. For example, a servant 
 has been accustomed to pledge his master's credit for wine- 
 the master refuses to pay the last of a long series of bills; and 
 evidence is given of the previous dealings to prove that the 
 master had m fact authorized the pledge of his credit -not 
 to show that the servant was a general agent or any other 
 sort of an agent, but to prove actual grant of authority. That 
 is the full extent of the doctrine of « a multitude of instances " 
 It proves agenoy.2 It does not alter it. A long course of deal- 
 »Note particularly the reasoning instances, see Spooner v. Browning 
 
 "».'."*' Z '1 "i"*' "' "°'' Kpoouer V. Cumnilngs (1890). 161 
 
 ; f f. °***°°^ repudiated. Masa 818; 38 N. E. R 889; Mawh v 
 
 (1882), 7 Ont App. 51& As to several 
 
476 
 
 OSTENSIBLE AOENOT. 
 
 ing " raises a presumption that the agent had actual authority 
 to do what is done by him; " ^ not to do something else.' 
 
 Mr. Justice Story, in his work on Agency,* refers to Lord 
 Ellen borough's dictum as containing " the true distinction ;'* 
 but himself frames one which is quite different from it:* 
 
 "A special agency properly exists when there is a delegation of author- 
 ity to do a single act; a general agency proiierly exists when there is a 
 delegation to do all acts connected with a particular trade, business or em* 
 ployment."' 
 
 This distinction is defective because (if for no other reason) 
 its classifications are not sufficiently discriminative or exhaust- 
 ive. For example, suppose that I employ a broker to purchase 
 all the stock of company A. that he can from time to time ob- 
 tain ; but insist upon his acting in some unusual method. Here 
 I employ him to do more than "a single act; " and yet there is 
 no " delegation to do all acts connected" with his business. In 
 which category is such a case? 
 
 Mr. Campbell, in his recent work on " Sale of Goods and 
 Commercial Agency," refers to Lord Ellen borough's dictum as;. 
 " pregnjint language, truly indicating a distinction." * If so, one 
 would expect to find a factor, and a broker, in the same cate- 
 gory — in an individual instance of employment both of them 
 would always be particular agents; and the line would be 
 drawn between "an individual instance" and "a multitude of 
 instances;" and not between persons of such closely allied oc- 
 cupations. Nevertheless Mr. Campbell says : 
 
 " A factor is the term used in English law as a general agent having 
 authority to sell." 7 
 
 " Nor is there by the mere fact of employment as a broker any presump' 
 tion of general authority. Prima facie he is a special agent; but a general 
 authority of limited extent may easily be inferred from a course of deal- 
 ing." ». 
 
 Of the authority of partners, Mr. Campbell says' that "every 
 
 member of an ordinary partnership is its general agent." But 
 
 1 Wheeler v. Benton (1897), 67 
 Minn. 293; 69 N. W. R. 937; Graves 
 V. Horton (1887), 38 Minn. 66; Sp N. 
 W. R. 668; Lythe v. Bank (1899), 26 
 S. B. 6 (Ala.); Marsh v. French (1899), 
 83 III. App. 7a 
 
 2 For example, the receipt of rent 
 on many occasions through an 
 agent will not extend the authority 
 so as to cover payment to the agent 
 in kind,' or in repairs. Paisley r. 
 Bannatyne (1887), 4 Man. 20S. 
 
 »Sec. 1ft 
 
 <Sec 17. 
 
 "Paleyon Agency, p. 2; and Ste- 
 phen's Com. (9th ed.), II, 65, are to the 
 same effect And see Montgomery 
 V. Hardaway (1893), 104 Ala. 115; 16 
 
 aRsa 
 
 6 Page 526. 
 ' Page 539. 
 "Page 55a 
 "Page 6321 
 
 Ana see pi. o4u. 
 
 \ 
 
PRINCIPAL AND AGENT. 
 
 477. 
 
 .» 
 
 not evidently because of «a multitude of instances; » for prior 
 to a single instance there is the same authority as after t;ventv 
 years of action. ^ 
 
 In the oft-quoted case of Fenn v. Harrison^ Buller, J., said : 
 
 agent, fs in the SaseTf a facLX | ""^^^^^^^^ ^pr,»^\ 
 
 cipal is bound by his acts. But an «iSnf ^^^"'i"^ abroad, tlie prin- 
 puVpose and un^er a Umited Ld S?iJ;°^h*'i"**'* '° for a particular 
 
 Is there any such distinction ? Here is the crux of the whole 
 situation, and a complete understanding of it will banish much 
 difficulty: "The principal is bound by the acts of a general 
 agent; but a particular agent cannot bind the principal by any 
 act in which he exceeds his authority." If this were really the 
 law the cases would be replete with examinations of the exact 
 nature of the distinction between general and special agents. 
 That point once well settled, the prescribed result in each case 
 would invariably follow. But there are no such examinations 
 nothing but general statements of the nature of those already 
 referred to, and no analysis of them. 
 
 Mr. Broom's statement of the law may form the basis of 
 exposition: 2 
 
 Observe the proviso -the principal is bound by the acts of 
 a general agent, not in all cases, but only (a very necessary 
 qualification) where « what he (the agent) does is within the 
 ordinary and usual scope of the business which he is deputed 
 to transact." What is meant is this: I employ a general agent 
 in a certain business; such agents usually have certain powers 
 bestowed upon them by their principals; my agent does some- 
 tbing within those usual powers, but something which I have 
 prohibited him from doing; and I am bound by his act. The 
 agent exceeds his powers; nevertheless I am bound » 
 
 1(1790) 8 T.R 768. 
 
 2 Common Law (8th ed.), 675. See 
 also I'Jaat India v. Hensley (1794), 1 
 Esp. 182; Banks v. Ererst (1886), 85 
 Kan. 687; 12 Pao. R. 141; Catholic 
 
 Bishop V. Troup (1895), 61 III. App. 
 641 ; Phoenix v. Gray (1899), 83 S. E. 
 R. (Ga.) 948. 
 
 ' Or rather I am estopped from de- 
 nying the existence of authority. 
 
478 
 
 OSTENSIBLB AGENOT. 
 
 But that is not because the agent was a general agent; for 
 precisely the same result will attend the case of any agent. In 
 other words, it may as well be said of a particular agent as of 
 a general, that the principal will be bound although the agent 
 exceeds his authority, " provided what he does is within th& 
 ordinary and usual scope of the business which he is deputed 
 to transact." Many examples of this will be given later on. 
 One at present: I employ a broker (a special agent, according- 
 to Mr. Campbell ^) in " a single instance," prohibiting him, how- 
 ever, from doing something which is usual in the stock mar- 
 kets; he acts for me and disregards my prohibition; and I am. 
 bound.' 
 
 And the reason is the same as in all other cases of agency. 
 It has nothing to do with any distinction b. tween different 
 sorts of agency. It depends upon the fact that my agent has 
 ostensibly certain powers; I have enabled him so to appear; 
 and I am therefore estopped from denying that he has those 
 powers. If I stood by and aflowed another person to pose as^ 
 the owner of my horse, I would be estopped from setting up 
 my title to him as against a purchaser in good faith. Ostensi- 
 ble ownership would there estop me. Ostensible agenoy, for 
 which I am responsible, will also estop, and for precisely th& 
 same reason. 
 
 The current rule as stated in Smith's Mercantile Law is as- 
 foUows: 
 
 "The authority of an agent to perform all thinrs usual in the line ot 
 business! in which he is emi^loyed cannot be limited ' by any private order 
 
 The rule is directly 
 
 or direction not known to the |>arty dealing with him. 
 the reverse concerning a particular agent, that is, an agent employed in 
 one single transaction; for it is the duty of the party dealing with such an 
 one to ascertain the scope of his auttiority; and if he do not, he must 
 abide the consequencea"* 
 
 The first part of this rule is open to the observation that it 
 is a patent truism ; for it is plainly impossible to give authority 
 to an agent " to perform all things usual," and yet to withhold 
 
 i Ante, p. 478. 
 
 2 Pickering v. Busk (1813), 16 East, 
 45; Sutton v. Tatham (1889), 10 A. & 
 E. 81; 8 L. J. Q. a 210; Robinson v. 
 Montgomery (1896), 3 Ch. 841; 66 L. 
 J. Ch. 015. 
 
 3 The expression " cannot be iini- 
 ited," although often made use of 
 (Towle T. Leavitt (1851), 23 N. H. 
 
 858X is ip' .^jrate. A principal can^ 
 of course, impose such limitations a»- 
 he pleases upon his own agent. 
 What is meant is that he may be es- 
 topped from alleging the existence 
 of limitations. 
 
 ^lOth ed., 140. See also Bryant- 
 V. Moore (1840), 26 M& 84. 
 
PRINCIPAL ANP AGENT. 
 
 479 
 
 «o^^ 2 . ^''"""" '° ^"^ '""' ""^ '^''^ ^^'"g^- Waiving this 
 point what IS meant, no doubt, is that "it is the duty' of the 
 
 party deahng w th" a particular agent "to ascertain the scope 
 
 ^ nil 7' Z^''''' ''^'^ '' "'^ ^"^^ "^^'y '^ '^^ case otl 
 general agent; and a particular agent is one "employed in a 
 
 single transaction," while a general agent is one employed " to 
 perform all things usual in a line of business » 
 
 Kow, suppose that I employ a broker to purchase on the 
 stock market twenty shares of certain stock for me, what are 
 his powers? and what sort of an agent is he? If U answer 
 that he IS a particular agent because he is "employed in one 
 single transaction," then every one dealing with him must in- 
 quire into the exact limit of his authority -a result which will 
 not be asserted.' And if we reply that he is a general agent, 
 as being employed « to perform all things usual in the line of 
 fhT"T «^ a broker, then we «hall probably be asked as to 
 the value of "one single transaction " as a test of particular 
 agency. In fact, the c^se suggested is within both of the al- 
 ternatives, and would therefore have, by it, to be decided both 
 ways. 
 
 Mr Dicey properly criticises the statements ol law above 
 
 ^"-^^'..i °' ■"" "J"'" "* '''""°" °' ">« ™™°' ideas: 
 
 to be that an apparent ai^horitv c^ ppL^ 1!^°" l^^^^ ^^V""^ '""'^ seema 
 
 from the principal which ar?u,^^^^^^^ t^*?'"^^ by private order* 
 
 ticular agent as being emSoved iS o^« w5t,*'"'^P*'"'y' ^"* that a par- 
 
 apparent authority whIteVe7anHS^^'*°^^ ^H'^ ^" ''^''^'i^ have any 
 
 eril rule trustYoSis Xr JcSl SShorTt?.""'' '''''''°''' "^"«' «« * «'^' 
 
 Mr. Dicey clearly sees that the same law must be applied to 
 
 all sorts of agencies, but retains the "one instance onlv » be- 
 
 cause m such cases ho says the agent "can rarely have any 
 
 apparent authority whatever." But the cases are far from rare 
 
 On the contrary they are multitudinous. Every dav there are 
 
 thousands of brokers plying their vocation. If I send one of 
 
 them into the market he has « an apparent authority," namely 
 
 that authority which a broker usually exercises in that line of 
 
 business; and not any the less is t.hio th^ «„„„ *u-* u. .•_ « 
 
 * See ante, p. 478. 
 »Byle8onBill8(8thed.), 8ft 
 
 the case that he is " era- 
 
 3 story on Agency, sea 127, 
 * Dicey on Parties, 248, a 
 
480 
 
 OSTENSIBLE AOENCr. 
 
 ployed in one instance only." It would be better to leave bv 
 
 itself Mr. Dicey's statement 
 
 "thatanapparentauthority can neyerbc restrained bv private orders from 
 the principal which are unknown to the third party. '^ 
 
 But this, too, cannot be strictly accurate; for Mr. Dicey him- 
 self says : ^ 
 
 "The principal is always bound by the acts of the agent up to the extent 
 of the advent's authority; and is never bound beyond the extent of that au- 
 thority." 
 
 If this be true, and it indisputably is, the extent of the real 
 authority must be everything, and the extent of the "appar- 
 ent" authority must be wholly immaterial. And so it would 
 be but for the law of estoppel, the application of which the 
 text writers almost unanimously overlook. The principal can- 
 not be bound by an unauthorized act; but if the principal has 
 enabled the agent (any sort of agent) to appear to have greater 
 authority than he really has, the principal is estopped from as- 
 serting that such authority does not exist. This, and not dis- 
 tinctions between single and^ multitudinous instances, explains 
 all the difficulties.' 
 
 Although Mr. Justice Story, p.t jne part of his work (sec. 21), 
 
 says that the distinction between general and special agents is 
 
 very important, 
 
 "as the doctrine applicable a the one sometimes wholly fails in regard to 
 the other," 
 
 at another (sec. 133) he contends that, 
 
 "properly considered, the 8au.d principle pervades and governs each of the 
 Cases;"' 
 
 and again (sec. YO) he says: 
 
 "Principles very similar may be traced back to the Roman law; for in 
 that law, where the authority was express or special, the agent was bound 
 to act within it; and where it was of a more general nature, still the agent 
 could not bind the principal beyond the manifest scope of the objects to 
 be accomplished by it." 
 
 See also sections 71, 73, 83 ; and the longer note to section 127, 
 
 in which he says: 
 
 " It has been already suggested {ante, sea 78) that the same general prin- 
 
 1 On Parties, 840. 
 
 2 The distinction is very important 
 The court does not say, "the agent 
 has no authority, nevertheless the 
 principal is bound; " which would be 
 absurd. But it does say: "Upoil the 
 xaCtS pfOvcd, the ugC'iit apparently 
 had authority; the principal per- 
 mitted such appearance; this is good 
 e'^idence against the principal that 
 
 there was, in fact, such authority; 
 the principal will not be allowed 
 to assert anything inconsistent with 
 that on the faith of which the con- 
 tract was made; the evidence there- 
 fore proves the existence of the 
 authority." 
 
 »See Beem v. Lockhart (1891), 1 
 Ind. App. 203; 27 N. E. R. 239. 
 
PfilNClPAL AND AGENT. ^gj 
 
 cLtaPt^'^^B^t'l^rvS^^^^^^^^^^^ *\« party be a general or a spe- 
 
 So far as the nresenf wrifo^ « sumc.ent to solve many casea" 
 
 author makes LsXs Tf trHT; k"""'"'' "' ^'--y *"« 
 
 third d! rfvtt? ^'''" ''®''''^®° the principal and the 
 
 «u«ge of estoppel are m tL """""'P''^ '° '"'^ '»''- 
 
 principal „„,esfuira„?,u;n„ir°Lr;rtLt:'' ''" 
 
 r>nf .K f/'^o^eous principle, Mr. Justice Storv fsec 197 « \ 
 pat the matter in this way: ' ^^ 
 
 .ra;i?^a/ySl«,-ty.n^^^^ 
 
 agent within the scone of?h Jo. :*i:-.P'^'".'''P»' '» bound by all acts of Mb 
 world to posset! al?fongh he mavZV'^'*''^ *If. ^°^^' hiJise f out to the 
 instructions unknown to the ,^rTnJ=H*f- ^^^^P" ^'"^ ^Ore limited nrivatn 
 <.n the doctrine £ wUreTeTftwo".^::'*'''"™- ^nd this is fSed 
 of a third person, he whohas heWYharL^"^""^ ™"«* s"ffef by the act 
 confidence, and having authorifci in fh P*^"°?. °"* *« "worthy of trust and 
 will at once be percefved thSt th^ K '^*"?'"' «''*" ^e bound by ij. it 
 cases of agency, whethe? it be the cai^fT^ ''„ ^^^''^ applicablJ to all 
 
 If this paracrraph be tVpl?? -t^ . °''P'"'"''*«^"«y-" 
 t^^'^o^ap" oe turned (as it easilv mav^ int^ tu^ i 
 
 t IS anihcial and unsatisfactory, if not positivblf n^s lead- 
 ing, 'andsuffffeststhefnllnm,-n„. ^ -^ misieaa- 
 
 ing,''2 and suggests the following:" 
 
 "One is in ifo r.o<...— i.- ... . . . ° 
 
 limita;foiVt"hiJrp*erSo'L''nt'S'ia^^^^^^^ 
 by his words or condS ifeld out th?al^^^^^^ ""'««« the principal has 
 
 such limitations are not hniised Thf*. m* ^^- ''P'' ."P°« "'hose authoritv 
 unrestricted by other liniitnH^n« + J ^.^'''^r " »" »t» nature general andr 
 
 within the boJndrof whaJVs usuafVr''^'^ '^'ll^'^ ^''"fi"^ thf authori?y 
 oiimatnnnnc I* ..• wuar. 18 usual, prooer and nor.ocoo. .i-_ ...""?/ 
 
 them."3 - " — -r- other "mictions the -p^-indpa^l"^;;^[Slose 
 
 On Agency, §6. nd.,^28i. And 
 
 SI 
 
 see §§279. 283, 287, 28& 8 §283, 
 
482 
 
 OSTENSIBLE AGENCY. 
 
 To test the validity of this distinction let us recur to the case 
 of a broker employed in a single transaction, and let us ask 
 again whether it is a case of special or general agency? It i» 
 "in its nature limited," and so special; but the limitations are 
 confined to " what is usual, proper and necessary under like 
 circumstances," and so the, agency is general. In fact it seems- 
 to be a case (if we are to use the customary terms) within the 
 difficult definition of Shepley, J.:' 
 
 " A special agent is one employed for a particular purporo only. He 
 also may have general authority to accomplish that purpose."' 
 
 And probably if o-r present phraseology gives us special 
 agents with general powers, and (for the sarao reason) general 
 agents with special powers, something of a case is made out for 
 the revision which Mr. Mechem attempts. 
 
 But all must agree that the powers of both general and spe- 
 cial agents are limited, and that no agent of any kind can bind 
 his principal by an ultra vires act — general and special agents 
 are alike so circumscribed, ^nd Mr. Mechem would also agree 
 that there is no distinction between general and special agency 
 with reference uo the estoppel of a principal by holding out an 
 agent as having larger powers than he really possesses. His 
 language upon this point is well worth quotation : 
 
 "It may therefore be stated as a general rule that whenever a person 
 has held out another as his agent authorized to act for him in a given ca- 
 pacity, or has knowingly and without dissent permitted such other to act 
 as his agent in such capacity; or where his habits and course of dealing 
 have been such as to reasonably warrant the presumption that such other 
 was his agent authorized to act in the capacity, whether it be in a smgle 
 transaction or in a series of transactions, his authority to such other to 
 act for him in that capacity will be conclusively presumed so far as it may 
 be necessary to protect the rights of third parties who have relied thereon 
 in good faith and in the exercise « reasonable prudence, and he will not 
 be permitted to deny that such otiier was his agent authorized to do the 
 act that lie assumed to do, provided that such act is within the real or ap- 
 parent scope of the presumed authority." * 
 
 Summary. — We may then say : 
 
 1. No advantage is derivable from the usual division of agents 
 
 into general and special. 
 
 1 Bryant v, Moore (1846), 26 Me. 87. 
 
 2 Chicago V. T»up (1895X 6 111. App. 
 641, may perhaps be in the same 
 category. New Albany v. Meyers 
 
 aann\ ah \Ir\ A nn \9A uraa f Via mum 
 
 of a general' agent "in a particular 
 line." The master of a ship on a par- 
 
 ticular voyage, too, is sometimes 
 called a general agent Arthur v. 
 Barton (1840), 6 M. & W. 148; 9 L. J. 
 Ex. 187. 
 
 8 On Agency, 8 84. Approved in 
 Johnson v. Huiley (1893), 115 Mo. 613; 
 22 S. W. E. 493. 
 
He 
 
 PKINCIPAL AND AGENT. 438 
 
 3. For in all cases of agency 
 
 8. Nevertheless, if the principal shoald untrnlv represent ih«t 
 h.s agent any sort of agent) had authority to do hraltfn 
 ,.est.„, the prinoipa. would be estopped LVdVn^g'tb: 
 
 th*ritt"ll''l?'l"1.*''°/«'"''' ■"'"^presentation of an- 
 be estop7ed """"" """■" " "'"""» " '"- "•- "» -nld 
 
 tUeV; J'L^J glnf?.To?'.'SS;ig?r.''' "" "^ »' «8«-=7 ""ether 
 
 II. Estoppel. 
 
 a„,?r?.l"r '"'"'' '''"»'' '''** °' ">« ««»ifloanoe of individual 
 
 dirtTedrthr"? ',""T '^' ""^"^ °" "« »°™ P-« » a ly 
 directed to the relat.on of estoppel to the law of principal and 
 
 It has been said that although an act be unauthorized vet if 
 the person on whose behalf it was as,iim.H .„ , "7'^*"' y*' " 
 SDonsihlo tnf ti,„ assumed to be done was re- 
 
 sponsible for the appearance of real authoritv he ousht to h„ 
 estopped from denying its existence. For the pnrpZs o d^ 
 cnssion let the subject be divided into- "^ 
 
 istenc?:rage:cr '"^ '""""'"" °' """" """'^ '^ '"« - 
 
 Butf^r.T '° "''''"' " '■"'"'' 'o *■■« ^t*"' of tbo agency 
 But for the purposes of discussion and clearness only CTf 
 he enent of the agency do not include the act (No itL' 
 as to that act agency does not exist at all (No 1 And t" ' 
 trariwse ,f agency exists as to a certain actVo 1) the ex' 
 tent of the agency (No. 2), e. k,potAen, iucludi the tt 
 
 (1) MIoppel aa to Esmtenee of Aammj — Alth«„„l, i, • • 
 versal knowledge that a principal Tvt botd by t «nan'" 
 ^ » ""' f I" -g^' (it the aoi be within the a^nt^" 
 ostensible authority), it is not only somewhat nafamiliaf b„I 
 .s somefmes denied that there may be estoppel where the™ 
 
 was in fact no agency at all biitnni„ti,. *™ 
 
 IT.. ., s^i-y ai an, out only the appearance ntuma-^ 
 
 s. c. .he merest reference to the multit'ndinons cases' wh.Vh 
 the point. Those cases ai-e so numerous that a special chapter 
 
481 
 
 OSTENSIBLE AQENOT. 
 
 of this work is devoted to their consideration. Thej' are of 
 this sort: A man appearing to be a member of a partnership, 
 but in reality not so, is sued upon the firm's obligation, and the 
 question is as to his liability. Observe that there is no control 
 versy whatever as to the < xtent of the agency of one member 
 of a firm to bind his partners. The point is, was the defend- 
 ant a partner at all? was there an\' ager.cy? The question is 
 as to existence of agency; and this is to be settled by appear- 
 ance of agency - ' hat is, by estoppel.* 
 
 Many cases overlook this point. Biggs v. Evana"^ is one of 
 the most notable of thera. The owner of a table-top sent it to 
 a dealer in such things, accompanied by the following letter: 
 
 "I will intrust you with the sale of my opal table u|K>n the following 
 conditions: That the table shall not be sold to any person, nor at any price, 
 without my authorization is first obtained that such sale shall be etfected. 
 That the check handed to you in paynaent for the table shall be handed 
 over to me intact," etc. 
 
 The dealer, disregarding the limitations imposed, sold the 
 table-top; and it was held i\\^t the owner was not bound by the 
 sale. Wills, J., said : 
 
 "It is said that the plaintiff enabled O. to sell the table-top as bis own, 
 and that his doing so was within the scope of his authority as it would be 
 understood by persons who dealt with him; and that as he had put it in 
 the power of G. to commit the fraud, he must bear the loss. I think, how- 
 ever, that a fallacy iinderlies the expression that he enabled G. to commit 
 the fraud. In one sense, and one only, did he do so. He gave him the 
 corporal possession of the table-top, and it was that power that enabled G. 
 to sell it as his own, or by way of a transaction within the scope of his 
 apparent authority, as a person carrying on a business in which sales are 
 habitually effected. But it is quite clear that it requires more to found 
 the argument in question. In one sense every person who intrusts an 
 article to any person who deals in second-hand articles of that descrip- 
 tion enables him, if so disposed, to commit a fraud by selling it as his 
 own. A man who lends a book to a second-hand bookseller puts it into 
 his power, in the same sense, to sell it as his own. A man who intrusts 
 goods for safe custodv to a wharfinger who also deals in his own goods, or 
 in other people's goods intrusted to him for sale, in such a sense enables 
 him to commit a fraud by selling them to a customer. But such a traus- 
 aotion clearly could not give a title to a purchaser as against the owner. 
 The true teat t«, I take it, whether the authority given in fact is of such a 
 nature as to Cover a right to deal with the article at all. If it does, and the 
 
 iThe California Civil Code provides 
 for estoppel as to existence of agency : 
 " An agency is ostensible when the 
 principal, intentionally or by want 
 of ordinary care, causes a third per- 
 son to believe another to be his agent 
 who is not really employed by him." 
 Sec. 2300. And see Heald v. Henely 
 (1891). 89 Cal. 633; 27 Pac. R 67. Per- 
 sons dealing with an agent, whether 
 
 "general or special, are bound at 
 their peril to ascertain not only the 
 fact of the agency, but the extent of 
 the authority, and in case either is 
 controverted the burden of proof is 
 upon them to establish it" Lester 
 V. Snyder (1898), 12 Cola App. 351; 
 00 Fac. R. 615. 
 2(1894) 1 Q. B. 88. 
 
riUNClPAL AND AGENT. 
 
 4S5 
 
 eflfect8 for other peopirsuchdTsooskinnS^ui"^^" ^''-l^*' ^« o^dinarii; 
 done is wjthin the general LtXTtvro^^rriH- ''°'^* '^'^^^^ ^''"^ '»« ''"« 
 posed as to the termf on which m-mLTr1^®^iS"u''u*".y 'imitations im- 
 
 Tins judgment would limit the application of estoppel to 
 ca es m u-hich there has been some minor departure from an 
 authonzed course. There must be (1) authority to do L" 
 thing; (2) something done «of the same nature as thedeair^ 
 contemplated by the authority;" and (3) a departure mS 
 as to terms or manner. In other words, there must as k 
 foundation of the whole thing" be some agency. The au 
 thonty of the agent may be exceeded, but agency itself cannot 
 be constituted by estoppel. 
 
 J.l7!!V^.T'^'' ^"^P°'" '^"' * "^^^ ^' ^^ r^^'ity not my 
 agent, bu I tell some person that he is, or stand by while he 
 
 professes to act as my agent, would I not be estopped as against 
 aay one misled by my conduct?^ If I stood bv while an'tht 
 person pretended to own my goods, and sold 'them as owner 
 to an innocent purchaser, I certainly would be estopped be- 
 cause of the ostensible ownership. The case cannot be differ- 
 ent If the vendor pretended to be my agent. It is only changed 
 to an instance of ostensible agency. 
 
 T.7r ''' wn"''"'^!' ''°' '''" ^°^^ ^"'^^^ '° ^^^ ^^raarks of Mr. 
 Justice Wills. There is this further: that the case was prob- 
 ably not one of ostensible agency at all, but one of ostensible 
 ownership;' and the principles of the two classes of cases are 
 confounded together in the judgment. Note that the learned 
 judge observes that the intention was " that the plaintiff en- 
 abled G. to sel the table-top as his own ; » and that his answer 
 to this IS that (changing over to ostensible agency) 
 
 JV^l '^r^'''" '' "^' ""' of authority or agency at all. 
 Admittedly there was no agency; and as there was no appear- 
 
 1(1894) 1Q.B. 89. nnnH„„f * ^ 
 
 Ch. 122. m which the question was sSee this disti action treated of 
 whether Stark was estopped by his ante, ch. XVIL ' 
 
486 
 
 OSTENSIBLE AOENOT. 
 
 ance of agency there could be no estoppel by ostensible au- 
 thority. There was, however, an appearance of ownership, 
 lor which the plaintiff was responsible, and, with deference, 
 he should have been estopped upon that ground. 
 
 Obsei ve the distinction between ostensible ownership and 
 agency. Were I to allow my watch to appear amongst the stock 
 in a jewelry shop, the proprietor of the establishment would be 
 the ostensible owner of my watch, and I would certainly be 
 estopped by its sale. But if I were to send my goods to an 
 auction-room, the auctioneer would bo the ostensible agent for 
 the purpose of selling them in the usual way, and ostensible 
 agency would be the ground of estoppel. Lord Ellen borough's 
 language applies to the latter case : 
 
 "If the principal send his commodity to a place where it is the ordinary 
 business of the person to whom it m consigned to sell, it must be intended 
 that the commodity was sent thither for the purpose of sale. If the owner 
 of 11 liorse send it to a repository of sale, can it be implied that he has sent 
 it thither for any other purpose than that of sale? Or if one send goods 
 to an auction-room, can it b^' supposed that he sent them thither merely 
 for safe custody? When the commodity is sent in such a way, and to 
 such a place, as to exhibit an apptirent purpose of sale, the principal will 
 be bound and the purchaser safe."i 
 
 . Distinguish carefully this statement of the law from that of 
 
 Blackburn, J., in Cole v. North Western Bank? If a furnished 
 
 bouse be rented to an auctioneer, and he surreptitiously remove 
 
 the furniture to his auction-rooms and sell it there, the owner 
 
 would not be estopped. But the case would be very different 
 
 if the owner himself sent his furniture to the auction-rooms 
 
 (if only for the purpose of enabling the auctioneer to present 
 
 the appearance of doing large business), and with the strictest 
 
 instructions not to sell. 
 
 Two noteworthy cases are cited below in which there was 
 
 4> 
 
 held not to have been ostensible agenc}^ although upon cursory 
 glance it might have been thought otherwise.' 
 
 (2) Estop^pel as to Metent of Agency. — This second class in- 
 cludes all those cases in which, admittedly, there is some agency, 
 and the question is as to the extent of it. The agent not hav- 
 ing had authority to do this particular thing, is the principal 
 nevertheless, by permitted appearance of authority, estopped 
 
 » Pickering v. Busk (1812), 15 East, 
 43. See authorities cited with this 
 
 'Re Consort Deep Level Gold 
 Mines (1897), 1 Ch. 575; B6 L. J. Ch. 
 
 All /< c>i\n\ ^ At\ 
 
 »(1874) L. R 9 G P. 470; 10 id. 854; N. Y. 618; 44 N. E. R. 111. 
 48 L. J. C. P. 194; 44 id. 233. 
 
raiNCIPAI. iHD AGENT. 
 
 4S7 
 
 from denying its existence. This question, too can be an 
 .wero<Iw,thout reference to single o? multit^dino'us^Llce ' 
 
 in^, ?* -7 " I' "'''"'™' ''""■'^■•' "'« «»toppel ha. nothl 
 ing to do witli suoli a question. He says- ■ 
 
 ..n^^,"' T^ """ ""^ "'■'"' ''■'y " ■""" """V not by misrepre- 
 sentafon be estopped to dispute extent of agency aT well I 
 
 nrealityh.. wo pbases of the same question ? Itagencvex- 
 «ts as to a cTt.,,. act, the extent of the agency mnst LTI' 
 
 ^ the lav ^t pr:„c.pal and agent that I am bound if I per- 
 r. ^/f ' .'" "''P'" '" ""^ "■•8«'' P"''^" than he mlTy 
 
 "i^: r;r ii: '"- -' ■"' — - - — -"^ 
 
 11° H-T.r'^'' ^ "" ""' '"•'"'' '<»• ""« «»=<>•> that the person 
 
 JMS, b^ estoppel, I am precluded from saying that his power 
 was not sufflcently extensive. Lord Crlnworth's IIZZ 
 that, m order to affix liability to a principal, you 
 
 from disputing it" » ^^' '^"** ^'^^ principal is estopped 
 
 In other words, you must prove agency and extent of agency 
 Ly fact "" ^'^™°^" "'°'''''" ""=' «' Preclulon £ 
 
 (3) £,101^1, in What Cme^f- 1„ gene^i ^^^ ^ y 
 endeavor to indicate the circumstances under which a p„„o7 
 pal w.h « estopped when his agent has exceeded his authTr^y 
 
 Hz A ''?'"f ' '"'"'^" ^'^ P^i^^ally and directly mislTd 
 the third party, there is of course no dilBculty. ButSf^ 
 «ome questions arise where, from the character of the emplov- 
 ment of the agent or other circumstances, certain deducUot 
 
 ^ »0n Estoppel (5th ed.), 565, 668. 
 And see yages 457 and 503, n. ' iao 
 Mn/<^p,48a 
 
 •Pole V. Leask fl8fl8>. hs t. j nu 
 
488 
 
 OSTENSIBLE AGENCY. 
 
 or assumptions are drawn by the third party, and we have tO' 
 inquire whether such inferences were sufficiently well founded 
 to have justified action upon them by the estoppel-asserter and 
 consequent estoppel of the principal. 
 
 General Proposition. — At the outset this general proposi- 
 tion is worth noting: that in cases in which the law assumes 
 (from the nature of the duty to be performed, from the rela- 
 tion of the parties, or from aught else) the existence of certain 
 powers, the public will be justified in making a similar assump- 
 tion. 
 
 Medium Powers. — 'Authority will be implied by the law, and 
 may be assumed by the public, in the following cases: 
 
 A. When an agent is employed to perform a certain duty, 
 he has the power to do those things usually incidental to the 
 discharge of such duty. 
 
 B. When an agent is employed to act in a certain capacity,, 
 he has the power which persons acting in that capacity usually 
 have. * 
 
 C. When an agont is employed to act in the line of a certain 
 business, he has the power usually exercised in that business. 
 
 D. When an agent is employed to act in a certain place, he 
 has the power which persons doing such things, at such place,, 
 usually have. 
 
 E. When an agent is employed to act under certain circum- 
 stances, he has the power which persons acting under such cir- 
 cumstances usually have. 
 
 F. When agency arises as incidental to some other legal re- 
 lationship, the agent has the power which persons in such rela- 
 tionship usually have. 
 
 It is not pretended that these rules are framed according to 
 scientific ideul. Indeed, by such standard, they are open to the 
 criticism that class E. includes all the others, or might easily 
 be made to do so. For practical purposes, however, and at all 
 events in exposition of the subject, they will prove useful; for 
 it will be found that the vast majority of the cases range thera- 
 f^alves into classes represented by these rules. A few of the 
 authorities to support them are as follows: 
 
 Pul A. 
 
 " An authority of this nature (to pay debt«, etc.) necessarily inchicle» 
 medium povcrs which are not expressed. By medium powers I mean all 
 
PBINCIPAL AND AGENT. 
 
 480 
 
 aeo"bS%"fXrrfnSp^SrwVr^x"^^^^ accomplishment of 
 
 Rules B. and C. i ! 
 
 •elf ,, acquainted »ith the rules by wbM, Ker7a5e governed ■>« " 
 
 Mule D? 
 
 ..„ "^[*^® principal sends his commodity tea place where if W +!,« «,./« 
 
 %^'zx .Sarsijstt aviiL-tr? Srtfer.^^u! 
 
 A principal gave power to insurance brokers at Liverpool to 
 write policies « not exceeding £100 for any one vessel » The 
 brokers underwrote a policv for £150. Liability now depends 
 upon whether, at Liverpool, brokers generally^have or have 
 not unhmited authority as to amount. If thev have then there 
 was appearance of authority to underwrite the £150 policy 
 and the principal is estopped. Fi-om the evidence it appeared 
 that at Liverpool "in almost all cases, if not in all, a limit is 
 put on the amount for which a broker can sign his principal's 
 
 name.' 
 
 In Liverpool, therefore, there could be nothing to in- 
 
 1 Howard v. Baillie (1796), 2 H. Bl. 
 Oia And see Dingle v. Hare (1859), 
 7 C. B. N. S. 154; 29 L. J. C. P. 143; 
 Wheeler v. McGuire (1888), 86 Ala. 
 898; Montgomery v. Hardaway 
 (1894), 104 Ala. 100; 16 a R. 29; Van 
 Dusen v. Jungleblut (1899), 77 N. W. 
 R. (Minn.) 970. 
 
 * Sutton V, Latham (1889), 10 Ad. «fc 
 K 30; 8 L. J. Q. B. 210. And see 
 Taylor v. Stray (1857), 2 C. B. N. S. 
 193; 26 L. J. 0. P. 185; Mollett v. 
 Robinson (r?0), L. R. 5 C. P. 646 ; L. 
 R. 7 C. P. ' i; L. R. 7 H. L. 803; 89 L. 
 J. C. P. -!*0; 41 id. 65; Harrison v. 
 Kansas, m Mo. App. 832; Heath v. 
 Stoddard (1898), 91 Me. 499; 40 Atl. 
 R.547. 
 
 9 Pickering v. Busk (1813), 15 East, 
 88. And see among its many confir- 
 mations: Meggy V. Imperial (1878). 
 
 •j> '^'. u. u. m; ii U o. \4. Li. 1I»; 48 
 
 L. J. Q. B. 54; Lausatt v. Lippincott 
 (1831), 6 Serg. & R. (Pa) 892; Towle 
 
 V. Leavitt (1851), 28 N. H. 858; Taylor 
 V. Pope (1868). 45 Cold (Tenn.) 416; 
 Lewenberg v. Hayes (1897), 91 Me. 
 104; 39 Atl. R. 469; Atlanta v. Hunt 
 (1897), 100 Tenn. 94; 43 S. W. R. 483; 
 Heath v. Stoddard (1898), 91 Me. 499; 
 40 Atl. R. 547; Van Dusen v. Jun- 
 gleblut (1899), 77 N. W. R. (Minn.) 
 970. ' 
 
 *Bayliflfe v. Butterworth (1847), 1 
 Ex. 429; Bailey v. Bensley (1877), 87 
 111. 556. The usage must of course 
 be reasonable. Mollett v. Robinson 
 (1870). L. R. 5 C. P. 640; 7 id. 84; L. 
 R. 7 H. L. 802; 89 L. J. C. P. 290; 41 
 id. 65. And see Ireland v. Living- 
 stone (1866), L. R. 2 Q. B. 107; 36 L. 
 J. Q. B. 60; Pickert v. Marston, 68 
 Wis. 465; 42 N. W. R. 550; Western 
 V, Page (1896), 94 Wis. 251; 68 N. W. 
 R. 1008; Herring v, Skaggs (1878). 63 
 Ala. 186; Keese v. Bates (1897), 94 Va. 
 831; 26S. E.R.865. 
 
dicate that the agency was other than what it really was, and 
 the principal could not be estopped.^ 
 
 The fact that the agent is employed to operate at a place 
 distant from the principal has often much bearing upon the 
 appearance of the extent of his authority.* 
 
 Rule K 
 
 " This is the common and usual manner in which the business is done, 
 and the agent must be taken to be vested with power to trans ict the busi- 
 ness with wliich be is intrusted in the common and usual manner."^ 
 
 Jiule F. 
 
 " One partner, by virtue of that relation, is constituted a general agent 
 for another as to all matters within the scope of the partnership dealings, 
 and has communicated to him, by virtue of that relation, all authorities 
 necessary for carrying on the partnership business, and all such as are 
 usually exercised by partners in that business in which they are engaged."* 
 
 Medium Poioers Withhdd — Estoppel. — As has already been 
 pointed out, the law assumes the grant of medium or usual 
 powers in the various cases just treated of. But this assump- 
 tion is, of course, only made in the absence of special arrange- 
 ment between the principal and agent to the contrary. What- 
 ever the arrangement is, by that they must be bound. The 
 public, too, is entitled to assume the grant of similar powers; 
 the agent is acting as though he had such powers ; and the 
 public assumes that he has them. If he has not .' In such case 
 the law of agency declares that the principal cannot be bound ; 
 for, as Mr. Dicey told us: 
 
 " The principal is always bound by the acts of the agent, up to the ex- 
 tent of the agent's authority, and is never bound beyond the extent of that 
 authority." 
 
 But it is precisely at this point that the law of estoppel in- 
 tervenes — the law which prohibits the princi ai asserting the 
 fact that the power of the agent is other than that which he 
 has allowed it to appear to be. 
 
 The following are some of the statements of the rules which 
 apply to such cases. It will be observed that they are not 
 
 iBaines v. Ewing (1866), L. R. 1 
 Ex. 320; 4 R & C. 611; 85 L. J. Ex. 
 194. 
 
 2Rathburn v. Snow (1890), 123 N. 
 Y. 848; 25 N. K R 879. 
 
 * Alexander v. Gibson, 2 Camp. 555. 
 And see also Smith v. Hull (1849), 
 « G R 668: 19 L. J. C. P. 1?S: Taun- 
 ton V. Royal (1864), 2 H. & M. 135; 33 
 L. J. Cb. 406: Ex parte Dixon (1876), 
 
 4 Ch. D. 183; 46 L. J. Bk, 20; Atty. 
 Gen. V. Great Eastern (1880), 5 App. 
 Cas. 478; 49 L. J. Ch. 545; McMul- 
 len V. Williams (1880), 5 Ont. App. 
 518; Hayner v. Churchill (1888), 29 
 Ma App. 676; Cawthorn v. Lusk 
 (1892). 97 Ala. 674; 118. R. 731. 
 
 * Hawken v. Bourne (1841); 8 M= & 
 W. 710; 10 L. J. Ex. 861. 
 
' couched in the language of the law of estoppel, but it is a sim- 
 pie matter to make the necessary translation • 
 
 <le;iwiih'p?o?e^ThlS7h'ets"^^^^^^^^ belie'ving he may safely 
 
 led by the act of t^he true owne?."i ' ^ *'*° "''^^ *^*' *>« ^a« ^^^ 
 
 He may show that he was misled by the appearance of the 
 
 character of the authority. The rule as to this is expressed in 
 
 TnTpn'^r' ^I'^^^^ff^'^^'^'i^ the leading cLe. In it 
 liOrd Ellen borough said : 
 
 between a priucipal and his brok^^^ ^av pass 
 
 assume the appaSSht of Sosin^lf nr^^^^^^ ^^l:^"""^^ *"°^^^r *" 
 Of trad^t mS?t be .retll.'l^'IS! llS^'i^^^^^^^^^ 
 
 In more modern cases it is said : 
 
 And the American law is to the same effect- 
 
 8it2rthTi°ptsl'^'5'?rdL;fn?uIV°*' P'^^^*^ ^" ^««°*>» «»«h a 
 son from denying IgenPtSrufhidt;."*?^^'' "' ''«*'"^* ^"'"^ ^'^''"^ P- 
 
 parent agency." « peisons lo trust and act upon such ap- 
 
 It Will be observed that in none of these rules is there anv 
 reference to the distinction between general and special agency 
 And there is no suggestion that they would not apply equally 
 in an mdividual as in multitudinous instances. 
 
 Applioatioks. 
 
 Having now a sufficiently clear idea of the principles and 
 methods to be employed in determining questions of liability 
 of pnncipals for ulira vires acts of other persons, let us apply 
 
 1 Cole V. Northwestern (1875), L. R. 
 10 C. P. 872; 44 L. J. C. P. 238. 
 
 »(1812) 15 East, 4& 
 
 " Cole V. Northwestern (1875), L. R. 
 10 C. F. 864; 44 L. J. C. P. 233. 
 
 < National v. Wilson (1880), 6 Add. 
 Cas. 309. 
 
 •Johnson v. Investment Ca (1895), 
 46 Neb. 488; 64 N. W. R 1100. And 
 see Holt v. Schneider (1899), 77 N 
 W. R 108B (NeK). 
 
 « Thompson v. Shelton (1896), 49 
 Neb. 644; 68 N. W. R 1055. 
 
 ' 
 
492 
 
 0STJEN8IBLE AGENCV. 
 
 them to some of the cases usually placed in the category of 
 special agency — that is, cases of a single employment. If the 
 rules in present vogue as to the difference between general and 
 special agents are correct, the principal will of course never . 
 be liable, for (as we have seen), according to Broom's Common 
 
 Law, 
 
 "if a particular agent exceed his authority, his principal is not bound by 
 wliat lie does." ' 
 
 Aud according to Smith's Mercantile Law, 
 "the rule is directly the reverse concerning a particular agent; i e., an 
 agent employed in one single transaction; for it is the duty of the part/ 
 dealing with such an one to ascertain the extent of his authority; and if 
 he do not he must abide the consequences." 2 / 
 
 A ITorse Case.~The results to be arrived at, however, are| 
 far otherwise. "Take the case of a horse," which the owner 
 intrusts (on a single occasion) to an agent for sale, prohibiting 
 all warranty, and let the circumstances vary as follows : 1. The 
 agent is told to sell the horse at a fair. 2. The owner of the 
 horse is a horse-dealer. 3. The agent is a horse-dealer. 4. Neither 
 the owner, nor the agent, is ai' horse-dealer, and no particular 
 place of sale is prescribed. 
 
 Now, if the rule be that " it is the duty of the party dealing 
 with " an agent, employed in one single transaction, " to ascer- 
 tain the extent of his authority," then the owner is not bound 
 in any of these cases by the warranty. But the solution is not 
 so simple, and the varying answers will be found to be in no 
 way affected by the singleness or frequency of the transaction. 
 They are as follows: 
 
 1. Instructions to sell at a fair indicates a place at which the 
 authority is to be exercised ; if at that place (as has been held *) 
 it is customary in selling horses to give a warranty, then the 
 agent appears to have authority to warrant, and the owner 
 being responsible for that appearance is estopped from deny- 
 ing the actual existence of the power. If it is not usual at that 
 place to sell with a warranty, then there is no appearance of 
 po^ver and therefore no estoppel.* 
 
 49 tfc'T. N. S. 5d9. As to sale of horses 
 
 18th ed., 575. 
 
 210thed., UO. 
 
 3 In England. It is held otherwise 
 in the United States. 
 
 ^Aiexaudei' v. Gibson (iSii), 2 
 Camp. 555; Moran v. Pitt (1873). 42 71, § 3a 
 L. J. Q. B. 47; Brooks v. Hassal (1883), 
 
 at fairs see tne English Statutes,3 & 3 
 P. & M., eh. 7; 31 Eliz., ch, 12, which 
 are not interfered with by The Sale 
 oi uooas iicE, uo «. u< -^ IK. \i.iiiy.i, ■su. 
 
 
 1 
 t 
 f 
 
 1 
 
 s 
 
 C 
 
 E 
 
 5 
 
 U 
 
PEINOIPAL AND AGENT. 
 
 493 
 
 2. If. a horse-dealer (as has been held) usually sells with a 
 warranty, then an agent of a hor^e-dealer appeals to have au- 
 thority to warrant, and the hors. dealer will be estopped from 
 asserting the contrary. If it were not usual for a horse-dealer 
 to sell with a warranty, then there would be no appearance of 
 power and no estoppel.'' 
 
 3. So, also, if (as has been held) a horse-dealer in selling for 
 others usually gives a warranty, then, inasmuch as in the given 
 case he appears to have authority, the owner will be estopped 
 from denying the authority. And if not usual, there 16 no c> 
 toppel.'' 
 
 4. :f there are no circumstances indicating existence of au- 
 thority (such as place of operation, usual employment of the 
 parties, etc.), then, as the-e is no false appearance, there is no 
 reason why the owner should be ec-.pped from asserting the 
 facts.* ° 
 
 The Text Books.— Simple and necessarv as all this seems to 
 be, the present writer cannot but be aware that in so stating 
 the law he is out of harmony with most of the text-writers. 
 The views of some of them are as follows: 
 
 Evans on Principal and Agent, referring to Alexander v. 
 Gibson^ (m which it was held that when a horse was sent to a 
 fair and the usual mode of selling there was by giving a war- 
 ranty, the principal was bound by a warranty), indicates his 
 dissent from its conclusions, declaring that it 
 « C.Tn.' alJ^-r^""'^"* ^y *''^ ^°"'^' °^ Po'"'"^" P'eas: Brady v. Todd, 
 
 And the learned author might cite the language of Martin, 
 
 B., in Udell v. Atherion^ in support of the statement. Both' 
 
 however, overlooked the fact that Alexander v. Campbell was 
 
 the case of an agent sent to a fair, and that Bradi/ v. Todd, so 
 
 far from dissenting from that case, has these words: 
 
 li«him^^^.**'t H^^l^ '■^'''l ^^^ questif I , it will be time enoujrh ♦o decide the 
 liability created by such servant a:, . . . a person intru^l^d with the 
 sale of a horse in a fair or other public mart." »niiu...a witn the 
 
 1 Fenn v. Harrison (1790X 8 T. R. 
 780. 
 
 2 Howard v. Sheward (1866), L. R. 3 
 C. P. 151; 36 L. J. C. P. 43; Baldry v. 
 liates (1885), 63 L. T. N. 8. «5>0; Mc- 
 Mullen V. Williams (1880), 5 Ont. App. 
 518; Taylor v. Gardiner (1892), 8 
 Man. 810. 
 
 3 Brady v. Todd (1861), 9 C. B 
 593; 30 L. J. C. P. 223. 
 * Supra. 
 6 P. 467. 
 
 6(1861)7H. & N. 172; 80 L. J. Ex. 
 8J7. 
 
494 
 
 OSrrENSIBLE AOENOT. 
 
 Story on Agenov has the following: 
 
 '" But if the owner of a horse should send the horse w a ftur by a stranger, 
 with express dlrtictions not to warrant him, an i tbi ?fitter th .jld oa the 
 sale, contrary to his orders, warrant him, the iivnev would /lOt bt- f»ound 
 by the warranty . " * 
 
 Everything depends, surely, upon whrs'. is us'iiil at tha par- 
 ticular fair. 
 Paley on Principal and Agent saj'-s: 
 
 "Soa servant int'i'sted to r.e * horse may warrant, unless forbidden. 
 And it is not necessa ,/ for the t: ^ ly insisting on the warranty to show- 
 that he had special uutixority tux tJiat purpose."' 
 
 This, with deference, is ver j ol( .irly \7 rong. 
 Smith': Mercantiio Law' says; 
 
 'And it 3 said a warranty given by an \gent iu vusted to sell, prima 
 facie hinds the principal." 
 
 TTuo'^r oertai'i circumstances, no doubt, yes; but under oth- 
 er?.. B'J.. 
 jfif:=dison im Contracts says: 
 
 • Ix, has been held that a buyer who takes a warranty from a known 
 agent professedly selling on behalf of his pi Jifcipal takes the warranty at 
 tha risk of being able to prove that theageni: ) id the principal's authority 
 for giving the warranty, and that the law fiithes a known servant in- 
 trusted to sell with no implied authority to waj • ant, unless such servant is 
 the general agent of a tradesman employed in t\ie business of buying and 
 selling."* 
 
 Later on the author adds: 
 
 " The servant of a horse-dealer, with express directions not to warranty 
 does warrant; the master is bound, because the servant, having a general 
 authority to sell, is in a condition to warrant, and the master had not noti- 
 fied to the world that the general authority is circumscribed." 
 
 The reason is not that the servant had " a general authority 
 to sell," for it was of "circumscribed" character, as the lan- 
 guage of the author indicates. The reason is that although the^ 
 servant had only special authority, the horse-dealer, for reasons 
 already given, was estopped from so saying. 
 
 Still later (at p. 560) the law is better stated: 
 
 "The general presumption is that where a principal intrusts property to- 
 an agent to sell, he authorizes him to make all such warranties as are usual 
 m the ordinary course of that particular business of selling, and that if it 
 is usual to sell with a warranty ho has an implied authority to warrant." 
 
 But the true point is missod. The effect of the presumption 
 
 is not that there is " an implied autho' to warrant," but that 
 
 19th i sec. 133. 
 
 >P. i;.' To the same effect is 
 Schuoharat v. Aliens (1863), 1 Wall. 
 (U. S.) 369. " Authority without re- 
 striction to an agent to sell carries 
 with it authority to warrant." This *9tL ^ , Mi. 
 
 (IrV,. 
 
 , ,y recently approved in Bel- 
 - Talbot (1899X 51 a W. R. 588^ 
 And see Bryant v. Moora 
 '*S Me. 34. 
 
 ^, cl^. 1481 
 
PEINOIPAL AND AGENT. 
 
 495 
 
 the principal is estopped from denying that there was express 
 authority. ^ 
 
 "The case of a horse" has been used for illustration. But 
 It must not be understood that the law with reference to horses 
 differs from the law as to goods of any other character.' For 
 variety consider for a moment the law under other circum- 
 stances. 
 
 Originally factors were those to whom goods were sent for 
 sale An owner, therefore, was bound by any sale made, whether 
 authorized or not«-or rather he was estopped from denyinfr 
 the plenary character of the power which the factor appeared 
 from his employment to have. It was held nevertheless that 
 the owner was not bound by a pledge made by the factor in 
 breach of instructions,' for it was thought that factors usually 
 sold merely and did not pledge. Afterwards the Factors Acts 
 recognized that it had 
 
 fo/Sre'tJmTi Idi^n'.T^.oTv?*'^"'"?^ for factors intrusted with goods 
 
 and therefore enacted that the owner should be bound by 
 pledges. Everything depends upon custom. The statutes pro- 
 ceed upon that. 
 
 And if it be asked whether a factor may bind his principal 
 by a warranty given in defiance of instructions, the answer to 
 that, too, is that everything depends upon custom and circum- 
 stance If from the custom or from any other circumstance 
 (for which the owner is responsible) an agent appears to have 
 certain authority, the owner is estopped from denying its actual 
 existence. All cases ought to proceed upon the same principle. 
 
 iMechem on Agency, § 350, says: 824; 3 id. 33; 47 L. J. C. P. 341- War- 
 
 cut no satisfactory reason is per- -- . ' 
 
 ceived why the question of the war- 
 ranty of a horse should stand upon 
 any different basis than the war- 
 ranty of any other chattel." For its 
 application to pianos see McMullen 
 V. Williams (1880), 5 Ont. App. 518, 
 
 2 See statute 4 Geo. IV., ch. 8a 
 
 3Paterson v. Tash (1742), 3 Str. 
 1178; Fletcher v. Heath (1827), 7 B. 
 & C. 517; Cole v. N, W. Bank (1875), 
 L. R, 10 C. P. 367; 44 L. J. C. P. 288; 
 Johnson v. Credit (1877), 3 C. P. D. 
 
 ner v. Martin (1850), 11 How. (U. S.) 
 678; Berry v. W. D. Allan & Co. 
 (1894), 59 111. App. 149. 
 
 *5 & 6 Vic. (Imp.), ch. 39. See 
 Fuentes v, Montis (1868), L. R. 3 
 C. P. 277; 88 L. J. C. P. 93; London 
 V. Simmons (1893), A. C. 217; 61 L. J. 
 Ch. 730. And see Cartwright v. 
 Wilherding (1862), 24 N. Y. 521; 
 Soltau V. Qerdau (1890), 119 N. y! 
 380; 33 N. E. R. 864; Fourth Nat. 
 Bank v. American (1890), 187 U. S. 
 384. 
 
496 
 
 08TKNSIDLE AGENCY. 
 
 III. "For the Master's Benefit." 
 
 The third of the " difficulties" referred to in the opening sen- 
 tence of the present chapter is the current misunderstanding as 
 to the effect upon an unauthorized act of its having been done 
 " for the master's benefit." This difficulty can be removed by a 
 little careful analysis. 
 
 Let us commence with the case of Mutual v. Charnwood: * 
 A secretary' of a company represented that certain debenture 
 stock of the company existed ; the representation Avas false, for 
 the stock had been fraudulently issued by the secretary for his 
 own purposes and in excess of the powers of the company; and 
 the representation was therefore made not for the benefit of 
 the company, but to shield the secretary ; held, that the com- 
 pany was not liable in deceit. Lord Esher decided the case 
 upon the following ground : 
 
 "The secretary was held out by the defendants ns a person to answer 
 such questions as those put to him, . . . and if he had answered them 
 falsely on behalf of the defendants, he being then authorized by them to 
 give answer for them, it may be that they would be liable. But,' although 
 what the secretary said related to the matters about which he was author- 
 ized to give answer, he did not make the statements for the defendants, (nit 
 for himself." 
 
 Compare this with the decision in Shaw v. Port Phillip: * 
 The secretary of a company, not being intrusted with the seal, 
 
 1(1887) 18 Q. B. D. 714; 56 L. J. Q. 
 B. 449. See Barwick v. English J. S. 
 Bank (1867), L, R. 8 Ex. 259; 36 L. J. 
 Ex. 147; Thorne v. Heard (1894), 1 
 Ch. 611; 63 L. J. Ch. 363; Erb v. G. W. 
 Ry., 3 Out App. 479, 480; Molson's 
 Bank v. Brockville (1880), 81 U. C. C. 
 P. 174: Gibbons v. Wilson (1889), 17 
 Ont 290; Richards v. Bank of Nova 
 Scotia (1896), 26 S. C. Can. 381; and 
 the decision of the Privy Council in 
 McKay v. Commercial Bank (1874), 
 L. R. 5 P. C. 394; 43 L. J. P. C. 31, 
 where is expressly reserved the ques- 
 tion whetherthe absence of benefit 
 would have varied the result. 
 
 8(1884) 13 Q. B. D. 108; and see 53 
 L. J. Q. B. 372. Distinguish the 
 contemporaneous case of Northern 
 Couhties v. Whipp (1884), 26 Ch. D. 
 457; 53 L. J. Cri. 635, where the com 
 pany was not estopped by the act of 
 
 its manager, because he had no au- 
 thority to fi -J the class of acts of 
 which the instance in question was 
 one. See also Re Overend (1869), L, 
 R 4 Ch. 475; 89 L. J. Ch. 27; Bryant 
 V. La Banque (1893). A. C. 170; 63 L. 
 J. P. C. 68; Re Building, etc. (1896). 
 
 1 Ch. 100; 65 L. J. Ch. 104; Bigger- 
 staff V. Rowatts (1896), 8 Ch. 93; 65 
 L. J. Ch. 536; Re Concessions (1896), 
 
 2 Ch. 757; 65 L. J. Ch. 909; Robinson 
 V. Montgomery (1896), 2 Ch. 841; 65 
 L. J. Ch. 915; Smith v. Walkerville 
 (1896), 83 Ont. App. 102. 
 
 The American cases agree with 
 Shaw V. Port Phillip: Fifth Avenue 
 Bank v. Forty Pecond (1802). 83 
 Hun, 629; 17 N. Y. Supp. 826; 137 N. 
 Y. 231; 33 N. E. R. 378; Allen v. 
 South Boston (1889), 150 Mass. 200; 
 22 N. E. R. 917; Union Loan v. .South- 
 ern California (1892), 61 Fed. R 840. 
 
PHINCIPAL AND AGENT 
 
 • 407 
 
 got possession ofitnnrioffl^ i-. 
 
 'orged also the 4.Uu:T:1:7ZT'T'' '"''■''''"'"' 
 >"g entirely for his own benefit Th ,""°"- ^« '^"^ ««■ 
 faith of the certificate and tht '' "* "'"»'' "P™ ">e 
 
 topped. "' """^ ">« """-I'sny was held to be es! 
 
 ^omes from tSl'ePrf fil"'^° ^"^ '"'orm'hhnse Kvhifi°'"^u'^''«* '•« has 
 but I do nnV «lt ^«cretary, because l)e eetaitrt whether the certificatB 
 
 can «orh?„nhe°o^?Si''^ *.° an/pSc i/S ZrTo^r'^^^^^^ 
 whether the signature off hi '/"^ ascertain for himsPlfLl''"^'"^^^ ^e 
 fore, that the cornnln^V^® '^""^'-•tor >s Kenuine j^f^'^such matters as 
 <)ffloial duty, to ac"K,o}f ''^ authorized the "ecreta P^^l*" *° "^^' t''eie. 
 
 Bor:rSp--^^ 
 
 «» tbi, far In ° e„t hi: 17 '"r"""™- ^"^ *"« «« we 
 Pri"oipal, but thai give, bimno"";;!^ *" '" H "='''^'° »«' '- "■' 
 he does the same .hf„;: '™s ow'n beWf ." "" "!' P^-P"' » 
 the principal onght to be liable ml; i^' therefore, whether ' 
 agent was acting for the p S, T"^ """ '^ '"'»"«" ">e 
 the second case°takes„7CZ/ L!' °' '»'''« O"--. But 
 ««ent appears to be act n» i„ ° ' ^««*"' "■»« " ■« an 
 
 not for himself, it wo^'^ "„ /„ --- "^ ^ia authority and 
 wuh him by that which wL Zl °.^ ' ""^ P'-*" ^«ali„g 
 to which he could obtain ri'Sa.L''^''™-'''^'', """ "^ 
 serve that in the first case tbTZ T . ^"^ "''«» '''e oh- 
 defendants as a per^onTauterTu^onT '* "»' "^ ""« 
 t° h,m;" and in answerin., thTm h °« ^ T"' *' """^ P« 
 the authority with whichVe h^d h?'''^r'^ '° ''' «'=«'-°"'W 
 the two decisions are inconsrste^?. , """"'^- "" '««' '"a! 
 held upon the ground that 1 "'''"""^ "=' ^^■> be up- 
 other because if proc^^ed'oreir "f ? '° "«=«''• »"" the 
 here, or is one o? the cal; wro„„1 ""*'■ "^ ""« " '^'^"■"'"o- 
 
 peuXr.fj:x'7Crhr^'-"-^-- -p. 
 
 the unauthorized act of .TZn/ ?!^'°f ' P.""'"'^' "»•"« for 
 
 »?-t appea^d to have autforL "hrtthri"''"'-^''^ """ "■« 
 
 "my, that the principal was re- 
 
 -St'oZLl^^™!.'?.™''' "-"% or „er, „,. ......... 
 
 that A ^ ^ "" '"trusted v 
 that duty: Hill v.Jewett (1891), 
 
 82 
 
 164 R.848. 
 
 158; 15 Fed. R. 14,. is 2 
 
49S 
 
 OSTENSIBLE AOENCT. 
 
 sponsible for that appearance; that upon the faith of that 
 appear. . >• 'langed your position; and that therefore the 
 pri (pal of^b: to bo estopped. Nothing of that sort can be 
 said la tort. An omnibus driver, in defiance of instructions, - 
 overturns a rival omnibus,' or runs over a pedestrian, ana the 
 master is liable; but not because the party injured changed his 
 position upon the faith of «.ny appearance of authority. In 
 estoppel you say 1' -. j^ou were r^isled; that you acted upon 
 the misrepresentation, and so were injured. In tort you say 
 merely that you were injured. In estoppel you acted volu ta- 
 rily; and seek notwithstanding that to put the responsibility 
 elsewhere. Tn tort you were acted upon. 
 
 The cases then are very different, and we must expect to find 
 some difference between them as to the ground of liability of 
 the employer. In tort, inasmuch as nothing can turn upon 
 appearance of authority, everything must depend upon whether 
 the agent was reall} acting for his master's benefit or for his 
 own — in other words, whetW he was acti^* in the course ^f 
 his employment or outside of it. But in estoppel the contrai r 
 IS the case. There appearance of authority is the sine qua no, 
 and the reality is unimportant, for the fact is exoludod by the 
 estoppel. 
 In tort, then, .-^e may say with Willes, J. : ' 
 " A person wno puts another in his place to do a class of acts in his ab- 
 sence necessarily leaves } m to determine, according to the circumstances 
 that • ise, wiien an act that class is to be done, and trusts him for the 
 man. in w' ^h it is > e; and c nsequently he is held answerable for 
 the wijug of the person so intrusted, either in the manner f doing such 
 an act or in doing such an act under circumstances in whu it ought not 
 to have been done: provided that what was done was done not from any 
 i price i ; 9 servant, bu- in the cour<^^? of his employment. 
 
 In esioppel, on tho other hand, it is immaterial that the 
 agent was really acting for himself aiid in fraud of his princi- 
 pal, if the agent had t>r appealed to havo the authority; or 
 appeared to be wr acting within the uuthorii / which he 
 
 had. j^stoppel j vi that 
 
 •' Whenever the v»,iy act > f the agent is authorized by the terms of the 
 power . . . such act is binding on the r stituent as to all persons 
 dealing in good faith with the agent; such persons are not bound to in- 
 quire into facts aliunde," 8 
 
 1 Limpus V. London (1862), 1 H. & 
 C. 526; 32 L. J. Ex. 35. 
 
 ^Bayleyv.' Manchester (1872), Li. K. 
 . C. P. 420; and see 43 L. J. C. P. 78. 
 See per Bramwell, L. J., in Weir v. 
 
 Bell (1878). 3 Ex. D. 245; 47 L. J. Ex. 
 708; Barwiok v. English (1867), L. R. 
 
 li liiX. viVJi SO 1m VI £<3l. ittt 
 
 * Infra. 
 
PKINCIPAL AND AGENT. 495 
 
 Consider the partnership cases -the firm is lmhl« „n«n 
 
 «rS„f r '' "■' '■'''^■""•■" — ^'™ ^e n- 7t 
 Hrm but for his own purposes. Could it be said (as in the 
 
 £r,tuh Mutual v. Charnv,ood case) that there , "s ,„ 1 ahm,; 
 
 dd n^td^il-ffo^Jfl /rT"^ '" '* ""'"'^ »°. y«' """he 
 aia not do it for the defendants, but for himself?" 
 
 J^tT T°r of principals being liable, although the 
 agent was not only not acting for their benefl , but in fraud 
 
 cou^e of M "r" ''°'™''"'- ^"^ '"' "■" "O' ««" g i" the 
 retary m » a 5„toA Mulml v. Chanwood case 
 
 althour:'.!'""' 'I'" * P""'='P"' »»y "e liable in estoppel 
 although the agent was acting for himself, and not ',r his 
 mas te^s be,.eflt, but that it is otherwise in tort The^^L; 
 
 n -.ff case therefore is unimpeachable. How Tldi 
 SrUxth Mutual v.Charnmoodf w s mas 
 
 AllZt-. •" '"'"'"' "' ''"=""• ^"'"s "-erefore (as usuallv 
 ckssifled) m tort- and we have said that in tort the com- 
 pU..nt « not that you were misled; that you conseouentrv 
 changed your position; and so were injured! but merTy thu 
 you were injured. But have we not generalized too wWeM 
 Is It rue that in deceit the case is mcrelv that you rereT 
 jured J Not at all. Upon the contrary, the necjary fa tors 
 
 " es ir r"" ^ ""•" "'"'" '" '"""^ '» "" »---^ 
 
 L fstr ^ * "^^presentation, (2) change of position, 
 to bid ?i k", Z™*"! I- "••■"expect, then, deceit seem; ■ 
 
 liie: to;':c? "^ °' ^ ' "'' =""■ '" •"' ^'-'^ 
 
 And it approaches contract also in this: that there is in the 
 
 con^Ser», "^? '^ P"""™ ^™»"=»S very much akin to a 
 cons deration. I represent .o a merchant that A. is a man of 
 substance; upon the faith of that representati, n the merchant 
 gives A. credit and suffers damage; and considerate "may as 
 weU be detriment to the promisee as benefit to the piomisorl 
 be mere, ant has therefc, , given some sort of coLiderali, 
 for ny rupresentation. If, in consideration of the merchant 
 
 »'f«l;^'' Z !k* '"" '"■'• ' "'' ''■ '"■»P'«' "1»- Deceit and EslopMl- 
 •i"eru» in this couoection the ch. XVl. ™>«'ppei. 
 
«00 
 
 08TES81BLK AOENOT. 
 
 giving credit to A., I had guarantied hits solvency there would 
 have been a clear contract. It is not very far from that to this: 
 I represent to you that A. is solvent; and if, upon the faith of 
 that fttatf'ment, you trust him and lose, the law will compel me 
 to pay y uur loss — remember, I do not guarantee to pay, it is 
 the law that will make me pay. There is an express promise in 
 the one case; while in the other the law compels payment just 
 as though there were an express promise. This is often called 
 an implied p^'omise. "Note also that in deceit there is (as in con- 
 tract) the eicjent of voluntary action, the responsibility for 
 which, however, you desire to place elsewhere; and that in this 
 respect also it ditfers from other torts. 
 
 The action in contract is: In consideration of the plaintiff 
 doing so-and-so, the defendant promised so-and-so. In deceit it 
 i»: The defendant, by falsely representing so-and-so, induced 
 the plaintiff to do so-and-so. The essentials are somewhat the 
 same, namely: (1) an inducement by the defendant to action 
 on the part of the plaintiff; and (2) some change of position on 
 the part of the plaintiff. 
 
 On the other hand, claims in other actions of tort run in these 
 forms: " That the defendant wrongfully converted," eto. ; " that 
 the defendant disregarding his duty," etc.; "that the defend- 
 ant 80 negligently carried that," eto. The action, in other words, 
 arises ex parte^ as it were, and not from mutual interaction, as 
 in contract and deceit. 
 
 Admitting then the general rale that in tort the principal is 
 oiot liable for th« unauthorized act of \m agent unless it is done, 
 not for liimaelf, but for his master; but observing that in es- 
 toppel appearance of acting for the master is sufficient to make 
 him liable, what ii to be said with reference to actions of de- 
 ceit? Are they for this purpose to be classed with actions of 
 tort or to be placed with their clos^ affiliations? To the {Mres- 
 ent writer's mind (somewhat filled, as at present it is, with the 
 principle of egtoppel) the answer cac.not be doubtful. In the 
 Sritiih MutvM v. Chamwood case 
 
 '■the secretaiy waa held out by the defencUmte as a pe«8on to aAsvor such 
 questions as toose put to him; " 
 
 he did answer them, and ans* ^^red falsely; and it is said that 
 
 the defendants are not liable in deceit, because "he did not 
 
 make the statement for the defendants^ but for himself." 3ut 
 
PHLfOIPAL A!iD AOXKT. 
 
 AOl 
 
 
 the secretary had authority to do the class of acts; and his act 
 appeared to be within that class; » and the defendarits ought 
 to have been estopped from denying that the act was theirs.' 
 
 IV. « Within the Scope op His ApPAREsrr Authobitt." 
 
 Elucidation must now be directe(« to another phrase con- 
 atantly met with in the law of principal and agent : namely, that 
 an agent 8 unauthorized acts will bind his principal where such 
 acts are "withm the ocope of his apparent authority." This 
 is difficulty number four. ^ 
 
 Let us drop the word "scope," for it is useless and mislead- 
 ing. It IS sufficient to say that the agent acted within or be- 
 yond his authority. Inserting the word "scope" adds noth- 
 ing to the expression, for an act cannot be beyond authority 
 and yet within the scope or extent of it. Omitting the word 
 we have the statement that if an agent act within his appar-' 
 ent authority (within the authority which he appears to have -- 
 withm his ostensible authority) the principal wifl be bound 
 This IS true; but it is also true (although it is not usually so 
 formulated) that if an agent appears to be acting within his 
 authority, the principal will be bound. Let these alternatives 
 be put in the following form, and denominated (A.) and (B )• 
 and let us test their value: 
 
 (A.) If an agent acts within what appears to be his author- 
 ity, the principal is bound. 
 
 (B.) If an agent appears to be acting within his authority 
 the principal is bound.' ''* 
 
 . fi'-?^*'««f''^'2/'U.).-^ I employ a broker to sell my shares' 
 m the market, giving him special instructions which limit his 
 usual powers; he sells in disregard of my instructions; and I 
 am bound.* Observe that the reason is because he was acting 
 within what appeared to be his authority (A.). And it cannot 
 be said that he appeared to be acting within his real author- 
 ity (B.), for his real authority was unknown. 
 
 iSee this point elaborated in the 3 it would bo more correct of 
 
 present chapter. orincinal U Pat^nrm^ t j-__..-.. 
 
 =»Barwick v. English (1867). L. R. 3 ihat he is bo'unl"™ """" "^^"''"'^ 
 
 Ex. 266: 86 L. J. Ex. 147, bears out *Ante, p. 489. 
 the conclusion. 
 
502 
 
 OSTENSIBLE AOENOT. 
 
 Application of (B.).— I take a check to a bank for accept- 
 ance; the ledger-keeper has no authority to accept unless there 
 are funds; nevertheless, in the absence of funds he does ac- 
 cept; and the bank is bound. The reason is that the ledger- 
 keeper appeared to be acting within his authority (B.). It can- 
 not be said that he \ras acting within what appeared to be his 
 authority (A.); for I. did not imagine that he had authority to 
 accept if there was nothing at the check-drawer's credit. There 
 was no appearance of authority that did not corrrespond to 
 the fact (A.). But so far as I could see, the ledger-keeper was 
 acting within his authority (B.). 
 
 In other words, in the (A.) case the question is whether the 
 act is really within the ostensible authority ; and in the (B.) 
 case whether it appears to be within the real authority. There 
 may be appearance as to the extent of the real authority (A.); 
 and appearance as to the act being within the real author- 
 ity (B.) — appearance in relation to the authority (A.); and 
 appearance in relation to the' act (B.). 
 
 "Class of Acts." — This distinction is of peculiar assistance in 
 dealing with those very various cases in which p,n agent is in- 
 trusted with authority to perform a certain " class of acts," and 
 in which he does an act which appears to be within the class — 
 as, for example, the case of the bank ledger-keeper just referred 
 to. Had it been appreciated, it is probable that the cases af- 
 fected by it would present more uniformity than can be pred- 
 icated of them. 
 
 In some departments of the law the operation of the distinc- 
 •tion, if not the distinction itself, is very apparent. Observe 
 first the law of partnership. Each partner is usually intrusted 
 with the performance of a class of acts; amongst other things, 
 to accept bills for the purposes of the firm, ^ow, suppose that 
 a partner accepts a bill in the firm's name, but for his own pur- 
 poses; is the firm liable? May it not be said that he had no 
 power to bind the firm by such an acceptance ? He had author- 
 ity to accept for firm purposes; everybody knew that his au- 
 thority was thus limited ; should not everybody interested hai'e 
 inquired whether this particular instance of the class to which 
 it belonged was within his authority? The true answer and 
 its reason have just been stated. The act appeared to be within 
 the accepting partner's authority (B.), and his copartners are 
 therefore estopped. 
 
PEINCIPAL AND AGENT. 
 
 603 
 
 A good example of the same doctrine is presented by the 
 
 bu .ness had power to draw bills upon B. & S. for advances ia 
 respect of purchases made on account of that firm. The ao-ent 
 ^rew upon B. & S. for an amount which had not been, but which 
 he asserted to theni had been, advanced for purchases on their 
 account and received the money. The principal was held to 
 be bound to repay the amount to B. & S. The act appeared 
 to be within the authority (B.). "Ppearea 
 
 Montaignao v. Shitta^ was somewhat similar. It related to 
 powers of borrowing to be exercised under certain circum- 
 stances. In giving judgment Lord Herschell said • 
 
 ^vo';fi ha:e°be'etrro?;;Sy*intrnr^^^^^^^ his borrowing powers 
 
 means as these, th^en ?heX SrShim do noTEk"?.^ *^' ?''''°"''a*^ *" «"«»» 
 the lender to inouire wh^Vw ir! *u ?• ,'°'^ ^' ^^^ incumbent upon 
 
 arisen or not.' "^ whether m the particular case the emergency tad 
 
 In an American case " it was contended without much success 
 that the authority of an agent to sell goods was limited to sales 
 to persons who were '^ responsible and in first-class credit," and 
 that contracts, therefore, with persons of other character were 
 not binding upon the principal. In another case* an agent's 
 purchase of unripe cabbages was repudiated (but unsuccessfully) 
 because his authority was to purchase those only which were 
 quite mature. 
 
 The law applicable to such cases cannot be better put than 
 in the following extract from a judgment by Finch, J. It sug- 
 gests some better phraseology than that associated with a " class 
 oi acts: " 
 
 prindi?hrsTth^edti"a7en?^^ '" *'"^ «*^*^' ^^-^ -here a 
 
 Ihis language is very applicable to the case (already referred 
 to) of a bank ledger-keeper "marking" a check. It may be 
 
 1 (1877) 8 App. Caa 106; 47 L. J. P. 
 O. 18. • 
 
 2(1890) 15 App, Gas, P(i3. 
 
 SMerrimac v. Illinois (1888), 80 HI. 
 
 xiPp. iua; ci. i>. r» ii. ,«7, 
 
 * Baker ,v, Barnett (1897), 118 Mich. 
 538; 71 N. W. R. 866. 
 
 6 Bank of Batavia v. New York Ry 
 Co. (1887), 106 N. Y. 199. And see 
 Bank of New York v. American, etc. 
 Co. (1894), 148 N. Y. 568: 88 N. E. R. 
 
 ?ia . - 
 
604 
 
 OSTENSIBLE AGENCY. 
 
 EiU'jtr \p:4'^t» 
 
 said that that officer's authority extends only to cases in which 
 there are funds of the drawer on hand. But this is an "ex- 
 trinsic fact, necessarily and peculiarly within the knowledge " 
 of the ledger-keeper. In a very instructive judgment concern- 
 ing such a case Selden, J., said: 
 
 "The bank selects its teller, and places him in a position of great re- 
 K'Soh^- Pf ''""^''^^'"S ?P *P'°^ '"hi« selection are obliged to deal 
 Z L n 1 5nH^ "^""^il ''""• "' therefore, while acting in the business of 
 the bank and withm the scope of his employment, as far as is known or 
 
 tion onl'h?n^/.^" r*i:'!"^*"g rl^^ '^'™' h« *« ^"*»ty of a misreprernta- 
 tion, ought not the bank to be held responsible? " i f — 
 
 "It IS, I think, a sound rule that where the party dealing with an aeent 
 
 ^n r.^'«vH*f' "'f •**r* *^" *«*^ °^"^« «g^°* corresponds in every partiJSar! 
 wifh^thL f*° ^^'"ch such party has or is presume'd to have any knowledge; 
 with the terms of the power, he may take the representation of the agenb 
 as to any extrinsic fact which rests peculiarly within the knowledge of 
 tlilacTdoue"undt!"t."2 ascertained by a comparison of the power with 
 
 Making reference to Attwood v. Mxmnings^ and Alexander 
 V. MoKemie* the learned judge added: 
 
 wif'J/lf/^^^f.'fi P"°^'P'e laid down in such cases is in perfect accordance 
 Twn in Jtr •'^'L^. expressed. It is simply that where*^an agent accepts 
 a bill m a form which imports that he acts by virtue of a special power 
 any person taking the bill is bound to inquire into, and is chargeabi? wUh 
 knowledge of, the terms of the power, fhis is not denied. But the q^es. 
 ,-i A'%'^^'''"' ""u"^ inqu'nng into the terms of the power, and ascertain- 
 ing as far as can be done by comparison that the act of the agent is within 
 the power, he is chargeable without proof with a knowledge of extrinsio 
 tacts which show the act to be unauthorized ? " ^ exirinsio 
 
 Applying that rule to the case in hand the learned judge said : 
 "It is conceded that every one taking the checks in question would b& 
 presumed to kno,,, that the teller hal no authority to certify wrthout 
 ;«?« to ^"V^i- l^noS:'e^Ke alone would not apprise him that the certifi- 
 cate was defective. To discover that he must not only have notice of the 
 
 K .* °i" ""^T *5^ ^°'T^ °^ *'ie *«'l"'' ^"t °^ the extrinsic fact that the 
 So rLl "h Z"?'^^' ^V** *^ *° ^^'^ extrinsic fact, which he cannot justly 
 be presumed to know, he luay act upon the representations of the agent. 
 There IS a plam distinction between the terms of a power, and fact* 
 ?rrrlf-T»?*?"'°'!f "A°" ^^'«hthe right to exercise tlVe authority con- 
 £Lli f^*^ 'depend. One who deals with an agent has no right to con- 
 fide m the representations of the agent as to the extent of Kis powers. 
 U^; fV »n regard to the extrinsic fact, whether the bank had funds or 
 
 not, the case is aifJerent. This is a fact which a stranger who takes I 
 knowing »» ^ ''*""°' ^^ supposed to havl any means of 
 
 1 Farmers' & M. Bank v. The Butch- 
 ers' & D. Bank (1857), 16 N. Y. 133. 
 The passage has been quoted with 
 approval in the United States Su- 
 preme Court. Merchants' Bank v. 
 State Bank (1870), 10 Wall 648. 
 
 2 Id., p. 135. 
 
 3 (1827) 7 B. & C, 278; 1 Man. A; Rv. 
 66; 6 L. J. K B. 0. S. 9. 
 
 * (1848) 6 C. B. 766; 18 L, J. C. P. 94. 
 
 "See also Exchange Bank v. Peo- 
 ple's Bank (1887), 23 Can. L. J. 891 
 (S. C. Can.); North River Bank v. 
 Ayraar (1848), 8 Hill, 263; New York. 
 V. National (1872), 50 N. Y. 575. But 
 see Murray v. Eagle Bank (1845), 5(V 
 
 Maaa QfUk 
 
PKINCIPAL AND AGENT. 
 
 6^ 
 
 TTn^fr/ir. ^^/^\^^^^bere presented was carried from the 
 United States to the Province of Quebec; and, upon appeal 
 from the court there, was adopted by the Judicial Commmee 
 of the Privy Counci],» where it was said : 
 
 power the act in itsel ffs warranted bvt^h J iL^^^"' "^'^^ '[^« ^°'ds of the 
 on the constituent as to aTl persons dJJinl fn™^ Ti^'.f^ ^^ .«<^* '» Ending 
 3uch persons are not bound to nSuire in?l TJi^^V-""'^} ^'^^u *'>« «g«°tl 
 authority is the real authority.' "? ^^^ ahtmde. The apparent 
 
 ^armain v. Hopper^ is in another department of the law and 
 a t ough not so professing, in reality proceeds upon thTpnn 
 ciple in hand. Plaintiff's attorney directed a sheriff to seize 
 goods which turned out not to be the goods of the defendant 
 The p aintiff repudiated the act of the attorney, asserting that 
 he had no authority to direct the seizure of anybody's Lods 
 but those of the debtor. Tindal, 0. J., said . "^ ^ ' ^°°'" 
 
 giyint^al^I^ln^V^J^X^^^^^^ be h,.^ ..ent in 
 
 act the client must stand the cSquence if he af mL"*? *^^ P?,"'^""'^'' 
 norantly, as in Parsons v. LloydT^i?. s/i «hff .'*'^''®''*®""y O"" ^^^ 
 maintainable against the clienf fm- n^„=.- "^^'r, ^''^/e trespass was held 
 under a writ which was af/p.w«rH<. f "«'"?, ^^f plaintiif to be arrested 
 nrguedinthat^tSsSSZt^ofth/wHf ^°^'r?»la^ty. It was 
 the attorney; that he had no? Ven retaSed t^sl^'o ?.' """?f -^'"t^ «^t «« 
 ular wr t; and that it was thprp*v,r/^«f. •*! • ?,"® °"* * ^^'^ or an irreg- 
 But it was f^miTdXT^^'^v'lQTS'^l *'^%^T« °^ »'>« authoritf. 
 act of his client.' and by GouH J thai' • the nMnHff«^^*'}^ S""'"«y '« ^^^e 
 a more skilful and diligent attornev-forfl^ I Z'^fu^"'** '^^^^ employed 
 of law is the act of the^party his clfen? » ^''' °^ *^^ *"°'"'^"y '° PO'°t 
 The attorney did not act within his apparent authority (A ) 
 for his apparent authority did not differ from his real author-' 
 
 V m ^ ^'\^}^^^:^^'^ wear to be acting within his author- 
 ity (Jj.), and the client was liable. 
 
 So also whore a manager of a bank made a representation 
 (fa se to his knowledge) as to the credit of R., and upon the 
 faith of the representation the plaintiff advanced money, the 
 bank was held to be liable. ^ '- - ■ 
 
 For although it was not within 
 
 * Bryant t. La Banque du Peuple 
 (1893). A. C. 180; 63 K J. R C. 78. 
 
 2(1887)S7N. Y. 323. 
 
 *This last sentence is incorrect; 
 subotituting dM it does our (A.) for our 
 (B.) cafif.'. The apparent authority 
 (in tLa cases alluded „o) is as a mat- 
 
 ter of fact always the real authority, 
 and requirts no assumption or prin- 
 ciples of law to make it so. That 
 the act is appnrently withiM ths*. 
 authority (B.; is the point intended] 
 ni843) M, & G. 850; 13L,J.C.P. 
 
506 
 
 OSTENSIBLE A.GENOT. 
 
 the manager's authority to make false representations as to 
 credit, yet to a person not aware of the falsity he appeared to 
 be acting within his authority (B.). Upon appeal the decision 
 was reversed, but upon other grounds.^ 
 
 In a somewhat similar case ^ a bank manager by misrepre- 
 sentation induced the plaintiffs to accept bills of exchange in 
 which the bank was interested. Held^ that the bank was lia- 
 ble in deceit, and the language of a prior judgment' is quoted 
 with approval: 
 
 "In all these cases it may be said, as it was said here, that the master 
 had not authorized the act. It is true he has not authorized the particular 
 act, but he has put the agent in his place to do that class of acts, and he 
 must be answerable for the manner in which the agent ! conducted 
 himself in doing the business which was the act of the m:i -er to place 
 him in." 
 
 This language, however, is not satisfactory ; for may it not 
 be said that the question is bogged when it is asserted that the 
 agent had authority to perform the class of acts in question? — 
 the fact being that he had no power to do the particular act. 
 In truth are not the statements contradictory? If the partic- 
 ular act belongs to a class, and if there was authority to per- 
 form all the acts in that class, there was, of course, necessarily 
 power to do the particular act — but ex hypothesi there was 
 not.* This difficulty is avoided by using the better phraseology 
 employed by Finch, J., already quoted.* 
 
 The foregoing review shows very clearly the widely extended 
 operation of the (B.) principle; and seems to demonstrate that 
 it merely requires to be formulated in order to be accepted. 
 For lack of earlier formulation and the consequent grouping 
 together under a recognized principle of the seemingly very 
 diverse oases <-o which it is applicable, one set of them (shortly 
 to be mentioned) has somewhat rigidly (in England and Canada) 
 established itself in opposition to the general trend. These 
 cases may, however, be searched in vain for any attempt at 
 
 1 Swift V. Winterbotham (1873), L. 
 R 8 Q. B. 244; L. It 9 Q. B. 301; 42 
 L. J. Q. R 111; 43 id. 56. See, how- 
 ever, British v. Charnwood (1887), 18 
 q. B, D. 717; 56 L. J. Q. B. 449, per 
 Bowen, L. J. 
 
 3 McKay v. Commercial Bank 
 <1874), u B. 6 P. a 4i0; 4a L. J. P. C. 
 
 \ 
 
 SBarwick v. English (1867), L. II. 2 
 Ex. 266; 36 I. J. Ex. 147. 
 
 *This reminds one very muoh of 
 the obvious criticism of the sy 1 logisni 
 as a form of reasoning, namely, that 
 when the conclusion arrived at is 
 correct, it is always already con- 
 tamed in the premises. 
 
 ^Ante, p, 503. 
 
PKINCIPAL AND AGENT. 
 
 607 
 
 inose with which we have been dealing 
 Before passing to them let it be remarked that not the least 
 
 n t™: Tth': ': i^r" '""^ " "'""^ p-'p*- <-' ''■o -o« 
 
 ically referred to one phrase -" within the scope of his anoarent 
 bihty of principals m disputed cases. Hitherto it has somt 
 
 crscfonVthl 1 " '"' ""''"■"^■■y P""'*^'; '»' ''^ «-ere 
 
 Zr h„f "'"."'»'•? ?T ™''y "^y "^'^ '» "''iot it did not 
 T!l r, '" "'""'^ "'"™ ""S''' '» l'^ 'iaWiity; and for 
 
 ha it i! n "V"''- ''''' P''^^°* ™'- ™°'"^^ to ho^e 
 tnat It IS now otherwise. *^ 
 
 thril-Tr ''''"'''°" ''"^* '° ^^^^"^ "^ ^ °^«-^ -i«- of 
 
 curitvn; '''.'"^^ ^""''^ *" ^"'•^"^^ ^^'000 »Pon the 'se- 
 
 curity of some of its stock; its broker fraudulently applied 
 
 to a banker for £0,000, who agreed to make the loan upon re- 
 
 S 000 tn th '"''^''^ °^''''' ^'""^ ''^^ '^^"^^^^ ^"d paid over 
 £3,000 to the company; the banker knew that the brokei was 
 an agent. Who is to lose -the company or the banker Z 
 answer we say that the real authority was to borrow £3,000; 
 that the transaction had no appearance of being within that 
 real authority (B.), and there was no appearance^of any other 
 authority than that actually conferred (i!). We must then say 
 
 norUn'i.TT^ "Tf ^' '°""^ ""y '""^ unauthorized act; 
 nor can it be estopped from saying that it was unauthorized. 
 A recent case, nevertheless, contradicts this conclusion •» 
 
 erV.minnis K *facVS. °"h/^?„ ^''''^^"."f P''^^^"* *° »^'« (the'bank- 
 pr.:iJ.^r.torepresentthem" ^ ® coaipany deliberately put Power into a 
 
 BU ^.hat is what everybody does who employs an agent; and 
 e.to.rel arise, only when the principal plits^in ag^t ^to a 
 l^^uion to misrepresent him -enables him either to present 
 cheappearance of having greater power than he really has (A) 
 or to make the ac^i appear to be within his real authority (B) 
 
 It this ouclusionis wronff the nresent. iv^r - '^' 
 
 rrong 
 
 nr iii a : 
 
 » Robinson v. Montgomeryshire (1891), 3 CI). 841; 65 L. J. Ch. did 
 
503 
 
 08TEN'8IBJ:,E AGBNOr. 
 
 have the satisfaction of knowing that the case brings destruc- 
 tion to those also who insist that in the case of 
 "an agent enaployed in one single transaction ... it is the duty of 
 tl.e mrty dealing with such an one to ascertain the scope of his authority;- 
 and u he do not, he must abide the consequences." » 
 
 Bills of Lading.— We are now ready to approach the law 
 with reference to unauthorized bills of lading; but we are hardly- 
 prepared for the very exceptional results which have been ar- 
 rived at in that department of the law. The problem is this: 
 The master of a ship, or the freight agent of a railway com- 
 pany, signs and issues a bill of lading for goods which have 
 not been shipped; it was part of his duty to sign bills of lading 
 for goods shipped, but he had no power to sign if the goods 
 were not shipped; the HU is transferred to a holder in due 
 course; are the ship-owners liable upon the bill? 
 
 Acceptance of the conclusions already arrived at would seem 
 
 to leave little room for hesitation as to the answer to be given. 
 
 It is but another example of the (B.) cases, namely, those in 
 
 which the agent appears to be acting within his authority— a 
 
 case in which 
 
 ;'a principal has clothed his agent with power to do an act upon the ex- 
 istence of some extrinsic fact necessarily and peculiarly within the knowl- 
 edge of the agent; "2 ' 
 
 and it 
 
 " was not incumbent ... to inquire whether in the particular case the 
 emergency had arLsen or not." * 
 
 The authorities nevertheless are to the contrary eflfect, and 
 determine that the carriers are not liable. No general survey 
 of the law is, however, attempted; and the reasons advanced 
 are out of harmony with the cases above quoted, and appear to 
 the writer to be fallacious. A short review and discussion of 
 them will aid in the understanding of the general application 
 of the principles of estoppel; and may perhaps be not without 
 some benefit in clearing the particular subject of wme of its 
 difficulties. Let us look at the two principi*! decisions: 
 
 (1851) Grant v. Norway} This is the leading case on the sub- 
 ject. The master of a ship gave a bill of lading for goods not 
 
 » Ante, p. 493. 
 
 ^Ante, p. 503. 
 
 s^nfe, p. 503. 
 
 * 10 C. B, 688; 20 L, J. Q. P. 98. See 
 aiso iiie earlier case of Howard v. 
 Tucker (1881), 1 B. & Ad. 713; 9 L. J. 
 
 K B. O. a 103; and the later ones, 
 Hubbersty v. Ward (1853), 8 Ex. 830; 
 23 L. J, Ex. 113; McLean v, Fleming 
 (1871), L. R. 2 H. L. Sc. 128; Brown v. 
 Jfowell (1875), L. R 10 C. P. 562; 44 
 L. J. C. P. 289; Cox t. Bj-Uce (1888), 
 
PBINOIPAL AND AGENT. 
 
 609 
 
 t7'J , ^^ ™ ^'''^''''^ ^^ *^« P'^^"tiflf ; the jury found 
 that, "by the custom of merchants, bills of lading are commonlv 
 pledged and deposited by the holders with oth'ers asTe^ur^^ 
 
 were enabled to pledge and deposit the said bill 
 
 be justified in assuminrthat hfh,fd «„/L. •^'l'"^-^^ mdorsement wouia 
 the goods were on board or no Uthen^niV^ "^" """'i ^"'«' whether 
 general practice of shipmasters ii La!^Jju i**"® "^*«^ °^ t^ade and the 
 rives no authority fn^m KSit o.^/« S"^ 1°°^° *^''' *he master de! 
 as f the party taking ^iebHre lading Cf nn';.**"' ?"' ^^^ ^^ considered 
 of the authority; and in that Pai« „nL i * "i^'^'l® °^ ^" express limitation 
 the owner by a^biiroHadiSg signed when'fi^« ^' could not.claim to bind 
 were never shipped," * ^ ^®° ^'^^ 8oo<*» therein mentioned 
 
 The master did not act within his apparent authority (A Y 
 
 Sg'dep^a^Tt'h'^aU'^^^ «gn a bill of 
 
 fact on w&ich the Powlr depended Snn. shipping of the goods. If the 
 €xist."2 ^^' aepenaed did not exist the authority could not 
 
 The data of the problem are that the master had no author- 
 
 ty to sign a bill of lading unless the goods were shipped a and 
 
 that he did sign although the goods were not shipped There 
 
 unlei'th" "'•'' ''"^'^"' *'^^ ^^^ — « --0 be bound 
 If low th'^ ''' '" T' ""^ ^^'"PP^^ '^'^ «^o-i"g the fac s 
 
 ng authority to sign when no goods were delivered- whether 
 this signing was within his apparent authority (A.) ? the answer 
 
 18 Q. B. D. 447; 56 L. J. Q. p. isi- 
 Thorman v. Burt (1888), 54 1* T. N. S.' 
 349; Porter on Bills of Lading. §S 167, 
 180, 438; Travis on Sales, vol. II, 
 pp. 8-39. The point seems to have 
 been overlooked in Coventry v G E. 
 Ry. Co. (1888), 11 Q. a D. 776; 53 L. J. 
 Q. B, 694. The statute (18 & 19 Vic. 
 (Imp.), oh. 111. § 3) rendering bills of 
 iad:.ig wondusive evidence of ship- 
 ment "against the master or other 
 person signing the same " does not 
 
 aflfect the question under discussion 
 Jessel V. Bath (1867), L. R. 2 Ex. 267- 
 86 L. J. Ex. 149; Brown v. Powell 
 (1875), L. R. 10 C. P. 563; 44 L. J. C P 
 389. 
 
 '(1877) 43 U. C. Q. R90;30Ont, 
 App. 446: 5 S. C. Can. 179. See also 
 Oliver V. G. W. R. Co. (1877), 38 U C 
 C. P. 143. 
 
 2 5 8. C. Can. 189. 
 
 'If he had cadil quceatio. See 18 
 & 19 Vic. (Imp.), eh. Ill, §a 
 
 ^" ! 
 
 ■ t 
 
510 
 
 OSTENSIBLE AGENOT. 
 
 must still be in the negative, and there can be no estoppel. 
 A sentence from the case' is indisputable: 
 
 "Be this as it nia^, it cannot be doubted that every person in business 
 who deals with a railway company knows that in the ordinary and usual' 
 course of business no such receipts and bills of lading are ever given or 
 issued unless the goods have been actually received to be shipped; and no- 
 body so dealing but must know that if a freight agent, discharging the 
 ordinary duties of a freight agent, did give or issue such receipts and bill* 
 of lading without the goods having been delivered, he would oe acting in 
 direct opposition to his duty and in fraud of his principals." 
 
 Undoubtedly so. But every person "knows that in the ordi- 
 nary and usual course of business " a partner who uses the firm 
 name for his own purposes " would be acting in direct opposi- 
 tion to his duty, and in fraud of his principals;" nevertheless 
 the f rm is liable. 
 
 Every one knows, too, that a bank ledger-keeper is " ac<^ing 
 in direct opposition to his duty" if he mark a check for b 
 there are no funds; but yet the bank is liable. 
 
 There must be some general principle which will apply to 
 cases in which a partner bind^ the firm although acting for his 
 own benefit; in which an attorney binds his client although 
 he makes grievous blunders quite unwarranted by his instruc- 
 tions ; in which an agent, having power to borrow money for 
 his firm under certain circumstances, borrows in their absence; 
 in which an agent, having authority to give receipts, issues one 
 without observing certain specified prerequisites; and many 
 other analogous cases. For such cases may we not say that 
 it is 
 
 "a sound rule that, where the party dealing with an agent has ascertained 
 that the act of the agent corresponds in every particular, in regard to 
 which such party has or is presumed to have any knowledge, with the 
 terms of the power, he may take the representation of the agent as to any 
 extrinsic fact which rests peculiarly within tho knowledge of the agent 
 and which cannot be ascertained by a comparison of the power with the 
 act done under it."* 
 
 " For, seeing somebody must be a loser by this deceit, it is more reason- 
 able that he that employs and puts a trust and confidence in the deceiver 
 should be a loser, than a stranger."* 
 
 Or, in other words: "If an agent appears to be acting within 
 
 his authority (B.), the principal is bound." If this rule be 
 
 valid, then the decisions which declare that carriers are not 
 
 liable to transferees of bills of lading for goods not put on 
 
 board cannot be maintained. 
 
 An American writer agrees that such a holding is, at all 
 
 »5aC. Can. 194 
 ' Ante, p. 504. 
 
 >Per Holt, C. J., in Hern v. Nichols 
 (1713), 1 Salk. 289. 
 
PMNOIPAl AND AGENT. gll 
 
 events, "most consonant with reason and instice-"' h„t .r 
 thong. .„any of the anthorities in his countn have ' ran- I 
 themselves upon that side of the ooestion > v„,?i. ^ 
 
 others which hold the other vD °''' ^ "' "'^™ "^ """"y 
 fPP^orance of Authority.- Kn interesting point connected 
 with the appearance of authority was raised in r„i^.r 
 m^rn Bank.' Suppose that the owero goods tndsf::^ 
 to a person who carries on two businesses, thfof a facto an" 
 
 r^aphtit^^^^^^^^^ 
 
 opp°ed°rL'h?°7^^ ^'"> -" """'o "■"'»••"'»% e »: 
 £^port^s:rirherni:r:ir-— ^^^^^^^^^^^^^^ 
 
 rorTth?:wrr"2ru:;rrs:id'/^^^^--"^^^^^ 
 
 busin''^Js:^a7iScL"„iTl!fis^ir^^^^^^^ l? *« ^-r^- — - -the 
 being m fact an auctioneer but t never wal IhT^^' "^''^.^^^ furniture, 
 uot be intended to be enacted, that^f he c^vrio5.^°"J'"°'? '*^' a"^ could 
 tion room and there sold it he nnn IH ^!^nf ^** ^'l® furniture to his auc- 
 chaser than if he. as auctiorlee? acted fnr ^^'' ""^ ^^"^"^ ""» on the par- 
 ted u similar larceny as a SSt bailpn^^'^r *'"*°' ^^° ^omnS- 
 present case, that a warehoSian or wh^fe "*"■' t? '"''"^ "^arer to the 
 with the custody of goods if hehannpn^ri ^*°^®'' '^''o*^ s»«h is intrusted 
 can give a better titfe by kale of S? Zl ?h *" "^l^""^ *^« ^'""^^ of « factor, 
 -trusted to some otherUlVo^i^l'^f ^^Ce^^pX^J^^^ '-en 
 
 1 Mechem on Agency, g 717. 
 
 2 Wichita v. Atchison (1878), 20 
 Kan. 519; Sioux v. First Nat. Bank 
 (1880), 10 Neb. 556; 7 N. W. R SH- 
 Brooke v. New York (1885)," 108 Pa! 
 St. 529; Bank of Batavia v. New 
 York (1887), 106 N. Y. 195; 18 N. E. 
 R. 433; Smith v. Missouri (1897), 74 
 
 (1885). 93 N. C. 43; National v. Chi- 
 cago (1890), 44 Minn. 234; 46 N W 
 R. 342, 560. See Porter on Bills of 
 Lading, ch. 31. 
 
 ..VTi,^^^^'^- ^705^0 id. 354; 
 43L.J.C P.194;44L. J.C.P.233. 
 aee also Johnson v. Credit (1877) L 
 
 R. 3 C. P. 334; 3 id. 33; 47 L: J. a p] 
 
 Mo. App. 48; American, etc. v. Mad- 241 
 dc.Ml899), 36 C. C. App. 42; 93 Fed. .'Ante, p. 489. 
 
 »Th; Freeman v. Buckingham o3'^ii'''"'7^-^i"g(1809),SCamp. 
 (1855), 18 How T- s^ -^, n « ' ^^ explained in Pickering v 
 
 ana v. Laveillo (1873), 52 Mo. 3b0- 
 Baltimore v. Wilkins a87;». 44 Ind.' 
 11; Hunt v. MississipDi n87?V 9« Lp 
 Ann. 446; Witzler v."Coi ios (W 
 70 Me. 290; Pollard v. Vin..;u (1881) 
 105 U. S. 7; Williams v. Wilmington 
 
 W. Bank (1874), L. R 9 C. P 47o' 10 
 
 jd.354;44L.J.C.P.888;Fuentesv. 
 Montis (1868). L. R. 3 C. P. 277; 87 
 
 • h -J. v. r. 137. 
 
 23^^^ lOO. P. 869;44L.J.ap. 
 
512 
 
 OSTENSIBLE AOENOT. 
 
 As to the relative negligence of the jart cs the learned judge 
 added : 
 
 "But if the plaintiffs linew that the warehouseman whom they trusted 
 was also a wool broker, the defendants were aware that the wool broker" 
 whom thejr trusted was a warehouseman; an' there seems no reason why. 
 without inquiring, they should think he wai, intrusted in one caDaritv 
 rather than the other." ^ ' 
 
 The decision was approved in the House of Lords in Oiti/ 
 Bank v. Barrlow} 
 
 1 (1880) 5 App. Cas. 677. See also 
 Sheffield v. London (1886), \Z App. 
 Cas. 338; 57 L. J. Ch. 086; Cooke v. 
 Eshelly (1887), 13 App. Cas. 271; 56 
 L. J. Q. B. 605; Baker v. Nottingham 
 (1891), 60 L. J. Q. B. 542; Simmons v. 
 London (1891), 1 Ch. 270; 60 L. J. Ch. 
 
 813; (1892) A. C. 201; 61 L J. Ch. 728 
 Towle V. Leavitt (1351), 23 N. H. 8R0 
 Tripp V. Martin (1891), 45 Kan. T65 
 26 Pao. R 424; H.i nliu v. Abell 
 (1893), 120 Mo. 188; 25 & W. R 516; 
 Baxter v. Sherman (1808), 73 Minn. 
 434; 76 N. \V. R 211. 
 
CHAPTER XXVir. 
 
 OSTENSIBLE AGENCY -PARTNERSHIP 
 
 TOI^^^^^^^^^^^^ \T:r', ''^ eircu^staoces under wS 
 aw of mrL?v ? i^"" °^ "''^PP'^ commences where the 
 aw of partnership ends. It treats of cases in which, admittedly 
 
 t ore was no partnership; and declares that, under suh and' 
 ch circumstances, the defendant' is estopped from say "nt 
 
 ^bat he was not a partner- that he is liable !l though he were^ 
 
 Jelat^onofFstoJ>J^el to Partnership and Ageney.^^CZ^, 
 with reference to the liability of promoters of companies mu! 
 trate very clearly the relation of estoppel to Z^Z^Z 
 agency. In such cases liability mayTrise il^Ztllt 
 A) Promoters may be engaged in making prelimlrv ar' 
 rangements, .. g., obtaining the charter, adferL g etT fn 
 «uch cases there is usually no partnership. The qutt^n for 
 decision IS either one of agency or of estop^l - I^eney if rea 
 authority IS alleged; and estoppel where the defeS is not 
 
 the person alleReS to Ja partner 0?^^''" *' P"°°'P«^ «"d ^^^ the 
 
 ''It is usual. L doubtTspeak of eS VJ""'' '°f k*'' ^'"^ '' ''^ 
 
 a partner as an agent of the firm «Tf^' ^« ^*« «a>d ^y Jessel, M. R. : 
 (53 & 54 Vic. (ImpTch sots fl^ ^^ ^0" ^annot «rasp the notion of 
 
 Via (Man.), ch. 24.^^^; Ba^b!; l Van I ^"'''*' !" '^*^ ^"'' *^« A^'"' ^hen 
 
 Horn (1894 , 54 Kan 33 80 pJp ^ u '^ '■"^"^"'* *° *»''«-' t^at inas- 
 
 1070); but that is not quite correct aTdt ":."'. '^^^l ^'"^ '°^ '"'"^^'^ 
 
 although the method of expreS ten^H'?/"' ?' *''^"«' *° *"« «" 
 
 has its advantages, and is 21^^ Zl^ ' *'*' '"^ ^'^^ ^^'^^^ »>« 
 
 of in the present work Whe„ an ZLt'him?"hl' *"' '"^ ^''^^ ""^ 
 ut'u an you get him to be an agent for the 
 
 individual acts as such, his action is 
 of course his own. When he acts as 
 
 a member of a firm fh«. o««. .• ^ 
 
 his, but that of the firm. He is not 
 in such case an agent of the firm — 
 for he cannot be agent for himself. 
 
 other partners, but onJy in that way. 
 because you must insist upon ignor- 
 ing the existence of the firm as a 
 separate entity." Pooley v. Driver 
 (1876), U R 6 Ch. D. 476; 4C L. J. Ch. 
 469. 
 
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514 
 
 08TKMSIBLB AQEMCT. 
 
 a promoter, but, having held himself out as snch, U estopped 
 from saying that he was not one. Lake v. Argyll ' was a case 
 of this latter kind; but the judgment does not draw a clear line. , 
 (B) The promoters may be carrying on business to which it is 
 intended the company shall succeed. Liability, in such oases, 
 is frequently based upon partnership. Estoppel arises where 
 the person sought to be charged is not a promoter or partner, 
 but has been held out to be such.' 
 
 The following case ' shows the necessity for carefully dis- 
 tinguishing between agency and estoppel : A man for a con- 
 sideration gave to two other persons " leave, license and liberty 
 to use his name in their firm, and for all and every the busi- 
 ness purposes of said firm," stipulating, however, that he was 
 not to be a partner. A creditor, who had known nothing of 
 the man or the arrangement, sued him as a member of the firm, 
 and succeeded upon a rule which had been suggested in Par- 
 sons on Partnership: * 
 
 "Where one is held forth to the world as a partner the first question is, 
 was he so held out by his own authority, assent or connivance, or by his 
 negligence. If by his authority, consent or connivance, the presumption 
 is absolute that he was so held out to every creditor or customer. If so 
 held out by his own negligence only, he should be held only to a cireditor 
 who bad l>een actually misled thereby." 
 
 . Mr. Parsons has wisely omitted this rule from a later edi- 
 tion of the book, although it had been thus judicially indorsed, 
 and declares that the decision which was founded upon it is 
 erroneous.' It is submitted, however, that the case may ' be up- 
 held upon another ground, namely, that of actual agency. For 
 the defendant having given authority to make contracts in his 
 name, he was by that law liable upon them. It is not a suffi- 
 cient reply that the contract was made in the name of the firm, 
 and that the defendant was not a member of the firm; for the 
 name was intended to include the defendant as well as the part- 
 ners. People may contract under any name they please to 
 adopt. The case is very like Brown v. Leonard,^ in which the 
 defendant told the plaintiff " that he had ceased to be a par^ 
 
 1 (1844) 6 Q. a 477. The later case 
 of Maddick v. Marshall (1864), 10 C. 
 B. N. a 887; 17 id. 820, is more satis- 
 factory. 
 
 'See Woodv. Argyll (1844), 6 Man. 
 & O. 028; 18 L. J. C. P. U6; Colling- 
 wood V. Blakley (1868), 15 U. B. N. 8. 
 14S. 
 
 * Poillon V. Secor (1875),61 N. Y. 486. 
 
 «8ded.,180. 
 
 s 4th ed., 104, n. 2. 
 
 *It depends upon the interpretop 
 tion of the document And see po$t, 
 p. 510 a. 
 
 7(1816) 2 Chitty, ISa Compare 
 Miles V. Furber (Ittttt), U ic V- B^ 
 77; 43 L. J. Q. a 4L 
 
PARTMEB8UIP. 
 
 110 
 
 ^e," aid bXX ^ill""' "" '° °^"''""'^ '^^ * -'- 
 
 ne;5rk"n;rtT;i%^^^ the diMolutlon of the part- 
 
 therefore mpoMible." ® wa. tolw continued and that he wli 
 
 1 
 
 DlVISIOW OF THE SlTBJBOT 
 
 topped f«.„ ;ot;i:/:rit:;!v "'" "" " """^ '»>««• 
 
 arm; «„d itT, aUe^l th^^T "" '" ''''°"'"° » "'«""«^ »' "-e 
 retirLent r^; bftl Tt?,"'"'''"'' '"•"■"'«"« »P "« 
 .-.0 orUa. „, ^hiohl"", haM^ ':;:r ""^ "^ *'''"''«' '"'° 
 
 Jution: """"""^ '" "«"'"«» -'" "" a™ Prio. to the di,- 
 (a) Persons who had snoh dealings. 
 (J; Persons who had no sooh dealings. 
 
 (a) Persons who had such knowledire. 
 
 (b) Persons who had no such knowledge. 
 
 cas^slrZ' flwsr^^^' "^^' ^^^"^""^ ^^^-^^ ^n these 
 1. There must have been a representation of pannershin 
 
 3. It must hare been made to the plaintiff. ' 
 
 4. Upon the faith of the reorpsflnfiifmn « . 
 
 been gi.en, which implied orroZt^tth. •'""t"'"'' 
 have been aware of Jrep^enS. " '"'"°"'' ""'^' 
 
 ft 
 
 1. A Repbesentatiow. 
 Premising that a representation may as well h« m-^ k 
 duct a. h, di«»t assertion, let dlstinXt'e'^nte:: 
 
 J, »Upon the general prinoiole nia«r Jn.„,.: ... 
 
 ^ne cited Jacobs v. Shorey flSm 48 A r'ili"'^" Z' ^"'*'^ ''^^*^' ^^ ^ 
 N. H. 100; Moore v. Harper (S 42 ffl' u r' ^* ^"^' <^^»2). 8 Q. R 
 
 APP. 671. Representntjon Ijeing a 
 
me 
 
 06TKM8IBLE ▲OBNOT. 
 
 (1) the case of a defendant who, as a matter of fact, never was 
 a member of the firm, and (2) the casg of a retired partner. 
 
 (1) Defendant Never Woe a Partner. — In this clara of casea 
 the representation is usually of some active character. The 
 defendant has asserted directly that he was a member, or some 
 one else with bis authority or connivance has so asserted, or 
 his conduct has been such as to produce that impression. There 
 is seldom much difficulty in these cases — they usually involve 
 questions of fact only.* The law is clearly stated in some of 
 the codiflcations: 
 
 "Every one who by wordi Bpok«n or written, or by ocnduot, represent* 
 nimselr, or who knowingly suffers himself to be represented, as a partner 
 in a particular firm, is liable as a partner to any one who has, on the faith 
 of such representation, Riven credit to the Arm, whether the repreuntation 
 has or has not been made or communicated to the person so giving credit 
 bv or with the knowledge of the apparent partner making the representa- 
 tion or suffering it to be made."' or 
 
 It may be noted, however, that a representation of an inten- 
 tion to become a member of a firm is no estoppel.' 
 
 (2) A Betired Partner. — Upon what ground may we say 
 that although a member of a firm retires from i*,, nevertheless 
 he may be liable upon its subsequent, contracts. Clearly noth- 
 ing but estoppel will suffice. For observe that the defendant 
 is not, as a matter of fact, a party to the contracts; yet he is 
 sued upon them, and when he pleads and proves iwn -"'-^umpait 
 he must succee<l but for estoppel. 
 
 But why should he be estopped ? What has he donc-f Usu- 
 ally he has done nothing, and is estopped because he ought to 
 have been active. He was aware that third persons might as- 
 sume that he was still a partner and might give credit upon 
 that assumption; he was under obligation as a member of 
 society " to observe in varying circumstances an appropriate 
 measure of prudence to avoid causing harm "to others;* it 
 was his "duty to be active; "• it Avas his "duty" to give ouch 
 
 question of fact, different juries may 
 come to different conclusions upon 
 the same facta. Wood ▼. Argyll 
 (1844), 6 Mao A Q. 988; 18 U J. C P. 
 98; Lake v. Argyll (1844). fl Q. R 477. 
 
 iSherrod ▼, Langdon (1808), 21 
 Iowa, 5181 
 
 >68 & S4 Via (Ima). oh. 89. tt 14 ll)i 
 60 Via (MaikX oh. H 8 14 (1). 
 
 •Bourne v. Freeth (1839), 9 E ft C. 
 7 L. J. K. a O. a 898; Reynell 
 V. Lewis (184ex 15 M. & W. 517; 16 
 L. J. Ex. 65. 
 
 « PoUooic Dn Torts (5th ed.X 82. 
 
 * Compare Ramsden v. Dyson (1866). 
 L. E 1 H. U 141. 
 
PABTNBR8HIP. 
 
 61T 
 
 The reason for the classification above gueffested will nnn, 
 
 «,ldlT"r^'' '' "!*"' '^" P"''»«''« withdrawal goods were 
 •old to the firm, and the vendor sued the retired m«m h J T 
 leging that the usual notices had not been XeT^it ruld'ot 
 
 the constitation of the fi.m, and had no dealings with i nr/ 
 V.OUS to the dissolution; and was not thereTrf ,^- led L t' 
 
 tin °'?rV''' ^'^ '' '''' ^^"^^^ ^'^^ known of the consfitu 
 tion of he firm, or (2) if he had had dealings with it ^befot 
 dissolution of coo«e), the retired member wfuld be 1 aWe - f 
 he had not given the customary not k^. '^ 
 
 Distinguish between these two grounds Ohsfirco ♦!,„. vu 
 Of then, win sufflc for Umiiy.'SL S^ d":! 
 
 ^i™-.. ;:Zn '" ''TV """^ '"" " '^<zz^ 
 
 oeive-as we shall see. In the meantime notice how littl« 
 J^gard some of the oodiflctions of the law of partnetwp "r 
 
 rutts^rrthir"" "^'"'^ ^^•^^p^-i^-^^.a^^JiZ 
 
 ln.»,l»„ „, ,he fl,„ „„,„ hXJSotta, of the'ctan™'"."™ "' "'" •»'»« 
 
 What description o^ "a person" is here intended? If one 
 n,o had pnor knon-ledge of the constitution of the arm 21 
 Statute (.f we may «> say) is right. But if "a pei^^Tn 
 olades "any persj,n," it i, wrong. Again, if persons Xha ve 
 
 IS .ntelligiblej bat .f all persons are included, it is not 
 
 -t might bo suggested that there is sulHcient arabiffoitr 
 .bcu the word "apparent " to permit of any elasticTy fhth 
 might be necessary in the application of the clause. For h 
 might be said to a plaintiff who desired "to treat all apparent 
 
 mJTk i"l'°^".':?^L*ff.5" Ji?*." ''"• (I"..xx cb. ^.,„, 
 Stwcker t. Conn (ISSft •() Init W 
 
618 
 
 OSTENSIBLE AOEKOT. 
 
 members of the old firm as still being members," that they 
 must have been tbas apparent to him. But to give this rela- 
 tive meaning to the word would be to alter the law in a way 
 probably not intended with reference to persons who had pre- 
 viously dealt with the firm. For in such cases, although the 
 person dealing knew nothing of the constitution of the firm, 
 yet he is entitled to assume that there has been no change in 
 its membership. 
 
 "The principle of law . . . is incontrovertible . . . that when 
 an ostensible partner retires, or when a partnership between several known 
 parties is dissolved, those who dealt with the lirm before a change took 
 place are entitled to aaaume, until they have notice to the contrary, that 
 no change has occurred." > 
 
 As to prior dealers, therefore, we cannot say that they are 
 entitled to treat as members those persons only who were ap- 
 parently so to them. 
 
 Apart from the statute and observing the distinction sug- 
 gested, there is not much difficulty. Let us make three classes 
 of oases: i< 
 
 1. As to those who have had dealings with the firm prior to 
 dissolution, they "are entitled to assume, until they have notice 
 to the contrary, that no change has occurred." In other words, 
 persons who were members of the firm at the time of the prior 
 dealings, whether then known to be members or not, may still 
 be held liable as partners. This general statement must not be 
 understood as applying to a person who two years before the 
 transaction in question had made a single cash sale to the firm ; ^ 
 but rather to persons who had been in the habit of dealing 
 with the firm. 
 
 2. As to persons (1) who have had no previous dealings with 
 
 the firm, but (2) who were aware of its constitution, we may 
 
 say that 
 
 " in case a known member of a firm retires from it, and credit is after- 
 wards given to the firm by a person whc has had no previous dealings with 
 it, but has become aware as one of the public that it existed, and has not 
 
 1 Per Lord Selborne, in Scarf v. Jar- 
 dine (1893), 7 App. Ca& 840; 51 L. J. Q. 
 B.61S. And see Miles v.Furber (1873), 
 LR.8Q.E77;43L,J.Q.a41:MoLen- 
 more v. Rankin (1891), 68 Mi8& 196; 8 
 a R. 845; Fi'ankel v. Watheu (1890). 
 68 Hun, 543; IS^N. T. Supp. 691 (firm 
 
 Dalton (1891), 83 N. ¥.240; 11 N. Y. 
 
 Supp. 851; Gage v. Rogers (1892), 61 
 Mo. App. 428; Robinson v. Floyd 
 (1894), 159 Pa, St. 165; 28 AtL R 358; 
 Brown v. Foster (1894), 41 S. C. 118; 
 10 8. R R 299; Arnold v. Hart (1898), 
 176 IlL 445; 52 N. E. R 937. 
 
 « Merritt v. Williams (187^), 17 Kan. 
 S87. 
 
PARTNRB8HIP. 
 
 019 
 
 the retiring meraben of the old iom~,,. ""°«««»ry In order to enable 
 
 ETif',""'?"'.'': I"" It would KPeXl- Sa'* i'*"";' '"' moh .ob- 
 knowledge ot the former ii«rti.™hiV: i^'f "?'■' *'»'• the Uranitiir had 
 •truotive, of Ite dle«.l«ion)S^ """^ ''°' '^ °» "Wloe, actiilTr in- 
 
 The persons then to whom it is the <lii».. ->» .t 
 nor to (cive notice »r.wir auty of the retiring part- 
 
 with thTflrr a°d m ™~'""T 1''° ""^ P""iou,ly de.lt 
 
 eonstitation™' the fllTr "l''°,.'"^ '^"•» *"«"' »' ">« 
 
 with it: and the noti^i^K * *^ ""*'" ""' '"'™ ^»" 
 
 rule «<^uWng "an ™rtf"*" '" ""^ '"^"'«<' "^ ""e 
 
 speeiflc^otioi '." zx^dZ^zx^t^cr:!.^' 
 o««.anestoppir,r:,-^rt-^rr'.:rr 
 
 >Reid V. Coleman (1890), 19 Ont 
 
 o?t ^^ ^**'® ''• Williams (1896). 
 84 8. G Can. 718; Dreher v. Connolly 
 
 Hahn V. Keneflch (1898), 48 Ma Apa 
 518; Alexander v. Harkins (1897) 
 120 N. G 458; 87 a E. R 180. The 
 words. •• as one of the public," might, 
 for the purposes of a general rule, 
 well be omitted; for if the same in- 
 formation had been obtained as an 
 individual the result would no doubt 
 fee the same, 
 
 (1893), 69 Minn. 685; 54 N. W. R 789 
 See alw Carter v. Whallej (1830). 1 
 B. & Ad. 11; Heath v. Sansom (1888), 
 4 a & Ad. 172. ' 
 
 »68 & 64 Via (Imp.), ch. 89, g 86 (8); 
 60 Via (Man.), ch. 84. §86 (8)., In 
 Canada and the United States it 
 would be very advisable to give no- 
 tioe to the mercantile agencies. Reid 
 V. Coleman (1890), 19 Ont 103; Gage 
 V. Rogers (1898), 61 Ma Apa 488: 
 
 Btt.lllr nf HiT^. i_ 1 rir. . 
 
 TTCatun 
 
 Bank of MonnnfTahciA ■= 
 
 'Collins. J., in Swigert v. Aspden ^ ^ "^ ''• ^' ««»'«* N. R R 4a 
 
630 
 
 OSTENSIBLE AaEKOY. 
 
 use of a firm name may estop as well those persons who were 
 atone time partners of the firm as those who never weremem- 
 berp of it. 
 
 ^JaV ' f *'*?5''X?'"* ^""^ *•*• "*•"« 'Thompnon ft Jone«' on the door, 
 ?„ kiiP. **u ^"^ Thompson and Jones wiling good*, am I not warranted 
 in believing that they are partners? " i 
 
 The general principle may be said to be that the permitted 
 use of a name is 
 
 nfSl?"* °".' °iLu ""*".■■ a partner In that firm to any one who knew, 
 2J^ ri'^!^ ^ believe, that this represented the name of the defendant, 
 and not that of some other person." ' uoiouu»us, 
 
 Employment upon the premises in such way as might indi- 
 cate either partnership or managership, without more, is said 
 not kO be suiHcient to estop.* 
 
 Historic and Indicative iVawitf*.— Turning to the cases in 
 which a prior name has remained unchanged notwithstanding 
 the withdrawal of one of its members, a distinction must be 
 made. Firm names are sometimes indicative and sometimea 
 merely historic; and may easily pass from the one to the other. 
 Where they indicate who the merabei^ of the firm are, great 
 care has to be taken by a retiring member, for the firm name 
 is a constant assertion that he is still there. 
 
 The often-cited case of N^ewaome v. Coles * was a case in which 
 the name had become historic. Thos. Coles & Sons, by that 
 name, had carried on business, and when the father died the 
 name was continued. It then, of course, ceased to be indicative. 
 Afterwai-ds two of the sons retired, leaving the third the sole 
 proprietor of the business, who still maintained the old name. 
 He became indebted to a creditor who tried to hold the other 
 sons liable because of the continuation of the sign. But the 
 clear answer was (although not put exactly in that way) that 
 the name was historic, and owing to the death of Thos. Colea 
 had ceased to have the appearance of being indicative. 
 
 This reasoning would not apply, of course, to a case in which 
 "Archer » retired from the firm of " Keats, Archer & Co." For 
 there, although the name has in reality become historic, it still 
 
 1 Ex parte Hayman (1878X 8 Uh. D. 
 17: 14 L. J. Bk. 54 And see McUan 
 V. Clark (1898), 20 Ont Appi e65; 
 Bartiett v. Raymond (1885), 1»Q Mas& 
 275; 80 N. E. R. 81. 
 
 "Per Osier, J., in McLean t. Clark 
 (1893), 20 Ont App. 88a 
 
 'Edmunson v. Thompson (1861), 3 
 Fos. & F. 564. 
 
 <(i8in2Camiv6i?. 
 
PAKTNXB8HIP. 
 
 5S1 
 
 r'nlb ';Sr" ^ ^' ^^^^^ ^"^^-^^- ^" ^^^^^ -*^ Archer 
 
 rhe distinction between historic and indicative names was 
 altogecuer overlooked in Re Fraser} From the firm of" W & 
 J. Fraser" the J. retired; the old name was continued- aftef 
 wards certa n bankers discounted a bill accepted by " W i J 
 Frase," and .ued the J member upon it. They were beaten; 
 
 ll \^'\^y'''^ ^^^^ Newmne v. Coles showed that carrvimr 
 on the business in the old name did not carrying 
 
 IVST^rin.rin'ZlS^^'''' "^ ""'"^ ^ *"« »^"'^ that he. John Praser. 
 
 oni^r^ f'!'''J^'^ '^^^ ^'^^'•e was no evidence of any holding 
 out by John Fraser to the petitioning creditors- 
 
 ^^o^^''^^^^^ Of the dlasoln. 
 
 But It IS immaterial, as we have seen, whether the case is 
 one of a new or an old dealer, if the creditor had had knowl- 
 edge of the constitution of the firm. And so the case would 
 be reduced to one of fact, in which respect it is defectively r^ 
 ported. Itsuggests this question, however: whetherif an indica- 
 tive name be continued and people be misled, it is a cufllcient 
 answer to say that notice of the dissolution was advertised t 
 the Gazette- whether an official and never-read notice of a 
 dissolution will outweigh the constant and obtrusive wtion 
 that there was noneil 
 
 II. M18REPKE8ENTATIOK BY THE Defendant. 
 
 Discussion in a previous chapter' of one of the prime requi- 
 sites of estoppel, ^ ^ 
 
 tlon the estoppeWier hHs^m?d^'i^^d&TAK3 MfiSJ^rrSS;.^- 
 renders it unnecessary to say much here upon a point that 
 apr.or^ seems to be sufficiently clear, namely, that a misreprc 
 sentation which will estop must be one for which the defend- 
 ant IS responsible. It may bo pointed out, however, that the 
 
 » Williams v. Keats (1817). 3 Stark. 
 aOO; Dolman v. Orchard (18351 *i a 
 & P. 184; Evans v. Hadfleld ami 
 98 Wis. 065; 68 N. W. R. 46a 
 
 (1892) 8 Q. B. 68aL 
 
 tfU TTT 
 
622 
 
 OSTENSIBLE AOEXOY. 
 
 assertion that a man cannot be e8topf>ed from denying mem- 
 bership in a firm merely because some other person chooses to 
 represent him as such, includes the case of the misreptesenta^ 
 tion being made by the real members of the firm, who are as 
 little capable as other people of binding the defendant by their 
 falsehoods.! According to the language of the Imperial Stat- 
 ute > it is 
 
 hfrnlliV °"® u'' u ^^ '^'"■?" spoken or written, or by conduct, represents 
 in a Mrtk3uirRr°fl ''^'"* '" ' himself to be represented, as a partner 
 
 that is liable. The necessity for bringing the representation 
 home to the defendant is illustrated in the holding that he can- 
 not be estopped by what takes place after his death. Suppose 
 that a partner dies; that the continuing partners give no no- 
 tice of dissolution ; and that the old firm name (possibly the 
 name of the deceased) is flamingly continued j nevertheless the 
 decedent's estate is not liable.' 
 
 III. MrSKKPBESENTATION TO THE PLAIN'nFP. 
 
 One of the essential conditions of estoppel is that 
 
 "the estoppel-asserter must be a person to whom immediately or mediatelv 
 the misrepresentation was made.^'« lucumwriy 
 
 It need not, however, surprise us to find that prior to the 
 
 development of the law of estoppel this point was not always 
 
 insisted upon. 
 
 "Formerly it was considered sufficient if the party was held out to the 
 trorW as a member of the firm or company; now. however, it is necessary 
 that there should be direct evidence that the holding out had come to the 
 knowledge of the pla.utiflf; he need not hear or seS the defendant's con- 
 Guct; It IS enough if the fact has come to his knowledge."* 
 
 Indirect Afiarejyresentation.— In one case* too much stress 
 
 was laid upon the necessity for distinct authority from the 
 
 •Even if advertised. First Nat 
 Bank v. Cody (1894), 93 Ga. 127; 19 
 S. E. R 831. See also Fox v. Clifton 
 (1830), 8 L, J. C. P. 261; Maischall v. 
 Aikin (1897), 170 Mass. ft; 48 N. E. R 
 845. 
 
 253 & 54 Vic. (Imp.), ch. 89, § 14 (1); 
 60 Via (Man.X ch. 24, § 14 (1). 
 
 'Webster v. Webster (1791), 8 Sw. 
 490; Vulliamy v. Noble (1817), 8 Mer. 
 614 And see the Imp. St., 53 & 64 
 Via, ch. 89, g§ 14 (2), 86 (8); 60 Via 
 <Mau.), ch. 24, same sections. 
 
 *.^nfe,cb. X 
 
 » Martyn v. Gray (1868), 14 C. R N. 
 S. 889. And see Shott v. Streatfleld 
 (1830), 1 M. & Rob. 8; McLean v. 
 Clark (1893), 20 Ont App. 671; Hoi- 
 man v. Herscher (1891), 16 a W. R 
 984 (Tex.); Burrows v. Grover (1897), 
 41 a W. R 822 CWx.); Marschall v. 
 Aikin (1897), 70 Mass. 8; 48 N. R R 
 845; Norfinger v. Goldman (1898), 123 
 Cal. 609; 64 Paa R 425; Thornton 
 V. McDonald (1899), 88 & R- R 680 
 (Ga.). 
 
 • Edmonson v. Thompson (1862), 8 
 Fos. & F. 564; 81 L. J. Ex. 207. And 
 
PABTNEHSniP. 
 
 ess 
 
 «.r to be . panirr. J ;tt'": f^^u^r: "':■ 
 
 «pre,S„„f to : :7a^[i,°' ''„! "?• """r ^ "... ™ad, 
 from tho defendant a„,r„"' • ^ '° """'°°' """'"oritv 
 «.topH. ""'*'""'"' -''°'" "g"'" 't w„ .aid that there was n"o 
 
 But the oases do not usnallv nrooooJ n„„» .1, 1 
 • eipal and affent anri .h. „ ". t "V" ">e law of prfn- 
 
 wise nf L!,M K i, ^*^ members of the firm to do like- 
 
 r rep"r:ir yr ;^i:,r -r *■'"■• ^'• 
 
 hin. of the faot of partner8hip""T,t th!r- * *"?" "«"'"" 
 
 "iSatrr"; ^^» '- -^'e uir s -' -- 
 
 fendant is liable." a ™^™'»' <>' the firm, supplies goods to them, the de- 
 
 ift^h^orp"^:;i^-:rrof^^^^^^^^^^^ 
 
 v^. J., in the same case is correct: ' 
 
 fac;ha^ri"?Jfcow?edgl:?. '^«'-'^«°t''' conduct; it is enough if the 
 
 The Imperial Statute declares for liability 
 toX^^^^son^i^P^^^^^^^^^^^ made or communicated 
 
 partner making L 4r.sliiit?r ir^s^'r^iSgW^^ '^Pp"-* 
 
 ^^'McNeilan's Estate (1894). ,e P. SJlr^i'-^L^p^'^.rJJr- 
 
 m-'BlMlR.^7v'^''"'"'''^''^'' ^»««4). 88 Mo. 208; "'"''"" ^-""^'^ 
 
 'Mart.nv.Gi,a8e8,UaaN. a:^^^ vS iKi^EjJlJlS 
 
nu 
 
 OtTKKEIBLB AOBMOT. 
 
 The expression held out " to tho world," although now uia- 
 ally repudiated/ still retains something of its influence, and 
 necessitates some careful distinguishings. For example, in a 
 quotation upon a previous page' it is said 
 
 But sometimes it is thought that if the holding out were suf- 
 floiently public, direct evidence would be unnecessary; and.this 
 seems to be coming back to the statement that if a man be held 
 out " to the world " as a partner he is liable. But it is not so. 
 The law remains that there must be proof that " the holding 
 out had come to the knowledge of the plaintid;" and all that 
 is asserted is that 
 "there may be cases in which the holding out has been so oubUo and ro 
 
 n?r?hKi""'f/'"*i *':<M"'''^ may infer *that one SinR S the mr ° 
 nership knew it and rellecl upon it. without direct testimony to that effect. 
 *..,„'. ' nature and amount of evidence requisite to satisfy the iurv 
 
 may vary according to circumstancea But the rule of law s always ti,e 
 same, that one who bad no knowledge or belief that the defendant wa! 
 he d out as a i«i, tner. and did notbing*on the faith of sucha knowredgrS? 
 
 ^r In uS""> ^'^^ *''*'' ***"'''' " ' P*""*'' " ''« ^" not a pirt- 
 
 It is sometimes loosely asserted, too, that if a retiring partner 
 allows his name to continue to appear — in this way to hold 
 himself out to the world — he will be liable for the subsequent 
 debts of the firm. The law is more accurately stated as follows : 
 
 „.«l'^'i'"^"^'^u'^ u'"'™'''""*? ^'*°'? * ^"^ *""»' »«« to It t'»at hi" name is re- 
 moved from the business si^ns in front of the establishment, or p^hom 
 relymg upon suchBijna aa evidence of the firm's continuation and Imomna 
 nothing to th^ contrary are entitled to recover for all goods parted with o? 
 the faith of the partnership relation."* ^ 
 
 It has been pointed out that one who has previously dealt 
 with a firm is entitled to treat all active » partners " as still being 
 members of the firm until he has notice of the change," whether 
 such partners had or had not been « apparent members " to him — 
 that is, whether he did or did not know of their membership. 
 That statement, however, in no way conflicts with the rule that 
 misrepresentation as to partnership must be made to the plaint- 
 iff; for the misrepresentation to him in such a case is that there 
 has been no change in the constitution of the firm. 
 
 ^Mr. Parsons wodid continue it: 
 On Partnership (4th ed.), 104. 
 
 ^Ante, p. 532. 
 
 'Thorapscn v.. First Nat Bank 
 (188»). Ill U. a 687. And see Dick- 
 ensoa v. Vuipy (1629), 10 R & U 140; 
 Davis V. Allen (1849), 8 N. Y. 168; 
 
 Hefner ▼. Palmer (1878), 67 IlL 188; 
 Riaey v. James (1881), 86 Kan. 221; 
 Braithwaite v. Power (189U 1 N. D. 
 496: 48 N. W. R 859. 
 
 ♦Norquist v. Dalton (18901.83 N. 
 Y. 240; 1IN.Y. Supp.86t 
 
 •As to dormant partners, see infra. 
 
PABTNBBSUJl*. 
 
 025 
 
 IV. Credit Upok Faith of Representatiow. 
 
 jrno,«/..V of the Ji.pr^.e,Uation.~U order that a plaintiff 
 may be able to say that ho gave credit upon the faith of a rep- 
 resentation it is clearly necessary that he should have known 
 of It pri,,r to his action ; » and believed it to be true; ' ^vhich of 
 course includes that he did not know it to b« untrue* 
 
 It 18 because .a representation cannot estop unless it be known 
 that a dormant partner cannot be estopped from denying part! 
 nership after his retirement from the firm.* But'the term 
 dormant partner" must be construed strictly, as 
 
 For if he chooses to throw off his character he may leave him- 
 self open to the estoppel which befalls other partners.- And 
 of course the retirement of a dormant partner will not relieve 
 him from contracts already made, even if part of the considera- 
 tion for the firm's promise be furnished after the dissolution.^ 
 jyature of the Representation.- Observe that what the plaint- 
 iff relies upon is the presence of the defendant in thetirni.and 
 as a consequence, his being a party to the contract. It is not at 
 all essential that the plaintiff should be able to establish that 
 the defendant was a man of « financial ability," and so an im- 
 portant factor in the contract.' Nor indeed that he should be 
 able to swear that if the defendant had not been a partner he 
 (the plaintiff) would not have sold the goods.' All that is 
 
 iBalrd v. Planque (1856), 1 Fos. & 
 F. 844; Rives v. Michaels (1896), 16 
 Misa R. 57; 87 N. Y. Supp. 644; 
 Steward v. Brown (1898), 103 Ga. 886; 
 80 a E R. 864. 
 
 » Pott V. Eyton (1846), 8 C. R 82; 15 
 L. J. C. P. 287; Wright v. Fonda 
 (1891). 44 Ma App. 684 
 
 * McLean v. Clark (1898), 20 Ont. 
 App 660; Alderson v. Pope (1809), 1 
 Camp. 404, n. ; Kraus v. Lutly (18041. 
 68 111. App. BOa 
 
 « 58 ^ 54 Via (Imp.), oh. 89, g 86 (8); 
 60 Via (Man.), oh. 60, § 86 (3); Farrar 
 ▼. Deflinne (1844), 1 Car. & K 580; 
 MoFariaiiw v. MoHugh (law i), 13 Ohio 
 Cir. Ct 485; 1 Ohio G D. 646; Pitkin 
 
 V. Benfer (1892), 50 Kaa 100; 81 Paa 
 R 695; Milmo Nat Bank v. Carter 
 (1892), 1 Tex. Civ. App 151; 20 8. W. 
 R. 886; Gorman v. Davis (1896), 118 
 N. C. 870; 84 8. E. R 770. 
 » National v. Thomas (1871), 47 N. Y. 
 
 •Elmira v. Harris (1891X 124 N Y 
 280; 26 N. E. R 541; Brown v. Foster 
 (1894). 41 a G 118; 19 a E. R 290. 
 
 'Court V. Berlin (1897), 8 Q. R 896; 
 66 L. J. Q. R 714. See 14 Law Quar- 
 terly Review, 5. And see ante, p. 247. 
 
 sstrecker v. Conn (1888), 90 Ind. 
 469. 
 
 9 Libel V. Craddock (18881L 87 Ky 
 525. " 
 
526 
 
 OSTENSIBLK AGENCY. 
 
 necessary is that, believing tlie defendant to be a partner, the 
 plaintiff entered into a contract with the firm. And if he bo 
 asked whether he would have made it had he known that the 
 defendant was not a partner, he may reply that that question 
 was not raised and is therefore immaterial. Upon the faith 
 of this, he did that; he has changed his position — that is the 
 requisite of estoppel. 
 
 Elbotion and Estoppel. 
 
 "We have seen that, by estoppel, a retired partner may con- 
 tinue to be liable for the engagements of the firm. For ex- 
 ample, if Smith & Co. be composed of two partners and one of 
 them withdraws without notice to an old customer, both wili 
 remain liable. Now suppose that as one man drops out an- 
 other goes in ; will all three be liable? In other words, will the 
 old as well as the new partner be liable — the new partner be- 
 cause of the contract to whic/i, he is a party, and the old part- 
 ner because he is estopped from denying that he is also a party 
 to it. 
 
 In Scarf V. Jardine (in the House of Lords ^ ) it was held that,. 
 
 in such case, the creditor must elect between the old firm and 
 
 the new — that he cannot hold both the retired and the added 
 
 member. Lord Selborne said: 
 
 "Put it as I can, lam unable to understand how there could have been 
 a joint hability of the three. The two principles are not capable of bein? 
 brought into play together: You cannot, at once, rely upon estoppel and 
 set up the facts; and if the estoppel makes A. & R liable, neither the es- 
 toppel, nor the facts, nor any combination of the two, can possibly make 
 A., B. & C. all liable jointly." 
 
 With deference, however, it is a mistake to make two situa- 
 tions out of one; and to say that "the estoppel makes A. and 
 B. liable; and the facts make B. and C. liable;" for estoppel 
 cannot operate apart from facts.' Nor are there two bets of 
 facts. The only duality is that B. and C. would be liable upon 
 one principle of law (contract) and A. upon another (estoppel)^ 
 and that seems hardly to be a sufficient reason for saying that 
 either A. or 0. cannot be sued at all. 
 
 Take the ordinary case of a partner retiring from his firm,, 
 and the continuing partner making a contract. It is not 
 
 _M1882) 7App. Cas. 840; 61 L. J. facta" Rector v. Board of Improve- ■ 
 '2- 5. oia. ment (ISSrj, 60 Ark. 128. 
 
 2 "Estoppels in pais depend upon 
 
FABTNEB8HIP. 
 
 doubted that both may be liable. But how? One is liable 
 
 tZ:t '''tr't'' ^-^'^ ''^'''''^' again Jirw:^^: 
 
 to say 80. But perhaps it would be better to declare that the 
 continuing partner is liable upon one principle of law co„t 
 ^act),and the other member upon anothe%riudple ^^^^^^^ 
 We have it, then, that if A. and B. are in partnersh n and A 
 goes out both may be liable- A. by estoppel and B by cot 
 tract. And what difficulty is added if B^ias taken a new 
 
 cCa^;^ "' '''' ^' ^'^^ ^- ^^^ ''^ P-'- liable up^the 
 Suppose that the customer was not aware that A. had left 
 
 A. and C. to be liable to him? 0. is, in realitv. a party to the 
 contract-perhaps the signat . to it is in hi^ 'own hanrrU 
 
 wf f \u °^'^ ''^'^ ^^ ^'^^P"-' ^°*^ ^- ^o« ought to be lia- 
 
 «Mn ir^^'u^V'*''""^^ "P'^" '^^ faith of his member. 
 ship,and he IS therefore estopped from denying his liabilitv. 
 It IS said that this conclusion cannot be correct, for were the 
 
 T, Vr\f'y '°"'^ ""* P^^^^J ^" abatement the non! 
 o nder of the old member- the old member is therefore, it a 
 said, not a proper party to the suit. But observe tha the 
 reason that they could not so plead is that they could not say 
 tha the retired partner was a party to the contract. The 
 creditor may, if he wishes, sue the old member; but he is not 
 
 itT'n fit Z h""' T' '' '^ °'°^^^«' «- - *»^« -"tract as 
 It 18 m fact, and the real contractors cannot defend themselves 
 
 by asserting the plaintiffs right to add to their number by es 
 
 IZlt 1 1'" ?f ' ^"'''^'' '^^"^ t° ^y ^^^^ he himself 
 cannot claim the right which estoppel gi.es him. The objec- 
 tion moreover goes much too far. For if it be valid, then if A 
 Zo^\r '" P^^'^^'-^'^^P' «"d after A. retires B. makes a coni 
 vnl '!. '^"^ "«^«r be jointly liable-B. if sued alone 
 
 1 «„; f A °''' '''''' ^^ ""^^^" '« P^«^^ i'^ abatement the 
 aosence of A. 
 
 It is also argued that if A., B. and 0. were all sued together 
 there must be a nonsuit, for the plaintiff could not prove a 
 joint contract. That may be technically true. But if A. and 
 B. were sued alone, they could plead th« nnn-ioindo- ^*r.» 
 
 I 
 
528 
 
 OBTENSIBLK AQENOT. 
 
 Thus tho difflcalties may be set oflf the one against the other. 
 An argument derived from obsolete forms of pleading, more- 
 over, is not always the most convincing.* It might, indeed, be, 
 employed to show that A. could not be liable at all. Take it 
 that the contract was made with B. and 0. It is impossible 
 now for the plaintiff to sue B. without C* For the same rea- 
 son he cannot sue A. without joining B. But, according to 
 Scarf V. Jardine, A. (the retired partner) and 0. (the new one) 
 cannot be sued together. Therefore A. cannot be sued at all; ' 
 and there is no election I 
 
 If the case be one of election it is of this peculiar character: 
 that a creditor having two persons liable to him in respect of 
 the same contract must abandon one of them if he desires to 
 sue the other. That the liability of one of these depends upon 
 his being undoubtedly a party to the contract, and the liabil- 
 ity of the other upon his inability to deny that he too is a 
 party to it, does not seem to |)e a sufficient ground for requir- 
 ing a release of either one or the other. Estoppel may add a 
 man as a party to a contract, but it is difficult to see how it 
 can subtract one, or how the addition of one can entail the dis- 
 charge of another.* 
 
 »For example, Lord Eldon, in Ex 
 parte Hodgkinson (1816), 19 Ves.2H 
 when dealing with an analogous 
 difficulty, said: "It has been con- 
 stantly taken as clear law that a 
 creditor dealing with A., and know- 
 ing nothing of a dormant partner, 
 may consider himself a separate 
 creditor; yet it has been determined 
 very lately that the defendant in an 
 action may plead in abatement that 
 there is a do^iflant partner. I, how- 
 ever, will not disturb the decisions 
 whioh have taken place here for 
 thirty years . . . declaring that 
 those decisions . . . will not in- 
 duce me to alter my course in bank- 
 ruptcy." 
 
 a Summers v. Heard (1899), 50 S. W. 
 R 78 (Ark.); Parsons v. Kruger (1899), 
 57 N. Y. Supp.' 416; Hyde v. Casev- 
 Grimshawe (1899), 83 111. Appi 88. ' 
 
 >In the case supposed the creditor 
 
 knew of the accession to the firm, of 
 C. That is, however, immaterial. It 
 merely serves to make clear the jus- 
 tice of the creditor's claim to hold 
 both him with whom he contracted 
 and the retired memtwr with whom 
 he believed he was contracting lia- 
 ble for the debt. The real point is 
 that the contract was made with 
 the new member, and that it is the 
 contract that is the basis of the ac- 
 tion. 
 
 *It might be that if a contract 
 was made with A., R and C under 
 the belief that the parties were A., 
 B. and D., there would be no con- 
 tract at all (Boulton v. Jones (1857), 
 2 H. & N. 564; 27 L. J. Ex. 1117); but 
 if the contract is, as a matter of fact, 
 or as an allegation which cannot be 
 disputed, with A., R and CL. Iinw 
 can estoppel ever eliminate C.7 
 
pabtnkk8hip. 
 Liability in Tort. 
 
 629 
 
 When, as formerly, liability proceeded upon a holding out to 
 
 the world » mstead of to the plaintiflf), it might well be that 
 
 persons so held out as partners would be liable for the nedi- 
 
 genoe of the servants of the firm, although they were not, in 
 
 was held liable for a collision caused by the firm's driver 
 
 But the modern doctrine requires that if a man is to be lia- 
 ble as a partner m a firm of which he is not a member, it must 
 be because the plamtiff has dealt with the firm in the belief 
 that the defendant was a member of it - has changed his posi- 
 tion upon the faith of the misrepresentation. It would be hard 
 to contend, m the case of a man injured in a collision, that he 
 had sustained his hurts because of representations that had 
 premusly been made to him as to the ownership of the guilty 
 
 ^Tm' ""' * ^' ''*• ^' "^ *'' '^'" "^ °' S""^ -• Clark (1888). 6 
 84 
 
INDEX. 
 
 The flgures tomettinM indicate the page at which the nibjeot oommenees. merely. 
 
 ACTIVITY — 
 
 obUgatlon to be active, 40. 43, 48, 103, 188. 
 
 as against crime or fraud, 50. 
 
 see Passive Misrepbesentatiox. 
 ACTUAL AND CONTRACTUAL ESTATE, 269l 
 ADMISSION— 
 
 estoppel not an, 4 
 
 AGENT (see Ostensible Aoenoy; PawoiPAL and Aoent). 
 ALTRUISM (see Egoism). 
 
 AMBIGUITY OP MISREPRESENTATION, H 141. 
 factor also a trader. 611. 
 
 AMBULATORY AND NQN- AMBULATORY INSTRUMENTS— 
 classification suggested, 885. 
 Lord Cairns' dictum, 886. 
 transferee takes free from equities of the obligors, 891. 
 
 even although parties themselves defrauded, 96. 
 transferee takes free from legal title of the owners, 892. 
 possession of ambulatory instruments is appearance of ownership^ 894 
 
 or of agency to transfer. 895. 
 duty -of owners of ambulatory instruments, 895. 
 estoppel applied to ambulatory instruments, 897. 
 considerations in support of suggested views, 404 
 
 market overt, 404 
 
 lost seal, 405. 
 
 further considerations, 405i 
 
 contrast with old view, 406. 
 ambulatory instruments— 
 
 bonds, 409. 
 
 scrip for bonds, 413. 
 shares. 414 
 
 mortgage debentures, 414 * ■* 
 
 mortgages, 416. 
 
 vouchers, 416. 
 
 bank documents, 417. 
 
 share transfers, 418. 
 charter-parties, 41& 
 bills and notes, 43a 
 
682 
 
 \\ 
 
 INDEX. 
 
 AMBULATORY AND NON-AMBULATORY INSTRUMENTS icon.)— 
 intended to be assigned, 42L 
 conclusions, 432L ^ 
 
 overdue paper, 428. 
 
 blanks and spaces in, see Custody or Doouubnts. 
 stolen or found instruments, see Custody of Documents. 
 
 ANTICIPATION OP CHANGE — 
 
 estoppsl-denler must have reasonable ground for, ISS, 
 personal misrepresentation, 158. 
 impertinent questions, 150. 
 assisted misrepresentation, 160. 
 summary, 101. 
 
 APPROPRIATE MEASURE OF PRUDENCE — 
 a rule in torts, 80. 
 what is. 80, 81. 
 
 application to estoppel, 81, 87, 67. 
 already made, 34 
 but other reasons given, 8Si 
 doty to be active, 40, 43, 48, 105, 1801 
 as against crime and fraud«i50l 
 see also specific heada 
 
 ASSIGNMENTS OF CHOSES (see Ambulatory). 
 
 ASSISTED MISREPRESENTATION, la 
 requisites for estoppel, 20. 
 examples, SI. 
 no fraud necessary, 94. 
 carelessness sometimes essential, see CABBLESSNBsa 
 
 B. 
 BANK DOCUMENTS— 
 
 ambulatory character of, 417. 
 
 BANK OFFICERS — 
 
 exceeding authority, 604. 
 
 BANK PASS-BOOKS- 
 
 duty to check over, 105, 18& 
 
 BILLS AND NOTES (see Ambulatory ,^d Nok-ambulatoby; Forobb- 
 iBs; Nbootiable Instruments; Custody of Documents; Over- 
 
 DUE). 
 BILLS OF LADING — 
 
 for goods not delivered; (»relessness, 106, 508. 
 see Documents of Thle; Indicia of Titlb. 
 
 BLANKS (see Execution of Documents). 
 
 ■^.•^ £ a f>C «j V x^a. 
 
 
 BROKER— 
 
 as (*. special agent, 476, 478, 479, 483. 
 
I.)- 
 
 UTDEX. 
 
 0. 
 
 588 
 
 i 
 
 tOBB- 
 »TBB* 
 
 CARELESSNESS SOMETIMES ESSENTIAL, 98. 
 
 only important where there is niisrepresentation, KW. 
 personal misrepresentation; carelessness not essential, 101. 
 assisted misrepresentation; carelessness sometimes essential, 103. 
 execution of documents, lOa 
 mortgagee intrusting deeds to mortgagor, 104 
 ostensible agency, 105. 
 checking over bank pass-books, 105, 180. 
 standing-by, 26, 103. 
 
 bill of lading for goods not delivered, 108. 608. 
 bills and notes, spaces in, 107. See Custody of Dooument& 
 rules supplied by the cases, 109. 
 Mr. Bigelow's criticism, 109, 
 Mr. Cabab6'8 criticism, HI. 
 L There must be neglect of some duty, 118. 
 IL The neglect must be in the transaction itself, UX 
 this impossible, 118. 
 authorities reviewed, llSi 
 result and .its explanation, 116. 
 "in the transaction," 117. 
 analog}' from law of torts, 119. 
 IIL The neglect must be the proximate cause, eta, 110. 
 this impossible, 119. 
 proximate and real cause, 120, 
 summary of chapter, 13L 
 
 CAUSE OP ACTION — 
 estoppel as a, 187. 
 
 CERTAINTY (see Impued Misrepresentation). 
 CHANGE OF POSITION ESSENTIAL, 181. 
 misrepresentation not acted upon, 181. 
 change prior to misrepresentation, 182. 
 misrepresentation unknown, 182. 
 
 inactivity may be a change of position, see Lxtluno Into Securitt. 
 means of knowledge of incorrectness of misrepresentation immaterial. 
 
 187. 
 what is a c' -'"■ect position, 189. 
 
 change of style of 1' ving, 18ft 
 
 change by bringing an action, 189. 
 
 a possible change, 140. * » * 
 
 on the faith of the misrepresentation, 140. •■ 
 
 where truth known, 140. 
 
 where misrepresentation withdrawn, 140. 
 
 where misrepresentation not believed. 14a 
 
 where representation ambiguous, 141. 
 
 certificate of shares not relied on, 141. 
 
 aeeming exceptions where classes of estoppel-asserters, 141. 
 
634 
 
 IKDEX. 
 
 CHANGE OF POSITION ESSENTIAL (continued) — 
 on the faith of the misrepresentation (continued) — 
 reputed-ownership clauses, 143. 
 two sets of bankruptcy creditors, 14& 
 what was the actuating motive, 144. 
 onuB of proof, 145. , 
 (Mveral reasons for change, 148. 
 prejudice, 140. 
 
 damage, real or assumed, 147. 
 amount of damage, 191. 
 lulling to rest, 147. 
 purchaser for value, see Purchaser. 
 anticipation of change, see Anticipatiou. 
 change must be reasonably consequent, sea Consequbnt. 
 change other than that intended, see Consequent. 
 CHECKS (see NEaoTiABLE Instruments; Ambulatory Instruments; 
 
 Execution of Documents; Custody op Documents). 
 CLASSES OF PERSONS CLAIM ESTOPPEL — 
 
 although not act upon faith of misrepresentation, 148, 
 
 COMMERCIAL AGENCIES— " 
 
 information to, intended for members, 128. 
 notice to, upon dissolution of partnership, 619. 
 
 CONDITIONS OF ESTOPPEL, 10. 
 
 CONSEQUENCES- . 
 
 does estoppel proceed upon duty, or has It consequences merely, 888. 
 
 CONSEQUENT— 
 
 change of position must be reasonably consequent, 183. 
 Barry v. Croskey and Carr v. London rules compared, 183, 
 change other than that intended, 163. 
 
 direct and indirect misrepresentation, 183. 
 
 honest and fraudulent misrepresentation, 183. 
 application to the cases, 171. 
 what are consequent changes, 174 
 summary, 175. 
 
 CREDITORS — 
 
 estoppel in favor of, as to ostensible property of debtor, 88. 
 creditors in class, claim estoppel although not act upon faith of mis- 
 representation, 143. 
 effect of estoppel of debtor upon his creditors, 808. 
 bearing of privity considerations, 209. 
 
 true position, 218. 
 joint and separate creditors of partners, 818. 
 
 eflfeot of estoppel of company to deny validity of some debentures 
 upon other debenture holders, 817. 
 
 same queswua So lo aumc auaicnyiuviuj 
 
 see Refuted Ownership. 
 CRIME— 
 
 duty to guard against, 48. 
 
IXDEX. 
 
 CUSTODY OF DOCUMENTS— 
 
 stolen or found negotiable instruments, 456. 
 
 when forgery necessary to complete, 83, 81, 458, 466L 
 signed slips, 463. 
 
 when in complete form, 61, 461. 4661 
 stolen or found documents of title, 845. 
 stolen or found non-negotiable instruments, 467. 
 <.'USTODY OP SEALS — 
 
 duty as to, 68, 108, 287, 403. 
 CUSTODY OP RUBBER STAMPS, 63. 
 
 635 
 
 DAMAGES — 
 amount of, 191. 
 necessary to estoppel, 146. 
 
 see Chanoe of Positiox. v<" 
 
 DEBENTURE HOLDERS — 
 
 effect of estoppel of company to deny validity of some debentures 
 upon other debenture holders, 217. 
 DECEIT— 
 
 compared with misrepresentation, 8a 
 compared with estoppel, 287. 
 fraud necessary in deceit, 284. 
 fraud unnecessary in estoppel. 826. j. 
 
 application of respective remedies, 236. 
 anomalous result, 387. 
 illustrations, 22& 
 present situation, 381. 
 
 company's secretary giving erroneous information, 887. 
 acts done by agent not "for master's benefit," 497. 
 DEEDS— 
 
 estoppel applies to, 845, 449. 
 possession of, see Possession of Title Debus, 
 DEFAULT— 
 
 taking advantage of one's own, 185. 
 DELIVERY ORDERS (see Documents of Title; Indicia of Titlb). 
 DIRECT AND INDIRECT — 
 
 misrepresentation may be direct or indirect, 1381. 
 Barry v. Croskey criticised, 16a 
 DOCUMENTS- >', '' - , 
 
 custody of, see Custody op Documents. 
 execution of, see Execution of Documents. 
 DOCUMENTS OP TITLE — 
 
 three classea of document" 305, 
 1. Certificates of title, 301 
 3. Transfers of title, 305. 
 8. Records of transfers, 30& 
 
586 
 
 INDEX. 
 
 DOCUMENTS OF TITLE (continued)— 
 estoppel by tranafera of title, 80Sw 
 lands and goods, 800. 
 
 conveyances are intended as representations and will estop^ 807. 
 bills of lading — 
 
 not operative merely between the parties^ 8081 
 
 intended as representation and will estop^ Siltil 
 dock warrants, etc., also so intended, 300. 
 share certificates and transfers also so intended, 809. 
 resemblances among all documents of title, SlOl 
 estoppel the true ground of decision, 811. 
 purposes of doounoents of title to goods, 818. 
 
 intended to be passed on, 12S. 
 signers of them estopped, 818, 814, 818, 
 
 carelessness material in oases of bills of lading, 106, 810. 
 
 carelessness not material in other cases, 89, 816. 
 
 no estoppel as to certain points, 818. 
 
 when issued improperly by agents, see Principal akd Aoknt. 
 transfermrs estopped, 818, 818. 
 bills of lading — 
 
 estoppel of transferrer only as to stoppage tn transitu, 810L 
 
 1. Passing property by transfers, 820. 
 
 a. Negotiability, 8S2, 82a " 
 
 a Symbolism, 824. 
 
 these three compared, 825. 
 
 the true view — estoppel, 827. 
 
 tendency in that direction, 880. 
 dock warrants, etc. — 
 
 early law enunciated valuable principles, 885. 
 
 submergence, 836. 
 
 parliament versus the courts, 830. 
 
 compared with bills of lading, 838. 
 
 right to stop tn transitu not affected by, 888. 
 until statute, 889. 
 
 other documents unaffected by statute, 830L 
 shares in companies — 
 
 company estopped by certificates, 840. 
 
 compared with land, 840. 
 
 transferrer estopped, 841. 
 
 seals, 84S. 
 stolen or found, see Custody of Dooumbnts; Inmou of Titlx 
 
 DOWRESS — 
 
 standing-by, 27. 
 
 DUTY— 
 
 as a requisite of estoppel, 28. 
 
 estoppel prdceeds upou duty, 282. 
 
 as to appearance of ownership, see Ostznsiblb Ownbrshif. 
 
 t 
 E 
 £ 
 
 E( 
 
 Ei 
 
 E\ 
 EJ 
 
INDEX. 
 
 DUTY (continued)— 
 
 as to appearance of agency, see Pbincipal and Aoent. 
 
 as to execution of documents, see Execution of Documknw. 
 
 as to custody of documento, see Costody of Documents. 
 
 as to guarding against crime, see Crim B. 
 
 of activity, sae Passive Misrepresentation; Luluno to Rest. 
 
 in partnersliip cases, see Partnership. 
 
 egoism and altruism, see EooiSM. 
 
 appropriate measure of prudence^ see Appropriate. 
 
 687 
 
 E. 
 
 EFFECT OF ESTOPPEL (see Nature and Effect). 
 
 EGOISM AND ALTRUISM, 87, 291, 4S0. 
 
 ELECTION — 
 
 in partnership cases, S26. 
 
 EQUITABLE RIGHT AND ESTATE — 
 estoppel is an equitable right, 199. 
 
 parallel between e^iuity under contract for sale and estoppel. 208. 
 solution applied, 202. *^^ ' 
 
 does an estate pass by estoppel, 208. 
 
 effect under Factors Act, 20a 
 see Legal Estatk 
 EQUITIES— 
 
 the phrase equivalent to "merits," 351, 291. 
 estoppel concealed under the phrase, 200. 
 "no defenses," 128. 
 
 see Ambulatort. 
 
 ESTOPPEL— 
 
 subdivisions, 1, 2l 
 olassifioation, 8. , 
 
 definition, a 
 justification, S. 
 history, 7. 
 conditions, lOl 
 
 EVIDENCE — 
 
 estoppel as a rule of, 18a 
 
 EXECUTION OF DOCUMENTS — * . 
 
 carelessness in execution may estop, 103, 43S, 
 
 L Execution fraudulently obtained 
 
 the authorities, 428. 
 void and voidable, 427. 
 Bolutirm, 43^ 
 analogy, 487. 
 
INDjiSX. 
 
 EXECUTION OP DOCUMENTS (continue W — 
 n. Execution fraudulently oompleted, 488. 
 division of hi hjeot, 438. 
 negotiable injstument oonfided to another person, 4881 
 
 (1) completed instrumv"^^*, 489. 
 
 grounds of liabi. ij, 248. 
 
 (2) blank instruments, 440. 
 
 current phraseology, 441. 
 
 criticism, 441. 
 
 blanks known to transferee, 443. 
 customary efiFect of blanks, 448. 
 estoppel, 444 
 
 blanks unknown to transferee, 447i 
 (8) spaces in instruments, 43, 
 
 carelessness as to, 107. 
 (4) signed slips of paper, 448. 
 
 imperfection known, 448. 
 
 unknown, 448. 
 tummary, 440. 
 
 non-negotiable instruments confided to another person, 448, 
 
 deed, estoppel applies to, 846v 449. 
 
 completed instruments, 453. 
 
 blank instruments, 453. " 
 
 blanks known, 4S8. 
 
 unknown, 4dS. 
 documents stolen or found — 
 
 negotiable instruments, 498. 
 
 carelessness, 4S7. 
 
 complete and incomplete Instruments, 458. 
 
 criticism of present rules, 439. 
 
 egoism and altruism, 460. 
 
 signed slips of paper, 463. 
 
 current; practice, 465. 
 
 the codes, 468. 
 
 non-negotiable instruments, 467. 
 summary of chapter, 470. 
 
 EXPECTED CHANGE (see Anticipated Chanqb). 
 
 F. 
 FACT AND INTENTION — 
 
 mif :>' .v:-esentation of, 68. 
 FACl' A. > AW— 
 
 misi.av,.ri -lutdor -l, 78. 
 FACT i»--!>> 'J \1..-.:S — 
 
 m\stt,'jXi''.b\\%%.oxi. of, 78. 
 FACTORS— • 
 
 conflict between courts and parliament, 850. 
 confusion in Factors Acts, 340. 
 
IVBXZ. 
 
 639 
 
 1 
 
 FACTORS (oonHnned) — 
 
 general principle, sufflcio.. . for factorn, 350. 
 
 •^.iT'j*"*.*! '=°n'»l«*«~"on" ignored in Factors Acts, 874 
 good. Intrusted to one who is a fact or. 851. 
 
 ■pecially accredited factor, 85t 
 
 tuerchant, SSa 
 
 review of legislation, 85a *"** '*°*°'"' ^^' ^^^ 
 
 " factors cannot pledge," 858; 86a 
 
 corrected by statute, 855. 
 
 criticism of the statute, 858. 
 
 ^IT!" "/ "!If T'"' "^'^' ""'■''' '^' «•'"'«"* ^f the owner." 85a 
 possession of goods for consignment or sale. 860. 
 vendor retaining possession or indicia, 861. 
 
 purchaser prematurely getting possession or indium 864 
 mirm'° "** '^^^^^'' *"" "•«"««« «ff«<=ted by all documents of 
 
 summary, 866, 
 
 American legislation. 88a 
 FAIRS — 
 
 power of agents when dealing at, 4081 
 PALSAVERT, III, 14a 
 FORGERIES — 
 
 duty to guard against, 23, 4a 
 
 not advising of, 185. 
 
 see Lmxma Into Skodbity; Bank Pass-books; Crime. 
 FRAUD — 
 what is, 859. 
 
 as affecting priorities, 859, 285. 
 used by court of equity as against legal estate, 857. 
 not essential to estoppel, 8a 
 
 sometimes an ingredient in misrepresentation, 89. 
 
 diverse views, 8a 
 
 reconciliation by classification, 87. 
 
 possession of goods obtained by, 803. 
 
 possession of indicia of title obtained by. 803 
 
 ° CRmr""" *^'''''° ^""^ *"'* ^°^' with regard to fraud, 97. See 
 
 as affecting character of change of position, 164 
 
 dul^y to guard against fraud as compared with crime. 4a 
 
 G. 
 
 GOODS (see POSSESSION of Goods; Sale of Goods; Ostensible Owner- 
 ship; Ostensible Aqenoy). '^'^uiuk uwner- 
 
 H. 
 
 HALIFAX V. WHEELWRIGHT RULE. 18a 
 
 either inaccurate or estoppel insufficiently stated, 18a 
 
540 
 
 inaBZ. 
 
 HISTORY OF ESTOPPEL, 7. 
 
 HONEST (see Fkaud). 
 
 HORSES — 
 
 power of agent to warrant upon sale, 493. 
 
 IMPLIED MISREPRESENTATION— ' 
 certainty, 14, 141. 
 general statements as to, 14. 
 examples, 15. ' 
 
 distinction where fraud, 17. 
 
 INDICIA OF TITLE— 
 
 possession of by third party will estop true owner, 811, 818, 815, 81fl, 
 835. 888, 850-869, 407. 
 even if possession obtained by fraud, 808, 804, 812. 
 as applied to ambulatory instruments, 407. 
 when stolen or found, see Custody of Docujmbnt& 
 INDIRECT MISREPRESENTATION (see Dibect). 
 
 INFANTS— 
 
 estopped by misrepresentation of agent, although innocently made, 00. 
 
 INNOCENT (see Fraud). 
 
 INNOCENT PERSONS SUFFERING (see LlCKBAEBOW v. Masoh). , 
 
 INSURANCE BROKER — 
 
 extent of authority, 489. 
 INTENDED TO BE PASSED ON — 
 
 delivery orders, 135. 
 
 warehouse receipts, 136. 
 
 letters of credit, 136. 
 
 bills of lading, 126. 
 
 certificates of shares, 136. 
 
 company's reports and prospectuses, 137. 
 
 commercial agencies, 128. , 
 
 stock exchange 128b 
 
 title deeds, 128. 
 
 no defenses, 138. 
 
 persons who will probably be questioned, 129, 
 
 negotiable instruments, 139. '' 
 
 subscription lists, 180. 
 
 see Ambulatokt Instruuents. 
 
 INTENTION — 
 
 misrepresentation of, will not estop, 68. 
 
 JUSTIFICATION OF ESTOPPEL, 6. 
 
IKDBX. 
 
 541 
 
 KNOWLEDGE— ' 
 
 by.8tander must be aware of his own rigbta, 90 
 estoppel-aseerter must be unaware of bystander's rights, Oa 
 of incorrectness of misrepresentation, means of, 187. 
 
 L. 
 
 LANDLORD — 
 
 giving undertaking to grant lease which he had already given. 22& 
 LAW— 
 
 misrepresentation of, 74 
 . LAW MERCHANT — 
 
 usual solution of certain questions, 870. 
 antagonism to general law, 874 
 what is it, 873. 
 
 LEGAL AND EQUITABLE ESTOPPELS — 
 distinction, 6. 
 
 LEGAL ESTATE — PRIORITY BY — 
 the scramble, 253. 
 tt6» pig, ibi priority, 254, 
 contrasted with estoppel, 254, 26a 
 originated in defective administration, 335. 
 
 equity checked by it, 2661 
 
 equity introduces questions of fraud, 357. 
 union of courts and opportunity for reform, 258. 
 
 :s« f::o.a°™,r^"'" •• "--^ »» ■»"^« ^^ -«•'«. '^ 
 
 actual and contractual estates, S68l 
 support for new methods, 271. 
 not apply to estoppel of owner of shares, 844. 
 not applicable to Factora Acts, 374. 
 LICKBARROW v. MASON RULE— 
 
 an anticipation of estoppel by assisted misrepresentation. 7, 17a 
 not disparate from estoppel, 17& »•»*•«» 
 
 priorities, 179. 
 
 bills of exchange, 179. ' * . 
 
 principal and agent, 18a 
 
 sales of goods, 181. 
 
 Mr. Pomeroy's concurrence, 18L 
 
 ubiquity of rule, 184. 
 
 the case itself, iSi 
 not incapable of support, 188. 
 LOST («ee Cdstodt of Doootiento). 
 
5-42 
 
 IKDEX. 
 
 LULLING INTO SECURITY, 40. 
 
 inactivity may be a change of position, 183. 
 
 vendor handing receipt for purchase-money to agent who keeps 
 the money and delivers receipt to purchaser, 184 
 not advising of forgery, 185. 
 not objecting to accounts, 105, 18A. 
 must be damage to estoppel-aaMrter, 147. 
 see CHAnaE of Positiom; 
 
 M. 
 
 MARGINAL WRITINGS (see Ambulatoet Instruments^ 
 
 MARKET OVERT, 404 
 
 MASTER AND SERVANT (see Peinoipal and Aamrr). 
 
 MATERIALITY OF MISREPRESENTATION AND ASSISTANCE* 80. 
 several misrepresentations, 81. 
 
 MEDIUM POWERS — 
 assumed to exist, 488. 
 when withheld, 400. 
 
 see Principal and Agent.'' 
 
 MISREPRESENTATION— j\ 
 
 definition, 12. 
 
 necessity for, 13. 
 
 classification, 13. 
 
 personal and assisted, 18. See Assisted Misrepresentation. 
 
 direct and indirect, see Direot and Indirect. 
 
 active and passive, see Passive Misrepresentation; Luluno Into 
 Securitt. 
 
 expressed and implied, 14 See Implied Misrepresentation. 
 
 MORTGAGE DEBENTURES (see Ambulatory). 
 
 MORTGAGEE — 
 
 estoppel by conduct with reference to deeds, S3, 243, 279. 
 
 carelessness essential, 105. 
 estoppel by misstatements, 229. 
 
 MORTGAGOR — 
 
 estoppel as to amount stated to be secured by mortgage, 23, 418. 
 even although himself deceived, 95. 
 
 MOTIVE — 
 
 what was the, 144 
 
 K 
 
 NATURE AND EFFECT OF ESTOPPEL, 187. 
 as a cause of action, 187. 
 
 relief granted, character of, 190. 
 
 goods not ordered to be delivered where title rests on estoppel, 190. 
 
INDEX. 
 
 54a 
 
 keeps 
 
 80. 
 
 Into 
 
 ,190. 
 
 NATURE AND EFFECT OF ESTOPPEL (continued)— 
 
 amount of damages recoverable, 191. ) ; 
 
 parties and privies, see Parties and Privies. 
 
 does estoppel bind purchasers from estoppel-denier, 190. 
 
 creditors of the estoppel-denier, 208. And see Cred- 
 itors. 
 in favor of assignee of estoppel-asserter, 220. 
 NEGLIGENCE— 
 
 double application of word, 98. 
 carelessness substituted, 99. 
 see Carelessness. 
 
 NEGOTIABLE INSTRUMENTS — 
 
 definition, 870. 
 
 transferee suing in his own name, 870. 
 
 honest acquisition confers title, 878. 
 
 negotiability and transferability, 380. 
 
 negotiability explained, 883, 399. 
 
 application of estoppel to, 179. 
 
 ambulatory and non-ambulatory, 885. See Ahbxtlatory. 
 
 cycle through which law passed, 380. 
 
 summary, 389. 
 
 see ExEODTioN OF Documents; Custody of Documents. 
 NEGOTIABILITY BY ESTOPPEL — 
 
 reason for statements of doctrine, 401. 
 
 diflSculty of accepting doctrine, 403. 
 
 NEMO DAT QUOD NON HABET, 290, 811, 835, 350, 89a 
 
 o. 
 
 OMNIBUS DRIVER — 
 
 acting contrary to instructions, 497. 
 ONUS OF PROOF — 
 
 as to the actuating motive, 145. 
 OPINION — 
 
 misrepresentation of, 72. 
 OSTENSIBLE AGENCY- 
 
 contrasted with ostensible ownership, 238, 486. 
 confusion between, 239, 
 benefit of distinction, 242. 
 
 agent to borrow upon deeds exceeding his authority, 244 
 agent to sell goods exceeding his authority, 240. 
 estoppel as to existence of agency, 238, 240. • 
 
 extent of agency, 240. <^ 
 
 carelessness essential, 40, 105. 
 
 see Principal and Agent; Specific heada 
 OSTENSIBLE OWNERSHIP — 
 
 contrasted with ostensible agency, 288, 480. 
 confusion between, 239. 
 benefit of distinction, 243. 
 
544 
 
 SA 
 
 INDEX. 
 
 OSTENSIBLE OWNERSHIP (continued) — 
 
 accrediting title, 28& 
 
 where ostensible owner is a real agent, 8431 
 
 will not support an act of agency, 247. 
 
 application of estoppel, 24, 89, 24a 
 
 in trustees, 254, 293, 811. 
 
 involuntary trustees, 29& 
 
 name of purchaser painted on goods, 804. 
 
 owner defrauded, 9& 
 
 see Possession of Goods; Indicia of Titlb. 
 OVERDUE DOCUMENTS — 
 
 equities of obligors, 42a 
 
 title of true owners, 42a 
 
 P. 
 PARTIES AND PRIVIES — 
 
 purchasers from the estoppel-denier, 196. 
 who are privies, 196ii 
 
 rule as to privies not intended for estoppel by misrepresentation, 198. 
 suggested solution, 199. 
 
 relation of to rule respectinj^ creditors of estoppel-denier, 209. 
 PARTNERSHIP— ,, 
 
 relation to agency, Sia 
 
 estoppel, 5ia 
 use of non-partner's name, S14. 
 
 estoppel although estoppel-denier himself defrauded, 9& 
 representation of partnership, 22. 6ia 
 where defendant never a partner, 5ia 
 
 defendant is a retired partner, 511. 
 duty to give notice, 41, 611. 
 three classes: 
 . 1. Those who had prior dealings with firm, 5ia 
 
 a Those who had none, but who were aware of its membership, 
 
 6ia 
 a Those who had neither prior dealings, nor such knowledge, 519. 
 firm's name, 519, 624. 
 
 historic and indicative names, 620. 
 conflict between joint and several creditors, 2ia 
 dormant partner, when liable, 247. 
 
 PASSED ON (see Intended to be Passed on; Ahbulatobt). 
 PASSIVE MISREPRESENTATION — 
 
 duty of activity, 40, 42, 48-67, IOC, 18^ 185, 13a 
 
 as to recorded transactions, 138. 
 no duty to anticipate ignoranoe, 60. 
 
 of insurance company to advise aa to premiums, 6a 
 to wsra assinst self-dscsntior:. ({A. 
 of surety to warn creditor not to release debtor, Oa 
 of purchaser to advise vendor of non-arrival of goods, 07. 
 see Standino-bt. 
 
INDEX. 
 
 545 
 
 tion, 198. 
 
 ibership, 
 dge, 519. 
 
 •7. 
 
 iE*ATENTEE — 
 
 duty to advise intending pnrohasen, OL 
 POLICIES— 1 
 
 assignee's rights regarding prior equities, 417. 
 POSSESSION OP GOODS — 
 
 mere possession not appearance of ownership, 297. 
 
 by factor or auctioneer constitutes appearance of ag^noj, 346. 
 
 when constitutes appearance of ownership or agency, 296, 484 
 
 character of the goods, 298. 
 place, 298. 
 
 usual employment of the person, 299, 
 
 xeputed'ownership statute, 800. 
 contrast with estoppel, SOOl 
 
 vendors and vendees, 801. 
 
 name of vendee painted on goods, 804. 
 
 other circumstances, 801. 
 
 obtained by fraud, 802. 
 
 by merchant, when appearance of ownership, 813. 
 by person who is both mercliant and factor, 611. 
 
 for consignment or sale, 860L 
 
 POSSESSION OP TITLE DEEDS, PRIORITY BY, 276. 
 current phraseology, 276. 
 suggestion of estoppel, 276i 
 possession a circumstance merely, 378. 
 tables of oases, 279. 
 
 analysis of them, 288. 
 estoppel the true doctrine, 287. 
 
 PREJUDICE (see Change of FoBvaos), 
 PRINCIPAL AND AGENT — 
 
 propositions respecting estoppel, 478. 
 
 general and special agency discussed, 474. 
 
 single and multitudinous instances of employment, 474 
 
 application of estoppel, 180, 488, 
 
 estoppel as to existence of agency, 488. 
 
 . extent of agency, 346, 488, 486, 
 application of distinction, 484. 
 estoppel in what cases, 487. 
 medium powers, 488. 
 
 agent employed to perform certain duty, 488. 
 in certain capacity, 488. 
 to act in line of particular business, 488. 
 to act under certain circumstances, 488. 
 when employment arises out of legal relation, 48S. 
 horses, sales of, power of agent to warrant, 493. 
 "for the master's benefit," 496. 
 
 distinction between tort, deceit and estoppel, 287. 
 secretary of company acting for himself, 496. 
 deceit and estoppel compared, 497. 
 partner acting for his own benefit, 499. 
 80 
 
546 
 
 l*fDEiC. 
 
 partnership cases, 80a 
 borrowing po«reM,aO& 
 extrinsic facts, 80a 
 
 iTtorn*^®""" exceeding authority SOt 
 
 E;LrgTnr;a"r*--''<>'^^.»o^. 
 
 appearance of authority 5,7"'"'""* '^'^^P** «0a 
 
 factor who is alwtrkder! 811 
 
 agent also an owner, Ki' * s 
 
 by possession of reoAinf *^- 
 
 """'""»" JKrixHolion, 1501 
 
 '•gal ertate, IS& 
 PPBCH ASHM PBOM ESTOPPPr a ==™ 
 
 Q. 
 
 QUI PRIOR 1ST TEMPORE, EXa- 
 resemblance to estoppel, 291. 
 
lot 
 
 n. 
 
 188. 
 
 m. 
 
 ™»A»dPbivie8). 
 
 »8Ain) Pbiyocs). 
 
 ^^ (see Ajxnoi- 
 
 CaBDiTOJBa 
 
 RESCISSION— 
 
 compared with misrepresOTtatloi, ML i 
 
 RESTITUTION— 
 
 its relation to estoppel, S3ai 
 
 is fraud necessary, 225, 
 
 RUBBER STAMPS— i 
 
 custody of, 65. 
 
 a 
 
 SALE OP GOODS— 
 
 °Cncy!ji°l. "'""''" ^*'''*" °^°'^^'' '*'''^*"**'P '^"^ <«<»°"'We 
 estoppel of owner by wrongful sale^ 246. 
 
 where owner tricked, 181. 
 power of agent to give warranty, 492. 
 
 propertyipasees by estoppel uhder statute, S08. 
 appearance of authority to sell, 484. 
 
 see OSTENSIBLB OWMIBBHIP; OBXaWOLB AOBKOT. 
 
 SCRIP (fiBe AmbvlatobtX 
 SEAL (see Ccstody of Seal). 
 
 SHiitRES, CERTIFICATES dF- 
 
 estoppel of company, 28, 40, 280, 28i 800, 818; 84a 
 although itself deceived, 95. 
 
 ^^'''Sr^''''^ ^'^ AMBULAXOET toSTEUMKNtB; DOOUKENTB OP 
 SHAREHOLDERS— 
 
 tther^CSe^^^ir^^^^ deny validity of .on,e shares upon 
 
 ^^s^ntetionTwa '" ""'"^^' *'''*'"«^ "°' "'' '^P^'* ''^^'^^ °' "i^'^P"- 
 SIGNATURES MISAPPROPRIATED (see Execution of Documen^x 
 SPACES IN INSTRUMENTS (see ExEounoN of Documenib> 
 STANDING-BY— 
 
 duty when mistake is observed, 89. 
 
 must be aware of my own right, Oa 
 
 other party mast be unaware of my right, 9a 
 
 "w*m ' «*«>°»ble ground for assuming other party's ignorance, 
 
 at tax sale, 2a ^ ~ 
 
 building on another's land, !0a 
 
 see Passive Misbephesentation. 
 STOCK EXCHANGE — 
 
 information to, intended for members; 12a 
 
 STOLEN AND FOUND INSTRUMENT (see Custody of Instruments). 
 
648 
 
 INDEX. 
 
 STOPPAGE IN TRANSITU - ^ 
 
 affected by transfer of bill of lading, 819. 
 e otoppel the true reason, 827. 
 
 statute as to other documents of title, 839, 865. 
 SYMBOLISM, 821 See Documbnto of TlTUt 
 
 : * T . ■ S 
 
 TAX SALE — 
 
 standing-by at, 2«. 
 
 TITLE DEEDS (see Possession of Title DeedsX 
 TORT — 
 
 liability of partners, 529. 
 compared with estoppel, 498. 
 TRUSTEE — 
 
 ^TnS. m"'"* *"'"" "" '°^"""''" by intending purchaser of the • 
 ostensible ownership, estoppel by, 254> 264, 840. 
 
 VENDORS AND VENDEES OP GOOI^ (see Possbbsion of Goods). 
 VOID AND VOIDABLE (see Execution of Documentol 
 VOUCHERS (see Ambulatory). 
 
 W. 
 
 WAREHOUSE RECEIPTS (see DooUMBNiB OF TiTLEX 
 WAREHOUSEMAN — 
 
 issuing erroneous receipt, 229, 288. 
 
 WARRANTY— 
 
 power df agent to give, 49a 
 
 / ., 
 
ling purchaser of the 
 
 IBNTS). 
 
 I 
 
 . ) 
 
 BsssioN OP Goods), f 
 
 .bX