Olortif U Slam ^rl|nal Hibrarg KDC 347:E7R2i""'"*"^ "*"'"^ \ \ \ \ \ \ \ \ Cornell University Library The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924024629432 THE LAW PERSONAL BAR IN SCOTLAND Printed, by Neili, and Co., Itd., Edinburgh FOR W. GREEN & SO"N", LIMITED May 1921 personal Bar A TREATISE ON THE LAW OF PERSONAL BAR IN SCOTLAND COLLATED WITH THE ENGLISH LAW OF ESTOPPEL IN PAIS BY JOHN RANKINE, K.C., M.A., LL.D. — ADVOCATE PEOFESSOK OE SCOt's LAW IN THE UNIVBESITT OF EDINBUBGH AtTTHOK OF "THE LAW OF LAND-OWNERSHIP IN SCOTLAND,'' AND "THE LAW OF LEASES IN SCOTLAND" EDINBUEGH W. GKEEN & SON, LIMITED 1921 /3 fxr^^ In imitation of the Titles commonly given to the extant writings of two unknown Koman jurists, this work may be described as at once a Frag- mentum Veteris ICti and a Scoticarum et Anglicarum legum Collatio on its subject. That subject had its charm for the author as being free from interference by statute, e^^tUp sp fat as the legislature has codified judge-made law, and its drawback as being impatient of strict delimita- tion and classification. The aim of the book is, therefore, to set forth all that a Scots lawyer would expect to find in a treatise intituled Personal Bar, and to do so under the headings to which he is accustomed. The text has had the invaluable benefit of revision by Mr William Chree, K.C., of the Scottish Bar. J. R. COKTE^TS List of Cases cited PAGE CHAPTER I Introduction CHAPTEE II Bae to Disclaimer of Title ....... 10 CHAPTER III Rei Intbrventus — Part Performance 28 CHAPTER IV Acquiescence .......... 54 Parties under no antecedent contract ..... 54 Parties under contract . . . . . . . .68 Acquiescence in contravention of building restrictions and the like 68 Alteration of written contract ...... 76 Circumstances in which acquiescence is readily admitted . 89 Miscellaneous ........ 106 CHAPTER V Acquiescence (continued) — Mora or Taciturnity . . . 117 Constituted claims ........ 128 Unconstituted claims .... ... 131 CHAPTER VI Homologation . Approbate and reprobate Personal disability Agency Partnership Companies Arbitration Lease . Insurance Adoption . 140 146 152 157 175 179 192 196 201 209 ■vm CONTENTS CHAPTER VII PAGE Holding Out . 215 Agency . 217 Factors Acts . . 228 Partnership . CHAPTER VIII . 243 Bar by Negligence . . 250 Essential error CHAPTER IX . 263 Bar by Concealment (Non-Disclosure) . . 266 Insurance — Marine . 269 Other . . 275 Caution or guarantee . 280 Partnerships and companies ..... . 288 Appendix — The Factors Acts . Index . 291 . 296 LIST OF CASES CITED A. V. B. (1629), 34. (1853), 88. A. B. V. C. D. (1853), 138. Aaron's Reefs v. Twiss, 90, 96. Abbott V. Howard, 276. Abercorn v. Grieve, 108. Abercorn, Ms. v. Langmuir, 61, 64. Aberdeen Mags. v. Menzies, 66. Aboyne, E. v. Ogg, 51, 79. Accidental Death Ins. Co. v. Mackenzie, 18. Acey V. Pernie, 209. Adair's Factor v. ConneU's Trs., 253. Adam v. Napier, 138. V. Newbigging, 288, 288, 289. V. Peter, 112. V. Wyllie, 92. & Forsyth v. Forsyth's Trs., 138. & Mathie v. Murray, 269. Addison v. Gandasequi, 105, 218. Adelphi Bank v. Edwards, 259. Advocate, L. v. Anderson, 48. African Gold Recovery Co. v. Gold Mining Co., 22. Agar V. Athenaeum Ass. Co., 184. AgUonby v. Watson, 82. Agnew V. Corcaphie, 12. Agra and Masterman Bank, 254. Agricultiirists' Cattle Assurance Co. cases, 99. Aitchison v. Aitchison, 132. Aitken v. Charles & Co., 244. V. Hunter, 134. Alchome v. Gomme, 15, 18. Alexander v. Alexander, 209, 268. Allan V. Allan's Trs., 133, 134. V. Gilchrist, 33. V. Hamilton, 145. V. Laidlaw, 139. V. Pattison, 8. V. Sawers, 105. V. Swan, 56. V. Young, Ross & Co., 269. & Son V. TurnbuU, 181. AUard v. Bourne, 167, 184. AUcard v. Skinner, 59, 60. Allhusen & Sons v. Mitchell & Co., 114. AUoa Mags. v. Wilson, 48. AUoway v. Braine, 97. Anderson v. Bank of Scotland, 7, 143. V. Buck & Holmes, 222. V. Commercial Union Ins. Co., 277. V. Kallef, 111, 112. V. Hamilton, 110. V. John Croall & Sons, 171, 172. V. Robertson, 40. V. Starkey, Fletcher & Co., 91. Anglo-American Tel. Co. v. Spurhng, 216. Annand v. ElUston Tenants, 18. Anstruther v. Greenshields, 198. Ant. Jurgens Margarinefabriken v. Louis Dreyfus & Co., 236, 243. Arbouin v. Sime, 26. Arbuthnot v. Arbuthnot, 102. V. Campbell, 49. V. Reid, 40, 49. V. Symon, 126. Arden v. SuUivan, 15. Argyle, D. v. Russel, 83, 199. Arkwright v. Newbold, 290. Armani v. Castrique, 116. Armory v. Delamire, 218. Armstrong v. Turquand, 198, 208. & Sons, 174. Armstrong's Ass. v. Leith Banking Co., 168. Arnold v. Cheque Bank, 215, 251, 251, 253. Amott V. Brown, 68. Arrot V. Whyte, 68, 68. Ashbury Carriage Co. v. Riche, 162, 179, 180, 182, 182. Ashby V. Blackwell, 254. Ashpitel V. Bryan, 115. AshwaU, In re, 93. Ashworth v. Law, 23. Asphaltic etc. Co. v. Glasgow Corp., 162. Assets Co. V. Bain's Trs. and Phillip's Trs., 118, 119. V. Falla's Tr., 93, 120. V. Shirres' Trs., 120. V. Tosh's Trs., 120. Associated Oil Carriers v. Union of Canton, 202. Athenaeum Life Ass. Co. v. Pooley, 184. Athya v. Clydesdale Bank, 90. Attenborough v. London and St Kather- ine's Dock Co., 27. LIST OF CASES CITED Att.-Gen. v. Great Eastern Ey. Co., 182. V. Hotham, L., 14. V. Manchester Corp., 68. V. Mersey Ry. Co., 182. V. Odell, 190. to the Prince of Wales v. CoUom, 56. Attwood V. Small, 179. Australian Widows' Fund v. National etc. Assn. of Australasia, 273. Axmann v. Lund, 22. Ayala & Co. v. Dowell, 102. A3rr Road Trs. v. Adams, 103. Ayrey v. British Legal Ins. Co., 201, 207, 276. Aytoun v. Douglas, 64, 64. V. Dundee Banking Co., 8, 244. V. Melville, 63, 65. • Backhouse v. Taylor, 195. Bagot V. Chapman, 264, 265. etc. Co. V. Clipper etc. Co., 162. Bahia Ry. Co., In re, 267. and San Francisco Ry. Co., 186, 187, 188. Baikie v. Wordie's Trs., 87. Bailey v. Foster, 15. V. House, 215. V. Macaulay, 160, 161. Baillie v. Abercromby, 173. V. Fraser, 78, 81. V. PoUock, 195. V. Young, 91, 92. Bain v. Assets Co., 2. V. Ly. Seafield, 66. Baines v. Swainson, 231, 233, 234. Baird v. Caledonian Ry. Co., 90. V. Dundee Mags., 138. V. Graham, 86. V. Mount, 84, 84. Baker, In re, 120. V. Jones, 200. V. Willis, 188. & Adams v. Scottish Sea Ins. Co., 270, 274. Balfour v. Cook, 108. V. Ewing, 33. V. Thomson, 45. V. Wood, 143. Junor & Co. v. Russell, 281. Balkis ConsoUdated Co. v. Tomkinson, 186, 188, 192, 192. Ballantine v. Stevenson, 49. Ballantyne v. Barr, 91. V. Carter, 46. Balls V. Westwood, 17. Bank of England v. Cutler, 171, 173. of England v. Vagliano Bros., 115, 202, 251, 254. of Hindustan v. Alison, 7, 180. of Ireland v. Evans's Charities, 251, 252, 256, 258. Bank of New South Wales v. Goulbum Proprietary, 222. of Scotland v. Morrison, 281, 283. of Scotland v. Stewart, 55, 64. of Scotland v. Watson, 168. of Syria, In re, 95. Bankart v. Tennant, 56. Bannatyne v. Maclver, 221, 221. V. Trotter, 154. Banner v. Gibson, 119. Banque Beige v. Hambrouck, 220. Jacques Cartier, La v. La Banque d'Espargne, 69, 63, 166. Barber v. Gingell, 211. Barclay v. E. Fife, 30, 37. V. G. N. of Scotland Ry. Co., 86, 130. V. Neilson, 77. Bargaddie Coal Co. v. Wark, 55, 76, 78, 79, 80, 80, 80, 80. Bargate v. Shortridge, 94, 100. Baring v. Abington, 20. V. Corrie, 232. Barker v. Barker, 102. V. Stead, 160. Barnetson v. Petersen Brothers, 158. Barnett v. Lambert, 160, 160. V. S. London Tramways Co., 224. Barns v. Barns' Trs., 138. V. Young, 154. Barr v. Turner, 33. V. Wilson's Tr., 194. Barrett v. Deere, 215, 220. V. Jermy, 206. Barron v. Rose, 49. Barrow, 6, 186, 186, 191. Barton v. L. & N.W. Ry. Co., 213. V. North Staffordshire Ry. Co., 257. V. Richardson, 62, 62. Bartram o. Lloyd, 166. Barwick v. English Joint Stock Bank, 189. V. Thompson, 8. d. Richmond Mayor v. Thomson, 15. Basset v. GraydoM, 23. Bates V. Hewitt, 274, 276. Bathie v. L. WharncUffe, 38, 42, 50. BaumvoU Manuiactur v. Gilchrest & Co., 247. Bawden v. London etc. Ass. Co., 206, 279. Baxendale v. Bennett, 7, 253, 258, 258. V. Harding, 277. Baxter's Exr. v. Baxter's Trs., 132, 132. Bayley v. Addison, 77. Beale v. Mouls, 177. Beatie v. Lambie, 36. Beattie v. L. Ebury, 4, 36, 172, 172, 173. V. Wood, 139. & Muir V. Brown, 139. Beauchamp, E. v. Winn, 60, 61. Beaufort, D. v. Neeld, 219. V. Patrick, 62, 63, 63. LIST OF CASES CITED XI Bechuanaland Exploration Co. v. London Trading Bank, 254, 260. Bedford, D. v. British Museum Trs., 73, 74, 75. Bedouin, The, 274, 274. Beeman v. Duck, 115. Bees V. WUhams, 22. BeU, 95. V. Ly. Ashburton, 94. V. BeU, 33. V. Drummond, 113. V. GoodaU, 40, 51, 51. V. Gunn, 125, 126. V. Laurie, 149. V. Marsh, 60, 251, 251, 253. BeU's Tr. v. Bell's Tr., 132, 147, 147. Bellerby v. Rowland Co., 99. Belsize Motor Supply Co. v. Cox, 241. Benham v. United Guarantee and Life Ass. Co., 283. Beningfield v. Baxter, 135. Benson v. Hadfield, 102. Bentinok v. London J.S. Bank, 226, 261. Bentley, In re, 219. Bentsen v. Taylor, Sons & Co., 201. Berkeley v. Archbishop of York, 20. Berry v. Berry, 145. Bertram v. M'Intosh, 244, 244. BessaU v. Landsberg, 21. Bett V. Smith, 90. Betteley v. Reed, 24. Beveridge v. Smith, 92. Biddle v. Bond, 23, 24, 25, 25, 26. Biddulph V. Poole, 21. Bidoulao v. Sinclair's Tr., 197, 198. Biggar v. Rock Life Ass. Co., 206, 207, 279, 279. V. Wright, 286. BiggerstafE v. Rowat's Wharf, 95, 167, 181. Biggs V. Evans, 233, 233. BignaU v. Gale, 194. Birch, In re, 120. Bird V. Brown, 163, 168, 168, 169. Birkbeck etc. Soc, 221. Birmingham etc. Jn. Ry. Co. v. Locke, 94. Birr R.D.C. v. Birr U.D.C., 68. Birrell v. Dundee Gaol Comrs., 130. Bishop V. BaEds ConsoUdated Co., 163, 192. Bishop of the Isles v. Schaw, 145. Black V. Cornelius, 164. V. Cullen, 61. V. Incorporated Baters, Glasgow, 27. & Co. V. M'CaU & Co., 229. Blackburn v. Buchanan, 94. V. Pinlay, 94. Blackburn Bldg. Soc. v. CunlifEe Brooks & Co., 221. Blackburn, Low & Co. v. Haslam, 275, 279. Low & Co. V. Vigors, 206, 213, 274. Blackwood v. Hamilton's Creds., 134. Blades v. Free, 225. Blain v. Ferguson, 83r 199. ■u. Paterson, 107, 107. Blair v. Bromley, 120. V. Kinloch, 129. V. Taylor, 45. Co., In re, 289. Blake v. Gale, 120. Blanchard v. Bridges, 61, 62. Blanckensee v. Saqui, 242. Bloomenthal v. Ford, 7, 191. Blore V. Sutton, 40. BlundeU-Leigh v. Attenborough, 238. Blyth V. Dennett, 83, 200, 201. Boe V. Anderson, 138. Bolden v. Pogo, 101, 103. Bolland, 93. Bolton Brothers v. Lambert, 163. Partners v. Lambert, 170. Bonanza Creek Co. v. Rex, 180. Bonar v. M'Donald, 285. Bonbonus, Ex parte, 176. Bo'ness Canal v. M'Alpine, 176, 176. Bonita, The, 165. Bonner v. Wilkinson, 68. Bonnington Sugar Refinery Co. v. Thomson's Trs., 179. Bonthrone v. Patterson, 287. Bonzi V. Stewart, 229, 237. Boog V. Jamieson, 287. Borthwick v. Grant, 226. V. Soot, 149, 151, 152. V. Shepherd, 91. V. Urquhart, 152. Bosville V. L. Macdonald, 138. BosweU V. Boswell, 131, 142. BothweUs V. E. Hume, 145. Boulton V. Mansfield, Ramsay & Co., 249. Bourne v. Freeth, 247. Bovill V. Dixon, 220. Bowes V. Foster, 8, 139. Bowker v. Smith, 270. Bowman v. Taylor, 23. Boyd V. Phelan, 201. V. Union Bank, 209, 209, 211, 211. & Forrest v. G. & S.W. Ry. Co., (1911), 268. (1912), 268. (1914), 268. (1915), 130, 268, 288. Boyes v. Dinwoodies, 40. Boyson v. Coles, 158. Bradley v. Essex and Suffolk Accident Indemnity Society, In re, 275. & Cohen v. Ramsay & Co., 228. Braidy v. Braidy, 38, 46. Braithwaite v. Gardiner, 115. LIST OF CASES CITED Brember v. Rutherford, 246, 248. Bremner v. Mabon, 137. V. Taylor, 139. • Brennan v. Bolton, 51. Brereton v. Evans, 16. Brewer v. Sparrow^ 168. Brice, 249. V. Wilson, 169. Bridge of Allan Water Co. v. Alexander, 236. Bridges v. Hunter, 272. Briggs, Ex parte, 96. Bright V. Button, 160. Brisbane v. Harvey, 101. Brisbane's Trs. v. Crawford, 102. V. Lead, 87, 126. Bristow V. Whitmore, 168, 169. Britain v. Rossiter, 48. British America Elevator Co. v. Bank of British N. America, 221. Equitable Ins. Co. v. G.W. Ry., 276. Guarantee Assn. v. Western Bank, 281, 287. Homes Ass. Corp. v. Paterson, 177, 248. Linen Co., 180. Linen Co. v. Caledonian Ins. Co., 254. Linen Co. v. Cowan, 213. Mutual Banking Co. v. Charnwood Forest Co., 179, 224. South Africa Co. v. De Beers Con- solidated Mines-, 180. Broadbent v. Imperial Gas Co., 66. Broadwood j). Hunter, 86, 130. Brocklesby v. Temperance Permanent Bldg. Soc, 226, 226. Brodie, 154. V. Smith, 93. Bromley v. Stanley, 21. Brook V. Biggs, 16. V. Hook, 209. Broomfield v. Young, 35. Brotherhood, 100, 184. Brougham v. Dwyer, 221. Broughton v. Aitchison, 27. Brown, 94. V. British Linen Co., 209, 211. V. Burtinshaw, 21. V. Campbell, 45. V. Kirkland, 139. V. Law, 173. V. Leonard, 247, 249. V. Marr, 228. V. Muir, 154. 0. L. BoUs, 140. V. Scottish Antarctic Expedition, 48. V. Thomson, 102. V. Whyte, 92. & Co. V. Bedford Pantechnicon Co., 231, 232. Browne v. AinsUe, 240. V. La Trinidad, 161. Brownlie v. Campbell, 266, 267, 267, 275. Browns v. Burns, 69, 70. Bruce v. Bruce, 130. V. Bruce Carstairs, 142. V. Carstairs, 11. BrudneU v. Roberts, 15. Bryant, Powis & Bryant v. La Banque du Peuple, 223. Bryce v. Ehrmann, 228, 228. Buccleuoh, D. v. Cowan, 58, 67. v". Edinburgh Mags., 57. Buchan, 96. Buchanan v. Baird, 29, 33. V. Buchanan, 40. V. Dennistoun, 43. V. Dunlop, 93. V. Glasgow Waterworks Comrs., 68. V. D. Hamilton, 1, 264. V. Harris & Sheldon, 49, 51. V. Somerville, 177. Buckmaster v. Harrop (1802), 52. (1807), 48. Buckner v. Jopp's Trs., 135. Bufe V. Turner, 277. Buist V. Taylor, 160. BuUen v. Mills, 8, 18, 19. Burbidge v. Morris, 160. Burchell v. Wilde, 249. Burchfield v. Moore, 115, 116. Burkinshaw v. NicoUs, 7, 191. Bmnes v. Pennell, 94. Burnet v. Ewen, 143. V. M'Kimming, 51. BurreU & Son v. Russell & Co., 77. Burrowes v. Lock, 267. Bushby v. Renny, 46. Busteed v. West of England Co., 208. Butchart v. Ireland, 106. Bute's Chaplain, Ly. v. Her Son, 142. Butter V. Poster, 77. V. M'Donalds, 12. C. B. V. A. B. (1885), 113, 118, 121, 148. Cadell V. Sinclair, 48. V. Stevenson, 65. Cadzow V. Lockhart, 86. Cahn V. Pookett's Co., 230, 231, 233, 234, 242. Cairncross v. Lorimer, 2, 4, 138, 251. Cairns v. Gerrard, 49. Cairns's Trs. v. Brown, 114. Calder v. DobeU, 105. V. Stewart, 39. Caldwall v. Caldwall, 155. Caldwell v. M'Callum, 87. Caledonian Debenture Co. v. Bernard, 90, 96. Ry. Co. V. Chisholm, 106. LIST OF CASES CITED XUl Callander v. Callander's Trs., 7, 142. V. Smith, 79, 84. Cambridge (Mayor) v. Dennis, 285. Cameron v. Cameron. 141. V. Dunskine, 103. V. TiUyard, 222. V. Young, 87, 87. Cammell, Ex parte, 94. Campania Niviera v. Clmrohill, 3. Campbell v. Anderson, 225. V. Ms. Bute, 66. V. Campbell, 8. V. Clydesdale Banking Co., 69. V. Dougal, 50. V. Douglas, 35, 52. V. Graham's Reps., 129. V. Lauder's Reps., 160. V. Lothians & Findlay, 93. V. M'Kinnon, 21, 51. V. M'Lauohlan, 44. V. M'Lean, 31. V. M'Lintook, 244. V. M'Pherson, 37, 51. V. Monro, 44. V. Robertson, 40, 51. V. RusseU & Co., 269. V. Simpson, 91. V. Stewart, 93. Campbells v. M'Glasban, 47. Cannam v. Farmer, 138. Carman v. Hartley, 21. Canning v. Farquhar, 276. Cantiere Mecoanioo Brindisino v. Janson, 203, 273, 274. Capital and Counties Bank v. Warriner, 236, 243. Carlberg v. Borjesson, 93. Carlisle and Cumberland Banking Co. v. Bragg, 263, 264. Carlton v. Bowcock, 17. Carlyle v. Baxter, 51. Carmichael v. Carmiohael's Exr., 8. V. Carmiohael's Trs., 148. V. Penny, 77. Carnegie v. Guthrie, 84. V. Montrose Mags., 11. CarneU v. Harrison, 154. Carnoway v. Stewart, 103. Carr, Se, 91. V. L. & N.W. Ry. Co., 4, 254. Carriok v. Carse, 107. Carritt v. Real and Personal Advance Co., 189. Carron Co. v. Donaldson, 84. V. Henderson, 214. V. Henderson's Trs., 62, 73, 79, 80, 84. Carruthers v. Thomson, 42, 76. CarsweU v. Steele, 136. Carter v. Boehm, 203, 268, 272, 273. V. St Mary Abbott's Vestry, 168. Carter v. Whalley, 247. Cartier, La Banque Jacques v. La Banque d'Espargne, 59, 63, 166. Cartmell (1874), 167, 183. Cash V. Taylor, 222. Cassaboglou v. Gibb, 174. Cassidy v. Connochie, 138. Cathn V.' Bell, 238. Caton V. Caton, 32, 37, 46. Cauder v. Hamilton, 21. Cave V. Mills, 113. Cawdor v. Lewis, 63. Cawley & Co., In re, 186. Central Ry. Co. of Venezuela v. Kisch,289. . Chadwick v. Manning, 3. Challes, 180. Chalmers v. Wood, 155. Chamberlain v. Young, 116. Chambers v. Criohley, 23. Chandler v. Ford, 6. Chanter & Co. v. Borthwick, 168. Chapleo v. Brunswick Fvdlding Soc, 172.. Chaphn v. Allan, 46, 46. Charles v. Blackwell, 222. Charles v. Shearer, 48. Cheesman v. Exall, 23. Cheltenham etc. Ry. Co. v. Daniel, 94. Cherry v. Colonial Bank of Australasia,. 172. Cheshire & Co. v. Thompson, 273, 274. V. Vaughan, 271, 273. Chejme v. Taylor, 71. Child V. Mann, 27. Chippenham Agreement, 184. Chisholm v. Renies, 129. Christie v. Louden, 93. Christie's Daughters v. Christie, 146. ChristinevUle Rubber Estates, In re, 90,. 290, 290. Christison's Tr. v. Brodie, 195. Church of England Ins. Co. v. Wink (or Hughes), 31, 38, 45. Chynoweth (1880), 90, 100. Citizens' Bank of Louisiana v. First National Bank of New Orleans, . 3, 34. City Bank v. Barrow, 232. of Glasgow Bank cases (1878-9), 95. of Glasgow Bank v. Moore, 176. of Glasgow Bank v. Parkhurst, 144. of Glasgow Bank Liqrs. v. Mac-- kinnon, 101. Civil Service Assn. v. Whiteman, 60. Clackmanan v. Nisbets, 46. Clare v. E. Bedford, 145. Claridge v. M'Kenzie, 16,,16. Clark, In re, 93. V. Adie, 14, 22. V. Lamont, 49, 51. V. Morrison, 106, V. Ross, 146. XIV LIST OF CASES CITED Clarke, Ex parte, In re Livesey, 116. V. Hart, 97. V. Perrier, 169. Clavering, 59, 61. Son & Co. V. Goodwine, Jardine & Co., 185. Son & Co. V. Hope, 89. Clayton, 93. Clegg V. Edmonson, 97, 98, 98. Cleghorn v. Tenants, 18. Cleivland v. Cavers, 155. Clements v. HaU, 98. Clerk V. Wright, 41. Clinan v. Cooke, 48. Close V. Holmes, 235. Clough V. L. & N.W. Ry. Co., 179, 198, 204. Clowden v. Culton, 152. Clugston V. Goold, 85. Clydesdale Bank v. Paton, 29, 44, 46. Engineering Co. v. Castaneda, 84, 85. Coasters, In re, ft3. Coates V. L. & S.W. By., 254, 254. Cochran v. Campbell, 152. V. Houston, 129. Ly. V. Ds. Hamilton, 152. Cockburn, 95. V. Clark, 139. V. Halyburton, 155. Cookerell v. Aucompte, 161. Cookran v. Irlam, 238. Cohen v. MitoheU, 93. Cole V. North-Western Bank, 229, 232, 232. Coleman v. Mellersh, 136. V. Riches, 227. Colemere v. Whitroe, 15. Coles V. Bank of England, 252, 258. CoUen V. Wright, 170, 172, 173, 173, 174, 175. Collier v. Ritchie & Co., 138. ColUngwood V. Berkeley, 247. Collins V. Blantern, 6. Collis V. Emett, 116. Colonial Bank v. Cady, 218, 261, 261, 262. Bank v. Hepworth, 262. Bank of Australasia v. Marshall, 258. Colquhoun v. Pindlay, Dufi & Co., 229. V. Wilson's Trs., 41, 47, 52. Colvil V. Jamieson, 135. Colville 13. Middleton, 62. Colvin V. Dixon, 220. V. Johnstone, 139. Comitti V. Maher, 4, 5. Condie v. Peddie, 112. V. Stewartj 160. Conot V. Harris, 100. Conyngham v. Conyngham, 107, 107. Cook V. North British Ry. Co., 123. V. Whellook, 17. Cooke V. Falconer's Reps., 137. Cooke V. Loxley, 7. V. Oxley, 15. V. Tombs, 41. Coope V. Rideout, 34. Cooper V. Blandy, 15, 17. V. Meyer, 115. V. Vesey, 254. Corbett v. HiU, 55. V. S.E. Ry. Committee, 68. Cork V. Youghal Ry. Co., 221. Cornish v. Abington, 3. V. ScareU, 16. Cornwal v. Wilson, 168, 169. Corsar v. Carmichael, 148, 152. Corsburn v. Pollock, 52. Cory V. Patton, 164, 169. Cosford Union v. Poor Law etc. Assn., 285. Cotching V. Bassett, 61. Cotesworth v. Spokes, 200. Cottam V. Eastern Counties Ry. Co., 254. County Life Ass. Co., In re, 219. of Gloucester Bank v. Rudry, 95. Theatres v. Knowles, 195. Court V. Berlin, 247. Couston V. Miller, 263. Coventry v. G.E. Ry. Co., 251, 254. Coverdale v. Eastwood, 46. Cowan v. Parnie, 173. V. L. Kinnaird, 55, 57, 58, 61. ■0. M'Micking, 111. Cowan's Hospital v. Robertson, 287. Coward v. Gregory, 200. Cowdray v. Ferries, 199. Cowell V. Simpson, 139. V. Watts, 55. Cowper 11. Fletcher, 15. Cox V. White, 41. Cragg V. Ford, 176. Craig V. Bell, 40. V. Budge, 78. V. Duffy & Co., 106. V. Greer, 74. V. Imperial Union Accident Ass. Co., 278, 278. Craig's Tr. v. Malcohn, 110. Crampton v. Varna Ry. Co., 30. Crawford v. Crawford, 154. V. Dunlop, 169. Crawshay v. Thornton, 27. Cree v. SomervaU, 100. Creighton v. Rankin, 283, 283, 285, 286, 287. Crellin v. Brook, 59, 176. V. Muirhead's Jud. Factor, 151. Criohton v. Crichton's Trs., 145. V. Keith, 82, 135. V. Syme, 45. Crickmer (1875), 191. Critchlow v. Party, 116. Croft V. Lumley, 179, 197, 198, 200. LIST OF CASES CITED XV Croll's Trs. v. Robertson, 91. Cromford etc. Ry. Co. v. Laoey, 94. Crook V. Seaford Corp., 62, 63. Cropper v. Smith, 22. Cross V. Williams, 161. Crossley v. Dixon, 22. Crowley v. Cohen, 272. Cruikshank v. Northern Accident Ins. Co., 206, 275, 277, 279. Cruickshanks v. Gow, 93. Crmnplin v. London J.S. Bank, 222, 258. Cubbison v. Cubbison, 140. Cullen V. Thomson's Trs., 163. V. Wemyss, 121, 123, 127, 133, 148. V. Wright, 137. Cumming v. Munro, 142, 142. Cuningham v. Duncan, 93. V. Skinner, 138. Cuninghame, 95. V. Boswell, 128. Cunningham v. Buchanan, 137. V. Cook, 10. V. Cunningham, 152. V. Gainer, 102. & Co., 222. Currie v. Guthrie, 139. V. M'Lean, 34, 48. Curtis V. WiUiamson, 105. Cuthbertson v. Young, 65, 65. CuthiU V. Hamilton, 93. Da Costa v. Newnham, 204. Dallas V. Dallas, 140. V. Leishman, 107. V. Paul, 145. Dalrymple v. Herdman, 73. V. Murray, 133. Dancer v. Hastings, 15, 15. Dane v. Mortgage Ins. Co., 281, 281. Dann v. Spurrier, 60, 63. Darling v. Darling, 132. Darnley, E. v. L.C.D. Ry., 77, 194, 195, 196. Darroch v. Rennie, 135, 198. Davenport v. The Queen, 198, 200. David Payne & Co., In re, 213. Davidson v. Davidson, 145. V. Logan, 195. V. Mackenzie, 107. V. Sprengel, 87. V. Stanley, 222. V. Thomson, 72. Davies v. London and Provincial Marine Ins. Co., 282, 282, 284. V. Marshall, 59, 63, 75. V. National Ins. Co. of New Zealand, 272. 1} Pries ldd> V. R. Bolton & Co., 182, 184. V. Sear, 61, 63. Davis V. Bank of England, 212. Davis V. Hyman & Co., 248. Davison d. Bromley v. Stanley, 21. Dawson v. Lawes, 286. V. Thorburn, 112. Dawson's Trs. v. Dawson, 149. Day, Re, 91. De Berkom v. Smith, 245. De Bussohe v. Alt, 59, 99, 166. De Costa v. Scandrat, 269. De Gorter v. Attenborough, 233. De Wolf V. Archangel Co., 204. Deas V. Aytoun, 193. Deans v. Crichton, 155, 155. Delaney v. Pox, 17, 18. Delvalle v. York Buildings Co., 182, 184. Dempsters v. Raes, 268, 284. Dendy v. NichoU, 200. Denniston Maona3nr & Co. v. Macfar- lane, 12. Denton's Estate, In re, 280, 281, 281. Derry v. Peek, 5, 29, 192, 250, 266, 267. Deuchar v. L. Minto, 198. DevUn v. M'Kelvie, 44, 44. Dibbins v. Dibbins, 163. Dick V. Cuthbertson, 93. Dickinson v. Valpy, 219, 245, 246, 246. Dickson v. Bell (1898), 81. (1899), 81. V. Grant, 193. V. Reuters, 173. Dishington v. Scot, 29, 36. Dixon V. Edington, 92. V. Evans, 120. V. Fisher, 147. V. Hammond, 23, 23, 23. V. Kennaway & Co., 187, 188, 189, 192. V. Muckleston, 3, 250. Dixons V. Monkland Canal Co., 89. Dobie V. Hyslop, 56, 64. V. Ms. Lothian, 82, 108, 198, 199. Dobson V. Groves, 194. Dodd V. Acklom, 21. Dods V. Walker, 78. Dodsley v. Varley, 240. Doe d. Bailey v. Poster, 15. d. Baker v. Jones, 200. d. Biddulph v. Poole, 21. d. BuUen v. Mills, 8, 18, 18. d. Colemere v. Whitroe, 15. d. Downe v. Thompson, 18. d. Egremont v. Courtenay, 21. d. Egremont v. Forwbod, 21. d. Gatehouse v. Rees, 200. d. Groves v. Douglas, 106. d. Harvey v. Francis, 16. d. Higginbotham v. Barton, 15, 18. d. Hull V. Wood, 15. d. Jackson v. Wilkinson, 10. d. Johnson o. Ba3rtup, 15. d. Knight v. Smythe, 19. XVI LIST OF CASES CITED Doe d. Leeming v. Skirrow, 15. d. Levy v. Home, 4. d. Linsey v. Edwards, 16. d. Lowden v. Watson, 17. d. Lyster v. Goldwin, 163. d. Mann v. Walters, 163. d. Manton v. Austin, 14. d. Marlow v. Wiggins, 17. d. MurreU v. Milward, 21. d. Nash V. Birch, 200. d. Nepean v. Budden, 15. d. Oliver v. Powell, 18. d. Plevin v. Brown, 16, 17. d. Roberts v. Roberts, 4. d. Strode v. Seaton, 17. d. Thomson v. Hodgson, 103. d. Williams v. Lloyd, 4. Doherty v. AUman, 73, 74. Dolby V. lies, 15. Dolman v. Orchard, 249. Donald v. Hodgart's Trs., 144. Donaldson 7;.Tainsh's Trs., 131, 149, 150, 150. Donelly v. Popham, 169. Doolan v. Midland Ry. Co., 4. Dougall V. Marshall, 102. Douglas V. Birrell, 64. V. Clapperton, 45, 46. V. Douglas's Trs., 143, 143. V. Ewing, 234. V. Murray, 123. Dow V. Beith, 149, 152. DoweU V. Dew, 49. Dowling V. Henderson & Son, 76. V. Pontyprid Ry. Co., 56. Downe v. Thompson, 18. Downes v. Ship, 96. Downie v. Laird & Sons, 36. Downs V. Cooper, 16, 17. Draper v. E. Manvers, 161. Drayton v. Dale, 115, 115, 115. Drew V. Drew, 193, 195. V. Nunn, 225. Driver v. Nairne, 167. Drummond v. Gow, 49. V. Hunter, 94. V. Muirhead, 104, 105. V. Scott, 50. Dudgeon v. Thomson, 106, 193. Duff V. Laing, 110. V. Pirie, 89, 103. Dugdale v. Lovering, 171, 216. Dunbar v. Melville, 152. ■0. Bp. of Murray, 143. V. Remmington, Wilson & Co., 248. Duncan v. Barron, 49. V. Cunningham, 134. V. Maitland, 138. V. Porterfield, 286. Duncan's Trs. v. Gow, 139. Dundas v. Autens, 46. Dundas v. Hood, 109. V. Morison, 110. Dundee Fraternity v. Wedderburn, 138. P. & A. Ry. Co. V. Richardson, 194. Property Inv. Co. v. Macdonald, 93. etc. Shipping Co. v. National Guarantee etc. Assn., 283. DunfermUne, Cs. v. L. Pitmedden, 12. Dunlop V. Greenlees' Trs., 132, 148. & Co. V. Meiklem, 13. Dunlop's Trs. v. Clydesdale Bank, 218, 222. I Dunmore Coal Co. v. Youngs, 45, 46, 46, 53. Dunn V. Lamb, 106. V. Macdonald, 173. Dunston v. Paterson, 2. Durham (Mayor) v. Fowler, 285, 286, 287. Durrell v. Bederly, 269. Duthie V. Carnegie, 268. Dutton V. Sneyd Bycars Co., 130. Dyer v. Pearson, 227, 227. Dyke v. Brewer, 177. Dykes v. Merry & Cunningham, 193. 'E. V. Cs. Dunfermline, 21. Eadie v. How, 286. Eaglesfield v. L. Londonderry, 173. East India Co. v. Moodelly, 41. India Co. v. Vincent, 56. Lothian Bank v. TurnbuU, 94. Eastern Counties Ry. Co. v. Hawkes, 102. Economic Eire Office, 209. Eddie v. Monklands Ry. Co., 106. Eddystone Co., 191. Ede & Bond v. Findlay, Duff & Co., 229. Edelstein v. Schuler & Co., 254, 260. Edge V. Duke, 208. Edgington v. Eitzmaurice, 36. Edinburgh City v. Paton, 62. Corp. V. Lorimer, 130. Mags. V. L. Adv., 138. E^onston v. Edmonston, 40. V. Lang, 45. Edmund v. Reid, 198. Edmunds v. Bushell, 222. Edwards v. Brown, 265. V. L. & N.W. Ry. Co., 166. V. Vaughan, 242. Egremont v. Courtenay, 21. V. Eorwood, 21. Elder v. Smith, 137. Elgin Lunacy Board v. Bremner, 146. Elgin's Trs., E. v. WaUs, 22, 82. Eliott V. Heirs of Stobs, 152. EUott's Trs. V. EKott, 12, 86. Elkington & Co. v. Hurter, 172. Elliot, In re, 193. V. Elliot, 134. V. Roberts, 48. Ellis V. LoohgeUy Iron and Coal Co., 263. LIST OF CASES CITED XVll Ellis V. Muckersie & Rose, 93. V. Sohmock, 246. Elphinstone, L. v. Monkland Iron and Coal Co., 82, 82, 198. Elton V. Larkins, 272. Emery v. Barnett, 15. Empress Engineering Co., 162. Emslie v. Dufi, 49, 50, 51. V. Young's Trs., 86, 86, 87. Engelbaoli v. Nixon, 93. England v. Slade, 15. EngUsh and Scottish Law Life Ass. Assn. V. Carmichael, 8. Equitable Office v. Hong, 209. Era Ass. Co., 62,183. Erlanger v. New Sombrero Phosphate Co., 90, 120. Erskine v. Erskine, 154, 195. Essilmont v. Tenants, 14. Eustace, In re, 120. Evans v. Bicknell, 2, 3. V. Elliot, 18. V. Enever, 201, 201. V. Smallcombe, 59, 99, 100, 120, 180. V. Trueman, 234, 235. Ewan's Trs. v. Muirkirk Iron Co., 82. Ewen V. Turnbull's Trs., 67. Ewing V. Campbells, 70, 71. V. Wright, 45. Paibtitlb v. Gilbert, 4. Palconar v. M'Leod, 46. Falconer, 154. V. Lothian, 282, 286, 287. V. North of Scotland Banking Co., 281. Parquhar v. Gordon, 154. Parquharson v. Parquharson, 66. Bros. V. King & Co., 219, 224, 227, 228, 251. Bros. V. King & Sons, 219. Parr v. Motor Traders' Mutual Ins. See, 280. ParraU v. Davenport, 51. Parrar v. De Phnne, 244. V. Hutchinson, 139. Parries v. Smith, 93. Paulkner v. Llewellyn, 50. Paure Accumulator Co. v. PhilUpart, 102. Pawcett V. Whitehouse, 288. Penn v. Harrison, 222. Penner v. Blake, 21. V. Duplock, 16. Perguson Bequest Pund, 138. V. M'Kenzie, 88. v. Methven, 81. V. Morison, 19. V. Stephen, 167. V. Wilson, 288. Davidson & Co. v. Paterson & Dobbie, 173. Pern^e v. Gorlitz, 172, 174. Perrie v. Mitchell, 194. Perrier v. Dods, 105. Petherstone v. Cooper, 193. Pife, E. V. Dufi, 32, 46. Fife's Trs., E. v. Duncan, 77. Pife Bank v. Thomson's Trs., 94. Pindlay v. Currie, 211. Pine Art Society v. Union Bank of London, 254. Pinlay v. Mexican Investment Corp., 281, 281. Pinlayson.v. Gibb, 90. Pirbank's Exrs. v. Humphreys, 171, 172, 172, 175. Fireproof Doors, In re, 184. Fisher v. Cuthell, 163. Fitzgerald v. Dressier, 167. Pitzherbert v. Mather, 275, 280. Pitzmaurice v. Bay ley, 166. Fleming v. Bank of New Zealand, 163, 170. V. Gooding, 15. V. Macdonald, 199. V. M'Nair, 248. V. Wilson & M'Lellan, 196. Plemyng v. Hector, 161. Fletcher v. Birkenhead Corp., 236. V. Heath, 238. V. Robertson, 194. Phtcroft (1882), 163, 182. Flounders v. Flounders, 194. Plowerdew v. Laing, 96. Foggo V. Hill, 47. Foley V. Tabor, 273, 274. Forbes v. Edinburgh Water Co., 130. V. Ure, 82. V. Welsh, 287, 287. V. Welsh & Forbes, 48. V. Wilson, 40, 50. & Co. V. Edin. Life Ass. Co., 208, 277. Forbes' Exrs. v. Western Bank, 227. Tr. V. Ogilvy, 110. Trs. V. Edin. and Glasg. Union Canal Co., 139. Ford V. Ager, 18. Fordyce v. Fordyce, 151. Forest v. Campbell, 154. Forman v. Home, 137. Formby v. Barker, 76. Forrest v. George Watson's Hospital, 73. Foster v. Bates, 160. V. Green, 258. V. Mackinnon, 263, 264. V. Mentor Life Ass. Co., 189. V. Tyne Docks, 5. Fowkes V. Manchester and London Ass. Co., 277, 278. Fowler, 94. V. Mackenzie, 128. Fowlie V. M'Lean, 49. h LIST OF CASES CITED Pox V. Clifton, 246. V. Martin, 262. Frame v. Dawson, 51. Prance v. Clark, 226, 262. Francis v. Doe d. Harvey, 15. Fraser, In re, 248. V. Brebner, 33. V. Campbell, 56. V. Connell, 195, 195. V. Downie, 70. V. Fraser (1827), 139. (1833), 22. V. Fraser's Trs., 148. V. Frisby, 226. V. Grant, 64. V. Hankey & Co., 135. V. Laing, 88. V. Lang, 88. V. Ma.itland, 83. Freeman v. Appleyard, 231. V. Cooke, 2, 2, 3, 6, 187, 211, 226, 245, 251, 267. V. Rosher, 166. Freen v. Beveridge, 104. French v. Backhouse, 167. V. Cameron, 284. V. Cathoart, 128. Fricker v. Van Grutten, 174, 174. Friend v. Young, 225, 243. Frixione v. TagUaferro, 168, 169, 169. Frost V. N. of Scotland Banking Co., 209, 212. Fry V. Smellie, 226. Fuentes v. Montis, 235. Fuller V. Glyn, Mills, Currie & Co., 261. Furness & Co. v. S.S. Cynthiana, 191. Fyfe, 100. G. V. H., 138. G. V. M. (1865), 113. (1885), 121, 148. Gabarrow v. Kreeft, 251. Gairdner v. Chalmers, 154. Galbreath v. Lockhart, 103. Gall V. Bird, 142, 214. Gallic V. Wyhe, 93, 164. Galloway v. Grant, 130. E. V. Grant, 209. Gandy v. Adelaide Co., 274. Garden v. E. Aberdeen, 80. V. Lindsay, 18. V. Rigg, 103. Garden Gully Co. v. M'Lister, 98. Gardner v. Anderson, 248, 248. V. Gardner, 7, 141. V. Lucas, 37, 38, 42. Garioch v. Forbes, 39. Garland v. Jacomb, 115. Garrard v. Lewis, 259. Gatchell v. GatcheU, 138. Gatehouse v. Rees, 200. Gatty V. Maclaine, 4, 117. Gaunt V. Wainman, 16. Gavin's Tr. v. Eraser, 226. Geach v. IngaU, 276. Geddes v. Wallace, 78, 136. Geilinger v. Gibbs, 174. General Finance etc. Co. v. Liberator etc. Society, 6, 7. Property Investment Co. v. Craig, 99. Property Investment Co. v. Mathe- son's Trs., 179, 181. German v. Chapman, 73, 74. V. Knight, 75. Gibb V. Winning, 79, 81. Gibbins v. Buckland, 15. Gibson v. Kirkland, 108, 108, 110. V. MaoBain, 102. Gibson-Craig v. Aitken, 181. Gilchrist v. Whyte, 33. Gill V. Arizona Copper Co., 99. V. Cutler, 93. Gillespie v. City of Glasgow Bank, 95, 95, 108, 264. V. Dods, 125. V. Douglas, 269. V. Russel & Son, 266. Gillett V. HiU, 25. GiUies v. Maclachlan's Reprs., 135. GiUman v. Carbutt, 3, 231. GiUon V. Drummond, 137. Gilman v. Robinson, 219. Girdwood v. Paterson, 39. Gladstone v. King, 275, 275, 280. Glasgow Ass. Corp. v. Symondson, 273. (City of) Bank cases, 95. Mags. V. Macfait, 77. etc. Ry. Co. v. Nitshill Co., 193. Tramways Co. v. Glasgow Corp., 130. Glass V. M'Intosh, 92. Glassford v. Brown, 168. Glendinning v. Board of Agriculture for Scotland, 199. Globe Ins. Co. v. Mackenzie, 92. Gloucester (County of) Bank v. Rudry, 95. Gobind Chunder Sein, 234, 235. Goddard v. Smith, 2. Godwin v. Francis, 175, 175. Gold Reefs v. Dawson, 174. Golding V. Royal London Co., 279, 280. Goldston V. Young, 33. Goodall V. Bilsland, 165. Goodtitle v. Woodward, 163. Goodwin v. Robarts, 260, 260, 261. Gordon, 95, 95. V. Farquhar, 152, 155. ■0. Glendonwyn, 128. V. Hall, 155. V. Hughes, 193. V. Menzies, 145. V. Pitsligo, 36, 52. LIST OF CASES CITED XIX Gordon, D. v. Carmichael, 40, 49. D. V. Duff, 66. D. V. Innes, 143. Gordon's Exrs. v. Gordon, 34. Gosling V. Birnie, 24. Gould V. M'Corquodale, 72. Gourlay v. Wright, 132, 133. Gow V. M'Ewan, 48. Gowans V. Duncan, 76, 194. V. Dundee Steam Navigation Co., 289. Gowans's Trs. v. Carstairs, 31, 36, 50. Grady, 94, 95. Graham v. Birkenhead, 89. V. Corbet, 52. V. Gowans, 38. V. Graham, 135. V. Hendersons, 162. V. M'Leod, 36, 42. V. Veitch, 128. V. Western Bank, 120. V. Whichels, 22. Graham's Tr. v. Grahams, 132. Grahame v. Kirkcaldy Mags., 56. V. Muir, 59. Granger v. GeUs, 78. Grant v. Anderson, 144. V. BaiUie, 152. V. Gordon, 132. V. Grant, 11, 132. 0. Johnston, 45. V. M'Clafferty, 87. V. Murdoch, 130. V. Norway, 192. c. Ramage & Ferguson, 48. V. Richardson's Reprs., 49. V. E. Seafield, 85. V. U.K. Switchback Ry. Co., 183, 183. V. Watt, 81. V. Wishart, 220. Grants v. Shepherd, 142. Gravenor v. Woodhouse, 18. Graves v. Key, 2, 8, 139. Gray v. Eraser, 92. V. Gray, 156. V. Kerr, 102. V. Low, 49, 82, 135, 199, 200. V. Walker, 133. V. Wardrop's Trs., 105. Great N.W. Co. v. Charlebois, 163, 179. Green v. James, 16. V. Maitland, 25. V. Rutherford's Trs., 86. Greenock Mags. v. Gardeners' Soc, 82. Greenwood, In re, 195. Gregory v. Doidge, 16, 16. Gregson v. Alsop, 77. Greig v. Wells, 2. Grierson (1812), 83, 199. w..Seots, 49, 52. Grierson, Oldham & Co. v. Eorbes, Maxwell & Co., 162. Grieve v. Cant, 8. V. Cunynghame, 198. V. Pringle, 42, 50, 51. Griffin v. Tomkins, 200. Grigor v. Robertson, 129. Grimman v. Legge, 21. Grimwood v. Moss, 200. Grogan v. London and Manchester In- dustrial Ass. Co., 276. Grover & Grover v. Mathews, 164, 169. Groves v, Douglas, 106. Guerreiro v. Peile, 237. Gunn V. Roberts, 165. Gunter v. Halsey, 43. Gurney v. Evans, 246. Guthrie v. Gordon, 134. Haas v. Durant, 225. Hadley v. Baxendale, 174. Hagedorn v. Ohverson, 159, 169. Haggart v. Miller, 18. Haigh V. Haigh, 195, 195. Halbot V. Lens, 173, 173. Halifax Union v. Wheelwright, 250, 257. Hall (1870), 99. V. Butler, 13, 16. V. FuUer, 255. V. Hubner, 87. V. Laver, 169, 174. V. M'Gill, 84. & Co., 186, 191. Hallet V. Ryrie, 40. Hallet's Estate, In re, 120. Hallifax v. Lyle, 115. Hallings v. Russell, 232. Haly V. Sands, 50. Halyburton v. Halyburton, 145. Hambro v. Burnand (1903), 165, 176. (1904), 165, 216, 220. Hamilton v. Ly. Cardross, 156. V. Crawford, 12. V. Dixon, 220. V. D. Montrose, 86, 87. V. Thomson, 164. V. Watson, 281, 281, 282, 282, 282. V. Western Bank, 220. V. Wright's Trs., 30, 38, 48, 49, 52. Hammersley v. De Biel, 46. Hammersmith Ry. Co. v. Brand, 236. Hammerton v. Stead, 22. Hammond v. Thorpe, 174. & Co. V. Bussey, 174. Hanau v. EhrHch, 48. Hancock, In re, 144. Handler v. Mutual Assn., 208. Hardie v. D. Hamilton, 86. Hare, 180. XX LIST OF CASES CITED Hare v.h. & N.W. Ry. (1860), 190, 192. (1861), 59. Harkness v. Graham, 146, 155. Harman vi, Anderson, 24. Harper v. Stuart, 62. Harries v. Anderson, 12. Harrison v. N. of Scotland Bank, 124. narrower v. HutoMnson, 272. V. WeUs, 77. Hart V. Frontino and Bolivia South American Gold Mining Co., 187, 189, 254. V. Taylor, 62. Kartell v. Blackler, 197, 201. Harvey v. Francis, 16. V. Shelton, 194. & Co. V. Sehgmann, 270 274. Harvie v. Gordon, 142, 155. Harward, 94. Haseler v. Lemoyne, 166, 166. Hastings v. Pearson, 232. HasweU v. Fortune, 146. Hatfield v. Phillips, 233, 235. Hawes v. Watson, 24, 24. Hawkins v. Holmes, 41. Haworth & Co. v. Sickness etc. Ass. Assn., 283. Hay V. Jack, 139 V. Kilgour, 154, 156. V. Knox, 139. V. M'Tier, 22, 82. V. IHair, 244, 246. V. Wood, 198. Hayman, Ex parte, 245. & Son V. M'lintock, 236, 242. & Sons V. American Cotton Oil Co., 217, 225. Hazard v. Treadwell, 215, 219. Heane v. Bogers, 2, 8. Heath v. Crealock, 6, 9, 267. V. Ramsay, 144. V. Sansom, 247. Heddle v. Baikie, 33. Heddle's Exec. v. Marwick & Hourston's Tr., 178. Helton V. Waverley Hydropathic Co., 37, 183. Helby v. Matthews, 240, 240, 241. HeUon v. HeUon, 138. Hemmings v. Sceptre Life Assn., 207. Henderson v. Arthur, 77. V. Balfour, 32, 52. V. Henderson's Trs., 143. V. Munn, 87. V. Squire, 173. V. Stubbs' Ltd., 162, 178. & Co. V. Wilhams, 24, 27, 227. Henry (1867), 100. V. M'Ewan, 142, 143. V. Mather, 93. V. Miller, 139. Henry v. Scott, 154. V. Sutherland, 137. Hepburn v. Hepburn, 195. V. Kirkwood, 145. V. Law, 226. V. Tait, 167. Hercules Ins. Co., In re, 95, 184. Herdman v. Willock, 26. Hereford v. S. Wales Co., 162. Heriot v. Town of Edinburgh, 18. Heritable Securities Inv. Assn. v. Miller's Trs., 133. Securities Inv. Assn. v. Wingates, 102. Herriot v. Farquharson, 91. Hewats v. Roberton, 132. Hewitt Bros. v. Wilson, 273. Hewlett V. Laycock, 193. Heynaan v. Plewker, 232. Hibblewhite v. M'Morine, 94. Hick, In re, 194. Hickman & Co. v. Roberts, 196. Higginbotham v. Barton, 15, 18. Higgins V. Hopkins, 160. Hilberry v. Hatton, 163, 165. Hildyard v. South Sea Co., 254. HiU V. City of Glasgow Bank, 95, 156. V. Dixon, 61, 68. V. Ramsay, 65. V. Saunders, 17, 17. V. S. Stafiordshire By., 63. V. Wood, 61, 66. Hindley, 94. Hitchens v. Congreve, 288. Hoare v. Kingsbury U.D.C., 33. Hobson V. Cowley, 22. Hodgson V. Bushby, 115. Hodson V. Heuland, 40, 43. Hog V. Lashley, 150. V. Thwaytes, 148, 150. Hogg V. Campbell, 263. V. Skeen, 245. Holding V. EUiott, 139. Holdsworth v. Lancashire and Yorkshire Ins. Co., 279. HoU V. Griffin, 24. HoUand v. King, 163. HoUins V. Fowler, 158. Holmes v, Newcastle etc. Co., 163. Holt V. Brien, 168. Home V. Cairncross, 18. V. Castlestewart, 145. V. Home, 13. V. KeUoc Tenants, 18. V. Pringle, 137. V. Taylor, 82. Hone V. Boyle & Co., 262. Hooley Hill Co. v. Royal Ins. Co., 279. Hopcraft v. Keys, 17. Hope V. Dickson, 132, 150, 150, 150, 153. Hopetoun, E. ■;;. Scots Mines Co., 195. LIST OF CASES CITED XXI Horsfall v. Halifax Banking Co., 2. Hosie V. Waddell, 243. Hoskins V. Phillips, 174. Honldsworth, 99, 100, 180. V. Caledonian Ey. Co., 128, 130. V. Evans, 121. V. Burgh of Wishaw, 67. Houlton, 249. Houston V. Houston, 129. V. Montgomerie, 89. Hovil V. Pack, 168, 169. Howard v. Hudson, 7. Howatson v. Webb, 263, 264, 26.5. Howden v. Howden, 121, 148. Howe, 96. Hozier v. Hawthorne, 65. Hubbard v. Jackson, 203. V. Philhps, 174, 174. Huckman v. Fernie, 276. Huddeston v. Johnstone, 21. Hughes V. Graeme, 172, 175. V. Hughes, 138. V. Morris, 48. Huguenin v. Rayley, 277. Hulett (1862), 184. Hull V. PickersgiU, 158, 169. V. Wood, 15. Flax Co. V. WeUesley, 95. Ropes Co. V. Adams, 241. Hume V. Lord Justice-Clerk, 154. Humphreys v. Green, 51. Hunter v. Broadwood, 84. V. Cochrane, 89. V. Dun, 83, 199. V. Falconer, 128. V. Fleming, 137. V. Hunter, 151, 155. V. Parker, 165, 165, 166. V. Walters, 253, 263, 264. Hutcheson v. Halkett, 103. Hutchinson & Co. v. Aberdeen Sea Ins. Co., 270. Hutchison v. Anderson's Trs., 104. V. Hutchison, 143. V. Hutchisons, 133. V. National Loan Fund Life Ass. Soc, 275, 276, 277. Hutton V. Adams, 194. Imperial Bank of Canada o. Bank of Hamilton, 259. Bank of China v. Bank of Hindustan, 59, 183. Imrie's Tr. v. Calder, 109. Inchaifray v. Oliphant, 155. Inchiquin, L. v. Lyons, 201. Ingham v. Primrose, 116, 258. Inglis V. Buttery & Co., 77. V. MoncriefE, 103, 106. V. Robertson, 27, 232, 233, £36, 239. IngKs' Trs. v. Inglis, 147. Innerquharity v. Ogilvie, 101. Innes v. Downie, 131. V. Mordaunt, 30, 154. • International Sponge Importers v. Watt & Sons, 222. Inverness Mags. v. Highland Ry. Co., 130. Presbytery v. Fraser, 138. lonides v. Pender, 268, 272. Irvine v. Hart & Son, 93. V. Union Bank of Australia, 180, 181, 183. V. Valentine, 198. Irving V. Kirkpatrick, 124. V. Tait, 154. Irvings v. Cliife, 93. Isles, Bishop of the v. Schaw, 145. Islington Vestry v. Hornsey Urban C, 181. Jack v. Fraser, 139. V. Simpson, 139. Jackson, Ex parte, 177. V. Cator, 63. V. Wilkinson, 10. Jacob V. Down, 200, 201. Jacobs V. Morris, 218, 219. Jacques-Cartier, La Banque, 59. Jaffray v. Boag, 213. James, Wood & James v. Telford, 222. Jameson v. Union Bank of Scotland, 190, 261. Jamieson, In re, 195, 196. V. Edinburgh Mutual etc. Soc, 30. V. M'Innes, 139. V. Thomson, 82, 199. Janesich v. Attenborough, 228, 230. Jarron v. Smith, 139. Jeffrey v. Aitken, 135. Jenkins v. Hutchinson, 170, 170. V. Robertson, 193. and Leggo, 195. Jenkyns v. Usborne, 240. Jenys v. Fawler, 115. Jetley v. Hill, 215. Jew V. Wood, 16. Jewan v. Whitworth, 237. Jewsbury v. Mummery, 120. Joel V. Law Union and Crown Ins. Co., 268, 275, 275, 276, 276, 276, 276, 279. Johnson v. Baytup, 15. V. Credit Lyonnais, 239, 251. V. Mason, 15, 16. V. Wyatt, 65. Johnston v. Cheape, 194. V. Grant, 39, 39, 45, 46, 53. V. MacRitchie, 72. V. Paterson, 150. V. Renton, 186, 254. V. Scott (1834), 66. V. Scott (1860), 160. XXll LIST OF CASES CITED Johnston v. Scott & Son, 229. V. Walker's Trs., 72. ' Johnston's Claim, 258. Johnstone v. EUiot, 93. V. Hope, 155. V. Hughan, 87. V. M'Kenzie, 139. V. Mackenzie's Trs., 143. Jolly V. Arbuthnot, 15. V. Graham, 151. V. Lamington, 155. V. M'Gregor (1825), 152. (1828), 138. Jones, In re, 91. V. Ashwin, 217. V. Downman, 170. V. Gordon, 235. V. Hope, 161, 161. V. North Vancouver Co., 97. V. Provincial Ins. Co., 277. V. Royal Canal Co., 63. V. Stone, 16. Jones's Tr. v. Jones, 112. Jones & Co.'s Tr. v. Allan, 226. Jopp V. Hay, 92. Jopp's Trs. V. Edmond, 138. Jorden v. Money, 3, 4, 34. Joseph V. Webb, 232. Jungheim, Hopkins & Co. v. Poukel- mann, 194. Kaltbnbach v. Lewis (1883), 234. (1885), 237. Keay w. Penwick, 168, 168, 169. Keighiey, Maxsted & Co. v. Durant, 158, 158, 168, 177. Keir v. D. Athole, 50, 51. Keith V. Johnston's Tenants, 34. Prowse & Co. v. National Telephone Co., 200. Keith's Tr. v. Keith, 147, 150. Kelk, 99. KelUe, E., 106. Kelly V. Smith, 139. V. Solan, 208. Kelner v. Baxter, 162. Kelsey v. Dodd, 200. Kelvin Mills Proprietors v. Glasgow Bakers, 67. Kendall v. Hamilton, 104, 104. Kennedy v. Campbells, 138. V. Green, 265. V. Kennedy, 225. Kenworthy v. Scholfield, 172. Kepitigalla Rubber Estates v. National Bank of India, 253. Ker, 95. V. Downie, 33. Kerr's Tr. v. Ker, 93. Kewlay v. Andrew, 93. Kibbles v. Stevenson, 46. Kidderminster Mayor v. Hardwick, 30. Kieran v. Sanders, 23. Kincaid (1866), 96. V. Stirling, 65. , King V. Carrick, 89. j V. Hoare, 104. ' V. Smith, 264. V. Wieland, 12, 14. Kinghorn, E. v. Hay, 47, 52. Kingsford v. Merry, 24. Kingsman v. Kingsman, 26. Kingston, Ds., 8. Cotton Mill Co., In re (No. 2), 101. Kingston-on-Hull (Mayor) u., Harding, 287. KingweU v. Elliott, 194. Kinloch v. CampbeU, 269, 274. V. Mansfield, 179, 197. Kinloch's Trs. v. Young, 65. Kinnear v. Thomson, 247. Kinninmont v. Paxton, 49. Kinnoul, E. v. Keir, 64, 65. Kintore, E. v. Pirie & Sons, 61. E. V. Cs.-Dow. of Kintore, 151. Mags. V. Tait's Exrs., 133, 137. Kippen v. Cairns, 103. V. Kippen's Trs., 120. Kirby v. Smith, 272. Kirkcaldy v. Dalgairn's Trs., 195. Kirkland v. Cadell, 109. Kirkman v. Attenborough, 228. Kirkpatrick v. AUanshaw Coal Co., 79, 80, 81. V. Sime, 132. Knapkeirn v. Parquhar, 19. Knight, 99. V. Cox, 15, 16. V. Simmonds, 75. V. Smythe, 14. V. Wilhams, 21. Knights V. Wiffen, 3, 25, 48, 189. '' Knox & Wilson v. Hay, 89, 167. Kyd V. Fergusson, 173. V. Waterson, 90. Kyle's Trs. v. Allan, 154. Laoey v. Hill, 61. Ladbrooke v. Todd, 258. Laing v. Laing, 137. V. Provincial Homes Investment Co., 31, 265. Laird v. Birkenhead Ry. Co., 61. V. Securities Ins. Co., 281. Lakeman v. Mountstephen, 172. Lamb v. Attenborough, 227, 232. V. Mitchell's Trs., 84, 85, 85. Lambe v. Smith, 270. Lambert v. Pack, 116. V. Still, 137. Lamont*. Hamilton, 105. Lane (1863), 95, 184. LIST OF CASES CITED XXIU Lang V. Dumbarton Mags., 39, 152. V. Glasgow Covirt House Comrs., 106. V. Lang, 268. V. Lang's Trs., 46. Langford v. Selmes, 15. Lapraik v. Burrows, 167. Lart, In re, 94. Latham v. Edin. and Glas. Ryt Co., 113. Latta V. Macrae, 194. Lauder v. Millars, 137. Laurence v. Faux, 16. Lavan v. Gavin Aird & Co., 77. Laver v. Fielder, 46, 132. Law V. Gibsone, 81. V. Law, 179, 288. Lawes v. Purser, 22. Lawless v. Mansfield, 136. Lawrence, 96. Lawrie v. Craick, 47, 49, 52. Lawson v. Auchinleck, 49, 52. V. Coldstream, 33, 281. V. Murray, 77. V. Walker, 108. Lea V. Landale, 93. Learoyd v. Robinson, 237. Le Bon & Co. v. Straits Ins. Co., 273. Le Ldevre v. Gould, 158. Le Neve, 39. Lebeau v. General Steam Navigation Co., 4. Lee V. Alexander, 77. Butler, 240. Jones, 281, 281, 284. Lancashire and Yorkshire Ry. Co., 139. Leeds, D. v. Amherst, 54, 54, 59. Leeming v. Skirrow, 15. Lees' Trs. v. Dun, 119, 126, 126. Leiper v. Cochran, 143, 154. Leith Banking Co. v. Bell, 287. Lemarc v. Dixon, 49. Lemon v. Cameron, 139. Leshe v. Black, 138. V. M'Indoe's Trs., 39. Lesmore v. Hutcheson, 21. Levita (1870), 167, 125. Levy V. Home, 4. V. Pyne, 219. V. Scottish Bmplovers' Ins. Co., 206, 279. Lewis V. Baker, 18. V. Clay, 264, 264. V. Lewis, 143. V. Nicholson, 170. V. Ramsdale, 233. V. Read, 166. Licences etc. Fund v. Shearer, 170. Lickbarrow v. Mason, 216, 242, 251, 251. Liddall v. Duncan, 71, 72. Liddle v. Dick's Creds., 146. V. V. Life Association of Scotland v. Douglas, 225. Association of Scotland v. Foster, 275, 276, 276. and Health Ass. Assn. v. Yule, 206, 279. Like V. Home, 91. Lilly, Wilson & Co. v. Smales, Beles & Co., 170, 173. Lindenau v. Desborough, 276, 276, 276. Lindesay v. IngUs' Trs., 249. Lindsay v. Hogg, 198. V. Kinloch, 132. V. L5mch, 43. V. Webster, 81. Petroleum Co. v. Hurd, 120. Lindsay's Curator, 95. Linsey v. Edwards, 16. Linton v. Dundas, 154. Lishman v. Northern Mar. In'S. Co., 270. Littledale, Ex parte, 100. V. Dixon, 274. Little Gilmour v. Hunter, 152. Littlejohn v. Hamilton, 91. Livesey, In re. Ex parte Clarke, 116. Livingstone v. Falhouse Feuars, 194. Llewellyn v. Winckworth, 222. Lloyd V. Grace, Smith & Co., 189, 192. Lloyd's Bank v. Bullock, 264. V. Cooke, 262. Lochiel's Trs. v. Cameron, 154. Lockhart v. Ferrier, 91. V. Lockhart, 155. Lockyer v. Ferryman, 139. Loffus V. Maw, 4. Logan V. Logan, 149. V. Meiklejohn, 107. Lohre v. Aitchison, 204. London Assurance v. Mansel, 275, 276, 276, 277, 278. Celluloid Co., In re, 186, 191. C.C. V. Allen, 76. C.C. V. Att.-Gen., 182. Financial Assn. v. Kelk, 182. Freehold Co. v. L. Suffield, 215. General Omnibus Co. v. Holloway, 281, 282. Grand Jn. Ry. Co. v. Graham, 94. Guarantee Co. v. Fearnley, 283. J.S. Bank v. Macmillan & Arthur, 251, 254, 255. 257. J.S. Bank v. Simmons, 216, 261. J.S. Bank v. Stewart & Co., 222. & County Banking Co. v. London & River Plate Bank, 253. & Lancashire Life Ass. Co. v. Fleming, 209. & N.W. Ry. Co. V. West, 8, 15, 19. & S.W. Bank v. Wentworth, 7, 251. Longman v. Bath Electric Tramways, 186, 186, 190, 192. LIST OE CASES CITED Lord V. Wardle, 145. L. Adv. V. Sinclair, 117. V. Wemyss, 120. Loudon V. Loudon, 149. Lovat, L. V. Praser, 193. Love V. Storie, 105. Lovett V. Lovett, 8. Low V. Bouverie, 3, 5, 6, 7, 266, 266. V. Rankine, 139. Lowden v. Watson, 17. Lowe, 100. Luokoombe v. Ashton, 161. Lyde v. Barnard, 43. Lyell V. Kennedy, 160, 168. Lynch v. Dunsford, 269, 272, 272, 279. V. Hamilton, 275. V. Sewers Commrs., 143. Lyon V. Butter, 45. V. Irvine, 197. V. Reed, 19, 20. Lyons v. Anderson, 21. Lyster (1867), 99. V. Goldwin, 163. Lythgoe v. Vernon, 168. M'Andbbw v. Bell, 272. Macandrew v. Robertson, 94. M'Allister v. Bp. of Rochester, 68. V. M'Gallagley, 77, 78. M'Alpine v. Campbell, 137. M'Arthur v. Paterson, 212. Macarthur v. Simpson, 49. M'Bain v. Innes, 101. M'Call V. Sharp, 173, 174. M'CaUum v. Campbell, 138. M'Calman v. M'Arthur, 7, 141, 155. M'Cance v. L. & N.W. Ry. Co., 4. M'Clymont v. Hughes, 107. M'Coag V. M'Sporan, 198. M'Combie «. JJavieg, 24. M'Coneohy v. M'Indoe, 263, 264. M'Cowan v. Shields, 138. MaoDonald, 95, 95. Macdonald v. Johnstone, 86. V. Kinloch, 129. V. Law Union Ins. Co., 278, 279. V. Macdonald (1819), 124. (1842), 93. V. Stewart, 45. V. Westren, 228. Macdonald, Sons & Co., 191. Macdonell v. Mackenzie, 137, 137. M'Dougal V. Campbell, 21. Maodougall v. Stevenson, 92. M'Eachem v. Ewing & Co., 27. M'Entire v. Crossley Bros., 241. M'Ewan v. Campbell, 160. & Sons V. Smith (1847), 229. (1849), 27. M'Ewen, 95. V. Guthridge, 208. M'Evoy V. Drogheda Commrs., 5. M'Fadyean v. MacFadyean, 132, 149, 149, 150, 150. Macfarlane v. Anstruther, L31. V. Campbell, 83. M'Farlane v. Grieve, 34. V. Mitchell, 49. Macfie V. Callander & Oban Ry. Co., 1, 8. M'Gavin v. Sturrock's Tr., 109. M'Gibbon v. M'Gibbon, 155. V. Rankin, 61, 66. M'GiU V. Crawford, 18. V. Ruthven, 149, 151, 155. Macgill V. Park, 76. Macgregor v. Balfour, 62, 64, 66. M'Gregor v. Hunter, 90, 108. V. Macandrew, 93. V. L. StrathaUan, 77. MacGregor v. Rhodes, 116. M'Gregor's Exrs. v. Anderson's Trs., 7, 107. Macgrigor v. Black, 147, 149, 149, 149, 153. Macilhose v. Gardener, 194, 196. Macintosh v. Hurlet and Campsie Alum Co., 67. M'Intosh & Son v. AinsHe, 162. M'Intyre v. Orr, 58. M'lver V. M'lver, 82, 135. M'Kay (1896), 192. M'Keand v. Laird, 178. M'Kenzie v. British Linen Co., 2, 3, 46, 209, 210, 211, 212, 212, 214. V. M'Kay, 212. V. M'Kenzie, 49. V. M'Kenzies, 156. V. Mackenzie's Trs., 132. V. WyUe & Trotter, 51. Mackenzie v. Baird's Trs., 113. V. Cotton's Trs., 118, 127. V. Fairholm, 155. V. Macartney, 131. V. Smith, 129. V. Whitworth, 272. Mackenzie's Trs. v. Kilmarnock's Trs., 40. M'Kersies v. Mitchell, 136. Mackessack & Son v. Molleson, 110. Mackie v. European Ass. Soc, 207. V. Mackie, 130. V. Watson, 103, 129. Maokie's Trs. v. Mackie, 132. M'Kinlay v. M'Clymont, 87. Mackinnon v. Max Nanson & Co., 220. Mackintosh v. E. Kinnoull, 131. V. Macdonald, 114. V. MacTavish, 78. V. Marshall, 272. V. May, 77. V. Taylor, 132. Mackison v. Dundee Mags., 113, 121, 124. lilST OF CASES CITED XXV Mackreth v. Walmsley, 282. M'Laohlan v. Likly, 134. M'Laren v. Ldddell's Trs., 136. M'Laren's Tr. v. Argylls, Ltd., 240. M'Laurin v. Stafford, 263. M'Lean v. Richardson, 42. V. Scott, 36. M'Lean's Tr. v. M'Lean's Tr., 110. M'Leod V. Black, 149. Macleod v. Urquhart, 78. M'Manus v. Armour, 87. V. Portescue, 172, 175. M'Martin v. Hannay, 87. M'Michan v. M'Michan, 143. M'Michie v. Phillips, 137. M'Millan v. Accident Ins. Co., 206, 206, 207. V. Walker, 244. Maomillan (1918), 258. M'Moriand's Trs. v. Fraser, 266. M'Morran v. Black, 49. Macnair v. Cathcart, 56, 64. M'Nair v. Fleming, 248. M'Nally v. Knox, 174. M'Naughton v. M'Naughton, 112. Macnaughton v. Miirray, 194. Macnee v. Gorst, 237. M'Neill V. Black, 46. V. Forbes, 138. V. Steel's Trs., 150, 150. M'Niven v. Hunter, 102. Macniven v. Murray, 104. Maconochie v. Stirling, 133. Macphersonw. Maopherson(1815),49,141. (1841), 126. M'Phun V. Reid & Co., 93. Macqueen v. Colvin, 164. Macritchie's Trs. v. Hislop, 69, 73. Macrorie v. MacWhirter, 36, 36, 49, 50, 51. Mactaggart v. Roemmele, 71. M'Taggart v. Watson, 283, 285, 286, 286, 287. Maotavish's J.F. v. Michael's Trs., 143. Macturk v. Greig, 156. Macvean v. Maclean, 88. M'Vicar v. Poland, 281. Maddeford v. Austwick, 178. Maddiok v. Marshall, 160, 247. Maddison v. Alderson, 3, 32, 34, 41, 43, 48, 112. Mahony v. East Holyford Mining Co., 181, 219. Maiklem v. Walker, 211. Maitland v. Neilson, 29. Malcolm v. Bardner, 145, 151. V. Lothian Ry. Co., 171. Maloy V. M'Adam, 138. Manby, In re, 174, 174, 174. Manchester Trust v. Furness, 158. Manderson v. M'Minn, 45. Mann v. Brodie, 117. V. Edinburgh Northern Tramways Co., 163. V. Sinclair, 246. V. Walters, 163. Manners v. Whitehead, 288. Mansfield v. Walton's Trs., 155. E. V. Henderson (1815), 198. (1856), 78. Union v. Wright, 285. Manton v. Austin, 14. Manuel v. Manuel, 154, 154, 154. Mara v. Browne, 176. Marianski v. Wiseman, 91. Marishall, E. v. Fraser, 79. Maritime Ins. Co. v. Stearns, 204. Markham & Darter, 186, 191. Marlow v. Wiggins, 17. Marriott v. Edwards, 18. Marsden v. City and County Ass. Co., 225. Marsh, In re, 195. V. Joseph, 165, 176. V. Keating, 165, 220. Marshall v. Emperor Life Ass. Soc, 277. V. Glamorgan Co., 99. V. Hynd, 39. V. National Provincial Bank, 226. Marten v. Whale, 240. Martin v. Martin, 102. V. Wingate, 45. Martinez y Gomez v. Alhson, 220, 232, 232. Martyn v. Gray, 246. Mason v. Clifton, 169. Mason's Trs. v. Poole & Robinson, 163. Masonic Co. v. Sharpe, 117. Matheson v. Mackenzie, 194. Matthews v. Smallwood, 82, 200, 200. Matson v. Trower, 194. Maule V. Robb, 22, 82. V. Sommers, 106. Maxton v. Douglas, 104. Maxwell v. Burgess, 77. V. Glassock Tenants, 13. V. Grierson, 36. V. Lindsay, 195. V. Pringle, 153. V. Sharp, 26. May V. Chapman, 235. Mayor of the Staple v. Bank of England, 252, 257. Mead v. Young, 258. Meohan v. N.E. Ry., 27. V. Watson, 87. Meggeson v. Groves, 83. Meggy V. Imperial Discount Co., 93. Mehta v. Sutton, 232, 234. Mein v. Hardie, 285, 287. Melhado v. Porto Allegro Ry. Co., 162. Melrose v. Bruce, 126. & Co. V. Hastie & Co., 27. XXVI LIST OF CASES CITED Melvil V. Arnot, 155. MelviUe v. Douglas's Trs., 55, 62, 63. Menzies v. Caledonian Canal Comrs., 69. V. Campbell, 11, 12. Mercer v. Aldie, 128, 129. V. Peddie, 177. Mersey Docks and Harbour Board, 27. Messenger, In re, 105. Meyer & Co. v. Sze Hai Tong Co., 223, 258. Midland By. Co. v. Taylor, 257. Mildred v. Maspons, 234. Miles V. M'llwraith, 2. Mill V. Montrose Mags., 103. MiQar v. Marshall, 67. V. Tremamando, 40. Millbourn v. Lyons, 76. MiUer v. Dott, 45. V. Finlay, 50. V. L. Gwydor, 85. V. Little, 212. V. Miller, 112. V. Race, 262. ■0. Rae, 173, 173. V. Thorburn, 178. & Aldworth v. Sharp, 51. & Co. V. Potter, 222. & Son V. Ohver and Boyd, 88, 195, 195. Milliken v. Love, 247. Mills V. Drewitt, 120. Mine V. Harris, Jones & Co., 222. V. Innes, 148. Minto V. Kirkpatrick, 150. Mirabita v. Imperial Ottoman Bank, 233, 240. Mitchel V. Mitchel, 151. Mitchell V. Burnet & Mowat, 229, 230. V. Cuddie, 91. V. Cunningham, 152. V. Davidson, 107. V. Heys & Sons, 2, 216, 228, 228. V. Steward, 75. Mitchell's Trs. v. Pearson, 108. Mitchells v. Mein, 92. Moir V. Alloa Coal Co., 138. Mold V. Wheatcroft, 63, 130. Molleson v. ChalUs, 93. MoUett V. Brayne, 21. Mollwo, March & Co. v. The Court of Wards, 245. Monorieff v. Waugh, 126. MoncriefEe v. Ferguson, 110. Money v. Hannan, 113. Monk V. Whittenbury, 232. Monklands Ry. Co. v. Glasgow etc. Co., 162. Monmouth, D. v. E. Tweeddale, 62, 155. Monroe v. L. Kerry, 15. Montaignac v. Shitta, 223. Montgomerie v. Brown, 34. V. Carrick, 195. Montgomery v. Semple, 194, 195, 195. Montrose v. Livingston, 156. Moodie v. Moodie, 52, 52. Moody V. PaU Mall Co., 233, 233, 235. Moore v. Munro, 81. Moray, Cs. v. Stewart, 50. Morel Bros. & Co. v. E. Westmorland, 167. Morgan (1849), 99, 121. V. Milman, 15, 40. Morison v. Balfour, 140. V. London, County and Westminster Bank, 223, 258. Morland v. Sprot, 131. Morphetff. Jones, 42, 50. Morrell v. Shedd, 60. Morris v. BetheU, 211, 213. V. Bicket, 61, 66. Morrison v. Campbell, 83. V. M'Kirdy, 78. ■0. Muspratt, 268, 276, 276. V. SomerviUe, 39. • V. Statter, 218. V. Universal Marine Ins. Co., 203, 204, 272, 274. Morse v. Royal, 166. Mortimer v. Hamilton, 167. V. Wilson, 29. Morton v. Smith, 103, 266. V. Young, 154. E. V. Tenants, 22. Moseley v. Simpson, 195. Moss V. Moss, 268. Mowat V. Caledonian Banking Co., 33, 40. Mowatt V. Castle Steel Co., 224. Moyes v. Cook, 243. Mudie V. M'Intosh, 155. Muir V. Crawford, 38, 46. V. Dickson, 177. V. Wallace, 34. Muir's Exrs. v. Craig's Trs., 209, 212. Muirhead v. Glasgow Highland Soc, 66, 71. V. Martin, 103. Mundy v. JolUfie, 32, 50. Munro v. Eraser, 108. V. Hogg, 103. V. Jervey, 138. V. Munro, 82, 102, 152. Murdoch v. Moir, 40, 50. V. Wallace, 138. Murison v. Gibbon, 269. Murray v. Bush, 94, 94. V. Campbell & Co., 222. V. E. India Co., 222. V. Her Tenants, 141. V. Johnston, 57. V. M'Gilchrist, 48. V. Murray, 155. V. Murray's Trs., 156. V. Thomson, 103. LIST OF CASES CITED XXVI 1 Murray's Trs. v. Gordon, 83, 84. Murrell v. Mlward, 21. Mutton V. Peat, 261. Nahmaschinen Fabrik v. Lea & Harris, 235. Nairn Station Hotel v. Macpherson, 38, 42, 49, 83. Napier v. Balfour, 137. V. Dick, 37, 48. V. RoUook, 152. Nash. I). Birch, 200. V. Calthorpe, 289. V. De Freville, 251, 258, 262. Natal Land etc. Co. v. Pauline Syndicate, 162. National Bank v. Dickie's Tr., 262. Bank of Scotland v. Campbell, 31, 38, 39, 45. Bank of Scotland v. Shaw, 161. Benefit Trust v. Coulter, 3i; 37. Bolivian Co. v. Wilson, 220. Coffee Palace Co., In re, 171, 173, 175. Permanent Soc, 221. Protector Fire Ins. Co. v. Xivert, 277. Provincial Bank, 283. Provincial Bank v. Jackson, 264. Navulshaw v. Brownrigg, 229, 234, 235. Neave v. Moss, 17. Neil V. Vashon, 48. Neill V. E. Cassilhs, 34, 36, 50. Neilson v. Morrison, 137. Nelmes & Co. v. Montgomery & Co., 177, 178. Nelson v. Stocker, 6. Nepean v. Budden, 15. Newbiggin Gas Co. v. Armstrong, 174, 174. New Brunswick Co. v. Muggeridge, 289. Newcastle Fire Office v. M'Morran, 208. New Land Development Assn., 93. River Co. v. Crumpton, 84. Newsome v. Coles, 248. Newton v. Belcher, 177. V. Liddiard, 2. New Zealand Land Co. v. Watson, 232. Nicol V. Dundee Harbour Trs., 72, 179. V. Hope, 56, 64. Nicholson v. Glasgow Blind Asylum, 69. V. Harper, 238. V. Knowles, 23. Nicolson V. Burt, 287. V. M'Leod, 101. V. Swaney, 47. Nicolson's Ass. v. Macalister's Tr., 148. Nisbet V. Newlands, 38, 46. Nithsdale v. Tenants, 13. Noble V. Inverness Mags., 173. V. Kennoway, 274. V. Ward, 20. Nocton V. L. Ashburton, 6. Norie v. Porterfield, 107. Normand v. Macartney, 168. Norris v. Cottle, 160. North V. Percival, 34. N.B.A. Co., In re (Ex parte Swan), 251. North British Ins. Co. v. Lloyd, 281. N.B. Ry. Co. V. Barr & Co., 195. V. Clark, 72. V. Moon's Trs., 130. North of Scotland Banking Co. v. Behn, MoUer & Co., 217, 225. North Sydney Investment Co. v. Higgins, 162. N. -Western Bank, Ex parte [In re Slee), 230. Norway v. Rowe, 55, 97. Noton V. Brooks, 22. Nottingham Patent etc. Co. v. Butler, 76. Nova Scotia Steel Co. v. Sutherland Co., 103. Nunn V. Fabian, 51. Nurse v. Durnford, 174, 174. Oakbs v. Turquand, 96, 213, 289. Oastler v. Henderson, 21. Ochs V. Ochs Brothers, 195. Odell V. Cormack Bros., 222. OgUvie V. Duff, 197. V. Scot, 143, 153. V. Stuart, 35. V. West -Australian etc. Corp., 212. Ogilvy V. Ramsay, 40. Ogle V. Atkinson, 23, 24. Oldham, 23. Oliphant v. Monorgan, 35. OMver v. Bank of England, 266. V. Grieve, 167. V. Powell, 18. Ommanney v. Smith, 135, 137, 144. Onward Building Soc. v. Smithson, 6, 265. Oppenheimer v. Attenborough, 232, 234. V. Frazer, 231, 233, 233, 234. O'Reilly v. Thompson, 41. Orr V. Chase, 177. V. Mitchell, 77. V. Pollock, 94. & Barber v. Union Bank of Scotland, 2, 253. Orrell v. Orrell, 76. Osborne v. Bradley, 76. V. Brown, 119. Oswald V. Berwick (Mayor), 285. Otto's Kopje Diamond Mines, In re, 186, 192. Otto V. Weir, 194. Overton v. Hewett, 161. ■Owen V. Homan, 283. Oxford V. Provand, 33. Mayor v. Crow. 30. XXVlll LIST OF CASES CITED Paciito Coast Coal Mines v. Arbuthnot, 181, 219. Padbury v. Clark, 152. Pain V. Coombs, 40, 50. Paine ■;;. Bevan, 222. Palmer v. Moore, 97, 98. Panmure L. v. Crokat, 151. Panoutsos v. Raymond Corp., 201. Panton v. Jones, 16. Pap6 V. Westaoott, 174. Parbury (1896), 190. Park V. Gould, 44. V. Mackenzie, 34. Parker v. Izat, 47, 52. V. Smith, 41. Gaines & Co. v. Turpin, 195. Parkhurst, 95. Partington v. Woodcock, 15. Parr's Bank v. Albert Mines, 281. Parry v. House, 16, 17. Parsons v. Bignold, 279, 279. Pasley v. Freeman, 43. Paterson v. Barclay, 91. V. Burton, 51. V. Currie, 106, 139. V, Elington & Sons, 48. V. E. Fife, 36. V. Gandassequi, 105. V. Paisley Union Bank, 217. V. Paterson, 40. V. Sanderson, 194. V. Sparrow & Co., 212. V. Tash, 229. V. Tod, 79, 117. V. Wright, 45. Paterson & Co. v. Allan, 273. & Sons V. Glasgow Corp., 195. Paton V. TurnbuU, 12, 101. Patrick v. Watt, 128. V. Whyte, 114, 116. Patterson v. Landaberg, 268. Paul V. Boyd, 107. V. Henderson, 7, 195, 196. Payne & Co., David, In re, 213. V. Wilson, 241. Pearl Life Ass. Co. v. Greenhalgh, 208. Life Ass. Co. v. Johnson, 208, 279. Mill Co. V. Ivy Tannery Co., 117. Pearson v. Scott, 232. Pearson's Exrs., 160. Pearston v. Wilson, 177. Peek V. Gurney, 90, 290. V. Matthews, 73, 74, 75. Peel (1866), 96. Peele, Ex parte, 177. Penang Foundry Co. v. Gardiner, 191. Penman v. Martin, 12. Penrhos College v. Butler, 201. Penton v. Barnett, 84, 200. Percy v. Meikle, 195. Perring v. Hone, 246. Perrins v. Marine etc. Ins. Soc, 276. Perry- Herrick v. Attwood, 227. Peter v. Kendal, 22. V. Rennie's Reps., 112. Peterkin v. Forres Common Agent, 11. Petrie v. Forsyth, 33, 39. V. Riohart, 142. Ph6n6 V. PoppleweU, 21. PhiUp V. Gordon Cumming's Exrs., 42, 51, 78. V. Gordon, 173. Phillips V. Edwards, 41. V. Foxall, 287. V. Huth, 235, 237. V. Im Thurm, 115. Philorth V. Rathan Heritors, 64, 155. Phipps V. Sculthorpe, 21. Phoenix Ass. Co. v. Young, 113. life Ass. Co. (1862), 59, 183. Phosphate of Lime Co. v. Green, 99, 181, 183 Piokard v. Sears, 2, 256, 260. Picker v. London & County Banking Co., 260. Pickering v. Busk, 227. Pickersgill v. London & Provincial Ins. Co., 272. Piokin ■«. Hawkes, 48. Pidcock V. Bishop, 282. Piggott V. Stratton, 2, 6, 73. PiUing V. Armitage, 63. Pilot V. Craze, 161. Pimm V. Lewis, 277. Pinner v. Knights, 174. Pitman v. Crum Ewing, 102. Pitt V. Chappelow, 115. Place V. West Highland Ry. Co., 56. Plevin V. Brown, 16, 17. Pochin & Co. v. Robinows & Marjori- banks, 229, 236. Polak V. Everett, 3. Pole V. Leask, 217. Polhill V. Walter, 170. Pollock V. Craig, 33. V. King, 195. V. M'Andrew, 77. V. Scott, 93. Polwart V. Halyburton, 129. Polwarth, L. o. Murray, 78. Poole Corp. v, Whitt, 17. Pope V. Biggs, 18. Portahs v. Tetley, 238. Porteous v. Glasgow Cordiners, 104. V. M'Beath, 44. Porter v. Moore, 5, 6, 267. Porterfield v. Cunningham, 18. Portland, D. v. Baird & Co., 82. D. V. Samson, 82, 130. Portuguese Copper Mines, 163. Pott V. Eyton, 246. Pow V. Davis, 172, 175. LIST OP CASES CITED Powell V. London and Provincial Bank, 262. V. Lovegrove, 42, 49. V. Smith, 167. V. Thomas, 55, 61. Powrie v. Johnston, 145. V. Louis, 210. Pratt V. Abercromby, 40, 49. Preeoe v. Howells, 6. Prendergast v. Turton, 96, 97. Presoott V. Flinn, 222. Prested Miners' Co. v. Garner, 48. Price V. Assheton, 33. V. Groom, 245. V, Salusbiiry, 42. Priestly v. Fernie, 104, 105." Primrose v. Duie, 195. V. Rossyth, 33. Prince v. Clark, 167. Pringle v. Pringle, 148. V. Tate, 287. Proctor V. Bennis, 54, 60, 60, 63. Prole V. Soady, 46. Property Ins. Co. v. Jfational Protector Co., 203, 273. Proudfoot V. Lindsay, 177. V. Montefiore, 206, 275, 280. Provan v. Gray, 212. Provincial Ins. Co. v. Leduc, 204. Pryse (1904), 160. Pulleyne v. France, 75. Purdon v. Rowatt's Trs., 263, 264. Qtjebbc Co. V. Commercial Bank of Canada, 203. Queensberry, Ms. v. Wright, 104. Queensbury v. CuUen, 161. Queensland Investment Co. v. O'ConneU, 172. R. V. Blenkinsop, 130. V. Lubbenham, 7. V. Paulson, 200. Rae V. Neilson, 149, 149. Raes V. Meek, 158. Railton v. Gray, 91. V. Matthews, 282, 284. Rainbow v. Howkins, 172. Rait V. Galloway, 36. Rajapakse v. Fernando, 8. Ramazotti v. Bowring, 168, 169, 227. Ramsay v. Commercial Bank of Scotland, 198. V. Howison, 86. Ramsay's Exrs. v. Grahame, 247. Ramsden v. Dyson, 56, 60, 63, 159. Ramuz v. Leigh-on-Sea etc. Club, 75. RandeU v. Trimen, 170, 171, 172, 175. Rankine v. Logie Den Land Co., 130. Ransohofi v. Burrell, 93. Rashdall v. Ford, 173. RatcUffe v. Shoolbred, 272. Rathbone v. Glenny, 209. Rattray v. LesUe's Tr., 81. Reay v. Chalmers, 83. Redding v. Wilkes, 41. Redgrave v. Hurd, 179. Reeve v. Bird, 15. Reid V. Binning, 103. V. Edinburgh Gas Light Co., 162. V. Rigby & Co., 220, 221. & Co. V. Employers' Accident Co., 277, 278. & Co. V. Harvey, 270. Reid's Trs. v. Watson's Trs., 13. Reis V. Scottish Equitable Life Ass. Soc, 207. Rennet v. Mathieson, 226. Rennie v. Young, 63. Renton v. Scott, 92. Renter v. Douglas, 48. V. Electric Telegraph Co., 184. Reversion Fund and Ins. Co. v. Maison Cosway, 221. Revett V. Harvey, 154. Rejmard v. Spence, 152. Reynell v. Lewis, 160, 160. Rhind v. Mackenzie, 44. Rice V. Read, 105. Richards v. Browne, 104, 120. V. Jenkins, 8. V. Johnston, 8. Richardson v. Borthwick, 71. 0. Richardson, 154. V. Scott, 110. V. WiUiamson, 172, 175. Richmond v. Grahame, 55. Mayor v. Thomson, 15. Riddell v. Scot, 145. Riddick v. Douglas, Heron & Co., 107. V. Wightman, 81. Ridgway v. Brock, 177. V. Wharton, 159. Rigby & Beardmore v. Downie, 68. Rigg V. Durward, 143. Right d. Fisher j;. Cuthell, 163. Riley v. Paokington, 160. Rimmer v. Webster, 189, 226, 251. Ringland v. Lowndes, 195. Rintoul & Co. V. Bannatyne, 93. Rires v. Rires, 152. Risbourg v. Bruckner, 169. Ritchie v. Dickson, 19. V. Ferguson, 111. Robarts v. Tucker, 254, 256. Robb V. Gow Bros., 223. Roberton v. Roberton, 130, 156. Roberts, 95. V. Ogilby, 23, 23. V. Roberts, 4. Robertson v. D. Athol, 10. V. Beatson, M'Leod & Co., 164. XXX LIST OF CASES CITED Robertson v. Boyd & Arnans, 195. V. Davidson, 61. V. Foulds, 164. V. Hall's Tr., 226. V. Hogg's Trs., 137. V. Lawson, 42. V. Menzies, 82. V. Ogilvie's Trs., 7, 140, 142. V. Orme, 18. V. Ross, 173. V. Scott, 55. V. Stewarts, 67. & Co. V. Galloway & Reid, 45. Robertson's Trs. v. Bruce, 70. Robinson (1869), 167. V. Gleadow, 167. V. Jenkins, 27. V. Montgomeryshire Brewery, 261. V. Restell, 233, 238. V. Ross, 220. V. Smith, 48, 88, 131. V. Yarrow, 115, 222. Robson V. Bywater, 122, 132, 148. V. TurnbuU, 172. Rochdale Canal Co. v. King, 61, 62, 63. Rodgers v. Harvie, 65. Roe d. Berkeley v. Archbishop of York, 20. V. Mutual Loan Fund, 2. Rogers v. Pitcher, 16. Sons & Co. V. Lambert & Co., 25, 27. RoUands v. Rolland, 146. RoUock V. Corsbies, 10. Romford Canal Co., In re, 184, 186. Roper V. WiUiams, 73, 75. Rose V. E. Fife, 113. V. M'Leay's Trs., 134, 136. V. Rose, 155. V. Spavens, 251. Rosebery's Trs., E. v. Geddes, 91. Rosehaugh, Ly. 145. Ross V. Bradshaw, 277. V. Edwards, 23, 25. V. Eindlater, 137. V. Fisher, 167. ■c. Masson, 147, 150, 150. V. Monteith, 110. ' V. Pender, 88. V. Ross (1796), 49. (1920), 93. Ross, Bp. of V. Fouller, 143. Rossdale v. Denny, 34. Rotherham etc. Co., 162. Roughhead v. White, 136. Routh V. Thompson, 158, 159, 169. Rowell V. Satchell, 70, 75. Rowland, In re, 245. Roxburgh, D. v. Wauchope, 11. Royal Bank of Scotland v. Broughton, 102. Bank of Scotland v. Greenshields, 44, 266, 281. Royal Bank of Scotland v. Rankin, 281, 284. Exchange Proprietors v. Cotton, 69. Ruben v. Great FingaU Consolidated, 189, 189, 190. Rue V. Houston, 143. Rule V. Jewell, 97, 136. Rumball v. Metropolitan Bank, 260. Russel V. Langstafie, 116. Russel V. Paisley, 146. V. Sprot, 139. RusseU V. FareU, 266. V. Kirk, 93. V. Maoknight, 87. V. Thornton, 203. Russell's Trs.' v. RusseU, 112. Rutherford v. Bowden Feuars, 35. V. Robertson, 93. V. Rutherford's Trs., 47. Rutherglen Mags. v. Bainbridge, 65, 65. Ruthven v. Banfi, 194, 195._ Ryan v. Sams, 225. Rymer v. M'Intjrre, 48. Ryrie v. Ryrie, 132, 134. S. V. Burnand, 280. Saffron Walden Soc. v. Rayner, 173. St Andrew's Archbishop v. Bethun, 81, 151. St James' Club, In re, 161. St Mary Vestry v. Hornsey U.D.C., 68. Salkeld, In re, 195. Salton V. New Beeston Cycle Co., 174. Salvesen & Co. v. Rederi Aktiebolaget Nordstjernen, 173, 174. Samuel Bros. v. Whetherby, 161. Sanders v. Sanders' Trs., 143. Sanderson v. Aston, 285, 287. V. Berwick-on-Tweed Corp., 86. V. CoUman, 115. Sandilands v. Marsh, 176. Sandys, Ex parte, 186. V. Hodgson, 102. Sarat Chunder Dey v. Lala, 7. Saunderson v. Griffiths, 159, 162. Savage v. Foster, 8, 51, 254. V. Norton, 29. Sawers v. Tradeston Victualling Soc, 244. Sayers v. Collyer, 60, 74, 75. Scales V. L. & S.W. Ry. Co., 4. Scarf V. Jardine, 140, 217, 225, 245, 248. Schaw V. Tenants, 145. Schjott V. Schjott, 173. Soholey v. Ramsbotham, 116. Soholfield V. E. Londesborough, 254, 255, 256, 258, 259. Schultz V. Astley, 116. Sclater v. Oddie, 138. Scot V. Cairns, 79. V. Stewart, 225. LIST OF CASES CITED XXXI Scotland v. Reid, 132. Scott V. Anderson, 139. V. Beale, 177. ■0. Crawford, 23. V. Donaldson, 220. V. Drummond, 65. V. Dunlop, 129. V. Ebury, 162. V. Fotheringham, 8. V. Handyside's Trs., 102, 137, 144. V. Mitchell, 130. V. Wotherspoon, 198. V. Yuille, 107. Scott-Chisholm v. Brown, 21. Scott & Gilmour v. Wink, 91. Scottish Equitable Life Ass. Soo. v. Buist, 205, 275, 276. Lands etc. Co. v. Shaw, 34. Provident Institution v. Boddam, 277. Shire Line v. London & Prov. Ins. Co., 273. Seaman v. Fonerau, 269, 272, 272. Seath V. Taylor, 126, 132, 133. Seaton v. Heath, 280, 281. Brick and Tile Co. v. Mitchell, 76, 139. Seddon v. N.E. Salt Co., 3. Selkirk v. Ferguson, 263, 263. V. Law, 131, 149, 149, 149. Selkrig v. Davies, 102. Sellar v. Alton, 40, 51. V. Highland Ry. Co., 193. Semple's Exrs. v. Semple, 42, 42. Senhouse v. Christian, 55, 97. Serjeant v. Nash, Field & Co., 15, L6, 200. Serruys & Co. v. Watt, 213. Seton V. Lafone, 250, 251. Sewell (1868), 181. Shannon v. Bradstreet, 40. Sharp V. Clark, 78. V. Milligan, 176. Shaw V. Henderson, 60. V. Port Phihp etc. Co.^ 189. V. Boyar, 281. V. Shaw, 142. Sheffield, E. v. London J.S. Bank, 261. Corp. V. Barclay, 171, 173, 190, 215. etc. Ry. Co. v. Woodcock, 94, 94. Shelbury v. Scotsford, 23. Shenstone v. Hilton, 240, 241. Sheonath v. Ramnath, 195. Shepherd v. Berger, 200. V. Meldrum, 111, 112. V. Reddie, 115. Sheppard v. Union Bank of London, 231, 232, 234, 238. Sheridan v. New Quay Co., 26. ShielSs V. Dalziel, 87, Shilhbeer v. Jarvis, 41, 61. Shipton Arbitration, 240. Shirra v. Douglas, 45. Shirreff v. Wilks, 177. Shoolbred v. Nfltt, 273. Short V. Taylor, 59, 63. Shropshire Union Railway and Canal Co. V. The Queen, 184, 189. Sievewright v. Scott, 49. Sim V. Stewart, 55. Sime V. Balfour, 132, 150. Simm V. Anglo-American Tel. Co., 3, 6, 7, 25, 46, 186, 187, 188, 192. Simmons v. Liberal Opinion, Ltd., 174, 174. Simons v. Patchett, 175, 175. Simpson v. Accidental Death Ins. Co., 208. V. Egginton, 168. V. Mason, 71. Sinclair, 222. V. Caithness Flagstone Co., 40. V. Campbell's Trs., 125, 129, 129. V. Leshe, 14. V. M'Beath, 78. V. Mercantile Soc, 99. V. Mossend Iron Co., 50. V. Richardson, 152. V. Sinclair (1715), 142. (1771), 11. V. Weddell, 33. Muirhead & Co. ■«. Wallace & Co., 220. Skeen (1637), 42. Skelton v. M'Laren, 42. Skene v. Maberleys, 81. V. Ramsay, 153. V. Spankie, 49. Skillett V. Fletcher, 285. Skinner v. L. Saltoun, 80. Skipwith V. Green, 7. Skyring v. Greenwood, 119, 130. Slee, l7i re (Ex parte N.-Western Bank), 230. SMm V. Croucher, 6, 267. Sloman v. Bank of England, 257. Sly Spink & Co., In re, 95. Smethurst v. Mitchell, 104. Smith, 95. V, Allan, 269, 274. V. Baker, 169. V. Bank of Scotland (1813), 283. (1821), 32. (1829), 283. V. Bisset, 269. V. Bogle, 269. V. Campbell, 131. V. Chadwick, 266. V. Chester, 115. V. Cologan, 116, 169. V. Hull Glass Co. (18-19), 183. (1852), 167. V. Kay, 36, 143. V. Low, 155. LIST OF CASES CITED Smith V. M'Guire, 219, 219. V. Marsack, 115. V. Marshall, 47. V. Maryculter Soh. B., 87. V. Maxwell, 113. V. Mogford, 132. V. Oliver, 37, 40. V. Prosser, 256, 262. V. Reed, 172, 172. V. Robertson, 78. V. Scott & Best, 217. V. Taylor, 163, 169. & Tasker v. Robertson, 106. Smout V. Ubery, 173, 174, 225. Smyth V. Ogilvies, 131. Snaddon v. London, Edinburgh, and Glasgow Ass. Co., 44, 287. Snell, In re, 105. Sobey v. Sainsbury, 69, 70, 75. Soci6t6 G6n6rale v. Metropolitan Bank, 254. G6n^rale de Paris v. Walker, 186, 262. Solly V. Bathbone, 238. Somersetshire Coal & Canal Co. v. Harcourt, 60, 62, 63. SomervUle v. E. Annandale, 155. V. Muirhead's Exr., 103. Sopwith V. Maughan, 152. Sorley's Trs. v. Grahame, 162. South of England etc. Petroleum Co., In re, 289. Spackman, 99, 100, 180. V. Evans, 121. Sparenborg v. Edin. life Ass. Co., 207. Spedding v. NeveU, 172, 175, 175. Speight V. Gaunt, 164. Spence v. Boyd, 132. V. Dick's Creds., 134. V. Paterson's Trs., 133. SpiUer v. Paris Skating Rink Co., 162. Spittle V. Lavender, 169, 169. Spooner v. Browning, 219. Sproul V. Wilson, 33. Stace & Worth, 180. Stagg V. ElUott, 222. Stanhope, 99, 100. Staple, Mayor of the v. Bank of England, 252, 257. Stark V. Napier, 129. Starkey v. Bank of England, 170, 172, 173, 216. Station Hotel, Nairn v. Macpherson, 38, 42. Stead V. Cox, 109. Stebbing v. Liverpool and London and Globe Ins. Co., 280. Steel V. Steels, 154, 155, 156. Steel Co. of Scotland v. Tancred, Arrol & Co., 88. Steele v.'Gourlay, 161. Steele v. Mackinlay, 116. Stein V. Stein, 268. Stein's Ass. v. E. Mar, 167. Stenhouse, 95. Stephen's Tr. v. Macdougall & Co.'s Tr. 178. Stephens v. Junior Army and Navy Stores, 201. Stevens v. Burden, 220. Stevenson v. Campbell & M'Lean, 105, 162. V. TVIanson, 77. Stevenson's Exrs. v. Crawford, 129. Stewart (1866), 96, 100. V. BailUe, 149. I). Brown, 117. V. Bruce's Trs., 131, 148, 149, 150. V. Bunten, 72, 73. V. Burns (1802), 12. (1877), 47. V. Central Bank of Scotland, 253. V. Clark, 77, 77, 78. V. Dunlop, 269. V. Kennedy, 28, 263, 265. V. Lang, 137. V. Maconochie's Trs., 112. V. MtcheU, 34. V. Murdoch, 21. V. North, 98. V. Simpson, 136. V. Stewart (1663), 145. (1836), 139. (1839), 120. V. Watson, 198. V. WyUie, 89. & JVIacdonald v. M'Call, 34, 48. Stirling v. Haldane, 67. V. Ker, 45. Stockley v. Stockley, 132. Stocks V. M'Lagan, 107. V. Simpson & Co., 249. Stodart v. Dalzell, 33, 39. Stonard v. Donkin, 24. Stone V. Aberdeen Marine Ins. Co. 270. Stonefield v. Maoarthur, 198. Stott, 95. Straffon's Exrs., 94, 95. Stratford-on-Avon v. Parker, 160. Stribley v. Imperial Marine Ins. Co., 272. 275. Strode v. Seaton, 17. Strohmenger v. Attenborough, 241. Strong V. Stringer, 200. Stroud V. Stroud, 102. Struthers v. Smith, 139. Stuart V. Douglas, 106. V. M'Gregor & Co., 227. Sturrook v. Robertson's Tr., 110. V. Thoms, 94. Suart V. Haigh, 173. Summers v. Solomon, 215, 219. LIST OP CASES CITED XXXHl Supple V. Cann, 209. Surcome v. Pinniger, 46. Sutherland v. Briggs, 51, 51. V. Hay, 42. V. Low & Co., 281. V. Montiose Co., 80. V. Morson, 104. Sutherland's Tr. v. Miller's Tr., 40, 46, 49, 49, 51. Trs. V. Lookhart, 129. Svensden v. Wallace, 204. Swan, Ex parte {In re N.B.A. Co.), 251. V. Bank of Scotland, 33. V. North British Australasian Co., 251, 251, 252, 252, 252, 253, 256, 256, 257, 258, 260. Swete V. Fairlie, 276. Swift V. Jewsbury, 224. Swinburne & Co. v. Western Bank, 222. Swinton v. Pedie, 68. Syllivan v. Stradhng, 7, 14, 16. Synge v. S5mge, 46. Tabbebnob v. Tabbernor, 174. Tadman v. Henman, 15. Tailors of Aberdeen v. Coutts, 69. Tait V. Geddie, 197. V. Mackintosh, 88. Taite, 96. Tasker & Sons, In re, 224. Tayler v. Great Indian Peninsula Ry., 262. Tayleur v. Wildin, 201. Taylor v. Duff's Trs., 85. V. Grieve, 195. V. HiUhouse's Trs., 144. V. Hughes, 100. V. Kymer, 237, 237. V. Mather, 133. V. E. Moray, 83, 200. V. Needham, 8. V. Plumer, 159. V. Simson, 45, 46. V. Trueman, 237. V. Yorkshire Ins. Co., 278, 279. Taylor's Tr. v. Paul, 109. Telfer v. Hamilton, 194. V. Maston, 143. Telford v. Jamieson, 154. Tennant v. Henderson, 270. Teiment v. City of Glasgow Bank, 289. V. M'Donald, 198. Tersie v. Burnett, 18. Thackrah v. Ferguson, 237. Thain v. Thain, 138. Thames and Mersey Marine Ins. Co. v. ' Gunford ' Ship Co., 271, 273. The Bonita, 165. Thew & Co. V. Sinclair & Co., 91. Thicknesse v. Bromilow, 116. Thistle Friendly Soc. v. Garden, 287. Thomas v. Atherton, 176. V. Brown, 3. V. Cook, 19. V. Daw, 143. V. Dumbreck, 81. V. Finlayson, 174. V. Stiven, 106. Thompson v. Farmer, 238. V. Veale, 241. Thomson v. Ms. Annandale, 146. V. Bank of Scotland, 285. V. Buchanan, 269, 274. V. Campbell's Exrs., 7, 127. V. Clydesdale Bank, 261. V. Davenport, 105. V. Dudgeon, 90. V. Eastwood, 120. V. FuUerton, 94. V. Hodgson, 103. V. Izat, 92. V. Monkland Steel Co., 81. V. Murray, 133. V. Stewart, 153. V. Thomson, 37, 50. V. Thomson & Co., 83'. V. Thomson's Trs., 112. V. Weems, 275, 276, 276, 277. & GiUespie v. Victoria Eighty Club, 161. Thomson's Trs. v. Monteith's Tr., 103. V. Muir, 193. Thorburn v. Martin, 181. Thome v. Tilbury, 24, 25, 27. Thornton-Smith v. Motor Union Ins. Co., 279. Thoroughgood, 263. Threipland v. Campbell, 102, 128, 132. Thurrock Board v. Goldsmith, 65. Thynne v. L. GlengaU, 46. V. Shove, 249, 249. Tiedemann, In re, 163, 163. Tillott, In re, 266. Tindall v. Taylor, 238. TinneveUy Sugar Refining Co. v. Mirrless, Watson & Yaryan Co., 161, 162. Tod V. Beattie, 132, 132. V. WeUs, 13. (Wemyss) v. Wemyss, 46. Tod's Trs. v. MelviUe, 136. Todd V. Emly, 161. V. Robinson, 215. Tomkinson v. Balkis Consohdated Co., 7. Toronto Ry. Co. v. National etc. Ins. Co., 208. Touch V. Hardismilne, 19. Towers v. African Tug Co., 163, 182, 182, 184. Towerson v. Jackson, 18. Towle V. National Guardian Ass. Co., 283. Townsend v. Jarman, 249. Trabroun v. Peebles, 129. XXXIV LIST OF CASES CITED Traill v. Baring, 268. V. Smith's Trs., 251. V. Traill, 14. Tredegar, L. v. Windus, 208. Tremoille v. Christie, 232. Trevor v. Whitworth, 163. Trickett V. Tomlinson, 219. Trotman v. Flesher, 15, 40. V. Wood, 22. Trott V. National Discount Co., 224. Trotter v. Farnie, 68. V. Hall, 198. V. Martin, 46. V. MartjT, 45. Trueman v. Loder, 222, 225. Tully V. Ingram, 178. Tunno, In re, 195. TurnbuU v. Allans, 94. V. Oliver, 81. V. Scottish Provident Institution, 276. Turner v. Green, 213. V. Hamilton, 70. V. MeUadew, 47. V. Sampson, 230, 233, 235, 235. V. Simpson, 135. Turquand t). Marshall, 101. Tweedie v. M'lntyre, 45, 46. Tyerman v. Smith, 93. Tyrer & Co. v. Hessler & Co., 103. Unglby v. Ungley, 46. Union Bank v. Makin & Sons, 167, 223. Credit Bank v. Mersey Docks, 253, 253, 257. United Mutual Ass. Co. v. Murray, 32. U.S. Steel Products Co. v. G.W. %., 24. Ure V. M'Cubbin, 91. Urquhart v. Bank of Scotland, 211, 211. V. Urquhart, 152. Vale of Neath Co., In re, 121. VaUetort Co., In, re, 226. Van Casteel v. Booker, 233. Van Haaselt v. Sack, 113. Van Laun & Co. v. Neilson, Reid & Co., 35. Vaughan v. Moffat, 231, 233. Veitch V. PaUat, 144. Venables v. Baring Bros., 254. Vere v. Ashby, 159, 177. Vice V. Anson, 246. Vickers v. Hertz, 215, 229, 236, 251. Vivian v. Champion, 83. VuUiamy v. Noble, 249. Waddilovb v. Barnett, 18. Waddington & Sons v. Neale & Sons, 232. Wadling v. Oliphant, 93. Wainwright v. Blandj 279, 279. Waithman v. Wakefield, 167. Wake V. Atty, 270. Waldron v. Sloper, 251. Walker (1868), 100, 100. V. Drummond, 139. V. Flint, 31, 36, 50, 80. V. Frobisher, 193. V. Manchester etc. Banking Co., 253. V. Milne, 33. V. Wishart, 70. Walker's Trs. ■;;. Manson, 21. Wall V. Cockerell, 166. Wallace v. Campbell, 107. V. Miller, 111, 167, 220. V. D. Portland, 92. V. Wallace, 45. Wallace's Factor v. M'Kissock, 285, 287. Wallace's Trs. v. Port Glasgow Harbour Trs., 253, 257. Wallis V. Hands, 20. Wabond V. Hawkins, 200, 200. Walter v. Ashton, 247. V. James, 163. Walton V. Lavater, 22. V. Waterhouse, 17. Walwood V. Taylor, 145. Ward (1867), 100. V. Law Property Soc, 283. V. Sharp, 136. Warden v. British Linen Co., 211, 212. V. Jones, 46. Wares v. Dufi-Dunbar's Trs., 36. Waring & GiUow v. Thompson, 55. Wark V. Bargaddie Coal Co., 62, 63, 63. Warr v. Jones, 175. Watercourse, A, 59, 63. Waterford etc. Ry. v. Pidcock, 192. Waterhouse v. Jamieson, 185. V. L. & S.W. Ry., 189. Waterson v. Stewart, 87. Watson, Ex parte, 245, 247. V. Avondale School Board, 138. V. Crawcour, 107. V. Fede, 92. V. Lane, 17, 18. V. Livingstone, 114. V. Mainwaring, 277. V. RodweU, 90. V. Swann, 159, 159, & Co. V. O'ReiUy, Hill & Co., 213. Watt V. Duff, 82, 135. V. Evans, 48. V. Fullerton, 115. V, National Bank of Scotland, 34, 45. Wauchope v. Hamilton, 195. Waugh V. Carver, 245. Weatherley v. Turnbull, 94. Webb, In re, 137. V. Alexandria Water Co., 254. V. Heme Bay Commrs., 182, 184, 186. Hale & Co. v. Alexandria Water Co., 260. LIST OF CASES CITED XXXV Webster v. Brown, 87. V. Foster, 272. V. Webster (1791), 249. (1854), 46. Weeks v. Birch, 15, 15. V. Propert, 4, 172, 175. Weighton v. Cuthbert & Son, 91. Weiner v. GiU, 227, 228, 228. V. HaiTis, 232, 241. Weir V. Aberdein, 203. V. Dunlop & Co., 13. Weld-BlundeU v. Stephens, 251. Welsh V. Ker, 44. Wemyss, E. v. Campbell, 19. V. Stewart, 153. (Tod) V. Wemyss, 46. Wemyss' Trs. v. L. Adv., 156. Wenlook v. River Dee Co. (1885), 163, 182, 182. (1887), 179,221. West Cornwall Ry. Co. v. Mowatt, 181. Westbury v. Aberdein, 272. Western Bank v. Adie, 289. Bank Liqrs. v. Baird, 101. Bank Liqrs. v. Bairds, 101. Bank Liquidation v. Douglas. 100. V. Maodermott, 72. Westren v. Miller, 52. Whaley v. Bagnal, 41. Wheeler v. Keeble, 196. Wheelton v. Hardisty, 268. WhiUick V. Mozley, 51. Whitbread v. Brockhurst, 29. White, Ex -parte, 227, 228. V. Bartlett, 25. V. D. Buccleuch, 106. V. Mnlay, 147. V. Jeans, 139. V. L. Morton's Trs., 193. Whiteohurch (George) v. Cavanagh, 4, 5, 6, 190, 190, 192, 192, 192, 266. Whitehall Court v. EttUnger, 18. Whitehaven Bank ■;;. Reed, 172, 175. Whitehead v. Phihpps, 153. V. Taylor, 160, 169. V. Tuckett, 219, 219. Whitmore, Ex parte, 177. Whyte V. Forbes, 92, 130. Wick V. Wick, 132. Wight V. Newton, 36. Wigram v. Cox, 248. Wilkie V. Hamilton Lodging House Co., 139. Wilkinson (1866), 96. V. King, 232. Williams v. Colonial Bank, 231. V. Evans (1875), 51. (1911), 151. V. Heales, 15. V. E. Jersey, 55, 59, 63. Williams v. Keats, 249. V. Lloyd, 4. V. Moss' Empires, 77. V. N. China Ins. Co., 164, 169. V. Pigott, 160. V. Pinckney, 8. & Co. V. Newlands & C^o., 162. Williamson v. Barbour, 176. V. Daw, 8. V. Kennedy, 35. WiUmott V. Barber, 59, 60, 61. Wills V. Stradhng, 40, 43, 50, 51, 51. Wilson (No. 2), In re, 91. V. Anderton, 24. V. Curzon, 160. V. EUott, 152. V. G. & S.W. Ry., 162. V. Lumsdaine's Reprs., 106. V. M'Vicar, 91. V. Poulter, 168, 169. V. Purdie, 145. V. Robertson, 93. V. Scott, 106. V. Scottish TypographicalAsan., 179. V. Sewell, 21. V. Stewart, 82, 135. V. Thombury, 152. V. Tumman, 159, 159, 169. ■y. Warroch, 18. V. W. Hartlepool Ry. Co., 184. V. Wilson (1783), 132, 132. (1859), 14. Winans v. L. Tweedmouth, 56. Wing V. Harvey, 207. Wingate's Trs. v. Oswald, 73. Wingfield, Ex parte, 227, 228. Winn V. Bull, 34. Wintour v. Clifton, 152. Wise V. Perpetual Trustee Co., 161. Wishart, 95. Wishaw By. Co. v. Steuart's Reprs., 162. Wood V. Pinch, 161. V. Charing Cross By. Co., 56. V. RoecIifEe, 231. V. RowcMfie, 232. WoodaU V. Pearl Ass. Co., 276. 278. Woodhouse v. Hosaok, 184. Woodley v. Coventry, 25. Woods V. Thiedemann, 254. WooUaston (1859), 98, 99. Worthington v. Wiginton, 152. Wrexham etc. Ry. Co., 221. Wright V. Gardner's Trs., 249. V. Howard, Baker & Co., 101. Wyatt, In re, 266. Wylde V. Legge, 240. Wylie V. Adam, 164. & Loohhead v. Hornsby, 44. Wyllie V. Black's Tr., 102. Wytoherley v. Andrews, 93. Wythes V. Labouchere, 282. XXXVl LIST OF CASES CITED Yageb and Guardian Ass. Co., In re, 277. Yonge V. Toynbee, 171, 172, 174, 174 174. York Buildings Co., 180. Buildings Co. v. Carnegie, 12. Buildings Co. v. Garden, 18. Buildings Co. v. Mackenzie, 135, 146. Buildings Co. v. Martin, 182, 184. Tramways Co. v. Willows, 95. Yorke v. Yorkshire Ins. Co., 277, 277. Young V. Clydesdale Bank, 264, 281. V. Cuthbertson, 117. V. Gow, 139. Young V. Grate, 252, 254, 256, 256, 257, 257, 259. V. Hunter, 177. V. Livingstone, 243. V. M'Gill, 220. V. Soott, 48. V. Smart, 105. V. Trustee Assets Co., 281. & Co. V. Ramsay, 81. Zetland, E. v. Glover Incorp., 21. V. Hislop, 69. Zulueta V. Vinent, 25. PERSONAL BAR CHAPTER I INTRODUCTION Among the ordinary pleas-in-law there are few more important than the The plea of plea of personal bar (or personal exception) in Scotland and estoppel in or'estoppe" England.^ It calls up in the mind of the pleader such terms as rei inter- ventus, homologation, ratification, adoption, acquiescence, taciturnity, mora, delay, waiver, standing by, lying by, holding out, and other phases of conduct. It is parcel of the law of evidence, and, as treated in this volume, of the law of contract. It may proceed by preventing disclaimer of title, or by preventing repudiation of an agreement instructed aliunde though informally ; or it may lead to the inference of impUed consent. In each case it operates by conclusively intercepting or shutting out all contrary pleas and proof. Mala fides may be involved, but is not of the essence. The term common to both sides of the Tweed, used to express in statute that which bars or estops, is the verb ' preclude ' ; ^ but neither this verb nor the substantive ' preclusion ' has taken root in our parlance or superseded the native terms. It would appear that the law dealt with in the following pages is Common to the same on both sides of the Tweed. It is true that a great judge has England. *" said : ' I do not always understand the meaning of that word [estoppel] ' in a Scottish ease,' ^ referring probably to the different history of the English estoppel and of the Scottish doctrine of personal bar. But in modern times, and as to that part of the law of estoppel which is here used in illustration. Lord Blackburn has said : * ' According to the law both of England and of Scotland, if the one has so conducted himself — has so spoken and so acted — that if he had been a reasonable man he would have known that the other side believed that he did agree to certain terms, and if the other side did in fact, in consequence of his so acting, believe it, it matters not that the man did not really mean to do it. He would be, as it is said in Scotland, personally barred from disputing 1 Illustrations will be culled also from and Oban Ry. Co., 1898, 25 R. H.L. at Ireland. p. 20 ; [1898] A.C. at p. 284. ' E.g. in the BiUs of Exchange Act * In Buchanan v. D. Hamilton, 1878, (45 & 46 Vict. c. 61), ss. 54, 65. 5 R. H.L. at p. 82. The facts did not let * Per Lord Watson in Maofie v. Callander in the plea. 1 INTRODUCTION Definition of estoppel. ' that he was bound by the terms which the other side had been led to ' believe were the terms reUed upon by him. In England it would be ' said that he was estopped from denying that these were the terms.. ' The idea is the same in both countries, and it is founded on perfect 'justice.' Similarly Lord Kinnear,^ after quoting as authoritative a definition of estoppel from two English cases, proceeds to remark : ' If ' this be so the doctrine of personal estoppel would appear to be identical ■ with our own doctrine of personal bar.' * Except in so far as thus assimilated to estoppel, and in so far as English definitions are expressly accepted in the House of Lords in Scottish cases, there is no formal and general Scottish definition of personal bar. In England, on the contrary, the authority is ample. The earliest definition is to be found in Piokard v. Sears : ' ' The rule of law is clear that, where one by his words or conduct wilfully causes another to believe the existence of a certain state of things,* and induces him to act on that belief, so as ^ to alter his own previous position, i" the former is concluded from averring against the latter a different state of things as existing at the same time.' ^^ This doctrine is explained by Parke B.,^^ after pointing out that the same judge had elsewhere added to ' wilfully ' (in effect) ' negligently or culpably ' standing by : ^^ ' By the term " wiKully," however, in that rule, we must understand, if not that the party represents that to be true which he knows to be imtrue, at least that he means his representation to be acted upon and that it is acted upon accordingly ; and if, whatever a man's real intention may be, l^e so conducts himself that a reasonable man would take the representation to be true and believe that it was meant that he should act upon it and did act upon it as true,^* the party making the repre- sentation would be equally precluded from contesting its truth ; and " In Mitchell v. Heys & Sons, 1894, 21 R. at p. 610. See also his opinion in 21 B. 8. * See also the identification of the sys- tems in M'Kenzie v. British Linen Co., 1881, 8 R. H.L. at p. 21, 6 Ap. Cas. at p. 109 ; Orr &, Barber v. Union Bank of Scotland, 1854, 1 Macq. 513 ; Caimcross v. Lorimer, 1860, 3 Macq. 827 ; Bain v. Assets Co., [1905] A.C. 317, 7 F. H.L. 104. ' 1837, 6 A. & E. 469, per Denman C.J. at p. 474 ; re- stated in Piggott v. Stratton, 1 De 6. F. & J. at p. 49 s and in Roe v. Mutual Loan Fund, 1887, 19 Q.B.D. 347. (Both Pickard and Freeman related to seizure of goods by the Sheriff.) * Including mistake as to legal liability — next case, and Newton v. Liddiard, 1848, 12 Q.B. 925. ' These two words are wrongly turned into ' or ' in Freeman, infra, 2 Ex. at p. 663. See 6 A. & E. 474. 1" For the worse — HorsfaU v. Halifax Banking Co., 1883, 52 L.J. Ch. 599 ; God- dard v. Smith, 1872, L.R. 3 P. & D. 7. ^^ Referring to Heane v. Rogers, 1829, 9 B. & C. 577; Graves v. Key, 1832, 3 B. & Ad. 313. See also Evans v. Bicknell, 1801, 6 Ves. Jr. 174 (narrated at [1891] 3 Ch. 107). " In Freeman v. Cooke, 1848, 2 Ex. 654 at p. 663 ; explained by L. Blackburn in Miles V. M'llwraith, 1883, 8 Ap. Cas. at p, 133. In Freeman the representation was so made as to induce, though not so intended. " In Gregg v. Wells, 1839, 10 A. & E. 90, 113 E.R. 35 (at a sale of goods: esp. by L. Denman). ■'* See a case where the original error was put right and estoppel ceased— Dunston v. Paterson, 1857, 2 C.B. N.S. 495 (imprisonment of one personating the true debtor). INTRODUCTION 3 ' conduct, by negligence or omission/^ where there is a duty cast upon ' a person, by usage of trade or otherwise, to disclose the truth, may often ' have the same effect.^* ... In most cases to which the doctrine in ' Pickard v. /Sears is to be appUed, the representation is such as to amount ' to the contract or licence of the party making it.' This ' carefully ' chosen language by Lord Wensleydale ' ^' was expressly adopted by Lord Watson in an important Scottish case.'-* In an earUer case i® Lord Eldon L. Ch. put the doctrine, or part Variants. of it, more briefly : ' It is a very old head of equity that, if a repre- sentation is made to another person goiug to deal in a matter of interest upon the faith of that representation, the former shall make that re- presentation good, if he knows it to be false.' 2" With equal brevity the doctrine is stated by Lord Blackburn : ' Where one states a thing to another, with a view to the other altering his position, or knowing that, as a reasonable man, he will alter his position, then the person to whom the statement is made is entitled to hold the other bound, and the matter is regulated by the state of facts imported by that statement.' ^^ ' The doctrine of equitable estoppel by representation is a wholly Do. different thing from contract or promise or equitable assignment or anything of that sort. The foundation of that doctrine, which is a very important one, and certainly not one likely to be departed from, is this, that if a man deahng with another for value makes statements to him as to existing facts, which being stated would affect the contract, and without reUance upon which, or without the statement of which, the party would not enter into the contract, and which, being otherwise than as they were stated, would leave the situation after the contract different from what it would have been if the representations had not been made, then the person making those representations shall, so far as the powers of a Court of Equity extend, be treated as if the repre- sentations were true and shall be compelled to make them good. But those must be representations regarding facts.' ^^ 1* For an explanation of this part of the ^^ In Knights v. Wiffen, 1870, L.R. 5 definition see Chap. VIII. Q-B. 660, 665. See also Polak v. Everett, " Explained by Pollock C.B. in Cornish 1876, 1 Q.B.D. 669 ; Seddon v. N.E. Salt V. Abington, 1859, 4 H. & N. 549, as possibly Co., [1905] 1 Ch. 326 ; per Cotton L.J. in opposed not merely to ' involuntarily ' but Simm v. Anglo-American Tel. Co., 1879, also to ' unintentionally.' The criterion is 5 Q.B.D. 213 ; per L. Selborne in Dixon v. ' language which, in the ordinary course of Muckleston, 1872, L.R. 8 Ch. 155. ' business and the general sense in which '' Per L. Selborne L. Ch. in Citizens* ' words are understood, conveys a certain Bank of Louisiana v. First National Bank ' meaning.' This is adopted by Mellor J. in of New Orleans, 1873, L.R. 6 H.L. at p. 360. Thomas v. Brown, 1876, 1 Q.B.D. 714, 722. Not of intention— Chadwick v. Manning, " I.e. Parke B. in Freeman. [1896] A.C. 23, following Jorden v. Money, " M'Kenzie v. British Linen Co., 1881, 1854, 5 H.L.C. 185, 214-15, per L. Ch. 8 R. H.L. at p. 21, 6 Ap. Cas. at p. 109. Cranworth ; see also Citizens' Bank v. 1' Evans v. BickneU, 1801, 6 Ves. Jr. 174 First National Bank, supra ; Gillman at p. 183, cited in Low v. Bouverie, [1891] v. Carbutt, 1889, 61 L.T. 281 (deUvery 3 Ch. at p. 107, per Kay L.J. order) ; Compania Niviera v. Churchill, '» What follows on law and equity is [1906] 1 K.B. 237, 248. Nor of a not now of importance. promise — Maddison v. Alderson, 1883, 8 INTRODUCTION Variants. Do. (Acqui- escence.) Estoppel is ' a principle equally of law and of equity. If a person ' makes any false representation to another and that other acts upon ' that false representation, the person who made it shall not afterwards ' be allowed to set up that what he said was false and to assert the real ' truth in place of the falsehood which had so misled the other.' ^ In a Scottish case of a dispute about congregational property there had been a seemingly uncontroverted amalgamation of congregations and much delay in impugning the transaction. 2* Lord Campbell L. Ch. said : ' If a man either by words or by conduct has intimated that he ' consents to an act which has been done ^nd that he will offer no opposi- ' tion to it, although it could not have been lawfully done without his ' consent, and he thereby induces others to do that from which they ' otherwise might have abstained, ... he cannot question the legality ^^ ' of the act he has so sanctioned ... to the prejudice of those who ' have so given faith to his words or to the fair inference to be drawn ' from his conduct. . . . Generally speaking, if a party having an interest ' to prevent an act being done, has fuU notice of its having been done, ' and acquiesces in it, so as to induce a reasonable behef that he consents ' to it, and the position of others is altered by their giving credit to his ' sincerity, he has no more right to challenge the act to their prejudice, ' than he would have had if it had been done by his previous Ucence.' Classification. An attempt ^* to classify the possible cases of estoppel — or at least of those parts of the doctrine which are the subject of this volume — was made in a case of common carrier : — '" ' One such proposition is, if a man by his words or conduct wilfully ' endeavours to cause another to beUeve in a certain state of things ' which the first knows to be false, and if the second beheves in such ' state of things, and acts upon his belief, he who knowingly made the ' false statement is estopped from averring afterwards that such a state ' of things did not in fact exist. . . . ' Another recognised proposition seems to be, that if a man, either in ' express terms or by conduct, makes a representation to another of the Ap. Cas. 467. These cases overrule LofEua V. Maw, 1863, 3 Giff. 592. It is an aggravation and not a, defence that the representations were fraudulent or tainted with illegality — M'Canoe v. L. & N.W. Ky. Co., 1864, 3 H. & C. 343 ; Doolan v. Midland By. Co., 1877, 2 Ap. Cas. 792 ; Doe d. Roberts v. Roberts, 1819, 2 B. & Aid. 367 (c/. Doe d. Williams v. Lloyd, 1839, 5 Bing. N.C. 741); Fairtitle v. Gilbert, 1787, 2 T.R. 169 ; Doe d. Levy v. Home, 1842, 3 Q.B. 760, 766. Nor a statement as to Ioao or non-disclosure thereof — Beattie v. L. Ebury, 1872, L.R. 7 Ch. at p. 800, per Mellish L. J., not noticed in the affirmance, L.R. 7 H.L. 102 ; Weeks V. Propert, 1873, L.R. 8 C.P. 427, 437. ^' Per L. Cranworth L. Ch. in Jordan V. Money, 1854, 5 H.L.C. at p. 210, approv- ing Kokard, ', and Freeman, ^^. See also per L. Birkenhead L. Ch. in Gatty v. Maclaine, 1921, 1 S.L.T. 51, 54. ^ Caimcross v. Lorimer, 1860, 3 Macq. 827, affg. 20 D. 995. "* But see, as to ultra »j>e«,Index Bvb voce. ^^ The expediency of such an attempt is questioned by Lord Macnaghten in Whitechurch (George) v. Cavanagh, [1902] Ap. Cas. 117, and by Kekewich J. in Comitti V. Maher, 1905, 22 T.L.R. 121. " Carr v. L. & N.W. Ry. Co., 1875, L.E. 10 C.P. 307 at p. 316, per Brett J. (L. Esher) and Denman J. See also as to carriers, Lebeau v. General Steam Naviga- tion Co., 1872, L.R. 8 C.P. 88 ; Scales v. L. & S.W. Ry. Co., 1872, 53 L.T. O.S. 44. INTRODUCTION 5 ' existence of a certain state of facts ^^ which he intends to be acted upon ' in a certain way and it be acted upon in that way, in the belief of the ' existence of such a state of facts, to the damage of him who so believes ' and acts, the first is estopped from denying the existence of such a ' state of facts. ' And another proposition is, that if a man, whatever his real meaning ' may be, so conducts himself that a reasonable man would take his ' conduct to mean a certain representation of facts, and that it was a true ' representation, and that the latter was intended to act upon it in a par- ' ticular way, and he with such belief does act in that way to his damage, ' the first is estopped from denying that the facts were as represented.^' ' There is yet another proposition as to estoppel. If in the transaction ' itself which is in dispute one has led another into the belief of a certain ' state of facts by conduct of culpable negligence calculated ^^ to have ' that result, and such culpable neghgence has been the proximate cause ' of leading and has led the other to act by mistake upon such behef, ' to his prejudice, the second cannot be heard afterwards, as against the ' first, to show that the state of fiacts referred to did not exist.' ^^ In a weU-known case ^^ — which absolved a trustee from responsibility for forgetfukiess in conveyiug information of prior incumbrances to a proposing mortgagee of a beneficiary's life-interest — Lord Justice Kay thus summed up the result of the Enghsh authorities : — ' 1. There has been from ancient time a jurisdiction in Courts of Equity in certain cases to enforce a personal demand against one who made an untrue representation upon which he knew that the person to whom it was made iutended to act, if such person did act upon the faith of it and suffered loss by so acting. 2. This was readily done where the repre- sentation was fraudiilently made, in which case an action of deceit would lie at law.^^ 3. Relief will also be given at Law and in Equity, even though the representation was innocently made without fraud, in all cases where the suit will be effective if the defendant is estopped from denying the truth o'f his representation. 4. Where there is no estoppel an innocent representation will not support an action at law for damages occasioned thereby. 5. Estoppel is effective, where an action must succeed or fail, if the defendant or plaintiff is prevented from disputing a particular fact alleged.^* ... 6. I am not satisfied that relief in the nature of a personal demand against the defendant 28 Present, not future — M'Evoy v. 82 at p. Ill; and see infra, Chap. Drogheda Commrs., 1867, 16 W.B. 34. VIII. ' *' See Comitti v. Maher, supra. " E.g. fraud or concealment of material "» I.e. fitted, not intended — such being facta, J6id., p. 113; Whitechuroh (George) «. the usual meaning in law. Cavanagh, [1902] A.C. at p. 145 ; Porter v. '1 See an imsucceasful application of Moore, [1904] 2 Ch. 367. this (payment of dividends as estopping " Examples are then given. And the company from impugning a transfer of case of Derry v. Peek, 1889, 14 Ap. Gas. shares), Foster v. Tyne Docks, 1893, 63 337, is distinguished in that the party L.J. Q.B. 50. misled there relied not on the truth but on '2 Low V. Bouverie, [1891] 3 Ch. the falsity of the innocent representation. INTRODUCTION Sstoppel aoperative. imitation of ipic. has been given in Equity in cases which did not involve fraud or to which this doctrine of estoppel would not apply.^' ... In the present case the doctrine of estoppel would enable the plaintifE to succeed, if the facts warrant the appUcation of it. But in order to create an estoppel the statement by which the defendant is held bound must be clear and imambiguous.' *« This may be so if it on the face of it gives a false impression,*' or if the statement were intended to be taken in a particular sense.^' It may be added, that a person cannot rely by way of estoppel on a statement induced by his own misrepresentation or by his concealment of a material fact, the disclosure of which would have been calculated to make the signer hesitate or seek for further information before maldng the statement, or where the circumstances would have deterred a reason- able man from acting on it.*' And there is no estoppel where the mis- representation does not mislead *" or does no harm.*^ ' The doctrine of ' estoppel caimot be applied to an Act of Parliament. Estoppel only ' applies to a contract inter partes, and it is not competent to parties to ' a contract to estop themselves or anybody else in the face of an Act ' of Parliament,' *^ as, for example, to evade it.** Similar general statements of the law might be multipUed ; but the above may suffice. This volume is occupied with a few statutes and many decisions illustrative of the topic. Except incidentally, nothing is to be said of what is called in England and elsewhere Estoppel by Record, which is res judicata, apd Estoppel by Deed.** The illustrations wiU be confined as much as possible to Estoppel in pais, which is equivalent to Personal Bar in Scotland — bar by conduct. The ancient history of the institute in England is now of little moment on either side of the Tweed. " Therefore Slim v. Croucher, 1860, 1 De G. F. cfc J. 518, can only be supported on estoppel, being otherwise inconsistent with Deny v. Peek. '° Modern illustrations of this are cited : Heath v. Crealock, 1875, L.R. 3 Ch. 22; General Finance etc. Co. v. Liberator etc. Soc, 1878, 10 Ch. X>. 15 ; and Freeman v. Cooke, supra, ^^. See, as to this, an English case of estoppel by deed — Onward Building Soc. V. Smithson, [1893] 1 Ch. 1. " Per L. Dunedin in Nocton v. L. Ashburton, [1914] A.C. 932, 962 (the case was not put on estoppel). '8 Piggott V. Stratton, 1859, 1 De G. F. & J. 33. '» Porter v. Moore, [1904] 2 Ch. 367 (one desiring to consult his solicitors is told falsely that they approve), following Whitechurch (George) v. Cavauagh, [1902] A.C. at p. 145, per L. Brampton, and noted by Kay L.J. in Low v. Bouverie, supra, '^. *» Nelson v. Stooker, 1859, 4 De G. & J. 458. " Simm V. Anglo-American Telegraph Co., 1879, 5 Q.B.D. 188. " Per Bacon V.C. in Barrow's case, 1880. 14 Ch. D. at p. 441 ; and see per Jeasel M."R. at p. 445. « Chandler v. Ford, 1835, 3 A. & E. 749 ; Preece v. HoweUs, 1831, 2 B. & Ad. 644 ; and notes to Collins v. Blantem in 1 Sm. L.C. ** In Scotland it is not customary to' speak of res judicata as personal bar ; and that which is known in England as estoppel by deed is treated as interpretation of contract, and one English judge at least has thought this the better view : ' I ' speak not of that estoppel, which is said ' to arise upon a deed of conveyance or ' other deed of a similar nature. I incline ' to think that when the word " estoppel " ' is used with reference to deeds of that kind ' it is merely a phrase indicating that they must be truly interpreted '—^er Brett L.J. in Simm v Anglo-American Tele- graph Co., 1879, 5 Q.B.D. at p. 206. INTRODUCTION 7 In Scotland there is little trace of derivation from the Eoman Law. In both countries the expansion and elucidation of the doctrine have been comparatively modern, more especially in regard to mercantile trans- actions.*^ In Scotland no doubt has ever been expressed as to the equity or ] expediency of the operation of personal bar in cases where the plea is relevant and sustained. In England its effect in shutting out the actual truth from the view of a jury or of a judge dealing with evidence of fact has occasionally and from early times led the Courts to speak of estoppel as ' odious.' *^ ' 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 even ' thought to deserve some of the odium of the more technical classes of ' homologation. But, the moment the doctrine is looked at in its true ' Ught, 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 the representation : "I take it upon " myseK to say such and such things do exist and you may act upon the basis that they do exist," and the other man does really act upon ' that basis, it seems to me it is of the very essence of justice that, ' between those 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 estoppel in pais or ' homologation.' *' It foUows from the foregoing remarks that if a person, in bond fide : and with the result of changing his position, reUes and is meant to rely on what another person has said or done or left unsaid or undone — in *^ See 2 Sm. L.C. (10th ed.) 823. defence of the doctrine by L. Halsbury in *« Co. Litt. 3656 (but see 352ffl) ; Skip- Bloomenthal v. Ford, [1897] A.C. at pp. with V. Green, 1725, 1 Stra. 610 ; Syllivan 165, 162. V. Stradling, 1764, 2 Wils. K.B. 208 ; R. v. Explanations of personal bar in Soots Lubbenham, 1791, 4 T.R. 251 ; Baxendale decisions may be noted, though they add V. Bennett, 1878, 3 Q.B.D. at p. 529, per nothing to the foregoing dicta — M'Gregor's Bramwell L.J. (with which cf. obs. by the Exrs. v. Anderson's Trs., 1893, 21 R. 8, same judge in Simm v. Anglo-American per L. Kinnear ; Robertson v. Ogilvie's Trs., Telegraph Co., 1879, 5 Q.B.D. at p. 202) ; 1844, 7 D. 236, per L. Fullerton ; M'Calman Howard v. Hudson, 1853, 2 E. & B. at v. M'Arthur, 1864, 2 M. 678, per L. Deas ; p. 10, per L. Campbell, C.J. ; London & Callander v. Callander's Trs , 1863, 2 M. 291, S.W. Bank v. Wentworth, 1880, L.R. 5 per L.P. M'NeiU and L. Kinlooh ; Ander- Ex. D. at p. 104 : General Finance Co. v. son v. Bank of Scotland, 1836, 9 Sc. Jur. Liberator Soc, 1878, 10 Ch. D. at p. 20, 66, per L. Cookbum ; Thomson x;. Camp- per Jessel M.R. (alleged estoppel by deed). bell's Exrs., 1849, 12 D. 276, per L.J.C. *' Per L. Blackburn in Burkinshaw v. Hope ; Gardner v. Gardner, 1830, 9 S. 138, Nicolls, 1878, L.R. 3 Ap. Cas. at p. 1026 ; per L. Moncreiff ; Paul v. Henderson, 1867, quoted in Low v. Bouverie, [1891] 3 Ch. at 5 M. 613, per L. Neaves. On estoppel, p. 111. See also per L. Selbome, supra, under the Indian Evidence Act — Sarat p. 3 ; Kenyon C.J. and Grose J. in Cooke Chunder Dey v. Lala, 1892, 56 J.P. 741, V. Loxley, 1792, 5 T.R. 4 ; per Kay L.J. per L. Shand. See also Bank of Hindu- in Tomldnson v. Balkis Consolidated Co., stan v. Alison, 1871, L.R. 6 C.P. at [1891] 2 Q.B. at p. 623 ; and the striking p. 227. INTRODUCTION 3cope of exposition. Treatises on Estoppel. short, on his conducl^the latter and his representatives or privies" are precluded conclusively from proving anything inconsistent with that conduct in a question with the former or his representatives or privies." But the plea must be explicitly taken in the pleadings-^" It is a defensible position that the bulk of the law of Obhgation or Contract might be viewed from the angle of Personal Bar or Estoppel, It is the aim of this treatise to deal only with such matters as a lawyer would seek, and expect to find, within a volume headed as on the title-page. It therefore ignores presumptions, implied terms or conditions, and also such misleading statements as may appear in the inductive clause, preamble, or recital of a solemn deed. As far as possible it also puts aside explicit misrepresentations, in regard to which the main question is as to the interpretation of the written or spoken word, and it attempts to confine the exposition to an illustration of the many forms of misleading conduct. Fraud, written or oral, cannot be excluded, but is not of the essence of the plea. In regard to estoppel in general, and to estoppel in pais in particular, there have been issued many more or less systematic expositions. A note of the chief of these is given below. ^^ " As to the meaning of privies in this connection, see Co. Litt. 271a ; 8 Rep. 425, 43a ; 3 Kep. 23 ; Richards v. Johnston, 1859, 4 H. & N. 660 ; Richards v. Jenkins, 1887, 18 Q.B.D. 451 ; Doe d. Bullen v. Mills, 1834, 2 Ad. & E. 17 ; Barwick v. Thompson, 1798, 7 T.R. 488 ; L. & N.W. Ry. Co. V. West, 1867, L.R. 2 C.P. 553 ; Heane v. Rogers, 1829, 9 B. & C. 577 ; Taylor 'v. Needham, 1810, 2 Taunt. 278 ; Lovett V. Lovett, [1898] 1 Ch. 82 ; Williams v. Pinckney, 1897, 67 L.J. Ch. 34, per Vaughan Williams L.J. ; Campbell V. Camphell, 1664, M. 5684 (cautioner not bound by homologation of an ill-executed deed) ; AUan v. Pattison, 1893, 21 R. 195 (do.) ; cf. Grieve v. Cant, 1626, M. 5681 ; Aytoun v. Dundee Banking Co., 1844, 6 D. 1409; Wilhamson v. Daw, 1761, M. 10459 (mora affecting heir). But in Scotland, and as to jus qucesitum tertio, see the authorities collected in C.S. & H.L. in English and Scottish Law Life Ass. Assn. V. Carmiohael (Carmichael v. Car- michael's Exr.), 1919 S.C. 636, rev. 1920, 2 S.L.T. 285, and esp. L. Dunedin's elaborate opinion. *' As to estoppel or personal bar shutting out other evidence, see Macfie v. Callander & Oban Ry. Co., 1897, per L.P. Robertson, 24 R. 1168, and per L. Ch. Halsbury, 25 R. H.L. 20. Thus it is stronger than a mere admission, which may be retracted or explained by further evidence — as in the case of receipts — Graves, supra, '^, per L. Tenterden ; Heane, supra, ^' ; Bowea v. Foster, 1853, 2 H. & N. 788. 5" Scott V. Potlieringham, 1859, 21 D. 737, 743. *^ The present writer has studied the foreign systems with much diffidence, though encouraged by the conviction that the law is the same in all the English- speaking parts of the world. The eailiest attempt at systematising it in England was (and is) in 2 Smith, Leading Cases, note to the Duchess of Kingston's case. There followed 1 White and Tudor, Leading Cases, note to Savage v. Foster ; 11 Camp- bell's Ruling Cases, pp. 73-123 (American cases cited) ; Halsbury's Laws of England, voce Estoppel ; Cababe, Principles of Estoppel ; and (in especial) Everest and Strode, Estoppel, 2nd ed. No cases have been cited except Scots, English, and Irish ; but much instruction has been obtained from Bigelow on Estoppel, 6th ed. (Ameri- can in the narrower sense of the term), and much instruction and entertainment from two books by John S. Ewart (Canadian), Estoppel by Misrepresentation, 1890, and Waiver Distributed among the Departments, Election, Estoppel, Contract, Release, 1917. Where Scots authority is ample, other systems have been sparingly resorted to ; where, as is usual, it is meagre, free use has been made of them. ' Feeding the estoppel ' is accretion. Menzies, Lectures on Conveyancing, 636-7 ; Everest, supra, pp. 263, 265 ; Rajapakse v. INTRODUCTION 9 Conduct being protean in shape, and fact indefinitely variable, it utility of the might have been thought to be wasted labour to attempt to extract positTonf ^ rules of law for the guidance of lawyers or of laymen in regard to the subject of this book. The mass of cases which have been thought worth reporting is strong evidence to the contrary. And in proceeding to illustrate from actual cases the subtle distinctions which may have to be looked for, it is some satisfaction to reflect that in no part of the law has there been less intrusion by statute or by the rules governing verbal interpretation. Fernando, [1920] A.C. 892 : ' Where a 2 Ch. 342 ; Heath v. Crealock, 1874, L.R. grantor has purported to grant an interest 10 Ch. 22. See also, as to ' estate by in land which he did not at the time estoppel,' Everest, pp. 256-260. possess, but subsequently .acquires, the ' In pain ' means, in the country, for a benefit of his subsequent acquisition goes jury, as distinguished from proof by judg- automaticaUy to the earlier grantee.' ment {res judicata) and proof by solemn In ,re Bridgwater's Settlement, [1910] deed, both of which are for the judge. CHAPTEE II BAR TO DISCLAIMER OF TITLE Roman Law. The maxim of the Eoman Law— never of great and later of little im- portance — Nemo sibi causam possessionis mutare potest,^ appears in the law of Scotland as an exception to the rule that ' one may ascribe ' his possession to any right whatever in his person, though acquired by ' him after his beginning to possess, as he shall judge most for his advan- AppUoation in ' tage.' ^ The exception is thus stated by the same author : ' Possession Scots Law. < ^^ distinct from right cannot be ascribed to a title other than that upon ' which it commenced, to the prejudice of him from whom the possessor's ' right flowed, to whom it must be restored, notwithstanding any super- ' vening title in the possessor, though that supervening title should be ' sufficient to recover the possession to him the moment after he has ' given it up.' * Put briefly, one who possesses derivative shall not dis- claim his author. The best illustrations are to be found in the law of landlord and tenant, but the principle is of wider appHcation.* The possessor by his own act or conduct in acknowledging the derivation has changed the position of his author adopted on the faith of it, and is debarred from acting inconsistently with that position. The cardinal requisites are possession and permission — possession by the lessee and permission by the lessor.^ The remedies hinc inde are possessory remedies, in which the title of the lessor cannot as a rule be impugned. Relation to In Rome the original object of the maxim was to prevent an unjust sorTpton!"^^ apphcation of the short prescription, the usucapio. In Scotland the prohibition against alteration of the cause of possession at the possessor's own hand yields to the dominant sway of the positive prescription, pro- vided that the possession is distinctly referable to the supervening title. ' Our prescription of forty years is like the prescriptio longissimi temporis ' of the Roman law. It requires no bona fides. Thus, if a tenant ' Its origin may be traced in Gaius, II. " Ersk. 2.1.30, citing St. 2.1.27, and 52-61 ; 2 §1 D. (41.5) ; Savigny, Besitz., giving as example a supposed case of lessee I. vii., and its remains in 19 §1 D. (41.2) ; and lessor ; 25 C. (4.65) ; Cunningham v. 2 ult D. (41.4) ; 1 D. (41.6) ; 2 §§19-20 Cook, 1583, M. 6424. D. (41.2) ; 6 §3 D. (43.26) ; 23 C. (4.65) ; « Infra, p. 12 ; and see Rollook v. 5 C. (7.32). Corsbies, 1627, M. 2074, 10431. " Ersk. 2.1.30. See also Bal£. Praotioks, * This has been profusely insisted on in 459 ; Craig, 2.9, 20.28 ; St. 2.9.41, 4.26.8 ; America (Bigelow, p. 550), and is indicated Bankt., 2.9.54 ; Robertson v. X>. AthoL in England by Hokoyd J. in Doe d. Jackson 1808, Hume's Dec. 464 (per L. Hermand). v. Wilkinson, 1824, 3 B. & C. 413. 10 BAR TO DISOLAIMEE OF TITLE 11 ' possessing under a tack should obtain a charter of property from the ' Crown, and by the carelessness of the master should pay no rent for ' forty years, his right under the charter wiU be effectual notwithstanding 'the iniiium possessionis was a temporary right and that he could have ' no pretence of bona fides. By our law all that is required is charter ' and possession.' ® In a teind case, where it was pleaded that a proprietor of land had by prescription on a colourable title acquired a heritable right to the teinds thereof in a question with the titular, it was shown that the possession could and should be ascribed to a prior long lease ; and the prevailing argument was that, ' though a party who had more than one proper title of possession might, in a question with third parties, ascribe his possession to whichever should prove beneficial, yet ... in competition with that person from whom the possession was originally derived, his heirs or others standing in his place, the title of possession could not be inverted to his prejudice.' ' Soon after a long lease of land had been granted the lessee obtained a feu of the land for a feu-duty greater than the rent. The feu being in contravention of an entail, the question came to be whether it had been set up by the positive prescription, and this resolved itself into the problem whether possession on the feu right began at its date or only as at the ish of the lease. The payments by the possessor were aU along called feu-duties, but they were not precisely of the yearly amount stated in the charter. Probably it was on that account that the latter view was adopted.* On the other hand, where no rent for the pasturage of a sheilling had been paid for more than forty years under a tack, and the possessor had infeftment in the land and possession for forty years on it, there was held to be no inversion.* In one case the alleged heritable title was dated prior to the lease. It was a title to ' fishings ' granted by the Crown to a burgh, which long after took a lease of sahnon-fishings from a neighbour- ing proprietor who had an express title of salmon-fishings. The burgh had paid him no rent for more than forty years : yet the lease was pre- ferred to the Crown title alleged to be construed by prescription as ex- tending to salmon-fishings.^" Similarly, where possession of teinds had been ascribed all along and down to the date of the last locality to an ancient tack prorogated from time to time, the possessor was barred from setting up a heritable title to the teinds on a base title unconfirmed by the Crown, which might in other circumstances have been set up by prescription.^^ ' Per L. Pitfour in Bruce v. Carstairs, « Grant v. Grant, 1677, M. 10876. 1770, 1 Hailes 378. See also Menzies v. „ Camegie v. Montrose Mags., 1777, Campbell, 1679, M. 10629. jj j^gjj ^^^ jj ^^p^ c poggession,' No. 1, ' Sinclair v. Sinclair, 1771, M. at p. ^^^ ^^^^ ^^ Douglas there. It would have l*'^^''- been different if the burgh had had a title « D. Roxburgh .. Wauchope 1734, ^^ galmon-fishings expressly. 1 Pat. 126. Both rent and feu-duty were beneath avail. And see oases of novation, " Peterkin v. Forres Common Agent, t«/m,p. 20. 1840, 2D. 723. 12 BAE TO DISCLAIMER OF TITLE Apart from Apart from prescription, the bar to disclaimer of author or of his irscotiand: title to convey is, as mentioned already, most frequently illustrated in the law of landlord and tenant.^'' Thus the lessee and his successors in a lease cannot, as a rule, impugn the title of the lessor himself to recover rent," enforce other prestations," proceed to landlord's sequestration, or obtain a removing.i^ In Scotland the point has arisen mainly in regard to the last ; in England the illustrations are multiplied and various. Not only may not a third party — creditor of a lessee — call on the lessor —another creditor letting as wadsetter — to produce his sasine in an action of removing ; ^^ but the lessee himself cannot allege that the premises let to him really belonged to others who had purported to transfer them to the lessor and had put him into possession.^^' It was irrelevant for a lessee to allege that the lands let to him belonged to parUamentary trustees so as to meet a removing brought by his lessors, the Barons of Exchequer, who held powers to let and remove.^^ The pursuers of a removiiig had let land to the defender. His defence was irrelevant that creditors of the pursuers were infeft on adjudications, the legal of which had expired, there being no averment that these creditors had entered into possession.^* Objections to a lessor's title ' truly amount ' to a reduction of the landlord's infeftment and are competent to him ' only who is competing with the landlord for the property of the lands.' "" A tenant called in a removing by A had pleaded that he was tenant of B in the subjects. He was held to be barred by his judicial admission from disclaiming the title of B to oust him.^'^ A tenant could not effectu- ally resist a removing brought by his lessor though the latter was an undischarged bankrupt allowed by his trustee to deal with the property, which the trustee declined to take up, and though the tenant attempted to set up another title acquired after the ish.^^ An offer of an assignation of a lease having been accepted on condition of a proper title being furnished, and the lessor having declined to prove or even produce his title to the subjects, it was held that the offerer need not do so.^* One 12 It does not apply in securities for further leases without consent of the debt, so as, e.g., to prevent a creditor Court, and therefore could not remove possessing on a lame adjudication from their old tenants — was plainly untenable, bringing another and better — Cleuohton, ^o Per Baron Hume in reporting Stewart 1749, M. 10610. V. Bums, 1802, Hume 568. Before the " Cs. Dunfermline v. L. Pitmedden, case was decided the singular successor 1698, M. 10630 ; c/. Paton v. TurnbuU, had got his vendor to make up titles which 1875, 12 S.L.R. 383. prima facie enured to the prior infeftment " EUott's Trs. V. EUott, 1894, 21 R. 858. of the former, though perhaps open to " Menzies v. Campbell, 1679, M. 10629 ; objection. Harries v. Anderson, 1591, M. 9217. 21 Hamilton v. Crawford, 1583, M. 13784, " Agnew V. Coroaphie, 1631, M. 13796. 14023. " Penman v. Martin, 1822, 1 S. 485 '^ -^^^ j, wieland, 1858, 20 D. 960. (N.E. 452). The same in England in an action for rent- is Butter V. M'Doualds, 1769, M. 11999, though the money might have to go to the a£E. in H.L. but not reported. bankruptcy trustee — Cook v. Whellock, " York Buildings Co. v. Carnegie, 1764, 1890, 24 Q.B.D. 658. M. 4054. The other point— that the ^^ Denniston Macnayr & Co. u. Mao- pursuers had been interpelled from granting farlane, 1808, M. Appx. ' Tack ' No.' 15. BAB TO DISCLAIMER OF TITLE 13 who possessed teinds on a lease was not entitled to invert the possession by getting a tack from the parson, which would have been preferable.^* Looking to the ratio of the rule and the course of Enghsh authority, Cases of no certain obiter cldcta to be found in the report of the later of two Scots ^""^^^^ cases may be open to doubt or qualification. In the first,^^ A purported to lease out to B minerals to which he had right only under missives of sale, which he afterwards renounced. The minerals were thereafter sold by the owner to C. It was held that B was not barred from repudiating his alleged lease by the inf eftment of C or by an express assignation therein of the landlord's part of the missive of lease. For A was never inf eft in the minerals ; C had never let them ; and there was no place for accretion. This case was followed, where A, not infeft, purported to lease out minerals to B, who possessed tiU only three of the twelve years of the lease had still to run. A's title to the minerals was then reduced by C, who got infeftment and therewithal-an assignation from A of A's right and interest, in the lease, B was held not precluded from repudiating the lease for the future — on the same grounds as were given effect to in the earlier case.^® But Lord Trayner ^' observed : The tenant ' could at any time ' during the currency of the pretended lease have thrown it up on the ' ground that the lessor had no title to the minerals let and could not ' consequently protect him, the tenant, in his possession under it. He ' was not bound to wait until the real owner came forward to eject him. ' If it is said that I am here disregarding the principle that a lessee cannot ' challenge his lessor's title, my answer is that that principle has no ' appUcation to the case I am considering. That principle only applies ' where the lessee in a question with the lessor, or one in right of the ' lessor, is maintaining some right or claiming some benefit under or ' in respect of the lease, not where he is renouncing or repudiating ' the lease.' The rule applies as between principal tenant and sub-tenant. In an Tenant and action of removing the petitioners set forth that they were principal tenants of the subjects and had let them to the respondent for a year, which had expired. The respondent averred that he held from the proprietor. He had done so formerly, but had been removed by the latter. The petitioners proved a verbal lease by them to the respondent, entered into thereafter. They were held to be under no necessity to prove their title from the proprietor, which the respondent was barred from impugning.^* But it is quite competent for a tenant to show that his lessor has Expiry of been deprived of his title, as by forfeiture to the Crown,^' or been other- ^'^""^ ^■*'' ®' ^* Home V. Home, 1684, M. 8421. strengthened his judgment by referring to 25 Weir V. Dunlop & Co., 1861, 23 D. Tod v. Wells, 1782, M. 10465; and to 1293 (' lessors ' in the rubric should be Hall v. Butler, 1839, 10 A. & E. 204. 'leasees'). "' At p. 648. 26 Reid's Tr. v. Watson's Trs., 1896, ^s Duni(jp&;Co. w. Meiklem,1876,4R. 11. 23 R. 636. L.O. KyUachy was doubtful, ^s Maxwell v. Glassoek Tenants ; Niths- L. Young contra. His lordship might have dale v. Tenants, 1627, M. 13788. 14 BAR TO DISCLAIMEE OF TITLE English illus- trations of the rule. wise divested. Thus tenants were allowed a proof that their lessor had bargained with her husband that if after his death she intromitted with his moveables she would renounce all right to the lands let, and that she had so intromitted.a" But, in order to exclude the rule, there must be a clear allegation of divestiture and not merely such a statement as, if sent to proof, would involve a question of disputed heritable right." Even a precarious possessor has been held entitled to impugn the title to sue of one who proceeded, not as heir to the former proprietor, but as holding a sasine which had been ousted by his ex fade absolute disposition unquahfied by registered back-letter.^'^ Where the lessor sought to remove certain tenants, it was no answer that he could not sue alone, he having granted to his niece what was held to be a liferent tenancy of the lands, reserving the leases, but entitling her to the rents and bindiug her to make certain improvements. For he could not turn the tenants into sub-tenants, and they could not impugn his title. ^^ The Bnghsh cases illustrating the rule and this exception are numerous.^* The rule was thus stated by Plumer M.E. : ' If there is ' one principle more estabhshed than another with respect to the relation ' between landlord and tenant, it is this, that if a tenant receives the ' possession of an estate from a landlord he never can dispute the title of ' that landlord. ... So long as he retains possession he cannot dispute ' the title of the person who gave him that possession. . . . There is an ' impUed covenant that the landlord shall protect the tenant's enjoyment, ' and the tenant shall guard the landlord's title." ^^ Again, ' the principle ' is that a tenant shall not contest his landlord's title ; on the contrary, ' it is his duty to defend it. If he objects to such title, let him go out ' of possession.' ^^ In a patent case Lord Blackburn put the case of a tenant of heritage thus : ^' 'So long as the lease remains in force and ' the tenant has not been evicted from the land, he is estopped from * denying that his lessor had a title to that land. When the lease is at ' an end, the man who was formerly the tenant but has now ceased to ' be so may show that it was altogether a mistake to have taken that ' lease, and that the land really belonged to him ; but during the con- ' tinuance of the lease he cannot show anjrthing of the sort : it must ' be taken against him that the lessor had a title to the land. . . . ' The tenant under a lease is at liberty to show that the parcel of '» EssUmont v. Tenants, 1582, M. 13783. *i King V. Wieland, supra. '2 Traill u. Traill, 1873, 1 R. 61. Of. another very technical decision as to a precarious possessor — Sinclair v. Leslie, 1887, 14 R. 792. 22 Wilson V. Wilson, 1859, 21 D. 309. She also might have had a title to remove them. " The history of this class of estoppel is traced in Bigelow, chap. xvii. § 1 ; Doe d. Knight v. Smythe, 1815, 4 M. & S. 347, per Dampier J. 25 Att.-Gen. v. L. Hotham, 1823, Turn. & Russ. 209, 219-20 (charity lands ; too long a husbandry lease). The rule was settled by SyUivan v. Stradling, 1764, 2 Wils. K.B. 208. »8 Per Tindal C.J. in Doe d. Manton ■•>. Austin, 1832, 9 Bing. 41. 2' Clark V. Adie, 1877, 2 Ap. Gas. 423. BAR TO DISCLAIMER OF TITLE 15 ' land whicli he and the lessor are disputing about was never com- ' prised in the lease at all . . . and belongs to him under some ' other right.' ** The doctrine of estoppel appUes whether the tenancy be for years, classes of or from year to year, or for a shorter period, or at will or on sufEerance ; ^s ^n^iessee"' and no matter who the lessor may be, whether he has let as an individual owner, or as a receiver ; *" a corporation sole ; *^ a headmaster of a founda- tion school ; *^ a principal tenant subletting ; *^ a fiar or Hf erenter ; ** a bankrupt allowed by his trustee to deal with his estate ; *^ or a plurality of lessors.** The person barred from disclaiming is one indicated by the foregoing examples ; or a copyholder ; *' a firm or company ; *8 a lessee's widow continuing to possess precariously after her husband's death ; *' a beneficiary holding under trustee owners ; ^^ one paying rent to persons who had only the equitable estate ; ^^ and one who continues in possession by what is called in Scotland ' tacit relocation.' ^^ In all cases the rule appHes to parties to a lease, and also to privies Representa- or representatives of the lessor,^* or of the lessee, including his assignee,®* ''^^^ or his sub-lessee whose right is construed as equivalent to an assignation ; ®® at least in these cases provided the assignee knows who is the lessor.®* And the bar against disclaimer is reciprocal or mutual. ' If a tenant is Mutuality. ' estopped from denying the title of the landlord who gave him possession, ' the landlord must also be estopped from treatiag as his tenant him " See also for general statements Serjeant v. Naah, Meld & Co., [1903] 2 K.B. 304, 314, per Stirling J. ; Emery v. Bamett, 1858, 4 C.B. N.S. 423, 431, per Crowther J. ; Cooper v. Blandy, 1834, 1 Bing. N.C. 45, per Tindal O.J. ; Weeks V. Birch, 1893, 69 L.T. 759; Doe d. Higginbotham v. Barton, 1840, 11 A. & E. 307, per Denman C.J. ; Monroe v. L. Kerry, 1710, 1 Bro. P.O. 67 ; Alohome v. Gomme, 1824, 2 Bing. 54, per Best, C.J. »» Doe d. Bailey v. Foster, 1846, 3 C.B. 215, 219 ; Doe d. Johnson v. Baytup, 1835, 3 A. & E. 188 (wtere fraud entered), with which contrast Tadman v. Henman, [1893] 2 Q.B. 168. *» Dancer v. Hastings, 1826, 4 Bing. 2 ; 12 Moo. 34; Jolly v. Arbuthuot, 1859, 4 De G. & J. 224. *^ An incumbent alleged to be possessed through simony — Cooke o. Oxley, 1792, 5 T.R. 4. *" Barwick d. Richmond Mayor v. Thomson. 1798, 7 T.R. 488. « Gibbins v. Buckland, 1863, 1 H. & C. 736 ; L. & N.W. Ry. Co. v. West, 1867, L.R. 2 C.P. 553 ; Reeve v. Bird, 1834, 1 Or. M. & R. 31. ** Doe d. Colemere v. Whitroe, 1832, 1 Dowl. & R. N.P. 1 ; Brudnell v. Roberts, 1762, 2 Wils. K.B. 143. Of. per L. Cran- worth in Morgan v. MUman, 1853, 3 De 6. M, & G. 24 ; Trotman v. Flesher, 1861, 3 GifE. 1. ♦5 Partington v. Woodcock, 1827, 6 A. & E. 690. « Knight V. Cox, 1856, 18 C.B. 645; Arden v. SuUivan, 1850, 14 Q.B. 832; Francis, infra ; Fleming v. Gooding, 1834, 10 Bing. 549, 131 E.R. 1008 ; Weeks v. Birch, 1893, 69 L.T. 759. *' Doe d. Nepean v. Budden, 1822, 5 B. & Aid. 626. *8 Francis v. Doe d. Harvey, 1838, 4 M. & W. 331. *» Doe d. Leeming v. Skirrow, 1837, 7 A. & E. 157 ; Doe d. Hull v. Wood, 1845, 14 M. & W. 682. 5» Cowper V. Fletcher, 1865, 6 B. & S. 464. " Dolby V. lies, 1840, 11 A. & E. 335. 62 England v. Slade, 1792, 4 T.R. 682. " S.g. Dancer v. Hastings, 1826, 4 Bing. 2. 51 Williams v. Heales, 1874, L.R. 9 C.P. 177. " Langford v. Sslmes, 1857, 3 K. & J. 220. '^ Johnson v. Mason, 17C1, 1 Eap. 88. 16 BAR TO DISCLAIMBK OF TITLE Attornment. Payment of rent. ' whom he has required to enter into that relation with another instead ' of himself.' " Attornment in this relation has been defined ^^ as ' the act of the ' tenant's putting one person in the place of another as his landlord,' and ' the tenant who has attorned continues to hold upon the same terms as he ' held of his former landlord.' One of the terms, and the most important, though not decisive, is the payment of rent. Thus payment of rent by lessee to lessor after the lessor's title has expired and after the lessee has notice of an adverse claim to the land, but not of its precise nature or of the manner of the expiry, is not equivalent to attornment or to a new lease.^' For payment of rent by a lessee to a lessor after the lessor's title has expired and after the lessee has notice of an adverse claim does not amount to an acknowledgment of title in the lessor, unless at the time of payment the lessee knows the precise nature of the adverse claim or the manner in which the lessor's title has expired. *" Where the only evidence of a tenancy is payment of rent, the person paying it is in aU cases at Uberty to explain the payment and to show on whose behalf it was received ; ^^ as, for example, on behaK of a third party for whom the lessor was only a collector of rent.*^ Proof of payment of rent is primd facie evidence that the receiver is owner ; ^^ but the possessor may prove that he came in imder another owner and was persuaded to attorn to the claimant and to pay him rent under circumstances which did not warrant the change.^* One holding under P and paying rent to B, who had acquired an equitable right to a lease from P, was not by this payment estopped from proving that the equitable right had come to an end.^^ A demised to B who possessed ; A then assigned all his estates to C ; B acknowledged C as his landlord by paying a nominal sum towards rent ; he was not thereby estopped from pleading that the assignment was contrary to the Bankruptcy Acts and that he had been misled by his lessor's re- presentations as to its validity. «^ Submitting to distress is an emphatic acknowledgment of the distrainer's right, though no rent had ever been paid to him ; «' but even payment under a distress is not conclusive. «* " Per Denman C.J. in Downs v. Cooper, 1841, 2 Q.B. 256, 262; Green v. James, 1840, 6 M. & W. 656 ; Gaunt v. Waiuman, 1836, 3 Bing. N.C. 69, per Tindal C.J., citing Co. Litt. 352a; Breretou v. Evana, 1600, Cro. Eliz. 700, 78 E.R. 936. '' By Holroyd J. in Cornish v. Soarell. 1828, 8 B. & C. 471, adopted in Doe d'. Linsey v. Edwards, 1836, 5 A. & E. 95, 103. " Fenner v. Duplook, 1824, 2 Bing. 10 ; Gregory v. Doidge, 1826, 3 Bing. 474; Claridgo V. M'Kenzie, infra, "^ ; Jew v. Wood, 1841, Cr. & Phil. 185, per L. Ch. Cottenham. «» Serjeant v. Nash, Field & Co., [1903] 2 K.B. 304. " Doe d. Harvey o. Francis, 1837, 2 M. & Rob. 57. " Jones V. Stone, [1894] A.C. 122. ^^ Laurence v. Faux, 2 F. & F. 435. " Rogers v. Pitcher, 1815, 8 Taunt. 202. «' Brook V. Biggs, 1836, 2 Bing. N.C. 572. "' Doe d. Ple-rin v. Brown, 1837, 7 A. & E. 447, following Gregory v. Doidge, supra, ". «' Panton v. Jones, 1813, 3 Camp. 372 ; and see the early case of SyUivan v. Strad- ling, 1764, 2 Wils. K.B. 208; Parry v. House, 1816, Holt, N.P. 489 ; Johnson t). Mason, 1794, 1 Esp. 88 ; HaU v. Butler, 1839, 10 A. & E. 204. «8 Knight V. Cox, 1856, 18 C.B. 645; Claridge v. M'Kenzie, 1842, 4 M. & Gr. 143. BAB, TO DISCLAIMER OF TITLE 17 An occupier under one who had paid rent upon distress was estopped from disputing the distrainer's title, though the latter inadvertently produced a document which showed that the occupier's predecessor had held under a lease to which the distrainer was in law a stranger.®* But, Fraud, as in all cases of estoppel, the bar is here also taken oif by relevant aver- ment and proof of fraud.'" As in Scotland, '1 so in England, the lessee may effectually and con- Expiry of lessor s uiui^t clusively plead against his lessor, that the title of the latter has expired. '^ For example, he may say that, the lessor having had only a temporary or defeasible interest, it had come to an end. Thus a liferenter with power to let for twenty-one years granted a lease for fifty-three years. The lessee and his successors possessed (by sub-letting) beyond the per- missible period. A successor and his sub-lessee were then by the owner of the house given notice to quit. The sub-lessee had paid rent to the owner for six years, and the successor had acquiesced. In replevin to distress by the successor against the sub -tenant, the latter was held not to be estopped from impugning his lessor's title. ' It is true that a ' tenant cannot be permitted to impeaph the validity of his landlord's ' title ; but he may show that it has expired, especially under circum- ' stances such as those we are now called on to consider.' "* Similarly, the lessee may prove that his lessor has sold the subjects,'* or is an undischarged bankrupt whose trustee has not allowed him to retain possession. '^ On the other hand, the tenant of a devisee of land cannot allege that the testator had only a life interest.'* And it is not enough to show that a third party has claimed ownership of a house by evicting a tenant of another part of it ; what is called constructive eviction." An arbitration as to the title to land resulted in an award against one of the parties ; he had let to a tenant and told him thereafter to pay the rent to the successful litigant ; he thereby disabled himself from pleading estoppel as his title to distrain.'^ Where the action is for rent the plea of lapsed title may not be available unless the occupier renounced his tenure immediately on learning of the expiry of his lessor's title and unless he purported to possess thereafter under some third party." A similar exception to the rule against disclaimer of title occurs Title . T . , IT paramount. where there has been eviction by title paramount, at least where the " Cooper u. Blandy, 1834, 1 Bing. " Doe d. Lowden v. Watson, 1819, 2 NO. 45. Stark. 230 ; even to the lessee, which is '» Doe d. Marlow u. Wiggins, 1843, confusio. See Bigelow, p. 561. 4 Q.B. 367 ; Parry v. House, supra ; Carlton " Cook v. Whellock, 1890, 24 Q.B.D. 638. V. Bowoook, 1884, 51 L.T. 659 ; Doe d. '« Doe d. Strode v. Seaton, 183.5, 2 Or. Plevin V. Brown, aupra. M. & R. 728. " Siipra, p. 13. " Delaney «. Fox, 1857, 2 C.B. N.S. 768 ; '^ Notes to Walton v. Waterhouse, 2 explaining Watson v. Lane, 1856, 11 Ex. Wms. Saund. (1871 ed.) 286; Hill v. 769. But as to constructive eviction see Saunders, 1825, 4 B. & C. 529. Poole Corpn. v. Whitt, 1846, 15 M. & " Neave «. Moss, 1823, 1 Bing. 360 ; W. 577, and Bigelow, p. 564. Hopcraft v. Keys, 1833, 9 Bing. 613 ; " Downs v. Cooper, 1841, 2 Q.B. 256. Hill ^. Saunders, 1825, 4 B. & C. 529. " Balls v. Westwood, 1809, 2 Camp. 11. 2 18 BAR TO DISCLAIMER OF TITLE Mortgage. Paying rent twice. Bond fide pay- ment of rent. Multiple- poinding. Interpleader. lessee attorns to the true owner, or has himself in reality the owner- ship.^" This doctrine of expiry of title is largely illustrated in England from the law of mortgage ; but there is no useful analogue thereof in modem Scotland, except it be the disposition ex facie absolute but really in security only. It seems, therefore, to be sufficient to collect in a note the principal Enghsh cases. ^^ Estoppel, in a question of leasehold, appUes only where there is a dispute as to title. ^^ And the above exceptions to the rule of disclaimer are, in the matter of rent, designed ' so far to guard the tenant that ' he may not be carelessly put into the hazardous position of paying ' his rent twice over, and being put to the trouble and expense ' of an action to recover that which he may have been compelled ' to pay.' ^^ The former of these objects is sought to be attained in the law of Scotland by the doctrine of bona fide payment of rent to a person who is losing or has lost title to exact it. The cases in which the plea of fuU discharge has been given effect to are cases in which either the title of the incoming landlord is only inchoate,** or his conduct in neglecting to notify the tenant is such as to bring him under the definitions of per- sonal bar or estoppel which were given at the outset of this treatise. *' Where there has been no such neglect, actual or imputed,** and more particularly where the payment has been prematurely made,*' there is no bar. With regard to the second object (the avoidance of the necessity to sue for repetition of rent paid), there would, in a case of lessor and lessee, be no such double distress, in the absence of a sasine competing with the lessor's right, as would enable the lessee to throw the rents into a multiple- poinding in Scotland or into interpleader in England ; but this remedy would be open in each country, where the competitors, being claimants '" Delaney v. Fox, supra ; Doe d. Oliver V. PoweU, 1834, 1 A. & E. 531 ; Ford v. Ager, 1863, 2 H. & C. 279 : distinguishing Doe d. BuUeu v. Mills,'1834, 2 A. & E. 17 ; Accidental Death Ins. Co. v. Mackenzie, 1861, 9 W.R. 783. This includes evic- tion by definitive operation of law — WhitehaU Court v. EttUnger, [1920] 1 K.B. 680. ^ Alchome v. Gomme, 1824, 2 Bing. 54 ; Pope V. Biggs, 1829, 9 B. & C. 245 ; Marriott V. Edwards, 1834, 5 B. & Ad. 1065 ; Waddi- love u. Bamett, 1836, 2 Bing. N.C. 538 ; Evans v. Effiot, 1838, 9 A. & E. 342 ; followed in Towerson v. Jackson, [1891] 2 Q.B. 485 ; Doe d. Hegginbotham v. Barton, 1840, 11 A. & E. 307 ; Doe d. Downe v. Thompson, 1847, 9 Q.B. 1037 ; Watson V. Lane, 1856, 11 Ex. 769. >^ Lewis V. Baker, [1905] 1 Ch. 46. 8' Per Park J. in Gravenor v. Woodhouse, 1822, 1 Bing. 38. '* The cases — all ancient^— are collected in 2 Hunter, 437, and Rankine, Leases, 316. 85 M'Gm V. Crawford, 1716, M. 1783 ; Robertson v. Orme, 1755, 5 B.S. 838; Garden v. Lindsay, 1757, 5 B.S. 855 ; Annand v. Elliston Tenants, 1622, M. 1777 ; Home V. Kelloe Tenants, 1666, 1 B.S. 522 ; and see Porterfield v. Cunningham, 1629, M. 1781. »8 See Tersie v. Burnett, 1711, M. 1783. " Home V. Caimcross, 1602, M. 10021 ; Cleghom v. Tenants, 1628, M. 10022, 1 B.S. 249; Wilson v. Warroch, 1611, M. 10022 ; and c/. Haggart v. Miller, 1838, 16 S. 1058, with York Buildings Co. v. Garden, 1736, M. 1784 ; Elch. Bona and m. fides, 2. BAR TO DISCLAIMER OF TITLE 19 to a succession and neither put into possession by the Court, were equal in title or in want of title. *^ The rule of bar to disclaimer of lessor arises in Scotland out of his Lessor's possessory relation to his lessee.^^ It does not extend to the lessor's ^^'"^^^°^^- singular successors in matter of removing, who in order to have a title ,, to eject must be infeft,^" or (being principal tenants removing sub-tenants) be able to found on an infeftment,*i or to conjoin the party infeft in the action.'^ It may be gravely doubted whether the old strict rule which confined the bar so as to benefit and bind the lessor only ®^ should be retained and exclude his universal successors, including his heir, who now is automatically vested in ,a personal right to the land by mere survivance of his ancestor.'* In England the element of infeftment by registration does not enter ; and the doctrine of party and privy throws the door of representation very wide on both sides of the contract of lease. *^ The doctrine of estoppel in pais has been invoked in England, and Surrender of the doctrine of personal bar is implicit in Scotland, regarding the proof of the extinction of a lease during its currency. In England the text is the third section of the Statute of Frauds, whereby inter alia no leases can be surrendered, unless by deed or by note in writing, signed by the party so surrendering the same or his agents authorised by writing, or by act and operation of law.^^ The corresponding rule ia Scotland has been thus stated : ®' ' Although parole is in general inadmissible to prove ' that a written contract has been abandoned or altered by a subsequent ' verbal arrangement, yet, if the actings of the parties clearly show that ' this is the case, the Court will not maintain the writing against the ' real facts.' In other words, the conduct of the parties bars or estops either of them from maintaining the subsistence of the contract — here of the lease. One of the appHcations of this estoppel illustrates very clearly how statement of it operates : '* Surrender by operation of law ' is appUed to cases where 88 E. Wemyss v. CampbeU, 1864, 2 M. Knight v. Smythe, 1816, 4 M. & S. 37 ; 461 ; Birmingham ^,. Tuite, 1872, 7 Ir. K. L. & N.W. Ry. v. West, 1867, L.R. 2 C.P. Eq. 221 ; Townley v. Deare, 1839, 3 Beav. 553. It is best illustrated in res judicata 213 ; Glover v. Reynolds, 1867, 16 L.T. (estoppel by record). N.S. 113 (consignation of rent; injunction). »» 29 Car. II. c. 3, herein not affected *» Supra, p. 10. See Knapkeim v. by the Real Property Act, 1845 (8 & 9 Vict. Farquhar, 1665, M. 10432. c. 106), s. 3, which deals only with sur- '» The authorities are collected in 2 renders in writinq, which must be by deed. Hunter, 5 seq. ; Rankine, Leases, 515. See Taylor, Evidence, §§ 1005 seq. : ' a " See Ritchie v. Dickson, 1857, 19 D. ' phrase to which it is difficult to assign 949. ' a precise meaning.' 82 Ferguson v. Morison, 1802, M. 13806. " Dickson, Ev. § 1029. See also 627-8. '3 2 Hunter, 14 ; Rankine, Leases, 315 ; There is further illustration, infra, Chap. Touch V. Hardismilne, 1627, M. 10430; III. Heriot v. Town of Edinburgh, 1668, M. "^ pg^ Parke B. (L. Wensleydale) in 6901. Lyon v. Reed, 1844, 13 M. & W. 285 at '* 37 & 38 Vict. c. 94, e. 9. p. 305. The controversy between K.B. and »* Supra, p. 8. Co. Litt. 3536 ; Doe d. Exoh., in which this is the leading case BuUen v. MUls, 1834, 2 A. & E. 17 ; Doe d. on the one side, and Thomas v. Cook, 1818, 20 BAR TO DISCLAIMEB OF TITLE ' the owner of a particular estate has been a party to some act, the validity ' of which he is by law estopped from disputing and which would not ' be vaUd if his particular estate had continued to exist. There the ' law treats the doing of such act as amounting to a surrender. Thus if ■' lessee for years accept a new lease [from] his lessor he is estopped from ' saying that his lessor had not power to make the new lease, and, as ' the tenant could not do this until the prior lease had been surrendered, ' the law says that the acceptance of such new lease is of itself a surrender ' of the former. . . . Again, if tenant for years accepts from his ' lessor a grant of a rent issuing out of the land and payable during the ' term, he is thereby estopped from disputing his lessor's right to grant ' the rent, and as this could not be done during his term, therefore he is ' deemed in law to have surrendered his term to the lessor. . . .' This is surrender by operation of law, ' which does not depend upon ' intention at aU.' *^ Therefore there is surrender by estoppel where the lessee has been party to an act which has some other object besides mere surrender to the landlord, and where that object cannot be brought about without extinction of the lease. Novation. One class of cases falls under the head of Novation ^'"' (in the proper sense of that word), i.e. there is a new lease, the parties remaining the same and the new contract being entered into pending the old, overlapping it, and not being a pure prorogation of it. In a question between lessor and lessee and their respective representatives ^"^ the main difficulty arises where the new lease turns out to be void or voidable. The nile has been stated in England thus : 102 < Where parties enter into a contract which ' would have the effect of rescinding a previous one, but which cannot ' operate according to their intention, the new contract shall not ' operate to afEect the previously existing rights.' Thus, where there was a lease for ninety-nine years granted efEectuaUy by tenant for life with powers, and a later lease for a similar term of the same subject was found to be ultra vires, as not reserving the best available rent, the tenant under both was held entitled to recur to the first, so as to resist ejectment by the remainder man, though the second lease recited the surrender of the first.^"^ Again, there was a lease for the duration of certain hves. The landlord's estate was then settled on his son for life, 2 B. & Aid. 119, on the other, viz. whether <" Lyon, »«, at p. 309. estoppel applies, where the new lease by i"" As to which, in general, see Gloag, the landlord consented to by the outgoing Contracts, 850. tenant is in favour of a third party already i»i As to singular successors of the lessor put in possession by the outgoing tenant, and the effect of the Act 1449, c. 17, relating before the close of his lease, would probably to possession and real right, see Kankine, be answered in accordance with Thomas v. Leases, 149. Cook in Scotland, affirmatively. See the i»2 j^ Noble v. Ward, 1867, L.R. 2 Ex. discussion in 2 Smith L.C. (10th ed.), at p. 138, per Willes J., delivering the pp. 816-823 ; and add Wallis v. Hands, judgment of Exch. Ch. (sale of goods), after [1893] 2 Ch. 75, explaining Baring v. citing the cases that here follow. Abington, [1892] 2 Ch. 374, 381, in that "» Roe d. Berkeley v. Archbishop of ' York, 1805, 6 East 86. BAR TO DISCLAIMER OF TITLE 21 with power to let. The son, pending the first lease, let the same subjects to the tenant by a faulty execution of the power. A life still subsisted under the first lease, when ejectment was brought against the tenant ; vainly, though here also surrender of it was ' made and accepted ac- ' cordingly.' The ratio was that the second lease did not pass an interest according to the contract and was therefore not absolute.^"* In Scotland the same doctrine obtains : ' If the second tack or the ' heritable right ^"^ should be declared void the tenant may resume his ' first title ; because the implied resignation of the first tack is only ' provisional, not to take place if the second tack or heritable right should ' prove ineffectual to him.' ^"^ The decided cases relate to conversion of tacks into feus,^"'' or to merger in wadset.^"* In the Dundonnachie Feu case the point was not reached ; but the same doctrine would probably have applied to the part of the new feu which had been held on long lease, even in the hands of a singular successor.^"^ The next class of casesfalls under the head of Delegation ^^9 (or Novation, Delegation. as the term is ordinarily used), wherein the first tenant is treated as the debtor. It is the substitution of one tenant for another in the same subject ; and the fundamental requisite is that in this tripartite arrange- ment all three parties shaU be shown by proper evidence to have agreed.^^^ Thus there was no surrender where the tenant gave an invalid notice to quit, and bid for a new lease at an auction in which another bidder was preferred who never took possession. ^^^ But an incoming tenant, ad- mitted into possession by the landlord, cannot plead that the outgoing tenant has not surrendered in writing.^^^ Tenants of different landlords agreed to exchange their subjects and did exchange possession. The same factor acted for both landlords, and he for them concurred. This "* Doe d. Egremont v. Courtenay, 1848, ^'" Stewart v. Murdoch, 1882, 9 R. 458. 11 Q.B. 702, citing Doe d. Biddulph v. "" The general law ia discusBed in Gloag, Poole in the same volume, aiid Lord Contracts, 369 seq. Mansfield in Wilson v. Sewell, and Davison "^ For cases of simple renunciation im- d. Bromley v. Stanley, 1768, 4 Burr. pHed and the proof thereof, see, in England, 2210, and overruling Doe d. Egremont v. Grimman v. Legge, 1828, 8 B. & 0. 324 ; Forwood, 1842, 3 Q.B. 627. The tenant Dodd v. Acklom, 1843, 6 M. & Gr. 672 ; is entitled to retain the old lease— Knight MoUett v. Brayne, 1809, 2 Camp. 103 ; V. Williams, [1901] 1 Ch. 256. Ph6n6 v. Popplfewell, 1862, 12 C.B. N.S. i»6 A feu substituted for a tack. 334 ; Cannan v. Hartley, 1850, 9 C.B. 634 ; i»« Ersk. 2£Ai. Also Cr. 2.9.3, 2.10.7 ; Oastler v. Henderson, 1877, 2 Q.B.D. 575 ; St. 2.9.36 ; Bankt. 2.9.48. Fenner v. Blake, [1900] 1 Q.B. 426 ; Brown i<" M'Dougal V. Campbell, 1566, M. v. Burtinshaw, 1826, 7 Dow. & Ry. 603. 3082 ; Cauder v. Hamilton, 1610, ibid. ; In Scotland, Lyons v. Anderson, 1886, E. V. Cs. Dunfermline, 1628, M. 3084. 13 R. 1020 ; Walker's Trs. v. Manson, 1886, i°8 Lesmore v. Hutcheson, 1634, M. 13 R. 1198 ; Soott-Chisholm v. Brown, 3084. On the question of fact— whether 1893, 20 R. 575. there has been substitution — see the old i" Huddleston v. Johnstone, 1825, M'Cl. cases collected in 2 Hunter, 111 ; Rankine, & Y. 141, and see 4 B. & C. 922 ; followed Leases, 624. And as to the completeness in Doe d. Murrell v. Milward, 1838, 3 M. & of merger, see Campbell v. M'Kinnon, 1867, W. 328, and in BessaU v. Landsberg, 1845, 5 M. 636 ; E. Zetland v. Glover Incorp., 7 Q.B. 638. 1868, 6 M. 292, aff. 8 M. H.L. 144 ; and "= Phipps v. Sculthorpe, 1817, 1 B. & Gloag, Contracts, 854. Aid. 50, 106 E.R. 19. 22 BAB TO DISCLAIMBE OF TITLE Proof thereof. Illustrations other than from lease. Patent cases. was a surrender by each tenant and the inception of two new leases.^^* A tenant from year to year entered into an agreement for a lease to be granted to him and another. They jointly occupied thereafter and were held entitled to occupy together, though no lease was executed."^ In Scotland there seems to be no ground for doubt that the consent of the former tenant, which would bar him from disputing the new tenancy, might competently be proved by facts and circumstances, whether his lease was in writing or verbal, and whether or not there had been formal warning. "« This is certainly so in the converse case of a landlord's consent to a subletting. ^^' Other cases of derivative possession to which principles similar to those above elaborated have been appHed may now be briefly noticed. And first, the relation of the holder of a patent and his Hcensee bears a close, even a perfect analogy, as was pointed out by Lord Blackburn, who, in a passage already quoted in part,^^* went on to say : ' If [the ' licensee] has used that which is in the patent, and which his license ' authorises him to use without the patentee being able to claim against ' him for infringement, because the license would include it, then, like a ' tenant under a lease, he is estopped from denying the patentee's right ' and must pay royalty. Although a stranger might show that the patent ' was as bad as anyone could wish it to be, the hcensee must not show ' that. ... If upon the true construction of the specification [what ' the licensee has done] is included, no matter whether it is good or bad, ' the hcensee must pay. If, upon the true construction of the specifica- ' tion, it is not included, there is no reason why the licensee should pay ' — any more than a tenant should pay rent for premises not within his lease.ii* The hcensee ' stipulates simply for leave to use that which is ' alleged to be the inventioui admitting conclusively that such invention ' is new, useful, and properly specified.' i^" This doctrine holds even where the holder of the patent admits that it had been revoked ; for there was no analogy to the eviction of a tenant, the use under the license being still open to the hcensee.^^^ A plea that, if the patent was construed so as to include what the hcensee was doing, it would be invahd 1" Bees V. WllUams, 1835, 2 Cr. M. & R. 581, 150 E.R. 248. "5 Hammerton v. Stead, 1824, 3 B. & C. 478, 107 E.B. 811. And see a case of a re- tiring partner lessee — Graham v. Whichels, 1832, 1 C. & M. 188, 149 E.R. 368 ; of a lessee of a, ferry becoming servant of the ferryman— Peter v. Kendal, 1827, 6 B. & C. 703, 108 E.R. 610; of a servant trans- ferring to a new firm — Hobson v. Cowley, 1858, 27 L.J. Ex. 245. "° See note, supra, ^''. 11' Hay V. M'Tier, 1806, Hume 836 Maule V. Robb, 1807, Hume 835 cf. Eraser v. Eraser, 1833, 11 S. 565 E. Elgin's Trs. v. Walls. 1833, 11 S 585; E. Morton v. Tenants, 1625, M. 15228. "» In Clark v. Adie, 187J7, 2 Ap. Cas. 423 at pp. 435-6. Supra, p. 14. 1" See also Noton v. Brooks, 1861, 7 H. & N. 499 ; Walton v. Lavater, 1860, 8 C.B. N.S. 162 ; Lawes v. Purser, 1856, 6 E. & B. 930 ; Cropper w. Smith, 1884, 26 Ch. D. 700, 10 Ap. Cas. 249 ; Crossley V. Dixon, 1863, 10 H.L.C. 293. This applies only pending the Uoense — Axmann V. Lund, 1874, L.R. 18 Eq. 330. 120 pgr Willes J. in Trotman v. Wood, 1864, 16 C.B. N.S. 479. 1^1 African Gold Recovery Co. v. Gold Mining Co., 1897, 14 R.P.C. 660. BAR TO DISCLAIMER OF TITLE 23 for want of novelty, was struck out as embarrassing, for if there were a license — which was the real question in dispute — the licensee was barred from denying the novelty.^^^ If a manufacturer was hcensee, he could be estopped ; not if he were the patentee's employee for manu- facturing.i^^ The next class of cases has this in common, that the parties on the Agent ; one side are all agents in possession. These are agents in the narrower bailee!' ' sense, partners,i^* and bailees. ^^^ And here again Lord Blackburn comes in aid : i^e ' iphe position of an ordinary bailee, where there has ' been no special contract or representation on his part, is very analogous ' to that of a tenant who, having accepted the possession of land from ' another, is estopped from denying his landlord's title, but whose estoppel ' ceases when he is evicted by title paramount.' i^' It is ' a settled rule ' of law that an agent shall not be allowed to dispute the title of his ' principal, and that he shall not, after accounting with his principal ■ and receiving the money in that capacity, afterwards say that he did ' not do so and did not receive it for the benefit of his principal but for ' that of some other person. . . . All the rest of the world, except ' the [agent], might dispute the legal title of the plaintiffs in the ship, ' but he cannot do it.' ^^* The case of Biddle v. Bond was decided in 1865, and the judgment Biddie v. Bond canvasses all the most important earlier English decisions. Goods of ca^s^"''^"^ E were distrained by one who was not really his landlord, and were handed over to the defendant, an auctioneer, to sell. R at the beginning of the sale notified the defendant — quite justly — that the distress was void, and directed him either not to sell at all or to keep the net price for him. The defendant then sold, but refused to pay the price to his employer, who sued him for it. It was held that, though it would not 122 Ash worth v. Law, 1890, 7 E..P.C. and in Cheesman u. Exall, 1851, 8 Ex. 341— 231. a case of pledge — Pollock C.B. agrees with 123 Basset v. Graydon, 1897, 14 B.P.C. him, but there Parke B. is silent, and 701. As to estoppel of licensee by deed, Martin B. remarks that it would be difficult see Oldham, 1789, noted in 3 T.R. 439 ; to transact commercial business if a party Bowman u. Taylor, 1834, 2 A. & E. 278. entrusted with the possession of property As to a partner selling his interest in a were not estopped from denying the title patent to the other partners and being of the person from whom he received it. barred from impugning it and manufactur- See also Dixon v. Hamond, '28 ; Roberts ing piratically, see Chambers v. Crichley, v. Ogilby, ^'* ; Ross v. Edwards, 1895, 73 1864, 33 Beav. 374. L.T. 100 ; Scott v. Crawford, 1842, 4 M. & "* As to whom, see Dixon v. Hamond, Gr. 1031 (no injury done). infra ; Nicholson v. Knowles, 1820, 5 Madd. ^" Founding on a case in 1602 of a 47, 56 E.B. 812 ; Roberts v. Ogilby, stolen horse retrieved by the true owner 1821, 9 Price 269, 147 E.B. 89. from the thief's bailee — Shelbury v. Scots- "5 The terms bailor, bailee, and bailment ford, Yelv. 22, 3rd ed., translated; also are most fortunately coming into use in explained by Jessel M.R., in Ex p. Davies Soots practice. In the Sale of Goods Code in re Sadler, 1881, L.R. 19 Ch. D. 86 at no more satisfactory equivalent could be p. 90. found for bailee than custodier. ^28 pg^ Abbott C.J. in Dixon v. Ham- 126 In Biddle v. Bond, 1865, 6 B. & S. ond, 1819, 2 B. & Aid. 310, 106 E.R. 380. 225 at p. 232. In Ogle v. Atkinson, 18)4, And see Kieran v. Sandars, 1837, 6 A. & E. 5 Taunt. 159, Heath J. denies the analogy, 515. 24 BAR TO DISCLAIMER OF TITLE be enough, in order to intercept the estoppel, for a bailee to become aware (a) of a third person's title or (b) of an adverse claim intimated to him, there was here that which was equivalent to eviction by title paramount, entitling him to plead a jus tertii. The infirmity of the first of these two pleas was explained by the dictum : ^^^ ' To allow a depositary ' of goods or money, who has acknowledged the title of one person, to ' set up the title of another who makes no claim or has abandoned all ' claim, would enable the depositary to keep for himself that to which ' he does not pretend any title in himself whatsoever.' And the second was illustrated thus : ' A warehouseman receiving* goods from a con- ' signee, who has had actual possession of them, to be kept for his use, ' may nevertheless refuse to re-deliver them if they are the property of ' another, if he defends upon the right and title and by the authority' ' of such other,' i^" and only then. Three other cases ^'^ are expounded as cases in which a bailee (a wharfinger or warehouseman) ' who by ' attorning to a purchaser of the goods in effect represented to him that ' the property has passed to him (though such was not the fact), and ' thereby induced him to alter his position and pay the price to his vendor, ' has been held estopped from denying the property of the person to ' whom he has thus attorned by setting up a title in a third person in- ' consistent with the representation on which he had induced the plaiatiff ' to act.' ^^2 More recently a case arose in which A fraudulently iaduced B, owner of goods in C's warehouse, to instruct C to transfer the goods to A's order, and this was done. A sold the goods to D, who ascertaiaed from C that the latter held them for him before paying the price to A. On the discovery of A's fraud, C, the warehouseman, refused delivery to D, who recovered damages measured by the market value of the goods at the date of the refusal. For C had attorned to D, and was thus estopped from impugning D's title.^^s g^^ ^n agent may set up paramount title in a third party, provided he had no notice of the claim at the time "• In Betteley v. Reed, 1843, 4 Q.B. the attornment be oral or written, per 511 at p. 517. (Warehouseman, who had Park J.)«; Hawes v. Watson, 1824, 2 B. & attorned to the plaintiflf, could not plead C. 540, 107 E.R. 484, 2 Eoss, L.C. C.L. 201. the usurious nature of the latter's title Stonard was followed in Holl v. GrifSn, from the depositor.) 1833, 10 Bing. 246. ISO pgy Pollock C.B., correcting Ogle v. "2 Pg^L. Blackburn J. 'in Biddle, "«, 6 B. Atkinson, "6, m Thome v. Tilbury, 1858, & S. 231-2. In Hawes, "i, Best J. points out 3 H. & N. 534 at p. 537. (Events occurring that ' the right of stoppage in transitu is an after the depositation made the warehouse- ' equitable right to be exercised by the man merely a stakeholder. If there had ' vendor only when it can be done without been estoppel, he could not have called ' disturbing the rights of third parties ' ; as on the competitors to interplead : per to which, see Harmau v. Anderson, 1809, Watson B., p. 540.) As to which, and the 2 Camp. 243 ; U.S. Steel Products Co. v. doctrine that bailee's right cannot as a G.W. Ry., [1916] 1 A.C. 189. rule be higher than the bailor's, see Wilson "s Henderson & Co. v. Williams [1895] V. Andertou, 1830, 1 B. & Ad. 450, 109 1 Q.B. 521. L. Halsbury and Lindley L.J. E.R. 855. also founded on B's enabling A to commit "1 Stonard v. Donkin, 1810, 2 Camp, the fraud, and canvassed Kingsford v. 344 (custom irrelevant) ; Gosling v. Birnie, Merry, 1856, 1 H. & N. 503 See also 1831, 7 Bing. 339, 131 E.R. 131 (whether M'Combie v. Davies, 1805 6 East 538 BAR TO DISCLAIMER OF TITLE 25 when the goods were received and did not elect to treat the principal as owner after receiving such notice, and also has delivered the goods to the third party or defended the latter's right by his authority.!^* In the foregoing cases concerning custodiers, the warehouse or wharf Owner- has been in neutral ownership. But the same principles apply where the goods he in their original owner's premises. The facts then bring the law into the debateable ground between the subject of this chapter and estoppel by representation, hereafter to be dealt with. Thus, of a large quantity of goods belonging to B and lying in his warehouse a part was by him sold to A, and by A re-sold to C, whose title was acknowledged by B. It was held that B was thus estopped from dis- puting A's title on the ground that specific goods were never appropriated to the contract of sale. The question was not one of ownership but of attornment or representation.^^^ This decision was followed in Knights v. Wijfen}^^ Barley in sacks belonging to A lay in his granary near a railway station. A sold eighty quarters unidentified to B ; and B sold sixty of them to C, who paid B for them and got from B a delivery order addressed, as was usual, to the station-master. The order was shown by the station-master to A, who said it was all right. B having become bankrupt without having paid A, A refused deUvery_ to the station-master- acting for C ; and was held to be wrong. For he was estopped by his statement to the station-master from denying that the ownership of the goods had passed to C, who had been induced thereby to change his position by abstaining from demanding back the money he had paid to B. Again, A sold goods Ijdng in his warehouse to B, who requested him to let them remain there. A gave B the appropriate deUvery orders. B sold the goods to C and indorsed the orders, which were never presented, and the indorse- ments were cancelled by B. The action was by B against A for damages on the ground of non-deUvery, and A defended, not on behalf of C, but in his own interest. The judgment went against him. A bailee may either show that he has delivered according to order, or ask for an inter- pleader order, or at his own risk retain for the true owner, not for himself .^^' Besides Biddle v. Band there are other cases illustrating the position Auctioneer, of auctioneers in respect to estoppel. Thus an auctioneer is entitled and bound to hand the proceeds of a sale by him to his employer, though he has been notified by one of the creditors that the latter has committed an act of bankruptcy.^^s The ratio was that there was no jus tertii ; 1" Biddle v. Bond, "» ; Rogers v. Lam- on in Simm v. Anglo-American Tel. Co., bert, "' ; Thome v. Tilbury, "» ; Ross v. 1879, 5 Q.B.D. at pp. 212, 216. Edwards, "«. And see Zulueta i;. Vinent, ^3, ^ g^^ ^ ^^ ^ Lambert & Co.. 1852, 1 De G. M. & G. 315; Green v. 3 approving the doctrine Maitland, 1842, 4 Beav. 524. \^ thaaiJZ, ^nnH i^e 13' Woodley «. Coventry, 1863, 2 H. & ^° ^'^"^^ "" ^'""^' " C. 164 ; and see Gillett v. Hill, 1834, 2 "« White v. Bartlett, 1832, 9 Bing. 378. C. & M. 530. He did not file his petition till two months i'« 1870, L.R. 5 Q.B. 660 ; commented after the sale. 26 BAR TO DISCLAIMEK OF TITLE and the notification did not convert the auctioneer into an impUed trustee, his possession being that of his employer."9 it would have been otherwise if there had been collusion— a concerted fraud."" In the case of Ex parte Davies in re Sadler "^ an auctioneer was put into possession of the stock-in-trade of a bankrupt by the landlord of the premises (who was paid out and retired), by the receiver in bankruptcy, and by the holder of a registered bill of sale. When the bankruptcy trustee was appointed, the auctioneer sold ' by order of the trustee,' and was held to have no answer to the trustee's demand for the net price, though he might be exposed to a further claim by the secured creditor. ' When a ' party in such a position, knowing of two adverse claims to goods, elects ' to take the part of one of the claimants and to sell the goods as his, he ' is estopped from afterwards denying that claimant's title. If he had ' not taken this course he would have been entitled to show that there ' was a better title in the bill of sale holder ; there might have been ' what is called an eviction of the trustee by title paramount. . . . ' In Biddle v. Bond notice of the adverse claim was given to the auctioneer ' when the sale was just about to commence, and he did not elect in ' favour of one of the claimants, but merely sold the goods under the ' authority which had been already given to him by his bailor . . . and ' he showed, not only that he had had no opportunity of electing between ' the two claims, but that the adverse claimant had a title paramount ' to the goods, and that the person who had employed him to sell them ' had no title whatever, and that he himself had done nothing wrong.' "^ Carrier. The rule of estoppel apphes to ordinary carriers, as to other bailees ; but not to common carriers, ' who are bound to receive the goods for ' carriage. They could make no inquiry as to the ownership. They ' have not voluntarily raised the question ; it was raised by the demand ' of the real owner before the defendants [the common carriers] had ' parted with the goods. The law would have protected them against ' the real owner if they had delivered the goods in pursuance of their ' employment without notice of his claim. It ought equally to protect ' them against the pseudo-owner, from whom they could not refuse to ' receive the goods, in the present event of the real owner claiming the ' goods and their being given up to him. The compulsory character of ' the employment of a carrier furnishes ample ground for so holding.' i*^ Scots Law. The doctrine of personal bar to disclaimer of title and regarding title paramount does not seem to have been exphcitly canvassed in any reported Scots decision, except in questions between landlord and tenant.^** "» Ibid., p. 383. 4 C.B. N.S. 618, 649, preferring the 2nd "» Herdman v. Willcook, 9 Bing. 382, to later editions of Story on Bailments, note. §§ 266, 582. See also Anon, cited in 3 1" 1881, L.E,. 19 Ch. 86. Esp. 115. i« Per Lush L.J. at p. 93 ; Biddle's case "* As to agents disputing the title or is further explained in Kiugsman v. Kings- inverting the possession of their principal, man, 1880, L.K. 6 Q.B.D. at pp. 129, 134. see Arbouin v. Sime, 1824, 3 S. 184 ; 1" Sheridan v. New Quay Co., 1858, Maxwell v. Sharp, 1721, Roberts, App. 380. BAR TO DISCLAIMER OF TITLE 27 But it is implicit in many of the cases concerning constructive delivery of goods in warehouse or on wharf and stoppage in transitu, ^^^ and seems to be in strict conformity with the Scots law of ,/ws tertii.^^^ Although in theory an agent's or bailee's possession is derivative Muitiple- from and identified with that of his principal or bailor, and there is thus fnterpielde no ' double distress ' or competition respecting a fund or thing in medio, unless he be merely a stakeholder, there has been a tendency in both countries in recent times to allow a multiplepoinding "' or interpleader, ^^^ where there is a substantial risk that, in the absence of a judgment in a competition, the agent or bailee, who has delivered in pursuance of his employment, might have to pay damages to a competitor.^*' It is then also judicious, in order to minimise loss, to have the goods sold at once and make the net price the fund in medio. ^^^ E.g. M'Eachern v. Ewing & Co., 1824, '^^^ The scope of interpleader was ex- 2 S. 724 ; Black v. Incorporated Bakers, tended in 1860. Glasgow, 1867, 6 M. 136 ; Meohan v. N.E. »" See Crawshay v. Thornton, 1836, Ry., 1911 S.C. 1348; M'Ewan & Sons v. 2 Myl. & Cr. ] ; Thome v. Tilbury, "°; Smith, 1849, 6 B. Ap. 340, 2 H.L.C. 309 ; Child v. Mann, 1867, L.R. 3 Eq. 806 Inglis V. Robertson, [1898] A.C. 646, 25 (Sheriff, a stakeholder) ; Rogers, Sons & R. H.L. 70 ; and see Broughton v. Aitohison, Co. v. Lambert & Co., i" ; Henderson & 15th Nov. 1809, F.C. 411 ; Melrose & Co. Co. v. Williams, i'^; Robinson v. Jenkins, V. Hastie & Co., 1851, 13 D. 880, 14 D. 1889, 24 Q.B.D. 275 ; Mersey Docks and 268 ; and note to 2 B.C., 7th ed., 533. Harbour Board, [1899] 1 Q.B. 546 ; Atten- "' Gloag, Contracts, 323, 346. borough v. London and St Katharine's "' See Mackay, Manual, 309 ; Maclaren, Dock Co., 1878, 3 C.P.D. 450, and cases Practice, 662. there. CHAPTER III SEI INTERVENTUS — PART PERFORMANCE Specific impie- The subject of this chapter is the relation which the doctrine of personal formaiweHn ^^^ bears to the law of specific implement in Scotland and specific per- fn En^larKi"^ formance in England. That law has been developed with much greater particularity in the latter country on account of the necessity for riding the marches between the Courts of Law, which awarded damages, and the Courts of Equity, which furnished the other remedy ; while in Scotland the same Courts have dispensed either remedy according to circum- stances. ' Specific performance was not a remedy to which a party ' was entitled at common law in England. To obtain it he was compelled ' to resort to the separate jurisdiction of the Court of Chancery, which ' at times refused its assistance, even where a legal right was estabUshed, ' leaving the party who invoked it to his ordinary legal remedies. In ' Scotland, on the contrary, specific implement is one of the ordinary ' remedies to which a party to a contract is entitled where the other ' party to it refuses to implement the obHgation he has undertaken.' ^ ' In England the remedy of specific performance is an extraordinary ' remedy. It is always a matter of' discretion, and defences are admitted ' in a suit for specific performance which are inadmissible according to ' the doctrines and practice of the Courts of Scotland, where specific ' performance is part of the ordinary jurisdiction of the Court.' ^ In the same case Lord Watson, after stating the distinction similarly, added : ' It is quite conceivable that circumstances might occur which would ' make it inconvenient and unjust to enforce specific performance of ' contract of sale ' ^ — which was the contract before the House. There reposes in the Courts of both countries a discretion ; and it is remarkable how similar are the principles or rules according to which that discretion is exercised,* particularly since the passing of Lord Caims's Act in 1858 ^ and of the Judicature Act 1873,6 ^j^e results of which are to give the High Court of Justice in England power to award damages (1) in sub- 1 Per L. Herschell in Stewart v. * See Pry, Specific Performance, pasaim ; Kennedy, 1890, 15 Ap. Gas. at p. 95, Gloag on Contracts, 771-7. 17 R. H.L. at p. 5. » 21 & 22 Vict. ^. 27, s. 2 (damages in 2 Per L. Macnaghten, pp. 105, 11. Chancery). ' Ibid., pp. 103, 10. The argument in « 36 & 37 Vict. c. 66, ss. 16, 24 (7), the Law Reports is instructive. 76. 28 REI INTBRVENTUS — PABT PEEFOEMANCE 29 stitution for specific performance, (2) where there is no case for specific performance, and (3) in addition to specific performance in whole or in part.' At least in the matter dealt with in this chapter, it seems safe to say that there is no plain discrepancy between the two systems either in principle or in practice, where difference of modes of proof of agree- ment does not interfere. In Scotland, if statute prescribes a mode of authentication of a parti- Modes of proof cular obligation as exclusive, no equivalent or substitute is available.^ ?nSi^d!*° If, on the other hand, the obUgation is proveable prout dejure, the general rules of evidence can alone be invoked to trammel the proof. . Intermediate between these cases come others in which the common law, or such statutes as relate generally to the mode of executing deeds,* prescribe certain formalities, but allow him who seeks to maintain an obligation, agree- ment, or contract informally undertaken to cUnch it by proof of his own actings on the faith of it, the other party being barred by his own conduct from taking advantage of the informality. These actings are known as rei interventus. The leading authority is ag follows : ^^ — Bei interventus raises a personal exception, which excludes the plea of locus poenitenticn. Definition of It is inferred from any proceedings not unimportant on the part of the obligee, known to ''*' ™tB'"»^^tus. and permitted by the obligor to take place on the faith of the contract as if it were perfect ; provided they are unequivocally referable to the agreement and productive of alteration of circumstances loss or inconvenience, though not irretrievable.^^ The parallel institute in England is the doctrine of Part Performance in England, in its relation to the following provision in the Statute of Frauds — a fraMs^ s* 4. relation thought of at one time, on the Common Law side, as taking an agreement wholly out of the Statute, ^^ and on the Equity side, as well as by the whole Court now, as fraud ia the wider sense of that word.^^ No action shall be brought whereby to charge any executor or administrator upon any special promise to answer' damages out of his own estate ; or whereby to charge the de- fendant upon any special promise to answer for the debt, default, or miscarriages of another person ; or to charge any person upon any agreement made upon consideration of marriage ; or upon any contract or sale of lands tenements or hereditaments or of any interest in ' It is noticeable that two remedies ' See per L. Kames in Dishington v. formerly peculiar to Scotland, in order to Scot, 1628, M. 17015 ; Maitland v. Neilson, avoid sending a recalcitrant party to prison, 1779, M. 8459, Hailes 840 ; Buchanan u. are how available in England : — (1) Execu- Baird, 1773, M. 8478. tion of conveyances, etc., by a nominee of 10 g pi._ g_ 26. Court instead : 47 & 48 Vict. c. 61, s 14 ,, j^ ^^ ^^y^,^ equivalent definition in (see also 56 & 57 Vict c 53 ss. 31 33) ; ^ Commentaries (7th ed.), I. 346, the Savage v. Norton, [1908] 1 Ch. 290. (2) ^^^^ . ^^ , ^j^^^^ ^^ . ^^^>'^ ^^^ 'j^^^^^ Permitting party aggrieved or some other > „j, ^i^^eally referable to or resulting person to proceed with an unfulfiUed con- , ^^^^ , ^ j^ ^j^^^ ^^^^ ^^^ following tract, at sight of the Court and at the sentence charges of the party in breach : Rules of „ „„ , , ^ , , the Supreme Court, 0. 42, r. 30; but see " ^,^1, ^;^*^''^^^ " ^rockhurst, 1784, Mortimer v. WUson, 1885, 33 W.R. 927. 1 Br. C.C. 404. ' H.g. Writ in guarantee — 19 & 20 Vict. ^' Not necessarily involving moral obli- 0. 60, s. 6 ; Clydesdale Bank v. Paton, quity ; see Deny v. Peek, 1889, 14 Ap. Cas. [1896] A.C. 381, 23 R. H.L. 22. 337. 30 EEI INTERVENTUS — PART PEEFORMANOE The parallel- ism of the two systems. Interaction of informal writ (or oath) and rei interventus. or conoeming them ; or upon any agreement that is not to be performed within the space of one year from the making thereof ; unless the agreement upon which such action shall be brought or some memorandum or note thereof shall be in writing signed by the party to be charged therewith or some other person thereunto by him lawfully authorised." It thus appears that this section applies to certain innominate obliga- tions, to caution, to agreements relating to heritable property, and to agreements extending beyond a year. In regard to these the law of Scot- land also in general prescribes a restricted mode of proof. But in English law the mode is a signed writing ; ^^ in Scotland, probative including holo- graph writ, or oath on reference.!^ With regard to the rei interventus or part performance — with which this chapter is concerned — the distinction is immaterial. It is therefore beyond the scope of this work to describe the rules in each country regarding the authentication of writs, the agree- ments which normally require to be formally constituted, and the nature of the formaUties themselves. The examples which follow of rei inter- ventus and part performance wiU sufficiently indicate the diiSculties that have arisen in -practice and may arise again. It so happens that these difficulties have emerged in Scotland mainly with reference to the promises and agreements mentioned in the EngUsh provision quoted above. The principles are the same in both countries, and there is a striking parallelism in their treatment. In a case of part-payment it was remarked by a high authority : ^' ' I was anxious to find whether such a doubt i* existed in Scotland ; and I find there does not ; on the contrary, in aU the cases that have been referred to it has been held that part-payment of the purchase money is a sufficient part per- formance — that which we in this country call a part performance and which in Scotland they call rei interventus — to preclude the party to the transaction from setting up the statutory infirmity of the contract on the faith of which the purchase money was obtained.' The interaction of writ (or oath) in Scotland and rei interventus has been stated thus : ' The effect of rei interventus is not to vaUdate the ' imperfect writing and to set it up as per se a document of debt. The ' Act 1681 1* has its fuU operation in rendering the writing incapable, ' by itself, either of being the foundation of diUgence or of supporting an ' action. The rei interventus must be estabhshed before the objection ' of improbativeness is obviated. Being estabhshed, then the iirEormal ' writing is good evidence of the agreement, and the creditor under it " 29 Car. II. c. 3, s. 4. ■'^ Not a deed under seal, except in certain corporation and company contracts — Crampton v. Varna Ry. Co., 1872, L.E. 7 Ch. 562 ; Kidderminster Mayor v. Hardwick, 1873, L.R. 9 Ex. 13; Oxford Mayor v. Grow, [1893] 3 Ch. 535. '■' E.g. entail oases — Barclay v. E. Fife, 1829, 7 S. 708 ; Innes v. Mordaunt, 1822, 1 S. Ap. 139. A judicial admission — Jamieson v. Edinburgh Mutual etc. Soc, 1913, 2 S.L.T. 52. ^' L. Ch. Cottenham in Hamilton v. Wright's Trs., 1838, 3 S. & M'L. at p. 140. See also L. Corehouse's opinion (approved in H.L.) at 14 S. 326. '* In English law at that time. 1' Gap. 5, as to execution of probative writs. EEI INTERVENTUS — PART PERFORMANCE 31 ' will obtain decree in implement of it. . . . To say, therefore, that ' the Act 1681 is virtually set aside by this plea is to mistake its nature ' and effect. It is a good answer to the objection of improbativeness ' and makes the informal writing good evidence of the contract.' ^° ' A ' verbal agreement either for a sale or for a lease for a terms of years, if ' competently proved, — i.e. if proved by oath of party — is binding if ' followed by rei interventus. But the agreement cannot be proved by ' witnesses. When the institutional writers or other authorities speak ' of a verbal agreement not being binding, even if it were admitted upon ' oath, they always mean a verbal agreement upon which there has been ' no rei interventus. And, on the other hand, when they speak in other ' passages of a verbal agreement being binding if rei interventus has followed ' upon it they always mean a verbal agreement competently proved by ' the adversary's oath.' ^^ ' If things have been done on the faith of the ' agreement and in pursuance of it — that is to say, if the agreement ' has been followed by rei interventus — there is a rule of law to this effect, ' that an improbative writing combined with rei interventus shall be ' sufficient. The operation of rei interventus is sometimes expressed as ' a bar to locus pcenitentiw, but the practical effect is that it perfects ' the contract. Further, a verbal lease for a period of years followed by ' rei interventus will be sufficient. . . . With regard to the verbal ' bargain, I think it is quite fixed that that can only be proved in one or ' other of two ways. The first mode is by writing. There is nothing ' anomalous in sajring that a verbal bargain may be proved by writing, ' for there may be writing enough to prove though not to constitute the ' agreement. The other mode is by oath ' ^^ (on reference). ' When you ' have all the terms and conditions of a letting made manifest in a writing, ' though not signed by the parties who are either to have the benefit ' or to be burdened by the conditions which that writing would import, ' and you find, besides that writing, rei interventus — i.e. an entry by the ' man who is to have the benefit of the lease and action on his part in ' conformity with that tenure — you are entitled to hold that that lease ' is a good lease and that the person has a good leasehold.' ^^ The injustice of deciding otherwise is thus illustrated by Lord Glenlee : ' Where a party has given forth a deed out of his hand as fair and regular ' and binding on him and has dealt with the world on the footing of its ' being binding, if he attempt to reduce it on latent nulUties known only ' to himseK and arising from his own act (as signing without the presence *" Per L. Cowan in Church of England of attempt, frustrated by rei interventus, to Life and Fire Asa. Co. v. Wink, 1857, 19 D. repudiate membership of a benefit society at p. 426. — National Benefit Trust v. Coulter, 1911 ^^ Per L. Deas in Gowans's Trs. v. S.C. 544, esp. per L.J.C. Maodonald ; also Carstairs, 1862, 24 D. at p. 1388. a similar case in which bar was not required ^^ Per L.J.C. IngUs in Walker v. Flint, — Laing v. Provincial Homes Investment 1863, 1 M. at p. 421. See also per L. Co., 1909 S.C. 812. M'Laren in National Bank of Scotland v. ^ Per L. Ch. Hatherley in Campbell v. Campbell, 1892, 19 R. at p. 891 ; and a case M'Lean, 1870, 8 M. H.L. at p. 42. part perform ance. 32 REI INTEBVENTUS — PAET PERFORMANCE ' of witnesses) reduction would not lie.' 2* It is matter of replication, not a ground of action.^^ In England, In England the similar doctrine has been thus described : ' Courts ' of Equity exercise their jurisdiction in decreeing speciac performance ' of verbal agreements when there has been part performance for the ' purpose of preventing the great injustice which would arise from ■' permitting a party to escape from the engagements he has entered into, ' upon the ground of the Statute of Frauds, after the other party to the ' contract has upon the faith of such engagement expended his money ' or otherwise acted in execution of the agreement. Under such cir- ' cumstances the Court wiU struggle to prevent such injustice from being ' effected, and with that object it has, at the hearing, when the plaintiff ' has failed to estabUsh the precise terms of the agreement, endeavoured ' to collect if it can what the terms of it reaUy were.^* When one of two ' contracting parties has been induced or allowed by the other to alter ' his position on the faith of the contract, as for instance by taking ' possession of land and expending money on building or other like acts, ' then it would be a fraud on the other party to set up the legal invalidity ' of the contract on the faith of which he induced or allowed the person ' contracting with him to act and expend his money. ... I presume ' it win not be argued that any consequence can be attached to acts of ' part performance by the party sought to be charged.' ^' ' It is not in ' England only that such a doctrine prevails : a similar (perhaps even ' a larger) equity is also recognised in other countries whose equitable ' jurisprudence is derived from the same original sources as our own. ' By the law of Scotland " written contracts in strict technical language are those of which authentic written evidence is required, not merely ' " in proof but in solemnity ; as obhgations relative to land ; or obUga- tions agreed to be reduced to writing ; or those required by statute to ' " be in writing." To constitute any such contract there must be a final engagement," and as a corollary to that rule a " locus pceni- tenticB " is given, i.e. " a power of resiling from an incomplete engagement, from an unaccepted offer, from a mutual contract to which all have not assented, from an obligation to which writing is requisite and has not yet been adhibited in an authentic shape. But to this rei interventus raises a personal exception, which ' " excludes the plea of loous poenitenticB." ' ^^ 24 In E. Fife v. Duff, 1825, 4 S. 335 ; " p^, l. ch. Cranworth in Caton 0. Smith V. Bank of Scotland, 25th January Caton, 1866, L.R. 1 Ch. at p. 148 1821, F.C. 248. Cf. Henderson v. Balfour, "s p^r l. ch. Selbome in Maddison v. 1716, M. 17031 (informal order to build Alderson, 1883, 8 Ap. Cas. at p. 476. His ^'^'P)- Lordship then quotes Mr Bell's definition " Per L.P. Inglis in United Mutual («"i'™' P- 29). His other references are Ass. Co. «. Murray, 1860, 22 D. 1185. *° ^- ^'^^ ™- ^^' ^S- His whole opinion is the most authoritative exposition of the "« Per L. Ch. Cottenham in Mundy English ' doctrine of equity as to part per- V. Jolliffe, 1839, 6 My. & Cr. at p. ' formauoe of parol contracts' and its 177. history. EEI INTEKVENTUS — PART PERFOEMANCE 33 The doctrine does not avail where, whether writing is in evidence or Agreement not, there has been, according to general rules of contract law, no consensus ^oved^ in idem pladtum — no concluded agreement,^* certain or from subsequent oMande. circumstances ascertainable.^" The term locus poenitentioB — ^the power to resile — which is barred by rei interventus, assumes the existence of a real though insufficiently constituted agreement,^^ and not a pure nullity like a wife's bond of caution ^^ or bill at common law.^^ ■ Thus, where there was a missive of lease, holograph of the landlord and signed by him and the proposing lessee but not tested, and there had been no possession taken, either might resile, and there was no room for damages for so doing.^* Possession of a shop had continued for two years on a verbal lease which the landlord contended, and the tenants scarcely denied, to be for five years ; yet there was power in the latter to resile. ^° An improbative offer of sale of a distillery, open for two months, was accepted by holograph writing within that time. Meanwhile the offeree had been at expense of time, money, and troiible in arranging for acceptance and whether to accept. This was held not to be rei interventus either in its nature or as applicable to a completed agreement. Otherwise, if a person to whom an improbative ofier was addressed did anything to inform himself whether it would be to his interest to accept, such actings would be enough to turn the offer into a completed contract.^^ An alleged sale by word of mouth of a shop and of the stock-in-trade and goodwill was resiled from by the owner. Action against him for implement was abandoned, but the alternative conclusion for damages was insisted on. It was held irrelevant, for (a) there was no concluded contract as to the shop, and (6) there was no averment of sale of anything but the composite subject. Without proof of the agreement by oath of the owner no rei interventus could be proved ; and without proof of contract there could be no award of damages for breach.^' There was a letter offering to sell land, holograph, with an acceptance not holograph, but signed before witnesses, but the witnesses were not designed. The acceptor had also signed the offer, but this subscription also was not formally tested. All the signatures *' As to illegal agreements, see Swan v. in Sinclair v. Weddell, 1868, 41 So. Jur. Bank of Scotland, 1835, 2 S. & M'L. 67 ; 141, 5 S.L.R. 601, 664, and in Goldston Lawson v. Coldstream, 1837, 15 S. 930. v. Young, 1868, 7 M. 188. As to those in which seal is prescribed by '= Buchanan v. Baird, 1773, M. 8478 statute, see the hard case of Hoare v. (rents and certain past expenditure allowed). Kingsbury U.D.C., [1912] 2 Ch. 452. As to the effect of a custom, see Ker v. 30 Price V. Assheton, 1835, 1 Y. & C. Downie, 1670, M. 8470. Ex. 82, 441 ; Oxford v. Provand, 1868, ^i" Mowat v. Caledonian Banking Co., L.R. 2 P.C. 135. l*'^^, 23 R. 270, and cases there cited. 31 See Barr v. Turner, 1904, 12 S.L.T. " ^llan v. Gilchrist, 1875, 2 R. 587, 369 ; Fraser v. Brebner, 1857, 19 D. 401. where see an explanation of the cases 32 Primrose v. Rossyth, 1579, M. 5980. apparently contra, Walker v. Milne, 1823, 33 Balfour v. Swing, 1831, 9 S. 558. 2 S. 379 (338) ; Bell v. Bell, 1841, 3 D. 31 Sproul V. WUson, 1809, Hume 920 1201 ; Heddle v. Baikie, 1846, 8 D. 376. (there had been no actual damage, by See also Gilchrist v. Whyte, 1907 S.C. 984 ; purchasing stock, hiring servants, etc.) ; Petrie v. Forsyth, 1894, 2 R. 214 ; Stodari; Pollock V. Craie, 1763, 5 B.S. 121, foUowed v. DalzeU, 1876, 4 R. 236. 3 34 REI INTERVENTUS — PAET PBBFOKMANCE were admitted to be genuine. Yet before anything followed there was locus pomitentice — the rules of law regarding execution being ' intended ' not only to prevent forgery but also to prevent parties from being ' surprised into transactions concerning heritage, which were generally ' of moment.' ^^ Missives signed by each party to a contract of service for two years were neither holograph nor tested, and were not in re mercatoria. The proposing servant resiled before the date on which the employment was to begin. There was held to be no contract for years and, it was thought also, none even for a year.^' An offer of caution in a process of suspension was sent back for attestation — the credit of the cautioner being thought doubtful. On the suspender becoming notori- ously insolvent, the offer could be withdrawn.*" A wrote to a bank promising to endorse the acceptance of B on presentation. On B becoming bankrupt, A was held hable on his promise though there had been no presentation. But Lord Fullerton's view seems preferable, that notice should have been given in reasonable time and before the date of pay- ment.*^ A mere expression of intention, which does not come up to an obhgation, though rehed on, cannot found the plea of bar.*^ Later^formai It seems to be a question of circumstances and of the true intent of plated. the parties where there has been an understanding or express stipulation that a formal contract should be drawn up and executed, whether either party may resile until that has been done. The presumption seems to be for the affirmative on the ground that until then dehberation, on details at least, is still open. ' Where you have a proposal or agreement ' made in writing, expressed to be subject to a formal contract being ' prepared, it means what it says : it is subject to and dependent upon ' a formal contract being prepared. When it is not expressly stated to ' be subject to a formal contract it becomes a question of construction, ' whether the parties intended that the terms agreed on should merely ' be put into form, or whether they should be subject to a new agreement ■ the terms of which are not expressed in detail.' *3 Where the pursuers brought together three firms with a view to an amalgamation which did ,not come off at the time, though accomplished about three years later, 3s Park V. Mackenzie, 1764, M. 8449, " Stewart v. MitoheU, 1786, M. 2157. 5 B.S. 639. There is a similar modem " Watt v. National Bank of Scotland, case — Scottish Lands etc. Co. v. Shaw, 1839, 1 D. 827. 1880, 7 E.. 756. See also Muir v. WaUace, « In re Kckus, [1900] 1 Ch. 331 ; 1770, M. 8457, Hailes 340 ; MTarlane v. Maddison v. Alderson, 1883 8 Ap Cas 467, Grieve, 1790, M. 8459, Hailes 1080 ; 473, and oases there ; Jo'rden v Money, Montgomerie v. Brown, 1663, M. 8411. 1864, 5 H.L.C. 185; Citizens' Bank v. The case of A v. B, 1629, M. 8400, is Krst National Bank, 1873, L.B. 6 H.L. overruled by Keith v. Johnston's Tenants, 352 ; supra, p. 3. 1636, ibid. ; and by NeiU v. E. Cassillis, « Per Jessel M.R. in Winn v BuU, 22nd Nov. 1810, F.C. 40. 1877, 7 Ch. D. at p. 32 ; Eossdale v. Denny, 2" Stewart & Macdonald v. M'CaU, 1869, [1921] 1 Ch. 57, disapproving North v. 7M. 544. On the latter point see Currie w. Peroival, [1898] 2 Ch. 128 See the English M'Lean, 1864, 2 M. 1076 ; and on proof authorities in Coope v. Ridout [1921] of service generally, IVaser, Master and 1 Ch. 291; Gordon's Exrs v Gordon, Servant, 28 seq. 1918, 1 S.L.T. 407. EEI INTERVEKTUS — PART PERFORMANCE 35 and sued them for commission or damages or a quantum meruit, the arrangement was founded on an unsigned memorandum bearing that the firms would enter into a proper legal contract when prepared with the pursuers for the purpose of placing in their hands the conduct of the amalgamation. The action was held irrelevant on all the counts, and Lord Kinnear remarked : ** ' Where parties agree that their arrangements ' are to be embodied in a formal written contract to be executed, there ' is locus poenitenticB until the execution of that written document is ' completed, and either party may resile until the written instrument is ' duly executed. . . . Now the only way in which the law to that ' effect can be avoided is by rei interventus. But then there is to my ' mind no relevant averment of rei interventus at all. The only averment ' is a very general one that the pursuers and defenders acted on this ' agreement, which was treated by all parties as binding on them. That ' in itself comes to nothing. It is indispensable that specific facts should ' be alleged which in themselves are referable to the agreement.' Never- theless the presumption that the agreement is inchoate or in nudis finibus may be redargued. Where a compromise of an action of abstracted multures had been informally signed by the owner and the tenant of the Tnin and by four feuars who acted for themselves and the other persons restricted (who afterwards confirmed their act), and had been followed by payment conform, the bargain was held binding though it provided for a formal contract to be afterwards executed and none such had been executed.*^ As put in an old case, if, in an informal bargain, it was stipulated that a formal writ was to foUow, there might be locus pomitenticB \ secus if there was nothing more than an expectation.*^ The nature of the writings which satisfy the requirements of the Writsjavaii- Statute of Frauds as signed memoranda or notes of the party to be charged ^i interve^us. therewith or his accredited agent may be sought in treatises of authority.*' Scottish lawyers are amply provided with disquisitions on the authentica- tion of writs. In Scotland the best illustrations of informal writs held to be capable of being set up by rei interventus have arisen in regard to leases for years ; and beyond mere enumeration the author ventures to refer to a fuU statement to be found elsewhere.** The cases refer to some vice of authentication ; to the sufficiency or insufficiency of the authority of a landlord's agent and his actings in pursuance thereof ; to articles of roup ; to advertisements ; to drafts and copies of lease signed " Van Laun & Co. «. Neilson, Keid & Co., M. 9446; Fulton v. Johnston, 1761, M. 1904, 6 P. 644 at p. 652. 8446. " Rutherford v. Bowden Feuars, 1748, j, -^ y Specific Performance, pp. M. 8443. 225 et sea " Campbell v. Douglas, 1676, M. 8470 (a purchase of debts). The like appears " Rankine, Leases (3rd ed.), pp. 120-6. to have been assumed in OgUvie v. Stuart, Add a case in which rei interventus was not 1700, 4 B.S. 473. The authorities are more required— Williamson v. Kennedy, 1857, fully discussed in Gloag, Contracts, pp. 19 D. 443. As to sale, see Oliphaut v. 50-2. See also Broomfield v. Young, 1757, Monorgan, 1628, M. 8400. 36 EEI INTBEVENTUS — PART PEEFOEMANCE Oath on reference. Prc/ceedings not unimpor- tant. or unsigned ; *" to memoranda in estate books ; and to official com- munications to public officers.so Tbe other usual contracts come up for treatment more naturally in what foUows. Besides writ and judicial admission,^! the law of Scotland allows, as foundation for rei interventus — as proof of the informal contract which the appropriate sequels perfect, the oath on reference of the defender ^2 in a suit for specific implement. Where formal writ is normally required for the constitution of an obligation, the oath or admission is the equivalent of informal writ and requires to be supported by rei interventus. Con- sequently the oath will not be imposed unless there be competently averred such actings as would, if proved, amount to rei interventus. And the whole agreement, not a part of it requiring to be eked out by parole evidence, must be ehcited affirmative from the deponent. ^^ The oath may be used not only as in lieu of writ, but also as eluding objection to writ as being informal.^* Passing now to the more immediate subject of this chapter — the operation of rei interventus or part performance — it may be convenient to follow the order of Mr Bell's definition.^^ 1. Proceedings not unimportant. — Except in cases of fraud, where materiality does not enter,^^ the requisite of importance is universal. In one case the reme^ly sought was damages, and the action was laid partly upon the conduct of the defender, who was alleged to have pur- chased land, received a receipt for a small sum to account of the purchase price, and employed an agent to prepare a bond over the land and get a valuation. Clearly this was not rei interventus ; and the only acts said to be worthy of that name (being acts of the vendor, who maintained the validity of the sale) were the receipt of the earnest, the incurring of unspecified legal charges, and help to the defender in respect to the proposed bond. The case was thrown out on the relevancy.^' An informal minute of lease of a quarry was six moiiths later followed by a formal lease. The latter was reduced on the ground of fraud, and the tenant sought to hark back to the minute as clinched by rei interventus. *' Want of signature is noj fatal — Wares V. Duff-Dunbar's Trs., 1920 S.C. 5, can- vassing L. Jefirey's opinion in Graham v. M'Leod, 1848, 11 D. 173. ''° Receipt for rent, signed by landlord and setting forth terms of lease for years, not being the act of the pursuer, would fall under the head of homologation — infra, Chap. VI. '^ As to the latter, see Macrorie v. MacWhirter, 18th Nov. 1810, F.C. 86. =2 B. Pr. 1187; Walker v. Flint, ^' ; Gowans's Trs. v. Carstairs, ^^ ; Neill v. E. CassiUis, '^ ; Macrorie v. MacWhirter, 18th Dec. 1810, F.C. 86; Gordon v. PitsKgo, 1674, M. 8415. In Rait v. Galloway, 1833, 12 S. 131, L. Glenlee doubted the competency of oath tor th's end, and there was dubiety in the older cases, for which c/. M. 8398-9, J2736, 15169-70, with M. 15176 ; MaxweU v. Grierson, 1812, Hume 849. *^ iSemfcie— Paterson v. E. Fife, 1865, 3 M. 423; Wight v. Newton, 1911 S.C. 762 ; Downie v. Laird & Sons, 1902, 10 S.L.T. 28. " Dishington v. Soot, 1628, M. 17015; Beatie v. Lambie, 1695, M. 17021. '^ Supra, p. 29. '8 Beattie v. Ebury, 1874, L.R. 7 H.L. 102, 111, per L. Ch. Cairns ; Smith v. Kay, 1859, 7 H.L.C. 750. Fraud need not be the only inducing cause — Edgington v. Fitzmaurice, 1885, 29 Oh. D. 459. " M'Lean v. Scott, 1902, 10 S.L.T. 447 (L. Kyllachy). REI INTERVENTUS— PART PERFORMANCE 37 But his possession and his arrangements with the outgoing tenant were ascribable to the void lease alone. ' Then as regards the other actings ' the rule is that such acts can only receive effect as rei int&rventus as ' are important in their character and are either known to the other ' party or must necessarily be held to have been in the contemplation ' of that party when he entered into the agreement — actings which are ' in the proper pursuance of the agreement and which the other party ' to the agreement would naturally expect should take place in pursuance ' of it. One of these now founded on, is an arrangement made for giving ' up a business in Glasgow. That plainly was not of a kind which the ' other party to the contract could be assumed to have anticipated or to ' have knowledge of, and it is not said they had any knowledge of it. ' With regard to the engagement of a manager, I should doubt whether ' that would be an act of sufficient importance to set up a lease of this ' kind even if it had not been qualified.' ^* A correspondence down to, the date of the action passed between the proposing buyer and seller of land. The buyer entered into partial possession and set up a fence. It appeared that the parties were not agreed as to certain servitudes, but even if this objection was passed from in favour of the buyer seeking to maintain the bargain, it was held that there was no sufficient rei inter- ventus, the possession not having been given by the sellers and the ex- penditure being trivial.^^ It is doubtful whether a decision would now be repeated whereby a sale of a house ' not consummate by writ ' was perfected by the buyer getting the keys, possessing the house for a year and a half, and transacting with a neighbour about a side wall.*" On the other hand, provision by tenant to landlord, in an old case, of ' two ' fencible men ' was held enough to support informal missives of lease. *^ 2. Proceedings on the part of the Obligee. — The rei interventus founded Proceedings on on must be on the part of him who seeks to set up the agreement and to obligee. have it specifically fulfiUed. This differentiates it from the classes of personal bar which follow in this treatise.*^ It is true that the obligor or person to be charged may not be wholly passive in regard to the contract into which he has ex hypothesi entered, but his interference is regarded as incidental merely and neghgible.*^ There have been cases in which the Court has sought to discriminate. Thus, where credit had been given on the faith of an informally executed cash credit bond by payment of money to one whose signature was not well attested, the Lord Chancellor remarked : ' Although a party may not have been *« Gardner v. Lucas, 1878, 5 R. 638, "^ ggg Napier v. Dick, 1805, Hume 388. per L. Shand at p. 656. The point was There is confusion of nomenclature in not maintained in the House of Lords, Barclay v. E. Fife, 1829, 7 S. 708, and in 5 E. H.L. 105, 3 Ap. Cas. 582. National Benefit Trust v. Coulton, 1911 *' Helton V. Waverley Hydropathic Co., S.C. 544, per L.J.C. .Maodonald ; and see 1877, 4 R. 830. analogy per L. Dunedin in Smith v. «« Thomson v. Thomson, 1699, M. 8426. Oliver, 1911 S.C. 103 (' by rei interventus, " Campbell v. M'Pherson, 1793, Hume ' so to speak '), infra, p. 40. 786. "' See Caton v. Caton, ". 38 EEI INTERVENTUS — PAST PERFOKMANCE ' originally bound by the transaction which took place, yet, if he has ' so conducted himself as to homologate the bond, he shall not be permitted ' to take advantage of that objection, for, if he were, the instrument ' instead of protecting the party from fraud would be made an instru- ' ment of fraud itself. . . . This is by homologat'ion, which is more ' strictly applicable to this case than rei interventus.' ** It appears to have been a case of homologation rather than of rei interventus, where a landlord of a pubUc-house was held entitled to hold his tenant to an ex- tension of his lease for a year by informal letters, on the ground that the latter had apphed for renewal of the licence and thus prevented the land- lord letting elsewhere. *5 But the acts of the defender may not be without significance in a true case of rei interventus. Where a draft lease founded on as writ bound the proposing tenant to take down certain ruinous cottages, so that the landlord might use the materials for building .dykes, and the tenant did her part, and maintained her right to the farm, it was remarked : ' Although the act of the landlord following ' upon that is not rei interventus in this question, in which the claim is ' made by the tenant against the landlord, yet the circumstance of his ' proceeding to follow up what the tenant had done in terms of the ' contract of lease makes it demonstrably clear that he saw and recognised ' what had been done by the tenant as an act done by her in pursuance ' of this contract of lease.' ** Known to and 3. Proceedings known to and permitted by the Obligor. — This, requisite the obligor. Ues at the root of the personal bar, for it is the conduct of the defender or person sought to be charged with the contract or obhgation in ' stand- ' ing by ' or ' lying by ' and permitting or encouraging the acts or absten- tions of the pursuer of an action for implement, that precludes the former from taking advantage of an imperfection in the constitution of the contract or obligation ; and this necessarily assumes his knowledge of what has been or is being done or left undone."" This is so on both sides of the Tweed, and therewithal there is the further step, that the knowledge and permission of his agent, quaUfied to act for him in the matter in question, may be imputed to the principal or fix him with liabihty. The former doctrine is obvious and is latent or assumed in all the cases. It holds in the sense that knowledge is assumed, where that is part of the bargain. Thus in caution and in regard to cash credits and letters of credit (which may not be privileged as being in re mercatorid) the guarantor who has «' Per L. Ch. Cottenham in Hamilton v. explicable either way — of marriage follow- Wright'sTra., 1838, SSh. &M'L. atpp. 135, ing on marriage contract— e.j. Muir v. 136. See the fm-ther remarks on rei inter- Crawford, 1628, M. 17014 ; Nisbet v. ventus, supra, Y. 30, a.nd infra, Y- 4S. The Newlands, 1630, M. 17016; Braidy v. creditor had paid (rei imieraewtes), the debtor Braidy, 1662, M. 17018. had received (homologation), on faith of '^ station Hotel, Nairn v. Macpherson, the bond ; and the latter was thought here 1905, 13 S.L.T. 456. See Graham v. to be the decisive bar. See Church of Gowans, 1792, Hume 784. England Insurance Co. v. Wink, 1857, 19 D. «6 Per L.P. Inglis in Bathie v. h. 1079 ; National Bank of Scotland v. Camp- Wharncliffe, 1873, 11 M. at p. 496 bell, 1892, 19 R. 885. See also eases— «' See Gardner v. Lucas, supra, *'. REI INTERVENTUS — PART PERFORMANCE 39 issued an informal writ cannot object to its being clinched by being acted on, merely on the ground that he has had no antecedent notice of the acts.** Difficulties have frequently arisen where title depends on the records, and a conjunction of an imperfectly instructed agreement and rei interventus is sought to be established against a singular successor of the obHgant. The rule is thus put by Lord GifEord : *' 'A singular ' successor is entitled to be free from the personal obligations of his 'predecessor and to take the subject unaffected by any burden not ' appearing on the title or on the records. But the singular successor ' has only this right, if he was in ignorance of the existence of any obhga- ' tions or deeds granted by the seller relative to the subject and if he was ' in aU respects a bona fide purchaser without notice of any right in any ' third party or of any circumstances imposing a duty of inquiry.' In that case a contract to give and take a feu was entered into by word of mouth, but was vouched by receipts for feu-duty eo nomine, the earliest of them being holograph of the alleged superior, and was followed by the erection of buildings and the making of other improvements by the alleged feuar. The former sold to a third party, and the question was whether the purchaser had bought the land untrammelled or only a superiority. The latter alternative held ; for he knew of the alleged feuar's occupation of the land for many years on some sort of right, and was therefore put on his inquiry as to the nature thereof and barred from impugning it. It may be added that if there had been no rei interventus he might have pleaded with success that he knew of the claim to the land, but also knew that it was bad.'" But, as put by the same judge in another case — one of double sale of land, and in regard to the position of the second purchaser : '^ ' He must have full and adequate knowledge ' of the prior purchase, not a mere suspicion or hearsay knowledge of it. ' The right of the first purchaser must have been intimated to him, or ' something equivalent thereto, or the relation of the parties must be ' such as to make it the duty of the second purchaser to communicate ' with the first purchaser, so as to give him an opportunity of completing ' his title under his bargain.' '^ This is succinctly put by Mr Bell in his Commentaries,''^ in words which have been held '* to explain or modify his statement in his Principles, thus : ' The knowledge of the party, who ' is imperfectly bound, that the other is proceeding on the faith of the ' agreement is a necessary ingredient in the plea of rei interventus ; and «8 Johnston v. Grant, 1844, 6 D. 875 ; M. 15177 ; oases in M. 1689-96 ; Lang v. National Bant of Scotland v. Campbell, Dumbarton Mags., 29tli Jime 1813, F.C. 1892, 19 B. 885. 412 ; Girdwood v. Paterson, 1873, 11 M. at «» In Stodart v. Dalzell, 1876, 4 R. 236 p. 651 ; Marshall v. Hynd, 1828, 6 S. 384 at p. 242. (' put on his inquiry '); Morrison J). Somer- '» As to which, see Leslie v. M'Indoe's ville, 1860, 23 D. 232. And see Calder v. Trs., 1824, 3 S. 48. Stewart, 1806, Hume 440 ; and in England " Per L. Gifford in Petrie v. Forsyth, notes to Le Neve, 2 Wh. & T. L.C. 1874, 2 R. 214 at p. 225. " 1 B.C. 346 ; B. Pr. 26 ; supra, p. 29. " See also Gariooh v. Forbes, 1750, " In Johnston v. Grant, supra, ^K 40 RBI INTEEVENTUS — PART PERFORMANCE ' this, either actual knowledge, or knowledge to be impUed from circum- ' stances necessarily leading to the probabiUty of loss, without any means ' taken to prevent it.' The law is the same in England.'^ Knowledge of That a principal in such cases may be fixed with the knowledge, *^^°*'- real or assumed, or the means of knowledge of his agent, authorised to bind him in the transaction in question, is abundantly illustrated both in Scotland '* and in England." On the faith of 4. Proceedings mi the Faith of the Contract as if it were perfect.— This the contract. ^^^^ ^^ ^j^^ definition of rei interventus or part performance imports that the completed, though informal, contract has preceded the actings, or the refraining from actings, which have taken place in pursuance of it. If these have been merely preparatory to an anticipated engagement they cannot be said to have intervened on it. It has been already pointed out '8 that a promise by word of mouth to enter into an engagement such as would be valid only if estabhshed in writing or by oath on reference or judicial admission, on which promise important things have been done or left undone, cannot by these be reared up into an enforceable engage- ment. Thus, while a promise to make a will or bequest may, if properly instructed, be binding on the promisor or his representatives," it is otherwise with a verbal promise, and ' a party cannot turn what is a mere ' promise into a contract, so as to be allowed to prove it by parole, by " simply swearing that on the faith of the promise certain things were ' done by him ; that is to say, he cannot turn a promise into a contract ' by rei interventus, so to speak.' *" But preparatory acts may be relevant where they are done by one already in possession (for example, as a sitting tenant) and relying on an informal agreement for a lease for years. '^ It is the same in England. Where there was an agreement in parol, as a condition of granting a lease, that the proposing lessee should relieve " Wills!). Stradling, 1797, 3 Ves. Jr. 378, '« Supra, p. 37. per L. Loughborough. As to the know- " Paterson v. Paterson, 1893, 20 R. ledge of the remainder-man of what life 484 ; Mackenzie's Trs. v. Kilmarnock's tenant does, see Blore v. Sutton, 1817, Trs., 1909 S.C. 472, 477. Qu. whether 3 Mer. 237 ; Morgan v. Milman, 1853, 3 the writing must be holograph or tested — De G. M. & G. 24, per L. Ch. Cranworth ; Hallet v. Ryrie, 1907, 15 S.L.T. 367. See Shannon v. Bradstreet, 1 Sch. & Lef. 72 a case in which rei interventus was not (Irish case) ; Trotman v. Flesher, 1861, equivalent to delivery of a deed of gift — 3 Giff. 1. Anderson v. Robertson, 1867, 5 M. 503. " E.g. Forbes v. Wilson, 1873, 11 M. so Smith v. Oliver, 1911 S.C. 103, per 454 ; Campbell v. Robertson, 1797, noted L.P. Dunedin at p. 40, following Millar v. in Hume 849 ; D. Gordon v. Carmichael, Tremamondo, 1771, M. 12395. The sequel 1800, Hume 805; Sellar v. Alton, 1875, to Smith's case is at 1911, 1 S.L.T. 451. 2 R. 381 ; Ogilvy v. Ramsay, 1802, 1 Bell, See also Boyes v. Dinwoodies, 1800, Hume Leases, 508 ; Craig v- Bell 1871, 10 M. 8 ; 910 ; Mowat v. Caledonian Banking Co., Arbuthnot v. Reid, 1804, Hume 815 ; supra, p. 33 ; Edmonston v. Edmonston, BeU V. Goodall, 1883, 10 R. 905 ; Suther- 1861, 23 D. 995. Contrast Buchanan v. land's Tr. v. MiUer's Tr., 1888, 16 R. 10 ; Buchanan, 1775, M. 17051. Sinclair v. Caithness Flagstone Co., 1880, ^^ Pratt v. Aberoromby, 1858, 21 D. 7 R. 1117, aff. 8 R. H.L. 78. 19 ; Murdoch v. Moir, 18th June 1812, E.G. " See Fry, Specific Performance, pp. 692 ; Hodson v. Heulaud, [1896] 2 Ch. 428 ; 234 seq., as to'agent signing. Pain v. Coombs, 1857, 1 De G. & J. 34. EEI INTEEVENTUS — PART PERFORMANCE 41 the premises of an encumbrance, and he did so, specific performance by granting the lease to him was refused.*^ Similarly, relief has been denied where all that was done was to- put a deed into the hands of a solicitor to prepare a conveyance,*^ even though the party maintaining the alleged contract has so far acted on it as on several occasions to view the estate ; ** and even though he had registered the conveyance, as was required in Middlesex, signed by him alone. *^ Still less effective is the appropriation of money with a view to purchasing.*^ On the other hand, where no agreement for a lease was signed, but a draft was prepared for the lessor, approved by the lessee with alterations, altered by the lessor, and the terms finally accepted by the lessee, who possessed and made repairs according to the tenor of the draft, it was held that the parties had passed from negotiation into binding contract.*' 5. Proceedings unequivocally referable to the Agreement. — There are Unequirocaliy . . . . . referable to many illustrative cases in both countries. Thus, in Colquhoun v. Wilson's the agreement. Trs.,^^ a tenant in an unexpired lease offered to take a feu of the subjects and others. Accepttoce followed, subject to certain conditions, never expressly conceded in writing. The offerer proceeded to make such alterations as could only be justified by the existence of a completed agreement of feu. Lord Justice-Clerk Inglis remarked : ' It is a well- ' known principle of our law that such a conditional acceptance may be ' made pure, and the contract incomplete in itself may be made effectually ' binding upon both parties rei interventu. . . . The only question is ' whether the rei interventus was such as can reasonably be ascribed only ' to the relations created by what the parties intended and considered ' to be a completed contract of sale. ... I think it is equally un- ' intelligible that [the alleged vendor] should have permitted* and ac- ' quiesced in the proceedings of [the alleged purchaser] except upon the ' footing and understanding that he parted with the estate formally ' and finally.' The representatives of the latter were bound to enter into a formal feu-contract on the agreed conditions, on the conditions usually inserted in such contracts, and on any other conditions subsequently 82 O'Reilly v. Thompson, 1791, 2 Cox «« East India Co. v. Moodelly, 1851, Ch. 271. See Maddison «. Alderson, SMyra. 7 Moo. P.C.C. 482, 498. ^'f^'i, AA- wii 17Q1 1 T*.„ rn " Shillibeer v. Jarvis, 1856, 8 De 6. 8* Reddmg «. Wilkes, 1791, 1 Bro. C.C. ^ ^ p 70 07 400, and see Cox v. White at 1 Br. C.C. '^'- ^ ^- '^' "'• 409 ; Cooke v. Tombs, 1794, 2 Anst. 420 »« 1860, 22 D. 1035. The case is the (both gave instructions to their sohoitors). converse of the class of case elsewhere "* Clerk «. Wright, 1737, 1 Atk. 12. treated in this chapter, but the dicta '^ Hawkins v. Holmes, 1721, 1 P. Wms. quoted apply generally. The interlocutor 770. See also obs. by Knight- Bruce speaks of ' acts of ownership being un- V.C. in Parker v. Smith, 1845, 1 CoU. at 'equivocally referable to the contracts of p. 624 ; Phillips c Edwards, 1864, 33 ' feu.' Lord Benholme thought, in agree- Beav. 440, where it was said that the ing with the Lord Justice-Clerk, that doctrine of parol agreements and part additional conditions might be gathered performance should not be extended, from the conduct of the parties subsequent Whaley v. Bagnal, 1765, 1 Bro. P.C. 345, to the rei interventus ; and this appears in has no analogue in Soots practice. the interlocutor. 42 EEI INTBRVENTUS — PART PERFOBMAJSTCE agreed on.s^ In a case of a draft lease, the same judge observed : ' It ■■ is indispensable to the constitution of a lease in this way for a term ' of years not only that the writing which proves the lease should be ' perfectly distinct and clear and be the writing of the party against ' whom it is used, but also that what is called the rei interventus has ' a sufficiently clear and distinct relation to the terms of the said ' contract.' '" Or, put negatively, rei interventus can never be founded on where the proceeding ' is positively averred to have no reference to ' or connection with the improbative and disavowed writing which it is ' alleged to make effectual.' ^^ In a case where the dicta were ohter, Lord Justice-Clerk Patton put the present point thus : ' The whole ' efficacy of the rei interventus, where it has application, Ues in this, that ' acts are done which are only referable to, and caimot be explained ' except by, the assumption of a previous agreement. . . . What was ' done was exactly what we should expect to find done by every ' improving tenant.' '^ Similar statements of the law may be quoted from the English reports : ' A party, who has permitted another to perform acts on the faith of an ' agreement, shall not insist that the agreement is bad, and that he is ' entitled to treat those acts as if it had never existed. That is the ' principle ; but the acts must be referable to the contract . . . ' Between landlord and tenant, when the tenant is in possession at the ' date of the agreement and only continues in possession, it is properly ' observed that in many cases that continuance amounts to nothing, ' but admission into possession haviag unequivocal reference to contract ' has always been considered as act of part performance.' '^ Again, in a case where it was held that there was no contract to make a will ia favour of a housekeeper who had given up other prospects and served without wages for many years. Lord O'Hagan laid it down : ' There is ' no conflict of judicial opinion and in my mind no ground for reasonable ' controversy as to the essential character of the act which shall amount ' to a part performance in one particular. It must be unequivocal. It ' must have relation to the one agreement reUed upon and to no other. '» See other cases in which the landlord Robertson v. Lawson, 1874, 12 S.L.R. 11 ; maintained the contract — Skeen, 1637, M. Skelton v. M'Laren, 1816, Hume 106. 8401 ; Sutherland v. Hay, 1845, 8 D. »a Philip v. Gordon Cumroing's Exrs., 283 ; Carruthers v. Thomson, 1836, 14 S. 1869, 7 M. 859 (damages. The writ and 464, 491 ; Station Hotel, Nairn, supra, "*. the verbal agreement founded on were 0" Bathie V. L. Whamcliffe, 1873, 11 M. "consistent. The rubric is misleading). at p. 495; GricYe .. Pringle, 1797, M. See also per L. Cullen in Semple's Exrs. ». 595]^ bemple, supra (whole alleged contract not proved and rei interventus not referable '1 Per L. Jeffrey in Graham o. M'Leod, to it). 1848, 11 D. 175 (see p. 36 «Mj)ra); Gardner u. o^ Per Plumer M.R. in Morphett v. Lucas, «». SeealsojperL. CulleninSemple's Jones, 1818, 1 Swanst. at p. 181. Cf. Exrs. V. Semple, 1912, 1 S.L.T. 382, who Powell v. Lovegrove, 1856, 8 De G. M. & G, held also that the whole contract must be 357 (option exercised) ; Price v. Salusbury properly averred, not merely a part; and in H.L., 1863, 14 L.T. N.S. 110, per L. M'Lean v. Richardson, 1834, 12 S. 865; Chancellor. EEI INTERVENTUS — PART PERFORMANCE 43 ' It must be such, in Lord Hardwicke's words,^* " as could be done ' " with no other view or design than to perform that agreement." It ' must be sufficient of itself, and without any other information or evidence, ' to satisfy a Court, from the circumstances it has created and the relations ' it has formed, that they are only consistent with the assumption of the ' existence of a contract, the terms of which equity requires,- if possible, ' to be ascertained and enforced.' ^^ It was accordingly held that, though the long service was consistent with the claim, it was not demonstrative of it. The illustrations of this requisite are culled from many departments of the law of contract. In Scotland the modern doctrine regarding proof of caution, guarantee, Caution. and reUef is to be sought in what may survive of earlier rules of the common law ^^ and general statute regarding the authentication of writs on the one hand, and on the other in the following enactment, which was preceded by a preamble setting forth the inconvenience felt by persons engaged in trade byreason of the laws of Scotland being in some particulars different from those of England and Ireland, and the expediency of amending the former : — VI. Prom and after the passing of this Act," all guarantees, securities, or cautionary ohligations made or granted by any person for any other person and all representations and assurances as to the character, conduct, credit, ability, trade, or dealings of any person made or granted to the effect or for the purpose of enabling such person to obtain credit, money, goods, or postponement of payment of debt or of any other obligation demandable from him shall be in writing and shall be subscribed by the person under- taldng such guarantee, security, or cautionary obligation or making such representation and assurances, or by some person duly authorised by him or them [sic], otherwise the same shall have no effect. The English law rests on the section of the Statute of Frauds printed above ^^ and on the following enactment of Lord Tenterden's Act : — '* VI. No action shaU be brought whereby to charge any person upon or by reason of any representation or assurance made or given concerning or relating to the character, conduct, credit, ability, trade, or dealings of any other person to the intent or purpose that such other person may obtain credit, money, or goods upon [«ic], unless such representation or assurance be made in writing signed by the party to be charged therewith.^"" " In Gunter v. Halsey, 1739, West T. Mercantile Law Amendment (Scotland) Hard. 681, 25 E.B. 1147 ; Lindsay v. Lynch, Act. 1804, 2 Sch. & Lef. 1, 8 ; Wills v. Stradling, »» P. 29. 1797, 3 Ves. Jr. 378. °' 9 Geo. IV. c. 14. The Statute of >5 In Maddison v. Alderson, 1883, 8 Ap. Frauds Amendment Act, 1828. The mis- Cas. at p. 485. See also L. Ch. Selbome's chief amended may be traced in Pasley v. remarks in the same case, supra, p. 32. Freeman, 1789, 3 T.R. 51 ; Lyde v. Barnard, The words quoted in the text were adopted 1836, 1 M. & W. 101. by Kekewic'h J. in Hodson a. Heuland, "» The Act of 1856 (19 & 20 Vict. o. [1896] 2 Ch. at p. 433. 9'?)> which, in return for certain exports of '« As to implied consent of partners, see English and Irish law into Scotland, imports Buchanan v. Dennistoun, 1835, 13 S. 841. certain Scottish rules, does not deal with " 1856 ; 19 & . 20 Vict. c. 60. The the present subject. Acts, 44 REI INTEEVENTUS — PABT PERFOEMANCE There has been much speculation as to whether the assimilation thus attempted has been successful in every respect."^ In so far as the present chapter is concerned, it may be permissible to refer to the Scottish text- books for ampler treatment of the problems regarding proof of caution in the wider sense of that word, and indicate briefly the possible question now in hand. The history appears to be as foUows."^ (1) An obligation or contract of guarantee, caution, or relief was originally consensual and proveable by parole."^ (2) This continued to be so down to 1856 where the matter was in re mercatorid, and perhaps where, though not so, the caution was- given accessorially to a bargain proveable by parole."* (3) In regard to all other such obhgations and contracts the rule came to be to demand not only writing on the part of the obligant or his duly authorised agent, but also that the writing should be tested or holograph — the rigour of the rule being relaxed by the alternative of oath on reference ^"^ or informal writ followed by rei interventus. (4) Then came the provision in the Scottish Act of 1856 printed above. Scope of the It has been mooted that the preamble (now omitted in the Eevised Statutes, but nevertheless still available in explanation of the enactments) limits the scope of the clause to mercantile caution and guarantee. But this would appear to be an inadmissible use of the preamble, looking to the unambiguous universality of the terms of the section.^"^ It seems the better view, therefore, that the clause strikes at both mercantile guarantees and ancillary assurances. Again, it may be here suggested that nothing turns in practice upon the difference between the with- holding of remedy in England and in Scotland on an obligation which does not satisfy the statute. Lastly, it is submitted that writing subscribed (in the Scots provision) must, in the interests of assimilation, be read (a) as meaning writing signed as in the English statutes, or at least as writing undersigned, exclusive of the more irregular forms of authentication which have been admitted in English practice, and (6) as not requiring normally in Scotland holograph or tested writ — the analogue of sealed deed in England. V "1 The difficulties have been acutely "^ ggg 1 B.C. 507, note (7th ed.). canvassed in the 7th ed. of Bell's Com- i»« Dickson, Evidence, § 602 ; B. Pr. mentaries, I. 402 seq., note ; and in Gloag 249 ; Rhind v. Mackenzie, 20th Feb. 1816, and Irvine, Rights in Security, pp. 714 F.C. 99 ; Campbell v. M'Lauchlan, 1752, seq. They were merely glanned at in M. 12286 ; Campbell v. Monro, 1815, Snaddon v. London, Edinburgh, and Hume 106 ; Park v. Gould, 1851, 13 D. Glasgow Ass. Co., 1902, 5 F. 182 (whether 1049. signature requires to be witnessed ; see esp. '°* See this discussed in Devlin, supra, per L. KyUaohy) ; Royal Bank of Scotland where, however, the relief was not accessory V. Greenshields, 1914 S.C. 259 (whether but a principal obligation, verbal representations by agent of bank to ^"^ As to which see Welsh v. Ker, 1823, a proposing guarantor were struck at by 2 S. 126 ; Porteous v. M'Beath, 1812, the Scots statute of 1856). A verbal Hume 98. And on locus pmnitentice till obligation of relief of a guarantee (which then — Wylie & Lochhead v. Hornsby, 1889, is itself a guarantee) was apparently 16 R. 907. assumed to be outwith that statute in ^"^ As to which see per L. Watson in Devlin v. M'Kelvie, 1915 S.C. 180 (sed Clydesdale Bank v. Patou, [1896] A.C. 390, 23 R. H.L. 26. REI INTERVENTUS — PART PERFORMANCE 45 On the assumption that the last view is unsound, and that the law of Bei inurvmtus evidence in regard to certain obUgations in Scotland here obtains, Scottish '" <=aution. cases, in which rei interventus has been pleaded, may now be briefly noticed. 1"' The most elaborate decision is in the Church of England Life and Fire Assurance Trust and Annuity Co. v. Wink (or Hughes) ^"^ — where a bond of caution signed by the principal debtor and by the cautioners, but improbative as to the latter, was set up by rei interventus. It was an BngUsh deed sent down to Scotland to be executed and sent back as executed. It was acted on by money being advanced on the faith of it.i"^ The main question was whether the cautioners were bound though they had no notice of advances being made, and it was solved against them on the ground that their signature was a roving authority.^'^'' In the National Bank of Scotland v. Campbell ^ the Bank drew a formal letter of guarantee and sent it to the debtor — who thus in hac re became its agent ; he sent it to the proposing guarantor, who signed but not before witnesses, and sent it to the debtor, who got two persons to sign as witnesses, and sent it to the Bank, which advanced the whole sum contemplated. The Lord Ordinary thought it could not be assumed that the debtor would thus issue a forgery, and held the guarantor not bound. But his judgment was reversed on the ground, as put by Lord Adam, that there was no proof of any stipulation by the guarantor that the document should not be issued till he had acknowledged his signature, and that the Bank might have acted on his signature, even if it knew of the informality, trusting to the doctrine of rei interventus. ^'^'^ It follows from what has been already said that that doctrine does not hold with regard to prior debt in so far as positive actings of the creditor are concerned. But it appears to be the better view, regarding both prior and subsequent advances, that the rei interventus may well be negative, e.g. by refraining on faith of the informal obhgation to take proceedings or to do dihgence, the result of the abstention being proveable loss. A 1"' The older cases are Crichton v. Syme, bond narrated the advance as already 1772, M. 17047 ; Wallace v. Wallace, 1782, made. M. 17056 ; Edraonston v. Lang, 1786, "" See supra, p. 40, as to knowledge, M. 17057 (overruled) ; Brown v. Campbell, and L.J.C. Hope's criticism of B. Pr. 26, 1794, M. 17058 ; BaUour v. Thomson, corrected in I B.C. 329, thereanent at pp. 1806, Hume 94 ; Paterson v. Wright, 31st 1085-6. The same in Johnston v. Grant, Jan. 1810, F.C., aff. 6 Pat. 38 ; Manderson 1844, 6 D. 875. See also Watt v. National V. M'Minn, 1802, Hume 90 ; Douglas v. Bank, 1889, 1 D. 827 ; Ewing v. Wright, aapperton, 1809, Hume 105 ; Trotter v. 1808, M. Letter of Credit, Appx. 1 ; Lyon Martyr, 1817, ibid. ; MiUer v. Dott, 1814, v. Butter, 1841, 4 D. 178. As to the proof ibid. ; Dunmore Coal Co. v. Youngs, 1st of the advance in Johnston's case, see Feb. 1811, F.C. 169 ; Robertson & Co. v. Grant v. Johnston, 1844, 7 D. 390. GaUoway & Reid, 1821, 1 S. 204 ; Taylor v. "^ 1892, 19 R. 885. Simson, 1836, 14 S. 935 ; Tweedie v. "^ On the question of all bound or none M'Intyre, 2 S. 361. Shirra v. Douglas, in case of a pluraUty of intended cautioners, 1798, M. 'l6946, may be doubted. see Gloag, Contracts, pp. 201-3, and 1°' 1857, 19 D. 414, 1079 ; supra, p. 38. especially as to the effect of rei interventus : See also Martin v. Wingate, 1828, 6 S. 859 ; Macdonald ■«. Stewart, 5th July 1810, F.C. Stirling v. Ker, 1830, 8 S. 911. 736 {sed qumre) ; Blair v. Taylor, 1836, i"» It was held immaterial that the 14 S. 1069. 46 REI INTEEVENTUS — PART PERFORMANCE doubt as to this was first raised in pleadings in an early case/^^ and was shared in by Lord Gillies ii* and the first Lord Moncreiff ; ^^^ but the opinion of Lord Cockburn in Ballantyne's case that ' a mere abstinence ■ from dihgence, if it could be proved, would exclude the plea of locus ' poenitenticB as effectually as the actual liberation of a debtor ' ^^^ is supported by sound reason and competent authority.^i' But the proof would have to be pregnant.^^* And rei interventus cannot support a guarantee made by word of mouth. ^^^ Marriage. The section of the Statute of Frauds already quoted i^" has been interpreted as meaning that marriage is not part performance of a parole agreement in relation to it/^^ though acts of part performance independent of the marriage, e.g. giving up possession of property agreed to be settled, will take the case out of the statute.^^^ In Scotland marriage is rei interventus which prevents repudiation of a contract or obhgation proved by informal writ or by oath on refer- ence.123 Thus a marriage contract signed by the bride's brother-in-law, but informally witnessed, was chnched by her marriage, especially seeing that it was registered during his life.i^* In one case the bride did not sign at aU, and yet was by her marriage bound in the marriage contract signed by her father and the bridegroom. ^^^ jjj another there was a defect in the testing clause. ' I pass over the defective execution of the ' contract of marriage by the bride, for the husband executes it ; the ' two disponees execute it . . . and the bride performed her part ' by marrying her husband.' i^e g^t marriage wiU not avail to set up 1" Dunmore Coal Co. v. Youngs, "'. of part performance in L.R. 1 Ch. 137 1" InBaUantyne W.Carter, 1842, 41). 419. waa given up in the House of Lords. "5 In Johnston v. Grant, "». In Thynne v. L. Gleugall, 1848, 2 H.L.C "« As to which see M'NeiU v. Black, at p. 158, there was no completed contract. 1814, Hume 103 ; Chaplin v. Allan, "« As to return to cohabitation on terms of '" Douglas V. Clapperton, 1809 ; Trotter continued annuity to wife, see Webster v. V. Martin, 1817, Hume 105 ; Tweedie v. Webster, 1854, 4*De G. M. & G. 437. M'lntyie, 1823, 2 S. 361 ; Taylor v. Simson, "i Ungley w TJngley, 1877, 5 Ch. D. 887 ; 1836, 14 S. 935 ; Sutherland's Tr. v. Surcome v. Pinniger, 1853, 3 De G. M & g' Miller's Tr., 1888, 16 R. 10 ; M'Kenzie v. 571 (improTements also made) • Prole v British Linen Co., 1881, L.R. 6 Ap. Cas. Soady, 1859, 2 GifE. 1 ; Laver v. Fielder, 82, 100 ; Simm v. Anglo-American Tele- 1862, 32 Beav. 1 ; Syuge v Svnse 118941 graph Co., 1879, 5 Q.B.D. 188, 211. 1 Q.B. 466 (damages sought) • CoVerdale "8 Dunmore Coal Co., "', and Bell's v. Eastwood, 1872, L.R. 15 Eq. 121 (father Creditors there. after promise to daughter re-marrying). "» Clackmanan v. Nisbets, 1624, 1 B.S. "^ See old cases in M. 5681-3. 130, was probably never sound law. It was "4 m^^ „ Crawford, 1628, M. 17014 ; repudiated by the majority in Chaplin v. foUowed in Nisbet v. Newlauds, 1630 m' Allan, 1842, 4 D. 616, and superseded by 17016 ; Braidy v. Braidy, 1662, M. 17018 ■ the Act of 1856 (supra, p. 43) and by the Lang v. Lang's Trs., 1889, 16 r' 590 ' H.L. judgment in Clydesdale Bank w. Baton, "= Tod (Wemyss) «. ' Wemyss ' 1790 f".""- M. 9174, 6451. See as to a forgery,' figured Supra, p. 29. by L. Gillies in Palconar v. M'Leod 1830 121 Dundas v. Autens, 1790, 1 Ves. Jr. 8 S. 312. The rule was assumed in Bushbv 196; Hammersley v. De Biel, 1845, 12 v. Renny, 1825, 4 S. 110; and by L CI. & E. 45 ; Warden v. Jones, 1857, 23 Glenlee in E. Eife v. Duff 1825 4 S 'i^f; Beav. 489 ; 2 De G. & J. 76 ; Caton v. i=a p,, l. ch. Brougham in Kibbles v Oaton, 1867, L.R. 2 H.L. 127. (The point Stevenson, 1831, 5 W. & S. at p. 560. REI INTEEVENTUS — PART PERPOEMANCE 47 a mere jotting of money terms proposed by the bridegroom and never accepted by or for the bride.^^' Purther illustration may be derived from cases of sale and f euing of Sale and feu. heritage. A public-house was sold by dupUcate missives, signed by both parties and written by a third person. The seller warned out the sitting tenant and the purchaser let to a new tenant who failed to get a licence. The purchaser sought to resUe on account of defective execution, but was held to his bargain by the rei interventus.^^^ Where part only of the terms of a sale of land was formally instructed, objection to the formality of the rest was eHded by the actings of the purchaser, as by paying the price and taking possession. ^^^ In Foggo v. Hill ^^° A sold land to B, who entered, paid the price, and made improvements, but the missive of sale was informal. Many years later A's son sold the land to C, both of them well knowing of the earUer transaction. The second sale was reduced as fraudulent, and not only the meUorations but also the payment of the price were treated as rei interventus proveable by parole. Lord FuUarton, in an elaborate judgment, explained an old case ^^^ in which there was no writing, but money was partly paid and partly consigned tiU the payer should get a disposition of the land on which an encum- brance had lain. These actings were held to be rei interventus, barring repudiation of the sale. There was no question as to the passing of the price. The real question was as to the footing on which it passed, that is to say, the nature of the transaction, which, it was held, being heritable, could only be proved by writ or oath ^^^ — the bargain having been merely a verbal ' communing.' Where, as in the law of partnership from the earhest times, and in Partnership, the law of master and servant ^^^ in modern times, it is impossible to obtain decree ad factum prestandum or for specific performance, a mulct of damages takes its place. Thus damages were awarded for refusal to carry out a three years' contract of copartnery, reduced to writing, engrossed, but not signed. The acts of part performance were taking an ofB.ce on lease, contracting for the decoration thereof, printing stationery for the firm, and (perhaps) hiring a telephone. ^34 ^ contract between Service. master and servant, stipulated for more than a year, must in England 1" Campbells u. M'Glashan, Sth June 12365. In L. FuUarton's op., 2 D. 1334, 1812, F.C. 669. ' Maxwell,' where it first occurs, should be "« Stewart v. Bums, 1877. i R. 427 ; ' Lawrie.' Colquhoun «. Wilson's Trs., supra, p. 41 ; 132 A footing of tolerance for nearly and see Smith v. Marshall, 1860, 22 D. forty years, without payment of rent, was 1158. proved by improbative missive in Nicolson "8 Parker v. Izat, 1803, Hume 915 ; ■"■ Swaney, 1804, Hume 920. cf. Rutherford v. Rutherford's Trs, 1808, laa ^f, to the tenure of apprenticeship, Hume 919 ; E. Kinghom „. Hay, 1674, see 38 & 39 Vict. 0. 90, s. 6. M. 5414 (manufacture of vote. It was „, ^^^^^ ^ Melladew, 1903, 19 T.L.R. really a case of homologation). 273-under the Statute of Frauds. In "° 1840, 2 D. 1322. Scotland the contract would be proveable "1 Lawrie v, Oraiok, 1697, M. 8425, prout de jure. 48 REI INTEEVENTUS — PART PEREOKMANOB be instructed by signed writing/^^ and in Scotland must be constituted by probative writ or writs, or proved by informal writ or by oath each followed by rei intenenttisP^ Until this is done there is locus 'pcmitentiw}^'' Alteration of 6. Proceedings productive of Alteration of Circumstances, Loss or posi ion. Inconvenience, though not irretrievable. — This part of the Scots definition points to that alteration in the position of the party maintaining the contract which is essential to the conception of personal bar and estoppel.i^' The benefit of the other party is not of the essence : ' The definition of ' that which is necessary to constitute rei interventus is not the benefit ' which the one party may have received, but the injury to which the ' other party may be exposed by his conduct if that contract is not held ' to be binding.' ^^' The alteration need not be active ; resting satisfied is enough. A party is entitled to plead : ' I abstained from active ' measures in consequence of your statement, and I am entitled to hold ' you precluded from denying that what you stated was true.' ^^° In sale i*^ it is doubtful whether payment of the price or part of it — by way of arles or earnest — does of itself in either country estabUsh rei interventus or part performance (in the sense of this department of the law), with the result of barring repudiation of the contract. In England a negative reply is aided by the contrast between section 4 "^ of the Statute of Frauds and section 17, which is now superseded by the 4th section of the Sale of Goods Act 1893 ; ^^ but it is independently estabUshed. The reason is that there exists a sufficient remedy in restitutio in integrum, at least in cases where the whole consideration has not been paid,!** a^Q^ Ijj]^^^^ ^j^g payment is equivocal."^ The same reasoning ^'^ Statute of Frauds, supra, f . 29 ; see ^'' Per L. Ch. Cottenham in Hamilton Elliott V. Roberts, 107 L.T. 18 ; Hanau v. v. Wright's Trs., 1838, 3 Sh. & M'L. at Ehrlich, [1912] A.C. 39, and cases there. p. 139, approving the opinion of L.O. "« Napier v. Dick, 1805, Hume 388 ; Corehouse at 14 S. 326. And see a case Cadell V. Sinclair, 1749, M. 12416 ; Rymer of absence of loss — Alloa Mags. v. Wilson, V. M'Intyre, 1781, M. 5726, Hailes 887 ; 1913 S.C. 6. Grant v. Ramage & Ferguson, 1897, 25 no pg^ l Blackburn in Knights v. R. 35 ; Neil v. Vashon, 1807, Hume 20 ; Whiffen, 1870, L.R. 6 Q.B. at p. 666. Robinson «^ Smith iWd ;Paterson v. 141 The question in England whether Ehngton & Sons 1830, 8 S 931 ^he doctrine of part performance extends , Z ! r^'n * Maodonald .. M CaU, 1869, ^.^ ^^ „,^^^ concerning land is treated in nnf« m' ^™w"..f. T',/i '. t*^- ^^y- 5th ed., p. 298; and see Prested 1076 ; Murray . M'Gilchnst, 1863 4 Irv. Miners' Co. .. Garner, [1910] 2 K.B. 776, 461, 466 (per L.J.C. Inglis) ; Gow v. g ng^^-, ^ j^- g ^35 M'Ewan, 1901, 8 S.L.T. 484 (service con- ^j ^^^ oq sistent with tenure for a year) ; Young u. ^ "'' "' Scott, 1864, 4 Irv. 541 ; Reuter v. Douglas, "' ^^ & 57 Vict. u. 71. 1902, 10 S.L.T. 294. See as to a question "* Clinan v. Cooke, 1802, I Sch. & Lef. between service and agency, Pickin v. ^t ?• 40, per L. Redesdale ; Watt v. Evans, Hawkes, 1878, 5 R. 676. And as to limi- 1834, 4 Y. & C. 579, per L. Lyndhurst ; tationsoftherule,yerL.Stormonth Darling Britain v. Rossiter, 1879, 11 Q.B.D. at in Brown v. Scottish Antarctic Expedition, P- 130, per Cotton L.J. And see Buok- 1902, 10 S.L.T. 433. master v. Harrop, 1807, 13 Ves. 456 ; "8 See the English definition, supra, Hughes v. Morris, 1852, 2 De G. M. & G. pp. 2, 3 ; Forbes v. Welsh & Forbes, 1894, at p. 356, per Knight-Bruce L.J. 21 R. 630 ; c/. Charles v. Shearer, 1900, "= Per L. Selborne in Maddison v. 8 S.L.T. 273 ; and L. Adv. v. Anderson, Alderson, 1883, 8 Ap. Cas at pp. 1895, 3 S.L.T. 115. 478-9. REI INTERVENTUS — PART PERFORMANCE 49 should hold good in Scotland, but the point is not settled."^ Permitted expenditure by the purchaser on the estate, if substantial, stands on a different footing ; ^" and it may be suggested that entry on possession may in Scotland act as clinching informal missives of sale, if the permission to enter be not of the nature of acts preparatory in view of eventual purchase."* In both countries the greatest number of illustrations of this doctrine Lease. ■ of rei interventus has arisen in the law of leases. While leases for not more than one year may be proved prout dejure}'^^ whether there has been possession or not, and whether there has been a transfer of arles {earnest) or not, there are required for the constitution of longer leases in England a solemn deed, and in Scotland a probative writ or probative writs. The alternative is in England a parol bargain and in Scotland informal writ or writs or oath on reference, or judicial admission in each country, followed by part performance or rei interventus ; ^^^ and in England a signed writ. Mere payment of rent is not enough. Nor is mere possession sufficient except where (a) it establishes the tenant's (or it may be the landlord's) acceptance of an offer of lease formal on the side of the other party ; ^^^ or (6) it iofers acceptance of an improbative offer, if the only alternative, possible or pleaded, is tacit relocation in a question with a sitting tenant.i^^ The reason is that each of these facts— payment of rent and permission to possess — -is separately, or taken together, equivocal ia the ordinary case, and may be ascribed either to the lease for years which is in question or to a tenure for a year for less.^^* Something more is thus necessary in order to establish the more enduring tenure, and this usually takes the shape of such expenditure as is alone consistent ^'■^ Lawsou V. Auohinleok, 1699, M. 293 ; Macpherson v. Maopherson, 15th 8402 ; Lawrie v. Craick, swpra, p. 47 ; May 1815, F.C. 352. And see Barron t/. Grierson v. Scots, 1699, M. 17022 ; Hamil- Rose, 1794, M. 8463. ton V. Wright's Trs., supra, i" ; and cases ^^^ Buchanan v. Harris & Sheldon, 1900, infra, p. 52. 2 F. 935; Sutherland's Tr., supra; Macfar- 1*' See cases under Lease, infra, p. 50. lane v. Mitchell, 1900, 2 F. 901 ; M'Kenzie i*« Supra, p. 36. v. M'Kenzie, 1799, Hume 801. And see "» See Cairns v. Gerrard, 1833, 11 S. Nairn Station Hotel v. Macpherson, 1905, 737 ; Pratt v. Abercromby, 1858, 21 D. 13 S.L.T. 456 ; EmsHe v. Duff, 1865, 3 19. M. 854. In England, Doweill v. Dew, "" On the question whether an oral 1842, 1 Y. & C. CO. 345, 62 E.B. 918; . bargain for years would be available for c/. PoweU v. Lovegrove, 1856, 8 De G. M. & a year, see the authorities collected in G. 357. Rankine, Leases, 113. A simUar question i^' B. Pr. 1180, 1190 ; 1 B.C. 328 ; arises in the law of master and servant ; see Clark v. Lament, 27th Jan. 1816, P.C. 72 ; Fraser, M. & S. 30, 36. Macrorie v. MacWhirter, 18th Deo. 1810, 1" Arbuthnot v. CampbeU, 1793, Hume F.C. 86 ; Fowlie v. M'Lean, 1868, 6 M. 254 ; 785 ; D. Gordon v. Carmiohael, 1800, Lemarc v. Dixon, 1873, L.R. 6 H.L. 414. ibid., 805; Arbuthnot v. Reid, 1804, Wrong, or not fully stated, seem to be ibid., 815 ; Skene v. Spankie, 1790, 1 BeU, M'Morraii v. Black, 1624, M. 16830, 17012 ; Leases, 313. See also Drummond v. Gow, Duncan v. Barron, 1752, M. 15177, 16984 ; 1787, ibid. ; Sutherland's Tr. v. Miller's Grant v. Richardson's Reps., 1788, M. Tr., 1888, 16 B. 10 ; Kinninmont v. Paxton, 15180 ; Sievewright v. Scott, 1796, Hume 1892, 20 B. 128 ; Ballantine v. Stevenson, 790 ; Ross v. Ross, Hume 774 ; Macarthur 1881, 8 R. 959 ; Gray v. Low, 1859, 21 D. v. Simpson, 1804, M. 15181. 4 50 EEI INTERVENTUS — PART PEREOEMANCE therewith ; such (usually) as no tenant for a year or less and no precarious possessor would have laid out ; or such as no landlord would have made, if he had not had the informal bargain in mind.i^* The rule is the same in Bngland.i^^ Bach case turns on its own circumstances, and in parti- cular on the amount of the expenditure, the value of the subject said to be let, and the contemplated duration of the lease ; but some instruction may be derived from a table of meUorations ^^^ which have been found to stretch or not to stretch beyond ' ordinary improvements in the way ' of better culture and management.' ^^'' Rei interventus established : — Buildings at £60 ; rent £12, 12s.i58 Improvements at £440 ; additional rent paid ; removal ; damages.^^* Contribution of carriages. i*" Inclosing, Hming ; improving moor at large sum ; increased rent."^*^ Turning field into garden by trenching and planting fruit trees and shrubs at £160-£200 ; rent £20.i«2 Liming ; entering into submission as to marches with landlord's consent.i*^ In mining lease, putting down bores. i'* [This was homologation, the tenant desiring to throw up the informal lease.] Cutting whins, draining, carrying lime, making barn.^^® [This .was done during running lease, but on faith of new tack.] New buildings, mill lade, draining, fencing, and other improve- ments ; rent (£66-£68) increased.^^^ Dykes built and other improvements; rent (200 guineas)increased.i*^ Forming avenue ; at cost of £150 ; rent ISs.i*^ Taking down ruinous cottages, driving drain-tUes, manuring and hming at great expense ; rent to £83.^8" Draining, grubbing, laying to pasture, manuring.^'" 1" The oases are nearly all-of the former '■'^ Drummond v. Scott, 1787, 1 Bell, class. The latter may not easily, but Leases, 306; cf. Thomson v. Thomson, might logically, be established. See supra, 1699, M. 8426. P- 38. 164 Sinclair v. Mossend Iron Co., 1854, 155 Wills V. Stradling, I'l ; Morphett v. 17 D. 258. Jones, 1818, 1 Sw. 172, 181 ; Faulkner i«5 Murdoch .,. Moir, 18th June 1812, V. LleweUyn, 1862, 31 L.J. Ch. 549. But F.C. 692. see Pain v. Coombes, 1857, 1 De G. & J. 34 ; lee Eraslie v. Duff, 1865, 3 M. 854. Miller «. Einlay, 1862, 5 L.T. N.S. 510. i<" Cs. Moray v. Stewart, 1772, M. 4392, 156 As to recompense for meliorations 15179, rev. 2 Pat. 317. .made on the faith of an oral contract, see i68 Forbes v. Wilson, 1873, 11 M. 454. supra, 1-^ 169 Bathie v. L. Whamoliff'e, 1873, 11 M. 1" Macrorie v. MacWhirter, supra, iss. 490. See also cases where the question of 158 Ibid. quantum was not reached — NeUl v. E. i5» Keir V. D. Athole, 1815, 6 Pat. 130. Cassillis, 22nd Nov. 1810, F.C. 40 ; Gowans'a 160 Haly V. Sands, 1749, M. 16354 ; Trs. v. Carstairs, 1862, 24 D. 1382 (en- Eloh. Tack, 15, sed quaire. closing) ; Walker v. Flint, 1863, 1 M. 417 161 Grieve v. Pringle, 1797, M. 5951. (piggeries). 162 CampbeU v. Dougal, 1813, Hume i'» Mundy v. Jollifie, 1839 5 Mv & Cr. 861. 167. ' ' y REI INTER VENTUS — PART PERFORMANCE 51 Improvements ; alteration of house and boundaries ; increased rent.i'i Repair, straightening, and renewal of hedges ; extensive manuring and draining.i''^ Building ; refitting as factory. This by plaintiff's sub-tenant with landlord's consent.^'^ £1000 in repairing, draining, improving, and stocking ; rent £100.^'* Converting a shop into an ofiice.^'^ Building house ^'^ on small allotments.^" Rei interventus not established :— Alteration of partitions, and rearing up pews, in meeting-house.^'* Sub-lease ; no more non-compensable improvements than might be expected under an annual agreement.^'^ Repair of ruinous party wall ; it might be reasonable under existing lease. ^*'' Improvements not enough (but increased rent added). ^^^ Ordinary cultivation expenditure. ^^^ Minor alterations on premises.^*^ Acts other than meliorations have been canvassed as importing rei interventus as between landlord and tenant. Rei interventus estabUshed : — Furnishing two fencibles for landlord's regiment.^** Paying grassum.^*^ Increased rent beginning before ish of current tack.^** Less rent for less land.^*' "1 Sutherland v. Briggs, 1841, 1 Ha. 26. i^^ Brennan v. Bolton, 1842, 2 Dr. & 1" Tarrall v. Davenport, 1861, 3 Giff. War. 349. 363, aff. 8 Jur. N.S. 1043. "^ Whilliok v. Mozley, 1883, 1 Cal. & 1" WiUiams v. Evans, 1875, L.R. 19 Eq. E. 86. 547 ; and see BeU ■ ; Nunn v. 636, aff. 8 M. H.L. 40. Fabian, 1865, L.R. 1 Ch. 35 ; WiUs v. i'8 M'Kenzie & Wylie v. Trotter, 1729, Stradling, "^ ; Miller & Aldworth v. M. 8437 ; but the tack seems to have been Sharp, [1899] 1 Ch. 622 ; Humphreys v. oral merely. Green, 1882, 10 Q.B.D. at p. 156, per 1" Clark V. Lamont, 27th Jan. 1816, Baggally L.J. As to increase after ish, F.C. 72. The rubric in Philip v. Cummings' see Campbell v. Robertson, 1797, Hume Trs., 1869, 7 M. 859, is misleading. Con- 849; Paterson v. Burton, 1711, 4 B.S. trast BeU v. Goodall, 1883, 10 R. 905. 830 ; Sellar v. Alton, 1875, 2 R. 381. "" Frame v. Dawson, 1807, 14 Ves. 386. i"' Carlyle v. Baxter, 1869, 6 S.L.R. "1 Wills «, Stradling, 1797, 3 Ves. Jr. 425. And see Sutherland's Tr. v. Miller's 378 Tr., 1888, 16 R. 10. 52 EEI INTEEVENTUS— PART PBRFOEMANCE In sale, etc. In regard to sale, etc. — Rei interventus establislied. : — Informal puichase of dominium utile ; seller buying the superiority in order to purchaser holding direct of Crown.^^* Superior's promise (proveable only by his oath) to enter his vassal's purchaser gratis ; sale carried out.^*® Lease converted into feu informally ; avenue, porter's lodge, garden wall ; diversion of road.^^" House sold ; garden laid out.^'^ Ship to be built ; one joint adventurer resiles ; ship built.i^^ Ill-executed decreet-arbitral ; part payment conform.^*^ Sale of shares between partners ; substantial sum for option.^'* Caution on sale ; part payment on faith of it.^*^ Rei interventus not established : — Payment of earnest (arles) ; one guinea.^'* Payment of part of price, or even the whole.^*' Payment of auction tax.^*^ Not irre- The closing words of this part of the definition, ' though not irre- trievable. , trievable,' were intended by Mr Bell^^^ to' differentiate rei interventus, acting as described in this chapter, from the more emphatic form thereof, which infers an obhgation and does not merely cHnch an obhgation other- wise instructed. In the more emphatic case ' something is allowed to be 'done which manifestly cannot bfe undone.' ^'"' It is now well settled, that this irretrievabihty does not require to be proved in order to bar repudiation of an informally instructed obhgation ; and that Lord Kilkerran went wrong in saying ^?^ (and apparently with approval) that ' the rule by which it is to be judged whether res be nan integra, so as to ' exclude the locus pcenitentiw, was laid down to be this, that wherever ' anything has happened on the faith of the verbal agreement, which ' cannot be recalled and parties put in the same place as before, then 188 a Kinghom v. Hay, 1674, M. 8414 ; 8402. See the authorities from Stair cf. Parker v. Isat, Hume 915. downwards to the contrary in the general i=» Gordon v. Pitsligo, 1674, M. 8415. case in Dickson, Evidence, §§ 847-9. It i'" Colquhouu V. Wilson's Trs., 1860, may be doubted whether modem law would 22 T>. 1035. follow the trend of the older decisions. "1 Westrena. Miller, 1879, 7 E. 173, 177 i»' The question in England referred (L. Adam's opinion). to by L. Ch. Cottenham (see supra, p. 38) ''^ Henderson v. Balfour, 1716, M. seems to have been settled in this sense. 1'7031. See Pry, Spec. Performance, p. 264. "8 Grierson v. Scots, 1699, M. 17022. "s Buokmaster v. Harrop, 1802, 7 Ves. "» Graham v. Corbet, 1708, M. 8428. 341. 1" Hamilton v. Wright's Trs., 1838, i»9 B. Pr. 26. 3 S. & M'L. 127, 140, supra, p. 38, Ersk. "'"' B. Pr. 946. See next chapter in init. 3.2.3; Lawrie v. Craiok, supra, p. 47; *»i In reporting Moodie v. Moodie, i"; Moodie v. Moodie, 1745, M. 8439. cf. Corsbum v. Pollock, 1682, M. 8472 ; i"" Lawson v. Auohinleok, 1690, M. Campbell v. Douglas, 1676, M, 8470. REI INTERVENTUS — PART PERFORMANCE 53 ' res is understood not to be Integra and that there is no longer locus ' pcewitentiw.' As put by a high authority in England,^"^ ' Nothiag ■ ' can be clearer than that there are many acts, easily enough admitting ' of compensation, which yet amount to such part performance as will ' enable the Court to enforce a parol contract.' This doctrine has been illustrated passim in the foregoing pages.^"^ 208 Pry L.J. in Spec. Performance, in Dunmore Coal Co. v. Youngs, 1st Feb. p. 264. 1811, F.C. at p. 171 ; per L. MonoreifE ^"^ See especially per L. Meadowbank in Johnston v. Grant, 186i, 6 D. at p. 884. CHAPTEE IV ACQUIESCENCE Introduction. In the foregoing chapter attention has been confined to cases ia which consent has been implied to the effect of precluding objection to a demand for specific performance or specific implement of an agreement or obliga- tion proved aliunde but informally — the implication being gathered from the defender's acquiescence or non-repugnantia at a time when ordinary prudence and fairness should have impelled him not to stand or lie by, but to vindicate his right to resile. The agreement or obhgation is there proved otherwise than by the acquiescence. But the doctrine of acqui- escence may go much further and act more emphatically. Acquiescence may be the only proof of consent and may thus set up agreement un- aided. Where the element of time is of importance (as is often the case) the appropriate plea is acquiescence, taciturnity, and mora, i.e. acqui- escence gathered inter alia from undue delay in vindicating a right, short of the appropriate prescriptive period. The cases in which mora is pro- minent are treated in another chapter.^ The cases in which it is of less importance are dealt with in the present chapter. This subdivision of the law of personal bar involves tacit representa- tion and comes under that part of the leading definition of estoppel^ which describes wiKulness as including such conduct as would induce a reasonable man to take the representation to be true and to beheve it was meant that he should act upon it, and he did so act. Mora. As bar or estoppel. Not properly rei interventus. I. Parties under no A^jtbcedent Contract The most striking cases are those which arise occasionally in regard to the user by neighbours of heritable or real property which is also corporeal. The parties are at the time at arm's-length, being under no antecedent contract in regard to the matter in question. As in aU cases of effective acquiescence, there is a passing from, or discharge of, a right to object or prevent.^ Inasmuch as the objectionable acts may have 1 Chap. V. " Supra, p. 2. The distinction between estoppel and acquiescence set forth by Bowen L.J. in the patent case of Proctor v. Bennis, 1887, 36 Ch. D. at p. 761, seems to proceed on no marked principle. In Scot- land personal bar covers both. ' As to which see per L. Ch. Cottenham in D. Leeds v. Amherst, 1846, 2 Phil, at p. 123 ; and infra, p. 59. 54 ACQUIESCENCE 55 been carried out before the right to object has been reaUsed, the term rei interventus can scarcely be appUed in its proper sense as explained in the foregoing pages, where the actings intervened or followed on the contract or obligation and on the faith of it, though not necessarily after the relation between the parties had Come fully into being.* These circumstances may account for some obscurity observable in the passage in Bell's Principles ^ in which the learned author, after indicating that the law regarding acquiescence had not been crystallised, proceeds as follows : — The principle seems to be that mere acquiescence may, as rei interventus, make an Bell's defini- agreement to grant a servitude or to transfer property binding, or may bar one from ^°^' challenging a judicial sentence ; but that, where there is neither previous contract nor judicial proceeding, there must be something more than mere acquiescence, something capable of being donstrued as an implied contract or permission, followed by rei inter- ventus. Where great cost is incurred by operations carried on under the eye of one having a right to stop them, or where, under the eye and with the knowledge of him who has the adverse right, something is allowed to be done which manifestly cannot be undone, the law will presume an agreement or conventional permission as a fair ground of right. '■ The first few words are a short statement of the law developed in the Commented foregoing chapter. The rest of the quotation opens the subject now°°" under discussion. What is there contemplated is either a feigned contract cUnched by rei interventus — which seems to be inadmissible on the facts — or an agreement which the Court may spell out of the whole circumstances, and in particular out of the acquiescence of the one party in the actings of the other, personally barring the former from effectively objecting to what the other has done. It appears that the second theory has been adopted on both sides of the Tweed.' In Scottish, therein differing from EngUsh, law there can be no Acquiescence transfer of land by acquiescence. ' Acquiescence as to heritable property transfer of pro- ' .is a modus acquirendi which is an absolute novelty.' « If, as seems f^^^_ '" ^''°'" the better opinion, a building lawfully projected beyond a known march line does not carry the ownership of the land or space below or above the projection,^ an encroachment ignored can have no higher significance. * See supra, pp. 40 seq. 6 Ha. 300 ; Waring & Gillow v. Thompson, " Sect. 946. 29 T.L.E. 154 ; Williams v. E. Jersey, " Adopted by L. Ch. Chelmsford in 1841, Cr. & Ph. 91 ; Senhouse v. Christian, Bargaddie Coal Co. v. Wark, 1859, 3 Maoq. 1795, 19 Beav. 356 n. ; Norway v. B,owe, at p. 479; by L. Cowan in Cowan v. L. 1812, 19 Ves. 144, and 2 Ves. Jr. Sur- Kinnaird, 1865, 4 M. at p. 243 ; and by 655 ; Cowell v. Watts, 1850, 19 L.J. Ch. L.O. Wellwood in Bank of Scotland v. 455 (heads I win ; tails you lose) ; and Stewart, 1881, 18 R. 957. Contrast the others infra. weaker actings in B. Pr. 26 ; supra, « Per L. Gillies in Melville v. Douglas's pp. 29se^. These need only he significative; Trs., 1830, 8 S. 841, sequel to 7 S. 186; those determinative. See the restatement ' per L.O. Cringletie in Sim v. Stewart, in 3 Maoq. 480. 1827, 5 S. 841. For another case of dis- ' The endeavour so to spell out a con- puted boundary, see Kichmond v. Grahame, tract (therein differing from the cases in 1850, 12 D. 1163. last chapter) is in England illustrated in » Corbett v. HiU, 1870, L.K. 9 Bq. 671 ; such cases as Powell v. Thomas, 1848, Robertson v. Scott, 1886, 13 R. 1127, 1132. 56 ACQUIESCENCE In England. Thus, in a very early case, a park wall was built whoUy beyond march, the neighbour sciente el astante ; and it was held not ' relevant to take ' away property ; neither was it incumbent upon the pursuer to dissent, ' seeing he knew that what was built on his ground would become his ' own.' But the Lords thought that the taciturnity might operate this much, that the builder might remove the materials or give the value of the land cut off.^" Where the ownership of a gable wall was wholly vested in one of the neighbours, and certain uses of it were claimed for the future on the ground of their having been exercised in the past — having been set up during unity of title, — Lord Rutherfurd Clark observed : ' A use which has no justification in title must be ascribed to tolerance. ' It is only in rare cases that a Umitation on title can be created by ' acquiescence. It can never happen unless it be clear that there was ' an agreement or consent to that effect.' " As was pointed out in the House of Lords,!^ the only case in Scotland in which an encroacher has been held entitled to remain in possession as owner of the land in dispute on condition of paying compensation, without title or without prescriptive possession, could not be justified even by acquiescence, seeing that the true owner, being absent from the country, had no knowledge of the encroachment.!^ So that attention may now be confined to acquiescence in certain uses to which corporeal real or heritable property may be put.^* The English law, which does not depend on sasine, goes further in regard to title, and may be stated in the words of Lord Chancellor Cran- worth : 1^ ' If a stranger begins to build on my land, supposing it to be ' his own, and I, perceiving his mistake, abstain from setting him right ' and leave him to persevere in his error, a Court of Equity will not allow ' me afterwards to assert my title to the land on which he had expended ' money on the supposition that the land was his own.^* ... If a ' stranger builds on my land knowing it to be mine, there is no principle ' of equity which would prevent my claiming the land with the benefit of all the expenditure made on it. There would be nothing in my i» Nicol V. Hope, 1663, M. 2200, 6627. See the very special case of Dobie v. Hyalop, 1903, 11 S.L.T. 144 ; and as to the pier of a bridge, Winana v. L. Tweedmouth, 1888, 15 R. 540. " Praser v. CampbeU, 1895, 22 E. 558. ^' Per L. Watson in Grahame v. Kirk- caldy Mags., 1882, 9 R. H.L. at p. 92, 7 Ap. Cas. at p. 557. And see Place v. West Highland Ry. Co., 1895, 2 S.L.T. 487 (meliorations after bad notice to treat) ; Wood V. Charing Cross Ry. Co., 1863, 33 Beav. 290 ; DowUng v. Pontyprid Ry. Co., 1874, L.R. 18 Eq. 714. li" Macnair v. Cathcart, 1802, M. 12832. The English Courts would have held differently ; see Grahame, supra. As to other cases of physical encroachment, see Rankiue, Laudownership, chap, ix., in initio. '* The distinction is well brought out in AUan v. Swan, 1827, 5 S. 261. ^^ In Ramsden v. Dyson, 1865, L.R. 1 H.L. at pp. 140-1, a case of alleged ' tenant right,' and expensive buildings, in which the right of indefinite renewal of lease was not made out. Cited in Bankart V. Teunant, 1870, L.R. 10 Eq. 146 ; and followed in Att.-Gen. to the Prince of Wales V. CoUom, [1916] 2 K.B. 193. A modifica- tion was prefigured by L. Ch. Hardwioke in East India Co. v. Vincent, 1740, 2 Atk. 82. " With which contrast the Scottish law of recompense for meliorations made in bond -fide. See the authorities collected in Rankine, Landowuership, 86-94. ACQUIESCENCE 57 ' conduct, active or passive, making it inequitable in me to assert my ' legal rights.' i' The case of the Music Hall in Edinburgh was a narrow one, and D. BuccUuch illustrates the utmost extension of acquiescence as a plea in relation to ^iagistJtes. the user of heritage. The portico in front of the hall projected 2| feet beyond the street line, in spite of a Dean of Guild decree allowing it to extend only up to that boundary. No objection was taken by the City for nearly forty years. The owners of the building then proposed to build out accommodation for an orchestra on the first storey of the portico but within the street boundary. The novum opus was allowed ; and Lord Justice-Clerk Inglis, after referring to encroachment made without consent of owner, proceeded thus : ' It is equally clear that if ' the building is erected with the consent of the owner of the ground, he ' cannot be heard to complain of that which has been done with his ' consent ; and that consent may be inferred from facts and circumstances. ' If I build on my own ground and a few inches or a few feet beyond on ' my neighbour's ground, and if he stands looking on without objecting, ' he wiU be held to have given a tacit consent to my operations, which ' will have the same effect as express consent. This is the foundation ' of the doctrine of acquiescence, which, however, is a doctrine that ' must be carefuUy guarded, especially when it affects heritable rights. ' The facts from which acquiescence is to be inferred must be such as ' to leave no reasonable doubt as to what was the intention of the parties ' at the time. . . . The owner of the house cannot be restricted in the ' use of it by the owner of the ground encroached on, if the use proposed ' to be made of it involves no further encroachment. . . . The notion ' that an increase of the superincumbent weight on the pillars necessarily ' infers an increase of the weight on the soil, which remains the property ' of the magistrates, is too intangible and fanciful for judgment.' ^^ The same judge, about the same time, dealt with a plea of acquiescence Cowan v. in regard to a question of water rights. The pursuers bought a mill in 1846. In 1842 water had been carried off from the stream by the defender, an upper proprietor, through a cut which did not return the deflected water above the pursuers' mill. The question was one of the relevancy of the defender's averments, which were that the pursuers' author ' saw ' and well knew of the operations now complained of being executed, ' and acquiesced in and agreed to the same being executed ; and the ' pursuers, his successors, came into his rights after the whole operations ' were completed with his knowledge and sanction. The pursuers have ' acquiesced in the operations ever since [i.e. for sixteen years] and have ' also taken benefit under the agreement [between the defender and ' neighbouring proprietors] by using the water brought [through draining " The former proposition is restated ^^ D. Bucoleuch v. Edinburgh Mags., by Jessel M.B. (without referring to 1865, 3 M. 528, 531-3. In Murray v. Ramsden) in Ex. p. Ford, 1876, 1 Ch. D. Johnston, 1834, 13 S. 119, the relevancy at p. 528, as to encumbrances. of acquiescence may be doubted. 58 ACQUIESCENCE Further dicta. Early ca£ England. a stagnum] by the defender into the burn in lieu of that portion of the water which he diverted from it under the agreement.' His Lordship remarked : ' The pursuers used the Dron burn as it came down to them. But what else could they do ? ... It is not said they got an increased supply of which they took advantage by increasing their works in consequence. ... I think that a party may stand by and see an illegal act done without challenging it for many reasons, but still with no intention of consenting, and yet acquiescence is nothing but imphed consent. . . . Mere silence will never bar a right to complain of an illegal encroachment on property. It was argued that acquiescence means more than silence, and so it does ; but the defender says that in alleging acquiescence he must be understood as saying that there are facts and circumstances from which acquiescence may be inferred. If so, I am clear that such facts and circumstances must be set out on the record ; and there are no such facts and circumstances set out here.' i' In a later case of diversion of water, there are to be found obiter dicta regarding acquiescence.^" Lord President Inghs remarked : ' I think ' the doctrine of acquiescence as a means of acquiring or fortifying rights ' of property is a very dehcate and sometimes a very dangerous doctrine, ' and I am not fond of pressing it into service when it is not absolutely ' indispensable. . . . The facts and circumstances which are rehed on ' as the foundation of the plea of acquiescence may be fairly and legiti- ' mately used as acts of possession in the construction of the deeds.' ^^ Lord Deas said : ' I acknowledge the importance of this plea because, ' whatever may be said of acquiescence as apphcable to a right of pro- ' perty, ... I do not doubt that a right of servitude . . . may he ' extended as well as restricted or abandoned by acquiescence on the ' faith of which large expenditure has been made in the knowledge of ' the party who inexcusably stands by at the time and afterwards objects ' when it is too late to undo what has been done without unreasonable ' loss or hardship to the party whose operations are then objected to.' ^^ The operations were the erection and enlargement of mills and the construction of a reservoir and the laying of pipes. The following is a full report of the earliest cases in England wherein similar equitable considerations have been given effect to. A diverted a watercourse, which put B to great expenses in laying of sooths, etc., and the diversion being of a nuisance to B, he brought an action ; but an injunction was decreed upon a bill exhibited for that purpose, it being 19 Cowan V. L. Kinnaird, 1865, 4 M. 236, 241. In D. Bucoleuoh v. Cowan (Esk Pollution case) acquiescence was averred, but no facts referring to it were con- descended on— 1866, 4 M. 475, aff. 4 B. H.L. 14. 2» M'Intyre v. Orr, 1868, 41 So. Jur. 112. It was decided on the titles, as explained by relevant facts, that the opera manu- facta were justifiable. (Lease turned into feu ; question with purchaser from lessor.) 21 P. 115. 22 P. 117. His Lordship then alluded to the cases {infra) decided early in the nineteenth century. See also L. Ard- millan's op., p. 119. ACQUIESCENCE 59 proved that B did see the work when it was carrying on and connived at it without showing the least disagreement, but rather the contrary.^^. Short built a fine house ; Taylor began to build another, but laid part of its foundation upon Short's land. Short, seeing this, did not forbid him, but on the contrary very much encouraged it ; and when the house was built he brought an action ; and Lord Somers granted an injunction and said : ' It was but just and reasonable ; for, being a nuisance, every ' continuance is a fresh nuisance, and so he would be perpetually liable ' to actions, which would be hard when he was encouraged by the party ' himself.' ^* Therefore, a party may so encourage another in the erection of a nuisance as to give the adverse party an equity to restrain him from recovering damages at common law for such nuisance when completed ; ^^ but not if the operations were allowed to proceed on the assurance that they would do no harm, and they did harm.^* In a case ^' which raised the question whether a principal had Actings in pro- acquiesced in the actings of a sub-agent in selUng a ship by conduct short fompi'eted.™^^ of ratification or adoption, the judgment of the Court of Appeal drew an important distinction which is of general appUcation. ' The term ' " acquiescence," which has been apphed to his conduct, is one which ' was said by Lord Cottenham in Bulce of Leeds v. Earl Amherst ^* ought ' not to be used ; in other words, it does not accurately express any known ' legal defence, but if used at all it must have attached to it a very different ' signification, according to whether the acquiescence alleged occurs ' while the act acquiesced in is in progress or only after it has been com- ' pleted.^® If a person having a right, and seeing another person about ' to commit, or in the course of committing, an act infringing upon that ^ right, stands by in such a manner as really to induce the person com- < mitting the act, and who might otherwise have abstained from it, to ' believe that he assents to its being committed, he cannot afterwards ' be heard to complain of the act. This, as Lord Cottenham said in the ' case already cited,^" is the proper sense of the term " acquiescence," ' and in that sense may be defined as quiescence under such circum- 2= A Watercourse, 2 Eq^. Ca. Abr. 522, '» In D. Leeds v. E. Amherst, supra, 22 B.R. 441. p. 54*. Other definitions of acquiescence " Short V. Taylor, ibid. See also are to be found in La Banque Jacques- Clavering's case, narrated by L. Ch. Lough- Cartier, 1887, 13 Ap. Cas. 118; Evans v. borough at 5 Ves. p. 690, and quoted at SmaUoombe, . 1868, L.R. 3 H.L. 249 ; L.R. 10 Bq. 147, and 35 Ch. D. 695. Willmott v. Barber, 1880, 15 Ch. D. 105 ; - WUliams .. E. Jersey, 1841, Cr. & Ph. ^Ucard .. Skinner, 1887, 36 Ch. D. 192. „, , , , As to acqiuescence m the sale oi a. 91 (copper-works). , , ■ .l i. i • i- „ , , „ ,n„, „, T T riT. company s busmess or its takmg up ahen 2= Davies v. MarshaU, 1861, 31 L.J. C.P. ^^^^^^^^ ^^^^^ the old law, see Imperial Bank of China v. Bank of Hindustan, " De Bussche v. Alt, 1878, 8 Ch. D. at jggg^ ^ jj g gq. 91 ; Phcenix Life Ass. P- 314. Co., 1862, 2 J. & H. 441 ; CrelUn v. . p. 54. Brook, 1845, 14 M. & W. 11. As to the ^' See a case of a right of pre-emption distinction between acquiescence in an being passed from, ' he had no idea of executed and in an executory contract, see ' making anything of it but a lawsuit'— Hare v. L. & N.W. Ry., 1861, 2 J. & H. Grahame v. Muir, 1833, 11 S. 308. at p. 121. 60 ACQUIESCENCE Requisites ol acquiescence. Stances as that assent may be reasonably inferred from it, and is no more than an instance of estoppel by words or conduct. But when once the act is completed without any knowledge or assent upon the part of the person whose right is infringed, the matter is determined on very different legal considerations. A right of action has then vested in him, which, at all events as a general rule, cannot be divested without accord and satisfaction or release under seal.' ^^ Where a sub-lessee sued his author the lessee for specific performance of an agreement that the plaintiff should have an assignment of the head lease, and sued the lessor to depart from a prohibition of assignment contained therein, his contention against the latter being that he had ' acquiesced in expenditure by the plaintiii of large sums on the land, it appeared that the lessor, at the time of the expenditure, was not aware of this prohibition ; and Fry J. thus described the requisites of effective acquiescence and found that they had not been satisfied : ^^ ' A man is not to be deprived of his legal rights unless he has acted in such a way as would make it fraudulent ^^ for him to set up these rights. What then are the elements or requisites necessary to constitute fraud of that description ? In the first place, the plaintiff must have made a mistake as to his legal rights. Secondly, the plaintifE must have ex- pended some money or must have done some act (not necessarily upon the defendant's land) on the faith of his mistaken belief. Thirdly, the defendant, the possessor of the legal right, must know of the existence of his own right, which is inconsistent with the right claimed by the plaintiff.^* If he does not know of it, he is in the same position as the plaintifE and the doctrine of acquiescence is founded upon conduct with a knowledge of your legal rights. Fourthly, the defendant, the possessor of the legal right, must know of the plaintiff's mistaken behef of his rights. If he does not, there is nothing which calls upon him to assert his own rights. Lastly, the defendant, the possessor of the legal right, must have encouraged the plaintiff in his expenditure of money or in the other acts which he has done, either directly or by abstaining from asserting his legal right.' ^^ 68 L.J. Ch. at p. 457. As to acquiescence, see also 'per L. Chelmsford in E. Beau- champ V. Winn, 1873, L.E. 6 H.L. at p. 234 ; per Bowen L.J. in Sayers i). CoUyer, 1884, 28 Ch. D. at p. 108; and in AUcard v. Skinner, 1887, 36 Ch. D. at p. 192 ; per L. Eldon in Dann v. Spurrier, 1802, 7 Ves. at p. 235 ; and in Shaw u. Henderson, 1814, 2 Dow 519 (canal going beyond limit of deviation). See also Morrell u. Shedd, [1913] 2 Ch. 648, 657, where the definition in Willmott is adopted ; also Proctor i>. Bennis, 1887, 36 Ch. D. 740. In Somersetshire Coal and Canal Co. V. Harcourt, 1858, 2 De G. & J. at p. 608, L. Ch. Chelmsford speaks of ' lulhng ' into security and confidence.' '^ In Scotland this would mean a proper discharge. The rest of the passage relates to statutory hmitation, laches, and promise without consideration not to seek redress. 32 Willmott V. Barber, 1880, 15 Ch. D. 96 at p. 105. See also his observations in Proctor V. Bennis, 1887, 36 Ch. D. 746, 765, and those of Cotton L.J. at p. 760, adopting obs. of Lord Cranworth in Ramsden v. Dyson, 18(i5, L.R. 1 H.L. 140. '' As to this use of ' fraud ' and ' f raudu- ' lent,' see supra, p. 29. 31 See Bell v. Marsh, [1903] 1 Ch,'528. '^ These remarks ' might have been a ' little more compact,' per Kekewich J. in Civil Service Assn. v. Whiteman, 1899, ACQUIESCENCE 61 In a case of witlidrawing water from a canal for purposes other than Do. the condensing of steam (which was permitted by statute), Lord Cran- worth observed : ' I entirely assent to the argument . . . that mere ac- ' quiescence (if by acquiescence is to be understood only the abstaining ' from legal proceedings) is unimportant. Where one party invades ' the right of another, that other does not, in general, deprive himself ' of the right of seeking redress merely because he remains passive ; ' unless, indeed, he continues inactive so long as to bring the case within ' the purview of the Statute of Limitations. . . . But the evidence of ' long-continued use of the water for all purposes by the adjacent mill- ' owners may be very important as tending to satisfy this Court that, ' when the nuH of the defendants was erected, the plaintiffs must have ' known that Eang, who was building it, was laying out his money ' in the expectation that he would have the same privilege of using ' the water as was enjoyed by all his neighbours.' ^^ Similar doctrines have been given effect to in regard to ways of necessity ^^ and ancient hghts.^^ Acquiescence, seeing that, to be effective, it must come up to tacit Knowledge. consent,39 involves knowledge on the part of the person charged with it, both of his own right and of the acts which are alleged to be an infringe- ment thereof. Illustrations of this obvious requisite have been given in the foregoing chapter.*" Knowledge of a person's private rights is usually imputed to him,*i but may be disproved ; *^ and ' there can be ' no doubt that acquiescence, to operate as an equitable estoppel, must ' be with knowledge that the party acquiescing has a right which would ' be available against that which he has permitted to be enjoyed.' *^ A case of possible, though not proved, knowledge which could not lead to action in the sense of these words is E. Kintore v. Pirie & jSons,** e. Kintore v where the action was for declarator and interdict and substantially for ^'"* ^ '^''"'■ restoration of mill lades, affecting the run of salmon, to the state in which they were before extensive enlargements had been made. The mill- owners averred that these alterations were known to all persons interested in the fishings in the river ; that great cost had been incurred ; and that =« Rochdale Canal Co. v. King, 1851, " Ms. Abercom v. Langmuir, 20th May 2 Sim. N.S. at p. 89- His Lordship goes on 1820, ¥.C. 135. to desiderate proof that there was no other *^ IKg. Willmott v. Barber, supra, ''. practicable source. *^ Per L. Chelmsford in E. Beauchamp " Clavering, supra, ^ ; Davies v. Sear, •"■ Winn, 1873, L.R. 6 H.L. at pp. 234-5. 1869, L.E. 7 Eq. 427— though there were See per Jessel M.R. in Laoey v. Hill, 1876, originally other accesses ; Powell v. Thomas, ■* Ch. D. at p. 547. 1848, 6 Ha. 300 ; Laird v. Birkenhead Ry. " 1903, 5 F. 818, aff. 8 F. H.L. 16, Co., 1859, John. 500. [1906] A.C. 478 ; sequel, 8 F. 1058. The _,, point as to acquiescence was ignored in 88 Blanchard v. Bridges, 1835, 4 A. & E. ^ l. See also Hill v. Wood, 1863, 1 M. at p. 194 ; Gotching v. Bassett, 1862, 32 gg^ . ^^^^ ^ B&o^et, 1866, 4 M. H.L. Beav. 101. ^^_49 . ji'^jbtjon v. Rankin, 1871, 9 M. 29 See HiU u. Dixon, 1850, 12 D. 808 ; 423 ; Black v. CuUen, 1853, 15 D. 646, per Cowan V. Kinnaird, supra, " L.p. M'Neill. It would be unwise to rely '° Supra, p. 38. on Robertson v. Davidson, 1842, 4 D. 398. 62 ACQUIESCENCE the pursuers— salmon-fishery owners— must be held to have acquiesced in the consequent deterioration of the fisheries. Lord Kyllachy, the Lord Ordinary, met this plea thus, after admitting the large expenditure by the millowners : ' Their whole extensions and alterations have been made within and upon their own property ; and apart from the use which they make of them, the same cannot be and are not now challenged. . . . The acquiescence, therefore, which is pleaded is acquiescence,^ not in the defenders' extensions and alterations, but in the defenders' increased abstraction of water from the river. And the right sought [by the defenders] to be established. by acquiescence is not merely a right of immunity for the past, but a right of continuance for the future.'*' Lord Kinross L.P. puts the questions briefly: 'Two things are necessary to support this plea — (1) that the person who is alleged to have acquiesced shall have had power to stop the things complained of ; and (2) that he shall have had full knowledge of what was being done.' Or, as stated in an EngUsh case of easement of Kght : ' The fuUest knowledge, with entire but mere acquiescence, cannot bind a party who has no means of resistance.' ** A corporation may be bound by acquiescence ; *' but knowledge of the state of things it might have objected to must be brought home to it as such, and not merely to one or more of the cor- porators.** The ascription of knowledge to a fiar during liferenter's possession or of the remainder-man in a settled estate appears to be one of circumstances which may or may not bring home to him his power, and the necessity, to interfere, if such exist.*^ Similarly, it appears to be a question of fact whether an absentee can be fixed with the knowledge of those who are in management of his property for him.'" The com- pUment which the law of Scotland pays to the intelligence and discretion of minors puberes, as contrasted with the view EngHsh law takes of adult infants, suggests that cases of hardship, whether arising from the lack or from the neglect of guardians, would in Scotland be solved in most cases under the rules of the quadriennium utile and of homologation.'^ A singular successor, with express or plainly implied notice, is fixed with the consequences of his author's acquiescence, just as if he had succeeded by gratuitous title.'^ Another point was thus treated in the Judicial *5 5 P. 838. His Lordship goes on to plan or warrant and not intimated to the restate his opinion in Carron Co. v. city authorities). As to other occult opera- Henderson's Trs., infra, p. 80. See also tions, see Wark, =8. Harper v. Stuart, 1907, 15 S.L.T. 550, " Barton u. Richardson, 1840, 16 So. where the existence of the pipe could have Jur. 310. been discovered only on minute inspection. ^^ Vt. Melville v. Douglas's Trs., 1830, ■"i Per curiam in Blanchard v. Bridges, 8 S. 841 ; Barton v. Richardson, supra. 1835, 4 A. & E. at p. 194. si See D. Monmouth v. E. Tweeddale, " Crook V. Seaford Corp., 1871, L.R. 1677, M. 5625 ; Hart v. Taylor, 1827, 6 Ch. 551 ; Rochdale Canal Co. ; Laird, 4 Murr. 307 ; D. Leeds v. E. Amherst, swpra, '". As to a corporator being barred supra, p. 59 ; Somersetshire Coal and Canal by genera] meeting, see Era Ass. Co., 1862, Co. v. Harcourt, supra, ^K 1 H. & M. 672 per Page Wood V.C. ^^ ColviUe v. Mictdletou, 27th May 1817, 48 Edinburgh Gty v. Baton, 1858, 20 D. E.G. 339 ; and see Macgregor v. Balfour, 731 (cellars not shown in Dean of Guild 1899, 2 E. 345 ; D. Beaufort v. Patrick, ACQUIESCENCE 63 Committee : ' Acquiescence and ratification must be founded on a full ' knowledge of the facts, and further it must be in relation to a trans- ' action which may be valid in itself and not illegal, and to which effect ' may be given as against the party by his acquiescence in and adoption ' of the transaction.' ^* In some cases the emphasis of the acquiescence approaches or reaches ' Great cost.' encouragement to spend, on the faith of a title known to be expected and yet withheld ; ^* in others the facts purport ' lying by ' or ' standing ' by,' while expenditure is laid out which is sought to be rendered more or less nugatory, and must be so if the deferred objection were successful.^^ But there can be no effective acquiescence, if the cost is incurred or continued after such notice to the disburser as redargues hana fides on his part.^* The fact that the outlay of expenditure has been large is a strong indication that the peccant operations were or must have been known to and acquiesced in by the objector or those who were in a position to bind him.^' Appljdng the principles set out in the foregoing pages, it seems safe to echo the ' jealousy ' ^* with which Courts regard a plea of acquiescence, and to hold that in the case of Aytoun v. Melville ^^ the Court of Session Aytoim v. went too far in giving effect to it. A miU lade on lands opposite to the pursuer's estate and immemorial was in 1778 or 1779 extended so as to accommodate a second mill, the water returning to the river below and not, as formerly, opposite to the pursuer's land. Action was brought in 1795 to have the extension abated ; but decree was refused simply on the groimd of mora and mere acquiescence, for the only other circum- stances reported were that tenants of the pursuer had carried flax to the lower mill ; that barley for the pursuer's family use was ground there ; that the defender had spent several thousands of poupds on the upper mill, the lease of which he had acquired on terms of letting to the tenant thereof the lower mill ; and that on the other hand the pursuer's author (during whose ownership the extension was made) was httle in Scotland. It was explained later «" from the Bench by a judge who had 1853, 17 Beav. 60, 51 E.R. 954. As to =" Dann, ^s ; Pilling v. Armitage, 1805, mortgagee entering into possession — Mold 12 Ves. at p. 85, per Grant M.R. ; V. Wheatcroft, 1859, 27 Beav. 510, 54 Rennie v. Young, 1858, 2 De G. & J. 136 ; E.R. 202. Davies v. Marshall, 1861, 10 C.B. N.S. 52 La Banque Jacques Cartier v. La 627; Crook v. Seaford Corp., 1871, L.R. Banque d'Espargne, 1887, 13 Ap. Gas. 6 Ch. 551 ; Hill v. S. Staffordshire Ry., Ill, 119 (payment of company's money 11 Jur. N.S. 192. to defray manager's own debt). " Passim, and esp. Jones v. Royal ** A Watercourse ; Short v. Taylor, Canal Co., 2 MoUoy 319 ; X>. Beaufort, "^ ; SMyro, p. 59; Cawdor W.Lewis, 1855, lY.&C. Somersetshire Coal and Canal Co., '= ; Ex. Eq. 427 ; Jackson v. Gator, 1800, 5 Ramsden, ^^ ; Wark, *«. Ves. 688 ; Williams, ^^ ; Rochdale Canal '^ Per L.J.C. Hope in Wark v. Bar- Co., '«; Laird, "'' ; Cotching, =>*. gaddie Coal Co., 1856, 18 D. at p. 775; " Clavering's case, ^4 ; Powell v. infra, p. 78. Thomas, " ; Rochdale Canal Co., =<' ; " 1801, M. Property, Appx. No. 6. Davies v. Sear, " ; T>. Beaufort, "^ ; ^'' Per L.P. Hope in Vt. Melville v. Proctor !). Bennis, 1887, 36 Ch. D. 746, 760. Douglas's Trs., 1830, 8 S. 841, where- 64 ACQUIESCEKCE been of counsel in this case that the answer to the last point was that a landed proprietor, if he goes abroad, is bound to have some representative or factor to superintend his estate, and thus prevent his neighbours from being rushed into the belief of his acquiescence and to build on the faith of it." Aytoun V. About the same date there had occurred the case of Aytoun v. Douglas. ^^ Douglas. ^ j^^^ ^^ immemorial eel-cruive dam-dyke across a river. It did not divert the water. His tenant altered the dyke so as to raise the water behind it, and diverted part of the water by two cuts above the dyke, to serve his factory, returning the water before the river left the lands of the opposite owner B. B knew of the diversion and gave the manu- facturer leave to take turf from his side of the stream to aid in altering the dyke. A purchaser of B's land sought restoration. The manu- facturer had spent thousands of pounds on his factory. It was held that B and the pursuer had not merely acquiesced in the diversion (which some judges thought would have been enough), but had positively rebus ipsis et factis ■ testified their approbation. The distinction between the two cases of Aytoun is thin, but, if the views here presented are sound, sufl&cient in law. M.Abercornv. Within a thirl a rival mill was erected in 1805 and worked without angmmr. judicial interruption till 1816. In the former year the pursuer, owner of the thirlage mill, wrote to his local agent and to his tenant that counsel had discouraged challenge of the new mill, probably on the erroneous ground that the title of the new miUer — which was a feu from the pursuer — per expressum bound him to grind only his malt at the thirl miU.. When in the latter year challenge was niade, the Lord Ordinary repelled it on the ground that the new mill had only ground wheat, oats, barley, and pease; But the Inner House reached the same result on the more stateable, though (it is thought) doubtful, ratio of acquiescence in the erection and in the possession for eleven years. ^^ E. Kinnoal v. A feuar built a wall ' for a pleasaunce ' on a river bank, except for a gap. There was a reservation in his feu-right of liberty to his superior, who owned the sahnon-fishings, to draw and dry his nets on that bank. The wall was sixteen years old, and had been built without objection being taken by the heir of entail in possession of the superiority at the time ; and if, as seldom occurred, that side of the river was used for Aytoun's case was said (by L. Craigie) " See Macgregor v. Balfour, 1899, 2 F. to have been of a peculiar character. The 345 ; and contra as to a town plot — Macnair case here cited turned on an admitted v. L. Cathcart, 1802, M. 12832. excambion interpreted by possession acquiesced in. It was foUowed in Dobie " ^^^^' ^- Property, Appx. No. 5. V. Hyslop, 1903, 11 S.L.T. 144. See also "* *^® "^^^^ *^''^^ '"^^^' ^ee Nicol v. Hope, another case which turned on the con- 16(^3. «■ 2220; Philorth «. Rathan Heritors, struction of a deed aided by surrounding ^^^^' ^- ^^^^' ^^""^^ homologation rather circumstances — Bank of ■ Scotland v. than acquiescence. Stewart, 1881, 18 R. 957. These may be «» Ms. Abercom v. Langmuir, 20th May short of prescription — Fraser v. Grant, 1820, F.C. 135. (Douglas v. Birrell there 1866, 4 M. 596. cited is Aytoim v. Douglas, supra.) ACQUIESCENCE 65 fishing, the user was had at the gap. It was held that right to object to the wall had been lost by homologation — really by acquiescence — and that such an heir could thus bind a succeeding substitute heir.^* Most of the illustrations given above relate to reUnquishment — inferred in regard to from conduct — of natural rights of property, and to the corresponding servAude nuisances thus put beyond cavil. But similar questions arise and are "gi^'s- more easily solved in favour of effective acquiescence where pubUc or servitude rights ^^ of user of land are alleged to have been abandoned, and the freedom of ownership thus restored. Thus the alternative to disuse of a pubhc right of way or servitude road for forty years or time immemorial, as proving abandonment of the right, may be acquiescence by the public or by the owner of the dominant tenement for a much shorter time in such obstructions as are physically incompatible with the user claimed. Such are the erection of buildings across the track, en- closures for personal enjoyment and the Hke, though not ordinary fences.*^ It seems doubtful whether ploughing and fencing across a prescriptive path for twenty or thirty years should have been held to infer abandon- ment by the owner of the dominant tenement.*' When a substitute or deviation road is provided in heu of a previous pubUc road or right of way, the ordinary rule that forty years' possession is necessary to instruct a new right has no application, and consent to the use of the substituted road by the public amounting to acquiescence by the landowner will create a right to the new road.** Similarly, where buildings had been erected in contravention of servitudes of hght and non altius tollend/i with the knowledge and acqtiiescence of the dominant owner, his singular successor, purchasing in knowledge of the existence of the buildings, was not entitled to have them removed, whether or not before his purchase he had seen the erection in progress, and whether he at the date of his purchase was aware of the ground of the challenge or not. Here the author's acquiescence was gathered from his standing by without objection, while expensive operations were being performed which were obviously inconsistent with the servitude, and after he had been served with a copy " E. Kinnoul v. Keir, I8th Jan. 1814, aff. 3 W. & S. 251, and 4 Mur. at p. 29 ; F.C. 515— founding on Aytoun v. MelvUle, Cuthbertson v. Young, 1852, aff. 1 Macj. sii^a. 455 (' a question of degree,' p. 459) ; '^ .In regard to the conatitution of Rutherglen Mags. v. Bainbridge, 1886, positive servitudes certain obiter dicta may 13 R. 745. See, in England, Johnson v. be doubted, viz. that ' if in consequence of Wyatt, 1863, 2 De G. J. & S. 18. ' verbal agreement the damdyke had in «' HUl v. Ramsay, 1810, 5 Pat. 299. ' this case been suffered by [the opposite See Scott v. Drummond, 1867, 5 M. 771. ' riparian owner] to be buOt, he would have e^ jjo^jer „. Hawthorne, 1884, 11 R. ' been barred personali exceptions from 767, esp. per L. Shand at p. 773 ; followed ' obliging [the builder] to demoUsh it, as in Cadell v. Stevenson, 1900, 8 S.L.T. 8 ; ' it was out of time to repent after the and Kinlooh's Trs. v. Young, 1910, 1 S.L.T. ' thing was done.' — Kincaid v. Stirling, 1, per L. Salvesen, and impUoitly in the 1750, M. 8403 (knowledge of family ; aid House of Lords. And see Thurrock with implements ; sending lint to the Board v. Goldsmith, 1915, 79 J.P. 17 ; and miU). Cuthbertson, supra, at 14 D. 466 ; Ruther- «« Rodgers v. Harvie, 1826, 5 S. 917, glen Mags., supra. 5 Bicket, 66 ACQUIESCENCE of the servient owner's application to the Dean of Guild, with plans." But the mere disregarding of such a notice by a dominant owner who resides at a distance and interferes as soon as he becomes aware of the scope of the erections will not infer acquiescence, more especially if the notice does not plainly exhibit the fact that a disturbance of the servitude is contemplated.'" Going beyond As indicated above, ■'1 it is requisite that the party aggrieved should permission. -^^ entitled to interfere and neglected to so.''^ In the cases just cited his interest and consequent title to sue were at once verifiable or even obvious. But in many cases of nuisance, depending on user and not on apparatus or plant, that is not so ; and the title to object only arises— and with it the interest to avoid even the appearance of acquiescence — when the harm has set in as a nuisance or an unduly enhanced nuisance. Thus tacit permission, alleged to have been given by one opposite riparian owner to the other raising an embankment, which (as it turned out) caused damage through the novel impact of the water on the complainer's side, was disproved by his protest against the erection and his action as soon Mmris v. as damage was actually done.''^ In the noted case of Morris v. Bicket '* there had been permission by riparian proprietors on one side of a stream to the opposite proprietor to build on the latter's side into the bed of the stream up to a certain line only. He built beyond, and inter alia pleaded acquiescence in the completed buildings. On this plea Lord Chancellor Chelmsford remarked : " ' There is no doubt as to the principle of the ' cases of persons standing by and permitting acts to be done which ' they are entitled to prevent. It is only just that a person who has been ' encouraged to continue expensive operations by the seeming consent ' of him who might have stopped them should be able to defend himself ' against any subsequent attempt to treat them as an encroachment ' upon the rights of the party who has so misled the other into the con- ' fidence that his acts were sanctioned. But in aU such cases knowledge ' of the acts done is essential to stop the party who has suffered the ' encroachment upon his rights from afterwards objecting to it. In this ' case there was an agreement between the parties, and it does not appear ' that the pursuers knew at first that the defender was exceeding the " Muirhead v. Glasgow Highland Soc, Wood, 1863, 1 M. 360 ; and of a minister 1864, 2 M. 429. who had consented to an exoambion of '» M'Gibbon v. Rankin, 1871, 9 M. 423. glebe land being barred from objecting The petition averred that the proposed to the erection of a mausoleum thereon — erections would be injurious neither to the Bain v. Ly. Seafield, 1884, 12 R. 62. conterminous proprietors nor to the public. " Johnston v. Scott, 1834, 12 S. 492. In Macgregor v. Balfour, "i, the water-; if e See also Farquharson v. Farquharson, 1740, was not obvious, and the singular sue- M. 12779, 5 B.S. 688, 3 W. & S. 244; cesser objected as soon as he knew of Campbell v. Ms. Bute, 1831, 9 S. 848; it. See also Broadbent v. Imperial Gas Aberdeen Mags. v. Menzies, 1748, M. Co., 1856, 2 Jur. N.S. 1132. 12787 ; D. Gordon v. Dug, 1735, M. " P. 62. 12778. " See case of heritor being in time to '* 1864, 2 M. 1082, aff. 4 M. H.L. 44 ; object to building part of a substituted L.R. 1 So. Ap. 47. church over his churchyard lair — Hill u. " 4 M. H.L. 49 ; L.R. 1 So. Ap. 56 ACQUIESCENCE 67 ' limits prescribed by the agreement. As soon as they were aware of ' the fact they objected to it. The defender, however, chose to go in ' face of the pursuers' objection. His proper course would have been ' to suspend his works until it could be ascertained whether he kept to ' the permitted Une or not. If he determined to proceed, in spite of the ' objection, it is difficult to understand how he can now claim the benefit ' of the principle of acquiescence, or how he can reasonably complain ' that he is compelled to reduce his building within the Umits agreed ' upon.' The pursuer's father had made drains to carry to irrigation land the HouUsvtorth sewage from lands feued or leased out by him. The defenders made wishaw. use of these drains after becoming a burgh and after the pursuer succeeded. An increase of the population of the burgh led to an increase of the sewage carried. The original use was with the pursuer's consent. Irriga- tion was abandoned. To a complaint of nuisance the burgh alleged {a) contract to receive all the burgh's sewage ; but this was clearly disproved, and most ' out. of the way,' and there was no writing ; and (6) that, having allowed the burgh sewage system to be joined to his own, he must be held to have acquiesced to receiving it in all time coming, and should have objected when the burgh formed its drains. The latter contention was thrown out as ' simply extravagant ' ; and Lord Kiunear, the Lord Ordinary, remarked : ' Acquiescence in a nuisance, so long as it is not serious, wiH not deprive a proprietor of his right to object to it when it is materially increased. Nor does it appear to me to make any differ- ence that he has endeavoured in the meantime to neutraUse it by operations upon his own lands or even to turn it. to advantage. . . . There is no evidence that the [burgh] system was carried out in reliance on any conduct on the pursuer's part.' '^ The distinction between non repugnantia to the erection of works increased which in use may cause a nuisance and tolerance of nuisance actually caused on the one hand, and acquiescence in an increase of nuisance on the other, is famiUar. The pursuer of an action to have nuisance abated had submitted to it for many years from friendly feehngs to its author. But things became worse and, as put by Lord Gifford, ' it would be most ' unfair as well as most unfortunate to hold that delay or reluctance to ' challenge an incipient and a growing nuisance will cut off altogether ' the right to challenge it to whatever height it may be carried.' " On the other hand, though acquiescence in a 2|-inch pipe wiU not warrant the insertion and use of a 9-inch pipe,'* a proprietor who had for ten years '» Houldsworth Per L. Moncreiff at p. 445. ^"^ Caledonian Debenture Co. v. Bernard, 1898, 5 S.L.T. 393. (The defender was u. man of business and substance, whose name might induce others to join.) ^"^ Aaron's Reefs v. Twiss, esp. per Lord Davey, [1896] A.C. at p. 294. 3»3 Lawrence's case, 1866, L.R. 2 Ch. 412 ; Kincaid's case, ibid., 420 ; Wilkin- son's case, ibid., 536 ; Peel's case, ibid.. 674; Oakes v. Turquand, 1867, L.R. 2 H.L. at lip. 351, 352. But this does not hold in a contest between him and a promoter — Downes v. Ship, 1868, L.R. 3 H.L. 343. '"* Taite's case, 1867, L.R. 3 Eq. 795. '»5 Stewart's case, 1866, L.R. 1 Oh. 574, sed queers,. s"* Ex parte Briggs, 1866, L.R. 1 Eq. 483. "" 1841, 1 Y. & C. C.C. 98, 62 E.R. 807 ; on appeal, 13 L.J. (N.S.) Ch. 268. ACQUIESCENCE 97 were issued with an addendum, that if further capital were required, it might be got by increasing the shares or by taking such other steps as might* appear advisable. Shortly after the flotation the directors inferred. resolved to make a call. The plaintiffs refused to respond and their shares were forfeited. The company after being unsuccessful began to prosper, and nine years after the forfeiture the plaintiffs sued to be let in on the profits. There was no satisfactory reason for the delay ; and, assuming the forfeiture to have been originally bad, the delay was held fatal, following the views of Lord Eldon^*^ and other judges in regard to enterprises which were subject to much uncertainty and fluctuation. This case was followed in 1910 by the Judicial Committee in regard to an attempted jugghng with shares between husband and wife.^"' Again, a lease of coal to many partners was really worked by only some of them, who, when it ran out, agreed to conduct the mine for their own sole benefit ; notified dissolution of the company ; got an agreement from the landlord for themselves only ; advertised sale of the plant ; intimated to the others their right to bid and their own intention to bid ; and made up accounts. Some of the other shareholders were paid out. The rest claimed profits of the new enterprise on the ground of constructive trust, but they lingered for nine years before suing. The action failed, the ratio being their delay and acquiescence. If the enterprise had failed they would have claimed exemption from loss.^^" At a meeting of the partners in a cost-book miue, it was stated that the mine was deeply in debt and a call was made on each of the six shares. Two of the members ■did not pay, and were besides in arrear for other calls. Their shares were then declared to be forfeited. After lying by for more than six years, they brought action proceeding on alleged irregularities in the forfeiture and claiming still to be partners.^i^ The case was held to be ruled by Prendergast, and to be distinguishable from the next case, as displaying a poUcy of ' wait and see. . . . Whether it be abandonment or ' estoppel seems to me to be indifferent.' ^i^ On the other hand, in Clarke Not inferred. V. Hart 313 forfeiture of a share in a cost-book mine could not be gathered from a confession by the partner that it was hable to be forfeited, parti- cularly as there were actings of the other partners which showed they .still regarded him as a partner. ' Where there is a vested right or interest ' in any party, the principle of law as now firmly estabUshed is that he ' cannot waive or abandon that right except by acts which are equivalent ' to an agreement or to a hcence.' ^i* ' If a party hes by and by his t '»8 In Norway v. Rowe, 1812, 19 Ves. at 673, 22 Beav. 125. See also AUoway v. p. 159 ; 2 Ves. Sup. 556, citing Lord Brains, 1859, 26 Beav. 575. Rosslyn in Senhouse v. Christian, 1795, =" Rule v. JeweU, 1881, 18 Ch. D. 19 Beav. 356, note. 660. =>»» Jones V. North Vancouver Co., [1910] '" Per Kay J. at p. 667. In Prendergast A.C. 317. . The proof of abandonment was it was held to be estoppel, more direct in Palmer v. Moore, [1900] "' 1858, 6 H.L.C. 633. Canvassed in A.C. 293. Lindley, Partnership, 7th ed., p. 515. 21" Clegg V. Edmonson, 1857, 26 L.J. Ch. "« Per L. Ch. Chelmsford at p. 656. 7 98 ACQUIESCENCE Joint adventure. Forfeiture of shares as a boon. conduct intimates to the other partners in the concern that he has abandoned his share, they may then deal with it as they please.' '" Where a person is obliged to apply for the peculiar relief afforded by a Court of Equity to enforce the performance of an agreement or to declare a trust, or to obtain any other right of which he is not in possession, and which may be described as an executory interest, it is an invariable principle of the Court that the party must come promptly, that there must be no unreasonable delay. . . . With regard to interests which are executed, the consideration is entirely different. There mere laches will not of itself disentitle the party to relief by a Court of Equity ; but a party may by standing by, as it has been metaphorically called, waive or abandon any right which he may possess and which under the circumstances, therefore, a Court of Equity may say he is not entitled to enforce.' ^^^ In Clements v. Hall ^i' the result differed from the result in Clegg, but the ground was that the deceased partner's legatee, who was sought to be excluded from the new lease, had been refused by the surviving partner for four years any information as to the mine. And in Palmer v. Moore ^^^ there was abandonment, and the remaining partner tacitly accepted it by working on at his own charges. The result of mora and acquiescence in barring a plea of constructive trust — as in Clegg's case — was also reached in a Scots case of joint ad- venture. One of the adventurers, who had joined in with the original concessionist, learnt that the latter, partly owing to the concession, had obtained a fresh coUaterg,l contract, but the former did not interfere. Nine years later the assignee of his bankruptcy trustee brought action of accounting for the profits made under this contract, but failed. The contract required expenditure to be disbursed, and skill in the manage- ment, and there was risk of loss.^^^ ' Claims for profits in joint adventures, ' particularly of a speculative character, must not be allowed to slumber ; ' and this has a special application to a .claim for profits made by some ' use of the property of the joint adventure which was not in contempla- ' tion of the contract ' of partnership. ^^^ In a winding up, one of the modes in which a person called on to contribute may escape liabiUty is by proving that forfeiture of his shares was competent, was intended, and was treated by himseK and the company as accomplished. Thus, where there was an irregular forfeiture for non- payment of calls, and the shareholder's name remained on the register, he (a much aggrieved member) had his name struck off the list of oontri- butories, seeing that for three years he had not been treated as, and had not claimed to be, a shareholder.^^i It is enough that the directors- hip Per L. Wensleydale at p. 665. "« Per L. Chelmsford at p. 655. As to this distinction, see further. Garden Gully Co. V. M'Lister, 1875, 1 Ap. Cas. at p. 57. 31' 1867, 1 r»e G. & J. 173. As to forfeiture in these cost-book oases, see 32 & 33 Vict. 0. 19, s. 18. ^i« [1900] A.C. 293. '" Stewart v. North, 1893, 20 R. 260. ''" Per L.P. Robertson at p. 268. '^1 Woollaston's case, 1859, 4 De 6. & J. 437. ACQUIESCENCE 99 having by the company's constitution power thereanent — have treated the forfeiture as completed, and the company is not entitled to rely on an omission in the procedure.^^^ Eetention of the name on the register is immaterial ; ^23 as also may be lack of notice to the shareholder, if he had actually dropped out of the concern. 32* The transaction must be really a forfeiture, not a deaUng in the shares by the company which was ultra vires.^^^ Similar rules apply to surrender of shares,^^* where that is competent Surrender of under the constitution of the company ^2' or under statute.328 ' If **™'- ' shares have been surrendered with the knowledge of aU the shareholders ' under circumstances fuUy disclosed to them aU, and such surrender ' has not been questioned for a considerable period, the company will ' be precluded from afterwards disputing the vahdity of the surrender ; ^^^ ' but not otherwise.' 2^" From a catena of cases ^^^ arising out of the liquidation of the Agriculturists' Cattle Assurance Company, Lord Lindley collects the following general doctrine : ?^^ ' (1) That a company ' will be precluded from disputing the vahdity of transactions sanctioned ' by a general meeting but not binding on absentees, if such transactions ' are bond fide and such as aU the shareholders, if sui juris, could sanction, ' and if it can be inferred that aU the shareholders were informed of ' them, and if no steps have been taken for a considerable time to impeach ' them.^^^ (2) That information on the part of all the shareholders, ' sufficient for the purpose in question, must be inferred from notices ' sent to them aU in the usual way, telling them what has been done ; ' but not from reports, etc., not distinctly giving them the information. ' (3) That powers of compromise and powers of forfeiture must be bond 'fide exercised for the purposes for which they are conferred, and that ' attempts to make them available for other purposes wiU not succeed.' ^^* It is not necessary that each individual shareholder has consented, pro- vided each who chose to iaquire had knowledge of what was being »22 Knight's case, 1867, L.R. 2 Ch. 321 ^^s Lindley, Companies, bk. iii. c. 5, (resolution of directors presumed to have in init. been passed owing to their later actings). sso ^^ Morgan's case, 1849, 1 De G. & S. '^ Woollaston,*^"^ ; Lyster's case, 1867, 750 (irregularity ; party still contributory L.E. 4 Eq. 233. about five years later) ; Stanhope's case, »2* Kelk's case, 1869, L.R. 9 Eq. 107 iggo, 3 De G. & S. 198 (director retiring ; (' a kind of cost-book company ' changing ten years). into a Hmited liability company) ; MarshaU 331 gpackman ; Evans ; Houldsworth, ■a. Glamorgan Co. 1868, L.R. 7 Eq. 129. i^ggg^ l jj 3 g^.L. 171, 249, 263 (Chippen- »" HaU's case, 1870, L.R. 5 Ch. 707. )^^^ arrangement). '2« See for general observations and fair „, ^^^^ ^^ ^^ ^ ^ g_ apudfin. compromises — General Property Invest- , ^ .„ , . 1 • ,i^ ^u j. ment Co. v. Craig, 1890, 18 R. 389 ; GiU v. ''' I ^]^f «^y ^. 232. "' E.g. M'Gregor v. Hunter, 1850, 13 D. 90; Munro v. Eraser, 1858, 21 D. 103; Dobie V. Ms. Lothian, 1864, 2 M. 788. "" Gibson v. Kirkland, 1833, 6 W. & S. 340, affg. 9 S. 596, per L. Wynford at pp. 351-2. *" Bankruptcy Act, 1913, ». 78. "■' Rather— he is bound personally to the third party, but may have relief against those creditors who set him on. ACQUIESCENCE 109 ^ come into the bankrupt's place, are bound to the same extent that the ' bankrupt would have been bound. ... He [the trustee] will not bind ' all the creditors personally, but those only by whose authority, express ' or implied, he has acted : what shall be held as an imphed authority ' must depend on the circumstances of the case. . . . Those who are ' subjected will be liable singuli in solidum and not 'pro rata according ' to their respective interests in the estate.' ^^^ In leasehold questions these principles have been frequently enforced, illustrated There is a strong presumption that the trustee and creditors do not *™'" '**'®^' travel beyond their ordinary rights and duties of reahsation. Thus a trustee may (it is true) render himself hable in damages but he will not be held to have taken over a lease and made himself responsible for the No taking rent by retaining possession pending the determination (adversely to him °^^'^' as it turns out) of a question of property in important fixtures, and by refusing to concur with the landlord in arranging for letting the subjects to some third party ; for, so long as he makes no use of the subjects himself, there is no possession in the proper sense of the term.*i* And where trustees for creditors, with the acquiescence of the landlord, entered into the management of a farm prior to sequestration, their intromissions, being merely tentative and liable to interruption at any moment, were held not to be such as to render them personally hable.*'-^ A lease provided for nuUity in the landlord's option in the event of the tenant's bankruptcy, and for its coming to an end at the first term of Martinmas thereafter. It stipulated that the rent payable for the last crop should be exigible by the landlord previous to the removal of any part of the said crop from the ground — a stipulation which was ineffectual to give the landlord any preference over other creditors of the tenant. The tenant became bankrupt in August, and in the interval before Martinmas his trustee cut and harvested the white crop, lifted the potatoes and part of the turnips, sublet some pasture, and fed a large number of milch cows partly on the produce of the farm. It was contended by the landlord that he had thereby taken over the lease and with it the above stipulation. But the Court was quite clear that there had been no taking over of the tack, but only a reahsation of the bankrupt's estate. ^i' The same result was reached where, the farm being wholly devoted to dairying, the trustee sold the stock and plant (with the consent of the commissioners) to the bankrupt's wife at a valuation, and took her bound to carry on the lease for the remaining six weeks of its duration and pay the servants' wages.^^' A bankruptcy trustee may be liable in damages for obstructing the landlord's resumption of the subjects *" Kirklaud v. CadeU, 1838, 16 S. "« M'Gavin v. Sturrock's Tr., 1891, 18 860, at pp. 881-2. See also pp. 895, R. 576. In Taylor's Tr. v. Paul, 1888, 897. 15 R. 313, the trustee expressly declined to "* Stead V. Cox, 1835, 13 S. 280. take over. "5 Dundas v. Hood, 1863, 15 D. "' Imrie's Tr. v. Calder, 1897, 25 R. 752. 15. 110 ACQUIESCENCE let, and yet free from liability for arrears of rent demanded on the ratio now in question. ^'^^ Taking over On the other hand, if the subjects be retained by the trustee for a ^™^^ ■ considerable length of time and under circumstances which are incapable of any other construction than acquiescence by him in the continued subsistence of the lease, he wiU be held to have taken it over.*i' It will be no answer that he adopted the lease in excusable ignorance of the existence of arrears of rent, provided nothing has been done by or on behaH of the landlord to stifle inquiry or induce a belief of immunity ; and it is not enough for him to prove that bills have been granted for the arrears if they have not been paid.*^'' Thus, where a trustee for creditors accepted an assignation of a lease, managed the farm for six months, and ingathered the crop for the year, he could not be held to have possessed otherwise than as tenant — the landlord having acceded to the trust-deed — with consequent personal habihty.*^^ Possession of a warehouse by the bankruptcy trustee of a firm, which was held to be assignee of the original lessee, was sufficiently proved by his having kept yarn stored therein and by his having the keys.*^^ Moreover, if the trustee founds on the lease a claim against the landlord, he caimot re- pudiate a counter-claim under the lease by the landlord, and must set off the one against the other in a ranking.*^^ It appears from these cases that time may be of the essence.*^* In a recent case *^^ a law firm had been dissolved on the terms that R, one of the two partners, should take over aU the assets and habiUties and reheve S, the other partner, of aU claims against him as partner. R's estate was thereafter sequestrated. The trustee, founding on the minute of dissolution, sued S for sums said 'to be due by S to the dissolved firm, and failed because the pursuer dechned to perform R's part of the agreement. S thereupon sought to make the trustee Hable personally for the outstanding debts of the firm on the ground of his having adopted the said agreement by suing on it, and many of the foregoing cases were cited as analogous. But the analogy aiid the action failed. ' The ' trustee founded upon the contract contained in the minute of dissolu- ' tion, but that is a very different matter from adopting it in the sense in ' which the trustee on the sequestrated estate of a farmer adopts a lease "« Richardson v. Scott, 1835, 13 S. 972. «2i MoncreifEe v. Ferguson, 1890, 24 The agreement in Forbes' Tr. v. Ogilvy, B. 47. 1904, 6 F. 548, to postpone questions of *22 j)j,g „_ Laing, 1845, 17 So. Jur. 272. set-off of rent and valuations was held not And see Mackessaok & Son v. MoUeson, to be a taking over of the lease by the 1886, 13 R. 445 (bankruptcy trustee liable trustee. The lease had been terminated as exercitor personally for ship's commit- by the landlord a month before the tenant's ments). sequestration. 423 Craig's Tr. v. Malcolm, 1900, 2 F. 541. "" Boss V. Monteith, 1786, M. 15290 ; "* See also Anderson v. Hamilton, 1875, Gibson v. Kirkland, supra. 2 R. 355 (sale of iron by instalment ,- «" Dundas v. Morison, 1857, 20 D. 225. trustee in mora, in taking up the contract). Contrast M'Lean's Tr. v. M'Lean's Tr., "s gturrook v. Robertson's Tr , 1913 1850, 13 D. 90. S.C. 582. ACQUIESCENCE 111 ' SO as to make him personally liable for arrears of rent due to the land- ' lord. Such adoption may be inferred from possession being taken ' of the subjects let when such possession is not merely for the purpose ' of reahsation of the estate. ... In such a case the position of the ' landlord is changed by the action of the trustee.' *^* The trustee had erred in bringing his action. But ' I know of no authority for holding ' that such a mistaken course, which is not said to have in any way ' prejudiced or changed the position of the pursuer, shouM have the ' extraordinary result of making the trustee personally responsible for ' the bankrupt's obligations towards the person whom he unsuccessfully ' sued.' «7 The claim of one, who has done work or yielded service, to pecuniary Wages or not ? remuneration generally or to special remuneration therefor may be barred by acquiescence. Baron Hume in noting a case ^^^ distinguishes between the position of persons who, being young and destitute, assist their relatives, their services being not more than a recompense for board, clothes, and education, and these persons when they have reached riper years and can earn board and competent wages elsewhere and save the expense of entertaining another servant. And Lord President Boyle *^^ remarked : ' Where there is a clear proof of service rendered and no ' wages paid, wages are due, unless it be made out that there is an agree- ' ment that the service is gratuitous ; and this presumption of law is ' not overturned by the circumstance that the parties are relations, ■ that the servant was poor, and that there was no express agreement ' for wages.' The case of bar is most readily made out when the work done is casual. A married neighbour of a filthy old man Hving alone performed domestic — and frequently disagreeable — services to him for three years after his sister's death ; and he had admitted verbally shortly before his own death that she had not been properly remunerated. But there was no contract, and the motive might well have been pure kindness of heart or the hope of a legacy.*^" Even where there had been stated service, wages were in one case disallowed, partly on absence of proof of employment, partly on fraud, and partly on the view that an unforis- famihated son of eighteen years of age was sufficiently rewarded by getting board and lodgings for his work as a mashman.*^! On the other hand, a woman was awarded wages — though for three years only— for domestic service yielded without express contract down to her employer's death. She had served for fifteen years, had been given a legacy in an abortive will, had had board and lodgings for herself and her child, '2« Per L. Salvesen at p. 586. *^' Shepherd v. Meldmm, 1812, Hume 394 »" Per eund. at p. 587. His Lordship ' ,o^r, „ t-, ,, , -^^ . , ,. , .... t In Anderson v. HaUey, 1847, 9 D. then shows that a trustees habihty for j- > expenses rests not on the fictitious contract ot litis contestatio, but on his becoming a '" Richie v. Ferguson, 1849, 12 D. 119. party to the case. See also Wallace v. *" Cowan v. M'Micking, 1846, 19 So. MiUer, 1821, 1 S. 40. Jnr- 91- 112 ACQUIESCENCE and had been allowed to earn money in the neighbourhood."^ In Shepherd's case a grandchild for thirteen years herded cows, did domestic work— all of it for more than half of the period— and nursed her grand- father for two years. She was held entitled to a suitable wage for the years which did not fall under prescription.*^^ In M'Naughton's case the domestic service was rendered from the age of ten to the age of twenty-five to, or partly to, an uncle, and the decree was for wages during the last sis years.*^* In Anderson's case the successful pursuer was a woman of sixty-two years,' a distant relative, who had assisted for seven years in the work of the dwelling-house in the way a hired servant would have done.*^5 In a later case the weak presumption *^^ easily rebutted in favour of the renderer of services was sufficient to let in proof where the work done by a father in his son's business was that of a vanman traveUing for sale and purchase.*^' In a subsequent case a son, thirty- three years of age, claimed wages as farm servant since majority. He had received board, lodging, and any desired pocket-money ; had never asked for or got wages; and had left without mentioning any claim. Proof was allowed — by writ or oath regarding the period which fell under the triennial prescription, and at large regarding the rest. But the claim was an after-thought, and the result was absolvitor ; and it was pointed out that a child's claim against a parent was prima facie weaker than a parent's claim against a child.*^* A converse attempt to enforce an accounting brought against a servant by his master's representatives was wrecked on a presumption that — no books of account being kept — there had been adjustment from time to time.*'* For extra The claim of a servant — and in particular of a whole-time servant paid by wage or salary — for extra or special remuneration in respect of services which may be regarded as being outside the scope of his general employment, has frequently been rejected by the Court if the claim is not timeously brought ; and the ratio on ultimate analysis is acquiescence. An estate factor, paid at first by annual salary and then by an annuity for life to the same amount, made up accounts and got adjustment "2 Adam v. Peter, 1842, i D. 599. A "6 Praser, M. & S. 44, and see the better report is in 14 Sc. Jur. 240, sub voce English cases noted there. Peter w. Rennie's Reps. In this and in the "' Thomson v. Thomson's Tr., 1889, more modem cases the triennial prescrip- 16 R. 333. L. Shand sketches some of the tion excludes belated claims, overruling relevant circumstances, as noted above. M'Naughton u. M'Naughton, 1813, Hume The order of proof should have been Jiabili 396, and Hume's observations in Shepherd, nwdo ; see next case. supra, ^'•', apud fin. As to abortive will "^ Miller v. Miller, 1898, 25 R. 995. In in a similar case, and the Statute of Jones's Tr. v. Jones and Dawson v. Frauds in England, see Maddison «. Thorbum, 1888, 15 R. 328, 891, the child's Alderson, 1883, 8 Ap. Cas. 467, and claim was not shown to be onerous under supra, p. 32. the Bankruptcy Acts. 433 Supra "*. "" Russell's Trs. v. Russell, 1885, 13 R. ^3^ jjj 331, following Stewart u. Maoonoohie's '^"^'■"' • Trs., 1836, 14 S. 412 (agency, UUteraoy, *^5 Supra, '"'. Lord Jeffrey doubted relationship ; no books kept). See also whether the triennial prescription applied. Condie v. Peddie, 1848, 10 D. 941 (two The oath was negative. brothers living together ; set-off). work ACQUIESCENCE 113 thereof each year. He was thus barred from claiming further emolument after an employment for thirty years.**" Where the question was raised by the salaried manager of a railway company after it was absorbed in another system, it was pointed out that the work of such an official was indefinite in extent ; and Lord Deas laid it down that there would have to be a specification of three things : (1) of the duties of the office for which the servant was originally engaged ; (2) of the extra duties performed by him ; and (3) of the agreement to give remuneration for the extra duties.**^ And this decision was followed for similar reasons in a modern case relating to an estate factor.**^ But the best illustra- tion of the effect of acquiescence and time is to be found in the case of Mackison v. Dundee Magistrates. '^^^ A burgh surveyor, a whole-time servant, paid by salary which was increased more than once, and subject to conditions and regulations prescribed or to be from time to time prescribed, was after thirty-eight years' service dismissed on refusing to do certain work without special remuneration. He had done much extra work for the burgh — as in the promotion of bills in Parliament — and had on three occasions received honoraria. After his dismissal he, and eventually his representatives, made a large claim for extra pay in respect of work said by him to have lain beyond the scope of his employ- ment ; but the claim was rejected. As put in the manner most favourable to him by Lord Chancellor Loreburn : He ' constantly had in his mind that he was to be paid ; he worked himself in the belief or at all events in the hope that his claim would be recognised, and that the respondents, the Town Council, treated it as a claim which was not summarily and without investigation to be rejected. I say that is the evidence, but as nearly forty years have elapsed since the commencement of this work, and most of the people concerned have died, it is manifest that a court of law will scrutinise with great care evidence of that kind before acting upon it.' His lordship then agrees with Lord Low in following the dictum of Lord Chancellor Selborne *** that, where there is a con- troversy of fact, delay in bringing forward the case increases in proportion to the length of that delay the burden of proof which is thrown on the plaintiff.**^ "» Rose V. E. Fife, 1806, 5 Pat. 115. for fourteen yeara barred claim for 2J per A servant might as well demand for the cent, more) ; Smith v. MaxweU, 1833, past extra wage for extra work if his 11 S. 323. master's business increased— Bell v. Drum- "" In C. D. v. A. B. (or G. v. M.), 1865, mond, 1791, Peake 45. See also Money v. 12 K. H.L. 36, 10 Ap. Cas. 171 ; and see Hannan, 1867, 5 S.L.E. 32. infra, pp. 121, 124. - Latham .. Edinburgh and Glasgow "' S^« ^/f^ special case m wMoh . Ry. Co., 1866, 4 M. 1084. ^"^^f^ °^ ^''"'L !t • ,1^ / f ■> ' ' road trustees might thmk his admimstra- "2 Mackenzie v. Baird's Trs., 1907 S.C. y^^ extravagant to the verge of dismissal, 838. tendered for years short accounts — Cave v. "' 1910 S.C. H.L. 27, affg. 1909 S.C. Mills, 1862, 7 H. & N. 913 ; also Van Hasselt ©71. And see Phoenix Ass. Co. v. Young, !)..Sack, 1859, 13 Moo. P.C.C. 185— shifting 1834, 12 S. 680 (commission at 5 per cent. items from account to account. 114 ACQUIESCENCE Bills and notes. In the Bills of Exchange Act 1882 **« there are many enactments referring to the requisites of ' reasonable hour ' **' and " reasonable time,' ; to delay/" to excuses for delay, **» and to waiver.^^o g^t these incite- ments to promptitude, in regard to documents so fugitive and transitory as bills and promissory notes, he beyond the province of this treatise. It may, however, be permitted to illustrate the doctrine of acquiescence or waiver from a few Scots cases. Thus, the objection — good or bad — that the name of the drawer of a bill was signed by another person -per proc. was imphedly departed from by the acceptors, after diligence begun on a fresh bill for a smaller sum, acknowledging that the latter was given in security for the former.*^i The drawer of a bill, acting for himself and for the acceptor, when it was about to become due induced the holder to refrain from presenting it for payment and to give a short delay, and then a longer delay. The holder, at the drawer's request and for the express purpose of collecting the contents from the acceptor, sent the bill to the drawer. On the acceptor's bankruptcy, the drawer's plea that there had not been proper negotiation was held to be barred ; for he had lulled the holder into the behef that there had been a waiver of negotiation ; and full payment would have been got from the acceptor, if the bill had been protested at maturity.*^^ A bill was dishonoured for non-payment, both acceptor and drawers being bankrupt. Nearly two years later the drawers, in reply to a demand for payment by the holders, wrote as follows : ' Though the bill is of old date, it will not be treated ' by us in anything but an honest way. . . . We should feel obhged by ' your not pressing us at the present moment.' This was held to be acquiescence in the lack of proper negotiation.*^^ Seeing that the rules as to negotiation are meant to safeguard the drawer and endorsers from harm, they do not hold where no harm coidd result. ' As the drawer was aware that the acceptor had no funds of his in his hands, he cannot plead that the ordinary rules of negotiation were not complied with or that he received no notice.' . . . And the objection ' comes too late, because I think it clearly proved that [the drawer], in the knowledge of the objection, agreed not to take it, if he got time. Delay was **' 45 & 46 Viot. c. 61. presentment for acceptance for honoiir, "' In presentment for acceptance, s. 41 ^' '^'' (la) ; and for payment, ». 45 (3). "° Waiver of performance of holder's duties, s. 16 (2) ; of presentment for pay- 448 In fiUmg up inchoate instruments, ^^^^^ ^ ^g (2e) ; of notice of dishonour, ». 20 (2) ; as to circulation of biU payable ^ g^ (26) (see Patrick, ««) as discharge, on demand, s. 36 (3) ; negotiation of bill ble only by writing or deUvery of payable at sight, s. 40 (1) ; dissent from the bill s 62 qualified aoceptance s. 44 (3) ; presentment ,,^ Mackintosh v. Macdonald, 1828, 7 S. lor payment of bill payable on demand, jgg s. 45 (2) ; notice of dishonour, ». 49 (12) ; ,^, Caims's Trs. ,;. Brown, 1836, 14 S. presentment of cheque, s. 74 ; presentment qqq of promissory note, s. 86. ,53 Allhusen & Sons v. Mitchell & Co., "» In presentment' for payment, 0. 46 (1) ; 1870, 8 M. 600, 1 B.C. 422. English cases in giving notice of dishonour, s. 50 (1) ; cited p. 602 ; cf. Watson v. Livingstone, in noting and protesting, s. 51 (9) ; in 1824, 2 S. 782. ACQUIESCENCE 115 ' granted to him, and it would be contrary to equity to allow him to take ' the objection now.' *5* The law relating to the adoption of forged bills and notes is treated Pleas cioaed elsewhere.*^^ Besides the positive obligations of acceptor, drawer, ['J) "roac- endorser, and maker, these parties are precluded ^^^ from denying certain ceptor of bill ,. 1--L -j-T !■• JO and maker oi things which may m fact be untrue, their signature involving representa- note, tions on the face of the instrument. The acceptor is held to represent the existence of the drawer, the genuineness of the drawer's signature, and his capacity, and authority to draw the bill.*^' ' The acceptor ought ' to know the handwriting of the drawer and is, therefore, precluded ' from disputing it.' *^* 'It is of immense importance that it should be ' understood as settled that a party who accepts a bill is thereby pre- ' eluded from disputing the drawing of that biU.' ^^^ But the representa- tion does not extend to a material alteration in the biU made without the acceptor's consent.*^'' Moreover, the acceptor cannot, in the case of a bill drawn payable to the drawer's order, deny the then capacity of the drawer to endorse ; but he may deny the genuineness or the validity of the endorsement.*^! ijj^g incapacity he alleges may arise from bank- ruptcy,**^ or from a corporation having no power to draw bills,**^ or otherwise. An innocent acceptor may be fixed with acknowledgment of a forged drawing, not of a forged endorsement, though the two signatures are in the same handwriting,*^* and he may deny an alleged authority to endorse.**^ If the drawer is a fictitious or non-existing person the bUl may be treated as payable to bearer.*'* Again, in the case of a bill payable to the order of a third person, the acceptor cannot deny the existence of the payee and his then capacity to endorse, but he may deny the genuineness or validity of the endorsement ; **' and the same is true of the maker of a promissory note.**^ The drawer of a bill is precluded from denying to a holder (6) To drawer. *5* Shepherd u. Reddie, 1870, 8 M. 619, recourse to his immediate party, and so per L.J.C. Monoreiff. See also Watt v. backwards. FuUerton, 1816, Hume 74 ; Hodgson v. *" Code, o. 54 (26) ; Robinson v. Yarrow, Bushby, 1783, 2 Pat. 607. 1817, 7 Taunt. 455. "5 Chap. VI., a-pud fin. "^^ Drayton v. Dale, 1823, 2 B. & C. 293 *56 This neutral word was at the request (maker of note ; bankrupt payee) ; Pitt v. of Scottish lawyers used in the Act, Chappelow, 1841, 8 M. & W. 616 (and see so as to cover estopped and personally 7 M. & W. 420) ; Braithwaite v. Gardiner, barred. 1846, 8 Q.B. 473, per Coleridge J. "' 45 & 46 Vict. c. 61, s. 54 (2a). "^ Halliiax v. Lyle, 1849, 3 Ex. 446, per "8 Cooper «. Meyer, 1830, 10 B. & C. Parke B. 468, per L. Tenterden C.J. ; Jenys v. *** Beeman v. Duck, 1843, 11 M. & W. Pawler, 1733, 2 Str. 946 ; Smith v. Chester, 251. 1787, 1 T.R. 654, per Buller J. ; Ashpitel v. *«= Garland v. Jaoomb, 1873, L.R. 8 Ex. Bryan, 1863, 3 B. & S. 474, 5 B. & S. 723 ; 216, and cases there. Smith ■w.-Marsack, 1848, 6 C.B. 486, and "« Code, s. 7 (3); Bank of England?;. cases there. VagUano Brothers^ [1891] A.C. 107 ; "» Sanderson v. CoUman, 1842, 4 M. Phillips v. Im Thurm, 1866, L.R. 1 C.P. 463. & Gr. 209, per Coltman J. 46 7 Code, s. 54 (2c). See Drayton v. *»» Burohfield o. Moore, 1854, 23 L.J. Dale, supra. Q.B. 261. The holder has then only "« Code, s. 88 (2) ; Drayton, sup^a. 116 ACQUIESCENCE in due course the existence of the payee and his then capacity to endorse.**' (c) To The endorser of a bill by endorsing it is precluded from denying to a holder in due course the genuineness and regularity in all respects of the drawer's signature and all previous endorsements ; *'" also from deny- ing to his immediate or a subsequent endorser that the bill was at the time of his endorsement a vaUd and subsisting bill, and that he had then a good title thereto. *'i An endorser is no doubt free from liability on a bill or note if it has not been duly negotiated ; he may, however, be barred from taking this plea, if he has paid nevertheless in whole or part, unless this was done in such error as will let in the condictio indebiti. "■''''■ The ' prima facie authority ' (in section 20) to fill up as a complete bill a stamped paper signed for any amount the stamp will cover, has been ascribed to estoppel.*'^ "9 Code, s. 55 (16) ; see Collis v. Emett, 1832, 2 C. & J. 425 ; Armani v. Castrique, 1790, 1 H.B1. 313, 1 Boss L.C. C.L. 115. 1844, 13 M. & W. 443. "0 MacGregor v. Rhodes, 1856, 6 E. & B. "" Patrick v. Whyte, 1912 S.C. 425. 266, and cases there ; Lambert v. Pack, "^ Schultz v. Astley, 1836, 2 Bing. N.C. 1705, 1 Salk. 127 ; Oitchlow v. Party, 1810, 544 ; and before the days of stamps^ 2 Camp. 182 ; Ex p. Clarke in re Livesey, Russel v. Langstaffe, 1780, 2 Doug. 514. 1791, 3 Br. C.C. 238, per L. Ch. Thurlow. And see the curious cases of estoppel in «'i Code, s. 55 (26 and c) ; Burchfield v. Ingham v. Primrose, 1859, 7 C.B. N.S. 82, Moore, supra. As to aval, see Code, is. 56 ; and Scholey v. Ramsbotham, 1810, 2 Steele n. Mackinlay, 1880, 5 Ap. Cas. 754, Camp. 485, where cancellation depended on 7 R. H.L. 85 ; and as to acceptance for whether tearing was into two pieces (as honour, see Code, ss. 65, 66 (2). And see might happen for safe postal transmission) furthe • Chamberlain v. Young, [1893] or into four, where that possibility was 2 Q.B. 206, 211. Thicknesse v. Bromilow, excluded. CHAPTBB V ACQUIESCENCE (continued) Mora or Taciturnity Mere mora, taciturnity, or silence has no legal result (a) where it is not introductioa. a breach of an express or implied condition of promptness,^ or (6) where it does not come up to the appropriate statutory period of prescription or to the common law equivalent (in certain cases) ^ of time immemorial. The former of these is illustrated mainly by cases of mercantile business which does not admit of the lapse of a considerable time ; and there the term used by the common law and in statute ^ is the ordinary term — delay. In regard to the latter prescription is here relevant only as being excluded or intercepted by something occurring in the course of the prescriptive or immemorial period and making it inequitable to have to wait until that full period has elapsed.* This interposing element is acquiescence ; it impUes consent ; and in the circumstances illustrated ia this chapter, it is invariably and has always been treated as one of the modes of extiuguishing an obligation.^ The true plea is acqui- escence ; mora or taciturnity does not yield a plea in law ; but in the cases herein dealt with it is usual and admissible to Unk all three terms together.* The cases are those in which length of time during which a creditor stands by without enforcing his claim — whatever be his motive — is an all-important element, leading to the inference that he has abandoned it. ' Mere delay or the mere lapse of reasonable ' time is one thing, but an inordinate lapse of time is whoUy different.' ' No one is entitled to ' keep a rod in pickle ' for an unconscionable time.^ It is not surprising that, in contrast to the systems ia which English law prevails, there is a wealth of illustration in our Scots 1 For a recent example, see Gatty v. * See a case where delay did no harm, Maolaine, 1921, 1 S.L.T. 51 (H.L.) — delay and was therefore of no legal significance — in paying recurring interest ; Paterson v. Masonic Co. v. Sharpe, [1892] 1 Ch. 154. Tod, 1828, 6 S. 1062, per L. Glenlee. ^ See Brsk. 3.7.29. 2 As to these last, see Young v. Guthbert- « Infra, p. 119. son, 1854, 1 Macq. 455 ; Mann v. Brodie, ' Per M'Gardie J. in Pearl Mill Go. v. 1885, 12 R. H.L. 52 ; L. Adv. v. Sinclair, Ivy Tannery Co., [1919] 1 K.B. at p. 83. 1865, 3 M. at p. 994, per L. CurriehiU. ' Stewart v. Brown, 1882, 10 R. 192, 8 E.g. in the Bills Code, 1882, ss. 46, 204 (known technical objection to sale of 50. land as irregular kept close for nine years). 117 118 ACQUIESCENCE Assets Com- pany cases. law, with its (absurdly) long period of forty years for the negative prescription — that prescription which alone infers abandonment. It may serve as an introduction to cite with some detail two recent decisions, involving the same question in similar circumstances, and reviewing many of the authorities.^ In these cases the surge of time reached high- water mark, and the brocard ' Vigilantibus non dormientibus ' jura subveniunt ' its strongest and (be it said) a hazardous illustration. In the first case liquidators of a company discharged a contributory from liability for further calls on his paying them a sum of money in pursuance of a declaration that a signed statement of his whole property was true and correct to the best of his knowledge and belief, and that any untrue statement made therein should invahdate the discharge. Twenty- two years afterwards (in 1901) a company which had bought the insolvent company's assets remaining at the close of the liquidation sued the contributory's testamentary trustees for reduction of the decree of ~ Court which had sanctioned the compromise and of the discharge itself, and for a sum of money, on the ground of non-disclosure of certain property belonging to the contributory at the earlier date. He had died and his estate had been wound up in 1882 ; his wife (whose succession had revealed the property said to have been concealed) had died in 1888 ; three of the four liquidators and three of the four sanctioning judges were dead ; friends consulted were dead ; and many private and relevant papers had perished. The Lord Ordinary, Lord Kyllachy, threw the case out on mora, that is, ' time and circumstances.' In the Inner House proof before answer was allowed, thus negativing the plea of bar. On advising the proof, the seven judges, who reviewed the Lord Ordinary's judgment, proceeded on a consideration of the merits ; but some of them discussed the plea of mora in accordance with Scots authority. Thus Lord President Kinross remarked : i" 'It appears to me, however, that the plea of mora cannot be successfully maintained merely on account of the lapse of time, but that the person stating it must also be able to show that his position has been materially altered, or that he has been materially prejudiced, by the delay alleged.' " After referring to prescriptions and hmitations, his Lordship proceeded : ' At ' the same time I do not doubt that where, coupled with lapse of time, there have been actings or conduct fitted to mislead, or to alter the position of the other party to the worse, the plea of mora may be sus- tained. But in order to such a plea receiving effect, there must, in my judgment, have been excessive or unreasonable delay in asserting a known right, coupled with a material alteration of circumstances to the detriment of the other party.i^ . . . Accordingly the usual » Assets Co. V. Bain's Trs. and Phillip's mora or taciturnity not beins a plea in Trs., 1904, 6 F. 676, 693, 754; rev., [1905] law. A.C. 317, 7 F. H.L. 104. 12 citing C. B. v. A. B., per Selbome 10 g ji 705. L- Ch., 12 R. H.L. 36 ; and Mackenzie v. Cotton's Trs., per L. Deas, 5 R. 313 — ' vwra " See also per L. Young at p. 707, as to 'is not a good nomen juris.' MORA OR TACITURNITY 119 ' and proper mode of stating the plea is that the action is barred by ' mora, taciturnity, and acquiescence, and the facts on which the plea ' so expressed is founded are set out on the record.' Similarly, Lord Trayner ^^ puts the doctrine succinctly in three propositions : ' (1) That ' delay per se, so long as it is within the years of prescription, does not ' bar a pursuer's claim ; (2) that, to avail a defender anything, it must be ' delay in prosecuting a known claim — that is, a claim known to the ' pursuer to exist ; and (3) that the delay has been prejudicial to the ' defender in depriving him of evidence which would or might have ' supported his defence.' " Lord Moncreiff proceeded on much the same lines as the House of Lords in giving effect to the plea of bar.i* The other case ^* related mainly to an alleged concealment of shipping Continued, shares twenty years before the action was brought. At the date of the compromise they were valueless and were not expected to become, as they did become, of value. The result in the Court of Session was the same in this case also : the plea failed. In both cases there was a reversal in the House of Lords, without Assets Com- differentiating the one from the other ; and the matter was put thus by fhrHous^e if ^ Lord Halsbury L. Ch. : ' All I shall say about either of them is that at Lords. ' this distance of time I shaU make every intendment in favour of that ' having been honestly done which purported to be done. I think I ' should expect some evidence to be produced contradicting that state ' of things rather than insist on evidence in its support at this distance ' of time and with the loss of evidence that undoubtedly has occurred ' from the delay that has taken place. I should be content to rest my ' judgment on the language of the Lord Ordinary himself,^' in which, ' on both occasions, he has pointed out, I think with great force and ' accuracy, the result that ought to follow from the absence of evidence ' which has been the fault of those who are the pursuers here — that is ' to say, they have lain by upon their supposed rights all this time, during ' which time witnesses have died and the means of explanation have ' disappeared also to an extent which, to my mind, renders it impossible, ' or at all events extremely inexpedient as a matter of law and administra- ' tion, to allow these things to be ripped up at this distance of time when ' both the opportunities of explanation have gone by and when witnesses ' have passed away.' ^^ This proceeded, ' not upon any question of ' technical law, but upon broad common sense, and especially upon ' the two principles above enunciated. ^^ Lord Davey added the caveat : ' I am not treating nwra or delay as a plea in law. I do not think it is " 6 B. 740. i« Assets Co. v. Phillip's Trs., «, 6 F. ^* As to the last, see Banner v. Gibson, 754, reT. as above, heard and adjudged and 1830, 9 S. 61 ; Osborne v. Brown, 1832, appealed together with Bain's Trs. 10 S. 546; Skyring v. Greenwood, 1825, ,, ^ t^ „ , . ^ t^ oo. ^ ,.«. 4B&C281 ^' Kyll^f'iy ^* 6 ^- 684-5, 694. . 16 6 F. 748. The above doctrines is [1905] a.C. 333, 7 F. H.L. 108. adopted by L. Mackenzie in Lees' Trs. v. Dun, 1912 S.C. at p. 8. " Ibid., 329, 106. 120 ACQUIESCENCE Obserrations thereon. Dicta of English judges. Company cases. ' a plea in law ; but I think the lapse of time is a circumstance which ' ought to be taken into account, and ought largely to influence our ' estimate of, and the conclusion we come to upon, the facts of the case. '^^ It thus appears that the opinions of the Scottish judges above cited are in entire consistency with the law regarding acquiescence, as already expounded, and that in the House of Lords the very same arguments which are usually adduced in justification of the statute law of pre- scription are applied to periods short of the long negative prescription. It may be suggested, therefore, that the cases were treated as special, depending on onus in the reduction of a written contract, assumed to be honestly made, and in particular of a compromise or transaction — a contract of unusual potency, where error is aUeged.^^ Before proceeding to Scottish dicta and decisions, it seems convenient to cite, as statements of equity, the remarks of certain distinguished Enghsh judges. Where a claim to a legacy was staved off for a long period by what might in an English Court of Equity be called a fraud, though there was no dishonesty. Lord Blackburn said : ^^ ' Where there ' has been a breach of trust and you come to a Court of Equity for rehef, ' acquiescence during a period short of twenty years would bar it. I ' take it, that there must be not only a lapse of time,^^ but also something ' which amounts to acquiescence,' e.g. encouragement to the party pleading it to spend money on an estate, or standing by and seeing that he was altering his position. 2* In a company case, where there had for eighteen years been a general knowledge of, and acquiescence by all concerned in, an arrangement (for the retirement of certain shareholders) which was not in terms of the company's constitution. Lord Cairns L. Ch. remarked : ^^ 'In my ' opinion lapse of time alpne certainly would not make valid that which ' was at the beginning invalid. But you have to consider also what ' was the knowledge possessed by the company at large, that is to say, ' by the shareholders in the company at large, of the arrangement, and '"' In the earKer cases of similar claims by the Assets Company, the plea was not taken, or not pressed, and not given efieot to— Assets Co. V. Palla's Tr., 1894, 22 R. 178 ; Do. V. Shirres' Trs., 1897, 24 R. 418 ; Do. u. Tosh's Trs., 1898, 6 S.L.T. 96. Issues to try mora and acquiescence in faiUng to detect a banking fraud are given in Graham v. Western Bank, 1864, 2 M. 559. 21 See Stewart v. Stewart, 1839, M'L. & Rob. 401 ; Kippen v. Kippen's Trs., 1874, 1 R. 1171 ; L. Adv. V. Wemyss, [1900] A.C. 48, 2 F. H.L. 1 ; Lindsay Petroleum Co. V. Hurd, 1874, L.R. 5 P.C. at p. 240 ; approved in Erlanger v. New Sombrero Phosphate Co., 1878, L.R. 3 Ap. Gas. at pp. 1230, 1279; Dixon v. Evans, 1872, L.R. 5 H.L. 606. 2^ Thomson v. Eastwood, 1877, 2 Ap. Cas. 215, 236, at p. 257 ; see also Mills v. Drewitt, 1855, 20 Beav. 632, 638. 2« See Blair v. Bromley, 1846, 5 Hare 542 ; In re Eustace, [1912] 1 Ch. 561 (following assets) ; cf. Blake v. Gale, 1883, 31 Ch. D. 196 ; Richards v. Browne, 1837, 3 Bing. N.C. at p. 499 ; Jewsbury «. Mummery, 1812, L.R. 8 C.P. 56 ; In re Baker, 1881, 20 Ch. D. 230 ; In re Birch, 1884, 27 Ch. D. 622 ; In re Hallet's Estate, 1879, 13 Ch. D. 696. ^* There was none such in the case, but laches excluded interest for more than six years back. '^ Evans v. Smallcombe, 1868, L.R. 3 H.L. at p. 253 (the Chippenham arranger ment). MORA OE TACITURNITY 121 ' what was the knowledge possessed by the company of what was being ' done under the arrangement. . . . If ^^ by acquiescence is meant a ' course of conduct which amounts to active and intelligent consent, ' I think it very likely that many of those shareholders could not be ' held to have actively or intelligently consented to what was going on. ' But what I think is the real question to be looked at in any case of this ' kind is this : — Had the shareholders notice of the way in which the ' affairs of the company were being conducted and its property was ' being managed, and of the rights and interests which were being created ' with regard to the stock of the company ? If they had that notice, ' and if they were content not to oppose those acts which they knew were ' every day being done, then I think they are debarred in point of equity ' from coming forward at a later period for the purpose of undoing the ' rights and releases, which had been created and given, although it ' might well be that any remedy to which they would originally have ' been entitled against the executive of the company, for any breach of ' duty on their part, might be unaffected even by lapse of time.' ^' In a Scottish case of nullity of marriage on the ground of the husband's impotency impotency, one of the defences was the delay of five years and a half after '^^^' the date of the marriage before the wife raised declarator. Lord Selborne L. Ch. remarked : ' What I understand all the authorities to say upon ' the subject of time is that time, like any other circumstance of conduct, ' is a very material element in the investigation of a case which upon ' the facts is doubtful. Where there is a controversy of fact, delay in ' bringing forward the case increases, in proportion to the length of that ' delay, the burden of proof which is thrown upon the plaintiff. But ' that there is any definite or absolute bar arising from a certain amount ' of delay is a proposition which I apprehend cannot be established ' either by any Scotch or by any BngHsh authorities.' ^s In Scots law the leading authority is Lord Glenlee's opinion in the in Scots Law.! case of Cullen v. Wemyss.^* That was a case in which the claim arose Cutten, v. ex lege and not ex contractu. A daughter (with her husband in her right), *'"^*'" having three years and a haK after her father's death in 1828 accepted a sum of money in fuU of aU legal claims against his estate and drawn interest thereon for years, claimed from his trustees in 1835 a share of the goods in communion which (under the old law) fell to be paid on her 26 p. 256. "' 6- "• M. or C. B. v. A. B., 1885, 10 Ap. " A shareholder allowed out by the Cas. at p. 189, 12 R. H.L. at p. 40 ; arrangement was therefore relieved from adopted by L. Lorebum in Mackison's UabiMty as such. See also (on the same Trs. v. Dundee Mags., [1910] A.C. 285, arrangement) L. Cranworth in Houlds- S.C. H.L. 27 ; especially in a case where worth V. Evans, 1868, L.B. 3 H.L. 263 at a public body is sued by a servant for p. 276 ; contrasted with Spackman v. remuneration for extra services — see per Evans, ibid., 171. As to the difficulties L. Shaw, p. 31. of so letting partners out, see Morgan's '' 1838, 1 D. 32. A better report is in case, 1849, 1 Mao. & G. 225 ; In re 11 So. Jur. at p. 63, from which the quota- Vale' of Neath Co., 1852, 21 L.J. Ch. tion is taken. And see Howden ?;. Howden, ■ 688 1841, 3 D. 388. 122 ACQUIESCENCE Lord Glenlee's opinion. Bolsou V, Bywater. mother's death in 1810. The claim was repelled largely on the grounds of acquiescence, homologation, and discharge express, though in general terms. His Lordship in the leading opinion is reported to have said : Obligations may, in many cases, be extinguished by taciturnity, without any positive rule of prescription applying to them. Indeed prescription seems more applicable to obligations as to which writing does or may intervene ; and what can be more reasonable in itself or more con- sistent with the doctrine laid down by our authorities than, in regard to such claims as the present, where the parties had opportunities of meeting each other frequently, and where they appear to have had other money transactions, to presume that any claim which ever existed for any share of the goods in communion belonging to the wife had been fuUy satisfied ? ^" And, if there be no other evidence of this, the mere taciturnity for so long a period is quite sufficient.' His Lordship then refers to presumption of payment of bonds in Bnghsh cases and proceeds : ' Now, I think there is a great difference between claims constituted by written deed and so shown to be obhgations and those claims which arise out of certain facts which have occurred. In our law, when opportunities of setthng these last happen every day, do such claims last for forty years ? The old Statute of Prescription had reference to written obhgations ; but in respect to the other class, such as this, they are cut off by taciturnity, a most valuable rule, which is adopted in England. This pursuer [the husband] comes too late, even if he had claimed instantly on his father-in-law's death, while really he has been taking benefit under the settlement, acquiescing in and homologating it.' A similar though more compUcated state of facts led to the same result. Under the old law B's executrix ad omissa et non executa and residuary legatee claimed B's share of the goods in communion falling to him through the death of his mother in 1844. The claim was made against the executors of B's father shortly before 1870. In the interval — in 1855 — B had died leaving his father his executor and narrating in his wiU that his own children would naturally inherit from his father. The pursuer did not then make the present claim and gave her father-in- law a full discharge. B's father when marrying again (in' 1862) made an irrevocable provision for B's children. On the advice of the pursuer's second husband— a lawyer, whom she married in 1867— the action was brought.31 Lord Deas put the practice of the Court in a nutshell : ^2 ' It ' has been fixed from an early period that facts and circumstances may ' exclude a claim of this kind within less than forty years. Claims inter ' familiam have undoubtedly been held in some cases to have been waived ' and in others to have been satisfied or sopited, without any actual ' discharge having been granted or the prescriptive period having elapsed.' '" The pursuers had married in 1814. '^ Eobson V. Bywater, 1870, 8 M. 757. =2 At p. 762 ; and see L. ArdmiUan's distaste for taciturnity or mere silence as a plea, and the necessity for conduct and transactions, p. 761. MORA OR TACITURNITY 123 Against the duply that all parties were ignorant of the claim, Lord Kinloch ^^ was of opinion that this could not be assumed — at least of a legal practitioner — and also held such ignorance to be irrelevant — apparently on the ground that the actings of parties would have been very different if the belated claim had been made in 1855 or 1862. At the latter date there had been something in the nature of a family trans- action or compromise. On this last point there is an important judgment of Lord Thurlow Douglas v in a Scottish case.^* Testamentary trustees were, amongst other powers, ^^""V- given power to ' compound, transact, and agree.' They delegated to one of their number as factor to ' uplift, ingather, call for, and discharge ' debts. The trustees had held a ranking for nearly £4000 on an estate. The factor discharged it for about £500 less — that sum being almost certainly the amount of penalties usually abated. The trustees twenty-five years after the date of the discharge brought against the debtor's heir an action of reduction of it and for payment of this sum. It was held that after such a long period it must be presumed that the trustees ordered or sanctioned what had been done by their factor. ' Acquiescence on ' their part for such a length of time must be held to carry, not a pre- ' scription, but a presumption of reason, that those persons with all the ' opportunities of knowiag the circumstances of the case, which it is ' evident from this cause they had, were satisfied with the acts of the ' factor. There would otherwise be no security whatever in the affairs ' of men. If no challenge were brought in a reasonable time, but if they ' forbore to stir in the matter when it was brought before them again ' and again, it affords a demonstration that they saw some reason why ' they should not stir in it at all.^^ . . . Upon the whole, according to ' my apprehension of this case, not half the circumstances were neces- ' sary to confirm the discharge ; the mere acquiescence on the part ' of the trustees for the -space of twenty-five years would have been ' sufficient.' ^® Lord Glenlee's opinion in Cullen was founded on in a case where, Cook v. North there having been bodily injury suffered by a railway servant and due y^ay Company. to a railway collision, he, employed thereafter by the conipany in light work for twenty-five years, brought action of damages against the com- pany for being dismissed or for having been injured. The suit was dis- missed on the ground of mom?'' ' The word mora suggests mere delay ; ' but I am free to admit that in the ordinary case delay of itself is not ' sufficient to establish a plea of mora, and that abandonment must be ' impHed in the delay. But when the claim is one which requires con- ' stitution, such as the claim in the present case, I think the plea of ' mora wUl be justified by delay for a certain length of time in constituting ' the claim. In such a case presumption of acquiescence or abandon- 33 p. 765. =* P. 11. 3« Douglas V. Murray, 1797, 4 Pat. 4. " Cook v. N.B. Ey. Co., 1872, 10 M. 3s p 9 513. 124 ACQUIESCENCE ' ment is not required. I do not think that this poor man ever acquiesced ' or abandoned his claim against the railway company, but his failure to ' constitute a claim was an injury to the defenders, which justifies the. ' plea of mora.' '* ' It is not mere delay or lapse of time which makes ' mora, but delay which makes the other party to believe that the claim ' has been given up.' ^^ After referring to loss of evidence and the necessity of promptness in bringing actions of damages, for example in respect of slander or assault, Lord Neaves proceeds : ' As Lord Glenlee ' says in a question of taciturnity, wherever such a lapse of time has ' occurred as to .place the opposite party to disadvantage and to make ' him think that the claim has been sopited, the law will hold it to ' be so.' *» Lord Where reduction was brought of certain assignations, whereby a signifcM^e^of brother was averred to have bought up by fraudulent representations time. yg sisters' shares of a succession for inadequate sums, and the date of the action was thirty-seven to thirty-nine years after the dates of the assignations,^^ Lord Brougham spoke of the significance of time as follows : ' No time will run as a common law limitation against fraud. ' . . . No time, say the Scottish lawyers, can be taken as a bar to an -' action of reduction Uke this unless time and acquiescence be specially ' pleaded. . . . But that it should not enter into our consideration — ' that it is to be entirely dismissed from our minds — that, as a suggestion, ' it is to have no effect upon us in moulding our opinion, as it were, and ' influencing the frame of mind in which we shaU be, when we have to ' consider the rest of the case, either as a jury upon the facts or as judges ' upon the law, to that proposition I cannot assent. ... I hold that ' the consideration of time is most material and . . . lying bye is most ' material to be considered and that it must tell against the party, if ' there be no explanation or rather if there be no satisfactory excuse ' for it. . . . In such a case as the one before us the party must be held ' to the very strictest proof in regard to the facts . . . and in regard ' to the pleading.' *2 Thus lapse of time does not amount to personal bar : it counsels caution. Lord Eidon In an earfier case which went to the House of Lords ^^ the law agent (A) of lender (B) and borrower negotiated a loan with collateral security in the form of an assignation of a bond due to the borrower by a third party, but neglected to intimate it. The borrower failed ; the assigna- tion was not referred to in his bankruptcy ; and twenty-five years after the date of the loan A's representatives were sued for the deficit after '8 Per L. Benholme at p. 516. « pp 217-220. See also the opinion 3» Per L. Neaves, Aid. of the judges where there was delay in *" See also Mackison's Trs. v. Dundee bringing a reduction after the pursuer was Mags., 1909 S.C. 971, aff. 1910 S.C. H.L. in fuU possession of the whole circum- 27, per L. Low and L. Ch. Lorebum, stances— Harrison v. N. of Scotland Bank, quoting L. Selborne, supra, p. 113. 1890, 28 S.L.B. 162. " Irving V. Kirkpatrick, 1850, 7 B. Ap. «? Macdonald v. Maodouald, 1819, 1 186, revg. 10 D. 367. BUgh 315, afEg. 13th Deo. 1816, F.C. 234. on taciturnity. MORA OE TACITURNITY 125 allowing for dividends paid. B had all along expressed the utmost satisfaction with A's management ; and the pursuers, who were B's representatives, had granted a full discharge to A for his intromissions in ignorance of the neglect averred. A was aware of the borrower's embarrassments four years after the date of the loan. B was ' a person ' of ignorance ' and the pursuers acted as soon as they had information. It was held that the defenders were liable. Lord Eldon L. Ch. remarked : ' Though nothing is more important than to hold professional men to ' accuracy, yet on the other hand they ought not to be made to account ' twenty-five years after a transaction, if the circumstances of the parti- ' cular case make it unreasonable ; but circumstances are to be considered. ' Whether B knew the law of intimation is doubtful, but A must ' have known it and ought to have acted upon it. That is taciturnity ' not of B but of A. . . . Professional men must be strictly held to ' such accuracy as to give security to their employers. Lapse of time, ' under circumstances, may be an excuse, but the former principle pre- ' ponderates here.' ** Two cases have been reported in which the 'question at issue had Reduction of been timeously raised in Court. In the earlier of the two the facts were absence" thus stated by Lord Brougham in remitting the cause to the Court of Session : ' An estate is sold in 1775 and possessed for eleven or twelve ' years by the purchasers. The conveyance is set aside by two decrees ' in absence in 1786 and 1788, which the vendor's creditors and heirs ' obtained. At the date of these decrees the purchasers' heir is a minor, ' and for ten years afterwards. He then attains majority and lives ' nine years and dies leaving infants, one of whom attains majority in ' 1818 and lives twelve years, when at length she brings with her co-heirs ' an action to set aside the decrees and all the titles made to purchasers ' on the faith of them for forty-four years.' *^ On the remit it was agreed that on account of minorities prescription had not run against the decrees in absence, as the law regarding such decrees then stood. But (in the words of a majority of the whole Court of Session) *^ ' the lapse of a shorter ' period, when combined with other circumstances, affords a plea of ■ personal exception, or may have a most important effect in determining ' that general question of which the pursiier of an action of reduction ' of a decree necessarily undertakes to make out the affirmative,' viz. ' whether in the whole circumstances of the case the decree ought or ' ought not to be reduced.' A proof was allowed ; the pursuer led none ; and among the elements of the decision in favour of the decrees was the lapse of time, ' as raising a presumption that the party acquiesced ' in the decrees from a consciousness of their having been justly ' obtained.' «' " Pp. 335-7. See also Gillespie v. Dods, 1857, 19 D. 475 ; " Sinclair v. Campbell's Trs., 1837, 13 Bell v. Gunn, 1859, 21 D. 1008. S. 594, 2 S. & M'L. 103 (the narrative above " At 15 S. 772. is at p. 137), 15 S. 770 ; sequel, 3 D. 871. " Per L. FuUerton, 3 D. 873. 126 ACQUIBSOENCE Timeous pro- ceedings dropped. Alleged mora by trustees. Lord Jeffrey on mora. The other case *» related to a claim for aliment of a bastard. Pro- ceedings were taken at once ; dropped then ; and revived nearly forty years later. Nothing could have been recovered at first or during this interval, after which the defender came into money. The plea of mora was repelled. ' Silence in itself is not taciturnity. In order to found the plea, the relation of the parties and the whole surrounding circum- stances must be considered, and unless these, coupled with silence, are sufficient to infer a presumption of payment, satisfaction or abandon- ment, there is no ground for the plea.' *"* Effect cannot be given to mere taciturnity unless the conduct of the party could not have been such as it has been on any other supposition than that he did not intend to make a claim.' ^^ On the ground that they were acting for the trust estate, assumed trustees were not too late thirteen years after the assumption in recovering from a former trustee funds which he and his fellow-trustees ought to have recovered. They could do so even if they themselves were culpable in not suing sooner.^^ So that, as Lord Dundas observed, ^^ taciturnity was irrelevant. But Lord Salvesen dealt with the matter and in par- ticular with the question of imputed knowledge being enough to start mora, and of ' mere silence ' as presuming abandonment, and said : '^ ' A man cannot be presumed to discharge or abandon a claim which he ' did not know existed, even where it may be said that he could easily ' ' have ascertained what his rights were on inquiry.' ^* The strongest judicial expression of distaste for the doctriae of taciturnity is to be found in a case ^^ where, a father's succession having shortly after his death been wound up as intestate, a will, m the custody of the pursuer, was thirty-one years thereafter discovered, giving the testator's daughter, the pursuer's wife, a legacy and a share of the residue. Taciturnity, as a bar to proof, was rejected 9n the ground of the alleged ignorance of the existence of the will ; and Lord Jeffrey lamented the doctrine as ' vague and alarming, committing to the discretion of the ' Court more than should be committed to the discretion of any tribunal. ' It allows the judges to trample down the rights of parties, according ' to their individual feelings as to the hardships of the case. ... It is ' anomalous to say, that, besides the ordinary prescriptions, there is *= MonoriefE v. Waugh, 1859, 21 D. 216. A similar case is Meh-ose v. Bruce, 1855, 17 D. 965 (nineteen years). In Arbuthnot V. Symon, 1834, 12 S. 590, the mother had for twenty years taken the father's parents as her debtors. There were also successive actions in Currie v. Ford, 1828, 6 S. 1119. " Per L.J.C. IngUs. See also L. Cowan's obs. adopted by L. Salvesen in Lees' . Trs. v. Dun, 1912 S.C. 50 at p. 64. =» Brisbane's Trs. v. Lead, 1828, 7 S. 69, per L. Glenlee ; and see Bell v. Gunn, *'. «i Lees' Trs., supra, aff. 1913 S.C. H.L, 12. 52 1912 S.C, at p. 62. 5^ See p. 121, supra. 5« 1912 S.C. at p. 66. As to the title of an heir substitute in an entail to open up accounts between the entailer's trustees and the institute, and the disabling effect of thirty-seven years' delay, see Maopherson V. Maopherson, 1841, 3 D. 1242. TwO' actions to which he had been called as a. party had intervened. "s Seath V. Taylor, 1848, 10 D. 377. See also per L. Ardmillan, supra, p. 122. MOEA OK TACITUENITY 127 ' still another called taciturnity, and, though, after the authorities ' quoted, I cannot deny that it exists, I would shrink from applying it. ' Where it has been apphed, you will find this, that the parties were all ' in a low condition of Ufe, and could not afEord the means of giving a ' regular discharge of their claims.' s« On the other hand, ' the strongest case for the appKcation of the Effect on an ' doctrine ' was in this wise : " The claim was made by a grand-nephew b™qufsT"* of the testator fifty-three years after the latter's death. There was an ambiguous bequest, which, besides giving the widow> an express fee of part of the deceased's estate, enabled her to dispose freely of the rest for her comfort. Moreover, there had aU along been next of kin who were sui juris. There was an obvious occasion or opportunity for making claims when the widow remarried after fifteen years of viduity ; and it was only after her second husband's death that the present claim was made by the pursuer as one of the testator's next of kin — substantially for an accounting — against the representatives of that husband, qua intromitters. The claim was held to be barred by taciturnity. ' I own ' I never had so clear an opinion in any case, as that this accounting is ' barred by taciturnity. . . . The effect of presumptions or tacitiirnity ' in extinguishing or barring claims of accounting, founded on alleged ' strict legal rights, at a remote period, of which no one at the time had ' either knowledge or suspicion, and when the whole state of facts is ' altered and aU the parties dead, is founded in substantial and most ' clear justice. And the effect is the more weighty when the party rearing ' up such ancient claims follows, in succession of right, a variety of ' others who had a direct interest ; who were well able to look after ' their rights, and were by the facts called upon to attend to them, ' but who by their conduct for many years showed that they had renounced ' and given up all such notions.' ^* An excambion of entailed and fee-simple lands was upheld on technical Lord Deae. grounds when challenged ten years after its date. Lord Shand was of Mora not a opinion — though he did not decide — that mere taciturnity and acquies- cence might have been a bar, seeing that one of the persons who reported to the Court in the excambion process had been dead for some years, and the other had died recently. But Lord Deas objected : ' The Tnora is a very important element in the case, particularly as showing the dangerous consequences which would result from opening up a con- veyance in a marriage contract ex intervallo. But I do not go upon it apart from the other defence. Mora is not a good nomen juris. There must be prescription or not. We are not to rear up new kinds of pre- scription under different names.' * ^' His Lordship admits that the doctrine ^« Per L.J.C. Hope at p. 280. Lord was applied to bills and notes before the Moncreiff cites the earlier cases and adopts sexennial prescription was introduced in L. Glenlee's views in CuUen, 1772 (12 Geo. III. c. 72, s. 37). p. 121. " Thomson v. Campbell's Exrs., 1849, * In Mackenzie v. Cation's Trs., 1877, 12 D. 276. 5 R. at p. 317. 128 ACQUIESCENCE Observations on dicta above, Division of cases. I. Constituted claims. Bond almost prescribed. Cuninghume V . Boswell. The foregoing citation of dicta may suffice to show how the Courts regard the lapse of time, short of prescription, as affecting the subsistence of obhgations. As a prehide to an examination of the further illustra- tions which foUow, one remark may be hazarded. Taken in relation to the doctrine of acquiescence where the element of taciturnity is nofr so prominent, as set out in the preceding chapter, the result seems to be that mora, on account of the probable or ascertained loss of remedy ^' or of evidence, oral and documentary, eliminates to a large extent the requisite of actual knowledge averred and proved, and substitutes that which ought to have been known or must be presumed to have been known.'" Thus acquiescence for a long period in a misreading of a contract may preclude claim to be indemnified for the consequences thereof. ''^ In the further treatment of illustrative cases it wiU be weU to follow the division, indicated by Lord Glenlee,'^ into claims constituted — i.e. not merely instructed — by written deed, and claims not so constituted ; between claims hquid and iUiquid. I. A very striking illustration of the frailty of the plea in the first class of case occurred in 1823,'^ where a bond was sued on successfully one day within the period of the negative prescription, though the sohcitor who acted for both parties had ceased after five years to enter the interest payable on it in his books, and after seven years did not insert the bond in the Hst of the debtor's obhgations. It was not claimed on after the debtor's death, when claims were advertised for, nor in a lawsuit later, which ought to have ehcited it. When the bond was found (along with two other bonds admittedly paid ofE), sixteen years were allowed to pass before the action was brought. ' The presumptive evidence was not ' conclusive ; in order to be so, it ought to be utterly irreconcilable ' with the idea that the bond is stiU due (which it was not), and, being ' ex facie an unexceptionable written document, effect must be given ' to it.' «4 Less striking, but no less distinct, is the decision in Cuninghame v. Boswell.^^ A loan by an aunt to a nephew was vouched by written acknowledgment. She hved for thirty-four years and he for twenty- eight years after its date. No demand for or payment of principal or interest was ever made, till the aunt's executor, finding the acknowledg- es Hunter v. Falconer, 1835, 13 S. 252 (twenty-three years) ; Tlireipland v. Camp- bell, 1855, 17 D. 487 (thirty years); cf. Patrick v. Watt, 1859, 21 D. 637. '^ Supra, passim. ^^ Houlds worth v. Caledonian Ry. Co., 1896, 34 S.L.R. 119. "2 Supra, p. 122. "3 Graham v. Veitoh, 1823, 2 S. 594. In Fowler v. Mackenzie the document, discovered forty-two years after its date and twenty-seven years after adverse actings, was held to be ' a mere instrument ' of negotiation '—1874, (H.L.) 11 S.L.R. 485. In French v. Cathcart, 1696, 4 B.S. 493, the bond had been ' purchased in by ' an agent,' and therefore suspect. °* See a case of establishment of a debt by correspondence and in a business book, and no mora in twenty-six years — Gordon V. Glendonwyn, 1838, 16 S. 645. «« 1868, 6 M. 890. In contrast, see the doubtful decision in Mercer v. Aldie, 1681, M. 12708. MORA OR TACITURNITY 129 ment among important papers in the aunt's repositories, sued the debtor's executrix. It was held that the mora of thirty-four years was no bar. The case of a written acknowledgment is one ' to meet which the law ' of prescription was devised,' and one ' to which the doctrine of taci- ' tumity and mora can scarcely apply.' ** Of the older decisions one proceeded on similar considerations.®' It old oases of was held not sufficient to meet action on a seventeen years old bond ^"'^ '' to aver (a) that the creditor had craved delay respecting another debt — ■ there being then no arrears of interest on the bond ; (b) that he had bought land from the debtor and must have ascribed part of the price to the sum in the bond ; and (c) the taciturnity. On the other hand, mora was a main element in presuming payment of bonds, where the sum was smaU : a sale of land had taken place, in the price of which the sum in the bond was probably iucluded ; the creditor did not mention the bond in the assets enumerated in his will ; and the bond had been latent for twenty-eight years ; ^^ also where a smaller bond was held to be absorbed in a later and greater ; the creditor had done" diUgence on the latter only at a time when the debtor was ' deeajdng in his fortune,' and the former bond was twenty-six years old ; ®^ and again where a bond, blank in the creditor's name, due by an opulent debtor was foimd twenty- nine years after its date ia the repositories of a poor old woman, and by the finder kept for eighteen years before action was brought on it, though in that interval the debtor's estate had become embarrassed.'"' The converse case is that of a right being made hquid by a judgment Judgment which has been acted on. It has been shown in the case of Sinclair v. °"^ *° ^ Campbell's Trustees '^ how strong against a belated attack on the merits a decree — even a decree in absence — may be.'^ So also, where a decree by default was impugned fourteen years after its date, the Court desiderated reasons for the delay, and found none in the pursuer's poverty and sequestration and his appearing at the sale of the property and protesting against it four years before action brought.'^ A much shorter period may protect an order of a Court against attack on technical grounds.'* "" Interest was awarded as well as (pursuer was an assignee post Ut&m motam). principal. It may be suggested that Lord There is also a very clear case in which an Cowan's doubt as to this is sound, looking agent tried to round on his cHent by particularly to the relationship of the founding on an extant but paid-up bond original parties. after twenty-nine years — Mackie v. Watson, " Houston V. Houston, 1713, M. 12712. 1837, 16 S. 73. «8 Polwart V. Halyburton, 1667, M. " Supra, p. 125. 12704. '^ See also Campbell v. Graham's Reps., «» Trabroun v. Peebles, ibid. See also 1752, M. 9021 ; Blair v. Kinloch, C.A., Stevenson's Exrs. v. Crawford, 1666, M. 1789, M. 12196 ; Macdonald v. Do., 1790, 12750 (ten years, and other circumstances) ; M. 12198 ; Sutherland's Trs. v. Lockhart., Chisholm v. Renies, 1668, M. 12314 (bond 1790, M. 12200. dormant for thirty-three years) ; Mercer v. " Mackenzie v. Smith, 1861, 23 D. Aldie, 1681, M. 12708 (bond ; thirty-eight 1201, where Sinclair's case is elaborately years ; and parole) ; Stark v. Napier, 1672, noticed. M. 12707 (forty-six years, minorities having " Poinding — Scott v. Dunlop, 1838, 14 suspended prescription ; very special). F.C. 303 ; Grigor v. Robertson, 1856, 18 "> Cochran v. Houston, 1713, M. 12715 D. 1313. 9 130 ACQUIESCENCE Statutory relations. Heritable title. Even an attack which was more than merely technical — the absence of protection to a minor party by the appointment of a curator ad litem — has been repelled when brought seventeen years after the date of the decree and fifteen years after the minor came of age.'^ Similar principles apply to decreets-arbitral.'^ In regard to statutory relations mora has Uttle to say. Thus parties cannot by conduct or agreement bring within the ambit of a statute a case not covered by its terms." Where a superior maintained that he had been deprived of his rights by compulsory sale of the dominium utite to a corporation, it was held that he was not baulked of remedy by mora for thirty-four years ; but it was observed that abandonment or waiver of his claim might be established by proof of circumstances, including no doubt this delay, and creating a personal bar.'^ Under statutory powers notice to treat was given in 1903, and a claim made by the land- owner for alternative sums of compensation, according as the corporation had or had not mistaken the area. Correspondence showed that down to 1905 the corporation acknowledged its obligation to purchase. Its powers lapsed, but it kept the title-deeds till 1910. It was held that the landowner was not barred in 1913 from recovering compensation.'* Similarly in regard to payment of rates. A question as to relief of rates and taxes was in 1880 raised in a Special Case and dropped. It was in minute and letters reserved in 1882. It was not revived till twelve years later. There was held to be no bar, though during that interval payments were made adversely to the pursuers. The claim was, not for damages, as in certain cases of lease,*" ' but a claim of debt created by statute ' and of precisely ascertained amount, ... in the region of claims of ' debt which fall under the negative prescription only, unless in circum- ' stances in which by special conduct a direct imphcation of abandon- ' ment is raised.' *^ It is familiar law that taciturnity cannot affect heritable title. ^^ " Roberton o. Roberton, 1831, 9 S. 865. See also Scott v. Mitchell, 1830, 8 S. 820. '* Birrell v. Dundee Gaol Comrs., 1859, 21 D. 640 (sixteen years) ; Forbes v. Edinburgh Water Co., 1830, 8 S. 459 (four years). And see Boyd & Forrest v. G. & S.W. Ry. Co., 1915 S.C. H.L. 20. As to sale by auction, see Whyte v. Forbes, 1890, 17 R. 895. " Dutton V. Sneyd Byears Co., [1920] 1 K.B. 414. '* Inverness Mags. v. Highland Ry. Co., 1909 S.C. 943. See also D. Portland v. Samson, 1843, 5 D. 476 ; N.B. Ry. Co. v. Moon's Trs., 1879, 16 S.L.R. 265 (twenty- six years ; compensation for injury to land ; none taken ; bar) ; Barclay v. G.N. of Scotland Ry. Co., 1882, 10 R. 144 ; Houldsworth v. Caledonian Ry. Co., 1896, 34 S.L.R. 119 ; and see Mold v. Wheatoroft, 1859, 27 BeaT. 514. " Edinburgh Corpn. v. Lorimer, 1914, 2 S.L.T. 225. 8» E.g. Broad wood v. Hunter, 1855, 17 D. 340. ^^ Glasgow Tramways Co. v. Glasgow Corpn., 1897, 24 R. 628, 638, per L.P. Robertson; and see R. v. Blenkinsop, [1892] 1 Q.B. 43, distinguishing Skyring v. Green- wood, 1835, 4 B. & C. 281. 82 E.g. Bruce v. Bruce, 1827, 5 S. 822 (not affected by the reversal at 4 W. & S. 240) ; Mackie v. Mackie, 1896, 34 S.L.R. 34, 4 S.L.T. 3 ; Rankiae v. Logic Den Land Co., 1902, 4 F. 1074 ; and see Galloway v. Grant, 1851, 13 D. 756 (holding out for thirty years liferenter as fiar) ; Grant v. Murdoch, 1830, 8 S. 734, 2 D. & And. 10 (erasure in essentialibus ; thirty years) ;. MORA OR TACITURNITY 131 The authorities on the subsistence of cautionary obUgations are not Cautionary easily reconcilable, where the element of 'giving time' is absent, ^s ''''''^^'"'"*- Thus, the cautioner for an apprentice went free, where the lad for four years after his desertion had remained accessible and was not retrieved. «* Where one was bound subsidiarie under an already existing cash credit bond, after the parties should ' be duly discussed according to law,' and action was raised against him nine years after the account was closed, and the principal debtor was bankrupt, he was assoilzied ' in respect ' of the undue delay.' ^^ And a cautioner for an executrix was held free on the ' prejudicial grounds ' that the suit was brought twenty years after the death ; that the bulk of the estate had been dealt with in a way which should have been notified to him ; and that the pursuer — a beneficiary — ^had acquiesced in this dealing.*^ On the other hand, where a principal obUgant became bankrupt and the creditor, in accept- ing a composition, expressly (and within the "knowledge of the cautioner apparently) reserved recourse against the cautioner, the latter was not freed by inaction of the creditor for thirteen years. ^^ A cautioner to Lord Lyon King of Arms for a messenger's payment of fees annually was held bound for arrears twelve years after the messenger had joined the army.^^ And where, at the close of the office of a curator bonis, his cautioner took no steps to have the curatory wound up, he had no answer to a claim made four years later, though in the interval the curator had become bankrupt. *^ II. Proceeding now to consider belated claims which have not been n. Unconsti- constituted, it wiU be found that many of the problems with which this . . ^ , ' ... Approbate and book is concerned resolve themselves on ultimate analysis into the reprobate. doctrine of election or approbate and reprobate — there being an option or choice between two alternatives, and both a right and a duty to choose and act on one of the two, with the result of excluding resort to the other. ^^ Time, as an element in acquiescence, is important here, but the law of Scotland has preferred to deal with such problems under the head of homologation. *i It may be enough in this place to note below some of the cases in which the question has arisen after a considerable period of delay. These cases relate to election between legal rights (so called) and testamentary provisions. ^^ Boswell V. BosweU, 1852, 14 D. 378 *« Maokintosh v. E. KinnouU, 1824, (erasure) ; Innes v. Downie, 1815, 6 Pat. 3 S. 270. Lyon could not know whether a 57 (exoambion ; procedure presumed cor- messenger was acting or not. reot ; thirty years). '* Morland v. Sprot, 1829, 9 S. 478. '' Qvrmg time was the ratio in Mackenzie "• Chap. VI. E.g. in the case of avoid- V. Macartney, 1831, 5 W. & S. 504, revg. ance or not by the insurer of a voidable 8 S. 805, not the delay of seven years. contract of insurance. '* Robinson v. Smith, 1800, Hume 20. " Infra, Chap. VI. 85 Smith V. Campbell, 1829, 7 S. 789. '^ Infra, Chap. VI. Widow .-—Stewart 88 Macfarlane v. Anstruther, 1870, 9 M. v. Bruce's Trs., 1898, 25 R. 965 (two years ; 117. no bar) ; Donaldson v. Tainsh's Trs., 1886, 8' Smyth V. Ogilvies, 1825, 1 W. & S. 13 R. 967 (three years ; no bar) ; Selkirk v. 316, afEg. 1 S. 159. Law, 1854, 16 D. 715 (two years ; no bar) ; 132 ACQUIESCENCE Questions The case last cited on that head — of Bell's TrMSiee— illustrates the w ra ami tarn, y^^jj^jjg^ggg pf ^jjg Court to rip up an arrangement made intra famdUam regarding property, particularly when it is allowed to stand for a long period. A son, in electing to take testamentary provisions instead of legitim, had had full materials before him and friendly and unbiassed advice. He lived with his mother, liferentrix under the wiU, receiving board and lodging from her in accordance with the wiU ; he had concurred in advances made to her and to a brother ; and he had borrowed money from a sister for his business. Though probably unaware of the intricate doctrine of ' equitable compensation,' he was taken as so ' crystallisiag ' a family arrangement as to make it indissoluble ' when he impugned it twelve years after his father's death. The Court has often to give effect to such family understandings, not reduced to writing.*^ Though Lord Jeffrey ^* was hasty in confining the doctrine of mora to transactions inter rusticos, it is pecuharly applicable to family arrangements of that sort, and was so held where the eldest son intromitted with the whole effects of a superannuated father and his son's representatives were sued for an accounting by the younger children after thirteen years.'' This decision was followed, where there had been silence for at least forty-three years and the amount of the succession was not ascertaia- able.** And both of these elements apparently went to bar suit against an executry which had endured for thirty-six years." The case of Baxter's Executor v. Baxter's Trustees '* is a good example Baxter's Executor V. Baxter's Trustees. Dunlop V. Greenlees' Trs., 1865, 3 M. H.L. 46 (four years ; by executors ; bar) ; Hope V. Dickson, 1833, 12 S. 222 (ten years ; no bar) ; Mackenzie v. Mackenzie's Trs., 1873, 11 M. 681 (twenty-seven years ; no bar) ; M'Fadyean v. MacPadyean, 1882, 10 R. 285 (one year ; no bar). Children : — Wick V. Wick, 1898, 1 F. 199 (sixteen years ; no bar) ; Sime «. Balfour or Kirkpatriok v. Sime, 1804, M. Heritable and Moveable, Appx. No. 3, aff. 1811, 5 Pat. 525 (twenty years ; no bar) ; Gonrlay v. Wright, 1864, 2 M. 1284 (nineteen years ; no bar) ; Bell's Tr. u. Bell's Tr., 1907 S.C. 872 (twelve years ; bar). Following money : — Threip- land V. Campbell, 1855, 17 D. 487 (barred after thirty years). 93 Graham's Tr. v. Grahams, 1870, 8 S.L.R. 107 (widow liferenting whole estate, contrary to testamentary direction to withdraw part of the fee on children marrying) ; Spence v. Boyd, 1888, 15 B. 376 ; Baxter's Exr. v. Baxter's Trs., 1884, 13 R. 1209. See also Robson v. Bywater, supra, p. 122 ; Mackie's Trs. v. Mackie, 1875, 2 R. 312, per Lords Neaves and Gifford ; Grant v. Grant, 1753, M. 13841 ; Hewats v. Roberton, 1884, 9 R. 175 (arrangement between mother and son ; nineteen years ; bar against going back to terms of will). See, in England, Laver v. Fielder, 1863, 9 Jur. N.S. 190 ; Stockley v. Stockley, 1812, 1 V. & B. 23 ; Smith v. Mogford, 1873, 21 W.R. 472. "■ In Seath v. Taylor, supra, p. 126. See the plea of rusticity in another con- nection — Grant, v. Gordon, 1833, 12 S. 167. '5 Wilsons V. Wilson, 1783, M. 11646 ; Darling v. Darling, 1802, Hume 488 (twelve years) ; Scotland v. Reid, 1682, M. 11416 (tocher ; eleven years). Cf. in contrast, a claim, twenty years old and yet aUve, by sisters against a brother for the value of a downlay of seed — Mackintosh v. Taylor, 1849, 11 D. 1244. 9« Tod V. Beattie, 1802, Hume 487; Ryrie v. Ryrie, 1840, 2 D. 1210. And see the curious case of a business being carried on by a family without partnership agree- ment — Aitohison v. Aitchison, 1877, 4 R. 899. *' Lindsay v. Kinlooh, 1796, 3 Pat. 432 ; Wilson's case was cited, and Tod v. Beattie referred to, in Maclaurin's Criminal Cases, 606. MORA OR TACITURNITY 133 of the general rule, enunciated by Lord Kinnear,'* that ' when a husband ' has been allowed to receive his wife's income during her life, he is not, ' in a question with her representatives, to be subjected to the same ' rules of strict accounting as if he had uplifted the income of a stranger ; ' and that, if it be a fair inference from the facts in evidence that the ' wife had known and assented to the manner in which her income was ' applied by her husband, her representatives have no claim, after her ' death, to recover moneys which she had permitted her husband to ' appropriate or to apply at his discretion for their common benefit.' "'" Under a trust in which her husband was a trustee, and for the last eight years sole trustee, Mrs Baxter had a liferent aUmentary free of the jus mariti and the jus administrationis. A sum which would have fallen under the jus mariti was by both called the wife's ' patrimony ' and mainly applied to the wife's own purposes. They were an attached couple, leading a simple life, though their united income was about £4000 a year, of which the said liferent produced about one-fourth. With the exception of certain deposit receipts later transferred, the lady had no separate bank account during the last seventeen years of their joint lives ; and in the husband's will, which she signed as consenter, he gave the largest bequests to her relatives. Her executor sought an accounting for arrears of her liferent, but failed — substantially on the grounds above stated.^"! While a just claim on a trust estate, which remains in the hands of Trust a trustee or is recoverable by him or by beneficiaries in his name, cannot be sopited by neglect or taciturnity, it is different where the funds have been distributed or otherwise put honestly beyond reach of a laggard claimant,^''^ cognisant of his right. Thus, where, twenty-five years after an executor began to administer, action was brought against him for a share of the estate, the real question was as to whether there had been divisible funds — as to which taciturnity was irrelevant. But it was observed that, if it had been relevant, it could only have arisen if the claimant had knowledge, proved or presumable, of his right.^"^ Where for about thirty years the only party in titulo to call for an 9» Ibid., 13 R. at p. 1215, approved in the (twenty-aix years ; bar) ; Kintore Mags. Inner House. v. Tait's Exrs., 1873, 45 Sc. Jur. 376 100 Tiie case went further than Hutchison (eleven years after loss of funds). V. Hutchisons, 1842, 4 D. 1399, 5 D. 469, "' Allan u. Allan's Tra., 1851, 13 D. since in it the wife's income was fuUy spent ; 1220; and see CuUen v. Wemyss, supra, here not so. p. 121 ; Seath v. Taylor, supra, p. 126 i°i See also Maconochie v. Stirling, 1864, (emerging will). And see a case (which 2 M. 1104. cannot recur) of accounting allowed of "2 See Dalrymple v. Murray, 1784, M. income and part of capital of bonds 3534, 16210, and with it Heritable Securities reaped by widow for thirty-four years Investment Association o. Miller's Trs., and really falling under the jus mariti — 1893, 20 R. 675 ; Gourlay v. Wright, Gray v. Walker, 1859, 21 D. 709 ; supra,'^ ; Taylor v. Mather, 1873, 10 S.L.R. Spence v. Paterson's Trs., 1863, 1 R. 461 (forty-four years ; no bar). Thomson 46 (twenty years, and unsatisfactory V. Murray, 1824, 3 S. 297, is very special evidence). 134 ACQUIESCENCE Statutory accounting. Conjunct and confident persons. Cases of aucior in rem suam. accounting by the agent to a trust was a lif erentrix, a delay of eight years after her death was not fatal.^"* Where belated action was taken against a statutory officer — here against a trustee on a sequestrated estate twenty-four years after his appointment — in respect of alleged irregularities of administration, Lord Glenlee observed : ' The Lord Ordinary has drawn a proper distinction ' between those instances of neglect in the management, as to which a ' precise penalty is imposed by statute,^"^ and those where there is no ' such provision. As to this latter class of cases there must ia common ' sense be some limitation as to the time within which complaint must ' be made. . . . This does not rest on acquiescence alone, but on the ' fact that, when a party asks justice, it must be in a case where the ' thing he wishes done is possible. . . . Taciturnity is rather the nature ' of the objection, and it is different from proper acquiescence.' ^"^ In bankruptcy the presumption against the onerosity of deeds granted to persons conjunct or confident with the grantor may be redargued by delay in challenging them for the period of the long negative prescription or for a shorter period of taciturnity. Thus, where the lapse of more than forty years was met by minority suspensions, it still threw the onus on the objector to prove that the grantor was bankrupt at the date of the grant.i*' So also, after forty-five years, similarly suspended appar- ently, the ' astriction ' of onerous causes in the narrative of the bond of rehef was held sufficient evidence.^"^ ' In all questions of computation ' the creditors are not entitled, after a long delay, to go very narrowly ' to work in their reckonings ; the question is to be taken on a broad ' and fair and rather favourable view for the debtor.' ^"^ A catena of cases, in which the blot founded on was breach of the rule that persons acting in a fiduciary capacity shall not be auctores in rem suam, now calls for notice. A sale of an estate, whose owners were bankrupt, was undoubtedly challengeable (though it went at a high competition price at a pubHc roup), for it was made by the sequestration, trustee to himself, as represented by a white-bonnet. But reduction, by the bankrupt's heir, was not raised tiU thirty-nine years after the sale ; the bankrupts were present at the sale, and one of them acted "* Aitken v. Hunter, 1871, 9 M. 756. See a case of brothers in business — Ryrie v. Ryrie, 1840, 2 D. 1210; and of an executor's concealment of a fund for twenty-eight years — Allan v. Allan's Trs., i"'. In Rose V. M'Leay's Trs., 1830, 8 S. 1037, aff. 2 S. & M'L. 958, the appellant's own accounts could not pass — which was ' rather worse ' than an explanation.' '"= E.g. not banking sums over £50, and thus letting in penal interest. There was apparently no proof of the fact in the other case with the same names, 9 S. 54, but here it was admitted. "« M'Lachlan v. Likly, 1830, 9 S. 57 ; cf. Duncan v. Cunningham, 1834, 12 S. 678, aff. 2 S. & M'L. 984 (item ' to account ' rendered ' sufScient in the circumstances after twenty-one years). i"' Spence u. Dick's Creds., 1692, M. 1014. i°* Blackwood v. Hamilton's Creds., 1749, M. 904. See also Guthrie v. Gordon, 1711, M. 1020 ; foUowed in Elliot v. Elliot, 1749, M. 905. i"* 2 B.C. 181. MORA OR TACITURNITY 135 as attorney in the purchaser's infeftment ; they paid a small composition, in adjusting which the price was an element ; they were parties to appli- cations for approval of the composition and for the ensuing discharges ; one of them became tenant of the purchaser and the other lived with him on part of the lands ; and the lands were bonded and then sold. The main grounds for rejecting recovery of the estate were mora and acquiescence.^^" In BucJmer v. Jopp's Trs.^^^ there was the additional element of compromise, which is not readily upset. ^^^ A transaction between beneficiaries and next of kin on the one side and trustees on the other, involving payment of legacies in full without interest for the seven preceding years, and much difficulty in winding up the trust, had as one of its terms an assignation to a trustee or his law firm of the whole of the remaining estate. This was plainly reducible, if attacked within a reasonable time. But thirty-five years had elapsed ; there had been full information and competent legal advice ; and most of the parties were dead. ' I will not say that thirty-five years would in all ' circumstances be a bar to an action of this kind ; but, seeing that the ' whole question depends on the nature and legality of the transaction ' itself, I am not in the meantime to pass any judgment in regard to ' the length of time which might bar any such action.' ^^^ On the other hand, mere lapse of time, there being no other evidence of acquiescence or homologation, cannot cure a transaction to which the above rule applies.i^* Acceptance of money added to mora will not ordinarily be fatal."5 Similarly, long delay in impugning the succession of someone to the Succession to tenant's part of a lease may bar the landlord from ousting the possessor, ^ *™™*- as where the landlord recognised as tenant the former tenant's second son.ii^ The true heir may also thus bar himself from entering. But in the latter case a distinction has been pointed out. Delay such as would infer abandonment and might lead to a reletting would be a bar.ii' But if the relatives of the deceased tenant keep up his possession under the lease, and the true heir is abroad and ignorant of his right under the lease, he is not precluded from establishing his title.^i' 11" Fraser v. Hankey & Co., 1847, 9 D. laohlan's Reprs., 1846, 8 D. 487 (thirty- 415. The action being against the sub- two years). purchaser, he had also the plea of trusting us Beningfield v. Baxter, 1886, 12 Ap. to the records. Cas. 167, 181 (Natal). "1 1887, 14 R. 1006. See in particular ^e Darrooh v. Eennie, M. 15301, note. L. Young's opinion ^,, ^^^^ ^ ^^ ^ g^g . , " Graham v. Graham, 1823, 1 S. Ap ^ ^1 D. 293 ; Wilson .. 365; Turner v. Simson, 1838, 1 D. 57 ; „, '^ , io-q la n ins „ , ., T . iQ„n 1 n KOfi Stewart, 1853, 16 1). 10b. CfOlvil V. Jamieson, 1839, 1 U. 52b. ' 1" Per L.J.C. MoncreifE. In Ommanney "' Crichton v. Ly. Keith, 1857, 19 D. V. Smith, 1854, 16 D. 721, a correspondence 713 (fourteen years ; during which posses- proved waiver. sioubydecea8edtenant'3widow,adaughter, 1" York Buildings Co. v. Mackenzie, and that daughter's son successively). 1795, 3 Pat. 378, 392, 401, 579 (eleven or Under the Small Landholders Acts, see thirteen years) ; Jeffrey v. Aitken, 1826, M'lver v. M'lver, 1909 S.C. 639, and 4 S. 722 (twelve years) ; Gillies v. Mao- Rankine, Leases, 655. 136 ACQUIESCENCE Partnership accounting. Law agents' accountings. The delicacy of the problem now under illustration may be indicated by contrasting two modern cases arising inter socios. Partnership accounts were to be balanced and docqueted each year. The last adjustment was in 1826. The representatives of a partner raised objection in 1855 and sued in 1858 the representatives of another partner for reduction of certain of the adjustments on the ground of faciHty and circumvention. The action was held not to come too late ; the delay only enhanced the onus of proof. ^^^ On the other hand, there being no absolute rule that on the decease of a partner the firm's business must be disposed of by public sale/^" it was competent to the executors of such a partner to refer his interest to arbitration. One of his next of Mn lay out, refusing consent, and seven years after the date of the award brought an action for the sale of the firm which had succeeded to the business. He was held to be barred. The old firm's stock had ceased to exist ; valuation was impossible ; his refusal showed that he was aware of his right ; and he had waited till the new firm had waxed more prosperous.^^i An action which might have lain for contribution to a firm's losses against its manager, who had a seventeenth share in the capital, was held by the House of Lords to be barred by delay for fifteen years after the firm was dissolved, during which interval a keen litigation had occurred on a footing inconsistent with the fresh suit.^^^ So also it was too late after twenty years to open up partnership accounts, which had led to an arbitration that had not been followed by an award, but had involved the most minute calculations.^^^ In regard to accounting between principal and agent, many cases have felt the heavy hand of time. This is specially so in regard to the charges of law agents. In regard to these. Lord (then Lord Justice) Davey, following Lord Cottenham,^^* points out the difference between settled accounts, where the parties are in a fiduciary relation and where they are not, and illustrates the former from the relation of client and sohcitor — the soUcitor in his own department having a commanding influence, easy of abuse.i^s Notwithstanding this, a delay of nine years ' A stronger case than Rose v. M'Leay's 'Trs.,' supra, "*, per L.J.C. Hope at p. 1541. 12* In Coleman v. Mellersh, 1850, 2 Mao. & G. at p. 314. 12^ A very striking example is Ward v. Sharp, 1884, 53 L.J. Ch. 313 (account ripped up after thirty years ; distinction between opening up generally and sur- charging and falsifying — a difference of onus). As to this last, see Lawless v. Mansfield, 1841, 1 Dr. & War. 557. In a very special case in which, after thirty- three years, an accounting was refused, there had been ' friendly assistance on the ' one hand and great aocommodationlon ' the other '—Tod's Trs. v. MelviUe, 1836, 14 S. 432. "» M'Laren v. LiddeU's Trs., 1860, 22 D. 373 ; and see 24 D. 577. In the very special case of Roughead v. White, 1913 S.C. 162, the delay of ten years was properly ignored. 12° As to this right subsisting, though delayed for nine years, the firm not having been wound up, see Stewart v. Simpson, 1835, 14 S. 72. 121 M'Kersiea o. MitoheU, 1872, 10 M. 861. See a parallel English suit with a similar motive — Rule v. Jewell, 1881, 18 Ch. D. 660. 122 Geddes v. Wallace, 1820, 2 Bligh 270. The first case had gone also to the House of Lords. "3 Carswell v. Steele, 1848, 10 D. 1528. MORA OE TACITURNITY 137 sheltered an account consisting of a general item, instead of a detailed bill of costs, particularly seeing that no plain averment could be made of gross overcharges.i^" A client's right to taxation may be lost by delay for a period of no great duration, if it be accompanied by a decree in absence against him,!^? or by his having granted a bill or note for the amount.^28 "Where taciturnity for eleven years was the defence of the representatives of a law agent, who had acted as the private banker of his client, when they were called on to repay a balance of money ad- mittedly impressed into the deceased's hands, Lord Jeffrey sustained it, but the Inner House rejected it.^^^ Nearly forty years after a law agent made a disastrous slip in executing an inhibition he was, in the special circumstances and on account of mora, unsuccessfully sued, for damages ; but it was a ludicrous further plea that he had acted without formal mandate.^'" There is no inflexible rule regarding the recovery of interest, where a law agent has delayed for long to render his account. Much depends on circumstances, such as his mora and his client's neglect to call for the account. ^^^ Where there had been, during mora of twenty years, repeated demands and even action brought for a render of accoimts, interest on professional charges was allowed only from the date of render, but on outlays from their respective dates. ^^^ This had been settled, probably in one earUer case ; ^^* certainly in another. i^* The conduct of a trustee (in an inter vivos trust) or of beneficiaries may be such as to oust the rule of law that a soUcitor, a factor, or an heir who is also a trustee cannot charge the trust estate with remuneration for his services. ^^^ This is so, if they are aware of their right to object.^*^ In regard to other cases of agency there is not much authority. The other agents. validity of the appointment of a schoolmaster, of which no minute could be found, was unassailable after twenty-seven years.^*' But a person held to be an ' old ' schoolmaster was not too late in suing in respect of wrongous dismissal eleven years after its date, for he had kept up "« In re Webb, Lambert v. Still, [1894] "^ Forman v. Home, 1844, 6 D. 1189 ; 1 Ch. 73 ; cf. Macdonell v. Mackenzie, Cumungham v. Buchanan, 1809, Hume 349. 1829, 7 S. 798 ; Elder v. Smith, 1829, "^ Bremner v. Mabon, 1837, 16 S. 213 7 S. 656. (twenty years). The agent was allowed to 127 M'Miohie v. Phillips, 1826, 4 S. 803. ascribe a sum paid to him by the oUent '^* Macdonell v. Mackenzie, supm ; to fees. Neilson v. Morrison, 1836, .14 S. 974; "3 Henry v. Sutherland, 1801, M. Stewart v. Lang, 1861, 23 D. 286. And see Annual Rent, Appx. 1 (twenty years). Cullen V. Wright, 1863, 1 M. 734 ; Kintore "* Napier v. Balfour, 1835, 13 S. 853 Mags. V. Tait's Exrs., 1873, 45 Sc. Jur. (twenty-six years). 376. "= Ommanney v. Smith, 1854, 16 D. 721 ; 1" Robertson v. Hogg's Trs., 1840, 12 Scott v. Handyside's Trs., 1868, 6 M. 753 ; . Sc. Jur. 272. and see Home v. Pringle, 1841, 2 Rob. Ap. i=» Cooke V. Falconer's Reps., 1850, at p. 438. 13 D. 157 ; cf. Hunter v. Fleming, 1829, "» Lauder v. Millars, 1859, 21 D. 1353. 8 S. 234 (seven years). See a circumstantial "' M'Alpine v. Campbell, 1840, 2 D. case where, for the whole period of twenty 481 ; Ross v. Findlater, 1826, 4 S. 514 years, the agent's promise was to pay out (fifteen years). See Laing v. Laing, 1862, of an estate worth nothing — Gillon v. 24 T>. 1362 (thirteen years ; pauper Drummond, 1724, M. 3522. accounts). 138 ACQUIESCENCE Scope of prescription and mora compared. Wrongs. Offences. Pauper settlement. the claim by a series of letters and sued when he had lost another situation.^'* While the action of mora, taciturnity, and acquiescence is 'swifter than the action of the long negative prescription of forty years, it may not have the same trenchant operation, where the transaction impugned has ' been altogether ultra vires, unwarranted, and illegal.' ^^* It cannot operate where the negative prescription is out of place, as, for example, to extinguish heritable title ; or to curb what is res merce facultatis ; ^^^ or to obhterate an indehble status ; ^*^ or to annihilate a jus sanguinis ; "* or to alter for the future an unambiguous direction as to the persons entitled to administer a charity ; ^*' or to give a trustee right to perpetuate a breach of any trust, i** But even statutory trustees may be barred by their own conduct from objecting to a continuance of a user permitted by them, which was unusual but not ultra vires.^*^ And testamentary trustees must exercise discretionary powers reposed in them within a reasonable time.^** It does not fall within the purview of this book to deal with delay in bringing action in respect of wrongs, or in raising suspension of convictions of offences, or in fixing the settlement of paupers. But it may be con- venient to collect in a note some of the illustrative cases."' Still further beyond the scope are the cases in which, by stipulation, or custom, or 138 "vyatson V. Avondale School Board, 1886, 24 S.L.E. 480. 139 pgy L Deas in Bams v. Bams' Trs., 1857, 19 D. at p. 652. "» Adam v. Napier, 1843, 5 D. 736. "1 Kennedy v. Campbells, 1753, 1 Pat. 519 ; Jolly v. M'Gregor, 1828, 3 W. & S. 85 ; and see Cannam v. Farmer, 1845, 3 Exoh. 698. 1*^ See Miller on Prescription, pp. 79-89 ; M'Cowan v. Shields, 1867, 4 S.L.R. 179 ; M'Callum v. Campbell, 1798, 4 Pat. 32 ; Bosville V. L. Maodonald, 1910 S.C. 597. "3 Edinburgh Mags. v. L. Adv., 1879, 4 Ap. Cas. 823. As to ambiguous directions, see Baird v. Dundee Mags., 1863, 1 M. H.L. 6; Leslie v. Black, 9th June 1814, F.C. 641 ; cf. Jopp's Trs. v. Edmond, 1888, 15 R. 271 ; Dundee Fraternity v. Wedderbum, 1830, 8 S. 547. In Boe V. Anderson, 1857, 20 D. 11, there was really no reasonable plea of mora. As to churches splitting, compare Cairn- cross V. Lorimer, 1860, 3 Macq. 827 (three years ; bar), with Ferguson Bequest Fund case, 1879, 6 R. 486 (twelve years ; no bar). "* Last case ; Thaih v. Thain, 1891, 18 R. at p. 1201. 1" Moir V. Alloa Coal Co., 1849, 12 D. 77 (level crossing ; twenty-one years ; bar) ; cf. Inverness Presbytery v. Eraser, 1823, 2 S. 384. 1** Adam & Forsyth v. Forsyth's Trs., 1867, 6 M. 31 (power to reduce child's fee to alimentary allowance ; six years ; bar). 147 fprongs in General : — Cassidy v. Connochie, 1907 S.C. 1112 (slander; four years ; non valens agere ; no bar) ; Cuning- ham V. Skinner, 1902, 4 F. 1124 (defama- tion ; ten years ; poverty ; no bar) ; M'Neill V. Forbes, 1883, 10 R. 867 (de- famation ; two years ; no bar) ; Munro v. Jervey, 1821, 1 S. 161 (periodically re- moving a stone in neighbour's wall ; thirty -eight years ; bar) ; Sclater v. Oddie, 1881, 18 S.L.R. 495 (encroachment of building ; thirty years ; bar) ; Murdoch v. Wallace, 1881, 8 R. 855 (deflecting march stream ; iifteen years ; bar) ; Maloy v. M'Adam, 1855, 22 S.L.R. 790 (seduction ; bar) ; caution required of bankrupt in libel case, CoUier v. Ritchie & Co., 1884, 12 R. 47 (twenty-six months), and in assault case, G. v. H., 1899, 1 F. 701 (four years). Marital Wrongs : — Impoteuoy, see supra, p. 121. Adultery : — Hughes v. Hughes, 1915, 32 T.L.R. 62; HeUon v. HeUon, 1873, 11 M. 290 (thirteen years ; no bar) ; Duncan v. Maitland, 9th Mar. 1809, F.C. 246 (thirteen years, or condonation ; bar) ; A. B. V. C. D., 1853, 15 D. 976 (thirteen years ; bar) ; GatcheU v. Gatohell, 1898. 6 S.L.T. 218 (seven years ; no bar), MORA OR TACITURNITY 139 course of dealing, promptness is demanded^ treatises on Mercantile Law. These must be sought in In the two foregoing chapters an attempt has been made to avoid implied dealing with a theme which does not fall under the scope of estoppel in England, and is in Scotland treated separately from personal bar, though it woidd be hard to draw the line between them, viz. extinction of obligations by implied discharge : for example, by a debtor's possession of the document of debt ^*' or of receipted accounts,^*' the apocha trium annorum, acceptilation, compensation (set - off), novation, delegation, confusio, giving time and other actings whereby a cautioner or guarantor is freed ; ^^^ fitted accounts not afiected by error calculi,^^'^ whether audited or not ; ^^^ and the relief from a lien.^^* Cruelty, see Fraser, Husband & Wife, 742. Declarator of marriage : — Lookyer V. Ferryman, 1876, 3 R. 882 (thirty years, or res judicata ; bar). Breach of promise of marriage : — Colvin v. Johnstone, 1890, 18 R. 115 (ten years a'ter contrary marriage; no bar ; sed qucere) ; Currie v. Guthrie, 1874, 12 S.L.R. 75. Suspension of Summary Conviction : — Cases in Macdonald, Criminal Law, 545, and add Low v. Rankine, 1917 S.C. (Just.) 39, and cases there cited ; and Russel v. Sprot, 1845, 2 Broun 385 ; Kelly v. Smith, 1904, 7 F. (Just.) 14; White v. Jeans, 1911 S.C. (Just.) 88. Pauper Settlement chiefly as between Parishes : — Jack v. Simpson, 1864, 2 M. 1221 (blundered notice) ; Hay v. Knox, 1850, 12 D. 1060 (twelve years; bar); Hay V. Jack, 1853, 15 T>. 388 (seven years ; bar) ; Scott v. Anderson, 1854, 16 D. 1094 .(twenty-two years ; bar) ; Duncan's Trs. V. Gow, 1861, 23 D. 420 (twenty-five years ; bar) ; Lemon v. Cameron, 1864, 2 M. 454 (twelve years ; bar ; loss of proof) ; Jack V. Fraser, 1861, P.L. Mag., 22 (eight years ; blundered particulars ; no bar) ; Beattie V. Wood, 1866, 4 M. 427 (seven years ; met by (undescribed) circumstances ; no bar) ; Bremner v. Taylor, 1866, 3 S.L.R. 24 (nine years ; no bar) ; Young v. Gow, 1877, 4 R. 448 (seven years ; admission -not retractable ; no bar). In some of these settlement cases it is said that they do not affect the general law of mora ; Beattie & Miiir V. Brown, 1883, 11 R. 250 (five years). '** See the converse case, Allan v. Laid- law, 1824, 3 S. 356. 149 ipjjjg latter is not conclusive bar or estoppel, unless contained in a solemn deed —Henry v. Miller, 1884, 11 R. 713 ; Farrar V. Hutchinson, 1839, 9 A. & E. 641 ; Bowes V. Foster, 1858, 2 H. & N. 779 ; Lee V. Lancashire & Yorkshire Ry. Co., 1871, L.R. 6 Ch. 527, 536. As to invoices and the heading thereof. Holding v. Elliott, 1860, 5 H. & N. 117 ; Graves v. Key, 1832, 3 B. & Ad. 313, 318. ^^'' See Gloag and Irvine, Rights in Security, pp. 887-903, 916-923. As to harm resulting, see Brown v. Kirkland, 1861, 23 D. 363 ; Jarron v. Smith, 1803, M. App. BiU of Exchange, 14. 151 Struthers v. Smith, 1913 S.C. 1116 ; Fraser v. Fraser, 1827, 5 S. 348 ; Forbes's Trs. V. Edinburgh & Glasgow Union Canal Co., 1834, 12 S. 365 ; Walker v. Drummond, 1836, 14 S. 780 ; Jamieson v. M'lnnes, 1887, 15 R. 17, followed in Wilkie v. Hamilton Lodging House Co., 1902, 4 F. 951, which distinguishes Seaton Brick & Tile Co. V. MitcheU, 1900, 2 F. 550; Cockbum v. Clark, 1885, 12 R. 707. As to wrong summation in a compromise, see Johnstone v. M'Kenzie, 1824, 3 S. 321 ; and see Stewart v. Stewart, 1836, 15 S. 112, aff. M'L. & Rob. 401. 152 As to audit, see cases in 1 S. 281, 428, 2 S. 185, 4 S. 145, 514, 13 S. 78, 14 S. 974, 14 D. 1040, 20 D. 218. 153 CoweU V. Simpson, 1809, 16 Ves. 275 ; Paterson v. Currie, 1846, 8 D. 1005. CHAPTER VI HOMOLOGATION Active In the preceding chapters the attitude of the obKgant, debtor, or person conduct. against whom the plea of bar is set up was in the main passive. In the rest of the volume his conduct is more positive and active. He is to be regarded as precluding himself from taking up a certain position in law, not expressly, nor in the formal and appropriate fashion prescribed or expected by the law, but by impUcation. He does not go before a magis- trate as a married woman does in ratification of her heritable grant, or make a solemn deed on reaching majority in confirmation of trans- actions entered into during his non-age. His less solemn words or writings — res ipsw et facta — may be equivalent, and binding on him and his legal representatives. Nomen- FoUowing the order of exposition to be found in the Scottish law- books, the first example of this active bar or personal exception or estoppel is known as Homologation ; ^ pedantically and of old as Ratihabition ; on both sides of the Tweed as implied Ratification. An agreement is assumed which is not originally binding and becomes binding through confirma- tion. ' For since it imports not whether the consent essential to contracts ' be expressed by word, writing, or facts, nor whether it be given at the ' time of entering into them or afterwards, every act done by the grantor ' after their date which implies approbation supplies the want of an Election. ' original legal consent.' ^ There comes into prominence the element of choice, of option between true alternatives, one of which may be taken but not both, until the choice is lost through the emergency of injury to other persons.^ Hence the terms Approbate and Reprobate,* and Election may always in this connection be used as a test of the doctrine, as well as specifically in certain illustrations of it. Furthermore, it wiU appear that the distinction between 'what is void and what is merely voidable cannot be ignored. 1 St. 1.6.44; 1.10.11.15; Ersk. 3.3.47- where writing would have been expected 50 ; B. Pr. 27, 27 A., 1613 ; 1 B.C. 93-4, only ; and see observations in Morison v. 139-146; 2 B.C. 393-4, 398-9. Balfour, 1894, 11 D. 653. 2 Ersk. 3.3.47. It cannot supply lack ' Scarf v. Jardine, 1882, 7 Ap. Cas. of loritUn consent stipulated for — Dallas v. 345. Dallas, 1715, M. 10447 ; Brown v. L. Rolls, » L. Fullerton in Robertson v. OgUvie's 1832, 10 S. 667 ; with which contrast Trs., 1844, 7 D. 236, hints at a distinction 6 Cubbison v. Cubbison, 1724, M. 10449, between this and homologation. 140 HOMOLOGATION 141 The principles which here obtain are the same as those illustrated Principles. in other divisions of the law of personal bar, and are partly enunciated in a case of reduction ex capite lecti under the old law by the first Lord MoncreifE.^ ' The law of homologation proceeds on the principle of ' presumed consent by the party, who does the acts, to pass from grounds ' of challenge known by him to exist, and sciens et prudens to adopt the ' challengeable deed as his own. Though in general, where onerous ' contracts have been entered into, or important rights have been es- ' tabUshed to third parties, rei interventu following on acts approbatory ' of particular deeds, the law will presume knowledge of the whole rights ' of the party, both in fact and law, unless positive deception be proved, ' the same presumption does not apply to acts done without any onerous ' consideration and on which nothing has followed to alter the condition ' of third parties.' In that case, the heir, just of age when his father died, though he authorised the recording of the deathbed entail, founded on it in his marriage contract, and possessed on it for seven years, was held not to have homologated it, seeing that he knew not till the end of that period his right to reduce it.® ' Homologation is a plea founded on a strong imphcation of the law ' and must rest on circumstances of an unequivocal nature.' Such was the opinion of Lord President Blair in a case where Forfeited Estate Commissioners, with Umited statutory powers of leasing out land, let a farm, subject to statutory conditions as to improvement expenditure and subletting. They allowed these to be broken without proceeding to a removing on the ground of irritancy. When the heir of the old laird was restored against the forfeiture, he sold the farm by a disposition after- wards reduced on the ground of gross fraud, minority, lesion, and circumvention, and (after an interval explained by military service abroad) sought reduction of the lease. There could be no homologation Homologation thereof by the trustees contrary to their statute, nor by the fraudulent ""^'''®'*^'"'- disponees ; and it was held (by four judges against three) that there was none by the heir.' Part of the proof of a debt of more than £100 Scots, vouched by an Distinguished improbative acknowledgment, was payment of interest by the debtor's mtenentus. testamentary trustee for fourteen years. The views of Lord Deas in giving effect to this appear to be sound : ' Rei interventus is something ' done by a creditor upon the faith of the document of debt. But payment ' of interest is something done by the debtor and cannot be regarded as ' rei interventus. The payments of interest come rather under the category ' of homologation, which is the act of the debtor in an obUgation.^ In ' such cases it is not permissible to keep up an option to resile.' ' 5 In Gardner v. Gardner, 1830, 9 S. 138 » M'Calman v. Maoarthur, 1864, 2 M. (in interlocutor). 768. « He waited for eleven years more before ' Macpherson v. Macpherson, 12th May challenging. 1815, F.C. 352, noticed as the converse ' Cameron v. Cameron, 18th Deo. 1810, of Murray v. Her Tenants, 1773, 2 Pat. F.C. 90. 317. homologation. 142 HOMOLOGATION Where The term is not appropriate to conduct said to be approbatory of a inapplicable, ^^^.^^^gj^^ ^j^j^j^ jg f^nditus null and void." This is in particular true of title to land void because vitiated, for example, by an erasure in essentialibus. ' If there was in truth no disposition, no conveyance, ' (for this is the effect of the vitiation of the deed), it is not easy to under- ' stand how there can be a ratification of it. To give effect to this ' supposed ratification would in fact be not to ratify but to make a ' disposition for the granter — a disposition which himself had not made,' ^^ at least if it be not possible to separate the good from the bad.^^ Even if a blot of this sort be known, the party said to have ratified by possession conform may lawfully take up the position, ' I knew of the deed, but I Adoption and ' also knew it was a nulhty.' ^^ In cases, however, not of heritable title but of debtor and creditor, the law of adoption (in the stricter sense of the word) may be apphcable.^* And though the Acts relating to attestation speak of want of solemnities as rendering deeds null and void, they are interpreted as allowing the operation of personal bar.^^ In Callander's case, which dealt with an ill-authenticated bond of provision by an heir of entail. Lord Deas put an important distinction thus : ' The deed we are ' dealing with is not a mutual contract, where a plea of- personal bar ' may sometimes be available, but a unilateral deed, which, if not duly ' authenticated, is not binding upon the heirs of entail ; and I know of ' no category of recognition or adoption which can supply the want of ' the statutory authentication in such a deed, imless it come up to a ' virtual re-iteration in the tested instrument of the purposes of the original ' deed.' ^^ The distinction between homologation and adoption came up shrewdly on a question as to issues.^' A dissolution of partnership was impugned by the partner who purported to retire, on the ground alternatively of his insanity at the date of the deed and of his facility practised on by circumvention. One answer was homologation by the pursuer's taking compensation — an annuity, house-rent and family clothing for two years and after he was undoubtedly sane and capable — 1" Gumming v. Mmiro, 1833, 12 S. 61— " Infra, pp. 203 seqq. a summons signed by a substitute of the ,, p^,-^^ . gj^^j^j^ ^_ ^^^^^ iT ° *o%n^^'fo Tn\.r r^J.- "15, M. 5654. See the important case of M'Ewan 1832, 10 S 572 aff. 7 W. & S. 411, Callander .. Callander's Trs., 1863, 2 M. ^er L Moncreiff (statutory nuUity). But 291, and cases there, especiaUy pp. 301, Dirleton seems ^ be nght m his distrust gog^ 3i4_g^ 317 (. adoption or re-iteration '), (as Cassandra) of the L^6w regula m Petne 334 (. repetition or re-iteration '). V. Richart, 1666, M. 5638. ' " Per L. Ch. Lyndhurst in Grants v. " ^* ^ M. 324. See also Shaw v. Shaw, Shepherd, 1847, 6 B. Ap. 153 at p. 172. '^^^^' ^^ ^- ^'^'^ (* o^^e of falling between And see Robertson v. Ogilvie's Trs., 1844, ^^° stools). 7 D. 236, esp. L. FuUerton's opinion ; " Gall v. Bird, 1855, 17 D. 1027 ; and Boawell v. Boswell, 1852, 14 D. 378. see a case of a pupil heir-portioner— Harvle " Ibid.. V. Gordon, 1726, M. 5712, and the different 1= Ly. Bute's Chaplain v. Her Son, 1666, views in Ersk. 3.3.47 ; 1 B.C. 145 ; Moir's 2 B.S. 423 ; Gumming v. Munro, supra ; Notes, 98 ; Dickson, Evid. s. 854. As we of. Bruce v. Bruce Carstairs, 1770, M. 10805, shall see, the distinction between homologa- aff. 2 Pat. 258. tion and adoption is not vital. HOMOLOGATION 143 and allowing the defender to keep the firm's property and business. Homologation was held to be sufficiently averred and was allowed as a counter issue against the case of facility — which could only render the transaction voidable — but not against the issue of insanity, which, if proved, would make the transaction void ah initio. Adoption was not pleaded.^^ In a earlier case a transaction which, when taken in connec- tion with previous abortive arrangements, contained in gremio proof of fraud and circumvention, was not allowed to be set up by ratification, when the pursuer came of age, and by his silence for thirty years during which he had been serving as a soldier.^® But ' supposing a man to have ' been conciissed into a bargain, yet, if he afterwards homologated it, ' when at freedom, he could have no relief,' and the same principle would apply to an averment of fraud in the ordinary case.^" And homo- logation brought about by misrepresentation, however innocent, cannot be relied on.^^ The party alleged to have homologated must at the date have Actual been capable of giving effective consent,^^ and the seeming consent must not be unreal or brought about by misrepresentation or in certain cases by non-disclosure, under the ordinary rules relating to error in essentiali- bus and error fraudulently or innocently induced.^^ Subject to some relaxation in the case of a compromise or transaction, 2* it is, therefore, involved that he shall have had at the said date adequate knowledge of the factors in the problem, and in particular of his right to repudiate and the patrimonial consequences thereof.^^ And he must be free to dehberate and choose.^* In a recent case, it was held in the Court of Session ^' that a widow. Error in law. entitled imder a trust to the hferent use and enjoyment of a house, was not precluded from getting declarator of immunity (in a question with the trustees) from hability for owner's rates and burdens, by having defrayed 1* In such cases homologation comes up been given in any case — Smith v. Kay, at the trial, not as a preliminary point — 1859, 7 H.L.C. 750, 770 ; c/. Lewis v. M'Michan v. M'Miohan, 1839, 1 D. 1085. Lewis, [1904] 2 Ch. 656, 662. " Leiper v. Cochran, 1822, 1 S. 552. « Infra, p. 156. See also Dunbar v. Bp. of Murray, 1672, 25 Passim in this chapter ; Telfer v. 1 B.S. 649. Maxton, 1661, M. 5631 ; Douglas v. " Rigg V. Durward, 1776, M. App., Douglas' Trs., 1859, 21 D. 1066 ; Anderson Fraud, No. 2. «■ Bank of Scotland, 1836, 9 Sc. Jur. 53, 21 Hutchison v. Hutchison, 1822, 1 S. 66. Cf. Thomas v. Daw, 1866, L.R. 2 Ch. 295 ; Douglas v. Douglas's Trs., 1859, 21 1 ; Lynch v. Sewers Commrs., 1885, 32 Ch. D. 1066 ; Ogilvie v. Soot, 1694, M. 5682. D. 72 ; Mactavish's J.F. v. Michael's Trs., 2" Infra, p. 153. D. Gordon v. Innes, 1912 S.C. 425 (but no eondictio indebiti). 1821, 1 S. 150, aff. 1 S. Ap. 169 (remote heir ^e Rue v. Houston, 1668, M. 16484 ; substitute in entail) ; Sanders v. Sanders' Burnet v. Ewen, 1680, M. 16494 ; Bp.' of Trs., 1879, 7 R. 157 (wife anticipating Ross v. FouUer, 1760, 2 B.S. 479, is contra, income) ; Henderson v. Henderson's Trs., but see Fountainhall's comment. 1909, 2 F. 1295 (do.). " Johnstone v. Mackenzie's Trs., 1911 2' For an early case, see Balfour v. S.C. 321. The reversal, 1912 S.C. H.L. 106, Wood, 1670, M. 5640. The onus in the did not touch the points here dealt with, case of minors lies on the other party to See also Henry v. M'Ewan, 1832, 10 S. 572, show that the homologation would have aff. 7 W. & S. 411, per L. Cringletie. 144 HOMOLOGATION them for eight years ; by consenting to the distribution of the truster's estate other than capital required to support her Hf erent ; by not objecting to a statement of affairs in which the value of her provisions was calculated under deduction of the said rates and burdens ; and by dis- charging the trustees of their intromissions up to date. For the question had never been considered by independent soHcitors ; and there was error on both sides in regard to the law.^* In a question with beneficiaries it is difficult to prove homologation or condonation of a breach of trust,^' and impossible where they were not aware of the objectionableness of the transaction ; as where trustees sold to a Kmited company a business which they had, as authorised, carried on for many years, the' trust funds being made part of a large preference stock, and the trustees taking ordinary shares as individuals. They thus bought part of the trust estate for their private profit. The law of constructive trust was enforced by the Court, disregarding a plea of homologation or consent.^" But there may be homologation of what is past without its extending to the future ; as where trustees set up a sinking fund for the purpose of adjust- ing the capital value of redeemable stock bought by them at a premium, and the Uferenter, thus endamaged, had adjusted accounts while he knew or ought to have known of the error. ^^ Change o! The ' change of position ' involved in all questions of bar or estoppel position. |g necessarily present. ^^ The amount of it, as substantial, is indicated by the fact that homologation salves ' enorm lesion,' ^^ as viewed at the date when the ratified transaction was entered into.^* Unequirooaliy The further requisite, common to aU cases of personal bar, that the thing said or done must be unequivocally referable to the disputed transaction is chiefly illustrated by cases relating to the attestation of deeds by witnesses who have or may come to have an interest in the Witnessing, contents. This matter is weU put by Mr Bell in his larger treatise : '^ ' The proper and only legitimate purpose of this act is to attest the ' authenticity of the subscription of the granter of the deed ; and, ' therefore, it infers not, in the common case, homologation of the ' deed.^® But where, in addition to this, either the connection of the ' parties and nature of the transaction are such as to afford real ' evidence of knowledge of the deed, or where there is evidence of its 2' There was also decree for the over- right. Contrast with Donald v. Hodgart's payments for the eight years, but it was Trs., 1893, 21 R. 246, where suoH know- not sought to make the trustees personally ledge could not be expected of two young liable. girls (goodwill not entered in a sale by ^° City of Glasgow Bank v. Parkhurst, trustees). 1880, 7 R. 749 ; Ommanney v. Smith, 1854, =* See Grant v. Anderson, 1706, M. 16509 16 D. 721 ; and see Scott v. Handyside's (overcoming plea of vis (w metui,). Trs., 1868, 6 M. 753. as As to which, see Fraser, Parent and »» Taylor v. Hillhouse's Trs., 1901, 9 Child, 502, in the special caae of minors. S.L.T. 31. 34 See in re Hancock, [1905] 1 Ch. 16, 31 Heath v. Ramsay, 1902, 10 S.L.T. 462 19. (L. Kyllachy). The trustees had also paid =5 j g q (y^h ed.) 140. away capital in reliance on their being »« See Veitch v. Pallat, 1676, M. 5646. referable. HOMOLOGATION 145 ' having been read to the person so subscribing, the subscription as * witness has been held as homologation.' Thus a fiar, by merely being witness to a lease for years granted by the hferenter, did not preclude himself from removing the tenant at the close of the liferent ; " nor a titular of teinds from challenging a ^ck by the patron ; ^s nor a witness, though there was in the deed a clituse in his favour.^^ Persons, nomi- nated in a will to help a tutrix and curatrix in her administration, at the close of the guardianship went over the accounts of charge and discharge and signed as witnesses to her subscription thereon, being afraid of re- course against them as pro-tutors and pro-curators if they subscribed as consenters. This was held not to import consent.*" A discharge by a stepfather, who had acted as pro-tutor, was signed by the minor creditor, now of age, as witness ; this was no homologation. *i A person mentioned in a bond as a cautioner signed only as witness ; he was held not bound, imless it were instructed that the bond was read over to him, and proof by parole of this was allowed.*^ On the other hand, subscription as witness by a husband to his wife's ' ticket " or bond has imphed consent.*^ So also has a father's signature as witness to his son's marriage contract, along with presumed knowledge of its contents, and in particular of a clause which curtailed or surrendered his liferent of land.** K's ' subscription as witness to C's fitted accompt with his ' father did so homologate the said accompt that he could not afterwards 'impugn the same, but it stood probative against him, because of his ' subscribing witness thereto and obvious concern in the subject matter.' ** Where one as witness subscribed his sister's marriage contract, under which execution was to pass at his instance, and in which a certain bond was assigned, he was barred by his presumed knowledge of the bond from impugning it.*^ A sohcitor who drew and engrossed a conveyance has been precluded from saying that the property in the land did not thereby pass.*' Homologation may be conditional, and the condition, if lawful and Efiect of within the competency of the party imposing it, may annul or modify <""<"'§*''<'"• the recognition.** It may be partial, and the effect thereof as confirming the whole transaction in question will depend on the indivisibihty of the ^' Schaw V. Tenants, 1592, M. 5628. and is best explained in Dallas v. Paul, 2* Powrie v. Johnston, 1613, M. 5629. 1704, M. 5677, 16839. See also Halyburton ^^ Walwood V. Taylor, M. 5629. v. Halyburton, 1666, M. 5675 ; Stewart v. " Ly. Rosehaugh, 1703, M. 5677. Stewart, 1663, M. 5674, whicli are over- " AUan V. Hamilton, 1715, M. 5654. ruled in Dallas. As to persons described *' Gordon v. Menzies, 1672, M. 5646. in gremio or in testing clause as consenters, *= Hepburn v. Kirkwood, 1680, M. 5650 ; see Wilson v. Purdie, 1745, M. 10451 ; Riddell v. Soot, 1728, M. 5681. Bothwells v. B. Home, 1748, M. 2989, " Berry v. Berry, 1725, M. 5657. 5662, 16811. As to clerk engrossing, "^ Home V. Castlestewart, 1710, M. Clare v. E. Bedford, 13 Vin. Abr. 536-7. 5655. Bishop of the Isles v. Schaw, 1631, " Lord v. Wardle, 1837, 3 Bing. N.C. M. 5630, cannot recur. 680. *" Davidson v. Davidson, 1714, M. 5652. *« Crichton v. Crichton's Trs., 1826, 4 S. This was a case of deathbed, where the 553, aff. 3 W. & S. 329; Malcolm v. position of the heir witnessing was peculiar Bardner, 1823, 2 S. 410. 10 146 HOMOLOGATION subject-matter.*" If the said transaction were successfully impugned by the aggrieved party raising action of reduction or pleading exception, the aim of the law would be, as far as possible, to effect restitutio in integrum.^" So conversely here homologation retroacts so as to shelter the transaction ab initio.^^ But, as is generally the case with personal bar, this safeguard against cavil holds only as between the parties and their privies or representatives ; it does not affect third parties possessing real rights in a process of competition. Thus it was argued that an ill- executed heritable bond was homologated by a well-executed assignation of the maills and duties of the burdened land of the same date and authenti- cated by the same persons. It was held that this might be so as between the debtor and the creditor, but that the homologation could not set the bond up in a competition with other creditors.^^ A minor, with consent of his curators, granted a bond for borrowed money and ratified it after reaching majority. But meantime his general creditors had challenged the bond. His act could not affect their position.^^ In reporting an old case,^* Lord Kilkerran puts the following dis- tinction : ' Although a promise, however absolute, to dispone lands or any other subject which requires writ, may be resiled from before writ intervenes ; yet the case is different of a promise to ratify an informal disposition already granted ; for, in that case, the action Hes upon the informal deed, and the defender is personali exceptione barred from objecting the nulhty.' And, accordingly, a promise to ratify an informal disposition to land was, in this case, found proveable by the oath of party. Mr More ^^ doubts whether this is sound, his ground in substance being that the two cases are strictly parallel. That is hardly so ; but the decision can scarcely be defended on the general doctrine of homologa- tion, seeing that it unduly trenches on the pohcy of our attestation statutes. 5' Approbate and It may be Well to begin illustration in detail of the foregoing doctrines by taking first the cases in which the terms Election or Approbate and " Infra, p. 155 ; Thomson v. Ms. 1 Elohies, voce Homologation, 1, and 11.. Annandale, 1829, 7 S. 305. 185. Mr Bell's doubt (1 B.C. 141) whether *» Good illustrations are given of this L. Kilkerran's expression was not a little by the House of Lords in York Buildings too broad ' that it was never found in Co. V. Mackenzie, 1795, 3 Pat. 378, 579 ; ' any case that homologation was good and by the legislature in the Presumption of ' in a competition ' does not appear to be Life Limitation Act 1891 (54 & 55 Vict. justified by any reported decision, c- 29), s. 6. 53 Harkuess v. Graham, 1833, 11 S. " 1 B.C. 140 ; Ersk. 3.3.49, (B. Pr. 27e 760. is in error, as is pointed out in the 10th e* Christie's Daughters v. Christie, 1745, edition). In Elgin Lunacy Board v. M. 8437. The case as reported by Falconer Bremner, 1874, 1 R. 1155, afE. 2 R. H.L. 136, was not so simple as here stated. L.R. 2 Sc. Ap. 535, the Lord Ordinary's ^s jjotes to Stair, 66. opinion in this respect could not be can- =" See Rollands v. RoUand, 1767, M. vassed in the higher Courts ; Haswell v. 16851 ; Russel v. Paisley, 1766, M. 16904. Fortune, 1852, 24 Sc. Jur. 555 ; both poor The case of Clark v. Ross, 1779, M. 16942, law settlement cases. Hailes 817, probably turned on res mer~ 52 Liddle v. Dick's Creds., 1744, M. 5721 ; catmia or on English law. HOMOLOGATION 147 Reprobate are most commonly employed. It lies beyond the scope of this treatise to expound the law of election between testamentary pro- visions and what are strangely called legal rights, and between josthng provisions in the same testamentary writ or writs, whether these relate to Scottish property only or raise questions of private international law. The minor question here is, not whether a right or duty of election has arisen, but whether the choice has been effectually and irrevocably made. ' It must be held to be well estabhshed that the fact ' must be conclusively proved. But that does not mean that the ' proof must be by estabhshing direct acts. It may certainly be. impUed • from a course of acting, if the evidence leads clearly up to a safe implica- ' tion that the choice was made with fair and free deliberation, and ' without there being any ignorance of important matters which ought ' to be known before a decisive course is taken, and also nothing having ' been done by others tending to mislead.' 5' In the case cited the question was ' whether what occurred in the long course of years did ' not so crystaUise a family arrangement as to make it now indissoluble,' ^* and it was held to have done so. A son, on the death of his father, who had left his widow hferented in his whole estate, desired and allowed her to receive the whole income, lived in family with her, receiving board and lodging, and agreed to advances being made to her out of the capital. No claim for legitim was made till his bankruptcy trustee raised it twelve years after the father's death. The son had full materials and opportunity for making choice ; he had friendly and unbiassed advice ; he deponed that he had actually chosen to fulfil his father's wishes ; and it was not necessary to prove that he was aware of all the legal niceties that surround election between testamentary provisions and legal rights. Moreover, where the succession is in the hands of trustees, they should make them- selves acquainted with the alternative rights of widow (or widower) and children, and with the value of the estate, and give full information to the possible claimants.^* There is, of course, no true alternative, where the will carries only the dead's part ; ^^ and no true choice where it is induced by fraudulent or even innocent misinformation given by persons whose duty'it was to ascertain and tell the truth. ^^ The reported cases in which a widow or child has by conduct been Homologation held to have homologated testamentary provisions and therewithal to «s*^''''*«i- have renounced legal rights are neither numerous nor important. In widow. the most authoritative decision ^^ the facts in favour of homologation by a widow of her husband's provisions in his will were a bargain between her and persons interested in the succession, hj which she obtained a " BeU's Tr. v. Bell's Tr., 1907 S.C. 872, «» White v. Finlay, 1861, 24 D. 38. per L.J.C. Macdonald, p. 877. See per L. Benholm on the earlier cases. 58 ihid. " Inglis' Trs. v. Inglis, 1887, 14 R. 740 ** Keith's Tr. v. Keith, 1857, 19 D. (child told she would have the whole 1040 ; Ross v. Masson, 1843, 5 D. 483 ; legitim, not the half only). Macgregor v. Black, 2nd March 1839, F.C. '^ pixon v. Fisher, 1839, 1 D. 474, aff. 2 697 ; Macfarlane, Jury Cases, 266. Robins. 345. 148 HOMOLOGATION full equivalent for these provisions as in lieu of legal rights, gave up right to shares in a company, and discharged all claims on her husband's estate. It was noted also that she had opposed resort by a daughter to legitim, the extent of which might depend on the result of the mother's choice ; and that the latter's claim to jvs relictcB was made nine years after her husband's death. In the next case there had been enjoyment by the widow of the hferent of her husband's whole estate during the twelve years of her survivance ; her representatives could not repudiate her homologation of the will.*^ In a case already noted the mora ex- tended to twenty-five years after claim might have been made for part of the estate which was included in a parent's succession ; but this was a case of discharge rather than satisfaction of legitim.** In another case there was antecedent express consent by a wife in a wiU made by her husband and in an altered confirmation thereof to accept under it and against jus relictce, and this consent was acted on for the four years of her widowhood.*^ In a very special case an admiral's widow for ten years after her husband's death lived on the annuity due to her as such and touched neither her legal rights nor an annuity provided by her late husband, nor a sum to purchase furniture with, nor another stmi for mournings, although often called on — and once judicially — to elect. It was held that her representatives were barred from claiming arrears of terce, which is regarded by law as aUmentary. ' Silence often means ' acquiescence . . . and whether she would have been barred or not ' from making a claim for terce by her long acquiescence, certainly her ' right to make a claim for terce has not been transmitted to her re- ' presentatives.' ** It has even been held that a son accepting office and acting as one of his father's trustees and taking a small legacy under the trust-deed had homologated that deed and thereby passed from his claim of legitim.*' Homologation The cases in which it has been held that there has been no homologa- estabiished, tion of testamentary provisions, or none which can be supported if im- Widow. pugned, are more numerous and important. In one of the most modern,** where there had been an express and solemn taking by a widow under «3 Milne v. Innes, 1822, 2 S. 66. conversion of heritage — Nicolson's Ass. v. "■■ Cullen V. Wemyss, 1838, 1 D. 32, MacaUster's Tr., 1861, 3 D. 675 ; and 11 So. Jur. at p. 63, supra, p. 121 ; -wife's homologation of revocation of part Howden !/. Howden, 1841, 3 D. 388. of donation inter virum et uxorem — Corsar Further, as to iinplied discharge of legal v. Carmichael, 1687, M. 5710. rights— Hog v. Thwaytes, 1802, 4 Pat. 364 ; «» Stewart v. Bruce's Trs., 1898, 25 R. Robson V. Bywater, 1870, 8 M. 757, 965. The main points were the haste supra, Tp. 122 ; Fraser «. Eraser's Trs., 1834, (one to three months after the death, no 13 S. 703. interest of others being involved) ; want " Dunlop V. Greenlees' Trs., 1865, 2 of legal independent advice; a question M. 1, afi. 3 M. H.L. 46. as to value of certain industrial shares. 8" Pringle v. Pringle, 1870, 8 M. 622, 625, That remarriage was the occasion for per L.P. Inglis. The distinction may be impugning the election was no objection, open to doubt. As to the last, see the plea of sincerity in «' Carmichael v. Carmichael's Trs., 1823, G. v. M. or C. B. v. A. B., 1885, 10 Ap. Cas. 2 S. 198. See also heir's homologation of 171, 12 R. H.L. 36. HOMOLOGATION 149 her husband's will in Heu of terce and jus relictce, Lord Kincairney, Lord Ordinary, whose judgment reducing the election was affirmed, pointed out the main questions that had arisen in earUer decisions. Was election intended 1 Was the widow unfairly treated, misled or unduly influenced by the trustees or their agent ? Had she intelligence and capacity enough to understand the problem, and had she been candid in her account of what had taken place ? If the election occurred, or was said to have occurred, soon after the death, was there any need for haste ? Was she then in a position to appreciate the significance of a clause of forfeiture, total or partial, on remarriage ? Had she before her the possibility of the children claiming legitim ? Were the figures tendered inadequate, however honestly concocted, to raise the whole problem ? Had there been resort to independent legal advice ? So that, while in some such cases homologation has been negatived (as in other illustra- tions of personal bar) on the ground of no definitive change of position having been brought about,^^ it wiU be apparent that the principal element is knowledge or the lack of it — sufficient knowledge to enable an intelligent and deliberate choice to be made, there being revealed everything that is material and calculated to affect the choice.'" On the other hand, if election has been definitively made, it cannot be re- tracted merely because there has been a change of mind or of interest.'^ Homologation by a widow of her husband's will shall hardly be A real option, admitted if it gives her nothing more or less '^ than she was entitled to under antenuptial '* or postnuptial contract '* or separable mutual will,'^ though she has confirmed as his executor ; '* or if her choice is made soon after his death, in luctu, and with a natural desire prima facie imctus. to fuffil his wishes, and is recalled without undue delay." This holds, though in the interval she has received discretionary doles from his trustees under the will.'* ' The signing of the minute must be taken in ' connection with the whole circumstances — the time, the occasion, and the ' distress of the pursuer both in body and mind.' " The unprotected female, unadvised or ill-advised, is a favourite of the Court ; ^° it would not be too much to say that her ignorance of business is assumed.*^ In the question of balancing values, forfeiture on remarriage of liferent Remarriage. '' Stewart, supra ; M'Fadyen v. minute signed by widow the day after the M'Fadyen, 1882, 10 R. 285 (also a case funeral) ; M'Gregor v. Black, 1839, 14 F.C. of remarriage) ; Donaldson «;. Tainsh's Trs., 687 (sent to jury; signature eight days 1886, 13 R. 967 ; Dawson's Trs. v. Daw- after the death ; ignorance of rights ; no son, 1896, 23 R. 1006, 1009, per L. Kinnear. independent advice) ; Macf. Jur. Cases, '» 25 R. 978, 982. 266. '1 25 R. 972. " Selkirk, supra. ''" See Borthwiok v. Scot, 1724, M. " Macgregor, supra, in charge to jury, 6149. per L.P. Hope. " Rae V. Neilson, 1875, 2 R. 676. «» Stewart v. Baillie, 1841, 3 D. 463. " M'Gill V. Ruthven, 1664, M. 5696. " Bell v. Laurie, 1801, Hume 486 ; " Dow V. Beith, 1856, 18 D. 820. See M'Leod v. Black, 1830, 14 F.C. 69 ; Selkirk M'Gregor, infra. v. Law, supra ; M'Fadyen v. M'Fadyen, '* Rae, sv/pra. supra ; Loudon v. Loudon, 1811, Hume 23 ; " Selkirk v. Law, 1854, 16 D. 715 (trust Logan v. Logan, 1869, 7 S.L.R. 40. 150 HOMOLOGATION provisions may turn the scale, and the possibility or prospect thereof is not presumed to be a prominent element in the origiual choice. ^^ The tempus inspiciendiim in this computation is the date of the husband's death, 83 except where and in so far as his assets have been retained in a business. 84 It was no homologation of a husband's wiU that for ten years the widow had drawn an annuity provided by it, as well as sums to provide for sickness in the family.*^ A case of inadequate and mis- leading information is instructive. The husband's will tendered to the widow provisions substantially short of her legal rights and prescribed forfeiture on her remarriage. She married again within the year, signed as a trustee a minute of trustees, accepted an annuity under the will, and was shown part only of an opinion of counsel, obtained on an in- adequate memorial and bearing that she had homologated the will. She was held not to be barred from claiming her legal rights twelve years after her husband's death. There was no ' clear, distinct, imequivocal ' evidence of her consent to surrender these rights.' And at the date of the alleged homologation the period of division of the husband's estate had not arrived.*^ In a later case Lord Justice-Clerk MoncreifE remarked : ' As a general rule, unless a widow has independent legal ' advice when called on to make her election, it would require a very ' strong case indeed to induce me to hold her bound by her signature.' In that case the signature approbatory of the will was given three months and repudiated three years after the death, and no sufficient estimate of the alternatives and of the result of remarriage — which occurred — had be.en put before the widow.*' Children. Similar rules obtain in regard to legitim. There must be a true alternative. 88 It is not enough for the child to know the value of the provision in the wiU, if he is ignorant of the value of his share of the legitim. 88 A son was left his father's whole estate burdened with an annuity to his only sister. She thereafter hved in family with her brother for twenty-one years without drawing from him any part of the money, and then claimed legitim out of their father's estate. Her brother had never communicated to her how she stood under the wiU or put her to her election. The claim was allowed. ^^ An heir, said to be entitled to a Ubrary and family pictures antecedently to title under his father's wiU, and to legitim under his parents' marriage contract, did not, by taking *^ Stewart v. Bruce's Trs., supra ; *' Donaldson v. Tainsh's Trs., 1886, M'Fadyen v. M'Fadyen, supra ; Donaldson 13 R. 967. Here, as In M'Fadyen, *', L. V. Tainsh's Trs., infra, " ; M'NeiU v. Steel's Rutherfurd Clark doubted. Trs., 1829, 8 S. 210 ; Keith's Trs. v. Keith, «« Hog v. Lashley, 1792, 3 Pat. 247— supra ; Hope v. Dickson, infra, *". discharge interrupted by father's death ; 8» M'NeiU V. Steel's Trs., supra. Hog v. Thwaytes, 1802, 4 Pat. 364. ** Ross V. Masson, infra ; 53 & 54 Vict. *' Johnston v. Paterson, 1825, 4 S. c. 39, a. 42. 234. 85 Ross V. Masson, 1843, 5 D. 483. The »» Sime v. Balfour, 1804, M. Heritable plea was not taken in the Inner House. and Moveable, Appx. No. 3, aff. 5 Pat. Ap. 8« Hope V. Dickson, 1833, 12 S. 222, per 525 ; and see Minto v. Kirkpatrick, 1842. L. Balgray. 4 D. 1224. HOMOLOGATION 151 possession of these articles for two months and until he learnt of his alternative rights, homologate the will. ' The plea involves the pro- ' position not only that the party has already taken under the deed, ' but that he has so taken under it as to be precluded from shaking him- ' self free from it . . . that he is not in a condition to abandon — that ' he has already done somethmg which precludes him from abandoning ' the one right and betaking himself to the other.' '^ The same heir was held not to be barred from claiming legitim by certain transactions relating to his entailed estate and to the interests of younger children — these having no relation to the question of legitim. "^ A claim to legitim . was made two years and ten months after the parent's death, the claimant having been till then in ignorance of his right, and it was successful ; '^ but Lord Fraser L.O. raised two debateable points when he remarked : '* ' It is necessary, in order to support such a plea, that the person against ' whom it is stated shall have had knowledge — or ought to have had ' knowledge — of the legal rights which are said to have been abandoned. ' Perhaps it may be conceded that, if great hardship could result by the ' assertion of legal rights, that had been kept in abeyance, to the person ' against whom they are asserted, the plea of bar might be admitted, ' though there were ignorance of the rights.' And Lord President Inglis left the latter doubt unsolved, as not being raised by the facts as ascer- tained. There having been delay, his Lordship said : ' I do not think ' that it is sufficient to exclude a claim of this kind, even although the mis- ' understanding and ignorance upon both sides may have led to the ' defender being more liberal in some of her arrangements than she other- ' wise would have been. If the fault of ignorance lay upon one side only ' the case might be different.' '^ A later case added nothing to the general doctrines above described, except that a daughter's assignation to her marriage trustees of a sum as possibly falhng to her under her father's will was no homologation of the will, seeing that the trustees had no concern with the source of the fund.*^ In the law of election arising in regard to josthng testamentary pro- jostling visions and other disputed points of succession, the rules of homologation proT^ons. have little place, there usually being no doubt as to the choice made." Cases respecting deathbed are of use only indirectly in modern law. Possession under a provision which is the only title extant and is under reduction does not impliedly ratify it.'^ One who makes up title under '1 L. Panmure v. Crokat, 1854, 17 D. 85, »' But see Fordyce v. Eordyoe, 1743, 92-3, per L.P. M'NeiU. M. 5700. 92 jg jj ijQg 7j^Q '* See Malcolm v. Bardner, 1823, 2 S. «■! -P x^- * ' n -n t v +„«.. 410; Jolly v. Graham, 1822, 2 S. 730, «' E. Kintore v. Cs.-Dow. of Kmtore, „ „ ' „^ •!. ^, . ' ^ ' „ „ „^„ ' 1884, 11 R. 1013, aa. 13 B. H.L. 93. 1 ^^ f *■ f «■ "^ ^^' P°™*/ ^ & S 280 ; Borthwick v. Scot, 1724, M. 6149 ; M'GiU 11 R. 1025. J, Ruthven, 1664, M. 5696 ; St Andrews " 11 R. 1029. The delay was sufficiently Archbishop v. Bethun, 1684, M. 5699. explained, and the word ' fault ' is here As to confirmation being no homologation, loosely used. See 13 R. H.L. 98. gee Mitchel v. Mitchel, 1673, M. 5646 ; 9« Crellin v. Muirhead's Jud. Factor, Hunter v. Hunter, 1642, M. 5682 ; Williams 1892, 20 R. 51 (claim of representative). v. Evans, [1911] P. 175. 152 HOMOLOGATION an entail whicli is reducible as made ultra vires and who is ignorant of the blot has not homologated it, so as to prevent himself from challenging it and resorting to an earlier habile title. ^' In England it is abundantly estabhshed that in a case of election by conduct fuU knowledge of rights and intention to elect must be estabhshed ; ^'"' and that possession of both of two properties, no choice being called for and made, negatives election.^"^ Personal Disability 1. Coverture. — Questions as to status — which is not open to personal bar or exception ^"^ — and questions regarding cruelty and adultery — which are regarded as marital wrongs rather than as breaches of contract — he beyond the scope of this work, which must thus pass by condonation of cruelty and adultery, as well as the other pleas which, besides lack of proof, may bar a remedy. Further, even in questions of property and obligations thereanent the law has recently been so changed as to suggest caution in the use of early decisions.^"^ Moreover, the position of married women in the law of bar or estoppel has been incidentally noticed elsewhere in this volume.^"* Judicial ratification by wives is too solemn an act to faU under bar by conduct.^"^ A married woman's personal obhgations being till 1920 — subject to many exceptions — null to aU intents and purposes, her husband's ratification of them was most properly termed adoption. ^"^ But a married woman's instance as a pursuer might be supplemented pendente lite by the husband sisting him- self.^'" Whether the proper term be homologation or adoption, there could be effectual confirmation of a wife's obhgation if it were given »» Urquhart v. Urquhart, 1851, 13 D. 1825, 4 S. 254, rev. 3 W. & S. 85 ; and 742, aff. 1 Macq. 658 ; and see Dow v. Fraser, Husband and Wife, 138. Beith, 1856, 18 D. 820 ; Lang d. Dumbarton "^ 10 & 11 Geo. V. ■^. 64 (1920). E.g. Mags., 29th June 1813, P.O. 412 ; Wilson Mitchell v. Cunningham, 1672, M. 6711 ; V. Eliott, 1825, 3 W. & S. 60, aff. 4 S. Corsar v. Carmichael, 1687, M. 5710 ; 429 ; cf. EUott u. Heirs of Stobs, 1803, Gordon v. Parquhar, 1766, 5 B.S. 932 M. 15542 ; Little GHmour ». Hunter, 1801, (even payment of part of the sum in M. Tailzie, Appx. 9 ; MunroK. Munro, 13th annuity homologating the whole). Ersk. Feb. 1810, F.C. 581 ; Cunningham v. 1.6.25, 3.3.47. Cunningham, 1825, 1 W. & S. 103, aff. "^ See Index— Wife ; Husband. 2 S. 232. Many entail cases involTing i'^ ggg Eraser, Husband and Wife, 819 ; personal bar are superseded by modem and in this relation, Sinclair v. Richardson, legislation. 1677, M. 5647. "» Wilson V. Thombury, 1875, L.B. 10 "o See Eraser, H. & W. 806. In Eires Ch. 239 ; cases noted in 1 Swanst. 381 note ; v. Rires, 1663, M. 5619, the husband was Sopwith V. Maughan, 1861, 30 Beav. 235 ; bound by his homologation, but the wife Wintour v. Clifton, 1856, 21 Beav. 447, aff. not, in prejudice of her heritable right 8 De G. M. & G. 641 ; Reynard v. Spenoe, which was a wadset. Dunbar v. MelviUe, 1841, 4 Beav. 103 (five years ; dower). 1566, M. 5993, 6001 ; Borthwick v. Soot, !»' Padbury v. Clark, 1850, 2 Mac. & G. 1724, M. 6149 ; Ly. Cochran v. Ds. 298 ; Worthington v. Wiginton, 1855, Hamilton, 1698, M. 6001. In Grant v. 20 Beav. 67. BaiUie, 1830, 8 S. 606, prepositura was "2 Cochran v. Campbell, 1746, M. 10456, possibly an element. Elch. voce Property 7, 5 B.S. 789, 1 Pat. i"' Borthwick v. Urquhart, 1829, 7 S. 519, 3 W. & S. 135 note ; Clowden u. 420 ; Napier v. RoUock, 1631, M. 6047, Culton, 1774, M. 12683 ; JoUy v. M'Gregor, 1 B.S. 328. HOMOLOGATION 153 by her after the dissolution of the marriage ; ^°^ but it was not inferred from renunciation by her heir leading to effectual decree against her hereditas jacens.^'^^ Homologation of a donation inter virum et uxorem could formerly bar revocation, if it were dated subsequent to the dis- solution of the marriage.ii" As in aU cases of bar, knowledge of all material circumstances is requisite-^i"- In a well-noted early case where a husband, in a deed which bore to satisfy his wife's marriage settle- ment, fobbed her off with much less, her homologation was gathered from her possession during widowhood for five or six years of the lands thus faUing to her, and granting leases thereof. ' Albeit ignorance ' might be presumed in a wife de recenti et intra annum luctus, yet ' she having continued for so many years and doing so many deeds ' expressly as liferenter, and the bond not clandestinely lying by her ' husband, but in a third party's hand who had taken the infeft- ' ment . . . ignorance was not to be presumed but knowledge.' ^^^ 2. Minority. ^^^ — There is one case in which homologation or ratifica- statute avoid- tion is rendered void by statute. This is the Betting and Loans (Infants) S^void to^S° Act 1892,11* as amended by the Moneylenders Act 1900."6 The leading Act in its 5th section provides that : If any infant [i.e. in Scotland, any minor or pupil], who has contracted a loan which is void in law, agrees after he comes of age to pay any money, which in whole or in part represents or is agreed to be paid in respect of any such loan, and is not a new advance, such agreement, and any instrument, negotiable or other, given in pursuance of or for carrying into effect such agreement, or otherwise in relation to the payment of money representing or in respect of such loan, shall, so far as it relates to money which represents or is payable in respect of such loan and is not a new advance, be void absolutely as against all persons whomsoever. For the purposes of this section any interest, commission, or other payment in respect of such loan shall be deemed to be a part of such loan. . This section, though associated only with provisions against incite- ments to persons in non-age to bet or wager, is quite general in regard to loans in themselves void in law, and as to these renders nugatory any attempt to obtain ratification or adoption. But it does not alter our common law regarding void transactions other Common law than loans and the securities therefor, such as acts and deeds of a pupil, j?,*° '^*''^''*- of a minor having curator or curators without his or their consent, or of 1°' Wemyss u. Stewart, unrep., but c. 62), and in particular b. 2 thereof, stated in Fraser, H. & W. 532-3. denying action on ratification of an infant's i<" Thomson v. Stewart, 1840, 2 D. 564 ; contracts, does not apply to Scotland — no infeftment, but decree of adjudication Whitehead v. Philipps, 1902, 10 S.L.T. 577. standing for seventy years. See its scope explained in Eversley, "" Hope V. Dickson, '* ; M'Gregor v. Domestic Relations, sub voce Ratification. Black, ". "* ,55 Vict. c. 4. "1 Ogilvie V. Scot, 1694, M. 5652. "= 63 & 64 Vict. c. 51. See the onus as "2 Skene v. Ramsay, 1665, M. 5634. to knowledge of non-age, Act 1892, ». 2, "= The English differs so materially from and this Act, s. 5. There is an anticipation the Scottish law that it yields little aid here, of the Moneylenders Acts in Maxwell v. The Infants' ReUef Act 1874 (37 & 38 Vict. Pringle, 1760, M. 16431. 154 HOMOLOGATION Made after majority. Proof. a minor, gratuitously and otherwise than by testament, done in favour of a guardian. 11^ These may be impugned normally ^^' at any time within the long negative prescription ; and may conceivably be adopted under the rules stated later under the head of Adoption. ^^^ Thus in what follows attention will be confined to acts of a guardian or of a minor piibes which are voidable only, such as acts of a tutor in the wider sense of the term, of a minor having no father or curator, of a minor with consent of his guardians, or of a minor wife with the consent of her husband. It will be assumed that there has been enorm lesion. Except in cases of fraud, ^^^ action of restitution ex capite minorennitatis et Iwsionis must be brought within the quadriennium utile}^^ but during that period there may be bar of challenge through homologation or ratification, and after the lapse of that period it may be convenient to set up this plea as corroborative of or as alternative to the plea of limitation. To be effectual the ratification must be made after majority has been attained, '■^i for a nefarious practice was put an end to by the Act 1681, c. 19 (85). That practice was founded on the Eoman law and proceeded by causing minors to ratify their bonds and other important writs by oath swearing that they should never come in the contrary. The Act provides that no such oaths should be exacted, and,_if they were, the contract should be void and null ; the ehcitor or exactor should be infamous ; and the writs should be impugnable by any person related to the minor. Of course ratification cannot proceed from an idiot, ^^^ or from one who has at the time no direct interest.^^* Homologation after majority is proveable prout de jure,^^^ e.g. by the tenor of a correspondence.^^^ It is an unfavourable plea and not to be inferred if the facts are exphcable on some other footing.^^^ It ^^^ Manuel v. Manuel, infra, ^^', and cases there. The same ought to be true of his law agent. Revett v. Harvey, 1822, 1 Sim. & St. 502. ^^' As to ' reasonable time ' for challeng- ing in England, see Camell v. Harrison, [1916] 1 Oh. 328. "* See a case where a son succeeding to possession of an estate, but not repre- senting his father, his predecessor, did not adopt his father's debts, customary on the estate but not real — Henry v. Scott, 1892, 19 R. 545. As to ratifying deeds nuU ex capite lecli, see Brodie, 1827, 5 S. 900 ; Brown v. Muir, 1736, M. 5624 ; Richardson V. Richardson, 1848, 10 D. 872 ; Erskine v. Erskine, 1682, M. 5703 ; Crawford v. Crawford, 1683, M. 5694. "» Leiper o. Cochran, 1822, 1 S. 552 ; and see Manuel v. Manuel, 1853, 15 D. 284 ; Loohiel's Trs. v. Cameron, 1795, 1 F.C. N.S. 230, 2 B.C. 143. But the fraud must be particularly averred — Kyle's Trs. v. Allan, 1832, 11 S. 87. ^'"' The computation of this period where action is by minor's heir is explained in Fraser, Parent and Child, 3rd ed., 500-2. 121 Telford v. Jamieson, 1835, 13 S. 735 ; Linton v. Dundas, 1729, M. 5624 ; Banna- tyne v. Trotter, 1704, M. 8983, is described in Manuel v. Manuel, 1853, 15 D. 284, as special and is probably unsound. 122 Morton v. Young, Uth Feb. 1813, F.C. 179. "3 Innes v. Mordaunt, 1821, 1 S. Ap. 169. (heir-substitute in entail) ; Irving v. Tait, 1808, M. Deathbed, Appx. No. 6. 124 Gairdner v. Chalmers, 1636, M. 9024 (the minor was a notary pubUe and able to look after himself). 125 Forest v. Campbell, 1853, 16 D. 16. 126 Steel V. Steels, 1774, M. 5669 ; Hay V. Kilgour, 1755, M. 5663 ; Bams v. Young, 1665, M. 5685, 5711 ; Hume v. Lord Justice- Clerk, 1671, M. 5688, ' expietate ' ; Farquhar V. Gordon, 1668, 5685 (getting decree for relief of caution) ; cf. Falconer, 1685, M. 5694. HOMOLOGATION 155 may effectually be conditional i^' or only quoad the past.^^^ An ac- knowledgment of part will ratify the whole obligation, if it be truly indivisible.!^* ' When deeds of homologation are alleged to constitute ' a debtor they ought directly to relate to the deeds done in minority, ' and necessarily to imply a confirmation thereof.' i^" Therefore payment of interest after majority may be held to be only Homologation an actus necessarius done in order to avoid action or dihgence ; ^^^ or ""' P^^^^d. the deed said to homologate may be inappropriate for that purpose, e.g. a marriage contract,!^^ or an adjustment of accounts of which parts were vouched by bUls,!^' or as going beyond liabihty for necessaries.^^* In England a lease by an infant does not by accretion enure against him on coming after majority into title of the subject let ; ^^^ but, looking to the wider powers of a Scots minor, this would, it is thought, not be followed in our law, except in case of fraud. Receipt after majority of the interest and of part of the capital of the price of an estate sold when one of the heirs portioners was only eleven years of age was held no ratification of the sale, seeing that the impugner was presumably ignorant of the blot ; ^^^ and fuU knowledge and appreciation of all material circumstances are essential, and knowledge duriag minority may not conclusively infer knowledge after majority. ^8' But if one grants a lease when nearly of age, accepts an increased rent and Hngers on his remedy, he may justly be held to have ratified the lease.^^* It is no homologation of a reducible deed— a grossly improvident postnuptial contract ^^^ or a deed of exoneration of guardians,!*" for example — that the pursuer after majority has received what was ' uncontrovertibly ' hers or his, whether the deed was reduced or not. An inchoate or pro- visional recognition is not a bar to challenge of a decreet-arbitral on the groimd of minority and lesion. !*i And the choice to ratify or impugn passes from the party said to be lesed, when bankruptcy process against him is in dependence.!*^ 1" Murray v. Murray, 1671, M. 5689 ; i^* SomerviUe v. E. Annandale, 1688, Hunter v. Hunter, 1642, M. 5682. M. 5694. "8 Chalmers v. Wood, 1668, M. 5698 "° Smith v. Low, 1739, 1 Atk. 489. ' Towers v. African Tug Co., [1904] (^^^ report of L. Cranworth's opinion is 1 Ch 558 questioned in Keighley, supra, p. 158, at ^''Ibid., per Cozens -Hardy L.J. at [1901] A.C. 247, 253). p. 571 (common informer). ^™ Bolton Brothers v. Lambert, 1888, "' Cullen V. Thomson's Trs., 1862, 41 Ch. D. 295, doubted by the Judicial Com- 4 Maoq. 424 ; Smith v. Taylor, 1882, 10 mittee in Fleming v. Bank of New Zealand, R. 291 ; Hilberry u. Hatton, 1864, 2 [1900] A.C. at p. 587. In Portuguese Copper H. & C. 822. Mines, 1890, 45 Ch. D. 16, neither allottee 1°' In re Tiedemann, [1899] 2 Q.B. of shares effectually repudiated before 66. ratification; cf. Tiedemann, supra, 1°'. 164 HOMOLOGATION Material facts known. ' effected may ratify the contract even after he is aware of a loss.' 2"* The same is not true of a fire or other policy.^"^ 4. Knowledge of Facts. — There may be ratification, either if the ratifier is aware of all the material circumstances surrounding the agent's actings or if he can be shown to have accepted without inquiry the risk of anything that had happened ; and not otherwise. Accordingly, when a company agent, employed to conduct an amalgamation of two com- panies and paid for his work, engaged law agents to draw an incidental deed without the knowledge of either company, the law agents were held to have no claim to their fees as against either company or against the combination-^^s It would have been different if the principals could not but have known that delegation of part of the work was in- dispensable 2"' or invariably done.^"* Proceedings were taken by an absentee's agent without his authority but plainly in his interest. The action was thrown out for lack of mandate. But before a reclaiming note came on for hearing a sufficient mandate, homologating the agent's actings, was put in. The case was allowed to proceed in spite of a plea that the defect was radical, and different from that of an actual mandate informally instructed.^"* In an action by London solicitors for their bill against an appellant (F.) for whom they acted in the House of Lords it was found proved in point of fact that at or soon after the presentation of the appeal F. knew that it had been presented in his name, was there- after cognisant throughout the proceedings that the same continued in dependence, and neither withdrew his name therefrom, nor objected to the use made of it, nor disputed his liability for expenses ; but, on the contrary, allowed the solicitors to proceed in the beUef that he was an appellant. The result was decree in favour of the solicitors. Antecedent authority was doubtful'; the adoption of the proceedings was clear.^^* A mandate was given to an agent by objectors to the renewal of certain public-house licences ; but none to take an appeal. The case was carried on and the agent succeeded in the appeal. In an action of reduction it was held that the proceedings in the appeal were futile for lack of man- date, and further that they could not be set up after the appeal became final (a) by there having been no disclaimer, or (6) by the clients having authorised the agent to resist the reduction. This would have been ' Heads I win, tails you lose.' ^" It was further pointed out that in cases 2"« 6 Edw. VII. u. 41, s. 86 ; WilKams V. N. China Ins. Co., 1876, 1 C.P.D. 757 ; Cory V. Fatten, 1874, L.R. 9 Q.B. 577. 2°* Grover & Grover v. Mathews, [1910] 2 K.B. 401. "<" Robertson v. Beatson, M'Leod & Co., 1908 S.C. 921. 2<" Speight V. Gaunt, 1883, 9 Ap. Cas. 1 (employment of stockbrokers by trustees) ; Hamilton v. Thomson, 1868, 6 S.L.R. 14 (employment of Edinburgh agent by country agent in an advocation) ; Macqueen V. Colvin, 1826, 4 S. 786. 2»» Black V. Cornelius, 1879, 6 R. 581 (architect employing a measurer). 2o» WyUe V. Adam, 1836, 14 S. 430. What if it had been a pure case of negotiorum gestio ? "» Robertson v. Foulds, 1860, 22 D. 714. Their direct employers were F.'s Scots agents, from whom P. took a guarantee. "1 See also Gallie v. Wylie, 1845, 7 D. 301 (parties to litigation lying by till their aide gained). HOMOLOGATION 165 where ' counsel's gown covers his mandate ' the question of authority — and consequently in default of authority homologation — seems never to arise in the course of an ordinary litigation — whatever might be said of cases on appeal to the Court of Session from a Sheriff Court.^^^ The English cases are instructive. As put by Dr Lushington : ^^^ English cases. ' Confirmation is an approval of a measure already taken or announced ' to be about to be taken with a knowledge of all the important circum- ' stances. A man cannot approve what he does not know.' There the master sold a ship in a foreign port ; and it was held that ratification by the owner could not be inferred from vague expressions of approval. The owner was not aware of the true state of the facts regarding the sale. The master had been hasty in selling. The port was in telegraphic communication with home. Lloyd's agent had disapproved. The ship had been little damaged. So Uttle did the owner know of the facts that he claimed from underwriters as for a total loss. Moreover, his receiving the price in bills was no bar to a reduction of the sale. In contrast may be cited a similar case where the thief of a ship sold her to a foreign agent who had no authority to purchase her for his principal, and the jury was able to speU out from an unguarded letter the ratification of the priucipal, who really knew nothing of the theft and was cast in damages to the true owner.^^* The proof of ratification was much stronger, where a ship was by the master sold abroad and where the principal pocketed the price, refused the buyer's ofier to restore the ship in return for what it had cost him for price and repair, and recognised a subsale. ' The ' jury found that the sale was ratified with knowledge ; but perhaps ' there was not sufficient proof of knowledge of all the particulars of the ' sale. In our opinion, however, this is not material ; for as the plaintiff ' received the balance of the purchase-money from the vendee's agent ' without objection and thereby induced him to suppose the sale to have ' been regularly made with his consent and to part with the price, he ' must be taken either to have known and approved of the mode of ' sale or to have waived all objection to it.' ^^^ Three important BngUsh cases may be cited, as arising from fraud j^gent in or breach of duty on the part of agents. In one of them it was clear *»"!'• that, where one solicitor used the name of another in a suit for a fraudulent purpose, the latter was completely ignorant at first of his name being used at all, and latterly of its being misused.^is ' Where the supposed »i2 Goodall V. Bilsland, 1909 S.C. 1152, proceeding on parol directions from the per L Dunedin L.P. at pp. 1174-5. agent was also held to be ratified. See also -3 The Bonita, 1861, Lush. 252, 264, ^^^^^^ - Seating. 1833, 2 a. & P. 250, 290 on T X A J i^.r i=ro ( means of knowing ). 30 L.J. Adm. 145, 152. ,„ ^^^^^ ^ ^^^^^^^ ^^^^^^ ^ ^^ 2^3 2" Hilbery v. Hatton, 1864, 2 H. & C. .pj^g latter was liable only for a small sum 822 ('make a hulk of her'), sed qucere. ^^^ <,£ tj^g fraudulently obtained money. See also a case of master in foreign port ^hich he honestly received — he so far pledging owner's credit— Gunn v. Roberts, condoned what he believed was merely 1874, L.R. 9 C.P. 331, esp. at p. 335. ^^ irregularity— p. 217. See as to know- "i! Hunter v. Parker, 1840, 7 M. & W. ledge, Hambro v. Burnand, [1903] 2 K.B. 322, per curiam at p. 342. The auctioneer's 399, 414 ; [1904] 2 K.B. 10. 166 HOMOLOGATION Principal taking the risk. ' ratification relates to acts as to which there is no pretence of any ' a priori authority, as in this case ; where it is not a question merely of ' excess of authority; full knowledge of the facts and unequivocal adoption ' after such knowledge must be proved, or, in the alternative, the cir- ' cumstances of the alleged ratification must be such as to warrant the ' clear inference that the principal was adopting the supposed agent's ' acts whatever they were or however culpable they were. ... I cannot ' see my way, therefore, to the conclusion that [the alleged ratifier's] ' silence in any sense led to any part of the loss.' ^i' In another case, where a law agent used his position, as acting for two clients, fraudulently for his own benefit, the fact that one of the chents recognised the vahdity of certain deeds was of no avail as ratification of the frauds, seeing that it arose from entire ignorance of the most important fact in the case.^^* In the third case a shipping agent attempted to retain profit made on a re-sale of a ship after having bought it in for himself without antecedent authority. Ratification was pleaded and rejected. ' It is competent, ' no doubt, to a principal to ratify or adopt the act of his agent in pur- ' chasing that which such agent has been employed to sell, and to give ' up the right which he would otherwise be entitled to exercise of either ' setting aside the transaction or recovering from the agent the profits ' derived by him from it ; and the non-repudiation for a considerable ' length of time ^^^ of what has been done would, at least, be evidence ' of ratification or adoption ; . . . but before the principal can properly ' be said to have ratified or adopted the act of his agent or waived his ' right of complaint in respect of such acts, it should be shown that he ' has had fuU knowledge of its nature and circumstances, in other words ' that he has had presented to his mind proper materials upon which to ' exercise his power of election, and it by no means foUows that, because ' in a case like the present he does not repudiate the whole transaction ' after it has been completed, he has lost a right actually vested in him ' to the profits derived by his agent.from it.' ^^^ On the other hand, the fact may be that the principal has put himself unreservedly in his agent's hands after he knows generally what is being done ; and this is equivalent to precedent authority.^^^ And the principal is fixed with the interpretation in law of a 21' Per curiam, pp. 247, 248. "« WaU V. Cockerell, 1863, 10 H.L.C. 229, 246. 21° In some oases enough is adoption even ' for a moment ' — per BuUer J. in Smith V. Cologan, 1786, 2 T.R. 189 note (marine insurance). 22" De Bussche v. Alt, 1877, 8 Ch. D. 286, 312-3, per curiam. There are further examples from irregularities in distraining for rent — Lewis v. Read, 1845, 13 M. & W. 834 (alien sheep ; no ratification) ; Free- man V. Kosher, 1849, 13 Q.B. 780 (fixture ; no ratification) ; Haseler «. Lemoyne, 1858, 5 C.B. N.S. 530 (left it to his agent ; ratifica- tion). And as to arrest by a railway porter —Edwards v. L. & N.W. Ry. Co., 1870, L.R. 5 C.P. 445. As to ratification which is ultra vires — La Banque Jacques-Cartier V. La Banque d'Epargne, 1887, 13 A.C. Ill ; and where there is fraud — Bartram v. Lloyd, 1904, 90 L.T. 357 ; Morse v. Royal, 1806, 12 Ves. 355 at p. 373. 221 Hunter v. Parker, 21 c . Haseler v. Lemoyne, 220 . Fitzmaurice v. Bayley, 1856, 6 E. & B. 868. HOMOLOGATION 167 contract made for him by his agent, though it be contrary to his intention. 2^2 5. Proved expressly or by Conduct. — Eatification may be express.^^^ in agency What is more germane to this treatise is that it may be proved by evi- f^oplf ™ dence of conduct. To estabhsh a case of authority by ratification there must be some substantive proof ; it must not rest on probability or conjecture.^^* The simplest cases relate to purchases on credit of necessaries by domestic servants,^^^ or by wives under their prepositura,^^^ or by children not forisfamiliated, ^2' or by officials of a company,^^* the things bought being in each case openly used. In cases where business has been entrusted to an agent, and the question is whether the principal has ratified what has been done by the agent in excess of authority, the proof may be slender and yet sufficient, if the principal knowing the facts and having a duty to disclaim has kept silence for a substantial period of time ; ^^* as where a bankruptcy trustee having been sisted in an action becomes liable for expenses ; ^^^ or a ship's-husband insures without instructions from part-owners, and they are told of the insurance and express no objection to it, this acquiescence being sufficient evidence of their directing it ; ^^^ or a captain instructed to sell goods goes beyond mandate in pujchasing goods, and the principal delays for more than two months before attempting to repudiate the purchase ; ^^^ or a ship is sold by the master in a foreign port, and the owner's conduct shows that after being fully informed of all the circumstances he adopted no measures for asserting his rights at the earliest period the circumstances allowed.^^5 Where there has been no such general agency, the proof of conduct No general on the part of the principal amounting to ratification of what the agent *^®'^''''' has done or is doing has to be more emphatic, the question being really one of intention. There could be no plainer homologation of an ageiit's action than to sue on it ; or to indicate where service will be accepted of 222 PoweU V. Smith, 1872, L.R. 14 Eq. 85 C.B. 897, followed in AUard v. Bourne, (break in lease held to be in favour of 1863, 15 C.B. N.S. 468, and approved in tenant only). Cartmell's case, 1874, L.B.. 9 Ch. 691 ; 223 fiijg jji negotiorum geatio is illustrated and Biggerstaff v. Rowatt's Wharf, [1896] in Ross V. jFisher, 1833, US. 467 ; Hepburn 2 Ch. 104. And see under ' Holding out,' V. Tait, 1874, 1 B. 875. As to renewal of infra, Chap. VII. a bill— Stein's Ass. v. E. Mar,. 1827, 6 S. 1, ^29 Contrast Levita's case, 1870, L.R. 7 S. 691 note. 5 Ch. 489, with Robinson's case, 1P69, 224 Fitzgerald v. Dressier, 1859, 7 C.B. L.R. 4 Ch. 322 (taking shares in company). N.S. 374, 397, 398-9. "so WaUace v. Miller, 1821, 1 S. 38. 225 Oliver v. Grieve, 1792, Hume 319 ; See dicta of L.R IngUs in Union Bank v. Driver v. Naime, Hume 340 ; Mortimer v. Makin & Sons, 1873, 11 M. 499. Hamilton, 1868, 7 M. 158. 231 French v. Backhouse, 1771, 5 Burr. 226 Eraser, Husband and Wife, 605, 627 ; 2727, followed in Robinson v. Gleadow, Morel Brothers & Co. v. E. Westmorland, 1835, 2 Bing. N.C. 156. £1904] A.C. 11 ; Waithman v. Wakedeld, 232 prfnce v. Clark, 1823, 1 B. & C. 186 1807, 1 Campb. 120. (called acquiescence or assent, 190-1). 22' Knox V. Hay, 1813, Hume 351 ; 233 Lapraik v. Burrows, 1859, 13 Moo. Ferguson v. Stephen, 1864, 2 M. 804. P.C.C. 132, 159. The market for shipping 228 Smith V. HuU Glass Co., 1852, 11 had suddenly risen in the interval. the whole. 168 HOMOLOGATION an action brought to impugn it ; ^3* or to put in plea payment by an agent, even after repudiating bis authority to pay ; ^^^ or to sue one as agent for his intromissions with property ; ^^e ^j, ^q accept payment of a price after giving the agents — originally not authorised to sell — a power of attorney to transfer to the purchaser the subject sold.^^'' Difficulty in discrimina- tion, where a bank agent is also a banker on his own account, is not likely to recur.^^* A neighbour of persons ' in an inferior position,' who had come into money, took gratuitously and without any special or general mandate management of their affairs, and in particular negotiated a loan on heritable security and had frequent communings with them there- anent. On the day fixed for settlement they forbade further proceedings. Action being brought against them and the neighbour for damages, the latter, who had guaranteed the proposing borrowers against the expenses they had incurred, was held to have full right of relief. The lenders had given him reason to beheve that the money would be advanced and allowed him to carry on the negotiation on that footing.^39 Ratiacation of 6. Not partial. — In the ordinary case the ratification must be of the whole transaction in question ; 2*" the benefit, subject to the oiTtlay though unauthorised necessary to earn it, ^*^ or to the expense of a successful action if it be not otherwise recoverable.^*^ ' If you adopt D. as your ' agent on your own behaH, you must adopt him throughout and take his ' agency cum onere.' ^*^ Assignees in bankruptcy having once affirmed the acts of a person who had wrongfully sold property of a bankrupt ' and treated him as their agent, they cannot afterwards treat him as ' a wrongdoer, nor can they affirm his acts in part, and avoid them as ' to the rest.' 2** The principal, by taking over the contract of his agent, takes it with all the admissions and representations given by the latter whether innocent or fraudulent. Conversely, a ratification induced by the untrue representations of the third party is not binding. But rati- fication may be made conditionally.^*^ Retroaction. Effect of Ratification. — If ratification is proved to have taken place, 2^* Carter 0. St Mary Abbott's Vestry, '*" But see supra, p. 145, as to divisi- ■ 1900, 64 J.P. 548. bUity. 235 Simpson v. Egginton, 1855, 10 Exch. ^u Bristow v. Whitmore, 1861, 9 H.L.C. 845. See Bird v. Brown, 1850, 4 Exch. 391. 786, canvassed in Keighley, supra, p. 158. 24a I'rixione v. Tagliaferro, 1856, 10 Moo. 236 Lyell V. Kennedy, 1889, 14 Ap. Cas. P.C.C. 175. 437, and supra, p. 160. 243 Ho^ji „ p^ct, 18O6, 7 East 164, 23' Keay v. Fenwick, 1870, 1 C.P.D. 745. per L. EUenborough C.J. See Keay v. The usual terms of commission were Eenwiok, supra, 2" ; Ramazotti v. Bowring, applicable. 1859, 7 C.B. N.S. 851, 856. 23* Bank of Scotland v. Watson, 1813, 241 Brewer v. Sparrow, 1827, 7 B. cSi C. 1 Dow 40, revg. M. Mandate, Appx. 3 ; 310, followed in Lythgoe v. Vernon, 1860, Normand v. Macartney, 1823, 2 S. 452 ; 5 H. & N. 182 ; Comwal v. Wilson, 1750, Armstrong's Ass. v. Leith Banking Co., 1 Ves. 510 ; Wilson v. Poulter, 1724, 1831, 9 S. 839 ; c/. Chanter & Co. x/. Borth- 2 Stra. 859 ; and observations at 36 Ch D wick, 1848, 10 D. 1544. 499. 23" Glassford v. Brown, 1830, 9 S. 245 Holt v. Brien, 1821, 4 B. & Aid. 252 105. (wife's prepositura). HOMOLOGATION 169 it cannot be retracted without the consent of all who are entitled to found on it.^*^ In questions between agent and principal the general rule appUes As between that ratification throws back and simulates antecedent authority ; ^*' prScipai. and the agent is not exposed to an action of damages for exceeding his mandate, or, as a rule, to hability to the person with whom he contracts. ^*^ Otherwise, he would be, not agent, but ' a sort of intermediate con- ' tractor.' ^*^ This holds, both in contract, whether there has been no anterior agency ^^^ or the agent has overstepped his instructions,^^^ and also in regard to wrongs. In the latter case the agent goes free if the principal was entitled to do the act complained of himself, ^^^ while both may be hable to third parties if he was not so entitled. ^^^ A claim for commission or a quantum -meruit may also be set up by ratification ; ^^* and also a claim for indemnification of expenses properly incurred.^^^ In questions between a principal and third parties the same doctrine As between of retroaction apphes-.^^^ But retroaction is not of universal appUcation third'parties. and fails where some right has already vested in a third party in the interval. Even the decision of the King in Council cannot divest a right. 2^^ As has been shown already, the ratification then comes too late, as where a tenant is entitled to sit on in default of a previously authorised notice to quit ; ^^^ or a party to a bill escapes Hability if notice of dishonour is given by a volunteer, afterwards recognised as authorised to act ; or an option is limited in time and the period has elapsed before ratification takes place. ^^' That a ratification of a marine poUcy entered iuto by an agent lacking authority at its date may be effective after a loss has occurred arises from the rule that the premium is assumed to have been paid at the said date, and that therefore the principal had a continuing option ; ^^° even though this be contrary to the general rule that there can only be ratification when the principal could himself make the same contract as that ratified. ^^^ It has been held that if A offers to buy a share from B, who is C's agent but without authority 2" Smith V. Cologan, 1788, 2 T.R. 189; p. 799 ; Smith c. Taylor, 1882, 10 R. 291 ; swpra, "9. Crawford v. Dunlop, 1900, 2 F. 987. ^" Wilson V. Poulter, '"" ; Wilson v. Turn- ^^* Keay v. Fenwiok, supra, 2" ; Mason man, "^ ; Hovil v. Pack ; Frixione v. Taglia- v. Clifton, 1863, 3 F. & F. 899. ferro ; Ramazotti v. Bowring, '*^ ; Bristow ^'^^ Bristow v. Whitmore, supra, "^ ; ■0. Whitmore, supra, ^"■. Frixione v. Tagliaferro, supra, ^*^ ; Hall v. 2" Spittle V. Lavender, 1821, 2 Brod. & Laver, 1842, 1 Hare 571. B 452 129 E R 1041 "'" Smith v. Baker, 1873, L.R. 8 C.P. 350. "» Risbourg 'v. Bruckner, 1858, 3 C.B. ,rJi°''n^I "^ ^°P*'^"' ^^°^' ^ ^^'"'*- ^' N.S. 812, 823. . L^f 1, 258 Supra, p. 17. "° Spittle, supra. ,,, g^^^^ p 1^4 "1 Clarke v. Perrier, 1679, 2 Freem. 48 aso p. igs- Hagedom; Ronth, supra,'^^^ ; (taking interest on bond) ; Comwal v. (^^^ „_ Patton, 1874, 9 Q.B. 577 ; Williams Wilson, 2" ; Smith v. Cologan, supra, ==« ; „ -^^ china Ins. Co., 1876, 1 C.P.D. 757. Brice v. Wilson, 1838, 8 A. & E. 349. aei x C.P.D. at p. 764. The anomaly 252 Whitehead v. Taylor, 1839, 10 A. & is not extended to fire or life insurance — E. 210 ; HuU v. PickersgiU, supra, i". Grover & Grover v. Mathews, [1910] 2 "3 Bird V. Brown, supra, "^ at 4 Exoh. K.B. 401. 170 HOMOLOGATION. As between agent and tMid party. to sell, and B agrees, A cannot withdraw Ms offer in face of C's subsequent ratification ; ^^^ but the decision has been gravely questioned.^*^ The relation between an unauthorised agent and a party dealing with him is part of the general law of contract and wrong.^** The only rule here relevant is that an agent professing to act as such is barred from denying that he has authority so to act — he is said to warrant his authority — and makes himself personally hable to persons with whom he contracts, if agency never existed or if it has come to an end. This doctrine is known on both sides of the Tweed as the rule in Gollen v. Wright ; ^*^ and it has been confijmed, after undergoing much discussion, by the House of Lords.^*^ It proceeds on the footing that the agent could not be sued on the contract as principal (as he might have been if he had not stated himseK to be an agent, or had not named his prin- cipal, or had really no principal who could effectively contract).^*' The rule as laid down by Willes J. for the Exchequer Chamber is thus stated : ' A person who induces another to contract with him as the agent of a third party by an unquahfied assertion of his being author- ised to act as such agent, is answerable to the person who so contracts for any damages which he may sustain by reason of the assertion of the authority being untrue. This is not the case of a bare misstate- ment by a person not bound by any duty to give information. The fact that the professed agent honestly thinks that he has authority affects the moral character of his act ; but his moral innocence, so far as the person whom he has induced to contract is concerned, in no way aids such person or alleviates the inconvenience and damage which he sustains. The obhgation arising in such a case is well expressed by saying that a person, professing to contract as agent for another, imphedly, if not expressly, undertakes to or promises the person who enters into such contract upon the faith of the professed agent being duly authorised, that the authority which he professes to have does in point of fact exist. . . . The contract would be binding upon the person deahng, if the alleged principal were to ratify the act of the latter.' ^'* This is the ratio underlying most of the cases and justifies their treatment in this place, rather than under the law of holding out or of misrepresentation. The gist of the decisions is summed up by Buckley L.J. thus : ' The Hability of the person who professes to act as 114 (bm of exchange) ; Lewis v. Nicholson, 1852, 18 Q.B. 503 ; Jones v. Downman, 1842, 4 Q.B. 235 note ; EandeU v. Trimen, infra, ^'°. 2«= Starkey v. Bank of England, [1903] A.C. 114, affg. OKver, [1901] 1 Ch. 652, [1902] 1 Ch. 610. ^'" lUustrated from charter-party; Jenkins v. Hutchinson, 1849, 13 Q.B. 744 ; Lilly, Wilson & Co. v. Smales, Eeles & Co., [1892] 1 Q.B. 456. 288 8 E. & B. 657-8. ro, p. 163 ; Bolton Partners v. Lambert, 1889, 41 Ch. D. 295 ; cf. Licences etc. Fund v. Shearer, 1907 S.C. 10, per L. Pearson. 263 'Pry, SpecifiG Performance, 3rd ed., Appx. A ; Fleming v. Bank of New Zealand, [1900] A.C. at p. 587. 2** See supra, pp. 157 seq. 2«= 1857, 8 E. & B. 647. It is traced to Story, Agency, s. 264 ; it is mooted in Jenkins v. Hutchinson, 1849, 13 Q.B. at p. 752 ; Polhill v. Walter, 1832, 3 B. & Ad. HOMOLOGATION 171 ' agent arises (a) if he has been fraudulent,^^* (6) if he has without fraud ' represented that he had authority when he had not, and (c) also where ' he innocently represents that he has authority, where the fact is either ' (1) that he never had authority, or (2) that his original authority has ' ceased by reason of facts of which he has not knowledge or means of ' knowledge. Such last-mentioned HabOity arises from the fact that by ' professing to act as agent he impliedly contracts that he has authority, ' and it is immaterial whether he knew of the defect of his authority ' or not.' ^"' This doctrine is reaUy one illustration of a wider principle that ' when an act is done by one person at the request of another, which ' act is not in itself manifestly tortious to the knowledge of the person ' doing it, and such act turns out to be injurious to the rights of a third ' party, the person doing it is entitled to an indemnity from him who ■ requested that it should be done.' ^'^ These dicta carefully avoid the Warranty ? use of the word ' warranty,' and in so doing concur with the careful language of the Sale of Goods Code, where it treats of an implied condition that the seller has the right to sell, and that in certain cases the goods are reasonably fit for their purpose or are of merchantable quaUty.^'^ But in many other cases the term ' implied warranty of authority ' is used, in spite of the better user, which confines a warranty to that which is precisely (though perhaps orally) formulated, while here the under- taking is usually proveable by conduct only. The doctrine was in Scotland accepted in the case of Anderson v. in Scotland. John Croall & Sons.^''^ After a selling plate had been run, a mare which had not won was brought into the ring by one who had no power to sell, and was by the auctioneer in good faith and without negligence knocked down to a purchaser. The owner repudiated the sale, and the auctioneer was mulcted in damages to the purchaser, substantially on the ground that the auctioneer, as the seller's unauthorised but professed agent, feU under the rule above indicated, which is an exception to the general principle that an action of damages will not lie against a person who honestly makes a misrepresentation which misleads another.^'* These rules have been applied in many diverse forms of business : Examples. ^^' In which case the injured party may (2). But even there the nomenclature is sue either on contract or on wrong — not unwavering. BandeU v. Trimen, 1856, 18 C.B. at p. 794. "' 1903, 6 F. 153. An earlier and curious 2'" Yonge V. Toynbee, [1910] 1 K.B. 215 example is Malcolm v. Lothian By. Co., at p. 217. 1835, 13 S. 887, where the unauthorised 2'i Propounded by counsel in Dugdale agent made himseU Hable for the liabilities V. Levering, 1875, L.K. 10 C.P. 196 ; of a shareholder without being one. adopted by L. Halsbury in Sheffield Corp. ="* Per L. Ord. quoting Lord Lindley in V. Barclay, [1905] A.C. 392, and approved Firbank's Exrs. v. Humphreys, 1886, 18 by Vaughan WilHams L.J. in Bank of Q.B.D. at p. 62. See also In re National England v. Cutler, [1908] 2 K.B. 209, 220, Coffee Palace Co., 1883, 24 Ch. D. 367 : where a broker honestly issued to the Bank The professed agent ' affirms that the fact of England a ' ticket ' to a personator, in ' exists and promises that if the fact does order to the registration of a, forged ' not exist the other party shall be put transfer. ' in as good a position as if it did exist ' — "2 56 & 57 Vict. i;. 71, ss. 12 (1), 14 (1) per Bowen L.J. at p. 374. 172 HOMOLOGATION to an auctioneer innocently acting without the seller's authority ; ^'^ to a person acting for a non-existing company or club or for an unincor- porated society ; ^''^ to a broker purporting to act for one party to a transaction or for both parties ; 2" to one expressly as agent for a named principal purporting to let property for years ; ^'^ to an architect ordering stone ; ^'* to directors (who are agents) by their representing to a bank or other lender that their manager was empowered to draw cheques when they knew their account was overdrawn,^*" but not merely by their continuing to draw on an overdrawn account,^*^ nor by their trusting a fraudulent secretary, he being equally with them agent for the company. ^^^ On the other hand, directors have been made personally Uable for over-issuing debentures,^*^ though they were not aware that the issue was exhausted. 2^* ' The principle ' of Collen V. Wright extends further than the case of one pSrson inducing ' another to enter into a contract.^*^ The rule to be deduced is that ' where a person by asserting that he has the authority of the principal ' induces another person to enter into any transaction 'which he would ' not have entered into but for that assertion and the assertion turns ' out to be untrue to the injury of the person to whom it is made, it ' must be taken that the person making it undertook that it was true, ' and he is Uable personally for the damage that has occurred.' ^^^ Other examples may be cited : a manager of a side railway who employs a ■ surgeon in an accident case ; ^^' one who bond fide but without the owner's authority lets out property,^^^ or renews a lease,^^* or being a "^ Anderson v. John Croall & Sons, see Lakeman v. Mountstephen, 1874, L.R. supra, ^". Secus, if he has authority, but 7 H.L. 17, 25. makes a mistake, corrected at once, e.g. 2"- Beattie v. L. Ebury, 1874, L.R. 7 as to a reserved or upset price — Rainbow v. H.L. 102 ; said to be special. Howkins, [1904] 2 K.B. 322 ; M'Manus v. ^'^ Smith v. Reed, 1886, 2 T.L.R. 442 ; Fortescue, [1907] 2KB. 1. contrast Chapleo v. Brunswick Building 2^6 Supra, p. 161. Soc, 1881, 6 Q.B.D. 696, esp. p. 717, where 2" Hughes V. Graeme, 1894, 33 L.J. Q.B. the directors gave a, fraudulent secretary 335 ; see esp. the dicta of Crompton J. express power to borrow. at p. 338 and of Blackburn J. at p. 339 : ^'^ Smith v. Reed, supra ; Whitehaven ' Where a person makes a bargain professing Bank v. Reed, 1886, 2 T.L.R. 353 ; Weeks ' to have authority from another to bind v. Propert, 1873, L.R. 8 C.P. 427, 437. ' that principal, he impliedly warrants he ^84 Krbank's Exrs. v. Humphreys, 1886, ' has got the authority, unless there has 18 Q.B.D. 54. In Elkington & Co. v. ' been something in the transaction to rebut Hurter, 1892, 2 Ch. 452, there were de- ' that implication.' An auctioneer is agent bentures available, for both seller and buyer — Kenworthy 0. ^ss gee Starkey, infra, '^^^. Schoiield, 1824, 2 E. & C. 945, 947, and ^so Firbank's Exrs., supra, at p. 60, cases there ; Queensland Investment Co. per L. Esher M.R. ; adopted by Swinfen V. O'Connell, 1896, 12 T.L.R. 502 (one Eady J. in Yonge v. Toynbee, [1910] 1 party under age). K.B. at p. 231, and by Eve J. in Fempe v. "8 Collen V. Wright, supra, "*. Gorlitz, [1915] 1 Ch. at p. 181. 2'» Randell v. Trimen, 1856, 18 C.B. 2S7 Robson v. TumbuU, 1858, 1 F. & E. 786. 365. 28" Cherry v. Colonial Bank of Austral- ^88 p^.^ „_ Davis, 1861, IB. & S. asia, 1869, L.R. 3 B.C. 24, explained in 220. Beattie, 2", at p. Ill; Richardson v. 2*° Spedding «. Nevell, 1869, L.R. 4 C.P. Williamson, 1871, L.R. 6 Q.B. 2*76 ; and 212, 223. homologatTcon 173 tenant sublets to one who will not quit ; ^^^ a broker who puts his employer on the register of a company other than the employer intended ; ^^^ an agent who changes the destination of a ship ; ^'^ or a stockbroker who innocently acts for a personator and forger in transferring stock. ^^* But if all the facts are known to the party dealing with the agent, Facts known, either through the facts being open to both,^^* or through the possible defect of authority being communicated, ^'' there is no promise or re- presentation and the rule in Collen v. Wright does not hold. Moreover, if the agent be merely a messenger — a telegraph company for example — the rule is inapphcable.^*^ The mistake must be of fact, not of law.^" Again, ' no action lies against a pubhc servant upon any contract which ' he makes in that capacity.' ^^^ And lastly, the principle does not apply where the controversy is between the principal and agent and not between them and a third party.^^* The case of a soUcitor appearing in a Utigation is pecuhar in respect Solicitors. that he has a duty not only to his chent but to the other parties and to the Court, and that the Court has a wide discretion in the matter of expenses or costs. But the same principle obtains. His honest behef that he had authority is no defence. There are many Scots illustrations.^"" And there seems to be no reason to doubt that he may not only be mulcted in expenses of the action, in which the objection of want of mandate is upheld, but also, in an appropriate suit, for any other damages resulting therefrom.^"^ In England the doctrine is profusely illustrated, as where one purported to act in a suit for a non-existent person or company ^"' Henderson v. Squire, 1868, L.E. service) ; Eaglesfield v. L. Londonderry, 4 Q.B. 170. 1876, 38 L.T. 303 (common mistake ; ^" National Coffee Palace Co., 1883, ranking of preference stock). 24 Ch. D. 367 (damages where the name was "^^ Dunn u.Macdonald, [1897] 1 Q.B. 555. taken off the register). ^°' Salvesen & Co. v. Bederi Aktie- 292 Brewn v. Law, 1895, 72 L.T. 779. bolaget Nordstjernen, [1905] A.C. 302, 293 Starkey v. Bank of England, [1903] 7 F. H.L. 101, alt. 6 F. 64 (mistaken A.C. 114 ; Bank of England v. Cutler, notice of affreightment). [1908] 2 K.B. 208. Gf. Sheffield Corp. v. '"° Imphed in Noble v. Inverness Mags., Barclay, [1905] A.C. 392. 1825, 3 S. 516. Decided in Cowan v. ^s* Smout V. Ilbery, 1842, 10 M. & W. 1. Famie, 1830, 14 S. 634 (where see the class The result seems right, but certain dicta of expenses for which he was liable). In which desiderate fault are overruled by Robertson v. Ross, 1873, 11 M. 910, the the later cases — Collen, ^'^ ; Halbot, infra ; solicitor's conduct was leniently described cf. Schjott V. Schjott, 1881, 45 L.T. as rash. If, in Miller v. Rae, 1834, 13 S. 333. 699, the verdict went in favour of the 295 Halbot V. Lens, [1901] 1 Ch. 344 ; and solicitor on the ground of his bcma fides : contrast Lilly v. Smales, [1892] 1 Q.B. 456, it ought to have been questioned. Baillie with Suart v. Haigh, 1893, 9 T.L.R. 488. v. Abercromby, 1796, Hume 492 (authority And see Beattie, supra, ""■. from wife of absconder only) ; Kyd v. 29« Dickson v. Reuters, 1877, 3 C.P.D. 1. Fergusson, 1826, 4 S. 549 (alleged verbal 29' Rashdall v. Ford, 1866, L.R. 2 Eq. mandate from an absentee). See also 750 (Lloyd's bonds; common mistake); Phihp v. Gordon, 1848, 11 D. 175; M'Call Beattie, 28i (shares not paid up, as v. Sharp, 1862, 24 D. 393 (acting for, security) ; Saffron Walden Soc. v. Rayner, imbecile) ; Ferguson, Davidson & Co. v. 1880, 24 Ch. D. 406 (common mistake, Paterson & Dobbie, 1898, 1 F. 227. as to solicitors being entitled to accept 201 jiiUer v. Rae, supra. 174 HOMOLOGATION Damages. and declined to reveal his true clients ; ^"^ or never had authority of anyone ; ^"^ or a company, his chent, has been dissolved ; ^"* or he has assumed to act for a minor, whose next friend was also in nonage,*"^ or for a cUent who has died or become insane,^"* provided at least the insanity is certified or otherwise notorious.^"^ It is the better opioion that these facts are decisive and that nothing turns on the question whether the solicitor was aware of them or was excusably ignorant of them.^"* Where an authority ' given [here for Utigation] to an agent has, without his knowledge, been determined by the death or lunacy .of the principal, and subsequently the agent has, in the belief that he was acting in pur- suance thereof, made a contract or transacted some business with another person, representing that in so doing he was acting on behalf of the principal, the agent is Uable, as having impHedly warranted the exist- ence of the authority, which he assumed to exercise, to that other person, in respect of damage occasioned to him by reason of the' non-existence of that authority.' ^"^ It is a stronger case against the solicitor, if without authority he has professed to act for one who has an interest adverse to that of his other chents.^^" The KabUity may extend so as to indemnify the alleged chent as well as the other parties to the futile suit, in the former case for the costs as between principal and agent, and in the other as between party and party.^'^^ But the soUcitor wiU have relief from anyone — such as a co-plaintiff — who has misled him.^^* He does not escape liability by giving notice of discontinuance of the action ; *i* and he may involve a partner who knows nothing of his misconduct.^^* It has been noted that sohcitors may be liable to opposing htigants in damages over and above expenses or costs. In other cases, as in these, the endeavour, in measuring damages, is to apply as nearly as possible the rule ^^^ in Hadley v. Baxendale,^^* viz. to award such damages as may '"^ Simmons v. Liberal Opinion, Ltd., [1911] 1 K.B. 966; Hoskins v. PhiUips, '1847, 16L.J. Q.B. 339. '»3 Hubbart v. PhiUips, 1845, 14 L.J. Ex. 103; NewbigginGasCo., '" ; Nurse, 'i^. Manby, ^'* ; Flicker, infra, '^"^ ; Pinner v. Knights, 1843, 6 Beav. 174 ; but he may show that his clients knew and lay by — M'Nally v. Knox, 1861, 5 L.T. 186. As to which, see an elaborate argument in In re Manby, infra, ^^. "" Salton, infra, »»». =»5 Femee v. Gorlitz, [1915] 1 Ch. 177 ; see also Geilinger v. Gibbs, [1897] 1 Ch. 479. 3»i= Yonge V. Toynbee, [1910] 1 K.B. 215. 3<" Armstrong & Sons, [1896] 1 Ch. 536. Yonge, Simmons, supra. (so interpreting CoUen v. Wright, and in this respect overruling Smout v. Ilbcry, 1842, 10 M. & W. 1) ; Salton v. New Beestou Cycle Co., [1900] 1 Ch. 43; Thomas V. Finlayson, 1871, 19 W.R. 255. And see Hammond v. Thorpe, 3 L.J. Ex. 358. '"^ Rubric to Yonge. See the Scots case, M'CaU V. Sharp, supra, '»". =" Tabbemor v. Tabbemor, 1836, 6 L.J. Ch. 19. "^ Hubbart, supra, ^'^ ; Newbiggin Gas Co. V. Armstrong, 1879, 13 Ch. D. 310; Fricker t. Van Grutten, [1896] 2 Ch. 649. '" Nurse v. Dumford, 1879, 13 Ch. D. 764. »" Gold Reefs v. Dawson, [1897] 1 Ch. 115. II* HaU V. Laver, 1842, 1 Hare 571 ; Re Manby, 1850, 26 L.J. Ch. 313. ^'^^ See Hammond & Co. v. Bussey, 1887, 20 Q.B.D. at pp. 90, 98. 3" 1851, 9 Ex. 341. The rule is also applied in cases of breach of duty by agents in q^uestions with their principals — Salvesen (/. Rederi Aktiebolaget Nordstjemen, supra. Cassaboglou v. Gibb, 1882, 11 Q.B.D. 797 ;■ Pape v. Westaoott, [1894] 1 Q.B. 272. HOMOLOGATION 175 fairly and reasonably be considered as arising naturally, i.e. according to the usual course of things, from breach of contract — called general damage — or such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract as the probable result of the breach of it — called special damage. They must not be too remote. ^^' Where there would have been locus pomitentia, even if there had been antecedent authority or subsequent ratification, no action hes.^'^* If the unauthorised agent borrows, the lender i? entitled to repayment from him with interest.^^® If he sells, the purchaser recovers from him the value of the thing futilely sold,^^" as well as any expense incurred in any Utigation undertaken on the faith of the authority having been vahdly given. ^^^ If he buys, he is Uable for the price or (if there be a market for the commodity) for the difference between that price and the amount obtained on resale undertaken to diminish the damages, ^^^ along with the expenses incurred in a similar Utigation. 32^ If he apphes for shares, he is Hable in a Uquidation, as if he were shareholder in place of his alleged principal.^^* ' The measure ' of damages is what the plaintiff actually lost by losing the particular ' contract which was to have been made by the alleged principal if the ' defendant had had the authority he professed to have ; in other words, ' what the plaintiff would have gained by the contract which the defendant ' warranted should be made.' ^^^ Partnership. — The relations of partners to persons dealing with them are succinctly, perspicuously, though not in due order, set forth in the Partnership Act 1890 — sometimes called the Partnership Code.^^^ So far as pertinent they may be summarised as follows : — (1) Each partner is agent for his firm. (2) Each firm (by its partners and agents) is agent for each partner. This involves that a partner may bind a partner. In both cases this may be so in carrying on the firm's business in the usual way ; and that by acts and instruments (ss. 5, 6) or by admissions or representations (s. 15) or by receiving notices, if in the last case the recipient is an active partner and not cheating the firm (s. 16). But this double agency is ousted, if the partner in question has no authority 8" This is worked out in detail regarding ^^^ CoUen, ^^^ ; Hughes, "'. an unauthorised sale of an estate, Godwin 322 Simons v. Patchett, 1857, 7 E. & B.^ V. Francis, 1870, L.R. 5 C.P. 295 (costs of 553 investigating the titles and of a futUe suit ,,,,.., J -1 22" Randell v. Tnmen, ^^^. against alleged prmoipal and commercial '-"" " ' loss, but not loss in vainly stockiag the 324 National Coffee Palace Co., supra, "*. estate) ;^^ and see Spedding v. Nevell, ^^^ ^^.^^ ^^^ ^^^^^ ^^ ^^ ^^ ^^ ^ '"^"'M'Manus v. Fortescue, "- Warr «. 371-2, citing ^Spedding, ''\ Godwin, ^^\ Jones, 1876, 24 W.R. 695 : Pow v. Davis, '^'^° bimons, . 1861, 1 B. & S. 220. ^^ 53 & 54 Vict. 0. 39, ss. 5-19. The '1" Richardson v. WilUamson, supra, 2^". Limited Partnership Act 1907 (7 Edw. VII. 320 Firbank's Exrs., ^'" ; Weeks, '^^ ; c. 24) has not caught on in oompetition- Whitehaven Bank, '^. with the private company. 176 HOMOLOGATION to bind the firm and partners (s. 5) or has only a restricted authority (s. 8) and the person dealing with him knows of these facts or does not know or believe that he is a partner. Moreover, if any wrongful act or omission by a partner causes loss to a third party (s. 10), or he mis- apphes the money or property of a third party received by him or by the firm, the firm is liable to make good the loss (s. 11). On the other hand, it is implied that what a partner does outside of the firm's business as usually conducted, does not affect the firm or the other partners ; and it is enacted that if he improperly employs property he holds in trust in the business or on the account of the firm, no other partner is Uable, unless the latter has notice of the breach of trust (s. 13).^^' Moreover, a new partner is not liable for the old debts of the firm ; and a retiring partner remains hable for past debts, imless there be agreement to the contrary between him, the new firm (or other partner), and the creditors, expressly or as inferable from a course of deahng (s. 17). The normal state of things thus briefiy described may be altered by acquiescence ^^* or by homologation. Knowledge. A double agency thus lying at the root of the relation of partners inter se, if it be alleged that a partner has acted beyond the scope of his mandate and that his conduct has been ratified by the other partners, knowledge of his actings must at the date of the alleged ratification be brought home to them. The ' notice ' that is assumed in the 16th section of the Partnership Code of course does not extend to such so- called frauds on the firm.^^' Otherwise a fraud begun by one as a clerk and continued after he became a partner would by the change be imputed to the other partners who had no knowledge of the fraud.^^" Cases of unauthorised actings which are capable of ratification are the granting of caution, or warranty ; ^^^ speculative transactions contrary to the articles of copartnery ; ^^^ the opening by a bank of a branch office ; ^^^ a sub- mission to arbitration, though the submitting partner might alone be Uable for the sum awarded therein ; ^^^ taking a lease ; ^^^ pledging a firm's ■credit for a partner's separate debt ^^^ incurred in a separate business.^^' It is only fair that these actings should be repudiated as soon as they are discovered, if delay would make the position of the other party worse. ^^* 3*' The trust money may be ' followed,' ^^^ Sandilanda v. Marsh, 1817, 2 B. & if still with the firm. Aid. 673, and illustration there. 328 Supra, pp. 98, 136. 332 Cragg v. Ford, 1842, 1 Y. & C.C.C. 280 329 Lacey v. Hill, 1876, 4 Ch. D. 537, (grumble but ho veto); aff. 3 Ap. Gas. 94; Marsh v. Joseph, 'ss Crellin v. Brook, 1845, 14 M. & W. [1897] 1 Ch. 213, 246 ; Hambro v. Bur- 11, 21. nand, [1903] 2 K.B. 399, 414 ; and see 334 Thomas v. Atherton, 1878, 10 Ch. D. Mara v. Browne, [1896] 1 Ch. 197; City 185. of Glasgow Bank v. Moore, 188L 19 335 sharp v. Milligan, 1856, 22 Beav. S.L.B. 86. 606. 331" Per Jessel M.R. in Williamson v. '36 ^^ ^ Bonbonus, 1803, 8 Ves. Jr. Barbour, 1877, 9 Ch. D. 529, 535-6. 540. Sembk the same if he became partner of '3' Bo'ness Canal v. M'Alpine, 1791 the party injured by his old master's Hume 751. dealings. 3S8 Bo'ness Canal, supra. HOMOLOGATION 177 The provision in the Partnership Code, section 17 (1), that ' a person New partner. ' who is admitted as a partner into an existing firm does not thereby ' become Uable to the creditors of the firm for anything done before he ' became . a partner ' proceeds on the ground estabUshed in England conclusively in the case of Keighley, Maxstead & Co.,^^* that a contract made by A cannot be ratified or adopted by B so as to make B able to sue or liable to be sued on it where A at the time he made it did not profess to be acting on behalf of a principal — A being here an individual or a firm and B an incoming partner. If one person buy goods and another is afterwards permitted to share in the adventure the seller cannot recover the price from the latter.^*" A trader, indebted by bond, takes in a nominal partner ; in two years the firm fails ; the partner is not liable for the bond unless there be something — very little will do, such as pay- ment of interest by both — to show that it had been taken over as a debt of the firm.^*^ It would be res inter alios acta. Even though an incoming partner makes himself liable inter socios for an old debt, it does not follow that he has made himself Uable to the creditor.^*^ To be so, it must be shown, expressly or by conduct, as in all cases of delegeubion (novation), that all three parties agreed. ^*^ And this may be gathered from deUvery of goods continuing after the change of firm,^** or from an undivided account being allowed to run on.^*^ In the application of the Partnership Code to Scotland it was decided to concur with the Enghsh view set forth in section 17 (1), which was in accordance with dicta in the case of Nelmes & Co. v. Montgomery & C'o.,^** where the claim was against A for the balance of the price of two billiard tables bought by B before he took A into partnership. It was not proved that the whole assets of B's business were taken over by the firm. But, assuming that they were. Lord Young put the opposite contention thus : that ' it is no matter how the debt arose so long as it is in connection ' with the business ; the new partner is to become hable for it, although ' he had nothing to do with the business when it was contracted. I must ' say I think there is no authority for that contention.' Certain contrary decisions and dicta may be explained as indicating — as in England — how readily, in this class of case only, delegation (novation) may be gathered from the bargaining and conduct of the parties.^*' Thus ''» Supra, p. 158, [1901] A.C. 240 ; and "» Contrast Ex p. Whitmore, 1838, 3 see Proudfoot v. Lindsay, 1825, 3 S. 443 ; Deac. 365, with British Homes Ass. Corp. Shirreff v. Wilks, 1800, 1 East 48. v. Paterson, [1902] 2 Ch. 404. 3" Young V. Hunter, 1812, 4 Taunt. 582. 344 Dyke v. Brewer, 1849, 2 C. & K. 828 ; '" Ex p. Jackson, 1790, 1 Ves. Jr. 131 ; cf. Muir v. Dickson, 1860, 22 D. 1070. ^ndseeBeale« Mouls 1847,10Q.B. 976; 345 gcott v. Beale, 1860, 9 Jur. N.S. Newton v. Belcher, 1848, 12 Q.B. 921 .(there was an alleged admission of liability, ' „ , ,, but it proceeded on error in law). And '" 1883, 10 R. 974. See also Mercer .. see Orr v. Chase, 1812, 1 Mer. 729. Neddie, 1832, 10 S. 405. 8*2 Vere v. Aahby, 1829, 10 B. & C. 288 ^" As in Pearston v. Wilson, 1856, 19 D. i British Mutual Banking Co. v. esp. pp. 14-17, explaining Attwood v. Chamwood Forest Co., 1887, 18 Q.B.D. SmaU, 6 CI. & F. 232 (aU facilities and aid 714. given and tested). 3,2 ^^^^^ Northwestern Co. v. Charlebois, . P- 146. [1899] A.C. 114. But there may be '*' Supra, p. 94. liability for damages, ibid. 3«" Ashbury Co. v. Riche, 1875, L.R. 7 3,3 pg„ jj^ t j ig O B D 71 H.L. 653 ; Wenlock v. River Dee Co., 1887, .X • •' 36 Ch. D. 674, 681, 686 ; Bonnington "«* Per Bowen L.J., ibid., 718. 180 HOMOLOGATION Chartered company. Internal management ; fundamental nullity. ' competent to authorise an actj cannot give it validity by ratify- ' ing it.' 365 At the outset a distinction has to be pointed out, which has been described as follows : 3«« ' In the case of a company created by charter ' the doctrine of ultra vires has no real appUcation in the absence of ' statutory restriction added to what is written in the charter. Such a ' company has the capacity of a natural person to acquire powers and ' rights. If by the terms of the charter it is prohibited from doing so, ' a violation of this prohibition is an act not beyond its capacity and is ' therefore not ultra vires,^^'' although such a violation 'may well give ' ground for proceedings ... for the forfeiture of the charter. In the ' case of a company, the legal existence of which is whoUy derived from ' the words of a statute, the company does not possess the general capacity ' of a natural person and the doctrine of ultra vires applies.' In the latter case, i.e. the case of a company incorporated by or under statute, it is settled that, ' with regard to the memorandum of association, if you ' find anything which goes beyond that memorandum or is not warranted ' by it, the question will arise whether that which is so done is uUra ' vires, not only of the directors of the company but of the company ' itself. With regard to the articles of association, if you find anything ' which, still keeping within the memorandum of association, is a ' violation of the articles of association, or in excess of them, the ' question wiU arise whether that is anything more than an act extra ' vires the directors but intra vires the company.' ^^s Jn the last class of case what might have been done by a resolution of the company could be ' sanctioned without the formahty of a resolution,' ^^^ that is, by the company's acquiescence or ratification. ' The memorandum of associa- ' tion is, as it were, the area beyond which the action of the company ' cannot go ; inside that area the shareholders may make such regulations ' for their own government as they think fit.' ^'^ A contract entered into ultra vires the company ' is exactly in the same condition as if no ' contract at aU had been made, and therefore a ratification of it is not ' possible.' ^'1 Difficulty may emerge on the question which of these degrees of 365 Irvine v. Union Bank of Australia, 1877, 2 Ap. Gas. at p. 374. For illustration from cases where a company has and has not power to issue Shares — Bank of Hindustan v. Alison, 1871, L.R. 6 C.P. 54, 222, and see the Chancery cases — L.R. 9 Ch. 1. Also other cases of amalgamation of companies — Hare ; Stace & Worth, 1869, L.R. 4 Ch. 503, 682 ; Challes, 1870, L.R. 6 Ch. 266. 366 pe^ vt. Haldane for P.C. Committee in Bonanza Creek Co. v. Rex, [1916] 1 A.C. at p. 583. See also per Swinfen Eady J. in British South Africa Co. v. De Beers Consolidated Mines, [1910] 1 Ch. at pp. 374-6, and authorities there. '" Outstanding instances in Scottish history are the British linen Company and the York Buildings Co. (3 Pat. 378, 579). 3" Per L. Ch. Cairns in Ashbury Co. V. Riche, L.R. 7 H.L. at p. 668. His Lordship at p. 674 cites the cases of Spackman ; Evans ; and Houldsworth, supra, p. 99, as examples of the last.' »«» L.R. 7 H.L. 675. "° Ibid., p. 671. "1 Ibid., p. 679, per L. Chelmsford. HOMOLOGATION 181 ultra vires ^'^ is present, and it usually turns on the point, whether the matter in hand, is one of internal management only, the non-observance of which can be cured by the acquiescence or ratification of the share- holders, or something more fundamental. Thus, where a private Act ratified a rearrangement of a company's stock subject to the agreement being adopted by a resolution passed in a prescribed mode, and that mode was not sufficiently followed, a period of four years of acquiescence by all parties to the agreement did not prevent the transaction being effectually impugned, for without the prescribed adoption the agreement was ultra vires of the company and incapable of being otherwise vali- dated.^'^ ' No doubt where some act, sucli as the granting of an obliga- ' tion in the course of its business, is put by the constitution of a company ' within its power, and certain formalities of administration are pre- ' scribed by the articles of association, which for domestic purposes ' regulate the duties of the directors to the shareholders, the mere failure ' to comply with a formality, such as a proper appointment or the presence ' of a quorum of directors, will not affect a person dealing with the com- ' pany from outside and without knowledge of the irregularity. He is ' presumed to know the constitution of the company, but not what may ' or may not have taken place within doors that are closed to him.^'* ' But the case stands quite otherwise when the act is one which has not, ' by the constitution of the corporation, been put within its power ex- ' cepting on the fulfilment of a condition. In that event the persons ' deahng with the corporation are bound to ascertain whether the con- ' dition has been fulfilled. The question which alternative apphes is ' of course one of construction of the statute authorising the act.' ^'^ In a Scots case ^'^ there had been a sale of shares — undoubtedly ultra in Scotland. vires of the company — ^to the company itself. It was reduced, and Lord Shand remarked : ^" ' The company can no more by adoption or homolo- ' gation make a proceeding of this kind legal than they can lawfully enter ' into the original transaction itself. It is a nuUity origiaally, and the ' company cannot homologate or adopt a nullity, for that is equally ' ultra vires.' And Lord President Inglis added, with regard to the lapse of time before action raised and the conduct of the company in deahng s'a See Thorbum v. Martin, 1853, 15 D. H.L. 869, 893, distinguishing between the 845 ; Gibson-Craig v. Aitken, 1848, 10 D. external position of a company as shown 576 ; Allan & jSon v. TumbuU, 1834, in its Memorandum and Articles and its 7 W. & S. 281, affg. 11 S. 487 ; West domestic management. See also Bigger- Cornwall Ry. Co. V. Mowatt, 1850, 15 Q.B. staff v. Rowatt's Wharf, [1896] 2 Ch. 93. 521 ; SeweU's case, 1868, L.B. 3 Ch. 131 »" [1917] A.C. at p. 616. Of. Irvine v. (over-issue of shares). Union Bank of Australia, 1877, 2 Ap. Cas. "' Pacific Coast Coal Mines V. Arbuthnot, 366 (ratification of the past and extension [1917] A.C. 607. Cf. as applied to a local of authority for the future distinguished). authority Islington "Vestry v. Homsey And contrast Phosphate of Lime Co. v. Urban C, [1900] 1 Ch. 695, 705. Green, 1871, L.R. 7 C.P. 43. 3'4 The ' classical ' authority in England "" General Property Investment Co. v. is L. Hatherley's judgment in Mahony v. Matheson's Trs., 1888, 16 B. 282. East Holyford Mining Co., 1875, L.R. 7 "' P. 291. 182 HOMOLOGATION Ashbury Co. v. niche ex- plained. Liability of directors. with the shares : "» 'I have never been able to understand how a ' statutory company can confirm a nullity, and if they could not by direct ' resolution confirm a nullity, I do not see how that can be done rebus ' et factis. Acquiescence is nothing at aU unless it amount to confirma- ' tion or be equivalent to confirmation, and if it be impossible for a ' statutory corporation to confirm a nulUty by direct resolution, it ' certainly cannot do so in any other way.' ^'^ Here, again, the distinc- tion between what is fundihts void and what is a stretch of a power conferred on a company, especially in a case with onerous bond fide transferees, is not easily drawn.^^" The doctrine in Ashbury Company v. Riche ^** must not be taken too strictly. This was laid down by Lord Watson in the following words : Whenever a corporation is created by Act of Parliament, with reference to the purposes of the Act and solely with a view to carry these pur- poses into execution, I am of opinion not only that the objects which the corporation may legitimately pursue must be ascertained from the Act itself, but that the powers which the corporation may lawfully use in furtherance of these objects must either be expressly conferred or derived by reasonable implication from its provisions.' ^^a ' Though it was not necessary for the decision in AsMmry Company v. Riche to do more than decide what the law was with regard to a company formed under the Companies Act of 1862, ... I think the law there laid down apphes to all companies created by any statute for a particular- purpose.' ^^^ But a shareholder in a limited company, who has, with full notice or knowledge of the facts, himself received part of the proceeds of an ultra vires act committed by the directors — such as payment of a dividend out of capital — and who still retains the money, cannot, either individu- ally or as suing on behalf of the general body of shareholders, maintain an action against these directors for repayment of the said dividend.^^* And this would be so, it is thought, even if he had repaid his share of it pendente processu. What, therefore, has now to be illustrated is not a contract which, 3" P. 294. '" It was not decided whether the vendor's representatives were liable for calls and entitled to past dividends. '8° See Webb v. Heme Bay Commis- sioners, 1870, L.E.. 5 Q.B. 642 ; Davies v. R. Bolton & Co., [1894] 3 Ch. 678 ; and infra, p. 184 ; Towers v. African Tug Co., [1904] 1 Oh. 558. The old oases, DelvaUe v. York Buildings Co., and York Buildings Co. V. Martin, 1786, 1791, M. 4978, 10466, are not instructive. '«! Supra, p. 179. 382 In Bs. Wenlock v. Dee River Co., 1885, 10 Ap. Cas. 354 at p. 362. Or fairly incidental — Att.-Gen. v. Great Eastern Ry. Co., 1880, 5 Ap. Cas. 473. ' Incidental ' or consequential ' — Att.-Gen. v. Mersey Ry. Co., [1907] A.C. 415. 3«3 Bs. Wenlock, mipra, ^^^, at p. 360, per L. Blackburn. L. Watson had applied the principle to a railway company, 5 Ap. Cas. at p. 486. See ako London C.C. v. Att.- Gen., [1902] A.C. 165. '** Towers v. African Tug Co., '»". What it he had repaid before action raised? c/. Flitcroft's case, 1882, 21 Ch. D. 519, 535. For a decision poiating to a relaxation of the liability of directors per- sonally for ultra vires , acts, see Loudon Financial Assn. v. Kelk, 1884, 26 Ch. D. 107, 145, 151. HOMOLOGATION 183 though all proper formalities had been observed, would not have been binding, but such a contract as would have been binding if formally entered into or if all the shareholders had originally agreed to it.^*^ There is then and then only room for homologation, ratification, or confirmation, and the question is really one of fact.^** An alteration of the articles for this purpose by special resolution is not requisite or even appropriate,^ 8' though express power for the future should be taken in that way.^^^ As in other cases of personal bar, knowledge of the contract must be Requisite proved or must be imputable to the alleged ratifier. In order to make '^°°^'® ^e. ratification of an act done without a person's authority binding ' it must be either with fuU knowledge of the character of the act to be adopted,^*' or with intention to adopt it at all events and under whatever circum- stances.' 8^" . . . If persons interested ' did not think proper to seek information, the fact that they did not choose to inquire is strong evidence that they were satisfied to adopt the acts of the directors at all events and under whatever circumstances, and to take the benefit of the arrangements made by them in any form they thought proper.' ^'^ This assumes that the shareholders have been duly notified of what has been done ; but it is not necessary to particularise the legal difficulty which they are asked in general meeting to surmount.*'^ Knowledge of the directors or of the company concerning what has been done by officials cannot be gathered from the mere fact that informa- tion was obtainable from the books of the company. A contract made without authority by a manager of a company ' no doubt could by a ' diligent examination of the books have been discovered, but the "* directors had no reason to imagine that the purchase had been made.' ^*^ A few examples of ratification by companies or by directors or trustees ■entitled to bind them may here be given. Where a manager for the manufacturing part of a business ordered goods, his authority was ratified by the use of them on the premises within the knowledge of the directors, and it was suggested that the same result would have followed even if the agency had been only ostensible — on the solenniter acta principle.*'* A contract, not entered into by the chairman and not in the mode set '*5 This last is illustrated in Imperial '*' Context shows that adoption is used Bank of China v. Bank of Hindustan, as equivalent to satisfaction, and see the , L.R. 6 Eq. 91 ; Phoenix Life Ass. Co., report, p. 58. 1862, 2 J. & H. 441 ; Era Ass. Co., 1862, 2^" Per WilUs J. in Phosphate of Lime 1 H. & M. 672. Co. V. Green, 1871, 7 C.P. 43 at pp. 56-7. 38« Further on ultra vires acts g,nd acts "'^ Per emidem, p. 58. intra vires though irregular is set out in ^'^ Grant v. U.K. Switchback Ry. Co., Lindley, Companies, bk. ii. ch. ii. s. 2 ; 1888, 40 Ch. D. 135 ; Heiton v. Waverley ^nd on regulations which are imperative Hydropathic Co., 1877, 4 R. 830, per or directory, ibid., ». 3. As to promoters, L.P. Inglis and L. Shand. ■supra, p. 160. "^ Cartmell's case, 1874, L.R. 9 Ch. at '8' Grant v. U.K. Switchback Ry. Co., p. 693, per Hellish L.J. ; and see In re 1888, 40 Ch. D. 135. Coasters, [1911] 1 Ch. 86. 388 Irvine v. Union Bank of Australia, ^^ Smith v. Hull Glass Co., 1849, 8 C.B. 1877, 2 Ap. Cas. 366. 668, 11 C.B. 897, 926, 928. 184 HOMOLOGATION out in a company's constitution, was clinched by being recognised in subsequent correspondence, by work done in pursuance of it, and by payments in respect of it being passed in the company's accounts.^'^ This was also so, where necessary repairs were ordered by the secretary of a benefit society, and they were carried out withiu the knowledge of the trustees.396 A compHcated bargain for the sale of land by a railway company, entered into by its agent, was held binding on it by work being done and corporeal possession taken on the faith of it.^" Knowledge of In these cases the contracts were within the powers of the directors company. ^^ trustees to make,^^* and their kuQwledge and homologation were sufficient. Where that is not so, the company will be barred from taking objection by its own knowledge and actings only,^'^ subject to what has been said above on the principle of sibi imputet. If there be no such knowledge, a contract entered into by a director ultra vires, though sealed as a company contract, wiU not be binding at the instance of the other party or even of his onerous transferee without notice,*"" particularly if the latter is cognisant of the fraud.*"^ But the knowledge of the body of shareholders may be easily assumed — for example, if the act in question is sufficiently revealed in successive balance-sheets prepared for general meetings,*"^ or expressly mentioned in a report by the directors.*"^ Share A certificate of shares or stock ' is merely a solemn affirmation under ' the seal of the company that a certain amount of shares or stock stands ' in the name of the iadividual mentioned in the certificate.' *"* ' A ' certificate under the common seal of the company, specifying any ' shares or stock held by any member, shall be prima facie evidence of ' the title of the member to the shares or stock.' *"^ In a Scottish case where a certificate for fully-paid shares, which was lying with the company ready for issue, was by mistake of a clerk and with the subsequent con- nivance of the secretary issued to a shareholder who had only paid up an instalment, and by him used as a security, and where the company (quite properly) refused to register the creditor's name and was compelled ^°° Eeuter v. Electric Telegraph Co., *°i Athenseum Life Ass. Co. v. Pooley, 1856, 6 E. & B. 341. 1858, 3 De 6. & J. 294. See also Hercules ss" AUard v. Bourne, 1863, 15 C.B. N.S. Ins. Co., 1874, 19 Eq. 302 ; Romford 468. CanalCo., 1883, 24 0h. D. 92; and contrast 38' Wilson V. W. Hartlepool Ry. Co., Agar v. Athenaeum Ass. Co., 1858, 3 C.B. 1864, 2 De G. J. & S. 495. This was rei N.S. 725 (fraud not aUeged). itUerventus and specific performance was ^"^ Lane's case, 1863, 1 De G. J. & S. enforced. 504. ''' See as to debentures irregularly ^"^ Hulett's case, 1862, 2 J. & H. issued ; their being good as agreements ; 306. and the rule as to ' domestic management ' *»* Per L. Ch. Cairns in Shropshire — In re Fireproof Doors, [1916] 2 Ch. 142. Union Railway and Canal Co. v. The Queen, =99 See the cases of the Chippenham 1875, L.R. 7 H.L. 496 at p. 509. Agreement in L.R. 3 H.L. 171, 249, 263 ; ^"^ Companies Act 1908, s. 23 (Act and Brotherhood's case, 8 Jur. N.8. 926. 1862, s. 21). Therefore proof was allowed 400 As to his position, see Webb and without a reduction in Woodhouse v. other cases, supra, '»». Hosack, 1894, 2 S.L.T. 279. HOMOLOGATION 185 to pay to the creditor tlie market value of fully-paid shares as at the date when his demand for registration was made, Lord Kyllachy thus described the general law on this matter of estoppel or bar : The certificate ' imphed, if it did not express, a contract as between the company and ' the person to whom the certificate was issued that the company should ' recognise the latter as a shareholder to the extent set forth in the ' certificate, or otherwise should make good to him the pecuniary value ' of that position. In short, as between the company and the recipient ' of the certificate in regular course, it seems not doubtful that the com- ' pany imphedly warrants the facts set forth in the certificate.' With regard to a bond fide onerous transferee from the recipient, his Lordship adds (after stating his own doubts whether he ought to be in safety to rely on what the statute calls only prima facie evidence) : ' It appears, however, to be settled by a long course of decisions in England, and, as I see no reason to doubt, on sound views of commercial expediency, that a certificate of shares, once regularly issued, is a document binding the company to make good its representation to any bond fide transferee for value into whose hands it (the certificate) comes. The way it is expressed is that the company is " estopped" in a question with such transferee from disputing the truth of the certificate, and the transla- tion of that seems to be that the company is held to warrant the truth of the statements which the certificate makes and so to be made liable ex contractu in specific performance if that is possible, or in pecuniary reparation if that is impossible.*"^ . . . Although of course a certificate of shares is not properly a negotiable instrument, nor in a proper sense a document of title, it is yet, as we have seen, substantially in the same position, so far as regards what in this question is the essential matter, ■ viz. the company's inability to plead against a bond fide transferee for ' value that he has no better title than his transferor.' *"' So where memorandum, articles, and certificates fraudulently bore that of each £105 share £100 had been paid up, and a transferee from an original shareholder had bought in reliance on these documents and without any want of care, he was bound to pay the liquidator of the company only his portion of the £5 per share, and it was not enough for the latter to allege that the shareholder knew or ought to have known that the company was a bubble.*"^ The statement in the above opinion that a company is held to warrant Bar and the truth of the certificates it issues, as if a warranty were equivalent ^*"*" to bar or estoppel, can scarcely be defended ; and the grounds for dis- tinguishing these pleas and preferring the latter are set out by Bowen L.J. in the following remarks regarding the position of a bond fide onerous *°* To issue a certificate and register Jardine & Co., 1891, 18 R. 652 at pp. the creditor would have been ultra vires of 656-8. the company. *"* Waterhouse v. Jamieson, 1870, L.R. 2 Sc. Ap. 29, 8 M. H.L. 88. See as to *"' Clavering, Son & Co. v. Goodwine, imputable knowledge, Index, sub voce. 186 HOMOLOGATION Not negotiable. Balkis case. transferee of shares originally issued by fraud : *»» ' If the transferee had a right of action upon the certificate, it could only be because it was an implied warranty between the company and him upon which an action could be brought. There was no privity at all between the company and the transferee. Neither was there any imphed warranty. ... No cause of action arises upon an estoppel itself. The Court must therefore look for the cause of action elsewhere, upon the as- sumption that the company cannot dispute the facts stated in the certificate. There must be a refusal by the company to do what it was bound to do or a refusal by an officer of the company to do what that officer was bound to do.' Consequently the tempus inspiciendum in assessing damages was, not the date of the transfer but, the date of the company's refusal to register the transferee. It was also held that the directors of a company are entitled to a reasonable time for the consideration of every transfer before they register it.^i" Again, a certificate is not a negotiable instrument Kke a bill of exchange or promissory note or hke a bearer bond.*^^ Thus there is nothing to preclude a company or its hquidator from pleading and proving the truth regarding a certificate in a question with one who, as can be shown, was aware of the actual facts,*i^ or but for his own gross negligence must have known them.*i^ It may be gravely doubted whether a share- holder who knows the real facts can take advantage of the circumstance that he has sold to a bond fide transferee without notice and repurchased from him.*^* The import of the earlier Enghsh cases was summarised in an authoritative decision by Lord Chancellor Herschell in 1893.*^^ ' It was held in In re Bahia and San Francisco Railway Company *^* that such an estoppel [in respect of refusing to register a purchaser of shares] might arise where a certificate was issued stating that the person named in it was the registered holder of certain shares in the company. The persons named in the certificate of the Bahia and San. Francisco Railway Company having sold to a purchaser who was registered as holder, his name was afterwards removed on its being discovered that the transfer ■"" In In re Otto's' Kopje Diamond Mines, [1893] 1 Ch. 618 at p. 628, referring to In re Bahia and San Francisco Ry. Co., 1868, L.R. 3 Q.B. 584. See also Longman V. Bath Electric Tramways, [1905] 1 Ch. 646, 665. *i° As to this last, see In re Cawley & Co., 1889, 42 Ch. D. 209 ; and Sooiete G^n^rale de Paris v. Walker, 1885, 11 Ap. Gas. 20, per L. Blackburn, at p. 41. "^ Longman, supra. "2 Barrow's case, 1879, 14 Ch. D. 432, as to the shares which both allottee and his transferee knew not to be fully paid ; In re London CeUuloid Co., 1888, 39 Ch. D. 190; Markham & Darter's case, [1899] 1 Ch. 414, 430. "3 Hall & Co., 1887, 37 Ch. D. 712. • *i* Barrow's case as to the other shares, followed in Ex parte Sandys, 1889, 42 Ch. D. 98, 110 ; but see London CeUuloid Co., supra, at p. 197 ; and Simm v. Anglo- American Telegraph Co., 1879, 5 Q.B.D. 188, 216. "^ Balkia Consolidated Co. v. Tomkin- son, [1893] A.C. 396 at p. 403. See also Webb V. Heme Bay Commra., 1870, L.R. 5 Q.B. 642 ; In re Romford Canal Co., 1883, 24 Ch. D. 85 ; Johnston v. Renton, 1870, L.R. 9 Eq. 181. "8 1868, L.R. 3 Q.B. 584. HOMOLOGATION 187 to the persons named in the certificate was a forgery. The Court held that the giving of the certificate amounted to a statement by the com- pany, intended by them to be acted upon by the purchasers of shares ia the market, that the persons certified as the holders were entitled to the shares ; and that the purchasers having acted on that statement by the company, they [the company] were estopped from denying its truth and Hable to pay as damages the value of the shares. Blackburn J. in the course of his judgment remarked *i' that when joint-stock companies were established it was a great object that the shares should be capable of being easily transferred ; that the legislature had ac- cordingly provided for the keeping of a regis.ter of the members, in order to keep which the company must alter the register whenever there was a transfer of its shares ; and the learned judge drew attention to section 31 of the Companies Act 1862,*i8 which provides that a company may give certificates *i' and that these shall be prima facie evidence of the title of. the person named to the shares specified, and pointed out that by granting the certificate the company make a statement that they have transferred the shares specified to the person named in it, and that he is the holder of the shares ; that if the company have been deceived and the statement is not true, they may not be guilty of negligence, but they and no one else had power to inquire into the matter. The learned judge expressed the opinion that it was the intention of the legislature that these certificates should be docu- ments on which buyers might safely act, and continued thus : " It is " quite clear that a statement of a fact was made by the company on " which the company, at the very least, knew that persons wanting " to purchase shares might act. And the claimants having bond fide " acted upon that statement and suffered damage, can they recover " from the company ? I think they can on the principle enunciated " in Freeman v. Cooke." ^^^ The decision in the Bahia and San Fran- cisco Railway case was followed under somewhat different circum- stances by the Court of Exchequer in Hart v. Frontino and Bolivia South American Gold Mining Company. ^''■^ The plaintiff in that action bought and paid for shares in the defendant company and received duly executed transfers and share certificates, which certified that the person named in the register of shareholders was the proprietor of five shares numbered, etc. The seller of the shares, being afterwards compelled to pay a call upon them, demanded repayment from the plaintiff, who required to have the transfer completed by registration. His name was accordingly entered on the register, and he received from the company a certificate that he was the proprietor of the shares. "' In Bahia at p. 595. by aid of the Balkis case from the view of *" Now Act 1908, s. 23. Bramwell B. in Simm, "«, "«. ' ""But not solely for the company;s own „„ ^ Ex. 654. Here, supra, p. 2. benefit — per Parwell J. m Uixon v. Kenna- i- > j. •way & Co., [1900] 1 Ch. at p. 841, differing "i 1870, L.R. 5 Ex. 111. 188 HOMOLOGATION Do. Do. ' On the faith of this certificate he repaid the seller the amount of the ' call. The company having discovered that the shares had been sold ' by a previous owner by a duly executed transfer to another person, ' removed the plaintiff's name from the register and inserted the name ' of that person. It was held that by the registration of the plaintiff ' and the dehvery to him of the certificate, followed by the payment ' by him of the call, the defendants were estopped from denying his ' title to the shares and were liable to pay for their value.' After approving the Bahia case, and in particular the reasoning of Justice (afterwards Lord) Blackburn, the Lord Chancellor proceeded to deal with the case of Simm v. Anglo-American Telegraph Company : *^^ In that case Burge, who was the buyer of stock in the defendant com- pany, received in pursuance of his purchase a transfer of the stock purporting to be executed by Coates, who was the registered owner of stock to the amount purchased. The transfer was in fact forged by a clerk in Coates's employ. Burge having . borrowed money from a bank, the stock was transferred to Ingelow as trustee for the bank, and the company registered Ingelow as the owner, and issued a certificate accordingly. The advance having been repaid by Burge, the bank's trustee became trustee for him. The company having discovered the forgery, and refused to recognise Ingelow as the owner of the shares, an action was brought by Burge and Ingelow to compel the company to recognise their title. It was held by the Court of Appeal that they had no title by estoppel against the company. The grounds for the decision appear to have been twofold : in the first place, that Burge had not altered his position by reason of the statement in the certificate ; in the next place, that he had himseK by producing to them a forged transfer induced the company to insert the name of his nominee as the proprietor of the stock.' *^^ In the case cited *2* neither of these grounds was present. It is thus rubricked : P., the owner of numbered shares in a joint-stock com- pany, transferred them to persons who were registered in the company's books as proprietors of the shares. P. afterwards fraudulently executed a transfer of the shares for value to T., who sent the transfer to the com- pany and received from them a certificate under their common seal stating that he was the proprietor of the shares. T. acting bond fide on the faith of the certificate sold the shares ; but the company refused to register the purchaser as the proprietor, on the ground that after granting the certificate to T. they had discovered that he was not the real owner of the shares. T. then, to fulfil his contract with the purchaser, bought other shares in the market, and successfully sued the company for the price as damages for his loss. But ' a person to whom the company «2 1879, 5 Q.B.D. 188. 423 This last is called estoppel against estoppel — Dixon v. Kennaway & Co., [1900] 1 Ch. at p. 840. See also Baker v. Willis, 1638, Cro. Cas. at p. 478, 79 Eng. Rep. 1013 ; and supra, p. 127. *''* Balkis case, supra. HOMOLOGATION 189 ' is liable by estoppel to pay damages for refusing to register his transfer ' does not by reason thereof become a shareholder. Indeed the very ' title by estoppel impUes that he is not one.' *^^ It is not the duty of each director to inspect every certificate and Directors and compare it with the share register. That duty is, as a rule, properly left ^^"^^ "^' to a subordinate official — usually to the secretary. Therefore a director who was present but did not sign when a certificate was passed, signed, and sealed was not barred from proving that the certificate covered shares of his own fraudulently sold through a conspiracy between the secretary and a clerk. *^® But the company will be Uable for such loss Measure of as can be ascribed to rehance on the inaccurate certificate, viz. the differ- ^^^^s^- ence, if any, between the value of the remedies available against the transferor or broker at the date of the certificate and at the date of the claim. The harm may either be direct pecuniary damage or loss of remedy.*^' Alteration of position ' does not mean that an active altera- ' tion is necessary, but that it is sufficient if the person to whom the ' statement is made rests satisfied with the position taken up by him ' in reliance on the statement, so that he suffers loss.' *^^ It is apparently immaterial, in a question between a transferee of Forgery. shares and the company, whether the blot upon which the company relies as a defence is fraudulent conduct on the part of an official or fraud by writ, i.e. forgery.*^* The real question in either case is whether the official has in fact been held out by the company as having authority to warrant the genuineness of a certificate,*^" and it matters not whether he has acted for the benefit of the company or for his own benefit.*'^ So that, where one lent money to the secretary of a company on the faith of a share certificate which turned out to be by the latter forged and fraudulently sealed, the case against the company on estoppel was held to be ' as fuU of holes as a colander.' ^^^ ' It is quite true that persons ' deahng with limited liability companies are not bound to inquire into 425 Ibid,^ [1893] A.C. at p. 407 ; Hart, held to be no estoppel for breach of duty, swpra, *^^. In England an equitable title the claimant having suffered harm in (mortgage by deposit) cannot stand up neither of these ways — Waterhouse v. against an earlier equitable title (trust), L. & S.W. Ry., 1879, 41 L.T. 553. though the trustee may have defrauded «8 p^J- FarweU J., [1900] 1 Ch. 838, the beneficiaries by transferring his legal explaining L. Blackburn's dicta in Knights estate in the shares — Shropshire Union etc. v. Wiffen, 1870, L.R. 5 Q.B. 665. Co. V. The Queen, 1875, L.R. 7 H.L. 496, «» Shaw v. Port PhiUp etc. Co., 1884, with which contrast Rimmer v. Webster, 13 Q.B.D. 103, doubted in the next case [1902] 2 Ch. 163 ; and see Carritt v. Real at p. 445. and Personal Advance Co., 1889, 42 Ch. *'" Ruben v. Great FingaU Consolidated, D. 263. [1906] A.C. 439, 443. «i! Dixon V. Kennaway, [1900] 1 Ch. 833. "' Lloyd v. Grace, Smith & Co., [1912] What if the director had inadvertently A.C. 716, where the opinion of Exch. Ch. signed ? in the notable case of Barwick v. EngUsh "2' Ibid. Cf. a reinsurance case of Joint Stock Bank, 1867, L.R. 2 Ex. 259, deteriorated health, where the Court was is explained in this sense, and certain equally divided — Foster v. Mentor Life opinions of Lord Bowen and Lord Davey Ass. Co., 1854, 3 E. & B. 48. And c/. are dissented from, a case similar to Dixon in which there was *'^ Ruben at p. 445, 190 HOMOLOGATION Bleach of duty. Fully paid shares. ' their indoor management, and will not be affected by irregularities of ' which they had no notice. But this doctrine, which is well established, ' applies only to irregularities that otherwise might affect a genuine ' transaction. It cannot apply to a forgery. . . . From beginning to end ' the company itself and its officers, with the exception of the secretary, had ' nothing to do either with the preparation or issue of the document.' *^^ Nay more, a transferee innocently tendering a transfer and a forged certificate as genuine may have to indemnify the company or corpora- tion for the loss arising from its having to reinstate the true owner.*^* Moreover, it is not safe for a purchaser or borrower, in the absence of certificates, to rely on the simple signature of even a managing director as vouching the genuineness of a transfer of shares.*^^ ' I ' have some difficulty in beheving that any man of business, whether ' a trained lawyer or not, could imagine that any board of directors ' would alter the register of their shareholders on the faith of a ' certified transfer without the production and cancellation of the ' old certificate.' *^^ Inasmuch as in cases of estoppel it is necessary that the party aggrieved should prove that he has been misled either by word of mouth or by conduct, it must be by word or conduct in some transaction to which he was a party. If he is unable to raise a case of estoppel by such direct proof, then he must at least prove generally that the defender has omitted to do some act which it was his duty to do towards the pursuer or the pubhc or some section of the pubUc, or towards those who may be desirous of becoming members of the company. Therefore a company was not barred from proving that the certificate it had issued was accurate and had only become an instrument of fraud when, being returned to the transferor by the company's mistake, it was used by the transferor as a security for a loan by the claimant — a third party. *^^ Of course one is not a shareholder whose certificate derives from a transfer which is invalid, and his name may be struck off the list.*^^ The Companies Act 1867, section 25, prescribed that every share in any company shall be deemed and taken to have been issued and to be held subject to the payment of the whole amount thereof in cash, unless the same shall have been otherwise determined by a contract duly made in writing and filed with the Eegistrar of Joint Stock Companies at or before the issue of such shares. Many cases arose under this *^^ Buben, per L. Ch. Lorebum at p. 443. "1 Sheffield Corp. v. Barclay, [1905] A.C. 392 ; Jameson v. Union Bank of Scotland, 1914, 109 L.T. 850; Att.-Gen. V. OdeU, [1906] 2 Ch. 47. On this question, see Whitechurch (George) v. Cavanagh, [1902] A.C. 117, esp. L. Robert- son's doubts at p. 137. *^* All that the director in Whitechurch said, and was expected to say, was true. for a promise, in either case is not a ground of bar ; see p. 138 and supra, p. 3. '"^ Last case at p. 132, per L. Mac- naghten. As to certification, see infra, p. 191. "' Longman v. Bath Electric Tramways Co., [1905] 1 Ch. 646, 653. As to negU- gence, see Chap. VIII. "« Hare v. L. & N.W. Ry., 1860, Johns. 722 (correction initialed without authority of vendor). HOMOLOGATION 191 section,*^* wherein companies were estopped or not estopped in questions with transferees and even allottees from denying their representation that shares were fully paid up — i.e. actually so and not merely issued with the intention that no call should be made. The companies were estopped if the bond fide purchaser of such shares had no notice of the facts, and were not so barred if he knew or shut his eyes to the facts. But this- section, after a stormy Hfe, was repealed in 1900, and there were substituted in that year and in 1907 clauses which now appear as the 88th section of the Act of 1908. The result is shortly stated in the leading commentary : **" (1) The contract need not be filed at or before the issue ; it may be filed within one month after the allotment ; (2) failure to file the contract will not prejudice the allottee or result in the shares being treated as unpaid ; it will merely render the officers of the company liable to penalties. A certification differs from a certificate of shares. ' Transfers are Certiflcation. never certified under the company's seal. There is no obhgation on a company to certify transfers at all. The certification is not passed by the directors or brought before the board. A certification, in fact, is only required for a temporary purpose, to meet the exigencies of business on the Stock Exchange, which has [or had] stated days and fixed periods for the different stages of a business transaction intended to be carried out under its rules. In deahngs in shares not under the rules of the Stock Exchange a certification is really out of place.' **i The custom seems to have arisen shortly before 1885.*^^ ' The practice of giving " certifications " has arisen from the difficulty felt by members of the Stock Exchange in setthng their accounts as buyers and sellers of shares where the seller's certificate of title does not accompany his transfer. If the seller's certificate includes more shares than he sells, he does not dehver it to the buyer with the transfer, but the seller produces his certificate and the transfer to an officer of the company, and he " certificates " the transfer ; and buyers and their brokers act on the faith of this " certification," just as they would if the certificate produced to the company had been produced to and lodged with them- selves. No fee is paid for a " certification." . . . The certification, therefore, to be of any use at aU, must amount to a representation that the transferor has produced to the person certifying such documents as on the face of them show a prima facie title in the transferor to transfer the shares mentioned in the transfer ; or, in other words, '" Fumess & Co. v. S.S. Cynthiana, 1893, 1 Ch. 101 (estoppel by covering letter) ; 21 R. 239, and English cases there ; Penang Foundry Co. v. Gardiner, 1913 Burkinshaw v. Nioolls, 1878, 3 Ap. Cas. S.C. 1203 ; Marlsham's case, [1899] 1 Ch. 1004 ; Parhury's case, [1896] 1 Ch. 100 ; 414 ; London Celluloid Co., 1888, 39 Ch. Bloomenthal v. Ford, [1897] A.C. 156 ; D. 190 ; Eddystone Co., [1893] 3 Ch. 9. Barrow's case with the others cited *^'' Buckley, Companies, 9th ed., p. 200. supra, p. 186 ; Criokmer's case, 1875, «" Per L. Macnaghten in [1902] A.C. L.R. 10 Ch. 614 ; Hall & Co., 1887, 37 Ch. p. 126. D. 712; Macdonald, Sons & Co., [1894] «« See 11 Ap. Cas. 38. 192 HOMOLOGATION ' ttat the transferor has produced to the person certifying either what ' purports to be a certificate of the title of the transferor to the shares ' mentioned in the transfer or the equivalent of such a document, in ' other words what purports to be a certificate of the title of some one * else to those shares and one or more documents purporting to ' transfer those shares from such person to the transferor. The secretary ' or other officer of the company does not warrant the title of the trans- ' feror nor the vahdity in point of law of the various documents which ' together estabhsh his title. ... To give " certifications " is incidental ' to the transaction in the ordinary business way of part of the legitimate ' business of aU companies having capitals divided into shares which are ' transferable by deed or other instrument.' **^ Do. The result is that it would be ' most unreasonable in any case, whether ' the transaction takes place on the Stock Exchange or not, to hold a ' company estopped by the certification of its secretary, if the secretary ' certifies a transfer without having received the certificates.' *** The case which ehcited this remark was one in which the transferor and the secretary were in fraudulent conspiracy and the act of the latter was out- with and contrary to duty.**^ One of the judges mooted the question whether the result might not have been different if the official's erroneous statement had arisen from mere negUgence.**^ But the affirmative seems to be open to the gravest doubt, for in Bishop's case there was held to be no remedy against the company, restitution being impossible, estoppel being repelled, and damages, apart from estoppel, being due only on the ground of fraud.**^ Entry in An entry in the register of a company is in matter of bar in the same position as a certificate. Either party may obtain from the Court rectification, and, as a rule, damages may be obtained on the plea of estoppel against the company only when a bond fids purchaser or creditor can prove loss — either damnum emergens or lucrum cessans.^*^ Arbiteation It seldom occurs that the course of htigation — the result of the fictitious contract of litis contestatio — is affected by the plea of personal bar ; and a short note of the principal cases has been already given under 413 Per Lindley L..J. in Bishop v. "" L. Brampton in Whitechurch at p. Balkie ConsoUdated Co., 1890, 25 Q.B.D. 139. 512 at pp. 519-20. See also Whitechurch **' Derry v. Peek, 1889, 14 Ap. Cas. 337 ; (George), supra, «* [1902] A.C. 137-8, per M'Kay's case, [1896] 2 Ch. 757, is conse- L. Brampton. That case suggests doubt quently overruled. In BaUds Consolidated as to the last sentence. Co. v. Tomkinson, [1893] A.C. 396 (see "* Per L. Macnaghten in Whitechurch p. 397), certificate followed certification. (George) v. Cavanagh, [1902] A.C. 117, 126. See also Longman v. Bath Electric Tram- *** On the analogy of Grant v. Norway, ways, [1905] 1 Ch. 646. 1851, 10 C.B. 665 (master of ship ; bill of «"« Hare, "« ; Balkis, "^ . gimm, "* ; lading) ; and see Lloyd v. Grace, Smith & Dixon, *2o . otto's Kopje, *"» ; Waterford Co., supra, «i. etc. Ky. v. Pidcock, 1853, 8 Ex'. 279. HOMOLOGATION 193 the head of acquiescence.**^ It is different with arbitration, which is the creature of actual contract, and proceeds without the same rigidity of process as necessarily governs the course of procedure in Court. There are, therefore, numerous illustrations of the topic of this treatise on both sides of the Tweed. The leading authority in Scots law is the case of Drew v. Drew,*^° in arbitration where it was laid down that the principles upon which an arbitrator (or procedure, arbiter) has to proceed must be the same in both countries. It being assumed or held that a Scottish arbitration can be compulsorily stopped, if and only if a subsequent award would have been necessarily reducible as being founded on fundamental injustice, the question was whether interdict against further procedure in the submission was competent on admissions that certain witnesses had been examined by the arbiter behind the backs of the parties, and that one witness had been examined on solemn declaration instead of oath. The answer was in the negative ; for in both cases there was waiver of objection, shown by subsequent meetings with the arbiter on ten occasions without demur, and in the first case by an offer of the arbiter, declined by the pursuer, to examine the witnesses formaUy.*^^ Personal bar — whether it be called acquiescence or homologation or Not funda- adoption or estoppel — is only pleadable where irregularities have occurred which do not go to the root of the contract — whether that be a substantive submission or a reference ancillary to and embodied in another contract — ^by transgressing against the common law, as declared or altered by statute, or in Scotland against the 25th section of the Articles of Regulation 1695. Of irregularities in procedure and defect of jurisdiction, which are Fundamental, manifestly upon general principles fatal to the award ^^ and incapable of being homologated though patient of being adopted, a few examples may suffice : — The insertion in a submission, blank in the name of one of the arbiters, of an arbiter named along with his own by one of the parties ; ^^^ in a reduction of a clause of reference, the giving of evidence on the merits by an architect-arbiter in favour of his employer ; *5* the fact (before the Trusts Act of 1867) that one of the parties, a body of trustees, could not legally enter into a submission ; ^^^ the fact that one of the alleged arbiters was a shareholder in a company which was one of the parties ; ^^^ *«» Supra, p. 93. See also L. Lovat v. 2 C. & P. 574 (excluding parties and their Eraser, 1866, 4 M. H.L. 32 ; L.R. 1 So. Ap. soHoitors from the proof). 24 ; Jenkins v. Kobertson, 1867, 5 M. H.L. "" Per L. Eldon in Walker v. Frobisher, 27 ; Gordon v. Hughes, 1819, 1 BHgh 287 ; 1801, 6 Ves. 70 ; and see Fetherstone v. White V. L. Morton's Trs., 1869, 4 M. H.L. Cooper, 1803, 9 Ves. 67 ; Glasgow etc. Ry. 53. Dykes «. Merry & Cunningham, 1869, Co. v. Nitshill Co., 1850, 7 B. Ap. 325. 7 M. 603; Dudgeon v. Thomson, 1854, i^' Deas u. Aytoun, 1821, 1 S. 26. 1 Macq. 714. *'* Dickson v. Grant, 1870, 8 M. 566. *=" 1855,2 Macq. 1; 1 Paterson's App. *" Thomson'sTrs.«.Muir,1867,6M. 145. 439, affg. 14 D. 559. See also 12 D. "6 geUar v. Highland Ry. Co., [1919] 983. S.C. H.L. 19. In In re Elliot, 1848, 2 De "1 See also Hewlett v. Laycook, 1827, G. & Sm. 17, 23, the arbiter objected to 13 194 HOMOLOGATION the fact that, in contravention of a reference clause in a contract, neither arbitrator was member of a prescribed association, it being moreover immaterial whether the parties knew of the blot or not ; *^' the fact that (under the law prior to 1894*^8) an oversman had adjudicated, though there was no power in the submission to nominate one.*^* Nothing can be more unjust than for an arbiter to take proceedings, in the nature especially of evidence, ex parte or behind the back of one party,*^" or, it may be, in the case of a true submission as distinguished from a reference to experts, of both parties ; *^i yet a material though brief delay in object- ing before issue of the award has in England been held to preclude effective cavil.**^ But the better view seems to be expressed in the words : ' Where an irregularity takes place at a meeting of all the parties ' and is passed over,' parties may waive their right to object. ' But, ' where a party wishing to be present has been excluded from the meeting, ' the opportunity of setting right what was irregular is past. The ' mischief is done at the time and cannot be removed.' **^ The dis- tinction is well illustrated in a case *'* where the parties, well knowing that the arbiters had prorogated the time for making an award before an umpire was appointed, yet attended a diet and thereby waived objection ; but it was fatal that part of the award was foimded on the evidence of one party taken in the absence of the other. Capable of The irregularity sought to be waived or homologated may be iU- execution oi a submission, where a formal document is expected by our law ; *** informahty or inadmissibihty of a prorogation ; **® informaUty was known to be surveyor of the company **^ Bignall v. Gale, 1841, 2 M. & G. party ; and the objection was effectually 830. See also the very special case, waived. The umpire was surveyor and a KingweE v. Elliott, 1839, 8 L.J. (N.S.) shareholder of a company which held C.P. 241. many shares in the other. The latter 463 pg^ L^^d Denman Ch. in Dobsou v. appointment was only doubtful in point Groves, 1844, 6 Q.B. 637 at p. 648. of delicacv. "' Jungheim, Hopkins & Co. .. Poukel- ^. "* ^». ™ ^ick, 1819 8 Ta^t^ 694 ; mann, |1909] 2 K.B. 948. It was thrown distmguished m Damley (E.) v. L.C.D. Ry., out that if the objector's own nominee '"■'™' ^'^^ ^ ^•^- ^* P" °'- had been alone disqualified there might "^ Telfer v. Hamilton, 1735, M. 5657, have been estoppel. 1'7032 ; Hutton v. Adams, 1830, 8 S. 591 ; *^^ 57 & 58 Vict. c. 13, s. 4. Macnaughten o. Murray, 1792, Bell's "' Matheson v. Mackenzie, 1842, 4 T>. Oct. Cases 253. A verbal reference may 1472 ; but see Matson v. Trower, 1824, suffice in trivial cases, or in more important Ry. & Moo. 17. cases it followed by operations in terms of "» In Patersou v. Sanderson, 1829, 7 it — Ferrie v. Mitchell, 1824, 3 S. 113; S. 616, the reason was that he had un- Livingstone v. Ealhouse Feuars, 1662, reasonably refused a prorogation and the M. 2200 (boundaries) ; Otto v. Weir, 1871, award was hurried on ; Barr v. Wilson's '^ ^- 660 (do. ). Tr., 1852, 15 D. 21. "s Macilhose v. Gardener, 1738, 6 B.S. ^'^ This is so much matter of principle, 204, and see M. 5659 ; Johnston v. Cheape, that there is no set-off where both parties 1817, 5 Dow. 247 ; Ruthven v. Banff, 1560, have had separate interviews with the M. 6619 ; Montgomery v. Semple, 1566, arbitrator— Harvey v. Shelton, 1844, 7 ibid. ; Dundee, P. & A. Ry. Co. o. Richard- Beav. 455. As to reference to experts, see son, 1851, 13 D. 552; Gowans v. Duncan, Flounders v. Flounders, 1826, 4 S. 459; 1859, 21 D. 403; Fletcher v. Robertson, Latta V. Macrae, 1852, 14 D. 641. 1919, 1 S.L.T. 260. HOMOLOGATION 195 ratification. in an award ; *^' the appointment of an oversman by lot ; *^^ the fact that a third arbiter has been treated as if he were oversman,**® or con- versely that an oversman has signed the award as if he were an arbiter ; *"* exclusion by an arbiter from the proceedings before him of persons reason- ably required for the conduct of the case ; "^ want of title on the part of guardians ; ^'^ or extension of the scope of a reference.*'^ The mode of instructing homologation of informalities occurring Modes of during the course of an arbitration *'* is usually by proving steps or a step of procedure *'^ which would not have been taken but for waiver of objection ; and after an award has been issued by showing that it has been acted on by the objector.*'* In the former case the actings may consist of attending diets, correspondence, and the like. But there can be no homologation, though the objector goes on with the cause, attending meetings, adducing evidence, and cross-examining hostile witnesses, if this be done subject to protest seriously tabled*" and justifiable.*'^ It is. then no answer that the true motive is to take the chance of being successful before the arbiter.*" The proof of the homologation must be clear and unambiguous.*^" And the alleged homologator must have been free to act.*®^ ' A waiver must be an intentional act with knowledge.' *^^ Here, Knowledge. "' Hepburn v. Hepburn, 1736, M. 5658 ; Primrose v. Duie, 1662, M. 5702 ; Erskine V. Erskine, 1682, M. 5703; Taylor v. Grieve, 1800, M. Arbitration, Appx. No. 8. In Robertson v. Boyd & Amans, 1885, 12 B. 419, L. Rutherfurd Clark's view seems to be preferable, L. CraighiU's view imtenable, and L. Young's view plausible. Percy v. MeiMe, 25tb Nov. 1808, F.C. 13 ; E. Hopetoun v. Scots Mines Co., 1856, 18 T>. 739. As to correction of a clerical ■error, see Wauohope v. Hamilton, 1711, M. 5712; BaiUie v. PoUock, 1829, 7 S. ■619. ««8 In re Tunno, 1833, 5 B. & Ad. .488 ; Backhouse v. Taylor, 1851, 20 L.J. Q.B. 233 ; In re Greenwood, 1839, 9 A. & E. 699 ; In re Jamieson, 1836, 4 A. & E. 945. «" Moseley v. Simpson, 1873, L.R. 16 Eq. 226 ; In re Marsh, 1847, 16 L.J. Q.B. 330. "" Davidson v. Logan, 1908 S.C. 350. There was here no homologation by either party. *'i Haigh V. Haigh, 1861, 31 L.J. Ch. 420 ; cf. Paterson & Sons v. Glasgow Corp., 1900, 2 E. 1201. "^ Pollock V. King, 1828, 6 S. 1006 (the ■ward on majority took up the process). 4" Eraser v. ConneU, 1869, 6 S.L.R. 214 ; Miller & Son v. Oliver & Boyd, 1903, ■6 E. 77, 8 E. 390, esp. 401-2, where the doctrine is called estoppel and held to be. ousted by a protest. And see N.B. Ry. Co. V. Barr & Co., 1855, 18 D. 102. "* Kirkcaldy v. Dalgaims' Trs., 16th June 1809, E.G. 318 ; Montgomerie v. Carrick, 1848, 10 D. 1387 ; Paul v. Hender- son, infra, *** ; Eraser v. ConneU, 1869, 6 S.L.R. 214. "^ See the interpretation of this phrase, as occurring in the English Arbitration Act 1889 (52 & 53 Vict. c. 49), s. 4, in Ochs v. Oohs Brothers, [1909] 2 Ch. 121 ; County Theatres v. Knowles, [1902] 1 K.B. 480; Parker, Gaines & Co. v. Turpin, [1918] 1 K.B. 358. 4"= E.g. Ruthven v. BanfE, *»« ; Mont- gomery V. Semple, *^'. 4" MiUer & Son u. Oliver & Boyd, "^ ; Christison's Tr. v. Brodie, 1906, 8 E. 928; Davies v. Price, 1864, 34 L.J. Q.B. 8; Haigh v. Haigh, 1861, 31 L.J. Ch. 420 ; Ringland v. Lowndes, 1863, 17 C.B. N.S. 514. *" In Montgomerie, supra, "^, the objec- tion was wrong in law. "0 Sheonath v. Ramnath, 1865, 10 Moo. Ind. Ap. 413 at p. 426. 480 Drew v. Drew, supra, p. 193 ; In re Salkeld, 1841, 12 A. & E. 767 ; Jenkins and Leggo, 1841, 11 L.J. Q.B. 71 (merely attend- ing when the award was issued). "1 Maxwell v. Lindsay, 1679, 2 B.S. 243. 4«2 Damley (E.) v. L.C.D. By., 1867, L.R. 2 H.L. at p. 57. 196 HOMOLOGATION therefore, as in other cases of homologation, as of personal bar generally, there must on the part of the person to be barred be knowledge of the blot which is being passed over or condoned, or at least satisfactory evidence that he could hardly have been ignorant of it, or that he took the risk of its existence.**^ ' The conduct of the party towards his opponent ' in a matter where consent is everything, was such as to raise a personal ' bar against his now stating the objection that the submission had ' expired. It was his duty to ascertain what the state of matters was, ' and he must be presumed to have done so, and, as he continued to plead ' before the arbiter, we will not now inquire whether the submission ' had expired or not, or whether he knew of its expiration.' *** The rule takes the stricter aspect where time is of the essence of the contract to submit.**^ Moreover, partial information may be equivalent to entire ignorance, as where the objector to an award knew that the umpire had been chosen by lot, but did not know that the latter had been originally rejected ; there had not been full disclosure.*^^ Similarly, where an architect-arbitrator had in certain disputes acted solely ia the interests of his employer and thus tainted the whole of his judicial work, it was held that there might have been waiver on the part of the contractor, if he had known all the circumstances ; but there could be none looking to the actual state of his knowledge.**' Lease Void or In many cases with which this volume is concerned provision is made for forfeiture or irritancy being the result of some contravention of a con- dition or covenant. As far as possible these terms and the waiver *** which may foUow have been avoided. For they suggest that on the contravention occurring the contract becomes null and void ipso facto and ipso jure, and that, if the objection to it is passed from, this must be by a revival of the contract or by a new contract being entered into, the truth being that the contract is only voidable at the instance of one party to it, and continues to subsist if the objection is not taken advantage of. The said party has an option — he may elect — to put an end to the contract, or on the other hand to let it stand — a true alternative.**' This doctrine of election, as has been indicated at the beginning of this ^^^ Fleming v. Wilson & M'LeUan, 1827, be illustrated by citing 45 & 46 Vict. c. 61, 5 S. 906 (contrast the judgments of the s. 16 (bills) ; 56 & 57 Vict. c. 71, s. 11 (o) majority and minority of the whole Court) ; (sale of goods). Macilhose v. Gardener, 1738, 5 B.S. 204: ^^^ Therefore an unequivocal determina- *'* Per L. Neaves in Paul v. Henderson, tion of a lease on the ground of breach of 1867, 5 M. 613. covenant is inconsistent with an applioa- *** Damley, supra. tion for an injunction (interdict) founded ««« In re Jamieson, 1836, 4 A. & E. 945. not on nuisance but simply on the terms *»' Hickman & Co. v. Roberts, [1913] of the lease, as if the lease still subsisted— A.C. 229. Wheeler v. Keeble, [1920] 1 Ch. 57, and . «88 The use of ' waiver ' in statute may . cases there. HOMOLOGATION 197 chapter,*'" applies prominently to cases of homologation, ratification, and adoption, and in particular in regard to leases and insurance.**^ It seldom occurs that a seeming and not illegal contract is held to have been ab initio null and void and therefora not binding on or available to the parties or even on or to third parties however honest and onerous. On the other hand, it constantly happens that a bargain is voidable in respect of contravention of duties imposed by law or paction, and that through slackness, good nature, or a calculation of risks the person entitled to object allows the contract to run on. In regard to the subject of this section it is readily conceivable that a tenant should be entitled, in respect of some act or omission by his landlord, to throw up his lease,**^ and does not avail himself of the option. But the ordinary case is that of a landlord, entitled to get rid of his tenant, refraining from doing so. He may then be personally barred from changing his mind, the tenant's position being altered in consequence of the election. The tenant is not entitled without compensation to get rid of his lease by his own misconduct,*'^ imless the irritant clause is very distinct to that effect. The true nature of an irritancy or forfeiture clause may b^ indicated Dicta as to by citing the following judicial utterances. In a case of prohibition clauses. against assignation of a lease and subletting, Lord President IngUs remarked : ' No doubt it is quite true that in regard to assigning and ' subsetting it is not said in so many words that assigning and subsetting ' shall operate as an irritancy and extinction of the lease ; but there are ' words to the same effect when it is provided that the same action of ' removing shall be competent to the heritor in the event of assigning ' and subsetting.' *'* ' The common expression " waiving a forfeiture," ' though sufficiently correct for most purposes, is not strictly accurate. ' When a lessee commits a breach of covenant on which the lessor has ' a right of re-entry, he may elect to avoid or not to avoid the lease, and ' he may do so by deed or by word. If, with notice, he says, under ' circumstances which bind him, that he will not avoid the lease or he ' does an act inconsistent with his avoiding, as distraining for rent (not ' under the Statute of Anne *'^) or demanding subsequent rent,*'" he ' elects not to avoid the lease ; but if he says he wiU avoid or does an ^'^ Supra, p. 140. See also to the same effect where the ^™-'^^^'^y ^^^ so emphatic as ' null and void Infra, p. 291. c ^^^^ j^^^^ ^ y ^^^ ^^^^ ^^ perpetually *"" See the cases in which a tenant may ■ renewable lease] had not been made nor or may not throw up his lease or retain • granted ' — Ogilvie v. Duff, 1834, 12 S. the rent — Rankine, Leases, 3rd ed., 227, 857. ^^'^ *^2'- ■>»= 8 Anne, c. 14 (or 18 in Statutes «" Kinloch v. MansHeld, 1836, 14 S. Revised). 905; Bidoulac «. Sinclair's Tr 1889, 496 Even, it would seem, though accepted 17 R. 144. And see Tait .. Gedd.e, 1897, ^^^^^ ^ ^^^^ ^^^^^ ^^^^ rent-Croft v. 24 R. 1128. "« Lyon V. Irvine, 1874, 1 R. at p. 518. L.R. 2 K.B. 161. Lumley, infra ; Kartell v. Blackler, [1920] circumstances. 198 HOMOLOGATION ' act inconsistent with its continuance, as bringing ejectment, he elects ' to avoid it.' "' Election. The landlord's option to terminate the lease is not held to be abandoned by an arrangement in the tenant's bankruptcy for possession by the trustee for a hmited time ; *'» or by a mere reference of all questions to arbitration, if for any cause not attributable to the landlord the refer- ence falls through.*89 There should be no unreasonable delay in declaring election to enforce an irritancy, especially where there is a change of status, as by a tenant's bankruptcy stipulated as a resolutive fact.^"* On the other hand, there may be circumstances in which an attempt to snatch an irritancy may be foiled ; ^"^ though the Court is slow to interfere with the sweep of conventional irritancies.^"^ While legal irritancies are purgeable at the bar, these conventional irritancies are not ; in the one case the landlord may expect or hope for a continuance of the relation ; in the other he has made up his mind to sever it.^"^ The landlord alone is entitled to elect — it being ^'ms tertii in any other to object to his so doing, as, for instance, where there is a clause in a lease ex- cluding assignees,^"* and statute does not interfere.^"^ He may renounce his veto expressly and (except by consent) irrevocably,^"^ or he may do so by his conduct. A question of In a case ^"' where a mineral lease excluded assignees and subtenants, and it was pleaded that the landlord had accepted assignees. Lord Watson observed : ' That a landlord has, by imphcation, consented to receive ' an assignee, or has so acted as to bar himself from alleging that he has ' not consented, must in my opinion be matter of inference from the *'' Per Bramwell B. advising H.L. in Removing, No. 3, appears to have pro- Croft V. Lumley, 1858, 6 H.L.C. at p. 705 ; ceeded on a wrong ground, and the land- adopted in Clough u. L. & N.W. Ry. Co., lord did not homologate. 1875, L.R. 7 Ex. at p. 35. See also in P.C. '"* Trotter v. Hall, 1790, Hume 878 ; Davenport v. The Queen, 1877, 3 Ap. Cas. Deuchar v. L. Minto, 1798, M. 15295 ;. at p. 128 (whether the election arises out Hay v. Wood, 1801, M. 15297 ; M'Coag v.. of contract or from statute) ; and the M'Sporan, 1803, Hume 813 (not the elaborate historical disquisition in Arm- tenant's heir) ; Darroch v. Rennie, 1803,. strong V. Turquand, 1858, 9 Ir. C.L.R. 32. M. 15301 (landlord had received rent from ^"^ Bidoulac, supra, *'' ; .and supra, tenant's legatee for sixteen years) ; Grieve p. 110. 0. Cunynghame, 1814, 6 Pat. 16 (landlord *'' Lindsay v. Hogg, 1855, 17 D. 788. objected to tenant's legatee at first and '"" Tennent v. M'Donald, 1836, 14 S. then homologated the destination in a 976 (within six months of bankruptcy read question with the tenant's heir at law) ;. as covering six months after sequestration). Dobie v. Ms. Lothian, 1864, 2 M. 788,. =»i Anstruther v. Greenshields, 1855, 18 796. D. 59. The case is put by the Lord Ordinary ^"^ As in the Agricultural Holdings Act in Scott V. Wotherspoon, 1829, 7 S. 481. (8 Edw. VII. c. 64), s. 19 ; and in the Small *"2 Stewart v. Watson, 1864, 2 M. 1414 ; Landholders Act 1886 (49 & 50 Vict. o. 29), and therein L. Benholm's exposition of s. 16. E. Mansfield v. Henderson, 2nd March 1815, s"" Ramsay v. Commercial Bank of E.G. 301. Scotland, 1842, 4 D. 405 ; and see Irvine v. ^"^ If a condition not fortified by an Valentine, 1792, 3 Pat. 287, 1 B.C. 78 note ; irritancy be infringed, notice to remedy 1 Bell, Leases, 179. must precede enforcement — Edmund v. *»' L. Elphinstone v. Monkland Iron and Reid, 1871, 9 M. 782. The judgment in Coal Co., 1886, 11 Ap. Cas. 332 at p. 337, Stonefleld v. Macarthur, 1800, M. Appx. 13 E. H.L. 98, 102. HOMOLOGATION 199 ' whole circumstances of the case. I can easily conceive that the fact ' of the landlord having, in the full knowledge of the cedent's actings, ' refrained frona making any objection to the assignee entering into ' possession might, in the absence of other evidence, be conclusive/ After showing, on the facts, that possession had been allowed in the hope that the assignees would agree — as they never did — to a condition which the landlord was entitled" to impose, his Lordship continued : ' In these ' circumstalices it appears to me that the mere fact that rents were paid ' to the appellant by the new company is of no consequence. The receipts ' given for these payments contain no reference to the new company, ' and no entries or expressions from which his recognition of the company ' can be reasonably inferred.' Similarly, where there had been a lease descendible to heirs and not assignable, and it was alleged that daughters of the tenant had been recognised as tenants by their brother, the tenant's heir, the necessary election in their favour by the landlord was held not to be proved, though they had possessed for several years, there being a reservation in the receipts of all objections to their title.^"^ The election Conditional, in favour of a lease may be conditional, as where the bankrupt tenant's trustee is accepted on terms ; and the bankrupt is not in titulo to impugn it.^"* In regard to removings, there is nothing in the statutes to prevent landlord and tenant, in their lease or subsequently, from extending or curtaiKng the length of warning or notice to quit.^^" While an obligation Facts incon- by a tenant or permission by his landlord to remove at a certain date irritancy. can ordinarily be proved only by the writ or oath of the recalcitrant party, an informal promise may be established as an election, where some- thing so material has followed on it as quitting part of the subjects ; ^^^ receiving payment in consideration of removing, getting another farm on that footing, and being allowed to depart from a prescribed course of cropping ; ^^^ or possessing on a new bargain of which obHgation to remove forms a part.^^^ Lastly, while proof of passing from a decree of removing by bargain entered into prior to the term of removing must normally be by the restricted modes,^!* receipt of rent for a period beyond that term may confirm the tenant in his possession at least for that period ; ^^^ and delay in putting the decree into execution, if relied on Mora. by a tenant who acted on a supposed passing from it, might bar the 5»8 Gray v. Low, 1859, 21 D. 293. The "^ Jamieson v. Thomson, 1802, Hume record was badly framed and the majority 807. of the Court held strictly to it. sia g Bell, Leases, 117 ; Ivory's note to s»9 Dobie V. Ms. Lothian, 1864, 2 M. 788 Ersk. 2.6.50. (the recognition was for the purpose of 513 j^^^^ ^ Ferguson, 1840, 2 D. 546. buying renunciation of the lease). With r^j^^ ^^^^ ^^ p Argyle v. Russel, 1799, M. this contrast the dicta of L.P. IngUs m ^^^^ Removing, No. 2, probably turned Fleming v. Macdonald, 1860, 22 D. 1025, ^^ ^j^^ ^^^j ^^^^^^ having been warned ; H 1030. ]jQ^ jt seems to be overruled by the later 5i» Cowdray v. Ferries, 1918 S.C. 210 ; ^^^^ Glendiimingj. Board of Agriculture for ^^; ^^^^ ^^^_ Scotland, 1918 S.C. H.L. 56, revg. 1917 B.C. 264. "' Grierson, 17th Nov. 1812, F.C. 3. 200 HOMOLOGATION English cases. Proof. landlord by homologation from proceeding to eject. *^* ' I can figure ' cases in which the lapse of time between the granting of the decree ' and its enforcement was so great as to give rise to a presumption of ' waiver on the part of the landlord, reqtiiring to be rebutted by explana- ' tion. I can also figure cases where the lapse of time, and the fact that ' the tenant has acted in the behef, created by the landlord's delay, ' that he was to be allowed to remain on his holding, would present a ' composite case, giving rise to a plea of bar against the laddlord if he ' attempted to enforce his decree.' ^'•' The BngKsh cases are many, and only those decided in modern times need be referred to. Knowledge of the breach of covenant and of the fact which calls for the exercise of the election is of course essential on the part of the landlord himself "^^ or of an agent of his who is empowered to elect, ^^* and this the tenant must prove directly or by facts and circumstances.^20 ij}^g election is kept aUve or open by continuing or subsequent similar breaches of condition ; homologation extends only to what is past and gone.^^'^ But election to recognise an assignee or subtenant is effective once for all, and bars objection to his continuing to possess. ^^^ The main evidence of election not to take advantage of a breach of covenant or condition has been receipt of rent, in one case for the whole course of a lease in accordance with the exigencies of pubhc policy ; ^^^ demand for or receipt of rent due after the forfeiture became known in cases of assignation or subletting,- ^^^ or of the tenant's bankruptcy ; ^^^ and action or distress for such rent.^^* A distinction between forfeiture on breach, which leaves the lease only voidable at the landlord's instance, and the expiry of a notice to quit, which annuls the lease and may lead 518 Taylor v. E. Moray, 1892, 19 R. 399 (three weeks' postponement of a charge, not enough, nothing having been done by the tenant). 51' Ibid., p. 401, per L.P. Robertson. Serjeant v. Nash, [1903] 2 K.B. 304, and oases there are not contra. 5" Matthews v. Smallwood, [1910] 1 Ch. 777. 51' Nash V. Birch (Doe d.), 1836, 1 M. & W. 402. 52° Matthews, supra ; Kelaey v. Dodd, 1881, 52 L.J. Ch. 34. 521 Baker v. Jones (Doe d.), 1850, 5 Exoh. 498; Penton v. Bamett, [1898] 1 Q.B. 276 ; Coward v. Gregory, 1866, L.R. 2 C.P. 153 (the distinction between putting and keeping in repair) ; Jacob v. Down, [1900] 2 Ch. 156 (do.). 522 Walrond v. Hawkins, 1875, L.R. 10 C.P. 342; Griffin v. Xomkins, 1880, 42 L.T. 359. As to the scope of express waiver in England in this case and gener- aUy, see 22 & 23 Vict. ^. 35, a. 1 ; 23 & 24 Vict. o. 38, B. 6. 523 Davenport v. The Queen, 1877, 3 Ap. Gas. 115, 130, though (it was said) accepted conditionally and without prejudice ; and see Croft v. Lumley, 1858, 6 H.L.C. at p. 725 ; Strong v. Stringer, 1889, 61 L.T. 470. But see Gray v. Low, supra ; R. v. Paulson, [1921] Ir. Ca. 271. 52* Walrond, supra, 5»'. As to an ineffec- tual demand, see Bljrth v. Dennett, 1853, 13 C.B. 178. Even demand for one day's rent after expiry of warning may import election in tenant's favour — Keith, Prowse & Co. V. National Telephone Co., [1894] 2 Ch. 147. 525 Gatehouse v. Rees (Doe d.), 1838, 4 Bing. N.C. 384. 526 Dendy v. NichoU, 1858, 4 C.B. N.S. 376 ; Cotesworth v. Spokes, 1861, 10 C.B. N.S. 103 ; Shepherd v. Berger, [1891] 1 Q.B. 597. But see Grimwood i/. Moss, 1872, L.R. 7 C.P. 360. HOMOLOGATION 201 to revival of it or a new bargain,^^' seems, in this matter of election, to be open to doubt. ^^^ Accepting rent after breach of a covenant to erect buildings within a specified time is waiver once for all, and carries with it a waiver of forfeiture for breach of a separate covenant to repair the buildings if and when erected.^^' After giving effective notice to quit, acceptance of money sent as rent and retained on some other pretext is waiver, for it could be ascribed to no other than rent.^^" Of course, acceptance of rent is no waiver, where the landlord has no option to object, as under the Increase of Eent etc. Acts enacted in war time and sub- sequently.531 And refraining from pressing one ground of forfeiture does not infer passing from another.^^^ Insxteance The same observations as appear at the beginning of the foregoing introduction, section, with regard to the voidableness of a continuing contract at the instance of one of the parties, apply to insurance, and that with all the greater force, in that insurance is a contract uberrimasfidei and therefore hable to be ripped up in consequence not only of positive misrepresenta- tion, but also of concealment ^^^ or, more properly, non-disclosure of such facts as, if known, would or might have weighed with the insurer in considering whether to take on the risk, or, if he did, on what terms. Seeing that the assured or his broker usually knows more of the circum- stances than the insurer ; that the critical conditions which are made the basis of the contract are all conceived for the protection of the insurer ; and that it is not usually in the interest of the assured to cry oS, it is found in -practice that the election to annul or to carry on — in the latter . case to waive a forfeiture, according to the usual terminology — Ues invariably with the insurer. In a case of charter-party the problem was thus put ^^* in a passage adopted in later decisions : ^'^ ' Did the ' defendants by their acts or conduct lead the plaintiff reasonably to ' suppose that they did not intend to treat the contract for the future ' as at an end on account of the failure to perform the condition ' precedent.' =" Blyth, supra, =" ; Tayleur v. Wildin, =«i Penrhos CoUege v. Butler, 1920, 1868, L.B. 3 Ex. 303. 36 T.L.R. 753. -B Boyd V. Phelan 1884 M L.R Ir. ,,, ^^^^^ ^ ^^ ,,, 239 ; L. Inohiquin v. Lyons, 1887, 20 L.R. Ir. 474. ''' Infra, Chap. IX. =2» Stephens v. Junior Army and Navy ,,, p^^ g^^^^ L.J. in Bentsen v. Taylor, Stores, [1914] 2 Ch. 516, correcting dicta ^ ^ 2 q ^ ^^ 283. in Jacob v. Down, [1900] 2 Ch. 156. Aa . l j •« i to several irritancies, one waived, the others ^'^ Per Vt. Reading C.J. in Panoutsos v. available to landlord — Evans v. Enever, Raymond Corp., [1917] 2 K.B. at p. 478 [1920] L.R. 2 K.B. 315. (sale) ; and per Atkin J. in Ayrey v. British , =«» HarteU». Blaokler, [1920]2K.B. 161, Legal Co., [1918] 1 K.B. at p. 142 (life and oases there. insurance). 202 HOMOLOGATION Marine Insurance. When contract is deemed to be concluded. Representa- tions pending negotiation of contract. Insurance is uberriincB Jidei. Disclosure by assured. In Marine Insurance part at least ^^^ of the relevant law has been codified. The Marine Insurance Act 1906 =3' enacts as foUows :— 21. A contract of marine insurance is deemed to be concluded when the proposal of the assured is accepted by the insurer, whether the policy be then issued or not ; and for the purpose of showing when the proposal was accepted, reference may be made to the slip or covering note or other customary memorandum of the contract though it be unstamped. 20. (1) Every material representation made by the assured or his agent to the insurer during the negotiations for the contract, and before the contract is concluded, must be true. If it be untrue the insurer may avoid the contract. (2) A representation is material which would influence the judgment of a, prudent insurer in fixing the premium, or determining whether he will take the risk. (3) A representation may be either a representation as to a matter of fact or as to a matter of expectation or belief. (4) A representation as to a matter of fact is true, if it be substantially correct, that is to say, if the difference between what is represented and what is actually correct would not_be considered material by a prudent insurer. (5) A representation as to a matter of expectation or belief is true if made in good faith.''' (6) A representation may be withdrawn or corrected before the contract is concluded. (7) Whether a particular representation be material or not is, in each case, a question of fact. 17. A contract of marine insurance is a contract based upon the utmost good faith, and, if the utmost good faith be not observed by either party, the contract may be avoided by the other party. 18. (1) Subject to the provisions of this section, the assured must disclose to the insurer, before the contract is concluded, every material circumstance which is known to the assured, and the assured is deemed to know every circumstance which, in the ordinary course of business, ought to be known by him. If the assured fails to make such disclosure, the insurer may avoid the contract. (2) Every circumstance is material which would influence the judgment of a prudent insurer in fixing the premium or determining whether he will take the risk.''* (3) In the absence of inquiry the following circumstances need not be disclosed, namely : — (o) Any circumstance which diminishes the risk ; (6) Any circumstance which is known or presumed to be known to the insurer. The insurer is presumed to know matters of common notoriety or knowledge and matters which an insurer in the ordinary course of his business, as such, ought to know ; (c) Any circumstance as to which information is waived by the insurer ; (d) Any circumstance which it is superfluous to disclose by reason of express or implied warranty. (4) Whether any particular circumstance, which is not disclosed, be material or not is, in each case, a question of fact. "« See the Act, s. 91 (2), and cf. Bank of England v. Vagliano, [1891] A.C. at p. 144. 5" 6 Edw. VII. c. 41. ''' Therefore a misrepresentation of this kind does not operate as bar unless it be fraudulent. ^^' See Associated Oil Carriers v. Union of Canton, [1917] 2 K.B. 184, and cases there. HOMOLOGATION 203 (5) The term ' circumstance ' includes any communication made to, or information received by, the assured. 19. Subject to the provisions of the preceding section as to circumstances which need Disclosure by not be disclosed, when an insurance is effected for the insured by an agent the agent must ^g™ anee'' '"^ disclose to the insurer : — (a) Every material circumstance which is known to himself, and an agent to insure is deemed to know every circumstance which in the ordinary course of business ought to be known by, or ought to have been communicated to him ; and (6) Every material circumstance which the assured is bound to disclose, unless it came too late to communicate it to the agent. Tlie part of these enactments which is here relevant is really an enlargement of Lord Mansfield's dicta in a famous case.^*" ' If an ' underwriter insures private ships of war by sea or on shore, from ' ports to ports and places to places anywhere, he needs not be told ' the secret enterprises that are destined upon ; because he knows ' some expedition must be in view, and, from the nature of his ' contract, without being told he waives the information.^*^ . . . The ' underwriter here knowing the governor to be acquainted with the state ' of the place ; knowing that he apprehended danger and must have ' some ground for his apprehension ; being told nothing of either ; ' signed this policy without asking a question.' ^^^ This was waiver ; and the claim was made out. The election to afErm or disaffirm the contract ia a case of non-disclosure must be made within a reasonable time, particularly if delay would alter the assured's position to his detriment.^*^ Waiver or election is equivalent here to acquiescence — willingness, for example, to take the risk of not making full inquiry in regard to customary warranties such as ' at and from,' ' lost or not lost,' and the implied warranty of seaworthiness in voyage pohcies.^** The same applies to aU warranties, for : — 34. (3) A breach of warranty may be waived by the insurer. 42. (1) When the subject matter is insured by a, voyage policy " at and from ' or Commenee- ' from ' a particular place, it is not necessary that the ship should be at that place ™^°'' °' "8''' when the contract is concluded, but there is an implied condition that the adventure shall be commenced within a reasonable time, and that, if the adventure be not so commenced, the insurer may avoid the contract. "" Carter v. Boehm, 1766, 3 Burr. 1905 "* The older cases are in Arnould. (loss of a. fort or rather a factory to a ss. 618-9. See also Property Ins. Co. v. governor or rather a trader). As to the National Protector Co., 1'913, 108 L.T. question there (the broker's evidence as 104 ; Hubbard v. Jackson, 1811, 4 Taunt, to the materiality of facts not disclosed), 169 ; Weir v. Aberdein, 1819, 2 B. & Aid. see notes to the case in 1 Smith, L.C. 320 (consent of underwriter to repair of '" P. 1910. These words were adopted unseaworthiness during voyage), explained by Scrutton J. in Cantiere i^. Janson, in Quebec Co. v. Commercial Bank of [1912] 2 K.B. 116 (unseaworthy floating Canada, 1870, L.R. 3 P.C. at p. 244. dock). 542 p 1918. ^** See cases in last note ; and Russell 6«3 Morrison v. Universal Marine Ins. v. Thornton, 1860, 6 H. & N. 140 (waiver Co., 1873, L.R. 8 Ex. 197. not proved). 204 HOMOLOGATION Notice of abandonment. Proof of homologation. (2) The implied condition may be negatived by showing that the delay was caused by circumstances known to the insurer before the contract was concluded, or by showing that he waived the condition.'^" 62. (1) Subject to the provisions of this section, where the assured elects to abandon the subject-matter insured to the insurer, he must give notice of abandonment. If he fails to do so, the loss can only be treated as a partial loss. (8) Notice of abandonment may be waived by the insurer. There is no direct illustration of this last provision ; but it proceeds on the same lines as the decision of a case which was thus explained by BuUer J. : ^^^ ' When the accident happened the plaintiff com- municated these circumstances to the underwriters ; he laid an account before them of the situation of everything and expressed a desire to abandon. They objected to it ; they said, let the vessel be repaired and we wiU pay the tradesmen's biUs ; the plaintiff refused to advance any money, but relinquished at their desire his intention of abandon- ing. On this evidence I have no difficulty in giving it as my opinion that the repairs were undertaken at the risk of the underwriters and that they were answerable for all subsequent losses.' ^*^ A rule applicable to all cases was formulated ^^^ in a marine insurance case in which fraudulent non-disclosure by the assured's broker of material information was alleged : ' The question is, has the person, on whom ' the fraud was practised, having notice of the fraud, elected not to avoid ' the contract ; or has he elected to avoid it ; or has he made no election ? ' We think that so long as he has made no election, he retains the right ' to determine it either way, subject to this, that if, in the interval, whilst ' he is deliberating, an innocent third party has acquired an interest in ' the property, or if, in consequence of his delay, the position even of ' the wrongdoer is affected, it will preclude him from exercising his right ' to rescind. And lapse of time without rescinding will furnish evidence ' that he has determined to affirm the contract, and, when the lapse of * time is great, it probably would in practice be treated as conclusive ' to show that he has so determined. But we cannot see any principle,. ' and are not aware of any authority, for saying that the mere fact that ' one who is a party to the fraud has issued a writ and commenced an ' action before the rescission is such a change of position as would preclude ' the defrauded party from exercising his election to rescind.' ®^i **' See as to reasonable time, s. 88, and as to ' from ' and ' at and from,' Rules 2 and 3 appended to the Act. There was no waiver in a case of reinsurance in Maritime Ins. Co. V. Steams, [1901] 2 K.B. 912. See also De Wolf v. Archangel Co., 1874, L.R. 9 Q.B. 451. 54' As to conduct instructing acceptance of the notice, see Provincial Ins. Co. v. Leduc, 1874, L.R. 6 P.C. 224. 5" Da Costa v.. Newnham, 1788, 2 T.R. 407 at p. 413. The doubt and rejection of this decision in Lohre v. Aitohison, 1877, 2 Q.B.D. at p. 508, and Svensden v. WaUace, 1884, 13 Q.B.D. at pp. 80 and 90, do not touch this doctrine. '*' The repairs were made on the security of a bond of respondentia. ^^o In quoting Clough v. L. & N.W. Ry. Co., 1871, L.R. 7 Ex. at p. 35; supra, p. 140. =" Per Exch. Ch. in Morrison v. Uni- versal Marine Ins. Co., 1873, L.R. 8 Ex. 197 at p. 204. See also pp. 205-7. HOMOLOGATION 205 The junior insurances may be taken together. In regard to these other and also in a minor degree in regard to marine insurance the stress of "^^"'■*"''®^- competition among the insurers and the dread of scaring away business through incurring a reputation for harshness have combined in practice to discourage the Offices from electing against the assured, •where the answers to queries, the truth of which (and not merely their veracity) is made the basis of the contracts and therefore warranted, have been given innocently, carelessly, or even with some tincture of dishonesty. On discovery of the blot some rearrangement is habitually attempted so as to obviate an annulment of the contract and the result (invariably stipu- lated) of forfeiture of the premiums paid.^^^ Some indulgence is allowed where the policy is held by an onerous bond fide assignee, for the Offices have an interest in the marketability of their policies. Lastly, no duty lies on the Office to con meticulously or even dihgently the history of each risk, once it' has begun to rim. So that, in the United Kingdom at least,^^^ it is not surprising that, notwithstanding the immense amount of business transactions, there should be so few decided cases. One of the points above mentioned was illustrated in an important Knowledge of Scottish decision, where the objection taken by the Office in regard to a ^°' '^ ' ^' life pohcy was aimed at what is technically called ' habits.' ^^* It was alleged against the Office that the facts (on the footing that misstate- ments had been made in the proposal and declaration) were well known to it before it accepted premiums from the assignees of the pohcy, and continued to be so at least after it had been put on its inquiry. Lord President Inglis thus stated the sort of knowledge which alone could raise a plea of bar : ' All that is proved is that certain rumours came to ' the ears of certain of the officers of the pursuers' company that raised ' or should have raised their • suspicions. But these rumours were of ' the vaguest possible nature. Nothing would have been more rash ' and ill-advised than that the company on such information should have ' intimated to anybody concerned a challenge or anything approaching ' a challenge of the policy. I do not know exactly what it is that the ' defenders suggest was the duty of the company in the circumstances ' alleged. Were they instantly to raise an action of reduction, or were ' they to refuse further premiums and announce that they held them- ' selves no longer bound by the pohcy 1 Either would have been a most ' rash and impohtic course and migh* have involved them in very serious ' responsibihties to the insured as well as to his assignees, which was ' certainly not justified by the information before the company at the ' time. If after a pohcy has been assigned the insurance company become ' aware of objections to its vahdity so clear and conclusive that the **^ E.g. in life assurance conditions United States, where the contract has been as to age at entry, residence abroad, highly developed. gtg_ =5* Scottish Equitable Life Ass. Soc. v. 553 No attempt has been naade to cite Buist, 1877, 4 R. 1076, aff. without the decisions in the Dominions and in the opinions, 5 R. H.L. 64. 206 HOMOLOGATION ' mere statement is enough, I do not say that there may not then be a * duty of communication to those whom the company know to be interested ' in the policy. It would not be consistent with good faith that they ' should in such circumstances go on receiving the premiums on a policy ' that they intended to challenge in the end. But there is nothing ' approaching such a case here, and therefore we need not consider the ' question.' ^^^ Agent's The knowledge which thus may and should call for election to affirm now e ge. ^^ disaffirm must, of course, be the knowledge of agents of the company; and in particular of those who, as directors, are in a position to make an effective choice.^^* The onus of proof lies on the holder of the pohcy.^*' Thus in an accident insurance case one of the points was the repelling by the Court of an argument founded by the assured upon knowledge by a mere canvasser of an earher mishap similar to that with which the pohcy was concerned ; ^^^ while in another case of accident insurance the Office was fixed with the knowledge of its general agency super- intendent through whom the insurance was effected.^^^ It would probably be the same if the knowledge was that of a district agent whose sole or principal business is insurance, and who is in constant communication with head office.^*" Thus, where the broken condition in a Ufe poHcy related to absence beyond Europe, and the contract was effected at a branch office, the agent there received premiums from an assignee of the pohcy for fourteen years and until the assured' s death in fuU know- ledge of the assured's constant residence in Canada, election in favour of ignoring the breach was gathered from the facts. ' If it were material ' to decide ... I should hold, upon the affidavits before us, that the ' office was affected with notice of the absence of Mr Bennett beyond the ' boundaries hmited by the pohcies. I .think it, however, immaterial ' to determine that question. The office undoubtedly received the money ' from their agents to whom it had been paid on express terms and ' conditions, and the office having held out [the successive branch agents] ' to the world as their agents for the purpose of receiving the premiums, ' I think it became the duty of [the agents] and not that of the plaintiff ' (the assignee) to commimicate to the head office at Norwich the circum- ' stances under which these premiums had been paid and received by "6 At 4 B. at pp. 1081-2. In M'Millan v. Accident Ins. Co., 1907 550 Per L.J.C.Macdonald in M'Millan, "», * S-*^- ^^*' ■"'here Cruikshank was explained, 1907 S.C. at p. 492. there was express disclaimer of the office 5" Barrett v. .Jermy, 1849, 3 Ex. 535, ^f^S ^^^d with agent's knowledge. See K^2 ^'^° JJawden v. London etc. Ass. Co., ,i. T .r J TT ,.,. A « [1^^2] 2 K.B. 534, canvassed in M'MiUan ; ^ , \t. ""« t ^^} Assurance Assn. .. 3; „, r<^,^ Life Ass. Co., [1902] 1 K.B. Yule, 1904, 6 F. 437 The mam pomt was gig; Levy v. Scottish Employers' Ins. (as m other cases here noted) that the q^ jgQj 17 Times L R 229 canvasser, in too zealously answering the ^'eo gee the converse case of knowledge queries m the proposal, was aotmg for the by master of insured ahip-Proudf oot v. ^^^'^^^^- Montefiore, 1867, L.R. 2 Q.B. 511, and 55» Cruikshank v. Northern Accident cases there ; Blackburn, Low & Co. v. Ins. Co., 1895, 23 K 147 (lameness observed). Vigors, 1887, 12 Ap. Cas. 531 (broker). HOMOLOGATION 207 ' them, and the representations whicli were made on the occasions of ' such payments and receipts.' ^*^ In a later case the alleged non- disclosure was that the ' Ufe,' described in the proposal (truly) as a fisherman, did not reveal the fact that he belonged to the Royal Naval Reserve and had been called up for mine-sweeping. But the company's agent and their superintendent, who was also their district manager and so named in the pohcy, were both informed. It was held that the notice to the latter' fixed the company with habihty on the ground of estoppel.^^^ In any case the Office would be not fixed with acts done by its agent fraudulently and for the benefit of the assured.^''^ Where, as was held on a sound construction of a life poUcy, it and Adjustment the premiums paid could be forfeited only in case of wilful misrepresenta- ° ^ tion by the assured in the proposal and declaration, and the misstatement warranted therein was made by innocent mistake as to age at entry, viz. that the ' life ' was then three years younger than she actually was, with the result of paying smaller premiums than would have been charged if the truth had been known at the time, the Office accepted two annual premiums after notice of the blunder. The pohcy had been assigned, and the assignee thereafter — ^the contract being an endowment pohcy, payable at sixty or death — tendered payment of the premiums at the stipulated rate down to and including the latest possible instalment. He was met by the plea that he should pay the difference between the two rates for the past with compound interest, and the higher rate for the future. It was held that by accepting premiums after know- ledge of the facts the company must be taken to have affirmed the poHcy as it stood, and that consequently they had to accept the assignee's tender and to pay the pohcy moneys upon the assured actually attain- ting the age of sixty, and were not entitled to postpone payment until the assured had attained that age upon the assumption of her age at the date of the proposal having been as therein stated.^''* Similarly a com- pany was held to the letter of its obhgation in two cases decided at the same time and thus briefly described by Lord Alverstone : ' In both ' cases they have issued pohcies and received premiums. It is quite ' true that these pohcies purport to be made on the basis of proposals, ' and the pohcy in each case contains a condition that if any statement ' in the proposal is untrue the pohcy is void and all premiums are forfeited. 661 -yping J,. Harvey, 1854, 5 De G. M. & '"^ Ayrey v. British Legal Co., [1918] Cr. 265, per Turner L.J. at p. 277. The 1 K.B. 136. Secus, if the absence beyond first agent had expressly said that the limit be brief — Sparenborg v. Edinburgh policies would be good notwithstanding Life Ass. Co., [1912] 1 K.B. 195. the emigration. See also MacMe v. „, Bigga,v, "», at [1902] 1 K.B. 525, European Ass. Soc, 1869, 21 L.T. 102 yng a judgment of the U.S. Supreme (alleged mistake as to the office for which ^^^^^ ^^^.^^ ^^^ approved also in the agent was acting). An allegation j.j'jjjjjan "' that verbally and utiico contextu with the policy a condition was relaxed is not *°* Hemmings v. Sceptre Life Assn., allowed to be proved — Reis v. Scottish [1905] 1 Ch. 365. Secus, if the statement Equitable Life Ass. Soc, 1857, 1 H. & N. 19. had been fraudulent. 208 HOMOLOGATION Non-payment of premium. But in both cases the justices have found that the alleged proposals were not in fact signed by the proposers, nor had they any knowledge of the contents or given any authority to make the statements.' ^*^ And JeH J. put the cases as cases of estoppel. ' It seems to me that both parties were estopped from denying that the policy was granted on the basis of a proposal. But when it came to the company setting up as a defence to the pohcy that there were false statements iu that proposal, it was incumbent on them to produce the proposal, to show what the false statements were ; and the proposal which they produced turned out in each case to be no proposal at all, because it was neither signed nor authorised by the assured. Consequently the company fail in their defence and ought to pay what on the face of the pohcy they undertook to pay.' Even a fraudulent misstatement has been held to have been condoned by acceptance of one premium after knowledge of the fraud had been brought home to the company.^ ^* Of course passing over one misstatement in the basal documents or ignoring a non-disclosure therein is no bar to the Office founding on another misstatement or concealment.^*' On the other hand, the mode of acting on one stipulation for the adjustment of a claim may infer the passing from another.^*^ In a case of an accident insurance the death took place during the days of grace allowed for payment of a premium ; the current instalment had not been paid ; there was some correspondence between the company and the sohcitor of the executors during these days at a time when neither of them knew of the non-payment ; and after the days were over the company repudiated habihty. It was held entitled to do so inter alia because the lack of communication by the company at an earUer date did not operate as estoppel.^*^ A demand or action for belated premiums would be waiver of a forfeiture if it had been timeously effective ; not otherwise.^'" Payment of a ' claim ' by an Office in ignorance of the lapse of a pohcy through non-payment of a premium is not waiver ; and action for repetition hes though the Office had ample ' means of knowledge.' ^'^ Where poUcies were issued, subject to being voidable if the assured did not give notice of any policy effected elsewhere, the forfeiture did S65 Pearl Life Ass. Co. v. Johnson ; Do. V. Greenhalgh, [1909] 2 K.B. 288. The proposals and the misstatements as to health and age respectively were really made by over - zealous agents of the Company. =6« Armstrong v. Tnrquand, 1858, 9 Ir. C.L.R. 32. 5" Forbes & Co. v. Edinburgh Life Ass. Co., 1832, 10 S. 451, esp. 461. See M'Ewen V. Guthridge, 1860, 13 Moo. P.C. 304. 669 Toronto By. Co. v. National etc. Ins. Co., 1914, 111 L.T. 555. As to promise of revivor, subject to a condition, see Handler V. Mutual Assn., 1904, 90 L.T. 192. ^°' Simpson v. Accidental Death Ins. Co., 1857, 2 C.B. N.S. 257, 293. As to a policy thus lapsing and a new "one with different bonus rights put in its place, see L. Tredegar v. Windus, 1875, L.R. 19 Eq. 607. As to notice of default of payment in the case of collecting societies, see 59 & 60 Vict. c. 26, ss. 3 and 16. See also the very special case of Busteed v. West of England Co., 1857, 5 Ir. Ch. R. 553. "» Edge V. Duke, 1849, 18 L.J. Ch. 183 ; and see Newcastle Fire Office v. M'Morran, 1815, 3 Dow 255. "1 Kelly V. Solan, 1841, 11 L.J. Exch. 10. HOMOLOGATION 209 not apply where another policy was taken out which depended for its validity on a premium having been paid, and this was not done."^ It is no evidence of election to continue the contract or of a new contract that the Office, in the erroneous belief that a premium had been timeously paid, had debited with the amount the account of their agent, and that he had received the instalment after the expiration of the days of grace.^''* In these cases of belated payment of premiums, a mode prescribed in a pohcy for reviving it does not exclude other forms of election to go on with the contract as still subsisting."* Adoption It has been pointed out that an act which is done fundamentally Limitation of ultra vires cannot be set up."^ Nor can a forgery ; but in this case '''^ '^""■ results similar in most or all respects to homologation may follow by means of a doctrine which in modern Scots parlance is called adoption. The forgery is a nullity and worse, but the seeming obligation may be so far recognised as that someone — to screen the forger or from some other motive, good or bad — treats the forged signature as if it were genuine.s'^ It may have been observed that the distinction between homologation and adoption has not been scrupulously observed in judicial utterances.^" Moreover, the latter term has, in regard to obligations and contracts, been used in other circumstances ^'^ than those now to be dealt with. For adoption ^'^ is here confined to the treating as genuine of a forged signature appearing in a document which concretely embodies a contract. In practice the doctrine is best illus- trated 88" from bnis of exchange and promissory notes. Even within these narrow 'bounds the cases in which negligence is the main element are here excluded, ^^i The matter has been already incidentally treated in commenting on The Bills of the 54th and 55th sections of the Bills of Exchange Act.^^^ Bankers co'dg *"^^ are protected in paying demand drafts and in coUecting crossed cheques by sections 60, 80, and 82 of the same statute. In other circumstances : — 24. Subject to the provisions of this Act, where a signature on a bill is forged or placed thereon without the authority of the person whose signature it purports to be, the =" Equitable Office v. Hong, [1907] "7 Supra, p. 142. Alexander v. A.C. 96. Alexander, 1920 S.C. 327, 331 (nuUity of *" Aoey V. Femie, 1840, 7 M. & W. 151, marriage). It is pointedly taken in Boyd approved in London & Lancashire Life v. Union Bank, 1854, 17 D. 159 ; Brook Ass. Co. V. Fleming, [1897] A.C. 499 ; v. Hook, 1871, L.R. 6 Ex. 89. distinguished in Economic Fire Office, "* 'Supra, p. 108. 1896, 12 Times L.R. 142. "' ' Not a very happy expression in ^'* Supple V. Cann, 1859, 9 Ir. C.L.R. 1. 'a case of this kind,' per L. Deas in *" Supra, p. 180. M'Kenzie, "»<■, 7 R. at p. 846. *" The issue may be ' adopt ' or ''" Not exclusively ; see infra, Muir's ' accredit ' or both — Brown, ^'^ ; Frost ,«»' ; Exrs., "» '. Boyd, infra, "' ; Rathbone v. Glenny, 1833, '^^ See Chap. VIII., infra. 11 S. 574 ; E. GaUoway v. Grant, 1857, ^sa Supra, p. 115 ; 45 & 46 Vict. c. 61. 20 D. 230. 583 xhose just noted. 14 210 HOMOLOGATION Precluded . M'Kenzie v. British Linen Co. forged or unauthorised signature is wholly inoperative and no right to retain the bill or to give a discharge therefor or to enforce payment thereof against any party thereto can be acquired through or under that signature, unless the party against whom it is sought to retain or enforce payment of the bill is precluded from setting up the forgery or want of authority. Provided that nothing in this section shall affect the ratification of an unauthorised signature not amounting to a forgery. °°* It is here recognised that a forged signature cannot be ratified or homologated. But the treatment of it as genuine is recognised as estoppel or personal bar, by the use of the neutral and popularly understood word ' precluded.' The most authoritative case went up from Scotland to the House of Lords.^^^ Collusion, conspiracy, and authority to sign were all dis- proved,^** and the question came to be adoption or not. The so-called bill in question was preceded by another similarly framed and by the forger retired. This second documenit, signed by him as acceptor and forged by him in the names of M'Kenzie and another as drawers and indorsers, was handed to the respondent bank. Three days before the due date the bank notified M'Kenzie of its existence. On the day of dishonour and again four days later the notice was repeated. Four days later still payment was demanded by the bank's agent. Till four days subsequently M'Kenzie remained silent. He then denounced his signatures as forged. The First Division by a majority (Lord Shand dissenting) found in favour of the bank on the somewhat inconsistent grounds of acquiescence (implying antecedent consent to the use of the names) and adoption subsequent to the forgery. The House of Lords negatived both. As to the latter, Lord Selbome L. Ch. remarked : ^*' ' There is no principle on which the appellant's mere silence for a fortnight, ' during which the position of the respondents was in no way altered or ' prejudiced, can be held to be an admission or adoption of liabihty, or ' to estop him from now denying it. What took place during the interval ' was unknown to the respondents ; and it has, in my opinion, no tendency ' to show that in point of fact the appellant then was, or admitted himself ' to be, or intended to become, liable.' The first bill had been retired and the second uttered before M'Kenzie had had a reasonable time to warn the bank. Wherefore Lord Blackburn observed : ' It would be ' quite a different thing if it were proved that M'Kenzie knew that the ' bank had put the second bill with his name on it to [the forger's] credit ' and knew that at a time when he had reason to believe that he would ' be permitted to draw against it. His silence then would certainly ' prejudice the bank. . . . Certainly I think that his not telling the bank '■'* As to ratification of an agent's act, see supra, pp. 157 seq. 586 M'Kenzie v. British Linen Co., 1880, 7 R. 836, rev. 1881, 6 Ap. Cas. 82 ; 8 R. H.L. 8. ^" But see per L.P. Inglis, and see also his Lordship's observations in Powrie v. Louis, 1881, 18 S.L.R. 533. =" 6 Ap. Cas. at p. 92, 8 R. H.L. 9-10. HOMOLOGATION 211 ' on the 15tli of July ^ss nor until the 29th of July that it was a forgery, ' and so letting them continue in the belief that it was genuine, if he ' had not induced it, could not so preclude him, if, as I think was clearly ' the fact here, the bank neither gave fresh credit in the interval nor ' lost any remedy which, if information had been given earUer, they might ' have made available.' ^^s Similarly Lord Watson laid it down that ' the question whether a forged biU has or has not been adopted by the ' person whose signature is forged is in reahty an issue of fact and not " of law. ... It would be a most unreasonable thing to permit a man ' who knew the bank were relying upon his forged signature to a bill to ' he by and not to divulge the fact until he saw that the position of the ' bank was altered for the worse. But it appears to me that it would ' be equally contrary to justice to hold him responsible for the biU because ' he did not tell the bank of the forgery at once, if he did actually give ' the information, and if when he did so the bank was in no worse position ' than it was at the time when it was first within his power to give the ' information.' 5^" His Lordship expressly approves, as part of Scots Law, of the ' carefully chosen language by Lord Wensleydale in the case ' of Freeman v. Cooke ^^^ in defining estoppel.' Lord Watson in the same opinion narrates and comments on the Earlier Scots earher Scots cases. Briefly stated, in one of them there was sufficient' averment of expUcit acknowledgment of the forged signature ; ^^^ in two others there was no averment except of silence ; ^^^ and between these there were three cases in which silence and other suspicious circum- stances were followed by the absconding of the forger in the interval, and injury to the creditor was thus ' wiKuUy ' caused.*'* ' The proposition ' [in a coimter-issue] is — because on former occasions a party took no ' notice of intimations relative to certain bills which were forged, con- ' sequently he is responsible for all the forgeries of his name that are ' made by the same party and on the same bank. I am not aware of ' any authority for that. ... It does not appear that this person ever ' saw the forgeries on the other bills.' *'^ But the relation may savour of coUusion (though not necessarily),*'* if with regard to an earher bill, which the defender knew to be forged, he had given his friend money to retire it.**' Mere reference (in a letter sent by a bank during the *'* The day he received notice of the Findlay o. Currie, 1850, 1.? D. 278; Ur- seoond bill. quhart o. Bank of Scotland, 1872, 9 S.L.R. =»» 6 Ap. Gas. at p. 101, 8 R. H.L. at 508. (This last, if put solely on silence, p. 15. is overruled by M'Kenzie, but there was ="<' 6 Ap. Gas. at p. 109, 8 R. H.L. at proof of collusion in a series of forgeries. ) p. 21. ^°' Per L.P. M'NeUl in Boyd, supra. ^" 2 Ex. 654 ; supra, p. 2. ' Where is the duty on a party to inform ^'^ Brown v. British Linen Go., 1863, ' against his brother ? ' ibid. 1 M. 793— a narrow case. =" Morris v. Bethell, 1869, L.R. 5 C.P. ="' Boyd V. Union Bank, 1854, 17 D. 47 ; Barber v. GingeU, 1800, 3 Esp. 60, 159 ; Warden v.' British Linen Co., 1863, where the term ' adoption ' is used by Lord 1 M. 402. Kenyon. s»* Maiklem v. Walker, 1833, 12 S. 53 ; "' Urquhart, supra. 212 HOMOLOGATION M'Kemie followed. Adoption inferred. Knowledge imputed ? currency of a bill) to it as signed by the recipient of the letter, with no demand for payment, no statement as to the holder, and no query as to its genuineness cannot raise silence into adoption.^'* In a Colonial case the Judicial Committee distinguished on the facts the question which was discussed in the case of M'Kenzie and similar decisions. There the forgery was committed by a clerk in the bank, which nevertheless sought to make its customer Hable for the loss. The latter first learnt of the forgery from the bank's agent, who requested him (in the supposed interests of the bank, whose chance of recovering any- thing would be gone if the forger were convicted) to keep silence, to which he honestly agreed.^*' ' The ground upon which the plea of estoppel ' rested in these cases *"" was the fact that the customer, being in the ' exclusive knowledge of the forgery, withheld that knowledge from the ' bank until its chance of recovering from the forgery had been materially ' prejudiced. Here an agent of the bank had earher and better informa- ' tion as to the forgeries than the customer himself. . . . The customer ' could not have been reasonably held responsible for a failure on the ' part of the bank's officer to impart his information to the bank, unless ' he had good cause to suspect that such a breach of duty was con- ' templated by the officer and assisted in its conqealment.' ^"^ Adoption is inferred from judicial admission made directly or by plain impUcation ; ^"^ by allowing decree to go out or a charge personally brought home ; ^"^ by passing on the forged writ for onerous considera- tion ; '"* and by conduct after being charged.*"* If the change of position of the creditor be directly attributable to his own delay, silence on the part of the person whose name is forged does not infer adoption ; it has been even mooted that bar cannot arise tiU the latter has seen the forged document.*"^ However that may be, the requisite of knowledge of the blot, important in all cases of bar, is equally so here ; and the question has been raised whether imputed information is sufficient to set the plea on foot. In the case of Muir's Executors v. Craig's Trustees *•" a bond was forged ia the name of a lady as debtor by her law agent. She, knowing nothing thereof, thought it odd that she should be charged income-tax on ' interest,' ^os and asked a brother of the agent — they were her nephews — to find out the reason. He traced the forgery, and was persuaded by the forger to say nothing about it to his aunt. He did not reveal the 598 \i7arden, supra. Cf. the judgment of Best C.J. in Davis v. Bank of England, 1824, 2 Bing. 393, 408, which is not touched by the reversal in 5 B. & C. 1. ^" The culprit absconded. '"» I.e. M'Kenzie and the like. "'"■ Ogilvie V. West AustraUan etc. Corp., [1896] A.C. 257 at p. 268, and see also p. 270. The measure of damages, it the bank had succeeded, would have been its whole loss, not the sum recoverable from the forger, if he had been caught — ibid. «»2 M'Kenzie v. M'Kay, 1825, 3 S. 614 ; Paterson v. Sparrow & Co., 1821, 1 S. 223. "»» Provau V. Gray, 1821, 1 S. 92. «»* Miller v. Little, 1831, 9 S. 328. «»= Frost V. N. of Scotland Banking Co., 1858, 20 D. 1135. «°» M'Arthur v. Paterson, 1825, 3 S. 607. «"' 1913 S.C. 349. *"" As intercepted at the source. HOMOLOGATION 213 crime till after the forger's death. The bondholders pleaded to her action of reduction adoption or at least bar by her actings from maintaining that she had not adopted the forgery. It was held that the knowledge of the nephew employed to make inquiries which incidentally revealed to him the forgery could not be imputed to the pursuer so as to bar her from repudiating the forgery. Lord Dunedin restated the doctrine of bar in such a case thus : ' AVhen you know there is a forgery and when ' you know that the person relying upon that forgery is putting himself ' ia a worse position or losing some remedy which he would otherwise ' have, you are not entitled to keep silence and then to tell him at the ' end of the day, after his position has been made worse by the delay, ' that the signature is forged. ... I very much doubt whether this ' doctrine of adoption by " bar " or " estoppel " could ever be applied, ' not to real knowledge, but to constructive knowledge, which is all ' of course that Miss Muir ever had here.' *"' The nephew who was asked to make inquiry was not an agent to efEect a contract, whose know- ledge might or would be imputed to his principal ; and his knowledge could not be imputed to her.^^" A further illustration of the same doctrine is the rule that a share- Silence where holder, notified by the company of a transfer of his shares — as is fre- duty to speak. quently done — and of its intention to alter its register unless it hears to the contrary, has no duty to reply, and is not barred by his silence from obtaining relief by reinstatement in his property by the company, if the transfer in question turns out to be forged. ^^^ ' I consider it to ' be the right of every person who receives a letter or other document re- ' garding a matter with which he has no concern to destroy that document ■ at once and take no further notice of it ; and to countenance any other ' doctrine might, - 1 think, be productive, of most mischievous results ' and might put honest people to a "vast amount of annoyance, trouble, ' and expense.' *^^ These words were uttered in a case where there were two series of bills — one series extending to thirteen years — with the same names but not all in the same order, and the defender, one of the seeming parties, had on no less than twenty-seven occasions been notified by the discounting bank that a bill sufficiently identified had fallen due. On receiving the latest notice he at once repudiated his signature as «°' At p. 355. There follows a criticism "" Per L. ArdwaU L.O. approved in the of the words ' agent to know ' used by Inner House in British Linen Co. o. Cowan, Lord Halsbury in Blackburn, Low & Co. v. 1906, 8 F. 704, 708, 710. The same is true of Vigors, 1887, 12 Ap. Gas. at p. 537. tout goods not ordered. Silence here is very different from no reply to an offer — Serruys «" 1913 S.C. at pp. 356, 358. As to ^ ^^ ^ ^^^^.^ j2th Feb. 1817, F.C. 287 ; imputed knowledge, contrast Oakes v. j^^ j, ^^^„ ^824, 3 S. 375 ; Watson & Turquand, 1867, L.R. 2 H.L. 325, with In ^^ ^ O'Reilly, HiU & Co., 1826, 4 S. 475. re David Payne & Co., [1904] 2 Ch. 608, ^^ ^^ ^^^ difference between silence and and cases there. As to having paid on a ^^^ suppression of a fact, see Turner v. prior forgery— Morris v. Bethell, \ Gxeea, [1895] 2 Ch. 205 (knowledge of a "1 Barton v. L. & N.W. Ry. Co., 1889 fact, unknown to the other side, in a case 24 Q.B.D. 77, and next case. of compromise). 214 HOMOLOGATION forged, and in fact all of the bills were forged in his name. None of the contentions put forward by the bank and edited by Lord Kyllachy were in his Lordship's opinion valid, viz. that the defender knew or was bound to know of the forgeries ; that, that being so, he was bound to anticipate indefinite recurrence thereof ; that, that being so, he was bound to give notice to the bank of his suspicions ; that, not having done so, he accredited the forger to the bank as a person who had his authority in time coming to discount biUs bearing his signature. In this last opinion his Lordship reiterated his view ^^^ that acquiescence in the past did not necessarily involve acquiescence for the future. Hetioaction Jt is obvious that there is a material and logical distinction between homologation of an existing obligation, which might be repudiated, and the adoption of a nulhty. The first is a confirmation, the second a new and the only obhgation. And the result has been said to be that, while the ratification or homologation retroacts to the date of the transaction confirmed, adoption cannot do so.*^* But there seems to be no sufficient reason why it should not, if such be the natural inference from the whole circumstances ; *^^ and this seems to be the sense in which Lord Black- burn's words should be understood. *i* ' Even though it was not made ' out that the signatures were authorised origiaaUy, it still would be enough ' to make M'Kenzie liable, if, knowing that his name had been signed ' without his authority, he ratified the unauthorised act. Then the maxim ' " Omnis rahhabitio retrotrdhitur ei mandato priori eguipa/ratur " would ' apply.' Thus it would probably be held in cases of bills and notes that hability for interest and expenses would run as from the due date and not from the actual or presumed date of the adoption. «" In Carron Co. v. Henderson, 1896, «" B. Pr. (10th ed.), s. 27. 23 R. 1042. «" 1 B. Com. 140 ; GaU v. Bird, 1855, ' «" In M'Kenzie v. British Linen Co., 17 D. 1027 ; Dickson, Evidence, s. 866. supra, 6 Ap. Cas. at p. 99, 8 R. H.L. 14. CHAPTER VII HOLDING OUT This term is commonly confined to the law of agency and of partnership, in agency and the latter of which is largely founded on the former, and in this matter partnership, closely so. It is in strict conformity with, and an excellent example of, the doctrine of personal bar or estoppel as set out in the beginning of this volume.^ Someone is barred or estopped from setting up in evidence the truth or actual fact, on the groimd that by words or conduct he has misled — though innocently enough — another person who has conse- quently changed his position. The alleged principal or partner has by his words or more frequently by his conduct, and particularly by a course of dealing, held out to a third party someone as his agent or partner,^ or allowed the latter to pose as such.^ Really there was no such mandate or the authority had been overstepped ; really there was no contract of society ; but equity steps in and feigns a mandate or contract, on the ground that every man must be responsible for the natural consequences of his acts or omissions ; and also usually on the ground * that where one of two innocent parties must suffer from the misconduct of a third party, he is Uable who put it in the ^ower of the latter to act as he did. It is something more than estoppel by negligence, demanding, as it does, affirmative proof of conduct.* The issue, in brief, is whether the alleged principal or partner did induce by his own act or conduct the third party to believe that the agent or quasi--pa,itneT had authority to bind him in the transaction.* The rules now to be described are applications of a wider doctrine The which was expounded in a case ^ where corporation stock was transferred doctrine. 1 Siipra, p, 2, for the English definition tion ; Arnold v. Cheque Bank, 1870, 1 accepted in Scotland. , C.P.D. at p. 587. See in this relation, ' Hazard v, Treadwell, 1722, 1 Stra. Vickers u. Hertz, 1871, L.R. 2 So. Ap. at 506 ; Summers v. Solomon, 1857, 26 p. 115. .Iy.J. Q.B, 301 ; Jetley v. Hill, 1884, 1 Cab. * Bailey v. House, 1915, 31 T.L.R. 583 & El. 239 ; Barrett V- Deere, 1828, Mood. & (authority given by inadvertence). 51. 200. ° Todd v. Robinson, 1825, Ry. & M. ' Levita's case, 1870, L.R. 5 Ch. 489 ; 217. London Freehold Co. v. L. Suffield, [1897] ' Sheffield Corp. u. Barclay, [1905] A.C. 2 Ch. 608. 392, and see p. 403, where it is pointed out ^* First taken by Ashurst J. in Lick- that the duty of a corporation to keep barrow o. Mason, 1787, 2 T.R. at p. 70, registers of stocks correct is owed only tp but requiring to be used with discrimina- the registered stockholders, 215 216 HOLDING OUT Do. from holders by forgery to a bank and by it to others, the stock being in both cases registered. The true owner recovered against the corpora- tion, and it was held entitled to be indemnified by the bank. Lord Halsbury « laid it down that ' it is a general principle of law, when an act is done by one person at the request of another, which act is not in itself manifestly tortious to the knowledge of the person doing it, and such act turns out to be injurious to the rights of a third party, the person doing it is entitled to an indemnity from him who requested that it should be done.' And Lord Davey, coming closer to the case in question, observed : ^ ' Where a person invested with a statutory or common-law duty of a ministerial character is called upon to exercise that duty on the request, direction, or demand of another (it does not seem to me to matter which word you use), and without any default on his own part acts in a manner which is apparently legal but is in fact illegal and a breach of duty, and thereby incurs hability to third parties, there is implied by law a contract by the person making the request to keep indemnified the person having the duty -against any liability which may result from that exercise of the supposed duty. And it makes no difference that the person making the request is not aware of the invaUdity in his title to make the request or could not with reasonable diligence have discovered it.' ^^ In a Scots case,ii in which a lessee of machinery, who was not the agent of the true owner, was held not entitled to hold himself out as such agent, so as to transmit to a third party an alleged customary lien over it, Lord Low and Lord Kinnear quoted certain dicta of Lord Herschell's in an Enghsh case ^^ as fundamental : ' The general rule of the law is, ' that where a person has obtained the property of another from one who is dealing with it without the autho^;ity 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 behef that an unquestionable title thereto is being obtained, unless the person taking it can show that the true owner has so acted as to mislead him into the belief that the person deahng with the property had authority to do so. If this can be shown, a good title is acquired by personal estoppel against the true owner. There is an exception to the general rule, however, in the case of negotiable instruments. Any person in possession of these may convey a good title to them, even when he is acting in fraud of the true owner, and although such owner has done nothing tending to mislead the person taking them.' ' P. 397, quoting Dugdale v. Lovering, 1875, L.E. 10 C.P. 196. » P. 399. ^^ His Lordship was inclined to think that this amounted to the guarantee in Starkey v. Bank of England, as to which, see pp. 170 seq. The decision of Lindley J. in Anglo - American Telegraph Co. v. Spwling, 1879, 6 Q.B.D, 188, is overruled. See also Hambro v. Bumand, [1904] 2 K.B. 10, 26, per Mathew L.J. " MitcheU v. Heys & Sons, 1894, 21 K. 600, 604, 610. The cases there cited, so far as germane to personal bar, are mostly cited elsewhere in this book. '^^ London Joint Stock Co. v, Simmons, [1892] Ap. Cas 201 at p. 215. HOLDING OUT 217 I. Agency In the law of principal and agent it is not usual that the doctrine Actual and of holding out appUes to the case of one who has no special mandate to "apparent) act for another,!* and there the doctrine of ratification, as already authority, i ; described," may well come into play. The usual case is that in which employment or mandate exists but is limited in scope, and the agent rides on the top of his commission and beyond it. There emerges the well-worn distinction between the actual authority or instructions, which are binding as between the principal or master and the agent or servant, and the apparent or ostensible authority on which third parties dealing honestly and without negligence are entitled to rely and act accordingly. It is true that vigilantihus non dormientibus jura subvewiunt ; but it is here always a question of fact — and it may be of many concurrent facts — whether the conduct of the principal in doing something himself or allowing another to do it for him can be reasonably held to have lulled the wakeful to sleep. The general doctrine was put thus by Lord Cranworth : i° 'No one can origin of become the agent of another person except by the will of that other *S™°y' person. His will may be manifested in writing or orally or simply by placing another in a situation in which, according to ordinary rules of law, or perhaps it would be more correct to say, according to the ordinary usages of mankind, that other is understood to represent and act for the person who has so placed him ; but in every case it is only by the will of the employer that any agency can be created. This proposition, however, is not at variance with the doctrine, that where one has so acted as from his conduct to lead another to believe that he has appointed someone to act as his agent, and knows that that other person is about to act on that behalf, then, unless he interposes, he will, in general, be estopped from disputing the agency, though in fact no agency really existed. It is, however, necessary to bear in mind the difference between this agency by estoppel, if I may so designate it, and a real agency, however constituted, i** Another proposition to be kept constantly in view is that the burden of proof is on the person dealing with anyone as an agent, through whom he seeks to charge another as principal. He must show that the agency did exist, and that the agent had the authority he assumed to exercise, or otherwise that the principal is estopped from disputing it.' " On the question of fact whether one " Supra, pp. 157 seq. was agent or sub-contractor, see Smith v. ^^ ^^ p^^j^ ^ i^g,ak, 1863, 33 L.J. Ch. Scott & Best, 1881, 18 S.L.B. 355 ; and ^gg ^^ ^ ^gj ^-^ Lordship was in a as to the question whether an agent had m^jjority in the judgment, but this does not acted not as such but as for HmseM—Hay- ^g^^.^ ^^^ doctrine here quoted, man & Sons v. American Cotton Oil Co., 1907, 45 S.L.R. 207 ; Paterson v. Paisley i' See the distinction elaborated in Union Bank, 1837, 16 S. 71 ; North of Scarf v. Jardine, 1882, 7 Ap. Cas. 345 ; Scotland Banking Co. v. Behn, MoUer & infra, p. 248; and followed in Jones v. Co., 1881, 8 R. 423. Ashwin, 1883, 1 Cab. & El, 159. 218 HOLDING OUT General and special^ agency. Illustfated. The distinction between general agency and special agency is of doubtful value even in tie question of what may be fairly implied by employment in different capacities ; and no attempt need here be made to discriminate between them or to follow the decisions into the question of the normal scope of each class of agent or servant.^' There is doubtless the practical difference that the onus of proof of the ' agency by estoppel ' wiU he more Ughtly on one who can point to an extensive authority undoubtedly existing and is not sufficiently met by a secret reservation in some detail of the emplojanent, than on one who can only found an admittedly narrower mandate, concerning the actual scope of which he should have made inquiry.^' The distinction is illustrated by contrasting two cases which went to the House of Lords. In one/^ funds of a trust, which were in the hands of a broker to sell and reinvest, were by him put to his overdrawn account with the bank in which the trust and he individually were ahke customers. The bank was not in collusion and was held not to be puts on its inquiry as to the broker's mandate by the mere fact that the broker's accoimt was in a ' chronic condition ' of moimting indebtedness. ' When a broker or other agent entrusted with the possession and apparent ' ownership of money, pays it away in the ordinary course of his business ' for onerous consideration, I regard it as settled law that a transaction ' which is fraudulent as between the agent and his employer will bind ' the latter, unless he can show that the recipient of the money did not ' transact in good faith with his agent.' 2" In the other case,^^ American shares were transferable only on the surrender and cancellation of the certificates by an indorsement thereon. The form of indorsement was a transfer for value received, blank, and with power of attorney. The executors of the owner of certain shares, desiring to get registered, signed the transfers blank and sent them to their broker for that purpose. He fraudulently deposited the indorsed certificates with the appellant bank, which took them in bond fide and without notice as security for its advances to the broker. In neither country are transfers so signed by executors ' in order ' or good as a security. It was held that the conduct of the executors was consistent with an intention either to sell or to pledge or to get registered, and therefore did not estop them from setting up their title against the bank, which ought to have inquired into the broker's authority. ^^ A bank may safely honour cheques signed by directors for a customer company according to a form sent by them to the bank, without being bound previously to inquire whether the signers have been 1' The Scots cases are collected in Gloag, Contreicts, 194 note ; and the English cases in Smith's Iieading Cases svi voce Armory v. Delamirie ; Addison v. Ganda- sequi. " Morrison v. Statter, 1885, 12 R. 1152. " Dunlop's Trs. v. Clydesdale Bank, 1891, 18 R. 751, aff. [1893] A.C. 282, 20 R. H.L. 59. 2" Per L, Watson at pp. 289 and 61 ; see also per L. Herschell. 21 Colonial Bank v. Cady, 1890, 15 Ap. Cas. 267. ^2 See also Jacobs v. Morris, [1902] 1 Oh. 816, 828. HOLDING OUT 219 duly appointed.*^ TMs was laid down in a case where there had been no meetings of shareholders, no appointment of directors, and no appoint- ment of the so-called secretary who sent the forms and specimen signatures. Where inquiry has elicited the scope of the authority, it cannot be cur- tailed, in a question between the principal and persons dealing with the agent, by secret or uncommunicated instructions.^* The principal ' has only himself to thank for his imprudence in annexing to the authority ' a condition on a separate piece of paper addressed to another person ' which never came to the hands of the man who was empowered to act ' on this.' ^^ But the third party will be bound by the terms of an authority — a power of attorney — tendered to him, but not read by him owing to his trusting to the assurances of the agent. ^® . ' Per procuration ' (j>.j3.) does not necessarily mean that the act in question is -done under the procuration. It means ' I am an agent not having any authority ' of my own.' Consequently inquiry should be made in the inception of a course of deahng, not necessarily on each occasion thereafter.^' In the case cited the question at issue was thus put : ' Has the party ' who is charged with liability under the instrument or contract authorised ' and permitted the person, who has professed to act as his agent, to ' act in such a manner and to such an extent that, from what has occurred ' pubhcly, the pubUc in general would have a right to reasonably conclude, ' and persons deahng with him would naturally draw the inference, ' that he was a general agent.'-^* The course of dealing, as between principal and agent on the one Course of hand and the third party concerned or customers generally on the other,^* "^ "'^' is the main evidence on which personal bar arises. When this conduct is alleged to poiut to authority extended beyond the ordiaary functions of the servant or other agent employed, the onus hes on the party pleading the extension of authority to prove it. The accepted treatises on the Domestic Eelations may be consulted en the prepositura and the normal 2' Mahony v. E. Holyford Mining Co., " Smith v. M'Guire, 1858, 3 H. & N. 1875, L.R. 7 H.L. 869, 899, per L. Hatherley, 554. cited by Stirling J. in Farquharson Bros. v. le p^^ Pollock C.B. in Smith, supra, at King & Sons, [1901] 2 K.B. 729 ; followed ^ ggQ. Similarly per Best C.J. in Gilman in Paoiac Mines v. Arbuthnot, j;i917] A.C. ^ Robinson, 1825, Ey. & M. 226. Cf: as to 607, 616. This ' solenniter ' doctrine is merchants and solicitors dealing with bills further illustrated in In re County Life ^^^ jj^^eg — Lg^y ^ Pyne, 1842, Car. & Ass. Co., 1870, L.R. 5 Ch. 288. jlar. 453. " In re Bentley, 1893, 69 L.T. N.S. 204 ; ,.„.,, ^^ , • v, „ut i,„„„ t„ Whitehead v. TncUt, 1812, 15 East 400, ^J' T^e latter being brought home to 408 ; D. Beaufort v. Neeld, 1845, 12 CI. & the third party m question, for holdmg F. 248, 290 ; Trickett .. Tomlinson, 1863, ' "f. *° ^^e world is a loose expression- 19 ma TVT o cfiQ Dickinson v. Valpy, 1829, 10 &. & 0. 128 ; Id Cli. JS.b. bbJ. Farquharson Bros. v. Kmg & Co., [1902] ^^ Per L. Lindley. A.C. 325, 341 ; Hazard v. TreadweU, 1730, *« Jacobs V. Morris, supra, ^^. The course 1 Str. 506 ; Summers v. Solomon, 1857, 26 of dealing was irrelevant, for he had shown L. J. Q.B. 301. In a speculative business it doubt as to the scope of the authority. will not do to say that the actual authority See also Spooner «. Browning, [1898] only held when the market was favourable 1 Q.B. 528, 539. —Whitehead v. Tuckett, "^ 220 HOLDING OUT Borrowing. Unauthorised acts in rem versa of principal. relations of master and servant.^" The simplest cases are those in which goods are bought and prices are paid at the counter or cashier's box or counting-house ; ^^ and in the employment of law agents in litigation.^^ The most difficult cases arise in mercantile transactions, and in particular regarding the power to borrow, and the power to deal with negotiable instruments. ' Where an agent is clothed with ostensible authority, ' no private instructions prevent his acts within the scope of that authority ' from binding his principal. Where his authority depends, and is known ' by those who deal with the agent to depend, on a written mandate, ' it may be necessary to produce or account for the non-production of ' that writing, in order to prove what was the scope of the agent's ' authority.' ^^ The power of factors (mercantile agents) to borrow and impledge goods or the symbols of goods is treated on a later page. Apart from that class of agents, the authority should be verified by inquiry.^* A series of cases relate to agency with no power to bo"rrow where the unauthorised act redounds, wholly or partially, to the benefit of the principal. In the earliest — a Scots case ^^ — the agent at a branch establishment had no express power to borrow money for the business, but had power to grant bills per procuration of his employers. He borrowed money, granted such a bill, and used the money to postpone discovery of frauds on them by diminishing their debt to the bank caused by his defalcations. The Lord Ordinary (Lord Eutherfurd Clark) held (1) that power to borrow for the business was implied by the fact that he was sole representative at the branch, and in the same position (ia this respect) as a partner, and (2) that, the money having been employed for behoof of his principals, they were Uable on the bill. The Second Division reversed, denying the analogy and relying on the replenishment of the firm's account as not being intended so much for its benefit as to screen the defalcations. In the •earhest English case ^^ the facts were as nearly as possible the same, but it was held that, though, as will be seen presently,^' the holder of the cheque in question should have ehcited the scope of the fraudulent manager's mandate, he was entitled to payment from the employers, as the money had found its way into ^'' Fraser on Husband and Wife ; and on Master and Servant. '1 Barrett v. Deere, 1828, Moo. & M. 200. 32 Young V. M'Gill, 1823, 2 S. 346 ; Grant v. Wishart, 1845, 7 D. 274 ; Wallace V. Miller, 1821, 1 S. 40. As to dominxis litis, see Robinson v. Ross, 1814, Hume 352 ; Scott V. Donaldson, 1831, 10 S. 107 ; Stevens v. Burden, 1823, 2 S. 507. '^ Per L. Blackburn in National Bolivian Co. V. Wilson, 1880, 5 Ap. Oas. 176 at p. 209 ; and see Hambro v. Bumand, [1904] 2 K.B. 10, 26, per Mathew L.J. " Hamilton v. Western Bank, 1856, 19 D. 162 ; c/. Maokinnon v. Max Nanson & Co., 1868, 6 M. 974 ; Martinez y Gomez V. Allison, 1890, 17 R. 332 ; and see Hamil- ton V. Dixon, 1873, 1 R. 72 ; Colvin v. Dixon, 1867, 5 M. 603 ; Bovill v. Dixon, 1856, 3 Macq. 1. "^ Sinclair, Moorhead & Co. v. Wallace & Co., 1880, 7 R. 874. »« Reid V. Rigby & Co., [1894] 2 Q.B. 40, following the principle in Marsh v. Keating, 1834, 2 CI. & F. 250 (' following money,' as to which see Banque Beige v. Hambrouck, [1921] 1 K.B. 321, and cases there). " Infra, p. 223. HOLDING OUT 221 their possession and had been used for their benefit. In a later case ^* an agent not entitled to borrow for his principals did so frequently from the plaintiiis on the representation that he was so entitled. -Part of the money he kept ; part he paid to the principals. This part they had to disgorge. ' Where money is borrowed on behalf of a principal by an ' agent, the lender beheving that the agent has authority, though it ' turns out that his act has not been authorised or ratified or adopted ' by the principal, then, although the principal cannot be sued at law, ' yet in equity, to the extent to which the money borrowed has in fact ' been apphed in pajdng legal debts and obhgations of the principal, ' the lender is entitled to stand in the same position as if the money ' had originally been borrowed by the principal.' ^' ' Those who pay legiti- ' mate demands which they are bound in some way or other to meet ' and have had the benefit of other people's money advanced to them ' for that purpose shall not retain-that benefit so as in substance to make ' those other people pay their debts.' *" One of the points founded on LQ this case was that the lender did not know that the agent had no authority to borrow. In the next case *i the lending company did know that the managing owner of the defendant company was expressly prohibited from borrowing money on its behalf unless specially authorised to do so. The money lent to him was by him applied in dis- charging his company's legal debts. It was held by a majority that the lending company was entitled to recover from the latter company. And Buckley L.J. deduced the following rules from the decisions : *^ ' First, if a corporation, which has no power to borrow, or has exhausted ' its power of borrowing, does nevertheless borrow or purport to borrow, ' then such borrowing being ultra vires creates neither at law nor in ' equity any debt for money lent. But, secondly, if such a corporation, ' having incurred debts, procures from someone, who is wilUng to find ' it, money which it employs iii paying off these debts, that is a legitimate ' operation, and the transaction is not ultra vires ; for to the extent to ' which the money found by the lender is employed in discharging the ' debts of the corporation there is in effect no further borrowing, because ' the money is employed in discharging debt, and there is therefore no ' increase of the corporation's indebtedness. And, thirdly, in that class ' of case knowledge by the person advancing the money of the absence ' of authority to borrow is not material.' *^ It thus appears that the 3« Bannatyne v. Maclver, [1906] 1 K.B. v. CunUffe Brooks & Co., 1882, 22 Ch. D. 103, 109, 111. 61, 9 Ap. Cas. 857, 29 Ch. D. 902 ; '* Pm- Romer L.J. Reid ; Bannatyne, supra ; Bs. Wenlock *» See British America Elevator Co. v. v. River Dee Co., 1887, 19 Q.B.D. 155. Bank of British N. America, [1919] A.C. See also Birkbeck etc. Soc, [1912] 2 Ch. 658. 183 ; Brougham v. Dwyer, 1913, 108 L.T. « Reversion Fund and Ins. Co. v. Maison 504 ; National Permanent Soc, 1869, L.R. Cosway, [1913] 1 K.B. 364. 5 Ch. 309, 313. " Cork & Youghal Ry. Co., 1869, « At [1913] 1 K.B. 373. As to use of L.R. 4 Ch. 748 ; Wrexham etc. Ry. Co., the word ' subrogation,' see p. 377. Con- [1899] 1 Ch. 440 ; Blackburn Building Soc. trast the converse case in which the 222 HOLDING OUT Bills and notes. Procuration signatures. Lord Ordinary's judgment in Sinclair's case (on the second ground at least) falls to be preferred to the judgment of the Division. With regard to bills and promissory notes, the Bills of Exchange Act 1882 ** prescribes as foUows : — Section 25. — A signature by procuration operates as notice that the agent has but a limited authority to sign, and the principal is only bound by such signature if the agent in so signing was acting within the actual limits of his authority. In other words, the actual and ostensible authority are one, and persons dealing with the agent are put ,on their inquiry.*^ They may find that the use of bills or notes is necessary for the conduct of the principal's business, and may safely rely on that necessity, as in the case of a business carried on by private trustees for creditors,** or of an independent branch of a business. ' If a person employs another as ' an agent in a character which involves a particular authority he cannot ' by a secret reservation divest him of that authority.' *' They may find that authority exists to deal on credit, not for ready money,** or, conversely, to receive money in cash or cheques but not to indorse away the latter ** — but the necessity must be proved ^^ — or that authority to draw does not necessarily involve authority to indorse.^^ But such questions cannot be withheld from a jury or a judge in a proof ; ^^ and the plea of implied authority is open only to an onerous bond fide creditor.*^ The most difficult cases arise where different busi- nesses are carried on by the same person simultaneously.^* Evidence of usage of trade ^^ or course of dealing ^^ is competent, but will ohly be admitted if explicitly and satisfactorily averred ; ^^ and it is not enough to aver that the alleged principal had Imowledge or principal could not recover — James, Wood & James v. Telford, 1824, 2 S. Ap. 219, revg. 1 S. 290, Hume 44. " 45 & 46 Vict. c. 61. ** Crumplin v. London J.S. Bank, 1914, 109 L.T. 856 ; Stagg v. Elliott, 1862, 12 C.B. N.S. 373, 381. " Murray v. CampbeU & Co., 1827, 6 S. 147, Hume 44, 50 ; Fenn v. Harrison, 1790, 3 T.R. 757, 4 T.R. 177. " Edmunds v. BusheU, 1865, L.R. 1 Q.B. 97, 99, per Cockbum L.C.J. ; Milne v. Harris,.Jones & Co., 1803, M. 8493. ** International Sponge Importers v. Watt & Sons, 1911 S.C. H.L. 57 (traveUer). " Charles v. BlackweU, 1877, 2 C.P.D. 151 ; Murray v. E. India Co., 1821, 5 B. & Aid. 204 ; Davidson v. Stanley, 1841, 2 Man. & G. 721 (farm bailiff) ; Cameron u. TiUyard, 1871, 8 S.L.R. 322 (traveUer) : London J.S. Bank v. Stewart & Co., 1859, 21 D. 1327 (shipmaster) ; Miller & Co. v. Potter, 1875, 3 R. 105 (do.). =» Cunningham & Co., 1887, 36 Ch. D.532. =1 Prescott V. Flinn, 1832, 9 Bing. 19 (confidential clerk ; authorised on one occasion, and his indorsations passed twice) ; Robinson v. Yarrow, 1817, 7 Taunt. 455 (acceptance accrediting the draft, not the indorsement). '2 Ibid. 5' Paine v. Bevan, 1914, 110 L.T. 933 (payment of bets). =* Bank of New South Wales v. Goulburn Proprietary, [1902] A.C. 543, founding largely on Dunlop's Trs. v. Clydesdale Bank, supra, ^''. *^ Anderson v. Buck & Holmes, 1841, 3 D. 975 ; Trueman v. Loder, 1840, 11 A. & E. 589. ^' Llewellyn v. Winckworth, 1845, 13 M. & W. 598, distinguishing Cash v. Taylor, 1830, 8 L.J. K.B. 262 ; OdeU v. Cormaok Bros., 1887, 19 Q.B.D. 223 (knowledge and course of dealing not proved). " Swinburne & Co. v. Western Bank, 1856, 18 D. 1025. HOLDING OUT 223 should have had it.^® An agent who is authorised by his mandate to make contracts of sale and purchase, charter vessels, and employ servants, and as incidental thereto to do certain specified acts, includ- ing indorsement of biUs but not including the borrowing of money, cannot borrow on behalf of his principal or bind him by contract of loan, such acts not being necessary for the declared purpose of the power. It has been seen that, where an agent accepts or indorses ' per ' pro.,' the taker of a biU or note so accepted or indorsed is bound to inquire into the extent of the authority. But where an agent has such authority, his abuse of it does not afEect a bond fide holder for value.^* Where an agent under his power of attorney possessed impUed authority to raise money by loan for the purpose of carrying on the business affairs entrusted to him, which authority under circumstances of emergency had to be deemed to include power to borrow on exceptional terms outside the ordinary course of business, the lender was held not to be bound to inquire whether in the particular case the emergency had arisen or not, and was entitled to recover from the principal if he lent to the agent bond fide and without notice that the agent was exceeding his mandate.*" The relation of the doctrine of holding out to the practice of crossing cheques. cheques has come before the Courts more than once. In a Singapore case the appellants' cashier presented at the respondents' bank cheques drawn on the respondents in favour of the appellants and crossed gener- ally. In exchange he was handed cheques for the same amounts drawn by the respondents upon other banks and crossed generally. The appellants had by their conduct held out their cashier as having authority to deal with the cheques in this way. The cashier fraudulently paid the cheques handed to him to his own banking account and misappropriated the proceeds. It was held that the original cheques were paid by the exchanged cheques within the meaning of the Bills Code, section 79 (2) ; " but that the appellants were estopped from denying the authority of their cashier to receive payment in that manner, and were not entitled to recover damages from the bank.''^ In another case ^^ the action was an attempt of a principal to throw the consequences of the dishonesty of his clerk (afterwards manager) on a bank which dealt in the ordinary course of business and in perfect good faith. «* This employee of the plaintiff had authority to draw and sign cheques (crossed or uncrossed) ^« Ibid. The decision in Robb v. Gow and the Bills Cede, o. 24, supra, p. Bros., 1905, 8 F. 90, seems doubtful, looking 209. to the relationship of the parties. " Relating to payment othersvise than _ _ to a banker. =• Bryant, Powis & Bryant v. La Banque ,, j^^^^^ ^ ^^ ^ g^^ jj^j ^^^^ ^^^ du Peuple, [1893] A.C. 170. [1913] A.C. 847, as a case of two innocent "" Montaignac v. Shitta, 1890, 15 Ap. persons suifering from the fault of another Cas. 357 (money obtained from native person. merchant, bills not being given). See a «» Morison v. London, County and West- very extensive power covering forgery — minster Bank, [1914] 3 K.B. 356. Union Bank v. Makin, 1873, 11 M. 499 ; " P. 377. 224 HOLDING OUT per pro. for the purposes of his master's business. During a long course of years he, in that style, drew and sometimes indorsed cheques on the plaintiff's bank and fraudulently paid them iuto his own bank — the defendants — who collected the contents fron the other bank. The plaiatiff pleaded the 25th section of the Bills of Exchange Act ; «5 but was successfully met by the answer that that section referred only to action on a current bill or note, not on one which had been discharged. The effect of section 25 is that, notwithstanding the negotiable character of the instrument and the obligations upon the signatory to such an instrument to holders and more particularly to a holder iu due course, and notwithstanding the authority given by the principal to the agent to sign negotiable instruments per procuration so as to bind the principal, the principal is not liable upon the instrument, even to a holder in due course, if the agent in so signing has exceeded the actual hmits of his authority.' ** In regard to the crossed cheques signed after the first year or two, any suspicion the defendants ought to have at first had must be held to have been lulled to sleep by the ' plaintiff 's conduct,*' and they were protected, as having acted without negligence, by the 82nd section of the Act, which appHes to instruments after they have been discharged and frees a bank from HabiHty in such a case as was then before the Court. And with regard to cheques collected within the first year or two there had been ratification by the plaintiff's conduct, he having put the investigation of accounts unreservedly into the hands of accountants who could not but have had knowledge of the facts.** ' I am not sure that in that case we can altogether rely upon the doctrine ' that for this purpose means of knowledge are not the same as know- ledge . . . for here the plaintiff put the accountants in his place.' *' Miscellaneous. Personal bar cannot affect one who knew nothing of the agency and therefore did not rely on it ; '" nor be set up by a statement or repre- sentation which the principal himself could not competently have made.'^ The question may turn out to be whether a transaction was carried through as agent or as middleman. Thus, an American firm openly held out a Scotsman as exclusive agent for the sale of its goods in Scot- land. Prima facie, therefore, sale of a parcel of these goods was in. pursuance of this authority, which was known to the purchaser. But it was proved that the agency was conducted by sale to the agent on certain terms and resale by him at his own risk, and that he sold ' spot ' at a price lower than the market price and avowedly on the ground that 65 Supra, p. 222. 301 ; British Mutual Banking Co. v. " Per L. Beading L.C.J, at p. 367. Chamwood Forest Ry. Co., 1887, 18 Q.B.D. " P- 377. 714, 718 (secretary of company). See °* P- 371. Bamett v. S. London Tramways Co., 1887, 6" Per PhiUimore L.J. at p. 385, ' the 18 Q.B.D. 815, 817 ; distinguished in ■ poUoy of an ostrich to know no more.' Trott v. National Discount Co., 1900, ■"> Farquharson Bros. v. King & Co., 17 T.L.B. 37. See also Mowatt v. Castle [1902] A.C. 325. Steel Co., 1886, 34 Ch. D. 58 (director) ; " Swift V. Jewsbury, 1874, L.B. 9 Q.B. In re Tasker & Sons, [1905] 2 Ch. 587 (do.). HOLDING OUT 225 he was ' hard up ' for money. It was held that he was selling on his own account.'^ With regard to the termination of the ostensible authority in a Termination question with third parties, the problem can scarcely arise where the " ™ °" ^' authority relates to a single transaction or lapses rei interitu or on the ground of supervening illegality. Whether the principal's death or bankruptcy — these being pubhc facts — acts ipso facto or must be notified to those who have dealt with him appears to depend on circumstances." The same is true of the dissolution of a firm which has appointed an agent.'* Supervening insanity of a principal not being a public fact, it seems that the agent and those dealing with him as such may go on and bind the principal or his estate until they are made aware of the change.'^ Whatever be the law in these cases, it is certain that ostensible, hke actual, withdrawal, partial '^ or total, does not become effective in a question with third parties until it has become known to them." A bank knew, though not by official intimation, that on a certain date a foreign firm had withdrawn its authority from its Scottish agent to draw fer 'pro. and generally, and yet thereafter discounted bills drawn by his firm and accepted for his former employers p.p. It was proved that subsequent to the said date the agent had by the foreign firm been allowed to indorse for tbem p.p. foreign bills sent over for payment of his accoimts, and also to indorse cheques p.p. on their account in London. These practices were held not to justify the bank, for the first was only a mode of paying 'the agent, though a loose way of doing so ; and the second appeared to proceed on a special authority. Though the agent repre- sented to the bank that his authority subsisted for the purpose of winding up the connection, the bank ought to have verified the statement.'* Possession of heritage in Scotland may be had in many capacities — Possession by sasine, certain servitudes not requiring sasine, lease, public right, mSida m, dam aut precario ; but the feudal title of ownership rests (Uke some 'i^ereof. inferior rights as well) on registered conveyance. Possession of move- able property, such as goods, may also be held in many different capacities ; but the presumption of law is that the possessor is the owner, and the existence of any subordinate title must be proved, if anyone has an mterest to do so. This ' reputed ownership ' has a taint of double dealing when the possession is said to be ' collusive,' that is, allowed by the true '2 Hayman So Sons v. American Cotton ignorant of the husband's death) ; B. Pr. Oil Co., 1907, 45 S.L.R. 207, 15 S.L.T. 228 ; 1 B.C. 524. 606. '* Friend v. Young, [1897] 2 Ch. 421. " CampbeU v. Anderson, 1829, 3 W. & " Drew v. Nunn, 1879, 4 Q.B.D. 661. S. 384 (principal dying abroad) ; Kennedy " Supra, p. 145. V. Kennedy, 1843, 6 D. 40 (do.) ; Scot v. " Trueman v. Loder, 1840, 11 A. & E. Stewart, 1834, 7 W. & S. 211 (inland) ; 589, supra, ^^ ; Ryan «. Sams, 1848, 12 Life Association of Scotland v. Douglas, Q.B. 460 ; Scarf v. Jardine, 1882, 7 Ap. 1886, 13 R. 910 ; Blades v. Free, 1829, Cas. 345, infra, p. 248 ; Marsden v. City 9 B. & C. 167 ; Haas v. Durant, [1900] and County Ass. Co., 1865, L.B. 1 C.P. 232. 1 Ch. 209 ; Smout v. Ilbery, 1842, 10 M. " North of Scotland Banking Co. v. & W. 1 (widow and tradesmen equally Behn, MoUer & Co., 1881, 8 R. 423. 15 thereof. 226 HOLDING OUT owner so as to mislead creditors to trust to it, by delivery with that intent or taking the risk of their acting on that belief," or by the former owner retaining possession, now only in security. The latter device is usually by a simulate sale, now that normally the property in goods passes on sale completed ; and the Court is set as a task to get at the truth of the transaction by the Sale of Goods Act, section 61 (4), which enacts that ' the provisions of this Act relating to contracts of sale do not ' apply to any transaction in the form of a contract of sale which is ' intended to operate by way of mortgage, pledge, charge, or other ' security.' *" Significance The significance, especially in commerce, of the possession of goods or of the indicia thereof, is recognised by the common law of Scotland in the amplest, and by the customs of England iu a hmited, way, in regard to the present doctrine of holding out. It is given effect to iu cases to which the Factors Acts of last century never applied ; and these Acts presuppose it and gradually, at the instance of bankers and merchants and with reference to certain classes of agents, gave it extended effect. Many of the Enghsh illustrations have no parallel in Scotland, where equitable mortgage by transfer of title-deeds of heritage is not recognised. ^^ But the principles are the same in both coimtries. Where an owner of property gives aU the indicia of ownership to another person with the intention that he should deal with the property, the principles of agency apply, and any hmit which he has imposed on his agent's deaUng cannot be enforced against an innocent purchaser or mortgagee or pledgee who has no notice of the hmit. And if the owner has not only transferred property to an agent or trustee but has acknowledged that the transferee has paid fuU consideration for it, he is estopped from assertiag his equit- able title against a person to whom the transferee has disposed of the property for value. ^^ The owner of company shares handed to an agent the indicia of title, together with a transfer signed in blank, instructing him to borrow not less ^^ than a certaia sum on security of the shares. The agent borrowed a less sum. The lender was held entitled to retain the indicia of title until repayment of the loan. ^ ' An owner who gives ' indicia to an agent and authorises him to deal with such indicia, either '» The law is set out in Gloag & Irvine, »i In re Valletort Co., [1903] 2 Ch. 654, Rights in Security, pp. 236-240, and and authorities there. succinctly in the 10th edition of Bell's ^^ Rinxmer v. Webster, [1902] 2 Ch. 163, Principles to 1313-17. Borthwick v. Grant, 172, 173, citing Brocklesby v. Temperance 1829, 7 S. 420 ; Fraser v. Frisby, 1830, Permanent Building Soc, [1895] A.C. 173, 8 S. 982 ; and in the important English 184 (debenture fraudulently sub-mortgaged case — Freeman v. Cooke, supra, p. 2. In by stockbroker). England the matter is treated in reference «» In Brocklesby, ' not more.' See also to the ' reputed ownership clause ' of the Marshall v. National Provincial Bank, Bankruptcy Act for the time beirig. 1892, 61 L.J. Oh. 465 ; Bentiuck v. London «» 56 & 57 Vict. c. 71 ; Robertson v. HaU's J.S. Bank, [1893] 2 Ch. 120. Tr., 1896, 24 R. 120 ; Rennet t;. Mathieson, «« Fry v. Smellie, [1912] 3 K.B. 282, 1903, 5 F. 591 ; Jones & Co.'s Tr. v. Allan, following Rimmer and Brocklesby, and 1901, 4 F. 374 ; Hepburn v. Law, [1914] S.C. distinguishing France v. Clark, 1884, 918 ; Gavin's Tr. v. Fraser, 1920 S.C. 674. 26 Ch. D. 257. HOLDIN& OUT 227 ' for the purpose of raising money or sale, owes a duty to the persons ' whom he intends to act on such authority to give them notice of any ' hmit that he places on the authority.' ^b Much turns on the nature of the agency. A bank may be justified in paying to the law agent of the holder of a deposit receipt the periodical interest and in handing him a fresh receipt with interest added. But possession by him of the docu- ment is no authority to upUft the contents ; and if he does so by means of a forgery, the bank must suffer, ss To lodge goods in a warehouse in another's name, or in his or the owner's name alternatively, is an authority to the former to sell. " It is different if the agent acts outwith the scope of his employment ; ^^ or if the person contracting did not trust to any authority. Thus, merchants instructed a dock company to accept, as theirs, all transfers and delivery orders signed by C, their clerk. C really had power to make Umited sales to known customers only. He gave deUvery orders in favour of B, who was himself, and as B sold to the defendants, who knew nothing of the merchants or of C. It was held that the merchants were not barred from demanding the value of the goods from' the defendants. It was a case of theft, and the merchants had not been negUgent. ^^ The question of fact for jury or judge is not, which of two people is owner of the goods or of the business, but whether the alleged principal had so conducted himself as to enable the alleged agent to hold himself out as the true owner. ^^ The case of a holder in due course of negotiable security, and especially of scrip, bonds, bills, and notes payable to bearer, is left over for later treatment. ^^ In the contracts of sale on approbation and of sale or return, it is tempt- Sale or return. rag to maintain that where there are no specialties the retailer holds as the wholesale dealer's agent, with option to purchase, and sells or pledges qua owner. '2 In that view there is scarcely room for personal bar or estoppel, for the wholesale dealer has done nothing to mislead third parties, having only surrendered possession.*^ Some support for this theory is afforded by the change of phraseology in the subsection of the 18th section of the Sale of Goods Act deaUng with this matter, and in the other subsections which start with the supposition of a ' contract for the sale of goods,' and from the difficulties which have been found in taking any other '5 Per Vaughan Williams L.J. at p. 289. Act, s. 21, on want of title ; Lamb u. See on pp. 293, 295 obs. on the term Attenborough, 1862, 1 B. & S. 831. estoppel. The rule goes beyond agency — '"' Bamazotti v. Bowring, 1859, 7 C.B. Perry - Herrick v. Attwood, 1857, 2 De N.S. 851; Dyer v. Pearson, supra, per G. & J. 21. Abbott C.J. ; Henderson & Co. v. Williams, »« Forbes's Exrs. v. Western Bank, 1854, [1895] 1 Q.B. 521, 527. 16 D. 807. " Infra, p. 262. *' Pickering v. Busk, 1812, 15 East 38, ^^ Sale of Goods Act, s. 18 (4) ; Ex parte esp. per L. EUenborough on ostensible White, 1870, 6 Ch. 397 ; SiporteWingfield, authority. 1879, 10 Ch. D. 591. The authorities on *' Coleman v. Riches, 1855, 24 L.J. C.P. the question whether the condition of 125 ; Dyer v. Pearson, 1824, 3 B. & C. 38 ; return is suspensive or resolutive are Stuart V. M'Gregor & Co., 1829, 7 S. 622. collected in Brown, Sale of Goods, 128-9. ?» Farquharson Bros. v. King & Co., »' Weiner d. Gill, [1905] 2 K.B. 172, 181, [1902] A.C. 325, applying Sale of Goods approved [1906] 2 K.B. 574. 228 HOLDING OUT view. But the decisions, both prior and subsequent to the date of that Act, predicate an original agreement to sell, subject to conditions, followed by sale and the passiag of the property when the retailer ' signifies his ' approval or acceptance or does any other act adopting the transaction,' includiag retention beyond a fixed date or beyond a reasonable time. There is the further question whether on the latter theory the second subsection of the 25th section of the Act applies, as its words (on that supposition) seem to do.^* On the one view a principal may be barred ; on the other view a seller who has given up possession but not ownership may be estopped. The much-canvassed decision in Brown v. Man '^ may be justified if at all on the ground adopted by Lord Kinnear in a later case,^* where he said that ' the maiu ground of judgment was that by such a contract all the substantial rights of ownership pass to the buyer. He has an option to return the goods within a stipulated time, instead of paying the price. But whenever he exercises any right of property, as by seUing or pledging the goods, the option ceases, and accordingly the title he may give to third persons dealing with him in good faith does not depend on any authority derived from" the vendor on sale and return but upon his own absolute right of property.' On the theory of agency and eventual sale this appears to be a bold extension of reputed ownership. On the theory of original agreement to sell and eventual purchase, the Court is asked to defeat what the example of sale or return only illustrates, viz. the intention of the parties. In dis- criminating between sale and return and other similar contracts, it must be observed that ' it is of the essence of a contract of sale or ' return that the person entrusted with the article shall have the right ' for the stipulated period to keep the goods and either sell them or ' make up his mind to become the purchaser himself.' ^' The modem cases do not add any doctrine of value. '^ Factors Acts History. The significance in law of the possession of goods or of their symbols is specially emphatic in the case of commercial factors, now known as »* See infra, p. 239. " Per Hamilton J. in Janesioh e. »* 1880, 7 K. 427. It was approved in Attenborough, 1910, 102 L.T. 605. Mitchell V. Heys, 1894, 21 R. 600, 604, 613 ; »» Macdonald v. Westren, 1888, 15 B. and in Bryce u. Ehrmann, 1904, 7 F. 5. 988 (unsold goods remain the property of Its principle is said by Bray J. in Weiner v. the original vendor or principal) ; Bryce v. Gill, [1905] 2 K.B. 183, to be overruled by Ehrmann, supra (goods invoiced after Earquharaon Bros. o. King & Co., '°. And being pawned) ; Ex p. White, 1870, L.R. it may be suggested that the retailer, 6 Ch. 397 ; Ex p. Wingfield, 1879, 10 Ch. though convicted on his own admission D. 591 (reputed ownership in English as a swindler, was really a thief who bankruptcy); Kirkman v. Attenborough, ' straightway ' pawned the goods and was [1897] 1 Q.B. 201 ; Weiner v. GUI, " incapable of transmitting any legal title (ownership expressly retained by whole- in them. sale merchant) ; Bradley & Cohen v. »« Mitchell V. Heys, supra, 21 R. at Ramsay & Co., 1912, 106 L.T. 771 (judicial P- "13. admission that ownership had passed). HOLDING OUT 229 mercantile agents, ^^ i.e. persons whose main office is to buy or sell goods for their principals. In practice the chief question has been whether these mercantile agents are to be taken as held out by their principals as entitled to pledge or dispose of the goods in their possession otherwise than by sale. In the first half of the eighteenth century this power was doubtful in Scotland i'" and non-existent in England/^^ in accordance with the general rule of law that no one can transfer a higher right than he himself has. But in Scotland (at first in deference to the law of Holland, and afterwards on more general considerations in regard to the convenience of trade and mercantile custom abroad, and the fact that merchants were in the habit of looking to the possession of goods or of their symbols instead of prying into title) this Hmitation of imphed mandate was relaxed.^''^ So that the remarks of Mr Bell regardiug a factor's power to pledge seem to be borne out by the decisions : ^"^ ' In ' England, at common law, he had no such power. In Scotland it has ' been decided that he has the power, to the effect of conferring on one ' who lends money on the secilrity of the goods, an unexception9,ble ' real right ; or of raising to a subfactor, or other person receiving the ' goods and advancing money on them, an efEectual Ken.' In England the process of relaxation was gradual, timid, and statutory, in the years 1823, 1825, 1842, and 1877 i"*— one of the best illustrations of the way in which the law is apt to halt behind, foUow reluctantly, and in the end overtake, the practice and usages of trade. In the latest of these four Acts the potency of possession in the hands of factors was extended to possession in the hands of sellers who had not made deUvery and of buyers who had obtained possession without acquiring ownership. Finally, in 1889 as to England and Ireland, and in the following year as to Scotland, the four Acts were repealed, consoUdated, and amended. The Scots '» The word ' factors ' appears in the Scotland, 1 B.C. 517 seqq. ; and later, extant Acts only in the title. B. Pr. 1317 A & B. "» Mitchell V. Burnet & Mowat, 1746, "^ 1 B.C., 7th ed., 517. Transfer of a M. 4468, 1 B.C. 517, 523 note. factor's lien for advances made by him to 1"! Paterson ■;;. Tash, 1743, 2 Stra. 1178, his principal is at common law legitimate 93 E.E. lUO (said by Gibbs C.J. in Bonzi in both countries. V. Stewart, 1842, 4 Man. & G. 295, to be "* 4 Geo. IV. c. 83 ; 6 Geo. IV. Ky. 94 ; misreported, but followed consistently till 5 & 6 Vict. c. 39 ; 40 & 41 Vict. o. 39. gradually upset by statute). Even though It is not to be wondered at that, looking to the pledge was made by the factor to raise the above-cited Scottish decisions, there a credit for carrying on his agency for the was a doubt (certainly unfounded) whether principal in question. the three earUest of these appUed to Soot- "" Mitchell, supra, '•"'' (bill of lading) ; land— M'Ewan v. Smith, 1847, 9 D. 434, Colquhoun v. Kndlay, Duff & Co., 15th Nov. aff. 6 B. Ap. 340 ; Poohin & Co. v. Robmow 1816, P.C. 208 (do.) ; Ede & Bond v. & Marjoribanks, 1869, 7 M. 622 ; Vickers Kndlay, Duff & Co., 15th May 1818, E.G. v. Hertz, 1871, 9 M. H.L. 65, L.R. 2 Sc. 509 (do. ; ' ostensible ownership ') ; simUar Ap. 113. The history of these three Acts case in 1 B.C. 518 note (question of general and of the EngHsh decisions is best given hen left undecided) ; Johnston v. Scott in the opinion of Blackburn J. in Cole v. & Son 14th Nov. 1818, E.G. 561 ; Black & North- Western Bank, 1875, L.R. 10 C.P. Co. V. M'CaU &, Co., 1824, 2 Sh. App. 188 366-374, and by L. St Leonards in Navul- (general lien ; broker in possession, not shaw v. Brownrigg, 1852, 2 De 6. M. & G. .factor). See further as to the history in 441. 230 HOLDING OUT Do. Scope of the Acts. statute merely adapts the English terms to Scottish nomenclature and accepts the English doctrine of valuable consideration.^"^ In reading the cases which were decided under old Acts, it is well to remember that many of the sections thereof were designed to displace decisions of the Court ; and that in these Acts the test ' as to whether ' a particular transaction was validated by these Acts depended entirely ' upon what was the actual relation between a person standing in the ' position of factor and the true owner of the goods, and it depended on ' the actual authority which the true owner of the goods had given to ' that person. . . . The question now depended to a considerable extent ' on what the business carried on by that person was. ' ^"^ ' What has to ' be brought within the ordinary course of business is the actual disposi- ' tion, not the circumstances of the disposition.' ^'" The scope of the subsisting Acts may be indicated briefly as follows : — Their provisions are to be construed in amplification and not in derogation of the powers exerciseable by an agent independently of the Acts.^"* Nothing therein shall authorise an agent to exceed or depart from his authority as between himself and his principal, or exempt him from any liability, civil or criminal, for so doing.^"' Nothing therein shall prevent the owner of goods from recovering the goods from an agent or his trustee in bankruptcy at any time before the sale or pledge thereof, or shall prevent the owner of goods pledged by an agent from having the right to redeem the goods at any time before the sale thereof, on satisfying the claim for which the goods were pledged, and paying to the agent, if by him required, any money in respect of which the agent would by law be entitled to retain the goods or the documents of title thereto, or any of them, by way of hen or right of retention as against the owner, or from recovering from any person with whorci the goods have been pledged any balance of money remaining in his hands as the produce of the sale of the goods after deducting the amount of his hen or right of retention.^^* Nothing in the Acts shall prevent the owner of goods sold by an agent from recovering from the buyer the price agreed to be paid for the same, or any part of that price, subject to any right of set-off or compensation on the part of the buyer against the agent. ^^^ ' It is only in cases where ' an owner has in some way been deprived of his goods without his ' authority that the Factors Acts are required, for, if he is not so deprived, ' the Acts are not needed to protect bond fide transactions with agents ' and buyers.' "^ ' Possession of, not property in, the thing disposed of "5 52 & 53 Vict. 0. 45 ; 53 & 54 Vict. 0. 40. Printed in the appendix. In the text the appropriate additions are inserted, aa they were intended to be, and would have been had they not gone amissing in London. i"8 Per Channell J. in Turner v. Sampson, 1911, 27 T.L.R. 200. !»' Per Hamilton J. in Janeaich Attenborough, 1910, 102 L.T. 605. V. "8 Act 1889, a. 13. i»» Ibid., s. 12 (1). "" Ibid., a. 12 (2). 1" Ibid., 8. 12 (3). i" Per A. L. Smith L.J. in Cahn v. Pockett's Co., [1899] 1 Q.B. 643, 652. See a oaae where the owners did not interfere in a question between pledgee and pledgor's bankruptcy trustee — Ex parte N. -Western Bank, in. re Slee, 1872, L.R. 15 Eq. 69. HOLDING OUT 231 ' is the cardinal fact. From the point of view of the bond fide purchaser ' the ostensible authority based on the fact of possession is the same ' whether there is property in the thing or authority to deal with it in ' the person in possession at the time of the disposition or not. But the ' legislature has not carried the rights of a purchaser so far as to make ' the sale equivalent to a sale in market overt."^ The purchaser must ' accept the risk of the vendor having found or stolen the goods or docu- ' ments or otherwise got possession of them without the consent of the ' owner.' ^i* ' But if a mercantile agent, or one of the persons whose dis- ' position is made as effectual as that of a mercantile agent, "= has obtained ' possession by the consent of the owner, even though it were under a ' contract voidable as fraudulent,"^ he is able to pass a good title to a ' bond fide purchaser.' "' The principal Act (of 1889) starts by defining ' mercantile agent ' ; Definitions, but it is convenient to set out first the other definitions, which require no comment except in course of a study of the enacting clauses. I. (2) A person shall be deemed to be in possession of goods or of the documents of title to goods, where the goods or documents are in his actual custody or are held by any other person subject to his control or for him or on his behalf : '^° (3) The expression ' goods ' shall include wares and merchandise : ^^' (4) The expression ' document of title ' shall include any bill of lading, dock warrant, warehouse-keeper's certificate, and warrant or order for the delivery of goods, and any other document used in the ordinary course of business as proof of the possession or control of goods, or authorising or purporting to authorise, either by endorsement or by delivery, the possessor of the document to transfer or receive goods thereby represented : (5) The expression ' pledge ' shall include any contract pledging, or giving a lien or security on or right of retention of,^^" goods, whether in consideration of an original advance or of any further or continuing advance or of any pecuniary liability : ^^^ (6) The expression ' person ' shall include any body of persons corporate or un- incorporate. The definition of a ' mercantile agent,' formerly known as a ' factor,' Mercantile is as follows :— »§«"'• I. (1) The expression " mercantile agent ' shall mean a mercantile agent having in the customary course of his business as such agent authority either to sell goods, or to consign goods for the purpose of sale, or to buy goods, or to raise money on the security of goods. ^^^ This reference does not apply in "* See s. 6 as to agreements made by Scotland. accredited clerks of mercantile agents. 1" Per CoUina L.J. in Cahn, supra, at 119 jjot a railway stock certificate— p. 658 ; adopted by Moulton L.J. in Oppen- Freeman v. Appleyard, 1862, 32 L.J. Ex. heimer v. Frazer, [1907] 2 K.B. 50 at p. 175 . ■wiUiams v. Colonial Bank, 1888, 69. And see Sale of Goods Act, s. 21 (2a) ; 33 qjj j) sgg^ 408 . ^or furniture in situ Vaughan v. Moffat, 1869, 38 L.J. Ch. 144 ; jq g, dweUing— see Wood v. RoecUffe, and see GiUman v. Carbutt, 1889, 61 L.T. ^g^^^ 13 l j, ch. 293 ; Brown & Co. v. 281. Bedford Pantechnicon Co., 1889, 5 T.L.R. 1" See infra, p. 238. 449 "« Baines v. Swainson, 1863, 4 B. & S. „„„,,„. ■ ^ ^^ r 270 ; Sheppard v. Union Bank of London, "° ^he Scots equivalent for hen. 1862, 7 H. & N. 661. '" As to antecedent debt or liability, "' Per Collins L.J., loc. cit. see s. 4. 232 HOLDING OUT It was at one time held that one was not a factor who was employed at a salary and small commission to sell goods at private houses ; and that his pawning them could not pass title to a pawnbroker who received them in the ordinary course of business and in good faith.^^^ But this can no longer be held, particularly in reference to this definition.^^* A clerk is a servant, not a mercantile agent, though clothed with power to sign dehvery orders and get up dock- warrants which pass from, hand to hand. ' The agent contemplated by the Statute [of 1842] is an agent ' having mercantile possession, so as to be within the mercantile usage ' of getting advances made.' ^^* A pledgee is not a mercantile agent of the pledgor, though he has other privileges under the Acts.^^^ A broker is ordinarily distinguished from a mercantile agent by the fact that he has not mercantile possession of the goods or their symbols.^^^ An insurance agent, entrusted with pictures to sell and pledging them instead, was held to come under the three earher Acts, as being a person whose employment corresponds to that of some known class of commercial agents, hke that class (factors) from which the Acts have taken their name, and not being a mere servant, carrier, or custodier.^^' The result was, and perhaps still is, different where the agent's employment was to get orders for his foreign principal and he came into possession of the goods merely as a forwarding agent. ^^^ -StiU less is a traveller a mer- cantile agent ; ^^^ or a tradesman hired to operate on goods,!^" or (in England) a mortgagee of goods, ^^^ or a warehouseman or wharfinger whose prime business is custody, though he may (in regard to other customers) occasionally be employed as factor. ^^^ Nor do the Acts avail where the agent of the owner of the goods pledged was also agent of, or joint adventurer with, the pledgee ; ^^^ nor where his authority is a general power of attorney, embracing management of land and aU other pro- 1^^ Hastings v. Pearson, [1893] 1 Q.B. agent's line of business.) Heyman was 62. See also Waddington & Sons v. Neale followed in Cole v. N.W. Bank, supra. & Sons, 1907, 23 T.L.R. 464 (no authority See also Sheppard v. Union Bank of to sell on commission ; no pledge if there London, 1862, 7 H. & N. 661 ; TremoiUe v. be no right of redemption). Christie, 1880, 69 L.T. 338. 1^3 Weiner v. Harris, [1910] 1 K.B. 285, 12» HaUings v. RusseU, 1875, 33 L.T. 292,294; and see it doubted by Alverstone 380; Brown & Co. v. Bedford Co., 1889, C. J. in Oppenheimer v. Attenborough, 5 T.L.R. 449; Martinez y Gomez 0. [1908] 1 K.B. 221, 227. AUison. 1899, 17 R. 332. 124 Lamb v. Attenborough, 1862, 1 B. & 129 ^j^-^ S. 831, per Blackburn J. This, which ... r^^ ' t, , -^ might have been doubtful under the old „ .9^^ ^^"'^ "• ^^"^''^' ^^^O, 5 Ap Acts— Wood V. RowcUife, 1846, 6 Hare 183 —is made plain by the above definition. "' Joseph v. Webb, 1884, Cab. & El. »" Inglis V. Robertson, [1898] A.C. 616 ; ^^^- He is not a buyer under s. 9 (Act 25 R. H.L. 70, affg. 24 R. 758. 1^77, s. 2). "« Baring v. Corrie, 1818, 2 B. & Aid. "' Wilkinson v. King, 1808, 1 Campb. 137 ; Pearson v. Scott, 1878, 9 Ch. D. 198, 334 ; Cole, supra ; Monk v. Whittenbury, 203. 1831, 2 B. & Ad. 484. "' Heyman v. Plewker, 1863, 13 C.B. "» Mehta v. Sutton, 1917, 109 L.T. 529. N.S. 610. (The mention in the preamble As to del credere agent and no privity of of Act 1842 of ' an usual and ordinary contract, see New Zealand Land Co. v. ' course of business ' did not refer to the Watson, 1881, 7 Q.B.D. 374. HOLDING OUT 233 perty ; ^^* nor where the agent acts not in the ordinary course of business, for example by getting a friend to act for him.^^^ But it is no objection, under the existing Acts, that the possession is merely for exhibition.^^* The enacting part of the principal Act starts with a fasciculus of clauses (ss. 2-7) which are headed ' Dispositions by Mercantile Agents ' — a heading which governs these clauses, and (except where impliedly included) shuts out the second part of the Act, which deals with other persons in possession.^" The leading enactment is as follows : — II. (1) Where a mercantile agent is, with the consent of the owner, in possession of Powers of goods or of the documents of title to goods, any sale, pledge, or other disposition of the ^Ig^f^Luh goods, made by him when acting in the ordinary course of business of a mercantile agent, respect to shall, subject to the proTisions of this Act, be as valid as if he were expressly authorised ^j goods by the owner of the goods to make the same ; provided that the person taking under the disposition acts in good faith, and has not at the time of the disposition notice that the person making the disposition has not authority to make the same. This is followed by the explanation : — II. (4) For the purposes of this Act the consent of the owner shall be presumed in the absence of evidence to the contrary. The consent of the owner to the mercantile agent's possession of the goods or documents, as such agent, thus presumed, may of course be negatived by the facts. The words ' possession with consent ' come in place of a phrase in the earlier Acts which spoke of persons ' intrusted ' with the possession of goods,^^^ and the matter of onus of proof had had to be cleared up, after much dispute, in the Act of 1842.1^* If there has been no consent to the agent's possession of the goods or documents of title, the purchaser or pledgee cannot appeal to the Acts.**" Seeing that the only requisites now are the recipient's good faith, the possession by a mercantile agent when acting in the ordinary course of a mercantile agent, and the consent of the owner to that possession, it follows that the Acts apply, though the possession was given, not merely for selling or pledging, but also wholly or in part for exhibition only ; "^ and where the consideration given to the agent was or was not wholly in money.i*^ "« Lewis V. Ramsdale, 1886, 55 L.T. 179. Pookett's Co., [1899] 1 K.B. 643 ; Oppen- ''5 De Gorter v. Afctenborough, 1904, heimer v. Frazer, [1907] 2 K.B. 50, 70; 21 T.L.R. 19. Biggs v. Evans, [1894] 1 Q.B. 88. "" Moody V. Pall Mall Co., 1917, 33 las g. 4 apud fin. ; Baines v. Swainson, T.L.R. 306. 1863, 4 B. & S. 270. 1" Inglis .. Robert«bn, supra,^^K See „„ Vaughan v. Moffat, 1869, 38 L.J. contrast between ss. 8 and 9 ajmd fin., infra, ^^ ^^^ . Oppenheimer v. Frazer, supra- P' one of three joint adventurers in bad "« A long series of cases from Van ^^.^^^ ^^ ^^^ Robinson v. Restell, 1896, Casteel v. Booker, 1848, 2 Exch. 691 to ^^ ^^^ ^^^ ^^^^^^ ^^j^ . ^^^^^^^^^^ <,f Mirabita v. Imperial Ottoman Bank, 1878, ^^ ^ ^ ^rick) 3 Ex. D. 164, turned on the interpretation ,,' , ' ,,, of 'intrusted.' See also Hatfield .. i" Moody, «ai)m, 1^^. PhiLips, 1845, 12 CI. & F. 343 ; and for i" S. 5 ; Biggs v. Evans, [1894] 1 Q.B. the meaning of the change— Moody v. 88; doubted in Turner «. Sampson, 1911, Pall Mall Co., 19X7, 33 T.L.B. 306 ; Cahn v. 27 T.L.R. 200. 234 HOLDING OUT Good faith of third party. If the consent be obtained, though fraudulently, the third party, being no party to the fraud, nor aware of it, nor having reasonable ground for inferring it, is protected by this clause.i*^ It is different if there be impetration in the nature of theft ; consent is what the law regards as consent."* The difference of phrase between the definition of mercantile agent "^ as one having 'in the ordinary course of his business as such ' agent authority ' to sell, consign, buy, or pledge, and the words in the first subsection as to his doing any of these things ' in the ordinary course ' of business as a mercantile agent,' is said to be that the former refers to the circumstances in which the principal gives possession to the agent and the agent gets his authority ; while" the latter refers to the stage at which the agent deals with the third party, though the former be not a person in the trade in question, provided he is ' acting in such a way as a mercantile agent acting in the ordinary course of business of a mercantile agent would act, i.e. within business hours, at a proper place of business, and in other respects in the ordinary way in which a mercantile agent would act, so that there is nothing to lead the pledgee to suppose that anything wrong is being done or to give him ■ notice that the disposition is one which the mercantile agent had no ' authority to make.' ^^^ Therefore a custom iu a trade whereby principals always themselves got security on goods could not oust the operation of this subsection."' The last words of the quotation above naturally lead on to the proviso that, in order to come under the subsection, the person taking under the disposition must have acted in good faith and without, at its date, notice that the person making the disposition had not authority to make it. Bad faith is in the nature here of conspiracy and has already been iUustrated.i*^ Notice means and has in all the Acts meant knowledge, not merely intimation or warning. The question whether knowledge of the actual limitations of authority has been brought home to a party deahng with an agent is a question of fact for a jury, or for a judge sitting as a jury, to determine ; and the circumstances are so various that it appears to be sufficient to cite in a note the principal cases which have come up for decision under the Acts,"^ and to add a single remark. ' The question . . . where there is no evidence of direct communication ' is whether the circumstances were such that a reasonable man and a "= Cahn V. Pookett's Co., swpra, "= ; Baines v. Swainson, supra, ^''■^ ; Sheppard V. Union Bank of London, 1862, 7 H. & N. 661 (exchange ; see s. 5). ■"* Oppenheimer v. Frazer, supra, ^^'. "s Supra, p. 231. 1** Oppenheimer 1). Attenborough, [1908] 1 K.B. 221, 230, per Buckley L. J., and see per Kennedy L.J. at pp. 231-2. "' Ibid,., affg. [1907] 1 K.B. 519. "' Mehta v. Sutton, supra, i'=. "» Evans v. Trueman, 1830, 1 Moo. & Rob. 10 ; Navulshaiw v. Brownrigg, 1852, 2 De G. M. & G. 441 ; Kaltenbach v. Lewis, 1883, 24 Ch. D. at p. 78 (' important not ' to encourage the application of the ' equitable doctrines of constructive notice ' to honest mercantile transactions ') Mildred v. Maspons, 1883, 8 Ap. Cas. 874 Douglas V. Ewing, 1857, 3 Ir. C.L.R. 395 Gobind Chuuder Sein, 1861, 15 Moo. P.C.C. 230, 259. And see Index as to imputed (constructive) notice or knowledge. HOLDING OUT 235 ' man of business, applying his understanding to them, would know that ' the goods were not [the agent's] ; not whether he would draw a con- ' elusion or might beheve or fancy or have impUed notice.' ^^'' The question is, ' Were the circumstances such that a reasonable man and ' a man of busness, applying his understanding to them, would certainly ' know that [the agent] had not authority to make the pledge, or that ' he was acting tnalafide in respect thereof, against his principals ? ' isi II. (2) Where a mercantile agent has, with the consent of the owner, been in possession of goods or of the documents of title to goods, any sale, pledge, or other disposition, which would have been valid if the consent had continued, shall be valid notwithstanding the determination of the consent : provided that the person taking under the disposition has not at the time thereof notice that the consent has been determined.'^^ This subsection, which relates to unintimated close of authority, and Consent in particular to withdrawal, partial or total, of the agent's mandate as ^' agent, is quite in accord with the common law of agency. ^^^ It restates the second section of the Act of 1877, which displaced a disquieting decision ; ^^* and it has been given effect to in several circumstantial cases.i^^ 11. (3) Where a mercantile agent has obtained possession of any documents of title to goods by reason of his being or having been, with the consent of the owner, in possession of the goods represented thereby, or of any other documents of title to the goods, his posses- sion of the first-mentioned documents shall, for the purposes of this Act, be deemed to be with the consent of the owner. This is an abbreviated version of the 4th section of the Act of Sub- 1842, which was a displacement of the cautious decisions noted below.'-^^ For example, if a mercantile agent obtains goods or a bill of lading, and owing to his possession obtains in his own name a dock- warrant or deUvery order, his pledgee, unless there be collusion, can maintain conclusively against the true owner that the latter has given his consent to the agent's possession of these latter documents of title. Ill A Bledae of documents of title to goods shall be deemed to be a pledge of the Efiect o£ ^ *=> ° pledge of goods. documents of title. If this had been merely added as an amendment to the law established by the old Acts, and in particular to the Act of 1877, the addition would doubtless have extended to all the persons dealt with in these Acts, and 150 Per L. St Leonards in Navulshaw, 1^4 Puentes v. Montis, 1868, L.R. 4 C.P. swyra, at p. 452, adopting and expanding 93 — Exch. Ch. L. Tenterden's charge to the jury in i^, Nahmaschinen Fabrik v. Lea & Evans, m'pra, "». ^sjms, 1888, 4 T.L.R. 617 ; Turner v. 1" Per Knight-Bruce L.J. m Gobmd, g ^^^ igji^ 27 T.L.R. 200; Moody v. mpra, at p. 259. See also May v. Chapman, p^^ j^^^ ^ ^g^^ 33 j,j^^ g^g. 1847, 16 M. & W. 355, 361 ; Jones v. Gordon, 1877, 2 Ap. Oas. 616. ^=« Phiilipa v. Huth, 1840, 6 M. & W. "2 As to the proviso, see the foregoing 572 ; Hatdeld v. PhiUips, 1845, 12 01. & F. section ; and Turner, infra, i". 343, 360 ; 14 M. & W. 665 ; Close v. 153 Supra, p. 225. Holmes, 1837, 2 Moo. & Rob. 22. 236 HOLDING OUT thus to sellers and buyers as well as to mercantile agents. Imbedded as it is in a series of clauses headed ' Dispositions by Mercantile Agents,' it has been held by' the House of Lords to be confined to the actings of these agents.i" Whisky sold by K. & B. to G., and not paid for, was warehoused in bond in G.'s name. G. hypothecated part of it to I. for an advance, endorsing and deUvering over to him the warrants. G. failed to pay E. & B. a balance of the price. R. & B. arrested to found juris- diction and later on the dependence. They were preferred in the com- petition ; for I. had not notified the warehousemen, nor obtained his attornment. The section now in discussion did not apply to G-. and I. ; ■ and the 9th section of the Factors Act 1889 did not apply, because G. did not obtain the documents with the consent of R. & B., but as himself owner.^^* As explained by Lord Watson (who showed that by the common law of Scotland the pledgee had by his neglect failed to obtain a jus in re in the goods) : ' So far as it apphes, the language of that ' clause is unambiguous. It provides that to that extent a pledge of ' the documents of title shall, although in point of fact it is not so, be ' nevertheless regarded in law as equivalent to a pledge of the goods. . . . ' G., from whom the appellant derived his right as pledgee to the docu- ' ments of title representing the whisky in question, was not a pledgor ' within the meaning of section 9, who must be a person who has obtained ' the documents of title either from his seller or with the consent of his ' seller. ... He got the documents in his own right and in his own name, ' as owner of the whisky, directly from the warehouseman after the ' goods had been transferred to his name in the warehouse books.' Here as elsewhere under the Acts the goods need not be specific articles ; they may be specified quantities of a bulk.^^' Pledge for IV. Where a mercantile agent pledges goods as security for a debt or liability due from ^gjjj the pledgor to the pledgee before the time of the pledge, the pledgee shall acquire no further right to the goods than could have been enforced by the pledgor at the time of the pledge. It is plain that the antecedent ' debt or liability ' was not incurred by the mercantile agent to the pledgee on the faith of the statutory security. Consequently the pledgee can only retain in a question with the true owner to the extent of any hen or right of retention that the agent held as against his principal. In the superseded enactments the terms used were (Act 1825, s. 3) ' any debt or demand due and owing ' or (Act 1842, s. 3) ' any antecedent debt owing.' These words point to an 1" Qm.— What if a lawyer fulfilled all Hayman & Son v. M'Lintock, 1906, 13 the conditions of the Acts 1889 and 1890 ? S.L.T. 863 (Moorhead's claim). This rule of construction has its limitations — Bridge of AUan Water Co. v. Alexander, i^' Ibid. ; Vickers v. Hertz, 1871, L.R. 1868, 6 M. 320, 324 ; Hammersmith Ry. 2 So. Ap. 113 ; see also Pochin & Co. v. Co. V. Brand, 1869, L.R. 4 H.L. 171 ; Robinows & Marjoribanks, 1869, 7 M. 622 ; Fletcher v. Birkenhead Corp., [1907] Capital and Counties Bank v. Warriner; 1 K.B. 205. 1896, 12 T.L.R. 216 ; Ant. Jurgens 1'' Inglis V. Robertson, [1898] A.C. 616, Margarinefabriken v. Louis Dreyfus & Co., 25 R. H.L. 70, affg. 24 R. 758 ; followed in [1914] 3 K.B. 40. HOLDING OUT 237 ascertained and prestable claim. The words substituted, ' a debt or ' liability,' probably have a wider scope. And this should be remembered in reading the cases prior to 1889.18" Even so, ' to treat a possible in- ' debtedness in the future as a debt existing before the date of the advances ' in question appears to me to be inconsistent with any reasonable inter- ' pretation of the language of the Act ' (of 1842) ; i«i and probably also of the modern phrase. ' I am not prepared to hold that a broker, who, in ' purchasing goods for a factor, has made himself responsible to the vendor, ' cannot thereafter make a bond fide advance to the factor, to enable him ' to pay for the goods bought on his account. And, if the broker can ' and does make such an advance, and accepts a pledge to secure its ' repayment, I can find nothing in the Act of 1842 to deprive the ' pledgee of its protection. On the other hand, if the broker, instead of ' advancing money in bond fide to enable his principal to pay for the ' goods, were to take security for the purpose of relieving himself of a ' Uability which he had incurred, I do not think it could with any pro- ' priety be said that he had made an advance of money within the meaning ' of the Act.' "2 V. The consideration necessary for the validity of a sale, pledge, or other disposition of Eights goods, in pursuance of this Act, may be either a payment in cash, or the delivery or transfer g^c JJaiiee of of other goods, or of a document of title to goods, or of a negotiable security, or any other goods or valuable consideration ; but where goods are pledged by a mercantile agent in considera- tion of the delivery or transfer of other goods, or of a document of title to goods, or of a negotiable security, the pledgee shall acquire no right or interest in the goods so pledged in excess of the value of the goods, documents, or security when so delivered or transferred in exchange. In the application of this section to Scotland, a sale, pledge, or other disposition of goods shall not be valid unless made for valuable consideration!}^^ The 2nd section of the Act of 1842, of which this is an abbreviated version, displaced the English common law which forbade a factor to barter or exchange goods or documents of title, with the exception of negotiable instruments. i** Formerly, if one held warrants originally pledged by a factor, gave them up, and received others in exchange, the tra'nsaction was held not to be a sale or disposition of the latter, the warrants not being negotiable instruments. i*^ But a pledge given by an agent, in order to get up goods deposited with the pledgee for another debt due by a principal other than the owner of the first-mentioned goods, is protected by the Acts ; it was just as if the advance had "» Phillips V. Huth, 1840, 6 M. & W. "" Ibid. 572 ; Learoyd v. Robinson, 1844, 12 M. & ^'^ The words in italics are added from W. 745 ; Jewan v. Whitworth, 1866, the Act of 1890, and point to a general L.R. 2,Eq. 692 (unico contextu) ; Taylor v. contract discrepancy between English and Trueman, 1830, Mood. & M. 453 ; Taylor v. Scots law ; in this matter there is none. Kymer, 1832, 3 B. & Ad. 320 ; Macnee v. "* Guerreiro v. Peile, 1820, 3 B. & Aid. Gorst, 1867, L.R. 4 Eq. 315; Thackrah 616. 0. Ferguson, 1879, 25 W.R. ^07. "= Taylor v. Kymer, 1832, 3 B. & Ad. i«i Per L. Watson in Kaltenbach v. 320 ; Bonzi v. Stewart, 1842, 4 Man. & G. Lewis, 1885, 10 Ap. Gas. 617 at p. 632. ^295. 238 HOLDING OUT Agreements through clerks, etc. Provisions as to consignors and consignees been made to the factor himself, and his alleged fraud was irrelevant. 1^* VI. For the purposes of this Act an agreement made with a mercantile agent through a clerk or other person authorised in the ordinary course of business to make contracts of sale or pledge on his behalf shall be deemed to be an agreement with the agent. The old rule to the contrary was an application of the much-honey- combed rule : Delegatus non potest delegare.^^'' VII. ( I) Where the owner of goods has given possession of the goods to another person for the purpose of consignment or sale, or has shipped the goods in the name of another person, and the consignee of the goods has not had notice that such person is not the owner of the goods, the consignee shall, in respect of advances made to or for the use of such person, have the same lien on or right of retention of the goods as if such person were the owner of the goods, and may transfer any such lien or right of retention '** to another person. (2) Nothing in this section shall limit or afEect the validity of any sale, pledge, or dis- position, by a mercantile agent. In these two cases ' another person,' though not a mercantile agent under the statutory definition, is for a special purpose treated as if he were such.^*' Disposition by seller remaining in possession. Bisposition by buyer obtaining possession. Dispositions by Sellers and Buyers of Goods. VIII. Where a person, having sold goods, continues, or is, in possession of the goods or of the documents of title to the goods, the delivery or transfer """ by that person, or by a mercantile agent acting for him, of the goods or documents of title under any sale, pledge, or other disposition thereof, or under any agreement for sale, pledge, or other disposition thereof, to any person receiving the same in good faith and without notice of the previous sale, shall have the same effect as if the person making the delivery or transfer were expressly authorised by the owner of the goods to make the same. IX. Where a person, having bought or agreed to buy goods, obtains with the consent of the seller "^ possession of the goods or the documents of title to the goods, the delivery or transfer by that person or by a mercantile agent acting for him, of the goods or documents of title, under any sale, pledge, or other disposition thereof, or under any agreement for sale, pledge, or other disposition thereof, to any person receiving the same in good faith and without notice of any lien or right of retention " or other right of the original seller in respect of the goods, shall have the same effect as if the person making the delivery or transfer were a mercantile agent in possession of the goods or documents of title with the consent of the owner. ^** Sheppard v. Union Bank of London, 1862, 7 H. & N. 661. 1" See SoUy v. Rathbone, 1814, 2 M. & S. 298 ; Cockran v. Irlam, ibid., 301 ; Catlin V. BeU, 1815, 4 Camp. 183. ^" The words in italics are added from the Act of 1890. i«» See Tindall v. Taylor, 1854, 4 E. & B. 219 ; Thompson v. Farmer, 1827, 1 Mood. & M. 48 ; Portalis v. Tetley, 1867, L.R. 5 Eq. 140, 147 (second pledge of balance of net proceeds of goods by factor) ; Fletcher v. Heath, 1827, 7 B. & C. 517. "" Therefore, probably not pledging what is already in the pledgee's possession —Nicholson v. Harper, [1895] 2 Ch. 415. See BlundeU-Leigh v. Attenborough, [1921] 1 K.B. 382. ■ "^ As to the force of these words, see Robinson v. Rfestell, 1896, 12 T.L.R. 174. ^'" The words in italics are added from the Act of 1890. HOLDING OUT 239 These two sections, along with the following section, form a separate department of the statute.^" They are an extension of the 3rd and 4th sections of the repealed Act oi 1877, which applied only to the transfer of documents of title. They are repeated in subsections (1) and (2) of section 25 of the Sale of Goods Act 1893,^'* with the omission there of the above words in each section, viz. ' or under any agreement for ' sale, pledge, or other disposition thereof,' following on the words ' dis- ' position thereof.' As explained by Lord Watson regarding this group of three clauses : ' The main, if not the sole object of these clauses seems ' to be this — to protect the purchaser or pledgee of documents of title ' deriving right from one who is lawfully in possession of them against ' a claim of retention for unpaid price or a right of stoppage in transitu, ' by the original seller, in cases where the purchaser or pledgee has had ' no notice of such claim or right.' "^ g^t this is not exhaustive, as later decisions have shown. In the 9th section, the person who has agreed to buy and is not owner and is in possession and makes a disposition of the goods or documents of title is treated as if he were a mercantile agent in possession of these with the consent of the owner. In the 8th section the seller, who is no longer owner, but continues or is in possession of these and makes a disposition of them, is treated as if he were expressly authorised by the owner of the goods to make the same — the words ,at close of these sections being equivalent terms, as has already been pointed out.^'® The 3rd section of the Act of 1877, repeated and extended in the .imendment 8th section of the Act of 1889, above quoted, displaced the law laid kw'ls'i^™'" down in the case of Johnson v. Credit Lyonnais,^'''' where J. bought t^rpreted by tobacco and paid for it, but left the dock warrants representing it in the hands of H., the seller. H. fraudulently obtained advances from a bank by pledging part of the tobacco and handing to it the warrants. It was held that it was not entrusted by J. as his factor or agent with the docu- ments of title in the sense of the Act of 1825, section 2 ; and that the conduct of J. in leaving the indicia of title in H.'s hands was not such as to disentitle J. from recovering from the bank the value of the tobacco pledged with it. The cases contemplated in the 8th section are not hkely to be common, seeing that fraud, easily and speedily discoverable, can scarcely be absent. It may be observed that the phrase ' continues ' or is ' suggests that H. in the case cited may either have been in possession continuously after the sale by him or had in the interval lost and retrieved possession. The position of the seller here is quite distinct from the position of an impaid seller who has exercised his right against a default- ing purchaser of reselling the goods.^'' "» Supra, p. 236. '" In Inglis v. Robertgon, [1898] A.C. 1" 56 & 57 Vict. 0. 71. For the correla- at p. 628, 25 R. H.L. at p. 75. tion of this fasciculus with that Act, see i'« Supra, p. 233, s. 2 (1). its sections, 21 (2a), 18 (Rule 4), 47, "' 1877, 3 C.P.D. 32. 48. • 1" Sale of Goods Act, 1893, s. 48 (2, 4). 240 HOLDING OUT Interpretation The 4th section of the Act of 1877, of which the 9th section now °^ '■ ^" under construction is an amended copy, was enacted for the purpose of displacing the view taken in England "^ that a person such as is described in the beginning of these sections was not a person entrusted with a deUvery order, and that a deUvery order was not, in a question of hen and stoppage in transitu, equivalent to a bill of lading. The phrase ' having bought ' assumes that the buyer has become the owner, but may refer to one to whom the property in the goods has been transferred subject to some resolutive condition.!^" The main controversy has arisen as to the meaning and scope of the words that foUow and describe a buyer and possessor who has not become owner, having only ' agreed to Hire-purchase. ' buy ' ; and particularly in regard to the contract of hire-purchase.^*^ ' An ' agreement to buy imports a legal obligation to buy. An agreement to ' buy, if the alleged buyer does not change his mind, is no agreement ' to buy in the eye of the law. When it is said that an agreement to sell ' connotes an agreement to buy, this may be true in popular language, ' but it is not true, if it is simply an offer which cannot be withdrawn ' and becomes a bargain only when the offeree avails himself of it.' ^*^ The agreement to buy may be conditional and be perfected by fulfilment of the condition.i*^ But in order to let in the clause in question the alleged buyer cannot have an option or election whether to purchase or not. Lee V. Butler. The leading case, in which there was no such option and in which^ the 9th section (or the corresponding clause in the Sale of Goods Act) was held to apply, is Lee v. Butler, ^^^ where furniture was let for a small sum down and a larger sum a few months later ; provision was made for retrieval if rent fell into arrear or the furniture were removed ; and the hirer was to have sole and absolute property as soon as all the condi- tions were fulfilled. As pointed out in later cases, ^^^ ' the purchase ' money was to be paid in two instalments, but as soon as the agreement ' was entered into there was an absolute obligation to pay both of them, ' which might have been enforced by action. The person who obtained ' the goods could not insist on returning them and so absolve himself ' from any obligation to make further payment.' i** As otherwise put, 1" In Jeakyns v. Usborne, 1844, 7 isa Per L. HerscheU in Helby w. Matthews, Man. & G. 678 ; and see s. 10, infra. It is [1895] A.C. 471 at pp. 475-7 ; and per thought that in both parts of his judgment L. Watson, p. 480. L. Rutherfurd Clark took too narrow a iss Marten „. Whale, [1917] 2 K.B. view of the sections in the Sale of Goods ^gQ Act and this Act in Browne !). AinsUe, 1893, ... rior.m n^T.o>o n i iuii. „, „ .^„ 1'* [1893] 2 Q.B. 318. Before the last ,i,„'t ' . . J. , instalment was paid the piano was sold, '"" In circumstances, for example, j ^i i , ^ , ■ , ^.i, 1- uti Ta i i iu J u J • ^'id the bond nde purchaser s title was sughtly different from those described m j t ii ■ , • iuoi en jAi in/ J secured by this section, the bale of Goods Act, s. 19 (reserved power ■' of disposal in seller) ; Shipton Arbitration, "' ^elby v. Matthews, [1895] A.C. 471, [1915] 3 K.B. 676; Mirabita, supra, "«; ^^S> per 1.. HerscheU. Cahn, supra, ^^^ ; Dodsley v. Varley, 1840, '" Repeated in Wylde v. Legge, 1901, 12 A. & E. 632. 84 L.T. 121. It is thought that Shenstone I'l See M'Laren's Tr. v. Argylls, Limited, v. Hilton, infra, was well decided, though 1915, 2 S.L.T. 241. put on a false analogy. HOLDING OUT 241 there was an irrevocable promise on the part of the hirer to pay instal- ments till the whole price was made up ; and the contingencies respecting failure to do so did not amount to an option to terminate the bargain.^*' In strong contrast were the circumstances in Helhy v. Matthews ?-^^ iieiby v. The owner of ^ piano agreed to let it on hire, the hirer to pay a rent by "" *""*' monthly instalments, on the terms that the hirer might terminate the hiring by delivering up the piano to the owner, while remaining liable for all accrued arrears of hire ; also that if the hirer should punctually pay all the instalments, the piano should become his sole and absolute property, and that until such full payment the piano should continue the sole pro- perty of the owner. The liirer received the piano, paid a few of the instalments, and pawned it. It was held that the hirer had not ' agreed ' to buy ' in the sense of the 9th section, seeing that he had an option either to return the piano or to become its owner by payment in full ; and seeing that by putting return of it beyond his power he had not become bound to buy.^^^ This authoritative decision overruled a judg- ment relating to a similar contract. i'" In a later case the purport of a complicated agreement was held to be that on payment of all the instal- ments (either ahead of or at the contemplated close of the relation) the hirers had an option either to become purchasers of the motor in question or to return it and claim back a sum of £50 paid in advance ; and that there was therefore no agreement to buy when the hirer pledged the motor to one who took it in good faith and without noticc^'^ Similar doctrine is applied in regard to contracts of sale or return.i^^ Sale or return. ' The ordinary case of the use of the words " sale or return " is when ' the goods are entrusted to the prospective buyer on sale or return, ' and there it means sale to him. He is either to be the buyer or he is to ' return them. But so far as the literal meaning of the words is concerned, ' they are applicable to a case where a man says, " I have delivered these ' " goods to my selling agent on sale or return, that is to say, he is either ' " to sell them, or, if he does not sell them, he is to return them, but ' " he is not intended to buy them." "^ In the former case it is quite ' plain that the property never has passed from the plaintiff Weiner ' [the wholesale merchant], and that Weiner is entitled to recover it ' [from the retailer's pledgee] ; the Factors Act is altogether out of the ' question and does not require any consideration from us. If it was "' Hull Ropes Co. v. Adams, 1895, ship of the letter to hire would be given 65 L.J. Q.B. 114 ; Thompson v. Veale, effect to. See M'Entire v. Crossley 1896, 74 L.T. 130. In Strohmenger v. Brothers, [1895] A.C. 457. Attenhorough, 1894, 11 T.L.R. 7, the "» Payne v. Wilson, [1895] 2 Q.B. 537. pawning was made by a woman 'living "^ Belsize Motor Supply Co. v. Cox, ' with ' the hirer, and either by his [1914] 1 K.B. 244. The measure of actual authority or as his mercantile agent, damages due to the true owner by the in the modem wide sense of the word, pledgee was the amount of instalments In Shenstone v. ffilton, [1894] 2 Q.B. 452, unpaid by the hirer, the disposal was by means of auction. ^"^ Supra, p. 227. 188 Supra, i»2. "' Weiner v. Harris, [1910] 1 K.B. 285, "' In bankruptcy the subsisting owner- per Fletcher Moulton L.J. at p. 293. 242 HOLDING OUT ' the latter, the Sale of Goods Act "* is equally out of the question, and ' we have only to consider what is the true meardng and effect of one or ' two sections of the Factors Act,"^ as between the plaintiff and the ' defendant [the pledgee sued for recovery of jewellery].' ^^^ The result in the case cited was that the latter view was taken ; th*t the retailer, being a mercantile agent of the true owner, had statutory authority to pledge ; and that the pledgee was entitled to prevail. The judgments regarding this topic i'' are hard to reconcile. Probably in the ordinary case the section now under consideration cannot apply — not to the first class, seeing that there was an option to the retailer to return the goods ; and not in the second, since he was merely an agent. X. Where a document of title to goods has been lawfully transferred to a person as a yer or owner of the goods, and that person transfers the document to a person who takes the document in good faith and for valuable consideration, the last-mentioned Efiect of documents on ^W^^ or owner of the goods, and that person transfers the document to a person who vendor's lien stoppage in transfer shall have the same effect for defeating any vendor's Men, or any right of retention transitu. com,petent to the original ovmer or vendor,'^" or right of stoppage in transitu, as the transfer of a bill of lading has for defeating the right of stoppage in transitu. This section is a restatement (by help of the 11th section, which relates to the mode of transferring documents) of the 5th section of the repealed Factors Act of 1877. In the interval, in the Sale of Goods Code, section 25 (2), that provision was amplified by treating sale and other disposition separately ; and made absolute, by omitting the reference to a biU of lading, in the proviso to section 47 of the said Code,!'' which relates to the effect of re-sale or pledge by buyer. In an important English case ^*"' it was settled, on collation of the Factors Act and the Sale of Goods Act, (1) that, when a seller of goods sends to his buyer under cover of a letter a bill of lading accompanied by a draft to be accepted by the buyer for the price of the goods contained in the bill of lading, the buyer can keep the bUl of lading and refuse to accept the draft, and yet give a good title to the goods to a sub-purchaser from him who takes in good faith and without notice of the want of authority of the buyer to deal with the bill of lading and the goods represented thereby ; and (2) that the sub- purchaser's right defeats the right of the original unpaid seller to -stop the goods in transitu in the event of the said buyer's bankruptcy.^"! Again, a delivery order was given by D. to F. for certain bags of seed, which were part of a larger consignment. F. gave D. a cheque for the "« S. 18 (4th case). "^ Viz. ss. 1 and 2. i°* Ibid., per Cozeus-Hardy M.R. at p. 289 ; and see Edwards v. Vaughan, 1910, 26 T.L.R. 545. '" See supra, p. 227. See as to the risk of goods stolen, Blanokensee v. Saqui, 1917, 33 T.L.R. 246. 198 Words in italics introduced from the Scots Act 1890. "9 56 & 57 Vict. c. 71. The develop- ment of the law in England may be studied in 1 Sm. L.C., voce Lickbarrow v. Mason. As to Scots law, see Hayman v. M'Lintock, [1907] S.C. 936, 949-50. ""' Cahn V. Pockett's Bristol Channel Steam Packet Co., [1899] 1 Q.B. 643, 651. ^°i The usual precaution is to send the bill of lading to seller's agent for tender on acceptance of the draft ; ibid., p. 661. HOLDING OUT 243 price, and endorsed the delivery order to M., who took it in good faith and for valuable consideration. F.'s cheque being dishonoured, D. refused delivery of the seed to M. It was held in M.'s favour that the 10th section applied, and that M. was entitled to damages from D. for non- delivery, in defeat of D.'s lien as unpaid vendor, and although the goods sold were not ' specific' ^"^ With regard to the opening words of the section, it was there remarked that ' a delivery order is not the less a ' document of title because it is created by the owner of the goods. It ' would be a curious result if the document by which the owner gets a ' title can, if passed on by him, give a title to someone else, but that a ' document created by himself cannot give a title, when passed on, because ' it is not a " transfer " but is only a delivery or issue.' ^"^ Partnership It may be premised that under the Limited Partnerships Act 1907,^"* Limited the Partnership Act 1890 ^"^ and the rules of equity and of common law apphcable to partnerships, except so far as they are inconsistent with the express provisions of the first-mentioned Act, apply to limited partner- ships (section 7). The only provisions which require to be referred to here seem to be part of section 6, which enacts that if a limited partner takes part in the management of the partnership business he shall be hable for all debts and obligations of the firm, incurred while he so takes part in the management as though he were a general partner ; and section 10, whereby notice in the appropriate Gazette must be given of a general partner becoming a limited partner and of the assignation of a hmited partner's share. But it is not probable that questions as to holding out will arise in regard to these societes en commendite. In respect to ordinary firms the rules of equity and common law. Ordinary except so far as inconsistent with the express provisions of the Partner- g™J^ ^^ ship Act 1890, and the Scots rules of bankruptcy, are saved.^^^ So that, codification. if on the proved or admitted facts of a case the words of that Act or Code apply, though these words alter the law, it being an amending as well as a codifying Act,^'" the Courts will look no further for the law ; and it is only where that is not so that the older authorities are applicable. At the same time the Code is mainly an attempt to consolidate former law and custom ; and it is no't safe to ignore altogether the wisdom of the elders.208 2»2 Ant. Jurgens Margarinefabriken v. '"^ 53 & 54 Vict. o. 39, ss. 46, 47. Louis Dreyfus & Co., [1914] 3 K.B. 40, "' See as to this, Stirling J. in Friend v. foUowing as to the last point Capital and Young, [1897] 2 Ch. at p. 429. Counties Bank v. Warriner, 1896, 1 Com. ^'" As to firm holding out a person as a Cas 314 partner, see Moyes v. Cook, 1829, 7 S. 793 ; 203 rim.noi^Tj aa t,- 1 1 ^ J Hosie 0. Waddell, 1866, 3 S.L.K 16. ^"^ [1914] 3 K.B. 44, per Pickford J. » ^ ^ x- ^ £ • „i„ ■„ L ./11J u J. . . , ^ As to citation of firm, now a single m- "»' 7 Edw. VII. 0. 24. dividual, see Young v. Livingstone, 1860, ^"5 53 & 54 Vict. c. 39. 22 D. 983. 244 HOLDING OUT Persons liable by ' holding ' out.' Dissolution by expiration or notice. Dissolution by bankruptcy or death. Eights of per- sona dealing with firm against appar- ent members of firm. The statutory doctrine of ' holding out ' is given in section 14 of the Code under the general heading ' Relations of Partners to Persons dealing • with them.' With that section there may be associated other provisions relating to the dissolution of partnership and its consequences (sections 32, 33, 36, 37, and 38). XIV. (1) Every one who by words spoken or written or by conduct represents himself, or who knowingly suffers ^" himself to be represented, as a partner in a partioujar firm, is liable as a partner to any one who has on the faith of any such representation given credit to the firm, whether the representation has or has not been made or communicated to the person so giving credit by or with the knowledge of the apparent partner making the representation or suffering it to be made. (2) Provided that where after a partner's death the partnership business is continued in the old firm-name, the continued use of that name or of the deceased partner's name as pai-t thereof shall not of itself make his executors or administrators estate or effects liable for any partnership debts contracted after his death. XXXII. Subject to any agreement between the partners, a partnership is dissolved — (a) If entered into for a fixed term, by the expiration of that term ; (6) If entered into for a single adventure or undertaking, by the termination of that adventure or undertaking ; (c) If entered into for an undefined time, by any partner giving notice to the other or others of his intention to dissolve the partnership. In the last-mentioned case the partnership is dissolved as from the date mentioned in the notice as the date of dissolution, or, if no date is so mentioned, as from the date of the communication of the notice. XXXIII. (1) Subject to any agreement between the partners, every partnership is dissolved as regards all the partners by the death or bankruptcy of any partner. XXXVI. (1) Where a person deals with a firm after a change in its constitution he is entitled to treat all apparent members of the old firm as still being members of the firm until he has notice of the change. ^^° (2) An advertisement in the London Gazette as to a firm whose principal place of business is in England or Wales, in the Edinburgh Gazette as to a firm whose principal place of business is in Scotland, and in the Dublin Gazette as to a firm whose principal place of business is in Ireland, shall be notice as to persons who had not dealings with the firm before the date of the dissolution or change so advertised.^" (3) The estate of a partner who dies, or who becomes bankrupt, or of a partner who, not having been known to the person dealing with the firm to be a partner, retires from the firm, is not liable for partnership debts contracted after the date of the death, bankruptcy, or retirement respectively. '''^ "" It is suggested that this phrase does not alter the earlier law as to knowledge (infra, p. 246) either here or in s. 38. See Stroud's Judicial Dictionary, sub voce knowingly, wittingly. "1° This ' notice ' includes knowledge however 'acquired — Aytoun v. Dundee Banking Co., 1844, 6 D. 1409 ; Bertram, infra, ^^^. See the rule in this and next sub- section, at common law, stated by Cresswell J. in Earrar v. De Elinne, 1 Car. & K. 580. "I See, in Scotland, M'MOlan v. Walker, 1814, Hume 755 ; Sawers v. Tradeston VictuaUing Soc, 28th Eeb. 1815, E.G. 233 ; Campbell v. M'Lintook, 1803, Hume 755 ; Bertram v. M'Intosh, 1822, 1 S. 290 (advertisement admittedly seen) ; Hay V. Mair, 27th Jan. 1909, E.G. 102 (though there was no firm name). But see ^^^. 2" See Aitken 8 S. 446. Charles & Co., 1830, HOLDING OUT 245 XXXVII. On the dissolution of a partnership or retirement of a partner any partner Right of may publicly notify the same, and may require the other partner or partners to concur for ?ot-fif ffjg. that purpose in all necessary or proper acts, if any, which cannot be done without his or solution, their concurrence. XXXVIII. After the dissolution of a partnership the authority of each partner to Continuing bind the firm, and the other rights and obligations of the partners, continue notmthstand- partners for ing the dissolution so far as may be necessary to wind up the affairs of the partnership, purposes of and to complete transactions begun but unfinished at the time of the dissolution, but not otherwise. Provided that the firm is in no case bound by the acts of a partner who has become bankmpt ; but this proviso does not affect the liability of any person who has after the bankruptcy represented himself or knowingly suffered ^'^ himself to be represented as a partner of the bankrupt. In one of the leading cases on estoppel an example thereof was taken Actings or from one case of the holding out contemplated in the first of these sections -.^^ ' A retiring partner omitting to inform his customers of the fact, in the ' usual mode, that the continuing partners were no longer authorised to ' act as his agents, is bound by all contracts made by them with third ' persons on the faith of their being so authorised.' ^i* In one of the leading cases on proof of partnership it was observed : ' Where a man ' holds himself out as a partner or allows others to do it . . . he is then ' properly estopped from denying the character he has assumed and ' upon the faith of which creditors may be presumed to have acted. A ' man so acting may be rightly liable as a partner by estoppel.' ^^' Or, as put by Lord Shand in a Scots case regarding a non-continuing partner : ' That he may have had the liabihties of a partner I do not dispute, if ' the law be that a person in his situation was bound to advertise out ' and he did not do so ; but the ground of habihty would not be that ' he was a partner of the concern, either in a question with his fellow- ' partners or with persons outside, but that, having failed to advertise ' out of the concern, he continued to represent or hold himself out as a ' partner and that in consequence third parties were fairly entitled to ■ trade with the company on his credit, and, trading on his credit, were ' entitled to hold him Hable for the debts of the company. In short, I 'think the ground of Uabihty in that case would be representation as "=1 See supra, note to s. 14 (1) ; and see Hogg v. Skeeu, 1865, 18 C.B. N.S. 426, Lindley, Partnership (7th ed.), 243; 432, ^jer Willes J. In re Rowland, 1866, L.B. 1 Ch. 421 ; "= MoUwo, March & Co. v. The Court of Ex parte Hayman, 1878, 8 Ch. D. Wards, 1872, L.R. 4 P.C. 419, 435. Similar II phraseology is used by L. Selborne in Scarf V. Jardine, 2", 7 Ap. Gas. at p. 350. "• Freeman v. Cooke, 1848, 2 Exch. Other expressions are : lend liis name — 654, 663-4, per curiam. In a wide sense Waugh r. Carver, 1793, 2 Hy. Blacks. 235 ; the whole relation of partners and third use of the name— ^a; parte Watson, 1815, party is expUoable by personal bar, 19 Ves. 459 ; credit given on this repre- acoording to which each partner is barred sentation— De Berkom i: Smith, 1793, from disclaiming responsibility for acts of 1 Esp. 29 ; Dickinson v. Valpy, ^^o ; the firm or of another partner as such— Price v. Groom, 1848, 2 Exch. 542. 246 HOLDING OUT Knowledge — o£ third'party. Of defender. ' a partner and not partnership.' ^" In other words, this is a typical case of personal bar, which precludes by conduct the establishment of the truth, and for excellent reasons proceeds on a fiction. The material element is the state of mind of the person dealing with the firm, not of the former or present members of the firm.^"^' Certain of the requisites of personal bar are illustrated with much distinctness. Thus the person misled to his detriment must know of the defender's position, as having held himself out or having permitted someone else to hold him out as a partner. ' Formerly [in England] it ' was considered sufficient if the party was held out to the world as a ' member of the firm or company. Now, however, it is necessary that ' there should be direct evidence that the holding out should come to ' the knowledge of the plaintiff ; he need not hear or see the defendant's ' conduct ; it is enough that the fact has come to his knowledge.' ^'^ In the case from which these remarks are taken the defendant, interested in an inchoate mining company, permitted the captain of the mine, without contradiction, to represent him as a capitaHst from London who had a large interest in the mine and intended to work it vigorously. The captain repeated this to the plaintiff without mentioning the name, and even suppressing it, and the plaintiff supplied goods and lent money on the faith of the information. It will be observed that the information was received in the ordinary course of business, not by eavesdropping or casually or as a member of the pubUc^^^ Conversely, ' the holding one's-self out to the world 22" as a partner, as contradistinguished from the actual relation of partnership, imports at least the voluntary act of the party so holding himself out. It imphes the lending of his name to the partnership ; and is altogether incompatible with the want of knowledge that his name has been so used. Thus, in the ordinary instances of its occurrence, where a person allows his name to remain in a firm, either exposed to the public over a shop door, or to be used in printed invoices or bills of parcels, or to be published in advertisements, the knowledge of the party that his name is used and his assent thereto is the very ground upon which he is estopped from disputing his hability as a partner.' 221 In the case in question the name of the person sought to be charged had been inserted »" Mann v. Sinclair, 1879, 6 R. 1078 at p. 1087. In that case the defender's partnership had been latent and there had been an open change_ of firm, and he went free, even if the pursuer, as trustee of the bankrupt new firm, had a title to sue him. As to latent partners, s. 36, supra, sets aside Hay v. Mair, 27th Jan. 1809, F.C. 102. "' Gumey v. Evans, 1858, 3 H. & N. 122. "« Martyn v. Gray, 1863, 14 C.B. N.S. 824 at p. 839 ; Dickinson v. Valpy, infra, ^^o ; Brember v. Rutherford, 1901, 9 S.L.T. 6 ; and see 4 F. 62. See also supra, p. 160, on contracts at inception of companies. 219 In Vice v. Anson, 1827, 7 B. & C. 409, the fact of an interest in a company was unknown to the claimant. It was dis- tinguished in Ellis V. Schmock, 1829, 5 Bing. 521 ; see also Perring v. Hone, 1826, 4 Bing. 28; Pott v. Eyton, 1846, 3 C.B. 32. And see Code, s. 36 (3), supra. ^2° ' A lo6se expression,' per Parke J. in Dickinson v. Valpy, 1829, 10 B. & C. at p. 140. But there may be such publicity as shall infer knowledge, ibid. 221 Fox V. Clifton, 1830, 6 Bing. 776 at p. 794, per Tindal C.J. HOLDING OUT 247 without his knowledge in a list of subscribers to a proposed company.222 Both of these sorts of knowledge as concurrent requisites are laid down by Lord Lindley in his treatise on Partnership, and adopted by Lord Justice Kay. 223 ' First, the alleged act of holding out must have been ' done either by him or by his consent ; and secondly, it must have been ' known to the person seeking to avail himself of it.' It matters not what money arrangements, if any, have been made Retired between a retiring partner and the remaining partners, as to liability '^" "'"^' for loss on future dealings or right to profits, or indemnification for damages arising from continued use of name. ' If, retiring or coming ' into the trade, he suffer his name to be used, it is of no consequence ' whether he has a salary or sum of money to be paid by others or to be ' got out of the profits. It is the use of the name that makes him Hable, ' as one of the persons by and to whom everything is bought and sold.' 224 One induced by promises of irresponsibility or by fraud to hold himself out as a partner is not thereby relieved from liability to third parties who have been induced by his conduct to give the company credit and have nothing to do with the promises or fraud. 225 In the case at least of an innominate firm, where its name gives no information as to the parties composing it, a retired partner does not hold himself out as partner by refraining from notifying or advertising himself out, if the creditor in later transactions knew not of his having been a partner, either from actual direct transactions or from public notoriety.226 The retiring partner and the estate of a deceased partner are, of course, Hable for obUgations incurred before the retirement or death. 22' The retainer of a solicitor is an entire contract by which he undertakes to carry on the action to its termination, and he can recover expenses from dormant partners, of whom he knew nothing, in an action begun before and con- tinued after their retirement. 228 If the proper notification of a retire- ment be given by circular and advertisement, the mere fact that the retiring partner allows the continuing partners to carry on the business in the old firm name is not such a holding out as makes him liable for supervenient debt, at least when incurred by the new firm to one who ^^^ As to unauthorised use of name, the firm, but that his name was to appear other than in trade rivalry, see Walter for a time ; but there was also apparently V. Ashton, [1902] 2 Ch. 282, 294, and a collateral obligation by that partner, oases there — ' turning upon estoppel by 225 Collingwood v. Berkeley, 1863, 15 conduct' ; Bourne v. Freeth, 1829, 9 B. & c_b_ j^g. 145 ; Maddick v. Marshall, 1864, C. 632. 17 C.B. N.S. 829. ^«» In BaumvoU Manufactur v. Gilchrest ,,, ^^^^^ ^ WhaUey, 1830, 1 B. & Ad. & Co., [18921 1 Q.B. at p. 263. In editions ^^ -^^ . ^^^^^ ^ g^^^^^_ jggg^ later than the 4th the words are either ^ ^^ ^^ ^^^^ ^^ j„_j^ ^^^^ • have been done or knowingly suffered by ^^^^ ^^^ p^^^^ j ' "^^ 'iS^ parte Watson, 1815, 19 Ves. 459, ^ '" MiJliken v. Love, 1803, Hume 755 ; m,per Eldon L. Ch. In Brown v. Leonard, Ramsay s Exrs. .. Grahame, 18th Jan. 1914. 1816, 2 Chitty 120, before the plaintiff ^•<^- ^1^- became holder of a firm's acceptance, he "'« Court v. Berlin, [1897] 2 Q.B. 396 ; knew that one of the partners had left Kinnear v. Thomson, 1830, 8 S. 512. 248 HOLDING OUT Issues — partner, oi not partner yet liable. SearJ V. Jardine. had not dealt with the old firm.^as An obvious and marked change of style may be sufficient notification to put old customers on their inquiry, even though' a retiring partner left money in the business.^'* The facts and pleadings reveal a true altercteitive — partner, or liable though not partner. One who stands in the latter position, though he may be sued in order to have his liability estabUshed,^^i cannot, therefore, be charged on a decree taken out against, or bill accepted by, the firm.^^'' The issues sent to a jury are also true alternatives.^^' And an old cus- tomer of the firm may be put to his option. This was so in the notable case of Scarf v. Jardine.^^* There had been a covirse of business between J. and the firm of E. & Co., which consisted of S. and E. — the name of S. being therefore not apparent (as is the case also in innominate firms). S. retiring in July did not give notice of his retirement until the following February. In the interval E. took B. as partner, and J. supplied goods in ignorance of the substitution. Not being paid the price, he sued the new firm and proved in its bankruptcy. He then sued S. as partner by estoppel. It was held that he could not succeed. He might either have attacked E. and S. (the latter on the ground of holding out), or E. and B. on the ground that his contract was actually made with them ; but he could not sue all three jointly. ' The two principles are not capable of ' being brought into play together ; you cannot at once rely upon estoppel ' and set up the facts ; and if estojDpel makes A. and B. liable and the facts ' make B. and C. liable, neither the estoppel not the facts nor any com- ' bination of the two can possible make A., B., and C. all liable jointly.'^^' It would have been different if the name of S. had been originally and had remained after his retiral part of the style of the firm, and J. had reasonably relied on his credit and believed that the only change made was the addition of B. as a new partner. 2^* The last-cited case is a good illustration of what not uncommonly happens. The action was against A. and C. for the price of goods furnished to A., C. & Co., and the question was whether A. was hable. The jury, with the approval of the Court, held him not liable qua partner ; but found him liable as having held himself or allowed himself to be held out as partner ; and the Court upheld the verdict. The main facts were that A. and C. had for three years traded as A. & Co. Then A. retired and C. intimated to the pursuers and others, in the knowledge of A., that C. would carry on as A., 0. & Co. A. took no steps to notify that he was not the A. of the new firm, and at '^' Newsome v. Coles, 18H, 2 Camp. 617 ; In re Fraser, [1892] 2 Q.B. 633 (he had the means of knowledge). *'" Dunbar v. Bemmington, Wilson & Co., 10th Mar. 1810, F.C. 620. 231 Davis V. Hyman & Co., [1903] 1 K.B. 854. 232 Brember v. Rutherford, 1901, 4 F. 62 ; Wigram v. Cox, [1894] 1 Q.B. 792. 22' See Gardner v. Anderson, 1862, 24 D. 315. 221 1882, 7 Ap. Gas. 345; and see, in Scotland, Fleming v. M'Nalr, and M'Nair v. Fleming, 1812, 5 Pat. 632, 639. In Scarf the theory of novation was rejected. A case described as converse to Scarf is British Homes Ass. Corp. v. Paterson, [1902] 2 Ch. 404. 225 Per L. Ch. Selborne at p. 350. 22" Gardner v, Anderson, supra ; Lindley, Partnership, 8th ed., 81, 242. HOLDING OUT 249 the trial could point to no other A., and the pursuers thought there was only an addition to the firm.^^' But the mere continued use of a retiring partner's name will not involve him in liability for future obligations.^'* The second subsection of section 14 of the Partnership Code, which Partner provides that, when after a partner's death the partnership business is ^"^^^ ' continued in the old firm name, the continued use of that name, or of the deceased partner's name as part thereof, shall not of itself make his executors or administrators estate or effects hable for any partnership debts contracted after his death, is a short statement of the pre-existing law. So that these persons cannot obtain an interdict or injunction against such continued use ; ^'^ nor be answerable for what after his death is done with things deposited with the firm during his life.^*" A possible compUcation was thus described by Lord Eldon : ^*^ 'I conceive ' that the death of a partner of itself works a dissolution of the partner- ' ship, and I am not prepared to say, notwithstanding all I have read ' on the subject, that a deceased partner's estate becomes liable to the ' debts of the continuing partners for want of notice of such dissolution. ' If, however, a surviving partner deals with the customers in the character ' of executor as well as partner, that circumstance makes it a difierent ' question ; for as executor he has a right to bind his testator's estate.' ^** 2" See also other circumstantial Scots 239 Webster v. Webster, 1791, 3 Swanst. cases — Stocks v. Simpson & Co., 1905, 490 note. As to injunctions obtainable by 13 S.L.T. 43, 422 ; Boulton c. Mansfield, A. against B.'s holding him out as partner, Ramsay & Co., 1787, 3 Pat. 70 ; Wright v. see Thynne v. Shove, supra, and cases Gardner's Trs., 1831, 9 S. 721 ; Lindesay v. there. ■"■"fij^'j^u »^ ^'^^\a noom 1 nv. r,^^ "" Houlton's case; Brice's case, 1816, '^^ Burohell v. Wilde, [1900] 1 Ch. 551 ; Townsend v. Jarman, [1900] 2 Ch. 698, ^ ^^"^^ ''^*'' ''^"• 705 (engraved name). The decision contra 211 i^ Vulliamy v. Noble, 1817, 3 Mer. in WiUiams v. Keats, 1817, 2 Stark 290, 593 at p. 614. may be doubted ; but scarcely Dolman v. Orchard, 1825, 2 C. & P. 104 ; nor Brown "^ The better opinion in England seems V. Leonard, ^^K See the curious case- of to be that in regard to ordinary business Thynne v. Shove, 1890, 45 Ch. D. 577 responsibilities this element is immaterial (business cards, with retired partner's — Lindley, Partnership, 7th ed., 78, 1647, name, thrown off anew). and cases there. CHAPTEK VIII BAR BY NEGLIGENCE Nseligonce denned. The negligence here contemplated is confined by the scheme of this volume to negligence connected with contract as distinguished from wrong or tort. In as much as the word does not in ordinary use connote duty, and in as much as in law breach of some duty is necessarily involved, neghgence may be sufficiently described as undutifulness, which is not wilful, and leads to a change in the position of someone towards whom the duty is owed. If that be so, it may be suggested that Lord Chancellor Selborne, in describing a phase of estoppel by omission, unnecessarily introduced the terms neghgence and neglect in the following passage : ^ There may be omission or neghgence equivalent in practical effect to acts ; because where there is something which a person ought to do and must be presumed to know that he ought to do, but does not do, the consequence is that the omission may be regarded as due to what is called gross or wilful neghgence which is equivalent to an act. But it must be something which raises a positive equity against him, upon the principle which in equity, as distinct from law, is conveniently designated by the term " estoppel." In other words, the man who has conducted himself in such a manner is not entitled to deny the truth of his own representations, if it be a case of express representation — he is not entitled to deny being bound by the natural consequences of his own acts, if it be a case of positive acts ; he is not entitled to refuse to abide by the consequences of his own wilful and unjustifiable neglect, if that is the nature of the case.' ^ ' If a man in the course of business volunteers to make a statement on which it is probable that in the course of business another will act, there is a duty which arises towards the person to whom he makes that statement. There is clearly a duty not to state a thing which is false to his knowledge, and, further than that, I think there is a duty to take reasonable care, that the statement shall be correct.' ^ 1 Dixon V. Muckleston, 1872, L.R. 8 Ch. 155 at p. 160. It is tiie brocard ' culpa ' lata equiparatur dolo,' and the conduct is a mode of dishonesty — see Derry v. Peek, 1889, 14 Ap. Gas. 337. * See also, in a case of carelessness, the doubtfully accurate use of the words ' own 250 ' wrong ' and ' own default ' in Halifax Union v. Wheelwright, 1875, L.R. 10 Ex. 183, 192. '" Seton V. Lafone, 1887, 19 Q.B.D. 68, per L. Esher (warehouseman misled by mistake of his servants). BAR BY NEGLIGENCE 251 Seeing that the question of bar by neghgence mainly arises in the Liability of law of contract where fraud, forgery, or theft is alleged and proved, the innocent general rule first enunciated by Justice iVshhurst in a famous case,* and P""""*- since then much founded on ^ and canvassed,® may be quoted in the outset : ' We may lay it down as a broad general principle, that, wherever ' one of two innocent persons must suffer by the acts of a third, he who ' has enabled such third person to occasion the loss must sustain it." But subsequent cases ' show that the words " enabling a person to occa- ' " sion the loss " must be understood to mean, by some act, conduct, ' or default in the very transaction in question : see Freeman v. Cooke.'' ' The correct and accepted rule ^ seems to us to be that which is thus ' stated by Blackburn J. in his judgment in Swan v. North British Austral- ' asian Co.,^ where, referring to the judgment of .Wilde B. below,!" he ' says " th^t he omits to qualify the rule (he had stated) by saying that ' " the neglect must be in the transaction itself and be the proximate ' " cause of leading the party into that mistake ; and also must be the ' " neglect of some duty that is owing to the person led into that belief, ' '■' or, what comes to the same thing, to the general public, of whom ' " that person is one, and not merely neglect of what would be prudent ' " in respect to the party himself, or even of some duty owing to third ' " persons with whom those seeking to set up the estoppel are not ' " privy." ' ^^ Of this addendum the point regarding ' proximate (or ' real ^^) cause ' is best illustrated by the cases Bank of Ireland v. Evans's Charities,^* and Sunn (supra) ; ^^ and the point of duty, as a necessary - Lickbarrow v. Mason, 1787, 2 T.R. 63 ' afterwards, as against such persons, to at p. 70 ; applied in Waldron v. Sloper, ' show that state of facts did not exist.' 1852, 1 Drew 193. ^' Per curiam in Arnold v. Cheque Bank, 5 Nash V. De FreviUe, [1900] 2 Q.B. 83 ; 1876, 1 C.P.D. 578 at pp. 587-8. Adopted Parquharson v. King, [1901] 2 K.B. by Lord Parmoor in London J.S. Bank v. 708. Macmillan, [1918] A.C. 836; in Bell v. ' Farquharson v. King, [1902] A.C. 342 Marsh, supra, by Lord Esher ; in Cairncross (' far too wide ') ; Bank of England v. v. Lorimer, 1860, 3 Macq. 829 ; and per Vagliano, [1891] A.C. 169, 171, referring Cockburn C.J. in Johnson v. Credit to Arnold i: Cheque Bank, infra ; Bimmer Lyonnais Co., 1877, 3 C.P.D. 32. The rule V. Webster, [1902] 2 Ch. 169 ; Bell v. in Lickbarrow was preferred to estoppel Marsh, [1903] 1 Ch. 528. See also for the in London & South-Westem Bank v. principle, Vickers v. Hertz, 1871, L.R. 2 Wentworth, 1880, 5 Ex. D. 96 (bill accepted So. Ap. 113, 9 M. H.L. 65 ; Traill v. blank ; in hands of holder in due course ; Smith's Trs., 1876, 3 K. 770; Rose v. proof of forgery in drawing and indorse- Spavens, 1880, 7 R. 925; Gabarrow v. ment refused). Kreeft, 1875, L.R. 10 Ex. 274. ^' Not an improvement — see the opinions ' 1848, 2 Exch. 654. in Seton v. Lafone, 1887, 19 Q.B.D. 71, 74. * See per L. Esher in Bell v. Marsh, It had been translated by one of the judges [1903] 1 Ch 528. there as ' direct and immediate ' — Coventry » 1862, 2 H. & C. 175 at p. 181. v. G.E. Ry. Co., 1883, 11 Q.B.D. at p. 780, ■" 7 H. & N. atp. 633. It stated : 'If per Brett M.R. Lord Sumner, in Weld- ' he has led others into the belief of a certain Blundell v. Stephens, [1920] A.C. 989, ' state of facts by conduct of culpable prefers ' direct.' ■ neglect calculated to have that result, " 1855, 5 H.L.C. 389. • and they have acted on that belief to " See also Ex parte Swan, in re N.B.A. ' their prejudice, he shall not be heard Co., 1859, 7 C.B. N.S. 400. 252 BAR BY NEGLIGENCE Bank of Ireland v. Evans's Charities. Swan V. North British Australasian Co. element, by the case of Young v. Grote ^^ and the multitude of decisions, mainly English, which have succeeded it. In Bank of Ireland v. Evans's Charities the secretary of the latter (a statutory corporation which owned consols) without their authority applied their seal (innocently witnessed) to five separate powers of attorney for the purpose of uplifting and did accordingly uplift consols. He misappropriated the proceeds. Thereupon the Charity trustees authorised an agent nevertheless to transfer the stock, but the Bank, with which the stock was registered, refused the demand. The jury in the action against the Bank were charged that, if in these circumstances the trustees of the Charities had so negligently conducted themselves as to contribute to the loss, the verdict must be given for the Bank. This was held to be a misdirection. The English judges were consulted by the House of Lords, and by the mouth of Parke B. (afterwards Lord Wensleydale) returned an opinion to that effect, which was adopted by the Peers. ' The evidence given, which was only of a supposed negligent custody of their corporation seal by the trustees, in leaving it in the hands of Mr Grace whereby he was enabled to commit the forgeries, is not sufficient evidence of that species of negUgence which alone would warrant a jury in finding that the [trustees] were disentitled to insist on the transfer being void. . . . The negligence . . . must be in or immediately connected with the transfer itself. . . . The transfer was not the necessary or ordinary or likely result of that negligence.' ^* Or, as put by Lord Chancellor Cranworth : i' ' There must be either something that amounts to an estoppel or something that amounts to a ratification in order to make the negligence a good answer.' ^^ In the much-debated case of Swan,^^ S., owner of shares in a company, transferable only by deed executed by transferor and transferee, em- ployed a broker, 0., to sell for him shares in another company. 0. represented to S. that it was necessary for S. to sign ten blank forms of transfer. These S. signed, sealed, and delivered to 0. for the above purpose. 0. stole the certificates for the first-mentioned shares from a box deposited in a bank for safe custody ; filled up two of the forms as transfers of these shares ; forged the attestations ; and delivered them and the certificates to bond fide purchasers, who were thereafter placed by the first-mentioned company on the list of shareholders in place of S. It was held that these transfers were void, and that there had been lii 1827, 4 Bing. 2.53. 1" 5 H.L.C. 409-10. " Ibid., p. 513. 1* It was pointed out (pp. 411, 415) that Coles v. Bank of England, 1839, 10 A. & E. 437, if sound, turned on ratifica- tion. Other cases were figured, e.g. lost cheque-book, unlocked drawer, and negli- gent keeping of goods. Staple of England V. Bank of England, 1887, 21 Q.B.D. 160, is indistinguishable. " The reports are : 1859, 7 C.B. N.S. 400 ; 1862, 7 H. & N. 603 ; 1863, 2 H. & C. 175 ; and the course of the case was that Swan lost in C.P., there being an equal vote ; won in Exch. (2 to 2, junior judge withdrawing) ; and won in Exch. Ch. by 6 to 1, the one being Keating J., who was against him below and adhered to his opinion. BAR BY NEGLIGENCE 253 no such negligence on the part of S. as to bar him from insisting that the property in the shares had not p^assed. If there was negligence or over- confidence, it was not the proximate cause of the loss.^" ' A person who ' does not lock up his goods, which are consequently stolen, may be said ' to be negligent as regards himself, but in as much as he neglects no ' duty, which the law casts upon him, he is not in consequence estopped ' from denying the title of those who may have, however innocently, ' purchased these goods from the thief.' ^^ These doctrines of ' proximate cause ' and ' in the transaction (or other ' transfer) itself ' have been followed with reference to a deUvery order '""^"'**'"'"*' which had been tampered with ; 22 to the lack of examination from time to time of a bank pass-book by a customer ; ^^ to a blank acceptance kept in an unlocked drawer and stolen or found there ; 2* to the ex- amination of title to debateable land on boundary ; ^^ to knowledge by beneficiaries of the intemperate habits of a trustee who turned out to have forged an assignation of a bond belonging to the trust ; ^s to failure by trustees to observe that the period of a mortgage had elapsed and that they had not signed dividend warrants after the first year of the trust, where the loss was due to the forgery of their law agent ; ^' to the mere possession of a letter of credit (which is not a negotiable instrument) by a clerk who had stolen it and thus got payment of a forged cheque, for the clerk's masters had done nothing to induce the paying bank to believe the forgery to be genuine, and the bank should have made inquiry ; ^^ to such deviation from the proper course of business as is -° There was really no negligence. 0. that there was no duty to anyone. Bram- had a duplicate key outwith the knowledge weU L.J. quoted the old saw that estoppels of S. The question was raised whether are odious). See a curious case in which estoppel by executing instruments in blank negotiable bonds were stolen by the owner's extended beyond negotiable instruments manager ; handed to holders in due course ; and to deeds. See 7 C.B. N.S. 440 ; from them got by the thief through fraud ; 2 H. & C. 184, 189. It is suggested that it and by him returned to the true owners — might and should in an appropriate case ; London and County Banking Co. v.. London see infra, p. 262 ; and Union Credit Bank w. and River Plate Bank, 1888, 21 Q.B.D. Mersey Docks, [1899] 2 Q.B. 205, 210, 535. In Arnold v. Cheque Bank, supra, ^^. where the accuracy of this part of the a clerk stole a draft from a letter-box, headoote in Swan, 2 H. & C. 175, is and it was held not to be the duty of his questioned. masters to send a letter of advice, as a ^1 Unless in England in market overt. collateral precaution, with their foreign Per Blackburn J., 2 H. & C. 181. paper. ^2 Union Credit Bank, supra ; Swan's ^' Bell v. Marsh, supra, *. case is distinguished in an English con- ^* Adair's Factor v. Connell's Trs., 1894, veyancing case — Hunter v. Walters, 1871, 22 R. 116 (non-examination from time to L.R. 7 Ch. 75. time of the trust securities by a co-trustee ^' Kepitigalla Rubber Estates v. National was not proved). Bank of India, [1909] 2 K.B. 1010 (taking " WaUace's Trs. v. Port Glasgow out pass-book and returning it without Harbour Trs., 1880, 7 R. 645. In Stewart remark is not a settlement of accounts v. Central Bank of Scotland, 1859, 21 D. though it has a pencilled note of the 1180, there was not sufficient evidence of balance, ibid.) ; and Walker v. Manchester the factor's fraud, and the question here etc. Banking Co., 1913, 108 L.T. 728. did not arise. 2^ Baxendale v. Bennett, 1878, 3 Q.B.D. 2* Orr & Barber v. Union Bank of Scot- 528 (partly on the ground, -per Brett L.J., land, 1854, 1 Maoq. 513, 523, revg. 14 D. 395. Grote. 254 BAE BY NEGLIGENCE unusual but ' not irregular or fitted in itself to excite a suspicion that ' there was something wrong ' ; ^^ to the indorsation of both duplicates of a bill of exchange or bill of lading =*" (but not to the issuing of two delivery- orders for the same goods ^^) ; to silence on an inquiry by a company as to an alleged transfer of stock ; ^^ to the mere possession of title-deeds by a fraudulent co-trustee ; ^^ to failure to register a will timeously, thus facilitating a personation ; ^* to leaving the key of a safe, in which were bonds, in the hands of. a secretary. ^^ Duty a This requisite (of proximate cause and negUgence in the transaction requisite. itself) is further insisted on and illustrated in the class of cases in which the prominent feature is the insistence on proof of duty owing by mis- leader to misled. A recent decision of the House of Lords ^* makes it superfluous to go into detail here in regard to any except the terminal cases — viz. Young v. Grote and the decision referred to. Voung Y. Young V. Grote ^' has survived much criticism and the stigma sought to be put upon it by a great judge as ' that fount of bad argument.' ^* The facts have been judicially set out as follows : ^* Mr Young, when leaving home for some days, left with his wife five blank cheques signed by him, and desired her in his absence to have them filled up for such sums as the purposes of his business might require. Mrs Young wanted £50, 2s. 3d. to pay wages, and delivered one of her husband's blank cheques to Worcester, a clerk of his, authorising him to fill it up for £50, 2s. 3d. What followed is best stated in the words of the award,*" as set out in the report of the case : ' Worcester accordingly See also British Linen Co. v. Caledonian ^' Cottam v. Eastern Counties Ry. Co., Insurance Co., 1861, 4 Macq. 107, 114 ; 1860, 1 J. & H. 243. ' It would be a very Coates V. L. & S.W. Ky., 1879, 41 L.T. 553 ; ' serious doctrine, if the fact that one of Agra and Masterman Bank, 1867, L.R. 2 Ch. ' three trustees is allowed to have possession 391. Negligence in regard to fidelity and ' of the title deeds of the trust should be other guarantees is so mixed up with ' held to create such an interest in him as concealment that it is treated elsewhere ' to enable him to give a title to any other (Chap. IX.). ■ person with whom he may deposit the ^° Bank of England v. Vagliano Brothers, ' deeds.' [1891] A.C. 107, 127, 136, 159. As to the a* Cooper v. Vesey, 1882, 20 Ch. D. 611. negligence of the bank's customer, see '' Bechuanaland Exploration Co. v. 22 Q.B.D. 127 ; 23 Q.B.D. 243. Of. Ashby London Trading Bank, [1898] 2 Q.B. 658 ; V. Blackwell, 1.765, 1 Amb. 503 ; Hildyard followed in Edelstein v. Schuler & Co., V. South Sea Co., 1722, 2 P. Wms. 77; [1902] 2 K.B. 144, 155 ; Webb);. Alexandria Robarts v. Tucker, 1851, 10 Q.B. 560 ; Water Co., 1905, 93 L.T. 339 ; Venables v. Woods V. Thiedemami, 1862, 1 H. & C. Baring Brothers, [1892] 3 Ch. 527. As to 478, 495. Post Of&ce orders — ^Fine Art Society v. 3° Sooiete Generale v. Metropolitan Bank, Union Bank of London, 1880, 17 Q.B.D. 1873, 27 L.T. 849. 705. As to bearer paper in the widest 31 Coventry v. G.E. Ry., 1883, 11 Q.B.D. sense, see these cases. 776 ; Carr v. L. & N.W. Ry., 1875, L.R. ^e London J.S. Bank v. MacmiUan, 10 C.P. 307. [1918] A.C. 777. '2 Coates V. L. & S.W. Ry., supra, ''■'■, ^7 ^827^ 4. gjjig, 253. Johnston v. Renton, 1870, L.R. 9 Eq. 181. ^8 gy l. Esher M.R. in ScholEeld «. In both cases the forger made reply. L. Londesborough, [1895] 1 Q.B. 536. C/. Hartj). Frontino, 1870, L.R. 5Ex. Ill; as By L. Ch. Einlay in [1918] A.C. Savage v. Poster, 1722, 1 Wh. & Tudor 790. L.C. 469. 40 The dispute was sent to arbitration. BAR BY NEGLIGENCE 255 ' filled it up with that sum and showed it so fiUed up to Mrs Young, ' and she desired him to get it cashed ; but the check, when it was so ' filled up and shown to Mrs. Young, presented the following appearance : ' the first line contained in print the names of the bankers ; the second ' line contained the words Pay wages or hearer, the word wages only being ' in writing ; and the third line contained the words fifty f mends and the ' figures 2s. 3d. ; but the word fifty commenced in the middle of that ' third line, and with a small letter, so that ample space in that line was ' left for the insertion of other words before the word fifty ; and there ' were at the bottom of the draft the figures 50.2.3, but the figure 5 ' was at a sufficient distance from the letter £ to allow another figure ' to be inserted between it and the letter £.' Worcester afterwards fraudulently inserted the words ' Three hundred and ' before the word ' fifty,' and the figure ' 3 ' before the figure ' 5.' The alterations were so made that they could not have been detected by any ordinary dili- gence, and the bank paid to Worcester £350, 2s. 3d. against the cheque, and debited the customer with the amount. He objected, alleging that his draft was only for £50, 2s. 3d. The award then proceeds as follows : ' The arbitrator thought that it was his draft for that sum only, but he ' thought, also, that he had been guilty of gross negligence by causiag his ' draft to be deUvered to Worcester (in whose writing the body of it had ' been filled up) in such a state that the latter could and did, by the mere ' insertion of other words, make it appear to be the draft of Peter Young ' for the larger sum ; and that as he, partly by his negligence, had caused ' the bankers to pay the larger sum, he was bound to make good to them ' the loss, which, by reason of his negligence, they had sustained by paying ' that sum.' The Court thought the arbitrator to be right, and proceeded on negHgence apart from or alongside of the finding of gross negligence, and reheved the bank of the claim against it.*^ The facts in the case of London Joint Stock Bank, Limited v. Mac- London Join millan & Arthur *2 are well summarised in the head-note : A firm, who 'Ifacmiiian. were customers of a bank, entrusted to a confidential clerk, whose integrity they had no reason to suspect, the duty of filUng in their cheques for signature. The clerk presented to one of the partners of the firm for signature a cheque drawn in favour of the firm or bearer. There was no sum in words written on the cheque in the space provided for the writing, and there were the figures ' 2.0.0 ' in the space intended for figures. The partner, going out to lunch and with his hat on, and on representation, as had happened repeatedly, that petty cash was wanted, signed the cheque. The clerk subsequently added the words ' one hundred and ' twenty pounds ' in the space left for the words, and wrote the figures *'■ The Court founded mainly on a of Pothier in Hall v. Fuller, 1826, 5 B. passage in Pothier on the duty in such & C. 750. circumstances of customer to banker — Contrat de Change, ed. 1809, p. 61 ; and " [1918] A.C. 777. Head-note, as sup- see [1896] A.C. 524-7 in Scholfield v. plemented by a fuller statement by the E. Londesborough ; and an earlier citation Lord Chancellor, see pp. 787-8. as ratio ? 256 BAR BY NEGLIGENCE ' 1 ' and ' ' respectively on each side of the figure ' 2,' which was so placed as to leave room for the interpolation of the added figures. The clerk presented the cheque for payment at the firm's bank and obtained payment of £120 out of the firm's account. The bank was held to be entitled to debit the firm's account with the full amount of the cheque. In both of these cases (in the former imphcitly, in the latter explicitly) the ground of judgment was that a customer of a bank owes a special duty to the bank in drawing a cheque to take reasonable and ordinary precautions against forgery or tampering ; and if (as had happened in these cases) the amount of the cheque is increased by forgery, as the natural and direct result of the neglect of the precautions, the customer must bear the loss as between himself and the banker. Lord Shaw of Dunfermhne laid down the broad proposition that, as the presentation of a cheque is the point of time at which the obligations of customer and banker meet,. the responsibility for a genuine cheque and all that has happened to it between its signature and its presentation is not, and ought not to be, laid upon the banker, e.g. for a crime committed during this period of the customer's responsibility.*^ Qu. Estoppel Estoppel is not mooted in Young v. Grote ; ** and the ratio decidendi in the later case is based on the correlative obligations of the banker, when in funds, to honour his customer's cheques without delay, and of the customer to draw them in such a form as will enable the banker to fulfil his obligation, and therefore in a form that is clear and free from ambiguity.*^ Estoppel is not there insisted on ; but is suggested as a general principle, covering the special duty of the customer, and essential for the conduct of business between members of every well-ordered community, as a rule of evidence.** And it is a feasible ground — of which many illustrations have been given in this volume — if, at common law and under section 20 of the Bills of Exchange Code (relating to inchoate bills and notes — includiug cheques) it is generally true that ' if a person ' signs a piece of paper and gives it to an agent with the intention that ' it shall in his hands form the basis of a negotiable instrument, he is not ' permitted to plead that he hmited the power of his agent in a way not ' obvious on the face of the instrument.' *' The ratio of the cases has also been explained as the avoidance of circuity of action.*^ But the consideration which weighed with the House of Lords was that no one *' [1918] A.C. 824-5. contra in Swan, supra, i', at 2 H. & C. ** This case was in 1827, ten years 1^^- before Piokard v. Sears, supra, p. 2, in *' ^'■'^ Fletcher Moulton L.J. in Smith v. which the law of estoppel was first con- Prosser, [1907] 2 K.B. 752, adopted by L. soioualy elaborated. Parmoor, [1918] A.C. 831. This was a 45 riQisn A n aiK t tj u • possible mfio in Young i;. Grote, ^' — see per " [1918] A.C. 815, yerL.Haldane. ^ Watson in Scholfield v. E. Lond^- «« Per eund., pp. 817-8 ; see also per borough, [1896] A.C. 535 ; Robarta v. L. Finlay, p. 793 ; per L. Parmoor, p. 830 ; Tucker, 1851, 16 Q.B. 560, 579. Bank of Ireland, supra, ", per L. Cran- " g^an, supra, i», per Cockbum C.J. at worth, 5 H.L.C. 409. Cockbum C.J. is 2 H. & C. 190 ; per L. Haldane, [1918] 818. BAE BY NEGLIGENCE 257 is entitled withotit excuse to rely on a forgery,"" and is expressed by Lord Finlay near the close of his opinion : "^ ' The ground on which Young v. ' Grote proceeded was, according to the judgment of three out of the ' four judges, simply this, that if a customer in drawing a cheque neglects ' reasonable precautions against forgery and forgery ensues, he is liable ' to make good the loss to the banker, and that the fact that a crime has ' to intervene to cause the loss does not make it too remote. Indeed, ' forgery is the very thing agaiast which the customer is bound to take ' reasonable precaution. Leaving blank spaces in the cheque is the ' commonest way in which forgery is facihtated, and to lay down as a ' matter of law that it is no breach of duty would be a somewhat startling ' conclusion.' Put briefly, there was a duty to the bank, and the neglect of it was ' in the transaction itself.' The arguments for the parties in the London Joint Stock Bank case, intervening and Lord Finlay's elaborate discussion, sedulously refer to all the dicta °*^^^" which had been delivered in the interval concerning the soundness of the decision, and the exact grounds thereof, in the case of Young v. Grote ; ^^ and it would be superfluous to recapitulate them here. But the gist of some of these decisions may be briefly noted, in so far as they have not already been dealt with. A clerk of a Poor Law Union forged indorsements on its orders, which were treated as cheques, and got payment from the bank, which was protected against having to pay again by an enactment, which is substantially the same as section 60 of the Bills of Exchange Code. He also increased the amount of some of the orders, and in these cases the bank was further protected by a finding in fact that it was misled by want of proper caution on the part of the Union officials in signing the orders.^^ Eighteen hogsheads of tobacco, lying in a neutral warehouse, were for advances pledged to a bank ; the owner, having repaid the advance secured by one hogshead, got from the bank a delivery order, blank as to quantity, which he fiUed in as for eighteen hogsheads ; he then got possession of and dehvered them aU to bond fide onerous recipients. The warehousemen were held not Hable in damages, seeing that the bank was estopped by its conduct from pleading that its authority was limited. ' If the plaintiffs [the bank] were entitled in evidence to give the true facts, they could show that the only authority with which they entrusted MchoUs was an authority to fill in the form so as to make it a delivery order for one hogshead, and that, therefore, as it now exists the deUvery order was not their order. But I do not think they can be allowed to give this evidence.' ^^ Again, two separate " E.g. Midland Ry. Co. v. Taylor, 1862, *^ Halifax Union v. Wheelwright, 1875, 8 H.L. 751 ; Barton v. North Staffordshire L.R. 10 Ex. 183. Estoppel was unneoes- Ry. Co., 1888, 38 Oh. D. 458 ; Mayor of the sarily disclaimed as a ground of judgment. Staple V. Bank of England, 1887, 21 Q.B.D. 160 ; Sloman v. Bank of England, 1845, ^' Unjon Credit Bank v. Mersey Docks, 14 Sim. 475. [1899] 2 Q.B. 205. Bigham J. here criti- '» [1918] A.C. 810-1. oises the semble in Swan, '», 2 H. & C. 175, as " See also the Scots case — Wallace's Trs. to confining estoppel by blank instruments V. Port Glasgow HarbourTrs., 1880, 7 R. 645. to negotiable instruments. 17 258 BAR BY NEGLIGENCE consignments were similarly pledged ; the advance on one of them was paid off; the owner presented to the bank a regular deUvery order appUcable to it ; the bank signed it ; the owner then added a description of the marks of the other, and obtained possession of both consignments. Here the bank showed no neghgence ; and the warehousemen were held Hable in damages.^* The last-mentioned consignments were pledged, after being received back, to another bank ; it was paid ; the goods were by it returned ; and it was plain that no action lay against this bank, for the whole transaction had been concluded before the fraud was discovered.^^ An old woman, who held consols, received at the Bank of England, without demur, constantly diminishiag dividends. She was accompanied by her nephew, a clerk in that bank, and the shrinkage arose from his selling large parcels of the stock by getting a woman to personate his aunt. The bank was held to go free on accoxmt of the aunt's negligence ; but the judgment can be supported (if at aU) only on the groxmd of ratification.^" Even if there be neghgence on the part of one who is deahng with a bank, it cannot be pleaded if the trans- action was brought about by the fraud of its agent.^' The judgment in a curious case ^^ has been doubted,^* but apparently without justifica- tion,*" where neghgence barred a plea of cancellation. The acceptor of a biU tore it ia two, but in such a manner as might have been done in order to transmit the parts separately, in presence of his friend who had failed to get it accepted, and threw the pieces down in the street. His friend picked them up, imited them, and the bill was now sued on by a bond fide holder in due course ; successfully, on the ground of the acceptor's neghgence. Again, cases may be contrasted in which alleged neghgence by a bank in deahng with crossed cheques has,*^ and has not,"^ operated estoppel. Doctrine So far at least as Britain is concerned, the result of a Colonial case *^ misapp e . ^ ^j^^ Judicial Committee of the Privy Council would not now be followed, ** as being a misapphcation of the doctrine set out in the follow- ing paragraph. Nothing in the following case supports the proposition ** Ibid. That there was ample space ^* Ingham v. Primrose, 1859, 7 C.B. for the alteration was not neghgencp ; N.S. 82. there was no breach of duty owing to the '"' Per Brett L.J. in Baxendale, supra, ^^. ■ warehousemen by the bank ; and the loss '•" Scholfield, supra, [1896] A.C. 538 ; was not the natural result of the nature of Nash v. Be FreviUe, [1900] 2 Q.B. 72, 89. the delivery order. "^ On s. 82 of the Code — Ladbrooke v. 65 j6j(2. Todd, 1914, 111 L.T. 43. , _, , T^ ■ .. T, , °^ Morison v. London County & W. " Coles V. Bank of England, 1839, -q^^^ ^19143 3 g-.B. 356; Crumplin ». i ^- !?■ I See Swan, .^pra, ", 2 H. -^^^^^^ j^j^t g^^^,^ -g^^^ 19^4^ ^09 L_T. ^-^ iJ Jo. cf" ^ "■ ^^^°f *' 1*^5' 856. On s. 79 (2)-Meyer & Co. v. Sze Hai 3 Q.B.D. 534. See also a case of persona- ^ong Co., [1913] A.C. 847 (met by contrary tion (m regard to an order and biU) estopijel) where there was no neghgence-Mead «. «3 Colonial Bank of Australasia .. Young, 1790, 4 T.K 28. MarshaU, [1906] A.C. 559. " Foster v. Green, 1862, 7 H. & N. 881 ; «» See it criticised by L. Finlay in Bank of Ireland, supra, p. 252 ; Johnston's MacmiUan's case at [1918] A.C. 807-10 ; Claim, 1870, L.R. 6 Ch. 212. and by L. Shaw of Dunfermline, 829. . BAR BY NEGLIGENCE 259 ' that as between banker and customer there is no negligence in drawing ' a cheque with blank spaces which faciUtate forgery.' ^^ Yet in the Colonial case the bank was made liable to pay the face value of cheques signed by two executors for small sums and easily alterable, and altered by the third executor (who drew the document) for increased amounts. There is no corresponding duty, and the result may be quite different, Non-banking where the case arises between the acceptor of a biU of exchange and a '^^^'^'' holder acquiring right to it after acceptance. This was the case in Scholfield V. E. Londesborough.^^ S. drew a bill for £500, with spaces ScAoZ/ieW v. so left as to facilitate his fraud. The stamp was sufficient to cover £4000. borougK^' After acceptance be altered the sum to £3500. A bond fide holder for value sued the acceptor for the larger sum. The latter was held to have fulfilled his whole obligation by paying the smaller sum into Court. The distinction is briefly put by Lord Watson : ' It does not, in my ' opinion, necessarily follow that the same rule [as in Young v. Grote] ' must be applied between the acceptor of a bill of exchange and a holder ' acquiring right to it after acceptance. The duty of the customer arises ' directly out of the contractual relation existing at the time between ' him and the banker who is his mandatory. There is no such connec- ' tion between the drawer or acceptor and possible future indorsees of ' a bill of exchange. The duty which the appellant's argument assigns ' to an acceptor is towards the public, or, what is much the same thing, ' towards those members of the public who may happen to acquire right ' to the bill, after it has been criminally tampered with. Apart from ' authority, I do not think the imposition of such a duty can be justified ' on sound legal principle.' ®^ In this distinction law and business con- venience concur, for ' the consequences of refusing acceptance of a draft, ' because there were blank spaces in it, might be serious. ... On the ' other hand, in the case of banker and customer, the manner in which ' the cheque is to be filled up is entirely in the hands of the customer.''^ ' Besides, it is not consistent with the general spirit of the law to hold ^ innocent persons responsible for not taking measures to prevent the ' commission of a crime which they may have no reason to anticipate.' ^^ The issue of an inchoate bill or note is an exceptional case both at common law and by statute. '" It has been left to this place to deal with the unauthorised yet efEective Bearer securities. " Ibid., p. 810. "' P^r J- FMay, [1918] A.C. 809, «« [1894] 3 Q.B. 660 ; [1895] 1 Q.B. 536 ; quoting L. Esher in [1895] 1 Q.B. 542. 11896] A.C. 514. There had been an «» Per L. Watson, [1896] A.C. 537. earlier unreported case— Adelphi Bank v. '» Bills Code, s. 20 ; expounded by Edwards in which the facts and result Bowen L.J. in Garrard v. Lewis, 1882, were similar— see 20 Sol. Journal 360; 10 Q.B.D. at p. 35, as a case of holding T18961 A.C. 540-2. Two old Soota oases out and ostensible authority. As to a were overruled as old-fashioned — j)er L. certified cheque — i.e. one shown on its face Watson, [1896] A.C. 542. to be drawn in good faith on sufficient " [1896] A.C. 537. See also remarks funds — afterwards altered in amount, see by other iudges, pp. ' 546, 547, 548, Imperial Bank of Canada u. Bank of 550. Hamilton, [1903] A.C. 49. 260 BAR BY NEGLIGENCE Possession of meicantile Eaper by rokers. transfer of such documents (if stolen or lost or delivered over) as are disposable without the intervention of the true owner — such as bearer bills, notes, scrip, or bonds. The effectiveness of the possession may be ascribed (a) to the custom of merchants which makes them transferable by mere delivery to a bond fide onerous holder, or (6) to the doctrine of personal bar operating by representation in the way of allowance of possession of the indicia of property, '^ or of neghgence in custody. In respect to neghgence in such cases there may be argued to exist a neglected ' duty that is owing to the persons led into [an erroneous] ' belief, or what comes to the same thing, to the general public of whom ' that person is one.' '^ This second explanation of the cases in question was first given in a leading case, where Government scrip {i.e. a promise by a foreign Government to give the bearer, after all instalments of the price have been paid, bonds for the amount paid, with interest) was bought by the appellant through a broker, was fuUy paid for, and was left in the hands of the broker, who fraudulently dehvered it to a banker in security of a loan to himself. '^ The banker was held not Uable either to restore the scrip or to pay damages. And Lord Chancellor Cairns held that, even if the scrip was not negotiable by deUvery, ' still the appellant is in the position of a person who has made a representation on the face of his scrip that it would pass with a good title to anyone on his taking it in good faith and for value, and who has put it in the power of his agent to hand over the scrip with this representation to those who are induced to alter their position on the faith of the repre- sentation so made. I am of opinion that on doctrine well established, of which Pickard v. /Sears '* may be taken as an example, the appellant cannot be allowed to defeat the title which the respondents have thus acquired.' '^ The negotiabihty by dehvery of bearer documents which are in ordinary mercantile use was finally established in a case,'* which also held that there was no neghgence inferring estoppel, where bearer debenture bonds were left in a safe of which the owner's secretary had a key. A much-debated question was set at rest by the House of Lords in " Sayro, p. 225. " Supra, p. 253 ; per L. Blackburn in Swan V. North British Australasian Co. " Goodwin v. Robarts, 476, 490. 1876, 1 Ap. Cas. '» 1837, 6 Ad. & E. 469 ; supra, p. 2. " Goodwin was foUowed on both grounds in BumbaU v. Metropolitan Bank, 1877, 2 Q.B.D. 194, though the instalments had not been fully paid and the issuer was a, foreign bank. " Bechuanaland Exploration Co. v. London Trading Bank, [1898] 2 Q.B. 658 ; supra, p. 254. See also Edelstein v. Sohuler & Co., [1902] 2 K.B. 144, 155; Webb, Hale & Co. v. Alexandria Water Co., 1905. 93 L.X. 339, where L. AlTerstone grumbled at the extension of such negotiability to English share warrants. In the absence of. evidence of a custom of British merchants, an instrument negotiable under the law of a foreign country is not negotiable in Britain, so as to give a bond fide holder for value a good title against the owner of the instrument, from whom it had been stolen — Picker ii. London and County Banking Co., 1887, 18 Q.B.D. 515 (bearer bohds stolen without the coupons). BAR BY NEGLIGENCE 261 1892." It is a well-lmown practice for stockbrokers to pledge, along with or apart from their own mercantile paper, the negotiable instruments of their customers. In the case referred to, the broker did so fraudulently ; London J.s. the bank with whom they were pledged did not know and did not inquire stmtJns. whether they belonged to him or to others ; and there were no suspicious circumstances. The bank was held to be protected from recourse. The broker, ' who was lawfully in possession of them for a special purpose, ' was nevertheless in a position to give a vaUd title to any person acquir- ' ing the bonds from him in good faith and for value, although the trans- ' action on his part involved a fraud upon his principal.'" ' It is surely ' of the very essence of a negotiable instrument that you may treat the ' person in possession of it as having authority to deal with it, be he ' agent or otherwise, unless you know to the contrary, and are not com- ' pelled, in order to secure a good title to yourseK, to inquire into the ' nature of his title or the extent of his authority. : . . When it is said ' that a person is put on inquiry, the result in point of law is that he is ' deemed to know the facts, which he would have ascertained if he had ' made inquiry. He cannot better his position by abstaining from so ' doing. ... I should be very sorry to see the doctrine of constructive ' notice introduced into the law of negotiable instruments.' " This- decision was followed in a case ^^ where the prevalence of contango in speculative transactions was founded on, and estoppel from denying the broker's authority to pledge stocks to their full value was gathered from his customer's actually executing transfers ; ^^ and in a later case, *^ where the plaintiff bought shares through' stockbrokers who persuaded him to leave the transfers, annexed to the certificates, and signed by the transferor, in the stockbrokers' hands, not fiUed up in the plaintiff's name, and later to allow the names of other parties to be inserted. Before this last was done the brokers deposited the documents with the defendant bank as security, and, there being nothing to put the bank on its inquiry; it was held that the pledge was vaUd and that the plaintiff was barred from vindicating his title by leaving the documents in such a condition as to represent that the brokers had his authority. ^^ In deciding these cases, a decision in the House of Lords,** which had e. Sheffield v. a contrary result, was held to be based on the ratio stated by Lord Hals- Bank."^ bury as follows.*" The question was one of fact. 'Had the banks " London Joint Stock Bank v. Simmons, '^ Citing Goodwin v. Robarts, supra, '^ ; [1892] A.C. 201 (bonds passing from hand Colonial Bank v. Cady, 1890, L.R. 15 Ap. to hand by delivery and deposited for Cas. at p. 287. custody only). See also Robinson v. '" Fuller v. Glyn, Mills, Currie & Co., Montgomeryshire Brewery, [1896] 2 Ch. [1914] 2 K.B. 168. 841 ; Thomson v. Clydesdale Bank, [1893] '' Citing Colonial Bank v. Cady, supra, A.C. 282, 20 R. H.L. 69 ; Mutton o. at pp. 273, 277, 285. Peat, [1900] 2 Ch. 79. '* E. Sheffield v. London Joint Stock " Per L. Watson at p. 213. Bank, 1888, 13 Ap. Cas. 333 ; followed in '" Per L. Herschell, pp. 217, 220, 221. Jameson v. Union Bank of Scotland, 1914, «" Bentinck v. London Joint Stock Bank, 109 L.T. 850. [1893] 2 Ch. 120. '^ At pp. 339, 341. 262 BAR BY NEGLIGENCE Negotiable and other instruments. ' notice of the infirmity of Mozley's title to pledge the securities of hii ' customers for the whole of his own indebtedness ? . . . I think the] ' had actual knowledge.* Consequently the words that follow wer( obiter. ' But if they had reason to think that these securities mighi ' be Mozley's own or might belong to somebody else, I think the] ' were bound to inquire.' ** In most of these cases the documents in question have been instru ments which, either by old custom of merchants or by modem usage have been negotiable. ' The elements which form a foundation of th( ' estoppel are more easily visible where the instrument which is handec ' over to be used as a security for advances is in the form of a negotiabh ' instrument than where it is otherwise. For the intention that th( ' security should be used as a means of raising money is more clearlj ' indicated where the document is in its very nature one which is intendec ' to be transferable from hand to hand as a security for money.' ^' Bui illustrations have been taken from cases where negotiabiU^y can scarcel] be predicated.** And other examples may be adduced. If blanl transfers of shares are signed — along with blank power of attorney, i that be required — each prior holder aS they are handed on confers or bond Jide holders authority to fill in the name of the transferee and is estopped from denying such authority, and to this extent and no furthei is estopped from denying the title of each holder for the time being.*' The issuer of such blank transfers is ' estopped by the law merchani ' from disputing any alteration made in the document after it has lefl ' his hands by filling up blanks (or otherwise in a way not ex facie fraudu ' lent) as against a bond jide holder for value ; but it has been repeatedl] ' explained that this estoppel is in favour only of such a bond fide holder ' and a man, who after taldng it in blank has himself filled up the blank ' in his own favour without the consent or knowledge of the person t< ' be bound, has never been treated in EngUsh Courts as entitled to th< ' benefit of that doctrine.' '" He does not acquire a greater right thai '^ These cases were referred to in the Scots case. National Bank t>. Dickie's Tr., 1895, 22 R. 740 ; but it related, not to an agent's power to pledge and the pledgee's knowledge thereof, but to an unfounded claim to retain stocks for advances made under no contract of security — see p. 756. , , " Per Collins M.B. in Lloyd's Bank v. Cooke, [1907] 1 K.B. at p. 802 (inchoate promissory note fraudulently filled up for too large a sum ; maker liable for the whole). Secus, where the delivery was for custody only, and estoppel did not arise — Smith v. PrOBser, [1907] 2 K.B. 735, 752. And see Nash V. De Freville, [1900] 2 Q.B. 72, 89. " Supra, p. 257 seq. «9 Colonial Bank v. Hepworth, 1887. 36 Ch. D. 36. Here this estoppel was met by a contrary one. Another example of thi opposition of pleas is Tayler v. Grea Indian Peninsula By., 1859, 28 L.J. CI 285, 709 (negligence of shareholder ; illegs custom of exchange). See also Hone % Boyle & Co., 1891, 27 L.K. Ir. 137. C competing transferees, he will be preferre who possesses the certificates — Sociel Generale de Paris v. Walker, 1885, 11 A.( 20. "» France v. Clark, 1884, 26 Ch. D. 25' 262 (per L. Selbome) ; followed in Fox Martin, 1895, 64 L.J. Ch. 473, 189, W.N. 36. And see obs. of Lords Hersche and Watson in Colonial Bank v. Cady, 189 15 Ap. Cas. 267 ; and 1 Smith, Leadii Cases, notes to Miller «. Bace ; Powell London and Provincial Bank, [1893] Ch. 555. BAR BY NEGLIGENCE 263 the person had, froifi whom he received the document ; and the latter cannot delegate to him authority to fill it up for purposes foreign to the original contract. Essential Error It is undoubted that there may be, on the part of one who Error as to executes a writ, such error as to the nature, substance, and effect "* ""^^ ° "'" ' thereof, as negatives that consensus in idem placitum which is of the essence of contract, and as yields a plea in Scotland of essential error, ^^ and in England of non est factum. ' The cases are few and far between. But one of them, I think, must be a case where the real error in the person's mind is not as to the true legal effect of the document which he has signed . . but a case where there is actual error as to the corpus of the document which is being signed at the time.' '^ ' If a blind man or a man who cannot read or who for some reason (not implying negUgence) forbears to read, has a written contract falsely read over to him, the reader misreading to such a degree that the written contract is of a nature altogether different from the contract pretended to be read from the paper which the bUnd or illiterate man afterwards signs ; then, at least if there be no neghgence, the signature so obtained is of no force.' *^ It would be unsafe to seek to confine the remedy to the cases usually figured of the bhnd or illiterate,^* like ' a common labourer ' ; '* for there probably may be cases in which persons of good education have found that hand and mind have not gone together. It seems to me that the same doctrine applies to every person who is so placed as that he is incapable by the use of such means as are open to him of ascertaining, or is by false information deceived in a material respect as to, the contents of the document, which he is asked to sign.' '8 This is one of the rare cases which are exceptions to the rule, that ' in the case of onerous contracts reduced to writing the erroneous belief of one of the contracting parties in regard to the nature of the obUgations which he has undertaken will not be sufficient to give him the right [to rescind] unless such belief has been induced by the representations, fraudulent or not, of the other party to the contract.' ^' Usually there is fraudulent impetration of the writ ; but '^ B. Pr. 11 ; Selkirk v. ITerguson, '^ Per curiam in Foster v. Maokinnon, 1908 S.C. 26. As to issues, see M'Coneciiy 1869, L.R. 4 C.P. 704, 711. V. M'Indoe, 1853, 16 D. 315 ; Couston v. »* Thoroughgood's case, 1582, 2 Coke Miller, 1862, 24 D. 607 ; M'Laurin v. Eep. 96. Stafford, 1873, 3 R. 265 ; Hogg v. »= Purdon v. Rowatt's Trs., 19 D. 206. Campbell, 1864, 2 M. 848. "^ Per Buckley L.J. in Carlisle and »2 Per L. Dunedin in EUis v. Loohgelly Cumberland Banking Co. v. Bragg, [1911] Iron and Coal Co., 1909 S.C. 1278, 1282 1 K,B. 489, 496. Cf. Hunter, Howatson, (discharge under Workmen's Compensation infra. Act), giving examples of visitors' book and " Per L. Watson in Stewart v. Kennedy, cheque - book. For cognate illustrations, 1890, 15 Ap. Gas. 108, 121, 17 R. H.L. 25, see 21 D. 947. 29 ; founded on in Selkirk supra, *'. 264 BAR BY NEGLIGENCE tiiis is not of the essence. »» The nature of the plea suggests that the writ must be cut down as a whole, and not merely as to the peccant part.'' Negligence It is commonly understood that the remedy of rescission wiU be KsdSfon. refused if the person who signed the writ or otherwise seemed to under- take the obhgation i"" was neghgent in his so doiag, with the result that he win be barred or estopped from setting up the truth in a question with onerous bond fide third parties, who have acted on the faith of the genuineness of the writ, though not in a question with the impetrator of the writ, his representatives, and those who derive right gratuitously from or through him. ' The error may be the result of carelessness ' and the neglect of the party himself, which can give him no right in ' law to challenge the deed.' ^"^ And this may sometimes be so.^"^ But the inducing cause in most cases is misplaced confidence ; and then (it is submitted) what has to be proved is, not so much a careless act, as carelessness or neghgence in placing confidence. ^ "^ Moreover, negUgence connotes duty ; so that the bar or estoppel may affect a careless signature on a negotiable instrument which is ambulatory, i"* while it might not afEect a guarantee given gratuitously to a creditor.^"^ In a case where a solemn deed was signed on the representation that the signature was a mere matter of form, it was observed by Mellish L.J. that ' when a ' man knows that he is conveying or doing something with his estate, ' but does not ask what is the precise effect of the deed, because he is * told it is a mere form, and has such confidence in his solicitor as to ' execute the deed in ignorance, then, in my opinion, a deed so executed, ' although it may be voidable upon the ground of fraud, is not a void ' deed.' i"* Otherwise put, ' If a man knows that the deed is one pur- ' porting to deal with his property, and he executes it, it wiU not be ' sufficient for him, in order to support a plea of non est factum, to show ' that a misrepresentation was made to him as to the contents of the ' deed. The deed in the present case [a mortgage beheved to be a con- ' veyance of land by the signer as nominee of the knave] is not of a ' character so wholly diflierent from that which it was represented to be '* See Gillespie v. City of Glasgow Bank supra, "' — ^though in the hands of a holder Liquidators, 1879, 6 R. 813 ; Howatson, in due course. infra; Bagot, im/ra, '■°'. ins ^ ,. , „« ,t,. fio o ivj'rc u »/riT J oi Uarlisle case, supra, "». There was »» See M Conechy v. M'Indoe, swpra, »'. , i. , ^ , . . •^ also the element ot proximate cause, supra, 1"" As to this last, see the case of p_ 251. Buchanan v. Duke of Hamilton, 1878, 5 R. H.L. 69. "° Hunter v. Walters, 1871, L.R. 7 Ch. i»i Per L.J.C. Hope in Purdon,«™m,'S '^^'^^ (therefore good in a question at 19 D. 220. There was none such in the ^^^ °'^^, T °°«''°^^ly '^"'i without notice rehed on it) ; followed in King v. case. 102 o V /^ .5 J , T5 , ,„n„ Smith, [1900] 2 Ch. 425, 430 (though the 1"^ See Young t). Clydesdale Bank, 1889, ^ i^ ; , ,. 5 v., juooucio ijo-uu., ioo£7, signer was a man not of much education 17 R. 231. and trusted a knavish solicitor). And see i»» Lewis V. Clay, 1897, 67 L.J. K.B. Lloyd's Bank v. BuUock, [1896] 2 Ch. 192, ^2'*- 197 ; National Provincial Bank r. Jackson, i»^ Lewis V. Clay ; Foster v. Mackinnon, 1886, 33 Ch. D. 1, 13. BAE BY NEGLIGENCE 265 ■ as to come within the principle ' of non est factum.^"'' The pure plea does not extend to being misled as to the legal efect of the writ signed.^"* ' They knew what they were doing when they executed the deed ; but ' if they had not been deceived they would not have done it.' 109 i"' Howatson v. Webb, [1907] 1 Ch. 547-8, per Warrington J., adopted by FarweU L.J., [1908] 1 Ch. 3 (the signer had been managing clerk of the swindling solicitor). The case was distinguished in Bagot V. Chapman, [1907] 2 Ch. 222, 227, where the husband got from his wife a document entirely different from what he represented it to be. "« Edwards v. Brown, 1831, 1 Cr. & J. 307, 312. And see a. case of one solicitor acting for mortgagor and mortgagee- Kennedy V. Green, 1834, 3 My. & K. 699, 718 ; Stewart v. Kennedy, supra, " ; Laing V. Provincial Homes Investment Co., 1909 S.C. 812. 1°' Onward Building Soc. t. Smithson, [1893] 1 Ch. 1, 13. CHAPTER IX BAR BY CONCEALMENT (NON-DISCLOSUEE) Introduction. Low V. Bouverie. Since the decision in the case of Deny v. Peek i it is estabUshed on both sides of the Tweed that no action for damages on the ground of mis- representation Ues except upon a competent averment of fraud, that is to say, of dishonesty, and that an innocent misrepresentation can merely lead to rescission of a contract, and then only if restitution is in a business sense possible. Moreover, the latter remedy is open only where there is a false representation in the contract itself or in a warranty, or the circumstances reveal baf or estoppel ^ against proof of the truth of a representation, provided it be acted on to the detriment of the party concerned, who has not trusted solely to his own judgment, being ignorant of ,or brushing aside, the attempted deceit or misleading.^ Bar is pleadable whether the statement or the conduct alleged be fraudulent or innocent. In certain circumstances concealment of material facts is equivalent to direct misrepresentation. This concealment, being conduct, Ues peculiarly within the scope of this volume. Everything turns on the existence or absence of a duty to disclose. In most classes of contracts there is no such duty imposed on either party to the bargain. Caveat emptor is balanced by caveat venditor.^ ' There is no duty on the part ' of the debtor to explain to his creditor what was the real state of his ' affairs. If the creditor does not accept the statement which is made ' to him as to his debtor's pecuniary position, he can make inquiries ' for himself. But if he accepts the statements made (and the com- ' position offered) without making the truth of the statement a condition ' of the acceptance of the composition, then that is an end of the matter.' * As a link with the close of the preceding chapter, and as an elaborate illustration of these doctrines, there may be cited the notable EngUsh case of Low V. Bovrerie.^ The plaintiff granted a loan on the security of a 1 1889, 14 A.C. 337. 2 Brownlie v. Campbell, 1880, 5 Ap. Gas. at pp. 952-3, 7 R. H.L. 81 ; Low v. Bouverie, infra. 3 Morton v. Smith, 1877, 5 R. 83 ; Smith V. Chadwick, 1884, 9 Ap. Gas. 187 ; M'Morland's Trs. v. Eraser, 1896, 24 R. 65. « GiUespie v. Russel & Son, 1856, 18 D. 677, [19 D. 897, 3 Macq. 757]. ^ Per L. Trayner in Russell v. FareU, 1900, 2 F. 892, 898. And see Royal Bank of Scotland v. Greenshields, 1914 S.G. 259, and cases there (caution for debt). " [1891] 3 Ch. 82. Followed in In re Wyatt, 1891, 65 L.T. 214, 841 ; In re Tillott, [1892] 1 Gh. 86; Whiteohurch (George) v. Cavanagh, [1902] A.C. at p. 145 ; Oliver v. Bank of England, [1902] 1 266 BAR BY CONCEALMENT (NON-DISCLOSURE) 267 life interest under a settlement after being referred to and consulting one of the trustees, inter alia as to there being any encumbrances on the debtor's share of the estate. The trustee mentioned certain encum- bra;nces, did not say these were all, and omitted honestly and from forgetfulness others existing at the time. These being discovered, and the security being insufficient, the plaintiff sued the trustee for the amount due on his bond. It was held that the trustee was not liable on the ground of fraud, breach of duty, warranty, or estoppel. For, though a trustee has a duty to give a beneficiary all available information regarding the position of the trust fund, he has no duty (a) to help the beneficiary by telhng him what encumbrances he, the beneficiary, has created, nor which of the encumbrancers have intimated their charges, nor (6) to answer the queries of a stranger about to deal with the beneficiary. If the trustee takes it upon him to answer the stranger, he has only to give honest answers to the best of his knowledge and belief, unless he gives a warranty or so expresses himself as to be estopped from afterwards denying the truth of what he said {e.g. by declaring his enumeration to be exhaustive, or that the estate was unencumbered) ; ' and then his statement must be clear and unambiguous,^ i.e. not necessarily such that it cannot possibly be open to different constructions, but such as will be reasonably understood in a particular sense by the person to whom it is addressed.* Estoppel is only a rule of evidence ; you cannot found an action on estoppel. Estoppel is only important as being one step in the progress towards rehef on the hypothesis that the defendant is estopped from denying the truth of something which he has said ' ^^ — it may be added — or done or refrained from doing. ' Knowledge and means of knowledge are very different things ; ii 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 his dvxty to inform himself accurately before he speaks ? ' ^^ ■ The line between fraud and warranty is often very narrow, and the same observation is true of the fine between warranty and estoppel. Narrow, however, as the Kne often is, the three words denote fundamentally different legal exceptions, which must not be confounded.' ^ ' Ch. 610 ; Porter v. Moore, [1904] 2 Ch. Crealock, 1878, L.R. 10 Ch. at p. 30, per 367. Scots law never erred into ' legal Lord Cairns, fraud.' ' In fraud ' of a marriage contract ' [1891] 3 Ch. 106. or of a statute is a misnomer. '" Per Bowen L.J., ibid., p. 105, also ■' As in Burrowes v. Lock, 1805, 10 p. 101 ; In re Bahia By. Co., 1868, L.R. Ves. Jr. 475, and [1891] 3 Ch. 94-7. 3 Q.B. 584. The rule in Derry v. Peek, supra, yields to " Brownlie t. Campbell, supra, '. at warranty and estoppel, where there is a p. 952. duty to give correct information. There- '^ Per Lindley L.J., [1891] 3 Ch. 103. fore (specific performance not having been But see Index as to imputed knowledge, a possible remedy) Shm v. Croucher, 1860, " Per Lindley L.J., [1891] 3 Ch. 102, 1 De G. F. & J. 618 is overruled. quoting Lord Blackburn in Brownlie v. » [1891] 3 Ch. 103, 106, 113 ; Freeman Campbell, 1880, 5 Ap. Cas. at p. 953, V. Cooke, 1848, 2 Exch. 654 ; Heath v. 7 R. H.L. 81. 268 BAR BY CONCEALMENT (NON-DISCLOSURE) Contracts Even in the case of ordinary contracts " there may He a plea of non- fJei™ disclosure, as where the concealment is made by act, the act being fraudu- lent or near thereto,^^ or studiously designed.^" What is said and not said in an invitation for tenders for work to be done seems to be on the border Une.^' But there are certain contracts — known as contracts itberrimw fidei — in entering on which each party is held to the utmost frankness and fullness in disclosing aU material facts. These are in- surance, guarantee, and partnership.^^ Insurance Here it is the person proposing to obtain the contract who has in particular to make the fullest revelation, the ground being that he is assumed to know more about the risk to be, run than the insurer. But the obHgation or duty to disclose lies on both. Marine Insurance Non-disclosure The sections of the Marine Insurance Act 1906 ^^ are printed on infoimation. ^ prioT page,^" where the question was discussed in what circumstances an insurer had homologated a contract voidable at his instance by passing from the objections to its vahdity. Here the matter to be studied is the blot itself, which vitiates the bargain. This may be a direct or explicit misrepresentation,^^ and then the question (in so far as it differs from the subject in hand) mainly is what it means. But here the theme is non-disclosuie — a question of conduct and of fact suitable to be sent to a jury ^^ — and the main questions are what ought to be disclosed, and by whom. Apart from the circumstances which in the absence of inquiry need not be disclosed,^^ the criterion is ' every material ' circumstance which is known to the assured ; and the assured is deemed ' to know every circumstance which, in the ordinary course of business, ' ought to be known to him. If the assured fails to make such disclosure, ' the insurer may avoid the contract,' ^* whether the failure is fraudulent or innocent.^^ The risk is as to what might, not what would, happen.^' '■^ Marriage is in this respect sui generis — hoc) superior persons lie beyond the scope Lang V. Lang, 1920, 2 S.L.T. 353, overruling of this work. (See Gloag, Contracts, Stein 0. Stein, 1914 S.C. 903. See also chap, xxvii.) Alexander v. Alexander, 1920, 1 S.L.T. i» 6 Edw. VIL c. 41, ss. 17, 18, 19, and 21. 307 ; Moss v. Moss, [1897] P. 263. ^o Supra, pp. 202-4. " E.g. Patterson v. Landsberg, 1905, '^ Supra, p. 202 ; s. 20 of the Act. 7 F. 675. 22 Act, s. 18 (4). 1" JE.g. Dempsters v. Raes, 1873, 11 M. 23 j^^.^,^ g j^g (3^ g)_ 843. 24 Act, s. 18 (5). See Duthie v. Carnegie, 1' Boyd & Forrest v. Gt. S.W. Ry. Co., 21st Jan. 1815, F.C. 162 (sale of ship at sea). 1911 S.C. 33, 1050, 1912 S.C. H.L. 93, "= Carter v. Boehm, " ; lonides v. 1914 S.C. 472, 1915 S.C. H.L. 20. Pender, " ; Wheelton v. Hardisty, "4 ; IS It is suggested that in Scotland there Morrison v. Muspratt, '^ ; Joel v. Law- is no authority for holding a sale of heritage 'Union Ins. Co., ". to be of this class. Contracts by fiduciary "6 TraiU v. Baring, 1864, 4 De G. J. & S. persons, confidential persons, and {qiwad 318, 330 (reinsurance ; life). BAR BY CONCEALMENT (NON-DISCLOSUEE) 269 The earlier Scots cases are imperfectly reported ; they relate to a Scots cases. period in which maritime risks differed greatly from those now under- written, but they are not wholly without interest. It was not necessary to communicate the master's letter sent to owners from a foreign port, seeing that the facts communicated in it were facts of pubhc notoriety, and that the presence of enemy privateers on the route was known to every underwriter in the kingdom.^' A letter reported the ship as in a sinking state and weakly manned ; another from the master said the same and declared his intention to repair and proceed to sea. The man- date to brokers on which the pohcy followed did not mention the informa- tion ; and the pohcy was avoided. ^^ Insurance after news of total loss had arrived at the assured's port was cut down on fraud, but it would be unsafe to cite the case as turning on the knowledge of a mere clerk of the assured, seeing that there were other suspicious circumstances.^^ Goods were insured at a time when the insured had heard from a corre- spondent at the terminus ad quern that the carrying ship's fate, as a capture, was almost certain, and a sister ship, which sailed before her, had arrived there without seeing her ; this information should have been communicated.^" Advice of the date at which a ship was to sail was brought in another vessel and showed that the ship wa-s overdue ; this was material where the contract was made after the advice had reached the assured.^^ A possible ground of judgment in another case, with the same result, was non-commimication of facts relating to the seaworthiness of the vessel. ^^ The information sent by a master abroad, which was not disclosed, was only intimation of a hope or expectation that the ship would arrive in this country ; this was not concealment of fact, and immaterial.^^ A further insurance on ship was effected in consequence of receipt by the owner of rumours, fairly circumstantial, of capture ; these should have been communicated.^* It is probably not necessary to reveal that other vessels, saihng in similar circumstances on a similar voyage, had arrived. ^^ Two ships were sent to trade in Africa, the smaller to act as cargo-feeder to the larger and so aid in filling her up as to allow her to return home the sooner. The smaller was insured at and from Liverpool to Africa and back, with hberty to exchange goods with other ships. They belonged to the same owner ; there was no custom of such mutual trading, and the risk was held to be covered by this hberty to ' exchange ' goods. The facts ought to " Thomson v. Buchanan, 1782, 2 Pat. Bell did not know of the reversal there, 592, revg. M. 7085. nor of Adam & Mathie v. Murray, ibid. 2* Campbell v. Russell & Co., 1794, 3 Pat. (ship stranded and repaired). As to Smith 340. There was also deviation. v. Bisset, 9 Mar. 1810, F.C. 617, qucere. 29 Stewart v. Dunlop, 1795, 3 Pat. 4, '^ Smith v. Allan, 1808, 5 Pat. 229. 4 Bro. P.C. 482, 1 Park, Insurance, p. 446. '* Murison v. Gibbon, 18th Jan. 1811, =» Allan V. Young, Ross & Co., 1803, F.C. 148. In England, Durrell v. Bederly, M. 7092. 1816, Holt N.P. 283 ; De Costa v. Scandrat, 31 Gillespie v. Douglas, 1803, M. 7095. 2 P. Wms. 170 ; Seaman ; Lynch, infra, ". 32 Smith V. Bogle, 1809, 5 Pat. 248. See '' Kinlooh v. Campbell, 14th June 1815, the reporter's criticism of 1 B.C. 667. F.C. 421, apud fin. 270 BAR BY CONCEALMENT (NON-DISCLOSURE) have been communicated.^^ Though opinion may be withheld, the facts on which it rests should not. An insured owner knew where his vessel was at a certain time, and of a gale that had occurred there and then. ' If such was the case she could not have been ■ caught in a more difficult situation to have cleared the island.' He did not pass on the facts, and thereby lost claim for indenmity.^' An underwriter who takes a risk at so much per cent., 'to return ' 5 per cent, for convoy and arrival,' contracts on the chance of the option to go with convoy being open and goes free if the assured conceals the fact that she is to be a ' running ship.' ^^ Information reaching a freighter and not communicated to his underwriter was only conjectural regarding the date of sailing from a distant port and was immaterial to be revealed ; the assured had no control over the ship's movements.^' Underwriters had formerly insured a ship as British. They and others insured her again without being informed that she had been registered as Belgian, the purpose being to escape British inspection. This was a concealment of a material fact, though iaspection by the Board of Trade here is primarily a safeguard to the crew.*" A time policy for six months (equivalent to the normal duration of a voyage to South America and back) was effected by a broker who represented that the voyage was to be to Pernambuco with coal and home with sugar. He believed this, and did not know that the owner had already fixed on an outward voyage with iron to a roadstead. There the ship was wrecked. The pohcy was held to attach, seeing that the representation , was of an expectation not of a fact, and the assured was not bound to correct the error. It was also indicated that a time policy gives greater latitude than a voyage policy.*^ Briefly put, and in the words of the leading English text-book,*^ adopted in a considered judgment in Scot- land,*^ ' The practical rule for pohcy brokers and other agents, therefore, ' is to disclose to the underwriter all they know ** respecting the proposed ' adventure, and not to exercise their own judgment as to the materiality ' of any part of the information they possess ; for if they do not disclose the whole, and what is kept back appears to the Court ' to be material, the policy wiU be avoided, though the concealment ^^ Tennant v. Henderson, 1813, 1 Dow " Harvey & Co. v. Seligmann, 1883, 324. 10 R. 680. It was not proved that iron " Bowker v. Smith, 9th Feb. 1810, was an unsuitable cargo for a wooden J?.C. 571. ship, or that a roadstead was a specially 3' Reid & Co. v. Harvey, 1816, 4 Dow dangerous port. 97. *2 Arnould, Marine Insurance, 4th ed., 39 Lambe v. Smith, 15th Feb. 1815, F.C. p. 539. 220. There may be a question of hours *= Per curiam in Baker & Adams v. between information received and policy Scottish Sea Ins. Co., 1856, 18 D. 691, taken out — see Stone v. Aberdeen Marine 699. Ins. Co., 1849, 11 D. 1041 ; Wake v. «« Fresh material information obtained Atty, 1812, 4 Taunt. 493 (letter arrived before the slip is initialled should be but not opened). promptly communicated, not thereafter— *" Hutchinson & Co. v. Aberdeen Sea Lishman v. Northern Mar. Ins. Co., 1873, Ins. Co., 1876, 3 R. 682. L.R. 8 C.P. 216, and cases there. BAR BY CONCEALMENT (NON-DISCLOSUEE) 271 ' was without any intention of fraud and arose merely from an error ' of judgment.' *^ The Gimford case,** where there was a grossly over-insured enterprise, The Gimford may be read as being decided either on concealment or on the language '''^^^' used in the poUcy not, in the circumstances, covering the loss.*' In the former view the main points decided were as foUows : that the practice of underwriters as to accepting any risks and not making in- quiries on particular points cannot afEect the duty of the assured, or his broker, in negotiating a poUcy, as defined by statute, and cannot properly be received as evidence of waiver *^ in any particular case ; *" that, unseaworthiness being pleaded in respect to the character of the master, who, though he had fairly good certificates of ancient date, had been for twenty-two years on shore, it was not incumbent on the insured to reveal the master's career ; but, and in particular, that the omission to disclose facts relating to the over-insurance of the vessel and the existence and amount of honour ^° poHcies amounted to the non-disclosure of material circumstances and made the pohcy voidable by the under- writers. One of these honour policies was for disbursements which were already covered by pohcy on ship and freight ; ^^ and the other was taken out for his own benefit by the managing owner who had effected all the pohcies. As to this latter policy, the managing owner was the company's agent to insure ^^ and should have made full disclosure. And as to both it was observed by Lord Shaw of Dunfermline ^^ ' that ' wherever owners enter into gambling transactions of this kind, these ' transactions themselves are not only invalid, but they infect and iu- ' vaHdate the entire insurances which the same assured have made upon ' vessel, freight or cargo. The reason of that is this : the voyage is ' one, and the ship, its earnings, its cargo, its crew, all are involved in ' that one and single hazard which has been undertaken and which is ' by the gambling transaction improperly weighted towards loss^a ' loss which, fa llin g upon the ship, would not rest there, but spread to ' unsalved cargo, ncJt to speak of the peril to human fife which would ' be thus encountered.** ... I remark, however, that the foregoing ' observations are not directed to the case of insurance upon ships, in ' which third parties have acquired, in ignorance of the other and over ' insurances and in good faith and for valuable consideration, separate ** Paraphrasing the judgment of Lord partial knowledge of the facts — ibid., Mansfield in 1782, 1 Doug. 306 note. p. 540. «« Thames & Mersey Marine Ins. Co. v. =» Or p.p.i., viz. without further proof 'Gunford' Ship Co., [1911] A.O. 529, of interest than the policy itself . They are S.C. H.L. 84, varying 1910 S.C. 1072. void in law (Marine Insurance Act, ». 4) and " Per Scrutton L.J. in Cheshire & Co. v. penalised (9 Edw. VII. c. 12). Vaughan, [1920] 3 K.B. 240, 253. " Act, s. 16. " See supra, pp. 202-4. ^^ Act, s. 19 (a). " [1911] A.C. 539, S.C. H.L. 90, per =' Pp. 543, 93. L. Alverstone C.J. It made no difEerence, "^^ The actual value at risk was £14,000, in another case arising out of the same the aggregate insurances £35,800 ; but disaster, that premium was received a;fter fraud was not pleaded. 272 BAR BY CONCEALMENT (NON-DISCLOSURE ) English cases prior to the Code. Later cases. ' interests. The rights of such parties would require to be separately ' and fully considered.' The definition in the Marine Insurance Act of what is material to be known and therefore to be disclosed is really a short statement of the common law of the United Kingdom ; and the principal earher English decisions may, therefore, be briefly noted below,^^ and resort suggested to the well-known treatises on the subject. The later English cases do not add much in elucidation of the definition. Though an assignee of a policy may sue underwriters in his own name,®* he is exposed to any defence which would have been open to the underwriter in a question with the cedent ; so that, where owners did not in taking out a policy on hull and machinery disclose the existence of an excessive insurance on dis- bursements, their assignees who were ignorant of the blot were fixed with it, though they took the assignation in good faith and as a security for the price of the ship. In other words, the policy was not a negotiable instrument,®' being only a promise of indemnity giving a right of action for unliquidated damages.®* It was held to be a material non-disclosure in a reinsurance contract that nothing was said of an option allowed to the ship in the original insurance to navigate the Canadian lakes, where '' Though the non-disclosure may be on the part of the underwriter who knows of safe arrival — Carter v. Boehm, 1766, 1 W. Bl. 593 — it is almost invariably that of the assured or his agents ; e.g. disappearance from sight of other vessel at night (though the loss turned out to be by capture) — Seaman v. Fonerau, 1743, 2 Stra. 1183 ; ' deep and leaking,' though here also capture was the loss and the intelligence was false — Lynch v. Dunsford, 1811, 14 East 494; time of sailing or last being heard of may or may not be material to disclose according to circumstances- — thus bad weather at close of loading and belated voyage should have been communioated^Stribley v. Imperial Marine Ins. Co., 1876, 1 Q.B.D. 507 ; and see Batcliffe v. Shoolbred, 1 Marshall, Insurance, 166 ; Elton v. Larkins, 1832, 5 C. & P. 385 (probably only if the ship be a ' missing ship ') ; letter not re- vealed which gave date when ship was ready to sail and showed she was overdue at the date of the poHoy — M'Andrew v. Bell, 1794, 1 Esp. 373 ; Webster v. I'oster, 1795, 1 Esp. 406 ; letters saying ship would sail after a certain day and with convoy — Bridges v. Himter, 1813, 1 M. & S. 14 ; the fact that of two vessels sailing together the one insured parted in a gale from the other when more than half of the route had been passed — ^Westbury v. Aberdein, 1837, 2 M. & W. 267; tem- pestuous weather 'and great delay, known to owner, who was on a sister ship — Kirby V. Smith, 1818, 1 B. & Aid. 672 ; conceal- ment and misrepresentation as to date of sailing, relied on, without resort to Lloyd's List — Mackintosh v. Marshall, 1843, 11 M. & W. 116 ; rumours received, though they turned out to be unfounded — Seaman ; Lynch, supra ; stranding applicable to one of two vessels, though it was doubtful which. — Morrison v. Universal Marine Ins. Co., 1873, L.B. 8 Ex. 197; gross over- valuation, making thus the underwriter's risk speculative — ^lonides v. Pender, 1874, L.R. 9 Q.B. 531 ; loading port a roadstead, from which there was no pratique — narrower v. Hutchinson, 1870, L.R. 5 Q.B. 584 ; proof of misrepresentation or con- cealment lies on underwriter and must be clear — Davies v. National Ins. Co. of New Zealand, [1891] A.C. 485. But one, unless questioned, need not reveal the nature or extent of the interest insured, unless its peculiar nature alters the risk — Crowley v. Cohen, 1832, 3 B. & Ad. 478 ; Mackenzie v. Whitworth, 1875, 1 Ex. D. 36, 42. '° In Scotland at common law ; now by the general Act, s. 50. " Pickersgm v. London and Provincial Ins. Co., [1912] 3 K.B. 614. The assignees were the builders of the ship. But see swpra, p. 271, ■per L. Shaw. =« Pp. 621-2. BAR BY CONCEALMENT (NON-DISCLOSUEE) 273 in fact she received injury.^' Non-disclosure that part of machinery insured for a voyage was second-hand and therefore, if broken or injured, less easy to reinstate would have been fatal, had it not been for a term of the policy which allowed any incorrect definition of the subject insured to be covered by an extra premium to be arranged.^" During the war one of the risks warehousemen directed their Liverpool brokers to insure against was the risk of the Government directing the ship and cargo to proceed to other than its proper destination. This was a chance which underwriters could not be expected to know in the ordinary course of their business. It was omitted by the London correspondents of the said brokers and was held to be material to be notified. *i ' It is elementary ' marine insurance law ' that prior applications to other underwriters need not be disclosed. ^^ That a ship was due to arrive at a certain date should have been disclosed. ^^ The Marine Insurance Act 1906 enumerates the circumstances (or Circumstances some of them) ** which need not be disclosed, viz. such as diminish the to be risk, or are waived,®^ or are superfluous, being covered by warranty, such d'^'=i°5^ Ibid., p. 540. BAR BY CONCEALMENT (NON-DISCLOSURE) 275 ' not to procure or furnish information concerning the ship, but to effect ' an insurance. ... It cannot be reasonably suggested that the insurer ' relies, to any extent, upon the private information possessed by persons ' of whose existence he presumably knows nothing.' '^ The case is, of course, different where the same broker, alone or by his correspondents, negotiates and effects the policy. '^ Examples of non-communication to employers by the agents of the first class here mentioned, which are carelessly omitted or, for facilitating insurance, fraudulently suppressed, are noted below." Other Insurances In regard to Ufe, fire, and the other junior insurances the criterion of Proposal and what is or is not material to disclose is the same as is above given. '^ But cases of concealment do not so readily arise, seeing that the proposal and declaration which lead up to the contract contain in most cases " queries in such inquisitorial and meticulous form with repUes exacted in such terms as to leave little that is material unrevealable. Moreover, almost invariably the contents of these documents are declared to be the basis of the subsequently executed policy, and thus become conditions of the contract. Further, the replies expected and demanded are by the Office intended and apt to warrant the verum and not only that the proposer is verax ; ^^ though honest answers to questions of flexible construction or ambiguous meaning will be read against the Office, ^^ where their truth could not fairly be held a condition suspensive of recovery under the policy, ^^ as, for example, in answers given to the company's doctor, and intended by " Per Lord Watson, pp. 540-1. With employers' liability (general, estate servants, this judgment cannot stand the decisions in farm servants), accident and sickness ; Gladstone v. King, 1813, 1 M. & S. 35, horse and cattle ; larceny and embezzle- and Stribley v. Imperial Marine Ins. Co., ment. Less detailed are fire (private 1876, 1 Q.B.D. 507, where the innocent house and business premises) ; conse- non-communioation of a material fact by quential losses ; all risks ; plate glass ; an agent who was the alter ego of the ship- passengers' luggage ; employers' liability owner merely created an exception from (domestics, clerks, business assistants) ; the policy— see 12 Ap. Cas. 540, per Lord tourists' accident. Watson. 80 Hutchison v. National Loan Fund '« Blackburn, Low & Co. v. Haslam, j^ife Ass. Soc, 1845, 8 D. 467, esp. per 1888, 21 Q.B.D. 144. L. FuUerton ; Life Association of Scotland " Fitzherbert v. Mather, 1785, 1 T.R. „ Foster, 1873, 11 M. 351 ; Scottish 12 ; Gladstone v. King, supra ; Proudfoot Equitable Life Ass. Soc. v. Buist, 1877, u Montefiore, 1867, 2 Q.B. 511. 4 B,_ 1076, aff. 5 R.H.L. 64; Thomson v. '» Joel V. Law Union and Crown Ins. Co., Weems, 1884, 9 Ap. Cas. 671, 11 R. H.L. 11908] 2 K.B. 863, 878; London Assur- ^g^ ^^^^_ n jj, g gg Tjjg drastic efficacy ance v. Hansel, 1879, 11 Ch. D. 363, 369 ; ^^ ^jj^g unjust scrutiny is set out by ■Brownlie v. Campbell, 1880, 5 Ap. Cas. at pietoher-Moulton L.J. in Joel, mpra, '". £ 95*, perJL Blackburn ; Lynch .. ^^ Cruikshank v. Northern Accident Ins. Hamilton, 1810, 3 Taunt. 37. tookoqb ia7 '» Strict and detailed in life ; ' farm ^°-' ^«»5, ^3 K. 14/. fire ; property owners' indemnity ; general ^^ j^ re Bradley v. Essex and Suffolk ihird party ; lift ; drivers' risks ; motor ; Accident Indemnity Soc, [1912] 1 K.B. jnotor cycle ; burglary, as to all premises ; 415, 422, 432. 276 BAR BY CONCEALMENT (NON-DISCLOSUBE), Disclosure of what is not queried. both, parties to be only statements made to the best of knowledge, for the purpose of assisting him and the company to judge of the risk that is in question , and not part of the basis of the contract ; ^^ or in answer to queries which are wide enough to cover trivial illnesses, such as casual headache or latent maladies discoverable, if at all, only by medical experts. ** But to answer questions put, and to do so accurately in fact or (it may be) truthfully and honestly, ^^ does not exhaust the duty of the proposer. He must mention everything that it is material for the Office to know, i.e. not merely what he himself regards as material, but what a jury or judge should hold to be so. *^ ' It is the duty of the assured in ' all cases to disclose all material facts within their knowledge.*' In ' cases of life insurance certain specific questions are proposed as to points- ' affecting in general all mankind. But there may be also circumstances ' affecting particular individuals, which are not likely to be known to ' the assurers, and which, had they been known, would no doubt have ' been made the subject of specific inquiries.' ** This remark applies to all insurances, even though the usual general inquiry, put in order to elicit such circumstances, is not made. Thus in life assurance it was held to be only fair to the Office in deliberating on a proposal to reveal that a fisherman was not only such but was also in the Royal Naval Reserve.*' But the facts that the ' life ' had retired from business,'" or was an ironmonger in a town though designated as Esquire at his country residence,'^ or gave a casual instead of his usual residence,'^ have been held to be immaterial. There should have been disclosure of serious disease intervening between the date of the proposal and the date of the tender or payment of the first premium or of the policy itself.'^ Non- disclosure at any time prior to the date of the policy, though on matters not inquired about, is a handle for repudiation where it extends to loss of speech and reason,'* tumour in any important organ,'* spitting of blood, '^ 8' Joel, supra, esp. at [1908] 2 K.B. 889 ; and Thomson v. Weems, supra, *", per L. Blackburn. As to revealing the assured' s medical attendants, see Morrison v. Mus- pratt, infra, '^ ; Huckman v. Femie, 1838, 3 M. & W. 505 ; Joel, supra, ". '■i Thomson v. Weems, per L. Blackburn and L. Watson ; Joel, supra, at p. 884 ; Life Association of Scotland v. Foster, *5 Swete V. Fairlie, 1 C. & P. 1 ; and the Scots cases in note '°, supra. *' Joel, supra, at p. 884 ; Life Associa- tion of Scotland, supra, at pp. 359-60 ; London Assurance v. Mansel, 1879, 11 Ch. D. 363, 368-9 ; Lindenau, infra, ^\ 8' Ibid. ; Bates v. Hewitt, 1867, L.B,. 2 Q.B. 595, 606. ** Lindenau v. Desborough, 1828, 8 B. & C. 586, 593, per Littledale J. See per Jessel M.R. in London Assurance, supra, *". «» Ayrey v. British Legal Ins. Co., [1918] 1 K.B. 136. The district manager of the company was told, and the acceptance of premiums operated homologation. See also Woodall v. Pearl Ass. Co., *[1919] 1 K.B. 593. "• TurnbuU v. Scottish Provident Insti- tution, 1876, 34 S.L.R. 146. "'■ Perrins v. Marine etc. Ins. Soc, 1859, 2 E. & E. 317, 324. '^ Grogan v. London and Manchester Industrial Ass. Co., 1885, 53 L.T. 761. 82 British Equitable Ins. Co. v. G.W. Ry., 1869, 38 L. J. Ch. 314 ; Canning v. Farquhar, 1886, 16 Q.B.D. 727 ; Morrison u. Muspratt, 1827, 4 Bing. 60. °* Lindenau, supra, '^. ''' Abbott V. Howard, 1832, Hayes, Irish Exch. R. 381. »« Geach v. Ingall, 1845, 14 M. & W. 95. BAR BY CONCEALMENT (NON-DISCLOSURE) 277 .■and e-ven being in gaol for debt.®' Where a question in the proposal points to veracity of statement only, reticence in regard to minor or long-past ailments, not obviously serious, will be excused.®* If the matter turns on sober and temperate habits, these words relate to the use of alcohol and not of drugs ; ®® and it is at last settled that the evi- dence of experts — in this case medical men — as to the materiality of facts not disclosed is admissible.^"'* While denial of specific bodily illnesses may if untrue in fact lead to repudiation of the contract, an assertion of the enjoyment of good health will not, if the reply be truthful in opinion, for, in the words of Lord FuUerton, the term means ' the perfect, ' conscious enjoyment of all one's faculties and functions, and the con- ' scious freedom from any ailment affecting them or any symptom of '' ailment ' ; loi ^^^ ^j^g proposer is not put to dehvering a medical diagnosis. The onus of specifying and proving latent and undisclosed disease lies on the Office. ^"^ This doctrine of non-disclosure is similarly illustrated in the contract Fire, lof fire insurance. Thus, in negotiation for a pohcy covering the amoimt of an earlier insurance with another company on the same property for a lesser sum, it was held to be the duty of the proposer to intimate that that other company had dechned to renew.^"^ In proposing an insurance on buildings and machinery, it should have been revealed that the tenancy thereof was only on sufferance, i"* It was honestly beheved that a fire, which broke out in premises next but one to the plaintiff's warehouse, which he got insured pursuant to a letter sent off in the evening of the same day, was completely extinguished ; neverthe- less he should have given notice of this neighbouring mishap. '^'" A steam engine and its use for hoisting were declared ; its later use for a different and additional purpose was not revealed ; a jury found that there was no increment of risk ; and the pohcy held.^"* " Huguenin v. Rayley, 1815, 6 Taunt. p. 669 ; Jones v. Provincial Ins. Co., 1857, 186. And see per Jessel M.B. in London 3 C.B. N.S. 65, 86. And see Ross v. Assurance v. Mansel, supra, ^*. Bradshaw, 1760,, 1 W. Bl. 312 (common "^ Fowkes V. Manchester and London insurance and warranty contrasted) ; Forbes Ass. Co., 1863, 3 B. & S. 917. The policy & Co. v. Edinburgh Life Ass. Co., 1832, 10 itseli went further, but the declaration S. 451, 461 ; Watson v. Mainwaring, 1813, explained it ; Scottish Provident Institu- 4 Taunt. 763 ; Cruikshank v. Northern tion V. Boddam, 1893, 9 T.L.R. 385. But Accident Ins. Co., 1895, 23 R. 147. see Reid & Co. «. Employers' Accident Co., ^"^ Marshall v. Emperor Life Ass. Soc, 1899, 1 F. 1031. 1866, L.R. 1 Q.B. 35. '' Yorke v. Yorkshire Ins. Co., [1918] i»' In re Yager and Guardian Ass. Co., 1 K.B. 662 (veronal ; no iUness of any 1913, 108 L.T. 38. As to the meaning in importance sufiered from). French policies of a condition of revealment ^'"' Ibid. ; and see the cases cited at of policies elsewhere on the same subject, p. 670. As to opium-eating, see Forbes & see National Protector Fire Ins. Co. v. Co., infra, "i. Nivert, [1913] A.C. 507. 1""^ Hutchison v. National Loan Fund i"* Anderson v. Commercial Union Ins. Life Ass. Soc, 1845, 7 D. 467, 478, approved Co., 1886, 34 W.R. 189. as the only feasible ground of judgment in i»= Bufe v. Turner, 1815, 6 Taunt. 338. this case by Lord Watson in Thomson v. "" Baxendale v. Harding, 1859, 4 H. & Weems, 1884, 9 Ap. Cas. at p. 691, and N. 445 ; and see Pimm v. Lewis, 1862, quoted voth approval in Yorke, supra, *", at 2 F. & F. 778. 278 BAE BY CONCEALMENT (NON-DISCLOSUEE) Otbei insurances. Prior applications. In a case of drowning by accident, it was held to be no concealment by one describing himself as ' hauUer and contractor, master working ' that he did not add ' bargeman,' for he was simply a contractor hauling by water and by land, and he had not changed his occupation."^"' In a case in the Outer House, imperfectly reported, it seems to be held that inadvertent non-disclosure of previous applications, when mentioning one such application — though full and true answers were made the basis of the contract — had no material bearing on the claim and did not entail repudiation."-"^ In a proposal for insurance of live stock, the question whether information regarding its physical condition was ' important ' was left open.""* In a proposal for an insurance against habihty for damage which might be caused to third parties by the drivers of the assured's vans, the reply to a question about claims made against- him for such damage during the preceding twelve months grossly mini- mised these claims in number and amount. The proposal and declaration of the truth of the answer were made the basis of the contract. The pohcy itself only contained a condition that any fraudulent misdescrip- tion in the particulars furnished by the insured should render the policy void. It was held by a majority of two to one "•"" that the said condition was not to be construed as hmiting the efEect of the inexcusable and blameworthy though not fraudulent declaration to fraudulent misre- presentation, and that the contract was voidable at the instance of the company. It was sought to distinguish the case from that of Fowkes "^^ in various ways, but the only plausible ground was that in that case, which related to human maladies, it was right to construe the two documents together and iriterpret the words ' correct and true ' therein as meaning veracious, while that interpretation was not open in. the Scots case."^ In all insurances except marine,^i^ the Offices are naturally anxious to know, and put inquiries to ehcit, the career of the proposer in respect to the same risk — whether he has applied elsewhere, has been refused or has been accepted, and if so on what terms."* A statement admitting certain earlier insurances only is a non-disclosure of others, and fatal ; ^"^ and a fortiori so is a statement denying that any prior proposals had been made elsewhere.^^* In cases of fraud, and in particular of collusion between the ' hfe ' and a third party beneficially interested, non -dis- closure of large earher policies will lead to repudiation, though no question "' Woodall 1 K.B. 601. "« Craig V. Ass. Co., 1894, "» Taylor v. 2 Ir. R. 1. Pearl Ass. Co., [1919] Imperial Union Accident 1 S.L.T. 646. Yorkshire Ins. Co., [1913] "» Reid & Co. t Ins. Co., 1899, 1 F. '. Employers' Accident 1031. *'^ Guarantee insurances are reserved for the next section. "» Supra, p. 273. ^'* Life offices now assist each other by compiling and distributing to each other this information, on which so much value is put. Craig, supra, i"*. "^ London Assurance v. Mansel, supra, "; Condogianis, ' Times,' 2nd May 1921. "" Macdonald v. Law Union Ins. Co., 1874, L.R. 9 Q.B. 328. BAR BY CONCEALMENT (NON-DISCLOSUEE) 279 thereanent has been put' by the company.!^'' The question put in a proposal whether the proposer is or has been insured ' in this or any other ' office ' relates only to the premises in hand.^^^ The principles applied in marine insurance cases regarding the responsi- Agents bihties of the insurer for the knowledge of his agents hold equally in respect to the junior insurances. ^i* Thus, in negotiating an accident pohcy the company's agent wrote down the reply of the proposer, to the question whether there was anything which made him pecuharly liable to accident, that he had slight lameness from birth. He was in reahty extremely lame, and the agent must have observed this. Consequently the company was not entitled to take advantage of the alleged mis- description, seeing that the agent's knowledge was its knowledge. i^" Though the answers required by the Office are filled in by its zealous tout, they are the answers of the assured, and he is fixed with the consequences of their inaccuracy ; ^^^ but not, where the proposal and declaration are spurious, though a policy founding on them has been issued. ^^^ Where, in the course of negotiating for a fire policy, the pro- poser obtained and relied on an interpretation of the policy form, which turned out to be erroneous, the company was not estopped from pleading the true interpretation, the agent's view being only an expression of opinion, not of fact.^^^ In the case of insurance taken out on the life of a third party, misstatements made or material facts undisclosed by the latter or his doctor or referees, innocently or fraudulently, do not affect the insured, these persons not being his agents to insure ; i^* but it would be otherwise if there were collusion between him and them.^^* An agent of an insurance company, on being informed by the proposer, before the issue of the cover note, of a bond fide mistake in the answers in the proposal, should send at once to the company the correct answer ; if he does not, the company is not entitled to found on the misstatement "•' Wainwright v. Bland, 1836, 1 M. & discrepancy between the information given ^f}_ 32. to the agent and his rendering of it lies "' Golding V. Royal London Co., 1914, upon the proposer^Biggar, swyra ; Parsons, 30 T.L.R. 350. "' See a learned discussion in Taylor "^ Pearl Life Ass. Co. u. Johnson, [1909] V. Yorkshire Ins. Co., [1913] 2 Irish R. 1 2 K.B. 288. (knowledge by agent of refusal by another "= Hooley Hill Co. v. Royal Ins. Co., Office); Thomton-Smith v. Motor Union 1919, 88 L.J. K.B. 1120; Levy v. So. Ins. Co., 1913, 30 T.L.R. 139 (the know- Employers' Ins. Co., 1901, 17 T.L.R. 229 ledge covered successive insurances). (explaining the pohcy) ; Joel, supra, p. 275 i2» Cruikshank, supra, ^"^ ; Bawden o. (doctor). London, Edinburgh, and Glasgow Ass. Co., i^i Wheelton v. Hardisty, 1857, 8 E. & B. [1892] 2 K.B. 534 (accident insurance ; 232 (see Ryder v. Wombwell, 1868, L.R. loss of one eye within knowledge of agent 4 Ex. 39) ; Blackman v. L.B.S.C. Ry. Co., to insure). And see Parsons v. Bignold, 1869, 17 W.R. 770 ; HaU v. Jupe, 1880, 1846, 15 L.J. Ch. 379. 49 L.J. C.P. 729 ; Joel, supra, p. 275 ; and "i' Life and Health Ass. Assn. v. Yule, see Macdonald v. Law Union Co., 1874, 1904, 6 r. 437 ; Biggar v. Rook Life Ass. L.R. 9 Q.B. 332 ; Lynch v. Dunsford, " ; Co., [1902] 1 K.B. 516 ; Holdsworth v. Blackburn v. Haslam, supra, ''. Lancashire and Yorkshire Ins. Co., 1907, i^s gge Wainwright v. Bland, 1836, 23 T.L.R. 521. The onus of showing a 1 M. & W. 32. 280 BAR BY CONCEALMENT (NON-DISCLOSUEB) and avoid the policy.^^^ One wlio is put in "full charge of the subject insured, may be an agent to insure.^^' Kemedies. The policy, being a binding formal contract, throws the burden of impugning it on the insurer, who ordinarily has the only interest to do S0.12 8 And his remedy is reduction or cancellation during the currency of the risk, or repudiation after claim has been made.^^' A further remedy, where the blot is not breach of warranty or condition, but an innocent misdescription of the risk, may be that the poUcy holds during part of its currency and is suspended during another part.^^" Caution or Guarantee Insurance and The transit from the foregoing section to this is facilitated by the guaran ee. following remarks of a distinguished English judge ' ^^^ ' There are some contracts in which our Courts of law and equity require what is called uberrima fides to be shown by the person obtaining them ; and, as that phrase is short and convenient, I will continue to use it. Of these, ordinary contracts of marine, iire, and life insurance are examples, and in each of them the person desiring to be insured must, in setting forth the risk to be insured against, not conceal any material fact afEecting the risk known to him. On the other hand, ordinary contracts of guarantee are not amongst those requiring uberrima fides on the part of the creditor towards the surety ; and mere non- communication to the surety by the creditor of facts known to him affecting the risk to be undertaken by the surety will not vitiate the contract, unless there be fraud or misrepresentation, and misrepresenta- tion undoubtedly might be made by concealment. But the difference between these two classes of contract does not depend upon any essential difEerence between the word " insurance " and the word " guarantee." There is no magic in the use of those words. The words to a great extent have the same meaning and effect ; and many contracts, like the one in the case now before us,^^^ may with equal propriety be called contracts of insurance or contracts of guarantee. Whether the contract be one requiring uberrima fides or not must depend upon its substantial character and how it came to be effected.' Difference It would appear that the difference between an ordinary contract of guarantee for guarantee and a similar contract in the form of an insurance policy is debt and insurance. 126 Qolding, supra, "«. 1^' Marine cases — Fitzherbert v. Mather ; Gladstone v. King ; Proudf oot v. Montefiore, fiupra, p. 275. 12' Stebbing v. Liverpool and London and Globe Ins. Co., [1917] 2 K.B. 433. 129 S,g, Scots and English cases passim, 12° Farr v. Motor Traders' Mutual Ins. Soc, [1920] 3 K.B. 669, adopting the ex- position in Maogillivray on Insurance, p. 360. I'l Romer L.J. in Seaton v. Heath ; S. V. Burnand, [1899] 1 Q.B. 782, 792. The decision was reversed under the latter name, [1900] A.C. 135, on a differing con- struction of the documents. These dicta are adopted by Vaughan Williams L.J. in In re Denton's Estate, [1904] 2 Ch. 178, 188. w^ It was a Lloyd's policy guaranteeing the solvency of a guarantor of an advance to a debtor. BAR BY CONCEALMENT (NON-DISCLOSURE) 281 in two respects. In the latter the proposal and declaration leading up to the policy must be as full and frank in disclosure as in regard to other pohcies,!^^ while in the negotiating of guarantee of debt no such dis- closure is expected or demanded. And a pohcy is, unless otherwise expressed/^* that guarantee against ultimate loss with which bankers are familiar, with what the Roman and the Scots laws call the beneficium ordinis or discussionis with the benefit of subrogation, while the guarantor of debt has usually no such beneficium, and his right of subrogation is the double right of relief from the principal debtor and any co-cautioners there may be.^^^ The former distinction coincides with what usually occurs in practice. In a typical case of guarantee insurance the creditor (the assured) seeks out a guarantor (an Office or a member of Lloyd's or some other person) and must give full and frank information regarding the risk ; while in a typical case of guarantee of debt or for solvency the debtor brings the proposing guarantor to the creditor, and the guarantor is assumed to know all about the risk.^^* With regard to these ordinary guarantees for debt, and in particular Guarantee to those obtained by a bank, the result of much litigation ^*' has been summed up in a Scots case thus : ^^^ 'A bank agent is entitled to assume ' that an intending guarantor has made himself fully acquainted with ' the financial position of the customer whose debt he is about to guarantee. ' And the bank agent is not bound to make any disclosure whatever ' regarding the customer's indebtedness to the bank. But if he does, ' either voluntarily or in. answer to a question put, make any representa- ' tion which turns out to be erroneous or untrue, then the guarantor ' who has rehed upon that statement is entitled to hberation from his ' obhgation. . . . The only circumstances in which I can conceive that ' a duty of disclosure would emerge and a failure to disclose would be ' fatal to the bank's case, would be where a customer put a question ' or made an observation in the presence and hearing of the bank agent, 1'^ See British Guarantee Assn. v. or conspired in, the concealment, it would Western Bank, 1853, 15 D. 834 ; and Parr's probably be different— Sutherland v. Low Bank;;. Albert Mines, 1900, 5 Com. Ca. 116; & Co., 1901, 3 F. 972; Lawson v. Cold- Dane ; Finlay, infra, "*. stream, 1837, 15 S. 930. 1" Young V. Trustee Assets Co., 1893, "' U.g. Hamilton v. Watson, 1845, 31 S.L.R. 199 (insolvent bank being re- 4 B. Ap. 67, 103 ; Royal Bank of Scotland constructed) ; Laird v. Securities Ins. Co., v. Rankin, 1844, 6 D. 1418 ; see per 1895, 32 S.L.R. 317 (reconstruction actually L. FuUerton, p. 1428 ; BaUour, Junor & Co. ' completed) ; Dane v. Mortgage Ins. Co., v. Russell, 8th Mar. 1815, F.C. 335 ; Young [1894] 1 Q.B. 54 ; Finlay v. Mexican v. Clydesdale Bank, 1889, 17 R. 231, 244 ; Investment Corp., [1897] 1 Q.B. 517 ; North British Ins. Co. v. Lloyd, 1854, 10 M'Vicar v. Poland, 1894, 10 T.L.R. 566. Ex. 523 ; London General Omnibus Co., See also Shaw v. Royar, [1911] 1 Ch. at infra, i" ; Bank of Scotland v. Morrison, p. 147. infra, i" ; Lee v. Jones, 1863, 17 C.B. N.S. i»5 See In re Denton's Estate, [1903] 482 ; Falconer v. North of Scotland 2 Ch. 670, 679, [1904] 2 Ch. 178, 192, 195. Banking Co., 1863, 1 M. 704, 711. i=« Seaton ; Denton's Estate, supra, "i ; "' Per L. Strathclyde L.P. in Royal Hamilton, irifra, '" ; see esp. per Black- Bank of Scotland D. Greenshields, 1914 bum J. in Lee v. Jones, at 17 C.B. N.S. S.C. 259, 266, 268 ; see also ^per L. 503. If the proposing creditors instigated, Mackenzie at p. 271 (' a half-truth '). 282 BAR BY CONCEALMENT (NON-DISCLOSUBE) Fidelity guarantee. ' which necessarily and inevitably would lead anyone to the conclusion ' that the intending guarantor was labouring under a misapprehension ' with regard to the state of the customer's indebtedness. i^' Nothing ' short of that, in my opinion, would do.' ^*'' Apart from insurance, what is generally called fldeUty guarantee differs, in this matter of non-disclosure, from caution for or guarantee of debt. The ratio thereof has been described on the Bench both in England and Scotland. 1*1 ' There is a wide distinction between a case like the present [guarantee of honesty of a servant] and the cases which have been cited 1*^ of guarantees for overdrafts given to bankers. Dishonesty may occur and the guarantee is given to insure agaiust the chance, but guarantees for overdrafts are required for the purpose, and not on the chance, of being used. A man may have the misfortune to be robbed by his servant in the course of his business ; if he is, it is a mischance ; but it is perfectly legitimate and usual for a man to carry on his business on borrowed money, including money borrowed from his bankers by way of overdraft, and the surety knows this, and becomes surety for the very purpose of enabling him to do so. There is nothing in such a case which the surety does not know as weU as any other member of the community, and nothing therefore which needs to be disclosed to him. The surety may well complain : "I did not know " that your servant was a thief " ; but he cannot be heard to complain : " I did not know your customer had been overdrawing his account " or what the nature of his business was." ' 1*^ The parallel passage in Scotland runs thus : ' The cautioner for payment of a money debt can at any time, by paying the amount for which he is liable, free himself as in a question with the creditor. He can then sue the debtor upon the assigned contract. He is master of the situation. Accordingly there is not the same obligation towards him on the part of the creditor that there is in the case of a fidehty guarantee. A cautioner for the faithful discharge of an office cannot himself perform the contract. He cannot by paying up the sum engaged for discharge his obligation, and take the debtor in his own hand. The representation and under- standing therefore as to the trustworthiness of the servant on which the contract was origiaaUy founded continue to the end. The cautioner '^' See Hamilton v. Watson, supra, ^" ; Davies, infra, ^^'' ; Pidcock v. Bishop, 1825, 3 B. & C. 605; Mackreth v. Walmsley, 51 L.T. 19. "» The question is whether the fact not disclosed is impliedly represented not to exist — Davies v. London and Provincial Marine Ins. Co., 1878, 8 Ch. D. 469; Rsiilton, infra, p. 284. "1 See 1 B.C. 381. 1*^ Hamilton v. Watson, supra, '" ; Wythes v. Labouehere, 1859, 3 De G. & J. 593. 143 pgf. Harwell L.J. in London General Omnibus Co. v. HoUoway, [1912] 2 K.B. 72, 82, citing L. Campbell in Hamilton v. Watson, supra. At ■ pp. 85-7 Kennedy L.J. founds on the distinction between circumstances intrinsic (former dishonesty) and extrinsic (previous dealings between debtor and guaranteed creditor) in Story, Equity Jurisprudence, §§ 210, 215. See also the opinion of L. Medwyn in Falconer V. Lothian, 1843, 5 D. 866, 873. BAE BY CONCEALMENT (NON-DISCLOSURE) 283 ' for payment of money guarantees the credit of the debtor, which depends ' on many circumstances other than the state of the account, and of ' which the cautioner is presumably better able to judge than the creditor. ' In the case of a fideHty guarantee the cautioner guarantees the dealings ' between the servant and his master, and of these the master has op- ' portunities of judging which the cautioner has not.' i** Of course, if any guarantee is expressly conceived so as to depend on full disclosure, or on any distinct condition or warranty, the Courts will give effect to the agreement. ^*^ The law of guarantee is the same on both sides of the Tweed.^*^ The doctrine of concealment and fidehty guarantee finds its earhest state- ment iu an opinion of Lord Chancellor Bldon in the Scots case of Smith Smith r. Bank V. The Bank of Scotland : i*' ' If it should appear that a person became ' surety for another, who was at the time in arrears to his employer, ' that employer being ignorant of the fact, then I am clearly of opinion ' that the surety must be imderstood to have taken for better or for ' worse the conduct, character, and credit of him for whom he became ' surety. But if, on thfe other hand, a man or a body of men employing ' a number of agents find one whom they have reason to suppose not ' trustworthy, one who most likely owes them large sums of money, or ' who, they may have reason to suppose, owes them large sums of money, ' and call on that man to give sureties, or cautioners, as it is called iu ' Scotland, both for his past and future dealings, thereby holding Mm ' out as a person trustworthy, when they know, or have strong ground ' for suspecting, that he is not so, that would not bind the cautioners ' or sureties.' The case was one in which the bank required security additional to that which had already been found, at a time when, as appeared from proof taken on remit from the House of Lords, i*^ two of the directors of the bank knew of the agent's embarrassed circumstances arising from unsuccessful speculation, and the bank had put him under restrictions on account of his employing its money for his own private purposes. The bond of caution was annulled partly also because it "* Per L. Mackenzie (IV.) in Bank of etc. Ass. Assn., 1891, 18 R. 563 (checks on Scotland v. Morrison, 1911 S.C. 593, 597 accounts) ; Dundee etc. Shipping Co. v. (debt to bank; suspicion, not proof, of National Guarantee etc. Assn. 1881, 18 forgery). His Lordship cites 1 B.C. 380, and S.L.R. 685 (do.) i Creighton, infra (breach explains B. Pr. 251, qpud Owen v. Homan, of statute as to custody of money). 1853, 4 H.L.C. 997, as turning on fraud ; i4o pg^ L. Cottenham in Creighton v. see also per L. Salvesen, p. 604. The case Rankin, 1840, 1 Robin. Ap. 99, citing , was followed in National Provincial M'Taggart v. Watson, 1835, 1 Sh. & M'L. Bank, [1913] 3 K.B. 335, 339. 553 1*5 Benham v. United Guarantee and ,.,,„,„ , t-, „-,„ nAn rn. ^ T-jr A r^ loco r, 17. x, HAA T^,„T=„ 1813> 1 ^^^ ^72, 292. Thc quota- Life Ass. Co., 1852, 7 Exoh. 744 ; lowle D. ' i. x n i • .7 „ , . , ^ J- A c! 10C1 on tion here is from the fuller report in 7 National Guardian Ass. Soc, 1861, 30 J^ L.J. Ch. 900; London Guarantee Co. v. Sh 248. In the other report there is Peamley, 1880, 5 Ap. Cas. 911 (embezzler ff^^. even with a view to security against to be prosecuted) ; Ward v. Law Property f"*"^^ transactions of the agent. Soc, 1856, 4 W.R. 605 (notice of ascertained "« Smith v. Bank of Scotland, 1829, dishonesty) ; Haworth & Co. v. Sickness 7 S. 244. 284 BAR BY CONCEALMENT (NON-DISCLOSURE) Jiailton V. Matthews. A question of fact. covered past as well as future transactions, and though the bank had no improper pixrpose in calling for the additional guarantee. '^^^ This case was followed where the circumstances were similar. i^" ' If a man says ' practically, " I am willing to retain A. B. in my employment if he ' " finds caution for his intromissions," and conceals the fact that the ' cause of the demand for caution is the special one that A. B. has ' been detected in gross irregularities, which would justify his dismissal ' as for fault, I hold he is concealing what he is bound to disclose as a ' condition of his guarantee being effectual.' ^^^ In a reduction of a guarantee of the business conduct of an agent the issue sent to the jury was whether the cautioner was induced to subscribe the deed by undue concealment or deception on the part of the employers. The judge charged that the pursuer, in order to succeed, must prove that the concealment alleged was wilful and intentional, with a view to the advantage the employers were thereby to receive. On a bill of exceptions this statement of the law was held by the House of Lords to be erroneous. ^^^ ' There may be a case of improper conceal- ' ment or non-communication of facts which ought to be communicated, ' which would affect the situation of parties, even if it was not mlful ' and intentional and with a view to the advantage the parties were to -' receive.' ^'^ ' If there were facts within their knowledge which they were ' in point of law bound to divulge and which they did not divulge, the ' surety is not bound by the bond. ... If the defenders had facts within ' their loiowledge which it was material the surety should be acquainted ' with and which the defenders did not disclose — the concealment of ' those facts — the undue concealment of those facts — discharges the ' surety ; and whether they concealed those facts from one motive or ' another is wholly immaterial.' ^^^ ' The existence or non-existence of ' the security does not turn on the motive of the party who gets it in ' making the concealment but upon the presumed effect on the granter ' of it.' 1^^ Where an employer of a commission agent for the sale of goods who had fallen into arrear to a large extent called for and obtained a guarantee, which recited the terms of the engagement, but did not disclose these arrears, it was held ^^^ that this non-communication was evidence for the jury in support of the plea of liberation for the guarantor ; and Blackburn J. said : i^' 'It must in every case depend upon, the ' nature of the transaction, whether the fact not disclosed is such that "" 7 S. 250-1. L. Glenlee adopted L. Eldon's dicta, but dissented on the facts. i=» French v. Cameron, 1893, 20 R. 966. See op. of L. Rutherfurd Clark, who espied fraud. >" Per L.J.C. Macdonald at p. 971. 152 Railton v. Matthews, 1844, 3 B. Ap. 56, reversing 6 D. 536 ; reported also in 10 C. & r. 934 ; distinguished in a case of compromise, where fraud had to be proved — Dempsters v. Raes, 1873, 11 M. 843, 846. "3 Per L. Cottenham, 3 B. Ap. 66. i=* Per L. Campbell, p. 67. 1" Per L. Fullerton in Royal Bank of Scotland J). Rankin, 1844, 6 D, 1418, 1428; and see Davies, supra, i*". 1=" By four to two in Exoh. Ch. in Lee V. Jones, 1864, 17 C.B. N.S. 482. 1" P. 506. BAR BY CONCEALMENT (NON-DISCLOSUEE) 285 ' it is impliedly represented not to exist ; ^^^ and that must generally ^ ' be a question of fact proper for a jury. If in this case the amount of ' the balance already due had been small, or the period during which ' the accounts were left unsettled short, there would in my opinion ' have been such a mere scintilla of evidence as would not have warranted ' the jury in finding the verdict of fraud ; and the judge would have ' been justified in withdrawing the question from their consideration.' These may be regarded as among the proper questions to be sent to a jury or to a judge of fact, where undue concealment without taint of fraud is sufficiently averred. A collector of rates had been allowed to practise an irregular mode of accounting, and even, contrary to statute, to retain money in. his own hands for more than the prescribed period and to intermix the proceeds of diSerent rates. But it was not till a year after a second guarantee had been obtained that he was suspected of dishonesty ; and it was held that the acquiescence of the burgh officials was not such connivance as would liberate the cautioner. i'"' These observations naturally lead up to the next doctrine, viz. that Supervening disclosure of facts, material to the obligation of guarantee for honest ^'^ '' conduct, supervening on its inception and occurring while the guarantee subsists, has also to be made. This can scarcely be demanded of bene- ficiaries regarding the conduct of judicial factors of whom they are not the employ ers.^^" The duty certainly arises where a servant or agent, employed at the date of the guarantee, in one capacity, is employed thereafter in another,^*! or where he is employed on more onerous con- ditions, not in contemplation of the parties to the bond.^^^ It proceeds on the theory that the obligation of full and frank representation or disclosure is ambulatory or renewed from day to day. In bankruptcy cases the distinction was early estabUshed between Bankruptcy positive acts of the creditors injurious to and liberating the trustee's '^^^' cautioner and mere neglect of statutory formalities leaving him bound. To the former category was assigned the docqueting of the trustee's accounts by the commissioners when they had complete knowledge that the trustee had in his own hands moneys which should have been banked,!^^ or had no knowledge whether their docquet, which narrated 1^* Supra, ^*°. See also a ciroum- poor, overseers, and fraudulent iiispector — ■ stantial case of caution for bank agents, all statutory officers — see Mansfield Union one of whom was partner in a commercial v. Wright, 1882, 9 Q.B.D. 683. firm and had large ' extra-official ' aocom- ^'^ Cosford Union v. Poor Law etc. modation from the bank — Thomson v. Assn., 1910, 103 L.T. 463. Bank of Scotland, 1824, 2 Sh. Ap. 316. "^ Bonar v. M'Donald, 1850, 7 B. Ap. 1=' Durham (Mayor) v. Fowler, 1888, 379. Cf. Sanderson v. Aston, 1873, L.R. 22 Q.B.D. 394. The earlier English cases 8 Ex. 73 (three months' notice substituted are here carefully reviewed, as well as for one month, not such an alteration) ; M'Taggart, infra, i** ; and Creighton v. Oswald v. Berwick (Mayor), 1856, 5 H.L.C. Rankin, 1840, 7 C. & F. 325, in the House of 856 ; Cambridge (Mayor) v. Dennis, 1858, Lords, with regard to persons in public office. E.B. & E. 660; Skillett v. Fletcher, 1867, ■ i«» Wallace's Factor v. M'Kissock, 1898, L.R. 2 C.P. 469, and cases there. 25 R. 642, 649. As to guardians of the ^"^ Mein v. Hardie, 1830, 8 S. 346. 286 BAR BY CONCEALMENT (NON-DISCLOSURE) the requisite banking of the funds, was correctly stated.^** To the latter category belong a case where there was a similar neglect of supervision but no discharge,!*^ and a noteable judgment of the House of Lords.i^^ There the trustee by a cunningly devised scheme, astute enough to escape even close scrutiny, embezzled large trust funds. The only positive transgression of the statute — transferring funds from a chartered to a non-chartered bank — led to no loss. ' Had any loss occurred by that ' proceeding, not only would the surety have been discharged from all ' liability in respect of it, but the commissioners would have been ac- ' countable for the whole amount of it to the creditors at large.' ^*' With regard to the rest of the conduct of the commissioners there was no connivance with the trustee or any act otherwise injurious to the cau- tioner.^** ' The main reliance of the [cautioner], and in which view the ' Court below fully shared, is upon the supposed fact i*^ of the com- ' missioners having been careless in calhng on [the trustee] to render ' accounts and in other respects to perform his duty under the statute. ' They say that it was the office of the commissioners to see that he did ' properly discharge his duty ; that the cautioner relied on their per- ' forming that office ; and that their non-performance creates a case ' which he never contemplated, and to which his suretyship cannot apply. ' Was it of no moment to observe that the performance of the statutory ' duties by [the cautioner] was one of the very things for which the ' obligation bound his surety ? . . . The statute and the bond have the ' very same object of giving the creditors a double security against ' malversation of the trustee — the superintendence of the commissioners ' and the obhgation of the surety.' ^"' Accordingly the cautioner re- mained bound. The same result was attained on similar grounds a Uttle later ; and Lord FuUerton observed : ' The allegation against the ' commissioners is not that they did anything which they were not ' authorised to do, but that they did not do some things which they ' might have done to prevent malversations of the trustee.' ^'^ Miscellaneous. j^ jj^-^^g appears ^'2 that ' mere omission on the part of the employer, ' mere passive acquiescence in acts which are improper on the part of ' the employe, will not release the surety. It is none the less true that ' if there be an omission to do some act which the employer has con- i«* Duncan v. Porterfield, 1826, 5 S. Ill, in England from estoppel and not in this 115- volume treated as personal bar. '"s Eadie v. How, 1829, 7 S. 356. i" Per L. Brougham, 3 C. & F. 538. ^" M'Taggart v. Watson, 1835, 1 S. & Up till then there had been no malversa- M'L. 553, 3 C. & F. 525, 10 BU. N.S. 618, tion by the trustee, revg. 12 S. 332 ; followed in Falconer v. i«8 /jjg,^ pp^ 536-7. Lothian, 1843, 5 D. 866. The facts and i'" One of the animadversions in H.L. result were similar in Creighton v. Rankin, was on the lack of findings in fact in C.S. 1840, 1 Rob. Ap. 99, 7 C. & F. 325, and i'» Ibid., pp. 539-40 ; Durham (Mayor) M'Taggart was approved ; but the decision v. Fowler, 1888, 22 Q.B.D. at p. 405. against the cautioner for the treasurer of i" Biggar v. Wright, 1846, 9 D. 78. a road trust was laid on there having been "' See also Dawson v. Lawes 1854 no ' giving time ' — a doctrine distinguished Kay 280. BAB BY CONCEALMENT (NON-DISCLOSUEE) 287 tracted with the surety to do . . . the case is different. There the omission would be one inconsistent with the relation between the surety and the person with whom he has contracted to be surety.' "^ Thus it is, in a question with a cautioner for conduct, the duty of the master to dismiss a servant as soon as he finds out acts of dishonesty on his part, and to give information of them to the cautioner.^'* On 11th August an agent of the defenders forged and embezzled ; on 25th Sep- tember he confessed and was suspended ; on 8th October he absconded. Not tin 11th October was his cautioner notified. The notice was held to have been given too late, and the cautioner went free. Immediate intima- tion should have been given to him, so as to enable him to take steps to minimise the loss.^'^ Uneasiness in the mind of an employer regarding the conduct of an agent or servant, even a scintilla of suspicion — especially if it be dispelled by explanations given — are rather reasons for obtaining caution, than for revelation to a cautioner already bound. ' There is ' a clear distinction in principle between the case of obtaining a cautionary ' bond for the fidehty of a servant who has already proved himself un- ' trustworthy without disclosing such untrustworthiness and the keeping ' secret of facts which do not amount to proof of untrustworthiness, ' but which render it necessary or desirable for security that the bond ' should be obtained.' ^'* It is unnecessary to reveal that a traveller during the period of his appointment had been occasionally short in his payments.'-" If the bond of caution says nothing about the duration of the employment of the guaranteed servant, it is for the cautioner to withdraw when the pending engagement of the servant comes to an end, and not for the master to reveal that it has been renewed.^'* If, as part of the bond or of representations leading up to it, a system of checks has been agreed on, and substantially neglected or ignored, the cautioner is liberated, unless he has acquiesced in the breach.^'" Looking to the opinions in the House of Lords in the cases of Gross care- M'Taggart and Creighton}^" it may be doubted whether certain earher concealment. Scots decisions are still sound.i^^ But this doubt does not apply to another early case, which went to the highest tribunal ^^^ and held the 1" Per Bowen L.J. in Kingston-on-HuU '" Bonthroneti. Patterson, 1898, 23 R. 391. (Mayor) v. Harding, [1892] 2 Q.B. 494, i'» Nicolson v. Burt, 1882, 10 R. 121. 508 (dishonest work by contractor ; i" Forbes v. Welsh, 1829, 7 S. 732 ; fraudulently concealed ; final certificate Thistle Friendly Soc. v. Garden, 1834, 12 S. paid ; surety still bound). 745 ; British Guarantee Assn. v. Western 1'*' Phillips V. FoxaU, 1872, L.R. 7 Q.B. Bank, 1853, 15 D. 824 ; and supra, p. 280. 666 ; followed in Sanderson o. Aston, i'° Supra. In 1836 and 1840. 1873, L.R. 8 Ex. 73. As to these, see i" Mein, supra. "*'; Pringle «. Tate, 1834, criticisms by Denman J. in Durham 12 S. 918 ; Boog v. Jamieson, 1825, 4 S. (Mayor), supra, L.R. 22 Q.B.D. 421-2. 117 ; Forbes v. Welsh, 1829, 7 S. 732 (but •" Snaddon v. London, Edinburgh, and see supra, i"). Glasgow Ass. Co., 1902, 5 F. 182. i»= Leith Banking Co. v. Bell, 1830, 8 S. ^''^ Per L. M'Laren in Wallace's Factor 721, affd. without opinions, 5 W. & S. 703. V. M'KisBOck, 1898, 25' R. 642, 653 ; See also Falconer v. Lothian, 1843, 5 D. 866 Cowan's Hospital v. Robertson, 1832, (concealment of arrears at date of caution 11 S. 81. ^°^ ^ traveller, continued after that date). 288 BAR BY CONCEALMENT (NON-DISCLOSUEE) cautioner for a bank agent liberated, on the grounds that (1) the head office of the bank had flagrantly and persistently allowed infringements of directions, which had been read to and signed by the cautioner, as to the conduct of the branch ; (2) the guarantee being for past as well as future intromissions, the bank had concealed the fact that at its date the agent's liabihty to the bank was more than three times the amount of the guaranteed hmit ; and (3) that certain losses inseparable from the rest were incurred in business forbidden by statute. Firms. Companies. Partnerships and Companies These relationships may be taken together, for the same principles of equity apply to both. Once the contract is entered into, the doctrine of uberrima fides apphes to the future conduct of the socii.^^^ There seems to be no direct authority on the question whether non-disclosure of material facts in a negotiation for a partnership in a firm, existing or proposed, may lead to rescission of the contract or (in terms of the law of bar) estop the party who withholds the information from saying that the other party is a member of the firm.^** For the reported cases turn on direct misrepresentation, innocent or fraudulent.^** But in principle it is difficult to see why the relation of exuberant good faith between partners should not throw back to the contract {societas) which was the inception of the relationship. Non-disclosure, as has been seen,^** may amount to misrepresentation ; for every word used in inducing the contract may be true, yet some important or even vital circumstance may be concealed. It may be for the interest of the proposing partner to maintain the contract and treat any hidden advantage in money or money's worth as constructively the property of the firm ; i*' but he would have the option of meeting the other party with an action of reduction or rescission, or, as indicated above, by barring him from asserting the validity of the contract. It is true that the Partnership Act ^^^ provides expressly only for the remedies in case of fraud and misrepresentation, but this is ' without prejudice ' to any other right.' ^^^ It may be argued that the case of a firm is stronger in favour of the law of bar in respect of undue concealment than that of a joint-stock company, seeing that in the former case the rights of creditors are not "3 Law V. Law, [1905] 1 Ch. 140, 157. 1'* See the remark of L. Watson in Adam v. Newbigging, 1888, 13 Ap. Gas. 308, 324. The case is commented on in Boyd & Forrest v. G. & S.W. Ry. Co., 1915 S.C. H.L. 29, 30, 31, 37, on the question of remedy. 185 Adam, supra ; Ferguson v. Wilson, 1904, 6 F. 779 ; and see Manners v. White- head, 1898, 1 F. 171. 180 Supra, p. 266. 1" Partnership Act (53 & 54 Vict. o. 39), s. 26 ; Fawcett v. WMtehouse, 1829, 1 Russ. & M. 132 ; Kitchens v. CongreTe, ibid., 150 n. "8 S. 41. '*" See also a. 46 (saving for rules of equity and common law). BAR BY CONCEALMENT (nON-DISCLOSURE) 289 affected, while in the latter their interests may be seriously involved where there is insolvency.^*" But it is certain that there is a duty incumbent on promoters and directors of companies in preparing and issuing a pro- spectus or a statement in lieu of a prospectus, ^'^ inviting applications for shares, towards the members of the public who shall apply for allotment, to see not only that there is therein no material misrepresentation directly made, innocently or fraudulently, but also that there is no concealment or non-disclosure of. material facts.^'^ There is no better description of the requisite of uberrima fides than the words 'that follow : ' Those who ' issue a prospectus . . . are bound to state everything with strict and ' scrupulous accuracy, and not only to abstain from stating as facts ' that which is not so, but to omit no one fact within their knowledge, ' the existence of which might in any degree affect the nature or extent ' or quality of the privileges and advantages which the prospectus holds ' out as inducement to take shares ; and they have no right to turn ' round upon those who refuse to fulfil their contracts to take shares ' and say to them, " You ought to have been more prudent, more circum- ' " spect, more cautious." ' ^'^ ' It is said that everything which is stated ' in this prospectus is literally true, and so it is. But the objection to ' it is, not that it does not state the truth so far as it goes, but that it ' conceals most material facts with which the public ought to have been ' made acquainted, the very concealment of which gives to the truth ' which is told the character of falsehood.' i** It is thought that these doctrines still hold good in respect to a going Non-disclosure concern, though promulgated before statute stepped in and demanded ~ of a prospectus, or of a statement in Heu of it, true representations regard- ing all matters which experience had shown to be likely to afiect the minds of investors.^*^ A doubt may be allowed whether the point made in the close of the last quotation was not carried too far by an English judge when he expressed obiter the opinion that there must be some- thing more than mere non-disclosure proved before misrepresentation I'" Per L. Watson in Adam, supra, wick Co. v. Muggeridge, 1860, 1 Dr. & Sm. 13 Ap. Cas. 322-3, citing Western Bank v. 363, 381, 383 (called ' the want of accurate _ Addie, 1867, L.R. 1 Sc. Ap. 145, 5 M. H.L. ' representations '). The passage quoted 80; Tennent v. City of Glasgow Bank, is adopted by L. Ch. Chelmsford in 1879, 4 Ap. Cas. 615, 6 R. H.L. 69. Central Ry. Co. of Venezuela v. Kisch, "1 As to the latter, see In re Blair Co., 1867, L.R. 2 H.L. 99, 113 (' the utmost [1914] 1 Ch. 390. ' candour and honesty '). "2 Material in the sense that the aUottee i»* Per L. Chelmsford in Oakes v. might not have taken the shares, had he Turquand, 1867, L.R. 2 H.L. 325, known the concealed fact — see Gowans v. 342-3. Dundee Steam Navigation Co., 1904, 12 "= Companies (Consolidation) Act 1908 S.L.T. 137 (not a prospectus ; but old letter (8 Edw. VII. c. 69), ss. 81, 82. The general honest and true when written ; alterations law is reserved, s. 81 (9). Omission of before allotment trivial); and Nash v. particulars required by these sections Calthorpe, [1905] 2 Ch. 237. As to what does not lead to rescission but only to is trivial and what not, see Venezuela case, action of damages against those in fault— infra. In re South of England etc. Petroleum Co., i»3 Per Kindersley V.C. in New Bruns- [1911] 1 Ch. 573. 290 BAR BY CONCEALMENT (nON-DISCLOSURE) is established, and that it must be shown that the non-disclosure is the non-disclosure of something the disclosure of which would falsify some statement in the prospectus.^** The particularity of revelation in these preliminary documents is now so searching that the question thus raised may not be of practical iifaportance ; but cases might be easily figured in which the concealment might be most material and yet unconnected with the statutory inquisition. The objection should be taken promptly either in reply to a demand by the company, or by application to have the deluded party's name taken off the register.^" 1'° Per Eve J. in In re Christine ville ' a ground in a, proper proceeding at a Rubber Estates, 1911, W.N. 216, 81 L.J. ' proper time for setting aside an allotment Ch. 63. This is certainly (and incon- ' or a purchase of shares ' — 'per L. Cairns in veniently) true as a ground for damages. Peek v. Gumey, 1873, L.K. 6 H.L,377-403 ; but this was laid down with the reservation Arkwright v. Newbold, 1880, 17 Ch. D. 301. — ' however that non-disclosure might be '" Christineville case, sv/pra. APPEI^DIX ACT OF PARLIAMENT TO Amend and consolidate the Factors Acts. — 52 & 53 Vict. cap. 45.— [26th August 1889.] Be it enacted by the Queen's most Excellent Majesty, by and with th e advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows : — Preliminary, I.— For the purposes of this Act— Definitions. (1) The expression " mercantile agent " shall mean a mercantile agent having in the customary course of his business as such agent authority either to sell goods, or to consign goods for the pur- pose of sale, or to buy goods, or to raise money on the security of goods : (2) A person shall be deemed to be in possession of goods or of the docu- ments of title to goods, where the goods or documents are in his actual custody or are held by any other person subject to his control or for him or on his behalf : (3) The expression " goods " shall include wares and merchandise : (4) The expression " document of title " shall include any bill of lading, dock warrant, warehouse-keeper's certificate, and warrant or order for the delivery of goods, and any. other document used in the ordinary course of business as proof of the possession or control of goods, or authorising or purporting to authorise, either by endorsement or by delivery, the possessor of the document to transfer or receive goods thereby represented : (5) The expression " pledge " shall include any contract pledging, or giving a lien or security on, goods, whether in consideration of an original advance or of any further or continuing advance or of any pecuniary liability : (6) The expression " person " shall include any body of persons corporate or unincorporate. Dispositions by Mercantile Agents. -^ ^ " Powers of II. — (1) Where a mercantile agent is, with the consent of the owner, in ™ ^^f ^' j^ possession of goods or of the documents of title to goods, any sale, pledge, respect to dis- position of 291 goods. 292 FACTORS ACT 1889 Efiect of pledges of documents of title. Pledge for antecedent debt. Rights acquired by exchange of goods or documents. Agreements through clerks, etc. Provisions as to consignors and con- signees. or other disposition of the goods, made by him when acting in the ordinary course of business of a mercantile agent, shall, subject to the provisions of this Act, be as valid as if he were expressly authorised by the owner of the goods to make the same : provided that the person taking under the dis- position acts in good faith, and has not at the time of the disposition notice that the person making the disposition has not authority to make the same. (2) Where a mercantile agent has, with the consent of the owner, been in possession of goods or of the documents of title to goods, any sale, pledge, or other disposition, which would have been valid if the consent had con- tinued, shall be valid notwithstanding the determination of the consent : provided that the person taking under the disposition has not at the time thereof notice that the consent has been determined. (3) Where a mercantile agent has obtained possession of any documents of title to goods by reason of his being or having been, with the consent of the owner, in possession of the goods represented thereby, or of any other documents of title to the goods, his possession of the first-mentioned documents shall, for the purposes of this Act, be deemed to be with the consent of the owner. (4) For the purposes of this Act the consent of the owner shall be pre- sumed in the absence of evidence to the contrary. III. — A pledge of the documents of title to goods shall be deemed to be a pledge of the goods. IV. — Where a mercantile agent pledges goods as security for a debt or liability due from the pledgor to the pledgee before the time of the pledge, thepledgee shall ac(juire no further right to the goods than could have been enforced by the pledgor at the time of the pledge. V.^ — The consideration necessary for the validity of a sale, pledge, or other disposition of goods, in pursuance of this Act, may be either a pay- ment in cash, or the delivery or transfer of other goods, or of a document of title to goods, or of a negotiable security, or any other valuable considera- tion ; but where goods are pledged by a mercantile agent in consideration of the delivery or transfer of other goods, or of a document of title to goods, or of a negotiable security, the pledgee shall acquire no right or interest in the goods so pledged in excess of the value of the goods, documents, or security when so delivered or transferred in exchange. VI. — For the purposes of this Act an agreement made with a mercantile agent through a clerk or other person authorised in the ordinary course of business to make contracts of sale or pledge on his behalf shall be deemed to be an agreement with the agent. VII. — (1) Where the owner of goods has given possession of the goods to another person for the purpose of consignment or sale, or has shipped the goods in the name of another person, and the consignee of the goods has not had notice that such person is not the owner of the goods, the consignee 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. (2) Nothing in this section shall limit or afEect the validity of any sale, pledge, or disposition, by a mercantile agent. FACTORS ACT 1889 293 Dispositions by Sellers and Buyers of Goods. VIII. — Where a person, having sold goods, continues, or is, in possession Disposition by of the goods or of the documents of title to the goods, the delivery or transfer ?®''™ remain- , , ° . J ■ ing in posses- by that person, or by a mercantile agent acting for him, of the goods or sion. documents of title under any sale, pledge, or other disposition thereof, or under any agreement for sale, pledge, or other disposition thereof, to any person receiving the sajne in good faith arid without notice of the previous sale, shall have the same efEect as if the person making the delivery or transfer were expressly authorised by the owner of the goods to make the same. IX. — Where a person, having bought or agreed to buy goods, obtains Disposition with the consent of the seller possession of the goods or the documents obtaimug of title to the goods, the delivery or transfer, by that person or by a mercantile possession agent acting for him, of the goods or documents of title, under any sale, pledge, or other disposition thereof, or under any agreement for sale, pledge, or other disposition thereof, to any person receiving the same in good faith and without notice of any lien or other right of the original seller in respect of the goods, shall have the same effect as if the person making the delivery or transfer were a mercantile agent in possession of the goods or documents of title with the consent of the owner. X. — Where a document of title to goods has been lawfully transferred Efltect ol' to a person as a buyer or owner of the goods, and that person transfers the doaunents on document to a person who takes the document in good faith and for valuable vendor's lien consideration, the last-mentioned transfer shall have the same efEect for stoppage in defeating any vendor's lien or right of stoppage in transitu as the transfer of transitu. a bill of lading has for defeating the right of stoppage in transitu. Sicpplemental. XI. — For the purposes of this' Act, the transfer of a document may be Mode of by endorsement, or, where the document is by custom or by its express fg^^^ terms transferable by delivery, or makes the goods deliverable to the bearer, then by delivery. XII. — (1) Nothing in this Act shall authorise an agent to exceed or Saving for depart from his authority as between himself and his principal, or exempt "^^_°* *'"® him from any liability, civil or criminal, for so doing. (2) Nothing in this Act shall prevent the owner of goods from recovering the goods from an agent or his trustee in bankruptcy at any time before the sale or pledge thereof, or shall prevent the owner of goods pledged by an agent from having the right to redeem the goods at any time before the sale thereof, on satisfying the claim for which the goods were pledged, and paying to the agent, if by him required, any money in respect of which the agent would by law be entitled to retain the goods or the document of title thereto, or any of them, by way of lien as against the owner, or from recovering from any person with whom the goods have been pledged any balance of money remaining in his hands as the produce of the sale of the goods after deducting the amount of his lien. (3) Nothing in this Act shall prevent the owner of goods sold by an agent from recovering from the buyer the price agreed to be paid for the same, 294 FACTORS ACT 1889 Saving for common law powers of agent. Repeal. Commence- ment. Extent of Act. Short title. or any part of that price, subject to any right of set off on the part of the buyer against the agent. XIII. — The provisions of this Act shall be construed in amplification and not in derogation of the powers exerciseable by an agent independently of this Act. XIV. — The enactments mentioned in the schedule to this Act are hereby repealed as from the commencement of this Act, but this repeal shall not afEect any right acquired or liability incurred before the com- mencement of this Act under any enactment hereby repealed. XV. — This Act shall commence and come into operation on the first day of January one thousand eight hundred and nineby. XVI. — This Act shall not extend to Scotland. XVII.— This Act may be cited as the Factors Act 1889. SCHEDULE. Enactments Repealed. 4 Geo. IV. c. 6 Geo. IV. c. 94. 5 & 6 Vict. c. 29. 40 & 41 Vict. c. 39. An Act for the better protection of the property of merchants and others who may hereafter enter into contracts or agree- ments in relation to goods, wares, or merchandise en- trusted to factors or agents. An Act to alter and amend an Act for the better protection of the property of merchants and others who may hereafter enter into contracts or agree- ments in relation to goods, wares, or merchandise en- trusted to factors or agents. An Act to amend the law relat- ing to advances bona fide made to agents entrusted with goods. An Act to amend the Factors Acts. The whole Act. The whole Act. The whole Act. The whole Act. FACTORS (SCOTLAND) ACT 1890 295 ACT OF PARLIAMENT TO Extend the Provisions of the Factors Act 1889 to Scotland. — 53 c& 54 Vict, cap. iO.—lUth August 1890.] Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows : — I.— Subject to the following provisions, the Factors Act, 1889, shall ^.PB'^SS'S?."* apply to Scotland :— c 45 to Scot- land. (1) The expression " lien " shall mean and include right of retention ; the expression " vendor's lien " shall mean and include any right of retention competent to the original owner or vendor ; and the expression " set off " shall mean and include compensation. (2) In the application of section five of the recited Act, a sale, pledge, or other disposition of goods shall not be valid unless made for valuable consideration. II. — This Act may be cited as the Factors (Scotland^ Act 1890. Short title. ■ Abandonment by tenant, acquiescence in, 82 ; a., mora must amount to, 126. Abatement of nuisance, 68 ; a. of rent, how proveable, 79, 81. Absentee, in regard to homologation, 164 ; a., proof of his acquiescence, 62, 63, 66. Abstention as rei interventus, 38, 40, 45, 48, 49 ; a. from diligence, 93 ; a. in proof of acquiescence, 60. Acceptor of biU, pleas denied to, 116. Accretion of lease, 13. Acquiescence, 1, 4. Non repugTiantia, 54 ; proof of consent, 54 ; mora, 54 ; tacit representa- tion, 54. A. and estoppel distinguished in England, 54. 1. Parties under mo antecedent contract, 54. Neighbourhood, 54 ; servitude, 55, 58. Definition of this function of A., 55 ; great cost, known and irretrievable in a business sense, 55. Agreement spelt out of facts, 55. In Scotland, no application as modus acquirendi of heritable property, 55 » encroachment beyond boundary, 55 ; gable, 56. Secus in England, 56. Depending on bona fides, 56. Recompense for meliorations, 56. Uses of heritable property, 57 ; use within march of building set up beyond march without effective cavU, 57 ; alteration in natural ilow of stream, 57. A. requires something more than silence, 58. In England, interference with stream, 58, 61 ; encroachment of building or nuisance encouraged, 59. Actings in progress and actings completed, 59 ; a. an imperfect legal term, really tacitly inducing, 59, or quiescence inferring assent, 59-60. Secus, if act is completed without the knowledge of the other person, 60. Requisites of a. (in England), 60 ; so as to make it fraudulent to set up legal right, 60 ; mistake as to that on the part of the person pleading a. ; expenditure or other act by him ; knowledge by holder of the legal right of that inconsistent right ; and of the other's mistake ; and encouragement of the expenditure or other actings, either directly or by abstaining from asserting the legal right, 60 ; abstention or passivity alone not enough, 60. k Knowledge, as a requisite of a., 61 ; knowledge of one's private rights is usually presumed, 61 ; as well as means of resistance, 62 ; knowledge by a corporation, 62 ; by a flar during liferenter's tenure, 62 ; by an absentee, 62, 63, 66 ; by a minor, 62 ; by a singular successor's author, 62 ; by land factor, 64 ; of what is not illegal, 63, 68 ; encouragement, 63 ; a. jealously scrutinised, 63. A. in regard to interference with watercourse, 63-4 ; to thirlage, 64 ; to salmon-fishing, 61, 64 ; to public rights and servitudes, 65 ; of road obstructed by building, fencing, ploughing, 65 ; deviation of road, 65 ; servitudes of light and non altius tollendi, 65. Increase of burden, 66 ; building in alveo, 66 ; sewage system, 67 ; two pipes instead of one, 67 ; pollution of water, 67. Renewed burden after disuse, 68 ; Complete abatement, the remedy, 68. Anticipated nuisance— quia timet, 68. 2. Parties under contract : — If the interest to object is not lost, 68-9, 76 ; mutuahty of obligation, 69. (a) Building schemes innovated on extensively, 69, 74 ; with acquiescence of party entitled to object, so far an enfranchisement, 70, by the superior 297 298 INDEX Acquiescence — continued. or owner of a building estate, 69, 71 ; by fellow feuars or disponees, 70. The inception of interest of the former and of the latter group contrasted, 70 ; e.g. a co-feuar himself contravening, 70, or his comfort is not affected, 71. Partial enfranchisement, 71. Opposite houses in a street, 71. Height and roof, 72 ; platting over front areas ; jutting beyond contemplated street line, 72 ; dissimilarity of allowed and proposed alterations, 72 ; use as dwellings only, 72-3 ; as private residence barring school, 74 ; prohibition of trade, 75 ; of shops, 75 ; change in the nature of the neighbourhood, 76. The a. deprives others of their right to object, 73 ; delay, 73, 75 ; jus qucesitum tertio, 73. Whole land of objector sold, 76. (6) Alteration of written contract : — In continuing contracts, especially lease, 76 (also as to rights arising out of decree of Court, 76) ; ]both parties having agreed to the change, 77. Dis- tinguished from annexing to terms of writs intended to embody the contract, what had antecedently or unico contextu been said or written, that being incompetent, 77, unless a necessary term in an undoubted contract has to be supplied by the Court, 78. Here there is nothing in law to prevent parties changing their minds mutually, and the question is as to the mode of proof of the change, 78, viz. by probative writ, or oath on reference, or by informal writ or parole, each followed by acquiescence, reaching up to consent, 78, 80 ; i.e. by improbative writ, or verbal agreement (proved by writ or oath), each followed by (so-caUed) rei interventus ; also by parole agreement and actings thereon, at least so as to bar challenge of the things done; also by acquiescence; also perhaps rebus ipsis etfactis both as to past and future, 80. Bargaddie Goal Co. v. Warh, 78 — tenant piercing stipulated coal barrier allowed to prove verbal consent by landlord thereto, 78. Reduction of rent, 79 ; or abatement thereof, 79-81 ; Inversion of possession by tenant acquiesced in by landlord, 81. Not enforcing an exclusion of assignee or sub-tenants, 82 ; not objecting to abandonment by tenant, 82 ; not exercising right to forfeit a lease, 82. As to removings, 82-3. Landlord acquiescing in misoropping, 83-5, bars claim for more than the actual deterioration, 83 ; case of purchaser of the farm, 83—4 ; the acquiescence does not bar claim for future penalties or pactional rent, 84-5. Tenant acquiescing in short quantity, 85 ; in the results of flooding, 86 ; in damage from game and rabbits, 86 ; in lack of heather-burning, 86 ; in lack of repair, 86, of farm buildings, of fences, of dwelUng, its stairs, floors, drains, 86. Master and servant, latter waiving grievances, 87-8. Arbitration, a. in going ultra fines in, 88. Incompatible conduct, 88. Bill, discharge of, 88. Law agent and his security, 89. Partial frustration, 89. (c) Circumstances in which a. is readily admitted : — Where delay in objecting is fatal, 90, 96. E.g. (1) In averring /rawd, 90, in the sale of a business, 90, in the transfer of shares, 96, in a prospectus, 90. 2. Bankruptcy : — A. in a private trust for creditors, 90 ; by attending meetings of the creditors, 90 ; signing a proxy, 91 ; buying at a sale of debtor's goods, 91 ; by acting as commissioner ; by accepting a dividend, 91 ; though the trust-deed be stale, 91 ; by competing for the trusteeship, 91 ; by voting in the election of the trustee, 91. Similarly in regard to composition contract and deed of arrangement, 91. Conversely, a. of the bankrupt in the vahdity of debts in his state of affairs and in his creditors' lawful arrangements, 92. As to consents respecting Uquidation of a deceased person's estate, afterwards found to be insolvent, 91. As to a. in trustee's actings, 92 ; and as to bankrupt returning to business, 93. A. in process and diligence generally, 93: — prorogation of jurisdiction; ' competent and omitted ' ; passing from dihgenoe ; competency of the Court ; validity of the litis Contestatio, 93. Party to a case Mng by to await the result, 93, 96, 97. INDEX 299 Acquiescence — continued. 3. Companies : — Irregularities in company matters : — In calling or conducting meetings, 94. In the question whether one is a shareholder or contributory, 94 ; he has paid calls and been registered, has sought to vote, is prompter-shareholder, underwriter of shares, active director, 94. Contra, if let out by the directors and replaced by another, even by the company itself, 94-5. All these are dornestic affairs, in which omnia preswmuntur rite et solenniter acta, 95. City of Glasgow Bank cases : — Transfer accepted though not registered ; signing mandate to enable beneficiary to draw dividends ; receiving dividend warrants ; responsibility for what agent has done ; minor ; curator bonis, 95. Asserting and repudiating too late membership of st company, 96. Forfeiture of shares, 96 ; inferred and not inferred, 97. Joint adventure, 98. Forfeiture as a boon, 98. Svu-render of shares, 99. Compromise, 99 ; full information to share- holders ; bona fides in carrying the scheme out ; though the surrendering shareholder's knowledge was general and not of detail, 99-100. Transfer of shares, irregular and not unduly delayed in completion, 100. A. and mora in calling directors to account, 100-1. 4. Inconsistent conduct (incompatibility), 101-6. Taking a side in a suit ; attorning as tenant ; founding on contract, 101 ; sampling before auction ; heir of tenant taking over farm ; trustee offering for bankrupt's land ; owner encouraging one to purchase from a third party ; valuing subjects for a security ; choosing heir as debtor ; party to joint case for counsel ; auctor in rem suam ; chairman declaring motion carried ; factor dis- claiming individual interest in estate ; ignoring shortage of extent, 102 ; proxy ; ignoring irregularity in municipal affairs ; contractor's remuneration ; keeping up bin or bond ; leaving others to fight out an action ; re-sale, 103. Not incompatible : — ^Teind locality ; repayment of rates, 104 ; agent for two opposed parties, 104, 105 ; deathbed ; fiferenter and Hora and prescription regarding, 131. C, proof of, 38, 43-45, at common law ; under Mercantile Law Amendment (Scotland) Act 1856 (in writing sub- scribed by cautioner or his agent), 43. In England, Statute of Frauds, and Lord Tenterden's Act, 43. In re mercatorid, 44. Question whether writ must be formal, or if not may be clinched by rei interventus, 44-5. Cannot be oral, 46. C, relief from, 44. Caveat emptor, 266. Certificate of shares, 184. Certification of shares, 191. Change of tenant, 199 ; c. of employment, in guarantee for fidelity, 288. Charity and mora, 138. Chartered company and ultra vires, 180. Cheque, certified, 259 ; c, crossed, 223 ; c, forged, 258. Church property, acquiescence in change of use of, 66. Classification of estoppel, 4. Clear statement essential in estoppel, 6, 267. Clerk as agent, 222. Club, 161, 172. Collusion between forger and person whose name is forged, in regard to adoption of bill or note, 212. Collusive possession, 225. Commissioner, acting as c. proving accession to trust-deed, 91. Common carriers, as to disclaimer of employer's title, 26. Common law and equity, 28. Common property, 67 ; c. p., acquiescence in change of use of, 67. 302 INDEX Company : — Irregularities in conduct of c. acquiesced in passively, 94^101 : — In calling or conducting meetings, 94 ; in regard to membership, 94, by paying caUs and being registered, by seeking to vote, by being a promoter-shareholder, by being underwriter of shares ; by being an active director, 94 ; or contra by being let out by the company, 94-5. For omnia preaumuntur rite et aolenniter acta, 95. Transfer accepted though not registered; mandate for drawing dividends ; receiving dividend warrants ; responsibility for agent's actings ; minor ; curator bonis, 95. Mora in asserting or repudiating membership, 96. Forfeiture of shares, 96-8. Joint adventure, 98. Surrender of shares, 98, owing to compromise after full information to members, though perhaps not detailed, 6o?M^de«, 99-100. Irregular transfer of shares, 100. Acquiescence and mora in calling directors, etc., to account, 110. Homologation by the actings of r.. and its directors and officials, 179 scq. Ultra vires acts if fundamental, 179 ; cannot be ratified, 179. Chartered com- pany differs in regard to the remedy, etc., 180, from statutory company, 180. Memorandum and Articles of Association, 180. Ultra vires acts, if not fundamental, may be ratified, 180 ; these two classes illustrated, 181 ; internal management presumed to be solenniter acta, 181, 183, 189. Objects expressed in Memorandum or derived from reasonable implication, 182. Shareholder suing directors, 182. Ratification of what may be ratified must proceed on fuU knowledge of the actings and of the objection to them, 183, by shareholders of the actings of the directors, 183-4, by directors of the actings of officials, 183 ; testimony of the company's books, 183. Use of goods ordered, 183. Benefit society, 184. Share certificate, 184, prima facie evidence of member's title, 184 ; issued through mistake and fraud of officials, 184-5, in a question with a. bond fide onerous transferee, 185, though not a negotiable instrument, 185-6, nor is there a warranty, 185-6. Refusal to register a purchaser of shares, 186-8. The advantage to the company of easy transferabihty of its shares, 187 ; for- gery, 188-90 ; change of position, 188-9. Directors and secretary, their respective duties, 189 ; measure of damages owing to reUanoe on an ineffective certificate, 189, Irregularities, 190. Purchasing shares in the absence of a certificate, 190. Transferor getting back certificate through mistake, 190. Fully paid shares, 190-1. Certification of shares, 191. Entry in register, 192. Negligence of company or of those dealing with it. See Iveghgence, Con- cealment in prospectus. C, mora in impugning compromise by, 120, 123. Competency of Court, acquiesced in, 93. Competent and omitted, 93. Completed and uncompleted actings, acquiescence in regard to, 59. Composition contract, accession to, 91. Compromise, 35 ; c. difficult to set aside, 120, 135 ; c. in regard to surrender of shares, 99-100. Compulsory powers, whether affected by mora, 130. Concealment ob Non-disclostjkb, Bab by : — Fraud (which is dishonesty) ; innocent misinterpretation, 266 ; rescission only if the misrepresentation is in the contract itself or in a warranty or (being really acted on) lends the plea of bar or estoppel, 266. Concealment (which is non-disclosure, where there is a duty to reveal) creates bar in oases where the contract is one uberrima fidei, 266, not in most contracts, 266. Trustee honestly but mistakenly replying as to encumbrances on the trust estate, without warranty and without express or implied but clear and un- ambiguous representation that the reply is exhaustive. Estoppel only a defence, 266-7 ; knowledge and»means of knowledge, 267. The contracts uberrimce fidei are Insurance, Caution, or Guarantee (in ■certain cases), and Partnership, 268. Insurance. See Insurance. INDEX 303 Concealment or Non-Disclosure, Bar by — continued. Caution or Ouarantee : — - Its relation to insurance, 280. Distinction herein between guarantee for debt — where there is usually no duty to disclose — and guarantee of fidelity — ■ where there is such, 280. Policy likened to guarantee for ultimate loss, 281 ; beneficium ordinis or discussionis, 281. Subrogation, 281. In the one the debtor tenders the cautioner and the cautioner is presumed to have sufficient information ; in the other the proposing creditor tenders the cautioner and must give full disclosure of all relevant facts, 281-2. In the first case the cautioner can buy his discharge at any moment by paying the debt ; in the second he cannot perform the duty of the person guaranteed, 282. Employee against whose conduct nothing at the date of the guarantee is known (not merely suspected), over against one supposed not to be trustworthy, etc., 283. Guarantee for past as well as future transactions, 284. The concealment need not be wilful and intentional ; it may yet be improper ; the question turning not on motive but upon the presumed effect, 284, and to some extent turning on the amount of indebtedness or its recent emergence, 285 ; relevant facts pending the guarantee — change of employment, enhancement of responsibility, 285. In bankruptcy cases, caution for the trustee, 285 ; conduct of com- missioners inferring connivance or not, 285 ; the caution being meant to pro- vide for the latter, like other statutory provisions, 286. Omission by em- ployer to do what he has to the cautioner contracted to do, 286 ; immediate dismissal on knowledge of (not merely uneasiness concerning) untrustworthi- ness of employee, 287 ; gross carelessness and concealment, 287. Partnership and Company : — In the inception of the relationship, 288 ; the remedies, 288. Prospectus not reasonably exhaustive even though complying with the minute require- ments of the Acts, 288 ; the test being what the public ought to have been told, 289. Concealment in arbitration, 195 ; c. inter socios, 178 ; c. of law, 4 ; of material facts, 5 ; by party pleading bar, 6. Condictio indebiti, 143. Conduct, 1, 3, 4, 6. Consensus in idem placitum,, 33. Consignees under the Factors Acts, 238. Consignors under the Factors Acts, 238. Constituted claims, m/)ra in regard to, 128-31. Constitution, and proof, of contract distinguished, 31. Constructive eviction, 17 ; c. notice, sei Imputed Knowledge ; c. trust, 98. Continuing contract, alteration of, 76. Contract, personal bar is here treated as part of the law of, 1. Conventional irritancy of lease, 198. Copy, in proof of contract, 35. Corporation, knowledge of, as proof of acquiescence, 82 ; c. and ultra vires, 180. Course of dealing, 89 ; explaining authority of agent, 219 ; proving scope of agent's authority, 219, 223. Court executing document for recalcitrant party, 29 ; ordering performance of partially imfulfilled contract by other than the obligant, 29. Credit, letter of, 253. Culpa lata equiparatur dolo, 250. Culpabihty, 2. Curator bonis as shareholder, 95. Custodier, iu Sale of Goods Act, 23. Custom, 89. Damages arising in transfer of shares, 189 ; d. in the case of inchoate contract, 33 ; d. refused if contract is not reached, 33. Death of principal, 225. Deathbed, 104, 141, 145, 154. Debenture, irregularly issued, 184. Deceased partner, as to holding out, 244. 304 INDEX Declaration, in insurance, 275. Decree, whether affected by mora, 129 ; d. in absence, mora in reponing, 125. Deed of arrangement, accession to, 91. Defamation, and mora, 138. Defence, personal bar is only a, 266-7. Delay, 1, 117. Delegation, by emergence of new tenant, 21 ; all three parties must agree, 21 ; d. in. partnership, 178. Deliberation, bargaining stopping at, 34. Delivery order, 231, 256, 257 ; negligence in regard to, 254 ; tampered with, 256. Deposit receipt, 227. Diligence, abstention froin, 93. Direct and immediate cause of loss, 251. Director, 189 ; d. fixed as being shareholder, 94 ; d., liability for results of his acting ultra vires, 182 ; d. warranting his authority, 172. Directors, liability of, delay in asserting, 100-1. Discharge, implied, 139. Disclaimer of Title, bar to, 10; in regard to teinds, 11 ; in regard to feu and long lease, 11 ; in regard to sahnon-fishings, 11 ; in regard to leases generally, 12-22 ; operates mutually, 15. Attornment, 16 ; payment of rent, 16 ; title para- mount, 17 ; safeguard against having to pay rent twice, 18 ; in regard to lessor's successors, universal (heirs) and singular, 19. Surrender of lease, 19 ; by operation of law, 19 ; novation, 20, the new lease being void or voidable, 20. Delegation, 21 ; all three parties must agree, 21. In regard to patents, 14, 22. In regard to agents, partners, and bailees, 23-7 ; warehousemen and wharfingers, 23-5 ; auctioneers, 23, 25 ; carriers, common carriers, 26. Disponees, in regard to enfranchisement of building restrictions, 70-1. Dissolution of a fiim, 244. Distraint, 16. Dividend, in bankruptcy, accepting a d. as accession to trust-deed, 91 ; d. warrants, negligence in regard to, 253 ; d. warrants, received, infer membership of a com- pany, 95. Dock-warrant, 231. Doctor's queries, in insurance, 275. Document of title, 231. Domestic management of company, 181, 183, 189. Donation, inter virum et uxorem, 153. Double agency, in partnership, 175. Draft, in proof of contract, 35 ; d. of an alteration, signed, 78. Drain, disrepair of, acquiesced in, 86, 87. Drawer of bill, pleas denied to. 111. Duty, to bank, of its customer, 254. Dwelhng changed into shop, 75, and vice versa, 81 ; d., disrepair of, acquiesced in, 87 ; d., restriction to use as, 72-3. Earnest, 36, 48, 49. Election, 131, 140. See Homologation. E. between proceedings against actual firm or firm held out, 248 ; e. whether to irritate a lease, 196. Embodiment of contract, not alterable by previous or collateral bargain, 77. Encouragement, as proof of acquiescence, 63 ; e. of expenditure as a requisite of acquiescence, 60 ; e. to act, an effect of mora, 120. Encroachment, beyond boundary, acquiesced in, 55, 57 ; e., and mora, 138. Equitable mortgage, 189. Equity and common law, 28. Error, a requisite of acquiescence, 60. Error calculi, 139. Essential error, 263. Estate books, in proof of contract, 36. Estoppel (see Personal Bar), 1. Common to England and Scotland, 1. Q INDEX 305 Sstoppel — continued. Defined, 2, 3-6. , Wilful inducement, 2. Alteration of position, 2. Not induced by misrepresentation or concealment, 6. By record, is res judicata, 6. -E., by deed, i.e. solemn deed, 6 ; in pais is bar by conduct, including statement, 6. E., relation to acquiescence, 54. E., against estoppel, 188 ; e., agency by, 217 ; e., and acquiescence, 54. Eviction, constructive, 17. Evidence, loss of, a result of mora, 118-9 ; e., personal bar is part of the law of, 1 ; being conclusive e., 1, 8. Evidence of contract, in Scotland, 29, 30 ; prescribed by special statute ; prout de jure ; normal legal modes, 29 ; informal modes clinched by conduct, 29. Probative writ ; oath on reference, 30, 33, 36. Excambion, 64, 66. Exclusion of assignees or subtenants in lease, waived, 82, 198, 200, Executed contract, acquiescence in regard to, 59. Execution of document, by officer of the Court, 25. Executory contract, acquiescence in regard to, 59. Wxeroitor navis, 110. Ex facie absolute disposition, classed with Enghsh mortgage of land, 18. Expenditure, as a requisite of acquiescence, 60 ; e., as rei interventus, 37 ; trivial, 37 ; in anticipation of contract, 41-2 ; e., as rei interventus in lease, 49. Expiry of lessor's right, 13-15, 17 ; being a liferenter, 17, or bankrupt, 17, or having to lessee acknowledged ouster, 17. Fact, 3. • jf^ Factor (land), his acquiescence in change of rent, 81, 87 ; /. (land), remuneration of, for extra work, 112 ; /. (land), acquiescing for his employer, 64 ; /. (mercantile), now called mercantile agent, 231. Factoes Acts : — History in Scotland and England, 229 ; their scope, 230 ; only required where the owner of goods is deprived of them without his authority, possession being the cardinal fact, 230, along with bona fides and onerosity on the part of the recipient, 231. Definitions of mercantile agent ; of possession ; of goods ; of document of title {inter alia, biU of lading, dock-warrant, warehouse-keeper's certificate, delivery order) ; of pledge, 231 ; of person (including any body of persons corporate or unincorporate), 231. Mercantile agent formerly (and still in the titles of the subsisting Acts) known as factor, 231. Mercantile agent, 231 ; salaried agent with commission in addition, not a mere servant, or pledgee or broker or forwarding agent, or traveller, or warehouseman, or joint adventurer with a pledgee or one holding a general power of attorney, 232. Secus though the authority was only to exhibit, 233. Powers of mercantile agent to pass title by disposition of goods (including sale and pledge) if he is in possession, 233 ; the other party being in good faith, without notice and onerous, 233. Owner's consent presumed, 233. The consideration need not be whoUy in money, 233. The disposition may be fraudulent, if the recipient be innocent, 234. Notice means knowledge, however acquired, of the limitation of authority, 234. Consent of owner withdrawn, 235. Sub- dispositions, 235. Pledge of documents of title, 235 ; confined by the position of the clause in the Acts to pledge by an actual mercantile agent, 236, to the exclusion of buyers and sellers, 236 ; not necessarily of specific articles, 236. Pledge for antecedent debt, 236. Barter or exchange, 237. Agent's authorised clerk acting for him, 238. Consignees safeguarded as to securities by consignor's possession, 238. Dispositions by seller still in possession, and by buyer allowed possession. 306 INDEX Taotors Acts — continiied. though the full property has not passed to him, equiparated to mercantile agents, except as to pledging of document of title, 238-40. Hire-purchase, 240. Sale and return, 241. Vendor's hen and stoppage in transitu affected, 242. Fault, 2. Feeding the estoppel, 8. Fences, disrepair of, acquiesced in, 87. Feu, adopted by a trustee, 108 ; /., contract of, actings unequivocally referable to, , are rei interventus, 47 ; /., substituted for a lease, 41-2. Feuar, in regard to enfranchisement of building restrictions, 70-1. Fiar and Uferenter, 104 ; in regard to acquiescence, 62. FideUty guarantee, 280. Flooding damage, acquiescence in, 86. Floor, disrepair of, acquiesced in, 86. Forfeiture of lease, 197 ; snatched, 198 ; and jus tertii, 198 ; /. of lease passed from, 82 ; /. of shares, 96 ; /. to the Crown, of lessor's title, 13. Forgery, by employee, 252-3 ; /., in dealing with company shares, 184-5, 188-90 ; /. of bill or note or bond, adopted or accredited, 209, 212 ; series of such forgeries, 212-3. Formal writ, in contemplation of parties negotiating and acting, 34-5. Fraud, 1, 5, 10 ; /., in equity in England, 60 ; /., to be exposed as soon as detected, 90, in sale of a business, in a transfer of shares, in a prospectus, 90 ; /., under the Factors Acts, 234. Frustration, partial, 89. Fully paid shares, 186, 190-1. Gable, 56. Game, damage from, acquiesced in, 86. General agency, 167. Giving time, 131, 286. Grain rent, altered to money rent, 81. Great cost, 55, 61, 63, 65, 66, 73. Gross negligence, 250. Guarantee, see Caution. Heather- burning, damage from, acquiesced in, 86. Height of houses, building restrictions as to, 72. Hereditas jacens, of wife, 153. Heritable title, 130, 138 ; h. t., not affected by acquiescence, 55. Hire-purchase, under the Factors Acts, 240. Holding Out, 1, 259. See also Agency, Partnership, Company. An example of personal bar or estoppel, 215 ; because everyone is responsible for the natural consequences of his acts or omissions, and because, where one of two innocent persons must suffer from the conduct of a third, he is hable who put it in the power of the latter to behave as he did, 215. The funda- mental doctrine is indemnity for injury due by one who requested it to be done, no matter whether the person who makes the request is aware of the invaUdity of his title to make it or could with reasonable diUgence have discovered it, 216 ; with the sole exception of negotiable instruments, 216. 1. Agency : — Actual and ostensible or apparent authority, 217. Agency proveable prout de jure, showing the employer's wUl, the latter's conduct (acted upon) being a mode of proof. This last has been called ' agency by estoppel,' 217. The onus hes on the asserter of the agency, 217, e.g. broker entrusted with principal's money, or with blanlt indorsement of principal's share certificate, cheques signed by company directors, 218. Curtailment or withdrawal of authority unknown to customer, 219. Actual authority, 219, known to the latter, 219. Per procuration, 219 ; its extent should be ascertained, 219. Course of dealing, 219, 223 ; anything abnormal INDEX 307 [olding Out — continued. should rouse inquiry, 219. Master and servant, 220 ; wife's prepositura, 220. Ready-money transactions, 220 ; agents in litigation, 220. Borrowing by agent, 220 ; special case of this enuring to the benefit {in rem versum) of the principal, 220-2. Bills or notes signed by agent, 222 (Code, s. 25), per procuration where held by an onerous bond fide creditor, 222 ; usage of trade and course of deaUng, 223 ; abuse of actual authority, 223. Cheques when crossed, 223. Code, s. 25, refers only to current not to discharged bills and notes ; s. 82, to discharged cheques, 223. Knowledge of agency, 224 ; agent or middleman, 224. Termination of agent's authority : — Death or bankruptcy of principal, 225 ; dissolution of a firm, 225 ; insanity of principal, 225 ; knowledge of the third parties, 225. Possession of the indicia of ownership : — As to heritage, 225 ; as to moveable property, 225 ; reputed ownership, 225 ; collusive possession, 225 ; sale or security ? 226 ; Factors Acts, 226, 233 ; onerous transferee, 226 ; blank transfer of shares, 226 ; deposit receipt, 227 ; warehouseman ; negotiable instruments, 227 ; sale or return, 227. Factors Acts. See Factors Acts. 2. Partnership : — Limited partnership, 243. Ordinary firms, 243. Section 14 of the Code, 244. One representing him- self, or knowingly suffering himself to be represented, as a partner, is hable as a partner to one who thereon gives credit to the firm (apparent partner), 244 ; but use of deceased partner's old firm's name or of his own as part thereof does not of itself make his estate hable for future debts, 244. Other clauses as to dissolution of a firm and notifjring or advertising out, 244. Partner by estoppel, 245, contrary to the fact that he is not a partner, 245. Knowledge, of the third party, 246, of the defender himself, 246. Retired partner, 247. Innominate firm, 247. Issues, 248. A true option between proceeding on estoppel or on the actual fact, 248. Representatives cannot interdict use of deceased partner's name, 249. adding out ' to the world,' 219. SOMOLOGATION, 1, 131. By active conduct, thus distinguished from acquiescence, 140-1 . Otherwise called Ratification, Ratihabition, (involving Election, and Approbate and Reprobate), Approbation, Confirmation, 140, i.e. later is equivalent to original consent, 140-1. Must rest on unequivocal circumstances, 141, not contrary to statute, 141, uoT funditus void, 142. Distinguished from rei interventus, the conduct being that of the obligant, 141 ; and from adoption, 142, e.g. where facility and insanity were both averred, 142-3 ; fraud, 143 ; coercion, 143. H. itself unlawfully obtained, 143, as by misrepresentation or non-disclosure, 143. By one capable of consenting and with adequate knowledge of the facts and of his right to elect, 143. Error in law, 143. In breach of trust ; auctor in rem swam, 144. H. as to the past and not for the future, 144. Alteration of position ; enorm lesion, 144. Unequivocally referable to the disputed transaction, 144. Witnessing documents, 144-5. Effect of H. It may be conditional or (if divisible) partial, 145. It is retroactive, but only as between parties and their respective representatives. 146, not in a competition with creditors, 146. Approbate and reprobate in regard to succession, 146 segq. Has the choice between alternatives been soundly made ? Deliberately, after full informa- tion, not misled, though perhaps not aware fully of the law, intelligently, not hastily, with independent legal advice, 147, 149, 150. Widow : — where H. was estabhshed, 147-8 ; where not, 148-50 ; in luctu, 149, 153 ; forfeiture wholly or partially on re-marriage, 149-50. Children : — Knowledge of the elements of the option; 150, or qii. imputed knowledge, 151. 308 INDEX Homologation — continued. Jostling testamentary provisions, 151. Personal disability, 152. 1. Coverture. — Change of the law of Married Women's Property by Act 1920, 152. Knowledge inferred, 153. 2. Minority. — Betting and Loans (Infants) Act 1892, and Moneylenders Act 1900, 153. Common law. — ^Deeds ah initio nuU and void, 154 ; deeds voidable, 154 ; enorm lesion ; fraud ; qtmdriennium utile, bar then or later, 154. H. must be after majority (1681, c. 19 (85)). Proveable prout de jure, if cogent, 154; may be conditional or for the past only, partial, if the obligation be divisible, 155. Not, it may be, proved by payment, nor if in an inappropriate deed, nor payment for necessaries only, nor receipt of interest and part of capital of land sold, 155. Knowledge of everything material after majority is required, 155 ; taking what comes alioqui ; award ; bankruptcy, 155. Discharge of guardians not impugned for a long period, 156 ; entail ; deathbed ; assigna- tion after majority ; shareholder, 156 ; compromise, 156-7. Agency. — H. of acts or conduct of agent : — Not open, where one contracts in his own name, without authority of a principal, so that anyone as principal may take the contract up, 158-9. The act must have been done for another by a person acting for that other, though without antecedent authority, 159. 1. Therefore the principal must exist, 159 : — Promoters of a company, 160. Non-existing company sought to be made hable for their actings and for their employees, 161 ; (clubs, 161) ; party contracting in his own name for an inchoate company, 161. 2. There must be capacity to homologate ; minority ; insanity ; funditus ultra vires, 161, or unlawful, 162. 3. Not too late, e.g. warning to a tenant, 163 ; option to be kept open, 163 ; stoppage in transitu, 163 ; marine insurance, 163. 4. In knowledge of the facts ; or accepting the risk of not inquiring, 164 ; absentee} 164 ; adopting proceedings in Court, 164 ; whether mandate extended to appealing against a decree, 165 ; in shipping cases, of acts of master abroad, 165 ; solicitor using the name of another solicitor in litigation, 165 ; soHcitor acting for two cUents, 166 ; re-sale of ship by agent who had bought it for himself, 166; principal putting himself unreservedly into the agent's hands, 166. 5. Proved expressly or by conduct : — Purchase of necessaries by servants ; by wives ; by children not foris- familiated ; company officials ; going on without objection by principal ; bankruptcy trustee ; ship's husband or captain — these employments having a general scope, 167. Where there is no general agency, the proof of h. must be more emphatic, 167, e.g. principal suing on agent's contract, 167 ; acceptance of lawsuit service ; averment of pa5?ment made ; suing on intromissions ; accepting price ; two businesses, 168. 6. Not partial, i.e. the bad with the good, 168. Effect of H. :— Not revocable, 168 ; retroactive as between agent and principal, and as between principal and third parties, 169 ; in the latter case, however, only if some contrary interest has not vested, e.g. warning of tenant, dishonour of bUl, lapse of time, 169. Exceptional case of marine policy after loss, 169 ; agent without authority ad hoc, 169. As between agent and third party — the so-oaUed warranty of authority and consequent responsibility in case of breach, 170. Collen v. Wright, 170 ; authority never having been given, or, if given, has terminated whether or not in the last case he knew thereof or should have known, 170-1 ; auctioneer's mistake, 171-2 ; promoter and club cases, broker purporting to act for both parties ; architect ; directors as to overdrafts, etc. ; railway manager ; one letting heritage or subletting, 172 ; brokers generally, 173. Not, if facts are known on both sides ; mere messenger ; mistake only of law ; public servant, 173. In the case of solicitors, who have also a duty to the Court, 173 ; the INDEX 309 ilomologation — continued. same rules illustrated in litigation and expenses aiid damages, 174. In all cases — measure of damages, 175. Partnership : — The double agency — partner for his firm, and the firm for each partner, 175. How the normal relation set out in the Code may be altered by acquiescence or h., 76. There must be knowledge of the unauthorised actings, e.g. in giving caution or warranty, speculating, opening a new branch office, going to arbitration, taking a lease, pledging firm for individual debt, 176 ; liability for debt contracted before a new partner entered, 177 ; res inter alios acta, 177 ; novation or delegation, e.g. amalgamation of firms ; son or servant admitted partner, 178. In sale of shares inter socios, there ought to be the frankest disclosure, and it is no defence for the fraudulent partner, that the other had ample means of inquiry, 178. Retroaction, 179. Company, see Company. Arbitration : — Litis contestatio, 192. Rules the same in England and Scotland, 193. Waiver of objection to witnesses having been examined behind the backs of the parties sustained, 193, the irregularity not being fundamental, 193, whether on a submission or only an ancillary reference, 193. Articles of Regulation 1695, 193. Fundamental irregularities not ratifiable except of consent, 193 : — party nam- ing both arbiters ; evidence given by an arbiter ; illegality of the submission ; arbiter a shareholder in a party company, 193 ; arbiter not having a prescribed quahfloation as to evidence taken behind the back of one of the parties, 194. Irregularities capable of ratification : — submission iU-executed, 194 ; objection to prorogation ; to informal award ; to appointment of oversman by lot ; to third arbiter acting as oversman or oversman as arbiter ; extension of scope of reference, etc., 194. Modes of ratification : — one taking steps of procedure inconsistent with his plea, or obtempering the award, unless the former be done subject to. serious protest, 194. Proof of h. must be clear, and the homologator free to act, 194. His know- ledge, actual or imputed, of the blot as such, 194 ; full disclosure, 195 ; archi- tect-arbiter taking a side, 196. Lease : — Void and voidable, 196 ; in the latter (the common) case, power to elect whether to take advantage of the irritancy, 196 ; the elector being usually the landlord, 197. ' Waiving a forfeiture ' is equivalent to election not to avoid, 1,97. This is not proved by allowing the tenant's bankruptcy trustee to possess for a time, or by a reference to arbiters, 198 ; there should be no mma in electing, 198 ; snatching a forfeiture, 198 ; legal and conventional irritancies purgeable at the bar or not, 198 ; jus tertii in other than landlord, 198 ; exclusion of assignees, 198. A question of circumstances, in regard to the last and the tenant's succession, 199 ; conditional waiver, 199. Writ or oath, 199, or conduct, e.g. quitting part of the premises, getting a substitute, possessing on a new bargain, inconsistent with the old, 199 ; receipt of rent, delay m removing proceedmgs, 199. Knowledge, 200 ; repeated breaches, 200 ,• recognition of assignee or subtenant, 200. Insurance, see Insurance. H., after minority, 62 ; h., and rei iiiierventus, 36, 38 ; h., by receipt of rent, 36 ; h., for the past, and authority for the future, 181. Honour policy, 271. Husband sisting himself in wife's suit, 152 ; h. and wife, and mora, 132-3. Illegal contracts, and rei interventus, 33 ; i. contract, 33. Illegality, in regard to acquiescence, 63, 68 ; i. not effective as homologation, 162. lUiterate person signing, 263. Implied discharge, 139. Impotency, and mora, 139. 310 INDEX Improvements acquiesced in, 56 ; i. on land let, list of, in questions of rei inter- ventus, 50-1 ; i. referable only to lease for years, 42. Imputed knowledge, 165, 208 ; i. k., as to forged writ, 213 ; i. k. in regard to rei inUrventus, 38, 40 ; i. h., in questions of homologation, 164, 166 ; i. k. of facts and blot, in arbitration, 194 ; i. k. and mora, 126, 128, of shareholders, 121, 267. Inchoate biU, 262 ; i. company, 161 ; i. contract, damages for breach of, 33. Incompatibihty of conduct, 88, 196. Inconsistent conduct, 88, 196. Increase of nuisance, beyond what has been acquiesced in, 66. Indian Evidence Law, 7. Indicia of ownership, possession of, 225 ; of heritable property, 225 ; of moveable property, 225. And see Factors Acts. Indivisibility of homologation, 168. Indorser of bill, plea denied to, 117. Inducing cause, acquiescence as, 59. Informal modes of proof, 29 ; ill-executed writ, 35. Informal writ, .followed by rei interventus or acquiescence, establishing alteration of a contract, 49. Injury, personal, mora in seeking redress for, 123. Innocence, 1, 5. Iimominate firm, 247. In nudisfinibus, negotiation resting, 35. In pais, 6, 9. Inquiry, one put on his, 39. In re mercatorid, guarantees, proof of, 44. In rem versum, of principal, agent's wrongftd actings being, 220-2. Insanity affecting capacity to homologate, 162 ; i. of principal, 225. Insxtbaiice : — In regard to concealment (non-disclosure) : — Marine Insurance Code, 202—3. Non-disclosure in conducting negotiations, 268 ; viz. of any material! circumstance which is known to the assured, including such as ought in the ordinary course of business to be known to him, 268 ; whether fraudulent or not, 268 ; Scots cases : — master's letters home, clerk's knowledge at home, overdue vessel, capture, 269 ; opinion, nationahty, expectation not fact, 270 ; over-insured pohcies, honour poUcies, 271. English cases : — miscellaneous ; not a negotiable instrument, 272 ; reinsurance, 272 ; requisition by Govern- ment, 273. Prior appUcations need not be disclosed, 273. Circumstances which need not be disclosed. See Code, s. 18 (3). E.g. superfluous, seaworthiness, common knowledge, diminishing the risk, 273 ; matter of law or of personal opinion, 274. Agent's non-disclosure (Code, s. 18), 273, i.e. agent to insure, 274 ; re- insurance, 274 ; masters and ship-agents, 274. Other insurances : — Concealment entitles insurer here also to avoid the contract though the queries in the proposal are wide and minute, 275 ; contrast between verum and verax, 275 ; proposal and declaration, 275 ; replies to doctor, 275 ; material and immaterial disclosures, 276 ; temperate habits refer to alcohol not drugs, 277 ; good health, 277 ; earlier poUcies, 277 ; different user of machinery, 277 ; health of live stock, 278 ; fraudulent and innocent though careless statements, 278. Prior applications for insurance to be revealed, 278 ; collusion, 278. Agent's knowledge, 279 ; the insurer's agent knowing and mis-stating the facts, 279 ; insurer's agent acting for the insured binds the latter, 279, unless the proposal and declaration be spurious, 279 ; agent's expression of opinion as to meaning of the policy, 279 ; the life's statements towards a third-party policy, 279 ; information to insurer's agent in the interval between proposalJ and policy, 279. Remedies, reduction (cancellation), repudiation, partial suspension, 280. /., in relation to guarantee, 280. INDEX 311 Insurance — continued. In respect to homologation, ratification, or waiver, 201 : — A contract uberrimce fidei, 201 ; the objection waived is generally one which might be taken by the insurer, 201. Marine Insurance : — The Code of 1906, ss. 17, 20, 21, enacting as to the utmost good faith, 202 ; the acceptance of the proposal, and representations pending the negotiation of the contract, 202. Waiver of a breach of warranty, 203. ' At and from,' 203. Waiver of notice of abandonment, 204. Proof of homologation, 204 ; election to avoid or not, 204 ; deliberation permitted so long as no material fact has taken place in the interval, 204. Other Insurances, 205. Knowledge of the voidability, 205; not mere suspicion, 205. Agent's knowledge fixing the insurer, 206 ; canvasser, district agent, superintendent, 207. Adjustment of Hability of insurer where there has been innocent blundering by the assured, 207. Proposal not signed or authorised by alleged insured person, 207-8. Non-payment of premium, followed by demand or action, 208. Means of knowledge, 208. Revivor, 209. /., marine, special in regard to date of ratification, 163, 169. Intention, statement of, 3 ; i. and rei interventus, 34. Interdict, e.g. obstruction to salmon-fishing, 61. Interest on ancient bond, 129 ; penal i., 134 ; i. on law agent's account, 137. Interest to object to alteration of building scheme, 68-9, 70-1. Interpleader, 18, 24, 27. Inter rusticos, 132 ; mora in questions, 126-7. Intra familiam, mora in questions, 123, 126-7, 132. Intromissions, by trustee, inferring acceptance of ofiice, 107. Inversion of possession, by tenant, acquiesced in, 81. Irregularities, in arbitration, ratifiable or not, 193-6 ; in company procedure, see Company. IrrevocabOity of homologation, 168. Irritancy in lease, 197 ; legal and conventional, 198. Issues, as to Holding Out, 248. Joint adventure, 98. Judicial admission in proof of contract, 36. Jus qucEsitum tertio, 8, 73 ; among co-feuars and co-disponees, 69. • Jus sanguinis, 138. Key, careless custody of, 252, 253, 254, 260. ' Knowingly suffers,' in the conduct of a non-partner, 242, 247. Knowledge, and means of knowledge, 267 ; k. a,s a requisite of acquiescence, 60-3 ; k., in regard to mora, 118-9, 128 ; of shareholders regarding a compromise or arrangement, 121 ; k. as to forged writ, 213 ; k. by obhgor of the obligee's actings, in questions of rei interventus, 38 ; k. of agent imputed to obhgor and fixing him, 38, 40 ; gathered from facts and circumstances, 40 ; k. by re- mainder man of life-tenant's actings, 40 ; k. in regard to holding out, by a third party, 246 ; by partner himself suffering the representation, 244, 246 ; k. in regard to homologation, 164 ; in regard to fellow-partner's actings said to be homologated, 176 ; k. of agency, 224 ; k. of agent, in insurance, 274, 279 ; k. of any limitation of authority under the Factors Acta, 234 ; k. of beneficiary, 132 ; k. of clerk, in marine insurance, 269 ; k. of dissolution of a firm, 225, 242 ; k. of facts and the blot, in arbitration, 194 ; k. of facts and the blot, by share- holders and directors of company, 183-4 ; k. of shareholders, in regard to surrender of shares, 99-100 ; k. required to prove waiver of forfeiture of a lease, 200. Laches, 120. Lade, altered into a canal, 82. Landlord, a bankrupt lessor, 12, 17 ; /. and tenant, see Lease. 312 INDEX Latent partner, 242, 246. Law, error in, 173, 177, 264 ; I., statement, or concealment of, 4 ; I., not disclosed, in insuring, 274. Law agent, accountable for conveyancing blunder, 137; his acquiescence in security merely. 89 ; his acting for two chents, 265 ; his lien, 104, 105 ; I. a., mora in regard to accounting by, 136. Lease : — In questions of rei interventus : — Oral ; ' verbal,' latter proveable only in writing if for more than a year, 31, 49 ; or by oath on reference or judicial admission, 31 ; if not possessed on, 33. Things done in expectation of a lease, 36-7 ; partial possession and trivial expenditure, 37 ; actings of both parties, 38. Preparatory acts, 36, 40-1. Lease converted into a feu, 41 ; draft lease, 42 ; admission of tenant into possession, 42. Aries or earnest, 49 ; probative writ, 49, or informal writ, or oath, or judicial admission, each with rei interventus, 49 ; possession, 49 ; pay- ment of rent, 49, (possession in acceptance of formal writ of the other party, 49, or if the only alternative to tacit relocation, 49), the payment or possession being ascribable possibly to leases of any duration, 49. Expenditure the usual clinching of a lease beyond a year's duration, 49. The factors in the problem being mainly the cost of the improvements, the value of the subject let, and the contemplated endurance of the lease, 50. Table of improvements, etc., establishing rei interventus, 50-1 ; not so, 51 ; other prestations, 51. In questions of acquiescence : — L. altered after being concluded, 76, 78 ; abatement or reduction of rent, 79, 81. Inversion of use by tenant, 81. Exclusion of assignees and sub- tenants departed from, 82 ; so also abandonment by tenant, 82, or passing from forfeiture, 82, or right to a removing, 82-3. Miscropping, 83-5 ; penalty and pactional rent, 84-5. Tenant's acquiescence in short quantity, 85 ; in the results of flooding, 86 ; in damage by game and rabbits, 86 ; in lack of heather-burning, 86 ; in lack of repair, 86. Trustee adopting lease, with consent of beneficiaries, 108, by intromission beyond winding up the lease, 109-10. Homologation of I. : — Void and voidable, 196 ; in the latter (the common) case, power to elect, whether to take advantage of the irritancy, 196, the elector being usually the ^landlord, 197. Waiving a forfeiture is equivalent to election not to avoid, 197. This is not proved by allowing the tenant's bankruptcy trustee to possess for » time, 198, or by a reference to arbitration, 198. Mora in electing, 198 ; snatching a forfeiture, 198 ; legal and conventional irritancies purgeable at the bar or not, 198 ; jus tertii in other than landlord to elect, 198. Exclusion of assignees and subtenants, 198 ; in regard to tenant's succession, 199 ; conditional waiver, 199. Writ or oath, 199 ; quitting the premises ; getting a substitute ; possessing on a new bargain inconsistent with the old, 199 ; receipt of rent, 199 ; delay in proceeding for a removing, 199. Knowledge of the blot, 200. Repeated breaches, 200. Recognition of assignee or subtenant, 200. Mora as to tenant's succession, 135. Disclaimer of lessor, 12-22 ; expiry of lessor's title, pleadable by his lessee, 13-15, 17, or even by a precarious possessor, 14. Disclaimer applicable to leases of any duration, by or to any sort of person, 15 ; attornment, 16 ; payment of rent, 16. L., taken by partner, homologated, 176. Legal, the, 12 ; I. rights, 147 seqq. ; I. rights, and mora, 131-2 ; I. irritancy of lease, 198. ' Lending name,' in partnership, 243, 247. Lessor and lessee, see Lease. Lien, of sellers, under the Factors Acts, 242. liferenter, quA lessor, 17 ; ^. and fiar, 104 : I. and fiar, in regard to acquiescence, 62.. light, acquiescence in regard to servitude of, 65. Limited partnership, 243. DEX 313 Line of street, building restrictions as to, 72. Litis contestatio, 111, 192 ; acquiesced in, 93. live stock insured, 278. Locality of teind, 104. Locus poSnitentioe, 29, 33 ; option to resile, 33. Lord Tenterden's Act, as to guarantee, 43. Loss of evidence, a result of mora, 118-9. Lying by, 1, 38, 63, 124 ; to await result of litigation, 93, 96, 97. Mala fides, not of the essence of personal bar, 1, 5, 10. Manager, remuneration of, for extra work, 113. Mandate, given to draw dividends, infers membership of a company, 95. Marital wrongs, and mora, 138-9. Marriage, as rei interventus, 38, 46. Master and servant, and rei interventus, 34 ; m. of ship, his knowledge imputable to owner, 165; pledging owner's credit abroad, 165; ordering commodities, 167. Means of knowledge, 178, 248, and see Imputed Knowledge. Measure of damages, 241 ; against sohcitor acting without authority, 175 ; in regard to transfer of shares, 189. Meeting : attending m. of creditors, as accession to trust-deed, 90 ; m. of company irregularly called or conducted, 94. Membership of company proved by conduct, 94. Memorandum of Association, and ultra vires, 180. Mercantile agent, 231. ^ Mercantile Law Amendment (Scotland) Act 1856, as to caution, 43. Messenger, and warranty of authority, 173. Middleman or agent ? 224. Mill changing its character, 81. Minor as shareholder, 95 ; m., proof of his acquiescence, 62. Minority afiecting capacity to homologate, 162. Miscropping passed from, 83-5. Misplaced confidence, in signing, 264. Misrepresentation, 3, 4 seq. ; by party pleading bar, 6. Mora, 54, 117-139. Has no legal result, unless it be breach of an undertaking to be prompt, i.e. delay, 117, or extends to prescription or time immemorial, 117. Acqui- escence must be added, so as to extinguish obhgations, 117. No one entitled to 'keep a rod in pickle' for an unconscionable time, 117. Vigilantibus non dormientibus jura subveniunt, applied in absence of knowledge of the truth on the part of one reljdng on the contract in cases of old discharges of habihty to pay calls on surrender of aU assets — the ground being loss of evidence and documents after twenty- two years, 118-9 ; at least such a lapse of time ought to influence largely the view of other evidence, 119-120 ; and com- promise is not easUy annulled, 120. English dicta as to mora and acquiescence, encouragement, and laches, 120 ; in breach of trust, 120 ; in company compromises, 120, 123 ; looking to the knowledge of the shareholders, actual or imputed, 121 ; law agent's slip, 125. Soots dicta, 121, on taciturnity, per L. Glenlee, 121-2, distinguishing between written contracts requiring reduction and others, 122 ; per L. Deas, especially in questions intra familiam. Case of personal injury, 123 ; lying-by generally, 124. Reduction of decree in absence, 125 ; dropped suit, 126 ; m. only operative if conduct can only be accounted for by the supposition that the claim has been abandoned, 126. Imputed knowledge, 126. Attempt to confine m. to oases intra familiam and inter rusUcos, 126-7. Interpreting an ambiguous document, 127. M. not a nomen juris ; not a new kind of prescription, 127. M. may be held to eUminate the element of actual knowledge of the existence of the claim averred, 128. 314 INDEX Mora — continued. T. Constituted claims : — M. not effective though the prescription on a bond had only a day to run, 128 ; and where written acknowledgment of a loan was thirty-four years old and between relatives, 128-9 (as to interest due, 129) ; other oases of bonds, 129, of decrees, 129, and awards, 130. As to statutory relations, 130, e.g. exercise of compulsory powers, 130, and relief from taxes, 130. Heritable title, 130. Caution, if there be no ' giving time ' and septennial prescription does not apply, 131. II. Unconstituted Claims : — ■ Approbate and reprobate ; Election ; Homologation ; the element therein of time, 131. Legal rights and testamentary provisions, 131-2. In questions intra familiam, especially inter rusticos, in an accounting as to an executry, 132 ; partnership, 132, 136 ; husband and wife, 132-3. In trust accounting, after distribution of the estate, to the knowledge of the claimant, 133. In banlcruptcy, trustee called to account, 134, as to onerosity of alienations, 134. Auetor in rem suam, 134, 137. Sale through white-bonnet, 134 ; compromise (which is not easily upset), 135. In succession to a tenant, 135. , Law agent, accounting, 136 ; taxation, 137 ; liability for a conveyancing blunder, 137 ; interest due, 137. Other agents, 137. M. and prescription, 138 ; heritable title ; res merce facultatis ; status ; jus sanguinis^ charity regulations for the future ; perpetuation of breach of trust ; exercise of discretion by trustees, 138. Wrongs, e.g. defamation, encroachment, seduction, 138 ; marital (im- potency, adultery, etc.), 138-9, 152. Offences, 139. Pauper settlement, 139. Implied discharge, 139, error calculi, etc.; 139. M., in choosing between legal and testamentary rights, 148 ; m., in impugn- ing acts of guardians, 156-7 ; m., in objecting to change in buildings or in the use thereof, 73, 75 ; m.,in regard to claim for remuneration for extra work, 113 ; m., in regard to objection to drawing or negotiation of bill, 114 ; m., in regard to stream alterations, 63 ; m., in regard to vindicating or repudiat- ing shares in a company, 96 ; m., in taking up contract of sale, 110 ; m., in what cases fatal, e.g. in exposing fraud, 90. Mortgage of land, classed with ex facie absolute disposition, 18. Multiplepoinding, 18, 27. Mutuality of obligation, in building schemes, 69. Name, use of deceased partner's, 249. Nationality, in marine insurance, 270. Necessaries, ordered through servants, by wives, by children not forisfamiliated, 167. Negligence, 2, 3. Negligence, Bae ob Estoppel by : — Being undutifulness which is not wilful, and leads to a change in the position of someone towards whom the duty is owed, 250. Use of words ' gross or wilful negligence,' ' wilful and unjustifiable neglect,' deprecated, 250. Rule, that whenever one of two innocent persons must suffer by the acts of a third, he who has enabled such third person to occasion the loss must sustain it, 25, is too widely worded and must be confined to some act, conduct, or default in the very transaction in question and a proximate cause of the loss, 251, and also to cases where there is a duty towards the loser or (in some oases) to the public, 251. Real cause, 251. Direct and immediate cause, 251. Negligent custody of seal, 252 ; theft by broker, 252 ; forgery, 252 ; tampering, 253 ; non-examination of bank pass-book, 253 ; drawer not locked, 253 ; drunken feUow-trustee, 253 ; non-advertence to ceasing of dividend warrants, 253 ; letter of credit, 253 ; irregularity from course of business, 253 ; two bills of exchange or of lading or two delivery orders, 254 ; silence when share transfers INDEX 315 Negligence, Bar or Estoppel by — continued. were notified, 254 ; possession of title deeds by co-trustee, 254 ; delay in registering a will, 254 ; key of safe, 254. Requisite of duty owed, 254 ; Young v. Orote, 254 ; customer's duty to his banker, 254 ; Macmillan's case, 255 ; both cases explicable on the ground of estoppel, 256 ; tampering with cheques by employees, 256 ; orders of a corporation, 256 ; delivery orders, 256, 257 ; bill torn in two. 258 ; forged cheques, 258 ; personation, 258. No duty of care in drawing or accepting bill or note where the question is between drawer or acceptor and possible future indorsees, 259 ; no duty to prevent a crime which one has no reason to anticipate, 259. Bearer securities, 259 ; their currency ascribable to custom of merchants or estoppel by reason of possession of the indicia of ownership, or negligence in custody, 260 ; key of safe, 260. Possession of mercantile paper by brokers, 260 ; known or not known not to be their own property, 261. Negotiable and other instruments, 262 ; peculiarly open to bar or estoppel, 262 ; blank transfers of shares signed and delivered, 262, in hands of a bond fide onerous transferee, 262. Essential error (non est factum) : — Error as to the corpus of a document signed, 263 ; blind, illiterate, and other persons as well, 263 ; hand and mind not having gone together, 263 ; not merely a misapprehension, 263. But the plea is barred by negligence or misplaced confidence, 264, in a question with a bond fide onerous third party, 263 ; negotiable instrument or solemn deed, 263 ; error as to legal eifect of the writing, 264. Negotiable instrument, a share certificate is not, 185-6 ; n. instruments, careless use of, 262 ; n. instruments, passing title, 227. Negotiorum gestio, 160, 167. Neighbourhood, 54 ; n., change in the character of, 75. Nemo sihi causam possessionis mutare potest, 10. New partner, 177. Nomen juris, mora is not a, 127. Non-disclosure, see Concealment ; n. in insurance, 268. Non est factum, 263. ^ Non-repugnantia, 54. See Acquiescence. Normal modes of proof, 29. Note, promissory, see Bill; n., promissory, though forged, yet adopted or accredited, 209. Notice, see Knowledge : Imputed Knowledge ; n. to treat, 56. Notorious facts, in marine insurance, 268, 273. Novation, 248 ; n., in partnership, 178 ; n. of lease, 20, the new lease being void or voidable, 20-21. €ee also Delegation. Nuisance, and acquiescence, 61, 64-8 ; increase of, 66 ; abatement of, 68 ; antici- pated n., 68. Oath, 199 ; o. on reference, 30, 31, 33, 36 ; u. on reference, establishing alteration of a contract, 78, 80 ; o. on reference, as to lease, 49. ObUgee, in questions of rei interventus, 36. Obligor, in questions of rei interventus, 36. Odious, estoppel as, 7, 253 ; not really so, 7. Offences, and mora, 139. Omission, 3. Omnia presumuntur rite et solenniter acta, 95. Onerosity, 226, 263 ; under Factors Acts, 231. Opinion, expressed, in marine insurance, 270, 274. Opposite houses, building restrictions as to, 71. Oral lease, 31 ; o. sale of land, 33 ; o. promise, in regard to rei interventus, 40, 42. Ostensible (apparent) authority of agent, 217. 316 INDEX Overdue ship, 269. Over-insurance, gross, 271. Oversman, 194. Pactional rent, 84-5. Paramount title, 17, 23, 24. Parole evidence, followed by rei interventus or acquiescence, establishing alteration of a contract, 78, 80. Para judicis, 106. Part performance {see Eei interventus), 29-30, 32. Partial enfranchisement of building restrictions, 71-6. Partner, by estoppel, 245. Partnership, and mora, 132, 136 ; jj. as a contract of exuberant good faith, 268, 288 ; p., dissolution of, 225 ; p., intromission in, 110 ; p., proof of, by actings unequivocally referable to, 47 ; p., the double agency in, 157. Pass-book, negligent treatment of, 253. Patent, disclaimer of holder's title, 14, 22. Pauper settlement, and mora, 139. Penalties for contravention of bargain, 84-5. Performance of continuing contract, by Court's nominee, 25. Per procuration, 219, 223. Personal bar {see Estoppel), 1 ; common to Scotland and England, 1 ; described in Scots cases, 7 ; to disclaimer of title, 10. Personal exception {see Personal Bar), 1. Personation, 171, 258. Pledge, by partner, homologated, 176 ; p., under the Factors Acts, 231 seq. ; of docu- ments of title, 235 ; by buyers and sellers, 240. Poinding of the ground, 92. Policy, not negotiable, 272. Positive prescription, in relation to disclaimer of title, 10. Possession, ascribable to any title held, 10, except in a question with the possessor's author, 10 ; p. by tenant, when and when not sufficient to clinch his lease, 49 ; p. by tenant's bankruptcy trustee, 198; p., significance thereof, in questions as to moveable property, 225 ; in Factors Acts, 230. Possessor3?"remedies, 10, 19. Preclude, a neutral word for bar and estop, 1. Preparatory actings, not rei interventus, 33, 36, 40. Preposiiura, 220. Prescription, 117, and mora, 122, 127-8, 131, 138 ; p. barred by acquiescence, 106, 117 ; p., positive, 10-12. Principal and agent, 104-5 ; p. fixed with membership of a company by his agent's act, 95. Prior policy or application need not be disclosed in marine insurance, 273 ; but should be in other insurances, 278. Privies, 8, 15 ; in homologation, 146. Probative writ, 30, 33, 36 ; p. w., altering contract, 78-80 ; p. w. in lease, 49. Promise, in a question of bar, 3. Promissory note, see Bill. Promoter, 160 ; warranting his authority, 172 ; as shareholder, 94. Proof, and constitution, of contract distinguished, 31. Proposal, in insurance, 275. Prorogation of arbitration, 194 ; p. of jurisdiction, 93, 106. Prospectus, concealment in, 288 ; p., fraud in, should be exposed without delay, 90. Prout de jure, proof, 29. Proximate cause of loss, 251. Proxy, 103 ; giving p., as accession to trust-deed for creditors, 91. PubUo rights, set up by acquiescence, 65. Purchase of bankrupt's goods, as accession to trust-deed for creditors, 91. Purgation of irritancy of lease, 198. INDEX 317 Quadriennium utile, 62. Quia timet, 68. Quiescence, inferring assent, 59-60. Rabbits, damage from, acquiesced in, 86. Ratification, 1, 140 (see Homologation) ; r., by wives, judicially, 152. Ratify and adopt, sometimes used as synonymous, 108. Ratihabition, 140. See Homologation. Real cause of loss, 251 ; r. right to lease, 20. Eebus ipsis etfactis, alteration of contract possibly proveable, 80 ; in proof of acqui- escence, 64. Recal of sequestration, 91. Recompense for meliorations, 56. Reduction of rent, how proveable, 79, 81. Reference, ancillary, and submission, 193. Register of company, entry in, 186-8, 192. Reinsurance, 189, 272, 274 ; r. of life, 273. Bei intervbntvs, 1, 55, 80. See also Part Performance. Specific performance or implement in England and Scotland, 28 ; English separation of common law and equity, 28, not known in Scotland, 28. The operation of the two systems similar, 28. Modes of proof of contract in Scotland, 29 ; prescribed by special statute ; at large ; set up by common law normally, 29, eked out by informal modes clinched by conduct, 29, which is called rei interventus, 29. Definition of R. i. ; barring locus pcenitentice, 29-33 ; requisites thereof, 29, 36. The Enghsh parallel is the Statute of Frauds, s. 4, and Part Perform- ance, 29-30, as to certain innominate obligations, Suretyship (caution), real property contracts (heritable), and agreement extending beyond a year, 30 ; by signed writing, 30. In Scotland, probative writ, or oath on reference, 30, 33, 36, r. i. being, for example, part payment of purchase money, 30. Interaction of oath or informal writ and r. i. which is a good answer to the objection of improbativeness, 30-1 ; oath on reference, 31 ; in writing (called a verbal bargain), which helps to prove but does not constitute the contract, 31, r. i. being matter of replication, not a ground of action, 32. In England, parol contracts prevented from being repudiated by part performance, 32. R. i. not available where there has been no consensus in idem placitum, 33, nor where agreement is illegal, 33, nor where is an option to resile, 33, nor where actings were preparatory only, 33. (In such cases damages are refused, 33.) This is to prevent both forgery and surprise, 34. In sale, 33-4 ; in contract of service, 34 ; in promise to indorse, 34. Expression of intention not enough, unless it amounts to an obligation, 34. Later formal writ contemplated or not, 34-5 ; rule that the preliminary writs embodied mere deliberation, 34. Specific averment of r. i. required, 35 in nudis finihus, 35 ; compromise, 35. Writs available to found r. i., 35 ill-executed, 35 ; lack of signer's authority ; articles of roup ; advertisements drafts ; copies , 35 ; estate books ; communications to public authority, 36. Oath on reference, 36 ; judicial admission, 36. Requisites of r. i., 36 seq. 1. Proceedings not unimportant : — Therefore not mere receipt of earnest and help to buyer to raise money for the price, 36 ; nor actings referable only to a contemplated formal writ later reduced, 36, e.g. giving up a business outwith other parties' knowledge, 37 ; engagement of a manager, 37 ; trivial expenditure, 37 ; provision of ' fencible men,' 37. 2. Proceedings on the part of the obligee :-^ I.e. of him who desires to have the contract specifically performed, 36 ;. thus differing from other cases of personal bar, 36 ; e.g. cash credit bond informally executed, credit given on it is homologation, 37 ; so also- renewal of public-house licence, 38 {and see 36, note). Co-operation of both parties, 38 ; marriage after informal marriage contract, 38. 318 INDEX Bei interventus — -eontimied. 3. Proceedings hnoion to and permitted by the obligor : — His ' standing-by ' or ' lying-by,' 38, even encouraging the other to act or abstain, 38. His knowledge. of this, 38, or that of his agent qualified ad hoc, 38, 40, which is imputed to him, 38. Guarantee or caution, 38 ; bond fide purchaser without notice, 39 ; contra, if with notice, though it be only know- ledge, not merely suspicion, that should have put him on his inquiry, 39 ; knowledge may be implied from circumstances, 40. 4. Proceedings on the faith of the cpntract as if it were perfect : — Contract precedes the actings or abstentions, these not being merely pre- paratory to an anticipated agreement, 40 ; oral promise to make will or bequest, followed by expenditure, does not prove an obUgation, 40, 42. Where a tenant is already in possession, 40 ; disburdening leasehold, 40 ; conveyancing preliminaries, 41 ; appropriating money to pay price, 42 ; but secus if the preparatory stage be passed, 41. 5. Proceedings unequivocally referable to the agreement : — Things done only referable to lease being converted into a feu, 41-2 ; or done by an improving tenant for years, 42. Distinction between a tenant continuing in possession and a new tenant, 42 ; in case of servant gratuitously acting in hope of legacy, 42. Illustrated from caution : proof of it at common law, 43-5, and under the Mercantile Law Amendment (Scotland) Act 1856 (in writing subscribed by cautioner or his agent), 43. EngUsh analogue — Statute of Frauds and Lord Tenterden's Act, 43. In re mercatorid, 44 ; formal writ and as alternative informal writ with r. i., 44 ; whether latter now required ? 44. Cases illus- trative of the affirmative, 45. R. i. by positive action, 45, or by abstention, e.g. from doing diligence, 45-6 ; oral guarantee, 46. Illustrated from marriage : English and Scots law, 46 ; from sale and feu, 47 ; from partnership, 47 ; from contract of service, 47. 6. Proceedings productive of alteration of circumstances, loss, or inconvenience though not irretrievable : — Alteration in position of the obligee, 48, with or without detriment to the obhgor, 48 ; abstention, 48. Illustrated from sale, 48 ; r. i. held established or not, 52 ; arles or earnest, 48-9 ; restitutio in integrum, 48. Illustrated from lease, 49 ; leases for year or less, 49 ; arles or earnest, 49 ; probative writ, 49 ; informal writ, or oath, or judicial admission, each accompanied by r. i., 49 ; possession, 49 ; payment of rent, 49 (possession, in acceptance of formal writ of the other party, 49, or i£ the only alternative be tacit relocation, 49) ; the payments of possession being ascribable possibly to leases of any duration, 49. Expenditure the usual clinching of lease beyond a year's duration, 49 ; the factors in the problem being mainly cost of improvements, the value of subject let, and the contemplated endurance of the lease, 50. Table of improvements, etc., estabhshing r. i., 50-1 ; not so, 51 ; other prestations, 51. ' Not irretrievable,' 52. To distinguish from that r. i. which is itself proof of impUed consent, 52, 54 seqq. B. i., cUnching an alteration in a contract, 78, 80 ; r. i., its two emphases, (a) as chnching a contract, and (6) as inferring a contract, 52, 54 seqq. ; r. i. showing acquiescence, 78. Relief from assessments, whether affected by mora, 130 ; r. of a guarantee, 44. Remainder man, knowledge of, 40. Removing, 12 ; founded on infeftment, 19 ; r. of tenant, passed from, 82-3. Remuneration for extra work, 112-3. Renewal of lease, 83. Rent, pactional or additional, 84-5 ; r., payment of, as acknowledgment of payee as landlord, 16 ; after notice of claim to land adverse to the latter ? 16 ; so also allowing sequestration for rent (distraint) to pass, 16 ; r.. receipt of, is evidence of waiver of forfeiture of lease, 200 ; r., reduction or abatement of, how prove- able, 79, 81 ; r., retention of, 197. INDEX 31 9 Repair, lack of, acquiesced in, 86, in farm- buildings, fences, dwellings, stairs, floors, drains, 87 ; r. of premises let, 200 ; of unseaworthy ship, 203. Representation by conduct, 54. Representatives, see Privies. Reputed ownership, 225. Res inter alios acta, 177. lies judicata, 6, 9. Res mercE facultatis, 82, 138. Resistance, means of, as a requisite of acquiescence, 62. Restitutio in integrum, possible, in regard to rei interventus, 48. Resumption of land let, 85. Retention of rent, 197. Retired partner, 247. Retroaction of homologation, 169, 179. Road, 68 ; r., acquiescence in obstruction or deviation of, 65. Roman law, as to disclaimer of title, 10. Roof, building restrictions as to, 72. Roup, articles of, 35 ; not affecting subsequent deed, 77. Safe, careless use of, 260. Sale: — 8. and rei interventus, 30-1, 32, 33 ; if of land and oral, 33, damages then not open, 33 ; receipt of earnest and incurring legal expenses, 34 ; to bond fide purchaser without notice, 39. Preparatory acts, 41. Acts unequivocally referable to a sale, 47. Aries or earnest, 48. Entry on possession, if bargain already made, not preparatory thereto, 48. S. of business acquiesced in, 90, 144. 8. by auction, 101. 8. contrary to the rule of auctor in rem suam, 134. 8. of legal rights, 147 seq. 8. by minor, 155. 8. to agent, 158. 8. by master in foreign part, 165, 167. 8. under -prepositura, 167. 8. of one partner's share to another, 178. 8. by agent, 226. 8. as affected by the Factors Act, 228 seq. 8. of warehoused goods, 247. 8., fraudulent, should be exposed at once, 90 ; s. of shares, see Company ; s. or return, 227, 241 ; s., or security ? 226 ; s. under the Factors Acts, 231 seq. Salmon fishing, in regard to acquiescence, 61, 64 ; obstruction to, 61 ; lease and feu of, 11. School, not a dwelling-house, 74. Seal, deed under, 30, 33 ; s., negligent custody of, 252. Secretary of company, 189. Security, or sale ? 226. Seduction, and mora, 138. Sellers, in possession, under the Factors Acts, 238-240. Septennial prescription, 107. Sequestration for rent, allowance of, is acknowledgment by tenant of landlord's title, 16. Servant, grievances of, passed from, 87-8 ; s., held out as agent, 220 ; s., not a mercantile agent, 232 ; s., ordering necessaries, 167 ; public s. and warranty of authority, 173. Service, contract of, actings uneqiiivocally referable to, 47 ; s. given in hope or on promise of legacy, 42. Servitude, 55, 58, 61-5, 71 ; s. proved by acquiescence, 45. Sewerage system, change in, 67. Share certificate, 184. Shares, forfeiture of, 96-8 ; surrender of, 98 ; s., fraud in transfer of, should be exposed without delay, 90 ; s., transferred blank, 226. SheiUing, title to, 11. Ship's husband ordering commodities, 167. Shop, dwellings changed into, 75, and vice versa, 81 ; «., prohibited in building estate, 75. Short delivery, passed from, 85. Shortage of extent, ignored, 102. 320 INDEX Signature of document by officer of Court in place of recalcitrant party, 29. Silence, 58, 211 (see Mora) ; s. as acquiescence, 148 ; s. distinguished from suppres- sion of fact, 213 ; «. in regard to forged bill or note, 209-10 ; s. on notification of shares sold, 213, 254, or of matter with which the recipient has no concern, 213. Simony, 15. Singular successor, how affected by author's acquiescence, 62. Solenniter acta, 184 ; presumed concerning domestic management of company, 181, 183, 189. Solicitor, using name of another solicitor, 165 ; acting for two clients, 166 ; warrant- ing his authority, 173 seq. Special agency, 167. Specific implement, see Ret interventus ; s. performance, see Rei interventus. Speculation by a partner, homologated, 176. ' Squatter, 82. Stair, disrepair of, acquiesced in, 87. Standing by, 1, 2, 38, 59, 63, 65, 73, 93. Status, and mora, 138. < Statute, and mora, 130; s., cannot be barred operation, 6; S. oi Frauds, as to guarantee, 43 ; 8: of Frauds, as to certain innominate obligations, surety- ship, real property contracts, and agreements extending beyond a year, 29-30. Step of procedure, in arbitration, 194. Stockbroker, employed by trustees, 164. Stoppage in transitu, 24 ; in regard to homologation, 163 ; under the Factors Acts, 242. Stream, interference with, 63-4, 66-8 ; pollution of, 67 ; s., operations in, acquiesced in, .57, 58, 59, 61. Street, line of, 72. Sub-dispositions under the Factors Acts, 235. Sub-lessee and lessee, acquiescence in expenditure, 60. Submission, and ancillary reference, 193 ; ill-executed «., 194. Subrogation, 221, 281. Sub-sale and pledge under the Factors Acts, 235. Subtenancy, exclusion of, in lease, passed from, 82. Subtenant, disclaiming tenant's title, 13 ; tenant sought to be turned into. 14. Succession of tenant, objection waived in regard to, 199. Superior, in reference to building restrictions, 69, 71. Surrender of lease, 19 ; by operation of law, 19 ; s. of shares, 98. Surveyor, remuneration of, for extra work, 112. Suspicion contrasted with knowledge actual or imputed, 39 ; «. in fidelity guarantee, 283, 287. Tacit relocation, 15 : t. r., with possession, as clinching an informal lease, 49. Taciturnity, 1, 121, 134/ See Mora. Tampering by employee, 253, 256. Taxation of law agent's account, 137. Teinds, heritable right, and lease of, 11, 13 ; locah'ty, 104. Telegraph, and warranty of authority, 173. Temperate habits, in insurance, 277. Tenant and landlord, see Lease ; ' tenant right,' 56 ; t., succession to, mora in respect to, 135. Testamentary provisions, 147 seqq. ; t. p., and mora, 131-2. Theft by broker, 252. Thirlage, acquiescence in regard to, 64. Time immemorial, 117 ; t., reasonable, in marine insurance, 204. Title, disclaimer of, 10 seqq. ; t, paramount, 17 ; t. to heritage, not obtained by acquiescence, 55. Title-deeds, in possession of co-trustee, 254. INDEX 321 Torts, and mora, 138. Trade, prohibited in building estate, 76. Transfer of shares, fraud in, should be exposed without delay, 90 ; i. of shares, in blank, 262. Transferee of shares as shareholder, 95. Traveller, not a mercantile agent under the Factors Acts, 232. Treatises on Estoppel, 8. Triennial prescription, 106 ; i. p. of wages, 112. Trust, and equitable mortgage, 189 ; t., and mora, 133. Trust-deed for creditors, accession to, 90. Trustee, adopting a continuing contract, 108 ; t., in bankruptcy, and mora, 134 ; t., employing stockbrokers, 164 ; i., his acceptance of office, 107, by intromissions, 107 ; t., in banJtruptcy, competing for the office of, as proof of accession to a trust-deed, 91 ; similarly, voting for, 91 ; t, in bankruptcy possessing on tenant's lease, 198. Two innocent persons, of whom one must suffer from the act of a third person, 215, 251. Uberrima fides, 266. Ultra vires, 94 ; ultra vires, actings void and voidable, of company or corporation, 179 seq ; ultra vires acts, as homologating, 162. Umpire, 194. Unambiguous statement as bar, 6. Underwriter of shares, 94. Undutifulness, which covers negligence, 250. ' Unequivocally referable,' term used in regard to rei intervenhis, 41. Unfulfilled contract performed at sight of the Court, 29. Unico contextu bargain, not affecting concluded writ, 77. Unseaworthiness, 273. Usage as to accrediting agent, 223 ; ii. of trade, 89. Usucapio, 10. Valuable consideration, 3. Value of subject let, compared with expenditure on it, as rei intervenius on a lease for years, 50. Vendor's lien under the Factors Acts, 242. Verax and verum, in insurance, 275. 'Verbal' contract, as used in regard to important obligations, 31 ; v. lease, 31. 40 ; V. promise, and rei interventus, 34. Vigilantibiis, non dormientihus, jura suhveniunt, 118, 144. Void, in regard to lease, 196. Voidable, in regard to lease, 196. Volenti non fit injuria, 87. Vote, as shareholder, 94. Wadset, 12. Wages, whether due, 111-2 ; for ordinary work, 111 ; for extra work, 112. Waiver, 1 ; w. of forfeiture of lease, 82, 197 ; of restrictions in use of property, 74 ; of exclusion of assignees in lease, 82 ; of objection to abandonment of subject let, 82 ; of strict warning, 82. Warehouse-keeper's certificate, 231. Warehouseman, 24 ; w., as to disclaimer of employer's title, 24 ; neutral or owner's custody, 25 ; w., in regard to Factors Acts, 232 ; w., passing title, 227. Warning, 82, 83, 200 ; w. to tenant, in respect to homologation, 163, 169. Warranty, none in transfer of shares, 185-6 ; w. of his authority, by agent, 170 seq. Wharfinger, as to disclaiming employer's title, 24. White-bonnet, 134. 21 322 INDEX Wife, her preposihtra, 220 ; w., ordering necessaries, 167. Wilfully, explained, 2. Wilful negHgenoe (so-called), 250. Will, delay in registering, 254. Withdrawal of authority, under the Factors Acts, 235. Witnesses, examined in arbitration, 193, 194 ; taking a side (architect-arbiter), 195-6 ; as homologating, 144. Wrongs (torts), and mora, 138. PRINTED IN GREAT BRITAIN BY NEILL AND CO., LTD., EDINBURGH. K!S^Jpt*n' SKKS?.'