66

THE RATIO DECIDENDI NOT CLEAR.

proceeds to comment on it, and observes that the judgments show much confusion.

Now on one point all the four judges in Young v. Grote were agreed-Young had been negligent, and Grote had not.

It is true that Best, C.J., and Park, J., think the negligence consisted in Young's leaving blank cheques with his wife, who was ignorant of business.

It appears to us a better view that the negligence for which he had to suffer was that of his wife, who as his agent sanctioned the cheque drawn by Worcester with spaces for alteration. And Park, J., also decides upon the ground that the cheque left by Young to be filled up by his wife, "when filled up by her, became his genuine orders" (p. 260); and this reason is described by Halsbury, L.C., 1896, A. C. at p. 523, as "the perfectly sound view upon which he decides in the defendant's favour."

And Lords Watson and Macnaghten also think the decision supportable on the ground that the delivery of a blank cheque gives an implied authority to a holder to fill it up for any amount, and they cite Parke, B., in Robarts v. Tucker, 16 Q. B. 560, who, in commenting on Young v. Grote, said: "The customer had, by signing a blank cheque, given authority to the person in whose hands it was, to fill up the cheque in whatever way the blank permitted."

OBSERVATIONS ON YOUNG v. GROTE.

67

But the cheque when fraudulently altered was not a blank cheque. It was a genuine order for 50l. 28. 3d. We cannot understand the view of Park, J., and Halsbury, L.C., that the cheque could be regarded as a "genuine order" for the larger sum to which Worcester afterwards altered it.

Nor can we understand the same view, as expressed by Parke, B., and Lords Watson and Macnaghten, that the decision turned upon the implied authority of a holder to fill up a blank cheque.

Willis, in his lectures (c) on negotiable instruments, expresses his opinion that the decision cannot be so regarded, inasmuch as the case was not one of filling up a blank cheque. In point of law, the case was as if Young, or Mrs. Young, as his agent, had written out the cheque for 50l. 28. 3d., in the careless way in which it was written, and had then given it to Worcester.

The negligence which led to the loss was that of Mrs. Young in sanctioning the cheque as drawn by Worcester, and Young would have been no less liable for her negligence as his agent, even had he been able to show that she was ordinarily a most accomplished woman of business. It appears to us, therefore, that the observations of Best, C.J., and of Park, J., as to the negligence consisting in (c) Lecture vi.

68

YOUNG V. GROTE FOLLOWED.

leaving the cheque "with a female" are rightly condemned by Halsbury, L.C., as irrelevant.

It is also clear, as pointed out by Cockburn, C.J., that the case was "decided without reference to estoppel." It appears to us unnecessary to rely on that technical doctrine as the ratio decidendi.

The true ground appears to be that, rightly or wrongly, negligence was found as a fact against Young, and was expressly negatived as against Grote.

In Swan v. North British Australasian Co., 2 H. & C. 175, the decision in Young v. Grote is freely commented upon, and Cockburn, C.J., explains that the decision may have been with the object to prevent circuity of action. Young could sue Grote for wrongfully paying the enlarged amount, and Grote could sue Young for the loss sustained by the latter's negligence.

In Halifax Union v. Wheelwright, 32 L. T. 802, it was held that a bank manager who acted as treasurer to the plaintiff corporation, and who had paid drafts drawn on him and fraudulently altered by a person in the employ of the corporation, could defend such payments on the ground that the carelessness of the corporation in signing the drafts, drawn so as to be easily capable of alteration by the person who wrote out the drafts, had led to the drafts being paid.

THE TRUE RATIO DECIDENDI.

69

The defendant had also paid some drafts with forged indorsements, and it was held that he was not a banker within s. 19 of 16 & 17 Vict. c. 59, to which s. 60 of the present Act corresponds. However, in the peculiar circumstances of the case, he was held not liable for the amount of such payments, as the only receipt by him was the receipt of the bank of which he was manager, and where the plaintiffs practically had the account in respect of which he was treasurer, and the bank being discharged under s. 19, he could not be made liable.

The principle upon which, as we think, Young v. Grote rests, that "a man cannot complain of the consequences of his own default against a person who was misled by that default without any fault of his own," was approved in the judgment of Cleasby, B., in the Court of Exchequer; and in Orr v. Union Bank of Scotland, 1 Macq. 519, Lord Cranworth, in commenting on Young v. Grote, said (at p. 523): "The decision went on the ground that it was by the fault of the customer the bank had been deceived. Whether the conclusion in point of fact was in that case well warranted is not important to consider. The principle is a sound one, that where a customer's neglect of due caution has caused his bankers to make a payment on a forged order, he shall not set up against them the

70

NEGLIGENCE A QUESTION OF FACT.

invalidity of a document which he has induced them to act upon as genuine.”

In Scholfield v. Londesborough there was some conflict of opinion as to whether the respondent had been negligent. Lopes, L.J., in the Court of Appeal thought he had.

Charles, J., who tried the case at first instance, found on the facts that he had not been negligent. But both were agreed as to the general duty of an acceptor of a bill "not to be negligent with regard to the form of the instrument," contrary to the opinion of Esher, M.R., and Rigby, L.J.

The House of Lords inclined to the view that he had not been negligent. Halsbury, L.C., at p. 522, said: "I entirely concur that it was wrong to contend that it is negligence to sign a negotiable instrument so that somebody else can tamper with it." Lord Watson (at pp. 541, 542) expressed a similar view.

But whether or not such a duty rests upon a party to a bill, it is not denied that it rests upon the drawer of a cheque, and it is a question of fact in each case if he has neglected it.

So far as the decision in Young v. Grote turned on the relation of banker and customer, the House of Lords does not expressly condemn it in Scholfield v. Londesborough. (See Lord Davey at p. 550; Lord Morris, p. 547, and Lord Shand, p. 548.)