to be precluded from asserting the facts, because of his action or inaction that is, by the carelessness of which you com. plain.

-

Personal and Assisted Misrepresentation.- The only other preliminary necessary to consideration of the main question is the observation of the distinction between personal and assisted misrepresentation. I hold myself out as a partner and am estopped from denying membership in the firm that is personal misrepresentation. A mortgagee hands over the titledeeds to the mortgagor, who uses them as evidence of the truth of his (the mortgagor's) representation of unincumbered ownership, and so misleads an innocent purchaser; and the mortgagee is estopped. But not, observe, because of any misrepresentation made by him, but because merely of the assistance which he has rendered to the misrepresentation of the mortgagor he has furnished an opportunity for fraud, he has done that which has made the misrepresentation of another person credible.1

Personal Misrepresentation.-Perusal of a previous chapter2 will leave little room for doubting that it is not in cases of this class that we are to look for instances of estoppel by carelessness. The assertion is not intended that every case of personal misrepresentation is the result of evil intent, and that there are no instances in which misrepresentation is not due to carelessness rather than to dishonesty. What is meant rather is that personal misrepresentation will estop, whether it is due to one cause or the other, and that consideration of "how the representation came to be made "- whether through carelessness or intention - is therefore immaterial.

For example, a trustee of a fund, with a view to deceive, rep

1 Waldron v. Sloper (1852), 1 Dr. 193; Farrand v. Yorkshire, etc. (1888), 40 Ch. D. 182; 58 L. J. Ch. 238.

2 Ch. VIII.

* Manufacturers v. Hazard (1864), 30 N. Y. 226, may appear to contradict this statement. An indorser of a note wrote his name so badly that the initial "M.” looked like “A. C.," and he was held to be estopped by his carelessness from denying notice of default, which miscarried because of the defective autograph. It

may be said that the sender of the notice was misled by carelessness, and that the estoppel was rightly adjudged. The case would be the same if the misleading was due to carelessness in oral communication; but it is preferable to relegate such cases to the principle (ante, p. 15) that reasonableness of inference from statements or conduct justifies action according to such inference, and will carry estoppel with it.

resents that the fund is uncharged, and he is estopped from asserting otherwise. But if he had made the same representation in perfect good faith but carelessly (having for the moment forgotten), he would have been likewise estopped. Again, were there both the presence of good faith and the absence of carelessness (which might happen in some cases by the misrepresenter being himself fraudulently misled), yet even in that case there would be estoppel. The element of carelessness, therefore, is immaterial where the misrepresentation is personal.

"The man who has made the misrepresentation, under whatever circumstances, must bear the consequences of those representations, and not the man who has trusted to the representations so made." 3

Assisted Misrepresentation. It is in this class of cases then, if at all, that instances of estoppel by carelessness are to be found. But hitherto the existence of the class itself has not been sufficiently recognized, nor has it till now received a distinguishing name; and it is therefore not matter for much surprise that that of which we are in search has not been with precision disentangled, nor its true affinities observed.

As in cases of personal misrepresentation, so also in those of assisted misrepresentation, the general rule regards merely the act done, and is entirely indifferent to the motive or reason for it, or the carelessness or diligence that may be in it.

"The rule is that if a man so conducts himself, whether intentionally or not, that a reasonable person would infer that a certain state of things exists, and acts on that inference, he shall be afterwards estopped from denying it."5

For example, if a company were to issue a false certificate as to ownership of shares, upon the faith of which a third person changed his position, it would be estopped whether wrongful intent or good faith, carelessness or diligence underlay the act.6

1 Burrowes v. Lock (1805), 10 Ves. (1869), L. R. 4 H. L. 64; 39 L. J. Ch. 470. 849; and per Jessel, M. R., in Eaglesfeld v. Londonderry (1876), 4 Ch. D. 704.

2 Per Lord Selborne in Bank of England v. Vagliano (1891), A. C. 123; 68 L. J. Q. B. 145; Ellis v. Schmoeck (1829), 5 Bing. 521; 7 L. J. Q. B. 231; Collingwood v. Berkeley (1863), 15 C. B. N. S. 145; Maddick v. Marshall (1864), 16 C. B. N. S. 387; 17 id. 829.

3 Per James, L. J., in Hunter v. Walters (1871), L. R. 7 Ch. 85. And see per Lord Cairns in Reese v. Smith

4 This chapter in somewhat modified form was first published in The Law Quarterly Review, October, 1899.

5 Cornish v. Abington (1859), 4 H. & N. 556; 28 L. J. Ex. 262; West v. Jones (1851), 1 Sim. N. S. 207.

6 Re Bahia, etc. (1868), L. R. 3 Q. B.

Close inspection, however, of the category of assisted misrepresentation will discover various lines of cases in which the operation of estoppel by carelessness may be observed. Not that the principles by which most of the cases have been decided have any relation to estoppel - indeed quite other principles and rules have been invoked. Nevertheless the present writer believes that his ratio decidendi will be readily accepted, can he but clearly present it to the profession.

Acceptance unfortunately involves something of a bouleversement: to what extent it may be as well frankly at once to indicate:.

1. Although no case of estoppel by carelessness has been discovered, yet there are many classes of them; some passing at present under other designations and at least one existing in England by statute.

2. And there are others (one very notably), from which many courts have excluded all questions of carelessness; but which the present writer would leave in almost sole possession of the field.

1. Execution of Documents.- Opening the first class of cases in which estoppel by carelessness may be found, suppose that a man is tricked into executing a document which is afterwards by the knave passed on to an innocent transferee; who is to lose, and why?

The present law dividing the cases into void and voidable documents (so much fraud - amount very uncertain and the document is voidable, more fraud and the document is altogether void) declares that if the document be voidable only its creator must suffer; if it be void the loss falls on the innocent transferee. And the discussion for the most part expends itself upon distinctions between cases in which the dupe was deceived as to the actual contents of the document, and in others as to its legal effect; 2 between cases in which the deception was as to the land affected by the document, and in others as

584; 37 L. J. Q. B. 176. And see cases cited with this one, chapter XXII.

1 Kennedy v. Green (1834), 3 M. & K. 713; Vorley v. Cooke (1857), 1 Giff. 230; 27 L. J. Ch. 185; Ogilvie v. Jeaffreson (1860), 2 Giff. 353; 29 L.

J. Ch. 905; Foster v. McKinnon (1869), L. R. 4 C. P. 704; 38 L. J. C. P. 310; Hunter v. Walters (1871), L. R. 7 Ch. 82; 41 L. J. Ch. 175.

2 Vorley v. Cooke (1857), 1 Giff. 230; 27 L. J. Ch. 185; Herchmer v. Elliott (1887), 14 Ont. 714.

to the disposition made of it, and so on. The character of the dupe, whether he is "layman or lettered;"" the character of the occasion, whether it was one "in which no extraordinary caution was necessary;" and similar points are also referred to, but in order for the most part to ascertain whether the document is void or voidable.

Here and there, indeed, the applicability of estoppel is to be noted. For example, Mellish, J., in 1871 declared it to be "a doubtful question of law" whether the dupe "may not by executing it negligently be estopped;" and Erle, C. J., in a case in which blank but executed transfers of shares were improperly filled up, said that although they were originally "null and void, yet as between Swan and a purchaser they may be valid to pass the property, if not directly yet indirectly by estopping Swan from setting up his right."5

To the present writer the matter assumes the following form: No document obtained by misrepresentation (whether it be the vilest, the most complex, the most simple, or the most innocent) is binding upon the dupe; its character remains constant (it cannot change), accompanying it into whatsoever remotest hands it may come; nevertheless, as against persons who have been led by the document to change their position, the dupe ought to be estopped from denying its validity. The authorities declare that negligence on the part of the dupe is an essential part of the case against him. If so, then the estoppel occurs where carelessness exists, and we thus have an instance of estoppel by carelessness."

2. Priorities.- Another class of cases may be typified by the mortgage case already referred to: A mortgagee hands over the title-deeds to the mortgagor upon some trumped-up excuse; and the mortgagor, fraudulently using them as evidence of his assertion of unincumbered ownership of the property, conveys it to an innocent purchaser. The present writer would say that in all such cases the mortgagee ought to be estopped from setting up his title to the property. The decisions, however, distinguish between cases in which his conduct was

1 National v. Jackson (1886), 33 Ch. D. 1.

2 Thoroughgood's Case (1582), 2 Coke, 9a.

3 Ogilvie v. Jeaffreson (1860), 2 Giff. 353; 29 L. J. Ch. 905.

4 Hunter v. Walters (1871), L R. 7 Ch. 82; 41 L. J. Ch. 175.

5 Swan v. N. B. A. (1859), 7 C. B. N. S. 431; 30 L. J. C. P. 113.

6 See the subject treated at length in chapter XXV.

reasonable and those in which it was negligent.' And thus again is there estoppel by carelessness.

But the principles usually applied in such cases are not those of estoppel. The rule that "possession of the deeds gives the better equity" is that most usually invoked. Giffard, V. C., however, properly protests that mere possession of the deeds will not give priority.

"There must be some act or default on the part of the first mortgagee to have this effect."3

And Fry, L. J., has declared the law to be:

"That the court will postpone the prior legal estate to a subsequent equitable estate when the owner has assisted in or connived at the fraud which has led to the creation of a subsequent equitable estate." 4

Estoppel is at the foundation of such language: the owner of the first estate is first; but he is estopped from so saying. 3. It is no doubt the duty of every person at the peril of estoppel not to render assistance to the misrepresentation of authority to act for him which may be made by other persons. But what are we to say when a man does not intend to aid the misrepresentation, but nevertheless through carelessness does so? In a recent case it is said that

5

"ostensible authority to act as agent may be conferred if the party to be charged as principal affirmatively or intentionally or by lack of ordinary care causes or allows third persons to trust and act upon such apparent agency."

This is not couched in the language of estoppel, which would not say that" ostensible authority may be conferred;" but that, there being ostensible authority, the ostensible principal is estopped by his carelessness from denying its real existence.

4. Maryland supplies us with the suggestion of another example. We shall see that there is some substantial ground for the opinion that bank customers are under obligation to examine their pass-books at the usual monthly balancing, and

1 Evans v. Bicknell (1801), 6 Ves. 174; Waldron v. Sloper (1852), 1 Dr. 193; Clarke v. Palmer (1882), 21 Ch. D. 124; 51 L. J. Ch. 634; Newman v. Newman (1885), 28 Ch. D. 674; 54 L. J. Ch. 598.

2 Goodtitle v. Morgan (1787), 1 T. R. 762; Layard v. Maud (1867), L. R. 4 Eq. 397, 406; 36 L. J. Ch. 669; Spencer v. Clark (1878), 9 Ch. D. 142; 47 L. J. Ch. 692; Lloyd v. Jones (1885), 29 Ch. D. 229; 54 L. J. Ch. 931.

3 Thorpe v. Houldsworth (1868), L. R. 7 Eq. 147; 38 L. J. Ch. 194.

4 Northern Counties v. Whipp (1884), 26 Ch. D. 494; 53 L. J. Ch. 629. 5 Thompson v. Skelton (1896), 49 Neb. 644: 68 N. W. R. 1055. See also Holt v. Schneider (1899), 77 N. W. R. 1086 (Neb.); Lester v. Snyder (1898), 55 Pac. R. 615 (Colo.); Colo. Civil Code, § 2300; Heald v. Henley (1891), 89 Cal. 632; 27 Pac. R. 67.