A trustee replied to certain interrogations as to incumbrances upon the trust property. Afterwards it was sought to make the trustee liable in respect of certain incumbrances of which he had made no mention. Lindley, J., said:

"But the difficulty of affording the plaintiff relief on this ground arises from the ambiguity of the defendant's letters. They are quite consistent with the view that the incumbrances mentioned by the defendant were all he knew of or remembered. A statement, however, to that effect would not estop him from stating that there were others which he did not know of or remember. Knowledge, and means of knowledge, are very different things; and if a person truly says he only knows or remembers so and so, is it right to treat him as saying that he knows more, even if it is his duty to inform himself accurately before he speaks."1

Where the holder of a chattel mortgage, on payment of a portion of the note secured by it, surrenders the note to the maker after allowing it to be marked "paid," he is estopped as against a bona fide purchaser of the mortgaged property, who purchases in reliance on the evidence of payment shown by the note in the mortgagor's hands, to claim that there is a balance due on the mortgage.2

But the result would be different if the note was not marked paid, but merely given up in exchange for a renewal of it.

"I would not think that any reasonable man would take possession of the note by Robinson to be equivalent to a representation by the plaintiffs that the price of the piano was paid. The practice of renewing notes is so common that the defendants, as business men, can scarcely have excluded it from their contemplation." 3

A patentee, in urging a customer to give his machine the preference over another that was offered in sale, said in substance: "Now, do give mine a trial; you will find it a very much better machine." But this was not a representation that the other machine might safely be purchased-that it was not an infringement upon the patent. The statement was not equivalent to "now, just try, and see which is the best machine, and then you may take whichever you think to be the best." It was putting forward "one strong commercial reason why he desired the defendants to purchase his machine;" but it was not a suggestion that he intended to abandon any legal rights; nor was it a representation that the other machines were no infringement upon his patent.*

Re Lewer (1876), 4 Ch. D. 101; 5 Ch. D. 61; 46 L. J. Bk. 70.

2 Finks V. Buck (1894), 27 S. W. R. 1094 (Tex.).

Mason v. Bickle (1878), 2 Ont. App. 291, 299.

4 Proctor v. Bennis (1887), 36 Ch. D. 740; 57 L. J. Ch. 11.

Where it is alleged that some person has been held out as a partner (although not really such) it is not necessary that the person said to be a partner should, in the holding out, have been identified by his christian and surname. It is enough that there should be such a description as will be tantamount to naming him. Thus, the estoppel-asserter may have known merely that there was "a gentleman down from London, a man of capital;" and if he relied upon this individual the "capital" would have to be forthcoming.1

As to the proper implication from a certificate by a company of a transfer of shares; and as to the difference between it and a certificate of ownership of shares, see cases in the note.2 Distinction where Fraud.- Lord Justice Kay has suggested an important distinction which is not elsewhere to be met with. He said: 3

"If there was fraud, and the statement was intended to mislead, its ambiguity would not be a defense; but where no fraud is alleged it is essential to show that the statement was of such a nature that it would have misled any reasonable man, and that the plaintiff was in fact misled by it."

The distinction appears to be well founded. In the first case a fraud is intended and is successful; the defrauder then urges that if his dupe had acted as a reasonable man he would not have been misled by the arts which proved to have been well adapted to his deceiving. It is a poor argument. In the second case no fraud was intended; an ambiguous phrase was honestly made use of; a different meaning from that intended was taken out of it; a reasonable man would not have taken that meaning and would not have been misled. Such a case is easily distinguishable from the other.

1 Martyn v. Gray, 14 C. B. (N. S.) 822.

2 Bishop v. Balkis (1890), 25 Q. B. D. 77, 512; 59 L. J. Ch. 535; Tompkinson v. Balkis (1891), 2 Q. B. D. 614; 60 L. J. Q. B. 558; (1893) A. C. 396; 63 L. J. Q. B. 134; Re Concession's Trust (1896), 2 Ch. 757; 65 L. J. Ch. 999.

2

3 Low v. Bouverie (1891), 3 Ch. 113; 60 L. J. Ch. 594. See analogy supplied by Bloomenthal v. Ford (1897), A. C. 156; €6 L. J. Ch. 253; Hughes v. Twisden (1886), 55 L. J. Ch. 481.

CHAPTER IV.

CONDITION NO. 2.

The misrepresentation must be made either (1) by the estoppeldenier (personal misrepresentation); or (2) by some person whose misrepresentation the estoppel-denier has made credible (assisted misrepresentation).

PERSONAL MISREPRESENTATION.

"In all cases of the kind of estoppel we are called upon now to consider, the party has, I conceive, either himself made, or authorized to be made, a statement of fact untrue, or he has conducted himself so as to give rise to the belief of a fact untrue."1

The first of these alternatives needs little enforcement. It means merely that a man is not to be damaged by a misrepresentation which he has neither made nor authorized, unless indeed he comes within the second class of cases. For example, if a man be held out as a member of a firm, he cannot be liable if he was ignorant and innocent of all that was done.

"The holding one's self out to the world as a partner imports at least the voluntary act of the party so holding himself out and is altogether incompatible with the want of knowledge that his name has been so used."

And so where the estoppel-denier's name appeared in a list of shareholders, which without his knowledge had been shown to the estoppel-asserter by the secretary of the company, and the secretary had no authority to disclose the list, it was held that there was no estoppel.

ASSISTED MISREPRESENTATION.

The second alternative of the condition confronts us with problems altogether peculiar to the law of estoppel. It will be observed that it implies, notwithstanding what has already

1 Per Channell, B., in Swan v. N. B. A. (1862), 7 H. & N. 657; 31 L. J. Ex. 425; First Nat. Bank v. Cody (1894), 93 Ga. 127; 19 S. E. R. 831.

2 No distinction is necessary for present purposes between misrepre

sentation by the estoppel-denier himself and by his agent. Qui facit per alium, facit per se.

3 Fox v. Clifton (1830), 9 L. J. C. P. 261.

4 Id.

been said, that a man may under certain circumstances be estopped, not merely by his own misrepresentations, but by the misrepresentation of another person. It implies further, as we shall see, that he may be estopped by such a misrepresentation if he has assisted it, although he has been perfectly innocent of any intention to do so, and although unaware of the misrepresentation until after the mischief has been accomplished. This class of cases the writer ventures to denominate "Assisted Misrepresentation;" for the estoppel arises from the assistance rendered by the estoppel-denier to the misrepresentation. An example will be the best introduction to the problems involved: Suppose that I execute a mortgage for £250; afterwards I pay £200 upon it; and afterwards the mortgagee, by representing that £250 is still owing, sells the mortgage for that amount. I am not estopped from asserting that there is only £50 due. I have not in any way contributed to the misrepresentation of the mortgagee. Varying the case: Suppose that the mortgage purports to secure £250 (and acknowledges the receipt of that amount); that only £100 was in reality advanced; and that, concealing this fact, the mortgagee sells the mortgage for £250. I am now estopped because of the assistance which I have given to the misrepresentation; my acknowledgment has made credible the misrepresentation of the mortgagee.1

1 Bickerton v. Walker (1885), 31 Ch. D. 151; 55 L. J. Ch. 227; and see West v. Jones (1851), 1 Sim. (N. S.) 205; Parker v. Clarke (1861), 30 Beav. 51; Webb v. Herne Bay (1870), L. R. 5 Q. B. 642; 39 L. J. Q. B. 221; Manly v. London (1896), 23 Ont. App. 139; 26 S. C. Can. 443. But see Ryckman v. Canada Life (1870), 17 Gr. 550. In the United States distinction must be made between three classes of mortgages: (1) Where the mortgage secures payment of a promissory note the law is as stated in the text, except in Illinois (Hostetter v. Alexander (1876), 22 Minn. 559), New Jersey (by statute: R. S. 1877, p. 768, § 31), Ohio, Oregon (Jones on Mortgages (5th ed.), § 834 ff.), and Kan

sas.

(2) Where the mortgage secures payment of a bond the law is said to be otherwise (Id.). But if the bond be of ambulatory sort there should be no distinction, for the principles of estoppel apply equally to both cases: First Nat. Bank v. First Nat. Bank (1880), 22 Hun, 339. (3) Where the mortgage secures payment of money only, it is said in Jones, § 841 (a), that an assignee takes subject to the mortgagee's equities; but the only case cited is Castle v. Castle, 78 Mich. 298; 44 N. W. R. 378, where the question was not whether the assignee took subject to original equities (contradicted by the instrument), but whether he was bound by subsequent

Under What Circumstances. The question, then, for solution is this: Under what circumstances shall one person be estopped by reason of assistance given to the misrepresentation of another?

The present writer, aware of its dangers, is unwilling to advance any well-defined rule; but perhaps he may be permitted to suggest a phrase which may prove to be of some service. A perusal of the cases leaves upon the mind this impression: that one man may be estopped by a misrepresentation made by another, when the former, in breach of some duty to the deceived person, has supplied the defrauder with that which was necessary to make the representation credible. If the fraud was accomplished without assistance, there can, of course, be no estoppel (of any one but the defrauder). If, although there

accountings. The reasoning in First Nat. Bank v. First Nat. Bank (1880), 22 Hun, 339 (N. Y.), strongly supports the contrary view.

• Mr. Pomeroy.criticising the United States Supreme Court case of Carpenter v. Longan (1872), 16 Wall. 271, in which it was held that the assignee of a mortgage securing a promissory note takes free from equities, says that the argument which supports it is "that the debt is the principal thing and the mortgage is the mere adjunct of the debt;" that the answer to the argument is that "the note and the mortgage do not together constitute a promissory note;" that the rule as to notes "was first adopted by the courts and has ever since been maintained solely with a view to promote the interests of merchants, and to secure the success and freedom of mercantile and commercial dealings. A promissory note accompanied by a mortgage is not in any sense a mercantile or commercial security." There are two answers to this:

(1) The underlying argument of the court is inadequately stated. It is as follows: "To let in such a defense against such a holder would

be clear departure from the agreement of the mortgagor and mortgagee, to which the assignee subsequently in good faith became a party. . . . If one of two innocent persons must suffer by a deceit, it is more consonant to reason that he who puts trust and confi. dence in the deceiver should be a loser rather than a stranger.'" This principle is that of estoppel (see post, ch. XIV) as applied to ambulatory choses in action. See ch. XXIV. It covers the case of a mortgage to secure payment of money as well as one to secure payment of a note.

(2) It is not correct to say that the rule as to the assignee of notes taking free from equities has been confined to "mercantile and commercial dealings." It has been much more widely extended, and now covers all ambulatory transactions. See ch. XXIV.

Some recent cases are State Bank v. Flathers (1892), 45 La. Ann. 78; 12 S. R. 244; Pertuit v. Damare (1898), 50 La. Ann. 893; 24 S. R. 681; Ferris v. Briscoe (1898), 78 Ill. App. 242; Jones v. Dulick (1898), 55 Pac. R. 522 (Kan.); Mack v. Prang (1899), 79 N. W. R. 770 (Wis.).