for defeating any vendor's lien or right of stoppage in transitu as the transfer of a bill of lading has for defeating the right of stoppage in transitu." 1

This clause was passed because of the distinction above alluded to between a bill of lading and a delivery order. It was said that a vendor retained his lien although he had handed over a document of title (other than a bill of lading), and had thus apparently transferred the complete title. His right, it was said, remained until possession of the goods had been taken by the innocent purchaser. The idea was that the indorsement of a bill of lading passed the title to the goods, but that the transfer of other documents of title did not, and therefore the necessity for possession in order to vest the right to stop in transitu. As has already been seen, however,3 property in goods passes by contract, and indorsements of bills of lading and other documents have no effect upon it. Estoppel, too, as has been said, makes no distinction among those documents of title which in the mercantile world are taken as indicative of title.

Summary. Reviewing all the sections above quoted, we find that the general principle of estoppel by ostensible ownership and ostensible agency is cut down to seven very sharply defined cases selected from infinity, because by merest chance they had happened to present themselves in more than usually conspicuous form — that is, in notable law-suits:

1. The case of a "mercantile agent" being in possession of goods or the documents of title to goods, with the consent of the owner.

2. Or without that consent, if it at one time existed and its cessation was unknown.

3. Or if there had been consent to the possession of previous documents, by means of which the later ones were obtained. 4. The case of goods given to "another person" (not necessarily a mercantile agent) for consignment or sale; and the case of goods shipped in the name of another person. In such cases a "consignee's" advances are protected.

5. The case of a vendor remaining in possession of the goods or of the documents of title.

1 The Factors Act, 52 & 53 Vic. (Imp.), ch. 45, § 10.

2 Jenkyns v. Usborne (1844), 8 Sc. N. S. 505; 13 L. J. C. P. 196.

3 Ante, p. 322.

6. The case of a purchaser obtaining possession of the goods or the documents prematurely.

7. The case of a document of title lawfully transferred to a person as a buyer or owner of the goods, who transfers to another. In such case the right toɔ stop in transitu is gone.

Next notice that the first three of these cases are instances of ostensible agency, and the last four of ostensible ownership, although the draftsman did not so observe; for in numbers 5 and 6 it is provided that the transaction is to have the same effect as if the ostensible owner were in reality an agent, instead of in reality the owner.

Lastly, note that the result of the provisions is not in all cases the same. While in numbers 1, 2, 3, 5 and 6 an innocent person who acquires any interest, whether by "sale, pledge or other disposition," is protected, yet in the fourth case the protection afforded is only "in respect of advances;" and in the seventh the interests excluded are only "any vendor's lien or right of stoppage in transitu.”

The partial and incongruous character of the legislation is very apparent. A vendor of goods may be estopped, although another person who had misled in precisely similar fashion would not be; a purchaser may be estopped if he permit his vendor to have the documents of title, but will not be estopped if he give them to anybody else; an owner will be estopped if he ship the goods in the name of another person, as against the consignee and "in respect of advances," but he will not be estopped as to other persons, or if the consignee have purchased the goods; where a document of title has been transferred "to a person as a buyer or owner of the goods," the transferror will be estopped as against an innocent purchaser in respect of his vendor's lien or right to stop in transitu, but not in respect of other claims to the goods.

But the principal objection to the acts is that in so far as they accord with the principles of estoppel they are not only unnecessary but injurious (for they divert attention from those principles and fix it upon interpretation of the language of statutes); and so far as they conflict with the law of estoppel they are vicious, for they are then unsupported by principle and unamenable to reason.

AMERICAN LEGISLATION.

The early English legislation, with certain alterations, passed into the statute books of several of the States of the Union.' But the confusion wrought in England was largely obviated by (among other methods) a most fortunate, or most courageous, misinterpretation of the acts.

The New York statute of 1830 provided that

"every factor or other agent intrusted with the possession

shall be deemed to be the true owner thereof, so far as to give validity to any contract made by such agent with any other person for the sale or disposition of the whole or any part of such merchandise, for any money advanced, or negotiable instrument, or other obligation in writing, given by such other person on the faith thereof."

And the words "on the faith thereof" were held to mean on the faith of the agent being the true owner, and not on the faith of the possession of the goods or document of title. This construction was adopted by the Ohio courts.

The effect of these decisions was to bring the statutes into complete harmony with the law of estoppel. For thus construed, they really enact that when factors and other agents are permitted by the true owner to hold themselves out as owners of the goods, purchasers and others may claim the benefit of estoppel.

The other legislatures which passed Factors Acts do not seem to have encountered the opposition from the courts which was presented by the judges in England; and upon the whole it may be said that the development of the American law has been but very slightly affected by statutory provisions. The cases touching those enactments, therefore, do not require to be separated from those relating to the general law, and are for that reason not specially noted in this chapter.

An exception perhaps should be made from this statement with reference to the "doctrine" that a factor cannot pledge, the cases upon which have been referred to in the foregoing

1 See Kentucky, 1880, May 5; Maine, Rev. St. 1883, ch. 31; Maryland, Rev. Code, 1870, ch. 34; Massachusetts, Pub. St. 1882, ch. 71; New York, 1830, ch. 179; Ohio, 1880, Rev. St., § 3214, ff; Pennsylvania, Factors, 2; Rhode Island, Pub. St. 1882, ch. 136; Wiscon

sin, Rev. St. 1878, § 3345. See Stimson's Am. St. Law (2d ed.), §§ 43804388.

2 Stevens v. Wilson (1844), 6 Hill, 512; 3 Denio, 472.

3 Cleveland v. Shoeman (1883), 40 Ohio St. 176.

pages. The courts, however, even where unaided by statute exhibited an inclination to overturn the "doctrine."

"Numerous cases may be found where it has been held that a factor who holds a bill of lading for sale cannot pledge; but in such cases either it appeared that there were grounds for charging the pledgee with knowl edge of the factorship, or the decisions were made before the modern development of the doctrine of estoppel, or without giving it full consideration."1 The Californian judges showed not a little dexterity-perhaps timely temerity-in abolishing the "doctrine" by a qualification which limited its application to impossible cases, or something very near that.2

1 Pollard v. Reardon (1895), 13 C. C. App. 174; 65 Fed. R. 851.

2 Wright v. Solomon (1861), 19 Cal 64.

24

CHAPTER XXIV.

OSTENSIBLE OWNERSHIP AND AGENCY-CHOSES IN ACTION — AMBULATORY AND NON-AMBULATORY.

In the application of estoppel to negotiable instruments difficulty emanates principally from three sources:

1. The phrase "law merchant," like many another, is uncritically employed in handy explication of seeming anomalies. As objections to the Mosaic cosmogony, presented by the existence of fossils, were allayed by convenient reference to omnipotence, so perplexing questions relating to negotiable instruments are waived by unthinking allusion to the "law merchant." Omnipotence and law merchant work their arbitrary will, and are irreducible and distracting.

2. Uncertainty as to the meaning of the term "negotiable." 3. Misconception of the principles of the law of estoppel.

Such questions as these present themselves: Why is it that if a bill or note be stolen or found, the thief or finder can pass a good title to it; and that the law is otherwise as to chattel property? Why is it that if a bill be misapplied by an agent for custody of it, a good title will pass; and that the law is otherwise as to other property? Why is it that if a man write his name upon stamped paper, and a note be written over it, he is liable; although if a lease had been so written he would not be bound?

The Law Merchant.-To these and to other such questions the time-sanctioned reply is negotiability and the law merchant working in antagonism to the ordinary rules of law. All application of the principles of the law of estoppel, which, as the writer believes, would explain "how the fossils got there," and harmonize the law merchant with the general law, is expressly denied. The following are examples of current treatment of the subject:

Mr. Justice Byles, in Swan v. N. B. A.,1 said:

"The object of the law merchant as to bills and notes, made or become payable to bearer, is to secure their circulation; therefore honest acquisi

1 (1863) 2 H. & C. 184. And see 32 L. J. Ex. 277.