ing harm" to others. A good example of this duty is to be found in cases in which a man, finding that his name has been forged, neglects to notify the victim until after his position (by the death, escape or bankruptcy of the forger) has been changed. Why, it may be asked, should the good man trouble himself; he has done nothing wrong, nor has he connived at it? But fortunately the law has declared otherwise; although, inconsistently as the writer thinks, it holds that a man may accept a bill in which the drawer has left spaces which offer the most obvious temptation to fraudulent increase of the amount, and may tell the victim that

"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.”

In a later part of the present chapter some reasons will be offered as against this holding; for (with deference) it is itself out of harmony with the principles of the law of estoppel, and that altruism which is an essential and indispensable feature of modern affairs.

4. Another class of cases in which there is a duty to be active is to be found in the law of partnership. When a member of a firm retires from it, he is under "a duty" to give notice of that fact to those accustomed to deal with the firm. But, why? May he not say, "Let the dealers take care of themselves; I have retired; I am not liable for the goods, for I did not buy them." And the courts might say (as in other departments of the law they sometimes do), "The dealers knew that a partner might have retired since the last transaction; they should have inquired." No doubt this could very properly be said if the egoistic view were the correct one. That it is not said is to be attributed to the underlying, but usually unexpressed, feeling that "an appropriate measure of prudence to avoid causing harm to others" must be exercised — actively if need be.

1 McKenzie v. British Linen Co. (1881), 6 App. Cas. 82. And see cases cited with this one in ch. XI.

are not liable to an innocent transferee of the bill. It is said that the transferee knew that the master had

2 Scarf v. Jardine (1882), 7 App. Cas. authority to give bills for goods 357; 65 L. J. Ch. 915.

3 Where a master signs a bill of lading for goods not put on board, it is held that the owners of the ship

shipped only, and that he should have inquired. See the subject discussed in ch. XXVI.

5. The following general statements of the law are not too comprehensive:

"Whenever one person is by circumstances placed in such a position with regard to another that every one of ordinary sense who did think would at once recognize that if he did not use ordinary care and skill in his own conduct with regard to those circumstances he would cause danger of injury to the person or property of the other, a duty arises to use ordinary care and skill to avoid such danger."1

"When a person perceives that, in a matter of interest to himself, another person is acting, or about to act, or likely to act, in a mode in which as a reasonable man he would not act or be likely to act if he knew the real facts, a duty arises on the part of the former to inform the latter of such real facts, if he is aware of them, and if the relative position in which the two parties stand towards one another is such that the latter might reasonably expect the former to tell him the real facts if the former were aware of them." 2

SPACES CARELESSLY LEFT IN DOCUMENTS.

These opposing views (egoism and altruism) have come into very notable conflict with regard to the question whether a party to a negotiable instrument may safely leave in it spaces which may easily be made available for increasing its amount. The subject has been elaborately discussed in the very recent case of Scholfield v. Londesborough, and in it the old case of Young v. Grote was once more dissected, explained, supported and condemned. Let us consider these cases somewhat closely, and more especially the later of the two, for by it the principle of egoism has received a predominance which is not only opposed to the decisions in many other analogous cases, but which the present writer believes to be highly injurious to commercial intercourse.

(1827) Young v. Grote "that fount of bad argument." A depositor in a bank signed a blank check, and left it with his wife to fill up as required. The wife directed a clerk to fill it up for £52.2. He did so and showed it to her. She then instructed him to get it cashed. He increased the amount of the [ check by £400 (inserting the necessary figure and words in spaces which he had left for that purpose), and drew the larger sum from the bank. It was held that the customer and not the bank should suffer the loss.

1 Heaven v. Pender (1883), 11 Q. B.

D. 509; 52 L. J. Q. B. 702.

2 Cababé on Estoppel, 81.

3 (1894) 2 Q. B. 660; 63 L. J. Q. B. 649; (1895) 1 Q. B. 536; 64 L. J. Q. B. 293; (1896) A. C. 514; 65 L. J. Q. B. 593.

4 (1827) 4 Bing. 253; 5 L. J. C. P. 165; 12 Moo. 484.

5 So Esher, M. R., in Scholfield v. Londesborough (1895), 1 Q. B. 543; 64 L. J. Q. B. 293.

The judgments, short and pithy as they are, have given rise to much discussion: (1) There is the greatest difference of opinion as to the ground upon which they proceed; (2) various suggestions have been made as to the grounds upon which they should have proceeded; and (3) several judges plainly declare that the right grounds would have led to an opposite conclusion.1 The decision, although somewhat shaken, still stands; but only on condition that it is confined to checks.3

(1896) Scholfield v. Londesborough. After much conflict of opinion the decision in the House of Lords in this case has authoritatively declared the law to be out of harmony with Young v. Grote; or, at all events, that Young v. Grote must be confined to checks, and does not apply to bills of exchange. The case was one in which a drawer of a bill availed himself of spaces (which he had purposely left) to raise the amount of an acceptance from £500 to £3,500, and the acceptor was held not to be liable to a holder in due course.

See the discussions in Swan v. N. B. Co. (1859), 7 C. B. N. S. 400; 30 L. J. C. P. 113; (1862) 7 H. & N. 703; 31 L. J. Ex. 425; 2 H. & C. 175; 32 L. J. Ex. 273; Société v. Metropolitan (1873), 27 L. T. N. S. 849; Halifax v. Wheelwright (1875), L. R. 10 Ex. 183; 44 L. J. Ex. 121: Baxendale v. Bennett (1878), 3 Q. B. D. 533; 47 L. J. Q. B. 624; Mayor v. Bank of England (1887), 21 Q. B. D. 163; 57 L. J. Q. B. 418; Scholfield v. Londesborough (1894), 2 Q. B. 660; 63 L. J. Q. B. 649; (1895) 1 Q. B. 536; 64 L. J. Q. B. 293; (1896) A. C. 514; 65 L. J. Q. B. 593; Greenfield v. Stowell (1877). 123 Mass. 196; Worrall v. Gheen (1861), 39 Pa. St. 388.

2 In Baxendale v. Bennett (1878), 3 Q. B. D. 533; 47 L. J. Q. B. 624, Brett, L J., said that "the observations made by the Lords in Bank of Ireland v. Evans have shaken Young v. Grote." But this is a mistake, as was pointed out by Charles, J., in Scholfield v. Londesborough (1894), 2 Q. B. 663; 63 L. J. Q. B. 649: "Upon reference, however, to the opinion of the judges in that case declared by

The drawer of a check is

Parke, B., and adopted by the House of Lords, it will, I think, be found that Young v. Grote was not in any way disapproved, and it has been recognized in many subsequent cases." In fact, Lord Cranworth said: "Therefore, taking that view of the facts, the case may be well sustained, and appears to have been well decided." It was expressly followed in Halifax v. Wheelwright (1875), L. R. 10 Ex. 183; 44 L. J. Ex. 121. And in Mayor v. Bank of England (1887), 21 Q. B. D. 163; 57 L. J. Q. B. 418, Day, J., said that he thought it "was most properly decided." See also the reference in Vagliano v. Bank of England, 22 Q. B. D. 103; 58 L. J. Q. B. 27; 23 Q. B. D. 243; 58 L. J. Q. B. 357; (1891) A. C. 107; 60 L. J. Q. B. 145.

3 See Scholfield v. Londesborough (1894), 2 Q. B. 660; 63 L. J. Q. B. 649; (1895) 1 Q. B. 536; 64 L. J. Q. B. 293; (1896) A. C. 514; 65 L. J. Q. B. 593. But see Dorwin v. Thompson (1869), 13 L. C. Jurist, 262.

4 Supra. Followed in Bank of Hamilton v. Imperial Bank (1899), 31 Ont. 100.

liable (according to Young v. Grote) if he leaves spaces which are fraudulently filled up; but the acceptor of a bill is not.

YOUNG V. GROTE.

Examining Young v. Grote (the check case) with a view of ascertaining the ground of decision, we have to admit that those who desire to suggest estoppel as its foundation are fairly met with the statement that estoppel is not once referred to either by counsel or judges; that the decision was in 1827, while the doctrine of estoppel was not familiar to common-law courts until Pickard v. Sears1 in 1837; and that if estoppel had been the ground, it would, therefore, naturally have so appeared. Upon the other hand, inasmuch as principles are never first thought out and afterwards applied, but arise experimentally and empirically, it is quite possible that the decision in Young v. Grote may be referable to doctrines which were but subsequently formulated to the principle of estoppel by assisted misrepresentation, which is even yet largely undeveloped. And this view would account for the absence of the word "estoppel" in the case.2

Every judge in Young v. Grote refers to the drawer's negligence as being the cause of the loss. But how can negligence be material? In this way: The check was not that of the customer; it was a forgery; the banker ought not to have paid a forged check; therefore he ought to lose. But although the check was forged, yet if the customer was estopped from so saying, the result will be otherwise. And he ought to have been estopped. The check was represented to be the genuine order of the customer, and the customer having through negligence assisted the misrepresentation (provided an opportunity

16 Ad. & E. 469.

"That estoppel is the true ratio decidendi is affirmed by Lord Cranworth in Bank of Ireland v. Evans (1855), 5 H. L. C. 413; and Erle, C. J., in Re Swan (1859), 7 C. B. N. S. 432; 30 L. J. C. P. 113; distinctly denied by Cockburn, C. J., in Swan v. N. B. A. (1863), 2 H. & C. 189; 32 L. J. Ex. 279 (but put upon a ground quite consistent with estoppel. See chapter XIV); and doubted and debated

by many other judges. See per Keating and Williams, JJ., in Re Swan, 7 C. B. N. S. 441, 446; 30 L. J. C. P. 117, 121; per Cleasby, B., in Halifax v. Wheelwright (1875), L. R. 10 Ex. 192; 44 L. J. Ex. 136; per Lopes, J., in Scholfield v. Londesborough (1895), 1 Q. B. 546; 64 L. J. Q. B. 303; per Coleridge, C. J., in Arnold v. Cheque Bank (1876), 1 C. P. D. 586; 45 L. J. C. P. 565.

for it) ought to be estopped. All the judges (as has been said) refer to negligence, and two of them particularize it as follows:

Best, C. J.: "Too much opportunity was thus given to the clerk to effect the alteration of the check."

Burroughs, J.: "She saw the check in question filled up in an unusual manner, both as to the figures and in the body; and she gave it in that state to her husband's clerk to get changed, thus affording him an opportunity to effect the fraud."

It is useless, however, to say that "too much opportunity for fraud was given unless there is some duty not to give "too much opportunity." And we may, therefore, say that neglect of duty, by affording opportunity for fraud, was the ground of the decision. If so, it is but the work of translation to couch the same idea in the language of estoppel: The clerk represented the check to be genuine; the banker, upon the faith of that representation, changed his position (paid the money); the misrepresenter and those who assisted him are estopped from denying the truth of the representation; the drawer having given "too much opportunity to the clerk to effect

the alteration of the check" assisted the fraud; and he is, therefore, estopped.

If we are wrong in so saying we may at least quote the testimony of Baron Parke, who was one of the judges engaged in the case, and who afterwards sitting in the House of Lords said: 2

"It was held to have been the fault of the drawer of the check that he misled the banker... by want of proper caution in the mode of drawing the check, which admitted of easy interpolation, and consequently that the drawer, having thus caused the banker to pay a forged check. by his own neglect in the mode of drawing the check itself, could not complain of the payment."

Preclusion from assertion of rights is estoppel.

SCHOLFIELD V. LONDESBOROUGH.

The reasons which, in Scholfield v. Londesborough, led to a contrary conclusion in the case of an acceptance may be summarized as follows:

(1) Young v. Grote was the case of a check, not of a bill.

1 The last English case on the subject declares that Young v. Grote cannot be supported upon the ground of negligence. Union Credit Bank v. Mersey Docks (1899), 2 Q. B. 205; 68 L. J. Q. B. 842. The court, however, distinguishes between estoppel

by negligence and estoppel by misrepresentation, not observing that negligence can be a factor in estoppel only where there is representation. See ch. IX.

2 Bank of Ireland v. Evans (1855), 5 H. L. C. 389.