was therefore estopped from denying the truth of the representation. To estoppel the learned judge prefers, as he says, "the well-known principle that where one of two innocent persons," etc. But, with respect, that principle is either estoppel or it is nothing, as will appear by reference to the chapter of this work devoted to it.2 There is, also, against us the opinion of Mr. Bigelow: "The rule that one who has left with another his signature to an incomplete mercantile instrument or other contract — that is, with a blank to be filled in is bound by the act of that person in completing the instrument has been called an estoppel. Estoppel by conduct broadly this cannot be, for the principal's conduct in trusting the agent is not, or may not be, in the other's change of position, or in immediate connection with it, as it must be for an estoppel. Nor is there any false representation — the only other kind of estoppel the case could fall under. On the contrary there is a true representation, to wit, agency; and the only question is how far the agency ought to extend. That is not estoppel, but agency pure and simple; the agent has only exceeded his instructions." But there may be misrepresentation as to the extent of agency as well as to its existence. If a man represents that he has authority to fill up a blank with £500, and his authority extends to £100 only, surely it is an undue stretch of charity to say that "there is a true representation," and that the only justifiable criticism is that "the agent has exceeded his instructions." Again, Mr. Bigelow takes it that the only representation made is as to agency. But if the transferee knew nothing of blanks, there is no representation of agency or appearance of agency. The tacit and real representation is that the note was a completed instrument when signed. This is false, and it is because the maker has assisted in that misrepresentation that he is estopped by it and is liable to those who have acted on the faith of it. As against these authorities may be set the following from Jervis, C. J.:" "The rules applicable to the question of authority on this bill of exchange do not differ from those which ought to govern the question if it arose in the case between principal and agent. In the case of a blank ac ceptance prima facie the person giving it gives the person to whom it is given authority to fill it up for the amount and for the time limited by the stamp laws. As between these two there may be secret stipulations binding upon them, but not binding as between the public and the person 1 For a discussion of the principle here involved, see ante, ch. IV. 2 Ante, ch. XIV. 3 On Estoppel (5th ed.), 457. 4 This position is believed to be unsound. It is dealt with in ch. XVI. 5 See ch. XXVI. 6 Montagu v. Perkins (1853), 22 L. J. C. P. 187. See also Brocklesby v. Temperance (1895), A. C. 173; 64 L. J. Ch. 433; Merchants' Bank v. Good (1890), 6 Man. 337, 347. giving the acceptance. How does this differ from the ordinary case of an agent held out to the public at large as competent to contract for and to bind his principal? The agent may have secret instructions, but notwithstanding he deviates from them the principal is bound by his acts." And the following from Bowen, L. J.: "I arrive at the conclusion that a man who gives his acceptance in blank holds out the person to whom it is intrusted as clothed with ostensi ble authority to fill in the bill as he pleases within the limits of the stamp.”1 That estoppel is the only ground upon which it can be held that a principal is liable in "the ordinary case of an agent held out to the public at large as competent to contract for and bind his principal" is urged in a later chapter.2 Some direct support for the views here advocated is to be obtained too from a cautious note in Byles on Bills: 3 "Perhaps the obligation created by blank makings, acceptances and indorsements of bills, checks or notes depends on the principles of estoppel, and not on any peculiarity of negotiable paper. On this ground it is put by Lord Mansfield, in Russell v. Langstaffe, Doug. 514, and by Lord Chief Justice Tindal, in Shultz v. Astley, 2 Bing. N. C. 544. But see the observations of Williams, J., in Ex parte Swan, 7 C. B. 447; and Martin, B., and Channel, B., in Swan v. N. B. A. Co., 31 L. J. Ex. 435." In all fairness, however, it must be admitted that no very explicit reference to estoppel is to be found in the language of either of the learned judges who are here cited in support of the application of its doctrines. Blanks in Negotiable Instruments Unknown to the Transferee. If Galley fills up the blanks before offering the instrument in transfer, then, as has been said, Lord Mansfield's dictum ("Trust Galley," etc.) has no application; for the transferee cannot allege that he believed that Galley had authority to fill up the blanks. His position in such case is that he believed that the instrument was completed at the time of its execution; that the signer is responsible for that belief (having supplied Galley with a document which can easily be turned to a fraudulent purpose); and that he is therefore estopped from denying that it was so completed. Estoppel can have no competitor in this case as the ground of decision. Spaces as Distinguished from Blanks.- Let distinction be made between blanks purposely left in documents (such as for amount, date, etc.) and spaces carelessly unfilled with pen scratch, which are afterwards fraudulently filled up; for example, a space left after the words "three hundred," to which 1 Garrard v. Lewis (1882), 10 Q. B. D. 25. 2 Ch. XXVI. 3 15th ed. 255. is added "and fifty." These latter cases are dealt with in chapter V. The distinction Signed but Otherwise Blank Slips of Paper. above drawn between cases in which instruments containing blanks are (1) known, and (2) not known, by a transferee to have been executed in incomplete form, becomes of greater practical importance when the paper signed is otherwise altogether blank. Imperfection Known to Transferee.- If a person in possession of such a paper were to offer it in negotiation alleging authority to fill it up as he pleased, the transferee would undoubtedly have to take the chance of the assertion being well founded. There is no authority, so far as the present writer is aware, which would afford him any comfort. If the signer had affixed a revenue stamp the result would be otherwise,' for the signer has then indicated the existence of agency. Imperfection Unknown.- More difficulty arises where the slip has been completely filled before it is offered in negotiation where it has the appearance to the transferee of having been issued in perfect form. Upon this point the cases are far from satisfactory; due probably to oversight of the law of estoppel. For the question is not, Was there sufficient authority to fill up the slip? nor yet, Was it the signer's intention that a note should be made of it; but Did the signer assist the fraud in such manner as to estop him from alleging defect upon either of these grounds?— has he exercised "an appropriate measure of prudence to avoid causing harm" to others. Some of the cases are cited in the notes. They are not reducible to any principle. 3 To the present writer there is little difference between the case of a paper partially blank and one altogether blank, where the authority to fill up has been violated; for in both there are fraud and forgery, assisted by a signature intrusted to a rascal. In both the person who has selected the swindler and not the person cheated by him should lose.* 145 & 46 Vic. (Imp.), ch. 61, § 20. 2 Ante, p. 30. 3 McDonald v. Muscatine (1869), 27 Iowa, 319; Abbott v. Rose (1873), 62 Me. 194; Breckenridge v. Lewis (1892), 84 Me. 349; 24 Atl. R. 864. See a val- SUMMARY. As to negotiable instruments we may then say: 1. If when in complete form they are intrusted to other persons, either for custody merely or to be delivered upon the happening of a contingency, the obligors will be liable upon them to holders in due course, although the authority of the person intrusted is exceeded. 2. Obligors will also be liable in like cases, even if the instru ments have in them certain blanks, whether the existence of such blanks were or were not known to the transferees. 3. If the papers were altogether blank, save for the signature, the obligors will be liable if the transferees were not aware of the imperfection at the time of negotiation, but not liable if the transferees knew of the defects. 4. Estoppel is the true ground for decision in all such cases. B. NON-NEGOTIABLE INSTRUMENTS. Deeds. Before considering, as a class, documents which are usually termed "non-negotiable," we must ascertain whether or not deeds, because of their sealed character, can be properly combined with others of the class when treating of estoppel. It has been said that "a deed delivered without the knowledge, consent or acquiescence of the grantor is no more effectual to pass title to the grantee than if it were a total forgery."1 And it is therefore sometimes held that if a deed be deposited in escrow with instructions to deliver it upon a certain contingency, and it be otherwise delivered, and the grantee convey to an innocent purchaser, that the deed is altogether inoperative.2 Putting a stronger case: Suppose that the deed is not only incomplete as to delivery, but that it has some blanks in it which unknown to the grantee are filled up without authority before it is handed to him. Can estoppel avail? In such a case Martin, B., said there was no authority which shows that "where a deed is not the deed of the party, he may be estopped, by negli gence or carelessness on his part, from being permitted to aver that it is not." 3 Henry v. Carson (1884), 96 Ind. 422. And see Everts v. Agnes (1857), 4 Wis. 356; 6 Wis. 445; Chipman v. Tucker (1875), 38 Wis. 43; Harkraeder v. Clayton (1877), 56 Miss. 383; Allen r. Ayer (1895), 26 Oreg. 589; 39 Pac. R. 1. 2 See cases in preceding note. 3 Swan v. North B. A. (1862), 7 H. & N. 649; 31 L. J. Ex. 425. A like view was taken in the same case by Byles, J.;' and in another case by Willes, J.; and although the point appears not to have been pressed upon the appeal from the former of these cases, yet it finds acceptance in a modified form in the judgment given by Cockburn, C. J.1 In Everest and Strode on Estoppel, too, it is said that "the doctrine of estoppel by executing instruments in blank is confined to negotiable instruments; and does not apply to deeds." 5 At first sight the point seems to be somewhat formidable. The deed is incomplete; the signer does nothing further; no one has authority to perfect it (and of this there can be no question, for authority to complete a deed, it is said, must itself be by deed); how then can the document become operative? cases. Upon reflection, however, the difficulty disappears. For the problem as to deeds is not different from that involved in other In both it is admitted that the instrument was incomplete when signed, and that it was completed without sufficient authority. In both then, according to the facts, there is no binding document. But it is of the essence of the principles of estoppel that under various circumstances people may be precluded from setting up the facts; and a man may as well be estopped from saying that a deed is not his deed as from saying that a note is not his note. In a vigorous passage Wilde, B., protests against the limitation of estoppel to negotiable instru ments: "It is, therefore, independent of negotiability; it operates in a different way, founded upon principles of equity and fairness between man and man; it rests on a wider basis than the principle which supports title in negoti able instruments: and as it has no relation to commercial intercourse with the exigencies of trade, so it is not confined to instruments which have become negotiable by the demands of commerce."7 Mellor, J., was of the same opinion and put it thus tersely: Estoppel operates "not by validating a void deed, as was supposed in the argument, but by holding that parties shall not be permitted to aver, against equity and good 1 Id.; 2 H. & C. 184: 32 L. J. Ex. 273. 2 Re Swan (1859), 7 C. B. N. S. 400; 30 L. J. C. P. 113. Baker (1862). 9 Gr. 97, 298; Martin v. 3 Swan v. North B. A. (1863), 2 H. estoppel. Bank of Toronto v. Co & C. 175; 32 L. J. Ex. 273. 4 Id. 5 Page 358. 6 This old doctrine is losing some of its authority. Leonard v. Merritt (1830), Dra. 281; Bank of Montreal v. bourg (1884), 7 Ont. 1. And see the American cases as to bonds infra; and Washburn on Real Prop. (5th ed.), vol. 3, p. 256, note. 7 Swan v. North B. A. (1862), 7 H. & N. 634; 31 L. J. Ex. 425. |