LIBRARY OF THE UNIVERSITY OF ILLINOIS AT URBANA-CHAMPAIGN KF /?OS> 's. X ?? ~ ?? BEVE:N * ?:=■-?? NEGLIGENCE! * IN LAW * (^^o) KE> 1 264-k , B4SX-* 1 90S* K>*2* CLOTH COLOR 0073 BRITTLE ^ | ^ CHARG ING 1 MFORMATION HAND SEW rHCJNT COVER NO TRIM THRU SEW PAGES LAMINATED THRU SEW ON TAPE EXTRA THICKNESS HAND ADHESIVE MAP POCKET PAPER LENGTHWISE MAP POCKET CLOTH FOREIGN TITLE SPECIAL WORK LINES OF LETTERING 0.1. LAX I HEIGHT 00 HEIGHT o 7? 73 SPECIAL WORK AND PREP. pQ 1*0 * CI & 1 UKIVtBSnt OF lllltilS F£B 1 5 ©89 flSi u«W Digitized by the Internet Archive in 2016 https://archive.org/details/negligenceinlaw02beve NEGLIGENCE IN LAW VOLUME II SPECIAL RELATIONS ARISING OUT OF CONTRACT NEGLIGENCE IN LAW BY THOMAS JWE V E N OF THE INNER TEMPLE. BARRISTER-AT-LAW THIRD EDITION VOLUME II SPECIAL RELATIONS ARISING OUT OF CONTRACT LONDON STEVENS AND HAYNES ILato Publishers 13 BELL YARD, TEMPLE BAR TORONTO CANADA LAW BOOK CO. 32 TORONTO STREET CONTENTS. /yfcLCu VOLUME II. SPECIAL RELATIONS ARISING OUT OF CONTRACT. BOOK V. BAILMENTS. CHAPTER I. PACES VARIOUS RELATIONS, 729-868. General ............ 729 Bailment defined .......... 729 Duty of Bailee .......... 730 Confusion ............ 731 Right of Action of Bailee ........ 733 Heydon and Smith’s Case ........ 734 The Winkfield .......... 735 Remedy of Bailee against Bailor, whether Contract or Tort . 737 I. Deposit ........... 740-763 Gross Negligence, What ........ 743 Southcote’s Case' and Mr. Holmes’s Theory of Bailments . 746 Robbery . . . . . . . . . . 749 Theft ........... 749 Deposit of Securities ........ 755 II. Mandate ........... 763 Negotiorum gestor, note ........ 768 III. Gratuitous Loan ......... 770 IV. Pawn or Pledge . . . . . . . . . 776 V. Contract of Hire ......... 786 (1) Hire of Things ......... 788 Cab Cases .......... 802 (2) Hire of Labour and Services ...... 804 (i) Labour or Services ....... 805 (ii) Hire of Custody ....... 812 (a) Agisters of Cattle . . . . . . 812 ( fi ) Factors or Brokers ...... 816 Del credere Agents ...... 820 166351 vi * CONTENTS. PAOES Insurance ..... 822 Insurer a Surety ....... 823 Reinsurance ........ 824 Insurance Broker ....... 824 Duty op the Insured ...... 820 (7) Warehousemen ....... 827 (5) Wharfingers ........ 835 (e) Dock-owners ........ 838 The Moorcock ....... 841 The Calliope ........ 841 (f) Forwarding Agents ...... 844 VI. Carriers for Hire ......... 845 VII. Innkeepers .......... 840 Medawar v. Grand Hotel Company ..... 854 Calye’s Case .......... 857 Dawson v. Chamney ........ 850 CHAPTER II. COMMON CARRIERS, 860-017. General Considerations ......... 800 Liability in Respect of Duty ........ 874 Liability in Respect of Risk ........ 876 Exceptions from Common Carrier's Liability : I. Act of God .......... 870 II. Acts of the Enemies of the King ..... 887 III. Loss or Deterioration of Goods arising from inherent Defect 883 IV. Where Goods are of a dangerous Nature which is not apparent 878 V. Where there is Fraud in the Constitution of the Contract 888 VI. Where there is Delay' arising from Circumstances beyond the Carrier’s Control ....... 800 VII. Where the Goods are retaken by Legal Process . 801 VIII. Where proper Notice of Limitation of Liability - has been GIVEN .......... 892 Delivery ............ 898-917 I. Delivery - to the Carrier ....... 898 II. Delivery by the Carrier ....... 902 Summary of the Law ........ 916 CHAPTER III. COMMON CARRIERS BY LAND, 018-1016. I. Of Goods ........... 018 The Carriers Act, 1830 ........ 018 The Railway and Canal Traffic Act, 1854 .... 025 II. Of Passengers .......... 940 Differentiated from Carrier of Goods ..... 940 Duty of Carrier by Coach distinguished from that of Carrier by Railway .......... 043 Who is a Passenger ...... . . 949 CONTENTS. vii PAGES Passenger distinguished from Trespasser. .... 952 Statutory Passengers ........ 955 Passengers by Invitation ........ 956 Conditions contained in Railway Ticket, how far- Binding . 964 Exceptions to their Validity where there rs : (a) Reasonable Ignorance; (P) Fraud ; (7) Mistake ; ( 8 ) Want of Equity ........ 967 Duty to Passengers during Transit ...... 972 Duty to provide means of Alighting ..... 979 Special Developments of Contributory Negligence applicable to Railway Travelling ....... 986 Cobb v. G. W. Ry. Co. ...... . 990 Pounder v. N. E. Ry. Co. ....... 992 III. Passengers’ Luggage . ....... 997 History of the Law ......... 997 (i) Where Passenger exercises Control over the Luggage DURING THE TlME OF ITS CONVEYANCE . . . 999 Talley v. G. W. Ry. Co. ...... 1000 Bergheim v. G. E. Ry. Co., G. W. Ry. Co. v. Bunch . 1002 Richards v. L. B. &. S. C. Ry. Co. .... 1004 Butcher v. L. &. S. W. Ry. Co. ..... 1004 (ii) Where Luggage is not Ordinary or Personal Luggage 1006 (iii) Where the Possession of the Luggage by the Carrier is in another Character than that of Carrier . 1009 Delivery ........... 1011 CHAPTER IV. COMMON CARRIERS BY WATER, 1017-1078. I. Of Goods ........... 1017 Theories as to the Liabilities of Carriers by Water discussed 1017 Jettison ........... 1022 Seaworthiness .......... 1025 Duty of Master of Ship ....... 1034 Managing Owner ......... 1038 Pilotage . . . . . . . . . . 1042 Towage ........... 1046 Charter Party and Bill of Lading ...... 1053 Exceptions in Bills of Lading ...... 1059 (i) Act of God . ....... 1059 (ii) Peril of the Sea ....... 1059 (iii) Loss by Fire ........ 1070 (iv) Barratry ........ 1070 (v) Loss by the King’s Enemies ..... 1070 , (vi) By Pirates or Robbers ...... 1070 (vii) Arrests or Restraints of Princes .... 1071 (viii) Explosion ........ 1071 viii CONTENTS. (ix) Collision, see next chapter (x) Stranding Delivery - ...... II. Carriers of Passengers by Sea PACES 1072 1073 1075 CHAPTER Y. COLLISIONS ON WATER. 1070-1123 Damage by Collision defined . 1079 Ship sunk becoming an Obstruction 1080 Cases of Collision .... 1085 Nautical Negligence defined . 1089 Perilous Alternatives 1090 Inevitable Accident 1091 Onus probandi in Cases of Collision 1094 Remedies of Owners of Ships injured by Collision 1095 Rules of Navigation 1097 Duty’ in Fog ..... 1100 General Principles .... 1104 Limitation of Liability 1108 Restitutio in integrum mi Lord Campbell’s Act as affected by Merchant Shipping Legislation 1112 Ferry Boats ..... 1113 CHAPTER VI. TELEGRAPHS AND TELEPHONES, 1115-1123. BOOK VI. SKILLED LABOUR. CHAPTER I. SKILLED LABOUR, 1127-1149. Generally ......... 1271 Accountants and Auditors ...... . 1131 Architects, Survey-ors, &c. ...... 1135 Auctioneers and House Agents 1141 Stockbrokers ...... ... 1 145 CHAPTER II. MEDICAL MEN, 1100 1171 1150 1150 1151 History- of the Law ( a) Physicians (/3) Surgeons CONTENTS. (7) Apothecaries ......... (5) Registered Medical Practitioners ..... Malpractice ........... Standard of Ordinary Care and Skill ...... Standard of Specialist Skill ........ Standard of Skill of a Druggist ....... Liability of Governors of a Hospital for the Negligence of their Staff ............ Negligence in the Care of, or in Certifying Lunatics . Duty of Public Officers named in the Lunacy Act. 1890 Dentists . ........... Pharmaceutical Chemists ......... Veterinary Surgeons ......... ix PAGES 1151 1152 1155 1150 1157 1165 1165 1166 1169 1170 1171 1171 CHAPTER III. SOLICITORS, 1172-1205. History ............ General Position of Solicitors ....... I. Solicitor as Officer of the Court ...... II. Solicitor’s Liability under his Retainer .... III. Solicitor’s Duties . ....... ( a ) In managing Litigation ....... (/3) In managing Matters not in Litigatk ..... (i) In the Course of Business between Vendors and Pur- chasers . ......... (ii) In the Course of Business between Landlord and Tenant (iii) In the Course of Negotiating between Lenders and Borrowers . ........ (iv) In Partnership Matters ....... (v) In Matters affecting the Relation of Principal and Surety^ .......... (vi) In Arrangements between Debtor and Creditor (vii) In Matters Matrimonial and Testamentary . Solicitor preparing Client’s Will in his own Interest . Town Agent of Solicitor . . . . Barristers . . . . . . . . . History ............ Theory of the English Law ........ Undertakings concerning Advocacy distinguished from Contract UNCONNECTED THEREWITH ........ Authority of Counsel ......... Immunity for Negligence, Ignorance, or Lack of Judgment 1172 1174 1177 1180 1186 1186 1192 1192 1194 1194 1197 1197 1197 1197 1198 1199 1200 1200 1202 1203 1203 1204 VOL. 11. b X CONTENTS. BOOK VII. UN CL A SSI FI ED RELATIONS. CHAPTER I. PAGES PARTNERSHIP, 1209-1227. Definition ........... 1209 Private Partnership: Rule of Diligence ..... 1210 Statutory : Limited Liability Companies ..... 1212 Duty of Directors .......... 1213 I. As they Act for their Company ...... 1213 II. As they t Act for their Shareholders ..... 1220 Summary ............ 1220 Liability' of Company Liquidator ....... 1225 Directors’ Liability Act, 1890 ....... 1226 Duties of Secretary qf Company ....... 1227 CHAPTER II. TRUSTEES AND EXECUTORS, 1228-1269. Definition of Terms ......... 1228 Distinction between Trustee and Executor ..... 1228 General Principles of Liability' ....... 1229 I. Position of a Trustee with regard to the Custody of Trust Property - ........ 1238 II. Position of a Trustee Dealing with Trust Funds . . 1246 (a) As to Acts having a Special Reference to Executors . 1246 (/3) As to Acts having no Special Reference to Executors 1258 Trustee Act, 1893 .......... 1254 Laches ............ 1261 Acquiescence ........... 1263 Receivers. .......... . 1266 CHAPTER III. BANKERS, 1270-1331. I. Relation between Banker and Customer ..... 1270 Effect of Entries in Pass Book ...... 1275 II. Banker as Agent for his Customer ...... 1279 (1) Negotiable Instruments ....... 1279 Earl of Sheffield v. London Joint Stock Bank . . 1284 Simmons v. London Joint Stock Bank .... 1285 (2) Bills of Exchange and Promissory' Notes . . . 1287 Duty of Banker in the Collection of Bills of Exchange or Promissory' Notes ...... 1288 CONTENTS. xi PAGES Employment of Notary . . • . . . 1289 (a) Presentment of Bill of Exchange for' Accept- ance ........ 1290 (jS) Presentment for Payment .... 1295 Bank Notes ....... 1297 (>) Notice of Dishonour ..... 1803 Forged Instruments ....... 1304 (3) Cheques .......... 1310 Duty of Banker in Paying Cheque . . . . 1313 Banker’s Lien ........ 1316 Young v. Grote ........ 1317 Schofield v. Earl of Londesborough .... 1325 Colonial Bank of Australasia v, Marshall . . . 1329 III. Banker as Pawnee . . . . . . . . . 1330 IV. Banker as Warehouseman ....... 1330 CHAPTER IV. ESTOPPEL, 1332-1377. Defined ............ 1332 General Principles .......... 1333 Facilitating Fraud .......... 1340 Bank of Ireland v. Trustees of Evans’s Charities . . . 1343 Consideration of which of Two Innocent Persons is to Suffer where Stock is handed over by a Banker under a Forged Order ........... 1345 Certificates and Certification ....... 1349 Simm v. Anglo-American Telegraph Co. ...... 1351 Bishop v. Balkis Consolidated Co. ....... 1352 Sheffield Corporation v. Barclay ....... 1354 Shaw o. Port Philip and Colonial Gold Mining Co. . . . 1355 Ruben v. Great Fingall Consolidated ...... 1355 Negligence of a Mortgagee or his Agent ..... 1357 Taylor v. Russell .......... 1359 Deposit of Tilte Deeds and Negligent Custody .... 1363 Notice Actual and Constructive ....... 1364 Ward v. Duncombe .......... 1373 Where Knowledge of Solicitor estops Client .... 1375 Res Judicata ........... 1376 INDEX . 1379 BOOK V . BAILMENTS. BOOK V. BAILMENTS. CHAPTER I. VARIOUS RELATIONS . 1 General. We now enter upon the consideration of bailments. The word bailment is derived from the Norman French bailler, and signifies to deliver . 2 It imports a contract resulting from delivery . 3 Sir William Jones defines 4 a bailment as “ a delivery of goods on a condition, expressed or implied, that they shall be restored by the bailee to the bailor, or according to his directions, as soon as the purpose, for which they were bailed, shall be answered.” Story 5 objects to this definition, that it assumes that the goods are to be restored or re-delivered, which in the cases of consignment to a factor for sale is not the case ; and substitutes a definition of his own, viz., “ a delivery of a tiling in trust for some special object or purpose and upon a contract, express or implied, to conform to the object or purpose of the trust.” Chancellor Kent, again, objects to this use of the word bailment as “ extending the definition of the term beyond the ordinary accepta- tion of it in the English law,” which draws a distinction between a consignment to a factor and a bailment ; which latter is narrowed “ to Signification of the term bailment. Sir William Jones’s definition. Story’s objection. Kent’s objec- tion to Story’s definition. 1 There is a very learned article in the Law Quarterly Review, (1880) vol. ii. 188, entitled “ Liabilities of Bailees according to German Law ” — “ Roman ” might without impropriety have been substituted for “ German ” — wherein the law of bailments is most ably treated from the point of view of jurisprudence. Mr. Holmes’s chapter on The Bailee at Common Law, in The Common Law, 164, is, like the rest of his book, admirable and original, though his conclusion is very disputable. Post, 734, 746. “No one who has read the treatise of Mr. Justice Story on Bailments, the essay of Sir William Jones, and the judgment of Lord Holt in Coggs v. Bernard, ,” says Brett, J., in Nugent v. Smith, 1 C. P. D. 28, “ can doubt that the common law of England as to bailments is founded upon, though it has not exactly adopted, the Roman Law.” Cockburn, C.J., in the same case in the Court of Appeal, 1 C. P. D. 428, argues that “ it is a mis- apprehension to suppose that the law of England relating to the liability of common carriers was derived from the Roman law ” ; and contends that this particular rule was introduced by custom as an exception to the general law of bailment, in the reign of Elizabeth and James I. 2 2 Bl. Comm. 451. Shep. Abr. Bailment, may be referred to for early cases. 3 Story, Bailm. § 2. 4 Essay on the Law of Bailments, 1. 5 Bailm. § 2, where in tfixt and notes the whole discussion as to the exact meaning of a bailment is gone into. NEGLIGENCE IN LAW. Distinction between a bailment properly so called and the possession of property by a servant or agent on behalf of the master. Contract to deliver not a bailment. Delivory of the thing to bo bailed. Thing bailed a chattel. Duty of bailee. Thing bailed presumably the thing to be returned. 730 [book V. cases in which no return or delivery, or re-delivery to the owner or his agent, is contemplated.” 1 Sergeant Sheppard in his Abridgment 2 adopts the meaning in Termes de la ley : 3 a bailment “ is a delivery of things, whether it be of writings, cattel, goods or stuff to another, which is sometimes to be delivered back to the bailor, sometimes to the use of the bail, and sometimes to be delivered over to a third person.” He adds : “ And this delivery is sometimes upon condition to be re-delivered when money is paid, or something is done.” A further distinction must also here be noted between bailment and the possession of property by a servant or agent on behalf of the master . 4 The latter is not a bailment ; since the servant holds in the name of his master ; a bailee properly so called holds in his own name. As Lord Ellenborough says : 5 “ You cannot make my servant, whose possession is my possession, my bailee. He is not liable as a bailee. Where goods are delivered to another as a bailee, the special property passes to him ; but here it does not.” A mere contract to deliver is not a bailment ; for there must be a delivery of the thing bailed. The person who delivers the thing is called the bailor ; the person to whom it is delivered the bailee. Delivery of a bailment is either actual or constructive . 6 A con- structive delivery is effected by the bailee acting on an authority given at a time and place different from that in which the possession of the goods is assumed ; or in circumstances where, though no actual authority to assume possession of the goods is ever given, a presumption of authority is raised . 7 The thing bailed must be a chattel , 8 and must be delivered for a special object or purpose ; in the absence of which the delivery constitutes either a gift or a sale. A bailee, by virtue of the bailment, is bound to take care of the property committed to his hands. The degrees of care marked in law have already been generally examined . 9 But we must not lose sight of the consideration that in a contract of bailment the bailee may impose whatever terms he chooses, if he gives notice of them and the bailor has the means of knowing them . 10 Where terms are imposed the bailor and bailee are bound in the same way they would be in the case of any other contract. The thing bailed is presumably the thing to be returned. Where this is certain one fruitful cause of difficulty is absent. Yet it happens sometimes that, either from the nature of the thing bailed, or from some act or default of the bailee, the thing bailed becomes mixed with the bailee’s property. Then the rights of the bailor, as against the i 2 Kent, Comm. 559 note (a). 2 Bailment. [_ 3 Termes de la ley, (1579). The word “ cattel ” is an addition. * Y. B. 3 H. VII. 12, pi. 9. See Reeves, Hist, of Eng. Law (2nd ed.), vol. iv. 179. 5 Hopkinson v. Oibson, 2 Smith (K. B.) 202. The case determined that the colonel of a regiment who had purchased horses for Government had not such a special property as to maintain trover for one of them which was taken out of the possession of tho sergeant who was taking them to the receiving depot, as a distress for a turnpike-toll. o The Queen v. McDonald, 15 Q. B. D., per Lord Coleridge, C.J., 320 ; The Quern v. Ashwell, 10 Q. B. D. 223 ; The Queen v. Flowers, 16 Q. B. D. 643. 7 Doctor and Student, dial. 2, c. 38 : “ If a house by chance fall upon a horse that is borrowed, who shall bear the loss ? ” ; Noy, Maxims, c. 43. 8 Williams v. Jones, 3 H. & C. 256 ; (Ex. Ch.) 602. 3 Ante, 19, et seqq. to Per Erie, C.J., Van Toll v. S. E. Ey. Co., 12 C. B. N. S. 85. CHAP. I.] VARIOUS RELATIONS. 731 bailee, may assume any of several aspects determined by the circum- stance whether the confusion is the result of intent or of accident, or is a natural result, or a disposition thwarting the object of the bailment. The general rule of law, as stated by Blackstone, 1 is : “ If the Confusion of intermixture be by consent, I apprehend that in both laws [i.e., by the property of common law and the civil law] the proprietors have an interest in and common in proportion to their respective shares. 2 But, if one wilfully intermixes his money, corn, or hay with that of another man without his approbation or knowledge, or casts gold in like manner into another’s melting-pot or crucible, the civil law, though it gives the sole property of the whole to him who has not interposed in the mixture, yet allows a satisfaction to the other for what he has so improvidently lost. 3 But our law, to guard against fraud, gives the entire property, with- out any account, to him whose original dominion is invaded, and endeavoured to be rendered uncertain without his consent.” 4 It was settled English law so far back as the year 1500, 5 that, Old English despite alterations of form which property might have undergone, the law - owner might seize it in its new shape if he could identify the original materials — as leather made into shoes, 8 or cloth into a coat, or a tree into boards ; it was held further, that if grain be taken and made into malt, or money into a cup, or timber into a house, the property is so changed as to alter the title. The case of a house on another man’s land may be distinguishable Considered, in principle. 7 The other cases seem rather to differ from the difficulty of proving the identity of malt with particular grain, or a cup with particular silver, than from any different principle involved in the determination of ownership. Where the taking is fraudulent, the taker should stand in no better position than an express trustee. 8 1 2 Comm. 405. 2 Inst. 2, 1, 27, 28; Jeffereys v. Small, 1 Vern. 217; Ayliffe, Civil Law, bk. iii. tit. 3, 291. 3 Inst. 2, 1, 28. i Poph. 38, the case of mixing hay ; Fellows v. Mitchell, 2 Vern. 516, “ as if another should blend his money with mine, by rendering my property uncertain he loses his own ” ; Ward v. Eyre, 2 Bulst. 323, the case of heaps of money wilfully mixed by the plaintiff at play, the whole of which the defendant kept ; 1 Hale, Hist, of Pleas of the Crown, 513 ; Colwill v. Reeves, 2 Camp. 575 ; Lupton v. White, 15 Ves. 432. The rule of damages in an action of trover, whore the defendant has added to the value of the property converted, is treated in an article on Accession. Am. Law Mag. vol. vi. 282, where the law as laid down by Blackstone is followed. 5 Y. B. 5 H. VII., 15 b, pi. 6 ; a bailment of leather which the bailee parted with to one who made the leather into slippers, which were seized by the bailor. It was held that the property in the leather was not changed by the manufacture. This case is set out in part in Hartopp v. Hoare, 3 Atk. 48 ; Fitzh. Abr. Barre, 144 ; Bro. Abr. Propertie, 23. 6 In Duncomb v. Reeve, Cro. Eliz. 783, it was held that if a man, having dis- trained raw hides, tan them, he becomes a trespasser ab initio by doing so ; for his act, though at first sight a benefit, is an injury to the owner, as the nature of the hides is so changed that he can never be sure of getting them again. If, however, a man who has distrained armour, scour it to preserve it from rust, he does not become a trespasser thereby, for his act is beneficial to the owner. 7 Code Civil, art. 552. In Miller v. Michoud, 1 1 Rob. (La.) 225, under the Louisiana Code it is held that where a lessee of ground constructs buildings or other works thereon, with his own materials, the owner of the soil may keep them on paying the value of the materials and the price of the workmanship. The law will not permit a man knowingly though passively to encourage another to lay out money under an erroneous opinion of title: Dann v. Spurrier, 7 Ves. 231. But a man is not to bo deprived of his legal rights unless he has acted in such a way as to make it fraudulent for him to set up those rights. See per Fry, J., Wilmott v. Barber, (1880) 15 Ch. D. 105. The positions of a wilful intermeddler and of an innocent purchaser from him are very fully considered in Silsbury v. Calkins, 3 N. Y. 379. 8 See per Jessel, M.R., In re Hallett's Estate, 13 Ch. D. 709; which case over- rules Brown v. Adams, L. R. 4 Ch. 764 : In re Oatway, [1903] 2 Ch. 360. NEGLIGENCE IN LAW. [BOOK V. Accidental mixing. Spence v. Union Marine Insurance Co. Buclcley v Gross 732 Where the taking is wilful but not fraudulent, the taker should be in no better position than if his act were due to his negligence or unskilfulness . 1 “ It is a principle settled as far back as the time of the Year Books that, whatever alteration of form any property may undergo, the true owner is entitled to seize it in its new shape if he can prove the identity of the original material.” “ But this rule is carried no further than necessity requires, and is applied only to cases where the compound is such as to render it impossible to apportion the respective shares of the parties.” 2 The case of an accidental mixing, where identity is destroyed, is the subject of modern decision. In Spence v. Union Marine Insurance Co ., 3 Bovill, C.J., said : “ It has been long settled in our law, that, where goods are mixed so as to become undistinguishable by the wrongful act or default of one owner, he cannot recover , 1 and will not be entitled to his proportion, or any part of the property from the other owner ; but no authority has been cited to show that any such principle has ever been applied, nor, indeed, could be applied, to the case of the accidental mixing of the goods of two owners ; and there is no authority nor any sound reason for saying that the goods of several persons which are accidentally mixed together thereby absolutely cease to be the property of their several owners, and become bona vacantia. The goods being before they are mixed the separate property of the several owners, unless, which is absurd, they cease to be property by reason of the accidental mixture, when they would not so cease if the mixture were designed, must continue to be the property of the original owners ; and as there would be no means of distinguishing the goods of each, the several owners seem necessarily to become jointly interested, as tenants in common, in the bulk.” After citing several authorities , 5 the learned judge continues : “ We are thus, by authorities in our own law, by the reason of the thing, and by the concurrence of foreign writers, justified in adopting the conclusion that by our own law the property in the cotton of which the marks were obliterated did not cease to belong to the respective owners ; and that, by the mixture of the bales, and their becoming undistinguishable by reason of the action of the sea, and without the fault of the respective owners, these parties became tenants in common of the cotton, in proportion to their respec- tive interests. This result would follow only in those cases where, after the adoption of all reasonable means and exertions to identify or separate the goods, it was found impracticable to do so.” To the same effect is the judgment of Blackburn, J., in Buchley v. Gross , 6 in the case of tallow which was melted and flowed into the i See post, 733. Lupton v. While, 15 Ves. 432. s In re Oatway, [1903] 2 Ch., per Joyce, J., 359. 2 Steph. Comm. (14th ed.), 20. a L. R. 3 C. P. 437. Sec Harris v. Truman, 7 Q. B. D. 358. 4 Stock v. Stock, Poph. 38 ; Ward v. sEyre, 2 Bulst. 323. 5 Mackeldey, Modern Civil Law (Eng. ed., 1845), 285 ; Story, Bailm. § 40 ; Pothier, Trade du Droit de Domaino de Propriete, Art. IV. § 2, De la Confusion, 166. Sheppard Abridg. Trespass, 133, citing 22 Car. at Gloucester Assizes by Sergeant Wild, has: “ If one take my corn and put it to his corn so that it cannot be known which is his, and which is mine, and then I carry it away altogether; it seems this action will not lie against me for this.” g 3 B. & S. 574. Sec In re Hallett's Estate, KnatcJibidl v. Halid t, 13 Ch. D., per Jessel, M.R., 712 : explained by the same learned judge, Kirkham v. Peel, 43 L. T. 172. The cases are considered. National Bank v. Insurance Co., 104 U. S. (14 Otto) 54 ; also First National Bank v. Hummel, 20 Am. St. R. 257. See also per Lord Abinger, in the case of the mixture of oil by leakage on board ship : Jones v. Moore, 4 Y. & C. VARIOUS RELATIONS. 733 CHAP. I.] sewers, and tlience into the Thames, whence some of it was taken by different persons who sold it ; from whom it was taken by the police and detained ; and subsequently sold. The action was for con- version brought by one of the original purchasers against a purchaser from the police. “ I dissent,” says Blackburn, J., 1 “ from the doctrine Judgment of that because the property of different persons is confused together, Blackburn, J that entitles a third person to steal it with impunity. Probably the legal effect of such a mixture would be to make the owners tenants in common in equal portions of the mass, but at all events they do not lose their property in it.” 2 Where the mixing is the result of negligence or unskilfulness, the Negligent or rule is laid down by Lord Eldon : 3 “If one man mixes his corn or unskilful flour with that of another [i.e., negligently or unskilfully], and they were of equal value, the latter must have the given quantity ; but if Lord Eldon, articles of different value are mixed, producing a third value, the C., in Lupton aggregate of both, and, through the fault of the person mixing them, v - the other party cannot tell, what was the original value of his property, he must have the whole.” In this view Chancellor Kent coincides, 4 holding that no court of justice is bound to make the discrimination for the wrongdoer. A more recent and, as to expression, somewhat varied statement The Idaho. of the law on this point is to be found in The Idaho : 5 “ All the authorities agree, that if a man wilfully and wrongfully mixes his own goods with those of another owner, so as to render them undistinguishable, he will not be entitled to his proportion, or any part of the property. Certainly not, unless the goods of both owners are of the same quality and value. Such intermixture is fraud. And so, if the wrongdoer confounds his own goods with goods which he suspects may belong to another, and does this with intent to mislead or deceive that other, and embarrass him in obtaining his right, the effect must be the same.” Both the bailor and bailee may maintain an action against a stranger Right of for an injury to or conversion of the bailment 6 — the bailor by virtue action, of his general property, the bailee by virtue of his special property 7 (Ex.) 351 ; Henderson v. Lauck, 21 Pa. St. 359, the case of mixing com ; also Brelz v. Diehl, 117 Pa. St. 589, 2 Am. St. R. 706, and the note as to the distinction between sale and bailment. See further, Woodward v. Semans, 21 Am. St. R. 225 ; Cloke v. Shafroth, 31 Am. St. R. 375 ; and 2 Parsons, Contracts (8th ed.), 137. Wilsons, &c. Line v. British, etc. Shipping Co., 23 Time s L. R. 397. i 3 B. & S. 575. 2 Cp. The Queen v. Lushinglon, Ex parte Otto, [1894] 1 Q. B. 420. 3 Lupton v. White, 15 Ves. 442, from which case Stuart, V.C., in Cook v. Addison, L. R. 7 Eq. 466, deduces the rule that “ if a trustee or agent mixes and confuses the property which he holds in a fiduciary character with his own property so as that they cannot be separated with perfect accuracy, he is liable for the whole.” Cray v. Iiaig, 20 Beav. 219. i Hart v. Ten Eyck, 2 Johns. (Ch. N. Y.) 62. See 2 Kent, Comm. 364, and Mr. Holmes’s note to the 12th ed., 365. McDonald v. Lane, 7 Can. S. C. R. 462, is a case of “commingling of logs.” In re Oatway, [1903] 2 Ch. 356, of mixing trust with private funds. 5 93 U. S. (3 Otto) 585. 3 2 Bl. Comm. 453 ; Bac. Abr. Bailm. (A) (B) (C). 7 Roberts v. Wyatt, 2 Taunt. 268. In Holliday v. Camsell, 1 T. R. 658, it was held that one entrusted with a box containing the funds of a society of which he was a member, and bound by a bond to keep it safely, cannot maintain trover against another member who has taken it from him. This was on the ground that one tenant in common cannot maintain an action of trover against another. Detinue can be maintained by any person who has the immediate right to possession of personal chattels which are wrongfully detained from him, whether that right arises out of an absolute or special property : Fenn v. Biltleston, 7 Ex. 152, followed in Nyberg v. Ilandelaar, [1892] 2 Q. B. 202 ; cp. Guillot v. Dossat, 4 Martin (La.) 203. One tenant in common of a chattel cannot maintain trover against his co-owner, unless the latter has so dis- posed of it as to render the plaintiff’s enjoyment of it impossible : Fennings v. Lord 734 NEGLIGENCE IN LAW. Bailee’s right to sue. Right to sue, whether de] endent on the bailee’s chargeability over, con- sidered. Heydon and Smith's case. Conclusion from it. [BOOK V. and actual possession. 1 This right of action is limited by the interests of the bailee in the bailment. If the bailee has been guilty of a conversion of the bailment or is an insurer of it, or has been guilty of negligence which has induced the injury in respect of which he sues the wrongdoer, the bailee may recover the full amount of the damage done to the bailment. But it has been said that, where the bailee has not been in default in the custody of the thing bailed, he can only recover to the extent that his interest has been affected ; for he is not chargeable over. The phrase “ because he is chargeable over ” is of early and often occurrence 2 in this connection as pointing to the ground of the bailee’s liability. In Heydon and Smith's case 3 the law was laid down with some precision : “ Clearly the bailee, or he who hath a special authority, shall have a general action of trespass against a stranger, and he shall recover all the damages because that he is chargeable over.” The authority given for this is the Y. B. 21 H. VII. 14 b. pi. 23., an action of replevin. There Fineux, J., says : “ In this case the bailee has a property in the thing against a stranger for he is chargeable to the bailor, and for the same reason he shall recover against a stranger who takes the goods out of his possession.” One possible explanation of the passage just cited from Heydon and Smith's case might be that the bailee who receives damages beyond what his interest in the bailment entitles him to retain is held liable to account to his bailor on the principle enunciated in Moses v. Macferlan 4 and to j)ay over the money as money had and received to the use of the bailor. But this meaning is excluded by a subsequent passage : “ Without question he [the bailee] shall have an action of trespass Quare clausum fregit for the entry of the lessor, and for the cutting of the trees, but he shall not recover the value of the trees, because he is not chargeable over, but for the special loss which he hath, soil, for the loss of the pawnage [pannage] and of the shadow of the trees, &c.” 5 Grenville, 1 Taunt. 241. The law as to trover between tenants in common is con- sidered in Jacobs v. Seward, L. R. 5 H. L. 4G4 ; see 2 Kent Comm. 350, note ( 1111 " v ' miserabile depositum . 2 A voluntary deposit is such as arises from the mere consent and agreement of the parties. This distinction was of practical importance, because in cases of default in the care of voluntary deposits the action was only in simplum ; in the case of the miserabile depositum it was in duplum 3 whenever the depositary was guilty of any default. 4 The common law does not recognise this distinction. 5 The duties of the depositarius are : (1) To be answerable for dolus ; nam quia nulla utilitas ejus Duties of the versatur apud quern deponitur . 6 depositaries. (2) To return the deposit in as good condition as when he received it. He is not liable for deterioration caused by circumstances outside his control ; although the onus is on him to show that deterioration which has happened has been thus caused. 7 (3) To restore the deposit on demand with any fruits it may have borne whilst under his control. 8 (4) Not to use the deposit unless with the depositor’s special consent. 9 A deposit can only be of personal or movable property, and is in- Nature of a applicable to real or immovable property. 10 It is not necessary for the de P 0Slt - depositor’s title to be absolute ; a lawful possession will enable him to maintain his action. 11 1 Contracts re were divided by the Roman jurists into — (1) Mutuum ; (2) Commoda- tum ; (3) Pignus ; (4) Depositum. A loan for consumption was termed mutuum because ex meo tuum fit. Commodatum was a gratuitous loan ; if the lender stipulated for a compensation, the agreement changed its character and became one of letting and hiring. Pignus : pawn. What the nature of depositum was appears in the text. 2 If this division is to be regarded as other than partial it is necessary to include under it those deposits treated of by Pothier, Traite du Contrat de Depot, under his second article of ch. iv. Des depots judiciaires. Post, 752. 2 Inst. 4, 6, 17, 23 ; D. 16, 3, 18. Huber’s division is different : Pradectiones Juris Civilis, 3, 15, 11 ; so is that of Pothier, Traite du Contrat de Depot, 1. They divide deposit into simple and by stake-holder. Le sequestre est le depot qui est fait par deux deposants qui out des intercts differents, a la charge de rendre la chose a qui il sera jugii qu’elle devra Ure rendue. See Code Civil, arts. 1955-1963. 4 Story, Bailm. § 44, citing Pothier, Traite du Contrat de Depot, n. 75. Praetor ait : quod neque tumultus, neque incendii, neque ruince, neque naujragii causa depositum sit, in simplum, earum autem rerum quae supra comprehensce sunt, in ipsum in duplum . . . judicium daho : D. 16, 3, 1, § 1. 5 Jones, Bailm. 49. 6 D. 13, 6, 5, § 2. Diligentia in suis rebus is the test. Nisi tamen ad suum modum curam in deposito preestat, fraude non caret : nec enim salva fide minorem Us quam suis rebus diligentiam preestabit, D. 16, 3, 32. The English law does not follow the civil in this. If the depositor knows, or may be presumed to know, the general character of the depositary, the civil law rule is good ; but if the depositor does not know this, the depositary is bound to bestow ordinary care on the deposit, though he does not on his own goods, and such care is to be ascertained without reference to the character of the depositary. See The William, 6 C. Rob. (Adm.) 316, the case of a capture lost through neglect to take a pilot on board ; and post, 744. 7 D. 16, 3, 1, § 16 ; Code 4, 34, 11. 8 D. 22, 1, 38, § 10. 9 Si deposita pecunia is qui earn suscepit, usus est, non dubium est, etiam usuras debere preestare, Code 4, 34, 4. io Story, Bailm. § 51. 44 Armory v. Delamirie, 1 Sm. L. C. (11th ed.) 356. Ante, 735. T adman v. Henman, [1893] 2.Q. B. 168, is a decision which is “doubted ” ; 2 Sm. L. C. (11th ed.), 834. The possessor of land the title to which was in another, in distraining on his tenant, dis- trained the goods of a third person, who brought an action for the conversion. It was held that such third person was not estopped from denying the distrainor’s title, and 742 NEGLIGENCE IN LAW. [book V. Who may make a deposit. Old law as stated in Soulhcote’s case. Law as stated by Black- stone. Amount of care. A deposit may be made and received by all persons having con- tractual capacity. If an infant receives a deposit, he is bound to restore it on demand so long as it is in his possession or under his control ; not under the law of bailments, for, from want of capacity, no bailment ( stricto sensu) is made ; but because the infant, by detaining the deposit, does a wrongful act . 1 On general principles of law an infant may make a deposit ; yet if he does, difficult questions may arise whether he can recall the thing deposited, or whether in all circumstances the depositary is justified in surrendering it. Similar considerations apply with regard to other classes of people under disability. The old law of bailment as presented in SoutJicote’s case 2 was that the bare acceptance of goods to keep implies a promise to keep them safely, or, as Coke, C. J., says, “ to be kept and to be kept safe is all one,” and the bailee is answerable at his peril, for if he is robbed he has his remedy over by trespass or appeal. Blackstone 3 states the modern law : “ If a friend delivers any- thing to his friend to keep for him, the receiver is bound to restore it on demand : and it was formerly held that in the meantime he was answerable for any damage or loss it might sustain, whether by accident or otherwise ; unless he expressly undertook to keep it only with the same care as his own goods, and then he should not be answerable for theft or other accidents. But now the law seems to be settled, that such a general bailment will not charge the bailee with any loss, unless it happens by gross neglect, which is an evidence of fraud : 4 but if he undertakes specially to keep the goods safely and securely, he is bound to take the same care of them as a prudent man would take of his own.” The question of the amount of care which a prudent man would use in the custody of his own goods, we have seen , 5 is not to be determined therefore could recover as for a conversion of the goods distrained. There does not appear to be any necessary connection between the two propositions. Assuming the relevancy of the proposition that there was no estoppel, whose title was the third person to set up ? A right in herself to trespass, or a right in some one else who acquiesced in the possession of the distrainor ? See Catteris v. Cowpcr, 4 Taunt. 547. The law is clear. “ All the old law,” says Cockbum, C.J., in Asher v. Whitlock, L. R. 1 Q. B. 5, “ on the doctrine of disseisin was founded on the principle that the disseisor’s title was good against all but the disseisee,” and “ Possession is good title against all the world ” but the true owner. Lord Watson reiterates this in Mussammat Sundar v. Mussammat Parbati, L. R. 16 Ind. App. 193. “ Actual possession” gives, says Lord Blackburn, in Bristow v. Cormican, 3 App. Cas. 661, “ a title in itself.” This is subject to what is said in Doe dem. Carter v. Barnard, 13 Q. B. 945 ; but which is not applicable where the plaintiff sues for a conversion : Chambers v. Donaldson, 1 1 East, 65, see also note at 70. See further Sir Frederick Pollock on Possession, Introduction, § 5. Charles, J., seems to have been under the impression that rights of property are dependent on title, not on possession. The possessor is eo nomine clothed with all the rights of an owner against all but the true owner, and not as against his tenant merely. The civil law doctrines of possession are well given and discussed in Moyle, Just. Inst. Excursus 3 (2nd ed.), 334. Mr. Holmes’s 6th lecture is on Posses- sion, The Common Law, 206-246. See a curious story about disputed possession among the Locri, in Polybius, 12, 16. 1 Mills v. Oraham, 1 B. & P. (N. R.)140, 145; Turnery. Slallibrass, [1898] 1 Q. B. 59. Ante, 738. 2 Southcote' s case, 4 Co. Rep. 83 b, Cro. Eliz. 815. The transition from the law as expressed in Southcote’s case to the modern doctrine is treated more at length, post, 746. Kettle v. Bromsall, Willes (C. P.), 118. See Foster v. Essex Bank, 17 Mass. 479. 3 2 Comm. 452. i “ And if there be such a gross neglect, it is looked upon as an evidence of fraud ” : per Holt, C.J., Coggs v. Bernard, 1 Sin. L. C. (11th ed.), 181. 6 Ante, 730. The diligence required of a depositary in the Roman law is thus stated ; Nec enim salva fide minorem Us, quam suis rebus, diligentiam proestabit, D. 16, 3. 32. Nam quia nulla utilitas ejus versatur apud quern deponitur, merito dolus preestatur solus, nisi forte et merccs accessit ; tunc enim ( ut est et constitutum) etiam culpa exhibetur ; uutsi hoc ab initio convcnit, ut el culpam et periculum praistct is, penes quern deponitur : CIIAP. I. VARIOUS RELATIONS. 743 by any hard-and-fast rule, but must be the subject of an inference drawn by the jury in each individual case ; and is dependent on the nature and quality of the goods bailed, and the character and customs of the place where the bailment is effected. What would be gross negligence in the custody of a diamond bracelet might be very ex- ceptional care in the custody of a tin pot ; a ton of coals suggests a different standard from a heap of jewels, and a delicate microscope from an ordinary barometer . 1 A deposit of any of these articles obliges the depositary to exert care proportioned to its kind ; and in the case of any, if he is guilty of gross negligence — that is, the omission of that care which every man of common sense, how inattentive soever, takes of his own property 2 — he will be liable for injury or loss. The judge determines the law applicable and directs the jury what test they are to apply. The duty of the judge is to non-suit, a though the facts proved would constitute evidence in some circumstances, if there is not enough evidence in the particular circumstances to warrant the inference required — e.g., if there is evidence of slight negligence where ordinary negligence alone will raise the presumption, or if there is evidence of but ordinary negligence where less than gross negligence is not sufficient. The rule that a depositary is liable only for gross negligence has vtTmt “ gross been interpreted to mean gross negligence as manifested by a com- negligence ” parison with the way that he keeps his own goods. “ For if,” says m ® ans Wlth Holt, C.J., “ he keeps the goods bailed to him but as he keeps his own, a deposit, though he keeps his own but negligently, yet he is not chargeable for them, for the keeping them as he keeps his own, is an argument of his honesty.” 4 Sir William Jones , 5 Pothier , 6 Lord Mansfield , 7 and Chan- cellor Kent 8 adopt the same view. Nevertheless, it seems inconsistent with the modern authorities. The point was definitely raised in Booth Booth v . v. Wilson , 9 where A sent his horse for the night to B, who turned it Wilson. out after dark into his pasture-field adjoining to, and separated from, a field of C’s by a fence which C was bound to repair. The horse, from the bad state of the fence, fell from one field into the other, and was killed. After verdict for the plaintiff, a rule for a new trial was obtained on the ground that the defendant was a gratuitous bailee, and turned the horse into that pasture which his own cattle were in the constant habit of using. Lord Ellenborough said : 10 “ The plaintiff Lord Ellen- certainly was a gratuitous bailee, but, as such, he owes it to the owner borough’s D. 13, 6, 5, § 2. Among the Greeks the care of a deposit was a sacred trust, as is Pigment, shown by the story of Glaucus (Herod. 6, 86), whose punishment for even hi thought doubting about restoring a deposit was the failure of his family line. The Pythoness replied to an inquiry whether restoration might be withheld, that it was as bad to have tempted the god as it would have been to have done the deed. i Batson v. Donovan, 4 B. & Aid. 21. 2 Jones, Bailm. 118, ante, 38. 3 Moffattv. Bateman, L. R. 3 P. C. 115. Ante, 12, 131. 4 Coggs v. Bernard, 2 Lord Raym. 909, 1 Sm. L. C. (11th ed.), 173. “ As suppose,” says Holt, C.J., “ the bailee is an idle, careless, drunkard fellow, and comes home dnmk and leaves all his doors open, and by reason thereof the goods happen to be stolen and his own : yet he shall not be charged, because it is the bailor’s own folly to trust such an idle fellow ” : 2 Lord Raym. 914. On the other hand, if the bailee is preter- naturally sharp in his own affairs, yet in the matter of the bailment he slightly relaxes his vigilance, so that the deposit is lost, in Pothier’s opinion he is liable, for he is bound to the same kind of diligence which he uses in his own affairs : Pothier, Traite du Contrat de Depot, n. 27. 5 Bailm. 46. 6 Traite du Contrat de Depot, n. 27. 7 Gibbon v. Paynton, 4 Burr. 2300 : “ The latter [the bailee] is only obliged to keep the goods with as much diligence and caution as he would keep his own.” » 2 Comm. 563 ; also Lord Kenyon, Finucanev. Small, 1 Esp. (N. P.) 315. 9 1 B. & Aid. 59. to L.c. 81. VOL. II. H 744 NEGLIGENCE IN LAW. [book V. Doorman v. Jenlcins. Taunton, J.’s, judgment. Lord Sto well’s judgment in The William. Test applic- able. Tracy v. Wood. of the horse, not to put it into a dangerous pasture ; and if he did not exercise a proper degree of care he would be liable for any damage which the horse might sustain. Perhaps the horse might have been safe during the daylight, but here he turns it into a pasture to which it was unused after dark. That is a degree of negligence sufficient to render him liable.” Again, in Doorman v. Jenkins , 1 Lord Denman directed the jury 2 that it did not follow from the defendant’s having lost his own money at the same time as the plaintiff’s that he had taken such care of the plaintiff’s money as a reasonable man would ordinarily take of his own ; and that the fact relied on was no answer to the action, if they believed that the loss occurred from gross negligence. On motion for a new trial it was not contended that a gratuitous bailee, who keeps another person’s goods as carefully as his own, cannot be liable for the loss or be guilty of gross negligence ; all that was urged was that the plaintiff had not made out a primd facie case. In discharging the rule, Taunton, J., said : 3 “ The defendant receives money to be kept for the plaintiff. What care does he exercise ? He puts it, together with money of his own ( which I think perfectly immaterial), into the till of a public- house.” In The William , 11 the case of a justifiable capture, Lord Stowell treats the same subject. “ On questions of this kind,” said he , 4 “ there is one position sometimes advanced, which does not meet with my entire assent, namely, that captors are answerable only for such care as they would take of their own property. This, I think, is not a just criterion in such case ; for a man may, with respect to his own property, encounter risks, from views of particular advantage, or from a natural disposition of rashness, which would be entirely unjustifiable, in respect to the custody of goods of another person, which have come to his hands by an act of force. Where property is confided to the care of a particular person, by one who is, or may be supposed to be, acquainted with his character, the care which he would take of his own property might, indeed, be considered as a reasonable criterion.” A depositary’s conduct with his own goods may be reckless, and then, unless the person committing goods to his care is aware of the fact or negligently oblivious of it, he can require a greater degree of care for his goods than the bailee bestows on his own. The test in general is not what any particular man does, but what men as a class do with similar property as a class. This is the rule laid down in Tracy v. Wood : 5 “ The true way of considering cases of this nature is, to consider whether the party has omitted that care which bailees without hire or mandataries of ordinary prudence usually take of property of this nature. If he has, then it 1 2 A. & E. 25G ; Cp. Wilkinson v. Coverdcde, 1 Esp. (N. P.) 74, decided by Lord Kenyon on the authority of a MS. note of Mr. Justice Buller in Wallace v. Tclljair ; Beauchamp v. Powley, 1 Moo. & R. 38. 2 2 A. & E. 258. 3 L.c. 2G1. 4 6 Ch. Rob. (Adm.) 31G. Ante, 741, n. B . s 3 Mason (U. S.) 135. See Palin v. Reid, 10 Ont. App. G3, where a guest at an inn, when leaving, and after paying his bill, asked to be allowed to leave a box in the room of the inn used for storing luggage, intending to fetch it the following day. He was prevented, by illness, from fetching it then, and when able to, it was lost. It was held there must be proof of actual negligence, as the innkeeper was merely a gratuitous bailee. Eldridye v. Hill, 07 U. S. (7 Otto) 92, is an authority for the extent of responsibility of a gratuitous bailee of money for paying over the same to a third person in respect of the recovery of property, which on being handed over to the owner is found in a damaged condition. VARIOUS RELATIONS. 745 CHAP. T.] constitutes a case of gross negligence. The question is not whether lie has omitted that care, which very prudent persons usually take of their own property, for the omission of that would be but slight negligence ; nor whether he has omitted that care which prudent persons ordinarily take of their own property, for that would be but ordinary negligence. But whether there be a want of that care, which men of common sense, however inattentive, usually take, or ought to be presumed to take of their property, for that is gross negligence. The contract of bailees without reward is not merely for good faith, but for such care as persons of common prudence in their situation usually bestow upon such property. If they omit such care, it is gross negligence.” 1 We have here, then, a most authoritative state- ment — for it is Judge Story who speaks— that reference is to be made, not to the conduct of any particular man to fix a standard of care or negligence, but to the average to be expected from the generality of men. In this connection Pothier gives an example that may be repro- duced . 2 Depositary’s house is on fire. He removes his own goods, leaving those of the bailor to be burnt. If he had time to remove the burned goods, he is certainly liable. If he had not, Pothier thinks a breach of faith cannot be imputed to him for having saved his own goods in preference to his bailor’s. If, however, the goods bailed were greatly more valuable than his own, and as easily to be got away, then he ought to rescue them and look to an average indemnity for the loss of his own. To the principle that a depositary is answerable only for gross negligence, Sir William Jones 3 enumerates four exceptions ; of which two only are strictly exceptions, the others being concerned with cases which are not properly deposit. First : A depositary is answerable for a different degree of care where he makes a special agreement. In so far as this is an assertion of the right of two people to attach incidents to a contract entered into by them, varying those implied by law, it requires no particular notice . 4 Sir William Jones , 5 however, instances Southcote’s case as an illustration of the bailee by special agreement engaging to exert a greater care than ordinary. Southcote’s case 6 asserts that, upon a general bailment to keep safely, the bailee is responsible for a loss occasioned by theft, whether the theft was by his servants or by others. The report adds : “ Nolo, reader, it is good policy for him who takes any goods to keep, to take them in special manner, scil, to keep them as he keeps his own goods, or to keep them the best he can at the peril of the party ; or if they happen to be stolen or purloined, that he shall not be answerable for them ; for he who accepteth them, ought to take them in such or the like manner, or otherwise he may be charged by his general acceptance.” About the same time Sir Edward Coke states the law 7 to be that the 1 See Batson v. Donovan, 4 B. & Aid. 21 ; Duff v. Budd, 3 B. & B. 177. 2 Traite du Contrat de Depot, n. 29. 3 Bailm. 47-50. Sed is apud quern res deposita est custodiam non prceslat, tan- tumque in eo obnoxius est, si quid ipse dolo fecerit : Gaius, 3, § 207. 4 This is still, with exceptions which multiply almost yearly, the law of England, ante, 725, and always was the rule of the civil law. Si quid nominatim convenit, vet plus, vel minus, in singulis contractibus : n am hoc servabitur, quod initio convenit : legem enim contractus dedit : D. 50, 17, 23. 5 Bailm. 41. 6 (1601) 4 Co. Rep. 83 b, 1 Cro. Eliz. 815. 7 Co. Litt. 89 a. The first edition of Coke upon Littleton was published in 1628. Southcote’s case was decided in 1601. Hargrave’s note on the passage cited is : “ This The standard of care is the average to be expected from the generality of men. Pothier’s case of bailee saving his own goods in preference to those of the bailor. Four excep- tions to depositary’s responsibility. First excep- tion : Where there is a special agree- ment. Two points raised in Southcole’s case. First, over- ruled by Coggs v. Bernard. Sir William Jones approves. Mr. Holmes’s contrary assertions. 740 NEGLIGENCE IN LAW. [book v. engagement of the bailee is to keep safely, “ and therefore he must keep them at his peril. So it is if goods be delivered to one to be kept, for to be kept and to be safely kept is all one in law.” His conclusion is that, if goods are to be safely kept, and afterwards are stolen, the bailee shall not be excused ; since by accepting the goods he undertook to keep them safely, to which obligation he must be held. If, however, the goods are delivered to him to keep as he would keep his own, then, if they are stolen without his default or negligence, he shall be discharged. 1 In Southcole’s case two main principles appear to have been insisted on. (1) That between the duty to keep and to keep safely there is no difference. 2 This was held not law by Holt, C.J., and the other judges of the Queen’s Bench, in Coggs v. Bernard , 3 who distinguishes between bailees for reward and other bailees whose liability had up till then been identical, and who were alike bound absolutely to answer for the bailment. Sir William Jones 4 quotes Sir Edward Coke : “ The reason of the j udgment was because the . plaintiff had delivered the goods to be safely kept, and the defendant had taken the charge of them upon himself, by accepting them on such a delivery ” ; and comments : “ Had the reporter stopped here, I do not see what possible objection could have been made ; but his exuberant erudition boiled over, and produced the frothy conceit which has occasioned so many reflections on the case itself ; namely, ‘ that to keep and to keep safely are one and the same thing,’ a notion which was denied to be law by the whole Court in the time of Holt, C.J.” 5 Mr. Holmes on this says : 6 “ The attempts of Lord Holt, in Coggs v. Bernard, and of Sir William Jones, in his book on Bailments, to show that Southcote v. Bennet was not sustained by authority were futile, as any one who will study the Year Books for himself may see. The same principle was laid down seven years before by Peryam, C.B., in Drake v. Royman , 7 and Southcote' s case was followed as a leading precedent doctrine was denied by the Court in the great case of Coggs and Barnard ; and it is now understood, that the acceptance of goods to be kept generally is merely an undertaking to keep them as the party receiving keeps his own : 2 Ld. Raym. 911.” 1 Cp. 2 Bl. Comm. 452 ; Armfield v. Mercer, 2 Times L. R. 764. 2 Cp. per Lord Halsbury, C., East Indian Ry. Co. v. Halidas Mukerjee, [1901] A. C. 402. 3 (1703) 2 Ld. Raym. 909, 910, 911, 914, 915. The King v. Viscount Hertford, 2 Show. (K.B.) 172. Brooke, Abr. Bailm. 7. Y. B. 21 Hen. VII. 29. 4. i Bailm. 42. 6 Ld. Raym 911 margin. See an article, “ Carriers’ Liability,” Harvard L.R. vol. xi., 158, also see vol. xiii., 43. 6 The Common Law, 179. 7 Savile, 133, where, the C.J.’s words are given : “ Mes autre.me.nt si jeo suffer un home de mitter ses hiens en mon mcison lou jeo inhabit et jeo sais conversant ct de quel jeo ay le cliff e ; then there is a liability. It is manifest that the sense of this passage is dependent on the word conversant : dwelling habitually in the house ” ; if this means that I am liable if I lose goods which I have under my eye, there is negligence, and the inference from the passage is contrary to the meaning for which it is vouched. What- ever the meaning, an unqualified liability is certainly not asserted. A passage or two from the Year Books may be subjoined which do not appear in accord with M r. Holmes’s suggestion. Cotesmore, J. says : “ Si jeo grante byens a un home a gardcr a mon oeps, si les byens per son mesgarde sont embles, il sera charge a moy de mesmes les byens, mes s' it soit robbe de mesme les byens, il est excusable per le ley ” : 10H. VI. 21, pi. 69. Ifthclaw was as claimed by Mr. Holmes, why “ per son mesgarde," for the defendant was liable over absolutely. In 40 Edw. III. f. 6, pi. 11, counsel arguing says : “ Si jeo vous accrois ou prist un chival et il'morge sodeinement, et nemy par voster default vous ne ferres charge de luy render le chival mort and in 29 Ass. 28 : “ Thorp dit, qui si un a moy bail ses biens a gard, et jeo les mi tire enter les mains, et ceux soient emblt’es jeo ne ferre pas VARIOUS RELATIONS. 717 CHAP. I.] ivithout question for a hundred years.” Instead of contenting himself with these generalities Mr. Holmes would have done well to grapple at least with this passage from Holt, C.J.’s, judgment in Coggs v. Holt, C.J.’s, Bernard : 1 “ It is incumbent upon them, that advance this doctrine, '^ t ^“ cnt of [that to keep and to keep safely are one] to show an undisturbed rule and practice of the law according to this position. But to show that the tenor of the law was always otherwise, I shall give a history of the authorities in the books in this matter, and by them show that there never was any such resolution given before Southcote’s case. The 29 Ass. 28 2 is the first case in the books upon that learning, and there the opinion is, that the bailee is not chargeable, if the goods are stole. As for 8 Edw. II. Fitz. Detinue, 59, where goods were locked in a chest and left with the bailee, and the owner took away the key, and the goods were stolen, and it was held that the bailee should not answer for the goods. That case, they say, differs because the bailor did not trust the bailee with them. But I cannot see the reason of that difference, nor why the bailee should not be charged with goods in a chest, as well as with goods out of a chest. For the bailee has as little power over them, when they are out of a chest, as to any benefit he might have by them, as when they are in a chest ; and he has as great power to defend them in one case as in the other. The case of 9 Ediv. IV. 40 b, was but a debate at bar. For Danby was but a counsel then, though he had been Chief Justice in the beginning of Edw. IV., yet he was removed and restored again upon the restitution of Hen. VI. as appears by Dugdale’s Chronica Series. So that what he said cannot be taken to be any authority, for he spoke only for his client ; and Genny for his client said the contrary. The case in 3 Hen. VII. 4 (pi. 16), is but a sudden opinion, and that by half the Court ; and yet that is the only ground for this opinion of my Lord Coke, which besides he has im- proved. But the practice has been always at Guildhall to disallow that to be sufficient evidence to charge the bailee. And it was practised so before my time, all Chief Justice Pemberton’s time, 3 and ever since, against the opinion of that case.” If Mr. Holmes’s theory is assumed to be correct, the cases in the Presumption Year Books may possibly, though sometimes with great difficulty, be ^oime^s^’ made to accord. But to one in search of a theory the law seems more view> or less indeterminate till Soutlicote’s case, and after that Holt, C.J.’s, 4 j udgment in Coggs v. Bernard throws the onus very heavily on those charge." As to Mr. Holmes’s last assertion, in Doctor and Student, published 1518, 1 find the law thus stated : “ If a man have goods to keep to a certain day, for a certain recompence for the keeping, he shall stand charged or not charged after as a default or not default shall be in him, as before appeareth : and so it is if he have nothing for the keeping. But if he have for the keeping, and make a promise for the time of the delivery, to re-deliver them safe at his peril, then he shall be charged with all the chances that may fall. But if he make that promise, and have nothing for keeping, I think he is bound to no such casualties but that be wilful and his own default, for that is a nude or naked promise, whereupon, as I suppose, no action lieth.” Anew edition of Doctor and Student was published in 1687, whence the above extract is taken, 269, and there is no note whatever appended. 1 Lord Raym. 913. 2 Jones, Bailm. 78, where the case is summarised. Cp. Y. B. 10 H. VI, 21, pi. 69. This is the distinction of the Roman law : Adversus latrones parurn prodest custodiu ; adversus fur cm prodesse potest, si quis advigilet : an annotation to D. 17, 2, 52, 3. 3 1681 a.d. Southcote’s case was decided in 43 Eliz. Thus, eighty years after, if Holt, C.J., is credited, there was a firmly established practice contrary to the decision. In Sheppard’s Abridgment (1675) Bailm. (3) the law is stated in the terms of Southcole's case. But see the quotation from Doctor and Student in note 7, ante, 746. 4 Holt, C.J., cites Bracton 3, 2, 99, to the same effect. Second, confirmed. Sir William Jones’s view. The view approved hy authority. 748 NEGLIGENCE IN LAW. [book v. maintaining a contrary opinion; and this Mr. Holmes 1 is far from discharging. (2) The second principle affirmed in Southcote’s case and in respect of which that case must be specially noticed, is that, in accepting goods to be kept as the bailee would keep his own proper goods, if the goods are stolen, the bailee shall not answer. 2 “ Robbery by force,” says Sir William Jones, 3 “ is considered as irresistible; but a loss by private stealth is presumptive evidence of ordinary neglect.” This is undoubtedly the doctrine of the civil law, 4 but the common law has not followed the rule, 5 and does not view theft in any exceptional light, neither imputing it to the neglect of the bailee, nor yet exempting him from responsibility on that ground alone. Each case must be “ clothed in circumstance,” and on that the law decides whether there has or has not been the required degree of care. 6 For example, a man has valuable property, deposited with him, stolen through leaving an open door or window. There is presumptive evidence of negligence. The theft is, however, by a pre- sumably responsible servant availing himself of facilities special to a servant. This is not presumptive evidence of negligence against him, for the theft is the wilful act of the servant, defeating his master’s interest. 7 Still, if the master can be shown to have engaged a servant without taking proper precautions to secure an honest one, the pre- sumption of negligence is raised ; if, for example, he has hired a servant out of prison on ticket-of-leave to have the charge of goods, there was opportunity and temptation to steal. In the case of a bailee again, who has lost goods by theft, and who fails to give any such explanation of his neglect to restore the property entrusted to him as enables the bailor to test his good faith, or satisfies him of it, the onus lies on him of showing that lie has exercised ordinary diligence. If, however, the case has come before a jury, and they have found, as an inference from the facts, that there has been a theft of the bailment, the finding will exculpate the bailee, unless they find further that he has not exercised ordinary care. 8 1 Mr. Holmes terms Mosley v. Fosset, Moore, 543, “ an obscurely reported ease,” for no other reason that is obvious than that it is in antagonism to his theory. 2 Cp. Bonion’s case, Y. B. 8 E. II. 275 ; Fitzh. Abr. Detinue, 51) ; jewels in a chest were deposited, the depositor keeping the key and not informing the depositary of the contents. The depositary’s house being broken into and the chest stolen, an attempt was made to charge the bailee ; but he was held not liable, since he used ordinary diligence and the loss was by a burglary. 3 Bailm. 119. See also 43, and note 1C to Theobald’s edition. 4 Si res vendila per furtum perierit, prius animadvertendum erit quid inter cos dc custodia rei convenerat. Si nihil apparent convenisse, talis custodia desideranda est a vendilore qualem bonus paterfamilias suis rebus adhibet ; quam si prcestitcrit et tumcn rem perdidit, securus esse debet ut lamen scilicet vindicationem rei et conditionem exhibeat emptori : D. 18, 1,35, § 4. Quod si neque iradili assent, neque emptor in morn fuisset, quominus traderentur : vendiloris periculum erit. Materia ernpla si furto perisset, postquam tradita asset, emptoris esse pcricido •' D. 18,(5, 14, § I. Sec further Moyle, Contract of Sale, Periculum et Cornmodum rei, 76. In the case of the theft of a deposit, the depositarius was not liable, not because he was not negligent, but “ quia, qui negliqenti arnico rem custodiendam tradit, mte facilitate id imputare debet ” : Inst. 3, 14, 3. But this, unless exceptionally, is as noted above, not the English law. Ante, 743. 5 Finucane v. Small, 1 Esp. (N. P.) 315. 6 Story, Bailm. § 27 et seqq., 333-338 ; Jones, Bailm. 44 et seqq. ; Fere v. Smith, 1 Ventr. 121. See Clarice, v. Earnshaw, Gow (N.P.C.) 30, in a note to which the cases are considered ; also, 1 Bell. Comm. (7th ed.) 499. The robbery by burglars of securi- ties deposited for safe keeping in the vaults of a bank is no proof of negligence on the part of the bank : Wylie v. Northampton Bank, 119 U. S. (12 Davis) 361. 7 Schmidt v. Blood, 9 Wend. (N. Y.) 268. s Woodru ff v. Painter, 150 Pa. St. 91. 30 Am. St. B. 780, CHAP. I.] VARIOUS RELATIONS. 749 Where, then, a man accepts goods to keep as his own, he is not where a man thereby made responsible for losses by theft. The modern law bases accepts goods this principle, not upon a doctrine applicable to the general law of o^iihe is not deposit, but on a special undertaking. The distinction, says Story, 1 thereby made may become of importance where the bailee is notoriously very careless responsible and indifferent about his own affairs, in which case the depositor may t ^f t I ’ hCf ’ >y fairly be presumed to know his habits and to trust to such care as the Ground of bailee takes of his own goods. If the goods are to be kept in a particular this, place, the depositor is not admitted to object that the place is not a safe one, since his assent amounts to a special agreement with reference to the place of their deposit. In the case of robbery, there was some vacillation as to the liability Robbery, of the bailee. 2 Thus, in Y. B. 9 Ed. IV., 3 Danby says : “ If a bailee receives goods to keep as his proper goods, then robbery shall excuse him, otherwise not ” ; though, as Holt, C.J., points out, this was said at the bar in argument. In Y. B. 10 H. VII., 4 robbery is not allowed to be an excuse. But in Walker v. British Guarantee Association , 5 the bailee was held discharged on showing that the bailment, in that case “ specific ear-marked moneys,” was taken from him by robbery or vis major — “ which we translate irresistible violence.” In the case of an ordinary theft the bailee was unquestionably Theft, liable to answer for goods stolen. “ If the goods are taken by a tres- passer, of whom the bailee has conusance, he shall be chargeable to his bailor, and shall have his action over against his trespasser.” 6 The question next arises whether a depositary is responsible for the How far a loss of articles contained in a box, the contents of which are unknown to depositary is him. 7 This was a keenly debated question amongst the Roman for^he loss of lawyers. 8 Ulpian concluded that, although the box was sealed up, yet articles con- an action may be brought for its contents. In Southcote's case , 9 it is lametl 111 a said : “ If A delivers to B a chest locked to keep, and he himself w hose con- carries away the key, in that case if the goods are stolen, B shall not tents are be charged, for A did not trust B with them, nor did B undertake to keep them.” This refers to Bonion's case. 10 Holt, C.J., in Coggs ° um ‘ v. Bernard , n denies that the chest makes any difference ; though the older authorities are said to agree that there is no delivery if the goods are under lock and key. 12 Sir William Jones 13 expresses the opinion that, “ Cases may be put in which the difference may be very material to the defence. 1 Bailm. §§ 65, 66, 73. 2 Y. B. 33 H. VI., 1, pi. 3. Y. B. 6 H. VII. 11, pi. 9 at 12. See the law discussed in Bentley v. Vilmont, 12 App. Cas. 471 ; see also The Larceny Act, 1861 (24 & 25 Viet, c. 96), s. 100 ; and ante, 730, n 6. In re George and the Goldsmith's and General Burglary Insurance Association, [1899] 1 Q. B. 595. 3 Y. B. 9 E. IV. 40, pi. 22 : “ S'il eux receiver pur gard sicome il yard ses propres liens, donques il excusera, ou outerment nemy." See per Holt, C.J., Coggs v. Bernard, 2 Ld. Raym. 914. Yet even an argument from counsel of such position (Danby had been Chief J ustice) goes to show that at best the law was not established in the contrary dense. 4 Y. B. 10 H. VII. 25, pi. 3 at 26. s 18 Q. B. 277. 6 Y. B. 3 H. VII. 4, pi. 16, referred to at the end of the report in the preceding case. 7 Story, Bailm. § 75. 8 D. 16, 3, 1, § 41. In Jones, Bailments, 38, there is a summary of the controversy. 9 4 Co. Rep. 83, 84 a. io Y. B. 8 E. II. 275. 11 2 Ld. Raym. 914 : “ I cannot see the reason of that difference, nor why the bailee should not be charged with goods in a chest, as well as with goods out of a chest. For the bailee has as little power over them when they are out of a chest as to any benefit he might have by them, as when they are in a chest ; and he has as great power to defend them in one case as in the other.” 12 Holmes, The Common Law, 176. '3 Bailm. 38. Story’s 1 Propositions. Second excep- tion : Where one solicits the custody of goods. 750 NEGLIGENCE IN LAW. [book v. Diamonds, gold and precious trinkets, ought, from their nature, to be kept with peculiar care under lock and key ; it would, therefore, be gross negligence in a depositary to leave such a deposit in an open anti- chamber, and ordinary neglect at least, to let them remain on his table, where they might possibly tempt his servants ; but no man can pro- portion his care to the nature of things without knowing them ; perhaps, therefore, it would be no more than slight negligence to leave out of a drawer a box or casket, which was neither known nor could justly be suspected to contain diamonds.” In our law, Story, 1 says, the cpiestion admits of different deter- minations according to circumstances. The minimum of the deposi- tary’s responsibility goes “ at least to the extent of what he might fairly presume to be the value of the contents.” 2 Story concludes that : (1) If the bailee knows that the box or casket contains jewels, although the bailor takes away the key, he is bound to a degree of diligence proportioned to the preciousness of the contents. 3 (2) If he has no ground to suppose that the box or casket contains valuables, he is bound only to such reasonable care as is required of depositaries in cases of articles of common value. 3 (3) If there be meditated concealment of the contents of the box or casket from the bailee with a view to induce him to receive the bailment, and he would not have received it or have exposed it if he had been made acquainted with the facts, then the transaction will be deemed either a fraud on him or the loss will be set down to the bailor’s own folly. 4 The special agreement that the depositary makes may either narrow or enlarge his general responsibility ; subject to the exception that an agreement not to take exception to fraud is void as being contrary to good morals and decency. 5 Second : Sir William Jones’s second exception is that when a man spontaneously and officiously proposes to keep the goods of another he may prevent the owner from entrusting them to a person of more approved vigilance ; for which reason he takes upon himself the risk of the deposit, and becomes responsible at least for ordinary neglect, though not for mere casualties. 6 For this, says Story, 7 the writer does not cite any other authority than the Roman law. “ The ride is certainly strictissimi juris ; and the incorporation into our law ought 1 §77. 2 Cp. Abrahams v. Bullock, 18 Times L. R. 701 ; Cheshire v. Bailey, [1005] 1 K. B. 237. The distinction is between a lack of the amount of care bargained for and a felony done to the detriment of both bailor and bailee. 3 Jones, Bailm. 38, 30 ; Coggs v. Bernard, 2 Ld. Raym. 000, 014, 015. 4 Batson v. Donovan, 4 B. & Aid. 21 ; Bleat v. Fagg, 5 B. & Aid. 342. See The Queen v. Ashwell, 16 Q. B. D., per Cave, J., 203 ; and The Queen v. Flowers, 10 Q. B. D. 043. a Jones, Bailm. 48, citing Doctor and Student, dial. 2, c. 38. Non valcrc, si con- venerit, ne dolus prceslctur : Dig. 50, 17, 23. 6 This is undoubtedly the rule of the civil law: Dig. 10, 3, 1, § 35; 1 Domat, Bk. 1, tit. 7, § 3, art. 8; Pothier, Traite du Contrat do Depot, n. 30, 31, 32. (Sir William Jones’s four exceptions now being noted are derived from this passage of Pothier). The Code Civil, arts. 1027, 1028, provides that the depositary must employ on the thing deposited the same care which he employs in the preservation of his own property. This rule is to be more rigorously applied : (1) If the depositary has volunteered to receive the deposit, (2) If he has contracted for payment of (lie custody of it. (3) If the deposit was made solely for the depositary’s benefit. (4) If there is an agreement that the depositary is to bo at the risk of mishaps. 7 Bailm. §81. VARIOUS RELATIONS. 751 CHAP. I.] not readily to be admitted. A voluntary offer of kindness to a friend, even when importunately urged, ought hardly to carry with it such penal consequences ; since it is generally the result of strong affection, and a desire to oblige, and often of a sense of duty, especially in cases of imminent peril or sudden emergency.” 1 Third : The third exception is, when the bailee either directly Third excep- demands and receives a reward for his care or takes the charge of goods .Where in consequence of some lucrative contract . 2 But the presence of rewar( j. either of these incidents changes the nature of the bailment from a gratuitous deposit, into one in which the depositary is held to ordinary care and is answerable for ordinary neglect. Fourth : The fourth exception is where the bailee alone receives Fourth excep- advantage from the deposit. Sir William Jones designates this as ^° e n b : e nefit is “ rather a loan than a deposit,” and adds : “ such a depositary must the bailee’s answer even for slight negligence.” 3 alone. The right of a finder of property must not pass unnoticed. As to Where one this, in Bacon’s Abridgment it is said : “ If a man finds goods and tillds abuse them, or if he find sheep and kill them, this, is a conversion; S, '* • ■ but if a man find butter, and by his negligent keeping it putrefy ; or it Bacon’s a man find garments, and by negligent keeping they be moth-eaten, no Abridgment, action lies ; so it is if a man find goods and lose them again ; and the reason of the difference is this : where a man delivers goods to another, the bailee by acceptance of the goods undertakes for the safe custody of them, and it is to be presumed that the owner would not have parted with them but under confidence of that security ; but where a man only finds the goods of another, the owner did not part with them under the caution of any trust or engagement, nor did the finder receive them into his possession under any obligation ; and therefore the law only prohibits a man in this case from making an unjust profit of what is another’s ; but the finder is not obliged to preserve those goods safer than the owner himself did ; for there is no reason for the law to lay such a duty on the finder in behalf of the careless owner, and it seems too rigorous to extend the charity of the finder beyond the diligence of the proprietor ; it is, therefore, a good mean to punish an injurious act, viz., the conversion of the goods to his own use, but not to punish a negligence in him, when the owner is guilty of a much greater one.” 4 This doctrine Story 5 criticises as “ very unsatisfactory,” and cites Criticised by the opinion of Coke, C. J , in Isaack v. Clark : 6 “ If a man finds goods, stor y- an action on the case lieth for his ill and negligent keeping of them, but no trover and conversion, because this is but a nonfeasance ” ; Clark. whose doctrine he approves. It is, moreover, in consonance with what is said in Doctor and Student : 7 “ If a man finds goods of another, Doctor and i Story, Bailm. § 82. Under this heading, Sir William Jones discusses the case of ’^Wdcnt. things deposited through necessity on any sudden emergency, as a fire or a shipwreck “.I can hardly persuade myself,” he says (Bailm. 49), “ that more than perfect good faith is demanded in this case.” Ante, 741. For the liability of a negotiorum gestor, see post, 768. 2 Bailm. 49. 3 Bailm. 50. * Bac. Abr. Bailm. (D) 517. In Mosgrave v. Agden, Owen 141, the Court of Common Pleas held, in an action for the conversion of six barrels of butter, that an action would not lie ; “ for he who finds goods is not bound to preserve them from putre- faction.” If, however, “ the goods were used, and by usage made worse, the action would lie.” gC s Bailm. § 86. 6 2 Bulst. 312. 7 Dial. 2, c. 38. In Hollins v. Fowler, L. R. 7 H. L. 766, Blackburn, J., citing Isaack v. Clark, says that a refusal to deliver goods by a person who, having a bona fide doubt as to the title, detains them for a reasonable time for clearing up that doubt, is Story’s conclusion. N icholson v. Chapman. 752 NEGLIGENCE IN LAW. [book v. il they be after hurt or lost by wilful negligence, he shall be charged to the owner. But if they be lost by other casualty, as if they be laid in a house that by chance is burned, or if he deliver them to another to keep, that runneth away with them, I think he be discharged.” Chancellor Kent 1 considered that the same reasonable care is required in the case of goods coming to one’s possession by finding as in the case of a gratuitous deposit, and coincides in opinion with Story, who says : 2 “ There seems no just foundation in our law for any dis- tinction as to responsibility, although there may be as to remedy, between cases of conversion and misfeasance by the finder of goods and cases of negligence, if the loss has arisen from that degree of negligence for which gratuitous bailees would ordinarily be liable.” The same very learned writer is of opinion that the finder may charge the owner for necessary expense and labour in the care of what is found, which he terms salvage ; 3 yet this has never been expressly decided. The nearest case in our reports is that of Nicholson v. Chap- man* where some timber belonging to the plaintiff was placed in a dock on the bank of a navigable river, and, being accidentally loosened was carried some considerable distance by the tide, and left on a tow- not a conversion. A demand and refusal is evidence of a conversion : Fuuldcs v. Willoughby, 8 M. & W. 540 ; but not when qualified by a demand to deliver “ in the same good plight ” as when received : Rushworth v. Taylor, 3 Q. B. 099. Cp. Scaller- good v. Sylvester, 15 Q. B. 506, and Walker v. Matthews, 8 Q. B. 1 ). 10!), on the revesting of stolen property under 24 & 25 Viet. c. 90, s. 100 ; Winter v. Bancks, 17 Times L. R. 440. See Merry v. Green, 7 M. & W. 023, for circumstances where a finding may amount to larceny : the case of discovering a purse in a secret drawer of a bureau purchased at a public auction. Cp. Regina v. Thurborn, 1 Den. C. C. 387 ; 1 Whart. Crim. Law, §§ 901 913, and ante, 749 n. 2 . As to lost property and the rights of a finder, Bridges v. Uawkesworlh, 21 L. J. Q. B. 75 ; Dcadcrick v. Oulds, 0 Am. St. R. 812. In Massachusetts it has been held that “ a stranger in a shop who first sees a pocket-book which has been accidentally left by another upon a table there, is authorised to take and hold possession of it, as against the shopkeeper ” : McAvoy v. Medina, 93 -Mass. 548. Webb v. Fox, 7 T. R. 391 ; Giles v. Grover, 9 Bing. 128, 0 Bligh, N. S. 277, 1 Cl. & F. 72. The common law has been trenched upon in London by 2 & 3 Viet. c. 71, s. 29. King v. Milsom, 2 Camp. 5, states the rule as to negotiable instruments, and that the onus is on defendant alleging that the note sued on is his property ; and see Lawson v. Weston, 4 Esp. (N. P.) 56, 2 Kent, Comm. 356-357 note (a), as to finder of a chose in action, e.g., a cheque. Si preedo vel fur deposuerint, et hos Marcellus libro sexto digeslorum putat recte depositi acturos : nam interest eorurn, eo quod teneantur : D. 10, 3, 1 , § 39. The Roman law is curious. The maxim of possession is. Non est enim cor pore et actu necesse apprehendere possessionem sed etiam oculis et affect a : 1). 41, 2, 1, § 21 ; and this law as to a finder is illustrated by two passages of Latin poetry. In the Rudens of Plautus, Trachalion claims a share in a vidulum — a portmanteau — which Gripus, who has been fishing, has fished up and brought to land. Trachalion. Non probare pernegando mihi potes, nisi pars dalur Aut ad arbilrium redditur, aut sequeslro ponitur. Gripus. Quemne ego excepi in mare ? Tr. At ego inspectavi e lilore. Act 4, sc. '3, 60. Then the pair discuss the law. The second passage is from Phoedrus’s Fables, a bald man finds a comb, another sees him find it. Invenit calvus in trivio pectinem Accessit alter ceque defectus pilis. Eia, inquit, in commune quodcunquc est lucri. Fab. 5, 6. The American authorities are collected in Sovern v. I oran, 8 Am. St. R. 293, and the note. i 2 Comm. 568. 2 Bailm. § 87. 3 Bailm. § 121 a, 4 2 H. Bl. 254; Sutton v. Buck, 2 Taunt. 302. In Hingston v. Wendt, 1 Q. B. I). 307, there was a putting of the plaintiff in possession by the captain. Eyre, C.J.’s, distinction between the saving of flic goods by the plaintiff, in Nicholson v. Chapman, and salvage, is adopted by Lord Blackburn in Aitchison v. Lohrc, 4 App. Gas. 755 , 700 ; see also 2 Kent, Comm. 030. VARIOUS RELATIONS. 753 C1IAP. I. path at low water. Here it was found by the defendant, who volun- tarily took it to a safe place out of reach of the tide. When the plaintiff afterwards demanded the timber the defendant refused to give it up without payment for what had been done. In an action of trover the defendant was held not to have any lien. Eyre, C.J., considered that he might recover for his trouble and expense in some other form of action. There is a note to the report : “ It seems probable that in such a case, if any action could be maintained, it would be an action of assumpsit for work and labour, in which the Court would imply a special instance and request as well as a promise. On a quantum meruit the reasonable extent of the recompense would come properly before the jury .” 1 If the loser of a chattel offer a reward for its restoration, a lien is thereby created to the extent of the reward . 2 This seems a convenient place to notice a case of Howard v. Harris , 2 Howard v. tried before Watkin Williams, J., and which, as reported, seems tlarris. irreconcilable with principle. The defendant, the manager of Drury Lane Theatre, received a letter from the plaintiff, stating that he had written a play, which he asked the defendant to assist him to produce. The defendant replied that if the plaintiff would send him the scene, plot, and sketch of the play he would look through it. Accordingly, the plaintiff sent the scene, plot, and sketch, and also the play. The plaintiff made numerous applications with reference to the play from time to time, and at last demanded its return ; but it was not returned, as it could not be found. An action for the return of the play was then brought. The report goes on as follows : “ Williams, J., held that there was no case to go to the jury, for the plaintiff had chosen volun- tarily to send to the defendant what the defendant had never asked for, and no duty of any sort or kind was cast upon the defendant with regard to what was so sent.” This result is surprising. As soon as the defendant received the Criticised ; deposit he became amenable to the rules of law regulating deposit ; ro P ortet U he was bound to slight diligence ; he became liable for gross negligence. He might have avoided liability by a refusal to accept, by absolutely 1 See Baker v. Hoag, 3 Barb. (N. Y.) 203, 7 Barb. (N. Y.) 113. In the American case of Bartholomew v. Jackson, 20 Johns. (Sup. Ct. N. Y.) 28, the point was raised. The action was on an assumpsit. J. owned a wheat stubble field in which B. had a stack of wheat, which he promised to remove in time to prepare the ground for the full crop. When the time for removal came, J. sent a message to B. requesting the immediate removal of the stack. The sons of B. said it should be removed by ten o’clock the next morning. At that hour J. set fire to the stubble. The fire threatening to burn the stack, which B. and his sons neglected to remove, J. set to work and removed it himself so as to secure it for B. The Court held J. not entitled to recover for the work and labour in its removal. “ If,” said the Court, “ a man humanely bestows his labour, and even risks his life, in voluntarily aiding to preserve his neighbour’s house from destruction by fire, the law considers the service rendered as gratuitous, and it therefore forms no ground of action.” In the argument in Falclcc v. Scottish Imperial Insurance Co., 34 Ch. D. 239, it was said : “ If a party adopts and enjoys the benefit of what has been done by another person, his request will bo pre- sumed ” ; upon which Bowen, L.J., is reported to have made the comment, “ The law is so laid down in Smith’s Leading Cases in the notes to Lampleigh v. Brathwuit (8th ed. vol. 1, 158), but it seems to be stated too widely. If that were the law, salvage would prevail at common law as well as in maritime law, which it certainly does not.” This is also the opinion of Chancellor Kent, 2 Comm. 356, note (e) : “ I beg leave to say that it appears to me that such findings have no analogy in principle to the cases of hazardous and meritorious sea or coast salvage under the Admiralty law, and that the rule of the common law as illustrated by Chief- Justice Eyre in Nicholson v. Chapman, as to these mere land-findings is the better policy.” See also per Bowen, L.J., l.c. 249, cited by Stirling, J., in Blylh v, Fladgate, [ 1891] 1 Ch. 358. vj 2 W entwortli v. Day, 44 Mass. 352. 3 CababS and Ellis, 253, Actual ruling of the judge probably not as reported. Where there is gross carelessness with a gratuitous bailment. 754 NEGLIGENCE IN LAW. [book v. ignoring the thing sent, or by immediately returning it. In the event of his acquiescing in the receipt, he could not be regarded as in any better position than a finder of the play, who, as we have seen, would have his choice to pass it by or to take it up ; in the latter event he would be required to answer for gross negligence. The evidence only appears to prove a loss by the depositary. The ruling of Watkin Williams, J., then, probably was that loss without something to show the circumstances, is not evidence to leave to the jury in a case where nothing less than gross negligence would affix liability. 1 Moreover, the action was in trover for the recovery of the manuscript. In this form of action proof of demand and refusal constitutes an apparent conversion, and throws upon the defendant the burden of showing that the property was lost or stolen. 2 It was probably admitted that the property was lost. The onus in these circumstances on the plaintiff was to show the circumstances which point the negligence ; since, in the words of the editor of the eighth edition of Story, 3 “ mere proof of loss or injury to goods while in the hands of a bailee does not, per se, prove negligence in him. It may do so, or may not, according to the attending circumstances ; but it is the circumstances which show the negligence, not the mere loss or absence of the property. Evidence, therefore, that the goods are missing, that they are not on hand when called for, does not, in and of itself, establish negligence in the bailee. The bailor must show that fact affirmatively 4 that the bailee has done something or omitted to do something which he ought not to have done or omitted.” 5 Where there is gross carelessness in the care of a gratuitous bailment the bailee will be held liable. Thus, where a gratuitous bailee — an innkeeper who took charge of luggage the property of one who had been staying at his house and who had paid his bill, given up his rooms and left — parted with the luggage he held as gratuitous bailee to an apparent stranger without an effort to verify his claim to it and without 1 See Tobin v. Murison, 5 Moo. P. C. C. 110, 128; Tompkins v. Saltmarsh, 14Ser. & Rawle (Pa.) 275. As to an involuntary bailee, Heugh v. L. & N. W. By. Co., L. R. 5 Ex. 51. Where defendant indorsed an order enabling one acting as broker for a third person and consigning to defendants goods by mistake, to possess himself of the goods and to deal with them in fraud of his principal, defendant was held liable for a conversion in having indorsed the order without occasion or authority to do so : Wort v. Hof/, L. R. 0 Ex. 86, and per Lord Halsbury, C., New York Breweries Co. v. A.-G., [1899] A. C. 70. 2 Cranch v. White, 1 Bing. N. C. 414. Story, Bailm. § 107. In assumpsit or case founded on negligence the plaintiff must in the first instance make out his ease as he charges it. 3 Bailm. § 410 a, citing as his authorities Gilbart v. Dale, 5 A. & E. 543, and Midland By. Co. v. Bromley, 17 C. B. 372. 4 In Smith v. First National Bank of Westfield, 99 Mass. 605, it was held that, to charge defendants for negligence in a case of gratuitous bailments, something must be shown affirmatively beyond that the package could hot be found ; and this was followed in Pitlock v. Wells, 109 Mass. 452. The Queen’s Bench Division decided the same point the same way in Powell v. Graves, 2 Times L. R. 663, where plaintiff deposited a picture, which was kept by defendants gratuitously ; after three years, on his asking for it, it could not be found. Lord Coleridge said : “ There must be affirmative evidence of negligence to make them [i.e., the defendants], as gratuitous bailees, liable for the loss.” This was followed in Bullen v. Swan Electric Engraving Co., 22 Times L. R. 275, affd. 23 Times L. R. 258. 5 Cotton v. Wood, 8 C. B. N. S. 568 ; Welfare v. L. B. oimcl to be the right owner , 4 yet he has a good defence against the bailor if the jj eposit bailor has no valid title and he delivers the property bailed to the unless tho rightful owner . 5 When he delivers up the thing bailed it must be in rightful 1 Bailm. § 93 a et seqq. 2 2 Comm. 508 note (e). 3 7 Bailm. (D)_ Ante, 733. 4 2 Kent, Comm. 567. 5 King v. Richards, 6 Whar. (Pa.) 418 ; in this case the older English authorities are carefully collected and analysed in a most able judgment. See also Wilson v. Anderton, 1 B. & Ad. 450 ; Ogle v. Atkinson, 5 Taunt. 759. The bailee can only set up the title of another, “ if he defends upon the right and title, and by the authority of that person,” per Blackburn, J., in Biddle v. Bond, 6 B. & S. 234 (citing Pollock, C.B., in Thorne v. Tilbury, 3 H. & N. 537), explained by Lord Selborne, C., in Kingsman v. Kingsman, 6 Q. B. D. 129, distinguished in Ex parte Davies, In re Sadler, 19 Ch. D. 93, per Lush, L.J., and approved Rogers v. Lambert, [1891] l Q. B. 318. A bailee may, however, equally with a tenant, show that the title of his bailor to the goods has expired since the bailment : Thorne v. Tilbury, 3 H. & N. 534. In Roll. Abr. Detinue, (C) 5, citing Y. B. 9 H. VI. 58, pi. 4, it is laid down that if the bailee of goods deliver them to him who has the right thereto, he is still chargeable to the bailor ; and the con- verse, if the bailee deliver to the bailor he is protected against the true owner, is also asserted, in the following passage, Detinue, (C) 7, on the authority of Y. B. 7 H. VI. 22, pi. 3. If ever law, this is no longer so. Where the true owner has, by legal proceedings, compelled a delivery to himself of the goods bailed, such delivery is a complete justifica- tion for non-delivery on account of the bailor : Shelby v. Scotsford, Yelv. 22 ; Ogle v. Atkinson, 5 Taunt. 759 ; Wilson v. Anderton, 1 B. & Ad. 450, citing as to the bailee’s right to interplead. Com. Dig. Chancery (3 T). An actual delivery to the true owner, having a right to the possession on his demand of them, is also a justification for the bailee : Hardman v. Willcock, 9 Bing. 382 note ; Biddle v. Bond, 6 B. & S. 225. A strong presumption in favour of the bailor arises from the bailment, though there is no absolute estoppel. The bailee’s contract is to do with the property committed to him what his principal has directed, to restore it or to account for it ( Cheesman v. Exall, 0 Ex. 341 ), and by yielding to title paramount he does account for it. If at any stage of tho transaction the principles of estoppel are applicable, they cease to be so when the bailment is determined by what is equivalent to an eviction by title paramount, that is to say, by the reassertion of possession by the true owner : Biddle v. Bond, supra. It is true that it has sometimes been said that the bailee can only recognise the jus tertii where a legal decision has established it, or where fraud has been practised by the bailor as in the case of Hardman v. Willcock, supra. But the bailor himself cannot confer rights he is not possessed of, and if he cannot withhold possession from the true owner, neither can one claiming under him. The rule is that a bailee cannot avail himself of the jus tertii for the purpose of keeping the property for himself, even though the title he sets up is that of the true owner. If the law were otherwise, by such a pretext he might keep goods deposited with him without any pretence of ownership. If, however, the bailee has performed his legal duty by delivering the property to its true owner, at his demand, he is not answerable to the bailor, and there is no difference in this particular between a common earlier and other bailees : The Idaho, 93 U. S. (3 Otto) 575. See Mr. Holmes’s note, Duty to return : 2 Kent, Comm. (12th ed.) 566 ; also 2 Parsons, Contracts (8th ed.), 94. In Kohn v. Richmond and Danville Rd. Co., 34 Am. St. R. 726, it was held that the bailor is not bound to deliver to the true owner, but is bound to yield to process of law, and is therefore excused for doing so. In Henderson v. Williams, [1895] 1 Q. B. 521, a warehouseman having attorned to a purchaser was estopped from impeaching his title ; but may be permitted to interplead, Ex parte Mersey Docks and Harbour Board, [1899] 1 Q. B. 546. owner claims it. NEGLIGENCE IN LAW. Joint deposit. When depositary improperly refuses to deliver it. Articles sent to an exhibition. Valuable picture exhibited. Watch left with tailor while trying on clothes. 762 [book V. the state in which he received it, and with the profit or increase which it has produced, for which he becomes liable if in default . 1 Where a third person intermeddles, the rule is that either the bailor or the bailee may sue, and whichever first obtains damages does so in full satisfaction . 2 In the case of a joint deposit, the depositary is not in general bound to deliver the deposit without the consent of all the parties ; 3 and, on the other hand, Story says , 4 that where there are two or more joint depositaries, they are each liable for the restitution of the whole deposit. When the depositary improperly refuses to deliver the deposit, the character of his holding becomes altered ; and if it is afterwards lost, he is answerable for all defaults and risks ; 5 indeed such a refusal amounts to a conversion . 6 Articles sent for exhibition, for example, to an agricultural society, are not a gratuitous bailment ; for the undertaking to exhibit the article sent constitutes a consideration, as the exhibitor is induced by the expectation of deriving advantages from the exhibition of his goods to send them. Even in the case of an exhibition of a rare picture from a private gallery, which the owner has no wish to sell, the greater notoriety it obtains by exhibition, and the prospect of its value being thus enhanced, may be deemed a consideration, of which the Courts will not look to the adequacy . 7 In most cases of exhibitions the terms on which articles are lent are specially provided for and must be construed as in the case of any other special contract. A curious American case 8 may be here noted ; where a man going to a store to be fitted with a suit of clothes, preparatory to trying them on, deposited his watch in a drawer which the storekeeper’s salesman pointed out as the fit receptacle. When the customer desired to 1 2 Kent, Comm. 507 ; citing Game v. Harvie, Yelv. 50 ; Coggs v. Bernard, 2 Ld. Raym. 909. 2 Per Parke, B., Nicollsv. Bastard, 2 C. M. & R. 660, and ante, 736 note. Si bailee del biens 'port trespas, et bailor autcr trespas, cestuy que primerment recover oustcra Vauler d’action, 2 Roll. Abr. Trespas. 509, pi. 5, referring to Y. B. 48 E. III. 20. pi. 8, and Y. B. 20 H. VII. 5, pi. 15, which was an action for battery of a servant, where it was held that the battery is no tort to the master, but only the loss of service. Pain v. Whittaker, Ry. & M. (N. P.) 99. See Gordon v. Harper, 7 T. R. 912, and W ilbraliam v. Snow, 2 Wins. Saund. 47. 3 Harper v. Godscll, L. R. 5 Q. B. 422 ; Brandon v. Scott, 7 E. & B. 234 ; May v. Harvey, 13 East, 197 ; 2 Kent, Comm. 560. Magnus v. Queensland National Bank, 37 Ch. D. 460. * § 116. Seethe rule D. 16,3, 1, §§ 30, 37, 43. Where there was a joint bailment, the remedy was by interpleader : Crawshay v. Thornton, 2 My. & Cr. 1 ; Boggart v. Culls, Cr. & Ph. 197 ; Story, Eq. Jur. §§ 800 824 b (Eng. ed.) ; Reeves, Hist, of the Eng. Law, vol. iii. 453, 454. 5 Story, Bailm. § 122. In Y. B. 39 Edw. III. 17, a sealed bag of deeds was bailed to J. to hand over. J. died and his wife held the bag as executrix. B. was held entitled to maintain detinue though he had never been in possession. So an heir has been held similarly entitled to an heirloom: Y. B. 39 Edw. III. 6. To prove that the article bailed has been lost is no answer in detinue : Reeve v. Palmer, 5 C. B. N. S. 84. In Wilkinson v. Verity, L. R. 6 C. P. 200, a service of communion plate was sold by the defendant, to whom it had been bailed for safe custody ; more than six years after the sale it was demanded by the plaintiff, who was ignorant of the sale. The Statute of Limitations, 21 Jac. I. c. 10, was held to run from the date of the demand and refusal, and not from the date of the sale. Wilkinson v. Verity is considered in Miller v. Dell, [1891] 1 Q. B. 408. Cp. Barton v. North Staffordshire Ry. Co., 38 Ch. D. 458 ; In re Tidd, Tidd v. Overell, [1893] 3 Ch. 154. As to a depositary on express trust, Fells v. Read, 3 Ves. 70. fi Marner v. Bankes, 1(5 W. R. 02. 7 Vigo Agricultural Society v. Brum ficl, 52 Am. R. 057. » Woodruff v. Painter, 30 Am. St. R. 780. VARIOUS RELATIONS. 763 CHAP. I.] resume possession the watch was gone, and no explanation of its dis- appearance was forthcoming. The Court held that the storekeeper became chargeable as a bailee ; assuming that a jury would have found that a watch is such personal property as men of the class frequenting the store usually carry with them, and that in the selection of a suit of clothes it is necessary or usual to remove it from the person and lay it aside. The bailment being for the reciprocal benefit of the parties, ordinary care was necessary. If the watch were stolen, such an explanation would be a discharge ; nevertheless, it was incumbent on the storekeeper to give such explanation of the disappearance of the watch as would enable the bailor to test his good faith. II. Mandate. “ Mandate,” says Chancellor Kent 1 — and his definition meets Definition, with the strong approval of Story 2 — “ is when one undertakes, without recompense, to do some act for another in respect of the thing bailed.” 1 2 Comm. 568 ; D. 17, 1. 2 Bailm. § 137. A writer in American Jurist, vol. xvi. 253, devotes a dozen pages to show that the definition of Story is incorrect, and that mandate is not a contract, because there is no consideration, and it is therefore nudum pactum. In Coggs v. Bernard, 2 Ld. Raym. 919, Holt, C.J., touches upon this point: “ Secondly, it is objected that there is no consideration to ground this promise upon, and therefore the undertaking is but nudum pactum. But to this I answer, that the owner’s trusting him with the goods is a sufficient consideration to oblige him to a careful management; ” that is as distinguished from a consideration sufficient to oblige him to carry them, which the ex- pressions used seem to discriminate. Cp. Wheatley v. Low, Cro. Jac. 668 ; Hart v. Milles ,-j 4 C. B. N. S. 371 ; Pillans v. Van Mierop, 3 Bur. 1663. In Symons v. Dar knoll, 1 Palmer (K. B.) 523, Hyde, C.J., says, “ delivery fait le contract .” In Fisher v. 1 Liverpool Marine Insurance Co., L. R. 8 Q. B. 476, Blackburn, J., speaking of an undertaking to use due skill and diligence, says, “ for this undertaking, the mere fact that they were trusted with that duty would be a sufficient consideration.” The writer in the American Jurist (at 274), decides that this is “ a position which even the great name of Lord Holt cannot sustain for a moment.” The consideration is sufficient to oblige to care, though possibly not to convey ; but if they are conveyed, then the obligation to take care is not lessened thereby. See Lane v. Cotton, 1 Ld. Raym. 655 ; also Law Quarterly Review, (1886) vol. ii. 33, “ A Difficulty in the Doctrine of Con- sideration ” ; and per Grier, J., Philadelphia and Reading Rd. v. Derby, 14 How. (U. S.) 485. The difficulty may be explained by considering the difference between the Roman conception of a contract and that of the common law. In the civil law a gratuitous promise to act for another or to carry his goods is regarded as a con- sensual contract ; by our system a mere promise is not enforcible, and a recovery upon one must be on the ground of misfeasance. If a promise is executed it can then be sued on in English law, as a contract, not perhaps expressly constituted, but implied by law ; which treats it as a contract preferentially to a breach of duty; in deference to the example of the Roman law, in which system such relations were always looked on as'con tracts rather than as mere duties : see Hare, Contracts, 150 ; Pollock, Contracts (7th ed.), 168 ; and plaintiff’s argument in Steinson v. Heath, 3 Lev. 400, citing, inter alia, Y. B. 22 H. VI. 46, 47, “ against a chaplain for not reading prayers ” (cp. Williams's case, 5 Co. Rep. 72 b) ; Y. B. 1 E. III. 4, “ against a champion qui se retraxit.” The reporter adds : “ But note all those cases are for a tortious non- feasance, but this here is quasi a debt, for which there lies rather debt or assumpsit.” The reference to Y. B. 1 E. III. 4, is, however, not correct. Reeves, Hist, of the Eng. Law (2nd ed.), vol. iii. 89, says that the first instance of an action on the case is in the twenty-second year of the king. Mr. Finlason, however, disputes this in his edition of Reeves, vol. ii. 394, and says there are instances of the action sur le case in the reign of Edward I. This, I think, must be a misprint for Edward II. The earliest reference to an action sur le case that I can find is in Maynard’s Edward II., Y. B. 3 E. II. 75, followed by Y. B. 6 E. II. 200 ; Y. B. 12 E. II, 369 ; Y. B. 18 E. II. 571. There is a report of an action sur le case in Y. B. 7 E. III. 17, pi. 19. In Bro. Abr. Accion surle case, pi. 14-26, are a series of cases between the 41st and 48th of E. III. In Shep. Abr. Actions of the Case, 51, is a reference to a case in the 5 E. III. and in Fitzh. De Natura Brev. 92, one to Y. B. 7 E. III. 2 (neither recognisable by me). In Wardell v. Mourillyan, 2 Esp. (N. P.) 693, a custom was found for hoymen known to ply to some particular wharf to discharge their duty, by delivering the goods to the 704 NEGLIGENCE IN LAW. [book V. Meaning in English law. Distinction between deposit and mandate. Dr. Wharton 1 contests the gratuitous character of mandate. As a proposition of civil law his contention is opposed to Gaius , 2 the Institutes , 3 and the Digest . 4 As a proposition of English law Dr. Wharton is concluded by the expression of Holt, C.J., in Coggs v. Bernard : 5 “ The sixth sort [i.e., of bailment] is when there is a delivery of goods or chattels to somebody who is to carry them, or to do something about them, gratis, without any reward for such his work or carriage.” 6 Between deposit and mandate, says Sir William Jones , 7 the dis- tinction is that the former lies in custody and the latter in feasance. It has been pointed out by Story 8 that in cases of deposit there is always something to be done, while in mandate there is commonly something to be guarded ; so that in each contract there is custody and labour and service to be performed. He therefore amends the sug- gested distinction, and says : “ The true distinction between them [i.e., deposit and mandate] is, that in the case of a deposit the principal wharf. On this, Erskine, for the plaintiff, said that if his client could not recover against the lioyman he was suing, he was without remedy, as he could not main- tain an action against the wharfinger ; because there was no privity of contract between them. To this Kenyon, C.J., answered : “ The delivery of the goods at the wharf by the hoyman raised an implied contract on the part of the wharfinger to take care of them, or to deliver them according to the direction ; for the breach of which an action would lie.” In Langdell’s Summary of the Law of Contracts, § 46, a considera- tion that gives rise to a debt and one that would only sustain an action in assumpsit are distinguished. To constitute a debt the thing given or done in exchange for the promise (!) must be done to or for the obligor directly; (2) must be in legal con- templation the sole motive for assuming the obligation ; and (3) must be executed, not promised merely. To raise an assumpsit none of the foregoing elements is neces- sary ; it is enough if anything be given or done in exchange for the promise. See also the note to Edwards v. Davis, 16 Johns. (Sup. Ct. N. Y.) 284, and the learned note to 2 Parsons, Contracts (8th ed.) 100. Ante, 738, and post, 768. i Negligence, §§ 482, 491. Dr. Moyle, Just. Inst. 3, 26, 13 note, says : “ The true test is whether the parties intended the remuneration to be recoverable by action ; if not, it will be mandatum : si remunerandi gratia honor intervenit, erat rnandati (not locati or conducti) actio D. 17, 1, 6, pr.” See Walker, Selected Titles to the Digest, Introduction to Part I. 2 3 , 162. 3 3, 26, §§ 1, 13. 4 D. 17, 1, 1, § 4 : Mandatum, nisi gratuitum nullum est ; nam origincm ex officio atquc amicitia trahit ; conlrarium ergo est officio merces, interveniente enim pecunia, res ad locationem et conductionem potius respicit. The only notice Wharton takes of this authority is, Negligence, § 486, summarising the opinion of a German author, Dr. J. Baron, “ The opinion once was that the two [hiring and mandate] were dis- tinguished by the fact that in the first case the labour was for reward, in the other case without reward. No doubt some passages in the Digest suggest such a distinction.” Then in a footnote is a reference to the passage just set out, together with that cited, supra, from the Institutes, and also to D. 19, 6, 22. There is a limitation to be imposed on the statement as to the purely gratuitous character of mandatum. Severus and Antoninus provided that a promised honorarium might be exacted by appealing to the exlraordinaria cognitio of the magistrate. Adversus eum cujus negotia gesta sunt, de pecunia, quam, de propriis opibus, vel ab aliis mutuo acceptam erogasti, mandati actione pro sorte et usuris potes experiri. De salario autem quod promisit, apud prcesidcrn provincice cognitio prcebebitur : Cod. 4, 35, 1. In connection with this must be con- sidered the fact that the professors of a liberal art — that is advocates, physicians, ocu- lists, aurists, dentists, librarii, notarii, accountants, schoolmasters, nurses, rhetoricians, grammarians, geometers, land surveyors, D. 50, 13 — could recover a remuneration under the name of salarium or honorarium from the praetor. See Pothier, Traite du Contrat de Mandat, ch. i. sec. 2, art. iii., De la Gratuite du Mandat ; Pothier, Pand. 17, 1, 1, art. 2, Quo sensu ad substantiam mandati requiralur ut sit gratuitum ? Sohm, Inst, of Roman Law (2nd ed. Eng. trans.), 423; 1 Bell, Comm. (7th ed.), 506 ; Hare, Con- tracts, 93. When, however, a mandate has been entered upon it had to be performed : Voluntatis est suscipere mandatum necessitatis consummare : D. 13, 6, 17, § 3. But it might be abandoned (1) if the mandator were not prejudiced thereby, D. 17, 1, 22, § 11 ; and (2) ob subitam valetudinem, ob necessariam peregrinationem, ob inimicitiam et inanes rei actiones integra adhuc causa mandati : Paul. Sent. Rect. 2, 15, 1. a 2 Ld. Raym. 913. n Jones, Bailm. 52, 117; Pothier, Traite du Contrat do Mandat, art. prelim., n. 1 , 22. 7 Bailm. 53. 8 Bailm. §140. CHAP, i.] VARIOUS RELATIONS. 705 object of the parties is the custody of the thing, and the service and labour are merely accessorial ; in the case of a mandate the labour and services are the principal objects of the parties, and the thing is merely accessorial.” When the person to whom goods are entrusted — the mandatary- delivers them to another person, and they receive ah injury, there does notseemto be any objection in principle to his right to recover for his own indemnity though he, no more than a depositary, has any property in the goods. The general principle of the common law is that posse ssion with an assertion of right, or in many cases possession alone, is a sufficient title to enable the possessor to maintain a suit against a mere wrongdoer for any injury or wrong done to the thing injured. 1 Story enumerates the requisites of a contract of mandate : 2 (1) It must respect an act to be done in futuro, and not one already completed. 3 (2) It must be gratuitous. 4 (3) There must be a voluntary intention on the part of both parties to enter into the contract. 5 (4) The act to be done should be lawful and not against sound morals. 6 (5) It may be in any form. 7 Pothier 8 states the obligations of the mandatary as threefold : (1) To do the act which is the object of the mandate, and with which he is charged. (2) To bring to it all the diligence it requires. (3) To give an account of his dealings with it. (1) Sir William Jones 9 seeks to assimilate the doctrines of the civil and the common law, and contends that an action will lie for damage occasioned by the non-performance of a promise to become a man- datary, if special damage is shown. The doctrine of the Roman law is stated in the Institutes, 10 but the law of England is clearly established in an opposite sense. A mandatary, or one who undertakes to do an act for another without reward, is not answerable for omitting to do the act, and is only responsible when he attempts to do it and does i t amiss. 11 In other words, he is responsible for a misfeasance though not 1 Story, Bailm. § 152, and ante, 733. 2 Bailm. §§ 145, 100. 2 Debere esse gcrendum, non jam gestum : Potliier, Pand. 17, 1, 1, art. 1. 4 Bailm. § 153. Pothier, Pand. 17, 1, 1 : Mandatum est contractus quo quis negotium gerendum commiltit alicui gratis illud suscipienti, animo invicem contrahendce obliga- tionis. May.iz (2nd ed.), vol. ii. 211, says : Mandare signifie donner pouvoir, manura dare. Dans le sens spicial qui nous occupe id, on entend par mandat, le control par lequel une pzrsonnz s'oblige envers urn autre A faire gratuilement une chose dont cette demure la charge. Maynz specifies three conditions as necessary to constitute this relation — (1) A person who commits something to another to do ; (2) An acceptance of the charge by that person ; (3) A gratuitous engagement, 5 Bailm. § 155. Pothier, Pand. 17, 1, 1, § 1 : IJt animo contrahendce invicem obliga- tionis committatur el suscipiatur. In Gothofred’s edition of the Digest there is a note to D fc 17, 1, 1, § 2 : Mandatum uno roganle, altero recipicnte pcrficitur. llcec duo verba Rogo et Recipio citra stipulationem pcrficiunt mandatum. 6 Bailm. § 158. Rei turpis nullum mandatum est : D. 17, 1, C, § 3 ; Pothier, Traite du Contrat de Mandat, n. 1 1. 7 Dig. 17, 1, 1 : Obligalio mandati, consensu contrahentium consistil. ** Traite clu Contrat de Mandat, n. 37. Cp. Code Civil, arts. 1991-1997. 9 Bailm. 54-56. 10 Inst. 3, 26, 11. The Digest is to the same effect, D. 17, 1, 5, § 1. 11 Elsee v. Gatward, 5 T. R. 143 ; Balfe v. West, 13 C. B. 466 ; Thorne v. Dens, 4 Johns. (Sup. Ct. N. Y.) 84 ; 2 Kent, Comm. 569-573, on the distinction between a total omission to act and negligence in acting ; Wilkinson v. Coverdale, 1 Esp. (N. P.) 75, is a case where positive injury resulted from the neglect to act— the plaintiff was misled. Baxter v. Jones, [1903] 6 Out. L. R. 360. Delivery by the mandatary. Requisites ol a contract of mandate. Obligations of the mandatary. (1) To do the act which is the object of the mandate. Nonfeasance. Only liable for misfeasance. NEGLIGENCE IN LAW. (2) To bring to bear the requisite amount of diligence. Sir William Jones’s view. Dissented from by Story in his treatise on Bailments. Shiells v. Blackburne. Judgment of Lord Lough- borough. 766 [book v. lor a nonfeasance, even if special damage be averred. The difficulty oi the early cases was to explain how an action of trespass on the case could be brought for a nonfeasance ; this was also the original diffi- culty in the way of the action of assumpsit as a branch of the action on the case. 1 (2) To bring to it all the diligence it requires. Ulpian’s famous rule states : Dolum et culpam mandatum. 2 Sir William Jones, 3 however, makes a great point of the want of agreement of the civilians on the subject of the degree of diligence requisite. By the common law, as the contract is wholly gratuitous and for the benefit of the owner, the mandatary is only liable for gross negligence. 4 Sir William Jones 5 takes a distinction between “ a bailment without reward to carry from place to place ” and “ a mandate to perform a work.” With reference to the former, he cannot “ conceive that the bailee is responsible for less than gross neglect.” With reference to the latter, “ he is bound to use a degree of diligence adequate to the performance of it.” 6 Story 7 does not accept this distinction, which he says is supported by reasoning “ exclusively derived ” from the civil law, which applies the rule “ to all cases of mandates whatsoever, and by no means limits it to cases where work is to be performed.” “ To carry jewels safely may be a far more valuable service, and require far more vigilance, than to clean the gold which enchases them.” “ Where the act to be done requires skill, and the party who undertakes it either has the skill, or professes to have it, there he may be well made responsible for the want of due skill or for the neglect to exercise it.” Of course if a man undertakes to perform a work in such circumstances that a representation of capacity is involved, he must act up to his representation or pay for the damage he causes. If the circumstances do not affect him with a special responsibility the law does not. Shiells v. Blackburne 8 is in point here. A merchant having under- takenvolimtarily and without reward to enter a parcel of goods belonging to the plaintiff at the custom-house for exportation, made an entry under a wrong denomination, whereby plaintiff ’s parcel, together with a similar one of his own, were seized and lost. The plaintiff having brought his action, it was held that, failing gross negligence, the defendant was not liable. “ I agree with Sir William Jones,” said Lord Loughborough, C.J., 9 “ that where a bailee undertakes to perform a gratuitous act, from which the bailor is alone to receive benefit, there the bailee is only liable for gross negligence ; but if a man gratuitously undertakes to do a thing to the best of his skill, where his situation or profession is such as to imply skill, an omission of that skill is imputable to him as gross negligence. If in this case a shipbroker, or a clerk in the custom-house, had undertaken to enter the goods, a wrong entry 1 Remarks upon the Law of Bailment, 1G Am. Jur. 253 ; Holmes, The Common Law, 275. Street, Foundations of Legal Liability, vol. ii. 2!), 200, vol. iii. 172. 2 D. 50, 17, 23. 3 Baffin. 14, 15, 10. 4 Doorman v. Jenkins, 2 A. & E. 250. s Bailm. 02. Sec 2 Parsons, Contracts (8th ed.), 104, note (1.). fi Bailm. 53 ; see also 22, (il, 08, 120. 7 Bailm. § 177. K 1 H. Bl. 158. In Moore v. Mourgue, 2 Cowp. 479, an agent, having written orders to do so, procured a policy of insurance to be made. In (lie policy as executed, there was an exception of a risk, common in the policies of other offices, although not in those used by the office where the insurance was made. The loss arose from such risk. The Court held that the agent was not liable, as he had acted bond fide and without gross negligence. The probability is that this was a gratuitous undertaking, yet that it was so in fact is nowhere stated in the report. » 1 H. Bl. 103. VARIOUS RELATIONS. CHAP. I.] 707 would, in them be gross negligence, because their situation and employ- ment necessarily imply a competent degree of knowledge in making such entries ; but when an application, under the circumstances of this case, is made to a general merchant to make an entry at the custom- house, such a mistake as this is not to be imputed to him as gross negligence.” 1 In Dartnall v. Howard 2 the element of a “ situation or profession,” Dartnall v. from which special skill could be inferred, appears to have been absent ; Howard. and the decision there consequently marks the other aspect of the prin- ciple we are now considering. The declaration alleged that in con- sideration that plaintiff should retain defendants to lay out a sum of money, they undertook to do their duty in the premisses. On motion in arrest of judgment, the count was held bad, as it did not state that any reward was to be paid to the defendants, or that they were em- ployed in any particular character so as to be responsible for taking a bad security without negligence or fraud. Abbott, C.J., in delivering judgment of the judgment of the Court, said : 3 “ I am of opinion that the count is Abbott, C.J. bad. The only duty that is imposed under such a retainer and employ- ment as is here mentioned is a duty to act faithfully and honestly, and not to be guilty of any gross or corrupt neglect in the discharge of that which he undertakes to do. But a man may, when acting most faithfully and most honestly, happen to take an insufficient security ; 4 without gross or culpable negligence on his part, he may have been misled, he may have been deceived, he may have taken such care as an ordinary man would take with regard to the subject-matter entrusted to him, and yet, doing all that, his endeavours may have failed, and it may so happen the security may without his knowledge and against his will have turned out to be insufficient. For these reasons it appears to the Court that this count is not sustainable.” Coggs v. Bernard 5 is an authority in the same direction, the under- taking to carry “ safely ” being regarded as a holding out by the defendant that he was skilled in the particular business. In the well-known case of Thorne v. Deas , 6 Kent, C.J., also dis- Thome v. approved Sir William Jones’s view that a mandatary commissioned Deas - to perform work is bound “ to use a degree of diligence to the per- formance of it.” He said : “ I have carefully examined all the authorities to which he refers . 7 He has not produced a single adjudged case ; but only some dicta (and those equivocal) from the Year Books, in support of his opinion ; and was it not for the weight which the authority of so respectable a name imposes, I should have supposed the question too well settled to admit of an argument.” The learned Chief Justice expresses an opinion far from favourable to the portion of Sir William Jones’s essay dealing with mandates, and, while recog- nising the correctness of its presentation of the civil law, altogether discredits its conclusions on the common law . 8 1 Cp. Bourne v. Diggles, 2 Chitty (K. B.), 311 ; O'Hanlon v. Murray, 12 Ir. C. L. R. 101 ; and Fish v. Kelly, 17 C. B. N. S. 194 ; which are solicitor’s cases, where Shi ells v. Blackhurne is cited and followed. See Chapman v. Morley, 7 Times L. R. 257. 2 4 B. & C. 345. 3 L.c. 350. 4 I have ventured to alter the punctuation of this passage. 5 2 Ld. Raym. 909, 1 Sm. L. C. (11th ed.), 173. 6 4 Johns. (Sup. Ct. N. Y.) 96. At 90 there is a translation of the case in Y. B. 3 H. VI. 36, pi. 33, on which Sir Wm. Jones comments, and which comments arc ' discussed in the argument. 7 These are set out and considered in the judgment as reported. * The distinction between cases like Smith v. La sc, dies, 2 T. R. 187, and Webster 768 NEGLIGENCE IN LAW. BOOK V. (3) Duty to account. Rule of the common law as summed up by Story. N egoliorum gestor. Nelson v. Macintosh. Drake v. Shorter. (3) To give an account of his dealings with it. The mandatary is bound to render to the mandator, upon request, a -full account of his proceedings ; to show that the trust has been duly performed ; or if it has been ill-performed, to offer a justification or legal excuse for such ill-performance. The form and mode in which the remedies of the bailor are to be enforced, in case of any fault committed by the mandatary, for which he is responsible, will depend upon the municipal law of the particular country. In the Roman law, and the foreign law derived from it, the remedy would ordinarily be the actio mandati directa ; in the common law it would be either an action founded on the contract, as assumpsit, or an action founded on the tort, as an action on the case for misfeasance or negligence or conversion. 1 The rule of the common law as to the obligations attaching to a mandatary is stated thus : 2 “A mandatary, who acts gratuitously in a case, where his situation or employment does not naturally or necessarily imply any particular knowledge or professional skill, is responsible only for bad faith or gross negligence. If he has the qualifications necessary for the discharge of the ordinary duties of the trust which he undertakes and he fairly exercises them, he will not be responsible for any error of conduct or action into which a man of ordinary prudence might have fallen. If his situation or employment does imply ordinary skill, or knowledge adequate to the undertaking, he will be responsible for any losses or injuries resulting from the want of the exercise of such skill or knowledge. If he is known to possess no particular skill or knowledge, and yet undertakes to do the best which he can under the circumstances, all that is required of him is the fair exercise of his knowledge and judgment and capacity. This general responsibility may be varied by a special contract of the parties either enlarging or qualifying or narrowing it, and in such cases the particular contract will furnish the rule for the case.” 3 v. De Tastet, 7 T. R. 157, is also pointed out. Cohen v. Kittell, 22 Q. B. D. 080, was an attempt to recover against defendant for “ having failed to make certain bets pursuant to the plaintiff’s instructions.” The development of the action of trespass on the case through assumpsit into a declaration for mere breach of agreement is well treated. Holmes, The Common Law, 275. Street, Foundations of Legal Liability, vol. iii., 223-277. Ante, 738, 703. 1 Story, Bailm. § 191. 2 Ibid. § 182 a. 3 Jenlcins v. Betham. 15 C. B. 108. See 2 Kent, Comm. 571-574 ; Shiells v. Black- hurne, 1 H. Bl. 158 ; Booth v. Wilson, 1 B. & Aid. 59. Wharton cites this last case, Negligence, § 508, as an authority for the proposition that the defendant was bound to “ apply the care of a good hostler.” Neither the judgment not the argument, as reported, goes nearly this length. The utmost the case decides is that the defendant “ owes it to the owner of the horse not to put it in a dangerous pasture,” which seems scarcely correlative with a duty to “ apply the care of a good hostler.” Wilson v. Brett, 11 M. & W. 113. The rpta, si-contract of a negotiorum gestor in the civil law must not pass without notice. A negotiorum gestor was a person who, of his own accord, and without the knowledge of the owner, intermeddled with property. As the intermeddling was without any mandate, a higher degree of skill was reejuired from the negotiorum gestor than in other cases. Si negolia ahsenlis et ignorantis gcras et cidpam et dolum priest arc dehes : D. 3, 5, 11. Is qui utiliter gesserit negolia habet ohligatum dominum negotiorum, et ita et contra isle quoque tenetur, ut administration is rationem reddat. Quo casu ad exactissimam quisque diligentiam compellitur reddere rationem : ncc sufpeit talcm diligenliam adhibere, qualem suis rebus adhibere sold, si modo alius diligentior eo com- modius administraturus esset negotia : Inst. 3, 28, § 1. However, to this there was an exception : where the business undertaken was that of a friend in a case of apparent necessity, the liability attaching was only for bad faith and fraud : Pothier, Pnnd. 3, 5, 52. Pothier gives the reason : Parcequ'il vaut mieux pour Vabsent que scs biens soicnl administris pur un homme negligent, que s' Us itaient vendus. Story considers (Bailm. § 190) the case of Nelson v. Macintosh, 1 Stark. (N. P. ) 237, already set out in the text (ante, 758), to approach very near to that of a negotiorum gestor ; Drake v. Shorter, 4 Esp. (N. P.) 105, seems undistinguishablo. Defendant, who was employed in an VARIOUS RELATIONS. 769 CHAP. I.] With this may be conjoined Dr. Hare’s statement of the civil law. After pointing out that the usual test of the degree of care requisite in the case of bailments is whether the bailment was made in the interest of the bailor or bailee, or for an end beneficial to both, and after enun- ciating the rules applicable in the respective cases, he says : 1 “In mandate, the obligation was not deduced from the law, but arose from the express or implied undertaking of the mandatary to do all that was requisite and practicable for the fulfilment of the trust ; and he was consequently answerable for any loss or failure that might have been averted by due care, or such skill as might reasonably be expected from a man of his training or profession. One who engaged to carrythe goods of another to a given point, or to expend labour or skill upon them for the benefit of the owner, was therefore answerable for exact diligence, and could not rely on the gratuitous nature of the undertaking as an excuse for a loss that might have been foreseen and avoided.” 2 When property is remitted voluntarily by the owner to another with a direction to apply it for the benefit of a third person, or when the owner gives such a direction about property already in the possession of the person he addresses, he, whose benefit is intended, cannot invention for making a vessel sail against wind and tide, employed the plaintiff to work on her. While working, the vessel took fire, and the defendant used a boat belonging to the plaintiff to endeavour to extinguish the fire, with the result of sinking and losing it. The defence was, that the interference was to prevent the fire spreading. Lord Ellenborough, C.J., held that this amounted to a good defence. “ What,” he said, “ might be a tort under one circumstance, might, if done under others, assume a different appearance. As, for example : if the thing for which the action was brought, and which had been lost, was taken to do a work of charity, or to do a kind- ness to the person who owned it, and without any intention of injury to it, or of converting it to his own use ; if, under any of these circumstances, any misfortune happened to the thing, it could not be termed an illegal conversion ; but as it would be a justification in an action of trespass, it would be a good answer to an action of trover.” Espinasse is not reckoned an accurate reporter, and it is difficult to accept fully the wording of this principle. Something more would be required than the taking “ to do a work of charity, or to do a kindness to the party who owned it, and without any intention of injury to it, or of converting it to his own use.” Probably Lord Ellenborough, C.J., laid down the law in accordance with Labeo : Interdum in negoliorum geslorum actione dolurn solummodo versari. Nam si afjectione coactus, me bona mea distrahantur, negotiis te meis obtuleris cequissimum esse dolurn duntaxat te preestare : Pothier, Pand. 3, 5, 52. A less necessity than this would not seem properly to excuse. The suggestion involved in the contrary view, Culpa est immiscere se rei ad se non pertinenti (D. 50, 17, 36), will commend itself to the cautious man; D. 3, 5, De negotiis geslis. The subject of negoliorum geslio is very fully treated in Maynz, lilements de Droit Romain (2nd ed.), vol. ii. 410, De la gestion d’affaires; Sohm, Inst, of Roman Law (2nd Eng. ed.), 427 ; Pothier: Du quasi eontrat negotiorum gestorum, App. to Traite du Contrat de Mandat. See note, Moyle, Just. Inst. 3, 27, 1 ; and note (e) 2 Kent Comm. 616 ; also Livermore Agency, vol. i. 8, 12, 50-52. See, too, Dunbar v. Wilson and Dunlop's Trustee, 15 Rettie, 210; and for the case of the claim for salvage of one saving a ship believing it to be his own which turned out to be another’s property, The Liffey, 58 L. T. 351. Keighley Maxted <& Co. v. Durant, [1901] A. C., per Lord Robertson, 260. 1 Contracts, 77. Dr. Hare refers to two cases : (1) Tompkins v. Sallmarsh, 14 Ser. & R. (Pa.) 275, where it is held that where one has undertaken to perform a gratuitous act, from which he was to receive no benefit (in the case in question, to deliver a letter containing money), “ the bailee is only liable for gross negligence, dolo proximus, a practice equal to a fraud ” ; (2) Beardslee v. Richardson, 11 Wend. (N. Y.) 25, where a person received a sealed letter, which he engaged to deliver, and where the rule of diligence was laid down in the same way as in the earlier case. 2 The Roman rule is stated by Cicero, pro Roscio Amerino, c. 38 : In privatis rebus si qui rem mandatam non modo malitiosius gessisset, sui qucestSs aut conunodi causa, verum etiam negligentius : eum majores summum admisisse dedecus exislimabant. I tuque mandati constitutum est judicium, non minus turpe, quam furti. . . . Ergo idcirco lurpis hcec culpa est, quod duas res sanctissimas violal, amicitiam et fidem. Nam neque mandat quisquam fere, nisi amico ; neque credit, nisi ei quern fidelem pulat. Perditissimi est igitur hominis, simid et amicitiam dissolvere, et fallere eum, qui loesu-s non essel, nisi credidisset. Mandatary’s duty by the civil law. Third person for whose benefit a mandate is given as no direct remedy against the mandatary. Roman con- tracts re. Distinction between commodatum and mutuum. Definition of gratuitous loan. 770 NEGLIGENCE IN LAW. [book v. enforce bis claim by legal proceedings ; and the mandate is revocable by the owner at any time before it is executed, or at least before any engagement is entered into with the third person to execute it for his benefit. 1 2 III. Gratuitous Loan. The Roman jurists divided contracts re — that is, where one received property from another in circumstances which rendered it his duty to return it or a thing of a like kind — into mutuum, commodatum, pignus, and depositum } We have already considered the case of depositum. We are now come to commodatum, which Sir William Jones, translating Pothier’s Pret a Usage, 3 has called loan for use. This distinguishes it from mutuum, which is a loan for consumption. Commodatum differs from mutuum in two principal particulars : First, it is necessarily gratuitous ; for, if the lender receives com- pensation, the agreement becomes one of locatio conductio. Secondly, the goods remain the property of the lender. 4 If, then, they are destroyed or perish through causes outside any failure to exercise the due care and diligence required of the com- modatarius, all liability on his part ceases, and the commodans is not entitled to damages. 5 The destruction of a mutuum, on the other hand, does not discharge the borrower, though not due to his fault. This is an effect of the princijde expressed in the maxim, Res perit domino , 6 “ Lending for use,” says Sir William Jones, 7 “ is a bailment of a thing for a certain time to be used by the borrower without paying for it.” Pothier’s definition is : Le pret a usage est un contrat par lequel un des contractants donne gratuitement a V autre une chose, pour s'en servir a un certain usage ; et celui qui la regoit, s' oblige de la lui rendre 1 Scott v. Porcher, 3 Meriv. 652; Williams v. Everett, 14 East, 582. See Malcolm v. Scott, 3 Hare, 39, 51, affcl. 14 L. J. Ch. 57. Cp. Fleet v. Perrins, L. R. 3 Q. B., per Blackburn, ,1., 542 ; in Ex. Ch. L. R. 4 Q. B., per Channell, B., 512. Ante, 294, n. 4. 2 Sanders, Justinian (8th ed.), 327. As to commodatum, see D. 13, 6 , Commodati vel contra. Duncan v. Town of Arbroath, Morison Diet, of Dec. 10075, is a curious case on commodatum. A man lent three cannon to the town of Arbroath, which gave a bond to restore them within twenty-four hours after they were required, “ without hurt, skaith, or damage,” in case of which the town obliged itself to make payment of £500. The cannon were captured by Cromwell at the battle of Dunbar. In 1008, the owner sued for their return or the £500. The town pleaded loss “ casu fortuitu et vi majori.” The pursuer admitted that “ in commodatum the borrower hath not the peril, yet there is an exception — si commodatum sit mstimatum — when the peril is the borrower’s and it is no proper loan but rather sale ” ; for this he quoted I). 13, 0, 5, § 1. He also urged that by the bond the peril was undertaken : “likewise they” (the town) “ were negligent, that they buried the cannon to the knowledge of their whole town ; whereas they should have entrusted some few to have done it in (he night.” The decision was that the town was not liable. This decision, however, appears to be wrong, as by their bond the town was bound to return the cannon or (o pay £500 if unable to do so through “ hurt, skaith, or damage.” The contract was special. 3 Bailm. 04. See Maynz, Elements de Droit Romain (2nd ed.), vol. ii. 204. 4 Rei commodates et possessionem et proprietalem relinemus : D. 13, 0, 8. Nemo cnim commodando rem facit ejus cui commodat : D. 13, (i, 9. 5 Eum, qui rem commodatum accepil, si in earn rem usus est, in quam acccpit, nihil preestare, si cam in nulla parte culpa sua dateriorem fecit, verurn est ; nam si culpa ejus fecit deteriorem tenehitur : 1). 13,0, 10. Poste, Gains (4th ed.), 369 ; Inst. 3, 14, 2 ; Hare, Contracts, 74. As to what is sufficient to fix a vendor with the risk of the destruction or injury of the thing sold, see note to Bailey v. CulverweM, 2 Man. & R. 504. Post, 795 cl seqq. i Bailm. I 18. VARIOUS RELATIONS. 771 CHAP. I.] To constitute this contract there are Constituents apres qu'il s'en sera servi. 1 required : (а) A thing which is lent, and which must be personal property ; since, according to the definition of Holt, C.J., 2 “ the borrower is bound to the strictest care and diligence to keep the goods so as to restore them back again to the lender.” (б) A gratuitous lending ; otherwise, as Pothier 3 points out, it becomes a letting, if the consideration is money, or an innominate contract, when it is anything else given or work done. (c) A lending for the use of the borrower. 4 (' d ) A lending where the thing lent must be itself returned at the determination of the bailment. 5 The obligations of the borrower are : (1) To take proper care of the thing borrowed. (2) To use it according to the expressed or known intention of the lender. (3) To restore it in a proper condition. Of these in their order. (a) A tiling lent. (b) Gratui- tously. (c) For the use of the borrower. ( d ) But to be returned. Obligations of the borrower. As to the proper care of the thing borrowed. In Vaughan v. (1) To use Menlove , 6 Tindal, C.J., quoting and adopting Holt, C.J., in Coggs v. proper care Bernard, lays down the rule as follows : “ It has been urged that the care which a prudent man would take, is not an intelligible proposition as a rule of law, yet such has always been the rule adopted in cases of bailment, as laid down in Coggs v. Bernard ? Though in some cases a greater degree of care is exacted than in others, yet in ‘ the second sort of bailment, viz., commodatum, or lending gratis, the borrower is bound to the strictest care and diligence to keep the goods so as to restore them back again to the lender ; because the bailee has a benefit by the use of them, so as if the bailee be guilty of the least neglect he will be answerable ; as, if a man should lend another a horse to go westward, or for a month if ‘ the bailee put his horse in his stable, and he were stolen from thence, the bailee shall not be answerable for him. But if he or his servant leave the house or stable doors open, and the thieves take the opportunity of that, and steal the horse, he will be chargeable, because the neglect gave the thieves the occasion to steal the horse.’ The care taken by a prudent man has always been the rule laid down ; and as to the supposed difficulty of applying it, a jury has always been able to say whether, taking that rule as their guide, there has been negligence on the occasion in question.” 8 This has been so to the extent of holding the loan to be strictly personal, unless a more extensive use could be implied from the circum- stances, as in Bringloe v. Morrice , 9 the case of overriding a horse. Bringloe v. 1 Cp. Code Civil, art. 1875. Morrice. 2 2 Ld. Raym. 915 ; 1 Sm. L. C. (11th ed.), 182. By all consents, it is said in Duncan v. Town of Arbroath, Morison, Diet, of Dec. 10075, commodalarius tcnctur pro levissima culpa ct summa diligentia. 3' Pret a Usage, n. 3. 4 Story, Bailm. §§ 225, 227. 5 Non potest commodari id, quod usu consumilur ; nisi forte ad pompam vel ostcnla- tionem quis accipiat : D. 13, 6, 3, § 6. 63 Bing. N. C. 475. 7 2 Ld. Raym. 909. Compare the rule of the civil law in the case — In rebus com- modatis talis diligentia proestanda est, qualem quisque diligentissimus paterfamilias suis rebus adhibet : D. 13, 6, 18. Is, qui utendum accepit, sane quidem exactam diligen- tiam custodice rei preestare jubetur ; nec sufji.cil ei, lantam diligentiam adhibuisse, quantum suis rebus adhibere solitus est : Inst. 3, 14, 2, and this because Commodatum autem plerumque solam utilitatem continet ejus, cui commodatur ; et idea verior est Quinti Mucii sententia, exislimantis, ct culpam prceslandam et diligentiam : D. 13, 6, 5, § 2. 8 1 Stair, Inst. 1, 1 1, § 8 ; Ersk. Inst. 3, 1, §§ 20, 21. 9 1 Mod. 210, reported also sub. nom. Bringloe v. Morison, 3 Salk. 271. 772 NEGLIGENCE IN LAW. [book v. Lord Camoya v. Scurr. W ikon v. Brett. Onus if loan not returned. Borrower not an insurer. JJdler v. Schultz. Two excep- tions : (a) Where there is a special con- tract. There, North, C.J., took a distinction between a loan for a stated time and one for an indefinite time. In the former case, the borrower has an interest in the horse, and the borrower’s servant may ride it ; in the other case, not. A difference was also pointed out between hiring a horse to go to York, and borrowing a horse. In the first place, the servant may ride it to its destination ; in the latter case, not. In Lord Camoys v. Scurr , 1 where a mare was for sale, and A asked the agent of the vendor for a trial, Coleridge, J., held that he was entitled to depute the trial to a competent person. Wilson v. Brett 2, is a somewhat similar case. Plaintiff entrusted a horse to ride to the defendant, a competent person ; while defendant was riding it, the horse fell down and was injured. The jury were directed that “ the defendant, being shown to be a person skilled in the management of horses, was bound to take as much care of the horse as if he had borrowed it.” Parke, B., thus explains the ruling : 3 “ The whole effect of what was said by the learned judge as to the distinction between this case and that of a borrower was this : that this particular defendant, being in fact a person of competent skill, was in effect in the same situation as that of a borrower who in point of law represents to the lender that he is a person of competent skill. In the case of a gratuitous bailee, where his profession or situation is such as to imply the possession of competent skill, he is equally liable for the neglect to use it.” That is, a gratuitous bailee, with competent skill, is required to use the skill he has ; but a borrower is required to have competent skill ; for, as Alderson, B., puts it in the same case, “ the party bargains for the use of competent skill, which here becomes immaterial, since it appears that the defendant has it.” The onus of proof lies on the borrower, if the thing is not returned on a loan to use ; for the borrower must account satisfactorily for the loss or pay the value . 4 Though the diligence required from a borrower is exact, he is not an insurer. The article lent is subject to the kind and mode of use for which it is designed ; and the risk of such losses as are fairly incident thereto is with the owner, unless the bailee has failed in any particular of his duty with regard to it. Belter v. Schultz 5 illustrates this. The owner of a flag lent it to be hoisted on the bailee’s building, and, having assisted to hoist it, left it flying when he went away ; the flag was afterwards injured by a hailstorm. The Court held that the owner could not recover for the damage, on the ground that the thing lent was made on purpose to be used as a flag, and the propriety of exposing it in the situation in which it was injured could not be questioned by the plaintiff, as it was in substance his own act, and the bailment was not shown to have been abused. To the rule of diligence just stated there are two exceptions : i (a) Where there is a special contract ; when the obligationsof the bail- ment are, of course, determined by the terms of i t. To this head may be referred a case put by Story : 6 “If the lender is aware of the incapacity of the borrower, he has no right to insist upon such rigorous diligence. He has a right to insist on that degree of diligence only which belongs to the age, the character, and the known habits of the borrower.” A 1 9 C. & P. 383. 2 1 1 M. & W. 113. » Lx. I IS. 4 Bain v. Strang, Hi Rot tic, 180; Sutherland v. Hutton, 23 Rcttio, 718; Pot tier. PrftaUsage, n. ‘iOetseqq. If the article perish through neglect or imprudent conduct, the borrower must pay the value : Niblett v. White’s Heirs, 7 La. Rep. 253, the case of borrowing a slave. See ■post, Carriers for Hire. 5 38 Am. R. 280. (i Bailm. § 237. VARIOUS RELATIONS. 773 CHAP. I.] loan in these circumstances would seem to be in the nature of a contract, made with reference to the peculiarities of age, character, and habit of the borrower. Thus, the loan of a valuable horse to a notoriously reckless rider would be on special terms applicable to such rider. (b) Where the loan is not for the benefit of the borrower alone ; (b) Where for, if it is for the mutual benefit of the borrower and lender, only t } 10 loai1 is . for ,. J the mutual ordinary diligence is required. 1 benefit of The borrower is exempted from liability for losses by inevitable borrower and accident or the act of God. Still there must be no default on the part leilder - of the borrower, otherwise his responsibility remains. 2 So it does if he is guilty of fraud vel suppressione veri vel allegatione falsi? In the case of a conflict of duty, as where the borrower’s goods and Conflict of the goods borrowed are both jeopardised by fire in circumstances clut y- where one set of goods can be saved, though not both, Story, 4 differing from Pothier 5 and Sir William Jones, 6 considers the true test of liability to be, whether there is any negligence in not saving the borrowed goods ; and whether there is any superior duty of the borrower to save them and sacrifice his own. By superior duty the learned commentator, of course, means a duty arising out of the facts and circumstances, which would be the proper material for the in- ferences of a jury, and not a general duty by law, the existence of authority to support which he denies. Another controversy under this head of law is whether, in the case On what of a valued loan, or where the goods are estimated at a certain price, principle com- the borrower must be considered as bound in all events to restore either jlxecTirm^so the things lent or the value. 7 Story is of opinion 8 that at common of loss, law the solution turns wholly on the construction of the words of the particular contract. The mere estimation of a price will not settle the point, whether the borrower takes upon himself every peril, or any additional perils beyond those provided for by the common rules of law ; for it will be considered as a mere precaution to avoid dispute in case of a loss, unless some circumstances raise a presumption that the parties intend something more. 9 (2) The obligation of the borrower is to use the loan according to the (2) The bor- expressed or known intention of the lender. rower to use This use is strictly confined to what is expressed or implied in the ^oordhi^ to particular transaction. The illustration of this given by Sir William the intention Jones 10 is: “If William, instead of coming to London, for which °f the lender, purpose the horse was lent, go towards Bath, or, having borrowed him for a week, keep him for a month, he becomes responsible for any accident that may befall the horse in his journey to Bath, or after the expiration of the week.” 11 1 Bailm. § 237. 2 Jones, Bailm. 07, 68, 09, 104, 105. 3 Jones, Bailm. 70. 4 Story, Bailm. § 249 b. * Pr.'t a Usage, 56. See ante, 745. 6 Bailm. 69. 2 The controversy has grown from two texts of the Roman law — one, D. 13, 6, 5, § 3 : Et si forte res cestirnata data sit, omne periculum proestandum ab eo, qui cestima- tionem se proestaturum reeepit ; the other, D. 19, 3, 1, § 1 : xEstimalio autem periculum facit ejus, qui susccpit ; aut igitur ipsam rem debebit incorruplam reddere, aut ceslima- tionem de qua convenit. 8 Bailm. § 253 a. 9 The Code Civil, art. 1883, has settled that in such a ease the loss shall be the borrower’s if he can show no agreement to the contrary. io Bailm. 68. 11 Cp. 2 Ld. Raym. 915. The rule of the Roman law was, Qui jumenta sibi commo- dala longius duxerit, alienave re, invito domino, usus sit, furtum facit : D. 47, 2, 40. In D. 13, 6, 23, the case is put of the horse being lent for a purpose for which it is unfit : Si commodavero tibi equum, quo utcreris usque ad cerium locum, si nulla culpa lua interveniente, in ipso itinere deterior equus faclus sit, non teneris commodali ; nam ego 774 NEGLIGENCE IN LAW. [book V. (3) The borrower must restore the t iling lent in a proper condition. Is liable for all casualties resulting during his wrongful detention of the thing lent. But is not liable for the negligence of third persons not his agents. Obligation of the lender set out by Coleridge, J. In Doctor and Student 1 the distinction is pointed between the case of the borrower of a horse riding by a ruinous house in manifest danger of falling ; where, if the house fall and kill the horse, the lender is entitled to have the value ; and the case of the house being in good condition and overthrown by a sudden tempest with the same result, when the borrower is held discharged. If the borrower is put to any expense in using the thing, he must bear this himself ; though any expense incurred upon the thing lent not arising out of his use of it, the borrower is entitled to be recouped by the lender. 2 (3) The obligation of the borrower is to restore the thing lent in a proper condition. 3 This must be when demanded at the common law ; for, as the bail- ment is merely gratuitous, the lender may terminate it whenever he pleases. If he does so unreasonably, and occasions injury or loss to the borrower thereby, the latter may, perhaps, have a suit for damages where the object of the bailment has been only partly accomplished and there has not been any laches of the bailee. If the bailee retains the thing, and a suit is brought by the lender, he may insist upon the unreasonableness of the demand or the injury to himself, and thus, perhaps, he may have brought whatever he has lost into account in the damages. If the borrower do not on demand return the thing lent, he is responsible for all losses and injuries, and even for all accidents, subsequently resulting. 4 In general the borrower’s liability is limited to his own negligence or to that of persons for whom he is responsible. 5 So that, if loss arises from the wrongfid act of a third person which the borrower could neither foresee nor prevent, he is not responsible ; and his immunity is not lost if the deterioration is the result of the use he makes of the loan, provided that the use is reasonable and within the contemplation of the parties. 6 The obligations of the lender are lastly to be considered. “ It is surprising how little in the way of decision in our Courts is to be found in our books upon the obligations which the mere lender of a chattel for use contracts towards the borrower. Pothier, in his Traite du Pret a Usage, to be found in the 4th volume of his works by Dupin, part 3, pp. 37 to 42, enters into the subject at some length ; and Story also treats of it ; Bailment, § 275. The principles, which these two writers draw mainly from the Roman law, may be the more safely relied on as being engrafted into the common law, considering that the whole of this in culpa ero qui in tarn longurn iter commodavi, qui cum laborem suslincre non poluit. In the Roman law, if the borrower used the commodatum for a purpose other than that for which it was lent, he was liable to an actio jurti : Inst. 4, 1, 6-8. 1 Dial. 2, c. 38. Jones Bailm., 08. 2 Story, Bailm. § 256. Nam cibariorum impensce ... ad cum . pertinent qui utendum acccpisset : D 13, 6. 18, § 2. Quidquid in rem commodatum oh morbum, vcl alxam rationcm impensum est., a domino rccipi potest : Paul us, Sent. Rec. 2, 4, 1. 3 Story, Bailm. § 257. Si reddita q u ide rn sit res commodata , sed deterior rcddila. non videbitur reddita, quee deterior facta redditur, nisi quod interest, praestetur ; propmc cnim dicitur res non reddita, quee deterior redditur : D. 1 3, 0, 3, § 1 . 4 Jones, Bailm. 70 ; Noy, Maxims, c. 43. He is liable to hand over all gains made by him by it, which are acquired by using the commodatum in a way not authorised by the contract : D. 13, 0, 13, § 1 : Si quern queestum fecit is, qui expcrievdnm quid accepit, vclut si jumenta fuerint eaque locata sint, idipsum preestabit, qui experiundum dedit ; nequa cnim ante earn rem queestui caique esse oportet, priusquam perieulo cjus sit. 3 Jones, Bailm. 08 ; 2 Kent, Comm. 570. i* Pothier, Traite du Pret ii Usage, n. 38. Cp. I). 13, 0, 23. VARIOUS RELATIONS. 775 CHAP. I.] branch of our law is so mainly built on the Roman, as the judgment in Coggs v Bernard 1 demonstrates. It may, however, we think, be safely laid down that the duties of the borrower and lender are, in some degree, correlative. The lender must be taken to lend for the purposes of a beneficial use by the borrower ; the borrower, therefore, is not responsible for reasonable wear and tear ; but he is for negligence, for misuse, for gross want of skill in the use ; above all, for anything which may be qualified as legal fraud. So, on the other hand, as the lender lends for beneficial use, he must be responsible for defects in the chattel, with reference to the use for which he knows the loan is accepted, of which he is aware, and owing to which directly the borrower is inj ured. Adjuvari quippe nos, non decipi, beneficio oportet, is the maxim which Story borrows from the Digest ; and Pothier is express to the same effect, citing, as Story does also, the instance, Qui sciens vasa vitiosa commodavit, si ibi infusum vinum, vel oleum corruptum efjusumve est, condemnandus eo nomine est. This is so consonant to reason and justice that it cannot but be part of our law. Would it not be mon- strous to hold that, if the owner of a horse, knowing it to be vicious and unmanageable, should lend it to one who is ignorant of its bad qualities, and conceal them from him, and the rider, using ordinary care and skill, is thrown from it and injured, he should not be responsible ? The principle laid down in Coggs v. Bernard , 2 and followed out by Lord Kenyon and Buller, J., and by Lord Tenterden in the Nisi Prius cases cited in the note , 3 that a gratuitous agent or bailee may be responsible for gross negligence or great want of skill, gets rid of the objection that might be urged from want of consideration to the lender. By the necessarily implied purpose of the loan a duty is contracted towards the borrower not to conceal from him those defects known to the lender which may make the loan perilous or unprofitable to him.” 4 Coleridge, J.’s view was adopted in Coughlin v. Gillison . 5 Knowledge of the defect in the article lent must be brought home to the lender before any right of the borrower to recover can arise. If there are any defects in the article known to the lender it is his duty to communicate them to the borrower, and if either deliberately or by gross negligence 6 he fails to do so he is liable for injury resulting to the borrower. The doctrine of Dalloz 7 that the lender’s liability arises when there is in fact a latent defect which he ought to have known and disclosed “ is not consonant with English law.” 8 1 2 Ld. Raym. 909 ; 1 Sm. L. C. (11th ed.), 173 ; but see Holmes, The Common Law, 180 et seqq. 2 2 Ld. Raym. 909. 3 I.e., in 1 Sm. L. C. (4th ed.) 163 ; citing Wilkinson v. Coverdale, 1 Esp. (N. P.) 75 ; Beauchamp v. Powley, 1 Moo. & Rob. 38 ; Doorman v. Jenkins, 2 A. & E. 256 ; Collett v. L. & N. IF. By. Co., 16 Q. B. 984. 4 Blakemore v. Bristol and Exeter By. Co., 8 E. & B., per Coleridge, J., 1050, dis- cussed per Cotton, L.J., Heaven v. Pender, 11 Q. B. D. 516. Most of the passage extracted in the text is quoted by Wilde, B., delivering the judgment of the Court of Exchequer, in MacCarthy v. Young, 6 H. & N. 336. See per Willes, J., Indermaur v. Dames, L. R. 1 C. P. 286. There is a case given in the civil law that may be noted. Si rein inspedori dedi, an similis sit ei, cui commodala est qucerilur. Et si quidem men causa dedi, dum volo prcetium exquirere, dolum mild tantum prcestabit. Si sui, et custodiam : et ideo furti habebit actionem. Sed et si dum rejertur, periit, si quidem ego mandaveram per quern remitleret pericxdum meum erit. Si vero ipse cui voluit, commisil, ceque mihi culpam prcestabit, si sui causa accepit. Qui non tarn idoneum horninem elegerit ut rede id per f err i possit. Si mei causa dolum tantum : D. 13, 6, 10, § 1, 11, 12. s (1899) 1 Q. R- 145. « Pothier, Traite du Pret a Usage, 80-84. i Jurisprudence Generate, Supplement, vol. xiii. 614. R Per Rigby, L.J., [1899] 1 Q. B. 149. VOL. II. I) 77G NEGLIGENCE IN LAW. [book V. Third class — Where the trust is for the benefit of both parties. Pawn — definition. What may be’ the subject of pawn. By the civil law. IV. Pawn or Pledge. 1 Of the kinds of bailments we have so far considered, deposit and mandate come under Story’s first class — those in which the trust is exclusively for the benefit of the bailor or of a third person ; while a gratuitous loan for use is to be referred to the second class, in which the bailment is exclusively for the benefit of the bailee. The bailment of pawn or pledge is referred to his third class— where the trust is for the benefit of both parties, or of both or one of them and a third party. A pawn, says Sir William Jones, is “ a bailment of goods by a debtor to his creditor to be kept by him till his debt is discharged.” The contract of pledging, says Kent, 2 is “ a bailment or delivery of goods by a debtor to his creditor, to be kept till the debt be discharged ; or, to use the more comprehensive definition of Story, it is a bailment of personal property, as security for some debt or engagement.” 3 The term “'pledge ” is used indifferently to denote the contract and the property which constitutes the security. Pledge is the 'pignus of the Roman law ; 4 and it is from this source that most of the principles governing the subject are derived. All kinds of personal property that are vested and tangible, and also negotiable pajier, may be the subject of pledge ; and choses in action, resting on written contract, may be assigned in pledge. 5 It is not necessary that the pledge should belong to the pledgor ; it is sufficient if it is pledged with the consent of the owner, 6 or if the pledgor have an interest in it. 7 In the civil law certain things, such as the necessary apparel and 1 There is a history of pawnbroking in Beckmann, History of Inventions, vol. iii. (2nd ed., 1814), 11, under the title Lending Houses. See 2 Bell. Comm. (7th ed.), 19, where the law of pledge is briefly, that of hypothec, fully treated. The terms pawn and pledge, pledgor and pledgee, pawnor and pawnee, are used interchangeably through- out the pages that follow on the subject of pawnor or pledge. 2 2 Comm. 578. Turner, The Contract of Pawn (2nd ed.), has a chapter, 25-30, on the definition of pawn. 3 § 286. Cp. Isaaclc v. Clark, 2 Bulst. 306. ■i Pignus, in the civil law, is one of the three jura in re aliena, superficies, emphyteusis, and pignus, which are not reckoned amongst servitudes. The doctrines of the civil law are to be found in the titles, De pignoribus, et hypothecis, et qualiter ca contrahantur, et de pactis corum, 1). 20, 1, and the five following titles ; in the title l)e pignerat ilia actione vel contra, D. 13, 7 ; and see Pothier, Pandects, lib. 20, tit. 1-6. Pignus est quod propter rem creditam obligatur, cujusque rci possessionem solum ad tempus can- sequitur creditor, ceterum dominium penes debitorem est : lsidor, Etymologarium, lib. v. 22. Proprie pignus dicimus, quod ad creditorem transit ; hypothecam cum non transit, nee possessio ad creditorem : D. 13, 7, 9, § 2. Pignus appellalum a pugno ; quia res quae pignori danlur manu tradunlur ; unde eliam videri potest, verum esse, quod quidam putant, pignus proprice rei mobilis constitui : D. 50, 16, 238. See Maynz, Elements de Droit Romain, vol. ii. 279 ; Du contrat de gage Pignus ; Pothier, Traite du Contrat de Nantissement, n. 5. The civil law is, however, not wholly consistent with the foregoing definition ; it says : Pignus contrahitur non sola traditione, sed cliam nuda convcnlionc, etsi non Iradilum est. iii igitur contract-urn sit pignus nuda conven- tione, vidcarnus, an si quis aurum oslenderit, quasi pignori dalurus, el aes dederit, obliga- veril aurum pignori ? Et consequcns est ut aurum obligctur, non autem ces ; quia in hoc non conscnscrint : D. 13, 7, 1, § 1. This does not appear to be the law of England: Donald v. Hackling, L. R. 1 Q. 13. 585. s 2 Kent, Comm. 578, citing ( inter alia) Roberts v. Wyatt, 2 Taunt. 268. See an article on the pledge of shares in Joint Stock Companies, Law Mag. (1838) vol. xix. 389. ® Story, Bailm. §291. " Donald v. Suckling, L. R. 1 Q; B. 585. The general rule applicable to such cases is that of the Civd Law : Nemo -plus juris ad odium transferre potest quam ipse haberct : D. 50, 17, 54. Non plus habere creditor potest, quamhabet, qui pignus dedit : D. 20, 1,3, § 1. Pothier, Traite du Contrat de Nantissement, n. 27. Code Civil, art. 2279, et seqq. VARIOUS RELATIONS. 777 CHAP. I.] furniture, beds, utensils, and tools of the debtor, his ploughs and other utensils for tillage, the pension or bounty of the monarch, and the pay and emoluments of officers and soldiers were not allowed to be pawned. 1 By the common law the pay — whether full or half pay — of soldiers and sailors is exempted. 2 By statute there are a variety of exceptions for different purposes, 3 the detailed consideration of which is remote from the subject of negligence. The rules applicable to contracts generally determine the capacity of persons to enter into the contract of pawn. 4 The duty of the pledgor by the civil law is : (1) To indemnify the pledgee against all liabilities which he incurs in trying to sell the property at the best price. 5 (2) To deliver up the pledge when required for sale if it has been left in his hands on hire or as a precarium . 6 (3) In some cases to pay compensation, e.(j., when he has pledged a res aliena ? The duty of the pledgee is : (1) To return the property pledged when the pledge is determined. 8 (2) To give up to the pledgor all fruits derived from the pledge, or to deduct their value from the amount of the debt. 9 (3) To answer for any negligence in the custody of the pledge, and if it has been sold, to account for anything received beyond principal and interest. 10 By the common law. Capacity to enter into the contract of pawn. Duty of pledgor by the civil lav/. Duty of the pledgee by the civil law. The duty of the pledgee to the pledgor by English law is expressed Duty of the in a sentence by Blackburn, J. : 11 “In general, all that the pledgor ^gee to the requires is the personal contract of the pledgee that on bringing the English law. money the pawn shall be given up to him, and that in the meantime the pledgee shall be responsible for due care being taken for its safe custody.” The common law draws a distinction between a mortgage and a Distinction pledge. By a mortgage the whole legal title passes to the mortgagee, between subject to be divested on a contingency. By a pledge 12 only a special property passes while the general property remains in the pledgor, 13 hypotheca- or, as it is expressed in Casey v. Cavaroc : 14 “ The difference ordinarily fcl011 > ancl ben. 1 Domat, bk. 3, tit. 1, § 1, arts. 24-27. 2 McCarthy v. Goold, 1 Ball & Beat. (Ir.) 387 ; Harwich v. Reade, 1 H. Bl. C27 ; Lidderdale v. Montrose, 4 T. R. 248, where an action by the assignee against the assignor on his covenant is suggested. Cp. Lucas v. Harris, 18 Q. B. I). 127 ; followed In re. Saunders, [1895] 2 Q. B. 117, and considered in C. of A. 424 ; Crowe v. Price, 22 Q. B. D. 429. 3 See them cited, Turner, Contracts of Pawn (2nd ed.), pp. 41-44. ■t Pollock, Contracts (7th ed.), 52. 5 D. 13, 7, 22, § 4. 6 D. 13, 7, 22, § 3. As to precarium, see Hunter, Roman Law (3rd ed.), 380. 7 D. 13, 7, 1, §2. s D. 13, 7, 9, § 3 ; D. 13, 7, 20, § 2 ; D. 13, 7, 40, § 2. 9 D. 13, 7, 22, pr. ; Code 4, 24, 1 ; Code 4, 24, 3. In the case of an estate or building an agreement might be made that the creditor eo usque retinet possessionem pignoris loco, donee illi pecunia solvatvr, cum in usuras fructus percipiat, aut locando, ant ipse percipiendo habitandoque : D. 20, 1, 11, § 1. This was called antichresis, id est mutuus pignoris usus pro credito ; as to which see Domat, bk. 3, tit. 1, § 1, art. 28. io Moyle, Just. Inst. 3, 14, 4. n Donald v. Suckling, L. R. 1 Q. B. 015. 12 A mere pledge of chattels personal, though in writing, need not bear a mortgage stamp : Harris v. Birch, 9 M. & W. 591 ; In re Attenborough and the Commissioners of Inland Revenue, 1 1 Ex. 461. See what is said of Harris v. Birch in Sewell v. Burdick, 10 App. Cas., per Lord Selborne, C., 80. 13 Ryall v. Rowles, 2 Wh. & T. L. C. in Eq. (0th ed.), 799 ; 4 Kent, Comm. 138 ; Story, Bailm. § 287. In the Roman law, however, inter pignus autem et hjjpothccorn tantum nominis sonus differt : D. 20, 1, 5, § 1. See 2 Spence, Eq. Jur. 771. i* 96 U. S. (6 Otto) 467, 477. NEGLIGENCE IN LAW. Hypotheca- tion. Pledge and lien dis- tinguished. Pledge requires possession. Effect of temporary resumption of possession by the owner for a Special purpose. 778 [book V. recognised between a mortgage and a pledge is, that title is transferred by the former, and possession by the latter.” Hypothecation is where a pledge is held without possession by the pledgee . 1 The power of a master to bind a ship, says Lord Hardwicke, is called hypothcca, yet there is no delivery of possession . 2 In the common law, says Story , 3 the nearest approach to an hypothecation is found in the cases of holders of bottomry bonds , 4 of material men, and of seamen for wages in the merchant service, who have a claim against the ship in rem. Lastly, a pledge differs from a lien in that a lien does not convey the right to sell, which attaches to a pawn when redeemable at a day certain or after notice , 5 but only to retain till the debt in respect of which the lien was created has been satisfied . 6 Possession is of the essence of a pledge, and if possession be once given up, the pledge as such is extinguished . 7 This possession need not be actual, and may be merely constructive ; as where the key of a warehouse containing the goods pledged is delivered, or a bill of lading is assigned . 8 There are cases where constructive delivery draws with it a transfer of the property ; as, for instance, the assignment of a bill of lading which is necessary to give constructive possession, yet which transfers the title also. The effect of this is to unite two different forms of security — mortgage and pledge. There is a mortgage by virtue of the title, a pledge by virtue of the possession. The same is the case with the transfer of notes and bills. A re-delivery for a mere temporary purpose, as for shoeing a horse which has been pledged and is owned by the farrier, or for repairing a carriage which has been pledged and is owned by the carriage-maker, does not amount to an interruption of the pledgee’s possession. The owner is but a mere special bailee for the creditor . 9 The possession of the pledge remains in the eye of the law in the pledgee, although actually delivered back to the pledgor . 10 Thus when the debtor who 1 D. 13, 7, 9, § 2, supra, 770, note ; Inst. 4, 0, 7. 2 Ryall v. Rowles, 2 Wli. & T. L. C. in Eq. (6th ed.), 810. Sewell v. Burdick, 13 Q. B. D., per Bowen, L. J., 175 ; 10 App. Cas, per Lord Blackburn, 95. 2 Bailm. § 288. 4 The Gratitudine, 3 C. Rob. (Adm.) 240, Tudor, L. C. Merc. Law (3rd ed.), 34. s Tucker v. Wilson, 1 P. Wins. 201 ; in II. L. 5 Bro. P. C. 193, sub nom. Wilson v. Tooker. Post, 781. 6 “ A lien is a personal right, and cannot be transferred to another”: per Buller, J., Daubigny v. Duval, 5 T. R. 000. See also M’Combie v. Davies, 7 East, per Lord Ellenborough, 0 ; Midliner v. Florence, 3 Q. B. D. 484 ; Jones v. Pearlc, 1 Str. 557 ; where it was held that, except by the custom of London, an innkeeper has no right to sell horses on which he has a lien for their keeping. In Lickbarrow v. Mason, 0 East, 27, Buller, J., having distinguished the owner of goods from one having a lien on them, says : “ he who has a lien only on goods has no right so to do [i.e., sell or dispose of the goods as he pleases] ; he can only retain them till the original price be paid.” 2 Pothier, De Nantissement, n. 8. “ Possession,” says Erie, C.J., Martin v. Pa id, 11C. B. N. S. 735, “ is an equivocal term ; it may mean either actual manual possession or the mere right of possession.” See 2 Kent, Comm. 581, with Mi 1 . Holmes’s note to 12th ed., Pledge. 8 Pignus manenlc proprietate debitoris, solam possessionem transfert ad credilorem : potest tamen et precario et pro conducto debitor re sua uti : 11. 13, 7, 35, § 1. Si pignus mihi traditurn locassem domino, per locationem relineo possessionem : quia, antequam conduceret debitor, non juerit ejus possessio ; cum et animus mihi rclinendi sit, ct con- ducenti non sit animus possessionem apiscendi : D. 13, 7, 37. For a series of French decisions on the proposition that possession by the creditor is not incompatible with a certain co-operation of the debtor for the conservation of the pledgor, see Casey v. Cavaroc, 96 U. S. (6 Otto) 407. Babcock v. Lawson, 5 Q. B. 1). 284, is a case of possession obtained by fraud of the pledgor. Nash v. De Frivillc, 1 1900] 2 Q. B. 72. '■> Casey w. Cavaroc, 90 U. S. (6 Otto) 407 ; 2 Bell, Comm. (7th ed.) 22. 1( ) North Western Bank v. Poynter, Son & Macdonalds, [1895] A. C. 56. The law chap, i.] VARIOUS RELATIONS. 779 is also the pledgor, is employed in the service of the creditor, who is at the same time the pledgee, the pledgor’s temporary use of the pledged article in the pledgee’s business, does not effect a restoration of the possession to the pledgor. This is very clearly put in Reeves v. Capper. 1 Reeves v. Wilson, captain of a ship, p'edged his chronometer, then in the possession Capper. of the makers, to defendants, the owners of the ship, in consideration of their advancing him £50, and allowing him the use of the instrument during a voyage on which he was about to depart. After the voyage he placed it at the makers, and while there pledged it to plaintiff, for whom the makers, being ignorant of the pledge to defendants, agreed to hold it. The money advanced by defendants not having been repaid, it was held that the property in the instrument was in the defendants, the shipowners. Tinclal, C.J., thus explains the principle applicable : “ We agree entirely with the doctrine laid down in Ryall v. Rolle , 2 that in the case of a simple pawn of a personal chattel, if the creditor parts with the possession he loses his property in the pledge ; but we think the delivery of the chronometer to Wilson under the terms of the agreement itself was not a parting with the possession, but that the possession of Captain Wilson was still the possession of Messrs. Capper ” ; “ just as the possession of plate by a butler is the possession of the master ; and the delivery over to the plaintiff was, as between Captain Wilson and the defendants, a wrongful act, just as the delivery over of the plate by the butler to a stranger would have been ; and could give no more right to the bailee than Captain Wilson had himself.” 3 A delivery to the pledgor with a power of substituting (where the Delivery w debtor is in possession) other securities is not such a delivery as will prevail against the rights of third persons. The presumption of law other is that those who deal with the pledgor do so on the faith of his being securities, the unqualified owner of the goods. Bad faith will thus defeat a pledge, though coupled with possession ; yet want of possession is equally fatal, though the parties have acted in good faith. To constitute a valid pledge, both possession, and possession in good faith, are requisite. 4 Delivery, we have seen, is essential to the constitution of a pledge ; Delivery and may be effected without physical change of the possession of the effected goods. 5 of Scotland is the same. According to the law of Scotland, to constitute a valid pledge change of of movables, there must be a delivery of them to the pledgee. A joint possession is possession, not enough. When the movables intended to form the subject of the security are stored in the premises of the pledgee, a simple averment of possession by the pledgee is insufficient. An allegation must be made that these goods were placed in a particular room, that the door had then been locked, and the key given to the pledgee so as to show facts equivalent to an assertion of actual possession : Mess v. Hay, [1899] A. C. 233, 240. i 5 Bing. N. C. 136. See Bateman v. Green, Ir. R. 2 C. L., per O’Brien, J., 191 ; in Ex. Ch., per Monahan, C.J., 611, afid. H. L. June 18, 1872 (not reported), stib now,. •London Financial Association Ltd. v. Bateman. 2 1 Atk. 165. 3 By the civil law, where property is already in the hands of the pledgee, as on a loan or on deposit, a species of tradition known as brevis manus is feigned, the effect of which is that the pledgee is taken to have yielded up his possession by way of loan or deposit, and simultaneously to have received it again as pledge : Pothier, Traite du Contrat de Nantissement, n. 8. 4 Casey v. Cavaroc, 96 U. S. (6 Otto) 490. “ The requirement of possession is an inexorable rule of law, adopted to prevent fraud and deception ; for, if the debtor remains in possession, the law presumes that those who deal with him do so on the faith of his being the unqualified owner of the goods.” 5 Mills v. Charlesworlh, 25 Q. B. D. 421 ; Griyg v. National Guardian Insurance Co., [1891] 3 Ch. 206. Incidents of pawn. 780 NEGLIGENCE IN LAW. [book v. Till possession is given the intended pledgee has only a right of action on the contract and no interest in the thing itself. 1 Con- structive or symbolical delivery of possession is, however, sufficient when actual possession cannot be given. 2 By the civil law, a contract to deliver operated on the property ; and property of which a man had neither a present possession not a present title, and which might be acquired by hi m in futuro, might be the subject of a valid pledge, and the same principle applies in the English law. 3 A pawn may be sold to defray the debt for which it is a security, 4 subject to certain restrictions ; if the pledge is for an indefinite time the pawnor has his whole lifetime in which to redeem, 5 unless the creditor exercises his right of calling on the pledgor to redeem, which he may do by giving him reasonable notice to redeem on a certain day ; then, if, after a proper demand and notice, 6 he fail to redeem, the pledgee may sell the pledge. 7 If he dies without such call being made, the right to recover descends to his personal representatives. 8 9 When the pawn is for a stipulated time, and the debt is not paid at the time, the absolute property does not pass to the pledgee. At the expiration of the time stipulated for, he has his right to sell ; if he does not exercise this right he retains the property as a pledge, and upon a tender of the debt he may at any time be compelled to restore it (for the Statute of Limitations does not apply to the case of a pawn ! '), because the creditor holds not in his own but in another’s right. 10 It follows that if the creditor puts up the pawn for sale and purchases it himself, the pledgor has a right to treat the sale as invalid. 11 The sale being voidable merely, there must be some period within which the pledgor must make his election to avoid it or not. He will not be allowed to wait and to speculate upon the changes of the market ; his intention will have to be declared with reasonable promptitude ; 12 and this is a matter which the Court will supervise. The principle has been extended to the mortgagee of shares where, though no power of sale is expressly given, one has been implied on default by the mortgagor at the time named for payment ; or if no time has been named after the expiration of the time specified in a reasonable notice requiring payment on a named day. 13 1 Howes v. Ball, 7 B. & C. 481. 2 Per Bowen, L.J., Burdick v. Sewell, 13 Q. B. D. 174. For what is constructive delivery, Hilton v. Tucker, 39 Ch. D. 009. See also Donald v. Suckling, L. R. 1 Q. B. per Blackburn, J., 613. 3 D. 20, 1, 15. Holroyd v. Marshall, 10 H. L. C. 191. 4 Pothonier v. Dawson, Holt (N. P.), per Gibbs, C.J., 385; Burdick v. Seurll, 10 Q, B. D., per Field, J., 367 ; Ex parte Hubbard, 17 Q. B. D., per Bowen, L.J., 098. 3 lie. nip v. Westbrook, 1 Ves. Sen. 278 ; Cortelyou v. Lansing, 2 Caines (Cases in Error), 200 ; Garlick v. James, 12 Johns. (Sup. Ct. N. Y.) 140. As to the benefit of a bonus, Vaughan v. Wood, 1 My. & K. 403. g Pigot v. Cubley, 15 C. B. N. S., 701 : a notice demanding payment of an excessive sum has been held bad. 7 Deverges v. Sandeman, Clark 1 f 0 a pawn pensable to the faithful discharge of the duty of the pawnee. 4 pawnee. (2) If the pawn is of such a nature that it will be worse for the use, such, for instance, as the wearing of clothes which are deposited, the use is prohibited to the pawnee. 5 (3) If the pawn is of such a nature that the keeping is a charge to the pawnee, as if it is a cow or a horse, the pawnee may milk the cow and use the milk, and ride the horse by way of recompense (as it is said) for the keeping. 6 (4) If the use will be beneficial to the pawn, or is indifferent, it seems, that the pawnee may use it. 7 (5) If the use will be without injury, and yet the pawn will thereby be exposed to extraordinary perils, the use is impliedly inter- dicted. 8 Holt, C.J., 9 says that jewels, earrings, or bracelets pawned to a Wearing lady may be used by her ; though the use is at her peril, because she i ewels is at no charge in keeping the pawn, and “ if she wears them abroad and pawnec ' is there robbed, she will be answerable.” To this Story 10 replies: “ The reason here given, so far from proving that the pledgee may lawfully use the jewels, expressly negatives any such right. And, unless the contrary is expressly agreed, it may fairly be presumed, that the owner of such a pawn would not assent to the jewels being used as a personal ornament, and thereby exposed to unnecessary and 1 Cp. as to diligence of pledgee, Montague v. Slelts, 34 Am. St. R. 736. 2 McLemore v. Louisiana State Bank, 91 U. S. (1 Otto), per Davis, J., 29, citing 2 Kent, Comm. 579 ; Story, Bailm. § 339 ; and Commercial Bank v. Martin, 1 La. Ann. 344. 3 Ante, 760, 783. 4 Jones, Bailm. 80 : “ If Caius deposit a dog with Titius, he can hardly be supposod unwilling that the dog should be used in partridge shooting, and thus be confirmed in those habits which make him valuable.” 6, Anon. 2 Salk. 522 ; Coggs v. Bernard, 2 Ld. Raym. 916 ; Mores v. Conham, Owen, 123, 124. i c Kent, 2 Comm. 578, says, if the pledgee “ derives any profit from the pledge, ho must apply those profits towards his debt.” Story, Bailm. § 329, note 1 (9th ed.), disputes this, citing Mores v. Conham, Owen 123, and referring to other cases and the Abridgments under Distress. 7 Jones, Bailm. 81. See Thompson v. Patrick, 4 Watts (Pa.) 414, where, besides holding that a pawnee may use the pawn provided it is not the worse for it, it is added that if he uses it tortiously he is answerable by action only, and his lien is not thereby forfeited. 8 Story, Bailm. §§ 329, 330. » Coggs v. Bernard, 2 Ld. Raym. 917, approved by Sir Wm. Jones, Bailm. 81. io Bailm. § 330. • 786 NEGLIGENCE IN LAW. Duties owing l>y the pawnor to the pawnee. Expenses of the pawnee incurred on the pawn. Decision under the Pawnbrokers Act, 1872. Third class — Where the trust is for the benefit of both parties. Contract of hire. [BOOK V. extraordinary perils.” The opinion of Story seems the more just, since family jewels might not improbably be the subject of similar considerations to those pointed out in Duke of Somerset v. Cookson 1 and Pusey v. Pusey . 2 Not only is the risk to the pawnor increased by their use, but the responsibility of the pawnee may be a wholly inadequate assurance for restitution or compensation. So much, then, on the general principles of liability for negligence of the pawnee. There are, besides, duties owing by the pawnor to the pawnee, which we are now shortly to consider. A pawnor, by the act of pawning, impliedly engages that he is the owner of the property pawned, and, unless he gives notice of a different interest, that he is the general owner, and that he has a good right to pass the property in the pawn. 3 He is bound to good faith, and is responsible for all fraud, both in the title and in the inception of the contract ; 4 although he does not- warrant the property, Si sciens creditor accipiat vel alienum, vel obligatum, vel morbosum, contrarium ei non competit . 5 By the civil law the pawnor must reimburse the pawnee all expenses and charges necessarily incurred by the latter to preserve the pawn, even if the benefit results through the happening of some subsequent accident. Story 6 finds no decision in the common law on the point. He is of opinion that, in the case of an express contract to pay ordinary charges and expenses, its terms ought to govern ; where there is no express declaration, an implication, if it arise, should have the same effect. Independently of the justice of this conclusion, it seems, he says, “ reasonable that extraordinary expenses and charges which could not have been foreseen should be reimbursed by the pawnor.” The Pawnbrokers Act, 1872, 7 has already been noticed. By it the earlier Acts relating to pawns and those making a business of pawning are repealed and consolidated. 8 A decision under the principal of these 9 calls for notice. In Syred v. Carruthers 10 the Queen’s Bench held that there is no primd facie presumption that a fire on the premises of a pawnbroker, by which a pledge in his possession is destroyed, is caused through the default, neglect, or wilful misbehaviour of the pawnbroker so as to authorise the pawnor to obtain compensation under the Act. By sec. 27, however, the pawnbroker is put under an absolute liability to make good, subject to certain deductions, the value, to be ascertained as therein directed, of pledges damaged or destroyed by fire ; and he is by the same section empowered to insure to the extent of such value. 11 Y. The Contract of Hire. To Story’s third class of bailments— that in which the trust is for the benefit of both parties, or of both or one of them and a third person — is to be referred the contract of hire. i 3 P. Wins. 390. 2 1 Vcrn. 273. 3 Story, Bailm. § 354. & Story, Bailm. § 355. 5 D. 13. 7. 1(5, § i. 6 Bailm. § 357. ' 7 35 & 3(5 Viet, c. 93. 8 The old Act, 1 Jac. I. c. 21, as to the liabilities of pawnbrokers, is finally and com- pletely repealed by the Sale of Goods Act, 1893 (5(5 & 57 Viet. c. 71 ), s. (50. o 39 & 40 Geo. I II. c. 99, s. 24. 10 E. B. & E. 469. As to liability for accidental fire, see also 14 Geo. III. c. 78, s. 86, ante, 492, et seqq. 11 As to theft by the servant of a pawnbroker, see Arm field v. Mercer, 2 Times E. R. 764. For an exhaustive note on (lie law of pledge, see Luckelts'v. Townsend, 49 Am. VARIOUS RELATIONS. 787 CHAP. I.] I in money. The designation of this contract in the civil law is locatio conductio. The definition of it is, “ Locatio conductio est contractus quo de re fruenda vel facienda pro certo pretio convenit . 1 Igitur tria duntaxat lmnc con- tractum constituunt : res quce fruenda aut facienda conceditur, pretium 2 quo pro ea fruenda aut facienda dart convenit, et consensus circa supra dicta . 3 It was ordinarily essential for the pretium to be paid in money. In Ordinarily the case of productive property, however, as a farm or farm-stock, P^“ mtobe payment might by agreement be in the fruits or increase. Mommsen’s opinion is that “ the payment must necessarily consist in money ; in consequence of which the produce lease among the Romans comes under the contingencies occurring in practical life, though not falling within the theory of jurisprudence.” 4 Other commentators do not assent to this view . 5 The employer who gives the reward is called locator operis, the Definitions, letter of the work, but conductor operarum, the hirer of the labour and services. On the other hand, the party who receives the pay is called locator operarum, the letter of the labour and services, but conductor operis, the hirer of the work . 5 Kent’s definition of this contract is “ a contract by which the use of Kent’s a thing or labour or services about it are stipulated to be given for a defmitlon - resonable compensation, express or implied.” 7 Story 8 defines it, “ a Story’s Dec. 730-738. For the pawnbroker’s liability for burglary where he has left his house unprotected, Shaclcell v. West, 2 E. & E. 320. See also Bell, Principles of the Law of Scotland (9th ed. ), 135. As to the remedies for illegal pawning, Leicester v. Cherry man, [1907] 2 K. B. 101. 1 Pothier, Pand. lib. 19, tit. 2, part 1, art. 1, § 1. Locatio et conductio proximo est emptioni et venditioni ; hisdemque juris regulis constitit. Nam ut emplio et venditio ita contrahitur, si de pretio convenerit ; sic et locatio et conductio contrahi inlelligitur, si de mercede convenerit : D. 19, 2, 2, pr. ; Inst. 3, 24, pr. See Hunter, Roman Law (3rd ed.), 505-514. 2 Pretium autem constitui oportet nam nulla emplio sine pretio esse potest : Inst. 3, 23, § 1. Cp. Sale of Goods Act, 1893 (50 & 57 Viet. e. 71), ss. 1, 8, 9. If either party was left to fix a price at his discretion, the contract was void : D. 18, 1, 35, § 1 ; although hujusmodi emptio, quanli tu cum emisti quantum pretii in area habco, valet : D. 18, 1, 7, § 1. As to hire, Pothier, Traite du Contrat de Louage, n. 37. s Alluding to a sentence from Paulus, Locatio et conductio cum naluralis sit, et omnium gentium non verbis sed consensu contrahitur ; sicut emptio et venditio : D. 19, 2, 1. The definition in Maynz, Elements de Droit Romaiu (2nd cd.), vol. ii. 197, is : 11 y a contrat dc louage quand une parlie s' oblige d procurer d l' autre l' usage d'une chose, ou d faire quelque chose pour elle, rnoyennant un prix d payer par cette demit re. Maynz specifies three essentials to the contract — (1) L’ usage d'une chose ou de services de- termines d mellre d la disposition du conductor, rnoyennant un prix determine ; (2) Lc prix doit lire serieux et certain et consistcr en une somme d' argent determinie ; (3) Dis qu'il y a consentement sur le prix et la chose, le contrat est par I ait ; aucunc jormaliti n'est requise. 4 2 Mommsen, 432, cited from Hare, Contracts, 90. Where the hire of a farm was a proportion of the produce, the tenant was called colonus partiarius. See Pliny, Epist. ix. 37. D. 19, 2, 25, § 6 : Partiarius colonus, quasi societatis jure, et damnum et lucrum cum domino fundi partitur. 5 Hare, Contracts, 91. Cp. Jones, Bailm. 118, where, by his definition, he con- fines letting to hire to cases where pecuniary compensation is given ; 8(5, where he speaks of the contract being for a “ stipend or price of the hiring ” ; and 93, where he classes all other cases as innominate contracts. 6 Story, Bailm. §309. Jones, Bailm. 90, note (r), the conclusion of which runs ; “ So, in Horace, ‘ Tu secanda mar morn Locas,' which the stone-hewer or mason conduxit." See the explanation of this in Poste’s Gaius (4th ed.), 374, that delivery and re-delivery is the fact exclusively regarded in the Latin language ; and the bailor is denoted by locator, and the bailee by conducto , without regarding the incident that while in locatio-conduclio rei ovoperarum, the locator supplies a service for which the conductor pays the price, in locatio-conductio operis facicndi, it is the locator who pays the price and the conductor who performs the service. 7 2 Comm. 585 ; 1 Bell, Comm. (7th ed.) 274. 8 Bailm. §368. definition. Division of the subject. Requisites of the contract locatio con- uctio. First sub- division of hire. Obligation on the letter. Obligation on the hirer. 788 NEGLIGENCE IN LAW. [book v. bailment of a personal chattel, where a compensation is to be given for the use of the thing, or for labour or services about it ; or, in other words, it is a loan for hire or a hiring or letting of goods or of labour and services, for a reward.” We have seen 1 that this contract is susceptible of a double division : (1) Into locatio or locatio conductio rei , the bailment or letting of a thing to be used by the bailee for a compensation to be paid to him ; and (2) Locatio opens, or the hire of the labour and services of the bailee for a compensation to be paid to the bailor. 2 This latter in its turn is susceptible of a subdivision into, first, locatio opens faciendi, or the hire of labour and work to be done, or care anti attention to be bestowed on the goods bailed by the bailee for a compensation ; and, secondly, locatio opens mercium, vehendarum, or the hire of the carriage of goods from one place to another for a compensation. An important distinction must be attended to, namely, that while one who hires the services of another is bound to see to the way in which they are performed, and will be answerable for injuries resulting from his negligence ; where there is a contract for the performance of work there attaches no such obligation ; because the contractor is not under the control or supervision of the person for whom the work is done. Story 3 specifies the requisites to this contract of locatio conductio, letting and hiring to be : (a) That the bailment should not be prohibited by law. ( b ) That it should be between persons competent to contract. (c) That there should be a free and voluntary consent between the parties. The more detailed consideration of these points does not belong to our subject, but must be referred to the general law of contracts. 1. Hire of Things. The first subdivision of locatio conductio is locatio rei, or the hiring of a thing. This we now proceed to consider. The obligation on the letter, according to the Roman law, was to allow the hirer, unless prevented by casus fortuitus, the full use and enjoyment of the thing hired, 4 which must be let in such a condition that it can be used for the purpose agreed on, 5 and to fulfil all his own engagements and trusts in respect to it, according to the original intention of the parties : Prcestare, frui licere, uti licere.” G The hirer is answerable for exacta diligentia in the case of the res locata. 1 By the hiring he makes a representation that he has the skill 1 Ante, 739. 2 Code Civil, arts. 1709, 1710 : Lc Louage dcs chases cst un contrat par lequel Vune des parties s' oblige a fa-ire jouir l' autre d’une chose pendant un certain temps, et moyennant un certain prix que celle-ci s' oblige de lui payer. Le Louage d'ouvrage cst un contrat par lequel Vune des parties s' engage it faire quelque chose pour l' autre moyennant un prix convenu enlre tiles. 2 Bailru. § 378. 1 D. 19, 2, 9, §§ 3, 4. 6 D. 19, 2, 19, § 1 : Si quis dolia vitiosa ignarus locaveril, deinde vinum eflluxerit tenebitur in id quod interest ; nec ignorantia cjus erit cxcusalu. D. 19, 2, 19, § 7, is oil a very curious point : Si quis mulierem vehendam navi conduxisset, deinde in nave infans natus juisset, probandum cst, pro infante nihil deberi ; cum ncque veclura cjtta inugnu sit, ncque is omnibus utalur, quee ad navigantium usum paranlur. Bracton, fol. 02 b ; c.p. Inst. 3, 24, 5. o Comm. Vin. in Just. Inst. 3, 25, 5, notes 2, 3. In judicio lam locati quam conduct i, dolum et custodiam, non eliam casum cui resisti non potest, venire constat : Cod. 4, 65, 28. Culpa autem abesl si omnia /acta sunt, qua: diligentissimus quisque observalurus juisset : D. 19, 2, 25, § 7. 7 Inst. 3, 24, 5. « Bailm. 80. 9 Bailm. 87. See note to Story, Bailm. § 398, note 8 (9th ed.), collecting the authorities ; 2 Kent, Comm. 587. io 3 Camp. 4. Cp. Eastman v. Sanborn , 85 Mass. 594. n See note by Campbell to Dean v. Keate, 3 Camp. 6. See, too, noto to Coggs v. Bernard, 1 Sm. L. C. (11th ed.), 173. 12 Pothier, Traite duContrat de Louage, nos. 190, 192,429. Cp. Tilling v. Balmain, 8 Times L. R. 517. VARIOUS RELATIONS. 793 CHAP. I.] father of a family would take of his own ; in other words, he is liable for ordinary negligence. If, then, he hire a horse, he is bound to ride it as moderately and to treat it as carefully as any man of common discretion would his own ; and the law implies that proper treatment includes feeding a horse . 1 If, in spite of this care and treatment, the horse is injured, the hirer is not responsible. To the same purport is a Nisi Prius ruling, that if a hired horse refuses its food from fatigue, the hirer is bound to abstain from using it, and that if he pursues his journey with the horse, he becomes liable for all injuries occasioned thereby . 2 But, as we have seen , 3 the particular acts of duty vary with the nature of the things on which they are to be bestowed. Still, the duty owed is in no case more than that of ordinary care, that is, the care that a man of ordinary capacity and caution exercising his faculties would take of the same thing if it were his own and in the same circumstances . 4 The obligation to take reasonable care of the thing entrusted to a Rule of bailee of this class involves in it an obligation to take reasonable care 0 tllc that any building in which it is deposited is in a proper state, so that condition of the thing therein deposited may be reasonably safe in it ; thus, in the building Searle v. LavericJc , 5 a shed was blown down by a high wind, and property [” i; nSo, too, the expression “ best materials ” does not signify those abso- lutely the best, but materials that would be comprehended in the class of best materials when applied to work of the class with reference to which they are to be used. Again, secondly, it must be borne in mind that in the case of Searle v. Laverick 3 the bailee was bound only to use that ordinary care in the keeping of the article bailed which is required from an ordinary bailee for hire, while in Grote v. Chester and Holyhead Ry. Go., 4 the degree of care extracted is that of a carrier of passengers, which is the most exact diligence. There is, therefore, no conflict between the cases, since they are applied to circumstances in which different degrees of care are requisite. As a general rule, in the contract locatio rei the hirer is bound only to ordinary care and diligence, and is answerable for ordinary neglect ; for the bailment of hiring of a thing is for the mutual benefit of letter and hirer. The hirer is bound to exercise the same degree of care for the preservation of goods entrusted to him, in the case of their storage, as may reasonably be expected from a skilled storekeeper acquainted with the risks to be apprehended either from the character of the store- house itself, or of its locality. This comprehends the duty of taking all reasonable precautions to obviate these risks, and, in addition, the duty of taking all proper measures for the protection of the goods when such risks are imminent or actually occur. In Brabant v. King, 5 where the Government, being bailees for hire, stored the appellant’s explosive goods in sheds near to the water’s edge and through a heavy flood the goods were immersed and rendered valueless, the Privy Council held that, however justifiable the selection of such a site may have been, it yet imposed on those responsible for the charge of the goods the duty of making arrangements within the store to place them so as to ensure their immunity from the incursion of flood water. The hirer is bound to use the article with due care and moderation, and not to apply it to any other use, or to detain it for a longer period, 1 L. R. 9 Q. B. 122. 2 C Q. B. D. 088. See The Merchant Prince, [1892] P. 9, 179, where, nogligcnce having been disproved, the defendants were held not bound to go further and show (he cause of the defect or obstruction that wrought the injury. 3 L. R. 9 Q. B. 122. «2 Ex. 251. 6 [1895] A. C. 032. VARIOUS RELATIONS. 795 CHAP. I.] than that for which it was hired . 1 If he uses the thing hired in a different way or for a longer time than the terms of the hiring allow, he becomes liable for all accidents happening to it while under his control, even though they may arise from inevitable accident. But where a horse was let to a minor to be moderately ridden, and lie returned it in a bad condition, the King’s Bench held that there was no power to convert what arose out of a contract into a tort for the purpose of avoiding the plea of infancy ; so that as the minor was not chargeable on the contract he was not to be made liable in respect of a tort incidental to it . 2 Where the thing has perished while in the possession of the hirer, Whore re- and so a re-delivery of it is become impossible, the hirer is excused delivery from the performance of his promise to re-deliver, unless the loss has ; m p 0ss ibie. resulted from his fault or from a risk which he has undertaken . 3 The onus of showing negligence is, in some cases, thrown on the Onus of show- letter ; so that a hirer is not bound to prove affirmatively that ke 11 ^ 11 ^ 11 ' used reasonable care , 4 though he is bound to account, that is, to give ° an explanation of the cause of the loss or injury . 5 It has, however, been held not enough to show that a horse which was let sound was returned with its knees broken . 6 The position of the bailor if the bailee returns the article hired in a Where thing damaged condition becomes dependent on the character of the damage bailed ^ done. The bailor commits his property to the bailee on the undertaking damaged' 11 most generally implied that he will take due care of it. In ordinary condition, circumstances good faith requires that, if the property is returned in a damaged condition, some account should be given of the time, place and manner of the occurrence of the injury. If, then, the bailee returns the property in a damaged condition, and fails to give any account of the matter, the law will authorise a presumption that he has been negligent ; because where there is no apparent cause for the accident, and the bailee has possession, he must show how the accident 1 Story, Bailm. §§ 397, 398, 413-415 ; Jones, Bailm. 68, 69, 121. 2 Jennings v. Rundall, 8 T. R. 335 ; but cp. Burnard v. Haggis, 14 C. B. (N. S.) 45, where a minor was held guilty in trespass, for injuring a horse he had hired. See W alley v. Holt, 35 L. T. (N. S.) 631, where the limitations of the decisions are discussd ; Green v. Greenbank, 2 Marsh. (C. P.) 485 ; Roll. Abr. Action sur Cas. (D) vers hosteler 3 ; with which cp. Cross v. Andrews, Cro. Eliz. 622 ; see also the preface to 4 R. R. ; Mills v. Graham, 1 B. & P. (N. R.) 140 ; and Liverpool Adelphi Loan Association v Fairhurst, 9 Ex. 422, 427. In 2 Kent, Comm. 240 et seqq., the authorities are well set out. See also Mr. Holmes’s note to the 12th ed., 241, note 1: Torts connected with Contracts. 3 Taylor v. Caldwell, 3 B. & S. 826. Nickoll and Knight v. Ashton, Edridge, [ 1 90 1 J 2 K. B. 126 ; Krell v. Henry, [1903] 2 K. B. 740. Cp. Chicago, Milwaukee and St. Paid Ry. Co. v. Hoyt, 149 U. S. (42 Davis) 1. In Williams v. Lloyd, Sir Wm. Jones, 179, it was said : “ When a man agrees to deliver a horse to another and it dies, without default or negligence of the defendant, in this case the bailee shall be dis- charged,” In Lloyd v. Guibert, L. R. 1 Q. B. 121, the proposition is enunciated: that by the common law “ a person who expressly contracts absolutely to do a thing not naturally impossible is not excused from non-performance because of being prevented by the act of God or the king’s enemies”; Paradinev. Jane, Aleyn, 26. With these ci^ses should be considered Rhodes v. Forwood, 1 App. Cas. 256, and Turnery. Goldsmith, [1891] 1 Q. B. 544 ; the former case was decided on the ground that where there was no express contract to employ an agent in the circumstances there set out, no such contract would be implied ; the latter, on the ground that the defendant had given up business and made no attempt to renew it, and that a condition sought to be implied by the defendant that his manufactory, which was burnt down, should continue to exist, was not to be imported into the contract between plaintiff and defendant. 4 Harris v. Packwood, 3 Taunt. 264 ; Marsh v. Horne, 5 B. & C. 322. 5 The subject is very fully discussed by Coulter, J., Logan v. Mathews, 6 Pa. St. 417 ; 2 Parsons, Contracts (8th ed.), 125. o Cooper v. Barton, 3 Camp. 5. Cp. Handford v. Palmer, 2 B. & B. 359. 796 NEGLIGENCE IN LAW. [book V. Scotch cases on onus. Binny v. Veaux. Robertson v. Ogle. happened. The bailor need only point out the deteriorated condition of the article. 1 If, however, the deterioration is the natural con- sequence of wear and use the bailor must give other evidence to dis- charge the onus and to raise a case of neglect or misuse. 2 There are a hundred probable causes of a horse falling and breaking its knees quite apart from any default in the bailee. If not an ordinary incident of keeping a horse, such an occurrence is consistent with absence of negligence, and so negligence must be shown and will not be presumed. 3 Again, if a gilded mirror is lent and is returned tarnished, wear and tear will account for this, and in the absence of other circumstances is the reasonable explanation. 4 The onus then remains on the lender to show bad usage. But if the mirror is returned with a portion of its frame missing or cracked, the onus is shifted to the hirer to discharge himself of the negligence which primd facie is indicated. The Scotch cases on this point of onus are numerous and interesting, and certain of them may with advantage be considered here. The earliest reported dates back to 1679. 5 “ The Lords found, where a man hires a horse, if it die, or fall sick or crooked by the way (though he can prove that he rode modo debito, and not farther than the place agreed upon) yet the rider must prove the casus fortuitus quem nulla prcecessit illius culpa, nor negligence, and the defect or latent disease it had before he hired it ; and if he succumb in proving this, he must pay the price of the horse or the party’s damage and interest.” The reporter then comments on the decision thus : “ The Chancellor’s vote cast this decision, viz., that the rider should prove the accident and his own diligence, which is perquam durum. This is a difficult probation to burden the rider with, since horses may have latent diseases before the hiring.” In 1809 occurred the case of Robertson v. Ogle , 6 where a horse having been hired and returned useless, the Court held the proprietor was not obliged to prove actual maltreatment whilst the horse was out of his possession ; but “ if the horse’s malady arose from any cause for which the defender was not blameable, and which he could not control, the onus probandi lay upon him.” The matter was a second time brought before the Court, when Lord Cullen said : “ The horse had departed sound, and returned much damaged. The pursuer, Robertson, could not prove the treatment the horse had received in the interim when out of his custody ; but in a case of this kind, it was customary to follow the rule, that probatis extremis preesumuntur media.” The Lord Justice-Clerk said that, “ upon reconsidering the matter, he believed the rule laid down by Lord Cullen was the soundest to walk by ; although at first he had 1 Logan v. Mathews, G Pa. St. 417 ; Story, Bailm. §§ 411, 414 ; Malaney v. Taft, G Am. St. R. 135, the case of a horse hired to be driven to one place and driven to another without bailor’s consent ; the decision relied on Cooper v. Barton , 3 Camp. 5, note ; Skinner v. L. B. d> S. C. By. Co., 5 Ex. 787 ; Byrne v. Boadlc, 2 H. & C. 722 ; Scott v. London Docks Co., 3 H. & C. 59G. 2 Kearney v. L. <£> B. By. Co., L. R. 5 Q. B. 411 ; L. R. G Q. B. 759 ; Higgs v. Maynard, 11. & R. 581 ; Welfare v. L. <£• B. By. Co., L. R. 4 Q. B. G93 (Ex. Ch.) ; M off alt v. Bateman, L. R. 3 P. C. 115. 2 See post, 797,801. 4 In Fomfrct v. Bicrojt, 1 Wms. Saund. 321, at 323 b. Hale, C.J., is reported as saying : “ If 1 lend a piece of plate and covenant by deed that (lie party to whom it is lent shall have the use of it, yet if the plate be worn out by ordinary use and wearing without any fault, no action of covenant lies against me.” 6 Binny v. Veaux, Morison, Diet. Dec. 10079. e Decisions of Court of Session, June 23, 1809. VARIOUS RELATIONS. 797 CHAP. I.] been inclined, in this case, to give effect to the ordinary maxim, res perit suo domino. Had the horse died by an accident, there is no doubt he must have perished to Robertson.” The former judgment was adhered to. In Pi/ per v. Thomson , x decided in 1843, the hirer was held not Pyperv. liable where he showed that the accident sued arose from a vice of the Thomson. animal’s : “ The origin of the whole was the backing of the horse, which was the horse’s fault and not the defender’s.” Lord Justice- Clerk Hope states the law thus : 2 “I acknowledge as sound and just the rule, that if a person gets a horse, or indeed any article belonging to another, for use, on the contract of hire, and brings back that animal or article much injured, he in whose custody and charge it was, must be able to discharge himself of the care he was bound to bestow on the property of the other, by showing that he was not to blame in regard to the cause of the injury, and must in general case be able to show how the accident occurred.” In Wilson v. On, 3 the horse, whose loss was the subject of action, Wilson v. Orr. had died from the effects of a blow on the shoulder, which had been given whilst he was in the defender’s custody. How or when given there was no evidence to show. The Court held that it lay upon the defender to show the cause of injury, and at least to produce primd facie evidence that the cause was one for which he was not responsible ; and having failed in this he was liable for the value of the horse. Lord Gifford’s dictum in this case is noteworthy : 4 “ Unless some blame attaches somewhere, the general rule is res peril domino ,” and is a good working solution of the various difficulties that may arise. The last of these Scotch cases, 5 Bain v. Strang, illustrates the Bain v. general rule : res perit domino. A man borrowed a horse which, Slran r J- whilst doing its work, without any apparent reason stumbled and was injured. The Court “ assoilsied defender,” holding that he had discharged the onus on him to prove that he had exercised reasonable care in the use of the thing bailed. Lord Shand states the ride thus : 6 “ Where a horse, hired or lent, is taken out sound and brought back damaged, there is an onus on the borrower to show that the injury was not caused through his fault, and that it was sustained notwithstanding all reasonable care on his part.” “ If,” said Lord President Inglis, 7 “ the article is returned in a damaged condition, there is an onus on the borrower to show that the damage did not arise through his fault. It is argued that the onus is heavier than that, and that he is bound to show what was the specific cause from which the injury arose. I am not disposed to decide that question. . . . We have, I think, sufficient evidence to show that reasonable care was used.” The general rule, then, may be stated in the words above quoted General rule from Lord Gifford ; but the circumstances may vary infinitely. res perit Story 8 is of opinion that a misuser of property entrusted to a “* no bailee is at common law a conversion of the property. As we have blame seen in considering the subject of pawns, in English law this is not attaches, necessarily so. 9 A distinction must be drawn between those acts Is misuser which are altogether repugnant to the bailment and those acts conversion ?° 1 5 Dunlop, 498. 2 5 Dunlop, 499. 3 (1879) 7 Rettie, 200. 4 7 Rettie, 208. s (1888) 10 Rettie, 180. Cp. Exodus xxii. 14, 15. Sutherland v. Hutton, 23 Rettie, 718. Post, 800. 6 10 Rettie, 191. 7 10 Rettie, 189. s Story, Bailm. §413. See Cooper v. Willomatt, 1 C. B. 072 ; Loescliman v. Machin, 2 Stark. (N. P.) 311 ; F arrant v. Thompson, 5 B. & Aid. 820. s Ante, 782. NEGLIGENCE IN LAW. 798 [book V. Hire of horse and carriage with servant. Hire of ready - furnished lodgings. Coupe Co. v. Maddick. which, though unauthorised, are not so repugnant that by their mere existence they operate as a disclaimer and a determination of the holding. 1 To this head of localio rei must be referred that class of cases where a carriage and horses are hired, and the letter sends with them his coachman or servant ; 2 and also that class of cases where the re- sponsibility of a master for the use by his servants of the thing hired comes in question. 3 The greater leniency of the Roman law than of our own should be noted. Sir William Jones 4 gives the opinion of Pomponius, 5 which was generally adopted, and which makes the master liable only when he is culpably negligent in admitting care- less guests, or servants whose bad qualities he ought to know ; whereas in English law the master is liable for all acts, unless wilfully done for the servant’s own benefit or “ without the scope ” of the hiring. To illustrate the rule of the English law, Sir William Jones 6 gives the example of the hire of ready-furnished lodgings, where, if the hirer’s servants, children, guests, or boarders, negligently injure or deface the furniture, the hirer is responsible. The Coup6 Co. v. Maddick 7 affords another illustration. The plaintiffs brought an action in the County Court to recover damages from the defendant for injuries to a carriage and horse hired from them by the defendant. The injuries were caused by the man employed by the defendant to drive the carriage. After having driven his master home, he in breach of orders started on an entirely new and independent journey, on his own account, in the course of which the horse and carriage were injured. The County Court judge held the hirer not responsible, on the authority of Storey v. Ashton . 8 This involved a finding by the judge sitting as a jury, that the hirer was not negligent ; and that the man’s act was wholly outside his authority as servant. But the County Court judge’s decision was set aside by 1 Dorudd v. Suckling, L. R. 1 Q. B. 585, G15 ; Bac. Abr. Bailment (C); id. Trover, (C), (D), (E) ; Isaack v. Clark, 2 Bulst. 306, 309 ; 2 Wins. Notes to Saunders, 91. 2 Ante, 600. 3 Ante, 578 et seqq. M’ Manus v. Crickett, 1 East, 106 ; Crojt v. Alison, 4 B. & Aid. 590 ; Limpus v. London General Omnibus Co., 1 H. & C. 526, and the rest. Wharton cites a case (Negligence, § 716), from Mommsen, of a student hiring a horse from a livery stable keeper, which, when he arrived at his destination, he gave to the ostler, who fastened the horse so negligently in its stall as to suffocate it. Mommsen is of opinion that the student could not be reasonably expected to know about the fastening of a horse, and that he is liable for ignorance only of what he could be reasonably expected to know. Wharton, however, is of the opposite opinion : “ If I hire a horse 1 must see that he is safely kept as well as safely driven, and if I take the horse under my care, the owner of the horse has as much right to presume that I know how to tie him as that I know how to drive him.” “ Secondly, even supposing the first point to fail, the maxim Respondeat superior here comes in.” I am unable to agree with either of these opinions. In the first place, the duty is not to tie the horse up person- ally, but to take proper care to hand him to a proper person ; secondly, the delivery of a horse to an ostler at an inn does not seem to me to constitute any relationship of master and servant. On the other hand, in America, Hall v. Warner, 60 Barb. (N. Y.) 198, would be an authority. The law in Scotland is clear that “ a person who hires a horse is not responsible for the culpa of those (ostlers of inns and others) to whom in the course of a journey he properly entrusts it ” : Smith v. Mdvin, 8 Dunlop, 264. The point might have been raised in Coupe Co. v. Maddick, [1891] 2 Q. B. 413. The judges, however, do not even allude to it. 4 Bailm. 89. 5 1). 19, 2, 11. fi Bailm. 89, citing Pothier, Traite du Contrat dc Lounge, n. 193. Cp. Code Civil, art. 1735. v [1891] 2 Q. B. 413. » L. R. 4 Q. B. 476. VARIOUS RELATIONS. 799 CHAP. I.] the Divisional Court 1 on two grounds: first, that the owner could Judgment of maintain no action against the servant for breach of duty in the t wrongful and negligent use of the horse and carriage by which they were damaged ; “ because . . . there was no invasion by the servant of the latter’s (the owner’s) right of ownership, and no contractual relation between them ” ; and, secondly, “ on general principles of the public benefit.” The decision is sustainable on neither. As to the former, 31 ears v. L. & S. W. Ry. Co., 2 is in point on the other side. As to the latter, Lord Field’s consideration in Bank of England v. Vag- liano 3 of the principle determining which of two innocent parties is to suffer where loss arises from the misconduct of a third person, negatives the proposition enunciated by the learned judges in the Divisional Court. 4 The question ruled on by the Court was : what in the circumstances of the case is the conclusion in law where there is no finding of a con- tract to be answerable specially ? The authorities 5 all point in one direction, and that in direct conflict with the learned judges’ decision. If the hirer rebuts the presumption of fault and shows that the injury happened in some way with regard to which he is free from blame, he is free also from liability. The Coupe Co. v. Maddick 6 was considered in Sanderson v. Collins 7 Sanderson. and treated with quite undue tenderness. The facts differed from y - Co'hns. The Couptf case only in that the coachman took his employer’s carriage 1 Cave and Charles, JJ. 2 11 C. B. N. S. 850. Meux v. G. E. Ry. Co., [1895] 2 Q. B., 387, very decisively states the principle. In Lotan v. Cross, 2 Camp. 464, Lord Ellenborough held that a mere gratuitous permission to a third person to use a chattel does not in contempla- tion of law take it out of the possession of the owner, who may maintain trespass for any injury done to it while so used. See this case criticised, Holmes, The Common Law, 173. As to what “ permanent injury ” is, see Mumjord v. Oxford, Worcester, and Wolverhampton Ry. Co., 1 H. & N. 34. On the general matter. Roll. Abr. Action sur Cas., (0) vers qui ces gist ; and Bullen and Leake, Prec. of Plead. (3rd ed.), 395. 3 [1891] A. C. 169. As to “ public policy,” see per Parke, B., advising the House of Lords in Egerton v. Brownlow, 4 H. L. C. 123 ; also Pollock, Contracts (7th ed.), 312, and ante, 726. ^ See Law Magazine (4th ser.), vol. xvii. 97-118. “ For a wilful act intrinsically wrong by a servant the master is not liable.” “ There can be no action except in respect of a duty infringed and ” “no man by his wrongful act can impose a duty ” : per Bramwell, B., Degg v. Midland Ry. Co., 1 H. & N. 782. s Story, Bailm. § 402, Agency, §§ 452-457 ; Coleman v. Riches, 16 C. B. 104. Cp. also 35 & 36 Viet. c. 93, s. 8 ; Armfield v. Mercer, 2 Times L. R. 764. The rule of the Roman law is thus stated by Ulpian : Mihi ita placet, culpam etiam eorum quos induxit, preestet suo nomine, etsi niliil convenit ; si tamen culpam in inducendis admiltit, quod tales habuerit, vel suos vel hospites : D. 19, 2, 11. Si hoc in locatione convenit, ignem ne habeto, et habuit, tenebitur, etiam si fortuilus casus admisit incendium : quia non debuit ignem habere. Aliud est enim ignem innocentem habere permittit enim, sed innoxium ignem : D. 19, 2, 11, § 1. Article 1732 of the Code Civil is : II ripond des degradations ou des pertes qui arrivent pendant sa jouissance, d moins qu’il ne prouve qu’ dies ont eu lieu sans sa faute. Pothier, Traite du Contrat de Louage, n. 199, says : Le locataire est decharge de V obligation de rendre la chose, si la chose a peri sans sa faute ; mais il doit enseigner et justifier comment die a peri, aUtrement die est presumee avoir p(vi par sa faute, et il est tenu de V estimation. Compare also the case stated by Mommsen ante, 798. The Dutch law provides that the lessee “ is bound to make good all losses or damages, which by his own delicts, or by the neglect of his household, or even by any others out of hatred to the lessee, have been occasioned to the property hired. And the ignorance of any art that the party undertakes, or a trifling imprudence in matters which can only be carried on with the greatest prudence, is considered as a neglect ; as also fire, unless the lessee proves it to be the effect of inevitable accident ; in which case, the same as in all other misfortunes, he is not liable to make compensation to the lessor, except when a person stipulated a sum for the safe keeping ” : Grotius, Introduction to Dutch Jurisprudence (Eng. trans. by Herbert), bk. iii. c. 19, Of Letting and Hiring, sec. 11. e [1891] 2 Q. B. 413. 7 [1904] 1 K. B. 628. 800 NEGLIGENCE IN LAW. [book V. Abrahams v. Bullock. Cheshire v. Bailey. Loss follow- ing wrongful user but not necessarily consequent on it. out of the coach-house for his own purposes : in The Coupd case the coachman was told to take the carriage to the stables, but instead of going there and perhaps going through the form of unharnessing and then harnessing the horse and setting out on his journey, he took the short cut and without superfluous trouble drove off on his own business. Legally the two cases are indistinguishable ; and in the latter the Court of Appeal stated the bailee’s obligation to be to use “ ordinary care,” or, as it is alternatively stated, “ reasonable care.” A bailee, like the master in The Coupi case, or in Sanderson’s case, is liable if his servant in the course of his employment fails to “ use reasonable care in the custody of the carriage.” But he is not responsible “ for the acts of persons who are not his servants in respect of particular acts — that is, who are not acting within the scope of their employment in doing those acts. If a burglar broke into the coach-house, and took away the carriage and caused damage to it and brought it back, no liability would attach to the bailee, because the act would not be his, and he would not be responsible for the acts of a person between whom and himself there was no connection. But while not responsible in such a case, yet if his servant, whose duty it was to keep the carriage safely, had been negligent in leaving the coach-house open, and the carriage were taken away, the master would be liable, because of the negligence of a person for whom he is responsible.” “ If the servant, in doing any act, breaks the connection of service between himself and his master, the act done under those circumstances is not that of the master.” The cases of Abrahams v. Bullock 1 and Cheshire v. Bailey 2 are complementary one to the other and mark the different aspects of this principle of law. In Abrahams v. Bullock, the coachman, who was liired with the horse and brougham by a traveller in jewellery, left his horse and brougham when the traveller went to his lunch in order to get his own dinner, and horse, brougham and jewellery — the traveller’s stock— were all stolen. There was a breach by the servant of his master’s contract, with the performance of which he was entrusted. He was negligent in not carrying out. the duty he was employed to perform, to look after the hirer’s effects during his temporary absence. In Cheshire v. Bailey 3 the facts were broadly the same, with, however, the vital distinction in principle, that the coachman, in concert with confederates, when the traveller left the brougham, drove it off in order that he and they might share the plunder of the jewellery that was in it. They were all convicted of the felony. The jobmaster was “ not responsible for the consequences of the crime committed by the driver in this case, which was clearly outside the scope of his employ- ment.” “ It is a crime committed by a person who in committing it severed his connection with his master and became a stranger ; and as the circumstances under which it was committed are known, it raises no presumption of negligence in the defendant.” The case of a user that is wrongful, and a loss following, but not necessarily through the wrongful user, has been put ; and answered by Tindal, C.J., 4 as follows : “ The real answer to the objection is that no 118 Times L. R. 701. 2 [1905] 1 Iv. 13. 237. 3 LI 905] 1 K. B. 237. 4 Davis v. Garrett, 0 Bing. 724. In Adams v. Royal Mail Steam Packet Co., 5 C. 13. (N. S.) 492, there was twofold delay. First, the charterers had no cargo at the place of loading when the ship was ready to receive it ; secondly, after the cargo arrived VARIOUS RELATIONS. 801 CHAP. I.] wrongdoer can be allowed to apportion or qualify his own wrong ; and that as a loss has actually happened whilst his wrongful act was in operation and force, and which is attributable to his wrongful act, he cannot set up as an answer to the action the bare possibility of a loss, if his wrongful act had never been done. It might admit of a different construction if he could show, not only that the same loss might have happened, but that it must have happened if the act complained of had not been done.” Sir William Jones’s view 1 is : “ If the bailee, to use the Roman Sir William expression, be in mora, that is, if a legal demand have been made by the Jones ’ s V1CVV - bailor, he must answer for any casualty that happens after the demand ; unless in cases where it may be strongly presumed that the same accident would have befallen the thing bailed even if it had been restored at the proper time ; or, unless the bailee have legally tendered the thing, and the bailor have put himself in mora by refusing to accept it ; this rule extends, of course, to every species of bailment.” This is not exactly in point, since stress is laid upon a legal demand, and by the necessity of the case under discussion no legal demand can Discussed, be made. The reasonable ride seems to be that the responsibility arises if the act is such as to warrant the plaintiff making a legal demand. If this be so, the case may be referred to the distinction between acts which determine the bailment and acts that only sound in damage. The practical effect is very similar ; since, if legal demand be presumed, the hirer is responsible for any casualty happening after the demand. If the deviation from the lawful use does not warrant a legal demand, on proof of the loss and of the unlawful dealing with the bailed article, a presumption arises importing similar liability — viz., for the whole value of the thing lost or injured — and which is only to be rebutted by showing the same accident would have happened irre- spective of the negligent and wrongful user. Sir William Jones’s language, on the strength of the presumption that the accident would have in any case happened, does not seem adequate. He who, having undertaken a bailment, loses the article bailed in circumstances importing negligence, cannot escape liability on any presumption that if the negligence had not occurred the loss would still have occurred. He is put to show that whether he was or was not negligent, in all human probability the same result would have befallen, before he can be excused . 2 In Davey v. Chamberlain 3 the action was for negligently driving a Davcy v. chaise, whereby the plaintiff’s horse was killed. The two defendants Chamberlain. were proved to have been together in the chaise when the accident happened ; Chamberlain was sitting in the chaise smoking while the other was driving. Chamberlain contended that he was not liable, as the injury proceeded from the ignorance or unskilfulness of the other defendant, who was driving, and in charge of the horse and chaise. there was a further delay in loading, owing to a strike among the colliers. The Court held the charterers liable for the delay, and no distinction was made between the first period and the second. But for the first delay the second might have been immaterial : see per Williams and Byles, JJ., l.c. 494. , i Bailm. 70, 71. 2 Davis v. Garrett, G Bing. 716 ; Lilley v. Doubleday, 7 Q. B. D. 510 ; Wharton, Negligence, § 559. 3 4 Esp. (N. P.) 229. Very like this is Muse v. Stern, 3 Am. St, R. 77, where defendant, being driven in his partner’s phaeton by his partner’s servant, was held not liable for an accident by which plaintiff was injured. See a note to 2 Parsons, Contracts (8th ed.), 121. Cab cases Metropolitan Hackney Carriage Acts. Morley v. Dunscombe. Powlcs v. Hider. Fowler v. Lock. 802 NEGLIGENCE IN LAW. [book v. Lord Ellenborough’s direction was : “ If a person, driving his own carriage, took another person into it as a passenger, such person could not be subjected to an action in case of any misconduct in the driving by the proprietor of the carriage, as he had no care nor concern with the carriage ; but if two persons were jointly concerned in the carriage, as if both had hired it together, he thought the care of the King’s subjects required that both should be answerable for any accident arising from the misconduct of either in the driving of the carriage, while it was in their joint care.” Cab cases. — The relation of cabman and cab proprietor is anomalous, partaking in some of the incidents of bailment of a thing, locatio ref, while others of its analogies are more akin to the relation of master and servant. In London the rights and liabilities of cab proprietor and cabman are fixed by the Metropolitan Hackney Carriage Acts, 1 as interpreted by a series of cases. The first case to be noted is Morley v. Duns- combe ; 2 where the Court of Queen’s Bench held that the arrangement between proprietor and man, that the proprietor should receive a certain sum and that the man should keep the excess of his receipts over it, constituted “ clearly an arrangement between the defendant and the man as to the mode in which the wages of the latter should be paid.” The same question was raised in Poides v. Rider. 3 Plaintiff, while travelling in a cab of which the defendant was the proprietor, lost his luggage by the fault of the driver, and sued the defendant on a contract to carry the luggage. Defendant contended that he was not liable, because the relation between himself and the cabman was that of bailor and bailee. The Queen’s Bench, however, held that, under the Acts of Parliament, the driver was to be considered the servant or agent of the proprietor, and decided in accordance with Morley v. Dunscombe. Fowler v. Lock 4 5 differed from Powles v. Rider in that the action was by the cabman against the cab proprietor. Plaintiff was a driver upon the same terms as those proved in Powles v. Hider, and was hurt in consequence of the horse running away. A verdict was given for the plaintiff, with leave to move reserved to enter a verdict for the de- fendant or a nonsuit. The Court was divided, Grove and Byles, JJ., holding the relation between the cabman and the cab-master to be that of bailor and bailee, and the master liable ; while Willes, J., considered that the case came within Powles v. Rider, and that the relation was that of master and servant. 6 Poivles v. Rider was distinguished, by the majority of the Court, on the ground that the Metropolitan Hackney Carriage Acts referred only to the relation between carriage proprietors and people generally, and were not to be construed to alter the relations 1 1 & 2 Will. IV. c. 22 ; 3 & 4 Will. IV. c. 48 ; C & 7 Viet. c. 80 ; 10 & 17 Viet. cc. 33, 127 ; 30 & 31 Viet. c. 134 ; 32 & 33 Viet. c. 115 ; 50 & 00 Viet. c. 27. What is a “ hackney carriage ” is considered in Hawkins v. Edwards, [ 1 901 J 2 K. 15. 109. By 0 & 7 Viet. c. 80, s. 28, where the driver of a hackney carriage by carelessness or wilful misbehaviour causes hurt or damage to any person or property in the street or highway, a justice may, on complaint, adjudge a sum of not more than £10 to the party aggrieved to be paid by the proprietor, who may recover the same from the driver. 2 11 L. T. (O. S.) 199. s o E. & B. 207. 4 (1872) L. It. 7 C. P. 272 ; L. R. 9 C. P. 751 note. Mention is made of these cases in Smith v. Bailey, [1891] 2 Q. B. 403. 5 “ Speaking for myself,” says Williams, L.J., Gates v. R. Bill <0 Son, [1902] 2 K. B. 41, “ in spite of the great authority ( f Willes, J., the dissentient judge in that case, I agree with the reasoning of the majority of the Court, as did Cockburn, C.J., in the case of Venables v. Smith.” VARIOUS RELATIONS. 803 CHAP. I.] between the cab-master and the cabman. The effect of this view very largely increases the liabilities of the cab-master, and very considerably improves the position of the cabman ; for the cab-master, as regards the outside world, is thus liable as for the acts of a servant ; while as regards the cabman, he is fixed with the ordinary liabilities arising in the case of a bailor and bailee. The subsequent history of this case is curious. The decision was Result on the appealed from, and the judges in the Exchequer Chamber were divided a PP eal - in their opinions upon it ; but as those judges who were of opinion that the cabman was bailee were not satisfied that it followed necessarily that there was a warranty that the horse bailed was fit for the purpose for which it was bailed, and it might be that the plaintiff took upon himself the risk of its fitness, a new trial was ordered. On the new trial the jury found that there was personal negligence on the part of the defendant in the selection of the horse ; and the Common Pleas refused a third trial . 1 2 Thus the reconsideration of the case was avoided ; since if the cab-master and cabman were related as master and servant, then the master was liable for personal negligence ; while if the relation was that of bailor and bailee, he was liable on the bailment. In Venables v. Smith 2 the action was by an outside person against Venables v. the cab proprietor. Plaintiff was run over through the negligence of a Smith - cabman after the day’s work was over, and when executing some private business of his own. Plaintiff sued the cab proprietor. The Court followed the decision in Powles v. Hider. Cockburn, C.J., said: “ Independently of the Acts of Parliament relating to this subject, the relation between them — i.e., the driver and the proprietor— would be that of bailor and bailee, not that of master and servant.” “ But I think that the provisions of the Acts of Parliament alter what would otherwise be the relation of the proprietor and the driver, and for the purpose of the public produce the result that, as regards mischief done by the driver, who is selected by the proprietor, the relation of master and servant so far exists as to render the proprietor responsible for the acts of the driver.” 3 4 A limitation on Powles v. Hider and Venables v. Smith was suggested in King v. Spun 4 — that a cab proprietor who lends out a cab for a King v. certain stipulated sum, the driver supplying the horse and harness, is s P urr - liable under the Acts; but Grove and Bowen, JJ., distinguished the case. In many cases the effect of the statutes is to create the relation of master and servant — indeed, is sufficient to raise the presumption that that is the relation in all, but not to create the relation in all ; and a case where the horse and harness are not supplied by the cab proprietor is not within the Acts. In King v. London Improved Cab Co ., 5 however, Lord Esher, M.R., King v. said : “I have come to the conclusion that by virtue of the Act the London public are entitled, whether as between the proprietor and the driver ^ >rovc Cah 1 L. R. 10 C. P. 90. 2 (1877) 2 Q. B. D. 279; Playle v. Kew, 2 Times L. R. 849. Venables v. Smith was approved by the Court of Appeal in King v. London Improved Cab Co., Limited, 23 Q. B. D. 281. 3 Steel v. Lester, 3 C. P. D. 121, was the case of a ship navigated under a verbal agreement, where it was held that the agreement did not amount to a demise of the vessel, and that whatever was the precise relationship between the master and the owners, both were liable for negligence of the master in the management. The cab cases were much considered in the case. 4 (1881)8 Q. B. D. 104. 5 23 Q. B. D. 281. Keen v. Henry. Gates v. R. Bill <£• Son. Summary. Locatio operis. 804 NEGLIGENCE IN LAW. [book v. the relationship of master and servant exists or not, to say that so far as the public arc concerned that relationship must be deemed to exist.” Lindlcy, L.J., suggested a distinction saving King v. Spun : “ I will only add that the regulations as to what has to be registered and accessible to the public seem to be based on the supposition that where a proprietor allows persons to drive his cabs in the public streets, such persons, so far as the public are concerned, are to be deemed servants of the proprietor. All the cases, except King v. Spun, 1 are consistent with this view, and that case may be distinguishable, though the distinction may not be a very broad one, for there the cab only was hired by the driver and the horse was his property.” This suggestion was seized upon in Keen v. Henry 2 as distinguishing that case from King v. London Improved Cab Co., and identifying it with King v. Spun, but was repudiated by the Court of Appeal. “ It is evident,” says Kay, L.J., 2 3 * “ that the Lord Justice did not think the distinction a sound one ” ; and Lord Esher, M.R., added : “ It must be understood that we are all of opinion that King v. Spun has been overruled.” The trend of the cases was recognised as concluding the law in Gates v. R. Bill & Son 4 : “ By virtue of the provisions of the Hackney Carriage Acts the cabdriver must, as regards the general public, be assumed to be for all purposes the servant of the cab proprietor.” In the case before the Court the dispute was whether a mother who was in partnership with her son as a cab proprietor, but who was not registered, could be brought within the scope of the Acts. “ It would be a strange thing,” says Romer, L.J., 5 “ if a cab proprietor whose duty it was to obtain a licence could by disregarding that duty and illegally carrying on his business without a licence, escape from the liability to which he would have been subject if he had performed that duty.” The law as to cabs in London may therefore be summarised in two propositions : (1) A cab-master stands to his cab-driver in the relation of master to servant wherever any act is done in the course of the cab-driver’s business, which causes any injury or liability to the outside world. 6 (2) Between cab-master and cabman the relation is that of bailor and bailee. 7 2. Hire of Labour and Services. We next consider the second class of bailments for hire — locatio, conductio operis , 8 or the hiring of labour and services. This, we have already seen, is divided into (i) locatio operis faciendi, (ii) locatio 1 8 Q. B. D. 104. 2 [1894] 1 Q. B. 292. 3 L.c. 296. 4 [1902] 2 K. B. 38. s L.c. 43. e Powles v. Hider, 6 E. & B. 207 ; Venables v. Smith, 2 Q. B. D. 279 ; King v. London Improved Cab Co., 23 Q. B. D. 281. v Fowler v. Lock, L. R. 7 C. P. 272 ; L. R. 9 C. P. 751 note, L. R. 10 C. P. 90. Where a driver has accidentally injured a street lamp in London, his employer is not liable for the damage done under sec. 207 of the Metropolis Management Act, 1855 (18 & 19 Viet. c. 120) : Harding v. Barker and Sons, 5 Times L. R. 42. Crystal Palace District Gas Co. v. Idris, 64 J. P. 452. The section is directed against any persons who “ carelessly or accidentally break, throw down or damage ” any street lamp. Sec. 58 of 57 Leo. III. c. xxix. was limited to damage done “ wilfully or carelessly.” Baylis v. Lintott, L. R. 8 C. P. 345, was an action against a hackney carriage proprietor for not securely carrying certain luggage belonging to a person who had hired his cart while plying for hire under the management of defendant’s servant. 8 Solim, Inst, of Roman Law (2nd ed. Eng. trans.), 420; Hunter, Roman Law (3rd ed.), 511-516. Locatio, conductio operis was said to be made per aversioncm, if the VARIOUS RELATIONS. 805 CHAP. I.] opens merdum vehendarum. First, then, as to locatio opens faciendi. This again is divided into two kinds — (^4) the hire of labour, or locatio opens faciendi strictly so called ; ( B ) locatio custodies, or the receiving of goods on deposit for a reward for the custody thereof. The conductor opens, in the Roman law, must execute and deliver the opus according to the specifications, and he is answerable for all defects, whether due to his own want of skill or to that of his workmen. 1 This liability exists till the acceptance and approval of the work by the locator , 2 If the work is destroyed before completion, the conductor is entitled to payment so far as he has gone, unless the contract is per aversionem . 3 The locator must pay the merces agreed on if the work is satis- factorily executed ; but if misled as to the price, he may withdraw from the contract. 4 (A) Bailees for the hire of labour or services. (A) Hire of A distinction must here be taken between the present case and labo . ur or those we have before had to consider. In the case of the hire of labour sei ' ices ‘ and services the bailor is to pay the hire ; whereas in the case of the hire of things the bailee is to pay it. 5 In the former case the phrase is Res facienda datur ; in the latter, Res utenda daturS' In the civil law another distinction was taken with regard to the Operas illi- hire of labour or services, between operce illiberales, where a man works Perales and in consideration of pay ; and operce liberales, which are not the sub- liberates. ject of hire, and for which the person requiring the services paid an honorarium. 7 A difficulty has sometimes arisen in determining whether a con- Sale of goods tract is for the sale of goods or for work and labour. Lee v. Griffin 8 and prescribes the test of whether when the contract is carried out it will a ” ,our ' result in the sale of a chattel. If so, in English law, the action cannot be brought for work and labour. If, on the other hand, work and labour have been done which result in nothing that can be the subject of sale, no action ean be brought for goods sold and delivered. 9 First, as to the position of the bailor in this relation of locatio Duties of the opens faciendi. Story, 10 following Pothier, sets out the duties on the bailor - part of the employer in the Roman law under the following four heads : (1) To pay the price or compensation. (2) To pay for all proper new and accessorial materials. contract was for the job at a fixed price. Per aversionem, c’ est-d-dire en bloc pour un seul et meme prix : Pothier, Traite du Contrat de Vente, n. 308; Pothier, Traite du Contrat de Louage, nos. 435, 436. 1 D. 19, 2, 25, § 7 : Qui columnam transporlandam conduxit, si ea dum lollitur aul portalur, aut reponitur fracta sit ita id periculum prceslat, si qua ipsius corumque, quorum opera uterelur, culpa accideret : culpa autem abest, si omnia facta sunt, quee diligenlissimus quisque observaturus fuisset. . . . Idemque ctiam ad ccelcras res transferri potest. For the use of diligentissimus her. see Jones, Bailm. 87. D. 19, 2, 13, §§ 5, 6. 2 D. 19, 2, 24, pr., but fides bona exigit ut arbilrium tale preestetur quale viro bono convenit. 3 D. 19, 2, 36, 37 ; or by vi nalura’i, l.c. 59. 4 D. 19, 2, 60, § 4. 3 Coggs v. Bernard, 1 Sm. L. C. (11th ed.) 194. See also next note. 6 Pothier, Traite du Contrat de Louage, n. 393. 7 Maynz, Elements de Droit Romain (2nd ed.), vol. ii. 206. 8 1 B. & S. 272, explaining Clay v. Yates, 1 H. & N. 73. See the judgment of Beardsley, J., Gregory v. Strylcer, 2 Denio (N. Y.), 628. Cp. D. 19, 2, 31. 2 The test adopted before the decision in the text was whether work and labour are of the essence of the contract : Clay v. Yales, 1 H. & N. 73. Cp. Atkinson v. Bell, 8 B. & C. 277. io Bailm. § 425, citing Pothier, Traite du Contrat de Louage, n. 405-410, 436, 437 ; 1 Domat, bk. 1, tit. 4, § 9. Bell, Principles of the Law of Scotland (9th ed.), 102. Destruction of article bailed pending completion. 80G NEGLIGENCE IN LAW. [book v. (3) To do everything on his part to enable the workman to execute his engagement. (4) To accept the thing when it is finished. To these he subjoins, quite superflously, on his own authority : (5) To be honest and observe good faith in his conduct. (This is an incident of all contracts.) ^ (6) To disclose defects to the other party. (This is included under the preceding head.) (7) To conform to the special stipulations contained in the contract. (This is not only included under (5) but is of the essence of the contract.) And he winds up : “ These duties are formally treated of by Pothier, 1 and they seem so clear upon principles of general justice that the common law could hardly be deemed a rational science if it did not recognise them ” — a conclusion that must command universal assent. There has been much discussion on the effect of a destruction of the article bailed pending completion or delivery. The sum of the results arrived at, after much conflicting and philosophical reasoning, may be stated as follows : If, while the work is in progress, or at any time before the time when it should be delivered to the employer, the thing, which is the property of the employer and upon which the work is being done, perishes by internal defect, by inevitable accident, or by irresistible force, without any default of the workman, the workman is entitled to compensation to the extent of the value of the labour actually per- formed on it, unless his contract import a different obligation ; for the maxim is Res perit domino. 2 If the workman has employed his 1 Traite du Contrat de Louage, 405-417. 2 2 Parsons (8th ed.), Contracts, 131. See ante, 797. In the Roman law this maxim applies only to the contracts of mutuum and commodalum. In emptio-venditio the rule is as in English law. Cum autem emptio et venditio conlracta sit . . . pcriculum rei venditce statim ad emptorem perlinet, tarn etsi adhuc ea res emptori tradila non sit. . . . Quidquid enim sine dolo et culpa venditoris accidit, in eo venditor securus est : Inst. 3, 23, 3. Bayley, J., thus states the English rule : “ Where goods are sold and nothing is said as to the time of delivery, or the time of payment, and everything the seller has to do with them is complete, the property vests in the buyer, so as to subject him to the risk of any accident which may happen to the goods ” : Bloxam v. Sanders, 4 B. & C. 948. Rugg v. Minett, 11 East, 217, per Lord Ellenborough, C.J. : “ Every- thing having been done by the sellers which lay upon them to perform, in order to put the goods in a deliverable state in the place from whence they were to be taken by the buyers, the goods remained there at the risk of the latter.” Tenant covenanting to repair, damage by fire only excepted, continues liable to payment of rent notwith- standing the premises are destroyed by fire : Hare v. Groves, 3 Anstr. 687. If he covenant without the exception, his duty is to rebuild : Bullock v. Dommitt, 6 T. R. 650. A tenant at will is not liable for general repairs, and a fortiori not to rebuild : Horsefall v. Mather, Holt (N. P.) 7. The rule seems to be : when the law creates a duty and the party is disabled to perform it without any default in him, and he has no remedy over, the law will excuse him ; but when the party by his own contract creates a duty or charge upon himself, he is bound to make it good if he may, notwith- standing any accident by inevitable necessity, because he might have provided against it by his contract : Paradine v. Jane, Aleyn, 26 ; and an anonymous case in Dyer, 33 (10). Cp. Sale of Goods Act, 1893 (56 & 57 Viet. c. 71), ss. 20, 33; Benjamin, Sale (4th ed.), 657 ; Chalmers, Sale of Goods Act, 1893 (6th ed.), 54, Brecknock and Abergavenny Canal Navigation Co. v. Pritchard, 6 T. R. 750 ; Ilinde v. Whitehouse, 7 East, 558 ; Martineau v. Hitching, L. R. 7 Q. B. 436. The maxim Res perit domino is considered in the House of Lords in Bayne v. Walker, 3 Dow (H. L.), 233. Lord Eldon, C., there says, 245 : “ The meaning of this is that where there is no fault anywhere, the thing perishes to all concerned ; that all who are interested constitute the dominus as to this purpose ; and if there is no fault anywhere then the loss must fall upon all,” that is, the loss must lie where it falls. In Paine v. Meller, 6 Ves. 349, the completion of the purchase of a house was postponed from defects in the title. While the matter was still incomplete the houso was burned down. Yet VARIOUS RELATIONS. 807 CHAP. I.] own materials, says the same authority, 1 as accessorial to those of the employer, he is entitled to be paid for them if the thing perishes before it is completed. Bell, in his Commentaries, 2 has reduced the law on this subject to Boll’s rules, three rules, which are accepted by the authorities as a satisfactory compendium of the law : (1) If the work is independent of any materials, or property of the employer, the manufacturer has the risk and the unfinished work perishes to him. (2) If he is employed in working up the materials, or adding his labour to the property of the employer, the risk is with the owner of the thing with which the labour is incorporated. 3 (3) If the work has been performed in such a way as to afford a defence to the employer against a demand for the price if the accident had not happened (as if it were defectively or improperly done), the same defence will be available to him after the loss. “ These principles seem also well founded in the common law, Approved by and will probably receive the like adjudication in each of these cases Story, whenever it shall arise directly in judgment.” 4 Prima facie, they apply to those who enter into contracts for doing Blackburn, J., work and supplying material. Blackburn, J., however, points out, in in Appleby v. delivering the judgment of the Exchequer Chamber in Appleby v. M U crs - Myers? that there is nothing to render it either illegal or absurd in the workman to agree to complete the whole, and to be paid when the whole is complete, and not till then. Then, in the event of a fire destroying the incomplete work, the workman must replace it. Ander- son v. Morice 6 is in point here. The property in the cargo in question there did not pass to the purchaser before the loading was complete ; before that happened, the ship on which the cargo was being loaded had sunk, and the property never passed out of the vendor. The purchaser consequently was never in peril, and thus had no insurable interest. Had the loading been completed the result must have been otherwise. the purchaser was held bound, and the omission of the vendor to renew the insur- ance which expired on the day fixed originally for completion made no difference. In Lofft v. Dennis, 1 E. & E. 474, though the landlord had insured, the tenant was held bound to pay his rent during reinstatement, and not entitled to have the insurance money laid out on the land. See the note to Campbell’s Lives of the Chancellors, vol. vii. 619, citing Sugden, V. & P. (2nd ed.) 333. Leeds v. Cheetham, I Sim. 140 : neither has the tenant any equity to compel the landlord to rebuild, though he has received insurance money: Rayner v. Preston, 18 Ch. D. 1 ; Phoenix Assurance Co. v. Spooner, [1905] 2 K. B. 753. See the Scotch cases of Clark v. Glasgow Assurance Co., 1 Macq. (Sc. H. L.) 668 ; M’ Intyre v. Clow, 2 Rettie, 278 ; Richardson v. County Road Trustees of Dumfriesshire, 17 Rettie, 805 ; Brewer v. Duncan, 20 Rettie, 230. 1 Pothier, Traite du Contrat de Louage, n. 433, adopted by Story, Bailm. § 426. 2 1 Bell, Comm. (7th ed.) 486. Cp. M’ Intyre v. Clow, 2 Rettie, 278. 3 Appleby v. Myers, L. R. 2 C. P. 651 ; cp. Menetone v. Athawes, 3 Burr. 1592 ; Gillett v. Mawman, 1 Taunt. 137 ; 2 Kent, Comm. 591. • * Story, Bailm. § 426 a, § 437. s L. R. 2 C. P. 651. Howell v. Coupland, 1 Q. B. D. 258 ; Niclcoll and Knight v. Ashton, Edridge, [1901] 2 K. B. 126. Sale of Goods Act, 1893 (56 & 57 Viet. c. 71), s. 18, r. 2. 6 l App. Cas. 713. “ Merchants, according to my experience, attach very great weight to a stipulation as to who is to insure, as showing who is to bear the risk of loss ” : per Blackburn, J., Allison v. Bristol Marine Insurance Co., 1 App. Cas. 229, approved by Lord Selborne, in Anderson v. Morice, l.c. 748. Mucldow v. Mangles, 1 Taunt. 318, laid down that if a person contracts with another for a chattel which is not in existence at the time of the contract, though he pays him the whole value in advance, and the other proceeds to execute the order, the buyer acquires no property in the chattel while unfinished in the hands of the maker. This was doubted in Carruthers v. Payne, 5 Bing. 270. See note to 40 R. R. 784. Brice v. Bannister, 3 Q.‘,B. D.'569. VOL. II. P 808 NEGLIGENCE IN LAW. [book V. Duties of the bailee. Exception to liability. Seymour v. Brown. Next, of the duties of the bailee. In this species of bailment every man is presumed to possess the ordinary skill re(|iiisite to the due exercise of the art or trade which lie assumes. Spondet periliam artis . 1 Imperitia culpa; adnumeratur . 2 Thus, where a tailor receives cloth to be made into a coat, or a jeweller a precious stone to polish or to cut, each of them is bound to do the work required from him in the course of his business in a workmanlike manner. He is required to bestow ordinary diligence, and that care and prudence which theaverage prudent man takes in his own concerns . 3 For the contract is for mutual benefit ; therefore the bailee is not answerable for slight neglect, nor for a loss by inevitable accident or irresistible force, or from the inherent defect of the thing itself, unless he took the risk on himself ; 4 he is only answerable for ordinary neglect . 5 There is one exception to this rule. Though the bailee is bound to exercise care and skill adequate to the business he undertakes only, and if the thing entrusted to him perish without fault of his the loss will be the bailor’s, yet, where the delivery has the effect of transferring the property, the result is different. On this point all the commentators cite “ the famous law of Alfenus in the Digest ” : 6 If an ingot of silver is delivered to a silversmith to make an urn, the whole property is transferred, and the employer is only a creditor of metal equally valuable which the workman engages to pay in a certain shape, unless it is agreed that the specific silver, and none other, shall be wrought up into the urn . 7 This rule was sought to be applied in the American case of Seymour v. Brown} A quantity of wheat was sent to a miller to be exchanged for flour at the rate of a barrel of flour for every five bushels of wheat. The miller mixed the wheat with the mass of the wheat of the same quality belonging to himself, and, before the flour was delivered, the mill, with all its contents, was destroyed by fire. It was held that, 1 Pont, 818. Pothier, Traite du Contrat de Louage, n. 425. 2 D. 50, 17, 132; Pothier, Traite du Contrat de Louage, n. 425, 420; Bell, Prin- ciples of the Law of Scotland (9th ed.), 100-108 ; 1 Bell, Comm. (7th ed.) 489, where in a note it is said : “ There is a special law relative to ‘ ignorant smethis, who throw ignorance and drunkynnesse spillis and crukes men’s horses throw schoyn in the quick. ’ It is enacted: (1) That a smith who shoes in the quick shall pay the cost of the horse till he be hale ; (2) That he shall, in the meantime, find a horse for the journey ; and, (3) That if the horse will not hale the smith shall pay his price to the owner. 1478, c. 11, 2 Act. Pari. 119.” 3 D. 19, 2, 9, § 5. Gothofred’s note on this passage is: Imperitus nut cm nemo preesumitur in eo, in quo sand probalus est industries plenus, ut Advocalus in judici- alibus, negotiator mcrcatorum matriculce adscriptus. i D. i9, 2, 13, §§ 5, 0. 3 Story, Bailm. §§ 433, 437. o D. 19, 2, 31. Story, Bailm. § 439, where the references are given. .Tones, Bail- ments, 102. Alfenus, who was a shoemaker, and afterwards turned to be a juris- consult, is mentioned by Horace — Alfenus vafer omni Abjecto instrumento artis dausaque taberna, Sutor erat ; sapiens operis sic optimus omnis Est opifex solus, sic rex. Satires, bk. i. sat. 3, 1 30. There is an article on him in Bayle’s Dictionary, sub nom., also in the preface to Pothier’s Pandects, where is an account of all the jurists whose opinions are referred to in the Digest. 7 The rules of the Roman law as to the effect of the union of things apart from the intention of the owner in the transfer of property, are lucidly explained in a note on Sohm, Inst, of Roman Law (2nd ed. Eng. trails.), 345. 3 19 Johns. (Sup. Ct. N. Y.) 44. There is a very full note on the cases on this point, 2 Parsons, Contracts (8th ed.), 133. VARIOUS RELATIONS. 809 CHAP. I.] as there was no fault or negligence imputable to the miller, he was not responsible for the loss, and that the property was not transferred. Story, J., however, in Buffum v. Merry, 1 considers that this ease cannot Buffum v. be supported otherwise than on the .ground that there was a bailment Merry- of the wheat to be ground into flour, or a locatio opens faciendi, and that the Court must have been of opinion that the facts did not prove a sale of the wheat or an exchange of it for flour at so many bushels per barrel. Kent, too, disapproves the decision. 2 And Bronson, J., in Smith v. Clark, 3 says that “the decision was Smith v. virtually overruled in Hurd v. West, 7 Cow. 752, and see p. 756, note. Clark. The case of Slauyhter v. Green, 1 Rand. (Va.) R. 3, is much like Seymour v. Brown. They were both hard cases, and have made bad precedents.” The case of Seymour v. Brown being, then, out of the way, the distinction is a plain one, and is clearly put by Cowen, J., in Pierce v. Piercer. Schenk ; 4 where logs were delivered at a saw-mill on tne terms that Sr,ic>ic!: - they should be sawn into boards within a specified time, and that each party should have half the boards. After delivery, a portion was sawn and the saw-mill proprietor (the miller, as he is called in the report) converted both boards and logs to his use. The question was whether trover was properly brought. “Had,” says the learned Cowen, J.’ judge, “ the contract by the parties been one of sale, as if the defendant judgment, had taken the logs under a promise to return boards generally of equal value to one-half of the boards to be made out of them, the decision of the judge would have been erroneous. But this was not the case. The plaintiff delivered his logs to the defendant, who was a miller, to be manufactured into boards — a specific purpose, from which he had no right to depart. On completing the manufacture, he was to return the specific boards, deducting one-half as a compensation for his labour. It is like the case of sending grain to a mill for the purpose of being ground, allowing the miller to take such a share of it for toll. This is not a contract of sale, but of bailment — locatio operis faciendi. The bailor retains his general property in the whole till the manufacture is completed ; and in the whole afterwards minus the toll. The share to be allowed is but a compensation for the labour of the manufacturer, whether it be one-tenth or one-half. Thus, in Collins v. Forbes, 5 it appeared that Forbes furnished certain timber to one Kent, which the latter was to work up into a stage for the Commissioners of the Victualling Office, he to receive one-fourth cf the clear profit and a guinea per week on the work being done. This was holden to 1 3 Mason (U. S.) 478, 480. Story, Bailm. §§ 193-4.. 2 2 Comm. 589. See notes by the editors of the 12th and 13th editions. 3 21 Wend. (N. Y.) 83. The Courts of the State of Vermont appear to be of a different opinion, and to uphold Seymour v. Brown within their jurisdiction : Smith v. Niles, 20 Vt. 315 ; Downer v. Rowell, 22 Vt. 347. This latter was a case where the obligation was to keep sheep “ the full term of three years, and return the same or others in their place as good as they are.” It was held that the property did not vest in the bailee till the return of “ other sheep of equal quality.” See 2 Parsons, Contracts (8th ed.), note at 130. i 3 Hill (N. Y.) 28. Gregory r. Stnjker, 2 Denio (N. Y.) 628, is an interesting case : A waggon, almost worthless, was sent to be repaired ; when finished, it became worth $90, and the bill for repairing it was $78 V When it was taken in execution for the workman’s debt, the Court held that, “ as a general proposition, where the owner of a damaged or worn-out article delivers it to another person to be repaired and renovated by the labour and materials of the latter, the property in the article as thus repaired and improved is all along in the original owner, and not in the person making it.” The judgment of Beardsley, J., is well worthy of perusal. s 3 T. R. 316. South A ustralian Insurance Co. v. Randcll. J udgment. 810 NEGLIGENCE IN LAW. [cook v. be a bailment by Forbes.” After citing a case, Barker v. Roberts, 1 the learned judge continues : “ Nearly all the books concede the distinction laid down in Jones on Bailments, 102, between an obli- gation to restore the specific thing and a power or necessity of returning others equal in value. In the first case, it is a regular bailment. In the second, it becomes a debt.” 2 The same view was adopted by the Privy Council in South Aus- tralian Insurance Co. v. Randell. 3 Corn was deposited by farmers with a miller to be stored and used as part of the current consumable stock or capital of the miller’s trade, and was by him mixed with other corn, subject to the right of the farmers to claim an equal quantity of corn of like quality, though not any particular corn. The Judicial Com- mittee of the Privy Council held the dealing to be a sale and not a bail- ment. Their opinion is thus summed up : 4 “It comes to this, that where goods are delivered upon a contract for a valuable consideration, whether in money or money’s worth, then the property passes. It is a sale and not a bailment. In the case of mixture by consent, the identity of the specific property of each who consents is no longer ascertainable, and the mixed property belongs to all in common. It may perhaps be regarded, under special circumstances, as the case of persons having a common property, and if they all concur in a bailment of this property, all may require a re-delivery of what they have so put in bailment. It may be that in such a case each might claim separately to have an aliquot part of the whole restored to him ; but here the current stock was, from its very nature, liable to be changed from day to day both in quantity and quality. The delivery was not for the peculiar or primary purpose of storage simpliciter, as in the case of a bailment of property to be returned to one bailor, or of any part to one or more of several joint bailors ; but the wheat was delivered by each farmer independently to be stored and used as part of the current stock or capital of the miller’s trade. There seems to be no ground upon which a banker is held not to be a trustee, or a banker’s current capital not to be trust property, that is not applicable in principle to the case of the miller and his current stock of wheat, which is his trading capital.” 5 1 8 Green]. (Me.) 101. 2 Another passage of the judgment may be reproduced here. “ I am of opinion,” says Cowen, J., l.c. 31, “ that when a manufacturer receives goods for the purpose of being wrought in the course of his trade, the contract is entire ; and, without a stipula- tion to the contrary, he has no right to demand payment until the work is complete. A fortiori he has no right to carve out payment for himself without consulting the bailor. A miller is entitled to take toll from your grist, on grinding it ; but he chooses to grind only a part, and then sell the whole. He is not entitled to his toll for what he actually ground. It is like the common case of a man undertaking to labour during a certain time, or in finishing a certain amount of work for so much. Till the labour be performed, he can claim nothing.” Cp. Cutter v. Powell, 2 Sm. L. C. (11th ed.) 1. 3 L. R. 3 P. C. 101, distinguished in In re Williams, 31 Upp. Can. Q. B. 143, (where the engagement was to deliver a barrel of floiu 1 of a specified quantity for so many bushels oif wheat), on the ground that nothing remained uncertain except the price. 4 L. R. 3 P. C. 1 13. 6 See Foley v. Hill, 2 H. L. C. 28. The case may occur of the purchase of a certain definite quantity from a larger body ; when by the English law, in general, the right docs not pass till the vendor has made his selection. “ If 1 agree,” says Bayley, J., 11 to deliver a certain quantity of oil as ten out of eighteen tons, no one can say which part of the wnoie quantity I have agreed to deliver until a selection is made. There is no individuality till it is divided ” : Gillett v. II ill, 2 Cr. & M. 530, distinguished in Knights v. Wiffcn, L. R. 5 Q. B. 000 ; Campbell v. Mersey Docks and Harbour Board, 14 C. B. N. S. 412. The American law does not seem to coincide : Bussell v. Carrington, 42 N. Y. 118; Waldron v. Chase, 37 Me. 414 ; 2 Parsons, Contracts (8th ed.), 137. CHAP. I.] VARIOUS RELATIONS. 811 Besides the duties already set out, there are others implied on the Duty to part of the bailee of work on a thing — such as the duty of observing to* good faith and practising no imposition on his employer as to his ser- r ' eturn the vices. When his work is done, he is bound to return the thing upon thing worked which he has worked to his employer. This last obligation is, however, on - subject to his right to a lien where, by his labour and skill, he has con- ferred increased value on the thing bailed to him . 1 This lien only Lien, exists when he who claims it is a bailee under the contract locatio operis faciendi, and therefore has no application in the case of a journey- man or day-labourer or in any like case where the possession is that of the employer, and where the only security for the payment of wages is the employer’s personal responsibility on the contract of hiring . 2 There was for some time uncertainty as to the rule of law, where the Where thing work contracted for was done, but so imperfectly that it was not not worth the worth the price agreed to be paid. In early times the rule had been t^bepaid* 1 that whenever anything was done under a special contract but not in conformity thereto, the party for whom it was done must pay the stipulated price and resort to a cross-action to indemnify himself . 3 In Basten v. Butter 4 on the authority of Broom v. Davis, evidence in reduction of damages, to show that work was done in a grossly im- proper way, was rejected, but a new trial was granted on this ground, in Farnsworth v. Garrard 5 the settled rule was thus stated by Lord Farnsworth v Ellenborough : “ The late Mr. Justice Buller thought (and I, in Ga rrard. deference to so great an authority, have at times ruled the same way) that in cases of this kind, a cross-action for the negligence was necessary, but that if the work be done, the plaintiff must recover for it. I have since had a conference with the judges on the subject ; and I now consider this as the correct rule — that if there has been no beneficial service, there shall be no pay ; but if some benefit has been derived, though not to the extent expected, this shall go to the amount of the plaintiff’s demand, leaving the defendant to his action for negligence. The claim shall be co-extensive with the benefit.” 6 If the work is left unfinished by the wilfulness of the workman, in the case of his having undertaken to do the whole, he is disentitled from recovering anything . 7 So far we have considered only a portion, and that the least im- Portion of ti e portant portion, of the relations raised by the contract of hire of ?? ntr “ t ° f labour and services — viz., that which has reference to the bailment an( i services of goods for work to be done upon them. There is another does not aspect of the same subject— where contracts of hire and services are t made for the work of architects, auctioneers, bankers, stockbrokers, solicitors, surgeons, and the rest — which demands careful and detailed 1 Chapman v. Allen, Cro. Car. 27 1 ; Jackson v. Cummins, 5 M. & W. 342. 2 M’Intyre v. Carver, 2 Watts & Serg. (Pa.) 392. 3 Broom v. Davis, 7 East, 480 note. ^ 7 East, 479. King v. Boston, 7 East, 481 note. 3 1 Camp. 38. Cp. Fisher v. Samuda, 1 Camp. 190. G The course of the cases subsequently is Denew v. Dgverell, 3 Camp. 451 ; Street v. Blay, 2 B. & Ad. 456 ; Mondel v. Steel, 8 M. & W. 858 ; Rigge v. Burbidge, 15 M. & W. 598, and Dakin v. Oxley, 15 C. B. N. S. 646. In Davis v. Hedges, L. R. 6 Q. B. 687, it was held that, though in an action for the price of work the defendant may set up that the work has been defectively done in reduction of damages, he is not bound to do so, but may bring his separate action in respect of the claim. Davis v. Hedges was distinguished in Caird v. Moss, 33 Ch. D., by Cotton, L.J., 34, and by Lindley, L.J., 35. 7 Sinclair v. Bowles, 9 B. & C. 92. (11) Hire of custody. Sir Wm. Jones’s state- ment of the duty. Duty to re- deliver. Agisters of cattle. Definition. 812 NEGLIGENCE IN LAW. [book V. consideration, but where no actual bailment of property is involved. Since, then, we are at present concerned with bailments in the more tangible meaning of the term, the discussion of the duties raised by these relations so far as care or the want of it is involved are postponed, and subsequently discussed in other connections. 1 (B) Hire of custody or the receiving of goods on deposit for a reward for the custody thereof. This is the second subdivision we have proposed of the locatio operis, or the hiring of labour and services. Sir William Jones, 2 speaking of the bailee’s duty in this case, says : “ He is clearly responsible, like other interested bailees, for ordinary negligence ; and although St. German seems to make no difference in this respect between a keeper of goods for hire and a simple depositary , yet he uses the word default, like the culpa of the Romans, as a generical term, and leaves the degree of it to be ascertained by the rules of law.” 2 Idle duty to re-deliver may cause difficulty. In the United States it has several times been decided that where a person in the character of a bailee undertakes to deliver specific goods on demand, though the demand may be made wherever he may be at the time, his offer to deliver at tbe place where the property is, or at his dwelling-house or place of business, will be sufficient. 4 To this subdivision are to be referred the duties of agisters of cattle, factors, forwarding merchants, warehousemen, and wharfingers, whose cases we now proceed to consider in their order. (a) As to agisters of cattle. Agistment 5 is “ where other men’s cattle are taken into any ground at a certain rate per week ; it is so called because the cattle are suffered i It is difficult to classify a case like Raiilian v. Wright, 21 Am. St. It. 249, which is an action for breach of the bailment of a corpse, brought against the undertaker, for negligent delay in the delivery of a dead body. Hale v. Bonner, 27 Am. St. It. 850, may be cited in some parts of the United States for the proposition that a widow is entitled to recover for mental suffering as an element of damages in an action against a railroad company for their delay in the delivery of her husband’s body, forwarded upon such railroad. See another curious case as to the widow’s rights to the custody of the body of her deceased husband, Larson v. Chase, 28 Am. St. R. 370. In England, “A dead body by law belongs to no one, and is, therefore, under the protection of the public. If it. lies in consecrated ground the ecclesiastical law will interpose for its protection ; but, whether in ground consecrated or unconsecrated, indignities offered to human remains in improperly and indecently disinterring them, are the ground of an indictment ” : per Byles, J., Foster v. Dodd, L. If. 3 Q. B. 07, 77. Cp. 2 Russell, Crimes (5tli ed.), 250; Fhillimore, Ecc. Law, 689. Replevin for a corpse, 34 Irish Law Times, 25. 2 Bailm. 97. 3 Doctor and Student, dial. 2, c. 38. 4 As to delivery generally, see post, 898. In 2 Kent, Comm. 509, it is said : “ On a valid tender of specific articles the debtor is not only discharged from his contract, but the right of property in the articles tendered passes to the creditor. The debtor may abandon the goods so tendered ; but, if he elects to retain possession of the goods, it is in the character of bailee to the creditor, and at his risk and expense.” As to bailment of a coat delivered to the waiter while dining at a restaurant : Ullzen v. Nicols, [1894] 1 Q. B. 92 ; and for the liability where a coat is put in the place where coats were ordinarily put in the dining-room of an hotel : Orchard v. Bush, [1898] 2 Q. B. 284. 5 Tomlin, Law Dictionary, art. Agistment. For t his he cites 2 Co. Inst. 643. Jacob’s Law Dictionary has the same passage, and the same authority for it ; I am unable to verify it. In 4 Co. Inst. e. 73, The Courts of the Forests, 293, there is the following : “ Agistator, so called, because he taketh beasts to agistment, that is, to depasture within the forest, or to feed upon the pawnage, and cometh of the French word, gyser, to lye, because the beasts that feed there are there levant and co-ucha ut, lying and rising. And his office consisteth in agistando, recipiendo, imbreviando, cl certi/icando,” “ Agisla- menlum,” says Tomlin, “ from French geyser, gistcr (jaccrc), because (lie beasts are levant and couchaut during (he time they are on (he land. ” Man wood, The Forest Laws, 194, derives agist and agislameidum from the Latin agisto, to drive, “ for ot VARIOUS RELATIONS. 813 CHAP. I.] agiser — that is, to be levant and couchant there ; and many great farms are employed to this purpose.” Blackstone says : 1 “ If a man takes in a horse or other cattle to graze and depasture in his grounds, which the law calls agistment, he takes them upon an implied contract to return them on demand to the owner.” 2 In the king’s forests there were frequently demesne woods and History of the lands, which were kept inclosed, in addition to the waste lands, that term, lay open for common to the inhabitants of the forest. Certain officers were appointed to the charge of these, who were called “ the king’s agisters of his forest.” Their duty was to take in for money the beasts and cattle of every person, being an inhabitant within the forest, who was entitled to have common herbage there. The taking in of cattle to pasture or feed, by the week or otherwise, was called agisting of beasts or cattle, and the common of herbage that was afforded was called agistment . 3 This strictness of language very early gave place to a more general its wider meaning, and agistment came to signify the common of herbage of any signification, kind of ground or land, or the money received for the same. An agister was one who received and took in the beasts and cattle of every person in his land for hire to have pasture there. If, however, a man had only common by a specialty in a certain place and had no cattle of his own to common he was not allowed to agist other men’s cattle . 4 The transition from the limited to the broad sense of the term may be traced through an article in the Charta de F oresta 5 in these words : ciiarta de Unusquisque liber homo agistet boscum suum in f oresta f ro voluntate Foresta. sua et habeat fannagium suum : since, from the chartered right of every freeman to agist his own lands and woods within the forest, the application of the same name would be easy and natural to the exercise of the right that every man had to let his own land outside the boundaries of the forest for a purpose not unlawful. At common law the duty of a bailee with whom cattle were left Duty at to be fed for reward is to take reasonable care of them, not “ to take common law. care of and re-deliver them to the bailor.” 6 Or, as the law is stated by Blackburn, J., in Smith v. Cook : 7 “ An agister does not insure Smith v. Coot. the safety of the horses entrusted to him, he is bound to take reasonable care of them, and if they are killed through his negligence he is liable.” The words used by Quain, J., in the same case, are “ proper care.” 8 this verb, agito, to drive or to feed, the lawyers have framed this verb, agisto, to feed or to agist (by adding thereunto this letter s), and then of agisto, agistamenlum, the feeding or agistment of beasts or cattel, with herbage or mast.” Agistement dc basics est ou la bastes vyment en ma pasture joe pus prendre de chekune beste un dener ou maple : Y. B. 22 Ed. I. (Horwood’s ed.) 363. Cp. Murray, Eng. Diet, sub voc. Agist, Agist- ment, Agistor. i 2 Comm. 452. 2 Chapman v. Allen, Cro. Car. 271. 3 Manwood, Laws of the Forest, c. 11, Of Agistment, and what Agistment is, 180-194. Cp. Com. Dig. Chase (O 1.), (Q 6.). * In Lib. Assis. 22 Ed. HI. 103, pi. 84 ; Manwood, Laws of the Forest, 182. '5 9 Hen. III. e. 9. (Rulfhead) : referred to in Revised Statutes as 25 Ed. I. 6 Corbett v. Packington, 6 B. & C. 268 ; Turner v. Slallibrass, [1898] 1 Q. B. 56. 7 1 Q. B. D. 81. In Oliphant, Law of Horses (5th ed.), 225, a Nisi Prius case of Gaunt v. Smith, tried before Pollock, C.B., Dec. 11th, 1856, is noticed, in which that learned judge directed a nonsuit. The action was brought by the owner of a pony injured while agisted to the defendant by being kicked by a horse whose shoes had not been taken off. The case is not overruled by Smith v. Cook, as has sometimes been alleged ; and the distinction between putting a horse shod in a field with a pony, and a horse and heifer in a field to which there is access by a bull, seems sufficiently wide to warrant very different considerations being applied. The test is “ reasonable care ” in both cases. « 1 Q. B. D. 83. Broadwater v. Biot. Gibbs, C.J.’s, Statement of the law. Agister no lien. Livery stable keepers. Searle v. Lavcrick. Judgment of Blackburn, J. 814 NEGLIGENCE IN LAW. [book v. In the earlier case of Broadwater x.Blot 1 an agisted horse was proved to have strayed out of the defendant’s field, and was lost ; on this evidence plaintiff claimed to be entitled to a verdict. The counsel for the defendant objected, contending that “ direct and positive negli- gence ” must be shown — “ either an insufficiency of fences, by reason of which the horse strayed, or that the defendant permitted the gates to be open for an unreasonable length of time.” Gibbs, C. J., held that : “All the defendant is obliged to observe is reasonable care. He does not insure ; and is not answerable for the wantonness or mischief of others. If the horse had been taken from his premises, or had been lost by accidents which he could not guard against, he would not be responsible. I admit that particular negligence must be proved, by occasion of which the horse was lost, or gross general negligence, to which the loss may be ascribed, in ignorance of the special circumstance which occasioned it. If there were a want of due care and diligence generally, the defendant will be liable. The question is, were the defendant’s fences in an improper state at the time the horse was taken in to agist ? Did he apply such a degree of care and diligence to the custody of the horse as the plaintiff, who entrusted the horse to him, had a right to expect ? ” The Roman law made the agister responsible, not only for reason- able diligence, but for reasonable skill in his business : Si quis vitulos pascendos . . . conduxit culpam eum prcestare debere ; et quod imperitid peccavit, culpam esse ; quippe ut artifex conduxit? Story 3 says the common law ride is the same. An agister has no lien, for he merely provides food and takes care of the animals entrusted to him ; neither has a livery stable keeper. 4 Between the business of an agister and that of a livery stable keeper there is very little difference ; they are both comprehended under the same principle, and the duty of both differs from an inn-keeper’s, which is much more extensive. 6 The duties of a livery stable keeper as far as his obligation to take care goes were much discussed in the case of Searle v. Laverick : 6 “ We take it to be established law that by the custom of England, this extreme liability, making the bailee an insurer, is confined to carriers and innkeepers, and that livery stable keepers and warehousemen come within what Lord Holt calls the second sort, as to which he says : ‘ The second sort are bailiffs, factors, and such like.’ As to this sort, he says the bailee is only bound to take reasonable care ; and ‘ the true reason of the case is, it would be unreasonable to charge him with a trust further than the nature of the thing puts it in his power to perform it. But it is allowed in the other cases ’ ( i.e ., the carrier and innkeeper), ‘ by reason of the necessity of the thing.’ The obligation to take reasonable care of the thing entrusted to a bailee of this class involves in it an obligation to take reasonable care that any building in which 1 Holt (N. P.) 547. In tlie American case of Sargent v. Slack, 47 Vt. 074, 1!) Am. R. 130, where some sheep had escaped through a defective fence, the agister was held liable, llaleslrap v. Gregory, [1895 1 1 tj. 15. 501. 2 D. 19, 2, 9, §5. ‘ 3 Bailm. §443. ■i Jackson v. 'Cummins, 5 M. & W. 342 ; Grinnell v. Cook, 3 Hill (N. V.) 485. The trainer of a race-horse was said to have a lien on the horse ho trained in Benin v. Waters, 3 C. & P. 520; but this was qualified in Forth v. Simpson, (1848) 13 Q. B. 080, by the limitation that the lien only existed where the owner had not the right of removing him to run at any race he pleased. o Galya's case, 8 Co. Rep. 32 a., 1 Sm. L. C. (1 1th ed.), 1 19. 6 L. R. 9 Q. B., per Blackburn, J., 126. VARIOUS RELATIONS. 815 CHAP. I.] it is deposited is in a proper state, so that the thing therein deposited may be reasonably safe in it.” The facts proved showed that plaintiff had sent his horse and two carriages to a livery stable keeper, who had put the carriages in a building, which fell, smashing them. The building was not finished at the time, and was in the hands of con- tractors, who were competent men, though the evidence was they had done this particular work unskilfully. The judge, at the trial, ruled 1 “ that defendant’s liability is that of an ordinary bailee for hire, and that all he was bound to do was to use ordinary care in the keeping of the plaintiff’s carriages, and that, if in causing the shed to be built he did all that he did, by employing a builder and otherwise, with such care as an ordinary careful man would use therein, he would be protected, and would be exempt from liability for an event which was caused by the careless or improper conduct of the builder, of which the defendant had no notice ” ; and this direction was sustained by the Queen’s Bench . 2 In Phipps v. New Claridge Hotel Co ., 3 which seems practically Phipps v. identical with Mackenzie v. Cox , 4 a dog was left at the defendants’ NewClaridge hotel pending the departure of the plaintiff the same evening for oe ' °' Scotland, and was received by them into their sole custody. When required, it was missing. Bray, J., held that the contract was one of bailment, that failure to restore the bailment must be explained, and that the principle enunciated by Erle,-C.J., in Scott v. London Dock Co ., 5 is applicable to the case of a bailment that “ Where the thing is shown to be under the management of the defendant or his servants, and the accident is such as in the ordinary course of things does not happen if those who have the management use proper care, it affords reasonable evidence in the absence of explanation by the defendants that the accident arose from want of care,” 6 so that the plaintiff was entitled to recover. If a person negligently lets an unsuitable horse, it is not a defence Letting a that he was ignorant that the horse was unsuitable ; 7 although one horse, who lets a horse does not warrant its freedom from defects which he does not know of and could not have discovered by the exercise of due care ; 8 for the exercise of a common calling only requires a man to show skill in his business , 9 and liability for a horse, apart from bailment, is confined to cases where the owner has notice of the dangerous tendency . 10 1 L.c. 124. 2 Two cases, Brazier v. Polytechnic Institution, 1 F. & F. 507, and Pike v. Poly- technic Institution, 1 F. & F. 712, are often cited as negativing any warranty of a staircase which fell. They are referred to in Montague Smith, J.’s, judgment in Ileadhead v. Midland By. Co., L. R. 4 Q. B. 385. 3 22 Times L. R. 49. 4 9 C. & R 632. s 3 H. & C. 601. s Cited by Lord Halsbury, C., Dollar v. Greenfield, The Times, May 19, 1905, as authority for the same proposition. Dollar v. Greenfield is not reported in any regular report. As it stands in the Times the Lord Chancellor’s opinion is merely that he found there was evidence of negligence for a jury. In a Scotch case, Smith v. Wallace, 25 Rettie, 761, the cause of action was alleged to be that there was “ nobody at head of horse while it was being yoked.” The Court held that no cause of action was disclosed. “It is a matter of everyday experience that such a course is never taken.” This is difficult to reconcile with the dicta in Dollar's case. i Horne v. Mcakin, 1 15 Mass. 326. 8 Copeland v. Draper, 157 Mass. 558, 34 Am. St. R. 314. 9 Rex v. Kilderby, 1 Wms. Saund. 311, 312, note 2. io Cox v. Burbidge, 13 C. B N. S. 430. NEGLIGENCE IN LAW. [book v. Definition of factor. Distinctions between the functions of a factor, a merchant, a broker, and an agent. 816 (ft) As to factors . 1 Before treating specially of factors, sonic general principles of the Roman law not previously noted under mandate of agency may be indicated as a guide to English principle . 2 An agent is bound to execute the commission he has undertaken , 3 or to give timely notice when he is unavoidably prevented from doing so . 4 In the execution of his commission lie must show exacta diUgentia . 5 If he has authority to delegate it, he must answer for culpa in eligendo ; 6 if he has not authority to delegate it, he must execute the commission in person. He must account for all his principal’s property that comes to his hands, including fruits and interest, though he is discharged from responsibility if he can show a loss through no fault of his own . 7 He must restore, at the expiration of his commission, all property belonging to his principal that remains under his control or for which he remains answerable, and render full accounts of his receipts and expenditure to his principal, and allow him to exercise all rights of action which lie as agent has acquired against third persons. On the other hand, the principal must indemnify the agent for all reasonable expenses incurred in his agency . 8 A factor is described by Abbott, C.J., “ as a person to whom goods are consigned for sale by a merchant, residing abroad, or at a distance from the place of sale, and he usually sells in his own name without disclosing that of his principal ; the latter, therefore, with full know- ledge of these circumstances, trusts him with the actual possession of the goods, and gives him authority to sell in his own name.” 9 A factor differs from a merchant in that “ a merchant buys and sells for his own direct mercantile profit ; ” while the factor, so far as con- cerns his principal, “ only buys and sells upon a commission .” 10 A factor differs from a broker 11 in that a broker is not trusted with the posses- sion of goods, and ought not to sell in his own name . 12 Lastly, he differs 1 Story, Agency, §§ 33, 34 ; 3 Cliitty, Commerce and Manufactures, 103-224, Factors and Brokers ; 3 Parsons, Contracts (8th ed.), 258. 2 See generally Hunter, Roman Law (2nd ed.), 009-026, and particularly the discussion of Savigny’s position, 621-622, that while the old law of non-representation was maintained in regard to the formal contract of stipulalio, yet that in the later Roman law, agency was universally allowed in the non-formal contracts. 3 Si stisccptum non impleverit, teneiur, D. 17, 1, 5, § 1 ; quod mandatum susceperil ; denique tenetur, etsi non gessisset, D. 17, 1, 6, § 1 ; da litc, quam suscepil exseqnendam, mandati rum leneri constat, D. 17, 1, 8, § 2. 4 D. 17, 1, 27, § 2. 5 A proeuratore doium ct omnern culpam non etiam improvisum casum preestandum esse : Code, 4, 35, 13. e D. 17, 1, 8, § 3. 7 D. 17, 1, 10, §§ 2, 9. s D. 17, 1. 3, § 2 ; D. 17, 1, 8, § 9 ; D. 17, 1, 28 ; D. 17, 1, 38. 9 Baring v. Corrie, 2 B. & Aid. 143. “ The definition of a factor, I thought, always was that which is laid down in Smith’s Mercantile Law, where it is said : ‘ There are two extensive classes of mercantile agents, namely, factors who arc en- trusted with the possession as well as the disposition of property, and brokers who are employed without being put into possession of the goods.’ As for limiting that defini- tion by restricting it to persons entrusted with goods from abroad, 1 never before heard of such a limitation, and I think it must be rejected per Brett, J.A., Ex. parte Dixon, In re Henley, 4 Ch. D. 137, where Semenza v. Brindley, 18 C. B. (N. S.) 467, is explained. The Factor’s Act, 1889 (52 & 53 Viet. c. 45), gives the expression “ Mercantile Agent ” as a generic term, including both brokers and factors. to Per Lord Stowell, Matchless, 1 Hagg. Adm. Rep. 101. it As to brokers generally, see Story, Agency, §§ 28 32 a ; Com. Dig. Merchant (B), Factor, and the notes. Clarice v. Powell, 4 II. & Ad. 846, where the various statutes are considered ; Smith v. Lindo, 27 L. .). C. P. 196, 335. As to the powers and duty of a broker, Robinson v. Mollett, L. R. 7 H. L. 802. As to broker at a foreign port whose duty is to find a. cargo for a ship and his powers, Slumore, Weston v. Breen, 1 2 App. Cas. 698. 12 Per Abbott, C.J., Baring v. Carrie, 2 B. & Aid. 143. See Com. Dig. Merchant, ( B. ), Factor ; also Russell, Mercantile Agency (2nd ed.), 3 el seqq. VARIOUS RELATIONS. 817 CHAP. I.j from an agent in that his authority is extended to the management of all the principal’s affairs in the place where he resides, or in a particular department ; while an agent is one entrusted with the accomplishment of a particular act or course of dealing. The agent’s powers within the scope of his authority are similar to those of a factor, unless they are expressly limited . 1 It is a general principle of the common law, that all persons are Qualifications capable of acting as agents who arc of sound mind, and who have no of agents and interest or employment adverse to their principals ; 2 for the office of fiU:tol ‘ s ' an agent is merely ministerial. In the case of a factor, the reason is not applicable ; since the factor has rights and liabilities which cannot be enforced against a person labouring under disability ; 3 and so those only may be factors who are sui juris. i The extent of a factor’s authority is to be gathered from the com- Extent of mission under which he acts. If the commission be general it is to be factor’s construed according to its object, and implies all powers within the authonty ' scope of the employment, “ and the general words ought to receive the most liberal construction, which construction should, as far as possible, place the attorneys where the executrix intended to place them, in her room and stead, invested with all her authority and with all her discretion.” 5 This was said in a case where an executrix had given a letter of attorney “ to pay, discharge and satisfy all debts due from the testator.” Even if the commission be special, the factor’s authority includes all necessary and usual means of giving it effect , 6 though where the factor has express instructions he must pursue them strictly . 7 A factor cannot, without express power, or power necessarily implied, delegate his authority to another . 8 His authority is more- over to be construed according to the usage of trade. Thus where there is a custom to sell goods upon credit, a factor may do so ; never- theless, he must not unreasonably extend the term of credit, and must use due diligence to ascertain the solvency of the purchaser . 9 If the custom is to sell only for ready money, the factor’s power is to that 1 1 Boll, Comm. (7th eel.), 506, where see the note. Kent, 2 Comm. 622, note (6), says an orient is a nomen generalissimum, and includes factors and brokers who are only a special class of agents. A factor is distinguished from a broker by being entrusted by others with the possession and disposal and apparent ownership of property, and lie is generally the correspondent of a foreign house. A broker is employed merely in the negotiation of mercantile contracts, and is not trusted with the possession of goods and does not act in his own name. His business consists in negotiating exchanges or in buying and selling stocks and goods ; but in modern times the term includes persons who act as agents to buy and sell, and who charter ships and effect policies of insurance. 2 Co. Litt. 52 a ; Story, Agency, § 9. 3 Russell, Mercantile Agency (2nd ed.), 6. 4 Story, Bailm. § 162 ; Code Civil, art. 1990. 5 Per Eyre, C. J., Howard v. Baillie, 2 H. Bl. 620. f> Fenn v. Harrison, 3 T. R. 757, 4 T. R. 177. Where there is a notorious custom to limit a broker’s authority, it is the duty of third persons to ascertain the limit : Baines v. E icing, L. R. 1 Ex. 320 ; see Robinson v. Mollett, L. R. 7 H. L. 802. i Smart v. Bandars, 3 C. B. 380, 5 C. B. 895 ; Bostock v. Jardine, 3 H. & C. 700. Mcllor, J., in Mollett v. -Robinson, in the Ex. Ch. L. R. 7 C. P. 101, says that this case “ is misreported in 3 H. & C., but appears to be more accurately reported in 34 L. J. It was tried before me- at Liverpool ; and I have referred to my notes, and I find that no question was put to the jury, but that I directed a verdict for the plaintiff, giving to the defendants leave to move to enter a verdict for the defendants, or a nonsuit ; upon which it appears that the Court of Exchequer granted a rule, which was after- wards discharged ; and the case is only an authority for that which was conceded in the argument, viz., that without the aid of the custom, no contract binding the de- fendant was made in the present case.” See also per Blackburn, J., 111. Catlin v. Bell, 4 Camp. 183. * Delegata potestas non potest dclegari : 2 Co. Inst. 597. Cochran v. Irlam, 2 M. & S. 301 note ; Ecossaise Steamship Co. v. Lloyd, 7 Times L. R. 76 (C. A.). 9 2 Kent, Comm. 622. NEGLIGENCE IN LAW. 818 [book V. Factor’s statutory power to pledge. Degree of diligence re- quired of a factor. degree circumscribed. 1 In an emergency, deviation from instructions is condoned. 2 At common law a factor had no power to pledge, 3 and a pledge by a factor did not even transfer the lien the pledgor himself had. 4 Now by statute that power has been made to attach to his possession. The consideration of his statutory powers in detail is, however, far from our present subject ; therefore it will suffice to note that the various Acts are consolidated and amended by the Factors Act, 1889, 5 and to refer to Benjamin on Sale, Bell’s Commentaries and similar text books, where the cases are fully considered.® The question which concerns us here is what is the degree of diligence required of factors in the proper discharge of their duties ? The rule suggested by all the analogies is that, as the contract is for the benefit of both parties, the factor is understood to contract for reasonable skill and ordinary diligence. 7 By reasonable skill we are to under- stand such skill as is ordinarily exercised by persons of average capacity engaged in similar pursuits. 8 The Roman law, in which culpa or levis 1 Wiltshire v. Sims, 1 Camp, 258, where is a note : “ Chambre, J., says : ‘ There is no doubt of the authority of a factor to sell upon credit, though not particularly authorised by the terms of his commission so to do ’ : Houghton v. Mathews, 3 B. & P. 489 ; Scott v. Surman, Willes (C. P. ), 407. But this doctrine is founded on ‘the constant and daily experience that factors do sell upon credit without any special authority,’ and therefore confirms the general maxim that when an agent is employed to do any act, he shall be supposed to have an authority to do it in the manner in which it is usually done. Goods are almost always, stock is scarcely ever, sold upon credit ; and lienee the distinction between the powers of the factor and the stockbroker. An agent can in no case bind his principal by any act beyond the scope of his authority : Fenn v. Harrison, 3 T. B. 757.” 2 Hunter v. Parlcer, 7 M. & W. 322 ; per Parke, B., l.c. 342 : “ The master has, by virtue of his employment, not merely those powers which are necessary for the naviga- tion of the ship and the conduct of the adventure to a safe termination, but also a power, when such termination becomes hopeless, and no prospect remains of bringing the vessel home, to do the best for all concerned, and therefore to dispose of her for their benefit. It is a case of necessity when nothing belter can be done for the benefit of the master's employers ; and that necessity is found to have existed in this case." 3 Chitly on Comm, and Manuf. 218. 3 2 Kent, Comm. C25-8. * M’Combie v. Davies, 7 East, 5. 5 52 & 53 Viet. c. 45. Inglis v. Robertson, [1898] A. C. 616 ; Calm v. Poclcclt's Bristol Channel Steam Packet Co., [1899] 1 Q. B. 643; Oppenhcimcr v. Attenborough, [1907] 1 K. B. 510 ; Oppenheimer v. Frazer, [1907] 2K.B. 50, (C. A.) e Perhaps an even more authoritative, as well as full, examination of the law may be obtained from a perusal of the elaborate judgment of Blackburn, J., in the Ex- chequer Chamber, in Cole v. North-Western Bank, L. R. 10 C. P. 357-374. Bramwell, B., shortly states the effect of the Factors Act in the same case, at 376, as follows : “ The statute was meant to apply to those cases where one person has given an apparent authority to another, and a third person has dealt with that other in the belief that the authority really existed.” See per Lord Herschell, London Joint Stock Bank v. Simmons, [1892] A. C. 216. The pledge must not be for an antecedent debt, sec. 4. As to what is an antecedent debt, Macnee v. Gorst, L. R. 4 Eq. 315 ; K alien- bach v. Lewis, 10 App. Cas. 617. In Martinez y Gomez v. Allison, 17 Rettie, 322, a decision on 5 & 6 Viet. c. 39, it was said, at 335, by Lord Justice-Clerk Macdonald : “ The Factors Act uses words inconsistent with the contention that any one who is a mere custodier can be held to be an agent. One who has possession merely that lie may convey to another is not an agent.” Hastings v. Pearson, [1893] 1 (J. B. 62, is distinguished in Shenslone v. Hilton, [1894] 2 Q. B. 452. Lee v. Butler, [1893] 2 Q. B. 318, is a decision on sec. 9 of the Factors Act (52 & 53 Viet. c. 45), assimilating the holder of goods under a hire and purchase agreement to a mercantile agent for (ho purposes of the Act ; but is distinguished in H. L. in Ilclby v. Matthews, ( 1895] A. C. 471, followed in Payne v. Wilson, [1895] 2 Q. B. 537 ; Biggs v. Evans, [1894] 1 Q. B. 88, and Strohmenger v. Attenborough, 1 1 Times L. R. 7. 7 Jones, Bailm. 9, 10, 23, 86, 119, and the note in Theobald’s edition, 84. As to the right of the pledgee to alienate the property: 1 Bell, Comm. (7th ed.), 516; Story, Bailm. §§ 23, 455. s See ante, 793, and post, Skilled Labour. Chapman v. Walton, 10 Bing, per Tindal, C.J. 63 ; Story, Bailm. §§431, 434. VARIOUS RELATIONS. 810 CHAP. I.] culpa corresponds to ordinary neglect or the want of ordinary diligence , 1 lays down a similar rule. Spondet peritiam artis , 2 Spondet diligentiam gerendo negotio parem . 3 Imperitia culpce adnumeratur . 4 But In negotio gerendo opus sit diligentia alque industria ; el is, qui mandat, diligentiam rei gerendce convenie'ntem exigere ; et qui suscipit mandatum hoc ipso industriam et diligentiam ad rem exequendam necessariam in se futuram recipere videtur . 5 A factor, then, is bound not only to good faith, but to reasonable diligence. He is not liable for any loss by fire, theft, robbery, or other accident unconnected with his own negligence . 6 He must act with reasonable care and prudence, and exercise his judgment 7 after proper inquiries and precaution , 8 and if he does this in good faith, he is not liable because the course adopted does not in the event prove the most judicious . 9 If he omit inquiry, and sell to an insolvent person when ordinary diligence would have enabled him to find out his lack of credit, he will have to answer to his principal. So he will not be allowed to sell his own goods to a purchaser and take security for the price, and at the same time to sell the goods of his principal to the same person without security ; for he is bound to use at least as much care and diligence in his principal’s as in his own concerns . 10 The factor is bound to sell his principal’s goods for their fair market value ; 11 and he is further bound to follow the known course of business, if any such exists . 12 Though following the known course of business in ordinary cases will protect him from liability, this will not cover what he has done if he has acted negligently or mala fide . 13 So, too, if he have been guilty of any negligence or breach of duty, the effect of which has been to 1 Jones, Bailm. 21-23. 2 Pothier, Traite du Contrat de Louage, n. 425. Jones, Bailm. 98, note (l). 3 Trayner, Legal Maxims, Bell, Principles of the Law of Scotland (9th ed.), 106. I cannot trace these phrases in the Digest. See the note to Story, Bailm. § 431. 4 Jones, Bailm. 23, note ( m ). D. 50, 17, 132. 6 Vinn. Ad. Inst. 3, 27, 11, note 2. 6 Fere v. Smith, 1 Vent. 121, where it is said : “ Showing that he was robbed is giving an account,” The duty there was to account. 7 Moore v. Mourgue, 2 Cowp. 479. If a broker undertakes business and then abandons the employment, he is liable to the same extent as if he negligently caused the loss ensuing, Glaser v. Cowie, 1 M. & S. 52 ; Smith v. Price, 2 F. & F. 748 ; unless he gives timely notice to his principal of his inability, Callander v. Oelrichs, 5 Bing. N.C. 58 ; cp. Civil Law texts, ante, 816. In Park v. Hammond, 6 Taunt. 495, 4 Camp. 344, it was held gross negligence in an insurance broker employed to insure goods from a certain point in their voyage home, to effect a policy “ at and from ” that point “ beginning the adventure from the loading thereof on board.” Anderson v. Morice, 1 App. Cas. 713, may indicate the consequences flowing from such neglect. So, too, it is negligence to omit any usual term, Mallough v. Barker, 4 Camp. 150. In Ecossaise Steamship Co. v. Lloyd, 7 Times L. R. 76 (C. A.), Lord Esher, M.R., said : “ In the case of a succession of brokers employed with the consent and on behalf of the principal, each broker was only liable for his own negligence. If one broker had authority to employ another broker, he would be liable if he did not take reasonable care to appoint a good broker ; and if he did not take reasonable care, he would be liable for the negligence of that broker.” In the case cited the negligence was not obtaining a charter party with a “ first-class signature.” 8 Per Abbott, C.J., Moneypenny v. Hartland, 1 C. & P. 354 (the case, however, of a surveyor) ; Smith v. Cologan, 2 T. R. 188, note (a). If in one part of the transaction the factor exceed his instructions, but makes a corresponding saving in another part, it seems that in equity at least he will be held excused : Cornwal v. Wilson, 1 Ves. Sen. 509. Pothier, Traite des Obligations, n. 78. Lord Kenyon, Miles v. Bernard, Peake, Add. Cas. 61, appears to be of opinion that if an agent acts on the best available advice he is not liable for damage arising from the action thence taken. 9 Comber v. Anderson, 1 Camp. 523 ; Lamert v. Heath, 15 M. & W. 486. 40 Story, Agency, § 186. it Bigelow v. Walker, 24 Vt. 149. 12 Wiltshire v. Sims, 1 Camp. 258. 13 Sadock v. Burton, Yelv. 202 ; Anon., 12 Mod. 514 (case 857). 820 NEGLIGENCE IN LAW. [book V. Del credere agents. Not within see. 4 of the Statute of Frauds (29 Car. II. c. 3). Parke, B.’s, statement of their position. Factor’s receipt of remittance. Factor agent for funds coming to his hands. expose the goods entrusted to him to a peril by which they are damaged or destroyed, he will be liable; for whatever the immediate cause of the loss, the goods would not have been exposed to it but for the antecedent neglect of duty. 1 A factor sometimes engages to guarantee his dealings, or to stand del-credere, 2 as the phrase is, on receiving a certain commission, which is called a del credere, commission. To “ stand del credere ” in any transaction is to be answerable as if the person so binding himself were the proper debtor. Where, then, a factor employed to sell goods receives a del credere commission he is liable to the principal for the price to be recovered, whether he ever receive it or not ; and no pay- ment that would not be effectual as between debtor and creditor will discharge his liability. 3 Del credere agents are liable in respect of their commission, although there is no guarantee in writing signed by them within sec. 4 of the Statute of Frauds ; 1 for their undertaking is not one to pay the debt of another within the section. As Parke, B., says, 5 “ being the agents to negotiate the sale, the commission is paid in respect of that employ- ment ; a higher reward is paid in consideration of their taking greater care in sales to their customers and precluding all question whether the loss arose from negligence or not, and also for assuming a greater share of responsibility than ordinary agents — namely, responsibility for the solvency and performance of their contracts by their vendees. This is the main object of the reward being given to them ; and though it may terminate in a liability to pay the debt of another, that is not the immediate object for which the consideration is given.” It has been contended that a factor who has actually received the money for the goods of his principal is in the same position as if he had agreed to stand del credere. This is not so. The factor’s obligation is not increased, by reason of his receipt of the remittance from the purchaser, beyond what it was in the earlier stages of the business. He is obliged to use average judgment and discretion, but he does not guarantee the payment whatever may betide. In making the remittance, then : (1) If he follows the ordinary course of business ; or (2) If he remit the money by a banking house of recognised position and in good credit ; 6 or (3) If he remit in the way settled by either mercantile or local usage ; 7 he will be free from liability. A factor or broker is an agent with regard to funds coming to his hands which are to be applied in a particular way ; and the money 1 Caffrey v. Drirby, 0 Ves. 488, 490 ; Tobin v. Murison, 5 Moo. P. C. C. 1 10. 2 “ The phrase del credere is borrowed from the Italian language, in which its signifi- cation is exactly equivalent to our word guaranty, or warranty ” : Story, Agency, $ 33, and Ex parte White, In re Nevill. L. R. 0 Oh., per Mellish, L. ,T., 403. 3 Mackenzie v. Scott, 0 Brown, Pari. Cas. 280; Houghton v. Matthews, (1803) 3 B. & P. 485 ; 2 Kent, Comm. 025, and note 1 by Mr. Holmes to the 12th ed. Dram well v. Spiller, 21 L. T. (N. S.) 072, holds that an agent upon del credere commission is in no different position with regard to a vendee than any other agent, and cannot sue the vendee in his own name for a debt contracted between the principal and the vendee. •» 29 Car. II. c. 3. s Couturier v.Hastie, 8 Ex. 50, reversed on another point, 9 Ex. 102, 5 II. I .. C. 073. See per Blackburn, Knight v. Lord Plimouth. 3 Atk. 480. 7 Russell v. Hankey, 0 T. R. 1 2. VARIOUS RELATIONS. 821 CHAP. T.] paid to him may therefore be followed by his principal as far as it can be traced. 1 Lord Langdale, M.R., in Clarice v. Tipping, 2 the case of a Clarke v. fraudulent factor, expresses the broad principle on which a factor Tl PP in 9 : is to be judged : Among the most important duties of a factor are j j0r( j Lang- those which require him to give to his principal the free and unbiased lj - J - the goods shall not be allowed to set up a wrongful prior act by which he has made away with the goods. He who ought to produce the goods of the man who has the title to the goods and the property in the goods, cannot discharge himself by saying, ‘ I have wrongfully made away with them, but that was before the accruer of your title.’ ” 2 The duty of a warehouseman issuing receipts for goods in cases, Duty of ware- sacks, or barrels, not open to be tested, may be noticed. By giving a houseman receipt he merely expresses that he has received goods packed, bearing cTipt” g for' the same outward appearance as do cases in which are packed mer- goods in chandise of the character described in the receipt ; and that there is packages not nothing unusual or out of the ordinary way of business in the marks, tested'* * appearance, signs, labels, or character of the packages differing from that in which goods of the character described in the receipt are usually transported ; and that they have been represented to him, and that he believes them to be, as described . 3 * Many difficult questions occur, in the case of carriers who also Carriers who warehouse goods, as to when their liability as carriers ends and that as j lre ware- warehousemen begins — such, for instance, as are discussed in Bourne nousemen - v. Gatliffe 4 and Cairns v. Robins . 5 In Mitchell v. Lancs & Y . Ry. Co., Mitchell v. Blackburn, J ., 6 states the rule of law : “ Where a carrier receives goods j { anc c f * Y - to carry to their destination with a liability as carrier (except so far ,J ' °' as that duty is qualified by exceptions), he may be said to be an insurer. The goods are then to be carried at the risk of the carrier to the end of the journey, and, when they arrive at the station to which they were forwarded, the carrier has then complied with his duty when he has given notice to the consignee of their arrival. And after this notice, and the consignee does not fetch the goods away, and becomes in morn, then I think the carrier ceases to incur any liability as carrier, but is subject to the ordinary liability of bailee.” And he adds : “ I do not think there has been any case decided to this extent, that because the owner of goods was idle and blameable for leaving them in the carrier’s hands, therefore he as bailee held them under no responsibility whatever.” In Chapman v. G. W. Ry. Co., the question of liability was more Chapman v. fully discussed by Cockburn, C.J . 7 The Chief Justice points out that G - w - R V- Co - between the receipt of the goods and their departure, there must be an '/," <1 ^ r | ) nent of interval, and that this may be of even considerable duration. Again, q j there is not infrequently delay between their arrival at their destination 1 [1891] 2 Q. B. G63. 2 Lindley, L.J., points out that Blackburn, J.’s, difference of opinion turned on a point of pleading, and that his difficulty would have been met if the vendor to the plaintiff had been joined as co-plaintiff : Bristol and, West of England Bank v. Midland lly. Co., [1891] 2 Q. B. 601. The delivery of the key of the warehouse in which goods sold are deposited is a delivery sufficient to transfer the property ; so is the transfer of them in the warehouseman’s or wharfinger’s book to the name of some other person: Chaplin v. Rogers, 1 East, per Lord Kenyon, C.J., 194; Harman v. Anderson, 2 Camp. 243, referring to Hurry v. Mangles, 1 Camp. 452. See ] 1 R. R. 707 n. Cp. D. 41, 2, 1, § 21 : vina tradita videri cum claves cellce vinarice emptori tradilcB fuerint. 2 Dean v. Driggs, 137 N. Y. 274, 33 Am. St. R. 721. * 4 Bing. N. C. 314 ; 3 M. & G. 043 ; 1 1 Cl. & F. 45. Post, 910. 5 8 M. & W. 258. Sale of Goods Act, 1893 (56 & 57 Viet. c. 71), s. 32. 6 L. R. 10 Q. B. 200. Price v. Union Lighterage Co., [1903] 1 K. B. 750, 755, affd. [1904] 1 K. B. 412. 7 5Q. B. D. 281. Reasonable time. Hick v. Rodocafiach i. 834 NEGLIGENCE IN LAW. [book v. and the delivery of them to the consignee, “ as, for instance, when goods arrive at night, or late on a Saturday, or where the train consists of a number of trucks which take some time to unload.” In these cases “ the goods remain in his [the bailee’s] hands as carrier, and subject him to all the liabilities which attach to the contract of carrier.” “ The case, however, becomes altogether changed when the carrier is ready to deliver, and the delay in the delivery is attributable not to the carrier, but to the consignee of the goods. Here again, just as the carrier is entitled to a reasonable time within which to deliver, so the recipient of the goods is entitled to a reasonable time to demand and receive delivery. He cannot be expected to be present to receive delivery of goods which arrive in the night-time, or of which the arrival is uncertain, as of goods coming by sea, or by a goods train, the time of arrival of which is liable to delay. On the other hand, he cannot, for his own convenience or by his own laches, prolong the heavier liability of the carrier beyond a reasonable time. He should know when the goods may be expected to arrive. If he is not otherwise aware of it, it is the business of the consignor to inform him. His ignorance — at all events where the carrier has no means of communi- cating with him — which was the case in the present instance — cannot avail him in prolonging the liability of the carrier, as such, beyond a reasonable time. When once the consignee is in mord by delaying to take away the goods beyond a reasonable time, the obligation of the carrier becomes that of an ordinary bailee, being confined to taking proper care of the goods as a warehouseman ; he ceases to be liable in case of accident. What will amount to reasonable time is sometimes a question of difficulty, but as a question of fact, not of law. As such, it must depend on the circumstances of the particular case.” 1 The question of “ reasonable time ” was exhaustively dealt with in Hick v. Rodocanachi , 2 a shipping case where the defendants, consignees under a bill of lading, were prevented by a strike of dock labourers from unloading. The bill of lading contained no mention of the time within which the goods were to be unloaded. The time implied was therefore a “ reasonable time.” The strike delayed the business for a month. Neither plaintiff nor defendants were in default, each doing the utmost possible for the unloading. The plaintiff, however, sued in re- spect of the delay, contending that time is to be measured by something which may be measured more or less exactly when the contract is entered into ; that reasonable time implies ordinary circumstances. 3 The defendants’ contention on the other hand was that reasonable time was to be determined, not by the probabilities at the time of making the contract, but by reference to the state of things as ascertained by the event. 4 The Court of Appeal adopted this view, and held that as 1 The cases of the primd facie obligation of the carrier to make an actual delivery to the consignee are carefully collected in Angell, Law of Carriers (5th ed.), §§ 301, 304. Post, 908. 2 [1891] 2 Q. B. 02G, reported in the House of Lords sub nom. Hick v. Raymond <0 Reid, [1893] A. C. 22 ; Taylors v. Maclellans, 19 Reltic, 10. “ The question what is a reasonable time is a question of fact ” : Sale of Goods Act, 1893 (50 & 57 Viet, c. 71), s. 56. Hulthen v. Stewart, [1903] A. C. 389. a This view was supported by citing Burmester v. Hodgson, 2 Camp. 488 ; Ford v. Coteswortli, L. R. 4 Q. B. 127 ; in Ex. Ch. L. R. 5 Q. B. 544 ; Wright v. Neiv Zealand Shipping Co., 4 Ex. D. 105, considered [1893] A. C. 31. t Their authorities were Lord Tenterden, C.J., in Rogers v. Hunter, M. & M. 03, defining “reasonable despatch”; Erie, C.J., Byles, and Montague Smith. J.J., in Taylor v. The Great Northern Ry. Go., L. R. 1 C. P. 385, “ reasonable time ” ; Thesiger, L.j., in Postlelhwaite v. Freeland, 4 Ex. D. 155, “reasonable diligence”; and Lord VARIOUS RELATIONS. 835 CHAP. I.] the strike could not be put down to any default on the defendants’ part, and siuce there was no provision for the case in the contract, they could not be held liable for the delay. This decision was upheld in the House of Lords, where it was pointed out 1 that if the terms of the bills of lading had required the discharge to be effected in any particular number of days, it was quite clear that the burden of the delay would have fallen on the defendants ; but that the balance of authority was distinctly in favour of the view that “ reasonable time ” is to be interpreted by the actual event, and not by consideration of ordinary circumstances merely. If the consignee refuses to accept goods, the carrier becomes an Refusal of the “ involuntary bailee,” and it is to be left to the jury whether, con- consignee to sidering all the circumstances, he has “ acted with reasonable care.” 2 ‘ lccol,t ‘ Where negligence is alleged against a warehouseman the onus is on Onus. the plaintiff, unless there is a total default in delivering or accounting for the goods. 3 (3) Closely allied to the business of a warehouseman is that of a wharfinger . 4 A wharf is a sort of quay constructed of wood or stone, on the margin Wharfinger, of a roadstead, harbour, or river, alongside of which ships or lighters are ^fiaition brought for the sake of being conveniently loaded or unloaded. 5 In England wharfs are of two kinds : (a) Legal wharfs — certain wharfs in all seaports appointed by Wharfs either commission from the Court of Exchequer or legalised by Act of (“) Le S aI > ° r Parliament. (b) Sufferance wharfs — places where certain goods maybelandedand (C Sufferance, shipped by special sufferance granted by the Crown for that purpose. 6 Selborne, in Postlethwaite v. Freeland, 5 App. Gas. 608, “ reasonable time under the circumstances.” “ Reasonable time ” in mercantile transactions is not applicable to cases of contracts respecting real property. For the considerations applicable, sec per Lord Chancellor Manners : Jessop v. King, 2 Ball. & B. (Ir. Ch.) 95 ; Edwards v. Carter, [1893] A. C. 300. See on the same subject of reasonable time, Chapman v. Larin, 4 Can. S. C. R. 349, and the remarks of Lord Blackburn, Dahl v. Nelson, 6 App. Cas. 54. 1 [1893] A. C., per Lord Herschell, C., 28. The dictum of Lord Blackburn in Postlethwaite v. Freeland, 5 App. Cas. 599, that a stipulation that cargo is to be dis- charged with all dispatch according to the custom of the port, is identical with the implied obligation to discharge within a reasonable time, is dissented from by Lord Herschell, C., [1893] A. C. 30. 2 Heugh v. L. & N. W. lty. Co., L. R. 5 Ex., per Kelly, C.B., 57. As to the duty of wharfingers to retain goods till proper delivery orders are presented to them, see Carr v. L. J - either to give notice of the danger arising from the campshed being there in that state, or to have had it repaired and properly constructed. They succeeded to the wharf and, therefore, to the benefit of the camp- shed.” In both of these cases the cause of the injury was under the con- trol of the defendants, and its existence was unknown or imperfectly known to the plaintiffs. The duty on the defendants was therefore clear. In The Moorcock 2 the plaintiffs’ vessel was injured through the uneven nature of the bed of the river where the vessel was moored to discharge at the defendants’ wharf. The bed of the river was vested in conservators, and the defendants had no control over it. The case of the plaintiffs first alleged a warranty, that the condition of the bottom was fit and safe ; this, however, was negatived by Butt, J ., 3 and was not raised in the Court of Appeal. The plaintiffs also contended that the defendants owed them a duty and must be taken to have represented that they had taken reasonable care to ascertain that the bottom of the river at the jetty where the plaintiff’s vessel was moored was in such a condition as not to endanger its safety in the ordinary way. This contention Butt, J., affirmed. In the Court of Appeal the point glanced at in The Queen v. Williams* that there was no duty on the defendants extending beyond the premises, was strenuously argued. The judgment of Butt, J., was, notwithstanding, upheld, though the distinction between the injury being caused on or of} the premises was recognised by Bowen, L.J ., 5 who founded himself on the words of Holt, C.J., in Coggs v. Bernard , 6 “ it would be unreasonable to charge persons with a trust further than the nature of the thing puts it in their power to perform.” Applying this he adds : “ The law will not imply that the persons who have not the control of the place have taken reason- able care to make it good, but it does not follow they are relieved from all responsibility.” The Lord Justice then indicates what their responsibility is : “ They are on the spot. They must know that the jetty cannot be used unless reasonable care is taken, if not to make it safe, at all events to see whether it is safe. No one can tell whether reasonable safety has been secured except themselves, and I think if they let out their jetty for use they at all events imply that they have taken reasonable care to see whether the berth, which is the essential part of the use of the jetty, is safe, and if it is not safe, and if they have not taken such reasonable care, it is their duty to warn persons with whom they have dealings that they have not done so.” There is an implication on the part of the wharf- owner that he has taken reasonable care to ascertain that the condition of the berth is safe, and if it turns out to be unsafe, want of knowledge will not avail him. He can shelter himself by showing that he took reasonable care to find out or, if he did not, at the lowest he must say so and not permit the person coming in to be misled . 7 In the Court of Appeal, The Calliope 8 was decided on the assumption The Calliope. 1 L.c. 36. 2 [1889] 14 P. D. 64, followed in Ireland in Butler v. M' Alpine, [1904] 2 I. R. 445. 3 13 P. D. 157. 4 9 App. Cas. 418. s 14 P. D. 70. 6 2 Ld. Raym. 918. 7 The Bearn, [1906] P., per Collins, M.R., 76. Cp. Casement v. Brown, 148 U. S. (41 Davis) 615. 8 14 P. D. 138 ; [1891] A. C. 11. McCallum v. Odette, 7 Can. S. C. R. 36, was an action brought by one vessel against another for damage caused by negligently anchoring beside a wharf. 842 NEGLIGENCE IN LAW. [book V. Judgment of Lord Esher, M.R. Decision re- versed in the House of Lords on the facts Lord Herschell's opinion. that the case was indistinguishable from The Moorcock. The Calliope was bound by charter party to deliver the cargo as directed by the consignees or their agents, and accordingly was ordered by the defend- ants to discharge the cargo at their wharf, where there were two berths, the first alongside the wharf, the second outside the first. In the space between the two a ridge of mud had been allowed to accumulate, on which the plaintiffs’ vessel struck and was injured. “ In The Moorcock,” said Lord Esher, M.R., 1 “ we held that the wharfinger must take reasonable care that the front of his wharf is in a state of safety, or, if it is not, warn persons who have to use it that it is unsafe ; it was not necessary to decide that there was a warranty by the wharfinger that the wharf was safe. The present case is, however, stronger than that of The Moorcock, because here the ship was bound to go to the defendants’ wharf by contract, in the former case the ship could use the wharf if she pleased.” Though, in the opinion of Lord Esher, M.R., the case was stronger than that of The Moorcock, that learned judge did not limit his decision to the point common to both cases. He says : “ Is that duty ” ( i.e . the duty of the wharfinger) “ confined to the place close to the wharf ? Or is the wharf-owner liable for damage done to a ship by grounding upon a place which is in a dangerous state and over which she must necessarily go to get into the berth at the wharf ? In my opinion the duty of the wharfinger extends to that part of the frontage as well as to the actual spot where the ship will finally lie, and his duty is to keep it reasonably safe or to tell those coming to his wharf that it is not safe.” On this point Bowen, L.J., had carefully guarded himself in The Moorcock, 2 saying : “ So far as I am concerned I do not wish it to be understood that I at all consider this is a case of any duty on the part of the owners of the jetty to see to the access to the jetty being kept clear.” In the House of Lords the decision in The Calliope was reversed, on the ground that the Court of Appeal took a wrong view of the facts, and that what was held in the Court below to be an order to go to the wharf in fact gave information upon which the captain and pilot must form their own j udgment ; 3 further, the assumption made in the Court of Appeal — that “ the ship was injured by grounding on the land of the defendants ” was one for which the respondents “ entirely failed to show the slightest foundation ” ; 4 while the attribution to the defendants of responsi- bility for the existence of the ridge arose from a misapprehension of the real state of things, as the existence of the ridge was to be regarded as an incident to the natural use of the river by vessels navigating it. Discussing the liability for the state of things outside the premises Lord Herschell 5 says : “ If the obstruction which created the diffi- culty ” “ had been caused by sonic unusual and extraordinary circum- stance which those navigating the river would have no right to antici- pate, but which would be known to the wharfinger, then I quite agree that some duty on his part would arise towards them, and in the absence of warning, it may be that he would be under some responsi- bility.” But in the case at bar it was pointed out that the pilot was well aware of the inequalities in the river. Lord Herschell then called attention to one very forceful consideration that had escaped 1 14 P. D. 1 40. 2 14 P. D. 70. 3 [1891 ] A. C„ per Lord Halsbury, C.. 15. ■i L.c., per Lord Watson, 23, and per Lord Herschell, 25. s L.c. 28. VARIOUS RELATIONS. 843 CHAP. I.] notice : 1 “If on the one hand the condition of the bed of the river may be said to have been a matter peculiarly within the knowledge of the appellants, on the other hand the draught of the vessel, which was of at least as great importance in determining whether the vessel could approach the wharf or not, was peculiarly within the knowledge of the respondents.” Lord Watson also says : 2 “ I do not doubt that there is a duty L ° rd j incumbent upon wharfingers in the position of the appellants towards s vessels which they invite to use their berthage for the purpose of loading from or unloading upon their wharf ; they are in a position to see, and are in my opinion bound to use reasonable diligence in ascer- taining, whether the berths themselves and the approaches to them are in an ordinary condition of safety for vessels coming to and lying at the wharf. If the approach to the berth is impeded by an unusual obstruction they must either remove it, or, if that cannot be done, they must give due notice of it to ships coming there to use their quay.” 3 The fact that harbour trustees have a duty cast on them to look to the safety of the navigation does not free a wharfinger inviting ships to come to his berth for remuneration from a duty to ascertain the condition of their berth and, if need be, to warn ships purposing to come there . 4 Reference may here be made to Hibbs v. Ross . 5 A ship was laid up Ilibbs v. Ross. in dock for the winter under the care of a shipkeeper, who removed the hatches from one of the hatchways leading into the hold, into which the plaintiff fell and was injured while lawfully on the ship and in the direct course used by persons passing across the ship from and to another ship. The only point discussed in the case, and in which the Court of Queen’s Bench were divided in opinion, was whether the ship’s register on which the defendant’s name appeared as owner was prima facie evidence for the jury from which they might draw the inference that the person in charge of the ship was employed by the defendant. This was decided in the affirmative. A question of a duty to keep the hatchway closed was not raised ; probably because the negligence in the particular facts was indubitable. The general proposition— undisputed in Hibbs v. Ross — that there is a duty to keep hatchways closed while a ship is laid up in dock for the winter— was denied in an American State case . 6 “ It would be Caniff v. preposterous,” said the Court, “ to hold that the owner who places his ^avi^a'd'oii vessel in charge of a shipkeeper during the time she is out of commission Co. and lying in winter quarters, is charged with the duty of building a railing around the open hatchways or with maintaining a light to indicate danger for the purpose of protecting persons from injury i L.c. 29. 2 L.c. 23. 3 The remarks of the Lord Chancellor at the bottom of 17 and on the first half of 18, seem rather directed to the question of the liability of some previous vessel for making the ridge, than to that of the breach of duty on the part of the wharfinger, in not removing it when near or not apprising those about to use the berth of its existence. It seems perfectly possible, that a vessel using the bed of the river in the natural way may so affect it as to cause damage to a following vessel, without being liable for it ; while yet a wharfinger having a knowledge of the unusual destruction to the use of this berth, would be liable for inviting a ship there without giving warning of what Lord Herschell calls “ unusual and extraordinary circumstances.” Cp. Lctchjord v. Oldham, 5 Q. B. D. 538. * The Bearn, [190G] P. 48, 82. 5 L. R. 1 Q. B. 534. ® Caniff v. Blanchard Navigation Co., 11 Am. St. R. 545. Cp. the English case of O'Neil v. Bverest, 61 L. J. Q. B. 453, where it was held no part of the defendant’s duty to supply a cover for a hatchway. Ante, 64. Gray v Thomson. Dock com- panies acting as warehouse- men and wharlingers. Forwarding agents. Tiieir duty. 844 NEGLIGENCE IN LAW. [book v. by falling into thorn. ” This, in the abstract, seems excellent sense. A duty may, however, be constituted by the custom of that port where the vessel lies to use such precautions ; 1 or the place a vessel occupies may be conceded subject to a right of way being allowed over it ; and then if the user of the way is a right as distinguished from a mere permission it must not be kept in a condition unnecessarily dangerous. In Gray v. Thomson, 2 a Scotch case, by the rides of the port of Glasgow, there was an obligation on those responsible for ships in the position the defenders’ vessel occupied, to keep hatchways protected at night ; and the question was raised to what extent a deflection from this obligation was allowable when it was necessary to work at night. There could be no implication that night work was not lawful ; and, if lawful, the care and caution dictated by the circumstances was alone required. The shipowner was held not liable. Dock companies are both warehousemen and wharfingers ; in each of these capacities they must afford the security demanded of their calling or occupation. (£) Here, too, must be noticed the class of forwarding agents. Forwarding agents are a class of business men who store and forward goods by other agencies than their own, and receive a com- mission for their trouble in storing goods and in selecting carrying agencies for them. 3 In so far as they store goods, they are mere ware- housemen ; in so far as they forward them, they are ordinary agents. 4 Forwarding agents are liable for ordinary negligence, and bound to ordinary diligence, and to that only. 5 Many attempts, says Brett, J., 6 have been made to introduce within the exceptional liability of common carriers other trades, as those of wharfingers, forwarding agents, carters, &c., “ but all such attempts have failed, because those trades, although, in respect of their being public or common trades, they are similar to the trade of common carriers, are not similar to it in those respects in which it was similar to the trades of shipmasters and innkeepers.” One of the first duties of forwarding agents as consignees for transmission undoubtedly is to obey the instructions of the con- 1 la Loader v. London and East and I Vest India Docks Joint Co., C5 L. T. C74, the work in question was only “ usually performed ” ; the case negatives any such practice as amounts to the holding out of an inducement. In The Hornet , [1892] P. 361, it was laid down, distinguishing The Scotia, C Asp. M. L. C. 541, that there is no duty in law on the owner of a barge to have a man on board of her when moored in a dock. As to duty of those on board a ship within the jurisdiction of a harbour- master, to conform to the directions of the harbour-master, even when those directions are probably erroneous : see Reney v. Magistrates of Kirkcudbright, [1892] A. C. 204. 2 17 Eettie, 200. In Forsyth v. Ramage, 18 Rettie, 21, there was held to be no duty to fence the unfinished portions of buildings or vessels in course of construction, so that where a man engaged on a ship that was building, fell down a manhole in the engine- room, he was held disentitled to recover. This case was distinguished in Jamieson v. Russell, 19 Rettie, 898, on the ground that the tank into which the deceased fell was at other times usually covered and lighted, whereas on the occasion of the accident, it was neither covered nor lighted. The Lord President (Robertson), who had succeeded Lord President Inglis between the time of the decision of the two cases, intimated that, in his opinion, Forsyth v. Ramage was wrongly decided. Lord M’Laren dissented from the decision in Jamieson v. Russell. Forsyth v. Ramage was decided on the ground of “ the impossibility of fencing consistently with the progress of the work of completing the ship.” Thomson v. Scott, 25 Rettie, 54, is a “ trap ” case. Ante, 449. 3 Wharton, Negligence, § 703. Aldridge v. G. II'. Ry. Co., 15 C. B. N. S. 582, see conclusion of judgment of Williams, J., 599. Crompton, J., describes the contract made as a forwarding agent : Bristol and Exeter Ry. Co. v. Collins, 7 H. L. C. 213. * Roberts v. Turner, 12 Johns. (Sup. Ct. N. Y.) 232. f> 2 Kent, Comm. 591 ; Story, Bailm. § 444 ; Wharton, Negligence, § 703 ; Alabama, 5 wh ere also the determination whether the American of fart h 1 S T ai ! d ^ n t ee Pf T 18 established is held to be a question «*» : l ta lTrT ts t° be taken into consideration are thus summed /Mlv ~ Pike - of accnmltf 1011 °J * f plaintiff’s stay, the price paid, the amount of STSiffS 011 a f 6 ’ i 6 transient or Permanent character Plaintiff s residence and occupation, his knowledge or want of Said hv ge b T y dlfl f ence of “Nation afforded to, or price ouetbfn’ Tr erS and /S™*?. a « a » ‘o be regarded in settling the question. It is expressly decided in Berkshire Woollen Co. v. Proctor 6 Ti t an agreement with an innkeeper for the price of board of guest ” n deC1S1Ve that tHe relati ° n iS that ° f border instead aso^h^ f keSe ? atters *? a consideration of the various Relation P he relation when constituted between the innkeeper and between the 1 innkeeper and i Lc., Bowen, L.J., 27. Ante, 834. 2 r, his guest. to thafdegree 5 of 8 c 4 a 8 re impSed'on fU 'L y the innkeeper ii held only to the efficts r ™ r a gratuitous bailee, and is liable for losses or injuries ThoX»»! Nin^rr«7i 8 ” ° y whpte he is 01 «"» »»eiis«S" 186, that may^ie’looked meri , e “® aa «. "'‘- err ■' Olcanon, 20 Am. St. R. : r, „ OOKea connection with the case n the tevf VoJ ,r ' 49S ’ “ 01 M “- 424 St»y, Bailm. 1 477. NEGLIGENCE IN LAW. 850 [book V. Form of the ancient writ in the Register. Praetor’s Edict. Limitations in the civil law. his guest — whom, says Ashhurst, J., 1 “ the law has fixed an indelible obligation ” on the innkeeper to receive — we have first to see what liability for negligence is raised thereby. The law of the innkeeper’s liability has been said to be peculiar to the English law ; and the ancient writ in the Register lays a duty on innkeepers “ by the law and the custom of England,” the analogy of which has been seized on in other cases. There is, however, a marked similarity to the rule of the civil law. 2 By the Pra3tor’s Edict a peculiar responsibility was laid upon shipmasters, innkeepers, and stable-keepers, who were made liable for all losses not arising from inevitable casualty or overwhelming force. Ait Prcetor : Nautce, caupones, 3 stabularii , 4 quod cujusque salvum jore receperint, nisi restituant, in eos judicium dabo. h To which is subjoined the remark of Ulpian : Maxima utilitas est hujus edicti ; quia necesse est plerumque eorum fidem sequi, et res custodice eorum committer e. Ne quisquam putet graviter hoc adversus eos constitutum ; nam est in ipsorum arbitrio, ne quern recipiant. And the explanation is given, Nisi hoc esset statutum, materia daretur cum furibus adversos eos, quos recipiunt, coeundi ; cum ne nunc quidem abstineant hujus modi fraudibus. 6 * The extent of the liability is indicated as follows : At hoc edicto omnimodo qui recepit tenetur, etiamsi sine culpa ejus res periit, vel damnum datum est ; nisi si quid damno jatali contingit. Inde Labeo scribit, si quid naufragio aut per vim piratarum perierit non esse iniquum exceptionem ei dari. Idem erit dicendum et si in stabulo, aut in caupona vis major contigerit? The responsibility of innkeepers by the civil law was further limited in several respects. It was not enough to charge the inn- keeper that the guest had brought his goods or baggage to the view or the knowledge of the innkeeper ; he must have delivered them into his charge. Neither was the innkeeper responsible for the acts of other guests or persons at the inn, though he was responsible for the acts of his servants and boarders done in the house. Neither was he compelled to receive the guest when he had room, as he is by the common law. 8 These limitations are found in the jurisprudence of those nations of Europe which have taken the civil law for their model, 9 and are the variations that have been urged, amongst others, as grounds for inferring a native origin to our law. 1 Kirktnan v. Shawcross, 6 T. R. 18, per Lord Kenyon, C.J., 18, referring to 3 W. & M. c. 12, and 21 G. II. o. 28. 2 Per Holt, C.J., Lane v. Cotton, 12 Mod. 482. 3 Cawpona, locus ubi caupones vinum ct cibos vendunt. 4 As to this word, it is used in the second sense given for it in Faociolati and Forcellini’s Lexicon (sub verbo) : Qui mercede homines eorumque jumenta hospitio excipit. Nam stabulum turn ad jumenta pertinet, turn ad homines. See note hy Denman, J., to judgment of Brett, J., in Nugent v. Smith, 1 C. P. D. 29. The conclusion of the passage cited hy Denman, J., is as follows : Videtur a cauponc difjerre in co, quod caupo viatoribus necessaria ad victum preebet ; stabularius etiarn tectum ct ledum. D. 47, 5, Furti adversus nautas, caupones, stabularios. See Pothier, Pand. 4, 9, §§1,2. Compare Hor. Sat. i. 5, 4 — “ Inde jorum Appii Difjertum nautis cauponibus alque malignis.” 6 D. 4, 9, 1, pr. o D. 4, 9, 1, § 1. 7 D. 4, 9, 3, § 1. s Bex v. Ivens, 7 C. & P. 213 ; Hawthorn v. Hammond, 1 C. & K. 404 ; 1 Hawk. P. C. bk. 1, c. 78, Of Nuisances relating to Public Houses, §§ 1, 2 ; State v. Steele, 19 Am. St. R. 573. !• Story, Bailm. §§ 40G, 407, citing Dig. 4, 9, Nautce, Caupones, Stabularii ut reccpta restituant, and Pothier, Traite du Depot de l’Hotellerie, nos. 79, 80. VARIOUS RELATIONS. 857 CHAP. I.] The liabilities of an English innkeeper are treated at length in Liabilities of Calye’s case,' which is the leading English authority upon the subject. ® n ^g® h )crs There the exact point resolved was that if a man come to an inn and inn ° C1>CIS ' deliver his horse to the innkeeper to be put to pasture, and the horse be stolen, the innkeeper is not responsible, because the case is outside the terms of the original writ 1 2 by which the duties of innkeepers are specified. It is, however, from Coke, C.J.’s, commentary on the words of this writ, clause by clause, as it is set out in the report, that the principles of the law with regard to innkeepers are to be collected. They are : First : The action must be against the keeper of a common inn . 3 4 Principles Second : The thing in respect of which the action is brought must d , own m be infra, hospitmmr * Third : The innkeeper is bound in law to keep the goods of his guest within the inn, “ without any stealing or purloining,” 5 utiless by the guest’s own servant or by fault of the guest. Fourth : If the guest is beaten in the inn, the innkeeper is not answerable, “ for the innkeeper ought to keep the goods and chattels of his guest, and not his person.” 6 For all that, it is the duty of the innkeeper to take reasonable care Duty to take of the persons of his guests, so that they are not injured by want reasonable thereof while they are in his house. Thus, in Sandys v. Florence , 7 a persons of statement of claim being amended so as to set out that, while the the guests, plaintiff was using an hotel, of which the defendant was proprietor, as a guest for reward to the defendant, by the negligence of the defendant the ceiling of the room in which the plaintiff was fell upon and injured him, was held to disclose a cause of action ; though it was conceded that, as originally drawn, omitting the allegation that plaintiff was received as a guest for reward to the defendant, the claim was not sustainable. 1 8 Co. Rep. 32 a, 1 Sm. L. C. (11th ed.), 119. Cp. Com. Dig. Action upon the Case for Negligence (B), Action against a Common Innkeeper. 2 Fitzh. De Nat. Brev. 94 B. Registrum Brevium, 105 a : De transgressione quando quis depredatus est in hospitio transeundo per palriam. The distinction is pointed out in Warbrook v. Griffin, 2 Brownl. 255 : “ If the owner desire that his horse should go to grass, the innkeeper shall not answer ; but if an innkeeper receive the horse, and of his own head puts the horse to grass, and he is stolen, there the inn- keeper shall be charged.” The distinction is that of the civil law as stated by Ulpian : Eodem modo tenetur caupones et stabularii, quo exercenles negotium suum recipiunl : caeterum si extra negotium, receperint, non tenebuntur : D. 4, 9, 3, § 2. 3 8 Co. Rep. 32 a. In Parker v. Flint, 12 Mod. 254, 1 Ld. Raym. 479, nom. Park- hurst v. Foster, Holt, C. J., held that a person may hire lodgings at an inn and so not be a guest ; and d fortiori this is true of a private house ; Com. Dig. Action upon the Case for Negligence (B), (B 2.) ; Holder v. Soulby, 8 C. B. N. S. 254. Where a gig was stolen that was put by the ostler outside the inn yard, in a part of the street where the defendant was in the habit of placing the carriages of his guests on fair days, and was not put there at the instance of the plaintiff, the plaintiff recovered : Jones v. Tyler, 1 A. & E. 522. 4 8 Co. Rep. 32 b. In Stannian v. Davis, 1 Salk. 404, the innkeeper was held liable where a horse was taken out of the inn, and immoderately ridden and whipped, though it did not appear by whom. Bags of wheat stolen during the night from an o house appurtenant to the inn, where loads of that description were ordinarily received, were held to be infra hospitium : Clvte v. Wiggens, 14 Johns. (Sup. Ct. N. Y.) 175 ; but see Albin v. Presby, 8 N. H. 408, to the contrary. 6 8 Co. Rep. 33 a ; Walsh v. Porterfield, 87 Pa. St. 376. There is no distinction between money and goods : Kent v. Shuckard, 2 B. & Ad. 803. 6 8 Co. Rep. 33 b ; Candy v. Spencer, 3 F. & F. 306, where goods were left in the lobby of an inn; Hallenbakev. Fish, 8 Wend. (N. Y.)547; innkeeper not liable in trover without an actual conversion; Norcross v. Norcross, 53 Me. 163 ; where goods were stolen from a sea-bathing house provided for a guest, but separate from the inn. Minor v. Staples, 71 Me. 316, 36 Am. R. 318. 7 47 L. J. C. V. 598. Extent of innkeeper’s obligations. B urgess v. Clements. 858 NEGLIGENCE IN LAW. [book v. There is also a duty on the innkeeper to do what he can to keep his guests from suffering violence at the hand of other guests. Of course the innkeeper’s liability as an insurer does not extend thus far ; but, though there is no decision precisely in point, the principle is plain — innkeepers are bound to use what means they have available for the protection of their guosts where they have knowledge of danger threatening them while in their inn. 1 The innkeeper is bound to the exercise of reasonable care, and this duty cannot be delegated so as to relieve the innkeeper ; 2 but his liability rests on the ground of negligence. There is a representation by the innkeeper that his inn is reason- ably fit for occupation with safety by his guest, not merely, as in Sandys v. Florence , 3 from structural dangers, but from dangers arising from disease or bad sanitation known to him. Thus an hotel-keeper who had a case of small-pox in his hotel was held liable in damages to a guest whom he had received without notifying its presence, and from which disease the guest subsequently suffered. 4 The extent of the innkeeper’s obligation to answer for the safety of property brought to his inn by a guest was the subject of decision by the King’s Bench in Burgess v. Clements , 5 Plaintiff went to defendant’s inn as a guest, and was shown into the travellers’ room. Subsequently he asked for a room in which he might show his goods. The innkeeper’s wife assented, “ accompanied with that which is equivalent to telling him that he must take charge of it, for she says, ‘ You may have the room ; there is a key to the door, and you may lock it.’ ” The plaintiff took the room, and displayed his goods there to a customer. Whilst he was doing so, the door twice opened and a stranger looked in. The customer suggested the necessity of care in view of the suspicious conduct of the stranger. After he had gone, the plaintiff left the room without taking any precaution, and did not return till nine o’clock, when two of his boxes containing valuables were missing. The door of the room opened into a gateway which led to the street, and there was a key in the lock outside. The plaintiff did not lock the door when he went away, and “ did not know that he even shut it.” The jury were directed that an innkeeper is frima facie answerable for the goods of his guest in his inn, but that a guest by his own conduct may discharge the innkeeper from his responsibility. They found for the innkeeper. On motion for a new trial, the direction of the judge at the trial was 1 Cp. Law Magazine, Nov. 1892, No. 286, 68. The condition of the licence of an innkeeper is that “ he should not permit drunkenness or disorderly conduct, unlawful games, or the assembling of persons of notoriously bad character on his premises ” : Paterson, Licensing Acts (18th ed.), 3. Thompson, Negligence, § 6674. 2 Stott v. Churchill, 36 N. Y. Supp. 476, and 157 N. Y. 692, the case is merely reforred to ; no facts are given. 3 Supra. * Gilbert v. Hoffman, 66 Iowa, 205. In Rex v. Luellin, 12 Mod. 445, an innkeeper was indicted for refusing to receive one taken ill with the small-pox. The indictment “ was quashed for not saying he was a traveller.” 3 4 M. & S. 306. An early case is Sanders v. Spencer ( 1568), 3 Dyer, 266b, with t he Y. B. references in the margin. In Roll. Abr. Action stir Case (D), Vers Hosteler, pi. 3, it is laid down that an infant innkeeper cannot be held liable in an action on the case for the loss of his guest’s goods ; but see Cross v. Andrews, Cro. Eliz. 622. See, Y. B. 42 Ed. III. 11, pi. 13, for an action on the custom of England that in all common inns the innkeeper and his servants should take good care of what things their guests had in their chamber in the inn; Reevos, Hist, of the English Law (2nd ed.), vol. iii. 91 ; Shep. Abr. Innes. The law is now subject to the limitations imposed by The Inn- keepers’ Liability Act, 1863 (26 & 27 Viet. c. 41). VARIOUS RELATIONS. 859 CHAP. I.] sustained. Admitting an innkeeper to be prima facie liable, there Primd facie may be circumstances by which that vrimd facie liability is discharged ! ia,5lllt y of — as, for example, if the guest by his own neglect induces the loss , 1 or re b u ttable. himself introduces the person who purloins the goods. Neither is it a part of the business of an innkeeper to provide showrooms for his guests, but only convenient lodging-rooms and lodging. In the case under discussion, the requirement of the plaintiff was for a room to display his wares, a necessary attendant on which was the introduction of persons over whom the innkeeper had no check or control, and so for a purpose alien from the purposes of an inn, which is ad hosfitandos homines. Again, the duty of the plaintiff was to use “ at least ordinary Duty on diligence ” in circumstances of suspicion ; “ for in general though a guest, traveller who resorts to an inn may rest on the protection which the law casts around him, yet, if circumstances of suspicion arise, he must exercise ordinary care ” ; 2 and the intrusion of a stranger twice while he was displaying his goods should have excited sufficient suspicion to induce him to lock the door after him. The following year in Farnworth v. Packwood , 3 Le Blanc, J., states Farnworth v. the law very succinctly : “ A landlord is not bound to furnish a shop Packwood. to every guest who comes into his house ; and if a guest takes exclu- sive possession of a room, which he uses as a warehouse or shop, he discharges the landlord from the common law liability.” In Richmond v. Smith 4 a guest chose to have his goods carried Richmond v. into the travellers’ room in preference to his bedroom, as was Smith. the usual practice of the inn ; yet he was held entitled to recover on a loss, for “ if it had been intended by the defendant not to be responsible unless his guests chose to have their goods placed in their bedrooms or some other place selected by him, he should have said so.” In Dawson v. Chamney 5 another point was raised. The plaintiff Dawson v. gave his horse in charge to defendant’s ostler, who put him in a stall ( ,iamnel J- with another horse which grievously kicked plaintiff’s, who brought his action. Cresswell, J., directed the jury that, if they were of opinion that the defendant, by himself or his servants, had been guilty of direct injury or of negligence, they should find for the plaintiff ; otherwise, for the defendant. This was objected to as a misdirection, but was sustained by the Queen’s Bench, which held that the damage raised a presumption of negligence, calling on the defendant for an answer. So soon, however, as he satisfied the jury that he had not been guilty of negligence, the verdict was rightly entered for him. On general grounds of law, the fact that a horse has kicked another horse is not any evidence of negligence ; 6 and the innkeeper is not an insurer against injury, and “ shall not be charged, unless there be a default in him or his servants, in the well and safe keeping and custody of their guest’s goods and chattels within their common inn ; for the innkeeper is bound in law to keep them safe without stealing or purloining.” 7 1 As where the guest refused to put his valuables in the place suggested by the land- lord : Jones v. Jackson, 29 L. T. (N. S.) 399. 2 4 M. & S., per Lord Ellenborough, C.J., 312. 3 1 Stark (N. P.), 249. 4 8 B.& C. 9. » 5 Q. B. 164. Ante, 798, n 3. 6 Cox v. Burbidge, 13 C. B. N. S. 430. Ante, 84. 7 8 Co. Rep. 33a. Doubts have sometimes arisen as to what goods the innkeeper should answer for. There is an exhaustive judgment as to this in Pinkerton v. Wood- ward, 33 Calif. 557. Morgan v. Itavey. J udgment by Pollock, C.B. Loss of goods by accidental fire. Opinion of Chancellor Kent. 8G0 NEGLIGENCE IN LAW. [book v. Dawson v. Chamney 1 was unfavourably commented on in Morgan v. Itavey. 2 The rule as to the innkeeper’s liability there laid down was that he is a general insurer, for that is what it amounts to, and that “ there is a defect in the innkeeper wherever there is a loss not arising from the plaintiff’s negligence, the act of God or the Queen’s enemies.” 3 “ The only case that points the other way is Dawson v. Chamney ” ; and Pollock, C.B. , referred to a report of that case in 7 Jurist, 1037, where it was said “ there was no evidence of the manner in which the horse received the injury for which the action was brought.” The learned Chief Baron then continues : “ This may be the explanation of that case ; for though damage happening to the horse from what occurred in the stable might be evidence of defectus or neglect, still, if it was not shown how the damage arose, it was not even shown that it arose from what occurred in the stable.” The reporter in a note has, however, disproved this suggestion by pointing out that the judgment was written, and that in the written judgment the injury was stated to have been received “ by the kick of another horse.” The case would thus be a negation of liability on an innkeeper, where he had exercised all caution in stabling a guest’s horse ; and where by the unknown vicious- ness of another guest’s horse an injury was inflicted, the innkeeper was not to be held liable as an insurer. Assuming the innkeeper to be free from blame, the accident would have occurred from inevitable accident, and thus, though not within the terms of Pollock, C.B.’s, proposition in Morgan v. Ravey, at least within the principle of it. This view can only be sustained by regarding the innkeeper as an insurer in certain respects only, and not wholly as a common carrier. If this be the right view, Dawson v. Chamney 4 was the case of inevitable accident arising from the kick of a horse without the negligence of the defendant, and the plaintiff was disentitled to recover, because he did not show a cause of action. The question suggests itself whether at common law the loss of goods of the guest by an accidental fire affects the innkeeper with liability. 5 If the innkeeper is in the same position as a common carrier, which is held law by many authorities, 6 then he is not exonerated from resjjonsibility by reason that the guest’s goods are destroyed by an accidental fire. 7 This is itself a disputed point. Chancellor Kent 8 has, indeed, said that innkeepers “ are held responsible to as strict and severe an extent as common carriers ” ; but he goes on to say that, “ the principle was taken from the Roman law, and adopted into modern jurisprudence.” The Roman law, however, though strict and severe, did not affect the innkeeper with a liability so severe as that of a common carrier ; and in the case of accidental fire the inn- keeper was not liable at all by Roman law, since this was included under 1 5 Q. B. 164. Cp. Merritt v. Glaghorn, 23 Vt. 177, the facts and extracts from the judgment in which are set out, 2 Parsons, Contracts (8th ed.), 146 n-11. In In- gallsbee v. Wood, 33 N. Y. 577, the liability of an innkeeper for the loss of the horse of his guest caused by a fire which burnt down the innkeeper’s stable is said to bo that of an ordinary bailee for hire. See 2 Parsons, Contracts (8th ed.), 153. In Scotland the law appears to be the same, M'Donell v. Eltles , Decisions of the Court of Session 15th Dec. 1809. 2 6 H. & N. 265. 3 L.c., per Pollock, C.B., 277. * 5 Q. B. 164. As to agistment, see ante, 812. 6 As to fire generally, see ante, 486. s Morgan v. Ravey, 6 H. & N. 265 ; there is also a report of the ease at Nisi 1'rius sub nom. Morgan v. Rarey, 2 F. & F. 283. See note to Cutler v. Bounty, 18 Am. R. 130. 7 Per Dallas, C.J., in Thorogood v. Marsh, Cow (N. P. ), 105. s 2 Comm. 592. VARIOUS RELATIONS. 861 CHAP. I.] the head of inevitable accident . 1 Chancellor Kent continues : 2 The re- sponsibility of the innkeeper “ does not extend to trespasses committed upon the person of the guest, nor does it extend to loss occasioned by inevitable casualty, or by superior force, as robbery.” Whence it may be concluded that, in the earlier passage, he did not intend any more extensive meaning. Story , 3 too, says : “ Innkeepers are not responsible Opinion of to the same extent as common carriers. The loss of the goods of a Story, guest while at an inn will be presumptive evidence of negligence on the part of an innkeeper or of his domestics. But he may, if he can, repel this presumption by showing that there has been no negligence whatsoever, or that the loss is attributable to the proper negligence of the guest himself ; or that it has been occasioned by inevitable casualty or by superior force.” He thus refers to the dictum of Bayley, J., in Richmond v. Smith : 4 “ The case, however, did not call for the dictum, Richmond v. and it has since been overturned by a solemn decision, if it meant to Smith. suggest so unqualified a proposition as that the liability of innkeepers and common carriers is of the same extent and subject only to the like exceptions.” 5 Some of Story’s late editors have shown more respect for the dictum than for their author’s text, which they have altered to conform to it . 6 Chitty, says : 7 There must be a default on the part of the innkeeper ; Various and such default is to be imputed to him wherever there is a loss not °l nmons - arising from the plaintiff’s negligence , 8 the act of God, or the Queen’s Chltty - enemies.” Redfield holds 9 that the innkeeper “ is presumptively responsible for Redfield. all injuries happening to the goods of his guests and by them entrusted to his care ; and that he cannot exonerate himself except by showing that he did all to insure their safety which it was in his power to do, and that no default is attributable to his servants or guests. This brings the rule of law on this subject so near to that which obtains in the case of common carriers that the distinction is not of much moment i Story, Bailm. § 465; Ersk. Inst. bk. 3, tit. 1, § 28; Stair, Inst. bk. i. tit. 13, § 3, and note in Brodie’s edition. Quia in locato conduclo culpa, in deposito dolus dunlaxat preestalur; at hoc edicto omnimodo qui recepit tenelur, etiamsi sine culpa ejus res periit, vel damnum datum cst ; nisi si quid damno fatali contingit. Inde Labco scribit, si quid naufragio aut per vim piratarum perierit, non esse iniquum, exceptionem ei dari. Idem erit dicendum et si in stabulo, aut in caupona vis major conligerit : D. 4, 9, 3, § 1. Post, 879, 881. 2 2 Comm. 593. 3 Bailm. § 472 ; also Story, Contracts (2nd ed. 1847), § 749 : “ Whenever there is a loss by a guest at an inn, the innkeeper is primd facie responsible. He may, however, excuse himself,” &c. 4 8 B. & C. 11 : “It appears to me that the innkeeper’s liability very closely resembles that of a carrier. He is prima facie liable for any loss not occasioned by the act of God or the King’s enemies ; although he may be exonerated where the guest chooses to have his goods under his own care.” This dictum has been adopted by Nelson, C.J., in Piper v. Manny, 21 Wend. (N. Y.) 284. Purvis v. Coleman, 21 N. Y, 111, 116. 5 Dawson v. Chamney, 5 Q. B. 164. 6 See Story, Bailm. (8th ed.) by Bennett, § 472. 7 Contracts (12th ed.), 441. In the following edition the word “ defect ” is sub- stituted for Chitty’s and Sir Edward Coke’s word “ default ” as they translate the pro defeclu of the common law writ, but without any change in the sense. 8 Schultz v. Wall, 134 Pa. St. 262, 19 Am. St. R. 686, excepts from the innkeeper’s liability goods stolen in his house “ by the servant or companion of the guest.” In Cross v. Andrews, Cro. Eliz. 622, the innkeeper sought to excuse himself by a plea of insanity ; but this was held no defence, “ for the defendant, if he will keep an inn, ought at his peril to keep safely his guest’s goods ; and although he is sick, his servants then ought carefully to look to them.” Ante, 45. o Carriers, §§ 595 with the note, 596, where the whole subject is reviewed by the author, the judge who decided J/’ Daniels v. Robinson, 26 Vt. 316, 62 Am. Dec. 586, where there is a note on “ guests ” and “ boarders.” See Magee v. Pacific Improvement Co., 35 Am. St. R. 199. 802 NEGLIGENCE IN LAW. BOOK V. Bennett, J. Innkeeper re- sponsible pro defectu. Law in America unsettled. unless in cases of loss by accidental or incendiary fires, and possibly in some few other cases. Hence it is now becoming to some extent common for the Courts to state the degree of responsibility of these two classes of persons in the same or similar terms, and thus to declare that innkeepers are responsible for the safety of the property of their guests except for damage resulting from inevitable accident or irresistible force, being that of the public enemy.” 1 On the other hand, the conclusion of Bennett, J., at the end of a long judgment in Mateer v. Brown? reviewing and commenting on all the cases, is “ that some Courts as well as commentators are, at length, returning to the sound and healthy principle of the common law, which places the liability of innkeepers and carriers on the same ground.” This judgment narrows the controversy to a single point. The common law is contained in the writ in the “ Registrum Brevium ” 3 and Coke’s “ Commentary.” 4 The writ says the innkeeper shall be responsible 'pro defectu ; which Sir Edward Coke translates by default. Bennett, J., contends that the “ uncertainty and confusion which have been thrown over this branch of the law have arisen from confounding the word defectu in the Writ, and the word default, used by Lord Coke as its translation, with the term negligence, an error into which Judge Story himself seems to have fallen.” 5 But if error arises from confounding default and negligence, error would seem no less to arise from confounding “ default ” with “ without default.” In any event the law in America seems unsettled, though the tendency seems to be to accept the distinction between the liability of an inn- keeper and a common carrier ; 6 while in England the rule of the common law, whatever it may be, is narrowed by reason of Id Geo. III. c. 78, s. 86, which provides that “ no action, suit, or process whatever shall be had, maintained, or prosecuted against any person in whose house, chamber, stable, barn, or other building, or on whose estate any fire shall accidentally begin, nor shall any recompense be made by such person for any damage suffered thereby ; any law, usage, or custom to the contrary notwithstanding.” Really the difference arises because the relations compared differ essentially. The carrier usually has an entire control of the goods delivered to him. So soon as they come to his hands they pass not only from use but from the sight of the owner. The carrier’s control is absolute ; negligence conducing to their loss on the part of the owner is next door to impossible. But with goods in an inn the owner has the use of them ; interferes continually and thus modifies the responsibility 1 See Holder v. Soulby, 8 C. B. N. S. 254. In Hulett v. Swift, 33 N. Y. 571, it is said : “ It is true that the liability of the innkeeper, by the custom of the realm, was not unlimited and absolute, and that the loss of the goods of the guest was merely presumptive evidence of the default of the landlord. But this presumption could only be repelled by proof that the loss was attributable to the negligence or fraud of the guest, or to the act of God or the public enemy.” This, however, is denied to bo law in Cutler v. Bouncy, 18 Am. II. 127 ; and Merritt v. Cleghorn, 23 Vt. 177, is followed, where “Judge Redfield, delivering the opinion of the Court, reached the conclusion that where there was no negligence there was no responsibility for loss by fire.” Cp. Mason v. Thompson, 20 Mass. 280. 2 1 Calif. 221. The judgment of Bennett, J., is set out in a note to Story, Bail- ments (8th ed.), § 472 ; Shaw v. Berry, 31 Me. 478 ; Hulelt v. Swift, 42 Barb. (N. Y.) 230, 33 N. Y. 571 ; Sibley v. Aldrich, 33 N. H. 553. 3 105 a. Dc iransyrcssionc. Fitzh. Do Nat. Brcv. 94 B, where the words are “ by the default.” 4 Calyc’s case, 8 Co. Rep. 32 a. 6 Story, Bailm. § 470. g Cutler v. Bouncy, 18 Am. R. 127. There is a very a in pie note (o the report of this decision embracing a review of the principal authorities on both sides, with, CIIAP. I.] VARIOUS RELATIONS. 8(53 of the innkeeper. If an analogy is to be found for the innkeeper’s position it is rather that of a railway company’s responsibility for a passenger’s luggage which he takes with him into a railway carriage . 1 Returning to the discussion of the cases, the next to note is Armi- Ar mislead v. stead v. Wilde , 2 where the plaintiff was held disentitled to recover, by WMe. reason of his own negligence. Plaintiff’s servant, after displaying a large sum of money in the public room of the inn, put it in an ill-secured box, and left the box in the public room for the night. In the morning the money was gone. There was strong ground to suspect that one of those to whom the notes had been displayed was the thief. At the trial the judge directed the jury to find for the plaintiff, unless they thought the traveller “ had been guilty of gross negligence in leaving the money in the travellers’ room.” The jury found for the defendant. A rule was granted on objections to the judge’s direction, under the impression that it was “ that the jury were to consider whether a prudent man would of his own accord have taken the parcel to the in- keeper and left it with him, or have taken it to his own room and locked it up.” 3 On the argument, the other facts appearing, and it being made evident that the judge’s direction was to be applied only to the facts of the case, the rule w r as discharged, on the ground that each case must depend on its own circumstances, and that, though the innkeeper is primd facie liable, his liability may be rebutted by proof of negligence on the part of the guest leading to the loss. The jury having found the negligence, and, in the opinion of the Court, on ample evidence, the verdict w r as sustained. Lord Campbell, C.J., doubted whether to require gross negligence Gross of the guest in order to discharge the innkeeper was not a direction too negligence, favourable to the plaintiff, and guarded the decision of the Court against laying down “ that negligence on the part of the guest conducing to the loss will not exonerate the landlord unless it amount to crassa negli- gentia .” 4 This very point came before the Court in Cashill v. Wright, 5 Ca shill v. when Erie, J., said : 6 “ We think that the rule of law resulting from iVrt A u - all the authorities is that, in a case like the present [i.e., where a gold watch and money were stolen from the plaintiff’s bedroom in defend- ^] e e j y ant’s inn] the goods remain under the charge of the innkeeper and the protection of the inn, so as to make the innkeeper liable as for breach of duty , unless the negligence of the guest occasions the loss in such a way as that the loss would not have happened if the guest had used the ordinary care that a prudent man may be reasonably expected to have taken under the circumstances . ’ ’ Willes, J., in Oppenheim v. White Lion Hotel Co ., 7 considered this Oppenheim v. to lay down “ the proper definition of negligence, in terms which are not to be mistaken.” He also explains a misunderstood passage in the report of Calye's case : 8 “ It is no excuse for the innkeeper to he delivered the guest the key of the chamber in which he i: and that he left the chamber door open ; but he ought to however, a bias to the view opposed to the decision. Street, Foundations of Lega^ Liability, vol. ii. 295-297. Cooley, Torts (2nd ed. ), 758. i Talley v. G. W. By. Co., L. R. 6 C. P. 44. Post, 1000- 2 (1851) 17 Q. B. 201. 3 Per Patteson, J., 17 Q. B. 265. 4 Lx. 200. 5 (1856) 6 E. & B. 891 ; ep. Fowler v. Dorlon, 24 Barb. (N. Y.) 384, holding that loss of the goods of a guest at an inn is primd facie evidence of negligence on the part of the innkeeper. c Lx. 900. 7 (1871) L. R. 6 C. P. 521. The report in the Law Reports of the passage referred to in the text is very obscure. The Law Journal Report, 40 L. J. C. P. 231, is, how- ever, quite clear. 8 Co. 8 Rep. 33 a. Willes, J.’s, explanation. Reasonable caro of the guest a cpies- tion of fact. Negligence of the guest in entrusting luggage to any particular servant of the innkeeper. Elcox v. Hill. Money or jewellery left with a waiter. 8G4 NEGLIGENCE IN LAW. [book v. goods and chattels of his guest there in safety.” This has often been referred to as an authority for the proposition that where the inn- keeper has given his guest a key, he has thereby relieved himself of his common law liability. Willes, J., points out 1 that this is not so ; since it is by no means laid down that proof of mere neglect to use the key is, in law, conclusive to discharge the innkeeper ; and that, in the succeeding passage to that quoted, the report intimates that the guest may by his conduct release the innkeeper from his common law obliga- tion : “ He [Sir Edward Coke] evidently means that the fact of the guest having the means of securing his door and neglecting to avail himself of them affords the innkeeper no excuse, by way of plea, as matter of law. The giving the guest a key, or giving a warning to lock his door, would certainly be a circumstance which might be urged in the innkeeper’s favour. By omitting to lock his door, a jury might well think that the guest chose to take the risk of robbery upon him- self, and that he ought to have taken more care.” 2 There is no question of law in this, but one of fact only, and that is whether the guest has, or has not, exercised reasonable care in each case. This is for the jury if, in the opinion of the Court, there is any evidence that can be left to them ; 3 and they should be instructed to bear in mind that the innkeeper is not invested with the character of an absolute and unqualified insurer, and that failure on the guest’s part to use reasonable care is enough to discharge him from liability. 4 The point whether the guest is negligent in entrusting his luggage to the particular servant of the innkeeper through whom the loss happens does not appear ever to have been taken in an English case ; probably because the servants in an English inn, till quite recently, were not so numerous as to accentuate the division of responsibility, as it is accen- tuated in the huge American hotels. There are, however, some valuable remarks on this point in the charge to the jury in the case of Elcox v. Hill, 5 which were affirmed by the Supreme Court of the United States. “ Travellers must be presumed to know the relative duties of the different classes of employes about an hotel, that is to say, they have no right to intrust their baggage to the care of the table-waiter or to the ostler, from the fact that it is not the duty of such employes to look after or care for the baggage, or take the custody of it.” “ Probably if a guest at an hotel should deposit his money or jewellery with a table- waiter, or cook, or bell-boy without direction to do so from the landlord or clerk in charge, or leave his satchel containing money and valuables unprotected in the halls or public passages, or leave his money exposed in his room and his room unlocked, no one would hesitate to say that such an act was an act of negligence, to such an extent as to excuse the landlord in case of loss.” 6 1 L. R. 6 C. P. 520. 2 Sec Mitchell v. Woods, 16 L. T. (N. S.) 070, where Kelly, C.B., ruled that it is not negligence for a guest at an hotel to omit to lock his door. Cp. Sunders v. Spencer, Dyer, 200 b. 3 Herbert v. Markwell, 45 L. T. 040. 4 Spice v. Bacon, 30 L. T. (N. 8.) 890. In Purvis v. Coleman, 21 ty. Y. 117, it is said to be “ the well-settled law of this State that if the plaintiff’s negligence has caused or contributed to the loss or injury, an action against the carrier cannot be maintained.” If it is shown that the plaintiff was intoxicated and this contributed to the loss, the plaintiff cannot recover : Walsh v. Porterfield, 87 Pa. St. 376, and undoubtedly this would be the direction to the jury in England, yet authority on the other side is not wanting. Rubenstein v. Cruikshanlcs, 54 Mich. 109 ; Cunningham v. Bucky, 42 W. Va. 071. Ante, 140. 3 08 U. 8. (8 Otto) 222. o In this case evidence was tendered that the servant who received the luggage had confessed to having stolen it, but it was held inadmissible, on the ground that though CHAP. I.] VARIOUS RELATIONS 8G5 Responsi- bility for luggage given in custody of the servants of the hotel-keeper. Is the negli- gent person a servant '! Coskery v. Nagle. When the guest’s luggage is placed in the custody of the hotel- keeper’s servants, the responsibility for the safe custody of it rests upon him. If the luggage is lost, to escape liability the hotel-keeper must show two things : (1) That the owner was guilty of negligence. (2) That this negligence conduced to the loss. If he fails in either, the owner is entitled to recover. 1 There still remains the possibility, at any rate, of dispute whether the negligent person is the servant of the innkeeper. Two cases illustrate this — the English case of Bather v. Day, 2 and the American case of Coskery v. Nagle, 2 decided mainly on the authority of the English one. In Bather v. Day 2 the innkeeper sought immunity by showing a Bather v. Day. private arrangement with the ostler, by which the stables and the profits arising from them were handed over to him to make what profit he could. But, though the acts on which the action was based were the misfeasance of the ostler, the innkeeper was held liable, and on broad and manifest considerations of public policy. 4 The American case raises a point of even more general interest ; for it was there decided that when a traveller arrives at a station, and is met by the porter of an hotel who indicates to the traveller a certain vehicle by which he will be taken to the hotel, and the traveller delivers to the porter his baggage or the check for getting the same from the railway authorities, the traveller is so far constituted a guest as to render the proprietor liable for the safe keeping or re-delivery of the baggage. The liability of the proprietor, it was said, commences from the time of the delivery of the baggage or check to the porter and no private arrangement between a landlord and carrier for the trans- portation of persons can make any difference. The decision is convenient and not unlikely to be followed ; still it is doubtful whether it is in its full extent the natural development of sound principle. Where the arriving traveller has previously secured rooms, no other conclusion seems called for. The contract of host and guest has before been constituted, and the baggage is delivered to the host’s servant under an operating contract. Where, however, the journey to the hotel is a speculative one on the part of the traveller as to whether rooms are available or not, no contract with the inn- keeper is made till the fact of the landlord having appropriate accommodation is ascertained. No common law duty arises if the innkeeper has in fact no accommodation. The liability, it may be sug- gested, is referable to the fact that the innkeeper professes, through his porter, to carry between his inn and the station in such a manner as to constitute himself a common carrier. Though the general position Coskery v. Nagle con- sidered. on the trial of the servant it was admissible against himself, yet against the landlord it was mere hearsay ; and that the failure of the landlord to prosecute did not render the statement any more evidence, since there was no greater duty on him to do so than on any other citizen. 1 Medawar v. Grand Hotel Co., [1891] 2 Q. B. per Lord Esher, M.R., 21. In Joslyn v. King, 20 Am. St. R. 656, a letter-carrier recovered against the clerk of an hotel the value of a registered letter directed to a guest at the hotel, and lost through the negligence of the clerk to whom the letter-carrier had delivered it, and the value of which the letter-carrier was compelled by the department to pay. What duty — a legal one — there was by the clerk to the letter-carrier is not obvious and is not made so by the report. Was the clerk the letter-carrier’s gratuitous bailee ? Even if he were, the negligence does not appear to have been gross. Ante, 712. 2 32 L. J. Ex. 171. 3 20 Am. St. R. 333. 4 Ante, 858 n 3, 861. 8G( NEGLIGENCE IN LAW. [hook V. Angus v. M' Lachlan. is clearly unsustainable, that a mere commendation by the servant of tie; innkeeper, acting within the scope of his authority, of a par- ticular line of vehicles plying between his master’s inn and some other terminus will fix the master with liability for loss during the transit, yet where the conveyance is the innkeeper’s and he makes a profession of carrying between a railway station or landing-place and his inn, he is probably liable, as common carrier, to those who, or whose goods, are conveyed by him. If the conveyance is not the innkeeper’s and the contractor undertakes a more general conveyance of passengers, the liability of the innkeeper for the act of his porter would seem in prin- ciple limited to his negligent act, and not to be an absolute liability ; on the ground that the services of the porter, though rendered with a view to the constitution of the relation of innkeeper and guest, are yet rendered independently of and antecedently to the constitution of any such relation. The case differs from that of the conductor of an omni- bus assisting a passenger to enter. There the act of the conductor is in performance of the duty for which he is engaged, and is an acceptance of the passenger and a representation that there is accommodation in his vehicle. But the porter has no authority to constitute the relation of host and guest ; he is no more than an advertising medium, and the relation is subsequently made when the traveller’s requirements are made known at the inn to the person in charge. A remark of Kay, J., in Angus v. M’ Lachlan, 1 has been noticed 2 as “ inaccurate,” as reported, “ in attributing to the learned judge a view which is ciearly inconsistent with the authorities.” The passage referred to is as follows : “ The general law was that a bailee, such as an innkeeper, was not bound to be more careful in keeping the goods of his guests than he was as to his own.” A perusal of the case will show that the defendant claimed a lien and detained goods, which he locked up with his own, after the plaintiffs had left the hotel. They subsequently were found to be damaged by moths and mice. The possession of the innkeeper was not a possession of a guest’s goods during the existence of the relation of host and guest, but was by way of lien for his unpaid bill, after the relation of host and guest had terminated. Reference therefore is to be had to principles governing in the case of an innkeeper’s lien, which are as well recognised as the different principles governing in the relation of host and guest. The only point Kay, J., had to decide was the duty of an innkee'per or any other ordinary bailee entitled to lien when holding goods in exercise of lien. And his decision as to this, that the only diligence the inn- keeper in such circumstances is bound to use is the diligence that an average prudent business man would use with his own goods, 3 seems sound in principle, and not open to any just exception. The liabilities of innkeepers have been diminished by an Act passed in 1863, “ respecting the liability of innkeepers, and to prevent frauds on them.” 4 By section 1 of this Act, no innkeeper shall be liable to make good any loss or injury to goods or property brought to his inn, not being limited to £30. a horse or other live animal, or any gear appertaining thereto, or any carriage, to a greater amount than £30, except : 1 23 Ch. D. 336. 2 1 Sm. L. C. (9th ed.), 141. In the llthed. the fact that the learned judge was considering the point of lien is noticed, vol. i. 127. 3 See ante, 792. 4 The Innkeepers’ Liability Act, 1863 (26 & 27 \ ict. c. 41). The Inn- keepers’ Lia- bility Act, 1863 (26 & 27 Viet. c. 41). Liability VARIOUS RELATIONS. CHAP. I.] 867 (1) Whore such goods or property shall have been stolen, lost, or injured through the wilful 1 act, default, or neglect of such innkeeper, or any servant in his employ. (2) Where such goods or property shall have been deposited ex- pressly for safe custody with such innkeeper; provided that in the case of such deposit they may require as a condition of their liability that the goods or property shall be deposited in a box or other receptacle fastened and sealed by the person depositing the same. 2 By section 2 innkeepers are not to have the benefit of the Act in respect of property which they refuse to have for safe custody, or which by their default the guest is unable to deposit with them. By section 3 every innkeeper is required to cause at least one copy of section 1 of the Act, printed in plain type, to be exhibited in a con- spicuous part of the hall or entrance to his inn, and shall be entitled to the benefit of the Act only in respect of goods or property brought to the inn while the copy is so exhibited. 3 By the Innkeepers Act, 1878, 4 an innkeeper may sell by public auction goods left with him after six weeks, after giving at least one month’s notice of his intention in the way specified in the Act. An innkeeper is not bound to provide for his guest the precise rooms he wants. The law requires of him no more than to find for his guests reasonable and proper accommodation, 5 and that no longer than he is clothed with his character of traveller ; for “ the object of the law ” “is merely to secure that travellers shall not, while upon their journeys, be deprived of necessary food and lodging.” 6 Accordingly, in Lnniond v. Richard , 7 the Court held that where by a ten months’ residence at an hotel the guest had lost the character of a traveller, the innkeeper was entitled to give reasonable notice and to vacate the rooms appropriated. “ The custom of England does not extend to persons who are in an inn as lodgers or boarders, and the length of time that a guest has stayed is a material ingredient in determining such a question.” A doubt has been raised whether a guest can maintain proceedings against an innkeeper for refusing to receive him as a guest without a tender of the amount to which the innkeeper would be reasonably entitled for the entertainment furnished to his guest. In Pinchon’s case 8 the resolution of the judges was : “ A victualler or innkeeper is not compellable to deliver victuals till he be paid for them in hand.” Act not to apply where innkeeper refuses to keep property in safe custody. Notice to be exhibited. The Inn- keepers Act, 1878 (41 & 42 Viet, c. 38). Duty of inn- keeper is no more than to find reasonable and proper accommo- dation. Prepayment may be insisted on. 1 “ Wilful ” applies to “ act ” only : Squire, v. Wheeler, 16 L. T. (N. S.) 93. 2 To make an innkeeper liable beyond £30 he must be informed in a reasonable and intelligible manner at the time of the deposit of a parcel of valuables with him by a guest that the deposit is for safe custody : O'Connor v. Grand International Hotel Co., [1898] 2 I. R. 92. 3 Spice v. Bacon, 2 Ex. D. 463, 36 L. T. (N. S.) 896. On the point for which this case was previously cited it is only reported in the Law Times. Hodgson v. Ford, 8 Times L. R. 722 (0. A.); Huntly v. Bedford Hotel Co., 7 Times L. R. 641 (C. A.); Carey v. Long's Hotel Co., 7 Times L. R. 213 (C. A.). In Pennsylvania, under the local Act there, it has been decided that if actual knowledge of the place to deposit valuables has been brought home to the guest, it is immaterial whether the provisions of the Act as to the posting of notices in certain places have been complied with. Where constructive notice is relied on, the terms of the Act must be strictly complied with : Schultz v. Wall, 134 Pa. St. 262, 19 Am. St. R. 686. 4 41 & 42 Viet. c. 38. 5 Fell v. Knight, 8 M. & W. 269. Browne v. Brandt, [1902] 1 K. B. 696. o The Queen v. Rymer, 2 Q. B. D., per Denman, J., 140. 7 [1897] 1 Q. B. 541. 8 9 Co. Rep. 87. The guest’s rights in his room are discussed Dean x.Hogg and Lewis, Fell v. Knight. Pick ford v. Grand J unction Ry. Co. Innkeeper lien. Servant. robbed. 868 NEGLIGENCE IN LAW. [book v. In Fell v. Knight Lord Abinger, C.B., expressed the view 1 that it is not sufficient for a plaintiff to allege readiness to pay; he should further state that lie was willing and offered to pay ; and gave the judgment of the Exchequer holding a declaration bad for want of an allegation of tender. In so far, however, as this dictum is inconsistent with the subsequent considered judgment of the same Court (delivered by Parke, B., who was absent on the former occasion), in Pickford v. Grand Junction Ry. Co., 2 it is probably not law. The test suggested was that, whenever a duty is cast on a party, in consequence of a contemporaneous act of payment, to be done by another, it is sufficient if the one pay, or be ready to pay, the money when the other is ready to undertake the duty. Pickford’ s was a carrier’s case. The gist o" the decision is : “ The money is nob required to be paid down by the plaintiffs until the carrier receives the goods, which he is bound to carry.” We have already incidentally seen 3 that an innkeeper is entitled to a lien for his charges. 4 This lien attaches to the goods brought to the inn by the guest, though not to the person of his guest, nor to the apparel he is actually wearing ; 5 and avails against any goods the guest has with him, even though they are not his own. 6 The reason of this is that the innkeeper has to re- ceive the guest and his goods without inquiries into his title to them. 7 Consequently the innkeeper’s lien attaches to the goods immediately on their coming into his inn to the extent of the innkeeper’s lawful charges against his guests. 8 Thus, if the goods are stolen by the guest and brought to the inn, the lien attaches, unless bad faith is shown in the innkeeper, 9 or knowledge that the goods are not the guest’s goods and sent to the inn for a specific purpose. 10 Much more then does the lien attach to all the luggage that is brought to an hotel, where husband and wife stay, and credit is given to the husband while the luggage they have with them is mainly the wife’s separate estate. 11 If a servant or agent is robbed of his master’s money or goods the master may maintain the action against the innkeeper in whose house the loss is sustained. In Bedle v. Morris 12 it was moved in arrest of judgment “ that the action did not lie for the master on the robbery of the servant. But non allocatur ; for none can have satisfaction but he who has the loss, and the loss is to the master.” “ Moreover, it is not material whether he was his servant or not ; for if. he was his friend by whom the party sent the money and he is robbed in the inn, the true owner shall have the action. Per totam Curiam. And judgment given accordingly.” 13 1 8 M. & W. 269. On the other hand, Rex v. Ivans, 7 C. & P. 213, per Coleridge, J. 2 8 M. & W. 372, 378. 3 Angus v. M’ Lachlan, 23 Ch. D. 330. 4 As to lien, see Kruger v. Wilcox, Amb. 252, Tudor, L. C. Mercantile Law (3rd ed.), 353 cum notis ; Chase v. Westmore, 5 M. & S. 180, Tudor, L. C. Mercantile Law (3rd ed. ), 356 cum notis. 5 Sunholf v. Alford, 3 M. & W. 248. See Newton v. Trigg, 1 Show. (Iv. B.), (Case 166) 268 ; ante, 851 n. g. g Turrill v. Crawley, 13 Q. B. 197 ; Snead v. Watkins, 1 C. B. N. S. 267 : Thrcfall v. Borwick, L. R. 7 Q. B. 71 1 ; L. R. 10 Q. B. 210 ; Mulliner v. Florence, 3 Q. B. D. 484 ; Bacon, Abr. Inns and Innkeepers (D). 7 Snead v. Watkins, 1 C. B. N. S. 267. 8 Smith v. Dearlove, 6 C. B. 132. 9 Johnson v. Hill, 3 Stark. (N. P.), 172. io Broadwood v. Granara, 10 Ex. 417, limiting the lien to “ goods brought by a guest to an inn.” n Gordon v. Silber, 25 Q. B. D. 491. , 12 Yelv. 162, S. C. sub nom. Beedle v. Morris, Cro. Jac. 224. r is See Bac. Abr. Inns and Innkeepers (C), 5. Berkshire Woollen Co. v. Proctor 61 Mass. 417. Ante, 748. CHAPTER II. COMMON CARRIERS. General Considerations. We have already noted the definition of a common carrier in dis- Definitions, criminating a common carrier from a private carrier for hire . 1 The differentia indicated by Alderson, B., in Ingate v. Christie 2 — of carrying for all persons indifferently and not a particular person — is that most generally accepted. Thus Story says : 3 “A common carrier has been defined to be story, one who undertakes for hire or reward to transport the goods of such Bailments, as choose to employ him from place to place ” ; 4 * and Redfield : 5 Rodfield, “ To constitute one a common carrier he must make that a regular and Carriers, constant business, or at all events he must, for the time, hold himself ready to carry for all persons indifferently who choose to employ him.” In Dwight v. Brewster , 6 Parker, C.J., defines a common carrier as Parker, C.J., “ one who undertakes, for hire or reward, to transport the goods of such in Dwight v. as choose to employ him, from place to place. This may be carried Brewster - on at the same time with other business.” In Fish v. Chapman 7 Nisbit, J., said : “ To constitute a man Fishy. a common carrier, the business of carrying must be habitual and Chapman. not casual. The undertaking must be general and for all people in- differently. He must assume to be the servant of the public ; he must undertake for all people.” Ware, J.’s , 8 description is to the same effect, though he states his Ware, J., meaning more fully ; thus : “A common carrier is one who makes it a in TJie Huntress. i Ante, 845. 23 c. &K. 61. 3 Bailm. § 495. 4 See the full judgment of Story, J., in Citizens' Bank v. Nantucket Steamboat Co., 2 Story, Rep. (U. S.) 16, the learned judge says, at 35: “ It is not necessary that the compensation should be a fixed sum, or known as freight ; for it will be sufficient if a hire or recompense is to be paid for the service, in the nature of a quantum meruit, to or for the benefit of the ” carrier. . s Carriers, § 19, citing Gisbourn v. Hurst, 1 Salk. 249 (the definition in which ease is said by Gibson, C.J., in Gordon v. Hutchinson, 1 W. & S. (Pa.) 286, to be the “ best definition of a common carrier ” ; it is, “ any man undertaking for hire to carry the goods of all persons indifferently.” This definition is approved in Allen v. Sack- rider, 37 N. Y. 341 ; cp. Gilbart v. Dale, 5 A. & E. 543, where defendant was held to be not a carrier but keeper of a booking-office. e 18 Mass. 53. 7 2 Kelly (Ga.) 349, cited in judgment of Brett, J., in Nugent v. Smith, 1 C. P. D. 27. Nisbit, J.’s, judgment is set out in Story, Bailm. (8th ed.) § 495, note 3. s The Huntress, Daveis (U. S. Adm.) 86. 870 NEGLIGENCE IN LAW. [book V. Bell, in Prin- ciples of the Law of Scotland. No obligation to equality of treatment at common law. How common carrier differs from (i) a forwarding merchant ; (ii) ware- housemen. Who are common carriers. business to transport goods either by land or water, for Lire, and holds himself ready to carry them for all persons who apply and pay the hire. Undertaking, as lie does, to carry goods for all persons, he is considered as engaged in a public employment and as engaging before- hand to carry goods for a reasonable remuneration for any person who may apply to him and pay the hire, and he will be liable to an action for refusing, unless he has a reasonable cause for his refusal.” Bell’s 1 2 definition is : “ One who, for hire, undertakes the carriage of goods for any of the public indiscriminately from and to a certain place.” Lastly, Brett, J., in Nugent v. Smith, 2, says : “ The real test of whether a man is a common carrier, whether by land or water, therefore really is, whether he has held out that he will, so long as he has room, carry for hire the goods of every person who will bring goods to him to be carried. The test is not whether he is carrying on a public employ- ment, or whether he carries to a fixed place ; 3 but whether he holds out, either expressly or by a course of conduct, that he will carry for hire, so long as lie has room, the goods of all persons indifferently who send him goods to be carried. If he does this, his first responsibility naturally is, that he is bound, by a promise implied by law, to receive and carry for a reasonable price the goods sent to him upon such an invitation.” At common law a common carrier of goods is under no obligation to treat all customers equally. His obligation is to accept and carry all goods delivered to him for carriage according to his profession on being paid a reasonable compensation for so doing. If he refuses to carry the goods, failing some reasonable excuse, an action lies against him. There is nothing in the common law to hinder a carrier from carrying for favoured customers at any unreasonably low rate, or even gratis ; the only limitation is that he must not charge more than is reasonable . 4 With railway companies, by statute 5 the law is otherwise. A common carrier differs from a forwarding merchant who has no concern in the vehicle by which goods are sent, nor in the freight, and engages merely to cause goods to be forwarded to their destination for reward ; 6 and he differs from a warehouseman in that the warehouse- man engages for custody, not for transport . 7 Waggoners and team- sters ; 8 coach-masters or proprietors of stage coaches (when they usually carry for all persons indifferently) ; 9 railway companies, for goods 1 Principles of the Law of Scotland, § 1G0. In Guthrie’s edition (9th ed.), 110, after the words “ goods ” the words “ generally, or of certain classes of goods,” are added. 2 1 C. P. D. 27. On this point the judgment is unaffected by the judgment of Cockburn, C.J., in the Court of Appeal, 1 0. P. D. 423. 3 Cp. Brind v. Dale, 8 C. & P. 207, with Story’s comment, Bailm. § 400, note 3 ; also the judgment in Robertson v. Kennedy, 2 Dana (Ky. ) 430 : “ According to the most approved definition, a common carrier is one who undertakes, for hire or reward, to transport the goods of all such as choose to employ him from place to place. Dray- men, eartmen, and porters who undertake to carry goods for hire as a common employ- ment from one part of the town to another, come within the definition ; so also does the driver of a slide with an ox-team. The mode of transporting is immaterial.” 4 O. W. Ry. Co. v. Sutton, L. R. 4 H. L. 22G. s The Railways Clauses Consolidation Act, 1845 (8 & 9 Viet. c. 20), s. 00. 6 Angell, Carriers (5th ed. ), § 75. Cp. Cilbart v. Dale, 5 A. & E. 543. A nte, 844. 7 Story, Bailm. §§ 444-454. Ante, 827. s 2 Kent, Comm. 598, 599 ; Oisbourn v. ILurst, 1 Salk. 249 ; Hyde v. Trent and Mersey Navigation Co., 5 T. R. 38!). o Dwight v. Brewster, 18 Mass. 50 ; Middleton v. Fowler, 1 Salk. 282; Story, Bailm. § 500. chap, ii.] COMMON CARRIERS. 871 which they profess to carry or actually carry ; 1 carmen and porters who undertake to carry goods for hire as a common employment, from one part of a town or city to another ; 2 lightermen, hoymen, 3 barge-owners, ferrymen, 4 canal boatmen, and the owners and masters 5 of ships and steamboats engaged in the transportation of goods for persons generally for hire — all these to the extent that they profess or are compelled to carry, are included under the designation of common carriers. 6 By the Roman law carriers were held to the most exact diligence, because they might reject or receive the goods tendered to them for carriage at their option. 7 If they received goods they were liable, whether they received in person or by the master of the vessel, or the supercargo, or other person whatsoever to whom the things were given in charge, provided that they were authorised to receive goods in the way of business. 8 By the same law, however, the carriers’ ( vectores or viatores ) liability stopped short of inevitable damage ( damnum fatale). 9 1 Palmer v. Grand Junction Ry. Co., 4 M. & W. 749 ; Crouch v. L. & N. W. Ry. Co., 14 C. B. 255 ; Thomas v. Boston and Providence Rd. Corporation, 51 Mass. 472. 2 Story, Bailm. § 496. 3 Rich v. Kneeland, Cro. Jac. 330 ; Dale v. Hall, 1 Wils. (C. P.) 281. 4 Willoughby v. Horridge, 12 C. B. 742. 3 Morse v. Slue, 2 Lev. 69, where it was admitted that the action lay equally against the masters and owners of vessels. This was afterwards decided by Lord Hardwicke, in Boucher v. Lawson, Cas. temp. Hardw. 85, 194. This doctrine has been since recognised in Goff v. Clinkard, cited 1 Wils. (C. P.) 282, and applies equally to the carrier of goods in the coasting trade, Dale v. Hall, 1 Wils. (C. P.) 281, and to a bargeman and hoyman upon a navigable river. Rich v. Kneeland, Cro. Jac. 330. In Varble v. Bigley, 29 Am. R. 435, it was said, differing from the Louisiana Courts, Bussey v. Mississippi Valley Transport Co., 24 La. An. 165, that the owner of a tow- boat is not a common carrier. See the judgment for an examination of the principles to be applied to the determination of this question. In Transportation Line v. Hope, 95 U. S. (5 Otto) 297, the towing a barge in conjunction with thirty or forty others was held not to constitute the towing company a common carrier, since there was not that exclusive control of the barge which that relation would imply. Yet such a company was to exercise a careful and skilful judgment in furnishing the motive power, in selecting a proper position for the barge, in causing her to be lashed suitably, and in the general regulation of her movements. s Angell, Carriers (5th ed.), §§ 67-90. In Coup v. Wabash, Ac. Ry. Co., 56 Am. R. 374, a railway company contracting to transport a menagerie in cars owned and controlled by the owner of the menagerie, was held not liable as a common carrier ; and this on the ground that “ the duty to receive cars of other persons, when existing, is usually fixed by the railroad laws, and not by the common law. But it is not in- cumbent on companies, in their duty as common carriers, to move such cars except in their own routine. They are not obliged to accept and to run them at all times and seasons, and not in the ordinary course of business.” An “ express company ” is defined in Pacific Express Co. v. Seibert, 142 U. S. (35 Davis) 339. Evidence that at the door of a booking-office there is a board on which is painted “ conveyances to all parts of the world,” and a list of names of places, is not sufficient proof that the owner is a common carrier : Upston v. Slark, 2 C. & P. 598. 7 Est in ipsorum arbitrio, ne quem recipiant : D. 4, 9, 1, § 1. Ante, 856. 3 D. 4, 9, 1, §§ 2, 3. 9 Nisi si quid damno fatali contingit : D. 4, 9, 3, § 1. Among damna jatalia were reckoned losses by shipwreck, by lightning, or other casualty, by pirates, and by vis major. Losses by fire, burglary, and robbery come also under this head, but not theft ; qui salvum fore recepit, non solum a jurto, sed etiam a damno recipere videatur : D. 4, 9, 5, § 1. Under the Code Civil, common carriers are not liable for losses resulting from superior force, such as robbery, arts. 1782, 1784, 1929, 1953. In Scotland, loss by fire was regarded in ordinary cases as damnum fatale, but robbery is not : 1 Bell, Comm. (7th ed. ) 499. The case as to fire seems somewhat doubtful, since Bell says, at 500: “ It has, on the whole, appeared in Scotland that this responsibility for fire is not to be held within the true principle of the edict as adopted by us. It is rather considered as a damnum fatale, an inevitable accident, for which the carrier, &c., are not responsible.” The law, however, is altered by statute ; The Mercantile Law Amendment Act, 1856 (Scotland), 19 & 20 Viet. c. 60, s. 17, making all carriers for hire of goods within Scotland liable to make good to the owner of such goods all losses arising from accidental fire while such goods were in the custody or possession of such carriers. See Smith, Merc. Law (10th ed.), 304 and note. VOL. II. Roman law. K 872 NEGLIGENCE IN LAW. BOOK V. Special liability of a carrier by the Roman law only in the case of water carriers. Liability of carrier by water in English law, how derived. Liver Alkali Co. v. Johnson Scai/e v. F arrant. The special liability of a carrier by the Roman law existed only in the case of water carriers. “ It is,” says Cockburn, C.J., X “ a mis- apprehension to suppose that the law of England relating to the liability of common carriers was derived from the Roman law ; for the law relating to it was first established by our Courts with reference to carriers by land, on whom the Roman law, as is well known, imposed no liability, in respect of loss, beyond that of other bailees for reward.” Historically, the liability of a carrier by water in English law is derived from the liability of land carriers ; this is pointed out by Cockburn, C.J., in the course of the judgment , 2 which has already been quoted. “ As matter of legal history, we know that the more rigorous law of later times, first introduced during the reign of Elizabeth, was, in the first instance, established with reference to carriers by land, to whom by the Roman law no such liability attached. It was not till the ensuing reign, in the eleventh of James I., that it was decided, in Rich v. Kneeland , 3 that the common hoyman or carrier by water stood on the same footing as a common carrier by land, and rightly, for in principle there could be no difference between them.” From this time, accordingly, there has been held to be no distinction in principle between a land carrier and a water carrier ; 4 though there are par- ticular developments of detail that require separate consideration. In the Liver Alkali Co. v. Johnson 5 the contention was that the character of a common carrier is not constituted unless he holds himself out as plying between particular places, or holds himself out to go to some particular place and to take all goods brought him for the voyage. The defendant was a barge-owner, who let out vessels for the conveyance of any goods to any customers who applied. The termini were not fixed, except in each case by the customer. The majority of the Court (Blackburn, J., delivered the judgment) were of opinion that the defendant “ has the liability of a common carrier ” ; though they did not “ think it necessary to inquire whether the defend- ant is a carrier so as to be liable to an action for not taking goods tendered to him.” 6 Brett, J., dissented and was of opinion 7 that the defendant “ was not a common carrier,” “ because he does not under- take to carry goods for or to charter his sloop to the first comer. He wants, therefore, the essential characteristic of a common carrier ; he is, therefore, not a common carrier, and therefore does not incur at any time any liability on the ground of his being a common carrier.” Lord Russell, C.J., in Hill v. Scott 8 somewhat dryly remarks: “ I prefer of the two the language of Blackburn, J., although there is really no essential difference.” Liver Alkali Co. v. Johnson was mainly relied on by the plaintiff in Scaife v. F arrant 9 also in the Exchequer Chamber. The defendant was the agent of a railway company for collecting and delivering goods and parcels ; in addition he carried on upon his own account the business of a carrier, removing goods ami furniture for hire for all persons who applied to him, and in his own vans. Generally the van or vans were hired by, and filled with the goods of, one person only. 1 Nugent v. Smith, 1 C. P. D. 428. 2 L.c. 430. 2 Cro. Jac. 330, Hob. 17. * Trent Navigation v. Wood, 3 Esp. (N. P.) 127. 5 (1874) L. R. 9 Ex. 338 ; cp. Flautt v. Lashley, 30 La. Ann. 106. e L. R. 9 Ex. 340. 7 L.c. 343. s [189.7J 2 Q. B. 371, 370. » (1875) L. R. 10 Ex. 358. chap, ii.] COMMON CARRIERS. 873 The plaintiff made an agreement with the defendant to remove his furniture, the defendant “ undertaking risk of breakage (if any) not exceeding £5 on any one article.” While the furniture was being removed, it was burned, without negligence on the defendant’s part. The plaintiff contended that Liver Alkali Co. v. Johnson 1 estab- lished that the defendant was a common carrier, and so liable. The Exchequer Chamber held that the facts showed the plaintiff to have entered into a special contract, by the terms of which he was bound ; and the fair construction of the agreement was that the defendant was willing to undertake a particular casualty and no other. Cockburn, C.J., intimated an opinion that the question of what constitutes a common carrier “ ought to be submitted to further consideration.” i 2 * In the following year, in Nugent v. Smith? in the Court of Appeal Cockburn, C.J., reviewed the authorities. After noting that the Court of Appeal was bound by the judgment in Liver Alkali Co. v. Johnson , 4 he thus expressed his own opinion : 5 * “I cannot help seeing the difficulty which stands in the way of the ruling in that case, namely, that it is essential to the character of a common carrier that he is bound to carry the goods of all persons applying to him, while it never has been held, and, as it seems to me, could not be held, that a person who lets out vessels or vehicles to individual customers on their application was liable to an action for refusing the use of such vessel or vehicle if required to furnish it. At all events, it is obvious that, as the decision of the Court of Exchequer Chamber proceeded on the ground that the defendant in that case was a common carrier, 0 the decision is no authority for the position taken in the court below, that all shipowners are equally liable for loss by inevitable accident.” From this passage it may be gathered that Cockburn, C.J., con- sidered that Blackburn, J., in Liver Alkali Co. v. Johnson, had intro- duced into his definition of a common carrier other than the accepted elements. It may, however, be remarked that in the Court of Ex- chequer, judgment was given on the ground that the defendant was within the terms of Story’s definition of a common carrier, and exercised a public employment “ by means of numerous vessels, which he let to any one who chose to hire them.” 7 If the judgment of the majority of the Exchequer Chamber could be limited to the affirmance of this, no difficulty would arise. Yet there are expressions in the judgment indicating that the defendant was exercising a public employment, and which lead to the inference that the carrying on the business of letting vehicles for the carriage of particular goods is in law a carrying on a i L. R. 9 Ex. 338. 2 L. R. 10 Ex. 366. 3 (1876) 1 C. P. D. 423. In this case Cockburn, C.J., cites Parsons’ definition of common carrier (at 427) — -“ One who offers to carry goods for any person between certain termini and on a certain route.” “ He is bound to carry for all who tender to him goods and the price of carriage, and insures these goods against all loss but that arising from the act of God or the public enemy, and has a lien on the goods for the price of the carriage.” “ If either of these elements is wanting, we say the carriage is not a common carrier, either by land or by water.” Avinger v. South Carolina By. Co., 13 Am. St. R. 716, is an action against a common carrier for refusing to carry goods tendered to him. 4 L. R. 9 Ex. 338. s 1 C. P. D. 433. 6 The decision scarcely goes so far as that ; only that he had “ the liability of a common carrier,” to the exclusion of the question as to whether he would “ be liable to an action for not taking goods tendered to him ” : per Blackburn, J., L. R. 9 Ex. 340. 7 Per Kelly, C.B., L. R. 7 Ex. 269. Nugent v. Smith. Cockburn, C.J.’s opinion. Criticised. Common carrier to carry passengers. Distinction between common carrier and private carrier. Duty of common carrier. 874 NEGLIGENCE IN LAW. [book V. public employment, and consequently, an exercise of the business of a common carrier. 1 Even if this be so, the nominal definition of a common carrier need not be disturbed, though the notion of what is comprehended under it may require to be extended. If it be not so, then the view of Cockburn, C.J., appears to state the law, and the decision in Livkr Alkali Co. v. Johnson must be explained on the facts found by the jury, without any wider application. Another branch of a common carrier’s business is to carry passengers for hire. This is a development of much later date than his obligation to carry goods ; for the first case reported of an attempt to recover damages by a person for an injury done to him as a passenger was tried before Lord Kenyon in 1791, and reported in Peake’s Nisi Prius Cases, 81, in 1795. 2 The liability arising from the undertaking to carry passengers differs from that with regard to goods, and will be independently considered. A common carrier, it has been said, differs from a private carrier, 3 first, in respect of duty ; secondly, in respect of risk. First, in respect of duty. 4 A common carrier exercises a public employment ; 5 so that he cannot, like an ordinary tradesman or mechanic, receive or reject a customer at pleasure, or charge any price that he chooses to demand. A refusal to receive goods or to carry them according to the course of his particular employment, without sufficient excuse, will render him liable to an action. But he cannot be sued in assumpsit for not carrying safely where no rate is fixed by law ; for in such a case the carrier is entitled to say on what terms he will carry, and is not obliged to take everything which is brought to his warehouse unless the terms on which he chooses to undertake the risk are complied with by the person who employs him. 6 At the same time, a common carrier may only require reasonable compensation for his services, and for the risks that they draw with them. Moreover, at common law he is under no obligation to treat all customers equally ; still if the customer, in order to induce the carrier to perform his duty, paid under protest a larger sum than was reasonable, he might recover back the surplus beyond what the carrier was entitled to receive, in an action for money had and received, as being money extorted from him. 7 1 Cp. Coggs v. Bernard, 1 Sm. L. C. (11th ed.), 209 ; Ingate v. Christie, 3 C. & K. Cl ; Ansell v. Waterhouse, 2 Chit. (K. B. ) 1. 2 White v. Boulton, Peake (N. P.), 81 ; referred to by Hubbard, J., in Ingalls v. Bills, 50 Mass. 8. 3 Angell (5th ed.), Carriers, § 07. 4 Cp. Code Civil, art. 1782 et seqq. ; Erskine, Institutes, bk. 3, tit. 1, 28. s “ If a man takes upon him a public employment, be is bound to serve the public as far as the employment extends ; and for refusal an action lies,” Lane v. Cotton, 1 Ld. Raym. 646, per Holt, C.J., 654 ; per Paston, J., Y. B. 14 H. VI. 18, pi. 58 ; cp. Y. B. 19 H. VI. 49, pi. 5, with Y. B. 21 H. VI. 55, pi. 12, and Y. B. 48 E. III. 6, pi. 1 1. “ It is the duty of every artificer to exercise his art rightly and truly as he ought,” Fitzh. De Nat. Brev. 94 D. 6 v. Jackson, Peake, Add. Cas. 185 ; see also Lord Kenyon’s ruling as to common law duty, and the remark by Parke, B., as to innkeepers, in Johnson v. Midland Ry. Co., 4 Ex. 371. “ A man may keep an inn for those persons only who come in their own carriages.” This was in answer to an argument of counsel that a company, having chosen to be carriers, can no more select the goods they will carry than an innkeeper his guests. z Per Blackburn, J., in 0. W. Ry. Co. v. Sutton, L. R. 4 H. L. 237, and the fact of charging less to one is evidence that the greater charge is unreasonable : Baxendale v. Eastern Counties Ry. Co., 27 L. J. C. P. 137, 145; and the excess may be recovered at common law even when not paid under protest : Barker v. O. II’. Ry. Co., 7 M. & G. 253 ; Edwards v. G. W. Ry. Co., 11 C. B. 588; Heiserman v. Burlington, tested, Blackburn, J., said : “ Marshall v. York, Newcastle, and Berwick Ry. Co? is a distinct decision that it [an action against a common carrier for the breach of his duty to carry goods safely] is in 1 Bac. Abr. Carriers (B) ; Riley v. Horne . 5 Bing. 217 ; Morse v. Slue, SirT. Raym 220 ; 1 Vent. 238 ; Lane v. Cotton, 1 Salk. 143. 2 Co. Litt. 89 a. To this Mr. Hargrave appends a note : “ The hire is not the only or principal ground, on which the carrier is liable ; for factors, though they also receive a reward, are not so, except for negligence or by reason of a special under- taking. The great cause of the laws charging the carrier is the public employment he exercises.” In Morse v. Slue, 1 Vent. 238, Hale, C.J., is reported as saying : “ Then the first reason wherefore the master is liable is, because he takes a reward ; and the usage is. that half wages is paid him before he goes out of the country.” 3 1 T. R. 27, 33. * Cp. Hide v. Proprietors of Trent Navigation, 1 Esp. (N. P.) 36, per Lord Kenyon, C.J. : “ Where a man is bound to any duty, and chargeable to a certain extent by the operation of law, in such case he cannot by any act of his own discharge him- self.” s 2 Chitty (K. B.), 1, 4. 6 2 E. & E. 844, 854. Tattan v. G. IF. Ry. Co. was discussed in Baylis v. Lintolt, L. R. 8 C. P. 345, and distinguished by the Court of Appeal in Fleming v. Manchester, Sheffield, and Lincolnshire Ry. Co., 4 Q. B. D. 81, as being before the County Courts Act (30 & 31 Viet. c. 142), s. 5. See Kerr v. Midland G. IF. Ry. Co., 10 Ir. C. L. Appendix, xlv. ; Ponlifex v. Midland Ry. Co., 3 Q. B. D. 23 ; Cohen v. Foster, 66 L. T. 616; Steljes v. Ingram, 19 Times L. R. 534. t 1 1 C. B. 655. “ It seems to me that the whole current of authorities, beginning with Govett v. Radnidge (3 East, 62), and ending with Pozzi v. Shipton (8 A. & E. 963), establishes that an action of this sort is in substance, not an action of contract, but an action of tort against the company as carriers.” “ The earliest instance I find of an action of this sort is in Fitzherbert’s Natura Brevium, Writ de Trespass sur le Case, in which it is said (94 D) : ‘ If a smith prick my horse with a nail, &c., I shall have my action upon the case against him without any warranty by the smith to do it well ; for it is the duty of every artificer to exercise his art rightly and truly as he ought.’ There is no allusion there to any contract ” ; per Williams, J., l.c. 663. In Y. B. 14 H. VI. 18, pi. 58, the law is laid down in accordance with Fitzherbert. Com- pare the case mentioned by Willes, J., in the opening passage of his judgment in British Columbia Saw Mill Co. v. Nettleship, L. R. 3 C. P. 508. In Buddie v. Willson, 6 T. R. 369, 373, it is laid down (on the authority of Denison, J., in Dale v. Hall, 1 Wils. (K. B. 282), that in the ordinary case of an action against a common carrier, the cause of action is ex contractu. Then came the judgment of the King’s Bench in Govett v. Radnidge, 3 East, 62. Cp. Weall v. King, 12 East, 452. Sir J. Mansfield, C.J., delivering the judgment of the Common Pleas in Powell v. Leyton, 2 B. & P. (N. R.) 365, re-affirmed the principle of Buddie v. Willson. Dicey, Parties to an Action, 20, is to the same purport. See note to Buddie v. Willson, 3 R. R. 206, and Bullen and Leake, Prec. of Plead. (3rd ed. ) 120. Powell v. Leyton is considered in Ansell v. Waterhouse, 2 Chitty (K. B.), 1. The Queen v. McLeod, 8 Can. S. C. R. 1, should also be referred to, especially the judgment of Fournier, J., 45-54. See ante, 733, 763, and post, 993. Common carrier may limit his pro- fession in what manner he pleases. As to risk. Riley v. Horne. 871) NEGLIGENCE IN LAW. [book v substance, no less than in form, an action on the case. The defendants there were held liable to the plaintiff, a servant travelling on their line with his master, who paid his fare, for the loss of his luggage ; although not only was the declaration not framed on a contract, but there was no contract with the plaintiff on which it could have been framed. That is a conclusive authority that a common carrier is liable to an action for a breach of the duty imposed on him by the custom of the realm, apart from any considerations of contract.” It is at the option of every man whether he becomes a common carrier or not ; if he does, he may limit his profession in what manner he pleases, and may fix what prices he chooses to charge. 1 By the common law as it stood before the Carriers Act, 1830, 2 as soon as the carrier has entered upon his duties in the manner and under the regulations that he may have chosen to prescribe to himself, so long as he professes to carry on his business he is bound to receive goods (and passengers if they are within the limits of his profession) and carry them for a reasonable reward, 3 and according to the route which he holds out to the public, though it is not the shortest or the most convenient ; 4 and he can neither capriciously in a single instance, nor by public notice seen and read by his customer, exonerate himself from the consequences of gross neglect. 5 He may choose the kind of conveyance he is to carry in, the times of transit, the mode of delivery, the articles that he will profess to carry, and what price he will have when he shall be paid. His duty to receive is always limited by his convenience and his profession to carry, 6 although his liability is not limited to England ; for if he holds himself out as a carrier to some place without the realm, he becomes liable to an action at the suit of any for whom he may refuse to carry. 7 Secondly, in respect of risk. The common law as to this is stated by Best, C.J., in Riley v. Horne : 8 “ We have established these points — that a carrier is an insurer 1 Smith v. Horne, 8 Taunt. 144 ; see per Bayley, J., Garnett v. J V Ulan, 5 B. & Aid. 57 ; Wyld v. Pickford, 8 M. & W. 443, 4(51 ; Hinton v. Dibbin, 2 Q. B. (540; Thorogood v Marsh, Gow (N. P.), 105, 107. 2 11 Geo. IV. & 1 Will. IV. c. 68. The Canadian Law as to custody of goods may be gathered from The Merchants' Despatch Transportation Co. v. Hately, 14 Can. S. C. R. 572. s 2 Kent, Comm. 599; Harris v. Packwood, 3 Taunt. 264, 2j 1 ; Pickford v. Grand Junction By. Co., 8 M. & W. 372. * Hales v. L. A N. W. By. Co., 4 B. & S. 66. As to sea journeys, Leduc v. Ward, 20 Q. B. D. 475. 5 Biley v. Horne, 5 Bing., per Best, C.J., 224; Smith v. Horne, 8 Taunt. 144; Newborn v. Just, 2 C. & P. 76. But he may by clear agreement. Manchester, Sheffield, and Lincolnshire By. Co. v. Brown, 8 App. Cas. 703 ; see Czech v. General Steam N dvigation Co., L. R. 3 C. P. 14 ; and post, 892. The effect of mere notice of exceptional circumstances not amounting to an ingredient in the contract of carriage was con- sidered in Horne v. Midland By. Co., L. R. 8 C. P. 131 : Elbinger Actien-Gesellschafft v. Armstrong, L. R. 9 Q. B. 473; The Parana, 2 P. D. 118. Ashcndon v. L. <{■ B. By. Co., 5 Ex. D. 190, is the case of an ambiguous agreement which was held not to be just and reasonable within sec. 7 of the Railway and Canal Traffic Act, 1854 (17 & 18 Viet, c. 31). Shaw v. G. W. By. Co., [1894] 1 Q. B. 373. By the old common law a carrier could not exonerate himself from liability due to the negligence or misconduct of his own servants, at least if the statement in Doctor and Student, Dial. 2, c. 38. is adopted : “ If he [the carrier] would per case refuse to carry it [the goods] unless promise were made unto him that he shall not be charged for no misdemeanour that should be in him, the promise were void, for it were against reason and against good manners, and so in all others cases like.” This is the law to-day in the United States. 2 Kent, ( ' > 111111 . (13th ed.) 60S n. ,r. <> Jackson v. Boyers, 2 Show. (K.B.) 327 ; Oxlade v. N. E. By. Co.. 1 C. B. N. S. 454 ; Johnson v. Midland By. Co., 4 Ex. 367. 7 Crouch v. L A N. W. By. Co., 14 C. B. 255. 8 5 Bing. 224, COMMON CARRIERS. 877 CHAP. II.] of the goods which he carries ; that he is obliged for a reasonable reward to carry any goods to the place to which he professes to carry goods that are offered him, if his carriage wall hold them, and he is informed of their quality and value ; that he is not obliged to take a package the owner of which will not inform him what are its. contents, and of what value they are ; that if he does not ask for this information, or if, when he asks and is not answered, he takes the goods, he is answerable for their amount, whatever that may be ; that he may limit his responsibility as an insurer, by notice ; but that a notice will not protect him against the consequences of a loss by gross negligence.” This statement has, however, been contradicted in one respect, and expanded in another by subsequent decisions. (1) It has been contradicted as to the alleged right of the carrier (1) Denied as to refuse a package without a disclosure of its contents. The Court of to r ^\° f Common Pleas considered this point in Crouch v. L. & N. W. Ry. Co., 1 re f U setotake and held that, as a general rule of law, there was not “ a shadow of a package, authority to sustain that position, except the dictum of Best, C.J., in Crouch v. Riley v. Horne ; and it is a proposition which in its generality cannot ^ w - stand the test of reasoning.” 2 The Court must not be taken to deny y ' °' that there are cases, as of imperfect packing or fraudulent concealment and the like, where the refusal of information of the contents of a package would, in the event of loss suffered by some casualty, exonerate the carrier from liability. “ But, to say that the company may in all cases insist upon being informed of the nature and contents of every package tendered to them, as a condition of their accepting it, seems to me to be a proposition that is perfectly untenable.” In a celebrated United States case 3 this point was carefully con- xhe Nitro- sidered. The plaintiff’s premises were greatly injured by an explosion glycerine of nitro-glycerine, which the defendants were carrying without know- case - ledge of its dangerous properties, and in the ordinary way of business. The question raised was whether the innocent owner of the premises had an action against the carrier, who was ignorant of what he was carrying. The Supreme Court of the United States were of opinion that notice of the dangerous substance could not be imputed to the defendant ; since, if it were, it would involve a right to refuse packages offered for carriage without knowledge of their contents, or a right to inspect the contents as a condition of carriage. On the authority of Crouch v. L. & N. W. Ry. Co., 1 this position is held unsustainable. The only right of the carrier in this respect is to refuse to receive packages offered without being made acquainted with their contents when there is good ground for believing that they contain anything of a dangerous character. When, then, there are no attendant circumstances to awaken suspicion, there is no legal presumption of knowledge, and consequently no liability for the consequences of ignorance. 5 i 14 C. B. 255. 2 Per Maule, J., 295. 3 The Nilro-gligcerine case, 15 Wall. (U. S.) 524; Cramb v. Caledonian Ry. Co., 19 Rettie, 1054. * 14 C. B. 255, 291. s In Reg. v. Lister, Dears & B. (C. C.) 209, the keeping of large quantities of naphtha near a highway to the danger of the public was held to be an indictable offence, though no fire had taken place. In Standard Oil Co. v. Tierney, 36 Am. St. R. 595, there was held to be a duty on the shipper of dangerous or explosive substances to notify the carrier of the danger attending the handling of them, and if an injury results to the carrier’s servants the shipper is liable for the injury thus sustained. If the carrier has knowledge of the dangerous character of any article he is carrying, there is also a duty 878 NEGLIGENCE IN LAW. [book V. (2) Extended us to liability for amount. .Judgment of Parke, B., in W alker v. Jackson. Facts in Walker v. Jackson. Carrier insurer in all cases except two. (2) Again, Best, C.J.’s, statement has been expanded with regard to the proposition that if, when the carrier “ asks and is not answered, he takes the goods, he is answerable for their amount, whatever that might be.” 1 “ I take it now to be perfectly well understood, according ,to the majority of opinions upon the subject,” says Parke, B., 2 “ that if anything is delivered to a person to be carried, it is the duty of the person receiving it to ask such questions about it as may be necessary ; if he ask no questions, and there be no fraud to give the case a false complexion on the delivery of the parcel, he is bound to carry the parcel as it is. It is the duty of the person who receives it to ask ques- tions ; if they are answered improperly, so as to deceive him, then there is no contract between the parties ; it is a fraud which vitiates the contract altogether.” The facts of the case eliciting these remarks were : A “ light four- wheeled phaeton ” was delivered so the defendant as carrier ; for which the plaintiff paid the regular charge. The carriage was safely placed on the defendant’s ferry-boat, and conveyed safely across the river. On commencing to draw it up the slip towards the quay on the other side, the defendant’s servants were overpowered by its weight. The carriage ran down into the river, and jewellery and watches, packed in a box under the seat, which much increased its weight, but about which nothing was said, were injured. The Court held that the plaintiff’s right of action was unaffected by his failing to disclose the fact that watches and jewellery were contained in the carriage, and that there was no conflict with the principle asserted in Gibbon v. Paynton ; 3 for there the action of the plaintiff was misleading to the extent of being frandulent ; he put valuable property in an old nail- bag stuffed with hay ; while in the present case the plaintiff appeared not at all to have altered his normal mode of travelling. This decision settled the law and the older conflicting cases “ have dropped from the books.” 4 Carriers are “ insurers in all cases except in two,” says Lord Kenyon in Hyde v. Trent and Mersey Navigation Co., 5 and in Thorogood v. Marsh, 6 Dallas, C. J., says : “ The general law is clear. A common carrier is in every case an insurer against fire.” A fire caused by lightning is the only exception ; 7 and even when the destruction of the goods was brought about by a high wind communicating a fire from a distance, the Court of Appeals of New York held the carrier liable. 2 on him to notif 1 the fact to all who have to come into contact with it. In Baldwin v. L. C. & D. Ry. Co., 9 Q. B. D. 584, it is said : “ It was the duty of the plaintiffs to inform the company at the time, if special care were required in dealing with the rags ” — the particular goods being carried in that case. 1 Walker v. Jackson, 10 M. & W. 101. Cp. Lebeau v. The General Steam Naviga- tion Co., L. R. 8 0. P. 88, 97. Willoughby v. Horridge, 12 C. B. 742, is the case of injury to a horse landing from a ferry-boat through a defective slip. Yerkcs v. Sabin, 49 Am. R. 434, also deals with responsibility for horses ; Wight v. Chairman, dkc. oj Ohinemuri County, 22 N. Z. L. R. 092, with the negligence of a ferryman. The first recorded instance of an action on the case was one for overloading a boat, whereby plaintiff’s horse perished, Lib. Ass. 22 E. III. 94, pi. 41, summarised in Reeves, Hist, of the Eng. Law (2nd ed.), vol. iii. 89. 2 10 M. & W. 108, which was adopted Lebeau v. The General Steam Navigation Co., L. R. 8 C. P. 88. 3 4 Burr. 2298. Post, 888. * Per Wright, J., Shaw v. G. !!'. Ry. Co., [1894J 1 Q. B. 380. 5 5 T. R. 394. ' 6 Gow (N. P.), 105, 107. 7 Gatliffe v. Bourne, 4 Bing. N. C. 314, 3 M. & G. 043 ; 1 1 Cl. & F. 45. s Miller v. Steam Navigation Co., 10 N. Y. 431. COMMON CARRIERS. 87!) CHAP. II.] How the carrier’s liability as an insurer is restricted we shall now Restrictions proceed to discuss, classifying his possible immunity under eight heads. ° f 8 (1) A common carrier is not liable for damage arising from any ( 'j l ' of natural cause which the care and foresight reasonably to be expected from him would not provide against. In law such events are known as the acts of God. In Co(j(js v. Bernard, 1 speaking of the common carrier, Holt, C.J., Holt, C.J., in says : “ The law charges this person thus intrusted to carry goods against all events but acts of God and of the enemies of the King. For though the force be never so great, as if an irresistible multitude of people should rob him, nevertheless he is chargeable. 2 And this is a politick establishment contrived by the policy of the law for the safety of all persons, the necessity of whose affairs oblige them to trust these sorts of persons, that they may be safe in their ways of dealing ; for else these carriers might have an opportunity of undoing all persons that had any dealings with them, by combining with thieves, &c., and yet doing it in such a clandestine manner as would not be possible to be discovered. And this is the reason the law is founded upon it in that point.” We must bear in mind that the casus fortuitus 3 of the civil law — Casus fortui- what is termed in the common law inevitable accident — is divided into J“^. intliecivi two classes ; the first comprehending those occurrences which are occasioned by the elementary forces of nature unconnected with the agency of man or other cause ; the second comprehending those which have their origin, either in whole or in part, in the agency of man, whether through commissions or omissions, nonfeasances or mis- feasances, or in any other cause independent of the agency of natural forces. A common carrier is not liable for inevitable accident in the first of these senses, but he is liable in the second ; 4 by the Roman law he was liable in neither. The strictness with which inevitable accident in this second sense is excluded in English law is illustrated by Lord Mansfield, C.J., in Forward v. Pittard , 5 where he mentions the Gordon riots of 1780 as Forward v. insufficient to excuse a carrier from delivering goods received in the Pittard. way of his business. An even stronger case is put in McArthur v. McArthur v. Sears, 6 by Cowen, J. : “I believe it is a matter of history that in- Sears. habitants of remote coasts accustomed to plunder wrecked vessels have sometimes resorted to the expedient of luring benighted mariners i 2 Ld. Raym. 909, 918. 2 See Y. B. 9 E. IV. 40, pi. 22. 3 Casus fortuitus quod iato contingit, cuivis diligentissimo possit conlingere, is the definition of the civil law : see Kent, C.J., in Colt v. M' Mechen, 6 Johns. (Sup. Ct. N. Y.) 1G8 ; and 3 Kent, Comm. 216. Colquhoun, Roman Civil Law, §§ 1534, 2162. Casum fortuitum definimus omne quod humano coeptu preevideri non potest, nec cui proviso potest resisti. Casus fortuiti varii sunt : vdut a vi ventorum, turbinum, plu- viarum, grandinum, fulminum, cestus, frigoris et similium calamitalum quee ccelilus immittuntur. Nostri vim divinam dixerunt. Grceci 0eou fSLuv. Item naufragia, aquarurn inundationes, incendia, morles animalium, ruinoe cedium, fundorum chats- mata, incursus hostium, preedonum impetus. His adde damna omnia, a privatis illala quas quominus inferrenlur nulla curd caveri potest : Vinnius, Partit. Juris, lib. ii. c. 66, cited by Cockburn, C.J., Nugent v. Smith, 1 C. P. D. 436. A landslip caused by an ordinary rainfall is not the “ act of God ” : Gleeson v. Virginia Midland Rd. Co., 140 U. S. (33 Davis) 435. 4 Forward v. Pittard, IT. R., per Lord Mansfield, C.J., 34. s 1 T. R. 27. 6 21 Wend. (N. Y.) 198, where, also, the learned judge says : “ A man hires his vessel to bo repaired by a skilful workman, who makes a rudder apparently sound, but internally rotten, and the loss happens by reason of its breaking. The owner is liable though ignorant of the defect ” ; he cites as his authority for this Backhouse y. Sneed, 1 Murph. (N. C.) 173, Character of the interven tion neces- sary to excuse. A mies v. Stevens. Nugent v. Smith, view of Cockburn, C.J. Proposition adopted by Mellish and James, L.JJ. Even act of God will not in all cases protect from liability. River W ear Commis- sioners v. Adamson. 880 NEGLIGENCE IN LAW. [book v. by false lights to a rocky shore. Even such a harrowing combination of fraud and robbery would form no excuse.” What amount and character of intervention by natural agency suffices to bring a loss within the exception of “ act of God ” has been the subject of considerable difference of opinion. On the one hand, the intervention necessary has been narrowed down to such direct and violent and sudden acts of nature as could not by any amount of ability be foreseen, or, if foreseen, averted. 1 On the other, a claim has been made to comprehend as well any sudden and entire failure of the wind as any sudden gust of wind working loss to a vessel taken unprepared by it. 2 For this latter view the case of Amies v. Stevens 3 was vouched, where a hoy going through a bridge was driven against a pier by a sudden gust of wind, and sunk. The legal definition of an “ act of God ” was elaborately canvassed in Nugent v. Smith , 4 Cockburn, C.J., adopting the view of Story, 5 held that losses by perils of the sea must arise from some overwhelming power which cannot be guarded against by ordinary exertions of human skill and prudence ; and that the same is equally true with regard to acts coming within the designation of “ act of God ” ; there- fore, all that can be required of the carrier is that he should do all that is reasonably and practically possible to ensure the safety of the goods. If, despite the resort to all the means known to prudent and experienced carriers, a storm or other natural agency w-orks damage, the carrier is protected ; for then the injury may be said to come from the “ act of God.” Mellish and James, L.JJ., worded their conclusion as follows : 6 “ The ‘ act of God ’ is a mere short way of expressing this proposition. A common carrier is not liable for any accident as to which he can show that it is due to natural causes directly and exclusively without human intervention, and that it could not have been prevented by any amount of foresight and pains and care reasonably to be expected from him.” 7 The “ act of God ” will not in every case excuse from liability ; for examine, where an Act of Parliament provides that in the event of damage occurring the liability shall be discharged in any particular way the Act may indicate. “ If,” says Lord Cairns, C., in River Wear Commissioners v. Adamson , 8 “ a duty is cast upon an individual by common law, the act of God will excuse him from the performance of that duty. No man is compelled to do that which is impossible. It is the duty of a carrier to deliver safely the goods entrusted to his care ; but if in carrying them with projier care they are destroyed by lightning, or swept away by a flood, he is excused, because the safe delivery has, by the act of God, become impossible. If, however, a man contracts that he will be liable for the damage occasioned by a particular state of circumstances, or if an Act of Parliament declares that a man shall be liable for the damage occasioned by a particular state of circum- stances, I know of no reason why a man should not be liable for the damage occasioned by that state of circumstances whether the state of circumstances is brought about by the act of man or by the act of God. 1 Per Brett, J., Nugent v. Smith, 1 C. P. D. 19, 34. 2 Colt v. M’Mechen, 0 Johns. (Sup. Ct. N. Y.), per Spencer, J., 105 : “ He caused the gust to blow in the one case ; and in the other, the wind was stayed by him.” 3 1 Str. 127. L C. P. D. 437- 5 Bailm. §512 a. ' 6 l C. P. I). 444. 7 See Nichols v. Marsland, 2 Ex. I). 5 ; and Nitro-phosphate and Odum's Chemical Manure Co. v. London arid St. Katharine Docks Co., 9 Ch. I)., per Fry, .1.. 51<>. 8 2 App. Cas. 750. Lord Young is said to have defined “ Act of God ” : “some- thing which no reasonable man could ever expect ” : Obituary Notice in (lie Scotsman. COMMON CARRIERS. 881 CHAP. II.] There is nothing impossible in that which, on such an hypothesis, he has contracted to do, or which he is by the statute ordered to do : namely, to be liable for the damages.” The law as thus stated can be traced back as far as the year 1537, where it is laid down with equal distinctness 1 by Fitzherbert and Shelley, JJ., that “ the lessee is excused from the penalty ; as if it were of an house which is burnt by lightning, or overturned by the wind, because it is the act of God, which cannot be resisted.” 2 Maule, J., takes exception to the verbal accuracy of the proposition. He considers that what is intended to be signified is that the casualty was not within the contract ; for a man may by apt words bind himself or warrant that it shall rain to-morrow and, if not, he pays damages. 3 (2) The second exception to a common carrier’s liability is for acts (2) Acts of the “ of the enemies of the King.” the K^n ° f By “ the enemies of the King ” are not to be understood mere R ' king ' private depredators, who, in a sense, are at war with society, but the public enemies of the Sovereign of the carrier, whether that Sovereign be an Emperor, a Queen, or a reigning Duke. 4 The ground of this exception is probably the inability of process to issue against the wrongdoer ; and, as the King’s Courts could not assist the bailee to his remedy, so it was held inequitable to assist the bailor. 5 Thus, in The Marshal’s case 6 an action of debt was brought against the Marshal of the Marshalsea for an escape of a prisoner. The plea was that enemies of the King broke into the prison and carried off the prisoner against the will of the defendant. The Court distinguished, saying if alien enemies of the King, for instance the French, released the prisoner, or perhaps if the burning of the prison gave him a chance to escape, the excuse would be good, “because then(the defendant) has remedy against no one.” On the other hand, if subjects of the King broke the prison, the defendant would be liable, for they are not enemies, but traitors. Losses occasioned by robbers or rioters are not regarded as losses Public by a public enemy, though there must be a time when riot or in- enemies, surrection may be merged in actual belligerency. 7 Public enemies are not merely those who, being the agents of a de facto Government, are engaged in war with the State of which the carrier is a member, 8 1 Dyer, 33, Case (10). 2 Cp. Aleyn, 20. See, also Viterbo v. Friedlander, 120 U. S. (13 Davis) 707. 2 Canham v. Barry, 15 C. B., 597, 619 ; Baity v. De. Crespigny, L. R. 4 Q. B. 180. 4 Russell v. Niemann, 17 C. B. N. S. 103, recognised and approved in the H. of L. in the unreported case of Taylor v. Perrin; De Laurier v. Wyttie, 17 Rettie, 167, 189; Serraino v. Campbell, [1891] 1 Q. B. 283 ; The Heinrich, L. R. 3 A. & E. 42T4. 5 Holmes, The Common Law, 177, 201. « Y. B. 33 H. VI. 1, pi. 3. 2 Y. B. 33 Henry VI. 1, pi. 3. In an Anonymous case, in Hil. 38 Eliz., Owen, 58, Gawdy, J., says : “ If rebels break a prison whereby the prisoners escape, yet the goaler shall be responsible for them; as it is in the 33 H. VI.” On which Popham, C.J., remarks: “In that case the gaoler hath remedy over a ainst the rebels, but there is no remedy over in our case,” i.e., where goods were taken at sea by pirates. To this Gawdy replies : “ Then the diversity is when the factor is robbed by pirates and when by enemies.” Popham, C.J., rejoins: “There is no difference.” In Pic- kering v. Barkley, Style, 132, Rolle, J., said : “ I suppose that pirates are perils of the sea ; and to this purpose a certificate of merchants was read in Court that they were so esteemed amongst merchants. Yet the Court desired to have Granly, the Master of the Trinity House, and other sufficient merchants, to be brought into the Court to satisfy the Court viva voce Friday next following. Judgment was given this term nil capiat per billam, because the taking by pirates are accompted perils of the seas.” See also Barton v. Wolliford, Comb. 56 ; Paradinc v. Jane, Aleyn, 26. Con- federate troops were held public enemies within the meaning of the law, in Phila- delphia, &c. Rd. Co. v. Harper, 29 Md. 330. s Gage v. Tirrcll, 91 Mass 299, 882 NEGLIGENCE IN LAW. Pirates. Lord Bacon’s view. M orse v. Slue. Hale, C.J.’s, distinction. [book V. since the designation of public enemy is held to include pirates ; 1 and this held good in the civil law as well . 2 Robbery within the realm is not an exception from the carrier’s liability ; and the definition of piracy :i is the committing those acts of robbery and depredation upon the high seas which, if committed upon land, would have amounted to felony . 4 The distinction has probably arisen from the inability of any nation to keep a maritime police to perform at sea like functions to its municipal police at home ; whence robbery on the high seas, from the greater facilities for it and the less means of prevention against it, has come to be differently regarded from robbery within the realm. Thus it is that pirates have ever been regarded in the light of public enemies, as Lord Bacon says : 5 “ Indubitatum semper fuit, helium contra piratas See ante, 876, 883. * Aleyn, 93. 6 Gibbon v. Paynton, 4 Burr. 2301. « Carthew (K. B.) 485. There is a note : “ The case of Kenrigg v. Egglestone was cited as an authority for the plaintiffs : sed non allocatur ; for the Court held that case different from the present cases.” 7 4 Burr. 2298. CHAP. II.] COMMON CARRIERS. 889 hay in an old mail-bag. “ The bag and the hay arrived, but the money was gone.” In argument, Titchburne v. White, 1 tried at Guildhall by Tiichbume King, C.J., was cited, 2 where the Chief Justice held “ that if a box is v - White. delivered generally to a carrier and he accepts it, he is answerable, though the party did not tell him there is money in it.” Lord Mans- field said : 3 * * “ This action is brought against the defendant upon the foot of being a common carrier. His warranty and insurance is in respect of the reward he is to receive ; and the reward ought to be proportionable to the risque. If he makes a greater warranty and insurance, he will take greater care, use more caution, and be at the expense of more guards or other methods of security ; and therefore he ought in reason and justice to have a greater reward. Consequently, if the owner of the goods has been guilty of a fraud upon the carrier, such fraud ought to excuse the carrier. . . . And if he has been guilty of a fraud, how can he recover ? Ex dolo malo non oritur actio.” In Gibbon v. Paynton 4 there was fraud. In Miles v. Cattle 5 the Miles v. plaintiff was entrusted with a £50 note to deliver to the defendant for Gattle - carriage. Instead of doing so, he slipped it into his own bag of clothes. The bag containing the note was stolen. He was held entitled to recover for the loss of the bag and the clothes, but not for the note ; since, in violation of his trust, “ the plaintiff thought proper not to deliver the parcel to the defendants, but to deposit it in his own bag ; thereby depriving Garbut [the owner] of any remedy he might have had against the defendants in case the parcel had been lost by them, and becoming himself a wrongdoer towards the defendants by depriv- ing them of the sum they would otherwise have earned for the carriage of the parcel.” 6 The reasoning of this case, if sound, is supersubtie ; the placing a £50 Criticised, note of anybody’s in a clothes-bag for conveyance may well be such negligence as to disentitle the owner of the bag to recover. But to go into questions of ownership at all or of the plaintiff’s duty to the owner is hazardous. The plaintiff had possession, or, in Lord Ellenborough’s words in Rooth v. Wilson, an “ interest in the integrity and safety ” of the property, for which he was liable to answer over to his bailor, 7 and this, and not considerations of the plaintiff’s conduct previously to the defendant’s accepting the mandate out of which the claim arose, is the correct test to apply to ascertain his right to sue. 8 Orange County Bank v. Brown 9 is like Miles v. Cattle in its facts. Orange. The plaintiff, a passenger by the defendants’ boat — the defendants were ^Bank^ common carriers of passengers — had with him as baggage an ordinary v Brown. travelling trunk containing a very considerable sum of money. The trunk and its contents were lost. On an action being brought, it was held that as a passenger the plaintiff was merely entitled to have his “ baggage ” 10 conveyed ; that the sum of money in the trunk could not 1 I Str. 145. In Malpica v. McKown, 1 La. Rep. 248, the principle is doubted, but the conclusion is come to that it is the better opinion that the master would be respon- sible for a trunk or parcel received on board a vessel without information as to its contents unless there is notice given disclaiming responsibility. See also Arayo v. Currel, 1 La. Rep. 528. 2 4 Burr. 2300. Humphreys v. Perry, 148 U. S. (41 Davis) 627. 3 4 Burr. 2300. 4 L.c. 2298. 5 6 Bing. 743. Cp. Bank of Kentucky v. Adams Express Co. 93 U. S. (3 Otto) 174. « L.c., per Tindal, C.J., 747. 7 IB. & Aid. 62. See ante, 733. s Story, Bailm. § 152, disapproves the grounds of the decision in Miles v. Cattle. 9 9 Wend. (N. Y.) 85. to As to what is “ baggage,” sec Phelps v. L. & N. W. By. Co., 19 C. B. N. S. 321 ; (0) Where delay is beyond carrier’s control. Briddon v. G. N. Ry. Co. Taylor v. G. N. Ry. Co. Common carrier’s duty to delivery independent of time of delivery. 890 NEGLIGENCE IN LAW. [hook v. be regarded as baggage, and therefore the plaintiff could not recover ; because his conduct in representing the trunk and its contents as mere baggage, when in fact he was conveying a large portion of very valuable property, was not fair ; for while it deprived the defendants of the reward they were entitled to for the carriage of such property, it exposed the carrier to greater risks than he contracted to encounter, and was only carried by him in so far as he was a victim to a deception practised by the plaintiff. If Miles v. Cattle had been decided on the ground of the unfair enhancement of the risk, the decision would have been unimpeachable ; for the law similarly regards conduct actually fraudulent and conduct the effect of which is fraudulent by wilfully depriving the carrier of his rights, though no actual dishonest intent may be present. 1 (6) The common carrier is not liable for delay in delivery arising from circumstances beyond his control. The earliest case on this point, Briddon v. G. N. Ry. Co., 2 has been referred to the “ act of God.” A heavy snowstorm obstructed the defendants’ line, and impeded the delivery of cattle, though “ extra- ordinary effort ” would have enabled the delivery to have been made. The Court held that extraordinary effort was not in the circumstances to be expected from the company, whose contract was only to carry “ without delay and in a reasonable time under ordinary circum- stances.” This regards only that which is ordinary and does not exact extraordinary effort. In the following case of Taylor v. G. N. Ry. Co. 3 delay took place through the negligence of another company who had running powers over the defendants’ line. The county court judge held the defendants responsible, but the Court of Common Pleas reversed his decision, and held 4 that a common carrier’s duty to deliver safely has nothing to do with the time of delivery, which is a matter of contract ; “ the first duty of a common carrier is to carry the goods safely, and the second to deliver them, and it would be very hard to oblige a carrier, in case of any obstruction, to risk the safety of the goods in order to prevent delay. His duty is to deliver the goods within a reasonable time, which is a term implied by law in the contract to deliver ; as Tindal, C.J., puts it when he says ‘ the duty to deliver within a reasonable time being merely a term ingrafted by legal application upon a promise or duty to deliver generally ’ ” ; 5 and “ reasonable time ” is measured by reference to all the circumstances of the case. Baldwin v. L. C. & D. Ry. Co., 0 was a case of delay, where the county court judge found “ that the proximate cause of the loss of the goods was the improper condition in which they were packed, and not the delay.” Had the packing been proper, he would have had to find, as a question Iludston v. Midland Ry. Co., L. R. 4 Q. B. 366 ; Macrow v. G. W. Ry. Co., L. R. 6 Q. B. 612 ; Cusaclc v. L. & N. W. Ry. Co., 7 Times L. R. 452. Thompson, Negligence, § 3416-3425, where is the customary mass of cases. 1 The law of the United States is clear oil this point : 2 Kent, Comm. 603 ; Railroad Co. v. Fraloff, 100 U. S. (10 Otto) 24. 2 (1858) 28 L. J. Ex. 51. 3 (1866) L. R. 1 C. R 385. i L.c., per Byles, J., 387. 5 Raphael v. Pickford, 5 M. & G. 551, 558. As to reasonable time, see ante, 834. The carrier is excused for delay in delivery caused by mobs or a strike accompanied by intimidation and violence, but not for the loss of the goods, Gulf, <£>c. Ry. Co- v. Levi, 18 Am. St. R. 45 ; Cp. Forward v. Pitlard, l T. R. 27. Ante, 870. 6 9 Q. B. D. 582. chap, ii.] COMMON CARRIERS. 891 of fact, whether the delivery was within a “ reasonable ” time after the receipt. 1 (7) The carrier is exonerated from his obligation to his bailor where (7) Goods the goods are seized under legal process ; that is, if the carrier notifies laken b y his bailor of the fact with reasonable diligence. 2 ega 1,ro value, but nothing was distinctly said about the actual value, nor did he undertake that the notice should be dispensed with. He did not, therefore, warrant its safe conveyance ; and on that ground we think the direction correct.” This decision is correct on the ground put by the Court of Exchequer ; nor less so if the facts were as stated in the report ; since an under-book-keeper cannot be entitled to vary the published conditions of his master’s business . 2 That the decision must not be carried futher than this may be gathered from the case of Bodenham v. Bennett in the same Court ; 3 where a valuable bank Bodenham v parcel was sent, which was usually carried by the coachman in his Bennett side-pocket. When the coach arrived at its destination the book- keeper unloaded it, received the way-bill, took two parcels out of the front seat of the coach, but did not inquire for the plaintiff’s parcel, since it was usually carried by the coachman (who on the day in question was intoxicated) ; from whom he, therefore, ought to have asked it. The judge left to the jury the question whether there had been gross negligence ; and this they found. The Court refused to disturb the verdict, being of the same opinion ; in which circumstances the fact of the notice did not exonerate from liability. An effort to distinguish Bodenham v. Bennett was made in Batson Batson v. v. Donovan , 4 first, on the ground that the defendant’s book-keeper had Donovan - knowledge of the contents of the lost parcel. In that view it conflicts with Levi v. W aterhouse ; since there the Court laid stress on the fact 1 1 Price (Ex.), 280. 2 Slim v. G. N. By. Co., 14 C. B. G47. Cp. Page v. G. N. By. Co., Ir. R. 2 C. L. 228 ; and Anderson v. Chester and Holyhead By. Co., 4 Ir. C. L. R. 435. 3 4 Price (Ex.), 31 ; Garnett v. Willan, 5 B. & Aid. 53. These cases go to show that notices were introduced to protect the carrier only from extraordinary events or from his responsibility as insurer, and not from the consequences of the want of due and ordinary personal care and diligence ; but in England it has been held that such notices may be used to protect the carrier from the negligence of his servants : Hinton v. Dihhin, 2 Q. B. 646 ; Peek v. North Staffordshire By . Co., 10 H. L. C. 473, 497 ; Man- chester, Sheffield, and Lincolnshire By. Co. v. Brown, 8 App. Cas. 703. So far as the statement in 2 Kent, Comm. 608, is contrary to this, it does not express correctly the English law, though it is in accord with the American decisions : Bailroad Co. v. Lockwood, 17 Wall. U. S. 357 ; Liverpool and Great Western Steam Co. v. Phenix Insurance Co., 129 U. S. (22 Davis) 397,439. Mr. Bell contends, 1 Comm. (7th ed ) 501-505, that a notice should not avail to excuse the carrier unless he shows a special agreement to that effect, or evidence not merely of notice but of assent to it. Post, 967. i 4 B. & Aid 21. NEGLIGENCE IN LAW. BOOK V. 896 Grounds of the decision. Best, J.’s, judgment. Marsh v. Horne. Brooke v. Pickwick. Best, C.J.’s, j udgment. that the book-keeper did not “ undertake that the notice should be dispensed with.” 1 Thus knowledge merely was ineffectual to charge the carrier. Secondly, “ it did not appear that the plaintiffs knew of the notice.” 2 As to this the report in BodenJiam v. Bennett says: 3 “The learned judge stated to the jury the common law liability of carriers, and that they might stipulate to restrain it by notice ; that they had given such a notice in this case, and therefore the question was, whether there had been gross negligence in the carrying of this parcel.” Thirdly, “ the Court thought that the parcel was carried beyond its destination, which would make it a case of misfeasance.” 4 Reference to the report will show that, though the Court inclined to the probability of this view (which was in fact the correct one), it was not the view on which their judgment was based. Indeed, it must have been considered immaterial, else it would have been left to the jury. Batson v. Donovan was decided by the majority of the Court on the ground of a duty to inform the carrier of the con- tents of the parcel, failure in which was equivalent to fraud, as in the case of Gibbon v. Paynton. 5 A second ground of decision was — that the conduct of the defendant did not amount to gross negligence, and since the carrier’s liability was limited by notice, he was not liable for less than this ; as the case was decided on the first point only, much stress was not laid upon this second point. As to the first, the view of Best, J., which seems the sounder, 6 was that there is no obligation to communicate to a carrier, unasked, what the contents of a parcel are ; since if he makes inquiry he may either know and take what extra precautions are necessary, or, being misled, if loss occurs, may be exonerated on the score of fraud or misconduct. The facts in Marsh v. Horne 7 were the same as in Levi v. Water- house, and there was distinct knowledge on the carrier’s part that the value of the goods exceeded £5 — the limit in his notice. The King’s Bench, following that case, adopted the rule that mere acceptance with knowledge of value on the carrier’s part is no waiver of the condition in a notice communicated to the consignor. In Brooke v. Pickwick , 8 in the Common Pleas, it did not appear that the plaintiff was apprised of the carrier’s notice limiting liability, and he was therefore held entitled to recover against the carrier under the common liability as an insurer. The case is interesting for an expression of opinion by Best, C.J. : 9 “ I wish, therefore, that these notices had never been holden sufficient to limit the carrier’s responsi- bility. It is too late, how r ever, now to hold that they are without effect where the customer is distinctly informed of their existence. But, though the judges have holden that they will, in such a case, exempt the carrier from his common law responsibility as an insurer, it has never been decided that they will excuse him from the con- sequences of gross negligence. If the jury find that there was gross negligence, and they could not find otherwise under the circumstances of this case, the trunk having been lost at midday, it is immaterial whether the carrier has been apprised of the value of the article or not. He must have supposed in the present instance, from the size of the 1 Levi v. Waterhouse, 1 Price (Ex.), 285. 2 Per Bayley, J., 4 B. & Aid. 40. 3 4 Price (Ex.) 32. * Per Bayley, J., 4 B. & Aid. 40 ; whereas Batson v. Donovan “ was a ease of negligence only, not of misfeasance,” per Bayley, J., 35. ■ r i 4 Burr. 2298. « Crouch v. L. & N. W. By. Co., 14 C. B. 255. 7 (1820) 5 B. & C. 322. s ( 1827) 4 Bing. 218. ' 9 L.c. 223. CHAP. II. | COMMON CARRIERS. 897 trunk and the condition of the passenger, that it was worth more than £5 ; and where is the line to be drawn if passengers are always to disclose the exact value of their luggage ? If would be dangerous to extend to cases of gross negligence the doctrine of modern law, that a carrier is not liable as an insurer where he has given notice to limit his responsibility. ... I must continue, therefore, to retain the opinion I expressed in Batson v. Donovan till the twelve judges decide I am wrong.” The same Court subsequently decided 1 that a notice, that the pro- Macklin v. prietor of a general coach office will not be responsible for the carriage Waterhouse. of parcels of more than £5 value unless entered as such, will not avail the proprietor of a coach who takes a parcel from the office, unless it be otherwise shown that he is connected with the office ; and, further, that the carrier’s agent telling the female servant of the owner of a parcel that it ought to be insured is not a sufficient notice of the limita- tion of responsibility ; and that where there is notice limiting liability Riley v. for one journey it must be held to apply to the return journey. 2 * Home. In America the law was somewhat differently construed, and con- Law in tinued to adhere more nearly to the old common law strictness of inter- A,nerioa - pretation. The rule laid down in the American decisions is expressed by Nelson, J., in New Jersey Steam Navigation Co. v. Merchants’’ Bank : 3 Nelson, J., in “He [the carrier] is in the exercise of a sort of public office, and has public Acu ’ Jersey duties to perform, from which he should not be permitted to exonerate Co'v himself without the assent of the parties concerned. And this is not Merchants' to be implied or inferred from a general notice to the public, limiting Bank. his obligation, which may or may not be assented to. He is bound to receive and carry all the goods offered for transportation, subject to all the responsibilities incident to his employment, and is liable to an action in case of refusal. And we agree with the Court in the case of Hollister v. Nowlen 4 that if any implication is to be indulged from the delivery of the goods under the general notice, it is as strong that the owner intended to insist upon his rights and the duties of the carrier as it is that he assented to their qualification. The burden of proof lies on the carrier, and nothing short of an express stipulation by parol or in writing should be permitted to discharge him from duties which the law has annexed to his employment. The exemption from these duties should not depend upon implication or inference founded on doubtful and conflicting evidence ; but should be specific and certain, leaving no room for controversy between the parties.” We are now in possesion of the doctrines of the common law on Common Law this point of notice by carriers, limiting or exonerating them from as tl ? lancl liability. They are become of the less importance by reason of the modified by legislation that was found necessary to obviate the abuses which grew the Carriers from them, and which resulted in the passing of the Carriers Act, 1830, regulating the conditions of land carriage. The detailed consideration win. iv. c. of the provisions of this Act must, however, be deferred until we have 68). dealt with other prominent general considerations applicable to the law of common carriers, and are in a position to follow out those more special branches of the subject having exclusive reference to land carriage. 5 1 Macklin v. Waterhouse, (1828) 5 Bing. 212. 2 Riley v. Horne, 5 Bing. 217. 3 6 How. (U. S.) 382. 4 19 Wend (N. Y.), per Bronson, J., 247. Cp. Cole v. Goodwin, 19 Wend. (N. Y.) Various significations of the term delivery. Delivery. I. To the carrier. II. By the carrier. I. Delivery to the carri er 898 NEGLIGENCE IN LAW. [book v. Delivery. 1 Great part of the difficulties which arise with regard to the law regulating “ delivery ” are due to the ambiguous signification of the term. Delivery, in the sense with which we are here concerned with it, signifies the transfer of the possession of goods. Delivery, besides, signifies the passing of the property in a chattel, as in Dixon v. Yates, 2 where Parke, J., says : “ Where, by the contract itself, the vendor appropriates to the vendee a specific chattel, and the latter thereby agrees to take that specific chattel, and to pay the stipulated price, the parties are then in the same situation as they would be after a delivery of goods in pursuance of a general contract. The very appropriation of the c liattel is equivalent to delivery by the vendor, and the assent of the vendee to take the specific chattel, and to pay the price is equivalent to his accepting possession. The effect of the contract, therefore, is to vest the property in the bargainee.” 3 Delivery is also spoken of as the correlative to the “ actual receipt ” necessary to give validity to a parol contract for the sale of chattels of the value of £10 or upwards by virtue of 17th section of the Statute of Frauds. 4 Delivery, so far as it need be considered here, is of two kinds : I. Delivery to the carrier for the purposes of the carriage. 5 II. Delivery by the carrier when the carriage has been completed. It is only between these periods that the special liability of the common carrier exists, commencing so soon as the common carrier has possession of goods for the purpose of carriage and terminating when his duty to deliver them on the completion of the transit has been discharged. Generally speaking, slighter evidence is sufficient to charge the carrier on delivery to him than is required to discharge him when he is to make delivery on the completion of the transit. I. Delivery to the carrier. In one sense it is the reward that renders the carrier liable. As Sir Edward Coke, says, the carrier “ hath his hire, and thereby implicitly undertaketh the safe delivery of the goods delivered to him.” 6 This, as we have seen, 7 must not be construed that unless a reward is fixed 1 Sale of Goods Act, 1893 (56 & 57 Viet. c. 71), part iii., ss. 27-37, where the statu- tory rules as to delivery are set out. By s. 02 “ Delivery ” means voluntary transfer of possession from one person to another. Cp. Pollock, On Possession, 43-40, 57-77 ; 2 Kent, Comm. 490-509 ; 2 Parsons, Contracts (8th ed.), 175-203. 2 5 B. & Ad. 340. 3 Cp. lleilbult v. Ilickson, L. R. 7 C. P. 438, 450 ; Kemp v. Falk, 7 App. Cas. 573, 580. Fragano v. Long, 4 B. & C. 219 ; also note 28 R. R. 220, of the subsequent cases. Willis, Contract of Sale, 38. •i 29 Car. II. c. 3, s. 17, is repealed by the Sale of Goods Act, 1893 (50 & 57 Viet, c. 71), sclied. ; s. 4, re-enacts it with some amendments. What constitutes acceptance under the statute is considered in Page v. Morgan, 15 Q. B. I). 228, and Taylor v. Smith, [1893J 2 Q. B. 05. Another aspect of delivery is to be found in M /niton v. Moore, 7 T. R. 07 ; Goodall v. Skelton, 2 H. Bl. 310, where in a note cases on delivery are grouped in three classes — (1) What delivery is sufficient to complete the contract, so as to pass the property to the purchaser. (2) What delivery is sufficient to defeat the right of stoppage in transitu. (3) What delivery is sufficient to constitute an acceptance of goods under the Statute of Frauds, llibbert v. Carter, I T. R. 745. Benjamin, On Sale (4th ed.), 076-765; Grice v. Richardson, 3 App. Cas. 319; Wcyand v. Atchison, <0c. Ry. Co., 9 Am. St. R. 504 ; and a note at 51 1, “ To whom carrier may lawfully deliver property.” For Place of Delivery, see 2 Kent, Comm. 505. 5 50 & 57 Viet c 7) , s. 32. Delivery of goods to the carrier is primd foci' a delivery of goods to the buyer. fi Co. Lift. 89 a ; Dalston v. Janson, 1 Ld. Raym. 58. « Ante, 763 n. 2, 875. CHAP. II.] COMMON CARRIERS. 899 beforehand the carrier is not liable. The public profession of the A common carrier and acceptance of the goods for carriage will create the duty to bou' 'lc/ to carry them in accordance with his profession. Hence, with equal receive and accuracy it may be said that the carrier is liable by reason of his pro- carry all fession, or by reason of the reward ; 1 because the law implies the reward from the exercise of the profession. The carrier must carry for limits of his a reasonable amount ; and if the person desiring his goods to be carried profession avers and proves his readiness to pay a reasonable sum for the carriage, ^mn'for no actual tender of the money is needed. 2 Neither is it necessary that reasonable the compensation should be a fixed sum. It is sufficient if it be in the reward, nature of a quantum meruit enuring to the benefit of the carrier. 3 The acts to be done by both parties— namely, the receipt of the goods and the payment of a reasonable sum for their carriage — are contempo- raneous acts, the carrier being bound to receive the goods on the money being paid or tendered, and the bailor to pay the reasonable amount demanded on the carrier’s taking charge of the goods ; and the case of Rawson v. Johnson 4 clearly shows that, “ whenever a duty is cast on a party in consequence of a contemporaneous act of payment to be done by another, it is sufficient if the latter pay, or be ready to pay, the money, when the other is ready to undertake the duty.” 5 As soon as goods are accepted for the purpose of carriage, the When liability of a common carrier attaches. He may in some cases receive l iab dity goods to warehouse preparatory to the transit ; as he often holds goods as warehouseman after the completion of the transit. The test question Test, in these cases is whether the goods are received for deposit in the custody of the carrier as a mere accessory to the carriage — or whether they are in his possession for some independent purpose. In the former case the carrier is liable as common carrier ; in the latter, only as bailee for hire. 6 The carrier may also give notice, where the goods to be forwarded are within the Carriers Act, 1830, that he will not be responsible for loss unless an additional sum is paid. If the owner refuses this payment, yet leaves the goods, the liability of the bailee is that of a Bailee for hire, 7 and not that of a common carrier. If he makes the payment the liability becomes that of a common carrier. The carrier is only bound to convey goods he has room for in his What carriage, 8 and which he can carry with security, 9 and holds himself out q IS 1 Crouch v. O. N. By. Co., 11 Ex. 742; New Jersey Steam Navigation Co. v. carry. Merchants' Bank, 6 How. (U. S.) 344. 2 Pickford v. Grand Junction Ry. Co., 9 Dowl. (Prac. Cas.), 766 ; G. W. By. Co. v. Sutton, L. R. 4 H. L., per Blackburn, J., 237. 3 Citizens' Bank v. Nantucket Co., 2 Story (U. S.), 16. This case is valuable on account of an exceedingly elaborate considered judgment of Story, J., on the nature and extent of the obligations of common carriers. 4 1 East, 203 ; Lewi v. Herbert, 7 Taunt. 314; Waterhouse v. Skinner, 2 B. & P. 447. 5 Per Parke, B., Pickford v. Grand Junction Canal Co., 8 M. & W. 378. 6 Having v. Todd, 1 Stark. (N. P.) 72 (see the remark on this case and on Ross v. Johnson, 5 Burr. 2825, where Lord Mansfield, C.J., is reported as saying, “ It is im- possible to make a distinction between a wharfinger and a common carrier. They both receive the goods upon a contract. Every case against a carrier is like the same case against a wharfinger,” in 2 Kent, Comm. 600 n. (a) ) ; Hyde v. Trent Navigation Co., 5 T. R. 389; Roskell v. Waterhouse, 2 Stark. (N. P.) 461 ; Camden Rd. Co. v. Belknap, 21 Wend. (N. Y.) 354. Ante, 836. i Wyld v. Pickford, 8 M. & W. 443. See per Parke, B., Fowles v. G. W. Ry. Co., 7 Ex. 699. 8 Per Best, C.J., Riley v. Horne, 5 Bing. 224. Ex parte Robins, 7 Dowl. (Prac. Cas.) 566 ; Jackson v. Rogers, 2 Show. (K. B.) 327. s Edivards v. Sherratt, 1 East, 604, where Lord Kenyon, C. J., said : “ All the circum- stances and urgency of the case should have been disclosed to the boatman at the time. 900 NEGLIGENCE IN LAW. [book V. What constitutes delivery. Delivery a question of fact. to carry . 1 In case of dispute, the onus probandi is on the plaintiff to establish that the person sought to be charged by him is a common carrier on the ground that the goods conveyed by him are within the true nature and extent of the business in which he holds himself out to the public as engaged . 1 Yet the carrier is not in every case bound to receive goods tendered to him for carriage even when his profession is to carry goods of the description tendered. A condition is super- added that the goods tendered to him must be fit to be carried in the ordinary course of business ; and, if they are not in a fit condition with reference to the ordinary requirements of business, the carrier has an absolute right to refuse them until they are tendered to him in suitable condition . 2 The principle of what constitutes delivery to a carrier is thus stated in a work of authority : 3 “ While it is the undoubted general rule that the delivery, to bind the carrier, must be made either to him, or to some one with authority from him, or who may be rightly presumed to have such authority , 4 it is not to be understood that it is not subject to such conventional arrangements between the parties as they may choose to make in regard to the mode of delivery, or that it may not be varied by usage or by a particular course of dealing between them. ... If, therefore, the parties agree that the goods may be deposited for transportation at any particular place, and without any express notice to the carrier, such notice will be a sufficient delivery ; and proof of a constant and habitual practice and usage of the carrier to receive the goods when they are deposited for him in a particular place, without special notice of such deposit, is sufficient to show a public offer by the carrier to receive goods in that mode, and to con- stitute an agreement between the parties, by which the goods when so deposited shall be considered as delivered to him without any further notice. Such a practice and usage are tantamount to an open declaration, a public advertisement, by the carrier that such a delivery should, of itself, be deemed an acceptance by him ; and to permit him to set up, against those who have been thereby induced to omit it, the want of the formality of an express notice, which had been thus waived, would be sanctioning injustice and fraud.” Then comes the question on whose account is delivery to the carrier made — on behalf of consignor or consignee ? As a general rule, delivery by the consignor to the carrier is a delivery to the consignee, who afterwards is held to take the risks of the carriage. If the carrier is indicated by the consignee, he then becomes the consignee’s special agent. But if the consignor undertakes to deliver at an appointed place till the goods are delivered there, they are at the risk of the consignor. Which is the actual state of facts in any particular trans- action is matter for the jury to find . 5 and lie should have been asked whether he chose to undertake the risk. Common honesty would have suggested this. For no man in his senses would, under these circum- stances, have taken the corn under a liability as a common carrier.” 1 Citizens' Bank v. Nantucket Co., 2 Story (U. S.) 10; Johnson v. Midland Iiy. Co., 4 Ex., per Parke. B., 371. 2 Keddie v. North British By. Co., 24 Sc. L. R. 173. 3 Hutchinson, Carriers, § 90. * Colepepper v. Good, 5 C. & P. 380 ; Gilbarl v. Dale, 5 A. & E. 543 ; Camden Rd. Co. v. Belknap, 21 Wend. (N. Y.) 354. 5 Dunlop v. Lambert, 0 Cl. & F. 000. As to right of consignees to whom goods are addressed to have delivery, Cork Distilleries Co. v. Great Southern and Western By. Co., L. R. 7 H. L. 209. As to delivery to consignees without payment of freight, consignor remaining liable, G. IF. By. Co. v. Baggc, 15 Q. B. D. 025. COMMON CARRIERS. 901 CHAP. II.] Where goods have passed from the possession of one to that of another person in course of transmission, the test seems to be whether the parties sought to be charged have themselves or through their agents assumed the charge and custody of the goods . 1 This, too, is a question of fact. In the case of a warehouseman, Lord Ellenborough, C.J., in summing up to the jury, said : “ The whole question turned Thomas v. upon the single point of, when the warehouseman’s liability commenced Day ' and the agency of the carman ended ? for until the goods were delivered to the warehouseman, the carman was to be considered as the agent of the person sending them ; but when the warehouseman took them into his own hands, the moment the warehouseman applied his tackle to them, from that moment the carman’s liability commenced [qu. ceased].” 2 Where the goods are placed in the carrier’s conveyance without the Facts knowledge or assent of himself or his agents, there is, of course, no floating delivery . 3 It has been held, too, that leaving goods in an inn-yard from whence a carrier sets out is not in law a delivery to the carrier . 4 The jury have to find the facts, and say whether they amount to a taking in charge (of which the circumstances are as many as the cases) 5 and which imports the commencement of the carrier’s liability. The implication is that the delivery is for the purpose of immediate trans- portation. If the carrier for his own purposes puts the goods into his warehouse, his liability is still that of carrier. Where, however, the transit is delayed to enable the consignor to give orders as to the destination, or in any other way for the convenience of the owner, during the time of such delay the liability is not that of a common carrier, but of a warehouseman only. The exact relation is very seldom a matter of specific arrangement between the parties, but is rather a growth from the circumstances. What is the extent of responsibility is dependent on findings of fact, which often are very indefinite, though the governing principles are easily ascertainable . 6 It is further certain that “ goods ought to be plainly and legibly Goods marked, so that the owner or consignee may be easily known ; and if should be in consequence of omitting to do it, without any fault on the part of the mar carrier, the owner sustain a loss, or any inconvenience, he must impute this to his own fault.” 7 In an American case, Finn v. Western Rd. Corporation , 8 it is said : “A Finn v. consignor who neglects to give proper directions for the transmission Western Rd. of his goods, has no right to expect that the carrier will take the re- Cor P matwn - sponsibilit.y of investigating the history of his business in order to ascertain his probable intentions in regard to the particular consign- ment. The carrier has the right to wait and hold the goods on storage 1 Story, Bail m. § 453 ; Harris v. Packwood, 3 Taunt. 264 ; Boehm v. Combe, 2 M. & S. 172 ; Brind v. Dale , 8 C. & P. 207. 2 Thomas v. Day, 4 Esp. (X. P.) 262. Ante, 827. See Roskell v. Waterhouse, 2 Stark. (N. P.) 461 ; Randleson v. Murray, 8 A. & E. 109 ; Story, Bailm. § 536. 3 Lovett v. Hobbs, 2 Show. (K. B.) 127 ; Leigh v. Smith, 1 C. & P. 638. 4 Selivay v. Holloway, 1 Ld. Raym. 46. 5 Boys v. Pink, 8 C. & P. 361 ; Davey v. Mason, Car. & M. 45. An inn where parcels were deposited without express authority was held a receiving-house of the defendants, in Syms v. Chaplin, 5 A. & E. 634. Where goods were delivered at a wharf to an unknown person there, and no knowledge of the fact was brought home to the wharfinger or his agents, it was held no delivery : Buckman v. Levi, 3 Camp. 414. A delivery to a recognised servant is sufficient, as to the mate of a ship : Cobban v. Downe, 5 Esp. (N. P.) 41. 6 Story, Bailm. § 535; Redfield, Carriers, §§ 95-102; Judson v. Western Rd. Corporation, 86 Mass. 520. 7 Per Ware, J., The Huntress, Daveis (U. S. Aim..), 82, 92. s 102 Mass. 290. Bradley v. Dunipace. Goods imperfectly addressed. Effect of delivery to the carrier s s between con- signor and consignee. II. Delivery by the carrier. Within what time. Golden v. Manning. 902 NEGLIGENCE IN LAW. [book v. until he receives the proper directions, before he undertakes the severe obligations of that service.” In Bradley v. Dunipace, 1 in the Exchequer Chamber, a shipping case, the master was held liable for the wrong delivery of sacks of rye-meal, for which he had given bills of lading, and which were not so marked as to be properly discriminated. But Bradley v. Dunipace was not a case where the carrier hesitated to assume the responsibility ; for there can be no doubt that a delivery imperfect through defective numbering or addressing of the goods would be sufficient to justify him abstaining from conveying the goods as carrier. The question in that case more particularly was, What was the contract he entered into ? He was held liable because that contract was unperformed. It seems to follow that where a carrier has received goods imperfectly addressed, he thereby, in the absence of any fraud or concealment, undertakes to carry them on the carrier’s ordinary terms. In the event of his carrying them, the American case already quoted decides that : “ The carrier is entitled to have some authority or direction from the consignor himself to justify his delivery to another. If none such accompanies the goods, he is not bound to take the risk of delivery to any one who does not produce evidence of his title or authority from the consignor.” 2 While on this point the effect of delivery to the carrier as between consignor and consignee may be stated in the words of Lord Alvanley, C.J., in Dutton v. Solomonson : 3 “ If a tradesman order goods to be sent by a carrier, though he does not name any part : cular carrier, the moment the goods are delivered to the carrier it operates as a delivery to the purchaser ; the whole property immediately vests in him ; he alone can bring an action for any injury done to the goods ; and if any accident happen to the goods it is at his risk.” 4 II. Delivery by the carrier. When goods are arrived at their destination the common carrier has a further duty to deliver. Th : s duty is asserted so far back as the 38th Eliz., 5 where Popham, C.J., lays down that “ carriers are paid for their carriage, and take upon themselves safely to carry and deliver the things received.” As to what the nature of this delivery is, whether it is to be merely at or by the premises of the consignee, or on them and to him, has been sometimes a matter of discussion. In Golden v. Manning 6 where goods were received by the defendants who had a porter to carry out goods, it was held by the Court that the defendants’ 1 1 H. & C. 521. 2 102 Mass. 291. Three New Hampshire eases should be consulted on this : Stimson v. Jackson, 58 N. H. 138, on the duty of the tarrier when goods are wrongly addressed; First National Bank of Peoria v. Northern ltd., 58 N. H. 203, on delivery without production of the bill of lading; Converse v. Boston <(.- Maine, lid., 58 N. H. 521, on ratification of unauthorised delivery. As to failure to receive goods through a strike, see Pittsburg, ” says Story, 3 “ the opinions of other distinguished judges have settled down in favour of the three judges against him ; and Kent 4 says : “ The actual delivery to the proper person is generally conceded to be the duty of the carrier.” I he case of Storr v. Crowley 5 is similar in its facts to Golden v. Manning, and, like that case, was decided on the narrowest basis possible. Crarrow, B., however, says in his judgment : 7 “ According to the usual course of transactions, such as the present, it seems to me that the person who undertakes to carry an article from one individual to another does so in consideration of a reward to deliver it at the house of that individual. With regard to presents in particular that must be the case, because commonly no notice is given to the party tor whom they are intended.” 1° the same effect are the observations of Ware, J., in The Huntress. 1 Among the obligations which common carriers take upon themselves as resulting from the nature of their employment S “ 154 "• s - <« sss 's~ laid down. Rowe v. Ptckford, 8 Taunt. 83, was the case of a consignee of “ods sent by a common carrier to London, who, having no warehouse of Ws own 8 was eSr^the XiThei? 6 K t 0 |? d 7 n ^ Wagg ° n ’ office or warehouse of the common an ’ i Yu 1 , d ’ Wlth reference to stoppage in transitu, that the transit was at Taunt If 1 the g0 ° dS W6re re ° eived and P la “ d the warehouse. In Cr Webb 8 that when theT° n Car ™ r3 a g reed carry wool from London to Fromc, st puktin" litLYt?7 , C0I ! SIgneeS had " ot room in their °wn store to receive it, the carriers” thouadd.Uonal charge, would retain it in their own warehouse until the consignor was ready to receive it. Wool thus carried and placed in the carrier’s warehouse was destroyed by an accidental fire. The Court held them to hold tLsHoods no^as ™t£ Ut as warehousemen, and so not to be liable ; “ for this is a loss which would then? a = them f S ° amers ‘hey were acting in that character, but would not fall on F ■ , warehousemen, if they were acting in the character of warehousemen ” Cn KSv'SSs 17 Y ' & hddThat PPmg ^ an inteni ? ediate station ; while waiting for him it was burned''"'!! was held that a common carrier’s liability did not exist where the luggage was™ the hZdl InsuraMcTuKmel L ^eEhTcas ^ °h " R ^‘ Manne Wh ?;‘£2rSf Pla0ed ° n qUay and until deliverLlT^ S 3 W„ (C .P.) 429 . 7 5 fig! f ? e 13 & 7 Y - 12 19 Dunlop, 461. 7 8 & 9 Viet. c. 83, s. 101. 8 10 Times L. R. 13 (C. A.). COMMON CARRIERS BY LAND. 955 CHAP. III.] had not the same amount of duty to them as they had to persons who paid them money in consideration of being carried as passengers. But, so far as regarded the taking of means for providing for personal safety, it was impossible to measure the difference between their duty to the one class of persons and their duty to the other. In short, it was their duty to take reasonable care with regard to both. The defendants, therefore, owed the plaintiff the duty to take reasonable care not to do anything to endanger his personal safety. . . . The allowing the door of the guard’s van to remain open in such a way that it swept the plaintiff down while he was standing on the platform was clearly a failure on the part of the defendants’ servants to take such reasonable care as it was their duty, to take.” Of course the fact of a person being a trespasser does not authorise Rounds v. brutal conduct or wilful injury of any kind ; as was said in Rounds v. ^} a ^, are Delaware Rd. Co . 1 — a case where a boy trespassed on a railway car : “ The fact that the plaintiff was a trespasser on the cars is not a defence. The lad did not forfeit his life, or subject himself to the loss of his limbs, because he was wrongfully on the car. The defendant owed him no duty of care by reason of any special relation assumed or existing between the company and him, but he was entitled to be protected against unnecessary injury by the defendant or its servants in exer- cising the right of removing him, and especially from the unnecessary and unjustifiable act of the brakeman by which his life was put in peril, and which resulted in his losing his limb.” The boy was kicked off the car. If a passenger has got into the wrong train through his own lack of Passenger in care he must qualify himself by payment of the fare to entitle himself wrong train, to ride in the train. If he is unwilling to do this he may be lawfully put off at any convenient and safe place and without unnecessary force. If the passenger has got into the wrong train through the negligence of the company’s servant he may insist to ride thereon in pursuance of his contract, and if put off may recover damages for his ejection ; or he may claim to be conveyed to the place to which he designed to go. Where the carrier has undertaken, or is compelled by law, to Statutory carry a passenger, the consideration of whether the passenger paid or passengers, was carried free is altogether irrelevant. In Collett v. L. & N. W. Ry. Co ., 2 a post-office officer was injured Collett v. while travelling on the defendants’ line in the execution of postal duty, ^ N - w - which by statute he was authorised to do free of charge. The Court of KlJ ' °' Queen’s Bench held the company liable, Lord Campbell, C. J., saying : 3 “ That it was the duty of the company to use due and proper care and skill in conveying is admitted. That duty does not arise in respect of any contract between the company and the persons conveyed by them, but it is one Which the law imposes ; if they are bound to carry, they 1 64 N. Y. 129, 138. This decision would equally have been arrived at in England. Some of the American text-writers, e.g. Thompson, Negligence, § 3188, labour under the impression that the rule there laid down is identical with that in the ludicrous case of Croaker (or Craker) v. Chicago & N. W.. Rd. Co., 17 Am. R. 504. The English case involving the same principle — a wholly distinct one — is Limpus v. London General Omnibus Co., 1 H. & C. 526 ; Schultz v. Third Avenue Rd. Co., 89 N. Y. 242. See Delamj v. Dublin United Tramways Co., 30 L. R. Ir. 725. This case is examined, ante, 146. 2 (1851) 16 Q. B. 984. 3 L.c. 989. Lord Campbell’s expression, “ if they are hound to carry they are bound to carry safely,” is explained by Lord Halsbury, C., East Indian Ry. Co. v. Kalidas Mukerjee, [1901] A. C. 402. 956 NEGLIGENCE IN LAW. [book v. are bound to carry safely ; it is not sufficient for them to bring merely the dead body to the end of the journey.” 1 Passengers by The year following the same rule was accepted by the Supreme invitation. Philadelphia and Reading R Id. Co. v. Derby. Court of the United States in Philadelphia and Reading Rd. Co. v. Derby. 2 The language of the judgment is most comprehensive : 3 “ If one be lawfully on the street or highway, and another’s servant carelessly drives a stage or carriage against him, and injures his pro- perty or person, it is no answer to an action against the master for such injury, either that the plaintiff was riding for pleasure, or that he was a stockholder in the road, or that he had not paid his toll, or that he was the guest of the defendant, or riding in a carriage borrowed from him, or that the defendant was the friend, benefactor, or brother of the plaintiff.” “ If the plaintiff was lawfully on the road at the time of the collision, the Court were right in instructing the jury that none of the antecedent circumstances or accidents of his situation could affect his right to recover.” The plaintiff was a stockholder in the company, riding by invitation of the president, paying no fare, and not in the usual passenger cars. The American law is settled on the basis that common carriers have public duties to discharge, from which they are not able to exonerate themselves even with the consent of their customers ; and that special contracts made by them with their customers are good and valid to the extent only of excusing them, for example, for all losses happening by accident without any negligence or fraud on their part ; but that an exemption from liability for negligence is repugnant to the law of their constitution and the public good, and consequently inoperative. These principles are applied both to carriers of goods and carriers of passengers. Thus, where a drover travelling with cattle had signed an agreement “ to take all risk of injury to them and of personal injury to himself,” and was injured through the negligence of the company’s servants, the Supreme Court of the United States held the stipulation void, and that he was entitled to recover for his injuries from the company. 4 Contradictory The year previously to this decision the Queen’s Bench decided a decision m very similar case in the opposite way. McCawley v. Furness Ry. Co. 5 M*c' Xn ‘r was decided on demurrer. The plaintiff, who travelled on defendants’ Furness line as a cattle-drover, declared on a contract to be safely and. securely American law based on the considera- tion that carriers have public duties to discharge. Exception of company’s negligence void. I'd- C°- l Ross v. Hill, 2 C. B. 877. In Grand Trunk, dec. Rd. Co. v. Richardson, 91 U. S. (1 Otto) 454, 471, Bains v. Rd. Co., 42 Vt. 380, is approved, where it is said “ that a rail- road company in the discharge of its duties, and in the exercise of its right to protect its property from injury to which it is exposed by the unlawful act or neglect of another, is bound to use ordinary care to avoid injury even to a trespasser.” For what is signified by “ ordinary care,” see ante 28 and 750. 2 14 How. (U. S.) 468. In Steamboat New World Co. v. King, 16 How (U. S.) 474, Grier, J., alluding to the decision, says : “ We desire to be understood to reaffirm that doctrine, as resting not only on public policy, but on sound principles of law.” 3 14 How. (U. S.) 485. 4 Railroad Co. v. Lockwood, (1873) 17 Wall. (U. S.) 357 ; Hart v. Pennsylvania Rd. Co., 112 U. S. (5 Davis) 331. It is there laid down that the test applicable to every limitation of the common law liability of a carrier, is its just and reasonable character. “ In Great Britain a statute directs this test to be applied by the courts. The same rule is the proper one to bo applied in this country in the absence of any statute,” l.c. 342. For the responsibility of a railway company to strangers, see Reary v. Louisville, dec. Ry. Co., 40 La. Ann. 32, 8 Am. St. R. 497 ; but where the drover gets in an improper place : Little Rock, dec. Ry. v. Miles, 48 Am. R. 1 0. In England an agreement of the kind referred to in the text is invalid when made with an infant: Flower v. L. <£• N. W. Ry. Co., [1894] 2 Q. B. 65. Ante, 725. »• ww • ip* s (1872), L. R. 8 Q. B. 57. In \Duffv. G. N. Ry. Co., 4 L. R. lr. 178, the drover signed the conditions. As to the position of a passenger, taking a ticket by a goods 957 chap, hi.] COMMON CARRIERS BY LAND. carried. The defendants pleaded a contract “ to carry under a free pass ” “ whereby it was, amongst other things, provided that any drover accompanying cattle ” “ should travel at his own risk.” The replication set up “ gross and wilful negligence and mismanagement of defendants.” To this there was a demurrer. The Court held that the plaintiff could not recover. Blackburn, J., puts the law most judgment of clearly : “ The duty of a carrier of passengers is to take reasonable care Blackburn, J. of a passenger, so as not to expose him to danger, and if they negligently expose him to danger, and he is killed, they might be guilty of man- slaughter, and they would certainly be liable to the relatives of the deceased in damages. But here the passenger was carried under special terms ; that agreement would not take away any liability that might be incurred as to criminal proceedings, but it regulates the right of the plaintiff to recover damages. The plea states that it was agreed that the plaintiff, being a drover travelling with cattle, should travel at his own risk ; that is, he takes his chance, and, as far as having a right to recover damages, he shall not bring an action against the company for anything that may happen in the course of the carriage. It would, of course, be quite a different thing were an action brought for an independent wrong, such as an assault or false imprisonment. Negligence in almost all instances would be the act of the company’s servants, and ‘ at his own risk ’ would of course exclude that, and gross negligence would be within the terms of the agreement ; as to wilful, I am at a loss to say what that means ; but any negligence for which the company would be liable (confined, as I have said, to the journey — and it is so confined by the declaration) is excluded by the agreement.” 1 In Gallin v. L. & N. W. Ry. Co ., 2 the principle of this decision was Oallin v. held applicable to negligence incidental to the actual conveyance, and ^ arising from defect in arrangements made for the purpose of conducing y ’ Co ’ to its effective fulfilment. There a drover, carried on terms identical with those in M' Cawley? s case, got out of the van in which he was being carried on a stoppage occurring, and, in walking from the spot where the train stopped along the railway to the passenger station, fell over a bridge into a river and was injured. He was held not entitled to recover, since the terms on which he was travelling “ at his own risk ” covered not only the direct, but the incidental perils of the transit. Mellor, J., was of opinion that the words “travel at his own risk include, as in Hodgman v. West Midland Ry. Co ., 3 all the incidents connected with the journey.” “ All those risks which result or arise during the transit, and until the transit is actually at an end, are intended to be guarded against, and are actually guarded against, by those words.” 4 train with a condition that the company should be freed from responsibility, and who was injured through the cariiage in which he was carried stopping short of the platform, see Johnson v. Great Southern and Western Ry. Co., Ir. R. 9 C. L. 108 ; Peter- son v. Seattle Traction Co., [1901] 23 Wash. 615, holds such a contract between a car company and their labourers to be good. i The Stella, [1900] P. 161. As to what is necessary in order to except misconduct or default of the carrier’s own servants, see per Bowen, L.J., Steinman <0 Co. v. Angier Line, [1891] 1 Q. B. 623 ; Price v. Union Lighterage Co., [1904] 1 K. B. 412 ; followed in James Nelson & Sonsv. Ne’son Line (No. 2), [1907] 1 K. B. 769 : The Pearlmoor, [1904] P. 286. 2 L. R. 10 Q. B. 212. 3 5 B. & S. 173, in Ex. Ch. 6 B. & S. 560, the case of a horse injured before fully received by the carrier. * On the authority of these cases the Victorian case of M' Donald v. Victorian Railways Commissioners, 13 V. L. R. 399, was decided. Knox v. G. N. Ry. Co., [1896] 2 I. R. 632. 958 NEGLIGENCE IN LAW. Opinion of Bramwell, B. Duties of passengers irrespective of class. Indianapolis, should be entered for the defendants. To the objection that the reasonable ^ conditions imposed on a person might be unreasonable, his answer notice not a was : 2 “I think there is an implied understanding that there is no matter of fact condition unreasonable to the knowledge of the party tendering the 111 0 S. C. By. Co. Hari v. Lancs. <£• Y. By. Co. Contended that coaling an engine is dangerous work. Subsequent precaution not necessarily evidence of an tecedent neglect. 97G NEGLIGENCE TN LAW. [book v. persons coming on the platform, accidents might occur.” The jury found for the plaintiff. The Court of Exchequer entered the verdict for the defendant. Bramwell, B., said : 1 “I think that all the in- gredients to make out a case of negligence against the Company exist, except that proof is wanting that the mischief which happened is one which could have been foreseen. In such a case it is always a question whether the mischief could have been reasonably foreseen. Nothing is so easy as to be wise after the event. But here no witness stated that he would have known that the position of the weighing-machine was likely to cause danger. I adopt the rule stated by Williams, J., in Toomey v. The Brighton By. Co. : 2 ‘It is not enough to say that there was some evidence ; a scintilla of evidence, 3 or a mere surmise that there may have been negligence on the part of the defendants, clearly would not justify the judge in leaving the case to the jury ; there must be evidence on which they might reasonably and properly conclude that there was evidence.’ Here the evidence was that the company might reasonably have anticipated that no mischief could occur, since no mischief had resulted from keeping the machine in the position in which it stood for so long a period.” 4 Hart v. Lancs. & Y. Ry. Co. 5 also illustrates the duty of railway companies to their passengers in this respect. A pointsman having but an instant to decide what to do with a runaway engine (the man in charge of which, who was alone, had fallen down in a fit), turned it into a siding on which there was a train at rest, rather than allow it to meet an advancing express train. The plaintiff, who was in the train at rest, was injured, and sued the company for damages for negligence ; first, in not having two men on the engine while engaged in coaling, from which it was returning when the fit of the driver left it without guidance ; and, secondly, in having the points of the sidings so arranged that the engine must necessarily, in case of the driver being in- capacitated, pass on to the main line. The fact that an alteration had been made since the accident, so that a runaway engine would pass along a supplementary siding leading up to a “ dead end,” was urged as evidence of previous negligence. The contention as to the first point was that the work of coaling an engine was dangerous from an alleged liability of the men engaged in the work to become affected by the sulphurous vapour arising from the burning coal. In the absence of evidence, the Court refused to accept this, Kelly, C.B., remarking : “ Surely, it was never heard that sickness of any kind was ever produced by it. If, then, this be an operation usually conducted by one man anti without any ill results arising there- from, it would surely be a very strong thing to say that the not em- ploying two men to perform the operation was negligence on the part of the Company.” As to the second point, the Court held it to be most reasonable to hold the company negligent in not foreseeing that the plan which had been in use safely for twenty years would occasion an 1 L.c. 780. 2 Toomey v. L. B. & S. C. By. Co., 3 C. B. N. S. 146. Cp. Dublin, Wicklow, and Wexford By. Co. v. Slattery, 3 App. Cas. 1155. This case is not, however, within the rule thus enunciated ; for what the Court practically say is, that the evidence given was susceptible of either reading, and that could not affect the defendants with liability, since the plaintiff must give evidence that points to a conclusion of negligence. Ante, 11 9 et seqq. 3 Best, Evidence (10th ed.), 69. 4 Cp. Si urges v. G. IF. By. Co., 8 Times L. R. 231 (C. A.) ; Nicholson v. Lancs. tfc Y. By. Co., 34 L. J. Ex. 84 ; Jones v. Grand Trunk By. Co., 16 Out. App. 37. L b 21 L. T. (N. S.) 261. 977 chap, hi.] COMMON CARRIERS BY LAND. accident ; and the fact that, when they found that it had resulted in an accident they altered their method should even less be a circumstance going to fix them with liability. As Bramwell, B., said in his forcible way : “ People do not furnish evidence against themselves simply by adopting a new plan in order to prevent the recurrence of an accident. I think that a proposition to the contrary would be barbarous. It would be, as I have often had occasion to tell juries, to hold that, because the world gets wiser as it gets older, therefore it was foolish before.” 1 On the other hand, the fact of previous accidents at the same place, Significance in similar circumstances, may be given in evidence as tending to show that the attention of the parties responsible had been called to the position of things there, and that they had failed to provide proper means for providing against accident ; 2 while the making of repairs Repairs after after an accident, though inadmissible as evidence of antecedent accident, negligence, may yet be evidence in the nature of an admission that the duty to repair is on the person doing the repairs . 3 The consideration pointed out by Lindley, L. J., in Thomas v. Great Thomas v. Western Colliery Co ,, 4 must also not be forgotten. A particular kind Great Western of brattice cloth, well known to be inflammable, was kept for a long " tery °‘ period in proximity to an engine which emitted sparks, and no accident had happened. From this it was sought to argue absence of negligence. His Lordship refuted this contention by pointing out that “ long Observation immunity from accident did not prove absence of carelessness. It of J.mdley, might only prove long-continued habitual negligence ” ; and this was the conclusion actually drawn in the particular case before the Court. The Court held there was evidence of negligence where a passenger, Strip of ice walking by daylight up and down the platform of a station, was injured extending by slipping on a strip of ice extending half-way across the platform, and a platform of the presence of which no explanation was given . 5 1 L.c. 263. Two suggestions were thrown out in this case that may be noted. First, one by Bramwell, B., whether the pointsman, whose presence of mind saved a great catastrophe, was not liable in trespass, since his act was voluntary and wilful. As to this, see per Lord Macnaghten, Jenoure v. Delmege, [1891] A. C. 77, and ante, 157. And secondly, one by Cleasby, B., whether the company could be held responsible for an injury proximately caused by such an act of their servant done under such circum- stances. As to this, see Limpus v. London General Omnibus Co., 1 H. & C. 526, and ante, 581. Bramwell, B.’s, remark in the text is expanded in Diamond Match Co. v. New- haven, 3 Am. St. R. 70, 73, and cited with approbation as expressing also the rule in the United States in Columbia Rd. Co. v. Hawthorne, 144 U. S. (37 Davis) 202. The same principle was acted on in Sanitary Commissioners of Gibraltar v. Orfila, 15 App. Cas. 400, 413 ; G. W. Ry. Co. v. Davies, 39 L. T. (N. S.) 475. 2 District of Columbia v. Armes, 107 U. S. (17 Otto) 519, 526. 3 Readman v. Conway, 126 Mass. 374, explained Sliinners v. Proprietors of Locks and Canals, 154 Mass. 170 : “ For the same reason,” it is there said, “ the fact that a city makes repairs upon a highway after an accident thereon, has been held admissible to show an acceptance of the highway as dedicated.” The statement of the rule in Morse v. Minneapolis, &c. St. Louis Ry. Co., 30 Minn. 465, reproduced in Columbia Rd. Co. v. Hawthorne, 144 U. S. (37 Davis) 208, laying down that such evidence “ ought not to be admitted under any circumstances ” must therefore be qualified by the addition of some such words as “ for that purpose,” or their equivalent. * 10 Times L. R. 244 (C. A.). 5 Shepherd v. Midland Ry. Co., 25 L. T. (N. S.) 879. Cp. Crafter v. Metropolitan Ry. Co., L. R. 1 C. P. 300 — the case of brass nosing to steps of a railway station worn smooth ; Davis v. L. & B. Ry. Co., 2 F. & F. 588 — it is not enough to show improper condition of station if accident not caused thereby ; Rigg v. Manchester, Sheffield, and Lincolnshire Ry. Co., 14 W. R. 834 — the opinion of witnesses that a platform is dangerous no evidence of it ; Longmore v. G. W. Ry. Co., 19 C. B. N. S. 183 — faulty construction of bridge. 978 NEGLIGENCE IN LAW. [book V. W ithera v. North Kent Ry. Co. Questions of engineering skill not for a jury unless with specific directions. Tuttle v. Detroit, Grand Haven, and M ilwaukee Ry. Again, in Withers v. North Kent Ry. Co ., 1 an accident happened through the bad condition of an embankment, made five years pre- viously, through a marshy country subject to floods, after an extra- ordinary storm, accompanied for sixteen hours with very violent rain which washed away the soil of the embankment, leaving the “ sleepers ” of the railway unsupported, so that the embankment gave way as the ordinary express train went over them. The negligence alleged was, first, the construction of a line “ on a low embankment composed of a sandy sort of soil likely to be washed away by water, and that the culverts were insufficient to carry off the water ” ; 2 and, secondly, the rate of speed at which the train was going at the time. The jury found for the plaintiff, with heavy damages, but the Court directed a new trial. As to the first point, “ the line had lasted five years in a country subject to floods, and it does not appear that there had been any accident or objection to its construction until this extraordinary flood occurred. The company were not bound to have a line constructed so as to meet such extraordinary floods.” As to the second, the speed “ was the ordinary express train speed, and there had been nothing to indicate there would be danger in continuing it.” 3 In none of these cases was the state of circumstances revealed by a subsequent accident considered sufficient to warrant the inference of a negligent inefficiency. They rather point to the conclusion that, if apart from the accident a presumption could have been reasonably drawn against the suitability of the provision made, the defendants in each case would have been liable. The ground for imputing liability is not what a reasonably prudent man would conclude, with the fact of an accident having arisen to direct his judgment, but what a reason- ably prudent man would conclude as to the likelihood of an accident occurring, apart altogether from the fact of its occurrence. Where questions of engineering skill are involved, it is obvious that a jury is no fit tribunal to decide them. The rule to be adopted in such cases is similar to that observed in the case of actions for negligence against solicitors or medical men. The judge has to define the circum- stances, and it is for the jury to determine whether their existence in the case before them has been proved . 4 In Tuttle v. Detroit, Grand Haven and Milwaukee Ry . 5 the accident sued on was alleged to have arisen by reason of a particularly sharp curve in one of the defendants’ yards. Liability was negatived on the ground of the plaintiff’s acquaintance with the appliances amongst which his work lay ; but the Court added : 6 “It appears that the curve was a very sharp one at the place where the accident happened, yet we do not think that public policy requires the courts to lay down any rule of law to restrict a railroad company as to the curves it shall use in its freight depots and yards, where the safety of passengers and the public is not involved ; much less that it should be left to the varying and uncertain opinions of juries to determine such an engineering question.” 7 From which expression of opinion we may gather that, in the opinion of the Court, in no case is the determination of an engineering question for the jury, at least without specific directions ; i 27 L. J. Ex. 417. This case and Ruck v. Williams, IT. & N. 308, arc com- mented on in G. W. Ry. Co. of Canada v. Braid, 1 Moo. P. C. (N. S.) 101. 3 This evidence was objected to, as not relevant to the case laid in the declaration, but it was admitted. 3 Per Pollock, C.B., 27 L. J. Ex. 418. 4 Hunter v. Caldwell, 10 Q. B. 69. 6 122 U. S. (16 Davis)[189. « Z/.c., per Bradley, J., 194. 7 Ante, 10. COMMON CARRIERS BY LAND. 979 CHAP. III.] and, secondly, that in those portions of a railway system which are open for passengers, or in immediate connection with which they may be placed, a more stringent rule must be adopted than applies to those portions where those alone who are engaged in the working of the line may be expected to resort. As, then, the standard of care and duty is variable the amount is not Standard of to be fixed by reference to the conduct of other railway companies in onc the vicinity, and certainly not by their usual conduct ; for an agreement, express or tacit, amongst railway companies can in no circumstances be held to jeopardise the safety of the passenger . 1 As it was said in Metzgar v. Chicago, Milwaukee, &c. Rg. Co. : 2 “A fault is none the less a fault because it is common.” While a railway company is not allowed with immunity to lag Railway behind the standard of safety generally held requisite, on the other hand, company may it is not permitted, without responsibility, to introduce untried novelties. ™ en t*}qth' That which has been approved as safe by experience may, of course, the safety of be adopted. Where, however, the consequences of any defect develop- their ing in untried machinery or agencies would be the exposing human life P rlS!,en g CIS - to hazard, .it devolves on those making an experiment which turns out badly to show that they have followed such a course as the rules of science or mechanics applicable to the matter in hand warranted them regarding as safe according to ordinary probabilities. They must themselves assume the risk of their experiments resulting in failure, and they are not permitted to shift the consequences on their passengers or employes . 3 The duty of railway companies to provide means of alighting for Duty to their passengers has been the subject of a series of decisions , 4 in the provide^ course of which many fine distinctions have been drawn. Though it a ijcrhti,ig. has never in terms been decided that it is the duty of a railway company 1 Grand Trunk lid. Go. v. Richardson, 91 U. S. (1 Otto) 454. Cp. Wisely v. Aberdeen Harbour Commissioners, (1887) 14 Rettie, 445. 2 14 Am. St. R. 224, 225, referring to Hamilton v. The Des Moines Valley Rd. Co., 36 Iowa, 31, where it is said, at 38 : “ If, because an act is usual and common, it ceases to be negligent, it follows that the sure way of escaping liability for injuries to persons and property, in cases of this character, would be to adopt a certain and uniform system of common negligence.” 3 Marshall v. Widdicomb Furniture Co., 11 Am. St. R. 573. 4 In Geirk v. Connolly, 13 V. L. R. (Law) 446, the Supreme Court of Victoria held that where a carrier of passengers had stopped at an ordinary stopping place at the request of certain passengers to enable them alight, he was liable to one who had given him no intimation of her wish to alight for driving on while she was in the act of alighting, and thereby causing her injury ; since it was his duty, before going on, to ascertain whether all had alighted who had wished to do so. In Louisville and Nash- ville Rd. Co. v.fiCrunlc, 12 Am. St. R. 443, it was held that where a railway company has issued a ticket to an invalid with knowledge that he is too feeble to walk, his assistants who carry him into the train have a reasonable time to leave the train, just as if they were passengers, even though they voluntarily offered their services to carry the passenger. In a note to this case are collected the decisions on what is sufficient time to alight. While a passenger is leaving a steamer for a lawful purpose and is on the premises of the steamboat company, the same degree of care is exacted from the company as is required while the passenger is on the boat : Dodge v. Boston and Bangor Steamship Co., 148 Mass. 207. In Evansville, dkc. Rd. Co. v. Duncan, 92 Am. Dec. 322, the Court, in speaking of a person leaving a train while in motion, says : “ If the leap was made under such circumstances that a person of ordinary caution and care would not have apprehended danger therefrom, then it was not such an act of carelessness as would relieve the defendant from the responsibility otherwise resting upon it.” This was approved Louisville and Nashville Rd. Co. v. Crunk, 12 Am. St. R. 443, 449. A person suffering from a complaint who travels by railway must take the risks that one in his condition is likely to incur through a railway journey. The railway company’s duty to him is to be measured by the standard of care reasonably necessary for the safety of the average passenger : Linklater v. Minister of Railways, 18 N. Z. L. R. 536. 980 NEGLIGENCE IN LAW. Foy v. L. B. <£: S. C. J{y. Co. Harrold v. G. W. By. Co. Siner v. G. )V. By. Co. Considered. [BOOK V. to provide a platform for the purposes of alighting, it has been assumed in England that the stopping a train, for the purpose of enabling passengers to alight, warrants the inference that there is a platform on which they can alight, unless some intimation is given them to the contrary . 1 The duty of the company in the case of the absence of a platform has been a matter of more difficulty to settle. In Foy v. L. B. & S. C. Ry. Co . 2 the train was too long to be all drawn up at the platform, and the plaintiff’s wife was asked by the porter to alight a little beyond the end of the platform ; in doing so she was injured. The Court of Common Pleas held the company liable “ because the place and the means of descent provided were not reasonably convenient.” It is to be noted that it was assumed that the plaintiff was intended to alight. The decision is not that any of the preliminaries were wanting, but, all things being provided, the provision was not that reasonable provision without which the obligation of the carrier is not discharged. But in Harrold v. G. If. Ry. Co . 3 judgment was entered for the defend- ants, where the plaintiff, knowing that the carriage in which he was had overshot the platform, without waiting to see whether or not the train would be backed, so as to bring the carriage back to the platform, chose to get out in the dark, and in so doing missed his footing and fell upon the line (which at that spot was upon an embankment) and, rolling over the embankment into the roadway beneath, was injured. Here the decision hinged on the doubt whether the preliminary con- ditions to alighting were complied with. The defendants succeeded because the plaintiff had not shown that the time for alighting had arrived. And that was assumed in their favour which, in the earlier case, had been decided against the company, that the place for alighting was not reasonable. The cases, then, so far from being contradictory, are complements the one of the other. Harrold' s case is very like in its facts to Siner' s , 4 which has been before alluded to, and which was decided in the Ex- chequer Chamber. The only material distinction is that in Siner s case the plaintiff jumped down from the carriage in daylight, while in Harrold' s case the plaintiff jumped down in the dark. The judges in the Exchequer Chamber (Keating, J., who tried the case, dissenting) affirmed the judgment of the Court of Exchequer (Kelly, C.B., dis- senting), making absolute a rule for a nonsuit on the ground that there was no evidence for the jury. The decision was based on the fact that there was no evidence of invitation to alight — no evidence that a reasonable time had been given for the alighting of the people in the other part of the train. This must have been effected before the train could have been put back for the plaintiff to alight. Further, there was evidence that the plaintiff could see where she was getting out, and the risks attending her move- ments. The decision, in short, is on the same point as in Harrold' s case ; where the plaintiff, to prove his case, had to show that the company had provided for his alighting, or had given him a reasonable expectation that they looked to his alighting there and then ; as he failed to give any evidence of this, and the facts were equally consistent with some 1 Siner v. G. W. Ry. Co., L. R. 4 Ex., per llannen, J., 124 ; see, too, what is said in Bridges v. N. L. By. Co., L. R. 7 H. L. 213. 2 (18(15) 18 C. B. N. S. 225, 228. 3 (1866) 14 L. T. (N. S.) 440. * L. R. 4 Ex. 1 17. chap, hi.] COMMON CARRIERS BY LAND. 981 additional precaution being taken by the company before the proper time for alighting arrived, the plaintiff was held disentitled to recover. In addition to this, the majority of the Exchequer Chamber were of opinion that the whole surroundings being apparent to the plaintiff, and the risk, if any, manifest, the plaintiff, in jumping from the carriage without making any requisition to the company’s servants for other or additional facilities to alight, and without an invitation to alight, was the author of her own wrong, so that the case thus became one of simple contributory negligence. Praeger v. Bristol and Exeter Ry. Co. 1 was also carried to the Ex- Praeger v. chequer Chamber. The platform of the station, “ at the end which C. 0 was first reached by the train,” instead of having its edge parallel with xe u ! the line of the train, sloped off into a curve. The plaintiff sat in the compartment drawn up opposite the curved part, so that a space of eighteen inches or two feet was left between the footboard and the O Cockle v. L. ,k S. E. Ry. Co. com- pared with Praeger v. Bristol and E.oetcr Ry. Co. platform. A guard opened the door, but said nothing. It was a dark evening, and the station was dimly lighted. The plaintiff, stepping out, fell between the carriage and the platform, and was injured. The Court of Exchequer Chamber, overruling the Court of Exchequer, unanimously held there was evidence of negligence. This decision Discussed, is obviously just. The receding of the platform was in the nature of a trap ; the opening of the door by the guard constituted an invitation to alight ; while “ the evening was dark, and the station dimly lighted.” Had there been no platform at all, the case would have been much more arguable. As it was the platform misled the plaintiff into the opinion that it was continuous. Cockle v. L. & S. E. Ry. Co. 2 followed Praeger v. Bristol and Exeter Ry. Co. 3 There was the same receding of the platform, the same alighting by the plaintiff, and injury, and action. In Cockle's case the evidence went in one respect even further than in Praeger' s. “ It was a very dark night,” and “ the part of the platform at which the train would in the ordinary course have stopped was well lighted with gas-lamps, but the lights towards the place where the accident happened had been put out, because at that place the trains did not usually stop or the passengers alight.” 4 In another respect it did not go so far. In Praeger' s case the guard opened the carriage door ; in Cockle's case “ there was no evidence of any invitation to alight having been given by any of the defendants’ servants,” though this was qualified by the fact that it was “ clear that the train had been brought to a final standstill, as it was not again set in motion until it started on its onward journey.” 5 The Exchequer Chamber held there was here an invitation to alight, “ at all events after such a time has elapsed that the passenger may reasonably infer that it is intended that he should get out if he purposes to alight at the particular station ” ; 6 and also that, the danger not being “ visible and apparent,” there was negligence in the company. The next case is Lewis v. L. C. & D. Ry. Co. 1 The carriage in which the plaintiff was travelling shot a little beyond the platform. The name of the station was called out ; the plaintiff, who knew the station well, began to alight when the train backed into the station ; the jerk of the train in backing threw the plaintiff down and injured Lewis v. L. C. <£.• D. Ry. Co. i (1871) 24 L. T. (N. S.) 105. 4 L. R. 7 C. P. 322. 7 (1873) L. R. 9 Q. B. 66. 2 L. R. 7 C. P. 321. 5 L.c. 323. 3 24 L. T. (N. S.) 105. 6 L.c. 326. Weller v. L. B. L - J - conduct involving different consequences ; the gravamen of the charge was a mere refusal to act. To support this a duty to act must be shown. The duty they undertook was to carry the plaintiff safely, and this duty they had performed. No term can be implied in a contract of carriage to make pursuit of thieves. If then the company, as seems undoubted, were not responsible for the robbery, neither were they bound to make pursuit of the thieves, or to impede the working of their system to aid one of their passengers in pursuing robbers. “ What- ever was done to him ” [the plaintiff], says Lord Esher, M.R., 3 “ was Opinion of done and over ; ” the robbery was finished when he complained to Esher, the station-master, and the robbery being over 'without any duty being 1 raised against the company, there was nothing to show any new duty subsequently constituted. The language of Chalmers, J., in New Orleans, St. Louis, and Chicago Rd. Co. v. Burke* was urged as meeting the case. But that, as pointed out by Lord Esher, M.R., 5 referred to the duty to protect a passenger whom they had notice was being assaulted by fellow passengers. In the case before the Court the duty asserted was the arrest of those of whose wrongdoing the com- pany had no notice before its completion. In the House of Lords the decision was affirmed 6 on the ground that, in the words of Lord Selborne, 7 “ taking it in the manner most favourable to the plaintiff, I cannot myself hold that starting the train in the ordinary course was ‘opposing an obstacle to the recovery of the plaintiff’s property ’ of such a kind as to make the company responsible in the same way as if their 1 Baxendale v. Bennett, 3 Q. B. D., per Bramwell, L.J., 530. 2 Metropolitan Ry. Co. v. -Jackson, 3 App. Cas. 193. 3 [1893] 1 Q. B. 463. 4 24 Am. R. 689. s [1893] 1 Q. B. 461. 6 [1894] A. C. 419. i L.c. 425. 992 Chalmers, J in New Orleans, St. Louis, and Chicago Rd. Co. v. Burke. Pounder v. N. E. Ry. Co. NEGLIGENCE IN LAW. [book v negligence Lad caused or contributed to the robbery. If it was a duty to give opportunity for the arrest and search of the persons charged with the crime, that was, in my opinion, not a duty of the company to the plaintiff as a passenger on their line, but a duty to public justice, lor failure in which, by one of their station-masters or any other person in their employment, the company are not liable in an action for damages. •. On the important matter of the right and duty of the officers of a railway to preserve order thereon, some extracts may be made from the admirable judgment of Chalmers, J., in the above-cited case of Nent Orleans, St. Louis, and Chicago Rd. Co. v. Burke. If, says the earned judge/ an officer of a railway in charge of a train “ sees one passenger making upon another an assault, unprovoked at the time, he may command the peace, and without regard to the merits of the quarrel compel it, if necessary, by an ejection of the unruly party. In so doing he decides nothing as to the merits of the quarrel and will n< l more l )e liable for an honest and impartial mistake than a police officer would be under similar circumstances. ... But if he may do this voluntarily at his option, is he not compelled to do it when requested by those for whose benefit the power has been conferred upon him ? Powers and duties are usually reciprocal, and may be said to be uni- ormly so when the power is of a public, official character conferred for the benefit of others. The failure or refusal of the official to exercise such a power in a proper case, when called upon by those for whose protection he has been invested with it, amounts to negligence or to wilful misconduct as the circumstances of the case may indicate . 2 We conclude then, that the undoubted power which is vested in railroad officials to preserve peace and good order on their trains, and, if necessary for this purpose, to eject therefrom turbulent and disorderly persons, carries with it the absolute duty to exercise the power, when called on so to do in a proper case, by the other passengers ; that a failure to discharge this duty stands, to some extent, upon the same footing as the omission to perform any other official duty, and upon the maxim, Respondeat superior, renders the Corporation liable.” I he principles thus forcibly enunciated are in direct opposition to those which prevailed in Pounder v. N. E. Ry. Co . 3 There the question raised was whether there is a duty on a railway company to use the means they have available for the safeguarding a passenger aftei receiving notice of a danger likely to happen to such passenger while actually travelling on their line, notwithstanding that the danger io which he is exposed arises from circumstances peculiar to him personally, and is not communicated to the railway company till after the passenger has taken his ticket. A Divisional Court (Mathew and Smith, JJ.) held there was no such duty, because the duty of a railway company to its passengers “ arises out of the contract, and 1 24 Am. R. 695. 2 That in England the servants of a railway company have power and also a duty to preserve order, is clear from Jackson v. Metropolitan Ry. Co., 3 App. Cas. 193. That where there is a power there is also an absolute duty to exercise the power when called on by those entitled to the benefit of its exercise, is plain : Julius v. Bishop of Oxford, 5 App. Cas. 214. See per Lord Blackburn, 244: “ The enabling words are construed as compulsory whenever the object of the power is to effectuate a legal right “ One private person has no right to give another in charge after tho disturb- ance has ceased : per Lord Campbell, Price v. Seeley, 10 Cl. & F. 34. 3 [1892] 1 Q. B. 385. So are those in Addcrley v. 0. N. Ry. Co., | 1905] 2 I. R. J78, chap, hi.] COMMON CARRIERS 'BY LAND. 993 must be determined upon tlie facts known to the contracting parties at the time of the making of the contract.” 1 The plaintiff, who was personally obnoxious to certain people in his neighbourhood, was assaulted by some of them who got into the carriage in which he was travelling on the defendants’ line. He applied for assistance to their servants, who refused to help or protect him. On these facts it may be accepted that the plaintiff’s contract with Obligation of the railway company was the ordinary contract to carry safely ; 2 the railway and the duty they thus undertook is unvarying in the case of all th™piaintiff. passengers. 3 The circumstance that he needed, as things turned out, exceptional protection did not operate to deprive him of any pro- tection. The defendants refused to use the means of protection at their disposal, because the plaintiff was personally objectionable to others of their passengers ; that is, if the company had known less about him they would have protected him, but because they knew more they refused him the ordinary means they had available. The authorities are overwhelming in holding — to state the point in the words of Blackburn, J. — “ that the right which a passenger by railway has to be carried safely does not depend on his having made a contract, but that the fact of his being a passenger casts a duty on the company to carry him safely.” 4 The rule in the United States may be added : 5 The defendants Flint v. were bound to exercise the utmost vigilance and care in maintaining Norwich and order and guarding the passengers against violence from whatever ^mnJporta- source arising, which might reasonably be anticipated or naturally be tion Co. expected to occur in view of all the circumstances, and of the number and character of persons on board.” 6 InCobbv.G.W .Ry. Co., 7 when Smith, L.J., took occasion to mention Smith, L.J.’s, Pounder v. N. E. Ry. Co., his remark was that he was still of the opinion comment on he was when that case was decided that “ it is not the natural conse- quence of such negligence [the overcrowding of carriers] that a passenger in Cobbv. should be assaulted by an independent tort-feasor.” 8 There could W.Ry.Co. never have been any doubt of this since the decision of Metropolitan 1 Tne error is the same that Mathew, J., fell into in Meux v. C. E. Ry. Co., 11 Times L. R. 315, and which was corrected in the C. A., [1895J 2 Q. B. 387. 2 “ If,” says Lord Campbell, C.J., in Collett v. L. p-> in everything under their own control is in full and complete and proper Metropolitan order. They are bound to see, also, if there be a certain and definite Ry. Co. risk as to which they have any knowledge or can reasonably be supposed to have any knowledge that it is sufficiently guarded against. For instance, a trench may be dug across a road through no fault of theirs, and in such a case they could not be held liable ; but if there is any ground for apprehending that extraordinary precaution is wanted, they would be liable.” Alighting from or getting on a vehicle while in motion is in itself Alighting an act of neutral complexion. The circumstances may show it to be from or either negligent or careful. 6 Thus if, as appears to be the case in ^hide while some parts of America, 7 there is a practice for the drivers of horse-cars in motion, not to come to a full stop to take up or put down male passengers, the act of getting on a car while in motion would not be such con- tributory negligence as would disentitle the intending passenger to recover ; neither, on the other hand, would the failure to stop and the fall of the passenger be evidence of such negligence as would enable him to recover. 8 Again, if the conductor directed or advised a 1 5 Ont. L. R. 334. 2 34 Can. S. C. R. 74, 79. 3 [1904] A. C. 453. The fact of the reading of the extract from the Encyclopaedia is derived from the shorthand report penes me. i Pittsburg, &c. Ry. Co. v. Hinds, 53 Pa. St. 512 ; Lambkin v. 8. E. Ry. Co. of Canada, 5 App. Cas. 352. 5 L. R. 5 H. L. 55. 6 Louisville, x the carrier . luggage does (1) The passenger may exercise control over the luggage during the not differ in time of its conveyance ; the amount (2) The luggage claimed to be conveyed may be of a different ^mand^ from character from ordinary or personal luggage as it has just been defined ; ordinary merchandise. (3) The luggage may not come into or pass from the custody of the carrier in his capacity of carrier. These limitations we shall now consider in their order. Tliree cases (1) The passenger may exercise control over the luggage during the of variation time of its conveyance. fi) Vhtethe “ personal luggage.” See also Bruty v. Grand Trunk By. Co., 32 Upp. Can. Q. B. 66. P asse pg cr Dr. Thompson, Negligence, devotes twelve sections, §§ 3414-3425, to setting forth what exel0ls . es has been decided to be or not to be “ baggage.” control. 1 Hannibal Rd. v. Swift, 12 Wall. (U. S.) 262 ; Railroad Co. v. Fraloff, 100 U. S. (10 Otto) 24. 2 Elwell v. Grand Junction Canal Co., 5 M. & W. 669. 3 Railroad Co. v. Fraloff, 100 U. S. (10 Otto) 24. VOL. II. S Le Conteur v. L. L J * i L.c. 52. 2 L.c. 51. 3 3 C. P. D. 221. * L.c. 225. 1002 NEGLIGENCE IN LAW. G. W. Ry. Co. v. Bunch. Bergheim v. G. E. Ry. Co. discussed in G. W. Ry. Co. v. Bunch. Difference between the views taken in the two cases. Examined. Opinions of Lord Hals- bury, C., and Lord Macnaghten said by them to be based on the view of Willes, J. , in Talley v. G. W. Ry. Co. [BOOK V. luggage or goods, which, witli their consent, are placed with him in the carriage in which he is ; and they are not gratuitous bailees of those goods, as they receive them into their carriages in consideration of the passenger paying his fare. The company therefore must, according to ordinary principles, be held liable in respect of those goods as bailees for hire and contractors to carry, and therefore liable for loss or injury caused by negligence, but not otherwise ; the company have, in fact, the same liability with respect to the carriage of those goods as they have with respect to the carriage of the passenger himself.” 1 Bergheim' s case was the subject of discussion in G. IF. Ry. Co. v. Bunch ; 2 and though the decision in no way necessarily involves the considering of the point decided there, yet expressions of Lord Halsbury, C., and Lords Watson, Herschell, and Macnaghten will certainly be taken as overruling Bergheim’ s case. In Bergheim v. G. E. Ry. Co . 3 the Court of Appeal decided that where a passenger takes luggage into a railway carriage to be conveyed with him, he thereby releases the railway company from their position of insurers as common carriers, and leaves them liable in respect of the luggage so conveyed to the same extent that they are liable to the passenger himself for his own safe conveyance — that is, they are not liable except in respect of negligence. In G. IF. Ry. Co. v. Bunch 2 the principle laid down is that, where a passenger takes luggage into a railway carriage to be conveyed with him, the contract of the railway company with him as common carriers in regard to the conveyance of the luggage is modified only to the extent that, if loss happens by reason of want of care on the part of the passenger himself, who has taken within his own immediate control the goods which are lost, the contract of the railway company as insurers does not apply to that loss. The difference between these views is — the Court of Appeal charges the railway company in those circumstances only where they have been guilty of negligence ; the House of Lords extends the obligation to all cases where the passenger has not been guilty of negligence. For their doctrine the Lord Chancellor and Lord Macnaghten in the House of Lords vouch the authority of Willes, J., delivering the judg- ment of the Court of Common Pleas in Talley v. G. IF. Ry. Co . 4 “ I prefer,” says Lord Macnaghten , 5 “ the view expressed by Willes, J., in Talley v. G. W. Ry. Co.” “ In Bergheim v. G. E. Ry. Co.” 0 says Lord Halsbury, C., “ the Court of Appeal, commenting upon the case of Talley v. G. IF. Ry. Co., do not, I think, quite accurately represent the judgment of the Court of Common Pleas. In Talley v. G. W. Ry. Co., that judgment expressly assumes the general liability of the company as common carriers, but that the general liability was modified by the implied condition that the passenger should use reasonable care.” 7 It will be observed that this statement of the effect of Talley's case by no means supports the proposition for which it is vouched. That proposition is “ that a railway company, in accepting a passenger’s 1 Cp. per Pollock, C.B., Stewart v. L. N. IF. Ry. Co., 3 H. & C. 139. See as to this case, ante, 901. 2 13 App. Cas. 31. 3 3 C. P. D. 221. 4 L. R. 0 C. P. 44. 'the four reports of the judgment are practically identical, L. R. 6 C. P. 44 ; 40 L. J. C. P. 9 ; 23 L. T. (N. S.) 413 ; 19 W. R. 154. s 13 App. Cas. 57. e 3 C. P. D. 221. i 13 App. Cas. 42. 1003 chap, hi.] COMMON CARRIERS BY LAND. luggage for carriage in a passenger train and in the carriage with the passenger himself, do enter into a contract as common carriers, modified only to the extent that, if loss happens by reason of want of care of the passenger,” 1 the company is not liable. That is, the company is liable except in one event — the negligence of the passenger. The proof Lord Halsbury, C., gives, is that “ the general liability of the company as common carriers . . . was modified by the implied condition that the passenger should use reasonable care.” That is, the company is generally liable ; but one — not necessarily the only — condition that exonerates them is “ that the passenger should use reasonable care.” So much, then, for what Willes, J., is assumed to say. But Willes, J., does not leave the matter to be dealt with as Opinion matter of inference ; he expresses his opinion on the point directly . 2 actually After stating various circumstances in which the negligence of the wEleiTj y passenger would discharge the railway company, he says : 3 “ There is great force in the argument that where articles are placed, with the assent of the passenger, in the same carriage with him, and so in fact remain in his own control and possession, the wide liability of the common carrier, which is founded on the bailment of the goods to him and his being entrusted with the entire possession of them, should not attach, because the reasons which are the foundation of the liability do not exist. In such cases, the obligation to take reasonable care seems naturally to arise, so that when loss occurred it would fall on the company only in the case of negligence in some part of the duty which pertained to them .” 4 The judgment in which this passage occurs was apparently a written one, since with the exception of an occasional change from the definite to the indefinite article all the reports of it are absolutely at one . 5 It is somewhat hard then on Willes, J., that, when his only expression of opinion is that where goods are not in the “ entire possession ” of the railway company loss “ would fall on the company only in the case of negligence ” on their part, he should be cited as the authority for a doctrine that the company is liable in any event unless the passenger is guilty of negligence . 6 Lord Watson and Lord Herschell take different ground. The Lord former, after quoting the passage from the judgment of Cotton, L.J., Watson’s i 13 App. Cas. 42. 2 L. R. 6 C. P. 51. 3 L.c. 52. Herschell’s 4 This is the view taken in Whitney v. Pullman Palace Car Co., 143 Mass. 243. °P lmons - Cp. Kinsley v. Lake Shore and Michigan Southern Rd. Co., 125 Mass. 54, where Bergheim v. C. E. Ry. Co. is cited with approbation. 6 The case was argued in the Court of Common Pleas on the 23rd and 24th June, 1870, and the judgment was not delivered till the 1 1th November following. 6 The speech of Lord Halsbury, C., follows almost verbally the head-note of the report in the Law Reports. The head-note in the Law Journal Report (C. W . Ry. Co. v. Talley, 40 L. J. C. P. 9) is absolutely inconsistent with it, and is in accord with the law as laid down by the Court of Appeal in Bergheim' s case. The material portion of the head-note in the Law Reports is as follows : “ When a passenger’s luggage is at his request placed by a railway company’s servants in the carriage in which he is travelling, the company’s contract to carry it safely is subject to an implied condition that the passenger takes ordinary care of it, and if his negligence causes its loss the company are not responsible.” The corresponding passage in the head-note in the Law Journal is : “ The liability of common carriers to insure the safe delivery of goods does not attach to a railway company in respect of passengers’ luggage which is not put in the usual luggage van under the entire control of the company, but is placed in the carriage with the passenger and under his own control. With respect to luggage so placed, the obligation of the railway company is oidy to take reasonable care of it, and consequently the company will not be responsible for its loss unless occasioned by their negligence.” Whether, after Bunch's case, the head-note in the Law Journal represents the correct view of the law is more doubtful than whether it correctly represents Willes, J.’s, opinion, which it purports to summarise. Adopt the principle in Richards v. L. B. A S. C. By. Co. and Butcher v. L. <£• S. U By. Co. Inquiry into the principle adopted in those cases. (a) Richards v. L. B. cfc 8. C. Ry. Co. Judgment of Wilde, C.J. Effect of the case. ( h ) Butcher v. L. <£- S. W. Ry. Co. 1004 NEGLIGENCE IN LAW. [book V. already cited, and commenting on it, says : 1 “ However that may be /Pieter the principle which appears to me to have been adopted in Richards v. L. B. & &. C. Ry. Co. 2 and Butcher v. L. & S. W. Ry. Co . 3 think the contract ought to be regarded as one of common carriage ^ b]ect thls modification, that, in respect of his interference with their exclusive control of his luggage, the company are not liable for any loss or injury occurring during its transit, to which the act or detault ot the passenger has been contributory.” And Lord Herschell 4 is disposed to agree with my noble and learned friends in preferring WatsorT ° f thlS JUty t0 be derived ” fr0m the cases cited h Y Lord The first of these is Richards v. L. B. & S. C. Ry. Co . 5 Plaintiff’s wife became a passenger on the defendants’ railway, taking with her in ie carriage various articles of luggage, amongst others a dressing-case, that was put under the seat. On arriving at the terminus, the maid was about to remove them to the coach, when some porters of the company desired her not to trouble herself, as they would see to the uggage. I he dressing-case was subsequently lost, for which loss the company were held liable. Wilde, C.J., said : « “On the part of the c efendants it is contended that the goods were carried. But the allegation is, that they (the goods) were received by the company to be carried and conveyed and delivered at the terminus in London and they were not delivered. I think it was clearly established that the dressing-case was delivered to the company.” “ The fact of the dressing-case having been placed under the seat of the carriage, and so under the more immediate control and inspection of the passenger in my opinion makes no difference.” The duty of the company was not only to carry the goods, but to deliver them. The fact that the passenger had the goods with him during the carriage did not render the duty t° deliver any the less. As was said by Cress well, J - 7 they [the company] could not be said to have fulfilled their con- tract without delivery ; and, if it was the usual course to deliver the luggage of passengers at a particular part of the platform to make ” 1116 ^ ° f dellV6ry the defendants took upon themselves No expression goes further than to affirm that, assuming the passenger to have taken upon himself responsibility in the carnage, the obligation of the company was resumed when the period came for performance of that portion of the contract that related to delivery in any event there was default on the part of the company . 7 The other case is Butcher v. L. d S. W. Ry. Co . 8 ‘The facts are only distinguishable from Richards's case in this, that the plaintiff retained a carpet-bag in his own possession, and alighted from the carriage with the bag in his hand ; whereas Mrs. Richards never per- sonally interfered with the missing article. The bag was subsequently taken from his hand by a person wearing the ordinary dress of a porter, and lost. Jervis, C.J., in giving judgment for the plaintiff, said : 2 * ^PP- Cas. 48. 2 7 c. B. 839. 3 i G C. B 13 i f '® App. Gas. 55. His Lordship, however, prefaces this statement with the nature y oTthe°dutv devnl 8 * ^ not .f cessar y this case to determine what is the ture ot the duty devolving upon a railway company in respect of luggage carried or intended to be carried, in the same carriage with the passenger.” °° 8 ’ 1005 chap, hi.] COMMON CARRIERS BY LAND. “ The case of Richards v. L. B. & S. Co. Ry. Co. establishes that, though Judgment of not in express terms engrafted into it, it is a part of the contract of a Jerv,s » C.J. railway company with its passengers, that their luggage shall be delivered at the end of the journey by the porters or servants of the company into the carriages or other means of conveyance of the passengers from the station. Parties may, however, if they choose, agree to accept a delivery short of such ordinary delivery ; and it is possible the facts here might have warranted the inference of a delivery short of that which I have referred to. But that would be a question for the jury.” The judgments of Cresswell, Williams, and Crowder, JJ. — went on the ground that the duty of the company was “ to convey it [the luggage] from the railway carriage to a cab, if required to do so ” ; 1 that they were required to do so, failed, and so were rendered liable. In both cases it is to be observed there was default in the company ; Consideration while in both the goods lost were expressly left to the company to fulfil of the cases, their duty of delivery with regard to them. It is a somewhat unusual stretch of reasoning to argue from cases of negligence to one where there is no negligence ; from cases of actual remissness in duty to a case of implied remissness ; from the assertion of the principle that, where there is positive evidence that a passenger entrusts his goods to a railway company, in whose charge they ought to be when the loss occurs, the liability is that of a common carrier ; to the assertion of a principle that where there is positive evidence that the passenger has taken goods under his own care, the liability of the company is that of a common carrier, unless and until they can affix the imputation of negligence on the passenger, and when no act has been done notifying the company of a change of intention, or even when there has been no change of intention. The results of our examination, then, show that the decision in Result. Bergheim v. G. E. Ry. Co. is not in conflict with the previous decisions, or with the dicta of the judges giving those decisions, and cited by the Law Lords in the House of Lords in G. W. Ry. Co. v. Bunch ; though the decision of Bergheim v. G. E. Ry. Co. is certainly inconsistent with expressions used in the judgments in Le Conteur v. L. & S. W. Ry. Co ., 2 which case, strangely enough, was neither cited in argument nor in the speeches in Bunch’s case. The expression of opinion against the rule laid down in Bergheim v. G. E. Ry. Co. by the majority in the House of Lords in Bunchs case was so distinct that the rule there indicated will have to be followed by all Courts other than the House of Lords. Yet as the rule indicated is not necessary for the actual decision of Bunchs case the House of Lords itself is not precluded from reconsidering the question of principle when a case raising the question comes before them . 3 i L.c. 23, 25. 2 L. R. 1 Q. B. 54. 3 In Louisville, die. Ed. Co. v. Katzenberger, 57 Am. R. 232, 234, a sleeping-car case, it is said to be “ well settled, and that in accord with the nature of the contract that all reasonable liberality is allowed to the passenger in control of his luggage for the purpose of its use upon the journey without releasing the carrier from his obligation to see to its safety. Especially would this be true as to the character of luggage involved in this case, a valise containing clothing for use on the journey.” But there the plaintiff, so far from taking charge of his luggage, “ gave his satchel or valise to the porter of the sleeper on entering the car.” And this is the ground on which the case is declared by Thayer, J., in Bevis v. Baltimore Bd. Co., 56 Am. R. 850 n., “ not to be in conflict ” with a whole list of cases which he cites. The law in America is stated in the head-note to Illinois Central Rd. Co. v. Ilandy, 50 Am. R. 846, as follows : “ If a passenger on a sleeping car leaves his money in the car on leaving the car without 100G NEGLIGENCE IN LAW. (2) Where the luggage is not ordinary or personal luggage. Point raised by the eases G. N. By. Co. v. Shepherd. Duty of the company as laid down by Parke, B. [BOOK V. In the American Courts Bergheim’s case is quoted with approbation. 1 (2) The luggage claimed to be conveyed may be of a different character from ordinary or personal luggage. The law, as fixed by the carrier’s private Act of Parliament— if the carrier is a railway company, as now most frequently happens — is that the passenger is allowed to take with him a certain specified amount of luggage free. If he has more a payment is to be made, which is fixed by scale. The liabilities of the carrier for goods lost that have been carried as personal luggage, but which are not so in fact, has been the matter principally mooted, and the general effect of the decisions is that since they are carried in fraud of the company no duty arises with regard to them, save only to refrain from wilful or wanton damage. The first case to note is G. N. Ry. Co. v. Shepherd , 2 an appeal from a county court heard before Parke and Platt, BB. Plaintiff and his wife were third-class passengers on the defendants’ railway, and brought with them, along with other luggage, two paper parcels which contained merchandise. The porters of the company did not inter- fere in any way. The plaintiff and his wife themselves deposited the parcels in the carriage and took charge of them. A collision occurring during the journey, the plaintiff and his wife were both much hurt, and, upon being assisted into another train to continue their journey, the plaintiff asked one of the porters about the luggage, who told him not to make himself uneasy, it would be all right. The merchandise, however, was lost. The Court gave judgment for the company. “ In this case,” said Parke, B., 3 “there being no special contract, the defendants were bound to carry the plaintiff and his luggage, which term, according to the true modern doctrine on the subject, comprises clothing and such articles as a traveller usually carries with him for his personal convenience ; perhaps even a small present or a book for the journey might be included in the term. . . . Now, if the plaintiff had carried these articles [124 dozen of ivory handles, inter alia ] exposed, or had packed them in the shape of merchandise, so that the company might have known what they were, and they had chosen to treat them as personal luggage, and carry them without demanding any extra remuneration, they would have been responsible for the loss. ... If , indeed, they had notice, or might have suspected from the mode in which the parcels were packed, that they did not contain personal luggage, then they ought to have objected to carry them ; but the case finds that they had no notice of what the packages contained. Whether this was done for any fraudulent purpose it is not necessary to inquire ; because, even if there was no fraudulent intent, the plaintiff has so conducted himself that the company were not aware that he the knowledge of the company, and it is stolen by some one not employed by the company, if the company has kept a reasonable guard and watch it is not liable for the loss.” And this not upon the ground of the negligence of the passenger, but of the absence of negligence in the company. See an article on Bunch's case in the Court of Appeal in L. Q. R. (1880) vol. ii. 409, with a note on the foreign law, the author of which seems doubtful of the policy of the decision on the point discussed in the text (see at 479). 1 Besides in the Massachusetts decisions before noted, ante, 1003, n. the rule in Talley's case as understood in Bergheim’s case has been adopted in Pennsylvania : American Steamship Co. v. Bryan, 83 Pa. St. 440. In his huge magazine of decisions Dr. Thompson does not seem to have noticed Bunch's case. He adopts Talley's case, § 3442, but not the gloss of the slovenly headnote in the Law Reports. 2 (1852) 8 Ex. 30. Cp. Cusack v. L. & N. ]V. By. Co., 7 Times L. R. 452. 3 8 Ex. 38. 6hap. iii.] COMMON CARRIERS BY LAND. 1007 was not carrying luggage, and therefore the loss must be borne by him.” The effect of the rule thus laid down was much considered in the Keys v. Irish case of Keys v. Belfast and Ballymena Ry. Co. 1 The plaintiff, Belfast and with knowledge that no merchandise was allowed as luggage, took a ^ q* '['" l box of merchandise in the carriage with him when travelling by the defendants’ line. During the journey a guard demanded and took it to carry in the luggage van. One of the company’s servants stole it. The Irish Court of Common Pleas gave judgment for the plaintiff. The Exchequer Chamber were equally divided. On the one hand, the case of G. N. Ry. Co. v. Shepherd was considered in point ; on the other hand, it was distinguished, because the decision of Parke, B., was not that the company had no notice, but that the plaintiff had so conducted himself that the company were not aware of the nature of the articles ; while in the case before the Court “ the nature of the articles was patent ; fraud and concealment on the part of the plaintiff is negatived, and the avoidance of the contract is pressed, to the extent not merely of the liability for the mode of performing it, but in toto, and to the extent of transferring property.” 2 In the House of Lords, the judges being consulted, judgment was Opinion of unanimously given for the defendant, the plaintiff in error, Lord West- Lor ^ bury, C., summing up his remarks as follows : 3 “In substance, (Westbury) therefore, it comes to this, that the plaintiff intended to have the goods carried in the carriage with him and escape the obligation of the paying for their carriage as merchandise, and, under those circum- stances, there could not exist, in law or in reason, any contract whatever between the plaintiff and the company touching those goods, upon the breach or in default of the performance of which contract the plaintiff could have a right against the company ; and I think that any man of ordinary understanding would have had no difficulty whatever in disposing of the case if the plaintiff had appeared in court to urge his claim, and the Court had addressed to him the question, ‘ For what do you claim against the company ? ’ ‘I claim for certain goods I took with me as passenger in the railway carriage.’ Had the question been put to him, ‘ Did you know the rule of the company ? ’ he would have b^en obliged to answer, ‘ I did know that rule.’ ‘ Is it possible, then,’ the judge would answer, ‘ that you can claim against a company for goods which you took into the carriage of the company in violation of the rule which you knew they had established, and which their servants were bound to observe ? ’ ” While Keys v. Belfast and Ballymena Ry. Co. was going through Cahill v. the courts, Cahill v. L. & N. W. Ry. Co , 4 was decided by the Common fi- & N - w - Pleas on the authority of the G. N. Ry. Co. v. Shepherd . 5 The plaintiff’s contention contention was that a contract for hire over and beyond what was paid advanced in for the conveyance of himself and his personal luggage must be implied order to take from the fact that the porter in the employ of the company must have J^ 1 ^ ca ^ e 1 8 Ir. C. L. R. 107, 11 Ir. C. L. R. 145, in the House of Lords under the name Co. v. of Belfast Ry. Co. v. Keys, 9 H. L. C. 556. Shepherd. 2 Per Fitzgerald, B., 11 Ir. C. L. R. 157. 3 This quotation is from the Law Times Report, 4 L. T. (N. S.) 844. In 9 II. L. C. 573, the report of the Lord Chancellor’s opinion stops at the sentence, “the" plaintiff could have a right against the company.” The conclusion of the passage is represented by this sentence : “ The plaintiff ought to know that there can be but one opinion entertained upon the merits and substance of the case.” 4 (1801) 10C. B. N. S. 154. s 8 Ex. 30. 1008 NEGLIGENCE IN LAW. Mot by Willes, J. Whose view was affirmed in the Exchequer Chamber. The law as now settled. Question of notice more fully con- sidered in the American cases. Hannibal Rd. v. Swijt. Sloman v. G. W. Ry. Co. [book V. seen, from the external appearance of the package (which had the word “ Glass ” painted on the lid of the box), that the package contained goods other than personal luggage. To this Willes, J., replied : 1 “ It is impossible to infer that the porter did or could make any such contract so as to bind the company. I think that would be pushing to an absurdity the rule that a principal is bound by the acts of his agent within the scope of his ordinary employment.” The decision was affirmed by the Exchequer Chamber , 2 where Cockburn, C.J., delivering the judgment of the Court, said : “ That which was said 3 by Parke, B., in The G. N. Ry. Co. v. Shepherd, is in perfect conformity with the view which we now take of the question.” The law is accordingly now settled that if a passenger, who knows, or ought to know, that he is only entitled to take his ordinary personal luggage free of charge, chooses to carry with him merchandise for which the company are entitled to make a charge and abstains from giving notice of the fact, the company are not liable to compensate him in respect of loss or injury ; but if the company choose to take mer- chandise as ordinary luggage, it is not competent to them, in the event of a loss, to claim exemption from liability on the ground that the loss is of merchandise and not of ordinary luggage. To constitute notice by which the railway company’s rights are waived, notice to a porter is not sufficient . 4 The circumstances must be such as to show notice to some one in sufficient authority to affect the course of the company’s business. This last point has been more fully considered in the American than in the English cases. Thus, in Hannibal Rd. v. Swift 5 the rule laid down is : “ Where a railroad company receives for transportation, in cars which accompany its passenger trains, property of this character [statuary, pictures, &c.] in relation to which no fraud or concealment is practised or attempted upon its employes, it must be considered to assume with reference to it the liability of: common carriers of mer- chandise.” “ If property offered with the passenger is not represented to be baggage, and it is not so packed as to assume that appearance, and it is received for transportation on the passenger train, there is no reason why the carrier shall not be held equally responsible for its safe conveyance as if it were placed on the freight train, as undoubtedly he can make the same charge for its carriage.” The question of what is notice that goods are not personal luggage was raised in Sloman v. G. W. Ry. Co. (of New York) ; 6 where a lad of eighteen had two large trunks filled with samples, different from ordinary travelling trunks, and had a valise for his personal baggage. He delivered the trunks to a baggage-master, and, when asked where he wanted them checked to, replied that he did not then know, as he had sent a despatch to a customer at F. to know if he wanted any goods ; if not, he wanted them to go to R., where he expected to meet some customers. Soon after, he had them checked to R., paying two dollars, and receiving a receipt ticket for them, headed, “ Receipt ticket for extra baggage.” They were not weighed, and no evidence was given as to any regulation of the company in reference to charging extra compensation for passengers’ luggage. The jury found there the company had notice. On appeal the Court of Appeals held there 1 10 C. B. N. S. at 175. 2 13 C. B. N. S. 818, distinguished Wilkinson v. Lancs. The reference for this is Sir Henry Constable’s case, 5 Co. Rep. 106 a; see also Butler v. Wild wan, 3 B. & Aid. 308 ; Dickenson v. Jardine, L. 11. 3 C. P. 639 ; Parsons, Law of Shipping, vol. i. 347. 7 (14th ed.), 752, where the authorities are collected. See also Black, Book of 1023 CHAP. IV.] COMMON CARRIERS BY WATER. To justify the application of the rule as to average contributions the sacrifice must be made in conformity with certain conditions : (1) The danger must not have been produced by the thing sacri- In jettison ficed. This requirement is made on the ground of the manifest in- the sacri fioe^ justice of permitting him whose act or default imperilled the whole to f ive adventure to claim recompense from those whose property he had conditions. jeopardised. 1 (2) The danger must have threatened not a part merely, but the whole adventure. 2 (3) The danger must be apparently inevitable if the sacrifice is not made. 3 (4) The danger must have caused the casting away. It is not sufficient if the casting away was of something that could not be saved at the time it was cast away. 4 (5) The mind and agency of man must be employed. 5 If the goods are on the deck, which is not generally the proper Deck cargo. tho Admiralty (Twiss’s ed.), vol. ii., judgments of the Sea, 219, §§ 8-11, vol. iv., The Amalphitan Table, 31, §§ 47-49, where is the following : “ Likewise, if the merchants be avaricious persons, such as are found in the world, who would rather die than lose anything, who from extreme avarice would not consent to the jettison, but oppose it, thereupon the master with the mate and the other officers of the vessel, having held a council, ought to insist on it,” &c. The rest of the leading codes of ancient sea laws are set out in the same volume. Lege Rhodia cavetur ut, si levandae navis gratia jaetus mercium factus sit, omnium contributions sarciatur, quod pro omnibus datum est : D. 14, 2, 1. This title of the Digest — De Lege Rhodia Da Jactu — may be here generally referred to as containing the doctrines of the civil law on the subject. See also Paul, Sent. Rec. 2, 7. Moyle, Just. Inst. 2, 1, 48, refers to Aristotle, Ethics, 3, 1, containing the general definition of the Voluntary. The authority, or rather the lack of authority of these foreign codes is very forcibly pointed out by Lord Esher, M.R., in The Gas Float Whitton, (No. 2), [1896] P. 47. The derivation of the Admiralty law of England and Scotland from the laws of Oleron supplemented by the civil law is asserted by Lord Halsbury, C., Currie v. M' Knight, [1897] A. C. 102, also per Lord Watson, 104; and explained by him, Sailing Ship Blairmore Co. v. Macredie, [1898] A. C. 605. The first mention of contribution towards jettison in the English law, and that only incidentally, is in Mouse's case, 12 Co. Rep. 63. See, for the history of the law, Birkley v. Presgrave, 1 East, 220, Tudor, L. C. on Mercantile Law (3rd ed.), 92 cum notis ; Pirie v. Middle Dock Co., 44 L. T. 426, 428. There is a conflict of authority as to whether this right of jettison arises from an implied contract or is founded on natural justice alone. The former view is advocated by Bramwell, L.J., Wright v. Marwood, 7 Q. B. D. 67 ; the latter by Brett, M.R., Burton v. English, 12 Q. B. D. 220. See The Marpessa, [1891] P. 403, considered in The Minnetonka, [1905] P. 206. The Brigella, [1893] P. 189, overruled Montgomery v. Indemnity Mutual Marine Insurance Co., [1902] 1 K. B. 734 ; De Hart v. Compania Anonima de Seguros “ Aurora," [1903] 2 K. B. 503. General Average is ably treated in Bell, Comm. vol. i. (7th ed.), 629-638. The Leitrim, [1902] P. 256. The Marine Insurance Act, 1906 (6 Edw. VII. c. 41), s. 66. 1 Schloss v. Heriot, 14 C. B. N. S. 59 ; Johnson v. Chapman, 19 C. B. N. S. 563, which is considered in Wright v. Marwood, 7 Q. B. D. 62 ; Burton v. English, 10 Q. B. D. 426; 12 Q. B. D. 218 ; Strang, Steel :iy damaged, if he had not specially contracted for the right to do so. freight. The negligence of the master in this respect is matter for a cross-action. The leading case for this proposition is Dakin v. Oxley, 5 where Dakin v. Willes, J., in a considered judgment, examines the law on the subject, and concludes that a plea averring that through the fault of the ship- owner goods shipped had become worthless, and were abandoned by the owner, who was thereby discharged from the payment of the freight is bad. Willes, J., 6 citing “ Professor Parsons in his learned work upon Maritime Law, vol. i. p. 172,” states the law in America to be, that “ if the cargo arrives in specie, notwithstanding that it is damaged, whether fortuitously or culpably, so as to be worthless, the freight 7 is earned although in case of culpable damage set-off is allowed.” The contrary is nevertheless held in Snow v. Carruth , 8 in which the decision of Story, J., in Willard v. Dorr, 9 is cited as an authority ; and that decision has been followed in not a few cases. 10 Though the common lav/ on the point remains unaltered, its Judicature effect is neutralised by the provisions of the Judicature Acts, 1873, Acts enable 1875, by which (and the rules made under them 11 ) a defendant may be set up a counter-claim to an action. A claim for freight may therefore set up. be met by a counter-claim for damage to the cargo. 12 If goods are furtively put on board a presumption may arise Goods that the owner wished to defraud the carrier. This would rebut the furtively put of the shipper or consignee, and that it is not practicable to ascertain for how much of the loss the one party, or the other, is, in fact, responsible. I am, therefore, obliged to adopt some arbitrary rule in determining the amount to be allowed the respondents. An analogy may be found in the rule adopted by Courts of Admiralty, in cases of collision where both parties are in fault.” 1 Per Lord Blackburn, Postlethwaite v. Freeland, 5 App. Cas. 019. 2 Per Lord Davey, Ardan Steamship Co. v. Andrew Weir & Co., [1905] A. C. 512, explaining Little v. Stevenson, [1896] A. C. 108. 3 The Oquendo, 38 L. T. (N. S. ) 151 ; Hayn v. Culliford, 3 C. P. D. 410 ; 4 C. P. D. 182. 4 Notara v. Henderson, L. It. 5 Q. B. 346 ; L. R. 7 Q. B. 225, 235 ; Tronson v. Dent, 8 Moo. P. C. C. 419 ; Australasian Steam Navigation Co. v. Morse, L. R. 4 P. C. 222; De Citadra v. Swann, 16 C. B. N. S. 772. Hingston v. Wendt, 1 Q. B. D. 367, affirms the existence of a lien on cargo preserved, though the charges were incurred without authority from the owner. This is on the analogy of general average or salvage. s (1864), 15 C. B. N. S. 646. 6 L.c. 664. 7 “ The inception of freight,” says Eyre, C.J., “ is breaking ground ” : Curling v. Long, 1 B. & P. 636. But see Beawes, Lex Mercatoria (6th ed.), vol. i. 189; and the civil law in D. 14, 2, 10, § 2 ; and D. 19, 2, 61, § 1. Demurrage ceases on the day of sailing (or readiness to sail, Pringle v. Mollett, 6 M. & W. 80), and if subsequently the ship is detained, the freighter is not liable : Jamieson v. Laurie, 6 Bro. P. C. 474. 8 1 Sprague (U. S. Adm.), 324. 9 3 Mason (U. S.), 161, 171. io See the whole controversy summarised in Parsons, Law of Merchant Shipping, vol. i. 206, note 2, which is in fact a new edition of “ the work on maritime law,” cited by Willes, J. It is strange that though the Law of Merchant Shipping was not pub- lished till 1869, there is no notice in it of the decision of Dakin v. Oxley, though that case was reported in 1864, and the English cases are largely drawn upon in the note referred to. n See R. S. C. 1883, Order xix. r. 3. 12 The definition of “ freight ” is considered by Willes, J., in Denoon v. Home and Colonial Insurance Co., L. R. 7 C. P. 348 ; 6 Edw. VII. c. 41, s. 90. See also Beawes, Lex Mercatoria (6th ed.), vol. i. 187 ; Kay, Law relating to Shipmasters and Seamen NEGLIGENCE IN LAW. Pothier’s view as to goods furtively put in a vessel. Time for loading. Master’s duty. 1034 [book V. presumption oi' an implied contract , 1 though if freight were received by the carrier it would more probably operate as a waiver of the surrep- titious dealing, and the carrier would thereupon be clothed with his normal responsibilities. Pothier is of opinion that the master who finds goods in his vessel furtively put there is at liberty to put them ashore and charge the expense of unlading to the owner. If he does not find them till after he has sailed, he may discharge them at an intermediate port before the end of the voyage, leaving them in the hands of some solvent merchant and giving the owner notice ; yet if the vessel is able, he ought to carry them to their destination . 2 By the Code de Commerce 3 the master may only discharge the goods at the point where they are laden ; or if he prefers to carry them he may charge the highest freight paid for merchandise of the same quality . 4 If the time of loading is not the subject of special contract, the implication of law is that each party is to use reasonable diligence 5 in performing his part. Failure by either resulting in loss creates a right of action in the other party . 6 Where the performance of the contract is prevented by a cause over which neither party has any control, as by a threatened bombardment of the port of loading or delivery, an action is not maintainable . 7 But it is established law that the mere existence of circumstances beyond the control of the skipper which make it impracticable for him to have his cargo ready will not relieve him from paying damages for breach of his obligation . 8 Master's Duty. The master 9 is the general agent of the owner for the purpose of the voyage ; and for the exercise of that agency is entrusted with (2nd ed.), §§ 268-297. “ Freight is a payment to be made to the ship for carriage and delivery, and until there has been carriage and delivery the shipowner is not, under ordinary circumstances, entitled to demand freight at all ” : per Lord Russell of Killowen, C.J., Weir v. Oirvin, [1899J 1 Q. B. 196 ; [1900J 1 Q. B. 45. Freight under a charter- party is not an incident to the ownership of the vessel, so that an underwrite!- on the ship cannot claim any part of the damages recovered from the owners of the wrongdoing vessel on account of loss of prospective freight : The Sea Insurance Co. v. Hadden, 13 Q. B. D. 706. For the payment of freight, Abbott, Merchant Ships (14th ed.), 567- 712; 3 Kent, Comm. 219-230 (12th ed.), with Mr. Holmes’s note, 228. As to the procedure for enforcing shipowners’ right to freight see secs. 492-501 of Merchant Shipping Act, 1894 (57 & 58 Viet. c. 60), and White v. Furness, [1895] A. C. 40. Mont - gomery v. Foy, Morgan db Co., [1895] 2 Q. B. 321, explained McCheanc v. Gyles (No. 2), [1902] 1 Ch., per Buckley, J., 916. 1 The Huntress, Daveis (U. S. Adm.), 82, 91. 2 Pothier, Traite de Contrat de la Charte-partie, nos. 10, 12. 3 Code de Commerce, Art. 292 ; Boulay-Paty, Droit Maritime, vol. ii. 373 ; Alauzet, Commentaire, vol. iii. 191. 4 Valin, Ordonnance de la Marine, liv. 3, tit. 3, art. 7. 3 Jackson v. Union Marine Insurance Co., L. R. 10 C. P. 125 ; Foussard v. Spiers, 1 Q. B. D., per Blackburn, J., 414. If the delay, though caused by something for which neither party is responsible, is so great and long as to make it unreasonable to require the parties to go on with the adventure, either may treat it, at least so long as it is executory, as determined : Dahl v. Nelson, 6 App. Cas. 38, 53. Cp. however, Hurst v. Ushorne, 18 C. B. 144, approved French v. Newgass, 3 C. P. 1). 163. As to continuing warranty, Tully v. Howling, 2 Q. B. 1). 182. Ante, 834. c Forder v. Knoop, 4 Q. B. I). 299. 7 Ford v. Cotesworth, L. R. 5 Q. B. 544 (Ex. Ch.) ; Hick v. Rodocanachi, [1891] 2 Q. B. 626, in H. of L. sub nom. Hick v. Raymond, [1893] A. C. 22. 3 Ardan Steamship Co. v. Andrew Weir <0 Co., [1905] A. C. 501, 512. ‘J Reverendum honorem sumit quisquis magislri nomen acceperit : Cleirac, Jugemcns CHAP. IV. COMMON CARRIERS BY WATER. 1035 powers to be used at his discretion . 1 The owners are moreover held liable 2 if the master exercises a power which circumstances might justify, so that did the circumstances in fact exist, although the facts do not warrant its exercise in the particular case, the act would be within the general scope of his functions, for instance, if he unnecessarily throw goods overboard in a panic or sell goods without justifying need. The master is bound to take all reasonable care of goods entrusted to Master him, even though there are special conditions exonerating his owner ^ oimcl from the consequences of his defaults ; and where accidents have abbcare.' happened for which neither he nor his owners are liable, he is still bound to take all reasonable precautions to neutralise their effects and to save what of the cargo he can for its owners . 3 The master is bound to attest by his signature the date as well as Master’s the fact of the shipment of goods. He is not indeed bound to super- dut y jl 1 tlie f intend in person the receipt and the stowage of them ; yet if he is not cargo !* 011 ° personally cognisant of the fact and time of shipment, it is his personal duty to inform himself upon both those points by examining the mate’s receipts or the log-book before he signs bills of lading for the goods : and he can only discharge himself by showing either that he was relieved of his duty or that he made an honest attempt to perform it and failed through no fault of his own . 4 The powers of the master of a ship for the maintenance of discipline 5 Powers of are very large — even to admitting a liberty of exercising “ the power of administering wholesome personal correction,” but not extending ance 0 ‘f to authorise “ mere passionate violence.” 6 In the Scotch case 7 just discipline. d’Oleron, c. 1. Beawes, Lex Mercatoria (6th ed.), 155-166, Master of Ship; Malynes, Lex Mercatoria, c. xxii., Of the Master of the Ship, his power, and duty of the Master to the Merchants ; Bell, Comm. (7th ed.), 554-557, Of the Shipmaster or Captain. 1 Duty of master to load, Anglo- African Co. v. Lamzed, L. R. 1 C. P. 226. 2 Notara v. Henderson, L. R. 7 Q. B. 225 ; Ewbank v. Nutting, 7 C. B. 797. Under 24 Viet. c. 10, s. 10, and 17 & 18 Viet. c. 104, s. 191, it was held that the master had a maritime lien on the ship for disbursements : The Mary Ann, L. R. 1 A. & E. 8 ; The Glentanner, Swa. (Adm.) 415 ; and that he could maintain an action in rem for “ disbursements ” without previous payment in respect of such liabilities : The Sara, 12 P. D. 158. This was overruled in The “ Sara,” 14 App. Cas. 209, where the House of Lords held that 24 Viet. c. 10, did not give the master a lien on the ship for disburse- ments. The result of this decision was the passing of 52 & 53 Viet. c. 46. The old decisions were thereby again made applicable : Morgan v. Castlegate Steamship Co., [1893] A. C. 38. The enactments referred to in this note are now consolidated as sec. 167 of the Merchant Shipping Act, 1894 (57 & 58 Viet. c. 60). Post, 1095 n. 5. The judgment of Story, J., in Pope v. Nickerson, 3 Story (U. S.), 465, 473, discusses the liability of the owners and the powers of the master. The limits of the master’s authority to bind the owner for repairs is defined by Dr. Lushington in The Alexander, 6 Jur. 241 ; Benson v. Chapman, 2 H. L. C. 696 ; Rankin v. Potter, L. R. 6 H. L. 83, 122. 3 Notara v. Henderson, L. R. 7 Q. B. 225 ; Adam v. Morris, 18 Rettie, 153. See ant", 1024 ; and post, 1037. 4 Stumore v. Breen, 12 App. Cas. 698, 702. s Merchant Shipping Act, 1894 (57 & 58 Viet. c. 60), ss. 220-238. There is a conflict between the English and Scotch courts as to whether these statutory powers exclude other remedies ; cp. The Great Northern Steamship Fishing Co. v. Edgehill, 11 Q. B. D. 225, with Sharp v. Rettie, 11 Rettie, 745, where the English case is con- sidered and dissented from. The master’s powers for the maintenance of discipline, and also the rights and duties of mariners, are considered, Beawes, Lex Mercatoria (6th ed.), vol. i. 172. 6 Per Curiam, Reekie v. Norrie, 5 Dunlop, 369. 2 Reekie v. Norrie, 5 Dunlop, 368. In United States v. Colby (1846), 1 Sprague (U. S. Adm.), 119, it was held that if the master of a ship at sea, in the exercise of a sound and honest judgment, believes danger to be imminent, and to require the use of a dangerous weapon to reduce to obedience a seaman in open mutiny with weapons in his hand, and threatening the lives of the officers, and the master should use such a weapon from honest motives, he would be justified. The owners have been held not liable for an assault by the master on a seaman after the emergency had passed and by way of punishment for an act of disobedience : Spencer v. Kelley, 32 Fed. Rep. 1036 NEGLIGENCE IN LAW. [book V. Tran- shipping. cited the master of a ship was sued for striking the pursuer, and a defence that the blow was struck in making head against a mutiny would, it seems, have been sustainable, had not the facts shown a violence that caused “ effusion of blood ; ” so that in the circumstances the defence was held not to have been made out, and the defender, on whom the onus of proving a justification lay, was held liable. Still it is manifest that even “ effusion of blood ” may be justified in extreme circumstances. The main point is that personal constraint is j ustifiable, although only up to and in accordance with necessity. 1 r The master is bound to sail so soon as wind and tide permit — but not in tempestuous weather. 2 If the ship is under a charter-party which provides for sailing on a given day the time must be kept unless necessity prevents. The master must besides proceed to the port of delivery without delay, and must not deviate unless to save life. 3 If the ship is so disabled as not to admit of repair the master may procure another vessel to carry the cargo and save the freight — or he may adopt other means of transportation if they are available. If the freighter will not consent to the new means of transportation the master is entitled to so much freight as is earned. 4 Whether it is the duty as well as the right of the master to procure another vessel if he can to forward the cargo was a point left open by Lord Denman, C. J., in Shipton v. Thornton ; 5 but in The Bahia, 6 Dr. Lusliington laid down : (1) That the master is under no absolute obligation towards the owner of goods to forward them in the original vessel. (2) That it has never been decided that the master in any case is bound to tranship. 7 ' But it is the opinion of Lord Tenterden 8 that if the master’s “ own 838. For a malicious and wilful assault on a sailor by the master the owners have been held not responsible in New York Gabrielson v. Waydell, 135 N. Y. 1. Cp. ante, 578. 1 In Vallance v. Falle, 13 Q„ B. D. 109, an action was held not to lie against the master for refusing to give a seaman the certificate of discharge directed to be given under the sec. 172 of The Merchant Shipping, 1854 ; see Merchant Shipping Act, 1894 (57 & 58 Viet. c. GO), s. 128. The master may discharge seamen for just cause, and even put them ashore in a foreign country (57 & 58 Viet. c. GO), ss. 18G-189 ; The Exeter, 2C. Rob. (Adm.) 2G1, 272. See The Master’s duty to the Mariner, c. x. of A Collection of all Sea Laws, bound up with Malynes’s Lex Mercatoria (3rd cd.). 2 Abbott, Merchant Ships (14th ed.), 511, 522. 3 Scaramanga v. Stamp, 5 C. P. I). 295. Delay to avoid imminent danger of capture is justifiable : The“ San Roman,” L. R. 5 P. C. 301. As to deviation as a ground of avoiding a policy of insurance, G Edw. VII. c. 41, s. 46; 3 Kent, Comm. (13th ed.), 312 et seqq Park, Marine Insurances (8th ed.), G19, G58 ; Marshall, Marine Insurance (4th cd.), 138-163. 4 Molloy, blc. 2, c. 4, s. 5. Valin (Ordonnance de la Marine, liv. 3, tit. iii., dti Fret ou Nolis, art, 12), and Pothier (Charte-partie, n. G8) contend that the master is no further bound to procure another vessel, than by losing his freight for the entire voyage, if he omits to do it. But Emerigon (Traite des Assurances [ed. Boulay-Paty], vol. i. 425) considers them mistaken, and says that the master is guilty of a breach of duty if he refuses to procure another vessel and take on the cargo. See Code de Commerce, 29G : Si le capilaine n'a pu loner un autre navirc, lr. fret n'est dd qu’it proportion de. ce que le voyage est avanci ; Boulay-Paty, Cours de Droit Commercial Maritime, vol. ii. 400-405 : mais le nouveau Code de Commerce, comme nous venous de le voir, impose au capilaine V obligation de louer un navire en pareil cas. s 9 A. & E 314. ' . c B. & L. 292, at 304, 305. t Referring to The Hamburg, B. & L. 253. In Wilson v. Hank of Victoria, L. R. 2 Q. B. 211, Blackburn, J., says: “Inasmuch as the master could, by the expendi- ture of a comparatively small sum on temporary repairs and coals, bring the ship and cargo safely home, it was his duty to do so ; and though we do not decide a point which does not arise, we are not to be taken as deciding that his owners would not have been liable to the owner of the cargo if he had not taken this course.” The point was, however, decided in The Assicurazioni Ocnerali and Schenker <5 Co. v. SS. Bessie Morris Co., [1892] 2 Q. B. G52, a case of a charter-party. The Savona, [1900] P. 252, 8 Abbott, Merchant Ships (5th cd.), 240 ; (14th cd.), 528. chap, iv.] COMMON CARRIERS BY WATER 1037 ship can be repaired, he is not bound to send the cargo by another, but may detain it till the repairs are made, and even hypothecate it for the expense of them ; that is, supposing it not to be of a perishable nature ; if it be of such a nature, and there be not time or opportunity to consult the merchant, he ought either to tranship or sell it, according as the .one or the other will be most beneficial to the merchant.” We have noted that during the voyage the master must use all Degree of reasonable exertion to preserve the cargo . 1 In Laurie v. Douglas , 2 ? are required Pollock, C.B., expresses this duty to be, that he is bound “ to take the ^ith cargo, same care [of the goods] as a person would of his own goods, that is an ordinary and reasonable care.” Lord Tenterden says “ the master must during the vojmge take all possible care of the cargo.” 3 The apparent difference of these views may be harmonised by considering the care a person would take of his own cargo to be the very greatest . 4 On the arrival of the ship the cargo is to be delivered to the con- Cargo to be signee or to the order of the shipper on production of the bill of lading delivered and payment of the freight ; and the master has no right to detain the goods tor wharfage if the consignee tenders the freight and requires them to be delivered over the ship’s side . 5 The master may even sell the ship for the benefit of the owners , 5 Power of in a case of extreme necessity ; for instance, where a ship is aground n ] ast . er t0 sel1 and in the opinion of competent judges cannot be raised . 6 of extreme The master is personally liable for all acts of negligence or mis- necessity, feasance of his crew causing injury to cargo or property. The reason Personal given by Molloy 7 is : “ for that the mariners are of his own choosing, of and under his correction and government, and know no other superior ‘ b e ' on shipboard but himself ; and if they are faulty he may correct and punish them and justify the same by law ; and likewise, if the fact is apparently proved against them, may reimburse himself out of their wages.” He is not liable for their wilful torts nor for acts beyond the scope of their employment causing injury to other vessels . 8 1 Ante, 1035. Notara v. Henderson, L. It. 7 Q. B. 225, 232. 2 15 M. & W. 749, approved, 754. 3 Merchant Ships (14th cd.), 547. For this ho cites Emerigon, Traite des Assur- ances (cd. Boulay-Paty), vol. i., 372 : Le capitaine est un mandatairc a gage qui ripond da la fauta tres lege re. Cp. 3 Kent, Comm. 213 n. (c); Story, Bailm. § 509 et seqq. As to carriage of grain, Merchant Shipping Act, 1894 (57 & 58 Viet. c. 60), ss. 452-456, and sell, xviii. 4 Ante, 28 and 755. 5 Abbott, Merchant Ships (14th cd.), 562. 6 Hayman v. Motion, 5 Esp. (N. P.) 65. The onus probandi undoubtedly lies on the purchaser from the master to show the necessity : The Australia, in the Privy Council, Swa. (Adm.) 480, 484. As to the master’s authority to sell and what con- stitutes “ necessity,” see Australasian, &c. Co. v. Morse, L. R. 4 P. C. 222 ; Acatos v. Burns, 3 Ex. D. 282 ; Atlantic Mutual Insurance Co. v. I l nth, 16 Ch. D. 474 ; and the note to The Gratitudine, Tudor, L. C. on Mercantile Law (3rd od.), 84. 7 Molloy, bk. 2, c. 3, s. 13. Thus, an infant has been held liable in Admiralty : Roll. Abr. Court da Admiraltie (C), Admirall Ley, pi. 3; and an owner has been convicted under 54 Geo. III. c. 159, s. 11, of the offence of throwing ballast into navigable rivers, when not even on board : Michell v. Brown, 1 E. & E. 267. In The Queen v. Judge of City of London Court, [1892] 1 Q. B. 295, Lord Esher, M.R., says : “ I think it cannot be denied that the Admiralty Court has exercised jurisdiction over the master with regard to certain complaints ; but, whether the Admiralty Court can exercise, or ever has exercised, jurisdiction over the master in respect of a collision, so as to make him liable to the full extent of the damage, I will not decide on the present occasion, though the strong inclination of my opinion is, that the Court of Admiralty has never exercised such a jurisdiction against the master.” The position of a master of a ship, with his powers and duties, is exhaustively dealt with, Vin. Abr. Master of a Ship, and from the point of view of American law, in Parsons, Law of Shipping, vol. ii. 1-32. s Bowcher v. Noidslrom, 1 Taunt. 568. See The Druid, 1 W. Rob. (Adm.) 391, and the cases there cited. No action will lie at the suit of a sailor on the promise of the captain to pay extra wages in consideration of his doing an extra share of work : Captain of Queen’s ship not liable. Managing owner. Lord Esher, M.R., in Baumwoll M anufactur von Scheibler v. Gilchrest. 1038 NEGLIGENCE IN LAW. [book v. The captain of a Queen’s ship is, as we have seen, not liable for acts that he has not directly been concerned in, 1 Managing Owner. By the Merchant Shipping Act, 1894, 2 s. 59 (1), the name and address of the managing owner of every British ship is to be registered at the port of the ship’s registry. The object of this is “ to insure the safety of people who go on board ship — to insure that the ship should be safe ; and it puts certain liabilities for that purpose on the person who is the ship’s manager, and prevents his saying when those liabilities arise that he is not managing owner.” 3 There is no definition in the Act of the term “ managing owner.” 4 As to his position, Lord Esher, M.R., in the case just cited, adopts the language of Bowen, J., in F~razer v. Cuthbertson. 5 “ The 36th section of the Act 6 nowhere creates new agents, new functions, new capacities, nor clothes existing agents with enlarged powers. The section is part of the machinery designed to secure adequate protection for lives and property at sea. . . . A managing owner registered under the Act is no more and no less than a managing owner before the Act. He binds those whose agent he is, he binds nobody besides.” Consequently, where the registered managing owner divested himself by a charter-party of all Harris v. Watson, Peake (N. P.) 72 ; followed in SlilJc v. Myrick, 2 Camp. 317 ; and distinguished, Hartley v. Ponsonby, 7 E. & B. 872. The master has a lien on the goods and on the freight to the extent of his engagement: White v. Baring, 4 Esp. (N. P.) 22. The legal position of the master of a vessel disabled from carrying on the cargo, at an intermediate port, is stated by Cockburn, C.J., Metcalfe v. Britannia Ironworks Go., 1 Q. B. D. 625 ; 2 Q. B. D. 423, following Lord Stowell in The Gratitudine, 3 C. Rob. (Adm.) 240. i Nicholson v. Mouncey, 15 East, 384. Ante, 242. 2 57 & 58 Viet. c. GO. 3 Baumwoll Manufaclur von Scheibler v. Gilchrest, [1892] 1 Q. B., per Lord Esher, M.R., 260, referring to the incorporated Act, 39 & 40 Viet. c. 80, s. 36. As to the duty of “managing owner,” Williamson v. Hine Brothers, [1891] 1 Ch. 390; The Mount Vernon, 64 L. T. 148. As to his authority, The Huntsman, [1894] P. 214 ; and Steele, v. Dixon, 3 Rettie, 1003, dealing with the authority of the managing owner without specific authc/ity, when a vessel is in a home port and the owners easily acces- sible, to bind them for the cost of extensive structural alterations. The policy of the Registry Acts is discussed by Lord Eldon, Ex 'parte Y allop, 15 Ves. 60. The modern Acts are discussed, Chasleauneuf v. Capeyron, 7 App. Cas. 127. As to registered owners, see Merchant Shipping Act, 1894 (57 & 58 Viet. c. 60), s. 11 ; Ilibbs v. Boss, L. R. 1 Q. B. 534 ; Abbott, Merchant Ships (14th ed.), 76 rt seqq. The Hopper No. 66, [1906] P. 34. 4 As to whom see Abbott, Merchant Ships (14th ed.), 130 et seqq. The ship’s husband or managing owner is an agent appointed by the owners to do what is necessary to enable the ship to prosecute her voyage and to earn freight. He may be either a part owner or a stranger, and empowered to act on the return of the ship to port, or having a more general agency. His duty is generally to see to the proper outfit of the vessel ; but he has no authority to insure or borrow money for the owners, or to bind them to the expenses of lawsuits; he has “to act discretionally for them all ” ; French v. Backhouse, 5 Burr. 2727 ; Sims v. Brittain, 4 B. & Ad. 375 ; Coulthurst v. Sweet, L. R. 1 C. P. 649 ; nor to bind them by an agreement to cancel the charter- party and to pay the charterers a sum in lieu of commission, although such agreement is for the benefit of the owners : Thomas v. Lewis, 4 Ex. D. 18 ; Barker v. HigMey, 15 C. B. (N. S.) 27. All the joint owners of a ship were held liable for the neglect of the master to furnish proper medical aid toaseaman in Scarf) v. Metcalf, 107 N. Y. 211. Where there is an exception of “ the noglect and default of master in navigating the ship,” and the defendant was master and part owner, but the negligence which caused the loss was that of the defendant in his capacity as master, the exception applies : Westport Coal Co. v. McPhail, [1898] 2 Q. B. 130. s 6 Q. B. D. 99 ; Miles v. Mcllwraith, 8 App. Cas. 120. (i 39 & 40 Viet. c. 80, repealed by the Merchant Shipping Act, 1891 (57 & 58 Viet, c. 60), sch. xxii. 1039 chap, iv.] COMMON CARRIERS BY WATER. control and possession of a vessel for the time being, he was held not liable for the alleged negligence of the captain in taking the vessel to sea in an unseaworthy condition, though he was registered as managing owner . 1 And in the House of Lords, Lord Herschell, C., said : 2 “I Opinion of cannot think that this legislation altered in any way the liabilities or Lord ^ the rights of a person who was registered as the managing owner, or ' ’ who in fact was the managing owner, except so far as the legislature created new liabilities. It did, no doubt, create them, because it rendered the person registered as managing owner liable to penal consequences in case of the unseaworthiness of the vessel and his inability to prove that he had taken proper precautions. . . . But beyond that it seems to me that it would be improper to impose any liability which the Legislature has not by enactment clearly shown its intention to impose.” As the master is liable for the tortious acts of the crew, so the owners Owners are liable for the tortious acts of the master , 3 even where the vessel is liable for sailing under a charter-party, and is under the direction of an agent of ^master ° tS the charterers— if, that is, the master is appointed by the owners . 4 This liability is, of course, subject to the usual limitations ; the act for which the owners are sought to be charged must be neither wilful nor outside the scope of authority . 5 The owners of a ship are under the same obligation apart from Liability of statute, to make the vessel, its tackle and appliances, safe for the use shipowners of the sailors as the law places upon any other employers of labour ; tacWe^nd 6 ^ so that a sailor who is directed to work any dangerous or defective appliances machinery has the right to rely on the presumption that it is reasonably safe is the safe for the purposes for which it is to be applied. For accidents of of^ther that the sea the owners are not responsible. They are the ordinary risks employers, of the employment. The old theory, not now applicable to any employment, that mere continuance in the service after knowledge of a change in the conditions involving additional danger, was always inapplicable to sea service . 6 i Baumwoll Manujactur von Scheibler v. Bilchrest, [1892] 1 Q. B. 253; in H. of L. [1893] A. C. 8. As to the inability of sailors to refuse to act in circumstances of clanger : Rotliwell v. Hutchison, 13 Rettie, 463, a decision on 39 & 40 Viet. c. 80, s. 5, repealed by the Merchant Shipping Act, 1894 (57 & 58 Viet. c. 60), s. 745, sch. xxii. ; but re-enacted by sec. 458. For the limits of “ compensation for loss or damage sustained by reason of detention ” under sec. 10 of the former Act, now sec. 460 of 57 & 58 Viet. c. 60 ; see Dixon v. Calcraft, [1892] 1 Q. B. 458. 2 [1893] A. C. 20. 3 The Excelsior, L. R. 2 A. & E. 268 ; Davis v. Barrett, 6 Bing. 716 ; Scaramanga v. Stamp, 5 C. P. D. 295 ; N email v. Royal Exchange Steamship Go., 33 W. R. 342, 868 ; Malpica v. McKown, 1 La. Rep. 248 ; Arayo v. Currel, 1 La. Rep. 528. O'Neil v. Rankin, 1 1 Macph. 538, is an exception to this liability, where the master acts under the powers conferred by s. 246 of 17 & 18 Viet. c. 104, re-enacted by s. 223 of the Merchant Shipping Act, 1894 (57 & 58 Viet. c. 60). 4 Fletcher v. Braddiclc, 2 B. & P. (N. R.) 182 ; Fenton v. Dublin Steam Packet Co., 8 A. & E. 835. Whether the owner or the charterer is liable for injuries caused by the negligence or unskilful management of the vessel is to be determined by the terms of the instrument of charter as explained by the circumstances of each individual case; Schuster v. McKellar, 7 E. & B. 704; 3 Kent, Comm. (13th ed.), 133-138. See post, 1056. Whilewood v. Andorscn, 11 Times L. R. 47, is the case of an un- successful attempt by a stevedore’s labourer to charge shipbrokers and agents with liability for personal injuries received while engaged in unloading a cargo. 5 The Druid, 1 W. Rob. (Adm.) 391. “ No suit,” says Dr. Lushington, “ could ever be maintained against a ship where the owners were not themselves personally liable, or whore their personal liability had not been given up, as in bottomry bonds, by taking a lien on the vessel.” See this passage cited and explained by Sir J. Hannen, The Tasmania, 13 P. D. 115. Cp. The Ida, Lush. 6 ; The Princess Royal, L. R. 3 A. & E. 41 ; The Waldo, Davcis (U.S. Adm.), 161; Euibank v. Nutting, 7 C. B. 797 ; Schuster v. McKellar, 7 E. & B. 704. * See post, 1097. -> | e Eldridge v. Atlas SS. Co., 134 N. Y.'d87. Owners liable for pilot. Owner’s liability for necessaries. Who is owner. The mate. 1040 NEGLIGENCE IN LAW. [book v. Injury done )>y the negligent or unskilful management of a ship, the possession and control of which has so completely passed to the charterer that lie has appointed the master and crew, and directed the mode of her navigation, affects the charterer and not the owner with liability. 1 At common law the owners arc liable for all the tortious or negligent acts of the pilot but with the same limitations as we have just ex- pressed. 2 The master is an intermediary and so not liable. 3 The owner is personally liable for necessaries 4 furnished or repairs made to a ship by order of the master ; if, that is, the supplies furnished are reasonably fit and proper for the occasion. 5 The onus of proof is on the plaintiff. 6 If the owner has not the control and management of the vessel, or the right to receive her freight and earnings, he is not responsible. The master may bind his owners for the supply of necessaries. “ Whatever is fit and proper for the service on which a vessel is engaged, whatever the owner of the vessel as a prudent man would have ordered if present at the time, comes within the meaning of the term ‘ necessary ’ as applied to those repairs done or things provided for the ship by order of the master, for which the owners are liable.” 7 By owner is not necessarily meant registered owner ; in most cases ownership signifies legal ownership and the question is “ upon whose credit was the work done.” 8 The fact of a person’s name appearing on the register as owner is, unexplained, some evidence of liability for work done or orders given within the scope of a master’s general authority, although the question is not concluded thereby, and is whether owner or charterer, or intended purchaser by authority of whom the master gave the order, is liable upon them. 9 In the absence of the master the mate succeeds to the master’s 1 Scolt v. Scott, 2 Stark. (N. P. ) 438. 2 Cp. Hussy v. Donaldson, 4 Dallas (Pa.) 200. Post, 10 H. 3 Aldrich v. Simmons, 1 Stark. (N. P.) 214; Bowcher v. Noidstrom, 1 Taunt. 5G8. See note to 3 Kent, Comm. 176, on pilotage, its duties and responsibilities. 4 Cary v. White (1710), 6 Bro. Pari. Cas. 325. Sir Wm. Scott, in The Graliludine, 3 C. Rob. (Adm.) 274, doubts whether the master has authority, even in a case of uttermost distress and in a foreign port, to bind the owners beyond the value of the ship and freight ; yet after considerable discussion he admits the master’s’ power to hypothecate cargo in a foreign port ; and it is said in Abbott, Merchant Ships (14th ed.), 197 : “It has been always held that the master, if lie cannot otherwise obtain money, may sell a part of his cargo to enable him to convey the residue to the destined port.” The owner’s personal liability seems now undoubted : Arthur v. Barton, 6 M. & W. 138 ; Gunn v. Roberts, L. R. 9 C. P. 331. As to Brett, .T.’s, comment on Dr. Lushington’s dictum . in The Faithful, 31 L. J. (P. M. A.) 81, the point is discussed and the authorities cited in Abbott, Merchant Ships ( 14th ed.), 175 et seqq., where the correctness of Dr. Lushington’s dictum is maintained. The owners are never personally responsible where a bottomry bond is given : Abbott, Merchant Ships (14th ed.), 193. As to bottomry bonds, see The Karnak, L. R. 2 A. & E. 289 ; Klcinwort, Cohen <(• Co. v. The Cassa Marittima of Genoa, 2 App. Cas. 156, and especially the note to The Gratitvdine, Tudor, L. C. on Mercantile Law (3rd ed.), 59-83. The lender is bound to exercise a reasonable diligence to see that the supplies are at least apparently necessary. He must act with good faith. A regular survey is primd facie evidence of the necessity of repairs so as to justify the master as well as the lender. The presumption is in their favour ; the onus probandi of the contrary lies on the owner who resists the bottomry bond : 3 Kent, Comm. 170, n. («), 354-363. r > Abbott, Merchant Ships (14th ed.), 167 el seqq. 6 Mackintosh v. Mitchcson, 4 Ex. 175. 7 Per Abbott, C.J., Webster v. Seelcamp, 4 B. & Aid. 354 ; The Riga, L. R. 3 A. & E. 516 ; The “Liddcsdale,” [1900] A. C. 190. s Per Lord Tenterden, Jennings v. Griffiths, Ry. & M. (N.P.), 43; Reave v. Davis, 1 A. & E. 312 ; The Great Eastern, L. R. 2 A. & E. 88. a Mitcheson v. Oliver, 5 E. & B. 410. For liability of trading owners, The Vindo- bala, 13 P. D. 42. 1041 chap, iv.] COMMON CARRIERS BY WATER. authority, without, however, losing Iris character and privileges as mate ; as Lord Stowell says : 1 “ The mate is hceres necessarius to the employment of master in case of necessity.” But since by the Merchant Shipping Act, 1894, s. 1G7, the master is given the same remedy for wages as seamen have, the position of the mate in command does not seem to differ from that of the master. 2 The charterer is bound to use the ship in a lawful manner, and only The for the purposes for which it is let. The command of the ship is most charterer, commonly reserved to the owner, 3 and to his master ; and the charterer has no power to detain the ship beyond the stipulated time or to employ her in services other than those contracted for ; 4 and if pro- hibited or contraband goods are put on board by him, or those acting under him, he will be answerable for the consequences of doing so. 5 To obviate a grievance suffered by consignees through short delivery jurisdiction of goods brought to England in foreign ships, against the owners of of Admiralty, which, as they were resident abroad, the common law courts could afford no adequate remedy, it was provided by the Admiralty Court Act, 1861,® that the High Court of Admiralty should have jurisdiction over “ any claim by the owner, or consignee, or assignee, of any bill of lading of any goods carried into any port of England or Wales, in any ship, for damage done to the goods or any part thereof by the neglience or misconduct of or for any breach of duty or breach of contract on the part of the owner, master, or crew of the ship, unless it is shown to the satisfaction of the court that at the time of the institution of the cause any owner or part owner of the ship is domiciled in England or Wales.” 7 Certain statutory limitations to liability must be here noticed. By the Merchant Shipping Act, 1894, 8 s. 502, “The owner of a Provisions of British sea-going ship 9 or any share therein, shall not be liable to make Merchant good to any extent whatever any loss or damage happening without his Act P1 i894 actual fault or privity 10 in the following cases : (1) Where any goods, merchandise, or other things whatsoever taken in or put on board his ship 11 are lost or damaged by reason of fire 12 on board the ship ; or 1 The Favourite, 2 C. Rob. (Adm.) 237. See The Segredo, 1 Eec. & Ad. (Spinks) 36, 49; The Cynthia, 16 Jur. 748; The Tecumseh, 3 W. Rob. (Adm.) 144; Hanson v. lloydcn, L. R. 3 C. P. 47. 2 57 & 58 Viet. c. 60. In The Exeter, 2 C. Rob. (Adm.) 261, tlie position of the mate is considered. “ It would require a case of flagrant disobedience, negligence, or palpable want of skill to authorise the captain to displace fl mate 3 Kent, Comm. 183. As to the position of seamen sick and disabled on the voyage, Harden v. Gordon, 2 Mason (U. S.), 541 ; Reed v. Canfield, 1 Sumn. (U. S. Circ. Ct.) 195. 3 The Omoa Coal and Iron Co. v. Huntley, 2 C. P. D. 464. 4 Leuiin v. East India Co., Peake (N. P.) 241. a Brass v. Maitland, 6 E. & B. 470 ; Pierce v. Winsor, 2 Sprague (U. S. Adm.), 35. o 24 Viet. c. 10, s. 6. " The St. Cloud, B. & L. 4, 14. Dr. Luskington’s view as to the limitations of this section was dissented from in The Nepoler, L. R. 2 A. & E. 375. The soundness of the view there taken is recognised by Lord Blackburn in Sewell v. Burdick, 10 App. Cas. 74. On the other hand, an expression in the judgment of the Court of Common Pleas delivered by Brett, J., in the case of Simpson v. Blues, L. R. 7 C. P. 297, supports Dr. Lushington’s view ; citing which case in The Ilona, 7 P. D. 247, Sir Robert Phillimore says of the decision therein : “ it was admitted (it) could now not be relied on.” See Cargo ex “ Argos," L. R. 5 P. C. 134, approved in The Alina, 5 Ex. D. 227. But see per Lord Esher, M.R., The Queen v. Judge of the City of London Court, [1892] 1 Q. B. 290. s 57 & 58 Viet. c. 60. 9 For definition, see sec. 742. Ex parte Ferguson and Hutchinson, L. R. 6 Q. B. 280 ; The C. S. Butler, L. R. 4 A. & E. 238 ; The Mac, 7 P. D. 126, decided on the corresponding section (503) of the Act of 1854. 10 The Obey, L. R. 1 A. & E. 102. U “ Ship ” is defined 57 & 58 Viet, c. 60, s. 742. I 2 The Diamond, [1906] P. 282; Moorewood v. Pollolc, IE. & B. 743; Schmidt v. 1042 NEGLIGENCE IN LAW. [book V. (2) Where any gold, silver, diamonds, watches, jewels, or precious stones, taken in or put on board his ship, the true nature and value of which have not at the time of shipment been declared 1 by the owner or shipper thereof to the owner or master of the ship in the bills of lading or otherwise in writing, are lost or damaged by reason of any robbery, embezzlement, making away with or secreting thereof.” By sec. 508, “ Nothing in this part of this Act shall be construed to lessen or take away any liability to which any master or seaman, being also owner or part owner of the ship to which he belongs, is subject in his capacity of master or seaman, 2 or to extend to any British ship which is not recognised as a British ship within the meaning of this Act.” 3 The limitation of liability section of the Merchant Shipping Act, 1894, 4 is considered subsequently under Collisions on Water. 5 Another statutory limitation to the liability of the shipowner is where the ship, at the time of the damage done to goods, is in charge of a pilot whom he is compelled to employ. In considering the position of a ship in relation to compulsory pilotage it must be borne in mind that compulsory pilotage is not a charge upon vessels, but rather a regulation for their benefit. 6 Pilotage. Pilotage. Law in the United States as to shipper’s hen on ship. We shall presently note the statutory provision with regard to compidsory pilotage. Independently of that the English courts have uniformly held that where a pilot 7 is employed under statutory sanction the owners and master are not liable for injuries arising from his acts. 8 In the United States the ship has been held liable though the employment of the pilot is compulsory. 9 In another respect, too. the law of the United States merits notice. There it has been decided 10 The Royal Mail Steamship Co., 45 L. J. Q. B. 646 ; Crooks v. Allan, 5 Q r B. D. 38. The scope of limitation actions is discussed in The Karo, 13 P. D. 24 ; cp. Constable v. National Steamship Co., 154 U. S. (47 Davis) 51, 62. 1 Williams v. The African Steamship Co., 26 L. J. Ex. 6!), is a decision on the similar words of the previous Act. Cp. Gibbs v. Potter, 10 M. & W. 70. 2 The Cricket, 5 Mar. Law Cas. (N. S.) 53. 2 See ss. 1, 2, and 3. 4 57 & 58 Viet. c. 60, s. 503. 5 Post, 1108. c The Hanna, L. B. 1 A. & E. 283. 2 Abbott, Merchant Ships (14th ed.), Of Pilots, 299 ct seqq. Kay, Shipmasters and Seamen (2nd ed.), §§ 550-555. See also Beawes, Lex Mercatoria (6th ed.), vol. i. 203-236, for a great collection of information relative to pilots. s Carrnthers v. Sydebotham, 4 M. & S. 77 ; Bcnnet v. Moita. 7 Taunt. 258; The Maria, 1 W. Rob. (Adm.) 95, 107 ; The Annapolis, Lush. 295 ; The Hibernian, L. R. 4 P. C. 511 ; The Princeton, 3 P. I). 90 ; The Mercedes de Larrinaga, [1904] P. 215 ; The Ole Bull, [1905] P. 52 ; The Assaye, [1905] P. 289. Where pilotage is not com- pulsory the employment of a pilot does not relieve a shipowner of his responsibility : The Sutherland, 12 P. D. 154 ; Courtney v. Cole, 19 Q. B. D. 447. In Arnould, Marine Insurance (4th ed.), 598, the opinion is expressed that except where required to take a compulsory pilot by Act of Parliament, the captain’s ncgligenco in not having a pilot on board, whereby a loss accrues, will not discharge underwriters from their liability if the loss be proximately caused by perils insured against. In the 7th ed. § 704 the quotation is omitted. The charterer is not I he master of the pilot : Fraser v. lice, 17 Times L. R. 101. » The China, 7 Wall. (U. S.) 53 ; 3 Kent, Comm. 176, where the duty to employ a pilot is minutely considered. Story, Agency, § 456 a ; Parsons, Law of Shipping, vol. ii. 106-119. 10 The Rebecca, Ware (U. S. Dist. Ct.), 188. COMMON CARRIERS BY WATER. 1043 CHAP. IV. 1 that a merchant who ships merchandise in a vessel on freight has a lien on the vessel for the loss of his goods or any damage they may sustain from the fault or neglect of the master or the insufficiency of the vessel. We are also told by the same high authority that this was always the rule even under the Admiralty law of England, where, however, it “ ceased to be of any practical use for the want of an appropriate process to enforce the lien,” that is, the common law courts of the country interposed all the difficulties they could in the way of the exercise of the Admiralty jurisdiction. The rule in the United States is ex- pressed to be that the ship is bound to the merchandise in the same manner as the merchandise is bound to the ship. By the Merchant Shipping Act, 1894, 1 s. G33, an owner or master Compulsory of a ship shall not be answerable to any person whatever for any loss pilotage, or damage occasioned by the fault or incapacity of any qualified pilot acting in charge of that ship within any district where the employment of a qualified pilot is compulsory by law. 2 The protection of the section is given only where the shipowner and Only the master are free from blame ; for the presence of the pilot is not the exonerates exoneration of the crew. The proposition ought rather to be stated — owner and the intervention of the pilot is not the augmentation of the responsibili- master are ties of the owner or the master. 3 The pilot is on the ship to take charge free from of the steering, and when the pilot is proved to have given orders, which blame - were obeyed, from which damage has arisen, a prima facie case of negligence is made against him, though not against the owners. Yet if the proof is no more than that the pilot gave the orders without their being obeyed, prima facie negligence is not made out, nor the owners exonerated. 4 If it be proved that a qualified pilot was acting in charge 1 57 & 58 Viet. e. GO. 2 This is a question the solution of which now depends on the Merchant Shipping Act, 1894 (57 & 58 Viet. c. 60), Part x. ss. 572-633, or on the local statutes governing in the place where the act was done or negligence permitted, from which the pro- ceedings arise. It is only necessary that the vessel should still be in charge of a pilot who has been compulsorily taken on board, even although the ship, at the time of the matter forming the cause of action arising, was outside the district of compulsion : General Steam Navigation Co. v. British and Colonial Steam Navigation Co., L. R. 3 Ex. 330; L. R. 4 Ex. 238 ; The Guy Mannering, 7 P. D. 132. In The Stettin, B. & L. 199, the pilot was taken on board where there was no compulsion, i.e., by a passenger ship when no passengers were on board (see sec. 625 of 57 & 58 Viet. c. 60), and therefore the rule did not apply ; The Lion, L. R. 2 P. C. 525 ; The Hankow, 4 P. D. 197. See The" Earl of A uckland," Lush. 164, 387, 15 Moo. P. C. 304, held binding and followed in The Cayo Bonito, [1903] P.,203 ; The Warsaw, [1898] P. 127 ; The Glanystwyth, [1899] P.118. For the commencement and termination of compulsory pilotage services: The Servia — The Carinthia, [1898] P. 36. Sec. 603 of 57 & 58 Viet. c. 60, preserves all the exemptions that existed under 6 Geo. IV. c. 125, s. 59: The Vesta, 7 P. D. 240. As to the liability of harbour trustees appointed “ pilotage authority ” by virtue of a local Act for employing “ hobblers,” instead of appointing pilots, see Holman v. Irving Harbour Trustees, 4 Rettie, 406. As to who is a qualified pilot duly licensed within the Merchant Shipping Act, 1894 (57 & 58 Viet. c. 60), s. 586, which reproduces s. 349 of the Act of 1854 ; the definition of “ qualified pilot ” is from s. 2 of that Act : The Carl XV., [1892] P. 132; C. A. 324. 3 Clyde Navigation Co. v. Barclay, 1 App. Cas. 793, explained as to onus of proof; The Indus, 12 P. D. 46. The “ person in charge ” under 25 & 26 Viet. c. 63, s. 33, is the ship’s master. Subsequent misconduct of the master in not rendering assistance in the case of a collision caused by the neglect of a compulsory pilot will not render owners liable : The Queen, L. R. 2 A. & E. 354, followed in The Sussex, [1904] P. 236 ; The Ole Bull, [1905] P. 52. This section is re-enacted 35 & 37 Viet. c. 85, s. 16, and incorporated in the Merchant Shipping Act, 1894 (57 & 58 Viet. c. 60), s. 422. As to “ fault or privity ” of master under 25 & 26 Viet. c. 63, s. 54, now incorporated in the Merchant Shipping Act, 1894 (57 & 58 Viet. c. 60), s. 503, sec The Obey, L. R. 1 A. & E. 102 ; The Empusa, 5 P. D. 6. 4 The Indus, 12 P. D. 46, 48. Dr. Lushing- ton’s judg- ment in The Diana. The “ Iona.” Clyde Naviga- tion Co. v. Barclay. 1041 NEGLIGENCE IN LAW. (book V. of a ship ; secondly, that the charge was compulsory ; thirdly, that the damage happened through the pilot’s fault ; 1 it lies upon the plaintiff to show that other causes existed for which the owner is responsible. Having done this, the onus is upon the defendant to explain the circum- stances so alleged, and to show that the prima jacie conclusion from them is not correct. 3 Previously to the decision in Clyde Navigation Co. v. Barclay , 3 which established this procedure, some misapprehension existed as to the relations between the master and crew and the pilot. This arose from an inaccuracy of expression in the judgment of Dr. Lushington in The Diana} Speaking of the immunity of the shipowners, under the compulsory pilotage clauses of the Pilot Act, 182b, 5 from liability for the negligence of the pilot, the learned judge said : “ That the ex- ception under the Act ought to be construed strictly ; and that if the accident w r as occasioned by the joint misconduct of the pilot and crew, I am bound to hold that the liability still attaches to the owners.” This appears substantially accurate ; but the expression left open the construction that not only must the defendant show compulsory pilotage and negligence of the pilot, but also must negative any negli- gence on the part of the master and crew. And this construction, after being favourably regarded for some time, was definitely enunciated in the judgment of the Privy Council in The “ Iona ” : 6 “ It is not enough for them ” (the owners) “ to prove that there was fault or negligence in the pilot ; they must prove, to the satisfaction of the Court which has to try the question, that there was no default whatever on the part of the officers and crew of their vessel, or any of them, which might have been in any degree conducive to the damage.” In Clyde Navigation Co. v. Barclay , 7 commenting on this passage Lord Chelmsford said : “ The learned Vice-Chancellor ” — the judgment in the Privy Council case was delivered by Sir Richard Kindersley — “ imposes upon the owners a species of negative proof which it is impossible for them to give. If instead of saying ‘ they must prove,’ &c., he had said, ‘ it must be proved that there was no fault on the part of the officers and crew,’ he would have been perfectly correct The owners, having proved fault on the part of the pilot sufficient to cause, and in fact causing, the calamity, must therefore, in absence of proof of contributory fault of the crew, be held to have satisfied the condition on which exemption depends, and are not to be called on to adduce proof of a negative character, to exclude the mere possibility of contributory fault. It may be that in the course of the evidence of the owners to fix the responsibility solely upon the pilot, certain acts or omissions on the part of the crew may come out ; and it will then be incumbent on 1 It must bo exclusively his fault, even though proof is given that ho gave the orders and they were obeyed : The “ Iona,” L. R. 1 P. C. 420 ; applied in The Minna, L. R. 2 A. & E. 97, and The “ Calabar,” L. R. 2 P. C. 238 ; The “ Velasquez ,” L. R. 1 P. 494. 2 Per Lord Selborne, Clyde Navigation Co. v. Barclay, 1 App. Cas. 790. 796. As to the circumstances in which the master may be called on to interfere with the pilot, The Lochlibo, 3 W. Rob. (Adm.), per Dr. Lushington, 321 ; approved Wood v. Smith, The City oj Cambridge, L. R. 5 P. C. 451 ; The Oak field, 11 P. D. 34; The Tactician, [1907J P. 244. 3 1 App. Cas. 790. 4 I W. Rob. (Adm.) 135; 4 Moo. P. C. C. 11. 5 6 Geo. IV. c. 125, s. 55 ; see per Dr. Lushington, The Earl oj Auckland, Lush. 177, comparing 17 & 18 Viet. c. 104, s. 353 with 0 Geo. IV. e. 125, s. 59; and now the Merchant Shipping Act, 1894 (57 & 58 Viet. c. 00), s. 598 (2). The Cayo Bonito, [1903] P. 203. 6 L. R. 1 P. C. 426, 432, referring with approbation to The Christiana, 7 Moo. P. C. C. 160, and to The “ Schwalbe,” 14 Moo. P. C. C. 250. 7 1 App. Cas. 792. 1045 chap, iv.] COMMON CARRIERS BY WATER. the owners to show satisfactorily that those acts or omissions in no degree contributed to the accident.” Lord Selborne, 1 adapting the Lord expression of the Lord Justice-Clerk, 2 states the law thus : “ It is not 0 f enough for the owners to show that the damage arose through the fault the );uv of the pilot, if there is reasonable ground 3 for saying there was con- tributory fault on the part of the master or crew,” and goes on to say : “ The proof of circumstances which prima facie show such reasonable ground for saying that there was contributory fault on the part of the master or crew, no doubt would throw upon the defender the burden of explaining those circumstances, so as to satisfy the Court that in point of fact the prima facie conclusion from those circumstances is not correct. If he fails to do that he fails altogether.” 4 The pilot is personally liable for his own negligence. 5 There is, Pilot person- moreover, a duty to the pilot from the master, of uberrima fides to alJ y liable, disclose all particulars affecting the efficiency of the ship ; failing which the master is liable. 6 Though the exoneration of the owners for damage caused by the Sudden incapacity of the pilot is sufficiently amply expressed in sec. 633 of the ffi ness or Merchant Shipping Act, 1894, there is probably (for there is no decision mca P acit y> in point) a state of things where the master or the owners would be liable for permitting plain incompetency ; drunken incapacity, for instance, would call for an exercise of the master’s authority to frustrate reckless or suicidal action by the pilot ; and the section would not give immunity where acquiescence in the pilot’s direction would mark pure folly. Still the evidence of the need of independent action would have to be of undoubtful cogency. If then the master fail to act, he and the owners would be liable. 7 In other matters the law is clearly so. Surgeons, even, have had to be led from the operating table in the crisis of their work, and hideous risks to be faced, rather than allowed to continue at it while in a state of incapacity. i L.c. 797. 2 2 Rettie, 845. 3 Lord Selborne substitutes the phrase “ reasonable ground ” for the Lord Justice- Clerk’s expression of “ reasonable room ” ; for the rest the quotation follows the Lord Justice- Clerk’s words. * Ante, 143. As to the scope of the pilot’s authority, see Burrell v. MacBrayne, 18 Rettie, 1048. It extends to determining the proper time of the ship leaving her moorings and to the deciding on all precautions advisable for prudent navigation, per Lord Kinnear, 1057. 3 The Queen v. Judge of City of London Court, [1892] 1 Q. B. 273. In The Octavio, Stella, 57 L. T. 032, a pilot was held liable for anchoring a ship in an oyster-bed, of the position of which he is presumed to have knowledge ; The Swift, [190l] P. 168 ; Petrie v. Owners of SS. “ Rostrevor ,” [1898] 2 I. R. 556 ; Foster v. W arblington Urban Council, [1906] 1 K. B. 648. Post,' 1074. As to the duties of a pilot, see The “ Iona,” L. R. 1 P. C. 426 ; TheGuy Mannering, 7 P. D. 132, 134 ; The “ Calabar ,” L. R. 2 P. C. 238 ; for his duties when the shi p is at anchor. The “ City of Cambridge,’ ’ L. |R. 5 P. C. 45 1 . As to the pilot’s relation with the master, TheDiana, 1 W. Rob. ( Adm.) 131, 136 ; 4 Moo.P. C. C. 11; The City of Cambridge, L. R. 5 P. C. 451 ; The Rigborgs Minde, 8 P. D. 132; The Ripon, 10 P. 1). 65 By Belgian law, though a pilot must be paid for, whether in charge or not, in either case the master is responsible for negligent navigation : The Dallington, [1903] P 77 ; the Dutch law is similar : The Prins Hendrik, [1899] P. 177. As to the distinction between salvage and pilotage, Alcerblom v. Price, 7 Q. B. D. 129. “ Salvage ” “is the service which those who recover property from loss or danger at sea, render to the owners, with the responsibility of making restitution and with a lien for their, reward:” per Lord Stowell, j Thetis, 3 Hagg. (Adm.) 48. Salvage is a reward for services actually conferred and not for services attempted to be rendered : The ” Chet ah,” L. R. 2 P. C 205. See The” Amerique,” R. 6 P. C. 468; The Cargo ex Schiller, 2 P. D. 145 ; The Renpor, 8 P. D. 115 ; The City of Chester, 9 P D. 182 ; Wells v. Owners of Gas Float Whilton (No. 2), [1897] A. C. 337 ; The Cargo ex Port Victor, [ 1901] P. 243. Compensation may be given in respect of injury sustained while rendering salvage services : SS. Baku Standard v. SS. Angele, [1901] A. C. 549. Marine Insurance Act, 1906 (6 Edw. VII. c. 41), s. 65. 3 “ The Meteor,” Ir. R. 9 Eq. 567. 7 Girolamo, 3 Hagg. (Adm.) 169. 176. Cp. The Niobe, 13 P. D. 55. NEGLIGENCE IN LAW. [book V. Towage. Law as be- tween towing vessel and towed vessel. The “Julia." Spaight v. T edcastle. 1046 Towage. The case of towage involves some complications. A steam tug, it is said in a well-known United States case , 1 which engages to tow a vessel into a port, though not a common carrier nor an insurer (the highest possible degree of skill and care is therefore not required of her), is still bound to exercise reasonable skill and care in everything relating to the work till it is accomplished. The want of either skill or care in such cases is a gross fault, and she is liable for the want of either to the extent of the damage sustained. She is bound to know the channel of her home port, how to reach it, and whether in the state of the wind and water it is safe and proper to attempt to enter with a tow. The obligation undertaken by one supplying a tug was considered by the House of Lords in The *• Ratata ,” 2 and is in accord with the prin- ciples just noted. There is no warranty but an undertaking to use reasonable care and skill ; knowledge of the state of the tide is required, if the operation to be performed depends on it, and an adequate adjustment of means to ends in the provision of steam or other force to work out the object desired. The law as between the towing and towed vessel is stated by Lord Kingsdown, delivering the judgment of the Privy Council in The “ Julia:” 3 “When the contract,” i.e., of towage, “ was made, the law would imply an engagement that each vessel would perform its duty in completing it ; that proper skill and diligence should be used on board of each ; and that neither vessel, by neglect or misconduct, would create unnecessary risk to the other, or increase any risk which would be incidental to the service undertaken. If, in the course of the per- formance of this contract, any inevitable accident happened to the one, without any default on the part of the other, no cause of action could arise. Such an accident would be one of the necessary risks of the engagement to which each party was subject, and could create no liability on the part of the other. If, on the other hand, the wrongful act of either occasioned any damage to the other, such wrongful act would create a responsibility on the party committing it, if the sufferer had not by any misconduct or unskilfulness on her part contributed to the accident.” 4 This rule of law is illustrated in Spaight v. T edcastle , 5 where the 1 The “ Margaret ,” 94 U. S. (4 Otto) 494. 2 [1898] A. G. 513. 3 14 Moo. P. C. C. 210, 230, Lush. 224. The law is laid down in very similar terms in Sturgis v. Boyer, 24 How. (U. S.) 110; Smith v. St. Lawrence Tow-Boat Co., L. R. 5 P. C. 308 ; The Energy, L. R. 3 A. & E. 48 ; The Allair, [1897J P. 105 ; The Harvest Home, [1904] P. 409; [1905] P. 177. •t The tug must be seaworthy : The United Service, 8 P. D. 50 ; 9 P. D. 3. If the tug supplies the tow-rope, it must be sufficient : The Robert lHxon, 4 P. D. 121 ; 5 P. D. 54. In The Undaunted, 11 P. D. 40, it was held that the implied obligation that the tug shall be efficient is not set aside by a proviso against negligence of the master. 5 0 App. Cas. 217. The duty of the tug is discussed in The Steamer Webb, 14 Wall. (U. S.) 400, and in Sewell v. British Columbia Towing and Transportation Co., 9 Can. S. C. li. 527, where the conclusions arrived at coincide with those in Spaight v. Ted- castle, supra. As to when towage should be employed, see The “Nevada," 100 U. S. (10 Otto) 154. There is no maritime lien for ordinary towago services : Wcstrup v. Great Yarmouth Steam Carrying Co., 43 Oh. D 241. The legal effect of a contract to tow, and of misconduct or negligence of the tug occasioning danger, are treated at length by Lord Kingsdown in The M innehaha, Lush. 335, 347 ; also when the contract of 1047 CHAP. IV.] COMMON CARRIERS BY WATER. plaintiff’s ship was in the charge of a licensed pilot, under whose recom- mendations a tug was engaged. While being towed the plaintiff’s ship took the ground and sustained serious damage. The accident was found to have arisen from the misconduct of the tug, though the ship, by misconduct on her part, contributed to the accident. The House of Lords, reversing the Irish Courts, held that the plaintiff could recover ; and overruled the contentions of the respondents, that if those in charge of the ship had, in some earlier stage of the navigation, taken a course or exercised a control over the course taken by the tug, which they did not actually take or exercise, a different situation would have resulted, in which the same danger might not have occurred. The immediate cause of the accident was the negligently starboarding the tug’s helm. The negligence alleged on the part of the ship was that the compulsory pilot was negligent, and that the captain of the plaintiff’s ship was to blame in quitting the deck. Assuming that to be so, the ground of the judgment is thus stated by Lord Blackburn : 1 “ No negligence which Ground of the was over before the tug negligently starboarded her helm, could be con- j udgpnent of^ tributory negligence in the sense which is required to relieve the tug Lords °state°d from the consequences of that negligence. Be it that there was by Lord negligence in the ship, and those for whom the ship was responsible, in Blackburn. letting her get so dangerously near the bank before the helm was ported, as complete as the negligence of those who, in Davies v. Mann* left the fettered donkey dangerously rolling in the road, it forms no defence to an action against the persons who, by want of proper care, have injured the ship. To make a defence on this ground it must be shown that the injured party, or those with whom for this purpose he is identified, might, by proper care subsequently exerted, have avoided the consequences of the defendant’s want of proper care. ■* Where the wrongful act done by a pilot on board by compulsion of Negligence of law is the cause of a collision, we have seen 4 that, neither at common pilot co- law nor by statute , 5 does liability attach to the owner who has been ^^that of constrained to employ such person. The question, then, arises, what master and is the effect of his act upon the amount of damage that should be paid crew of by another ship coming into collision with the ship employing a com- col,lcim g s5ll P- pulsory pilot, when the injury arises from the negligence of the pilot and the master and crew of the other ship co-operating. It would seem that the owners of the ship employing the pilot not being in any way to blame, and the colliding ship being in fault, the ship in fault should pay the whole of the damages. The rule of the Admiralty, adopted by the Court of Appeal , 6 is different, and is that, where it is found that the navigation of one ship was bad through the wrongful act of the compulsory pilot, her owners recover only half the damage. It must be noted that where the pilot is to blame, though he is personally liable towage passes into a claim for salvage, The Liverpool, [1893] P. 154. Where tow and tug come into collision with a third vessel, both tow and tug being to blame, no claim by the tug in respect of services rendered to free the tow from its difficulties is maintain- able : The Due d' Aumale (No. 2), [1904] P. 60. The contract of towage is indivisible, and if unfulfilled the tug owners are not entitled on a quantum meruit : The Madras, [1898] P. 90. 1 6 App. Cas. 226. 2 10 M. & W. 546. * Hoffman v. Union Ferry Co., 47 N. Y. 176, is the case of negligence in the tug in using lights, which were not the lights prescribed by Congress, with negligence in a stranger causing injury to the tow. 4 Ante, 1043. 5 57 & 58 Viet. c. 60, ss. 503 (1 ), (2), 633. « The Hector, 8 P. D. 218, 225 ; The Quickstep, 15 P. D. 196. VOL. II. X NEGLIGENCE IN LAW. Liability of owners for act of any one on board while the vessel is in charge of a compulsory pilot. Divided culpability. Liability of owner where ship does injury when getting into dock under harbour- master’s direction in pursuance of statutory powers. Collision while in the charge of compulsory pilot. Relation between the towed vessel and any independent vessel with which it may come into contact. 1048 [book V. at common law, yet the Court of Admiralty cannot exercise its peculiar jurisdiction over him in an action for damages . 1 Notwithstanding the responsibility of the pilot for the navigation, the owners are responsible for the negligence or fault of any one on board while the vessel is in charge of a compulsory pilot, but acting in it independently of him . 2 Nor in a case of joint blame are the owners exempted from liability by having a compulsory pilot on board . 3 In summing up to the Trinity Masters in The Massachusetts , 4 Dr. Lushington thus expresses his view of the law in the case of a divided culpability : “ If you are of opinion that the accident arose partly from the fault of the pilot in not coming to an anchor in sufficient time, and partly from the defective weight of the anchor, the legal con- sequence is, that the damage having arisen from the joint default of the pilot and the owners, the responsibility of the loss must fall upon the owners of the ship ” — that is, if the accident is in any degree to be imputed to the master, his liability is not affected by the immunity the statute confers on him from responsibility for the defaults or neglects of the pilot . 5 The owner is not liable for damage caused by a collision brought about while his ship is going into dock under a harbour-master’s directions, in pursuance of a statutory authority . 6 To release themselves from liability where a collision is occasioned through the fault of a vessel in charge of a compulsory pilot, the owners have not only to show that the crew was under the pilot’s orders at the time of the order being given which produced the collision, but also that the order was such as the pilot was “ solely ” responsible for ; 7 of this the proof should be strict ; 8 when it is proved, the defendants are entitled to costs . 9 There remains to consider the relation between the towed vessel and any independent vessel with which the towing vessel may come into contact during the operation of towing . 10 The judgment in The Cleadon 11 concludes that the towing and the towed vessel with regard to strangers may be considered as a single 1 The XJrania, 10 W. R. 97 ; The Alexandria, L. R. 3 A. & E. 574 ; Flower v. Bradley, 44 L. J. Ex. 1 ; The Queen v. Judge of City of London Court, [1892] f Q. B. 273. 2 Yates v. Brown, 25 Mass., per Parker, C.J., 23 ; cp. Bussey v. Donaldson, 4 Dallas (Pa.), 206. 3 Netherland Steamboat Co. v. Styles, The Batavier, 9 Moo. P. C. C. 286. 4 1 W. Rob. (Adm.) 373. 6 Girolamo, 3 Hags'. (Adm.), 169, 176. 6 The Bilbao, Lush. 149 ; The Cynthia, 2 P. D. 52 ; and The Belgir, 2 P D. 57 n. As to refusal to obey the dockmaster, The Excelsior, L. R. 2 A. & E. 268. As to a plea of custom, The Hand of Providence, Swa. (Adm.) 107. As to a harbour-master’s liability, see The Rhosina, 10 P. D. 24, 131 ; Shaw, Savill and Albion Co. v. Timaru Harbour Board, 15 App. Cas. 429 ; The Apollo, [1891] A. 0. 499 ; Rency v. Magistrates of Kirkcudbright, [1892] A. C. 264; Wright v. Lethbridge, 7 Times L. R. 125 (C. A.); Niven v. Ayr Harbour Trustees, 24 Rettie, 883 ; Parker v. North British Ry. Co., 25 Rettie, 1059. 7 The Schwalbe, 14 Moo. P. C. C. 241 ; The Velasquez, L. R. 1 P. C. 494 ; The Livia, 25 L. T. (N. S.) 887. The position of the anchor is a matter within the scope of the pilot’s responsibility : The Monte Rosa, [1893] 1*. 23. 8 The Carrier Dove, 2 Moo. P. C. C. (N. S.) 260. The burden of proof of compulsory pilotage is on those setting up the defence : The Hanna, L. R. 1 A. & E. 283. 9 The Royal Charter, L. R. 2 A. & E. 362. 10 3 Kent, Comm. (12th ed.), 232, n. (d), by Mr. Holmes, Vessels in Tow. 11 14 Moo. P. 0. C. 92 ; The Ticondcroga, Swa. (Adm.) 215, explained in The Tasmania, 13 P. D. 110, 117, where The Druid, 1 W. Rob. (Adm.) 391, is considered. The Druid was the case whore a master of a tug, in order to exact payment of a sum of money he demanded, recklessly towed a vessel into collision. It was held the tug was not responsible. Sec also The Leamington, 32 L. T. (N. S.) 69; The Sin- quasi, 5 P. D. 241 ; The Bianca, 8 P. D. 91. 1049 CHAP. IV.] COMMON CARRIERS BY WATER. whole of which the motive power is in the tug and the governing part in the tow. In the case we have just been considering the duty of the tug is said to be to carry out the directions received from the ship . 1 A distinction is pointed out in The “ American ” and The “ Syria,” 2 Distinction where the “ governing power ” is in the tug, and not in the vessel towed. w here As it is the presence of this power in the towed vessel that establishes the rule of liability, so, when that power is absent, the liability ceases, the tug. Allowance must be made for the diminished power of manoeuvring consequent on having a ship in tow ; 3 but, if the pilot on the ship is guilty of negligence, the tug is not of necessity discharged ; for it then becomes the duty of those on the tug to act on their own responsibility for the avoiding of injury. This is pointed out in The “ Civilta ” and The“CiviUa” The “Restless,” 1 where a ship with a pilot on board and being towed, came into collision with a schooner. “ Both vessels,” said the Court , 5 /< ' 6S ' “ were responsible for the navigation, as has already been seen, the ship because her pilot was in general charge, and the tug because of the duty which rested on her to act upon her own responsibility in the situation in which she was placed. The tug was in fault, because she did not on her own motion change her course so as to keep both herself and the ship out of the way ; and the ship, because her pilot, who was in charge both of ship and tug, neglected to give the necessary directions to the tug, when he saw or ought to have seen that no precautions were taken by the tug to avoid the approaching danger. Had either the ship or the tug done its duty, under the circumstances there could have been no collision.” The decision in The Niobe 6 is the necessary outcome of these The Niche. principles . 7 There Sir James Hannen held that, where a tug with a vessel in tow comes into collision with another vessel, the towed vessel is liable ; since the towed vessel is bound to exercise control over the tug, and not merely to allow herself to be drawn, or the tug to go, in a course which will cause damage to another vessel. To this, again, there is an exception where the accident is caused by some sudden manoeuvre of the tug which the towed vessel could not control. In the case of The Niobe it was further contended that The Niobe was not liable because the mischief was not done by contact with her. The basis of the liability, however, is not physical impact, so much as a neglect of the duty to use that directing and forewarning agency which is rendered necessary by the position assumed . 8 1 Spaight v. Tedcastle, 6 App. Gas. 217, 133. 2 L. R. 6 P. C. 127. 3 The La Plata, Swa. (Adm.)220, 298; The “ Independence ,” Lush. 270, 14 Moo. P. C. C. 103. 4 103 U. S. (13 Otto) 699. As to the rule of damages, The “ Virginia Ehrtnan ” and The “ Agnese,” 97 U. S. (7 Otto) 309; The “ City oj Hartford” and The “ Unit” 97 U. S. (7 Otto) 323. 5 103 U. S. (13 Otto), per Waite, C.J., 702. 6 13 P. D. 55. In The Isca, 12 P. D. 34, the relative duties of the master of the vessel and the master of the tug are explained. In The Devonian, [1901] P. 221, the tow was held liable for misleading lights on the tug, but in The Harvest Home, [1904] P. 409, it was held that notwithstanding the tow’s duty there was besides an independent duty on the tug to exercise reasonable care and skill. 7 The Mary, 5 P. D. 14 ; The Jane Bacon, 27 W. R. 35. 8 As to the duty of a tug in charge of canal boats in America, Arctic Fire Insurance Co. v. Austin, 69 N. Y. 470 ; The “ Margaret,” 94 U. S. (4 Otto) 494 ; The Quickstep, 9 Wall. (U. S.) 665. As to the law in England where two or more ships are in tow of the same tug, Harris v. Anderson, 14 C. B. N. S. 499 ; Smith v. St. Lawrence Tow-Boat Co., (1873) L. R. 5 P. C. 308, followed in The Altair, [1897] P. 105. 1050 NEGLIGENCE IN LAW. Question, whether, when the tow is under com- pulsory pilotage, the immunity extends to the tug. The Mary. The N iobe in the House of Lords. Opinion of Lord Selborne. [book V. Moreover, if the negligence is that of the compulsory pilot, though the tow is clearly not liable, a question has been raised whether the exoneration extends to the tug . 1 On the analogy of the cases, where a pilot, not compulsory, is in charge of the tow, there would appear no just ground for this as a universal contention ; since,. in the event of manifest negligence in the pilot, those in charge of the tug are to act on their own responsibility. In the case of no orders being given, this is clearly so ; 2 while, in the case of definite orders beinggiven, very probably it is otherwise ; since, as Sir James Hannen points out in The N iobe, 3 in addition to the presence of the pilot, “ the officers of the tow are usually ... of a higher class, and better able to direct the navigation, than those of the tug ” ; and, allowing for exceptional cases of pal- pably wrong orders, the liability seems a harsh one. Dr. Lushington, in The Duke of Sussex , 4 followed by The Christina , 5 was of the opinion that the tug should be as much under the control of the pilot as the tow, and that the owner of the tug should be equally protected. In The Mary , 6 Sir Robert Phillimore distinguishes the two last- mentioned cases, though, in the case before him, the tug does not seem to have acted under the orders of the pilot, and further was guilty of independent negligence . 7 “ It has been said, indeed, in various cases,” says Sir Robert Phillimore , 8 “ that the tug and the vessel she has in tow are to be regarded as one vessel, but this rule has only been laid down for the purpose of rendering a ship in tow subject to the rules of navigation applicable to steamers ; in that sense only can they be treated as one vessel. The master of the tug has a separate contract and a separate responsibility from the pilot. In one sentence, it is by the exercise of free will that the ship takes the tug ; by compulsion of law that she takes the pilot.” That the tug may have a separate responsibility from the tow is undoubted ; and it seems necessarily to follow that when this separate responsibility exists a liability apart from the tow arises. Yet in the present state of the authorities there may be great doubt as to what facts will constitute separate responsibility. The decision in The Niohe received the approval of the House of Lords in an appeal in the same matter from the Court of Session on an insurance policy . 9 The policy provided that “ if the ship hereby insured shall come into collision with any other ship or vessel and the insured shall in consequence thereof become liable to pay, and shall pay, to the persons interested in such other ship or vessel any sum or sums of money,” the underwriters should pay a certain proportion. The House of Lords held that the collision of the tug with the damaged vessel must be taken to have been a collision of The Niobe within the meaning of the policy. Referring to Lord Kingsdown’s words in The “ Independence ” 10 that 1 The Lochlibo, 7 Moo. P. C. C. 427, approved in The Oalcfield, 1 1 P. D. 34 ; The “ Ocean Wave,” L. R. 3 P. C. 205. 2 The “ Civilta ” and The “ Restless,” 103 U. S. (13 Otto) 699 ; The Sinquasi, 5 P 1) 241. 3 13 P. D. 55, 59. * 1 W. Rob. (Adm.) 270. 5 3 W. Rob. (Adm.) 27. « 5 P. D. 14. 7 As to the responsibilities involved in employing a tug, see The Julia, 14 Moo. P. C. C. 210, Lush. 224. Where there is a thick fog, so that the vessel ought not to move at all, the having a compulsory pilot on board does not release from responsibility : The Borussia, Swa, (Adm.) 94, the case of towing a vessel at night from dock to dock Post, 1100. MP. D. 16 o M’Cowan v. Baine, [1891] A. C. 401. In re Margctts v. Ocean Accident and Guarantee Corporation, [ 1901 J 2 K. B. 792. n> 14 Moo. p. C. 115. 1051 CHAP. IV.] COMMON CARRIERS BY WATER. the tug “ may, for many purposes, be considered as a part of the ship to which she is attached ” ; and in “ The Cleadon ,” 1 that “ The “ Cleadon ,” being in tow of the tug, it is admitted she and the tug must be considered to be one ship ; the motive power being in the tug and the governing power in the ship that was being towed,” Lord Selborne 2 adopted the view that “ where a ship in tow has control over, and is answerable for, the navigation of the tug, the two vessels — each physically attached to the other for a common operation, that of the voyage of the ship in tow, for which the tug supplies the motive power,” may for many purposes properly be regarded as one vessel ; and was of opinion that they were so for the purpose in question. Lord Watson , 3 after stating that the decision went “ upon a special Opinion of rule of law, which has admittedly no application except as between Lord Watson, a ship and her tug,” said : “ The ship and her tug must be regarded as identical, in so far as the two vessels with their connecting tackle must be navigated as if they were one ship, and, the motive power being with the tug, must, in order to comply with the regulations for pre- venting collision at sea, be steered and manoeuvred as if they formed a single steamship ; and also, in so far as the ship towed, when she has (as in this case) the control of the tug, and the duty of directing the course of the tug, in accordance with these regulations, is responsible for the natural consequences of the tug being wrongly steered, through the neglect of her officers or crew to perform that duty.” Lord Bramwell dissented, refusing to recognise an exception to Grounds of the ordinary rules of the construction of contracts : 4 “I think an Act dis ®® nt o£ of Parliament, an agreement, or other authoritative document, ought B ramwe n. never to be dealt with in this way, unless for a case amounting to a necessity, or approaching to it. It is to be remembered that the authors of the document could always have put in the necessary words if they had thought fit. If they did not, it was either because they thought of the matter and would not, or because they did not, think of the matter. In neither case ought the Court to do it.” In The Quickstep 5 it was admitted that there was no interference The Quick- in fact by those on the tow with those on the tug ; and the Court held sle V- that as to the relations of tow and tug “ no general rule can be laid down,” 6 and that the question of liability must depend on the circum- stances of each case — the principle being that stated by Lord Tenterden, C.J., in Laugher v. Pointer , 1 that the liability exists only where the men navigating are to be deemed the servants of the hirer. Where, too, a tug in charge of her own master and crew undertakes to transport another vessel which, for the time being, has neither her master nor crew on board, the tug is necessarily responsible for the proper naviga- tion of both vessels ; and the principle is unaffected if “ a part or even the whole of the officers and crew of the tow are on board, provided it clearly appears that the tug was a seaworthy vessel properly manned and equipped for the enterprise, and from the nature of the under- taking and the usual course of conducting it, the master and crew of the tow were not expected to participate in the navigation of the vessel.” 8 i 14 Moo. P. C. C. 97. 2 M‘Cowcm v. Baine, [1891] A. C. 404. 3 L.c. 407. 4 L.c. 409. s 15 P. D. 196. The Devonian, [1901] P. 221. 6 L.c. 200. 7 5 B. & C. 578, adopted and approved by the Court of Exchequer in Quarman v. Burnett, 6 M. & W. 499. Ante, 601. s Per Butt, J., 15 P. D. 201, adopting the language of Clifford, J., in Sturgis v. Boyer, 24 How. (U. S.) 110, 122. Canal boats and barges in tow. The L. I \ Dayton. Liability of owner of tug limited by statute. Negligence must be shown to found liability. 1052 NEGLIGENCE IN LAW. [book v. It is well settled that canal boats and barges in tow are in charge of the tug, and that the latter is liable. 1 In The L. P. Dayton 2 the question of the relative liability of tow and tug was complicated by the tow charging both its own tug and another with negligence. In their defence the tugs, while refraining from imputing negligence to the tow, each sought to exculpate itself by inculpating the other. It was contended on behalf of the tow that a prima facie case of negligence arose, without the necessity of proof of specific acts of negligence by either or both tugs ; and that the plaintiff was entitled to a decree, the terms of which, as affecting each of the tugs respectively, would be dependent upon the nature of the evidence which they were bound to produce for the apportionment of the liability between them. In short, that the tow was entitled to stand by secure of the judgment, while the two tugs w’ere fighting out the question of the proportion of damages they were to contribute to the tow. This view did not commend itself to the Court, which considered the burden of proof to rest entirely on the tow to establish a case against either or both of the tugs ; and further, that the rule presuming faidt in case of collision against a vessel in motion, in favour of one at anchor, was not applicable. So far as the other tug’s liability went, the tow was identified with her own tug, “ so far, at least, that she cannot escape the consequences if the collision was caused wholly or in part by the fault of that tug.” So far as her own tug was con- cerned, there is no presumption in favour of the tow, “ because on her behalf all the alleged negligence is denied, and the contrary allegations of the libel cannot be legally maintained merely by corresponding allegations ” in the defence of the other. “ To hold otherwise,” the Court decided, “ would require that in every case, as between the tow and its tug, the latter should be required affirmatively to establish its defence against the presumption of its negligence. There is no ground in reason or authority, for making such an exception to the general rule, which requires the plaintiff, in the first instance, to establish by proof the allegations of its complaint.” And in considering this it must also be borne in mind that “ as between the tow and its tug the contract of towage involves a responsibility for loss upon the tug, onty by reason of the want of ordinary care ; for a tug is not a common carrier, and does not insure the safety of its tow.” 3 The liability of the owner of a tug for damage done to the tow by improper navigation of the tow is limited by statute, as in other cases. 4 An engagement to tow does not impose the liability of a common carrier. The burden is always on him who alleges the breach of the contract of towage to show that there has been negligence or unskilful- ness in the performance of the contract. Damage sustained by the tow does not of itself raise the presumption of fault in the tug ; and the degree of care required of the tug is no more than “ that degree of caution and skill which prudent navigators usually employ in similar services ” ; and “ there may be cases in which the result is a safe criterion by which to judge of the character of the act which has caused it.” 5 1 The Express, (1848), 1 Blatchf. (C. C. U. S. ) 305 ; Parsons, Law of Shipping, vol. i. 530?;. 2 120 U. S. (13 Davis) 337. 3 L.c. 351. 4 Wahlberg v. Young, 45 L. J. C. P. 783. See Merchant Shipping Act, 1804 (57 A 58 Viet. c. 60), s. 503 (I), (2). R The. Steamer Webb, 14 Wall. (U. S.). 400, 414, followed in The Propeller Burlington, 137 U. S. '30 Davis), per Fuller, C.J., 301. 1053 CHAP. IV.] COMMON CARRIERS BY WATER. Where the, towage contract is partially in the nature of salvage the Where the towing ship is not the less liable for a collision caused by negligence , 1 though the Courts incline to regard error or negligence in the salvor takes of the more leniently than in ordinary cases . 2 Of course the salvor can nature of recover if he is not guilty of negligence ; 3 but where a collision occurs through the negligent navigation of the salving vessel the damage caused is matter for deduction from the award of salvage . 4 There is no common employment between the servants of the tug No common and of the tow . 5 But where it was sought, in accordance with what employment was stated to be the American usage, to limit the liability of a tug and servants of tow, each of which was to blame for a collision with a third vessel, to the tug and judgment for one-half of the entire damage, Butt, J., said he was th« sc of the clearly of opinion that to do so would contravene the law. “ It is the right of every one who has sustained damage by the joint negligence of two individuals, and who sues them in tort and obtains judgment against them, to enforce it by execution against one or the other of the defendants, or both of them. That is the right of a plaintiff in a common law action. I see no reason why there should be a different one in an Admiralty action.” 6 All the damage is to be divided even when some is due to a collision by one of the defendants with some third vessel and thus arises out of a tort . 7 Charter -'parties and Bills of Lading. So far the common law or statutory aspect of the shipowner’s or Liability of master’s liability has been principally considered. This, however, is shipowner or most frequently varied by the terms of the charter-party or of the bill nj^iteci by of lading. charter- A charter-party 8 is an agreement in writing by which a shipowner Pjj'U or agrees to let an entire ship or part thereof to a merchant for the carriage of goods on a specified voyage or during a specified period for a sum Definition of money which the merchant agrees to pay as freight for their carriage . 9 of a A charter-party is an agreement between the shipowner and the charter-party, shipper with regard to the carriage of goods. Unless it is a demise of 1 The Thetis, L. R. 2 A. & E. 305. Towage is defined, “ the employment of one vessel to expedite the voyage of another, when nothing more is required than the accelerating her progress ” : The Princess Alice, 3 W. Rob. (Adm.), per Dr. Lushington, 140. As to salvage, see ante, 1045. 2 The C. S. Butler (No. 4), L. R. 4 A. & E. 178. 3 Mud-Hopper (No. 4), 40 L. T. 402 ; The City of Chester, 9 P. D. 182. 4 The Dwina, [1892] P. 58 ; The Cheerful, 11 P. I). 3. 5 The Julia, Lush. 224. Ante, 057. o The. Avon and Thomas Joliffe, [1891] P. 7, 8. See also The Englishman and The Australia, [1894] P. 239, distinguished in The Morgengry and The Blackcock, [1900] P. 1, because in that case there was a finding that the tow could and should, but did not, restrain the speed of the tug, and therefore both were jointly to blame for the collision ; and ante, 970 n. 2 . 7 The Frankland, [1901] P. 101. s 3 Kent, Comm. (12th ed.), 200 note, The Charter-Party. Potliier says: Le control de charte-parlie est le conlrat de louage des navires et hdtiments de mer. Traite des Contrats des Louages Maritimes, n. 1. See also his derivation of the term in the next paragraph. See Code de Commerce, Art. 273 ; also for the earlier English law, Beawes, Lex Mercatoria (Gth ed.), 187 ; Malynes, Lex Mercatoria (3rd ed.), 97. 9 Wharton, Law Dictionary, sub voce ; Abbott, Merchant Ships (14th ed.), 328 et seqq. The construction of a charter-party should be liberal to effectuate the intention of the parties, Dimech v. Corlelt, 12 Moo. P. C. C. 199. For the construction of charter- parties, Dahl v. Nelson, 0 App. Cas. 38 ; Tharsis Sulphur and Copper Co. v. Morel Brothers, [1891] 2 Q. B. 047. Definition of a bill of lading. Bill of lading a symbol only of the owner- ship of goods covered by it. 1054 NEGLIGENCE IN LAW. [book v. the ship, it gives him the use of no particular part which he can fix upon. The shipowner has a right to put the cargo into any part of the ship lie chooses. He has a right, if he can do it without damage to the cargo, to alter the place of the stowage even during the voyage. There is not one single inch of the ship to which the charterer has an exclusive right. His only right is to have his goods carried. 1 “ A bill of lading,” 2 says Buller, J., 3 “ is an acknowledgment under the hand of the captain, that he has received such goods, which he undertakes to deliver to the person named in that bill of lading. It is assignable in its nature ; and by indorsement the property is vested in the assignee.” 4 A bill of lading “ is an instrument of a twofold character. It is at once a receipt and a contract. In the former character it is an acknow- ledgment of the receipt of property on board his vessel by the owner of the vessel. In the latter, it is a contract to carry safely, and deliver. If no goods are actually received there can be no valid contract to carry or to deliver.” “ The doctrine is applicable to transportation contracts made in that form by railway companies and other carriers by land, as well as carriers by sea.” 5 According to mercantile custom bills of lading are drawn in sets of three, one of which being accomplished the others to stand void.” The handing over the bill of lading for any advance under ordinary circumstances, as completely vests the property in the pledgee as if the goods had been put into his own warehouse ; and the first person who for value gets the transfer of a bill of lading acquires the property. All subsequent dealings with the other two bills must in law be sub- ordinate to the first, and though possibly circumstances might arise justifying the shipowner in delivering the goods to the holder of the second in the absence of the first, yet “ the legal ownership of the goods must still remain in the first holder for value of the bill of lading, because he had the legal right in the property.” 6 Before the Bills of Lading Act the indorsee of a bill of lading could only sue in the name of the shipper. By the Act the rights and liabilities of the shipper pass to him. The contract therefore must receive the same con- struction it would bear between the shippers and the shipowners. 7 A bill of lading is not a negotiable instrument in the sense that a bill of exchange is 8 so as to become available in the hands of a holder without title, since it is not a representative of money but a contract 1 Per Lord Esher, M.R., The Queen v. Judge of City of London Court, [1892] 1 Q. B- 291, where note also his remark on The Alma, 5 Ex. D. 227. 2 3 Kent, Comm. (12th ed.) 207. 3 Caldwell v. Ball, 1 T. R. 210. Cp. Pollard v. Vinton, 105 U. S. (15 Otto) 7. * See Bills of Lading Act, 1855 (18 & 19 Viet. e. Ill), ss. 1, 2, commented on by Brett, L.J., Glyn v. East and West India Dock Co., 0 Q. B. D. 482 ; see also Burdick v. Sewell, 13 Q. B. D. 159; 10 App. Cas. 74. For the effect of a mortgage of a bill of lading under the Act, see per Lord Blackburn, 10 App. Cas. 97, who also (at 93) criticises unfavourably certain obiter dicta on the cffectof the Bills of Lading Act in The “Freedom," L. R. 3 P. C. 594. Cp. Code de Commerce, arts. 281 285 ; Sale of Goods Act, 1893 (56 & 57 Viet. c. 71), Part iv., ss. 38-48 ; also the Factors Act, 1889 (52 & 53 Viet, c 45). As to redelivery to pledgor of bill of lading to sell goods for pledgee, North- Western Bank v. Poynter, [1895] A. C. 50. 5 St Louis Iron Mountain, Per Lord Westbury, Barber v. Meyerslein, L. R. 4 H. L. 330. 7 Cox v. Bruce, 18 Q. B. D. 147. 8 The intention of the whole transaction has to be regarded : Coxc v. Harden, 4 East, 211; Shepherd v. Harrison, L. R. 5 H. L. 110; Pease v. Oloahcc, The “Marie Joseph L. R. 1 P. C. 219, 227 ; Thompson v. Dominy, 14 M. & W. 403. 1055 CHAP. IV.] COMMON CARRIERS BY WATER. for the performance of a certain duty, and a symbol merely of the ownership of the goods covered by it ; and if it is lost or stolen, the ownership of the loser will not be divested thereby. The bill of lading only represents the goods ; and in this instance the transfer of the symbol does not operate more than a transfer of what is represented . 1 In Glyn, Mills, & Co. v. East and West India Dock Co ., 2 Lord Sel- Glyn, Mills, borne, C., says : “ The primary office and purpose of a bill of lading, f^°^ e ' sl East although by mercantile law and usage it is a symbol of the right of j n dia Dock property in the goods, is to express the terms of the contract between Co. the shipper and the shipowner.” And Lord Hatherley says, in Barber v. Meyerstein : 3 “ When the vessel is at sea and the cargo has not yet arrived, the parting with the bill of lading is parting with that which is the symbol of property, and which, for the purpose of conveying a right and interest in the property, is the property itself.” As then a bill of lading is but the symbol of goods, a bill collusively Bill. of lading signed between the agent of the defendants and a third party, in the collusively absence of goods, will not charge the principal . 4 There is an exception Slgne( • to this rule where the negligence of the true owner has put it in the power of another ostensibly to occupy his position ; he may thereby become estopped from asserting his right as against a purchaser, who has been misled to his hurt by reason of such negligence . 5 Since the master is the shipowner’s agent in the making of every Master’s usual contract, his signature to the bills of lading is sufficient evidence j^ Iia 0 t f ure t0 of the truth of their contents to throw upon the shipowner the onus ] ac ii n g primd of falsifying them ; so that, though the master has no authority to sign facie evidence for a greater quantity of goods than is actually put on board, yet if j^®. lruth he has done so, the bill is presumptive evidence that the goods stated con t e nts. have been actually shipped till it is displaced by other evidence . 6 But when it is shown that the goods or some of them were not put on board, the shipowner is discharged from this primd, jade liability ; 7 yet till this is done the onus is on the shipowner . 8 i Gurney v. Behrend, 3 E. & B., per Lord Campbell, C. J., 634. a 7 App. Cas. 591, 596. See 18 & 19 Viet. c. Ill ; Jessed v. Bath, L. R. 2 Ex. 267 ; Fraser v. Telegraph Construction Co., L. R. 7 Q. B. 566, 571 ; Sewell v. Burdick, 10 App. Cas. 74 ; Bristol and West of England Bank v. Midland By. Co., [1891] 2 Q. B. 653 ; Leduc v. Ward, 20 Q. B. D. 475. For interpretation of deviation clause, see Glynn v. Margetson, [1893] A. C. 351. 3 L. R. 4 H. L. 326, quoted per Lord Blackburn, 7 App. Cas. 604. For the duty of the seller in dealing with the bill of lading, Sanders v. Maclean, 11 Q. B. D. 327. Apart from express contract or mercantile usage there is no legal duty on the charterer to deliver all the bills of lading or copies of them to the shipowner, though without them the consular manifest cannot be drawn up : Dutton v. Powles, 2 B. & S. 174. 4 Cox v. Bruce, 18 Q. B. D. 147 ; Grant v. Norway, 10 C. B. 665 ; British Mutual Banking Co. v. Cliarnwood Forest By. Co., 18 Q. B. D. 714 ; Whitechurch v. Cavanagh, [1902] A. C. 117. In Compania N aviera Vasconzada v. Churchill, [1906] 1 K. B. 237, the shipowner was held estopped by a misstatement of the master that goods which were damaged before shipment ware shipped in good order and condition. 5 Gurney v. Behrend, 3 E. & B. 634. 6 McLean v. Fleming, L. R. 2 H. L. Sc. 128 ; Hvbhersty v. Ward, 8 Ex. 330. Cp. Missouri Pacific By. Co. v. McFadden, 154 U. S. (47 Davis) 155. 7 Brown v. Powell Duffryn Steam Coal Co., L. R. 10 C. P. 562, where the effect of sec. 3 of the Bills of Lading Act, 1855 (18 & 19 Viet. c. Ill), making the master’s signature to a bill of lading conclusive evidence against him when in the hands of a bond fide consignee for value, was discussed. Mediterranean and N. Y. Steamship Co. v. A. F. & D. Mackay, [1903] 1 K. B. 297. 8 Smith db Co. v. Bedouin Steam Navigation Co., [1896] A. C. 70 ; Parsons v. New Zealand Shipping Co., [1901] 1 Q. B. 548, a case argued on the ground of estoppel under sec. 3 of Bills of Lading Act, 1855, supra. Defendants were held not precluded from showing a mistake in the margin of the bill of lading, which did not affect the “ nature, quality or quantity of the goods,” as the section was concerned only with “ the identity of the goods shipped with those represented as shipped.” 1050 NEGLIGENCE IN LAW. Acknowledg- ment by master as to condition of goods. Charter- party may defeat claim of shipper against shipowner. [BOOK V. Where the master signs a bill of lading without anything in the document to show that he signs as agent he becomes personally liable to the shipper. The shipowner who has authorised the signature is also liable. Thus there are two separate liabilities for the per- formance of one contract. But the shipper does not obtain concurrent remedies ; he has his right of election, and as either master or owner may be sued by, so cither may sue the shipper . 1 An acknowledgment by the master as to the condition of goods received on board extends only to the external condition of the cases, excluding any implication as to the quantity or quality of the article, its condition when received on board, or whether properly packed or not in the boxes ; and if the defendant’s evidence raises a reasonable inference of damage resulting from imperfection in the goods themselves when packed, or before, the burden is thrown upon the plaintiff to rebut this . 2 In some cases the claim of the shipper against the shipowner is defeated by the charter-party. Lord Tenterden , 3 delivering the judgment of the House of Lords in Colvin v. Newberry , 4 enunciated two propositions : first, that in the common case of goods shipped on board a vessel, of which the shipment is acknowledged by a bill of lading signified by the master, if the goods are not delivered, the skipper has a right to maintain an action against the owner of the ship ; second, “ that if the person in whom the absolute property of the ship is vested charters that ship to another for a particular voyage, although the absolute owner provides the master, crew, provisions, and everything else, and is to receive from the charterer of the ship a certain sum of money for the use and hire of the ship, an action can be brought only against the person to whom the absolute owner has chartered the ship, and who is considered the owner fro tempore during the voyage for which the ship is chartered. It cannot be maintained against the person who has let out the ship on charter, namely, the absolute owner.” The House of Lords held that the case before them came within the second proposition. Yet primd facie the shipowner is responsible , 5 and his liability continues till a demise of the ship is shown ; 6 1 Repetto v. Millar’s Karri and Jarrah Forests, [1901] 2 K. B. 300. 2 Clark v. Barnwell, 12 How. (U. S.) 272. When there is no bill of lading the mere receipt of the goods will bind. This is agreeable to the Civil Law. Recipit autem salvum fore, utrwrn si in navemres missce, ei assignatce sunt, an etsi non sint assignatce, (whether there is a bill of lading or not) hoc tamen ipso quod in navcm missce sunt, receptee videnlur : I). 4, 9, 1, § 8. Where goods arc received, “ weight, value and contents unknown,” the acknowledgment of the master as to the condition of the goods extends only to the external condition of the case : ” Parsons, Law of Shipping, vol. i. 197, cited by Brett, J., Leheau v. General Steam Navigation Co., L. R. 8 C. P. 92. For the law of stoppage in transitu, see Abbott, Merchant Ships (14th ed.), 811 etscqq., also per Lord Blackburn, Kemp v. Falk, 7 App. Cas. 585. Bcthell v. Clark, 20 Q. B. D. 015, approved Lyons v. Hoffnun g, 15 App. Cas. 391 ; Delaurier v. Wyllie, 17 Rettie, 107. If during the transit the property in goods is transferred by the consignee’s indorse- ment and delivery of the bill of lading, the consignor loses his right to stop in transit : Cuming v. Brown, 9 East, 506. The earliest reported case appears to be Wiseman v. Vandepult (1690), 2 Vern. 203. 3 In common with the other judges of the K. B. lie had joined in a judgment in this case which had been overruled in the Exchequer Chamber. In the Lords he was the only Law Lord present, and moved to affirm the judgment of the Exchequer Chamber, adding, “ I am inclined to think that the judgment of the Court of Exchequer Chamber is right.” 4 1 Cl. & F. 283, 297 ; Wagstaff v. Anderson, 5 C. P. D. 171. 6 The St. Cloud, B. & L. (Adm.) 4, 15. o Sandemann v. Scurr, L. R. 2 Q. B. 86. In the Omoa, l v ; seas covers a loss by stranding or collision, although arising from the aneTco. "'" tr negligence of the master, or crew, because the insurer assumes to indemnify the assured against losses from particular perils, and the assured does not warrant that his servants shall use due care to avoid them .” 5 On the other hand, it is held that the ordinary contract of a 1 12 App. Cas. 510 ; Trinder, Anderson and Co. v. Thames and Mersey Marine Insurance Co., [1898] 2 Q. B. 114, 120 ; The Southgate, [1893] P. 329. 2 L.c. 512. 3 [1894] P. 220. 4 Per Lord Esher, M.R., l.c. 232. 5 Liverpool SteamCo .v. Phenix Insurance Co., 129 U. S. (22 Davis) 397, 438, cited and adopted Richelieu Navigation Co. v. Boston Insurance Co., 130 U. S. (29 Davis) 421. “ It is conclusively settled, in this country and in England, that a policy of insurance, taken out by the owner of a ship or goods, covers a loss by perils of the sea or other perils insured against, although occasioned by the negligence of the master or crew or other persons employed by himself ” : Phoenix Insurance Co. v. Erie Transportation Co., 117 U. S. (10 Davis) 312, 323 ; California Insurance Co. v. Union Compress Co., 133 U. S. (20 Davis) 387. 1070 NEGLIGENCE IN LAW. (3) Loss by fire. Negligence for which shipowner is responsible producing fire. (4) Barratry. (5) King’s enemies. (0) Pirates. [book V. carrier involves an obligation to use due care and skill in navigating the vessel and in carrying the goods; while an exception in the bill of lading of perils of the sea or other specified perils does not excuse the carrier from that obligation or exempt him from liability for loss or damage from one of those perils to which the negligence of himself or his servants has contributed. 1 But in the same Court it was decided that where a vessel is stranded while going at full speed in a fog the burden of proof is on the insured to show that the loss is not through want of ordinary care in navigation in a case where such want of care is an excepted peril ; for though the fog may be the cause of the accident, the other circumstance — the going at full speed — raises a stronger counter presumption ; and in the case in question this was even more undoubtedly the case, since going at speed in a fog was contrary to a statutory regulation. 2 (3) Another exception incorporated into special contracts for the conveyance of goods by sea is against liability for loss by fire. A fire caused by lightning, of course, brings no liability, since it is referable to the act of God. 3 In a bill of lading or a charter-party, the exception against loss by fire will only protect where the damage is not attributable to negligence ; for which the shipowner is responsible; since an undertaking by the shipowner is implied that the master and the crew shall use ordinary care with regard to the carriage of the goods. 4 If, however, the case set up is that there has been negligence, the burden of proof will be on the shipper ; unless the facts of the case themselves shift the burden of proof, as in the illustration put by Willes, J., in his judgment in Czech v. General Steam Navigation Co. 5 (4) Barratry 6 has been defined as “ not confined to the running away with the ship,” but as comprehending “ every species of fraud, knavery, or criminal conduct in the master by which the owners or freighters are injured.” 7 Ignorance or mere negligence is not suffi- cient ; there must be fraud, 8 or at least wilful misconduct. 9 The cases of loss or damage occasioned (5) By the King’s enemies, (6) By pirates or robbers, have already been considered. 10 1 See 129 U. S. (22 Davis) 438. 2 Richelieu &c. Navigation Co. v. Boston Insurance Co., 130 U. S. (29 Davis) 408. s Ante, 879. 4 Lloyd v. General Iron Screw Collier Co., 3 H. & C. 284 ; Chartered 3Icrcanlilc Bank of India v. Netherlands India Steam Navigation Co., 10 Q. B. D. 521. 5 L. R. 3 C. P. 19 ; Transportation Co. v. Downer, 11 Wall. (U. S.) 129. There was no negligence clause in the contract of carriage in Cunard SS. Co. v. Marten, [1903] 2 K. B. 511, where it is held that the suing and labouring clauses are inapplicable to the contract of insurance there. 6 For definitions of all these terms see the First Schedule to 6Edw. VII., c. 41 : and s. 30, sub.-s. ( 1 ) (2). Abbott, Merchant Ships (14th ed.), 244; 3 Kent, Comm. (12th ed.) 305; Vin. Abr. Barretors ; Com. Dig. Barratry ; Bac. Abr. Merchant and Merchandise (1), Of Marine Insurance, Loss by Barratry, 4(52. i Vallejo v. Wheeler, 1 Cowp. 143, 155. Where through the negligence of the ship- owner the mariners barratrously smuggled goods on board whereby the ship was seized and forfeited, underwriters were held not liable on a policy of insurance : Pipon v. Cope, 1 Camp. 434. 8 Pliyn v. The Royal Exchange Assurance Co., 7 T. R. 505. See note, Negligence of Assured, by Mr. Holmes, 3 Kent, Comm. (12th ed.), 302. 9 Earle v. Rowcrojt, 8 East, 120. A barratrous act of the master, followed by capture and seizure is not, as is erroneously supposed by Arnold, Insurance (1st ed.), vol. ii. 838, an exception to the rule that “ in insurance you look to the proximate cause, and not to the remote one ” : Cory v. Burr, 8 App. Cas. 398. io Ante, 88 1 . 1071 chap, iv.] COMMON CARRIERS BY WATER. (7) Arrests or restraints of princes, rulers, and peoples, riots, strikes (7) Arrests or or stoppage of labour, are terms of limitation often added in bills of restraints of lading and charter-parties. This class of exceptions has reference to embargoes, 1 or blockades, 2 or to the decrees of prize courts, 3 or other processes resulting in the detention 4 of the cargo ; as, for instance, the German investment of Paris. 5 It does not include ordinary civil process, 6 nor the act of tumultuous mobs, since “ peoples ” means “ the governing power of the country.” 7 But it includes the risk of seizure and does not need an actual seizure. 8 In the case just cited it was held that apart from an exception in a bill of lading the master would be justified to refrain from encountering a peril such as in that case ; where the voyage was from Hong-Kong to Yokohama and war between China and Japan had just been declared, and several Chinese ships of war were in the neighbour- hood of Hong-Kong. The rule of the master’s duty is laid down in Notara v. Henderson : 9 “a fair allowance ought to be made for the difficulties in which the master may be involved. . . . The place, the season, the opportunity and means at hand, the interests of other persons concerned in the adventure whom it might be unfair to delay for the sake of the part of the cargo in peril ; in short all cir- cumstances affecting risk, trouble, delay and inconvenience must be taken into account.” The legal effects of a restraint by a blockading force and a restraint arising from the operation of a sanitary law are not distinguishable. 10 (8) The cases of loss by damage occasioned by explosion, bursting (8) Loss by of boilers, breakage of shafts or any latent defect in hull, machinery, cx pl° slon > &c - or appurtenances, have already been sufficiently dealt with. 11 1 Botch v. Edie, G T. R. 413 ; Aubert v. Gray, 3 B. & S. 163. 2 Geipel v. Smith, L. R. 7 Q. B. 404, where the question of the right of the charterer to throw up the contract was considered. See also Jackson v. Union Marine Insurance Co., L. R. 8 C. P. 572 (where Bovill, C.J., dissented), affirmed in the Ex. Ch. L. R. 10C. P. 125. 3 Stringer v. English and Scottish Marine Insurance Co., L. R. 5 Q. B. 599. 4. “ Detention ” is “ a taking with intent to return the thing taken ; as where a ship is arrested by an embargo, or stopped for search, or detained in port by an actual blockade thereof, or, perhaps, by being lawfully restrained from entering her port of destination by a blockading force ” : Parsons, Marine Insurance, vol. i. 584. 5 Rodoconachi v. Elliot, L. R. 9 C. P. 518 ; Smith v. Rosario Nitrate Co., [1893] 2 Q. B. 323 ; [1894] 1 Q. B. 174. 6 Finlay v. Liverpool and Great Western Steamship Co., 23 L. T. (N. S.) 251. 7 Nesbitt v. Lushington, 4 T. R. 783, but Lord Kenyon, C.J., says : “ I think that this loss falls within a capture by pirates.” See, however, Johnston v. Hogg, 10 Q. B. D. 432, where the meaning of the terms “ capture ” and “ seizure ” are considered, and Cory v. Burr, per Lord Selborne, C., 8 App. Cas. 395 ; Robinson Gold Mining Co. v. Alliance Insurance Co., [1904] A. C. 359 ; Dunn v. Buclcnall Brothers, [1902] 2 K. B. 614. The restraints must be actual, not merely anticipated, though the anticipation is reasonable : Atkinson v. Ritchie, 10 East, 530 ; in this case there was “ a general rumour of a hostile embargo being laid on British ships.” In The “ Teutonia,” the master was informed by the pilot, though incorrectly, that war had been actually declared two days before : it was held that he “ was entitled to pause and take a reasonable time to make further inquiries,” and “ was guilty of no unreasonable delay in not returning to Dunkirk before the 19th July, when war was actually declared ” : L. R. 4 P. C. 171, 179, 180. In Atkinson v. Ritchie, 10 East, 530, the master on a general inquiry sailed away without cargo. The exception does not apply to vessels arrested on civil process : Crew Widgery & Co. v. Great Western Steamship Co., W. N. 1887, 161. In Janson v. Driejontcin Consolidated Mines, [1902] A. C. 484, loss before the beginning of the war, though by an act leading up to it, was yet held not within the exception of a policy. s Nobel's Explosives Co. v. Jenkins <0 Co., [1896] 2 Q. B. 326. o L. R. 7 Q. B. 237. to Miller v. Law Accident Insurance Co., [1903] 1 K. B. 712. it Ante, 1025 and 1061. 1072 NEGLIGENCE IN LAW. 9) Collision. (10) Strand- ing. Exception only exempts the shipowner from the liability of a common carrier. Willes, J., in Notnra v. Henderson. Effect of the words “ all other condi- tions as per charter.” Law summarised. [BOOK V. (9) Collision is so large a subject that it will require a chapter to itself. 1 (10) The case of stranding has been already considered. 2 Lastly, the law is now thoroughly settled that the exception in a bill of lading only exempts the shipowner from the liability of a common carrier, and not from the want of reasonable skill, diligence, and care. “ This,” says Willes, J., 3 “ is settled, so far as the repairs of the ship are concerned, by the judgment of Lord Wensleydale in Worms v. Storey ; 4 as to her navigation, by a series of authorities collected in Grill v. General Iron Screw Collier Co. ; 5 and as to her management, so far as affects the case of the cargo itself, in Laurie v. Douglas ; 6 where the Court (in a judgment unfortunately not reported at large) upheld a ruling of Pollock, C.B., that the shipowner was only bound to take the same care of the goods as a person would of his own goods, viz., ‘ordinary and reasonable care.’ These authorities, and the reasoning upon which they are founded, are conclusive to show that the exemption is from liability for loss which could not have been avoided by reasonable care, skill, and diligence, and that it is inapplicable to the case of a loss arising from the want of such care, and the sacrifice of the cargo by reason thereof.” The words “ all other conditions as per charter ” do not, on the principles already enunciated, incorporate into a bill of lading the exception of “ stranding occasioned by the negligence of the master ” ; and a casualty which proper foresight and skill in the commanding officer might have avoided — e.g., if a compass on an iron vessel was not protected so as to travel correctly and an accident resulted — is not to be considered an “ accident of the sea.” 7 The law we have been considering may be thus summarised : If goods are lost or damaged while being carried by sea with the common law liability of a common carrier, the common carrier is liable in any event, unless, that is, he brings himself within the common law ex- ceptions of the act of God, or the king’s enemies ; or to revert to the expression of the old law, unless the loss was through some cause which left the carrier no remedy over. If the contract of carriage is regulated by a bill of lading the shipowner, by proving that the loss is within one of the perils excepted by his contract, -will be discharged, though not absolutely; since it is within the rights of the plaintiff to prove that the shipowner was negligent. Thus, the attribution of loss to an excepted peril will only exonerate from liability where there has been no negligence ; or, if there has been negligence, then there must be a clear exception to that effect to excuse ; while in cases outside the exceptions the shipowner is liable even apart from negligence. 8 i Post, 1079. 2 Ante, 10G0 ns. 3 Notara v. Henderson, L. R. 7 Q. B. 230. i 1 1 Ex. 430. 5 L. R. 1 C. P. GOO ; L. R. 3 C. P. 470. o 1.5 M. & W. 740. i Baziny. Steamship Co., 3 Wall. Jun. (U. S. Giro. Ct.) 220 ; Richelieu, dec. Navigation Co. v. Boston Marine Insurance Co.. 1.30 U. S. (29 Davis) 408 ; The Kestrel, 0 P, D. 182. 8 Ante, 1025. Davis v. Garrett, 0 Bing. 710, approved Royal exchange Shipping Co. v. Dixon, 12 App. Gas. 11, 10 ; and Scaramanga v. Stamp, 5 G. P. D., per Cockburn, G.J., 209. In The “ Norway,” 3 Moo. P. G. C. (N. S.) 245, it was assumed that, had the pilot been negligent, the owner would be liable ; but the decision was, that the facts did not indisputably point to the conclusion of negligence. In Czech v. General Steam Navigation Co., L. R. 3 G. P. 19, Willes, J., says: “ The liability of the defendants for their negligence, notwithstanding the general words of the exception in the bill of lading, has been fully gone into in many cases which have been referred to by my Lord, and I will only add that the law so laid down by our Courts is consistent with the views of modern jurists, and will be found in many of the maritime codes of Europe.” The authorities are referred to in a note to the report, most probably by t he learned judge. 1073 CHAP. IV.] COMMON CARRIERS BY WATER. The general rule of law prevails in this branch of law also — it is Judge to for the judsre to say whether any facts have been established by decide evidence from which negligence may be reasonably inferred, but it is ev j c i ence 0 f for the jury to say whether from these facts negligence ought to be negligence, inferred . 1 jury to decide where there is n 7 • negligence. Delivery. 6 6 As to delivery— the rules of delivery after sea carriage are in the Delivery main identical with those relating to delivery after land carriage ; so that to the general considerations which have been already presented , 2 little need here be added. Delivery must be according to the practice and custom usually observed in any port or place of delivery — i.e., the goods are most usually sent to the wharf with directions to the wharfinger not to part with them until the freight and other charges are paid , 3 provided the master be doubtful of payment ; since by parting with the possession, the master loses his lien for the freight . 4 The master must in any event allow a reasonable time 5 for the Raster’s consignee to receive goods, and is not justified in putting them on the dut y- quay as soon as he arrives . 6 The duty of making proper provision for the discharge of cargo is usually by custom on the consignee ; 7 but the master is bound to give up the goods to the holder of the bill of lading if he presents it (for it is in the nature of a title-deed 8 ) at a reasonable time ; 9 and is justified in delivering the goods to the first person who presents a bill of lading (though three have been signed) if it is produced to him in good faith ; and he is not to embarrass himself by considering what has become of the others . 10 If he has any notice or i Metropolitan By. Co. s. Jackson, 3 App. Cas. 197. 2 Ante, 898. 3 Tharsis Sulphur and Copper Co. s. Morel Brothers, [1891] 2 Q. B. 647 ; Good v. Isaacs, [1892] 2 Q. B. 555. As to conditions, &c., ante, 892. 4 Abbott, Merchant Ships (5th ed.), 247, (14th ed.), 563. 3 Ante, 834. 6 Houlder v. General Steam Navigation Co., 3 F. & F. 170. t Per Tindal, C.J., Gatliffe s. Bourne, 4 Bing. N. C. 314, 329 ; Ford v. Cotesworth, L. R. 4 Q.B. 127; L. R. 5 Q. B. 544; Cunninghams. Dunn, 3 C. P. D. 443; Fowlers. Knoop, 4 Q. B. D. 299 ; Hick s. Rodoconaclii, [1891] 2 Q. B. 626, considered by Wright, J., Castle- gate Steamship Co. s. Dempsey, [1892] 1 Q. B. 54, where charter-parties in common use are divided into three classes : 1st, those in which a limited time is prescribed within which the unloading is to be completed ; 2nd, those in which no time is prescribed ; 3rd, those in which time is fixed not directly but by reference to the custom of the port of discharge. Wright, J.’s, judgment was reversed in the Court of Appeal, [1892] 1 Q. B. 854, on the ground that the case was governed by Postlethwaite s. Freeland, 5 App. Cas. 599, that discharge must he with all reasonable despatch in the circum- stances. Under a charter-party providing for discharge at the usual berth as customary, the obligation to unload does not commence till the ship is in the usual berth, with the assent of the proper authorities ; and “customary” has reference to the course of business at the port : Good s. Isaac, [1892] 2 Q. B. 555, and has no reference to time. Tapscott s. Balfour, L. R. 8 C. P.46; Loclchart s. Falk, L. R. 10 Ex. 132, followed in Dunlop s. Balfour, [1892] 1 Q. B. 507, and Gardiner s. Macfarlane, 16 Rettie, 658, where the signification of the word “ demurrage ’’ is considered. See also Wyllie s. Harrison, 13 Rettie, 92; and The Jacderen, [1892] P. 351, where the words to be con- strued were “ steamer to be discharged as fast as she can deliver.” The Lyle Shipping Co. s. Cardiff Corporation, [1900] 2 Q. B. 638 : Hidthcn s. Stewart, [1903] A. C. 389 ; The Arne, [1904] P. 154. 3 Postlethwaite s. Freeland, 5 App. Cas. 599 ; Bourne s. Gatliffe, 11 Cl. & F. 45. » Erichsen s. Barkworth, 3 H. & N. 601. 10 Per Lord Cairns, Glyn, Mills Co. s. East and West India Docks, 7 App. Cas. 598 ; Barber s. Meyerstein, L. R. 4 H. L., per Lord Westbury, 336. As to the unlimited proposition stated in Fearon s. Bowers, 1 H. Bl. 364, see per Baggallay, L. J., 6 Q. B. D. 503, and in the House of Lords per Lord O’Hagan, 7 App. Cas. 601, per Lord Black- burn, 610 el seqq., per Lord Fitzgerald, 616, who unite in condemning it. Master may warehouse the goods in certain con- tingencies. Implied power of the master to warehouse goods. 1074 NEGLIGENCE IN LAW. [book v. knowledge of the whereabouts of the other parts of the bill of lading he “ must interplead, or deliver to the one who he thinks has the better right at his peril if he is wrong.” 1 If the consignee or the holder of the bill of lading does not claim delivery within a reasonable time, the master may land and warehouse the goods in a statutable warehouse 2 at the expense of the owner. 3 The general rule is that delivery at the wharf, in the absence of special directions to the contrary, discharges the master. 4 There must, notwithstanding, be a delivery at the wharf to some person authorised to receive the goods, or due previous notice must be given to the consignee of the time and place of delivery ; and the master cannot discharge himself by leaving them exposed and unprotected there. So, too, if the master gives a receipt for goods left on the quay for shipping, they are as much at the risk of the ship as if actually put on board. The master’s responsibility continues till actual delivery or some act equivalent to, or a substitute for delivery ; as if the consignee has previously assumed charge of the goods ; or has notice of the time and place of delivery and the goods have been duly separated and designated for his use. 5 If there is loss through the delay or default of the consignee, the consignee is liable for the same. 6 Where goods can neither be landed nor remain where they are, it seems a legitimate extension of the implied agency of the master to hold that, in the absence of all advices, he has authority to carry or send them on to such other place as, in his judgment, prudently exercised, 1 Per Lord Blackburn, L. R. 7 App. Cas. 013. 2 Merchant Shipping Act, 1894 (57 & 58 Viet. c. GO), ss. 493, 494. These sections are considered, Furness v. White, [1894] 1 Q. B. 483, reversed in H. of L., [1895] A. C. 40, and are reproductions of ss. 67 .and 08 of 25 & 26 Viet. c. 03. Where there is no such warehouse, see Mors le Blanch v. Wilson, L. R. 8 C. P. 227. In this case the rule was also laid down that a plaintiff may recover against a defendant, costs incurred in defending an action in respect of matters as to which the defendant is under liability to the plaintiff. “ As a general rule,” said Bovill, C. J., at 233, “ he must not recklessly defend the action, and so heap upon the person eventually liable, unnecessary expense. But, on the other hand, if he places all the facts before the person whom he seeks to charge, and that person declines to intervene, and leaves him to take his own course, it surely must be for the jury to say whether it was reasonable to defend, and whether the defence was conducted in a reasonable manner.” This had previously been held in Broom, v. Hall, 7 C. B. (N. S.) 503 ; but this case was not referred to, nor is it in Baxcndale v. L. C. & D. By. Go., L. R. 10 Ex. 35, in the Exchequer Chamber, where Mors le Blanch v. Wilson was disapproved (Lush, J., dissenting). But in Hammond <0 Co. v. Bussey, 20 Q. B. D. 79, the two earlier cases were discussed, and Bnxendalc v. L. C. <0 J). By. Co. was distinguished and explained on the ground that in the Ex. Ch. the one point discussed was whether the defence in the action, the costs of which were the subject of dispute, was reasonable ; and the Court decided it was not. That being so, the costs sued for could not be recovered. The proposition of law that was negatived in Baxendale's case was, therefore, that costs of unreasonably defending an action could be recovered if the incurring such costs had been of use, in loading to the assess- ment of damages which could be recovered over in the second action against the defendant. But it is at least doubtful whether Mors le Blanch v. Wilson did decide this. What that case undoubtedly decided is that costs could be recovered where the action was reasonably defended ; and this is good law. It is good policy, however, for the surety to let his principal know, and to take directions from him : Smith v. Compton, 3 B. & Ad. 407 ; for notice operates as an estoppel : Parker v. Lewis, L. R. 8 Ch., per Mellish, L.J., 1058, citing Bullcr, J., Duffield v. Scott, 3 T. R. 377. Agius v. Great Western Colliery Co., [1899] 1 Q. B. 413, in the 0. A., where Hammond v. Bussey was followed. Cp. Oliver v. Hank of England, [1901 1 1 Ch. 052, 664 ; The Millwall, [1905] P. 155. Costs of an appeal not authorised by the party against whom indemnity is claimed are not recoverable : Maxwell v. British Thomson Houston Co., [1904] 2 K. B. 342. Assicurazioni Generali de Trieste v. Empress Assurance Corporation, 23 Times L. R. 700. 3 Howard v. Shepherd, 9 C. B. 297, 321; Er ichsen v. Hark worth. 3 11. & N. 601, in Ex. Oh. 894. t Hyde v. Trent and Mersey Navigation Co., 5 T. R. 389. • r > 3 Kent, Comm. 215. Ante, 904. 3 Shirwell v. Shaplock, 2 Chit. Rep. (K. B.) 397. chap, iv.] COMMON CARRIERS BY WATER. 1075 appears most convenient for their owner, and to charge the expenses, properly incurred in doing so, on him. 1 If the master refuses to discharge the cargo the shipowner will be responsible ; but, if the shipowner is prevented from carrying out his share of the discharge by the acts of persons over whom he has no control, the case comes within the same category as the case of non- delivery caused by some physical misfortune over which he has no control. 2 The master cannot rightfully refuse to land the cargo before the freight is paid or secured ; for the consignee has a right after the goods are unloaded to examine them, and see whether they are damaged, and to have any damage ascertained ; and after the discharge the shipowner has the right to detain the cargo in custody until payment or security of the freight. 3 2. CARRIERS OF PASSENGERS BY SEA. “ Passengers,” says M'Culloch, 1 “ are individuals conveyed for Definition, hire from one place to another on board ship.” This definition is, however, varied by the Merchant Shipping Act, 1894, 4 s. 267, which says that the expression “ passenger ” shall include any person carried in a ship other than the master and crew, and the owner, his family and servants. 5 Since the position of the master of a ship involves such arduous Authority of responsibilities, the authority he is empowered to exercise over passen- masfcer - gers in his ship is altogether exceptional ; and their duty of conformity to his directions is most strictly binding. 6 The master’s control is absolute in all things necessary for the safe and proper conduct of the ship ; 7 and he may use force if the safety of the ship or of those on board seems to require it. 8 Thus, if a master were sued for not 1 Cargo ex “Argos," L. R. 5 P. C. 134, 165. As to where goods had been partially landed under a bill of lading and the consignee claimed delivery to himself of other goods not landed, but was refused, see Wilson v. London, cfcc. Steam, Navigation Co., L. R. 1 C. P. 61 ; Oliver v. Colven, 27 W. R. 822 ; The “ Energie," L. R. 6 P. C. 306. 2 Budgelt v. Binninglon, [1891] 1 Q. B. 35. Cp. Castlegate Steamship Co. v. Dempsey, [1892] 1 Q. B. 54; (C. A.) 854. 3 Abbott, Merchant Ships (14th ed.), 570; 3 Kent, Comm. 220, n. (c), where Story, J.’s, judgment in The Volunteer and, Cargo, 1 Sumn. (U. S. Circ. Ct.) 551, is dissented from. Freight is payable concurrently with the delivery of the goods, which must be within a reasonable time after arrival : Paynter v. James, L. R. 2 C. P. 348, 355 ; Duthie v. Hilton, L. R. 4 C. P. 138. The law as to delivery of goods and lien for freight is consolidated in the Merchant Shipping Act, 1894 (57 & 58 Viet. c. 60), ss. 492-501. The moment that the freight has been paid over by the consignees to persons entitled to receive it, the shipowner’s lien is gone ; Tagart, Beaton ct- Co. v. James Fisher & Sons, [1903] 1 K. B. 391 : W diner v. Dene Shipping Co., [1905] 2 K. B. 92. 4 Dictionary of Commerce, sub voce. See The. Hanna, L. R. 1 A. & E. 283. The payment of a fare was held necessary to constitute a passenger within the meaning of the compulsory pilotage sections of 17 & 18 Viet. c. 104 : The “ Lion," L. R. 2 P. C. 525, where the wife and father-in-law of the captain who were on the ship by invitation of the captain and without the privity of the owners, were held not to be passengers within the meaning of the Act, so as to exonerate the owners from liability for damage caused bv the pilot’s default. See the Merchant Shipping Act, 1894 (57 & 58 Viet, c. 60), ss.'267, 625. s 57 & 58 Viet. c. 60. Part III., ss. 267-368. Ellis v. Pearce, E. B. & E. 431. Sec 6 Edw. VII. c. 48, Part II. e Dana, Seaman’s Manual (9th ed.), 132, and c. X. 220-229; Abbott, Merchant Ships (14th ed. ), 900. Parsons, Law of Shipping, vol. i. 609-647. 7 King v. Franklin, 1 F. & F. 360 ; Noden v. Johnson, 16 Q. B. 218. 8 Aldworth v. Stewart, 14 L. T. (N. S.) 862, 4 F. & F. 957 ; Boyce v. Bayliffe, 1 Camp. 58, citing Molloy, Bk. 2, c. 3. 1076 NEGLIGENCE IN LAW. [book V. Story, ,T., in Chamberlain v. Chandler. Duty of passengers. furnishing good and fresh provisions, to prove some trifling incon- venience is not enough ; it is necessary to show a real grievance ; 1 but if the master, without adequate justification, causes the passenger to be disembarked, and uses contemptuous and insulting language to him, an action is maintainable . 2 * The master is liable for arbitrary acts not justified by the necessities of discipline or of providing for the safety of his ship. His duty is summarised, perhaps a little too rhetorically, by Story, J., in Chamberlain v. Chandler : 3 “In respect to passengers, the case of the master is one of peculiar responsibility and delicacy. Their contract with him is not for mere ship room and personal existence on board ; but for reasonable food, comforts, necessaries, and kindness. It is a stipulation, not for toleration merely, but for respectful treatment, for that decency of demeanour which constitutes the charm of social life, for that attention which mitigates evils without reluctance, and that prompti- tude which administers aid to distress. In respect to females, it proceeds yet farther, it includes an implied stipulation against general obscenity, that immodesty of approach which borders on lasciviousness, and against that wanton disregard of the feelings which aggravates every evil, and endeavours by the excitement of terror and cool malignancy of conduct to inflict torture upon susceptible minds.” The law “ is rational and just. It gives compensation for mental sufferings occasioned by acts of wanton injustice, equally whether they operate by way of direct or of consequential injuries. In each case the contract of the passengers for the voyage is in substance violated ; and the wrong is to be redressed as a cause of damage. I do not say that every slight aberration from propriety or duty, or that every act of unkindness or passionate folly, is to be visited with punishment ; but if the whole course of conduct be oppressive and malicious, if habitual immodesty is accompanied by habitual cruelty, it would be a reproach to the law if it could not award some recompense.” The passengers, on their part, must render assistance, if necessary, and they are called upon in cases of peril, whether from the sea or from enemies . 4 They are not entitled to claim salvage for services rendered unless their services are exceptional , 5 as for navigating the ship after the master and crew, or some of them, have left her in peril , 6 or for rescuing the ship after capture by an enemy . 7 Where there is an express contract 8 the rights of the passenger 1 Young v. Fewson, 8 C. & P. 55 ; Prendergast v. Compton, 8 C. & P. 454 ; JencJcs v Coleman, 2 Sumn. (U. S. Circ. Ct. ) 221. 2 Coppin v. Braithwaite, 8 J ur. 875. a 3 Mason (U. S.) 245. * Boyce v. Bayliffe, 1 Camp. 58. & Branston, 2 Hagg. (Adm.) 3 n. ; The Vrede, Lush. 322, where it is said that even seamen may be entitled to salvage when an abandonment of the ship has put an end to their contract. The law was laid down to the same effect in The Le Jonet, L. R. 3 A. & E. 556, affirming the general principle stated by Lord Stowell, in Neptune, 1 Hagg. (Adm.) 227, and was re-affirmed by Dr. Lushington in The Warrior, Lush. 476. See ante, 1045 n 5. Stillc v. Myrick, 2 Camp. 317 ; Hartley v. Ponsonby, 7 E. & B. 872; 3 Kent, Comm. 185, 196; The Two Catharines, 2 Mason (U. S.), 319. In Newman v. Walters, 3 B. & P. 612, a passenger was held entitled to sue the owner for salvage. Nourse v. Liverpool SS. Association, [1896] 2 Q. B. 16. 8 The Vrede, Lush. 322. r The Two Friends, 1 C. Rob. (Adm.) 271. 8 Such a contract is a personal contract, and not cognisable in Admiralty, Brackett v. Brig Hercules, Gilpin (U. S. Dist. Ct.), 184 ; Addcrlcyv. Cookson, 2 Camp. 15 ; Gillan v. Simpkin, 4 Camp. 241 ; Leman v. Gordon, 8 C. & P. 392 ; Yates v. Duff, 5 C. & P. 369 ; Siordel v. Brodie, 3 Camp. 253. chap. iv. 1 COMMON CARRIERS BY WATER. 1077 will of course be determined by it ; and whether express or not, the passenger’s rights are to be construed with reference to usage. 1 The shipowner is bound to provide reasonable accommodation for Duty of ship- his passengers ; and a shipowner has been held liable where an accident owner- happened to a passenger through want of means to descend from a berth. 2 The law with regard to the luggage of passengers by sea does not Luggage of appear to differ from that we have already considered as to the luggage passengers, of passengers by land. 3 The circumstances of the transit may vary the details of the transit; they do not affect the principles of responsibility. A condition exonerating the carrier even from the consequence of his own or his servant’s negligence is usually imposed with the proviso, now familiar from the terms of the Harter Act, that reasonable diligence has been used by the carrier to render the ship at starting seaworthy and fit for the voyage. 4 Liability, however, was held to attach where, the usual accommo- dation for passengers’ luggage having been appropriated for other goods, the luggage was placed in a disused lavatory which communicated for the purpose of flushing the floor with one adjoining, where an overflow occurred damaging the plaintiff’s property. The plaintiff was held entitled to recover. “ Considering the crowded state of the ship and the risk of pilfering to which the luggage might have been exposed if placed on deck under tarpaulins, the lavatory was not in itself an improper or unsuitable place in which to put it. Having regard, however, to the contingency of an overflow from the other lavatory, and a consequent ingress of water under the dividing bulkhead, the place was not a proper place, and the ship, in sailing with the luggage so stowed, was not seaworthy in the sense that she was not properly fit to carry out the contract with regard to the plaintiff’s luggage.” 5 In America it has been decided that though steamboat proprietors Pardee, v. who are common carriers of passengers for hire are liable for the Drew. baggage of passengers, they are only liable for such things as are usually carried by travellers for necessity or personal convenience. 6 This decision, which was arrived at on the ground “ that a reasonable amount of baggage by common usage was deemed to be included in the fare of the passenger,” is identical with what has been decided under the provisions about luggage in the English Railway Acts. 7 The master of the ship has a lien on the luggage of the passenger Master has for his passage-money, but not for the clothes he is wearing when about lien on the to leave the ship. 8 luggage of i passengers. 1 Hutton v. Warren, 1 M. & W. 466, 475. 2 Andrews v. Little, 3 Times L. R. 544 (C. A.). s Ante, 997. See Wilton v. Atlantic Royal Mail Steam Navigation Co., 10 C. B. N. S. 453 ; Taubman v. Pacific Steam Navigation Co., 26 L. T. (N. S.) 704, which would very probably not be followed in an English Court (Le Blanche v. L. & N. W. Ry. Co., I C. P. D. 286), and certainly not in an American Court (Railroad Co. v. Lockwood, 17 Wall. (U. S.) 357), is noteworthy for an expression of opinion by Bramwell, B., that the Railway and Canal Traffic Act, 1854, “ has been already [1872] the cause of more dishonest transactions than any Act of Parliament.” * Acton v. Castle Mail Packets Co., 11 Times L. R. 518. 5 Upperton v. Union-Castle Mail SS. Co., 19 Times L. R. 123. 6 Pardee v. Drew, 25 Wend. (N. Y.) 459. Cp. Hawkins v. Hoffman, 6 Hill (N. Y.), 686, 589. Ante, 897 and 1005. 7 Macrow v. O. W. Ry. Co., L. R. 6 Q. B. 612, Ante, 998, s Wolf v. Summers, 2 Camp. 631* 1078 NEGLIGENCE IN LAW. [book V. Medical man oil board passenger ship. Allan v. State Steamship Co. Emigrants. Personal assault on passenger. Every emigrant ship 1 must carry a duly qualified medical practi- tioner rated on the ship’s articles, if there are more than fifty steerage passengers on board ; and in all cases, where the number of persons on board exceeds three hundred. 2 All proper and necessary medicines must also be provided ; of the sufficiency of which the emigration officer at the port of clearance is the judge ; 3 who further has the duty imposed on him of appointing a medical practitioner to inspect and report on the sufficiency of the medicine and other requisitions in the Act specified ; and it is on the certificate of such medical practitioner that the emigration officer is to act. The position and responsibility of the shipowner with reference to the ship’s medical officer, under the Act, was considered in Allan v. State Steamship Co. 4 A woman passenger having asked for quinine, got calomel, and sued the shipowner for the injury sustained through the doctor’s negligence. The liability of the shipowner was, however, negatived, on the ground that, when he has engaged a suitably qualified person as required by law, and has placed in his charge a supply of medicines sufficient in quantity and quality for the purposes required (and this is evidenced by the certificate of the medical practitioner called in at the port of clearance, and the approval of the emigration officer), and has furnished to the qualified person so engaged a proper place in which to keep the medicines, the shipowner has performed his duty to his passengers, and is not liable for the medical officer’s negligence. The medical officer is liable for his own negligences, and independently of whether his services are gratuitous or remunerated. 5 The most important regulations with regard to emigrants are statutory, and reference must be accordingly made to Part III. of the Merchant Shipping Act, 1894, 6 and to Part II. of the Merchant Shipping Act, 1906, 7 to ascertain their rights and liabilities. A personal assault by the master of a vessel on a passenger on the high seas may form the subject of a suit in Admiralty. 8 1 Merchant Shipping Act, 1894 (57 & 58 Viet. c. 00), s. 268. 2 Merchant Shipping Act, 1894 (57 & 58 Viet. c. 60), s. 303. Under s. 324 these regulations may be modified by Order in Council. 3 Merchant Shipping Act, 1894 (57 & 58 Viet. c. 60), s. 300. 4 132 N. Y. 91, 28 Am. St. R. 556. 5 See post. 1 156, Medical Men. e 57 & 58 Viet. c. 60. v 6 Edw. VII. e. 48, ss. 13 24. 8 Mulloy v. Bucher, 5 East, 316. As to implied assumpsit for passage-money, The Ruckers (1801), 4 C. Rob. (Adm.) 73. As to damages to seaman in respect of assaults and ill-treatment by the master, Agincourt, 1 Hagg. (Adm.) 271 ; Lowthcr Castle, 1 Hagg. (Adm.) 384; Enchantress, 1 Hagg. (Adm.) 395. In Watson v. Christie, 2 B. & P. 224, Lord Eldon, C.J., held that where a beating might be possibly justified on the ground of the necessity of maintaining discipline on board ship, yet such a defence could not be resorted to unless put upon the record in the shape of a special justification ; for the master has a right in case of gross misbehaviour, to inflict corporal punishment upon the delinquent mariner. The rules under which this may be done are given in the leading case of Agincourt, supra. A statutory provision tor seamen’s food is made by 6 Edw. VII. c. 48, ss. 25- 27. CHAPTER V. COLLISIONS ON WATER . 1 The Roman law dealing with nautical collisions is shortly summed Roman Law. up in a few paragraphs of the Lex Aquilia, 2 and turns entirely on the presence or absence of culpa. If the collision is through the fault of the sailors, then an action lies irrespectively of whether the collision was of the vessels, aut ferraculum ad navem ducendo, an tua manu damnum dederis. But si fune rupto, aut cum a nullo regeretur navis, incurrisset, cum domino agendum non esse. Again, si cum vi ventorum navis impulsa esset in funes anchorarum alterius et nautce Junes prcecidissent, si nullo alio modo, nisi prcecisis funeribus explicare se potuit nullam actionem dandam. One more instance will suffice to illustrate the principle : si navis alteram contra se venientem obruisset, aut in gubernatorem, aut in ducatorem, actionem competere damni injuria}. In English law also the foundation of liability is fault — negligence. “ In common understanding and as understood in the Court of Damage by Admiralty,” says Montague Smith, J., 3 “damage by collision is collision damage sustained by a ship from another ship coming in contact defined - with it.” If by this the learned judge intended to convey that damage sustained by a ship from another ship is the sole damage that can be sued on in the Court of Admiralty, 4 his inference is corrected by The “ Zeta ” 5 in the House of Lords. The conclusion from the decision in which case is, that no ground either on principle or authority exists for holding the Admiralty jurisdiction in the case of damage received by a ship limited to damage received by collision with another vessel. That being so, the term “ damage by collision,” as used in 31 & 32 Viet. 1 For a complete treatise on this very technical subject, see Marsden, Law of Collisions at Sea (5th ed. 1904). Collision is very fully treated by Parsons, Law of Shipping, vol. i. 525-598. In Abbott, Merchant Ships, there was no chapter on Collisions till one was supplied by Serjeant Shee in his edition, the 10th. 2 D. 9, 2, 29, §§ 2-5. 3 Everard v. Kendall, L. R. 5 C. P. 432, adopted Robson v. The Owner of The “ Kate,” 21 Q. B. D. 13, and cited per Lopes, L.J., The Zeta, [1892] P. 291. 4 What is here said has reference to the jurisdiction of the Court of Admiralty apart from the Judicature Act, 1873 (36 & 37 Viet. c. 66). 5 [1893] A. C. 468. The various instances of damages that have been sued on in the Court of Admiralty are collected in the appellant’s argument, 471. In The Theta, [1894] P. 284, Bruce, J., says : “ Damage done by a ship is, I think, applicable only to those cases where, in the words of the Master of the Rolls in The Vera Cruz (9 P. D. 99), the ship is the ‘ active cause ’ of the damage. The same idea was expressed by Bowen, L.J., who said, the damage ‘done by a ship means damage done by those in charge of a ship, with the ship as the noxious instrument.’ ” Admiralty Court Act, 1840. Sea the common highway of nations. Liability based on negligence. 1080 NEGLIGENCE IN LAW. [look v. c. 71 s. 3, is not so limited ; nor the term “ damage to ships whether by- collision or otherwise ” in 32 & 33 Viet. c. 51 s. 4. 1 It may accordingly now be taken as settled law that County Courts under the two Acts above mentioned having Admiralty jurisdic- tion may, in the exercise of that j urisdiction, entertain any suit for damage done by a ship and to a ship, whether by collision or other- wise, to the extent of all claims not exceeding £300, without any necessity of showing that the body receiving or doing the damage shall be a ship. 2 By section G of the Admiralty Court Act, 1840, 3 the jurisdiction of the High Court of Admiralty (now the Admiralty Division), which was always exerted in matters arising on the high seas, is extended to cases where a ship is within the body of a county when the services are rendered or damage received or necessaries furnished in respect of which the claim sued on is made. The sea has been often, and not improperly, termed “ the common highway of nations ” ; and the common rights and duties of those responsible for ships traversing the sea do not in many respects sub- stantially differ from the rights and duties of those responsible for vehicles on land. 4 There are, nevertheless, points of contrast ; such, for instance, as that, while a traveller may in no circumstances encamp on a highway, there is a necessary right to anchor vessels even in the most frequented roadsteads. 5 Sunken Vessels. Liability for injury is accordingly based on negligence. Every person navigating the seas or rivers must use reasonable skill and care to prevent mischief to other vessels. 6 This duty is, says Maule, J., 7 “ incident to the possession and control of the vessel.” He who is in possession or control may make the vessel fast, or proceed while it is afloat, or remain as long as he pleases if aground ; of course subject to navigation rules. 1 The House of Lords held that even had the jurisdiction of the Court of Admiralty been limited as was contended, the terms of the Acts of Parliament above cited would have given to County Courts a wider jurisdiction than that possessed by the old Court of Admiralty. The decision in The Queen v. The Judge of the City of London Court, [1892] 1 Q. B. 273, which holds that the Court of Admiralty had no jurisdiction to entertain an action for negligence against a pilot in personam, is unaffected by the decision in The “ Zcta,” [1893] A. C. 468. A steamer struck a barge which had just been sunk by collision with another vessel ; yet as she became navigable as soon as she was raised the collision was held to have been between two navigable vessels : Chandler v. Blogg, [1898] 1 Q. B. 32. Damage done by a ship to a pier is not “ damage by collision ” within s. 3, sub-s. 3, of 31 & 32, Viet. c. 71 ; The Normandy, [1904] P. 187. 2 In consequence of the provision of the Judicature Act, 1873 (36 & 37 Viet. c. 66), the consideration of the jurisdiction of the Old Court of Admiralty is only important as it affects the jurisdiction of County Courts with Admiralty jurisdiction. 3 3 & 4 Viet. c. 65. Cp. The Mecca, [1895] P. 95. See an article by Dana, On the History of Admiralty Jurisdiction, Am. Law Rev., vol. v. 581 ; also 1 Kent, Comm. (12th ed.) 354-380. In the United States the Admiralty jurisdiction of the Supreme Court extends over all tho great lakes and the rivers so far as they arc navigable : The Qcnesee Chief, 12 How. (U. S.) 443 ; The Jline v. Trevor, 4 Wall. ( U. S.) 555,569. As to what rivets are navigable, The Daniel Ball, 10 Wall. (U. S.) 557,563, distinguishing the American test from the English, that of the ebb and How of the tide. a River Wear Commissioners v. Adamson, 2 App. Cas., per Lord Blackburn, 767. Ante, 541. .See, too, Fletcher v. Hylands, L. R. 1 Ex. 205, 286 ; The Khedive, 5 App. Cas. 876, 890 ; Cayzcr v. Canon Co., 9 App. Cas. 873, 882. 6 Post, 1099. c Brown v. Mallctt, 5 C. B. 599. 7 L.c. 617. COLLISIONS ON WATER. 1081 CHAP. V.] In the case just referred to, Brown v. Mallett, 1 the liability of the Liability person having the possession and control of a vessel, which sinks so as where vessel to obstruct a public navigable river, was considered with reference to abandoned other vessels navigating. When the vessel sunk the owner abandoned her. The Court held (Maule, J., giving the judgment) that as the Maule, J.’s, liability of the original owner did not continue where the possession judgment in and control had been transferred, so where they had been not transferred, but abandoned : “ We do not think that the duty always arises and continues for an indefinite time. Where the navigation of a river has become obstructed by a vessel which has sunk and been lost to the owner, without any fault of his, the public inconvenience of the ob- struction is one in respect of which the owner differs from the rest of the public only in having sustained a private calamity, in addition to his share of a public inconvenience ; and this difference does not appear to be any reason for throwing on him the cost of remedying or mitigating the evil.” 2 In White v Crisp, 3 Alderson, B., speaking of the judgment of White, v. Maule, J , in Brown v. Mallett, said : 4 “ From the principles there laid Crisp. down by him (which, however, were not all absolutely necessary for the decision of that individual case) we do not disagree at all. He there lays it down thus— that it is the duty of a person using a navigable river with a vessel of which he is possessed and has the control and 1 5 0. B. 599, followed in Hancock v. York, Newcastle, and Berwick Ry. Co., 10 C. B. 348. In Jolliffe v. Wallasey Local Board, L. R. 9 C. P. 02, the anchors were part of the permanent works of the defendants, and constituted a concealed danger when they omitted to buoy them in a sufficient manner. 2 5 C. B. 618. In The King v. Watts, 2 Esp. (N. P.) 675, Lord Kenyon held that the owner of a ship sunk in the Thames without default was not liable to an indictment for not removing the obstruction. Vivian v. Mersey Docks and Harbour Board, L. R. 5 C. P. 19, is a case on the construction of The Mersey Dock Acts Consolidation Act, 1858 (21 & 22 Viet. c. xcii.), s. 59. Under 10 & 11 Viet. c. 27 (The Harbours Act, 1847), s. 56, the “ owner ” of a wreck becoming an obstruction to any harbour, is to repay the harbour master the expense of removing it. Earl of Eglinton v. Norman, 46 L. J. Q. B. 557, decided that “ owner ” refers to the owner at the time the wreck became an obstruction. This decision was overruled in the H. of L. in The “ Crystal ,” [1894] A. C. 508. The appellants had abandoned their vessel as derelict on the high seas without any intention of resuming possession or ownership. They also gave notice of abandonment to the underwriters. The House of Lords on these facts held that “ where the owner of the vessel which is wrecked gives the harbour authority to understand that he retains his right of property in the wreck, and they remove it so as to be in a position to return it to him substantially in the same condition in which it was when they commenced operations, they can charge him, I think, with the cost of removal, though the cost may exceed the value of the thing removed. Where he tells them plainly that he has abandoned the wreck, they may deal with it as they please, without regard to him ; but they cannot make him personally liable for their expenditure. The defects, such as they were, in sec. 56, are remedied by the Removal of Wrecks Act, 1877 (40 <& 41 Viet. c. 16). Under that Act the harbour authorities may destroy the wreck if they think fit, although there be an owner claiming an interest in it, and they may do the work of destruction without regard to the owner’s interest ” : per Lord Macnaghten, l.c. 533. The “ owner ” is personally liable for the repayment of the expenses of removal. See The Merchant Shipping Act, 1894 (57 & 58 Viet, c. 60), ss. 518-537. The “ Crystal ” is distinguished in Howard Smith v. Wilson, [1896] A. C 579, on the ground of the different wording of s. 13 of the Victorian Marine Act, 1890, from s. 56 of the English Act, but is followed and applied in Barraelough v. Brown, [1897] A. C. 615. 3 10 Ex. 312. “ It is a rule of maritime law from the earliest times ‘ that if a ship run foul of an anchor left without a buoy, the person who placed it there shall respond in damages ’ ” : Philadelphia, Wilmington, and Baltimore Rd. Co. v. Philadelphia and Havre de Grace Steam Towboat Co., 23 How. (U. S.) 216. A ship negligently allowed to drag her anchor and thereby drifting down upon another, which has to take steps involving expense to keep clear, is liable to pay the expenses incurred, namely, the value of an anchor and chain lost and coals and stores consumed, as the measure of the damage caused : The Port Victoria, 18 Times L. R. 165. 4 10 Ex. 320. The Douglas. Dictum of Maule, J., in Brown v. Mallelt. Brett, L.J.’s, j udgment. 1082 NEGLIGENCE IN LAW. [book v. management, to use reasonable skill and care to prevent mischief to others ; and he adds that his liability is the same whether his vessel be in motion or stationary, floating or aground, under water or above it. For in all these circumstances, the vessel may continue to be in his possession and under his management and control. This duty arises out of the possession and control of the vessel being in him. And it is clearly also laid down in the same judgment that this liability may be transferred with the transfer of the possession and control to another person. And further, that on the abandonment of such possession, control, and management, the liability also ceases.” In that case the facts showed that at the time of the injury to the plaintiff’s vessel the defendants, to whom the sunken ship had been transferred, had exercised control. The conclusion is that it was the duty of the owner, so long as he is in possession, to take precautions to prevent injury. 1 In The Douglas , 2 a ship had sunk in the Thames in consequence of a collision with another ship through her own negligence ; sub- sequently a third ship had come into collision with the sunk ship as she lay in mid-channel with one of her masts above water. In an action by the owner of the third ship it was contended that it was the duty of the owners of the sunk vessel to warn approaching vessels of the wreck, and as no such warning was given, the owners of the sunk ship were responsible for the damage. This contention was sustained in the Ad- miralty Division by Sir Robert Phillimore, on the authority of a dictum of Maule, J.’s, in Brown v. Mallett 3 — “ it is the duty of a person using a public navigable river with a vessel of which he is possessed, and has the control and management, to use reasonable skill and care to prevent mischief to other vessels.” This liability “ is the same whether his vessel be in motion or stationary, floating or aground, under water or above it.” 4 There was a finding of fact that the sunk ship “ The Douglas was not abandoned by her master and crew.” 5 In the Court of Appeal Sir Robert Phillimore’s decision was reversed, because “ there was no negligence of which the plaintiff can take advantage.” “ I incline to agree,” said Brett, L. J., 6 “ that if the owners of a wreck abandon it their liability ceases. But here the defendants claim the ownership of the wreck. It may be that the defendants did not hear of the accident for some time ; as to those employed by them, the captain is prima facie to act ; it is for the plaintiff to prove that there was negligence.” To the argument, that the reason of The Douglas being in the position where she did the injury was her negligent collision with the first ship, therefore the primary negligence affected all her future conduct, the answer of the Lord Justice was : 7 “To wilfully scuttle a ship in a tide-way so as to cause an obstruction may possibly be an indictable offence ; but what the defendants did was no indictable offence. Their own ship sank. It seems to me clear that no greater liability can exist against the defendants than if their steamship had sunk without negligence.” The decision seems plain, and inevitable i These cases are discussed in Taylor v. Atlantic Mutual Insurance Co., 37 N. Y. 275, by Davies, C. J., and approved ( 286) as eminently sound. See Uarmond v. Pearson, 1 Camp. 515, as to what was the proper mode of giving notice of a sunken barge. Cp. White v. Phillips, 33 L. J. C. P. 33. I 2 7fP. D.U51, noticed in Dormont v. Furness Ry. Co., 1 1 Q. B. D. 490, 501. See The EttricIc, [ Jo\P. D. 127. **■' 3 5C.JB. 616. 4 ibid. 6 h L.c. 160. 7 L.c. 160. 5 7 P. D. 155. COLLISIONS ON WATER. 1083 CHAP. V.] upon well-recognised principles ; since “ traffic on the highways, whether by land or sea, cannot be conducted without exposing those whose persons or property are near it to some inevitable risk ” ; 1 subject to the liability to which they have the user ; while negligence to be actionable must be incuria dans locum injuries . 2 The only relevant inquiry left would be as to the fact of whether there was default on the part of the defendants after the ship had settled into the river. The Court found there was not, and entered judgment for the defendants. Two of the j udges seemed to reflect on Brown v. Mallett 3 and White The cases v. Crisp} Lord Coleridge, C. J., was of opinion that “ these cases may considered, be good law,” 5 and Brett, L. J., said , 6 “ I say nothing ” as to them “ except that they were decided on demurrer.” Notwithstanding this, the dictum on which Sir Robert Phillimore based his judgment appears quite sufficient to comprehend the judgment in The Douglas without any inconsistency. Even though it is the duty of a person using a navigable river, with a vessel either “ under water or above it,” to use “ reasonable skill and care,” 7 the onus is on the plaintiff to show absence of skill and care in the circumstances of traffic on a highway. This onus, according to Brett, L. J., was not discharged in The Douglas by the facts proved by the plaintiff, and thus The Douglas would be only an instance of the rule laid down in Brown v Mallett. In Broivn v. Mallett it might be made to appear that while there is possession and control there is liability ; but the decision only lays down this where there is a collision “ from the improper manner in which one of the two [vessels in collision] is managed, the owner of the vessel properly managed is entitled to recover damages from the owner of that which was improperly managed.” 8 The general law, as we have seen, requires proof of this improper management in order to found liability. The expression used in Brown v. Mallett, “We think that it cannot be universally affirmed, that, in all cases where the possession and control of the owners have ceased, such a duty arises,” 9 is of extreme cautious- ness, and is even consistent with the duty as a practical matter never arising ; since the only case that the Court was called to give judgment on was a case where the duty did not arise ; and with the propositions necessary to establish the rule outside the scope of the actual case before them the Court thus carefully refrained from committing themselves. Possession and control by no means always import liability, though they do where there is negligence . 10 The result of the cases was summed up in The “ Utopia,” 11 in the The 1 Per Blackburn, J., Fletcher v. Hylands, L. R. 1 Ex. 286. Utopia. 2 Per Lord Cairns, Metropolitan Ry. Co. v. Jackson, 3 App. Cas. 198. See per Brett, L.J., in The Margaret, 6 P. D. 79: “ In order to establish a cause of action, the Court must find, not only that there was a collision, and that it was the result of the negligence of the defendants, but that some damage was done ; these being found, the liability is made out and the cause of action is established.” a 5 C. B. 599. 4 io Ex. 312. 57 p. D. 159. 6 L.c. ICO. 7 Per Alderson, B., White v. Crisp, 10 Ex. 321. s 5C. B. 616. 9 L.c. 618. 10 In The Douglas, 7 P. D. 160, Cotton, L. J., held that under the Removal of Wrecks Act, 1877 (40 & 41 Viet. c. 16), s. 4, by which a harbour master has power to put up lights, it becomes his duty to remove a dangerous obstruction. See the Merchant Shipping Act, 1894 (57 & 58 Viet. c. 60), s. 530. The American law as to abandoning a sunken vessel is discussed and stated by Agnew, J., in W inpenny v. Philadelphia, 65 Pa. St. 135. 11 [1893] A. C. 492. In Tatliam, Bromage & Co. v. Burr — The “Engineer,” [1898] A. C. 382, the construction of a proviso to a collision clause negativing liability to pay sums for removal of obstructions under statutory powers was “ that this clause shall The Snarl-. Large vessels Bwamping email craft. 1084 NEGLIGENCE IN LAW. [book V. Privy Council as follows : 1 “ The owner of a ship sunk whether by his default or not (wilful misconduct probably giving rise to different con- siderations) has not, if he abandon the possession and control of her, any responsibility, either to remove her or to protect other vessels from coming into collision with her. It is equally true that so long as, and so far as, possession, management, and control of the wreck be not aban- doned or properly transferred, there remains on the owners an obliga- tion in regard to the protection of other vessels from receiving injury from her. But in order to fix the owners of a wreck with liability two things must be shown, first, that in regard to the particular matters in respect of which default is alleged, the control of the vessel is in them, that is to say, has not been abandoned or legitimately transferred, and secondly, that they have in the discharge of their legal duty been guilty of wilful misconduct or neglect.” In the case of The Utopia it was held that the liability of the shipowners was diverted by reason of the undertaking of the port authorities to safeguard the wreck. In The Snark 2 a dumb-barge was sunk in the fairway of the river Thames, without negligence. A proper person was employed on the salvage operations, but the guardship placed by him to mark the submerged barge was negligently allowed to get out of position, and the plaintiff’s steamship coming up the river without negligence ran on the wreck and was injured. The passage just cited from The Utopia was relied on by both sides. F or the plaintiff it was contended, following cases we have elsewhere examined, 3 that the defendants were not able to divest themselves of their obligation of care ; and this view was adopted by the Court. A vessel sunk in a public navigable river is a nuisance. The owner is not bound to remove it. If he abandon it his liability ceases. If he does not abandon it he either retains possession and control, or he may be temporarily forced away from the wreck. In the former case he is under an obligation to use reasonable care to warn other vessels of her position, and to remove the obstruction with reasonable diligence. In the latter it would seem that his duty is the same, though the circumstances will affect the manner of its discharge.' 1 If actual possession and control be resumed, the owner’s obligation remains as when he retains possession and control. If the owner transfer the wreck to some other person who takes from him the possession and control thereof, that person takes over the duties and liabilities of the owner. 6 If, as in this case, the owner employs some one to remove the wreck for him, there is no transfer of the wreck in the sense of the judgment in The Utopia, and the owner does not get rid of his liability by employing some one to perform it for him. In navigating harbours and roadsteads accidents may often happen from the mere disturbance of the water caused in certain circumstances by the movements of huge vessels which may sometimes swamp small in no case extend to any sum which the assured may become liable to pay or shall pay for removal of obstructions under statutory powers ” ; and the proviso was held not to be confined to payments made directly by the assured to the persons who caused the obstruction to be removed, but to include indirect payments, as for example, the moiety of the sum which the owners of the insured vessel had paid to commissioners for the expenses of the removal of the sunk vessel, so that the underwriters were not liable to pay it. The North Britain, [1894 1 P. 77, was approved. Burger v. Indemnity Mutual Marine Assurance Co., [1900] 2 Q. B. 348. i L.c. 498. 2 [1899] P. 74; [1900] P. 105. 3 Ante. 421. 4 Cp. The Douglas, 7 P. D. 151, which was a case of this kind. 3 White v. Crisp, 10 Ex. 312. CHAP. V.] COLLISIONS ON WATER. 1083 craft. There is therefore a duty upon those navigating large vessels so to moderate the force at their command as not to be injurious to small vessels using the waters. A vessel approaching her landing-stage must do se with all usual precautions . 1 So, too, in emerging from a crowded slip, as in The “ Nevada ,” 2 where an ocean steamer with Th the motion of her propeller made such a tumult in the water as “Nevada: to cause a canal boat to break her fastenings and, swinging round, to come into collision with the propeller, whereby she was sunk. There was no look-out on the steamer, else the accident might have been prevented. A duty to keep a look-out was accordingly laid down. The duty was also asserted “ to observe extraordinary care and watch- fulness when surrounded by feebler craft in a crowded harbour,” 3 and in some circumstances the requirement “ to dispense with the use of its ordinary means of locomotion, and resort to the employment of towage or other safe and quiet means of changing its position and effecting its necessary movements ” is reasonable. The same had substantially been previously held by the Privy Council in The Netherlands Steam Boat Co. v. Styles 4 in a judgment “T. \z peculiarly careful to avoid enunciating any general principle whatever, }l2tavier -" though approval is given to the general law laid down in the Court below by Dr. Lushington that at whatever rate a ship is going, if she is going at such a rate as to make it dangerous to any craft which she ought to have seen, or might have seen, she has to take care with reference to such craft, and is bound to stop if it is necessary to do so in order to prevent damage being done by the swell caused by the rapidity of her motion . 5 The same principle would seem to hold good with reference to a swell caused on a tow-path or going over an embankment. Cases of Collision. In the Woodrop Sims 6 Lord Stowell states four possibilities under Judgment of which a collision may occur. Lord Stowe11 First, a collision may occur without blame to either party ; as where the loss is occasioned by a storm or any other vis major. The Sims. misfortune then lies on the party on whom it happens to light . 7 Four possi- Secondly, a collision may occur where both parties are to blame ; collision^ as where there has been a want of due diligence or of skill on both sides . 8 1 The J. E. Trudeau, 48 Fed. Rep. 847. 2 106 U. S. (16 Otto) 154. 3 L.c. 150. The Despatch, 120 Fed. Rep. 856. 4 The “ Batavier,” 9 Moo. P. C. C. 286. 5 See Luxjord v. Large, 5 C. & P. 421. Cp. The Duke of Cornwall, 1 Pritch. Adm. Dig. (3rd ed.), 201 — sinking of barge partly caused by the swell of a steamboat. 6 2 Dodson (Adm. Cas.), 85. See Bell, Comm. vol. i. (7th ed.), 626. For an American standpoint, see The “ Atlas ,” 93 U. S. (3 Otto) 302. 7 Stainback v. Ran, 14 How. (U. S.) 532 ; 3 Kent, Comm. 231 etseqq. Post, 1091. 8 3 Kent, Comm. 231, speaks of the rule in this case as rusticum judicium, adopting the expression of Cleirae, Us et Coutumes de la Mer, 56 (ed. 1671 ), judicium rusticorum. But, says Valin, as translated or, more accurately, summarised in Abbott, Merchant Ships (13th ed.), 829, there is “no better means of making the masters of small vessels, which are liable to be injured by the slightest shock, attentive to avoid collision, than to keep the fear of paying for half the damage constantly before their eyes. And if it be said that it would have been a shorter and more simple mode of adjustment to let each party bear the loss he has sustained as arising from casus fortuitus, the answer is, that then the masters of largo vessels would make light of collision with those of smaller burthen. Upon the whole, therefore, no rule is so just as that of equal partition.” This passage is omitted in the 14tli ed. Valin, Ordonnance de la Marine, liv. 3, tit. 7, art. 10, at 179. 1086 NEGLIGENCE IN LAW. [book v. Lord Black- burn in Cayzer x. Carron Co. The Khedive (No. 2). Law in America. Questions of collisions are communis juris. The rule of law then is that the loss must be apportioned between them. 1 Thirdly, a collision may occur by the misconduct of the suffering party only ; 2 when the sufferer must bear his own burthen'. Lastly, a collision may occur through the fault of the ship which runs the other down Then the injured party is entitled to an entire compensation from the other. 3 In Cayzer v. Canon Go., 4 Lord Blackburn affirms the identity of the common law with the Admiralty in the first, second, and fourth of these cases, and points out that in the third the rule of the common law is that, as each occasioned the accident, neither shall recover, and the loss shall lie where it falls, as against the Admiralty rule that if both con- tributed to the loss it shall be brought into hotchpot and divided ; he continues thus : 5 “ Until the case of Hay v. Le Neve, 6 which has been referred to in the argument, there was a question in the Admiralty Court whether you were not to apportion it according to the degree in which they were to blame ; bub now it is, I think, quite settled, and there is no dispute about it, that the rule of the Admiralty is, that if there is blame causing the accident on both sides they are to divide the loss equally, just as the rule of law is that if there is blame causing the accident on both sides, however small that blame may be on one side, the loss lies where it falls.” In The Khedive (No. 2), 7 overruling Chapman v. Royal Netherlands Steam, Navigation Co., 8 the rule of division of damages in Admiralty in collision Avhere both ships were to blame was held to be that each ship proved for a moiety of the damage that it had sustained less a moiety of the damage sustained by the other ship, so that in an equality of damage neither ship paid or received anything from the other. But when there is inequality of damage the sum payable by the less injured to the more injured is “ a moiety of the difference of the aggregate loss, beyond the point at which the one loss balances the other.” 9 There is only one liability and only one payment. “ The amount of the conjoint damage has to be divided equally, and in order to do this, there must be a sum in arithmetic stating the amounts respectively ; but as the result of the arithmetic, there is only one liability, not cross- liabilities.” 10 In America the law has been clearly laid down in The “ Clara ” 11 to the same effect. Where the fault is wholly on one side, the party in fault must bear his own loss and compensate the other party, if such party has sustained any damage. If neither be in fault, neither is entitled to compensation from the other. If both are in fault, the damages will be divided. 12 “ All questions of collision are questions communis juris ” / 13 and 1 Per Lord Selborne, C., The Khedive, 7 App. Gas. 800. Post, 1093. 2 Strout v. Foster, 1 How. (U. S. ) 89 ; The Massachusetts, 1 W. Rob. (Adm.) 371. 3 This passage was cited with approval by Lord Gifford in the House of Lords in Ilay x. LeNeve, 2 Shaw (H. L. Sc.), 395, 401. 4 9 App. Cas. 873. 5 L.c. 881. 6 2 Shaw (H. L. Sc.), 395. This case is considered and treated in The Khedive. 7 App. Cas. 804, 817. ? 7 App. Cas. 790. 8 4 P. I). 157. » Per Lord Selborne, C., 7 App. Cas. 800. 10 Per Lord Esher, M.R., London Steamship Owners' Insurance Co. x. Grampian Steamship Co., 24 Q. B. D. 067. 11 102 U. S. (12 Otto) 200 ; Parsons, Law of Shipping, vol. i. 525 ct seqq. 12 A rule in the United States, not confined to ships, but extended to persons, in The Max Morris, 137 U. S. (30 Davis) 1. See this case considered, ante, 1 79. 13 The Johann Friederich, 1 W. Rob. (Adm.) 37 ; “ but,” Dr. Lushington adds, COLLISIONS ON WATER. 1087 CHAP. V.] therefore, where in an action in personam brought by the owners of a British vessel against the owners of a Spanish vessel, the defendants pleaded that they were Spanish subjects, and that if there was any negligence in this navigation of their ship it was negligence for which the master and crew alone were liable by the law of Spain, they were held to disclose no defence 1 in law. By the Supreme Court of Judicature Act, 1873, 2 s. 25, sub-s. 9, Effect of the where the rules of the Admiralty Court and the common law courts Judicature are different, the rule of the Admiralty is to be followed. So that in ‘ 1 the case of a collision between two ships, 3 where there has been a want of due diligence or of skill on both sides, whether the action is brought in the Admiralty Division or in the Queen’s Bench Division, in both cases the loss is to be divided equally. One caution must be observed. The actual transgression imputed Caution, must be ascertained to have been in fact to some extent — to what extent is immaterial 4 — the cause of the accident. This is matter of proof. The question of onus then becomes of importance. The “ Fenham ” 5 was the case of a collision between a steamship and The a sailing vessel where the steamship was in fault. It was proved that “ Fenham.” the sailing vessel had not complied with certain Admiralty regulations about lights ; and it was contended that this made the negligence contributory. Lord Romilly, delivering the judgment of the Privy Council, considered that the omission to exhibit lights might be im- material if the absence of lights was shown not to have conduced to the collision. Proof having been given of the absence of regulation lights, the burden lay on the ship so in default to show that the default was not the cause of the collision. Lord Blackburn, in The “ Margaret ,” 6 though not dissenting from Lord Black- this rule as applied in the case of The “ Fenham ,” did not consider it kurnin “ iu cases of mariners’ wages, whoever engages voluntarily to serve on board a foreign “ Margaret.” ship, necessarily undertakes to be bound by the law of the country to which such ship belongs.” 1 The Leon, C P. D. 148 ; The Wild Ranger, Lush. 553 ; The Zollverein, Swa. (Adm.) 96. 2 36 & 37 Viet. c. 66. 3 By the Merchant Shipping Act, 1894 (57 & 58 Viet. c. 60), s. 742, “ ship ” includes every description of vessel used in navigation not propelled by oars. The Andalusian, 3 P. D. 182. The Mac, 7 P. D. 126. The Merchant Shipping Act, 1894, ss. 2, 4, and 24, only applies to British ships, but not so the Bills of Sale Acts, Union Bank of London v. Lenanton, 3 C. P. D. 243 ; Gapp v. Bond, 19 Q. B. D. 200 ; The Spirit of the Ocean, 34 L. J. (Adm.) 74. What passes to a mortgagee under the word “ ship ” is considered Coltman v. Chamberlain, 25 Q. B. D. 328. By 24 Viet. c. 10, s. 2, “ ship ” means “ any description of vessel used in navigation not propelled by oars.” A “ dumb-barge ” is not a vessel within 27 & 28 Viet. c. clxxviii., though it is such within the Harbours, Docks and Piers Clauses Act, 1847 (10 & 11 Viet. c. 27), s. 3 ; Hedges v. London and St. Katharine Docks Co., 16 Q. B. D. 597. See also Sewell v. British Columbia Towing and Transportation Co., 9 Can. S. C. B. 527, 550. In Ex parte Ferguson and Hutchinson, L. R. 6 Q. B. 291, Blackburn, J., is reported thus : “ The argument against the pro- position is one which I have heard very frequently — viz., where an Act says certain words shall include a certain thing, that the words must apply exclusively to that which they are to include. That is not so ; the definition given of a ‘ ship ’ is in order that ‘ ship ’ may have a more extensive meaning.” In that case a “ coble ” was held to be a ship. Blackburn, J.’s, principle of construction is also explained by Lord Selborne, C., in Robinson v. Barton Eccles Local Board, 8 App. Cas. 801. Mayor, dec. of Southport v. Morriss, [1893] 1 Q. B. 359, considers what is “ a vessel used in naviga- tion.” A gas-float shaped like a boat, but neither intended nor fitted to be navigated, is not a “ ship ” : Wells v. Owners of Gas Float Whitton (No. 2), [1897] A. C. 337. As to Admiralty jurisdiction, The “ Zeta,” [1893] A. C. 468. Ante, 1080. & Dowell v. General Steam Navigation Co., 5 E. & B. 195. 5 L. R. 3 P. C. 212. o (Cayzer v. Carron Co.), 9 App. Cas. 873, 882, cited by Smith, L.J., in H.M.S. Sans Pareil, [1900] P. 283, showing that the common law doctrine was applicable there. 1088 NEGLIGENCE IN LAW. [book V. The Ovingdc'Jn Grange. Brea h of rules of navigation imports liability. The “ Arklow .” A rider to the rule in The “ Arklow .” applied in the case then before the House of Lords, where the contribu- tory negligence was non-observance of a regulation about rate of speed. There, nevertheless, Lord Watson held that : “ A vessel which is proved to have disregarded these precautions,” that is, those pointed out by the rule there under discussion, “ must accept the onus of showing that the neglect of them did not contribute to any collision or damage which may have occurred at the time or subsequently.” The “ Margaret ” was distinguished in The Ovingdean Grunge , 1 on the ground that the ship with which The Ovingdean Grange came into collision, The Forsete, was wrongly where she was at the time of the collision, and by being so hampered The Ovingdean Grange. This wrong- ful act “ did in fact contribute to the difficulty of The Ovingdean Grange, and cast upon her a burden greater Ilian in point of law she is bound to bear ; that is to say, cast upon her the burden of using more than ordinary care to avoid collision with The Forsete ; in other words, he [the judge in the court below] finds that The Ovingdean Grange could not by ordinary care have avoided collision with The Forsete. If that be the fact it does not matter that The Ovingdean Grange was negligent, because had she been diligent, had she used ordinary care, the collision would nevertheless have occurred.” Both ships were accordingly held to blame . 2 There is another class of cases where the rule is statutory, and there is a provision that a breach of the rules of navigation shall in itself be deemed evidence of negligence . 3 Even here, though the party guilty of infringement is deemed to be blameworthy, he may still exonerate himself by showing that the infringement could not possibly have contributed to the collision , 4 or that his action was the result of necessity . 5 In The “ Arklow ,” 6 Sir James Hannen, delivering the judgment of the Privy Council in the case of a non-statutory regulation, stated the principle applicable to be “ that if the absence of due observance of the rule can by any possibility have contributed to the accident, then that the party in default cannot be excused.” 7 To this, as we have just seen, there must be a rider, or rather, perhaps, the expression of a condition implied in the rule, that the party infringing is not to be shut out from showing that the infringement could not have contributed to the injury ; failing this, he is to be held liable ; and, in addition, a limitation of the phrase “ any possibility ” 8 to a possibility working out 1 \ 1902] P. 208, 214. 2 Cp. Owners of SS. Chittagong v. Owners of SS. Kostroma, [1901] A. C. 597. 3 The Khedive, 5 App. Gas. 870, where Lord Blackburn discusses s. 17 of 30 & 37 Viet. c. 85, re-enacted as s. 419 of the Merchant Shipping Act, 1894 (57 & 58 Viet, c. 00) ; The Love-Bird, 0 P. D. 80, ship without a fog-horn having sailed before regula- tions requiring one to be supplied had come into force, with knowledge that t he regulations were coming into force within a few days and before her return ; The Pennsylvania, 23 L. T. (N. S.) 55 ; The Steamship W eslphalia, 24 L. 9’. (N. S.) 75 ; The Devonian, [1901] P. 221 ; The Emmy Haase, 9 P. D. 81 ; “ The Court is not bound to hold that a man should exercise his judgment instantaneously, a short, but a very short, time must be allowed him for this purpose ” : The “ Ngapoota ,” [1897] A. C. 391, 393. 4 The “ Fanny M. Carvill,” reported as a note in 13 App. Gas. 455, is approved in The “ Hochung,” 7 App. Cas. 512. The Englishman, 3 P. 1). 18, is a case of failure to comply with the regulations, but no possibility of the collision occurring therefrom. In The Mary Ilounsell, 4 P. I). 204, infringement was deemed to show fault; The Ilermod, 62 L. T. 670. Post, 1091. 5 The “ Arratoon Apcar,” 15 App. Gas. 37. u 9 App. Cas. 136. 7 L.c. 139. s The Breadalbane, 7 P. 1). 186 ; cp. The Vera C r uz, 9 P. I). 88 ; The Khedive, 5 App. Cas., per Lord Watson, 901. COLLISIONS ON WATER. 1089 CHAP. V.] in the normal course of tilings. The cases then come out quite con- The rule sistently. The violation of a regulation, e.g., the absence of lights , 1 stated - which suggests a contributing cause to the accident, throws the onus on the plaintiff . 2 If the breach is the breach of a regulation which in the natural sequence of cause and effect would not conduce to the accident , 3 the onus of proof is unaffected. The law regards only those things that are normal, not the extraordinary . 4 But if the breach is by statute deemed blameworthy, the onus is on the plaintiff to disprove such alleged breach, whether it would or would not in the natural sequence of cause and effect have conduced to the accident . 6 The effect, then, Effect, of the breach of an Admiralty regulation is to bring under the head of negligence those cases which, but for the regulation, are equally con- sistent with the absence of negligence ; leaving unaffected those cases where the facts negative the presumption of negligence except in the case of statutory enactment. In Dundee 6 Lord Stowell .defined nautical negligence as “ a want Nautical of that attention and vigilance which is due to the security of other ^ e n° t h - vessels that are navigating the same seas, and which, if so far neglected j) un d e e. as to become, however unintentionally, the cause of damage of any extent to such vessels, the maritime law considers as a dereliction of bounden duty, entitling the sufferer to reparation in damages.” The “ attention and vigilance ” necessary is not “ extraordinary Rule of skill or extraordinary diligence, but that degree of skill and that degree dihger.ee. of diligence which is generally to be found in persons who discharge their duty ” ; 7 or, to quote Lord Blackburn , 8 “ to take reasonable care and to use reasonable skill to prevent it [the ship] from doing injury.” Reasonable skill is not a fixed but a variable quantity, Reasonable increasing with the need. “ The law throws upon those who launch a skl11 a o ^ i ^ rpiT/tivG term vessel the obligation of doing so with the utmost precaution, and giving such a notice as is reasonable and sufficient to prevent any injury happening from the launch; and, moreover,” “the burden of showing that every reasonable precaution has been taken, and every reasonable notice given, lies upon her and those managing the launch.” 9 “ Reasonable precaution ” is “ the utmost precaution under such circumstances.” 10 1 The “ Fenham,” L. R. 3 P. C. 212. 2 Per Sir James Colville, The “ Velasquez,” L. R. 1 P. C. 494, 499. 3 Cayzer v. Carron Co., 9 App. Cas. 873. 4 Per Parke, B., Hawtayne v. Bourne, 7 M. & W. 598. Ad ea quae frequenlius accidunt leges adaplantur, 2 Co. Inst. 137. Cp. D. 50, 17, 64 : ea quee raro accidunt, non temere in agendis negotiis compulantur. 6 The Khedive, 5 App. Cas. 876. The Pennsylvania, 19 Wall. (U. S.) 125, decides that where there has been a positive breach of a statute, it must be shown, not merely that it probably did not contribute to the accident, “ but that certainly it did not.” In the case in question this was apparently impossible, and so the liability was fixed. Cp. The Chilian, 4 Mar. Law Cas. N. S. 473. In The Benares, 9 P. D. 16, the Court of Appeal distinguished The Khedive, and held that “ it must be shown to the satisfaction of the Court, if there has been an infringement, that the circumstances of the case made a departure from the regulations necessary. It is not enough, perhaps, to show that what the captain did was reasonable and advisable ; it must be shown to be necessary ” ; so that where a collision is inevitable from the first, the regulations do not apply : TheBuclchurst,QP. D. 152. e 1 Hagg. (Adm.) 120. 7 Per Dr. Lushington, The Thomas Powell v. The Cuba, 2 Mar. Law Cas. 344. s The Khedive, 5 App. Cas. 876, 890. Lord Blackburn adds : “ A man may not do the right thing, nay may even do the wrong thing, and yet not be guilty of neglect of his duty, which is not absolutely to do right at all events, but only to take reasonable care and use reasonable skill.” 9 The Andalusian, 2 P. D. 231, 233. 10 Per Butt, J., The George Roper, 8 P. D. 120. J090 NEGLIGENCE IN LAW. [book V. Common law rule of negli- gence applies. Perilous alternatives. Rule approved by Lord Herschell and by Lord Morris. American rule stated. Imminency and nature of the peril to be taken into account.. There is no essential difference between negligence at common law and negligence by the rules of the Admiralty ; if a rule of common sense “ what may be called the common law ” is transgressed, liability attaches, though no Admiralty rule has been made in the matter . 1 The principle that a person, who causes another to be so placed by his fault, as to constrain him to choose between perilous alternatives, thereby renders himself liable for those consequences 2 is of frequent application in Admiralty cases, and must be taken as limiting the rule just mentioned — of reasonable skill in the mariner ; since, if one is suddenly jeopardised by the fault of another, that other is responsible for the consequences of the action of the imperilled person in the peril in which he has placed him . 3 And “ any Court ought to make the very greatest allowance for a captain or pilot suddenly put into such difficult circumstances ; and the Court ought not, in fairness and justice to him, to require perfect nerve and presence of mind enabling him to do the best thing possible.” 4 “ With this,” said Lord Herschell , 5 “ I entirely agree, though, of course, the application of the principle laid down must vary according to the circumstances.” And in the same case Lord Morris observed : 6 “In my opinion, large allowance should be made for sudden consideration whether directory rules should be disobeyed in order to avoid collision, and when such collision is caused by the misconduct of the party complaining, there should, in my opinion, be very clear proof of contributory negligence.” In America the same rule has been laid down, though the expression is different. “ If,” it is said , 7 “ one vessel is brought into immediate jeopardy by the fault of another, the fact that an order other than that which was given might have been more fortunate will not prevent the recovery of full damages.” The imminency and the nature of the peril are alike to be taken into account in estimating the amount of allowance that is to be made for 1 Per Lord Blackburn, Cayzerv. Carron Co., 9 App. Cas. 880. 2 Jones v. Boyce, 1 Stark. (N. P.) 493, 495. 3 Kissam v. The Albert, cited Parsons, Law of Shipping, vol. i. 533, where a vessel was thrown against another vessel by the swell caused by a passing steamer, and was held not liable, though she ripped up the timbers of the vessel through carrying her anchor in a way prohibited by the harbour regulations of the port. See, further, The Sisters, 1 P. D. 117 ; The Industrie, L. R. 3 A. & E. 303 ; The Hibernia, 31 L. T. (N. S.) 805 ; The “ Marpesia,” L. R. 4 P. C. 212 ; The Adalia, 22 L. T. (N. S.) 74 ; The C. M . Palmer ; The Larnax, 2 Mar. Law Cas. N. S. 94. •1 Per Lord Esher, M.R., The Bywell Castle, 4 P. D. 226. Cp. The Utopia, [1893] A. C. 492. In The “ Agra ” and “ Elizabeth Jenkins,” L. R. 1 P. C. 504, it is said, “ if a ship bound to keep her course under the 18th rule justifies her departure from that rule under the words of the 19th rule, she takes upon herself the obligation of showing both that her departure was at the time it took place necessary, in order to avoid immediate danger, and also that the course adopted by her was reasonably calculated to avoid that danger.” The“ Jesmond” andThe“ Earl of Elgin,” L. R. 4P. C. 1; The “ Rhondda,” 8 App. Cas. 549 ; The Servia, 149 U. S. (42 Davis) 144 ; The Thorsa, 20, Rettie, 876, affd. [1894], A. C. 116. 5 The “ Tasmania,” 15 App. Cas. 226. 6 L.c. 238. The “ Ngapoota,” [1897] A. C. 391 ; Hine Brothers v. Clyde Trustees, 15 Rettie, 498. i The Maggie J. Smith, 123 U. S. (16 Davis) 355 ; The Elizabeth Jones, 112 U. S. (5 Davis) 514; and The Blue Jacket, 144 U. S. (37 Davis) 371, where, at 394, dis- tinguishing the earlier case of The Manitoba, 122 U. S. (15 Davis) 97, it is said, “ in the former [case] the question was between two steam vessels, while in the latter, it is between a steam vessel and a sailing vessel. In the case of The Manitoba, the courses of the two steam vessels were not such as to make it the duty of the one moro than of the other to avoid the other, or to make it the duty of the one rather than of the other to keep her course ; and there was, in regard to the coursos of both the steam vessels, such risk of collision that the obligation was upon both to slacken speed, or, if necessary, stop and reverse. But in the present case the duty was wholly on the ship to keep her course, and wholly on the tug to keep out of the way of the ship.” COLLISIONS ON WATER. 1091 CHAP. V.J departing from the right course in a critical position. Lord Blackburn, in The Khedive, 1 says : 2 I agree that when a man is suddenly and without warning thrown into a critical position, due allowance should be made for this, but not too much. If, to take the example Lord James, L.J.’s, Justice James gives, the driver of a van cracking his whip makes the m horses of a carriage suddenly unmanageable, the fact that the driver ' e ' of the carriage pulled the wrong rein would be much less cogent evidence of want of reasonable skill or of reasonable care on his part, than if he did the same thing when driving along in the ordinary way, but it would still be evidence.” 3 But the plea of necessity must be made out. Where, for example, a vessel which is navigated with reckless negligence by an ignorant and incompetent crew, comes into collision with another vessel, whose only fault is not slackening speed in face of the irregularities of the oncoming vessel, such other vessel cannot be absolved from the statutory penalties . 4 Neither ship is liable where the damage has arisen from inevitable Inevitable accident . 5 accident. “ Inevitable accident ” has been defined : 6 “ Where one vessel doing a lawful act, without any intention of harm, and using proper precaution to prevent danger, unfortunately happens to run into another vessel.” To constitute an inevitable accident , 7 “ it was necessary that the occurrence should have taken place in such a manner as not to have been capable of being prevented by ordinary skill and ordinary diligence. We were not to expect extraordinary skill or extra- ordinary diligence, but that degree of skill and that degree of diligence which is generally to be found in persons who discharge their duty.” 8 In The “ Marpesia ,” 9 the definition is something “ done or omitted to be done which a person exercising ordinary care, caution and maritime skill, in the circumstances, either would not have done or would not have left undone, as the case may be.” The prominent consideration in these cases is not the inevitability “ Ordinary of the accident, viewed from the point of the actual motive power that cai y antl caused it, so much as whether the exertion of “ ordinary care and skill™ the ordinary skill ” could have prevented it ; not by reference merely to test, the moment of the occurrence, but to any earlier stage in which the adoption of measures reasonably might have been counted on to render the occurrence less probable . 10 A collision is said to occur by inevitable accident when both parties have used every means in their power with adequate nautical skill and due care and caution to prevent its occurrence, and have been unable to do so . 11 i 5 App. Cas. 876. 2 L.c. 891. 3 In The Bywell Castle, 4 P. D. 226, Brett, L.J., sums up the rule : “ The captains of ships are bound to show such skill as persons of their position with ordinary nerve ought to show under the circumstances.” * The “ Arraloon A pear,” 15 App. Cas. 37- 5 Ante, 1085; Woodrop Sims, 2 Dodson (Adm. Cas.), 83, 85; Abbott, Merc ban/ Ships ( 14th ed.), 908. G Per Dr. Lushington, The Europa, 14 Jur. 629. 7 The Thomas Powell v. The Cuba, 2 Mar. Law Cas. 344 ; Lack v. Seward, 4 C. & P. 106. 8 Adopted in Fawkes v. Poulson, 8 Times L. R. 725 (C. A.). 9 L. R. 4 P. C. 220, where, also, the definition in The Virgil, 2 W. Rob. (Adm.) 205, is cited. The definition in The “ Marpesia ” was adopted by Fry, L.J., in The Merchant Prince, [1892] P. 190. io The Virgil, 2 W. Rob. (Adm.) 201 ; The Uhla, 37 L. J. Adm. 16 n. ; The Hibernia, 4 Jur. (N. S.) 1244. n The Lochlibo, 3 W. Rob. (Adm.) 310 ; The Calcutta, 21 L. T. (N. S.) 768 ; The “Marpesia,” L. R. 4 P. C. 212, 220 ; The Secret, 26 L. T. (N. S.) 670. Collision was 1092 NEGLIGENCE IN LAW. BOOK V. Lord Esher, In The Schwan — The Albano, 1 Lord Esher, M.R., wished to depart M.R.’s, con- from the definitions of “ inevitable accident ” above cited, and to hold, Schwan'.'^ on the authority of The Annot Lyle 2 and The Indus? that the true definition is the happening of something over which the injurious person “ had no control, and the effect of which could not have been avoided by the greatest care and skill.” 4 If this were so, a curious state of things would arise. To render a defendant ship liable, negligence — that is, want of reasonable care and skill — must be proved by the plaintiff. If, however, the defendant were to set up “ inevitable accident ” as his defence, he would thereby take on himself the obligation of proving considerably greater diligence than if he refrained, and contented himself with showing he used all reasonable care and skill in the circumstances. On showing he used “ ordinary care and ordinary skill,” he would be exonerated. If, however, he set up “ inevitable accident,” and proved facts which showed he was not negligent, he might still be held to have failed in his defence, if Lord Esher, M.R.’s, view is right, and possibly to be liable for the costs of proving a defence which, though inadequate under one name, would Overruled by still effectually dispose of the suit against him. The majority of the Fry and Court (Fry and Lopes, L.JJ.), however, adhered to the definition 0|>C! ' > ’ ‘ ‘ adopted by the Privy Council in The “ Marpesia ” ,- 5 Lopes, L.J., added : “ I know no distinction as regards inevitable accident between cases which occur on land and those which occur at sea.” 6 Onus. The onus of proof, where the defendant alleges inevitable accident, is, in the first instance, on the plaintiff, who has to establish a prima facie case either of negligence or want of seamanship. It is not till this is done that any case is raised against the defendant. Then the onus of proving inevitable accident lies upon him . 7 He has to show that the cause of the accident was one he could not avoid. “ If he cannot tell you what the cause is, how can he tell you that the cause was one the result of which he could not avoid ? ” 8 “ The burden,” says Fry, L.J ., 9 “ rests on the defendants to show inevitable held to have occurred through “ inevitable accident ” in the following cases : The Shannon, 1 W. Rob. (Adm.) 463, where a steamer going against the stream collided against a brig coming down at night ; The “ William Lindsay,” L. R. 5 P. C. 338, where a ship fastened to a buoy in pursuance of port regulations came into collision through the parting of a band round the buoy ; The Peerless, Lush. 30, the catching of the cable on the windlass when the anchor was let go ; The London, 1 Mar. Law Cas. 308, cable parting in wind ; The Virgo, 3 Mar. Law Cas. N. S. 285, breaking of steerage gear through latent defect ; The Buckhurst, 6 P. D. 152, sailing ship dragging anchor with rudder damaged ; The Swallow, 3 Mar. Law Cas. N. S. 37 1, dumb-barge driving with the tide; The Dulce of Cornwall, 1 Pritch. Adm. Dig. (3rd ed.), 201, steamer navigating at proper rate causing a swell whereby barge in exposed position was made to sink ; The Merchant Prince, [1892] P. 9, in (C. A.) 179, steam steerage gear getting jammed. For the American cases see The Morning Light, 2 Wall. (U. S.) 550 ; The Java, 14 Wall. (U. S.) 189 ; The Merrimac, 14 Wall. (U. S.) 199. If there is negligence the accident is not inevitable, The Pladda, 2 P. D. 34 ; Sherman v. Molt, 5 Benod. (U. S. Dist. Ct.) 372 ; The Merrimac, 14 Wall. (U. S.) 199 ; The Chickasaw, 41 Fed. R. 627. Master was held not to blame where moorings supplied by river authorities were insufficient in a storm, Owners of the S.S. “ Toward ” v. Owners of the S. “ Turlcistan,” 13 Rettie, 342. Injury to ship in harbour : Mackenzie v. Stornoway Pier, <£ -c. Commission, 1907, S. C. 435 ; SS. Fulwood v. Dumfries Harbour Commissioners, 1907, S. C. 456. i [1892] P. 419. In re Ship Albano, 8 Times L. R. 425 (C. A.). 2 IIP. D. 114. 3 12 P. D. 40. 4 [1892] P. 429. 6 L. R. 4 P. C. 212, which Lopes, L.J. cites from the head note, and which is not identical with (he judgment, at 220. 6 [1892] P. 434 ; for a limitation of this statement, see per Dr. Lushington, The Bolina, 3 Notes of Cases, 2)0 ; The” Marpesia,” L. R. 4 P. C. 212, 219, where the sug- gested limitation did not arise ; The Annot Lyle, 11 P. D. 114; The Indus, I 2 P. 1). 46. The Bcnmore, L. R. 4 A. & E. 132, overrules The Thomas Lea, 38 L. J. (Adm.) 37. 7 The “Marpesia,” L. R. 4 P. C. 212. 8 Per Lord Esher, M. It., The Merchant Prince, [1892] P. 188. o L.c. 189. COLLISIONS ON WATER. 1093 CHAP. V.] accident. To sustain that, the defendants must do one or other of two things. They must either show what was the cause of the accident, and show that the result of that cause was inevitable ; or they must show all the possible causes, one or other of which produced the effect, and must further show, with regard to every one of these possible causes, that the result could not have been avoided. Unless they do one or other of these two things, it does not appear to me that they have shown inevitable accident.” 1 The second case put by Lord Stowell 2 is where there is blame on Blame on both sides ; as to which the law “ is now universally accepted as he both sides, stated it.” 3 The Admiralty rule differs from the rule of the common law, and renders each liable to contribute half of the joint damage. 4 A further distinction from the rule of the common law has been sought to be made. By the common law, though the plaintiff has contributed to the accident, he is not disentitled to recover if the negligence of the defendant was the proximate, and that of the plaintiff the remote, cause of the injury — that is, if the defendant could in the result, by the exercise of ordinary care and diligence, have avoided the mischief which happened, the plaintiff’s negligence will not excuse him. 5 It has been contended that, by Admiralty law, where there has been any negligence on the part of the plaintiff, that negligence is primd jade to be reckoned as the cause in the event of a subsequent collision occurring. 6 As we have already incidentally seen, 7 there is no ground for this attempted distinction. But before a vessel can be held in fault for a collision, negligence contributing to the accident, and not negligence merely, must be shown. 8 The cases have been summed up as follows : 9 Cases (1) A ship, A, may recover full damages against another, B, though summed up. she (A) has been guilty of negligence contributing to the collision, provided B could, with ordinary care, exerted up to the moment of the collision, have avoided it ; (2) A can recover nothing, though B was guilty of negligence contributing to the collision, if A, by ordinary care exerted up to the moment of the collision, could have avoided it. (3) A may recover half her loss, though she has been guilty of negligence contributing to the collision, and rendering the collision unavoidable except by extraordinary care on B’s part, if B has been guilty of negligence contributing to the collision and rendering it ’ unavoidable except by extraordinary care on A’s part ; and (4) In the last case B may also recover half her loss. Where the injuring vessel is alone in fault the owners of the injured Injuring vessel are entitled to full compensation — restitutio in integrum 10 — as ^fauitf 0116 nearly as may be for the injury their vessel has suffered. They may 111 Per Brett, M.R., The John McIntyre, 9 P. D. 136. 7 L.c. 137. 8 Cp. The “ Lancashire ,” [1894] A. C. 1, 6; The KoninglVillem /., [1903] P. 114. In a canal, e.g., Manchester Ship Canal, supposing it within the regulations, those hearing the whistle are absolved from their obligation to stop engines, since the assumption may be made that an approaching vessel is on her right side ; The Hare, [1904] P. 331. 9 14 App. Cas. 670. ro 14 App. Cas. 675. Cp. the American cases : The “ Colorado ,” 91 U. S. (1 Otto) 692 ; The Nacoochee, 137 U. S. (30 Davis) 330. ii 14 App. Cas. 677. A tow with a tug is not to be deemed a steamship for all purposes under the rules, and thus in The Lord Bangor, [1896] P. 28, was exonerated for not stopping under Art. 18 of the regulations. Rule in fog. Moderate speed. Vessel on opeD sea in fog. English and American rule in accord. 1102 NEGLIGENCE IN LAW. [book v. officer or officers in charge to perceive that they ought to alter or stop their own course in order to avoid the risk of collision, and that by doing so, that risk would certainly be diminished and might perhaps be avoided.” 1 2 The regulations prescribe that in a “ fog, mist, falling snow or heavy rainstorms ” a vessel should go at a “ moderate speed.” In The Campania 2 the question was what is a moderate speed in a thick fog for a “ twin-screw mail and passenger steam vessel.” The evidence was that she could not safely be navigated at less speed than she was going. But the Court held that in that case the duty of the captain was to stop the engines. The law is well put by Lord Hannen : 3 “ If a vessel is so constructed that she cannot go at a moderate pace she must take the consequences. I quite accept the view that there is great difficulty in dealing with a vessel by checking her speed from time to time — that is, by stopping and taking the way off her — and that it has a tendency to throw a vessel out of her course and lead to difficulties. But I have to deal with the matter as a lawyer, and I have to say what is a moderate speed ; and I say if it be necessary to reduce the speed of a vessel below that which is its lowest speed, though it may cause inconvenience, yet it must be done in what appears to me to be the only practicable way of doing it, namely, by stopping from time to time.” 4 If a vessel is on the open sea in a fog and not on any particular track of ships, until she hears something, it may be assumed no ship is near her. If she hears a whistle astern there is no reason why she should stop, nor yet if the whistle sounds on either beam ; if, however, a whistle is heard on either bow, “ then the ship hearing that sound ought to be brought to a moderate speed though the sound be apparently distant. But if the whistle is ahead, it then becomes necessary to take extreme precautions.” 5 There is no hard-and-fast rule that in a fog a vessel having warning of the proximity of another is not to alter her helm until the signals of the other give a clear indication of her direction. Each case must depend on its own circumstances ; and these may afford reasonable ground for believing what the direction is . 6 In The Martello , 7 the English and American courts were said to be in perfect accord with regard to the duty of a vessel hearing a horn blown in a fog. The law is thus expressed : 8 “In The Kirby Hall, 9 it was held to be the duty of a steamship hearing the steam whistle of another steamship in close proximity, in a dense fog, but unable to ascertain her course and position, to stop and reverse her engines, so as to take all way off of her, and bring her to a standstill. So, in The John McIntyre 10 it was held that while the master of a steamship was not at once bound the moment he heard a whistle, wherever it might be, to stop and reverse his engines ; yet, if in a dense fog he hears the 1 Also per Lord Watson, l.c. G86. 2 [1901] P. 289. The Ebor, 11 P. D. 25. “ Moderate speed ” is a relative term “ according to the circumstances.” 3 The Irrawaddy, Juno 15th, 1887, reported in the Shipping Gazette; noted [1901 1 P. 294. 4 The London, [1905] P. 152; The Britannia, [1905] P. 98; The Challenge and J)uc d'A umale, [1905] P. 198, illustrate the duty to stop engines. 6 Per Lord Esher, M.R., The Ebor, 11 P. D. 27 ; The Kirby Hall, 8 P. I). 71 ; The “ Lancashire ,” [1894] A. C. 1. e The “ Vindomora," 14 P. D. 172; [1891] A. C. 1. 7 153 U. S. (4G Davis) 64. 8 L.c. 72. io 9 P. D. 135. « 8 P. D. 71. COLLISIONS ON WATER. 1103 CHAP. V.] whistle or fog-horn of another vessel more than once on either bow, and in the vicinity, from such a direction as to indicate that the other vessel is nearing him, it is his duty to at once stop and reverse, so as to bring his vessel to a standstill. In The Dordogne , 1 it was said to be the duty of a steamer, on hearing the first whistle, to reduce her speed, and as the vessels get nearer to bring the ship to as complete a standstill as is possible without putting her out of command, and when the other vessel has come close to, even though not in sight, to stop and reverse the engines.” 2 A vessel with the wind free is bound to give way to a vessel close Sailing hauled, and a steam ship is a vessel with the wind free . 3 Thus, in all vessel and ) situations a steam vessel is bound to give way to a sailing vessel ; * or, to state the rule somewhat differently, whatever a sailing vessel going with a free wind would be required to do with reference to any sailing vessels she meets , 5 in that manner should a steam vessel in any situation be required to act, with reference to any sailing vessel whatever . 6 It is equally imperative for the sailing vessel to keep her course . 7 To render a steamer liable for an omission there should, says Lord Duty on Westbury , 8 be proof of three things — first, that the thing omitted to steamer, be done was clearly within the power of the steamer to do ; secondly, that if done it would in all probability have prevented collision ; and thirdly, that it was an act which would have occurred to any officer of competent skill and experience in command of the steamer. The duty on the person in command is to use ordinary care ; that care which an ordinary ship’s officer in the circumstances might reasonably be expected to display. When steam ships are approaching each other neither is to be steam ships excused from responsibility merely because it was the duty of the other mutually to adopt similar precautions, if it appears that the party setting up that a PP roach - excuse enjoyed equal opportunity of conforming to the requirements ,nfe ' of the regulation ; for the law requires both to adopt every necessary precaution and will not tolerate an apportionment of this duty . 9 1 10 P. D. 6. 2 Cp. The “ Franlcland," L. R. 4 P. C. 529. The rule as to whistling is not limited to the case of vessels meeting in narrow waters. “ I hope that, in future, masters of vessels will err, if they err at all, on the side of whistling ” : per Sir F. Jeune, The Uskmoor, [1902] P. 255, a decision on Art. 28 of the regulations. 3 The Saxonia, Lush. 410. 4 TheWarrior, L. R. 3 A. & E. 553 ; The “ Velasquez ,” L. R. 1 P. C. 494 ; The “ Adria- tic ,” 107 U. S. (17 Otto) 512. In Crockett v. Isaac Newton, 18 How. (U. S.) 581, 583, it is said that though this rule should not be observed when circumstances are such that it is apparent its observance must occasion a collision, while a departure from it will prevent one, yet it must be a strong case which will put the sailing vessel in the wrong for obeying the rule. See The Britannia, 153 U. S. (46 Davis) 130, 144. 6 As to this duty, see The Peckforton Castle, 3 P. D. 11. As to “overtaking” ships and ships “ being overtaken,” see The Main, 11 P. D. 132. See The Essequibo, 13 P. D. 51 ; The Talabot, 15 P. D. 194 ; The Molure , [1893] P. 217. 6 The Gazelle, 2 W. Rob. (Adm.) 515, 518 ; The Columbine, 2 W. Rob. (Adm.) 27; The Aleppo, 35 L. J. Adm. 9. f The “ Illinois,” 103 U. S. (13 Otto) 298. '1 8 The “ City of Antwerp,'’ L. R. 2 P. C. 34. Cp. The “ City oj Peking ” v. Compagnie des Messageries Maritimes, 14 App. Cas. 40. ] 2 The “ America ,” 92 U. S. (2 Otto) 432. See Maclaren v. Compagnie Franchise da Navigation a Vapeur, 9 App. Cas. 640 ; The Manitoba, 122 U. S. (15 Davis) 97, where the fault was not stopping and reversing, though the collision was mainly caused by the fault of the other vessel. Cp. The Stanmore, 10 P. D. 134. A trawler’s light should apprise other vessels that she is not able to get out of the way : The Tweedsdale, 14 P. D. 164 ; but if she has got in her trawl, and. is able to manoeuvre, she is to be treated as a steam vessel under command ; The Upton Castle, [1906] P. 147. The duty on a trawler is treated in The King's County, 20 Times L. R. 202. Ships meeting. Regulations. Where the rules are not applicable. The J. R. Hinde. 1104 NEGLIGENCE IN LAW. [book v. It is not the law that a steamer must change her course or must slacken her speed the instant she comes in sight of another vessel, no matter in what direction it may be. 1 Other things being equal, it is the duty of a vessel going against the tide to stop to avoid a collision, since her movements can be controlled with less difficulty than those of the other vessel. 2 If, however, two steamers are meeting each other end on or nearly so, where there is plenty of sea room, and are at a considerable distance from each other, it is not the duty of either to stop, reverse, or slacken. The duty of each is to pass on the port side, and the rate of speed is not an element in the case. 3 The duty of a steamer to keep out of the way of a sailing ship implies a correlative obligation on the part of the ship to keep her course and to do nothing to mislead the steamer. 4 The steamer is not called to act except when she is approaching a sailing ship in such a direction as to involve a risk of collision. She is not required to take precautions where there is no apparent danger. 5 The law on these matters is settled in the Regulations to which allusion has already been made, and to the text of which reference must be had. 6 General Principles. The rules are not an unfailing test of the obligation of the master ; as their application is limited by the consideration that the circum- stances are “ such that it ought to have been present to the mind of the person in charge, that it [the rule] was applicable.” 7 In the event of a case occurring provided for by a rule the applicability of which is not apparent to a competent navigator, the person failing to follow it is discharged, notwithstanding conformity to the rule would have obviated the accident. But admitting the application of the rule, and supposing a departure from it in circumstances where its relevancy ought to be present to the mind of the person responsible, the sequence of cause and effect is not narrowly to be scrutinised ; for the governing consideration is “ that if the absence of due observance of the rule can by any possibility have contributed to the accident, then that the party in default cannot be excused.” 8 Again the literal observance of a rule will not discharge from liability when an observance of the spirit of it would have ensured precautions that would have obviated danger. Thus in TheJ. R. Hinde 9 the rule was that “ no vessel shall be navigated or lie in the river with 1 The. “ Jesmond ” and The “ Earl of Elgin,” L. R. 4 P. C. 1, explained Sciclnna v. Stevenson, The “ Rhondda,” 8 App. Cas. 558. Cp. The Britannia, 153 U. S. (4<> Davis) 130 ; The Servia, 149 U. S. (42 Davis) 144. 2 The “Galatea,” 92 U. S. (2 Otto) 439. 3 The “ Free State,” 91 U. S. (1 Otto) 200. * The Highgate, 62 L. T. 84 1 . 5 The Scotia, 14 Wall. (U. S.) 170. As to circumstances under which a steamship is “ not under command,” The “ P. Caland,” [1893] A. C. 207; The Port Victoria, [1902] P. 25. 6 The Regulations for Preventing Collisions at Sea in force on and after the 1st day of July, 1897, are printed in the Law Reports, [1896] P. 307, and are made under ss. 418, 434, of The Merchant Shipping Act, 181)4 (57 & 58 Viet. c. 60), and an Order in Council, dated 27th November, 1896. The history of the International Rules in the United States which are tho outcome of the English Orders of Sailing of 1863, is given in The Albert Dumois, 177 U. S. (70 Davis) 240. 7 Per Lord Herschell. The Theodore II. Rand, 12 App. Cas. 250, citing Lord Esher, M.R., The Beryl, 9 P. D. 138. s Per Sir James Hannen, The “ Arklow,” 9 App. Cas. 139. 9 [1892] P. 231. COLLISIONS ON WATER. 1105 HAP. V.] its anchor or anchors hanging by the cable perpendicularly from the hawse unless the stock shall be awash.” The rule was complied with ; and with the anchor in this position in a collision damage was done by it. The rule w T as interpreted to mean that “ stock awash is the mini- mum ” ; but that no liability attached, for that though the injury might probably have been averted “ if the anchor had been lowered in time ” ; yet it “ would have been a very smart thing to have lowered the anchor when the collision was imminent ” ; and the rule of duty in such an emergency is no more than that of ordinary diligence. But in The Six Sisters 1 those in charge were in fault in having their anchor The Six “ so high in the water as to be likely to do damage to other barges with ® islers - which this barge was in company,” and following the interpretation of the rule in the earlier decision 2 the principle was extracted that “if barges are navigating together their anchors should be placed suffi- ciently low so as not to be a source of danger to each other in case any contact takes place between them.” This is obviously correct whatever interpretation of the rule is admitted. The duty of a master of a ship, where the intention of not conforming Where to the rules is manifested by another ship with which a collision sub- of sequently ensues, was considered by Dr. Lushington in The Commerce ; 3 forming to the principle laid down was that, when those on board one vessel rules is approaching a collision find that those on the other vessel are not P anife f? ed going to perform their duty, they ought not pertinaciously to adhere ship, to the letter of the rule, when by varying from the rule some manoeuvre The might be executed which might probably avert an impending collision. Commerce. This principle was considered by the Privy Council in The By joyed The Byfoged Christensen , 4 where it was said that, though in itself a sound one, great chrifltense n- caution is necessary in its application ; since “ to leave to masters of vessels a discretion as to obeying or departing from the sailing rules is dangerous to the public ; and that to require them to exercise such discretion, except in a very clear case of necessity, is hard upon the masters themselves, inasmuch as the slightest departure from these rules is almost invariably relied upon as constituting a case of at least contributory negligence.” 5 On the other hand, the principle enunciated is no more than the common law doctrine that one is guilty of contributory negligence who seeing a way of obviating a peril yet refuses to adopt it because the other person is in default. A captain seeing a collision imminent and hesitating to break a rule even to escape from an accident will assuredly have his conduct most leniently considered on the score that he is placed in a situation of peril by the wrongful act oi another person. If the precautionary measure is obvious and simple he will not be excused from taking it because the literal observance of some regulation could be urged in his defence for his action producing the injury. Before the decision in The Khedive 6 the rule was that when two Rule of vessels are approaching near to each other under steam, each steering ilctlon 111 a proper course, and one is suddenly, by a wrong manoeuvre of the other, emer § enc y- i [1900] P.302. 2 Ante, 1104. s 3 W. Rob. (Adm.) 287. 4 4 App. Cas. 669. s L.c. 672. Cp. New York and Liverpool, something wrong so as to be a contributory to the mischief, that would Bywell not render her liable for the damage, inasmuch as perfect presence of Castle. mind, accurate judgment, and promptitude under all circumstances are not to be expected. You have no right to expect men to be some- thing more than ordinary men.” The same holds good in perils brought about by inevitable natural agencies ; for the obligation of the master is to use, not exceptional, but merely competent skill. 4 “ The Court,” says Butt, J., 5 “ is not bound to hold that a man should exercise his judgment instantaneously, a short, but a very short, time must be allowed him for this purpose.” “ Another rule of interpretation of these Regulations,” says Brett, Time of M.R., 6 “ is (the object of them being to avoid risk of collision) that they a PP^ catl0n are all applicable at a time when the risk of collision can be avoided — Regulations not that they are applicable when the risk of collision is already fixed and determined. We have always said that the right moment of time to be considered is that which exists at the moment before the risk of collision is constituted.” Yet, again, since they are issued for the guidance of masters of Rules to be vessels, they are to be read literally. 7 By reading them literally is not 463(1 to be understood the construction of a philologist, or that of one versed 1 c rd y ' in the shades and niceties of meaning words may bear, “ but according to a reasonable and business interpretation of it [them] with regard to the trade or business with which it is [they are] dealing.” 8 By the Merchant Shipping Act, 1894, 9 s. 422, where the master Presumption or person in charge of either vessel 10 sails away after collision without of negli- 1 See note *, 1 106. gence [ n the 2 Cp. The “Tasmania,''' 15 App. Cas. 223; Wilson, Sons tfc Co. v. Carrie, [1894] A. a 116; The" A 5 rapoo1. Ch. 844 ; The Alma, [1903] P. 55. 2 Ante, 180. 3 See now Merchant Shipping Act, 1894 (57 & 58 Viet. c. 00), ss. 502-508. An action brought in the King’s Bench under Lord Campbell’s Act (!) & 10 Viet. c. 93), by a widow against shipowners for the loss of her husband through their negligence, will not be transferred to the Admiralty Division : Roche v. L. <0 S. W. Ry. Co., [1899] 2 Q. B. 502. Ss. 507-513 of 17 & 18 Viet. c. 104, relating to tho institution of proceed- ings by the Board of Trade for the recovery of damages in the caso of loss of life or personal injury, and the procedure thereunder, are repealed by tho Act of 1894, and are not re-enacted. 4 35 L. J. (Ch.) 658 ; tho passage cited in the text is better given than in the report, L. R. 2 Eq. 604. As to limitation of liability, see Rankine v. Raschcn, 4 Rettie, 725. CHAP. V.] COLLISIONS ON WATER. 1113 commerce, on which accounts the owners are not to be rendered liable beyond their interest in the ship and freight for the acts of the master and crew done without their privity or knowledge ; 1 this limitation is by statutory enactment. But in the celebrated judgment delivered in The Rebecca. The Rebecca 2 it is affirmed that the law of England and America dif- fered, apart from the statutes, in this respect from the general maritime laws of Europe. By that general maritime law the liability of owners for the wrongful acts of the master was always limited to the interest they have in the ship ; so that by abandoning the ship and freight to the creditor they discharged themselves from all personal responsibility. In the law of France this was known as contrdt de pacotille. The rule of the civil law, however, is Omnia enim facta magistri debet prcestare qui eum prceposuit . 3 Non autem ex omni causa praetor dat in exercitorem actionem, sed ejus rei nomine, cujus ibi prcepositus fuerit, id est, si in earn rem prcepositus sit . 4 Aliquatenus culpce reus est, quod opera malorum hominum uteretur ; ideo quasi ex maleficio teneri videtur , 5 The rule of the English common law is the same ; but on the petition of merchants and shipowners it was established in England by various Acts of Parliament that the common law liability should be limited as we have seen. 6 The first of these is no earlier than 7 Geo. II. c. 15. The right of a ferry-boat on the score of public convenience to cross Ferry-boat, a river in a very dense fog, with the knowledge that vessels were lying in her track, was contended for in The Lancashire ? “If,” said Sir Robert Phillimore, 8 “ this ferry steamer thinks herself justified in going across the river in such a dense fog as this, she takes upon herself all the responsibility incident to such a course.” The rules governing crossing vessels are applied to ferry-boats. 9 A ferry-boat has not an exclusive right of way, and a steam ferry-boat must keep out of the way of sailing vessels. 10 In The Relief 11 it was indeed laid down that ferry-boats had a right to an undisturbed passage between their landing-places, and that there was a duty on other vessels “ to keep as near as possible the centre of the stream ” so that the entrance and exit from the ferry slips should not be impeded ; but in The Manhasset 12 it was said that ferry- boats have no prior right of navigation. In The Exchange 13 again, ferry- boats were declared entitled to more than ordinary diligence on the part of other vessels. Ferry-boats as an accustomed part of the navi- gation of any district, going in a defined track and probably fre- quently, affect other vessels with knowledge of their course of naviga- tion ; and to this extent they are entitled to a higher degree of care from other ships than the mere casual navigator ; insomuch as the presence and crossing of the ferry-boat is a constant and calculable incident of the navigation, while the presence of any other particular vessel is only occasional. While The Lancashire stands as an autho- rity, any higher privilege than this cannot be asserted for ferry-boats in this country. i Butler v. Boston Steamship Co., 130 U. S. (23 Davis) 527 ; The “Scotland,” 105 U. S. (15 Otto) 24, where the exemptions and limitations of the American Act cor- responding to the clauses above noticed were held to apply to foreign as well as domestic vessels. See also Constable v. National Steamship Co., 154 U. S. (47 Davis), 51, 59. 2 Ware (U. S. Dist. Ct.), 188. 3 D. 14, 1, 1, §5. 4 D. 14, 1, 1, § 7. 5 Inst. 4, 5 3 ; D. 44, 7, 5, § G. 6 Abbott, Merchant Ships ( 14th ed. ), 637. 7 L. R. 4 A. & E. 198. s L.c. 202. 9 The Breakwater, 155 U. S. (48 Davis) 252. Rowing-boats for the purpose of carrying a white light are specifically included in the Regulations of 1897, Art. 7, 4. 10 The Elizabeth, 114 Fed. Rep. 757. 11 Olcott (Adm.), 104. 12 34 Fed. Rep. 408. 13 10 Blatchf. 168. Queen’s ship. 1114 NEGLIGENCE IN LAW. [hook v. A custom was alleged in The Mohegan 1 for ferry-boats to yield their privilege in crossing to larger steamers, or of the latter to exact such a privilege and to take the right of way, to excuse a collision ; of course it was disallowed. Where damage is done by a vessel the property of the Crown the responsibility rests with the actual wrongdoer, 2 and where a collision was caused by the commander of a Queen’s ship anchoring too near a vessel in squally and tempestuous weather, he was condemned in the damage. 3 1 91 Fed. Rep. 810. 2 The Mentor, 1 C. Rob. (Adm.), per Sir W. Scott, 181 : “ The actual wrongdoer is the man to answer in judgment ; to him responsibility is attached in this Court. He may have other persons responsible over to him ; and that responsibility may be enforced. As, for instance, if a captain make a wrong seizure, under the express orders of an admiral, that admiral may be made answerable in the damages occasioned to the captain by that improper act ; but it is the constant practice of this Court to have the actual wrongdoer held the party before the Court.” The Athol, 1 W. Rob. (Adm.), per Dr. Lusliington, 381. 3 The Volcano, 2 W. Rob. (Adm.) 337. CHAPTER VI. TELEGRAPHS AND TELEPHONES. The duties of telegraph and telephone companies may conveniently be treated here in connection with the duty of carriers ; though the relations arising out of them are not to be considered as a portion of the law of bailments. The law in England relating to telegraphs is regulated by the Telegraph Act, 1868, 1 consolidated with the Telegraph Act, 1869. 2 Under these Acts the Postmaster-General has the exclusive privilege of sending telegrams within the United Kingdom of Great Britain and Ireland, with the exception of : (1) Telegrams transmitted by a telegraph maintained or used solely for private use for the business of the owner. (2) Telegrams transmitted by a telegraph maintained for private use, and in respect of which no money or valuable consideration passes ; that is, apparently, telegrams relating to the owner’s friends sent gratuitously. (3) Telegrams licensed by the Postmaster-General. (4) Telegrams transmitted to or from any place out of the United Kingdom of Great Britain 3 and Ireland. Attorney -General v Edison Telephone Co.* decides that a telephone is a telegraph within the meaning of these Acts. In the judgment in that case Professor Stokes is quoted 5 as saying : “ If a single word is to be used to include both a telephone and a telegraph it must, in my opinion, be wide enough to cover every instrument which may ever be invented which employs electricity transmitted by a wire as a means for conveying information.” In America there are a number of cases asserting the practical identity of the rules binding telephone and telegraph companies. 6 An effect of the Telegraph Acts vesting telegraphs in the Post- master-General is that no liability for negligence exists except against the person or persons actually in default. 7 The law in England and in America on the subject has very widely diverged. In England it has been established that the liability of telegraph companies arises entirely out of the contract between the 1 31 & 32 Viet. c. 110. 2 32 & 33 Viet. c. 73, extended 33 & 34 Viet. c. 88, which, is amended 41 & 42 Viet. c. 76, ss. 10, 11 ; 48 & 49 Viet. c. 58 ; 55 & 56 Viet. o. 59 ; 60 & 61 Viet. c. 41 ; The Wireless Telegraphy Act, 1904 (4 Edw. VII. c. 24) ; 6 Edw. VII. c. 13. 3 Sec. 5 of 32 <& 33 Viet. c. 73. * 6 Q. B. D. 244. a L.c. per Stephen, J., 251. 6 Thompson, Negligence, § 2392 n. 3. 7 See ante, 241. Statutory law. Exceptions from the Postmaster- General’s privileges. A.-G. v. Edison Telephone } Co. Effect of the Telegraph Acts with regard to liability for negligence. Divergence of the English and American law 1J1G NEGLIGENCE IN LAW. Dr. Wharton’s view. Messrs. Shearman and Red- field’s view. Principle stated by Holt, C. J. No analogy between a consignment of goods through a carrier and the trans- mission of a telegram. [BOOK V. company and the sender. 1 In America it has been equally clearly decided that the liability of a telegraph company depends on some principle much wider than the contract entered into with the sender. 2 As to what that principle is there is considerable difference of opinion. “ Since,” says one learned writer, 3 “ a telegraphic company, wielding a power for good or evil, only transcended by railway corpora- tions, is eminently within the scope of the rule sic utere tuo ut alienum non Icedas ,” a telegraph company should be liable apart from contract. But the maxim vouched is, after all, not of universal application ; and there seems a marked difference between those acts in the manage- ment of property which, when done by me, work harm to my neighbour (and even these are not universally actionable ; for instance, inter- fering with his prospect), and those acts which, as done by me, are innocuous, but which may become injurious if my neighbour pleases to make them so by using them for his own end. Again, telegraph companies are said to be liable as common carriers. “ We entertain no doubt,” say the authors of a recognised American treatise on the subject, 4 “ that they [telegraph companies] are common carriers of messages, subject to all the rules which, in their nature and by fair analogy, are applicable to all cases of common carriers.” They preface this with the statement : “ of course they are not subject to the stringent liability of goods carriers as insurers.” The position of telegraph companies, however, seems more readily referable to a wider principle extending through all the more common and useful employments, and which is thus stated by Holt, C.J. : 5 “ If a man takes upon him a public employment, he is bound to serve the public as far as the employment extends ; and for refusal an action lies, as against a farrier for refusing to shoe a horse, against an inn- keeper refusing a guest when he has room, against a carrier refusing to carry goods when he has convenience, his waggon not being full. . . . So an action will lie against a sheriff for refusing to execute process ” ; and is not to be set down to their being included in the class of common carriers, with an exemption (apparently quite arbitrary) from some of the most onerous incidents of the position. The objection of the Queen’s Bench to considering telegraph companies as common carriers, that there is no analogy between a con- signment of goods through a carrier and the transmission of a telegram, even apart from its authority, is of no little cogency. “ We cannot see,” say the Court, “ how the person to whom a telegraphic message is sent can be said to have a property in the message, any more than he could have if it had been sent orally by the servant of the sender.” 6 1 Dickson v. Reuter's Telegraph Co., 3 C. P. D. 1, affirming 2 C. P. D. 02 ; Playford v. United Kingdom Electric Telegraph Co., L. R. 4 Q. B. 700. 2 Shearman and Redfield, Negligence, § 528 et seqq. ; Wharton, Negligence, § 750 et seqq.; Redfield, Carriers, Part IV., Telegraph Companies, §§ 541-571 ; Thompson, Negligence, §§ 2392-2529. 3 Wharton, Negligence. § 758. 4 Shearman and Redfield, Negligence, § 534. This view is powerfully combated by Hunt, J., in Leonard v. New York, c be. Telegraph Co., 4 1 N. Y. 544, 57 1 . s Lane v. Cotton, I Ld. Raym. 054. If this be so, a considerable amount of rhetoric in Shearman and Redfield, Negligence, § 535, becomes purely ornamental. g Playford v. United Kingdom Telegraphic Co., L. R. 4 Q. B. 714. See Holmes, The Common Law, 203. See, too, per Bigelow, C.J., in Ellis v. American Telegraph Co., 95 Mass. 220, 231 : “ Under this provision, an owner or manager of such a line becomes to a certain extent a public servant or agent. He is bound, under a heavy penalty, to the due and faithful execution of the service which he holds himself out as ready to perform. He cannot refuse to receive and forward despatches ; nor can he select the 1117 chap, vi.] TELEGRAPHS AND TELEPHONES. Once more, telegraph companies are said to be bailees, and the Messrs, receipt of messages a bailment ; 1 but a bailment implies the delivery s of property , 2 and that which the company receives is never delivered, view. They are also said to make themselves the agents of both the sender La Grange and the receiver of messages by a profession L1 to transmit for hire v. South- messages for individuals, and to deliver faithfully to others such g, degraph messages as are entrusted to them.” 3 This view is refuted in Bigelow s Co. Leading Cases on Torts . 4 The learned author of that work favours two other hypotheses for fixing the position of telegraph companies : “ Their Dr. liability for negligent mistakes (and perhaps delays) arises either on the ^® e ^^ 0 s ns ground of a misrepresentation of agency or on the broad principle that M1 °” es 1 a person must so conduct his business as not to injure others.” As to the first of these, in England at least, it is clear that no action is maintainable for a mere untrue statement, although acted on to the damage of the person to whom it is made ; unless that statement is false to the knowledge of the person making it, and made with the view of its being acted on . 5 As to the second, in the unlimited way in which it is expressed, there is no such principle ; 6 and the act of the company is not injurious without an intervening act of another to give it force and effect . 7 From this elementary difference in the estimate of the position of telegraph companies flows a variety of consequences that greatly differentiate the law in the two countries. In England, the liability of telegraph companies, being based upon English rule contract alone, falls under the rule prevailing in cases where a person ^ a t c ° t coa ' undertaking the performance of work requiring skill, is held to owe a between the duty to the person employing them, but not to third persons, though company and the persons for whom he will act. He cannot transmit messages at such times or in such sender same order as he may deem expedient. He is required to send them for every person who as American, may apply, at a usual or uniform tariff or rate, without any undue preference, and according to established regulations applicable to all alike.” 1 Scott and Jarnagin, Law of Telegraphs, § 95. 2 Ante, 730. 3 La Grange v. South-Western Telegraph Co., 25 La. Ann. 383, 384. See New York, dec. Telegraph Co. v. Dryburgh, 35 Pa. St. 298, 303. 4 At 023 el seqq. s Pasley v. Freeman, 3 Term. R. 51, 2 Sm. L. C. (11th ed.), 66. The English rule on misrepresentation of agency is thus stated by Lord Esher, M.R., in Firbank’s Executors v. Humphreys, 18 Q. B. D. 60 : “ Where a person by asserting that he has the authority of the principal induces another person to enter into any transaction which he would not have entered into but for that assertion, and the assertion turns out to be untrue, to the injury of the person to whom it is made, it must bo taken that the person making it undertook that it was true, and he is personally liable for the damage that has occurred.” An action will not lie for a representation not intended by the defendant to induce the plaintiff to act on it : Swift v. Winterbotham, L. R. 8 Q. B. 244, 253 ; nor if intended to induce the plaintiff to act on it, if the defendant believed it to be true : Evans v. Collins, 5 Q. B. 804 ; Richardson v. Silvester, L. R. 9 Q. B. 34. To constitute a right of action the misrepresentation must be made knowingly or without belief in its truth, or recklessly without caring whether it is true or false : Derry v. Peek, 14 App. Cas. 337. For the distinction between the case of a telegraph company wrongly transmitting a message, and the principle of estoppel asserted in Collen v. Wright, 7 E. & B. 301, see per Brett, L.J., Dickson v. Reuter's Telegram Co., 3 C. P. D. 8. Salvesen v. Rederi Aktiebolaget N ordstjernan, [1905] A. C. 302. 6 At least by the law of England, Alton v. Midland Ry. Co., 19 C. B. N. S. 213. Ante, 1016. See also Dickson v. Reuter's Telegraph Co., 2 C. P. D. 70. 7 Dr. Bigelow reasons as follows, at 626 : “ Now the telegraph is resorted to only in cases of importance and urgency; so that the very fact of presenting a message for transmission indicates that it concerns a matter of importance. The company cannot, therefore, fail to know that a mistake in transmission will be likely to produce damage to the receiver by causing him to do that which otherwise he would not do. Knowing, then, the probably evil consequences of transmitting an erroneous message, they owe a duty to the receiver of refraining from such an act, and if (by negligence) they violate this duty they must, on plain legal principles, be liable for the damage produced,” l . 3 “ He was the son of Antonio Giordano, an obscure artist, whom he had surpassed when he was eight years old.” “ Such was the demand for his drawings and sketches, that his father continually urged him to despatch by repeating to him, ‘ Luca, fa presto ’ (‘ Luke, make haste ’), and hence ho came to be designated by this phrase ” ( Bryan, Dictionary of Painters, sub nom.). “ Giordano was the last of the great Italian painters. Some of his works show marks of genius, and with more conscientious labour he might have equalled the greatest masters, but owing to his fatal facility of execution he violated all the rules of good taste.” (Ohamplin, Cyclopedia of Painters, sub nom.). SKILLED LABOUR. 1131 chap, r.] equal to Giordano’s talents elaborated by an average man’s care. The opinion of Mommsen, in which Wharton concurs, is that the skill exacted from such a man would be, not the skill he could exert, but the skill that he usually employed when working for others ; and this seems to give a satisfactory test for the decision of these cases. An opera singer, engaged on account of special and well-recognised Opera powers, could not avoid liability for negligence by showing that her singer ' performance was up to the average of singers. The test would be whether her performance was equal to that which persons of similar powers in similar positions could be reasonably expected to give ; or, if the performer were phenomenal, whether the performance was such as was to be expected from experience based on the result of the average performance of the artiste, or perhaps whether she had resorted to her repertoire and given an adequate specimen of her skill and talent. 1 Accountants and Auditors. The Oxford Dictionary 2 defines Accountant : “ One who pro- Accountant fessionally makes up or takes charge of accounts.” There are no defined, legal conditions to be complied with preliminary to the practice of the profession, as is the case with medical men or solicitors, nor is a licence needed, as with auctioneers ; although an “ Institute of Chartered Accountants in England and Wales,” incorporated by Royal Charter in 1880, and a “ Society of Accountants and Auditors,” incorporated and registered in 1885 under sec. 23 of the Companies Act, 1862, exist to establish and maintain a standard of pro- fessional efficiency in it ; but neither has any coercive power over others than its members. The guiding principle with w T hich to test the competence of prac- Rule of skill, titioners is summed up in the maxim : Spondet peritiam artis. The value of a profession of reasonable skill varies according to the circumstances. Theoretically the standard to be attained is that of efficiency : Spondet diligentiam gerendo negotio parem ; but this is to be estimated by the general average efficiency of the same class of people at the same time and place and in analogous circumstances. Any person setting up to possess skill must have his pretensions gauged by the proficiency of the general body of those with whom he holds himself out as competing for business. Thus, though the standard set up by the two bodies just noticed is in no way a pre- requisite to the practice of the business of an accountant, still, if the members of these two bodies form such a proportion of practising ac- countants that their standard represents the average skill and compe- tency of practitioners at large, so that one engaging an accountant would normally expect that he was retaining a practitioner with skill equal to the average of theirs, the standard of competent accountantship 1 In Price v. M elropolitan House, Ac. Co., 23 Times L. R. C30, an agency case, Cozens Hardy, M.R., adopted as “ very accurately ” stating the law (but somewhat unnecessarily, so far as the facts are reported), a direction to a jury by Lawrance, J. : “ A man who is employed to act for another as his agent is bound to exercise all the skill and all the knowledge he has of a particular business, all the diligence, all the zeal, and all the energy that he is capable of, and any interests he may have himself he is bound to exercise to the fullest extent for the sole and exclusive benefit of the person for whom he is acting.” This is admirable moral philosophy, but the law only requires “ ordinary diligence.” Story, Agency, § 183- Post, 1156, 1211. 2 Dp Murray’s New English Dictionary, sub voce. 1132 NEGLIGENCE IN LAW. Auditors defined. Duties. [BOOK VI. would not differ from their standard of qualification ; not by direct reference to them, but because the proportion of practising accountants possessing their qualifications would coincide with the standard of efficiency prevailing amongst accountants generally : would indicate an amount of skill that one engaging an accountant would be in law entitled to look for. This appiies merely to skill at the work of an accountant. The general educational qualification, which the ex- amination papers set by the two societies show to be required from their members, is nihil ad rem. If the person undertaking accountants’ work, at the time of his employment, disavows possessing any indicated amount of business aptitude, or if the client knows who he is engaging and does so from any personal view apart from the consideration of professional ability, the rule of skill to be exacted loses its relation to the general standard of the art, and is determined by regard to the particular person. In short, the rule applicable in the case of the negligence of an accountant is identical with that we are presently to consider in more detail, of a medical practitioner ; except that in the present case there is no com- plication of statutory requirements, and so while there is no disability to practise there is also no minimum statutory qualification to attain . 1 The duties of an auditor are identical with those of an accountant ; the two maybe regarded as related as species to genus. An “auditor” is so named from the fact that accounts were formerly vouched for orally. An auditor is usually an official, but may be a private, person, more or less skilled in accounts,. “ whose duty it is to receive and examine accounts of money in the hands of others ” and “ who verifies them by reference to vouchers and has the power to disallow improper charges .” 2 While the work of an auditor is most relevant to an accountant’s business, there is no legal reason, apart from some quite exceptional statutory enactment , 3 why an auditor should be an accountant ; indeed the legislature has in more than one case 4 assumed that an auditor should not be an accountant. An auditor 5 is generally identified with work done under statutory requirements, through the continually recurring provision in Acts of Parliament relating to Companies, Benefit Societies, Local Govern- mental authorities and the like purposes, that their accounts must be audited. Yet the employment is concerned as well with private business and comes under the rules of the common law. There is, however, a difference. An auditor engaged by a private firm to do work on their books, in the majority of cases would work under a special contract ; he would be engaged to seek out some special source of error, or to prepare books for some purpose indicated to him ; while the audit by statute is directed to more general, at any rate more uniform, considerations ; its range is prescribed by the statute which further indicates its purpose. Apart, then, from any complication, either contractual or statutory, the duty of an auditor is “ not to confine himself merely to the task of verifying the arithmetical accuracy of the balance sheet, but to inquire into its substantial accuracy.” 6 1 Post, 1156. 2 New English Dictionary, sub voce. 3 E.g., 67 & 58 Viet. c. 47, s. 3. 4 E.g., 8 & 9 Viet. c. 16, s. 108; 25 & 26 Viet. c. 89; First Sched. (1) Table A (93), now superseded by the Order of 30th July, 1906. 6 If there, is more than one auditor, each has full independent power : Steele v. Sutton Oas Co., 12 Q. B. D. 68. 6 Leeds Estate Building and InveslmentCo. v. Shepherd, 36Ch.D., per Stirling, J., 802. SKILLED LABOUR. 1133 CHAP. 1.1 Yet “ he is not bound to do more than exercise reasonable care and skill in making inquiries and investigations ” ; he must not certify what he does not believe to be true ; and he must use reasonable care and skill before he accepts what he has to certify as true. What is reasonable care in any case must depend upon the circumstances of that case. “ Where there is nothing to excite suspicion very little inquiry will be reasonably sufficient. . . . Where suspicion is aroused more care is obviously necessary ; but still, an auditor is not bound to exercise more than reasonable care and skill, even in a case of suspicion, and he is perfectly justified in acting on the opinion of an expert where special knowledge is required.” 1 Thus in In re Kingston Cotton Mill Co. (No. 2), 2 the Court of Appeal reversed Williams, J., and held that it is “ no part of an auditor’s duty to take stock.” “ He must rely on other people for details of the stock-in-trade on hand. In the case of a cotton mill he must rely on some skilled person for the materials necessary to enable him to enter the stock-in-trade at its proper value in the balance sheet.” 3 An auditor’s duty is more extensive than to see whether there are vouchers apparently formal and regular, justifying each of the items placed before him. He is not only entitled but justified and bound to make fair and reasonable examination of the vouchers to see that there are not amongst the payments so made payments which are unauthorised or improper. 4 An auditor must be honest ; if he is that, a mere mistake does not render him liable for negligence, unless it is such as points to pro- fessional incompetence. Again, negligence alone does not render him liable to any one besides those with whom he has a con- tractual duty. Erroneous statements made by him and acted on to their damage by people who have not employed him, to subject him to liability must be fraudulent — false representations made with the intention they are to be acted on. 5 Generally, all that has been said hitherto about the duty of a non-statutory auditor holds where the auditor works under statutory obligation. The statute imposing the obligation must, however, be closely Special looked at for the particular powers and duties conferred and imposed. statut ory Two or three instances are all that can be given here. The Companies duties 3 an Clauses Consolidation Act, 1845, 6 provides that directors are to deliver to the auditors, accounts and balance sheets before every ordinary meeting of shareholders. The auditors are either to report on or to confirm these, and their report or confirmation is to be read at the meeting. The accounts put before the auditors are to be proper accounts of the qompany of all moneys received or expended. The books of the company are to be balanced, and a balance sheet is to be made up which must exhibit a true statement of the capital, stock, credits and property of every description belonging to the company, and the debts due. 1 In re London and General Bank (No. 2), [1895] 2 Ch., per Lindley, L. J., 683. See In re Kingston Cotton Mill Co. (No. 2), [1896] 2 Ch., per Lopes, L.J., 288. 2 [1896] 2. Ch. 279. 3 L.c. per Lindley, L.J., 286. 4 Thomas v. Devonport Corporation, [1900] 1 Q. B., per Lord Russell, C.J., 21. 5 Le Lievre v. Gould, [1893] 1 Q. B. 491. Teacher v. Calder, [1899] A. C. 451, is the case of an auditor not apprised of the purpose of his audit, and auditing on differen t principles from those he would have adopted had he been aware of its purpose, and whose audit was set aside on that ground. Companies Act, 1000 Misfeasance under Companies (Winding up) Act, 1890. Public Health Act audit. 1134 NEGLIGENCE IN LAW. [book vi. The main provisions witli regard to auditors under the Companies Acts are to be found in the Companies Act, 1900. 1 An auditor or auditors must be appointed at each meeting but must not be a director or officer of the company. An auditor has a right of access at all times to the books, accounts and vouchers of the company, and is entitled to require information and explanation from the directors and officers. He must certify on the balance sheet whether his requirements have been complied with or not. He must report to the shareholders on the accounts examined, and on every balance sheet presented, and whether it presents a true and correct view of the company’s affairs. 2 The statutory power just noticed giving an auditor power to require information or to have access to books and accounts does not impose on him the duty on all occasions to do so. There is a discretion conferred. 3 Yet if the report appears defective because the auditor has not availed himself of the sources of information open to him, he will expose himself to an action for negligence at the hands of those, whoever they may be, to whom he owes a duty of care and to the extent that the damage incurred flows in natural and immediate sequence from his neglect. 4 There is, further, the remedy against the auditor for misfeasance 5 under sec. 10 of the Companies (Winding-up) Act, 1890, 6 if the company is in liquidation ; since it has bean held that a properly appointed auditor is an “ officer ” of the company within the section. 7 If the auditor is not an officer of the company, or the company is not being wound up, his liability may still be enforced by the company by action ; 8 and, if there is false and fraudulent representation, by any one injured, according to the rules of the common law. The system of audit established by the Public Health Act, 1875 9 10 (where an urban authority is not the Council of a borough ln ), which is incorporated by the Local Government Act, 1888, 11 and applied to the London boroughs by the London Government Act, 1899, 12 must be independently noticed. The statute makes provision for an annual audit, and the appointment of an auditor, and gives power to the auditor by summons to require the production of all documents and papers, and also to require any person in whose power or possession they are or should be to appear at the audit and to sign a declaration as to the correctness of the same. Penalties are imposed in the case of default or false declaration. 13 The auditor is to disallow every item of account contrary to law, 1 63 & 04 Viet. c. 48, ss. 30, 31 ; See 25 & 26 Viet. c. 89 ; First Sehed. (1) Table A (Revised), 103-109 ; W. N. 11, 8, 06. 2 See 45 Solicitor’s Journal, 167. Cp. The Companies Act, 1879 (42 & 43 Viet, c. 76), ss. 7, 8, under which the auditors are entitled to a list of all the books kept by the company. The Act applies to every banking company registered as “ limited ” after the passing of the Act. 3 Julius v. Bishop of Oxford, 5 App. Cas. 24 1 . 4 Leeds Estate Building and Investment Co. v. Shepherd, 36 Ch. I). 787. The penalty of s. 28, 63 & 64 Viet. c. 48, for false statements is in addition to the civil action. 5 In re Cardiff Savings Bank, Davies's Case, 45 Ch. D. 537. e 53 & 54 Viet. c. 03. 7 In re London and General Bank, [1895] 2 Ch. 166 and 673. In re. Kingston Cotton Mill Co., [1890] 1 Ch. 6. Cp. Western Counties, Dr. Bonham's case, 8 Co. Rep. 107 a, 114 a ; College of Physicians v. Dr. West , 10 Mod. 353. o Rex v. Askew, 4 Burr. 2180. MEDICAL MEN. 1151 CHAP. II.] admission being a judicial power requiring the exercise of discretion, cannot be delegated, 1 but requires to be exercised by the president and fellows, or the majority of those present, in the same manner as at the election of a fellow ; though it is competent for the body at large to appoint particular persons of their own number to have the immediate direction of it ; since the process of examination can be conducted by few only at the same time. 2 II. The second class of medical practitioners is that of surgeons. II- Surgeons. Their peculiar practice consists in the use of surgical instruments and in the cure of outward diseases, whether by external applications or by external or by internal medicines. The Act of 3 Hen. VIII. applies to these also. By that Act alone 3 Hon - ' nI - can punishment be inflicted on a person for practising surgery without ( ' * licence in any part of the kingdom except within London and West- minister and seven miles around these cities. 3 The Act imposes a penalty of £5 for every month during which he may so practise. Though unrepealed this Act is practically obsolete, since there is no instance of any person having obtained a licence under it for several centuries. 4 The Guild of Barbers had been incorporated in 1461. In 1541 the Incorpora- Guild of Barbers and the Society of Surgeons were amalgamated under the name of the Mystery and Commonalty of Barbers and Surgeons of surgeons. London by 32 Hen. VIII. c. 42. 5 They received charters of privilege 32 Hen. VIII. from James I. and Charles I. The surgeons’ branch was, however, c - 42 - separated from the barbers’ branch of the union by 18 Geo. II. c. 15, 18 Geo. II. which relieved its members from the necessity of obtaining the licence c- li4 ' under 3 Hen. VIII., and gave them an exclusive right to practise in and about London, and a concurrent right, with those licensed by the ordinary, of practising in all other parts of the kingdom. The effect of 18 Geo. II. c. 15, seems to be to confine the right to practise surgery in London and seven miles round to those examined and admitted by the College of Surgeons. It divides those practising in the rest of the kingdom into two classes : First, members of the College of Surgeons ; who may practise in every part of the dominions of the Crown. 6 Secondly, surgeons licensed under 3 Hen. VIII. ; who may practise in any particular diocese in which they are licensed, except within London and Westminster and seven miles round. 7 III. A third class of medical practitioners is that of apothecaries. III. Apothe- The business of an apothecary was concerned with the mixing and canes - dispensing of drugs, and was anciently carried on by grocers in conjunc- tion with their ordinary business ; but in 1615 grocers and apothecaries 1 Vin. Abr. Deputy, 2, citing Bro. Abr. Deputie, 19. 2 Rex v. Askew, 4 Burr. 2186. The duty of a medical school to its students (in the case cited — women) is discussed very fully in Caddis v. Balfour, 17 Rettie, 1 138. 3 18 Geo. II. c. 15. * Willcock, Laws relating to the Medical Profession, 58. Cp. Davies v. Makuna, 29 Ch. D. 596. D’Allax v. Jones, 26 L. J. Ex. 79, was on a point of pleading, and does not seem to have been carried further, so that the point was not argued, that since the Bishop of London and the Dean of St. Paul’s have ceased to hold examina- tions in London, or the bishops in their dioceses, compliance with the statute was impossible. 5 As to these see Stow, Survey of London (6th ed. ), vol. ii. 295. 6 The Medical Act, 1886 (49 & 50 Viet. c. 48), ss. 6, 24, 25. Smiles v. Be'ford (Tupper), 1 Upp. Can. App. 436. < Willcock, Laws relating to the Medical Profession, 64. A physician who acts as a surgeon can recover for his services ; Little v. Oldaker, Car. & M. 370 ; Battersby v. Lawrence, Car. & M. 277. The Apothe- caries Act, 1815. Scope of the Act indicated in Davies v. Makuna. Limitation expressed by Cresswell, J. No difference between pro- hibition under a penalty and an absolute prohibition. Registration. 1152 NEGLIGENCE IN LAW. [book vi. were formed into distinct corporations. Even subsequently to this period the Apothecaries’ Company was looked upon as a mere trading company, and whoever thought fit to do so was at liberty to sell physic throughout the rest of the kingdom, provided he had conformed to the provisions of the Act of 5 Eliz. c. 4, about apprentices. Besides this, apothecaries on occasion prescribed the medicines they sold ; a practice called in question by the College of Physicians, though held lawful by the House of Lords, overruling the Courts below 1 in the case of the College of Physicians v. Pose. 2 The Apothecaries Act, 1815, 3 in the words of Willcock : 4 “ for the first time, placing them [apothecaries] as a body on the footing of a liberal profession.” This Act not only imposes a penalty for practising without the certificate of the court of examiners constituted by the Act, 5 but renders the act of practising without the certificate unlawful. 6 7 Cotton, L.J., in Davis v. Makuna, 7 thus indicates its scope : “ The Act does not define the nature of an apothecary’s employment, but dispensing, mixing medicine, giving medical advice, and attending the sick as medical adviser must be considered acting as an apothecary.” The limitation expressed by Cresswell, J., 8 must not be disregarded : “ The mere fact of the defendant’s having supplied medicines, does not necessarily show that he practised as an apothecary ; for a surgeon may lawfully do that, if the medicines are administered in the cure of a surgical case. If, for instance, in the case of a broken leg it becomes necessary to administer medicine, no doubt the surgeon may lawfully do so ; but, on the other hand, if a surgeon takes upon himself to cure a fever, he steps out of his lawful province, and is not authorised to administer medicine in such a case.” 9 It does not appear that there is any difference between the prohibition of an act under a penalty (not being one merely for revenue purposes) and an enact- ment declaring it absolutely unlawful ; since in both cases they are things “ forbidden and absolutely void to all intents and purposes whatsoever.” 10 By the Medical Act, 1858, and its amending Acts 11 a system of registration of medical practitioners is provided for, so that none other than registered persons shall be entitled to claim the title of legally or duly qualified medical practitioners ; 12 nor to recover any charge in 1 3 Salk. 17, 0 Mod. 44. 2 (1703), 5 Bro. Pari. Cas. 553. 3 55 Geo. III. c. 194. Rex v. Kilderby, 1 Wms. Saund., note (b), 309, 1 Wins. Notes to Saund., note (c), 513 ; Apothecaries' Co. v. Jones, [1893] 1 Q. B. 89, is a decision on the 20th section of the Act, that one penalty only can be recovered, though three several patients are treated on one day. * Laws relating to the Medical Profession, 19. 3 Sec. 20. 6 Sec. 14. As to an apothecary’s qualifications, Wogan v. Somerville, 7 Taunt. 401. As to what constitutes practising, W oodward v. Ball, 0 C. & P. 577. 7 29 Ch. D. 606. s Apothecaries' Co. v. Lotiiuja, 2 Moo. & R. 499. 9 Allison v. Haydon, 4 Bing. 619, 3 C. & P. 246 ; Leman v. Fletcher, L. R. 8 Q. B. 319. 10 Per Lord Chancellor Hatherley, In re Cork and Yovghal By. Co., L. R. 4 Ch. 758 ; Taylor v. Crowland Gas and Coke Co., 10 Ex. 293 ; Melliss v. Shirley Local Board, 16 Q. B. D. 446, 454 ; Harris v. Runnels, 12 How. (U. S.) 79. 11 21 & 22 Viet. c. 90, amended by 22 Viet. c. 21 ; 23 & 24 Viet. ec. 7 and 66 ; 25 & 26 Viet. c. 91 ; 31 & 32 Viet. c. 29 38 & 39 Viet. c. 43 ; 39 & 40 Viet. cc. 40 and 41 ; 49 & 50 Viet. c. 48 ; s. 27 amended 5 Edw. VII. e. 14. 12 The Court of Queen’s Bench have held that the registration to bo effectual must be before action brought : Leman v. Ilouseley, L. R. 10 Q. B. 66 ; though not neces- sarily at the time of the attendances : Turner v. Reynall, 14 C. B. N. S. 328. See, however, as to this last case, Ilowarth v. Brearlcy, 19 Q. B. D. 303. A book purporting MEDICAL MEN. 1153 CHAP. II.] any court of law for any medical or surgical advice or attendance, 1 or for the performance of any operation, or for any medicine which they have both prescribed and supplied ; 2 nor to hold any of the Government or other medical appointments specified in the Act ; 3 nor to sign any certificate required by Act of Parliament to be signed by a medical practitioner ; 4 and any one assuming a title implying that he is registered is liable to a fine of £20. 5 By section 6 of the Medical Act, 1886, 6 “a registered medical Medical Act, practitioner shall, save as in this Act mentioned, be entitled to practise 1886 - medicine, surgery, and midwifery in the United Kingdom and (subject to any local law) in any other part of Her Majesty’s dominions, and to recover in due course of law in respect of such practice any expenses, charges, in respect of medicaments or other appliances, or any fees to which he may be entitled, unless he is a fellow of a college of physicians the fellows of which are prohibited by bye-law from recovering at law their expenses, charges, or fees, in which case such prohibitory bye-law, so long as it is in force, may be pleaded in bar of any legal proceedings instituted by such fellow for the recovery of expenses, charges, or fees.” This proviso refers to the practice of physicians, whose employ- ment, like that of barristers, 7 had always previously been held to be of a merely honorary description, 8 and not to support an action for fees unless by virtue of a special contract. 9 The Act of 34 & 35 Hen. VIII. c. 8, providing that persons, being 34 & 35 no common surgeons, may minister medicines notwithstanding the ^® n ' ' nI ' statute, 10 has an important bearing on what has gone before. The effect j tic ’ hardgori of it is summed up by Richardson, C.J., in Le Colledge de Physitians c.J.’s, inter- case 11 as follows: “We are of opinion, that this statute 12 does not pretationof extend, either in words or intent and meaning, to give liberty to any the Act ’ person to practise or exercise for gain or profit ; it is evident from the preamble, and also the statute, that it was directed principally against surgeons who were covetous, &c. And therefore the statute has limited who shall practise, and for what diseases ; and the parties licensed are such persons as shall be good honest people, as old women, and such as are inclined to give their neighbours physic through charity and piety, and not those who expect gain from it, as empirics, who do to be a copy of the Medical Register pursuant to 21 & 22 Viet. c. 90, and professing to be “ published and sold at the Office of the General Council of Medical Education and Registration ” is admissible under s. 27 : Pedgrift v. Chevallier, 8 C. B. N. S. 240. Stochwell v. Ryder, (1907) 4 C. L. R. 469 (Australian). l De la Rosa v. Prieto, 16 C. B. N. S. 578 ; Leman v. Houscley, L. R. 10 Q. B. 66 ; Howarthv. Brearley, 19 Q. B. D. 303. 2 W right v. Greenroyd, 1 B. & S. 758. 3 Sec. 36. 4 Sec. 37. 5 Secs. 40-42. Ellis v. Kelly, 6 H. & N. 222 ; Andrews v. Sly rap, 26 L. T. (N. S.) 704, both considered in Hunter v. Clare, [1899] 1 Q. B. 635. 6 49 & 50 Viet. c. 48. A.-G. v. Apothecaries' Hall, 21 L. R. Ir. 253, deals with tho Irish Medical Schools. 7 Post, 1200. s Ante, 764. 9 Veitch v. Russell, 3 Q. B. 928 ; Chorley v. Bolcot, 4 T. R. 317. Cp. Gibbon v. Budd, 2 H. & C. 92, as to presumption. This, however, does not extend to surgeons ; Lipscombe v. Holmes, 2 Camp. 441 ; Baxter v. Gray, 4 Scott N. R. 374 ; Simpson v. Ralfe, 4 Tyr. (Ex.) 325 ; Richmond v. Coles, 1 Dowl. Prae. Cas. (N. S.) 560. Physicians can sue in America: see the somewhat declamatory judgment in Judah v.M’Namee, 3 Blackf. (Ind. ) 269. In Leighton v. Sargent, 27 N. H. 460, it is laid down that a medical man may bind himself to be responsible for results, to /.e., 3 Hen. VIII. c. 11. ii Litt. (C. P.), 349. This case was twice previously argued, and is reported by Littleton, 168-173, 212-216, and 246-252. The translation of the passage from the judgment in the text is from Willcock, Laws relating to the Medical Profession, Appendix, cx. l 2 34 & 35 Hen. VIII. c. 8. NEGLIGENCE IN LAW. Gratuitous practitioners excepted from tiie operation of the statutes. Distinction between Acts void and Acts illegal. Distinction between a practitioner not qualified under the Registration Acts and an irregular practitioner under the Apothecaries Act, 1815. Criminal proceedings. 1 154 [book VI. nothing in piety and charity ; so that this statute excludes all who take any money or gain.” 1 Gratuitous practitioners are thus specifically excepted out of the operation of the statutes. Even under the statutes the only right of action is for the penalties prescribed by them. The unqualified practitioner is not able to recover his charges, 2 and is in no case able to set up a contract in evasion of the Acts. 3 Here a distinction must be indicated between acts void between the parties for purposes of suit and acts illegal in themselves. This is pointed out in an American case, 4 holding that though a physician is precluded from recovering for his services because he is unregistered, yet in an action for personal damage sustained by him he may recover for being rendered unable to continue his practice. If his practice were per se unlawful, he clearly could not recover in respect of it ; and the ground of his being able to recover manifestly is that since his patients pay him voluntarily for his services, the amount of these voluntary payments becomes the measure of his gain from his practice and evidence of what his compensation should be. Once more, though a surgeon not qualified under the Registration Acts may not be able to sue for his fees, it does not follow that he stands in the same position as an irregular practitioner under the Apothecaries Act, 1815, on a criminal prosecution for negligence. In the former case — if the Act of Henry VIII. is to be considered inoperative — his act, though void for all purposes of obtaining remuneration or benefit, is not illegal. Consequently when he is proved to have practised, and evil results to have followed from his practice, the conclusion is not that he is liable without other evidence of negligence ; for his act is not unlawful, and, though unregistered, he may be competent. In the case of practising under the Apothecaries Act, the action of practising is unlawful, and therefore the consequences are unlawful ; for the law in effect says his act, however done, is incompetent, so that no further evidence is legally necessary to put the defendant to proof to exculpate himself, and, failing that, to entitle the Crown to judgment. The practical bearing of this view is less serious when it is borne in 1 Cp. the same case before the King’s Bench on writ of error, Butler v. President of College of Physicians, Cro. Car. 250, where the judgment of the Common Pleas was affirmed; “admitting the 34 Hen. VIII. c. 8, be in force, yet they all resolved the defendant’s plea was naught, and not warranted by the statute ; for he pleads that ‘ he applied and ministered medicines, plaisters, drinks, vlceribus, rnorbis, et maladiis, calculo, strangurio, febribus, et uliis in statuto rnenlionutis ’ ; so he leaves out the prin- cipal word in the statute, viz., ‘ externis ’ ; and doth not refer and show, that he ministered potions for the ‘ stone, strangullion, or ague,’ as the statute appoints to these three diseases oidy, and to no other. And by his plea his potions may be ministered to any other sickness ; wherefore they all held his plea was naught.” There is a well-known passage of Cicero discriminating morbus, disease, cegrotatio, illness, and vitium, defect, as follows : Morburn appellant loliu's corporis corruptionem : cegrotationem, morburn cum irnbecillitate ; vitium, cum partes corporis inter sc dissident ; ex quo pravitas membrorum, distortio, deformitas. 1 tuque ilia duo morbus et cegrotatio, ex totius valetudinis corporis conquassalione et perturbatione gignuntur ; vitium autem Integra valetudine, ipsum ex se cernilur. (Cic. Tuscul. Qsest. lib. iv. e. 13). Modes- tinus’s distinction is neater : Morburn esse temporalcm corporis imbecillitatcm ; vitium rcro perpetuum corporis impedimentum : D. 50, 10, 101, § 2. 2 Bleed v. Henley, 1 C. & P. 574; Allison v. Hayden, 4 Bing. 010. Cp. Qremaire v. Lc. Clerc Bois Valon, 2 Camp. 144, with what was said in Cope v. Rowlands, 2 M. & W. 159. 3 Davies v. Makuna, 29 Ch. D. 590. 4 McNamara v. Village of Clintonville , 51 Am. R. 722 ; Holmes v. II aide, 43 Am, R, 5 07. MEDICAL MEN. 1155 CHAP. II.] mind that some considerable negligence would be necessary to incur criminal consequences ; and that, failing further evidence, the pro- secution would drop, not because there was no evidence of negligence, but because there was not sufficient evidence to establish criminal negligence . 1 “ To justify such a charge, it is not sufficient to show mere want of care and caution ; there must be gross negligence and want of that degree of skill which every one, who undertakes the exercise of any particular art or profession, is bound to bring in each particular case.” 2 “ An injudicious and indiscreet administering of medicine will not make a man guilty of manslaughter. There must at least be gross negligence on his part.” 3 The same distinction prevails in civil proceedings. Where the civil character of the act is neutral in law — that is, not prohibited — in- proceedings, jurious consequences flowing from it will not, without some evidence of negligence, import an actionable wrong ; where the act is unlawful, the injurious result will be in itself actionable without positive evidence of negligence. In civil proceedings the consent of the plaintiff to employ a prohibited practitioner makes a further difference ; for the general principle is undoubted, that courts of justice will not assist a person who has participated in a transaction forbidden by statute to assert rights growing out of it, or to relieve himself of the consequences of his own illegal act. Whether, then, the form of the action is in contract or in tort, the test in each case is whether, when all the facts are disclosed, the action appears to be founded in a violation of law in which the plaintiff has taken part . 4 The plaintiff’s act is something like contributory negligence, without which the injury could not happen ; but this, though a defence in an action, will not avail against the Crown. Where the surgeon is registered and injury results from his treat- Presumption ment, the presumption is that he is competent and the treatment . correct till the contrary is shown . 5 competency The negligence of medical and surgical practitioners is usually treated under the various heads of malpractice . 6 7 Malpractice the Malpractice. Court resolved, in Dr. GroenveWs case? to be “ a great misdemeanour and offence at common law (whether it be for curiosity and experiment 1 For a definition of Criminal Negligence, see ante, 7. 2 Per Tindal, C. J., Edsall v. Russell, 4 Man. & G. 1099. 3 Per Maule, J., l.c. 1103. 4 Hall v. Corcoran, 107 Mass. 251 ; Cranson v. Goss, 107 Mass. 439, both “ Lord’s day ” cases. s Regina v. Spencer, 10 Cox C. C. 525. 6 Willcock, Laws relating to the Medical Profession, 86 et seqq. Imperitia quoque culpas adnumeratur, veluti si medicus ideo servum tuum occiderit, quod eum male sccueril aut perperam ei medicamentum dederit : Inst. 4, 3, 7. See D. 9, 2, 7, § 8. The cases under the Roman law of medicine given by mistake and through ignorance, and in what circumstances they are within the provisions of the Lex Aquilia, are treated in Dissertationes Juridic® Thomasii, Diss. xi. c. 5, De Jure Circa Somnum et Somnia in Delictis, §§ 4, 5, & 6, 768-770. In Long, Decline of the Roman Republic, vol. ii. 19, is the following : “ I find nothing about surgeons in the Roman army, and yet broken limbs and ugly wounds would require more skill and attention than a soldier could have from his comrades. The Fabri, who were able to use their hands, might give some help ; but it is hardly possible that there were no surgeons or physicians in a Roman army, when they were employed to look after the health and wounds of gladiators. C®sar on one occasion speaks of delaying some days on a battle- field to look after the wounded, but he does not say how this was done.” See for the arrangements made under the Empire, Smith, Dictionary of Greek and Roman Antiquities (3rd ed.), art. “ Exercitus,” “ Medici.” For the general history of Greek and Roman medicine, see the articles “ Medicina ” and “ Medicus ” in the same work. See also the note in Rawlinson, Herodotus, bk. ii. 84. 7 1 Ld. Raym. 214, 115(5 NEGLIGENCE IN LAW. Principle. No distinc- tion between regular and irregular practitioners as to mal- practice. Standard of care and competency perpetually variable. Various schools of theory and practice. [BOOK VI. or by neglect), because it breaks the trust which the party has placed in the physician, tending directly to his destruction.” Into malpractice generally there is no call to enter here beyond the consideration of the relations constituted by malpractice caused through ignorance or remissness ; for that large aspect which deals with malpractice “ for curiosity and experiment ” is wholly beyond the scope of the present book. The principle of most extensive scope, prevailing through all classes of skilled labour, and not confined to medical practitioners, is that he who undertakes the public practice of any profession undertakes that he has the ordinary skill and knowledge necessary to perform his duty towards those resorting to him in that character . 1 Where malpractice is found to have been used, whether the practitioner is qualified or unqualified, ignorant or negligent, matters nothing. The legal wrong is the incompetent or negligent treatment, not treatment by one wanting a qualification ; and thus it is that a defence that the patient’s treatment has been followed by improvement “ as good as is usually obtained in like cases ” is ineffectual where there has been negligence ; for the patient is entitled to the chance of the better results that might have followed proper treatment. From the same principle flows the consequence that whether the service is remunerated or gratuitous, is immaterial . 2 Still the standard of care and competency is perpetually variable. Negligence in one man maty be competent care in another. For instance, a specialist consulted in his specialty would be liable for negligence in respect of treatment which in a junior and ordinary member of the profession would more than pass muster ; and that might be negligence in a doctor of repute in the west of London which would yet come up to the highest warrantable expectations of the patient of the village doctor in remotest Kerry or Sutherlandshire. Where the charge is of negli- gent treatment it is obvious that the question of competency or incompetency is irrelevant. The difficulty of fixing a standard is furthermore increased by the many and conflicting schools of theory and practice. The law can enter into no minute examination of the merits of allopathy or homoeo- pathy or any other system of treatment . 3 To constitute a school of medicine there must be a system of practice in respect of the diagnosis and treatment of disease ; and proficiency in this is required of each practising member of the school . 4 The tests the law applies are — Is the practitioner a qualified man of his school, and so presumably com- petent, or is he unqualified, and presumably incompetent ? If he is incompetent, the law infers that injury following treatment is the result of incompetency, and he must show sufficient grounds to warrant the inference that the injury was not the result of incompetency ; if he is competent — that is, if he is a qualified and registered practitioner — injury subsequent to treatment must be shown, and some evidence also must be given of negligence in treatment before liability can be affixed . 5 1 Scare v. Prentice, 8 East, 348. Ante, 27, 1127 and 1131. 2 Per Heath, J., in Shiells v. BlacJcbume, 1 H. Bl. 161. 3 This is definitely held in an American ease, where it was determined that the terms “ physicians and surgeons ” embrace homceopathists : Raynor v. State, 62 Wis. 289, United States, Digest, 1885, 521. See Patten v. Wiggen, 51 Me. 594. 4 Nelson v. Harrington, 7 Am. St. Re]). 900. 5 Reg. v. Spencer, 10 Cox, C. C. 525; Willcock, Law relating to the Medica Profession, 90. MEDICAL MEN. 1157 CHAP. II.] Evidence of negligence is not suggested by an arbitrary standard. Evidence of Given tlie presumptive competency of the practitioner, the standard of professional skill he is required to reach is that of the ordinary and average practitioner in the branch, or of the school, to which he pro- fesses himself to belong ; 1 for a person professing to follow one system cannot be expected to practise any other. Where the amount of skill displayed in treatment is in dispute, the evidence of an experienced practitioner of the school professed by the person charged is admissible to show that the treatment was careful and skilful according to the standard of practitioners professing the tenets of the school . 2 But when the person who takes the responsibility of giving medical advice belongs to a sect or body having no fixed scientific principles or rules for the treatment of disease, he is held to the duty of treatment up to tbe ordinary skill and knowledge of physicians of average skill and position in places similarly circumstanced . 3 A person holding himself out as qualified and not being so, provided that the patient is ignorant of the hollowness of the pretence, will be required to show an equal amount of skill and care to one possessed of the qualifications he pretends to . 4 If the patient is aware of the lack of qualification, then only the care, skill and diligence that the circumstances admit of being attributable to the attendant are to be exacted ; 5 he is liable for the lack of diligence and skill belonging to an ordinary unprofessional person of common sense . 6 In illustration of this may be noted a case which Sir William Jones Case cited by cites 7 from the Mahomedan law : “ A man who had a disorder in his j 1 0 r n ^ llliam eyes, called on a farrier for a remedy ; and he applied to them a medicine commonly used for his patients ; the man lost his sight, and brought an action for damages ; but the judge said : ‘ No action lies, for, if the complainant had not himself been an ass, he would never have employed a farrier. ’ ” Or, as the law was stated by an English judge : 8 “If the patient applies to a man of a different employment or occupation for his gratuitous assistance, who either does not exert all his skill, or administers improper remedies to the best of his ability, such person is not liable” in damages. If, however, he applies to a surgeon and he treats him improperly, he is liable to an action, even though he undertook gratis to attend to the patient, because his situation implies skill in surgery . 9 The duty of a specialist is referable to a higher test than that of an Specialist] ordinary practitioner. Special profession involves higher duty ; and standard, the standard to be attained is that of the specialist amongst medical men, and not that of the general practitioner, and this includes proper instructions to the nurses and to the patient for their conduct in the intervals of the doctor’s attendance . 10 1 Corsi v. Maretzek, 4 E. D. Smith (N. Y.), 1, Brightly, New York, Digest, 2899 — ease of a homaeopathist ; Wharton, Negligence, 733. 2 Bowman v. Woods, 1 G. Greene (Iowa), 441 — case of a “botanic physician.” 3 Nelson v. Harrington, 7 Am. St. Rep. 900, where a “clairvoyant physician” was held obliged to exercise “ the ordinary skill and knowledge of a physician in good standing practising in the vicinity,” and not of a “ clairvoyant physician ” merely. 4 Ruddock v. Lowe, 4 F. & F. 519, 525. 5 Higgins v. McCabe, 126 Mass. 13 — case of a midwife undertaking cure of a dis- ease of the eyes. 6 Wharton, Negligence, § 29. Ante, 28. 2 Bailm. 100. 8 Heath, J., in Shiells v. Blackburne, 1 H. Bl. 161. 9 Seare v. Prentice, 8 East, 348. In America it has been held that he who, knowing a medical man is of intemperate habits, yet continues to employ him, cannot set up such habits by way of defence to his bill : McKleroy v. Sewell, 73 Ga. 657, United States, Digest, 1886, at 506. to Feeney v. S'paidding, 89 Me. Ill — an eye case. NEGLIGENCE IN LAW. I 158 [book VI. X-rays, The doctrine that treatment is to be tested by the principles of the BkmKsusp phy sician ’ s school does not apply where the question is of the use of apparatus for ascertaining a diseased condition, as where an X-ray apparatus is used. This being available for all schools of medicine and surgery, and for many purposes besides, the test of its efficient use is the ordinary standard of skill maintained by its competent manipulators . 1 In the case of If the practitioner is a quack, any mischance attending his minis- a quack. tration will raise a presumption of gross negligence ; which Willes, J ., 2 describes as consisting “ in rashness, where a person was not sufficiently skilled in dealing with dangerous medicines which should be carefully used, of the properties of which he was ignorant, or how to administer a proper dose.” “ A person,” the learned judge further says, “ who, with ignorant rashness and without skill in his profession, used such a dangerous medicine acted with gross negligence.” 3 Where there Where a divergence from the rules of the system of the majority from the 6 * 106 exis ^ s ’ J UI 7 have to determine whether the practitioner is a scientific prevalent inquirer, possessed of the principles of a system, and practising them system the (for knowledge without practice is unavailing), or a mere ignorant jury have to pretender ; 4 of course subject to the instruction of the judge on the lines indicated above. In the case of an Act of Parliament making the practice of any person unlawful, the onus would be on him to show the absence of connection between his unlawful practice and the injury following. Where the practice is not unlawful, whatever the disabilities to sue may be, it is conceived that if sued an unqualified practitioner stands in no worse position than a qualified man reasonably competent. To allow want of qualification to operate to diminish the liability for negligence would be to give an advantage to unqualified practitioners, while to raise the standard in such a case is manifestly unjust. Anciently this distinction was sought to be made . 6 As to its validity, Sir Matthew Hale, says : 6 “ If a physician gives a person a potion without any intent of doing him any bodily hurt, but with an intent to cure or prevent a disease, and contrary to the expectation of the physician it kills him, this is no homicide, and the like of a quack or no quack. Injury- following unlawful practice. Sir Matthew Hale’s opinion. 1 Henslin v. Wheaton, 103 Am. St. R. 504; Gillette v. Tuclter, 93 Am. St. R. G01. 2 Regina v. Markuss, 4 F. & F. 358. 3 The distinction has been thus stated: “ If a person assume to act as a physician, however ignorant of medical science, and prescribe with an honest intention of curing the patient, but through ignorance of the quality of the medicine prescribed, or the nature of the disease, or both, the patient die in consequence of the treatment, contrary to the expectation of the person prescribing, he is not guilty of murder or manslaughter. But if the party prescribing have so much knowledge of the fatal tendency of the pre- scription that it may be reasonably presumed that he administered the medicine from an obstinate wilful rashness, and not with an honest intention and expectation of effecting a cure, he is guilty of manslaughter at least, though lie might not have intended any bodily harm”: Rice v. State, 8 Mo. 501, cited in State v. Schulz, 39 Am. R. 187. Bishop, Criminal Law (8th ed.), § 0G4, also § 314, n. 4 Cp. Reg v. Wagstaffe, 10 Cox C. C. 530. See 31 & 32 Viet. c. 122, s. 37, repealed by the Prevention of Cruelty to and Protection of Children Act, 1889 (52 & 53 Viet, c. 44). The Queen v. Downes, 1 Q. B. D. 25 ; The Queen v. Morby, 8 Q. B. I). 571 ; The Queen v. Senior, [1899] 1 Q. B. 283. See the Prevention of Cruelty to Children Act, 1894 (57 & 58 Viet. c. 41), amended by the Prevention of Cruelty to Children Act, 1904 (4 Edw. VII. c. 15). s 4 Co. Inst. 251, quoting Britton, “ that if one that is not of the mysterie of a physitian or chirurgion, take upon him the cure of a man and lie dieth of (he potion or medicine, this is (saith he) covert felony.” See also 1 East, Pleas of the Crown, 2G4. Sect. iv. in this work, 200-271, is on “ Homicide from Impropriety, Negligence, or Accident in the Prosecution of an Act lawful in itself, or intended by way of Sport or Recreation.” Ante, 109. 6 Pleas of the Crown, vol. i. 429. MEDICAL MEN. 1159 CHAP. II.] chirurgeon, 3 E. 3, Coron. 163. And I hold their opinion to be erroneous, that think, if he be no licensed chirurgeon or physician that occasioneth this mischance, that then it is felony, for physic and salves were before licensed physicians and chirurgeons ; and therefore, if they be not licensed according to the statute of 3 H. 8, cap. 11, or 14 H. 8, cap. 5, they are subject to the penalties in the statutes, but God forbid that any mischance of this kind should make any person not licensed guilty of murder or manslaughter.” This view is accepted as correct by Accepted as Pollock, C.B., in Regina v. Crick. 1 “ It is no crime 2 for any one to by administer medicine, but it is a crime to administer it so rashly and c.B.,in’ carelessly as to produce death ; and in this respect there is no difference Regina v. between the most regular practitioner and the greatest quack.” 3 ( rick • A Scotch case sets out how a medical practitioner undertook the charge of a patient’s injured finger and having prescribed certain treatment went away for a holiday without giving his assistant requisite instructions ; the assistant continued the prescription till his return with the result that the patient lost the finger ; the practitioner was held responsible.' 1 Each practitioner, whether qualified or unqualified, is liable for Diligence of culpa levis — the want of expert diligence. 5 The one is an expert, the an ex P ert - other has put himself in the position of an expert. 6 The law therefore provides that where criminal consequences are Mere unlaw- concerned, the mere want of qualification of the unauthorised practi- ^.^thorised tioner will not warrant his being affected with criminal consequences ; 7 practitioner’s though in the case of his professing to act as a qualified practitioner, act would not and thereby inducing a patient to submit to his treatment, not affec !' W1 . th knowing of his legal incapacity, in the event of injury following, consequence, proof of his lack of legal qualification is sufficient to cast on him the onus of showing that the injury did not result from the treatment. The opinion of Bayley, J., in Rex v. Nancy Simpson 8 seems inconsistent Opinion of with this view. He regards the undertaking to administer medicine ‘ which may have a dangerous effect,” and “ where medical assistance Simpson ^ may be obtained,” when the administration occasions death, as in itself evidence of negligence so gross as to found a criminal liability. 9 This principle of liability is, notwithstanding, too wide ; since the adminis- tration, though followed by death, may be perfectly consistent with the strictest prudence and the rules of art; and on proof of this, though pro- fessional aid could have been obtained, and though a dangerous effect was produced, the presumption of negligence is effectually rebutted. 1 (1859), 1 F. & F. 519. The same is the law in America, Commonwealth v. Thompson, 6 Mass. 1 34. 2 As to Criminal Negligence, see ante, 7 and 1155. There is a full discussion of what is required to constitute criminal negligence in a medical man in Commonwealth v. Pierce, 138 Mass. 165 — case of reckless application of kerosene oil to a patient’s body; State v. Ilardister, 42 Am. R. 5. 3 Cp. Rex v. Williamson, 3 C. & P. 035 ; Regina v. Chamberlain, 10 Cox, C. C. 480, before Blackburn, J., where the prisoner was acquitted ; and Regina v. Crook, 1 F. & F. 521 ; Rex v. Senior, 1 Moo. C. C. 346, where there were convictions. 4 Farquhar v. Murray, 38 Sc. L. R. 642. 5 Ante, 28. e Jones v. Fay, 4 F. & F. 525. 7 Cp. Rex v. Van Butchell, 3 C. & P. 629 ; and per Park, J., in Rex v. St. John Long, 4 C. & P. 398, 405. 8 4 C. & P. 407 n. s Bolland, B., Rex v. Spiller, 5 C. & P. 336, says : “ If any person, whether he be a regular or licensed medical man or not, professes to deal with the life or health of His Majesty’s subjects, he is bound to have competent skill to perform the task that he holds himself out to perform, and he is bound to treat his patients with care, attention and assiduity.” As to the latter part it is clearly so. But if a man without competent skill treat a patient, he is neither liable to indictment nor action, unless he docs him * injury. And if he injures him, the liability is not for being incompetent, but for being negligent, or for making a false profession. VOL. II. 2» 1 160 NEGLIGENCE IN LAW. Ellect of irregular treatment where proper assistance is at hand. Unqualified assistant of licensed prac- titioner. Where treat- ment involves danger, the patient must have a com- munication made, and signify assent to its application. [BOOK VI. That qualified assistance is available is undoubtedly a fact of great weight in the determination of the character of an irregular practi- tioner’s act ; though it does not seem consistent with principle to regard it as an infallible test of negligence, as appears to be done by Bayley, J., in the case under consideration, and by Lord Lyndhurst, C.B., in Rex v. Webb ; 1 it is rather a circumstance from which gross negligence will most usually be inferred than in itself an actual in- dication of negligence. Thus, the fact of the patient dying under such treatment will doubtless raise a presumption of negligence even criminal ; but the presumption is rebuttable. 1 2 * The case frequently arises of a licensed practitioner having an un- qualified assistant. The want of qualification in the one is not eked out by the possession of it by the other. In some cases the principal is even affected with a criminal liability where, through his negligence, his assistant’s incompetency works harm. This is pointed out by Hawkins, J., in Pharmaceutical Society v. Wheel don* “ We need hardly say that, if mischief arose by reason of a master negligently leaving an unqualified person in charge of his poisons, no punishment of the assistant under sec. 15 would exonerate his master from his civil liability to any person injured, nor, if death ensued through such negligence (if a jury found it to be of a criminally culpable character), would he be exonerated from a liability to a charge of manslaughter.” It is, moreover, clear that treatment involving probabilities of danger cannot be applied to a patient, whet her by a licensed or unlicensed practitioner, without some communication to the patient, and some expression or signification of consent by him. The duty in this respect was treated so long ago as in Slater v. Baker and Stapleton . 4 Plaintiff employed the defendants, one of whom was a surgeon, the other an apothecary, to cure his leg, which had been broken and set, and the callus of the fracture formed. The defendants disunited the callus, and Baker fixed on the plaintiff’s leg a heavy steel instrument with teeth to stretch or lengthen the leg. The evidence showed it to be improper to disunite the callus without consent, and heavy damages were given. The Court refused a motion to set aside the verdict, saying : 5 “It was ignorance and unskilfulness in that very particular to do, contrary to 1 1 Moo. & Bob. 405. 2 Bishop, Criminal Law (0th ed.), § 664. 2 24 Q. B. D. 000. This is a case under the Pharmacy Act, 1808 (31 & 32 Viet, c. 121), s. 15. 4 (1707) 2 Wils. (C. P.) 350. As to what is to be looked for from a surgeon employed to set a leg, see McGandless v. McWha, 22 Pa. St. 207, where Woodward, J., says : “ The implied contract of a physician or surgeon is not to cure — to restore a fractured limb to its natural perfectness — but to treat the case with diligence and skill. The fracture may be so complicated that no skill vouchsafed to man can restore original straightness and length ; or the patient may, by wilful disregard of the surgeon’s directions, impair the effect of the best-contrived measures.” “ The principle is contained in the pithy saying of Fitzhcrbert that ‘ it is the duty of every artificer to exercise his art rightly, and truly as he ought.’ This is peculiarly the duty of professional practitioners, to whom the highest interests of man are often necessarily intrusted. 7’ he law has no allowance for quackery. It demands qualification in the profession practised — not extraordinary skill such as belongs only to few men of rare genius and endowments, but that degree which ordinarily characterises the profession. And in judging of this degree of skill in a given ease, regard is to be had to the advanced state of the profession at the time.” “ The physician or surgeon who assumes to exercise the healing art is bound to be up to the improvements of the day. The standard of ordinary skill is on the advance ; and he who would not be found wanting, must apply himself with all diligence to the most accredited sources of knowledge.” The judge at the trial in charging the jury made some very curious observations, well worth referring to. See also Almond v. Nugent, (1872) 1 1 Ain. R. 147. b (1707) 2 Wils. (C. P.) 302. MEDICAL MEN. 1101 CHAP. II.] the rule of the profession, what no surgeon ought to have done ; and, indeed, it is reasonable that a patient should be told what is about to be done to him, that he may take courage and put himself in such a situation as to enable him to undergo the operation.” Yet to this candour there must be a limit ; and the duty to forewarn the patient is discharged by a general intimation of likelihood of pain or danger arising in a particular direction, without a preliminary scientific dissertation on the case and its probabilities and peculiarities . 1 A surgeon is justified in performing an operation upon a married Operation on woman with her consent if he deems it necessary for the prolongation a married of life, even though the husband were to refuse his, and the husband witllout the has no right to withhold from his wife such medical assistance as her consent of case requires . 2 If the wife voluntarily submits to the operation, her her husband, consent is presumed, unless she is the victim of a false and fraudulent misrepresentation ; and this is a fact which must be affirmatively established ; so also it is presumed in favour of the surgeon that he has exercised that due and ordinary care which is a duty imposed by law, and that the operation was carefully and skilfully performed . 3 When adequate information has been given of the proposed treat- No greater ment, and an indication of its danger or painfulness, it is not consistent ol with the authorities to say that in a civil action there are any other licensed consequences attending the action of the unlicensed than of the than the licensed practitioner . 4 The law being thus, much more is a practitioner licensed, free from liability when the injurious act is an act collateral to medical Nohahihty ^ or surgical treatment, done by some third person . 5 ac \ ;L Vhi'rcl Where a specific act of malpractice is charged, evidence that the person, defendant is of skill in his profession is not admissible. The very Specific act of nature of the charge involves either that he is of skill generally and malpractice, did not exercise it, or that he represented himself to have skill which he did not in fact possess ; the inquiry is not what he was able to do, but what he actually did. There is a difference where the quality of the act is in dispute. Is the specific thing charged malpractice or not ? Then evidence of skill is admissible. If the thing done is admittedly malpractice, then whether the practitioner has the skill, which, by hypothesis, he did not use is irrelevant . 6 Primd facie to sew up a sponge or an instrument in a patient after an operation is negli- gence. Very great care and method is to be observed in accounting for all appliances used, and this in proportion to the easiness with which they may escape observation ; but even here the fact that some needle or portion of an instrument has been left in a wound is not con- clusive, but the conclusion from the fact must be determined by a jury on a view of the whole circumstances. The general rule of skill required from a medical or surgical practi- General rule tioner is formulated by Erie, C.J ., 7 that a medical man is certainly not answerable merely because some other practitioner might possibly considered by have shown greater skill and knowledge ; he is bound to have a degree Erie, C.J. of skill and knowledge which is undefinable, but which must be a competent degree in the opinion of a jury. It is not enough that 1 See McClallen v. Adams , 36 Mass. 333, where husband’s authority to operate on wife is presumed. In the absence of evidence of consent the onus is on the plaintiff. 2 Harris v. Lee, 1 P. Wms. 482. 3 State v. Housekeeper, 70 Md. 162, 14 Am. St. R. 340. * Reg. v. Whitehead, 3 C. & K. 202 ; Reg. v. Spencer, 10 Cox, C. C. 625 ; Reg. v. Bull, 2 F. & F. 201. 5 Perionowsky v. Freeman, 4 F. & F. 977. *> Holtzman v. Hoy, 59 Am. R. 390, and note. ? Rich v. Picrpont, 3 F. & F. 35. Falconbridge C.J.’s, state- ment of the relativity of the rule of skill required. Novel treatment. Treatment not to be judged by reference to the particular constitution. Hancke v. Hooper. 1162 NEGLIGENCE IN LAW. [book vi. medical men of far greater experience or ability might have used a greater degree of skill, nor that the person charged himself might have used more care. The question is whether there has been “ a want of competent care or competent skill ” to such an extent as to lead to the bad result ; or, as it was stated in an American case, 1 whether the amount of care and skill bestowed is up to “ the average of the reasonable skill and diligence ordinarily exercised by the pro- fession as a whole, not that exercised by the thoroughly educated, nor yet that exercised by the moderately educated, nor merely of the well- educated, but the average of the thorough, the well, and the moderate — all, in education, skill, diligence, &c. ” ; and to this must be added — with allowance for particular circumstances of position, whether urban or rural, near a centre of population or remote. , This point is brought out by Falconbridge, C. J. : 2 “ It has been held in some American cases that the locality in which a medical man practises is to be taken into account and that a man practising in a small village or rural district is not to be expected to exercise the high degree of skill of one having the opportunities afforded by a large city ; and that he is bound to exercise the average degree of skill possessed bv the profession in such localities generally. I should hesitate to lay down the law in that way ; all the men practising in a given locality might be equally ignorant and behind the times, and regard must be had to the present advanced state of the profession and to the easy means of communication with, and access to, the large centres of edu- cation and science.” The professional man most“ behind the times ” must at some earlier portion of his career have qualified in a profession, admission to which is dependent on the attainment of a minimum standard of proficiency. At no stage in a medical man’s career can reference to this standard be dispensed with wholly ; not even the con- gregation of a knot of professional dunces in a district can attenuate their responsibility for ignorance greatly below the minimum standard of knowledge requisite to gain entry to the profession. It is against public interest as well as against sound morality that a man should be allowed to take advantage of his own ignorance, where his duty is to be well informed. 3 The case of a departure from the recognised method of treat- ment presents difficulty. The fact that the case has been treated in a novel way in itself raises no presumption of negligence. Know- ledge of science is progressive and daily advancing. The facts in each case must be for the jury. The new treatment proposed, if the risks are augmented by its adoption, should be generally indicated to the patient, even though the prospect of a cure is largely increased by its adoption ; while the old method was only palliative, a mere un- grounded experiment must not be resorted to, but to put into operation lor the first time a carefully thought out method is not malpractice. The want of care and skill must be in the treatment itself, and not in the treatment with reference to the particular constitution or circumstances of the patient, unless the treatment presupposes that knowledge. Thus, in Hancke v. Hooper* the plaintiff, a whitesmith, 1 Smothers v. Hanks , 11 Am. R. 141. 2 Toun v. Archer , 27 Canadian Practitioner’s Review, 314, 318. 3 Bulklcy v. Wilford, 2 Cl. & F. 102. Post, 1170. Cp. Stevenson v. Rowand, 2 l)ovv & Cl. 104. 4 7 C. & P. 81. Van Merc v. Farewell, 12 Out. R. 285; McQuay v. Eastwood, 12 Out. R. 402. MEDICAL MEN. 1163 CHAP. II.] walked into the shop of the defendant, a surgeon, and asked to be bled, saying that he had found relief from it before. He was bled by the apprentice, and experienced considerable evil effects, for which he sued. Tindal, C.J., directed the jury 1 that “ if, from some accident or some variation in the frame of a particular individual, an injury happens, it is not a fault in the medical man. It does not appear that the plaintiff consulted the defendant as to the propriety of bleeding him ; he took that upon himself, and only required the manual operation to be per- formed. The plaintiff must show that the injury was attributable to want of skill ; you are not to infer it. If there were no indications in the plaintiff’s appearance that bleeding would be improper, the defendant would not be liable for the bleeding not effecting the same result as at other times, because it might depend on the constitution of the plaintiff.” Improper treatment is also a ground of defence to an action for Improper fees for professional attendance. As Lord Kenyon said : 2 “ If a man treatment® is sent for to extract a thorn which might be pulled out with a pair 3 e f ence , of nippers, and through his misconduct it becomes necessary to ampu- tate the limb ; shall it be said, that he may come into a court of justice to recover fees for the cure of that wound which he himself has caused ? ” 3 If the patient has aggravated his injuries 4 by his own conduct to Aggravation an extent that will account for the mischief complained of, he cannot °f injury by recover damages from the medical man in respect of treatment differing ownact. S from the ordinary rule ; the principles ruling where there is contributory negligence apply. If, however, the injury resulting from the patient’s want of care can be separated from the effects of the doctor’s incom- petence or neglect, there is nothing to prevent recovery for injury thus isolated . 5 A medical man does not undertake for the infallibility of his treat- Want of ment ; and therefore he is only to be held to undertake to perform not what can be ordinarily done in similar circumstances ; thus, if a efficiency, registered practitioner sues for his fees, and is met with the defence that his treatment was ineffectual, this is no defence to the claim . 6 Neither is it an answer that his treatment was mistaken ; unless, also, it is shown to have been negligently or ignorantly so. If the medical man has employed the ordinary degree of skill current in his profession, he is entitled to his remuneration, though his treatment has failed of its effect . 7 A mistake in an opinion given when asked for, and after examination does not indicate recklessness ; and for error in opinion a medical man is not liable . 8 To enable a person injured by the malpractice of a medical or Privity of surgical practitioner to recover damages, it is not necessary that there contract not should be privity of contract. This is pointed out by Harrow, B., in entftleTt ? t0 Pippin v. Sheppard , 9 who instances the case “ of surgeons retained by bring action. i 7 C. & P. 84. 2 Kannen v. McMullen, Peake (N. P.), 59. 3 Hasten v. Butter, 7 East, 479. Since the Judicature Acts the defendant can counterclaim for the loss of his limb. 4 Ante, 101. 5 Hibbard v. Thompson, 109 Mass. 280. 6 See Ely v. W illiam (N. J. ), reported as a note to lloltzman v. Hoy , 59 Am. R. 392. 7 Hupe v. Phelps, 2 Stark (N. P.), 480 ; Ely v. W ilbur, 60 Am. R. 668. A different view seems to have been taken in Jonas v. King, 81 Ala. 285, United States Digest, 1887, 518, where it is held that one sued for physician’s services may show that they were of no value, and that the medicine prescribed was worthless. Cp. a lunacy ease, Pennell v. Cummings, 75 Me. 163. 8 Urquhart v. Grigor, 3 Macph. 283. 9 1 1 Price (Ex.), 400. 1164 NEGLIGENCE IN LAW. Father of family held liable for medical attendance given in his absence. In absence of contract, action depends on duty. Physician not liable for mistake in druggist in making up a prescription. Stratton v. Holmes. [BOOK VI. any of the public establishments,” 1 for whose negligence the patients would be precluded from recovering damages if a retainer were neces- sary, and the action were founded otherwise than upon tort ; “ for it could hardly be expected that the governors of an infirmary should bring an action against the surgeon employed by them to attend the child of poor parents who may have suffered from their negligence and inattention.” 2 The surgeon or medical man who undertakes the treatment of any patient (unless exceptionally) makes a representation of his possession of ordinary professional capacity and becomes bound to the exercise of ordinary professional care. If, then, by lack of capacity or care the patient is injured, he has an action against the doctor for the tort. The question of payment for the services does not enter into the consideration of the right of action ; neither is the fact of treatment essential . 3 On the other hand, a father residing away from his family has been held liable for medical attendance where he did not knGw the surgeon had been called in, and though the accident that was treated was caused by the negligence of a servant . 4 If a master calls in his own medical man to attend his servant he cannot afterwards deduct the charge from the servant’s wages ; but he is not bound to provide a menial servant with medical attendance or medicine . 5 Lord Kenyon’s “ humanity ” had led him to assert the master’s liability , 6 and Lord Eldon lent the opinion some coun- tenance , 7 but in Wennall v. Adney 8 the opinion was overruled, and the law there laid down has since been accepted, viz., that a master is not liable upon an assumpsit to pay for medical attendance on a servant who has met with an accident in his service . 9 Where there is no contract the action depends upon duty ; and where there is no duty the plaintiff cannot recover ; as in Pimm v. Roper 10 where the plaintiff sought to recover against the doctor of a railway company who examined the plaintiff on their behalf, and advised the plaintiff that his injuries were so slight that he should take compensation ; the plaintiff accepted compensation, but afterwards, finding his injuries proving more considerable than he was told they were, sued the doctor, but was held not entitled to recover. A Canadian case 11 must here be noted, where a physician wrote a prescription for the plaintiff, and directed it should be charged to himself by the druggist ; which was done. The physician’s fee, including the charge for making up the prescription, was paid by the plaintiff. In mistake, the druggist’s clerk put prussic acid in the mixture, and the plaintiff in consequence suffered injury. The 1 L.c. 409. Post, 10G5. 2 G/cidwell v. Steggall, 5 Bing. N. C. 733 ; Du Bms v. Decker, 130 N. Y. 325, 27 Am. St. R. 529. Who pays is immaterial, the duty when undertaken being to use reasonable care and skill according to the ordinary standard : see per Parke, B., Lovg- rneid v. Holliday, 0 Ex. 707. Ante, 1128. 2 In Harriott v. Plimpton, 166 Mass. 585, a prospective bridegroom recovered against a physician who had examined him at the instigation of his prospective father-in-law to ascertain whether he was affected with venereal disease, and who so negligently made his examination that the marriage engagement was broken off. 4 Cooper v. Phillips, 4 C. & P. 581. 5 Sellen v. Norman, 4 C. & P. 80. e Scarmanv. Castell, 1 Esp. (N. P.)270. " Simmons v. Wilmott, 3 Esp. (N. P. ) 91. 8 3 B. & P. 247. Newby v. Wiltshire, 2 Esp. (N. P. ) 739. ‘J In Watson v. Turner, Bull. N. P. 147, under the Poor Law Acts overseers were held bound to provide medical attendance for the poor in their parishes. io 2 F. & F. 783. * . 11 Strelton v. Holmes, 19 Ont. R. 286. MEDICAL MEN. 1165 CHAP. II.] druggist was held liable, but the physician went free. Between the druggist and the dispenser the relation of master and servant existed, between the druggist and the physician the relation was that of em- ployer and contractor. The druggist, moreover, was a skilled person, and care having been exercised in making a suitable appointment, there was no duty to examine his work incumbent on the physician, 1 who was not bound to supervise his work in his speciality. The rule of liability applicable to a druggist is the same as attaches Ruleappli- generally to persons whose work requires special knowledge or skill, cable to a He is not legally responsible for any unintentional injury resulting' u ' s "' h ' from a lawful act, unless the failure to exercise due and proper care can be imputed to him, 2 and the burden of proving such lack of care, when the act is lawful, is on the plaintiff. The liability of the board of governors or committee of a hospital Liability of or dispensary to any patient treated there for injuries arising from the 8°v e ™‘ n S negligence of the surgeon or medical practitioner whom they have hospital for appointed as their medical officer has been exhaustively discussed in negligence of America. In McDonald v. Massachusetts General Hospital , 3 the sur g eon - Supreme Court of Massachusetts held that where a hospital board had McDonald v. used due care in selecting a properly qualified medical officer, they were not liable for his negligences while acting as their officer. This case General was decided, partially at any rate, on the. authority of Holliday v. Hospital. St. Leonards, Shoreditch, 4 which, after the remarks of Blackburn, J., in Foreman v. Mayor, &c. of Canterbury , 5 must be considered as overruled. In the subsequent case of Glavin v. Rhode Island Hospital , 6 Glavin v. the same point again came up for decision, and the Rhode Island Court, fj^f c J r j and eliminating the doubtful elements in the earlier case, made a searching °' s/ " "" investigation into the principles applicable, where the trustees of a public hospital are sued for unskilful surgical treatment of a patient in the hospital. The reasoning of the Chief Justice is as follows : “ The physicians or surgeons are selected by the corporation or the trustees. But does it follow from this that they are the servants of the corpora- tion ? We think not. If, A, out of charity, employs a physician to attend B, his sick neighbour, the physician does not become A’s servant, and A, if he has been duly careful in selecting him, will not be answerable to B for his malpractice. The reason is that A does not undertake to treat B through the agency of the physician, but only to procure for B the services of the physician. . . . And so there is no such relation between the corporation and the physicians and surgeons who give their services at the hospital. It is true, the corporation has power to dismiss them, but it has this power, not because they are its servants, but because of its control of the hospital where their services are rendered. They would not recognise the right of the corporation while retaining them to direct them in their treatment of patients.” In New Zealand the point has been decided by the Court of Appeal Approved as in Glavin’ s case, and on the authority of the reasoning therein. 7 anci followed J ° by the Court i Cp. Thomas v. Winchester, 6 N. Y. 397 ; and George v. Skivington, L. R. 5 Ex. 1. ° Appeal of ante, 50. 2 Allen v. State Steamship Co., 132 N. Y. 91, 28 Am. St. R. 556. INew Zealand, » (1876) 120 Mass. 432, 21 Am. R. 529. Ante, 328. * 1 1 C. B. N. S. 192.- s L. R. 6 Q. B. 218. o 34 Am. R. 675. 679. ~ District of Auckland Hospital and Charitable Aid Board v. Lovett, 10 N. Z. L. R. 597 (C. A.). Perionowsky v. Freeman, 4 F. & F. 977, held hospital surgeons not liable for ill usage of nurses in carrying out their prescriptions, of which they were personally not cognisant. Evans v. Mayor, Bcotl v. W akem, 3 F. & F. 328. Fletcher v. Fletcher, 1 E. & E. 420, where, on a, plea alleging that the plaintiff conducted himself as if he were insane, Lord Campbell, C.J. says (423) : “ It would be most dangerous to the liberty of the subject if a man could be imprisoned under circumstances such as appear upon this plea. It would place in jeopardy the liberty of many persons of eccentric habits, though in perfect possession of their faculties. There must be actual insanity to justify confinement.” i" Anderdon v. Burrows, 4 C. Ik P. 210. MEDICAL MEN. CHAP. II.] nr, 7 lunatic in order to prevent his doing injury to himself or to others, he would be justified in taking measures to confine him, even though he himself did not visit the alleged lunatic. 1 If, however, the alleged lunatic were not in fact insane, whatever the representations, the action would be undefended, and the nature of the statements made would only go in mitigation of damages. The defects in the common law as to lunacy were sought to be Common Law redressed by 8 & 9 Viet. c. 100, and 16 & 17 Viet. c. 96 ; and it has been ,>y pointed out 2 that, while sec. 99 of the earlier of these Acts protects duly authorised persons acting under certificates and an order for the confinement of a lunatic, no protection is given to the person who makes the order. His liability, therefore, continues as at common law : “ he is not protected unless the person confined be actually insane.” The leading case against a medical man under these early statutes is Hall v. Hall v. Semple . 3 The declaration, as ultimately amended, charged ^ em P le - that the defendant, being a physician, and without reasonable or probable cause, and with intent to cause the plaintiff to be imprisoned and put under bodily restraint, did as a physician sign a certain certifi- cate according to the form prescribed by the Lunacy Acts, whereby it was certified among other things that the plaintiff was of unsound mind. The defendant pleaded “ not guilty ” under 16 & 17 Viet. c. 96. The law applicable was exhaustively stated by Crompton, J., in Summing up his summing up. As originally framed the declaration alleged malice, of Crompton, This the learned judge ruled not to be necessary to give the right of ' ' action. The true ground of action was negligence and want of due care. “I think,” said he, 4 “that if a person assumes the duty of a medical man under this statute and signs a certificate of insanity which is untrue, without making the proper examination or inquiries which the circumstances of the case would require from a medical man using proper care and skill in such matter — if he states that which is untrue, and damage ensues to the party thereby, he is liable to an action.” Turning to the question of the degree of care that must be observed, the learned judge said : 5 “ One can hardly say precisely what that degree of care may be. It could not be said, perhaps, that the medical man is bound to examine every person connected with the party. The matter is for you ” (the jury). “ You are acquainted with the ordinary exigencies of life ; you must judge as men of the world by the light of your own common sense.” “ We may take it, however, as clear, that considerable care ought to be used ; and the question for you is whether the proper degree of care was used, or whether there was that culpable negligence which has been imputed to the defendant. It is not a mere mistake or error in judgment which would amount to such negligence, but you must be satisfied that there was culpable negli- gence.” 6 “ You are not inquiring into an error of judgment, but whether the defendant has been guilty of that culpable negligence which I have explained and described to you ; negligence in not making sufficient inquiries, the examination not having been sufficient in his own judgment. It would be dreadful if a medical man were to suffer merely from an error of judgment. The question is, whether there has been a neglect of that duty, which a person in a case of this 1 The remarks made in Lister v. Perryman, L. R. 4 H. L. 521, may afford indication of what inquiries and statements would justify a medical man in so acting. 2 Fletcher v. Fletcher, 1 E. & E. 424. 3 3 F. & F. 337. * L.c. 354. 8 L.c. 35G. o L.c. 357. nr, 8 NEGLIGENCE IN LAW. [book VI. Lunacy Act, 1 800. Thompson v. Schmidt. Judgment of Lord Esher, M.R. Dr. Wharton’s statement adopted by the Court. kind owes, not to interfere in a matter which touches the liberty of his fellow citizen without taking due care and making a careful examination and inquiry.” 1 The rights and duties of medical men and others in certifying and taking care of lunatics are now regulated and determined by the Lunacy Act, J890." By sec. 330 protection is afforded those acting in good faith in proceedings for the security of lunatics. Any person who presents a petition for a reception order, 3 “ or signs or carries out or does any act with a view to sign or carry out an order purporting to be a reception order or any report or certificate under this Act, or does anything in pursuance of this Act,” is not to be liable to any civil or criminal proceedings, whether on the ground of want of jurisdiction or on any other ground, if he acts “ in good faith and with reasonable care.” 4 In Thompson v. Schmidt 5 an effort was made to render a medical man liable for setting in motion a relieving officer, who, acting under sec. 20, caused an alleged lunatic to be taken and confined in a workhouse. r J'he defendant, who had been medical adviser to the plaintiff’s family, had on the application of plaintiff’s wife, given a note to the relieving officer in these terms : “ I hereby certify that Mr. Thompson is a person of unsound mind and is dangerous to those about him.” At the trial the judge held that the defendant’s intervention was a proceeding under the Act. The jury found a verdict for the plaintiff. This was set aside by the Court of Appeal on two grounds : first, that there was no negligence, because there was no duty ; secondly, that the act by which the jfiaintiff suffered was the act of the relieving officer in the exercise of his discretion. As to the former of these grounds Lord Esher, M.R., said : “A man could not be sued for negligence unless there was a duty imposed on him to take care. A medical man held himself out, to any one employing him for treatment as a medical man, as a person who would act with ordinary care and skill. To others a medical man had no duty to be careful or skilful. His duty was to his patients.” The distinction indicated is that the fact that a man, whose duty towards his neighbour is regulated by the ordinary rules requiring unskilled diligence, happens also to be a medical man, does not impose on him a greater obligation than in the ordinary case of an unskilled person. His duty is to bring ordinary care to bear, not professional skill — the care of an ordinary common-sense business man, not the diagnosis of a scientific man and a specialist. As to the second point, though the report does not so state, the Court adopted a passage from Wharton G which Lord Esher, M.R., read as follows : “ Supposing that if it had not been for the intervention of a responsible third party the defendant’s negligence would have 1 L.c. 3C5. As to the examination required under the Lunatic Asylums Act, 1853 (16 & 17 Viet. c. 97), s. 68, see The Queen v. Whitfield, 15 Q. B. 1). 122. See now the Lunacy Act, 1890 (53 Viet. c. 5), and the Lunacy Act, 1891 (54 Lx. 523. to in re Dangar's Trusts, 41 Ch. D. 178. NEGLIGENCE IN LAW. Solicitor may be attached under the Debtors Act, 1869. II. Solicitor’s liability under his retainer. Rule laid down by Lord Mansfield. Amplified and enforced Montriou v. J efj&rys. I 180 [book VI. The Court has, nevertheless, refused to interfere summarily to compel a solicitor to pay over money borrowed for a client on security ; unless the security is by deed, 1 perused by the solicitor on behalf of his client ; or to enforce a guarantee on which no action could be brought for money borrowed by the client. 2 In an administration where it appeared that the trustee had lent trust funds without security to his solicitor who knew whence the loan was derived, Farwell, J., 3 in the exercise of the summary juris- diction of the Court, ordered the solicitor, though not a party to the action, to bring the money into Court, and in answer to an objection to the jurisdiction cited the expression of James, L.J., in Re Cleri- hew's estate : 4 “it would be a shocking thing if this order could not be made.” A solicitor may be attached for misconduct ; as, for example, under the Debtors Act, 1809, 5 s. 4, sub-s. 4, for default “ in payment of costs when ordered to pay costs for misconduct as such, or in pay- ment of a sum of money when ordered to pa)’’ the same in his character of an officer of the Court making the order.” 6 II. The next branch of the subject to consider is the solicitor’s liablility to his client under his retainer. 7 The case most frequently cited on the rule of skill to be used by a solicitor is Pitt v. Yalden. 8 There Lord Mansfield laid down the principle, that “ not only counsel, but judges, may differ, or doubt, or take time to consider. Therefore an attorney ought not to be liable in cases of reasonable doubt.” This is somewhat amplified and enforced by Abbott, C.J., in Montriou v. Jefjerys : 9 “No attorney is bound to know all the law ; God forbid that it should be imagined that an attorney, or a counsel, or even a judge is bound to know all the law, or that an attorney is to lose his fair recompense on account of an error, being such an error as a cautious man might fall into.” Never- theless, the solicitor cannot shift the responsibility from himself by consulting counsel where the law would presume him to have the i In re an Attorney, 1 1 Jur. 396. - In re Kearns, 1 1 Jur. 521. 3 In re Carroll, [1902] 2 Ch. 175. 4 24 L. T. 801. s 32 & 33 Viet. c. 62. 0 If a man is once in a fiduciary position in respect of which he has acted, the fact that he has ceased to act will not relieve him from the liabilities he has incurred while acting in that capacity : In re Strong, 32 Ch. D. 342, followed inln re Gent, Genl-Davis v. Harris, 40 Ch. D. 190. See Evans v. Bear, L. R. 10 Ch. 76, as affected by the Debtors Act, 1878 (41 & 42 Viet. c. 54), s. 1; Morris v. Ingram, 13 Ch. I). 338; In re Diamond Fuel Co., 13 Ch. D. 815. See Bvekley v. Crawford, [1893] 1 Q. 15. 105, as to the limits of the Debtors Act, 1869. As to liability of solicitor for not truly describing the residence of his client, whereby defendant did not obtain security for costs : In the matter of a Solicitor, 5 Times L. R. 339. 1 A solicitor should obtain a written authority from his client before commencing a suit. If ho is obliged to commence proceedings without such authority he should obtain it as soon afterwards as he can. “An authority may however be implied where the client acquiesces in and adopts the proceedings ; but if the solicitor’s aut hority is disputed it is for him to prove it ; and if lie has no written authority and there is nothing but assertion against assertion, the Court will treat him as unauthorised, and he must abide by the consequences of his neglect ” : per Lord Langdale, M.R., Alien v. Bone, 4 Beav. 493. Lord Tentcrden, C.J., Owen v. Ord, 3 C. & P. 349, says : “ Every respectable attorney ought, before he brings an action, to take a written direction from his client for commencing it.” See Elcy v. Positive Government, 2 C. & P. 113, 1 16. CHAP. III.] SOLICITORS. 1181 knowledge himself ; 1 though the fact that he has done so may still afford him protection. Domat 2 lays down the rule of the civil law, as applied in France, to be, that proctors, officers equivalent to solicitors, are prohibited from drawing up “ writings which may serve to establish and found the rights of their clients,” which business is the province of advocates ; and though the law in England is not nearly so stringent, still the solicitor is most generally protected where he has referred to counsel questions of law other than those which are purely elementary , 3 the form of the pleadings, the kind of evidence to be brought, forward or any point of grave occurrence or special intricacy . 4 Domat 5 continues thus : “ The other duties of proctors consist in acquiring a thorough knowledge of the rules of their profession, in applying themselves to the affairs committed to their charge, with such a vigilance, diligence, and care, as that their clients may not be in any way surprised, and that their causes be carried on without any delay ; and likewise on their part that they observe with respect to the adverse party everything which the order of justice and a fair upright dealing may require. They are to content themselves with the ordinary fees and perquisites of their office, without exacting any more than what is settled by the rules and orders of the Court ; they are to serve the poor for nothing, as they are required to do by law ; they are to serve those who by reason of their poverty, or bee ause of the power of their adversaries, are forced to apply to the judge to have a proctor assigned them ; they are obliged to abstain from all manner of extortion, and to beware especially of the crime of compounding with their clients for what may be made of the causes with which they are charged, or for a share of it, and of treating with them in any manner which may directly or indirectly have the like effect.” The province of j udge and j ury respectively, in questions of solicitor’s negligence, has been marked out by Lord Denman, C.J. : 6 “It was proper to direct the jury positively as to the premises from which they were to draw their conclusion. Thus, it was the province of the judge to inform the jury for what species or degree of negligence an attorney was properly answerable,” “ but, having done this, it was right to leave to them to say, considering all the circumstances, and the evi- dence of the practitioners, whether, in the first place, the attorney had performed his duty, and in the second, in case of non-performance, whether the neglect was of that sort or degree which was venial or culpable in the sense of not sustaining, or sustaining, an action.” 7 If the facts are undisputed the Court can determine, as a matter of law, whether the defendant’s conduct is negligent or not, for “ the jury is not to inquire as to that which is agreed on by the parties.” 8 The authorities are collected in the argument in Rule of the Civil Law as to drawing up writings. Other duties of proctors according to Domat. Province of judge and jury. Lord Denman, C.J., in Hunter v Caldwell. Where the facts are undisputed the matter is for the Court. Stephenson v. Iligginson, 3 H. L. C. G38. Kemp v. Burt, 4 B. & Ad. 424 ; Jack , s 1 Godejroy v. Dalton, 0 Bing. 400. Parker v. Rolls, 14 C. B. 691, 098. 2 Public Law, Bk. 2, tit. 5, s. 2, art. 8. 3 Bulmer v. Gilman, 4 M. & G. 108 ; Bell, 3 C. & P. 310. 4 Manning v. Wilkin, 12 L. T. (O. S.) 249; Bracey v. Carter, 12 A. & E. 373; Laidler v. Elliott, 3 B. & C. 738. s Public Law, Bk. 2, tit. 5, s. 2, art. 9. 6 Hunter v. Caldwell, 10 Q. B. 82. 7 See Reece v. Righy, 4 B. & Aid. 202. For damages, where plaintiff alleged he “ was forced to pay ” a certain sum, but where his liability was greater in consequence of the alleged negligence, Jones v. Lewis , 9 Dowl. Prac. Cas. 143. 8 2 Roll. Abr. Triall (R.), 1, cited by Lord Blackburn, in Dublin, Wicklow, and W exford Ry. Co. v. Slattery, 3 App. Cas. 1201. NEGLIGENCE IN LAW. BOOK VI. 1 182 Amount of negligence. Crassa negligentia. Godefroy. v. Dalton. Consideration of the mean- i ng of crassa negligentia. The next point is to ascertain more in detail the amount of negligence that raises the presumption of liability. Some obscurity as to this exists, not through uncertainty of the law, but through ambiguity in its statement. “ An attorney,” says Lord Ellenborough , 1 “ is only liable for crassa negligentia ” ; and it was laid down in the House of Lords 2 that it is of the “ very essence ” of an action for negligence against a solicitor “ that there should be negligence of a crass description, which we call crassa negligentia — that there should be gross ignorance.” This expression must not be taken to indicate the absence of ordinary care, but the absence of that care which should be ordinary in the case of a solicitor, the negligence of an expert, not of the non-professional man. This is manifest, both on principle and from the remarks of Tindal, C.J., in Godefroy v. Dalton ; 3 where he sums up the cases as establishing that a solicitor is in general “ liable for the consequences of ignorance, or non-observance of the rules of practice of this Court ; 4 for the want of care in the preparation of the cause for trial ; 5 or of attendance thereon 6 with his witnesses ; 7 and for the mismanagement of so much of the conduct of a cause as is usually and ordinarily allotted to his department of the profession . 8 Whilst, on the other hand, he is not answerable for error in judgment upon points of new occurrence, or of nice or doubtful construction , 9 or of such as are usually entrusted to men in the higher branch of the profession of the law” ; and d fortiori not when he acts in accordance with a recent and authoritative decision . 10 Crassa negligentia or culpa lata, 11 as understood by Lords Ellen- borough and Brougham and the numerous other judges who use it in the sense we are now considering, is failure to use such skill as may be reasonably expected from a man’s profession ; and culpa levis is the legal expression of : to whom little in the way of skill is given, little is required. This is said to differ from the signification of the terms in the Roman law. There crassa negligentia is interpreted, not to under- stand what all men are supposed to understand ; and culpa levis 13 1 Baikie v. Chandless, 3 Camp. 20 ; Bnlmcr v. Gilman , 4 M. & G. 108 ; Godefroy v. Dalton, 0 Bing. 400. 2 Purves v. Landell, 12 Cl. & F., per Lord Brougham, 08; Mahony v. Davoren, 30 L. R. Ir. 664. 3 6 Bing. 468. 4 That is, of any particular court in which the solicitor professes to practise (e.g.. Mayor’s Court, Cox v. Leech, 1 C. B. N. S. 017) ; Hunter v. Caldwell, 10 Q. B. 6!) ; Frankland v. Cole, 2 Cr. & J. 590 ; Huntley v. Bulwer, 6 Bing. N r . C. Ill; Stokes v. Trumper, 2 K. > the Court of Common Pleas in Chown v. Parrott 11 and again in 1 restwich v. Poley, 12 and has been repeatedly recognised as established law. 1 Westaway v. Frost, 17 L. J. Q. B. 28G ; Hubbart v. Phillips ,13 M. & W 702. The onus of proving authority is on the solicitor: Hoskins v. Phillips, 10 L. « • w- • 339 . Dupenv Keeling, 4 C. & P. 102. Where an attorney brings an action without the authority of the plaintiff, the plaintiff is entitled to have the P r ° ce ® d * n f^ a y e ^ S against the defendant without payment of costs : Reynolds v. Howell, L. R. 8 Q- B. 4J8 In any case a solicitor appearing for another without h.sassent is prec uded from recovering his costs from the party himself : Spurrier ■ v. Allen 2 C. & K. -10 , Hall v. Laver 4Y &C (Ex.) 216: or by lien: Abbott v. Rice, 3 Ring. 166. . , , , 2 Andrews v Hawley, 26 L. J. Ex. 323, a case where a third person instructed the attorney falsely pretending to be the plaintiff’s partner There mus be an allegation that legal damage has been sustained: CoUerell-v. Jones, 11 C. B. 713 , see Quartz Hill, &c. Gold Mining Co. v. Eyre, 11 Q. B. D. 074. 3 Tomlinson v. Broadsmith, [1896] L Q. B. 386. 4 In the matter of Clark, 1 De G. M. & G. 43 See Jacks v. Bell 3 C & P. 3 6 per Lord Tenterden, G.J., on the duty of the solicitor to dissuade his client .also the same judge as reported 2 Chitty, General Practice, c. 1. 21 n. , J Jj 14 L. J. Ch. 177 ; Lawrence v. Potts, 6 C. & P. 428. 5 Thwaites v. Mackerson, 3 C. & P. 341 ; De Montmorency > v.Devereux, 7 Cl. & 1. Igg 6 Hart v. Frame , 6 Cl. & F. 103 ; Smith v. Grant , 20 Dunlop, 077. 8 f E.' & & ^“distogidshed Tucker v. Colter ell, 34 W. R. 323 ; Jeffries v. Mutual Lifelnsurance Co 110 U. S. (3 Davis) 305. ^ ^ ^ 1 F & R 128 . li 14 C B N S 74 12 18 C. B. N. S. 806. is Strauss v.' Francis, L. R. 1 Q. B. 379, 382; Matthews v. Munster, 20 Q. B. D. 141. 1188 NEGLIGENCE IN LAW. Provided that he exercises diligence and care in so doing. What pre- liminary investigation the solicitor is required to take. Difficult points of law. [BOOK VI. In the latter case Montague Smith, J., 1 thus expresses the principle : “ The attorney is the general agent of the client in all matters which may reasonably be expected to arise for decision in the cause. Every one must reasonably expect that a cause may not be carried to its natural conclusion, and that it is proper and usual, and often necessary to compromise. The authorities seem to me to establish clearly that the attorney has power to compromise the action in a fair and reasonable manner.” This statement has since been adopted by Farwell, J., 2 with its necessary limitation : “ It is within the scope of a solicitor’s authority to compromise and if he uses all due diligence and acts bond fide and reasonably no action will lie against him ; but if he has been expressly forbidden to compromise, and he does compromise, then, however beneficial that compromise be, an action will lie against him for disregarding that express negative direction.” 3 Yet m making a compromise no greater latitude is allowed a solicitor than in conducting his other business ; so that if the solicitor in compromising a suit acts in a way inconsistent with the diligence and care which good business men of his class are accustomed to show in that description of business, he exposes himself to an action for negligence ; 4 notwithstanding this the compromise arrived at as against his client, holds good unless its features are such as to imply fraud. 5 In making the preliminary investigations before instituting proceedings the solicitor’s duty is specially to consider : (1) Whether there is any, and what, right of action ; (2) Whether it is affected by any Statute of Limitations ; (3) Whether any preliminary notice or demand is required ; and (4) Who are the proper parties against whom the action is to be brought. 6 Palpable negligence in any of these particulars, whether arising from want of acquaintance with law or from defective apprehension of the facts, constitutes a cause of action against the solicitor ; for the client is entitled to have the benefit of his solicitor’s advice and judgment in the conduct of the suit ; and the solicitor is required to be reasonably competent in its management. 7 Where difficult points of law arise, the solicitor is generally pro- tected by counsel’s opinion, though not as to the proper practical proceedings to be taken. 8 Even here, if anything crops up on which doubt can reasonably be entertained, he will not be held liable ; 9 nor i 18C. B. N. S. 816. 2 lnrcNcwcn,[\'-m] 1 Ch. 812. 3 L.c. 817. 4 Chambers v. Mason, 5 C. B. N. S. 59. 5 Marshall, C.J., thus expresses the American rule in Ilolkcr v. Parker, 7 Crunch (U. S.), 452: “Although an attorney at law, merely as such, has, strictly speaking, no right to make a compromise ; yet a Court would be disinclined to disturb one which was not so unreasonable in itself as to be exclaimed against by all, and to create an impression that the judgment of the attorney has been imposed on, or not fairly exercised in the case. But where the sacrifice is such as to leave it scarcely possible that, with a full knowledge of every circumstance, such a compromise could be fairly made, there can be no hesitation in saying that the compromise being unauthorised, and being therefore in itself void, ought not to bind the injured party. Though it may assume the form of an award or of a judgment at law, the injured party, if his own conduct has been perfectly blameless, ought to be relieved against it.” o Pulling, Law relating to Attorneys (3rd ed.), 175-179. 7 Ilopkinson v. Smith, 1 Bing. 13 ; Harvey v. Mount, 8 Beav. 439, 454 ; Baker v. Loader, L. R. 16 Eq. 49. 8 Russel v. Palmer, 2 Wils. (C. P.) 325 ; Swannell v. Ellis, 1 Bing. 347. o Laidlcr v. Elliott, 3 B. & C. 738 ; Baikie v. Chandless, 3 Camp. 17. Chap, hi.] SOLICITORS. 1180 yet if lie have carefully drawn a case and obtained an explicit opinion of an experienced counsel and acted strictly within his directions. 1 A solicitor has been held liable for blunders and mistakes in drawing Ordinary up an order or rule 2 for neglect to deliver a pleading ; 3 for bringing an action in a court which has no jurisdiction ; 4 or for suing in a superior ' court when he should have brought the action in a county court ; 5 for laying the venue in the wrong county ; G for administering interrogatories for examination in chief, under the old Chancery prac- tice, of an adverse witness already examined on the other side instead of cross-interrogatories ; 7 for disobeying the lawful instructions of the client, though acting in good faith, and honestly thinking to advance the client’s interest ; 8 for not seeing that a foreign bill sued on complies with the formalities of the foreign law applicable ; 9 for neglecting to deliver briefs to counsel in time for the trial ; 10 for neglecting to furnish counsel with materials adequate for dealing with the case, failing which he withdrew the record ; 11 for not subpoenaing the requisite witnesses ; 12 for omitting to procure their attendance at the trial ; 13 for not attending at the trial ; 14 or before the arbitrator in the case of a reference ; 15 for misreading the date of a notice of trial ; 16 for not taking steps to set aside an irregular order ; 17 for negligently making an erroneous statement to the Court, so that a wrongful order is procured ; 18 for want of diligence in the prosecution of the decree ; 19 for neglecting to compel a receiver to pass accounts ; 20 for neglect in 1 Kemp v. Burt, 4 B. & Ad. 424. In submitting a case to counsel he must have acted bond fide ; Andrews v. Hawley, 26 L. J. Ex. 323 ; Hewlett v. Cruchl&y, 5 Taunt. 277. 2 In re Bolton, 9 Beav. 272. 3 In re Massey and Carey, 26 Ch. D. 459, 464. 4 Williams v. Gibbs, 5 A. & E. 208. 5 Lee v. Dixon, 3 P. & P. 744. The report of this case is confused, the point of the report appearing best in the note of Bramwell, B.’s, summing up on the second trial in the note at 749. Cp. Barker v. Fleetwood Improvement Commissioners, 62 L. T. 831, where an action was brought in the Palatine Court that could have been brought in the County Court. It was held that the doing so was not negligence and imposed no penalty, either by deprivation of costs or otherwise upon suitors using its machinery ; see s.c. 6 Times, L. R. 430 (C. A.). 6 Kemp v. Burt, 4 B. & Ad. 424 ; but see now R. S. C. 1883, Order xxxvi. 1. i Stokes v. Trumper, 2 K. & J. 232 ; see R. S. C. 1883, Order xxxvii. r. 1. 8 Cox v. Livingston, 2 Watts & S. (Pa.) 103. 9 Long v. Or si, 18 C. B. 610, a French Bill of Exchange not indorsed in the manner required by the French law. Rex v. Tew, Sayer, 50 ; De Roufigny v. Peale, 3 Taunt. 484, where a new trial was granted “ upon payment by the defendant’s attorney, out of his own pocket, of all costs as between attorney and client ” ; Hoby v. Built, 3 B. & Ad. 350 ; Townley v. J ones, 8 C. B. N. S. 289, where a new trial was granted on the terms of the attorney paying the costs of the day out of his own pocket, “ otherwise it will be discharged.” 11 Hawkins v. Harwood, 4 Ex. 503. 12 Price v. Bullen, 3 L. J. K. B. (O.S.) 39. is Reece v. Righy, 4 B. & Aid. 202 ; Dax v. Ward, 1 Stark. (N.P.) 409. If it is the party’s own act that they are not called he is not to be heard to complain, at any rate so far as any interference with the rights of the other party acquired under a j udgment is involved : Wright v. Soresby, 2 Cr. & M. 671. it Nash v. Swinburne, 3 M. & G. 630. is Swannell v. Ellis, 1 Bing. 347 ; Dauntley v. Hyde, 6 Jur. 133. The solicitor is not answerable for neglect of counsel : Lowry v. Guilford, 5 C. & P. 234. This was the case of counsel being in another Court and the attorney absent. In arguing for the defendant, Sir J. Scarlett said : “ In the King’s Bench if the attorney and counsel are both absent the case is lost, and no new trial will be granted ; but if the attorney stays and says that his counsel is at the Rolls, or any other Court near, he would be sent for, instead of the cause being struck out.” As to solicitor’s duty with regard to sending to a reference, Chapman v. Van Toll, 27 L. J. Q. B. 1 ; also Smith v. Troup, 7 C. B. 757 ; Faviell v. Eastern Counties Ry. Co., 2 Ex. 344. i« Nash v. Swinburne, 3 M. & G. 630. i? Frankland v. Cole, 2 Cr. & J. 590. is In re Spencer, 39 L. J. Ch. 841. 19 Ridley v. Tiplady, 20 Beav. 44. 20 v. Jolland, 8 Ves. 72, where Lord Eldon, though not actually deciding the 1 1 00 NEGLIGENCE IN LAW. [book VI. complying with an order for passing publication ; 1 for allowing judgment to go by default ; 2 for discharging a defendant from custody without receiving satisfaction ; 3 for not charging a prisoner defendant in execution ; 4 for not duly entering up judgment , 5 and, ; primd facie , issuing execution ; 6 and for neglecting to set aside irregular proceedings . 7 Where , Where the negligence alleged is that the plaintiff was convicted in m'uihrt'-nre previous proceedings through the default of the solicitor, the plaintiff conduces to 4S n °t bound to prove that the negligence was the exclusive reason the conviction of the conviction : “ If the defendants’ negligence largely contributed oi his client. £ 0 a e result, they would be answerable for such damages as ” might be thought just in all the circumstances . 8 The principle implied is doubtful. So long as the conviction stands it is conclusive that the man is rightly convicted. An action for negligence would seem to lie on the contract so far as the solicitor had failed to act up to the standard of duty implied by his retainer ; but while the conviction stands, having “largely contributed to the result” seems to involve an irrelevant consideration. A difficulty would also arise, assuming that the conviction is conclusive, on the damages if the case got so far. By hypothesis the result arrived at is right. The solicitor has been guilty of a breach of contract ; but the only damage probable is depriving the man — to adopt a common colloquialism — of “ a run for his money ” ; and the damages would be only nominal. Any client in so unhappy a position would be well point whether the receiver should not make good the loss so occasioned, adds : “ It would at least be a very grave question ; so also as to the solicitor who should permit such a transaction.” i Franklandv. Cole, 2 Cr. & J. 590. ~ Godefroy v. Jay, 7 Bing. 413. 3 Bevins v. Hulme, 15 M. & W. 88. The alteration in the law makes this and the following decision obsolete. * Russel v. Palmer, 2 Wils. (C. P.) 325. 5 Flower v. Bolinybrolce, 1 Str. G39. The proposition is not decided by, but is merely an inference from, the case. See, however, Hett v. Pun Pong, 18 Can. S. C. R. 290, where Strong, J., says at 295: “ I am of opinion, however, that consistently with (he authorities it cannot be held that a retainer to prosecute an action terminates with the recovery of the judgment, nor that such a retainer does not by itself make it the duty of the attorney or solicitor without further instructions to proceed after judgment and endeavour to obtain the fruits of the recovery ” including the making it by registration a charge on the lands of the judgment debtor. For this he cites Lady dc la Pole v. Dick, 29 Ch. D. 351, following Lawrence v. Harrison, Style, 426. As to the scope of a solicitor’s authority to bind his principal, Jarmain v. Hooper, 6 M. & G. 827, dis- tinguished in Smith v. lieal, 9 Q. B. D. 340, which was followed, J lorris v. Salberg, 22 Q. B. D. 614. For the position of solicitor to trustees, Staniar v. Evans, 34 Ch. I)., per North, J., 477 : “ He is not solicitor to the trust estate. He has no retainer from the trust estate, but he is the person employed by the trustee for his own purposes as trustee. His retainer is by the trustee personally. The trustee personally is liable to pay his costs, and the trustee personally is the only person to whom the solicitor can look for those costs.” 6 Harrington v. Binns, 3 F. & F. 942 ; Union Bank of Georgetown v. Geary, 5 Peters (U. S. ), 99, 113. In the United States, an attorney at law is entitled in virtue of his general authority to take out execution upon a judgment recovered by him for his client, and to receive the money due, and thus discharge the execution. Further, “ if the judgment debtor has a right to redeem the property sold under the execution within a particular period of time by payment of the amount to the judgment creditor, who has become the purchaser of the property, there is certainly strong reason to contend that the attorney is impliedly authorised to receive the amount, and thus indirectly to discharge the lien on the land ” : per Story, J., Erwin v. Blake, 8 Peters (U. S.), 25. Cp. Dearborn v. Dearborn, 15 Mass. 301, a case of neglecting seasonably to sue out a scire facias on a bail bond. ^ Godejroy v. Jay, 7 Bing. 413. As to solicitor’s liability for wrongly describing plaintiff’s place of residence in writ of summons, In the matter of a Solicitor, 5 Times L. R. 339. s Hatch v. Lewis, 2 F. & F., per Pollock, C. B., 485. SOLICITORS. CHAP. III.] 1191 advised either to get the conviction quashed or to obtain a free pardon before he resorts to reprisals against his solicitor. 1 When a solicitor is retained to conduct an action, unless he give Solicitor reasonable notice of retiring from it or the client dies, 2 he is bound to may not carry it on to its termination ; 3 thus it was held too late to refuse to retire frorma deliver briefs four days before the commission day of the assizes. 4 case he has If due notice is given by the solicitor, the fact that he is not fur- undertaken, nished with money entitles him to be relieved of his duty. 5 The giving of reasonable notice is necessary, otherwise the absence of funds would not excuse him. 6 A solicitor is not liable for advising his client not to go on with a Advice to case, unless the client can show not only that he had a good case, but discontinue a also that the solicitor was, or ought to have been, aware of it. 7 It is ^ecessardy 0t doubtful whether even this is not too narrow a statement of the law ; negligent, since it may well be that a man has a good case, of which his solicitor is aware, yet which it is in the highest degree inexpedient to prosecute, e.g., a trifling claim against a crochety and wealthy customer. Where this is the case, another duty to his client — not to advise merely as to the legal, but as to the practical, aspects of the case 8 — would not be performed did the solicitor not dissuade him from its prosecution. A solicitor is not liable for negligence when the damage arises from Where the error of the judge in making an order at chambers ; 9 nor for pleadings, if drawn by a pleader ; 10 nor for refusing to insert matter Stakes, in pleadings against his own view at the instance of his client ; 11 nor for a mistake in evidence if he has bond fide taken counsel’s opinion ; 12 nor for the absence of counsel at the trial ; 13 nor because witnesses whose proofs have been taken are not called on the trial, since this is “ entirely for counsel ” ; 14 nor for anything within the province of counsel at the trial ; nor for omitting to move for a new trial without instructions to do so ; 15 nor for refusing to follow his client’s instructions to do what is merely designed for delay ; 16 nor for preparing a j oint warrant of attorney from two, so as not to guard against the effects of one of them dying before the judgment ; 17 nor for drawing under counsel’s advice an agreement bad for champerty, and for suing thereon ; 18 nor when 1 Cp. Bynoe v. Bank of England, [1902] 1 K. B. 467 ; Basebi v. Matthews, L. R. 2 C. P. 684, citing Vanderberg v. Blake, ( 1661 ) Hard. 194. 2 Whitehead v. Lord, 7 Ex. 691. See In re Cartwright, L. R-. 16 Eq. 469, and the limitation suggested by Lindley, L.J., Beck v. Pierce, 23 Q. B. D. 323, to “ such continuous work as bringing and prosecuting an action.” 3 Nicholls v. Wilson, 11 M. & W. 106. Cp. United States v. Curry, 6 How. (U. S.), per Taney, C. J., 1 1 1. t Hoby v. Built, 3 B. & Ad. 350 ; Wadsworth v. Marshall, 2 Cr. & J. 665 ; Gleason v. Clark, 9 Co wen (X. Y.), 57. s Rowson v. Earle, M. & M. 538 ; Van Sandau v. Browne, 9 Bing. 402, explained in Underwood v. Lewis, [1894] 2 Q. B. 306. s Nicholls v. Wilson, 11 M. & W. 106. 7 Bill v. Finney, 4 F. & F. 616. 3 Jacks v. Bell, 3 C. & P. 316 ; and 2 Chitty, General Practice, c. 1, 22. The whole of this chapter, Of the Retainer of a Legal Agent, may profitably be referred to. 9 Laidler v. Elliot, 3 B. & C. 738. to Manning v. Wilkin, 12 L. T. (O. S.) 249. it Ibbotson v. Shippey, 23 Sol. Jour. 388. 12 Andrews v. Hawley, 26 L. J. Ex. 323. is Lowry v. Guilford, 5 C. & P. 234. In a Mayor’s Court case, a solicitor acting as advocate was held liable to his client for failure to attend a police court : Fergusson v. Lewis, Law Journal Newspaper for 1879, at 700. See Solicitors as Advocates, Clarke v. Couchman, Law Journal Newspaper for 1885, at 318. t* Hatch v. Lewis, 2 F. & F. 482. ts Fray v. Foster, 1 F. & F. 681. to Johnson v. Alston, 1 Camp. 176. In Pierce v. Blake, 2 Salk. 515, Holt, C.J., said : “ If he [the attorney] puts in a false plea to delay justice, he breaks his oath, and may be fined jor putting a decision upon the Court.” 17 Kettle v. Wood, 5 L. J. (O. S.) K. B. 173. is Potts v. Sparrow, 6 C. & P. 749. VOL. II. 2 G NEGLIGENCE IN LAW. Solicitor handing over papers. II. Negli- gence in matters not in litigation. ( I ) Vendors and pur- chasers. Duty of solicitor with reference to abstract. 1192 [book VI. he accepts as a correct exposition of the law a decision of a competent court, even though in fact such decision is erroneous. 1 In the case of a solicitor, acting merely as the officer of the Court, handing over papers which may be afterwards acted upon, with no more active intervention than that of a postman who conveys a letter, he is not liable if a warrant he may so hand over proves bad. 2 If, however, he deliberately directs the execution of a warrant, he thereby takes on himself the chance of all bad consequences. 3 II. Negligence in matters not in litigation. (1 ) In the course of business between vendors and purchasers. The solicitor should inquire whether a thing proposed to be sold may legally be the subject of bargain and sale, that is, whether the bargain is not affected by fraud or immorality, or with regard to matters against public policy. 4 He is to ascertain whether the parties to the proposed contract have contractual capacity ; 5 and must take care that his client does not enter into any covenant or stipulation that may expose him to a greater degree of responsibility than is ordinarily attached to the business in hand, or at least does not do so till the consequences have been explained to him ; 6 and he must not volun- tarily and unnecessarily divulge defects in his client’s title. 7 On the other hand, a solicitor is liable if he allows his client to take a bare possessory title 8 without calling his attention to the fact. It is the duty of the vendor’s solicitor to deliver a sufficient abstract of title where the necessary investigations are not made in the course of the negotiations ; and of the purchaser’s solicitor not merely to see that what is abstracted is correctly stated, but also that all that is material is stated. 9 Thus, a solicitor ought not to content himself with a particular extract of a will furnished by his client, unless some- thing passes between him and his client which shows that it is un- necessary to consult the original. 10 There are expressions that would support the narrower duty in an early case ; 11 they are, however, merely obiter dicta, negativing an alleged duty on the part of a pur- 1 Marsh v. Whitmore, 21 Wall. (U. S.) 178 ; Blair v. Assets Co., [1896] A. C. 409. 2 Carratt v. Morley, 1 Q. B. 18, commented on in Pease v. Chaytor, 3 B. & S. 643, cited M ayor of London v. Cox, L. R. 2 H. L. 239, 263. 3 Green v. Elgie, 5 Q. B. 99 ; see Law Mag. (N. S.) vol. iii. (1846) 339. Tho right of lien on law papers is treated, Bell, Comm. (7th cd.) vol. ii. 107-109. 4 E.g., as in Fores v. Johnes, 4 Esp. (N. P.) 97 ; Hughes v. Done, 1 Q. B. 294 ; Graeme v. Wroughton, 11 Ex. 146. 3 Pulling, Attorneys, 229, citing Co. Lift. 172 a. 6 Stannard v. Ullithorne, 10 Bing. 491.' 7 Taylor v. Blacklow, 3 Bing. N. C. 235 ; Barber v. Stone, 50 L. J. C. P. 297. Cp. per Kelly, C.B., Hardy v. Veasey, L. R. 3 Ex. 111. Com. Dig. Action upon the Case for a Deceipt (A 5. ). s Allen v. Clark, 7 L. T. (N. S.) 781 ; Brooks v. Day, 2 Dick. (Ch.) 572 ; Arnol v. Biscoe, 1 Ves. Sen. 95. In Potts v. Dutton, 8 Beav. 493, a solicitor was mado to bear the expense of drawing a conveyance where the title-deeds wore out of tho vendor’s possession to his knowledge ; and in consequence of which the sale went oif. In Bell v Marsh, [1903] 1 Ch. 528, a solicitor investigated title, and prepared conveyance for land to part of which the solicitor had previously acquired an adverse title, and on which portion of a greenhouse was built ; but at the time both solicitor and client were ignorant that any portion of the solicitor’s premises was included in tho property which the client afterwards purchased. Tho Court of Appeal, reversing Buckley, .1., held that defendants were not estopped by the conduct of their testator from setting up against the plaintiff their testator’s title by adverse possession. o Sugdon, Vendors & Purchasers (14th ed.), 411, citing Kennedy v. Green, 3 My. & K. 699 ; Mahony v. Davorcn, 30 L. R. Ir. 664. 1( > Wilson v. Tucker, 3 Stark. (N. P. ) 154 ; Re Keeping and Oloag, 58 L. T. 679. 11 (1827), Bryant v. Busk, 4 Russ. 1. SOLICITORS. 1193 CHAP. III.] chaser’s solicitor to inform himself of the names of the attesting witnesses to title-deeds, with a view to the production of evidence in the event of the destruction of the deeds. The solicitor’s duty is only with reference to direct and immediate, Liability of and not to possible and future, requisites. In considering the effect of abstracts, he must avoid drawing wrong conclusions from the deeds foiled by laid before him ; though there is no duty on him to know their legal omission to operation. If he does not consult counsel, he assumes the risk of going “earchcs wrong . 1 There is authority 2 for saying that a solicitor is liable to his ' c client for loss occasioned by his omission to make any of the numerous searches which may by possibility disclose matter affecting the title. But it is pointed out in a work of great authority 3 that there is a general practice to make certain specified searches, and no more ; and a doubt is expressed whether a solicitor would be liable for one of these omissions which are sanctioned by general practice. Tindal, C.J ., 4 Opinion of solves this when he says : “ This [what constitutes the exercise of Tindal, C.J. reasonable and proper care, skill, and judgment] is a question of fact, the decision of which appears to us to rest upon this further inquiry— viz., whether other persons, exercising the same profession or calling, and being men of experience and skill therein, would or would not have come to the same conclusion as the defendant.” The solicitor would, of course, be liable if he omitted to require the statutory statutory searches to be made. And in the case of counsel advising a searches, search for specified incumbrances, it is laid down in the above-cited learned treatise that the “ solicitor need not make a more extensive search ” ; though the generality of the proposition is guarded by the reservation, “ unless aware of some particular reason for so doing.” 5 A further reservation may be suggested — that the duty of the solicitor would be dependent to no small extent on the form of the opinion. Primd facie, the solicitor is bound to inquire as to the payment of Duty to in- the past rent. If, however, the client has made inquiries about the quire as to matter, and leads his solicitor to believe that he is satisfied about it, Yist rent ° f the marginal note in W aine v. Kempster 6 states that it is not negligence 11 in the solicitor to omit to call for the receipts, or take other pre- cautions which otherwise would be usual and necessary. Yet this does not appear from the report of what Blackburn, J., said ; from which the inference rather seems to be that, failing an employment “ to see whether the transaction was safe with the reference to the past rent,” there would be no presumption raised whatever ; nor does it appear just in principle ; for the solicitor is not retained to tell the client what he knows, but what he does not know, and to discover any pitfalls in his path. In cases in which a deed is settled in chambers there is the authority Solicitor may of Kay, J ., 7 for saying that the solicitor may be liable for negligence be liable even though the deed professes to be settled by the Court. “ The w ^Yessest< Court,” says that learned judge, “ acts always upon the instigation of be settled by 1 I reson v. Pearman, 3 B. & C. 799 ; Whiteman v. Haw’cins, 4 C. P. D. 13. 1 ^ le C° UI 'L 2 1 Byth. & Jarm. Conv. (4th ed.) 100 ; Watts v. Porter, 3 E. & B. 743 ; Cooper v. Stephenson, 21 L. J. Q. B. 292 ; Allen v. Clark, 7 L. T. (N. S.) 781. 3 Dart, Vendors and Purchasers (7th ed. ), vol. ii. 1 197. * Chapman v. Walton, 10 Bing. 63. s Dart, Vendors and Purchasers (7th ed.), vol. ii. 1 197, citing Cooper v. Stephenson, 21 L. J. Q. B. 292. « 1 F. & F. 695. 7 Stanford v. Roberts, 26 Ch. D. 160. As to the duty of the client to examine bundle of deeds handed him by his solicitor, Hunt v. Rimes, 2 De G. F. & J. 578 (2) Landlord and tenant. Usual covenants. (3) Lenders and borrowers. (a) Duty to invest in a particular security. 1194 NEGLIGENCE IN LAW. [hook vi. the solicitors employed in the matter, and suppose that by reason of the exceeding negligence of the solicitor employed by the plaintiff in the action, a deed of settlement should be settled and passed in a form which omitted some of the provisions which the conveyancing counsel had recommended should be inserted in it, is it to be said that the solicitor is relieved from responsibility ? I do not think so. There are many cases in which a solicitor would not be relieved from respon- sibility, although the deed was formally settled in Court, if the deed happened to be in a wrong form owing to his negligence.” 1 (2) In the course of business between landlord and tenant. The intervention of a solicitor is most often required in this case in the preparation of leases, a duty not infrequently complicated by the existence of settlements or special conditions. The lease and counterpart are usually prepared by the solicitor of the lessor on behalf of both parties. The costs of surveyor’s charges and counsel’s fees for advising on title will not be allowed as part of the costs of the lease. 2 Leases should contain all the proper and usual covenants applicable to the subject-matter demised, the custom of the country and the most usual and probable contingencies. 3 “ Usual covenants,” says Jessel, M.R., 4 “ may vary in different generations. The law declares what are usual covenants according to the then knowledge of mankind ” ; and these, whether the agree- ment in terms stipulates for them or not, should be inserted. 5 Though the way in which the case came before the Court left Jessel, M.R., to decide what were usual covenants, in an action for negligence the matter would have to be left to the jury on the question of what is reasonable and competent skill; and the jury would have to decide, but under the direction of the judge. (3) In the course of negotiating between lenders and borrowers. The duty of a solicitor in the case of negotiating a loan may fall under any one of the three following classes : («) He may receive a certain sum of money to invest in a particular security. In this case all he does is the legal business. He receives the money, and has to see that the deeds are executed in proper time, and that the money is handed over to the borrower. He has no duty to inquire into the borrower’s responsibility, nor into the sufficieny of the security 6 arising from the property being unencumbered or the borrower being insolvent. 7 1 As to the vendor’s duty to the purchaser in regard to deterioration of (lie property, see Phillips v. Silvester, L. R. 8 Ch. 173 ; Clarke v. Rarnuz, [1891] 2 Q. B. 45(3. 2 Lock v. Furze, 19 C. B. N. S., per Erie, C.J., 119. 3 Pulling, Attorneys (3rd ed.), 234. Stannard v. Ullilhorne, 10 Bing. 491. In Barrow v. Isaacs and Son, [1891] 1 Q. B. 417, there was provision in a lease that (ho lessees should not grant an underlease without the lessor’s consent in writing being obtained. The lessees underlet part of the premises without asking for the lessor’s consent. The underlease was prepared by the solicitor, who omitted to look at the head-lease, and forgot that it contained the covenant, not to underlease without consent. It was held by the Court of Appeal that the negligence was not a mistake so as to make applicable the plea of equity, and that the Court would not relieve from the forfeiture. 4 Hampshire v. Wickens, 7 Ch. D. 501 ; In re Lander and Bagley's Contract, [1892] 3 Ch. 41. Cp. James v. Covchman, 29 Ch. D. 212. 5 Church v. Brown, 15 Ves. 204 ; Properl v. Parker, 3 My. & K. 280. 6 2 Chitty, Pleading, 281, n. ; Green v. Dixon, l Jur. 137 ; Howell v. Young, 5 B. & C. 259! 7 Hartnell v. Howard, 4 B. & C. 345. Cp. King v. Withers, (1690) Prce. Ch. 19. The marginal note is: “ A scrivener who was omployed to examine into a title fails in his SOLICITORS. 1 195 CHAP. III.] (d) He may receive money in order that lie may find a security to (/3) Duty to invest it upon, subject to the approval of his client, retaining the money im<1 il in the meantime. _ _ subjectto the In this case he must submit to his client the various securities approval of proposed, advise on their eligibility, and ultimately see that the money his client, is handed over, and a sufficient security given for it. He is not liable where the matter does not require the exercise of professional skill and the reasons for taking any step are submitted to the client, and are of a nature that any man should be able to form an opinion upon . 1 The receipt of money given for the purpose of general investment does not in itself create the relation of trustee and cestui que trust between a solicitor and his client . 2 Where the client is a trustee the solicitor’s duty is to call his atten- Where client tion “ to the rules laid down by the Court for the guidance of trustees,” 1S a trustce - and any matters known to him which materially affect the value of the property as a security . 3 But he may also recommend the investment, when his responsibility is increased, as is well shown in a Scotch case . 4 “ For an agent,” says Lord President Robertson , 5 “ to bring an invest- ment under the notice of a client is of course to a certain extent a recommendation — that is to say, it is the expression of the opinion that the investment is worthy of consideration. If besides thus introducing an investment an agent expresses a favourable opinion of it, he will be liable, if his opinion was either not honest or given when he had no adequate information entitling him to give an opinion at all. But then it is necessary to bear in mind that all this has to be considered in relation to the client in question, and to the kind of investment he is known to desire.” “ In order,” says Lord M’Laren , 5 “ to make good a case of liability in such circumstances as the present, it appears to me that the pursuer must establish three points. He must show, first, that the agent in the transaction undertook to act, not as a conveyancer, but as a valuator and adviser as to the sufficiency of the investment ; second, that he gave bad advice either intentionally or without any sufficient reason for giving the advice ; and third, that the information given by the agent was not in fact true information.” (y) He may receive money to invest, and be empowered to act ex- (y) Duty to clusively and without reference to his client ; as if the client is abroad . 7 ^^referencc In this case the solicitor has not merely to provide the securities, to his client, and conduct the legal business with reference to the settlement of the duty by neglecting to make a thorough inquiry, &c., whereby his client is a sufferer ” ; but the facts show that Withers, the defendant, proposed the security to the plaintiff. On advising as to title, counsel suggested an inquiry, which Withers either never made, or “ at least never gave any answer to the counsel, but told Sir Edward [the plaintiff | that Billingsly [the proposed lender] was a very honest man, and so prevailed on him to lend the money.” in Brinsdenv. Williams, [ 1894] 3 Ch. 185, solicitors of a mortgagee trustee were held not liable for the insufficiency of the security though the mortgage money was paid through them. 1 Chapman v. Chapman, L. R. 9 Eq. 276, 296. 2 Mare v. Lewis (1869), Ir. R. 4 Eq. 219. 2 Morgan v. Blytli, [1891] 1 Ch. 344, 361, the case of an improper investment; Sawyer v. Goodwin, 1 Ch. D. 361. ^ Cleland v. Brownlie, 20 Rettie, 152. 5 L.c. 162. « Lx. 163. 2 Bostock v. Floyer, L. R. 1 Eq. 26 (recognised in Speight v. Gaunt, 9 App. Cas. 5), denies the competence of trustees to trust so far to solicitors. See, however, the gloss by Lindley, L.J., 22 Ch. D. 761 : “ As I understand it the ratio decidendi of the case was this, that it was not the ordinary course of business for a trustee to place money in the hands of a solicitor to invest. It was not a specific investment, it was handed to the solicitor, and in that point of view the case is intelligible enough upon the ground that it was not right for the trustee to hand over the money to the solicitor for the purpose of investment.” Blair v. Bromley. Si. Aubyn v. Smart. Comment. 1190 NEGLIGENCE IN LAW. [book vt. terms theof loan ; lie also undertakes tlie responsibility to his client of seeing that they are good securities, on which money may be safely invested.' He becomes liable for the neglect of any precaution which a prudent man of competent skill would have taken — as for omitting to inquire if the proposing borrower has been bankrupt, or if any other circumstance of the case renders the security ineligible. 1 2 In no case does it appear that he has to caution his client against improbable contingencies of loss ; 3 and the taking a mortgage without a power of sale has in an old case been held a precaution against so improbable a contingency of loss, that default in taking it should not affect a solicitor with liability for negligence. 4 It has been contended 5 that to receive money to lay out on mort- gage for clients is not within the ordinary duty of a solicitor. Lord Lyndhurst overruled this contention. “ for the duty of laying out the money was in the ordinary course of the business of the firm ; and they had undertaken it [to lay out money] ; and in that case I agree with what is laid down by the Master of the Rolls in Sadler v. Lee, 6 that all the partners become liable for the several acts of each ” ; 7 and thus where a fraud was perpetrated by the solicitor’s partner, the solicitor would himself be liable to make restitution. 8 In St. Aubyn v. Smart, 6 Malins, Y.C., lays down that, though the ordinary course of business might not warrant any particular transaction, still a liability upon it would arise, binding all the members, so soon as it is shown that any duty has in fact been undertaken by the firm, quite apart from the question whether the duty is within the ordinary course of a solicitor’s business; for thereby all and each of the partners becomes liable for any miscarriage in the discharge of that duty. It may be remarked that a liability of this sort does not strictly arise out of the partnership relation ; but is rather a consequence of an estoppel to deny that the particular business undertaken is firm business, because the members of the firm have chosen to conduct themselves on the assumption that it is. St. Aubyn v. Smart is a decision rather illustrating the class of facts the presence of which will affect an innocent partner with liability for transactions not normally within the scope of the partnership, than the indication of a principle that a partner may constructively be bound for acts of his partner outside the ordinary course of business and carried on independently of him. 10 1 Booby v. Watson, 30 Ch. I). 178. 2 Cooper v. Stephenson ; 21 L. J. Q. II. 202 ; Smith, v. Pococke, 23 L. J. Ch. 545. 3 Brumbridge v. Massey, 28 L. J. Ex. 50. 4 Bailey v. Abraham, 14 L. T. (O. S.) 210; Davidson, Conveyancing (4th ed.), vol. ii. part ii. 85. 5 Blair v. Bromley, 5 Hare, 542 ; 2 Ph. 354. <> (1 Beav. 330. t See Dundonald v. Masterman, L. R. 7 Eq. 504, 515, where James, V.C., considers and explains the expressions of Turner, L.J., in Viney v. Chaplain. 2 De G. & J. 468. Lord Campbell’s remarks in Harman v. Johnson, 2 E. & B. 05, distinguish between the business of an attorney and a scrivener, while admitting that “ attorneys frequent ly do act as scriveners in the full sense of the term ” ; and during the fifty years since Lord Campbell’s dictum this frequency has probably grown into a custom judicially to bo noticed. As to the business of a scrivener, see Ex parte Malkin. 1 Rose, 400; 2 Rose, 27 ; Adams v. Malkin, 3 Camp. 534 ; Wilkinson v. Candlish, 5 Ex. 01, 05 ; Vin. Abr. Scrivener. s Sadler v. Lee, 0 Beav. 324, 330, distinguishing Marsh v. Keating, 8 Bli. (H. L.) 051, and approved Moore v. Knight, [1801] I Ch. 547; Partnership Act, 1800 (53 & 54 Viet. c. 39), s. 1 1. » L. R. 5 Eq. 187 ; L. R. 3 Ch. 046. >9 This appears more clearly in the report of the ease on appeal, E. R. 3 Ch. 040. SOLICITORS. 1107 CHAP. TIT.] A solicitor’s liability in this relation is that of any other agent similarly employed ; 1 although the circumstances of his employment may affect him with all the liability of a trustee. 2 As if he is engaged in any matter wherein his own personal interests are so in- volved that the right inference from the facts of the transaction is that he is acting, not as solicitor or agent alone, but as one who, being a solicitor, is taking advantage of his position to ’acquire a benefit for himself, though his doing so may hazard the trust, then the character of trustee will be imputed to him. 3 Short of this a solicitor is not constituted a trustee de son tort, even though he act in trust matters in an unfortunate way. 4 The solicitor for the lender not infrequently also acts for the Solicitor borrower. Where this is the case a duty of great delicacy is cast upon bothfender the solicitor. The double relation may be constituted not merely by anc i borrower, actual retainer, but by inference from conduct. In this latter case the decision is for a jury. Yet whatever the means of constituting the relation — whether by actual agreement or by implication — when it is constituted the agent is responsible to either of the parties who may suffer from his negligence in preparing the security. 5 Where the solicitor acts for the borrower his duty is the converse of that where he acts for the lender. (4) In Partnership matters. ( 4 ) Partner- In drawing up partnership deeds and advising on matters arising sln 11 01 s ‘ out of partnership transactions, the same duty is owing as in matters we the contract of guarantee or indemnity is in writing, 6 and if not under seal is for a lawful consideration. 7 (6) In arrangements between Debtor and Creditor. (6) Debtor These may be either under ordinary retainers, when the principles and c,C(lltor - regulating work done under retainer apply ; or under arrangements between debtors and the general body of their creditors, when the provisions of the Bankruptcy Act define what are the duties of solicitors. 8 (7) In matters Matrimonial and Testamentary. (7) Matters Shortly, it may be said that the extreme confidence bestowed in these matters imposes a greater obligation of care and circumspection me ntary. on the solicitor, though there seems no difference of principle involved from those relations we have already considered. In the course of any or all of these relations the solicitor may have Custody of the custody of his client’s deeds. Since he is bound by his position client ’ s ) Principal In addition to the duties before set out, the solicitor must see that an Surety. 1 Donaldson x. Haldane, 7 Cl. & F. 762 ; llayne x. Rhodes, 8 Q. B. 342. 2 Dartnell x. Howard, 4 B. & C. 345 ; Craig x. Watson, 8 Beav. 427 3 Fyler x. Fyler, 3 Beav. 550. * Marax. Browne, [1806] 1 Ch. 199. s Lang v. StnUhers, 2 Wils. & Shaw. (H. L. Sc.) 563 ; Robertson x. Fleming, 4 Macq. (H. L. Sc.) 167. e 29 Car. II. c. 3, s. 4 ; 19 & 20 Viet. c. 97, s. 3. 2 Goodman x. Chase, 1 B. & Aid. 297. s 46 & 47 Viet. c. 52. In Luddy's Trustee x. Peard, 33 Ch. D. 500, it is laid down “ that the obligations on a solicitor dealing with his client extend to the case of a dealing between a solicitor and the trustee in bankruptcy of his client.” For the law where a former confidential legal adviser bought up charges on his former employer’s estate, see Carter x. Palmer, 8 Cl. & F., per Lord Cottenham, 705 NEGLIGENCE IN LAW. 1198 [book VI- Solicitor making client’s will in his own favour. Lord Cairns’s statement of the law. Property of client held by solicitor. Bills of sale the relation of solicitor and client, and may be referred to its proper head of the general law of bailments. 1 If a solicitor, or indeed if any person, prepares a will containing a legacy to himself, the law looks on it as a suspicious circumstance, of more or less weight according to the facts of each particular case, and as demanding the vigilant care of the Court to investigate and calling upon it not to grant probate without full satisfaction that the instrument did express the real intentions of the deceased. 2 “ An attorney,” says Lord Cairns, 3 “ is not affected by the absolute disability to purchase which attaches to a trustee. But for manifest reasons, if he becomes the buyer of his client’s property, he does so at his peril. He must be prepared to show that he has acted with the completest faithfulness and fairness ; that his advice has been free from all taint of self-interest, that he has not misrepresented any- thing, or concealed anything, that he has given an adequate price, and that his client has had the advantage of the best professional assistance which, if he had been engaged in a transaction with a third party, he could possibly have afforded. And although all these conditions have been fulfilled, though there has been the fullest in- formation, the most disinterested counsel and the fairest price, if the purchase be made covertly in the name of another, without com- munication of the fact to the vendor, the law condemns and invalidates it utterly. There must be uberrima fides between the attorney and the client, and no conflict of duty and interest can be allowed to exist.” 4 Property of a client held by a solicitor as trustee does not vest in the solicitor’s trustee in bankruptcy, 5 and is not within the reputed owner- ship clause. 6 A solicitor must not mix it with his own property, though in any case it can be followed by the client so long as it can be traced. 7 Moreover, it appears settled that where a solicitor has had money from his client for the purpose of investing on a mortgage of specified pro- perty, and has taken the security in his own name, he will be held to be a trustee of the security for his client to the extent of the sum received from him even though the solicitor may have made a deposit of the title-deeds with his banker or other person ; 8 and the client is not guilty of negligence in omitting to get his title-deeds from his solicitor who afterwards is found to have dealt with them on his own account. 9 1 With regard to bills of sale, the duties of solicitors are prescribed by the Bills of Sale Acts. 10 It has been laid down 11 that a solicitor, who stated in the attestation 1 Reeve v. Palmer , 5 C. B. N. S. 84 ; Wilmot v. Elkington, 2 L. J. (N. S.) K. B. 103 ; Wilkinson v. Verity, L R. G C. P. 206. Ante, 740 et seqq. Where a solicitor deposits deeds without his client’s knowledge as security for an advance to the client, he is liable for having mislaid them, and must deliver them up in a reasonable condition for use : N. 11". Ry. Co. v. Sharp, 10 Ex. 451 ; the papers of the client must be delivered up, but not letters written by the client to the solicitor : In re Thomson, 20 Beav. 545. 2 Barry v. Butlin, 2 Moo. P. C. C. 480 ; Fulton v. Andrew, L. R. 7 H. L. 448. 3 McPherson v. Walt, 3 App. Cas. 2GG. -4 See also per Blackburn, J., l.c, at 270. 6 46 & 47 Viet. c. 52, s. 44, sub-s. 1. o Sub-s. 2 (iii.). 7 Dickson v. Murray, 31 Sol. Jour. 493. s Ilarpham v. Shaddock, 19 Ch. D. 207; op. what is said by Lord Herschell, Taylor v. Russell, [ 1892] A. C. 253 ; In re Richards, 45 Ch. P. 589. 9 In re Vernon, Ewens, <£• Co., 33 Ch. D. 402 ; Taylor v. London and County Banking Co., [1901] 2 Ch. 231,261. 10 41 & 42 Viet. c. 31, s. 10 ; 45 & 46 Viet. c. 43. As to inadvertence in renewing registration of a bill of sale, In rc Parsons, Ex parte Furher, [ 1893] 2 Q. B. 122. 11 Ex parte National Mercantile Bank, In re Haynes, 15 Ch. 1)., per James. L.J., 52. As to how this duty should be performed, see per Hannon, J., Morrell v. Morrell, CP. 1). 70 SOLICITORS. 1199 CHAP. III.] clause to a bill of sale that lie had explained the effect of the bill to the grantor when he had not done so, was liable both to an action by his client and also to penal proceedings. Where a solicitor took a charge from a company for his costs, which charge was not registered, the Court of Appeal affirmed the Master of the Rolls in holding that the solicitor could not take advantage of the charge, as it was his duty to see that the register was properly kept . 1 The personal liability of a solicitor to third persons is summarised by Lord Abinger, C.B. : 2 “ The attorney is known merely as the agent — the attorney of the principal, and is directed by the principal himself. The agent, acting for and on the part of the principal, does not bind himself, unless he offers to do so by express words ; he does not make himself liable for anything, unless it is for those charges which he is himself bound to pay, and for which he makes a charge.” 3 Further, the general rule is, that there is no privity between the agent in town and the client in the country ; the former cannot main- tain an action against the latter for his fees, nor the latter against the former for negligence. Something therefore is necessary beyond the mere relation of the parties to each other to make the agent in town liable to the client . 4 The town agent has been indeed held liable to account to the country client for money he had received ; 5 but there the money was received in the course of the suit from the opposite party ; and since it could not be said that the agent received it to the use of the country attorney, and as clearly it was not received on the agent’s own account, of necessity it was treated as held toAhe use of the client . 6 A solicitor can be allowed to do no act in the absence of his client, and without his consent, by which he may derive an advantage at the expense of his client ; 7 and though no doubt a principal may ratify or adopt the act of his agent — for it is to the rules governing the relation- ship between principal and agent that the determination of this point is to be referred — in purchasing that which such agent has been em- ployed to sell, or in taking to himself any other advantage from pro- perty he has to deal with ; yet “ before the principal can properly be said to have ratified or adopted the act of his agent or waived his right of complaint in respect of such acts, it should be shown that he has had full knowledge of its nature and circumstances, in other words, that he has had presented to his mind proper materials upon which to exercise his power of election, and it by no means follows that because ” “ he does not repudiate the whole transaction after it has been com- pleted, he has lost a right actually vested in him to the profits derived by his agent from it.” 8 Personal liability to third person. Agent in town and cdient in the country. Solicitor may not derive an advantage at the expense of his client out of his client’s business. 1 In re Patent Bread Machine Co., Ex parte Valpy and Chaplin, L. R. 7 Ch. 289. 2 Robins v. Bridge, 3 M. & W. 114, 119. 3 See Parrot v. Wells, (1689) 2 Vera. 127, agreement binding on scrivener but not on his client; Saxon v. Blake, 29 Beav. 438 ; Clark v. Lord Rivers, L. R. 5 Eq. 91. j * Cobb v. Becke, 6 Q. B. 930, 935. 3 Moody v. Spencer, 2 Dow. & Ry. 6. « As to solicitor’s lien generally. In re Taylor, Stileman v. Underwood, [1891) 1 Ch. D. 590. As to solicitor’s lien on deeds of his client, see the judgment of Lord Chancellor Sugden, Blundenv. Desart, 2 Con. & Law. (Ir. Ch.) 111. 120. 7 Stockton v. Ford, 11 How. (U. S.) 232, 247. See Marsh v. Whitmore, 21 Wall. (U. S.) 178, for what constitutes ratification, s DeBusschev. Alt, 8 Ch. D. 313. Roman practice. Fees limited at Rome. 1200 NEGLIGENCE IN LAW. [book vi. Barristers. The duty of a barrister to his client may conveniently be noticed in this place, and in connection with the duties of solicitors ; though a barrister is not, like a solicitor, an officer of the Court. The relation between barrister and client in England is an imitation of the practice followed at Rome . 1 For a considerable period of Roman history the conduct of suits was monopolised by the patricians, whose services were at first altogether gratuitous, or rather were requited ex- clusively by political support. The patron is described as walking in the forum for the convenience of suitors, who addressed him with licet consulere, quaere an existimes ; id jus est necne ; and on getting the reply, consule, put the case, and were answered in the formula, Secundum ea quae proponuntur , existimo, placet, puto. When the connection between client and patron ceased, and the patron had no longer a claim on the services of the client, the practice arose of bringing an honorarium in lieu of a payment by support and services. Throughout the whole growth of the civil law, from the foundation of Rome to the time of the Digest of Justinian, not only was the advocate always under legal incapacity to make a contract for his remuneration, but also, throughout a part of that time, he was prohibited from receiving any gain for his services . 2 Though the advocate received no money for his assistance in the earliest times, yet in a later stage of the history of the city such extrava- gant sums were given him that they occasioned the enacting of the 1 For an historical sketch of the office and functions of the advocate, see Forsyth, Hortensius, 94. Smith, Dictionary of Greek and Roman Antiquities (3rd ed.), arts. “ Advocati ” and “ Jurisconsulti.” Colquhoun, Roman Civil Law, §§ 499, 500, 2009, 2209. Domat, Public Law, Bk. 2, tit. 6, sec. 2, treats of the duties of advocates. To art. 5 (Strahan’s ed.) there is a copious citation of authorities for the proposition that advocates “ should embrace their functions upon other views than that of gain.” The rights and duties of an advocate of the French bar are treated, Jones, History of the French Bar, 177. There is a note to Horne Tooke's case, 20 How. St. Tr. 087, on the powers of the Inns of Court to call to the bar, and also the proceedings of the benchers of the Inner Temple on Tooke’s claim to a call to the bar by that society. The ground of his rejection was that he was in priest’s orders. See further, Lettres sur la Profession d’Avocat, par Camus ; Profession d’Avocat, par Dupin ; and Histoire du Barreau de Paris depuis son Origine jusqu’a 1830, par Gaudry ; Savigny, History of the Roman Law during the Middle Ages (Cathcart’s translation), c. 6, State of Law Education during the Early Part of the Middle Ages. 2 Per Erie, C.J., Kennedy v. Broun, 13 C. B. N. S. 677, 732. The tone of Roman sentiment may be illustrated by a quotation from Ovid, Amor.es, Bk. 1, Elegia x. : Ad puellam, ne pro amore preemia poscat ; he regards the accepting money for advocacy as a like baseness : Turpe, reos empla miseros defendere lingua ; Quod faciat magnas, turpe, tribunal opes. An cl philosophi professorum numero sint ? Et non putem ; non, quia non religiosa res est ; sed quia hoc prirnum profiteri eos oportet, mercenariam operam spcrnerc. Proinde ne juris quidern civilis professoribus jus dicent ; est quidem res sanctissima civilis sapienlia ; sed quee pretio nmnmario non sit cestimanda nec dchoncstanda, dum in judicio honor petitur qui in ingressu sacramenti efferri debuit. Qucedam enimlamctsi honesle accipiuntur inhoneste tamen peluntur : I). 50, 13, 1, §§ 4, 5. Among the Greeks the same feeling was very strong, Xenoph. Memor. 1, 6, 13. Plato thought it un- worthy of a virtuous man to accept a salary for the discharge of any public duty, Itepub. i. 347. Sec, too, Gorgias, 347, Sophistes, 223. 224, 225, 226, 231 ; Symp. 181. 185; Tlieset. 165. The references to Plato are to Stallbaum’s edition. The history of the honorarium is given by M. Grellet-Dumazeau in his work Le Barreau Romain, 97, Des Honoraires ; also by Forsyth, Hortensius, c. 9, The Honorarium. Dante says that a lawyer, like a physician and most of the religious, cannot be a true philosopher when he loves wisdom not for herself, but for gain : 11 Convito, iii. II. A nte, 764 n. *. SOLICITORS. 1201 CHAP. III.] Lex Cincia de donis et muneribus ne quis ea ob causam orandam peteret , a.u.c. 550. 1 The prohibition of this law having fallen into neglect, was revived by Augustus, 2 with an additional clause by which the advocate who pleaded for hire was condemned to pay four times the sum he was to receive. 3 Later on, the Emperor Claudius relaxed this severity, and by a decree fixed the maximum which an advocate might lawfully receive by way of gift at £80, making him liable to refund if he took more. 4 Dr. Wharton 5 points out that the honorarium could be recovered In what through a cognitio extraordinaria of the Presses. Erie, C.J., 6 objects to this, that the sections of the Digest 7 vouched for this view prove no „° as recove[ . more than that an advocate could be made to refund so much of a fee able, already paid as exceeded the legitimate amount under the decrees of the Emperor Claudius ; further, he indicates how this amount was to be ascertained ; and draws a distinction between a promise of remunera- tion during the pendency of litigation which does not bind, and a security given after the suit is at an end, which is enforceable, if, that is, it do not exceed the legitimate amount. In the Middle Ages, by the reduction of legal proceedings to writing, Practice in the ancient methods were superseded in the heart of the empire ; oral tlie Middle proceedings, however, seem to have been retained in what were the A§es ‘ barbarous provinces ; so that the practice of the law in England in the Middle Ages came nearer the procedure of ancient Rome than that in use in Rome itself. 8 1 Smith, Dictionary of Greek and Roman Antiquities (3rd ed.), art. 11 Lex Cincia.” 2 a.u.c. 732. 3 Murphy, Tacitus, Annal. xi. e. 5, note. Mullaque arbitrio senatus constiluta sunt : Ne quis ad causam orandam mercede aut donis emeretur (Tacitus, Annal. xiii. o. 5). * Capiendis pecuniis posuit modum usque ad dena sestertia, quem egressi repetun- darum tenerenlur (Tacitus, Annal. xi. 7). Tacitus gives the arguments used on both sides in the debate before Claudius, which resulted in this limited liberty being allowed. Annal. xi. 5, 6, 7. In the Code (C. 3, 1, 14, § 1) the duties of the counsel are thus indicated : Patroni autern causarum qui utrique parti suum proestantes auxilium ingrediuntur, quurn lis fuerit conteslata, post narralionem proepositam et contradic- tionem objectam . . . sacrosanctis evangeliis tactis juramentum pratslent, quod ornni quidem virlute sua omnique ope, quod verum et justum existimaverint, clientibus suis inferre procurabunt ; nihil studii relinquentes quod sibi possibile est ; non aulem, credila sibi causa cognita, quod improba sit, vel penitus desperata et ex mendacibus allegationibus composita, ipsi scientes prudentesque mala conscientia liti patrocina- buntur, sed et si certamine procedente aliquid tale sibi cognitum fuerit, a causa recedent ab hujusmodi communione sese penitus separantes. See also D. 19, 2, 38, § 1 : Advocati quoque si per eos non steterit quominus causam agant, honoraria reddere non debent. With this compare Turnery. Phillips, Peake (N. P.), 122, 123. A well-known passage on the relations between counsel and client is found in Cicero’s oration, Pro Roscio Amerino, c. 11. See also De Oratore, 1, 45. The English theory was eloquently expressed by Cockburn, C.J., at the bar dinner in the Middle Temple Hall to M. Berryer, reported in the Times newspaper, 9th November 1864 : “ The arms which an advocate wields he ought to use as a warrior and not as an assassin. He ought to uphold the interests of his clients per fas but not per nefas. He ought to know how to reconcile the interests of his clients with the eternal interests of truth and justice.” There is “ A Preface Dedicatorie ” to Sir John Davys’s Reports well worth referring to on the same subject. See also an article in Edin. Rev. vol. lxiv. 155, Rights and Duties of Advocates ; one in Lond. and Westm. Rev. vol. xxxv. Licence of Counsel ; and No. 303, Law Magazine (Feb. 1897), The Right of Counsel to bo Instructed by Lay Clients, which refers at length to Doe d. Bennett v. Hale, 15 Q. B. 171, deciding that there is no rule of law requiring that counsel appearing in Court for a party who pleads in person, should be instructed by an attorney. s Negligence, §§ 486, 719. 6 Kennedy v. Broun, 13 C. B. N. S. 735. It is noteworthy that in Mr. Kennedy’s argument in this case, D. 50, 13, 4, is not cited : Divus Antoninus Pius rescripsit ; juris studiosos, qui solaria petant, hcec exigere posse. See the explanation of this text in Moyle, Introduction to Justinian, Institutes (2nd ed.), 60. 7 D. 50, 13, 1, §§ 10, 12. s Colquhoun, Roman Civil Law, § 501. Erie, C.J.’s statcmenl not accurate. 1202 negligence in law. [book vi. In English law, according to Erie, C.J., there does not seem any trace of the limit imposed by the decree of the Emperor Claudius ; and he adds that in all the records of our law from the earliest time till now there is no trace that an advocate has ever maintained a suit against his client for his fees in litigation, or a client against an advocate for breach of a contract to advocate. 1 But this is considerably overstating the facts. For instance, in Y. B. 14 H. VI. 18, pi. 58, Paston, J., says, addressing counsel before him, and with the concurrence of Juyn, C. J., “ if you, who are sergeant at law, undertake my cause and do nothing, or conduct it in such a manner that I have cause to charge you with losing it, I have an action on the case against you.” Again, Reeves cites Prisot, C. J., in Y. B. 37 H. VI. 8, pi. 18 ; “ if a person were retained to be counsel for a certain sum, he might have an action for the money though the other might have had no advice from him ” ; 2 and this statement is repeated in Comyns’s Digest as if it were law. 3 In 5 Car. I., however, there is the following : “ The plaintiff being a counsellor at law, brought his bill for fees due to him from the defendant, being a solicitor, and was to account with him at the end of every term. The defendant demurs. This Court allowed demurrer nisi causa. Demurrer affirmed, and the bill dismissed.” 4 Theory of The theory of the English law seems rather to be that it is of ad- kw EngllSh van t a ge f° r counsel to be paid “ those emoluments, which produce integrity and independence ” ; 5 but that counsel should be rendered independent of the event of the cause, in order that no temptation may induce them to endeavour to get a verdict, which in their consciences they think they are not entitled to. Counsel should be rendered as independent as the judge or jury who try the cause, when called upon to do their duty.” 6 That this admirable provision of the law was not 1 Kennedy v. Broun, 13 C. B. N. S. 727 ; 3 Bl. Comm. 28, and the note in Christian’s edition. 2 Reeves, Hist, of the Eng. Law (2nded.), vol. iii.372 ; see also 404, where Y. B. 21 H. IV. pi. 6, is referred to. But queere does the passage cited, quite bear out the meaning put on it ? 3 Dett. (A 8). See also a note to Fitzherbert, De Nalura Brevinm, Trespass sur le Case, 94 E., note, citing Y. B. 11 H. VI. 24, 55. There is an Irish case, Hobart v. Butler ( 1859), 9 Ir. C. L. R. 157, holding that fees are recoverable by express contract. It was seriously doubted in The Queen v. Doutre, 9 App. Cas. 745, 751, whether Kennedy v. Broun was an authority in English colonies, where a lawyer is “ not a mere advocate or pleader,” but “ who combines in his own person the various functions which are exercised by legal practitioners of every class in England.” In that case the Judicial Committee was L ' not prepared to accept all the reasons which were assigned for that decision in the judgment of Erie, C. J.” See also Vin. Abr. Counsellor. 4 Moor contra Row, 1 Rep. in Chancery, 21. In America the different position of an “ attorney at law ” from that of a barrister in England has occasioned the adoption of a rule admitting the legal enforceability of agreements to prosecute a claim, either at a fixed compensation or for a reasonable percentage upon the amount recovered : Wright v. Tebbitts, 91 U. S. ( 1 Otto) 252. Sec the account of the practice as to counsel’s fees by Bradley, J., In re Paschal, 10 Wall. (U. S.) 494. Cp. Trist v. Child, 21 Wall. (U. S.) 441 ; Stanton v. Embrey, 93 U. S. (3 Otto), 548 ; Mooney v. Lloyd, 5 Ser. & Rawle (Pa.), 412. 5 Morris v. Hunt, 1 Chit. (K. B.) 544, per Bayley, J., 551. The learned judge adds : “ It is their duty to take care, if they have fees, that they have them beforehand.” e Per Best, J., l.c. 554. Cp. some declamation by Erie, C.J., Kennedy v. Broun, 13 C. B. N. S. 738, beginning, “ Such is the system.” The considerations arising from the employment being one into which tact and judgment so largely enter, that it could not be submitted to the test of an action at la w without destroying its character, seems so obvious and commonplace as not to require or merit treatment in a style of stilted rhetoric that only obscures their import. See an anecdote in Lord Campbell’s Life of Lord Eldon, Lives of the Chancellors, vol. vii. 52 : “I was counsel for a highwayman,” &c. SOLICITORS. 1203 CHAP. III.] altogether at all times effectual for its object, may be concluded from the necessity of the Statute of Westminster the First, c. 29, and from Sir Edward Coke’s comments upon it. 1 Distinction A distinction has, however, been drawn between undertakings ^^takin^s concerning advocacy in litigation 2 and contracts in cases unconnected concerning 0 with advocacy. These latter are not regarded as within the rule dis- advocacy in entitling counsel to sue in respect of contracts made regarding them ; 3 ^cts Tn^ consequently the ordinary rules as to liability for negligence apply, cases uncon- As to the former, there is an absolute incapacity to make a contract nected with of hiring as an advocate ; 4 for it is of the essence of the employment of a Cp. United Society of Shakers v. Underwood, 9 Bush (Ky.), 60S). United States Digest, 1875, Banking, 25, where, says Dr. Bigelow, L. C. on Torts, 618. “ I lie I'lnglish rule has been virtually rejected,” (i Negligence, jj 510. 7 5 Q. B. D. 528. PARTNERSHIP. 1215 CHAP. I.] Here again there recurs the almost inextricable confusion wrought Comment, in the endeavour to discriminate degrees of negligence. Taking the division of the civil law of negligence into culpa lata and culpa levis, and adopting the view that this division corresponds with the distinction between the lack of diligence of an ordinary person and the lack of diligence of an expert, another ground of confusion suggests itself. Lack of diligence by an expert is not measured by the same standard in all cases. The test of accountability varies with the particular pretensions advanced. This we have already seen in the case of medical men and solicitors . 1 To discriminate the larger from the lesser degree of accountability, the term crassa negligentia (dis- regarding its possible ambiguity) may be applied to signify the neglect of a person of ordinary prudence and skill as distinguished from that other degree of negligence which affixes liability where the exercise of a special skill is undertaken . 2 Admitting this distinction, a director is liable if he do that which Distinction a man of o not liable il reasonable, even if not a high, degree of skill . 3 As Lord Hatherlev, C., the liability states the law in Land Company of Ireland v. Lord Fermoy : i “ What- of a trustee, ever may be the case with a trustee, a director cannot be held liable for being defrauded; to do so would make his position intolerable.” In In re Railway and General Light Improvement Co., Marzetti’s MarzetU’s case , 5 both before the Master of the Rolls and in the Court of Appeal, case - these principles are accepted. “It is said,” said Jessel, M.R ., 6 “ he Judgment of [a director who authorised a payment without inquiry, which proved J° ssel > M R > to be one incurred in fraudulently raising the price of the company’s shares in the market] is not liable, because he is an honest man. I have heard nothing against him to show that there was more than negligence or carelessness on his part, but still he is liable. He is not to pay away other people’s money without knowing what he pays it for. If he does, he must take the consequences.” 7 In the Court of and of James Appeal, James, L. J., said : 8 “ A director should not be held liable upon ^• J ' , t i ^ { the any very strict rules, such as those, in my opinion, too strict rules Appeal, which were laid down by the Court of Chancery to make unfortunate trustees liable ; directors are not to be made liable on those strict rules which have been applied to trustees. But they must show something like reasonable diligence. It would be impossible that any man managing his own affairs would make such a payment as this with- out any real or effective inquiry.” The purpose oi this is plainly con- fined to those cases where directors are acting as agents for the company and in their relation to the company in their capacity of agents . 9 i Ante, 1156 and 1182. 2 Ante, 36. 3 Hodges y. New England Screw Co., 1 R. I. 312, cited Bigelow, L. 0. on Torts, 619; 3 R. I. 9. See Dodge v. Wool ■leg. 18 How. (U. S.) 331, 343. For powers of directors. Thompson, Corporations, § 3967 et seqq. ; for liabilities, id. § 4090 etseqq. 4 L. R. 5 Ch. 772. s 42 L. T. 206, 28 W. R. 541. See Sheffield and South Yorkshire Permanent Building Society v. Aizlewood, 44 Ch. D. 412, 453. Under the Companies (Winding-up) Act, 1890 (53 & 54 Viet. c. 63), s. 10, in In re New Mashonaland Exploration Co., [1892] 3 Ch. 585, Williams, J., says : “ In order to make the directors liable, you must be able to deny that they did really exercise their judgment and discretion ” as agents of the company. « 42 L, T. 208. 7 Cp. Joint Stock Discount Co. v. Brown, L. R. 8 Ecp 381 ; In re Liverpool House- hold Stores Association, 59 L. J. Ch. 616. 8 28 W. R. 542. » Meux's Executors’ case, 2 De G. M. & G. 522, distinguished litre Dcvcda Provident Gold Mining Co., 22 Ch. D. 593. rdinary prudence in his own affairs would not do ; he is between the i he acts in good faith, and with proper care, and tvith a *}? 1216 NEGLIGENCE IN LAW. [book vit. Lagunas Nitrate Co. v. Lagunas Syndicate. Dovey v. Cory. In Lagunas Nitrate Co. v. Lagunas Syndicate, Lindley, M.R ., 1 says : “ If directors act within their powers, if they act with such care as is reasonably to be expected from them, having regard to their knowledge and experience, and if they act honestly for the benefit of the company they represent, they discharge both their equitable as well as their legal duty to the company.” “ The amount of care to be taken is difficult to define ; but it is plain that directors are not liable for all the mistakes they make, although if they had taken more care they might have avoided them.” “ Their negligence must be, not the omission to take all possible care ; it must be more blamable than that : it must be in a business sense culpable or gross.” The immunity of directors was expressed in even more liberal terms in the House of Lords in Dovey v Cory , 2 where a director was held not liable to replace money which had been made away with through his assenting to payments advised by the chairman and general manager of the company ; but which statements were misleading and fraudulent. Lord Halsbury says : 3 “ I cannot think that it can be expected of a director that he should be watching either the inferior officers of the bank or verifying the calculations of the auditors himself. The business of life could not go on if people could not trust those who are put into a position of trust for the express purpose of attending to details of management. If Mr. Cory was deceived by his own officers — and the theory of his being free from moral fraud assumes under the circumstances that Knowledge required from a director. In rc Forest of Dean Coal Mining Co. lie was — there appears to me to be no case against him at all.” Jessel, M.R., in Hallmark's case 4 had previously laid down the law to the same effect. “ Is knowledge to be imputed to him (a director) under any rule of la vv ? Asa matter of fact, no one can suppose that a director of a company knows everything which is entered in the books, and I see no reason why knowledge should be imputed to him which he does not possess in fact. Why should it be his duty to look into the list of shareholders ? I know no case except Ex parte Brown 5 which shows that it is the duty of a director to look at the entries in any of the books ; and it would be extending the doctrine of constructive notice far beyond that or any other case to impute to this director the knowledge which it is sought to impute to him in this case ” — i.e., knowledge of the books of the company. The same judge in In re Forest of Dean Coal Mining Co/' had given the caution : “ One must be very careful iti administering the law of joint- stock companies not to press so hardly on honest directors as to make them liable for these constructive defaults, the only effect of which would be to deter all men of any property, and perhaps all men who have any character to lose, from becoming directors of companies at all.” He formulates the principle thus : Directors “ are bound no doubt to use reasonable diligence having regard to their position, though probably an ordinary director who only attends at the board occasion- ally, cannot be expected to devote as much time and attention to the business as the sole managing partner of an ordinary partnership, but they are bound to use fair and reasonable diligence in the management i [1899] 2 Ch. 435. 2 [1901] A. C. 477. 3 Lx. 486. 1 9 Ch. I). 332. s 19 Beav. 97. See In re Denham, 25 Ch. D. 752, whore Oliitty, J., discusses the effect of the issue of documents by directors to shareholders and to the public respectively. u 10 Ch. D. 451. In re Lands Allotment Co., [1894 1 l t Ch. 616, 638. PARTNERSHIP. 1217 CHAP. I.] of their company’s affairs and to act honestly.” 1 Directors are called trustees. They are no doubt trustees of assets which have come into their hands or which are under their control, but they are not trustees of a debt due to the company : ” 2 nor for individual shareholders . 3 Harlan, J., in a banking case in the Supreme Court of the United Rule of duty States, expresses the rule of duty as follows : 4 “ Directors cannot, in y a s r t ]'^ d j bj 1 " u justice to those who deal with the bank, shut their eyes to what is going ’ * on around them. It is their duty to use ordinary diligence in ascertain- Webb. ing the condition of its business, and to exercise reasonable control and supervision of its officers. They have something more to do than, from time to time, to elect the officers of the bank and make declarations of dividends. That which they ought, by proper diligence, to have known as to the general course of business in the bank, they may be presumed to have known in any contest between the corporation and those who are justified by the circumstances in dealing with its officers upon the basis of that course of business.” This statement is not perspicuous. Such terms as “ ordinary diligence,” “ reason- able control,” and “ proper diligence ” point to fruitful sources of ambiguity. They may perhaps be reduced to the requirement of the diligence of a good average business man, not in the exercise of specialty knowledge . 5 In the subsequent case of Briggs v. Spaulding 6 the Supreme Court Briggs v. of the United States was divided five against four, as to the elements Spaulding. required to constitute negligence in a director. The judgment of the majority, which is in accord with the English rule, is thus stated : 7 “ The degree of care to which these defendants were bound is that which ordinarily prudent and diligent men would exercise under similar circumstances, and in determining that the restrictions of the statute and the usages of business should be taken into account. What may be negligence in one case may not be want of ordinary care in another, and the question of negligence is, therefore, ultimately a question of fact, to be determined under all the circumstances.” Therefore, if a director is ill, it is in the power of the others to give him leave of absence instead of requiring him to resign, and if frauds are committed during his absence he is not responsible. There was, however, a dissentient opinion by four of the judges, the contention of which was that directors may not “ abdicate their functions and leave its (their company’s) management and the administration of its affairs entirely to executive officers.” 8 In the subsequent case of Swentzel v. Penn Bank 9 a bank director SwaUzd v. was said to be “ a gratuitous mandatory ” and “ only liable for fraud or Penn Bank. such gross negligence as amounts to fraud.” These expressions are incorrect if they be regarded as postulating actual fraud or asserting a merely gratuitous undertaking. The duty the bank director under- takes is for the mutual benefit of himself and the shareholders ; the standard of his duty is that of “ ordinary diligence ” : the care which a business man of the average skill, care and honesty of his class (“ fair and reasonable diligence”), and in the circumstances, is wont to give 1 Lx. 452. 2 Lx. 453. 3 In re Kennard, Kennard v. Collins, 1 1 Times L. R. 283 ; Perciva’ v. Wright, [1902] 2 Ch. 421. 4 Martin v. Webb, 110U. S. (3 Davis), 1, 15. s In Savings Bank of Louisville v. Caperton, 12 Am. St. R. 488, the liability of bank directors for the defalcations of a cashier was considered. 6 141 U. S. (34 Davis) 132 ; see also North Hudson Mutual Building and Loan Association v. Childs, 33 Am. St. R. 57. 7 141 U. S. (34 Davis) 152. 8 See per Harlan, J., 169. a 30 Am. St. R. 718. J 218 NEGLIGENCE IN LAW. BOOK VII. Overend, Gurney <1- Co. v. Gurney. Imprudent exercise of directors’ powers. Judgment of Lord H ather- ley, C. Lord Chelms- ford’s opinion in the House of Lords. Turquand v. Marshall. to the same kind of business, but where only a portion of his attention or skill is contemplated as due . 1 In Overend, Gurney & Co. v. Gurney 2 an effort was made to charge directors where they had full power to do all they had done, but where acting as agents of the company they had misconducted themselves in purchasing that which it was unwise and im- prudent of them to purchase. The business in which they were concerned was “ a hazardous business — a business entirely dependent on the prudence and dexterity of those who manage it.” 3 “I think,” said Lord Hatherley, C ., 4 “ that the shareholders must take the con- sequences of the manner in which their business was conducted by those whom they have trusted to act as their agents. If the question were simply whether they had or had not made a bad or imprudent bargain, that is not a question that could be dealt with in this Court as involving a breach of trust ; or, if it were, whether they had failed to secure a good bargain for persons who intrusted the moneys to them for that purpose, that is not the case we have here. The company must take the consequences of having intrusted their moneys to persons of sanguine temperament, who have made a purchase which turns out to be a bad one ; but I do not find enough in this case to show me that it is so ridiculous or absurd, or that there has been such crassa negligentia, amounting to fraud, as to induce me to hold that the gentleman whose executors are now sought to be impeached had made himself responsible for a breach of trust for which I can hold them liable.” The Lord Chancellor’s judgment was affirmed by the House of Lords , 5 where Lord Chelmsford, speaking of the ac- quisition of the business by the directors, which was the ground of the suit against them, said : 6 “ They did it, it is admitted, honestly and fairly, and believing that they were doing it in the discharge of their duty, and it seems to me a very strong and unusual thing for a suit to be now instituted to make the directors liable for the loss which has occurred under these circumstances. In fact it amounts to this : an agent (because these directors are really more in the character of agents than of trustees, they are mandatories), an agent being authorised to do an act, which act is in itself an imprudent one, and which the principal ought never to have authorised to be done, is, when the loss is occasioned by his having done the act, to be made liable for it. That certainly is rather a startling proposition.” In Turquand v. Marshall 7 directors made a loan to one of their brother directors, an act which was within the powers of the company’s deed. The money was lost ; and it was held that the Court could not interfere and make the directors liable. Lord Hatherley, C., states the principle applicable as follows : 8 “ They [the directors] were 1 Dovey v. Cory, [1901] A. C. 477, 485; Marzetti's case, 28 W. R. 541. 543; In re Forest of Dean Coal Mining Co., 10 Ch. 1)., per Jessel, M.R., 452. Ante, 40, 1210. 2 L. R. 4 Ch. 701. As to acts ultra vires see Cullerne v. London and Suburban General Permanent Building Society, 25 Q. B. D. 485 ; Young v. Naval Military and Civil Service Co-operative Society of South Africa, [1905] 1 K. B. 087 directors not entitled to (ravelling expenses from the company. By tho Building Societies Act, 1874 (37 & 38 Viet. c. 42), s. 43 : “ If any society under this Act receives loans or deposits in excess of the limits prescribed by this Act, the directors or committee of management of such society receiving such loans or deposits on its behalf shall bo personally liable for the amount so received in excess.” For the scope of this section see Cross v. Fisher, [1892] 1 Q. B. 407. A similar provision is made in sec. 13, sub- sec. 3 of the Building Societies Act, 1894 (57 & 58 Viet. c. 47). A criminal remedy is given by sec. 15 (2). 3 L. R. 4 Ch. 716. 1 L.c. 720. & L. R. 5 H. L. 480. « Lx. 501. t L. R. 4 Ch. 376. « L.c. 380. PARTNERSHIP. 1210 CHAP. I-] intrusted with full powers of lending the money, and it was part of the business of the concern to trust people with money, and their trusting to an undue extent was not a matter with which they could be fixed, unless there was something more alleged, as, for instance, that it was done fraudulently and improperly, and not merely by a default of judgment. Whatever may have been the amount lent to anybody, however ridiculous and absurd their conduct may seem, it was the misfortune of the company that they chose such unwise directors ; but as long as they kept within the powers of their deed, the Court could not interfere with the discretion exercised by them. If a Bill had been filed to stop their lending money in this way, the Court, on the principle of the case of Foss v Harbottle, 1 could not have interfered on that ground.” In London Financial Association v. Kelk , 2 Bacon, Y.C., says : “ Among the multitudinous cases which have been cited in support of the plaintiffs’ contention ” “ there is not one, so far as I know, in which directors of a joint-stock company have been held to be answerable for losses sustained by their mere innocent mistake, nor unless that mis- take has been accompanied by some fraudulent or at least suspicious conduct or motive.” Honest mistake imposes no liability if it falls short of that want of care which in a business man is gross or culpable. The distinction between the duties of directors as managers of a trading company and those of trustees as managers of a settled estate arises from the different object in view in each case respectively. The funds which form the subject of a settlement are intended to be pre- served for the benefit of those who may become entitled to them. The funds embarked in a trading company are, on the other hand, to be employed for the acquisition of gain ; and risk is of the essence of the employment. Accordingly, Stirling, J ., 3 regards the law as “ settled by such cases as Overend and Gurney Co. v. Gibb 4 and Turquand v. Marshall 5 that directors are not to be made liable for loss occasioned by mere imprudence or error of j udgment in the exercise of the powers conferred on them.” The same learned judge points out the same distinction in Sheffield and South Yorkshire Permanent Building Society v. Aizlewood . 6 He cites the rule stated by Lord Watson in Learoyd v. Whiteley : 7 “ Business men of ordinary prudence may, and frequently do, select investments which are more or less of a speculative character ; but it is the duty of a trustee to confine himself to the class of investments which are permitted by the trust, and likewise to avoid all investments of that class which are attended with hazard.” From this he concludes that “ Directors are not under an obligation to avoid investments attended with hazard, but may, in the absence of anything to the contrary in the rules or articles of association, act in tl e same manner as business men of ordinary prudence.” The remedy is in the hands of any company that should deem such powers too wide ; for “ it is competent for the members to frame rules or articles of association so as to impose such restrictions as they may deem advisable.” As a concrete instance of the greater liberty accorded to directors than trustees the learned i 2 Hare, 4G1. Cp. Macdougall v. Gardiner, L. R. 10 Ch. 600 ; Isle of Wight Ry. Co. v. Tahourdin, 25 Ch. D. 320 ; Alexander v. Automatic Telephone Co., [1900] 2 Ch. 56. 2 26 Ch. D. 107, 144. 3 Leeds Estate Building and Investment Co. v. Shepherd, 36 Ch. D. 798. Doveij v. Cory, [1901] A. C. 477. 4 L. R. 5 H. L. 480. sL.R.4 Ch. 376. o 44 Ch. D. 454. 7 12 App. Cas. 733. London Financial Association v. Kelli. Distinction between duties of directors and of trustees. Opinion of Stirling, J. Sheffield and South York- shire Permanent Building Society v. Aizlewood. Directors not bound to avoid hazardous investments. ] 220 NEGLIGENCE IN LAW. Chairman of I )irectors. Liability of directors signing cheques. Judgment of James, Y.C., i n Joint Stock Dis- count Co. v. Brown. II. As the directors act for their shareholders. [BOOK VII. judge, later on in his judgment , 1 holds that directors may take second mortgages ; since “ the risk ” (arising from the probable want of means on the part of the mortgagor to pay off the first mortgagee, in the event of the first mortgagee attempting to enforce his right by foreclosure, to the disadvantage of the second mortgagee) “ is one which, as it seems to me, a business man of ordinary prudence might be willing to incur.” The responsibility of a chairman of directors, although he is paid, does not involve the obligation of checking or independently in- vestigating all the company accounts which pass before him. Where the officers of the company are experienced, and, so far as the directors know, trustworthy, the directors are warranted in treating them as such, and are not obliged to a prying suspicion in their dealings with them. If, then, accounts are compiled by such officers or any of them on a system so ingeniously contrived to mislead that they have passed the scrutiny of independent auditors, no case of negligence can be made out against a paid chairman who has failed to detect them. In the case in which this was held 2 the Privy Council considered that the fact of the defendant being remunerated for his services did not strengthen the case against him. “ Indeed, the modest scale of his remuneration is scarcely consistent with the idea that he, a man of considerable position, and with a business of his own, was ever expected to give his time and labour to the detailed control of the work of the bank. It is much more consistent with the idea that he was expected to do what he did — that is to say, to devote some two hours a day to the business of the bank, two hours largely taken up by official interviews.” 3 The duty attaching to directors who sign cheques on behalf of their company has been the subject of some extremely forcible remarks by James, V.C . 4 After observing on the contention that signing cheques for a company is to be treated as a mere ministerial act, the Vice- Chancellor continues : “ A company for its own protection against the misapplication of its funds requires that cheques should be signed by certain persons. Of course it is quite clear that no company of this kind could be carried on if every director were obliged to sign every cheque, and it is therefore required that the cheques should be signed by a certain number of persons for the safety of the company. That implies, of course, that every one of those persons takes care to inform himself, or, if he does not take care to inform himself, is willing to take the risk of not doing so, of the purpose for which and the authority under which the cheque is signed ; and I cannot allow it to be said for a moment that a man signing a cheque can say ‘ I signed that cheque as a mere matter of form ; the secretary brought it to me ; a director signed it before me ; two clerks have countersigned it ; I merely put my name to it.’ Most of us have been obliged to trust in the course of our lives to a great number of persons when we have had to sign deeds and things of that kind ; but if we trust, of course we must take the consequences of our so trusting.” Yet in view of what has gone before, the duty here prescribed is a little too exacting . 5 II. As the directors act on behalf of the shareholders as distinguished from the company, and have possession of assets for distribution amongst the shareholders. i 44 Ch. L>. 459. 3 Prifontaine v. Grenier, [I907J A. C. 101. * L.c. 110. Op. Dixon v. Kennaway , [1900] 1 Oh. 833. 4 Joint Stock Discount Co. v. Brown, L. II. 8 Eq. 404. o Ante, 12)0. CHAP. I.] PARTNERSHIP. 1221 This aspect of a director’s duties is noticed by Lord Selborne, C., in G. E. Ry. Co. v. Turner, 1 where he says: “Directors are the mere trustees or agents of the company — trustees of the company’s money and property — agents in the transactions which they enter into on behalf of the company.” Yet there is a wide distinction between the liability of directors to their shareholders for acts respectively intra and ultra vires. If the act charged against the directors is so outside the powers of the company that the company could not sanction the outlay, the directors may be made personally liable as trustees ; 2 for they cannot be justly said to be forwarding the purposes of the common venture, but rather to be misapplying funds with which they are entrusted. If the act charged against the directors is one within the powers of the company, they are not liable ; unless it is of “ a character so plain, so manifest, and so simple of appreciation that no men with any ordinary degree of prudence, acting on their own behalf, would have entered into such a transaction as they entered into.” 3 In FlitcrofVs case 4 the principal ground of decision was indeed that payment of dividends had been made out of capital, and that as such payments were ultra vires, they affected the directors with a liability which shareholders as a body could not assume to themselves ; the principle was also involved of the act of the directors being a breach of trust against which the protection of the Statute of Limitations was unavailing ; but it also shows that a different rule is to be applied to the acts of the directors as agents for carrying out the purposes of the incorporation with the outside world and the acts of the directors as between them and the shareholders as depositaries of the realised property of the concern. 5 But sec. 8 of the Trustee Act, 1888,® enables directors where they are trustees to plead the Statute of Limitations, if nothing of the nature of fraud is involved in the transaction. Yet directors are not strictly trustees, except in certain only of the relations that they occupy. 7 Kay, J., in In re Oxford Benefit Building and Investment Society 8 held it settled law : (1) That directors are jMtm- trustees of the capital of the company ; 1 L. R. 8 Ch. 152. Percival v. Wright, [1902] 2 Ch. 421. 2 Sheffield and South Yorkshire Permanent Building Society v. Aizlewood, 44 Ch. D. 452 ; In re Faure Electric Accumulator Co., 40 Ch. D. 141 ; Land Credit Co. of Ireland v. Lord Fermoy, L. R. 8 Eq. 7 ; L. R. 5 Ch. 763 ; Crimes v. Harrison, 26 Beav. 4.35. Cp. In re Lands Allotment Co., [1894] 1 Ch. 616 ; Young v. Naval, A.-G. v. Leicester (Corporation oj), 7 Beav., per Lord Langdale, M.R., 179. Cp. Fyler v. Fyler, 3 Beav. 550. <> Ante, 173 n. 4. 7 Story, Eq. Jur. § 34. 3 Bla. Com. 430. s Travis v. Milne, 9 Hare, 141, 150. 2 12 App. Cas. 178. The Heirs II iddingli v. Dc Villi vis Deny seen, l.e. 641. TRUSTEES AND EXECUTORS. 1233 CHAP. IT.] where otherwise injustice would be worked ; while in granting the dispensation in favour of the cestui que trust the Court is very strict and requires to be shown circumstances of disability for suing and not a mere refusal to sue by the trustee . 1 In any event, the trustee is personally bound to use his own judg- Trustee ment, and may not rest upon the untested advice of those whose p° l ™!,|°kpi assistance he has invoked, whatever their skill may be. If he chooses andjudg- to place reliance upon such advice without testing its soundness, he ment. cannot escape personal liability if things go wrong, unless he can show that the circumstances are such as would justify a trustee ol ordinary prudence, and fully informed on the character of the proposed trans- action, in entering upon it. The trustee may rely on his expert’s skill, but cannot shirk the exercise of his own judgment ; not the judgment of a specialist even though he may be such, but the judgment of the business man of ordinary prudence confining his attention to the class of investments which are permitted by his trust . 2 If the trustee uses such means of judgment as he has to test the If the advice of the skilled person to whom he has referred any business, he ti^means he will be protected in the event of an unfavourable issue ; 3 but he must has to test not abdicate the exercise of his own judgment by an inrplicit reliance the skilled on the reports of his agents, how T ever qualified they may be . 4 Neither J en must he employ an unskilful agent, or even a skilful agent in circum- protected, stances that are not within the ordinary line of his business. “ Suppose,” says Kay, J ., 5 “ that, in selling trust property or changing an investment, trustees were to allow the trust fund to pass into the hands of their solicitors, and that it was lost in consequence, they would be liable. . . . It would be no excuse to say, as one of the witnesses said in this case, ‘ Solicitors often do so.’ The question is not what they often do, but what is properly within thescope of their employment as solicitors .” 6 No stronger case could be given of this limitation of the rule — that trustees acting according to the ordinary course of business, and employing agents as a prudent man of business would do on his own behalf, are not liable for the default of an agent so employed — than the case cited in the course of this judgment by Kay, J., where trustees were held liable for taking a competent London surveyor to value property at Broadstairs , 7 on the ground that, though competent, he was unacquainted with the place. This case is, however, now no longer law . 8 The duty of the Court where there is a question of nicety as to Court to lean construction or otherwise is to lean to the side of the honest trustee, to the side of the honest 1 Yealman v. Y caiman, 7 Ch. D. 210 ; see per Kay, J., Meldrum v. Scorer, 50 L. T. trustee. 471. In Sharpe v. San Paulo Ry. Co., L. R. 8 Ch. 609, James, L.J., says : “ I came to the conclusion very clearly that a person interested in an estate or a trust fund could not sue a debtor to that trust fund, or sue for that trust fund, merely on the allegation that the trustee would not sue ; but that if there was any difficulty of that kind, if the trustee would not take the proper steps to enforce the claim, the remedy of the cestui que trust was to file his bill against the trustee for the execution of the trust.” 2 Learoyd v. Wliiteley, 12 App. Cas. 727 ; Sutton v. Wilders, L. R. 12 Eq. 373 ; In re W call, Andreivs v. W call, 42 Ch. D. 674 ; In re Somerset, Somerset v. Earl Poulelt, [1894] 1 Ch. 231 ; Speight v. Gaunt, 9 App. Cas. 1, distinguished in Bullock v. Bullock, 56 L. J. Ch. 221 ; Maclean v. Soady's Trustee, 15 Rettie, 966 ; Rae v. Mcelc, 15 Rettie, 1033, reversed 14 App. Cas. 558 ; Austin v. Austin, 3 C. L. R. (Australia), 516. 2 Speight v. Gaunt, 9 App. Cas. 1 . * Learoyd v. Whileley, 12 App. Cas. 727. 5 Fry v. Tapson, 28 Ch. II. 280 ; In re Partington, Partington v. Allen, 57 L. T. 654. fi Cp. Knox v. Mackinnon, 13 App. Cas., per Lord Watson, 767. 7 Budge v. Gummow, L. R. 7 Ch. 719. » 56 & 57 Viet. c. 53, s. 8 (1). 1234 NEGLIGENCE IN LAW. [book VII. Trustee not entitled to remunera- tion. Where trustee may employ an agent. 22 & 23 Viet, e. 35, s. 31. Effect stated by Lord Selborne, C. and not to be anxious to find fine and extraordinary reasons for fixing him with any liability upon the contract. “ You are,” said Jessel, M.R., 1 “ to endeavour as far as possible, having regard to the whole transaction, to avoid making an honest man who is not paid for the performance of an unthankful office liable for the failure of other people from whom he receives no benefit.” Further, it is a rule in equity, that in all matters of trust or in the nature of a trust, the trustee is not entitled to any remuneration for any extraordinary trouble he may have had in the business entrusted to him ; for if the trustee were allowed to charge for his services his interest would be opposed to his duty, and the Court will not allow a trustee to place himself in a false position. 2 But when extraordinary expense is incurred by the trustee for the benefit of the estate, the estate must defray it. 3 “ It is in the nature of the office of a trustee, whether expressed in the instrument or not, that the trust property shall reimburse him all the charges and expenses incurred in the execution of the trust.” 4 Neither is it in every case that the propriety of employing an agent 5 can be established ; yet this is the first step for the exoneration of the trustee. “ Generally speaking,” said Sir John Leach, M.R., in Weiss v. Dill, 6 “ executors are not allowed to employ an agent to perform those duties which, by accepting the office of executors, they have taken upon themselves ; but there may be very special circumstances in which it may be thought fit to allow them such expenses as they may have incurred by the employment of agents ” ; yet where an agent was employed in special circumstances, Courts of Equity stepped in and held that the propriety of employing an agent being established, the trustee should be exonerated from loss unless guilty of wilful default. The Law of Property and Trustees’ Relief Amendment Act, 1859, 7 exonerated trustees from the duty to make good the default of “ any banker, broker, or other person with whom trust-moneys have been deposited.” This enactment, says Lord Selborne, C., 8 “ does not sub- stantially alter the law as it was administered by Courts of Equity, but gives it the authority and force of statute law, and appears to me i Speight v. (Jaw 1, 22 Ch. D. 746. 2 Robinson v. Pett, 3 P. Wins. 249. 3 In the matter Oformsby, a minor , I Ball. & B. (Ir. Ch.) 189. 4 Per Lord Eldon, C., Worrall v. Harford, 8 Ves. 8. 5 In re Partington, Partington v. Allen, 57 L. T. 654. So long as the agent acts merely as agent, generally speaking he cannot be held liable as constructive trustee, unless he assist with knowledge in a dishonest and fraudulent design on the part of the trustees : Barnes v. Addy, L. R. 9 Ch., per Lord Selborne, C., 251 ; but where the agent obtains possession of the trust funds and acts otherwise than in strict conformity with his duty as agent, he thereby charges himself as trustee : Lee v. Sankey, L. R. 15 Eq., per Bacon, V.C., 211 ; In re Barney, Barney v. Barney, [1892] 2 Ch. 265 ; there was a difference of opinion of the Court in Soar v. Ashwell, [1893] 2 Q. B. 390, as to the ground of the decision, but none as to the decision itself : sec per Bowen, L.J., 396, and per Kay, L.J., 405. Bowen, L. J., says, l.c. 397 : “ A person occupying a fiduciary relation, who has property deposited with him on the strength of such relation, is to be dealt with as an express, and not merely a constructive, trustee of such property.” In re Dixon, [1900] 2 Ch. 561. 6 3 My. & K. 26, the case of executors employing an agent for collecting debts in the testator’s business of a tailor. The collector charged 5 per cent. The master allowed only 24 per cent, in the executors’ account. See, however, Brier v. Evison, 26 Ch. I). 238. As to the trustee’s responsibility for tho intelligence and honesty of his agents, In re W call, 42 Ch. D. 674. In Henderson v. M'lrer, 3 Madd. 275, an executor was held justified in employing an accountant. Sec also Macnaniura v. Joiu «, 2 Dick. (Ch.) 587. 7 22 & 23 Viet. c. 35, s. 31. s Brier v. Evison, 26 Ch. I). 243. TRUSTEES AND EXECUTORS. 1235 CHAP. II.] to throw the onus probandi on those who seek to charge an executor or trustee with a loss arising from the default of an agent when the propriety of employing an agent has been established. ” The wider provisions of the Trustee Act, 1893, 1 is now substituted Trustee Act, for this ; by sec. 17 of whicha trustee mayappoint a solicitor as his agent l8!):5 - to grant a discharge for property receivable by the trustee and to have ■ the custody of any such deed as is referred to in sec. 56 of the Con- veyancing and Law of Property Act, 1881 ; 2 or a banker or solicitor may give a discharge for insurance moneys. Trustees are entitled to choose the solicitor, the broker and the banker they employ ; 3 and it has been held by Chitty, J., that a trustee is not even bound to regard the direction of his testator what solicitor he is to employ ; 4 but the trustee must not allow any money or property to remain in the hands or under the control of the banker or solicitor for a longer period than is reasonably necessary to pay over the same to the trustee. 5 We have seen 6 that a trustee is not accountable for property Trustee’s rightly in the hands of an agent when the Court has come to the con- account- elusion that there was reason for the emplovment of an agent. 7 This ablllty . for ground of exoneration is dependent on the reasonableness of the rightly in tho action of the trustee. A comparison of the cases of Clough v. Bond 8 hands of and Johnson v. Neivton 9 will mark both the limits and the reason of agent the rule. In the former case, on the death of an intestate, administration Clough v. was granted to her son and married daughter. The assets were paid Bond. into a banking account in the j oint names of the son and of the daughter’s husband. Seven months after, the daughter’s husband died ; ten months after that, the son drew out the balance, applied it to his own use, and absconded. The Lord Chancellor, affirming the Vice-Chan- cellor, held that the personal representatives of the husband were liable, because he had deposited the money in the two names, and thus excluded his wife from ever having control — a mode of deposit by which, without necessity, exclusive possession was likely to vest in a person not entitled to it. When the money was thereby lost the impropriety of so placing it imposed a liability upon the estate of those to whom the loss was imputable. 10 The Lord Chancellor said the judgment of 1 56 & 57 Viet. c. 53, s. 17 ; In re Hetling and Merton, [1893] 3 Ch. 269 ; Bennett v. Stone, [1903] 1 Ch. 509. In re Bellamy v. Metropolitan Board of Works, 24 Ch. D. 387, was overruled by sec. 2 of 51 & 52 Viet. c. 59, for which the present section is substi- tuted ; In re Flower, 27 Ch. U. 592 ; Day v. Woolwich Equitable Building Society, 40 Ch. D. 491, which is questioned in King v. Smith, [1900] 2 Ch. 425 ; Wyman v. Paterson, [1900] A. C. 271. 2 44 & 45 yict. c. 41. s In re Cleveland' s ( Duke of) Settled Estates, [1902] 2 Ch. 350 ; In re Hunt's Settled Estates, [1905] 2 Ch. 418. 4 Foster v. Elsley, 19 Ch. D. 518. 5 Inre Fryer, 3 K. & J. 317 ; Cann v. Cann, 51 L. T. 770. 6 Ante, 1234. 7 Edmonds v. Pealce, 7 Beav. 239, the case of an auctioneer ; Williams v. Higgins, 17 L. T. (N. S. ) 525 ; In re Bird, L. R. 16 Eq. 203, the case of money sent to a solicitor to make a payment with, and which was misappropriated. 8 3 My. & Cr. 490 ; Newton v. Hallett, 19 L. T. (N. S.) 471 ; Gasquoine v. Gasquoine, [1894] 1 Ch. 470. 9 11 Hare, 160. Solway v. Salway, 2 Russ. & My. 215, in the House of Lords, sub nom. While v. Baugh, 9 Bli. (N. S.) 181, is the converse case, where the House of Lords, affirming Lord Brougham and overruling Sir John Leach, M.R., held that in the event of loss a trustee will be liable who parts with his exclusive control of trust funds by associating with himself some other person not a member of the trust, or leaves funds in the exclusive control of a co-trustee ; Mendes v. Guedalla, 2 J. & H. 259 ; Lewis v. Nobbs, 8 Ch. D. 591. In re Sisson’s Settlement, [1903] 1 Ch. 262, distinguished the two last-cited cases NEGLIGENCE IN LAW. 1230 [book VII. Lord Cottenham. Johnson v. Newton. principle 1 was “ that, although a personal representative, acting strictly within the line of his duty, and exercising reasonable care and diligence, will not be responsible for the failure or depreciation of the fund in which any part of the estate may be invested, or for the in- solvency or misconduct of any person who may have possessed it, yet, if that line of duty be not strictly pursued, and any part of the property be invested by such personal representative in funds or upon securities not authorised, or be put within the control of persons who ought not to be entrusted with it, and a loss be thereby eventually sustained, such personal representative will be liable to make it good, however unexpected the result, however little likely to arise from the course adopted, and however free such conduct may have been from any improper motive.” 2 “ So when the loss arises from the dishonesty or failure of any one to whom the possession of part of the estate has been entrusted, necessity, which includes the regular course of business in administering the property, will in equity exonerate the personal representative. 3 But if, without such necessity, he be instrumental in giving to the person failing possession of any part of the property, he will be liable, although the person possessing it be a co-executor or co-administrator.” 4 Johnson v. Newton 5 was the case of executors maintaining a balance of more than £2000 at a bank nine months after their testator’s death ; of which sum more than £1000 was lost to the estate by the bankruptcy of the bankers. The Master held that it was not necessary to retain the balance or any part of it at the banker’s ; but Page Wood, Y.C., held the executors not liable for the loss, since there was a rule of law that allowed them a year to wind up their testator’s estate ; 6 while there were no directions to invest the balance of the estate ; failing which, had they done so, they would have been liable to the residuary legatee for any loss on a re-sale. “ The executors are no doubt bound to exercise their judgment on the safety of the place of deposit, whether it be that which the testator had in his lifetime chosen, or whether it be in that they were cases of bearer securities. In the case before the Court the trust property could not be dealt with by the holder of the deeds without forgery ; and the custody of title-deeds or non-negotiable securities will not be taken by the Court from the possession of one trustee to be placed under joint control. This accords with Lord Buckhurst's case, 1 Co. Rep. 2 b, note O, which is followed, Foster v. Crabb (1852), 21 L. J. C. P. 189. In re Pothonier, [1900] 2 Ch. 529. Cp. Kilbee v. Sncyd, 2 Moll. (Ir. Ch. ) 186. As to a possible difference in the case of an executor from a trustee, see Pemberton v. Chapman, E. B. & E. 1056; quaere, would not tho providing for drawing cheques singly by either executor be an act of negligence ? Constcrdine v. Consterdine, 31 Beav. 330. 1 3 My. & Cr. 496. 2 Cp. Phillips v. Phillips, Freern. (Ch.) 11, Rep. temp. Finch, 410, 1 Ch. Cas. 292. In re Brogden, Billing v. Brogden, 38 Ch. D., per Cotton, L.J., 567. CarriUhcrs v. Carruthers, [1896] A. C. 659. Where an executor is negligent and does not exercise ordinary care, he is personally liable for the loss of money belonging to the estate, by the theft of the same from his person by pickpockets whilst travelling upon a streetcar : Tarver v. Torrance, 12 Am. St. R. 311, where thero is a note on the skill and diligence required of an administrator. 3 This sentence is slightly altered from the report, where a full stop is inserted after “ entrusted.” 4 The reporter in 3 My. & Cr. 497, adds : “ See Hanbury v. Kirkland, 3 Sim. 265,” where a trustee absconded with the trust funds, and the co-trustees were held guilty of “ most culpable negligence.” See Story, Eq. Jur. § 1269 and notes. A trustee is not liable upon a proper investment in English Government securities for loss through fluctuations of the fund : Peat v. Crane, 2 Dick. (Ch.) 499 n. If the investment is unauthorised he is liable: Ilancom v. Allen, 2 Dick. (Ch.) 498; Howe v. Earl of Dartmouth, 7 Ves. 137, 150. 5 11 Hare, 160. li Brooke v. Lewis, 6 Madd. 358. TRUSTEES AND EXECUTORS. CHAP. II.] 12:57 selected by themselves ; and when a loss unfortunately happens, the question must always be, how far the executors must be held to be answerable under the circumstances of the case.” 1 Mattheivs v. B rise, 2 before Lord Langdale, M.R., illustrates the Matthews rule in both its aspects. A trustee was there held to have properly v - Bnse - invested trust-money in Exchequer bills pending necessary delay in the completion of a mortgage ; but was held personally liable for having left the bills bought in the hands of a broker who misapplied them. 3 If a trustee pays money to his own account with a banker, and Money lost by it is lost, he is personally liable, even in cases where it would have been f )01,1 g P aid to equally lost had it been placed to a separate account ; for by so doing, accoim t. in the event of his bankruptcy, it would go to the credit of his estate, and if the bankers had any account with him for set-off they could claim the cestui que trust’s funds ; 4 and if a trustee or agent mixes and confuses the property which he holds in a fiduciary character with his own property, he is, primd facie, liable for the whole, and the onus will consequently be on him to discriminate. 5 Though trust funds may be kept in a separate account, yet, if left Trust funds standing at the bank too long, and thereby lost, the trustee, becomes tocTlom'- personally liable. Where to draw the line between proper and im- and [ ost _ 0 ° proper detention is, as is observed by Kay, J., 6 “ extremely difficult ” to determine. Where £500 was left in a bank for fourteen months while trustees looked for a mortgage, at the end of which time the bank failed, it was held by that learned judge “ that leaving that money in the bank for fourteen months was leaving it there too long,” so that the trustees were personally responsible ; on the other hand, in the circum- stances pf Johnson v. Neivton 7 nine months was held not too long. But in Challen v. Shippam 8 a trustee has been held liable to replace a trust fund deposited with his bankers accompanied by an order in writing to invest in consols ; this the bankers omitted to do and the money remained with them for five months without any inquiries being made by the trustee and then the bankers became bankrupt. “ There has been no case referred to,” says Bacon, Y.C., in Youde v. Cloud, 9 “ and, according to my experience, my belief is that no case can be found, in which a trustee, however formally he may have been appointed, however extensive may have been the powers that were con- ferred upon him, has been held liable for the non-performance of a trust of which he was ignorant ; and I should be very much surprised to find that any such case had ever occurred, or that any such decision had ever been pronounced against a trustee in such circumstances.” Where there are partners, one of whom is a trustee who brings trust-moneys into the firm’s assets with the knowledge of the others, which is misapplied, the Court holds them all liable as trustees. 10 Trustee not liable for non- performance of a trust of which he is ignorant. Trustee pay- ing trust funds into partnership. ill Hare, 1G7. 2 6 Beav. 239. 3 Lunham v. Blundell, 4 Jur. X. S. 3 ; Wilkinson v. Bewick, 4 Jur. N. S. 1010. 4 W ren v. Kirton, 1 1 Ves. 377 ; Billing v. Brogden, 38 Ch. D. 546. s Lwpton v. White, 15 Ves. 432 ; Cook v. Addison, L. R. 7 Eq. 466. As to the distinction between debtor and creditor and trustee and cestui que trust, see Lister v. Stubbs, 45 Ch. D. 1. Salway v. Salway, 2 Russ. & M. 215, affd. sub nom. White v. Baugh, 3 Cl. & F. 44, 9 Bli. (X. S.) 181 ; In re Oatway, [1903] 2 Ch. 356. « Cann v. Cann, 51 L. T. 770. ? 11 Hare, 160. In Wyman v. Paterson, [1900] A. C. 271, where money was left in an agent’s hands, six months was held too long to leave it there. 8 4 Hare, 555. 9 L. R. 18 Eq. 642. 10 Ex 'parte Watson, 2 Ves. & B. 414: The clear principle of equity is that, if a trustee has made use of the trust property, the cestui que trust has an option to have the profit actually made or interest ” : per Lord Eldon, C., 415. Ir re Davis, Eager 1238 NEGLIGENCE IN LAW. Trustee not an agent. Effect of clause exonerating from liability for errors, omissions, or neglect, &c. Costs. I. Custody of trust property. [BOOK VII. It must be borne in mind that a trustee is not an agent. An agent represents and acts for his principal, and when he contracts as agent the principal is bound, but the agent is not. When a trustee contracts, unless he is bound, there is no one bound, since he has no principal ; the contract is therefore his personal contract, but with power to the trustee to resort to the trust funds for his exoneration. If, then, he wishes to protect himself from personal liability he must do so by distinctly contracting that the other party to the contract is to look exclusively to the trust estate ; 1 and we have already seen 2 that it is an established rule that a trustee, executor, or administrator of a trust estate shall have no allowance for his care and trouble . 3 The effect of a special clause in a trust deed, exonerating trustees from liability “ for omissions, errors, or neglect of management,” or for the inefficiency of securities, insolvency of debtors, or depreciations of securities, and other like casualties, has yet to be considered. “ Such a clause,” says Lord Watson , 4 and his expression is adopted by Lord Herschell , 5 “ is ineffectual to protect a trustee against the consequences of culpa lata, or gross negligence, on his part, or of conduct which is inconsistent with bond fides. I think it is equally clear that the clause will afford no protection to trustees who, from motives however laudable in themselves, act in plain violation of the duty which they owe to the individuals beneficially interested in the funds which they administer.” “ Clauses of this kind do not protect against positive breach of duty.” 6 The general ride as to costs is, that where one interested in an estate resorts to the Court of Chancery for an account of that estate, the costs fall on the estate ; “ for executors usually are to be exempted from paying costs ; and this rule holds even in cases where great delays and difficulties have been occasioned by the executor ; for the Court will overlook these circumstances if it can.” 7 Having thus considered the general principles of law applicable to the acts and default of trustees, we are now to treat of the more special applications of it, and — I. As to the position of a trustee with regard to the custody of trust property. Although Lord Ellenborough laid down in Crosse v. Smith 8 that an executor is liable at law for the loss of his testator’s assets, when they have once come into his hands, either by fire, robbery, or by any of the various means which afford excuse to ordinary bailees and agents v. Barnes, 31 Beav. 579; Alliance Bank v. Tucker, 17 L. T. (N. S.) 13; Blytli v. Fladgate, [1891] 1 Ch. 337. 1 Taylor v. Davis, 1 10 U. S. (3 Davis) 330, 335. 2 Ante, 1234. 2 Robinson v. Pelt, 3 P. Wms. 249 ; In re Barber, (1880), 34 Ch. D. 77 ; where the lessor has refused to grant a renewal of a lease to the cestui que trust, lie will yet bo entitled to the benefit of any renewal the trustee may have obtained : Ketch v. Sand- ford, Sel. Cas. in Ch. (King) 61. 2 Wh. & T. Lead. Cas. in Eq. (7th cd.) 693 ; Tanner v. Biworthy ,4 Beav. 487. In re Biss, [1903] 2 Ch. 40 ; Bevan v. Webb, | 1905] 1 Ch. 620. 4 Knox v. Mackinnon, 13 App. Cas. 705 ; Wyman v. Paterson, [1900] A. C. 271. For a curious ease of “ sheer unreasonableness ” of a trustee, who was in consequence ordered to pay the costs of legal proceedings taken by cestui que trust,, sco In re Chapman, Freeman v. Parker, 11 Times L. R. 177 (C. A.). s Rae v. Meek, 14 App. Cas. 572. s Seton v. Dawson, 4 Dunlop, per Lord Ivory, 318. Cp. Kennedy v. Kennedy, 12 Rettic, 275. 7 Per Lord Thurlow, C., llall v. Hallett, 1 Cox (Ch.), 141 ; but trustees were made to pay costs in In re Skinner, [1904] 1 Ch. 289. See Judicature Act, 1890 (53 & 54 Viet. c. 44), s. 5. 8 7 East, 246. CHAP. It.] TRUSTEES AND EXECUTORS. 1239 in cases of loss without negligence, the rule of equity was always Variance otherwise, and was thus stated by Lord Hardwicke : 1 “ If a trustee ^ is robbed, that robbery, properly proved, shall be a discharge, pro- au ,l chancery vided he keeps them [the trust funds] so as he would keep his own. So doctrines, it is as to an executor or administrator, who is not to be chargeable further than goods come to his hands ; and for these not to be charged unless guilty of a devastavit ; and if robbed, and he could not avoid it, lie is not to be charged, at least in this Court.” If Lord Ellenborough’s decision ever correctly expressed the rule of Effect of the law, 2 it now no longer does so, by virtue of the Judicature Act, 1873 3 — Judicature providing that, in case of a conflict between the rules of equity and the A< t ’ 1873- rules of law, the rules of equity are to prevail — and the law is settled in the sense of Lord Hardwicke ; and an executor, or administrator, or trustee has no more extensive liability than a bailee (whether gratuitous Remunerated or not makes no difference 4 ), who cannot be charged with the loss of his or unre- testator’s assets without negligence or default. 5 And if any goods are “ un f ratefl , o o, j g trustee under stolen from the possession of any of the class of persons whose liability t j ie same we are now considering, or from the possession of a third person to rule, whose custody they have been delivered by any person affected with a trust of them, or are lost by casualty, as by accidental fire, the person so affected with a trust of them shall, in the absence of negligence or default, not be charged with their loss. An executor is liable on a devastavit, not only for loss arising by a Executor direct abuse of the assets by spending or consuming them, but also for liable on a waste by such acts of negligence and wrong administration as will for^tterinir disappoint the claimants on the assets. 6 This liability may include the assets ° a loss arising to the estate by reason of the estate having to bear away, charges which it would not have had to bear but for the culpable negligence of the executor. 7 In Hooper v. Summersett , 8 where the defendant was shown to what be living in the house and carrying on the trade of the deceased constitutes in the same manner as in the lifetime of the deceased, the Court n 4ddiYng » of Exchequer held that there was evidence of “ a sufficient inter- meddling to charge him as an executor de son tort ” and that the authorities to this effect “ were too strong to be got over.” If an executor pay a debt due to a creditor who cannot enforce it by Claims not reason of the Statute of Frauds, 9 he commits a devastavit ; it is other- enforceable by reason of 1 Jones v. Lewis, 2 Ves. Sen. 240 ; Morlay v. Morley, 2 Cas. in Ch. 2 ; Knight v. Lord the Statute Plimouth, 3 Atk. 480, decides the sam? point as to a receiver appointed by the Court ; of Frauds, Koivth v. Howell, 3 Ves. 565. “ Nor will the Court ever charge a trustee with imaginary values, but he shall be charged as a bailiff only. And although very supine negligence might indeed in some cases charge a trustee with more than he had received, yet the proof must be then very strong ” : 2Fonbl. Eq. (5th ed.), 178; Story, Eq. Jur. § 1269. 2 C’oggs v. Bernard, 2 Lord Raym., per Holt, C.J., 913 : “ He is not answerable if they are stole without any fault in him.” “ If he keeps the goods in such a case with an ordinary care, he has performed the trust reposed in him.” 3 36 & 37 Viet. c. 66, s. 25, sub-s. 11. 4 Charitable Corporation v. Sutton, 2 Atk. 406 ; Jobson v. Palmer, [1893] 1 Ch. 71 ; Shepherd v. Harris, [1905] 2 Ch. 310, 318. s Job v. Job, 6 Ch. D. 562 ; Mayer v. Murray, 8 Ch. D. 424, explained and followed In re Symons, Luke v. Tonkin, 21 Ch. D. 757. In all these cases a claim was made in respect of “ wilful default.” Rowley v. Adams, 2 H. L. C. 725 ; Bennett v. Stone, [1903] 1 Ch. 509. Sec. 3 of the Judicial Trustees Act, 1896 (59 & 60 Viet. c. 35), applies to the ease of an executor who has committed a devastavit ; but in considering the question of relief the Court must see that there has been no undue delay in advertis- ing for claims under 22 & 23 Viet. c. 35, s. 29 : In re Lord de Clifford's Estate, [1900] 2 Ch. 707, following Bacon v. Bacon, 5 Ves. 331. « In re Stevens, [1898] 1 Ch., per Williams, L. J., 177. 7 Hall v. II allot, 1 Cox, 134. 8 Wight. 16, 21. a In re llownson, 29 Ch. 1). 358. VOL. II. 2 K 1 240 NEGLIGENCE IN LAW. BOOK VII. an nci pl° enunciated the principle “ that if a trustee errs in the management cesl ui que 0 of the trust and is guilty of a breach, yet if he goes out of the trust with trust to recoup. 1 Ex parte Shakeshajt, 3 Bro. C. C. 197 ; Ex parte Norris, L. R. 4 Ch. 280. 2 Devaynes v. Robinson, 24 Beav. 86 ; Grayburn v. Clarkson, L. R. 3 Ch. 605. 2 Ruby v. Ridehalgh, 7 De G. M. & G. 110. See Sawyer v. Sawyer, 28 Ch. D., per Chitty, J., 598, affirmed 602 ; Blyth v. Fladgate, [1891] 1 Ch., per Stirling, J., 363. 4 Morgan v. Blyth, [1891] 1 Ch. 344, 363. s 51 & 52 Viet. c. 59. 6 56 & 57 Viet. c. 53. ~ In re Somerset, [1894] 1 Ch. 231, 265. The words “ in writing ” in sec. 45 apply only to “ consent,” and not to “ instigation ” or “ request ” : Griffith v. Hughes, [1892] 3 Ch. 105, approved In re Somerset, lx. 265. A married woman (to whose income subject to a restraint on anticipation the section extends) must be shown, to have acted for herself with knowledge of the facts : Sawyer v. Sawyer, 28 Ch. D. 595 ; see Ricketts v. Ricketts, 64 L. T. 263, explained in Bolton v. Curre, [1895] 1 Ch. 544. The sections in the Trustees Acts, ss. 6, 8 of 51 & 52 Viet. c. 59, and s. 45 of 56 & 57 Viet. c. 53, extended the powers of the Court for the benefit of trustees; Mara v. Browne, [1895] 2 Ch. 69; reversed [1896] l Ch. 199. s (1746), 3 Atk. 440, 444. Position of cestui qu trust with regard to acquiescence in an im- proper investment. 1 n re Salmon. Knott v. Cottee. 'Thornton v. Stokill. 1242 NEGLIGENCE IN LAW. [book vii. the approbation of the cestui que trust, it must be made good first out of the estate of the person who consented to it.” Lord Eldon, C., in Walker v. Symonds 1 carries the principle further: “Either con- currence in the act, or acquiescence 2 without original concurrence will release the trustees : but that is only a general rule, and the Court must inquire into the circumstances which induced concurrence or acquiescence ; recollecting in the conduct of that inquiry how im- portant it is, on the one hand, to secure the property of the cestui que trust ; and on the other, not to deter men from undertaking trusts from the performance of which they seldom obtain either satisfaction or gratitude.” It is true that if a cestui que trust, who is sui juris, acquiesces in an improper investment, he cannot afterwards call it in question ; 3 provided that it be made with his full knowledge 4 and without any misrepresentation or concealment on the part of the trustees ; 5 but this statement must be taken with the further qualification that the cestui que trust is entitled to place reliance on his trustee ; and a duty to inquire does not arise unless something has happened which suggests suspicion. There is no duty on a cestui que trust to inquire into his trustee’s discharge of the functions of his trust, in the absence of matter for suspicion ; 6 and approbation is more than knowledge with acquiescence. 7 In In re Salmon, 9, after making an investment within the scope of the powers under the trust, the trustee retired and new trustees were appointed. Six years elapsed and then the new trustees, with the concurrence of the plaintiff, a beneficiary, but without notice to the retired trustee, sold the mortgaged property for £500 less than the amount of the trust fund invested in it. The beneficiary having brought his action against the retired trustee for the deficiency, the investment was held an improper one. The case of Knott v. Cottee 9 was cited in argument, where the Master of the Rolls, speaking of improper investments, said : 10 “ The case must either be treated as if these investments had not been made, or had been made for his (the trustee’s) own benefit out of his own moneys, and that he had at the same time retained moneys of the testator in his own hands.” If so, the trustee would be entitled to the property in which the investment had been made on replacing the trust fund ; because the property purchased was never trust property, but only property purchased with trust funds and liable to be retained by the trust till redeemed by the making good the funds used in the purchase ; and the trustee had his option to replace the funds or submit to a sale. It was then argued that since the trustee was deprived of his option of taking the property by the sale, he could not be held to payment of the deficiency in the value of the security when sold without his concurrence. This argu- ment succeeded before Kekewich, J. On appeal the case of Thornton i 3 Swans. 1,64. 3 Post, 1263. 3 Harden v. Parsons, 1 Eden, 145. 4 Lord Montford v. Lord Cadogan, 17 Ves. 485; 19 Ves. 635. Hughes v. Wells, 9 Hare, 749, 773. 5 Burrows v. Walls, 5 De G. M. & G. 233. 6 Shropshire Union Railways and Canal Co. v. The Queen, L. R. 7 H. L. 496 ; In re Vernon Ewens & Co., 33 Ch. D. 402 ; Ilarlopp v. Huskisson, 55 L. T. 773. Where a trustee commits a breach of trust at the instigation or request or with the consent in writing of a beneficiary, the Court may in its discretion impound the interest of the beneficiary by way of indemnity, 56 & 57 Viet. c. 53, s. 45 ; In re Boicdcrt, 45 Ch. D. 444. 7 Phillipson v. Catty, 7 Hare, 516, 524 ; Fletcher v. Collis, [1905] 2 Ch. 24, 32. * 8 42 Ch. D. 351 ; Head v. Could, [1898J 2 Ch. 250, 266. « 16 Beav. 77. io L.c. 79. TRUSTEES AND EXECUTORS. 1243 CHAP. II.] v. Stokill 1 was cited for the defendant to establish that the option of the cestui que trust is to take the property, or to have the deficiency made up. But Cotton, L.J ., 2 pointed out that there the investment was outside the limits of the trust, while in the case before the Court the invest- ment was warranted by the terms of it. The Court of Appeal, over- ruling Kekewicli, J.,drcw a distinction between investments in their nature improper because outside the trustees’ powers, and investments proper in themselves, that is, authorised by the powers of the trust, but on sale proved to be an improvident exercise of those powers. As to these latter the cestui que trust could not dissent till he had ascer- tained that the trustee had not acted with reasonable prudence ; and that would not be, in the case before the Court, till the deficiency was manifested by a sale; so that the retired trustee was liable even though the beneficiary had had notice of the investment. Where an investment is made outside the terms of the trust, the cestuis que trust must accept or reject ; and this duty being on the cestui que trust, in the event of failure to perform it, the trustee would be discharged . 3 In In re Lake* Wright, J., followed the rule indicated by Kekewich, J., that where trust funds have been invested on a security which is not merely insufficient, but of a description not authorised by the trust, the trustee should have the opportunity or option of taking to the improper security on replacing the trust fund ; and held a trustee in bankruptcy entitled to the same right. Sir William Grant, M.R., in Lingard v. Bromley 5 held that nothing could be more mischievous than to hold a trustee acquitted from con- tribution to make good a deficiency in trust funds as between himself and his co-trustee, because he had done nothing, but had abdicated all judgment of his own and had done whatever his co-trustee had desired . 6 In Butler v. Butler 7 one trustee sought to recover from his co-trustee money that had been advanced on mortgage to a builder who had paid it over to the co-trustee as the price of the land on which the mortgage was secured and which was insufficient security. The attempt failed ; James, L.J., pointed out that “ if two trustees will sell out stock and hand the money over to one, no doubt that one can be made to repay, but the indirect benefit which a creditor gets from trust-money being lent to his debtor upon insufficient security is too remote, unless the thing was a fraudulent scheme.” “ All that is said is that in the result some of the moneys lent upon insufficient security were paid in dis- charge of a debt due from the mortgagor to one of the trustees.” 8 In two cases, Lockhart v. Reilly 9 and Thompson v. Finch , 10 this claim for indemnity has been allowed ; but in both the trustee against whom relief was sought was a solicitor, and the action through which loss to the trust resulted arose from misuse of the position of solicitor. In Bahin v. Hughes , n however, Cotton, L. J., thought it “ wrong to lay 1 1 Jur. N. S. 751. 2 Inre Salmon, 42 Ch. D. 369. 2 In re Massingberd's Settlement, 59 L. J. Ch. 107. 4 [1903] 1 K. B. 439. 5 (1812), 1 Ves. & B. 114. 0 The authorities are collected in Baynard v. Woolley, 20 Beav. 583. 1 7 Ch. D. 116. 8 Jackson v. Dickinson, [1903] 1 Ch. 947. Cp. Mutton v. Peat, [1900] 2 Ch. 79, on the third point decided. 9 25 E. J. Ch. 697. In re Turner, [1897] 1 Ch. 536. In re Linslcy, [1904] 2 Ch. 785, applied the distinction of the trustee being a solicitor. The Milwall, [1905] P., per Cozens Hardy, L. J., 176. to 22 Beav. 316 ; 8 De G. M. & G. 560. 11 31 Ch. D. 395 ; Inre Partington, Partington v. Allen, 57 L. T. 654, 662; Campbell v. Sclanders, 13 N. Z. L. R. 757, 760. Thornton v. Stokill. Rule formu- lated by Kekewich, J., adopted by Wright, J. Inaction does not avoid liability. Trustee receiving payment of a private debt out of trust funds used to pay a trust debt not accountable. Lockhart v. Reilly. Thompson v. Finch. J 244 NEGLIGENCE IN LAW. [book VII. Contribution between trustees in pari delicto. Indemnity where trustee is also cestui que trust. Chillingworth v. Chambers. Where cestui que trust is tenant for life. Fletcher v. Collis. down any limitation of the circumstances under which one trustee would be held liable to the other for indemnity, both having been held liable to the cestui que trust ; but so far as cases have gone at present, relief has only been granted against a trustee who has himself got the benefit of the breach of trust, or between whom and his co- trustees there has existed a relation which will justify the Court in treating him as solely liable for the breach of trust.” “ In my opinion, it would be laying down a wrong rule to hold that where one trustee acts honestly, though erroneously, the other trustee is to be held entitled to indemnity who by doing nothing neglects his duty more than the acting trustee.” The rest of the Court concurred. The principle is well established that “ as between two trustees who are in pari delicto, the one who has made good a loss occasioned by a breach of trust for which the two are jointly and severally liable may obtain contribution to that loss from the other.” 1 Returning now to the consideration of the liability of the cestui que trust to indemnify a trustee, we find the facts in Chillinqworth v. Chambers 2 complicated by reason of the trustee who sought con- tribution being also a cestui que trust, who had concurred in a breach which was for his benefit. The rule laid down was that the trustee’s position as a cestui que trust stood in the way of his claim to contribution from his co-trustee. On the breach of trust being brought to light the first duty of the trustees is to replace the trust fund ; and the share of the cestui que trust is primarily applicable to this. The claim for contribution, however, fails ; since to establish this the pre-requisites are that the trustees should be equally to blame for the breach, and that the one claiming contribution should not have profited by it. “ If I request a person to deal with my property in a particular way and loss ensues I cannot justly throw that loss on him. Whatever our liabilities may be to other people, still, as between him and me, the loss clearly ought to fall on me. Whether I am solely entitled to the property or have only a share or a limited interest, still the loss which I sustain in respect of my share or interest must clearly be borne by me, not by him.” 3 Nor does it affect the principle that some of the breaches occurred before the interest as cestui que trust accrued. The position of the trustee in relation to his cestui que trust was further .defined in Fletcher v. Collis . 4 A breach of trust resulting in the loss of trust funds was committed for the benefit of a cestui que trust who was tenant for life. At the instance of the remainder-man an arrangement was come to by which payments were made by the trustee to replace the fund and to pay interest from the date of the arrangement. Twenty years afterwards, during which time the trustee’s payments were accumulating, the tenant for life died. By means of the policies which fell in on his death and the payments made in his lifetime, the fund had been restored with all interest due from the first. The accumulated interest was claimed both by the trustee’s representa- tive and by the trustee in bankruptcy of the tenant for life. The Court of Appeal held, apart from any statute, that a cestui que trust of full age 5 and sui juris, who consents to his trustee committing a Robinson v. Harlcin, [1890] 2 Ch. 415, 42 099. [1890] 1 Ch. 085. 3 L.c., per Lindley, L. J. * [1905] 2 Ch. 24. s As to an infant ceslui'que trust : Head v. Gould, \ 1898] 2 Ch. 250. In 1). 27. 3. 1, we find, In omnibus quae fecit tutor cum facere non deberet, item in his quee non fecit rationcm reddel hoc judicio : prcestando dolum, culpam, cl quantum in rebus sin's dili- TRUSTEES AND EXECUTORS. 1245 CHAP. TT. breach of trust and paying the proceeds to some third person, so that 1 he cestui que trust does not himself benefit at all, could have no right as against his trustee to recover the income of the fund that has been spent. The remainder-man is entitled to have the capital replaced, but the income arising therefrom should not be paid over to the cestui que trust, but could be impounded by the trustee to indemnify him. The trustee in bankruptcy would be in no better position. The principle is that a beneficiary who consents to a breach of trust is not to be heard as against his trustee to claim compensation for that to which he has given consent. Romer, L.J., 1 intimates that if the trustee had Romer,L.J.’s, parted with the funds he had replaced to a new trustee without re- Vlew - servation of rights “ he might be held to have lost his right to claim the income after he had parted with the fund.” The Lord Justice also affirms the proposition that “ if a beneficiary claiming under a trust does not instigate or request a breach of trust, is not the active moving party towards it, but merely consents to it, and he obtains no personal benefit from it, then his interest in the trust estate would not be impoundable in order to indemnify the trustee liable to make good loss occasioned by the breach.” 2 The existence of a duty for an executor to inform his cestuis que Duty to trust “ when they attained twenty-one, of the position of the fund and inform cestui of their rights ” was asserted by Giffard, V.C. 3 In In re Lewis 4 the Court of Appeal proceeded on the basis of an admission by counsel, that there was apparently no such duty in the case before them ; and this is very manifest ; but Cozens Hardy, L.J., lays down as a general proposition it to be“ plain there is no primd facie duty resting on an executor to give notice.” With the qualification “ primd facie ” this may well be so (an adult and sui juris is presumably cognisant of his rights 5 ) ; but at law, at any rate, the duty “ to pay” raises an obligation to seek out the creditor. Kekewich, J., discusses the same point In re Mackay ,® and makes no distinction between the case where there is the duty “ to pay ” and that where the will directed in case the legatee “ should not return and claim the said house the same shall accrue ” to another. Yet the distinction seems both obvious and material. If property is held in trust for tenants for life or for infants or upon Right to special trusts limiting the right to indemnity, no beneficiary can be Jl^emmty required personally to indemnify the trustee against the whole of the the'tru.st° burdens incident to his legal ownership, and the trustee is held to take estate except the trust with his right to indemnity limited to the trust estate. But wliere cestui where the cestui que trust is sui juris and beneficial owner of the whole q ^j property the right of the trustee to indemnity is not limited to the beneficial trust property, but is a personal obligation of the cestui que trust en- ^ner °^fhe forceable in equity. 7 There is an exception to this principle in the case s ‘ " of trustees of a club. The fundamental condition in the foundation of rjenliam. See also D. 27, 3, 1, § 3 ; D. 26, 7, 5, § 7 ; D. 26, 7, 15 ; Code 5, 37, 22 ; Inst. 3, 27, 2. i L.c. 35. 2 L.c. 32. Sawyer v. Sawyer, 28 Ch. D. 595, 598. 2 Briltlebank v. Goodwin, L. R. 5 Eq. 545, 550. 4 [1904] 2 Ch. 656, 664. 5 “ Presumptions are founded upon the ordinary course of things, ex to quod plerumque fit ” : Evans, Pothier, Obligations, vol. i. 451, citing Cuias. o [1906] 1 Ch. 25, 33. 7 Hardoonv. Belilios, [1901] A. C. 118. Trustees are entitled to their indemnity in priority to the solicitors of a beneficiary who have obtained a charging order under s. 28 of the Solicitors Act, 1860; In re Turner, [1907] 2 Ch. 126. A trustee who has been made to pay personally may have indemnity from the trust estate, _ where the liability has been incurred in the reasonable management of the trust : ’ Bennett v. IF ndharn, 4 De G. F. & J. 259; In re Rayhould, [1900] 1 Ch. 199. NEGLIGENCE IN LAW. No distinc- tion between cestuis quc trust under disability and those sui juris. Trustees are liable who p ly over funds on a forged authority. Non-dis- closure of trust in conveyance. II. Dealing with trust funds. ( 1 ) Acts with a special reference to executors. 1240 [book vit. tx club is that no member as such becomes liable to pay in respect ol his membership any sum beyond his subscription. 1 An attempt to distinguish the liabilities of trustees, as they relate to the property of married women or children, or others under dis- ability, from their liability where the cestui que trust is sui juris, was defeated by the decision of the House of Lords in Shropshire Union Railways and Canal Co. v. The Queen ; 2 a decision not inconsistent with what has been just said, since here the cestui que trust remains only a limited owner ; in the other he is, except formally, absolute owner ; the distinction does not turn on his capacity but on the nature of his estate. Lord Romilly, M.R., held 3 trustees liable to replace funds they had paid over on the faith of a marriage certificate which proved to be forged ; on the ground that the trustees were bound to pay over the fund to the persons entitled to it, and ought to have seen to the genuine- ness of the authority to receive money. 4 The liability of the trustees was thus for personal default. The contention in Carritt v. Real and Personal Advance Co., 5 was that the suppression of notice of a trust in a conveyance to a trustee was a “ misstatement ” “ on the face of any document stating some- thing which was not the truth,” within the remarks of Lord Cairns 6 in the case just noticed, that invalidated the title of the cestui que trust as against a purchaser from the trustee ; but Chitty, J., held that : 7 “ the practice of conveyancers and the convenience of dealing with real property is the justification for keeping the trusts off the face of the deed ” ; and he did not consider himself at liberty to say at this day “ that where purchasers are dealing with real estate or leasehold estate, they are not entited to frame their deed (so long as they do not make any direct misrepresentation on the face of it) according to the ordinary forms used by conveyancers, and according to those forms which disclose part only of the transaction.” II. As to the position of a trustee dealing with trust funds. First, as to acts having special reference to executors. The rule of executors’ liability in regard to tortions or negligent acts is founded on two principles : (1) That, in order not to deter persons from undertaking these offices, the Court is extremely liberal in making every possible allow- ance, and is cautious not to hold executors or administrators liable upon slight grounds ; 1 Wise v. Perpetual Trustee Co., [1903] A. C. 139. 2 L. R. 7 H. L. 490. 3 Eaves v. ITiclcson, 30 Beav. 136. “ This view of mine lias, I believe, been affirmed by the House of Lords in the case of a forgery upon one of the railway companies — Midland Ry. Co. v. Taylor, 8 H. L. C. 751 ” : per Lord Romilly, I\i . R. , Sutton v. Wilders, L. R. 12 Eq. 378. In Hopyood v. Parkin, L. R. II Eq. 74, Lord Romilly, M.R., founding himself on Eaves v. Hickson, held a trustee liable for the loss of a trust fund occasioned by his solicitor’s default. But in In re Speight, Speight v. (taunt, 22 Ch. D. 727, the Court of Appeal overruled the decision (at 701. 768), emphasising the rule that trustees employing properly qualified agents and having no reason to distrust their fitness in all respects for the work on which they employ them, do not guarantee the solvency or honesty of the agents employed, even t hough the agent may be a co-trustee ; in H. L. 9 App. Cas. 1, per Lord Blackburn, 20; Shepherd v. Harri- son, 1 1905] 2 Ch. 310. See also per Stirling, J., Ju re Partington, 67 L. T. 654. •4 Doyle v. Blake, 2 Sch. & Lef. (Ir. Ch.) 231, a case before Lord Redesdalo ; National Trustees Co. of Australasia v. General Finance Co. of Australasia, [ 1905] A. ('. 373, 379. It is in this case (at 375), that Lord Lindley says, “ the great use of a trustee is to commit judicious breaches of trust.” « 42 Ch. 1). 263. Rinmerv. Webster, [1902] 2 Ch. 163, 174. « L. R. 7 H. L. 509. 7 42 Ch. 1). 272. chap, ii.] TRUSTEES AND EXECUTORS. 1247 (2) That care must be taken to guard against any abuse of their trust. 1 The duty of an executor is to collect assets “ with all convenient speed,” 2 to pay all funeral expenses and debts, and to distribute the residue in the way indicated by the will of the testator ; if he fails in any of these respects, subject to the rule just stated, he renders himself personally liable. 3 But an executor who does not prove, yet acts, is answerable only for what he actually receives. 4 No action for negli- gence lies for neglect to prove ; the remedy is to cite the executor who fails to prove into the Probate Court. 5 If the executor retains balances, which he ought to have laid out either in compliance with the express directions of the will or from his general duty, he will be liable ; 6 and if he has funds in hand, and permits debts carrying interest to remain unpaid, he will be liable for the interest. 7 From the nature of an executor’s office it is often necessary for him to keep sums in hand for the making of payments ; and where this is so he will not be liable, “ unless it be shown that all the purposes for which the executor kept the money were answered ” ; 8 but when the Court is of opinion that the executor is needlessly and improperly retaining funds, it will hold him guilty of negligence and breach of trust, and charge him with interest on the sums he thus keeps in his hands. 9 Yet to warrant the Court doing this there must be not a mere mistake, 10 but “ a clear case of improper retention of balances to a considerable or substantial amount.” 11 1 Wms. Exors. (10th ed.) 1435. 2 A special direction to this effect in a will obliges to no more than the ordinary duty implied in the office of an executor, and there must necessarily be some discretion: Buxton v. Buxton, 1 My. & Cr. 80, 93. 2 Lowsonv. Copeland, 2 Bro. C. C. 156; Brown v. Burdett, 40 Ch. D. 244, per Kay, J., 254 ; Powell v. Evans, 5 Ves. 839. Romilly, M.R., was of opinion that the executor is exonerated if it appears that his failure to obtain payment of a sum is not in fact injurious, Clack v. Holland, 19 Beav. 271. In In re Brogden, Billing v. Brogden, 38 Ch. D. 558, North, J., says of this case : “ The law was stated in terms more favour- able to the defendant” “than in any other case which I know.” Cp. East v. East, 5 Hare, 343, 348. The onus is on the executor, where it is shown that the debt existed and that the executor took no step to call it in. “ It might be a justification for the executor to prove that, at the death of the testator, the debtor was utterly insolvent ; but till that is proved, the law assumes the fact to be the other way " : Stiles v. Guy, 16 Sim. 230, affirmed sub nom. Styles v. Guy, 1 Mac. & G. 422. Ex parte Ogle, Ex parte Smith, In re Pilling, L. R. 8 Ch. 711. 4 Lowry v. Fulton, 9 Sim. 104. 5 In re Stevens, [1898] 1 Ch., per Williams, L. J., 177. o Tebbsx. Carpenter, 1 Madd. 290. 2 Hall v. Hallet, 1 Cox (Ch.), 134, commented on by Bacon, V.C., Nant-y-Clo and Blaina Ironworks Co. v. Grave, 12 Ch. D. 747. In re Stevens, [1898] 1 Ch. 162. See In re Baker, 20 Ch. D. 230 : not to sue for a specialty debt for any period short of the period of limitation is not negligence which will deprive the creditor of his right to payment. Where, in an administration suit, there is a fund in Court a creditor may come in, though the time appointed has long elapsed: Harrison v. Kirk, [1904] A. C. I. Re Posllewaile, 59 L. T. 58, 60. 8 Dawson v. Massey, 1 Ball. & B. (Ir. Ch.) 231 and note ; Forbes v. Ross, 2 Cox (Ch.), 113 ; Flanagany. Nolan, 1 Moll. (Ir. Ch.) 84. 9 Liltlehales v. Gascoyne, 3 Bro. C. C. 73 ; also see 107, 433 ; Forbes v. Ross, 2 Cox (Ch. ), 113 ; Seers v. Hind, 1 Ves. 294. The payment of interest by executors and trustees when compelled to refund is treated by Chitty, J., in In re Hulkes, 33 Ch. D. 552, dissenting from Saltmarsh v. Barrett (No. 2), 31 Beav. 349, and following A.-G. v. Kohler, 9 H. L. C. 654, and A.-G. v. Alford, 4 De G. M. & G. 843. See Masonic General Life Assurance Co. v. Sharpe, [1892] 1 Ch., per Lindley, L.J., 170: “The trustee is treated as if he had the funds still in his hands.” Bruere v. Pemberton, 12 Ves. 386. 11 Jones v. Morrall, 2 Sim. N. S. 241, 252; Davenport v. Stafford, 14 Beav. 319; 2 De G. M. & G. 901. For the law as to legacies and the executor’s duty with regard to them, see Ashburner v. Maguire, and the notes to it, in 1 White & Tudor, L. C. in Equity (7th ed.), 780. * Duty of executor. Where he retains funds in hand. Executor de son tort. Trust to accumulate. Lord Eldon’s view, and Sir William Grant, M.R.'s Distinction noted by Sir Thomas PI inner. Comment. 1248 NEGLIGENCE IN LAW. [book vii. The sole title of an executor is the production of probate ; but one who, without being executor, intermeddles with the deceased’s estate as if he were executor makes himself executor de son tort, that is, executor generally. 1 Thus where executors of a foreigner meddle with his property in the jurisdiction of the English crown they become executors de son tort 2 to the extent of the assets received by them. “ Where there is an express trust to make improvement of the money [a trust to accumulate], if he [the trustee] will not honestly endeavour to improve it, there is nothing wrong in considering him, as the principal, to have lent the money to himself upon the same terms upon which he could have lent it to others, and as often as he ought to have lent it, if it be principal ; and as often as he ought to have received it and lent it to others, if the demand be interest, and interest upon interest.” “ This is a species of case, in which the Court would shamefully desert its duty to infants by adopting a rule, that an executor might keep money in bis hands without being answer- able, as if he had accumulated ; and, if the Court cannot find out from the actual circumstances proved that he has attempted accumulation, and the charge falls more heavily upon him on that account, the fault is his own 3 in not showing what endeavours to improve it he had made.” 4 And this was fully accepted by Sir William Grant, M.R. : “ The Court says [to the trustee], ‘ if you neglect your duty and keep the money yourself, your obligation is to put the infant in the same situation as if you had not done so.’ The Court does not inquire into the par- ticular benefit that has been made ; but fastens upon the party an obligation to make good the situation of the cestuis que trust. ” 5 Yet there is a qualification to be kept in mind. “ If the executor has balances which he ought to have laid out, either in compliance with the express directions of the will or from his general duty, even when the will is silent on the subject, yet if there be nothing more proved in either case, the omission to lay out amounts only to a case of negli- gence and not of misfeasance.” 6 In the case before him the Vice- Chancellor held the facts to show “ a case of negligence,” and the executors were charged the usual interest at £4 per cent. One expression used by the Vice-Chancellor seems to require explanation. The correct antithesis plainly is not between mis- feasance and negligence, but between that gross negligence which, in the words of the civil law, plane dolo comparabitur, 1 and failure to attain that standard of care, quo plerique ejusdem conditionis homines 1 Pauli v. Simpson, 9 Q. B. 365, 370; but the mere handing goods on to another is not sufficient. 2 A.-G. v. New York Breweries Co., [1898] 1 Q. B. 205, [1899] A. C. 62. 3 In the report in 1 1 Ves. at 108, this is printed “ the fault is not his own,” an obvious misprint. 4 Raphael v. Boehm, 11 Ves., per Lord Eldon, C., 107, 108; 13 Ves. 591, considered Tebbs v. Carpenter , 1 Madd. 290, 300 ; Heighington v. Grant. 5 My. & Cr. 258 ; 1 Ph. 600, 604 ; Feltham v. Turner (1870), 23 L. T. (N. S.) 347. The question of the liability of trustees to pay compound interest is considered in a note (c). 2 Kent, Comm. 231. the conclusion of which is that aut hority and the reason of t he thing preponderate alike in favour of the allowance under the limitations stated in the note, and that the total abandonment of the rule would operate in many cases most unjustly as respects the right of the cestui que trust, and woidd introduce a lax discipline that would be dangerous to the vigilant and faithful administration of trust estates. Trustees have now to accumulate the residue of the income of infants after payments for maintenance and education under the Conveyancing and Law of Property Act, 1881 (44 it 45 V iet, e. 41), s. 43, sub-s. 2. In re Holford, [1894] 3 Ch. 30 ; In re Bowlby, | 1 904] 2 Ch. 685. 5 Dorn/ord v. Dorn/ord, 12 Ves. 129 ; Brown v. Sansomc, McClel. it Younge (Ex.), 427 — a banker trustee unnecessarily retaining trust funds. . o Tebbs v. Carpenter, 1 Madd. 307. 7 D. 11,0. 1 § 1. TRUSTEES AND EXECUTORS. 1240 CHAP. II.] solent pervenire ; or, perhaps, between a recklessness which connotes culpability, and heedlessness which only marks a falling short of the amount of diligence due in the circumstances . 1 A loss sustained by the cestui que trust, through the trustee neg- Trustee lecting his duty to invest, renders the trustee chargeable to the extent of the loss, and irrespective of whether he derives benefit from the i° s s arisin° breach of trust or not . 2 from neglect An executor must not carry on the trade of his testator unless toinvest - expressly authorised to do so ; 3 where he is directed to do so, the Executor not trade and the debts are, so far as personal liability goes, looked at as tTadeof his his own ; 4 he is nevertheless entitled to go for indemnity to the fund testator applied to carry on the business, but not to the general funds of the unless testator , 5 while the creditors of the business have only the same right . 6 authorised But if executors carry on a business under an authority given by the \y here will of their testator, they are entitled to a general indemnity out of the business estate as against all people claiming under the will. carried on Where the rights of creditors of the testator intervene other con- ex " siderations arise. The fact that creditors stand by while executors authority in are carrying on a business so as to be able to sell it as a going concern, testator’s will, indeed, entitle the executors, even against the creditors, to an , indemnity from the liabilities properly incurred in doing so ; but k^ lt ‘ 01 s there is a difference wdiere executors carry on a business for purposes intervening, beyond what is necessary for effecting a sale. In this latter case the mere fact that a creditor stands by and does not immediately enforce his debt will not entitle the executors, as against him, to be indemnified out of the estate ; still, if there be circumstances which infer that the business was carried on with the assent of the creditors and for their benefit, then the executors are entitled to an indemnity out of the whole estate, and not merely out of the assets which come into existence subsequently to the testator’s death . 7 The law is summed up by Lord Macnaghten 8 as follows : “ If the Rule of law business has been properly continued as between the executors and ^ the creditors, or if the creditors choose to treat it so, which comes to 1-hten the same thing, the executors are entitled to be indemnified against in Dowsev. all liabilities properly incurred in carrying it on. If it has been im- Gorton. properly continued and the creditors choose to treat the continuance as improper (which, of course, they are not bound to do), they may 1 2 Spence. Eq. Jur. 192 ; Byrchall v. Bradford, Madd. & Geld. 13. In Holmes v. Bring , 2 Cox (Cli. ), 1, Sir Lloyd Kenyon said : “ It was never heard of that a trustee could lend an infant’s money on private security. This is a rule which should be rung in the ears of every person who acts in the character of trustee, for such an act may very probably be done with the best and honestest intention, yet no rule in a Court of Equity is so well established as this.” The principal amount decreed was made payable with interest at £4 per cent. For the general characteristics of the rule of liability of trustees, see Wharton, Negligence, §§ 515, 535. 2 Lord Montfordy.Lord Cadogan,\1 Ves.485 ; 19 Ves.633 ; lnre Parker, 19 Q. B. D.84. 2 Kirkman v. Booth, 11 Beav. 273; In re Chancellor, Chancellor v. Brown, 26 Ch. D. 42. See Law Quarterly Review, vol. ix. 331-340, Indemnity of executor continuing testator’s business. 4 Farhall v. Farhall, L. R. 7 Ch. 123. A judgment de bonis propriis against an executor is erroneous where the action is upon a contract of his testator’s and a devastavit is not proved. Smith v. Chapman, 93 U. S. (3 Otto) 41. 5 Fraser v. Murdoch, 6 App. Cas., per Lord Selborne, C., 866. 6 Strickland v. Symons, 26 Ch. D. 245. Shearman v. Robinson, 15 Ch. D. 548, holds that the creditors’ right is merely to be put in the place of the executor. See In re Blundell, Blundell v. Blundell, 44 Ch. D., per Lindley, L. J., 1 1. 7 Dowse v. Gorton, [1891] A. C. 190. As to the liability of an executor generally for carrying on his testator’s trade, 2 Wins. Executors (10th ed. ), 1 430. * Dowse v. Gorton, [1891] A. C. 203. 1 250 NEGLIGENCE IN LAW. Where executors carry on business at the instance of creditors. Executor bound to account for all profits. [book VII. proceed in the proper way to make the executors accountable for the value of the assets used in carrying on the business, and they may also follow the assets and obtain a charge on the business in the hands of the executors for the value of the assets misapplied, with interest thereon ; and they may enforce the charge, if necessary, by means of a receiver and a sale. Then there can be no room for any claim to indemnity on the part of the executors. The charge in favour of the trust estate must be satisfied first. The executors can only take what is left. But the creditors must do one thing or the other. Though they are not bound by what they do in ignorance, and may, by leave of the Court, sue in respect of wilful default after having taken the usual order, they cannot approbate and reprobate in one breath. They cannot claim the assets of the business as a going concern in the state and condition in which those assets happen to be at the moment when they choose to intervene, and at the same time refuse the executors’ indemnity in respect of liabilities incurred in carrying on the business.” If, again, a business is carried on by executors at the instance of creditors, but without authorisation by the will, the relation between the executors and the creditors would appear to reduce itself to a case of the law of principal and agent. Various doctrines were at one time current as to the circumstances in which an executor might employ the assets of his testator’s estate in trade , 1 and distinctions were drawn between solvent and insolvent executors , 2 and assets specificially bequeathed and general assets . 3 An uniform rule is now established : that the executor is bound to account for all profits, however derived, to the estate of his testator . 4 The beneficiary has his option either to take the profit or to charge the executor with interest . 5 The executor will be held to employ money i Ratcliff v. Graves, 2 Cas. in Ch. 152. 2 Adams v. Gale, 2 Atk. 106. 3 Child v. Gibson, 2 Atk. 603. 4 Vyse v. Foster, L. R. 7 H. L. 318, 329. In the Court of Appeal, L. R. 8 Ch. 333, James, L.J., said: “ It was pointed out by Lord Cranworth, in A.-G. v. Alford (4 De G. M. & G. 851) : that this Court has no jurisdiction in this class of cases to punish an executor for misconduct by making him account for more than that which he actually received, or which it presumes he did receive or ought to have received. This Court is not a Court of penal jurisdiction. It compels restitution of property unconscientiously withheld ; it gives full compensation for any loss or damage through failure of some equitable duty ; but it has no power of punishing any one. In fact, it is not by way of punishment that the Court ever charges a trustee with more than he actually received, or ought to have received, and the appropriate interest thereon. It is simply on the ground that the Court finds that he actually made more, con- stituting moneys in his hands ‘ had and received to the use ’ of the cestui que trust. A trustee, for instance, directly lending money to his firm is answerable for such money, with full interest, to the uttermost farthing ; but to make him answerable for all the profits made of such money by all the firm would be simply a punishment — a punishment arbitrary and most unreasonable in this, that its severity would be in the inverse ratio of the gravity of the offence. A man squandering trust-money with deliberate dishonesty in profligate extravagance would bo answerable for it with 4 per cent, interest ; a man lending it (at good interest) to a large, solvent, and prudent well-established firm of which he was a partner, would be punished by a fine equal to all the profits made thereby by all the partners.” See Stroud v. Gwyer, 28 Beav. 130, and Jones v. Foxall, 15 Beav. 388, with Lord Selborne’s comment in Vysc v. Foster, L. R. 7 H. L. 346. In re Montagu, [1897] 2 Ch. 8. & Usually at the rate of 4 per cent., unless some higher rate of profit has been obtained : Emmet v. Emmet, 17 Ch. D. 142 ; or where the executor is guilty, not merely of negligence, but of actual corruption or deliberate breach of trust, when £5 percent, will be allowed : Ex parte Ogle, L. R. 8 Ch. 711. In In re Davis, [ 1 902] 2 Ch. 317, Farwell, J., followed the rule laid down by James, L.J., in Vysc v. Foster, L. R. 8 Ch. 329: “If an executor or trusteo makes profit by an improper dealing with the assets or the trust fund, that profit ho must givo up to the trust. If that improper dealing consists in embarking or investing the trust-money in business, lie must account, for the profits made by him by such employment in such business; or at the option TRUSTEES AND EXECUTORS, CHAP. II.] 1251 in trade if, being a trader, he places it to his own banking account ; since thereby he procures himself a credit not his due . 1 An executor is not liable for bad judgment ; nor is one executor Executor not bound to surrender his own judgment because one of his co-executors f ' )r t biwl has a different opinion from himself; so that he will not be liable in J " °‘ utl1 ’ the event of his view proving wrong while that of his co-executor turns out right, and the testator’s estate suffers injury from not acting on it . 2 There is no absolute rule fixing the time from which executors who When assets have neglected to realise assets outstanding upon improper investments to l |! J ( are to be liable ; generally the conversion should take place within 1 1 1 lht ' a year from the testator’s death. Accordingly, in the event of an action being brought, executors who have not realised by that time have the onus thrown on them to justify their inaction , 3 unless they have an absolute discretion to postpone the conversion ; in which case they will not be liable where loss occurs, even though some of the property consists in shares in unlimited companies . 4 In deciding whether a reasonable discretion was exercised or not the Court will look into all the circumstances of the case, such as the nature of the investment, the confidence the testator had in the investment, the efforts made by the executor to realise, the state of the market, and the length of time that had elapsed since the testator’s death . 5 In the case of legacies payable under a general disposition in a Rule as to testator’s will, the same rule of a distribution within a year is applicable, distribution The test is, when might a distribution be made if the trustees act with reasonable diligence ? The presumption is that “ a year after the death of the testator is the period within which his property might with reasonable diligence be administered.” 6 An executor is liable to refund, who, having received the assets 7 Where of the cestui que trust, or if it does not appear, or cannot be made to appear, what profits are attributable to such employment, he must account for trade interest, that is to say, interest at 5 per cent.” See Hall v. Hallet, 1 Cox (Ch.), 134. In De Cordova v. De Cordova, 4 App. Cas. 692, interest was allowed against executors of a testator domiciled in Jamaica at the rate of 6 per cent. 1 Treves v. Townshend, 1 Bro. C. C. 384. 2 Buxton v. Buxton, 1 My. & Cr. 80, followed in Marsden v. Kent, 5 Ch. D. 598. See The Heirs Hiddingh v. Denyssen, 12 App. Cas. 624. As to failure to exercise a dis- cretion, Gainsborough ( Earl oj ) v. Watcombe Terra Cotta Co. (1885), 54 L. J. Ch. 991 ; In re Owens, 47 L. T. 61, where Jessel, M.R., says at 64 : “ Sec. 37 of the Conveyancing and Law of Property Act, 1881, will have to be considered. It may have a revolutionary effect on this branch of the law. It looks as if the only question left would be, whether the executors have acted in good faith or not ” ; see In re Agg-Gardner, 25 Ch. D. 600. Sculthorpe v. Tipper, L. R. 13 Eq. 232. 3 Grayburn v. Clarkson, L. R. 3 Ch. 605 ; Hughes v. Empson, 22 Beav. 181. * In re Norrington, 13 Ch. D. 654. s The Heirs Hiddingh v. Denyssen, 12 App. Cas. 624. See Churchill v. Lady Hobson, 1 P. Wins. 241, where testator had made one of his executors his banker during his life. This decision has been questioned. But see also Chambers v. Minchin, 7 Ves. 186, 198 ; Vin. Abr. Trust (N. a). Co-trustee, Chargeable how far for the Acts and Receipts of the other, pis. 8, 9. In Home v. Pringle, 8 Cl. & F. 264, the mere fact of trustees allowing balances to remain against their agent, at the annual settlement of his accounts, where it is impossible to include his whole receipts and payments for the year, was held not a breach of trust or such culpable negligence as would make them liable for the ultimate balances due from him to the trust. In Wyman v. Paterson, [1900] A. C. 271, trustees were held liable. 6 Brooke v. Lewis, Madd. & Geld., per Leach, V.C., 359. 7 Candler v. Tillett, 22 Beav. 257, 263. In Gasquoine v. Gasquoine, [1894] 1 Ch. 470, it is said by Kay, L.J., at 477, that the proposition in Candler v. Tillett, that an executor who does an act by which his co-executor obtains sole possession of a part of the testator’s estate, is liable for the co-executor’s misapplication of it, must be read “ who unnecessarily does an act.” An act is not “ unnecessary ” if it is done in the regular course of business in administering the property. executor is liable to refund. 1 252 NEGLIGENCE IN LAW. Effect of giving receipts. Transmission of money amongst executors. Sir William Grant’s rule. Lord Eldon’s reason for the rule. BOOK VII. of his testator, voluntarily , 1 and without sufficient excuse , 2 parts with any portion of them to his co-executor, who but for that act could not have obtained possession of them, so that they are embezzled or lost . 3 If funds are handed over to facilitate the performance of some duty of the executorship, for instance, the payment of debts in the ordinary course, the law is otherwise ; 4 for “ he is considered to do this of necessity ; he could not transact business without trusting some persons, and it would be impossible for him to discharge his duty if he is made responsible where he remitted to a person to whom he would have given credit, and would in his own business have remitted money in the same way.” 5 So, too, it is said by Lord Redesdale in the case just cited : 6 “If a receipt be given for the mere purposes of form, then the signing will not charge the person not receiving [the fund in respect of which the receipt is given] ; but if it be given under circumstances purporting that the money, though not actually received by both executors, was under the control of both, such a receipt shall charge, and the true ques- tion in all those cases seems to have been, whether the money was under the control of both executors ; if it was so considered by the person paying the money, then the joining in the receipt by the executor who did not actually receive it, amounted to a direction to pay his co- executor ; for it could have no other meaning ; he became responsible for the application of the money just as if he had received it.” The. rule affecting transmission of money from one executor to another as laid down by Sir William Grant, M.R ., 7 is, that “if an executor does any act, by which money gets into the possession of another executor, the former is equally answerable with the other ; not, where an executor is merely passive, by not obstructing the other in receiving it. But if the one contributes in any way to enable the other to obtain possession, he is answerable ; tmless he can assign a sufficient excuse.” An executor, or trustee, may not sell his testator’s property to himself ; and any such attempted sale will be declared void at the suit of one person among many interested, and even if such person’s actual interest may probably be reduced to nothing by prior claims . 8 The reason for the universality of this rule is stated by Lord Eldon, C ., 9 to rest on the consideration that “ as no Court is equal to the examination and ascertainment of the truth in much the greater number of cases,” the general interests of justice require such trans- actions to be set aside in every instance. Yet as a purchase by a trustee of trust property, or a sale to the trust of a trustee’s own property is not void, but voidable, it may be confirmed either directly or by long acquiescence and absence of election. i This, of course, is not so where the executor has no legal right to retain : Davis v. Spurting, 1 Russ. & My. 64. 2 Langford v. Gascoyne, 1 1 Ves. 333. 3 Townsend v. Barber, 1 Dick. (Ch.) 356. 4 Bacon v. Bacon, 5 Ves. 331. Cp. Speight v. Gaunt, 0 App. Cas. 1 . • 5 Per Lord Redesdale, Joyv. Campbell, 1 Sch. & Lef. (Ir. Ch.) 328, 341. 6 L.c. 341. As to these cases, Bacon v. Bacon, and Joy v. Campbell, see per Jessel, M.R., Speight v. Gaunt, 22 Ch. D. 743, 744. As to the greater rights creditors may have than legatees, see Doyle v. Blalce, 2 Sch. & Lef. ( Ir. Ch. ) 231, 230. 7 Langford v. Gascoyne, 11 Ves. 333, 335; Underwood v. Stevens, 1 Meriv. 712; Williams v. Nixon, 2 Beav. 472. s Beningfic.ld v. Baxter, 12 App. Cas. 167 ; Re Postlethwaite, Postlethwaite v. Hickman, 59 L. T. 58. As to transfer of assets by executor to his bankers to secure executor’s debt, Hill v. Simpson, 7 Ves. 152. 9 Ex parte James, 8 Ves. 337, 345; Carter v. Palmer, (1842) 8 Cl. & F., per Lord Cottenham, 706; Luddy's Trustees v. Peard, (1886) 33 Ch. I). 500. TRUSTEES AND EXECUTORS. 1253 CHAI\ II.] Those buying from an executor cannot safely trust to his title to Purchase sell. “ Common prudence required that they should look at the will frorn an and not take the debtor’s word as to his right under it. If they neglect ‘ c ° ' that, and take the chance of his speaking the truth, they must incur the hazard of his falsehood. The rights of third persons must not be affected by their negligence. I do not impute to them direct fraud ; but they acted rashly, incautiously, and without the common attention used in the ordinary course of business.” “ It was gross negligence not to look at the will under which alone a title could be given to them. It was not necessary to use any exertion to obtain information, but merely not to shut their eyes against the information which, without extraordinary neglect, they could not avoid receiving. No transaction with executors can be rendered unsafe by holding that assets trans- ferred in such circumstances can be followed.” 1 Second, as to acts which have no special reference to executors. (2) Acts with It is the duty of trustees to see that all those acts are done which are necessary or expedient to put the trust property in security and executors, out of the power of strangers to the trust to deal with it. A trustee They must must, in Sir John Romilly, M.R.’s, emphatic words , 2 “ make it im- put the trust possible for his co-trustee to receive and misapply the trust fund.” property m He is bound to invest trust-moneys not wanted for the immediate j, p _ . , J i-ip i Bound to purpose oi their trust, and cannot excuse himselt on the ground that invest. he did not himself use the money, but placed it to a separate account at the bankers . 3 The general rule is, that if a trustee is guilty of unreasonable delay in investing a fund, or, if it is his duty to pay, in paying it over to the beneficiary, he will be liable for interest for the period of his unnecessary delay in doing so . 4 The rule is similar with regard to money outstanding upon personal Money out- securityl Though trustees are not to rush into litigation, they will standin S on not be justified in merely applying by lawyer’s letter for payment of a securit v debt, even if (the trustee being an executor) the debt was a loan by the testator himself ; 5 but unless there is a well-founded belief on the part of the trustees that an action would be useless they must follow up their letter by legal proceedings . 6 The burden of proving the futility of coercion lies on the trustees . 7 Where the trustees were to get in settlement money whenever they Must regard “ shall think fit and expedient so to do,” they are not entitled to stay their hands from enforcing payment on account of the interest of the beneficiaries, tenant for life without regard to that of all the cestuis que trust} 1 Hill v. Simpson, 7 Ves., per Sir Wm. Grant, M.R., 170; Wilson v. Moore, 1 My. & K. 126. Foxton v. Manchester, &c. District Banking Co., 44 L. T. 406. 2 Dix v. Burford, 19 Beav. 409, 413; Macnamara v. Carey, Ir. R. 1 Eq. 9; Jacob v. Lucas, 1 Beav. 436 ; Kingdon v. Castleman, 46 L. J. Ch. 448 ; Woodhousev. Woodhonse, L. R. 8 Eq. 514 ; Walker v. Linom, [1907] 2 Ch. 104. Post, 1259. 3 Ashburnham v. Thompson, 13 Ves. 402 ; Younge v. Combe, 4 Ves. 101. * Ticknerv. Smith, 3 Sm. & G. 42, and cases cited in Blogg v. Johnson, L. R. 2 Ch. 225. 5 Powell v. Evans, 5 Ves. 839 ; for “ personal security changes from day to day by reason of the personal responsibility of the party giving the security ” : Bailey v. Gould, 4 Y. & C. (Ex.) 226. s Low-son v. Copeland, 2 Bro. C. C. 156. This is the case though the outstanding debt is in the hands of a co-executor, who was treated as a private banker by the testator: Styles v. Guy, 1 Mac. & G. 422. In Yeatman v. Yeatman, 7 Ch. D. 210, mere refusal to sue was held not sufficient to justify a legatee in suing an executor and an alleged debtor for loss of assets. The test suggested was whether a party should be allowed to institute such a suit after refusal by the legal representative to sue ; Meldrum v. Scorer, 56 L. T. 471 ; Barker v. Birch, 1 De G. & Sm. 376. 7 In re Brogden, 38 Ch. 1). 546 ; In re Stevens, [1898] 1 Ch. 162, 171. 8 Luther v. Bianconi, 10 Ir. Ch. R. 194. 1254 NEGLIGENCE IN LAW. [book vir. May com- pound a debt Trustee Act, 1893, s. 21 . Other powers conferred on trustees. Judicial Trustee Act, 1896. In the bond fide exercise of a discretion trustees may always com- • promise a debt or otherwise deal with it without incurring a personal liability; 1 and it is no ground for liability that they refuse a com- promise. 2 Now, by the Trustee Act, 1893, 3 (1) An executor or administrator may pay or allow any debt or any claim on any evidence he may think sufficient ; 1 (2) An executor or administrator or two or more trustees acting together, or a sole trustee where the instrument creating his authority so authorises, 5 may accept any composition or may allow any time for payment of any debt, or settle it in any way that seems to him or them expedient, without being responsible for any loss occasioned by any act or thing so done by him or them in good faith ; (3) The enactment applies to trusts where the trust deed docs not express a contrary intention ; and is retrospective. The Trustee Act, 1893, also confers powers on trustees of renewable leaseholds to renew their leases and to raise money for the purpose. 6 Trustees are besides exonerated by the same Act for acting or paying money in good faith under powers of attorney which are in fact avoided by death or act of the party ; and they are indemnified against any other than their own acts and defaults in respect of money, and securities actually received by them, 7 notwithstanding the signature of any receipt for the sake of conformity. 8 The Court of Chancery has always exercised the power of dealing with the property of cestuis que trust under disability in a way not provided for by the trust deed. The principle on which the Court acts is a comprehensive one. It disclaims any general power to dis- regard a trust, but “ in cases of emergency, cases not foreseen or pro- vided for by the author of the trust, where the circumstances require that something should be done ” the Court will authorise action beyond the express provisions of the trust instrument. Mere benefit to accrue to the estate does not justify interference ; and each case must be brought before the Court and dealt with in its individual aspect. 9 By the Judicial Trustees Act, 1896, 10 in any case where a trustee has been guilty of a breach of trust “ but has acted honestly and reasonably and ought fairly to be excused for the breach of trust and for omitting to obtain the directions of the Court in the matter in which he com- mitted such breach ” jurisdiction is given to relieve the trustee from personal liability. 1 Pennington v. Healey, 1 Cr. & M. 402 ; Forshaio v. Iligginson, 8 Do G. M. & G. 827, citing, at 834, Blue v. Marshall, 3 P. Wms. 381. 2 Ex parte Ogle, L. R. 8 Ch. 711. 2 56 & 57 Viet. c. 53, s. 21, re-enacting 44 & 45 Viet. c. 41, s. 37. 4 See Re Owens, 47 L. T. 61. The extension to an administrator is new : In re Clay and Tetley, 16 Ch. D. 3 ; I Vest of England and South Wales Bank v. March, 23 Ch. D. 138. Inre Houghton, [1904] 1 Ch. 622. 5 By sec. 22 (1) the survivor may exercise a joint power, unless (he contrary is expressed in the instrument ; see Crawford v. Forshaw, [1891] 2 Ch. 261. 6 Sec. 19. 7 Sec. 23. s Sec. 24. For the definition of “ securities ” see sec. 50. As to a trustee’s liability for the insolvency of his agent, see Brier v. Evison, 26 Ch. D. 238 ; for his agent's negli- gence, Benclt v. Wyndham, 4 De G. F. & J. 259 ; for his felonious act, Johson v. Palmer, [1893] 1 Ch. 71. » Inre New, [1901] 2 Ch. 534; In re Tollemache, [1903] 1 Ch. 955. io 59 & 60 Viet. c. 35, s. 3. In Chapman v. Browne, [1902] 1 Ch. 785, relief under the section was refused because though the trustee had acted “ honestly,” he bad not acted “ reasonably ” ; and in National Trustees Co. of Australasia v. General Finance Co. of Australasia, [1905] A. C. 373 (under the identical Victorian Act), because though the trustees had acted “ honestly and reasonably,” they made no attempt to replace the fund or to excuse their inaction. I n re Stuart, [1897] 2 Ch. 583. chap, ii.] TRUSTEES AND EXECUTORS. 1255 When the money which is the subject of a trust is not forthcoming, Onus on tho it is not for the cestuis que trust to show that if the trustee had done his j^u^e him duty the loss would have been avoided ; it is for the trustee to explain se if w h en and excuse the loss. “ The rule is well laid down by Lord Cottenham trust fund in the case of Clough v. Bond, 1 that where a trustee does not do that Iost - which it is his duty to do, prima facie he is answerable for any loss occasioned thereby.” 2 “ Once show that he has neglected his duty and prima facie he is answerable for all the consequences of that neglect.” 3 A trustee must not place himself in a situation where his interests Trustee must and his duty conflict. “No person in whom fiduciary duties are n°ttakea vested shall make a profit of them by employing himself, because in ^he'reTis doing this he camiot perform one part of his trust— namely, that of interest and seeing that no improper charges are made.” 4 his duty are But so wholesome a principle as this may be carried beyond reason ; 111 co 10 ' as happened in the Victoria case of Clark v. Clark, 5 where a purchaser of a business was named executor in the will of the deceased owner, but never acted, and subsequently renounced by deed. The Victoria Court held that “ until a person appointed executor unmistakably divests himself of that character or by his solemn act puts it out of his own power ever to clothe himself with it, he is as much incapacitated from purchasing from his co-executor as if he had obtained probate.” The Privy Council reversed this, holding that “ a man so placed might possibly use his power in such a way as to raise a case for setting aside the transaction,” but that this was a question of evidence, of which in the case before the Court there was none to invalidate the purchase. The case where a man had been a trustee, but had for twelve years previously to the impugned purchase retired, was treated by Buckley, J., as within the same principle. 6 The custody of title-deeds and convertible securities suggests a Custody of point of special importance. If in the execution of a trust there is no title-deeds need to deal -with title-deeds, which may perhaps be locked up for years ^tible" without any call to refer to them, a deposit of them in a bank or a safe securities, deposit, in a box of which the trustees keep the key, is a proper mode of bestowing them. If they are required from time to time the deposit with a solicitor is justified so long at any rate as there is occasion to refer to them from time to time, and probably longer. If the trust property consists of bonds and certificates payable to bearer, they can- not without negligence be left under the control of a solicitor, 7 but they may be left with a banker, since it is the ordinary course of business to leave bonds with bankers who discharge the duty of cutting off the interest coupons as they become due and collecting the interest ; never- 1 3 My. & C. 490, 496. 2 Inre Brogden, 38 Ch. D., per Cotton, L.J., 567. 3 L.c. 568. 4 Broughton v. Broughton, 5 De G. M. & G., per Lord Cranworth, 164. In re Doody, [1893] 1 Ch. 129, where Cradock v. Piper, 1 Mac. & G. 664, is commented on ; In re Smith's Estate, [1894] 1 Ir. R. 60 ; In re Fish, [1893] 2 Ch. 413 ; In re Webb, [1894] 1 Ch. 73. Formerly the equitable estate of a cestui que trust in land or in the proceeds of the sale of land devised on trust for conversion, dying intestate vested in the trustee : Burgess v. Wheate, 1 Eden, 177 ; Gallard v. Hawkins, 27 Ch. D. 298 ; but by the Intestates Estate Act, 1884 (47 & 48 Viet. c. 71), s. 4, “ the law of escheat shall apply in the same manner as if the estate or interest above-mentioned were a legal estate in corporeal hereditaments.” See per Lord Eldon, Walker v. Symonds, 3Swanst. 62, commenting on Lord Northington’s views in Harden v. Parsons, 1 Eden 145. s 9 App. Cas. 733. 6 In re Boles and British Land Company's Contract, [1902] 1 Ch. 244. 7 Field v. Field, [1894] 1 Ch. 425. VOL. II. 2 L NEGLIGENCE IN LAW. Trust invest- ments. Trustees not j ustified in lending on personal security. Trustees must deal impartially. Trustees may in certain cases make an advance upon a per- sonal under- taking. 1256 [book VII. t lieless the bankers would not be justified in parting with the bonds without the authority of all the trustees . 1 The determination of the question in what funds trust property may be invested without negligence depends largely on the terms of the trust . 2 Yet there are some general principles which must be glanced at. Trustees will not be justified in lending on personal security, such as a promissory note , 3 unless specially authorised to do so by the instrument creating the trust, even to a person to whom there is the clearest evidence that their trustor would have lent on the same security ; for personal security fluctuates from day to day, and the trustees are to exercise their own, not their trustor’s, discretion . 4 Even where specially authorised to lend on personal security they will not be allowed to lend to one of their own number . 5 Moreover, a power to lend on personal security must be strictly construed as against the trustee . 5 Trustees must deal impartially between the various interests they have in charge, not preferring the tenant for life to the remainder-man, nor yet sacrificing him . 7 Where trustees have a power to advance money on “ real or personal security,” they may make an advance upon a person’s personal under- taking as distinguished from the security of personal property . 8 This is subject to the requirement of reasonable care and caution in making an investment of that class. Words so wide as a direction that trust- 1 In re De Pothonier, [1900] 2 Ch. 529 ; In re Sisson's Settlement, [1903] 1 Cli. 262. 2 In Ritchies v. Ritchie's Trustees, 15 Rettie, 1086, the purchase of fully paid-up stock in a limited company was held not an “ investment.” “ I think,” said Lord Craighill, at 1093, “ it was a partnership in a company, and the trustees became partners. The shares that were bought formed their contribution of the capital. But there can be no investment of money properly so called where the trustees become partners ” ; sed quaere. See Re Norwich and Norfolk Provident Building Society, 45 L. J. Ch. 785, for an “ investing ” member of a building society. As to “ invest- ments,” see Arnould v. Grinstead, 21 W. R. 155. In re Hurst, Addison v. Topp, 67 L. T. 96 ; 8 Times L. R. 528 (C. A.). 3 Per Lord Hardwicke in Ryder v. Bickerton, 3 Swanst. 80 n. ; per Lord Lough- borough in -4 dye v. Feuillelan, 3 Swanst. 84 n. ; Holmes v. Bring, 2 Cox (Ch.), 1 ; Terry v. Terry, (1708) Prec. Ch. 273, where an executor and trustee with “ power by the will to act in everything for the advantage of an infant,” was held justified in laying out personal estate in the purchase of lands for the infant, with the saving that “ if he lends the money on bad security, he must answer it out of his own pocket.” The Lord Chancellor (Cowper) having decreed that a sum lent by the trustees on a personal bond and lost should be refunded by them, said “ he did this for example to discourage men from taking single personal bonds; and that, considering the con- tingencies and hazards of trade, a man’s bond for £100 that is to lie any time, is not security for above £50, and so lie would take this.” Darke v. Martyn, 1 Beav. 525, where executors deposited part of the assets with a banker and took two bankers’ notes carrying interest for the amount ; Moyle v. Moyle, 2 Russ. & M. 710, money lying upwards of a year with bankers. In Walker v. Symonds, 3 Swanst. 63, it is pointed out that the old doctrine that “if a man be trusted with money as executor or otherwise for children’s portions ” “and if he let it out to such men as are trusted and esteemed by others to be men of worth and ability, if any loss happen, he shall not bear the loss thereof ” is clearly overruled, and that to invest trust money on personal security is a breach of trust. The purchase of an equity of redemption is not an investment which trustees would be justified in making under the common form of a power of investment : Worman v. Worman, 43 Ch. D. 296. 4 Styles v. Guy, 1 Mac. & G. 422; Boss v. Godsall, 1 Y. & C. (Ch.) 617. This overrules Lord Dorchester v. Effingham, Tamlyn, 279, where Sir John Leach, M.R., “ thought no blame could be imputed to executors, who employed the same persons as the testator had placed confidence in.” 5 Forbes v. Ross, 2 Bro. C. C. 430 ; Francis v. Francis, 5 De G. M. & G. 108. 6 Cocker v. Quayle, 1 Russ. & My. 535 ; Greenham v. Gibbeson, 10 Bing. 363. i Cockburn v. Peel, 3 De G. F. & J. 170 ; Stuart v. Stuart, 3 Beav. 430 : Stcivart v. Sanderson, L. R. 10 Eq. 26 ; In re Boyces, Minors, Ir. R. 1 Eq. 45 ; Costello v. O'Rorke, Ir. R. 3 Eq. 172. 8 Pickard v. Anderson, L. R. 13 Eq. 608 ; Forbes v. Ross, 2 Bro. C. C. 430. TRUSTEES AND EXECUTORS. 1257 CHAP. II.] money should be placed out “ to interest or other way of improve- ment ” will not be construed as an authority for using the trust fund in trade. 1 The powers of trustees with respect to investments are now regulated by the Trustee Act, 1893, 2 to which reference must be made. There has been some conflict of judicial opinion whether money What is paid into Court under the Lands Clauses Consolidation Act, 1845, 3 is under the control of the Court within the meaning of the Law of the court ? Property Act, I860. 4 The rule is now established to be in accordance with the view of Cotton, L.J., 5 that “ cash under the control of the Court must mean cash standing in the name of the Accountant- General in any cause or matter.” 6 In the case of trustees authorised to advance money upon mortgage, Where the rule used to be that an advance of two-thirds of the value upon property of permanent value, as freehold land, was within the rule of t0 advance ordinary prudence ; as to property in houses, “ which fluctuates in money on value, and is always deteriorating,” an advance of not more than one- mort e a S e - half was justifiable. 7 The tendency latterly was, however, “ to lean to the side of the honest trustee, and not to be anxious to find fine and extraordinary reasons for fixing him with any liability,” but “ to endeavour as far as possible, having regard to the whole transaction, to avoid making an honest man, who is not paid for the performance of an unthankful office, liable for the failure of other people from whom he receives no benefit.” 8 Lord Watson thus expressed his view : 9 “ I do not think these Lord have been laid down as hard and fast limits up to which trustees will Watson’s be invariably safe, and beyond which they can never be in safety to ie'^oyd'v. lend, but as indicating the lowest margins which in ordinary circum- Whiteley. j stances a careful investor of trust funds ought to accept. It is manifest that, in cases where the subjects of the security are exclusively or mainly used for the purposes of trade, no prudent investor can be in a position to judge of the amount of margin necessary to make a loan for a term of years reasonably secure until he has ascertained, not only . their present market price, but their intrinsic value apart from those trading considerations which give them a speculative and it may be a temporary value.” The rule must be observed in normal circumstances, Effect of the yet is liable to be displaced by proof of exceptional matters, either decision in augmenting or detracting from its force. 10 Evidence of value, in order 1 1 Farrant v. Blanchjord, 1 De G. J. & Sm. 107 ; Thompson v. Finch, 22 Bcav. 310, 8 Do G. M. & G. 500. « Phillipson v. Gaily, 7 Hare, 510 ; 2 Ha. & T\v., 459. t Bright v. Legerlon (No. 1), 29 Beav. 00; 2 Dc G. F. & J. 000; In re Cross, 20 Ch. D. 109, 121. * Nemo pins juris ad alinm Iransferre potest qvam ipse haberet : T). 50, 17, 54 West v. Williams, | 1899] 1 Ch., per Linrlley, L.J., 143. TRUSTEES AND EXECUTORS. 1205 CHAP. TT.] that where the true owner holds out another, or for the purpose of in- ducing the belief allows another to appear, as owning, or with dis- positive power over, his property which innocent third parties are led into dealing with by his action or conduct, on the basis of the apparent being the true owner, their rights in such a case will not depend upon the actual title or authority of the person with whom they directly deal, but will be referred back to that conduct of the real owner by which their dealings are induced ; and the real owner will be pre- cluded thereby as against the innocent third parties from disputing the existence of the title or power which, through negligence or mistaken confidence, he caused or allowed to appear to be vested in that person with whom they immediately deal. 1 In Wilkins v. Hogg 2 it was argued that trustees were not protected The settlor notwithstanding a special clause in their deed of trust providing that may extend any trustee should not be obliged to see to the application of moneys p onso fthe paid by him to his co-trustee, or be responsible by express or implied usual indem- notice of the misapplication. The Court refused assent to this proposi- mt T clause, tion, and laid down the rule that, though certain cases are provided for by the usual indemnity clause, there exist others to which protection may be afforded by special provision of the creator of the trust. This is on the principle that it is perfectly competent for him to define the liability incident to the duty of a trustee in a trust of his own creation, so long as he keeps within the bounds of law ; and this rule excludes cases of “ gross negligence or personal misconduct.” 3 In this con- nection “ gross negligence ” is obviously used to mean flagrant negli- gence in the sense of the maxim, Magna negligentia, culpa est ; magna culpa dolus est. Lord Westbury, in Wilkins v. Hogg* specifies three classes of cases in which a trustee is liable under the ordinary indemnity clause, as follows : (1) Where a trustee having received money, hands it over without Three classes securing its due application ; of cases (2) Where a trustee allows his co-trustee to receive money, and does \yesR not make due inquiry as to his dealing with it ; and bury in which (3) Where a trustee, becoming aware of a breach of trust, a trustee committed or meditated, after having acquired such knowledge j^hf under abstains from taking steps to obtain redress. the ordinary As none of these involves any absolute misconduct in respect indemnity of which liability would attach, they may be excepted in a trust c ause- deed. There is a fourth class, where personal misconduct is involved ; a fourth for example, the trustee colludes with his co-trustee, and hands over class, trust-money with a reasonable ground for believing or suspecting that Where per- the trustee to whom he hands it will commit a breach of trust ; for c°nductis involved 1 Pickering v. Busk, 15 East, 38 ; Gregg v. Wells, 10 A. & E. 90 ; Wilson v. West Hartlepool Ry. Co., 2 De G. J. & S. 475, followed in Melbourne Banking Corporation v. Brougham, 4 App. Cas. 156, 169; Lawford v. Billericay Rural Council, [1903] 1 K. B. 772 ; Cowdrey v. Vandenburgh, 101 U. S. (10 Otto) 572. As regards the sale of goods, this is established by the Sale of Goods Act, 1893 (56 & 57 Viet. c. 71), ss. 23, 25. C'ahn v. Pockett’s Bristol Channel Steam Packet Co., [1899] 1 Q. B. 643. 2 3 Giff. 116; affirmed, 8 Jur. N. S. 25. 3 Pass v. Dundas, 43 L. T. 665. 4 8 Jur. N. S. 25. In Wilson v. Moore, 1 My. & K. 126, 146, Sir John Leach, M.R., says : “ All parties to a breach of trust are equally liable ; there is between them no primary liability ” ; affirmed on appeal, 1 My. & K. .3.37. Hill v. Simpson, 7 Ves. per Sir William Grant, M.R., 166 ; Gray v. Lewis, L. R. 8 Eq. 526, 543 ; L. R. 8 Ch. 1035. 1266 NEGLIGENCE IN LAW. Receivers. Personal liability of receiver. Owen v. Cronk. Burt, Boulton, and Hayward v. Bull. Rule stated by Rigby, L. J. Rights of receiver. [BOOK VIT. which, despite any clause in a trust deed, the trustee handing over the fund is liable. This class comprises the species of negligence which Bacon, Y.C., describes as “ gross,” 1 and within the rule of the Roman law, magna culpa dolus est , 2 There are some cases where persons occupy the position of quasi- trustees under the appointment of a Court, for instance, receivers. In the case of a receiver being required to carry on a business, the question arises as to the personal liability thereby incurred by him. In (keen v. Cronk 3 the receiver was appointed by trustees of a trading company’s business under a trust deed, and carried on the business in the name of the company, his own name being added as receiver. The Court of Appeal held the receiver not personally liable, on the ground that “ he would have to account, not to the Court, but to the persons who appointed him.” 4 In Burt. Boulton, and Hayward v. Bull, 5 the position of receivers and managers appointed by the Court was considered. Rigby, L.J., thus expressed his view of the primd jacie effect of contracts made by receivers and managers eo nomine : 6 “ According to my understanding of the matter, it cannot be intended by the Court in such cases to put forward an officer of the Court to carry on business — which might involve the making of contracts almost daily in the ordinary course of business — in such a manner as would be likely to delude members of the public into the idea that somebody would be responsible on those contracts, whereas nobody would be so responsible. I do not say that there might not be very special cases in which the intention might be that receivers and managers should not pledge their personal credit, though I am not aware that any such have arisen.” “ The rule has always been that such persons are primd facie themselves personally liable, and they cannot get rid of liability on the contracts made by them merely by describing themselves in the contract as executors or trustees.” Receivers have, however, a right against the funds ; and also the protection of the Court restraining persons from bringing suits against them in respect of their receiverships, except where leave is given by the Court which appoints them ; 7 though this does not, as appears from the cases just noted, extend to actions brought against them personally in respect to contracts made by them in the course of the business of the receivership . 8 1 Pass v. Dundas, 43 L. T. C65. 2 D. 50, 10, 226. Ante, 40. As to the remedies of cestui que trust for breach of trust, see Devaynes v. Robinson, 24 Beav. 99 n. 3 [1895] 1 Q. B. 265. Gosling v. Gaskell, [1897] A. C. 575 ; Robinson Printing Co. v. Chic, [1905] 2 Ch. 123. 4 Per Lord Esher, M.R., l.c. 272. 5 [1895] 1 Q. B. 276. c L.c. 283. 2 Knight v. Lord Plimoutli, 3 Atk. 480, more fully reported 1 Dick. 120, dis- tinguished by Lord Eldon, C.,in Wren v. Kirton, 11 Ves. 377 ; Ah aw v. Rhodes. 2 Russ. 539 ; Seagram v. Tuck, 18 Ch. D. 296 ; Sarganl v. Read, 1 Ch. D. 000 ; Taylor v. Neate, 39 Ch. D. 538. For the extent of the liability of sureties under a receiver’s recognisances, see In rc Graham, [1895] 1 Ch. 66. A receiver may not enter into any agreement with his sureties which in effect indemnifies them against loss : White v. Baugh, 3 Cl. & F. 44, where the position of a receiver’s surety is considered. s “ I do not say that it would never be right to allow an action to be brought against a receiver, but no such action can be brought without leave of (lie Court ” ; per Lindley, L.J., Scarlc v. Choat, 25 Ch. 1). 723, 727 ; Helmore v. Smith (No. 2), 35 Ch. D. 449, per Bowen, L.J., 456. Ever since the decision of Morrice v. Bank of England, Cas. temp. Talbot, 217, 2 Bro. Pari. C. 465, a decree for the administration of an estate has been treated as a judgment for all the creditors, and the Court will not permit any particular croditor to disturb the administration of the assets. The subject is CHAP. II.] TRUSTEES AND EXECUTORS. 1267 In the United States the rule of liability is differently stated : Rule in the “ Actions against the receiver are, in law, actions against the receiver- ^ ship, or the funds in the hands of the receiver, and his contracts, misfeasances, negligences, and liabilities are official and not personal, and judgments against him as receiver are payable only from the funds in his hands.” 1 In Barton v. Barbour 2 it is also said by Woods, Barton v. J., delivering the opinion of the Court : “If claims arise against the Barbour. receiver as such, whilst acting under the powers conferred on him, whether for labour performed, for supplies and materials furnished, or for injury to persons or property, then a question of some difficulty arises as to the proper mode of obtaining satisfaction and redress.” “ If the receiver is to be suable as a private proprietor of the railroad would be, or as the company itself while carrying on the business of the railroad was, it would become impossible for the Court to discharge its duty to preserve the property and distribute its proceeds among those entitled to it according to their equities and priorities. It has therefore been found necessary, and has become a common practice for a Court of Equity, in its decree appointing a receiver of a railroad property, to provide that he shall not be liable to suit unless leave is first obtained of the Court by which he was appointed.” 3 The rule of the liability of a receiver for torts committed in the Liability for management of the business of which he is receiver appears from lu McNultav. Lockridge , 4 in the State Court. “ A receiver of a railroad management company, who is exercising the franchises of such company and opera- of a business ting its road, is, in his official capacity, amenable to the same rules of "j: liability that are applicable to the company when it is operating the ‘ 61 C1 ‘ road by virtue of the same franchises. For torts committed by his servants while operating the railroad under his management, he is responsible upon the principle of respondeat superior. The liability, however, is not a personal liability, but a liability in his official capacity only ; and the damages for such torts are not to be recovered in suits against him personally, and collected on executions against his in- dividual property, but recovered in suits or proceedings in which he is named or designated as receiver, and to be paid only out of the fund or property which the Court appointing him has placed in his possession and under his control. The corporation itself, having no control over either the receiver or his servants, is not, in the absence of an absolute liability imposed upon the company by statute, responsible for the negligence or torts of the employees of the receiver, and no suit against it for damages occasioned thereby can be maintained. These rules of law are well settled, and have been held in many adjudicated cases.” In case of misconduct or neglect, a receiver is liable to be ordered to pay costs personally , 5 and one defending an action without the sanction of the Court will not be allowed his costs . 6 discussed very fully in Thompson v. Brown, 4 Johns. (N. Y. Ch.) 619. See Story, Eq. Jur. § 530 et seqq. ; Ames v. Trustees of Birkenhead Docks, 20 Beav. 332. 1 McNulla v. Lochridge, 141 U. S. (34 Davis) 332, cited and approved by Fuller, C.J., Texas and Pacific By. Co. v. Cox, 145 U. S. (38 Davis) 601 ; Texas and Pacific Ry. Co. v. Johnson, 151 U. S. (44 Davis), 81 — all cases of tort. 2 104 U. S. (14 Otto) 134. 3 L.c. 136. 4 31 Am. St. R. 366. 5 Ex parte Brown, 36 W. R. 303. 6 Swaby v. Dickon, 5 Sim. 629 ; Bristowe v. Needham, 2 Ph. 190. The rule of responsibility of a receiver and manager is dealt with in Plisson v. Duncan, 36 Can. S. C. R. 647. 1 208 NEGLIGENCE IN LAW. Vendor in possession after a con- tract for sale of land. Browne v. Savage. Trustees to give correct information of prior assignments affecting trust property if they answer at all. [BOOK VII. The vendor in possession after a contract for sale of land is, for some purposes, in the position of a trustee for the purchaser . 1 He has the right to insist upon retaining possession until payment of the purchase- money is made and the conveyance is accepted. “ He has that right ; but the question is, upon what terms that right is to be exercised ? It appears to me that it must be upon the terms of his undertaking the duties of possession while he insists upon retaining possession.” 2 For example, he has to take reasonable care that the property is not deteriorated in the interval before completion while it still remains in the hands of the vendor, as by removing of fixtures, breaking windows, or anything of that kind . 3 Thus, too, it was decided that where a trespasser, without either the authority or knowledge of the vendor of certain property, entered on the same and removed large quantities of surface soil, the purchaser could maintain an action against the vendor for a breach of trust in not using due care to prevent the removal . 4 And where there is a wilful refusal by the vendor to carry out a con- tract, in addition to specific performance, such damages may be given as may reasonably be said to have naturally arisen from the delay, or which may reasonably be supposed to have been in the contemplation of the parties as likely to arise from the breach . 5 It has been said 6 that trustees must, “ for their own security, give correct information when inquiry is made of them, whether they have had notice of any prior assignments affecting their trust property.” Hence it has been inferred that trustees are bound to answer such inquiries ; 7 but Lindley, L.J ., 8 points out that : “ The duty of a trustee is properly to preserve the trust fund, to pay the income and the corpus to those who are entitled to them respectively, and to give all his cestuis que trust , on demand, information with respect to the mode in which the trust fund has been dealt with, and where it is. But it is no part of the duty of a trustee to tell his cestui que trust what incum- brances the latter has created, nor which of liisincumbrancershavegiven notice of their respective charges. It is no part of the duty of a trustee to assist his cestui que trust in selling or mortgaging his beneficial interest and in squandering or anticipating his fortune ; and it is clear that a person who proposes to buy or lend money on it has no greater rights than the cestui que trust himself. There is no trust or other relation between a trustee and a stranger about to deal with a cestui que trust, and although probably such a person in making inquiries may be regarded as authorised by the cestui que trust to make them, this view of the stranger’s position will not give him a right to informa- 1 Phillips v. Silvester, L. R. 8 Ch. 173 ; see Earl of Egmont v. Smith, 6 Ch. 1)., per Jessel, M.R., 475, referring to Shaw v. Foster, L. R. 5 H. L. 321, “ which only re- stated what had been the well-known law of the Court of Chancery for centuries.” Plcws v. Samuel, [1904] 1 Ch. 404. 2 Per Lord Selborne, C., Phillips v. Silvester, L. R. 8 Ch. 177. As to “wilful default ” on the part of a vendor exonerating the purchaser from the payment of interest on the purchase-money, In re Wilson's and Stevens' Contract, [1894] 3 Ch. 540. Bennett v. Stone, [1903] 1 Ch. 509. 3 Royal Bristol Permanent Building Society v. Bomash, 35 Ch. D. 390, where Bain v. Fothergill, L. R. 7 H. L. 158, is distinguished. 4 Clarice v. Ramuz, [1891] 2 Q. B. 450. 6 Jacques v. Miller, 0 Ch. D. 153 ; Jones v. Gardiner, [1902] 1 Ch. 191. 6 Browne v. Savage, 4 Drew., per Kindorsley, V.C., 039. This case is considered, so far as it is concerned with notice, in Newman v. Newman, 28 Ch. D. 074. 7 Lewin, Trusts (8th ed.), 704 ; but see 1 1th ed. 800. a Low v. Bouverie, [1891] 3 Ch. 99. But see In re TiUott, [ 1892] 1 Ch. 80 ; Sawyer y. Goddard, (C. A.) Law Times newspaper, 9th March, 1895, 450. TRUSTEES AND EXECUTORS. 1209 chap, ii.] tion which the cestui que trust himself is not entitled to demand. The trustee, therefore, is, in my opinion, under no obligation to answer such an inquiry.” The Lord Justice then examines the position of a trustee who does answer such an inquiry, and concludes that the duty of a trustee who thus undertakes to answer is merely to answer honestly — that is, to “ answer to the best of his actual knowledge and belief,” unless he either binds himself by a warranty, or so expresses himself as to estop himself from afterwards denying the truth of what he said. 1 Under the Forfeiture Act, 1870, 2 the administrator of a convict’s Convict’s property has absolute power to sell that property, provided that the sale is bond fide. The administrator must not sell blindly or carelessly Act, 1870. or without exercising any judgment or discretion upon it, but if he has sold bond fide, then the sale is binding and the exercise of the adminis- trator’s power cannot be impugned by the convict. The administrator is not limited to selling for the purpose of paying debts ; he has an absolute power to sell the whole. 3 Any trustee or manager of a savings bank who neglects or omits to Negligence comply with the rules and regulations of the savings bank within the meaning of sec. 11 of the Trustee Savings Banks Act, 1863, 4 was Savings compellable under sec. 165 of the Companies Act, 1862, 5 to pay an Banks Act, adequate sum towards the assets of the bank by way of compensation 1863 - for any loss occasioned to the bank by his neglect or omission. 6 Omission to attend meetings was held under the section not the same as neglect or omission of the duties which ought to have been performed at them. 7 The above-mentioned section of theCompanies Act, 1862, is repealed by the Companies Winding Up Act 1890, 8 and sec. 10 of the latter Act was substituted for it. This gives power to the Court on the application of the Official Receiver or the liquidator of any company under the Companies Acts to examine into the conduct of any pro- moter, director, manager, or other officer, and to compel restitution of property misapplied or retained or for which he is liable, with interest. The section applies notwithstanding that there is also a criminal liability. 1 As to the authority of Burrowes v. Lock, 10 Ves. 470, and Slimv. Croucher, 1 De G. F. & J. 518, see Low v. Bouverie, [1891] 3 Ch., per Lindley, L.J., 101, 102, and Brownlie v. Miller, 7 Rettie (H. L.), per Lord Selborne, C., 70. 2 33 & 34 Viet. c. 23, s. 12. 3 Carr v. Anderson, [1903] 1 Ch. 90 ; but he has no power to bar the estate tail of a convict : In re Gaskell and W alters' Contract, [1906] 2 Ch. 1. i 26 & 27 Viet. c. 87. See 4 Edw. VII. c. 8, s. 16 (2). 5 25 & 26 Viet. c. 89. 6 In re Cardiff Savings Bank, Davies's case, 45 Ch. D. 537. 7 Marquess of Bute's case, [1892] 2 Ch. 100. There are Savings Bank Investment Regulations dated 21 May, 1894, and Trustee Savings Bank Regulations dated 14th June, 1895. s 53 & 54 Viet. c. 63, s. 33. CHAPTER III. BANKERS. Definition. A bank is defined as an establishment for the custody of money received from, or on behalf of, its customers. Its essential duty is the payment of the orders given on it by its customers ; its profits arise mainly from the investment of the money left unused by them. 1 I. Banker his I. The relation between banker and customer is that of debtor and debtoTfor 8 cre ditor, 2 witli a superadded obligation on the part of the banker the balance to honour the customer’s cheques so long as there are any assets of his standing to in the banker’s hands. 3 If the banker dishonours his customer’s cheque, when he has funds in hand to meet it, he is liable to an action for damages, though the customer may not have suffered actual loss or damage by the act, and the amount of damages given should be greater than merely nominal. 4 In the case which decides this the cheque, of which payment was refused, was for £87 7s. 6 d. This circum- stance Lord Tenterden, C.J., considered an aggravation of the wrong ; and the jury having found for the plaintiff with nominal damages, he remarked that it was a discredit to any person, and particularly to one in trade, 5 to have a “ draft refused payment for so small a sum.” the cus- tomer’s account. Marzetti v. Williams. 1 Dr. Murray’s Dictionary, sub voce. “ Banker ” includes a body of persons whether incorporated or not, who carry on the business of banking ; 45 & 46 Viet. c. 01, s. 2. See the Stamp Act, 1891 (54 & 55 Viet. c. 39), s. 29. 2 So that the Statute of Limitations runs as against any other simple contract debt, Smith, v. Lcveaux, 2 De G. J. & S. 1, 5 ; Phoenix Bank v. Risley, 111 U. S. (4 Davis), 125, following Marine Bank v. The Fulton Bank, 2 Wall. (U. S.) 252. As to the test of whether the Statute of Limitations runs or not, see Burdick v. Garrick, L. R. 5 Ch. 233, 240 : Banner v. Berridqe, 18 Ch. I). 254, 263. 3 Foley v. Ilill, 2 H. L. C. 28. Cp. Pott v. Clegg, 16 M. & W. 321, 328 (distinguished In re Tidd, Tidd v. Overell, [1893] 3 Ch., per Nort h, J., 157), with remarks of Cockburn, C.J., Goodwin v. Robarts, L. R. 10 Ex. 351 ; Garnett v. M’Kewan, L. R. 8 Ex. 10. In the argument in Robarts v. Tucker, 16 Q. B. 575, Alderson, B., addressing Sir Frederick Thesiger, said : “ You reason as if the customer bailed money to the banker to be kept with reasonable diligence and returned in specie. But the customer lends money to the banker and the banker promises to repay that money, and, whilst indebted, to pay the whole or any part of the debt to any person to whom his creditor the customer in the ordinary way requires him to pay it.” Parke, B., added : “ That is undoubtedly so.” In the United States the law is settled in the same sense by Marine Bank v. Fulton Bank, 2 Wall. (U. S.) 252 ; Thompson v. Riggs, 5 Wall. (U. S.) 663. * Marzetti v. Williams, 1 B. & Ad. 415 ; Whitaker v. Bank of England, 6 C. & P. 700; Rolin v. Steward, 14 C. B. 595; Larios v. Bonany y Gurety, L. R. 5 P. C. 346, 357. 5 In Victoria it has been held that a plaintiff who is not a trader, “ and has there- fore no mercantile character,” cannot recover more than nominal damages unless ho proves special damage ; since there is no presumption legitimately dedueible that a BANKERS. 1271 CHAP. III.] On the case being remitted to the jury under the instruction to find substantial damages, they returned a verdict for £500, which was afterwards reduced by consent, on an intimation from the Court, to £200. The banker’s obligation is to honour his customer’s cheque. To Banker’s that end he is bound to know his customer’s handwriting. If in any way he is deceived without the instrumentality of his customer, he cust0 mer’s must himself abide the loss. Thus, notwithstanding that the alteration cheque only, in a cheque is such that “ no person in the ordinary course of business could observe it,” the banker is liable for the amount wrongly paid on it. 1 The principle of the decision was expressed in Young v. Grote 2 to be : “A banker who pays a forged cheque, is in general bound to pay the amount again to his customer, because, in the first instance, lie pays without authority.” The limitations on this proposition will be discussed subsequently. 3 . The bankers’ obligation is sometimes extremely onerous ; as when they received a sum of money from a married woman and gave an accountable receipt bearing interest in the name of her son by a former marriage, yet were held liable to her husband for money had and received. 4 The credits in the books of the bank are prima facie evidence of the Credits in customer’s right. Yet money deposited in a bank to the credit of A may be shown to be the property of B. It may be reached by attach- >ai ment on the part of the judgment creditors of B, or payment of it by the banker to A may be stopped by a proper notice on the part of B that the money belongs to him. The credits in the banker’s books are thus only primd facie evidence of ownership. But in the absence of any claim by the real owner the banker cannot dispute the right of his depositor, and, as already has been pointed out, is bound to honour his cheque. In one case only may a banker be justified in refusing to pay a Where demand of his customer when the customer is in funds. This justifica- ! jari . ® r j s . tion exists where the customer is a trustee and draws a cheque as refusing to trustee and some misapplication of the proceeds is intended by the cash trustee, and of which the bankers have knowledge. 5 This knowledge is c u stomer ’ s ° ° cheque. person who is not a trader suffers substantial damage by the dishonour of his cheque : Bank of New South Wales v. Milvain, 10 Viet. L. R. (Law) 3. In Doria v. Bank of Victoria the Court treated a schoolmaster as having a “mercantile character,” 5 Viet. L. R. (Law) 393. Forman v. Bank of England, 18 Times L. R. 339, turns on the difference between a London and country cheque, and the custom of bankers in crediting them when paid in. 1 Hall v. Fuller, 5 B. & C. 750. Smith v. Mercer, 6 Taunt. 76 ; Robarts v. Tucker, (Ex. Ch.) 16 Q„ B. 560 ; see, however, now 45 & 46 Viet. c. 61, s. 64 (1), and post, 1312, n. In East Holy ford Mining Go. v. National Bank, Ir. R. 5 C. L. 508, the Irish Court of Common Pleas held that the banker of a public registered company is not bound to inquire whether the persons drawing cheques as directors against the company’s banking account were legally appointed directors, or authorised to draw cheques, if there was nothing on the face of the transactions calculated to excite suspicion or inconsistent with the company’s articles of association. 'This was reversed in the Exchequer Chamber, Ir. R. 7. C. L. 169, but was restored by the House of Lords, Mahony v. East Holyford Mining Co., L. R. 7 H. L. 869 ; County of Gloucester Bank v. Rudry Merthyr Steam and House Coal Colliery Co., [1895] 1 Ch. 629. 2 4 Bing., per Best, C.J., 258. 3 Post, 1317. 4 Calland v. Loyd, 6 M. & W. 26. 5 Per Sir John Leach, V.C., Keane v. Robarts, 4 Madd. 332, 357. Cp. Hill v. Simpson, 7 Ves. 152. 166, as to the power of executors in dealing with assets ; which in that case was held not to be an absolute power, when “ the assignee knows the executor is applying the assets to a purpose wholly foreign to his trust.” See Lord Eldon’s remarks on Hill v. Simpson, M’Leod v, Drummond, 17 Ves. 152, 169, VOL, II. 2 M Lord West- bury in Gray v. Johnson. Lord Davey in Bank of New South Wales v. Goulburn Valley Butter Co. Where banker may pay without direct authorisa- tion. 1272 NEGLIGENCE IN LAW. [book vii. presumed it the dealing in question is “ prima facie inconsistent with the duty of an executor or trustee.” “ I think,” says Lord Cairns, 1 “ I may safely add, that if it be shown that any personal benefit to the bankers themselves is designed or stipulated for, that circum- stance, above all others, will most readily establish the fact that the bankers are in privity with the breach of trust which is about to be committed.” “ Supposing,” says Lord Westbury, 2 “ that the banker becomes incidentally aware that the customer, being in a fiduciary or representa- tive capacity, meditates a breach of trust, and draws a cheque for that purpose, the banker, not being interested in the transaction, has no right to refuse the payment of the cheque, for if he did so he would be making himself a party to an inquiry as between his customer and third persons.” “ But then it has been very well settled that if an executor or a trustee who is indebted to a banker, or to another person, having the legal custody of the assets of a trust estate, applies a portion of them in the payment of his own debt to the individual having that custody, the individual receiving the debt has at once not only abundant proof of the breach of trust but participates in it for his own personal benefit.” The question then becomes one of fact whether the payment was designed for the benefit of the bankers. 3 The law, says Lord Davey, 4 “ is well settled that in the absence of notice of fraud or irregularity a banker is bound to honour his customer’s cheque, and is entitled to set off what is due to a customer on one account against what is due from him on another account, although the moneys due to him may in fact belong to other persons. On the other hand, a banker is not justified of his own motion in transferring a balance from what he knows to be a trust account of his customer to the same customer’s private account.” Yet the onus is on him who seeks to charge the banker ; and where the banker is not shown to have received the money as trust funds (though they may have been kept separate and paid. to an account opened with them by the depositor), or to have been affected with notice of their trust character during the currency of the account, he is entitled to set them off against the customer’s own debit balance. 5 On the other hand, in one case the banker may be justified in paying the money of his customer without direct authorisation from him, that is, where an acceptance of his customer’s, payable at his bank, is presented to him. 6 Some banks are incorporated under private acts in which are wide clauses exonerating the bank from the duty of looking to the execution of any trusts, express, implied or constructive, to which the shares may be subject. Wherethis is the case a registration of shares by the trustees which involves a breach of trust does not affect the bank with liability ; even though the bank has notice that the shares are subject to the trust, and possession of a copy of the will of the creator of the trust. 7 ] 70. The cases are considered by Chancellor Kent in Field v. Schicffelin, 7 Johns. (Ch. N. Y.) 150. i Gray v. Johnson, L. R. 3 H. L. 11. Cp. In re Blundell, Blundell v. Blundell, 40 Ch. L». 370, 382. 2 t.c. 14. 3 Coleman v. Bucks and Oxon Union Bank, [1897] 2 Ch. 243. ■t Bank of New South Wales v. Goulburn V alley Butter Co., [ 1 902] A. C. 550, oraitt ing the authorities cited. o Union Bank of Australia v. Murray- Aynsley, [1898] A. C. 093. 6 Kymer v. Laurie, 18 L. J. Q. B. 218. v Simpson v. Molson's Bank, [1895] A. C. 270. BANKERS. 1273 CHAP. ITT. ] In the Massachusetts case of Union Bank v. Knapp 1 it is laid down American that a depositor has a right to inspect the books of the bank into which ™ se 1: ^ n t g th he has paid his money ; that “ the bank is bound to produce them on all custom er has proper occasions ” ; and that “ the officers of the bank having the a right to charge of the books are to be so far considered as agents for both j 118 ^ parties.” 2 It is very difficult to sec on what ground this right is based, banker, since it is now well-established law that the depositor’s relation to the bank is that of creditor only. A suggestion has been made limiting this Considered, supposed right to that portion of the books of the bank in which the customer’s own concerns are dealt with ; yet this limited proposition is almost as difficult to comprehend as the wider one. If the dictum is only applicable to “ proper occasions,” any difficulty may be avoided by a just definition of that vague term. Thus an undoubtedly “ proper occasion ” is in the course of an action when the banker is summoned as a witness ; and it has been decided that, as against his customer, the banker is not protected from giving evidence as to the balance of his customer at any given date, 3 when summoned in a case between his customer and a third person. In Foster v. Bank of London , 4 Erie, C.J., left to the jury to say Foster v. whether there was a duty on a banker not to disclose the account of one customer to another, the latter being a creditor of the former. The on on " action of Erie, C.J., in that case was regarded by Kelly, C.B., in Hardy Hardy v. v. V easy, 5 as countenancing a legal obligation on the banker to keep V(, - ns y- reasonably secret the state of the customer’s account ; while in the same case, Tassell v. Cooper 6 was instanced as inclining against the existence of such a duty. The Court avoided a decision of the point by assuming in the plaintiff’s favour a legal duty not to disclose the customer’s account except upon a reasonable and proper occasion. This was the duty laid in the declaration as amended. As the jury had found the occasion was a reasonable and proper one, the Court confined its decision to holding that the jury were the right tribunal for the decision of the reasonableness of the occasion. The inclination of the learned judge’s opinion seems to be against the existence of any such duty not to disclose the account of one customer to another as of other than moral obligation. The practice of bankers is to bind their clerks to secrecy, and the rumour getting abroad, that a banker was divulging his customers’ accounts to inquirers, would effectually limit his confidences. On the other hand, the banker is plainly compelled to answer what he knows that is relevant when called in a suit as a witness. The liability of the banker to his customer must be kept distinct Banker’s duty from his liability to his customer’s payee. If the banker refuses to the payee, payment of a cheque, the payee has his remedy against the drawer. Even when the banker has funds of the customer in his hands, he is guilty of no breach of duty to the payee in not honouring the cheque 1 20 Mass. 96. In the third edition of these reports the position in the text is supported by reference to 2 Stark. Ev. 734 ; Francis v. Ocean Insurance Co., G Cowen (N.Y.), 404; Bank of Utica v. Hillard, 5 Cowen (N.Y.), 419. 2 L.c. 108. 3 Loyd v. Freshfield, 2 C. & P. 325, 9 D. & R. 19. The privilege of the banker is not greater than that of the customer. As to the Law of Evidence with respect to Bankers’ Books, see 42 & 43 Viet. c. 11, referred to 45 & 46 Viet. c. 72, s. 11 (2) ; In rc Marshfield , 32 Ch. D. 499 ; Arnott v. Hayes, 36 Ch. D. 731 ; Howard v. Beall, 23 Q. B. D. 1 ; Parnell v. Wood, [1892] P. 137, affd. S. Staffordshire Tramways Co. v. Ebbsmith, [1895] 2 Q. B. 669, 676 ; Kissam v. Link, [1896] 1 Q. B. 574 ; Pollock v. Oarln, [1898] 1 Ch. 1. < 3F.&F. 214. 5 L. R. 3 Ex. 107. « 9 C. B. 509. 1274 NEGLIGENCE IN LAW. Customer’s clerk’s negligence in paying-in does not affect banker with liability. Accounts of customer at various branch banks only one account. [BOOK VII. lie presents ; for “ the right of the depositor is & chose in action. It is immaterial whether the implied engagement upon the part of the banker is to pay the sum in gross, or in parcels, as it shall be required by the depositor. In either case the draft or cheque of the latter would not of itself transfer the debt or a lien upon it to a third person without the assent of the depositary.” 1 But where the banker by mistake has paid the cheque when the account of his customer is overdrawn, he cannot recover the money from the payee . 2 In a New Zealand case , 3 the customer’s clerk negligently filled in the “ pay-in slip” with another name than that of the customer, which was nevertheless correctly inserted by him on the tag or receipt, and this was then stamped and initialled by the bank clerk, while the money was credited to the name on the paying-in slip. A cheque of the customer’s was subsequently dishonoured, which, had the money paid in been put to the customer’s account, there would have been funds to meet. An action was brought against the bank for damages for dishonouring the cheque. The Court of Appeal held that initialling the tag did not estop the bank from denying that the money paid in was paid to the customer’s credit ; because there was no duty on the bank’s part to see that the “ tag ” and the “ pay-in ” slip corresponded ; and the negligence which occasioned the damage was that of the customer’s clerk. Whatever number of accounts are kept by a customer in the books of a bank, the whole is really but one account, and it is not open to a customer, in the absence of some special contract, to deny the right of the bank to say that securities deposited as security for a loan are not applicable for a deficit on the general balance . 4 In the same way, if a customer has accounts with separate branches of a bank, being in funds at the one and overdrawn at the other, the banker may refuse a cheque on the branch in funds and apply the balance there to the liquidation of the deficit at the other . 5 Of course this does not apply to two accounts kept in different rights, as a personal account and a trust account. The principle of the last-noticed decision is that branch banks are but agencies of the firm or corporation . 6 Their independence of the central organisation is so far recognised that in giving notice of dishonour the bill must be sent to the branch banks successively through which it has come ; 7 and also that a customer banking at a branch can only require his cheque to be honoured at that branch at which he banks . 8 “ To hold,” says Lord Campbell, C.J ., 9 “ that the customer of one branch keeping his cash and account there has a right to have his cheques paid at all or any of the branches, is to suppose a state of circumstances so inconsistent with any safe dealing on the part of the banker, that it cannot be presumed without direct evidence 1 Chapman v. White, 0 N. Y. 412, 417 ; see also Bank of ilic Republic v. Millard, 10 Wall. (U. S.) 152, where it is said, at 150 : “ On principle, there can be no founda- tion for an action on the part of the holder, unless there be a privity of contract between him and the bank. How can there be such a privity when the bank owes no duty and is under no obligation to the holder ? ” The law is the same with regard to public agents as to private persons : United States v. Bank of the Metropolis , 15 Peters (U. S.), 377. 2 First National Bank v. Vevenish, 22 Am. St. R. 394. 3 Banks v. Bank of New Zealand, 22 N. Z. L. R. 572. 4 In re European Bank, L. R. 8 Oh. 41 ; Mutton v. Peat, [1900] 2 Ch. 79. s Garnett v. M'Kewan, L. R. 8 Ex. 10. e Prince v. Oriental Bank Corporation, 3 App. Can. 325 ; Bank of Africa v. Colonial Government, 13 App. Cas. 215. 7 Clode v. Bayley, 12 M. & W. 51. 8 Woodland v. Fear, 7 E. & B. 519. a L.c, 521. BANKERS. 1275 CHAP. III.] of such an agreement ; and the giving, on the one hand, and accepting, on the other, of a limited cheque-book, seems intended to guard against such an inference.” Bankers have sometimes claimed to recover money paid to payees of cheques drawn by customers whose accounts are overdrawn and of which fact at the moment of payment they were not actively cognisant, on the ground that the payment made was to be treated as made under a mistake of fact . 1 But this view has not been approved. It has been pointed out that as between the banker and the payee there is no mistake, the mistake, if any, being between the banker and his customer ; and a mistake in proceedings between banker and payee is irrelevant . 2 The banker is bound to know the state of his depositor’s account, and if he makes a mistake in this respect, he must abide the consequences. The effect of entries in a pass-book as against the banker and the customer respectively has been somewhat controverted, and the authorities are not in all respects full and satisfactory. The chief value of the pass-book is as a check on the banker, which the depositor may use as evidence against the banker . 3 There can be no doubt that entries in a pass-book are admissions by the banker, and the balancing of a pass-book is in the nature of an account stated, though not con- clusive against the banker, but open to be impugned whether for mis- take or fraud. The entry of a credit is in the nature of a receipt, and so open to explanation by other evidence . 4 The Privy Council has laid down what, as against the banker, is the correct rule : 5 entries in a pass-book “ are not conclusive ; they are admissions only, and, as in the case of receipts for the payment of money, they do not debar the party sought to be bound by them from showing the real nature of the transactions which they are intended to record.” An account stated as against the customer binds only by way of estoppel through the depositor having acted upon the statement and having been misled, to his injury . 6 The ordinary writing-up of a bank- book with a return of vouchers or a statement of account, is said in an 1 Merchants' National Bank v. National Eagle Bank, 101 Mass. 281. As to pay- ment by mistake, see Story, Eq. Jui\, § 110 el seqq. ; Kelly v. Solari, 9 M. & W. 54, deciding that money honestly paid, under a mistake of fact, could be recovered back, although the person paying it had means of knowing, which he neglected to avail himself of ; approved Imperial Bank of Canada v. Bank of Hamilton, [1903] A. C. 49, 56. Townsend v. Crowdy, 8 C. B. (N. S.) 477. Kleinwort v. Dunlop Rubber Co. (H. L.) 23 Times L. R. 696. 2 Per Erie, C. J., Chambers v. Miller, 32 L. J. C. P. 30, 32. 3 The effect of a banker issuing a pass-book is discussed in McCaskill v. Connecticut Ravings Bank, 60 Conn. 300, 25 Am. St. R. 323 ; see, too, Gifford v. Rutland Savings Bank, 25 Am. St. R. 744, where a savings bank having paid on presentation of a deposit-book which had been stolen, and of which theft no notice was given to the banker, the banker was held not chargeable with negligence. Janin v. London and San Francisco Bank, 27 Am. St. R. 82, turns on possession by the customer of his pass-book balanced up with forged cheque debited. “ I never heard before that an entry in a pass-book was payment ” : per Lord Eldon, C., Noel v. Rochfort, 4 Cl. & F. 176 n. Entries in a pass-book communicated to the opposite parties are binding (it is pre- sumed that the opposite party had acted on them or been prejudiced), but “ entries made by a man in books which he keeps for his own private purposes, are not con- clusive on him until he has made a communication on the subject of those entries to the opposite party. Until that time he continues to have the option of applying the several payments as he thinks fit”: Simson v. Ingham, 2 B. & C., per Bayley, J., 73, followed by Fry, L. J., Brown, Janson 2 Leather Manufacturers' Bank v. Morgan , 117 U. S. (10 Davis) 90, 107. Critten v. Chemical National Bank of New York, 171 N. Y. 219,228, is lo the same effect : “ If the depositor has by his negligence in failing to detect forgeries in his cheques and give notice thereof, caused loss to his bank, either by enabling the forger to repeat his fraud, or by depriving the bank of an opportunity to obtain restitution, he should be responsible for the damage caused by his default.” 3 Perkins v. Hart, 11 Wheat. (U. S.) 237, 250; Wiggins v. Burkham, 10 Wall. (U. S.) 129, 132. 4 See post, 1336. s Leather Manufacturers' Bank v. Morgan, 1 17 U. S. (10 Davis) 90. 6 A gift with delivery of a pass-book was held not to make a good donatio mortis causa. In re Beak's Estate, L. R. 13 Eq. 489 ; In rc Beaumont, [ 1902J 1 Ch. 889 ; it is otherwise with a deposit note, In re Dillon, 44 Ch. D. 76; In re Weston, 1 1902] 1 Ch. 080 ; In re Andrews, [1902] 2 Ch. 394. The law as to donatio mortis causa may be found in Story, Eq. Jur. 000 607 d ; Du/field v. Elwcs, 1 Bligh (N. S. ). 497. 7 1 Meriv. 529, 535. 8 Commercial Bank of Scotland v. II hind , 3 Macq. (II. L. Sc.) 651. CHAP. III.] BANKERS. 1277 against them.” Lord Selborne 1 speaks of “ the doctrine that a pass- book passing to and fro is evidence of a stated and settled account ” ; and Bigham, J ., 2 says that the pass-book “ belongs to the customer and the entries made in it by the bank are statements on which the customer is entitled to act.” Chatterton v. London and County Bank , 3 is the exception just Ghatterton v. noticed. The case in the Court of Appeal seems to have been London and dealt with in the boisterous manner of Lord Esher’s latter days. No oan ' J 15 App. Cas. 207. 7 L.c. 285. BANKERS. 1283 CHAP. III.] This does not conflict with Lord Selborne’s principle when taken in connection with what Lord Watson says . 1 “ When the registered shareholder executes the transfer indorsed on his certificate he can have only one intelligible purpose in view, that of passing on his right to a transferee ” ; a statement which assumes that in the case before them, that had in fact happened what Lord Halsbury, C ., 2 indicates as possible : “ A document may by usage become so well understood in a particular sense that a person may be well estopped from denying that when he issues it to the world it must bear the sense which usage has attached to it.” A deposit of a certificate of shares with a transfer executed in blank, in the opinion of Lord Blackburn, at least, has not this operation. This, he points out in Colonial Bank v. Whinney , 3 “ was inoperative as a transfer. It was, however, I think, evidence that the deposit of the certificates was intended to be as a security ” ; a possi- bility not present apparently to Lord Herschell’s mind at the time he made the statement quoted above . 4 The maker of negotiable paper is presumed to have issued it free Negotiable from all blemishes or alterations. The burden of showing that it was P^P^P^ e defective when issued is on the holder ; for “ he who takes a blemished issue d c j ear 0 f bill or note takes it with all its imperfections on its head. He becomes all blemishes, sponsor for them, and though he may act honestly, he acts negligently. But the law presumes against negligence as a degree of culpability ; and it presumes that he [the holder] had not only satisfied himself of the innocency of the transaction, but that he had provided himself with the proofs of it. to meet a “ scrutiny he had reason to suspect.” 5 This is on the principle that by the law merchant a negotiable Negotiable instrument becomes a portion of the currency, and the person who issues it is bound to make good the representation he thus authorises, becomes a It may be urged, that this principle does not extend to authorise portion of the dealings that take effect only through the perpetration of crimes, currency. But even admitting the existence of the principle, a difference is apparent between such a case as Youny v. Grote and the case of an instrument issued in an imperfect state and made the occasion of a forgery, defeating the issuer’s intention. There the cheque, though negligently filled up, was yet a perfect instrument, which there was no authority to alter. In the case of an instrument issued in an imperfect condition, where the maker signs his name and delivers the paper for the purpose of being filled up within limits indicated by the stamp, when it is filled up, and in a manner that is apparently warranted by the maker’s dealings with it, whether he was defrauded or not became in law immaterial ; else private instructions would determine matter of so much public concern as the authenticity of the currency . 6 The acceptor of a bill is in no better position if he signs before the drawer’s name is inserted than if he signs after ; and if he signs after he is bound, by virtue of the third proposition in Carr v. L. & N. W. Ry. Co . 1 The case has been put in another way; whether there is crime or not in the filling up of the instrument, is immaterial, and therefore inadmissible, since the acceptor has given authority to fill up i L.c. 280. 2 L.c. 274. 3 1 1 App. Cas. 433. 4 S. Montagu & Co. v. Western Clevedon and Portishead Light Ry. Co., 19 Times L. R. 272. s Estate of Nagle, 134 Pa. St. 31, 44, 19 Am. St. R. 669, adopting the language of Gibson, C. J., in Simpson v. Stackhouse, 9 Pa. St. 187. « Lloyds Bank v. Cooke, [1907] 1 K. B. 794. 7 L. R. 10 C. P. 307. 1284 NEGLIGENCE IN LAW. American decision. J udgment of Parsons, C.J. Conclusion. Distinction between consequences dependent on the commis- sion of a crime and those de-J pendent on a breach of trust. Limitation i mposed by the House of Lords in Earl of Sheffield v. London Joint Stock Bank. [BOOK VII. the instrument by issuing it. Any such proposit ion is nevertheless logically inadmissible ; for the acceptor has never given any such authority ; and the law does not say that he has given authority, ft merely refuses to take cognisance of anything else than is apparent on the paper the acceptor has issued, where the acceptor is sued upon it. In an old American case the point was discussed . 1 A merchant entrusted his clerk with blank indorsements, and these were obtained from the clerk by false pretences, and negotiated. In an action to obtain payment from the indorser the merchant was held liable. “ If,” says Parsons, C.J ., 2 “ the clerk had fraudulently and for his own benefit made use of all the indorsements for making promissory notes to charge the indorsers, we are of opinion that this use, though a gross fraud, would not be in law a forgery, but a breach of trust. And, for the same reason, when one of these indorsements was delivered by the clerk, who had the custody of them, to the promiser, who by false pretences had obtained it, the fraudulent use of it would not be a forgery ; because it was delivered with the intention that a note should be written on the face of the paper by the promiser, for the purpose of negotiating it, as indorsed in blank by the house. And we must consider a delivery by the clerk who was entrusted with a power of using these indorsements (although his discretion was confined) as a delivery by one of the house ; whether he was deceived, as in the present case, or had voluntarily exceeded his direction. For the limitation imposed on his discretion was not known to any but to himself and to his principals.” The conclusion was, that since one of two innocent persons must suffer, it was expedient in the interests of the mercantile community at large that an additional burden should be placed on those issuing blank paper, rather than that the confidence in all mercantile instruments should be shaken. A distinction drawn between consequences of the commission of a crime and the consequences of a breach of trust would explain many of the cases, and would apply to such a principle as that indicated bv Pollock, C.B., in Barker v. Sterne ; 3 though it would not apply in the case of London and South-W estern Bank v. IF entworth , 4 where a broader ground is stated, namely, that forgery was immaterial, since it did not affect the rights on the bill. “ Where,” it was there said , 5 “ the bill is drawn by a real person, not only have those who claim under a forged indorsement no title to the bill, but the title is in some one else, who is entitled to have the bill restored to him and to sue upon it ; and to his action a plea of payment to the man who claims under the forgery would be no defence. In the present case there is no real drawer, and the defendant could have paid the plaintiff without the risk of having to pay it a second time to another.” A limitation was for some time considered to have been imposed by the decision of the House of Lords in Earl of Sheffield v. London Joint. Stock Bank. 6 Certificates of railway stock, with transfers executed in blank, were handed over to a money-lender to secure an advance. The money-lender deposited these securities with his bankers as security for large loan accounts, filling in the blanks in the transfers of stock with i Putnam v. Sullivan, 4 Mass. 45. 2 L.c. 54. 3 9 Ex. C87 : “ When a person issues a document of that kipd [t.e., a hill of ex- change] the rest of the world must judge of the authority to (ill it up by (lie paper itself, and not by any private instructions.” 11 5 Ex. D. 90. r > L.c. 101. o 13 App. Cas. 333 ; Duggan v. London and Canadian Loan, t('c Co., 20 Gail. S. ('. R. 481. CHAP. III.] BANKERS. 1285 the name of the nominees of the bankers. The interpretation put on the evidence was that the bankers must be taken to have known that the securities on pledge with them were securities taken by the money- lender in the ordinary course of his business. The money-lender having become bankrupt, the bankers claimed to retain the securities to satisfy the debt due to them. The Court of Appeal 1 held that the bonds must be treated as negotiable securities, and that the bank were entitled to hold them as security for all the debt due to them. The House of Lords reversed this decision as “ founded on the Court’s forgetting that at the same time that the bankers lent their money they had notice ” of the infirmity of the pledgor’s title, or of such facts and matters as made it reasonable that inquiry should be made into such title . 2 This fact of notice (Lord Halsbury, C., went further, and was of opinion the bankers had “ actual knowledge ” 3 ), that should have put the bankers on inquiry as to the title of the securities they were taking, was held sufficient to disentitle them, assuming the securities were negotiable, and a fortiori if they were not negotiable . 4 Simmons v. London Joint Stock Bank was held by the Court of Appeal to be indistinguishable from Earl of Sheffield v. London Joint Stock Bank. In Simmons v. London J oint Stock Bank the facts proved were as follows : A stockbroker, entrusted with bonds of a foreign company payable to bearer, pledged them with his banker, together with bonds belonging to others of his clients, to cover an advance to himself. The bankers did not know to whom the bonds belonged and did not inquire, and their loan not being paid, sold the bonds. The Court were of opinion that the bankers based their action on a mistaken assumption that a deposit en bloc of securities, without authority from the client, was recognised by law. The conclusion of the Court of Appeal is summed up in these words : 5 “ The bank never became bond fide holders for value without notice, since they never believed that Delmar [the stockbroker] was the true owner, and never, indeed, believed that any authority had been given by the true owner, which alone in law could justify what was being done. On the contrary, they chose to shut their eyes to this necessary part of the inquiry under a misconception of the law.” The bankers appealed to the House of Lords against the judgment of the Court of Appeal on the ground that the decision in Earl of Sheffield v. London Joint Stock Bank turned entirely on the special nature of the business of the money-lender. The House sustained this view, and reversed the judgment of the Court of Appeal, affirming the broad proposition laid down by Abbott, C.J., in Gorgier v. Mieville 6 “ that whoever is the holder of a negotiable instrument ‘ has power to give title to any person honestly acquiring it.’ ” 7 In arriving at their decision the learned Law Lords elaborately distinguished Earl of Sheffield v. London Joint Stock Bank, which they explained to lay down no wider proposition than “ that a purchaser even for value, cannot insist on his purchase if he knows that the person from whom he purchases has no right to sell.” 8 That decision, it was Simmons v. London Joint Stock Bank. Distinguished from Earl of Sheffield v. London Joint Stock Bank in the House of Lords. Earl of Sheffield v. London Joint Stock Bank. Under the name of Easton v. London Joint Slock Bank, 34 Ch. D. 95. Per Lord Bramwell, 13 App. Cas. 346. 13 App. Cas. 341. * [1892] A. C. 201. Per Bowen, L.J., [1891] 1 Ch. 295. 3 B. & C. 47 ; Foster v. Pearson, 1 Cr. M. & R. 849. See per Lord Halsbury, C., [18921 A. C. 212 Per Lord Halsbury, C., l.c. 208- ('a lit ion. The two cases considered. Thomson v. Clydesdale Bank. 128G NEGLIGENCE IN LAW. [book vii. said, 1 proceeded on the lines of Cooke v. Eshelby , 2 that “ it would be inconsistent with fair dealing that a latent principal should by his own act or omission lead a purchaser to rely upon ” his right “ against the agent as the real seller, and should nevertheless be permitted to intervene and deprive the purchaser of that right,” after his position had been made worse by reliance on the latent principal’s authority. “ In any other case,” says Lord Herschell, 3 referring to Earl of Sheffield v. London Joint Stock Bank , “ the tribunal must investigate the facts for itself, and determine whether those who claim to hold a negotiable instrument have made out that they took it in good faith and for value.” To avoid misconception of Lord Herschell’s meaning in this passage we must bear in mind that in the ordinary case of taking a negotiable instrument the onus is on the person impugning the title of the holder ; so that Lord Herschell’s dictum must be confined to those cases where, by showing circumstances of suspicion, the yrimd facie presumption in favour of the holder is displaced, and he is called on to show that his possession of the instrument is consistent with good faith and that he is a holder for value. 4 The effect of the decision in London Joint Stock Bank v. Simmons, when coupled with the explanatory remarks on Earl of Sheffield v. London Joint Stock Bank, is to discredit any doctrine of constructive notice in the law of negotiable instruments, 5 and to reassert the old accepted doctrine that the only conditions necessary to give a good title to a person taking a negotiable instrument from one who has, as against the true owners, no authority to transfer it, are that he should take it bond fide and for value. “ Regard to the facts of which the taker of such instruments had notice is most material in considering whether he took in good faith ” ; 6 so that in this view shutting the eyes to suspicion is a consideration of vital moment. Earl of Sheffield v. London Joint Stock Bank probably suggested the attempt made in Thomson v. Clydesdale Bank 7 by trustees to recover from a banker money paid in by a stockbroker to his overdrawn account ; which money was the proceeds of the sale of trust stocks, and was applied by the bank in reduction of their customer’s (the 1 [1892] A. C. 229. 2 12 A. C. 271,278. 3 [1892] A. C. 221. 4 Cp. Angle v. North-Western Mutual Life Insurance Co., 92 U. S. (2 Otto) 330, 341, 342. s E.g., per Lord Halsbury, 13 App. Ccis. 341 : “ If they (j'.e., the bankers) had reason to think that the securities might be Mozley’s own, or might belong to somebody else, I think they were bound to inquire ” ; per Lord Watson, 343 : “ In my opinion, the character of the transactions between the respondents and Mozley was of itself sufficient to notify to them that his interest was limited ” ; per Lord Bramwell, 340 : “ The expression should be something like this : ‘ Notice of the infirmity of the pledgor’s title or of such facts and matters as made it reasonable that inquiry should be made into such title ’ ” ; per Lord Macnaghten, 348 : “ They (the bankers) did not choose to inquire what that authority was.” In Colonial Bank v. Cady and Williams, 15 App. Cas. 207, 283, Lord Herschell had previously negatived any doctrine of constructive notice in the acquiring title to negotiable instruments. See also per Lord Herschell, London Joint Stock Bank v. Simmons, [1892] A. C. 223, where the obligation of making inquiry is limited to the ease where “ there is anything to arouse suspicion, to lead to a doubt whether the person purporting to transfer” “is justified in entering into the contemplated transaction,” when the neglect to inquire would he “ inconsistent with good faith.” London and Canadian Loan and Agency Co. v. Duggan, [1893] A. C. 506. s Per Lord Herschell, [1892] A. C. 221 ; Venables v. Baring Bros., [1892] 3 Ch. 527 ; Baker v. Nottingham and Nottinghamshire Banking Co., 60 L. J. Q. B. 542 ; Bentinck v. London Joint Stock Bank, T 1 893] 2 Oh. 1 20. 7 [1893] A. C. 282. BANKERS. 1287 CHAP. HI.] stockbroker’s) debt to them. The argument for the trustees was that so soon as the bankers had notice that an account is a trust account, they were disentitled to retain the money against the real owners. To this the answer was made that in London Joint Stock Bank v. Simmons it was held not to be enough to have reason to believe that the fund that was being dealt with was another’s property ; there must be also a belief that the person dealing with it was acting fraudulently. Ex parte Cooke 1 was cited to prove that the relation between stockbroker and client is that of trustee and cestui que trust. In Ex parte Cooke, however, the question was only between the broker and his client. In the present case the question was between the broker’s banker and his client — two innocent persons. The principle applicable in these circumstances differs, and is, that when a broker or other agent en- trusted with the possession and apparent ownership of money pays it away in the ordinary course of business, though such payment is fraudulent as between agent and employer, yet the employer is bound as against third persons, unless he can show that the person appearing to receive the money in the ordinary course of business did not in fact so receive it, but was wanting in good faith in the transaction ; and the onus of proving bad faith (mere negligence being insufficient to raise an implication of it) rests on him impeaching the payment. This suffices for the decision of the case. Viewing the banker as an agent, the question arises, What are his Duty of duties with respect to the collection and dealing with bills and notes placed in his hands to be collected ? the^ollectiou The duty of the banker differs in respect of the character of (l) of bills of the collection he is to make. We shall accordingly proceed to con- exchange and sider, first, his duty in regard to the collection of bills of exchange and notes|7 2 7of promissory notes, and secondly, his duty with regard to cheques. cheques. Bills of Exchange and Promissory Notes. 2 The theory of a bill of exchange is that the bill is an assignment to the payee of a debt due from the acceptor to the drawer, and the 1 4 Ch. D. 123. 2 Bills of Exchange Act, 1882 (45 & 46 Viet. c. 61), as to bills of exchange, sec. 3, et seqq. ; as to promissory notes, sec. 83 et seqq., where the respective instruments are defined. For the early history of bills of exchange and promissory notes, see Ooodwin v. Robarls, L. R. 10 Ex., per Cockburn, C.J., 346 et seqq. There is an interesting article on bills of exchange in Beckmann, History of Inventions, vol. iii. (2nd ed.), 430. Much curious information is also to be found in Macleod, Theory and Practice of Banking (4th ed.), vol. i. 168, 265 et seqq. Promissory notes do not appear to be mentioned in Marius’s Advice Concerning Bills of Exchange, published in 1651. According to Holt, C. J., in Buller v. Crips, 6 Mod. 29, they were not introduced into general use till near the close of the reign of Charles II. By 3 & 4 Anne, c. 9, a remedy was given upon promissory notes as upon bills of exchange. See Savary, Diction- naire Universel de Commerce (1723), translated and extended in two immense folio volumes by Postlethwayt (1757), from which Beawes largely complied his Lex Mercatoria, published in 1758 ; Story, Promissory Notes. The negotiability of promissory notes is treated by Blackburn, J., Crouch v. Credit Fonder of England, L. R. 8 Q. B. 382, and in its historical and antiquarian aspect by Kent in his lecture on Negotiable Paper, 3 Comm. 72 etseqq. ; while the literature of the subject is discussed, 3 Comm. 124 et seqq. Mention of Marius’s work on Bills suggests Kent’s reflections, in 3 Kent, Comm. 126, upon it : “ It is quite amusing to perceive that many of the points which have been litigated, or stated in our Courts, within the last thirty years, are to be found in Marius ; so true is it that case after case, and point after point on all branches of the law are constantly arising in the courts of justice, and discussed as doubtful or new points, merely because those who raise them are not thorough VOL. II. 2 N 1288 NEGLIGENCE IN LAW. ( 1) Duties of a banker in the collection of bills of exchange or promissory notes. View of Marshall, C.J., as to the mode in .which the liability of the banker arises. Duty in collecting bills and notes. M acker sy v, Ramsays. [BOOK VII. acceptance imports that the acceptor is a debtor to the drawer, or at least has effects of the drawer’s in his hands. The acceptor, therefore, has or ought to have in his hands, or under his control, the fund by which payment ought to be made ; and it is his duty so to apply it . 1 “For the purpose of rendering bills of exchange negotiable, the right of property in them passes with the bills. Every holder with the bills takes the property, and his title is stamped upon the bills them- selves. The property and the possession are inseparable. This was necessary to make them negotiable, and in this respect they differ essentially from goods of which the property and possession may be in different persons.” 2 A banker must present bills of exchange or drafts or promissory notes for acceptance if the paper ought to be accepted ; he must also present for payment at maturity ; if this is refused and the instrument requires protest he must send it to a notary for protest . 3 The undertaking to collect bills binds the banker to exercise the necessary skill and diligence for the accomplishment of that object ; therefore he is bound to know the commercial character of the paper he undertakes to collect ; for example, if he is dealing with a bill of exchange, he is bound to know that it is entitled to three days of grace, that on the last day of grace it should be protested, and that notice must be given to the indorser, to hold him liable for the payment of the bill. If the banker does not know these and like incidents of the business he professes, he is liable for the consequences of his want of knowledge. Thus, where a banker conducted himself in such an unskilful way in collecting commercial paper committed to him for collection that the indorser became discharged in consequence, the banker was held liable to his principal for the loss occasioned . 4 Marshall, C.J., considers the liability of the banker for the bill placed in his hands for collection to depend on the question whether reasonable and due diligence has been used in the performance of his duty ; and to arise through the failure to demand payment in time being looked at as equivalent to the banker making the bill his own, and thereby entitling the original owner to sue for the price . 5 Lord Cottenham, C., in M acker sy v. Ramsays , 6 thus states the banker’s obligation in the collection of bills and notes : “ If I send to my bankers a bill or draft upon another banker in London, I do not expect that they will themselves go and receive the amount and pay me the proceeds ; but that they will send a clerk in the course of the day to the Clearing House, and settle the balances, in which my bill or draft will form one item. If such clerk, instead of returning to the bankers with the balance, should abscond with it, can my bankers refuse to credit me with the amount ? Certainly not. If the bill had been drawn upon a person at York, the case would have been the same ; although, instead of the bankers employing a clerk to receive the amount, they would probably employ their correspondent at York to do so ; and if such correspondent received the amount, am I to be refused credit because he afterwards became bankrupt whilst in debt to my bankers ? masters of their profession.” Mulla ignoramus quce nobis non laterent si veterum lectio nobis esset familiaris : 2 Co. Inst. 166. 1 Rowe v. Young, 2 Bli. (H. L.) 391, 467. 2 Per Eyre, C.J., Collins v. Martin, 1 B. & P. 651. 3 Ante, 251. 4 Georgia National Bank v. Henderson, 12 Am. R. 590. 5 Bank of Washington v. Triplett, 1 Peters (U. S. ), 25, 31.. b 9 Cl. V; F. 848 CHAP. III.] BANKERS. 1289 If the balance were not in favour of my bankers, the question would not arise ; so that my title to the credit would depend upon the state of the account between my bankers and their correspondent.” It has been sought 1 to deduce a different rule from Van Wart v. Woolley . 2 The agent of an American firm sued bankers for neglecting to give him notice of the non-acceptance of a bill forwarded from the American firm, and which they also had forwarded to their agent for collection. The very first words of the considered j udgment of Abbott, C.J., are plain : “ It is evident that the defendants (who cannot be distinguished from, but are answerable for, their London correspondents, Sir John Lubbock & Co.) have been guilty of a neglect of the duty which they owed the plaintiff, their employer,” &c. For the contrary view certain expressions farther on in the same judgment are vouched : 3 “ The bill is drawn upon persons residing in London ; the plaintiff, therefore, could not have been expected to present the bill himself ; it must have been understood that he was to do this through the medium of some other person. He employed for that purpose persons in the habit of transacting such business for him and others, and upon whose punctuality he might reasonably rely. In doing this, we think that he did all that was incumbent upon him ; . . . that he is personally in no default as to them, and is not answerable to them for the default of the person whom he employed under such circumstances.” It is manifest that the plaintiff was only a general agent, while the defendants were carrying on a business that implied the having facilities which the general agent did not possess. Therefore, as regards his principal he came within the rule that where the employment of a sub- agent is authorised either expressly or impliedly, by usage of trade , 4 or by reason of the course of business between an agent and his principal admitting the appointment of a sub-agent, and the agent has used reasonable diligence in the choice of a sub-agent of skill and care, the agent will not ordinarily be responsible for the negligence or miscon- duct of the sub-agent . 5 The bankers, whose business it is, make them- selves responsible for the performance of what they have undertaken — that is the ordinary and usual conduct of their business. A limitation of the banker’s liability arises where the banker has to employ a notary public ; since the official position of a notary authorises the presumption that any one invested with it is a suitable person to discharge the duties to which he is assigned ; 6 on disproof of this presumption the banker is liable for the notary’s negligence. The duty owed by the banker to his customer is that of a business man of reasonable skill and ordinary diligence ; and as “ by reasonable skill is understood such as is ordinarily possessed and exercised by persons of common capacity, engaged in the same business or employ- ment ; and by ordinary diligence is to be understood that degree of diligence which persons of common prudence are accustomed to use about their own affairs ” ; 7 it follows that if any point of law concerning any act in the business of collecting is without authority and doubtful, the banker will be absolved, if he goes wrong, on proof that his conduct attained the standard of diligence and skill of the ordinary business 1 Morse, Banks and Banking (3rd ed.), 277. 2 3 B. & C. 439. 3 L.c. 446. * Robinson v. Mollett, L. R. 7 H. L. 802. 3 Goswill v. Dunkley, 2 Str. 680 ; Cockran v. Irlam, 2 M. & S. 301. Cp. Speight v. Gaunt, 9 App. Cas. 1. Cp. Hey wood, v. Pickering, L. R. 9 Q. B. 428. 6 Stacy v. Dane County Bank, 12 Wis. 629 ; United States Digest, 1862, Banks, 12. 7 Per Shaw, C.J., Mechanics' Bank v. Merchants' Bank, 47 Mass. 26. Van Wart v. Woolley. Considered. Employment of a notary. Banker to bestow the diligence and skill of the ordinary business man. NEGLIGENCE IN LAW. Distinction between notes left on deposit and notes left as collateral security for a loan. (a) Present- ment of bill of exchange. Comment. 1290 [BOOK VII. man in that particular. He is not discharged if he goes wrong through want of care, as through misreading the bill . 1 A distinction exists between notes left with a banker on deposit and notes left as collateral security for a loan. In the former case it is not part of a banker’s duty to sue out legal process for their enforce- ment . 2 In the latter, he is bound to take every step to fix the liability of the parties ; he must resort to the ordinary means amongst merchants ; and further, if necessary, bring an action with reasonable diligence and prosecute it with skill and promptitude ; for if he fails in his duty the debtor may be discharged . 3 («) A bill of exchange 4 must be presented to the drawee for accept- ance when it is drawn payable at a certain period after sight ; 5 or where the bill expressly stipulates for acceptance ; or where it is drawn payable elsewhere than at the residence or place of business of the drawee . 6 In no other case is the presentment for acceptance neces- sary to charge any party to the bill ; 7 yet if not presented it must be negotiated within a reasonable time. “ The person,” says Lord Watson , 8 “ who draws a bill of exchange, and his addressee who accepts it, can never, according to the principles of the law merchant, be liable otherwise than in their respective characters of drawer and acceptor. In other cases the character and liability of parties to a bill cannot be ascertained without the aid of proof, as, for instance, when a dispute arises in regard to the order of time in which indorsements were made upon a bill.” “On the other hand, it is undoubtedly competent for parties to a bill, by contract inter se, express or implied, to alter and even invert the positions and liabili- ties assigned to them by the law merchant. The drawer and acceptor of a bill may agree that, as between themselves the acceptor shall have the rights of a drawer, and that the drawer shall be subject to the liabilities of an acceptor, and that agreement when proved will be binding upon them both, although it can have no effect upon the obligations to third parties interested in the bill imposed upon them by the law merchant.” By the common law any alteration made subsequently to acceptance 1 Bank of Delaware County v. Broomhall, 38 Pa. St. 135. 2 Crow v. Mechanics' and Traders' Bank, 12 La. Ann. 092. 2 Wakeman v. Gowdy, 10 Bosw. (Sup. Ct. N. Y.)208; Story, Promissory Notes, §284. 4 As to the form and definition of a bill of exchange, Chamberlain v. Young, [1893] 2 Q. B. 206, where an instrument made payable to “ order ” was held to mean payable to “ my order,” i.e., of the drawer. s 45 & 46 Viet. c. 61, s. 39, sub-s. 1 ; Campbell v. French, 6 T. R. 200 ; Holmes v. Kerrison, 2 Taunt. 323. As to when a bill payable after sight is negotiated, seo s. 40. 6 45 & 46 Viet. c. 61, s. 39, sub-s. 2. 7 45 & 46 Viet. c. 61, s. 39, sub-s. 3. Ramchurn Midlick v. Radakissen, 9 Moo. P. C. C. 46, 65, 66, adopting Mellishv. Rawdon, 9 Bing. 416 ; 45 & 46 Viet. c. 62. s. 40. s Steele v. M'Kinlay, 5 App. Cas. 778 ; Jenkins v. Coomber, [1898] 2 Q. B. 108, a decision or ss. 55, 56 of the Bills of Exchange Act, 1882, holding that the principles laid down in Steele v. M'Kinlay are not superseded by the Act ; Harburg India Rubber Comb Co. v. Martin, [1902] 1 K. B. 778 ; Macdonald v. Whitfield, 8 App. Cas. 733. As to a promise to accept and the estoppels worked by acceptance or payment, see Mr. Holmes’s note, 3 Kent, Comm. (12th ed.) 85. When a party to a bill is discharged from his liability thereon by reason of the holder’s omission to perform his duties as to presentment for acceptance or payment, protest or notice of dishonour, such party is also discharged from liability on the debt or other consideration for which the bill was given : Bridges v. Berry, 3 Taunt. 130 ; Soward v. Palmer, 8 Taunt. 277; Peacock v. Pursell, 14 C. B. N. S. 728; Cambcjort v. Chapman, 19 Q. B. 1). 229, 233; but see Wcgg-Prosser v. Evans, [1894] 2 Q. B., per Wills, J„ 101, and on app., [1895] I Q. B. 108. As to qualified acceptance, see Meyer v. Dccroix, [1891] A. C. 520. The qualification must be by plain and intelligible language, and so made part of the acceptance itself that it is intelligible in the ordinary course of business. BANKERS. 1291 CHAP. III.] Dictum of Byles, J., in Swan v. North British Australasian Co. will not, even in the case of an innocent holder for value, avail to charge the acceptor ; 1 but now, “ where a bill has been materially altered, but the alteration is not apparent, and the bill is in the hands of a holder in due course, such holder may avail himself of the bill as if it had not been altered, and may enforce payment of it according to its original tenor ; except against such as are privy to the alteration and subsequent in- dorsers ; and they are liable . 2 In Stvan v. North British Australasian Co ., 3 Byles, J., says : “ The object of the law merchant, as to bills and notes made or become payable to bearer, is to secure their circulation as money ; therefore honest acquisition confers title. To this despotic but necessary principle the ordinary rules of the common law are made to bend. The misapplication of a genuine signature written across a slip of stamped paper (which transaction being a forgery would in ordinary cases convey no title) may give a good title to any sum fraudulently inscribed within the limits of the stamp, and in America, where there are no stamp laws, to any sum whatever. Negligence in the maker of an instrument payable to bearer makes no difference in his liability to an honest holder for value ; the instrument may be lost by the maker without his negligence, or stolen from him, still he must pay. ” The com- ment on this passage by Byles, J., himself, when it was cited in Foster v. Mackinnon , 4 is : “ If that be right, it can only be with reference Commented to the case of a complete instrument ; it can hardly be applicable on by the to a case where a man’s signature has been obtained by a fraudulent gem representation to a document which he never intended to sign.” The Mackinnon. judgment of the Court in Foster v. Mackinnon was delivered by Byles, J. Judgment of After referring to the judgment in Swan v. North British Australasian Byles, J., in Land Co ., 3 as establishing the proposition that “ if a deed be delivered F p^J inon and a blank left therein be afterwards improperly filled up (at least if that be done without the grantor’s negligence), it is not the deed of the grantor,” the learned judge adds : 6 “ Nevertheless, this principle, when applied to negotiable instruments, must be and is limited in its applica- tion. These instruments are not only assignable, but they form part of the currency of the country. A qualification of the general rule is necessary to protect innocent transferees for value. If, therefore, a man write his name across the back of a blank bill stamp, and part with it, and the paper is afterwards improperly filled up, he is liable as indorser. If he write it across the face of the bill, he is liable as acceptor, when the instrument has once passed into the hands of an innocent indorsee for value before maturity, and liable to the extent 1 Master v. Miller, 2 H. Bl. 140. 2 45 & 4G Viet. c. 61, s. 64 (1). Greenfield Savings Bank v. Stowell, 123 Mass. 196; Holmes v. Trumper, 7 Am. R., per Christiancy, J., 665, as to subsequent alteration of a note issued as “ a complete legal instrument.” What is a “ material alteration ” was the subject of decision in Suffell v. The Bank oj England, 9 Q. B. D. 555 ; Leeds Bank. v. Walker, 1 1 Q. B. D. 84 ; Imperial Bank of Canada v. Bank oj Hamilton, [1903] A. C. 49. Cp. London and Provincial Bank oj England v. Roberts, 22 W. R. 402. Gordon v. Third National Bank, 144 U. S. (37 Davis) 97, considers what is a material alteration in a promissory note. Phillimore, J., decided that the insertion of the word “limited” after the name of a company, payee, was, if material, not apparent : Bank oj Montreal v. Exhibit and Trading Co., 22 Times L. R. 722. A note to Draper v. Wood, 17 Am. R. 92, 97, collects the cases on the alteration of negotiable instruments. As to altera- tions in deeds at Common Law, Pigot’s case, 11 Co. Rep. 26 b, is modified by Aldous v. Cornwell, L. R. 3 Q. B. 573, and now applies only in the case of material altera- tions ; Crediton (Bishop of) v. Exeter (Bishop oj), [1905] 2 Ch. 455 ; Blair v. Assets Co., [1896] A. C. 409. The rules of law applicable to deeds were held applicable also to documents not under seal in Master v. Miller (supra) ; Henfree v. Bromley, 6 East, 309. See Cowie v. Halsall, 2 B. & Aid. 197. 2 2 H. & C. 175, 184 ; Burchfield v, Moore, 3 E. & B. 683 ; Gardner v. Walsh , 5E. &B. 83. 4 L. R. 4 C. P. 709. 5 2 H. & C. 175. 6 L. R. 4 C. P. 712. Comment. Lord Her- schell in Bank of England v. Vagliano. United States cases. Wood v. Steele. Judgment of Swayne, J. Rules relating to present- ment. Presentment must be within a reasonable time. 1292 NEGLIGENCE IN LAW. [book vti. of any sum which the stamp will cover. In these cases, however, the party signing knows what he is doing ; the indorser intended to indorse, and the acceptor intended to accept, a bill of exchange to be there- after filled up, leaving the amount, the date, the maturity, and the other parties to the bill undetermined.” So that if the bill is issued as a perfected instrument, which there is no intention on the acceptor’s part to have altered in any respect, no liability will attach to the acceptor by reason of an alteration. The dictum of Lord Herschell in Bank of England v. Vagliano must also be noted : 1 “ It is immaterial to the acceptor to whom the drawer directs him to make payment ; that is a matter for the choice of the drawer alone. The acceptor is only concerned to see that he makes the payment as directed, so as to be able to charge the drawer. It is in truth only with the drawer that the acceptor deals ; it is at his instance that he accepts ; it is on his behalf that he pays ; and it is to him that he looks either for the funds to pay with, or for reimbursement if he holds no funds of the drawer at the time of payment.” In a case depending on the interpretation of the law merchant the opinion of the Supreme Court of the United States is of the highest value, and in Wood v. Steele, 2 where an alteration was made in a promissory note after execution, Swayne, J., says : 3 “ The rules, that where one of two innocent persons must suffer, lie who has put it in the power of another to do the wrong must bear the loss, and that the holder of commercial paper taken in good faith, and in the ordinary course of business, is unaffected by any latent infirmities of the security, have no application to this class of cases. The defendant could no more have prevented the alteration than he could have prevented a complete fabrication ; and he had as little reason to anticipate one as the other. The law regards the security, after it is altered, as an entire forgery with respect to the parties who have not consented, and so far as they are concerned, deals with it accordingly.” Presentment is dispensed with “ where, after the exercise of reasonable diligence, such presentment cannot be effected.” 4 Where presentment is necessary and the bill payable after sight “ is negoti- ated, the holder must either present it for acceptance or negotiate it within a reasonable time ” ; if he do not do so, the drawer and all prior indorsers are discharged. 5 In Shute v. Robins 6 a bill drawn by bankers i [1891] A. C. 147. 2 6 Wall. (U. S.) 80. 2 Lx. 82. 4 The rules as to presentment for acceptance are set out in the Act 45 & 46 Viet, c. Cl, s. 41 ; “ holder ” is defined, sec. 2 ; “ holder in due course ” : Herdman v. Wheeler, [1902] 1 K. B. 361, 371 ; but see Lloyd's Bank v. Coolie, [1 907] 1 K. B., per Moulton, L.J., 805. Cp. Morrison v. Buchanan, 6 0. & P. 18. The presentment must be either to the drawee or his authorised agent: Cheek v. Roper, 5 Esp. (N. P.) 175. A hill should be presented for acceptance before maturity : O'Keefe v. Dunn, 6 Taunt. 305, 307 ; Nicholson v. Gouthit, 2 H. Bl. 610. The bill must he presented, though the holder may know that the drawee will not accept : Hilly. Heap, D. & R. (N. P.) 57 ; Prideaux v. Collier, 2 Stark. (N. P.) 57; and during the usual banking hours : Parker v. Gordon, 7 East, 385 ; Jameson v. Sivinton, 2 Taunt. 224,- hut pre- sentment after the usual hours is sufficient if there is s omebody at the place who sees the bill and gives an answer, but not otherwise : Henry v. Lee, 2 Chit. (K. B. ) 124 ; Bynner v. Russell, 7 Moore (C. P.). 266; Smith v. New South Wales Bank (1872), 8 Moo. P. C. C. N. S. 443, 461-463 ; 3 Kent, Comm. 96. 6 45 & 46 Viet. c. 61, s. 40 ; 3 Kent, Comm. 83. Any bond fide holder of a negotiable instrument, or any one lawfully in possession of it for the purpose of pay- ment, may present it for payment at maturity : Lejtleyv. Mills, 4 T. R. 170. Possession is sufficient prima facie evidence of right to present : Bachcllor v. Priest, 29 Mass. 398, 406, citing Bayley, Bills of Exchange (6th cd.), 139. As to payment at a particular place, Rowev. Young, 2 Brod. & B. (H.L.) 165, caused the passing of 1 & 2 Geo. IV. c. 78, re-enacted by 45 & 46 Viet. c. 01, s. 191 (2) (c.) o Moo. & M. 1 33, 3 C. & P. 80. See Fry v. H ill, 7 Taunt. 396. BANKERS. 1293 CHAP. ITI.] in the country on tlieir correspondents in London, payable after sight, was indorsed to the traveller of the plaintiffs. He kept it a week, then forwarded it to the plaintiffs ; they kept it two days, then transmitted it for acceptance. In the meantime the drawers had become bankrupt and the drawees refused to accept. An action was brought, and in summing up to the jury, after observing that the question was one of mixed law and fact, Lord Tenterden, C.J., said : 1 “ Whatever strict- Opinion of ness may be required with respect to common bills of exchange, payable ^ d J'® nter ' after sight, it does not seem unreasonable to treat bills of this nature, drawn by bankers on their correspondents, as not requiring immediate presentment, but as being retainable by the holders for the purpose of using them within a moderate time (for indefinite delay, of course, cannot be allowed), as part of the circulating medium of the country.” The jury found that the delay in this case was not unreasonable. To the same effect is the judgment of Tindal, C.J., in Mellish v. Opinion of Rawdon , 2 The bill must be forwarded within a reasonable time Tindal, c.J. under all the circumstances of the case, and with no unreasonable or improper delay. “ Whether there has been in any particular case reasonable diligence used, or whether unreasonable delay has occurred, is a mixed question of law and fact to be decided by the jury acting under the direction of the judge, upon the particular circumstances of each case.” 3 “ The law,” says Lord Cairns , 4 discussing what is to be regarded as What is an “ unreasonable time,” where an agent has to present, as between him unreasonable and his principal, “ does not lay down as an absolute rule any time which is reasonable or unreasonable, as between persons standing in this relation, for the execution by the agent of the duty which is imposed upon him. But inasmuch as the object of the transmission of a bill of this kind from principal to agent is to obtain the acceptance and payment of the bill, or, if it is not accepted, to guard the rights of the principal against the drawer in case recourse is to be had to the drawer, their Lordships are of opinion that the duty of the agent must be measured by those considerations, and that the duty of the agent is to obtain acceptance of the bill, if possible, but not to press unduly for acceptance in such a way as to lead to a refusal, provided that the steps for obtaining acceptance or refusal are taken within that limit of time which will preserve the right of his principal against the drawer.” There is, however, a difference between a bill circulating and a bill Distinction locked up. “ If,” says Buller, J., “ a bill drawn at three days’ sight were kept out in that way [in circulation] for a year, I cannot say that an d a bill" i Moo. & M. 136. 2 9 Bing. 416. locked up. 3 L.c. 423. In Slraker v. Graham, 4 M. & W. 721, delay in presentment was held unreasonable ; in Goupy v. Harden, 7 Taunt. 159, reasonable, as to which see 10 Moo. P. C. C. 115. 4 Bank of Van Dieman's Land v. Bank of Victoria, L. R. 3 P. C. 542. Cox v. National Bank, 100 U. S. (10 Otto) 704. The French Code de Commerce, Liv. 1, 8, § 11, requires a European bill, i.e., one’drawn from the continent or islands of Europe and payable within the European possessions of France, to be presented within three months from the date it bears, and in default the holder loses all recourse over. The rule as to reasonable time is well stated by Bigelow, J., in Prescott Bank v. Caverly, 73 Mass. 221 : “ Ordinarily, the question whether a presentment was within a reason- able time is a mixed question of law and fact, to be decided by the jury under proper instructions from the Court. And it may vary very much according to the particular circumstances of each case. If the facts are doubtful, or in dispute, it is the clear duty of the Court to submit them to the jury. But when they are clear and un- contradicted, then it is competent fof the Court to determine whether the reasonable time required by law for the presentment has been exceeded or not.” See Bayley, Bills of Exchange (6th ed.), 230, and note. Bills of Exchange Act, 1882 (45 & 46 Viet. c. 61), s. 40, sub-s. (3). 1294 NEGLIGENCE IN LAW. [book VII. Distinction drawn by Parke, B., between promissory notes and cheques. Chartered Mercantile Banlcof India, &c. v. Dickson. Lord Cairns treats the question as an open one. American authorities. Holder of bill presenting for acceptance before there would be laches. But if, instead of putting it in circulation, the holder were to lock it up for any length of time, I should say that he would be guilty of laches .” 1 The distinction has also been stated between bills payable at a certain number of days after date and bills payable at a certain number of days after sight. In the case of the former the holder is bound to use due diligence to present the bill at maturity ; in the latter, if he chooses he may put the bill into circulation instead of immediately presenting it. It is then uncertain when it may be presented, and the circumstances must determine the reasonableness or unreasonableness of the delay . 2 Again, there is a differenc in the law as to promissory notes. “ If,” says Parke, B ., 3 “ a promissory note payable on demand is, after a certain time, to be treated as overdue, although payment has not been demanded, it is no longer a negotiable instrument. But a promissory note payable on demand is intended to be a continuing security. It is quite unlike the case of a cheque which is intended to be presented speedily.” From what fell from Lord Cairns in the Chartered Mer- cantile Bank of India, &c. v. Dickson 4 5 the law still seems not to be finally settled. There it was contended that the law with regard to the time for the presentation of a promissory note payable upon demand or indorsed over, requires a presentation to the maker within a reason- able time. Lord Cairns said : “ The cases of bills of exchange and of cheques stand upon a footing obviously different, and the law as to them does not by any means of necessity decide the present question. We have been referred to some American authorities in support of the proposition that the question to be determined is always whether the presentation for payment was made within a reasonable time. Their Lordships think it better to assume, as was contended by the respondent, that this is a proper definition of the question to be con- sidered. They would be unwilling to preclude any argument upon that in a-ny other case when there might be an opportunity of considering it more fully.” Meanwhile the decision of the Exchequer stands. The effect of the American authorities may be summed up in the words used in Losee v. Dunkin : 5 “ There is no precise time at which such a note [a note payable on demand] is to be deemed dishonoured.” “ The demand must be made in reasonable time, and that will depend upon the circumstances of the case and the situation of the parties.” Blesard v. Hirst 6 decides that though it is not necessary that the holder should present a bill for acceptance before it becomes due 7 yet 1 Mailman v. D' Eguino, 2 H. Bl. 570. See the explanation of this by Tindal, C.J., in Mellish v. Rawdon, 9 Bing. 416, 423. 2 Goupy v. Harden, 7 Taunt. 159. 2 Brooks v. Mitchell, 9 M. & W. 18, and in the argument the same learned judge said : “ A promissory note payable on demand is current for any length of time,” nevertheless the Statute of Limitations runH from the date thereof : In re George, 44 Ch. D. 627. Edwards v. Walters, [1890] 2 Ch. 157 ; The law merchant is adopted with modifications in sec. 62 of the Bills of Exchange Act. In Tinson v. Francis, 1 Camp. 19, Lord Eilenborough, C.J., says : “ After a bill or note is due it comes dis- graced to the indorsee ” ; and Bulley, J., in Brown v. Davies, 3 T. It. 80, says that to take an overdue note or bill “ is out of the common course of dealing.” But these eases must be treated as overruled, Charles v. Marsden, 1 Taunt. 224, 225 ; Slurtevant v. Ford, 4 M. & G. 101. The authorities are considered in In re Overend, Gurney tb Co., Ex parte Swan, L. R. 6 Eq. 344, 358. See Daniel, Negotiable Instruments, (4th ed.), §610. 4 L. R. 3 P. C. 579. See In re Rutherford, 14 Ch. Div. 687. 5 7 Johns. (Sup. Ct. N. Y.) 70. 6 5 Burr. 2670. 7 Notice of dishonour is not necessary where the drawee is, and at the time of (he BANKERS. 1295 CHAP. ITT.] if he do so he must give immediate notice of the refusal to accept to all parties to the bill to whom he desires to resort for payment in case it is dishonoured ; and this was accepted as correct in Goodall v. Dolley ; 1 if the holder fails to do this the indorser is discharged. In the last- mentioned case it was also said that a subsequent proposal by the indorser to pay the bill by instalments, made without knowledge of the indorsee’s laches, is not a waiver of the want of notice. The Statute of Limitations runs from the time of presentation. 2 There is a distinction to be observed in relation to the presenting a bill for acceptance between the case of the owner of a draft and his agent for collection. In the case of the owner he is not bound to present a draft payable at a date certain, for acceptance before that day. But the agent (this is as between him and his principal) must act with due diligence to get the draft accepted as well as paid ; and he has not the discretion and latitude of time given him that the owner has, but is responsible for all damage sustained by the owner for any unreasonable delay of which he is guilty. 3 The drawee need not say straightway whether he will accept or refuse. In Bank of Van Diemen's Land v. Bank of Victoria , 4 their Lordships were prepared to hold that it was “ the ordinary custom of merchants to leave a bill for acceptance twenty-four hours with the person upon whom it is drawn ” ; so that, where the twenty-four hours would expire after business hours on a Saturday, “ it was a natural and justifiable act to postpone the demand for an answer ” 5 till Monday. 6 The holder of a bill may refuse to take a qualified acceptance, and may treat a bill accepted in a qualified manner as non-accepted. 7 (j 8) A bill must be also presented for payment 8 on penalty of dis- charging the drawer and indorsers. 9 If the bill is not payable on demand, presentment must be made on the day it falls due. 10 If the bill is payable on demand, then present- ment must be made within a reasonable time after its issue in order to maturity must give notice to all parties in case of dishonour. Proposal to settle made without knowledge of holder’s laches no waiver of indorser’s rights. Distinction between duty of owner and of agent in presenting bill. Immediate answer not required from the drawee. Qualified acceptance. (/3) Present- ment for payment. render the drawer liable, and within a reasonable time after its indorse- drawing of the bill was without effects of the drawer in his hands : Bickerdilce v. Bollman, 1 T. R. 405. See The Bills of Exchange Act, 1882 (45 & 40 Viet. c. 61), s. 50 ; Carew v. Duckworth, L. R. 4 Ex. 313, and per Brain well, B., 316 ; Turner v. Samson, 2 Q. B. D. 23. 1 1 T. R. 712. 2 Whitehead v. Walker, 9 M. & W. 506. 2 Exchange National Bank v. Third National Bank, 112 U. S. (5 Davis), 276, 291, citing 3 Kent, Comm. 82, and Chitty, Bills of Exchange (13th Am. ed.), 272, 273. 4 L. R. 3 P. C. 543. s L.c. 547. Lord Cairns (546), says of the term “ excusable neglect ” : “ it must mean this — that an excuse valid in law existed from that which, primd facie, and if the excuse did not exist, would in law be a neglect. ’ ’ •o In Ingram v. Foster, 2 Sm. (K. B.) 243, 245, it was said by Lord Ellenborough, C. J., that the law of merchants at Hamburg, and which prevails all over the continent of Europe, is that when a bill is kept more than twenty-four hours after presentation for acceptance it amounts to an acceptance ; The Bills of Exchange Act, 1882, s. 42, recognises “ the customary time.” Lord Ellenborough intimated a desire to have the point, amongst others, argued whether, if the holder allows further time, he should not inform his indorser, and put him in as good a situation as himself. 2 45 & 46 Viet. c. 61, s. 44, sub-s. (1) ; as to rights where there is a qualified acceptance, see ss. 19 and 52. 8 See Mr. Holmes’s note on Place of Presentment to 3 Kent, Comm. (12th ed.) 96. 2 45 & 46 Viet. c. 61, s. 45. “ It is too late now.” says Lord Ellenborough, (Esdaile v. Sowerhy (1809), 11 East, 114), “to cortend that the insolvency of the drawer or acceptor dispenses with the necessity of a demand of payment, or of notice of the dishonour.” See 45 & 46 Viet. c. 61, s. 48. Excuses for delay or non-presentation for payment are regulated now by 45 & 46 Viet. c. 61, s. 46. io 45 & 46 Viet. c. 61, s. 45, sub-s. 1. 1290 NEGLIGENCE TN LAW. [BOOK VII. American cases. How to be made. Rule as to presentment for payment. Where parties to bill live in the same place. ment to render the indorser liable . 1 Reasonable time is, we have seen when discussing presentment for acceptance, most often a mixed question of law and fact . 2 Quam longum esse debet non deflnitur in jure, sed pendet ex discretione justiciariorum . 3 Delay in making present- ment for payment is excused when caused by circumstances beyond the control of the holder and not imputable to his servants’ misconduct or negligence . 4 In some American cases 5 reasonableness of notice or demand, or due diligence when the facts are not in dispute, has been held a question of law. The difficulty is to dissociate it from the facts, and the case will not often arise where it is possible to dispense with the assistance of the jury . 6 Presentment for payment 7 must be made by the holder, or by some person authorised to receive payment on his behalf, at a reasonable hour on a business day at the proper place , 8 either to the person designated by the bill as payer, or to some person authorised to pay or refuse payment on his behalf, if with the exercise of reasonable diligence such person can there be found. The rule at common law has been thus expressed : 9 A man taking a bill or note payable on demand, or a cheque, is not bound, laying aside all other business, to present or transmit it for payment [on] the very first opportunity. It has long since been decided, in numerous cases, that, though the party by whom the bill or note is to be paid live in the same place, it is not necessary to present the instrument for payment till the morning next after the day on which it was received . 10 And later cases have established that the holder of a cheque has the whole of the banking hours of the next day within which to present it for payment . 11 Where the parties live in the same place a bill of exchange ought to be presented the next day after the payee has received it. If it has to be sent by post to be presented, it ought to be posted on the day next after the day on which it was received, and it is then the duty of the 1 45 & 46 Vict.'c. 61, s. 45, sub-s. (2). A note payable on demand is not so strictly construed overdue as other instruments : Camidge v. AUcnby, 6 B. & C. 373 ; as to bankers’ cash-notes, Rogers v. Langford, 1 Cr. & M. 637 ; Robson v. Oliver , 10 Q. B. 704 ; 45 & 46 Viet. c. 61, s. 36. In Bowes v. Howe, 5 Taunt. 30, an allegation in the declaration that the makers became insolvent and “ ceased and wholly declined and refused to pay ” any of their notes, was held insufficient, as not being equivalent to an allegation of presentment. Not even the bankruptcy or insolvency of the drawee or maker will avail as an excuse for not presenting; for many means may remain of obtaining payment by the assistance of friends or otherwise : Sands v. Clarke, 8 C. B. 751 ; In re East of England Banking Co., L. R. 4 Ch. 14. 2 Ante, 1292 ; Manwaring v. Harrison, 1 Stra. 508. 3 Co. Litt. 56 b. * 45 & 46 Viet. c. 61, s. 46, sub-s. (1). Cp. Patience v. Townley, 2 Sm. (K. B.) 223. s Ay mar v. Beers, 7 Cowen (N. Y.), 705 ; Bank of Columbia v. Lawrence, 1 Peters (U. S. ), 578, where the rule applicable when the party, to whom notice is to bo given, has no regular place of business in the city or town where the holder resides, yet receives his letters there, is considered. Remer v. Downer, 23 Wend. (N. Y. ) 620. 6 3 Kent, Comm. (13th ed.), 105, n. (ad). Where sudden illness or death of or accident to the holder or his agent prevents the presentment of the bill or note in duo season, or the communication of notice, the delay is excused, provided that present- ment is made and notice given as promptly afterwards as the circumstances permit : Daniel, Negotiable Instruments (4th ed.), § 1125. 7 45 & 46 Viet. c. 61, s. 45, sub-s. (3). Post, 1301. 8 As to what is the proper place at which to present a bill, see 45 & 46 Viet. c. 61, s. 45, sub-s. (4). 9 Byles, Bills of Exchange (16th ed.), 284. Ward v. Evans, 2 Ld. Raym. 928 ; Moore v. Warren, 1 Str. 415. i Robson v. Bennett, 2 Taunt. 388 ; Movie v. Brown, 4 Bing. N. C. 266. CHAP, ni.l BANKERS 1297 person who receives it by post to present it on the day next following the day on which it is received. 1 This is not so with promissory notes. In the case of these it is a Exceptions, question for the jury whether the delay in presentment is in all the circumstances reasonable or unreasonable. 2 Bills of exchange and cheques, we have already noted, stand upon a footing obviously different. Bank-notes and bankers’ cash-notes 3 differ again, since they are intended to circulate as money, and are not intended as a continuing security in the hands of any single owner. The leading case dealing with this class of securities is Camidge v. Camidge v. Allenby , 4 There Bayley, J., lays down the general rule applicable to Allenb v- negotiable instruments to be “ that the holder of such an instrument appn ca bi e to is to present promptly, or to communicate without delay notice of non- negotiable payment, or of the insolvency of the acceptor of a bill or the maker of instruments a note, for a party is not only entitled to knowledge of insolvency, but Bayley^.r' 1 by to notice that in consequence of such insolvency he will be called upon to pay the amount of the bill or note.” 5 The rule as to bank-notes is declared to be that, since they are Rule as to intended for circulation, the holder is not bound immediately 6 to bank notes - circulate them or send them into the bank for payment, but he is hound to do one or the other “ within a reasonable time after he had received them ” ; 7 so that where notes of a Huddersfield bank, which had stopped payment the same morning at eleven o’clock (though the fact was not known to either payer or payee), were handed over to a creditor at York on Saturday afternoon at three o’clock in payment of an account, and were neither circulated nor presented for payment, and a week after the payee required the payer to take them back and to pay the amount of them, the Court of King’s Bench held that, “ in consequence of the negotiable nature of the instruments, it became his [the payee’s] duty to give notice to the party who paid him the notes, that the bankers had become insolvent, and that he, the plaintiff, would resort to the defendant for payment of the notes ; and it would then have been for the defendant to consider whether he could transfer the loss to any other person, for unless he had been guilty of negligence, he might perhaps have resorted to the person who paid him the notes.” 8 1 Byles, Bills of Exchange (16th ed.), 285. 2 Chartered Mercantile Bank of India, &c. v. Dickson, L. R. 3 P. C. 574, 579 ; 45 & 46 Viet. c. 61, s. 86. As to cancellation without authority by an agent employed to collect a bill, Bank of Scotland v. Dominion Bank (Toronto), [1891] A. C. 592. 3 Shute v. Robins, 3 C. & P. 80. 4 6 B. & C. 373, 383 ; Robinson v. Hawks/ord, 9 Q. B. 52. “ I have before said, the holder of a bill of exchange is not, omissis omnibus aliis negotiis, to devote himself to giving notice of its dishonour. It is enough if this be done with reasonable expedi- tion. . . . Here a day has been lost. ... If a party has an entire day he must send off his letter conveying the notice within post time of that day ” : per Lord Ellen- borough, C.J., Smith v. Mullelt, 2 Camp. 209. Now 45 & 46 Viet. c. 61, s. 49, sub-s. (12), regulates the time within which notice of dishonour must be given : The Elmville, [1904] P. 319. 6 See Robson v. Oliver, 10 Q. B. 704 ; James v. Holditch, 8 D. & R. 40. In an action by an indorsee on a bill of exchange, if it appear that a prior party was defrauded out of it, the plaintiff is bound to prove the consideration he gave for it : Rees v. Marquis of Headfort, 2 Camp. 574; 45 & 46 Viet. c. 61, s. 30, sub-s. (2). Tatam v. Haslar, 23 Q. B. D. 345, 348. 6 Shute v. Robins, 3 C. & P. 80. If the notes have to be transmitted, they may be cut in halves, and sent in different parcels and on different days : Williams v. Smith, 2 B. & Aid. 496. 7 6B. &C. 382. 8 See The Fcronia, L. R. 2 A. & E. 65, 79, for the law as to the consequences of neglect to give notice, which “ presumes that if the drawer has not had due notice he 1298 NEGLIGENCE TN LAW. Right of resort de- pendent on indorsement. Holder of bill of exchange for value not disentitled to recover by reason of negligence. Pollock, C.B., in Rogers v. Hadley, on the effects of fraud. Fraud in the acquisition of a bill. [BOOK VII. This right of resort, in the case of bills of exchange and of cheques, is dependent upon indorsement. By the Bills of Exchange Act, 1882, 1 a transferor by delivery is not liable on the instrument. He is liable to his immediate transferee, being a holder for value, on an implied warranty connected with, but collateral to, the instrument, to the effect that the instrument is what it purports to be, that he has a right to transfer it, and that at the time of transfer he was not aware of any fact that rendered it worthless. 2 Where value is given for a bill of exchange, carelessness, negligence, or foolishness is not enough to disentitle the holder to recover if there is anything wrong with it ; nor yet in itself is taking it at a considerable undervalue. They are matters tending to show the existence of dishonesty, but do not in themselves constitute matter of defence. To do this it must be shown that the person who gave value for the bill was affected with notice that there was something wrong about it when he took it. In that case he takes it at his peril. The real point is, did he know there was something wrong -about it. If “ he refrained from asking questions, not because he was an honest blunderer or a stupid man, but because he thought in his own secret mind — I suspect there is something wrong, and if I ask questions and make farther inquiry, it will no longer be my suspecting it, but my knowing it, and then 1 shall not be able to recover. I think that is dishonesty.” 3 Where that is found no right can avail. As Pollock, C.B., says : 4 “ By the law of England fraud cuts down everything. I believe that is the common mode of expressing a legal proposition known to every lawyer in Westminster Hall. The law sets itself against fraud to the extent of breaking through almost every rule, sacrificing every maxim, gettingrid of every ground of opposition which may be presented, so as to prevent it from succeeding. So much does the law of England abhor fraud that even the maxim that you can never aver against the record is not allowed to prevail if fraud can be shown ; and probably there is no maxim more stringent than that you cannot aver against the record. The law will not allow technical difficulties of any kind to interfere to prevent the success of right and justice and truth.” The consequences of fraud, however, affect a bill no further than its acquisition. To trace back its course until fraud is found in some earlier transaction during its currency will not avail ; for to do this would, in the words of Lord Kenyon, 6 “ be at once to paralyse the circulation of all the paper in the country, and with it all its commerce.” Abbott, C. J., strove for a different rule in Gill v. Cubitt, 6 but the earlier is injured, because otherwise he might have immediately withdrawn his effects from the hands of the drawee.” The Feronia is overruled on the question of the maritime lien of the master in The“ Sara,” 14 App. Cas. 209. 1 Sec. 58, sub-s. (2). Cp. ex parte Roberts, 2 Cox (Ch.), 171 ; Fenn v. Harrison, 3 T. It. 757 ; Ex parte Bird, 4 De G. & S. 273. See ss. 23, 91 ; Hindus v. Bradwell, 5 C. B. 583, 591 ; Trueman v. Loder, 11 A. & E. 589, 594 ; Pooley v. Driver, 5 Ch. D. 458. 2 Sec. 58, sub-s. (3). The Statute of Limitations beigns to run immediately on pay- ment being made, though the instrument is forged : Brce v. Ilolbech, 2 Doug. 054 ; Leather Manufacturers' Bank v. Merchants' Bank, f 28 U. S. (22 Davis) 20. 3 Per Lord Blackburn, Jones v. Gordon, 2 App. Cas. 029. Cp. Tatam v. Haslar, 23 Q. B. D. 345. Foster v. Pearson, 1 Cr. M. & R. 849, approved in London Joint Stock Bank v. Simmons, [1892] A. C. 201. In America there is great mass of authority the other way ; this is collected in a note to People's Bank v. Franklin Bank, 17 Am. St. R. 884. See post, 1340. 4 Rogers v. Hadley, 32 L. J. Ex. 248. 5 Lawson v. Weston, 4 Esp. (N. P.) 56. 6 3 B. & C. 400. The history of the decisions is given in Phelan v. Moss, 07 Pa. St. 59. Snow v. Peacock, 11 Moo. (C. P.) 286, 3 Bing. 406, is the case where the dicta in Gill v. Cubitt first take shapo as a rule. BANKERS. 1299 CHAP. III.] rule was adopted in Goodman v. Harvey, 1 and may be considered established by the decision in Raphael v. Bank of England. 2, The law, then, is now settled 3 that negligence does not invalidate the title of one who takes a negotiable instrument in good faith and for value . 4 The question may then arise of what circumstances are sufficient What circum- to amount to proof of mala fides. “ I agree,” said Parke, B ., 5 “ that stances are ‘ notice and knowledge ’ means not merely express notice, but know- raise^caseof ledge or the means of knowledge to which the party wilfully shuts his fraud, eyes ” ; and Lord Herschell, in London Joint Stock Bank v. Simmons , 6 says : “ If there is anything to arouse suspicion, to lead to a doubt whether the person purporting to transfer them [negotiable instru- ments] is justified in entering into the contemplated transaction,” “ the existence of such suspicion or doubt would be inconsistent with good faith. And if no inquiry were made, or if on inquiry the doubt were not removed and the suspicion dissipated, I should have no hesitation in holding that good faith was wanting in a person thus acting.” If, then, the circumstances are of such a character as to create either a presumption of fraud or to suggest a right in any prior party, they operate as notice to the transferee. But it is not a good ground of defence against a bond fide holder for value that he was informed that the note was made or the bill accepted in consideration of an executory contract unless he was also informed of its breach . 7 In an American case 8 it was further held that the mere fact that the American consideration for which a note is given is recited in it, although it may decislon - appear thereby that it was given for or in consideration of an executory contract or promise on the part of the payee, will not destroy its negotiability, unless it appears, through the recital, that it qualifies the promise to pay, and renders it conditional or uncertain either as to the time of payment or the sum to be paid ; but “ if, at the time of the indorsement, the consideration has in fact failed, the recital might be sufficient to put him (the holder) on inquiry, and in connection with other facts amount to notice.” 9 The general proposition, that a person who takes an accommodation Transferee of bill after it has been dishonoured cannot be in a better situation than ^jl^after the drawer as against the acceptor, is no longer law ; 10 for negotiable s K>I10ul ‘ 1 4 A. & E. 870. 2 17 C. B. 161. See per Field, J., in London and County Banking Co. v. Groome, 8 Q. B. D. 294. The preponderating rule in America is the same as the rule in England ; nevertheless Gill v. Cubilt is followedin some Courts, Daniel, Negotiable Instruments (4th ed.), §775. 3 Per Lord Herschell, London Joint Stock Bank v. Simmons, [1892] A. C. 219. 45 & 46 Viet. c. 61, s. 90 : “A thing is deemed done in good faith within the meaning of this Act when it is in fact done honestly, whether it is done negligently or not.” 4 Bank of Bengal v. Macleod, 5 Moo. Ind. App. 1 ; Bank of Bengal v. Fagan, 7 Moo. P. C. C. 61. s May v. Chapman, 16 M. & W. 361. Daniel, Negotiable Instruments (4th ed. § 796. • e [1892] A. C. 223. 2 Daniel, Negotiable Instruments, § 790. Patten v. Gleason, 106 Mass. 439. 8 Siegel, Cooper Carter v. White, 25 Ch. D. 666 ; Hitchcock v. Ilumfrcy, 5 M. & G. 559 ; Walton v. Mascall, 13 M. & W. 452. Ex parte Bishop, 15 Ch. D. 400, guarantee given according to course of business by London bill-brokers to their bankers is equivalent to indorse- ment. 10 Burbridge v. Manners, 3 Camp. 193, 195 ; Schohy v. Ramsboltom, 2 Camp. 485. 11 16 Q. B. 560. Woods v. Thicdemann, 1 H. & C. 478, 495. The distinction between Robarts v. Tucker and Bank of England v. Vagliano, [1891] A. C. 107, is that in Robarts v. Tucker the acceptor did not contribute to mislead the bankers, and when there is a bond fide payee, the acceptor remains liable to him. But where there is a real payee, as in Vagliano' s case, and the drawer indorses (he name of a pretended payee, there is no outstanding liability from which a discharge is needed for the acceptor’s protection. Robarts v. Tucker, in the main, has now statutory sanction by virtue of the Bills of Exchange Act, 1882 (45 & 46 Viet. e. 61), s. 24 ; though, as is pointed out presently, the application of the decision to cheques is disallowed by the same authority. Post, 1314. BANKERS. chap. I it.] 1303 extremely onerous. Lord Herschell, indeed, goes so far as to say the Criticism of decision “ rested upon the assumption that it was possible for a banker ^3 ^ h jj to do that which would be, commercially speaking, absolutely im- practicable — viz., to investigate the validity of all the indorsements before he complied with the direction of his customers and paid the bill ” ; 1 but, as is suggested in the judgment of Parke, B., 2 the banker Anticipated may, if he pleases, avoid it by requiring his customers “ to domicile by Parke, 1?. their bills at their own offices and to honour them by giving a cheque upon the banker.” Failing this, they are liable if they pay on other than a genuine indorsement. 3 Lord Halsbury, C., in Bank of England v. Vagliano , 4 was not “ prepared to assent to the proposition that it ( i.e ., the decision in Robarts v. Tucker ) is ‘ a harsh decision.’ A customer tells his banker to pay a particular person; the banker pays some one else, and it would seem to follow as a perfectly just result that the banker should be called upon to make good the amount he has so erroneously paid.” The law as laid down in Robarts v. Tucker was shortly afterwards Law declared modified by statute, 5 and the alteration thus effected was continued jp Robarts v. in the Bills of Exchange Act, 1882 ; 6 so that, when a bill payable to Edified by order on demand is drawn on a banker, and the banker on whom it is statute, drawn pays the bill in good faith and in the ordinary course of business, it is not incumbent on the banker to show that the indorsements are genuine ; and he is protected if the indorsements are forged ; 7 and also, as in Charles v. Blackwell , 8 where an agent who has authority to receive bills but not to indorse them, does indorse and so obtains payment and appropriates the proceeds ; for “ the form of this indorsement, pur- porting to be that of an agent, would have made it incumbent on him [the banker] to ascertain, before he paid the cheque, that the agent had authority to indorse.” Robarts v. Tucker remains law in cases not within the terms of this enactment. Notice of dishonour must be given by the holder of a bill to the Notice of drawers and indorsers, or to their authorised agent, to entitle the dishonour, holder to a suit against them. This must be done with reasonable diligence ; and it seems now settled that each person successively into whose hands a dishonoured bill passes is allowed one entire day to give 1 Bank of England v. Vagliano, [1891] A. C. 155. 2 16 Q. B. 579. 2 From this statement Lord Macnaghten draws the conclusion that the relation of banker and customer does not of itself, and apart from other circumstances, impose upon a banker the duty of paying his customer’s acceptances, Bank of England v. Vagliano, [1891] A. C. 157. Vagliano’ s case is considered and distinguished in Shipman v. Bank of State of New York, 126 N. Y. 318, 22 Am. St. R. 821. There it is said (126 N. Y. 335), per O’Brien, J., delivering the opinion of the Court : “ Our statute is a codification of the Common Law, while the English statute is, and was intended to be, a departure from it. In so far as the opinions deal with the facts of the case upon the question of negligence, it is difficult to deduce from them any abstract rule or principle.” This last assertion is in close accord with what is said by Lord Bramwell in delivering his opinion in Vagliano' s case, [1891] A. C. 143. The Code alluded to and the decisions upon it are inserted as an appendix to vol. ii., Street, Foundations of Legal Liability, where detailed comparison with the English Act is made. * [1891] A. C. 117. See per Lord Esher when giving judgment in the same case in the Court of Appeal, 23 Q. B. D. 254 ; and, as supporting the view of the Lord Chancellor, Lord Bramwell and Lord Macnaghten, [1891] A. C. 141 and 158 respectively. 6 16 & 17 Viet. c. 59, s. 19, extended 35 & 36 Viet. c. 44, s. 11 ; Gordon v. Capital and Counties Bank, [1903] A. C. 240, 250. s 45 & 46 Viet. c. 61, s. 60. By sec. 73 a cheque is a bill. See Guardians of Halifax Union v. Wheelwright, L. R. 10 Ex. 183; and per Lord Selborne, Bank of England v. Vagliano, l.c. 130. 7 “ I am inclined to think that sec. 8 [of 45 & 46 Viet. c. 61] divides bills into three classes — bills not negotiable, bills payable to order, and bills payable to bearer ; so that a bill payable to order must always be negotiable ” : per Fry, L. J., National Bank v. Silke, [1891] 1 Q. B. 439. 8 2 C. P. D. 151, 159. VOL. II. 2 O NEGLIGENCE IN LAW. 1304 [book Vlt. Acceptance admits drawer’s signature but not indorser’s. Primd facie duty of banker to pay only to the order of payee may be rebutted. Banker not negligent in receiving cheque for bills of exchange. Innocent holders of forged instruments. Price v. Neal. notice. The rules applicable are set out with some particularity in the Bills of Exchange Act, 1882. 1 It may here be noted that though an acceptance of a bill admits the drawer’s signature, it does not as a rule admit the genuineness of an indorsement, even though the indorsement were on the bill before acceptance. This was held the law, 2 though with some reluctance. 3 Since the Bills of Exchange Act, 1882, the point is concluded by statute. 4 Though the duty of the banker is, primd jade, only to pay to the order of the person named as payee on the bill or under the limitations marked out by the Bills of Exchange Act, 1882, 5 yet as between banker and customer there may be circumstances that rebut this primd facie case. This is pointed out by Lord Selborne in Bank of England v. Vagliano . 6 “ Negligence on the customer’s part,” says he, “ might be one of those circumstances ; the fact that there was no real payee might be another ; and I think that a representation made directly to the banker upon a material point, untrue in fact (though believed by the person who made it to be true), and on which the banker acted by paying money which he would not otherwise have paid, ought also to be an answer to that primd facie case. If the bank acted upon such a representation in good faith, and according to the ordinary course of business, and a loss has in consequence occurred which would not have happened if the representation had been true, I think that is a loss which the customer, and not the bank, ought to bear.” When a banker receives bills to present for payment it is not negligent of him to deliver the bills to the acceptor on receipt of a cheque for the amount of the bills. In a case in which the contention was raised, that the acceptance of a cheque in such circumstances was negligence, the Court of King’s Bench said emphatically : 7 “We dare not even grant a rule to show cause, as it would be putting the whole trade of London in suspense, pending it.” There is no ground to impute negligence to the defendants. The law as to the liabilities of innocent holders of forged instruments is treated in Price v. Neal. 8 A bill was indorsed to the defendant for valuable consideration, and notice was left at plaintiff’s house on the day the bill became due. Plaintiff sent his servant to take it up. Another bill was then drawn which the plaintiff accepted, and which was also indorsed to the defendant for valuable consideration, left at his bankers, paid by order of the plaintiff, and taken up. Both these bills were forged by one Lee, who was, subsequently to payment, and before action brought, hanged for forgery. Defendant was found to have acted innocently, and bond fide without the least privity or suspicion of the forgeries, 1 45 & 46 Viet. c. 01, s. 49. The subject is treated with considerable minuteness and with reference to the cases, 3 Kent, Comm. (13th ed.), 104-11 1, cum no! is. 2 Smith v. Chester, 1 T. R. 654 ; Carvick v. Vickery, 2 Doug. 653 n. ; Cooper v. Meyer, 10 B. & C. 468. Daniel, Negotiable Instruments (4th ed.), §§ 532-540, lays down that (a) an acceptance admits : (1) the signature of the drawer ; (2) funds of the drawer in drawee’s hands ; (3) drawer’s capacity to draw ; (4) payee’s capacity to indorse ; (5) agent’s handwriting and authority, where there is an agent. ( b ) An acceptance does not admit : (1) signature of payee; (2) agency to indorse ; (3) genuineness of terms in the body of the bill. 2 Per Lord Selborne, Bank of England v. Vagliano, [1801] A. C. 126. 4 45 & 46 Viet. c. 61, s. 54. 5 45 & 46 Viet. c. 61 ; and see Edinburgh Ballarat Cold Quartz Mine Co. v. Sydney, 7 Times L. R. 656. « [1891] A. C. 123. 7 Russell v. Hanlce.y, C T. R. 12. 8 (1762), 3 Burr. 1354. BANKERS. 1305 CHAP. III.] and to have paid the whole value of the bills. On motion after verdict Opinion of for the plaintiff, Lord Mansfield 1 said: In an action for money had and received, “ the plaintiff cannot recover the money unless it is 1 s " ' ' against conscience in the defendant to retain it ; and great liberality is always allowed in this sort of action . 2 But it can never be thought unconscientious in the defendant to retain this money when he has once received it upon a bill of exchange indorsed to him for a fair and valuable consideration, which he has bond fide paid without the least privity or suspicion of any forgery.” “ It is a misfortune which has happened without the defendant’s fault or neglect. If there was no neglect in the plaintiff, yet there is no reason to throw off the loss from one innocent man upon another innocent man ; but in this case, if there was any fault or negligence in any one, it certainly was in the plaintiff and not in the defendant.” Lord Kenyon, C.J.’s, ruling in Barber v. Gingell , 3 may illustrate Explained by this. The defendant proved a plea of forgery to a declaration on a k°^dKeny°n bill of exchange ; and the Chief Justice ruled that it was a good answer Gingell. for the plaintiff to show that the defendant had paid other bills of the same party under similar circumstances ; “ for though the defendant might not have accepted the bill, he had adopted the acceptance and made himself thereby liable to the payment of it.” 4 This is probably not correct in its whole breadth of expression. “ One who pays one bill which purports to bear his signature as acceptor thereby makes evidence against himself that the person who wrote the acceptance did so with his authority ; and, if the bill is given in a course of business implying a continuance of such authority, it may be conclusive authority ” ; 5 but the doctrine cannot be carried further than this. The jury may find, if there be evidence to leave to them, that the defendant is precluded from setting up the forgery or want of authority, yet apart from this a forged signature is “ wholly in- operative.” 6 Where money has been paid on the faith of a forged signature a prejudice may exist on the part of a jury against finding that it should be repaid ; but where the answer of a ratified forgery is made to a lawful demand of payment the difficulty in the defendant’s way, notwithstanding Lord Kenyon’s opinion, would be practically insuperable, since a forgery cannot be ratified. Price v. Neal was considered “very distinguishable” in Jones v. Price v. Neal Ryde , 7 where it was held that a person who discounts a forged Navy distinguished 1 L.c. 1357. v. Ryde. 2 See Moses v. Macferlan, 2 Burr., per Lord Mansfield, 1010. When plaintiff’s money has been wrongfully obtained by the defendant, the plaintiff may waive the wrong, and claim as money received to his use : Hambly v. Troll, 1 Cowp. 371, 376 ; Lindon v. Hooper, 1 Cowp. 414, 419. Money feloniously stolen constitutes a debt from the felon : Chowne v. Baylis, 8 Jur. N. S. 1028 ; so also money obtained under a fraudulent contract, Street v. Blay, 2 B. & Ad. 456 ; Bannatyne v. D. & C. Maclver, [1906] 1 K. B. 103. 3 (1800), 3 Esp. (N. P.) 60. 4 See Leach v. Buchanan, 4 Esp. (N. P.) 226, where defendant accredited a forged bill, and thereby induced plaintiff to take it ; also Mather v. Lord Maidstone, 18 C. B. 273 ; 1 C. B. N. S. 273 ; De Feriet v. Bank of America, 23 La. Ann. 310. 5 Per Willes, J., Morris v. Bethell, L. B. 5 C. P. 51. 6 45 & 46 Yict. c. 61, s. 24. The proviso to which is “ nothing in this section shall affect the ratification of an unauthorised signature not amounting to a forgery.” Post, 1309. t 5 Taunt. 488, 492. Cp. Oomperlzv. Bartlett, 2 E. & B. 849 ; Gurney s. Womersley, 4 E. & B. 133 ; see also Wilkinson v. Johnstone, 3 B. & C. 428, money paid in discharge of a forged bill ; Burchfield v. Moore, 3 E. & B. 683 : money given for a bill of exchange avoided by a material alteration ; Young v. Cole, 3 Bing. N. C. 724 : money given for bonds sold as valid, but proved worthless ; Turner v. Stones, 1 Dow. & L. 122 ; and Woodland v. Fear, 7 E. & B. 519 : money given for a worthless note or cheque. Bruce v. Bruce. Price v. Neal followed in Smith v. Mercer. Rule stated in Codes v. Masterman. Followed in London and River Plate Bank v. Bank of Liverpool , 1306 NEGLIGENCE IN LAW. [book vii. bill for another who passed it to him without knowledge of the forgery, may recover back what he has paid as money had and received to his use upon failure of the consideration. “ If a person gives a forged bank-note there is nothing for the money ; it is no payment.” 1 A clear distinction between Jones v. Ryde and Price v. Neal is, that in the former case the parties did not pay money upon contracts supposed to be their own and which they were bound to know, but they received in discharge of another’s contract something which purported to be of value yet was worth nothing. 2 Bruce v. Bruce 3 is the case of the forgery of a victualling bill, which the victualling office on whom it was drawn had paid before the forgery was discovered ; the decision is on the lines of Jones v. Ryde ; the victualling office was a public body, and not so likely to know the signature of their officers as a merchant is to know his own signature or the signatures of those authorised by him, and the payment was without consideration. 4 The majority of the Common Pleas (Chambre, J., dissenting) in Smith v. Mercer , 5 held that an intelligible rule was furnished by Price v. Neal, where Jenys v. Fawler 6 had been cited for the proposition that “ proof of forgery shall not be admitted on behalf of the acceptor of a bill because it would hurt the negotiation of paper credit.” 7 In Smith v. Mercer 5 bankers paid a bill presented to them, which proved a forgery, and which was repudiated by their customer on whose account it purported to be paid. They then sued the defendants in assumpsit for money had and received ; in which action they failed on the ground that by the acts of the plaintiffs, the defendants were put in a worse position, and that a banker’s duty to know the handwriting of his customer is even a more stringent duty than that of an acceptor to know the drawer’s handwriting. These cases are canvassed in Wilkin- son v. Johnston , 8 and in Cocks v. Masterman . 9 In Wilkinson v. Johnston 8 the general rule that money paid under a mistake of fact may be recovered back as being paid without con- sideration was held to be clear. To this rule Price v. Neal and Smith v. Mercer were exceptions. In the present case the plaintiffs dis- covered the mistake on the morning of the day on which they made the payment, and forthwith gave notice of it to the defendants in time for them to give notice of dishonour to the prior parties, and this was done. Thus the remedies of all the parties were left entire and no one was discharged by laches. In Cocks v. Masterman the rule is stated, “ that the holder of a bill is entitled to know, on the day when it becomes due, whether it is an honoured or dishonoured bill, and that, if he receive the money and is suffered to retain it during the whole of that day, the parties who paid it cannot recover it back.” 10 This rule was followed in London and River Plate Bank v. Bank 1 Per Heath, J., 5 Taunt. 494. 2 Cp. Lamert v. Heath, 15 M. & W. 486 ; Lawcs v. Purser, 6 E. & 13. 930. 3 5 Taunt. 495 n. 4 Failure of consideration must be complete in order to entitle plaintiff to recover the money paid : Hunt v. Silk, 6 East, 449 ; Blackburn v. Smith, 2 Ex. 783. Where the consideration is severable a proportionate part may be recovered : H irst v. Tolson, 19 L. J. Ch. 441 ; Devaux v. Conolly, 8 C. B. 640. 5 (1815), 6 Taunt. 76. See 3 Kent, Comm. 86. 7 1 Wm. Bl. 390, 391. » 9 B. & C. 902. Leeds Bank v. Walker, 11 Q. B. D. 84, 89. 1 1 Per Bayley, J., l.c. 908. fi 2 Str. 946. 8 3 B. 12 Wall. (XI. S.) 181. « Lx. 189. BANKERS. 1309 CHAP. 111.] impeach the transaction, as between the acceptor and the drawer, were known to the payee or subsequent indorsee at the time he became the holder of the instrument.” “ It is not pretended that the defend- ants had any knowledge or intimation that the bills of lading were not genuine, nor is it pretended that they made any representation upon the subject to induce the plaintiffs to contract any such liability. They received the bills of exchange in the usual course of their business as a bank of discount, and paid the full amount of the net proceeds of the same to the drawers, and it is not even suggested that any act of the defendants, except the indorsement of the bills of exchange in the usual course of their business, operated to the prejudice of the plaintiffs, or prevented them from making an earlier discovery of the true character of the transaction.” “ Beyond doubt the bills of lading gave some Ribs °f lading credit to the bills of exchange beyond what was created by the pecuniary standing of the parties to the same, but it is clear that they are not a bills of part of those instruments, nor are they referred to either in the body exchange, of the bills or in the acceptance, and they cannot be regarded in any more favourable light for the plaintiffs than as collateral security accompanying the bills of exchange. Sent forward, as the bills of lading were, with the bills of exchange, it is beyond question that the property in the same passed to the acceptors when they paid the several amounts therein specified.” “ Proof, therefore, that the bills of lading were forgeries could not operate to discharge the liability of the plain- tiffs, as acceptors, to pay the amounts to the payees or their indorsees, as the payees were innocent holders, having paid value for the same in the usual course of business. Different rules apply between the Proof of the immediate parties to a bill of exchange — as between the drawer and a . c , tua ’ con ' the acceptor, or between the payee and the draAver — as the only may given consideration as between those parties is that which moves from the between the plaintiff to the defendant ; and the rule is, if that consideration fails, proof of that fact is a good defence to the action. But the rule is billstif ° otherwise between the remote parties to the bill, as, for example, exchange, between the payee and the acceptor, or between the indorsee and the Ryle other- acceptor, as two distinct considerations ccme in question in everv such WISC between case where the payee or indorsee became the holder of the bill before parties, it was overdue, and without any knowledge of the facts and circum- stances which impeach the title as between the immediate parties to the instrument. Those two considerations are as follows : First, that which the defendant received for his liability ; and secondly, that which the plaintiff gave for his title. And the rule is well settled that the action between the remote parties to the bill will not be defeated unless there be an absence or failure of both these considerations.” 1 It is clear, both on principle and authority, that there can be no Noratifica- ratification of a forged instrument, for an essential element of ratifica- £ 10n of a tion is wanting, viz., that the act ratified is one assumed or pretended instrument to have been done for or under the authority of the party sought to be charged. Williams v. Bayley , 2 implies this. The actual point is decided in Brook v. Hook . 3 1 See also Goetz v. Bank of Kansas City, 119 U. S. (12 Davis) 551. As to how negotiable instruments may be affected by fraud, see note to Bedell v. Herring, 1 1 Am. St. R. 307, 309-326, What is carelessness in signing. As to concealed fraud and the Statute of Limitations, Gibbs v. Guild, 8 Q. B. D. 296; 9 Q. B. D. 59 ; Bctjemann v. Betjemann, [1895] 2 Ch. 474. See United States v. Spalding, 2 Mason (U. S.), 478, a case whore mutilation of an instrument was occasioned by fraud. 2 L. R. 1 H, L. 200, 3 L. R. 6 Ex, 89 ; Martin, B., dissented. Blackburn, J., in McKenzie, v. British Linen Co. Definition. 1310 NEGLIGENCE IN LAW. [book vii. In McKenzie v. British Linen Co., 1 Blackburn, J., speaks of a forgery as possibly an act done by a person as professing to be agent, and in suck case the subject of ratification. Such a profession, if not absolutely impossible to be made, can very rarely be made in the case of forgery, where the profession is not that the signature is an authorised signature, but that it is the very signature of him whose name is used. The law of England is fixed in the sense of the majority of the Court in Brook v. Hook, by the Bills of Exchange Act, 1882. 2 Yet though a forgery may not be ratified, a person who has paid on a forged signature may, as we have seen, be estopped by his conduct from recovering the money he has paid. 3 Cheques . 4 A cheque is defined in the Bills of Exchange Act, 1882, 5 as “ a bill of exchange drawn on a banker, payable on demand.” 6 A cheque has been described as the instrument by which, customarily, a depositor seeks to withdraw his funds or any part thereof from the bank. It is a draft or order on the banker requiring him to pay a sum named either to bearer, or to a' named person, or to the order of the payee. 7 It is clearly not an assignment of money in the hands of a banker ; it is a bill of exchange payable at a banker’s. 8 1 6 App. Cas. 100. 2 45 & 46 Viet. c. 61, s. 24. In America “ the weight of authority is the other way.” See Mr. Holmes’s note, Ratification, 2 Kent, Comm. (12th ed.), CIO. Union Bank v. Middlebrook, 33 Conn. 95. 3 45 & 46 Viet. c. 61, s. 24. ■t 45 & 46 Viet. e. 61, ss. 73-82 ; M’Lcan v. Clydesdale Banking Co., 9 App. Cas. 95 ; National Bank v. Silke, [1891] 1 Q. B. 435. Sec. 38 of the Stamp Act, 1891 (54 & 55 Viet. c. 39), enables the person to whom “ any bill of exchange payable on demand ” is presented for payment unstamped to “ affix thereto an adhesive stamp of one penny, and to cancel the same.” Hobbs v. Cathie, 6 Times L. R. 292, decides that an intermediate holder is not authorised to do this. Sec. 17 of 46 & 47 Viet. c. 55, extends secs. 76-82 of the Bills of Exchange Act, 1882, “ to any document issued by a customer of any banker, and intended to enable any person or body corporate to obtain payment from such banker of the sum mentioned in such document, and shal 1 so extend in like manner as if the said document were a cheque.” Sec. 17 only applies to drafts issued by a customer of a bank, not to drafts issued by a bank to a customer : Capital and Counties Bank v. Gordon, [1903] A. C., per pord Lindley, 250. Curtice v. London City and Midland Bank, 23 Times, L. R. 594, holds that pay- ment of a cheque may be countermanded by telegram. The soundness of A. T. Lawrence, J.’s, opinion that if the bank omit to look at the telegram they escape liability can only be plausible to a lawyer, and probably to but very few of them. Darling, J., held that the countermand was communicated to the bank when the means afforded by the bank to notify it were used ; and that the want of knowledge by the bank was attributable to the management failing to use the means provided. s 45 & 46 Viet. c. 61, s. 73. The relations of banker and customer in respect of cheques are summarised, Chalmers, Bills of Exchange, note to s. 75. 6 An order on bankers to pay money was held not a cheque because the payment was made conditional on signature of a receipt appended, in Bavins v. London and South-Western Bank, [1900] 1 Q. B. 270. See note at 272. f Morse, Banks and Banking (3rd ed.), § 363. See the exhaustive notes by Mr. Holmes on Cheques, 3 Kent, Comm. (12th cd.), 88, and on Notice, 3 Kent, Comm. (12th ed.), 105. 8 Hopkinson v. Forster, L. R. 19 Eq. 74. In re Beaumont, [1902] 1 Ch. 889. In First National Bank v. Whitman, 94 U. S. (4 Otto) 343, it was argued that the payee of a cheque, whoso indorsement had been forged or made without authority, and which cheque had been paid by the bank upon which it was drawn, could maintain a suit against the bank to recover the amount of the cheque. The opinion of the Court was adverse to this contention. “ We think it clear,” said Hunt, .1.. at 344, “ both upon principle and authority, that the payee of a cheque unaccepted cannot maintain an action upon it against the bank on which it is drawn. The careful and well-reasoned opinion of Mr. Justice Davis in delivering the judgment of the Court in Bank of the BANKERS. CHAP. III.] 131 ! “ A banker’s cheque,” says Parke, B ., 1 “ is a peculiar sort of instrument, in many respects resembling a bill of exchange, but in some entirely different. A cheque does not require acceptance ; in the ordinary course it is never accepted ; it is not intended for circulation, it is given for immediate payment ; it is not entitled to days of grace ; and though it is strictly speaking an order upon a debtor by a creditor to pay to a third person the whole or part of a debt, yet in the ordinary understanding of persons it is not so considered. It is more like an appropriation of what is treated as ready money in the hands of the banker, and in giving the order to appropriate to a creditor, the person giving the cheque must be considered as the person primarily liable to pay, who orders his debt to be paid at a particular place, and as being much in the same position as the maker of a promissory note, or the acceptor of a bill of exchange, payable at a particular place, and not elsewhere, who has no right to insist on immediate presentment at that place. There is a very good note on this subject to the case of Serle v. Norton 2 as to the difference between cheques and bills of exchange.” Cheques and bills are distinguishable in the consequences attaching to delay or neglect in presenting them for payment. In the case of a bill of exchange, negligence in presenting or in giving notice absolutely discharges the drawer. In the case of a cheque the drawer is the principal debtor, and the cheque purports to be drawn upon a fund deposited to meet it. In the absence, then, of any loss or injury sustained by any negligence in not making due presentment or not giving notice of dishonour, the drawer of a cheque is not discharged ; and, if he has sustained loss or injury, he is then only discharged to the extent of such loss or injury . 3 A cheque may be marked, that is, certified by the banker that there are funds sufficient and available to meet it . 4 The effect of this is that a collateral representation is made by the bankers that the cheque if presented without delay and in due course will be honoured by them to the amount certified or marked. But primd facie no contract is constituted with the payee to hold the money at his disposal . 5 When a cheque is presented at the banker’s upon whom it is drawn, it is primd facie presented for payment ; 6 but if the holder accepts some- thing from the banker in lieu of payment, he may discharge the drawer ; as where the payee took a cheque to the bank on which it was drawn on the afternoon of the day on which he received it from the drawer, and having got it marked “ good,” did not demand payment but took Republic v. Millard (10 Wall. (U. S.) 152), leaves little to add upon the subject by way of illustration or authority.” “ It is not to be doubted, however, that it is within the power of the bank to render itself liable to the holder and payee of the cheque. This it may do by a formal acceptance written upon the cheque, in which case it stands to the holder in the position of a drawer and acceptor of a bill of exchange.” “ It may accomplish the same result by writing upon it the word ‘ good,’ or any similar words which indicate a statement by it that the drawer has funds in a bank applicable to the payment of the cheque, and that it will so apply them.” i Ramchurn Mvllick v. Radakissen, 9 Moo. P. C. C. 69. 2 2 Moo. & Rob. 404. 3 Robinson v. Hawksford, 9 Q. B. 52 ; In re Bethell, 34 Ch. D. 561. * Gaden v. Newfoundland Savings Bank, [1899] A. C. 281 ; Imperial Bank of Canada v. Bank of Hamilton, [1903] A. C. 49. 5 Warwick v. Rogers, 5 M. & G., per Tindal, C.J., 373 ; Goodwin v. Robarts, L. R. 10 Ex. 337, 351. Ante, 1310 n. 8. There is a representation, though no consideration to make a contract, unless one is constituted by surrendering the cheque and leaving the money in the hands of the banker; then the payee becomes a customer. 6 A cheque should be presented for payment not later than the day following that on which the holder receives it, whether the presentment is made by himself or through his bankers, expressly or by implication. This time, however, may be extended ; Alexander v, Burchfield, 7 M. & G. 1061 ; O'Brien v, Smith, l B]ack (U. S,), 99, By Parke, B. Distinction in the con- sequences of presentation for payment of bills of exchange and cheques respectively. Cheque certiiied. Cheque when presented is presented for payment. Distinction as to time of presentment : (i) as against the original drawer ; (ii) as against the ultimate holder. Demand of payment of cheque by holder against drawer good at any time before action. Banker cash- ing cheque does not necessarily assume the risk of there being funds to meet it. The position of a banker receiving cheques to collect con- sidered. 1312 NEGLIGENCE IN LAW. [book vii. it away with him. On the evening of the same day the banker sus- pended payment, and the following day on presentation the cheque was refused. 1 The ground of this is well put in a New York case : 2 “ The theory of the law is that where a cheque is certified to be good by a bank, the amount thereof is then charged to the account of the drawer in the bank certificate account.” “ The money is due, and payable when the cheque is certified. The bank virtually says : 1 That cheque is good ; we have the money of the drawer here ready to pay it. We will pay it now, if you will receive it.’ The holder says : ‘ No, I will not take the money ; you may certify the cheque and retain the money for me till this cheque is presented.’ ” 3 Where a cheque is circulated, a distinction is drawn between the time of presentment necessary as against the original drawer in the event of the banker’s insolvency, and the time necessary to charge the person from whom the cheque is ultimately received. The circulation should not increase the liability of the drawer ; so that to charge him in the event of the banker’s failure, the cheque should be presented within the period within which the payee or first holder must have pre- sented it. As against the party transferring the cheque to the holder, it must be forwarded for presentation on the day next after the transfer. 4 Though, as between holder and indorser, a cheque must be presented with reasonable diligence, or else the holder will lose his right of resort against the indorser as between the holder and drawer, a demand at any time before action brought will be sufficient ; 5 but if it appear that the default of the holder has caused injury to the drawer, as through the failure of the drawee or otherwise, the drawer is discharged to the extent of such damage ; that is to say, to the extent to which such drawer or person is a creditor of such banker to a larger amount than he would have been had such cheque been paid. 6 A banker cashing a cheque for a customer does not by doing so necessarily assume the risk of there being funds to meet it ; 7 the banker may only look to his own customer ; or, to state the proposition more broadly, if a person obtains in good faith change for a cheque which turns out worthless, the loss must fall on him on the ground of mistake of fact ; he warrants his transferor that there are funds against the cheque. 8 The holder of a cheque may happen to hand it for collection to the banker on whom it is drawn. 1 Boyd v. Nasmith , 17 Ont. R. 40. 2 First National Bank of Jersey City v. Leach, 02 N. Y. 350,351, 353. As to the liability of a banker who certifies a cheque, and the signification and effect of certifying, Espyv. Bank of Cincinnati, 18 Wall. (U. S.) 004. See further, Daniel, Negotiable In- struments (4th ed.), § 1001 ; by certifying a cheque (1) the banker becomes the only debtor ; (2) the holder by taking the certificate discharges the drawer ; (3) the cheque circulates as the representative of so much cash in the banker’s hands. See also Merchants' Bank v. State Bank, 10 Wall. (U. S.) 004, 047; Metropolitan National Bank v. Jones, 31 Am. St. R. 403. 3 As to the practice of marking cheques received after four o’clock, Hobson v. Bennett, 2 Taunt. 388. 4 Byles, Bills of Exchange (10th ed.), 23. 5 Bickford v. Ridge, 2 Camp. 537 ; 3 Kent, Comm. 88. g 45 & 40 Viet. c. 01, s. 74, by the operation of which cheques are inferentially excepted from sec. 45. London and County Banking Co. v. Groomr, 8 Q. 11. I). 288, 203 ; 3 Kent, Comm. 104 n. (c). ~ Woodland v. Fear, 7 E. & B. 519 ; Prince v. Oriental Bank Corporation, 3 App. Cas. 325 ; Capital and Counties Bank v. Cordon, [1003] A. C., per Lord Macnaghten, 245. As between bankers, see Parr's Bank v. Ashby, 14 Times L. R. 503. « 45 & 40 Viet. c. 01, s. 58, sub-s. (3). Timmins v. Oibbins, 18 Q. 11. 722. Where a banker paid a customer’s cheque to bearer in ignorance of the fact that at the time he had no assets of the customer, he was held not entitled to reeoverthe money back ; Chambers v. Miller, 13 C. 11. N. S. 125. BANKERS. 1313 CHAP. III.] The banker thereupon stands in the same position as any other Boyd, v. agent, and is only bound to use due diligence in getting the cheque paid. Emmerson. If, however, he receive it as the drawer’s agent, then the person presenting it, on asking whether it were to be paid or not, would have a right to an immediate answer . 1 If the holder merely asks for the cheque to be put to his account, the inference is that the cheque is paid in to the holder’s agent subject to its being honoured or not in the course of the day . 2 When the bankers of the holder and the drawer are different, the When bankers deposit of a cheque for which credit is given on the depositor’s account is held prima facie to be merely for collection, and the memorandum of are different, credit may be cancelled if the collection is not accomplished in due course . 3 The time allotted for collection is till the close of banking hours on the business day next following that on which the banker comes into possession of the cheque ; and unless the banker acts in other than the usual way (save on having special instructions), and loss occurs, he will not be liable . 4 The duty of the banker to his customer bears no necessary relation to the duty of the customer to others interested in the bill . 5 If the collecting banker and the drawee banker carry on business in the same place, and the collecting banker has recourse to the agency of third parties, he will be liable for the consequences if he has not a distinct permission to employ an agent . 6 The holder of a cheque is not bound to give notice of its dishonour Duty of to the drawer for the purpose of charging the person from whom he tlol(ler of a received it. He does enough if he presents it with due diligence to the banker on whom it is drawn, and gives due notice of dishonour to those only against whom he seeks his remedy . 7 Besides the liability of the banker who collects cheques paid in to Duty of his bank, there is the liability of the banker who pays cheques. banker in If before the cheque reaches the banker it is lost or stolen, the loss cheque is the drawer’s If it is abstracted from a letter, or lost by a clerk entrusted with it and a forged indorsement is put on it by some one into whose hands it has fallen, and the cheque is paid, the loss must fall on the drawer, just as if cash had been sent by a messenger who had been robbed by the way. A cheque delivered to the payee operates as payment and extinguishes the debt, subject only to the condition that if unpaid the debt revives. If it is stolen and on presentment to the banker is paid before the payee gives notice to the banker, the loss falls on the payee. He has taken the cheque in payment and cannot call upon his debtor to pay twice because he is careless or unfortunate . 8 1 Boyd v. Emmerson, 2 A. & E. 184, which is distinguished in Oddie v. National City Bank, 45 N. Y. 735, 740, on the ground that there nothing was done indicating an intention or assent to receive the cheque on deposit. Peterson v. Union National Bank, 52 Pa. St. 206. When a customer pays a cheque in to his bankers with the in- tention that his bankers shall at once credit him with the amount in his account, and the bankers accept the cheque upon those terms and place the amount to his credit, the bankers thereupon become holders of the cheque for value : In re Palmer, Ex parte Richdale, 19 Ch. D. 409 ; Royal Bank of Scotland v. Tottenham, [1894] 2 Q. B. 715, where Gatty v. Fry, 2 Ex. D. 265, is followed, which upholds the validity of a post- dated cheque. But where through payment of a post-dated cheque before its date the funds to meet another cheque of due date are exhausted, the customer is entitled to recover damages for its dishonour : Pollock v. Bank of New Zealand, 20 N. Z. L. R. 174, where McGill v. Bank of North Queensland, [1895] Queensland L. R. 262, is not followed. 2 Kilsby v. Williams, 5 B. & Aid. 815 ; Bolton v. Richard, 6 T. R. 139. 3 Moule v. Brown, 4 Bing. N. C. 266. 4 Boddington v. ScMencker, 4 B. & Ad. 752. 5 Rickjord v. Ridge, 2 Camp. 537. 6 Movie v. Brown, 4 Bing. N. C. 266 ; Morse, Banks and Banking (3rd ed.), § 243. 7 Per Lord Ellenborough, Rickjord v. Ridge, 2 Camp. 539. The rules for the presentation of a cheque within a reasonable time are summarised, Chalmers, Bills of Exchange, note to s. 74. 8 Charles v. Blackwell, 2 C. P. D. 151, 158. 1314 NEGLIGENCE IN LAW. [book VII. Statutory enactments. 1C & 17 Viet, c. 59, s. 19. 45 & 40 Viet, c. 61, s. 73. Crossed cheques. Before 1853 cheques were practically all payable to bearer ; 1 and thus a banker who paid one was not liable if the cheque was regularly drawn, however the bearer might have come by it. By sect. 19 of 16 & 17 Yict. c. 59, the banker obtained further protection, and was exonerated from proving the authenticity of an indorsement on an order cheque where it “purports to be indorsed by the person to whom the same shall be drawn payable.” The section does not extend to protect any other person who takes the cheque upon the faith of such forged indorsement than the banker. 2 And by the Bills of Exchange Act, 1 882, 3 when the banker pays a cheque 4 “ in good faith ” and “ in the ordinary course of business,” the payment is to be deemed made in due course although the indorsement is in fact forged. Payment is deemed to be made “ in good faith ” where it is in fact made honestly, whether negligently or not. 5 Bearer cheques and order cheques, therefore, qua banker and customer are, when the latter are brought within these conditions, on the same footing. Without the protection of the section, the position of a banker paying a cheque to order on a forged indorsement is that of one who, having undertaken to pay to the order of a certain person, pays to what is not that person’s order ; and what he does thus improvidently he must stand the loss of. A cheque may be crossed by the drawer, and after issue may be crossed generally or specially by the holder, who may also add the words “ not negotiable.” 6 By 19 & 20 Yict. c. 25, the crossing of a cheque was to “ have the force of a direction to the bankers upon whom such draft is made that the same is to be paid only to or through some banker, and the same shall be payable only to or through some banker.” This was inter- preted not to restrain the negotiability of the cheque, and that fraudulent alteration was not a forgery. 7 The law was accordingly amended by 21 & 22 Viet. c. 79 ; so that the crossing was to be deemed a material part of the cheque ; the obliteration of the crossing with intent to defraud, a felony ; and the banker was not responsible for paying a cheque which did not “ plainly appear ” to have been crossed or altered, unless the banker acted maid fide or was guilty of negligence in so paying the cheque. Lord Cairns, C., interpreted this enactment in the Exchequer Chamber. 8 It did not restrain the negotiability of the cheque. “ It imposes caution, at least, on the bankers.” “ By its express words it alters the mandate, and the customer, the drawer, is entitled to object to being charged with it, if paid contrary to his altered direction.” The result of this decision was the passing of 39 & 40 Viet. c. 81. Sect. 12 provided (1) that any person taking 1 Charles v. Blackwell, 2 C. P. D. 151, 158. 2 Ogden v. Benas, L. R. 9 C. P. 513 ; Arnold v. Cheque Bank, 1 C. P. D. 578, 585. The history of this section is given by Lord Lindley, Capital and Counties Bant; v. Gordon, [1903] A. C. 251. 3 45 & 46 Viet. c. 61, s. 60. 4 45 & 46 Viet. c. 61, s. 73. If the cheque is drawn to “ a fictitious or non-existing person,” it may be treated as payable to bearer : sec. 7, sub-s. (3). Glutton v. Atten- borough, [1897] A. C. 90, distinguished Vindcn v. Hughes, [1905] 1 K. B. 795, which was followed in Macbeth v. North and South Wales Bank, [1906] 2 K. B. 718. Bank oj England v. Vagliano, [1891] A. C. 107. 5 45 & 46 Viet. c. 61, s. 90. Payment on a forged cheque or order is not of itself any payment at all as between the party paying and the person whose name is forged : per Lord Cranworth, C., Orrv. Union Bank of Scotland, 1 Macq. H. L. So. 522. g 45 & 46 Viet. c. 61, s. 76. Tho origin and history of crossing cheques is expounded by Parke, B., Bellamy v. Marjoribanks, 7 Ex. 402. i Simmons v. Taylor, 2 C. B. ( N. S. ) 528 ; 4 C. B. N. S. 463, s Smith v, Union Bank, 1 Q. B. 1). 31, 35, BANKERS. 1315 CHAP. III.] a cheque marked “ not negotiable ” should not be able to give a better title to the cheque than he received from his transferor ; (2) that a banker who “in good faith and without any negligence received pay- ment for a customer ” of a crossed cheque should not incur “ any lia- bility to the true owner of the cheque by reason only of having received such payment.” 1 This is also repealed, and now by the Bills of Ex- Dutyof change Act, 1882, 2 the duty of a banker on whom a crossed cheque is ^" keron drawn is — if it is crossed generally, not to pay it otherwise than to a 2 crossed 1 banker ; if specially, not to pay it otherwise than to the banker to cheque is whom it is crossed. If the banker pays the cheque otherwise than as drawn - above, he will be liable to the true owner for any loss he may sustain by reason of the cheque having been so paid. If he pays it according to its tenor, in good faith and without negligence, he (and the drawer, if the cheque has come into the hands of the payee) will be entitled to the same rights and placed in the same position as if payment of the cheque had been made to the true owner thereof. 3 Where a cheque is presented for payment which does not at the time Cheque of presentment appear to be crossed ; or appears to have had a crossing tampered which has been obliterated ; or to have been added to or altered Wlth ' otherwise than as authorised by the Bills of Exchange Act, 1882 ; the banker paying the cheque, and without negligence, shall not be re- sponsible nor incur any liability ; nor shall the payment be questioned by reason of the cheque having been crossed, or of the crossing having been obliterated ; or having been added to or altered otherwise than as authorised by the Act ; and of payment having been made otherwise than to a banker, or to the banker to whom the cheque is or was crossed, or to his agent for collection being a banker, as the case may be. 4 A person taking a crossed cheque which bears on it the words “ not Crossed negotiable ” will not have, and will not be capable of giving, a better cheque ( title to the cheque than that which the person from whom he took it ^eto'tiable' 1 ”* had. 5 neg ° ia Apart from statute, as we have noted, the payment of a crossed Crossed cheque by a banker otherwise than through another banker is evidence cheque paid of negligence which will suffice to render the banker responsible to his tha^through Customer. 6 banker. Where a collecting banker in good faith and without negligence receives payment for “ a customer ” 7 of a cheque crossed generally or specially to himself to which the customer has no title or a defective one, the banker does not by receipt of payment incur any liability to the true owner. 8 But if a crossed cheque is stolen, a special indorsement obliterated, a new indorsement made, and it is then handed to a banker for collection, unless the banker can bring himself within the provision just recited, he is liable for a conversion to the original indorsees. 9 1 Malthiessen v. London and County Bank, 5 C. P. D. 7. 2 45 & 46 Viet. c. 61, s. 79, sub-s. (2). See Stringfield v. Lanezzari, 16 L. T. (N. S.) 361, as to reasonable time of payment in to a banker of a crossed cheque. 3 Sec. 80. 4 Sec. 79, sub-s. (2). s Sec. 81. This is a re-enactment of 39 & 40 Viet. c. 81, s. 12. e Bellamy v. Majoribanks, 7 Ex. 389 ; Carlon v. Ireland, 5 E. & B. 765 ; Bobbett v. Pinkett, 1 Ex. D. 368. 7 C. IF. By. Co. v. London and County Banking Co., [1901] A. C. 414 ; La Cave v. Crldic Lyonnais, [1897] 1 Q. B. 148 ; Mathews v. Brown, 63 L. J. (Q. B.) 494. 8 45 & 46 Viet. c. 61, s. 82. 9 Kleinwort v. Comptoir National d’Escompte de Paris, [1894] 2 Q. B. 157. What is negligence in this regard is considered at length in Hannan's Lake View Central v. Armstrong, 16 Times L. R. 236. Cheque marked “ account of payee.” Banker’s lien. Principle stated by James, L.J. And by Wright, J„ in Teale v. Williams, Brown & Co. Bf 1316 NEGLIGENCE IN LAW. [book vit. We have already seen that “ good faith ” has been interpreted by the Act itself ; 1 and the phrase “ without negligence ” has been the subject of decision, and held to be equivalent to “ without want of reasonable care in reference to the interests of the true owner.” 2 A practice has also grown up of marking a crossed cheque “ account of payee.” This is not a marking authorised by the Bills of Exchange Act ; but the effect of it has been considered by Channell, J., 3 who held that the practice had grown up “ in order further to protect the drawer of a cheque against the consequences of its being lost or stolen. It was a direction to the receiving banker that the drawer desired to pay the particular cheque into the bank which kept the account of the payee. To disregard a direction of that kind, if the banker had information which might lead him to think that the account into which he was paying the amount was not the payee’s account would, in his opinion, be negligence.” The custom of bankers was to credit their customers with the value of cheques handed to them for collection before they received the proceeds. The House of Lords decided 4 that the protection of sec. 82 was only effectual while the banker was acting as agent, and that the giving credit in the books of the bank and allowing the customer to draw against the amounts so credited before collecting the cheques, indicated that the banker received payment on his own account. This decision occasioned the passing of the Bills of Exchange (Crossed Cheques) Act, 1906, 5 which enacts that “ a banker receives payment of a crossed cheque for a customer within the meaning of sec. 82 of the Bills of Exchange Act, 1882, notwithstanding that he credits his customer’s account with the amount of the cheque before receiving payment thereof.” A banker has a general lien upon all the securities in his hands belonging to any particular person for his general balance, unless special circumstances exist which oust the ordinary rule. “ No person,” says Lord Kenyon, C.J., 6 “ can take any paper securities out of the hands of his banker without paying him his general balance, unless such securities were delivered under a particular agreement which enables him so to do ” ; or, as the same principle was stated by James, L.J., 7 “ between banker and customer whatever number of accounts are kept in the books, the whole is really but one account, and it is not open to the customer, in the absence of some special contract, to say that the securities he deposits are only applicable to one account.” In Teale v. Williams, Brown & Co., 8 Wright, J., stated the rule to be that : “ A banker with whom a customer opened several accounts had a lien upon all the accounts except (1) where there was a special agreement ; (2) where specific property of a third person had been paid to the bank ; (3) where the bankers had notice that when a customer drew upon a particular account it would be a fraud or breach of trust.” 1 Ante, 1314. 2 Per Kennedy, J., Hannan's Lake View Central v. Armstrong, 1(‘> Times L. R. 237, citing Denman, J., Bissell v. Fox, 51 L. T. 666, approved by C. A. 53 L. T. 193. 3 Bevan v. National Bank, 23 Times L. R. 65, 68. 4 Capital and Counties Bank v. Gordon, [1903] A. C. 240 ; Akrokerri Atlantic M incs v. Economic Bank, [1904] 2 K. 15. 465, distinguishes Gordon's case; Bevan v. National Bank, 23 Times L. R. 65. 6 6 Edw. N il. o. 17. « Davis v. Bowshcr, 5 T. R. 492. Banker’s lien is treated in the note to Masonic Savings Bank v. Bangs's Administrator, 4 Am. St. R. 202. where the cases are' collected. i In re European Bank, Agra Bank Claim, L. R. S Cb 44. Robertson’s Trustee v. Royal Bank of Scotland {IHD0), isRettie, 12. 11 Times L. R. 56. CttAt*. tit.] bankers. 1317 Young v. Grote. We liave reserved for the last the consideration of the famous case Young v. of Young v. Grote. 1 A customer of a banker delivered certain printed Grole - cheques to his wife signed by himself, but with blanks which he in- structed his wife to fill up according as his business demanded. She directed a clerk to fill up one with the words fifty founds tivo shillings ; this he did, and having done so showed it filled up to the wife ; the fifty commenced with a small letter and was placed in the middle of a line. The figures 50 : 2 were also placed at a considerable distance from the printed £. She then told the clerk to get it cashed ; he inserted at the beginning of the line in which the word fifty was written the words Three hundred and, and the figure 3 between the £ and the 50. This was paid by the bankers. The Court of Common Pleas held that the customer must bear the loss. A controversy has ever since raged about this decision, which shows no sign of being soon ended. The result of the judges’ decision in the particular case has till recently been very generally approved or perhaps acquiesced in ; their reasons have been very keenly canvassed. In the first instance the decision was assumed to apply to all negotiable instruments ; gradually it has been narrowed down to hold good only between banker and customer ; and latterly an endeavour has been made to get rid of it altogether by the bold fiction that the relation between a customer and his banker and the acceptor and the subsequent holder of a bill “ is substantially the same.” 2 The grounds on which this decision can be sustained have been very The case variously stated ; although the actual reason for it is most unequivo- considered, cally stated by Best, C.J. : 3 “ We decide here on the ground that the banker has been misled by want of proper caution on the part of his customer.” Yet this has been either overlooked or disregarded, and conjecture and suggestion have run wild in assigning and de- molishing explanations vainly tendered as satisfactory. The decision has been claimed to rest on estoppel — possibly giving to the word a more elastic meaning than strictly belongs to it ; since Lord Cranworth, C., in Orr v. Union Bank of Scotland* while saying that the ground of the decision was estoppel, yet regards the result as satis- factory, because “ the customer’s neglect of due caution has caused his bankers to make a payment on a forged order,” that is, the customer was guilty of negligence which disentitled him to recover. This is also the view of Cockburn, C.J. : 5 the case, “ which is supposed to have estab- Cockburn, lished this doctrine of estoppel by reason of negligence, when it comes p- J -’ s > view to be more closely examined, turns out to have been decided without ^onhliJuish reference to estoppel at all. Neither the counsel in arguing that case, Australasian nor the judges in deciding it, refer once to the doctrine of estoppel.” Go - The conclusion was, the learned judge considered, arrived at to avoid circuity of action ; since, looked at technically, “ the customer would be entitled to recover from the banker the amount paid on such a 1 (1827) 4 Bing. 253. Cp. Marcussen v. Birkbeck Bank, 5 Times L. R. 463 ; Garrard v. Iladdan, 67 Pa. St. 82 ; Zimmerman v. Rote, 75 Pa. St. 188 ; Brown v. Reed, 79 Pa. St. 370; Johnson Harvester Co. v. McLean, 46 Am. R. 39; Daniel, Negotiable Instru- ments (4th ed.), § 1405 ; Morse, Banks and Banking (3rd ed.), § 480. 2 Colonial Bank of Australasia v. Marshall, [1906] A. C. 567 ; 4 C. L. R. (Australia) 196. 3 4 Bing. 259. 4 1 Macq. (H. L. Sc.) 523. Lord Cranworth explains his meaning in British Linen Co. v. Caledonian Insurance Co., 4 Macq. (H. L. Sc.) 114. 5 Swan y. North British Australasian Co., 2 H. & C. 189. Lord Cranworth’s view in Bank u/ Ireland v. Trustees of Evans’s Charities. Ground of decision in Young v. Grote. 1318 NEGLIGENCE TN LAW. [book m cheque, the hanker having no voucher to justify the payment ; the banker, on the other hand, would be entitled to recover against the customer for the loss sustained through the negligence of the latter.” 1 This view has also been adopted by the Court of Exchequer in Halifax Unionv. Wheelwright , 2 and by the Supreme Court of Massachusetts in Greenfield Savings Bank v. Stowell. 3 Again, in Bank of Ireland v. Trustees of Evans’s Charities , 4 although Lord Cranworth mentions estoppel as the basis of the decision, he yet hints a doubt whether the facts in law amounted to estoppel, and treats negligence as the foundation of the liability. Whether the correct formula is that on proof of negligence in the transaction the customer is estopped from saying that the cheque was not for £350 ; or, whether, as seems simpler, and more accurate, on proof that through the customer’s negligence in the performance of his duty his banker has lost £300 which he thereby becomes entitled to recover from his customer, would ordinarily be immaterial ; since the substantial out- come is the same — the banker’s claim is based on the negligence of the customer ; yet the difference in these modes of expression was made use of later, when it was sought to discredit Young v. Grote, and to explain the decision on the ground that the plaintiff had there signed a blank cheque (which, by the way, Lord Esher, M.R., 5 somewhat sur- prisingly denies to be “ a case of estoppel at all ”). The train of reason- ing during this phase ran thus. Young v. Grote was decided on estoppel : the plaintiff signed a blank cheque, and so authorised the filling up of the cheque by the holder. He is, therefore, estopped from denying any particular filling up to be by his authority. No negligence is needed to make him liable for the amount filled in ; therefore, no duty; so that Young v. Grote is no authority for a duty existing as between customer and banker. But while there has been this dispute as to what were the grounds of the Court’s decision, the evidence of the case itself, which is absolutely clear, and which shows that it was not estoppel, has been passed over. “ We decide here,” says Best, C.J., 6 “ on the ground that the banker has been misled by want of proper caution on the part of his customer.” The ground of the decision is negligence of the plaintiff, 7 8 and to make negligence there must be duty unperformed. Of all the explanations attempted of the case there is none more plainly wrong than that which commended itself to the High Court of Australia, s based on the assertion : “ It is impossible to regard the judgment as anything more than a decision upon the facts of the i L.c. 190. 2 (1873), L. R. 10 Ex. 183. 3 123 Mass. 196, 25 Am. R. 67 ; Fordyce v. K osminski, 4 Am. St. R. 18 ; Burrows v. Klunk, 14 Am. St. R. 371. 4 5 H. L. C. 389, 413. See, too, per Erie, C.J., Ex parte Swan, 7 C. B. N. S. 431. As to the summary power to rectify the register, which was the main point considered in Ex parte Swan, see Ex parte Shaw, 2 Q. B. D. 463. As to registration, see per Lord Blackburn, SocidU Ginirale de Paris v. Wrdker, 11 App. Cas. 34. 5 Scholfield v. Earl of Londesborougli, [1896] 1 Q. B. 543 ; 45 & 46 Viet. c. 61, s. 20. e 4 Bing. 259. 7 This appears beyond cavil in the report in 12 Moore, C. P. 484, where Best, C.J. (490), says, “ gross negligence may fairly be imputed to Young or his agent, and that the bankers, who have been misled by his want of caution, and thus induced to pay the money, are not liable to bo called on to make good the loss.” Park, J. (491), thinks “ ho was guilty of gross negligence ” ; Burrough, J., says “ the drawer of the cheque being the sole cause of the fraud must bear the loss”; and Gaselee, J., says “ the drawer was guilty of gross negligence.” 8 1 Commonwealth L. R. 632, per Griffith, C.J., 651. BANKERS. 1319 CHAP. III.] particular case,” implying that thatbeing'so, norule of law was involved. This might have been a possible solution had the decision been for the plaintiff, on the ground that he was under no duty to his banker : but is impossible in the circumstances since the judgment on the facts implies a rule of law to which the facts are subordinated. The decision is that the plaintiff has violated a rule of law binding on him . 1 - A review of the cases in which Young v. Grote has been considered, will prepare the way for an estimate of its present position. The chief of these is Bank of Ireland v. Trustees of Evans's Charities, where Parke, B., 2 delivering the opinion of the judges, says that in Young Parke, B.’s, v. Grote “ it was held to have been the fault of the drawer of the view tlie cheque that he misled the banker on whom it was drawn by want of trustees of proper caution in the mode of drawing the cheque, which admitted of Evans's easy interpolation, and consequently, that the drawer, having thus Charities. caused the banker to pay the forged cheque by his own neglect in the mode of drawing the cheque itself, could not complain of that pay- ment ” ; 3 that is, there was negligence. Previously to this, Parke, B., delivering his oral judgment in the InRobartsv Exchequer Chamber in Robarts v. Tucker , 4 is accredited with the Tuckcr - statement 5 that in Young v. Grote “the customer had by signing a Variations in blank cheque given authority to any person in whose hands it was to of fill up the cheque in whatever way the blank permitted.” 6 Yet that judgment. ’ he ever used the words is doubtful, and if he did they are nullified by his more deliberate statement. In Barker v. Sterne , 7 Pollock, C.B., thus comments : “ There is a Barker v. case where a customer of a banker on leaving home, gave to his wife Sterne - several blank forms of cheques signed by himself, and desired her to Comment on fill them up according to the exigency of his business. She filled up g ro t e by" one of them so carelessly that a clerk to whom she delivered it was Pollock, C.B. enabled to alter the amount to a larger sum, in such a way that the 1 The C.J. lias entangled himself in a snare usually avoided by all but the most unwary. He fails to appreciate the different signification of an affirmative proposition and a negative : to discriminate what is involved in A is B from No A is B. The former concludes that notwithstanding any peculiarity of the facts of A, B also must exist, and A is a case in which it exists. The latter merely says that no A is within B, and passes no kind of judgment whether B does or does not exist ; A is not a case under it. Young v. Grote involves affirmative propositions ; there is a legal duty ; this is a case under the rule ; Griffith, C.J., confounds them with negative ones. 2 5 H. L. C. 410. 3 It will be observed that this expression is with reference to the question of whether the negligence was proximate or remote, the point then under discussion, and not with regard to the general merits of the case ; and that the point subsequently taken, that the negligence to be effectual had to work through the operation of a crime and so was not a legal consequence, was not referred to. 4 16 Q. B. 560. s L.c. 580. Cited by Williams, J., Ex parte Swan, 7 C. B. N. S. 445 ; by Lord Coleridge, C.J., Arnold v. Cheque Bank, 1 C. P. D. 587 ; and by Lord Esher, M.R., Scholfield v. Earl of Londesborough, [1895] 1 Q. B. 543. Even if Parke, B., used the words attributed to him, which is doubtful, with the meaning attributed to him, which is also doubtful, his subsequent words embodying the opinion of himself and the other common law judges must operate as a retractation. Cp. Schultz v. Aslley, 2 Bing. N. C. 544, a case which Crompton, J., in Stoessiger v. S. E. By. Co., 3 E. & B. 556, regards as going “ to the utmost extent of the law.” 6 In the report in 15 Jur. 988 the words attributed to him are : “ In that case [Young v. Gi'ote~\ there was negligence in the drawing of the cheque itself, which was the authority given by the drawers to the bank ” ; while in the report in 20 L. J. Q. B. 273 the words are : “ There [in Young v. Grote] the Court held that the cheque was drawn in so negligent a way as to facilitate the forgery and to exonerate the banker from liability to his customer for paying the amount. They, in truth, consider that he, as it were, gave authority to the party to fill up the cheque in the way it was filled up.” 7 9 Ex. 684, 686. VOL. II. 2 P Patent Safely Gun Cotton Co. v. Wilson. Opinion of Br am well, L.J. Opinion of Brett, L. J. 1320 NEGLIGENCE IN LAW. I [book vii. bankers could not discover the alteration and they paid it ; it was held that the loss must fall on the drawer as it was caused by his negligence. Now, whether the better ground for supporting that decision is that the drawer is responsible for his negligence, which has enabled a fraud to be practised, or whether it be considered that, when a person issues a document of that kind, the rest of the world must judge of the authority to fill it up by the paper itself, and not by any private instructions, it is unnecessary to inquire. I should prefer putting it on the latter ground.” 1 In Patent Safety Gun Cotton Co. v. Wilson 2 the statement of claim alleged that a cheque payable to the order of the plaintiffs was stolen from them, and the indorsement of their name forged upon it, and that it came into the possession of the defendant, who converted it to his own use. The defendants pleaded that the plaintiffs knowingly employed as clerk a man who had been convicted of embezzlement and was a notorious thief ; that the clerk was allowed access to the rooms where the plaintiff’s letters and cheques were kept, and was empowered and permitted to receive and open the said letters and cheques, and to witness the mode in which the plaintiffs indorsed their cheques ; that the clerk was frequently paid his wages by the duly indorsed cheques of the plaintiffs, and was sometimes employed by the plaintiffs to indorse cheques payable to their order ; that the cheque in question was taken or stolen by the clerk, who thereupon forged the indorsement, and then procured one E., who had no notice of the forgery and theft, to cash the cheque ; that the defendant received the same, with other cheques from E., without notice of the forgery and theft, and in the ordinary course of business gave full value therefor ; that by their carelessness and wilful neglect in dealing with their letters and cheques the plaintiffs did not discover the forgery and theft for a considerable time ; and after such discovery did not take any steps to prevent the negotiation of the cheque, and by such carelessness and neglect caused the defendant to become a bond fide holder for value of the cheque without notice of the forgery and theft. The plaintiff demurred. Grove, J., overruled the demurrer, which was allowed on appeal. Bramwell, L.J., had a difficulty in dealing with the proposition that those facts afford any answer to the claim, because I am at a loss to find any reason in^support of the proposition. The only answer to it is, it is not the law. Ea|p gallay, L.J., was of the same opinion. Brett, L.J., thought that in point of law no negligence can justify a thief or forger , it may be taken into consideration in punishing him, but it is impossible to say that any negligence can be a justification or excuse. If so, there can be no reason why the plaintiffs should not take advantage of the fact that the cheque was stolen and forged, and recover. I here is another ground upon which the plea is bad ; there can be no negligence without neglect of some duty ; there was no duty here — no relation between the plaintiffs and defendant which could cause any duty to exist front the plaintiffs to the defendant.” If A has a duty to B to prevent a bill or exchange (or it may be mutatis mutandis a tiger, getting abroad and doing a damage to' him), and by A’s negligence B is injured, in what course the damage flows, whether by forgery or any other mode, may possibly be relevant as to the quantum of damage, but the cause; of action is the breach of duty, not the subsequent developments of it. 1 See per Blackburn, J., Gunim v. Tyrie , 4 13. & b. 713. 2 49 L J. Q. B. 713. chap, hi.] BANKERS. 1321 In Baxendale v. Bennett, 1 defendant drew a bill, without a drawer’s name, addressed to himself, and wrote an acceptance across it. In this condition it was stolen, filled up with a drawer’s name, and transferred to the plaintiff, a bond fide holder for value. Though it was possible that the bill might have been made a complete instrument without a crime, 2 in fact a crime was committed by stealing the document ; and without that the bill could not have been com- pleted. At the trial the learned judge ruled, on the authority of Young v. Grate and Ingham v. Primrose : 3 , that the defendants were liable. His judgment was reversed in the Court of Appeal, and entered for the defendant. In the Court of Appeal, Brett, L.J., relied mainly on the fact that the acceptance was not issued by the defendant, and that the defendant never authorised the bill to be filled in with a drawer’s name, so that he could not be sued thereon ; and declined to inquire whether the defendant was negligent, because the defendant did not owe a duty to any one, and, by putting the bill into a drawer in his own room, he did not act otherwise than an ordinary careful man would act ; and this seems the sufficient unassailable ground for the decision. Bramwell, L.J., assumed that the defendant had been negligent, but considered his negligence not the proximate or effective cause of the fraud ; he lays considerable stress on a distinction between the cases cited and that before the Court ; in them the instruments had been parted with voluntarily, but in the case before the Court the bill had been obtained by the commission of a crime. This is the view of Bovill, C.J., in Socicte Generale v. Metropolitan Bank* a case where “ eight days ” was altered to “ eighty days ” in a bill of exchange. Bovill, C.J., says : “ Here the printed form was filled up with ‘ eight days, 5 and it is said there was negligence in allowing sufficient space for the addition of the letter ‘ y,’ but I cannot, sitting as a jury, say there was negligence enabling the forgery to be com- mitted. It would be ridiculous to expect all persons to exclude such a possibility as that. This was the usual course of filling up blanks in a form, and a man is not to assume that a forgery will be committed.” 5 1 3 Q. 15. D. 525. Cp. In re. Cooper, Cooper v. Vcscy, 20 Cli. D. Oil. “ It cannot make any difference whether ” a “ stranger bear the same name with the real payee or not ; for no person can give a title to a bill but he to whom it is made payable ” : Mead v. Young, 4 T. R. 28, per Buller, J., 31. In District oj Columbia v. Cornell, 130 U. S. (23 Davis) 655, negotiable certificates, which had been cancelled, had the marks of cancellation fraudulently effaced by a clerk and were reissued by him. Held that a purchaser in good faith and for value before maturity could not recover, Cooke v. United States, 91 U. S. (1 Otto) 389, being much pressed upon the Court, who were “ not prepared to extend the scope of that decision.” 2 See per Bramwell, L.J., 3 Q. B. D. 530. 3 7 C. B. N. S. 82. * 21 W. It. 335. See Marcussen v. Birkbeclc Bank, 5 Times L. It. 403. 5 Of course this is otherwise where a cheque has been indorsed in blank, and sub- sequently filled up without fraud. See per Buller, J., in Lickbarrow v. Mason, 1 Sm. L. Cas. (lltli ed.), 722, citing Russel v. Langstaffc, 2 Doug. 4thEdn. 514 ; A ivda x. Dixon, per Parke, B., 0 Ex. 869. In Schultz v. Astley, 2 Bing. N. C. 553, Tindal, C.J., says : “ The acceptor was a stranger to the party to whom he handed over liis blank acceptance, and as all that he desired was to raise the money, it could make no difference to him, either as to the extent of his liability, or in any other respect, whether the bill was drawn in the name of one person or another. And if the defendant is estopped from denying the right of the drawer to draw the bill, whoever he may be, he is bound by the indorsement made by such drawer, after such indorsement is proved to have been made by such drawer.” 45 & 46 Viet. c. 61, s. 29. London and South-Western Bank v. Wentworth, 5 Ex. D. 96. Bigelow, Estoppel (5th ed.), 654. Bowen, L.J., in Garrard v. Lewis, 10 Q. B. D. 30, holds that he who gives an acceptance in blank (which he held was in effect done in that case) holds out the person he entrusts therewith as having authority to fill in the bill as he pleases within the limits of the stamp. See France v. Clark, 26 Ch. D. 257 ; Fox v. Martin, W. N. (1895)36. Baxendale v. Bennett. Ground of Brett, L.J.’s, decision. Ground of Bramwell, L.J.’s, decision. Bovill, C.J., in Socitli Generale v. Metropolitan Bank. 1322 NEGLIGENCE IN LAW. [book VII. Brett, L. J.’s, views as to Young v. Grote. Bank of Englarid v. Vagliano. Young v. Grote accepted by Lord Sclborne. Lord Field and Lord Coleridge. Greenfield Savings Bank v. Slowell. This is one of the cases which have been most effectual in defining the limits of Young v. Grote to the relation of customer and banker. Brett, L.J ., 1 in Baxendale v. Bennett, also confines the principle in Young v. Grote to the relation of banker and customer. The bare proposition that the intervention of a crime between the act or default alleged and the loss, absolves from the consequences of it is sufficiently- refuted by Bank of England v. Vagliano . 2 The criterion is whether there is a duty and a falling short in its performance or not. In Bank of England v. Vagliano 3 the question was as to the relation of banker and customer, when “ false documents were by what I have called the act of the customer permitted to reach the bank for payment.” Lord Halsbury, C., 4 thought it “ impossible to dispute that this was, in fact, a misleading of the bankers,” and he discriminates the case from others on the ground of the existence of a duty. The distinction between this case and Young v. Grote is that in this a letter of advice apparently validating the payments accompanied the bills, thus there was what was equivalent to a representation that the paper tendered was good, and this representation was acted on by the bank to their detriment. If there is a duty from the customer to the banker, the added fact of a written representation, not fraudulent, does not increase the right ; it is only evidence of it. In Vagliano’’ s case 5 Lord Selborne recognises Young v. Grote as rightly decided, though he does not agree with the theory that it was decided on estoppel. He says : “I am not convinced that estoppel is a sufficient explanation of the cases in which the drawer of a cheque has been held bound by fraudulent alterations for which the state of the paper afforded space ” ; and “ It is not (as I understand) disputed that there might, as between banker and customer, be circumstances which would be an answer to the prima facie case that the authority was only to pay to the order of the person named as payee upon the bill, and that the banker can only charge the customer with payments made pursuant to that authority. Negligence on the customer’s part might be one of those circumstances.” 6 Lord Field 7 also approves the case and adopts the expressions of Lord Coleridge, C.J., delivering the judgment of the Court of Common Pleas in Arnold v. Cheque Bank : 8 “ that case no doubt must be considered as well decided ” and “ is entirely consistent with the rule laid down and explained on fuller consideration in subsequent cases, viz., negligence in order to estop must be negligence in the transaction itself.” 9 Greenfield Savings Bank v. Stoivell 10 is the most important of t he American cases in which Young v. Grote is criticised. The question discussed was whether the maker of a promissory note was under a liability to subsequent indorsees in respect of an alteration made in t he note after it had left the hands of the maker. Young v. Grote was cited as an authority in favour of the existence of the duty, but after 1 3 Q. B. D. 533. Day, J., in Merchants of the Staple of England v. Bank of England, 21 Q. B. D. 1G3, vouched the authority of Young v. Grote, which ho “ ventured respect- fully to think was most properly decided on the ground of negligence.” 2 [189 1 J A. C. 107. Gihlin v. McMullen, L. R. 2 1’. C. 317, In re United, Service, Johnston's Claim, L. R. 6 Ch., per James, L.J., 217. 3 [1891] A. C. 107. 4 L.c. 115. 6 [1891J A. C. 12(i. 1 <> L.c. 1 23. Cp. Ireland v. Livingston, L. R. 5 II. L. 395. 7 [1891] A. C. 170. s 1 C. R D. 568. » Magnus v. Queensland National Bank, 37 Ch. D. 400, is “ an example of negligence in the transaction itself.” to 123 Mass. 196, 25 Am. R. 67. BANKERS. 1323 CHAP. III.] an elaborate examination was distinguished as applying only where the relation of banker and customer exists. “ The maker of a promissory note holds no such relation to the indorsees thereof as a customer does to his banker. The relation between banker and customer is created by their own contract, by which the banker is bound to honour the customer’s drafts ; and if the negligence of the customer affords opportunity to a clerk or other person in his employ to add to the terms of a draft and thereby mislead the banker, the customer may well beheld liable to the banker. But even as betwe3n customer and banker the former has not been held liable for an unauthorised addition or alteration by a stranger. And that the signer of a note, complete upon its face, and not entrusted by him to any person for the purpose of being filled up or added to, but afterwards altered, without his authority or assent by the insertion of additional words in blank spaces therein, should be held to have contracted with every subsequent innocent holder who maybe thereby defrauded, and to be liable to himin an action on the note in its altered form is unsupported by any English decision of which we are aware, and appears to us to be inconsistent with the weight of American authority and unfounded in principle.” 1 The Canadian Courts have considered 2 Young v. Grote, and uphold Canadian it on the ground that the bankers were misled by the negligence of the drawer, and in accordance with the judges’ view in Bank of Ireland v. uphold the Trustees of Evans's Charities. This ground, too, we have seen, has been case, taken by English supporters of the case. It is pointed out that in Young v. Grote the negligence was in “ the transaction itself,” and therefore proximate ; and, if proximate, it is assumed to be actionable. 3 Young v. Grote was considered in the New Zealand case, Brown v. Brown v. Bennett* and. is explained by Prendergast, C.J., to be “ a case between B, ' nnelt - 1 Per Gray, C.J., 123 Mass. 201, 202. The law in Scotland seems to have been de- cided otherwise. The Scottish decisions are ( 1 ) Grahame v. Gillespie ( 1795), Mor. Diet, of Dec. 1453, where blanks having been left in a bill at the time of accepting by means of which the drawer afterwards increased the amount of the bill without giving the bill a suspicious appearance, the acceptor was held liable to an onerous indorsee for the increased value; (2) Pagan v. Wylie (1793), Mor. Diet, of Dec. 1660, where a bill having been fraudulently altered in consequence of a blank being left in it, all the persons whose names were upon it were held to be liable for the amount upon it. As to the authority of these decisions, see per Denniston, J., Brown v. Bennett, 9 N. Z. L. R. 513 (C. A.). See also, Thomson, Bills of Exchange (Wilson’s ed.) 10. Young v. Grote is approved in its widest interpretation in Wallace’s Trustees v. Port Glasgow Harbour Trustees, 7 Rettie, 648, where the Court says, per Lord Mure : “ Whore a document is forged and uttered, or otherwise made use of as a genuine document, and so as to enable a party to obtain payment of money owing to the negligence of the person whose signature is forged, the ordinary rule that a payment made upon a forged signature cannot be held to be a good payment does not, I conceive, apply, and cannot be pleaded to the prejudice of the party who has been induced to pay by means of that forged document. The law to this effect is, I think, pretty clearly laid down in the case of Young v. Grote.” The note on Negotiable Instruments to Bedell v. Herring, 11 Am. St. R. 309-326, is an exhaustive collection of cases on this subject. 2 Agricultural Investment Co. v. Federal Bank, 45 Upp. Can. Q. B. 214, on appeal sub nom. Agricultural Savings and Loan Association v. Federal Bank, 6 Upp. Can. App. (Tupper) 192. 2 A case in Victoria, Bank of Australasia v. Erwin, 1 W. W. & A’B. 70, as reported in Kerferd and Box’s Victorian Digest, col. 87, is substantially the same case as Young v. Grote, with the difference that the document was a bill, and that the negligence was apparently due. to the acceptor having weak sight, and not taking precautions to obviate its effects, whereby he was held to have made the drawer, who fraudulently altered the bill after acceptance, his agent to do so ; such a ground is obviously un- tenable. See per Denniston, J., Brown v. Bennett, 9 N. Z. L. R. 514 (C. A.) ; also Lea v. Graham, 1 W. & O. (N. S. W.) S. C. 288. The weight of the American cases is on the same side. Knoxville National Bank v. Clarke, 33 Am. R. 129. t* 9 N. Z. L. R. (C. A.) 487. 1324 NEGLIGENCE IN LAW. Opinion of Prendergast, C.J. Opinion of Williams, J. Scholfield v. Earl of Londes- borough. Imperial Bank of Canada v. Bank of Hamilton. [BOOK VIT. banker and customer, and was decided upon the ground of that relation- ship.’' 1 The Chief Justice doubts whether there is “ a single reported case where Young v. Grote has been followed, where the question arose . . . between people not holding those relative positions.” “ Except in the case of banker and customer, the maker of a negotiable instru- ment does not owe any duty to be careful in the mode of making the complete instrument, and the maker is not, as to all who may become holders, under any obligation to anticipate, and therefore to preclude the fraudulent interpolation of words or figures.” “ Even Young v. Grote,” adds Williams, J ., 2 “ has been doubted, and to decide that the maker of a promissory note was under such an obligation would be going a great way beyond Young v. Grote.” “ If a person is careless of his property, and it is stolen in consequence, and the thief sells it to an innocent purchaser, the true owner can recover it from the innocent purchaser, notwithstanding his negligence. . . . The transferee of a note runs the risk of forgery, just as the transferee of a chattel runs the risk of larceny. The transferee of the stolen chattel cannot set up the mere negligence of the true owner as an answer to an action by him to the chattel, because there is no legal duty to the public on the part of the owner to keep his own property safe from theft. So in the case of an altered promissory note, if the maker is to be charged on the ground of his negligence, the duty to take precautions against forgery must first be established.” 3 This brings us to Scholfield v. Earl of Londesborough , 4 where Young v. Grote was keenly canvassed. The document in that case was a bill of exchange which was accepted as a complete bill, but which as com- pleted had spaces left, and these admitted of interpolations largely increasing the value of the bill. The case was argued on the basis of its identity with Young v. Grote. The decision was that the acceptor of a bill of exchange owes no duty to a subsequent holder for value to take any precautions to see that the bill is filled up in the usual way. As the case is claimed to overrule Young v. Grote, which has been recognised by the House of Lords as a good decision, it is necessary to note the opinions of the Lords in detail. But before doing so the decisions subsequent to it, in which the claim has been made, will be noticed. The first of these is Imperial Bank of Canada v. Bank of Hamilton , 5 A cheque was certified by the Bank of Hamilton, and as certified afforded opportunity for fraudulent alteration ; it was altered, paid by the Bank of Hamilton as altered, and the money was subsequently recovered by them as paid under a mistake. The question was whether the Bank of Hamilton, having chosen to mark a cheque, were liable for the amount obtained from the appellants by the fraudulent alteration. The customer of the Bank of Hamilton procured the certification, and he took it away with him, made the alteration and afterwards negotiated it. Therefore, on any interpretation of Scholfield v. Earl of Londes- borough there was no duty to the world at large ; and f lic, relation of banker aird customer was not involved. But Lord Lindley, who i L.c. 501. 2 L.c. 500. 3 Jj.c. 507. * [1890] A. 0. 514. 5 [1903] A. C. 49,54. Tn Union Credit Bank v. Mersey Backs and Harbour Board. [1899] 2 Q. B. 205, at 211, Bigham, J., with ford Halsbury’s opinion in Scho'/ir/d v. Earl of Londesborough, before him, did not consider Young v. Grote. (o bo overruled thereby ; but the proposition lie vouches it for is certainly not a proposition involved in Young v. Grote. Bigham, J., assumes that the cheque was tilled up before issue. A glance at the facts will show that the cheque was filled up, then entrusted to the e.lork to change, and subsequently altered without authority : 4 Bing. 255. CHAP III. BANKERS. 1325 delivered the judgment of the Privy Council, says : “ If the principle laid down in Young v. Grote could still be acted upon, the Bank of Hamilton would, as between themselves and an innocent holder for value, be estopped.” This, assuming that the principle of Young v. Grote is confined to the relation of banker and customer, 1 is plainly a mistake. He continues : “ After the decision of the House of Lords in Scholfield v. Earl of Londesborough, it was hopeless to contend that by the law of England the Bank of Hamilton was not; at liberty to prove that the cheque had been fraudulently altered after it had been certified by the bank.” Most clearly so, because the relation is not that of banker and customer. Then came Colonial Bank of Australasia v. Marshall , 2 where the Colonial question whether there is a duty of care from the customer to the Bank °f . banker was directly raised. The High Court of Australia, 3 reversing v * '%Zr shall. the Supreme Court of Victoria, held there is no such duty. Griffith, C. J., bases the judgment of the Court on three grounds : (1) “ I n Scholfield v. Earl of Londesborough, Lord Halsbury, C., invited the House of Lords formally to overrule it ” ( Young v. Grote). The proposition that they responded is inferred. (2) “ It is impossible to regard the judgment as anything more than a decision upon the facts of the particular case.” The import of this proposition has already been examined ; 1 and (3) “ If the doctrine [of Young v. Grote ] applies to the case of a cheque it must also apply to the acceptor of a bill as between him and the drawer.” 5 The validity of this apophthegm is dependent on the identity of the two propositions and so far as they are identical. The Privy Council affirmed this judgment on the authority of Affirmed on Scholfield v. Earl of Londesborough. They say : 6 “ The principles there laid down appear to their Lordships to warrant the proposition v . Earl of that, whatever the duty of a customer towards his banker may be with Londes- reference to the drawing of cheques, the mere fact that the cheque is Uorow E l - drawn with spaces such that a forger can utilise them for the purposes of forgery, is not by itself any violation of that obligation.” It therefore becomes necessary to ascertain what the “ principles there laid down ” were. In Scholfield v. Earl of Londesborough," Lord Watson says : “ In my Young v. opinion, Young v. Grote can have no bearing upon the present case if Grote > t i 7 t S. per Wightman, J., 489. 2 Co. Litt. 352 a. There is a sufficiently remarkable statement by Griffith, C.J., in Marshall v. Colonial Bank of Australasia, 1 Commonwealth (Australia) L. It. 055 : “ The doctrine of estoppel in pais was not, however, formulated in England in 1827. when Young v. Crote was decided, nor until (he case of Pickard v. Scars, 0 A. & E. 40!), which was decided in 1837. There is room for definition in the word “ formulated ” ; but estoppel in pais was discussed by Coke, Co. Litt. supra, Mawlyns’s case, 4 Co. ltep. 52, 53; Syms’s case, 8 Co. Rep. 51a, 53b, Bro. Abr. Estoppel, and Lord Denman in Pickard v. Sears, l.c. 474, so far from indicating that he is formulating new law, treats the rule as “clear.” Griffith, C.J., possibly had in his mind Bigelow,, Estoppel (5th ed.) 455. He should have considered Wdland Canal Co. x. Hathaway (1832), 8 Wend. 480, 483. Cp. Burrowes v. Lock, lOVes. 470, decided in 1805. 3 Low x . Bouverie, [1891] 3 Ch. 105. | 4 L. R. 3 Q. B. 584. Sheffield Corporation v. Barclay, [1905] A. C. 392, 401. s 10 Ves. 470. 6 Onward Building Society v. Smithson, [1893] 1 Ch. 14. To create an estoppel there must be a precise and specific averment of a particular fact ; Might v. Buckncfl, 2 B. & Ad. 278. “ It is a rule that estoppels must be certain to every intent ” : per Williams, J., Kepp v. Wiggett, 10 C. B. 53 ; Whilechurch v. Cavanagh, [1902] A. C. 117, 145. 7 Simrn v. Anglo American Telegraph Co., 5 Q. B. D. 202. ESTOPPEL. 1333 CHAP. IV.] expression usual but not accurate ; since negligence prevents a right of action accruing, estoppel a right that has accrued from being set up. General Principles. The distinction should be observed between the operation of fraud, Distinction breach of duty, warranty and estoppel . 1 Fraud vitiates everything between at the option of its victim. Breach of duty is the violation of an ^ a ^ t ’y breaoh obligation and the ground of action where damage is suffered. Warranty warranty and is the undertaking an obligation that whatever the actual condition estoppel, of a thing, the warrantor shall be bound to act on the basis of it being as it is warranted. Estoppel is a legal disability to aver contrary to a representation, and the representation must be of such a nature that it would have misled any reasonable man, and the person setting up the estoppel must in fact have been misled by it . 2 Unless a liability arises in one of the above ways, there is no greater obligation on one than to answer honestly to any inquiry made of him : to answer, that is, to the best of his actual knowledge and belief. The general rule of estoppel is stated in Freeman v. Cooke 3 by Parke, B., in Parke, B ., 1 adopting a previous definition of Lord Denman, C.J., in 1 Q ( ^ nany ' Pickard v. Sears , 5 “ that where one by his words or conduct, wilfully ac i 0 pt’i n „ the causes another to believe in the existence of a certain state of things, definition of and induces him to act on that belief, so as 6 to alter his own previous ^ ord Denman 1 Low v. Bouverie, [1891] 3 Cli. 82. 2 Lmv v. Bouverie, [1801] 3 Ch. 82, 1 1.3. q j ; n ’ 3 2 Ex. 654. There were earlier cases, as Ileane v. Rogers, 0 B. & C. 577, Graves Pickard v v. Key, 3 B. & Ad. 313, holding that a receipt may be contradicted or explained ; sec £j ears Lee v. Lancs, cfc Y . Ry. Go., L. R. 6 Ch. 527, 535, and Milimay v. Smith, 2 Wins. Saiuid. 343, explained Slimson v. Farnham, L. R. 7 Q. B. 175. It was an ancient rule as to estoppel by statements in a deed that they must be clear and unambiguous in order to bind, Roll. Abr. Estoppel (P.), pi. 1 and 7, acted upon by Lord Cairns, C., in Heath v. Crealock, L. R. 10 Ch. 22, 30, which case was followed byjessel, M.R., in General Finance Mortgage Discount Co. v. Liberator Permanent Benefit Building Society, 10 Ch. D. 15. “ That certainty of statement,” says Kay, L.J., “ is also required to maintain an estoppel upon a statement not by deed appears from Freeman v. Coolcc. where relief was refused upon the ground that no reasonable man would have acted on the faith of the statements made if they were taken together ” : Low v. Bouverie, [1891 1 3 Ch. 113. * “ Who after great consideration amongst all the judges of the Court of Exchequer (to which I can speak from personal knowledge) delivered judgment ” : per Lord Cran worth, C., Jordan v. Money, 5 H. L. C. 213. 5 6 A. & E. 469 ; see also Gregg v. Wells, 10 A. & E. 97, where Lord Denman, C.J., said : “ Pickard v. Sears was in my mind at the time of the trial, and the principle of that case may be stated even more broadly than it is there laid down. A party who negligently or culpably stands by and allows another to contract on the faith and understanding of a fact which he can contradict, cannot afterwards dispute that fact in an action against the person whom ho has himself assisted in deceiving.” This Lord Cranworth, C., in Jordan v. Money, 5 H. L. C. 214, says “ is stated a little too broadly.” See Knights v. Wiffen, L. R. 5 Q. B. 660, considered in Simm v. Anglo- American Telegraph Co., 5 Q. B. D. 188, doubted in 1 Langdell, Cases on Sales, 1028, in the index, also in Am. Law Rev. vol. vi. 470, and observed upon per Bowen, L.J., Mayor, i be. of Kingslon-upon-Uill v. Harding, [1892] 2 Q. B. 506, and per Farwell, J., Dixon v. Kennaway, [1900] 1 Ch. 837 ; Stephens v. Baird, 9 Cowen (N. Y.), 274 ; Welland Canal Co. v. Hathaway, 8Wend. (N. Y.) 480. The representation which induces the plaintiff’s act must be “ a misrepresentation in point of fact, and not merely in point of law ” : per Mellish, L. J., Beattie v. Lord Ebury, L. R. 7 Ch. 802, but see L. R. 7 11. L. 107, arguendo. “If it is a misrepresentation of a legal right pretended to be possessed by the person who asserts it, and a man is injured thereby, he may claim compensation. The misrepresentation in itself may be nothing, it may be that of a mere opinion on doctrine, but if it is a misrepresentation as to title, and the rights and character of the parties who make it, and if it is made with the intention of inducing another to act upon it, and it does so induce him to act, and he thereby suffers, ho may obtain com- pensation.” Honyman, J., in Weeks v. Propert, L. R. 8 C. P. 437, explains Mellish, L. J.’s, dictum ; so does Lush, J., in McCollin v. Gilpin, 5 Q. B. D. 394. 6 In 2 Ex. “ so as ” is in error printed “ or,” as may be seen by reference to 6 A. & E. 474. 1334 NEGLIGENCE IN LAW. [book Vlf. Term “ wilfully ” explained. Parke, B.’s, comment amplified in Cornish v. Ahington by Pollock, C.B. position, the former is concluded from averring against the latter a different state of things as existing at the same time.” The term wil- fully, as used by Lord Denman, is explained to mean : “ If not that the party represents t hat to be true which he knows to be untrue, at least that he means his representation to be acted upon, and that it is acted upon accordingly ; and if, whatever a man’s real intention may be, he so conducts himself that a reasonable man would take the representation to be true, and believe that it was meant that he should act upon it, and did act upon it as true, the party making the representa- tion would be equally precluded from contesting its truth ; and conduct, by negligence or omission, where there is a duty cast upon a person, by usage of trade or otherwise, to disclose the truth, may often have the same effect. As, for instance, a retiring partner, omitting to inform his customers of the fact, in the usual mode, that the con- tinuing partners were no longer authorised to act as his agents, is bound by all the contracts made by them with third persons on the faith of their being so authorised.” 1 Further on in the same judg- ment, Parke, B., says that the representation that is necessary to work an estoppel must be “ such as to amount to the contract or licence of the person making it”; 2 and Lord Chelmsford, C., 3 subsequently in the House of Lords, after approving Parke, B.’s, doctrine, 4 adds, “ so that I apprehend, where there is a vested right or interest in any party, the principle of law as now firmly established is, that he cannot waive or abandon that right except by acts which are equivalent to an agreement or to a licence.” 5 Pollock, C.B., in Cornish v. Abinyton , 6 comments on Parke, B.’s, judgment in Freeman v. Cooke as follows : “ Lord Wensleydale, perceiving that the word ‘ wilfully ’ might be read as -opposed not merely to ‘ involuntarily,’ but to ‘ unintentionally,’ showed that if the representation was made voluntarily, though the effect on the mind of the hearer was produced unintentionally, the same result would follow. If a party uses language which, in the ordinary course of business and the general sense in which words are understood, conveys a certain meaning, he cannot afterwards say he is not bound if another, so understanding it, has acted upon it. If any person, by a course of conduct or by actual expressions, so conducts himself that another may reasonably infer the existence of an agreement or licence, 7 whether the party intends that he should do so or not, it has the effect that the party using that language, or who has so conducted himself, cannot afterwards gainsay the reasonable inference to be drawn from his words or conduct.” 1 2 Exch. 663. Cp. Scarf v. Jardine, 7 App. Cas. 345. British Homes Assu.ru nee Corporation v. Paterson, [1902] 2 Ch. 404, is the converse case. 2 Parke, B.’s, statement lias been adopted by Lord Blackburn, delivering judgment in the following cases : Belts v. Menzies, 10 H. L. C. 144 ; Polak v. Everett. 1 Q. B. 1). 673 ; Miles v. M’llwraith, 8 App. Cas. 133 M’Kenzie v. British Linen Co., 6 App. Cas. 101. 3 Clarice v. Hall, 6 H. L. C. 656. 1 Supra. fi See Chadwick v. Manning, [1896] A. C. 231, decided on the authority of Jorden v. Money, supra. 11 4 H. & N. 555. 7 This test of an agreement or licence is also adopted by Lord Campbell, C., in Cairncross v. Lorimer, 3 Macq. (H. L. Sc.) 830. The American law seems to be the same : Sessions v. Rice, 70 Iowa, 306, 310 ; “ The test question is as to whether the party settingup the estoppel was justified in relying upon the conduct of the other party,” “ Every person will be conclusively presumed to intend to be understood according to the reasonable import of his words ; and where a person’s words are thus reasonably understood, and justly acted upon by another, such person cannot be heard to aver to the contrary as against the other”; Morgan v. Railroad Co., 96 U. S. (6 Otto) 716. ESTOP PET, 1 335 CHAP. IV.] Orompton, points out that the meaning of “ wilfully ” must be Howard *. taken to be “ malo aninio, or with the intent to defraud or deceive, but Hudson. so far wilfully that the party making the representation on which the other acts means it to be acted upon in that way.” Lord Campbell 2 describes the doctrine of estoppel as “found, I Lord Cam p- believe, in the laws of all civilised nations,” and he states it as follows : 2 1,cll “ sl * t0 - “ If a party having an interest to prevent an act being done, has full pJVnoi'i'u- notice of its having been done, and acquiesces in it, so as to induce a Caimeros * v. reasonable belief that he consents to it, and the position of others is Lorimer. altered by their giving credit to his sincerity, he has no more right to challenge the act to their prejudice than he would have had if it had been done by his previous licence.” And 1 jord Blackburn’s 4 statement Lord Black - is not less forcible : “ When a person makes to another the representa- 1 / ) ,"™ ^") tion, ‘ I take upon myself to say such and such things do exist and you may act upon the basis that they do exist,’ and the other man does really act upon that basis, it seems to me it is of the very essence of justice that, between those two parties, their rights should be regulated, not by the real state of the facts, but by that con- ventional state of facts which the two parties agree to make the basis of their action.” The principle was viewed in Jorden v. Money 5 from the standpoint Jorden v. of a Court of Equity. In the opinion of the majority of the Lords, no Honey. more was proved there than imported the declaration of a present intention not to enforce a bond ; and the proposition of law affirmed was that where a person possesses a legal right, a Court of Equity will not interfere to restrain him from enforcing it, though between the time of its creation and that of his attempt to enforce it he has made representations of his intention to abandon it : “ A mere expres- Merc sion of intention, although acted upon, is no ground for equitable intention i nter ference . ” G future 0 Lord Campbell, C., reiterated the doctrine a few months later ; 7 and confers no Lord Selborne, C., in Maddison v. Alderson 8 “ always understood it to right, have been decided in Jorden v. Money 9 that the doctrine of estoppel by representation is applicable only to representations alleged to be at the time actually in existence, and not to promises de future which, if binding at all, must be binding as contracts.” 10 A representation cannot be relied on as ground of estoppel if it has been induced by the concealment of any material fact ; and least of all can a statement induced by the misrepresentation of one claiming the statement to operate as an estoppel be so treated. 11 This doctrine of estoppel in pais is aimed at the preventing injustice Ground of the where one party has been led into error by the fault or fraud of the states the point : “ It would not require much', or indeed any, authority to induce me to hold that if persons conduct themselves so as to show that another is owner of property, they cannot afterwards turn round and say that the property was not his, if the representation had been acted on.” The test Bramwell, B., applies is whether the purchaser “ has been injured by their act ’’—the company’s. But a company is not bound, even though a transfer tendered to them is in order and accompanied by a certificate, to register it at once. They are entitled to delay for a reasonable time and to make reasonable inquiries before registering ; and the general practice is to delay registration till there has been an opportunity given to the registered holder to answer a letter of advice of the presentation of the transfer, 6 and a deposit of a certificate of shares accompanied by a blank transfer is not sufficient to warrant the inference of a transfer of property, for it is consistent with a deposit for security against advances ; 7 since “ a certificate of shares or stock ” “ is merely a solemn affirmation under the seal of the company that a certain amount of shares or stock stands in the name of the person mentioned in the certificate.” 8 And it has been said to be the duty of one receiving the certificate of shares as an equitable mortgage to inquire what is the real position of the person who assumes to mortgage it.‘ J Colonial Bank v. Hepworth 10 cleared the nature of the character of stock certificates somewhat further. A certificate imports an engage- ment that the shares thereby represented are transferable onty on the surrender and cancellation of the certificate, and the printed form on the back shows that a complete transfer must be by registration. Where a transfer is duly signed by the registered holder each prior holder confers on his bond fide successor for value an authority to fill in the name of the transferee and is estopped from denying it. But till registration has been effected no legal estate passes ; and the pos- sessor in good faith for value of a complete legal title is not to be defeated by one with an inchoate title ; nor, as between the transferee and the 1 Colonial Bank v. Cady, 15 App. Gas., per Lord Watson, 277. 2 L. R. 15 Q. B. 584, explained In re Ottos Kopje Diamond Mines, [1893] 1 Ch., per Bowen, L.J., 628. 3 6 A. & E. 469. 4 2 Ex. 654. 5 Hart v. Frontino, dkc. Gold Mining Co., L. R. 5 Ex. 115. Cp. Simm v. Anglo- American Telegraph Co., 5 Q. B. I)., per Bramwell, L.J., 205. « Societe Generate de. Paris v. Walker, 1 1 App. Cns. 20. ~ Colonial Bank v. Whinney, 11 App. Cas. 426. 8 Lord Cairns, C., Shropshire Union Railways and Cana I Co. v. The Queen, L. R. 7 H. L. 509. » France v. Clark, 26 Ch. D. 257. Ante, 1282. 10 36 Ch. D. 36. ESTOPPEL. 1351 CHAP. IV.] company, wall less than an absolute and unconditional right to be registered as shareholders avail . 1 An incoinpleted title of any kind will not defeat a pre-existing equitable one . 2 In Simm v. Anglo-American Telegraph Co ., 3 the system of inquiry Simmv. by companies before the registration of a transfer is said to be modern, An l l °: and “ clearly a practice to which they have recourse for their own Telegraph Co. benefit and not for the benefit of any one else ; because, although there may be no estoppel between them and a person who brings transfers to them, there would be between them and his transferees, and therefore, in order to keep themselves out of trouble, they ought to endeavour to ascertain whether the transfer brought to them is a valid instrument.” A company is not precluded from saying to a transferee who has brought them a forged transfer to register : “You brought us a forged transfer ; we believed it to be genuine, and we have registered you as stockholders ; but we are not precluded from saying that the transfer was forged and that you had not a real title.” 4 This was what was done in Simm v. Anglo-American Telegraph Co. What purported to be a transfer of shares was brought to the defendants ; but since, as between the transferee and the company, no duty existed on the company to inquire of the registered holder of the shares whether his signature to the transfer was genuine (although it was the practice of the com- pany to inquire for their own protection), no liability could arise if the transfer proved to be a forgery. The transferees of the stock however went on to borrowfrombankers Transferees the credit of the company’s certificate ; and at their request their borrow from nominees in whose name the stock stood transferred it into the names creditT of trustees for the lenders. So long as the loan was outstanding, the 0 f the lenders having been induced to part with their money on the faith company’s of the company’s certificate of registration, the company became liable certlficate - for any loss that might be sustained. The loan was subsequently paid off and the stock remained in the name of the registered holders, only now no longer as bare trustees for the lenders, but as bare trustees for the original transferees who had brought the forged transfer for registration. Here a difference of opinion showed itself. Lindley, J., held that “ a duty is thrown on the company to look to their own register, which involves, of course, the looking after the transfer of stocks or shares standing in the names of persons on the register ; and that duty the company owe to those who come with transfers.” 5 The Court of Appeal held that there was no such duty. The inquiry preliminary to registration is, as has been just indicated, “a practice to which they have recourse for their own benefit, and not for the benefit of any one else.” 6 A company is not estopped from denying the sufficiency of a filed contract against a person who knows that the certificate is untrue ; 7 unless perchance he takes a title for value from a purchaser without notice of the untruth . 8 So soon as the loan was repaid, the registered owners, who were the trustees for the bank during the currency of the loan, became trustees for the original 1 Societe G 'n ’rale de Paris v. Walker, 11 App. Cas., per Lord Selborne, 28. Powell v. London and Provincial Bank, [1893] 1 Ch. 610. In re Olios Kopje Diamond Mines, [1893] 1 Ch. 618. 2 Boots v. Williamson, 38 Ch. D. 486 ; Moore v. North-Western Bank, [1891] 2 Ch. 599 ; Ireland v. Hart, [1902] 1 Ch. 522 ; Peat v. Clayton, [1906] 1 Ch. 659. 2 5 Q. B. D., per Bramwcll, L.J., 203. 4 Ibid. 6 L.c. 195. 6 L.c., per Bramwell, L.J., 203. v Markham and Darter's case, [1899] 1 Ch. 414. s In re Bank of Syria, Owen and Ashworth's Claim, [1901] 1 Ch. 115. VOL. II. 2 R NEGLIGENCE IN LAW. Bishop v. Balias Consolidated Co. 1352 [book VII. transferees, and as against them no representation had been made on which they had acted and sustained damage. The contention in Bisho-p v. Balkis Consolidated Co . 1 was that the effect of a “ certification ” of shares as against the company making it is no less than the giving a “ certificate.” “ The practice of giving ‘ cer- tifications ’ has arisen from the difficulty felt by members of the Stock Exchange in settling their accounts as buyers and sellers of shares, where the seller’s certificate of title does not accompany his transfer. If the seller’s certificate includes more shares than he sells, he does not deliver it to the buyer with the transfer, but the seller produces bis certificate and the transfer to an officer of the company, and he ‘ cer- tificates ’ the transfer ; and buyers and their brokers act on the faith of this ‘ certification ’ just as they would if the certificate produced to the company had been produced to and lodged with themselves.” “ The object ofthe ‘ certification ’ is to enable the transferor to satisfy his transferee that he, the transferor, can make a good title to the shares mentioned in the transfer.” “ The certification is made by the secretary or some other officer who has no time to do more than look at the documents produced to him. If, in business language, they are ‘ in order,’ i.e., if they are right on the face of them, he certifies ; if they are not, he refuses to certify. But he has no means of ascertaining and no time to inquire whether the documents produced to him are genuine or not, nor whether the various transfers are valid or invalid in point of law.” “ He does not warrant the title of the transferor, nor the validity in point of law of the various documents which together establish his title.” 2 The giving “ certifications ” was held to be incidental to the ordinary business of companies having capitals divided into shares ; and the company is estopped from denying the truth of the facts certified ; but those facts are only that a certificate was produced to the certifying officer purporting to show a right to transfer in some registered owner. In Bishop's case no such certificate was produced ; but since the mis- representation thence arising was only careless and not fraudulent no action lay. Then as to an estoppel, “ the doctrine of estoppel cannot put the company in a worse position than if a certificate of Lupton’s transferor, Powter, had been produced. If it had, still the transfer from Powter to Lupton would have been invalid, and Lupton, without any default on the part of the company, would not have been able to transfer the shares to Cuthbert. ’ 3 The invalidity of the transfer is thus the infirmative point of the transaction. Here may be noticed the duty of the certifying company with regard to the certificate intrusted to them for certification. It has been contended that immediately upon the lodging and retention of cer- tificates, and on the certification being completed, a duty arises from the company towards persons who may desire to become shareholders ; but this has been negatived ; so that where the secretary of a company, who had had certificates left with him for certification, by mistake sent them back to the registered owner and so enabled a fraud to be perpetrated through the wrongful possession of them, a claim based on breach of duty was held not sustainable ; because no duty existed to persons desirous of becoming members of the company ; nor yet, 1 25 Q. B. D. 512. In re Concession' s Trust, McKay's case, [1890] 2 Ch. 757. 2 L.c., per Lindley, L.J., 519. 2 L.c. 521. See Whitechurch v. Cavanagh, [1902] A. C., per Lord Brampton, 138. ESTOPPEL. 1353 CHAP. IV.] assuming such a duty, was the mere returning of the certificate to the registered owner the proximate, direct or real cause of loss sustained through the plaintiffs having advanced money to him upon the security of certificates which he was not entitled to deal with. 1 Farwell, J., held 2 that the note usually inserted on certificates — Longman v. “ Without the production of this certificate no transfer of the shares Bath mentioned therein can be registered ” — does not raise a duty from the xmmways company to one possessed of a certificate so noted, and served as no more than a warning to the owner to take care of the certificate which he could not make the company register without producing the cer- tificate. Farwell, J.’s, decision was reversed on the facts and without reference to this point ; but Williams, L. J., 3 referred to an argument Williams, which did not rely “ only on the foot-note, but contended that a duty . rose independently of the foot-note by reason of the operation of the sugges 1UI1 ' certificate as a document of title issued by the company for the purpose of enabling persons to whom share certificates might be offered for sale or pledge to act upon the certificate as a document of title, and thus giving to shares a negotiability highly advantageous to the com- pany issuing the certificate, which negotiability would be defeated if the company had no duty to call in one certificate of shares before it issued a second certificate in respect of the same shares, or at least to obtain information reasonably accounting for the non-return of the certificate of the transferor.” This somewhat ponderous phraseology seems to argue a duty from the consideration that certificates are or may be used as negotiable instruments, and to be closely akin to the Criticised by argument the inadequacy of which was exposed by Lord Macnaghten anticipation in Whitechurch v. Cavanagh. 4 Till this negotiability is established and a duty concurrent therewith, the safer plan will be to adopt the view i n White- of Lord Cairns 5 that companies “ were not bound to permit a transfer church v. without the production of the certificates, but, though not bound to , ' avana 9 h - permit a transfer, I apprehend they would not be in any way answerable Lo . rd . Gairns 8 if the transfer should be in any case made without the production of opinion ' the certificates of the shares,” corroborated as it is by that of Lord Davey, which will presently be set out. In In re Bahia and San Francisco Ry. Co., 6 the giving of a certificate by a company had been held to amount to a statement by the company which was intended by them to be acted upon by the purchasers of shares in the market, that the persons certified as the holders were entitled to the shares ; and the company were held estopped from denying its truth as against purchasers who had acted on the statement and were liable to pay as damages the value of the shares. In Balkis Consolidated Co. v. Tomkinson 7 a distinction was Balkis drawn based on the fact that in In re Bahia and San Francisco Ry. Co. Consolidated the person seeking to render the company liable was the purchaser tomkinson of the shares, in whose favour the certificate of the company might work an estoppel ; while in Balkis Consolidated Co., Tomkinson, the vendor of the shares, was suing, who himself received the certificate from the company ; and the case was accordingly brought within the decision 1 Longman v. Bath Electric Tramways, [1905] 1 Ch. 646. 2 Rainford x. James Keith and Blackman Co., [1905] 1 Ch. 296. 3 [1905] 2 Ch. 147. 4 [1902] A. C. 125. 5 Shropshire Union Railways and Canal Co. x. The Queen, L. R. 7 H. L. 509. See per Lord Selborne in Sociite Generate de Paris x. Walker, 11 App. Cas. 29, and per Lord Davey, Sheffield Corporation x. Barclay, [1905] A. C. 403. e L. R. 3 Q. B. 584. v [1893] A. C 396 Lord Herschell s opinion. Sheffield Corporation v. Barclay. Lord Davey’i opinion. Duty to keep register only one to share- holders. 1354 NEGLIGENCE IN LAW. [book vii. in Simrn v. Anglo-American Telegraph Co., that one, who having handed a transfer in for registration receives from a company a cer- tificate that he is the proprietor of shares therein, is not in the same position as regards his rights by estoppel as a transferee from him would be. Lord Herschell, C., however, points out that the ground for the decision in Simmy. Anglo-American Telegraph Co. is twofold : 1 “ In the first place, that Burge [the original purchaser] had not altered his position by reason of the statement in the certificate ; in the next place, that he had himself, by producing to them a forged transfer, induced the company to insert the name of his nominee as the pro- prietor of the stock.” In Balkis Consolidated Co. v. Tomkinson. moreover, there was negligence on the part of the company. “ The company had certified the transfer to the plaintiffs — that is, they had stated in effect that there was in their possession a certificate showing the title of P'owter [the fraudulent assignor] to make the transfer to them ; they knew, and the plaintiffs did not, that they had already certified a transfer of these very shares from Powter to Maitland and Balfour, and that the certificate referred to in their indorsement, ‘ Certificate lodged,’ bore on the face of it a statement showing this was not the case.” They were accordingly held liable. 2 But though the company issuing certificates is bound by them to indemnify one acting on their representation, by reason of the estoppel to deny it, they have in their turn a right against the transferee who comes to them for registration if his transfer is fraudulent or invalid. The House of Lords, in Sheffield Corporation v. Barclay , 3 affirmed the principle that “ when an act is done by one person at the request of another, which act is not in itself manifestly tortious to the knowledge of the person doing it, and such act turns out to be injurious to the rights of a third party, the person doing it is entitled to an indemnity from him who requestedthat it should be done; ” and further reiterated the result of the decision in Starkey v. Bank of England 4 that a person who brings a transfer to the registering authority and requests him ; to register it represents that it is a genuine instrument. Lord Davey was “ disposed to think (though it is not necessary to decide it in the present case) that he not only affirms it is genuine, but warrants that it is so.” Lord Davey also expressed an opinion, which is probably final, on a question we have before noted of the duty of a company to keep their register correct. 5 “ Their only duty (if that be the proper expression) is one which they owe to the stockholders who are on the register. This point was decided by all the learned judges who took part in the decision of the first case of Simm v. Anglo-American Tele- graph Co. 6 I will content myself with quoting the language of Cotton, L. J. ; 7 ‘ The duty of the company is not to accept a forged transfer, and no duty to make inquiries exists towards the person bringing the transfer. It is merely an obligation upon the company to take care that they do not get into difficulties in consequence of their accepting a forged transfer, and it may be said to be an obligation towards the stockholder not to take the stock out of his name unless he has executed a transfer, but it is only a duty in this sense, that unless the company act, upon a genuine transfer they may be liable to the real stockholder.’ ” i L.c. 406. 2 Dixon v. Kennaway, [1000] 1 Ch. 833. 3 [1005] A. C. 302, 307, followed in Bank oj England v. Cutler, [1007] 1 K. B. 880 ; A.-C. v. O'Dell, [1000] 2 Ch. 47 ; Mod Tryvan Ship Co. v. Kruger, [1000] 2 K. B. 702, affirmed [1007] A. C. J272. * [1003] A. C. 1 14. & [ 1005] A. C. 403. 6 5 Q. B. 1). 188. i L.c. 214, also per Bramwell, L.J., 203, and Brett, L.J., 200. ESTOPPEL. 1355 CHAP. IV.] Shaw v. Port Philip and Colonial Gold Mining Co., 1 though decided Shaw v. Port by a Court of little weight when dealing with a question of common law principle, 2 made for some time a difficulty in cases dealing with certifi- Mining Co., cates issued by a fraudulent officer of a company. The case presents many features of similarity with Bank of Ireland v. Trustees of Evans's Charities , 3 which was not, however, noticed in the discussion. A forged certificate was issued by the secretary of a company. Stephen and Mathew, JJ.’s, held “that the secretary is held out by the company as their agent to warrant the genuineness of the certificate.” In 1893, in Balkis Consolidated Co. v. Tomkinson, 1 arguing in the House of Lords, Finlay, Q.C. , treated this assertion as overruled by British Mutual Banking Co. v. Charnicood Forest Ry. Co., 5 which reiterated what had long been established law, that a principal cannot be liable for the unauthorised and fraudulent act of a servant or agent committed for the latter’s own private ends. Whitechurch v. Cavanagh 6 decided that a limited company is not estopped, by the fraudulent “ certification ” of their secretary that certificates for shares were in the company’s office, from showing that the proposed transferor had no shares to transfer ; and the case was thus left to linger on the distinction in liability founded on a fraudulent certificate and that on a fraudulent certification. But its vicious and costly existence as an authority was put an end to by Ruben v. Great Fingall Consolidated , 7 in the House of Lords, where it was held formally over- that a “ forged certificate is a pure nullity. It is quite true that persons dealing with limited liability companies are not bound to inquire into Great Fingall their indoor management, and will not be affected by irregularities of Consolidated. which they had no notice. But this doctrine, which is well established, Op'|j lon of applies only to irregularities that otherwise might affect a genuine c ° u ' transaction. It cannot apply to a forgery.” 8 As to the contention that delivery of a certificate by a secretary imported a representation or warranty that the certificate was genuine, Lord Loreburn, C., con- tinues : “ Certainly no such authority arises from the simple fact that [the forger] held the office of secretary and was a proper person to deliver certificates, nor am I able to see how the defendant company is estopped from disputing the genuineness of this certificate.” “ From beginning to end the company itself and its officers, with the exception of the secretary, had nothing to do either with the preparation or issue of the document.” Lord Macnaghten, noticing Shaw v. Port Philip of Lord and Colonial Gold Mining Co., observed that it “ cannot be supported Macnaghten. unless a forced and unreasonable construction be placed on the admissions which were made by the parties in that action.” This referred to a courteous assumption by Stirling, L.J., in the Court of Appeal 9 (where Mathew, L.J., was sitting as one of the Court), that “ the secretary had in the circumstances been held out by the company as their agent to warrant the genuineness of the certificate.” Ashbury Railway Carriage and Iron Co. v. Riche , 10 with its doctrine of Ashlury Rail - ultra vires, has been invoked for the protection of companies where they way Carriage have certified transfers that ultimately prove forged. It has been argued on their behalf that there can be no remedy for the non-issue 1 13 Q. B. D. 103. 2 Cp. the dissentient judgment in Cavalier v-. Pope, [1905] 2 Iv B. 700. 3 5 H. L. C. 389. * [1893] A. C. 399. 5 18 Q. B. D. 714. e [1902] A. C. 1 17. 7 [1906] A. C. 439. « L.c. 443. 9 [1904] 2 K. B. 730. 10 L. R. 7 H. L. 653. 54 & 55 Viet. c. 43, and 55 & 56 Viet. c. 36, are Acts for preserving purchasers of stock from losses by forged transfer, and provides for payment of compensation for losses sustained from a transfer of securities brought about by forgery. Balkis Consolidated Co. v. Tomkinson. Negligent mortgagee’s liability for the deterioration of the mortgaged estate through negligence. Hopkinson v. Bolt. Interpreted by Lord Blackburn 1356 NEGLIGENCE IN LAW. [book vii. of stock, which a company has no power to issue ; for the effect of allowing damages where there is no power to contract would be to extend the powers of a company, and do away with the limitation on their issue of shares. The answer to this contention was given in Balkis Consolidated Co. v. Tomkinson, 1 where Lord Herschell, C., says : “ A person to whom the company is liable by estoppel to pay damages for refusing to register his transfer, does not by reason thereof become a shareholder. Indeed the very title by estoppel implies that he is not one. It has never been laid down, and is manifestly not the law, that a company is not authorised to employ its funds in paying damages for a wrong done, and if his right by estoppel is established the company have as much committed a wrong by refusing to register as shareholder the person whose title they deny as if his title to be registered had in fact been a good one.” Mortgagees. This opportunity may be taken for noting the amount of negligence which will render a mortgagee liable in respect of deterioration in the value of the mortgaged premises while in his possession. This was treated of by Alderson, B., as follows : 2 “ It is clear that a mortgagee ought not to be charged with deterioration arising in the ordinary way, by reason of houses and buildings of a perishable nature decaying by time.” 3 “I think also that a mortgagee ought not to be charged exactly with the same degree of care as a man is supposed to take who keeps possession of his own property. But if there be gross negligence, by which the property is deteriorated in value, the mortgagee who is in possession is trustee for the mortgagor to that extent that he ought to be made responsible for that deterioration during the time of his possession. It is not necessary to go the length of showing fraud in the mortgagee ; gross negligence is sufficient.” See further a note to 4 Y. & C. (Ex.) 570, where Lord Hardwicke is reported as holding that “ a mortgagee in possession ought to do such repairs as he can repay by the rents of the estate after his interest paid, but he need not rebuild or lay out large sums beyond the rent, for that would be to lend more principal money upon, perhaps, a deficient security.” 4 In Hopkinson v. Roll 5 the question before the House of Lords was thus stated : “ A prior mortgage for present and future advances ; a subsequent mortgage of the same description ; each mortgagee has notice of the other’s deeds. Advances are made by the prior mortgagee after the date of the subsequent mortgage and with full knowledge of it ; is the prior mortgagee entitled to priority for these advances over the antecedent advance made by the subsequent mortgagee ? ” Lord Cranworth thought he was ; the House decided he was not. Lord Blackburn u understood the principle laid down there to be : “ The owner of property does not, by making a pledge or mortgage of it, i [1893] A. C. 407. 2 Wragg v. Denham, 2 Y. & C. (Ex.) 121. 3 Russell v. Smithies, 1 Anslr. 90. i As to loss or destruction of deeds by the mortgagee, Slokoc v. Robson, 3 Vos. & B. 51 ; Lord Midleton v. Eliot, 15 Sim. 531 ; 2 Spence. Eq. Jur. 690. 6 9 H. L. C. 514, 523. lluyhcs v. Britannia Permanent Benefit Building Society, [1906] 2 Ch. 607. g Bradford Banking Co. v. Briggs, 12 App. C;us. 36 ; Union Bank of Scotland \ . National Bank of Scotland, 12 App. Cas. 53. CHAP. IV.] ESTOPPEL. 1357 cease to be owner of it any further than is necessary to give effect to the security which he has thus created, and if the security is, as that in Hopkinson v. Bolt was, a security for present and also for future advances, the pledgee or mortgagee, though not bound to make fresh advances, may, if he pleases, do so, and will, if the property at the time of the further advance remains that of the pledgor, have the security of that property.” Meanwhile, the owner may go elsewhere than to his first mortgagee to get the advances he may require. But “ a mortgagee who is entitled, but not bound, to give credit on the security of property belonging to the debtor, cannot give that credit after he has notice that the property has so far been parted -with by the debtor ” ; 1 or as Lindley, M.R., expresses the principle : 2 “ An owner of property, dealing honestly with it, cannot confer upon another a greater interest in that property than he himself has.” “ When a man mortgages his property he is still free to deal with his equity of re- demption in it, or, in other words, with the property itself subject to the mortgage.” Many questions arise on the duty of mortgagees dealing with title- deeds, and the circumstances in which they are estopped from setting up title against those who possess them. The general principle is well settled, and is stated by Lord Cran- worth, C. : 3 “A first mortgagee having the legal title is not to be postponed to a subsequent purchaser or mortgagee merely because he has not possessed himself of the title-deeds. In order to deprive the first mortgagee of his legal priority, the party claiming by title subsequent must satisfy the Court that the first mortgagee has been guilty either of fraud or gross negligence , 4 but for which he would have had the deeds in his possession. What are the circumstances which will amount to or be evidence of gross negligence it is difficult to define beforehand ; but I think that prinia facie a mortgagee who, knowing that his mortgagor has title-deeds, omits to call for them, or who omits to make any inquiry on the subject, must be considered to be guilty of such negligence as to make him responsible for the frauds which he has thus enabled his mortgagor to commit.” The obligation of a purchaser or a mortgagee to inquire after title- deeds has been defined by Lord Selborne in Agra Bank v. Barry : 5 “This, if it can properly be called a duty, is not a duty owing to the possible holder of a latent title or security. It is merely the course which a man dealing bond fide in the proper and usual manner for his own interest ought, by himself or his solicitor, to follow, with a view to his own title and his own security. If he does not follow that course, the omission of it may be a thing requiring to be accounted for or ex- plained. It may be evidence, if it is not explained, of a design incon- sistent with bond fide dealing to avoid knowledge of the true state of the title. What is a sufficient explanation must always be a question to be decided with reference to the nature and circumstances of each particular case.” If the purchaser has notice of an incumbrance at the time of the purchase, the possession of the legal estate and the title-deeds does not avail against the incumbrancer’s priority . 6 i L.c., per Lord Blackburn, 37. 2 West v. Williams, [1899] 1 Ch. 132, 143. 3 Colyer v. Finch, 5 H. L. C. 928. The principle is reiterated by the Lord Chan- cellor, Perry Herrick v. Attwood, 2 De G. & J. 21, 37. See also Hewitt v. Loosemore, 9 Hare, per Turner, V.C., 458. * Ante, 39, 42. s L. R. 7 H. L. 157. 6 Jared v. Clements, [1903] 1 Ch. 428; Perham v. Kempster, [1907] ICh. 373. in Bradford Banking Co. v. Briggs. Mortgagees dealing with title deeds. General principle. Mortgagee’s duty to inquire after title deeds defined. Competing rights of incumbrancer and possessor of the legal estate considered. Division of the subject in Fry, L. J.’s, judgment in Northern Countiesof England Fire. Insurance Co. v. Whipp. 1358 NEGLIGENCE IN LAW. [book vn. Fry, L.J., 1 divides the discussion of the subject as follows : I. Those cases which relate to the conduct of the legal mortgagee in not obtaining possession of the title-deeds ; and II. Those cases which relate to the conduct of the legal mortgagee in giving up or not retaining the possession of the title-deeds after he has obtained them. I. The former of these classes is further subdivided : («) Where the legal mortgagee or purchaser has made no inquiry for the title-deeds ; in which case he is postponed either to the holder of a prior equitable estate 2 or to a subsequent equitable owner who used diligence in inquiring for the title-deeds, 3 or registering his security. (/3) Where the legal mortgagee has made inquiry for the deeds and has received a reasonable excuse for their non-delivery ; in which case he does not lose his priority ; 5 (-y) Where the legal mortgagee has received part of the deeds under a reasonable belief that he was receiving all ; here also he does not lose his priority ; 6 (o) Where the legal mortgagee has left the deeds in the hands of the mortgagor, with authority to deal with them for the purpose of raising money on the security of the estate, and the mortgagor exceeds the collateral instructions given to him ; in which case the legal mortgagee is postponed. 7 II. The second class of cases is divided into : («) Those where the title-deeds have been lent by the legal mort- gagee to the mortgagor upon a reasonable representation made by him as to the object in borrowing them ; in this case the legal mortgagee does not lose his priority. 8 (/3) Those where the legal mortgagee has returned the deeds to the mortgagor for the express purpose of raising money on them, though with the expectation that he would disclose the existence of the prior security to any second mortgagee ; in which case the Court has, on the ground of authority, postponed the legal to the equitable estate. 9 1 Northern Counties of England Fire Insurance Co. v. Whipp, 26 Ch. D. 482, 487. 2 Worthington v. Morgan, 16 Sim. 547 ; Berwick v. Price, [1905] 1 Ch. 632 ; Wormald v. Maitland, 35 L. J. Ch. 69 ; Walker v. Linom, [1907J 2 Ch. 104. 3 Clarke v. Palmer, 21 Ch. D. 124. In re Castcll and Brown, [1898] 1 Ch. 315, In re Valletort Sanitary Steam Laundry Co., [1903] 2 Ch. 654 ; followed In re Bourne, [1906] 1 Ch. 113, affirmed [1906] 2 Ch. 427. 4 Fullerton v. Provincial Bank of Ireland, [1903] A. C. 309. 5 Barnett v. Weston, 12 Ves. 130; Hewitt v. Loosemore, 9 Hare, 449; Agra Bank v. Barry, L. 11. 7 H. L. 135, 157 ; Manners v. Mew, 29 Ch. D. 725. See also Sharpe v. Foy, L. R. 4 Ch. 35. s Hunt v. Elmes, 2 De G. F. & J. 578 ; Ratdiffe v. Barnard, L. R. 6 Ch. 652, observed on in Oliver v. Ilinton, [1899] 2 Ch. 264 ; Colyer v. Finch, 5 11. L. C. 905. 7 Perry Herrick v. Attwood, 2 De G. & J. 21. followed in Brocklesbury v. Temperance Building Society, [1895] A. C. 173, where deeds were entrusted to an agent with authority to borrow a limited amount, but who, disregarding the limit, borrowed ton greater amount, the principal was estopped from showing the limitation ; which was followed in Lloyd's Bank v. Cooke, [1907] 1 K. B. 794, 803. Lloyds Bank v. Bullock, [1896] 2 Ch. 192 ; Rirnmcr v. Webster. [1902] 2 Ch. 163. 8 Peter v. Russel, or Thatched House case, 1 Eq. Cas. Abr. 321 ; Martinez v. Cooper, 2 Russ. 198 ; Layard v. Maud, L. R. 4 Eq. 397. 8 Briggs v. Jones, L. R. 10 Eq. 92 ; In re Ingham. [1893] I Ch. 352 ; Brock! isby v. Temperance Permanent Building Society, [1895] A. C. 173; Farquharson Brothers v. King, [1902] A. C. 325. As to priorities between equitable mortgagees and others, Russel v. Russel, 1 White & Tudor, L. C. in Equity (6th cd.), 794, note. Priorities as between Equitable Mortgagees and Others. Where there are equities which are other- wise equal, the possession of the deeds gives priority to the person who has got them ; Lloyd's Banking Co. v. Jones, 29 Ch. 1). 221, 229. This does not refer to the dates being the same : per North, J., Farrand v. Yorkshire Banking Co., 40 Ch. 1). 1 89. Jones’s case was followed in Walker v. Linom, [1907J 2 Ch. 104. Ilarpham v. Shacklock, 19 Ch. 1). 207, ESTOPPEL 1350 CHAP. IV.] A supplementary case may be added— where the relation between the equitable incumbrancer and the person in possession of the title- deeds is not merely that of mortgagee and mortgagor, but is of a fiduciary nature (as, for example, that of cestui que trust and trustee, or client and solicitor), there the equitable incumbrancer is not to be deprived of his priority by reason of the improper acts of the person entrusted with the deeds, so long as the incumbrancer has no ground to suppose that there has been any want of good faith on the part of the custodian of the deeds . 1 The question then arises whether, the law being as stated in the Examination case of a contest between the legal estate and an equitable interest, the - there is any difference where the legal estate is not concerned and a con fl; L c t ' conflicting equities only are involved. between two The opinion of Kay, J., in Taylor v. Russell 2 is expressed most un- equities, compromisingly in the negative. He holds the two cases are identical J " in so far as the application of a standard of care goes. Speaking of Bussell. displacing the first of two equitable mortgagees, he says : “ I have not found any case of authority in which this has been done on the ground of negligence that was not ‘ gross ’ — that is, so great as to make the prior mortgagee responsible for the fraud committed on the sub- sequent mortgagee. This seems to me to be the accurate statement of the rule as between two equitable mortgagees ; and for this view of the law there is positive and very high authority.” He then cites statements of the law by Turner, L.J ., 3 Lord Cairns , 4 Lord Cranworth 5 and Lord Selborne , 6 which “ are not obiter dicta, but the carefully worded reasons on which some of the most eminent of modern judges based their decisions ; ” 7 and adds : “ Nothing short of a decision of the House of Lords can overrule the law so laid down.” “ I conclude, therefore, that the negligence necessary to postpone the first equitable mortgagee in such a case as the present, must be so gross as to render him responsible for the fraud committed upon the second mortgagee.” 8 The judgment of Kay, ,T., was appealed against, and reversed by the Court of Appeal , 9 but on another ground ; and Fry, L. J., who delivered the considered judgment of the Court, merely referred to this point by saying : 10 “It becomes needless for us to enter upon a discussion as to any question of negligence, or as to the relative equities of the plaintiff and defendants.” The Court of Appeal’s decision was affirmed by the House of Lords , 11 where Lord Macnaghten said : “ I am not at present con- vinced of the correctness of the view expressed by the learned judge who tried the case in the first instance, that negligence necessary to postpone a prior equitable mortgagee in such a case as the present must be so gross as to render him responsible for the fraud committed on the second mortgagee, and that in fact it is immaterial in such cases is commented on by Lord Herscbell, Taylor v. Russell, [1892] A. C. 253 .Sec also per Lord Macnaghten, 259. As to the doctrine of tabula in naufragio, the obtaining priority for an equity by getting in the legal estate, see Marsh v. Lee, 1 White & Tudor, L. C. in Equity (6th ed.), note 700, 701. For what is a “ better equity,” see 2 Spence, Eq. Jur. 728 etseqq. 1 Taylor v. London and County Banicing Co., [1901] 2 Ch. 231, 261 ; Colley v. National Provincial Bank, 20 Times L. R. 607 ; Walker v. Linom, [1907] 2 Ch. 104. 2 [1891] 1 Ch. 8, 15 ; Powell v. London and Provincial Bank, [1893] 1 Ch. 610, 2 Ch. 555. 3 Cory v. Eyre, 1 Re G. J. & S. 167. 4 Shropshire Union Railways and Canal Co. v. The Queen, L. R. 7 H. L. 507, commented on Carritt v. Real and Personal Advance Co., 42 Ch. D. 263 ; In rc Richards, 45 Ch. D. 589, 594 ; Rimmer v. Webster, [1902] 2 Ch. 163, 170. 8 Roberts v. Croft, 2 De G. & J. 6. 6 Dixon v. Muckleston, L. R. 8 Ch. 161. 7 [1891] 1 Ch. 17. 8 Ibid. 9 L.c. 24. io L.c. 30. n [1892] A. C. 244, 262. 1 3fiO NEGLIGENCE TN LAW. [book vn. Farrand v. Y orkshire Banking Co. Comment. National Provincial Bank of England v. Jackson. whether the prior mortgagee has or lias not the legal estate.” In Taylor v. London and County Banking Co ., 1 Stirling, L.J., referring to the above-cited passage says : “ I am not aware that the precise point considered by that learned judge has since arisen for decision; and if it were necessary to decide it in the present case, I should think it my duty to examine with the utmost care his judgment in Taylor v. Russell, and the authorities relied on by him. I think, however, that on the present occasion such an examination may be dispensed with.” In the argument in Taylor v. Russell before Kay, J., the case of Farrand v. Yorkshire Banking Co. 2 was cited, but is not alluded to in the judgment. In his judgment there, North, J ., 3 considering the case of the postponement of a legal mortgagee to an equitable mortgagee and the' case of a conflict between the rights of two equitable mort- gagees, held the distinction “ between the two cases is clear, and cannot be better stated than in the judgment of Cotton, L. J., in National Provincial Bank of England v. Jackson , 4 where, after referring to Fry, L.J.’s, judgment in Northern Counties of England Fire Insurance Co. v. Whipp as recognising the difference between the case of a con- test between equities and one between an equitable title and the legal estate, he quoted this passage : * The question is not what circum- stances may, as between two equities, give priority to the one over the other, but what circumstances justify the Court in depriving a legal mortgagee of the benefit of the legal estate ’ ; and he added : ‘ And the judgment in Kettlewell v. Watson 5 is to the same effect. As between equitable claims, the question is, whether one party has acted in such a way as to justify him in insisting on his equity as against the other.’ ” In the case he was deciding, the negligence he was deciding on was undoubtedly gross. A loan was made and with it an agreement to deposit title-deeds with the lender. No demand was made ; the title-deeds were allowed to remain in the possession of the borrower, who raised money on them from his bankers, in whose possession they remained for twenty-two years without any inquiry after them from the person entitled to their possession. The case seems to fall under Fry, L.J.’s, Class I ( L.c. 161. chap, iv.] ESTOPPEL. 1367 the depositee’s money and of solicitor for the depositee.” It is other- wise if he omits all inquiries. Both branches of the rule are stated by Turner, V.C., in Hewitt v. Loosemore : 1 “ The law, therefore, as I collect it from the authorities, stands thus : That a legal mortgagee is not to be postponed to a prior equitable one upon the ground of his not having got in the title- deeds, unless there be fraud or gross and wilful negligence on his part. That the Court will not impute fraud, or gross and wilful negligence to the mortgagee, if he has bond fide inquired for the deeds and a reasonable excuse has been given for the non-delivery of them ; but that the Court will impute fraud, or gross and wilful negligence, to the mortgagee if he omits all inquiry as to the deeds.” 2 The same learned judge subsequently, when Lord Justice, more definitely indicates the limits of the law thus : 3 “A purchaser or mortgagee is bound to inquire into the title of his vendor or mortgagor, and will be affected with notice of what appears upon the title if he does not so inquire ; 4 nor can it, I think, be disputed that this rule applies to a purchaser or mortgagee of leasehold estates, as much as it applies to the purchaser or mortgagee of freehold estates, or that it applies equally to a tenant for a term of years ; and I cannot see my way to hold that a rule which applies in all these cases ought not to be held to apply in the case of a tenant from year to year.” 5 Though it is true that where one with a charge on lands contracts with the owner to release his charge so that the owner may mortgage the lands and the mortgage is made on this basis, he who has contracted to release his charge will not be allowed to set it up against the mort- gagee ; yet where the mortgagor has fraudulently got the release without giving the holder of the charge the consideration he has con- tracted to give, as, for example, where forged securities have been handed over in place of genuine securities, the holder of the charge is not precluded from setting up his original and paramount right against the assignee of the mortgagor. The assignee may have a right to compel the performance of the contract between his mortgagor and the holder of the charge, that is, to compel him to release his original charge on having the new securities substituted ; but this is all he has . 6 James, L.J., states the principle : 7 “ If a purchaser, however honest, on the completion of his purchase acquires'a defective title, that defective title this Court will not allow to be strengthened either by his own fraud or by the fraud of any other person.” 1 9 Hare, 458. “Nothing but fraud or gross and voluntary negligence in leaving the title-deeds will oust the priority of the legal claimant ” : Plumb v. Fluilt, 2 Anstr. 432, 440 ; Wormald v. Maitland, 35 L. J. Ch. 69 ; Sharpe v. Foy, L. R. 4 Ch. 35 ; Dixon v. Winch, [1900] 1 Ch. 736; Turner v. Smith, [1901] 1 Ch. 213; Berwick v. Price, [1905] 1 Ch. 032; Walker v. Lmorn, [1907] 2 Ch. 104, 114. 2 See In re Lord Southampton’ s Estate, Allen v. Lord Southampton, Banfather’s Claim, 16 Ch. D. 178 ; Roper’s Claim, 50 L. J. Ch. 155. 3 Wilson v. Hart, L. R. 1 Ch. 463, 467. 4 Notice to a purchaser that there is a lease is notice of its contents (Hall v. Smith, 14 Yes. 426), where there is a fair opportunity of ascertaining the contents : Hyde v. Warden, 3 Ex. D. 72; Reeve v. Berridge, 20 Q. B. D. 523. If the lease contains unusual and onerous covenants it is the duty of the vendor before the contract is made to disclose them to a purchaser ignorant of them : Molyneux v. Hawtrey, [1903] 2 K. B. 487. In re White and Smith's Contract, [1896] 1 Ch. 637 ; In re Haedicke and Lipski’s Contract, [1901] 2 Ch. 666. 3 See the Vendor and Purchaser Act, 1874 (37 & 38 Viet. c. 78), s. 2, Second Rule which is held not to have altered the rule that a lessee has constructive notice of his lessor’s title : Patman v. Harland, 17 Ch. D. 353, followed in English and Scottish Mercantile Co. v. Brunton, [1892] 2 Q. B. 700. 6 Eyre v. Burmester, 10 H. L. C. 90. 7 Heath v. Crea/ock, L. R. 10 Ch. 33. VOL. II. 2 S Statement by Turner, V.C., in Hewitt v. Loosemore. Charge released by means of a false repre- sentation will work no prejudice to the holder. 1368 NEGLIGENCE TN LAW Client de- frauded by solicitor. Hunt v. Elmes. In re Richards. Cestui quc trust de- frauded by trustee. Various modes of affecting with notice. Lord Cran- worth in W are v. Lord Egmont. [book VII. In a case 1 where a solicitor handed his client a packet of deeds, purporting to be the deeds of an estate, while in reality the deeds were not included in the packet but were retained by the solicitor and subsequently parted with to another mortgagee, Turner, L.J., held that the client had not been guilty of gross negligence in not examining them and ascertaining that they were correct so as to preclude him from setting up his title against the second mortgagee. “ Clients in the ordinary course of business,” said the Lord Justice , 2 “ trust their solicitors, and negligence cannot be imputed where the ordinary course of business has been observed.” In another case 3 a solicitor deposited the title-deeds of his client, a mortgagee, with his own banker as security for an advance. After the death of the solicitor the bankers gave notice to the mortgagor of the property in priority to the mortgagee, nevertheless, the bankers were still held postponed to the mortgagee. A cestui que trust is also entitled to place reliance upon his trustee, and is not bound to inquire whether he has committed a fraud against him unless there is something to arouse his suspicions . 4 On the other hand, the holder of a first equitable interest in property who puts the deeds, not into the hands of a person owing him a duty, but into the hands of his mortgagor, who uses them to obtain an advance, would be postponed to the maker of such advance . 5 A person may be affected with notice of a deed by anything outside the ordinary course of events calculated to suggest to a reasonably prudent man the advisability of making inquiry 6 — that is, if there is a natural connection between the abnormal circumstance and the point that it is the duty of the person to know ; 7 as, for instance, where the purchaser is only able to make out a title by a deed which leads him to another fact which would work disclosure, the purchaser is presumed to have knowledge of it . 8 The rule has been put as high as that a man must show, not only that he had no information of the suggestive circumstance, but that with due diligence he could not have obtained it . 9 The preponderance of authority, however, is against this view. Thus in Ware v. Lord Egmont 10 Lord Cranworth said : “ The question, when it is sought to affect a purchaser with constructive notice, is not whether he had the means of obtaining, and might by prudent caution have obtained, the knowledge in question, but whether the not obtaining it was an act of gross or culpable negligence.” This was the rule adopted in the House i Hunt v. Elmes, 2 De G. F. & J. 578 ; Taylor v London and County Banking Co., [1901] 2 Ch. 231, 261. 2 L.c. 588. 3 In re Richards, 45 Ch. D. 589, 595. 4 In re Vernon Ewens & Co., 33 Ch. D. 402. This also is a solicitor’s case, though the principle of the confidential relation applies to trustees. Ante, 1 198. k 5 Waldron v. Sloper, 1 Drew. 193. \ Kennedy v. Green, 3 My. & K. 699 ; Robinson v. Briggs, 1 Sm. & G. 188 ; Earl of Gainsborough v. Watcombe Terra Cotta Co., 54 L. J. Ch. 991. The doctrine of Kennedy v. Green is exhaustively considered in connection with the English cases in Green v. Fletcher, 8 N. S. Wales R. (Eq.) 58. In Rolland v. Hart, L. R. 6 Ch. 078, Lord Hatherley, C., distinguishes Kennedy v. Green. Seo further, Sugden, Vendors and Purchasers (14th ed.), 756. Lord St. Leonards expressed disapproval of the decision in Marjoribanks v. Hovenden, Drury (Ir. Ch.), 11. James, L.J.’s, criticism in Hunter v. Walters, L. R. 7 Ch. 84, should also be referred to. Kettlewell v. Watson, 21 Ch. D. 685; 26 Ch. D. 501. 7 Grecnslade v. Dare, 20 Bcav. 284. Cp. Conveyancing and Law of Property Act, 1881 (44 & 45 Viet. c. 41), s. 55, sub-s. 1. 8 Bisco v. Earl of Banbury, 1 Cases in Ch. 287 ; Moore v. Bennett, 2 Cases in Ch. 246 ; Davies v. Thomas, 2 Y. '& C. (Ex.) 234. « Wason v. W arcing, 15Beav. 151. to 4 De G. M. & G. 473. ESTOPPEL. 1369 CHAP. IV.] of Lords in Montefiore v. Browne 1 and it has since repeatedly been followed . 2 So that, in the case of a purchaser omitting to call for title-deeds, he will not be affected with notice of a fraud by the person of whom he was bound to make the inquiry, in addition to being affected with the knowledge that they are in the possession of some holder for value ; 3 nor yet if he is told, by the person who gives him notice of a deed, which does not necessarily affect the property, that it does not affect the particular property he is going to deal with . 4 There is a distinction also between notice in regard to personal Notice in estate and notice relating to real estate. Where an equitable charge regard to is given on personal estate in the hands of a trustee, notice to the trustee estate and is necessary as against subsequent incumbrancers, though this is not notice in so in the case of land . 5 The principle is that where there are several regard^to assignments of interest in personal estate, the assignee who gives notice rea es d L ' first to the trustee is entitled to priority . 6 Notice, said Lord Cairns, C., in a case of personal estate , 7 should Requisites be in writing to the trustees of the property on which the incumbrance of notlce - is given. If there is no writing the holder of the security is exposed to two dangers : first, the danger of the trustee being left in entire ignorance of the security ; and next, “ if he attempts to prove knowledge of the trustee aliunde, the difficulty which this Court will always -feel in attending to what are called casual conversations, or in attending to any kind of intimation which will put the trustee in a less favourable position as regards his mode of action than he would have been in if he had got distinct and clear notice from the incumbrancer.” Yet in some circumstances, notwithstanding, a trustee may be fixed with know- ledge of an incumbrance where there is no express notice from the incumbrancer. “ It must depend upon the facts of the case ; but I am quite prepared to say that I think the Court would expect to find that those who alleged that the trustee had knowledge of the incum- brance had made it out, not by any evidence of casual conversations, much less by any proof of what would only be constructive notice — but by proof that the mind of the trustee has in some way been brought to an intelligent apprehension of the nature of the incumbrance which has come upon the property, so that a reasonable man, or an ordinary man of business, would act upon the information and would regulate his conduct by it in the execution of the trust. If it can be shown that in any way the trustee has got knowledge of that kind — knowledge 1 7 H. L. C. 241. 2 Cavander v. Bidteel (1871), L. R. 9 Ch., per Wickens, V.C., 81 n. ; Banco de Lima v. Anglo- Peruvian Bank (1878), 8 Ch. D., per Malins, V.C., 175 ; In re A. W. Hall (t- Co. (1887), 37 Ch. D., per Stirling, J., 720, 721. See also Macbryde v. Eykyn, 24 L. T. (N. S. ), per Malins, V.C., 4G4. 3 Hipkins v. Amery, 2 Gift 292, 301. 4 Jones v. Smith, 1 Hare, 43, affirmed, 1 Ph. 244, and referred to in English and Scottish Mercantile Investment Trust v. Brunton, [1892] 2 Q. B., by Charles, J., 10, as establishing in conjunction with Patman v. Harland , 17 Ch. D. 357, the distinction between documents which must necessarily, and those which may or may not affect title. Charles, J.’s, judgment was affirmed, [1892] 2 Q. B. 700. Cox v. Coventon, 31 Beav. 378; Grosvenor v. Oreen, 28 L. J. Ch. 173; Borell v. Dann, 2 Hare, 440 ; Reeve v. Berridge, 20 Q. B. D. 523 ; Hill v. Simpson, 7 Ves. 152. s Union Bank of London v. Kent, 39 Ch. D. 238. 6 Stephens v. Green, [1895] 2 Ch. 148, 158 ; In re Lake, Ex parte Cavendish, [1903] 1 K. B. 151. 7 Lloyd v. Banks, L. R. 3 Ch. 488, 490. See Saffron Walden Building Society y. Rayner, 10 Ch. D. 696, 703, reversed 14 Ch. I). 406; While v. Ellis, [1892] 1 Ch. 188, 196. 1370 NEGLIGENCE IN LAW. [book VII. Browne v. Savage commented on by Lindley, L. J. in Low v. Bouverie, who quite inadequately appreciates Kindersley, V.C.’s, state- ment. View of Cozens- Hardy, J., in Lloyd's Bank v. Pearson, which would operate upon the mind of any rational man, or man of business, and make him act with reference to the knowledge he has so acquired — then I think the end is attained, and that there has been fixed upon the conscience of the trustee, and through that upon the trust fund, a security against its being parted with in any way that would be inconsistent with the incumbrance which has been created.” In Brown v. Savage 1 it was laid down that notice to one trustee is notice to all. But this is stigmatised by Lindley, L.J ., 2 as “ one of those misleading generalities against which it is necessary to be on one’s guard.” The more accurate statement of the principle, as laid down by the same high authority, seems to be that, though notice to one trustee would give priority over a prior incumbrancer who has given notice to none of the trustees, yet notice to one does not affect the others so as to render them liable for their action taken in ignorance of the notice to their co-trustee . 3 Lindley, L.J.’s, criticism is somewhat unjust, as a reference to the complete passage from Kindersley, Y.C.’s, judgment shows : 4 “As a general rule, notice to one of several trustees is sufficient, so long as that trustee lives. It is sufficient for the reason that a person who is asked to advance his money on the trust property, whether by way of purchase or of mortgage, ought, for his own safety, to apply to every one of the trustees ; and if he omits to take that precaution it is his own fault if he should suffer loss in consequence of the omission. If, then, notice to one trustee is sufficient, it is contended that in the case of the assignor being himself one of the trustees, inasmuch as he is necessarily cognisant of his own assignment, that, of itself, constitutes a sufficient notice to one of the trustees, and there is no necessity for notice being given to his co-trustees. Now, it is true that it is not necessary that the notice to a trustee should be a notice formally given in writing ; a verbal and informal notice is sufficient, provided the fact of the assignment is distinctly and clearly brought to the mind and attention of the trustee. But in the case where the assignor is himself one of the trustees, he being the only one of the trustees* who has any notice or knowledge of the assignment which he has made, if he should afterwards apply to another person to advance him a sum of money on an assignment of his interest, concealing the fact of such prior assign- ment, such proposed assignee could not, by any caution in making inquiry of all the trustees, discover the fact of the prior assignment ; for it is the interest of the proposed assignor to conceal the prior assignment ; and the other trustees know nothing about it. Such notice, therefore, would not effect the object for which notice to trustees is required ; viz., the security of the party talcing the assign- ment against prior assignments concealed from him by his assignor.” And Cozens-Hardy, J ., 5 says of this : “ I am not aware that the authority of Browne v. Savage, so far as it relates to the effect of notice to or knowledge of a trustee assignor, has ever been questioned . 6 It was quoted with approval by Sir John Romilly in Wittes v. Greenhill J That case only decided that where a beneficiary, the wife of a trustee, mortgaged her separate estate by a deed to which the husband trustee 1 4 Drew. 635. 2 Low v. Bouverie, [1891] 3 Ch. 104 ; White v. Ellis, [1892] 1 Ch. 188. 2 Phipps v. Lovegrove, L. R. 16 Eq. 80. See Ward v. Buncombe, [1893] A. C. 369, 383. ♦ 4 Drew. 640 5 Lloyd's Bank v. Pearson, [1901] 1 Ch. 865. 871. This of course does not impugn what is said in Low v. Bouverie, [1891] 3 Ch., by Lindley, L. J., 99. 7 29 Beav. 376, 387. OHAP. IV.] ESTOPPEL. 1371 was a party, the notice to or knowledge of the husband trustee was sufficient. It will be observed that the trustee was not and could not be the assignor of his wife’s separate estate, though he may have been, and probably was, the person who got the benefit of the money ad- vanced. On appeal , 1 Lord Westbury expressly stated that he did not intend to overrule or throw doubt upon any former decision, including of course Browne v. Savage .” Further, in the Court of Appeal, in In re Dallas , 2 Williams, L.J., quotes with approval Cozens-Hardy, J.’s, statement in the last-cited case : “ It would be whittling away the rule, and indeed would be making it a mere trap, if it were to be held that the knowledge which an assignor trustee has of his own incum- brance is sufficient to give the assignee priority against a subsequent incumbrancer who gives due notice to all the trustees. This, I take it, was the view of Kindersley, V.C.” The notice to or knowledge of a sole assignor trustee is not, then, an effective notice to operate on priorities. The law has been thus summed up : 3 “If one only of the trustees in existence at the date of the second assignment had notice of the prior assignment, the earlier assignee does not lose his priority. It has also been held that an assignee who has given notice to one only of several trustees is not entitled to priority over a subsequent assignee who takes his assignment after the death of the trustee to whom notice has been given ; and it has also recently been determined by Stirling, J., in In re Wasdale , 4 where the authorities for the former propositions are referred to, that an assignee who has given notice to all the trustees in existence at the time of his assignment is entitled to priority over a subsequent assignee who has taken his assignment after the death or retirement of all those trustees, and who gives notice of such assignment to the new trustees.” The mere omission of a person having an equitable interest in a fund, the legal property of which is in another, to give notice of that interest will of itself give a puisne incumbrancer the priority ; 5 but this principle is not applicable to a mortgage of real estate ; 6 because “ by the assignment of the mortgage the debt necessarily passes as incident to it ; and it is clear that to constitute a valid assignment notice to the mortgagor is not necessary.” 7 Where the property is equitable and the legal estate is in trustees, the act of giving the trustees notice is, to a certain degree, taking possession of the fund ; 8 for after notice the trustee of the fund is and of Williams, L.J., la re Dallas. Conclusion. Effect of omission of person having an equitable interest in a fund to give notice to the tenant of the legal estate. Giving notice analogous to taking posses- sion of an i 4 De G. F. & J. 147. 2 [1904] 2 Ch. 385, 412. equitable 3 Per Byrne, J., Freeman v. Laing, [1899] 2 Ch. 358 ; In re Phillips’ Trusts, [1903] U,K - 1 Ch. 183. 4 [1899] 1 Ch. 163 5 Wright v. Lord Dorchester (1809), 3 Russ. 49 n., has been cited as indicating that Lord Eldon favoured the doctrine. But Lord Macnaghten points out, in Ward v. Duncomhe, [1893] A. C. 384, that “ that case really throws no light upon the point ” ; and in Meux v. Bell, 1 Hare, Wigram, V C., 83, thinks it “ apparent upon the judgment in Evans v. Bicknell (6 Ves. 190), that Lord Eldon at that time did not consider the mere omission to give notice ” would have the effect contended for. Sir Thomas Plumer, in Cooper v. Fynmore (1814), 3 Russ. 60, was of the same opinion. He says (64), “ mere neglect of notice was not sufficient to postpone ” a prior incumbrancer. “ In order to deprive him of his priority, it was necessary that there should be such laches as, in a Court of Equity, amounted to fraud.” 6 In re Richards, 45 Ch. D., per Stirling, J., 595 ; Hopkins v. Hemsworth, [1898] 2 Ch. 347. 7 Per Sir W. Grant, M.R., Jones v. Gibbons, 9 Ves. 410; Taylor v. London and County Banking Co., [1901] 2 Ch. 231. s Shadwell, V.C., in Jones v. Jones, 8 Sim. 633, explains that the rule in Dearie v. HaU has nothing to do with the assignment of equitable interests in real estate. 1372 NEGLIGENCE IN LAW. Lord Lynd- hurst con- siders notice to one trustee sufficient to take property out of the order and disposition of a bankrupt. Comment on Smith v. Smith by Lord Her- schell, C., in Ward v. Duncombe. [BOOK VII. affected with a direct responsibility to the assignee who has given him notice. The reason for the assertion of this principle lies in the con- sideration of the power the cestui que trust of such an interest has of taking the same security repeatedly into the market, and inducing third persons to deal with him on the assumption of his absolute ownership of the property, and of the expediency of throwing diffi- culties in the way of the assignor coming into the market to dispose of that which he had previously sold, and being enabled to obtain “ a false and delusive credit.” 1 In such cases, therefore, priority of notice gives priority of title ; 2 and to deprive a person who has done everything he can to complete his title to priority by giving notice to trustees, there must be negligence so gross as to affect the person guilty with the consequences of fraud . 3 4 Lord Lyndhurst, who as Chancellor affirmed Dearie v. Hall, as Chief Baron delivered the judgment in Smith v. Smith , 1 and held that notice to one of several trustees was sufficient to take the property out of the order and disposition of a person subsequently bankrupt. “ A second assignee,” said Lord Lyndhurst , 5 “ in order to have obtained a priority over the plaintiff must have shown that he had exercised proper caution in taking the assignment ; that he had applied to the trustees to know if any previous assignment had been made ; and, unless he applied for this purpose to each of the trustees, he would not have exercised due caution, or done all that he ought to have done.” Commenting on this language in Ward v. Duncombe , 6 Lord Her- schell, C., says it is “ somewhat remarkable. It would seem, if correctly reported, to indicate the view that a second incumbrancer would only obtain priority over an earlier one if he had used due caution, and had, in fact, made such inquiry as a prudent man would of each of the trustees.” Such a view is in direct conflict with the decision of the House of Lords two years later in Foster v. Cockerell, 7 where the rule 8 in Dearie v. Hall is affirmed to be independent of any considerations of the conduct of the competing assignee, if that assignee has no notice of the earlier assignment. Priority in such cases depends simply and solely on priority of notice . 9 Lord Herschell considered 10 that Lord Lyndhurst cannot have intended to say more than “ that where one of several trustees has notice of an incumbrance, the cestui que trust is no longer left in apparent possession, for any person asked to take a subsequent assignment, and adopting the precaution which a prudent 1 Dearie v. Hall, 3 Russ., per Sir Thomas Plumer, M.R., 13. 2 In re Frcslifield's Trust, 11 Ch. D. 198, followed iu English and Scottish Mercantile Investment Co. v. Brunton, [1892] 2 Q. B. 1, and Montcfiore v. Gucdalla, [1903] 2 Ch. 20. 2 Ware v. Lord Egmont, 4 De G. M. & G. 400, as to which see Molyneux v. Hawlrcy, [1903] 2 K. B., per Collins, M.R., 493 ; Montcfiore v. Browne, 7 H. L. C. 241 ; Bailey v. Barnes, [1894] 1 Ch. 25. 4 2 Cr. & M. 231, followed by Lord Westbury, C., Wittes v. Greenliill, 4 De G. F. & J. 147. 5 2 Cr. & M. 233. o [18931 A. C. 380. 7 3 Cl. & F. 450. See a criticism of this case, and the various explanations of it by Lord Macnaghten, who concludes that it has come to be treated “ as applying only to assignments of choses in action, or of such interests in real estate as can only reach the hands of the beneficiary or assignor in the shape of money,” [1893] A. C. 389, 390. 2 Said to be derived from the doctrine of Ryall v. Bowles, 1 Ves. 348. “ In the ease of a chose in action, you must do everything towards taking possession that the subject admits ” : per Sir Thomas Plumer, M.R., Dearie v. Halt, 3 Russ. 23 ; Wilmot v. Pike, 5 Hare, per Wigram, V.C., 19: “The expressions of Sir Thomas Plumer are applied to personal property.” 9 In re Dallas, [1904] 2 Ch. 385, 414. i<> [1893] A. C. 380. ESTOPPEL. CHAP. IV.] 1373 man would of inquiring of all the trustees, would come to know of the prior incumbrance.” The rule in Dearie v. Hall was the subject of a very scrutinising inquiry in the House of Lords in Ward v. Duncombe} There one of two trustees had notice of a settlement, and it was contended that so long as this trustee lived the settlement had priority of a subsequent charge of which both trustees had notice, but that on his death the subsequent charge obtained priority. Lord Herschell, C., was of opinion 2 that the leading consideration which induced the Court to lay down the rule in Dearie v. Hall, that he who gives notice has a better equitable right than a prior incumbrancer who has given no notice, was “ that any other decision would facilitate fraud by the cestui que trust, and cause loss to those who might have used every precaution that was possible to ascertain, before parting with their money, that the title they were taking was a valid one.” “ Where,” he says , 3 “ at the time the second advance is made, one of the trustees has notice of a prior incumbrance, 1 see no reason why notice of the second incumbrance should give it priority over the earlier assignment. The fund was not at the time of the second advance left in the apparent possession of the cestui que trust. The person asked to make the second advance could have protected himself had he chosen to make that inquiry of all the trustees which prudence enjoined.” The Lord Chancellor then discriminates the case where at the time of the second advance the trustee, knowing of the first advance, is no longer a trustee. The fund is again in the apparent possession of the cestui que trust. A case like this does not, however, “ warrant the conclusion that where at the time of the second advance and notice the trustees, through one of their number, were in possession of notice of a prior assignment, the later assignment, although it is not, at the time when notice of it is received by the trustees, entitled to priority over the earlier assignment, becomes entitled to such priority when the trustee who had notice of that assignment dies or ceases to act.” The test is what was the title at the time of the advance and when notice was given to the trustees . 4 A hardship was suggested as likely to arise by virtue of the decision of the Court of Appeal in Low v. Bouverie} that trustees of a fund are not under any legal obligation to answer inquiries put to them as to existing incumbrances ; but Lord Herschell meets it by saying : 6 “ If the trustees, or any of them, were to decline to answer such in- quiries, it seems to me that the intending incumbrancer would take the risk upon himself of whatever prior incumbrances there might chance to be. He would be dealing with property which he had no sufficient ground for concluding was at the disposal of the cestui que trust. He would not be deceived by any apparent possession.” Notice of a deed is notice of its contents , 7 even where there is the most express representation that it contains nothing affecting the 1 [1893] A. C. 369. 2 L.c. 378. 3 L.c. 381. 4 Lord Macnaghten does not concede even so much. He says, l.c. 394, “ I take leave, however, to doubt whether the proposition on which the argument is founded can be treated as settled law. There is no authority for it that I know in this country but the case of Timson v. Ramsbottom ” ; which ho proceeds to show was decided on very special facts, besides that the appeal in the case was compromised. 6 [1891] 3 Ch. 82. See as to the view of Knight Bruce, V.C., in Etty v. Bridges, 2 Y. & C. (Ch.) 493, Lord Macnaghten’s comment, [1893] A. C. 393 ; and an article on The Doctrine of Notice to Trustees, Law Mag. and Review, (1893) vol. xix. (4th ser.) 81. Porter v. Moore, [1904] 2 Ch. 367. 6 [1893] A. C. 383. Rule in Dearie v. Hall examined in IT ard v. Duncombe. Reasoning of Lord Herschell, C. Difficulty suggested by the decision in Low v. Bouverie. Met by Lord Herschell. Notice of deed, notice of its contents. t Malpas v. Aclcland. 3 Russ. 273. Notice in cases of specific performance. Notice must be of a deed actually executed. Duty where property is purchased known to be in the occupa- tion of a tenant. Conflicting decisions. 1374 NEGLIGENCE IN LAW. [book vii. title. 1 The mere deposit of a document or title is enough in equity to create a charge on the property therein referred to. If, how- ever, the deposit is accompanied by an actual written charge, the terms of the written document must be referred to and govern the deposit. 2 In cases of specific performance, notice of a lease affects the pur- chaser only in the absence of misrepresentation and with the know- ledge of ordinary covenants. What are ordinary covenants differ with regard to the situation of property or the circumstance of the sale. 3 Notice of a deed actually executed is necessary, and not notice merely of an intention to execute a deed. “ There is no case or reason- ing,” said Lord Thurlow, 4 “ which goes so far as to say that a purchaser shall be affected by notice of a deed in contemplation.” Further, the mere execution of a deed by a witness will not fix him with, notice of its contents ; for, says Lord Thurlow, “ a witness in practice is not privy to the contents of the deed.” 5 Recitals in a deed operate as notice, 6 even though they are inaccurate ; 7 but they arc not representations of fact on the faith of which a stranger to the deed is entitled to act without inquiry. 8 A general notice that an estate is subject to a charge as a judgment is operative, though there is no information as to the exact nature or amount. 9 It was held in a case 10 where plaintiff, believing a house to be his, had, though warned by the true owner of his title, pulled it down and rebuilt it, and had afterwards had ejectment brought against him by the owner, that the owner, having once and recently given notice of his claim to the property, was not bound again to assert his rights when the expenditure on it began, or while it was going on, in order to exclude any equity of the plaintiff’s -in respect of his expenditure. Lord Romilly 11 also held that, where a vendor contracted to sell property which the purchaser knew was in the occupation of a tenant, there was a duty to inquire as to the interest of the tenant ; failing which the purchaser was affected with notice of an agreement for a lease which the tenant had ; his decision was followed by the Common Pleas in Phillips v. Miller}- In Caballero v. Ilenty 13 the Court of Appeal, 1 Taylor v. Slibberl, 2 Ves. 437 ; Phillips v. Miller, L. R. 10 C. P. 420. 2 Shaw v. Foster, L. R. 5 H. L. 321 ; London and Canadian Loan and Agency Co. v. Duggan, [1893] A. 0. 500. 3 Wilbraham v. Livesey, 18 Beav. 200 ; Molyneux v. Hawtrey, | 1903] 2 K. B. 487. 4 Cotliay v. Sydenham., 2 Bro. C. C. 393 ; see Shaw v Foster, L. R. 5 H. L., per Lord O’Hagan, 352 et seqq. ; Williams v. Williams, 1 7 Ch. D., per Kay, J., 442 et seqq. 6 Beckett v. Cordley, 1 Bro. 0. C. 357, referring to Mocutta v. Murgatroyd, 1 P. Wms. 393, of which Lord Thurlow says : “ I do not leave this as a case which I should determine in the same manner.” See also Stevens v. Mid-Hants Ry. Co., L. R. 8 Ch., per James, L.J., 1069. u Farrow v. Rees, 4 Beav. 18 ; Taylor v. Baker, 5 Price (Ex.), 306. 7 Hope v. Liddell (No. 1), 21 Beav. 183, Dart, Vendors and Purchasers (7th ed.), vol. ii. 895. As to statutory limitations on the old law, see the Conveyancing and Law of Property Act, 1881 (44 & 45 Viet. c. 41), s. 3, sub-s. 3. This clause will not affect the purchaser’s right to object where the defect is accidentally disclosed by the vendor : Smith v. Robinson, 13 Ch. D. 148, followed In re National Provincial Bank oj England and Marsh, [1895] 1 Ch. 190, 200. 8 Trinidad Asphalte, Co. v. Coryat, [1896] A. C. 587. n Taylor v. Baker, 5 Price (Ex.), .306, Dan. (Ex.) 71 (where is a valuable reporter’s note), which is recognised in Penny v. Watts, 1 Hall & Twells, 266, 282. to Clare Hall v. Harding, 6 Hare, 273. it James v. Lichfield, L. R. 9 Eq. 51. 12 L. R. 9 C. P. 196. 13 L. R. 9 Ch. 447. CHAP. IV.] ESTOPPEL. 1375 affirming Jessel, M.R., held that the doctrine of notice would be unduly extended if applied as between the vendor and purchaser, and whilst the matter still rests in contract . 1 The true doctrine, said James, L. J ., 2 referred only “ to equities between the purchaser and the tenant when the legal estate has passed,” and had “ nothing to do with the rights and liabilities of vendors and purchasers between themselves.” “ If there is anything in the nature of the tenancies which affects the property sold, the vendor is bound to tell the purchaser, and to let him know what it is which is being sold ; and the vendor cannot afterwards say to the purchaser, ‘ If you had gone to the tenant and inquired, you would have found out all about it.’ During the argument I referred to a passage in Sugden’s Vendors and Purchasers , 3 which seems to show that a purchaser is not bound to go to the tenant to inquire.” Subsequently the Exchequer Chamber overruled the decision of the Common Pleas in Phillips v. Miller . 4 Possession by a vendor of an estate which he has sold will not be constructive notice of any lien for unpaid purchase-money if the vendor has signed the usual receipt on the conveyance for the whole purchase -money ; but otherwise it will . 5 Nor will the mere circum- stance of the vendor having been out of possession many years affect a bond fide purchaser and without notice . 6 We have now to note the effect on the client of knowledge by his solicitor. Most generally the law imputes to the client the knowledge of the solicitor he employs. There is this qualification, however. “ If the disclosure of that fact of which knowledge is sought to be fixed upon the client would have imputed fraud to the solicitor, it is not to be presumed that the solicitor did make disclosure of that fact.” 7 “ I take it to be very clearly established that if a person employed as a solicitor has done things, which if disclosed would prevent the perfection of the security on which he is engaged, which would show that a good title does not exist to that which he is the instrument of conveying to the purchaser, it is not to be expected or inferred that he would communicate what he has done to his client.” And the ten- dency of the later decisions has been to hold that when a man employs a solicitor whose whole purpose and meaning in the transaction is to cheat and defraud his client, and who in furtherance of this intention keeps back purposely from his knowledge the true state of the case, the presumption that the client had imputed to him a constructive notice, through the solicitor, of the fact which had been concealed from him is repelled . 8 In Fuller v. Benett 9 three propositions seem to have been accepted as indispensable : First, that notice to the solicitor is notice to the client ; 1 Daniels v. Davison, 16 Ves. 249 ; Cavander v. Bulteel, L. R. 9 Ch. 79. 2 L. R. 9 Ch. 450. 3 (14th ed.) 774. * L. R. 10 C. P. 420. s White v. Wakefield, 7 Sim. 401 ; Mackreth v. Symmons, 1 White & Tudor, L. C. in Equity (6th ed.), 355, note at 387. t> Barnhart v. Greenshields, 9 Moo. P. C. C. 18, 34 : “ There is no authority ” “ for the proposition that notice of a tenancy is notice of the title of the lessor ; or that a purchaser neglecting to inquire into the title of the occupier is affected by any other equities than those which such occupier may insist on.” This is followed by Farwell, J., Hunt v. Duck, [1901] 1 Ch. 45, who comments (53) on Sir George Jessel’s statement in Mumford v. Stohwasser, L. R. 18 Eq. 562. Hunt v. Luck is affirmed, [1902] 1 Ch. 428, 433. 7 Per Bacon, V.C., Waldy v. Gray, L. R. 20 Eq. 251, 252. 8 Kerr, Fraud (3rd ed.), 330. 9 2 Hare, 394, 402. In the judgment the order of propositions 2 and 3 is transposed. Doctrine of Caballero v. Henty affirmed. Possession by vendor not necessarily notice of lien for unpaid purchase- money. Knowledge of solicitor’s knowledge of client. Fuller y. Benett. Effect of notice of agent. No notice where title- deeds held by largest owner. Notice affecting the director of a company. Negligeuce against negligence. Res judicata. 1376 NEGLIGENCE TN LAW. [book vii. Secondly, that notice to the solicitor to bind the client must be notice in that transaction in which the client employs him ; 1 Thirdly, that where vendor and purchaser employ the same solicitor, each is affected with notice of whatever the solicitor had notice in his capacity of solicitor for either vendor or purchaser in the transaction in which he is so employed. 2 What is notice to an agent or trustee is notice 3 to the principal ; 4 and the presumption that a solicitor has communicated to his client facts which he ought to have made known cannot be rebutted by proof that it was the solicitor’s interest to conceal them. 5 It is not necessary that the agent’s knowledge should be acquired during the existence of the agency. It is sufficient that having ac- quired the knowledge he subsequently acts in the agency. The duty of the agent thereupon arises to communicate to his principal any knowledge which he had previously gained in the matter. 6 A purchaser will not be affected with notice of a prior equitable mortgage, by his knowledge that the title-deeds are in the possession of the equitable mortgagee, if the equitable mortgagee, by reason of his being the largest co-owner of the property, is the person who, in- dependent of the mortgage, is entitled to their custody. 7 Chitty, J., 8 following Jessel, M.R., refused to extend the doctrine of constructive notice so as to impute to a director of a company a knowledge of the books, where the accounts had been duly audited, and the auditors were apparently accountants of skill and integrity, since “it would be extending the doctrine of constructive notice far beyond that or any other case.” 9 “ It is sufficient,” said Chitty, J., “ if directors appoint a person of good repute and competent skill to audit the accounts, and have no ground for suspecting that any- thing is wrong. The directors are not bound to examine entries in the company’s books.” 10 Negligence against negligence, like estoppel against estoppel, sets the matter at large. 11 The rule with regard to res judicata is laid down by Wigram, V.C., in Henderson v. Henderson , 12 “ where a given matter becomes the sub- ject of litigation in, and of adjudication by, a court of competent jurisdiction, the Court requires the parties to that litigation to bring 1 Bulpett v. Slurges, 22 L. T. (N. S.) 739. 2 For the rule as to notice to agent, 2 Kent, Comm. 030 n. (b), and Mr. Holmes’s note to 12th ed. 2 Actual not constructive notice to the principal, Dart, Vendors and Purchasers (6th ed.), vol. ii. 875 ; Sugden, Vendors and Purchasers (14th ed.), 750. 4 Le Neve v. Le Neve, Amb. 430, 2 White and Tudor, L. C. in Equity (0th ed.), 20, note at 67, “ Constructive notice between principal and agent.” Maxfield v. Burton, L. R. 17 Eq. 15 ; Rolland v. Hart, L. R. 6 Ch. 678 ; Berwick v. Price, [1905] 1 Ch. 632, 2 Ch. 153. 5 Bradley v. Riches, 9 Ch. D. 189. Actual notice amounting to fraud must be proved to affect the holder of a registered deed with notice of a prior unregistered deed : Wyatt v. Barwell, 19 Ves. 435. A man cannot be presumed to have disclosed his own fraud : In re European Bank , L. R. 5 Ch. 358, 302. Ketilewell v. Watson, 21 Ch. D. 080, 705. In re David Payne and Go., [1904] 2 Ch. 008, 016. 7 Ex parte Hardy, 2 Deac. & Ch. (Bank.) 393, 394. Sec Agra Bank Ld. v. Barry, L. R. 7 H. L. 135. 8 Inre Denham