ANTECEDENT INDEBTEDNESS AS A

VALUABLE CONSIDERATION.

The possession of property at the common law is never regarded as anything more than prima facie evidence of title.1 The possessor, therefore, who has nothing but a bare" possession, cannot transfer a title to a purchaser, for he can only transfer that which he has, nemo plus juris in alium transferre potest quam ipse habet. To this general principle there was at common law an exception in case of a sale in a market overt; but in this country there are no markets overt, nor is there any usage or custom to modify, control or interfere with the application of this rule.2 Consequently, a purchaser acquires no title if he buys goods that have been lost or stolen.3 The doctrine, however, is not limited to purchases from a finder or a thief, but applies to purchases from a possessor who has no real or apparent authority to sell; as for instance, a bailor, or an agent whose authority is limited to the custody or preservation of the property.5 In all cases of this kind, the doctrine of caveat emptor applies. The purchaser krows that he has no right to trust to the possession alone; for the law, with its jealous regard for the sanctity of titles and the preservation of the right to property, has made the possession only prima facie evidence of title. In pursuance of this public policy, it declares that in such a case, the loss, if any, must fall upon the purchaser.

4

1 Arundell v. Phipps, 10 Ves. Ch. 139. 2 Wheelwright v. Depeyster, 1 Johns. 471; Mowrey v. Walsh, 8 Cow. 238; Fawcett v. Osborn, 32 Ill. 411; Ventress v. Smith, 10 Pet. 175.

3 Peer v. Humphrey, 2 A. & E. 495; s. C., 4 N. & M. 430; Basset v. Green, 2 Duvall, 560; Dodd v. Arnold, 28 Tex. 97.

4 Hartop v. Hoare, 1 Wils. 8; s. C., 2 Strange, 1187; Fawcett v. Osborn, 32 Ill. 411; Johnson v. Willey, 46 N. H. 75; Sanborn v. Colman, 6 N. H. 14.

5 Emerson v. Fisk, 6 Me. 200; Dresser Manf. Co. v. Waterson, 3 Met. 9.

owner consents to take the personal obli of the possessor; the purchaser trustthe property and the possessor's apparen If the possessor perpetrates a fraud by of the possession, the owner must be loss upon the principle that when one o innocent persons must suffer, the loss fall upon him who, by his indiscretion enabled such third person to commi fraud. In this respect it makes no diff whether the property is real or personal. ground of the decision is the same in bo is, that the delivery of the thing by the to one who has the evidence of title wi owner's consent, gives such an appeara ownership that the purchaser under justified in dealing with him as the true of The only ground upon which a purcha protected in such a case, is that he trus the property, and will suffer a loss if taken from him. As against the true he sets up the change in his condition vest the owner of title by way of est But if there will be no loss, there ground for an estoppel. If he does no with value, but merely takes it in cons tion of an antecedent debt, then there alteration in his condition. There is no to support an estoppel, for he ha remedy against the possessor wher property is taken from him. Therefo is not entitled to protection against the er, if he takes it in payments of an cedent debt, or as collateral security 9 f

6 Root v. French, 13 Wend. 570. 7 Somes v. Brewer, 2 Pick. 184.

8 Dickerson v. Tillinghast, 4 Paige, 215; Jack Myers, 11 Wend. 533; Metropolitan Bank v. Go 23 Ill. 579; Baze v. Arper, 6 Minn. 220; Roy Adams, S. & M. Ch. 45; Powell v. Jeffries, 5 Il Pancoast v. Duval, 26 N. J. Eq. 445; Zorn v. Ra Co., 5 Rich (N. S.) 90; Pickett v. Barron, 29 505; Stuart v. Kissam, 2 Barb. 493; Rhea v. Al 3 Head. 176; George v. Kimball, 24 Pick 234 Abbott v. Marshall, 48 Me. 44; Downs v. Beld Vt. 674; Weaver v. Barden, 49 N. Y. 286; J Campbell, 1 Sch. & L. 346; Crane v. Drake, 2 616; Stone V. Welling, 14 Mich. 514. tra Plumb v. Fluitt, 2 Anst. 432; Love v. Tayl Miss. 567; Soule v. Shotwell, 52 Miss. 236; Gib Moore, 7 B. Mon. 92; Shufeldt v. Pease, 16 Wi Nugent v. Gifford, 1 Atk. 463; Butters v. Haugh 42 Ill. 18.

9 Morse v. Godfrey, 3 Story, 390; Manhattan Evertson, 6 Paige, 457; Westervelt v. Haff, 2 Ch. 98; Wood v. Robinson, 22 N. Y. 564; Glin Zawadski, 8 Fla. 405; Donaldson v. State Ba Dev. Eq. 103; Smith v. Osborn, 33 Mich. 410; Pe v. Swank, 43 Miss. 349; Alexander v. Caldwe Ala. 517; Spurlock v. Sullivan, 36 Tex. 511; M

antecedent debt.

For the same reason the true owner has the better right as against a trustee for the benefit of creditors, 10 although the creditors release their debts, 11 or an assignee in bankruptcy, 12 or an attaching creditor,13 or an execution creditor,14 or a judgment creditor,15 who buys the property under an execution issued upon his judgment. Any other doctrine would be an inducement to fraud, for it would enable an insolvent debtor to buy property and turn it over immediately to a preferred creditor. 16 As a bill of lading is only quasi negotiable, and is merely a symbol of the possession of the goods, a transfer in consideration of an antecedent debt is not a transfer for value. 17

V. Condit, 23 N. J. Eq. 313; Cary v. White, 52 N. Y. 138; s. c. 7 Lans. 1; Root v. French, 13 Wend. 570; Poor v. Woodburn, 25 Vt. 235; Gafford v. Stearns, 51 Ala. 434; Tiffany v. Warren, 24 How. Pr. 293; Harris v. Horner, 1 Dev. & Bat. Eq. 455; Turner v. Petigrew, 6 Humph. 438; Barnard v. Campbell, 55 N. Y. 456; 8. C. 58 N. Y. 73; Harwood v. Jones, 10 G. & J. 404. Contra, Babcock v. Jordan, 24 Ind 14; Partridge V. Smith, 2 Biss. 183; Coleman v. Smith, 55 Ala. 368. 10 Ratcliffe v. Sangston, 18 Md. 383; Van Heusen v. Radcliff, 17 N. Y. 580; In re Howe, 1 Paige, 125; Burn v. Burn, 3 Ves. Jr. 576; Willis v. Henderson, 5 Ill. 13; Keeler v. Field, 1 Paige, 312; Haggerty v. Palmer, 6 Johns. Ch. 437; Harris v. Hart, Duer, 606. Contra, Dey v. Dunham, 2 Johns. Ch. 182. 11 Clark v. Flint, 22 Pick. 231; Knowles v. Lord, 4 Whart. 500.

12 Donaldson v. Farwell, 93 U. S. 631; s. c. 5 Biss. 451.

13 Hussey v. Thornton, 4 Mass. 405; Buffington v. Gerrish, 15 Mass. 156; Barrett v. Pritchard, 2 Pick. 512; Reed v. Upton, 19 Pick. 522; Buson v. Dougherty, 11 Humph. 50; Gilbert v. Hudson, 4 Me. 345; Field v. Stearns, 42 Vt. 106.

14 Bristol v. Wilsmore, 1 B & C. 514; Tamplin v. Addy, 8 Cow. 239, note; Herring v. Hoppock, 3 Duer, 20; Van Cleef v. Fleet, 15 Johns. 147; Ash v. Putnam, 1 Hill, 302.

15 Devoe v. Brandt, 53 N. Y. 462; Arnold v. Patrick, 6 Paige, 310; Wright v. Douglass, 10 Barb. 97; Rollins v. Callender, Freem. Ch. (Miss.) 295; Williams v. Hollingsworth, 1 Strobh. Eq. 103; Schultz v. Carter. Speer's Eq. 533; Ayres v. Duprey, 27 Tex. 593; Orme v. Roberts, 33 Tex. 768; Padgett v. Lawrence, 10 Paige, 170. Contra, Halloway v. Platner, 20 Iowa, 121.

15 Knowles v. Lord, 4 Whart. 500.

17 Rodger v. Comptoir D'Escomptes, L. R. 2 P. C. 393; Holbrook v. Vose, 6 Bosw. 76; Lesassier v. The Southwestern, 2 Woods, 35; Powell v. Bradlee, 9 G. & J. 220. Contra, Leask v. Scott, L. R. 2 Q. B. Div. 376. There is considerable conflict in the authorities as to how far an antecedent debt will constitute a valuable consideration so as to divest a vendor's lien. Those who are interested in that question may consult Work v. Brayton, 5 Ind. 396; Bayley v. Greenleaf, 7 Wheat. 46; Richeson v. Richeson, 2 Gratt. 497; Gann v. Chester, 5 Yerg. 205; Wood v. Bank, 5 Mon. 194; Hallock v. Smith, 3 Barb. 267; Johnson v. Graves, 27 Ark. 557; Wynne v. Alston, 1 Dev. Eq. 163;

The principle that determines the rights of parties in the case of negotiable paper is the same as in the case of property, to-wit, that when a loss must fall upon one of two innocent persons, it must fall upon him whose inattention or negligence or undue confidence has caused the loss. 18 But the difference between negotiable paper and property is an additional element that makes a difference in the result. Negotiable paper is not treated in the same way as property, but it is treated as money in the ordinary course and transaction of business by common consent, which gives it the credit and currency of money to all intents and purposes. It is as much money as any current coin that is used in common payments as money or cash. 19 This peculiar use of negotiable paper has made a difference between the law of property and the law of negotiable paper. The possession of property is only prima facie evidence of title; negotiable paper passes by delivery, and possession proves title.20 If property is lost or stolen, a purchaser from the finder or the thief gets no title; if negotiable paper is lost 21 or stolen,22 a purchaser may get a good title from the finder or the thief.

If any other valuable consideration besides the mere taking for an antecedent debt enters into the contract, then the holder will be a holder for value, although the antecedent debt is a part of the consideration. He is a holder for value if he for instance takes negotiable paper without recourse in satisfaction of a debt 23 or gives the debtor definite time on the antecedent debt,24 or takes it in extinguishment of a demand not yet due, 25 or surrenders

Dunlap v. Burnett, 5 S.&M.702; Duval v. Bibb, 4 Hen. & Mun. 113; Wells v. Morrow, 38 Ala. 125; Repp v. Repp, 12 G. & J. 341; Brown v. Vanlier, 7 Humph. 239; Shirley v. Sugar Refinery, 2 Edw. 505. 18 Thurston v. McKown, 6 Mass. 428. 19 Miller v. Race, 1 Burr. 452.

20 Peacock v. Rhodes, Doug. 633.

21 Anon., 1 Salk. 126; Anon., 1 Ld. Raym. 738; Grant v.Vaughan,3 Burr.1516; s. c.1 W. Black. 485; Lawson v. Weston, 4 Esp. 56; Higgs v. Holiday, Cro. Eliz. 746.

22 Miller v. Race, 1 Burr. 452; Peacock v. Rhodes, Doug. 633; Devallar v. Herring, 9 Mod. 44. Contra, Hinton's Case, 2 Show. 235.

23 Bank v. Gilliland, 23 Wend. 311.

24 Atlantic National Bank v. Franklin, 55 N. Y. 235; Petrie v. Clark, 11 S. & R. 377; Goodman v. Simonds, 20 How. 343; Traders' Bank v. Bradner, 43 Barb. 379. 25 Youngs v. Lee, 12 N. Y. 551; s. c. 18 Barb. 187; White v. Springfield Bank, 3 Sandf. 222; s. c. 1 Barb. 225.

34

the debtor's note to him,26 or surrenders security,27 or abandons a legal right to an attachment,28 or discontinues proceedings supplemental to an execution,29 or surrenders a claim against a third party,30 or cancels a note with an indorser, although he holds it for subsequent delivery,31 or gives his own note,32 or indorses another note, or accepts a draft,3 or takes it in settlement of a claim against an agent who exceeded his authority in selling the holder's goods. 35 It has also been held that he is a holder for value, if he sold his goods upon the understanding that he was to be secured by collateral, and then takes the paper within a few days thereafter.36 Parting with value, even subsequently to the taking of the paper, may make him a holder for value if he does so on the faith of the 'paper. 37

Although there is no such additional consideration, yet a party who takes negotiable paper in payment of an antecedent debt, is a holder for value. Such paper has the qualities of money, and its transfer is regulated by the law that governs the transfer of money. The proper use of money is to pay debts, and a person who so takes it does so in the ordinary course of business. He is

26 Brown v. Leavitt, 31 N. Y. 113; Stetheimer v Meyer, 33 Barb. 215; Gould v. Segee, 5 Duer, 260; Mechanics & Traders' Bank v. Crow, 60 N. Y. 85; Knox v. Clifford, 38 Wis. 651; Bromley v. Walker, 51 Barb. 203; Pratt v. Coman, 37 N. Y. 440; Stevens v. Campbell, 13 Wis. 375; Burns v. Rowland, 40 Barb. 368; Clary v. Surrency, 58 Ga. 85; Bright v. Judson, 47 Barb. 29.

27 Depeau v. Waddington, 6 Whart. 220; White v. Springfield Bank, 3 Sandf. 222, s. c. 1 Barb. 225; Chrysler v. Renois, 43 N. Y. 209; Goodman v. Simonds, 20 How. 343; Aitken v. Meyer, 67 Barb. 131. 28 Payne v. Bensley, 8 Cal. 260; Naglee v. Lyman, 14 Cal. 450.

29 Boyd v. Cummings, 17 N. Y. 101.

30 Lowndes v. Anderson, 13 East, 130; Bond v. Central Bank, 2 Ga. 92; Allaire v. Hartshorne, 21 N. J. 665; Nichol v. Bate, 10 Yerg. 429; Mohawk Bank v. Corey. 1 Hill, 513; Emanuel v. White, 34 Miss. 56. 31 Bank v. Babcock, 21 Wend. 499.

32 Mickles v. Colvin, 4 Barb. 304.

33 Stotts v. Byers, 17 Iowa, 303; Williams v. Smith, 2 Hill, 301.

34 Ex parte Bloxham, 8 Ves. Ch.531; Seneca County Bank v. Neass, 3 N. Y. 442; Inglis v. Kennedy, 6 Abb. Pr. 32; Fetters v. Municipal Nat. Bank, 34 Ind. 251; Bank v. Buck, 5 Wend. 66; Atlantic Nat. Bank ▼. Franklin, 55 N. Y. 235; DeZeng v. Fyfe, 1 Bosw. 335; Lathrop v. Morris, 5 Sandf. 7; Schepp v. Carpenter, 49 Barb. 542.

35 Ingham v. Vaden, 3 Humph. 51.

36 Fenby v. Pritchard, 2 Sandf. 151; Smith v. Mulock, 1 Abb. Pr. (N. S.) 374.

37 Ayrault v. McQueen, 32 Barb. 305; Farrington v. Frankfort Bank, 24 Barb. 554.

38 N.Y.M. Iron Works v. Smith, 4Duer 362; White v. Springfield Bank, 3 Sandf. 222; Purchase v. Mattison, 3 Bosw. 310: Gould v. Segee, 5 Duer, 260; Boehm v. Sterling, 7 T. R. 423; Percival v. Frampton, 2 C., M. & R. 180; Anon., Comyn, 43; Homes v. Smyth, 16 Me. 177; Norton v. Waite, 20 Me. 175; Ives v. Farmers' Bank, 2 Allen, 236; Fogg v. Griffin, 2 Allen, 1; Blanchard v. Stevens, 3 Cush. 162; Stevens v. Campbell, 13 Wis. 375; Bangs v. Flint, 25 Wis. 544; Rice v. Cutler, 17 Wis. 351; Stevenson v. Hayland, 11 Minn. 198; Riley v. Van Amringe, 2 McLean, 589; Swift v. Tyson, 16 Pet. 1; Jewett v. Hone, 1 Woods, 530; Brush v. Scribner, 11 Conn. 388; McCasky v. Sherman, 24 Conn. 605; Cecil Bank v. Heald, 25 Md. 562; Carlisle v. Wishart, 11 Ohio, 172; Williams v. Littel 11 N.H. 66; Armour v. McMichael,36 N. J.92; Allaire v. Hartshorn, 21 N. J. 665; Bond v. Central Bank, 2 Ga. 92; Bank v. Hall, 6 Ala. 639; Barney v. Earle, 13 Ala. 106; Walker v. Geisse, 4 Whart. 252; Bostwick v. Dodge, 1 Doug. (Mich.) 413; Outhwite v. Porter, 13 Mich. 533; Bush v. Peckard, 3 Harrington, 385; Reddick v. Jones, 6 Ired, 107; Robinson v. Lair, 31 Iowa, 9; Bank of Charleston v. State Bank, 13 Rich. 291; Russell v. Hadduck, 8 Ill. 233; Conkling v. Vail, 31 Ill. 166; Foy v. Blackstone, 31 Ill. 538; Emanuel v. White, 34 Miss. 56; Dixon v. Dixon, 31 Vt.450; Alexander v. Springfield Bank, 2 Met. (Ky.) 534; May v. Quimby, 3 Bush, 96; Frey v. Clifford, 44 Cal. 342; Davis v. Russell, 52 Call. 611. Contra: Rosa v. Brotherson, 10 Wend. 86; Ontario Bank v. Worthington, 12 Wend. 593; Clark v. Ely, 2 Sandf. Ch. 166; Payne ▼. Cutler, 13 Wend. 605; Mickles v. Colvin, 4 Barb. 304; Chesbrough v. Wright, 41 Barb. 28; Lawrence v. Clark, 36 N. Y. 128; McAdam v. Cocke, 6 Daly, 101; Ayres v. Leypoldt, 6 Daly, 91; Cardwell v. Hicks, 37 Berb. 458; Bright v. Judson, 47 Barb. 29; Tur ner v. Treadway, 53 N. Y. 650; Spear v. Myers, 6 Barb. 445; McQuade v. Irwin, 39 N. Y. Sup. 396; McGuire v. Sinclair, 47 How. Pr. 310; N. Y. Exchange Co. v. De Wolf, 3 Bosw. 86; Clark v. Gallagher, 20 How. Pr. 308; Fulton Bank v. Phoenix Bank, 1 Hall, 562; Wormley v. Lowry, 1 Humph. 468; Nickerson v. Raiguel, 2 Heisk, 329; Solomons v. Bank, 13 East, 135; De La Chaumette v. Bank, 9 B. & C. 208; Riley v. Johnson, 8 Ohio, 526; Breckenridge v. Moore, 3 B. Mon. 629; Ingerson v. Starkweather, Walk. Ch. 346.

39 Bridgeport City Bank. v. Welch, 29 Conn. 475; Gardner v. Gager, 1 Allen, 502; Blanchard v. Stevens, 3 Cush. 162; Stoddard v. Kimball, 4 Cush. 604; A. C., 6 Cush. 469; Fisher v. Fisher, 98 Mass. 383; Hillen v. Smith, 71 Mass. 400; Lindsay v. Chase, 104 Mass. 253; Robinson v. Smith, 14 Cal. 94; Boatman Sav. Inst. v. Holland, 38 Mo. 49; Grant v. Kidwell, 30 Mo. 455; Meadow v. Bird, 22 Ga. 246; Bonaud v. Genesi, 42 Ga. 639; Citizens' Bank v.

trine rests upon the ground that such use of negotiable paper is according to the usual and known course of trade and business, and that the interests of commerce require that the credit and circulation of such paper shall be as wide as possible. In such a case, moreover, there is an implied agreement 40 to forbear to press the debtor for the antecedent debt; and if the holder were to be deprived of his security after he had granted the forbearance, he might sustain a loss which ought more properly to fall on the party who put the paper into circulation. But trustees in insolvency,41 or for the benefit of creditors, 42 are not holders for value. As to them there is no ground for presuming forbearance, or an implied agreement to forbear. They are merely authorized to collect what may be due to the estate for the benefit of the creditors,

Payne, 18 La. Ann. 222; Smith v. Isaacs, 23 La. Ann. 454; Mallard v. Ailett, 6 La. Ann. 92; Sucession v. Dolhonde, 21 La. Ann. 3; Cobb v. Doyle, 7 R. I. 550; Bank v. Carrington, 5 R. I. 515; Atkinson v. Brooks' 26 Vt. 569; Manning v. McClure. 36 Ill. 490; Doolittle v. Cook, 75 Ill. 354; McCarty v. Roots, 21 How. 432; Oates v. Nat. Bank, 100 U. S. 239; Valette v. Mason, 1 Ind. 288; Allaire v. Hartshorne, 21 N. J. 665; Bank v. Chambers, 11 Rich, 657; Gibson v. Conner, 3 Ga. 47. Contra, Small v. Smith, 1 Denio, 583, Scott v. Ocean Bank, 23 N. Y. 289; Coddington v. Bay, 20 Johns. 637; Stalker v. McDonald, 6 Hill, 93; Wardell v. Howell, 9 Wend. 170; Francia v. Joseph, 3 Edw. Ch. 182; Atlantic Nat. Bank v. Franklin, 55 N. Y. 238; Prentice v. Graves, 33 Barb. 621; Scott v. Betts, Hill & D. Sup. 363; Duncan v. Gosche, 21 How. Pr. 344, 8 Bosw. 243; Cummings v. Boyd, 83 Pa. 372; Evans v. Smith, 4 Binn. 366; Petrie v. Clark, 11 S. & R. 377; Garrard v. Pittsburgh, etc. R. Co., 29 Pa. 154, Pratt's Appeal, 77 Pa.378; Walker v. Geisse, 4 Whart. 252; Kirkpatrick v. Muirhead, 16 Pa. 117; Lenheim v. Wilmarding, 55 Pa. 78; Royer v. Keystone Nat. Bank, 83 Pa. 248; Ashton's Appeal, 73 Pa. 153; Cook v. Helms, 5 Wis. 107; Jenkins v. Schaub, 14 Wis. 1; Fletcher v. Chase, 16 N. H. 38; Rice v. Raitt, 17 N. H. 116; Williams v. Little, 11 N. H. 66; Jenness v. Bean, 10 N. H. 266; Bertrand v. Barkman, 13 Ark. 150; Goodman v. Simonds 19 Mo. 106; Brainard v. Reavis, 2 Mo. App. 490; Roxborough v. Messick, 6 Ohio St. 448; s. C., 1 Handy, 348; Cullum v. Bank, 4 Ala. 21; Bank v. Hall, 6 Ala. 639; Andrews v. McCoy, 8 Ala. 920; Fenouille v. Hamilton, 35 Ala. 319; Prentice v. Zane. 2 Gratt. 262; Davis v. Miller, 14 Gratt. 1; Brooks v. Whitson, 15 Miss. 513; Vallertien v. Howell, 5 Sneed, 441; VanWyck v. Norvell, 2 Humph. 192; Muller v. Stover, 48 Me. 163; Bramhall v. Beckett, 31 Me. 205; Johnson v. Barney, 1 Iowa, 531; Ryan v. Chew, 13 Iowa, 462; Trustees v. Hill, 12 Iowa, 462; Ruddick v. Lloyd, 15 Iowa, 441; Lee v. Smead, Met. (Ky.) 628; May v. Quimby, 3 Bush, 96; Smith v. Babcock, 2 W. & M. 246.

40 Manning v. McClure, 36 Ill. 490; Blanchard v. Stevens, 57 Mass. 162.

41 Billings v. Collins, 44 Me. 271.

42 Roberts v. Hall, 37 Conn. 203; Manning v. McClure. 36 Ill. 490.

and have no higher rights than the insolvent or assignor had.

If the negotiable paper is accommodation paper, there is an additional reason why a party who takes it for an antecedent debt, whether in payment or as collateral security, is a holder for value. The very object of accommodation paper is to enable the person who receives the accommodation to obtain credit by the negotiation thereof, and this may be done by applying it to a debt already existing, as well as by creating a new debt.13 ORLANDO F. BUMP.

ESTOPPEL BY CONDUCT-SCIENTER. Much confusion has arisen from the attempt to trace all estoppels by conduct to one principle; to analyze this principle into elements of such a nature that the estoppel will arise whenever they co-exist, and will not when any one of them is absent. This is impossible. The different classes of cases are not the result of one, but of several principles, similar but distinct. Brett, J., in Carr v. London & North Western Railway Co., L. R. 10 C. P. 307; s. c. 12 Moak, 364; Perley, C. J., in Horn v. Cole, 51 N. H. 287; s. c. 12 Am. R. 287. All have certain elements in common, but these do not suffice of themselves to create an estoppel. Each class has some essential element, which is not necessary to some one of the others. The common analysis is as follows: 1. There must have been a representation or a concealment of, or a failure to disclose, material facts. 2. The representation, etc., must have been made with a knowledge of the facts. 3. It must have been made with the intention that the other party should act upon it, or with the knowledge that he was about so to act, or under such circumstances that a reasonable man would have known that it would be

acted on. 4. The person to whom it was made must have been ignorant of the truth of the matter. 5. He must have taken some step which he otherwise would not have taken, to his injury. 6. He must have so acted, relying on the representation. It is stated by an eminent writer that all the foregoing elements must be present in order to produce an estoppel by conduct. Bigelow on Estoppel,437. But the same author, in speaking of a like rule in the law of deceit, says: "Like all general rules, this proposition needs both illustration and ex

43 Percival v. Frampton, 2 C. M. & R. 180; Kimbro v. Lytle, 10 Yerg. 412; Grandin v. Leroy, 2 Paige, 509; Bank v. Buck, 2 Paige, 166; Seneca County Bank v. Neas, 5 Denio, 329; Essex County Bank v. Russell, 29 N. Y. 673; Cole v. Saulpaugh, 48 Barb. 104; Montress v. Clark, 2 Sandf. 115; Appleton v. Donaldson, 3 Pa. 381; Lord v. Ocean Bank, 20 Pa. 384; Struthers v. Kendall, 41 Pa. 214; Bramhall v. Beckett, 21 Me. 305; Maitland v. Citizens' Nat. Bank, 40 Ind. 540. Vide McKinzie v. Branch Bank, 28 Ala. 606.

planation. Aside from the situations in which it is strictly true-and these are not many-it must in several particulars be qualified by rules of law quite as important as the main proposition itself." Bigelow on Fraud, 3.

When all the above elements co-exist, an estoppel arises; but it is believed that only the first, third, fourth and fifth are essential. Either the second or sixth may sometimes be wanting; and where either is absent, we will observe that some new element will enter into the case-either as an ndependent element or as an accession to one of the above.

In the common case of one standing by in silence when his property is being sold by a third person to another, all the elements are present except the last. The action is not taken in reliance on the silence. The one acting does not know that such silence is material. The other is estopped, not because he has induced action, but because, he has not prevented it-he has not spoken when he ought to have spoken. The peculiar elements in this case are two; the person estopped must know, (1) that the other is ignorant of his title, and (2) that he is about to act in such ignorance. In all cases the representation s made on the assumption that the one, to whom it is made, is ignorant of the truth; but where the estoppel rests on mere silence, there must be knowledge of such ignorance. If there is a positive representation, it in general suffices if it be made, either with the intention that another should act upon it, or with the knowledge that he is about so to act, or under such circumstances that a reasonable man would know that it would be acted on. No one, however, is under any obligation to exercise care or diligence to prevent another's being defrauded in a transaction to which he is not a party. In this class of cases a person is estopped, because he has not spoken when he ought to have spoken. The duty to speak rests upon the knowledge that another is about to act in ignorance of the truth. Thus, when the title has been duly recorded, it may fairly be presumed that subsequent purchasers have used the means pointed out by law, and acquired all the knowledge which it is important for them to have, or that they will do so. When, however, the owner is directly apprised of the ignorance of the buyer and of his purpose to act in such ignorance, he can not claim the benefit of this principle, because good faith then requires him to speak. Doe v. Oliver, 2 Sm. L. C. 740; Markham v. O'Connor, 52 Ga. 183; s. c. 21 Am. R. 249.

More difficulty arises when it is sought to dispense with the second of the above elements, the knowledge that the representation is false. On this point there is much confusion in the books. Thus it is frequently stated that an admission that has been acted on is conclusive, and perhaps on the same page we will find that the scienter must in all cases be proved. The first proposition is, of course, too general, and it is believed that the second is equally so. The frequency with which

the scienter is ignored in stating the doctrine of estoppel, is strong evidence of an instinctive recognition by the legal mind, that there are case in which it is not necessary. If ignorance is the result of gross negligence (Mayor v. Erhardt, 88 Ill. 452; 2 Southern L. R. (N. S.) 652), or if the facts are known, and the mistake is one of law, there is little difficulty in sustaining the estoppel. Lucas v. Hart, 5 Iowa, 415; Cook v. Finklee, 9 Mich. 131; Storrs v. Barker, 6 Johns. Ch. 166; s. c. 10 Am. Dec. 316.

Other cases may be divided into two classes, which will be found to contain three new elements-one common to the two classes, and one peculiar to each. There must in every case be a representation as distinguished from mere silence, and it must be made positively as of known faets. The distinctive element of the first class is that the representation must be of a fact peculiarly within the knowledge of the person making it, and not so within that of the other party; and of the second class, that it must be either expressly designed to influence the conduct of the other, or be accompanied by an assurance, express or implied, that it may be safely acted upon.

I. There must be a representation as distinguished from mere silence. It may be by word or act; but the act must be accompanied with an intention to produce an impression on the mind of another, or with the knowledge at the time that such an impression has been produced. Silence may suffice, "but then it must be silence coupled with some overt acquiesence." For an extreme case of "overt acquiesence," see Teasdale v. Teasdale, Sel. Ch. Ca. 59, cited 2 L. C. Eq. 29. The representation must be positive. If one merely states an opinion honestly entertained, the person addressed is put upon inquiry and relies on it at his peril.

II. The distinctive element of the first class of cases, in which the scienter is dispensed with, is that the fact misrepresented is peculiarly within the knowledge of the party estopped. In general, a person incurs no responsibility by a representation which he does not know to be false; but there are cases in which the probability of knowledge is so great that the courts will conclusively presume its existence without proof. When the facts are peculiarly within his own knowledge. one who is informed that his statements are to be acted on, can seldom honestly make a positive assertion that is not true, without being wanting in that degree of diligence and discretion which the law may justly require every man to exercise. The law may, therefore, presume knowledge in all such cases, and make that presumption conclusive. Under this rule it may happen, that one is held responsible who has been guilty of no fraud, and has not been negligent. But the innocent cannot suffer under this rule so often as the guilty would escape under its reverse; and every time a guilty man escaped, an innocent one would suffer.

It will often happen that neither fraud nor neg