Lorp JAMES OF HEREFORD. My Lords, I have entertained
considerable doubt as to the judgment that should be given in
this case; but after consideration I have come to the conclusion
that the action cannot be maintained, and that therefore the
appeal should be allowed. As it appears to me that my noble
and learned friend Lord Macnaghten has very correctly and
fully stated the facts of the case in his judgment, I do not
repeat them. The action is based upon two alleged grounds
of estoppel. As to one I have no doubt.

It may be accepted that on May 30 and 31, 1899, interviews
took place in Paris between Mr. Cavanagh, his solicitor, Mr.
Smith, Mr. Maugham, and Mr. G. Whitechurch, the managing
director of the defendant company. During these interviews
Mr. Whitechurch was told by Cavanagh or Smith that cer-
tified transfers of certain shares proposed to be transferred to
Cavanagh were in the hands of Mr. Maugham, who thought,
they werein order. On hearing this Mr. Whitechurch observed
that if the signature of the secretary was genuine they would
be in order. It should be observed that no inquiry from Mr.
Whitechurch appears to have been made in the interests or on
behalf of Cavanagh. The discussion related to the question
whether Mr. Whitechurch would require the original certi-

A. C. AND PRIVY COUNCIL.

ficates to be produced; and it was rather in respect of his own
interests that Mr. Whitechurch made the remark which is
relied upon as an estoppel. I think that in fact there was no
representation of a non-existent fact—at most only an opinion
was expressed, and certainly there was no intention to deceive
the plaintiff or to cause him to rely upon a supposed state of
facts which did not exist.

T also think that Mr. Whitechurch, when taking part in this
conversation, was not acting as the agent of the company, so as
to render it liable for misstatements of fact by him. It is true
that he was managing director of the company, and had very
extensive powers conferred upon him as such by art. 107 of the
articles of association; but these powers refer to the carrying
on the commercial business of the company, and would not
cover such a transaction as the transfer of shares. Under this
head of the case I think no estoppel is established.

But the second alleged estoppel presents a question more
difficult of solution than the one above dealt with. On
May 29, 1899, Wells, as secretary of the defendant company,
gave two '' certifications" of transfer, one '' coupon for 1100.
preference shares in the company's office, George Whitechurch,
Limited, Richard G. Wells, Secretary."' The second certifica-
tion was in the same form, and deals with 9250 ordinary shares.
Both "certifications '' were indorsed on transfers executed by
Raymond. '' Coupon'"' is identical in its meaning in the above
documents with " certificate."

At the time Wells wrote such certifications he knew they
were false statements. Raymond possessed no such shares,
and no certificates had been lodged in the office of the company.
Wells was acting fraudulently in collusion with Raymond, and
in no way for the benefit of the company. In determining the
liability of the company it is necessary to determine the extent
of Wells' agency. He was secretary of the company, and, as
said, it would be his duty to give "' certifications" of certificates
of shares being deposited in his hands. So far he would be
acting within his agency ; but if he acknowledges the receipt of
certificates which never were in his hands, he is doing that
which his principals never intended or authorized him to do,

A. C. 1902. 3 L

133

H. L. (E.)
1901

—o_~
GEORGE
WHITE-
CHURCH,
Lintrep
Vv.
CAVANAGH.

Lord James of
Hereford.

134

H. L. (E.)
1901

—~
GEORGE
WHITE-
CHURCH,
LIMITED

v.
CAVANAGH.

Lord James
of Hereford.

HOUSE OF LORDS [1902}

and which is, I think, an act. outside and beyond his agency,
either express or implied. I quite feel the force of the argu-
ment that the public who act upon these certifications have
to deal with an agent appointed by a company to transact its
business, and within his duty to give certifications. It is said,
How can persons receiving the certifications test the honesty of
the agent or the truth of his statements? I do not think they
can, and it must be that a risk is run, for the apparently truthful
statements may be false. But, on the other hand, can it be
reasonable that an agent who is empowered to acknowledge
the receipt of certain documents is to bind his principal
by fraudulently and criminally giving acknowledgments of
documents never in his hands ?

There is on the one hand a risk cast on the members of the
public who rely upon the honesty of the agents; -but how far
greater would be the risk of the principal if he were to be liable
for the frauds of the agent, which might be effected to an
unlimited extent ruinous to the principal? Itappears to me to
be impossible to hold the company bound by the act of Wells
without overruling the judgment in the case of Grant v.
Norway. (1) In that case the master of a vessel had authority
from the shipowner to give bills of lading for goods received on
board. The master fraudulently gave bills of lading for goods
not received by him. It was held, and the judgment has
since been acted on and approved of in your Lordships' House,
that the master, not having acted within his agency, the ship-

owner was not liable on the fictitious bills of lading. By this"

decision a great risk is thrown upon indorsees of bills of lading,
who may find their securities valueless through the fraud of
the masters of vessels, and this inconvenience was pressed in
the argument of the case, but without avail, and apparently
the commercial world has not found such inconvenience to be
so great as was suggested in argument.

I have only to add that the judgment now given must not be
supposed to extend to certificates which are made evidence of
title by the Act of 1862, and which are passed under the seal
of the company.

(1) 10 C. B. 665.

A.C. AND PRIVY COUNCIL.

I am of opinion that the appeal must prevail, and that the
judgments of the Courts below should be reversed with costs.

Lorp RoBERTSON (as read by Lord Davey). My Lords, the
case of the respondent is one of estoppel, and it is an essential
element in such cases (as is clearly expressed in the case of
Carr v. London and North Western Ry. Co. (1), cited by the
Master of the Rolls) that the person to whom the representa-
tion was made has suffered loss by acting upon it; or, to put it
in another way, has altered his position to his detriment by
acting on the representation. In my opinion, the respondent
has completely failed in this essential matter. This is not, be
it observed, merely a question of damages ; there is no estoppel,
unless the appellants now averring the truth about the shares
in question would (to use the words of James L.J. in Hx parte
Adamson (2)) '' work some wrong '' to the respondent.

Now this question (which I proceed to discuss) is, on the
facts, by no means a complicated one, although it occurs in a
very complicated case; and indeed its very simplicity seems to
have led to its receiving less attention than its controversial
importance demands. The respondent's case, put shortly, is
that because the appellants told him that he was getting a
good transfer, therefore he gave up the " opposition"' and the
'' saisie."' His case is not, and could not possibly be, that
because the appellants called the transfer good, whereas it was
bad, therefore he lost the shares said to be transferred. The
respondent lost the shares, not because of anything the
appellants said about them, but because his transferor had
them not to transfer.

What the respondent has to make out is that by dealing as
he did with the "opposition" and the "'saisie" he suffered
prejudice. Now, whether he did so or not depends on what
good the 'opposition "' and the "' saisie'' were doing to him,
which he lost by the way in which he was induced to deal with
them. In the Courts below, although the point was raised
sharply before Bigham J., it has got the go-by; as the case
stands, there is, in my opinion, no evidence of prejudice ; and,

(1) L. BR. 10 ©. P. 317. (2) (1878) 8 Ch. D. 817.
3 L2

135

H. L. (E.)
1901

—~
GEORGE
WHITE-
CHURCH,

LiMiTED
UR,
CAVANAGH.

136

H. L. (E)
1901

—_—o~
GEORGE
WHITE-
CHURCH,
LimntTep

Vv
CAVANAGH.

Lord Robertson.

HOUSE OF LORDS [1902]

on the contrary, it is perfectly plain that the cessation of the
Innox business was all that the " opposition " and the " saisie"
were adapted to procure, and that this would have done the
respondent harm and no good. Your Lordships doubtless
remember (and it is important to do so) that the '' opposition "
prevented those debtors of Innox who received notice from
paying to them, while the "' saisie" prevented Innox from dis-
posing of the goods in their hands, an officer being put in
possession. But by these precautions no preference was
obtained over other creditors; and this is a very material point
in the case. Now, when the shares were supposed tojhave been
transferred, what was done was that the "'opposition'' was
withdrawn simpliciter, but the "'saisie'' was only partially
withdrawn, so as to allow the dealing by the appellants with
such goods as the respondent sanctioned; and the man in
possession remained there to enforce the "'saisie" in other
respects. The practical result was that, with his grip main-
tained on the operations of Innox, the respondent allowed them
to trade to such an extent as he deemed fit. This being the
simple state of the facts, it is not surprising that no one has
sworn or said that the respondent, by relaxing the " saisie"'
and giving up the "opposition," lost money which he would
have got if he had retained them.

This matter was so dealt with at the trial that Bigham J.
does not distinguish between the "saisie" and the "' opposi-
tion," or in any way estimate the utility of either or both to
the respondent. Yet this was the essence of the respondent's
claim. As things stand, I think it has been proved that no
loss was caused to the respondent by acting as he did, and that
no wrong is now wrought him by the appellants averring the
truth as to the shares.

On this ground I am in favour 'of allowing the appeal; and
as in this view the plaintiff's case has really no merits, I am
indisposed to enter on the other questions which have been
argued.

As to these, I may say in a word that the case of representa-
tion by Whitechurch seems to me entirely to break down; but
that as regards the representation by the secretary, I have

— ——— ee

ee eee

A. C. AND PRIVY COUNCIL. 137

'grave doubts. It seems to me extremely doubtful abetke H. L. (E.)
Grant v. Norway (1) can be held, or has ever been held, to 1901

represent the general law, or to do more than determine the Gnonen
law about shipmasters and bills of lading; and whether, WW?"

assuming it to have the wider bearing, it is reconcilable with Lune
the doctrine of Lord Selborne in Houldsworth v. City of Camu
Glasgow Bank. (2) I find it extremely difficult on principle tora Robertson.
to hold that the scope of an agent's employment can be
limited to the right performance of his duties, or to say that
an agent within whose province it is truly to record a fact is
outside the scope of his duties when he falsely records it, when
the question of liability to be decided is whether a loss is
to be borne by the principal who placed him there, or by an
innocent third party who had no voice in selecting him.

Lorp BrampPTon (after stating the facts above set out).
At the trial it was contended for the respondent, upon
the authority of the case of Carr v. London and North
Western Ry. Co. (8), cited at length in the judgment of the
Court of Appeal, that the appellant company was by the
certification of the transfers signed by Wells, the secretary,
and by the language and conduct of Mr. Whitechurch, the
managing director, estopped from denying that Raymond was
the régistered holder of and entitled to transfer the shares.

I take it to be common knowledge of all intelligent men of\y
business that there is a wide and well-recognised difference
petween a certificate of shares under the seal of the company,
which, by s. 31 of the Companies Act of 1862, is made prima
facie evidence of the title of the person named in it to the
shares therein specified—see In re Bahia and San Francisco
Ry. Co. (4)—and a transfer certification such as that which
appears on the margin of the transfers in question: the latter
is not recognised at all by the Companies Acts, nor is. it even
mentioned in the articles of association, and it is useless as
evidence of the title of the transferor to the shares he proposes
to transfer. It is in fact merely a voucher under the hand

(1) 10 ©. B. 665. (8) °E ORIG CYP PS17.
(2) (1880) 5 App. Cas. 326. (4) (1868) L. R. 3 Q. B. 584.

138

H. L. (E.)
1901

—m~
GEORGE
WHITE-
CHURCH,

Lim1tTED
v.

CAVANAGH.

Lerd Brampton.

HOUSE OF LORDS [1902]

of the secretary, in the name of his company, that certificates
or other documents shewing, in his judgment, a prima facie
title in the transferor to such shares, have been lodged in the
office of the company; the object being to enable the trans-
feror to give to the transferee a reasonable assurance that he
has, or will have, the power to make a good title to the shares
when the necessity arises for him to do so. This necéssity
always arises when the company is called upon to register a
transfer.

When such a certification bears the genuine signature of
the secretary, it is commonly said to be "all right" or ''in
order," and the making of the contract for transfer proceeds,
but always subject to this—that, before the title of the trans-
feree can be completed by placing his name as owner on the
register, it is essential that the certificate of the transferor's
ownership of the shares to be transferred shall be left at the
office of the company with the transfer, in order that it may be
cancelled so far as relates to the transferred shares, and the
register corrected by substituting the name of the transferee
for that of the transferor; for until this is done the transferor
is to be deemed to remain the holder of the shares: see
articles of association of appellant company, Nos. 12, 27, 28,
29. The case of Bishop v. Balkis Consolidated Co. (1), if
rightly decided, as I am satisfied it was, seems to me to
dispose of this part of the case, and to establish beyond all
question that a transfer certification amounts to no warranty
or representation of title.

Of course, every purchaser of shares is entitled by himself or
his solicitor, before the final completion of his bargain, to
investigate, if he desires to do so, the title of his transferor,
and he is entitled to search for himself the register of share-
holders to see the share certificates or other documents relied
on, and to peruse the articles of association of the company,
just as a purchaser of real property may require his vendor to
verify his abstract of title; and if he omits to take any of the
means at his command to satisfy himself of his transferor's
title, he cannot reasonably complain that the company require

(1) 25 Q. B. D. 512.

A. C. AND PRIVY COUNCIL.

'proof of it before they alter their register or issue him new
certificates. Were it not to do so, most serious frauds would
be comparatively easy to commit. An inspection of the
register of shares in this case, or a request to see the coupon
mentioned in the certification, would have at once disclosed
_ the fact that Raymond had no shares, such as those specified,
to transfer.

In the present case the appellant company dispute their
liability, so far as it is based upon Wells' conduct, upon several
grounds: (1.) Upon the ground that the certifications were
not made by him in the ordinary course of his duty to the
company. (2.) That he signed the certifications fraudulently
and contrary to his duty. (8.) Because, even if it was so made
as to constitute it the certificate of the company, it does not
amount to such a representation as alleged in the claim.
(4.) That if it amounts to such a representation it is ultra
vires. (5.) That it was not a representation made to Cavanagh
or his solicitor, nor with any intention to induce them to act
in any particular way, but was simply made for Raymond to
use as he pleased, without knowledge of or inquiry as to the
purposes for which he intended to use it.

I entirely agree in the views expressed by Lord Macnaghten
as to the limited authority of such a secretary as Wells.

I do not intend to say that it was no part of the duty of
Wells on occasions when a certificated transfer was required
for shares in the appellant company to exercise an honest dis-
cretion to grant it, and to certify to the truth as he knew or
believed it to be, and if in framing such a certificate he by
mere negligence made an erroneous statement, causing injury
to the person to whom it was handed, that he might act upon
the faith of it, I do not say that an action might not be
sustained against the company, his employers, to recover such
damages as might be occasioned by such negligence. But the
charge made against Wells was in no sense one of negligence,
but one of deliberate fraud, utterly unconnected with the course
of his duty as secretary. He simply lent himself to Raymond,
in whose service he still was as clerk, and became a mere tool
in his hands. Raymond in arranging with Cavanagh to give

139

H. L. (E.)
1901

—~
GEORGE
WHITE-
CHURCH,
LIMITED
OP
CAVANAGH.

Lord Brampton.

140

H. L. (E.)
1901

—_m
GEORGE
WHITE-
CHURCH,
Lim1TeD

%
CAVANAGH.

Lord Brampton.

HOUSE OF LORDS ' 1902)

him 10,350 shares '' to be represented by certificated transfers ''
knew that he did not possess one single share of those he
intended to include in his'transfer, and that he could only even
colourably fulfill his agreement and get rid of the ''opposition"'
by handing false transfer certificates to Cavanagh. These he ~
could only obtain by the assistance of Wells, who made them
knowing that he was uttering deliberate falsehoods, without
even a semblance of excuse. Having done so, he allowed
Raymond to take them away, not knowing or even inquiring
for what purpose they were to be used.

The jury rightly, as I think, found Wells' action to be
fraudulent, but they found also that it was committed for the
benefit of the company as well as for Raymond. How they
could have arrived at such a conclusion passes my understand-
ing; there was not, in my opinion, a scintilla of evidence to
support it.

They also found that it was in the ordinary course of Wells'
business, as secretary, to give certificates of this character.
That may have been so on occasions when he honestly believed
the facts certified to be true, and when he was dealing with
persons in the ordinary course of a business transaction ; but
this was no business transaction at all, nor was it intended to
be. Wells was not even colourably discharging a duty. The
facts I have stated stamp both Wells and Raymond to have
been a pair of fraudulent knaves acting without authority and
in disregard of duty. In my opinion the appellant company
is not responsible for that fraud, and to argue that such
certificates so prepared should operate to create estoppels
against the company, preventing it from asserting and proving
the truth, requires some courage.

I am content to adopt in its integrity the judgment of
Willes J. in Barwick v. English Joint Stock Banking Co. (1)
defining the liability of a master for the wrongful acts of his
servant: "'The master is liable for every such wrong of his
servant or agent as is committed in the course of his service
and for the master's benefit'"' because although the master has
not authorized the particular act "he has put the agent in his

(1) L. R. 2 Ex. 259,

A. C. 'AND PRIVY COUNCIL.

place to do that class of acts, and he must be answerable for
the manner in which that agent has conducted himself in
doing the business which it was the act of his master to place
him in." This is very forcibly illustrated by Limpus v. General
Ommbus Co. (1), where the driver was actually doing the work
he was employed to do, but was doing it in a wrongful manner.
The Court of Appeal in British Mutual Banking Co. v. Charn-
wood Forest Ry. Co. (2) defines, I think, accurately when a
master may repudiate the wrongful act of a servant fraudulently
committed. Bowen L.J. commences his considered judgment
by saying that, 'except in the overruled case of Swift v.
Winterbotham (3)," he is 'aware of no precedent for holding
that a principal is liable in an action of deceit for the unautho-
rized and fraudulent act of a servant or agent committed, not
for the general or special benefit of the principal, but for the
servant's own private ends." I think, for the reasons and upon
the authorities I have cited, that if this case rested solely upon
the transfer certificate, signed in the name of the company by
Wells, the misconduct I have discussed would afford the com-
pany a complete answer to the action so far as it is based on
his actions. .

But as I have yet to deal with other matters beyond those
arising out of Wells' misconduct, I think it will be convenient
now to call your Lordships' attention to the specific claim
made against the appellant company as it is set forth in para-
graph 6 of the '' points of claim,"' to which I think the respond-
ent should be strictly confined. This claim is thus stated:
'In consequence of the representations of the defend-

wilful misrepresentations

ant company to the plaintiff, that the said Anthony Raymond
was the registered holder of and entitled to transfer the shares
in the defendant company specified in the writ, the plaintiff
accepted from the said Anthony Raymond transfers, certificated
by the company, of the said shares to himself . . . . as security
for the said debt, and withdrew the ' opposition.'"'

'I will assume for the moment that Wells was guilty of no

(1) 1H. & C. 526. (2) 18 Q. B. D. 714.
(3) (1873) L. R. 8 Q. B. 244.

141

H. L. (E.)
1901
GEORGE
WHITE-

CHURCH,
Luttep

Vv
CAVANAGH.

Lord Brampton.

142

H. L. (E.)
1901

GEORGE
WHITE-
CHURCH,
LIMITED
OP
| CAVANAGH.

Lord{Brampton.

_ HOUSE OF LORDS [1902]

such misconduct as is alleged against him, and even that he
intended to act for the benefit of the company. This directly
raises the question: What is the true construction of the
language of the transfer certificate? For Wells said nothing
and did nothing except issue it, and unless that amounted to
such a representation as is relied on by the pleadings the whole
case fails. As to this it seems to me that it is only necessary
to refer back to what I have already said as to the meaning
and object of such certifications. If I am correct in what I
then said, it follows that the certification did not amount to
a positive representation or assertion of title in Raymond.
Nothing short of that would suffice to support the estoppel
claimed. I think, therefore, that upon this ground also the
appellant company is entitled to the judgment of this House.
The third ground of defence is that, even if, contrary to the
view I have taken, the certification could be held to amount
to such a representation, it was made ultra vires; for neither
Whitechurch, the manager, nor Wells, the secretary, had even
a semblance of authority to issue a document of title equivalent
to a share certificate. A certificate of shares is, by s. 31 of
the Companies Act, 1862, made prima facie evidence of the
title of the person named to such shares as are comprised
within it; but such a certificate can only be made under the
seal of the company (articles of association, No. 12), and the
seal can only be affixed by order of a resolution of the board,
and in the presence of a director and of the secretary, who are
both to sign the instrument to which the seal is so affixed in
their presence (art. 112). It is impossible to suppose that a
managing director or a secretary could by his own signature
and the use, by means of the rubber stamp, of the company's
name, dispense with the order of the board, and the seal and
the requisite attestations, and create an instrument which
practically should have the same effect, and should estop the
company from disproving a title which did not exist, and
which they had no authority to create by giving a new and
different interpretation to the language of an instrument than
that which it had already acquired amongst men of business
accustomed to deal with instruments of that class. Nor can

|
|
.
|

A. C. AND PRIVY COUNCIL.

'it be that any secretary has power to give or a manager to
sanction a certificate which could have the effect of abrogating
art. 27 of the articles of association, requiring the transfer,
accompanied by the certificates of shares to be transferred, to
be left at the offices of the company.

I may here observe that the great power given to the
managing director by art. 107 is conferred only in relation to
- the commercial business of the company; and I am at a loss
to see how the sale and purchase or the transfer and acceptance
of shares can be treated as any part of the commercial business
of a company established for carrying on the business of leather
merchants.

I will now deal with that which Mr. Whitechurch did and
sald touching the questions at issue.

The sole object of the interviews between Cavanagh and his
solicitor Smith and G. Whitechurch, of May 30 and 31, was
to procure his signature as managing director of his company
to the few words of acquiescence to the agreement, so far as
it affected his company. This acquiescence he was willing to
give, if satisfied that the arrangement made was bona fide and
the proceeding was in due order; but his company was under
no obligation, and he might have refused to acquiesce, if he
had thought fit, without assigning any reason at all.

At the first of these interviews the certified transfers, being
in Mr. Maugham's possession, were not shewn to him, but
he was told by Cavanagh or Smith that Maugham had two
certified transfers of the shares proposed to be handed to
Cavanagh, and had expressed an opinion that they were "in
order." On this Mr. G. Whitechurch, having no reason to
suspect that anything was wrong, with perfect truth and
honesty made the remark that they would be "in order" if
he was satisfied that the signatures to them were the genuine
signatures of the secretary. This seems to have been the
opinion of Mr. Smith himself. The special question put to
Mr. Whitechurch by Mr. Smith was, whether he required the
original certificates to be annexed ; and this inquiry was accom-
panied by what appears to me to be a threat that if he required
more the appointment for the next day would have to go off—

143

H. L. (B)
1901

—m~
GEORGE
WHITE-
CHURCH,
LIMITED

VY
CAVANAGH.

Lord Brampton.

144

H. L. (E.)

1901

ew
GEORGE
WHITE-
CHURCH,
LIMITED

v
CAVANAGH.

HOUSE OF LORDS [1902]

obviously for the purpose of putting pressure upon him by
intimating that the responsibility of any postponement would
rest upon him.

There was no semblance of inquiry by Cavanagh or Smith
of Mr. G. Whitechurch whether Cavanagh might safely, or
with prudence, accept the transfers. Indeed, Cavanagh had,

Lord Brampton 10 fact, got in such certified transfers all that he had bargained

for in the agreement.

The reply of Mr. G. Whitechurch, before he had seen the
documents, that he should be quite satisfied if the signature
to the certification was Wells' signature, cannot fairly be con-
strued to convey any more than this: that he would not, if
satisfied on that point, be an obstacle to the completion on
the following day as appointed. The same observations apply
to his conduct and words on that day when he, having seen
the certificates and recognised the signature of Wells, expressed
himself satisfied and signed the acquiescence. His expression
of satisfaction that the '' opposition' was about to be removed,
knowing how much it was desired, and how vitally important
it was to the Innox Company and Raymond, was a very
natural one. Believing, as he undoubtedly did, that all was
in order, and having no reason to suspect a fraud, his con-
duct and language were just what one would have expected
from him.

If, on the other hand, at that time Mr. Smith intended his
question to convey, what it certainly did not express, namely,
a doubt whether the certified transfers were in that case of
equal value with certificates of shares, I can only say I marvel

. that he should have felt justified in inviting Mr. G. White-

church to express an opinion without telling him that Raymond
had so recently as the afternoon of May 29 promised to give
him the certificates of the 10,350 shares that he might have
them ready to produce at the meeting to execute the agree-
ment, and that he had broken his promise, and had neither
handed over nor sent a certificate for a single share, knowing,
as he admitted he did, the wide difference between share
certificates and transfer certifications. If this had been told to
Mr. G. Whitechurch he would have had good reason to suspect

A. C. AND PRIVY COUNCIL.

'something was wrong, and would, no doubt, have suggested
further inquiry. But, believing all was right and in order, he
had no reason for interfering. The finding of the jury that
Whitechurch allowed Cavanagh to think it was all right in
order to induce him to withdraw the '' opposition"? was wholly
unwarranted by the evidence, if it meant more than that he
did not interfere to prevent him from acting as he was advised
by his solicitor because he saw no reason to do so. I do not
find in all this evidence anything to support the claim to the
estoppel contended for: far from it. To support an estoppel
the evidence ought to be clear and unambiguous, as was stated
by Lindley L.J., now Lord Lindley, in Low v. Bowverie (1), in
which many previous cases on the subject were carefully
reviewed. Bowen LJ. said that "the language upon which
an estoppel is founded must be precise and unambiguous.
That does not necessarily mean that the language must be
such that it cannot possibly be open to different constructions,
but that it must be such as will be reasonably understood in a
particular sense by the person to whom it is addressed''; and in
deciding the case before him against the then plaintiff he said :
"T think his" (the defendant's) '' language would be reason-
ably understood as conveying an intimation of the state of his
belief without an assertion that the fact was so apart from the
limitation of his own knowledge.' To the same effect was the
judgment of Kay L.J. To this I would add that in my judg-
ment no representations can be relied on as estoppels if they
have been induced by the concealment of any material fact on
the part of those who seek to use them as such; and if the
person to whom they are made knows something which, if
revealed, would have been calculated to influence the other to
hesitate or seek for further information before speaking posi-
tively, and that something has been withheld, the representation
ought not to be treated as an estoppel. Mr. Whitechurch had
no reason to doubt, and therefore believed the certificates to
be genuine and true when he recognised Wells' signature.
Beyond that he knew nothing and suspected nothing. When,
therefore, he said they were in order, or appeared in order, he
(1) [1891] 3 Ch. 101.

145

H. L. (E.)
1901

—m~
GEORGE
WHITE-
CHURCH,
LIMITED
®%.
CAVANAGH.

{Lord Brampton.

146

H. L. (E.)
1901

—_—o~
GEORGE
WHITE-
CHURCH,
LIMITED
v.
CAVANAGH.

Lord Brampton.

HOUSE OF LORDS [1902]

ought not to be considered as pledging himself to anything
beyond this: that according to ordinary usage and practice the
certificate was in due form and order, and that he was satisfied
and content to acquiesce as he did.

In my opinion it is clear that the failure of Raymond to
produce or hand the certificates to Smith ought to have been
quite sufficient to put that astute solicitor on his guard, and
had he used the most ordinary precaution, either by searching
the register or demanding an inspection of the coupon, or
insisted upon Raymond shewing him the certificates, the fraud
must have been instantly discovered.

I think this appeal ought to be allowed, and that the judg-
ments of the Court of Appeal and of Bigham J. should be
reversed, and judgment entered for the appellant company
with costs.

Order of the Court of Appeal and judgment of
Bigham J. reversed and judgment entered for
the appellants: The respondent to pay to the
appellants the .costs both here and below :
Cause remitted to the King's Bench Dwision.

Lords' Journals, August 5, 1901.

Lorp JAMES OF HEREFORD. My Lords, I have entertained considerable doubt as to the judgment that should be given in this case; but after consideration I have come to the conclusion that the action cannot be maintained, and that therefore the appeal should be allowed. As it appears to me that my noble and learned friend Lord Macnaghten has very correctly and fully stated the facts of the case in his judgment, I do not repeat them. The action is based upon two alleged grounds of estoppel. As to one I have no doubt. It may be accepted that on May 30 and 31, 1899, interviews took place in Paris between Mr. Cavanagh, his solicitor, Mr. Smith, Mr. Maugham, and Mr. G. Whitechurch, the managing director of the defendant company. During these interviews Mr. Whitechurch was told by Cavanagh or Smith that cer- tified transfers of certain shares proposed to be transferred to Cavanagh were in the hands of Mr. Maugham, who thought, they werein order. On hearing this Mr. Whitechurch observed that if the signature of the secretary was genuine they would be in order. It should be observed that no inquiry from Mr. Whitechurch appears to have been made in the interests or on behalf of Cavanagh. The discussion related to the question whether Mr. Whitechurch would require the original certi- A. C. AND PRIVY COUNCIL. ficates to be produced; and it was rather in respect of his own interests that Mr. Whitechurch made the remark which is relied upon as an estoppel. I think that in fact there was no representation of a non-existent fact—at most only an opinion was expressed, and certainly there was no intention to deceive the plaintiff or to cause him to rely upon a supposed state of facts which did not exist. T also think that Mr. Whitechurch, when taking part in this conversation, was not acting as the agent of the company, so as to render it liable for misstatements of fact by him. It is true that he was managing director of the company, and had very extensive powers conferred upon him as such by art. 107 of the articles of association; but these powers refer to the carrying on the commercial business of the company, and would not cover such a transaction as the transfer of shares. Under this head of the case I think no estoppel is established. But the second alleged estoppel presents a question more difficult of solution than the one above dealt with. On May 29, 1899, Wells, as secretary of the defendant company, gave two '' certifications" of transfer, one '' coupon for 1100. preference shares in the company's office, George Whitechurch, Limited, Richard G. Wells, Secretary."' The second certifica- tion was in the same form, and deals with 9250 ordinary shares. Both "certifications '' were indorsed on transfers executed by Raymond. '' Coupon'"' is identical in its meaning in the above documents with " certificate." At the time Wells wrote such certifications he knew they were false statements. Raymond possessed no such shares, and no certificates had been lodged in the office of the company. Wells was acting fraudulently in collusion with Raymond, and in no way for the benefit of the company. In determining the liability of the company it is necessary to determine the extent of Wells' agency. He was secretary of the company, and, as said, it would be his duty to give "' certifications" of certificates of shares being deposited in his hands. So far he would be acting within his agency ; but if he acknowledges the receipt of certificates which never were in his hands, he is doing that which his principals never intended or authorized him to do, A. C. 1902. 3 L 133 H. L. (E.) 1901 —o_~ GEORGE WHITE- CHURCH, Lintrep Vv. CAVANAGH. Lord James of Hereford. 134 H. L. (E.) 1901 —~ GEORGE WHITE- CHURCH, LIMITED v. CAVANAGH. Lord James of Hereford. HOUSE OF LORDS [1902} and which is, I think, an act. outside and beyond his agency, either express or implied. I quite feel the force of the argu- ment that the public who act upon these certifications have to deal with an agent appointed by a company to transact its business, and within his duty to give certifications. It is said, How can persons receiving the certifications test the honesty of the agent or the truth of his statements? I do not think they can, and it must be that a risk is run, for the apparently truthful statements may be false. But, on the other hand, can it be reasonable that an agent who is empowered to acknowledge the receipt of certain documents is to bind his principal by fraudulently and criminally giving acknowledgments of documents never in his hands ? There is on the one hand a risk cast on the members of the public who rely upon the honesty of the agents; -but how far greater would be the risk of the principal if he were to be liable for the frauds of the agent, which might be effected to an unlimited extent ruinous to the principal? Itappears to me to be impossible to hold the company bound by the act of Wells without overruling the judgment in the case of Grant v. Norway. (1) In that case the master of a vessel had authority from the shipowner to give bills of lading for goods received on board. The master fraudulently gave bills of lading for goods not received by him. It was held, and the judgment has since been acted on and approved of in your Lordships' House, that the master, not having acted within his agency, the ship- owner was not liable on the fictitious bills of lading. By this" decision a great risk is thrown upon indorsees of bills of lading, who may find their securities valueless through the fraud of the masters of vessels, and this inconvenience was pressed in the argument of the case, but without avail, and apparently the commercial world has not found such inconvenience to be so great as was suggested in argument. I have only to add that the judgment now given must not be supposed to extend to certificates which are made evidence of title by the Act of 1862, and which are passed under the seal of the company. (1) 10 C. B. 665. A.C. AND PRIVY COUNCIL. I am of opinion that the appeal must prevail, and that the judgments of the Courts below should be reversed with costs. Lorp RoBERTSON (as read by Lord Davey). My Lords, the case of the respondent is one of estoppel, and it is an essential element in such cases (as is clearly expressed in the case of Carr v. London and North Western Ry. Co. (1), cited by the Master of the Rolls) that the person to whom the representa- tion was made has suffered loss by acting upon it; or, to put it in another way, has altered his position to his detriment by acting on the representation. In my opinion, the respondent has completely failed in this essential matter. This is not, be it observed, merely a question of damages ; there is no estoppel, unless the appellants now averring the truth about the shares in question would (to use the words of James L.J. in Hx parte Adamson (2)) '' work some wrong '' to the respondent. Now this question (which I proceed to discuss) is, on the facts, by no means a complicated one, although it occurs in a very complicated case; and indeed its very simplicity seems to have led to its receiving less attention than its controversial importance demands. The respondent's case, put shortly, is that because the appellants told him that he was getting a good transfer, therefore he gave up the " opposition"' and the '' saisie."' His case is not, and could not possibly be, that because the appellants called the transfer good, whereas it was bad, therefore he lost the shares said to be transferred. The respondent lost the shares, not because of anything the appellants said about them, but because his transferor had them not to transfer. What the respondent has to make out is that by dealing as he did with the "opposition" and the "'saisie" he suffered prejudice. Now, whether he did so or not depends on what good the 'opposition "' and the "' saisie'' were doing to him, which he lost by the way in which he was induced to deal with them. In the Courts below, although the point was raised sharply before Bigham J., it has got the go-by; as the case stands, there is, in my opinion, no evidence of prejudice ; and, (1) L. BR. 10 ©. P. 317. (2) (1878) 8 Ch. D. 817. 3 L2 135 H. L. (E.) 1901 —~ GEORGE WHITE- CHURCH, LiMiTED UR, CAVANAGH. 136 H. L. (E) 1901 —_—o~ GEORGE WHITE- CHURCH, LimntTep Vv CAVANAGH. Lord Robertson. HOUSE OF LORDS [1902] on the contrary, it is perfectly plain that the cessation of the Innox business was all that the " opposition " and the " saisie" were adapted to procure, and that this would have done the respondent harm and no good. Your Lordships doubtless remember (and it is important to do so) that the '' opposition " prevented those debtors of Innox who received notice from paying to them, while the "' saisie" prevented Innox from dis- posing of the goods in their hands, an officer being put in possession. But by these precautions no preference was obtained over other creditors; and this is a very material point in the case. Now, when the shares were supposed tojhave been transferred, what was done was that the "'opposition'' was withdrawn simpliciter, but the "'saisie'' was only partially withdrawn, so as to allow the dealing by the appellants with such goods as the respondent sanctioned; and the man in possession remained there to enforce the "'saisie" in other respects. The practical result was that, with his grip main- tained on the operations of Innox, the respondent allowed them to trade to such an extent as he deemed fit. This being the simple state of the facts, it is not surprising that no one has sworn or said that the respondent, by relaxing the " saisie"' and giving up the "opposition," lost money which he would have got if he had retained them. This matter was so dealt with at the trial that Bigham J. does not distinguish between the "saisie" and the "' opposi- tion," or in any way estimate the utility of either or both to the respondent. Yet this was the essence of the respondent's claim. As things stand, I think it has been proved that no loss was caused to the respondent by acting as he did, and that no wrong is now wrought him by the appellants averring the truth as to the shares. On this ground I am in favour 'of allowing the appeal; and as in this view the plaintiff's case has really no merits, I am indisposed to enter on the other questions which have been argued. As to these, I may say in a word that the case of representa- tion by Whitechurch seems to me entirely to break down; but that as regards the representation by the secretary, I have — ——— ee ee eee A. C. AND PRIVY COUNCIL. 137 'grave doubts. It seems to me extremely doubtful abetke H. L. (E.) Grant v. Norway (1) can be held, or has ever been held, to 1901 represent the general law, or to do more than determine the Gnonen law about shipmasters and bills of lading; and whether, WW?" assuming it to have the wider bearing, it is reconcilable with Lune the doctrine of Lord Selborne in Houldsworth v. City of Camu Glasgow Bank. (2) I find it extremely difficult on principle tora Robertson. to hold that the scope of an agent's employment can be limited to the right performance of his duties, or to say that an agent within whose province it is truly to record a fact is outside the scope of his duties when he falsely records it, when the question of liability to be decided is whether a loss is to be borne by the principal who placed him there, or by an innocent third party who had no voice in selecting him. Lorp BrampPTon (after stating the facts above set out). At the trial it was contended for the respondent, upon the authority of the case of Carr v. London and North Western Ry. Co. (8), cited at length in the judgment of the Court of Appeal, that the appellant company was by the certification of the transfers signed by Wells, the secretary, and by the language and conduct of Mr. Whitechurch, the managing director, estopped from denying that Raymond was the régistered holder of and entitled to transfer the shares. I take it to be common knowledge of all intelligent men of\y business that there is a wide and well-recognised difference petween a certificate of shares under the seal of the company, which, by s. 31 of the Companies Act of 1862, is made prima facie evidence of the title of the person named in it to the shares therein specified—see In re Bahia and San Francisco Ry. Co. (4)—and a transfer certification such as that which appears on the margin of the transfers in question: the latter is not recognised at all by the Companies Acts, nor is. it even mentioned in the articles of association, and it is useless as evidence of the title of the transferor to the shares he proposes to transfer. It is in fact merely a voucher under the hand (1) 10 ©. B. 665. (8) °E ORIG CYP PS17. (2) (1880) 5 App. Cas. 326. (4) (1868) L. R. 3 Q. B. 584. 138 H. L. (E.) 1901 —m~ GEORGE WHITE- CHURCH, Lim1tTED v. CAVANAGH. Lerd Brampton. HOUSE OF LORDS [1902] of the secretary, in the name of his company, that certificates or other documents shewing, in his judgment, a prima facie title in the transferor to such shares, have been lodged in the office of the company; the object being to enable the trans- feror to give to the transferee a reasonable assurance that he has, or will have, the power to make a good title to the shares when the necessity arises for him to do so. This necéssity always arises when the company is called upon to register a transfer. When such a certification bears the genuine signature of the secretary, it is commonly said to be "all right" or ''in order," and the making of the contract for transfer proceeds, but always subject to this—that, before the title of the trans- feree can be completed by placing his name as owner on the register, it is essential that the certificate of the transferor's ownership of the shares to be transferred shall be left at the office of the company with the transfer, in order that it may be cancelled so far as relates to the transferred shares, and the register corrected by substituting the name of the transferee for that of the transferor; for until this is done the transferor is to be deemed to remain the holder of the shares: see articles of association of appellant company, Nos. 12, 27, 28, 29. The case of Bishop v. Balkis Consolidated Co. (1), if rightly decided, as I am satisfied it was, seems to me to dispose of this part of the case, and to establish beyond all question that a transfer certification amounts to no warranty or representation of title. Of course, every purchaser of shares is entitled by himself or his solicitor, before the final completion of his bargain, to investigate, if he desires to do so, the title of his transferor, and he is entitled to search for himself the register of share- holders to see the share certificates or other documents relied on, and to peruse the articles of association of the company, just as a purchaser of real property may require his vendor to verify his abstract of title; and if he omits to take any of the means at his command to satisfy himself of his transferor's title, he cannot reasonably complain that the company require (1) 25 Q. B. D. 512. A. C. AND PRIVY COUNCIL. 'proof of it before they alter their register or issue him new certificates. Were it not to do so, most serious frauds would be comparatively easy to commit. An inspection of the register of shares in this case, or a request to see the coupon mentioned in the certification, would have at once disclosed _ the fact that Raymond had no shares, such as those specified, to transfer. In the present case the appellant company dispute their liability, so far as it is based upon Wells' conduct, upon several grounds: (1.) Upon the ground that the certifications were not made by him in the ordinary course of his duty to the company. (2.) That he signed the certifications fraudulently and contrary to his duty. (8.) Because, even if it was so made as to constitute it the certificate of the company, it does not amount to such a representation as alleged in the claim. (4.) That if it amounts to such a representation it is ultra vires. (5.) That it was not a representation made to Cavanagh or his solicitor, nor with any intention to induce them to act in any particular way, but was simply made for Raymond to use as he pleased, without knowledge of or inquiry as to the purposes for which he intended to use it. I entirely agree in the views expressed by Lord Macnaghten as to the limited authority of such a secretary as Wells. I do not intend to say that it was no part of the duty of Wells on occasions when a certificated transfer was required for shares in the appellant company to exercise an honest dis- cretion to grant it, and to certify to the truth as he knew or believed it to be, and if in framing such a certificate he by mere negligence made an erroneous statement, causing injury to the person to whom it was handed, that he might act upon the faith of it, I do not say that an action might not be sustained against the company, his employers, to recover such damages as might be occasioned by such negligence. But the charge made against Wells was in no sense one of negligence, but one of deliberate fraud, utterly unconnected with the course of his duty as secretary. He simply lent himself to Raymond, in whose service he still was as clerk, and became a mere tool in his hands. Raymond in arranging with Cavanagh to give 139 H. L. (E.) 1901 —~ GEORGE WHITE- CHURCH, LIMITED OP CAVANAGH. Lord Brampton. 140 H. L. (E.) 1901 —_m GEORGE WHITE- CHURCH, Lim1TeD % CAVANAGH. Lord Brampton. HOUSE OF LORDS ' 1902) him 10,350 shares '' to be represented by certificated transfers '' knew that he did not possess one single share of those he intended to include in his'transfer, and that he could only even colourably fulfill his agreement and get rid of the ''opposition"' by handing false transfer certificates to Cavanagh. These he ~ could only obtain by the assistance of Wells, who made them knowing that he was uttering deliberate falsehoods, without even a semblance of excuse. Having done so, he allowed Raymond to take them away, not knowing or even inquiring for what purpose they were to be used. The jury rightly, as I think, found Wells' action to be fraudulent, but they found also that it was committed for the benefit of the company as well as for Raymond. How they could have arrived at such a conclusion passes my understand- ing; there was not, in my opinion, a scintilla of evidence to support it. They also found that it was in the ordinary course of Wells' business, as secretary, to give certificates of this character. That may have been so on occasions when he honestly believed the facts certified to be true, and when he was dealing with persons in the ordinary course of a business transaction ; but this was no business transaction at all, nor was it intended to be. Wells was not even colourably discharging a duty. The facts I have stated stamp both Wells and Raymond to have been a pair of fraudulent knaves acting without authority and in disregard of duty. In my opinion the appellant company is not responsible for that fraud, and to argue that such certificates so prepared should operate to create estoppels against the company, preventing it from asserting and proving the truth, requires some courage. I am content to adopt in its integrity the judgment of Willes J. in Barwick v. English Joint Stock Banking Co. (1) defining the liability of a master for the wrongful acts of his servant: "'The master is liable for every such wrong of his servant or agent as is committed in the course of his service and for the master's benefit'"' because although the master has not authorized the particular act "he has put the agent in his (1) L. R. 2 Ex. 259, A. C. 'AND PRIVY COUNCIL. place to do that class of acts, and he must be answerable for the manner in which that agent has conducted himself in doing the business which it was the act of his master to place him in." This is very forcibly illustrated by Limpus v. General Ommbus Co. (1), where the driver was actually doing the work he was employed to do, but was doing it in a wrongful manner. The Court of Appeal in British Mutual Banking Co. v. Charn- wood Forest Ry. Co. (2) defines, I think, accurately when a master may repudiate the wrongful act of a servant fraudulently committed. Bowen L.J. commences his considered judgment by saying that, 'except in the overruled case of Swift v. Winterbotham (3)," he is 'aware of no precedent for holding that a principal is liable in an action of deceit for the unautho- rized and fraudulent act of a servant or agent committed, not for the general or special benefit of the principal, but for the servant's own private ends." I think, for the reasons and upon the authorities I have cited, that if this case rested solely upon the transfer certificate, signed in the name of the company by Wells, the misconduct I have discussed would afford the com- pany a complete answer to the action so far as it is based on his actions. . But as I have yet to deal with other matters beyond those arising out of Wells' misconduct, I think it will be convenient now to call your Lordships' attention to the specific claim made against the appellant company as it is set forth in para- graph 6 of the '' points of claim,"' to which I think the respond- ent should be strictly confined. This claim is thus stated: 'In consequence of the representations of the defend- wilful misrepresentations ant company to the plaintiff, that the said Anthony Raymond was the registered holder of and entitled to transfer the shares in the defendant company specified in the writ, the plaintiff accepted from the said Anthony Raymond transfers, certificated by the company, of the said shares to himself . . . . as security for the said debt, and withdrew the ' opposition.'"' 'I will assume for the moment that Wells was guilty of no (1) 1H. & C. 526. (2) 18 Q. B. D. 714. (3) (1873) L. R. 8 Q. B. 244. 141 H. L. (E.) 1901 GEORGE WHITE- CHURCH, Luttep Vv CAVANAGH. Lord Brampton. 142 H. L. (E.) 1901 GEORGE WHITE- CHURCH, LIMITED OP | CAVANAGH. Lord{Brampton. _ HOUSE OF LORDS [1902] such misconduct as is alleged against him, and even that he intended to act for the benefit of the company. This directly raises the question: What is the true construction of the language of the transfer certificate? For Wells said nothing and did nothing except issue it, and unless that amounted to such a representation as is relied on by the pleadings the whole case fails. As to this it seems to me that it is only necessary to refer back to what I have already said as to the meaning and object of such certifications. If I am correct in what I then said, it follows that the certification did not amount to a positive representation or assertion of title in Raymond. Nothing short of that would suffice to support the estoppel claimed. I think, therefore, that upon this ground also the appellant company is entitled to the judgment of this House. The third ground of defence is that, even if, contrary to the view I have taken, the certification could be held to amount to such a representation, it was made ultra vires; for neither Whitechurch, the manager, nor Wells, the secretary, had even a semblance of authority to issue a document of title equivalent to a share certificate. A certificate of shares is, by s. 31 of the Companies Act, 1862, made prima facie evidence of the title of the person named to such shares as are comprised within it; but such a certificate can only be made under the seal of the company (articles of association, No. 12), and the seal can only be affixed by order of a resolution of the board, and in the presence of a director and of the secretary, who are both to sign the instrument to which the seal is so affixed in their presence (art. 112). It is impossible to suppose that a managing director or a secretary could by his own signature and the use, by means of the rubber stamp, of the company's name, dispense with the order of the board, and the seal and the requisite attestations, and create an instrument which practically should have the same effect, and should estop the company from disproving a title which did not exist, and which they had no authority to create by giving a new and different interpretation to the language of an instrument than that which it had already acquired amongst men of business accustomed to deal with instruments of that class. Nor can | | . | A. C. AND PRIVY COUNCIL. 'it be that any secretary has power to give or a manager to sanction a certificate which could have the effect of abrogating art. 27 of the articles of association, requiring the transfer, accompanied by the certificates of shares to be transferred, to be left at the offices of the company. I may here observe that the great power given to the managing director by art. 107 is conferred only in relation to - the commercial business of the company; and I am at a loss to see how the sale and purchase or the transfer and acceptance of shares can be treated as any part of the commercial business of a company established for carrying on the business of leather merchants. I will now deal with that which Mr. Whitechurch did and sald touching the questions at issue. The sole object of the interviews between Cavanagh and his solicitor Smith and G. Whitechurch, of May 30 and 31, was to procure his signature as managing director of his company to the few words of acquiescence to the agreement, so far as it affected his company. This acquiescence he was willing to give, if satisfied that the arrangement made was bona fide and the proceeding was in due order; but his company was under no obligation, and he might have refused to acquiesce, if he had thought fit, without assigning any reason at all. At the first of these interviews the certified transfers, being in Mr. Maugham's possession, were not shewn to him, but he was told by Cavanagh or Smith that Maugham had two certified transfers of the shares proposed to be handed to Cavanagh, and had expressed an opinion that they were "in order." On this Mr. G. Whitechurch, having no reason to suspect that anything was wrong, with perfect truth and honesty made the remark that they would be "in order" if he was satisfied that the signatures to them were the genuine signatures of the secretary. This seems to have been the opinion of Mr. Smith himself. The special question put to Mr. Whitechurch by Mr. Smith was, whether he required the original certificates to be annexed ; and this inquiry was accom- panied by what appears to me to be a threat that if he required more the appointment for the next day would have to go off— 143 H. L. (B) 1901 —m~ GEORGE WHITE- CHURCH, LIMITED VY CAVANAGH. Lord Brampton. 144 H. L. (E.) 1901 ew GEORGE WHITE- CHURCH, LIMITED v CAVANAGH. HOUSE OF LORDS [1902] obviously for the purpose of putting pressure upon him by intimating that the responsibility of any postponement would rest upon him. There was no semblance of inquiry by Cavanagh or Smith of Mr. G. Whitechurch whether Cavanagh might safely, or with prudence, accept the transfers. Indeed, Cavanagh had, Lord Brampton 10 fact, got in such certified transfers all that he had bargained for in the agreement. The reply of Mr. G. Whitechurch, before he had seen the documents, that he should be quite satisfied if the signature to the certification was Wells' signature, cannot fairly be con- strued to convey any more than this: that he would not, if satisfied on that point, be an obstacle to the completion on the following day as appointed. The same observations apply to his conduct and words on that day when he, having seen the certificates and recognised the signature of Wells, expressed himself satisfied and signed the acquiescence. His expression of satisfaction that the '' opposition' was about to be removed, knowing how much it was desired, and how vitally important it was to the Innox Company and Raymond, was a very natural one. Believing, as he undoubtedly did, that all was in order, and having no reason to suspect a fraud, his con- duct and language were just what one would have expected from him. If, on the other hand, at that time Mr. Smith intended his question to convey, what it certainly did not express, namely, a doubt whether the certified transfers were in that case of equal value with certificates of shares, I can only say I marvel . that he should have felt justified in inviting Mr. G. White- church to express an opinion without telling him that Raymond had so recently as the afternoon of May 29 promised to give him the certificates of the 10,350 shares that he might have them ready to produce at the meeting to execute the agree- ment, and that he had broken his promise, and had neither handed over nor sent a certificate for a single share, knowing, as he admitted he did, the wide difference between share certificates and transfer certifications. If this had been told to Mr. G. Whitechurch he would have had good reason to suspect A. C. AND PRIVY COUNCIL. 'something was wrong, and would, no doubt, have suggested further inquiry. But, believing all was right and in order, he had no reason for interfering. The finding of the jury that Whitechurch allowed Cavanagh to think it was all right in order to induce him to withdraw the '' opposition"? was wholly unwarranted by the evidence, if it meant more than that he did not interfere to prevent him from acting as he was advised by his solicitor because he saw no reason to do so. I do not find in all this evidence anything to support the claim to the estoppel contended for: far from it. To support an estoppel the evidence ought to be clear and unambiguous, as was stated by Lindley L.J., now Lord Lindley, in Low v. Bowverie (1), in which many previous cases on the subject were carefully reviewed. Bowen LJ. said that "the language upon which an estoppel is founded must be precise and unambiguous. That does not necessarily mean that the language must be such that it cannot possibly be open to different constructions, but that it must be such as will be reasonably understood in a particular sense by the person to whom it is addressed''; and in deciding the case before him against the then plaintiff he said : "T think his" (the defendant's) '' language would be reason- ably understood as conveying an intimation of the state of his belief without an assertion that the fact was so apart from the limitation of his own knowledge.' To the same effect was the judgment of Kay L.J. To this I would add that in my judg- ment no representations can be relied on as estoppels if they have been induced by the concealment of any material fact on the part of those who seek to use them as such; and if the person to whom they are made knows something which, if revealed, would have been calculated to influence the other to hesitate or seek for further information before speaking posi- tively, and that something has been withheld, the representation ought not to be treated as an estoppel. Mr. Whitechurch had no reason to doubt, and therefore believed the certificates to be genuine and true when he recognised Wells' signature. Beyond that he knew nothing and suspected nothing. When, therefore, he said they were in order, or appeared in order, he (1) [1891] 3 Ch. 101. 145 H. L. (E.) 1901 —m~ GEORGE WHITE- CHURCH, LIMITED ®%. CAVANAGH. {Lord Brampton. 146 H. L. (E.) 1901 —_—o~ GEORGE WHITE- CHURCH, LIMITED v. CAVANAGH. Lord Brampton. HOUSE OF LORDS [1902] ought not to be considered as pledging himself to anything beyond this: that according to ordinary usage and practice the certificate was in due form and order, and that he was satisfied and content to acquiesce as he did. In my opinion it is clear that the failure of Raymond to produce or hand the certificates to Smith ought to have been quite sufficient to put that astute solicitor on his guard, and had he used the most ordinary precaution, either by searching the register or demanding an inspection of the coupon, or insisted upon Raymond shewing him the certificates, the fraud must have been instantly discovered. I think this appeal ought to be allowed, and that the judg- ments of the Court of Appeal and of Bigham J. should be reversed, and judgment entered for the appellant company with costs. Order of the Court of Appeal and judgment of Bigham J. reversed and judgment entered for the appellants: The respondent to pay to the appellants the .costs both here and below : Cause remitted to the King's Bench Dwision. Lords' Journals, August 5, 1901.

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