Russell v. American Bell Telephone Co.

62 N.E. 751, 180 Mass. 467, 1902 Mass. LEXIS 1111

• Court: Massachusetts Supreme Judicial Court
• Decided: February 27, 1902
• Status: Published

Opinion

Holmes, C. J.

The plaintiff’s testatrix intrusted a certificate of stock, indorsed in blank, to a fraudulent agent, and he, instead of using it for the purpose for which it was intrusted to him, obtained an advance from the defendant by giving the certificate in pledge. The case, therefore, so far, falls within the general reasoning of Scollans v. Rollins, 179 Mass. 346, and the usage referred to in that case was found to be proved.

In order to avoid the intimations of Scollans v. Rollins, the plaintiff sets up that in this case only the possession of the certificate, not the property, passed to the agent and that, as the possession was obtained by fraud, it was obtained by larceny in judgment of law. In Scollans v. Rollins it is admitted that the general principle there laid down would not apply to an instrument indorsed in blank and stolen before it had been transferred. We shall not examine the premises of this defence because we cannot accept the conclusion. The qualification of the rule, as not applying when the instrument is stolen, is not based upon the name of the agent’s crime but upon the fact that in the ordinary and typical case of theft the owner has not intrusted the agent with the document and therefore is not considered to have done enough to be estopped as against a purchaser in good faith. He certainly has not done enough if theestoppel is based upon the principle that when one of two innocent persons is to suffer the sufferer should be the one whose confidence put into the hands of the wrongdoer the means of doing the wrong. But in a case like the present the agent has been intrusted with the converted property, and it is totally immaterial whether, by a stretch which extends larceny beyond the true field of trespass, his wrong has been brought ypithin the criminal law or not. The ground of the estoppel is present and the estoppel arises.

The distinction is not new. On the one side are cases like Knox v. Eden Musee Americain Co. 148 N. Y. 441, where an Agent or servant simply had access to a document remaining in the possession of the owner; on the other, cases like Pennsylvania Railroad’s appeal, 86 Penn. St. 80, where possession is intrusted to the agent for one purpose and he uses it for another. It cannot matter in the latter class that the agent intended the fraud from the outset. See further Brocklesby v. Temperance Permanent Building Society, [1895] A. C. 173, 181; Farquharson v. King, [1901] 2 K. B. 697.

It is found by the court that the testatrix did not know of the custom, and if the question before us were the construction of a contract, her knowledge might be important. But she knew that she was putting into her agent’s hands an instrument which made actual deceit possible, and it is not argued for the plaintiff that, under such circumstances and considering the nature of the usage which has been adopted as law in many jurisdictions, she did not take the risk of the appearances being interpreted as it is usual for business men to interpret them.

It may be that the case is sufficiently disposed of by St. 1884, c. 229. It certainly is within the words of that act.

Decree reversed.