Amendment of 54 & 55 Vict. c. 39, as to the payment of stamp duty on certain foreign securities. 14. Where foreign securities within the meaning of sections eighty-two and eighty-three of the Stamp Act, 1891, are issued in the United Kingdom, and the interest thereon is not payable in the United Kingdom, and such evidence of the amount of the securities as the Commissioners of Inland Revenue require is produced to them, then the Commissioners, if in their discretion they consider it expedient to do so, may accept payment of the amount of stamp duty which would be payable if all the said securities were duly stamped, and on such payment may dispense with the necessity of the securities being stamped. The Commissioners shall give notice in the London Gazette of any such dispensation. Abolition of limit of time for mitigating penalties under 15. So much of section fifteen of the Stamp Act, 1891, as limits the time within which the Commissioners of Inland Revenue may mitigate or remit any penalty payable on stamping shall be repealed. Extension to companies of 46 & 47 Vict. c. 52, s. 144, as to exemption from stamp duty. 53 & 54 Vict. c. 63. 16. Section one hundred and forty-four of the Bankruptcy Act. 1883 (which exempts from stamp duty certain documents relating to the estates of bankrupts and bankruptcies), shall apply to the estates of companies wound up by order of the Court under the Companies Winding-up Act, 1890, and to such winding up, in like manner as if the company were a bankrupt and the winding up were a bankruptcy; and proceedings under section fifteen of the latter Act shall for this purpose be part of the proceedings in the winding-up. GILBART LECTURES, 1895. By J. R. PAGET, Esq., Barrister-at-Law. Third Lecture. (Delivered February 11th and 14th, 1895.) I MUST confess to a feeling of regret whenever I see the authority of an old familiar banking case on the wane. And there is one, a particular favourite of mine, and one which has been a staunch friend to bankers for years, which I am afraid is on its very last legs. It is that of Young v. Grote, decided as long ago as 1827, and which figures in every text book on banking or bills. We have talked about it here, and until now, though I have had my doubts, I have never liked to sow them in your minds. The facts were these:-A customer of a banker gave his wife some blank cheques signed by him, telling her to fill them up according to the exigencies of his business. Then he went away on business. The wife wanted £50 28. 3d. to pay wages, so she gave one of these cheques to one of her husband's clerks to fill it up for that sum. He did so, making it payable to "wages or bearer," but he purposely put the word "fifty" in the middle of one line and the figure 5 well away from the £. He then shewed it in that condition to the wife, who apparently thought it all right, and the clerk then inserted a "three hundred and" before the fifty, in the body of the cheque, and a 3 before the 50 at the foot, presented it, got £350 2s. 3d., and does not appear again in the report. And a strong court held that the bankers were entitled to debit the plaintiff with the whole £350 28. 3d. Now I suppose there is scarcely any case which has been more discussed, approved, occasionally disapproved, and distinguished than this case of Young v. Grote. But it has never been distinctly overruled, unless it be in the case I am going to refer to. And the bewildering thing about it is that the judges who agree that the case is good law are by no means agreed as to the grounds on which it was decided or can be supported. One judge said the reason for the decision was that the customer by giving a blank cheque authorised any person in whose hands the cheque was to fill it up in whatever way the blank permitted. No doubt the wife could have filled it up for any amount, but after that it was not a blank cheque, but a cheque with blanks, and to say the two things are the same is about as reasonable as to say a horse-chesnut is a chesnut horse. A learned Law Lord accounted for it by the doctrine that a man is not to be allowed to deny the authority of his agent when he has enabled that agent to cheat. But I do not think that will do. I know of no law which fixes a man with the acts of his agent outside the ostensible authority committed to him, and further, if the late view be adopted and crime is not to be anticipated, the enabling would not be sufficient. Lord Chief Justice Cockburn said the case could be supported on the ground that the decision was really only the doing the same thing in one action as might have been brought about by two or three, and so avoided what is called circuity of action. He said the bankers might in the first instance have had to bear the loss, as they could not show any proper voucher for the payment. But they might have sued the customer for his negligence, and so it would have come to the same thing in the end. That, again, does not satisfy me. I think that since that date the distinction, if there ever was one, between negligence which will disentitle you to recover and negligence which will support an action against you, has reached the vanishing point. In either case I think it must be the proximate cause of the loss, a phrase we have discussed before and must discuss again presently. Another learned Judge upheld the decision on the ground of the supposed duty of every person putting in circulation a bill of exchange to take reasonable precautions with regard to it. The theory of that duty seems to have been confined to parties on the bill, and, at any rate, so far as the acceptor is concerned, has been distinctly negatived in the case we are about to consider, and this reason, therefore, does not seem sufficient. And to come to later cases, Lord Selborne in Vagliano's case doubted whether estoppel by negligence or otherwise was a sufficient explanation of Young v. Grote. But I cannot find that he gives any independent explanation of his own. But if you look at the case itself and the reasons the Judges themselves gave I cannot see where any doubt comes in or how it is reasonable to assign any other ground than that it was through the fault or negligence of the drawer that the loss occurred. Moral fault there was and could be none, the only fault was carelessness, and so the Court say. Best, C. J., says: "Was it not the fault of Young "that Grote & Co. paid £350 instead of £50." Again, "it was by the "neglect of these ordinary precautions that Grote & Co. were induced "to pay. We decide here on the ground that the banker has been "misled by want of proper caution on the part of his customer." Burrough, J.: "It is manifest that the legal blame attaches to the "customer. The blame is all on one side." Gaselee: "There was certainly great negligence on the part of "Young, and therefore the rule must be discharged "-i.e., plaintiff must bear the loss. That, I think, speaks for itself, and that this was the ground of decision has been recognised in cases so numerous that if I were to enumerate them merely we should be here all night pretty well. I am afraid we must class all the other explanations of the grounds of decision as well-meaning efforts to support by hook or by crook the authority of a case so salutary in its principle, but which was seen to be getting weaker and weaker in the light of subsequent decisions. For that doctrine of the proximate cause has gone on from refinement to refinement, with fatal results to Young v. Grote. Its first development was the establishment of the rule that to prevent a man recovering on the ground of his negligence, that negligence must be in the transaction itself that caused the loss, in other words, as I have said, the loss must be the direct natural consequence of the negligence. If not, no estoppel. You remember we talked this all over in Vagliano's case, and I told you how difficult it was, when there were several contributing causes, to settle which was the real moving absolute cause. You may remember the cases of the Merchants of the Staple v. The Bank of England, and Evans' Charities v. The Bank of Ireland, in each of which, the only negligence that could be attributed to the plaintiffs, was that they, being a corporation, had left their corporate seal in the custody of one of their officials, who fraudulently utilized it to transfer property of the Corporation for his own benefit. And in these cases it was held that the negligence, if any, was not in the transaction itself, was not the proximate cause, and that to enable the bank to charge the customer, the conduct of the customer must be conduct directly causing the payment. Still, through these cases, Young v. Grote held its own fairly; in fact, in some of them it was referred to as a typical instance of a case where the negligence was in the transaction itself, was the proximate cause of the loss, and where the conduct of the customer directly caused the payment. In Evans' Trustees v. Bank of Ireland, it was specially so cited, and in referring to that case in the Merchants of the Staple case, Lord Esher says, "Young v. Grote was a case in which the negligence was in or "immediately connected with that which happened." The Merchants of the Staple case was in 1887. In Baxendale v. Bennett, in 1878, Lord Esher, then Lord Justice Brett, said, he thought "the "observations of the Lords in Bank of Ireland v. Evans' Trustees, "had shaken Young v. Grote as an authority." I looked upon his Lordship's remarks in the Merchants of the Staple case as an amende honorable" to Young v. Grote, after nine years, but as you will see presently, another seven years has brought a renewed and serious attack on that venerable case from the same quarter. And that attack seems to have been maturing for some time. It involves a question of mixed law and morals. And it assumes this form. Can negligence be the proximate cause of a loss, when a felony intervenes, without which the loss would not have occurred? In other words, is it your fault or negligence if you do not anticipate felony? The suggestion has been often thrown out. In Arnold v. Cheque Bank, in 1876, Lord Coleridge said, "A man may be more careless with regard 66 66 66 "to the custody of a thing that can be made available only by means "of a forgery, than if by mere larceny." In Baxendale v. Bennett, in 1878, Bramwell, L. J., said, "Is it not a rule that every one has a "right to suppose that a crime will not be committed, and to act on "that belief? This negligence is not the proximate or effective cause of the fraud. A crime was necessary for its completion. Then "the Bank of Ireland v. Evans' Trustees shews, under such circumstances there is no estoppel." And it was, of course, on the same ground, that in this case of Baxendale v. Bennett, Brett, L. J., referred to the Bank of Ireland case as having shaken the authority of Young v. Grote, because, of course, there was a felony intervening in that case. Again, in Vagliano's case, Lord Selborne said, referring to cases of the class of Young v. Grote, "The drawer was "ignorant of, and could hardly be held bound to anticipate the "subsequent fraud." Again, in Société Générale v. The Metropolitan Bank, in 1873, Bovill, L. C. J., said, "Persons are not to be supposed "to commit forgery, and the protection against such a crime is the "law of the land, not the vigilance of parties in excluding every "possibility of committing it.' But he clearly recognises that the excluding all possibility is one thing, and the affording facilities another, both in nature and effect, for in almost the next sentence he says, "I am of opinion this is no case of negligence, which is the "absence of the performance of some duty, or ordinary precaution "which would render the defendants liable on the bill when forgery "has been committed," We will reserve our own views on the question until after I have brought before you a case recently decided, which involves many points of interest, and specially because it seems to me and others, to administer a blow to Young v. Grote, which at its age, that case is scarcely likely to survive. But let me just first formulate for you the conditions which must coincide to establish this defence of estoppel by negligence. I am afraid we have got past the simple broad view of saying "whose fault was it? Let him bear the loss." It may be that the proposition and test is now only expressed in more refined and accurate phraseology; anyway, it is beyond dispute now-a-days that there is no estoppel by negligence except under the following circumstances:— 1. There must be a duty on the part of the person against whom negligence is alleged, either to the person alleging it or to the public of whom he is one; 2. There must be a neglect of that duty, a breach of it accompanied by negligence; or you may express this proposition in another way i. There must be a duty not to be negligent, and a breach of that duty. This again we have talked of before and illustrated. As I told you, you may carry your own money in your pocket with a hole in it; |