C. A. 1903 and the interest and dividends paid thereon. In that action the jury found that the transfer was a forgery and had not SHEFFIELD been executed by Honny will or with his authority, and for the CORPORATION purpose of this action it was agreed that the defendants were BARCLAY. bound by that finding. v. The duties of the corporation with regard to the registration and transfer of stock were regulated by ss. 27-32 of the Sheffield Corporation Act, 1883 (46 & 47 Vict. c. lvii.), the provisions of which were in substance the same as those contained in the Companies Act, 1862, with regard to the transfer of the shares of a company under that Act. The learned judge found as a fact that there was no negligence either on the part of the defendants or their agents, or on the part of the registrar or of any official of the corporation. And the learned judge came to the conclusion that, as between the two innocent persons, the plaintiffs and the defendants, the loss should be borne by the defendants, who had innocently caused the plaintiffs to act upon an instrument which turned out to be invalid. And he gave judgment for the plaintiffs for the amount claimed, and made a declaration that the plaintiffs were entitled to be indemnified by the defendants in respect of the liabilities arising from the transactions. The defendants appealed. Haldane, K.C., and F. R. Radcliffe, for the defendants The plaintiffs are not entitled to an indemnity. There can be no claim for an indemnity between joint tortfeasors, but where in an honest transaction such as this there exists the relationship of principal and agent, or master and servant, a mere request by the former to the latter is enough to give rise to the implication of a contract to indemnify. Where there is no such relationship it is necessary to find an actual and imperative direction of such a nature that the Court can ascertain that the person thus directed acted under the order and on no other ground: Collins v. Evans (1); Toplis v. Grane. (2) This action is not maintainable, for there has been no fraudulent representation, no direction by the defendants to the plaintiffs, (1) (1844) 5 Q. B. 820. (2) (1839) 5 Bing. N. C. 636; 50 R. R. 814. C. A. 1903 CORPORATION V. BARCLAY. and no relationship of principal and agent or master and servant: Childers v. Wooler (1); Dugdale v. Lovering (2); Smith v. Keal. (3) There has been no negligence on the part SHEFFIELD of the defendants; the plaintiffs registered the transfer in pursuance of the obligation imposed on them by ss. 29, 30, and 31 of the Sheffield Corporation Act, 1883, and s. 25 of the Companies Act, 1862, to keep the register correct, and not in consequence of the defendants' request. It was their duty to make inquiries and verify the signatures. The defendants rely on the judgment of Lindley J. in Simm v. Anglo-American Telegraph Co. (4), which has never been overruled on this point, and illustrates the distinction between acts done under an obligation and acts done in compliance with a request. That decision is in accordance with In re Bahia and San Francisco Ry. Co. (5), and was affirmed by Balkis Consolidated Co. v. Tomkinson (6) and Dixon v. Kennaway & Co. (7) These cases shew that if in the ordinary course of business a man brings a transfer to a company and gets a certificate from them and they suffer damage, he is not in the position of a master towards the company, and no indemnity can be implied. [STIRLING L.J. referred to Cottam v. Eastern Counties Ry. Co. (8) and Johnston v. Renton (9) as to the form in which the action ought to be brought.] The question has arisen in cases on third-party procedure, e.g., Carshore v. North Eastern Ry. Co. (10), where, however, the Court only went so far as to say that notice of claim for indemnity might be served; and Birmingham and District Land Co. v. London and North Western Ry. Co. (11), where the rule is stated. Danckwerts, K.C., Bankes, K.C., and Waddy, for the plaintiffs. The Sheffield Corporation Act, 1883, imposes on the corporation the duty of keeping a register similar to the duty (1) (1859) 2 E. & E. 287. (4) (1879) 5 Q. B. D. 188, 194, 195. (5) (1868) L. R. 3 Q. B. 584. 2 R 2 (6) [1893] A. C. 396. C. A. 1903 V. of levying execution imposed by law on a sheriff. The corporation must accept the statement of the transferee and SHEFFIELD register the transfer, unless they can shew that it is fraudulent. CORPORATION Whether the corporation ought to make inquiries or not is BARCLAY. immaterial, but no such duty is cast upon them by the Act. It is no answer to an action, brought to rescind a contract on the ground of misrepresentation, to say that the plaintiff might have known the truth by proper inquiry: Venezuela Ry. Co. v. Kisch (1); Redgrave v. Hurd. (2) The Companies Act, 1862, does not affect this case, except in so far as decisions under it are applicable. It is admitted that the corporation were obliged to register the transfer; but that was because the defendants represented that it was signed by A. O. Honnywill. Therefore Starkey v. Bank of England (3) applies, and the defendants must indemnify the corporation. An express direction to the corporation was not necessary to produce this result: Toplis v. Grane (4); Childers v. Wooler. (5) No harm could be done to the corporation unless the transferee sold the shares. The transfer was for the benefit of the transferee, and so also was the registration. [VAUGHAN WILLIAMS L.J. Is not the transfer delivered to the corporation in order that they may ascertain whether it is duly executed?] The transferee cannot be heard to say that the corporation ought not to have acted upon his representation. A sheriff is entitled to accept the execution creditor's statement as to the ownership of goods which he is to seize. A person who sends in a transfer of stock for registration must be taken to assert that he is the purchaser of the stock. The corporation may not be bound to accept the transfer without inquiry, but, if they do accept it, the transferee cannot complain. The corporation acted upon the express request of the defendants: Dugdale v. Lovering (6); Betts v. Gibbins. (7) No doubt there is a distinction between cases in which the person who (1) (1867) L. R. 2 H. L. 99. (2) (1881) 20 Ch. D. 1. (3) [1903] A. C. 114. (4) 5 Bing. N. C. 636; 50 R. R. 814. (5) 2 E. & E. 287. (6) L. R. 10 C. P. 196. (7) (1834) 2 A. & E. 57; 41 R. R. 381. C. A. 1903 v. BARCLAY. is called on to do an act is under a duty or obligation to do it, and cases in which there is no such duty. But in Birmingham and District Land Co. v. London and North Western Ry. SHEFFIELD Co. (1) Cotton L.J., referring to Carshore v. North Eastern CORPORATION Ry. Co. (2), said: "In that case the transferee requested the company to register the transfer, and there would be an implied contract to indemnify them for acting on that request." Simm v. Anglo-American Telegraph Co. (3) was a case upon estoppel. Estoppel does not confer a title; it is only a rule of evidence: Hart v. Frontino, &c., Gold Mining Co. (4); Low v. Bouverie (5), per Bowen L.J.; Balkis Consolidated Co. v. Tomkinson. (6) [VAUGHAN WILLIAMS L.J. We have not in the present case to decide whether there is an estoppel; it is only relevant as negativing the inference of an indemnity.] Dixon v. Kennaway & Co. (7) shews the effect of a share certificate. If it is based on a forged transfer it does not estop the company as against the person to whom it is issued. The following cases - Richardson v. Williamson (8); Firbank's Executors v. Humphreys (9); Oliver v. Bank of England (10); Starkey v. Bank of England (11)-apply, and shew that the defendants in effect warranted the genuineness of the transfer which they tendered for registration, and are liable to indemnify the corporation. The two American decisions-Boston and Albany Railroad Co. v. Richardson (12) and Brown v. Howard Fire Insurance Co. (13)-support the plaintiffs' argument. The view expressed by Lindley J. in Simm v. Anglo-American Telegraph Co. (14) was not the basis of the decision. The defendants were bound to make inquiry as to the genuineness of the transfer. The corporation were entitled, but not bound, to inquire. The defendants represented the transfer to be genuine, and asked the corporation to act upon it. The (1) 34 Ch. D. 261, at p. 269. (2) 29 Ch. D. 344. (3) 5 Q. B. D. 188. (4) (1870) L. R. 5 Ex. 111. (5) [1891] 3 Ch. 82, 105. (8) (1871) L. R. 6 Q. B. 276. (10) [1902] 1 Ch. 610. (11) [1903] A. C. 114. (12) (1883) 135 Mass. 473. (13) (1875) 42 Maryland Rep. 384. (14) 5 Q. B. D. at pp. 194, 195. C. A. 1903 corporation acted upon it, and are therefore entitled to an indemnity from the defendants against the loss which they SHEFFIELD have suffered. The right inference is that the corporation CORPORATION acted on the request of the defendants, and this gives rise to an implied contract by them to indemnify the corporation. v. BARCLAY. F. R. Radcliffe, in reply. The corporation did in fact compare the alleged signature of Honny will with a genuine signature of his which they had; they did not act on the request of the defendants. In Oliver v. Bank of England (1) the action was founded on a warranty of the genuineness of a power of attorney and on Collen v. Wright. (2) In the case of a warranty the Statute of Limitations runs from the date of the making of the representation: Gibbs v. Guild. (3) [Danckwerts, K.C. This action is not founded on a warranty.] The observations of Lindley J. in Simm v. Anglo-American Telegraph Co. (4) exactly apply, and they were not disapproved by the Court of Appeal in that case. A person who sends in a transfer for registration has no intention of warranting that it is genuine. A contract to indemnify cannot be implied when without any warranty a document is put forward innocently in the belief that it is genuine: Low v. Bouverie. (5) The American cases cited are not law in this country. Derry v. Peek (6) has not been accepted by the American Courts. [VAUGHAN WILLIAMS L.J. referred to Nickalls v. Merry. (7)] The corporation, as official custodians of the register of their stock, had imposed on them the duty of keeping the register correctly, and they were put upon inquiry. Unless the transferee has requested the corporation to go beyond their statutory duty and to do some special act for him, and they have acceded to that request, no contract of indemnity by him can be implied. The defendants altered their position on the faith of the certificate which the corporation issued to them, and rendered themselves liable to third persons: Pollock on Torts, 3rd ed. p. 282. (1) [1902] 1 Ch. 610. (2) (1857) 8 E. & B. 647. Cur, adv. vult. (4) 5 Q. B. D. at p. 194. (6) (1889) 14 App. Cas. 337. (7) (1875) L. R. 7 H. L. 530. |