V. C.J. 1902 E. E. Barclay, a representative of the defendants, purporting SHEFFIELD to be executed by Timbrell and Honnywill, was handed to the CORPORATION defendants Barclay & Co. On April 15, 1893, the defendants BARCLAY. sent the transfer of April 11 to the corporation with a letter in Lord Alverstone the following terms: [He read the letter above set out.] This was followed by a letter of April 17 from Mr. Parker, the registrar, acknowledging the receipt, but pointing out that the registration fee had not been inclosed, and on April 18 Barclay & Co. sent the registration fee. On April 28, 1893, E. E. Barclay, the transferee named in the transfer of April 11, executed a transfer of 80001. of the stock to Messrs. Young and Macdonald, and upon May 12 a transfer of the balance of 2007. to Mary Florence Cockayne. Upon June 1 the plaintiffs issued certificates to Young and Macdonald for the 80001. stock and to M. F. Cockayne for the 2007. In the year 1900 an action was brought by Honnywill against the corporation claiming the rectification of the register by inserting his name as the holder of the 82001. stock transferred to Barclay under the forged transfer, and the interest and dividends paid thereon. In that action the jury found that the transfer was a forgery, and had not been executed by Honnywill or with his authority, and for the purposes of this action it was agreed that the defendants were bound by that finding. The duties of the corporation in respect of the transfer of stock are controlled by ss. 27-32 of the Sheffield Corporation Act, 1883. Reliance was placed by the plaintiffs upon the language of sub-s. 4 of s. 29, and by the defendants on sub-s. 1 of s. 30. There was no evidence before me either that the defendants or their agents, or the plaintiffs or their officials, were guilty of negligence, and I find 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 any official of the corporation. Before considering whether any of the above-mentioned statutory provisions have any material bearing upon the case, The case for the plain I had better state my view of the law. tiffs was based on the following grounds, which appear to me to CORPORATION V. BARCLAY. C.J. involve the same considerations, although possibly somewhat 1902 different arguments may be used with regard to each ground. SHEFFIELD It was said first that the plaintiffs had done a lawful act at the request of the defendants, which lawful act had caused the plaintiffs damage, and that therefore the defendants were Lord Alverstone liable for the damage so caused to the plaintiffs. It was further contended on behalf of the plaintiffs that, even if the defendants were not liable because the plaintiffs had done an act at their request, the sending in of the transfer implied an undertaking by the defendants to indemnify the plaintiffs, or was a warranty by the defendants that the transferor had a right to transfer. As I have already said, it does not seem to me that the particular form in which the plaintiffs' claim is alleged is of much importance in solving the question which has to be decided. The real question-and it is to my mind one of the greatest difficulty-is what is the true nature of the request or representation, either made in fact or implied in law, from the act of sending in a transfer to be registered, or what is the nature of the transaction between the parties, and on whom should the loss fall as between two innocent parties if it turns out that the transfer is forged. The plaintiffs relied strongly on the enunciation of the law contained in the judgment of Tindal C.J. in Toplis v. Grane (1), and cited with approval by Lord Esher in Dugdale v. Lovering (2), to the effect that "where an act has been done by the plaintiff under the express directions of the defendant which occasions an injury to the rights of third persons, yet if such an act is not apparently illegal in itself, but is done honestly and bonâ fide in compliance with the defendant's directions, he shall be bound to indemnify the plaintiff against the consequences thereof." As I ventured to point out in the course of the argument before me, there are undoubtedly cases in which our law recognises that a request so acted upon does involve the party making the request in the obligation to indemnify the party who so acted. Such cases arise in connection with warranty of agency, representations made with regard to the custody of goods, and no doubt other instances might be given. (1) 5 Bing. N. C. 636; 50 R. R. 814. (2) L. R. 10 C. P. 196. 1902 The difficult in this case is to decide whether the representaSHEFFIELD tions made or implied by the sending of a transfer do or do not fall within the rule enunciated by Tindal C.J. in Toplis v. Grane. (1) CORPORATION V. BARCLAY. Lord Alverstone For the defendants great reliance was very naturally placed upon the judgment of Lord Lindley (then Lindley J.) in the case of Simm v. Anglo-American Telegraph Co. (2) I have felt very much pressed by that opinion. It is that of a learned judge of very great experience in this branch of the law. That the bearing of the opinion of Lord Lindley may be understood, it will be convenient to make a brief statement of the facts which arose in Simm v. Anglo-American Telegraph Co. (2) In that case a firm of the name of Burge, who stood in a position corresponding to that of Barclay & Co., presented to the telegraph company, through Messrs. Spurling & Skinner acting on their behalf, a transfer purporting to be executed by one Coates, which was in truth a forgery. This transfer was registered by the company, and the stock was transferred into the names of Spurling & Skinner, who were in fact agents for Burge. The certificate of the stock, though prepared, had never been issued to Spurling & Skinner; so that, as was pointed out by the Court of Appeal, no question of estoppel by the issue of the certificate arose as in the cases of In re Bahia and San Francisco Ry. Co. (3) and Hart v. Frontino, &c., Gold Mining Co. (4) Before the case went to the Court of Appeal Burge & Co. were joined as plaintiffs, so that the question whether they could demand the issue of a certificate was raised as between them and the Anglo-American Telegraph Company. The other plaintiffs in the first action, Messrs. Simm and others, had purchased the stock from Burge & Co., and claimed that Burge & Co. should be registered as the holders. The other action was brought by the company against Spurling & Skinner, who had acted as agents for Burge in handing in the forged transfer, for an indemnity. Upon these facts the opinion of Lord Lindley was expressed in the following terms: “And it appears to me that a duty is thrown on the company to look (1) 5 Bing. N. C. 636; 50 R. R. 814. (2) 5 Q. B. D. 188. (3) (1868) L. R. 3 Q. B. 584. (4) (1870) L. R. 5 Ex. 111. V. C.J. to their own register, which involves, of course, the looking 1902 after the transfer of stock or shares standing in the names of SHEFFIELD persons on the register; and that duty the company owe to CORPORATION those who come with transfers, and I do not see any corre- BARCLAY. sponding or conflicting duty on the part of the person who Lord Alverstone brings the transfer, except, of course, that of bringing what he believes to be an honest document. I think the true view is this, that there being no negligence in the sense of want of care on either side, but there being a duty on the part of the company to keep the register correct and themselves to look after the transfers between innocent parties, the loss must fall upon the company. . . . The utmost which the company are entitled to say is this, 'It was your duty not to produce to us to be acted upon any transfer which you knew or suspected to have been forged.' I think the duty of the persons bringing the transfer does not go beyond this. Can the claim against Skinner & Spurling be sustained by looking at it from what I call a broader point of view? The first of these actions is brought against the company, and the second is in reality brought against Burge & Co.; can it be said, even if the question be looked at as between Burge & Co. on the one side and the company on the other, that the loss ought to fall on Burge & Co. rather than on the company? I do not think it can. It appears to me that the case is analogous to the case of a forged cheque, and as a banker paying a forged cheque to an innocent holder for value cannot recover back its amount and is compelled to pay it twice over, so here the company must pay the amount of the stock twice over. The duty being cast upon the company to look after the register and the transfers, it appears to me that between two innocent parties the company are not entitled to claim compensation from Burge & Co., nor to resist at Burge & Co.'s expense the recognition of that title which they themselves have created by their own act. It appears to me that Burge & Co. are entitled to say, 'We did not deceive you; you made inquiries and you accepted us as stockholders and put us on the register, and you cannot now turn round and say that as between you and us we do not hold that position which you have led us to believe that CORPORATION V. C.J. 1902 we are entitled to.' This is no doubt a very strong opinion SHEFFIELD and a very clearly expressed view. It proceeds from one of the most able and distinguished judges that has ever adorned the BARCLAY. English bench. If I had thought that that opinion had been Lord Alverstone delivered after full consideration of the point raised before me, and if it had not been the subject of further examination in the Court of Appeal, I should have felt bound by that decision, and I need scarcely say that in differing from it, as I feel bound to do, I do so with the very greatest diffidence and hesitation. When the case of Simm v. Anglo-American Telegraph Co. (1) was considered in the Court of Appeal, the particular judgment in which that opinion was delivered was not reviewed. The action by the Anglo-American Telegraph Company was against Spurling, an agent of a person who stood in the position of Messrs. Barclay in this case. When, therefore, that case came to be considered in the Court of Appeal, inasmuch as the decision was in favour of the company as against Burge & Co., the persons on whose behalf the forged transfer, purporting to be executed by Coates, had been presented, the company did not press their appeal in the action they had brought against Spurling, and Bramwell L.J. (2), dealing with that action, said: "I wish it to be distinctly understood that I do not express any opinion whether the second action would have been maintainable if any damage had accrued to the company; cogent arguments no doubt may be adduced in favour of either view; but the company are willing to pay the costs of the action brought by them rather than have a doubtful question discussed, and they are content that judgment be recorded against them, although technically they do not consent to it so as to preclude themselves from appealing, if it is wished to take the opinion of a higher tribunal." And the other Lords Justices expressed no opinion. I have, however, to consider how far the decision in Simm's Case (1), in the action brought by Simm against the company, supports the plaintiffs' claim in this case, or affords ground for questioning the principle of the decision given by Lord Lindley. It seems to me that the decision of the Court of Appeal did (1) 5 Q. B. D. 188. (2) 5 Q. B. D. at p. 205. |