and that the supposed custom did not make them so. That case, which has never been overruled, is decisive of the present. [THE LORD CHANCELLOR:-That case seems to be a decision more on the form of the pleadings than on anything else.] The case shews that usage was not sufficient to pass the property. This was still more strongly shewn in Crouch v. The Crédit Foncier (1). The debenture there contained a promise to pay a sum certain on conditions therein named, and also interest, and yet it was held not to be a negotiable instrument, and that a custom of trade to treat it as such could not be set up against the general law. What is the character of a usage or custom must also be considered. Here what is set up is really no more than a mere usage among bankers—a usage in a particular trade. That alone is not sufficient. A custom or usage in the tallow market of London has been held, in this House, not binding on a purchaser of tallow who resided in Liverpool: Robinson v. Mollett (2). There was nothing here in the alleged usage that could properly be described as part of the general law merchant recognised in the law. In the judgment in the Exchequer Chamber the Lord Chief Justice incorrectly employed the term "law merchant," for he applied it more than once under circumstances which really amounted only to the usages of a particular trade, not binding on any one not shewn to have been acquainted with that trade. Now not merely the usage of a particular trade, but a general or universal usage, if contrary to the general law, could not be supported: Meyer v. Dresser (3), where what was described as a universal usage among merchants to deduct from the freight the value of missing goods, was held to be incapable of being supported. Even if it should be admitted that property of this kind could pass by delivery, the admission could only affect those cases where the delivery was made by the owner himself, not those where it was made by a person who was not the owner, and who could only transfer possession of the property by a wrongful act committed upon some other person. Under such circumstances a good title to it could not be got against the true owner. Here the Plaintiff claimed the property in the piece of paper called the (1) Law Rep. 8 Q. B. 374. (2) Law Rep. 7 H. L. 802. (3) 16 C. B. (N.S.) 646; 33 L. J. (C.P.) 289. H. L. (E.) 1876 GOODWIN V. ROBARTS. 1876 H. L. (E) Scrip; of that paper he had been wrongfully deprived, and, whatever was the value of that paper-whether it was a mere valueless GOODWIN promise, or was the equivalent of money-he was entitled to recover it. Bayley on Bills (1), Kent's Commentaries (2), Chitty on Bills (3), and Diamond v. Laurence (4), were also referred to. V. ROBARTS. Mr. J. Brown, Q.C., and Mr. C. H. Robarts, for the Defendants in Error:- There is not any one of the authorities relied on by the other side which touches the real point in the present case. Whatever constitutes the right of transfer by delivery, and conveys thereby an absolute property in the thing delivered, exists here. It cannot be denied that the bonds of foreign Governments are negotiable here. That has been decided in many cases: Gorgier v. Mieville (5) was the first. Independently of every other consideration, if they were not negotiable, there must be, in every case of transfer, an investigation into their form and authenticity, which would be a great inconvenience and obstruction to commerce. [LORD SELBORNE :-That the bonds are negotiable is admitted by the Plaintiff in Error; but his contention is that this scrip is not a bond, but only a promise to give a bond, and so not negotiable.] But this scrip declares the bearer to have paid money, and to be entitled, in respect thereof, to have a bond delivered to him. The same principle which makes foreign bonds negotiable must make foreign scrip negotiable. The foreign Government is equally bound by its scrip as by its bonds. Here the acknowledgment of the debt is made by the Russian Government, and is issued to the world by the agents of that Government, but they are no parties to the contract, which is wholly that of the Government itself. A bond is merely a more formal acknowledgment of the debt. This instrument must be construed on the principle laid down in Unwin v. Wolseley (6), where it was held that a servant of the Crown contracting on the part of the Crown incurs no personal responsibility. That principle, with all the authorities, is fully set forth in Story on Agency (7). (1) C. 5. (2) Pt. v. sect. xiv. vol. iii. pp. 88, 89, and notes. (3) Part 1. c. 5 and 6. (4) 37 Pennsylvania Rep. 353. (5) 3 B. & C. 45. (6) 1 T. R. 674. (7) C. 11, ss. 302, 303. 1876 GOODWIN ROBARTS. The use of the word "bearer" in the scrip itself made it nego- H. L. (E.) tiable; it made the Russian Government liable to deliver a bond, and pay money to any one who was the actual holder of the scrip at the moment fixed for the issuing of the bonds. And the actual bearer was in no way bound by any legal liability, or by any equities that might be set up as to any of the previous holders of the scrip. In the case of Re Agra and Masterman's Bank (1) this principle was applied in the instance of letters of credit, and in the Blakely Ordnance Case (2) to the debentures of a company. Had the scrip been granted to a particular person by name, and had the word "order" then been introduced, of course that would have required a written authority from the first grantee. But the word "bearer," without any preceding statement as to the person, dispensed with all that, and made the instrument a negotiable security, passing by mere delivery. It did so because our law adopted, as to such matters, the law merchant, and had done so for a very long period-for, in Vanheath v. Turner (3), Lord Hobart expressly declared that "the Law Merchant was part of the Common Law of the kingdom, of which the Judges ought to take notice." The American law recognises the same principle: Parsons' Maritime Law (4). The first scripholder is clearly estopped from setting up a title against any subsequent honest holder, for he accepted the scrip in the first instance on the terms of its being payable to bearer. To that extent he was a party to the act of the Russian Government in issuing it; he became bound by those terms, as would a shareholder in a company whose deed said that the company would not take notice of assignments of shares on trust. Any person who afterwards honestly paid value for the scrip had a good title as "bearer" against any one who had previously held it. And the first holder, having given to another person the means of defrauding an innocent party, he cannot, as against that party, claim any benefit for himself: Vickers v. Hertz (5). The new holder was not like the assignee of a covenant running with the land. As to shares in a company, the rule was that every holder of a share, (1) Law Rep. 2 Ch. Ap. 391. (2) Ibid. 3 Ch. Ap. 154. (3) Winch. 24. (5) Law Rep. 2 H. L., Sc. 113. 1876 v. ROPARTS. H. L. (E.) where the name was left in blank, though he omitted to register his own name as a shareholder, became by the mere act of purGOODWIN chasing the shares and holding the scrip certificates liable to the company, and was bound to indemnify the person from whom he purchased: Walker v. Bartlett (1); De Pass' Case (2). But that was not so as to debentures issued by a company payable to "bearer," for they have been held negotiable, and the bearer has been protected against equities which existed between the company and the persons to whom the company originally issued its debentures: In re The Imperial Land Company of Marseilles (3). The usage of trade is admissible here to prove the liability, and the cases cited on the other side do not displace but actually prove that doctrine. In Glyn v. Baker (4) the decision was given on the ground, not of want of a general right, but of absence of the fact on which to found it. The bonds were in form payable to the treasurer of the company, not to bearer; and though it seemed afterwards to be considered that custom ought to render them negotiable, there was nothing on the face of them to shew that they were so. The Court only refused to follow the usage of trade set up there, because the instrument on the face of it did not give rise to the applicability of any doctrine of usage. In Lang v. Smith (5) the coupons on the Neapolitan bonds were payable to bearer, and it was distinctly declared that the evidence as to the character of the bordereux and coupons, and the usage applicable to them, was properly left to the jury, and found for the Plaintiff. Partridge v. The Bank of England (6) does not deny the admissibility of evidence of custom, for there proof of it was admitted, but the question was, whether the other parts of the case made the custom applicable, and whether the pleadings to shew the negotiability of the instrument were, or not, sufficient. In Jones v. Peppercorne (7) Dutch bonds payable to bearer were treated as passing by delivery, and the custom of brokers was there expressly taken into consideration. And in The Attorney-General v. Bouwens (8) they, with (1) 18 C. B. 845; 25 L. J. (C.P.) tions of Bayley, J., on the effect of the 263. Defendant's own negligence at p. 515. (5) 7 Bing. 284. (2) 4 De G. & J. 544; 28 L. J. (Ch.) 769, 772. (3) Law Rep. 11 Eq. 478. (4) 13 East, 509; see the observa (6) 9 Q. B. 396; in Ex. Ch. Ib. 421. Russian and Danish bonds, were treated as so exactly like money that they were held liable to probate duty. So, in Wookey v. Pole (1), an Exchequer bill in blank, without any name filled in, was held to pass by delivery, and bills payable to a fictitious person, or where no payee was named, have been held to be payable to the bearer. Collins v. Martin (2), where bills indorsed in blank were held to pass to the holder for value, was there distinctly recognised. In Brandao v. Barnett (3), where all the authorities were fully considered, the general lien of bankers was recognised as part of the law merchant, though it was held not to arise there on securities deposited for a special purpose only; but on the question of the law merchant generally Lord Campbell said (4): "The general lien of bankers is part of the law merchant, and is to be judicially noticed-like the negotiability of bills of exchange, or the days of grace allowed for their payment. When a general usage has been judicially ascertained and established, it becomes a part of the law merchant, which Courts of Justice are bound to know and recognise." And on that principle it was that in Gorgier v. Mieville (5) Prussian bonds were treated as passing by delivery, for they were payable to bearer, and recognised as so payable by all mercantile men. In Crouch v. The Crédit Foncier Company (6) the instrument was held not to be a negotiable instrument, because it was only payable under certain conditions, and because it was thought not to be clear that such an instrument, issued under the seal of a corporation, could be rendered negotiable. There were particular objections to that individual instrument, but they did not contradict nor even in any way impeach the general rule, nor did the conditions existing there apply in this case. In Ireland v. Livingstone (7) the usage of the Sugar Market in Mauritius was allowed to control the execution of a contract made here. The Stamp Act recognises foreign scrip in words as "foreign security" (8), the statute making liable to duty "every security (1) 4 B. & Ald. 1. (2) 1 B. & P. 648. (6) Law Rep. 8 Q. B. 374. (7) Law Rep. 5 H. L. 395. (8) 33 & 34 Vict. c. 97, s. 113, schedule, tit. Scrip Certificate; see also 34 Vict. c. 4, s. 2; and see Grenfell v. Commissioners of Inland Revenue, 1 Ex. D. 242, where bonds of a company H. L. (E.) 1876 GOODWIN V. ROBARTS. |