1 New York & New Haven r. V. Schuyler, 31 n. Y. 30, especially pp.

65-75.

206 Principal and third party.

injurious to an innocent party.'' ^ The doctrine tlius estab-

lished has been followed in many succeeding cases in New

York and elsewhere.- But the doctrine of these cases is

subject to the qualification that the purchaser must act in

good faith and prudently ; it is not good faith or prudence

to trust to the representation where the agent is known

to be acting for bimself in the sale of the stock.^ And, of

com'se, the agent must be acting within the apparent scope

of the powers entrusted to him ; an unauthoi-ized seizure of

the powers as a means of fraud, where no authority to exer-

cise them exists, will not render the principal liable*

§ 156. Fraud for benefit of agent. - — Issue of fictitious bills of

lading.

A similar question arises where the agent, being authorized

to issue bills of lading, issues fictitious bills of lading in the

name of a confederate and sells them through the confederate

to innocent purchasers.

In England it is held that the principal is not liable, the

argument being that the agent is authorized to do what is

nsual in his agency and it is not usual to issue fictitious bills of

lading.^ This play upon words, if resorted to in other cases,

would excuse the constituent for every tort of his representa-

tive. The English holding has been followed in the Federal

courts and in some of the State courts in this country.^

1 New York & New Haven R. c. Schuyler, 34 N. Y. 30, especially pp.

70-71.

2 Fifth Ave. Bk. v. Forty-second Street, &c. 11., 137 N. Y. 231 ; Tome

r. Parkersburg Branch R., 39 Md. 36. See also Allen v. South Boston R.,

1.50 Mass. 200: Farriugton t'. Same, 150 Mass. 406; American Wire &

Kail Co. V. Bayless, 91 Ky. 94; Appeal of Kisterbock, 127 Pa. St. 601.

8 IMoores v. Citizens' N. B., supra; Allen r. South Boston R., supra;

Farrington c. Same, supra , Bank of New York, &c. v. American Dock

& Trust Co., supra. Cf. New York & New Haven R. v. Schuyler, supra,

p. 64.

в– В» Manhattan Life Ins. Co. v. Forty-second Street, &c. R., 139 N. Y.

146.

6 Grant v. Norway, 10 C. B. 665; Cox i-. Bruce, L. R. 18 Q. B. Div.

147. Cf. Montai.Ejnac i-. Shitta, 15 App. Cas. 357.

В« Pollard y. Vinton, 105 U. S. 7 ; Friedlander v. Texas, &c. Ry. 130

TORTS AND FRAUDS OF AGENT. 207

In the United States many courts hold the principal liable.

In a leading New York case,i the doctrine of the English

courts is expressly disapproved and the doctrine of estoppel

in pais api)lied. And this has been followed by subsequent

cases in the same and other jurisdictions.^ Even the courts

which liold the other doctrine recognize the essential justice

of this. " If the question was res integra we confess that it

seems to us that this argument would be very cogent." ^ The

doctrine is subject to the same qualifications as in its appli-

cation to the issue of stock certificates.*

§ 157. Fraud for benefit of agent. — Other illustrations.

The doctrine above explained and illustrated may be in-