Winton v. Hart

| Conn. | Jan 15, 1872

Butler, C. J.

This case turned in the court below, and hinges here, upon a questioii of estoppel.

It is found that Howe & Wickwire commenced the business of purchasing and grinding grain in May, 1868, with the assistance and encouragement of the defendants, and that they purchased all their grain in several successive parcels, from that time until July following, of the plaintiff, who was then a wholesale dealer in grain at Bridgeport, on the credit of the defendants, but without their authority or their knowledge. The parcels of grain were shipped to the defendants, and previous parcels were paid for by the checks of the defendants. The parcels were charged and billed to the defendants, but the bills, by direction of Wickwire, were sent to Howe & Wickwire. The defendants saw these bills before the parcel of grain" in question was' purchased, but did not notify the plaintiff that'the dealing was unauthorized.

On these facts are the defendants estopped to deny that they authorized the purchase of the parcel in question on their credit ?

It is well settled that a man cannot lawfully keep silent when it is his duty to speak to prevent a wrongful use of his property or credit to the injury of an innocent third person. He cannot therefore be permitted to keep silent when he knows that his property is being fraudulently sold by another as his own, without warning the innocent purchaser; or when he knows that his credit is being fraudulently used by an irresponsible person in the purchase of goods, without notifying the vendor of the fraud. To do so is cutyable negligence, and as much an element of estoppel as active misconduct or misrepresentation. This principle has become elementary, and has been recognized as such in several cases in this court. Roe v. Jerome, 18 Conn., 153; Taylor v. Ely, 25 id., 258.

Did the defendants keep silent when it was their duty to speak; did they, with knowledge that their credit was being fraudulently used with the plaintiff, neglect to notify him ? And if they had spoken or acted when it was their duty to speak and act, could they have prevented the sale in question ? I think it clear that an affirmative answer must be given to both questions.

The fact that the grain was shipped by railroad, directed to the defendants, is important but not alone conclusive. There is an explanation of that, and it was not a sufficient intimation to the defendants that the goods were purchased on their credit. The same is true of the payments by checks. But before the purchase of the parcel in question, the fact came to the knowledge of the defendants that all the Mils for all the grain which Howe & Wickwire had purchased from the time when they commenced business had been made out against the defendants, and the bills were seen by them. To their inquiry what it meant, they received no explanation. They thereupon supposed it to be an ¡inadvertence, and kept silence. But they had no right to make such a supposition, or to keep silent. Those bills were made out by wholesale dealers in a considerable business centre, presumptively according to mercantile practice, and they embraced all tire dealings between the parties. If made according to the usual and well known course of business under our book debt system, they were representative of charges on the boohs of the plaintiffs to the defendants, for grain sold on their credit, and so, under the circumstances, the defendants should have understood them. Howe & Wickwire were irresponsible, and those bills alone, and certainly in connection with the other facts, plainly told the defendants that they were using the credit of the defendants. No business man (in the absence of clear explanation) ■could understand them otherwise, and as they covered the whole period during which Howe & Wickwire had been in business, no correct business man could attribute them to inadvertence. The defendants therefore, as merchants acquainted with the usages and customs of trade, were informed by those bills that their credit was being used, and were bound to speak. If they had spoken, the last parcel — that in question — would not have been purchasedj or would have been stopped “in transitu.” In my judgment the defendants should be holden estopped, and a different decision would introduce a bad precedent into our commercial law.

For these reasons a new trial should be advised.

In this opinion the other judges concurred.