ordinary management of the household. But this implication may be rebutted by it being shown that, in fact, she had no authority, and that the person with whom she deals knows that she is acting in excess of her authority. So that if a husband gives his wife an allowance for housekeeping and she deals with a tradesman who knows this, the husband is not liable for the price of any goods supplied, even though necessaries. In any other case the authority would only extend to necessaries, and the onus of proof is on the tradesman to show that the goods he supplied were necessaries. If a married woman who had been forbidden to pledge her husband's credit employed an agent to make purchases on credit, the presumption is that she intended to pledge only her personal estate if the articles were personal necessaries or were luxuries; and the seller would have recourse only against the wife's estate and not against the husband nor the agent if he knew him to be such. But if the goods were necessaries for the household, and neither the agent nor the tradesman knew that the wife had no authority, the husband would be liable. The husband may, however, be estopped by his conduct from denying that he has given the wife authority, as where he has paid accounts for goods supplied. The particular tradesmen would in such case be justified in assuming that authority had been given unless they received express notification of revocation. If the wife has not been in the habit of dealing with particular tradesmen, the husband may revoke her authority as regards personal necessaries at any time without notice to any tradespeople, as was held in Debenham v. Mellor (1881) and Morel Bros. v. Westmorland (1904). If the wife is living apart from the husband through the fault of the husband, she has implied authority to pledge his credit for necessaries, but only if he neglects or refuses to make her a sufficient allowance. Where husband and wife are living apart by mutual consent and there is an agreement as regards maintenance, the wife cannot pledge her husband's credit so long as the agreement is observed. If there should be no agreement as to maintenance, then the wife can pledge the husband's credit only if he does not make her a sufficient allowance, and she has not adequate means, and is not in receipt of maintenance from any other source. When the husband and wife are living apart under a judicial separation and the husband does not pay the amount of alimony awarded, the wife's right to pledge his credit revives, but it does not exist otherwise. Where a married woman has entered into contracts in excess of her implied authority as agent for the husband, she will be liable to the extent of any separate estate she may have. Ships' Masters and Managing Owners. The master of a ship has implied authority to do everything necessary to bring the voyage to a successful conclusion. He can, on behalf of the owner, sell or mortgage the ship, pledge his owner's credit or jettison the cargo (p). When a ship is owned by several co-owners one of their number is often appointed to manage the business on behalf of all; he is then termed a managing owner (q), and has implied authority, apart from any express authority given by his co-owners, to do everything necessary on shore that concerns the employment of the ship, e.g., to make charter parties. Counsel. A person is in general bound by the acts of his counsel in all matters strictly within the scope of the action; but if counsel should exceed an express authority given him by his client it is probable that effect would not be given to the arrangement by the court. Counsel can only be approached through the medium of a solicitor. Patent Agent. The law relating to patents being highly technical, it is the usual course for an inventor to employ a patent agent to draw up the specification relating to the invention, and to file the necessary papers. Such agent must be registered, and a person who advertises himself as a patent agent without being duly registered is liable to a fine up to £20. (p) See post, p. 188 et seq.. CHAPTER 3 NEGOTIABLE INSTRUMENTS Reference should also be made to the following:-- APPENDIX C.-Bills of Exchange (Time of Noting Act), An authority on negotiable instruments defines a negotiable instrument as "one the property in which is acquired by anyone who takes it bonâ fide, and for value, notwithstanding any defect of title in the person from whom he took it; from which it follows that an instrument cannot be negotiable unless it is such that the true owner could transfer the contract or engagement contained therein by simple delivery of the instrument" (r). What Negotiability implies. Negotiable instruments therefore have the following characteristics, which are implied in the term Negotiability :– (1) The property in them and not only the possession passes from hand to hand by delivery, or by indorsement and delivery. (2) Any defect in the title of the transferor or of any previous holder does not affect the title of a "holder in due course." (s) (3) A holder in due course holds "free of all the equities," that is, he is not affected by any defences that might have been available against previous holders. (4) A holder in due course can sue in his own name. The holder in due course of a negotiable instrument has a perfect title, even if he takes from a thief, and his title can be invalidated only in the case of a prior forgery (see below). Negotiable instruments are therefore exceptions to the two rules of Common Law: (r) WILLIS on Negotiable Instruments, 1st Edn., p. 6. (1) That choses in action are not assignable. Note, however, If there is any doubt as to whether an instrument is negotiable, a rough-and-ready test to apply is : Can a title be obtained through a thief? If the answer is in the affirmative, the instrument is negotiable; if in the negative, the instrument is not negotiable. The most important negotiable instruments are bills of exchange, cheques, and promissory notes. Bills, notes, and cheques payable to bearer are freely negotiable and the title thereto is passed by simple delivery; but if they are payable to order, indorsement by the transferor is necessary, in addition to delivery, in order to convey a title free from existing defects. This necessity for the indorsement of an order bill, cheque, or note, provides the only important case where the title of a holder in due course may be defeated: he cannot under any circumstances have a good title if the indorsement of a previous holder has been forged, for no title can be made by, through, or under a forgery (t). Thus if an order cheque is stolen after indorsement by the holder, and is transferred by the thief, without further indorsement, to a holder who takes bona fide and for value, then the latter has a good title; but if the thief has forged the indorsement of the owner, and has then transferred the cheque, the transferee does not obtain any title or property in the instrument, for he does not become a holder in any sense of the word. It is a case of no title, not of a defective title. Negotiability compared with Assignability. The true meaning of negotiability can best be understood by a consideration of the difference between negotiability and assignability. It has already been stated that under the Common Law choses in action are not assignable, but the rule of equity now prevails in the Courts, under which effect is given to assignments of debts and other choses in action. An equitable assignment may be made orally or in writing, provided there is evidence of an intention to transfer the benefit of the subject matter, and the debtor is given to understand that the right to the benefit has been transferred. The Judicature Act, 1873, and certain other Acts, provide that a debt or other chose in action may be legally assigned so as to enable the assignor to sue in his own name, subject to the fulfilment of certain conditions (u). The following comparative table of the essential differences between legal (t) See post, pp. 104 and 118. (u) See ante, p. 57. assignability and negotiability will serve to bring out the principal characteristics of the latter: A practical example will serve to illustrate the foregoing distinctions: A owes B £50, and gives B a written acknowledgment of the obligation in the form of an I.O.U. B can assign this chose in action to C by an assignment in writing on giving notice in writing to A, but C's right to the £50 is subject to any set-off or counterclaim which A may have against B. If, however, A gives B a promissory note for £50, B may transfer the note to C, by mere delivery if it is payable to bearer, or by indorsement and delivery if it is payable to order, and provided C takes the instrument in good faith (whether for value or not), he can claim payment of the £50 from A, and is not affected by any claim A may have against B. Negotiability compared with Transferability. The foregoing example will serve also to illustrate a further important distinction; that between negotiability and transferability. Many instruments, which are not negotiable, may be passed from hand to hand for value without the formalities of assignment in such a way that the property in them is transferred from one person to another. Such instruments are transferable : if everything is in order the transferee obtains a good title, but the absence of negotiability means that the transfer is made subject to equities," and the right of the transferee is liable to be defeated by any prior defects of title or by any defences which can be set up by prior holders. An extremely appropriate instance is that of the British Postal Order, on the face of which are printed the words, "Not Negotiable." In spite of this warning that the instrument is not negotiable in its origin, it is well known that these orders are frequently passed from hand to hand for value: such transfers are perfectly valid so long as all parties act honestly and in good faith, but the intervention of theft, fraud, or illegality is sufficient to defeat the right of any subsequent holder of one of these orders. For a certain period during the war, however, postal orders were made negotiable |