The case as I understand it, finds substantially that the plaintiff permitted his agent, Mason, to have possession of the horse, with the indicia of ownership. Undoubtedly, if Mason merely having possession of the horse by the plaintiff's consent, had sold him, the maxim caveat emptor would be held to apply, and the buyer would be bound to see to it that his vendor had a good title. But such was not this case. Here, by the plaintiff's permission, Mason not only had possession of the horse, but also had a bill of sale showing that the title *Page 38 was in him. Mason had been enabled to get this evidence of title to himself by the misplaced confidence of the plaintiff in entrusting him with the money to make the purchase; and when he showed the plaintiff the bill of sale made to him, the plaintiff made no objection, and, as the case finds, arranged with him to keep the horse awhile longer in his own possession.
The case of Pickering v. Busk, 15 East. 38, is a leading case, and nearly if not exactly in point. In that case Swallow, a broker, had purchased for the plaintiff, Pickering, a quantity of hemp, which by the plaintiff's desire was delivered to Swallow by a transfer to him in the books of the wharfinger. Shortly after, another lot of hemp was purchased by Swallow, which was transferred to the name of Pickering, or Swallow, which the court held to be the same as if it had been transferred to the name of Swallow. The plaintiff paid for the hemp. Swallow afterward sold the hemp to Haywood Co., who paid him for it. The plaintiff sued the assignees in bankruptcy of Haywood Co. in trover for the hemp. It was held that the plaintiff, having given to Swallow all the indicia of ownership, could not afterwards be permitted to say that swallow had not authority to sell the hemp.
In the case of M'Neil v. The Tenth National Bank, 46 N.Y. 345 (S.C., 7 Am. Rep. 341), it was held that "When the owner of bank shares delivered to his brokers, to secure a balance of account, the certificate of the shares, indorsed with blank assignment, an irrevocable power of transfer signed and sealed by himself, and the brokers, without his knowledge, pledge the shares with other securities for advances, one who paid the advances at the broker's request, and in good faith received from them the certificate of the shares and the other securities, was entitled to hold the shares as against the owner for the full amount of the advances remaining unpaid after the other securities were exhausted."
RAPALLO, J., in his opinion, says, — "It must be conceded that, as a general rule applicable to property other than negotiable securities, the vendor, or pledgor, can convey no greater right or title than he has. But this is a truism, predicable of a simple transfer from one party to another, where no other element intervenes. It does not interfere with the well established principle, that, where the true owner holds out another, or allows him to appear as the owner of, or as having full power of disposition over, the property, and innocent third parties are led into dealing with such apparent owner, they will be protected. Their rights in such cases do not depend upon the actual title or authority of the party with whom they deal directly, but are derived from the act of the real owner, which precludes him from disputing, as against them, the existence of the title or power which, through negligence or mistaken confidence, he caused or allowed to appear to be vested in the party making the conveyance." He cites the following cases: Pickering v. Busk, 15 East. 38; Gregg v. Wells, 10 Adol. El. 90; Saltus v. Everett, 20 Wend. 267, 284; Mowrey v. Walsh, 8 Cow. 238; Root v. French, 13 Wend. *Page 39 570. In Moore v. Metropolitan National Bank, 55 N.Y. 41 (S.C., 14 Am. Rep. 173), the same doctrine is applied to the case of a purchaser of a chose in action.
As I can place no other construction upon the referee's report than that it finds in this case that the horse and the evidence of title remained in Mason's possession with the plaintiff's consent, I think these authorities, as well as those cited by my brother LADD, abundantly show that the plaintiff is estopped to deny that Mason had authority to sell the horse, and that therefore the exceptions must be allowed.