delivered the opinion of the Court,
The main question involved in this cause, is the extent of the liability of private corporations, for the acts of their agents, done within the scope of their employment, expressed or implied.
*65The inquiry is of peculiar interest, not because of any novelty of principle, but on account of its application to a class of corporations, which have multiplied with amazing rapidity, in modern times, and absorbed a vast proportion of the capital and commerce of the country.
As the relation of principal and agent is common to all classes and conditions of life, the principles which govern it are of universal application.
All persons, natural and artificial, capable of entering into this relation are subject to its laws. From the humblest position of domestic service, to the highest grade of financial or commercial employment, a common principle controls its obligations.
The maxim, “qui facit per alium facit per se,” on which it is said the whole law of principal and agent rests, is based on the instinct of natural justice ; that in all employments and business of men, those who create or appoint agents for their own convenience and advantage, should he liable for their acts of omission or commission, in the course of their employment.
From considerations' of policy, public corporations, such as States or municipalities, are exempt in a great degree from responsibility for implied authority, founded oñ the conduct of those they employ; but private corporations, like the individuals who compose them, are held to rigid accountability for the acts of those whom they have held out to others as worthy of trust.
The record contains six bills of exceptions, taken by the appellant; the first five, to the rejection and admission of certain evidence ; the sixth, to the rejection of the prayers of the appellant, and the granting of those of the appellee.
The last exception presenting questions of law, which are peculiar to and govern the case, and the preceding exceptions, such only as are incidental, we shall examine them inversely.
*66As the pleadings contain a summary of the facts and the issues to which the prayers apply, a synopsis of them will be a proper preliminary.
The suit was instituted on the 1st of April, 1871, in the Superior Court of Baltimore city, by the' appellant against the appellee, for the refusal of the latter to issue to the former, certain new'certificates of stock, in lieu of others previously issued to and held by the appellant, and presented for renewal, in pursuance of notice requiring the holders of stock to present and renew their certificates.
The narr. contained six counts — the first, second and third for refusing to renew a certificate of 200 shares, issued the eighth of April, 1870, — the fourth, fifth and sixth for refusing to renew a certificate of 350 shares, issued the 2nd of October, 1869.
The gist of these several counts is referred to and traversed by the pleas.
The defendants pleaded to the first and fourth counts, that the certificates in said counts mentioned were spurious and not genuine, as the name of the president of the Parkersburg' Railroad Company, upon the face of said certificates, is not the genuine hand-writing of said president. To the second and fifth counts, that in issuing the certificate mentioned in said counts, the same being spurious and not genuine, inasmuch as the name of the president is not the hand-writing of the president, the agent of the said company, mentioned in said count, acted without the scope of his employment. To the third and sixth counts the defendants deny that they have prosecuted their business, in the matter of issuing certificates of stock, in a grossly unskilful and improper manner, and with want of proper care, skill and diligence.
The defendants afterwards filed additional pleas, alleging that the certificates mentioned were issued without *67authority and fraudulently, and not for the use and benefit of the defendants, but for the use and benefit of the agent.
To the additional pleas the plaintiff (the appellant) replied that John L. Crawford was the treasurer and transfer agent of the defendants, and placed in sole charge of its office in Baltimore, and in possession of their books, containing certificates of stock, signed in blank by the president, and in issuing the certificates, Crawford acted in the exercise of a power conferred upon him by the defendants as their treasurer and transfer agent; that the plaintiff advanced his money upon the collateral security of the certificates, without any knowledge or suspicion that Crawford as treasurer and transfer agent, was acting fraudulently, and that the defendant is estopped from saying the certificates were fraudulently issued, etc.
For replication to the defendants’ second amended plea, the plaintiff said, that whether said certificates were fraudulently issued by Crawford, without lawful authority or not, or whether they were issued for his use and not for the benefit of the defendants, or whether the defendants received any benefit, nevertheless the plaintiff was entitled to maintain his aetion, because Crawford, in issuing the certificates, acted within the scope of his employment as treasurer and transfer agent.
The issues made by the pleadings, briefly expressed, are as follows:
1st. Whether the certificates of stock alleged to be issued by the appellees to the appellant were genuine or spurious ?
2nd. Whether they were issued by the treasurer and transfer agent within the scope of his employment?
3rd. Whether the appellees conducted their business in the matter of issuing the certificates of stock in a grossly unskilful manner, and without due earn and diligence?
*684th. Whether the certificates were issued without authority and fraudulently by the treasurer and transfer agent ?
5th. Whether the appellees were estopped hy the facts and circumstances of the case from denying the authority of their agent and the genuineness of the certificates ?
Some of these issues present, perhaps, questions of law as well as of fact, but all errors of pleading were waived, and it was agreed that either party might present, for the judgement of the Court, any question that the facts might authorize.
The appellant’s prayers, upon the hypothesis, that the facts contained in them respectively are proved, without referring to them specifically, present the following propositions substantially, viz:
1st. The appellee is responsible to the appellant for the amount which he has lost through the act of its agent, whether the certificates of stock upon which the loans were made, have the genuine signature of the president, or whether they are forged, or whether the money went into the treasury of the appellee, or into the pockets of Crawford, if the certificates were issued in the course of, and within the scope of his employment as agent.
2nd. That the appellee is estopped from denying the facts set out in the certificate issued by its agent, and .authenticated by its seal, in the due course of his employment and within the scope of his authority.
■ That the corporation cannot set up the fraud of its own agent as a defence, because the act of the agent is its own act, and such defence would be relying on its own fraud.
3rd. That the negligence of the appellees, in the management and conduct of their corporate affairs, contributed to the perpetration of the frauds upon the ap*69pellant, and concludes them from denying their responsibility for the acts of their agent.
The appellee’s prayers negative these propositions, and are generally the converse of them.
The questions involved in them are thus epitomized in the appellee’s brief.
1st. That no recovery can be had under any circumstances, on the certificates offered in evidence, without proof of the genuineness of the signatures of the president and treasurer, and of the seal of the company.
2nd. That no recovery can be bad, even if the certificates were genuine, as regards the seal and signatures, and in other respects, if they were issued by Crawford for his own benefit, without authority; and that there is nothing in the evidence to estop the defendants helow from setting up a want of authority.
3rd. That if the said certificates gave to Crawford no right which he could enforce against the company, the hypothecation of them to the plaintiff helow, his bailee, could confer no rights which he did not possess himself.
The appellant’3 prayers are predicated on the theory of a general agency; the appellee’s on a special or limited authority.
In the very exceliant compendium of Mercantile Law, by Smith, the rights of third persons against principals are very clearly and forcibly defined, as follows:
“ As far as the agent’s authority extends, he has a right to bind the principal to third persons. Now his authority may, as we have seen, be either expressly given or. inferred from the acts of his supposed principal. When it is expressly given, there can be no doubt as to its extent, except from the uncertainty of words employed in delegating it. When, however, it is to be inferred from the conduct of the principal, that conduct furnishes the only evidence of its extent as well as of its existence; and in solving all questions on this subject, the general *70rule is, that the extent of the agent’s authority is (as between his principal and third parties,) to be measured by the extent of his usual employment, for he who accredits another by employing him, must abide by the effects of that credit, and will be bound by contracts made with innocent third persons, in the seeming course of that employment, and on the faith of that credit, whether the employer intended to authorize them or not; since where one of two innocent persons must suffer by the fraud of a third, he who enabled the third person to commit the fraud, should be the sufferer.” Smith’s Mer. Law, 56, 57, (London Edition, 1834.)
This principle is applied to cases respecting notes or bills, which, if drawn, endorsed or accepted by a clerk, who has been previously allowed to do so, bind the master, though the money never came to his use; and to sales and guarantees ; in a word, to every species of mercantile transaction; and whether the agent have or have not been dismissed from his employer’s service, provided, that the third party had no reason to be aware of the determination of his employment. Vide Prescott vs. Flinn, 9 Bing., 21; Boulter vs. Arlesdon, 1 Sel., 234; Barber vs. Gingell, 3 Esp., 60; Haughton vs. Ewbank, 4 Camp., 88; 12 Mod., 346, cited by Smith.
The American doctrine on this subject is announced by Story, in terms equally emphatic and comprehensive, viz :
“It is a general doctrine of law, that although the principal is not ordinarily liable (for he sometimes is,) in a criminal suit, for the acts or misdeeds of his agent, unless, indeed, he has authorized or co-operated in those acts or misdeeds; yet, he is liable to third persons in a civil suit, for the frauds, deceits, concealments, rnisrep-' resentations, torts, negligences, and other malfeasances, or misfeasances, and omissions of duty, of his agent in the course of his employment, although the principal did not authorize, or justify, or participate in, or indeed *71know of such misconduct, or even if he forbade the acts or disapproved of them. In all such cases the rule applies respondeat superior; and it is founded upon public policy and convenience ; for in no other way could there be any safety to third persons in their dealings, either directly with the principal, or indirectly with him, through the instrumentality of agents. In every such case the principal holds out his agent as competent and fit to be trusted, and thereby in effect, he warrants his fidelity and good conduct in all matters within the scope of the agency.” Story on Agency, 7th edition, ch. 17, sec. 452; Penn., Del. & Md. Steam Nav. Co. vs. Hungerford, 6 G. & J., 291; Lord Holt’s opinion in Lane vs. Cotten, 12 Mod., 490; Paley on Agency, by Lloyd, 294, 301, 307; Bac. Abrid., Master and Sert. R. These principles apply as well to private corporations, as to natural persons.
“As natural persons are liable for the wrongful acts and neglects of their servants and agents, done in the course and within tbe scope of their employment; so are corporations upon the same grounds, in the same manner, and to the same extent.” Angell and Ames on Corps., ch. 9, sec. 310; Albert vs. The Savings Bank of Balto., 1 Md. Ch. Dec., 407; Thatcher vs. Bank of N. Y., 5 Sand., 121; Thompson, vs. Bell, 10 Exch., 10, (26 Eng. L. and Eq., 536;) Bargate vs. Shortridge, 5 Ho. of Ld. Cases, 297, (31 Eng. L. & E., 44;) Nat. Exch. Co. vs. Drew, H. L., 1855, (32 Eng. L. & E., 1;) Stevens vs. Boston and Maine Railroad, 1 Gray, 277; Blackstock vs. N. Y. & Erie R. R. Co., 1 Bosworth, 77.
These obligations spring, as we have said, from the dictates of natural justice, the policy of the law, and the necessities of society; they are common to all civilized communities, ancient and modern, and derived mainly from the civil law. In commercial countries, where capital is centered in large corporations, whose stock is *72the subject of continual change by sale or hypothecation, operations which must be conducted by the agency of individuals whose powers can be ascertained only by the extent of their usual employment, the importance of maintaining'these principles can scarcely be over-estimated.
It is conceded in this case that the appellees are a corporation, created by the State of West Virginia, that immediately after the re-organization of the company, it made an agreement with the Baltimore and Ohio Railroad Company, by which the latter undertook to work the Branch Road, and thereafter the management of the road became, on the part of the. Parkersburg Company, simply a supervision of accounts between the companies.
“That at the first stockholders’ meeting, held the 10th of May 1865, the following directors were appointed, and continued in office by annual re-election, until August 1870, when Crawford’s frauds were discovered:”
P. G-. Van Winkle,
James Cook,
John R. Murdock,
George Neale, Jr., Of Parkersburg,
Johns Hopkins,
Col. O’Donnell,
Wm. McKim,
C. M. Keyser,
JB. DeFord,
Thos. Swann,
John W. Garrett, Of Baltimore.
Two standing committees were appointed, viz :
Messrs. McKim, Garrett and Murdoch, Committee of Finance; Messrs. DeFord, O’Donnell and Cooke, Committee on the Road.
*73At this meeting, P. Gr. Van Winkle was appointed President, W. W. Van Winkle, Secretary and John L. Crawford, Treasurer and Stock Transfer Agent.
The following By-Laws or Resolutions were adopted at this meeting.
Resolved, “That the officers of this company, subordinate to the president, shall be a treasurer and Secretary, who shall hold their respective offices during the pleasure of the Board. The duty of the Treasurer, in addition to the usual functions of such an officer, shall he to keep the ledger and other hooks, relating exclusively to the ownership and transfer of the capital slock of the company ; to prepare and countersign all certificates of ownership of stock and scrip hereafter issued, and to receive and enter upon the proper hooks, all transfers thereof. He shall affix an impression of the seal of the company to all certificates of ownership of stock and scrip properly issued hy the company, and, signed hy the president, and also, to such other instruments, and papers, as are required by law, or the by-laws of the company, or may be directed by the Board, to be under seal. He shall give bond, with security to be approved by the president, in the penal sum of ten thousand dollars, conditioned for the faithful performance of the duties of his office, during his continuance therein, and for accounting for, and paying over to his successor, all money, security and other property, which may come to his hands by virtue thereof. Until the further order of the Board, he shall keep his office in the city of Baltimore; and in case of absence or inability to act of the Secretary, shall discharge such duties of the latter, as may be required by the Board or President. His salary shall be at the rate of two hundred and fifty dollars per annum.
Resolved, “ That the president and treasurer are hereby authorized and directed to issue certificates of ownership of slock and scrip directly, to such parlies as have heretofore *74assented to the terms of re-organization, whether. they have or have not their respective certificates of allotment, and also, to those who shall hereafter so assent, in the said terms on the surrender to be cancelled of the stock certificates, bonds, and other evidences of debt of the late NorthWestern Virginia Railroad Company, owned or held by them respectively.
Resolved, “That the capital stock of this company, be increased by the addition of so many shares of the par value of fifty dollars each, to the amount of the capital stock of the late North-Western Virginia Railroad Company, as may be necessary to cover the stock issued, and to be issued, in redemption of the obligations, debts and stock of the said late company, the gross amount of the stock so issued to be deemed and taken to be the cost of the works and property in the hands of this company, agreeably to the resolutions of the stockholders, adopted at an adjourned meeting held on the 24th day of May last.
Resolved, “ That the seal prepared for the use of this company and now exhibited, having as a device a steamboat, locomotive, etc., with the legend, ‘Parkersburg Branch Railroad Company,’ be, and the same is hereby, adopted as the common seal thereof, and shall remain in the custody of the president, and shall be affixed to all certificates of stock and scrip, and all other instruments requiring a seal executed on the part and by authority of this company.”
But one m'eeting of the directors was held between that of Sept. 1865 and August 1870, viz., on the 17th of Sept. 1867, at which no business of importance was transacted.
It- has been argued on the part of the appellee, that these by-laws conferred a special authority only on the treasurer and transfer agent, which all persons dealing with him were bound at their peril to know. This, however, is not the doctrine of the text-writers or best ad*75judged cases, as to private corporations. By-laws of a private corporation are generally binding upon none but its members or officers.
These they obligate upon the ground of their express or implied assent to them. Angell and Ames on Corps., sec. 359, and authorities in note.
By-laws of a Public Municipal Corporation are regarded as public acts. Vide Mayor, &c. of Baltimore vs. Reynolds, 20 Md., 1.
These by-laws or resolutions prescribe and define the powers and duties of the treasurer and transfer agent, as between the corporation and himself, and all persons having knowledge of their method of doing business. Angell and Ames on Corps., ch. X., sec. 325, 359 — citing Cummings vs. Webster, 43 Me., 192; Bank of Wilmington vs. Wollaston, 3 Harrington, Del., 90.
By these, “the treasurer is made the custodian of the ledger and other books relating exclusively to the ownership and transfer of the capital stock of the company,” he is authorized “to prepare and countersign all certificates of ownership of stock and scrip thereafter issued,” and “to receive and enter upon the proper books all transfers thereof;” “to affix an impression of the seal of the company to all certificates of ownership of stock and scrip, properly issued by the company and signed by the president.” In a word, he is constituted the executive of the corporation, with large discretionary powers. But an agent’s powers (as we have seen) do not depend solely on the express letter of his instructions. “Their extent, as well as existence,” as said by Paley, “are often determined by the conduct of the principal towards the agent, and measured by his usual employment.”
There was no limit in this case as to the amount of stock to he issued.
It is conceded that no objection is made to the certificates on the ground that they were over-issues.
*76' The seal of the corporation and signatures of the treasurer and transfer agent are admitted to be genuine.
The first of the appellant’s and appellees’ prayers, are based on the hypothesis that the signatures of both president and treasurer are genuine. Yet the appellees insist, notwithstanding they may be genuine, if the jury shall find that the certificates were issued by the treasurer, fraudulently and surreptitiously, for his own use and benefit and not for the use and benefit of the appellees, the appellant is not entitled to recover.
This theory denies all liability of the principal for the fraudulent act of the agent, unless that act enures to the benefit of the former; a proposition which cannot be adopted without abandoning all the principles previously cited from the text-books, supported by a long series of decisions.
Paley, in his chapter on the obligation of principals, for the neglect or fraud of their agents, after announcing the proposition, that “if a man employ an agent in the commission’ of a fraud, he is clearly liable for it himself,” adds, “And employers are also civilly liable for frauds committed by their servants or agents, without their authority, if done in their employment,” for which he cites, 1 Str. 653, S. P; (per Lord Ellenborough in Crockford vs. Winter, 1 Campb., 127; Paley, ch. 3d, 302.)
The ground of liability is not that the principal has been benefited by the act of the agent, but that an innocent third person has been damaged by confiding in the agent, who was accredited by the principal, as worthy of trust, in that particular business.
In the case of Jones vs. Perchard, 3 Esp. Cases, 507, cited by Paley in note (o) p. 300; a sheriff was held liable for money wrongfully taken by his bailiff, under color of his office, in an action for money had and received; “but the plaintiff (it was held) need not show that- the money came to the sheriff’s hands.”
*77The modern case of the Bank of Kentucky vs. The Schuylkill Bank, decided by the late president, Judge King, in the Court of Common Pleas of the First Judicial District of Pa , and affirmed by the Supreme Court of that State, furnishes analogies, and establishes principles, which will aid us much in arriving at correct conclusions, in the present case.
The Bank of Kentucky, in 1835, resolved to establish agencies in New York, Philadelphia and New Orleans, under their by-laws, relating to the transfer of stocks. The Schuylkill Bank, (of which Hosea J. Levis, was Cashier,) was appointed the agent at Philadelphia.
By the authority conferred on the Schuylkill Bank, that bank could only place on their stock ledger, such shares as were originally subscribed at Philadelphia, or those transferred by warrants from the principal Bank at Louisville, and the agency at New York.
It was alleged, that if the Schuylkill Bank had acted faithfully as transfer agent, no one could, or would have been permitted, to transfer stock where there was no stock to his credit on the books. It was further alleged, that various persons, having no stock on the books, were permitted to transfer shares, purporting to be shares of the Bank of Kentucky, on the ledger of the agency at Philadelphia, and among others, H. J. Levis, the cashier, had transferred 13,37.4 shares when he had none, or any authority from those who had, whereby the Bank of Kentucky was charged with stock amounting to one and a quarter millions of dollars ; which they were after-wards compelled to redeem or recognize as genuine.
These over issues were charged to have been made for the use and benefit of the Schuylkill Bank, and the greater part of the proceeds appropriated to the purposes of that bank.
The Bank of Kentucky claimed to be reimbursed by the Schuylkill Bank, for the amount of the spurious issues.
*78The Schuylkill Bank denied the agency, or that the . over-issues were made with their knowledge, privity and consent; insisted that Levis, in his individual capacity, was such agent exclusively; and with Levis in that relation, the Schuylkill Bank, had no connection.
The case was discussed under two prominent points:
1st. That the Schuylkill Bank, was in law and in fact, the transfer agent of the Bank of Kentucky, and responsible for the defaults charged in the bill.
2ndly. That if the first was not sustained, the Schuylkill Bank, under the circumstances, was liable to pay over to the complainants the proceeds of the sale of the spurious stock of the Bank of Kentucky, deposited by Levis in the Schuylkill Bank.
Among other arguments for the defendants, it was insisted that the complainants' right to recover, depended upon their legal liability for the frauds of their agent, and they were not liable, because the capital stock of the Bank of Kentucky, was limited to 50,000 shares, and the spurious shares were in excess of it, and the principal, much less the agent, could not enlarge the capital of the corporation.
3rdly. Because the holders of the spurious stock, were bound to inquire into the authority of the agent, which required certain acts to be done, viz : the surrender of the old certificates, before new certificates could be issued.
Having shown that these preliminary provisions were intended for the .protection of the corporation from embarrassment between legal and equitable claimants to the same stock, and secure them for liens or claims on its stock, and referred to numerous decisions to sustain those views; the learned Judge returns to the argument thus: c‘Who conducts the preliminaries resulting in the issue of the new certificates? Why, the bank itself, or what is the same thing on this occasion, its agent lawfully constituted for this purpose. The idea, that the *79purchaser of stock is to lose the property he has honestly paid for, because the bank has not done its duty to itself is unreasonable to the last degree. It would seem strange, indeed, to an unsophisticated understanding, if such a notion could be invoked successfully to save the Bank of Kentucky from the results of its own misapplied confidence in a faithless agent. The true doctrine on this subject is, that where one of two innocent persons is to suffer for the tortious act of a third, he who gave the aggressor the means of doing wrong, must also bear the consequences of the act. If, therefore, the Bank of Kentucky was responsible for the frauds of its agent, there is nothing in the circumstances under which the holders of the spurious stock received their certificates, which exempts it from this liability.”
After an exhaustive argument, in which many of the text-books and cases previously referred to, are cited, the learned Judge concludes that branch of his opinion in these emphatic terms: “The principal holds out his agent as competent and fit to be trusted, and thereby in effect, be warrants his fidelity, and good conduct in all matters of the agency.” The Bank of Kentucky, was then responsible for the frauds of its agent, whoever that agent toas, and did no more than justice required, and law would surely have coerced, when it compensated the holders of the spurious stock.
The fact that the proceeds of the spurious stock enured to the benefit of the Schuylkill Bank, does not seem to have been relied on by the Court; and referring to the second head, whether supposing Levis to have been the agent of the complainants, the defendants are not bound to pay the complainants the amount received from the sale of the spurious stock, they say, it is unnecessary to decide it, the decision of the first, superseding the necessity of such inquiry.
A very analagous case is that of the N. Y. and N. H. R. R. Co., against Schuyler and others, 34 N. Y., 61-78, *80decided.by the Court of Appeals of New York in 1865, in which all the previous cases in that and other States as well as in England were reviewed. It is a compendium of the law as to the liability of corporations for the acts of their agents done within the scope of their employment, or resulting from negligence of the principal, amounting to “ estoppel in pais.”
Adopting the general principle before announced, that a corporation is liable to the same extent and under the same circumstances as a natural person, for the consequences of its wrongful acts, and will be held responsible in a civil action at the suit of the injured party, for every grade and description of forcible, malicious, or negligent tort or wrong, which it commits, however foreign to its nature or beyond its granted powers, the wrongful transaction may be, it declares, lCthe incapacity to create the spurious stock would be no defence to. an action for damages for the injury.”
On the .contrary, that very incapacity, since it would render the certificate or transfer, a fraud or deceit, would itself be the cause of the injury, and the basis of recovery. ]No Court would hear the corporation assert its wrongful act was beyond its chartered limits, and therefore ineffective to charge it with the injurious consequences of fraud. But in this case, the false certificates were issued, and the spurious stock transferred by an officer of the corporation. A corporation aggregate being an artificial body — an imaginary person of the law — so to speak, is from its nature incapable of doing any act, except through agents, to whom is given by its fundamental law, or in pursuance of it, every power of action it is capable of possessing or exercising, hence it is liable to the same extent, and under the same circumstances that a natural person is chargeable with the acts or negligence of his agent, and if the agent conducts himself fraudulently, the same principles prevail where the principal is a corporation. ’
*81From these premises, the following among other conclusions are reached:
“ Where the principal has clothed his agent with power to do an act upon the existence of some extrinsic fact necessarily and peculiarly within the knowledge of the agent, and of the existence of which, the act of executing the power is itself a representation, a third person dealing with such agent in entire good faith, pursuant to the apparent power, may rely upon the representation, and the principal is estopped from denying its truth to his prejudice.” North River Bank vs. Aymar, 3 Hill, 262; N. Y. & N. H. R. R. Co. vs. Schuyler, et al., 34 N. Y., 73.
As a consequence of these principles, the Court held that certain defendants who had acquired spurious stock from Schuyler, although not entitled to become stockholders, were entitled to indemnity from the company for the fraudulent acts of their president and transfer agent, whose authority they were estopped from denying by the facts and circumstances of the case. 34 N. Y. Reports, 50, 51, 53, 61.
In the very recent case of Titus vs. The President, &c., of the Great Western Turnpike Road, 5 Lansing, 250, 255, the corporation was held liable for money advanced to the treasurer by an innocent third person, upon spurious certificates of stock, issued by the treasurer to himself, and signed by him, in conformity with their by-laws. In that case the Supreme Court of New York said: ‘'The liability of the principal for such acts of its agent was distinctly affirmed in the N. Y. & N. H. R. R. Co. vs. Schuyler, and in Bruff vs. Mali, (36 N. Y., 200.”)
The cases cited by the appellees, prior in date, and in conflict with the principles announced in 34 N. Yk. and 5 Lansing, are of course overruled. We do not think the case of Swann vs. The North British Austrn. Compy. in the Court of Exchequer Chamber, 46 Law Journal, 273, *82conflicts in principle, with the cases above cited; but differs rather as to the degree of'negligence, which constitutes estoppel in pais. The broker in that case, who forged the instruments, was not clothed with a general authority to represent his principal, and conduct their business, as in the present case.
The case of the Bank of Ireland vs. The Trustees of the Evans’ Charities, 5 Hs. of Lords Repts., 389, relied on by the appellees, is of the same general character. The stock sought to-be transferred was not that of a corporation issuing stock, of which the defaulting agent was the secretary, but stock held by the trustees in the Bank of Ireland. Grace, the secretary of the trustees, was not transfer agént of that stock, or authorized to affix the seal of his principals to any instruments; “He took advantage of his being secretary to the trustees, and thereby having the custody of the seal.” The power to order and dispose of the seal of the corporation, and the use and application thereof, was vested in three trustees; Crawford, on the contrary, had authority to affix the seal of the company to all certificates of ownership of stock, properly issued by the company and signed by the president. The doctrine laid down by that case is, “that the negligence which would deprive the corporation of the right to insist the transfer was invalid, must be negligence in, or immediately connected with the transfer itself,” a position, in our opinion, not inconsistent with the facts on which the prayers of the appellant are based.
Since the argument of this cause, the case of the Queen on the prosecution of Robson vs. The Shropshire Union Railways and Canal Compy., in the Exchequer Chamber, has been reported in 8 Queen’s Bench, (Law Rep.,) 420, 421.
This was an application for a mandamus, requiring the defendants to register certain certificates of stock held by the administratrix of an equitable mortgagee of *83certain shares, standing in the name of the equitable mortgagor, who was a trustee of the stock and a director of the defendants.
The Queen’s Bench, consisting of Cockburn, C. J., Mellor, Hannhn and Quain, J., refused the mandamus, but on appeal to the Exchequer Chamber, their judgment was reversed, and it was held “that the defendants are, under the circumstances of this case (as between them and the prosecutrix) the persons who must suffer for the consequences of a breach of trust of Gf. Holyoake, (the trustee,) which consequences are attributable to their giving him, or rather perhaps negligently allowing him to obtain, he being a director, indicia of property which he did not possess.”
Numerous other authorities establish by analogy the principles above announced; among these may be cited 2 Hill, 461, the case of the U. S. vs. Davis, and 10 Wallace, 649, Merchants’ Bank vs. State Bank. In the former, a director of the bank took a note for discount, and appropriated the proceeds to his own use; in the latter, a cashier certified that a person having no deposit, had gold on deposit; in both cases the bank was held responsible. So also in 10 Gray, 532, the case of the Atlantic Bank vs. The Merchants’ Bank — a bank whose teller certified a check when the drawer had no funds, was held responsible for the act of its officer.
In the case of Lister & Supplee vs. Allen, 31 Md., 547, this Court has adopted the language of Judge Story in his work on Agency, sec. 443, as follows: “But the responsibility of the principal to third 'persons is not confined to cases where the contract has been actually made under his express or implied authority. It extends further, and binds the principal in all cases where the agent is acting within the scope of his usual employment, or is held out to the public or to the other party, as having competent authority, although in fact he has, in *84the particular instance exceeded or violated his instructions, and acted without authority. For in all such cases, where one of two innocent persons is to suffer, he ought to suffer who misled the other into the contract, by holding out the agent as competent to act, and as enjoying his confidence.”
•cSo if the principal should clothe the agent, although a mere special agent, with all the apparent muniments of an absolute title to the property in himself, the principal would be bound by the acts of the latter; as, for example, if he should clothe him with the apparent title to property by a bill of lading of a shipment, as by making the shipment appear to be on account of the agent, or should trust him with negotiable securities, endorsed in blank, a sale or disposal thereof by the agent, although in violation of histprivate orders, would bind the principal, and give correspondent rights and remedies to third persons, who become ¿oran fide possessors under such sale, or other act of disposal, against him.”
The parallel between the instances above cited, in which the principal’s liability was fixed, and the facts upon which the appellant’s first and second prayers are based, is too obvious to require comment. If the principal is civilly responsible for the frauds of his agent, as seems to be settled by the foregoing authorities, it cannot be material what shape the fraud assumes. It would be illogical to suppose that the liability of the principal is lessened by the magnitude of the fraud — that the greater the breach of trust on the part of the agent, the less the responsibility of his employer.
Every species of “crimen falsi” not accompanied with force — theft, forgery and perjury, are only frauds of a deeper dye. To exonerate the principal because the fraud of his agent amounted to a felony, would violate the reason of the rule, “respondeat superior,” deprive innocent third persons of all indemnity, expose them to *85the risks of fraudulent devices, most dangerous, because most difficult to detect, and leave them without any protection, other than the fear of prosecution and punishment.
The common law, which, in some cases, suspends or merges the civil remedy against the culprit, does not, in any case, take away the remedy against those who are expressly or impliedly responsible for him.
The decisions of the highest Courts of Pennsylvania and New York, establish the principle that the liability of the corporation is not limited to acts within its chartered powers, done by its agents, but they are responsible notwithstanding the act is beyond its legal capacity to do or contract, hence, although the stock issued by Schuyler and Davis was spurious, that is to say false, the principals were held liable in damages to innocent third persons.
The act of Crawford in issuing stock without the genuine signature of the president, is not a greater violation of the charter of the appellees, than the over-issues of stock in the cases cited. Both were frauds on the respective corporations and their stockholders; the act of Crawford differs only in form.
It is essential to public welfare, that where the acts of acknowledged agents are accompanied with all the indicia of genuineness, and issued for a valuable consideration, the principal should be responsible, whether the indicia are true or not. ¡Such liability would conduce to greater vigilance on the part of the principal, greater fidelity in the agent, and greater security to all dealing with them.
It necessarily results, we think, from the foregoing reasoning, and the cases cited, that the appellant’s first, second, third and seventh prayers, should have been granted, and the appellees’ counter proposition, viz: first, third, fourth and seventh rejected.
The conclusion arrived, at as to the appellant’s first, second, third and seventh prayers renders it unnecessary, *86in our judgment, further to discuss the prayers involving the question of negligence which has been incidentally referred to in the cases cited, as t.he ground of “estoppel in pais.” Independently of that aspect of the case, there was enough in the facts mentioned in the prayers of the appellant above enumerated, which, if found by the jury, would have entitléd the appellant to recover.
The appellee’s second prayer, which places the appellant in the position of bailee of Crawford, and asserts he has no other or better title than Crawford, at the time of the pledge, is founded, we think, on a misapprehension of the true relation between the appellant and appellee. It does not appear that the loan was made to Crawford, or that the certificates of stock were ever held by him; on the contrary, the loan was made to one Rich, without knowledge of the appellant until Crawford’s difficulties became public, that he was the person for whom Rich wanted the money.
To constitute the relation of bailor and bailee, there must have been evidence of title in the bailor, to the certificates in question, and a transmission of that title to the appellant, through the bailor. The agent, Rich, did not disclose his agency or borrow the money, upon any specific certificates already issued and held in the name of Crawford, but upon certificates which he procured to be issued directly to the lender, as of the date of the loan.
There was no privity between the appellant and Crawford. The appellant does not claim through him, but through the certificate issued by him as the agent of the corporation. The action is not “ex contractu” but “ex delicto;” it does not seek to enforce the contract contained in the certificate, but supposing it to be genuine, it claims damages for the non-performance of a public duty, which the corporation by its charter assumed; or if not genuine, for the loss and injury inflicted on the *87appellant, by the fraud and tort of the agent of the appellee. As said in 34 N. Y., the fraud constitutes the cause of action, and no Court would suffer a defendant to set up the fraud of himself, or his agent (which is by construction his own act) as a bar to the action, otherwise, fraud would be invincible and incurable.
The measure of damages, prescribed by the modification of the Court, of the appellant’s fifth prayer, is as we understand that modification, the proper standard.
By that it is left to the jury to determine, whether under all the circumstances, without regard to the causes of depreciation of the stock (if any) at the time of the loan, the appellant is entitled to recover the amount of the money advanced on the stock with interest, or the amount of the market value of the stock, with interest, (if they deem it proper to allow interest;) but in no event to allow more than the amount of the money loaned with interest, if the value of the stock should exceed said loan and interest.
The exceptions to the rulings of the Court in respect to the evidence referred to in them will now be considered.
The testimony of J. L. Johnston, the rejection of which was the subject of the appellant’s first exception, being supplied by the admission of the same evidence on the part of the appellee, it is unnecessary to comment on its character and competency, further than to say, such testimony was pertinent and admissible.
The second bill of exceptions is waived by tbe appellant.
The third involves the admissibility of the record of the proceedings of the directors of the defendant’s Company, of the 10th of August, 1870.
By agreement of counsel, the record of the proceedings of the appellee’s company, is made a part of the record of this case. It appears from this, that at a meeting of *88the directors of the company, held in August, 1870, after the discovery of Crawford’s frauds, a report was made by the Finance Committee, setting out in detail the extent of Crawford’s over-issues of stock, etc., — and that one of the certificates, held by the appellant, did not appear upon that list.
The plaintiff offered to read the proceedings of the 10th of August, (which it is presumed are the proceedings referred to in the agreement of counsel, and which are described as of August, 1870,) the bill of exceptions does not state for what purpose, but the appellant argues, “ That they were proper evidence to show what stock was reported to the board of directors of the defendants as fraudulent, and to let the jury see (which was the fact) that some of the stock sued upon in this case had not been so reported, they might consider that fact as some evidence of its authenticity.”
The plaintiff read from the record of the various meetings of the stockholders and directors of the defendant prior to August the IQf/i, 1870, without objection ; but when he offered to read the proceedings of the 10th of August, the defendant objected and the Court sustained the objection.
“Books of a corporation are, at common law, regarded as public to a certain extent with respect to its members, but private with respect to strangers. A rule for a limited inspection of the documents of a corporation will be ordered by the Queen’s Bench, provided it is shown such inspection is requisite with respect to a suit then instituted, or at least to some specific dispute or question depending, in which the applicant is interested, but in this case the inspection will be granted to such an extent only as may be necessary for the particular occasion.”— 2 Taylor s Evidence, sec. 1346.
Although the right of the plaintiff, as a member of the corporation, was involved in the issue, the admission of *89the record of the proceedings of the 10th of August, could not have been resisted on that ground, as the proceedings anterior were read without objection. The right of inspection was therefore conceded. The objection must have been the want of pertinency to the issue.
This objection, we think, was not, tenable. The report of the committee on finance that one of the certificates of stock held by the appellant did not appear upon the list of 11 over-issues of the stock of the company,” furnished the strongest negative proof that the certificate referred to was genuine and not spurious.
By Art. 75, sec. 69, of the Code of Pub. Laws, power is vested in the Courts, in the trial of actions at law, on motion made at the first Court after the appearance Court, to require parties to produce copies certified by a justice of the peace, of all such parts of all books or writings in their possession as contain evidence pertinent to the issue, etc., in cases and under circumstances where they might be compelled to produce such original books, or answer a bill of discovery, by the ordinary rules of proceeding in Chancery.
The original being before the Court, the only question remaining was, whether it was pertinent to the issue and such as , would have been subject to production by the modes indicated.
The circumstances in this case required, we think, that the proceedings of the 10th of August should have been submitted to the jury, and the Court below erred in excluding them.
The fourth bill of exceptions was taken to the admission of the evidence of Joseph E. Paine, produced on behalf of the defendant to prove that the signatures of the president, Van Winkle, subscribed to the certificates, were not genuine.
The witness being interrogated as to his means of knowing Yan Winkle’s handwriting, said he had never *90seen him write, nor received any letter from him, nor had he become acquainted with it in the course of business, but his knowledge' on that subject, was derived from an examination of signatures of Yan Winkle, in the two certificate books in evidence, which had been put in his hands by the defendant, for the purpose of enabling him to testify in this case, and that he had carefully examined them, for five or six months, and thus acquired a knowledge of the handwriting of Van Winkle.
The fifth exception was to the admission of the evidence of a photographer and expert in handwriting, and to the admission of photographic copies of certain genuine signatures of Yan Winkle, taken by the witness, some of which were of the size of the original, and others of an enlarged size, and to the admission of his explanations, to show the' differences between the genuine and those alleged to be forged, and to the admission of his opinion derived from a comparison of those copies with the originals, as to the genuineness of the signatures of Yan Winkle, attached to the certificates sued upon in this case.
The plaintiffs objected to the offering of said copies in evidence to be examined by the jury, and to the examination of the witness in reference thereto, as stated ; but the Court permitted said photographic copies to go to the jury as evidence, and also permitted the witness to be examined in reference thereto.
The question presented by these exceptions, although varied in form, is substantially the same, viz: whether the genuineness of hand-writing, can be established by the opinions of a witness, whose , belief is founded upon a mere naked comparison of papers submitted for his examination, “post litem motam.”
In the case of Smith vs. Walton, 8 Gill, 86, Judge Martin, delivering the opinion of this Court, after adverting to the arguments in favor of the admission of evidence of *91comparison, and conceding it had been done in some of the American Courts, declares “it is in conflict with the doctrine of the common law, as enunciated in Westminster Hall.” In another paragraph, he says, “We consider it as the settled rule of the English law, which in this respect, we approve and adopt, that with the exception of ancient documents (an exception standing upon the necessity of the case,) signatures cannot be proved by a direct comparison of hands. By which it is meant, the collation of two papers in juxta-position for the purpose of ascertaining by inspection, if they were written bv the same person.” In support of these views, the remarks of Mr. Justice Coleridge in the leading case of Doe, dem. of Mudd vs. Suckermore, 5 Adol. & Ellis, 730, are cited, viz: “Our law has not during a long course of years, permitted hand-writing to be proved by the immediate comparison by a witness of the paper in dispute, with some other specimen, proved to have been written by the supposed writer of the first. * * * it was familiar to lawyers, that many attempts have been made to introduce this mode of proof, according to the practice of the civil and ecclesiastical laws, but after some uncertainty of decision, the attempts have failed.”
On referring to the case of Mudd vs. Suckermore, it will be found, that the opinion of Mr. Justice Patterson, is especially applicable to the case before us.
After premising that there were only two modes of acquiring knowledge of hand-writing, which enabled a witness to speak in a question of hand-writing, considered sufficient in law, in both of which the knowledge is acquired incidentally and unintentionally, without reference to any particular object; the learned Judge remarks, “ A third mode is now sought to be introduced, viz., by satisfying the witness by some information or evidence, that a number of papers are in the hand-writing of the party, and then desiring him to study those *92papers, so as to acquire a knowledge of the hand-writing, and fix an exemplar in his mind ; and afterwards putting into his hand, the writing in question, and asking his belief respecting it. * * *
“The very foundation of this mode is the establishment of the fact, that, the papers, from studying which the witness is to acquire his knowledge, are the handwriting of the party. Now that fact must be established either by the acknowledgment of the party, or by the information of third persons. I find no express authority that direct comparison of hand-writing is admissible in evidence, but many to the contrary.” (5 Adol. & Ellis, 730; 2 Steph. N. P., 1700.)
Judge Taylor, in his recent work on Evidence, speaking of the former and present law of England on proof of hand-writing, observes:
“Although all proof of hand-writing, except when the witness either wrote the document himself or saw it ■written, is, in its nature, comparison — it being the belief which the witness entertains upon comparing the writing in question with an exemplar formed in his mind from some previous knowledge; the law, until the year 1854, did not allow the witness, or even the jury, except under certain special circumstances, actually to compare two writings with each other, in order to ascertain whether both were written by the same person.”
“The technical rule of the common law, which was certainly not based on common sense, and which was directly, opposed to the practice of our own Ecclesiastical Courts, of our Courts in India, of the French Courts and of the Courts of many of the most enlightened States of America, was happily for the administration of justice, abrogated by the Legislature in the year just named, so far at least as related to trials at nisi prius.” Vide 17 and 18 Vict., ch. 125, secs. 27, 103.
Hence it appears the common law rule excluding evidence by comparison, whether founded on principle or *93precedent, was so established in England as to require a statutory enactment to control the decisions of the Courts The evidence offered in these bills of exception, being of that character, which was held Inadmissible by the common law, as declared by the English jurists, and our own Courts, we are constrained to adhere to the rule as announced in those cases.
(Decided 26th November, 1873.)The testimony of the photographer comes within the same principle as that of Paine. It was offered to establish the forgery of the certificates in controversy, by comparing them with copies (obtained by photographic processes, either magnified or of the natural size) of certain signatures assumed or admitted to be genuine, and pointing out the differences between the supposed genuine and disputed signatures. As a general rule, in proportion as the media of evidence are multiplied, the chances of error or mistake are increased. Photographers do not always produce exact lac-similes of the objects delineated, and however indebted we may be to that beautiful science for much that is useful as well as ornamental, it is at last a mimetic art, which furnishes only secondary impressions of the original, that vary according to the lights or shadows which prevail whilst being taken. It follows from the foregoing that the judgment of the Court below must be reversed and the cause remanded.
Judgment reversed, and
new trial ordered.