It is clear that Mason had no authority whatever from Nixon to sell his horse. The only question is, whether the plaintiff left the property in the possession of Mason under circumstances from which the law will infer that he had authority to sell. When the owner of a chattel has by his own conduct enabled his agent to hold himself forth to the world as having not the possession only, but the property, or the right to sell, — that is, when the real owner of goods suffers another to have possession of his property, and of those documents which are the indicia of property, — a sale by such person will bind the true owner. Dyer v. Pearson, 3 B. C. 43. The same principle is laid down in this state, as follows: "When the purchaser knows he is dealing with an agent, it is his duty to inquire into the nature and extent of the authority conferred by the principal, and to deal with the agent accordingly. But when the agency is not known, and the principal has clothed the agent with powers calculated to induce innocent third persons to believe that the agent owned the property, or had power to sell, the principal is bound, and strangers will not suffer." Towle v. Leavitt, 23 N.H. 373.
In Barnard v. Campbell, 55 N.Y. 456, the rule is thus stated: "Two things must concur to create an estoppel by which an owner may be deprived of his property, by the act of a third person, without his assent, under the rule now considered. (1) The owner must clothe the person assuming to dispose of the property with the apparent title to or authority to dispose of it; and (2) the person alleging the estoppel must have acted and parted with value upon the faith of such apparent ownership or authority, so that he will be the loser if the appearances to which he trusted are not real. In this respect it does not differ from other estoppels in pais."
It would be easy to multiply authorities to this point; — they are numerous, and are believed to be all one way. Indeed, the principle is quite elementary, "that where one of two innocent parties must suffer by the fraud of a third person, he who has trusted such third person, and enabled him to deceive the other, is to abide the consequences of the fraud, however innocent he may be in other respects." Story on Agency, sec. 127.
Now apply these rules to the facts in this case. Nixon constituted Mason his agent to purchase for him of one Hubbard a horse, and intrusted him with the sum of $95 for that purpose. Mason fraudulently represented himself to Hubbard as purchasing on his own account, and *Page 40 took a bill of sale to himself. Mason afterwards informed the plaintiff that he had made the purchase, showed him the bill of sale, and told him he could give him a bill of sale which would make it all right; and promised to bring the horse to him on the following day. Nixon did not ask him for the bill of sale, nor make any attempt to induce Mason to surrender it, but suffered him to depart with it in his possession. Instead of bringing the horse to Mason on the following day (Monday) as he had promised, Mason, on Tuesday, took him to the defendant, representing that he owned him, showed him the bill of sale, and sold him the horse for $75, and with the money left for parts unknown.
It is claimed by the plaintiff that Brown, the defendant, did not buy the horse relying upon the bill of sale from Hubbard to Mason that the horse was Mason's. The answer to this is, (1) it does not appear that he did not rely upon it; and (2) the only inference we can draw from the facts found is, that Mason's purpose in showing it was to satisfy Brown that his claim to own the horse was true, and Brown, upon seeing it, must have been satisfied that it was evidence of Mason's claim to the ownership.
It is unnecessary to inquire whether Brown was put upon inquiry, for it is manifest that if he had inquired of Hubbard, the only person to whom any of the facts pointed as able to give further information, he would have learned no additional particulars. The whole trouble with the plaintiff's claim is that he suffered his agent to carry off with him the evidence as to the ownership of the horse, which was directly calculated to mislead and deceive an innocent purchaser. He selected as an agent a person who proved to be a thief. And inasmuch as one of two innocent persons must suffer, it must in this case be the plaintiff, because he put it in the power of his agent to deceive the defendant when it was possible for him to have prevented it. The defendant is entitled to judgment on the report.
Exceptions sustained. *Page 41