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would simply be a recognition of existing conditions, and not a recognition of any legal or moral right to so admini. ster the affairs of the government of Mexico.
Such recognition would cut but little, if any, figure with foreign governments, except as notice to the syndicate in France, which, it is said, is proposing to loan Mexico $100, 000,000. Mexico had the question up as to the validity of a loan of $15,000,000 in the year 1859. Mexican bonds amounting to $15,000,000 were issued under the supervision of Miramon, who was at that time the head of the government of Mexico, like Huerta is now.
The constitutional party of Mexico conceded that all the international obligations must be assumed by the successive governments of the state, yet it claimed that the administration of Miramon was in no sense a government, but that it was only an unsuccessful revolution, and that therefore the obligations created by it were not binding upon the Repub. lic of Mexico.
If Huerta’s revolution should be unsuccessful the same defences could be made against the validity of any bond is. sues during Huerta's self-constituted rule of the Republic of Mexico, that were so successfully made against the $15, 000,000 Mexican bond issue while General Miramon was the temporary head of the Republic of Mexico.
There was, however, a defence of fraud in the sale of the Miramon bonds. -
In case the proceeds of the $100,000,000 Huerta loan are used in the liquidation of the just obligations of Mexico, in whole or in part, which were incurred prior to the seizure by Huerta of the reins of government, the Mexican government will be bound for their payment to this extent, whether Huerta makes good his title as a de facto ruler or not. The states of Sonora and Coahuila are carrying on war against the Republic of Mexico. The state of Sonora now controls the entire territory of the state except the port of Guyamas on the gulf of California. The state of Sonora controls all the railroad lines within the state. These railroad lines connect with our systems of railroads in the state of Arizona at Douglass, Nato, and Nogales. Such protection to life, liberty, and property as our nationals are obtaining are accorded to them by the state of Sonora. Under the rules of international law, the state of Sonora is entitled to have this government recognise her “belligerent rights.” The state of Coahuila stands in very much the same relation to us as the state of Sonora. She has control of nearly all her territory. Her railroad system connects with ours at Eagle Pass, and our railroads touch her borders at other points. It is due to ourselves as well as to these two states that “belligerent rights” be granted them. One of our largest transcontinental railroad systems, the Frisco system, has recently gone into the hands of a receiver, partly in consequence of the embarrassments of commerce and traffic on the Mexican border. These embarrassments would be largely, if not entirely, removed by a recognition of belligerent rights.
Our government could very well take the initiative in respect to the grant of belligerent rights to Sonora and Coahuila and any other states that may hereafter shew themselves entitled to such recognition.
The recognition of belligerent rights must not be confounded with the subject of the recognition of the independence of these states of the government of Mexico. This recognition of independence is a very different proposition, and one that is not here under consideration.
SOLICITOR's LIABILITY As PRINCIPAL.
1. In the recent case of Lloyd v. Grace, (107 L. T. R. 531), is enunciated a legal principle of interest, not only in a consideration of the law of principal and agent as a whole, but more particularly to solicitors and lawyers, the class of persons to whom the effects of the decision are particularly applicable.
The rule promulgated is “for the fraud of an authorised agent acting within his authority, an innocent principal is responsible civilly as if for his own fraud, even though he was not benefited by the fraud of his agent.”
The essential and interesting part of the above principle is the clause which is the concluding part of it.
The words, “for the master's benefit,” in the judgment of the Exchequer Chamber, in the many times cited case of Barwick v. Joint Stock Bank, (16 L. T. Rep. 461; L. R. Ex. 259), proved to be the bone of contention in the Court of Appeal. The judgment in the Barwick case (supra) was by Willes, J., concurred in by six other Judges, forming the full Court of Appeal.
The facts were as follows: The plaintiff supplied oats to one Davis, who was a customer of defendant, for the purpose of enabling Davis to perform a government contract for sup: plying oats, on the faith of a guarantee given by the manager of defendant that when the money was received by the bank (defendant) from the government for Davis, the defendant would pay the plaintiff out of that money the amount due him from Davis after any indebtedness from Devis to the defendant was paid.
Davis was at that time largely in debt to the defendant, so much so that it was practically impossible that there should be any surplus to come to the plaintiff after paying off the bank's credit, and this was concealed from defendant by the bank’s manager. The bank retained all the money with which to cancel its own claim against Davis, and action was brought by the plaintiff against the bank for the wrong of the bank’s manager.
The conclusion there arrived at was, “The general rule is that the master is answerable for every such wrong of the agent or servant that is committed in the course of the set
vice and for the master's benefit, though no express command or privity of the master be proved.” In giving judgment in the case of Lloyd, (supra), the foregoing rule, as laid down in the Barwick case, (supra), was considered, and particularly was emphasis and stress given the words “for the master's benefit ’’: and Lord Justice Farwell concluded, that the Court for which he was speaking could not enunciate a different rule, and a number of authorities in which the same principle had been decided and adopted were cited, and he added that the liability of the principal did not extend far enough to include a case where the agent acted with his own benefit solely in view: and in such opinion by Willes, J., Lord Justice Kennedy concurred, but from it dissented Lord Justice Williams.
That a fraudulent act, committed by an agent for his own unlawful purpose, even if done within the ordinary scope of his authority, does not render the principal liable in any manner, seems to be a prevalent and every day notion, even in the legal profession; it was, indeed, strongly argued in the case of Lloyd, (supra), that in no case of wrongful conversion or fraudulent misrepresentation is a master 11aple for the act of his servant.
That such a false presumption exists commonly to-day is evidenced by several reported cases, particularly by Lord Justice Bowen in British, Banking Co. v. Charm wood, (57 L. T. Rep. 833; 18 Q. B. 714); Ruben v. Great Fingall Co. (95 L. T. Rep. 214; 1906 A. C. 439).
But any and all dicta of such a character as above indicated were side-stepped and disregarded by the House of Lords in Lloyd's case, (supra), and, shooting holes in the doctrine that the fraudulent act of the agent must be to the personal advantage of the principal. Lord Loreburn said “Mr. Justice Willes cannot have meant that the principal is absolved whenever his agent intended to appropriate for himself the proceeds of his fraud.” And he very aptly added, “nearly every rogue intends to do that.” It will also be noticed that Lord Halsbury was equally emphatic in the view that he expressed, remarking that the words “and for the master's benefit ’’ obviously meant that it was “something in the master's business.” In the very old case of Hern v. Nichols, (1 Salk. 289), Lord Hall laid down “that the merchant was answerable for the deceit of his factor, though not criminaliter but civiliter.” The fact that the doctrine that a principal does not bene. fit by or through the fraudulent act of his agent is immaterial, was clearly shewn by Lord Macnaghten in his usual exhaustive judgment.
In the case of the King v. Can. R. Co. in the Exchequer Court of Canada, decided Jan. 22nd, 1913, the case of Lloyd v. Grace, (supra), was referred to. The question there was as to liability of defendant for the acts of its agent in fraud of the government, in having misappropriated moneys provided by defendant for paying duties on imported goods. The Court, by Audette, J., says, speaking of the Lloyd cost, (supra), “It is true he had not authorised the particular act, but he has put the agent in his place to do that class of acts, and he must be answerable for the manner in which the agent has conducted himself in doing the business, which it was the act of the principal in placing him in.”
The Court also quotes the Lloyd case, (supra), as saying that the Barwick case (supra), had been misunderstood, and did not mean “must be for the master's benefit,” and repudi. ated the dicta of Bowen, L.J., in Banking Co. v. Charmwood, 57 L. T. R. 833, and of Darvey, L.J., in Ruben v. Great Fin. gall, 1906 A. C. 439. A similarity was also shewn between the law of Quebec as contained in its civil code, and the rule laid down by the House of Lords, in the case of Lloyd (supra), which is expressly followed.