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Calais Steamboat Co. v. Van Pelt's Administrator, 67 U.S. 2 Black 372 372 (1862)

Calais Steamboat Co. v. Van Pelt's Administrator

67 U.S. (2 Black) 372


1. A person residing in California employed an agent to contract for and superintend the building of a ship at New York. The agent was furnished with funds for the purpose and specially directed by the principal to give himself out as the true owner and to conceal the interest of the principal. Accordingly the agent made all contracts in his own name and had the vessel registered as his own property. After she was finished, he sold her and put the price in his pocket. Held that the principal's right in the vessel was gone unless he could prove that the vendee had notice of his right before payment of the purchase money.

2. As between the principal and agent themselves, the legal title of the latter could not avail him except as a lien for his services and money advanced, but the rule is different as respects a third person who has bought in good faith and for a valuable consideration.

3. When a question arises between two innocent parties which of them shall suffer by the misconduct of another, the loss must fall upon him who has enabled the wrong to be committed, and not on him who had no means of knowing that it was a wrong.

4. If the equitable owner of a thing has permitted another to hold the legal title accompanied with the usual documentary evidence of it, with full possession and with declarations of ownership corresponding to the legal title, he cannot set up his equity against a bona fide purchaser, who had no notice of it.

5. Secret instructions from the equitable to the legal owner which produced no change in the apparent relation of the latter to the thing will not affect the right of the purchaser.

6. The burden of proof rests upon the equitable owner to show that the purchaser had notice of his rights in due time.

7. Where the purchase has been made for a full price and on fair conditions without special advantage to the vendee, the proofs to impeach it should be more full and direct, more unequivocal and certain than would be required in the case of a hard or unequal bargain.

Page 67 U. S. 373

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