Tomkinson, a stockbroker, bought shares was registered by the company and received share certificates, and then sold them. The company found that the vendor to him had previously sold the shares to someone else who had been duly registered. The transfer to Tomkinson was a fraud, and the company refused to register Tomkinson’s purchasers. Tomkinson bought other shares in the market to make good his transactions with his purchasers and sued the company for his costs. Pollock B. gave judgment in Tomkinson’s favour, as did the Court of Appeal.
Held: All the elements necessary to creat an estoppel were present.
Lord Herschell LC described the effect of Bahia:- ‘The Court held that the giving of the certificate amounted to a statement by the company, intended by them to be acted upon by the purchasers of shares in the market, that the persons certified as the holders were entitled to the shares; and that the purchasers having acted on the statement by the company, they were estopped from denying its truth and liable to pay as damages the value of the shares.’ and ‘The learned counsel for the appellants impeached these decisions, as they were entitled to do in your Lordships’ House, and contended that they ought to be overruled. After carefully considering the able arguments urged at the Bar, I have no hesitation in expressing my concurrence in the law laid down by the Court of Queen’s Bench in Re Bahia and The San Francisco Railway Co.. The reasoning of Blackburn J in pronouncing judgment in that case appears to me to be sound and in accordance with the law, and I think it would be very mischievous to cast any doubt on the authority of that case.’
Lord Macnaghten:- ‘The general principle of law relating to estoppel by representation cannot be questioned. It is, as Lord Cranworth observed in the case of Jorden v. Money, before this House, a principle of universal application, that if a person makes a false representation to another and that other acts upon that false representation the person who has made it shall not afterwards be allowed to set up that what he said was false and to assert the real truth in place of the falsehood which has so misled the other. Then, after referring to some cases on the subject, his Lordship goes on to say: ‘I think the principle may be carried much further, because I think it is not necessary that the party making the representation should know that it was false, no fraud need have been intended at the time. But if the party has unwittingly misled another you must add that he has misled another under such circumstances that he had reasonable ground for supposing that the person whom he was misleading was to act upon what he was saying.’ Now there is no doubt, I think, that in this case the company must be taken to have known that the certificate was required by Tomkinson or his firm for the purpose of being acted upon.’
Lord Herschell LC, Lord Macnaghten, Lord Field
 AC 396
England and Wales
Cited – Re The Bahia and San Francisco Railway Co Ltd v Trittin and others CA 1868
Miss Trittin left her share certificates with a broker. A forged transfer together with the certificates, was lodged with and with registered by the company. The new certificates certified that the named person as registered holder. He then sold . .
Cited – Cadbury Schweppes Plc and Another v Halifax Share Dealing Ltd and Another ChD 23-May-2006
Fraudsters had successfully contrived to sell shares of others, by re-registering the shares to new addresses and requesting new certificates. The question was which of the company, the company registrars and the stockbrokers should bear the loss. . .
Lists of cited by and citing cases may be incomplete.
Updated: 17 May 2022; Ref: scu.242172