taken the position that Driscoll was not an employé of the plaintiff, have refused to assume the defense of his suit against this plaintiff, and have awaited the result, thus leaving the plaintiff free to defend the suit in its own way, through its own attorney, or to compromise the same, as it might desire or might be able, or the defendant might have endeavored, by some agreement with the plaintiff, to have been permitted to assume the conduct of the defense of said suit on condition that it should not thereby be considered to have enlarged its obligation or liability under the policy, in the event of a final decision that Driscoll was not an employé of the plaintiff.

The defendant, however, without reservation, and with an apparent admission of liability in the premises, did take upon itself in behalf of this plaintiff the conduct of the defense of said suit, both in the superior court and before this court upon exceptions. When it was finally decided in this court that Driscoll was not an employé of the plaintiff, the defendant for the first time claimed that it was not liable to indemnify the plaintiff for its loss in consequence of the injuries to Driscoll. With the possibility that it might be liable to the plaintiff under the policy, the defendant, for its own purposes, desired to have complete control of the defense in the Driscoll suit. Because of the apparent admission of liability arising from the defendant's conduct, the plaintiff turned over to it such complete control of the plaintiff's interests in said suit, thus depriving itself of any advantage that might arise from a conduct of the matter by its own attorneys in its own way. The defendant cannot be permitted now to say that the plaintiff was not injured thereby, or that the travel and the result of the proceeding would have been the same if the plaintiff had taken charge of the matter for itself. Such claims are based entirely upon conjecture. The law will not allow the defendant, without rendering itself liable to the plaintiff, to assume these inconsistent positions to the disadvantage of the plaintiff.

"waiver" are sometimes loosely used interchangeably, especially with reference to situations arising under insurance policies; and the language of a number of cases cited by the plaintiff indicates that the term "waiver" has been applied to conduct similar to that of the defendant in the case at bar. We are of the opinion, however, that, in exact legal terminology, the defendant by its conduct should be said to have estopped itself to deny liability under the policy rather than to have waived any right under the policy. Whether the action of the defendant be termed a "waiver," "estoppel," "quasi estoppel," or "an election ripening into an equitable estoppel," its liability is based upon the broad equitable principle, which courts of law will recognize, that a person, with full knowledge of the facts, shall not be permitted to act in a manner inconsistent with his former position or conduct to the injury of another. This doctrine has been frequently applied in cases relating to employer's liability insurance.

The defendant's counsel has argued that the doctrine of estoppel cannot be applied in this case, because there does not appear by the allegations of the count to have been any misrepresentation or concealment of material facts on the part of the defendant, nor does it appear that the facts were not equally as well within the knowledge of the plaintiff as of the defendant. These objections overlook the distinction between quasi estoppel and estoppel by misrepresentation. "The term 'quasi estoppel' has been applied to certain legal bars which are in some respects analogous to estoppel in pais, and which have the same practical operation as an estoppel in pais, but which nevertheless differ from that form of estoppel in essential particulars. The term includes the doctrine of election, the principle which precludes a party from asserting, to another's disadvantage, a right inconsistent with a position previously taken by him, and certain forms of waiver." 16 Сус. 784. In Tozer v. Ocean Acc., etc., Corp., 94 Minn. 478, 103 N. W. 509, the court said: "No doubt appellant acted in good faith, but bad faith is not always necessary to estoppel, and it does not always follow that no estoppel will arise when the party to whom the representation is made has knowledge as to the truth of all the facts. Appellant comes within the rule that a person is precluded from taking, merely because his interests may change, a position inconsistent with the one previously assumed by him and to the prejudice of a third person."

If

The defendant has also urged that the principle of estoppel cannot be applied to extend the liability of the defendant beyond the terms of the policy and to furnish inplication is not restricted, as the defendant urges, to cases where the conduct of the insurer precludes him from insisting upon a forfeiture for the violation of a condition contained in the policy. It is the nature of this principle to extend liability. It is not invoked for the purpose of enforcing a true obligation or one that is clearly defined by the terms of a contract. In this consideration it is not material what the defendant's real liability under the policy was, for by its own election of positions it is now precluded from asserting that its liability was not in accordance with its apparent admissions. In Employers' Liability Assur. Corp. v. Chicago, etc., Co., 141 Fed. 962, 73 C. C. A. 278, the court said: "The act of the plaintiff in error, in taking control and dominion of the

raising the question as to Driscoll's employment, and in that view it was immaterial whether, in fact, Driscoll was or was not employed by the plaintiff.

The testimony fully warranted the decision of the justice, and we find no error therein. Defendant's exceptions are overruled.

By rescript already filed the case has been remitted to the superior court, with direc tion to enter judgment upon the decision.

=

(108 Me. 79) FIRST NAT. BANK OF AUBURN v. EASTERN TRUST & BANKING CO. et al.

(Supreme Judicial Court of Maine. Feb. 24, 1911.)

(Syllabus by the Court.)

trol and dominion until judgment was entered, without notice to the defendant in error that it did not consider itself liable under the policy-thereby taking from the defendant in error the control and dominion of the action-is such a construction of the policy, by contemporaneous acts, as estops plaintiff in error from denying liability, now that that action is at an end. To take any

other view of this case would be to hold that

the assurer could effectually tie the hands of the assured, in an action that might, or might not, on a close construction of the policy, be covered by the terms of the policy, and then, the cause being determined against it, insist that upon a closer reading of the policy the assured ought to have been left to make its own defense and at its own risk. This cannot be the law." Other cases, based upon employer's liability insurance contracts, in which the doctrine of estoppel has been applied, are: Glens Falls, etc., Co. v. Travelers' Ins. Co., 162 N. Y. 399, 56 Ν. Ε. 897; Royle Mining Co. v. Fidelity, etc., Co., 126 Mo. App. 104, 103 S. W. 1098; Globe Navigation Co. v. Maryland Casualty Co., 39 Wash. 299, 81 Pac. 826; Tozer v. Ocean Acc., etc., Corp., 94 Minn. 478, 103 N. W. 509; Tozer v. Ocean Acc., etc., Corp., 99 Minn. 290, 109 Ν. W. 410.

The third count of the amended declaration sets out a cause of action, and the demurrer to said count was properly overruled.

We find no reversible error in the ruling of the superior court excluding evidence, offered by the defendant, to show that said Driscoll was not in the employ of the plaintiff at the time of the accident. There was a count in the amended declaration, which alleged that Driscoll was in the employ of the plaintiff at the time of the accident; but the case was plainly tried before the justice of the superior court sitting without a jury upon the third count. The evidence before the

MORTGAGOR-RIGHT OF MORTGAGEE TO FOLLOW PROCEEDS.

When a mortgagor of personal property is intrusted by the mortgagee with the property to sell, with the understanding that the proceeds of the sale are to belong and be paid to the mortgagee, the latter is entitled to the proceeds when the sale is made, and can follow and recover them in the hands of third persons receiving them with notice of their character.

[Ed. Note. For other cases, see Chattel Mortgages, Cent. Dig. §§ 407-416; Dec. Dig. § 190.*] 2. BANKS AND BANKING (§ 134*)-SPECIAL DEPOSITS-APPLICATION.

When a mortgagor of personal property intrusted to him by the mortgagee to sell and pay over the proceeds, deposits them in a bank to his personal account, and the bank is soon afterward notified of the origin and character of the fund so deposited, it cannot after such notice apply the deposit in payment of the de positor's indebtedness to the bank.

[Ed. Note.-For other cases, see Banks and Banking, Cent. Dig. §§ 353-374; Dec. Dig. § 134.*]

3. TRUSTS (§ 356*)-DEPOSITS-TRUST FUNDFUNDS MINGLED WITH FUNDS OF TRUSTEEIDENTIFICATION.

The deposit of a particular fund in a bank to the general credit of the depositor does not necessarily destroy the identity of the fund. If it can nevertheless be identified. it, or so much of it as has not been disposed of by the bank before notice, can be recovered of the bank by the person entitled to it.

[Ed. Note. For other cases, see Trusts, Cent. Dig. §§ 529-538; Dec. Dig. § 356.*] 4. CHATTEL MORTGAGES (§ 201*)-PROPERTY INTRUSTED TO MORTGAGOR FOR SALE-FIDUCIARY RELATION.

The relation between a mortgagee and the mortgagor of personal property intrusted to the latter to sell and pay over the proceeds to the former is not simply that of vendor and vendee, or creditor and debtor, but is of a fiduciary character, and a bill in equity may be maintained by the mortgagee to recover such proceeds from any person holding them with notice of the mortgagee's title.

[Ed. Note. For other cases, see Chattel Mortgages, Dec. Dig. § 201.*]

Appeal from Supreme Judicial Court, Androscoggin County.

Trust & Banking Company of Bangor, and the trustees in bankruptcy of the H. J. Willard Company, a corporation, to recover the sum of $640, which it alleged the defendant bank received as a deposit made for the purpose of securing the discharge of a mortgage on an automobile which was sold in Bangor by said H. J. Willard Company acting as agent for the plaintiff, and praying that the defendant bank be ordered and directed to pay said sum of $640 to the plaintiff bank. The cause was heard on bill, answers, replication, and proof, and the justice hearing the cause ordered, adjudged, and decreed that the plaintiff recover of the defendant bank the sum of $640 and interest. The defendant bank then appealed to the law court. Affirmed.

Argued before EMERY, C. J., and WHITEHOUSE, SPEAR, KING, and BIRD, JJ.

E. C. Ryder, for appellant. Tascus Atwood, for appellee.

EMERY, C. J. The H. J. Willard Company was engaged in the business of buying and selling automobiles. The plaintiff bank advanced the money to the Willard Company to purchase several automobiles and took a separate promissory note with a bill of sale for each automobile. The bank further authorized the Willard Company to sell each automobile for the purchase of which It had advanced the money and received the bill of sale. The Willard Company sold an automobile with the understanding, implied at least, that enough of the proceeds of the sale should be remitted to the plain tiff bank to pay the amount due the bank on that automobile.

The Willard Company, however, did not remit any of the proceeds to the plaintiff bank, but deposited them to its own credit in the defendant bank with which it had a deposit account. At the time of the deposit the defendant bank had no notice of the title of the plaintiff bank to the money thus deposited, nor of the facts relied upon as showing such title, and simply credited the amount to the Willard Company's deposit account. The next day, or soon after, however, and before it had made any disposition of the money other than to pay some checks of the Willard Company, it received distinct notice of the plaintiff bank's title, and also a demand to pay over to the plaintiff bank so much of the money as had not then been checked out by the Willard Company without notice. Considerably later, the defendant bank applied the balance then appearing on its book to some overdue notes of the Willard Company, and overdue at the time of the deposit.

As between the plaintiff bank and the Willard Company there can be no doubt that

plaintiff, at least to the extent of the amount necessary to repay the bank for its advances.

The case of McLarren v. Brewer, 51 Me. 402, 404, was a case of a sale of mortgaged property by a mortgagor. The court, in sustaining the bill in equity, said: "It is a well-settled doctrine that a mere change of property from one form to another cannot in itself divest the owner, or those who have distinct and immediate rights in the thing in its original shape, of their property in it." It is further said on the same page: "This doctrine has been applied to agents, factors, and trustees where the sale has been rightfully made."

The defendant bank did not acquire any better title to the money than did the Willard Company, except that it was protected in the disposition of the money in the regular course of business made before it had notice of the circumstances and the consequent title of the plaintiff bank. After that, it was bound to pay over to the plaintiff bank or its order what then remained undisposed of. It had no right after such notice to make any other disposition of the money.

Of course, the plaintiff bank could not maintain an action if before notice of its claim the identity of the money had been lost; if it could not be shown that the money, or part of it, in the defendant bank at the time of the notice was the proceeds of the plaintiff's automobile. For instance, if before notice the defendant bank had paid out in the regular course of business all the deposit that was the proceeds of the automobile, and the Willard Company had subsequently deposited other money derived from other sources, to which money the plaintiff had no title, the plaintiff could not recover that money to satisfy its claim for the first money. As to the later deposit, the defendant would not be the debtor of the plaintiff.

The defendant bank urges that the identity of the money in question was lost when it was deposited. It may be difficult to trace the money after a general deposit of it in a bank to the personal credit of the person who was bound to pay it to some one else, but a deposit of it in a bank does not necessarily destroy its identity. It may still be shown to be money belonging to the plaintiff. Houghton v. Davenport, 74 Me. 590; Cushman v. Goodwin, 95 Me. 353, 50 Atl. 50.

In this case the original amount to the credit of the Willard Company in the defendant bank is known, and no other deposit was made after the one in question. Deducting this original credit and also the checks paid by the defendant bank before of the automobile. It is the fund that is to be identified, not the particular coins or

bank bills.

The defendant bank further urges that whatever right the plaintiff bank may have to the deposit made by the Willard Company, the remedy by action at law for money had and received is "plain, adequate, and complete," and hence the court has no jurisdiction in equity. But the relation between the plaintiff bank and the Willard Company was not merely that of vendor and vendee, or creditor and debtor. There

was a fiduciary relation between them. The Willard Company was not simply bound to pay a debt. It was bound to render an account and pay over the balance of a particular fund, the proceeds of the sale of the plaintiff's property intrusted to it for sale. Further, the plaintiff's title to the fund in the defendant bank was equitable rather than legal. Until notified of the plaintiff's claim, it was simply a debtor to the Willard Company for the amount, and could dispose of it at pleasure with all the rights of a legal owner. That these circumstances authorize the court to proceed in equity for the enforcement of the plaintiff's right is well settled. McLarren v. Brewer, 51 Me. 402; Houghton v. Davenport, 74 Me. 590; Cushman v. Goodwin, 95 Me. 353, 50 Atl. 50; National Bank v. Insurance Company, 104 U. S. 54, 26 L. Ed. 693; Union. Stockyards Bank v. Gillespie, 137 U. S. 411, 11 Sup. Ct. 118, 34 L. Ed. 724.

Shortly after making the deposit in question the Willard Company was petitioned into bankruptcy, and the trustees were made parties to this bill, but they make no claim to the fund as against the plaintiff bank.

The decree entered by the sitting justice, being in accordance with the foregoing principles, must be affirmed.

Decree affirmed, with costs of appeal.

(107 Me. 494)

AMERICAN ICE CO. v. SOUTH GARDINER LUMBER CO.

(Supreme Judicial Court of Maine. Feb., 1911.) 1. NEGLIGENCE (§ 134*)-FIRES-EVIDENCE.

The mere fact that plaintiff's loss by fire was caused by a spark or cinder from defend

ant's smokestack is insufficient to establish defendant's liability.

[Ed. Note. For other cases, see Negligence, Cent. Dig. § 271; Dec. Dig. § 134.*]

2. NEGLIGENCE (§ 21*)-FIRES-LIABILITY.

The owner of a manufacturing plant is not an insurer against communication of fire therefrom, his duty being to use ordinary care in constructing and operating the plant.

[Ed. Note. For other cases, see Negligence, Cent. Dig. §§ 28-30; Dec. Dig. § 21.*]

3. NEGLIGENCE (§ 4*) -"ORDINARY CARE." "Ordinary care" is such care as an ordinarily prudent man, mindful of himself and of

One suing for loss by fire communicated from another's smokestack has the burden of

showing negligence in maintaining the stack under all the existing circumstances.

[Ed. Note. For other cases, see Negligence, Cent. Dig. § 226; Dec. Dig. § 121.*] 5. NEGLIGENCE (§ 134*)-FIRES-EVIDENCE.

Evidence in an action for loss by fire communicated from defendant's smokestack held insufficient to show defendant was negligent. [Ed. Note.-For other cases, see Negligence, Dec. Dig. § 134.*]

Exceptions from Supreme Judicial Court, Kennebec County.

Action by the American Ice Company against the South Gardiner Lumber Company. Verdict for paintiff, and defendant moves for a new trial, and brings exceptions. Motion sustained.

Argued before EMERY, C. J., and SAVAGE, PEABODY, SPEAR, CORNISH, and KING, JJ.

Charles F. Johnson and W. C. Atkins, for plaintiff. Heath & Andrews and George W. Heselton, for defendant.

KING, J. Action on the case to recover damages for the destruction of property by fire alleged to have been caused by the defendant's negligence. Verdict for $7,000. The case is before this court on motion and exceptions by defendant.

Motion. The plaintiff was the owner of an ice plant situated at South Gardiner, Me., on the west side of the Kennebec river. The defendant owned a lumber mill and plant immediately adjoining the plaintiff's plant on the south, and in the operation of its mill maintained and used steam boilers and a smokestack for the escape of smoke and cinders from the fires under the boilers. It also maintained and operated a large "burner" for burning waste material. On the 22d of June, 1907, certain large icehouses and other property of the plaintiff's plant were destroyed by fire.

The plaintiff alleged in its declaration "that said burners and stacks were so negligently located, constructed, maintained, used, and guarded on said 22d day of June last, and long prior thereto, that on said day hot cinders, sparks, and flame, negligently permitted by said defendant to escape therefrom, set fire to the shipping runs and houses of the plaintiff, and caused a total destruction thereof," etc.

It is apparent that the plaintiff at the trial practically abandoned its claim that the fire was caused by sparks from the "burner," presumably because of its location