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though Thomas might have acknowledged it, such acknowledgment ought not to defeat the claims of his just creditors, who had given him credit on account of such supposed property. They insisted on the clause in the bankrupt act,(a) by which it is enacted, "that if any person "or persons shall become bankrupt, and at such time shall "by the consent and permission of the true owner and pro

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prietor have in their possession, order and disposition, any "goods or chattels whereof they shall be reputed owners, "and take upon them the sale, alteration, or disposition as

owners, (such goods excepted as shall be in custody of "such bankrupt by consignment or factorage) in every such "case, the commissioners or the major part of them shall "have power to sell and dispose of the same, to and for "the benefit of the creditors who shall seek relief by the "said commission, as fully as any other part of the estate "of the said bankrupt :" and cited the cases of Lingham v. Biggs, 1 Bos, and Pul. 82; Bryson v. Wylie, ibid. 83, not. and Gordon v. "East India Company, 7 T. R. 228, to shew, that being allowed to have possession of goods under circumstances which give the reputation of ownership, brings the case within this clause of the statute. It was also argued on their behalf, that the trust was created in fraud of the law, for the purpose of defeating the policy of the banker's act, and therefore was of such a nature as a court of equity should not recognise. If William Brown, in his life-time, had quit the business of a banker, and then had filed his bill to compel Thomas to declare the trust, he must ⚫ have stated in that bill the purpose for which it was created,

and in that case, could he have been entitled to an execution of the trust? and if not, can the plaintiffs, claiming as volunteers under him, be in a better situation? It was urged that if either of the companies had sustained loss in

(a) 11 & 12 Geo. 3, c. 8, 8, 9.

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trade, that loss must have been borne by the personal estate of Thomas, and not that of William, inasmuch as the deeds of co-partnership were executed by Thomas only, and there was no indemnity or any other security given by William, It was submitted therefore that the award was right, and that the assignees were entitled to retain these shares for the benefit of the creditors.

On behalf of John Campbell, it was said that he being an aged and very infirm man, had undertaken the executorship out of respect to the memory of the testator, and without any intention of acting: which was the less necessary on his part, as James Joy and Thomas Brown were both active men, conversant in business, and particularly interested in the due management of the fund, the first on account of the legacies given to his children (the plaintiffs) and the other, as being entitled to the residuum. With regard to the transaction respecting the property of William Brown, which remained in the bank at the time of his death (which was the only particular in which Cambell appeared at all to have intermeddled); so far as the amount of the notes in which William Brown had joined, he had made himself debtor to Campbell, who had lent the money on the credit of the balance in the bank, and had a right to retain it for that debt; he was not, as creditor of William Brown, bound to resort to the other makers of the notes; the acting executor had the notes in his hands from the time the accounts were settled with the bank. At that time, J. Brown, and Brown and Oakman were in full credit, and Campbell had no reason to suppose that the assets of William Brown were in danger from non-payment of those notes; he had on the contrary sufficient reason to rely on Thomas Brown's procur ing payment of them, he being as residuary legatee the per son most likely to be interested in them. Then the handing over to Thomas Brown the notes, (which had in fact

become the property of William Brown instead of the amount of them retained by Campbell) was payment to T. Brown, and the circumstance of Campbell's joining in the receipt to the bank ought not to charge him, as it was a mere formal act, and necessary for the satisfaction of his partner in the bank. The signing of the receipt is not of itself conclusive evidence in equity of receiving the property; Scurfield v. Howes, Bro. C. C. 95: but here there is evidence that the property was not received by Campbell though he signed the receipt. Westly v Clarke, 1 P. Wms. 83. (note.)

Lord CHANCELLOR.

I shall consider further the point with respect to Campbell and the Throne property.(a) The only other question is with respect to the shares in the partnership concerns.

There is no ground for holding that the transaction is of such a nature as disabled Thomas Brown from saying that the shares in the Sugar House and Rope Walk Companies, assigned by William to him, were not the assets of William. I will not enter into a discussion of the question, whether William might not have compelled Thomas to account with him as trustee if he had brought a bill in his life-time; but as between the creditors and legatees of William and Thomas, there is no doubt, in point of conscience, Thomas was bound to consider this a trust for them, and accordingly he does after the death of William acknowledge himself to be

(a) With respect to that property, a question was discussed at the bar, viz. "Whether William Brown the son of Thomas, took "the estate devised to him, by way of contingent remainder or of

executory devise." But it afterwards appeared unnecessary to decide the question, at least in the present stage of the cause. Vid. the decretal order, post.

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a trustee and I should have conceived that if the question had arisen, on an action brought against Thomas by the creditors of William, whether these were or were not assets in CAMPBELL his hands, the declaration which he made would preclude Therefore the case is

The object of the bankrupt

act, 11 & 12 Geo. 3, c. 8, s. 9, prevent deceit by a trader from the visible possession of property to which he is not entitled: that is, where the possession is

not in the true owner, but in one whom the true owner un

him from saying that they were not.
confined to this question, whether under the operation of
the bankrupt laws this property is so bound that notwith-
standing the bankrupt himself is so subject in equity and
conscience to the creditors, that he might have been charged
at law, yet that the property shall not be liable in the hands
of the assignees by reason of the clause in the statute.

Now, that clause refers to chattels in the possession of the bankrupt; "in his order and disposition with consent of the true owner; is to "that means, where the possession, order and disposition, is in a person who is not the owner, to whom they do not properly belong, and who ought not to have them, but whom the owner permits, unconscientiously as the act supposes, to have such order and disposition. The object was to prevent deceit by a trader from the visible possession of a property to which he was not entitled: but in the construction of the act, the nature of the possession has always been considered, and the words conscientiously have been construed to mean possession of the goods of anopermits to have ther with the consent of the true owner. Now, who was it. the true owner of this property after the death of William?. The true owner was Thomas, subject to the payment of the debts and legacies of William. Thomas was the acting executor and the residuary legatee, and the possession was therefore according to his right, but was as against him chargeable in favour of creditors and legatees, the creditors having a right to charge at law or in equity; the legatees in equity only. In all those cases in which that clause in the act has been permitted to have the effect of devesting the right in the person who had a right to the property, the na

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ture of the possession has always been considered, and whether it was according to right(a). In cases of specific chattels, which are settled on marriage upon the husband for life, and then on the children, the possession has been with the party, the bankrupt, with the consent of the person creating the trust, and so far, with the consent of the true owner; but the possession was according to the title qualified by the rights of others; and wherever that has been the case, I take it, the law has never been construed to extend to destroy that right of property; but it has been confined to those cases where the sole and absolute owner of the property has permitted it to remain in possession of the trader, in whose possession it ought not to be.

In Bryson v. Wylie(b), and cases of that description, the construction has been this: the property was in the bank. rupt; he meant to make a transfer of it, as a security, and to do so by deed; but a deed was not competent to complete the transfer, that is, to give an absolute title, without delivery; and consequently the title was imperfect; and being imperfect, and he remaining in possession, it has been held that the property shall be considered as remaining in possession of the trader with the consent of the true owner, that is the mortgagee. If there be a mortgage of leasehold estates, where the possession according to the nature of the transaction remains with the mortgagor, the law does not apply: but if there be a sale, the possession remaining with the trader, the law would apply. Now I think if we' look at all these cases, we shall perceive that the law (which in certain cases is a severe law) must always be construed by this criterion, was the possession that of a person not the

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(a) Vid. Edwards v. Harben, 2 T. R. 587; Collins v. Forbes,3 T. R. 316. Jarman v. Woollston, 3 T. R. 618; Manton v. Moore, 7 T. R. 67; Gordon v. E. India Co.7. T. R. 228,

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