Reputed ownership: FACTOR. kept separate. Or of a banker's cheque, the sta tute. Timber supplied a bankrupt, for a particular purpose, provided it be kept apart from his general property, that also cannot be claimed by his assignees; as in the case of an overseer of the poor, who kept the money received by him in that capacity distinct from his other effects. (1) And where a friend agreed to lend a bankrupt 2007., to be applied to a not within specific purpose, and placed in his hands a cheque on his bankers for that amount, and the bankruptcy took place before the cheque was paid,—it was held, that the assigneės had no right to the cheque. (2) So, where a merchant bought and shipped timber in his own name to one of the King's yards, where it was delivered for the use of the bankrupt (a carpenter), who had contracted to perform some works there, and who was secretly an agent of the merchant, it was held, that as the timber was delivered only for the purposes of the contract, and as there was no sale of it to the bankrupt, the real property was in the merchant; and that, as there was no fraud in the transaction, the bankrupt's assignees were not entitled to it; for though the bankrupt had the APPARENT, he had not the absolute disposition of it. (3) for particular works. Factor's not a case 3. Possession as Factor (4), Banker, or Broker. The possession of goods by the bankrupt as Factor possession though he has the power of immediately selling, or pledgof reputed ing (5), them, and taking the money-is (for the benefit of ownership. trade) held not such a possession, as will constitute a case of reputed ownership; for his possession of the property is, only, under a bare authority to sell it for the principal, and to account to him for the proceeds. A Factor, indeed, stands in the situation of a trustee with his principal; and what (1) Rexv. Egginton, 1 T. R.370. (2) Moore v. Barthrop, 1 B. & C. 5. (3) Collins v. Forbes, 3 T. R. 316. ; but see 7 T. R. 237., per (4) And see post, " Lien." 1 ever property he has in his possession in that character at Reputed ownership: the time of his bankruptcy, and which can be distinguished FACTOR, from his own, belongs to his principal, and does not pass &c. by the assignment. (1) And even if the goods be sold and reduced into money, provided the money be in separate bags, or in other respects distinguishable from the rest of the factor's property, (as in the case of the overseer before mentioned (2))—the principal, and not the assignees, will be entitled to it (3); for the dictum, that money has no earmark, must be understood to apply only, in a case of an undivided and undistinguished mass of current money. (4) So, if the factor receives notes or bills, instead of moneyor buys other goods with the proceeds, — the principal will be equally entitled to the bills, or the goods so bought (5); for the product of, or substitute for, the original thing still follows the nature of the thing itself, as long as it can be ascertained to be the very product, or substitute; and the right-of the principal to reclaim it only ceases, when the means of ascertainment fail. stock in Thus where a FACTOR, having money of his principal in Factor his hands, bought South Sea stock for him, and took the buying stock in his own name, but entered it in his account-book, his own as bought for his principal, and afterwards became bank- name. rupt, it was determined, that the stock was not liable to the bankruptcy. (6) And the same rule prevails, as to the right of a principal to reclaim substituted property from a Factor, or Broker, notwithstanding such substituted property has been acquired in fraud, and not in pursuance of his trust; for an (3) Per Lord Kenyon, Tooke y. Hollingworth, 5T. R. 215. 1T. R. 370. Paul v. Bird, 2 Atk. 621. (4) 3 M. & S. 575. per Lord Ellenborough. (1) Burdett v. Willett, 2 Vern. 638. L'Apostre v. Le Plaistrier, cit. 1 P. Wms.318. Mace v. Cadell, Cowp. 233. Ex parte Dumas, 2 Ves. 586. 1 Atk. 232. Godfrey v. Furzo, 3 P. Wms. 185. Boddy v. Esdaile, 1 Carr. 62. Garrat v. Cullum, B.N.P. 42.; and see 6 G. 4. Scott v. Surman, Willes, 400. 1 Atk. c. 94. s. 5. (2) Ante, 426. (5) Ex parte Sayers, 5 Ves. 169. Whitcomb v. Jacob, 1 Salk. 160. 234. (6) Ex parte Chions, 5 P.Wms. Reputed ownership: FACTOR, &c. abuse of trust confers no greater rights on the party, nor on his assignees, who claim in privity with him. There fore, where a draft for money was entrusted to a broker to buy exchequer bills for his principal; and the broker reembezzling ceived the money, and misapplied it, by purchasing a draft, and buy. ing Ame Broker rican stock, &c. When principal American stock and bullion, intending to abscond with it and go to America; and he did accordingly abscond, but was taken before he quitted England, and thereupon sur rendered to the principal the securities for the stock and the bullion; the principal was, in this case, held to be entitled to such securities and bullion, as against the assignees of the broker, who became bankrupt on the very day, on which he so received and misapplied the money.(1) And Lord Ellenborough in his judgment in this case said, that if property, in its original state and form, was covered with a trust in favour of the principal, no change of that state and form can divest it of such trust; or give the factor, or those who represent him in right, any claim of greater validity in respect to it, than they respectively had before such change. (2) Neither will the rights of the principal be altered in this respect, though the factor acts under a del credere commission; for this does not deprive the principal of his remedy against the buyer, if there be no payment to the factor (3); but if a factor conceal the name of his principal, and sell in his own name, the buyer has a right then to consider him as the principal, — and will be entitled, in an action by the real owner for the price, to set off a debt due from the factor. (4) If the goods have been sold by the factor, and are not should give paid for at the time of his bankruptcy, the principal should notice to give notice to the purchaser, not to pay the factor, or his assignees; and if the purchaser will do so in spite of such purchaser. (1) Taylor v. Plumer, 3 M. & S. 562. (2) 5 M. & S. 574. (4) George v. Clagett, 7 T. R. 359. 360. Rabone v. Williams, cit. ib. (3) Scrimshire v. Alderton, 2 Str. Stracey v. Deey, ibid.561.; and see 1182. 6 G. 4. c. 94. 5. 6. BANKER. notice, he will then be liable to repay the nioney to the Reputed principal (1); or, if the assignees receive the money, the ownerships principal will be entitled to recover the amount from them. (2) Upon the same principle, too, as that of the right to Banker. reclaim goods from a factor, is founded the right of a cus tomer to re-possess himself of what are called short bills; Short bills; that is, bills not due, in the hands of his Banker. For if such bills, or notes, are sent to a banker to be specifically applied, and he becomes bankrupt without having parted with them, they do not pass by the commissioners' assignment. (3) But, if the bills are indorsed by the person who deposits them with the banker, and the latter disposes of them before his bankruptcy, though even contrary to good faith, in that case, they cannot be recovered by the customer: (4) " - The nature of the interest, however, which the assignees of a Banker possess in bills and notes remaining in his hands at the time of his bankruptcy, depends on the circumstances, under which the bills or notes have been remitted, or paid in, by his customer, as well as upon the state of accounts between the customer and the banker, at the time of the bankruptcy. If the bills have been discounted with the if disbanker, the property is then changed, and they pass to his counted, assignees with the rest of the effects; or, if he has ad- assignees; vanced money upon them, or accepted other bills for the accommodation of the customer, the assignees will not only have a lien upon all the negotiable securities in the banker's hands, to the amount of such advances or accept (1) Serimshire v. Alderton, supra. Escot v. Milward, 1 C.B. L. 378. 7T. R. 561 note (b.) (2) B.N, P. 42. Scott v. Surman, supra. Ex parte Murray, C. B. L. 379. (3) Ex parte Dumas, 1 Atk. 233. Ex parte Oursell, Amb. 297. 2 Ves. 586. Ex parte Emery, 2 Ves. 674. Tooke v. Hollingworth, 5 T. R. 215. 2 H. B. 501. Parke v. Eliason, (4) Collins v. Martin, 1 B. & P. pass to the BANKER. and so Reputed ances, but may also put the same in suit. And even ownership: where, taking into account the bills on both sides, the customer has a balance in his favour, but not equal to the amount of any one of the bills, this surplus cannot be appropriated to any one bill, in reduction of the claim of the assignees suing any of the parties to such bill. (1) Where the transaction with a banker amounts to an exchange of acceptances, his assignees are in that case entitled to the bills so taken by him in exchange;—as where a person, with whom a country banker has no previous dealings, applies to him for a bill on London, in return for bills of exchange of the same amount; though the bill given by the banker be dishonored, yet the bills given in exchange will pass to his assignees. (2) where an exchange of accept ances; except when. When must be given up by the as signees. But where a customer agreed to pay into a bank (consisting of four partners) bills of exchange indorsed, and to take in return their promissory notes — and three of the four partners became bankrupt before the bills were paid in, or their notes taken—and after this was done, then the fourth became bankrupt, it was held in this case, that the assignees were not entitled to retain the bills so paid in; the consideration having failed, upon which alone they were parted with. (3) So bills paid in generally, to be received when due, and then to be placed to the account of the customer, must be given up by the assignees, provided the cash account is in favour of the customer, and the banker's estate is not chargeable with any outstanding engage ments on the customer's behalf. For it is perfectly clear, as a general rule, that if a customer pays bills into his banker's, although it gives him a right to expect that his drafts will be honored to the amount of the bills paid in, yet the property in the bills is not altered—they still remaining the property of the customer-although the (1) Bolland v. Bygrave, 1 Ryan & M. 271. (2) Hornblower v. Proud, 2 B. & A. 327. (3) Ex parte M'Gae, 2 Rose, 376. |