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held, notwithstanding that the banker according to 6. Effect of bankcustom enter the bills as cash in his customers accounts, 2d. The pro

agent for a particular purpose, namely to hold until due, and receive the proceeds, then first forming an item in the cash account. The circumstance of the bill being written short, is only evidence of a trust proved in this instance by express declaration, or other evidence equivalent. Entries in bankers books not proved to have been communicated to the customer, not evidence against but may be for him. The statute 21 Jac. 1. c. 19. s. 11. not applicable to bills in the hands of a banker written short, or sent for a particular purpose, the trust accounting for the possession being considered as goods in the hands of a factor with the single distinction that he cannot pledge; but if the bills are dealt with before bankruptcy, the money cannot be followed, as if dealt with afterwards it may.

Ex parte Rowton, 17 Ves. jun. 426.-1 Rose, 15. S. C.-Short bills remitted by a country bank, to their banker in London, standing at the bankruptcy of the latter entered short in the usual way, not being due. Ordered, on petition in the bankruptcy, to be delivered up by the assignees to the country bank, who not being creditors when the petition was presented, the cash balance being against them, had since become so, turning it in their favour by taking up the bankrupts acceptances on their account. The order was made without requiring the petition to be amended by stating that fact; but upon consent of the crown holding an extent for acceptances of the bankrupt, on account of duties reserved and remitted specifically by the country bank.

Ex parte Buchanan, in the matter of Kensington, 1 Rose, 280. An order was made upon the provisional assignee to deliver up short bills in the hands of bankers at the time of their bankruptcy, the estate being indemnified against their outstanding acceptances on account of the petitioner.

Ex parte The Burton Bank, &c. 2 Rose, 162. These were petitions presented in the bankruptcy of Messrs. Whitehead, Howard, and Co. bankers in London, by their correspondents in the country, for the purpose of having certain short bills of the petitioners, which were in the possession of the bankrupts at the time of the bankruptcy, delivered up, indemnifying the bankrupts estate against its liability for the petitioners. The right was considered so indisputable that the following orders were taken by consent.

Ex parte Harford. The provisional assignee to retain the cash balances, and the cash received, and on the short bills paid, and also a sufficient number of short bills unpaid to cover the amount of Whitehead and Co's acceptances, and he is to deliver over to Harford and Co. the residue of the said bills, notes, and securities. It is further understood, that the cash and notes retained, are to be given up as Harford, and Co. produce the acceptances cancelled.

Ex parte The Burton Bank.-The provisional assignee consents, that all bills, &c. shall be delivered up upon the petitioner leaving such sum as together with the cash balance, equals the acceptances outstanding.

Note, an extent had been issued on the part of the crown; but there was enough to satisfy it without resorting to the short bills, nor were they scheduled among the property seized under it. See Ex parte Rowton, 1 Rose, 15.

ruptey, &c.

perty of others,

ruptcy, &c.

2d. The property of others.

6. Effect of ban charging interest for the time they have to run, provided the balance of the cash account at the time of the bankruptcy, be in favor of the customer'. In a late case it was held that a customer paying bills, not due, into his bankers in the country, whose practice it was to credit their customers for the amount of such bills, if approved, as cash (charging interest), is entitled to recover back such bills in specie from the bankers becoming bankrupt; the balance of his cash account, independant of such bills, being in his favour at the time of the bankruptcy: and if payment be afterwards received upon such bills by the assignees, they are liable to refund it to the customer in an action for money had and received; and Lord Ellenborough observed, that "every man who pays bills not due into the hands of the banker, places them there, as in the hands of his agent, to obtain payment of them when due. If the banker discount the bill, or advance money upon the credit of it, that alters the case; he then acquires the entire property in it, or has a lien on it pro tanto for his advance. The only difference between the practice stated of London and country bankers in this respect is, that the former, if overdrawn; has a lien on the bill deposited with him, though not indorsed; whereas the country banker, who always takes the bill indorsed, has not only a lien upon it, if his account be overdrawn, but has also his legal remedy upon the bill by the indorsement; but neither of them can have any lien on such bills until their account be overdrawn: and here the balance of the cash account at the time of the bankruptcy was in favour of the plaintiffs."

So in the case Ex parte Sayers', where A. abroad commissions B. in London, to send him foreign coin, with particular directions as to the manner and time

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ruptcy, &c.

of sending it; and remits bills, which B. discounts, 6. Effect of bankand the coin required not being to be had in England, 2d. The property sends two remittances not equal to the amount of A.'s of others. bills to Lisbon for the purpose of procuring it; with directions, if it cannot be had, to return the bills. The coin not being to be had, bills nearly to the amount of the remittance to Lisbon, not indorsed by the correspondent there, are returned, and B., in the interval, becoming bankrupt, are received by his assignees; A. was held to have a right to those bills upon the particular circumstances, the Lord Chancellor expressing much doubt, whether such right would exist in the case of a remittance to buy goods in the way of trade.

And on the same principle in Hassall v. Smithers', it was held that a remittance in bills and notes for a specific purpose, viz. to answer acceptances, received by the administrator, in consequence of the death of the party to whom it was remitted, was not general assets, the specific purpose operating as a lien, which would also be the effect upon a bankruptcy.

But if the holder of bills deliver them to a banker, expressly on the terms of discount, or if, by the course of dealing between the customer and banker, bills received by the latter are understood by both parties as cash minus the discount, and the customer is at liberty to draw on account thereof, beyond the amount of cash in the hands of the banker, then, in the event of the bankruptcy of the banker, the assignees are entitled to the bills.

2

12 Ves. jun. 119.

Ante, 158.-Carstairs v. Bates, 3 Campb. 301.

Carstairs and others, assignees of Kensington v. Bates, 3 Campb. 301. Where bankers discount a bill of exchange for a customer, giving him credit for the amount of the bill, and debiting him with the discount, the bill becomes the property of the bankers, and upon their bankruptcy their assignees may maintain an action upon it, although there be no balance due to them from the customer.-Per Lord Ellenborough. "Is it meant seriously to contest the right of the assignees to recover in this action? The bankers were the pur

6. Effect of bankruptcy, &c.

A party to a bill or note who has become insolvent Insolvent debtors. may be discharged from liability by the operation of an insolvent act. In a late case, where after the first day of July, 1809, mentioned in the Insolvent Debtors Act, 49 Geo. 3. c. 115., a promissory note was given for an antecedent debt, it was decided that as against the payee, the maker would have been discharged under this act, but that he was not as against a person to whom the note was subsequently indorsed'.

chasers of this bill. They did not receive it as the agents of Allport. The whole property and interest in the bill vested in themselves, and they stood all risks from the moment of the discount. If the bill had been afterwards stolen on burnt, theirs would have been the loss. In Giles v. Perkins, the bankers were mere depositaries, with a lien when the account was overdrawn. The customer there drew on the credit of the bills deposited. Here Allport might have drawn out the amount of the bill, deducting the discount as actual cash, in the same manner as if he had dishonoured the bill with a third person, and then paid in the amount in bank notes. The discount makes the bankers complete purchasers of the bill. The transaction was completed; they had no lien but the thing itself; the bill was as much theirs as any chattel they possessed. This very distinction was taken in the case cited; for it was there said, if the banker discount the bill, or advance money on the credit of it, that alters the case; he then acquires the entire property in it, or has a lien on it pro tanto for his advance."-Verdict for plaintiff.

So in Paley, P. & A. 72., it is laid down thus:" But in order to prevent the effect of the bankrupts laws from attaching negotiable securities in the hands of a bankrupt agent, there must be a specifie appropriation of them, as by lodging of bill for bill, or by the deposit of several in one entire transaction, to answer a particular purpose; for if they are paid in from time to time, upon a general running account, they become the effects of the person to whom they are so paid, and are not reclaimable. The doctrine is thus generally stated by Lord Hardwicke:-' If bills are sent by a correspondent to a merchant here to be received, and the money to be applied to a particular use, and the merchant becomes bankrupt before the money is received on the bills, the correspondent has a special lien in respect of those bills, and the money shall not be divided amongst the creditors at large. But where bills are sent on a general account between the correspondent and the merchant, and as an item in the account, it is otherwise.'"-Bent v. Puller, 5 T. R. 494.

Sharp v. Ifgrave, 3 Bos. & Pul. 394.-Lord Kinnard v. Barrow, 8 T. R. 49.

Lucas v. Winton, 2 Campb. 443.

APPENDIX.

N. B. Throughout the Forms the parts in Italics though usually inserted may, and in general should be omitted, as will appear from the notes to each part.

SECT. I.

AFFIDAVITS TO ARREST'.

"

In the King's Bench, (or “ Common Pleas," or " Exchequer.")
A. B. of , gentleman, maketh oath and saith, that C. D.
is justly and truly indebted to this deponent in the sum of £50,
On a promissory note made by the said C. D. payable to this
deponent on demand, (or " at a certain day now past.”)

And this deponent further saith, that no tender or offer hath been made to pay the said sum of £50, or any part thereof, in any note or notes of the Governor and Company of the Bank of England, expressed to be payable on demand.

Sworn, &c.

On a promissory note, bearing date the

A. D..

day of

On a promissory note, payee against maker.

The like in an

made by the said C. D., and whereby the said C. D. other form.

promised to pay, two months after the date thereof, to this deponent, or order, the sum of £50, for value received.

In the sum of £50, as indorsee of a promissory note made by Indorsee against the said C. D. and for the payment of the sum of £50 to one

E. F. or order, at a certain day now past, and by him indorsed to

this deponent.

maker.

To this deponent, as the indorsee of a promissory note, bearing Indorsee against date, &c. made by one E. F. and whereby the said E. F. promised

to pay, two months after the date thereof, the sum of £50, to the said C. D. or order, and the said C. D. indorsed the same note to this deponent.

'As to the affidavit to hold to bail, see ante, 446 to 449.

indorser.

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