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CASE.

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CITY BANK that case the evidence showed that the dealings to which the memorandum referred were partnership dealings, and thus put a construction upon the words "for me" contained in that memorandum; but in this case the evidence shows that there were both separate and partnership *dealings, and there is nothing by which to construe the memorandum beyond the words in which it is expressed, and which clearly apply to the separate and not to the partnership dealings. The argument on the part of the respondent, that the shares having become the property of the partnership, the deposit must be taken to have been on the joint and not on the separate account, and that the language of the memorandum being thus altered, as to the party depositing, must be altered throughout, thus rendering the debt secured the partnership debt, and not, as it expressed, the separate debt, seems to me to be untenable in two points. of view. First, that it disregards the fact that one of the parties to the contract, the respondents, did not even know of the partnership title, and dealt with the transaction as a transaction on the separate account; and secondly, that it disregards also the distinction between the right and liabilities of the parties to the contract, and the extent of the contract itself, a distinction which, in cases of this description, ought, as it seems to me, to be carefully kept in view. I agree, therefore, that this order must be discharged, and that the order must be to declare the respondents entitled to hold the shares as a security only for the 1,3737. and 5,000l. and interest, with the usual consequential directions; and I think that the respondents must pay the extra costs occasioned by their more extended claim before the Commissioner, but that there should be no costs of the appeal.

1861. March 25.

1861. July 3.

KNIGHT

BRUCE, TURNER,

L.JJ.

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EX PARTE KIDD.

(3 D. F. & J. 640-645; S. C. 7 Jur. N. S. 613; 4 L. T. N. S. 334.)
A Scottish sequestration does not create any charge or trust which
can affect the debtor's after-acquired property in England, or which
can prevent the debtor from setting up the Statute of Limitations
against the creditor after the expiration of six years from the last
payment to him under the sequestration.

[See Don v. Lippman, 47 R. R. 1 (5 Cl. & Fin. 1).]

THE BANK OF ENGLAND CASE (1).
EX PARTE NEALE.

IN RE LAURENCE AND MORTIMORE, BANKRUPTS.
(3 D. F. & J. 645-661; S. C. 30 L. J. Bk. 25.)

There is no rule that where lands are bought by partners in trade, and are paid for out of the partnership assets, they of necessity become part of the joint estate; nor, on the other hand, that if they are not bought for the purposes of the partnership business they are not joint

(1) Partnership Act, 1890, s. 21.

estate; nor does the form of the conveyance settle the question, which must be determined with reference to all the circumstances of the case.

One of two partners carrying on the business of leather factor bought lands for the purpose of erecting a residence on part of it and selling the remainder to a Railway Company. He offered a share to his partner who was also desirous of building a house out of town for his residence. The offer was accepted and the purchase-money paid out of the partnership assets; but the conveyance was to the partners in separate moieties, each of which was conveyed to the usual uses to bar dower. The partners at their individual expense built houses upon portions of the land set apart for the purpose, but the other expenses relating to the land were paid out of the partnership assets: Held, that the whole of the land constituted joint estate.

The Commissioner having held that part of the land was joint and part separate estate, there was an appeal as regards the latter part within time, and then another appeal as to the former part after the statutory time: Held, that the second appeal was a cross-appeal, and that a cross-appeal may be entered after the statutory time if the original appeal is in time.

THIS case came on upon an appeal and cross-appeal against an order of Mr. Commissioner HOLROYD declaring that certain parts of some mortgaged property constituted joint estate, and other parts separate estate; *the assignees under the bankruptcy, who were the appellants in the original appeal, contending that the whole constituted joint estate; and the Bank of England, who were the mortgagees and the appellants in the cross-appeal, contending that the whole constituted separate estate.

The question arose upon the claim of the Bank to retain their proof without realizing and deducting the proceeds of their security.

At the sitting for the choice of assignees the proof of the Bank of England had by arrangement been admitted for the full amount of 83,634l. 16s. 8d., due to them from the bankrupts. jointly, but without prejudice to the question whether the value of all or any part of the property comprised in their security should ultimately be deducted from the proof.

The bankrupts, Thomas Laurence and William Mortimore, carried on business in London as leather factors, in partnership, under the style of Streatfield, Laurence & Co. They also carried on business at Liverpool, in partnership with a Mr. Schrader, under the name of "Laurence, Mortimore & Co." Both firms stopped payment on the 2nd July, 1860, and all the partners were adjudicated bankrupts on the 21st of that month. The mortgaged property consisted of an estate at Egham, called the Trotsworth Estate, [and of certain freehold buildings, situated in Camomile Street, Bishopsgate Street, called the Saracen's Head Yard Estate (1)]. The former estate had been purchased

(1) No question as to the Saracen's Head Yard Estate arose on this appeal, as it was expressly

purchased for partnership purposes:
see post, p. 279.-O. A. S.

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BANK OF ENGLAND CASE.

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in the year 1854 by the bankrupt Mortimore for 11,000l., but before the conveyance was executed the bankrupt Laurence agreed to join in the purchase.

By an indenture dated the 9th of March, [1855] (1), the [mortgage] (3) was assured to the bankrupts in fee as joint tenants, and the mortgage debt was assigned to their trustee in trust for the bankrupts as joint tenants. The conveyance [of the Trotsworth Estate] was dated the 20th April, 1855, and was made between C. H. Barham (the vendor) of the first part, W. H. Ince of the second part, the bankrupts Thomas Laurence and William Mortimore of the third part, and a dower trustee of the fourth part; and thereby, after reciting the contract for purchase and that the bankrupts were desirous of having the estate conveyed to them in equal moieties, the estate was conveyed and assured "as to one equal undivided half-part or share thereof " to the usual uses to bar dower in favour of the bankrupt Laurence; and as to the other undivided moiety thereof to similar uses in favour of the bankrupt Mortimore.

The mortgage debt was paid out of the partnership money, and the balance of the consideration for the purchase was similarly paid, the payment in the latter case being made by means of a cheque drawn in the name of Streatfield, Laurence & Co. upon the bankers of the partnership in the following form:

"LONDON, April 12, 1855. "Pay Trotsworth Estate, or bearer Burnett and Kean, five thousand one hundred pounds.

"5,100."

(Signed)

"STREATFIELD, LAURENCE & Co."

Both sums were in the partnership books debited to the account of the Trotsworth Estate. During the same year the Trotsworth Estate account was also debited and credited with various receipts and payments, leaving a *balance of expenditure over receipts in respect thereof to the amount of 12,486l. 12s. 1d.

At the time of the purchase, and throughout the whole of the year 1855, each of the partners had standing to the credit of his private account in the partnership books a balance more than sufficient to have paid his share of the outlay in respect of the Trotsworth Estate.

At the end of that year the bankrupts granted a lease of part

(1) By mistake in the original report this date is stated as 1851: see next note.-O. A. S.

(2) In the original report the word "estate" is here inserted in the place of the word "mortgage," but

the indenture here referred to was a transfer of the mortgage previously mentioned: see the judgment of TURNER, L. J., post, p. 282.O, A. S.

of the estate to a tenant named Whitfield, reserving the right to determine the lease as to specified portions of the demised lands (which might be required for building) on giving a specified notice, on which the lessee was to surrender such portions to the bankrupts, "their heirs or assigns." The rent was reserved to the bankrupts, their heirs and assigns, and the reservation of mines and timber was in similar terms.

Shortly afterwards each of the bankrupts selected a piece of land, part of the Trotsworth Estate, as the site of a dwellinghouse for his family, and each expended about 10,000l. out of his own pocket in building such dwelling-house.

The mode in which these payments were made was, as regarded the bankrupt Laurence, by drawing upon an account which he kept with his own private bankers, and as regards the bankrupt Mortimore, by drawing in the name of partnership cheques upon the partnership account with their bankers, and debiting himself with the amount so drawn in his private account with the firm in the partnership books.

With respect to the Saracen's Head Yard Estate (which was only referred to upon the appeal by way of argument as to the other estate), that property was purchased out of the partnership monies, and was conveyed in moieties to uses in bar of dower in favour of each partner, but with a declaration that the property was bought for partnership purposes.

The first security given to the Bank was a deposit of the title-deeds of the two estates, accompanied by a memorandum dated the 1st April, 1859, and expressed to be made between the bankrupts (who were therein described as carrying on business as leather factors, under the style or firm of "Streatfield, Laurence & Co.") of the first part, and the Bank of the second. It recited an application by the bankrupts to the Bank to discount for them and on their account trade bills, and that the Bank had consented thereto upon a deposit of the title-deeds, and a legal mortgage of the above properties being made and executed as thereinafter contained. And it witnessed that the parties thereto of the first part had deposited the said title-deeds, &c., to the intent that the same should be and remain a pledge and security to the Bank for the repayment of all bills of exchange. or promissory notes discounted or to be discounted for or on account of and all monies due or to become due from the parties. thereto of the first part on any account whatsoever with interest thereon, and the parties thereto of the first part thereby covenanted to execute legal conveyances by way of mortgage of the properties as therein is mentioned. And it was agreed, that the memorandum of agreement was to continue in force for six

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months, and that upon the expiration of that time the Bank should extend the period of such discounting, &c., for a further space of six months, upon *having the individual signatures of the partners to a request for such an extension.

The bankrupts afterwards signed the following letter:

"To THE GOVERNOR AND COMPANY OF THE BANK OF ENGLAND. "We request you to continue the accommodation mentioned in the agreement dated the 1st of April last, made between ourselves trading under the firm of Streatfield, Laurence & Co. of the first part, and yourselves of the second part, and we undertake to agree that the property in the said agreement mentioned or referred to shall be a security to you not only for the moneys by the said agreement secured or intended so to be, but also for all bills or notes hereafter to be discounted for us or for our firm, or of which you may be the holders, bearing our names, and for all moneys hereafter to become due and owing from us or our firm to you on any account whatsoever, with interest, &c. And we further agree that all the engagements in the same agreement contained shall apply to all such further liabilities and to all moneys due or to become due or owing to you from us or our said firm upon any account whatever.

(Signed) "STREATFIELD, LAURENCE & Co."

"Dated October 10, 1859."

The other facts of the case will be found stated in the judgment of Lord Justice TURNER.

By the order under appeal it was declared that the Saracen's Head Yard Estate and the Trotsworth Estate, except as regarded the sites of the two houses which had been built by the bankrupts, constituted joint estate, *but that these two sites constituted separate estates of the bankrupts respectively.

The assignees appealed as to the sites of the two houses, and the Bank as to the rest of the Trotsworth Estate. Neither party complained of the decision as to the Saracen's Head Yard Estate.

On Mr. Roundell Palmer and Mr. Cotton appearing in support of the cross-appeal of the Bank,

Mr. Bacon and Mr. De Gex for the assignees objected that the appeal had not been entered within the twenty-one days prescribed by the 12th section of the Act of 1849, and that even if a cross-appeal was not limited in point of time, the appeal of the Bank was not really a cross-appeal, as it related to totally distinct property from that which was the subject of the original appeal.

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