bankruptcy, the proceeds of the manufactory would have been distributable as the separate property of A.

To what extent and under what circumstances goods and chattels may be deemed in the order and disposition of the partners, or some of them, without being in the reputed ownership of the firm, is a question of some nicety. In Ex parte Hare (a), certain household furniture, which belonged to one of the partners, was used in the house where they conducted their business, and treated as partnership property; and the Court of Review held, that it was distributable as joint estate, and not as the separate estate of the partner to whom it belonged; but from the contradictory reports of this case, it is impossible to tell whether the Court considered it to be in the reputed ownership of the firm. It may be collected, however, from both reports, that the Court did not consider it necessary to resort to the doctrine of reputed ownership, in order to decide that case.

I. 3. Whatever was made separate estate by agreement amongst the partners, but is comprehended under the term goods or chattels in the possession, order, and disposition of the copartnership, or whereof they were reputed owners at the time they became bankrupt (b)," is joint estate under the bankruptcy.

Thus, in the case of Ex parte Smith, which we have just cited, it was agreed that the utensils, as well as the manufactory, should remain the separate property of A.; but, although the opinion of the Court was otherwise as to the manufactory, yet, as to the utensils, there seemed to be no doubt that, if they had not been destroyed before the bankruptcy, they would have been distributable as joint property, by virtue of the

statute.

Again, A., B., and C. were partners; C. was interested in the profits, but had no share in the capital, which belonged exclusively to A. and B. A joint commission having issued against A., B., and C., the property of A. and B. was distributed under the commission, as the joint property of A., B., and C. (c).

Again, A. and his son B., being partners, A., in consideration,

(a) 2 Mont. & A. 478; 1 Dea. 16. (b) See p. 596, note (c).

(c) Ex parte Hunter, 2 Rose, 382; Ex parte Jackson, 1 Ves. 131.

as expressed by the assignment, of natural love and affection to B, assigned to him certain ships used in the trade, which were thereupon registered in the sole name of B. The capital of the business having been advanced by A. solely, it was contended for his separate creditors, that the proceeds of the vessels included in the assignment ought to be declared part of his separate estate, he having assigned them without sufficient consideration. But the commissioners certifying that the ships were in the order and disposition of the bankrupts at the date and suing forth of the commission, Lord Eldon made an order confirming the certificate, and declaring the ships in question to be part of the joint estate of A. and B. (a).

We may here mention, as referable to the rule above stated, the case of Horn v. Baker (b), in which, upon the dissolution of

(a) Ex parte Burn, 1 Jac. & Walk. 378; Ex parte Jones, 4 Mau. & Selw. 450, overruling Ex parte Yallop, 15 Ves. 60; and Ex parte Houghton, 17 Ves. 252. See also Robinson v. M'Donnell, 5 Mau. & Selw. 228; Hay v. Fairbairn, 2 Barn. & Ald. 193; Monkhouse v. Hay, 2 Brod. & Bing. 114; Kirkley v. Hodgson, 1 Barn. & Cres. 580. In which cases it was held, that where the ship was mortgaged, but remained in the order and disposition of the mortgagor, upon his bankruptcy it passed to his assignees, whether the ship was registered in the name of the mortgagor or the mortgagee. But now, by the 6 Geo. 4, c. 110, s. 46, mortgagees are protected under such circumstances, provided the transfer shall have been duly registered according to the provisions of that act.

(b) 9 East, 215. Where a person erects fixtures on the land which he occupies for the purposes of his trade, and mortgages his interest in the land, together with the fixtures, and then becomes bankrupt, such of the fixtures as are annexed to the freehold will pass to the mortgagee,

and such as are not so annexed will pass to the assignees of the bankrupt as reputed owner, unless there be any evidence of a custom to hire chattels of this last description, in which case the presumption of reputed ownership will be rebutted. Horn v. Baker, supra; Ex parte Wilson, 2 Mont. & A. 71. This rule will not be altered by the fact of the mortgage being made by several persons in partnership, one of whom has the legal interest in the freehold; for in such case, the legal owner mortgages both on his own account and as agent of the firm. Ex parte Lloyd, 1 Mont. & Ayr. 513. The difficulty in these cases, seems to consist in determining what is an annexation to the freehold. Compare the observations of Erskine, C. J., 1 Mont. & Ayr. 514, with those of Lord Lyndhurst in Trappes v. Harter, 2 C. & M. 180, 181. Where the fixture cannot be removed without injury to the building to which it is attached, it is clearly to be considered as annexed to the freehold. On the other hand, even if it be not so incorporated with the building as to make it

a partnership between A., B., and C., and the creation of a new partnership between C. and J., it was agreed that certain leasehold premises, vats and stills, and utensils of trade, in which A. had the sole interest, should be enjoyed by C. and J. for the purposes of their partnership, under covenants for payment of an annuity to A. for his life, for keeping the vats, stills, and utensils in proper repair, and for delivering them up at the expiration of the leases if not purchased, with a proviso for re-entry by A. in case of non-payment of the annuity. C. and J. became bankrupt, and it was held that such of the vats, stills, &c., as were affixed to the freehold, remained A.'s separate property, but that such as were not so affixed, were in the order and disposition of C. and J. as reputed owners thereof.

But, in order to make the separate chattels of one partner distributable as joint property, they must have been in the possession, order, or disposition of the partnership, at the time of the bankruptcy. Therefore, where it was agreed between A. and B., partners, that the utensils of the trade should remain the separate property of A., and they were afterwards, but before the bankruptcy of the partners, destroyed by fire, it was held that the money coming to the assignees for the insurance of the utensils, was distributable among the separate creditors of A. (a). So, where A., one of the part-owners of a ship, insured his share of the ship and cargo, and the ship was lost, and A. afterwards became bankrupt, it was held that the money coming to the assignees for the insurance was the separate property of A. (b).

I. 4. Whatever has been converted into separate estate, and is no longer in the order and disposition of the partnership, is separate estate under the bankruptcy.

Therefore, if, upon the dissolution of a partnership, the retiring partner bond fide assigns all his interest in the stock and effects to the remaining partner, who afterwards becomes bankrupt, so much of the partnership stock so assigned as remains in specie, will vest in the assignees of the bankrupt as his separate property, and will be distributable accordingly. The

irremovable by the tenant, on the ground of destructive waste, it may be considered of such a permanent nature as to be free from the operation of the rule as to reputed owner

ship.

(a) Ex parte Smith, 3 Madd. 63. (b) Ex parte Parry, 5 Ves. 575; Ex parte Browne, 6 Ves. 136.

leading case on the subject is Ex parte Ruffin (a). There, Thomas Cooper and James Cooper were partners. By articles, dated the 3rd November, 1798, the partnership was dissolved, and the buildings, premises, stock in trade, debts, and effects, were assigned to James Cooper by Thomas Cooper, who retired from the trade. The parties likewise covenanted to abide by a valuation to be made of the partnership property; and James Cooper covenanted to pay the partnership debts then due, and to indemnify Thomas Cooper against them. A bond for £3000, the calculated value of the partnership property assigned, was given to Thomas Cooper by James Cooper and his father, as surety. In pursuance of the covenant, the partnership property, consisting of leases, the premises where the trade had been carried on, stock, implements, outstanding debts, and other effects, were valued by arbitrators at £2030, after charging all the partnership debts then due. All the joint creditors knew of the dissolution and the assignment of the property; advertisements were published; and James Cooper, after the dissolution, received many debts due to the partnership, but paid more on account of the partnership. He paid the interest of the bond regularly, and intended to pay the principal, when due. A commission of bankrupt afterwards issued against him.

Upon a petition by the joint creditors, stating these facts, and praying that the partnership effects remaining in specie might be sold, and that the outstanding debts might be accounted joint estate, Lord Eldon dismissed the petition. After having adverted to the general principle of creditors having no primary lien on the partnership effects, but only either a demand at law, created by legal process, or a demand in equity or in bankruptcy, arising from the equity of the partners amongst themselves, he said-“A bond fide transmutation of partnership property is understood to be the act of men acting fairly, winding up the concern, and binds the creditors; and, therefore, the Court always lets the arrangements be as they stood, not at the time of the commission, but of the act of bankruptcy. Thomas Cooper is admitted to be solvent. He certainly has no such equity, as if the partnership had been dissolved by bankruptcy, death, effluxion of time, or any other

(a) 6 Ves. 119; and see Ex parte Freeman, Buck, 471; Ex parte Fry, 1 Glyn & Jam. 96.

circumstance, not his own act. But he dissolves the partnership a year and a half ago; and, instead of calling upon these effects, according to his equity at the dissolution, to pay the partnership debts, he assigns his interest to the other, to deal as he thinks fit with the property, to act with the world respecting it, desiring only a bond to pay a given value in three or four years. Therefore, he or his executors could not sue. If it was necessary for the creditors to operate their relief through his equity, he has no equity. The assignment was not made subject to the payment of the debts, but in consideration of a covenant, leaving no duty upon the property, but attaching a personal obligation upon the assignee to pay the debts; the creditors, therefore, cannot rest upon the equity of the partner going out."

The case of Ex parte Fell (a) was similar to the foregoing. There, A. and two others being partners, A. retired, and due notice was given of the dissolution of the partnership. Upon his retirement, A., by deed, assigned his share of the stock, &c., to the remaining partners, in consideration of a certain sum; and the remaining partners covenanted to indemnify him against the partnership debts. The remaining partners became bankrupt. A., having been arrested by creditors of the old partnership, petitioned that the specific stock and debts of the old partnership might be applied in satisfaction of the creditors of that partnership, in preference to the creditors of the new firm. But Lord Eldon dismissed the petition, being of opinion that this case fell precisely within the same rule as Ex parte Ruffin.

II. 1. In order to convert joint into separate property, it is not necessary, in the case of goods in specie, that there should be a deed of assignment to the remaining partner. It appears that delivery of the goods, coupled with due notice that the partnership is dissolved, and that the remaining partner will pay the debts of the firm, is sufficient evidence of an agreement to change the ownership. In Ex parte Williams (b), Shepherd and Smith, who were in partnership as linen-drapers, dissolved their partnership on the 5th of September, 1803; inserting a notice in the London Gazette on the 25th of November, in (b) 11 Ves. 3.

(a) 10 Ves. 347.