1843. Ex parte DR. took place in May 1836; and he paid over such interest to Mrs. Hawkes, as the tenant for life. After his decease, and up to December 1841, the interest was paid to Mrs. Hawkes by the firm, without the intervention of the surviving trustee, Mr. Watson. The following were the entries relating to these transactions in the bankrupts' private ledger : And the following memorandum in the bankrupt's balance book was signed by the bankrupts: The foregoing balance for the year 1835 and 1836, examined and approved by us this 19th day of April, 1837, D. W. ACRAMAN, W. EDWARD ACRAMAN. The fiat issued on the 11th of June 1842, and in July 1843 a proof for the 2000l., and for 51l. 18s. 4d. for interest, was tendered by Mr. Watson and Mr. and Mrs. Hawkes, who, by their affidavit in support of the proof, deposed that according to their belief the bankrupts had full notice of the settlement, and were well aware that the 2000l. was trust money, held by John Acraman upon the trusts of that instrument. Mr. Anderdon and Mr. Craig. It was admitted before the Commissioner, that no authority could be produced directly in point for the admission of the proof against the separate estate. The ground of the decision of the Commissioner was, that a breach of trust constituted a joint and several liability. But a distinction, which was disregarded, was, that which exists between a breach of trust committed by parties themselves, and a breach of trust of which they have merely notice. If trustees sell out a trust fund, and pay it to their bankers, who have notice of the transaction, the bankers are not jointly and severally liable. In Fauntleroy's case (a) the proofs were against the joint estate. The relation of the firm to the trust estate is that of debtor and creditor only. In most of the authorities relied upon by the learned Commissioner, one of the partners was a trustee, and brought the trust fund into the concern ; and in those cases the rule is to give the cestui que trust an election whether he will prove against the separate estate of the trustee-partner, or against the joint estate of the firm; but the learned Commissioner cited no instance in which the members of the partnership were (a) Ex parte Bolland, Mont. & M'Arth. 315; 1 M. & A. 570; Marsh v. Keating, 1 M. & A. 592. 1843. Ex parte WOODIN. 1843. Ex parte WOODIN. converted into individual trustees, so as to give the cestui que trust a right of proving against the separate estate of each. In Ex parte Beilby (a), the point might, and no doubt would, have been taken, if it were tenable. The liability of the bankrupts arose at the instant of the receipt of the money by them, and was then, and must still be, a joint liability only. But even admitting that there would have been a joint and separate liability, had the parties remained solvent, it does not follow, that there will be a right of proof against the separate estate. To give a right of election in bankruptcy, there must be an express and not merely an implied liability of both estates. The creditor must have contracted for the double liability, and must have a right of suing the bankrupts jointly or severally. Now here it would be impossible for proceedings to have been taken against any partners individually. Mr. Swanston and Mr. Wood, contrà. There is no authority for the distinction between direct and constructive trust. With regard to the former, the rule has been long established, that a breach of trust creates a joint and separate liability; Keble v. Thompson (b). Ex parte Beilby (a), cited on the other side, is really an authority in our favour. The bankruptcy cannot vary the liability; for as a creditor claiming in respect of a breach of trust had a complete equitable right against each of the bankrupts, and could enforce such rights against any one of them at his option, the circumstance of the bankruptcy intervening ought not to make any difference. It is true that in Ex parte Heaton (c), and Ex parte (a) 1 G. & J. 167. (b) 3 Bro. C. C. 112. Watson (a), and in other cases, proofs were allowed to be made against the joint estate; but it does not follow, that if the question had been raised, the proof would not have been allowed against the separate estates, if there were any. In Ex parte Heaton there was no separate estate. In none of the cases is any distinction in the rules of equity as regards their application to bankruptcy contended for. Mr. Stinton, for the assignees. Mr. Anderdon, in reply. VICE-CHANCELLOR KNIGHT BRUCE, C. J.-It is unnecessary to consider how the case would have stood, if the bankrupts had kept or opened an account with the trustees, or either of them, in respect of the sum in question. They did not do so. The only account relating to it, which they appear to have kept or opened, was with Mrs. Hawkes, a married woman, the equitable tenant for life of the income of the trust fund, for her separate use, under a restraint against anticipation. The bankrupts were merchants, but not ordinary bankers, and their account commences thus: [His Honour read the account as above set out.] The balance is carried on with intetest from time to time through the years 1835, 1836, 1837, and 1838, the whole being a continuation of the same account, under the single name of Anne Jones Hawkes; and it is agreed on all hands, that the account was continued, in the same manner, up to the time of the bankruptcy. In 1837, with reference to the death of John Acraman, the three bankrupts (a) 2 V. & B. 414. 1843. Ex parte WOODIN. 1843. Ex parte WOODIN. signed this entry in their books. [His Honour read it.] The interest, as I have said, was paid from time to time by the bankrupts to this lady, probably during John Acraman's lifetime, through him, but after his death, which happened in May 1836, to herself, and as I collect, without any direction or intervention on the part of Mr. Watson, the co-trustee of Mr. John Acraman, who is still living. It is stated at the bar, that two of the bankrupts were the executors of John Acraman, but they do not appear, so far as this matter is concerned, to have acted in that capacity, nor do I think the fact material. Mrs. Hawkes, a married woman, restrained from anticipation, was incapable of assenting to the mode in which the capital was invested or lent; which, it is agreed on all hands, was, as between the trustees and the cestuis que trustent, a breach of trust. The condition of the evidence is such as to render it necessary, in my opinion, for me to assume, that the bankrupts had actual notice of the nature of the trusts, to which the fund in question was liable. And the facts of the case, taken altogether, including of course the particular character of the entries in the books, establish, in my opinion, the proposition, that the three bankrupts had made themselves in effect directly trustees of the fund,--not regularly trustees, I agree, but, for every purpose of liability, complete trustees; and consequently, under the circumstances, jointly and severally liable to restore it. The petition must be dismissed with costs, to be paid out of the separate estate of D. W. Acraman. The dividends upon the proof must be dealt with as the Court shall direct. The term "constructive trust" has been much used in the course of the argument. It is a flexible term, of considerable extent, and perhaps not |