do not dispute the authority of that case; but it has no application to this. In that case, the remitter of the bills directed his agent to pay certain sums to the plaintiff out of the produce of the bills when received--here the remitters, by their letter of the 31st December, expressly declare that the bills themselves "are belonging to, and for account of," the parties specified in the letter. In that case, also, the defendants refused from the beginning to act upon the letter of advice, and it was held, that there was consequently no privity of contract between the plaintiff and the defendants. But the assignees here can have no right to apply the proceeds of these bills to the payment of any balance due to the bankrupts from Douglas Mackenzie & Co. The bills were remitted to the bankrupts, upon a special trust to hand them over to the several persons named in the letter; and if the assignees refused to fulfill the trust, they had no right to deal with them as the property of the bankrupts. It was decided in Buchanan v. Findlay (a), that where a bill is remitted to a party for a particular purpose, he is bound to perform that purpose, or return the bill; and if he receives the amount, contrary to the directions of the remitter, he cannot apply the proceeds towards the payment of his own debt. The bills for 7341., remitted by the letter of the 31st December 1836, are not to be mixed up with the previous transaction as to the 10007. bill-the two transactions are perfectly distinct. The cases of Kilsby v. Williams (b), and Burn v. Carvalho (c) were also cited on behalf of the petitioners.

Mr. J. Russell, and Mr. Bethell, for the assignees. (b) 5 B. & Adol. 815.

(a) 9 B. & C. 738.

(c) 7 Sim. 109.

1837.

Ex parte COTTERELL and others.

1837.

Ex parte

and others.

The present case differs from that of Ex parte Clegg (a); for there the bankrupts were held to be the agents of the COTTERELL Belgian Company, and not the agents of Douglas Mackenzie & Co. But an order to apply certain proceeds to the use of another does not vest the property in the party; for it may be at any time revoked by the party who gave the order. In Scott v. Porcher (b) it was held, that a mere direction from a principal to his agent, to pay over certain proceeds (when obtained) to a third person, his creditor, gives no right or interest to the creditor, although the agent consents to fulfil the directions of his principal. [Erskine, C. J. In Scott v. Porcher the judgment of the Court proceeded upon a revocation of the remittance, and no communication having been made by the remitter to the party for whose benefit the remittance had been made.] The directions given in the present case were equally capable of revocation by Douglas Mackenzie & Co. The petitioners could have no lien on the proceeds of these bills. In Ex parte Heywood (c) it was held, that where A. consigned a cargo to B., with a direction to pay to C. out of the proceeds a sum of money, and even wrote to C. to inform him of the order in his favour, C. had notwithstanding no lien on the proceeds. [Erskine C. J. The question in this case is, whether the letter of Douglas Mackenzie & Co. did not of itself amount to an appropriation of these bills to the payment of the 7341. to the petitioners. The expression in their letter is very strong, where they say, that "the above bills are belonging to, and for account of, the following parties."] There is another material question for the consideration of the Court, and that is, whether this is a subject for jurisdic(a) See note ante. (c) 2 Rose, 355.

(b) 3 Meriv. 652.

tion in bankruptcy; as Douglas Mackenzie & Co., who are materially interested in the result of this litigation, are no parties to the petition. [Sir J. Cross. You are now setting up the jus tertii, to excuse you from doing what that third person has desired you to do.] The bills here are specially indorsed by Douglas Mackenzie & Co. to Douglas & Anderson; and the directions are, not to apply any particular bills towards the payment of the 7347., but some bills to that amount. With respect to the remittance of the 1000l. bill contained in the letter of the 7th March 1836, the bankrupts told the petitioners that they could not comply with the directions of Douglas Mackenzie & Co. in regard to that bill, but proposed some other arrangement; and the petitioners had no more reason to conclude, that the bankrupts would assent to the directions as to the payment of the 7341. The assignees here say, that the money which has come to their hands from the proceeds of these bills is liable to the claim of the bankrupts against Douglas Mackenzie & Co. The letter from the latter firm amounts to nothing more than a remittance of bills from a party who was indebted to another, requesting him to apply the bills for the benefit of certain persons, if he should approve of their being so applied. The bankrupts were, when they received this letter, large creditors of Douglas Mackenzie & Co. Suppose they had refused to comply with the request contained in the letter, and had applied the proceeds of the bills to the payment of their own debt,-could the other parties have an action against Douglas & Anderson for this application of the bills? We submit they could not. There is no case where a Court of Equity will raise a trust, in which a Court of Law will not raise a contract; the

1837.

Ex parte COTTERELL and others,

1837.

Ex parte

law as to appropriation is the same both in Law and Equity. This is clearly deducible from Sir W. Grant's COTTERELL judgment in Scott v. Porcher (a) where he says, in alluding to the directions for the payment of the money

and others.

66

relied upon in that case, this amounts to no more than
a mandate from a principal to his agent, which can give
no right or interest to a third person in the subject of
the mandate. It may be revoked at any time before it
is executed, or at least before any engagement is entered
into with a third person to execute it for his benefit; it
may be revoked, too, by any disposition of the property
inconsistent with the execution of it." Then, with re-
spect to any argument that may be raised on the trans-
mission by the assignees to the petitioners of the letter
addressed to them by Douglas Mackenzie & Co.,-even
viewing this communication in the light of a notice to
them from the assignees that they had received a sum of
money with directions to apply it for the benefit of the
petitioners, we contend, that such a notice would not
raise a contract with the petitioners on the part of the
assignees to comply with such directions. And the letter
addressed by Douglas Mackenzie & Co. to the bank-
rupts amounts to nothing like a special trust; it is nothing
more than a general request made by a debtor to his
creditor to pay another creditor a sum of money, which
the party to whom the request is made may do, or not,
as he thinks proper. The case of Burn v. Carvalho(b),
which was relied on by the other side, does not strengthen
the case of the petitioners. It certainly would appear
strange, from merely reading the marginal note of that
case, that the merchant in London should have been en-
titled to any lien; but if you look at the facts of the
(a) 3 Meriv. 652.
(b) 7 Sim. 109.

case, it will be found, that there was a direct correspondence between the London and Liverpool merchants, whereby it was expressly agreed that the agent of one party should deliver the goods in question to the agent of the other.

Mr. Swanston, in reply, was stopped by the Court.

ERSKINE, C. J.-The claim of the petitioners in this case depends upon the two letters of the 31st December 1836 respectively addressed by Douglas Mackenzie & Co. to the petitioners and the bankrupts; by which they inform the petitioners that they have remitted them bills, through the bankrupts, for the sum of 7341.; and they apprise the bankrupts, that bills to that amount are for the account of the petitioners. These letters were written after the bankruptcy of Douglas & Anderson, but before news of it was received at Singapore. The assignees have received the bills, and have applied the proceeds for the benefit of the estate of the bankrupts; and the question is, whether the assignees were entitled so to deal with them, or whether the bills were so appropriated by Douglas Mackenzie & Co., as to belong to the petitioners. The question is not governed by any of the cases cited in the argument; as in all of them, either goods were consigned to be sold, or bills were to be realized; and the consignee was then to pay certain debts, or hand over the proceeds to certain persons specified; and the remittances were general, though accompanied by directions to make certain payments. some of the cases, the party claiming the proceeds had notice of the directions given by the consignor; in others, he had no notice. The main question for our considera

In

1837.

Ex parte COTTERELL and others.