and do not embrace chattels real, leases, or interests in land, or fixtures and things attached to the freehold; and choses in action, other than trade debts, are expressly excepted by the section. () The object of the legislature was to prevent traders from gaining a delusive credit by a false appearance of substance, which may be caused by the possession of personal chattels, as the possession and ownership generally go together; which is not the case with regard to land and fixtures annexed to the realty. (a) But moveable machinery in buildings, all kinds of personal property in possession, shares in newspapers, (b) and in public companies whose shares are made personal estate, (c) stock in the public funds, patents for inventions, and all personal property assignable by deed at common law, would come within the section.

511. What possession is within the statute.-The possession of the goods and chattels by the bankrupt must be a possession as reputed owner, with the consent of the real owner. A mere temporary custody, or the mere possession without reputation of ownership, (d) or the possession with reputation of ownership, but against the will or without the knowledge of the true owner, will not vest the property in the trustee. (e) "There has been no case, or ever will be, wherein a court of law or equity will do so severe a thing as to subject the property of one man to the debts of another without proof of the consent of the real owner to leave them in the power of the bankrupt (possession only not being sufficient), or a lâches in letting them remain there so as to get him a false credit." (f) Therefore the property of infants in the hands of traders, who deal with it as the reputed owners, would not pass to the trustee for the benefit of creditors, by reason of the incapacity of infants to give their

(2) This was otherwise under the former statutes; see Hornblower v. Proud, 2 B. & Ald. 327. As to trade debts, see Cooke v. Hemming, L. R. 3 C. P. 334. Leslie v. Guthrie, I B. N. C. 697.

(a) Horn v. Baker, 9 East. 215. Barclay, ex parte, 25 Law J., Bankr. 4. Lloyd, ex parte, 3 D. & C. 787. Wilson, ex parte, 4 ib. 143. Coombs v. Beaumont, 5 B. & Ad. 73. Hubbard v. Bag. shaw, Sim. 338. Boydell v. M'Michael, 1 C. M. & R. 177.

(3) See Longman v. Tripp, 2 B. & P.

N. R. 67.

(c) Ex parte Union Bank of Manchester, L. R., 12 Eq. Ca. 354.

(d) Trismall v. Lovegrove, 6 L. T. R., N. S. 329; 10 W. R. 527.

(e) Richardson, ex parte, Buck, 488. Oliver Lingham v. Biggs, I B. & P. 88. v. Bartlett, I B. & B. 273.

(f) Ld. Hardwicke, West v. Skip, 1 Ves. sen. 243. Parke, B., Belcher v. Bellamy, 17 Law J., Exch. 222; 2 Exch. 310.

consent and permission within the intent and meaning of the statute. (g) But if the real owner be of full age, and capable of acting for himself, it should be made notorious "to the world in which the bankrupt moves," that the latter holds the property adversely, and without the consent and permission of such owner, (h) or the latter should have done all that can reasonably be expected of him to obtain possession of the property prior to the bankruptcy. (i) If the goods have been placed in the possession of the bankrupt by a person who was himself only the bailee, the consent of the latter to the bankrupt's possession is not the consent of the true owner. (j)

512. Reputation of ownership.-Where the bankrupt has once been the actual and visible owner of goods and chattels, and has made over all his right and interest in them to a third person, either absolutely or by way of mortgage, and remains in possession of the things so transferred, the continuance of possession, if not a badge of fraud, raises an irresistible presumption of the continuance of ownership (k); so that if the goods are not taken out of the possession of the mortgagor before the mortgagee had notice of an act of bankruptcy (1), they would pass to the trustee. This is the case where a trader mortgages his furniture, goods and chattels, and stockin-trade, and the mortgaged property is let to him by the mortgagee to be used for hire, or is allowed to remain in his hands notwithstanding the mortgage, and continues in his possession at the time of the adjudication (m); where the tenant of a mill gives his landlord by deed a lien upon the fixtures and machinery of the mill (2); where the goods and chattels of a trader are taken in execution by a creditor, and the latter receives an assignment of them from the sheriff, and allows the goods to remain in the trader's dwelling-house, and to be used by him for hire, down to the time of the adjudication (o); where a person, who is forbidden to trade in his own name, ships, and warehouses, and deals with goods in the

(g) Ld. Eldon, Viner v. Cadell, 3 Esp.89. (4) Best, J., in Ex parte Enderby, 2 B. & C. 398.

(i) Smith v. Topping, 5 B. & Ad. 674. (1) Fraser v. Swansea Navigation, &c., i Ad. & E. 354.

(k) Castle ex parte, 3 M. D. & De G.

124.

(4) Young v. Hope, 2 Exch. 105.
(m) Ryall v. Rowles, 1 Ves. sen. 360.

Kirkley v. Hodgson, 1 B. & C. 598.
Freshney v. Carrick, H. &. N. 661.
Hams, In re 10 Ir. Ch. R. 100. Spack.
man v. Miller, 12 C. B., N. S. 659; 31
Law J., C. P. 309.

(n) Shuttleworth v. Hernaman, I De G. & J. 322.

(0) Lingham v. Briggs, 1 B. & P. 82. Bryson v. Wylie, ib. 83, n. (a). Lingard v. Messiter, 1 B. & C. 312.

name of the bankrupt, the latter not being a commission agent for sale, and the course of dealing not being according to the ordinary usage of trade (); where a shareholder in a joint-stock company, or a railway company, deposits the certificates of the shares with the creditor as a security for the repayment of money advanced, undertaking to execute a transfer of the shares when called upon, and the shares continue standing in his name in the books of the company, notwithstanding the assignment or deposit of the certificates, and no notice of the assignment has been given to the company (9). But if the company does not permit transfers to be made by shareholders without the production of the certificates of the proprietorship of the shares, and these certificates are not in the possession or under the control of the bankrupt, there will be no reputation of ownership, from the circumstance of the shares continuing to stand in his name (r). And if the change of ownership has been made notorious to "the world in which the bankrupt moves," the presumption of ownership from the continuance of possession will be rebutted (s). If it is notorious that furniture in the possession of a bankrupt never was his property, but was hired by him with the house in which he resides, there will be no reputation of ownership from his possession of the furniture. (t) Nor does the clause apply to the case where a person becomes a dormant or secret partner of a firm in partnership, and permits the partnership stock, furniture and effects to be in the possession and under the control of the ostensible partners, who become bankrupt, for there must be a real as distinguished from an apparent owner. (u) Goods and furniture belonging to a woman who has passed herself off in the world as the wife of a bankrupt have

(p) Gordon v. E. I. Co., 7 T. R. 228. () Nutting, ex parte, 2 M. D. & De G. 302. Vallance, ex parte, 2 Deac. 354. Lanc. Can. Co., ex parte, 1 D. & C. 423. Boulton, ex parte, 20 Beav. 178. Ex parte Union Bank of Manchester, L. R. 12 Eq. Ca. 354. The same rule has been held to apply, under the repealed statutes, to the deposit by way of mortgage of a policy of insurance, where no notice, or no sufficient notice, has been given to the company. Green v. Ingham, L. R., 2 C. P. 525. Edwards v. Martin, L. R. 1 Eq. Ca. 121. And see Ex parte Caldwell, L. R., 13 Eq. Ca. 188. As to what is

sufficient notice, see Ex parte Agra Bank, re Worcester, L. R., 3 Ch. App. 555

(r) Morris v. Cannan, 31 Law J., Ch. 425. Harrison, ex parte, 3 Deac. 196. Masterman, 2 Mont. & Ayr. 212. Langmead, 20 Beav. 25. Littledale. 6 De G. M. & G. 714; 24 Law J., Bankr. 9 Boulton, 1 De G. & J. 179. Richardson, ex parte, 3 Deac. 503. Addison on Contracts, 6th ed., 259. (s) Muller v. Moss, I M. & S. 335. (1) Shaw, In re, 8 Law T. R., N. S. 336.

(u) Reynolds v. Bowley, L. R., 2 Q. B. 41; S. C. in error, p. 474.

been held to be in his possession, as reputed owner. (r) But not goods in the possession of a bankrupt and his wife belonging to the trustees of his wife's marriage settlement; (y) nor the goods of the son of a bankrupt, who lives in the same house with the bankrupt, although the goods have been used and dealt with by the latter. (2) Where a notorious. custom exists in a trade for the buyer of chattels, c. g., live stock, to leave them in the possession of the seller till it is convenient for him to remove them, the presumption of ownership will not arise. (a)

513. Things sold by the bankrupt, and left in his possession -Raw materials of manufacture.-If the bankrupt gets his living by buying and selling goods and chattels, and it is a known custom of trade for the vendor to keep possession after a sale of the things purchased, until the purchaser carts them away, or ships them off to their place of destination, possession under such circumstances will not raise a presumption of ownership. Thus it has been held that goods in the possession of a person at the time of his bankruptcy subject to a bill of sale, which entitles him to possession until the debt is demanded, and default made in payment, are not in his order and disposition. (b) Also if, after the sale, the bankrupt removes the articles away from the rest of his stock-in-trade, and puts them away in his cellars, warehouses, or into some private place of deposit, and there sets them apart for the purchaser, and enters the sale in his books, they are no longer, after such approprition has been made, in the possession, order, or disposition of the bankrupt within the meaning of the statute, "for they are not then in the possession of the bankrupt under such circumstances as to deceive the creditors by the appearance of their forming part of that stock to which they might give credit ;" (c) but if the things are left upon the bankrupt's premises undistinguishable from his stock-in-trade, in order that they may be re-sold for the benefit of the buyer, they will be in the possession of the bankrupt as reputed owner, unless it be shown that the latter acts as a commission agent for the sale of goods,

(x) Mace v. Cammel, Lofft, 782; Cowp. 232.

(1) Simmons v. Edwards, 16 M. & W. 838. See Ashton v. Blackshaw, L. R., 9 Eq. Ca. 510.

(a) Davis v. Living, 1 Holt, 275.
(a) Priestley v. Platt, L. R., 2 Exch.

101.

See post, p. 538.

(b) Ex parte Homan, L. R., 12 Eq. Ca. 598. Secus, if the bill of sale be not regis. tered, Ashton v. Blackshaw, L. R., Eq. Ca. 510.

(c) Marrable, Ex parte, 1 Gl. & Jam. 402. Dover, 2 M. D. & De G. 259.

or it is a custom of trade for property to remain on the premises of the trader to be resold. (d) "It is the usage,” observes Parke, B., "of clock-makers to have clocks of other persons in their shops, both for repair and for sale, and a man has no right to infer, from finding a clock there, that it is the property of the clock-maker. No inference ought to be drawn either that it is or is not his, and, it being uncertain, there is no certain ownership." (e)

If a ship-builder or manufacturer of steam-engines and machinery contracts for the building and sale of a specific vessel, or steam-engine, or mass of machinery, to be paid for by instalments as the work proceeds, and several instalments of the purchase-money are paid by the purchaser, so that the right of property in the chattel, so far as it has been completed, vests in the purchaser, and the builder or manufacturer becomes bankrupt, the unfinished chattel in his hands is not in his possession, order, or disposition, as the reputed owner, for it is the known custom of such trades for the manufacturer to be paid from time to time as the work progresses, and it is in. general notorious that the builders and manufacturers of such articles are not themselves the owners of them, and the trade could never be carried on if such payments by purchasers were not protected. (f) And with regard to property not capable of manual occupation and delivery, such as a ship building on the stocks, a haystack in a meadow, timber in a timber-yard, or oil, wine, or corn in stores and warehouses, the rule is, that if the bankrupt has sold such property bona fide, and received the purchase-money, and made such a delivery as the subjectmatter of the sale is capable of, and placed the property at the disposal of the purchaser prior to the act of bankruptcy, it is not in the bankrupt's possession, order, or disposition within the statute, and does not pass to the trustee, (g) although it has not been removed from the bankrupt's premises, provided it has remained there after the sale no longer than was reasonably necessary to enable the purchaser to fetch it away. (h) But the transfer of the right of property must be com

(d) Thackthwaite v. Cock, 3 Taunt. 487; Shaw v. Harvey, 1 Ad. & E. 920.

(e) Hamilton v. Bell, 10 Exch. 545; 24 Law J., Exch. 46.

(f) Clarke v. Spence, 4 Ad. & E. 448; Woods v. Russell, 5 B. & Ald. 942: Holderness v. Rankin, 2 De G. F & J. 258;

Watts, Ex parte, 32 Law J., Bankr. 36.

(g) Manton v. Moore, 7 T. R. 715. Brown v. Heathcote, 1 Atk. 159.

(4) Flyn v. Mathews, I Atk. 185; Parke, B., Belcher v. Bellamy, 17 Law J., Exch. 222.