Taylor and Another, Assignees of Walsh, a Bankrupt, against Sir Tho. Plumer. Friday, Feb. 10th, 1815. Where a draft for money was entrusted to a broker to buy Exchequer bills for his principal, and the broker received the money and misapplied it by purchasing American stock and bullion, intending to abscond with it and go to America, and did accordingly abscond, but was taken before he quitted England, and thereupon surrendered to the principal the securities for the American stock and the bullion, who sold the whole and received the proceeds: Held that the principal was entitled to withhold the proceeds from the assignees of the broker, who became bankrupt on the day on which he so received and misapplied the money.

[Referred to, In re Strachan; Ex parte Cooke, 1876, 4 Ch. D. 127; In re West of England, &c., Bank; Ex parte Dale and Company, 1879, 11 Ch. D. 777 ; In re Hallett's Estate, 1879, 13 Ch. D. 717; Harris v. Truman, 1881-82, 7 Q. B. D. 353; 9 Q. B. D. 264 ; Patten v. Bond, 1889, 60 L. T. 585; Lister v. Stubbs, 1890, 45 Ch. D. 5; Moss v. Hancock, [1899] 2 Q. B. 119 ; King v. Button, [1899] 2 Q. B. 558; [1900] 2 Q. B. 504.]

Trover for the certificates or securities for 50 shares in the Bank of the United States of America, and for the certificates or securities for certain sums in the 3 Per Cent. Funded Stock of the United States, and the powers of attorney respectively relating thereto, and also for certain bullion, viz. 71 doubloons and a half. Plea, general issue. At the trial before Lord Ellenborough C.J., at the London sittings after Michaelmas term 1813, there was a verdict for the plaintiffs, damages 10,459l. 18s. 6d. in respect of the securities, and 302l. in respect of the bullion, separately, subject to the opinion of the Court upon a case reserved, which stated the plaintiffs to be the assignees of Walsh under a commission of bankruptcy of the 10th of December 181l. Walsh was a stock-broker, who had occasionally been employed by the defen¡dant for some time before 181l. In August of that year the defendant, expecting to have occasion for a large sum of money at Michaelmas to pay for an estate which he had contracted to purchase,  [*563]  consulted Walsh on the propriety of selling out stock to provide for such payment, and desired him to inform him when he, Walsh, thought it would be most expedient to do so. In November, the title to the estate not having been then completed, Walsh, thinking the funds likely to fall, recommended to the defendant to sell out stock, being principally in a fund which is regularly shut from the beginning of December till about the 7th of January; and the defendant having considered the matter, on the 28th of November sent Walsh orders to sell. Sales were accordingly effected by Walsh as broker on the 29th to the amount of 21,774l. 5s. sterling, the transfers to be made and the money to be paid on the 4th of  [**722]  December.

(a) Core v. Dore, Sir T. Jones, 167. S. C. 2 Show. 164. 2 Wms. Saund. 133 a.

On the 4th the stock was transferred by the defendant, and the price was received by Walsh, who on the same day paid 21,500l., part of the said price, into the hands of Messrs. Goslings and Co., the defendant's bankers, to the defendant's account, and saw the defendant and informed him of it. The defendant proposed to Walsh to invest the money in Exchequer bills until it should be wanted to pay for the estate, and in the evening desired him to call the following day for a draft in order that he, as broker, might buy Exchequer bills for the defendant. Accordingly on the next day, the 5th, about 11 o'clock in the forenoon, Walsh called, when the defendant said he had more money at his bankers than he wished to keep unemployed, and gave him a draft upon Goslings for 22,200l., which he directed him to lay out for him in the purchase of Exchequer bills, to be delivered on the same day to him, the defendant, or his bankers. The defendant did not authorize Walsh, nor was Walsh in any manner authorized to apply the draft or money  [*564]  to be received for it, to any other purpose, nor had the defendant any reason to expect or apprehend that it would be applied to any other purpose. Walsh went to Goslings, received the amount of the draft from them in 22 Bank of England notes of 1000l. each, and one for 200l., but purchased Exchequer bills to the amount of 6500l. only, having bought them in the usual course of business, and he lodged them at Goslings on the defendant's account. About four in the afternoon he called on the defendant and told him that he bad lodged the 6500l. Exchequer bills at Goslings, and that he had agreed for the remainder of the intended purchase of Exchequer bills to be delivered at a future day, and had therefore left a sum, which he named (being an even sum nearly corresponding with the difference of the 22,200l.) to his account at Goslings.

But the fact was not so; on the contrary, Walsh being ruined in his circumstances, and completely insolvent, had, between the time of the sale of the defendant's stock and the time when he received the price of it, conceived an intention of absconding with the money when it should come to his hands, and with that view, on the 2d of December, had given orders for the purchase of the American shares, stock, and bullion in question, in order to take them with him abroad, having no means of paying for the American shares and stock but out of the money he expected to receive belonging to the defendant, nor any money of his own to pay for the bullion, though he might have acquired money for that, but intending to pay for that also out of the defendant's money.

Accordingly, after receiving the draft at Goslings, he went immediately from thence to the American stock brokers in the city, received the certificates,  [*565]  and paid for them with 11 of the identical Bank of England notes of 1000l. each, which he had just received, taking back from the broker to whom he paid them the difference of 540l. Is. 6d. The same morning he delivered to his brother-in-law another of the 1000l. bank-notes, and received from his brother-in-law in exchange, a draft, of the firm in which he is a partner, on their bankers for 500l., and another draft for 100l., leaving the remainder in his brother-in-law's hands, and with the 500l. draft he paid for the bullion, receiving the difference from the goldsmith who furnished it. Walsh had a dwelling-house at Hackney, where he resided with his wife and family, and also a counting-house in London, where he carried on his business. About nine in the morning of the 5th he left his dwelling-house, taking with him cloaths and other necessaries for his journey, intending not to return, but to leave London in the evening by the mail-coach, in which he had taken a place on the 3d or 4th, and to proceed immediately to Falmouth, and from thence by the first packet to Lisbon, and so to North America. He left London accordingly by the mail-coach, taking with him the securities and bullion in question. He was pursued by the defendant's attorney and a police officer by the defendant's desire, the attorney having a general authority to act for the defendant, but no particular directions, and on the 9th they overtook Walsh whilst he was waiting at Falmouth for the packet's putting to sea, and he then surrendered up the property in question to the attorney for the purpose of being assigned over to the defendant, and in the course of that day executed a deed, which was prepared by the attorney's order, assigning the property to the defendant in trust  [*566]  to sell and pay himself a debt of 15,500l. (being about the difference between the price of the 6500l. Exchequer bills and the 22,200l.), also a bond to the defendant in the penalty of 31,000l., for the payment by him of 15,500l., and interest at 5 per cent., and a warrant of attorney for confessing a judgment upon such bond, which were also prepared by the attorney at the same time, and after being executed, were delivered to him, the attorney and the police officer witnessing  [**723]  the same. They all returned to London, when Walsh was carried before a magistrate, and afterwards indicted for felony, tried, and found guilty, subject to the opinion of the Judges, but was afterwards pardoned without any judgment having been pronounced (a)¹. The case also stated that the act of bankruptcy was committed on the 5th of December, that Walsh's advice to the defendant to sell out his stock was given bona fide, and no false pretence or imposition was used to obtain the defendant's draft upon Messrs. Goslings, or the possession of the money which he afterwards received and misapplied, and that the property in question, which was surrendered by Walsh to the attorney, was delivered up by the attorney to the defendant, of whom the plaintiffs demanded it, but the defendant refused to deliver any of it, and sold the whole and received the proceeds. The question for the opinion of the Court is, whether the plaintiffs are entitled wholly, or in part, to recover; if they are, the verdict is to be entered accordingly; if not, a nonsuit to be entered.

Marryat, for the plaintiffs in the last term, argued that the defendant had not any lien upon the property  [*567]  in question, as against the plaintiffs, the assignees of Walsh, and therefore was not entitled to withhold the proceeds from them. He admitted that specific property in the possession of an agent, who becomes bankrupt, which was entrusted to him for a special purpose, belongs to the principal, and not to the representatives of the bankrupt agent; also that where the property is not the same, but has been acquired by the bankrupt in lieu of the trust property, and in pursuance of the trust, the same rule applies to it, provided such property is capable of being ascertained.; So he said is the rule also between a trustee or his executors after his decease, and cestui qui trust, and Burdett v. Willet (a)², Ex parte Chion (b)¹, and Bassal v. Smithers (c), all come within one or other of those rules. But he took this distinction, that where the property has been tortiously acquired by the agent in fraud of the trust, there the lien of the principal is at an end, because he cannot for his own private advantage, and to the prejudice of all the other creditors, aver what has been done in fraud of his trust to have been done in execution of it. And upon this distinction he founded the argument for the plaintiffs; for here he said it was plain that the property which the defendant claimed to retain was property which Walsh had acquired by conversion of the trust-property to his own use in contravention of the purposes of his trust. Wherefore it shall not remain to the defendant, but shall pass by the assignment, like the rest of the bankrupt's property, to the general body of creditors (d), ln like manner a  [*568]  Court of Equity has refused to extend the lien to lands purchased by the misapplication of trust-money, < i>Cox v. Bateman (of; or to any lands purchased by a trustee, where it is not clear that they were purchased in execution of his trust, Perry v. Phelips (b)². So that in equity the distinction is plain ; where the estate is purchased in execution of the trust, the Court will hold it subject to the trust, but where the purchase is a breach of the trust, cestui qui trust stands merely as a simple contract creditor, the estate purchased not being subject to the trust. If, as the defendant would have it, a principal may follow the property entrusted by him to his agent for a special purpose, through all the changes which it may undergo in the hands of the agent without regard to the object of his trust, to what confusion would it lead. According to that, if A. entrust his agent with money to purchase a horse, and the agent, instead of purchasing a horse, purchase a carriage, A. shall have the carriage. Or if in this case Walsh had exchanged the bank-notes in part for goods, and in part for other monies, and with those other monies had purchased bullion, or a shop with the stock in trade, and commenced trader, the defendant would have been entitled not only to the various articles purchased with the bank-notes and monies, but also to the shop and stock in trade, together with all the credits arising from the trade. Such a doctrine would lead to great practical inconvenience, whereas the rule is simple and convenient, that so long only as the property remains identically the same, or subsists in a form consistent with the trust, it shall enure to the benefit of the prin- [*569] -cipal. And there is reason as well as convenience in so limiting the rule; for as the principal would not be bound to take the property, if purchased by the agent in violation of the trust, so it is only so long as he would be bound to accept  [**724]  it, that he can reasonably call it his own. In Scott v. Surman (a)¹ the factor acted in pursuance of his trust when he took the notes in payment of the goods sold by him for his principal, and therefore the notes might well be deemed the property of the principal consistently with the distinction already taken. The same may be said of Gladstone v. Hadwen (b)¹; for the bills were the identical bills which had been delivered to the bankrupt, and the bank-notes were part of the proceeds of one of the bills which had been exchanged by the bankrupt in pursuance of his authority. And* besides, the main distinction of that ease is, that the bills were originally obtained by the bankrupt by a criminal fraud, indictable, and punishable with transportation; whereas here all fraud in the obtaining of the draft or money is distinctly negatived, and it does not appear that Walsh has been guilty of any indictable offence. Under these circumstances could the defendant have maintained trover for the property, if it had been withheld from him? If he could not, the circumstance of Walsh's having surrendered the property to him will not vary his rights, nor can the defendant, by accepting the farther securities from Walsh, be considered as having waved the tort and confirmed Walsh's acts.

Abbott, contra, denied the distinction taken on the other side, contending, that the rule was general, that  [*570]  nothing passed by the assignment but what was in equity, as well as law, the property of the bankrupt. Accordingly Willes C.J. in Scott v. Surman (a)², declared that "his notion was that the assignees are not to be considered as general assignees of all the real and personal estate of which the bankrupt was seised and possessed, as heirs and executors are of the estates of their ancestors and testators, but that nothing vests in them even at law, but such real and personal estate of the bankrupt in which he had the equitable as well as legal interest." Upon this principle the Court took notice in Winch v. Keeley (b)², that the debt, though in point of law due to the bankrupt was subject to a trust, and therefore did not pass to his assignees, but might be recovered to the use of the assignee of the debt. And the same principle governed Gladstone v. Hadwen. And the better reason why equity would not interfere in Cox v. Bateman and Perry v. Phelips seems to be, because it did not appear the lands were purchased with the trust-money; besides, in Cox v. Bateman the lands were in Ireland. But Lane v. Dighton (c)¹, Balgney v. Hamilton (d)¹, Wilson v. Foreman (e), all shew that if trust-money be misapplied in the purchase of land, a Court of Equity will follow it in the hands of the purchaser. So equity will follow goods in the hands of a factor, in behalf of him who employed the factor, though the goods were purchased not in pursuance of the factor's authority, Whitecomb v. Jacob (f); and in Ex parte Sayers (g), a principal was held entitled to follow bills in the hands of his factor, though such bills were not  [*571]  shewn to be part of the proceeds of the bills remitted by him to the factor. From all which it appears that the true distinction is not whether the property in the hands of the factor is such as has been acquired by him in pursuance of his trust, but whether it can be specifically distinguished and ascertained to belong to the principal, and not to the bankrupt (a)3. Accordingly Lord Mansfield, in Miller v. Race (b)³, finds fault with the reason given for the position, that money cannot be followed, viz. because it has no ear-mark; adding, that "the true reason is on account of the currency of it, it cannot be recovered after it has passed in currency;" and Buller J. adopts the same distinction in Rex v. Egginton (cf, when he says, " that if the sum of money in question had been kept by itself, the bankrupt's assignees could not have touched it." As to the argument that where the property has been tortiously acquired by the factor the principal cannot affirm such tortious act, it is contrary to what is laid down by Willes C.J. in Scott v. Surman (d)², for according to him, " A man may in many cases either consider another as a wrongdoer or as a receiver of money to his use, as he thinks best and most for his advantage;" and therefore he supposes the case of a factor selling contrary to his authority, and says, " Even in that case the owner may come either against the vendee or the factor at his election, and may choose to confirm the sale." And upon the same principle it is that oftentimes an action for money had and received is maintained

(a)¹ Willes, 400.
(b)¹ Ante, vol. i. 517.
(a)² Willes, 402.
(b)² 1 T. E. 619.
(c)¹ Ambl. 409.
(d)¹ Cited ibid. 414.
(e) Dick. 593.
(f) Salk. 160.
(g) 5 Ves. 169.
(a)³ Per Lord Mansfield, 3 Burr. 1369.
(b)³ 1 Burr. 457.
(c)² 1 T. B. 369.
(d)² Willes, 407.

 [**725]  instead of trover; from which no inconvenience can result, so long as the owner is bound to trace and  [*572]  ascertain the property to be his, and the rights of third persons do not intervene. As to the observation made upon Gladstone v. Hadwen that there the transaction originated in fraud, whereas here was no fraud in the commencement, that can make no difference, if it appear that the property was converted by fraud; nor in this case is it to be assumed that the fraud is not indictable, because it is not indictable as a felony. But independently of any fraud, the defendant is entitled to retain if these positions be well founded: viz. that a party has a right to the produce of his money which has been misapplied by his agent, so long as such produce remains in the hands of the agent, and is capable of being ascertained; and that he has the same right against the assignees of the agent who becomes bankrupt; and consequently that if he possess himself of such produce he has a right to withhold it from the assignees (a).

Marryat, in reply, said that Whitecomb v. Jacob, as it stood upon the report, and unless it could be explained thus, that the money was vested in other goods by the factor for his employer, in which case it would come within the rule agreed to on all hands, was of doubtful authority, and had been so treated, subject only to this explanation, by several text writers, and that he had searched at the Register Office for the decree without success. And as to Ex parte Sayers, that all  [*573]  that was there done was in execution of the factor's authority; and in Lane v. Dighton there was evidence in the party's hand-writing that the trust stocks had been sold, and the money laid out from time to time in the purchase of the land, and nothing to shew that it was not in pursuance of the trust.

At the conclusion Lord Ellenborough C.J., after observing that the ease had been well argued, said that from its importance, and considering the grounds on which the argument had been founded, it was fit that the Court should look into it. That he had been unable to find any authority for the position that so long as the property is such as has been substituted by the agent in execution of his authority, the principal is entitled to it; but that the right of the principal ends whenever the deviation of the agent's authority begins. That if there had been any case which had determined that to be the dividing point, it would have been very material to have shewn it.

To which Marryat answered, that he did not put it as the point established negatively by any case, but only that none of the cases had affirmed the right of the principal farther than that point.

Cur. adv. vult.

Lord Ellenborough C.J. on this day delivered the judgment of the Court. After stating the case, his Lordship said, the plaintiff in this case is not entitled to recover if the defendant has succeeded in maintaining these propositions in point of law, viz. that the property of a principal entrusted by him to his factor  [*574]  for any special purpose belongs to the principal, notwithstanding any change which that property may have undergone in point of form, so long as such property is capable of being identified, and distinguished from all other property. And, secondly, that all property thus circumstanced is equally recoverable from the assignees of the factor, in the event of his becoming a bankrupt, as it was from the factor himself before his bankruptcy. And, indeed, upon a view of the authorities, and consideration of the arguments, it should seem that if the property in its original state and form was covered with a trust in favour of the principal, no change of that state and form can divest it of such trust, or give the factor, or those who represent him in right, any other more valid claim in respect to it, than they respectively had before such change. An abuse of trust can confer no rights on the party abusing it, nor on those who claim in privity with him. The argument which has been advanced in favour of the plaintiffs, that the property of the principal continues only so long as the authority of the principal is pursued in respect to the order and disposition of it, and that it ceases when the property is tortiously converted into another form for the use of the factor himself, is mischievous in principle, and

(a) Abbott made another point as to the time of the act of bankruptcy, in order to shew that it was previous to the conversion of the money, viz. that Walsh committed an act of bankruptcy when he left his dwelling-house at Hackney, in the morning of the 5th, with the intent stated in the ease. But he abandoned that point, feeling so strong upon the general point.

 [**726]  supported by no authorities of law. And the position which was held out in argument on the part of the plaintiffs, as being the untenable result of the arguments on the part of the defendant, is no doubt a result deducible from those arguments: but unless it be a result at variance with the law, the - plaintiffs are not on that account entitled to recover. The contention on the part of the defendant was represented by the plaintiff's counsel as pushed to what he conceived to be an  [*575]  extravagant length, in the defendant's counsel being obliged to contend, that " if A. is trusted by B. with money to purchase a horse for him, and he purchases a carriage with that money, that B. is entitled to the carriage." And, indeed, if he be not so entitled, the case on the part of the defendant appears to be hardly sustainable in argument. It makes no difference in reason or law into what other form, different from the original, the change may have been made, whether it be into that of promissory notes for the security of the money which was produced by the sale of the goods of the principal, as in Scott v. Surman, Willes, 400, or into other merchandize, as in Whitecomb v. Jacob, Salk. 160, for the product of or substitute for the original thing still follows the nature of the thing itself, as long as it can be ascertained to be such, and the right only ceases when the means of ascertainment fail, which is the case when the subject is turned into money, and mixed and confounded in a general mass of the same description. The difficulty which arises in such a case is a difficulty of fact and not of law, and the dictum that money has no ear-mark must be understood in the same way; i.e. as predicated only of an undivided and undistinguishable mass of current money. But money in a bag, or otherwise kept apart from other money, guineas, or other coin marked (if the fact were so) for the purpose of being distinguished, are so far ear-marked as to fall within the rule on this subject, which applies to every other description of personal property whilst it remains, (as the property in question did,) in the hands of the factor, or his general legal representatives. That trust property in the possession of a factor empowered to dispose of it for his principal does not pass to his  [*576]  assignees under the Stat. Jac. 1, upon his becoming a bankrupt, was established in the ease of L'Apostre v. Le Plaistrier, first tried before Lord Holt at Nisi Prius in 1708, and afterwards so adjudged upon a case made for the opinion of the Court of King's Bench. The same point was held by Lord Cowper in Copeman v. Gallant, 1 P. Wms. 320. And in Whitecomb v. Jacob, in Chancery, Triri. 9 Ann. Salk. 160, the doctrine was carried further, and to an extent which fully comprehends the present case. There, a factor entrusted with the disposal of merchandize for his principal, sold it, received the money, and, instead of paying the money to his principal, vested the produce in other goods, and died indebted in debts of a higher nature. There it was held that those goods should be taken as the merchant's estate, and not the factor's; and though that was not the case of a factor becoming a bankrupt, yet it makes no difference whether the person claiming to represent the factor was his executor or administrator, or his assignee; except only as far as the case might be affected by the Stat. Jac. 1, and which it cannot be, if the factor bankrupt had the order and disposition of the property entrusted to him in the character of factor only, and not as owner : for that point the above-cited cases of L'Apostre v. Le Plaistrier and Copeman v. Gallant, are authorities. Some doubt was attempted to be thrown upon the authority of the case of Whitecomb v. Jacob, Salk. 160, in the argument by the plaintiffs' counsel; but that case is expressly referred to by Lord C. J. Willes as an authority in law, and recognized by him as such in his judgment in Scott v. Surman before referred to. In the case of Myall v. Boll, 1 Atk. 172, Mr. Justice Burnett (who, together with Lord C. J. Lee  [*577]  and Lord C. B. Parker, assisted the Chancellor Lord Hardwicke in the judgment upon that occasion) is reported to have cited the case of Whitecomb v. Jacob as it is given us in Salk. 161, as well as that of Scott v. Surman before Lord C. J. Willes, (though he cites, or the reporter Atkins represents him as citing, the latter by the mistaken name of Salmon v. Scott). And Lord C. J. Lee recognizes the general principle that things arising from the sale of other things " follow the nature of the goods themselves," and he adds, "Mr. Justice Burnett has cited cases to shew that they are so where the thing can be discovered." The cases cited by Mr. Justice Burnett were the very cases of Whitecomb v. Jacob, (in respect to which the doubt has been suggested to us), and the case of Scott v. Surman before Lord C. J. Willes. The cases were cited by Mr. Justice Burnett, 1 Atk. 172, a.b. 1749, in these terms: "Suppose goods are consigned to a factor, who sells them and breaks, the merchant for the money must  [**727]  come in as a creditor under the commission; but if the money is laid out in other goods, these goods will not be subject to the bankruptcy, 1 Salk. 160. Suppose, instead of selling the goods for ready money, he sells for money payable at a future day, and breaks before the day, if the assignees receive the money, it will be for the use of the merchant: or suppose that the factor had taken notes for the goods, if his assignees receive the money upon these notes, it will be to the merchant's use. This was determined in C. P., Salmon v. Scott, Hil. 16 Gr. 2, 1742, 3." Lord C. J. Lee adds, "Swynburne, 506, 6th edit, is upon the same foundation. If a man devises his moveable goods to B., and his immoveable to C., upon a question how the debts shall go, he says, those  [*578]  debts which did arise by occasion of the things moveable, and for recovering whereof there lies an action personal, belong to that person to whom the testator did bequeath his moveable goods, which shews that the produce of the goods were of the same nature with the goods themselves." Lord Mansfield, in 3 Burr. 1369, in the case of a bankrupt executor, holds that the specific effects of the testator do not pass under the commission: he says, "If an executor becomes bankrupt, the commissioners cannot seize the specific effects of the testator, not even in money, which specifically can be distinguished and ascertained to belong to such testator, and not to the bankrupt himself." Specific remittances, as in Ex parte Chion, 3 P. Wms. 187, and in Hassall v. Smithers, 12 Ves. 119, are governed by the same principle. The representatives, whether deriving their title to the property through the death, or by the bankruptcy of the person possessed of it, can be in no better plight than the person whom they represent would have been, and hold it, if it comes to their hands, in trust for and applicable to the same purposes as he held it, and not as part of the proper estate of the deceased or bankrupt person. As to the following money into land, the Court of Chancery has (as said by Lord Hardwicke in the case cited of Lane v. Dighton and Others, Amb. 409,) been very cautious of doing it, but has done it in some cases. No one, says Lord Hardwicke, will say but the Court would do it, if it was actually proved that the money was laid out in land. The doubt with the Court in those cases (he says) has been as to the proof. There is difficulty in admitting proof; parol proof might let in perjury ; but it has always been done, (he says) when the fact has  [*579]  been admitted in the answer of the person laying it out." There is, therefore, according to Lord Hardwicke, who had on that occasion the principal authorities on the subject brought in review before him, no difficulty but in respect of the proof; which difficulty, particularly as arising from the Statute of Frauds and Perjuries, seems to have weighed with Lord Sommers and the Master of the Rolls and Mr. J. Powell against charging the land in the case of Kirk v. Webb, Prec. in Chan. 84. No difficulty, however, of that kind in respect to proof, nor any peculiar rules or habits of Courts of Equity in respect to the charging of land, stand between the original proprietor and his rights in respect to the ascertained produce of his own funds upon this occasion. He has repossessed himself of that, of which, according to the principles established in the cases I have cited, he never ceased to be the lawful proprietor; and having so done we are of opinion, that the assignees cannot in this action recover that which, if an action were brought against them the assignees by the defendant, they could not have effectually retained against him, inasmuch as it was trust property of the defendant, which, as such, did not pass to them under the commission. If this case had rested on the part of the defendant on any supposed adoption and ratification on his part of the act of converting the produce of the draft or bank-notes of the defendant into these American certificates, we think, it could not have been well supported on that ground, inasmuch as the defendant, by taking a security by bond and judgment to indemnify himself against the pecuniary loss he had sustained by that very act, must be understood to have disapproved and disallowed that act instead of adopting and  [*580]  confirming it; but upon the other grounds above stated, we are of opinion that the defendant is entitled to retain the subjects of the present suit, and of course that a nonsuit must be entered.