[IN THE COURT OF APPEAL.]

BANQUE BELGE POUR L'ETRANGER v. HAMBROUCK AND OTHERS.

[1919. B. 2351.]

Money had and received - Cheque obtained by Fraud - Transfer Without Consideration - Currency - Title of Transferee - Banker and Customer - Right to follow Proceeds of Fraud.

If cheques be obtained by fraud and then transferred by the fraudulent holder to a transferee without consideration, the transferee acquires no better title to hold them than the fraudulent holder had.

If the fraudulent holder or his voluntary transferee pays the cheques into a banking account, quaere whether the true owner, having a right in equity to follow the proceeds or so much thereof as remains to the credit of the account, can recover the same amount by an action at law against the bankers or their customer for money had and received.

A clerk obtained by fraud from his employer a number of cheques purporting to be drawn by the employer upon the plaintiff bank. The clerk paid these cheques into an account with his bankers, who collected the amounts from the plaintiff bank and credited the clerk's account therewith. Against the amount so credited the clerk drew cheques and handed them without consideration, or for an illegal consideration, to a woman with whom he was living. She paid these cheques into her account at her bankers, and there stood to her credit a sum of 315l., proceeds of the clerk's frauds.

The plaintiff bank brought an action against the woman and her bankers for a declaration that the 315l. was their property, and for an order that it should be paid out to them. The defendant bankers having paid the money into Court and been dismissed from the action:-

Held, that the plaintiffs were entitled to the declaration and order claimed against the female defendant.

Miller v. Race (1758) 1 Burr. 452; Taylor v. Plumer (1815) 3 M. & S. 562; and In re Hallett's Estate (1880) 13 Ch. D. 696 considered and discussed.

Judgment of Salter J. affirmed.

APPEAL from the judgment of Salter J. in an action tried before the learned judge without a jury.

The facts are stated in detail in the written judgment of Atkin L.J. The following summary is added to indicate the points raised in this appeal.

The Banque Belge pour l'Etranger brought an action against one Gustave Hambrouck, a Mlle. Spanoghe, and the

London Joint City and Midland Bank, and claimed a declaration that a sum of 315l. standing to the credit of Mlle. Spanoghe at the Twickenham Branch of the London Joint City and Midland Bank was the property of the plaintiffs, and an order that it should be paid out to them. The defendant Bank paid the money into Court. As against them the action was stayed, but it proceeded against the defendants Hambrouck and Mlle. Spanoghe.

A M. Charles Pelabon was the proprietor of certain engineering works near Richmond known as the Pelabon Works. He was a customer of the plaintiff bank. The defendant, Hambrouck, was the chief assistant accountant at the works. By fraud he possessed himself of crossed cheques to the amount of about 6000l., payable to himself, and drawn, or purporting to be drawn, by M. Pelabon. These cheques Hambrouck paid into Farrow's Bank at Richmond where he had an account, and Farrow's Bank obtained payment of them from the plaintiff bank.

Hambrouck lived with the defendant, Mlle. Spanoghe. He drew cheques upon his account at Farrow's Bank and handed them to Mlle. Spanoghe, who paid them into her account at the Twickenham Branch of the London Joint City and Midland Bank. At the time when Hambrouck's frauds were discovered there was standing to the credit of this account a sum of 315l., part of the proceeds of those frauds. For this money Mlle. Spanoghe had given no consideration except the continued cohabitation with Hambrouck as his mistress. The plaintiffs claimed to recover 315l. as aforesaid.

Salter J. gave judgment for the plaintiffs.

Mlle. Spanoghe appealed.

Langdon K.C. and Walter Warren for the appellant. The judgment of Salter J. was wrong. The London Joint City and Midland Bank acquired a good title to this 315l. Assuming that this money could be followed in the hands of the appellant, yet when she paid it into the bank the right to follow it was gone. "There is no doubt," said Lord

Abinger C.B. in Calland v. Loyd (1), "that if I pay money to A., who pays it to his banker to his own account, without notice, I cannot recover it from the banker." The reason is that it then ceases to be the money of the customer and becomes the money of the bankers. The relation of debtor and creditor between the bankers and their customer supersedes the right in rem of the original owner - namely, the right to follow the money: see per Lord Haldane L.C. Sinclair v. Brougham. (2)

Secondly, cheques are currency. When Hambrouck handed his cheques to the appellant, who took without notice of any defect in his title, he conferred a valid title upon her as against all the world: Miller v. Race. (3) Delivery of a chattel with intention to pass the property therein to the transferee gives him a good title as against all but the true owner. Delivery of money or currency gives a title which is valid even as against the true owner, notwithstanding that the transferee is a volunteer and the transaction a gift.

[Clarke v. Shee (4); Hudson v. Robinson (5); Chambers v. Miller (6), and Moss v. Hancock (7) were cited.]

Thirdly, the respondents are not the proper persons to sue. The person really damnified is M. Pelabon. Having parted with the money on his mandate they are not responsible to him.

Barrington-Ward K.C. and Pritt for the respondents. As to the third point, a bailee if wrongfully deprived of the goods bailed can recover them even though in the circumstances the loss of possession does not render him liable over to his bailor. The same principle applies to bankers. Either the money was theirs or they held it as agents for M. Pelabon. In either case they can sue to recover it.

As to the first point, the question is what is meant by Lord Mansfield's phrase when he said in Miller v. Race (8) that money cannot be recovered after it has "passed in currency."

(1) (1840) 6 M. & W. 26, 31.

(2) [1914] A. C. 398, 419.

(3) 1 Burr. 452.

(4) (1774) 1 Cowp. 197.

(5) (1816) 4 M. & S. 475.

(6) (1862) 13 C. B. (N. S.) 125.

(7) [1899] 2 Q. B. 111.

(8) 1 Burr. 452, 458.

Lord Mansfield certainly did not mean that if A. tortiously obtains possession of a bank note for 500l. and hands it as a gift to B. who opens an account with it, the true owner cannot recover so much of that 500l. as can be proved to be remaining to the credit of B. He said: "An action may lie against the finder, it is true .... but not after it has been paid away in currency." That must mean that if money, notes, or cheques be transferred without consideration the transferee gets no better title than the transferor had. It is otherwise if they are transferred for valuable consideration and bona fide. That this is Lord Mansfield's meaning is clear from his reliance on the finding that the plaintiff in Miller v. Race (1) took the note "for a full and valuable consideration"; from his frequent reference to money that has "passed in currency," money taken "in the course of currency," and money taken "in the usual course of business" - phrases which he uses as equivalent to money passing for valuable consideration; and from the fact that the subject matter with which he was dealing was a bank note for which the plaintiff had given a full and valuable consideration.

That being so the appellant's case fails. There is no difficulty in following the cheques into the appellant's account with the London Joint City and Midland Bank. In point of fact it is clear that the 315l. is part of the proceeds of Hambrouck's fraud, and in point of law the money may be followed, notwithstanding that it has found its way into a banking account: In re Hallett's Estate (2); Sinclair v. Brougham. (3)

Langdon K.C. in reply.

Nov. 5. The following written judgments were delivered:-

BANKES L.J. In this action the plaintiffs by their statement of claim asked for an order that the sum of 315l. paid into Court by the London Joint City and Midland Bank should be paid out to them.

(1) 1 Burr. 452.

(2) 13 Ch. D. 696.

(3) [1914] A. C. 398.

The material facts relating to this sum of money are as follows: A M. Pelabon banked with the plaintiff Bank. The defendant Hambrouck was in M. Pelabon's employ. Hambrouck possessed himself of a number of crossed cheques drawn in his favour and purporting to be drawn by M. Pelabon's authority. These cheques Hambrouck paid into Messrs. Farrow's Bank, who collected the cheques and credited Hambrouck with the amounts. Hambrouck drew out these amounts and paid some of the money to the appellant, who in turn paid some portion of what she so received into her account at the London Joint City and Midland Bank. At the time when Hambrouck's frauds were discovered the appellant had 315l. standing to her credit in this account.

The action was brought against the London Joint City and Midland Bank as well as against Hambrouck and the appellant, but by an order made in the action proceedings were stayed against the Bank on their paying the 315l. into Court. No evidence was given in the Court below as to the exact means by which Hambrouck defrauded M. Pelabon. The statement of claim alleges that he obtained payment of the cheques by fraudulently representing that they were drawn by M. Pelabon's authority. For the purposes of my judgment I will assume that Hambrouck obtained a voidable title to the proceeds of the cheques. Whatever the position of the plaintiff Bank may have been in relation to their customer, M. Pelabon, in the event of the Bank being unable to recover the moneys which they had paid out when the cheques were presented to them for payment, it is I think clear that the moneys which were so paid out were the moneys of the plaintiff Bank which they were entitled to recover if they could. This conclusion disposes of the point raised by Mr. Warren that the action would not lie, because the Bank were, at the time of the trial, claiming that as between themselves and M. Pelabon the loss must fall upon him.

Had the claim been for the recovery of a chattel sold instead of for a sum of money alleged to be given, the appellant's counsel do not dispute that, in order to retain the chattel, the appellant must establish that she gave value for

it without notice that it had been obtained by the vendor by fraud; but they attempt to distinguish the present case from the case of the sale of a chattel by saying: (a) that the appellant, who had no notice of Hambrouck's fraud, obtained a good title to the money, because it was a gift to her from Hambrouck; (b) that the rule applicable to a chattel has no application to currency; (c) that the fact that the appellant had paid the money into her banking account prevented any following of the money by the plaintiff Bank, and that an action for money had and received would therefore not lie.

In my opinion the first contention cannot be supported either upon the facts or in law. The facts show that the payments made by Hambrouck to the appellant were made without valuable consideration, and for an immoral consideration. Even if they could be appropriately described as gifts, a gift without valuable consideration would not give the appellant any title as against the plaintiff Bank.

The second contention also cannot be supported in law. It rests upon a misconception as to the meaning which has been attached to the expression "currency" in some of the decisions which have been referred to. In Miller v. Race (1) Lord Mansfield in dealing with the question whether money has an earmark says: "The true reason is upon account of the currency of it; it cannot be recovered after it has passed in currency." The learned judge is there using the expression in the same sense as that in which Channell J. uses it in Moss v. Handcock (2) where he says: "If the coin had been dealt with and transferred as current coin of the realm, as, for instance, in payment for goods purchased or in satisfaction of a debt, or bona fide changed as money for money of a different denomination." Where the word "currency" is used merely as the equivalent of coin of the realm, then for present purposes the difference between currency and a chattel personal is one of fact and not of law. This was the view of Lord Ellenborough in Taylor v. Plumer (3), in the passage in which he deals with the difficulty of tracing money

(1) 1 Burr. 452, 457; 1 Sm. L. C., 12th ed., p. 525.

(2) [1899] 2 Q. B. 111, 118.

(3) 3 M. & S. 562, 575.

which has become part of an undivided and undistinguishable mass of current money, and which in this respect differs from marked coins or money in a bag. With regard to the latter he says that the rule for the purpose we are considering in this appeal is the same as that which applies to every other description of personal property. Dealing with this point in Sinclair v. Brougham (1) Lord Haldane says: "The common law, which we are now considering, did not take cognizance of such duties. It looked simply to the question whether the property had passed, and if it had not, for instance, where no relationship of debtor and creditor had intervened, the money could be followed, notwithstanding its normal character as currency, provided it could be earmarked or traced into assets acquired with it." To accept either of the two contentions with which I have been so far dealing would be to assent to the proposition that a thief who has stolen money, and who from fear of detection hands that money to a beggar whom he happens to pass, gives a title to the money to the beggar as against the true owner - a proposition which is obviously impossible of acceptance.

The last contention for the appellant cannot in my opinion be supported. The law on the subject has been so fully discussed recently in Sinclair v. Brougham (2) that I need only point out that the law as laid down by Lord Ellenborough in Taylor v. Plumer (3) as to the right of an owner to recover property in the common law Courts from a person who can show no title to it, where the property was capable of being traced, whether in its original form or in some substituted form, was fully accepted, and it was explained that the rule in equity which was applied in Hallett's Case (4) was only introduced to meet cases where the money sought to be traced could no longer be identified owing to its having become merged in the Bank's assets, and the relationship of debtor and creditor, between the customer who had paid the money into the Bank and the Bank into which the money had been paid, having intervened.

(1) [1914] A. C. 398, 420.

(2) [1914] A. C. 398.

(3) 3 M. & S. 562.

(4) 13 Ch. D. 696.

The facts in the present case in my opinion remove any difficulty in the way of the plaintiff Bank recovering, without having recourse to the equity rule. The money which the Bank seeks to recover is capable of being traced, as the appellant never paid any money into the Bank except money which was part of the proceeds of Hambrouck's frauds, and the appellant's Bank have paid all the money standing to the appellant's credit into Court, where it now is. Even if it had been necessary to apply the rule in Hallett's Case (1) to enable the plaintiff Bank to establish their right to the money they claim, I see no difficulty in applying the rule to the facts as found by the learned judge in the Court below.

In my opinion the appeal fails and must be dismissed with costs.

SCRUTTON L.J. One Hambrouck was a clerk in the Pelabon Works, the owner of which banked with the Banque Belge. By forgery or fraud Hambrouck obtained from the Bank over 6000l. by means of cheques on his employers' account. He was living with a Belgian woman called Spanoghe, and from time to time paid to her money which she paid into a deposit account at her bank. Shortly after the fraud was discovered she had 315l. in that account. The Banque Belge sued her to recover that money; the judge below gave the Bank judgment for that amount, and she appeals against the judgment.

The ground of the decision below is that the 315l. is traced to the money which Hambrouck obtained by fraud from the Bank; that this money was never Hambrouck's property, and as Mlle. Spanoghe gave no legal consideration for its transfer to her, but only the immoral consideration of past or future cohabitation, she cannot acquire a title to the money as a purchaser for value without notice of any defect in the transferor's title.

The first objection taken is that the Bank are not the proper plaintiffs, as Pelabon is not now objecting to the Bank's debiting his account with the cheques. It is clear,

(1) 13 Ch. D. 696.

however, that the money actually obtained by Hambrouck was the Bank's money, even if they might debit their payments to the account of another, and the Bank therefore can sue for the money if it was obtained by fraud on them. Secondly, it was said that as Hambrouck paid the stolen money into a bank, he had only a creditor's right to be paid with any money, not the particular money he paid in; so that when he drew some money out of the bank and paid it to Mlle. Spanoghe, he did not make her the recipient of the money he had obtained from the Banque Belge, and therefore an action for money had and received would not lie. It was further said that Mlle. Spanoghe received the money as a gift without notice of any defect in title and that therefore no action would lie against her.

This last objection is, I think, bad. At common law, a man who had no title himself could give no title to another. Nemo potest dare quod non habet. To this there was an exception in the case of negotiable chattels or securities, the first of which to be recognized were money and bank notes: Miller v. Race (1); and if these were received in good faith and for valuable consideration, the transferee got property though the transferor had none. But both good faith and valuable consideration were necessary, as Lord Mansfield says (2): "in case of money stolen, the true owner cannot recover it after it has been paid away fairly and honestly upon a valuable and bona fide consideration"; but before money has passed in currency an action may be brought for the money itself. In the present case, it is clear that this money came to Mlle. Spanoghe either as savings out of housekeeping allowance, or as a gift to a mistress for past or future cohabitation. In the first case she would hold it as agent for Hambrouck; in the second for no consideration that the law recognized. If then the money that came to her was the money of the Banque Belge, she got no title to it, as Hambrouck against the Banque Belge had no title. The defence is that it was not the money of the Banque Belge, for payment

(1) 1 Burr. 452; 1 Sm. L. C., 12th ed., p. 525.

(2) 1 Burr. 457.

into Hambrouck's bank, and his drawing out other money in satisfaction, had changed its identity.

I am inclined to think that at common law this would be a good answer to a claim for money had and received, at any rate if the money was mixed in Hambrouck's bank with other money. But it is clear that the equitable extension of the doctrine as based on In re Hallett's Estate (1) and explained in Sinclair v. Brougham (2) enables money though changed in character to be recovered, if it can be traced. As Lord Parker says in the latter case (3) on equitable principles, the original owner would be entitled "to follow the money as long as it or any property acquired by its means could be identified." In that case there was an equitable charge on the substituted fund or property, if it could be traced to the stolen money. As Bramwell J.A. puts it in Ex parte Cooke (4): "A difficulty in tracing money often arises from the circumstance that payments now are not usually made in gold, but by cheques which go into a banking account, so that the sum is mixed up with the other moneys of the customer. But if this payment were made by a bag of gold which the broker put into his strong box, and then misapplied part of the money, leaving the rest in the bag, there would be no doubt that what was so left could be claimed as the money of the client. The use of cheques may make difficulties in tracing money, but that, so far as it can be traced, it may be claimed as the property of the client, appears to me to be covered both by the reason of the thing and by the authority of Taylor v. Plumer." (5) If that is the test to apply it is clear that the 315l. in Mlle. Spanoghe's account and now in Court, can all clearly be traced to the money obtained by Hambrouck by fraud or forgery from the Bank, and as she gave for it no valuable consideration, she cannot set up a title derived from Hambrouck, who had no title against the true owner.

For these reasons, in my opinion the appeal fails, and should be dismissed with costs.

(1) 13 Ch. D. 696.

(2) [1914] A. C. 398.

(3) [1914] A. C. 447.

(4) (1876) 4 Ch. D. 123, 128.

(5) 3 M. & S. 562.

ATKIN L.J. The facts in this case appear to be as follows. A M. Pelabon, trading as the Pelabon Works, in 1917 and onwards employed as a clerk in the cashier's department a man named Hambrouck. During his employment between June 5, 1917, and August 31, 1919, Hambrouck obtained from the plaintiff Bank, the bankers of the Pelabon Works, the sum of 6680l. 13s. 6d. by means of cheques purporting to be drawn per pro. the Pelabon Works, but in fact without the authority of that firm. The cheques material to this action were drawn in favour of Hambrouck himself to his order, and as Hambrouck used the firm's form of cheque which had a printed crossing on them, the cheques were crossed. They therefore had to pass through a bank. Hambrouck accordingly opened an account with Farrow's Bank, Richmond Branch, and having inclosed the cheques paid them into his account. Farrow's Bank cleared through the then London and South Western Bank now merged in Barclays Bank, through whom the amount of these cheques was collected from the plaintiff Bank and the proceeds were placed to Hambrouck's credit. In substance no other funds were paid into the account than the proceeds of these forged cheques. I call them forged because Hambrouck being indicted for forging them pleaded guilty and has been sentenced for forgery. As between M. Pelabon and the plaintiff Bank there has been a dispute whether Hambrouck had ostensible authority, which has been resolved since action brought by M. Pelabon withdrawing his claim as against the Bank. This seems to me not to affect the right of the parties, as will hereafter appear. Hambrouck during this time was living with the defendant Spanoghe as his mistress. He made her a monthly allowance for housekeeping, and in addition gave her sums of money. In particular the defendant during the time she lived with Hambrouck received from him in notes at various dates the sum of 465l. It seems immaterial whether part of that sum was or was not her savings from the house-keeping money. If it were, presumably Hambrouck acquiesced in her keeping it, and the learned judge has found, and it is impossible to dispute his finding, that all these sums

were given to the defendant as the consideration for the continuance of illicit cohabitation. The sums in question all came from Hambrouck's banking account; they were paid by the defendant into a deposit account which she opened at the Twickenham Branch of the defendant Bank, the London Joint City and Midland Bank. No other sums were at any time placed to that deposit account. 150l. was drawn out by the defendant for the purpose of Hambrouck's defence. The balance, 315l., is the subject of the present action. It is claimed by the plaintiffs; the defendant Bank under an order of the Court dated October 7, 1919, have paid the amount into Court; and the action has been discontinued against them, and proceeded against the other defendants.

The money was obtained from the plaintiff Bank by the fraud of Hambrouck. It does not appear to be necessary for this case to determine whether Hambrouck stole the money or obtained it by false pretences. At present it appears to me that the plaintiff Bank intended to pass the property in and the possession of the cash which under the operations of the clearing house they must be taken to have paid to the collecting bank. I will assume therefore that this is a case not of a void but of a voidable transaction by which Hambrouck obtained a title to the money until the plaintiffs elected to avoid his title, which they did when they made their claim in this action. The title would then revest in the plaintiffs subject to any title acquired in the meantime by any transferee for value without notice of the fraud.

The appellant however contends that the plaintiffs cannot assert their title to the sum of money which was on a deposit account: 1. because it has passed through one if not two bank accounts and therefore cannot be identified as the plaintiffs' money; 2. because in any case a transfer to an innocent donee defeats the original owner's claim. The course of the proceedings in this case is not quite clear. The statement of claim alleges specifically that the money is the property of the plaintiffs which they are entitled to follow, and the relief asked is not for a money judgment against the defendants, but an order that the sum paid into Court, by the

defendant Bank should be paid out to the plaintiffs. In giving judgment however, the learned judge has treated the claim as one for money had and received, and the judgment entered is an ordinary judgment against the appellant on a money claim for 315l. together with an order that the sum in Court should be paid out to the plaintiffs in part satisfaction. The two forms of relief are different, and though in this case there is no substantial difference in the result, the grounds upon which relief is based might have been material.

First, does it make any difference to the plaintiffs' rights that their money was paid into Farrow's Bank, and that the money representing it drawn out by Hambrouck was paid to the defendant Bank on deposit? If the question be the right of the plaintiffs in equity to follow their property, I apprehend that no difficulty arises. The case of In re Hallett's Estate (1) makes it plain that the Court will investigate a banking account into which another person's money has been wrongfully paid, and will impute all drawings out of the account in the first instance to the wrongdoer's own moneys, leaving the plaintiff's money intact so far as it remains in the account at all. There can be no difficulty in this case in following every change of form of the money in question, whether in the hands of Hambrouck or of the appellant, and it appears to me that the plaintiffs were, on the grounds alleged in the statement of claim, entitled to a specific order for the return of the money in question, and, as it is now represented by the sum in Court, to payment out of Court of that sum.

The question whether they are entitled to a common law judgment for money had and received may involve other considerations. I am not without further consideration prepared to say that every person who can in equity establish a right to have his money or the proceeds of his property restored to him, can, as an alternative, bring an action against the person who has been in possession of such money or proceeds for money had and received; still less that he can always bring trover or detinue. But the common law rights

(1) 13 Ch. D. 696.

are large and are admirably stated in Taylor v. Plumer (1), which was a case stated for the opinion of the Court of King's Bench after trial before Lord Ellenborough at the London Sittings. The facts are significant. Sir Thomas Plumer wishing to invest in exchequer bills gave his broker, Walsh, a draft on his bankers for 22,200l. to be invested accordingly. Walsh cashed the draft, receiving bank notes. He bought 6500l. exchequer bills. With the balance he bought certain American securities, paying for them with the actual notes received from the bank. But he gave one of the notes to his brother-in-law, from whom he received a draft on the brother-in-law's bankers for 500l. With this draft he bought bullion - namely 71½ doubloons - intending to abscond to North America via Lisbon. Sir Thomas Plumer's attorney overtook Walsh at Falmouth, and secured from him a return of the American securities and the bullion. Walsh, who was afterwards indicted, tried, found guilty subject to the opinion of the judges and pardoned without judgment having been passed, was made bankrupt on an act of bankruptcy alleged to have been committed before he returned the property. His assignees in bankruptcy brought trover against Sir Thomas Plumer. It was held by Lord Ellenborough delivering the judgment of the Court that the defendant was entitled to succeed, for he had repossessed himself of that of which he never ceased to be the lawful proprietor. "The plaintiff," he says, ".... is not entitled to recover if the defendant has succeed in maintaining these propositions in point of law - viz., that the property of a principal entrusted by him to his factor 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. .... 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 (2),

(1) 3 M. & S. 562, 574.

(2) (1743) Willes, 400.

or into other merchandise, as in Whitecomb v. Jacob (1), 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." I notice that in Sinclair v. Brougham (2) Lord Haldane L.C. in dealing with this decision says: "Lord Ellenborough laid down, as a limit to this proposition, that if the money had become incapable of being traced, as, for instance, when it had been paid into the broker's general account with his banker, the principal had no remedy excepting to prove as a creditor for money had and received," and proceeds to say "you can, even at law, follow, but only so long as the relation of debtor and creditor has not superseded the right in rem." The words above "as for instance" et seq. do not represent and doubtless do not purport to represent Lord Ellenborough's actual words; and I venture to doubt whether the common law ever so restricted the right as to hold that the money became incapable of being traced, merely because paid into the broker's general account with his banker. The question always was, Had the means of ascertainment failed? But if in 1815 the common law halted outside the bankers' door, by 1879 equity had had the courage to lift the latch, walk in and examine the books: In re Hallett's Estate. (3) I see no reason why the means of ascertainment so provided should not now be available both for common law and equity proceedings. If, following the principles laid down in In re Hallett's Estate (3), it can be ascertained either that the money in the bank, or the commodity which it has bought, is "the product of, or substitute for, the original thing," then it still follows "the nature of the thing itself." On these principles it would follow that as the money paid into the bank can be identified as the product of the original money, the plaintiffs have the common law right to claim it, and can sue for money had and

(1) (1711) 1 Salk. 160.

(2) [1914] A. C. 398, 419.

(3) 13 Ch. D. 696.

received. In the present case less difficulty than usual is experienced in tracing the descent of the money, for substantially no other money has ever been mixed with the proceeds of the fraud. Under the order of the Court in this case I think the money paid into Court must be treated as paid in on behalf of the defendant Spanoghe, and the money judgment, together with the order for payment out to the plaintiffs, effectually secures their rights.

Secondly, so far as it is contended that the bankers are entitled to retain possession where they have not given value, I think that has been concluded by what I have already said as to valuable consideration.

I agree that the appeal should be dismissed.

Solicitors for appellant: Appleton & Co.

Solicitors for respondent: Michael Abrahams, Sons & Co.

W. H. G.