The Northern Daily Times.
Liverpool, Merseyside, England, 1857-03-09 00:00:00

BANKRUPTCY COURT.

BE FORE MR. COMMISSIONER STEVENSON.
Re HP.LSBY, ex parte FAIRHURST. —Oa Saturday,
judgment in proof of the above case was given, and as it
invo'ved a question of considerable importance, we give it in
its entirety :—His Honour said : In this care a proof is pro-
posed to be made in behalf of a Mr. Fairhurst, as one of
the executors of the will of the late Thomas Walker.
against the joint estate of these bankrupts, for the sum of £6OB
9s 50, being a portion of the balance of monies received by
Robert Helsby, one of the bankrupts, and who was the other
executor of this will, and applied by him for the purposes of
his Inisiness, and which monies formed past of the
testator's estate. The assignees object to this proof,
alleging it to be a claim sustainable only against the
separate estate of Robert Helsby. The circumstances
under which this proof is claimed to be made against this
joint estate are these : Previously to the year 1852, and up to
the month of December, 1854, the bankrupt, Robert Helsby,
was in partnership with his brother William, in the business
of builders This partnership was dissolved in December,
1854, and the same business was continued slfil carried on in
partnership between the present bankrupts, Rohert and Joseph
Efslshy. The testator, Thomas Walker (of whose will
Robert Helsby, and the claimant, Mr. Fairhurst, were
appointed executors) die! in May, 1849. This will was
proved by both executors, but Robert Helsby took the active
part in such executorship, and from the year 1852, to the
month of December, 1854, he from time to time received
various sums of money on account of the testator's estate,
and applied them for the purposes Of his then partnership busi-
ness, and an account was entered in the partnership hooks of
such monies, which wore then credited to the estate of the
testa tor. 0 s the dis =elution of the partnership
.between
Robert and William Helsby, a balance sheet was made out,
in which it was shown that there was a large balance then due
from the partnership to the estate of the testator. On the
arrangement for the new partnership between the present
bankrupts, it was agreed that Joseph Helsby should take an
equal share in the business, and share also equally in the then
stock in trade and, book debts, and bear an equal share
in all liabilities of the former partnership. The hooks of the
former partnership were continued to be used by the new firm,
and Robert Helsby continued to receive monies on account of
the testator's estate, which were also applied for the purposes of
such new partnership business, and the account of such monies
were entered in like manner as before and credited to the
estate of the testator. Several payments have been made since
the commencement of this new partnership on account of the
testator's estate out of the assets of this partnership, and far
exceed the amounts which have been received from such
estate since such partnership commenced ; and the sum
of £6OB 93 51, now alleged to be proveable on the joint estate
of these bankrupts, together with another sum which is not
claimed to be so proveable, now form the balance due to the
testator's estate in respect to monies thus received on account
of such estate. It appears that Joseph Helsby was emplcyed
so far back as 1850 on account of the partnership business of
Robert and William Helsby, and in the exercise of his duties
as such cleric, he occasionally made entries in the cash book,
and there are a few entries therein in his handwriting, of
cash received on account of the testator's estate in the
months of August and September, 1851, but which were
made by him under the direction of Robert Helsby. The
balance sheet made on the dissolution of the partnership,
between Robert and William Helsby, in which the balance
due to the testator's estate was mentioned, was (as it is stated
by Rehr rt Ilelshy) Aso seen and examined by Joseph Helsby,
and the new partnership hooks were from time to time inspected
by him. Joseph Helsby had nothing to do with the executor.
ship, and no Communication was ever made respecting
this joint account entered in the partnership hooks
en her to the other executor, Mr. Fairlitost, or to
any of the persons interested under the will. Under
these circumstances it is contended on behalf of Mr.
Fairhurst that inasmuch as the application of the monies
belonging to the testator's estate in the bus.ness of the former
parnership was a breach of trust, of which Mr. Joseph Helsby
had notice at the time of his entering into parnership with
Robert aelsby, and as he, with such notice, took an equal
share with Robert 11cl:thy of all the then assets of the former
parnership as well as an equal share of all its liabilities, that he
consequently became liable together with Robert Helsby, to
the balance then due to the testator's estate, and therefore, Is
now jointly liable to the reduced balance remaining
due. Now that the application of the trust monies in the
former paionership business was a breach of trust there is no
doubt, and in respect of which, very probably, William as well
as Robert Helsby Would be held liable to the testator's estate ;
there having been due notice given of such misapplication by
means of the entries in the partnership hooks ; and Josephs
Helsby, from the knowledge which he acquired of the
liabilities of the former partnership, by means of the balance
sheet made on its dissolution, as well as of the entries in
the partnership books alter the commencement of the
new partnership, must also, I think, ho deemed to have had
notice of this misapplication. And as to the monies which
had peen received sine the new partnership, he, Joseph Helsby,
would no doubt have been j tingly liable with Robert Helsby,
had not that liability been discharged by the payments made
since out of the assets of such new partnership. But with
regard to the sum proposed tole? now proved as constituting
past of the balance remaining of the liability of the former
partnership, there does not appear to me any ground upon
which that can be sustained as a proof against the joint
estate of these bankrupts. It is true that Joseph Helsby took
a share in the assets of the former partnership, sal jset to
this debt due to the testator's estate, as part of the liabilities
of the former partnership; but he did not (as it is admitted)
thereby became personally liable at law for such debt. But it
is contended that, by taking a share in these assets with the
knowledge of this breach of ti us', and which assets, it is
argued, must be considered to have proceeded from, or to
consist of, the monies received from the testator's estate,
Mr. Joseph Ilelshy must be held liable in equity to this debt
jointly with Robert Helsby. But to support this argument, it
should, at all events, be shown that there were, at least at
the time of the dissoldtion of the partnership, some surplus
assets of such partnership after deduction being made for
sjeatn er
ofy texceeding
that
resultingathe
jont the a all the liabilities of the partnership, exclusive of this trust debt.
liability
And, upon enquiry, it appears that there were no such surplus
assets, the debts of such partnership, exclusive of this trust
debt, f
sse assets. But
thecaßu t l
bankrupts,do not think
or
r rather
ra to
the
question
na
of
ttheir present joint estate, depends upon this result, for I think
it cleari a
generalin producing
sppl icatir asucohf such
jjointetsrtnastte, miosnnieest„
u
sufiicient to attach 6, claim upon sttch estate in respect to this
breach of trust. Upon these grounds, therefore, f consider
that this proof cannot be allowed, as proposed, against the joint
estate of these bankrupts.