son Elem‘ l .Tasty “i “" i CUll‘ Brownies Court Justice handed down on March 10th Stanley wedlock Limited, s Bank- rupt: And in the matter of the applica- tion of the Eastern Trust Company, Authorised Trustee, ‘i charge from the performance of any further duties and obligations in re- spect to the said Estate. March 16. 1986. Mathleson, C.J.—This application was first heard before Ine on the 24th day of" January, 1925, when it was opposed by Mr. C. G. Duffy. K.C., acting for the Royal Bank of Canada. The matters considered and disposed of on that hearing are set out iu my interim decisioniiled 8t}; )Aprii, 1925 (reported 5 C.'B.R. (l6 . ' 0n the 11th day of May. 1925. whilst the application was still pending, The Royal Bank of Cana- da notified the Trustee that on the further hearing hereof it would move that the Bank of Nova Scotia be ordered to pay to the trustee herein for distribution amongst the creditors of the bankrupt such mo- noys as the last named Bank had obtained from the sale of automo- biles in the , ssession of the bank- rupt at. the time of its bankruptcy and which were taken by the Bank 0|‘ Nova Scotia under alleged ware- house receipts. On the suggestion of the court and at the instance oi the Trustee a case was stated by the said Banks for the decision of this Court upon the questions raised by the said notice. The casq was accordingly stated and came on to be argued by Coun- sel the 26th day of January last, when it was agreed that Counsel for the said Banks should submit writ- ten arguments only, which has ac- cordingly -been done. The roveiant facts agreed upon are; The wedlock Company was incor- llflfflied by Letters Patent oi‘ this Province, May, 1921. ‘ A petition in ‘Bankruptcy was tiled nntl u Receiver appointed 27th July, 1023, and the Company adjudged bankrupt 8th August, 1923. One of the principal activities oi‘ the Company was dealIn-g in auto- mobiles. it had the agency for and sold hichanghliu motor curs in this Province. The Bunk of Nova Scotia, herein- after referred to as "The Bank" wus the Ibanker of the Company from the time it commenced busi- ness until the bankruptcy oi the Company. On or about the 22nd day oi De- cember, A.D. 1922. Mr. C. wJ-lynd- man, the Secretary-Treasurer of1he wedlock Company and a sharehold- er therein procured from the Com- pauy a lease of part oi the premises occupied -by the Company as fol- lows:-— "in consideration of the sum oi one ($1.00) dollar, receipt whereof is hereby ocknowlefied, we hereby agree to lease to C. West Hyndmsn and be agrees to lease from us, ior the term oi (1) year from December twenty-second, nineteen hundred twenty-two, that part of the lower floor of our premises situate ou~Up- I ll i - made of perfect . ; whole, grams of whea 6 . Q Q g Delicious with butter. l - cheese or marmalades 1 Soap Purity Mean to You . O millions of women the $5,000 Guarantee of Purity carried by every bar of Sun’ light Soap means:- , Cleaner clothes Sweet-smelling clothes New-looking clothes Stmlight Soap prolongs the life of ' ' fabrics. Sunlight So ‘ The Largest Selling laundry Soap in the world B h' d th Cl ds Sung by Gene Austin v No. 1996s ALWAYS Fox Trot international Novelty Orchestra 19970 Votul l-lenry Burr (Tenor) 19959 JUST AROUND THE CORNER Fox Trot Art. Landry and ills Orchestra 19930 Vocal The Revelers 19908 DINAH Fox Trot Jenn (ioldkette and ills Orchestra 19947 Vocal The Revelers 19796 THEN l’LL BE HAPPY Fox Trot Russo 8t Fiorlto‘s Oriole Orchestra 19917 Vocal Jack Smith (The Whispering Baritone) 19856 SONG OF THE VAGABONDS Fox Trot international Novelty Orchestra 19901 Vocal Dennis King and Victor Light Opera Co. 19897 Y“ ., IO-imdouble-slded ® records, 75C. l ll; I V l‘ l At “His Master's Voice” Dealers ‘ §>:§&»~M._..l Victor Talking Machine Co. n15 magmas‘ volq ‘McDonald & McPhee B. A. J. A. MoDONAIJD H. r. MoPHEE w: B. A. . . BARRIOTER, Iarrlstoro, Attorney, its, Money to um flllay luildlno Charlottetown 1220-1-11-11. IOLIOITOR» Money to Loan Clmlfen ll0O"_1“II'lflM0Wn»P-l-|- umeuia hereinafter mentioned were other assets oi J. Itoulo Mark R. McGuigan r70‘ cars. per Queen Street known as the showroom. H Dtaed at Charlottetown, Prince Edward Island, this twent,-socond day or December, nineteen hundred and twenty-two. J. STANLEY WEDLOCK LIMITED. (Sl-td.) J. Stanley-wedlock, (L.S.) President. (Company's Seal.) tsgd.) c. W. Hyndman, (L.S.) Witness: W. H. V. Dunbar. The premises described in the lease comprised part of the business premises of the wedlock Company and was used for the purpose oi ox- hibiting to prospective purchasers the automobiles therein stored. This showroom was open to the public during business hours and was not barred up nor kept specially locked during business hours and the oiilc- ers and employees oi the Company passed through the showroom from the workshop to the office and in the regular course of business. One oi‘ the keys of the premises includ- ing the showroom was in the hands of the lessee and he was instructed by "The Bank" to make and did make o daily check of the cars on hand. reporting the same to The Bunk each morning. The dlchuugh- lin motor cars received by. the wed- lock Company were placed im~ the said Showroom and delivered there- from us they were sold. The ware- house receipts hereinafter referred to us having been given to the Bank were issued by the said C. West Hyndmnn, the lessee, in respect of the ears mentioned in such ware- house recelpts and the cars were stored in the said showroom. in the course of its dealings with the McLaughlin Company cars were ordered thy the wedlock Company which were shipped from Oshawa to Charlottetown and bills of la/ilug for the cars shipped were taken to the order oi the shipper, the bills oi lading and hills oi w change for the price thereof being attached to the bills of ladiug and sent through a ‘flank. The first three applications for credit. hereinafter referred to as (a). (b) and (c), were made by the wedlock Company to the Bank for the purpose of obtaining loans or ad- vances from The Bank to take up the bills of exchange drawn for the price oi such curs and the amounts oi the respective promissory notes hereinafter mentioned were the amounts oi the respective advances made by The Bank at the dates of said notes in pursuance oi the res- pectlve applications and agreements of the some dates. The advances so made were plscod to the credit of the wedlock Company in s speci- sl s count in The Bank and cheques drs n thereon by the wedlock Com- pany in Plymsutpf the said hills of exchange drown for the cost of the At the respective times of illl the some upon receiving tho cheque oi thewsdlook Company important Doololon of tho Chief lad the cars "°"° m" N“!!! ill the show room above mentioned. The transactions between The Bank and the wedlock Company relevant to this case were the fol- lu the matter of the lllstate oi J. ]Qyfl1‘~__. (a) The Company gave its do- mend note to the Bank dstod 28rd May, 1928, for $4970.87 and at the for its dis- same time hypotheceted to The Bank a warehouse receipt of the "m9 d!“ Bill-led by the said C. w. l-lyndmso to J. Stanley wedlock Ltd., covering three McLaughlin cars. On the 27th day oi July, 102B; when the petition in bankruptcy was filed and the Receiver appoint- ed one car had been sold and its the other two cars remained on the premises mentioned in the lease. then $3126.87. . (b) The wedlock Company sav $4612.37 dated 7th June, 1923, and at the same time hypothecated to Oi these two cars had been sold be- fore the 27th day oi July. 1923, and then $1602.37. same date signed by the said c.w Lii- covering four McLaughlin cars mines. note was then/$1258.24. appears in the stated case:- to the Company. the special account and c, and used against such advance." Ccmtsny covering three automo model k-nown as the note was $2185.00. oi warehouse receipt for credit. On the 27th July, 1923, on the pe the Receiving order the llnterlm Re show room where August, 1923, the was constituted Receiver Estate. remained there until sold. Bank which had made arrange to the trustee. wrote to the trustee as follows; THE BANTK OF NOVA SCOTIA. Charlottetown, P. E. l. August 18th, 1923 The Eastern Trust Company, City. Dear Sirs :-— ruptcy proceedings Act. (Description of seven csrs In question.) sions of the assignments Bonk, have no jurisdiction security being questioned in the may lbs caused by your turning the cars over to tho Bonk. As the sea- son ls fast drswlnlxo a close it is manifestly desirdble that our se- curity be realised on so quickly as possible. in order that there will not be further loss in connection with the disposal, of tho corn which making the advances tho other doc- sxocutod by the wodioou Company i" i< vflI-nwrnIsIwI-nlwvn wedlock Limiiod. r; . THE enhancers-tows about» land dolivirolto flit Rik to their purport and the q im-g were given up by the Bank hold- proceeds applied to the note. and The unpaid balance on the note was its demand note to The Bank for The Bank a warehouse receipt oi the same signed by the naid C. W. Hyndman to J. Stanley wedlock Ltd, covering iour McLaughlin care. two remained on the said premises. The u-n-paid balance on the note was (c) The Company gave its de- mand note to The Bank for $4816.09 dated June 28th, 1923, and at the same time‘hypothecated to The Bank a warehouse receipt oi the Of these, three cars had been sold before the 27th July, 1923. and the other car remained on the said pre- Tho unpaid balance on the The fourth loam. (d) stands upon an entirely different footing as thus “On 14th July. 1923. J. Stanley wedlock Limited was being press- ed by creditors and applied to The Bank or Nova Scotia for an advance of $2300, to enable it to pay the claims oi such creditors mud exe- cuted the application l‘or credit and agreement to give security (Form 100-95) dated July 14th, 1928."l‘he Bank accordingly advanced $2300 ‘The $2300 was placed to the Company's credit in (mentioned above in respect of the loans a, b in payment of cheques drawn by the Cilmpsny Tho loan was made upon the wedlock Company's note and upon the hypothecation of a wraehouse by C. W. Hyndman to the wedlock bites apparently in stock, viz: Mc- Laughllvu Sedan No. 53876 E. 7367. one Oldsmobile light cylinder 1920 Dr. Scantlebury car, Light 6 McLnu~ghlin_1919 model know-u as Laughlln McDonald cur. 0f these, two cars remained ou the premises at the time oi‘ the bank- ruptcy. The balance then due on in every instance the wedlock Company at the time of giving the note also executed an agreement in writing to furnish security-by way upon the goods mentioned in each application tition of the Bank of‘Nova Scotis the Eastern Trust Company was appointed Interim Receiver of‘ the property of the wedlock Company. immediately upon the making ofnhusluess o, not" ceiver locked up the doors oi the wedlock premises, including tho the cars were kept, and retained the key of the premises, and on the 8t.) day of said wedlock Company was adjudged bankrupt and the Eastern Trust Company of the At the time of the bankruptcy the seven automobiles hereinafter refer- red to were in the show room and ‘Two of these care were sold by the trustee with the consent of the ments for their sale, the price of the two cars. viz: $2400, bsiu-g paid On the 18th oi August, 1923. the Manager of the Bank of Nova Scotin Having reference to the Bank- ln contiovtlon with J. Stanley wedlock Limited; please note the following care nre under warehouse receipt to tho Bunk signed by Mr. C. W. l-lynd- man as warehousernan under the provisions oi Section 80 of the Bunk We understand two of these cars have been sold, the relative pro- ceeds tbeim-g in your hands at this writing. We feel that the Eastern Trust Company. under the provi- to the over these‘ cars and we shall, therefore. be glad if you will instruct Mr. C. W. l-lyndmam». the vvuPBlIOlIBGIHBIL to act on the Bank's instructions in credit and would go down» before a reference thereto. ln consideration‘ breath oi flood or undue advantage. of your giving these instructions and in order that you may be pro- mined is the elect of the bankrupt- teoted in the event of the Bank's c, of the wedlock. company upon future we hereby undertake to re- imburse you for any loss which the first three (s). (b) sud (c) fall To ~ t to totnis nut- 11% $iihlli§nvlitisti~ " (8rd) L. D. MURRAY. Manager- ln pursuance of the above letter the trustee paid over to tho said iBauk the sum oi $2400 and the Banksold the remaining automo- biles then in the said show room and sppliod the proceeds of such sale and the said $2400 sgshet the advances mode by the Bank to the Company. ‘ The prices at which the cars were sold and the application o! the funds received are all admitted The question raised for the couaid erstion of the Court is “whether the Bank of Nova Scotia is entitled to before set forth." sale of the seven cars remaining in was $8708.18. The Bank of Nova Scotlo claims to be entitled to re- tain out of that amount the follow- lug sums:—— . 1662.37 . 1258.24 Balance 0n loan (h) . .. ‘Balance on loan (c) . $8232.48 leaving a. balance duo the wedlock Company of $475.70. The Royal Bank challenges the right oi’ the Bank of Nova Scotia to any part of the said sum of $8708.18 which the former alleges should have been paid to the trustee ior distribution among the creditors l-lyndman to J. Stanley wedlock general!» The admitted balance of $475.70 ~ to which the trustee is ‘clearly en- titled, reduces the amount iu coll- troversy to $8282 made up oi the four items (a), (b). (c) and (d). Why this-admitted balance was not obtained and accounted for by the Trustee in its Statement oi Re- ceipts. l am utterly at a loss to un- derstand. The Bank of Nova Scotia relies upon two grounds: (a) The warehouse receipts sign- ed by C. W. Hyndman nre valid un~ der section 86 of the Bank Act. and (b) The moneys were advanced -by the Bank to the Wedlock Company on the Company's promise to give security -hy wurehduse receipts u!!- der the Bank Act. l do not think that the second ground will hold except to the lim- ited extent hereinalter mentioned. The promise was executed in the delivery of the warehouse receipts leaving m0 outstanding equity. ln my view the sole question is on the validity 9L these securities which will require to be determined upon their compliance or otherwise with (1) The Bank Act, and (2) ' The Bankruptcy Act. Objection is taken to the docu- ments purporting to be warehouse receipts on the ground that the per- son who gave them was not in “actual visible and continued pos- session as bailee thereof in good faith," as defined ‘by Sec. 2 s. s. (p) (i) of "The Bank Act." That definition is intended to include persons other than warehousemen. The following s. s. (ii) is the one which applies to the present case; defining “warehouse receipt" as in- cluding "receipts given by any per- son who is the owlner or keeper oi‘ house or other place for the storage ' of goods . . . . . .. for goods . . . . . .. delivered to him as bailee and actu- ally in the place or one or more oi the places owned by him whether such person is engaged in other ll adopt as appli- ' cable to the present case the view expressed -by Boyd, C. in Merchants Bank va. Montolth 1O 0-H. 529; "l think the two classes were con - founded during the argument. The same sort oi proof is not required in the case of a warehouse man grant- ing such documents as in the caselof a mere bailee of goods and the test of their validity does not necessari- ly depend upon proof that be was “actually visibly and continuously in possession of them." Objection is also taken that Mr. C. w. Hyndman as an oilicer of the Company and owner of some stock therein was disqualified from acting ' as warehousemsvn of the Company's goods. The ownership of stock in a Com- pany does not make the stockhold- er an owner of the Company's pro- perty or any part of it. As to the lessee being an ofllcer or servant oi’ the Company, that question was dealt with in La IBanque Nationals v. Royer 1910 QR. 20 K3. 341, cited ' as an authority in its favor by each 'of the contestants in this case. ln that case the majority oi the Court upheld a warehousi receipt grant- ed by a clerk to is employer in circumstances not in principle from the presentt what impressed me at first in this case was an appearance or nrtiticiality in the foundation upon which the warehouse receipt rest- ed, lhut upon consideration it up- pears to me that the fair inference to be drawn from the facts stated is that the hypothecation methods and proceedings were devised and carried through solely for the pur- pose or giving a security to the Bank in literal compliance with the provisions of "The Bank Act." l think there is such a compliance and that, as no fraud is imputed. the estoppels affecting the immedi- ate parties would in the circum- stances of this case (apart from the Bankruptcy Act) effectually valid- ate the trsnsactions Inter so. Yet it is a iraii stru ure to support The second question to be deter- these securities. _ . . Of the four transactions involved for consideration into one class and will first be disposed of. , The three transactions took place within the period of three months (before the tbantkruptflr. llsoh belles with cars in the possession and ownership of the McLaughlin Com- pany to be delivered only upon- would of necessity rank sgsinstpsyment. The Bank advanced the money to , tho wedlock Company upon suote w .. Iuw-‘w-m 4W.- y, M .- m; »"-‘ Yours very truly. l1 - - to the Bank. The result was that distinguishable _ w: the. Ili-lfluiww oreliouso ‘ tho 0TB. tee . . . . . . . .. a warehouse. shed. BtOPQ-‘of Nova Scotla; W. i0. lienllc-y, K. i I eithor iu-sulfer of the bill of lading to the wedlock Company or if any enure- oioble time intervened it was bridl- ed-tby the equity arising to the Bonk on tho promise to give the security. lt is therefore not within Sec. 81 (l) oi the Bankruptcy Act which applies to the tmnsior oi property to s creditor with s view of giving him a preference over other creditors. nor is such a vie :' Upply inasmuch as the eifec,t glfihe transaction so fer from pre u c n! retain the moneys applied by it in other creduom operated ,0 mo“. payment of the special loans herein- advunua to the “m”, m. the pm The net amount realised on the a}: 3:? o“ u“ subsequent “l9 or hand at the time of the bankruptcy luazeszntg-gngfigf?lfiilogilomzta‘; provisions of Sec. 32 of The Bank- ruptcy Act, because there is no evi- deuce nor allegation in the case that The Bank had previous notice oi an available act or baukruptc , but it Balance on loan (a) . . . . ..$3126.87 do“ 8pm" m“ n had sited m good faith for adequate valuable ' consideration and that the securi y 391"” m1‘ "m" (d) - ' ' ' " 218500 was perfected before the receiving - order was made. ln my opinion the documents of title held by the Hank in (u). (b) and (c) were valid securities unaf- fected by the bankruptcy to the ex- tent of the respective amounts due thereon. The fourth transaction (d) involv- ing a loan of $2800 and the securi- ties therefor differs fundamentally from the other three. lt has no merits. The ion-n was not advanced for the purpose of acquiring addi- tional property for the Estate. From all thatappears its proceeds may have ‘been applied to giving nu un- due preference to favored credit- The security stood exposed tn every peril that could attend the lending oi’ money to one who was on the very eve of ‘bauikruptt-y and in circumstances known Bank which if direct notice of insolvency should at least have put it upon an enquiry that could only have resulted in 'llri- closing the actual condition of ul- fairs. un undue preference and must he set aside. . The order is that the Bunk o i Nova Scotin shall-pay to the trus- the admitted balance to tin- credit of the bamkrupt $475.70. The sum collected before adjudication in bankrupt y. $115.00. And the balance of same lnun vol- lected afterwards, $2185.00. Total principal. $2775.70. Together with interest on 84757 part thereof from 8th August. 19:3, ut the rate of 5 per cent. This order is made without pre- judice to The Bank to prove as an ordinary creditor i'or the said sum of $2775.70. The trustee will pay to the Royal Bank of Canada out of the funds o" the estate the costs Bank in opposing this uppllcziliotl on each occasion, but as one hill oi costs. No further order for costs. -Further consideration with leave to apply. , -C. Gavan Duffy. K1‘... for Royal Bank of Canada; "W. C. Muc- ipti should-l It's title to the, cars rose simultaneously with the or intentiog alleged in the statolti‘ ' N i d he l f $ghmptidnehertlsiitailed 1;- tls. ‘(all ‘bu!’ ‘u thmulh "l! home. Old Dutch. ‘ narrows cm»- l‘ house means a healthy Old Dutch is n, natural deter ent that n. moves all vlalb e and l visible , impurities quickly, u " ' . economical lye, acids or hard grit to » injure hands or surfaces. There is nothing else, ilk; ly. ely and Contains. mg to the not constituting The security is invnlltl as Type “M” on loan l") of (he fluid oi the engine "and cutting repair costs. sizes. Write us for full particulars. ‘The CANADIAN titljnurncd The FAIRBANKS-MORSE.- 3.11.10. Marine Engine ' was Muillor, Carburetor and Wrenches Engine complete with all installation fittings only $111. Fishermen will find this an unusual engine value, for the “M" is a sturdy engine, built to give unfailing service under emergency conditions. The main advantage of the Type "M" Engine is that there is nothing to get out of order. The simple design and heavier construction mcet every demand for a heavy duty engine with low running cost. The ignition is positive in all weathers and the Schebler carburetor is very efficient. These engines are noted for the little attention they require. Heavy construction and ample bearings reduce vibration, thus adding to the life Type "M" Engines are made in _3, 5, Fflilbfllikfi ‘M0189 8, 10 and 16 hp. Donald. iK.C.. Halifax, for The Batik COMPANYaEiJILilGd 0.. for Eastern Trust (fir, 'l‘rtistee 75 Prince William Street Saint John, N.B. in Bankruptcy. . J I The greatest fence value ever offered FRQST FENCE costs no more to buy, but it lasts years longer. Every extra year of service reduces the actual cost oi your fence. Ask the farmer who has Frost Fence! Frost Fence lasts years longer because- l. lt is made of Frost wire. drawn. tempered and extra heavily galvanized in our own factory. ex- pressly for fence service. N . The waved laterals have precisely the right tern- per ior real spring action. giving and taking with Ill strains. preventing permanent sags. The genuine Frost lock cannot budge; cannot slip; it holds every wire permanently in place and prevents undue strains on any part oi the fence. Frost Fence costs less becsuse— I. lt is woven in the largest. best-equipped factory in Canada. 2. immense purchases of raw material make low cost ossnble. li is the greatest value ever offered the armor immense purchases of raw material and large sales enable us to accept a small profit-the |°W=5i Profit the farmer pays-the greatest value ever offered! 3. We make th: wire in our own factory: we save you the proln w: would otherwise have to pay sn out- side maker. Read the letter at bottom of this announcement-"Wlthout a Fault"—~ written by a fence builder of long experience. Look for the yellowing. it is \ not genuine Frost Pence unlesa ii bears this ll]. Frost Fence Frost Steel and Wire Company. Limited, Hamilton, Canada Mshu of Galvsmnd and Bright Who-Hal Win and Bela TIn-qfiovu fro-Jenn. lee- cucu-Foa Pu l‘: "*9" (err and Omsnmvu! l‘ m4» - L; k p n“ g h h’ _ I'll!" lvlllhrmono-Iuulutnxzs‘ #1.. Supplies, ' I" m ii».- fir charm s. co. no, Charlottetown Are Sole Agents for the Above p wmn rename for QUEENS and unites COUNTIES» ‘ A large well assorted Can-load just received, “including, Staples, Poultry Fencing,‘ etc., etc, for sale at our Seed Store, Queen Street. Ev- Gateo plain and Ornamental, erything sold at factory prices. r All l "l created lv lnl ll. oi. lhlllhllm Iv. I e s Ill. . o vall was coals l. J - Frost U stretched up wt t hull. It ls tbs fence on the market“, WM. I®Ol l.ll. l. loan. 0st.‘