bills of exchange of 1,000l., 1,000l., and 7007., upon Messrs. Graham, belonging to the partnership, which Mackenzie in December 1812 discounted, and applied the proceeds to his private use; that he believed the three bills were withdrawn without the knowledge or consent of Abbott; that at the time of the conversation between Abbott and Mackenzie, no entry of the transaction had been made in any of the books of the partnership, but Abbott discovered the same from not seeing the bills in the bill drawer; that it was the duty of the partners, or either of them, on disposing of any bills belonging to the firm, to enter in the bill-book of the firm the manner in which such bills had been disposed of; and that there was no entry in the bill-book of the disposal of the three bills so abstracted by Mackenzie. Mr. Swanston and Mr. Marshall for the petition : The question is, whether there was any fraud. Even if there were fraud in the original abstraction of the three bills, it has been waived by the subsequent dealings between the partners in the same manner as before the discovery of the abstraction. The sums said to be abstracted were entered in the books, by which the presumption of fraud is rebutted, ex parte Smith, 1 G. & J. 74; and Mackenzie continued as partner, and was afterwards allowed to draw 4607., part of which Abbott paid to Mackenzie's wife. The proof was not, however, made in respect of any particular sum abstracted, but upon the balance of the general account between Mackenzie and the firm; and the proof must therefore be expunged. Mr. Montagu and Mr. Purvis for the respondent: - 1833. Ex parte from the joint estate by one partner, a proof may be made for the amount; ex parte Harris, 1 Rose, 129, 437. And there has not been any act done in the present case to alter the nature of the original trans- In the matter action, which must be considered fraudulent within the sense in which the word "fraud" is used on these occasions. It may be admitted, that if the transaction had been duly and openly entered in the books by Mackenzie previous to the detection by his partner that the bills had been taken from the drawer, it might have been a strong circumstance to rebut the fraudulent intent, as in ex parte Smith, 1 G. & J. 74; but such was not the case; and there was no entry made, or communication to the partner, until after the discovery, when he was taxed with the abstraction; and Abbott remonstrated with him on the impropriety of his conduct. It is said that Abbott has acquiesced by his conduct at the time of the detection, and by the subsequent payments to the wife, and entries in the accounts. The transaction was entered in the books after the detection. It was merely to evidence the extent of the abstraction. Suppose the case of Fauntleroy, where the amount of the fraud might probably be 200,000l. Upon detection the partners would enter the sums abstracted, not to testify their approbation, but to ascertain the amount. This was done in ex parte Watkins, 1 Mont. & M. 63, where Sikes had in his own name stock belonging to the firm, which he sold out and appropriated to his own use, without the knowledge of his partners; but on the next day, as soon as his partner came to town, he communicated the fact to him, and he was considered debtor for the amount, and charged half yearly with the dividend; and it was decided that it did not amount to subsequent approbation, of Mackenzie and another. 1833. Ex parte and the proof was allowed. In that case part of the proceeds were actually paid into the firm. If (as it must be admitted it was) at first fraudulent, the question is, In the matter what subsequent acts will in law be considered as an MACKENZIE acquiescence? In Sikes' case the dividends were paid and another. and entered from time to time, and the principal pre of sumed to be returned. The payments to the wife, from motives of kindness, on account of her destitute situation, cannot be termed approbation of the fraud. The CHIEF JUDGE :-No difference of opinion exists as to the law. It is admitted that no proof can in this case be made, unless the amount were fraudulently abstracted. The question is, whether, if the fraud be proved, subsequent conduct will divest the transaction of its fraudulent character. I am not satisfied that the original transaction amounted to a fraud. It is stated that the entries were not regularly made by Mackenzie when he appropriated the bills. It is true that Abbott discovered the bills had been taken before any entry was made, but it is not necessarily to be inferred that they were taken in fraud; for as soon as he is asked he admits having taken the bills, and they are entered in the books; and although Abbott did not immediately know when they were taken, yet it was known to the clerk, whose duty it was to keep the books; so that Abbott had the opportunity of immediate knowledge. In ex parte Smith (a) it was held that the withdrawing money was not a fraud entitling the joint estate to prove, as the transaction was duly and openly entered in the books, by which there was no concealment, the partner having the opportunity of knowing. (a) 1 G. & J. 74. If, however, I were satisfied of the fraud in the first instance, I am of opinion that the subsequent conduct would have waived it, and that Abbott has approved, not morally, but legally approved the withdrawal of the bills; that he has, by his conduct before the bankruptcy, waived the tortuous act so as to reduce it to an item in the partnership account. It does not appear that any directions were given by Abbott not so to treat it. The debt, therefore, is not proveable, and the proof must be expunged. Sir John Cross:-The first question is, whether the original abstraction was fraudulent? for it is admitted, that, unless it were, the proof cannot stand. What are the facts? Some twenty years ago, a fraud was, it is said, committed upon the partnership. To support a case of fraud, strict evidence is required, and here, the party being abroad, the Court is asked, after this lapse of time, to convict him of the fraud in his absence. It appears that he was entitled, at the time of the alleged fraud, to draw out 1,2007., but he drew out 2,7007., which, it is said, being more than by agreement he was entitled to draw, is a fraud. I concur with his Honor, that the proof ought to be expunged. Sir George Rose:- Upon the principles in equity as to fraud there exists no difference, and this question of fraud only arises in bankruptcy. It has been found to be most convenient to adopt the rule in bankruptcy, that one partner shall not prove against another in competition with their joint creditors, except in cases of fraud; but, looking at the state of the facts at the time of the bankruptcy, and looking at the books, I think there was nothing more than contract, and that the proof must be expunged. 1833. Ex parte In the matter MACKENZIE and another. Ordered. Each party to have their costs out of their respective estates, but the assignees to have their costs out of the general estate, as they must at all events be covered. C. R. June 2, July 18, 1832. Statute of limitations not a bar in cases of fraud. Ex parte BOLTON.-In the matter of BAILLIE and JAFFRAY. A COMMISSION issued in October 1806, against In November 1806, J. Parker proved for 1,5147. 7s. upon a Bill accepted by the bankrupts, drawn by M'Kenzie and Co. in Spain. The bill did not become due till the 21st October 1807, when it was dishonoured, and on the 22d, Cox, under protest, took it up for the honour of one of the drawers who resided in Spain; and a receipt for the amount, signed by the agent of J. Parker, was now produced in court by the assignees. On the 2d of June 1807 a dividend of Is. 3d. in the pound was declared; and the assignees, not being aware that the bill had been paid, included the debt proved by J. Parker in the first and in every subsequent order of dividend. For the first dividend, amounting to 947. 12s. 11d., neither Parker in his lifetime, nor his personal representatives, ever applied. Before a second dividend was declared, viz. in the end of 1807, Parker died, leaving his son, since deceased, and Greenwood, executors. Until after the death of the son, Greenwood did not act as executor, but, soon after his death, he received a letter from the solicitor of the assignees directed to the son, apprizing J. Parker that he might receive a dividend on the proof, which was the first inti |