Kip v. Bank of New-York

Per Curiam. It is a'rule well settled by the authorities cited by the counsel for the plaintiffs, that no estate vests in the assignees of a bankrupt but that of which the bankrupt had the legal and equitable title. Property that he held in trust never1 passes by the commission, and if that property consists of goods remaining in specie, or of notes and other dioses in action, the cestuy que trust is entitled to the property, and not the creditors at large. The only check to the operation of the rule is, when the property is converted into cash by the bankrupt, and has been absorbed in the general mass of the estate, so that it cannot be followed or distinguished. It is the difficulty of tracing the trust-money, which has no ear-mark, that prevents the application of the rule. But here that difficulty ceases, for the money, which was the proceeds of the trust goods, was kept separate and distinct, and deposited as such with the defendants. (Lord Kenyon, 5 Term Rep. 227.) The rule of equity and of law is the - same in such cases, and the defendants are clearly accountable to the plaintiffs, and not to the assignees, for the money did not pass to the assignees of Samuel Kip. It ought to be applied to the payment of the notes referred to in the case, and for the discharge of which the "trust was originally created. Judgment for the plaintiffs.