not to prefer the the dominant intention of the insolvent was Then it was urged that ss. 107 and 108 had no application to the case, because the relationship subsisting between the insolvent and the appellants was that of trustee and cestuis que trustent, as distinguished from that of debtor and creditor, and that ss. 107 and 108 only refer to dealings with a creditor. Now, as it is admitted that if the appellants had never received any butter on the 25th May, it would have been competent for them to prove in the insolvency for the amounts advanced against the fictitious warrants, it does not seem to us to be of any importance what the exact relationship subsisting between the insolvent and the appellants may have been, for in the case of the Bank of Australasia v. Hall (1), the High Court decided that the word "creditor" in ss. 107 and 108 of The Insolvency Act of 1874 includes any person who, at the date when a payment is made, or property is transferred to him, is entitled, if insolvency supervenes, to prove and share in the distribution of the estate. See per Griffith C.J., at p. 1527; per O'Connor J., at p. 1536; and per Isaacs J., at p. 1546. Nor are we able to accept the contention that money obtained wrongfully by fraud and false pretences is not recoverable by the rightful owner as a debt. Holt v. Ely (2), Martin v. Morgan (3). Whatever other relationship existed between the insolvent and the appellants on the 25th May, 1907, we think that the relationship of debtor and creditor clearly existed between them on that day. (1) 1907, 4 C.L.R. 1514. (3) 1819, Bro. & B. 289. F. C. WHITE V. LONSDALE & Co. Cooper C.J. The next argument based upon this supposed trusteeship was that the appropriation of the butter to the appellants on the 25th May was a restitution of trust property previously misappropriated by the insolvent, and that such a restitution cannot be attacked as a fraudulent preference. No authority was cited which, in our opinion, gives any support to this astonishing contention, and, as was pointed out by Mr. Feez, it does not seem to have occurred to any of the eminent counsel and Judges who were concerned with cases such as Sharp v. Jackson (1) or In re Lake (2)-cases in which the appropriation by the insolvent of property of his own to repair previous misappropriations of trust properties was certainly impugned as a fraudulent preference. On the appeal a strenuous attempt was made to apply to the facts of this case some of the principles upon which the case of Harris v. Truman (3) was decided. But in Harris v. Truman (3), which, by the way, was not cited to Real J., the facts were entirely different. In the first place, Harris v. Truman (3) was not a case in which any transaction was attacked as a fraudulent preference. The question to be determined there was whether at the time when the defendants took possession of certain property-namely, barley-on premises previously occupied by an absconding bankrupt, the barley belonged to the defendants or formed part of the bankrupt's estate. In such a case, the title of the bankrupt's trustee could be no higher than that of the bankrupt himself. In the case of a fraudulent preference, very different considerations arise. The Insolvency Act of 1874, s. 105. And in the next place, in Harris v. Truman (3), the Court was evidently of opinion that as the bankrupt had been entrusted by the defendants with funds to purchase barley for them, and was precluded from purchasing it for anybody else, all barley found on the bankrupt's premises, so far as it ought to have been purchased out of the funds provided by the defendants, must be presumed to have been so purchased and to be their property. But as the Judges were embarrassed by a finding of the jury that the barley did not belong to the defendants, (1) [1899], A.C 419. (3) 1881, 7 Q.B.D. 340; 1882, 9 Q.B.D. 264. they met this difficulty by deciding that in any case the bankrupt, after repeatedly stating in his accounts that all barley on his premises had been bought by him for the defendants out of moneys previously provided by them for that purpose, and had been approved by them, and was to be malted for their benefit, and after inducing the defendants to go on furnishing him with funds for the purchase of more barley, on the faith of these statements, would be estopped from disputing their title. In attempting to press the case of Harris v. Truman (1) into their service, counsel for the appellants have, we think, confounded questions of ownership with questions of obligation. In our opinion, there is nothing in the case of Harris v. Truman (1) which lends any support to the contention that the plaintiff in this case, the trustee of the insolvent's estate, is estopped from denying the appellants' title to butter found in the possession of the insolvent on the 25th May, 1907, or from impeaching the transfer of butter to the appellants on that day as a fraudulent preference. It was further contended that the appellants received the butter bona fide, and were therefore expressly protected by the provisions of ss. 107 and 109, and s. 112, subsec. 3, of The Insolvency Act of 1874. It was not, we think, denied-at any rate, we have no doubt that Vagg, who acted as the appellants' agent in securing the delivery of the butter to them, was fully aware of the insolvent's financial position, and was also fully aware that the butter had been purchased by the insolvent on credit for the purpose of handing it over to the appellants on the 25th May, the day on which it was so purchased, and that on that day the insolvent's estate was receiving no benefit from the transaction. But it was argued that Vagg's knowledge of these matters could not be imputed to the appellants, and in support of that argument cases such as Cave v. Cave (2) were referred to. cases. We are unable to understand the application of any of these The argument really comes to this, that when an agent has once committed a fraud on his principal, and proposes to commit a further fraud upon other people, for the purpose of (1) 1881, 7 Q.B.D. 340; 1882, 9 Q.B.D. 264. (2) 1880, 15 Ch. D. 639. F. C. WHITE V. LONSDALE & Co. Cooper C.J. F. C. WHITE V. LONSDALE & Co. Cooper C.J. repairing the consequences of the original fraud, and so benefiting the principal by putting him in the same position as if it had never been committed, then the agent's knowledge of the circumstances constituting the second fraud cannot be imputed to the principal, and the principal can take the benefit of it without rendering himself accountable in any way to the persons defrauded by his agent. We do not think that there is any case which compels us to adopt this argument. In our opinion, Vagg's knowledge of the circumstances which made the transfer of the butter to the appellants a fraudulent preference must be imputed to the appellants to the fullest extent. And it is conceded that, under those circumstances, the appellant cannot claim to have received the butter bona fide. The contention that the surrender of the fictitious cold storage warrants in exchange for genuine bills of lading was a sufficient valuable consideration given at the time is, we think, quite untenable. And, lastly, the contention that the appellants derived their title to the butter-not from the insolvent-but from Vagg, or the Bank, seems to us entirely at variance with the facts of the case. Vagg never had the slightest interest in the butter. He was merely the appellants' agent to purchase butter on their account. The Bank never had any interest in the butter beyond the lien conferred upon them by the terms of the letter of credit. And this lien could only attach to butter as and when it became the property of the appellants. In our opinion, then, the case for the appellants fails on all grounds, and the appeal must be dismissed, with costs. Appeal dismissed, with costs. Solicitors for appellants: FitzGerald & Power. [IN THE FULL COURT.] BYRNE v. DUNNE. Will-Charitable bequest Rule against perpetuities - Gift of residue “to be expended wholly or in part as the Archbishop may judge most conducive to the good of religion in this diocese "Uncertainty. A testator, who was a Roman Catholic clergyman in charge of the Mission at Dalby, bequeathed his furniture, library, horse, buggy, and harness, to his successor in charge of the Roman Catholic Mission; and on his death or removal to his successor, and so on, for their use. The testator directed that the residue of his estate should be handed to the Roman Catholic Archbishop of Brisbane and his successors, to be used and expended, wholly or in part, as such Archbishop may judge most conducive to the good of religion in this diocese. Held, that both bequests were good charitable gifts. SPECIAL CASE stated under 0. XXXVIII. This was a special case stated in an action brought against the executors of the will of the Reverend Denis Joseph Byrne, deceased, by one of the testator's next-of-kin, claiming a declaration that he was entitled, upon the true construction of the will, to a share in the testator's estate as one of the next-of-kin. The material portions of the will were as follows "I will and bequeath, after payment of my lawful debts, funeral and testamentary expenses, my furniture, library, horse, buggy, and harness to my successor in charge of the Roman Catholic Mission at Dalby, and on his death or removal to his successor, and so on, for their use. And I will and bequeath all the aforesaid legacies free of probate duty and all other expenses, and that the residue of my estate should be handed to the Roman Catholic Archbishop of Brisbane and his successors, to be used and expended wholly or in part as such Archbishop may judge most conducive to the good of religion in this diocese, and I appoint the Archbishop of Brisbane aforesaid, for the time being, and the Reverend Denis Fouhy, of Toowoomba, Roman Catholic Clergyman, to be the executors of this my last will and testament." The questions which were submitted for the opinion of the Full Court were :— . Full Court. 1910. May 3, 4, 5, 12. Power J. |