be confined to a lien. But, by the weight of authority, the claimant is given the option of a lien on, or a pro rata share of, the product.7 The creditors of the wrongdoer should no more be allowed to object to the constructive trust, than to the lien. They should not stand in a better position than their debtor; they should not be allowed to profit by his wrongful act. They are not purchasers for value, and they take subject to the claimant's equitable interest in the property.8

If, after the funds have been mingled, nothing further is done, and the value of the mass remains constant, the result will be the same no matter which remedy is pursued. The claimant will come out exactly whole, no more and no less. Thus, if A wrongfully takes $1000 belonging to B, and mingles it with $1000 of his own, B is entitled to $1000 from the fund, whether he claim one half of the fund, or a lien on the fund for $1000.

So, too, if the wrongdoer merely adds further contributions of his own, the result will be the same, and B will get full satisfaction on either theory. Thus, if in the example suggested above, A adds $2000 more of his own, B is entitled to $1000, whether he claim the proportion of the fund contributed by him, namely one fourth of $4000; or whether he claim a lien on the $4000 for $1000.

If, however, the whole fund is exchanged for property which is or becomes greater in value than the fund, the claimant comes out better by proceeding on the constructive trust theory; if it is or becomes less valuable than the fund, he finds the lien theory more

• See the dictum of Jessel, M. R., in Knatchbull v. Hallett, 13 Ch. D. 696 (1879), p. 709. But see an explanation of this dictum in Primeau v. Granfield, 184 Fed. 480 (1911), p. 485. In Bresnihan v. Sheehan, 125 Mass. 11 (1878), the court gave only a lien, although on principle it would seem that the claimant was entitled to a pro rate share.

7 Wedderburn v. Wedderburn, 4 Myl. & C. 41 (1838); Primeau v. Granfield, 184 Fed. 480 (1911) (reversed on another ground in s. C., 193 Fed. 911 (1911)); Treacy v. Power, 112 Minn. 226 (1910); Shearer v. Barnes, 118 Minn. 179 (1912); Fant v. Dunbar, 71 Miss. 576 (1893); and cases cited in 19 Harv. L. Rev. 512, note 2. In re Oatway, [1903] 2 Ch. 356, and some of the other cases there cited, are, however, illustrations of a lien rather than of a constructive trust.

So, too, if the wrongdoer commingles the money of two persons without contributing any money of his own, and the fund is profitably invested, the persons wronged share the product pro rata. See Lord Provost v. Lord Advocate, 4 App. Cas. 823 (1879). Byrne v. McGrath, 130 Cal. 316 (1900); Kepler v. Davis, 80 Pa. 153 (1875). The doubt expressed in Smith v. Township of Au Gres, 150 Fed. 257 (1906), p. 261, and in Greene v. Haskell, 5 R. I. 447 (1858), p. 457, does not seem to be well founded,

advantageous. Thus, if A wrongfully mingles $1000 of his own with $1000 of B's, and with the product buys land which is worth $3000, it is more advantageous to claim half of the land, than a lien on it for $1000. If the land is worth $1000, it is more advantageous to claim a lien on it for $1000, than half of the land.

Now, let it be supposed that after he has wrongfully mingled his money with that of the claimant, a part of the fund is withdrawn by the wrongdoer and dissipated. Here the claimant has a lien on, or a pro rata share of, what is left. The reason generally given in the cases, is that suggested in the case of Knatchbull v. Hallett,1o namely, that it should be presumed that the wrongdoer intends to draw out his own money, because to draw out the claimant's money would be dishonest. This is, of course, a pure fiction," and as usually happens when a proper result is reached by fictitious reasoning, has led to erroneous results in other cases.' 12 It seems to be thought necessary to show in what part of the commingled fund the claimant's money is to be found; and as it is impossible actually to distinguish the claimant's contribution, the courts have resorted to a presumption as to the intent of the wrongdoer, although there is no reason to suppose that he had any particular intent, and no reason for allowing his intent to affect the claimant's rights. The claimant ought, it is true, to have an interest in what is left, not because of any intent of the wrongdoer, but because the wrongdoer, whatever his intent, should not be allowed by taking away a part of the fund, to deprive the claimant of his lien on, or share of, the rest of the fund.

Where, instead of physically mingling the money, the wrongdoer deposits in a bank in the same account, his own and the claimant's money, it was held in the case of Pennel v. Deffell 13 that the rule

11 See Primeau v. Granfield, 184 Fed. 480 (1911), p. 484; In re A. O. Brown & Co., 189 Fed. 432 (1911), p. 434.

12 See the discussion, infra, of In re Oatway, [1903] 2 Ch. 356, and the other cases where the part withdrawn is preserved and the remainder dissipated.

13 4 DeG. M. & G. 372 (1853). The decision in this case on this point was followed in Brown v. Adams, L. R. 4 Ch. 764 (1869). In Pennell v. Deffell it was conceded that in case of physical mingling, Clayton's case has no applicability and that the withdrawal of part would not destroy the claimant's lien on the remainder. 4 DeG. M. & G. 372 (1853), p. 382.

in Clayton's Case 14 applies. By this rule, the first withdrawals from an account in a bank are charged against the first deposits. As between the depositor and the bank, this rule is fair enough; for it is a question of intent as to what part of the account is paid when the depositor makes a withdrawal, and since it is necessary to have some definite rule, in the absence of any evidence of actual intent, this rule is adopted because it comes as near as any to expressing the probable intent. In cases of a wrongful mingling of deposits, however, the rule is wholly inapplicable in determining the relation between the wrongdoer and the claimant. By depositing the whole in one account, the wrongdoer has confused his money and that of the claimant, as inextricably as though he had physically mingled the money. He has, by the use of the two funds, acquired a single chose in action. That whole chose in action, therefore, is subject to a lien of the claimant, or, on the constructive trust theory, is partially owned by him. The wrongdoer, whatever his intent, cannot shake off the interest of the claimant. Pennell v. Deffell has accordingly been overruled on this point, and it is now held that the claimant has an interest in the balance, regardless of the order of deposit.15

15 Knatchbull v. Hallett, 13 Ch. D. 696 (1879), p. 726, a case which has met with universal approval in this country. In the case of In re A. O. Brown & Co., 189 Fed. 432 (1911), in speaking of the rights of a claimant whose money has been wrongfully mingled by another with money of his own in a bank in one account from which the wrongdoer has withdrawn and dissipated a part, the court said (p. 434): “All the deposits taken together constitute an obligation of the banker's, a single chose in action, amounting in total to the sum of the deposits. Upon that chose in action the beneficiary has a lien, if he wishes to assert it, equal to the sum of money which his property has contributed to it. So in this case the claimants may elect to retain a lien upon the total deposit after the first withdrawal. This is the effect of the case of Knatchbull v. Hallett, L. R. 13 Ch. Div. 696, a case which has been very frequently cited and the decision of which has been followed many times. This is sometimes stated as a presumption of the trustee's intent, but that is a fiction."

If the wrongdoer commingles the money of two persons without contributing any money of his own, and subsequently makes withdrawals, it has been held that the rule in Clayton's Case applies. Knatchbull v. Hallett, 13 Ch. D. 696 (1879); Hancock v. Smith, 41 Ch. D. 456 (1889) (semble); In re Stenning, [1895] 2 Ch. 433; Mutton v. Peat, [1899] 2 Ch. 556, p. 560 (semble); Empire State Surety Co. v. Carroll County, 194 Fed. 593 (1912), p. 605; Hewitt v. Hayes, 205 Mass. 356 (1910), p. 365. But cf. In re Mulligan, 116 Fed. 715 (1902), p. 719. This seems erroneous on principle. It would seem that on the constructive trust theory the persons wronged should be treated as co-owners in proportion to the amounts contributed by them, and the loss

Whether, therefore, the money of the wrongdoer and the claimant is physically mingled, or is deposited in a single account, as long as there is always a balance on hand, at least as large as the amount of the claimant's contribution, he will, by pursuing the lien remedy, come out whole. Thus, if A wrongfully mingles $1000 of his own and $1000 of B's, and then withdraws $1000 which he dissipates, B on the lien theory, has a charge on what is left for the amount contributed by him, that is, he is able to get his $1000 in full; 16 on the constructive trust theory he gets one half of what is left, or $500.17 If, however, the fund is diminished below the amount of the claimant's contribution, he will lose pro tanto; 18 and, if the fund is exhausted, his interest is lost.19

resulting from any withdrawals, like the gain from a rise in value (Lord Provost v. Lord Advocate, 4 App. Cas. 823 (1879)), should be shared by them pro rata. On the lien theory it would seem that the same result should follow. Compare the rules that are applied at law with respect to confusion of grain or other fungible property. 15 Knatchbull v. Hallett, 13 Ch. D. 696 (1879), p. 731; Massey v. Fisher, 62 Fed 958 (1894); Hutchinson v. LeRoy, 113 Fed. 202 (1902); In re Royea's Estate, 143 Fed. 182 (1906); Smith v. Mottley, 150 Fed. 266 (1906); Butler v. Western German Bank, 159 Fed. 116 (1908), In re Stewart, 178 Fed. 463 (1910); Elizalde v. Elizalde, 137 Cal. 634 (1902); Whitcomb v. Carpenter, 134 Ia. 227 (1907); Fogg v. Tyler, 109 Me. 109 (1913); Commissioners v. Wilkinson, 119 Mich. 655 (1899); Patek v. Patek, 166 Mich. 446 (1911); Blair v. Hill, 50 App. Div. (N. Y.) 33 (1901) (affirmed s. c., 165 N. Y. 672 (1901)); Widman v. Kellogg, 22 N. D. 396 (1911); Emigh v. Earling, 134 Wis. 565— (1908).

17 He cannot on the constructive trust theory take a larger share of one part b surrendering his claim on the rest. He is a co-owner of the whole and of every part of the whole, and a mere separation of the whole into parts and a change in the form of any of those parts or a loss of any of the parts, as by a sale of it to a purchaser without notice, will not change the nature or extent of his interest in the rest. Watson v. Thompson, 12 R. I. 466 (1879), p. 471. In this case the court said: "The complainant seems to suppose that, having lost his resulting interest in what was sold, he can have the loss made good to him by a proportional increase of interest in what is left. But this surely cannot be so. His interest was inherent in every part. As soon as any part was sold his interest in that part was converted into an interest in the price received for it. It remained a resulting trust or equity in the price, or in the property in which the price was invested, so long as it could be traced specifically; and when it ceased to be specifically traceable, it became simply a personal debt or demand to be recovered of [the wrongdoer], or out of his estate like any other personal debt or demand." 18 Bank of British N. A. v. Freights, 127 Fed. 859 (1904) (affirmed s. c., 137 Fed. 534 (1905)); Woodhouse v. Crandall, 197 Ill. 104 (1902); Waddell v. Waddell, 36 Utah 435 (1909); State v. Foster, 5 Wyo. 199 (1894).

19 Beard v. Independent District, 88 Fed. 375 (1898); In re Brown, 193 Fed. 24 (1912) (affirmed sub nom. First Nat. Bank v. Littlefield, 226 U. S. 110 (1912)); In re M. E. Dunn & Co., 193 Fed. 212 (1912); Re Assignment of Bank of Oregon, 32 Ore. 84 (1897).

Now, it so happened, that in the earlier cases the part first withdrawn from the commingled fund was invariably dissipated, and the claimant wished to establish an interest in the remainder, which interest he was allowed, as has been stated, on the ground that it is presumed that the wrongdoer withdraws his own money first. But when the part first withdrawn is invested or otherwise preserved, and the remainder is dissipated, the application of that presumption would throw a loss on the claimant. In the case of In re Oatway,20 the wrongdoer made an investment of part of the fund, leaving an amount greater than the contribution of the claimant, which amount he later dissipated. The court refused to apply the presumption, and held that the claimant had a charge on the property in which the money withdrawn was invested. If the part drawn out had been treated as belonging to the wrongdoer, the claimant would have had no interest in the product of that part. This decision seems obviously right, and although the authorities are not unanimous,21 a similar result has been reached in several cases in this country.22 The separation of the fund into

20 [1903] 2 Ch. 356.

21 In the following cases the claimant was not allowed to reach the proceeds of withdrawals when the withdrawals did not diminish the fund below the amount of the claimant's contribution, because of the fictitious presumption that the part drawn out belonged to the wrongdoer: Board of Commissioners v. Strawn, 157 Fed. 49 (1907); In re City Bank of Dowagiac, 186 Fed. 413 (1910); In re Brown, 193 Fed. 24 (1912); (affirmed, without mention of this point, sub nom. First Nat. Bank v. Littlefield, 226 U. S. 110 (1912)); Empire State Surety Co. v. Carroll County, 194 Fed. 593 (1912); Covey v. Cannon, 104 Ark. 550 (1912); Standish v. Babcock, 52 N. J. Eq. 628 (1894); Waddell v. Waddell, 36 Utah 435 (1909).

In these cases it is conceded that so far as the withdrawals diminish the fund below the amount of the claimant's contribution, the claimant may follow them. But even this seems to be denied in Bright v. King, 20 Ky. Law Rep. 186 (1898).

In Covey v. Cannon, supra, a part of the money drawn out was redeposited, and yet it was held that the claimant was not entitled to it.

22 Brennan v. Tillinghast, 201 Fed. 609 (1913); City of Lincoln v. Morrison, 64 Neb. 822 (1902), p. 831; Lamb v. Rooney, 72 Neb. 322 (1904). And see Primeau v. Granfield, 184 Fed. 480 (1911); In re A. O. Brown & Co., 189 Fed. 432 (1911). In Primeau v. Granfield, supra, the court said (p. 484):

"The language about presumed intent in Knatchbull v. Hallett, supra, which Sir George Jessel laid down with his customary vigor, was merely a way of giving an explanation by a fiction of the right of the beneficiary to elect to regard his right as a lien. That it is a fiction appears clearly enough in this case where Granfield [the wrongdoer] could have had no intention about the investments as he meant to use all the money for himself anyway. To say that in such a case he will be 'presumed ' to intend to take his own money out first is merely a disingenuous way common enough,