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النشر الإلكتروني

v. Smith's Trustees

26, 1884

were increasing, and what they should do with the same. In the removal from Fernbank to Ballinard in 1878 this private cash-book was mislaid. The book was found sometime before the truster's death, but he was then seriously ill, and did not make any further entries in it." Such was the nature of the account, and as to the deceased's intention with regard to the sums entered in it I do not see that there can be much room for doubt.

Besides, for eighteen years these entries were regularly made, and I see in that circumstance quite sufficient evidence of an intention to make a donation mortis causa. Accordingly, I am for answering the first question in the affirmative, and the second question in the negative.

LORD SHAND-I am of the same opinion, and do not consider this to be a case attended with any great difficulty. The settlement of the late Mr Smith was dated 10th March 1875, and in it he made certain provisions for his wife which he considered reasonable, but no mention was made in it of the sum which is the subject of this Special Case.

There was no marriage-contract between the parties, but it appears that Mr Smith took charge of his wife's property, and kept an account of the various sums which she received as the interest both of her heritable and moveable property, and that he entered the sums thus received in an account headed "Mrs James Smith." The question which we have to decide is, whether Mrs Smith has made out that at the date of her husband's death he was debtor to her in the amount standing at her credit in the pass-book? or otherwise, whether the sum is to be viewed as a donation inter virum et uxorem.

Now, the entries in this cash-book show it to have been a carefully kept account, and the sums thus entered appear to have been the interest periodically falling due upon Mrs Smith's heritable and moveable estate. Besides entries under Mrs Smith's name various sums are noted under the names of the different children, and such entries would only be made, I think, as a record of debt. But we have it stated, as part of the facts of the case, that the existence of this cashbook was well known to the different members of the family, and it is a fair supposition, I think, that this information was communicated to them by their father. Had the book been in Mrs Smith's possession the present question would not, I presume, have been raised. What, then, is to be the effect of this book being found in Mr Smith's repositories after his death? The entries in the book, and the heading or note which is prefixed to it, are of importance in considering the question of delivery in a case of this kind. The sums themselves are the fruits of the wife's property, and the book begins with an acknowledgment of debt in these terms-"Note of Sums due by me to Mrs Smith and my family as stated in each of their accounts;" and this is signed by Mr Smith. In such circumstances I do not think that the absence of delivery can affect Mrs Smith's claim. Her husband was undoubtedly the proper custodier of her writs, and taking it that there is no presumption of delivery either on one side or the other, I consider this book to be in the position of a delivered writ which the deceased held for behoof of his wife and family. The note at

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SECOND DIVISION.
[Sheriff of the Lothians.
SCOTT V. ROY.

Process-Sequestration-Bankruptcy (Scotland) Act 1856 (19 and 20 Vict. c. 79), secs. 146 and 170.

Held that an application by a trustee under section 149 of the Bankruptcy Act 1856 to have a portion of a pension enjoyed by the bankrupt taken by the trustee for the purpose of paying the bankrupt's debts must be intimated to the bankrupt.

In March 1884 the estates of James Gibson Scott were sequestrated under the Bankruptcy Act 1856, and W. G. Roy, S. S. C. was appointed trustee. At the time of his sequestration Scott was in receipt of a pension of £46 a-year from the Post, Office.

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The Bankruptcy Act 1856, section 149, enacts that "the . . . Sheriff may order such portion of the. pension of any bankrupt as on communication from the . . . Sheriff to . . . the chief officers of the department to which such bankrupt may belong, or have belonged, they respectively may consent to in writing, to be paid to the trustee in order that the same may be employed in payment of the debts of such bankrupt."

On 7th May 1884 Mr Roy presented a petition in the Sheriff Court at Edinburgh, reciting the 149th section of the Bankruptcy Act and praying the Sheriff to recommend the Postmaster-General to consent to the half or some other proportion of Scott's pension being paid to him as trustee, and on receiving such consent to order such portion to be paid as aforesaid. The petition was not served on the defender, nor was any intimation made to him of the intended procedure under it.

On 8th May the Sheriff-Substitute (HAMILTON) issued an interlocutor recommending to the Postmaster-General to make payment of one-half of the pension as craved

On 2nd June the Surveyor-General of the Post Office wrote to Messrs Richardson & Johnston, W.S., the agents in the sequestration, stating

that the Rostmaster-General would not consent to a deduction from Scott's pension to be paid to his trustee of more than £10 a-year.

On 9th June the Sheriff-Substitute ordered the £10 a-year to be paid to the trustee.

Scott appealed to the Court of Session, and appeared in person in support of his appeal He argued that there having been no service or intimation the procedure was incompetent, and the Sheriff's interlocutors should be recalled.

Replied for the trustee-Neither service nor other intimation was prescribed by the Bankruptcy Act under which the proceedings were taken, and they were quite regular.

At advising

LORD JUSTICE-CLERK-I think the proceedings here are utterly indefensible. There is neither precedent nor authority for a trustee proceeding in this manner where the party is not present, and without service or something equivalent to service on him. And therefore whatever proceedings this trustee may think proper to take in the future, I think we should dismiss this petition and recal all the interlocutors in the Court below.

LORD CRAIGHILL-I am of the same opinion. I think there is no warrant for taking away a man's pension, as has been done here, because he is under sequestration, without any service or intimation to him.

LORD RUTHERFURD CLARK-I am also of the same opinion. The trustee in a sequestration ought to remember, that while he is trustee for the creditors he is at the same time trustee for the bankrupt. And I must add, that I cannot conceive how such procedure as this could have taken place in any Sheriff Court at the instance of any trustee in a sequestration.

LORD YOUNG was absent.

The Court recalled the Sheriff-Substitute's interlocutors and dismissed the petition.

Counsel for Trustee-Nevay. Agents-Richardson & Johnston, W.S.

Tuesday, December 2.

FIRST DIVISION.

[Lord Lee, Ordinary. CONVERY V. THE SUMMERLEE IRON COMPANY.

Mines and Minerals-Lordships-Obligation to Work-Jus tertii.

In 1870 B. let to H. & D. a coal-field extending to 17 acres for twenty-five years from 1866, at a fixed rent of £1500, or, in the lessor's option, a lordship of 1s. 1d. per ton of one kind and 15d. per ton of another kind of coal. B. had already let in 1868 to W. & Co. a larger mineral field adjoining, one portion for twenty-seven years from 1865, the other portion for twenty-six years from 1866, with breaks in the ten

ant's favour in 1871 and every fifth year thereafter. By minute of alteration in 1871 it was provided that there should be yearly breaks in the tenant's favour for the period of six years from 1870 on giving six months' notice. The tenants were taken

In

bound to pay a fixed rent, or in the option of the landlord certain lordships. W. & Co. were taken bound to work the minerals in a regular, systematic, and proper manner. 1871, B., H. & D., and W. & Co. entered into an agreement by which H. & D., with consent of B, renounced their lease of the 17-acre field, and B. let the same to W. & Co. for the period, and (with certain exceptions) subject to the whole terms of the said lease of the adjoining field. The exceptions were, that as the coal was to be worked through pits on W. & Co.'s lands, they were to be at liberty to fill them up, and were not to be bound to leave the roads and connections in good working order. Then followed this clause, but they are nevertheless to be bound to otherwise work out the whole of the coal hereby let in terms of the said lease and minute of alteration." The tenants bound themselves to pay to B. lordships of 10d. per ton of the one kind, and 6d. per ton of the other kind of coal. Of the same date H. & D. and W. & Co. entered into an agreement by which, on the narrative that H. & D. had renounced their lease of the 17-acre field on condition that W. & Co. should pay them certain lordships, W. & Co. bound themselves to make payment to H. & D. of 33d. for each ton of coal output from the said ground. The lordships payable to H. & D. were to be paid at the terms on which the lordships payable to B. fell to be paid, and H. & D. were to have the same power as B. in checking output. In 1884 a person in right of H. & D. raised an action against the successors of W. & Co., to have it declared that under the terms of the two lastmentioned deeds W. & Co. were bound to work out the whole coal prior to the expiry of their lease, or at least to output as large quantities of coal as were capable of being obtained by due diligence. Held that there was no such obligation imposed upon them. By lease dated 13th February 1869 and 18th June 1870, D. C. R. C. Buchanan of Drumpellier let to Henderson & Dimmack, Drumpellier Iron Works, Langloan, a coal-field extending to 17 acres, for twenty-five years from Whitsunday 1866, at the yearly fixed rent of £1500, or in the option of the lessor, a royalty of 1s. 1d. per 224 cwts. for the Pyotshaw main and splint coal, and of 10d. per same quantity of coal raised from the other

seams.

In 1868 Walter Neilson and Hugh Neilson, ironmasters, Summerlee, then carrying on business as Wilsons & Co., had obtained a lease from D. C. R. C. Buchanan of the coal and ironstone in the part of the lands of Drumpellier adjoining the 17acre field just mentioned. One portion was let for twenty-seven years as from Whitsunday 1865, and the other for twenty-six years as from Whitsunday 1866, with breaks in favour of the tenants at Martinmas 1871 and at Martinmas in every fifth year thereafter, upon their giving six months' notice. The tenants were taken bound to pay a

. Summerlee

fixed rent, or in the option of the landlord a lordship of 1s. 1d. for each 22 cwt. of coal raised from the lands, with power to the landlord to check the output. There was also this clause in the lease:-"And the said second parties bind and oblige themselves and their foresaids to work the whole minerals in a regular, systematic, and proper manner, without unnecessary waste of material, either by pillar and room, chain-wall or long-wall system.'

By minute of alteration in 1871 power was given to the tenants (Wilsons & Company) to break the lease at any term of Martinmas during the six years from Martinmas 1871 on giving six months' notice in writing, and that in addition to the breaks stipulated in the lease.

By minute of agreement dated 20th and 23d of November and 1st December 1871, and entered into between D. C. R. C. Buchanan of the first part. Messrs Henderson & Dimmack of the second part, and Walter Neilson and Hugh Neilson, as partners of, and as trustees for behoof of the company (Wilsons & Company), of the third part, on the narrative of the said two leases, and of the agreement of the second party, with consent of the first party, to give over to and in favour of the third parties the 17 acres previously let, the second parties (Henderson & Dimmack) renounced all right and title to the same under their lease, and were declared free of all obligations under the same; and the first party lets the said coal to the third parties for the period, and, except as after mentioned, subject to the whole other terms of their foresaid lease from him and minute of alteration thereon, dated 10th and 28th April 1871." The third article of the agreement was:-"It is hereby conditioned and declared that in their working of said coal the third parties are not to work the coal through a pit on the lands of the first party, but they shall have right to work and raise the said coal through and by means of a pit or pits on their own adjoining lands of Summerlee, and for that purpose to cross the march and make all requisite roads and connections below ground between their pit or pits and the said coal; which pit or pits they shall be at liberty to fill up, and which roads and connections they shall not be bound to leave in good working order, but they are nevertheless to be bound to otherwise work out the whole of the coal hereby let in terms of the said lease and minute of alteration." There was no increase on the fixed rent stipulated in the original lease, but the tenants bound and obliged themselves "to pay to the said David Carrick Robert Carrick Buchanan, and his heirs and successors, the following lordships-to wit, for each ton of twenty-two and one-half hundredweights of the Kiltongue seam of coal, after being freed from dross, as stipulated and expressed in said lease, 10d.; and for each ton of the Virtuewell seam of coal of twenty-two and one-half hundredweights, freed from dross in like like manner, 6d.; and that at the term and in the proportions as conditioned and stipulated in said lease: Also with power to the said David Carrick Robert Carrick Buchanan, or those authorised by him, to enter upon the lands of Summerlee to check the output, with access to the pits and machinery thereon, to examine and survey the coal workings."

By minute of agreement dated 1st December

1871 and 10th January 1872, between Henderson & Dimmack of the first part, and Wilsons & Company of the second part, on the narrative that the first party had renounced their right to the said 17-acre field under their lease on condition that the second party should pay them certain lordships :-"The second party hereby agree, and bind themselves and their said firm, and the funds and estate, and the partners, future as well as present thereof, to make payment to the said Henderson & Dimmack, and the partners present and future of that firm, and to their assignees, of the sum of 34d. for each ton of twenty-two and one-half hundredweight of coal output from the said ground by the second party, or those deriving right from them, under and in virtue of said agreement, screened in the usual way, and that at the terms on which the lordships payable to the said David Carrick Robert Carrick Buchanan fall to be paid, the first party having the same powers of checking output which shall belong to the said David Carrick Robert Carrick Buchanan.'

The estates of Messrs Henderson & Dimmack were sequestrated, and by deed of assignation dated 9th and 10th May 1883, Mr Robert Blyth, C.A., Glasgow, the trustee thereon, assigned to David Ker Convery, land surveyor, Cuthil siding, Blackburn, all right, title, and interest competent to Messrs Henderson & Dimmack under the said deeds.

This action was raised in 1884 by Convery, as Henderson & Dimmack's assignee, against the Summerlee Iron Company, the successors of Wilsons & Company, to have it found and declared that under and in virtue of the foresaid minutes of agreement "the defenders were and are bound and obliged to work out All and Whole the workable seams of coal contained in the part of the lands of Drumpellier, consisting of 17 acres 2 poles or thereby, let by the lease first above mentioned, and assigned by the first abovementioned minute of agreement, and that prior to the term of Whitsunday 1891, or other term of expiry fixed by the lease granted by the said David C. R. C. Buchanan to the said Walter and Hugh Neilson, dated on or about 11th August and 16th October 1868, with minute of alteration thereon, dated on or about 10th and 28th April 1871, and referred to in the second above-mentioned minute of agreement, and also to work the same as from 10th January 1872 onwards until the term of expiry foresaid, continuously and without interruption, or at least in a due and systematic course of working, without unnecessary waste of material, on some approved system of working, and according to the terms contained in the foresaid lease dated on or about 11th August and 16th October 1868, and minute of alteration thereon; and to output as large quantities of coal as are capable of being obtained therefrom by due diligence and exertion, according to the methods and practice of working prescribed by the said last-mentioned lease (so that the whole of the said seams may be worked out prior to the said term of expiry)." There were also conclusions for accounting.

The defenders averred and pleaded (1) that they had already fully accounted for all lordship due to the pursuer and his authors; (2) that they were under no obligation to the pursuer to work the whole coal in the lands in question.

The Lord Ordinary (LEE) assoilzied the defenders, except from the conclusions for accounting, with regard to which he allowed them a proof of their averments as to settlement and discharge.

"Opinion. By the minute of agreement founded on by the pursuer in Cond. 3, the coal leased by the pursuer's authors, Messrs Henderson & Dimmack, was given over by them (with consent of the proprietor) in favour of Wilsons & Company (the authors of the defenders), and a new lease was granted by the proprietor to Wilsons & Company 'for the period, and, except as after mentioned, subject to the whole other terms of their foresaid lease from him, and minute of alteration thereon, dated 10th and 28th April 1871.' The lease thus referred to related to certain coal and ironstone adjoining, which was held by Wilsons & Company from the same proprietor; and it was agreed between them and the proprietor that this lease to Wilsons & Company, as modified by the minute of alteration, should be held as embracing from its commencement the coal which was included in Henderson & Dimmack's lease, and which was given up by them.

"By the agreement set forth in Cond. 4, Wilsons & Company, on a narrative that such was a condition of the renunciation of Henderson & Dimmack's lease, bound themselves to pay to Henderson & Dimmack a lordship of 3d. per ton of coal output from the ground so acquired, payable at the terms on which the lordships payable to the lessor fell to be paid; and they agreed that Henderson & Dimmack should have the same powers of checking output as the les

sor.

"In this action the pursuer, as assignee of the trustee upon the sequestrated estates of Henderson & Dimmack, not only demands an accounting by the Summerlee Coal Company, as Henderson & Dimmack's successors, for all coal output by them (a demand which is met by the allegation of discharge in answer 6), but also asserts a right to have the Summerlee Coal Company ordained to work out the whole coal included in Henderson & Dimmack's lease prior to Whitsunday 1891, and to pay the 34d. lordship thereon, or otherwise to pay damages to him for not working out the coal in terms of their alleged obligation.

"With regard to the claim of accounting, it was conceded by the defenders that unless they should substantiate their allegation of settlement and discharge, such accounting must take place. Inquiry therefore is necessary as to this point; and I have allowed the defenders a proof of their allegations.

But the other branch of the pursuer's claim is disputed, as altogether unsupported by the agreements libelled.

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The first plea-in-law for the defenders [no title or interest] was not maintained before me; and I am satisfied that, in a question between them and Wilsons & Company, arising under the agreement set forth in Condescendence 4, the pursuer, as Henderson & Dimmack's successor, must be held to have all the rights which that agreement imports, including a right to enforce an obligation to exhaust the coal, if such right belongs to the lessor by the terms of the original lease and minute of alteration thereon.

But it was contended for the defenders that the pursuer could have no higher right than the

lessor, and that the lessees were under no obligation to him to work out the whole coal.

"I am of opinion that this contention is well founded. It appears from the lease that there was no obligation laid upon the tenants to exhaust the coal. They were bound, so long as they held the lease, to work the coal systematically, according to one or other of the methods specified; but the fact that there was a break every five years in the tenant's favour, and that they were taken bound to leave the whole pits, levels, and workings in good working order at the termination of the lease, is inconsistent with the existence of an obligation to work out the whole coal.

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Moreover, it must be observed that before the date of the agreement founded on by the pursuer there had been an important alteration in the terms of the lease. The minute of alteration of 10th and 28th April 1871 (referred to in the agreement), empowered the tenants to give up the lease at any term of Martinmas, on giving six months' notice. Of course, this in no way prejudices any claim the pursuer has to the 3d. lordship upon output, so long as the tenants continue to hold the lease. Nor would it prejudice a claim founded upon the allegation (had there been such) that the workings had been stopped collusively, or for the purpose of defeating the claims arising under Henderson & Dimmack's agreement with Wilsons & Company. But in the absence of any case of that kind, I think that the power of throwing up the lease shows that no obligation to work out the whole coal was in contemplation of the parties. Even the landlord himself had no right to compel the tenant to work out the coal, or even to go on working for more than a year, if the tenant chose to throw up the lease.

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The true view, in my opinion, is, that the lessees were bound to work the coal fairly and honestly, in terms of their obligation to the lessor, and that Henderson & Dimmack stipulated for nothing more than a 3d. lordship upon the coal so output. Had they wished to stipulate for more they would not have rested content with a lordship upon output and a power of checking output the same as the landlords. They would have made it clear that whatever the landlord might do, no discontinuance of working should take place without their consent. In the absence of any stipulation to that effect, and of any allegation of mala fides in the discontinuance of the workings, I think that the pursuer has failed to show any sufficient ground for his claim to have the defenders ordained to go on working out the coal or to pay damages for not working it out. In my opinion, it must be presumed that the discontinuance of the workings, not having been objected to by the lessor, arose from reasonably sufficient causes, and from no breach of any obligation in the lease which could have been enforced.

"I therefore assoilzie the defenders from the conclusions of the action so far as regards this claim."

The pursuer reclaimed, and argued that under the express terms of the third head of the tripartite agreement the landlord could force the tenants to work continuously, and that he was in a position to enforce all that the landlord could. Moreover, the defenders were bound to work

. Summerlee

reasonably, for when payment by fruits is stipulated there is also involved an obligation to produce fruits-M'Intyre v. Belcher, 32 L.J., Č.P. 254; Kinsman v. Jackson, January 30, 1880, 42 Law Times, 80; Stirling v. Maitland and Another, 34 L.J., Q. B. 1; Addison on Contracts (7th ed.), 243; MacSwinney on Mines, 209. Even if the conclusion that the whole was to be worked out by 1892 were to be rejected, still he would be entitled to decree in terms of the lesser conclusion, omitting the words 'so that the whole of the seams may be worked out prior to the said term of expiry.'

The defenders replied, that in order to grant decree in terms of the declaratory conclusions of the summons it would be necessary to hold that the defenders would be bound to work out the coal, whether the working was profitable or not. It would also be necessary to hold that they were bound to work irrespective of the breaks expressly stipulated in the lease. The case of Goicans v. Christie, Feb. 8, 1871, 9 Macph. 485, was conclusive on the point that where the minerals were not workable to profit the tenant was only bound to go on until there was a break in his lease.

At advising

LORD MURE-This case is somewhat complicated at first sight, from the variety of documents produced, but after hearing the argument which has been submitted, I am clearly of opinion that the Lord Ordinary is right.

The circumstances out of which the action arises are shortly these. About the year 1868 Buchanan of Drumpellier let certain seams of coal to the defenders' authors, under stipulations as to the mode in which the workings were to be carried on. This lease was to last until the year 1892. Shortly afterwards a smaller part of the same coalfield, consisting of about 17 acres, was let to the pursuers or their authors.

This part

was let to Henderson & Dimmack for twenty-five years, which would make it of about the same duration as the earlier lease, and the fixed rent was £1500, or, in the option of the lessor, a royalty of 1s. 1d. per 224 cwt. for one kind of coal, and 10d. for coal raised from other seams. It is to be observed that this lordship is the same as that stipulated for in the lease by Buchanan to the defenders in 1868. Then after that lease there was an agreement between Buchanan, the pursuer, and the defenders, under which Buchanan allowed the present pursuer's authors to renounce their lease of the 17 acres, and at the same time agreed to let them to the present defenders on the same terms as he had already let the larger portion in 1868. This is distinctly set out in Cond. 3, which distinctly states that "The second parties [Henderson & Dimmack] renounced all right and title to the same under their lease, and were declared free of all obligations thereunder with respect to the same; and the first party let to the third parties the said coal for the period, and subject generally to the terms of said third parties' lease, with minute of alterations thereon, as if the said coal had been originally embraced therein; and the third parties became bound to work out the whole of their coals so let in terms of their said lease with minute of alteration, and to pay certain lordships to the said first party."

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This statement is not disputed. Now, in the minute of agreement, executed in 1871 and 1872 by the pursuer and the defenders, there is a provision that the defenders are to pay the pursuer a lordship of so much per ton for the coal output from the 17-acre field. The minute sets forth that the pursuer had given up and renounced the lease on condition that the defenders should pay certain lordships, and that therefore, "The second party hereby agree, and bind themselves and their said firm, and the funds and estate, and the partners, future as well as present thereof, to make payment to the said Henderson & Dimmack, and the partners present and future of that firm, and to their assignees, of the sum of 3 d. for each ton of twenty-two and one-half hundredweight of coal output from the said ground by the second party, or those deriving right from them, under and in virtue of said agreement, screened in the usual way, and that at the terms on which the lordships payable to the said David Carrick Robert Carrick Buchanan fall to be paid, the first party having the same powers of checking output which shall belong to the said David Carrick Robert Carrick Buchanan."

That being the nature of the agreement, the defenders worked coal out of the 17-acre field during the period from 1872 until 1879, and paid certain sums to the pursuer, which according to his view are not so much as he was entitled to, and hence the conclusions for accounting in the summons. This working, however, came to an end in 1879, after various communications between the pursuer and the defenders, in which the former urged the latter to go on, and then the present action was brought, the conclusions of which are as follow-[His Lordship here read the conclusions above quoted]. These conclusions are in the broadest terms, and seek to have it declared that the defenders are under an obligation to work out the whole coal in the 17-acre field.

The question is, whether there is in the agreements founded on any such obligation?

I think it was not very seriously disputed by the pursuer that if the obligation stood upon the terms of the agreement between the three parties, its clauses could scarcely be made to substantiate his claim. The third clause is in these terms"It is hereby conditioned and declared that in their working of said coal the third parties are not to work the coal through a pit on the lands of the first party, but they shall have right to work and raise the said coal through and by means of a pit or pits on their own adjoining lands of Summerlee, and for that purpose to cross the march and make all requisite roads and connections below ground between their pit or pits and the said coal; which pit or pits they shall be at liberty to fill up, and which roads and connections they shall not be bound to leave in good working order, but they are nevertheless to be bound to otherwise work out the whole of the coal hereby let in terms of the said lease and minute of alteration." That is a stipulation that the defenders are not to break ground on Buchanan's property, but that in working the coal in the 17-acre field they are to work it in connection with the larger field, and in the manner specified in the earlier lease and minute of alteration.

By the terms of that lease the defenders were taken bound to work the whole minerals in a

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