of proof, and in execution for the other. But an entire demand can- 6thly. The mode not be split, and if there be a demand upon several terms on which notes or securities given in respect of the same transaction, it seems that the creditor cannot adopt these law, and proving double remedies'." admitted. Proceeding at also. punging proof. It sometimes happens, after a creditor has made his Reducing and ex proof, that, either from a disclosure of facts not before known or understood, it appears that it ought not to have been admitted, or at least not to the extent; or that, from a change of circumstances, the state of the . debt proved is materially altered: and, in such cases, it becomes necessary either to reduce the proof, or to expunge it altogether. Thus if any bills, proved and accepted as securities by a creditor who discounted them for the bankrupt, or took them as a security for a general balance, are afterwards paid in full, or in any way fully satisfied, the amount of each bill must be deducted from the proof, and the future dividends only paid on the residue of the debt. So if the holder of a bill compound with the prior names upon it, without the previous assent of the assignees of the subsequent parties, the latter are discharged; and if he takes such composition after having proved under the commission against the latter, the amount of the bill must be deducted from the proof. But as the prin ciple of these decisions is the same as that which precludes a party from recovering at law, and we have seen that, at law, that the holder does not discharge a prior party to a bill by compounding with a subsequent one, even though the former was known to be an accommodation acceptor 5, so in the case of bankruptcy, compounding with a subsequent party will not affect the right to the dividends under a commission against 14 Ves. jun. 588. * Cullen, 158—1 Mont. 545. 3 Ex parte Smith-Ex parte Bloxham.-Ex parte Wallace.—Ex parte Cropley, Cooke, 155, 156. + Ex parte Smith, 3 Bro. 1.-Cooke, 168, 9.; and Ex parte Smith and others, Cooke, 171.—Cullen, 159.-1 Mont. 546.—Ante, 585,6,7, Ante, 380, 1, 2, 3. of proof, and terms on which admitted. Reducing and expunging proof. 6thly The mode a prior one, because the estate of the latter had no claim upon that of the former, and therefore could not be prejudiced by the arrangement. It was on this ground held, in the case of Ex parte Giffard', that if a promissory note be made by one principal and three sureties, two of whom, and the principal, become bankrupts, and the holder of the note prove his whole debt under each commission, and afterwards receive a composition of 4s. in the pound from the remaining surety, the receipt for which is expressed to be for £191, and two notes, which, when duly paid, will be in full of the said debt and all other demands; and the dividend paid by the estate of the principal is 4s. in the pound, and by the bankrupt sureties is 58. in the pound; no part of the proof under the commission against the bankrupt sureties must be expunged. The commissioners cannot expunge a debt without an order upon petition'. Restoring proof. Benefit of another's proof. We have seen that in some cases, where the proof has been expunged, it may be restored, in order that the party himself, or some third person, may have the benefit of the original proof, and receive dividends which would not otherwise be recoverable3. Where, between the time of proving his debt and of applying for a dividend under a commission against a principal debtor, as acceptor of a bill, maker of a note, or prior indorser, who ultimately ought to pay it, the holder has received from a surety or subsequent indorser, or of an accommodation acceptor, the whole of his debt, such party, thus standing in the situation of a surety, is entitled to the benefit of the proof made by the creditor; and he must receive the dividends as trustee for the surety, provided the creditor '6 Ves. jun. 805.; see also Williams v. Walsby, 4 Esp. Rep. 220. Ex parte Nixon, 4 Mont. 34. 3 Ex parte Matthews, 6 Ves. jun. 285.—Cooke, 154. Ante, 576, &c.-Ex parte Ryswicke, 2 P. Wms. 89. — Cooke, be not thereby prejudiced in respect of any other claim 6thly. The mode upon the estate. of proof, and terms on which admitted. If a person, having a demand upon a country firm, Benefit of anowho have dealings with a house in London, obtain ther's proof. permission from the country firm for one of his creditors to draw upon the London house, and the country firm and the London house became bankrupts, and the drawer, after proving under the commission against the London house, receive payment from his original debtor, that is, the person having a demand upon the country firm, such person is entitled to the benefit of the drawer's proof against the London house, if he have not proved the debt under the commission against the country firm, but if he has, it seems he is not entitled. If a banker pay, after notice of an act of bankruptcy committed by his customer, the drafts of a customer, in favour of a creditor whose debt would have been proveable under the commission, the banker is not entitled to stand in the place in which the creditor would have stood had his debt not been paid, and as so standing to receive a dividend rateably with the other creditors 3. cover dividend. Formerly, when a dividend of the bankrupt's estate Remedy to rehad been declared by the commissioners, an action might be maintained against the assignees by a party who had proved a bill, for his share of the dividend; and in such action the proceedings, before the commissioners, were conclusive evidence of the debt, nor were the assignees suffered to set off any debt from the plaintiff to the bankrupt. But it was enacted, by the 49 Geo. 3. c. 121. s. 12. that "no action shall be brought against the assignee for dividends, but on petition to the Chancellor to pay the same with in 154. Ante, 578.-Ex parte Turner, 3 Ves. jun 243.-Cooke, 153, 2 Ex parte Matthews, 6 Ves. jun. 285. 3 Hankey v. Vernon, 3 Bro. 313. Brown v. Bullen, Dougl, 407.; and Ex parte Leers, 6 Ves. jun. 6thly. The mode terest and costs, when the justice of the case shall re of proof, and terms on which admitted. 7thly. Effect of certificate. quire it." Seventhly. The Consequence of not proving, and It may be laid down as a clear and established principle, that the discharge of the bankrupt should be commensurate and co-extensive with the relief to the creditor, and consequently that all debts shall be discharged by the certificate that either have been, or that might have been, proved under the commission'; and, on the other hand, the bankrupt's remaining still liable, and the creditor's not being able to prove his debt under the commission, are convertible terms'. The various instances in which bills and notes may be proved have been considered. The Statutes which enable the holder of a bill to prove in particular cases, contain a clause, that in cases where the holder could avail himself of the proof, the certificate shall protect the bankrupt from all further responsibility; and the Statute 49 Geo. 3. c. 121. s. 8. having enabled sureties to prove in various instances where he has been compelled to pay the bill or note after the issuing of the commission has greatly enlarged the effect of the certificate. There are, however, still some cases relating to bills and notes, in which the certificate will not be a bar to any future action. Thus, if the bill or note were drawn and payable in England, and the cause of action accrue here, a certificate abroad will not be any bar to an action in this country, although at the time of making the contract the bankrupt resided abroad, in the country where he afterwards obtained his certificate 3. But where the cause of action 'Ex parte Groom, 1 Atk. 119.-Chilton v. Wiffin, 3 Wils. 13. Per Lord Kenyon in Cowley v. Dunlop, 7T. R. 565. and see 49 Geo. 3. c. 121. s. 14. and 1 Rose, 204. 3 Quin v. Keefe, 2 Hen. Bla. 553.-Pedder v. Macmaster, 8 T. R. 609.-Smith v Buchannan, 1 East. 6.; but see Burrows v. Jemmino, 2 Stra. 733. certificate. accrues abroad, a certificate in the country where the 7thly. Effect of cause accrued, is a bar to any action in this country'. And if a bill of exchange, drawn in Ireland upon a person resident in Ireland, be accepted, and the acceptor become a bankrupt in Ireland, and there obtain his certificate, and afterwards be proceeded against in this country upon the bill, the court will order an exoneretur to be entered on the bail piece, on the ground, that as the debt was contracted in Ireland where the commission issued, it was discharged by the certificate. And if a person draw a bill in America in favour of a firm in America, who have also a house in London, upon a person residing in London, and the bill be refused acceptance, and notice of refusal is given to the drawer in America, and the drawer afterwards become a bankrupt and obtained his certificate in America, it is a bar in this country to any action against the drawer3. The general rule of law is, that debitum et contractus sunt nullius loci, and that the payment of a debt, wherever it may have been contracted, may be enforced in any country; and consequently, whenever a creditor might prove under a commission abroad, it should seem, on principle, that a certificate should be a bar to every debt wherever it was contracted. But, on the other hand, great inconveniencies might ensue from fraudulent certificates in remote countries being obtained before a creditor here could be apprized of the proceeding, and therefore unless the contract was made, or at least in some measure connected with the foreign country, he should not be prejudiced by such certificate. When a certificate abroad operates as a discharge in this country, it seems that the extent of the discharge will depend upon the law of the country where the certificate is obtained 4. Potter v. Brown, 5 East. 124. 2 Ballantine v. Golding, Cooke, 115, 3 Potter v. Brown, 5 East. 174. 4 Ex parte Burton, 1 Atk. 255.-1 Mont. 662. |