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4. Proof of be proved, though it became due before the issuing of the commission." This statute contains the following recital and enactments :—
"Whereas merchants and other traders in goods have been very often "obliged, and more especially of late years, to sell or dispose of "their goods and merchandizes to such persons as have occasion for "the same, upon trust or credit, and to take bills, bonds, promissory "notes, or other personal securities for their moneys, payable at the "end of three, four, or six months, or other future days of payment; "and the buyers of such goods becoming bankrupts, and commissions "of bankruptcy being taken out against them, before the money upon "such bonds, notes, or other securities became payable, it hath been "a question whether such persons, giving such credit on such secu"rities, should be let in to prove their debts, or be admitted to have "any dividend, or other benefit by the commission, before such time "as such securities became payable, which hath been a great dis"couragement to trade, and great prejudice to credit within this "realm;" for remedy whereof, it is enacted, "That all and every " person and persons, who have given credit, or at any time or times hereafter, shall give credit on such securities as aforesaid, to any per"son or persons, who is, are, or shall become bankrupts, upon a good "and valuable consideration, bona fide, for any sum or sums of mo"ney, or other matter or thing whatsoever, which is or shall not "be due or payable at or before the time of such person's becoming bankrupt, shall be admitted to prove his, her, and their several and "respective bills, bonds, notes, or other securities, promise, or agreements for the same, in like manner as if they were made "payable presently, and not at a future day; and shall be entitled "unto, and shall have and receive a proportionable part, share, and "dividend of such bankrupt's estate, în proportion to the other credi"tors of such bankrupt, deducting only thereout a rebate of interest, "and discounting such securities, payable at future times, after the "rate of five pounds per centum per annum, for what he shall so re"ceive, to be computed from the actual payment thereof, to the time "such debt, duty, or sum of money, should or would have become due "and payable, in and by such securities as aforesaid." In the second section it is enacted, "That all and every person or persons, who now "are, or shall become bankrupts, shall be discharged of and from all "and every such bond, note, or other security as aforesaid, and shall "have the benefit of the several statutes now in force against bank"rupts in like manner, to all intents and purposes, as if such sum of "money had been due and payable before the time of his becoming a "bankrupt."
The subsequent statute, 5 Geo. 2. c. 30. s. 22., is considered as a legislative construction of the 7 Geo. 1. c. 31. and to confine that statute to written securities. t But it is provided by the 49 Geo. S. c. 121. s. 9. "That all persons who have given credit to any person "who shall become bankrupt, upon good and valuable consideration "for any money whatever, which shall not be due or payable at or "before the time of such person's becoming bankrupt, shall be admit❝ted to prove such their debts, as if the same were payable presently,
Barnford v. Burrell, 2 Bos. & Pul. I.
is a mistake, see 5 Geo. 2. c. 30. s. 22.
Hoskins v. Duperoy, 9 East, 503; and Parslow v. Dearlove, 4 East, 438. These cases settle the point doubted in Cullen, 74, and 1 Mont. 45.
"or not at a future day; and shall be entitled to, and shall have and 4. Proof of "receive proportional dividends, equally with the other creditors, de"ducting in England, £5 per cent., and in Ireland, £6 per cent. inte"rest, to be computed from the actual payment, to the time such debts "would become payable, according to the terms upon which the same "were contracted."
Upon these statutes, the proof of a bill of exchange under a commis-[ 438 ] sion, may be considered under the following heads :
1st, What bill, note, &c. may be proved.
2d, Who may prove.
3d, Against whom, or under what commission.
4th, For what sums, or to what extent, the proof may be made. 5th, The time of proof, and of claims.
6th, The mode and terms of proof, and remedy for the dividend. 7th, The consequence of not proving, and effect of certificate.
1st, What bills are proveable.
From the judgment of Lord Eldon, in the case Ex parte Dewdney," 1st. What it may be collected, that wherever a bill of exchange, or other nego- bills provetiable security, would be valid at law, so as to support an action, it able. may be proved under a commission; and, on the other hand, it appears to be a general rule, that a bill, not available at law or in equity, cannot be proved under a commission. A bill founded upon a usurious, gaming, or other consideration, rendering it void by some statute, cannot be proved, even by a bona fide holder: and whenever the holder himself has received the bill upon any illegal contract, he cannot, in general, prove such bill in respect of such consideration ; and the assignees and creditors have a right to insist, that the whole security is void, and unless they submit to pay what is really due, the court cannot order it, and frequent applications of that sort have been refused."
In Ex parte Bulmer, where promissory notes, given by a stockbroker for the balance of an account of money advanced to him to be employed in stock-jobbing transactions, contrary to the Stock Jobbing Act, and part of the consideration consisted of the profits upon those transactions, and the residue for money received, which he had applied to his own use, Lord Erskine would not permit the petitioner to prove the promissory notes as binding obligations, as the consideration for them was made up, though in a very small part, of the fruit of the illegal use of the money lodged with the bankrupt, but allowed the petitioner to prove the sum applied by the bankrupt to his own use, as money had and received.
Where the consideration of the bill consisted of two parts, one bad [ 439 ] and the other good, and no statute declares that the bill, under such circumstances, shall be absolutely void, the rule in equity, as well as in
Ex parte Dewdney, 15 Ves. 495. Ex parte Mumford, 15 Ves. 289, and Bayl.
* Ex parte Skip, 2 Ves. jun. 489. Ex parte Mather, 3 Ves. 373. Ex parte Mog- 2 ridge, Cooke, 233.
y Ante, 68 to 89, as to illegality of con-
Per Ld. Hardwicke, in Ex parte Skip,
a 13 Ves. 313 and 320.
1st What bankruptcy, is, that the security shall avail as to what was good. And, bills prove-therefore, where a broker, having been employed to effect some insurances, one of which was illegal, (being on a voyage from Ostend to the East Indies,) the principal, in consideration of the money laid out in effecting them, indorsed to him a bill drawn by himself, and payable to his own order, upon, and accepted by a person, who afterwards became a bankrupt; the broker (the indorsee) was not allowed to prove under the commission issued against the acceptor, in respect of such part of the debt as arose on the illegal insurance; but it was held, he might prove for the rest on the bill itself. Where there has been an antecedent legal debt, and a bill is afterwards taken, but which turns out to be invalid, on account of usury, or otherwise, the demand for the antecedent date may be resorted to and proved.c
In regard to the form of the bill, or the mode of acceptance, or transfer, the same objections which would in general preclude the holder of a bill from suing at law, would equally prevent him from proving under a commission. A bill or note, payable at a certain time, or on demand, is proveable, though the demand be not made till after the act of bankruptcy. Thus, if a bill or note be payable on a contingency, it cannot be proved. So with regard to the acceptance, it must be of such a nature, that the party might have supported an action. We have seen, that in the case of Ex parte Dyer, it was held, that a letter, undertaking to accept bills already drawn, is an acceptance, and that the bills may be proved as accepted. The indorsement also is governed by the same rules in bankruptcy, as in an action, and therefore, in re Barrington v. Burton, where B. handed over a negotiated note, for valuable consideration, to G., not indorsing it, but giving a written acknowledgment on a separate paper, to be accountable for the note to G., and G. inordsed the note, which, together with the written acknowledgment, came into the hands of M. for a valuable consideration, and B, and the several parties to the note, became bankrupts, it was [440 ] held that M. could not prove the note against the estate of B., the written acknowledgment not being assignable, but was entitled to have the amount made an item in the account between B. and G. and to stand in the place of the latter. So a written undertaking, guaranteeing the payment of a note of a third person, not due at the time of the act of bankruptcy, is not a debt proveable.
Bills made payable to fictitious payees may be proved by the indorsees for a valuable consideration against the acceptor, or any party who knew at the time that the payee was a fictitious person. And where a party, who has become bankrupt, has transferred a bill, but has by mistake omitted to indorse it, he or his assignees may be
Ex parte Mather, 3 Ves. 373. Cul- Lef. 112. 1 Mont. 127, n. c. Instances len, 89. 1 Mont. 115. of contingences, see ante, 42 to 50.
Ex parte Blackburne, 10 Ves. 206. Farrell v. Shaen and others, 1 Saund. 295. 3 Campb, 119. 2 Taunt. 184.
* 6 Ves. 9. Ante, 176.
8 2 Sh. & Lef. 112. And see Ex parte Harrison, 2 Bro. 615. Cook's 209 Ante, 145. Cullen, 100, 111. 1 Mont
Ex parte Beaufoy, Co. Bank. Law, 142, 149, 150.
Ex parte Adney, Cowp. 460. Ex
'Ex parte Adney, Cowp. 460.
* Bennett v. Farnell, 1 Campb. 190. 130. Ante, 65, in note. Ex parte Clarke, 3 Bro. 238. and Ex parte Allen, Cooke's B. L. 172. 1 Mont. 145.
compelled to indorse, so as to enable the holder to prove. A bill 1st. What which has been lost before or after it it due, may be proved, upon the bills proveparties giving a sufficient indemnity to the satisfaction of the commissioners. But wherever the holder of a bill has been guilty of such laches or conduct, as would discharge the party at law, supposing he had continued solvent, they will equally preclude the holder from proving under a commission against him. And where the remedy on the bill may have been extinguished at law or in equity by the Statute of Limitations, the holder will not be allowed to prove under a commission."
Where a bill has been paid or considered as cancelled or settled by another bill, it cannot be proved. But bills in lieu of which other bills are given, if permitted to remain with the holder, may be proved in the event of the latter bills not being paid."
2dly, Who may prove.
With respect to the person who may prove a bill, we will consider 2d. Who first, the proof by a person, who being the holder, gave value for it at may prove. the time it became so: and secondly, the proof by a person who did not originally give value for the bill, but has since been compelled to pay it.
First, The bona fide holder of a bill or note, made originally for a 441 ] valuable consideration, may prove for the whole sum contained in it, either against the acceptor, the drawer, or indorsers, whether the bill was due or not at the time of the act of bankruptcy ; but he must be holder for his own use, not as trustee for another, indebted to the estate. And when a bill or note is drawn before, but indorsed after the secret act of bankruptcy of the acceptor to another person, the indorsee, though he cannot set off the amount of the sum payable to any demand on him by the assignees, because the statute 5 Geo. 2. c. 30. relates only to mutual debts due before the bankruptcy; yet he may be a petitioning creditor for the amount, or prove it under the commission, because he stands in the place of the person from whom he received the instrument; and the debt is not created by the indorsement, but by the acceptance of the bill, or making of the note; nor will the circumstance of a note being indorsed after it was due make any difference." And if an indorser or drawer of a bill for a valuable consideration, take up and pay the whole bill, after the bankruptcy of the acceptor, or of any
Ex parte Greening, 13 Ves. 206. Ante, 116. Cullen, 100, 111. 1 Mont. 142. Smith v. Pickering, Peake's Rep. 50. 3 Bos. & Pul. 40.
Ex parte Greenway, 6 Ves. 812. See further as to lost bills, ante, 147 to 157.
"Ex parte Wilson, 11 Ves. 410. Ante, 196. 435. Cullen, 99, 100. Cooke, 167, 8, 9.
• Ex parte Dewdney, 15 Ves. 479. Ante, 435.
P Ex parte Barclay, 7 Ves. 597.
v. Barnes, 7 East, 435.
Fair v. M'Iver, 16 East, 139, 140.
Cooke, 567. Marsh v. Chambers, 2
Ex parte Brymer, Cooke, 164. 5.-
2d. Who other party liable to him on the bill, and the bill has not been proved may prove by some previous holder, under the commission against such acceptor
or other party, such indorser or drawer is entitled to prove it under the commission against the acceptor or such other party; and it has even been decided, that where the bankrupt had accepted a bill for the accommodation of the drawer, and the indorser had indorsed the bill also for the accommodation of such drawer, and had paid it after the bankruptcy, he might prove it under the commission against such acceptor. So, in the case Ex parte Hale, it was decided, that the acceptor becom ing bankrupt, and the petitioner, having indorsed it before the bankruptcy, took up the bill, he might prove, though he could not set off a debt due from him to the estate. And it has been decided, that if an [442 ]acceptor for the honour of the drawer, after the bankruptcy of the original acceptor, pay the bill, he may prove it under the commission against such original acceptor. But this doctrine was over-ruled in the case Ex parte Lambert, in which it was decided, that such acceptor supra protest, cannot prove under the commission against the original acceptor, where the latter had received no consideration from the drawer.
If the holder of a bill prove it, and receive dividends under the commission against the acceptor, and also under a commission against another party, the assignees of the latter cannot prove under the commission against the acceptor the amount of the dividends so paid by them. Upon this point all the Judges agreed, in the case of Cowley v. Dunlop, for the same debt cannot be proved twice under the same commission, and there is no hardship upon the indorser, whose estate has also been compelled to pay a dividend, because it cannot exceed the deficiency of the amount of the bill, beyond the dividend paid by the acceptor, and such deficiency would be the very sum which the indorser would have lost, had he been the holder of the bill.
With respect to an accommodation bill, or a bill where one of the parties may have subscribed his name without having received any value, many difficulties very frequently arise as to the right of the parties to prove. A party who has bona fide given a valuable consideration for such bill, we have seen, is not affected by the want of consideration between other parties, and consequently may prove under a commission against such other parties. But a party who has not given value for the bill, but has, since the act of bankruptcy been obliged to take it up, frequently stands in a different situation, and in many cases has been considered as unable to prove under the commission, on the ground that he is not clothed with the rights of the bona fide holder, nor can justly swear that the bankrupt was indebted to him at the time of his bankruptcy. The rules upon this subject may be arranged under the following heads: