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drawer, and he after a dividend arrested the bankrupt for the balance, 2d. Who and was also a surety for him on another bill; the Chancellor made an may prove. order, that the bankrupt should be discharged, and that the plaintiff 5. When should be restrained from lodging any detainer under the above statute 49 Geo. 3. c. 121. s. 8. & 14.

A partner is considered as a person liable for the joint debt of himself and his co-partners, and if the latter becomes a bankrupt, and the solvent partner be afterwards obliged to pay the whole debt, the certificate of the bankrupt partner will protect him from liability to make contribution to such solvent partner; and therefore where a partner continuing the business took an assignment of all the stock, &c. and covenanted to indemnify the retiring partner from the debts then owing from the partnership, and the continuing partner became a bankrupt. and obtained his certificate, and subsequently an action was commenced against the retiring partner upon an acceptance of the partnership, and judgment was obtained against him, and he paid the debts and costs; it was held, that no action would lie against the bankrupt upon the covenant; since, under the 49 Geo. 3. c. 121. s. 8, the retiring partner might on his liability have resorted to, and proved his debt under the commission, and was therefore barred by the certificate."

But there are not any words in the stat. 49 Geo. 3. c. 121. s. 8, compulsory upon the party to prove, or precluding him from suing the bankrupt, subject to such action being rendered ineffectual by his obtaining his certificate, and therefore the drawer of a bill who has paid the amount to the holder, after a commission of bankruptcy issued against the acceptor, may sue the acceptor before he has obtained his certificate, and arrest him upon the bill, notwithstanding the holder has proved the bill under the commission.

Thirdly, against whom, or under what Commission.

surety may
der 49 Geo.

3. c. 121.


3dly. Against

3dly, We have next to inquire against whom, or under what commission, proof in respect of a bill may be made. And this may be considered under two heads; first with relation to the particular whom, and situation of the party who has become bankrupt; and secondly, to the number of the parties.

under what commission

First, A party who is a bona fide holder of a bill, drawn regularly for value, is, we have seen, entitled to prove in all cases under a commission against any one of the parties, against whom he could have [ 457 ] supported an action on the bill, though such party became bankrupt before the bill was due, and at the time when it was uncertain whether it would be paid by the acceptor. So a bill drawn by way of accommodation, though it cannot be proved, as between the parties to the accommodation, yet it may be proved by a bona fide holder against all parties, whether they have received value or not. Wherever the holder could have sustained an action on the bill against the party, had he

Ex parte Lobbon, 17 Ves. 334, 5.— 1 Rose, 219.

Wood v. Dodgson, 2 M. &. S. 195.

2 Rose, 47.

d Mead v. Braham, 3 M. & S. 91.

Ante, 443. Ex parte Marlar, 1 Atk. 150. Cullen, 96.

Ex parte Marshall, 1 Atk. 130. Ex parte King, Cooke, 157. Ex parte, Crossley, Cooke, 158. Ex parte Brymer, Cooke, 164. Cullen, 97. 1 Mont. 152.

under what

3dly continued solvent, he may prove under his commission, in case he Against should become bankrupt. The rights and liabilities of parties at law, whom, and have already been considered, and therefore it is unnecessary here again commission to notice the various decisions on the subject. In the case of cross paper, and of a bill or note given by way of indemnity, we have seen that a party may frequently prove, before he has advanced money, or been damnified, though the dividends will be withheld till his own paper has been paid.s We have already considered the liability at law of a party transferring a bill, and we have seen, that in the case of a transfer by mere delivery, without an indorsement, the party is not in any case liable to be sued by any holder, except the party to whom he immediately transferred it, and then not upon the instrument itself, but for the precedent debt or consideration between them; and that in the case of the sale of a bill, the party transferring is not liable to any So in the event of bankruptcy it appears from the case in Re Barrington, that if B. hand over a negotiable 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., G. indorses the note, which, together with the written acknowledgment, comes into the hands of M. for valuable consideration, and B. and the several par ties to the note become bankrupts, 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 in the case of Ex parte Harrison, it was held, that if a person transfer a bill, without indorsing it, but by a written instrument warrant the payment, in the same manner as if he had indorsed it, and he become a bankrupt before the bill is due, the holder cannot prove it under the commission against him. And if a trader procure cash for a bill, but do not indorse it, because the person paying the cash thinks that the bill will have as [458]good credit without his indorsement, the bill cannot be proved under a commission afterwards issued against the trader. And where a trader transferred a bill without indorsing it, and there was a private mark upon the bill, and it appeared in evidence, that all bills transferred by him without indorsement, but with this mark, were considered by him as rendering him liable to pay as if he had indorsed them; it was nevertheless held, that such bill could not be proved under a commission against him. So where a bill is transferred by way of sale, without being being indorsed, it cannot be proved under a commission against the party transferring, even by the person to whom he transferred it." But, if the bill were deposited merely as a pledge, the residue of the debt for which it was deposited, after a sale of the bill, is proveable under the commission."


Secondly, With respect to the number of parties, the holder of a bill or note is entitled to prove it under different commissions, against all the several parties to the instrument, under their respective commissions, and to receive dividends upon the whole sum under each, to the extent of 208. in the pound; for it is a creditor's right in bankruptcy to prove

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and avail himself of all collateral securities from third persons to the extent of 20s. in the pound; and the holder of a bill drawn by a firm whom, and upon some of their members constituting a distinct firm, has a right to under what prove it against all the parties according to their liabilities upon the bill, commission provided he was ignorant of their partnership; or such holder may prove it under one or more commissions against some of the parties, and proceed at law against the parties. In Ex parte Rushforth, Lord Eldon said, "It is clear that where a person has a demand upon a bill or bond against several persons, and no part of that demand has been paid before the bankruptcy by any of them, he may prove against each; and the circumstance that one is a surety and the other the principal, or a co-surety as between themselves, does not give a right to stop the holder from receiving dividends, till he has received 20s. in the pound; that is well settled in Ex parte Marshall, and Ex parte Wildman, and it applies to joint and several demands, either by bill or [459 ]


It has long been settled in bankruptcy, that a creditor cannot prove against the joint estate of two bankrupt partners, and also against the separate estate of one of them, but must elect, though he has distinct securities, unless there is a surplus;" and a joint debt cannot be proved under a separate commission, except for the purpose of assenting to or dissenting from the certificate, and recovering a dividend out of the surplus, after satisfaction of the separate creditors; but if there are no joint effects and no solvent partners, or no separate debts, or the joint creditors will pay the separate creditors 208. in the pound, they may then vote in the choice of assignees, and go at once against the separate estate. But he must have time to look into the accounts of the respective estates, to see which will be most beneficial to him, and has been allowed to defer his election till a dividend be declared. And in Ex parte Bielby, where creditors had proved under a joint commission, upon a joint and several promissory note, but had not received a dividend, they were not permitted to waive their proof and to prove against the separate estate, on the terms of not disturbing any dividends already made. And even receiving a dividend is no determination of an election, and the holder of a security has been allowed to change, on refunding the dividend.

In Ex parte Bonbonus, Lord Eldon said, "There have been many cases where three or more partners, being also concerned in other trades, the paper of one firm has been given to the creditors of another, and they were permitted to take dividends from both estates;" and in case of joint debts, paid by a bill drawn by one of the debtors and accepted

Bloxham, 6 Ves. 449. 600. 645. See the argument in 12 Ves. 438. Cullen, 96. 1 Mont. 143. Cooke, 170. Bayl. 209. The Royal Bank of Scotland, 19 Ves. 310.

P Ex parte Parr, 18 Ves. 65. Davison v. Robertson, 3 Dowe's Rep. 220. 230.

9 Ex parte Adams, 2 Rose, 36. 1 Ves. & Bea. 495. Ex parte Parr, 18 Ves. 65. Davison v. Robertson, 3 Dow. 220. 230.

Ex parte Wildman, 2 Atk. 109. Wilks v. Jacks, Cooke, 168. 1 Mont. 143. 10 Ves. 416.

Ex parte Bonbonus, 8 Ves. 542. Ex parte Wensley, 2 Ves. & Bea. 254.

"Ex parte Rowlandson, 3 P. W. 405.

Ex parte Bankes, 1 Atk. 106. Ex parte
Bond and Hill, 1 Atk. 98.

* Ex parte Taitt, 16 Ves. 194. 1 Rose,
21, n. a. Heath v. Hall, 4 Taunt, 328.

y Ex parte Rowlandson, 3 P. W. 405. Ex parte Bankes, 1 Atk. 106. Ex parte Bond and Hill, 1 Atk. 98.

* Ex parte Clowes, Cooke's Bank. Law, 258.

a 13 Ves. 70.

b Ex parte Rowlandson, 3 P. W. 405 supra, notes.

8 Ves. 546. Ex parte Wensley, 2 Ves. & Bes. 254.

3dly, by another, each carrying on distinct trades, there may be proof under Against their separate commissions upon the bill.a

whom and

under what commission

When the credit has been joint, the creditor may be admitted to prove under a commission against the partners, notwithstanding he has taken a separate security. And if money be lent on the separate notes or [460 bills of different partners in the same firm, and be applied to the use of the partnership, and the firm, when solvent, agrees to consolidate the debts, and to consider them as partnership debts, the creditor may be admitted against the joint estate. So, on the other hand, when the credit has been separate, the creditor may be admitted to prove against the separate estate, notwithstanding he has taken a joint security.s

may made.

Fourthly, to what Extent Proof may be made.

4thly, To Fourthly, With respect to what sum, or to what extent proof may be what ex-made, it seems that the discounter of a bill or note is entitled to prove tent proof the full amount, without deducting the discount. So a holder, who be has purchased the bill for less than the amount of it, may prove for the whole. So if a debtor give to his creditor an accommodation bill or note of a third person, to a larger amount than the debt, the creditor is entitled to prove the whole amount of the bill, under a commission against such accommodation party. And the holder of a bill or note, transferred or pledged to him by his debtor as a collateral security for his debt, may prove the whole amount of the security, under a com mission against any of the parties, except the debtor from whom he re ceived it, although he has received part-payment of his debt from such his debtor.1

In the case of several parties, we have just seen that the holder of s bill or note is entitled to prove his debt under a commission against the drawer, acceptor, and indorsers and to receive a dividend from each upon his whole debt, provided he does not in the whole receive more than 20s. in the pound." So where A. being an indorsee of B and Co's. acceptances for £1364, issued a separate commission against B. and at the time of suing out the commission, D. the person for whom A. had discounted the acceptances, had, by payments on account, reduced the debt to £420, it was held, that A. was entitled to prove for the whole amount, and for all that he received above the £420, will be a trustee for D. But under a commission against the [461]party from whom this holder received the bill, he can only prove to the amount of the actual debt then due. There is a distinction in this case, where the creditor applies to prove his debt, after having received a part, and where he applies to prove previous to his having received

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what ex


any payment or composition. If the creditor, at the time of proving, 4thly, To has received any part of the bill or note, he can only prove for so tent proof much as remains; but if, after having proved for the whole, he receives may a part of the bill from any of the persons liable to pay it, he is en- made. titled to a dividend upon the whole, provided it does not exceed 208. in the pound, upon such part as remains due ; and as to any overplus beyond 208. in the pound, it is to be accounted for to the party next entitled to the benefit. In Ex parte Bloxham, it was decided, that a creditor having securities of third persons, accommodation acceptors, to a greater amount than the debt, may prove and receive dividends upon the full amount of the securities to the extent of 20s, in the pound, upon the actual debt; and Lord Eldon said, "I looked upon it as settled, that a creditor cannot hold the paper of his original debtor, a bankrupt, and prove beyond the actual debt upon it, but that that such creditor may have the paper of third persons, who are debtors to such original debtor in more, and prove to the whole amount under the commission against them, and it is not material whether such third persons were indebted to the original debtor, for you cannot attach equities upon bills of exchange." So in Ex parte Bloxham,* the same point was decided, and Lord Eldon said, "A party wants to have a bill discounted, and the banker refuses to discount upon the credit of that bill only, and then the party says, he has in his hands another bill, and offers that as a security for the former, what is that but a right to prove against both estates, until 20s. in the pound has been obtained ?”

We have just seen, that if the holder of a bill or note, at the time of proving, has received any part of it, he can prave only for the remainder. So it has been held, that where different parties to a bill or note become bankrupts, and a dividend is declared, though not paid, under one of the commissions, under which the holder has proved his debt, he cannot afterwards prove under another commission for more than the residue, after deducting the amount of the dividend declared." In Ex parte Lears, the Chancellor made an order, that the dividends [462] should be deducted from the proof, according to this practice, as stated by Mr. Cooke, still expressing doubt as to the principle of it. Hence it is in general advisable, where there are several parties to a bill to prove under the commission against each, as soon as possible, or at least before any dividend has been received, or even a commission opened against either.

In favour of friendly societies, it was enacted by 33 Geo. 3. c. 54. Friendly That if any person appointed to any office by a friendly society, and societies. intrusted with, or having in his hands or possession any moneys or effects belonging to such society, or of any securities relating to the same, become a bankrupt, his assignees must deliver over all things belong

P Cooke, 150, 1, 2, 3. Cullen, 96. The Royal Bank of Scotland, Ex parte, 19 Ves. 310. 3 Rose, 310.

¶ Cullen, 96.

* 6 Ves. 449.

6 Ves, 600, in which the case in 5 Ves. was over-ruled.

* Supra. 1 Mont. 143, 4.

"Cooper v. Pepys, 1 Atk. 106. The Royal Bank of Scotland, Ex-parte, 19 Ves. 310. 2 Rose, 197. But see in Ex parte

Wildman, 1 Atk. 109, where the Chan-
cellor takes for granted, that in the case
of Cooper v. Pepys, the holder had re-
ceived the dividend before he attempted
to prove his debt against the indorser,
1 Mont. 144. Bayl. 210.

* 6 Vest. 644. Note, the reason there
assigned by Mr. Cooke fails, since 49 Geo.
3. c. 121. s. 12. See the Royal Bank of
Scotland, 19 Ves. 310, n. b.
Ex parte
Todd, 2 Rose, 202, n.

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