BANKRUPTCY-(continued.) Benefit of holder's proof, 451 to 453. when an accommodating party can prove in his own right, he may sometimes have the benefit of holder's proof, 451. and court of equity will compel the holder to prove his debt, and stay proceedings at law till he has done so. 451. [451. and surety lodging money to pay bill before proof by creditor, may retake the money to enable creditor to prove, 451. but a banker paying bankrupt's money after notice of the bankruptcy, will not be allowed to stand in creditor's place, 451. if indorser prove under acceptor's commission, and drawer take up bill, drawer has an equitable right to indorser's proof, 452. if payment is made by surety after bankruptcy, and before proof by creditor, neither can prove, 452. on proof made and party paid by surety, and proof expunged, it may be restored for surety's benefit, 452. creditor cannot be turned into a trustee for surety to pre- in such case what dividend will be allowed surety, 452. but surety not entitled to benefit of proof made by creditor on a distinct estate, with which he had nothing to do, 453. When he may prove under 42 Geo. 3. c. 121. s. 8., 453 to 456. enactment of that statute, 453. decisions on the statute with respect to proof by accommodation acceptors, 454, 5. [456. to proof by one partner against his bankrupt co-partners, Thirdly, Against whom and under what commission, 456 to 460. when such holder may have benefit of the proof of the the same, though trader usually indorsed by a private mark, 458. With respect to the number of parties, 458 to 460. creditor may avail himself of all collateral securities to holder of a bill drawn by a firm on another firm of and a person may prove against the estates of the prin- creditor cannot prove against the joint estate of bankrupt partners, and estate of one only, 459. BANKRUPTCY-(continued.) With respect to the number of parties-(continued.) but must elect, 459. how long he may wait, 459. a joint debt cannot be proved under a separate com- except for the purpose of assenting or dissenting to certificate, and getting payment out of surplus, 459. what circumstances will alter the rule, 459. where partners are concerned in other trades, the paper of one firm given to creditors of another, they may take dividends from both estates, 459. 460. when debts are joint and paid by a bill drawn on one debtor, and accepted by the other, he may prove against both, 459. when credit joint against security separate, the same rule prevails, 459. and vice versa, 459. and money lent to different partners in same firm, and they agree to consolidate debt, proof may be against joint estate, 460. Fourthly. To what extent proof may be made, 460 to 465. discounter of a bill entitled to full proof without deducting discount, 460. same in case of a holder of a bill bought for less than sum due on it, 460. same if debtor give an accommodation bill of another for larger amount than debt, 460. same in regard to holder of bill pledged as security for the debt, 460. but proof to this extent can only be against party to the bill, and not against debtor, 460. holder may prove against drawer, acceptor, and indorsers, and receive a dividend from each to full amount of bill, 460. and this though he has received payments on account reducing the debt, 460. but under a commission against party from whom bill obtained, proof of what really due is allowed, 461. but this latter case only extends where the payment was made after proof, 461. how far a creditor holding paper of third persons as security for his debt, may prove against debtor or such persons, 461. if holder of a bill prove under one commission, and a dividend is declared, he cannot prove under another for more than what remains, deducting last dividend, 461. advisable for holder therefore to prove under all as soon as possible, 463. of proof by friendly societies, under stat. 33 Geo. 3. c. 54., 462, 3. enactment of the statute, 4C2. decisions on it, 462, 3. interest, how much recoverable, 463, 4. 596 BANKRUPTCY-(continued.) Fourthly. To what extent proof may be made-(continued.) proveable when ever by express terms of instrument it is reserved, 463. or where there is an agreement that the debt shall carry interest, 463. or on notes payable on demand, not reserving it where by custom of trade it is allowed, 463. or where it has been allowed on settlement of accounts between the parties, 463. [certain, 468. in general proveable on all notes payable on any day how much recoverable, 464. never in case of insolvency allowed after date of commission, 464. and where act of bankruptcy ascertained, no interest allowed after that, 464. and in cases of mutual credit, computation of it stops at same time, 464. but where an estate turns out solvent, creditors may claim interest up to time of payment, 464. £5 per cent. legal rate allowed, 464. of the re-exchange, 464, 5. Fifthly. The time of proving and making claim, 465, 6. no unnecessary delay should take place, 465. and except in case of gross laches, creditors may prove at any time, 465. when creditor proves after dividend declared, the practice, 465. when a party cannot prove, advisable to make claim as soon as possible, 466. Sixthly. The mode and terms of proof and remedy for dividend, 466 to 470. ordinary proof by oath, 466. forms of depositions, 466, and see Appendix, 657 to 663.-(See "Precedents.") what ought to be stated in the depositions, 466. every security must be produced, and marked by commissioners, 466. party inserting, on proving, must deliver up security, or apply to sell pledge, 467. what have been deemed pledges or securities which must be delivered up, 467. party having a debt, partly proveable and partly not, may apply same to debt not proveable, 467. in what other causes he may do so, 467. but where the bill was not deposited as a pledge, but indorsed, holder may prove his debt, or proceed at law, 467. of proceeding at law, and proving also, 468. direction of statute 49 Geo. 3. c. 121, in this respect, 468. observations on it, 468. Reducing, expunging, and restoring proofs, 468, 9. BANKRUPTCY-(continued.) Reducing, expunging, and restoring proofs-(continued.) what will amount to the one or the other, 469. when proof may be restored for benefit of another party, 469, 470. remedy to recover dividends. 470. enactment of the stat. 40 Geo. 3. in this respect, 470. Seventhly. The consequence of not proving, and the effect of certificate, 470 to 473. the effect of certificate, and how far bankrupt discharged thereby, 470. in what cases the certificate is no bar, 471. bankrupt discharged from a debt in one firm cannot. be charged by creditor with same debt in another 472. but sometimes the creditor is able to shape his action V. Of mutual credit and set-off, 473 to 480. mutual demands may be set-off against each other, 472. enactment of the stat. 5 Geo. 2. c. 30, in this respect, 473. 42 Geo. 3. c. 135. 474. in these statutes the word "credit" more effective than the word "debt," 474. arranged under three heads; 1. The nature of the debt, and consideration upon which founded, 474 to 476. what debt may be set-off, and what constitutes a mutual credit, 474, 5, 6. legacy after admission by executor may be setoff, 475. illegality of consideration will not prevent the setting-off what is equitably due, 475. and if assignees confirm acts of bankrupt by 2. The parties between whom the mutual credit_may governed by same rules as prevail at common under separate commissions set-off disallowed against a separate creditor indebted to partnership in a larger sum, 477. in what other cases allowed, 477. 3. Time when the debt or credit arose, 477 to 480. CHITTY ON Bills. yet if such debt be a credit, though not before the act, it may be set-off, 478. 3 X BANKRUPTCY-(continued.) V. Of mutual credit and set-off-(continued.) 3. Time when debt or credit arose-(continued.} if demand arise on a bill payable after, but made before bankruptcy, set-off is allowed, 478. a bill payable unconditionally given to a surety, may set-off, 478. and a person lending notes of hand, and receiving a memorandum may set-off amount of any note paid by him after bankruptcy, against sum due from him to the bankrupt, 478. a bill or note indorsed after bankruptcy cannot be set-off, though it may be proved, 478. and therefore incumbent on such person to show what other evidence sufficient in this respect, 479. provision of the stat. 46 Geo. 3. c. 135, in relation VI. General effect of bankruptcy on the property of the bankrupt, and of others, 480 to 486. arranged under two heads, 480. 1. The property of the bankrupt, and contracts entered into by him, 480, 1. property of the bankrupt in hands of assignees generally affected as if in his own hands, 480. assignment of a debt for value by bankrupt before bankruptcy, when binding on assignee, 480. indorsement of a bill after bankruptcy, but delivered before it is valid, 480. and if bankrupt not beneficially interested, he may do any act respecting it as if he were not bankrupt, 480. where bankrupt drew a bill, partly for value and partly not, how much conveyed by his assignment, 481. assignees cannot hold any property obtained by the bankrupt by fraud, 481. when bills, &c. indorsed after bankrupt had dishonoured others, may be retained, 481. indorsement after secret act of bankruptcy, protected by statute, 481. what other payments protected by statute, 481. acceptance of bills does not bar vendor's right to stop goods in transitu upon bankruptcy of vendee, 481. 2. The property of others, 482 to 486. a banker has a general lien on bills paid into his hands generally, 482. a person has a lien on all property in his hands, for which he has accepted a bill after the bankruptcy of the owner, 482. property in possession of bankrupt, though he be not the real owner, will pass to his assignees, 482. |