BANKRUPTCY---(continued).

IV. Of proof bills under a commission, 556 to 558.
enactment of stat. 7 Geo. 1. c. 31. 556, 7.

49 Geo. 3. c. 121. 557, 8.

First. What bills proveable, 558 to 562.
must be valid at law, 558, 9.

must be founded on legal consideration, 559.

when otherwise it bona fide holder, 550; and 58 Geo. §. c.
93. Appendix, 692.

when part of consideration of a bill legal and part not,
proveable as money had and received, 559.

a bill payable at a certain time proveable, if payable on a
contingency otherwise, 560.

the same with regard to acceptance, 560.

bill accepted by letter proveable, 560.

indorsement in bankruptcy governed by same rules as in
an action, 560.

and bill transferred for value, but not indorsed, when it
cannot be proved, 561,

written guarantee to pay note of a third person not due
at time of bankruptcy, is not proveable, 561.

when bills payable to fictitious persons may be proved, 561.
when assignees compellable to indorse to enable holder
to prove, 561.

a lost bill may be proved upon giving indemnity, 561.
but laches will operate here as in case of actions, 561.
cancelled or settled bills cannot be proved, 562.

but bills in lieu of which others are given, are proveable if
latter not paid, 562,

Secondly. Who may prove, 562 to 584.

In general,

bona fide holder may prove for whole sum contained in
it, 562.

indorsee, after act of bankruptcy, though he cannot set
off, may prove his debt, 562, 3.

or he may be petitioning creditor, 562, 3.

indorsee of a note, after bankruptcy and after due, may
prove it, 563.

and if drawer or indorser take up bill after bankruptcy of
acceptor, they may prove, 563.

the same rule prevails against every other party liable to
drawer or indorser, 563.

accommodation indorser may prove against accommoda-
tion acceptor, 563.

and petitioning creditor indorsing bill before bankruptcy,
and then taking it up, may prove against acceptor. 565-
acceptor, for honour of drawer, after bankruptcy of ori
ginal acceptor, may prove bill against such accep-
tor, 563, 4.

other wise if original acceptor is an accommodation ac-
ceptor, 564.

if holder prove under two commissions, and receive divi-
dends under each, the assignees of one cannot prove
against the other, 564.

nor can bill be proved twice against same estate, 564.
a bona fide holder of an accommodation bill may prove
against the acceptor or drawer of bill, 564. 88 to 95.
but where party was not a bona fide holder, but has, since
the bankruptcy, been compelled to take it up, it is fre-
quently otherwise, 564, 5.

BANKRUPTCY---(continued).

Secondly Who may prove- -(continued).

Rules as to accommodation bills divided into three, 565.

1. Where there has been cross bills between the parties, 565 to 568.
one bill given for another is a valid consideration, and each

may prove, 565.

whether a bill was or was not transferred for another,
verned by the particular circumstances, 565.

go-

the variation in date and sum, when not material, 565.
agreement to pay his own acceptance, is conclusive evidence
that the bills were cross, 566

but such party is not entitled to his dividend until his bill has
been paid, 566.

nor can one party to cross bills prove payment on his accept-
ance against the drawer, 566, 7.

and this though no payment has been made by such drawer
on his own cross acceptance, 567.

in case of bankruptcy of one party dealing with another,
cross acceptances which are respectively dishonoured, and
also a cash account, how to proceed, 567.

if a cross bill is taken by the drawer after bankruptcy of
acceptor, he may prove, 567.

but if holder prove both against drawer and acceptor, and
receive dividends, such drawer cannot prove against such
acceptor, 567, 8.

2. Where accommodating party has taken security, 568 to 571.
if the drawer be bankrupt, the holder may, even before
accommodation bill due, prove on the counter security, 568.
but in these cases the dividends are suspended till it appear
that the surety had paid his own bill, 568, 9.

what these securities must be to entitle holder to prove, 569.
when there is a loan of bills from A. to B. as well as cash ac-

count due to B, B. may prove under commission against
A. but dividends withheld till bills paid, 569.

and acceptor of a bill having funds of bankrupt in his hands,
may keep such funds to answer accertance, 570.

not always necessary that security should be given expressly
for an indemnity, 570.

accommodation acceptor, who has paid bill, may set off his
debt against any claim on him, 570, 1.

3. Where the accommodating party has taken no security, 571 to 576.
when he has paid before the bankruptcy, 571.

when he may prove under commission, 571.

when he has not paid till after the bankruptcy, 571 to 576.
he cannot prove under the commission, unless he can
avail himself of the 49 Geo 3. c. 121.571.

no difference in this respect if accommodated party give
a parol or written promise to take up bill, 571.
but the right of an accommodation indorser not clearly
settled, 572, 3.

but acceptor of a bill or maker of a note cannot, in any case,
prove, 573, 4.

but doubtful of indorser of such a bill will come within the
meaning of the stat. 7 Geo. 1. c. 31. 574.

arguments to support the principle that he can, 574, 5, 6.

Benefit of holder's proof, 576 to 580.

when an accommodating party can prove in his own right, he
may sometimes have the benefit of holder's proof, 576.
and court of equity will compel the holder to prove his
debt, 576,

BANKRUPTCY-(continued).

Benefit of holder's proof-(continued).

and stay proceedings at law till he has done so, 576.
and surety lodging money to pay bill before proof by creditor, may
retake the money to enable creditor to prove, 577.

but a banker paying bankrupt's money, after notice of the bank-
ruptcy, will not be allowed to stand in creditor's place, 577.
if indorser prove under acceptor's commission, and drawer take
up bill, drawer has an equitable right to indorser's proof, 577.
if payment is made by surety after bankruptcy, and before proof
by creditor, neither can prove, 577.

on proof made and party paid by surety, and proof expunged, it
may be restored for surety's benefit, 577.

creditor cannot be turned into a trustee for surety to prejudice his
right on another demand against debtor's estate, 578.

in such case what dividend will be allowed surety, 578, 9.

but this doctrine qualified in case of surety's to a limited amount,
579, 580.

but surety not entitled to benefit of proof made by creditor on a
distinct estate, with which he had nothing to do, 580.

When he may prove under 49 Geo 3. c. 121. s. 8.589 to 584.

enactment of that statute, 580, 1.

decisions on the statute with respect to proof by accommodation
acceptors, 581, 2, 3.

to proof by one partner against his bankrupt co-partners, 583.
no words in the act precluding a party from suing bankrupt, sub-
ject to the judgment being useless by obtaining his ceriificate,
583, 4
Thirdly. Against whom and under what commission, 584 to 589.
With relation to particular situation of bankrupt, 584, 5, &.
holder of a bill may prove against all parties to it, 584.
negotiable securities transferred without indorsement,
cannot be proved even by bonâ fide holders, 585, 6.
but this rule prevails, though bill unaccompanied by se-
parate written acknowledgment, 584.

when such holder may have benefit of the proof of the per-
son who last indorsed it, 585.
[mark, 586.
the same, though trader usually indorsed by a private
With respect to the number of parties, 586 to 589.

creditor may avail himself of all collateral securities to
the extent of 20s. in. the pound.

holder of a bill drawn by a firm on another firm of same
partners, if ignorant of their partnership, may prove it
under commission against both firms, 586, 7.

or prove against same, and proceed at law against other,
587.

and a person may prove against the estates of the prin-
cipal surety or co-surety, 587.

creditor cannot prove against the joint estate of bank-
rupt partners, and estate of one only, 587.

but must elect, 587

how long he may wait, 589.

unless there is a urplus. 587.

[mission, 587.

nor can a joint debt be proved under a separate com-
except for the purpose of assenting or dissenting to cer-
tificate, and getting payment out of surplus, 587.
what circumstances will alter the rule, 587.
where partners are concerned in other trades, the pa-
per of one firm given to creditors of another, they
may take dividends from both estates, 568.

BANKRUPTCY-(continued.)

With respect to the number of parties-(continued.)

when debts are joint and paid by a bill drawn on one
debtor, and accepted by the other, he may prove
against both, 588.

when credit joint against security separate, the same rule
prevails, 588.

and vice versa, 589.

and money lent to different partners in same firm, and
they agree to consolidate debt, proof may be against
joint estate, 589.

Fourthly. To what extent proof may be made, 589 to 597.
discounter of a bill entitled to full proof without deduct-
ing discount, 589.

same in case of a holder of a bill bought for less than
sum due on it, 589.

same if debtor give an accommodation bill of another
for larger amount than debt, 589.

same in regard to holder of bill pledged as security for
the debt, 589.

but proof to this extent can only be against party to
the bill, against debtor can only be for amount of
debt, 589.

holder may prove against drawer, acceptor, and in-
dorsers, and receive a dividend from each to full
amount of bill, 589.

and this though he has received payments on account
reducing the debt, 589, 90.

but under a commission against party from whom bill
obtained, proof of what really due is allowed, 590.
but this latter case only extends where the payment was
made after proof, 590.

how far a creditor holding paper of third persons as se-
curity for his debt, may prove against debtor or such
persons, 590, 591.

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,

591.

advisable for holder therefore to prove under all as soon
as possible, 591.

of proof by friendly societies, under stat. 33 Geo. 3.
c. 54. 591 to 603.

enactment of the statute, 591, 2.

decisions on it, 592, 3.

interest, how much recoverable, 593 to 595.

proveable when ever by express terms of instrument it
is reserved, 593.

or where there is an agreement that the debt shall
carry interest, 593.

or on notes payable on demand, not reserving it where
by custom of trade it is allowed, 593, 4.

or where it has been allowed on settlement of accounts
between the parties, 593, 4.

[certain, 594

in general proveable on all notes payable on any day
how much recoverable, 594.

never in case of insolvency allowed after date of com-
mission, 594.

and where act of bankruptcy ascertained, no interest
allowed after that, 595.

BANKRUPTCY-(continued.)

Fourthly. To what extent proof may be made-(continued.)
and in cases of mutual credit, computation of it stops
at same time, 595.

but where an estate turns out solvent, creditors may
claim interest up to time of payment, 595.

51. per cent. legal rate allowed, 595.

of the re-exchange, 595, 596.

Fifthly. The time of proving and making claim, 596 to 597.
no unnecessary delay should take place, 596.

and except in case of gross laches, creditors may prove
at any time, 596.

[tice, 596, 7.
when creditor proves after dividend declared, the prac
when a party cannot prove, advisable to make claim as

soon as possible, 597.

Sixthly. The mode and terms of proof and remedy for dividend,
597 to 604.

ordinary proofs by oath, 598.

forms of depositions, 598, and see Appendix, 657 to
660.-(See "Precedents.")

what ought to be stated in the depositions, 598.

every security must be produced, and marked by com-
missioners, 598.

party inserting, on proving must deliver up security, or
apply to sell, pledge, 599. [be delivered up, 599.
what have been deemed pledges or securities which must
party having a debt, partly proveable and partly not,
may apply same to debt not proveable, 599.
in what other causes he may do so, 599.

but where the bill was not deposited as a pledge, but
indorsed, holder may prove his debt, or proceed at
law, 599, 600.

of procceding at law, and proving also, 600, 1.

direction of statute 49 Geo. 3. c. 121, in this re-
spect, 600, 1.

observations on it, 600, 1.

Reducing, expunging, and restoring proofs, 601, 2.

when after proof made, any thing appears so as to re-
duce or discharge debt, it may be reduced or dis-
charged accordingly, 601.

what will amount to the one or the other, 601, 2.

when proof may be restored for benefit of another party,
602, 3.

remedy to recover dividends, 603, 4.

enactment of the stat. 49 Geo. 3. in this respect, 603.

Seventhly. The consequence of not proving, and the effect of certi-
ficate, 604 to 607.

the effect of certificate, and how far bankrupt discharged
thereby, 604.

in what cases the certificate is no bar, 604, 5.
bankrupt discharged from a debt in one firm, cannot
be charged by creditor with the same debt in another,

606.

but sometimes the creditor is able to shape his action as
a tort, in which case certificate no bar, 606, 7.
effect of certificate avoided by a fresh contract, 607.

V. Of mutual credit and set-off, 607 to 617.

General observations and statutes, 607 to 617.

mutual demands may be set off against each other, 608.
enactment of the stat. 5 Geo. 2. c. 30, in this respect, 608.