the pound, under the commission against the indorser, applied to prove against the estate of the maker, Lord Hardwicke C. at first seemed to think that the holder might prove his whole debt, but upon looking into two cases, the first, Ex parte Ryswick (2 P. Wms. 89.) before Lord Chancellor Macclesfield, ahd the second, Ex parte Lefebre (2 P. Wms. 407.) before Lord Chancellor King, he altered his opinon, and was very clear that the 6s. must go in discharge of so much of the debt, and that the holder could only prove the remaining 14s. under the maker's commission. Cooper v. Pepys, 1 Atk. 106. So a dividend declared, though not received, must be deducted. The acceptors and one of the indorsers of a bill became bankrupt at Hamburgh; another of the indorsers became bankrupt in England. The holder caused the bill to be claimed against the estates of the acceptors and indorser, at Hamburgh, according to the course of such proceedings there, and a dividend was declared upon both these estates. The holder not having those dividends, applied to be admitted to prove the whole amount of the bill against the estate of the bankrupt indorser in England. The Lord Chancellor being informed that such was the practice at Guildhall, made the order that the dividends should be deducted, expressing a doubt as to the principle. Ex parte Leers, 6 Ves. 644. So if the dividend has been declared after a claim, but before proof by the holder on the other estate, the reduction must be made. Ex parte the Royal Bank of Scotland, 19 Ves. 310. Ex parte Worrall, 1 Cox, 309. Under special circumstances, this rule was in one case departed from. The holder of certain bills having applied to prove, the opinion of the commissioners was, that the bills payable to fictitious payees were not available securities. The proof was accordingly refused, but a claim was admitted. The question as to the validity of those bills having gone through much litigation in Westminster Hall, (see ante, p. 24.) it was at length determined that they were to be considered bills payable to bearer, and the petition which had stood over during that litigation coming on again, the objection was taken, that as no actual proof had been admitted when it was tendered, and some payments had been made upon the bills in the interval, there should be a deduction of the sum received; but it was held that though generally a sum received before the proof admitted must be deducted from the proof, the petition which had been so long depending was in the nature of an appeal from the decision of the commissioners, and the result of that appeal being, that they ought to have admitted the proof, the receipt of a part during the pendency of the petition to correct their judgment, would not prevent the proof then, which ought to have been admitted when it was first tendered. In the matter of Gibson and Johnson, cited 19 Ves. 311. The following case, also, is an exception to the rule. A. discounted for D., the acceptance of B. C. & Co.'s

for 13641. and sued out a separate commission against B.; at the time of the suing out of the commission, D. had by payments on account, reduced the debt from himself to A. to 420l. A. having been admitted to prove the full amount of the bill, the assignee of B. petitioned that the proof might be reduced to 4201. but Lord Eldon C. held that as A. (being the petitioning creditor), was the only joint creditor who could come in and prove under the separate estate of B. and receive dividends with the separate creditors, which D. could not; and that as A. was the legal owner, and the bill would be discharged by the operation of the certificate, he was to be considered as a trustee for D. Ex parte De Tastet, 1 Rose, 10.

With regard to the respective amounts of the proof of bills proved under different commissions, it is held, that where a bill or note is pledged with a person as a security for the payment of a smaller sum, the person with whom it is deposited may prove the full amount against all parties, except against the party from whom he received it, provided he do not receive in the whole more than 20s. in the pound. Davies gave his note for 500l. to Turner and Toye, expressed to be for value received, but in fact for their accommodation, and they being indebted to King in 3001., indorsed the note to him, to enable him to raise that sum. Turner and Toye and Davies became bankrupt. On petition King was allowed to prove the whole amount against Davies's estate, and to receive dividends not exceeding 3001. Ex parte King, Co. B. L. 156. So where a bill for 2001. was indorsed by the payee to the petitioner for a debt of 1477. (which was afterwards reduced to 461. by payments), and the acceptor became bankrupt, upon which the petitioner claimed to prove the whole amount of the 2001. under his estate, till he had received 461., and the commissioners having refused to allow him to prove more than 46l., petitioned to be allowed to prove for 200l., the petition was allowed. Ex parte Crossley, Bro. C. C. 237. Co. B. L. 157. S. C. Kirkpatrick having an account with the petitioners, remitted bills accepted by the bankrupts to the amount of 3869l. 10s. 3d. Kirkpatrick was only indebted to the petitioners in 3234l. 12s. 11d.; on a petition to be admitted to prove the full amount of the bills, and to receive dividends not exceeding 20s. on the debt due from Kirkpatrick, Lord Eldon C. said, "I look upon it as settled, that you cannot hold the paper of the bankrupt, and prove beyond your actual debt upon it, but that you may have the paper of third persons; those persons being indebted to your debtor in more, and you may prove to the whole amount not exceeding 20s. in the pound on the original debt." The order was made as prayed. Ex parte Bloxham, 5 Ves. 449. But where the bills deposited are accommodation bills, as between the party depositing them, and the bankrupt, it has been doubted whether the party with whom they are deposited can

Q

prove against the estate of the bankrupt a greater amount than is due to him from the party who deposited them. In Ex parte King, ante, p. 337, the proof was allowed to the full amount; but the contrary was held in the following case: Almond discounted a bill for 3421. 7s. with the petitioners, and as a collateral security indorsed to them a bill for 4591. 6s. 10d., accepted by Purdy, and Almond and Purdy became bankrupt; on a petition to be allowed to prove the full amount of the bill for 4591. 6s. 10d. against the estate of Purdy, Lord Rosslyn C. said, "It is not competent for the bankrupt from whom the bill was received, to make any objection to it, but the person who accepts the bill without consideration, becomes a bankrupt. The proof then comes upon his estate. Then the oath to be made upon that must truly state the debt, and that is only the sum for which the bill was given as a security. It would be impossible to recover more in an action than the sum really advanced; and it is impossible to allow more to be proved upon the estate than could be recovered upon an action directed, and the bankruptcy not to be set up.' Petition dismissed. Ex parte Bloxham, 5 Ves. 448. However, upon a petition to have this order discharged, it was discharged accordingly by Lord Eldon, his Lordship observing, "There must have been some misunderstanding upon it, for the case was only this. A party wants to have a bill discounted. The banker refuses to discount upon the credit of this bill only. The other 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?" Ex parte Bloxham, 6 Ves. 600. It may, however, be remarked, that the attention of the court does not appear to have been directed to the circumstance that the bill deposited was accepted for the accommodation of the party depositing it, a circumstance which, though not stated in the case, may be collected from the judgment of Lord Rosslyn. In the following case where the bills deposited were known by all parties to be accommodation bills, it was held that they could not be proved for more than the debt actually due. The petitioner sold goods to one Kearns, and Willats accepted bills as a security for the amount. Willats became bankrupt, and the sum due from Kearns to the petitioner being less than the amount of the bills, the petitioner petitioned to be allowed to prove the full amount of the bills. The Vice Chancellor said, "It must be admitted, that if the bankrupt, at the request of Kearns, and without any communication with the petitioner, had put his name to these bills, and Kearns had then delivered them to the petitioner as a security for the goods sold to him, that the petitioner's holding these bills as a collateral security for Kearns's debt, would have been entitled to prove the full amount of them against the bankrupt's estate, and to receive dividends on the full proof,

until the whole of Kearns's debt was paid. A creditor has always a right to make the most of a property pledged with him by his debtor, and the bills of a third person are in this respect like other property. The bankrupt's bills here are not given to Kearns, and handed over by him to the petitioner as a security for Kearns's debt by him. The transaction is immediate between the bankrupt and the petitioner, and the bankrupt gives these bills to the petitioner in payment of goods to the same amount delivered by the petitioner to Kearns. If given in payment of goods delivered by the petitioner to the bankrupt, it is clear that the petitioner could only prove against the estate of the bankrupt the actual sum due, and not the amount of the bills; and I can find no distinction in principle between a bill given by the bankrupt to the petitioner for goods delivered by the petitioner to the bankrupt, and a bill given by the bankrupt to the petitioner for goods delivered by the petitioner to Kearns at the request of the bankrupt. In both cases there is the same immediate contract between the bankrupt and the petitioner, and the bills are equally payment for the goods, and to the extent in which Kearns had advanced the price of the goods, the bills are satisfied." Ex parte Reader, Buck. 381.

Proof of bills-where the bills have been deposited as a security.] Where the bankrupt before his bankruptcy has deposited bills with his creditor as a security for a debt, without indorsing the bills regularly, the bills ought to be sold, and the difference between that amount and the amount of the debt proved as part of the debt. Thus, where bankers having proved the whole of their debt, exhibiting bills, deposited with them as securities, afterwards received the amount of several of the bills, the proof was expunged, the bills remaining unpaid were ordered to be sold, and a new proof to be made, deducting all that was received on account of the bills, considering them as mere pledges. Ex parte Baldwin, cited 19 Ves. 230. But where the bankrupt has indorsed the bills, prima facie, they are not to be treated as mere securities, but the holder has a right to go against all the parties whose names appear upon them. It was agreed between Crossley, the bankrupt, before his bankruptcy, and the Lees, that Crossley should deposit with the Lees bills at long date, which they were to receive or dispose of, and in return to accept Crossley's bills. At the time of the bankruptcy, Crossley owed the Lees 8,0071., and held bills indorsed and remitted by him for 7,999l. They proved the whole of their debts, exhibiting the bills as securities. The Lees received several dividends, and also upwards of 4,000l. on the bills from other parties. The petition prayed that the proof might be corrected, by reducing it to the sum which should appear due, after deducting the money received in respect of the

bills deposited, and an account of the dividends overpaid by mistake. Per Lord Eldon C. "The distinction is, that if the subject of deposit is the bankrupt's property, it must be sold; and the excess proved as a debt. Where bills remitted are indorsed, the holder prima facie may go against every one whose name is on them; and all these bills being indorsed, it is upon the other side to shew that the meaning was not to give a demand upon the bills against the drawers and indorsers. This debt, however, is inaccurately proved. The proof should have been upon the bills, and I think Lees' estate intitled to that proof. The real question is, whether these bills were indorsed to Lees as their own, to work out payment of their debt, or merely that they might collect the money, and not to enable them to go against the indorsers; a proposition which the other party must make out. In the case cited (vide supra) there was a mortgage, and bills indorsed and not indorsed ; and the question was, whether upon the whole, as the mortgage was a security, the bills also indorsed or not indorsed, were intended to be so, and the Lord Chancellor inferred, from the mortgage and the circumstance that some of the bills were not indorsed, that those which were indorsed were sent merely as the others." It being referred to the commissioners to report, and it appearing that the bills were not to be considered as a deposit, the petition was dismissed. Ex parte Towgood, 19 Ves. 229; and see Ex parte Rushforth, 10 Ves. 419. But where a bill, with the bankrupt's name upon it, has been deposited as a security for part of a debt owing from the bankrupt, and the creditor proves that debt, stating that he holds the bill as a security, and subsequently by dividends from the estate, and from other parties to the bill, receives 20s. in the pound on the bills, the proof will not be expunged, but the creditor will be restrained from receiving further dividends on the amount of the bill. Ex parte Rufford, 1 G. & J. 41. but see Ex parte Burn, 2 Rose, 55. post. If a bill or note be deposited without indorsement as a security for a less debt, the assignees will be ordered to permit the creditor to sue in their names. Thus, where the payees of a note for 100l. deposited it, without indorsing it, as a security for 941. 19s. and became bankrupt, on a petition that the assignees might be ordered to indorse the note, the Vice Chancellor said, "This case differs from Ex parte Mowbray, (1 J. & W. 428.,) where the whole beneficial interest was out of the bankrupt, and he had become a mere trustee ; but here by reason of the amount of the note being beyond the debt for which it was pledged, the legal interest in the note passes to the assignees. Let the petitioner be at liberty to use the name of the assignees in an action on the note, if an action be necessary, indemnifying the assignees in respect of such aetion, and undertaking to pay the surplus to the assignees, if the amount of the note be recovered, and if an action be not