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necessary, then let the assignees join in a receipt for the amount of the note on receiving the surplus." Ex parte Brown, 1 G. & J. 407.

Proof of bills-where there are several bills and one is paid in full, proof reduced.] Where there has been a proof upon several bills, and one of those bills has been paid in full by other parties to it, the proof must be reduced by that amount. Bridges discounted for Cowell, the bankrupt, before his bankruptcy, a bill for 741. drawn by the bankrupt, and accepted by Gillham. This bill was dishonored, and Cowell became bankrupt. Gillham on the bill becoming due, instead of payment, delivered to Bridges a sum in cash, and three bills of 20l., 15l. and 15l.; Bridges proved on Cowell's estate as for money lent, 1431. 18s. 3d., which included the 50l., the amount of the balance due on Gillham's bills. These three bills being paid at matu rity, Cowell's assignees petitioned to have the amount expunged. Per Sir J.Leach V. C. The law considers each discount transaction, as a distinct, isolated transaction; and though the form of the proof be upon the loan, the proof is in truth upon each bill separately. Upon this principle, I must order the 50l. to be expunged." Ex parte Barratt, 1 G. & J. 327. Aspinall proved under the estate of Moulson, a debt of 27721. 7s. 9d. as for money had and received, and exhibited as securities four bills, one for 2471. 12s., another for 18371. 10s.; the first was afterwards paid in full to Aspinall by the acceptors; on the second, the sum of 1534l. 6s. 3d. was paid by different parties; the assignees of Moulson petitioned that on payment of 3031. 38. 9d. the balance of the bill for 18371. 10s. it might be delivered up to them, and that Aspinall's proof might be reduced by the several amounts of 2471. 12s., and 18371. 10s. Per Lord Eldon C. "There is no doubt that Aspinall, having treated these bills as a security in his deposition, and having proved his debt with the exception of them, is now precluded from saying that they are not to be treated as a security, because they are indorsed. The bankrupt was the last indorser of the bills; if they had not been put into the hands of Aspinall they would have remained his property. There is great difficulty in saying, that the assignees have no right to take out of the hands of a depositary property left with him as a security for a debt, covered by payment from other sources. If A. gives B. a bill to the amount of 300l. as a security for a debt of 150l.; whether A. indorse it or not, as against him, B. can only prove 150l., and he will be a trustee for A. in respect of any surplus he may receive from the other parties to it." Er parte Burn, 2 Rose, 55. but see Ex parte Rufford, 1 G. & J. 41. ante, p. 340.

Proof of bills-interest.] By statute 6 G. 4. c. 16. s. 57. it is enacted, that in all future commissions against any person or

persons, liable upon any bill of exchange, or promissory note, whereupon interest is not reserved, overdue at the issuing of the commission, the holder of such bill of exchange or promissory note shall be entitled to prove for interest upon the same, to be calculated by the commissioners to the date of the commission, at such rate as is allowed by the court of King's Bench in actions upon such bills or notes. Before this enactment, it was held that interest was proveable where it was made payable in the bill or note; Ex parte Marlar, 1 Atk. 150, but where the date of the act of bankruptcy was fixed, interest accruing after that period could not have been proved. Ex parte Moore, 2 Br. C. C. 597. If there is a surplus, such as will afford it on the debts bearing interest, then the creditors having debts due at the date of the bankruptcy, bearing interest, receive subsequent interest, as covered under the debt due at the bankruptcy, though such interest had not accrued at the time of the bankruptcy, nor for many years afterwards. Per Sir W. Grant, M. R. 13 Ves. 573. As to the mode of calculating interest, in case of a surplus, see In the matter of Higginbottom, 2 G. & J. 123.

Proof of bills-expenses and re-exchange.] On a petition to be allowed to prove the costs of protesting certain bills, accepted by the bankrupt, protested after the commission issued, Lord Hardwicke C. ordered that the costs of the protests arisen before the commission should be proved, but no part of the costs arisen afterwards; Anon. 1 Atk. 140; and in a subsequent case the proof was confined to the charges incurred before the act of bankruptcy. Ex parte Moore, 2 Br. C. C. 597. Re-exchange also incurred before the act of bankruptcy is proveable, Ex parte Hoffman, Co. B. L. 173; and where by the law of the country certain stipulated damages are to be paid in case of the return of the bill, such damages, though paid after the bankrputcy, have been allowed to be proved. Francis v. Rucker, Ambl. 672.

Proof of bills-election.] By stat. 6 Geo. 4. c. 16. s. 59. no creditor who has brought any action or instituted any suit against any bankrupt in respect of a demand, prior to the bankruptcy, or which might have been proved as a debt under the commission against such bankrupt, shall prove a debt under such commission, or have any claim entered upon the proceedings under such commission, without relinquishing such action or suit, and the proving or claiming a debt under a commission by any creditor shall be deemed an election by such creditor to take the benefit of such commission with respect to the debt so proved or claimed. A bankrupt had given to his creditor two bills of exchange, stated in his affidavit to have been given for a general balance owing by him to the creditor; but as to this, there was a counter affidavit. The creditor sued the bankrupt,

nor,

and took him in execution on one of the bills, and on the other being returned proved it under the commission. On an application by the bankrupt to be discharged out of execution, on the ground of election by proof, the Lord Chancellor observed, that it was a remedial law, and must receive a liberal construction, and made the order on the creditor, without prejudice to his proving under the commission. Ex parte Dickson, 1 Rose, 98. But if a creditor has a note for one sum, and a bond for another, as the remedies and relief under those securities are different, he may prove the one debt, and hold the bankrupt in execution for the other. Per Lord Eldon C. Ex parte Grosve14 Ves. 588. So it is said by the Vice Chancellor in Er parte Glover, 1 G. & J. 270., that the statute does not appear to apply to actions for distinct demands brought subsequent to claim or proof; that a distinct demand is a demand of a distinct nature, as of indebitatus assumpsit and bond. Two parcels of goods were sold at different times, and paid for by bills. The purchaser afterwards becoming bankrupt, the vendors proved under the commission for the amount of the first parcel, they then holding the bill given in payment for the same. The bill for the other parcel having been negotiated by them, prior to the bankruptcy, and being then outstanding, was afterwards dishonored; the court of King's Bench held that the vendors were not precluded from suing the bankrupt for the amount of the last parcel of goods. Per Holroyd J. "As both these debts were incurred before the bankruptcy, the plaintiffs might have recovered the whole in one action of indebitatus assumpsit, but as far as respects the question before us, I think this case differs from the case of a debt arising out of one entire contract, inasmuch as the plaintiffs could only prove one debt and not the other, and then the statute does not operate except as to such debt so proved, and as to that only." Watson v. Medex, 1 B. & A. 121. Harley v. Greenwood, 5 B. & A. 95., and see Mead v. Braham, 3 M. & S. 91. ante, p. 329. Ex parte Lobbon, 17 Ves. 334. 1 Rose, 219. S. C.

Set off.] By stat. 6 Geo. 4. c. 16. s. 50. it is enacted, that where there has been mutual credit given by the bankrupt and any other person, or where there are mutual debts between the bankrupt and any other person, the commissioners shall state the account between them, and one debt or demand shall be set against another, notwithstanding any prior act of bankruptcy committed by such bankrupt, before the credit given or debt contracted by him, and what shall appear due on either side, on the balance of such account, and no more, shall be claimed or paid on either side respectively, and every debt or demand thereby made proveable against the estate of the bankrupt, may also be set off in manner aforesaid against such es

tate; provided that the person claiming the benefit of such set off had not, when such credit was given, notice of an act of bankruptcy by such bankrupt committed.

Though the bill or note upon which the bankrupt is liable, be not due at the time of the bankruptcy, it may still be set off, on the principle that it is debitum in præsenti, solvendum in futuro. A. for goods sold to him by B., accepted two bills; the first due 6th November, 1796; the second, the 9th March, 1797. On 10th November, A. indorsed to B. another bill, as a further security, and B. undertook to pay over the balance to A. after discharging the amount of the first bill. B. received the proceeds of the bill so indorsed, and afterwards, and on 13th December, 1796, A. became bankrupt. His assignees having brought an action for money had and received, to recover the balance so agreed to be paid over by B., it was held that B. might set off that balance against his demand on A.'s acceptance due 9th March, 1797. Per Grose J. "It is objected that the defendant cannot set off the 1701. (the balance) because it is contrary to his express agreement; but consider that the bankrupt by his agreement was bound to pay his acceptance at a future day, but that his bankruptcy disabled him; that was a credit on one side, and credit was constituted on the other by giving a bill which became due at a subsequent time. It is clearly, therefore, a case of mutual credit, and it is just that one demand should be set against the other." Atkinson v. Elliott, 7 T. R. 370. But where a bankrupt previously to his bankruptcy, deposited a bill with the defendant, to whom he was indebted, not as a satisfaction of the debt, but as a deposit for the purpose of raising money on it, and the defendant made some advances, but not to the full amount; the assignees having tendered the amount of the money so advanced, brought trover, and it was held that this was not a case of mutual credit, and that the conduct of the defendant was a gross breach of trust, there being an express understanding that this bill was not to go into the general account. Key v. Flint, 8 Taunt. 21. 1 Moore, 451. S. C. On petition the Lord Chancellor was of the same opinion. 1 Swanst. 30.

Where one Wagstaff accepted a bill drawn on him by the bankrupts, which did not become due until after the commission, and, which when due was paid by him, and was a debtor to the bankrupts for goods sold on credit, which credit had not expired at the time of the bankruptcy; it was held to be within the statute as to mutual credit. Per Lord Erskine C., "The bankrupt being a creditor of the petitioners, drew a bill upon them before his bankruptcy: which bill they accept. Is not this a mutual account? mutual to all intents and purposes?" Ex parte Wagstaff, 13 Ves. 65. So, where Lord Cork gave the bankrupt his acommodation notes, upon a written under

taking to indemnify, and paid the notes after the bankruptcy; he was allowed to set off the payment against a demand of the bankrupt for business done. Ex parte Boyle, Co. B. L.

542. and see Arbouin v. Tritton, Holt, 408. In an action by the assignees of a bankrupt, referred to an arbitrator, he found specially as follows. That the defendant had before the bankruptcy, accepted bills drawn upon him by the bankrupt to a considerable amount; that the bills had been paid away to creditors of the bankrupt, that at the time of his so accepting the bills, the defendant, as the agent of the bankrupt, had in his hands monies of the bankrupt; to the full amount of the sum for which the bills were drawn; that these monies had not been withdrawn from the hands of the defendant before the bankruptcy; and that after the bills had become due, and before the bankruptcy, the holders, in order to relieve the defendant from his responsibility to them, consented to take, and did take from the defendant, a composition upon the acceptances; and upon payment thereof by the defendant the bills were delivered up the defendant, to which arrangement the bankrupt was not a party. The arbitrator's doubt was, whether the defendant ought to be allowed to set off the full amount of the bills, or the amount of composition only. The court of K. B. were of opinion, that he was entitled to set off the full amount, for that, as between the bill holders and the bankrupt, there was a full and complete payment, and that it was a gift to the defendant of the difference between the full amount and the composition. Stonehouse v. Read, 3 B. & C. 669.

In order to set off a debt due upon a bill or note, indorsed to the party claiming a set off, it must appear that it was indorsed to him before the bankruptcy, though it is not essential that, at the time the bankrupt gives credit, he should know that the bill or note has been indorsed to the other party. Hankey v. Smith, 3 T. R. 507. (n.) In order to constitute mutual credit, it is not necessary that the parties mean particularly to trust each other in that transaction; for if a bill of exchange, which is accepted, be sent out into the world, credit is given to the acceptor by every person who takes the bills. Per Buller J. Ibid. Where the defendants being sued by the assignees of a bankrupt, offered in evidence certain bills accepted by the bankrupt, and overdue, and unpaid; but did not prove upon what consideration the bankrupt accepted them, nor at what time nor upon what consideration the bills came to the defendants' hands, nor that their names were on them, nor that there was any original connexion between the defendants and these bills; it was held by the court of C. P. that these acceptances did not constitute a set off. Per Gibbs J. "I will not pretend to say whether if the facts were such as suggested by the defendants, they might be entitled to hold it as a mutual credit; but I think, that this is a case in which

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