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application of the surety, be restrained from signing the certificate, where he has not signed it(); and if the creditor has signed it, when he has been desired by the surety not to do so, his name will be directed to be erased from the certificate (c); for after payment and notice, the signing of the certificate is an important act of administration, as to the property, concerning which the creditor has no further interest; and the consequence of it being to release the person of the principal debtor from the arrest of the surety, and his future effects from execution..
Where a bond is given by the principal and his surety, conditioned for the payment of a sum of money by instalments, and the obligee proves for the whole debt under the fiat of the principal, and receives a dividend on the amount of such debt, the creditor is entitled to recover from the surety the several instalments as they become due, making a deduction in each instalment proportionate to the dividend, and the surety is not entitled to have the whole dividend applied in discharge of the instalments as they severally become due, to the extent of the dividend received, but only rateably, in part payment of each instalment, as it becomes
The sureties for à receiver are answerable for all monies whether in respect of principal or interest, as the receiver himself was liable to pay; but in a case where the receiver had been bankrupt, with the knowledge of all parties, for a considerable length of time, and no steps had been taken to compel the passing of his accounts, Lord Eldon refused to make the sureties pay interest (e).
(6) Ratcliffe v. Gunson, 6 Madd. (d) Martin v. Brecknell, 2 M. & 193; and see ex parte Herbert, 2 Glyn & Ja. 66; ex parte Taylor, (e) Dawson v. Raynes, 2 Russ. i Glyn & Ja. 399.
(c) See ex parte Herbert, supra.
Although a lessee who becomes bankrupt before the expiration of his lease, is discharged from his obligations under the lease, by virtue of the 75th section of the late Bankrupt Act (f); yet a surety who has joined in the lease with the lessee (g), or who has entered into a bond with the lessee to the landlord, for the performance of the covenants contained in the lease (h), continues liable to the landlord for breaches of covenant occurring after the date of the fiat ; there being nothing in the act to extend the defeazance to his case, and the object of the act being to discharge the bankrupt from his obligations, but not to disturb the claims of creditors on other persons, as sureties, from the failure of such debtors or bankrupts.
In a case where the official assignee of the bankrupt's estate became insolvent, having money in his hands due from the bankrupt's estate, the Court of Bankruptcy permitted the creditor's assignee to use the name of the chief registrars in suing the sureties upon the bond, upon giving them a proper indemnity (i).
The creditor has a right to make all his securities available, with the view to the complete liquidation of his demand (j); and where the principal has deposited with the creditor a bill of exchange, or promissory note, as a security for his debt, which the debtor has not indorsed, the Court of Bankruptcy will, on the bankruptcy of the depositor, and upon the petition of the creditor, order the assignees of the debtor to indorse the same, in order to enable the creditor to bring an action at
(f) 6 Geo. 4, cap. 16. (9) Tuck v. Fyson, 6 Bing. 321. (h) Inglis v. Macdougal, 1 J. B. Moo. 196.
(i) 'Ex parte Topham, i Deac. 192; S. C. 2 Mont. & Ay. 484.
(1) Ex parte Sammon, i Deac.
& Ch. 564; S. C. 1 Mont. 264 ; ex parte Wildman, 1 Atk. 109; ex parte Parr, 18 Ves. 65; S. C. 1 Rose, 76 ; ex parte Bennett, 2 Atk. 527; and see in the matter of Westzinthus, 5 B. & Ad. 817.
law thereon, he undertaking not to bring an action or suit at law or in equity thereon, against the bankrupt debtor or his assignees (h).
But the right of the creditor to his securities may be qualified by the contract of the parties; thus, if C. agrees with D. to advance him 1,0001., upon
receiving negotiable securities to that amount, and D. deposits with C. securities to the amount of 3,0001., and C. afterwards advances D. money to the latter amount, and among the securities deposited by D. with C., is an accommodation bill accepted by S. for 5001., S. will not be liable to the creditor in respect of his accommodation bill, if the remaining securities in the hands of C. are sufficient to realize the sum of 1,0001., to secure which amount was the specified purpose of the deposit(1); and upon payment by S. to C. of that sum, s. has a right to a transfer of those securities; or, should D. become bankrupt, S. has an equitable right to have the securities realized, and the proceeds applied to the liquidation of the 1,0001., and will be held responsible to C. only for the unsatisfied balance, not exceeding the amount of his bill (m). If, however, the securities had been deposited with C. to secure any general balance owing to him from D., then C. would be entitled to claim from S. the full amount of his note (n), unless C.'s debt had been reduced by payments received from P. or his estate, so as to reduce the debt of C. below the amount of S.'s note (0).
So if the surety be liable to the creditor to a (k) Praed v. Gardiner, 2 Cox, 295; ex parte Brook and Chat86.
teris, 2 Rose, 334. (1) See Vanderzee v. Willis, 3 (n) Ex parte Sammon, 1 Deac. Bro. C. C. 21; Paley v. Field, & Ch. 564; and see the judgment 12 Ves. 435; ex parte Vere, 2 of Erskine, C. J., in ex parte Vere, Mont. & Ay. 123; S. C. 4 Deac. supra; and see in the matter of & Ch. 295.
Westzinthus, 5 B. & Ad. 817. (m) Ex parte Vere, 2 Mont. & (0) Ex parte Sammon, supra. Ay. 123; S. C. 4 Deac. & Ch.
limited amount only, and the creditor gives credit to the principal debtor in a sum beyond that for which the surety engaged to be answerable, and a fiat in bankruptcy issues against the principal debtor, and the creditor goes in under the principal's bankruptcy, and receives dividends in respect of his whole demand, the dividends so received by the creditor under the bankruptcy of the principal debtor, shall go in reduction as well in respect of the sum for which the surety is liable, as the excess beyond that sum for which the surety is not liable, and the creditor will not be allowed to apply the dividends so received by him in reduction of that part of his demand for which the surety is not answerable, to the prejudice of those rights which the surety would have had, if the amount had been the same as the amount of the surety's liability ; but the dividends must be applied rateably upon the whole debt, as well upon that part for which the surety had engaged to be answerable, as upon that part which the creditor had advanced without security (p); thus, if P. and S. execute a joint bond to C., to secure to C. the repayment of all monies advanced by C. to P., and the bond contains an express condition that S. shall not be liable to a larger amount than 1,0001., and the creditor gives credit to P., the bankrupt, to the amount of 2,0001., and a dividend of 10s. in the pound is received by C. under the commission issued against P., moiety of the money so received by C. shall be considered to have been received in respect of the 1,0001. for which the surety was liable, and consequently C. will only be entitled to recover against S. the sum of 5001.(9).
An assignment by the principal of his effects to (p) Ex parte Turner, 3 Ves. Bardwell v. Lydall, 7 Bing. 489. 243; ex parte Rushforth, 10 Ves. (9) Ex parte Rushforth, supra ; 409; Payley v. Field, 12 Ves. 435; Payley v. Field, supra.
trustees, for the benefit of his creditors, pro rata, is referable to the same principle, it being considered in the nature of a bankruptcy; and the dividends received by the creditor must be applied by him rateably to the whole debt, as well the part covered by the guarantee, as the part left uncovered by the guarantee; for the payment is not payment in gross, but a payment specifically made by the trustees and received by the creditor, as so much in each and every pound of the whole amount of the debt (r). II. Where the surety is bankrupt, or insolvent.
By the statute 6 Geo. 4, chap. 16, a bankrupt may be discharged from all debts due at the time of issuing the commission, all that are certain to become due at a future time, and all that may or may not become payable by the bankrupt at a future time : in the latter case, where the contingency has not happened before the issuing of the commission, the commissioners, on application from the party with whom the debt has been contracted, may ascertain its value, and admit the party to prove; or if the contingency has happened before the value is ascertained, the demand then stands as if it had been debitum in presenti solvendum in futuro, and the creditor may prove in respect of such debt, and receive dividends, only not disturbing former ones” (s).
The word "debt," which occurs in the 56th section of the statute 6 Geo. 4, chap. 16 (4), and which
(r) Bardwell v. Lydall, supra. in Yallop v. Ebers, 1 B. & Ad. (s) Per Lord Tenterden, C. J.,
(4) The 56th section is as follows : “And be it enacted, That if any bankrupt shall, before the issuing of the commission, have contracted any debt payable upon a contingency, which shall not have happened before the issuing of such commission, the person with whom such debt has been contracted, may, if he think fit, apply to the commissioners to set a value upon such debt, and the commissioners are