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the interest due upon the original debt from the date of the commission issued against D., up to the day on which the dividend was declared under A.'s bankruptcy (r).
So if there be several sureties, who are all bankrupts, proof may be made for the whole debt under each fiat (s). But the creditor shall not have more than “one satisfaction for his debt” (t).
Where a partnership is entered into between the principal and his surety, after a separate liability existed in both, in respect of goods sold to the principal when he was a separate trader, and a fiat issues against the principal and surety before the debt is discharged, the creditor has no right of proof against the joint estate of the firm, unless there was an express or implied agreement between all the parties that the joint liability of the firm should be substituted for the individual liability of the parties (u). And where the principal, in the names of himself and his partner, wrote a letter to the creditor, requesting his forbearance for a time, stating that he and his partner were about to dispose of their business, in order to discharge all their pecuniary engagements, and the creditor gave the required indulgence, but gave no answer to the letter; it was held, that such letter did not amount to a proposal on the part of the bankrupts, that the debt should be considered a joint debt; or even if it could be so considered, was there any assent to such proposal on the part of the creditor (v).
A surety may claim the benefit of any incident of which a surety is entitled to avail himself for his own relief; and upon the surety's bankruptcy, the same
(1) Ex parte Martin, 2 Rose, and see ex parte Rushforth, 10 87; and see ex parte Reed and Aldrich, 3 Deac. & Ch. 481.
(u) Ex parte Hitchcock and (s) Ex parte Leers, 6 Ves. 644. Rogers, 3 Deac. 507.
(t) Per Lord Hardwicke, C., in (v) Ex parte Hitchcock and ex parte Wildman, 1 Atk. 109;
benefit attaches to his assignees. If the surety have become responsible to the creditor, through the default of the principal, and a subsequent arrangement is entered into between the creditor, principal, and surety, by which the creditor agrees to take from the principal a sum less than that which was originally due from him, and for which the surety was liable, and default is made in payment of the latter sum, in consequence of the bankruptcy of both principal and surety, the creditor will be allowed to prove under the fiat of the surety for the smaller sum only, the original contract of the surety not being revived by the failure of the second (w).
OF THE RIGHTS AND REMEDIES OF THE CREDITOR
WITH RELATION TO PERSONS CLAIMING UNDER
The devisee of a surety who had become responsible for the performance of covenants entered into by the lessee of land with his lessor, is not liable to an action of debt under the statute 3 & 4 Will. 4, c. 14, unless the relation of debtor and creditor existed between the lessor and devisor in the lifetime of both; thus, where lands were demised to P. for a term, determinable on the lessor's death, and S. as surety for the lessee, joined him in a covenant in the lease, whereby they jointly and severally covenanted for themselves and their heirs, that S. and P., or one of them, or their heirs, executors, or administrators, would pay the rent reserved, and
(w) Ex parte Powell, i Deac. 378; S. C. 2 Mont. & Ay.533.
also a further rent as liquidated damages, if the land should be farmed contrary to the covenants of the lease ; and after S.'s death, rents of both kinds became due: it was held, that the surety's devisees were not liable for any of the sums due; for the Statute was not meant to give creditors a remedy against devisees for the recovery of damages for breaches of covenants or contracts, made by their testators; and although damages for the breaches of covenant declared on, were liquidated damages, and therefore in form might be sued for in an action of debt, they were not the less in substance damages (x).
As a party who receives an indemnity has no claim until he has been damnified, so neither can he, upon the insolvency of the party in respect of whose acts the indemnity had been given, call upon the representatives of the party who had given the indemnity, to set apart (by way of anticipation) a sum of money out of the assets of such last-mentioned party, to answer what might be found due from the principal on the settlement of accounts between him and the creditor (y).
Although the surety may, upon the bankruptcy of his principal, upon payment to the creditor of what is due to him from the bankrupt, restrain the creditor from signing the bankrupt's certificate of conformity (2), yet it would seem that an assignee of the debt from the surety, after the date of the fiat, has no such power to control the legal right of the creditor to sign the certificate, the equitable right of such assignee not having accrued until after the bankruptcy (a).
(x) Farley v. Briant, 3 Ad. & Ell. 839.
(y) Antrobus v. Davidson, 3 Meriv. 569.
(2) See ante, pp. 96 & 97.
(a) See ex parte Herbert, 2 Glyn & Ja. 66; ex parte Taylor, i Glyn & Ja. 399.
OF THE RIGHTS AND REMEDIES OF THE CREDITOR,
WITH RELATION TO THE PRINCIPAL, WHERE THERE IS A SURETY (6).
Where the creditor may maintain assumpsit against the principal, in respect of the debt due from him, a contract by the surety which is under seal, to which the principal is no party, does not by operation of law extinguish the simple contract debt of the principal (c).
A creditor has a right to avail himself of all collateral securities from third persons, to the extent of 20s. in the pound upon his actual debt (d); and if the principal is bankrupt, and the creditor has security in his hands from a surety, as a mortgage (e), or a bill of exchange bearing his acceptance (f ), or a joint bond (g), or a joint promissory note (h) from the bankrupt, and a third person, (unless such bankrupt and the joint obligor in the bond, or the joint maker of the promissory note, are partners (i), ) the creditor is not compelled to make that security available, but has a right to be admit
(b) The rights and remedies of the creditor, with relation to the principal, are in part included under the title, “Of the Rights and Remedies of the Creditor with relation to the Surety.” Ante, p. 84, et seq.
(c) See White v. Cuyler, 6 T. R. 176; S. C. 1 Esp. 200.
(d) Ex parte Parr, 18 Ves. 65;
S. C. 1 Rose, 76.
(e) Ex parte Parr, supra.
(f) Ex parte Wildman, 1 Atk. 109.
(g) Ex parte Bennett, 2 Atk. 527.
(h) Ex parte Crosfield, 2 Mont. & Ay. 543; S. C. i Deac. 405.
Ex parte Crosfield, supra.
ted to prove against the estate of the principal for the whole amount of his debt, without deducting the value of the security; the deduction of a security never being made in bankruptcy, but when it is the property of the bankrupt.
Nor will a creditor be prevented from receiving dividends on the whole amount of his proof, provided he does not altogether receive more than 20s. in the pound, in a case where the surety, subsequently to such proof, makes the creditor a payment in reduction of his liability, if such payment by the surety falls short of the entirety of the debt, and is not accepted by the creditor in discharge of the entirety (0)
Where C., D. and E., who were partners in trade, and indebted to their bankers in the sum of 1,0001., being desirous of procuring from their bankers á further advance of money, entered into a joint and several bond to the bankers, in which S. joined as a surety, conditioned for the payment to the bankers of the sum of 5,0001. on demand, with interest from the date of the bond; and the surety having died, a suit was instituted by the bankers to administer his estate, under which it was found that it was the intention of the partners, the co-obligors in the bond, that the bond should be held by the bankers as a security for the general balance that should from time to time be due to them from the partners; and that it was the intention of the surety that the bond should be a security only for the particular balance due to the bankers at the date of the bond ; and that the debt for which the surety had made himself responsible, had been discharged by payments made by the partners subsequently to the date of the bond, beyond the amount of the then
(1) Ex parte Coplestone, 3 Deac. 546.