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a bankrupt, who had proved under the commission, and satisfaction was thereupon entered on the record, it was held, not to be a payment of part of the debt, in discharge of the whole (k). And where a surety who had become bound in a bond for the bankrupt, joined the bankrupt, after he had obtained his certificate, in a new bond to the credi
(9) The case of Soutten v. Soutten was an action brought by the surety against the principal to recover money paid to the creditor, the same being, as he alleged, not the whole of the creditor's demand, or a part in discharge of the whole, but merely a sum of money in order to discharge himself from his personal liability, and the plaintiff therefore contended that it did not fall within the provisions of the Statute, which enabled him to prove, or to stand in the place of the creditor, and that, consequently, the defendant was not discharged from his liability, and the plaintiff had a verdict. Notwithstanding some expressions in the judgment of the Court, as reported in Barnewall and Alderson's Reports, which would seem to imply the contrary, the verdict which the plaintiff obtained was (as it would seem) entirely owing to the defendant's not having pleaded his bankruptcy and certificate. (See Westcott v. Hodges, 5 B. & Ald. 12, stated infra ; and Lord Ellenborough's judgment in Stedman v. Martinnant, 12 East, 664.) Whether the surety thinks proper to avail himself or not of the power given to him under the Statute, of“ standing in the place of such creditor as to the dividends and all other rights which such creditor possessed, or would be entitled to in respect of such proof” (see section 52 of stat. 6 Geo. 4, c. 16), is totally immaterial to the principal, who, if the surety has the power “of standing in the place of the creditor," is discharged from all claims as well of the surety as the creditor; thus, where P., with two persons as his sureties, entered into a bond to the king, the condition of which was that P., as sub-distributor of stamps, should well and truly account for all stamped vellum which he should receive, and should pay to the commissioners the duties payable for such stamped vellum, and also the price of such vellum, together with all monies which he should receive on account of the duties on personal legacies and stage coaches; and P., as distributor, became indebted to the king in a certain sum, and afterwards became bankrupt and obtained his certificate; and a scire facias having issued upon the bond, one of the sureties paid a sum of money to compromise the suit, and a certain other sum in defending the same: it was held, in an action brought by the surety to recover these sums from the bankrupt, that the plaintiff was a personal surety, or liable for a debt of the bankrupt, within the meaning of the 49 Geo. 3, c. 121, s. 8, corresponding to section 52 of the stat. 6 Geo. 4, c. 16, and consequently that the latter was protected by his certificate. (Westcott v. Hodges, 5 B. & Ald. 12.)
tor, and the old bond was thereupon delivered up to the surety, it was held, that this was not equivalent to payment by the surety, so as to enable him to prove under the bankrupt's commission (1).
The 52nd section of the act of 6 Geo. 4, c. 16, above referred to (m), applies to equitable as well as legal sureties; thus, a person who indorses (n), draws (), or accepts (p) a bill of exchange for the accommodation of the drawer, may, after payment made by such indorser, or acceptor, prove under the fiat against the bankrupt drawer. So if both the drawer and acceptor are both sureties for a third party, and the drawer, upon the bankruptcy of the acceptor, pays the amount of the acceptance, he is entitled to prove the amount under the bankruptcy of the acceptor(9), notwithstanding the drawer had received an indemnity against any loss he might sustain in consequence of his having drawn such bill (r).
So where a person joins another in a bond to the crown, as a surety for the latter's duly accounting, he is a surety within the
( Ex parte Serjeant, 1 Glyn (p) Stedman v. Martinnant, 12 & Ja. 183; S. C. 2 Glyn & Ja. East, 664; S. C. 13 East, 427;
Vansandau v. Corsbie, 8 Taunt. (m) See ante, pp. 120 & 121. 550; ex parte Lloyd, 1 Rose, 4;
(n) Bassett v. Dodgin, 9 Bing. S. C. 17 Ves. 245; S. C. 2 J. B. 653 ; Haigh v. Jackson, 3 Mees. Moo. 602; S. C. 3 B. & Ald. 13. & W.598,(1).
(9) Ex parte Hunter, 2 Glyn & (0) Ex parte Lobbon, 17 Ves.
(r) Ex parte Hunter, supra.
(1) In this case, the defendant having a sum of money owing to him by a third party, the plaintiff, at the defendant's request, and for his accommodation, drew a bill of exchange on that party for the amount, which the latter accepted; the plaintiff indorsed the bill and handed it over to the defendant, who also indorsed and negotiated it. Before the bill became due, the defendant had become bankrupt, and the bill being dishonoured, was taken up by the plaintiff; and it was held, in an action brought to recover the amount of the bill of exchange so paid by the plaintiff, that the amount of the bill paid by the plaintiff was proveable by him under the defendant's fiat, and therefore the right of action against the defendant was barred by his certificate.
meaning of the act(s). So where upon the dissolution of a partnership, one partner retires, and the remaining partner agrees to 'indemnify the outgoing partner against the partnership debts, and the outgoing partner is, after the bankruptcy of the remaining partner, compelled to pay partnership debts, such payments are proveable by the outgoing partner under the fiat issued against the remaining partner (t); and this, notwithstanding the retiring partner knew the firm to be insolvent at the time he received the indemnity (u). So a solvent partner, winding up the partnership concerns, is entitled to prove under a commission against bankrupt partners, the share of the loss or deficiency which each partner ought to have borne as a debt against his separate estate (v). And if the surety fails to prove his debt, the certificate of the bankrupt is a bar, as well to the principal debt, as to any consequential damage arising from that debt not having been paid (w).
The surety is only entitled to money paid, and interest (when the debt carries interest), up to the date of the fiat (x), unless there be a surplus (y). And even where there is a surplus, he will not, in a case where he has been called upon to pay, and pays the debt of his principal subsequently to the bankruptcy, be allowed interest on his payment, unless the creditor himself could have claimed such
(s) Westcott v. Hodges, 5 B. & Ald. 12.
(t) Wood v. Dodgson, 2 M. & Sel. 195; S. C. 2 Rose, 47 ; parte Ogilvy, 2 Rose, 177 ; S. C. nom. ex parte Ogilby, 3 Ves. & B. 133; and see Dally v. Wolferston, 3 Dowl. & Ry. 269; Aflalo v. Fourdrinier, 6 Bing. 306 ; Wright v. Hunter, 1 East, 20.
(u) Ex parte Carpenter, Mont. & Maca. 1.
(v) Ex parte Watson, Buck.449;
S. C. 4 Madd. 477; and see ex parte Taylor, 2 Rose, 175; and the observation of Sir G. Rose, in ex parte Adams, 3 Mont. & Ay. 157.
(w) Vansandau v. Corsbie, supra; Brind v. Bacon, 5 Taunt. 183.
(x) Butcher v. Churchill, 14 Ves. 567.
(y) Ex parte Pring, 2 Ves. jun. 302 cit. ; Butcher v. Churchill, supra.
interest (2). But if the debt is secured by the bond of the principal, and the surety has obtained an assignment of it for his benefit, he may (it would seem) prove to the extent of the penalty, if he has been damnified to that amount (a).
The Insolvent Debtors' Act (b) discharges the insolvent only from the demands of persons who are creditors of the insolvent at the time of presenting and filing his petition (c); if therefore a surety for an insolvent pays the debt subsequently to the insolvent's discharge, the surety may recover from the insolvent the payments so made by him to the creditor; for when the insolvent presented and filed his petition, there was no debt, as between the insolvent and the surety (d); and it makes no difference (where the payment by the surety, is subsequent to the insolvent's discharge), whether the sum, for the payment of which the surety engaged to be answerable, accrued due before (e), or after (f), the insolvent's discharge.
So where the surety paid after the discharge of the principal under the Lords' Act (g), it was held, that the principal was still liable to the surety in respect of such payments (h).
It was held, that a surety was not entitled to hold his principal to bail upon an affidavit of debt for money paid to his use, where having become surety for his principal before the principal's discharge under an insolvent debtor's act, and having been called upon to pay the money, he had, after the principal's discharge, given the creditor a (2) Ex parte Houston, 2 Glyn Page v. Bussell, 2 M. & Sel. 551; security for his debt; notwithstanding the surety swore, that such new security was accepted as payment and satisfaction of the old debt, it not being shown that the principal was a party to the transaction; for to support the action, the debt must have been extinguished, either by an actual or a virtual payment of money by the surety to the defendant's use (i).
and see Hocken v. Browne, 4 Bing. (a) Butcher v. Churchill, supra. N. C. 400 ; Abbott v. Bruere, 5 (6) 7 Geo. 4, c. 57.
Bing. N. C. 598. (c) See sections 10 and 46; and (e) Hocken v. Browne, supra. see also 1 & 2 Vict. c. 110, 8. 35. (f) Abbott v. Bruere, supra.
(d) Freeman v. Burgess, 4 Bing. (9) 32 Geo. 2, c. 28. 416 ; S. C. 1 Moo. & P. 91; (h) Macdonald v. Bovington, 4 Powell v. Eason, 8 Bing. 23; T. R. 825.
& Ja. 36.
OF THE RIGHTS AND REMEDIES OF THE SURETY,
WITH RELATION TO PERSONS CLAIMING UNDER THE PRINCIPAL.
A SURETY to whom his principal has conveyed an estate by way of mortgage, to indemnify the surety in respect of any payments he might be called upon to make in consequence of his having so become surety, is, it would seem, after payment by him of the debt of his principal, where the estate is subject to a prior mortgage, entitled, like other persons who have an interest in the equity of redemption, to redeem the mortgaged estate. And if the surety, after the mortgage is made to him, has been prevailed upon by the principal to become surety for a sum beyond the sum for which the mortgage was originally made to him, the heir of the principal will not, upon bill brought by him for that purpose, be allowed to redeem, except upon payment of what the surety may have paid in respect of both suretyships ; upon the equitable rule, that he who asks equity, must do equity (j).
© Taylor v. Higgins, 3 East, clay v. Gooch, 2 Esp. 571. 169; Maxwell v. Jameson, 2 B. (7) Saint John v. Holford, i & Ald. 51, overruling semble Bar- Ch. Ca. 97.