and the other afterwards obtain his certificate, the party paying (24) cannot recover any of the money so paid from the other; for as to his own acceptances the party paying was bound by his engagement to provide for them; and as to the other's, they were provable under his commission, and therefore his certificate is a discharge.

And it is immaterial whether the acceptances exchanged. be the acceptances of the parties themselves, or of (25) other persons.

Nor is it (26) essential that the bills exchanged should agree precisely in amount, or in the times at which they respectively become due; any difference, however, in these respects is evidence of the bills not having been given in exchange for each other.

But the money payable upon such counter acceptances, will (27) not be a good petitioning creditor's debt to support

(24) Vide Cowley v. Dunlop in the last note.

(25) Buckler v. Buttivant, 3 East's Rep. 72. The defendants gave the plaintiff their bilis, accepted by third persons, in exchange for the plaintiff's acceptances of bills drawn by the defendants on him. Each bill tallied in amount with that for which it was exchanged, excepting that in one instance two bills were given in exchange for one of the aggregate amount of both; and in another instance there was a difference (between the bills last exchanged) of a few shillings which were paid at the time, in order (as it was expressed) "to finish the transaction." They also agreed in dates, excepting that in two instances bills were made payable two days earlier than those for which they were respectively exchanged. And the defendants' letters, in which they enclosed their remittances, always spoke of "valuing" on the plaintiff "for the same amount:" and the whole correspondence pointed at nothing else than an exchange of paper. The defendants became bankrupt; when the commission was issued the plaintiff had paid the whole amount of his acceptances to the holders, excepting £49, and he proved the money so paid, under the commission. He afterwards paid the balance of £49, and brought this action for money paid, to recover that sum. All the bills received by the plaintiff from the defendants were dishonored. A verdict was found for the plaintiff, subject to the opinion of the court. The court held that this was an absolute exchange of acceptances; that each party's remedy against the other was upon the other's bills only; and that therefore this action, which was founded on an implied promise, and not on the bills, could not be supported. Postea to the defendant. Vide Toussaint v. Martinnant, 2 Term Rep. 100.

(26) Vide Buckler v. Buttivant, in the last note.

(27) Sarratt and another v. Austin, 4 Taunt. 200. In trover by the assignees of a bankrupt against the sheriff for goods taken in execution the only question was as to the sufficiency of the petitioning creditor's

a commission; unless it appear that the petitioning creditor has taken up his own acceptances.

And though such counter acceptances may be proved, yet the party who has given the bankrupt his own acceptances in exchange, will not be allowed to (28) receive a dividend upon such proof, .until he take up his own accept

ances.

debt. He and the bankrupt had drawn two bills on each other of precisely the same tenor and dates, and each had accepted the other's bills. Before any of the bills became due, the bankrupt committed an act of bankruptcy, upon which a cammission was issued founded upon the acceptances so given by the bankrupt. None of the bills was due or paid when this action was brought. A verdict was found for the plaintiffs, with liberty to the defendant to move to set it aside and enter a nonsuit. On rule nisi accordingly and cause shewn, three manuscript cases were cited to shew that where there are cross acceptances neither party can prove under a commission of bankruptcy, until he has taken up his own acceptance. Mansfield C. J. said, "If those cases had not been mentioned, I should have had no doubt that either party might prove; that the debt is barred by the certificate has been decided; why is it barred? because it might have been proved under the commission : it is strange to say then that it cannot be proved; either the one or the other must be wrong." And after time taken to consider, his Lordship, in delivering the opinion of the court, said, this question depends on the construction of 7 Geo. 1. c. 31. and 5 Geo. 2. c. 30. taken together: the preamble of the former act only contemplates the case of bills and other securities being taken for goods sold, and has not the least mention of their being taken where a debt is not clearly due. The act does not apply to debts in their nature contingent. This debt, though not contingent on the face of the instrument, is thus far in its nature contingent, that, until the party taking the bankrupt's acceptance have paid his counter bill, the court of chancery will restrain him from receiving any dividend: and it would be a singular construction of the statutes that a man, who will not be entitled to receive a shilling out of the bankrupt's estate, unless he take up his own acceptance, should be able to petition for a commission. And no case being cited to shew that he can, the court upon principle think the debt not sufficient to support the commission. Rule absolute.

The enacting part of 7 Geo. 1. c. 31. § 1. only requires that the security be taken upon good and valuable consideration. And according to Rolfe v. Caslon, (ante, p. 298.) a counter acceptance is a good consideration to enable the holder of the bankrupt's acceptance to prove ; though from this case it appears that it is not so, to enable him to petition.

(28) Whether the not having taken up the counter acceptance will prevent the proof the bankrupt's acceptance, or whether it will only occasion a suspension of the dividend, is a point upon which there have been contradictory decisions; and the text writers have adopted different opinions. In Cooke, B. L. p. 162. it is considered as settled that the proof cannot be permitted until the counter bill be taken up. Mr. Cooke cites ex parte Brown, 23d of December, 1797. That was a

So where a banker from time to time advances money and accepts and discounts bills for a customer, and in return, the latter remits bills drawn by him and accepted by others, and afterwards becomes bankrupt, the banker, though his own acceptances may not then be due, (29) may prove the bills so remitted, under a commission issued against the cus

tomer.

But it seems that mere reciprocal accommodations without any specific exchange of bills or notes, will (30) not

petition to prove upon an indemnity bond forfeited before the bankruptcy, but the surety the petitioner had not paid his own bond at the time of the petition being heard. The chancellor said, "The debt cannot be twice proved, there is no equity, but by taking up the original bond ;" and he dismissed the petition. It must however be observed that bere the payment of the money upon the original bond must have been the very condition upon which the bond of indemnity was to be paid. This was the case of principal and surety, which that of cross acceptances has been decided not to be. In Cullen, p. 134. and in Montagu, vol. i. p. 139. it is said that the proof is allowed, but the dividend withholden. And see the judgment of Mansfield C. J. in Sarratt v. Austin, ante, p. 300. n. (27) to the same effect. See also ex parte Bloxham in the next

note.

(29) Ex parte Bloxham, 8 Ves. 531. The bankrupt kept an account with the Bloxhams as his bankers; in the course of which they advanced money, and accepted and discounted bills for him; and he, from time to time, remitted bills to them drawn by him and accepted by others; these remittances were made previously to the bankruptcy, some before and some after the acceptances of the bankers. At the date of the commission the bankers were under acceptances, and they held bills so remitted: neither the acceptances or bills being then due. On petition, the chancellor, after referring to ex parte Maydwell, Cooke, B. L. 159. in which Lord Thurlow held that the liability by the acceptance was a good consideration for a promissory note, ordered that the bankers should be permitted to prove the bills upon which the bankrupt's name appeared, to cover their acceptances. See also Bosanquet v. Dudman, post.

(30) Ex parte Walker, 4 Ves. 373. Various accommodation transactions had for many years taken place between Caldwell and Co. and the Brownes. The former were the bankers of the latter. A commission of bankruptcy issued against Caldwell and Co. in March, 1793, and in the same month the Brownes became bankrupt. An account was then taken of the mutual debts and credits. That account consisted, first, of a cash account, which included good bills as well as payments in cash; and secondly, of a bill account which related exclusively to bills which had been passed by one house to the other, and which were all ultimately dishonored. The result was, that on the cash account the Brownes were indebted to Caldwell and Co. in the sum of 40,7167. and that on the bill account Caldwell and Co. had received from the Brownes bad bills to the amount of 305,149l. 19s. 10d. and the Brownes had received from Caldwell and Co. bad bills to the amount of 204,9107.

create a debt on either side; each party, in such case, becomes surety for the other, and until obliged to pay bills or notes negotiated by the other, acquires no right to sue the other, or in the event of his bankruptcy, to prove under his commission.

And even after he has been so obliged to pay bills or notes negotiated by the other, his right of action, or of proof, does not arise on the other's bills or notes, but in respect of the money paid to the use of the other.

And if both become bankrupt, and the holders of the bills or notes negotiated by each, prove, and receive the dividends upon them, under both commissions, though the one party may have negotiated bills or notes to a greater amount than the other, the assignees of neither will be permitted to (31) prove or claim, under the commission of the other, any

58. Of the bad bills received from Caldwell and Co. the Brownes had negotiated bills to the amount of 196,5891. 6s. 4d. and of those received from the Brownes Caldwell and Co. had negotiated bills to the amount of 126,855l. 11s. 10d. having retained the residue (viz. 178,2941. 8s.) at the request of the Brownes. All the bills received by the Brownes were discountable, and upon most of them they had received the full value; and Caldwell and Co. had no consideration for them but the bad bills received from the Brownes. All the bills (or nearly so) which the Brownes had negotiated were proved against the estate of Caldwell and Co. and by far the greater part against the estate of the Brownes also; but to a large amount, viz. 80,000l. the Brownes had deposited bills as a security for the payment of a much smaller sum, so that the proof against them in respect of those bills was only for the sum really due, whereas against Caldwell and Co. the proof was for the whole sum payable on the bills and the consequence of this and of the unequal negotiation of cach other's bills, was, that a much larger sum was proved against Caldwell and Co. in respect of bills negotiated by the Brownes, than against the latter in respect of bills negotiated by the former. And Caldwell and Co. on petition claimed the right to prove the bills which still remained in their hands in order to be reimbursed the difference. But the chancellor said, "Till Caldwell and Co. pay all the creditors of Browne, who are likewise creditors of theirs, 20s. in the pound, they would be, by proving, sharing with the creditors of Browne, who are likewise creditors of theirs. If I allow this petition I must do two things that are quite impossible. I must hold that the bankruptcy creates a debt which did not exist antecedently; and I must hold that the same debt may be proved twice." The proof was confined to the balance on the cash account only. This abstract is taken not only from Mr. Vesey's but also Mr. Cooke's report of this case. Cooke, B. L. 162. See also ex parte Earle, 5 Ves. 833.

The assignees of

(31) See ex parte Walker, ante, p. 301. n. (30), Caldwell and Co. were not permitted to prove, either on the bills which

dividends which they may have paid on the bills or notes negotiated by the other; because it would be permitting the same debt (to the extent of such dividends) to be twice charged on the same estate.

If a creditor receive bills from his debtor, and negotiate them, and both become bankrupt, the creditor (33) will not be allowed to receive dividends upon his debt until he take up the bills which he has so negotiated; for otherwise the debtor's estate would be charged with both the debt and bills.

Though the drawee of a bill may have no effects of the drawer's in hand, yet if it be drawn on account of a person who has, and the drawee accept it on his account, he renders himself responsible to the same extent as that person

remained in their hands, because no consideration had been given for them; or for money paid, because it had been paid after the Brownes' bankruptcy, and because after full proof by the holders of the negotiated bills, there would have been a double proof as to part. The decision would have been the same, had the case arisen subsequently to the 49 Geo. 3. c. 121. That statute.only applies where the surety pays the whole debt, or a part in discharge of the whole; it does not embrace the case of a surety, or (if a bankrupt) his assignees, paying part of the debt, after the creditor has proved and received dividends under the principal's commission; such surety, or his assignees, can derive no advantage from the creditor's proof; nor can he or they make any distinct proof in respect of the part so paid, because the creditor has already proved, and to the extent of such part there would be a double proof against the principal's estate. In ex parte Walker the Caldwells had clearly sustained an injury; but the decision only related to the right of proof, and nothing was said as to the right of action, which, it would seem, the assignees of each party had against the other for the dividends paid by them on the bills which the other ought to have taken up: nor does the right of action, in such case, appear to have been affected by the 49 G. 3. c. 121. § 8.

(33) Ex parte Metcalfe, 11 Ves. 404. Palmer had received from Williamson in cash and bills 64241. 9s. 3d., and Williamson had received from Palmer in cash 5824l. 19s. 7d. Both became bankrupt. Palmer had negotiated the bills; some of which to the amount of 10981. were dishonored by the drawee, and Palmer's assignees contended that the amount of these bills should be deducted from the 64241. 9s. 3d. which would reduce the sum received by him to 53261. 9s. 3d., making a balance of 4987. 10s. 4d. in his favor, which balance they contended they were entitled to prove against Williamson's estate. On petition to prevent such proof, Lord Eldon C. ordered that the proof of the 4981. 10s. 4d. should be allowed; but that Williamson's assignees should retain the dividends upon such proof in order to exonerate that estate from any demand which might be made in respect of the bills, which should have been taken up by Palmer.