missioners upon the joint commission, passes as well the separate as the joint estate of the two bankrupt partners; therefore the assignees on the separate commissions can make nothing of their action at law, and he would not suffer them to spend the estate in vexatious suits there; but if they would join in a bill in equity for an account of the separate estates, he would not hinder them.

If a partner sign the partnership signature to bills which, so signed he pledges or discounts for money borrowed by him for his separate use without its being brought into the partnership account, and upon a commission being issued against the firm, these bills are proved against the joint estate, it has been held upon petition that the joint creditors are not entitled to prove the amount of dividends paid upon the bills. Ex parte Cust. Cooke, 534, and see Wright v. Hunter, 1 East. 20.

fore.

It is settled, and is a resolution of convenience, that the joint creditors shall be first evern. 7.6. paid out of the partnership or joint estate, and the separate creditors out of the separate Ex parte Crowder, estate of each partner; and if any surplus of the joint estate, besides what will pay the as menjoint creditors, it shall be applied to pay the separate creditors; and if a surplus of the tioned beseparate estate, beyond what will satisfy the separate creditors, it shall go to supply any deficiency that may remain as to the joint creditors; but, for the ease of both parties, let it be referred to a commissioner in each commission, to take an account of the whole partnership effects, and the separate estate and effects of each of the partners; and if the commissioners find any thing difficult, they are to state it specially; and with regard to the surplus of the partnership effects, beyond what will pay the partnership debts, and the surplus of the separate effects, if any, above what will pay the separate debts, each side to apply to the court for such surplusses.

If there are two joint traders, and one of them becomes a bankrupt, the commis- Holt, Rep. sioners cannot meddle with the interest of the other, for it is not affected by the bank- 2. Sal. 59. ruptcy of his companion.

61. Easter, 7 W. 3.

C. J. Wid

Craven &

The defendant A. being indebted to the plaintiffs, became bound to them in several per Holt, bonds; and the said A. and the defendant B. were for several years co-partners, by dows and whose articles of co-partnership, A. was entitled to two-thirds of the whole stock, and B. Berman. to one-third: The said A. and B. became bankrupts, and a commission was awarded against them; the commissioners of the said bankrupts assigned all their estate to the defendant C. and others, refusing to let the plaintiffs, creditors of the bankrupts, come Easter in, and intend to divide the estate among the joint creditors of both the bankrupts, by 25 Car. 2. reason whereof the plaintiff's debts will be utterly lost.

The defendant insists, that it was agreed by indentures of co-partnership, that all such debts as should be owing on the joint account, should be paid out of the joint stock, and at the end of the partnership, each co-partner take and receive to his own use his share of the joint stock; and that the joint stock or trade should not be charged with the private or particular debts of either of the partners, but that each should pay their private debts out of their particular estates not included in the joint stock; that if both of the said parties should be living at the end of the first three years, of the six years, that the said B. should come in joint partner accordingly; and during the said joint trade, the co-partners became jointly indebted to the other defendants, C. &c. in 6000l. and that A. became indebted to the plaintiffs as aforesaid, without the consent of B. and the money due upon the said bonds was not brought into the account of the joint stock; and the said A. was only a surety, and received none of the money; and the defendant insisted that the joint creditors ought first to be paid out of the estate in partnership, and that the commissioners have no power to grant the joint estate to pay the plaintiffs, they being separate creditors of A. and if a surplus of the joint estate, after the joint creditors paid, then the plaintiffs can have but a joint moiety of such surplus towards their satisfaction, the said B.'s moiety not being liable to pay the said A. his separate Ꮞ Ꮓ

VOL. I.

Chan, Rep.

Term.

28 March, 1734.

Peter Goss

and John

Neaulme plaintiffs. fresnay

debts; and the debts then claiming were the proper debts of the said A. and yet, after all the joint debts are paid, there will be an overplus, so that thereby the said B. will be discharged, and have money paid unto him; but if the plaintiff and other separate creditors of A. be admitted to the joint estate, there will not be sufficient to pay the joint creditors, so that thereby not only B.'s estate will be applied to pay A.'s debts, but will be liable to the joint creditors. But there can be no division of the joint estate, whereby to charge any part thereof with the private debts of either party; and till the joint debts are paid, and till division made of the surplus, both parties are alike interested in every part of the said joint stock; that the commissioners have no power by the commission to administer an oath to the plaintiffs for proof of their debts, they claiming debts from the said A. only, and the commission is against A. and B. jointly, and not seve rally; and therefore cannot admit the plaintiffs creditors.

The court declared, that the estate belonging to the joint trade, as also the debts due from the same, ought to be divided into moietics, and that each moiety of the estate ought to be charged, in the first place, with a moiety of the said joint debts; and if there be enough to pay all the debts belonging to the joint trade, with an overplus, then such overplus ought to be applied to pay the particular debts of each partner; but if sufficient shall not appear to pay all the joint debts, and if either of the said partners shall pay more than a moiety of the said joint debts, then such partner is to come in before the said commissioners, and be admitted as a creditor for what he shall so pay over and above the moiety; and was decreed accordingly.

Four booksellers entered into partnership for carrying on a joint trade, and being then all in Holland, according to the custom of the country, appeared before a notary, and executed articles of co-partnership, declaring jointly and separately, that each had advanced 24,600 guilders, total 98,400 guilders, which sum was to pay all the debts they Sam. Du had then contracted, as mentioned in an inventory; but no debts should be paid not al. Com- mentioned in the said inventory, nor any debts which either of the co-partners might plainants. contract on his own private account; that a sum agreed on between them should be allowed for maintenance; and that all loss and gains should be equally shared and borne, with other usual covenants.

The co-partnership was carried on from November 1725 to May 1728, when one of the partners, for a sum agreed on to be paid him, quitted and released his claim to the other three, between whom the articles were continued and carried on, on the first conditions, and one of them was intrusted with the goods in shop and warehouse.

But he became profuse, and embezzled the co-partnership stock, and applied the same to his own use, and suffered the partnership debts to be unpaid; and having contracted private debts on his own account, became a bankrupt, and a separate commission was taken out against him.

The messenger took possession of the partnership goods, and the commissioners executed an assignment to the defendants, who in consequence thereof took possession of the partnership goods and books, and received several of the partnership debts, and were getting in the rest, with an intention to apply them to the payment of the separate creditors, whereas the goods are co-partnership goods, and ought to be applied to the co-partnership debts; and to make the plaintiffs satisfaction for what the bankrupt had embezzled for his own separate use, and the residue to be divided into equal parts, two-thirds to the plaintiff, and one-third to the bankrupt, to which he is entitled, and is to be part of his separate estate, this was the prayer of the plaintiff's bill, as that the defendants may be restrained from selling any part without the plaintiff's concur

rence.

The assignees admit the bill, and the articles, that they have taken possession and sold some of the stock without consent of the plaintiffs, and have set forth an account

in the schedule to their answer, of the stock, and submit to apply the estate as the court shall direct; and his Lordship was pleased to decree as follows:

1. That it should be referred to Mr. Lightbourn to take an account of the partner- Lord Talship debts received by the plaintiffs in Holland.

2. To take an account of the partnership estate in England, received by the assignees, or any for their use.

3. To take an account of the partnership debts owing by the bankrupt and the plaintiffs.

4. To cause an advertisement for the joint creditors of the bankrupt and plaintiffs to come in and prove their debts.

5. To take an account of what embezzlements the bankrupt has made of the co-partnership estate; and in taking accounts, plaintiffs and defendants to be examined on oath, to produce all books, &c. and to have all just allowances.

6. That what the master shall certify the co-partnership debts shall amount to, shall, in the first place, be paid by the plaintiffs and defendants to the joint creditors, in proportion to their debts, as far as the co-partnership estate in their hands will extend.

7. That if it shall appear any of the partnership estate remains in the plaintiffs and defendant's hands after the partnership debts are paid, then the master to divide the same into three parts.

8. And the plaintiffs are to take two-thirds; and out of the bankrupt's one-third part, they are to take what it shall appear he has embezzled of the partnership estate.

9. And if there shall be any residue of the bankrupt's third part, after the partnership debts, and the bankrupt's embezzlements are satisfied, then the same is to be paid to, or retained by, the assignees, for the benefit of the bankrupt's separate creditors. 10. The master may state any thing specially; and all parties are to be paid their costs of this suit out of the co-partnership estate, to be taxed by the master.

bot's de crce,

1742, Lord

On the 11th of September, 1742, a joint commission issued against Peter Powell and Dec. 23, Peter Powell the younger, of Exeter, and the commissioners executed an assignment Hardof the estate and effects to the assignees that were chosen, and they, by virtue of the wicke's said assignment, possessed themselves of all the joint and separate estate of the bankrupts.

And the said bankrupts, having several separate creditors, they the said creditors, in a petition to the Lord Chancellor, set forth their said several separate debts, and that they had applied to the commissioners to be admitted creditors, which they refused, as this was a joint commission, and they therefore prayed, that they might come in and prove their debts under the said joint commission, and that the commissioners might take joint and separate accounts of the joint and separate estates; and that what should be found on such accounts to belong to the separate estates, might be applied by the assignees towards satisfaction of the respective separate creditors; and that the petitioners might be paid their costs of the application by the assignees. Upon which petition, his Lordship ordered as follows:

1. Let the commissioners give notice in the London Gazette, appointing a time and place, when and where the separate creditors of each of the bankrupts are to be at liberty to prove those debts under the joint commission.

2. Let the commissioners take separate accounts of the joint and respective separate estate of the bankrupts, come to the assignee's hands, or of any others by their order, or for their use, distinguishing the joint and separate estate of Peter Powell, as also the joint and separate estate of Peter Powell the younger, from each other.

3. That what on such account shall belong to the bankrupt's joint estate, shall be employed by the assignees towards satisfaction of the joint creditors; and in case there

order,

2 Feb. 1742. The

OF BANKRUPTCY.

shall be any surplus of the joint estate, after all the joint creditors shall be paid their whole demands, then the moiety of the surplus is to be carried to the account of the separate estate, and to be applied to satisfy the separate creditors respectively.

4. And if there is any surplus of the separate estates, after all the separate creditors shall be paid their whole demands, then such surplus of the separate estates, or either of them, is to be carried to the account of the joint estate, and to be applied towards satisfaction of the joint creditors; and let the respective separate estates bear a proportionable part of the charge of suing out the commission, and executing it, to be ap pointed by the commissioners; and let the costs of this application be paid the peti tioners by the assignees out of the bankrupt's separate estate; and let it be referred to Mr. Bennett to tax the costs, if the parties cannot agree.

On this day a separate commission of bankruptcy was taken out against William case of Mr. Crispe, by William Perritt, plasterer. Crispe was a partner with Edward Burnaby, William Esq. and Captain Barbett, in the undertaking of building Ranelagh Amphitheatre; and this debt which amounted to 4261. or thereabouts, was part of a sum of money due to Perritt, for plasterer's work done in and about the said amphitheatre.

Crispe.

Feb. 1743.

Crispe petitioned the Lord Chancellor to supersede the commission, insisting that this was a joint debt, and that he did not owe Perritt any thing on his separate account; and on the 18th of February 1742, this petition was heard before his Lordship, and on hearing counsel on both sides, and it not then appearing to his Lordship whether Crispe was, or was not, a bankrupt, his Lordship did order the commissioners to execute a provisional assignment, and did direct an issue to be tried in an action of trover before Lord Chief Justice Willes in London, wherein the said William Crispe was to be plaintiff, and such assignee defendant, and in which the point of bankruptcy would come in question.

And on the 19th of June, 1743, the cause was tried at the sittings in London, and by a special jury, between the said William Crispe, plaintiff, and William Perritt, who was chose provisional assignee, defendant.

And the issuing the commission, the joint debt of Perritt, the assignment, and an act of bankruptcy committed by Crispe, were proved: and after his Lordship had clearly and fully summed up the evidence to the jury, it appearing to them to be a joint debt, they were pleased to give a verdict for the plaintiff Crispe, with 101. damages, and 40s. costs, and did not find him bankrupt for this debt. But a point of law arising, the last clause made in the 10th year of Queen Anne was read, which declares, that the discharge of any bankrupt by force of any acts relating to bankrupts, from the debts owing by him, at the time he became bankrupt, shall not be construed, nor was intended or meant, to release or discharge any other person or persons, who was or were partner or partners with the said bankrupt in trade, at the time he became bankrupt, or then stood jointly bound with him for the said debts, from which he was discharged; but that notwithstanding such discharge, such partners or joint obligors with such bankrupts, shall be and stand chargeable with, and liable to pay such debts, and to perform such contracts, as if the said bankrupt had never been discharged for the same.

And the case was drawn up, and approved of by the Lord Chief Justice for the opinion of the Court of Common Pleas.

Where the question was whether a separate commission can be taken out for a joint debt, which was learnedly spoke to on both sides, but the court came to no opinion.

And it came again to be argued before the Lord Chief Justice Willes on the same question; when after hearing the reasons offered pro and con, by the learned counsel, the court gave judgment, and the Lord Chief Justice delivered his opinion, and his Lordship, Mr. Justice Abney, and Mr. Justice Burnet, were all of opinion, from the

cases which had been cited, and the reasons and precedents that had been laid before them, that the commission was regularly issued, and that a joint creditor had a right to take out a separate commission, and therefore made the following rule:

William Crispe against William Perritt: ordered, that the verdict found for the plain- May 1743. tiff be void, and that a verdict be entered for the defendant.

And on the 11th of May, 1744, Perritt preferred his petition to the Lord Chancellor, setting forth the several steps and proceedings, and the determination of the court in this case, and Crispe having, pursuant to his Lordship's order of the 18th of Feb. 1742, deposited 1001. in the bank, in the name of the Accomptant-General, to be placed to the credit of this matter, and in order to stay all proceedings under the commission, he therefore prayed his Lordship to discharge his order of the 18th of Feb. 1742, and that the commissioners might be at liberty to proceed in the execution of the commission, and that the 100l. paid into the bank by Crispe, might be paid to him towards the costs which he had been put to, on account of suing out the commission, and proceedings at law.

And on the 24th of May, 1744, such petition was heard before his Lordship, and his Lordsip, after hearing counsel on both sides, ordered that the major part of the com-missioners named in the said commission should be at liberty to proceed in the execution thereof, and that the 1001. paid into the bank of England should be paid to Periit, as part of the bankrupt's estate and effects.

And on the 26th of May, 1744, Crispe was declared a bankrupt in the Gazette.

How far the Commissioners shall over-reach the Acts of a Bankrupt, from the Time of the Act of Bankruptcy committed.

1st. As to the bankrupt's receiving debts due to him from his debtors.

2dly. As to his selling his goods bona fide.

3dly. As to his selling and mortgaging his lands.

4thly. As to his mortgaging or pledging his goods. 5thly. As to his paying debts.

c. 15.

2 Show.

522. Cases

in

156. Wagstaff and Read,

And, first, A bankrupt may receive his debts after the act of bankruptcy, from such! debtors as do not know him to be a bankrupt, and the payment will be good. 2dly. All persons buying goods of a bankrupt, not knowing him to be so, and paying 51 Ca for them bona fide, shall be received in the equity of the proviso, 1 Jac. I. c. 15. And contracts, where there is quid pro quo, the bankruptcy shall not overreach. And the reason is, that if it was otherwise, it would be a great prejudice to trade, inso- 72. Pariat much that it could not be carried on with safety, and the law would be a snare for the where it innocent and fair contractor, who cannot possibly have any notice of the act of bank- seems to be ruptcy; as the following abstract clearly determines.

v. Ballard,

taken, that though

bought and

be recover

The preamble observes, that many persons within the description of, and liable to goods were the statutes concerning bankrupts, frequently commit secret acts of bankruptcy unknown to their creditors, and other persons with whom they have dealings; and after com- they may mitting thereof, continue to appear publicly, and carry on business, by buying and ed at selling goods, drawing, accepting, and negociating bills of exchange, and paying and in equity. receiving money on account thereof in the usual way of trade, and in the same open Fowel's manner as if they were solvent and not become bankrupt: and as the permitting such secret acts of bankruptcy to defeat payments really made in the cases and circumstances North, above-mentioned, where the persons receiving the same had no notice of, or were 3 Lev. 58. privy to their having committed any act of bankruptcy, will be a discouragement to 21. trade, and a prejudice to credit in general: It is therefore enacted, that after the 29th

case cited.

by Lord

Skin. 149.

19 Geo. 2.

P. 515.