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one debtor, and the creditor takes the security of all—as he may bring actions and obtain execution against each of them severally, provided he have but one satisfaction, so he may prove the debt against each of them severally, under every fiat which may be issued against them (a). Or, if some remain solvent, he may prove against the bankrupts, and bring his action against each of the solvent debtors (6).
Lord Hardwicke illustrates these principles by reference to the rights of an obligee of a bond against the several obligors, and of the holder of a bill of exchange against the drawers, indorsers, and acceptors (c). Let us apply them to the case where there are two or more debtors, and those debtors are partners.
It seems clear, that if a creditor take a joint and several security from a firm, for a partnership debt, and part of the firm become bankrupt, he may treat his debtors either as joint or as several debtors. In the former case, he may bring his action against all, and then the bankrupts may plead their bankruptcy, and execution may be had against the rest (d). In the latter case, he may prove his debt against the bankrupts, and bring a separate action against each of the others. But he cannot treat them as both joint and several debtors. Therefore, where A. and B., partners, gave a joint and several bond to C., and B. became a bankrupt, and C. proved the bond under the commission against B., Lord Eldon held, that C. could not, after such proof, bring his joint action against A. and B. Lord Eldon said, that though the holder of a joint and several security had it in his option either to proceed jointly or severally, yet the defendants had, in this case, elected to prove severally, by proving the bond under the commission. They
the jurisdiction of the Great Scal, and will be injoined from continuing his proceedings at law. Ex parte Bozannet, 1 Rose, 181 ; Ex parte Hardenberg, Id. 204.
(a) And he may prove under every fiat to the full ainount, provided he receive dividends only to the amount due to him. Ex parte Bloxam, 6 Ves. 600. See Ex parte King, Co. B. L. 168; Ex parte Lee,
1 P. W. 782; Ex parte Crossley, 3 Bro. 237; Ex parte Martin, 2 Rose, 87.
(6) Gregory v. Hurrill, 1 Bing. 324.
(c) Ex parte Wildman, 1 Atk. 109.
(d) But as to execution against joint effects, after the bankruptcy of one partner, see ante, p. 590, art. VIII. 5.
were, therefore, not at liberty to bring a joint action upon it, but must proceed against the solvent partner severally (a).
II. The observations which have just been made regarding election of remedy have been confined to the case of one and the self-same debt. Where there are two debts, arising from distinct contracts, it has been held that the creditor, having proved one under the bankruptcy, may afterwards proceed at law for the other. For the act says—“That the proving or claiming a debt under a commission, by any creditor, shall be deemed an election by such creditor to take the benefit of such commission, with respect to the debt 80 proved or claimed (6).”
But although there be distinct debts, the creditor cannot bring his action for the one, so as to proceed to execution after the bankruptcy, and afterwards prove for the other. For it is clear, that, under the first part of section 59 of the statute of bankrupts, proof or claim by a creditor for a debt operates as a relinquishment of an action previously brought for any demand, even though it be distinct from the debt proved (c).
It may here be remarked, that, by the same section of the
(a) Bradley v. Miller, 1 Rose, ing for one, had notice of the dis273. If, under these circumstances, honour of the other, could not afteran action be brought against the wards bring his action on the latter. bankrupt conjointly with the sol- But Lord Lyndhurst, in his able vent partners, the bankrupt may judgment in Ex parte Edwards, said, obtain an order to have his name that in the case before him, there struck out, or to be indemnified were two distinct debts for two disagainst the costs and consequences tinct parcels of goods, in respect of of its remaining. Ex parte Read, 1 which two distinct bills were given; Rose, 460.
and he thought the party might () 6 Geo. 4, c. 16, s. 59; Wat- have proved the amount of one of son v. Meder, 1 Barn. & Ald. 121; the bills under the commission, and Harley v. Greenwood, 5 Barn. & have afterwards proceeded at law Ald. 95; Bridgett v. Mills, 4 Bing. for the amount of the other bill, 18; Ex parte Glover, 1 Glyn & Jam. even if he had been the holder of 270; Ex parte Sly, 2 Glyn & Jam. that bill at the time of his proof for 163; Ex parte Edwards, 1 Mont. the amount of the first. & M‘A. 116, overruling Ex parte (c) Ex parte Glorer, 1 Glyn & Schlesinger, 2 Glyn & Jam. 392. Jam. 270; Ex parte Dickson, 1 In the latter case, the Vice-Chan- Rose, 98; Ex parte Hardenberg, cellor thought that a creditor by Id. 204. two bills, who, at the time of prov.
statute to which we have already referred, where a creditor has brought an action, or instituted a suit, against any bankrupt, in respect of a demand prior to the bankruptcy, then, " in case such bankrupt shall be in prison or custody at the suit of or detained by such creditor, he shall not prove or claim as aforesaid, without giving a sufficient authority in writing for the discharge of such bankrupt (a).” By the same section, also, “ where any such creditor shall have brought any action or suit against such bankrupt, jointly with any other person or persons, his relinquishing such an action or suit against the bankrupt shall not affect such action or suit against such other person or persons.”
III. The foregoing remarks are principally, perhaps solely, applicable to those cases where the debt is secured by bonds, bills, or other personal securities. But if a creditor obtain a mortgage or pledye, as a security for his debt, in such case he may retain it (6); or, if it be not sufficient to cover the debt, he may give up the security and prove the whole debt (c), or have the security sold by the Commissioners and prove for the difference(d).
(a) 6 Geo. 4, c. 16, s. 59. If the creditor take the bankrupt in execution after the issuing of the fiat, he will not be allowed to prove his debt, even upon the terms of delivering the bankrupt out of custody. For charging in execution, under such circumstances, is a conclusive election to proceed against the person. Ex parte Caton, Co. B. L. 149; Ex parte Warder, Ex parte Bisson, Ib. But although a creditor should commence an action after the issuing of the fiat, and should even proceed to judgment, if he do not proceed to execution, he will not be barred of his right of proof. Ex parte Arundel, 18 Ves. 231; Ex parte Cundall, 6 Ves. 446.
(6) See Ex parte Jackson, 5 Ves. 357; Ex parte Geller, 2 Madd. 262.
(c) Ex parte Grove, 2 Atk. 105.
8th March, 1794, it is ordered, that, upon application to the major part of the commissioners named in any commission of bankruptcy, by any person or persons claiming to be a mortgagee or mortgagees of any part of the bankrupt's estate or effects, the said commissioners shall proceed to inquire whether such person or persons is or are a mortgagee or mortgagees of any part of the bankrupt's estate or effects, and for what consideration, and under what circumstances; and if the commissioners shall find such person or persons is or are a mortgagee or mortgagees of any part of the bankrupt's estate or effects, and no sufficient objection shall appear to the title of such mortgagee, or to the sum claimed by him or them under such mortgage or mortgages, that the commissioners do then proceed to take an account SECTION V.
Of Election of Proof.
WHERE all the partners are bankrupts, and the creditor has taken the joint and separate security of the firm for the same debt, he must elect whether he will proceed against the joint or separate estate. This was decided by Lord Talbot (a), by
of the principal, interest, and costs due upon such mortgage or mortgages, and of the rents and profits of the mortgaged premises received by such mortgagee or mortgagees, or by any other person or persons, by his, their, or any of their order, or for his, their, or any of their use, in case such mortgagee or mortgagees shall have been in possession of the mortgaged premises, or of any part thereof; and that the commissioners do then cause due notice to be given in the London Gazette, and in such other of the public papers as they shall think fit, when and where the said mortgaged premises are to be sold before them, or by public auction at any other place or places, if they shall so think fit; and that such sale be made accordingly. And it is further ordered, that all proper parties do join in the conveyance or conveyances to the purchaser or purchasers, as the said commissioners shall direct. And it is further ordered, that the monies to arise from such sale be applied, in the first place, in payment of the expenses attending such sale, and then in payment and satisfaction of what shall be found due to such mortgagee or mortgagees, for principal, interest, and costs; and that the surplus of the said monies (if any) be paid to the assignees of the
estate and effects of the said bankrupt: but in case the monies to arise from such sale shall be insufficient to pay and satisfy what shall be found due to such mortgagee or mortgagees, it is ordered, that such mortgagee or mortgagees be admitted a creditor or creditors under such commission for such deficiency, and to receive a dividend or dividends thereon out of the bankrupt's estate or effects, rateably, and in proportion with the rest of the creditors seeking relief under the said commission, but so as not to disturb any dividend or dividends thereby already made. See Ex parte Holwell, 7 Vin. Abr. 102; Ex parte Coming, Co. B. L. 123; Ex parte Smith, 2 Rose, 64, &c. As to pledges which are within the order, see Ex parte Hillier, Co. B. L. 146; Ex parte Geller, 2 Mald. 262; Ex parte Troughton, 1 Co. B. L. 147. Equitable mortgagees, although not within the meaning of the above order, may, upon petition, obtain similar relief. Ex parte Payler, 16 Ves. 434; Ex parte Garbutt, 2 Rose, 78; Er parte Hodgson, 1 Glyn & Jam. 12; Ex parte Alexander, Id. 409; Ex parte Jennings, 2 Swanst. 360, &c.
(a) Ex parte Rowlandson, 3 P. W. 495. See Ex parte Bond, 1 Atk. 98; Ex parte Parminter, Ex parte Abing
analogy to the rule of law, that when A. and B. are bound jointly and severally to J. S., if J. S. sue A. and B. severally he cannot sue them jointly, and on the contrary, if he sue them jointly he cannot sue them severally, but the one action may be pleaded in abatement of the other. Even this right of election is lost if the creditor, for the purpose of having a collateral security to the joint and several bond, takes a joint warrant of attorney upon which judgment is signed. In such case, the security of the bond is merged in the higher security of the judgment(a).
The rule of election as propounded by Lord Talbot, is reprobated by Lord Eldon, who, in reference to Ex parte Rowlandson, observed that he was not perfectly satisfied with that authority. “The reasoning,” he said, “goes upon this, that a joint and separate action could not be brought at law. But surely the distinction is then, that where a joint and separate bond is given, and another security several from each, there, as two actions might be brought, the rule in bankruptcy should be different (6).” So, on another occasion, Lord Eldon observed, that in bankruptcy, for some reason not very intelligible, it had been said, the creditor should not have the benefit of the caution he had used. He never could see why a creditor having both a joint and several security should not go against both estates (c). The rule, however, as laid down by Lord Talbot is completely established.
It makes no difference whether the joint and separate security arises from the same or different instruments (d). The rule also holds if there be only one instrument; as if there be a debt due from a partnership, and the creditor take the separate bond of one partner as a collateral security for the debt. In such case the creditor must elect against which estate he will go. So, if, after the dissolution of a partnership, the creditor obtain from the remaining partners an acceptance in the name of the original firm, and both the original and remaining partners become bankrupt, the creditor may either prove against
don, and Ex parte Banks, cited ibid.; and Ex parte Bevan, 10 Ves. 107.
(a) Ex parte Christie, Mont. & Bl. 352.
(6) Ex parte Bevan, 9 Ves. 223.
See Ex parte Vaughan, cited 3 P.
(c) 10 Ves. 109.