gages. for subse quent ad have a payment of the money, for which they are pledged. But Mortwhen the person pledging becomes bankrupt, they cannot be retained (like title deeds in the case of an equitable mort- retained gage) for subsequent (1) advances. And goods pledged expressly to secure a creditor, who has previously accepted and vances. paid bills drawn on him by the bankrupt, are released from further charge, as to other bills taken up and paid subsequently, if the amount of the original sum, paid on account of the bankrupt, has been repaid to the creditor, without the goods being sold. (2) A creditor having goods When crepledged with him in part security of his debt — if he wishes ditor may to prove for the purpose of voting in the choice of as- value set signees, and there is not sufficient time previously to have upon the goods, and a sale-may, on petition, obtain an order that a value prove for shall be set upon the goods, according to the market price the dif of the day of the choice of assignees, and prove for the difference between such value and the amount of his debt; the creditor undertaking that, if the goods sell for more than the value so set upon them, the excess of the proceeds shall be for the general benefit of the creditors. (3) But where it appears, clearly, that the delivery of the goods is not a pledge, but amounts to an undue preference, such an order will not be made. (4) The selling of a pledge by Selling a a creditor, without applying first to the commissioners, pledge does not (if there is no fraud in the transaction) destroy prevent 55 proof. his right to prove the remainder of his debt. (5) ference. does not prove and retain pa The agent of a bankrupt attorney may prove the amount Agent may of his whole debt, notwithstanding he retains in his hands certain securities and papers, which came into his possession as such agent, and upon which he has a lien. (6) pers, &c. SECTION VII. Debts payable in futuro. By the 51st section of the new statute, any person who has given credit to the bankrupt upon valuable consideration for any money, which shall not have become payable when such bankrupt committed an act of bankruptcy whether the credit is given upon any written security or not-may prove his debt, as if the same was payable presently, and receive dividends equally with the other creditors, deducting only a rebate of interest at the rate of 51. per cent,, to be computed from the declaration of a dividend, up to the time such debt would have become payable, ac cording to the terms upon which it was contracted. in This section is nearly the same as the 9th section of the 49 Geo. 3. c. 121., which was framed to remedy many conveniences under the former Bankrupt laws. For, before that statute, if a creditor had no security for his debt in writing (1), and it was not payable till after his debtor became bankrupt—as in the case of goods sold to the bankrupt upon a certain credit the creditor was unable to prove his debt under the commission;—a disability, which was productive of equal injustice, both to the creditor and the bankrupt. (2) But now, by the above section, all debts contracted before the act of bankruptcy, though not due till afterwards, can be proved, whether there is a written security or not, subject only to a deduction of 5l. per cent. discount. Formerly not prove SECTION VIII. Contingent debts were formerly not proveable under a able, unless commission, whether the contingency was certain, or un able,unless (1) Ex parte E. I. Company, 2P. Wis. 395. Hoskins v. Duperoy, 9 East, 498. 4 East, 438. debts. contin gency had happened. certain, unless it had happened before the act of bank- Contingent ruptcy. (1) Thus, even a bill of exchange (where the contingency is certain) if not due till after the bankruptcy, could not (before the 7 Geo. 1. c. 31.) be proved (2); — any more than a debt on a policy of insurance (where the contingency is uncertain) could before the 19 Geo. 2. c. 32., unless the contingency had taken effect before the bankruptcy. And, in more recent times, a bond to secure the replacing of stock on a particular day could not be proved, unless the day had arrived, or the condition was broken before the bankruptcy. (3) Nay, even a warrant of attorney to confess judgment for an existing debt, being accompanied with a defeazance that judgment should not be entered up unless default was made in payment by a particular day, could not be proved, if the bankruptcy took place before that day arrived. (4) Many subtle and refined distinctions, also, were drawn between debts accruing payable on a contingency—and present debts liable to be de feated on a contingency. (5) These cases (as Mr. Eden has observed in his able exposition of the new statute (6)) will be henceforth merely matter of curiosity, in consequence of the important alteration made by the statute in the proof of this species of debts; an alteration, that is certainly not the least valuable of the different amendments in the law of Bankruptcy, whether considered with a view to the effecting of substantial justice, or to the disentangling this species of proof from the intricacies, with which it was so long perplexed. The following is the alteration to which allusion has been made: By section 56 of the new act, if any bankrupt shall, be- But now fore the issuing of the commission, have contracted any proveable (1) Ex parte E. I. Company, 2P. Wms. 396. Ex parte Groome, 1 Atk. 118. Ex parte Barker, 9 Ves. 110. Hancock v. Entwistle, 3T.R. 435. (2) Callowell v. Clutterbuck, cit. 2 Str. 867. (3) Ex parte King, 8 Ves. 334. (6) Page 118. either debts. before or after the contingency. Contingent debt payable on a contingency, which shall not have happened before the issuing of the commission, the person with whom the debt has been contracted, may, if he think fit, apply to the commissioners to set a value upon it, and may prove the amount and receive dividends thereon; or, if the value shall not be ascertained before the contingency happens, he may then, after the contingency, prove in respect of the debt, so as not to disturb any former dividend. He is however, of course, prevented from proving,if, when the debt was contracted, he had notice of any act of bankruptcy committed by the bankrupt. Whether a guarantee for payment of goods proveable, before cre dit has expired. Under this section, Mr. Eden thinks, that there is no reason now, why a guarantee for payment of goods should not be proveable against the bankrupt guaranteeing the payment, though the credit given to the purchaser be not expired (1); as well as a guarantee by the bankrupt to repay money lent to a third person, on receiving previous notice although no notice has been given before the commission. (2) In each of these cases, the claim of the creditor against the bankrupt has certainly been held to be contingent; but, at the same time, it seems rather difficult for the commissioners to set a value on the chance of payment by the principal debtor - there being no rates of premium yet calculated for insurance against dishonesty, or insolvency. If, indeed, the credit had expired in the one case or notice had been given in the other and default made by the principal debtor-then, as a matter of course, the creditor could prove against the guarantee. -- For further observations as to the proof of contingent debts, see post: "Marriage Articles," "Annuities," "Bonds," "Insurance," "Costs," "Damages," "Sureties." (1) Ex parte Gordon, 15 Ves. 286. (2) Ex parte Minet, 14 Ves. 189.; and see Utterson v. Vernon, 3 T. R. 539. 4 T. R. 570. SECTION IX. Creditors by Marriage Articles. encies ability of proof. The Courts were formerly much hampered in the Former inrelief, which they were able to afford the Bankrupt's wife conveniand children, under any settlement or bond made by him from disfor their benefit at the time of his marriage. For, as no contingent debt could, as we have just seen, be proved, unless the contingency took place before the bankruptcyand a provision of this kind is, from its very nature, generally uncertain and contingent, by reason of the different limitations as to death and survivorship-the wife and family of a bankrupt were often (under the old law) entirely defeated of the provision intended to be secured to them, Lord Hardwicke observing, even in his time, that the different acts then existing had not made a sufficient provision for the relief of such sort of creditors. (1) Thus, although the husband, by marriage articles or bond, covenanted with trustees to leave his wife a certain sum, 66 case she survived him” - or to pay to trustees a certain sum, "in case she died, leaving children who should attain the age of 21"- and the wife happened to be living at the time of the bankruptcy, it was held, that the trustees could in neither case prove the amount under the commission: (2) And so, indeed, in every other case where the bankrupt had contracted to pay money on a contingency, which had not happened previous to the bankruptcy, and which might, or might not, happen afterwards. In some cases, however, where the contingency had happened after the bankruptcy, and before any distribution had been made of the bankrupt's (1) Ex parte Groome, 1 Atk. 117. 120. (2) Ibid. Ex parte Caswell, 2 P. Wms. 497. Ex parte Barker, 9 Ves. 110. Tully v. Sparkes, Ld. Raym. 1546. Str. 867. Ex parte Jeffries, 7 Vin. 72. Ex parte King, in Davies, 254. Studdy v. Tingcombe, |