time of redemption. (1) But, where there was an order for Interest. superseding a commission, upon payment by the bankrupt of what should be settled by the Master to be due to the creditors under the commission, Lord Hardwicke held, that the creditors were entitled to interest from the date of the Master's report to the day of payment, as in the common case of a reference to the Master in a cause to state what is due for principal and interest. (2) Where there is a mutual credit between the bankrupt and the creditor, the computation of interest should be stopped at the same time on both sides of the account. creditor agrees to In a case where the creditor had sold goods to the bank- Where rupt, and agreed, if prompt payment were made, to deduct 33 per cent. from the price but no payment being made allow disat the stated times, the creditor applied to prove the whole count on charge for the goods, without deducting the 33 per cent., payment. contending, that this was a contract to accelerate payment, rather than to give day of payment, the Lord Chancellor said, they could not make the debt more than the real price of the goods, and dismissed the petition. (3) prompt cannot prove for If a surety of the bankrupt pays the debt, and the Surety interest accrued subsequent to the bankruptcy, it has been decided, that he cannot prove such subsequent interest subseunder the commission, but only in the same way as the quent original (4) creditor. interest. interest But in case the estate of the bankrupt produces a sur- But ifa surplus, after paying 20s. in the pound, then by section 132. plus, such of the new statute, the creditors, whose debts are by law allowed to entitled to carry interest in the event of a surplus, are first all creditors, subto receive interest on their debts at the rate reserved, or by ject to cerlaw payable thereon, to be calculated from the date of the commission. And after such interest shall have been paid, then all other creditors who have proved may receive in (1) 7 Vin. Ab. 110. (2) Ex parte Rooke, 1 Atk. 244. (3) Ex parte Ainsworth, C. B. L. 191. 4 Ves. 678. S. P. Ex parte (4) Ex parte Wilson, 1 Rose, tain pri orities. Interest. As to the rights of classes of creditors. the two Additional terest not to di terest on their debts from the date of the commission at the rate of 4 per cent.(1) The former rules will of course be applicable, as to the right of interest between these two classes of creditors. Thus the holders of bills of exchange-if no interest is reserved upon the face of them, or by express or implied agreement will be included only in the latter class of creditors, and be postponed until the payment of all interest that may be due to the first class. For the 57th section of the statute, which (as we have seen) (2) allows holders of bills to prove for interest, does not alter the nature of the agree ment between the holder and the party liable upon the bill, but only gives the holder a right to prove for a demand not proveable before. So, upon the principle that a bond creditor is not entitled to interest beyond the penalty, it will follow, that such a creditor will, to the amount of the penalty of the bond, be entitled to interest with the creditors of the first class, viz. of those whose debts carry interest — and, for any interest beyond the penalty, he will rank with the creditors of the second class. (3) This claim, however, of the creditors for additional interest in the event of a surplus, it has been determined, minish cannot be set up by them so as to diminish the bankrupt's bankrupt's allowance. (4) allowance. Separate creditors not en titled to it, till joint creditors paid 20s. in the pound. Where the commission is a joint one, the creditors of the separate estates are not entitled to such additional interest upon their debts, until the joint creditors have also received 20s. in the pound, the rule being, that where there is a surplus of the separate estate, that surplus shall not go immediately to pay such interest to the separate creditors, but shall first be applied to make the joint creditors equal (1) And see Butcher v. Churchill, 14 Ves. 573. Ex parte Hill, 11 Ves. 654. Ex parte Boyd, 1 G. & J. 285. (2) Ante, 263. (3) See Eden's B. L. 367. et seq. and a note by the same learned author, to the case of Tew v. Earl of Winterton, in his edition of Brown's Reports, vol. iii. 489. (4) Ex parte Morris, & Bro. 79. 1 Ves. 152.; and see post, "Bankrupt's Allowance." upon estate upon each other, not to com pete with creditors. with the separate creditors, as to the principal of their re- Interest. spective debts. (1) And where both joint and separate Claims of estates have been paid 20s. in the pound, and there hap- joint, or pens to be a debt due from the separate estate to the joint separate, estate, or from the joint estate to the separate estate, neither the partnership can be admitted a creditor the individual partner, nor the individual partner upon the partnership, until all such additional interest is paid to every class of creditors, who have proved debts under the commission. For as the partnership itself, in such a case, or some of the partners, are themselves debtors to the creditors of every class — and as the principle is, that the debtor cannot come in competition with the creditor, it follows, that neither the partnership, nor any individual partner, can claim a debt from the estate of either one or the other, until all the creditors of each are fully satisfied their demands — which include both the principal and interest of their respective debts. (2) estate to Where the surplus consists of real, as well as of personal Personal estate, the personal estate is first to be applied in payment be applied of interest - and if that is deficient, then the real estate may before real be resorted to. (3) And it seems, that the commissioners may make the computation of such additional interest, without a previous order of the Court. (4) A creditor, who has given a receipt in full, or delivered As to creup securities, under a mistaken impression that there would ditor being be no surplus, is not thereby barred of his right to interest in the event of a surplus. (5) barred. Where a creditor is obliged to petition, in respect of his Where proof, for payment of a dividend which has been declared creditor under the commission, he will be entitled to interest upon interest 81. (3) Bromley v. Goodere, 1 Atk. (4) Ex parte Morris, 1 Ves. 132. entitled to Interest. on his dividend, such dividend; and in such a case it was ordered to be computed at the rate of 5 per cent. (1) SECTION XIX. Costs. (And see ante," Judgments," and post, "Damages.") By section 58. of the new statute, if any plaintiff (2) in any action at Law, or suit in Equity, or petitioner in Bankruptcy, or Lunacy, shall have obtained any judgment, decree, or order, against any person who shall thereafter become bankrupt, for any debt or demand, in respect of which such plaintiff or petitioner shall prove under the commission, he may also prove for the costs which he shall have incurred in obtaining the same, although such costs shall not have been taxed at the time of the bankruptcy. But costs incurred AFTER the bankruptcy are not proveable under the commission; though, in actions of contract, they are in general discharged by the certificate, by reason that they follow the original debt. So that, if a creditor bring an action against a bankrupt after a commission has issued, he takes the chance of losing his costs, in case the debt should be barred by the certificate. (3) (1) Ex parte Loxley, 1 G. & J. 345. (2) It will be observed, that this section takes no notice of a judgment obtained by a DEFENDANT in any action or suit; though it was no doubt intended, that the costs of a nonsuit, or a judgment, in the defendant's favour, occurring before the bankruptcy, should be equally proveable with those of a judgment for the plaintiff. The provision contained in this section, unneces also, as to the proof of costs at (3) Willett v Pringle, 2 N. R. 190.; and see Blandford v. Foote, Cowp. 138. Lewis v. Piercy, 1H B. 29., and see post, 278. Costs can where verdict be It was for some time held-and the doctrine was re- Costs. cognized by many decisions (1)—that the judgment in all actions, when signed, related back to the verdict; and that not be the costs de incremento upon the judgment, according to a proved, fair and equitable relation of law, became annexed and judgment consolidated with those assessed by the jury; and might signed after bankbe consequently proved as a debt under the commission, if ruptcy, the verdict was prior to the bankruptcy. The authority though of these cases, as far as they related to the right of PROOF, before. was first doubted by Lord Eldon, in a very learned and comprehensive judgment pronounced by him in a case, where both the verdict and the judgment occurred after the bankruptcy-and in which he decided that, notwithstanding the costs in such a case might be discharged by the certificate, they were, nevertheless, not proveable under the commission. (2) In delivering his opinion upon this occasion, his Lordship intimated that, in the decision of the cases above referred to, (all of which had been cited in the argument) the Courts had not presented to their view, two former decisions of great authority (3), in which a different principle was established. A case was after wards sent for the opinion of the Court of King's Bench; and, after full consideration of all the previous authorities, that Court finally determined that, although a verdict be obtained before an act of bankruptcy, yet, if final judgment be not signed till afterwards, the costs could not be proved under a commission. (4) And a similar decision has been since come to on this point by the Court of Common Pleas,- Lord C. J. Gibbs observing, that the question could not be tried better, than by (1) Aylett v. Harford, 2 Bl. 1317. Graham v. Benton, 1 Wils. 41. 2 Str. 1196. More accurately reported in 14 East, 200. note (a). Longford v. Ellis, 1 H. B. 29. note. 14 East, 202. note. Ex parte Simpson. (2) Ex parte Hill, 11 Ves. 646. (3) Ex parte Todd, cited 3 Wils. 270. 11 Ves. 651. Walter v. Sherlock, cited ibid. (4) Ex parte Charles, 14 East, 197. |