SECTION XXIV. Rates and Taxes. or assessor, If the bankrupt's estate is in arrear for rates or taxes, Where the collector, or assessor, seems to be the proper person to collector, prove the debt; and he ought at the time of proof to produce his appointment, that the commissioners may judge of the legality of it. (1) may prove. collector of the in habitants. But, if the collector himself should become bankrupt, Where having received the taxes from the inhabitants, but not bankrupt, having paid the money over, one of the inhabitants in that then one case may be admitted to prove for himself and the rest(2); and the form of his deposition should be, that neither he, nor the rest of the parishioners to his knowledge or belief, have received any security or satisfaction. It makes no difference, with respect to the right to prove against such collector, that the usual time of accounting has not arrived— as in the case of an overseer, who becomes bankrupt before the expiration of his year of office, before which he cannot strictly by law be compelled to account; - for the money in his hands is a debitum in præsenti, though he may only be accountable for it in futuro. (3) Where the bankrupt had been appointed a joint collector with another person, such person (though his co-collector) was permitted to prove for the sum due on the part of the parish. (4) (1) Lloyd v. Heathcote, 2 B. & B. 388. 1 C. B. L. 127. 1 Mont. Dig. 143. (2) Ex parte Child, 1 Atk. 111. 508. contrà, Rex v. Egginton, 1 T. (4) Ex parte Muggeridge, 1 C. What illegal. SECTION XXV. Illegal and void Debts. No debt, which is either illegal in its nature-as a bond given for the premium pudoris; or which is made void by as a debt upon an usurious contract, statute can be Where a bond, however, was given by a bankrupt for debts not the payment of a sum of money, in consideration that the obligee would marry a servant of the bankrupt, and maintain a bastard which the bankrupt had by her, and the marriage took effect, this was held to be a - good consideration, and the obligee entitled to prove the bond. (1) So, where promissory notes were given for liquidated damages in compromising an action for the seduction of the plaintiff's daughter, per quod servitium amisit, the notes were permitted to be proved under a commission against the maker. (2) Debts tainted with usury. Where a contract is originally usurious, it is (with only one exception) void ab initio, and cannot be proved by any person claiming benefit under it, notwithstanding he may be neither party, nor privy, to the usury. (3) The exception alluded to is one created by a recent statute (4), by which it is declared, that no bill or note, though given for an usurious consideration, shall be void in the hands of an indorsee for valuable consideration, without notice of the usury. The rule of the Court of Chancery is, when a bill is filed to be relieved against a demand of usurious interest, not to make void the whole debt, but merely the excess of interest, and to compel the party to pay what is really due; but under a commission of Bankruptcy, the (1) Ex parte Cottrell, 2 Camp. 742. (2) Ex parte Mumford, 15 Ves. (3) Lowe v. Waller, Doug. 736. (4) 58 G. 5. c. 93. debts. assignees have a right to insist, that the whole is void upon Illegal the ground of usury. And, unless the assignees and creditors submit to the proof of what is really due, the Lord Chancellor has not power to order it. (1) Where a creditor also, who had taken out execution, delivered up the proceeds to the assignees, under an express agreement that he should come in with the other creditors for the balance due to him, it was held, that such agreement meant a proveable balance, and did not let in the debt, if affected by usury. (2) Where by custom of trade a commission taken, not usury. In some cases, however, where by the custom of trade a small per centage more than the legal interest is taken, in the nature of commission, on the discounting of bills, and as reasonable a reasonable compensation bona fide for extra trouble, such a transaction is not considered to be usurious (3); and 10s. per cent. has been held to be not unreasonable in this respect. But commission cannot be added to the amount of legal interest, for the purpose of inducing a loan of money to be made, and of recompensing it afterwards when made; for it must be always considered as an excess beyond legal interest, unless it can be ascribable to trouble and expense bona fide incurred; therefore, where there is no such trouble or expense, the remuneration cannot legally be claimed. The cases, where such commission can be claimed, are chiefly confined to the dealings of bankers, brokers, and other agents; for any charge above the legal interest by a general trader, and on one single transaction, or by persons who cannot be considered in a mercantile character, would be held a mere shift or cloak for usury. (4) Illegal debts. Where money not all ad Where a warrant of attorney was given to secure the repayment of 6007., with interest from a certain day, and the whole of the money was not actually advanced on that day,it was held, that the transaction was usurious. (1) But an agreement that money borrowed should be repaid to the lender, or left in his hands as a banker, to be drawn out as the borrower wanted it, then, though the money terest to not being ready at the time when it is applied for by the be paid, usurious. borrower, would be a breach of the contract, yet it would not amount to usury. (2) vanced on the day from How Bank ruptcy differs from other proceedings, in charging usury. Debt from sale of goods to In making out a charge of usury to defeat a debt in Bankruptcy, it seems that, by the practice of the Court, there is a much greater latitude allowed to the party making such charge, than what is permitted in courts either of law, or equity. For, at law, the charge must be supported by strict rules of evidence; and, in equity, the debtor must either prove the usury by legal evidence, or have the confession of the party-and, moreover, cannot apply for relief, without offering to pay what is really due. But in Bankruptcy, it is sufficient to suggest usury in a petition supported by affidavits, merely upon information and belief, by which the party charged is in fact compelled to prove against himself; and this proceeding, also, is not for the purpose of giving him his real debt, but with the object of cutting him off from all relief. (3) This practice, which has been more than once forcibly commented upon by Lord Eldon, and which is certainly unreasonable in principle, and frequently oppressive in its effects, does not, however, appear yet to have received any alteration. A debt arising from the sale of goods, bought for the purpose of being sent to India, contrary to the prohibition be illegally of an act of parliament, cannot be proved, if the party at exported, the time of the sale knew of their illegal destination. (4) not prove able. (1) Ex parte Banglay, 1 Rose, 168. (2) Per Lord Eldon, ibid. (4) Ex parte Moggridge, 1 C. B. L. 187.; and see ex parte Daniel, 14 Ves. 191. debts. So, money advanced, for the furtherance and in execution Illegal of any illegal contract, cannot be proved; -as, where one member of a firm was connected with the bankrupt in an insurance partnership (which until lately was illegal (1)), and advanced the money of the firm to the bankrupt on different policies of insurance, and the partner so advancing the money died, it was held, that the surviving partner of the firm could not prove the amount of such advances under the commission. (2) If part of consideration good, and part bad, a security nay be proved for the amount of what is If the consideration, for which a security is given, be good in part, and bad in part,—though the security is void at law, yet in equity, and in proceedings in bankruptcy, it shall stand as to what is good. As, where a broker was employed to effect two insurances-one of which was illegal- and the principal, in consideration of the money laid out by the broker in effecting them, indorsed a bill to him, which was accepted by a third person, who became a good. bankrupt; the Lord Chancellor, though he refused to allow the broker to prove against the estate of the acceptor such part of the debt, as arose upon the illegal insurance, held nevertheless that he might prove for the residue. (3) And, where promissory notes were given by a stock-broker for the balance of an account of money advanced to him, to be employed in bargains for stock contrary to the statute of the 7 Geo.2. c.8.—and the broker became bankrupt, upon a petition by the payee to prove the notes under the commission, Lord Erskine allowed proof to be made for sums admitted by the bankrupt to have been received and applied to his own use — but for no part of the amount, that appeared to be made up of the profits arising from the stock-jobbing transactions. (4) It is, however, purely a legal question, whether trans- Whether actions of this nature are, or are not, an infringement of an act of parliament (1) See 5 G. 4. c. 114., by which such partnerships are now made legal. (2) Ex parte Bell, 1 M. & S. 751. (3) Ex parte Mather, 3 Ves.373. X (4) Ex parte Bulmer, 13 Ves. 313.; and see Grey v. Fowler, 1 H. B. 462. Petrie v. Hannay, 3 T. R. 418. |