costs in an action or an indictment, if payable to a private prosecutor.1 But a verdict, or an award that is not complete and final, will not convert a non-provable demand into a provable debt. If an action is pending at the time of the bankruptcy upon a provable debt, the court of bankruptcy may permit it to proceed to judgment to ascertain the amount for which proof is to be made. No doubt the court in which the action is pending may make the order, if the court of bankruptcy does not intervene. In either case, the assignees should be made parties defendant, because they represent the opposition to a proof; the record should contain a statement of the purpose for which the judgment is entered; and execution is to be stayed until the question of the debtor's discharge is determined. In such a case, the action being authorized costs as well as debt can be proved.

§ 178. Unliquidated Damages. In the United States, unliquidated damages, arising ex contractu and recoverable at law, have always been provable as debts without special mention in the statute. Some of our acts, following that of Massachusetts, have added to this class of debts damages arising from the conversion of goods and chattels. This was done to save the injustice and anomaly of leaving it optional with the creditor to prove the value of his goods, waiving the tort, or to hold over against the discharged bankrupt an action of trover, and because the conversion might be presumed to have increased the assets.

1 Reg. v. Hills, 2 E. & B. 176; Reg. v. Thornton, 4 Ex. 820; Gulliver v. Drinkwater, 2 T. R. 261; Holding v. Impey, 1 Bing. 189.

2 Ex parte Charles, 16 Ves. 256, and 14 East, 197; Buss v. Gilbert, 2 M. & S. 70; Ex parte Todd, 6 De G. M. & G. 744; Haswell v. Thorogood, 7 B. & C. 705; Hodges v. Chace, 2 Wend. 248; Crouch v. Gridley, 6 Hill, 250; Kellogg v. Schuyler, 2 Denio, 73; Zimmer v. Schleehauf, 115 Mass. 52; Black v. McClelland, 12 N. B. R. 481, Fed. Cas. No. 1462.

4 Norton v. Switzer, 93 U. S. 355. Healy v. Root, 11 Pick. 389; Mathewson v. Sheldon, 6 R. I. 223.

6 Lothrop v. Reed, 13 Allen, 294; Chandler v. Windship, 6 Mass. 310; Fowles v. Treadwell, 24 Maine, 377; Barker v. Mann, 4 Met. 302; Campbell v. Perkins, 8 N. Y. 430; McMullin v. Bank of Penn Township, 2 Penn. St. 343; Sweatman's App., 150 Penn. St. 369; Parker v. Hull, 46 Ill. App. 471. 7 St. of 1838, c. 163, § 3.

8 Act of 1867, § 14; 14 Stat. 522; R. S. § 5067. There is no such provi 3 See Cothren's Appeal, 59 Conn. 545. sion in the act of 1898.

In England, the courts of bankruptcy formerly had only equitable powers, and could not summon in a jury to assess damages; and for this reason, and because it was thought that the letter of the law required the creditor to swear to a precise sum, unliquidated damages, suable at law, were held not to be debts. Later statutes, and especially that of 1869, have made all unliquidated damages provable, unless they arise out of tort.1

§ 179. Equitable Liabilities may be proved. It was said by the Master of the Rolls, in 1723, that equitable debts could always be proved in bankruptcy. Jeffs v. Wood, 2 P. Wms. 128. Other eminent judges, down to the present time, have made similar observations. "It is a great mistake to suppose that a debt's being provable, depends on whether it is a legal debt. It depends on whether it is a debt in law or in equity." Per Lord Redesdale, Re Murphy, 1 Sch. & Lef. 44, 48. "A commission in bankruptcy is nothing more than a substitution of the authority of the Lord Chancellor, enabling him to work out the payment of those creditors, who could by legal action, or equitable suit, have compelled payment." Per Lord Eldon, Ex parte Dewdney, 15 Ves. 479, 498. "It being the established rule in bankruptcy that every debt which a person could, either in his own name or in the name of any other person, recover at law, or in equity, was a provable debt." Per Sir Wm. James, Ex parte Adamson, 8 Ch. D. 807, 820. Many of the cases which I shall have occasion to cite deal with this class of debts. What are here called equitable debts are often liabilities for a fraud or breach of trust, and all such are included in this term.2 The law was so under the several bankrupt acts of the United States and in winding-up proceedings in equity.

1 Lee & Chapman's Case, 30 Ch. D. Slater, 16 Conn. 192; Collins v. Tillou, 216.

2 Jeffs v. Wood, 2 P. Wms. 128; Re Murphy, 1 Sch. & Lef. 44; Ex parte Dewdney, 15 Ves. 479; Terrell v. Hutton, 4 H. L. 1091; Ex parte Roffey, 19 Ves. 468; Ex parte Stephens, 14 Ves. 24; Ex parte Young, 2 Rose, 40; Ex parte Taylor, ib. 175; Walcott v. Hall, 2 Bro. C. C. 305; Brown v.

26 Conn. 368; Re Bigelow, 2 N. B. R. 556, Fed. Cas. No. 1398; Re Blandin, 1 Lowell, 543, Fed. Cas. No. 1527; Re Jones, 6 Biss. 68, Fed. Cas. No. 7444; Roosevelt v. Mark, 6 Johns. Ch. 266; Ex parte Unity Bank, 3 De G. & J. 63; Ex parte Adamson, 8 Ch. D. 807 and cases. As to equitable debts under the act of 1898 see infra, § 526.

and Maine.

§ 180. Equitable Liabilities in Rhode Island, Massachusetts, -In Rhode Island, Massachusetts, and Maine equitable powers have been but lately conferred upon the courts, and have been somewhat reluctantly accepted; and the courts hold that means have not been provided by the statutes of those States for ascertaining equitable debts, and they, therefore, reject them, even as against the estates of deceased persons.1

In these decisions the courts are too self-denying; because no special tribunal, like a jury, is necessary for assessment in equity, and the commissioner or judge in bankruptcy exercises many equitable powers, and needs no others for this purpose.2

These decisions are harsh and unjust, because, if a trader who is a trustee becomes bankrupt, or dies insolvent, his trade creditors, who knew the risks they were running, take all the assets, to the exclusion of the persons who have become creditors against their will.

§ 181. Equitable Debt from Husband to Wife. Among the equitable debts provable against a bankrupt are moneys lent him by his wife or her trustees, out of her separate estate, or the value of such estate, which he has agreed to settle on her, or has deprived her of, with or without her consent. If the law permits her to act alone, she may prove; if not, proof may be made by her trustee; or, if her husband is the trustee, by her next friend.3

Where the wife has pledged her separate estate for her husband's debt, she has the right to have his property, if any is included in the security first appropriated, as far as it will go. And, no doubt, she has the right, like other sureties,

1 Hunt v. Danforth, 2 Curtis C. C. 592, Fed. Cas. No. 6887; Moies v. Sprague, 9 R. I. 541; Robb v. Mudge, 14 Gray, 534; Deane v. Caldwell, 127 Mass. 242.

2 See Ex parte Gardner, 11 Ves. 40; Ex parte May, Mont. & Ch. 18; Ex parte Montefiore, 1 De G. 171; Ex parte Westcott, L. R. 9 Ch. 626; Ex parte Green, 2 Dea. & Ch. 113.

Ex parte Thring, Mont. & Ch. 75; Ex parte Wells, 2 M. D. & De G. 504; Re Bigelow, 2 N. B. R. 371, Fed. Cas. No. 1397; Re Blandin, 1 Lowell, 543, Fed. Cas. No. 1527; Re Jones, 9 N. B. R. 556, Fed. Cas. No. 7444; Ex parte Melbourn, L. R. 6 Ch. 64 ;"Fleitas v. Richardson, 147 U. S. 550. See infra, § 526.

to have the benefit of the creditor's proof, if she or her property shall have satisfied the debt. This point was left open in one of the cases cited below, but is clear on principle. By a recent statute in England, money lent by a wife to her husband for use in his trade is subject to its risks, and in case of bankruptcy the debt is postponed until the claims of other creditors have been satisfied.2 In Massachusetts, notwithstanding the recent statutes, a debt between husband and wife, being void at law, creates no equitable liability.3

The courts will carefully scrutinize transactions of this sort to see that a gift by the wife is not turned into a loan by an after-thought. And it is a very strong presumption of fact that the wife's income, which the husband has been permitted to use, was a gift. But the presumption may be rebutted by proof of a promise to repay the money or other sufficient cause.5

If the terms of the settlement are that the husband shall enjoy the income of his wife's property for his life, then, after proof of a debt, due from the husband to the capital of the trust, the practice is to invest the dividends as capital, and pay the income to the assignees during his life. If, however, the debt arose by a default on the part of the husband, the trustees of the settlement would have a lien upon the income, and might accumulate it until the principal of the fund was made good, before making any payments to the assignees. A partner or his assignees may prove against his co-part

1 Aguilar v. Aguilar, 5 Madd. 414; Ex parte Hadderley, 2 M. D. & De G. 487; Gleaves v. Paine, 1 De G. J. & S. 86; Savage v. Winchester, 15 Gray, 453; Gahn v. Neimcewicz, 3 Paige, 614, 11 Wend. 312.

2 45 & 46 Vict., c. 75, § 3; Re Genese, 16 Q. B. D..700; Re Clark (1898), 2 Q. B. 330.

283.

Rideout, 1 McN. & G. 599; Shirley v. Shirley, 9 Paige, 363; Rowley v. Unwin, 2 K. & J. 138; Beresford v. Armagh, 13 Sim. 643; Gardner v. Gardner, 1 Giff. 126.

5 Parker v. Brooke, 9 Ves. 583; Atty.-Gen. v. Parnther, 3 Bro. C. C. 441; Foss v. Foss, 15 Ir. Ch. 215; Darkin v. Darkin, 17 Beat. 578;

3 Woodward v. Spurr, 141 Mass. Walker v. Walker, 9 Wall. 743; Towers v. Hagner, 3 Whart. 48; Re Richards, 17 N. B. R. 562, Fed. Cas. No. 11,770. See Re Campbell, 17 N. B. R. 4, Fed. Cas. No. 2348.

4 Squire v. Dean, 4 Bro. C. C. 326; Smith v. Camelford, 2 Ves. Jr. 698; Dalbiac v. Dalbiac, 16 Ves. 116; Caton v.

ners any debt so wholly disconnected from the business of the firm, that he might have maintained an action upon it.1

§ 182. Proof by Solvent Partner. A solvent partner may prove against the several estates of his co-partners for their respective shares of the final balance, without resorting to a bill; and a retired partner, whom the new firm have agreed to indemnify against the old debts, and who has paid all that were outstanding, may prove the amount against the joint assets of the new firm.3 It is immaterial that the payments are made after the proceedings in bankruptcy are begun. The solvent or retired partner cannot prove while there are debts outstanding for which the firm are liable, because he would be competing with his own creditors. This rule extends to proof against the separate estates, because the surplus of the separate assets which goes to the joint creditors might thereby be intercepted; but if it can be shown that the joint creditors cannot in any event have an interest in the separate estate, because there will be no surplus, then proof is admitted.7 Executors of a deceased partner are within the same rule, in respect to the balance due their testator or intestate, or to them as representatives for money left in the business. If it appears probable that there are no joint debts outstanding, a possibility that there may be such will not prevent proof

de bene.9

1 Ex parte Richardson, 3 Dea. & Ch. 244; Ex parte Briggs, ib. 367; Hope v. Meek, 10 Ex. 829.

195; Re Phelps, 17 N. B. R. 144, Fed. Cas. No. 11,070; Re Savage, 16 N. B. R. 368, Fed. Cas. No. 12,381; Re Smith,

2 Ex parte Taylor, 2 Rose, 175; Ex 16 N. B. R. 113; Fed. Cas. No. 12,991; parte King, 17 Ves. 115.

3 Ex parte Terrell, Buck, 345.

4 See Fernald v. Clark, 84 Maine, 234.

5 Ex parte Sillitoe, 1 Gl. & J. 374; Ex parte Carter, 2 Gl. & J. 233; Ex parte Ellis, ib. 312; Ex parte Robinson, 4 Dea. & Ch. 499; Ex parte Butterfield, De G. 570; Ex parte Garland, 10 Ves. 110; Ex parte Broome, 1 Rose, 69; Ex parte Collinge, 4 De G. J. & S. 533; Ex parte Maude, L. R. 2 Ch. 550; Ex parte Gordon, L. R. 10 Ch. 160, 1 App. Cas.

Sigsby v. Willis, 3 Ben. 371, Fed. Cas.
No. 12,849; Re Frost, 3 N. B. R. 736,
Fed. Cas. No. 5135.

Ex parte Collinge, 4 De G. J. & S. 533; Lacey v. Hill, L. R. 8 Ch. 441. See Re Hind, 62 L. T. 327.

7 Re Head (1894), 1 Q. B. 638; Ex parte Topping, 4 De G. J. & S. 551; Ex parte Sheen, 6 Ch. D. 235.

8 Ex parte Carter, 2 Gl. & J. 233; Ex parte Gordon, L. R. 10 Ch. 160, 1 App. Cas. 195.

9 Ex parte Andrews, 25 Ch. D. 505.