1839. Аввотт ย. HICKS. pay The payment of the 68177. 9s. 8d. by the Defendant was not a condition precedent to the bankrupts' liability on their agreement, because no time was fixed for the ment; 1 Wms. Saund. 320 a. note; and because the engagement did not apply to the whole of the consideration on both sides; Boon v. Eyre (a), Richie v. Atkinson. (b) And the bankrupts' agreement with the Defendant may properly be the subject of a set-off. For it is not in the nature of a guaranty, where the liability is contingent, and can arise only in the second instance upon the failure of a principal debtor; but the bankrupts have undertaken absolutely to pay the whole sum due to Henry Hicks; and the Defendant stands rather in the position of an accommodation acceptor of a bill of exchange. If the defendant had paid Henry Hicks the 51,8917., he might have sued the bankrupts for so much money paid to their use Morley v. Inglis was a case on the statute of set-off, which provides only for the setting off of one debt against another; but the language of the bankrupt act comprehends any claim or demand as well as any debt; Gibson v. Bell; and this is at all events a claim or demand which the Defendant has against the bankrupts: [Tindal C. J. You say at the end of the plea, that the Defendant has a demand on the bankrupts for 47,000l., and that that sum is due and owing from them to the Defendant. How can that be? Erskine J. If you have not paid it, how can it be due from the bankrupts ?] The certificate of the bankrupts would be a bar to any claim the Defendant might make on the contract stated in the plea; as appears by Wood v. Dodgson (c); where, upon a dissolution of partnership between three partners, two of the three assigned to the third, all their shares in the partnership debts and effects, and the third covenanted to pay all debts then due from the partnership, and to indemnify the two from the payment of the same, and from all actions and costs by reason of the nonpayment of the same, and afterwards became bankrupt; a commission issued against him, under which, he obtained his certificate; and afterwards the holder of a bill accepted by the three partners, and due before the dissolution of the partnership, sued the two, and they were obliged to pay the bill; it was held, that by stat. 49 Geo. 3. c. 121. s. 8., the certificate might be pleaded in discharge of an action brought by the two against the third upon his covenant. Moody v. King (a) and Aflalo v. Fourdrinier (b), confirm that principle. But a claim which is barred by the certificate, may be proved under the commission; and if so, become the subject of set-off. [Tindal C. J. Could he prove without paying? Erskine J. The judges in Wood v. Dodgson relied on sect. 8. of 49 Geo. 3. c. 121; which allows the surety to prove the debt, if he shall have paid it.] Ex parte Grazebrook (c) shews that in order to establish a set-off, it is not absolutely necessary the debt should be paid. If the Defendant should pay Henry Hicks now, he might plead it puis darrein continuance; for a solvent partner, who pays the debts of a firm even after a bankruptcy, may prove them; Ex parte Taylor (d), Ex parte Ogilvy (e), Ex parte Lobbon (g); and the certificate would be a bar. Or if, as it has been suggested on the part of the Plaintiffs, the Defendant's liability constitutes a guaranty, it would still be a provable demand as a contingent debt, under sect. 56.; Ex parte Myers (h); [Erskine J. That was explained in Ex parte Marshall (i):] Ex parte Simpson (k); Ex parte Lewis (1); Gaskill v. Lindsay. (m) It was not a guaranty, (a) 2 B. & C. 558. (g) 17 Ves. 334. VOL. V. 22 (h) Mont. & Bligh, 229. (1) Mont. & M'Arth. 426. 1839. Аввотт V. HICKS. 1839. Аввотт V. HICKS. however, but an absolute obligation, as clear as that in respect of a dishonoured bill; as to which, Arbouin v. Tritton (a) is a clear authority. There, it appeared that one Goren, before his bankruptcy, discounted certain bills of exchange with Tritton and Co., his bankers, who gave him immediate credit for the value of the bills in his account, minus the discount: a balance was likewise struck before the bankruptcy, and, whilst the bills were yet running, in favour of Goren, when the bankers admitted that they had in their hands 9347. 8s. 8d. due to Goren, giving him credit for the bills then running: Goren became a bankrupt, and the bills were dishonoured: in an action against the bankers for the balance admitted to be due to the bankrupt before his bankruptcy, it was held, that they had a right to set off against such claim the amount of the dishonoured bills under the 5 Geo. 2. c. 30. s. 28. R. V. Richards in reply. Arbouin v. Tritton was a case of mutual credit, for the bankers had advanced their money against the bills. As to contingent debts, those which have been admitted in proof have been debts which could be the subject of calculation: but there can be no calculation here, for if the bankrupts' estate should pay 20s. in the pound, the Defendant may never be called on to pay any part of the amount he now seeks to set off. TINDAL C. J. The question in this case arises on the fiftieth section of 6 G. 4. c. 16., and amounts to this, -whether the plea discloses any debt, mutual credit, or demand, which can be the subject of set off under that section and I am of opinion that is not made out by allegation on this plea that the state of accounts between the Defendant and the bankrupts constituted a debt, mutual credit, or demand. : (a) Holt, N. P. C. 408. The plea states that the Defendant and the bankrupts dissolved partnership in 1828, at which time the firm owed one Henry Hicks 51,891l. 12s., and if the accounts of the firm had all been wound up, the Defendant would have been liable to pay the firm 68177. 9s. 8d.; that thereupon it was agreed that the bankrupts should take for their own use the assets and effects of the firm, and should pay H. Hicks the 51,8917. 12s., and that the Defendant should pay them the 68177. 9s. 8d.: that the Defendant permitted them to take the assets and effects, and promised to pay them 68177. 9s. 8d., and that they in consideration thereof, undertook to pay the 51,8917. 12s., and to indemnify him from the same. That they took the assets and effects, but paid H. Hicks only 48917. 12s.: and that 47,000l. still remained due to H. Hicks, which the Defendant continued liable to pay: And then he sets forth how he considers this a mutual credit debt or demand: First, he says that by the agreement he gave credit to the bankrupts to the amount of 51,8917. 12s. - I cannot see how that follows from the terms of the agreement; Then he goes on, that by means of the premises he had a demand on the bankrupts to the amount of 47,0007.; I do not see how this is made out as a deduction from the previous statement: he had no demand against them unless he had paid the debt; Then he proceeds, that out of the sum so due and owing from the bankrupts to him he is willing to set off the sum claimed by the Plaintiffs: But till he had paid Henry Hicks, there could be no sum due and owing to him from the bankrupts in respect of the 51,8917. 12s. It must be allowed there is an apparent, perhaps a real hardship on the Defendant; because, if he advances the 1839. Аввотт บ. HICKS. 1839. Аввотт บ. HICKS. 68177. 9s. it is hard that that should go to the credit of the two bankrupts, leaving him answerable for the debts of all three but he is in no worse condition than if he had paid the 68177. 9s. when he retired from the firm. The question, however, still is, whether he is entitled to avail himself of this liability in the way of set-off. It is a liabity in the nature of a guaranty; for the Defendant will only be called on in case the bankrupts' estate fails to suffice; and I never heard that a guaranty could be treated as a complete debt till the surety has been called on and has paid the debt: till he has done that, it must always be uncertain whether the debt will not be paid by the original debtor. In the present case, who is to say that the bankrupts' estate may not produce 20s. in the pound? if so, Henry Hicks will never have any demand against the Defendant. Again, suppose the bankrupts pay a part only, and the Defendant is called upon to make up the difference. Who is to say that the bankrupts may not then be in a situation to indemnify him? I think, therefore, that he has shown neither a debt, credit, nor demand within the meaning of the statute. Two cases have been relied on for the Defendant; Arbouin v. Tritton, and Wood v. Dodgson: In Arbouin v. Tritton, in an action against bankers for a balance admitted by them to be due to the bankrupt before his bankruptcy, it was held, that they had a right to set off against such claim the amount of dishonoured bills, it being a case of mutual credit, under the 5th G. 2. c. 30. s. 28. That is no more than if counters had been put into their hand, for which they had given credit, and which turned out afterwards to be worthless. In Wood v. Dodgson, the solvent partner had paid the debt, and might have proved it under the commission of the bankrupt. Those cases do not affect |