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1835.

THOMPSON

THOMPSON.

Alexander, contra.—Although the plaintiff might not, as the Court of Review seem to have thought (Ex parte Thompson, 2 Deac. & Ch. 126, 1 Mont. & B. 219), have an absolute right to prove under the former part of the 56th section, yet he might lodge his claim under the latter part. This and similar clauses in former bankrupt acts have always received a liberal construction-Patterson v. Banks, Cowp. 543; Brookes v. Lloyd, 1 T. R. 17; Baxter v. Nichols, 4 Taunt. 90, 2 Rose, 111; Ex parte Grundy, 1 Mont. & M'A. 293 ; Ex parte Tindal, 1 Mont. & M'A. 415, 8 Bing. 402, 1 M. & Scott, 607; Ex parte Lewis, 1 Mont. & M'A. 246; Ex parte Myers, 1 Mont. & B. 229, 2 Deac. & Ch. 251: in the latter of these cases, a debt on a guarantie which did not become absolute before the bankruptcy, was held to be proveable as a contingent debt. The cases of Taylor v. Young, St. Martin (Overseers) v. Warren, and Hoffham v. Foudrinier, 5 M. & Sel. 21, were decided upon the statute 49 Geo. 3, c. 121, ss. 9, 17, which afforded a very inadequate relief-see Mr. Justice Chambres' observations thereon in Baxter v. Nichols, 4 Taunt. 92. Biré v. Moreau, 12 Moore, 226, 4 Bing. 57, was a case of costs, which were held not to constitute a debt contracted within the meaning of the 56th section of the 6 Geo. 4, c. 16.

Adams, Serjeant, in reply.—In Ex parte Myers, the acceptance became due after the bankruptcy and before certificate; the case therefore fell within the latter part of the 56th section. In all the other cases that have been cited, where the proof has been allowed, there has been a debt payable on a contingency. Here, however, there is no contingency within the meaning of the statute, and originally no debt. Non constat, that, because there has been one default by the principal debtor, there will be further defaults. There is therefore no principle upon which the value can be ascertained.

Cur. adv. vult. VOL. II.

T

1835.

THOMPSON

V. THOMPSON

Tindal, C. J., now delivered the judgment of the court:—The question arising upon this special verdict is, whether the several breaches of covenant stated in the declaration are either debts or are claims and demands which are by the statute made proveable under the commission; for, unless they fall within that description, the certificate will be no bar within the 6 Geo. 4, c. 16, s. 127, and consequently the plaintiff will be entitled to the verdict. Now, as to the breach of covenant which is lastly assigned in the declaration, viz. that Smallwood did not complete and finish the messuages therein described so as to make them fit for habitation on or before the 24th June, 1832—that is a demand for general and unliquidated damages, such as cannot be ascertained without the intervention of a jury, and is altogether incapable of forming the subject of a proof by the affidavit or deposition of the party himself. Such damages therefore can never be considered as a debt or demand proveable under a commission. Again, as to the second breach of covenant, which is for 301. alleged to be the expenses, costs, and damages sustained by the defendant by reason of the non-payment of the annuitythat breach also appears to be open to the same objection as the last; besides which, it is clear, that, if the plaintiff has no right to prove under the commission the annuity itself, which is the principal debt, he cannot be allowed to prove these damages, which are only incidental and accessary to the annuity itself. The question therefore upon this record is reduced to the single point, whether the instalments of an annuity for the payment of which the bankrupt is surety only, and which he expressly covenants to pay in case of the default of the grantor, are proveable under a fiat against the surety, where such instalments do not become due until after the bankruptcy of the surety. And we are of opinion that they are not. If such a demand is proveable at all, it must fall within the provisions of the 56th section of the statute, and no other: for, as to the 54th section, its object was to enable the annuity creditor of any bankrupt to prove for the value of an annuity under a commission against the grantor. But the plaintiff in this case is not the annuity creditor of the defendant, the bankrupt. The defendant neither granted the annuity nor covenanted absolutely for its payment: he only covenanted to pay in case the grantor should make default. It is clear therefore that the case is not within the 54th section. The 55th section was passed to enable the collateral surety for payment of an annuity to come in under a commission issued against the principal debtor. It is unnecessary to say that this section cannot apply to the present case, where the commission has been issued, not against the grantor of the annuity, but against the surety himself. No section therefore can possibly apply to this case except it be the 56th. That section provides for two cases--first, where there is "a debt payable upon a contingency which has not happened before the issuing of the commission;” in which case the commissioners are directed to ascertain the value thereof, and to admit the creditor to prove the amount so ascertained. The second case is, " where the value shall not be ascertained before the contingency shall have happened;" and in that event the creditor may, after such contingency shall have happened, prove in respect of the debt, and receive dividend with the other creditors, not disturbing any former dividends. The question is, whether the instalments mentioned in the first breach of the declaration fall within either the one or the other of these provisions. We think it clear that the quarterly payments of the annuity not falling due until after the issuing of the commission, are not comprised within the first part of the section. Before the days of payment arrive, these instalments are not only no debt, but can never become a debt from the surety, except in the event that Smallwood, the grantor of the annuity, shall make default in such payments. But

1835.

THOMPSON

v. THOMPSON.

1835.

THOMPSON

v. THOMPSON.

the value of such a contingency it is impossible to calculate. The liability of the surety would depend upon the power and the will of the principal to pay the first quarter and also the subsequent instalments as they fell due: and it is needless to say that such a contingency cannot be subjected to any known law of calculation. And, accordingly, when the present plaintiff, before any quarterly payment became due, applied to the commissioner to ascertain the value of the annuity, and to allow him to prove such value, the commissioner rejected the proof: and we agree in the judgment given by the Court of Review, who held such rejection to be right-see Ex parte Thompson, 1 Mont. & Bligh, 219. If the instalments of an annuity are proveable at all, it must either be by proving the present value of the whole annuity, or by proving the separate value of each instalment as it falls due. But it is obvious that the act has made no provision for the proof of the present value of the annuity against the estate of the surety. If the whole annuity is allowed to be proved against the estate of the surety, there is no provision in the statute for reimbursing the estate of the surety by enabling the assignees to look to the principal debtor for indemnity: whereas, in the case of the bankruptcy of the grantor of the annuity, and the annuity being valued and proved against his estate, a provision is made for the indemnity of the surety, by the 55th section, namely, that the surety, by paying to the creditor the ascertained value of the annuity, may have the benefit of the proof of the annuity creditor against the bankrupt's estate. By this course the whole of the annuity transaction is closed as to all the parties, the grantor, the surety, and the annuitant. The absence, therefore, of any similar provision in the case of the surety becoming bankrupt, leads to the inference that it was not intended to provide for such case by the statute, but that it should be left as it stood at common law. And we think, that, as the whole value of the annuity is not proveable at once under

1835.

THOMPSON

THOMPSON.

the 56th section, so neither is each particular instalment proveable after the contingency happens : for, the 54th section of the act deals with an annuity as a debt of a peculiar nature, and proveable in one way only; directing the present value of the whole annuity to be ascertained, and such whole value to be the subject of proof: not that each successive instalment shall be proved as it becomes due. And if the annuity is so dealt with under the 54th section, where the proof takes place against the grantor's estate, there is no reason to suppose the legislature would have treated it differently under the 56th section, as against the estate of the surety, if such annuity was intended to be proved under that section. And, indeed, it would be a great hardship on the annuity creditor to compel him to prove each separate instalment as it became due, that is, as the contingency of the default of the principal debtor happened, through a long series of years; for, that would in effect be to take away from him the whole benefit of his security, without giving him a real share under the estate. This decision does not in any manner over-rule the case of the proof against the estate of the guarantee or surety for a debt after the default of the principal, which proof was allowed in Ex parte Myers, 1 Mont. & Bligh, 229, 2 Deac. & Ch. 251; but is limited to the case before us, the proof of the instalments of an annuity. As therefore we consider that no part of the demand in this declaration was proveable under the commission against the defendant, we think there must be judgment for the plaintiff.

Judgment for the plaintiff,

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