1835. Wednesday, June 17th. The instalments of an annuity for the payment of which a surety express- the default of able under a fiat against the surety, where such instalments do not become due until after the bankruptcy of the surety. THOMPSON V. THOMPSON. THIS was an action brought against the defendant as surety for one G. Smallwood, a bricklayer, to recover 2804., for two years' and a half arrears of an annuity of 1127. due the 30th of April, 1834, under an indenture of the 31st of October, 1831, made between G. Smallwood and the are not prove- plaintiff, and 30%. for expenses occasioned by the principal's default of payment; and also to recover from the defendant, as such surety, the loss the plaintiff had sustained by Smallwood not completing the carcases of certain houses, pursuant to the defendant's covenant in the said grant of annuity, on or before the 24th of June, 1832. The defendant pleaded-first, as to so much of the declaration as related to the non-payment of the 280%., that, on the 8th of December, 1831, he became a bankrupt, and that the cause of action accrued to the plaintiff before he became bankrupt-a similar plea as to the 30%. expenses-and, as to the alleged non-completion of the houses, that they were completed. On these pleas issues were joined; and the jury found by a special verdict, that, before the commencement of the suit, to wit, on the 8th December, 1831, the defendant became a bankrupt, and that thereupon a certain commission of bankrupt, bearing date at Westminster the 8th December, 1831, was, after the making of the indenture in the declaration mentioned, duly awarded and issued against the defendant; that, by virtue of the said commission, the defendant was duly found and adjudged to be a bankrupt, and that the defendant afterwards and before the commencement of the suit, to wit, on the 3rd April, 1833, duly obtained his certificate; that 1407., part of the said sum of 2801. of the said annuity, yearly rentcharge, or annual sum, became and was due and owing and in arrear to the plaintiff before the said 3rd of April, 1833, and the sum of 1401., residue of the said sum of 2801. of the said annuity, yearly rent-charge, or annual sum, became and was due and owing and in arrear to the plaintiff since the said 3rd of April, 1833: and if upon the whole matter aforesaid it should seem to the court that the said certificate was not a bar to the action, then the jurors said that the causes of action in respect of the first breach in the declaration assigned did not, nor did any of them, or any part thereof, accrue to the plaintiff before the defendant became a bankrupt within the true intent and meaning of the statute then in force concerning bankrupts ; and in that case they assessed the damages of the plaintiff by reason thereof, over and above the costs and charges by him about his suit in that behalf expended, to 2807. that the cause of action in respect of the breach of covenant in the said declaration lastly assigned also accrued to the plaintiff before the said 3rd April, 1833 and if upon the whole matter aforesaid it should seem to the court that the said certificate was not such bar as last aforesaid, then the jurors said that the said cause of action in respect of the said breach of covenant in the declaration lastly assigned, did not, nor did any part thereof, accrue to the plaintiff before the defendant became a bankrupt as aforesaid; and in that case they assessed the damages of the plaintiff by reason thereof, over and above his costs and charges by him about his suit in that behalf expended, to 12201., and for those costs and charges, to 40s. Adams, Serjeant, for the plaintiff.-The breaches of covenant assigned in this declaration are none of them debts or demands capable of proof under the fiat against the defendant, and consequently the certificate is no bar to the action. The 54th section (a) of the 6 Geo. 4, (a) Which enacts "That any annuity creditor of any bankrupt, by whatever assurance the same may be secured, and whether there were or not any arrears of such 1835. THOMPSON V. THOMPSON. 1835. THOMPSON v. THOMPSON. c. 16, relates to proof by the annuity creditor where the grantor becomes bankrupt; and the 55th (b) relates to the rights of the surety on the bankruptcy of the principal annuity debtor: neither of these clauses therefore can apply to the present case, for, it is the surety who has become bankrupt, and not Smallwood, the grantor of the annuity. The demand arising out of the first breach of covenant, if provable at all, can only be so under the 56th section, which enacts, "that, if any bankrupt shall, before the issuing of the commission, have contracted any debt payable upon a contingency which shall not have happened before the issuing of such commission, the person with whom such debt has been contracted may, if he think fit, apply to the commissioners to set a value upon the commissioners shall ascertain, regard being had to the original (b) Which enacts that it shall aforesaid, he may be said [sued] for the accruing payments of such annuity, until such annuitant shall have [been] paid or satisfied the amount so proved, with interest thereon at the rate of 41. per cent. per annum from the time of notice of such proof, and of the amount thereof, being given to such surety; and after such payment or satisfaction, such surety shall stand in the place of such annuitant in respect of such proof as aforesaid to the amount so paid or satisfied as aforesaid by such surety; and the certificate of the bankrupt shall be a discharge to him from all claims of such annuitant or of such surety in respect of such annuity: provided that such surety shall be entitled to credit in account with such annuitant for any dividends received by such annuitant under the commission, before such surety shall have fully paid or satisfied the amount so proved as aforesaid." such debt, and the commisioners are hereby required to ascertain the value thereof, and to admit such person to prove the amount so ascertained, and to receive dividends thereon; or, if such value shall not be so ascertained before the contingency shall have happened, then such person may, after such contingency shall have happened, prove in respect of such debt, and receive dividend with the other creditors, not disturbing any former dividends: provided such person had not, when such debt was contracted, notice of any act of bankruptcy by such bankrupt committed." To bring it within that enactment there must be a debt. An undertaking to pay a sum on the default of a third person is not a debt. If Smallwood had been bankrupt, the annuity must have been valued: but the contingency of Smallwood's default is not susceptible of valuation. In St. Martin (Overseers) v. Warren, 1 B. & A. 491, 2 Stark. 188, it was held that a defendant's liability as surety in a bastardy bond is not discharged by his bankruptcy and certificate. And in Taylor v. Young, 3 B. & A. 521 (c), where one of two assignees of a lease gave a bond to the lessee, by whom the assignment was made, conditioned for the payment of the rent to the lessor, and the performance of the other covenants in the lease, and for indemnifying the lessee against the non-performance of the covenants, both the assignees of the lease having become bankrupt, and the bond having been forfeited before the bankruptcy: it was held that the lessee could not prove for the damages which had accrued previously to the bankruptcy, not having paid them to the lessor. So, in Atwood v. Partridge, 12 Mo. 431, 4 Bing, 209, where the defendant covenanted with the plaintiffs for the due payment by R. of the annual premium on a policy effected on the life of R., and given by R. to the plaintiffs by way of security for a debt (c) Young v. Taylor, 8 Taunt. 315, 2 Moore, 236. 1835. THOMPSON v. THOMPSON. 1835. THOMPSON บ. THOMPSON. due from him to them; and the defendant became bankrupt before and obtained his certificate after a default by R.: it was held that the defendant was not discharged from liability for the premium which the plaintiffs had been obliged to pay to keep the policy on foot. Best, C. J., there says: "The question is, whether there was any debt which the defendant undertook to pay. I am of opinion that there was none, either contingent or otherwise. The defendant merely undertook that R. should do certain acts. Upon the failure of R. in the due payment of the annual premium, the plaintiffs would have a claim on the defendant, as surety, for unliquidated damages, varying in amount according to circumstances. If R. was still living, the amount of damages would be the sum paid by the plaintiffs to keep the policy on foot; but, if he had died leaving the annual premium in arrear, the defendant would have been called upon to make compensation to the plaintiffs for the loss of their whole debt; or, if R. had left behind him the means of satisfying part of the debt, the plaintiff's claim on the defendant would be reduced pro tanto. Thus, there might be a multiplicity of causes tending to vary the amount of damages to which the defendant would become liable in consequence of his suretyship." And Gaselee, J., says: "It was but a liability for unliquidated damages, and therefore not a debt from which the defendant would be discharged under the 126th section." With respect to the claim for expenses occasioned by the principal's default, and for the loss sustained by the plaintiff in consequence of the noncompletion of the houses pursuant to the covenant-these clearly are claims for unliquidated damages, which have ever been held not to form the subject of proof under a commission (d). (d) See Utterson v. Vernon, 3 T. R. 539; Parker v. Norton, 6 T. R. 695; Pulteney v. Warren, 6 Ves. 94; Ex parte Mumford, 15 Ves. 289; Parker v. Crole, 2 M. & P. 150, 5 Bing. 63; Yallop v. Ebers, 1 B. & Adol. 698. |