before the 49 G. III. c. 121, which allows sureties to rank for relief against their principal's estate. But, besides, that act applies only where the surety has paid either the whole debt, or a part in discharge of the whole, in which case the principal creditor can only rank for the balance. It does not authorise the surety to rank when the creditor has merely drawn a dividend from the surety's estate, while he at the same time has ranked separately against the principal debtor's estate for the whole debt; for this would be to allow a double ranking. The principles of this decision are therefore the same that would be adopted in Scotland. In such a case, in adjusting accounts between the parties, the bad bills on either side must be thrown entirely out of view, because these resolve on both sides into cautionary obligations, which cannot be ranked against either estate, so long as the principal debts are ranked. The balance proveable by one party against the other can only be struck on an account of the cash or good bills given. This rule was adopted also in another case, 2 where, in estimating the cash-balance between two estates, £. 1098 of bills given to one party by the other, which had turned out bad, were struck out of the account. But as these bills were entirely for the accommodation of the party in whose favour the cash-balance stood, so that he was bound to retire them, instead of doing which he had allowed them to be ranked for a dividend on the other party's estate, that estate was authorised to retain the dividend on the cash-balance due by it in relief of these dividends. 3

ceived it to be better to state its general result than its details, because nothing but an imperfect statement of them could be given within moderate limits. A similar decision was given, under like circumstances, in ex parte Earle, 5 Ves 833.

Bayley, 352.

Er parte Metcalfe, 11 Ves. 404.

Ibid. Vide also Bayley, 353-4. Professor Christian suggests, (ü, 393), these

It has been mentioned, that, when bills on opposite sides of an account differ in amount or other particulars, they will

the retention on the dividend of the cash-balance in this case would be ineffectual; because, after it was retained, it would fall to be divided among the holders of the very bill against which it was meant to indemnify the estate, as well as among the other creditors. His solution of the case is, 1st, That the bill for £. 1098, so far as it corresponds with the cash-balance, should have been considered as granted in discharge of it; so that, as the party receiving it had indorsed it for value for it from a third party, the ranking of it by the holder on the drawer's estate ought to have been held equivalent to his ranking for the cashbalance, and should therefore have discharged his claim for that balance. 2dly, He suggests, that, in so far as the bill exceeded the cash-balance, the drawer should have been considered as cautioner for the party receiving the bill, and should therefore have had a claim against him in this character for any dividend which he had paid. Such a claim in Scotland would be extinguished by a discharge under the sequestration. This solution proceeds on the hypothesis, that the bill had not been granted altogether for the receiver's accommodation, but in extinc tion of the cash-balance, so far as this balance corresponded with it.

In ex parte Walker, 853, note 1, a cash-balance was allowed to be ranked, without setting it aside to answer the dividends paid on bills received by the party in whose favour the balance stood, and which that party was bound to have retired. But the other party had received counter accommodations to a much greater amount, which had been also ranked on the estate of the party granting them, and therefore the one much more than counterbalanced the other. The account on which the cash-balance arose was entirely distinct from the account of these mutual accommodations, being composed, not of them, but either of advances in cash, or of such bills as were duly honoured. The bills in question, therefore, did not form any part of the consideration given for this cash-balance, since they did not enter into the account on which it arose, but were inserted in a separate account. Hence there does not seem to be good ground for the objection which has been stated to this judgment, 2 Christian, 389-90, viz. that, to allow the cash-balance to be proved, was to allow a proof, both of the bilis in question and of the consideration given for them, No doubt, the objection stated by the learned author would be unanswerable, if the bills in question had been granted, not as mutual accommodations, entered in a distinct account, but in consideration of money due by the party granting to the party receiving them; for, in that case, it would be unjust, that, while third parties holding these bills, ranked for them on the estate of the party granting them, the original receiver of them should also rank for his cash-balance, which had been pro tanto discharged by his receiving these very bills. But what has been now stated appears to shew that this was not the case in question.

1

not be presumed, without strong additional evidence, to have been given in consideration of each other. The Court of Session proceeded very lately on this principle, in holding that bills which differed from each other in various particulars, although entered on opposite sides of an account between the parties respectively granting them, could not be held as considerations for each other, 1 and that, therefore, although one of the parties had paid the full balance due on the one set of bills, he could not claim, for his relief from that balance, on the other bills which were in his possession retired. One of these bills thus retired was a bill for £.1500, in which the other party, being acceptors, were ex facie primary obligants, though it was really granted for the accommodation of the party receiving it; and, though he had acknowledged this by a counter-missive, in which he engaged to furnish funds for retiring it, he pleaded that this was merely an obligation of relief, which could not be allowed to qualify the prima facie liability of the acceptors, till they performed their counter obligations to him, by indemnifying him for his payments on account of their bills. But the successful answer was, that, in fact, he had performed the obligation, of which he now wished to suspend the performance, by retiring the bill; and that, being thus extinguished by the proper debtor, it could not be revived to any effect what

ever.

When a person, though he has none of the drawer's effects in his hands, accepts a bill, not on his account, but on account of a third party who has got value from the drawer, the acceptance is not considered as one for the drawer's accommodation, but he holds it onerously, and has the same claim on it, either against the acceptor or against his estate, that he would have had against the party on whose account

1 Newbigging and Company's Trustee v. Heywood, Collins and Co's Trus tee, 12th Nov. 1823, Shaw, 481, Session Papers.

it was made, and in whose situation the acceptor has thus placed himself. 1

A bankrupt under sequestration may be discharged in Scotland from all claims, either certain or contingent, arising from obligations contracted prior to the sequestration, whether they have been ranked under the sequestration or not. Such a discharge is granted by authority of the Court, either on a contract by the bankrupt to pay a certain composition approved of by nine-tenths of the creditors in number and value who have claimed, when proposed at the time and in the manner specified in the statute, 2 or failing that, by his whole creditors; or, without such a composition, on an application made by the bankrupt, after a certain time, with concurrence of the trustee and four-fifths of the creditors. 3 Failing both these remedies, the bankrupt can only have the privilege of cessio bonorum, which does not discharge him from his debts, but merely releases him from personal diligence, on his making a surrender of all his effects to his creditors. To bankrupts who are not or cannot be sequestrated, this last remedy is the only one which the law allows, independently of the voluntary and individual discharge of each creditor.

As to the effect of a discharge obtained by a bankrupt in one country, in releasing him from bills or notes for which he is liable to persons residing in a different country, the same doctrine seems to apply, concerning this mode of releasing bills or notes as well as other contracts, which has been already stated with regard to their execution and extinction by prescription, 5 viz. that it must depend on the law of the country where the bill or note is made payable, since it is

1 Ex parte Marshall, 1 Atk. 131, per Lord Hardwicke ; er parte Matthews, 6 Ves. 285, Bayley, 354.

that which the parties are presumed to have in view. In illustration of this principle, cases have been already cited, 1 and others are now referred to, in which it was held, on the one hand, that a discharge granted to the bankrupt, in the place of payment or performance, is a complete release of the debt, 2 and, on the other hand, that it cannot have this effect when it is granted in a different country from the place of payment or performance. 3 The extent and effect of a discharge or certificate must be determined by the law of the country in which it is granted. 4:

1 Ante, 179, and 708.

* Ballantyne v. Golding, Cooke, 487.

* This doctrine was recognised, though it was not the ground of decision, in Quin v. Keefe, 2 H. Bl. 554; and it was expressly ruled in Lewis v. Owen, 4 B. and A. 654; the Court of King's Bench holding that the plaintiff was entitled to sue the defendant on bills accepted for his behoof, and paid in England, though he resided in Ireland at the time of drawing the bills, and had since got a certificate there. The debt, it was said, must be held to arise in the place where the bills were paid.

4 This doctrine was laid down by Lord Chancellor Hardwicke, in ex parte Burton, 1 Atk. 255, with regard to the effect of a decree of cessio bonorum obtained in Holland.