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Brantly's annotated Bland's Reports, Chancery Court 1809-1832
Volume 198, Volume 2, Page 509   View pdf image (33K)
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WATKINS v. WORTHINGTON.— 2 BLAND. 509

that no creditor shall be admitted to come in under the commission,
so as to obtain more than a ratable dividend, without regard to
his security. Hence, when a creditor applies to prove his claim
under the commission, he may be called on, in most cases, to
deliver up his security, so that the other creditors may have the
benefit of the means of satisfaction he has chosen to abandon. If
there be a mortgage of the bankrupt's estate, the mortgagee may
have the mortgaged property sold, and the proceeds, after deduct-
ing all costs and expenses of sale, applied in satisfaction of his
claim as far as it will go, and then come in under the commission
for the balance. In short, wherever the creditor holds a double
security, he may make choice of either, or pursue both, so he does
not obtain a double satisfaction. If he obtains a. partial satis-
faction by one security, he is allowed to prove against the estate
of the bankrupt only, for the balance: and if lie comes against the
bankrupt for the whole, his claim upon the other security is satis-
tied, or diminished by so much as he receives from the bankrupt's
estate. If the bankrupt be the principal debtor, his surety from
whom the creditor may have obtained a partial or a full satisfaction,
takes the place of the creditor to that amount. And if the bank-
rupt be only a surety, then his assignees have a right to be subro-
gated to the creditor's place, in so far as satisfaction may have
been made from the bankrupt's estate for the benefit of his other
creditors. Ex parts Ryswicke, 2 P. Will. 89; Ex parte Lefebvre, 2
P. Will. 407; Ex parte Rowlandson, 3 P. Will. 405; Ex parte
Grove, 1 Atk. 104; Ex parte Marshal, I Atk. 130; Ex parte Bennet,
2 Atk. 528; Order of Court. 4 Bro. C. C. 550; Ex parte Goodman, 3
Mad. 373.'.

If these regulations on the subject of bankruptcy, should be
deemed applicable to the case of a deceased debtor's estate, about
* to be administered under a creditor's suit, they would
clearly suggest the propriety of allowing each creditor to 534
come in at once, according to the terms of his contract, for the
whole amount of his claim then due; and of calling on him when
so satisfied, to assign his securities to the suing creditors, to the
heir, or devisee, or to the executor or administrator, or to suffer
them to take his place for so much as he had been satisfied for
their own benefit or for that of the legatees or next of kin of the
deceased.

But the principles of this Court are essentially different. In
bankruptcy, the creditor himself makes choice of the security, from
which he will obtain satisfaction, and the Court, so far from lessen-
ing the obligation of any of hi.s securities, or driving him from any
one of them, will assist him in enforcing his contract to the extent
of its jurisdiction, so as to insure to him one-complete satisfaction;
but here, the Court officiously interferes, and throws upon the cre-
ditor the burthen of showing whether the deceased was principal

 

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Brantly's annotated Bland's Reports, Chancery Court 1809-1832
Volume 198, Volume 2, Page 509   View pdf image (33K)
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