be necessary for the beneficial winding up of the same" (a), application to the Court might, in such case, be dispensed with.

The trustee may sell property in pledge, subject to the pawnee's rights therein (b).

A [pawnee or other] secured creditor, may, on giving up his security, prove for his whole debt (c). His election to relinquish his security is shown by the fact of proving for the debt, without deduction on account of the security. Such election, when once made, has been held so conclusive, that a creditor who had proved in ignorance of his rights, was not allowed to change his mind, or withdraw his proof (d), or to enforce his security after proving and accepting a composition on, the whole of his debt (e). But recently, when the proof had been made under evident mistake (f), or in ignorance of the existence of the security (g), the creditor was allowed to rectify the proof upon refunding dividends previously received by him, with 4 per cent. interest thereon (h).

The case of the creditor whose debt has been partially secured by pawn or otherwise, has yet to be noticed. Such a creditor is "entitled to a dividend in respect of the

(a) 32 & 33 Vict. cap. 71, sec. 25, sub-sec. 2.

(b) 32 & 33 Vict., cap. 71, sec. 25, sub-sec. 6.
(c) 32 & 33 Vict., cap. 71, sec. 40.

(d) Exp. Downes, 18 Ves. 200; Exp. Davenport, re Buxton, 1 M. & D. 313;
Exp. Spicer, 12 L.T., N.S. 55; Exp. Solomon, 1 Glyn & J. 25.

(e) Exp. Jameson, re Balbirnie, L.R. 3 Ch. D. 408, 35 L.T., N.S. 533 (C.A.) (f) Exp. Williams, re Williams, L.R. 18 Eq. 373, 43 L.J. 105 Bk., 29 L.T. N.S. 404, 22 W.R. 570; Exp. Schofield, re Firth, L.R. 12 Ch. D. 337, 48 L.J. 122 Bk., 40 L.T. N.S. 823, 27 W.R. 925 (C.A.); Exp. Bagshaw, re Ker, L.R. 13 Ch. D. 304, 41 L.T. N.S. 743, 28 W.R. 403 (C.A.); Re London & Bombay Bank, exp. Cama, L.R. C.A. 686, 43 L.J. 683 Ch., 31 L.T. N.S. 234, 25 W.R. 454.

(g) Gregson v. Gerrard, 4 Y & C. 119.

(h) Exp. Adamson, re Collie, L.R. 8 Ch. D. 807, 47 L.J., 103 Bk., 38 L.T., N.S. 917, 26 W.R. 890.

balance due to him after realizing (a) or giving credit for the value of his security in manner and at the time prescribed by the Bankruptcy rules, failing which he shall be secluded from all share in any dividend" (b). In other words, if, while retaining the pledge, he seeks to prove against the estate for so much of the debt as the pawn will not cover, he must proceed in the manner prescribed by the act, and the rules made thereunder.

If the trustee does not redeem, but admits the pawnee's title, and consents to a sale, formal application to the Court for leave to sell the pawn is unnecessary (c). Otherwise the pawnee who desires to prove for apprehended deficit, must apply by motion to the Court, which, after proper inquiries as to the debt, will order a sale of the pawn, to be conducted usually by the trustee (d), the proceeds whereof shall be applied in paying (1) the trustee's costs of sale, and (2) the pawnee's principal, interest and costs (e). If the sale be delayed at the trustee's request, in the hope of an improved market, the pawnee will be entitled to interest during the delay (ƒ). The pawnee will then prove only for deficit, or will pay over any surplus thus ascertained (g). But if, while retaining his security, he desires to vote for assignee [or trustee] in respect of the unsecured portion of his debt, he may do so before sale (h). Formerly, the

Re Barned's Bank, exp.

(a) In which event he can prove for the deficit. Forwood, L.R. 5 C.A. 18, 39 L.J. 133 Ch.; Banner v. Johnston, L.R. 5 H.L. 157, 40 L.J. 730 Ch., 40 L.T. N.S. 542; Exp. Brett, re Howe, L.R. 6 C.A. 838, 40 L.J. 54 Bk., 25 L.T. N.S. 252, 19 W.R. 1101.

(b) 32 & 33 Vict., cap. 71, sec. 40; see also exp. Groves, 1 Atk. 105. (c) Exp. Whitbread, 3 Dea., 311. (d) Bankruptcy Rules 1870, No. 78. (e) Ibid, No. 80.

(f) Exp. Kensington, 1 Dea., 58, 2 Mont. & Ayr., 300; but this only applies where there is an express contract, or an implied one (as in that case), on the

footing of merchants' accounts.

.(g) Bankruptcy Rules, 1870, No. 80; See Exp. Grove, 1 Atk. 105; Exp. Twogood. 19 Ves. 229.

(h) Exp. Nunn, 1 Rose, 322.

Court might set, or allow the pawnee to set, a value on the pledge, and prove for the deficit thus estimated, though this course was not greatly favored (a) except when the pledge was of bills or other things which could not possibly produce more than the full amount, and the pawnee was willing to take them at that (b), in which case his offer ought to be accepted, and his proof for the difference admitted, even if his interests were opposed to those of the general body of creditors, and the admission of his proof would enable him to carry his own election as assignee [or trustee]. Neither could his claim be resisted because he had property belonging to the estate in his possession. That was only a ground to restrain payment of the dividends (c), or to require security from the creditor that he would give up the property if the Court should be of opinion that he had no right to retain it (d). And where the property pledged was claimed by a third person, the pawnee was allowed to enter a claim on the proceedings for the whole debt, till the right to the property was determined (e).

The rules now in force have considerably facilitated procedure in cases of this kind. The partly secured pawnee who wishes to vote on the choice of trustees before sale of the pawn, must give particulars in his proof, of the [pledge or other] security held by him, and of the value at which he assesses the same, and, after deducting the assessed value, prove for the deficit he has thus estimated (f). He must also give notice to the trustee that he desires to give credit for his security, and must give such credit within 14 days,

(a) Exp. Smith, re Harvey, 1 V & B. 518, 2 Rose, 63.
(b) Exp. De Tasted, 1 V. & B. 280.

(c) Exp. Dobson, 1 Mont. & Ayr, 606.

(d) Exp. De Tasted, 1 Rose, 324.

(e) Exp. Williams, 4 D. & C. 180. (f) R. G. Bank., 1870, No. 99.

or if out of England, within a reasonable time after being called upon by the trustee to do so. In default, he will be deemed to be fully secured (a).

The pawnee's estimate of value is conclusive against himself. He cannot increase his proof if the pawn produces less than his estimate, but if it realizes more, he must pay the excess to the trustee (b). Therefore, where a creditor had valued at £16 only, a Life Policy for £200, deposited as security for a debt of £229, and the life insured dropped pending proceedings for liquidation by arrangement, the proceeds were held payable to the debtor's estate, deducting the £16, and interest thereon at five per cent. (c). But trustee and creditors are not bound in like manner. The trustee may redeem the pawn at any time before sale, by payment of the pawnee's estimate of value (d). And either he, or any creditor, dissatisfied with such estimate, may require the pawn to be realized (e). On the other hand, the pawnee is not bound by the bankrupt pawnor's estimate of a pawn, which he, as pawnee, has not valued, but may prove for the deficit ascertained by sale (f).

A pawnee may attend the sale of the pawn, but can only bid thereat by leave of the Court (g). In a proper case, the Court will fix a reserve to prevent the property from being sacrificed (h), and after purchase by mortgagee or pawnee, will open the biddings on proof that the price is considerably below the real value (i).

(a) R. G. Bank., 1870, No. 136.

(b) Ibid, 100, 101.

(c) Exp. King, re Palethorpe, L.R 20 Eq. 273, 44 L.J., 92 Bk., 32 L.T., N.S. 505, 23 W.R. 681.

(4) R. G. Bank., 1870, No. 100.

(e) R. G. Bank., 1870, No. 136. (f) Exp. Hodgkinson, re Bestwick, L.R. 2 Ch. D. 485, 45 L.J., 148 Bk., 34 L.T.. N.S. 784, 24 W.R. 938 (C.A.)

(9) Exp. Macgregor, 4 D.G & S. 603; Exp. Hodgson, 1 D.G. & J. 12. (h) Exp. Ellis, 3 D & C. 297; Exp. Lee, D.G. 628.

(i) Exp. Lee, D.G. 628,

If the pawnee relies entirely upon his security, he is entitled to interest up to the time of payment, but if he proves, or otherwise seeks the help of the Court, interest stops at the date of adjudication (a). Contra, when the debt at the date of the bankruptcy, is a lump sum fixed by contract, for payment of principal and interest by instalments (b).

The pawnee's right to retain the pawn will be regulated by the terms of his contract with the pawnor. Prima facie, it is a security only for the particular debt which it was originally deposited to secure, and if the pawnee seeks to make it available for other debts, he must prove a contract to that effect. He is not a mortgagee, who may tack or consolidate his securities, so as to make good deficiency on one by surplus on the other (c). Nor can he retain surplus on sale of his pawn, to satisfy an unsecured debt, even if he be executor to a deceased and insolvent pawnor (d). If the mortgagor assigns his equity of redemption for valuable consideration, the mortgagee cannot afterwards tack against the assignee, and a fortiori, the pawnee cannot do so after the pawnor has parted with his property in the pawn, or if the rights of his unsecured creditors will be affected thereby (e).

Formerly, if a creditor secured by a deposit made generally, to secure past and future advances, had two demands, one provable, and the other not provable in bankruptcy, he might apply his security to the nonprovable debt first, and only use it in reduction of the

(a) Exp. Lubbock, re Flood, 4 D.G. J. & S. 516.

(b) Exp. Cockburn, re Lundy, 39 L.T. N.S. 362 (C.A.). (c) See ante, Cap. VI., ON THE PROPERTY OF THE PAWNOR; and VII., OF THE PAWNEE, HIS TITLE AND PROPERTY.

(d) Talbot v. Frere, L.R. 9 Ch. D. 568, 27 W.R. 148.

(e) Adams v. Claxton, 6 Ves. 226; Vanderzee v. Willis, 3 Bro. C.C. 21,