1868 BISSELL บ. JONES. [COCKBURN, C.J. Suppose the guarantee had been by a stranger, on condition that he was to have the surplus (if any) after paying the instalments, what objection could there be to that?] None; but the objection here is, that the guarantors go to make up the requisite number of assenting creditors. [LUSH, J. There must be more than one half in number assenting as well as three-fourths in value.] But the assenting majority may be very small creditors, and the sureties so large as to swamp the others in value. Wells v. Hacon (1) may be relied on by the other side; but there the only advantage the creditor, who became surety for the payment of the instalments to the other creditors, had over them was, that he had a direct covenant from the debtor to pay the instalments, while the others could only avail themselves of a covenant from the debtors with a trustee on their behalf; but that was really no substantial advantage at all, and even, under those circumstances, some of the members of the Court had doubts whether the deed was good. Secondly, the sureties are only to be liable to the extent of 30007., and if the whole dividends to be paid on the whole debts amount to more than that, and some creditors are paid in advance, then the others will lose the security of the trust. fund pro tanto. The assignment by the debtor is not absolute, but saddled with a trust, and therefore this clause as to discounting the instalment goes to enable the sureties to commit a breach of trust, and deprive the creditors of one of the securities to which they have a right to look for the payment of their instalments, viz., the trust fund. Such a discretionary power in a trustee to pay one creditor in preference to another renders the deed invalid: Thompson v. Knight. (2) COCKBURN, C.J. As regards the objection to the provision that the trustees, on condition of becoming sureties for the payment to the other creditors of the instalments of the composition, are to be entitled to have their own debt paid in full in the event of there being sufficient assets, I think the case is substantially governed by Wells v. Hacon. (3) It is true I had doubts in that case as to the validity (1) 5 B. & S. 196; 33 L. J. (Q.B.) 204. (2) Law Rep. 2 Ex. 42. (3) 5 B. & S. 196, 206; 33 L. J. (Q.B.) 204, 207. of the deed. "But on the other hand," I said, "I cannot but perceive that such an arrangement may be beneficial to the body of the creditors;" that may be still more so here. If we saw any reason to think the agreement collusive, or calculated to give an inordinate advantage, we might hold the deed invalid. But we must assume that the arrangement being assented to by the requisite majority of creditors is for the benefit of all. The tendency of the later decisions is to hold that the legislature intended by these enactments to give the majority a power to decide, notwithstanding the dissent of the minority, what is most advantageous for the general body. How far it may have turned out well in practice to give this power it is not for us to consider, but for the legislature. I think we ought to abide by what was decided in Wells v. Hacon. (1) We must therefore look to see if there is anything so collusive or extravagant as to induce us to say that it ought not to bind the non-assenting creditors. Now it would appear that there is an insolvent estate, which will possibly pay 5s. in the pound, it is doubtful whether so much,-but there are a certain firm of creditors who are satisfied that it will realize more than that, and agree to become sureties and guarantee the payment of dividends to that amount, and also in certain cases to accelerate the time for payment, on condition that if they by their diligence manage to realize more, the surplus shall go to discharge their own debt in full. If the majority of creditors see that arrangement will be advantageous for them, why is not the deed valid, there being nothing to shew that the arrangement is in any way collusive? I can see no reason. As regards the second point, I quite agree that the construction of the clause is that the trustees, who are to realize and distribute the assets by instalments, are not authorized to deal with the trust fund otherwise than if no such clause had been inserted; but when the assets have been partially collected so as to afford a promise of the payment of a dividend, then if the sureties choose to anticipate the time of payment, and pay the composition minus discount to any creditor in anticipation, they may when the time comes take credit for the payment in full instead of only the amount minus the discount; but this assumes that there will be (1) 5 B. & S. 196; 33 L. J. (Q.B.) 204. 1868 BISSELL v. JONES. 1868 BISSELL v. JONES. no breach of trust; and therefore the argument for the plaintiff falls to the ground. LUSH, J. I am of the same opinion. The statute intended to allow the prescribed majority of creditors to make such arrangements as they might deem advantageous, and a deed made with the assent of such majority is good and binding on the whole body, provided it is not made collusively; and if it be bonâ fide, we have no power to inquire whether a particular stipulation is or is not proper. But the deed must be such a deed as is contemplated by the statute, that is a deed for the general and equal benefit of all the creditors; and if it puts non-assenting creditors in the same position as the assenting creditors, it is valid and binding. Here there is no inequality; the assenting creditors, with the exception of the trustees, are in no better position than the others, and the trustees purchase their advantage, if it be one, by becoming sureties. Then as to the other clause, the deed intends the trustees to make a rebate, and then if they advance the money, they may put themselves in the place of the creditors whom they have paid; but I agree with my Lord that they must not do this unless the funds will enable them to carry out the trusts and pay the dividend when due to all the creditors. If the trustees are going to abuse their trust, any creditor, whether assenting or non-assenting, can go to the court of bankruptcy and prevent the breach of trust. HANNEN and HAYES, JJ., concurred. Judgment for the defendants. Attorneys for plaintiff: Neal & Philpot. WOODWARD AND ANOTHER v. PELL. Bill of Exchange-Liability of Acceptor after Judgment, Arrest, and Discharge in another Action on same Bill. A bill of exchange, accepted by the defendant, was indorsed to C., who indorsed it in blank. A banking company, the holders of the bill at maturity, commenced actions against C. and the defendant. On the 21st of March, C. paid the amount due on the bill, and an order was made to stay proceedings in the action on payment of the taxed costs; these costs were paid on the 13th of April, and the bill was then handed by the bank to C., who, being indebted to the plaintiffs in a larger amount, delivered it to them. Judgment was signed in the action by the bank against the defendant on the 3rd of March, and a ca. sa. was lodged with the sheriff on the 6th of March. On the 29th of March the defendant was arrested, and discharged the same day by order of the bank on payment of the costs of suit. The plaintiffs having brought an action on the bill against the defendant: Held, that C. had a vested right of action against the defendant on payment of the bill on the 21st of March, for the fact that C. had not paid the costs on the 21st of March only gave the bank a lien upon the bill, but did not affect his right to or remedy on the bill; and neither the subsequent taking in execution nor the discharge of the defendant could afford him any defence to an action by C., or take away C.'s vested right: and the plaintiffs therefore were entitled to recover. DECLARATION on a bill of exchange drawn upon the defendant by Edward Cresswell & Sons to their own order, accepted by the defendant, indorsed by Edward Cresswell & Sons to Henry William Cresswell, and by him indorsed to the plaintiffs. There were also the money counts. The plea and replication to the first count, on which issue was joined, disclosed the same facts as are given more in detail in the case; and as the Court had power by agreement to amend the pleadings, it is unnecessary to set them out. At the trial before Keating, J., at the Gloucester summer assizes, 1866, a verdict was found for the plaintiffs for 3007., subject to the opinion of the Court upon the following case:— The bill of exchange upon which the action was brought was a bill for 3007., dated the 7th of August, 1865, payable to drawer's own order, four months after date, drawn by Edward Cresswell & Sons upon and accepted by the defendant. The bill was duly indorsed by Edward Cresswell & Sons to Henry William Cress 1868 Nov 27. 1868 well; he indorsed it in blank and handed it to J. C. Hodges, who WOODWARD indorsed to his bankers, the Metropolitan and Provincial Banking Company; and they held the bill, as such indorsees, at maturity. v. PELL. The bank commenced three actions upon the bill against the defendant, against Edward Cresswell & Sons, and against Henry William Cresswell. In the action by the bank against H. W. Cresswell, the indorser, the writ was issued on the 15th of January, 1866. On the 13th of March, 1866, H. W. Cresswell, for the purpose of taking up the bill, handed over to J. C. Hodges securities for an amount equal to that of the bill, and out of the proceeds of those securities, and on behalf of H. W. Cresswell, Hodges paid, on the 21st of March, 1866, the amount due on the bill to the Metropolitan and Provincial Banking Company, whereupon, on the 3rd of April, an order was made to stay proceedings on payment of costs. The bill remained in the hands of the bank until the costs were taxed and paid. The costs were taxed at 217. 11s. 4d., and that sum was, on the 13th of April, 1866, paid to the bank by the plaintiffs, as solicitors for, and on behalf of, H. W. Cresswell; and on the same day the bill was delivered over to the plaintiffs as such solicitors. Two or three days afterwards, and before the 31st of May, 1866, the plaintiffs, to whom H. W. Cresswell was indebted for costs in an amount larger than that of the bill, applied to him for money on account, and he transferred to them the bill, which had already been indorsed in blank by him as aforesaid, in part payment of their claim against him; but there was no further or other indorsement of the bill to the plaintiffs. In the action by the bank against the defendant, the acceptor, the writ was issued on the 29th of December, 1865. Judgment was signed on the 3rd of March, 1866, and on the 6th of March the bank lodged a ca. sa. against the defendant on the judgment with the sheriff of Middlesex, indorsed to satisfy 3107. 9s. 11d., being the amount due on the bill and costs, and 17. 5s. costs of execution, &c. On the 29th of March the defendant, having been arrested in another suit, was informed by the sheriff's officer that he held this ca. sa. The sheriff's officer communicated then with the bank, and received an order to detain defendant under their |