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1834.

Ex parte GREENWOOD. In the matter

of

BAILLIE

ought to have been served with the petition; but, upon the representation by the counsel for the assignees that the bill had been delivered up to them by the representatives of Cor, who was dead, and that it was then in their possession, the objection was not pressed, and the argument proceeded on the merits, upon the considera- and another. tion of which the order was eventually made which the present petitioner now seeks to rescind or modify. Upon the petition being opened on the re-hearing, the learned Judge, who had been absent upon the former occasion, having suggested that the order to expunge the proof, having been made in the absence of the drawer, and of those who represented his interest in the bill, and without any proof of service upon them, could not be supported, and the objection having been adopted by the counsel for the respondent, it was thought desirable to have that question argued and decided in the first instance, because, if that objection should prevail, it might become unnecessary again to discuss the effect of the certificate and the statute of limitations. When the suggestion was made upon the hearing of the original petition, I thought it was answered by the facts of the case, from which, coupled with the possession of the bill by the assignees, I thought it might be fairly inferred that the bill had been accepted for the accommodation of the drawer, and that they had no claim upon the estate of the acceptor in right of Parker's proof; and, as the objection was not pressed, both parties seeming desirous to have the petition decided on the merits, I considered the objection as to the service waived, and proceeded to form my judgment upon the questions raised by the parties whose interest alone could be concluded by our decision. But when the objection was renewed upon the re-hearing, and pressed upon our attention, it became necessary to examine it

1834.

Ex parte GREENWOOD.

In the matter

of BAILLIE

more attentively, and for that purpose I thought it right
to postpone our final judgment upon the point until we
Could have an opportunity of deliberating and consulting
the subject.
upon

The way in which the difficulty presents itself to my and another. mind is this: the assignees demand the restitution of the dividend paid to Greenwood upon Parker's proof; if they assert their claim made in their character of assignees of the bankrupt acceptor, it is necessary, as a preliminary step, that they should expunge the proof of Parker's debt from the proceedings, and this they accordingly ask the Court to do; but if any other person has an interest in maintaining the proof upon the proceedings, the Court ought not to expunge it without his consent. The first question to be asked, therefore, is, has any other person an interest in the proof? Primá facie, the acceptor of a bill of exchange must be taken to have effects of the drawer in his hand, and, therefore, if upon the dishonour at maturity the drawer take it up, he is entitled to recover the amount from the acceptor, if solvent, or, if bankrupt, to prove it against his estate; or if it has already been proved by the indorser, to stand in the place of the indorser, and to receive the dividend upon his proof; and a person taking up a bill for the honour of the drawer stands in the same situation. (a) In this case, therefore, Cox, when he took up the bill in question, in 1807, must, prima facie, be considered as taking Parker's place, and as entitled to all the rights attached to his proof in respect of the bill. But this prima facie case may be rebutted by proof that the bill was accepted by the bankrupts for the accommodation of

(a) Ex parte Wuckerbeth, 5 Ves. 574. Ex parte Lambert, 13 Ves.

1834.

Ex parte GREENWOOD.

of

BAILLIE

and another.

the drawers, and that they had no effects of the drawers in their hands; in which case, though the acceptor would be liable to Parker as an indorsee for value, the drawers, by taking up the bill, would derive no In the matter claim under Parker's proof, and Cor of course could have no better title than theirs. The main question, therefore, upon the branch of the case now under consideration, is, whether there be sufficient evidence to shew that this was an acceptance for the accommodation of the drawers, and that the acceptors had no effects in their hands.

The fact principally relied on by the assignees, namely, the delivery to them of the bill by the representatives of Cox, is not, I think, sufficient to raise any inference in their favour, unless all the circumstances under which it came into their possession were before the Court. It may, certainly, have been delivered up by Cox's executors, because they knew that Cox had no claim in respect of it; but it may have been sent to them for the purpose of ascertaining whether he had any such claim or not, or for some other purpose; and we are left without any clue to guide us, by those who had it in their power to give the fullest explanation.

There are, however, other circumstances in this case tending strongly to the conclusion that the acceptors never received any value for this bill. At the time it was taken up by Cox there was upon it the endorsement by the commissioners, shewing that it had been proved under Baillie and Jaffray's commission. At that time a dividend to the amount of 947. 12s. 11d. had been declared upon the proof.

The commission was worked in London. The bill was taken up in London, by a merchant who must have well understood the right of parties upon such instruments; and yet no claim was made by Cox for the dividend.

1834.

Ex parte GREENWOOD. In the matter

of BAILLIE

and another.

The inference from these facts is certainly very strong, that Cor knew that the drawer had no claim upon the acceptor in respect of this bill; and, therefore, that he either never took the trouble to enquire whether any dividends had been declared, or, being aware of the fact, declined to receive them. But the case does not rest there; for, although the bill has remained in the hands of Cor or his personal representatives for more than twenty years, he seems neither to have claimed the amount from the drawer or the acceptor, for the vouchers in the year 1831 come out of the hands of his personal representatives. These are undoubtedly very striking facts; from which, if Cox were before the Court, and could give no satisfactory explanation of them, I should feel myself compelled to draw the conclusion, that the bill had been taken up by him because the drawers were primarily liable, and that he had, therefore, no interest in Parker's proof against the bankrupt. But then there are circumstances to be placed in the opposite scale: the assignees must have had the means of ascertaining whether the bill was for value or not; they must be taken to have known their right, if it was not for value, to recover against the drawers; they appear to have been ignorant that the drawers, or any person for their honour, had taken up the bill; their forbearance, therefore, to seek reimbursement from the drawers, raises as strong an inference of their consciousness that the acceptance was for value as the silence of Cox affords on the other side. And now they are before the Court they might have shewn the fact that it was not for value; they might have shewn the circumstances under which they obtained the bill from Cox's executors; and yet they leave us without any explanation. Are we, then, in the absence of those who represent the drawer's interest, to raise an inference against them in favour of parties who might have given

further information, but have failed so to do? I think
we ought not; because I do not feel myself at liberty to
draw the same inference from the conduct of persons
not before the Court, whom the party requiring me to
draw the inference ought to have brought before us, that
I should have done if they had been called
for an
upon
explanation and had failed to give it, and still less when
the party on whom the burthen of proof rests fails to
give all the explanation of which his case is susceptible.
Neither do I think that the mere possession of the bill
by the assignees, unexplained, entitles us to consider them
as representing the interest of the drawers, and to ex-
punge the proof as upon their consent. I am, therefore,
of opinion, that we ought not, upon this evidence, to ex-
punge the proof; and considering the direction to refund
the dividend as merely consequential upon the direction to
expunge the proof, the former order made upon the origi-
nal petition must be rescinded, of course without costs.

The only remaining question is, what is to be done with the original petition? there are three ways of disposing of it: 1st, by dismissing it with costs; 2dly, by dismissing it without costs; 3dly, by allowing the assignees to amend, re-answer, and serve all parties, reserving the question of costs until the merits shall be ultimately decided. In looking at this part of the case I cannot exclude from my view the fact that the respondent has obtained possession (innocently I will assume) of a considerable sum of money to which he had no legal claim, and which he had not applied to the only purpose to which, if rightly received, it ought to have been appropriated, and that a great portion of this money he may successfully refuse to refund. Neither can I overlook the circumstance, that the point upon which the case is now disposed of was not set up by him as a ground of defence in the first instance, in which case

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