National Mount Wollaston Bank v. Porter

Devens, J. If the claim of the plaintiff, which was upon a contingent liability of the defendants upon an indorsement made by them upon a negotiable note not yet matured, was a debt provable in bankruptcy, and one which could be satisfied by a composition with their creditors, it could only be thus satisfied upon compliance with the terms thereof. In re Hurst, 13 Bank. Reg. 455. In re Reiman, 12 Blatchf. C. C. 562. The plaintiff had received fifty per cent, of its debt from the metate of the maker, but this was no reason why the defendants should not pay them the fifty per cent, upon the whole debt as they had entered it upon their schedule. The plaintiff was entitled to the benefit of its double security. Where both maker and indorser are liable, the holder of a note may prove the amount against each, and receive dividends to the full amount of his debt. [310] Sohier v. Loring, 6 Cush. 537. Blake v. Ames, 8 Allen, 318, Ex parte Talcott, 2 Lowell, 320. Having refused to pay according to their composition, the defendants cannot now protect themselves by it from an action at law. Edwards v. Coombe, L. R. 7 C. P. 519. In re Hatton, L. R 7 Ch. 723. If the note was not provable in bankruptcy before maturity, and it would seem that it was not, the same result follows. U. S. Rev. Sts. § 5069. In re Loder, 4 Bened. 305. Claims against a bankrupt, which are not provable, are not barred by any discharge. In re Kingsley, 1 Lowell, 216. Hamblen v. Ratigan, 119 Mass. 153. They cannot be satisfied by a composition to which the holders of them have no right to become parties, even if such claims are properly described on the schedule of the debtor. The defendants do not cease to be liable because the debt has been satisfied, as against the maker, by the composition into which he was permitted to enter, nor because of the receipt by the plaintiff of a dividend under it. The resolution for such-composition does not appear to have been passed with the concurrence of the plaintiff. It may have been the act of others and of the court, which it was powerless to prevent. Whether, if, without the consent of the indorser, the plaintiff had concurred in the composition with the maker, it would have operated to release the indorser, is not now before us.* Judgment affirmed. Footnotes [*] See Guild v. Butler, post, 498.