Page:Federal Reporter, 1st Series, Volume 3.djvu/224

 CAVANNA ». BA8SETT. 217 �liability on any balance which might be due to complainant af ter exhausting her security ? �î. think the question must be answered in the negative. Complainant had a right to hold on to her security, and as a secured creditor she could not properly participate in the composition proceedings. She could not be compelled to sur- render her security, and corne in and prove her claim ; nor ■was it incumbent on her to have her security valued and then to make prôof of any balance ; nor should her failure to do this be taken as evidence that she intended to rely -wholly for payment of her demand upon her security. The bankrupts knew, or should have known, that there was a liability that the security wonld not pay the indebtedness. They were chargeable with notice that such a contingency might arise, and if they desired to put complainant in position ■where the composition proceedings would operate upon her, they might have applied to the court for proceedings compulsory in their nature to have the security valued. Not having done so, there remained a liability that in case the security should prove inadequate complainant would have the right, as to any deficiency, to compel payment of the same to the extent of the percentage paid to unsecured oreditors under the com- position. The case of Par et v. Ticknor, 16 N. B. B. 315, I regard-as authoritative upon the question. In that case there ■was a composition proposed by the bankrupt. A secured creditor was named in the bankrupt's schedules, and had notice of the meeting of the creditera and the proposition for a compromise. It was stated also in the schedule that the secured creditor was fully secured. He made no objection and gave no consent to the proposed compromise. After- wards the security was sold and applied on the debt, and there remained an unpaid balance. Suit was brought to collect that balance. In defence it was contended, in behalf of the bankrupts, that they were fully discharged by the com- position proceedings of any claim on account of the debt. It was held by Mr. Justice Miller, Judge Dillon concurring, that the mere silent acquieecence of the creditor in the com- ����