Page:Harvard Law Review Volume 1.djvu/345

 it is submitted, determine the exact amount of all the dividends due each individual creditor. No such computation was rendered necessary in the case of The Royal Bank v. The Commercial Bank, 7 App. 366, because after the third dividend the security was exhausted.

It will be seen that in many cases the bill-holders are materially benefited by the fact that the acceptor holds funds for his indemnity, and it may be objected that to allow them to share in any way in the distribution of the latter is inconsistent with the very foundation on which the Scotch rule rests. In reality, however, what they receive is not taken from the securities as such, but from the assets of the debtor. The bill-holders do not occupy the position of preferred creditors, for they share the sums derived from the securities pari passu with the general creditors; nor do they profit at the expense of the acceptor’s estate, since the latter has a right to reimbursement for every dividend paid. It is inevitable that the amount withdrawn from the securities should in its turn become an asset, and it is only just that the bill- holders, whose debt has not yet been extinguished, should be allowed to prove against it in competition with the other creditors.

Of the four views presented the last would seem to be the only one consistent with justice and the intention of the parties.

William Williams.