Page:United States Reports, Volume 1.djvu/399

388 

1788.

of the bankruptcy cannot be granted without the confent of four fifths in value of the creditors; but, in Pennʃylvania, the granting it refts entirely with the Commiffioners; and there is no check upon its operation, but that it muft be firft allowed by the Prefident of the Supreme Executive Council, under the great Seal of the Commonwealth.

In the cafe under confideration, the Commiffioners have granted, and the Prefident has allowed, a certificate in favor of the Defendants; but four exceptions have been taken to the proceedings on which the certificate is founded, in order to maintain the Plaintiff's action, which is brought for the recovery of a debt contracted before the act of bankruptcy. The Court being of opinion that the evidence in fupport of thefe exceptions ought to be fumbitted to the Jury ; it now only remains to confider, whether the exceptions themfelves are fufficient, in law, to defeat the benefit which the Defendants claim from the certificate.

1. In the firʃt place, it is faid, that the debt of the petitioning creditors, was not fuch as warranted the iffuing of the commiffion ; for, it was contracted before the act of Affembly for the regulation of bankruptcy, although a bond of a fubfequent date was given for it: And the Plaintiff's counfel have contended, that this relation between the bond and the former debt is fufficient to take the cafe out  of the act. On the part of the Defendants, however, it is infifted, that the original debt was extinguifhed by the bond, fo as to fatisfy the provifo in the 3 ʃect. of the law.

The general doctrine of extinguifhment is, at this day, well fettle and underftood. If a creditor upon a promiffory note, or book account, accepts a bond for the amount from his debtor, this, being a fecurity of a higher nature, extinguifhes the firft debt, and the creditor cannot afterwards fue upon the note, or account but muft proceed for the recover of his money upon the bond alone.

There is, however, no authority precifely in point to the queftion now agitated; but the determination in Caʃes temp. Hard. 267. is though by the Plaintiff's counfel to be in a great degree analogous. On that occafion a bond had been taken after an act of bankruptcy, (of which the obligee had no notice) for a fimple contract debt due before, and as any debt that accrues after an act of bankruptcy is not entitled to a dividend, the Chancellor there confidered the debt as it originally ftood, in order to give the benefit of it to a creditor, who would otherwife have been excluded, without any default on his part, from a diftributive fhare of the bankrupts effects. This cafe, therefore, is is objected by the Defendant's counfel, muft have depended upon the pecuilar circumftances in which it was involved ; and that this appears the more evidently, as Lord Hardwicks exprefsly fays, that, between the parties themfelves, the bond would operate as an extinguifhment of the precedent debt. There can be no doubt, indeed, that many of the cafes on this fubject have been determined by the particular circumftances that attended them ; for,