1 And where a surety for a debt holds security as an indemnity from the bankrupt, the creditor can and must compel the surety to apply the property towards payment of .the debt, and can prove only for the deficiency. But when one partner gives security on his separate property for a joint debt of the firm, the creditor may prove for the full amount against the joint estate of the firm, without surrendering,* selling, or valuing his security, Re Holbrook & Co. 2 Lowell, 2.39. - K.

If any persons, creditors of course, have attached the property of the insolvent to obtain a preference, the attachment is dissolved at once by the bankruptcy, if it were made within four months next preceding the commencement of said proceedings, (t)

*The law of set-off, under the bankrupt law, depends upon section 20, which permits it and makes provision to render it effectual. It is wider in its reach than the common law, or statutory provisions for set-off not in insolvency. It covers all mutual claims or debts of every kind. A creditor of the insolvent, who is also his debtor in any way,gets the whole benefit of all his debt to the insolvent. If he paid it in money, this would go to the fund. But he may pay it by set-off; and if this equals or exceeds his debt to the insolvent, his whole debt is paid, (v)1

Amory v. Francis, 16 Mass. 308; Lanck-ton v. Wolcott, 6 Met. 305. It seems that in England the usage has been for the court to direct a sale, and the creditor was allowed to hold the amount realized therefrom, and prove for the residue. Eden on Bankruptcy, 104 et seq.; Deacon on Bankruptcy, 178; Ex parte Goodman, 3 Madd. 373; Ex parte Parr, 1 Rose, 76; 18 Ves. 65; Ex parte Bennet, 2 Atk. 527; Ex parte Wildman, 1 id 109; Ex parte Be Tasted, 1 Rose, 323, declare the doctrine, that where the creditor holds the security of a third person merely, or the joint security of the bankrupt and a third person, the creditor may prove for the whole amount, and retain his security at the same time, to recover what he can upon it, provided that he receives in the whole no more than twenty shillings to the pound. Ex parte Hedderley, 2 Mont. D. & De G. 487; Ex parte Shepherd, id. 204. See also Ex parte Prescott, 4 Deac. & Ch. 23; Ex parte Dickson, 2 Mont. & A. 99; Ex parte Rufford, 1 Glyn & J. 41; Ward v. Dalton, 7 C. B. 643. But it was held, as above, that securities from the bankrupt alone must be given up before proof. Ex parte Bloxham, 6 Ves. 449.

600; Ex parte Barclay, 1 Glyn & J. 272; Ex parte Smith, 3 Bro. C. C. 46; Ex parte Dickson, 2 Mont. & A. 99. See also, on the same point, Ex parte Baker, 8 Law R. 461, and Eastman v. Foster, 8 Met. 19.

(t) Section 35.

(v) In addition to our remarks and citations on the law of set-off in note (A), p. * 483, we would say, that in Gibson v Bell, 1 Bing. N. C. 743, Tindal, C. J., set forth with accuracy the progress of the English law on this subject. See p. 753 et seq.; Bolland v. Narb, 8 B. & C. 105; Ex parte Deeze, 1 Atk. 228; Ex parte Prescot, id. 230; Boyd v. Mangles, 16 M. & W. 337. The credits, it is said, must have been given before the bankruptcy. Herrison v. Guthrie, 3 Scott, 298; Russell v. Bell, 1 Dowl. (n. S.) 107; Hulme v. Miggleston, 3 M. & W. 30; Young v. Bank of Bengal, 1 Deacon, 622; Ex parte Hale, 3 Ves. 304. In order to come within the purview of the doctrine, the debts to be set off must be due in the same right. Groom v. Mealey, 2 Bing. N. C. 138; Staniforth v. Fellowes, 1 Marsh. 184; Yates v. Sherrington, 11 M. & W. 42, 12 M. & W. 855, Belcher v. Lloyd, 10 Bing. 310; Forster v. Wilson,

1 A customer of a bankrupt bank, who has overdrawn his account, may, in an action against him by the assignee, set off a fund deposited by him as executor, and in which he alone is beneficially interested as residuary legatee. Bailey v. Finch, L. R. 7 Q. B. 34. A bank, having on deposit certain money of a bankrupt, may set off that money against the aggregate debt due the bank, not including notes on which the bankrupt is surety, unless the principals are insolvent. Ex parte Howard Bank, 2 Lowell, 487. Where stock was held by a creditor as security for one of two debts due from a bankrupt, he was allowed, after satisfying the secured debt, to set off against the unsecured debt a surplus arising from a sale under a statutory power. Ex parte Whiting, 2 Lowell, 472. - Where the petitioner had in his hands money of the bankrupt corporation for making payments in his capacity as superintendent, he was allowed to set it off against the amount due him for salary, whether he was in the habit of paying his own salary or not. Ex parte Pollard, 2 Lowell, 411. But the refusal of a creditor to apply money

* A verdict in favor of a creditor, which might be decisive against the insolvent himself, is not necessarily so against an assignee. Any other creditor may, for good reason,, ask that the verdict be inquired into and impeached; and the assignee not only may, but must do this, if he can, supposing sufficient reason to be shown, (w)

A judgment is stronger than a verdict It is indeed the highest evidence of debt; and, as between the parties, it is conclusive at common law. But it is not conclusive in insolvency. Courts have declared that proof of a debt is not made out by *suit, verdict, and judgment, however formal and accurate, if the court can see clearly, by means of competent evidence, that the debt itself is not actually due to the creditor in good faith, (x)l The court or commissioner may certainly inquire into the consideration of a judgment debt

12 M. & W. 191; Clarke p. Fell, 1 Nev. & M. 244; French v. Andrade, 6 T. R. 582; Cherry v. Boultbee, 4 Mylne & C. 442; Went v. Pryce, 2 Bine. 455, Ex parte Pearce, 2 Mont. D. & De G. 142, Ex parte Blagden, 2 Rose, 249; Addis v. Knight, 2 Meriv. 117; Ex parte Ross, Back, 125; Fair v. M'lver, 16 East, 130, Slipper v. Stidstone, 5 T. R. 493. The credits must be such as willin their nature terminate in debts; Rose v. Hart, above cited, 2 Smith, L. C. 179; Rose v. Sims, 1 B. & Ad. 521; Russell v. Bell, 1 Dowl. (n. s.) 107; Abbott v. Hicks, 7 Scott, 715; Groom v. West, 6 A. & £. 758; Tamplin v. Digging, 2 Camp. 312; Ridout v. Brough, Cowp. 133. So it has been said that if a banker receives and pays money on account of a bankrupt, after notice of his bankruptcy, he cannot set off the payments against the receipts, as against the assignees. Vernon v Hankev, 2 T. R. 413, 3 Bro. 313; in Raphael v. Birdwood, 5 Price, 593; Atkinson v. Elliott, 7 T. R. 378; Ex parte Boyle, Cooke's Bank. L. 571 (8th ed); and in this last case it was held, that if a bankrupt be indebted to a creditor in two sums, for one of which the creditor may prove, for the other not, and the creditor be indebted to the bankrupt, he may set off his debt against the debt he cannot prove, and prove for the other. See cases cited, ante, sect. 8, note (g), p.*483.