References: (1790) 3 Term Reports 539, [1790] EngR 2276, (1790) 3 TR 539, (1790) 100 ER 721
Links: Commonlii
Coram: Lord Kenyon Ch J, Grose, Buller, Ashurst JJ
There had been an agreement to lend to the bankrupt some stock which she undertook to replace. The act of bankruptcy and the declaration of her bankruptcy took place before the stock was replaced. The parties disputed whether the agreement created a provable debt. It was argued that the agreement did not provide for payment of a sum certain but only for the replacement of the stock at some indefinite point in the future. It was therefore a claim for unliquidated damages.
Held: (Majority) There was a provable debt.
Lord Kenyon thought that there was a provable debt in an amount equal to the value of the stock on the day of bankruptcy.
Ashurst J said that the only provable debts were those which could be recovered in the form of an indebitatus assumpsit, thus excluding any claim in damages.
Buller J said that the form of action was not determinative and the real question was whether the amount of the debt could be ascertained without the intervention of a jury.
Grose J said that a creditor could prove for a claim in damages provided that they were in a liquidated sum.
Lord Kenyon CJ said: ‘The question in this case depends on a simple principle of law, which cannot be doubted. It is clear, that where one person, previous to his bankruptcy, is indebted to another in a precise sum which is ascertained, the latter may prove his debt under the commission: but it is as clear, that where there is only a cause of action existing, where the debt is to arise on a stipulation which has not been broken previous to the time of the bankruptcy, and where the debt remains to be inquired into, there the creditor cannot prove his debt under the commission, and the demand will remain undischarged by the certificate.’
This case is cited by:
- Cited – McGuinness -v- Norwich and Peterborough Building Society CA (Bailii, [2011] EWCA Civ 1286, [2012] BPIR 145, [2011] NPC 117)
The appellant had guaranteed his brother’s loan from the respondent, and the guarantee having been called in and unpaid, he had been made bankrupt. He now appealed saying that the guarantee debt, even though of a fixed amount could not form the . .