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It is inevitable that the amount withdrawn from the securities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.*

Harvard Law School.

be £1,200, the second £720, the third £432, etc. In this case it soon becomes evident that the securities will never be exhausted, though the above process be carried on *ad infinitum*. Now the aggregate of all the dividends may be readily determined as follows: The numbers 1,200, 720, 432, etc., will be found to constitute a geometrical progression, the ratio () of the terms of which is ₁₂₀₀ ⁷²⁰––– = ⅗, and their number infinity. Taking the formula ( being the first term of the progression) we find the sum of the dividends in this case to be £3,000. The total amount of the securities to be divided among all the other creditors will be found to equal £1,200, or the first dividend. For if the bill-holders’ dividends are , , , , *etc.*, to infinity, those of the general creditors will be , , , *etc.*; the last dividend being infinitely small, it will be found on addition that all the terms except vanish. Having thus ascertained the total amount due the general creditors, it will only remain to distribute it in proportion to their respective claims.