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Judgment
This question has been decided in England under the corresponding Section 48 of the Bankruptcy Act of 1883 in 1897 by Vaughan Williams,
J., in In re Paine: Ex-parte Read (1897) 1 Q.B. 122 and in 1900 by Buckley, J., (now Lord Wrenbury) in hire Blackpool Motor Car Co. Limited
: Hamilton v. Blackpool Motor Car Co. Limited (1901) 1 Ch. 77. In the latter case the learned Judge after considering all the authorities including
the dicta in In re Mills : Ex-parte The Official Receiver 58 Law Times 871, held following the earlier decision that a surety being entitled to prove in
bankruptcy must be considered a creditor for the purpose of fraudulent preference u/s 48 of the Act of 1883. That decision has not since been
questioned in England and may we think be accepted as settled law. This was apparently the view taken when the new consolidated Bankruptcy
Act of 1914 was passed. The defect disclosed in Section 48 of the Act of 1883 by the decisions in In re Mills : Ex parte The Official Receiver 58
Law Times 871, In re Warren : Exparte Trustee (1900) 2 Q.B. 138 and In re The Stenotyper Limited : Hastings Brothers v. The Stenotyper,
Limited (1901) 1 Ch. 250 was then remedied by amending the section renumbered 44 so as to include expressly payments made to a creditor with
a view to prefer his surety, A similar amendment would no doubt have been made to meet the case of payments to the surety himself with this
view, if it had not been considered that they were already within the section as construed in these two cases. Such payments are even more
objectionable than payments to the creditor as they do not directly reduce the indebtedness of the estate.
We accordingly answer the question in the affirmative.