Staunton spectator, and general advertiser. [volume] (Staunton, Va.) 183?-1849, 1842-06-23

IMPORTANT DECISION IN BANKRUPTCY. :
The operation Of the involuntary provisions
of the Bankrupt Law have been illustrated by
a case of much Importance in the District
Court Of the United States for Middle Tenncs-
see, Judge NJ. w. Brown presiding. Wecom-
mend ito the attention of the commercial and
trading community especially, as afrording an
insight into the remedy provided by this be.
nefcent law for cases of partial or fraudulent
assignments and conyeyances, made in failing
circumstances.
The facts of the case, as we finG them stated
in the Nashville Wing, are briefly these
Galbraith, Cromwell S, Co., were partners
IN trade at GAINESVILLE, in this State, and (un.
der the irm Of Gaibraith, Logan s. C.,.) 1t
New Orleans, La. IN the month Of April they
failed in business and became insolvent. A.
bout the time of the failure, Cromwell, one of
the firm, and the active partner at GAINESVILLE.
made an assignment of the partnership effects
to secure certain creditors, leaving unprovided
Tor large debt due to the Planters Bank, Nc
keage and other creditors. The claims of the
preferred creditors amountto upwards of $780,
OOO, and the claims left out of the deed of
trust to S 100000. Logan, one of the firm.
was privy, and consented to the assignment
made by Cromwell. The other partners, Gall
braith and Greenfield, were at New Orleans,and
knew nothing of it when made, and dissented
To the transfer Of effects as soon as they heard
oft
The Court decided. That the preference
given by Cromwell in the deed of assignment
made Tor the benefit OF part Of the creditors,
was IN violation of the Bankrupt Law, and OH
account of this preference, the debtors being
merchants, it was fraud on the part of
Cromwell and also on the part of Logan,
who consented to the transfer. 1t was am
act oil Bankruptcy on their part, and brought
them and their effects under the operation of
The bankrupt Law on the petition of their
creditors.
Z. That the deed of transfer made by Crom-
well, being IN violation of the Bankrupt Law,
was utterly void. }. That Galbraith and
Greenfield, who had no knowledge of the
deed at the time 1t was executed, and lissented
from the transfer as soon as they heard of it,
were not, personally, affected by the act Of
Cromwell, and that the same was not an act
oi bankruptcy on their part. 4. That Gal
brailh, Cromwell s. CO., and partners compos.
ing the firm, being insolreat and partners in
frddT, the whole of the partners must be de.
cy, under the 18th Section of the Act of Con-
gress IN relation to Bankruptcies. And de-
cree was entered accordingly
This decision settles most important poirt
IN relation to mercantile partnerships, viz:
That II the partners become insolvent, they
can be declared Bankrupts under the 18th Sec=2
ton of the Act of Congress, on account of their
Insolvency alone.
The effect of the foregoing decision upon
the partners acquitted of fraud, but declared
Bankrupts by reason of their insolvency, is
the same as in cases of voluntary Bankruptcy.
The commissioner and assignee having report
ed full and satisfactory surrender Of ali tho
effects, Qndivi1ual as well as Partnership UNI
der the control of Alessrs. Galbrailh and Green-
held, they Wero onti ,lal- - ci I:~iIdr8c anu
certificate upon their own petition, unless 9th.
or cause ofdenial than the acts of their petit
TONERS should in the meantime transpire. Tho
Clarksville partners occupy adiflerent position,
and can only be discharged by the Consent Of
majority, in interest, of the non-prefcyred
creditors.