The daily Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1841-1845, 1842-06-10
From The ". Y Express
IMPORTANT DECISION IN BANKRUPTCY

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IMPORTANT DECISION IN BANKRUPTCY.
The operation Of the involuntary provisions Of the
Bankrupt Law have been illustrated by case OIL
much Importance in the District Court OF the United
States for Middle Tennessee Judge NJ w brown
presiding We commend it to the attention of the
commercial and trading community especially, as
affording insight into the remedy provided by this
benefcent law for of partial or fraudulent as
signments and conveyances, made in falling CIR
cumstances.
The facts Of the case, as we find them stated in
the Nashville Wing, are briefly these
Galbralth Cromwell, & Co., were partners in
trade al GAINESVILLE in this State, and (under the firm
of Galbraith, Logan s Coz at New Orleans, La.
In the month of April, they failed In business and
became insolyent. About the time Of the failure,
Cromwell of the firm, and the active partner at
GAINESVILLE made an assignment of the partnership
effects to secure certain creditors, leaving unproylded
for large debt due to the Planters Bank Nc keage,
and other creditors. The claims of the preferred
creditors amount to upwards of $4,000, and the
claims left out Of the deed of trust to 100000.
Logan one of the firm, was privy, and consented to
the assignment made by Cromwell. The other part
ners, Gabraith s. Greenfield, were at New Orleans,
and knew nothing of it when made, and dissented to
the transfer of effects as soon as they heard oil IT,
| The Court decided. That the preference given
by Cromwell in the deed of assignment made for the
benefit Of part of the creditors, in violation OF
of the Bankrupt Law, and on account OF this pre-
ference the debtors being merchants il was fraud
on the part OIL CrOmWell, ana also on Tue part VI
| Logan, who consented to the transfer 1t was an
act of Bankruptcy on their part, and brought them
and their effects under the operation OF the Bankrupt
Law on the petition Of their creditors.
| g That the deed of transfer made by Cromwell
being in violation Of the Bankrupt Law, utterly
void g. That Galbraith and Greenfield, who had
no knowledge of the deed at the time it was execu-
ted and dissented from the transfer soon they
heard of it, not, personally, affected by the act
of Cromwell, and that the same no act of Bank
ruptcy on their part A. That Galbrath Cromwell
s Co, and the partners composing the firm, being
nSoipent and partners in trade the whole OF the part
ners must be declared Bankrupts by reason of their
insolvency. under the 14th Section of the Act of Con-
gress in relation to Bankruptcies. And decree was
entered accordingly
This decision settles most important point in rela
ton to mercantile partnerships viz That if the part
become nsovent they can be declared bankrupts
under the 18th section of the act OF Congress- on dc-
/ count of their Insolvency alone.
The effect of the foregoing decision upon the part
nels acquitted of fraud, but declared bankrupts by
of their insolvency, is the same as in cases OF
voluntary bankruptcy. The commissioner and as
signee having reported full and satisfactory surren
der of all the effects individual well partner
ship,) under the control of Mcssrs. Galbraith and
Greenfield, they entitled TO final discharge and
certificate upon their own petition, unless other
Of denial than the acts of their partners should in
the meantime iranspire. The GAINESVILLE partners
occupy different position, and only be dis
charged by the consent of major ty, in interest
the non- preferred creditors.