The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1867-11-22
INVOLUNTARY BANKRUPTCY.


MvV4O04 Ahx 0A048Ox AVxs
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SPECIAL CORRESPONDENCE Or TINE HeaAln.
Nmpsrtaue Decides Or Judge Hall In Resar,
70 the saspension or Paymenss By Baker
Tsor. Nov 10, 1851.
Judge Nathan X Hall, q the United statss Dissrie
Ceer for the Northern district OF New York. has jus
pronounced The following dsslsion In case OF pvoIun
tary bankruptcy. The opinion u dscisivs OF the con
sevsrtsd question the construction OF that portion
oe the thirty ninth Of the Bankrupt oct rslatnI
q the suspension Of BY bankers and merchants
II intended thas the opinion shall settle the law upor
sshs point diseusssd In oil the districts:--
Uns Cd STATES Distvs Count for H. Nor'her~ Di,srsd
Sion Of h. 3. Clanin Co that Alfred L. Wells And
tAlireo L. Wess Jr constituting the nrm Of Alfred L
vel: son. BE- adadssd banxrupss Judge Hall dsliv-
The pssuon In lhs case alleges two acts OF bank.
xupIcy. viz: First that about tho 10th OF March,
1So1. the said Alfred L. Wells Son. being possessed Oh
. certain estate ana propertyto wit ! stock Of dry
goods and otner acies, together with divers
made an asignmeni Of Inc whole Of them. with intent
20 delay and hinder their creditors and second mat
on or shout The 10Th Of March, 1861 being merchants
enc Tsosrs tney rauduenty stopped and suspended
eno mad not resumed payment Of their Commercial
paper within PERIOD Of fourteen days. The petition
49, SHOWS tnas q The time mentioned the Arm
vas insovent thar Judgments mad been taken against
Shem and that suits other demands apains them
-. ooeh commenced and we're being prosecuted TO
yeaeme0t and exec ion The execution Of = general
e0tgnmsnt for the equal benefit OF ali the
creditors u admitted; but denied that 1t as exc
csted with The intent TO hinder delay creditors As
shere y no replication 70 aiming tnis denial
and IS the case has been brought hearing on the
petition and answer this INTENT IL It be not con-
ciusiveiy presumed matter OF law must
% regarded - dsarproved; and as there is
no allegation tina. tho assignment referred to was made
WIN intent 70 defeat or DELAY the operations Of the Bank
1ups ACT 10 are not called upon 10 decide whether
general assgnmeri making disposition Of the bank.
rupce property substantially the as that coutem.
PLACID by shs Bankrupt be considered an ACT OF
bankruptcy male in goodfsth before the frst dav AZ
Suao ss ana conseq emily Def re any petition could
Oe neo under that ACT ADD the single OF pre
venting portion OF bis creditors from obtaining nre-
terence over his otter cred We think there IA no
scoacusve legal presumption that the assignment was
made 70 delay or hinder credtora II NAV perhaps be
Sruy said II was with intent 70 delay ana hinder
Creditors who were striving 10 obtain
preference over the oher creditors Of the
~ pressing the suits had already Commenced To
Judgment and execution but ibis il not such an
intent ~ the Bankrupt act cntempla es Such an as.
9gnmen, under such circumstances and with such an
nten% would not be reil VOID under the statute of this
cA!e Wncn avoids convevances made with tue intent
90 delay. hinder deraid credtors and notwthsand
Ing the provision OF the section of the Bank
sc tnat SALE ass gnment transfer
os msoo ~ the usual course business OF the debtor
pvsa Jacie evidence OF fraud are Of the Opinion
oat under the denas contained in the answer il this
0ese ~ cannot properly hold that making Of the
Assgnmsnt under the stances stated was an act
Of bankruptcy. Upon the second allegation OF an sct
9. the petitioner. are emitted to adjudi
cAaon n Bankruptcy against the 70 spondents II is
Ssue that the o the provision OF the Bank
rupt act on which THIS allie alton is made Is not en-.
1sey Tree from doubt but the which iustt-
1ee such an adjudication adopted In another
district and, ws hnk. reasonable and just construc-
argument that this prnvsoo which sunoriss proceed
sAgs N invattm Against any person. who being :
barker. merchant " trader has frauduently stonped
ma suspended payment and not resumed payment OF
ms commercial paper within period Of fourteen days
Soss not authorize pr csedngs unless he original
etoppase or Suspension OF payment fraudulent no
W0St0r nov l0uQ DuC1 DuSDeu a ad
that the United states District Court OF south
CaFoLna has decided that such is not the true
ooosuucuon Q! the provision referred TO, and that s
erue conservation requires adjudication 10 bankruptcy
eganss banker. merchant % trader VINO s'has sus-
e1pes within period Of fourteen days" although such
euspenAon .: stoppa OF payment was not faudnlsnt
sad thas We think the TAR and proper construction
ne provision embraces tho cases; the one OF an
original fraudulent soppses OF payment In which pro-
essdngs may BE- instituted Ones and the other Of
q Z su e. Vi e. sss
saa fourteen days becomes act OF bankruptcy by
continuance This racson Of the language Of this
PaIucuiar provision onder consideration H. think,
esss CALCULATED carry out The gepera utentons Of
Cocgrss - expressed 10 sne Bankrupt act; and such
Sonss.scsiss 20. strictly required BY certainly not
With, the Ian Of the prov-
oos alluded 60 tcan hardly be supposed that Congress
latendsd the credi Of banker ercnaut or trader
paper should b compelled TO allow him fourteen days
70 eonsummafs his fraudulent purposes aud perasps
secrs!ly remove from The United States with the mass
Of bis properly before they could take proceedings
against him. There IL certainly no moro reason for
allowing such delay aftsr . fraudulent act Of that
character than there 10 In where bankrupt has
fanduienuy concealed or Transferred portion OF his
property. But when the suspension IL from necessity
and without fraud. the period Of fourteen days il
properly allowed the honest trader that be may IN case
he solvent and only temporarily embarrassed take
Abe aeoessary mrasures 70 enable him pay his dis.
henorsd paper aud 10 prevent his business beinbroken
mp proceedings bankruptcy. fhe accidental loss or
MiscAfags Of expected rsri'tances; the uuexDecsed
ALLURE Of correspondent bank in which his depo.
eta are kept; thu ai OF his debtors to their
commercial paper any Other OF the many msforuncs
and accidents incident 70 commercial and
financial operat Qua NAV compel entirely
suspend for day or Two the nsn Of his commercial
paper but merchant of air character, who Is solvent
aal deserving o. credit can. BY means Of temporary
ioan otherwise, provide Tor resuming payment OF
mis- commercial paper within the four days allowed
By the Bankrupt act. suspension continued FOR q
longer period may well b, considered ~ evidence Of
hopeless Insolvency . wan OF adequate capacity 10
carry his business and emitting his creditors to
take proceedings secure the application OF his
perry 70 pay his debts Be wesn these two classes-
between the honest trad who suspends payment by
reason Of misfortune accident and the fraudulent
eas who stops paym~nt that he retain and secure
his means for the future bsue6t OF himself and family
Shs esciuson Of hi creditosCongress has Ne think
very properly made clear distinction which only
Be acesd BY adherng the construction heretofore
given the provision referred 10 BY the Only Dis riot
Court which Aas within our Knowledge, passed upon
this question.