The New York herald., 1868-05-24
NEW YORK ClTY.
UNITED STATES DISTRICT cuuaT-M BANKRUPTCY
Important Question as to Statutory Trusts.

UNsItU SIAItS uSihIi IuvhI-M bANkhUPI ICI.
Important Question as to Statutory Trusts.
Before Judge Batchforu
An important decision, in the case Of Lewis
Meyer, was rendered yesterday. On the sth Of
June, 1866. Martin Mas recovered a judgment
IN the Supreme Court of New York against the
bankrupt and one Sandheim as joint debtors for
Sl,l3o 10. II was duly docketed and execution was
issued on it and returned unsatisHed. 1t is now
whOny due with interest from January, 1895. It
was founded on two promissory notes of the debtors
and on an account for goods sold. On the 9tn OF
April 1896, Bache, Ulman and Bach recovered judg
ment in the Supreme Court Of New York against the
bankrupt and Sandheim as joint debtors for 08
was duly dOcketed and execution issued on 1t and
resumed unsatisfed, and it Is now wholly due with
interest from Its recovery. 1t was founded on
promissory note of the debtors, made August 10,
1880 at eight months for $7s1 So. The consideration
for the note goods sold to the debtors by Bache
glman and Bach, in July, August and september,
1850. In March, 1868, Mas and Bach and Gilman and
Bach commenced an action in the Supreme Court
wife, alleging, among other things, that while the
bankrupt was so indebted to them while he he was In
solvent and or about the l4th OF April 1884, he pur
chased with his own money a lot OF land with a
house thereon that at his own request this property
was conveyed to the bankrupts wife by the vendors
bankrupt paid the whole or the quarter part of the
purchase money, more than sufficient to pay the
Of the two saa a that
lot are now worth over $2o,ooO that the conveyance
was voluntary as between the bankrupt and
his wife; and that 1t is fraudulent as against
the plantns in the suit his creditors. The prayer
Of the petition is for Judgment that the trust which
1s alleged to be vested IN bankrupts wife, may be
tabiished and declared; that the plaintiffs may be
declared to be entitled In equity to enforce the trust
that the wife of the bankrupt may be declared to be
the trustee thereof and that unless she pay to the
plaintiffs the amount due the house and lot may be
SOLO by receiver to be appointed Dy the court, and
may be paid. In February, 1865 and before the
suit was commenced bankrupt filed his volun-
N April last the court made an order staying the
proceedings IN the action IN the State courts until
ns 10 OF b the should be
apply to the court for an order setting aside such
order of stay 1t is claimed that the real estate in
rnpt After advertIng 'r to the law on the
sabect the Judge says the creditors seek to
lot as representing the money alleged to have been
70 fraudulently applied by the bankrupt The fraud,
and only fraud committed by the bankrupt, was in
Therefore, In the case set up by the creditors In their
complaint, the money SO used and applied by the
Is property conveyed by the bankrupt in fraud
.Ii OF MS creditors" As such it passed by virtue Of
sSptey ana he can sue for agd recover
such property. Any equitable right which
the GSrs ed %s had d, 70 trust
in respect to such money its representative and
any equitable right conferred on them by the bring
Ing OF their suit, is subordinate to the right and
title of the assignee in bankruptcy His title relates
back to thel3h Of February, 1868. The suit of the
creditors was brought afterwards The equitable
right to enforce statutory trust is not such
Hen or pledge as is saved or protected, as against
the assignee, by the provisions of the fourteenth
Or tne twentieth or any other section of the act The
Mr.. A. R. Dyett for the creditors. Benedict and
BOardman for the bankrupt.
Motions Before the Court.
I'm no f0ffo .ofn n1.ic ~
against HIS COpdrtrseT, Benjamin f. Leacts.-Ths
been served and an adjournment was ordered to the
30th instant for proof Of service to be produced.
Edactn W. Wetch ana others cS Marshal L. Dun
ham ana Joseph Orr-PrOof Of service filed. Re-
6p0ndents deny having committed acts Of bank
rnptcy, and demand trial by jury to determine the
question. Trial ordered accordingly for June 2.
Grant and Join H. Hays.-Proof 81 service YER fled.
Denial Of bankruptcy by respondents, who demand
trial by the court The court directed that refer
ence be had TO ascertain the facts.
Samuel b. Potter ana others US. Stephen Gran
losa-Proof or service filed. Case adjourned to
May 30
Application to Refer Back to the Begister for
Explanation.
In the Matter OF Wi,liGnl f. KnOepfeL-In this case
the application by the bankrupt for his order of dis
charge was called on. long list or objections had
been filed by the opposing creditors; among others,
that the bankrupt had, since the passage of the act
burned papers, books and documents, with intent to
defraud his creditors and conceal the state of his
AFFAIRS
bankrupt applied to the court TO refer back the
matter to the Register in order to give the bankrupt
opportunity to explain this matter and 10 adduce
testimony on his behalf.
Mr. Seixas, on behalf Of the creditors, opposed the
application. The court decided to have the bank
rupt examined in court upon all matters he desired
TO explain; but the case was afterwards by arrange
ment referred to the Register 10 take testimony and
She further hearing adjourned to next Saturday.