New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1870-06-10
PREFERENCE or CREDITORS.
IMPORTANT BANKRUPTCY DECISION.


In the case of Robert j. Hubbard and Andrew
J. Hennion ms Assgnees in Bankruptcy OF the NewYOrk
Mail Steamship Company agt. the Allare Works recently
tried in the United States Circuit Court. Southern Dis
tct Judge Batchfor has delivered an opinion Of which
the following ia abstract:
This is bill in equity praying that Judgment rem
dercd i'm favor defendants against the bankrupts
and all proceedings hereunder, including an execution
issued thereon and sale OF PropTy Of te ann ynd
and that the defendants may be required 10 ACCOUNT lor
have received by virtue Of the Judgment and the pro
ccedngs hereunder The defendants had claim against
the bankrupts amounting to A. 654 a. with interest from
October 49, 1861 on the 2Sth Of October 1867 the de-
PENDANTS commenced an action against the bankrupIs III
the Superior Court Of the City of Newfork to recover
said claim. The bankrupts In pursuance OF an agreement
that effect made by them with the defendants appeared
Of the 20 days delay allowed by law, consented In writ
ing to the entry OF Judgment in The suit IN favor OF the
october 1867 offer In writing to allow Judgment mt to be
offer was accepted by the defendants. and the I'd of
November, 1851 Judgment was entered and docketed III
said Court In favor Of the defendants against the bank
rupts Of $50 co. being the amount Of said claim and in
tcrest costs Of suit on the same day an execution
was issued the judgment to the Sheriff Of the City and
County Of New York. Under that execution and other
executions the Sheriff seized certain personal properly
of the bankrupts of March, 1868, sold IT,
and realized Tor Il sum, Of which the amount of the
judgment with in ere S% N%s ISL Claim nancy one Which
the Judgment recovered was one which existed on
the 18th Of October 1871 on the 2Ith OF March are
in the District Court OF the United states for this
district, the bankrupt5. TN the l1tn OF APRIL
1868 they were adjudged bankrups, and the plaintiffs
were aferward duly chosen to he their assgnees The
before the Court on plea put III by the
defendants TO the bill The question involved Is, whether
the plaintiffs in view N the TACT tnat tne
property in question not seized on execution within
four months before the filing OF the petition in bank
ruptcy against the banruptS although was 80 seized
within six months before such filing. have always re
garded Il as clear that sections IS and SO OF the Bank
ruptCy ~ construed together and made To mar
them Under the thiry fifth section some effect must he
given TO the four months limitation therein prescribed
The second branch OF that section which concerns the
six months Imitation does, in terms include the trans
action in question in this and, II there were no
such provision the statute that found in the first
branch OF the thirty fifth section, the plaintiffs right to
Judgment ON the plea would De clear But the two
branches OF the thirty fifth section must be con
strucd together, and scope of operations given
to each of Them IL possible. II the second branch
with its six months limitation, is TO be held to
cover every case well that OF preference to a
creditor all other cases. the first branch Is useless and
might as well have been omitted. Bn the first branch
which is the partial clause precedes the second branch
the OF action done with view 10 give
preference to a creditor person having claim against
a debtor who is under any liability for him. In such
ceSe II the transaction takes place within four months
other circumstances specified exist, the transaction IA
made void. The second branch must be held TO be In
tended 81 provide for any disposition OF property that
not provided for by the first branch that Is for any DIS
position that does not such preference as tbe rst
branch provides for. But wherever case falls within
the first branch must although II may also DE III terms
within the second branch be tested as To It's validity ana
as to the limitation Of time prescribed exclusively by the
provisions the first branch. IL results from these
views that the plea must be allowed and the bill dis
missed with costs. .m
James Eurott and John Mcdonald for the plaintiffs;
Charles A. Rapallo for the defendants.