Knoxville weekly chronicle. [volume] (Knoxville, Tenn.) 1870-1875, 1871-07-26
AN IMPORTANT BANKRUPT DECISION.

/
. Hon. Bland Ballard, Judge of the Dis
trict Court of the United States for the
State Of Kentucky, fss recently made an
important bankrupt desision, which may
prove Of considerable interest to the mer-
camille classes.
An assignee, by virtue Of the power
vested by the thirty-fifth section of the
bankrupt act, sued the defendants to re-
cover back certain funds belonging to es-
tate of his bankrupts which he alleged
were paid by them while they were insot-
rent and in contemplation of bankruptcy,
and within four months next preceding
the adjudication of bankruptcy. The
facts, as shown by the evidence were about
these:
Some time prior TO the filing of the petition
in bankruptcy against Schickedantz & Sewell
but while those gentlemen were in n failing con-
dition--insolvent-a Mr.. r. j. White, of Mad
ison county, kentucky, put into the hands Of
the bankrupts, (who were then commission
m,erchants) for sale about $1,000 worth Of whis.
KY A short time previous to the failure of
the bankrupts, they sold Whites whisky to-
Boes d LuckinG took their bills for the same.
and discounted them, lthis, we understand, was
IN violation of the orders of White,) and paid
the proceeds thus realized back to Boes &
Lucking to indemnify them on account of GER
tain accommodation paper which they had in
dorsed for the bankrupts, and that the effect of
this payment of said bankrupts was to prefer
Boes ~ Lucking over the other creditors of the
bankrupts The cause being heard the court
held that the whole transaction between the
bankrupts and Boes & Lucking was on their
own showing, pafPable fraud, and that the
payment was a fraudulent preference. made
while the bankrupts were insolvent and in con-
temptation of bankruptcy. judgment was rem
dered against the defendants, by which they
we're ordered to ply the plaintiff, as assignee,
SO, 339. 70, the whole amount of the sum paid by
Sshickedantz & Sewell to them"
This decision is but carrying out the gem
eral spirit of the bankrupt act, which is,
that the assets of insolvent debtors must
be equally divided amongst creditors The
object of the law is to place foreign or nom
resident creditors exactly upon the same
terms as resident creditors, who under
former laws and by reason of being able to
watch closely the debtors business, &C., or
through local influence were able to Sc
cure for themselves, preferences or impor-
tant legal advantages.
The bankruptlaw says in effect, that nom
resident creditors, who must rely more
upon the honor and fair dealing of the
debtor, than close personal observation of
his business, shall not suffer thereby,
but that in all cases the debtor must
bona tide, treat all Res creditors alike. To
this end the law provides that all assign
ments, and preferences of any kind, made
while the debtor is in fact insolvent or con-
templates insolvency or bankruptcy, with
in four months next preceding an act of
bankruptcy, are void and the assets so as
signed or disposed of, may be recovered
back by the assignee. The law is compre-
hensive and vigorous, designed to promote
commercial honor, by defeating frauds and
collisions between creditors and debtors,
and ought to be better understood and
| more generally enforced.