The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1873-03-12
IMPORTANT IN BANKRUPTCY.

a Complicated but Interesting Suit
Loans OF Gold and Transfers Of Bonds
and Observation-Disclosures by Judge
Blntchford.
Judge Blatchford has rendered his decision in
che case Of George c. Collins and Harvey Earring
Jon, assignees In bankruptcy Of John Murdoch
Mackay and John Nelson, vs.. John Murdoch
Mackay, John Nelson, Richard Bell and Frederick
Gundy. His Honor states that the substance OF
the bill Is that prior to December I, 1868, J. M.
Mackay 4 Co. had in their possession four prsmis-
sorry notes, made by Olyphant Co., Of China,
amounting IN the aggregate 10 $l6177 40; that
prior to December Z, 1868, John Nelson
owned certain real estate in Jersey city; that on
December Z, 1865, and Tor some time before ]. M.
Mackay Co. were insolvent; that In November
and December, 1868, they were owing the defend
and were indebted TO other creditors in more than
$3000OO; that In December, 1865, John Maxwell
Mackay, whe was the partner OF John Murdoch
Mackay and who managed the property OF John M.
Mackay Co., induced Nelson and his wife to exc
cute to him, without consideration, a mortgage
upon the said real estate for 900 OO0 dated Decen
Der s, 1858, and payable five years from date: that
this mortgage was duly recorded December H.
1885, the elder Mackay acting Tor the firm,
and with its consent and knowing or having reason.
able cause to believe that 1t was insovent,
assigned the mortgage, the bond accompanying
IL and the notes OF ELEPHANT Co. TO Bell Gundy,
the mortgage being assigned by an instrument ex-
ecutea by the elder Maekay, dated December 8,
1865, and recorded December III, 1865; that at the
tine of the transfer or the bond the mortgage and
the notes. Bell Gundy parted with no new con-
slderation therefor, and the transfer was not In
the usual OF business OF J. NJ. Mackay Co.,
but the securities were transferred as security In
part OF the said Indebtedness to Bell Gundy; and
that at the time OF such transfer J. M. Mackay
90. were insolvent and the transfer was made
with view to give preference to Bell a Gundy
over the other creditors Of J. M. Mackay Co.
Inc petition OF prayer OF the bill Is that the
mortgage and its assignment may be declared null
anu VOID as against the plaintins; that the real
estate referred to In the mortgage may be decreed
10 nave vested In the plaintiffs free OF the lien OF
the mortgage, and that Bell Gundy may be de-
creeu 10 satisfy and cancel the mortgage or record
or assign II TO the plaintiffs, and pay over to them
the proceeds realized by them from the sale Of the
notes OF Oyphant Co.
the answer 10 the bill is to the effect that on De-
cemoer 2, 1858, J. M. Mackay Co. were, ap-
parehtiy, ana, In TACT, so far Bell Gundy then
knew, solvent; that said firm was then carving
on It's business In the usual manner and Continued
10 do so Tor some days thereafter: that
Tor several years previous to December 1865,
Bell Gundy had many and large bushes IS trans.
actions with j. NJ MacKay 4 Co., In most OF which
the elder Mackay had acted for the firm: that He'll
q Gundy believed that he was partner therein
ana the principal member thereof, and that the
other partner ana the only one was the Younger
MacKay, they having no knowledge or suspicion
that Nelson was partner, never having heard SO
until the Hing or the petition In bankruptcy; tnat
the mortgage from Nelson and his wife to the
cider Mackay and the bond accompanying 1t were
executed with the view that the elder Mackay
should dispose OF them for the benefit OF the firm
u Its business; that the bond the mortgage and