New-York tribune., 1873-03-12
THE COURTS.
A COMPLICATED BANKRUPTCY CASE.
ASSIGNMENT OF A MORTGAGE AND NOTES TIC
pRFPPRRED CREDITORS.


PREFERRED CREDITORS.
In the case of Geo. G.. Collins and Harvey
Harrington, assignees in bankruptcy OF John murdocK
Mackay, and John Nelson agt. John Murd0ck MacKly
John Nelson Richard Bell, and Frederick Grundy, the
substance of the bill s that prior to Dec T. lS0O D. d.
Mackay Co. had in their possession four promissory
notes made by Olypnant Go. OF China, amounting III
the aggregate s6l7T 4o that prior to Dec 1900
John Nelson owned certain real estate In Jersey CITY
that on Dec 7, ls6O and for some time before M.
Mackay & Co. were insolyent; that in November anu
December 1863 they were owing the defendants, Ben
and Gundy $4,000 for gold borrowed, ana "ero
indebted 70 other creditors for more than s5Oo'OV'
that on Dec. 8, 1868, John Maxwell machhy' "Ho
was the partner OF John Murdock Mackay ana VINO man
aged the property OF John NJ Mackay Co., lnduceu
Nelson and his wife execute TO him, without consider
ito, a ,nortga0e on the real estate for $4,000 dated
Dec g. 1853 and payable five years from date tnat the
mortgage was duly recorded Dec IL, ls6s the eder
Mackay acting for the firm, and WIN ts consent hno"
ing or having reasonable cause to believe tnat ~ wa"
insolyent assigned tho mortgage, the bona accompany
ing IT, and the notes OF Olyphant d Co. 10 pen anu
Gundy the mortgage being assigned by an instrumeh'
executed by the elder Mackay dated Dec 1865 ana re-
corded Dec H. 1863 that at the time OF the transfer OF inc
bond themorgagc. aud the notes. Bell and Gundy parteu
with no new consideration therefor and the transfer was
not I'm the usual course OF business OF j. NJ MacKay
Co.. but the securities transferred az security III
part OF the said indebtedness to Bell q Gdhdy apu
that M the time OF such transfer j. NJ. Mackay Co.
we're insolyent and the transfer was maze Wlth VIC"
IN give preference TO Bell & Gundy over the other
creditors Of j. NJ Mackay Co. The prayer OF the Dni
is that the mortgage and IT'S assignment may be decreed
10 be null and void as against the planhs; that tue
real estate described the mortgage may be decreed 10
have vested In the plaintiffs free OF the eh OF 'he o
gase and that Boil Gundy may be decreed 70 satsly
and cancel the mortgage Of record assign 1t to the
PLAINTIFF and pay over them the proceeds realized
from the sale of the notes OF Olyphant & Co.
The answer forth that on Dec 1863 j. NJ hackay
& Co. were apparently and, in fact. so far as Bell &
Gundy then knew solvent; that the firm was then
carrying on It's business IN the usual manner, and con-
timed TO do 40 for some days thereafter that during
several years prior to December 1853, Bell Gundy had
large and frequent business transactions WIN D. M
Mackay x Co.. in most OF which the elder Mackay had
acted for the firm that Bell Gundy believed that ne
was partner therein, and the principal member thereof
and that the other partner and the only was the
younger Mackay, they having no knowledge or
that Nelson partner, never having heard so untl
the filing OF petition in bankruptcy that the mort
gage from Nelson aud his wife to the elder Mackay ana
the bond accompanying IT, were executed VITA tho view
that the elder Mackay should dispose OF them for the
benefit OF the firm In its business that the bond the
mortgage and the n0teswere transferred To Bel Guhdy
fOr a valuable consideration gYeu by them at the time
OF the transfer and IN the usual course OF business
Bell & Gundy and of j. NJ. Mackay Co that Be &
Gundy had for long time prior 10 Dec 1853 naoe 10
j. NJ. Mackay & Co. many loans OF gold coin TO large
amounts for short periods and on coateras OF various
descriptions furnished for each loan that for some or
such loans, j. NJ Maekay & Co. gave to Bell & Gundy
their check on the bank IN which their account Was
kept for sufficient amount in currency 70 secure the re-
turn of such gold its market rates, aud the checks
were deposited by Bell IL Gundy with their BANK ana
collected and the amount received therefor IN currency
retained by Bell Gundy until the gold coin had been
repaid that Dec. 7. 1863 the elder Mackay, acting
for j. NJ Maekay, asked Bell IL Gundy 10 loan To j. NJ
Mackay Co. $4,000 in gold the security OF cur
rent funds that Bell & Gundy, having no reason
TO believe that j. NJ. Mackay & Co. were lnsOly-
ent or pecuniary trouble loaned to them s2oOO III gOld
coin and received security therefor check, dated
and payable that day. the Second National BANK
OF Jersey City for s52O currency; that about an hour
afterward j. NJ Mackay Co. sent, through the elder
Mackay tO Bell Gundy, tho said bond. m0rtgage ana
notes and stated that they were little ShOrt OF money
that day and wished Bell & Gundy 70 substitute the
bond mortgage. and notes security for the loan IN
place OF funds and represented the 00nd ana
mortgage be good security for the amount thereof
accepted them with the assignment thereon from the
elder Mackay, and tho OF OIyphanL 81 Co., ana
withdrew. Cancelled, and delivered up 10 j. NJ
Mackay x Co. their check for the loan, which
mad not been presented at the Dank on Whleh
t was drawn; that j. NJ Mackay Co. had then in their
hands current funds, proceeds OF the god that day
loaned 90 them by Bell &c Gundy. tO "a much greater
amount than necessary To make their bank account
good payment OF the check ana would nave done
so IL Bell Gundy mad declined 70 MAKE SUCH exchange
of securities that during the afternoon OF that day aud
some time after exchange ot securities had Deon
made, some checks OF j. NJ. Mackay Co, which had
been gwen by them two days before to Bell Hundy,
drawn on the SAID bank IN Jersey City, aud which on
the day OF this receipt, Bell Gundy mad deposited IN
their bank for collection ana which they believed u
have been paid, returned to them unpaid.
la the United States District Court yesterday, judge
BatchfOrd directed the entry OF decree for the plain
tIhs with COSTS.