The New York herald., 1873-10-12
The Alleged Bankruptcy Of George
B. Grinnell & Co.
Important Proceedings in the United
States District Court.
The Petition Against the Firm Alleged to
Have Been Procured by Collu-
sion and Fraud-Afida-
Wits and Arguments.

nrm OF George Is. Grlnnell, calling upon ,nem 10
snow cause why they should not be adjudicated
bankrupts. On these petitions the usual orders to
show cause were granted BY Judge Blarchlord and
they were made returnable yesterday, at eleven
O'Clock, in the United states District Court At
that hour the court crowded, and there
we're present and engaged in the case several
distinguished members OF tine bar.
Wien the matter was called up
Mr.. Da Costa, of counsel for the petitioning
CREDITOR offered proof that service OF the orders
had been made. directing that the firm OF George
Bird Grnnell and the firm Of George B. Grlnnel
show cause why they should not be adjudicated
bankrupts.
Judge Blatchford-Have answers been put in
Mr.. Augustus f. smith, of the firm OF Martin
Smith, counsel for both firms, said answers had not
been fled, and that none would be filed. There
was no objection to the present proceeding, so far
as his clients were concerned.
Mr.. Da Costa observed that nothing was now left
for him to DO but TO ask that the general partner
snip Of George b. Grinnel & Co. and the special
partnership of George Bird GrInnell & Co. be adju
dicated bankrupts.
MIR. William M Evarts, with Mr.. Joseph H.
Choate who appeared on behalf OF Lake Brothers
& Co., upon whom an injunction had been served
enjonng them from selling or disposing OF certain
stocks now IN their hands, said that the injunction
had been obtained by the petitioning creditor.
The party enjOined appeared now ann on behalf of
the firm he represented, he moved on papers,
copies OF which had been served against having
the adjudication made, on the ground that the pro-
ceeding was colusive and founded In fraud.
Mr.. Da Costa-No such papers have been served
upon us; only notice of motion for the dissolution
Of the Injunction.
Mr. Evarts-I want the injunction dissolved, be-
cause it Is not based an honest, substantial pro-
ceeding. We submit to whatever process appears
to be honest, but we do not submit to any process
that is obtained from the Court by fictitious ntga.
tion.
Judge Blatchford-That might be a ground for
the dissolution of the injunction.
Mr.. Evarts-The difficulty is this, an honest ad-
judicaion of bankruptcy exposes all who have had
relations to the bankrupts to serious conse-
quences.
Judge Blatchford-If you present to the Court
petition showing sufficient grounds to believe that
the proceeding is not legitimate proceeding of
course that is different thing.
Mr.. Evarts-That is proposition.
Mr. Da Costa said he did not understand that
any such paper had been filed. Counsel then read
paper to the eject that notice mad been given
that motion would be made 10 the Court tnat
the injunction issued in this matter be modified
to allow the sale Of certain collateral securities
which had been placed in the hands OF Lake
between them and Grlnnell Co.
MIR. Evarts observed that they came in for such
an order IN respect to the Injunction the Court
should direct, and II the order extended to the alb.
soute dissolution OF the Injunction on the ground
that the proceeding was c0lluslve, that quite
Within the scope and embrace OF their pape s and
LIE alleged that this proceeding was colusive one
between Myers and G. b. Grinneil d Co., and he
desired to have this mot1oa so lar as he was
cerned, disposed OF on the ground, among others,
OF collusiveness.
Judge Batchford informed Mr. Evarts that he
had hardly got the matter in proper shape So
far as the motion to dissolve the injunction was
concerned, the proceedings were entirely sum-
cient; but If the creditor desired to intervene,
and asked the Court TO try an issue, that Issue
must be raised by an affirmative petition SO that
the petitioning creditor and thea debtor might
know what they had to meet-what was the prayer
of the petition. Where the parties were acting IN
the thing into good shape
Mr.. Evarts made some further remarks, and said,
presently such petition would be fled
Judge Blatchford-That is what suggest There
is only one petition on file as yet for a dissolution
OF the Injunction and that is the petition OF Boyd,
Among the other creditors who petitoned for
the dissolution OF the injunction We're Francis I.
Walker h Co.. Lawrence Brothers CO., j. NJ.
Hartshorn Brother, the Broadway National
Bank, Colgate 4 CO, l.. 7; Hoyt, scott, strong 4
Loeb Co.. the Merchants 'Dsae NSaons Bal Bsns and
Edward Wesley. These creditors were repre-.
sentsd % By M dudley Field, Mr. William Fullerton
and several others.
u
Co., Mr. Parsons, their counsel, said he intended
to move for dissolution OF the Injunction on the
papers on which the injunction was granted He
would not move an afdavit.
Mr.. DE Forest Lord said he appeared for Bell and
Smithers.
Alter much discussion it was agreed to allow the
case OF the special firm Of George b. Grinnell stand
over I'LL next saturday, all papers in connection
Herewith TO be served on counsel Tor the pet-
toner and Tor the debtors on or before Wednesday
next. The motion OF Mr.. Parsons went over till
Saturday, the other creditors consenting to an
adjournment till that time.
The Court then proceeded to deal with the case
OF the general firm of George Bird, Grlnnell d Co.
Acots. OF the firm Of Lake Brothers Co., in which
1t was averred that these proceedings in bank.
and horse dealer in Dutchess county, and that his
relations with the alleged bankrupts not OF
such character as to make him acquainted with
their business. The deposition went on to show
the nature OF the stock transactions between Grin
nel Co. and Lake Brothers 4 Co., and to declare
that at the time OF these loans and negotiations
Lake Brothers Co. supposed Grinnell 60.
were solvent, and entirely free from en-
preven ed a realization upon the stocks by Lake |
Brothers 4 Co., and the latter claimed that unless
the Injunction was removed and they were per-
mltteu 10 realize on the colaterals which they
hold they would be subjected TO great damage and
inconvenience. The amount OF the claim OF Myers
IS So 3o2 ~ Counsel Also read the petition OF Lake
Brothers GO. praying that the proceeding be dis
mis- missed Las as coilusve between Myers and @. B. Grin
Mr. Da Costa, Of counsel for the petitioner read
the afdavt OF the latter TO the effect that the al
legged bankrupts had purchased for him at various
times stocks to the amount Of s1,1O0000; that |
the ALLEGATION that the proceeding was COL |
iusive ll was untrue; that he had taken
TINS step Tor his own protection and
for the protection OF other unsecured creditors and
that he had not in any way been asked by Grlnnell
CO. TO institute these proceedings Counsel also
read the affdavit OF the alleged bankrupts, giving
history or their negotiations and transactions
with Myers They referred to the panic in Wall
street and to the closing of the Stock Exchange
until the 30th OF September as causing them great
em6,a,lrrassment, , and they state that they were
finally advised by counsel, under all the clrcum-
stances of their difficulty, to have their property
administered under the Bankruptcy act
either by voluntary or involuntary proceed
ing, giving all the information they possessed to
Mr. Myers, they would to any other creditor.
The same Information, they state was given TO Mr.
Chauncey M. Depew representing the interest.
OF MI Horace +. Clark. Counsel next read the
afildavit oI Joseph c. Williams, member OF the
firm OF Grinnel A Co., which stated that the in
formation given to Myers was not given to him
for collusion, but from q sense OF duty the firm