The New York herald., 1876-02-27
The Petition to Dissolve the Order Of
Involuntary Bankruptcy Denied.
Grounds and Specifications Why the
Motion Is Not Granted.
Verdict Against the City for Damages
for Injuries

As OF interest," because OF It's lmpOrtanc
as precedent and for its influence in the future in
such cases.
In this case, on the 18th Of December 1875. petL
ton In involuntary bankruptcy, presented to and
hed IN this Court, praying that William Butler Dun
can, VILLAIN Watts sherman and Francis H. Grain
copartners under the firm name OF Duncan Sherms n
Co., be adjudged bankrupts. The petition purported
to be the petition Of 200 creditors 1t set forth the
claims OF those creditors and signed by them Il
was properly verified IL averred that the debtors
sided In the city Of New York and had carried bush
ness In this district for more than six months next
preceding the date Of hing he petiton that the de-
mands OF the petitioners we're provable in
accordance with the provisions Of the Revised
Statutes and the several amendments there
OF; that the petitioners believed that the
debtors, as such copartners, owed debts 10 an
amount exceeding the sum OF $780, that the petition
ers' demands each exceeded the amount Of $3.50 and
that the petitioners constituted one fourth, at least in
number OF all the creditors of the debtors as such CO.
partners whose debts exceeded $3.50, and that the
aggregate Of the petitioners debts provable under said
Revised Statutes and the said several amendments
thereof amounted to at least third Of all the debts
so provable against said debtors such coparneTs
1t averred properly acts OF bankruptcy, and
panied by depostons as to such acts and by deposit
lions 10 the claims OF the FIRST FIVE sgners OF the
petition. II was also accompanied by paper. signed
and acknowledged by the three debtors, which they
stated that upon the fling Of the petition" they
orally appear IN person and admit that the requisite
number and amount OF their creditors have pettioned
for DISQUALIFICATION OF bankruptcy against them herein
and wave service Of copy OF the petition and OF the
order 10 show cause herein and admit that they
mted the acts of bankruptcy alleged in SAID petition
and consent TO the entry order OF adjudicaton
II was further accompanied by an affidavit made by
Walter Carter one OF the attorneys for the petition
Ing creditors setting forth that be has examined the
statements OF debts OF said alleged bankupts and that
the total number OF creditors Of said alleged
not exceed 7S6, and that the aggregate
OF all the debts OF said alleged bankrupts provabe
under the Revised Statutes OF the United States title
81, bankruptcy and the several amendments and sup
pements thereof, does not exceed the amount OF
s. 400 O00 that the number Of creditors whose debts
exceed the amount OF $3.50 uniting in the petition
therein is 200, the aggregate OF whose debts provabe
under said Revised Statutes and said several amend
ments and supplements thereof amounts to
81 26s ID: 10 On the presentation and filing Of these
papers the Court made an order on the 18th OF Decem
ber 1875 In these words Upon reading and ding the
foregoing admission, and also the aidavits Walter
s Carter and the Court being satisfied that saId ad
mission made in good faith, IL is hereby adjudged
that the requisite number and amount OF the creditors
OF the said William Butler Duncan William Watts
Sherman and Francis H Grain. copartners under the
firm name Of Duncan, Sherman Co., have pettoned
for adjudication OF bankruptcy against them in the
above entitled matter and that the proceed with
out further steps on that subject" Thereupon the
same day, on the foregoing appearance in person and
consent OF the debtors. order OF adjudication in
bankruptcy in due form, entered and filed Ger
tain creditors Of the bankrupts six in number had
prior to the filing OF the petition bankruptcy OBJ
tanned judgments against them as copartners, IN a
court of the State and three of these six haa prior to
the filing Of such petition brought what known as
creditors suits in court OF the State founded such
judgments TO reach assets alleged to have been trans
fsrred by the debtors IN fraud OF creditors One other
OF the had, prior 70 the filing Of the petition
bankruptcy, made levy under execution issued
liable 20 such levy Seven other creditors have
recovered judgments against the debtors copartners
Ia court OF the State since the petition IN bankruptcy
was dled on the oath OF December, 1875 this Court
on the petition Of the bankrupts made order stay
Ing the suits brought by the SAID thirteen creditors
until the question OF the discharge OF the debtors
shall have been determined and staying the issuing OF
execution the judgments and further proceedings
on executions issued. The creditors so stayed have
presented petition to the Court praying thar The ad.
judcauon OF bankruptcy and all the proceedings there
under be adJudged void and revoked The ground
urged for setting aside the adjudication is that the pc
ttion Tor adjudication and the paper which accom-
panied do show that the petition the petition
OF creditors one. third OF the amount OF The debts
but shows that II IS not the petition OF creditors 70
one-third OF the amount OF debts Another ground
urged is thati may now be shown by evidence aunde
the papers which were before the Court when Ihe ad
Judcauon was made, that onethird in amount Of the
creditors did no, unite in the petition and that such
fact has been shown The twelfth section Of The act Of
June o. 1874 Us T. S at Large 1907 IA nd .nent
OF the thirty ninth section OF the act OF March 2 1867
O3 To-, 536 provides that any person residing within
the jurisdiction Of the United States, and owing
penabe debts exceeding the amount OF $500, who
shall commit any one OF certain specific acts
Hshall be deemed TO have committed an act
OF bankruptcy and subject to the conditions herein
after prescribed shall be adjudged bankrupt
on the petition OF one or more OF his creditors,
who shall constitute onefourth thereof least
In number and the aggregate OF whose debts provabe
under this act amounts TO at least onethlrd oi the
debts provaoe and that 1.-The Court shall II such
allegation 10 the number or amount OF pettoring
creditors be denied by tie debtor by statement "a
writing 10 thai cect require him TO Gle IN Court forth.
with full list OF his creditors, with their places OF
residence and the sums due them respectively, and
shall ascertain upon reasonable notice to The creditors,
Ghether One-ourih IN number and one third IN amour:
thereof as AFORESAID have peoned that the debtor DC
.adjudged a bankrupt The section then proco eds
"But Il such debtcr shall the fling OF the petition,
admit "a writing that The requisite number and amount
or creditors have petIoned, the Court II satisfied that
the admission made In good iath shall so ad1udse,
which judgment shall be hna and the matter proceed
without further steps that subject and II 1t shall
that such number and amount have not so pet
toned the Court shall grant reasonable time, not
N rac here
aud in cases hereafter commenced ten days, within
which other creditors may JON in such petition And
II at the expiration OF such time so limited The
number and amount shall comply with the require
ments OF this section the matter OF bankruptcy may
proceed out al Tie expiration Of such limited time
such number and amount shall not answer the require
mcnts Of this section the proceedings shall be dis
missed and, IN cases thereafter commenced, with
costs ~
The thirteenth section Of the act OF 1874 In amend
OF the ioreth section OF the act OF 1897, provides
as follows And n The return day OF the order TO
show cause Aforesaid, the Court shall be satisfied
the requirement OF section thirtyn OF said
a. 10 the number and amount Of pctittonpr creditors
has been complied with, Il within the time provided
for In section thirty OF this act creditors sufficient
In number and amount shall sign such peution, as
TO make total OF one fourth number OF the credit
ors and and one-third IN the amoun, OF the provahle
deDts against the bankrupt provided IN said
tion, the Court shall adJudge, which judgment shall
be dnal; Otherwise u shall dismiss the proceedings
and, IN cases hereafter commenced, with costs
careful examination Of these provisions shows that
Congress intended that certain prescribed steps shall
DO taken 70 whether the petition presented
Is the petition Of more creditors who constitute
one fourth least Of the creditors in number, and
whether the aggregate OF the debts OF the pettonng
creditors prOvabe under the act amounts 20 al least
oncthrd Of the debts 50 provable IN the hrs, place,
the petition allege that fact That tact Is alleged
In the petition In this II such allegation is de-
MED by the debtor, either as 70 number or amount IN
writing the Court required 70 ascertain, on notice
70 the creditors whether one-iourtb IN number and
one.thrd 10 amount aforesaid, have peuoned II
they have not ume u to be gwen 10 others TO JOIN.
II the required number join the matter " proceed
not the proceedings are 10 be dismisse II, on inc
return day Of the order 10 show cause te Court Is
satisfied thai the requirements of the act 70 the
number and amount Of petition nc creditors has
been complied with, II, within the time
allowed creditors 10 sufficient number and amount sign
the petition TO such requirements the Court Is
required TO $50 sdludge, and u Is declared that such
Judgment shall be hHaL" The foregoing provisions
cover the wherv the debtor appears ard denies
the allegation IN question. and the where be ap.
pears and makes denial OF it and the cases where
he does appear At all but makes default Bot there
rsmafne another class cases The foregoing three