The age-herald., 1898-11-15
CLASH OF POWER
 MAY BE INVOLVED Interesting Question of Law in United States Court. MARCUS DRY GOODS co. Problem Was Raised in a Motion to Dismiss the Petition to Adjudi-
 cate That Concern
 Bankrupt.
MARCUS DRY GOODS co.

An interesting question of law was raised in the United States court yesterday after noon, which, if decided adversely, may precipitate clash of authority between the United States and state courts. The question was raised in a motion to dismiss the petition to adjudicate the Mar GUS Dry Goods company, bankrupt under the involuntary clause of the bankruptcy act. The motion to dismiss was made by Attorney E. H. Cabaniss, representing Ike Adler and Attorney Morris Loveman, rep resenting H. B. -Claf1n 6 Co.,, and other creditors. The assets of the Marcus Dry Goods company are already in the hands of receiver appointed by the chancery court of Jefferson county, and 1t is held by the counsel for Adler and others that the bankruptcy court would have no jurisdic- tion in the matter, and that the granting of the petition would precipitate a clash of au- thority between the United States and state courts.
 It is perhaps the first time that United States court has been called upon to decide
 
 ruptcy act, the involuntary feature of which went into effect on November 1 last. The facts of the case as presented by the counsel are substantially as follows: On October 22 last the stockholders of the Marcus Dry Goods company petitioned the chancery court for the dissolution of the corporation and nominated J. Pollack, of Mobile, for receiver, which was granted, MT. Pollack, being named as receiver by Chancellor Carmichael.
 Receiver Pollack disposed of the stock of dry goods at 1913 Second avenue to one Rosenau, of Tuscaloosa, for s3,500, which sale was approved by the court.
 A petition for the removal of MT. Pollack was filed in the same court few days after by the creditors, in which it was charged that the dissolution of the corporation was scheme to hinder, delay and defraud the creditors, and that the stockholders, Pol lack and Rosenau, were in collision to per- petrate the alleged fraud.
 On November MT. Pollack resigned as receiver, it being agreed that all charges of fraud be withdrawn against him. The sale to Rosenau was also set aside and invaii- dated by agreement. On November 10 the court appointed Otto Marx as receiver, hea having been suggested by some. of the creditors. MT. Marx at once qualified by giving bond in the sum of $8000, and took possession of the assets He was directed by the chancellor to make an inventory of the stock of dry goods and to sell same at public outcry after having advertised same for five days.
 In the meantime an answer to the bill of Adler & Claflin was filed by the stockhold- CTS. alleging that there was no ah ention of fraud upon the part of the stockholders, and denying the allegations of collision upon the part of Pollack and Rosenau with 1.-the stockholders to defraud the creditors. In the answer it was further alleged that a few days prior the filing of the peti- ton for dissolution the Marcus Dry Goods company transferred and sold to Ike Adler $500 in settlement of a claim against the corporation, which in his bill he alleged was still due and unpaid
 It was also alleged by s. Marcus, Jr., president of the corporation, that the dis solution was made at the instance of Adler, who threatened attachment unless the cor poration was dissolved and himself nomi- mated as receiver. Marcus further alleged that ne led Adler ldlSe nope, III OfueF 10 protect the interests of the other creditors. He also charged that Adler had collected in- terest on 5000 from the corporation for a period of six months at the rate of 21A per cent. per month, and set up the plea of usury.
 On Friday last Langfield Bros & Co., and other creditors filed petition in the United States court to have the Marcus Dry Goods company adjudicated bankrupt and that trustee be appointed to take charge of the assets and dispose of same for the benefit of all creditors.
 Arguments were made yesterday on the motion to dismiss, in which numerous au- thorities under the bankruptcy act of 1884, which was afterward appealed, were quot ed. At the conclusion of the arguments Judge Toulmin took the matter under con- sideration and will probably render his de- cision this morning.
 Special Report