The morning news. [volume] (Savannah, Ga.) 1887-1900, 1899-04-15
THREW UP THE SPONGE.
ADAMS DRUG. FAINT AND OIL CO.
CONSENTS TO BE BANKRUPT.

Confession Was Made by the COM
Dany's Attorney AT the Hearing
BEFORE the Referec-Mr. GiEnilliat
said the Company Was bankrupt
and Was Willing to Have Its BuSi-
moss Administered in bankruptcy.
Recent Examination of the Books
Hind Led Him and Its Officers TO
This ConcIusiOn-JudGe speer VIII
Pass an Order Declaring the Com
many uankrupt-PrObabIe Eject Of
the Admission.
The hearing in the case Of the Adams
Drug, Paint and Oil Company before He1-
cree in Bankruptcy MacDonell yesterday
morning. developed a surprise before
was fairly under way. The company 'hat
hitherto had fought so stoutiy the efforts
of its creditors to have il declared bank
rupt threw up the sponge. and through IT'S
attorney consented TO be adjudged a bank
rupt and 10 have its affairs administered
in bankruptcy court.
When the case was called the attorneys
for the creditors were present and ready
10 proceed. So apparently was the COM
pany and its counsel, Mr.. w. L. Gisnl-
Hat of Gignilliat & Stubs. At this june
ture MIR. Gignilliat arose and stated that
In making out certain statements OF the
company's assets and liabilities, that had
been demanded by the creditors in the
course of the hearing, it had become clear
TO his mind and to his clients, after going
thoroughly into the matter, that although
they did not believe they had committed
any act of bankruptcy in making the ar
rangements they did, at the time the bonds
of the company and the deed Of trust Sc
curing them were issued, yet in view OF
the present proceeding and circumstances
that have arisen since, the condition Of
the company is such that 1t would be well
for it to admit bankruptcy and it's will
ingness to be adjudicated a bankrupt
This admission" said Mr.. Gignilliat, Il
now make for the company in judicio."
At the conclusion of Mr. Gignilllats
statement, MIR. Hartridge of counsel Tor
the creditors said that In view of the ad-
missions that had just been made, prompt
action on the part of the creditors was
necessary. He stated that he would 80
up 10 Macon last night and ask of Judge
Speer an order declaring the company
bankrupt and appointing receiver to take
charge of and manage the business ard
assets of the bankrupt until such time IS
trustee could be elected by the creditors.
This can only be done after due adver-
tisement of the election and requires about
zen days time.
The confession of the company virtual
ly knocks the props from under the pay
ments made to the preferred creditors, who
were paid about $500 OF the fund real
lied from the sale of the bonds. The
preferred creditors are the Savannah
Bank and Trust Company, which was
paid something over $500, and Miss Bea-
man of Sparta, who was paid something
over 81 500. The probable effect will be
that these payments viii have to be re-
paid into the court, 10 be thence distrib.
uted upon an equal basis 10 all the credit
ors. The point in the case was whether
or not the issue of the bonds and the
payment of the proceeds 90 certain OF the
companys creditors. at a time when the
company was insolvent, did or did not
constitute an act OF bankruptcy. III.
point to be decided by the referee seems
TO be absolutely disposed of by this ac-
acknowledgement that the company was in
solvent and that the payments to the bank
and to Miss Beaman were preferences.
The confession came as a Erprise to the
attorneys, who have been engaged for
case and searching examination of the
witnesses. The case has been hard fought
from the beginning, and it is not at all
likely that the creditors who have receiv-
cd payments win surrender them into the
registry OF the court without Just as strong
fight for their retention. 1t will be some
time before the case is finally settled, as
another examination befdre the referee
viii. follow the courts adjudication that
the company Is bankrupt After the ref
cree has examined witnesses and made his
report TO the court 1t is almost certain
that It's confirmation will be contested
MI. Hartridge left last night for Macor
TO take the first step in vhe winding up OF
the company's affairs, Judge Speer's adju.
dication that il is bankrupt and the an.
pointment of receiver TO conduct its bus
mess. The case will then be referred 70 tn,
referee and thereafter viii follow the reg
ular course of bankruptcy procedure TIL,
case is an interesting one, both on &C
count of its Importance and from the fac
that new and unsettled principles of Law
viii have to be decided, before it Is iinall,
determined
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