The morning news. [volume] (Savannah, Ga.) 1887-1900, 1899-01-13
= < DECLARED A BANKRUPT.
CTS HELD TO JUSTIFY THE
u CqrDrTORs' PROCEDURE.

rbot This ConStitHteu a"
-,,tc, Under the New Law.
tearing and Opinion of a
led cause Under the New Act.
.5rsolidated case of Pollock Il
,,.r md e. \. We'll, ct. al, vs.
-ir.er Mercantile Company of
..e I'm the United States District
r.1ee speer yesterday morning de-
and adjudged the company a bank
.,5sr the terms of the new bank
sr, in giving his opinion Judge
ss1 sud.
,..aInt of the wealth of authority
.t INT counsel and the importance of
.,ss,ions involved, / had determined
t. This case under advisement This
,.5 seem appropriate also because the
..,r-.r.or of the new bankrupt act is
-.i,t7rae part to be made by the courts,
.-5rtaI thought it incumbent upon me
., flo an opinion in this case. may do
rs II would not be frank, however,
,trrj not at once announce what is my
...fsi conviction as 10 the matters at
.,.,s The Steinenger Mercantile Com
,.c,. n5sssssed fine character, and was
carving on a business which seemed to
- solvent 10 everybody. They were aware,
however. that they had debts pressing
,bsm which they would not be able to
nav They consulted counsel, and, as
result of the consultation, mortgages were
rrs,7rsd piedging to particular creditors
substantially all of the property of the
,omp3rv which had not heretofore been
conveyed These mortgages, thirty-nine
in number. we're simultaneously distrbut-
Cd among various creditors. 1t was siipu-
lated in the notes which were also pre-
pared, that the persons taking them were
to leave them with the counsel who pre-
rarei the mortgages for the merchant in
difficulties This was to be done for the
DIrnose of collection. The creditors thus
praferred were understood to agree to this
when they accepted the notes and the
MORTGAGES above mentioned given to Sc
cure them. The notes were due one day
after dale, and the mortgages We're of
that character that they could be fore
closed at once, and the property sold by
the sheriff within ten days
"The result was that the creditors be-
came alarmed and mortgages were imme-
datey foreciosed. On account of this
conduct of the Steinenger Mercantile
Company this proceeding is brought TO
have il declared a bankrupt and its prop
ery distributed to creditors under the uni
form system of bankruptcy which has just
been created by act Of Congress. 1t is
pain to me that upon the execution of the
Instruments and evidences of Indebtedness
above described the Steinenger Mercantile
Company went out of business because
they put it in the power of their creditors
TO Instant on the execution of the mort
cages and the maturity of the one day
notes to put them out of business. 1t may
not have been their intention to go out of
business but the action amounted to the
same thing. Certain of the firm and other
Witnesses Of high repute testified that in
their opinion the Steinenger Mercantile
Company was entirely solvent at the time
Oh this transaction. 1t is, however, my
opinion that this was public declaration
0, insolvency which, since it conveyed or
pledged all of the property of the debtor
may not be disputed by evidence. The
bankrupt act declares "a person shall be
deemed lnsolvent within the provisions of
lhs act whenever the aggregate of his
property, exclusive of any property which
he may have conveyed, transferred, con-
'5aed or removed, or permitted to be con-
csaed or removed, with intent TO defraud,
nluotr or delay his creditors, shall not, at
lalr valuation, be sufficient in amount
~ pay ms debts" How can one say that
HN property at a fair valuation is suffi-
ueu' 70 pay all of his debts when he act
uE creditors and retains nothing EXCEPT
J1olnded confidence in their indulgence.
!. !oAo"s' therefore, that as thirty-nine
ueutors were preferred by means of this
pu0hc declaration of insolvency and sim
rr''a'sously with it, it was an act of bank
~ ana Tor the purpose of this hearing
Sp preferences are declared to be void.
NM. mere Is another, and perhaps a
4 'g Inclusive view of these facts. They
/ Scr ,Oee an assignment with trust re-
~ LOT the benefit of the creditors.
y5 EQUATIONS in the several notes pro-
oo ~ mat they should be left with the
Co ansei LOT the Steinenger Mercantile
r ya,p''S' one of these notes with the
f,,sase to secure il represents the sum
81 'oV winch was to be paid that conn
Vt 'hose counsel, in the embarrass-
4 optos 'ne concern which might grow
4 ''e execution of these MORTGAGES. II
\ p'aced IN the power of Bower and
d NO., 70 collect The debts due the firm. II
4 intr, D,'- e oohgatory upon the creditors TO
kctio. bowers and Halves with the col
\ cas- VI me notes, and the law would
8 conrs .loH bower and Halves the duty of
& Com1s5.u5 TO the Steinenger Mercantile
4 eos5 NS any sums which might be col
4 SENT 1'et and above the amounts repre-
cured Wy the notes thus executed and Sc
MED W. 'ne mortgages which accompa
Of Mis- i'oles. 1t is then for the purDose
that tt -''IlHs, IN my opinion very clear
uertnr5 ehufe proceeding is an assign
and H. ,,ger me law of Georgia, and Bower
posa 80 rs We're the trustees for the mr.
the carving out the assignment with
Sterers upon them to reserve To tha
to.vit ~ Mercantile Company a benefit
prorer, "e balance of the proceeds of the
for NH 'Hus conveyed above the debts
Of bis was pledged For the purpose
slgrme,'.. oIihs, 1 hold that a general as
hrkrrr,, u this character is an act of
Which S.'-e reasons and for other reasons
not pe-. "''sht enumerate, but which are
e1ee- diF' 1 must declare the stein
may be- ,'iuie Company a bankrupt. II
sGte ~ ''sloie IN view of the present
not cor,, ie pleadings the defendants are
llty oC 9-el 10y this ruling as to tbe Va
They rer,.' zen Of the mortgages which
heref,ap-. h- 1t may be that thew viii
They are ,r the right to insist that