Weekly Arizona journal-miner., 1905-12-27
BANKRUPTCY DECREE ADJUDG-
 ED VALID.
(From Thursdays Daily.)

litigation involving the American Copper company, when Judge Sloan yesterday morning filed his written opinion denying the application of Ben Blanchard and the Howell Mining company for an order vacating and setting aside the default and judg- ment by which said company was de- creed bankrupt.
 The case has attracted universal at- tention not only because of the bitter and protracted legal fight that has been made, one feature of which was the sale of the property at trustee s sale recently, but because of the large amount of money involved in the pro- perty, in which there are 700 stock holders.
 For these reasons it the most i'm. portant decision that has been handed down by Judge Sloan for many months, and the Journal-Miner herewith pre- sents it exclusively in full to its read CTS. The Court says:
 On the 25th day of January, 1905, a petition signed by certain creditors of the American Copper company, a cor poration, was filed in this court, pray ing that said corporation be declared bankrupt, upon the ground that it had, within the four months prior thereto, made general assignment of all its property for the benefit of its credit ors.
 On the 7th day of February, 1905, a judgment by default was entered ad- judging said American Copper com pany a bankrupt, whereupon the case ther proceedings.
 On the 25th day of March, 1905, judgment by default was entered ad- judging said American Copper com pany a bankrupt, whereupon the case was referred to the referee for fur ther proceedings.
 On the 25th day of March, 1905, Ben jamin Blanchard and the Howell Min ing company, corporation, petitioned the court for an order vacating and setting aside the default and judgment heretofore entered in the cause and all subsequent orders and proceedings had under said judgment. The grounds assigned in the petition for the relief prayer for were that at the time of l the filing of the petition in bankruptcy the American Copper company was and ever since has been solvent; that the petition praying for the adjudica- tion of bankruptcy failed to allege the commission of any act of bankruptcy on the part of the corporation; that the conveyance charged in said peti- tion to have been an act of bankruptcy was not a general assignment for the benefit of creditors, and further, that no other act of bankruptcy was or had been committed by the corporation. The petition further alleged that the application for the adjudication of bankruptcy against the corporation was the result of fraudulent conspir- acy on the part of the officers of the corporation.
 With the petition was filed the aff- davit of Benjamin Blanchard in sup port of the allegations thereof. There was also attached to and made a part of the petition the conveyance referred to in the creditors petition. This con- veyance is in form a deed of trust, and was made and entered into on the 4th day of November, 1904, by and be- tween the American Copper company and Rollins M. Hockaday, trustee, and conveyed all the property of the grantor to said Hockaday to secure the payment of a number or promis- sorry notes aggregating the sum of S121, 10000; many of these notes were dated prior to the execution of the trust deed, and others bear even date herewith.
 The proceedings in the case and the record before the Court show that the American Copper company was, at the time of the institution of these pro ceedings, insolvent. The only question for determination is whether or not | the record shows that an act of bank | ruptcy had been committed within four | months prior to the filing of the credit or's petition.
 The conveyance made by the Ameri- can Copper company to Hockaday as | trustee is before the Court in this ap- plication. A cursory examination makes it evident that it was not in effect | or even in terms a general assign ment for the benefit of the creditors; it was, however, a conveyance of the of the corporation in trust for the purpose of securing certain pre-ex- isting creditors of the corporation. It was, in effect, mortgage of all the of the corporation to secure, among others, holders of the notes of the corporation executed prior to this 
 It has been held that a corporation which. is at the time insolvent, and which mortgages its property to secure a pre-existing indebtedness, commits an act of bankruptcy by preferring the creditors so secured over other credit DTS.
 In re Wright Lumber company, 114 Fed. Rep. 101I.
 While, therefore, the specific act of complained of by the peti- tioning creditors is not shown to have been committed, it does appear that an