The semi-weekly messenger. [volume] (Wilmington, N.C.) 1897-1908, 1905-04-25

New York. April 20-McGrane
Coke. referee in bankruptcy of the
Daniel J.. SulIy case. today sent Judge
Holt of the United States District
court. an opinion. which if approved
by the court. will reopen the Sully
case entirely and bring I'D for ad-
judication several important and al
most sensational points. The opinion
IS given upon the application of two
sets of petitions. one ron Edwin
Hawley and Frank Ray who have
Deen sued by Suily's trustee in bank
ruptcy for certain sums alleged to
have been lost through participation
with Sully in alleged cotton pools and
the others from creditors who are not
members Of the cotton exchange.
Three questions were brought up.
First. whether $1,O0O,0O0 paid on
Saturday. March is. 1904. was a pref
erence ard SO illegal: second whether
tho Friday prices or SATURDAYS
prices should determine the amount
tn" Sully estate owes, II third.
whether transactions on the cotton
exchange are gambling transactions.
The opinion OF the referee is that the
case should be ~re-Opened. If Judge
Holt decides in his favor. his will re-
open the whole question. and if tn.
claims are decided it will make an
immense difference in the amounts
due.
If it is proved cotton exchanges
transactions are gambling transac-
tons. Sully is solvent and will not owe
n oont pnfnran rovn in h;c ror0rr
said:
Il think that the petitioners have a
direct pecuniary interest in showing
IT they can. that. upon q proper deter
minatiOn or the law and the facts.
there would be sufficient assets in thu
estate to preclude any right to recov-
cry against them. and that this is the
only proceeding in which such a de-
termination can be had. and tina they
must. therefore. be held to be parties
in interest within the meaning of the
bankruptcy act.
Large sums Of money. it is alleged
were paid by the bankrupts by way
Of margins within our months. and
within q very few Says Of the bank
ruptcy. and it is not unreasonable
that creditors Who have not received
such sums should desire to examine
the facts with a view to ascertaining
whether such payments have not been
such as are known as preferential
payments. under the bankruptcy act.
1t does not seem to me ineauitable 10
Permit a judicial Investigation into
this natter"
The referee then quoted the rule of
the New York Stock Exchange which
provides that when a men,be an
nounces his inability to meet his OBJ
legations his contracts shall be settled
at the average quotations for like
contracts on that day. unless the no.
ticc of the failure is given within an
hour of the time of the closing of the
exchange. in which case the average
quotation for contracts in the subse-
Quent day shall be the basis of settle
rnent. The referee says the trustee
in bankruptcy and opposing creditors
aver that the Sullv notice of susren-
sion was given after 2 D. m.. while the
petitioners. on the other hand. claim
n notice was sent to the superinten-
dent of the exchange by 2 p. M.
Referee Coke adds
THE petitioners ask to he permit
ted to attack the legality of the rule.
and ais to show that. even under
the rule. the average price at which
these cotton contracts should be set
tied should really be its average price
Of Friday. The average price of Sat
Erday was very nue. lower than the
average price Of Friday. The bank
ruDts had on hand a large Mount OF
cotton against h contracts. If. there
fore. they were to liduidate these con
tracts at the higher prices for the
cotton of March Is it would follow
that there would be much less money
owing by them. if anything. than
would be owing by them if the settle
merts were made on the average price
cf Saturday. March 10. 1t is manifest
that under this rule a tremendous
power is given to the superintendent
Of the exchange. It seems &c me that
such q rule. fraught with such im-
Dortant consequence to so many peo-
pie. IL it IS to be maintained at all.
should be maintained upon a strict
compliance with it's sterms: and that
petitioners here have an eouita BILE
ri.rht to be heard to show if they can.
that it has not been complied with
and h by such non compliance
their property RIGHTS nave been deter
mentally affected
Counsel for the trustee argued
that the only statements in the pc
tition which touch upon the illegally
of the exchange claims and the aues-
ton of wagering are made on infor-
nation and belief and therefore
should not De considered. For the
reasons stated I am forced tn h con-
clUsion that the petitioners here are
entitled to the relief they ask
Mr. Ponkafcl1or NAV hn a uretfy