Case Name: In re GENERAL AUTOMOBILE & MFG. CO.; THEOBALD V. HAMMOND
Court: United States Court of Appeals for the Sixth Circuit
Jurisdiction: United States
Decision Date: 1904-12-09
Citations: 133 F. 525
Docket Number: No. 1,329
Parties: In re GENERAL AUTOMOBILE & MFG. CO. THEOBALD V. HAMMOND.
Judges: Before EURTON, SEVERENS, and RICHARDS, Circuit Judges.
Reporter: Federal Reporter
Volume: 133
Pages: 525–525

Head Matter:
In re GENERAL AUTOMOBILE & MFG. CO. THEOBALD V. HAMMOND.
(Circuit Court of Appeals, Sixth Circuit.
December 9, 1904.)
No. 1,329.
1. Bankruptcy — Debts Entitled to Priority — Money Boebowed to Pay Labor Claims.
Tbe fact that money was borrowed by a bankrupt for the stated purpose of paying labor claims does not entitle the lender to be subrogated to the priority to which such claims would have been entitled in bankruptcy, where there was no agreement to that effect, or that the money should be so used.
Petition for Review of Proceedings of the District Court of the United States for the Eastern Division of the Northern District of Ohio, in Bankruptcy.
The following is the opinion of the District Court, by WING, District Judge:
In this case Jacob Theobald procured the loan of money to the bankrupt by furnishing the security upon which the loan was made. It was stated at the time by the agent of the bankrupt that it was the purpose of the bankrupt to use the money, or a portion thereof, in paying labor claims then due. There was no agreement between Theobald and the bankrupt that the money should be so used, nor was there an agreement between them that the security or priority incident to the labor claims should pass to Theobald and be operative in his favor. Theobald was under no obligation, in law, to advance this money, nor was it in any wise for his protection or interest that the claims were paid. I think the law is clear, under these circumstances, that Theobald cannot assert a priority, and could not have so asserted it in the receivership suit which was antecedent to the bankruptcy proceedings.
The finding of the referee is sustained and affirmed.
Smith & Taft, for appellant.
Treadway & Marlatt, for appellee.
Before EURTON, SEVERENS, and RICHARDS, Circuit Judges.

Opinion:
PER CURIAM.
The order denying a preference to the appellant is affirmed for the reasons stated in the opinion of WING, District Judge.