In re Folb

91 F. 107, 1898 U.S. Dist. LEXIS 36

• Court: District Court, E.D. North Carolina
• Decided: December 28, 1898
• Status: Published

Opinion

PURNELL, District Judge.

The foregoing report cf. the referee is in all respects affirmed.' The claim of a creditor, though secured under a deed of assignment made prior to the passage of the act of July 1, 1898 (the bankrupt law), and paid in part by the trustee under such indenture, stands on the same footing with a claim upon which there has been a payment. The claim should be admitted in a meeting of creditors of a bankrupt; the amount to be reckoned, less the credit. The assignment is not of importance in this proceeding— First, because this is a voluntary proceeding; and, second, it was made and executed more than a year prior to the date of the petition in bankruptcy. There is no provision in the act of July 1, 1898, which would require the creditor to refund the credit on his claim to the estate before he can prove his claim, and participate in a meeting of the creditors of the bankrupt. No brief or authority for the position of the objectors is filed or sent up. The claims do not fall under any of those excluded from participation in creditors’ meetings by section 56, for it is not claimed they are secured; nor under section 57, or any subdivision thereof, as the assignment was adjudged null by a state court after the payment of the 20 per cent. The preference given was too remote to have been in contemplation of the bankrupt act of July 1, 1898. If based on the idea that the acceptance of the 20 per cent, from the trustee under the assignment was a composition,—an acceptance of a part for the whole debt,—the position is untenable. The amount paid is simply entered on the notes (the forms of most of the claims) and accounts as a credit; and, under the most liberal decisions, to constitute a part payment a compromise and settlement in full, it must be so understood and accepted. It is, therefore, adjudged that E. P. Powers was elected trustee according to the provisions of the act of congress approved July 1, 1898, entitled an “Act to establish a uniform system of bankruptcy throughout the United States.”