In re Lacey

14 F. Cas. 906, 12 Blatchf. 322, 10 Nat. Bank. Reg. 477, 1874 U.S. App. LEXIS 1828
CourtU.S. Circuit Court for the District of Connecticut
DecidedSeptember 15, 1874
StatusPublished
Cited by2 cases

This text of 14 F. Cas. 906 (In re Lacey) is published on Counsel Stack Legal Research, covering U.S. Circuit Court for the District of Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Lacey, 14 F. Cas. 906, 12 Blatchf. 322, 10 Nat. Bank. Reg. 477, 1874 U.S. App. LEXIS 1828 (circtdct 1874).

Opinion

WOODRUFF, Circuit Judge.

On the 7th of June, 1873, George King, a creditor of the copartnership firm of Lacey. Downs & Co., filed against them, in the district court, his petition, alleging certain acts of bankruptcy, and praying that the said firm, and the co-partners therein, be adjudged bankrupt. Upon filing the said petition the usual order was made by the court, requiring the alleged bankrupts to show cause why such adjudication should not be made, which order was returnable on the lGth of the- said month of June; and. at the same time, a warrant was issued to the marshal, directing him to take possession of their property, in virtue of which the marshal did fake such possession. Upon the lGth of June, the return day of the order to show cause, the parties, the said King (the petitioner), and the alleged bank-rapts. appeared, and the latter denied the acts of bankruptcy alleged, and demanded a Irinl by jury, whereupon the court ordered that such trial by jury be had at the then next term of the district court, to be held on the 4th Tuesday of August following. At the said August term, neither of the parties, petitioner nor respondents, appeared for trial, but the cause was duly entered on the dobkef of the said court, and the parties respectively duly entered their appearance thereon. The said cause was thereupon formally continued to the next term of the said court, to be holden on tlie 4th Tuesday of November, 1S73. In this stage of the proceedings in bankruptcy, and after the lapse of four months from the levy of the attachment to be presently mentioned, the National Pahquio-que Bank purchased from the petitioning creditor, King, all his claims against the alleged bankrupts, including the debt mentioned in his petition, amounting to upwards of $2.300, and it was agreed between the said bank and King that his said petition and proceedings in bankruptcy should be withdrawn and discontinued. The motive to this purchase and agreement appears in the fact, that the Pahquioque Bank were creditors of Lacey, Downs & Co., to an amount of about twenty-five thousand dollars, and, to secure the collection thereof, they had. on the 2d day of June — five days before the petition in bankruptcy was filed — caused all, or nearly all, of the property of the debtors, a mounting in value to about $30,000, to be seized on a writ of attachment, which attachment would, by virtue of the fourteenth section of the bankrupt law, as was believed, be dissolved by the proceedings in bankruptcy, and any preference secured thereby be defeated, should Lacey, Downs & Co. be adjudged bankrupt, and an assignee be appointed, ufider proceedings so begun in the bankruptcy court by the said King, whereas, on the other hand, such attachment was deemed valid and effectual, as a security to the said bank, as against any proceedings in bankruptcy begun after the lapse of four months from the levy of such attachment. The debts owing by Lacey, Downs & Co. were about $70,000, and the question whether the bank should hold their said attachment in full force, and collect thereby their full claim of about $25.000, or should lose the benefit of their attachment, and come in with the other creditors, and receive, probably little, if anything, over 40 per cent, of such claim, was of much interest, and made the motive to their purchase of the claim of the petitioning creditor quite obvious. If. at that time, the proceedings instituted by King could be effectually- terminated and disposed of, no creditor could file a new and original petition within four months after the levy of their attachment, as that period had already elapsed. The bank, therefore, with the said King, and with the assent and consent of the alleged bankrupts, without waiting until the November term of the court, to which the proceedings had been formally continued for trial, as above stated, made application to the judge in vacation, and, on the 20th day of October, 1S73, obtained an order that the petition of the said George King “be withdrawn by the said petitioner, and dismissed, [908]*908and the proceedings thereon discontinued, and the provisional warrant issued thereon be vacated, whenever and Dot until all the fees and moneys due clerk and marshal for all services and disbursements on all orders and provisional warrant are fully paid and satisfied, and that, upon such payment, tile clerk is directed to pay to William B. Seeley, cashier of the National Pahquioque Bank, the balance of the deposit of $(50, which shall then be in .the hands of the said clerk.” Such deposit had been made by King when he filed his petition. He had assigned It to the . bank, and, on that day, the said bank directed the clerk to satisfy his fees (which were, in fact, less than the deposit) out of the said $60 in his hands. The clerk of the court, thereupon, on the same day, issued an order authorizing the marshal to return the property taken by him under the aforesaid provisional warrant, to the person or persons from whom he received the same, when and not until the fees of the marshal upon the said warrant and bankruptcy proceedings were paid and satisfied. The bank was then and always ready and willing to pay the marshal’s fees, and offered to pay such fees whenever the marshal could have the amount thereof determined, but, owing to the illness of one of his agents, and the claim of one or some of his agents, who had been placed in charge of the property, to exorbitant charges, the marshal was unable to procure the adjustment of his bill until after the intervention of another creditor, Henry Crofut, as next to be mentioned. but, on the first day of the said November term, to which the cause had been continued, as above stated; the said fees of the marshal and his disbursements were paid. Meantime this seneme to procure an abandonment of the petition in bankruptcy appears to have become known to another creditor, Henry Crofut, and. on the 31st day of October, he presented his petition to the district judge, stating the facts above recited, his claim as creditor, &c., insisting that he could not, by an arrangement made prior to the then coming November term, be deprived of the right to appear and prosecute the proceedings on the petition of King, if the latter did not appear and prosecute, and praying that he might be substituted in the place of King, as prosecuting creditor, and that the said order of the 20th of October be vacated. Under an order to show cause, returnable on the 17th of November, the parties were fully heard upon the said petition of Crofut, and, upon consideration, it was ordered and decreed, by the district court, that the said order of the 20th of October be vacated and set aside, and the said Henry Crofut be authorized to appear in said proceedings, and prosecute the said petition of the said King against the alleged bankrupts, in the same way and manner, and to the like effect, as the said King might or could do had the said order of October 20th. 1873, never been made, and that the said petition stand for trial in the said district court at its said November term, whereupon, the said Crofut forthwith- and at the said November term, appeared in accordance with the said order. Thereupon, the original petitioning creditor, King, the said bank, and the said alleged bankrupts, claiming to be aggrieved by the said decision, order and decree, moved for a review thereof by the circuit court, and the same was allowed by the district court, and bonds for the prosecution of such review were given. On their petition for such review, the matter was heard in this court at the April term last past.

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Cite This Page — Counsel Stack

Bluebook (online)
14 F. Cas. 906, 12 Blatchf. 322, 10 Nat. Bank. Reg. 477, 1874 U.S. App. LEXIS 1828, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-lacey-circtdct-1874.