In re Terry

23 F. Cas. 852, 5 Biss. 110

Opinion

BLODGETT, District Judge,

charged the jury as follows:

It is insisted that the successive transactions between these partners make Lyman Terry guilty of the acts of bankruptcy provided for in the statute, which brings him within the clauses of the bankrupt act [of 1867; 14 Stat. 517]. The acts insisted upon as bringing him within the operation of these clauses, are: (1) Procuring the departure of' Arbogast from the state. (2) Giving the judgment note with others to Booth. (3) The buying of the 1,000 boxes of glass on the 30th of March, and taking possession of the 525 boxes on the 3d and 6th of April.

As to the first of these grounds, — that of procuring the departure of Arbogast from the state, — I do not see how this can be held to be an act of bankruptcy on the part of Lyman Terry. It was such an act on the part of Arbogast. But that this act of Ar-bogast is to make Lyman Terry a bankrupt, I do not see, any more than it would any stranger, who had used his influence or advice to procure Arbogast’s withdrawal from the firm.

The note given Booth, and used as - a means, may have been a fraud on Arbogast, —may have deceived him, — but how are the creditors left any worse off? Arbogast put no money into the concern, and under the evidence it seems doubtful whether his services were of any value to them. At all events, the evidence shows that they lost money all the time he stayed, and only made money, if at all, after he left But it is contended that the buying out of Arbogast was dictated by an honest regard for the interests of the firm.

We now come to the transaction of the 30th of March, when Lyman Terry let F. P. Terry have the $2.000 on the bill of sale of 1,000 boxes of glass. It is contended that at this time Lyman Terry was still a member of this firm, and that, owing to informalities in the proceeding in not filing the certificate of dissolution, the dissolution had not taken effect as to creditors. I agree with the counsel for the creditors on this point, that the partnership still continued. But in my opinion this is no reason why Lyman Terry could not, if the transaction was fair, buy this glass. The business of the firm was to manufacture glass and sell it. This was their only resource from which to raise money to meet their daily expenditures. Lyman Terry had no interest in the firm save to the extent of the $1,250 capital he had put in. As to all other transactions, he could deal, buy and sell, like any third party.

Verdict against creditors, as to Lyman Terry.