Washington Cotton Co. v. Morgan & Williams

PER CURTAM. The Washington Cotton Company, a Georgia Corporation, presented it's petition in the court below to have the firm of Morgan & Williams, a partnership consisting of A. S- Morgan and J. S. Williams, declared a bankrupt. The petition contained the usual averments, showing the indebtedness of the firm and that petitioner was a creditor. The alleged act of bankruptcy was that the firm, within four months of the filing of the petition, had transferred a portion of its property to named creditors with the intent to prefer said creditors over other creditors. The evidence showed that the firm had, as alleged, paid certain creditors in full, and that the debts of the firm were slightly in excess of the firm’s assets; but it was also shown that the individual members of the firm, all residing within the jurisdiction of the court, were amply solvent — that their property was sufficient to pay more than ten times all of their debts, individual and partnership. ’ The relevant parts of the bankruptcy act arc as follows: It is made an act of bankruptcy to have— “transferred, while insolvent, any portion of Ms property to one or more of Ms creditors with intent- to prefer such creditors over his other creditors.’’ Section 3a, Bankr. Act 3 80S. “A person shall be deemed to have given a preference if, being insolvent, he lias, within four months before the filing of tile petition, or after the filing of t lie pet ilion and before the adjudication, procured or suffered a judgment to be entered against himself in favor of any person, or made a transfer of any of his property, and the effect of the enforcement of such judgment or transfer will lie to enable any one of ids creditors to obtain a greater percentage of his debt than any other of such creditors of the same class. * * * ” Section 60a, Bankr. Act 1898. The property of the individual members of the firm, after the payment of the debts of the individual members, is liable to the satisfaction of the firm’s debts. It appears from the evidence, therefore, that all of the creditors of the firm could collect their claims in full. The creditors which the firm had paid as alleged were not enabled to obtain any “greater percentage” of their claims than any other creditors, for all can be paid in full. This fact alone, without referring to others commented on by the learned District Judge, fully sustains the decree dismissing the petition. Tumlin v. Bryan, 165 Fed. 166, 91 C. C. A. 200, 21 L. R. A. (N. S.) 960. The decree of the District Court is affirmed.