
    Case No. 5,187.
    Ex parte GALBRAITH.
    [1 N. Y. Leg. Obs. 5, note.]
    District Court, Tennessee.
    
    1842.
    Before BROWN, District Judge
    
      
       [District not given.]
    
   It appeared that Galbraith, Cromwell & Co. were partners in trade at Clarksville, and under the firm of Galbraith, Logan & Co., at New Orleans, La. In the month of April they failed in business and became insolvent. About the time of their failure Cromwell, one of the firm and the active partner at Clarks-ville, made an assignment of the partnership effects to secure certain creditors, leaving unprovided for a large debt due to the Planter’s Bank, M’Keage, and other creditors. The claims of the preferred creditors amounted to upwards of $80,000, and the claims left out of the deed of trust to $100,000. Logan, one of the firm, was privy and consented to the assignment made by Cromwell; the other partners, Galbraith and Greenfield, were at New Orleans, and knew nothing of it when made, and dissented to the transfer of effects as soon as they heard of it.

It was held that the preference given by Cromwell in the deed of assignment made for the benefit of a part of the creditors, was in violation of the bankrupt law [of 1841 (5 Stat. 440)], and on account of this preference the debtors being merchants, it was a fraud on the part of Cromwell and also on the part of Logan who consented to the transfer; that it was an act of bankruptcy on their part, and brought them and their effects under the operation of the bankrupt law on the petition of their creditors; that the deed of transfer made by Cromwell was utterly void; that Galbraith and Greenfield, who had no knowledge of the deed at tlie time it was executed, and dissented from the transfer as soon as they heard of it, were not personally affected by the act of Cromwell, and that they had not therefore committed an act of bankruptcy; and that Galbraith, Cromwell & Co., and the partners composing the firm being insolvent and partners in trade, the whole of the partners must be declared bankrupts by reason of their insolvency under the 14th section of the act of congress in relation to bankruptcies, and a decree was entered accordingly.  