In re Pease
District Court, E.D. Michigan
In Bankruptcy. Perry D. Pease was adjudicated a bankrupt at a time when he was carrying on business in a small town of 600 inhabitants. He had, October 12, 1900, incurred debts to the amount of about $10,000, and estimated his stock in trade at about the same amount. On that day he borrowed $3,500, giving a mortgage on his stock to a security trust company.
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In Bankruptcy. Perry D. Pease was adjudicated a bankrupt at a time when he was carrying on business in a small town of 600 inhabitants. He had, October 12, 1900, incurred debts to the amount of about $10,000, and estimated his stock in trade at about the same amount. On that day he borrowed $3,500, giving a mortgage on his stock to a security trust company. The mortgage was secured by a Mr. Chittenden, a lawyer, who, upon the giving of the mortgage, took possession of the stock and proceeded to sell it. Certain creditors of Pease attached the property, and on an inventory the stock was valued…
1Opinion of the Court
SWAN, District Judge.
The bankrupt’s intent to prefer Bittman
& Hoffstadt and the other creditors, to pay whom he borrowed the $3,500, is conclusively shown by the facts, and was known to the agent of the trust company. Nor is there any question but that the intent and effect of the mortgage was to hinder or delay, if not defraud, his creditors. In re Goldschmidt, 3 Nat. Bankr. R. 168, 169, Fed. Cas. No. 5,520; In re McLam (D. C.) 97 Fed. 922.
The giving of the mortgage, therefore, was an act of bankruptcy, under subdivision 1, § 3, c. 541, Bankr. Act July 1, 1898, 30 Stat. 546, 547 [U. St.…
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