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In re HAMMOND et al.

(District Court, E. D. New York.

May 29, 1908.)

Bankruptcy — Involuntary Proceedings — Acts op Bankruptcy.

A petition in involuntary bankruptcy held demurrable for failure to allege facts essential to constitute acts of bankruptcy, but with leave to the petitioning creditors to amend.

In Bankruptcy. Involuntary proceedings. On demurrer to petitioii,

Henry M. Brigham, for petitioning creditors.

Altkrug & Kahn, for alleged bankrupts.

CHATFIELD, District Judge.

Several demurrers to the petition in bankruptcy have been interposed. The first objection urged under the demurrer is that the bankrupts are alleged in the petition to have executed a bill of sale of their premises for a nominal consideration within four months of the bankruptcy, and that at the time of filing the petition the bankrupt's were insolvent. Any allegation of insolvency at the time of making the bill of sale was omitted. Under section 3 of the bankruptcy act (Act July 1, 1898, c. 541, 30 Stat. 546 [U. S. Comp. St. 1901, p. 3422]) such an allegation was necessary.

The next ground of objection is that the petition states that judgments were suffered to be entered against the bankrupts, but does not state that they were not vacated within five days before a sale or final disposition.

The third ground of objection is that preferential payments are alleged to- have been made, but no particular payments are recited, and no allegation is made that any transfer of property referred to was with intent to prefer the creditors to whom the property was transferred.

Each of these grounds of demurrer is good in the sense that the objection is as to a jurisdictional fact which must be established in order to keep the estate in bankruptcy, but, inasmuch as other creditors’ rights have accrued, and inasmuch as the petition was dated upon the 9th day of April, whereas the transfer in question was made upon the 4th of April, in order to secure a past indebtedness, and as the petition contains the general statement that preferential payments have been made to creditors while the alleged bankrupts were insolvent, this would seem to be a proper case for amendment of the petition rather than for absolute dismissal.

The demurrer will be sustained on all three grounds, with leave to the petitioning creditors within five days to file an amended petition showing specifically the acts upon which bankruptcy is claimed and the conditions under which said acts were committed.

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