Page:Federal Reporter, 1st Series, Volume 2.djvu/205

 198 FEDERAL REPORTER. �because its business was their business. It was then pro- posed that Mrs. Penny should take a chattel mortgage, pay- able in one year, in satisfaction of her judgments, and that ail the other creditors should take notes at three, six, nine, and twelve months, with interest. This plan met the approval of the other officers and trustees, and on this basis negotiations took place between two of the largest creditors and Mrs. Penny. After this plan was proposed, and to promote it, the trustees passed a resolution authorizing the execution of Bueh a chatte! mortgage to Mrs. Penny in satisfaction of her judgment. This was on the first day of August. �Interviews followed between the two other creditors, who assumed to act for ail the other creditors, and Mr. and Mrs. Penny and Mrs. Penny's attorney. Some modifications were proposed in the plan. One was that in case upon foreclosure of the mortgage there should not be sufficient assets to pay Mrs. Penny and ail the other creditors in full, the loss should be borne pro rata, in proportion to their several claims. The terms of the arrangement were explained to Mrs. Penny, and seemed to meet her approval. A final meeting was held on the seventeenth of August, at which she was not present, but Mr. Penny and her attorney in the actions were present and assumed to agree to the arrangement for her, and instructions were given to a lawyer at Nyack to draw up papers to carry the agreement into effect. The papers were drawn and were found incorrect and were altered. After several days delay Mrs. Penny finally refused to sign the papers and gave instructions to have levies made under the executions. Then followed the application to the marine court for relief against the judg- ments, and the actions of the other creditors, in co-operation with the trustees other than Mr. Penny, to throw the company into bankruptcy, in order to prevent Mrs. Penny from realiz- ing any benefit from her judgment. This precipitated the ruin of the company. In what is disclosed by the evid(3nce as to the assets and liabilities of the company up to that time, I fail to find evidence that it was insolvent in such sense as to make a security acquired by a creditor a prefer- ence. The statement rnade at the annual meeting was that ����