In re Worth

Citations

• 130 F. 927
• 1904 U.S. Dist. LEXIS 278

Syllabus

<p>1. Bankruptcy — Partnership—Firm or Individual Debts.</p> <p>Where, a short time before a partnership and its members were adjudged bankrupts, a dissolution was agreed to by which one partner took the property of the firm and assumed its debts, consisting chiefly of notes given to a bank, firm creditors who refused to accept the novation cannot set up the claim that the bank consented to it and became the individual creditor of the purchasing partner, and at the same time repudiate the transaction so far as relates to a transfer of the firm property to such partner which was the consideration for his agreement to assume the debts.</p> <p>2. Same — Provable Debts — Right op Ceeditors to Plead Usury.</p> <p>Under the Iowa statute (Code 1897, § 3041) which makes a usurious contract voidable only to the extent of the usurious interest, as construed by the Supreme Court of the state, the defense of usury can be pleaded only by the borrower, and under such rule, which is controlling upon the federal courts as to Iowa contracts, creditors of a bankrupt cannot set up the defense of usury against the claim of another creditor.</p> <p>3. Same — Costs of Contesting Claim.</p> <p>Where the costs on the contest of a claim grew out of a controversy between creditors, entirely carried on for the purpose of controlling the election of trustee, they will not be allowed from the estate.</p>