Morris Zlot, Isabel Zlot and Rose Lee Susnow v. San Jose Fashions, Inc.

This appeal is taken from an order dismissing an involuntary petition in bankruptcy. The sole act of bankruptcy alleged was:

The dismissal was upon the ground that such a petition, based upon preferential transfers, is subject to dismissal if it does not appear that there were any other creditors at the time of the transfers except the preferential transferees. See Brake v. Callison, 5 Cir., 1904, 129 F. 201 ; In re Flint Hill Stone & Construction Co., D.C.N.D.N.Y., 1907, 149 F. 1007 ; 1 Collier, Bankruptcy (14th Ed.) § 3.207. Petitioners did assert that at the time of the filing of the petition rentals were due from the debtor. It appears from the petition, however, that these rentals did not become due until-after the alleged preferential transfers. Appellee therefore asserts that the petition upon its face demonstrates that petitioners were not creditors of the bankrupt at the time of the alleged preferential transfers.

It does not appear from the record, confined as it is to the allegations of the petition, whether the circumstances surrounding the alleged preferential payments were such as to constitute those-payments an anticipatory breach of the-lease by having rendered…