Engelbrecht

The appellant urges as error on appeal the District Court’s order overruling ap *134 pellant’s plea to bankruptcy jurisdiction. Briefly stated, appellant contends that there is a prior in rem state court action having exclusive jurisdiction to deal with the subject matter of said action.

The pertinent facts are as follows: On February 23, 1954, Arthur Engelbrecht (hereafter called “Appellant”), George Gilling and John H. McCullough (hereafter called “Bankrupt”) executed an agreement forming the Tri-State Cesspool Drilling Co., a partnership (hereafter called “Cesspool”). Appellant contributed all of the funds used to purchase Cesspool’s operating equipment. Subsequently, the partners had a falling out and on April 6, 1954, Gilling and bankrupt informed appellant in writing of the dissolution of Cesspool. The power to dissolve was upheld by the state court in Engelbrecht v. McCullough, 1956, 80 Ariz. 77 , 292 P.2d 845 . Availing themselves of the option provided in the Cesspool partnership agreement, the continuing partners, Gilling and bankrupt, purchased the interest of the outgoing partner, Engelbrecht. Bankrupt and Gilling then formed and operated the Tri-State Drilling Co., a…