, 1873-06-09
How Mr.. Manning, IN Attorney,
Managed to Middle the Affairs
Of Shanahan & West,
1 and His Own.
He Compromises Their Af@i!rs, Gets
Them Into Bankruptcy, and
Himself Along.
Judge Blod gett Tells Some Interesting
Facts as to Commercial Paper and
!, Preferential Payments.


Tho trial OF shhnahan, Wost d Manning,
for bankruptcy, is ono Of tho most important to
tho general public, as regards tho isaues raiaod,
that has taken place in Chicago Binoo tho fro.
shanahan d West, trnding above thoir means,
but still doing fairly largo business, suspend
cd tho payment Of their commercial papor, and
were adjudgod bankrupt, under oircumstancoa
which nro familiar to most rendors. Doforo tho
Court had Investigated a titho Of the matters
charged, o compromise waa efrootoG. by whioh
proceedings woro to havo been abandoned.
Mr.. Manning, young nttorney Of this city,
who has praotisod oince tho fro, and was for
morly in the dry goods business, an intimate
frdend OF Wost, was tho gontloman who arranged
this compromise. As compensation for doing
80, ho was to recoiyo portion OF tho monoys
eavcd by tho managomont,-f example, in con-
eideration Of his making himsolf mud bis prop
erty responsible to tho creditors for tho payment
Of seventy cents on tho tol1ar OF tho firms in-
debtodness, aud obtafning loavo for tho 1attor to
recommenco buRineas, he Was to tako chargo
Of the dnily receipts, aud out Of
thom pay tho compromise notos,
and from whatevcr remained koop his propor~
tion Of tho 80 cents aavcd-tl.o difference be-
tween tho 10 cents paid and tho dollar duo. In
accordance with this arrangement, he did giyo
notes to several Of tho creditors on tho basis Of
70 conts on tho dollar; shanahan & West roconl-
moncod business; and Manning took tho pro-
Goods cyory night, croditing them to his own ac-
count. He paid only 10 per cont Of tho frat
1nstal1ment Of 90 por cont duo upon the notes,
however, thus allowing the arrangement made
to fail, aud tho accounts showed that ho
appropriated $4,000 in cash md $500
In goodB to his own uBe. Thoao
proceedings were tllon brought by Tcnney
Flower & Abcrcrombio instructed BY creditors
who hold ono OF said notes, for the bankruptcy
Of said firm, including Manning ns a partner.
Therefore, ono OF the points at Issue WAS
whethor the attorney who aottled tho frat bank
and personally guaranteeing the payment OF tho
debts, rendered tho firm liable to bankruptcy for
preferential payments, and himself lia6le as
partner to proceedings in bankruptcy brought
against tho firm aud htmsolf on tho suspension
Of notes--' commercial papor,"-to which ho was
party in common with tho others. Although
the Tonnoys- experienced and sharp in tho ways
Of NEUTRALITY-SUSPICIOUS. the first insisted that tho
Inv On tho pofut WEB well settled, yot tho atten-
lion they showed to oYory detail of tho light,
tho woll-known ability Of Mr. Black, tho counsel
opposed to their counsel {A1r. Bont1oy, one Of
the ablest bankruptcy counsel Of the Wost) and
the multiplicity OF points which he contrived to
misc, demonstrated tho Importance Of this loyal
Tfmes las had 90 liEtle to BaY '~'N~N
The above statement Of tho cnse Is fnir pre-
santation Of the facts o1ictcd by tho evidence on
which the counsel relied, and We do not, there-
fore, mood to recall tho speeches Of counsel, but
proceed at onco to the charge Of tho Court to tho
Jury.
His Honor, after noticing the evidence ad-
duced, and receuntlns the history Of tho entire
proceedings in bankruptcy, proceeded to connid-
or the aotB charged in tho proaont proceeding
first, the suspension Of commercial paper sec-
ond, tho payment OF moneys to Manning with
intent to give a preference, and also with intent
In order to establish tho suspension of COM
morcial paper, 1t must DO ohown that respond
ents were merchants, etc.. aud that papor given
by them as merchants lad 5l;r not boon paid for
been denied that tho firm wore merchants, but
counsel for respondents insistad as q matter OF
law that tho papor in question was not COM
mercial paper, in that there was collateral He-
purity glyon therefor whilst admitting thlt it
wna given in duo course Of business by respond
ontB aR merchants. It WAS proved that the notes
wore not paid at maturity, nor fourteen days
thereafter.
per by merchant is in net Of bankruptcy. tho
Court did not think that the fact that creditor
holds security upon papor given by merchant
destroys itB character as commercial paper. Tho
sponsibility OF the debtor. He may prove his
claim In bankruptcy may surrender his security,
and rely solely Oh lis dividend or exhaust hia
security and take his dividend On tho balance Of
tho debt. The Court, therefore, charged tie
Jury that tho paper waB commercial paper, given
IN due course Of buBiuoss OF the tlrm. potWth-
standing It was eecurod
It was claimed by tho respondents that they
payment of thei paper at maturity or il days
thereafter, because, they claim and insist, they
had m understanding at the time the paper was
given TINT it might not bo paid at maturity, and
that further tlmo should bo given If tho pro-
ceeds Of salos did not onablo them to moot tho
liability. It was a we'll settled principle that
when parties attempt to reduce Contract to
writing, the writton contract furnishes tile solo
evidenco Of tho agreement, and that oontraot
cannot rest partly in writing md partly In
parole. Tho notes and competition decd, which
aro tho only evidence Of tho agroement
between respondents and their creditors
contain no provision for such an extension Of
Idea OF such agrqomont