The Memphis appeal. [volume] (Memphis, Tenn.) 1886-1890, 1889-05-20
A LEGAL SENSATION.
A Suit OF Immease Importance to the
Commercial World.


Commercial World.
CHICAGO, ILL.,, May l9.-Proceedings
designed to spread CONSERVATION in the
ranks OF confession OF judgment holders,
and have wide bearing in the CONNER
cial world, We're begun in the Federal Cir
cult Court here yesterday. Tho initiative
was in the shape OF bill filed by seventy
five Eastern iewelry firms, the immediate
object being to set aside confessions Of
judgment, whereby half dozen Chica-
goans captured the assets OF Clapp &
Davies, wholesale jewellers here, who
failed in 1850. TO Daniel Loring, who
gained notoriety through his connection
with the famous Board Of Trade fund
speculation, Clapp & Davies claimed to
owe $4,000, 10 ii. B. Peabody $4,000, to
Ada $. llavens $1,000, to w. b. Clapp
SG6, 600, and 10 Mary l.. lIanley Loring
$4,000, in all $4,000. One fine
day in April, 1887. the firm confessed
judgments to these parties for the amounts
of their alleged Indebtedness. Executions
were levied upon the firms stock. I'm
mediately llavens, one of the judgment
holders, filed creditors bill, and on this
a Chicago politician, Chas. Catlin, was ap.
pointed TO be receiver. All the property
OF the firm was turned over TO Receiver
Catlin and by him sold, the purchasers
becoming the judgment holders for
$4,000, an amount small enough TO bar
out all other creditors. The host OF credi-
tors who get nothing, and who are now
the complainants, constitute almost II not
quite all OF the jewelry trade Of the East
Such firms Ms X. Backington 4 Co, OF
Boston; Cook q Eddy, OF Providence; X.
/. Blake d Clailin, OF Boston; Lincoln,
Bacon q Co., OF New York, comprise the
list. The aggregate amount OF their
claims Is about $4,000 of the total
$500, 600 of Clapp x Davics's alleged in
debtedncss. They claim that the firm
was, for more than year prior 10 lis
failure, hopelessly insolyeni, and that
the partners well knew that such was
the case and that they never coi,id
pay their obligations. Nevertheless, they
recklessly aud willully continued their
business and continued to buy goods from
the compainauts on credit; doing 20, II is
claimed, in persuance Of u well laid
tNutult ol WHICH Nut Nhnlt-Hlollh OF luNg-
ment or unlawful preferences, il is urged,
were direct violations OF the law rs laid
down 10y Mr.. Justice Harlan, Of the United
States Supreme Court, in his recent de-
cslon in the case OF White vs. Colshansen.
The bill OF the creditors OF Clapp q Davies
is filed for the purpose OF reaching their
assets undlr Justice llarlan's decision.
This is the first united effort anywhere, IL
is said, which has been made by creditors
for setting aside preferences in the past
thirteen ycars. TIE Court is asked TO en-
Join Receiver Catlin and TO declare the
Capp & Davies transfer OF property vol
untary assignment for the benefit OF all
the creditors.
II successful, 30 say the attorneys for the
complainants, the case will be the fore
runner OF thousand more exactly similar
in all important details. The principle OF
the law on which the complainants expect
to gain their victory involves every failure
that has taken place in Chicagoi in thirteen
years. II the decision OF Judge Harlan is
upheld Il will mean that the banks OF Chi
cago must give up an untold amount OF
money secured by such unlawful prefer.
enccs. Il is said that one prominent bank
alone holds at least Sl,jC0,OOO Of money
tina aifatu.I