The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1889-05-20
CONFESSED JUDGMENTS.
An Important Suit in Which 1t Is Urged that
Preferences to Creditors Is Unlawful.

CHICAGO, May 1s.-Proceedings likely to
spread CONSERVATION in the ranks of con-
fession of Judgment holders and have
wide bearing in the commercial world,
were begun In the federal Circuit Court
here to-day. The initiative was in the
shape of a bill filed by seventy-five Eastern
jewelry firms. the immediate object being
to set aside confessions of Judgment
whereby half dozen Chicagoans
captured the assets of Clapp & Davies,
wholesale jewellers here. who failed in 1887,
with liabilities of over $500. 900. To Daniel
Loring. whe gained notoriety through his
connection with the famous Board of Trade
fund" speculation, Clapp s. Davies claimed
to owe S6.0O0 to Ii. B. Peabody, Sis, 900; to
Ada S. Ravens, 81, 900; to William b. Clapp,
$4,000. and to Mary E. Hanley Loring, s12.-
O00-in al $4,000 One fine day in April,
1887, the. firm confessed judgments to these
parties for the amounts of their alleged re-
spective Indebtedness. Executions were
levied upon the firms stock. Immediately
Ada >. Havens, one of the judgment hold
cago politician. Charles Catlin. was ap-
pointed receiver. All the property of the
hrm was turned over to Receiver Catlin,
and by him sold, the purchasers being the
OBSERVATION-DISCLOSURES, 1Or an amount
su,an enough to bar out all other creditors.
The host of creditors who get nothing and
who now are the compliments constitute
almost, If not quite. all the jewelry trade of
the East. Such firms as K. b. Blackinton.
of Boston; Cook * Eddy, of Providence, r.
l.; Blake q Clatiin, of Boston; Lincoln, Ba-
con d Co., of New York are in the list.
The aggregate amount of their claim is
about sl75:OOO OF the total of $500. 1000 of
Clapp q Davies's alleged indebtedness.
They claim that the firm was for more than
year prior to its failure hopelessly insolv-
ent, and that the partners knew that such
was the case. and that they could never pay
iessly and willfully continued their bust
ness. and continued to buy goods from the
compliments on credit, doing So il is
claimed, In pursuance of well-laid scheme
OF tn sr 5s Of
ment, or unlawful preferences, it is urged.
were in direct violation of the law, as laid
down by Mr.. Justice Harlan, of the United
States supreme Court; IN his recent decis-
The bill of the creditors of Ciapp g. Davies
Is filed for the purpose of reaching their as
sets under Justice Harlan's decision.
This is the first united effort anywhere
for setting aside preferences in the past
thirteen years The court is asked to en-
join Receiver Catlin. and to declare the
Clapp d. Davies transfer of property vol
creditors. If successful. so say the at
torneys for the complainants. this case will
be the forerunner of thousand more ex-
actly similar in all important details The
principle of the law on which the complain
ants expect to gain their victory involves
every failure that has taken place in Chi
cago in thirteen years. These, the attor-
neys say, were always considered unlawful
by Judge Harlan. If the decision by Judge
Harlan is upheld, il will mean that the
banks of ClIcaQ 90 rnuaf give m untold
amount which they have secured by un-
lawful preferences. 1t is said that one
prominent bank alone holds at least ST.
10000 of money thus obtained.