Evening star. [volume] (Washington, D.C.) 1854-1972, 1904-09-06
COURT TO DECIDE BETWEEN
PROPOSITIONS SUBMITTED.
Catholic University Given Time to
Answer Allegation Regarding
Deed of Trust.

cerned. the notes are perfectly safe in the
hands of Mr.. Waggaman. and that allega-
tons to the contrary are unjust and
founded
After argument. which lasted until near
~ L o'clock, Justice Anderson announced
an adjournment Until next Thursday morn
ing at 10 o'clock. in order to give counsel
for the Catholic University of America an
opportunity to file an answer denying that
Mr. Waggaman. in making the deed of
trust in the university's favor for more
than SSU.0Oo. intended to prefer that in
SttutlOn as Il creditor.
The court room this morning was the
scene OF an interesting legal battle between
an array of the best known local attor-
neyS.
The two propositions before the court
We're whether the estate of Mr.. Waggaman
should be administered as whole by a
trustee in bankruptcy for the equal benefit
of all creditors, either secured or unse-
cured, or if the estate should be divided
INTO trust fund for the benefit of lienors
or secured creditors. the balance to go to
the general creditors.
MIR. WaSgaman was not present but was
represented by Mr. Irving Williamson. The
il terests of the Catholic University of
America and Georgetown University were
Entrusted to Messrs. Hamilton and Colbert
and MIR. Charles j. Bcnaparte of Baltimore
who was prominent in the prosecution of
the postal fraud cases last summer.
Asks for Receiver in Equity
Mr. Ralston of Ralston & Siddons, attor-
neys for several secured creditors of Mr..
Naggaman. was first to address the court
and he requested tie appointment of a re-
ceiver in equity IN order that the interests
of the lienors or secured creditors might
be conserved.
Mr.. Williams presented his answer to the
rule already described. Mr.. RalSton ad-
Vanced the view that the notes were Sc
cured practically only by the signatures of
clerks in Mr.. Waggaman's office, or MEM
bers of his immediate family n receiver in
equity was absolutely necessary.
Mr. Waggaman does not deny the ex-
istence of lien on the notes of which he
now seeks to retain possession" said Mr.
RalSton, and l maintain, if the court
please, that the resulting condition is high
ly improper, for why should he seek to
hold them? Mr.. Waggaman is admittedly
unable to pay his debts, and this is not a
trivial matter. More than a million dollars
are involved. and the petitioners are very
anxious that the funds be placed in safe
hands
Quotes MI. Williamson.
Mi Williamson, in making answer a
week ago to this court, in behalf of Mr.
Naggaman, admitted that the interests of
all creditors would be best subserved by the
appointment of a board of administrators
Today he makes answer that a receiver or
administrator is not necessary, and I sub
mt lHdt tilt pest answer 10 his reDly of O. ,
day Is his reply of a week ago. II will noY
be well to allow this immense fund to rel
main in his hands for an indefinite period
Furthermore. it has been contended tina +
TINS estate Is rot seVerable asset and that
a portion of it cannot be set aside for the
benefit of the secured creditors that il
Will entangle matters more, and similar
allegations. l claim the contrary of every
proposition is true, that this is severable
and that If the trust funds are set aside
! Tor the benefit of the lenors, the matter
viii be greatly simplified. The interest of
these lienOrs is in fact a trust on the es-
tate"
The Unsecured Creditors.
William F. Mattingy. representing sev-
eral unsecured creditors addressed the
court, citing Mr.. Waggaman's answer and
emphasizing the fact that the funds now held
by Mr.. Waggaman are not in any imme-
date danger.
Mr. Waggaman denies that these funds
are in danger" said Mr.. MattingIy, and
nothing has been introduced in this court
TO prove the contrary. If this Is so, then
there can be no reason for the appointment
either of receiver in equity or trustee in
bankruptcy.
ut is a matter of common knowledge in
law. that a receiver is appointed only when
it is absolutely necessary to protect the
estate. 1t has not been shown that this
necessity exists. 1t has been said that it
may exist but this court surely is not
going to take cognizance of contingency
yet to arrive. The rule. If the court please.
is to appoint receiver when this con-
tngency actually arrives, and not in an
ticipatiOn.'
Interest of the Lienors.
Attorney C. II. Merillat representing GER
tain lienors. made a strong plea in behalf
of the appointment of trustee for such of
the funds as he could trace for his clients,
and Incidentally argued for the severance
of the estate to the disadvantage of the gen
eral creditors. Mr.. Merillat declared that
Mr.. Waggaman had not kept faith with
certain of his clients.
81 do not say that Mr.. Waggaman was
consciously unfaithful.' explained Mr.. Mer-
illat, but he was nevertheless unfaithful.
My clients appear to have intrusted to Mr..
Waggaman certain moneys for investment.
with the expressed understanding that the
security to be mortgages upon property
in which Mr.. Waggaman had no pecuniary
interest.
at further appears that such security was
given at first. but that later, when a por-
ton of the Indebtedness had been repaid to
other parties holding the same property as
security. an Endorsement was placed upon
the notes of my clients transferring the
security for their money to property con-
| tanned in this famous list No. L. which is
all in the name of Mr. Waggaman.
This transfer, made without the knowl-
edge consent of my clients, constitutes
| a breach of trust, and in view of this post
| tion / ask the removal of Mr. Waggaman
as trustee and the appointment by the
court of another trustee The money of
my clients has gone into specific property,
| through specific channels and a new trus-
| tee should be appointed for such of the
| funds as l can trace
Claims Fund is in Danger
Miss Belva Lockwood appeared In behalf
/ of other lienors. She claimed the fund Is
| in great danger, and that il Mr.. wagga-
man has changed the securities and shifted
the notes heretofore there is nothing to
prevent his doing so hereafter. In demand
ing a new trustee and the removal Of Mr..
Waggaman she said that If trustee dies
a new one is named by the court; If he is
adjudged insane a new one Is named, or II
he is declared incompetent a new one is
named Then she declared insolvency was
proof of incompetency, and therefore there
should be no hesitancy In removing Mr..
Waggaman-
Mr.. w. Gwinn Gardiner cOntended that
it was claimed the assets were in the
neighborhood of $1.2OO0O0 to meet the
claims Of the lienors. which aggregated
equally as much. He then facetiously re-
marked that when the Henors had all
been paid he was willing the general