Evening star. [volume] (Washington, D.C.) 1854-1972, 1904-09-10
ANSWER TO PETITION
Catholic University Files
Paper in Waggaman Case.
B BANKRUPTCY COURT
DENIES THE INSTITUTION WAS
PREFERRED IN TRUST DEED.
Petition Filed in Behalf of Columbia
National Bank for Appoint
ment of Receiver.
BANKRUPTCY COURT

| The Catholic University of-Amerca today,
| by Attorneys Hamilton & Colbert and
Charles j. Bonaparte. filed in the bank
ruptcy proceedings against Thomas Il.
Waggaman its answer to the first petition
in bankruptcy filed by the National Metro-
| poitan Bank and others to have Mr. Wag-
! gaman adjudged a bankrupt
The answer denies that the deed of trust
given to secure the university ss1G IGS 9S
was given by Mr.. Waggaman for the pur.
pose of preferring the university over other
creditors. and asks the court to dismiss tho
petition In bankruptcy on the ground that
the act of bankruptcy alleged in the petition
was not in fact such an act the law cons
templates.
Interest Had Been Paid.
The university in it's answer declares that
the sum of 1916, 96 of it's funds was de-
posted with Mr. Waggaman. who was its
treasurer. for investment and that the in
terest had been promptly paid. In the lat
ter part of 1903 Mr.. Waggaman was called
on to deliver the securities to the univer-
| sity. and In May, 1904. a special committee
| representing the university called on Mr..
Waggaman for the purpose of having him
give additional security for the funds in
trusted to him. AT this interview Mr..
Waggaman stated to the committee that
the securities were ample, and in answer to
Mr.. Michael Jenkins of Baltimore a mems
Der of the special committee, said that his
financial condition was excellent and his
assets would Overbalance all his liabilities
by 81 100000
When asked to the use made of the
| money received from the university, Mr..
Waggaman answered that nearly all had
been used in acquiring and developing SUBJ
urban property and in recent Improvement
IN Woodley Park. Mr.. Charles j. Bona
parte, member of the committee then
suggested that the title to property made
more valuable by the use of the university's
money should be vested a matter of good
conscience and equity in the university or
in some one who would hold title for It's
benefit, as the university was already he
thought, the equitable owner. To this Mr.
Waggaman objected only on the ground
that a conveyance or large trust as would
be necessary in this case, would have q
tendency to embarrass financially any busi.
ness man in Washington, and he asked Tina
| to consider the matter.
Mr.. Waggaman's Stipulation
Subsequently Mr.. Waggaman agreed to
give the trust, on condition that it be not
recorded until ninety days after July 13,
1904, claiming that within that period ha
would be able to pay off a large part, II
not all. his debts to the university. 1t was
agreed that the trust should be recorded
prior to the expiration of the ninety days
II by suits or otherwise Mr.. Waggaman'0
financial condition should be impaired
Waggaman and Ridout as trustees for the
benefit of Mr.. Waggaman and other eaui-
table owners, 1t was stated, and he agreed
to secure the consent of the other equitable
owners. although the trustees were enl-
powered to execute the trust without the
assent of the parties in interest.
The respondent declares that it received
the trust as an additional security for its
debt without any notice, anticipation or
knowledge of Mr.. Waggaman's financial
embarrassment or of impending insolvency
or bankrupt proceedings to be had against
him, but with the positive assurance OF
said Waggaman that over mis- liabilities hia
estate was worth 81 100000; and respondent
denies that the trust was transfer on the
part of Waggaman, while insolvent, of any
portion of his property to one or more credt
itors with intent te>prefer such creditors.
Respectfully submitting that no act 81
bankruptcy other than this conveyance Id
alleged by the petitioning banks, the ans
swer declares, the bankruptcy proceedinga
should be dismissed
The answer of the university is sworn
to by Cardinal Gibbons, chancellor of tha
university. and has attached to it a sworn
statement of Mr.. Michael Jenkins of Balti-
more as to the purport of the converSa-
tions had with Mr. Waggaman.
The attorneys will submit the answer "a
Justice Anderson Monday next, at which,
time arguments will also be heard on the
petition for a receiver filed in the second
bankruptcy proceedings.
Columbia Banks Petition.
Shortly after the filing of the university's
answer the Columbia National Bank, by
Attorneys B. F. Leighton, ]. ]. Darllngtons
H. w. Sohon. C. C. James and Joseph B. Sul-
livan, filed petition for the appointment
of receiver in the third case, which was
filed late yesterday afternoon.
The petition declares that appointment Of
a receiver Immediately is an absolute neces.
sity, because in the conduct of his busf-
ness Mr.. Waggaman handled large sums OF
money belonging to persons for whose prop
erty he was the agent: that he was also
owner of large interests of real estate from
which he derived large revenue, and that
large sums are now payable for rent front
properties and as interest on notes in Mr..
Waggaman's custody. and that some ten
ants refuse to pay rent under present con-
ditions, and as a consequence great loss
will ensue unless some one with the author
ity of the court be appointed to colie ect
re nts and other moneys and hold them until
the appointment of trustee In bankruptcy
Legal Complications Discussed.
The legal complication in which the Wags
gaman proceedings appear to be is giving
concern to the attorneys in the case and
the members of the bar generally. Should
the court accept the contention of the
Catholic University. as Shown by its ans
wer filed today, and dismiss the first petit
ton in bankruptcy :iIed by the three local
banks, 1t is suggested by some attorneys
that adjudication would probably be had
in the third petition filed, yesterday, by un-
secured creditors, the petition of M,
Agnes Gardner, held to be the second I'm
the series. is made by secured creditor,
who under the law may not force involun.
tary proceedings in bankruptcy.
The contention of the attorneys in the
Gardiner petition is that while their claims
are secured on 'list No. IL the securities
will not pay the debts charged against them
in full. and this failure will leave the cred-
itors, with an unsecured balance which they
claim amounts to So, 500.
1t is suggested that Mr.. Waggaman, In his
answer to the rule in that case. which he
will file Monday, will deny that fist No.
T. cannot take care. of its liabilities in full
and such denial might. 1t is said throw that
case out of court In which event the third
case. would probably be relied ON for the
adjudication.
Some attorneys have suggested that Mr..
Waggaman's lawyer could probably un.
ravel the tangle by filing on behalf Of
Mr.. Waggaman voluntary petition iu
bankruptcy.