Evening star. [volume] (Washington, D.C.) 1854-1972, 1904-09-12
Proceedings Today in the
Waggaman Case.
IN BANKRUPTCY COURT
CONTENTION OF COUNSEL FOR I'M
MEDIATE ACTION.
Counsel for Catholic University Heard
in Response Until
10 O'Clock Tomorrow.

i
Waggaman began in earnest this morning
and continued until 8 o'clock this afternoon
when an adjournment was taken until 10
o'clock tomorrow morning. The answer Of
the Catholic University of America to the
allegation that Mr.. Waggaman committed
an act of bankruptcy in transferring the
deed of trust for approximately 500. coo was
filed and promptly attacked by Mr.. Will
lam F. Mattingly Of counsel for several Of
the petitioning national banks
At 2:3O Mr.. Charles J. Bonaparte of Bal
timore, one of the attorneys for the univer-
sity. commenced his reply to the argument
of Mr. Mattingly, and briefly disclosed what
was believed to be the sum and substance
of the position taken by the institution.
Mr. Bonaparte declared that while Mr..
Matt1ngly had stated that Mr.. Waggaman
was bankrupt at the time the petition was
filed. and is now a bankrupt he did not
charge that Mr.. Waggaman was insolvent
when the deed of trust was executed. This,
according to Mr.. B0naparte, is the all-1m-
portant question. Attorneys interested in
the case expect decision from Justice An
dersOn tomorrow.
Asks for Adjudication in Bankruptcy.
When court convened at II o'clock this
morning Attorney VIM. F. Mattingly i'm
mediately asked for an adjudication in
bankruptcy. In this regard he requested
the attorneys for the Catholic University to
read their answer to the allegation that
Mr.. Waggaman intended to prefer the uni
versity among his creditors by the transfer
of the now famous deed of trust.
Mr.. Hamilton Of counsel for the institu-
ton responded. and read the document
specifically denying that Mr.. Waggaman
committed an act of bankruptcy in making
the transfer Of the deed. and further deny
ing that there was any intent Of preference
in the transaction.
The answer contained about thousand
words and was followed by the affidavits
of Cardinal Gibbons and one of the off,
GERS Of the university. which, Mr. Hamil-
ton explained, were intended to prove alb
sence of intent to prefer. In view of this
showing Mr.. Hamilton requested that the
petition be dismissed.
Then followed Mr.. Mattingly's discourse
on the law applicable to the case. his crit-
cal analysis of the answer of the Catholic
University and of the answer of Mr.. Wag-
gaman.
Mr.. Mattingly's Contention.
Before addressing ourselves to the al
legged facts set out in this answer. let US
understand the law" said Mr.. Mattingly.
1--WE have listened to denial of Mr.. Wag-
gaman's intent to prefer this institution
among his creditors. The law says If the
effect of a deed Is to give preference 1T is
a preference and the intent is immaterlaL
If Mr. Waggaman, while insolvent. execut-
ed this deed. the law conclusively presumes
it was preference. regardless of what his
intent is declared to be and regard
less of what the officers of the Catholic
University thought 1t was. The law Is as
plain as A B c in this regard.
II admit that deed, even though 1t be
declared preference would retain its
validity as far as these proceedings are con-
cerned. The validity of the deed to the
Catholic University must be attacked later
by the trustee in bankruptcy. Then, If your
honor please, the only question 10 be de-
termined-the vital question in this entire
controversies. Was Mr.. Waggaman In
solvent? If SO. the law is specific and the
remedy is obvious"
Mr. Mattingly then quoted several author
tiles and read extracts from the law to sup
port his contentious.
He endeavored to establish the point Of
law that the intent of Mr.. Waggamans
transfer was not to be considered, except
that 1t should be presumed by the effect.
ANY transfer Of property by an insolvent,
direct or indirect, Is a preference de-
ter If the motive is commendable or other
wise.
Mr. Mattingly then took up the answer
of the Catholic University and the two
answers of Mr.. Waggaman. He declared
that Mr.. Waggaman in his original answer
does not deny his insolvency. but merely
saws he thinks he will be able to pay his
debts IL his estate be properly handled
I'm his second or supplemental answer. "
continued Mr.. Matttngly, he admits m
solvency and expresses Willingness TO De
adjudged bankrupt. l do not claim MT.
Waggaman can be adjudicated bankrupt.
because of the admission made in this
amended answer, because the admission
was not contained in the original petition
of the creditors. But do ask the court to
consider MIR. Waggaman'S first answer ana
the answer Of the Catholic University filed
today, to determine If either or both are
sufficient to avoid adjudication in bank
ruptcy on grounds set forth in the original
petition of the creditors-namely prefer
ence of the university among creditors
The law says there must be bona
fide statement of fact in an answer In
these proceedings. and that insolvency
must either be expressly denied or adj
mitted, in the first instance.
The answers filed in this case do
neither the one nor the other. and plead
! their insufficiency." BY this time Mr.. Mat
tingly had consumed an hour and half.
and Justice Anderson announced recess
until Ills o'clock.
Purchase of Woodley Park.
After recess Mr.. Mattingly continued his
argument until 2:2O o'clock. during which
time he brought out that Woodley Park
was purchased by Mr.. Waggaman In 1887.
five years before he received any money
from the Catholic University, as Its treas
urer
This, Mr.. Mattingly said proved that the
money OF the institution Ql0 not go into
the acquisition of Woodley Park, upon
which property the large deed Of trust was
given. Counsel said some OF the UNIVERSE
tvs money may have gone to improve
ment, but was not used to acquire title.
and consequently could not invest any
right, title or interest in the property.
He characterized both answers Of MIR.
Waggaman and the Catholicc University
as Explanations which do not explain"
In closing he requested an adjudication In
bankruptcy.
Mr.. Bonaparte. for the Catholic Univer-
sity, then addressed the court and had not
concluded when the report closed. He de-
clared in substance that the answer Of the
university denied in the very words of the
petition the allegation which the petition
had to contain in order to give the court
jurisdiction.