FEDERAL REPORTER.
Tliis cross.billis, in effect,' a defense to the original bill. It seeks, as against Gregory, the plaintiff, to establish an equitable claim to one-half of one of the notes mentioned in the bill, and it also seeks to settle the conflicting claims between co-defendants, which, of itself, is a good ground for filing such bill. Story says: ..It also frequently happens, and particularly if any question arises between two defendants to a bill, that the court cannot make a complete decree without a cross-bill to bring every matter in dispute completely before the court."· Eq. Pl. § 392.
The case of Weaver v. Alter, 3 Woods, 152, is cited by counsel to the point that a cross-bill only designed to settle the controversy between codefendants is irregular. The doctrine of Weaver v. Alter is that, unless the settlement is necessary to a complete decree upon the case made by the original bill, a controversy between co-defendants to a bill in equity cannot form the subject-matter of a cross-bill. In that case the subjectmlttter brought forward in the cross-bill was entirely independent and distinct from the subject-matter of the original bill, which is not the case bere. Nor do I think the cross-bill is irregular in joining Butterfield as a party defendant, or in the relief it seeks against Swift. Butterfield was ordered to be made a party defendant in the original suit, and mltY stillltppeltr, while the relief asked for against Swift is proper to a determination of the whole controversy.. ,So far as the jurisdiction of the court has attached to the controversy and the parties, it is co-extensive with all the equities of the cause. The objection that a cross-bill will not lie because the defendant Pike is not within the jurisdiction of the court is untenable, because in the United Stntes courts, where a cross-bill, which is auxiliary to the original bill, is filed, substituted service may be had upon the attorney of record. Eckert v. Bauert, 4 Wash. C. C. 370; Ward v. Sebring, Id.472; Lowenatei'll v. Glidewell, 5 Dill. '325. .
and others v. t.
UNION PAC.
By. Co.
(Oitrc'Uit (JWII't, D. (Jolorado.
December 11, 1886.)
CARRIERS-OF Goo:Qs-LIEN FOR FREIGHT-RAILROAD PORTATION BIilYOND LINES - SPECIAL INSTRUCTIONS TO FIRST· CARRIER AS '1'0 FORWARDING.
9.
SAME-NoTiCE OF SPECUL INSTRUCTIONS.
PATTEN'
v.
UNION PAC. RY. CO.
691
At Law. Replevin. R. D. Thompson, for plaintiffs. Teller et Orahood, for defendants. BREWER, J. The facts in this case are these: Plaintiffs shipped from Kirksville, Ohio, to nenver, Colorado, a car-load of lumber. They delivered it to the Baltimore & Ohio Railroad Company, at Kirksville, for transportation by it to Chicago, with instructions to for. ward it by the Chicago & Alton and the Atchison, Topeka & Santa Fe lines. They had made contract arrangements with the latter company for speoial rates. Disregarding the instruotions, the Baltimore & Ohio Company delivered the carat Chicago, .in the usual oourse of business, to the Chicago, Rock Island & Paoific Company, which, in its turn, delivered it to the defendant, by whom it was finally brought to Denver. Defendant, having paid all prior charges for freight of the Ba.ltimore & Ohio and the Chicago, Rock Island & Pacific Com;' panies, claimed a lien for these charges, a8 well as for' its own. Plaintiffs declined to pay these charges, and brought this action of replevin. The contenfion of the plaintiffs is that the Baltimore & Ohio Company was a spe(lialagent, with limited powers, and that it,disregarded its instructions, and exceeded its authority; that the carriage by the'defendant company, as well as the prior carrier, the Chioago, Rock Island & Paoific,was without authority from and against the will of the owners, and, ,being thus unauthorized, created charge against the owners fd'r compensation,-no ,right to a lien. Th'e principalcase cited by the plaintiffs in support of this view that of Fitch v. Newberry, 1 Doug. (Mich.) 1, whioh unquestionably sustains their position. In a very elaborate and exhaustive opinion that court holds that company is only a special agent, with limited powers j that whoever deals with suoh agent is bound 'to take notice of the extent of his authority j and that if such agent, disregarding his instructions, delivers the goods to the wrong oarrier, the latter,although he carries them to the place of destination, does so at his own risk, is not the debtor of the owner, and has no claim for 'freight or lien updn the goods. I cannor think, underthepresent conditions of transportation business, the rule therein annouriced is the correct one. The true ruleis this: that a carrier, goods for transmission over his own line, and consigned to a place beyond, has the apparent anthority to forward the same to the plaoe or des'tination by any of the ordinary routes thereto, and that such second cartier, receiving the goods in the usual and ordinary course of business, without Iioticeof any special instructions to the first carrier, and transporting the goods to the place of destination, is entitled to demand the ordinary and reasonable freight therefor. The question evidently turns upon the anthorityof the first carrier, and whether the delivery to the second carrier is in pursuance of the apparent authority conferred upon the first. I am aware of the distinction that
no
.FEDERAL REPORTER.
has frequently been drawn between the case of a general and that of a special agent; that the former is presumed to have all the ordinary powers necessary for the accomplishment of the business intrusted to him, while the latter is one with limited and special powers; and the further rule that one dealing with a special agent is bound to take notice of the exact powers conferred. But this general rule has been of late years subject to considerable modification. The rule as recognized to-day is well stated in 1 Pars. Cont. 44, as follows: , "It may, indeed, be said that every agency is, under one aspect, special, and under another; general. No· agent has authority to be, in all respects, and for all purposes, an alter ego of his principal, binding him. by wlJatever the agent may do in reference to any subject whatever; and therefore the agency must be speCial, so far as it is limited by place or time, or the extent or characterof the work to be done. On the other hand, every agency must be so far general that it must cover, not merelythe precise thing to be done, but whatever usually and rationally belongs to the doing of it. Of late years, courts seem more disposed to regard this distinction, and the rules founded upon it, 1I8 altogether subordinate to that principle which may be called the foundation of the law of agency; namely, that a principal is responsible, either when he has given to an agent sufficient authority, or when he justifies a party'dealing with bis agent in believing that he has given to this agent this authority. "
It is sometimes expressed in another way ; and that is that the principal is bound by the acts of his agent, done within the apparent scope of the authority confened; and that, whether he be technically either a general or special agent. I think thaf rule determines this case, and that a common carrier, having goods in its possession consigned to a point beyond its own line, is clothed with' the apparent authority to forward those goods by any of the ordinary and usual rontes. In Whitney v. Beckford, 105 Mass. 271, the court uses this language: "But when the freight is earned in good faith, Under a contract of transportation made with an agent of the owner, who, according to the usages of the business, is clothed with apparent authority by its principal, then th& charges fOI· freight will constitute a valid lien upon the property, although the agent, by an accidentaJ. or intentional departure from his instructions, sends the goods by a route not intended, or to the wrong place. "
Any other rule would work a serious. hinderance to the immensetransportation business of to-day, while this rule protects both carrier and owner. If the first carrier his instructions, by which loss results to the owner, such carrier is liaWe to an action of damages, and, as i,8 proper, the wrong.doer suffers the loss. At the same time, the second and innocent carrier, having done the work of transportation. teceives, as it ought, th,e just freight therefor. The first carrier· is the agent of the . If pe has, done wrong, why should not the.prUlCipal be remitted .to his, action against his wrong. doing agent, and why should the burden of litigation be cast upon the innocent second carrier? Plaintiffs say that, in this case, they
IN RE PEASE.
593
would have to go to Ohio to maintain their action; but, if they select an agent in Ohio, and that agent does wrong, why should not they go to Ohio to punish him for his wrong. And why should the defendant, innocent of any wrong, be forced to go thither to litigate. with their agent? And why should the owner, who has hadbis goods carried to the place of destination, be permitted to take them from the carrier without any for such transportation? Is the route by which the freight.istransported a matter so vital to him that, carried over the" wrong route, he is entitled equitably to the possession of his goods free from anybtirden of freight? One other matter requires notice. That the Chicago, Rock Island & PacificCompany received this car at Chicago, in good faith, in the usual course of business, and without actual notice of the special instr.uctions to the Baltimore &. Ohio Company, is shown by the testimony beyond dispute. The lumber was in fact loaded .in a car belonging to the Chicago & Alton Railroad, and so marked. It is insisted by the plaintiffs that the use of such a car was implied notice to. the Chicago, Rock Island& Pacific Company that the car was to be shipped over the Chicago & Alton road. I do not think this is true. Courts must be presumed to be familiar with the ordinary facts of transportation; and qne of those facts is that the freight cars of each road are constantly used by other roads. Everywhere one goes he sees cars belonging to multitudes of railroad corporations in use upon roads other than their own. The frequency of this is such that it seems to me no implication can fairly be drawn from the fact that the goods are loaded in a car belonging to one road that special instructions have been given to ship over that l·oad. These being the only questions in the case, judgment must be entered in favor of the defendant, for a return of the property, or, upon failure to do that, for the amount of the freight charges, both its own and those of the prior carriers.
In 1.
1'6 PEASE.
(DiBtrict Oourt. No D. Illinois. January 4,1887.)
U. S. § 5081. A claim allowed against a bankrupt's estate can be re-examined and expunged, under rule 34 of rules in bankruptcy, on the application of the bankmp.t as well as that of the assignee or creditor, although the rule onlynamel the latter; Rev. St. U.S.§ 5081, expressly providing that any claim maybe reexamined on application of the assignee, any creditor, or the bankrupt. 2. S..u m-NOTICE OF REGISTER'S DECISION. ,A register in bankruptcy need not give notice to either party of his findings and decision on a proceeding to re-examine and expunge a claim. 8. SAMl!l-REVIEW OF REGISTER'S DECISION. The last clause of bankruptc'y' rule 34, relatingto proceedings for proof of debts before the register,. provIding that" aU oroers thus made by the register BANXltUPTOY-ExPUNGm-G Cum-RuLE 34-REV. ST.
v.29F.no.12-38
may be reviewed by the oourt on' a speoial petition; and, upon showing satisfactory oause for suoh ",gives to a part, not satisfied with the action of the register, in proceedIngs for the re-exammation of a.olaim, the right to review it by petition, although no objection was made before the tegister, and Il.O issue was made up oourt, as is elsewhere provided in the rule may be done in prooeedings for re-examination.
4.
SAXE-FINDING-MERGER QF CLAIH.
In proceedings to expunge the proof of a claim made against a bankrupt's estate, held, that the evidence showed that, although there was originally an account due the claimant from a firm of whioh the bankrupt was a member, yet that the claim was merged ill acoeptances afterwards given. by that firm and its successors, indiscriminately, which acceptances were eitner paid, or were outstanding in the hands of other parties, and that the claim should therefore be expunged.
.
G.
SAKE-PURCHASE OF CLAIH-ESTOPPEL OF BAliKRUP'l'-PRoHlSSORY NOTE.
A bankrupt is not estopped from to have aclahn proved against his estate expunged, because he included it In his schedule of debts, if it was described in the schedule as evidenced by a promissory note. but was proved as a sum. due upon an open account, as against a purchaser of the claim without the note.
8.' 8AHE-P!mClUSERWARNED. No estoppel can arise in favor of the purchaser of a claim, against a bankrupt's estate, Included by the bankrupt in his schedule of debts, who is informed by the bankrupt, before purchasing, that the assignor has no valid claim agamst the estate.· . 7. RELEASE AND DISCHARGE-JOIN1l'DEB'l1ORS. One of several joint debtors is, under the Illinois law, disoharged by action brought and judgment obtained against the other withoUt joining him.
In Cook « Upton and M. W. Jilullet;for the Dent « Black,for claimant. . BLODGETT, J. 'J,'his is a proceeding to exp unge the of J. W. Gregg for $21,000, proven againstthlil bankrupt's estate, and allowedby the register. Pease was adjudged bankrupt, Aug\lst 29, 1878, on his own petition, and his assignee appointed October 7.,1878.' Among the indebtedness scheduled by the bankruptis an indebtednessof J. W. Gregg for $13,000, on a promissory note, with a memorandum that it was an indebtedness of the firm of T. S. Dobbins & Co., of which firm bankrupt was a member. On January 29, 1883, Gregg proved the claim now in controversy, against the estate, as a balance of account due for work and labor as a contractor on the Chicago & Pacific Railroad, upon a contract with T. S. Dobbins & Co., of which firm the bankrupt was a me,mber. Soon 'after his claim was thus proven and allowed, jt wael assigned to William' Ritchie, .who has since appeared andc1aiIhs to be subrogated to Gregg's place as a creditor of the estate. In fact, the shows that Ritchie had made It conditional purchase of the claim before it was proven.. At some time after this claim was proven, but the date is not disclosed in the record, the bankrupt filed' a petition for ex'punging this claim, which it is stated, and I assume it is true. was lost or mislaid by the register; and on November 28, 1885, an amended petition was filed by the.bankrupt for the same purpose, on whichvoluniinona proofs were taken, and the register, upon such proof, has found
IN BE PEASE.
595
that this claim should be wholly disallowed and expunged, and so ordered. The creditor has filed exceptions to the register's finding, and a peti..: tion for the review of the register's action in the matter,in which he states his reasons why the finding of the register should be reviewed and reversed. 1. That no authority is given the bankrupt to apply for the expurgation of a claim proven against his estate. It is true that rule 34 in bankruptcy states "that when the assignee, or any creditor, shall desire a re-examination of any claim filed against the bankrupt estate," etc., proceedings shall be had to that endj but section 22 of the original bankrupt act (now section 5081, Rev. St.) expressly provides that any claim maybe re-examined on application of the assignee, any creditor, or the bwnkrupt j and the practice of this court has been to re-examine and expunge under rule 34, on application of the bankrupt as well as that of the assignee or a creditor. This also seems to have been the prac. ticeelsewhere. In re Patterson, 1 N. B. R. 100; In re Lathrop, 3 N. B. R.413. 2. That the report and finding of the register was filed without notice to the creditor, or his attorneys. There is no requirement, either in the bankrupt law or the rulesuuder it, that the registershall give notice to either party of his findings and decision on a proceeding to re-examine and expunge a claim. The register is required, on a petition peing filed for the re-examination of a claim, to fix the time for hearing the petition, of which due notice shall be given to the creditor, which notice it will be presumed he gave from a memorandum by the register on the petition, and the subsequent action of the parties creditor and bankrupt in proceeding to take proofs; but there is no provision for notice to be given the creditor of the register's .final conclusion or action in the proceeding. That becomes. a matter of record, of which a creditor who has proven a claim is bound to take notice, the same as he would, if he were a party tl,> a suit, of the final action or judgment.of the court on such suit. In re Paddock, 6 N. B. R. 132j Inre Kyler, 2 N. B: R. 650. While there does not appear to have been a close adherence to technicalities in the proceedings before the register in the re-examination of the claim, it does sufficiently appear that the parties to this contention appeared before him, took voluminous proofs, and filed briefs, and .discussed at length the law and evidence involved in the proceeding. This testimony, with an abstract of it and briefs of counsel, was returned into court. with the register's report of his findings, from which it sufficiently appears, as it seems to me, that this creditor has had all the notice to which he was entitled under the law and rules in bankruptcy. It is contended on the part of the bankrupt that the creditor cannot now be heard to question the action of the register, because no objection was. taken to the proceedings before the register, and no issue made up at th& request of. the parties, and certified intocourtj but my interpretation of rule 34istbat a petition for a review of the register's action may be filed even where the without objection, proceeds to hear the proof and,
596
adjudge upon the claim. The last clause olthe rule reads as follows: II All orders thus made by the register may be reviewed by the court on a special petition, and upon showing satisfactory cause for such review." This clause evidently does not apply to the tion of claims where the register simply takes the proof, requires an issue to be made up, and, at the request or on the objection of either party, certifies the proofs and issue to the court; but it gives either party not satisfied with the action of the register the right to a review of the register's action by a petition. , 3. That the register has, without sufficient proof, found thatthera was no indebtedness due from the brankrupt to Gregg at the time this claim was proven. This involves a consideration of the testimony taken in the the register, and which is fully discussed by the register in his report. I have read this proof, and the briefs· of counsel analyzing and diScussing it, and am of opinion that the register's finding is abundantly supported by the preponderance of proof. The bankrupt was a member of the firm of T. S. Dobbins & Co., a firm formed, in 1870 or 1871, for the purpose of constructing the Chicago & Pacific Railroad, or a portion ofit, and was dissolved July 1, 1874, by the limitation of its articles of copartnership; In August, 1873,. Gregg and his partner,Mnnger, took a contract for grading the second division of the railroad, which extended from Elgin to Byron, in Ogle county, in this state. When the firm dissolved in July, 1874, Dobbins assumed the indebtedness' of the firm, and continued the work in which the firm had been engaged, and Gregg completed his grading contract in November, 1874. At or about the time he so finished the grading, there was due Gregg a balance of about $15,000, as shown by the books of T. S. Dobbins. When the firm Of T. S. Dobbins & Co. dissolved, the first of July, 1874, their books showed a balance due Gregg of about $21,000; but this account had been carried on to the books of T. S. Dobbins, and on the seventh of November, 1874, had been reduced to about $15,00Q. The question is whether this balance proven by Gregg, which probably was intended to represent the balance of July 1, 1874, has ever been settled, or whether it still remained due to Gregg at the time the claim was proven in bankruptcy. T. S. Dobbins & Co. dissolved July 1, 1874, as I said, by the limitations of their articles of copartnership. Dobbins assumed the debts of the concern, and continued the business alone, until November 7, 1874, during which time Gregg was going on with and substantially completing the grading contract, when a new firm, consisting of T. S. Dobbins, JohnS. Wilcox, and George S. Bowen, was formed under the firm name of Dobbins & Co.; the new firm assuming the indebtedness of the old firm of T. S. Dobbins & Co., and of T. S. Dobbins, and continuing the same work undertaken by T. S. Dobbins & Co. Gregg's account on the books of T. S.Dobbins & Co. was transferred to the books of T. S. Dobbins on the dissolution of the firm of T.S. Dobbins & Co., July 1, 1874, and on the formation of the new firm of Dobbins
\,
597
&: Co. the balance then due Gregg was carried on to the books of the new firm, this balance being at that time about $15,000. The proof also shows that Gregg, in November, 1874, took a contract from Dobbins & Co. to lay the iron on the second division of the road from Elgin to Byron, which he completed some time in the spring of 1875; and that for the balance due him on the grading contract, and for what was earned on the ironing contract, Gregg, before the first day of June, 1876, received acceptances of T. S. Dobbins & Co., and Dobbins &: Co. Baas to fully balance the account,-that is, drafts drawn by Gregg, and accepted by T. S. Dobbins &: Co., or Dobbins individually, or Dobbins & Co., were put in circulation representing the entire amount due Gregg on these contructs;and the proof also shows that all these acceptances, except drafts aggregating about $12;000, had been paid prior to July 1, 1876, and that most of these unpaid drafts were drawn on and accepted by the firm of Dobbins & Co., of which the bankrupt, Pease, was never a member, and that such drafts are still outstanding and unpaid, arid not held by Gregg, or by Ritchie, who claims to be Gregg's assignee of this claim. There are contradictions between Gregg and Barnhart, called in support of this claim, and the witness Ogden, called in behalf of the bankrupt,-Ogden having been the book-keeper ofT. S. Dobbins & Co., and of Dobbins, and Dobbins' & Co., and was the man who issued these acceptances and balanced the books; but his testimony is so direct, clear, and intrinsically probable as, in my estimation, to far outweigh that of Gregg, ahdhis book-keeper, Barnhart, who testified without books, and from memory only,-Gregg's books having been destroyed in 1875, soon after he completed his contract. The fact that the proof shows, especially the deposition of Bowen, that many of the drafts drawn on account .of the grading contract were drawn on and accepted by Dobbins & Co., is very convincing, aside from the testimony of Ogden that Gregg had made a novation with Dobbins & Co., by which he had accepted them as his debtors for whatever balance might be due or earned by him on the old grading contract. 'The proof to which I have referred shows a series of drafts drawn on account of grading by Gregg on Dobbins & Co., which must have been for payment of this old grading account, and the proof also shows that the balance due on that account was carried on to the books of Dobbins & Co., and, in fact, that neither Dobbins & Co., nor T. S. Dobbins, nor T. S. Dobbins & Co., were ever indebted to Gregg, except on account of this grading and ironing contract; and italso shows that this account is balanced by the drafts drawn against it and .accepted, nlainly, by Dobbins & Co. The proof, I think, is so convincing as tu leave no reasonable doubt that the amounts earned tmder the grading contract, and under the ironing contract, were carried along on the books of Dobbins & Co. as one account, and that this account was fully balanced by acceptances, which have been either fully paid, or are now outstanding, and are not held by either Gregg or Ritchie. Gregg took no steps to prove any claim against the bankrupt's estate -until Ritchie, the present owner of the claim, finding, as it would seem
598
REPORTER.
;'
from the proof, apd alsp from papers in the files in this case, ,that his interest might be indirectIy,if notdirectly, subserved, if he should appear as a creditor of Pease, opened a correspondence with Gregg, and proposed to purchase his claim when it should be provell,to the satisfaction of the register. The ordinary ex parte proof was made, and Ritchie paid Pease upwards of $2,000 for the claim. Gregg, therefore, stands, where he must be expected to support this claim, which was established by his oat"q, and must be treated as a witness directly interested in the result of the case,. ' ,Barnhart only testified as to what Gregg's books showed in 1875, as he remembers them, which is extremely unreliable testimony, while Ogden testifies from an examinatIon of his books, with the adyantage of having his memory quickened and refreshed by such examination. Ogden is also corroborated ,by the course of business. Gregg drew, in addition to cash payments which he received from time to time, drMts in favor of his subcontractors: and others, which were accepted, payable in 80, 60, or 90 days after date, and these drafts appear to have been accepted by whatever firm was then in charge of this railroad work as principal contractor. This is so natural, and so much in the regular course of business, as to be probablei and although Gregg testifies that he knew nothing in regard to these changes in the firm with which he was dealing, yet I think it hardly possible that he did not know that the firm of T. S. Dobbins & Co. did not include the same persons who, composed the firm of Dobbins & as the proof shows that he made a written contract for laying the iron with Dobbins & Co., and drew drafts on such firm on account of grading. Also it is improbable that so large a balance as $21,000 would have stood unadjusted in Gregg's favor upon the books of this firm, from early in 1875 to the time, this claim was proven. It is much probable that these drafts or acceptances, or some evidence of indebtedness, would have been given to balance this account· .1t:a.ppears that Dobbins & Co. went into bankruptcy shortly before and scheduled among their de}:>ts a balance of$18,OOO, due Gregg, . as stl1:ted in their schedule, in notes. Pease, when he filed his schedule, not having access to the books of T. S. Dobbins & Co., and assuming that he might be in some way liable as a member of that firm, tqok the item in question from their schedule, and scheduled himself as indebted,/as a member of the firm of T. S. Dobbinjl & Co.· to the amount of on a promissory note.. Dobbins & Co.'s schedule, having pro,bably been made from their books, would naturally state the amount of the indebtedness on these old contracts with Gregg, but might err Il8 to. form of the indebtedness, whether it was evidenced by notes or aocep.tances or drafts.. .'. . ' is also urged that the bankrupt is liable upon certain drafts, a,mountthe aggregate to over accepted in favor of one Ryan by the.firm of T. S. Dobbins & Co., ofwhich he was a member; but, if the . bankrupt was ever liable upon.these acceptances, I think there can be no doubt that he has. been relieved by the action of Ryan, as Ryan has brought suit and obtained judgment upon the acceptances against Dop- .
,IN REPEASE.
599
bins, Wilcox, and Bowen, and did not join the bankrupt, or make him a party to the suit, thereby, in the light of the Illinois' authorities, releasing the bankrupt from liability on these acceptances, even if he was ever liable thereon. Wann v. McNulty, 2 Gilman, 355; ThornpsCYn v. J!immert, 15 Ill. 415; MitcheU v. Brewster, 28 lli. 163; Peoplev. Harrison, 82 lli. 84. it is also cl{timed that a draft of $500 was given as a guaranty draft to indemnify Munger, who was at one time a. partner of Gregg in this grading contract; that when Munger and Gregg dissolved partnership there were some small unsettled claims against the firm of Munger & Gregg, and, as Gregg assumed the business and the liabilities of the firm, this draft of $500 was drawn and given to Munger to indemnify him against possible liability upon some small outstanding claims against the firm. There is no proof that Munger or Gregg has ever returned this draft; ar that it has in any way been settled or adjusted; and it would clearly seem, from the proof, that it was Gregg's business to ha.ve obtained this draft from Munger, and surrendered it for cancellation to the firm that issued it, before he can claim a credit for it. It is possible, from the proof, that, upon an adjustment between Gregg ..and some of these firms, a small balance might be found due him for extra work, or on this guaranty draft, if it has subserved its purpose, and can be produced and canceled ; but this was proven as an omnib'UB claim 'for the full balance claimed to be due in November, 1874, and not for any small balance which might be found due on, a careful accounting and rectification of all mistakes and debits and credits in the dealings of the firms, and I understand this creditor's position to be that the whole of that claim as proven, or nothing, is due. Yet, if this position should ,be, changed, I do not see how, as the proof stands, anything can be found due on thisclaitn. The proof is, as I think, convincing and conclusive that the entire balance due Gregg for this railroad work is represented in outstanding drafts and acceptances by either T. S. Dobbins & Co., or Dobbins, individually, while he was carrying on the business alone, between July 1 and November 7, 1874, or Dobbins & Co.; and none of these drafts are produced by Gregg, nor does he pretend that he owns them. If they have not been paid, the indebtedness they repre&ent has been merged in them, and is due to whoever holds them, and not to Gregg. It therefore seems to me that the register was fully justified in determining that Gregg was not a creditor of Pease at the time this claim was filed and proven. The further point made in the petition is that, inasmuch as this is a petition on the part of the bankrupt himself to expunge this claim, he is estopped by his schedule from denying ita validity as against Gregg, or Ritchie, Gregg's assignee, because he has scheduled a claim in favor of &13,000, and verified his schedule by his oath, and that Rit.chie has been induced to pay value for the claim becauee of this schedule and verification. schedule states expres.aly that the indebtedness is evidenced by a promissory note given in 1875 on account of debts of T. S. Dobbins & Co. Read, according to its legal effect, it is a statement
600
that, it! 1875, the firm of T. S. Dobbins & Co. gave J. W. Gregg a promissory note for $13,000. Waiving the question whether it is possible to apply the doctrine of estoppel to a case in bankruptcy, where the bankrupt in filing his schedule is acting for his creditors as well as himself, it is sufficient to say that the claim scheduled by the bankrupt is not the one proved by the alleged creditor. The claim is not upon notes, ora note, and no notes are produced, and the record is barren of proof that Gregg held any notes or negotiable securities such as this schedule represents evidenced this claim. It is probable from the proof that this balance of indebtedness described in the schedule of Dobbins & Co., copied by Pease from that schedule, was evidenced by drafts and acceptances, and not by notes, although this fact is not conclusively proven. That is, it is quite probable from the evidence that, when Dobbins & Co. made out their schedules, they knew that there was an unpaid liability of between twelve and thirteen thousand dollars on account of this old indebtedness of Gregg, and it was accordingly scheduled as due on the notes, and Pease copied it into his schedule, when, in fact, it was due on acceptances. But enough appears upon the face of the schedule to put Ritchie, the purchaser of this claim, upon inquiry; and if Gregg could not produce the note,or comtnercial paper of some kind, he had no right to deal with him as the owner of the claim scheduled. A debtor, after the lapse of some time, and who has never personally transacted the business out of which his liability has arisen, and has not kept the books, might naturally enough make a mistake as to whether the liability was evidenced by notes, drafts, or acceptances; but 8 person negotiating for the purchase of a claim, which 'the bankrupt has scheduled as evidenced by note, is put upon notice that the note should be produced or accounted for, and, if he buys the claim without the note, he takes his chance that the claim, if it exists, will belong to the holder of the note, and not to the original payee in whose name it is scheduled. The proof also shows that, while Ritchie was negotiating for this claim, he was told by the bankrupt that Gregg had no claim against the estate, or against T. S. Dobbins & Co., which is, of itself, a conclusive answer to the estoppel proof and argument. In the light of these facts, therefore, I do not think that Pease is estopped to contest this claim as proven. The petition for review and the creditor's exceptions to the register's report are therefore dismissed for want of equity, and costs adjudged against the petitioner. Since this petition for review was filed, the petitioner has taken proof, in support of this petition, especially bearing upon the question of estoppel. I incline to the opinion that when a petition for review is filed by a creditor, or any other person, under the last clause of rule 34, no new . testimony can betaken in the case, as the review must be upon therecord as made by the register, and not on new proof, unless, perhaps, the court should see fit to send the case back to the register for further proof; but,asboth parties have taken proof on this petition, I have looked into and considered it, and do not deem it necessary to exclude this proof from the record.
THE HENRY WARNER. THE HENRY W ARNER. 1 (Di8fJrict Court, D. Massachusetts. December 11, 1886.)
601
t.
COLLISION-VESSEL AT ANCHOR-DANGEROUS ANCHORAGE-FAILURE TO KEEP LOOKOUT.
When a vessel is at anchor in a place where other vessels are frequently passhlg, and where navigation is difficult and dangerous, special care and :vigilance, in order to give warning of her presence to passing vessels, is reo quired. She mustllave agood lookout, and an anchor light of the regulation pattern lit and burning; to have a watch on deck is not sufficient, if there be no one on lookout at the time of the collision. One who advances money to pay debts which are liens, and who takes an assignment of the claims, is not entitled to look to the fund the sale of the vessel, after he has been actually repaid, or if circumstahces exist from which payment must be presumed.
2.:MARITDlE LIEN-ADvANCES TO PAY WAGES AND STEVEDORES' BILLS-AsSIGN MENT OF CLAIMS TO PAYEE.
Collision. Libel in rem by the owners of one of the colliding vessels and the underwriters of her cargo against the other vessel and her freight. L. S. Dabney and H. Wheeler, for the Ibis. C. T.Rus8ell and W. E. Russell, for the Henry Warner. W. W; Dodge, for the Insurance Companies. NEIl'lON, J. This case was a libel by the owners of the bark Ibis, against the barquentine Henry Warner and her freight, for collision. The China Mutual Insurance Company and the Atlantic Mutual Insurance Company, who were the underwriters of the cargo of the Ibis, consisting of 1,299 bales of cotton, lost in the collision, and who have paid the loss, also intervt>ned for their own interest, and prayed that the damages decreed against the Henry Warner should be paid to them. The collision occurred on the evening of January '6, 1886, on the Nantucket shoals, about 'half way, and nearly on a direct line, between the Handkerchief and the Shovelful light-ships. The Ibis was on a voyage from Galveston to Boston. Off Holmes Hole she took a pilot, and, 'Continuing on her course, rounded the Handkerchief light-ship between 4 :30 and 5 P. M. At 5:30 P. M., when half way between that·light-ship and the Shovelful light-ship, she dropped her anchor, furled her sails, and set an anchor light in the starboard fore rigging. She continued lying at anchor in that position until the collisiotl. The Warner was on a voyage from Buenos Ayres to Boston. After rounding the Handkerchief, the wind being N. W. and favorable, her course was laid directly for the Shovelful light. Nothing was seen or heard of the Ibis by the lookout, or by anyone on the deck of the Warner, until the two vessels were within two or threa ship's lengths apart, and until it was too late to do anything to prevent the collision; and at 7 o'clock, or a little later, the Warner ran into the Ibis, Btriking her on the port bow, a little forward of the cat-heads, and cutting her down 1 Reported
by Theodore M. Etting, Esq., of the Philadelphia bar.