MInER et al.
'11',
THE PEERLESS,
at, Intervenors.) M!lrch 20, 1891.)
(Circuft
court;' S. D. FlaI'/,d,Q.
ADMIRALTY-SURPLUS-BREAOH OF CONTRAqr-RUDlll
41. The mortgagor ofa vessel gave the mortgagee an absolute bill of sale upon condition that the latter should payoff the outstanding indebtedness, and that the retain the use and control of the vessel for II year, within which time' he mIght sell it. and pay the lllortgage debt and interest. , The mortgagee failed to pay tlie debts, and the vessel was sold under maritime liens, leaving a surplus in the registry. Botll mortgagor and intervened pro interesse suo, each olaimiD,gthe surplus. HeW, that the right of, tile mortgagor was in no.sensea jus in'l'e in respect 'of the surplus, but was simply a claim for damages agalDst the mortgagee for failing to pay the vessel's indebtedness, of which admiralty has no juritldiction, even under rule 41, authorizing a distribution of a surplus upon,aaummary hearing, and in accordance with the principles of equity, the fund must be awarded to the mortgagee, leaving the owner to his action at law.
In Admiralty· John C. Williams and William Harding intervenors pro intereB8eBUO, claiming remnant. Barron Philip8, for intervenor Williams. Knight& Wall, fQr intervenor Harding. PARDEE, .J. The libelants on a maritime lien caused the schooner Peerless to.belibeled, condemned, and sold. After paying the amount of their claims and costs, there is a surplus remaining in the registry of the court. John C. Williams iritervenes for this surplus, alleging him.self to be theholdetof a of the said schooner granted by'said William then owner, which mortgage was allerwards by'agree;ment converted into a bill: of sale unconditional in terms. William Harding intervenes, denying the right of the said Williams to the stirplus in the hands of the court either as mortgagee or owner of the said schooner Peerless. He alleges that the said mortgage has never been foreclosed,and the equities under it ;never have been determined; that the bill of saJe was obtained by undue means, amounting to fraud; that the said Williams is, by reason of violation of his agl-eenlents, and of his course in C811sing and procul'ingtbe said schooner Peerless to be libeled and sold, and hi, deprivinghitl'l:, the said owner, of the use and possession of thEl said schooner, in violation of express ,contract thereunto made, indebted to him in sum than the amount in the registry of the court; and praying as follows: "That the petition of said WiIIiilms be dismi!1sed, oocausetbe same is an intervention tiled for the purpose ofobtllining tile money paid into the registry of the court, and blll:led on a mortgage which has not bl'en fOfl'closed, and in which the rights and eqUities of the to said mortgage have not been determined; nor can be legally entertained lind determined by this' Clmrt. But said William Harding.further prays thitt if it be so that ,your honor 'shall hold that it is right and proper in the law, to elltertaj n the claim of said Williams fonaid mortgage indebtedness without It suit for the fOl'ec!osure first being had;:and the equitable ascertainment of the arnputit due saki Williams, if any, by proof, then the said Harding be allowed the sum of one thousand tbreeflundrt'd and dollars due' from' said Jbhn c. Williams to him for detentionanQ'Uile of saidvelisel, the statement
492
FEDERAL
.vol. 45.
of whIch is hereto attached, marked ·Exhibit A;' and that the same be decreed, .an4.1lP, arderof court be granted, requiring .said sum to be paid to said Harding out of the money realized from the sale of said schooner Peerless, after payment of .the claim of Miller & Henderson, with the costs, etc., paid into the registry of the court... The conceded facts are that Harding was the owner of the schooner Peerless,and·. granted a mortgage to Williams to secure the payment of a promissory note of $700,. bearing interest at the rate of 15 per cent. per 4nnum, payable semi-annually. The mortgage contained many stipulations with regard to the prompt payment of interest and the treatment (\fthe mottgaged property, as to keeping. the same in repair,outof debt, insured, within the country, etc. The stipulations of the mortgage, particularly with regard to the paymentofinterest, not being complied with, Williams insisted upon foreclosure. Thereupon the parties agreed that Harding should execute a bill of sale to Williams of the vessel, which. waS' done. . The disputed facts are with reference· to the terms of the agreement upon which the bill of sale was executed. Williams claims that the agreement was that he (Williams) was to payoff and satisfy the indebtedness against the vessel, and that, if Harding could obtain a purchaser a sum that would pay off and satisfy whatever amount lle{Williams) should have paid on ,the said vessel, together with the indebtedness said mortgage, then Harding should have all of the amount of money in excess of said sum or sums of money. Hardmg. claims; that the agreement was that, in consideration of his executing the bill.ofsale,he was still to hold possession of the vessel for 12 moriths, ';Vith the privilege of using the vessel for that length of time; with the further express agreement that said Williams should pay all the indebtedness against said vessel to that date, and that Harding should have the privilege of selling said vessel within 12 months, and paying off said mortgage debt and interest from the proceeds. If the vessel should not sold within 12 months, Hardillg was to forfeit further claim thereto. The forty-fi,rstadmiralty rule provides....,... ! "That any person baving an interest in· any proceeds in theregistry of the court shall have a right by petition and summary proceeding to intervene pro 'nteresse suo for a delivllry thereof to him; and upon due notice to the adParties, if any, the court shall and may proceed summarily to hear and deriide·tb'ereon; and to decree therein according to law an4 justice."
. Mr. Justice'MATTHEWS, in the case of,The E. V. Mundy, 22 Fed. Rep. 178, in considering the jurisdiction of the district court as to the disposition of surplus, says: "The. jurisdiction of the district court as an admiralty court, in one sense, may be said to .be exhaUsted and at an end; but itis still in possession of a fund arising by the that jurisdiction. Is not the right and power ot disposing of that fund, necessarily incident to Us jurisdiction as an ad.. miralty court? It must with the fund; itis absurdtQsuPIlose that it cannot.,; What else: .can it do but ascertain to whom among .8everal clilimants it .belongs,acClording to principles of equity, and award it according})';; this. complications blllQnd convenient.6xtent of .
MILLER t1. THE PEERLESS.
498
Its powers, then to direct a:litigation elsewhere between the parties, the fund to whomsoever shall ultimately appear to be entitled ? Such was the principII! anno\lnced' and acted on in tpe case of The fiuiding fjtar, 18 Fed. Rep. 263. A reconsideration of it in this case has not weakened my con viction as to its soundness. ,This principle is the sole foundation for the forty-third admiralty rule, and is explained and justified in the opinion of the supreme court in the case of The Lottawanna, 21 Wall. 558-582. It is there said: · The court has power to distribute surplus proceeds to all those who can show vested interest therein, in the order of their several priorities, no mat,ter hqw their claims originated. Schuchardt v. .Babbidge, 19 How. 239. The propriety of such a distribution in the admiralty has been questioned, on the ground that the court would. thereby draw to itself equity jurisdiction. The Neptune, a Knapp, 111. But it is a wholesome jurisdiction, very commonly exercised by nearly all superior courts, to distribute a fund rightfully in its possession to those whO,are entitled to and there is no sound reason why admiralty courts should not do the same. If a case should be so complicated as to require the interposition, of a court of equity, the district court could refuse ,to act, and referthe parties to a more competent tribunal.' " Taking the law to be, as laid by the learned jqstice, and supflorted as it is by the authorities cited, there can be no doubt about the jurisdiction of the court in this cause to determine as to the proper dispositiop of the surplus in the registry. ,The jurisdiction,however,should extend no further than to determine between claimants who have aright to or a'lieil on the res. Controversies' 'between the claimants involving breaches of contract, or even equities, that do not amount ,to a specifi<: right in or to the res, should not be drawn within the jurisdiction. , All this seems' clear from the nature of the case, and from the admiralty rule, which requires tho court to proceed summarily., ' "'With theSe views as tOjurisdiction. it is not considered, that the questions submitted are so complicated as to require the interposition of a court of equity, and this, court, as required by the forty-first admiralty rule, can proceed summarily thereOIH and decree according to law and justice. In so proceeding, it seems unnecessary determine as to the disputed facts in the case. The claim of Williams, whether based on the mortgage ,or the bill of sale,is undisputed. Based on it constitutes a lien, inferior, ofcourse, to all maritiII;l6 liens, the amouIl;t .thereof on the surplus funds in the, registry of the court. .U the bill C1f . '8ale is ignored as void for. fraud, and Williams is remitted; to his right solely under the mortgage,his claim anglien on the funds iS,of a higher Qrder, and has priority over a claim of the owner. If the bill of sale is taken as the of Williams' right, t,hen he stands before the ,entitled to the surplus proceeds after liens are satisfied. The claixp (If' Harding, taking it in i41 most favorable aspect, to-wit, that, underlIi.s with Williams, Williams was to pay the Qutstanding indebtll4..ess of tlIe schooner, and Harding wae to have the use and control,pf ,the vessel for one year, of which he has been deprived by the negleot ,of t<:> pay the debts,. and the cpnsequent forced sale of the, ship under is' and nothing more, thap, ,f,l damages ansing out of a breach of dufy and of contract. Such claim is not of such a character as to divest theownership,of ,Willia.pllil, nor does
i,Mu any wa:yconstituw'& lien in itselrf'j,<There is no element in such Q. claim of a jits 'tW"'fr.' "r, . Under itlleetns'to be the duty of the'eourtto aWlj,rd the t,be registry o(the court (concededDQtto be sufficient to the party who holds the rig.ht,,,leaving to the contestant 'any and all rights that hemay!have to pursue his claim for damages in any court The decree will be entered .
. THE
WILLIE.
1
",i'
(l'X8trictC&urt, S. D. New York. March 23,1891.) , :1,.,'\
I.' 1II'IIGr,TGBNOB,.,.PBltSONAL, !NroRy-MASTEl\ SERVANT-FE:r.WW'SER:VANTS. Wqere a mate of a ves9E!1, workiJilg with. a seaman and in discharging 'cargo', of the vessel 'being absent, continued to unload the cargo in a dll;Jilgel'l)llswanner, attenti()D haa .heen. called to the danger and complaints had QlJElD made, ,and, the fell and saUor, the ves!'!el was held liable for theinJil'ry;' . , . n . , ,.. ' '"
the kllGwledge,of the proper· officer. 6.
gers,to life and limb' by the usuw. means, . .
ShfltPwners are,
011' EMPLOYER.
seamen . .
·
reasonable security against dansuch are brought bome to .' , : ..
Under the circumstances of this case, the mate of a vessel.and a sailor were7teld discharging the' cargo. ilotfellow-serva.nts,' in' 'respeet to waking safe the :i.:
In Admiralty. Suit tcl'recover damages for personal injuries. Hyland Je' ZrlbPiskie, for libelant. . RObert D. , Benedict, foroillimant.. . ;
,
(
'I,
.;i.
BItOWN;J·. On the 18th of July, 1890, while'the Frank 'and Willie Was dischal'ging'a cargo of lumber at' one of the docks in (jeiwa!nu8 canal,thelibelant; an able seaman, who was unloading from ,the hdld,hlidhis1eft:leg1 broken, through the fall of lumber against and upon hIm. He' trell.ted:at the hospital at the ship's expense, and now brings this damages for the 'injury. The libelitnt was at: workwith the mttite'on the port side ofthe Schooner, and under his'dirediion; others worked on the discharging through hatch. '!'hel'uthlbercollsis'fed of pieces to 30feet'long, about 8 inches wide by 3 i'nch-es' tbick. . They-were piled in tiers, not Jastened together by ties:.' ,A'fter a spaeewas cleared down t()'the '·ft6or over the keel',. the lumber stood abouii ? ·fiJefhigh. They did not di&Hiarge from the top. aCross to the i side. of tb'e; SliIp, bu t workedup ',Tbe libelant,'and wallY witnesses , " . .;,: J
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