552
94 FEDERAL REPORTER. ,.
We think the libelantsWilUaqJ.M. B,ird & Co. hll.:ve a lien upon the steamer for the suWnes s6 furnished and used in its construction. For these reasons, the decrees appealed from are reversed, and causes remanded to the. lower court,' with instructioIls to enter a therein in favor of the liJ,'1elants iq the lS(!cdnd-named libel for the sum of $868, with interest at the rate of 6 per.cent. per annum from the22d day of May, 1897, until paid, with costs, and a like decree in favor of the libelant Samuel J. Pregnall for $i,18'4,!.37, with interest from May 22, 1897, until paid, with costs. Reversed·
. THE CLARA A. (DIstrict Court, E. D. North Carolina-May 17,1899.) 1. BILLS AND NOTES-COLLATERAL SECURITy-CONDITIONS-MORTGAGES. Llabllity of one on a note to a bank secured by a mortgage conditioned that the mortgage should be and remain a continuing security for all notes, bills of exchange, drafts, checks, and other evidences of debt to a specified amount of said party or a corporation 'with which he was connected, is not established where it appears that he had neither signed nor indorsed such note, that no demand on him for its: payment had been IllAde, that he had not. been' notified of renewals and the bank books do not ",how that he bad any connection with the of the notes. 2. ADMIRALTY-RULES-INTERVENTION. Adm. Rule 34, providing that one may Intervene and be heard in his own interest if he shall propound the matter in suitabie allegations, and be admitted by the court, requires the court to pass· upon the claim of the intervener to give him a standing in court. 8. CHAMPERTY AND MAINTENANCE. An agreement that the purchaser of a note and mortgage from receivers, for which he pays nothing, shall foreclose the mortgage, bring all necessary suits, and pay all necessary costs. and pay the receivers one-half of what he may recover, he to retain the balance, is champertous. 4. SAME-CONFLICT OF LAWS. . That the common-law doctrine of champerty does not obtain In New York except as brought forward under the statutes cannot be urged in an action on a contract made in New York, to be performed in North Carolina, Which is brought by one who.buys under an agreement to divide the amount recovered, it nOt appearing that the purchaser ·is an attorney, as the courts of New York hold that "an agreement by .one who is not an attorl1ey to aid in defending a suit is lllegai and void for maintenance." 5. SAMIIl-RULE IN NORTH . Tbere can be no recovery in North Carollna on a claim founded on a champertous contract. 6., ASSIGNllENT OF NOTE BY RECEIVER-EVIDENCE OF AUTHOlltTY. . Recovery on a note assigned by receivers cannot be had uniess it II sllown that the assignment was authorized by the court. 7. MARITIME LIENS-EVIDENCE TO SUPPORT. A'claim for a. maritime lien for money advanced at the speclai instance . of the master will.be the deposij:ion of claimant doesIlot show at whose request the money was advanced, aQ.d It does not appear that the advancement was necessary for the naVigation of the vessel,and neither the master of the vessel nor the agent through whom the money. was paid are examined ,as witnesses, and the evidence is the. unsatisfactory testimony of claimant, as such liens are' stricti juris, and wllI not be extep-(led by Implication or construction. . 8: SAME-SEAMEN'S WAGES-RIGHTS OF ASSIGNEES., . The assignee of a seaman's claim for wages has no lien.
'rIlE CLARA A. :M'INTYRIl:.
553 . . ;
e.
BAME-REPAmB OJ' VESSEL-MATERIALS..
Repairs to a vessel, and materials furnished in ma:ktn1fthe same, sustain a maritime lien, thougb tbe owner of the vessel was absent unknown, where the rel'alrs were made on tbe credit of· the vessel, were necessary, and such as would have been made by a reasonably tious business man under the circumstances.
and and cau-
will
In Admiralty. E. F. Aydlett and & Little, for libelant. W. D. Pruden, J. H. Sawyer, and W. W. Clark, for intervener. F. H. Busbee, for owner.
PURNELL, District Judge. E. S. Willey and several others filed libels in admiralty against the steamer Clara A. McIntyre for materials furni,shed, seamen's wages, etc. It was admitted that all the claims filed by libelant were correct, and constituted maritime liens, except the claim of E. H. White and T. G. Lovegrove, which were contested by C. R. Johnson, an intervening petitioner, and the right of C. R. Johnson to intervene, and the claim of C. R. Johnson to the note and mort, gage hereinafter referred to. A consent decree was therefore entered for a sale of the vessel, and commanding the United States marshal to pay the proceeds of sale into the registry of the court, subject to further order. On the 10th day of December, 1898, C. R. Johnson filed an intervening petition, which was subsequently abandoned, and which is now held insufficient, irrelevant, and untenable under the rules in admiralty. Again, on the 30th of November, 1898, the said C. R. Johnson filed an amended petition, in which he claimed to be the owner in his own right of a certain note in the sum of $2,500 and interest, executed by F. F. Brown to the Bank of Commerce, of Buffalo, N. Y., and secured by a mortgage to said bank on the steamer Clara A. McIntyre, and that said note and mortgage were assigned to him by said bank through its receivers, duly authorized; no part of which has been paid, and the whole is now due, without offset or counterclaim. This intervening petition was verified by H. T. Greenleaf, and again sworn to by C. R. Johnson, on the 10th day of January,1899. Again, on February 4, 1899, C. R. Johnson appeared, and asked to file an amended claim. This was objected to by counsel for libelant, and the objection overruled by the deputy clerk, the commis$ioner to take the depositions; and the said Johnson filed in evidence vessel mortgage on Clara A. McIntyre, dated September 4, 1889, and a note of the Acme Wood & Fiber Company, dated September 8, 1896, together with an assignment of said papers by H. H. Persons and J. H. Hazell, receivers, dated October 21, 1898.. This was objected to, and objection overruled, and an exception. Testimony was then introduced which showed all the written part of the note was in the handwriting of Andrew Brown, including the signature of the Acme Wood & Fiber Company, by Andrew Brown, president. The $2;500 note, signed as above, was first discounted by the Bank of Commerce September 10, 1889, and there was never any indorser on the note, which was renewed from time to time (every four months) without notice to or the consent of F. F. Brown, and nl} demand has ever been made on him for the payment of the note· filed. At the time .of the renewal of the said note. interest WllB,
94; FEDERAL REFOnTER, .'
p,aid. and soIp.etimes not, and .the. bank acct'pted the re' newaBn place of the old' J;lote, and the. time of payment in that way. The books of the bank do not show that F. F. Brown received eredit for the note in question, and there is nothing on the books of the bank to show that F. F. Brown had any connection with or noti<le of the renewal note. The interest at the last renewal was charged to E. H. Kruger & Co., and on July 6, 1896, the discount on the Acme Wood & Fiber Company',stlOte'of $2,500 was paid in the same'waY;ia;lso ouMay 6/1896; the same as to I1enewal of March 7, 1896, and of the January, 1896, renewal of the note. Under the gen,eral custom of the bank, the note would not have been discounted forF. F. Brown without his indorsement, and this note was never indorsedbyF. F. Brown, and the note was not discounted for him. that there was no other collateral The cashier of the bank security MId by the bank-for :this note excepFthe vessel mortgage; that .an account was with F. F. Brown at the bank shortly after the mortgage was Iil,ade, and continued for two years. ,TIle assignment by Persons and Hazell, when the account was receivers, and fh,eir 'handwriting, was J?roved by a witness whosaysh'e was familial' wiUltheir handwriting. F. F. Brown wa."l treasurer of the Acm.e Wood & Fiber Co'rnpany, iand in 1890 $20,850 of the paper of the Ac±t.ie·Wood & Fiberi Company was credited to his account. About 1888, l!\ F. Brownpurchased the tug l\fclntyre, and there is' hoevidence that he has ever parted with the ownership, 'In answer to interrogatoriel:rpro'pounded, C.'.RJohnson answered"that. he purchased the note set out in his claim'fNHif 'th({'l'eceivers. of the 13ank.of Commerce of the City of BUffalo, N; Y.; that he paid':Qothingfor. said. note, but to pay equal to·50 per' .cent. 'of what' he migtit recover was... assigned to 'him by by .fbreC\oS\iTe .proceeding';' ! . that. and he ptircl1ilSed the same directly from that the exIstence of 'the note !tom one of the receivers ; that Jbe a. written .' a!!\'sl,gmuent .of 'the' .note' and. l)1ortgage, and fi,l,e,s. a' tqe'l'e" hf hQ other· t. and any'otllel',·P«ftY' regarding the note an({ ,I1HHigage.than this: he bought ttie sami:!, 'ha.d 'tne.fu. assignell .to· him by the and hO.1 4s ,tne'.i.sa.·in . .fO.r'!hi n1Se. . .. . . ·,e th .. that .h is}.O .fore..e. the .and pay Jl,n ,necessar;r costs, ,and,i'lay SaId ,r,eceivers.one-bi4f of what 'he mar and retain the ba.lahee.' . . , . .........· .' " ·... ..' .'.' '. .'.. . . . Th,oma:s G: files "e'Vera1 c1il1:fus againl'tth.¢ 'steartier Me.. to $15d.14,<is for work nntterials ,.. :E;xhibit B, amountuig to IS for 'mon!'(y ,March, 1897, to J lS98,'1;oply the wages of' tile crewoti the. One claIm to aSSIgned fOThomas, G-.:(io)'r::grove .. 25, 1,898, IS for materIal frir.niS.·.h.ea i.ii. repa.:rrl.ng.:'th.·,e . ea. .. . ¥.c.. ltlt .re.fl'Om. D e.cerilb.e.r 1,18.97, .... . to.J? cember 21, 1897;tl1i:lusive. ,'l'h'e ()t er \laim. 'of the same comfot'· w,qrk ,dotieand furllisbed steamer frp¢ to assigned to Thtmias G.Lo'VegroV'e December' g; 189& The olaim of the North
THE CLARA A. M'INTYRE.
555
Carolina Iron Works for material furnished and labor performed on the tUg McIntyre, amounting to $52.36, was assigned to T. G.wvegrove January 29, 1898, by the proprietor of said iron works. The claim of E. S. 'Willey, amounting to $73.54, for work done and material furnished in repairing said tug from March 23, 1897, to May 24, 1898, and assigned to T. G. Lovegrove August 30, 1898. . . .The Claim of E. H. White is for $40 for a pump furnished the l'>teamer McIntyre on a telegram received from E. H. Kruger, dated October 15, 1896, and charged to the steamer McIntyre. The credit was giyen to the steamer, and the pump accepted by the master. This claim is contested on the ground that it does not constitute a maritime lien, though there is no denial of the fact that the pump was furnished as claimed, accepted by the master, and used on the steamer. The foregoing finding of facts is all that is deemed necessary for a plloper understanding and a dedsion of the case. Much of the argument is based on the idea, unsupported by proof, that Lovegrove was one and the same as the Buffal.o City Mills; that the steamer Clara A. McIntyre was in the employment of the Buffalo City )Iills; hence the assignments to Lovegrove were null, because assignments of debt for which he was primarily liable. This is legal argument and theory without evidence, for there is nothing in the. depositions showing any contract between the steamer McIntyre, her owners .or master, with the Buffalo City Mills, or that Lovegrove was the Buffalo City Mills, except that he was the proprietor of such mills from March until Deeember, 1897. Mu.ch incompetent, irrelevant, and impertinent testimony, which was objected to, and objections overruled, in attempting to establish this theory, make the depositions voluminous and costly. This seems to be the only result of a futile attempt to get testimony in other litigation, which has no bearing, directly or indirectly, on the question at issue. The evidence is that the steamer McIntyre was doing business in the harbor of Elizabeth City, and employed by such persons as needed her services, and, among others, the Buffalo City Mills. The note claimed and introduced by Johnson cannot be held to be secured by or connected with the mortgage given to secure a debt due by F. F. Brown by the words which appear in the condition thereof, as follows: "All notes, bills of exchange, drafts, checks, and other evidences of debt of the said Frank F. Brown, or the Acme Wood and Fiber Company, and for any sum or balance of any form of indebtedness by either of said parties to said bank, to amount not exceeding twenty five hundred dollars, the instrument to be and remain a continuing security for the amount," under the circumstances set forth in the finding of facts. It is not deemed necessary to state at length the reasons for thus holding, as a glance at the facts will be sufficient. The decision of the case does not rest solely on this ground. The admiralty rule under which C. R. Johnson claims a right to intervene provides he may do so, and be heard for his own interest, if he shall propoUlld the matter in suitable allegations, and be admitted by the court (Adm. Rule 34; The Two Marys, 12 Fed. 152); hence the
556
94 FEDERAL REPORTER.
o
court must pass upon the claim of the intervener to give him a standing in court. 'l'heaCtion of a to take testimony· only has no binding force, and i]}1ust be confined to the duties prescribed in the order of court.·The admission of the interveningpetition and amendments by the deputy clerk overruling the objections thereto was merely, therefore, pro forma, and without authority. The court must, urider the rule, pass upon the intervener's claim in all its phases, and it is only by permission of the court· of admiralty that tke intervener can be heard. It was insisted in the argument that the contract under which the intervener, C. R. Johnson, claims to hold the note and mortgage is champertous, hence void, and he ,has no standing in court. It is contended contra that, while said' contract may be champertous, it is only void inter partes, and: the libelant and the owner' of the vessel cannot avail themselves of it as a plea in bar of Johnson's right to intervene or recover: Ohamperty-a bargain to divide the thing sued for, whereupon the champertor is to carry on the suit at his owl1 expense, purchasing a suit or'right to sue -was so much abhorred at the common law that a chose in action was not assignable. Ohampertors are spoken of as pests of society, who were perpetually endeavoring to disturb the repose of their neighbors, and officiously interfering with other men's of one-third of quarrels. They were punished by a their goods and perpetual infamy. 4 BI. Oomm. 135; 4 Bouv. Law Dict. 236; Co. Litt. 368. The contract, as set forth in the answer of Johnson to filed, is champertous under ;:tIl the definitions. The difficulty in most of the reported cases was in deciding if a contract amounted to champerty, but no such difficulty arises in the present case. Johnson is' '3, stranger, having no interest, director remote, as far as the evidence discloses, in the controversy. He secures by assignment, without paying a nominal consideration, on an agreement to pay expenses and divide what he recovers, a claim which the holders are not willing to prosecute. This is champerty. There is a marked tendency on the part of legislatures and courts to curtail the doctrine of champerty, and in many states it is held that the common-law doctrine does not obtain.. A distinction is drawn between lawyers and laymen, generally on the ground that the former are authorized to prosecute and render professional services in this behalf in themselves valuable. It does not appear Johnson is a lawyer. He had no authority to conduct litigation, or render professional services, and his claim or contract must be considered wholly un(ler those decisions applicable to laymen. The only apparent motive is to speculate in stale claims, and interfere in other men's business. It is almost universally held the courts will not give effect to snch contracts. In :Korth Carolina it is held, a contract in which the obligor engages to give the obligee (who was not authorized to appear for parties litigant and manage lawsuits) one-half of the 'land in dispute, or one-half its value, in case of recovery, as compensation for his setvices in the management of the suit, is against ,public policy, and void. Munday v.. Whissenhunt, 90 N. O. 458, and cases cited. So that, if this contract was
557
made or to be performed in N.orth Carolina, under the laws of the state it would be void. But it may be said that this was a New York contract, and would be governed by the laws of that state. While it is held that the common-law doctrine of champerty does not obtain in New York except such as brought forward in the Revised Statutes of the state (Durgin v. Ireland, 14 No Y. 322; Voorhees v. Dorr, 57 Barb. 580; Fowler v. Oallan, 102 N. Y. 395, 7 K. K 169), it is also held "an agreement by one who is not an attorney nor counselor to aid in defending a suit is illegal and void for maintenance." Burt v. Place, 6 Cow. 431; \Vard v. Van Bokkelen, 2 Paige, 289. The two terms "champerty" and "maintenance" are generally used together, and the cases in both states, the laws of which might affect the contract under consideration, were stronger in favor of sustaining the contract than the one at bar. It is .not necessary to consider the many decisions in other states. In Burnes v. Scott, 117 U. 8. 588, 6 Sup. Ct. 869, it was held a champertous contract between the plaintiff and his counsel could not be set up as a plea in bar of recovery on a note, but this suit was in the name of the real party in interest, the payee in the note, and in the opinion the following language of the vice chancellor, who delivered the opinion in Hilton v. Woods, L. R. 4 Eq. 432, is quoted with approval: "I have carefully examined all the authorities which were referred to in support of this argument, and they clearly establish that, whenever the right of the plaintiff in respect to which he sues is· derived under a title founded on champerty or maintenance, his suit will, on that account,. necessarily fail."
In the case at bar the foundation of the intervener's claim is the champertous contract. If Johnson should recover, the contract is void, admittedly, between the parties, .and the receivers may possibly elect to repudiate, and recover again on the note or mortgage. The contract, if illegal and void, can confer no rights, and, like a void judgment, may be taken advantage of by anyone; hence, while, if the intervening petition had been filed in the name of the true owners of the note and mortgage, no advantage {:ould be taken of a champertous contract with the attorney or solicitor of plaintiff, to hold that advantage cannot be taken of the title which he sets up as the basis of his claim and standing in court would be to give countenance to illegal and void contracts. This the court will not do. The intervening petition of Johnson musi- fail, based as it is upon champerty and maintenance. Again, the assignment is made by receivers, who are officers of the court, and no authority of court is shown for the contract set out as entered into by them with C. R. Johnson. Hence it is ordered, adjudged, and decreed that the intervening petition of C. R. Johnson be, and the same is, dismissed, and the costs of such petition, and the costs incident thereto, including the process and expense of taking depositions, rendered necessary thereby, to be taxed against C. R. Johnson and the sureties on his stipulation. There are other objections which might be held against the intervening petitioner, but, as this view disposes of this branch of the case, it is not necessary to argue 01' decide them. In the libel filed by T. G. Lovegrove (third allegation) he alleges
that ,' at' +a"rious, ,times" M::ii'2h,1897;! and ' July :30,' 1898; at: tJ1:e 'alid. request, j)f :the. the 'supplied alid: f:t:i35G.51;as· defa'iledi4' Exhibit B, in order to pay' said tiillsteron (he steam tug, and it was'sd used;.'tbattbe1fijnds 'were'fUl'lljsn,ed npon the credit Of the 'the F: F. Brow:p., the 'owner of me'vessel, admlts that, If the clalms are Just and i exists'.; ridtupon the allegation, the claim.' 's¢t 'up by Lovegrovernust be detertrdriM. ' The deposition of' '1":' 'G! LovegM'Ve is indefinite' and unsatisfllctbiry. Heddes no't 'say 'iit wllosei'equest the money was and all, that dm 'be' satiSflicf.oclly determined from his testim<HWis that he 'Hilt'}.' the'vessel; thought her good for the amount;' the mtJneyi wRs"advanced, by his IlUthority, through'Krnger, anQh'e 'dbesnot kU(jwto whom it was pai(l;afterwat:ds he"1:Jaid itWaIJ' midtiey paid'b;Y him, or at his instance;'fo 'parties wHo liad'ftirnil3Hed' 'labor arid materials to the boat.' Itfidoe$ aj>pear the' advancement was necessar:ifbrl'tlrenavjga1;ion 'ofth(j 'She was doing a general' toWingi the hirMr;' litid, protiablyearning "more than eridiig-h'tO pay 'expenses;" Neither"the .master of the vessel nor. the agent through whom the motieywaspa'idare examined as dll the subject is the unsatisM" .' Th,iS" :not . and convincqJltract or lien. cing, 'sQeh as Sp.ch liens are stricti juris, and wHlpot be extended by implication or construction. Yankee Blade"jJ:9 How. 82; Pratt v.' Reed, 359{!TheSultana, Jd. fou:pded upon contraCt or glv.en by law. The claim 6fa'sf!amah for wages would be a ','ine vessel (seamen are wards of the admiralty court), l)trt the assignee or asealUan's'claimhas no lien. The Aeolian; ,13pnd, 267, Fed. rCllS. iN 0. 8,465; ,The Freestone, 2 Bond, 234, Fed. ,Cas. No. 12,143; The Patchin,12 Law Rep. 21, Fed. Cas. No. 10,794'. In thisinstance there',was no assignmenteven; there isnoevidenGeof necessity; in short; there is nothing in the case upon which the claim for a marjtime lien can properly be based. proof is upon the lihelant to make out his claim. The b:urdenr This he has'failed to do; hence of T; G. Lovegrove, as set forth above, is disallowed, and, his libel in this behalf' (the third allegation and Exhibit::er is dismissed. , ' The Mher claims, as set forth infbe: libel of T. G. Lovegrove are for repairs to the steamer, and ,materials furnished in making such repairs. The owner of the' was absent and unknown; the repairs were made on tile credit, of the vessel, and they seem to have been necessary, and such as woufd have been made by a reasonable, ,ca\lticlUs business man nnder tHe cil'.cumstances. These facts, make these claimsmaritiine' They were' assigned for a valuaJ:;ilecorisideratiotr,a;ri!'l, in due form ; hence T.' G. Lovegrove, being 'the'real party in' interest,is entitled to have these claims thus assigned paid to himifroin'the proceeds of the sale of the vessel after the paymeriLof' tliOse claims having priority,-seamen's wages. ' .,,,,,
I.,.,
THE MARTHA DAVIS.
559
The claim of E. H. White is a maritime lien under the facts as found, and will be paid in its order as above stated. A decree will be drawn and entered in accordance with this opin· ion. It is so ordered and adjudged.
THE MARTHA DAVIS. (District Court, N. B. California. May 15, 1899.) No. 1,571. COLLISION-CONTRIBUTORY NEGLIGENCE-ANCHORED VESSEl"
A vessel cannot be held guilty of negligence contributing to a collisIon because her machinery was disconnected and her sails taken down while at anchor, for the purpose of making repairs, when she was properly anchored in a safe berth, where she remained; the collision being caused by the drifting against her in the night of another vessel, which was insecurely anchored.
An admiralty suit by the United States against the bark Martha Davis to recover damages for collision. H. S. Foote, U. S. Atty., and Samuel Knight, Asst. U. S. Atty. Page, McCutchen & Eells, for claimant. DE HAVEN, District Judge. This is a ·libel filed by the United States to recover damages sustained by the United States steamship Patterson in a collision which the libel alleges was caused by the negligence of the master and crew of the bark Martha Davis. It appears from the evidence that on March 9, 1898, the Pattereon was lying at a safe anchorage in the ba;y of San Francisco, undergoing repairs her engin-es, which had been taken apart, and were still in that condition, and therefore at the time entirely useless as a means for propelling the steamer, but she was otherwise in seaworthy condition, and was properly manned and equipped. On the evening of the day named, the bark Ma.rtha Davis came into the port of San Francisco, and, dropping a single anchor, anchored at a distance of between two and three hundred yards from the Patterson, and further from the wharves than the latter. At that time there was only a light breeze blowing, and the one anchor used by the Martha Davis was' sufficient to hold her. The Patterson also, at this time, had but one anchor out. About midnight the wind commenced blowing a strong gale from the north, and the master of the Patterson soon ascertained that the one anchor already outWaB not holding his -vessel, and another was let go, but not until after the Patterson had drifted some distance further away from the Martha Davis, and nearer to the wharves. When the second anchor was dropped, the Patterson was so close to the schooner IVY,also lying at anchor, that she was soon compelled to take in five fathoms of her anchor chain, in order to avoid a collision with that schooner. Between the hours of 4 and 5 o'clock on the morning of March 10th,the Martha Davis and the Patterson came into collision. There is a direct conflict in the evidence as to whether this COllision was caused by the drifting of the Patterson into the berth of .the Martha Davis,