236
FEDERAL REPORTER.
think, in an erroneous holding in the beginning of our government, by congressional legislation. Acting upon these views I will direct an order to be entered reversing the decree of the court below, and distributing the proceeds pro rata among the parties. NOTE.-See Th8 Brig E· ..i. Barnard, 2 FED. REP.
7la.
GOBLE
and others v. SCHOONER DELOS DE (Di8triet Gourt, N. D. Ohio. May 10, 1880.)
WOLF.
1.
CLASSIFICATION OF LIENS- STATUTORY LIENS-HoME AND FOREIGIil
PORT.-Th,
Burn8id" ante, 228, followed.
In Admiralty. Th9 undersigned, to whom it was referred to determine the proper distribution of the proceeds of the sale of said schooner Delos De Wolf, submits the following report: The gross proceeds of said sale, as appears from the return of the marshal, in this cause was $4,325, out of which there was retained by the marshal, on account of his fees and costs, $281.11, and the balance, $4,04:3.89, was paid into the registry of the court. From this sum, pursuant to an order of the court heretofore made, the sum of $122.75 has bp.en paid, being the amount of damages decreed by the court against said schooner in favor of Charles Wright and others, on account of their seamen's wages, leaving now for distribution, in the registry, the sum of $3,921.14. The amount and aggregate of the several decrees of this ;court against said schooner and against said proceeds is as stated in the annexed schedule, marked A, the aggregate amount being: Damages, $9,919.30, (including the. damages of said Wright and others;) costs, $491.77, (including the marshal's fees retained by him as aforesaid;) in all the sum of $9,711.07; and, after deducting the payment of said seamen's wages and the amount retained by the marshal, the bala.nce of charge on
GOBLE tl. SOROONU bELO! DB WOLl!'.
.
s&id proceeds is $9,307.21-& sum largely in excess of the fund in the registry for distribution. It is recommended that said net proceeds be distributed as follows: First, in payment of the sum of $152.78, the balance of costs incident to the said original suit of libellantl!l; $2.55, the costs incident to the petition of the United States; and $38, the costs in the suit of said Charles Wright and in all, $193.36. Second, to the payment of $89.78, ihe claim of the United States for its tonnage tax on said schooner so recovered. And, third, that the residue, $3,638, be paid and applied upon the decree in favor of said libel· lants, the plan of distribution being more fully shown in and by Schedule B, hereto attached. The undersigned submits that by the provisions of the laws of the United. States its claims for taxes constitute a first lien (subject to costs) upon vessels or other property upon which they are levied. It will be observed that after the payment of the costs in the said original cause, the petition the United States, the costs in said suit of said Wright and and the amount decreed to the United States for taxes, it is recommended that the residue of said proceeds be applied exclusively upon the libellants' decree for damages, and this for the following reasons: The defendant vessel was seized and brought into the jurisdiction of the court by virtue of the process issued upon the libel of said Goble and McFarlane, that being the original and first libel filed against her in this court, whereby, as against all other claims of no higher rank, said libellants acquired a priority of claim upon the fund, in court produced by her sale. No question is made as to the rank of said wages claim of Charles' Wright and others, who have been paid out of the fund, as that claim ranks higler ihan any of the others decreed, except that of the United States for said taxes. The claim of libellants is for materials, labor, etc., in the l'9pair of said vessel in her home port, at Oswego, New York, for which, by virtye of the prov\sions of the laws of New York, [8.N. Y. St. (6th Ed.) 753,] libellants acquired a lien which is said .tatuts made superior to all other liens,
b,
PEDERAL BEPORTER.
except only mariners' wages. The language of said statute is as follows: "Whenever a debt amounting to $50, or upwards, as to a sea-going or ocean·bound vessel, or amounting to .$1£)., or upwards, as to any other vessel, shall be contracted hy the master, owner, charterer, etc., of any ship or vessel, or the agent of either of them, within this state, for either of the following purposes-first, on account of any work done or materials furnished towards the · · · repairing, fitting, furnish. ing, or equipping such ship or vessel · · --such debt shall be a lien upon such vessel, her tackle, etc.,' and shall be preferred to all other liens thereon, except mariners' wages." Said statute contains certaiIi provisions as to the cessation of the lien thus conferred after a time specified therein, unless the holder thereof complies with the conditions set forth; but it is not claimed that there has been any failure. on the part of the lihellants to comply with all the essential conditions 80 imposed, so as to deprive them of the rights and benefits claimed under this statute. While it is not believed that the legislature of New 'York had the power so to reverse or change the well-settled order of priorities established by the general maritime law, it is believed to have been within the scope of its authority to enact that a lien, such as this statute has provided for, should be created in consonance with the maritime law; and, it being reserved to the courts of admiralty to enforce it, its rank will , necessarily be ilubject to their determination. The national courts will certainly not give such statutory liens a higher rank than they are entitled to by the nature of the claim and the cir0umstances litttending its enforcement, as compared with other claims of the same or similar nature and general rank, and attended by the same circumstances, but will doubt· them as equal. In the opinion of the less regard and undersigned, the distinction btltween what is called the "home" ,and the "foreign" port, in which a oharge upon vessels is created by 'supplies, etc., resulting in differenoe of rank, is unreAoI and fallacious; and this view finds powerful support in tte well·oollilidered argument of Judge Benedict, [see his
GOBLE V. SCHOONER DELOS DE WOLF.
239
Admiralty, (2d Ed.) § 272, et seq.,] and in the opinion of the Hon. John Baxter, circuit judge of this circuit, in a late case, (Tlu General, Burnside, ante,) in the eastern district of Michigan, to which my attention is called by counsel, but which is not yet printed, and a manuscl"ipt copy only has been furnished. For the reasons aforesaid it is recommended that libellants' claim be preferred over the several claims for insurance, and over the claim upon mortgage found in Schedule A, because of its higher rank; and overthe several claims in the same schedule for towage, supplies, and labor, being in the same general rank, because of its being the first in suit. The Glob" 2 Blatchf. 427; also note in same case, 433; The Triumph;· also Benedict's Admiralty, (2d Ed.) § 560, p. 332; also 1 Wendell, 39; The People exrel. Jennings v. Judges, etc. A small amount of some of the claims in said Schedule A, of the same general rank as that of libellants, accrued at a. later date than said libellants' claim, as appears from the schedules annexed to the several petitions, though much the greater portion were of an earlier date. The rule being that the lien takes rank in the inverse order of date as to season· of navigation on the western lakes and rivers, (instead of voyages, as to ocean navigation,) it is found that none of the said claims of equal general rank are entitled to priority over libellants' claim, by reason of the fact, which has been shown in the evidence before me, tllat said vessel was out of the United States, and beyond the reach of the process of their courts of admiralty, nearly all the time which intervened between the accruing of libellants' claim, in October, 1878, and her actual seizure under process issued out of this court in this cause on the tenth of May, 1879. It thus appears that there was no lack of .diligence on the part of the libellants, whereby, by reason of the season of navigation of 1878 hav-·· ing expired before they brought their suit, other claims of the same general rank could gain a preference. HLien holders should have the current season of navigation to enforce their security, and such reasonable time after the commencement of the next season as may be necessary to arrest the vessel." The Hercul", 1 Brown's Ad. 1>60.
·
24:0
FEDERAL BEPORTER.
It is proper to remark that, before proceeding to the consideration of this matter and the framing of this report, due notice was given to the proctors of all the parties who have recovered the decrees mentioned in said Schedule A of the time and place when the matter would be heard. Respectfully submitted, EARL BILL, Commissioner. SCHEDULE A. NO., 1
LIBELLANTB.
Nature of Claim.
IDamages. ICosts. I Total.
1742 George Goble et al..·..·. Materials, etc. 4,058 28 44392 4,49220 .. Manhattan Fire Ius. Co.. Insurance .... 251 76 280 254 56 .. United States Tonnage Tax.. 2 55 89 78 92 33 U Patrick Smith ··.·...·.. TO'wage ······ 4090 1 95 42 85 .. National :Marine Bank of Oswego .......······. Mortgage ..··· 4,238 00 4 75 4,242 75 If Grant & Fayette . ······· Labor, etc .··· 88 28 3 40 91 68 U G. D. Morris & Co...···· Supplies, etc.· 1736 . II Phrenix Ins. Co ......·.. lnsurance..··. 263 80 . .. Vessel Owners' Towing Co ............······. Towage.. . . · · 37 80 · · · · · ·. · ········ .. IJohn Cloy, Agent Supplies, etc.. 10 59 4 40 333 95 1743;Charles Wright et ill Wages........ 122 75 38 00 160 75 ITotal damages and costs ....·...···.·.. SCHEDULE B. Amount in Hegistry . .. ...... 3,92114 DISTRIBUTION. Costs. Earl Bill, Clerk .. 8798 W. B. Prentice, Marshal .···.·····..·. 6 30 1'. Zucker, Notary ......····.·····.·.. 40 C. A. Vincent, Notary, . 1 60 Chas. Balfour, Notary on Depositions .. 4 60 Earl Bill, Commissioner ..... , ··.··.·.. 22 25 Goulder & Hadden, Proctors, ......··· 3U 00 Willey, Therman & Hoyt, Proctors .··· 20 00 Goulder & Haddcn, Libellants' Dep's..· 20 23 . 193 36 Damages IUnited States.. 89 78 Geo. Goble and Jas. D. McFarlane ...··.·····. 3,638 00 - - - - 13,921 14
-49'17719;71107
IN BE
SCHOONER ELIZA
B. lllKOBT.
94:1
IN THE MATTER
OF
THE SCHOONER ELIZA B. EMORY, etc.
(District Oourt, D. New Jersey. June 21, 1880.) 1. PART OWNER-SAIUNG RIGHT-ESTOPPEL.-The part owner of a vessel is estopped by the attempted sale of a" sailing right," for which he has received.a pecuniary consideration, from joining in an application for the removal without cause of the purchaser of such" sailing right. OJ
Libel for Possession. S. H. Gray, for libellants. H. R. Edmunds, for respondents. NIXON, D. J. The libel is filed in this case by John B. Clayton, Charles Lawrence, Nicholas Clayton and Enoch B. Champion, owners of the seventeen thirty-seconds of the schooner Eliza B. Emory, for the possession of the said vessel. It alleges that when the libellants the owners of their respective interests one Daniel R. Weeks was the master in charge, but desiring a change, and representing a majority of shares in said schooner, they appointed John B. Clayton master, to navigate and sail her, and applied to the said Weeks to deliver up the possession of the papers, and of the said vessel, which he refused to do. The answer of Daniel R. Weeks, for himself and the remaining owners, does not deny that the libellants represent a majority of the shares in the ownership of the schooner, but claims that he ought not to be deprived of the command and management for the reason that in the month of April, 1874, John B. Clayton, one of the libellants, sold to him one-sixteenth part of said vessel for the price of $1,750, agreeing to give, and assuring the said Weeks that he should have, the right to sail and manage her if he would pay him (Clayton) the sum of $1,750 for said interest; that the value of the sixteenth did not exceed $500, and the excess, to-wit, $1,250, was demanded by Clayton, and paid by Weeks, for the privilege of sailing the vessel as master; that Weeks also agreed at the same time with the said Clayton to sail the schooner on what is known as "quarter shares," Clayton assuring him (Weeks) v.3,no.4-16
242
that the owners would not allow a larger interest for sailing; that Weeks sailed the vessel on "quarter shares," but in fact another one-quarter interest was also paid to another of the libellants, Nicholas Clayton, a brother of John B. Clayton, who thus received from the earnings of the vessel, during tha time she has been sailed and managed by the said Weeks, a sum of about $1,800, without the knowledge of the other owners, who were informed by the said John B. Clayton that Weeks was sailing on "half shares." The testimony shows that the libellant John B. Clayton was the master of the schooner from the time she was built, in 1861, until he sold out his interest to the present master, Weeks; that he was the owner of three thirty-seconds, and transferred at the same time two thirty-seconds to Weeks, and one thirty-second to Nicholas Clayton; that Weeks was then, and had been for some years before, the mate on board the said vessel, and that Clayton was allow"ed more than the real value of the shares on the agreement and promise that he should succeed to the position of master. The proctor for the libellants claims that the owners of a majority of shares have the legal right to control the sailing and navigation of the vessel, and that there is no such thing known in law as a sailing or master's interest which is capable of being transferred from one person to another. I think the correctness of the propositions must be admitted, whatever the prevailing opinion or practice among owners may be to the contrary. It seems now to be generally understood that the minority must submit to the will of the majodty in the management and control of the vessel; that it may employ or dismiss the master and crew at pleasure, and that no contract can be made between two part owners having minority interests, in reference to the employment of the master, which will bind other owners not parties to it. The New Draper,l C. Rob. 285; Ward v. Ruckman, 86 N. Y. 26; The W. Bagaley,5 Wall. 377-4:06. But this is not quite the question which this case presents. If the libellants represented a majority of the shares of the vessel, without including John
IN RE SCHOONER ELIZA B. EMOR'f.
243
B. Clayton's· interest, I should not hesitate for a moment to order a decree in their favor for the possession. But it is necessary to count him in order to constitute the majority, and the question here is whether it is competent for one part owner to make an agreement or arrangement with another part owner, in regard to the management and con· trol of the vessel, by which he may be afterwards estopped from claiming the management and control himself. It would not seem to be a difficult question to answer, if we may apply to a case in admiralty the same principles that are applicable to a suit in equity, and I do not see why we should not be allowed to do so. It is conceded that a court of admiralty is not a court of equity. It may, nevertheless, decide a cause submitted to its cognizance upon equitable principles. It has the capacity of a court of equity -in the matter of granting relief and of restraining a. wrong, when the rules of natural justice require a departure from strict legal relief. See Ben. Ad. § 329. Looking at the pleadings and proofs, and disregarding all facts which are not set forth in the pleadings, I find that this is a cause of possession, and that it has been brought to dispossess a master, who is also part owner, without any allegations of incompetency, unskilfulnesB, or dishonesty, on his part, but solely upon the ground that the libellants represent a majority of the parties interested in the schooner, and, as such, have the right to her possession and controL I find t.hat, aggregating their interests, all the libellants own seventeen thirty-seconds of the vessel, and that of these· shares John B. Clayton, one of the libellants, is the of ten thirty-seconds. I find that some years ago the said Clayton, being a part owner and the master, made sale of his then interest to the respondent Weeks, whom the libellants are endeavoring to dispossess, and that he received from Weeks at the time a considerable sum of money for what the parties thought was the .. sailing right" of Clayton. Should an admiralty oourt be made the instrument of aiding him to oust Wetlks, and to resume possession and control, be-
244
cause he has been able to buy in enough of the outsta.nding shares of the vessel to give him once more a majority? I should not like to be a party to any such unconscionable endeavor, and am glad that I do not find any principle of law that requires me to 1>.e one. It is conceded that a sailing right is not transferable, and that no such right inhered to the shares which Clayton sold to Weeks. It may also be conceded that if a majority in interest of the owners, irrespective of Clayton, claimed the possession, the court would accede to their request, although no cause for the master's removal were assigned. In saying this I do not overlook the remark of Sir William Scott, in The New Draper, supra, that, "in the case of the master and part owner, something more is required" than the mere expression of the will of the majority in interest "before the court will proceed to dispossess a person who is also a proprietor of the vessel, and whose possession, therefore, the common law, upon general principles, is inclined to maintain." Nor do I forget that two of the ablest text writers of this country (Story and Parsons) have given their assent to the law as thus stated. See Story . on Part. § 445, and Par. on Part. 562. But I think the later and better opinion is that the owners of the shares of a. vessel are tenants in common, and not partners, and that the logical sequence of such tenancy is that the majority in interest may displace the master at their will without cause assigned. Montgomery v. Henry, 1 DaI. 49-52. But, conceding these things, may not a part owner, by his act or conduct, forfeit his right .to complain of the possession of another part owner? May he not, by the acceptance of a consideration, estop himself from the exercise of his undisputed right, under ordinary circumstances, to take possession and control of a vessel from the person who paid him the considerationfor such possession and control? Although the doctrine of estoppel ordinarily rests upon the ground that the law will not permit a party to profit by his own fraud, is there not a class of cases where a person, wholly inuocent in a moral point of view, may be bound by his acts and sayings, where,
IN BE SOHOONER ELIZA. B. EMORY.
if he be not bound, he will be permitted to cttst an injury upon some one as innocent as he, but who has been misled by a confidence in what was said or done to him with the intent that he should rely upon it? Parsons on Oon. 801. It may be asked, as it was at the hearing, how can one be estopped by a contract which is void? The court enforces no contract, and does not seek to do so. It simply says to one of the part owners of a ,vessel : .. You have :{>laced yourself in such a position, in the performance of an illegal act, that it is inequitable to allow you to repudiate your action, and to do something contrary to it, to the injury of another. It is true that you had no 'sailing right' in the schooner which you could sell, but you made one of the subordinates, employed by you in navigating the vessel, believe that you had, and so induced him to pay you a liberal sum of money for the privilege of becoming master. You prefer no complaint that he does not faithfully perform his duties, but, with his money still in your pocket, you claim the active aid of the court in dispossessessing him and restoring you, because ;you have voluntarily purchased, or otherwise obtained, the control of enough shares to enable you to represent th& majority interest of the ownership." 1 must hold that until the majority in interest of the owners, without including Clayton, join in the application, there should be no decree for the libellants, and that the present libel be dismissed, with costs.
FEDBRAL npOB'l'BB.
KEARNEY f1.
A
PILE-DRIVER
and
STAGE,
eto.
(Disltrict Court, D. New Jersey.
Libel in rem. NIXON, D. J. It is not necessary to decide in this case, as 'Was suggested at the hearing, whether the master of a vessel can maintain in his own name a libel in ,.em for a towage service. Such a contract, doubtless, is a maritime one, and is cognizable in a court of admiralty in a suit by the owner. But in the present case the master is also the mortgagee and the mortgagee in possession, and as such is entitied to all the earn-ings of the vessel that the owner might claim if he had retained control. Having such a relation to, and claim npon, the vessel, he may use all the remedies that the legal owner has, and one of these is the right to file a libel in rem for earnings from towage. But the respondents have put in It claim, and have declined to pay upon two grounds: (1) Because the contract for towage was made with John Kearney, the father of the libellant, with whom they bargained as the ostensible owner of the Katy Smith; (2) because they had been restrained by an order of the supreme court of the state of New Jersey, made February 21, 1879, from the payment of the said debt "to John Kearney, or to anyone for him, or to any person whatever, until the further 9Il'-der of the ,said court."