New Lamp Chimney Co. v. Ansonia Brass & Copper Co., 91 U.S. 656
Case details
Citation
91 U.S. 656
Full caption
New Lamp Chimney Company v. Ansonia Brass and Copper Company.
Country
United States
Jurisdiction
Federal
Court
Supreme Court of the United States
Majority
Clifford (Justice)
Majority
Bbadlet (Justice)
Majority
Bradley (Justice)
Majority
Waite (Chief Justice)
New Lamp Chimney Company v. Ansonia Brass and
Copper Company.
1. The creditor of a manufacturing corporation, which was duly a ju bankrupt, who proved his claim and received a dividend t ereon, o• thereby waive his right of action for so much of t e c aim a unpaid* /» ziopppp tn \2. A decree adjudging a corporation bankrupt is in the nature o a . .
a. respect, tieL» of the corporation, and, if the court render! jurisdiction, can only be assailed by a direct procee ing in notjcfl court, unless it appears that the decree is void in form, or that due not. of the petition was not given.
Error to the Supreme Court of the State of New York The case was argued by Mr. J. M. Martin for t e p ai error, and by Mr. D. D. Lord for the defendant in error.
Mr. Justice Clifford delivered the opinion of the court.
Corporations, whether moneyed, business, or commercial, and joint-stock companies, are subject to the provisions of the Bankrupt Act; and the thirty-seventh section of the act provides to the effect, that upon the petition of any officer of any such corporation or company, duly authorized by a vote of a majority of the corporators at any legal meeting called for the purpose, or upon the petition of any creditor or creditors of the same, made and presented in the manner provided in respect to other debtors, the like proceedings shall be had and taken as are required in other cases of voluntary or involuntary bankruptcy; but the same section provides that no allowance or discharge shall be granted to any corporation or joint-stock company, or to any person or officer or member thereof. 14 Stat. 535.
Nine overdue promissory notes executed by the corporation defendants were held by the corporation plaintiffs, amounting to the sum of $5,266.94; and they instituted the present suit in the Supreme Court of the State to recover the amount.
Service being made, the defendants appeared, and set up as a defence in their answer, that they, the defendants, had on their own application been declared bankrupt, and that the plaintiffs had proved the claim in suit in the bankrupt proceedings, and had been paid a dividend on the same, and that they were thereby prevented under the Bankrupt Act from recovering the c aim or any part of the same in a subsequent action.
Issue being joined, the parties went to trial; and, the bankrupt proceedings having been introduced in evidence, the efendants moved the court to dismiss the suit, insisting that t e plaintiffs, having proved the claim in the bankrupt proceedings and received a dividend on the same, had waived the cause o action j but the presiding justice denied the motion, and irected the jury to render a verdict in favor of the plaintiffs or t e balance due on the notes. Exceptions were duly filed th e defendants, and they appealed to the general term, where
6 gmenf was affirmed; the court holding that the bankrupt bank ^H^dle^on to adjudge the defendant corporation rupt, and that the proceedings in bankruptcy were void. Barb8 436 Copper Company v. Lamp Chimney Company, 64
VOL. I. 42
Still dissatisfied, the defendants appealed to the Court of Appeals of the State, where the parties were again fully heard; and the Court of Appeals affirmed the judgment rendered by the court sitting in general term, holding that the decree of the Bankrupt Court adjudging the defendant corporation bankrupt, and the subsequent proceedings in pursuance of the same, did not have the effect to discharge the corporation from the claim in suit beyond the amount paid to the plaintiffs as dividends, even though the claim was proved by the plaintiffs in the bankrupt proceedings. Same v. Same, 53 N.Y. 124.
Sufficient appears to show that the defendants are a manufacturing corporation organized under the law of the State, which authorizes three persons to form such a corporation, and requires that the trustees shall be stockholders of the company. Sess. Laws (1848), ch. 40, p. 54.
Nothing being alleged to the contrary, it must be assumed that the corporation was duly organized. It appears that a meeting of the trustees was duly called and notified to inquire into the condition of the affairs of the corporation; that the meeting was regularly held, and, it having been ascertained to the satisfaction of the meeting that the corporation was insolvent, it was voted and resolved, by a majority of the trustees present, that the president of the company be required to file a petition in the District Court that the corporation may be adjudged bankrupt. Such a petition was accordingly filed, and, if the president of the company was duly authorized to sign and file it, the plaintiffs do not deny that the bankrupt pro ceedings were regular.
Two objections are taken to the jurisdiction of the Bankrupt Court, which, in point of fact, involve the same considera tions. They are, that the majority of the stockholders di no sign the petition filed in the District Court, and that the pre dent of the corporation was not authorized to sign it, w c a mere inference from the fact that the meeting, when t and resolution were adopted, was a regular meeting 0 trustees: but inasmuch as the statute of the State requires the trustees shall be stockholders, and no objection is to the organization of the company, it may well be pre that the trustees were stockholders as required by aw.
As before remarked, three persons may form such a corporation. The record shows that a majority of the trustees present adopted the vote and resolution, which necessarily implies that a minority did not concur; and if not, then certainly there must have been three or more present. The record does not show that the whole capital stock of the company is not owned by three persons.
Viewed in the light of these suggestions, it follows that the want of jurisdiction in the Bankrupt Court is not clearly shown, and that the case is plainly one where every presumption should be that the action of the court was rightful.
Due notice, it is conceded, was given to all concerned, and that the defendants appeared in the Bankrupt Court, and that they never made any objection to the jurisdiction of the court; and, in view of these circumstances, the rule is that every presumption is in favor of the legal character of the proceedings. Voorhees v. Bank, 10 Pet. 473.
Concede that, still it is said that courts created by statute cannot have jurisdiction beyond what the statute confers; which is true: but no such question arises in the case before the court, as all concede that the District Court had jurisdiction of the subject-matter, and that the defendants appeared, and claimed and exercised every right which the Bankrupt Act confers. They are, therefore, estopped to deny the jurisdiction of the court; nor are the plaintiffs in any better condition, un-ess it appears that the bankrupt proceedings are actually void, oid proceedings, of course, bind no one not estopped to set up t e objection; and, in order to establish the theory that the proceedings in this case are void, the plaintiffs deny that the president of the corporation was authorized to make and file a Potion in the District Court. McCormick v. Pickering, 4 Comst. 279.
uch a petition might properly be made by the president of e company, and be by him presented to the District Court, was thereto duly authorized at a legal meeting called for whAH^^k86 a V0^e a majority of the corporators; and v i, F ,e Was so authorized or not was a question of fact to nr + mmed by the District Court to which the petition was n e, and the rule in such cases is, that if there be a total p. 660defect of evidence to prove the essential fact, and the court find it without proof, the action of the court is void; but when the proof exhibited has a legal tendency to show a case of jurisdiction, then, although the proof may be slight and inconclusive, the action of the court will be valid until it is set aside by a direct proceeding for that purpose. Nor is the distinction unsubstantial, as in the one case the court acts without authority, and the action of the court is void; but in the other the court only errs in judgment upon a question properly before the court for adjudication, and of course the order or decree of the court is only voidable. Staples v. Fairchild, 3 Comst. 46 ; Miller v. Brinkerhoff, 4 Den. 119; Voorhees v. Bank, 10 Pet. 473; Kinnier v. Same, 45 N. Y. 539.
Jurisdiction is certainly conferred upon the District Court in such a case, if the petition presented sets forth the required facts expressly or by necessary implication, and the court, upon proof of service thereof, finds the facts set forth in the petition to be true; and it is equally certain that the District Court has jurisdiction of “ all acts, matters, and things to be done under and in virtue of the bankruptcy until the final distribution and settlement of the estate of the bankrupt and the close of the bankrupt proceedings. 14 Stat. 518.
Power, it is true, is vested in the circuit courts in certain cases to revise the doings of the district courts, and in certain other cases an appeal is allowed from the District Court to the Circuit Court; but it is a sufficient answer to every suggestion of that sort that no attempt was made in the case to seek a revision of the decree in any other tribunal. Nothing of the kind is suggested, nor can it be, as the record shows a regu a decree unreversed and in full force.
Grant that, and still the proposition is submitted that tne decree was rendered without jurisdiction, for the reaso signed; and that that question is open to the defen ants, eve though the decree was introduced as collateral evi ence suit at law or in equity in another jurisdiction. But ec here is entirely of a different opinion, as the is ric are created by an act of Congress which con ers an their jurisdiction; from which it follows that t eir ec dered in pursuance of the power conferred are en i e
other court to the same force and effect as the judgments or decrees of any domestic tribunal, so long as they remain unreversed and are not annulled. Shawhan v. Merritt, 7 How. 643; Huff v. Hutchinson, 14 id. 588; Parker v. Danforth, 16 Mass. 299; Pecks v. Barnum, 24 Vt. 76; 2 Smith’s Lead. Cas. (7th ed.) 814.
Judgments or decrees rendered in the district courts may be impeached for the purpose of showing that the particular judgment or decree was procured for the purpose of avoiding the effect and due operation of the Bankrupt Act, and competent evidence is admissible for that intent and purpose; but the judgment or decree of the District Court, in a case like the present, is no more liable to collateral impeachment, except to show that it was designed to prevent the equal distribution of the debtor’s estate, than it is to such impeachment in the court where it was rendered. Palmers. Preston, 45 Vt. 159 ; Miller v- U.S., 11 Wall. 300.
Authority to establish uniform laws upon the subject of bankruptcy is conferred upon Congress ; and, Congress having made such provision in pursuance of the Constitution, the jurisdiction conferred becomes exclusive throughout the United States. By the act of Congress, the jurisdiction to adjudge such insolvent corporations as are described in the thirty-seventh section of the act to be bankrupts is vested in the district courts, and it follows that such a decree is entitled to the same verity, and is no more liable to be impeached collaterally than te decree of any other court possessing general jurisdiction; w ic of itself shows that the case before the court is controlled _ y e general rule, that where it appears that the court had juris iction of the subject-matter, and that process was duly serve or an appearance duly entered, the judgment or decree s cone usive, and is not open to any inquiry upon the merits.
ri\ 8 kead’ Cas. (7th ed.) 622; Freeman on Judgments k e.) sect. 606; Hampton v. McConnel, 3 Wheat. 234; Gelon v. Hoyt, id. 312 ; Slocum v. Mayberry, 2 id. 10; Nations v. *^ 24 How. 203; D’Arcy v. Ketcham, 11 id. 166 ; Wei-v. Heid, id. 437, nature f e^ree adjudging a corporation bankrupt is in the a ecree in rem, as respects the status of the p. 662corporation; and, if the court rendering it has jurisdiction, it can only be assailed by a direct proceeding in a competent court, unless it appears that the decree is void in form, or that due notice of the petition was never given. Way v. How, 10 Mass. 503; Ex parte Wieland, Law Rep. 8 Chan. App. 489; Ocean Bank v. Olcott, 46 N.Y. 15; Revell v. Blake, Law Rep. 7 C. P. 308.
Suppose that is so: then it is insisted by the defendants that the case before the court is controlled by the twenty-first section of the Bankrupt Act, which, among other things, provides that no creditor proving his debt or claim shall be allowed to maintain any suit at law or in equity therefor against the bankrupt, but shall be deemed to have waived all right of action and suit against the bankrupt, &c. 14 Stat. 526.
Debtors, other than corporations and joint-stock companies, are certainly within that provision ; and if corporations are also within it, then it follows that the judgment must be reversed, as the plaintiffs are not entitled to recover. Instead of that, the plaintiffs deny that corporations or joint-stock companies are within that provision, and insist that the case before the court is controlled by the thirty-seventh section of the Bankrupt Act, which provides that no allowance or discharge shall be granted to any corporation or joint-stock company, or to any person or officer or member thereof; which is the view of the case taken by the Court of Appeals of the State whose judgment is brought into review by the present writ of error. Id. »35; Brass and Copper Co. v. Lamp Chimney Co., 53 N. Y. 124.
Difficulties perhaps insurmountable would attend the t eory of the plaintiffs if the twenty-first section of the Bankrup Act stood alone; but it does not stand alone ; and, being a pa of a general system of statutory regulation, it must e rea applied in connection with every other section appe am £ the same feature of the general system, so that each an section of the act may, if possible, have their ue an effect without repugnancy or inconsistency. ,
Statutes must be interpreted according to t e meaning of the legislature; and that intention mu, cable, be collected from the words of the act itse ; , language is ambiguous, it may be collected rom o
pari materia, in connection with the words, and sometimes from the cause or necessity of the statute : but where the language of the act is unambiguous and explicit, courts are bound to seek for the intention of the legislature in the words of the act itself, and they are not at liberty to suppose that the legislature intended any thing different from what their language imports. Potter’s Dwarris, 146.
Words and phrases are often found in different provisions of the same statute, which, if taken literally, without any qualification, would be inconsistent, and sometimes repugnant, when, by a reasonable interpretation, — as by qualifying both, or by restricting one and giving to the other a liberal construction, — all become harmonious, and the whole difficulty disappears; and in such a case the rule is, that repugnancy should, if practicable, be avoided, and that, if the natural import of the words contained in the respective provisions tends to establish such a result, the case is one where a resort may be had to construction for the purpose of reconciling the inconsistency, unless it appears that the difficulty cannot be overcome without doing violence to the language of the law-maker.
Sect. 21, if taken literally, would require that the whole claim of every creditor proving his claim, who is included within its operation, should be for ever discharged; but the thirty-third section of the act provides that no debt created by the fraud or embezzlement of the bankrupt, or by his defalcation as a public officer, or while acting in a fiduciary character, shall be discharged under the Bankrupt Act. Such e ts may be proved, and the provision is that the dividend t a be a payment on account of the debt; but it is incorrect u ®uPPose ^at the creditor, by proving such a debt, waives all right of action and suit against the bankrupt.” On the con rary, it is well settled that no consequences can be allowed ow from proving a debt which are inconsistent with the provisions of sect. 33. parte Robinson, 6 Blatch. 253; In re Bosenberg, 2 N. B. R. 81.
i +1^ bankrupt has in all things conformed to his duty and th $ ankruPt Act, he is entitled to receive a discharge; grant J l section provides that a discharge duly s a, with the exceptions specified in the preceding p. 664section, release the bankrupt from all debts, claims, liabilities, and demands which were or might have been proved against his estate in bankruptcy.
Debts due to the United States are not enumerated in the exceptions contained in sect. 33; but all admit that such debts may be proved in the bankrupt proceedings; and yet it is settled law that the certificate of discharge does not release any ' debt which the bankrupt owes to the United States. United States v. Herron, 20 Wall. 253.
Other examples of the kind might be referred to where it has become necessary to qualify, restrict, or limit certain provisions of the Bankrupt Act, in order to reconcile seeming incongruities and inconsistencies; but those mentioned will be sufficient for the present investigation.
Beyond all question, corporations of the kind and joint-stock companies are brought within the provisions of the Bankrupt Act by the thirty-seventh section; and the whole administrative proceedings in respect to such bankrupt corporations and joint-stock companies are specifically regulated by that section as a separate feature of the bankruptcy system. Much of the system applicable to such corporations and companies, it is true, is borrowed by general phrases from the other sections of the same act; but only such portions of the same as are expressly or impliedly adopted by that section are applicable to such corporations and companies, as clearly appears from the distinct features of the regulations prescribed, which are as follows:
(1.) That the officer signing the petition for voluntary bankruptcy must be duly authorized by a vote of the majority o the corporators at a legal meeting called for the purpose. ( •) That the petition for involuntary bankruptcy may be ma e an presented by any creditor or creditors in the manner provi e in respect to debtors, without any specification as to the:n of the creditors or the amount of their debts. . (3.) like proceedings shall be had and taken as provided m of debtors. (4.) That all the provisions in the act whic app y to the debtor, or set forth his duties in regar to u schedules and inventories, executing papers, submit ing amination, disclosing, making over, secreting, concca ini, veying, assigning, or paying away his money or prop
in like manner, and with like force, effect, and penalties, apply to each and every officer of such corporation or company in relation to the same matters concerning the corporation or company, and the money and property thereof. (5.) That all payments, conveyances, and assignments declared fraudulent and void by the act, when made by a debtor, shall in like manner, and to the like extent, and with like remedies, be fraudulent and void when made by a corporation or company. (6.) That no allowance or discharge shall be granted to any corporation or joint-stock company, or to any person or officer or member thereof. (7.) That all the property and assets of any corporation declared bankrupt by proceedings under the Bankrupt Act shall be distributed to the creditors of the corporation in the manner therein provided in respect to natural persons. 14 Stat. 535.
Special regulations in respect to petitions are enacted by sect. 37 of the Bankrupt Act, where the insolvent is a corporation or joint-stock company, different from those prescribed in cases where the insolvent party is a natural person or partnership. But, subject to the exception that no allowance or discharge shall be granted to any such corporation or joint-stock company, all of the administrative proceedings are to be the same as in case of bankrupt individuals, not because corporations are within the words of the other provisions of the Bankrupt Act, but because the thirty-seventh section of the act provides that the provisions of the act shall apply to such corporations and joint-stock companies; and it appears that all the a mmistrative proceedings, with that exception, are required A.6.® conformity to the regulations prescribed in respect to individual bankrupt debtors.
By the terms of the section, corporations adjudged bankrupt e a so made subject to the same duties as individual bankrupt ors jn regard to all the matters therein specified; but the nip atic exception to all those general regulations is that no io' i °r ^sc^arSe shall be granted to any corporation or thereof00 comPany’ or to any person, officer, or member
anv ^^t these suggestions, it is as clear as ependent upon the construction of a statute well p. 666can be, that Congress, in giving jurisdiction to the district courts to adjudge moneyed, business, and commercial corporations and joint-stock companies bankrupt, never intended to adopt the introductory paragraph of sect. 21 or sect. 32 as applicable to such corporations or companies. Neither corporations of the kind nor joint-stock companies are within the words of either of those sections ; and it is equally clear that nothing is contained in sect. 37 to support such a conclusion; from which it follows that the claim of the plaintiffs, beyond the amount received as dividends, is not discharged by the proceedings in bankruptcy.
Good and sufficient reasons may be given for granting a discharge from prior indebtedness to individual bankrupts which do not exist in the case of corporations, and equally good and sufficient reasons may be given for withholding such a discharge from corporations which do not in any sense apply to individual bankrupts. Certificates of discharge are granted to the individual bankrupt “ to free his faculties from the clog of his indebtedness,” and to encourage him to start again in the business pursuits of life with fresh hope and energy, unfettered with past misfortunes, or with the consequences of antecedent improvidence, mismanagement, or rashness.
Many corporations, it is known, are formed under laws which affix to the several stockholders an individual liability to a greater or less extent for the debts of the corporation, which, in case certain steps are taken-by the creditors, become in the end the debts of the stockholders. Such a liability does not, in most cases, attach to the stockholder until the corporation fails to fulfil its contract, nor in some cases until judgment is recovered against the corporation, and execution issued, an return made of nulla bona. Stockholders could not be liable in such a case if the corporation is discharged, nor the creditor recover judgment against the corporation as a necessary preliminary step to the stockholder s indivi ua
Consequences such as these were never contempla y Congress; and the fact that they would flow from t e e of the defendants, if adopted, goes very far to show a theory itself is unfounded and unsound. Instances p. 667individual liability are not rare; and it appears that the law under which the defendants were organized makes the several stockholders individually liable to the creditors of the company, in an amount equal to the amount of their stock, for all debts and contracts of the company, until the whole amount of the capital stock is subscribed and paid. Sess. Laws of N. Y. 1848, p. 56, sect. 10.
Bankrupts other than corporations or joint-stock companies, if they have conformed in all things to their duty under the Bankrupt Act, are entitled to receive a certificate of discharge; and the provision is that such certificate shall operate to discharge such a bankrupt from all debts and claims which by said act are made provable against his estate, subject, of course, to the exceptions described in the thirty-third section of the same act. Bennett v. G-oldthwait, 109 Mass. 494; Wilson v. Capuro, 41 Cal. 545; In re Wright, 36 How. Pr. 174.
Since this litigation was commenced, Congress has amended the twenty-first section of the Bankrupt Act, and provided that where a discharge has been refused, or the proceedings have been determined without a discharge, a creditor proving his debt or claim shall not be held to have waived his right of action or suit against the bankrupt. 18 Stat. 179.
Comment upon that provision is unnecessary, as it clearly appears that the unamended act did not discharge the claim of the plaintiffs. Judgment affirmed.
State of Florida v. Anderson et al.
ain railroad companies, availing themselves of the provisions of an act of the
g s a ure o Florida of Jan. 10, 1855, to provide for and encourage a liberal omT™®™1 imProve“-ts in that State, issued their bonds to the extent . $er m*le>the interest whereon was duly guaranteed by the trustees bppnm ln^rna™Provement fund created by the act. Such bonds thereby chisp r +r8 len °r.mortSage on the roads, their equipments, and the fran-
terp«t ’ ° e respective companies. The latter having failed to pay the inredpmnr 6 k°D 8’ °r ^ns^ment8 due the sinking fund for their ultimate undpr tk °n> i 6 were seized by the trustees, pursuant to their authority Thp iniA .S°^ ^°r an amount equal to the principal of the bonds. deliverimr1^^ a^owe<^ the privilege of paying the purchase-money by
g the bonds at their par value, nearly a million dollars of them were p. 668thus surrendered and cancelled; but a balance of about $472,000 remained unpaid. The purchasers obtained, however, a deed for, and took possession of, the property, being a line of road from Lake City to Quincy, with a branch from Tallahassee to St. Mark’s, and procured a new charter from the legislature, under the name of “ The Tallahassee Railroad Company.” Having subsequently consolidated their interests with the Florida Central Railroad Company, owning the road from Lake City eastward to Jacksonville, they procured another charter, with enlarged powers, creating a corporation by the name of “ The Jacksonville, Pensacola, and Mobile Railroad Company.” This last act of incorporation authorized the company to acquire and consolidate certain lines of road, and extend the same from Quincy westward to the western boundary of the State ; and, with a view to aid the company in the completion of this work, the act, as subsequently amended by the legislature, authorized the governor to loan the company bonds of the State, to an amount equal to $16,000 per mile, in exchange for an equal amount of the first-mortgage bonds of the company. In order to secure the principal and interest of the company’s bonds, it was declared “ that the State of Florida shall, by this act, have a statutory lien, which shall be valid to all intents and purposes as a first mortgage duly registered on the part of the road for which said bonds were delivered, and on all the property of the company, real and personal, appertaining to that part of the line which it may now have, or may hereafter acquire, together with all the rights, franchises, and powers thereto belonging, and in case of failure by the company to pay either principal or interest of its bonds, or any part thereof, for twelve months after the same shall become due, it shall be lawful for the governor to enter upon and take possession of said property and franchises, and sell the same at public auction. Under this power, bonds of the State to the amount of $4,000,000 were delivered to the company. The balance of the purchase-money due on the trustees’ sale remaining unpaid, and the Jacksonville, Pensacola, and Mobile Railroad Com pany having also failed to pay the interest on their bonds delivered to the State in exchange for those of the State aforesaid, the State and the trustees of the improvement fund commenced suit in a circuit court of the State to recover by a sale of the road the balance of such purchase-money, which was claimed to be a lien thereon. All then known parties having liens against the road were made defendants. Suit was also brought against the company, in another circuit, by certain first-mortgage bondholders. The Circuit ou of the United States for the Northern District of Florida also entertaine, a the instance of certain other bondholders, a suit in equity against the company and the trustees; but the bill, as against the latter, was dismissed by t e plainants. Under an arrangement between the complainants and the compari, a consent decree was obtained, declaring the bonds a first lien on t e roa, directing its sale to pay the same. Subsequently to the issue o t e e a bill was filed to carry the decree into execution, making the trus ees internal-improvement fund defendants, and charging them wit in en <n the road, and praying for an injunction. Meanwhile suit was c°mm the same court against the company by one H. for services ai ege been rendered it. Judgment was recovered accordingy or ’ ’ ¿en. the sale of the road thereunder, he became the purchaser or, tered into possession. Under these circumstances, the ta e o the bill in this suit.
Oct. 1875.] State of Florida v. Anderson et al. »669
Held, First, That the State has a direct interest in the railroad by reason of holding the $4,000,000 of bonds, which were a statutory lien on the road. That, as the title to the lands composing the internal-improvement fund were vested in the trustees merely as the agents of the State for a particular purpose, her interest is sufficient to give her a standing in court whenever the interests of that fund are brought before a court for inquiry. It is competent for her, therefore, in seeking equitable relief against citizens of another State for the protection of her interests, to file an original bill in this court.
Second, That the equitable lien for the unpaid purchase-money accruing upon the sale by the trustees resulted primarily to them as vendors, and became binding on the road in the hands of all subsequent purchasers taking with notice of the non-payment.
Third, That, as the guaranteed bonds import on their face an absolute promise to pay, the company giving them is primarily liable to the holder thereof for principal and interest as they respectively become due; and while he can, upon a breach of such promise, bring suit against the company, he cannot, as the primary right to proceed under the statutory lien is in the trustees, avail himself of that lien directly, as he could if it were a mortgage given to secure the bonds alone, but must induce the trustees to act in the mode pointed out by the statute. Upon their refusal so to act at the proper time, he may either compel them by mandamus, or file a bill in equity to obtain the relief to which he may be entitled.
Fourth, Where a sale is made by the trustees for the non-payment of interest or instalments due the sinking fund, and the principal of the bonds is not due, they have an option, after satisfying the arrears of interest, either to purchase up and retire the bonds, or to pay the balance into the sinking fund, and postpone the payment of the principal until the bonds arrive at maturity. By the purchase of a portion of the bonds, an obligation to purchase the remainder is not imposed upon the trustees, nor are they precluded from changing a resolution so to purchase.
Fifth, Holders of bonds so guaranteed, by procuring with the consent of the company a decree for the sale of the road to pay the interest, and especially e principal thereof, when the bonds contain no stipulation that the principa s all become due by the non-payment of interest, in a proceeding in which neit er the State nor the trustees were represented, and when the latter were pursuing their lawful remedy to subject the road to the payment of the purase money at a sale made by them, was an inequitable interference with, nd a fraud upon, their rights.
This is an original suit in equity instituted in this court.
It was argued by Mr. H. Bülee, Jr., for the complainant; M by Mr. Henry R. Jackson, Mr. Matt. H. Carpenter, and *• W. Boyce, for the defendants.
. Justice Bbadlet delivered the opinion of the court. 9H 'S 18 a bU1 in equity filed by the State of Florida (by its tees ^en®ra^’ 011 behalf of the said State and of the trusthe internal-improvement fund of the State, against p. 670670, State of Florida v. Anderson et al. [Sup. Ct.
Daniel P. Holland and Edward C. Anderson and others, citizens of Georgia. Sherman Conant, the Marshal of the United States for the Northern District of Florida, is made a formal defendant by reason of having in his hands an execution at the suit of some of the other defendants.
The subject-matter of the suit is a line of railroad in Florida extending from Jacksonville westwardly to Quincy about one hundred and ninety miles, with a branch from Tallahassee to St. Mark’s of twenty-one miles. It consists of three divisions, originally built and owned by different companies. The first division, from Jacksonville to Lake City, was built and owned by the Florida, Atlantic, and Gulf Central Railroad Company; the second, from Lake City to Quincy, by the Pensacola and Georgia Railroad Company; and the branch, from Tallahassee to St. Mark’s, by the Tallahassee Railroad Company. These companies were chartered in 1858 ; and after the passage by the State legislature, Jan. 6, 1855, of a certain act entitled “ An Act to provide for and encourage a liberal system of internal improvements in this State,” they severally availed themselves of its provisions, and issued bonds which were duly guaranteed by the trustees of the internal-improvement fund created by the act. This fund consisted of the five hundred thousand acres of public lands which became vested in the State under the grant made by Congress for the purposes of internal improvement by the act of Sept. 4, 1841 (5 Stat. 455), and of some fifteen millions of acres of swamp and overflowed lands granted by act of Congress of Sept. 28,1850, to enable the State to construct the necessary levees and drams to reclaim the same. 9 Stat. 519. By the internal-improvement act of Jan. 6, 1855, above referred to, these lands and their proceeds were constituted a distinct and separate un, be called “ The Internal Improvement Fund of the State ot t orida,” and were vested in the governor of the State, the comptroller, treasurer, attorney-general, and register of e and their successors in office, in trust to dispose o t e sa, and invest the proceeds, with power to pledge the un payment of the interest on the bonds (to the exten o ’ per mile) which might be issued by any railroa com constructing roads on certain lines indicated by t p. 671companies, after completing their roads, were to pay, besides interest on their bonds, one per cent per annum on the amount thereof, to form a sinking fund for the ultimate payment of the principal. The act declared that the bonds should constitute a first lien or mortgage on the roads, their equipment and franchises; and, upon a failure on the part of any railroad company accepting the act to provide the interest and the payments to the sinking fund as required thereby, it was made the duty of the trustees to take possession of the railroad and all its property, and advertise the same for sale at public auction.
In the management of the fund the trustees were to fix the price of the lands, having due regard to their location, value for agricultural purposes, &c., and make such arrangement for drainage of the overflowed lands as in their judgment might be most advantageous to the fund and the settlement and cultivation of the land; and they were directed to encourage actual settlement and cultivation of the lands by allowing preemptions under such rules and regulations as they might deem advisable, but not more than one section of land to any one settler. Other duties of a public character in relation to the lands were devolved upon the trustees by subsequent enactments.
At the close of the war, the railroads were in a dilapidated condition; and, the companies having failed to pay the interest and the instalments due to the sinking fund on their bonds, the roads were seized and sold by the trustees under the provisions 0 the act. The first section, from Jacksonville to Lake City, was sold in 1868, and the purchasers procured an act of incorporation under the name of “ The Florida Central Railroad Comf °^er two secti™s were sold on the 20th of March, , or an amount equal to the principal of the outstanding nissued on them ; and, the purchasers being in °th h 6 Paying ^e purchase-money by deliverg e bonds at their par value, nearly 81,000,000 of them were s surrendered and cancelled. But a balance of about 8472,-
iwhi Un^a^’ By some contrivance of the purchasers a„ • 4- ° tb® complainants and E. C. Anderson and his was n f6S ^Tee *n oharacterizing as fraudulent), this balance the agertTn^V^ WaS °nly formally settled by inducing e trustees to accept a check for the amount, p. 672upon the receipt of which they delivered to the purchasers a deed for the property which had been executed for that purpose and placed in their hands, and the purchasers possessed themselves of the road. This check was never paid. Anderson and others, defendants, or represented in this cause, hold upwards of $300,000 of the still outstanding guaranteed bonds of the Pensacola and Georgia and Tallahassee Railroad Companies, which the purchasers failed to deliver up, besides $103,- 000 which are in dispute.
The purchasers of the Pensacola and Georgia and Tallahassee Railroads, and their associates or assigns, applied to the legislature of Florida for a new charter, which was granted to them with the name of “ The Tallahassee Railroad Company; ” but after a few months, having procured another charter with enlarged powers, creating a corporation by the name of “ The Jacksonville, Pensacola, and Mobile Railroad Company,” they consolidated their interests with that company as early as May or June, 1870, and have ever since been known under that designation. It is conceded by Anderson and the other bondholders, and is clearly the result of the evidence in the case, that this company, whilst it succeeded to the rights of the purchasers at the trustees’ sale, received the property subject to the vendor’s lien for the payment of the balance of the purchase-money due on that sale. An adjudication to this effect has been made against the company in the suit in Duval County Circuit Court, hereinafter referred to.
The act which incorporated the Jacksonville, Pensacola, an Mobile Railroad Company authorized that company to consolidate and acquire all the roads before mentioned, and to ex tend the same from Quincy westward to the western boundary of the State in the direction of Mobile; and, with a view to ai the company in the completion of this work, the same act, a amended by an act passed Jan. 28, 1870, authorized the gove nor of the State to loan to it the bonds of the State to a amount equal to $16,000 per mile, in exchange for an eq amount of first-mortgage bonds of the company. In or er secure the principal and interest of the company s on, was declared that “ the State of Florida shall, by this ac, a statutory lien, which shall be valid to all intents an p p. 673poses as a first mortgage, duly registered, on the part of the road for which said bonds were delivered, and on all the property of the company, real and personal, appertaining to that part of the line which it may now have or may hereafter acquire, together with all the rights, franchises, and powers thereto belonging; and, in case of failure of the company to pay either principal or interest of its bonds or any part thereof for twelve months after the same shall become due, it shall be lawful for the governor to enter upon and take possession of said property and franchises, and sell the same at public auction.”
Under this power, State bonds to the amount of $4,000,000 were delivered to the company in exchange for $3,000,000 of the company’s bonds and $1,000,000 of the bonds of the Florida Central Railroad Company, and have been in whole or in part disposed of.
The balance of purchase-money accruing on the trustees’ sale still remaining unpaid, and the Jacksonville, Pensacola, and Mobile Railroad Company having also failed to pay the interest on their bonds, delivered in exchange for State bonds as aforesaid, a suit was instituted in March, 1872, by the State of Florida and the trustees of the internal-improvement fund against the company, in the Circuit Court of Duval County, at Jacksonville, to recover, by a sale of the railroad, the said balance of purchase-money, which was claimed to be a lien thereon. By an amended complaint, all known parties having liens against t e railroad were made defendants. Anderson and the other rst mortgage bondholders, who are defendants in this suit, were not made parties, because their interest was not then eemed adverse to that of the State. Holland was not made a par y, ecause at that time he claimed no interest in the property. On the commencement of this suit, the Duval County uit ourt appointed Jonathan C. Greeley receiver to take P session of the railroad and secure its receipts and earnings. n^?mmediately a Crop litigation sprang up, hostile to the tkaf a8ser^ed by State and trustees. It was contended v i erri^or^aJ jurisdiction of the court did not extend bewa T county limits, and that the authority of the receiver n0 6 ^^y, aud that the Florida Central Railroad
1y was not consolidated with the Jacksonville, Pensacola, vol. i. . ’ p. 674and Mobile Railroad Company; and other positions antagonistic to the rights and proceedings of the State were assumed, and suits were commenced in various courts to carry out these views. Amongst others, the Leon County Circuit Court (at Tallahassee) entertained a suit brought by some first-mortgage bondholders, and appointed a receiver, who took possession of the western part of the road. The result was, that the receiver appointed by the Duval County Court was dispossessed of the entire line.
At this point, in July, 1872, the defendants, Anderson and his associates, commenced a suit in the Circuit Court of the United States for the Northern District of Florida against the Jacksonville, Pensacola, and Mobile Railroad Company, and the trustees of the internal-improvement fund, upon the first-mortgage bonds held by them, claiming that these bonds were still a lien on the railroad, or at least entitled the holders to claim the unpaid purchase-money before referred to, and praying a sale of the road to pay their demand. The trustees pleaded to the jurisdiction of the court, alleging for cause, amongst other things, that it appeared by the bill and exhibits that the subject-matter of the bill was in the jurisdiction and possession of a circuit court of the State. The bill was thereupon volun tarily dismissed as against the trustees; and, by an arrangement made with the railroad company (which withdrew its answer), the complainants obtained a consent decree on the 19th o December, 1872, declaring the bonds a first lien on the railroad, and directing it to be sold to pay the same. An execution was issued on this decree and placed in the marshal’s hands, and a sale of the property was advertised. In September, ’ Anderson and his associates filed in the same, court ano bill to carry into execution their said decree, making the trus of the internal-improvement fund defendants, charging with an intent to seize the railroad, and praying an inju against their so doing. ., • Meantime the defendant, Holland, had commence a su the said Circuit Court o£ the United States against the Jae
sonville, Pensacola, and Mobile Railroad C°mPJny’ ° * compensation for alleged services; and on the anj 1872, he recovered a judgment by default for over, p. 675issued execution thereon. Under this execution the marshal advertised and sold the whole railroad in May, 1873; and Holland became the purchaser for the price of $20,000, and entered into possession. By an arrangement made with Anderson and his associates, Holland kept possession until the appointment of a receiver by this court.
Under these circumstances the State of Florida filed the bill in this suit, setting forth the principal facts before rehearsed, and praying that the sale under Holland’s judgment might be declared null and void, and that he might be enjoined from setting up any rights under it; that the decree obtained by Anderson and others might be set aside and declared null and void, and that they might be enjoined from setting up any rights under it. The bill having stated that the principal of the internal-improvement bonds held by the defendants was not yet due, and would not be due for many years to come, the complainant prayed the court further to decree that the defendants have no right to payment of their principal until their bonds mature; and that they are bound to resort to the internal-improvement fund as a primary fund for the payment of both principal and interest before resorting to the railroad. The bill concludes with a prayer for alternative and general relief. . It having become manifest to us in the course of the proceedings that the interest of all parties required that the fund in htigation should be under the control of this court, we appointed a receiver^ to take charge of the railroad, and operate the same. * fil ^emurrer bill having been overruled, answers were e y the defendants, and proofs taken; and the case is now e ore us on the pleadings and the evidence.
s our purpose to discuss minutely the questions of fact a ave. een raised by the parties. The most material quesdnnLi-^e er C0nce^e<^ by all the parties, or are so free from ria it.8 ° ren^er sucb discussion unnecessary. Our conclu„ i e«e°n become manifest as we proceed to give our general views upon the case. 8
Which naturally presents itself is, whether e o londa has such an interest in the subject-matter p. 676of the suit, and in the controversy respecting the same, as to give it a standing in court. It is suggested that the trustees of the internal-improvement fund are the only parties legally interested, and that they have no right to bring an original bill in this court. To this it may be answered, in the first place, that the State has a direct interest in the subject-matter (the railroad in question) by reason of holding (as it does) the four millions of bonds which are a statutory lien upon the road. In the next place, the interest of the State in the internal-improvement fund is sufficiently direct to give it a standing in court, whenever the interests of that fund are brought before a court for inquiry.
From the statement already made in reference to the history and character of this fund, and the duties of the trustees in regard to it, it is apparent that the trustees are merely agents of the State, invested with the legal title of the lands for their more convenient administration; and that the State remains in every respect the beneficial proprietor, subject to the guaranties which have been made to the holders of railroad bonds secured thereby. The residuary interest in the fund belongs to the State. The fact that the trustees consist of the governor and other executive officers, and that they are charged with the duties of drainage, reclamation, and settlement of the public lands (duties of a purely public character), shows that they are mere public agents invested with an important branch of the State administration.
Now, to protect its interests, it is competent for the State, seeking equitable relief against citizens of another State, to file an original bill in this court. The reference to the trustees in the bill cannot affect the jurisdiction of the court, inasmuch as they are not the litigants before it. It has frequently een decided in the circuit courts, where the jurisdiction depende on the citizenship of the parties, that such jurisdiction is no ousted, where there has been occasion to make a forma pa of a sheriff or other public officer by reason of his having a wr of execution, or being named as obligee in an official on sue for the benefit of private parties, provided that the rea pa to the litigation have the requisite citizenship. us ministration bond given to the surrogate or to the gove
a State may be sued in his name in the Circuit Court of the United States, though not having the requisite citizenship, if the party for whose benefit the suit is prosecuted has the requisite citizenship. These authorities apply equally to the case of the marshal who was named in the bill, but against whom no relief was sought. Several of the cases are reviewed in the recent case of the Coal Company v. Blatchford, 11 Wall. 172; and a further discussion of the subject at this time is unnecessary.
We come, then, to the principal question in the cause; which is, whether upon the pleadings and evidence in the case the complainant has ground for the relief sought, or for analogous relief, admissible under the general prayer of the bill.
The equitable lien for the unpaid purchase-money accruing upon the trustees’ sale of the railroad in 1869 resulted primarily to the trustees as the vendors, and became binding on the road in the hands of all subsequent purchasers taking with notice of the non-payment. As before stated, the Jacksonville, Pensacola, and Mobile Railroad Company undoubtedly took the property subject to this lien; and it has been so decided in the Duval County suit. The defendant, Holland, stood in no better situation. He had full knowledge of the circumstances before obtaining his judgment, and purchased only the right, title, and interest of the company. His claim to hold the property clear of the lien, and to take the rents and profits, when the State is seeking to have the r<5ad and profits secured and applied to the satisfaction thereof, is inequitable and unjust. Independent of any claim of the State under the $4,000,000 of onds issued in 1870, he has no right to oppose it in its efforts secure satisfaction of the original purchase-money of the property. His judgment may be perfectly valid as against the rm roa company, and he may have acquired under it all ng t, title, and interest of said company; but nothing
As against the claims of the State, he has no right to pp opriate to himself the possession and emoluments of the
v emP^°ymen^ °f judicial process for that purpose, _ , °Ug i Pow^rs of the receiver should be successfully ontroverted is inequitable so long as the rights of the State us aine, or not disaffirmed by the proper courts.
As to the bonds given by the railroad company to the State in 1870 in exchange for its bonds, Holland does not directly question their validity, though he insists that the latter were issued in violation of the constitution of the State. The validity of these bonds is a delicate question, and one which it is eminently proper that the courts of Florida should determine. ■ The judges of the Supreme Court of that State, in answer to certain questions propounded by the governor, in accordance with a provision of the State constitution, have given an official opinion which has been generally understood as favorable to the validity of the bonds. Until that court shall decide the contrary, we prefer to take that view; and, regarding the bonds of the company as valid and binding, the right of the State as against the pretensions of Holland to control the possession and emoluments of the property cannot be doubtful. Should the State courts hereafter determine against the validity of those bonds, further consideration of the subject can be had. Of course, if it were necessary to do so, this court would not hesitate to pass upon that question; but we do not deem it necessary in this suit, which, in its nature, is rather to be re garded as ancillary to the judicial proceedings adopted by the State in Florida.
The position of Anderson and his associates is different. They claim that their bonds are still a first lien on the railroad, notwithstanding the trustees’ sale; and that at all events, though the principal of their bonds is not due, they are entit e to prosecute the lien for the unpaid purchase-money due on sai sale in order to obtain satisfaction of their bonds. They claim that their right to do this is paramount to that of the ta e the trustees, inasmuch as the amount to be recovere is P" plicable to the payment of the said bonds; and this is rea y the question at issue between these parties. ts so u quires that we should examine a little more care u y else nature of the guaranty given to the bonds, ?ha^ n upon the internal-improvement fund. The entue ir of the act of Jan. 6, 1855, on which the controversy principally
depends, is as follows: —
“Sect. 3. Be it further enacted. That all bonds issue railroad company under the provisions of this act s
in the comptroller’s office, and so certified by the comptroller, and shall be countersigned by the State treasurer, and shall contain a certificate on the part of the trustees of the internal-improvement fund that said bonds are issued agreeably to the provisions of this act, and that the internal-improvement fund, for which they are trustees, is pledged to pay the interest as it may become due on said bonds. All bonds issued by any railroad company under the provisions of this act shall be a first lien or mortgage on the roadbed, iron, equipment, workshops, depots, and franchise; and upon a failure on the part of any railroad company accepting the provisions of this act to provide the interest as herein provided on the bonds issued by said company, and the sum of one per cent per annum as a sinking fund, as herein provided, it shall be the duty of the trustees, after the expiration of thirty days from said default or refusal, to take possession of said railroad and all its property of every kind, and advertise the same for sale at public auction to the highest bidder, either for cash or additional approved security, as they may think most advantageous for the interests of the internal-improvement fund and the bondholders. The proceeds arising from such sale shall be applied by said trustees to the purchase and cancelling of the outstanding bonds issued by said defaulting company, or incorporated with the sinking fund; provided that, in making such sale, it shall be conditioned that the purchasers shall be bound to continue the payment of one-half of one per cent semi-annually to the sinking fund until all the outstanding bonds are discharged, under a penalty of the annulment of the contract of purchase and the forfeiture of the purchase-money paid in.”
Of course, the company giving the bonds is primarily liable to the bondholders for principal and interest as they become due, inasmuch as the bonds import on their face an absolute promise to pay; and, on failure to pay, suit may be instituted at once against the company. Back of this personal liability 0 comPany, the bondholder has a double security: first, t e guaranty of the internal-improvement fund ; and, secondly, t e statutory lien on the railroad. He cannot avail himself 0 t e latter directly, as he could if it were a mortgage given to secure the bonds alone; but he must induce the trustees to act 6 Panted out by the statute. If they refuse to act en they ought to do so, the bondholder may either compel em to act by mandamus^ or file a bill in equity to obtain the
relief to which he may be entitled.
It is seen, however, that the primary right to proceed against the property is in the trustees, and not in the bondholders. But if principal or interest become due and be unpaid, and the trustees have not the means to pay it from any available resources of the internal-improvement fund in one case, or the sinking fund in the other, it will be their absolute duty to proceed against the property.
In the present case, the trustees did initiate proceedings, and did sell the property by virtue of the lien created by the statute j and through that sale they succeeded in extinguishing a large amount of the outstanding bonds. But the purchasers failed to pay the entire purchase-money, and a vendor’s lien attached. The original lien of the bonds was consummated and merged in the title which the purchasers acquired by the sale. Anderson and company cannot set it up anew without repudiating the sale, and bringing back upon the property, in coexistence with their own claim, the lien of the $1,000,000 of bonds which have been cancelled. This, it is presumed, they are not prepared to do. Indeed, they nowhere attempt to repudiate the sale. They claim, that, notwithstanding the sale, the lien of their bonds still subsists. But this cannot be. The sale was made by virtue of the joint statutory lien of all the bonds, and vested in the purchasers a title clear of them all, subject only to the vendor’s lien for the purchase-money. As already seen, by the internal-improvement agt, only the interest of the bonds is guaranteed upon the credit of the internal-improvement fund: the principal is provide for by the creation of the sinking fund, which is a charge on the road in the hands of all purchasers until the bonds are satisfied. When a sale is made by the trustees for non-payment o interest or sinking fund, and the principal of the bonds is no due, they have an option (of course, after satisfying t e arreai of interest) either to purchase up and retire the bonds, or o pay the balance into the sinking fund, and postpone t e payment of the principal until the bonds amve at matunty Which of these two things they shall do is entire y m discretion; and a purchase by them of a portion o e does not impose upon them the obligation to purchase the b ance. Nor does a resolution to purchase bonds, forme
time, preclude them from changing that resolution at a subsequent time. The contrary position assumed by the defendants we consider as untenable, and repugnant to the spirit of the act.
In the present case, as we have seen, the principal of the bonds is not due; and, if the trustees should collect the balance of purchase-money to-day, it would be in their option to purchase the bonds or not. There is no stipulation in the bonds that the principal shall become due by the non-payment of the interest. The getting of a consent decree by the bondholders for the sale of the road to pay their bonds, and especially the principal thereof, in a proceeding in which neither the State nor the trustees were represented, and when the latter were pursuing their lawful remedy to subject the road to the payment of the purchase-money (as was their duty to do), was an inequitable interference with, and a fraud upon, their rights.
We are of opinion, therefore, that the defendants ought to be enjoined from selling, taking possession of, or interfering with the railroad property in question (that is to say, the line of railroad extending from Lake City to the Chattahoochee River, and from Tallahassee to St. Mark’s), so as in any manner to impede, obstruct, or hinder the State of Florida, or the trustees of the internal-improvement fund, in taking possession of the property, or in procuring it to be condemned and sold for the purpose of raising and paying the unpaid purchase-money, and such amount as may be adjudged or decreed by the proper courts or tribunals in that behalf to be due to the State upon the bonds delivered to its officers by the Jacksonville, Pensacola, and Mobile Railroad Company, under the act of Jan. 28,1870.
A decree will be made accordingly.
It will also be proper to continue the receiver appointed by s court until the property can be delivered up to some proper n competent officer or persons having the requisite authority to receive the same.
The decree should contain a proviso that it is not intended h 6 right of Anderson and the other first-mortgage o ers to demand and receive from the State or the trus-
, out of the proceeds of said property, or of said internal- p. 682improvement or sinking funds, respectively, any amount of principal or interest which may be or may become due on their bonds ; nor to affect the validity of their decree in the Circuit Court, except as above stated.
DECREE.
This cause coming on for hearing upon the pleadings and proofs, and being argued by Mr. Bisbee for the complainant, and by Messrs. Jackson, Carpenter, and Boyce for the defendants, and the court having considered of the same, it is now, on this thirteenth day of December, 1875, ordered, adjudged, and decreed, that the defendants, and each of them, be perpetually enjoined from hindering, or interfering with, or disturbing the State of Florida, or any of its officers or agents (including the trustees of the internal-improvement fund of said State), or any officer or receiver appointed or acting in its behalf, in the possession, management, or control of the railroad of the Jacksonville, Pensacola, and Mobile Railroad Company, extending from Lake City westwardly to or beyond the Chattahoochee River, and from Tallahassee to St. Mark’s, with the appurtenances thereof and property belonging thereto; and that Edward C. Anderson, Jr., and others, defendants herein, holders of first-mortgage bonds of the Pensacola and Georgia and Tallahassee Railroad Companies, in whose favor a decree was rendered in the Circuit Court of the United States for the Northern District of Florida on the nineteenth day of December, 1872, directing amongst other things a sale of said railroad, be per petually enjoined from selling, or procuring to be sold, said railroad and property under or by virtue of said decree, or any decree supplementary thereto in the same case: provi e, however, that nothing herein is intended to preclude the rig of the said Anderson and others to demand and receive rom the State of Florida or the said trustees, out of the proceeds o said property, or of said internal-improvement fun, or sinking fund provided in that behalf, respectively, t e p cipal and interest which may be or may become due on said bonds; nor to affect the validity of the said decree, ex as above expressed: and provided, further, that t is ec not intended to prejudice the right of the defen an, p. 683P. Holland, to contest in any competent court or proceeding the validity of the bonds issued by the Jacksonville, Pensacola, and Mobile Railroad Company in exchange for the bonds of the State of Florida under the act of the legislature of said State passed Jan. 28, 1870, recited in the pleadings in this cause; nor to prejudice any right which said Holland may have to redeem said railroad by the payment of the unpaid purchase-money mentioned in the said pleadings, with all interest thereon and lawful charges on said road, in case it should be adjudged that the said bonds are invalid.
It is further ordered and decreed, that the legal costs and charges of the State of Florida in this cause, and the fees and costs due to the officers of this court therein, be allowed and paid out of the moneys in the hands of the receiver.
It is further ordered, that the receiver do pay out of the moneys in his hands the lawful fees and charges of the master who took the depositions and proofs in the cause; and that he settle his accounts before the clerk of this court, subject to the direction and approval of the Chief Justice.
And all further equities and directions arising upon the decree are hereby reserved.
At a subsequent day of the term, Mr. Edward N. Dickerson submitted a motion, due notice having been given thereof, that so much of the railroad and property thereto belonging as lies between Quincy and the Chattahoochee may be surrendered to James G. Gibbs, and that the receiver be discharged from that portion of the railroad, and be ordered to pay said Gibbs for t e use thereof during such time as the same has been in the possession of the receiver.
At the same time, Anderson and others filed a petition for further direction under the decree. The Jacksonville, Pensacola,
HaHroa(l Company filed a petition for the possession e road as against the State; and the complainant moved to isc arge the receiver, and surrender the entire property to such agent as should be appointed by the State of Florida. A petia^° ^°r Paymen^ legal costs, charges, &c.
the matters arising upon the motions and petitions were rgued by Mr. E. A. Dickerson, Mr. H. Bisbee, Jr., Mr. Matt. p. 684H. Carpenter, Mr. W. IF. Boyce, Mr. W. Gr. M. Davis, Mr. D. P. Holland, and Mr. William Birney, on behalf of the respective parties in interest.
Me. Justice Bradley delivered the opinion of the court.
By the decree made in this case, we granted an injunction against the defendants to restrain them from hindering, interfering with, or disturbing the State of Florida in the possession, management, or control of the Jacksonville, Pensacola, and Mobile Railroad, extending from Lake City westwardly to or beyond the Chattahoochee River, and from Tallahassee to St. Mark’s; saving to Edward C. Anderson, Jr., and others, holders of the first-mortgage bonds, their right to demand and receive from the State of Florida, or the trustees of the internal-improvement fund of said State, the amount due or to become due on their bonds; and saving to the defendant, Daniel P. Holland, the right to contest the bonds given by said company in exchange for bonds of the State of Florida to the amount of three millions of dollars, and any right of redemption which the said Holland might have in said property. The rights claimed by Holland have since been fully contested by him in the State courts, and their decision is adverse thereto. The Supreme Court of Florida has adjudged that the sale of the railroad under Holland’s execution was null and void as against the State, and gave him no right to the possession or income thereof. This decision relieves this court from any embarrassment as to the disposition of the property. The State is the only proper party to receive it.
This suit was brought against Anderson and company an Holland, to prevent them from intermeddling with the property whilst being pursued by the State in due course of litigation in the State courts. It was in part ancillary to the relief soug there. When brought, neither of the defendants was a party to that litigation, all being citizens of Georgia, and not personally amenable to the courts of Florida, except by their o consent, or by being accidentally found there. Since i however, Holland has voluntarily made himself a. party suit in the State court, and has procured the decision re erre to. By that decision, it is determined that the bon s gu e p. 685the railroad company to the State in exchange for State bonds in 1870 are valid to the extent of being security to the purchasers of the State bonds for the amount justly due to them, and create a statutory lien on the railroad prior to the judgment obtained by Holland or any other party, and entitle the State to seize and sell the same; and Holland has, therefore, been perpetually enjoined by the State court from interfering with the State in the possession of the road and its appurtenances. The majority of the Supreme Court went even farther, and held, that, by the laws of Florida, the railroad could not be levied on and sold under an execution at all.
Under these circumstances, and in view of the decree already made by this court, it would be improper to direct the delivery of the property to Holland. As this court has not cognizance of the principal litigation in the case, and cannot make any final disposition of the property, — being only called upon to decide on the conflicting rights of the State and the respective defendants to the immediate possession of it, — the only thing left for the court to do (having exercised all the jurisdiction it was called upon to exercise) is to order the receiver to deliver the property to the State, and to dispose of any moneys in the hands of the receiver.
Holland strenuously insists that the property ought to be restored to him, because he was in possession of it at the commencement of the suit. But he went into possession after the commencement of the suit in the State court, and we have expressly decided that his possession was inequitable; and, efore the appointment of a receiver by this court, he had been eprived of that possession by the action of the State court.
e receiver appointed by that court had taken the property out of his hands. It is true, we had required Holland to account us for the income, and regarded the seizure of the property as interfering with that jurisdiction which the State itself, the . alnan^ ^ere, and also the complainant and moving party m the State court, had requested us to assume. We therefore justified in appointing a receiver to take full possession of property; and the State court has since been held to have a n° jurisdiction over the subject-matter. But there is mg m these circumstances that gives Holland any right to p. 686reclaim that possession when it may be resigned by our receiver. Holland’s claim has been overruled by both the judgment of this court and of the State courts; and it would be worse than a vain and idle ceremony to deliver the property to him after these adjudications. It would be plunging the whole property into a new sea of litigation.
The claim of Gibbs to the possession of the road west of Quincy has more plausibility. It seems, that, at the commencement of this suit, Holland had possession of that part as a tenant of Gibbs. But the road is certainly a part of the entire line, and the title of Gibbs is disputed by the State, who claims that the statutory lien of the bonds issued in 1870 is paramount to all others; and neither Gibbs, nor any person holding under him, was in possession when the receiver was appointed by this court. Our receiver, in taking possession, did not take it from his hands, but from the hands of the receiver appointed by the State court, in the manner before adverted to. We think that no injustice will be done, but that the interest of all parties will be subserved, by delivering the road entire to the agent appointed by the State to receive the property, subject to the right on the part of Gibbs to institute legal proceedings against said agent for testing the question as to his right of possession. That part of the road, therefore, will be delivered to said agent subject to this right, so that Gibbs may not be embarrassed by being placed in the position of having to bring suit against the State. The question of his right is a question of law which can be submitted to the courts of Florida without much delay or expense.
The counsel of Gibbs object that he is not a party to this suit, and his rights ought not to be compromitted by the judg ment or action of the court; and they insist that he ought to be placed in statu quo ante helium. We do not decide upon is rights; we leave them just as they were: and as to the pos session, we place it in the hands of the party at whose instan the receiver was appointed who had possession when it w assumed by this court. .
As to the railroad between Lake City and Jacksonvi e longing to the Florida Central Railroad Company, an is still in the possession of our receiver for the purpose o p. 687taining payment of advances made by him in making necessary improvements on the road, as the amount due for those advances has been much reduced, we see no reason for further withholding the possession from the Florida Central Railroad Company. That road, therefore, will be directed to be delivered to said company, but subject to a claim on the part of the State to any balance which may be still due for the advances made by the said receiver, after all proper allowances to said company upon a due adjustment of the accounts between it and the receiver.
The court has taken into consideration various other matters necessary to be adjusted; and the result to which it has come will be expressed in the decree now made, which will not require further explanation. The balance of moneys that may remain in the hands of the receiver, after all proper payments and allowances, will be directed to be paid into the registry of this court for future disposition upon the final settlement and confirmation of the receiver’s accounts.
The claim of Anderson and others remains, as regards the possession and sale of the road, exactly as when the former decree was made. The fact that some of their bonds have matured does not change their position in that respect.
The application of the Jacksonville, Pensacola, and Mobile Railroad Company for the possession of the road as against t e State is not entitled to any consideration whatever. When the company shall have paid the balance of purchase-money ue for the road, and the interest on its bonds, it will be time enough for it to put forth its pretensions.
The following order will be entered: —
And now, on this first day of May, A. D. 1876, the court being advised of certain proceedings and decrees had and made by and before the Circuit Court for Duval County, in the State o Honda, and by ^nd before the Supreme Court of said State the cause mentioned in the bill and pleadings in this case,
erein the State of Florida and the trustees of the internal-
Sa^ were plaintiffs, and the Jack-
Pensacoia, and Mobile Railroad Company, and others,
+1^ en an^s? whereby it hath been held and adjudged that ree t ousand bonds for SI,000 each, issued by the said p. 688company in the year eighteen hundred and seventy, in exchange for State bonds, are valid and binding, and create a statutory lien upon the railroad and property of said company, and that by virtue thereof the said State is entitled to take possession of said property and sell the same, not only to raise and pay the unpaid purchase-money mentioned in the said original bill, but also what may be justly due on said bonds; and that the sale of said railroad and property under execution at the suit of the defendant, Daniel P. Holland, was void and of no effect, and gave him no right or title, as against the said State, to the possession of said railroad and property, or to the income, tolls, or revenues thereof; and it appearing that the possession of that part of said railroad between Quincy and the Appalachicola River is claimed by one James G. Gibbs, but is a part of the said Jacksonville, Pensacola, and Mobile Railroad, and was not in possession of said Gibbs when the receiver was appointed by this court, nor of any person claiming under said Gibbs, and that his right to the possession thereof is denied by the said State as the holder of said bonds; and the said State of Florida, through its executive and the said trustees of the internal-improvement fund, having deputed Dennis Eagan, the commissioner of lands and immigration of said State, to receive the said railroad and property from the receiver of this court: —
Therefore it is ordered and decreed, that Robert Walker, t e receiver appointed by this court, do, on or before the first day of June next, deliver the said railroad and all its appurte nances, extending from Lake City to the Appalachicola River, and from Tallahassee to St. Mark’s, and all the rolling-stoc and property connected therewith, to the said Dennis aga, commissioner of lands and immigration of the State of orl on behalf of said State; reserving, however, to said James. Gibbs, the right to institute against said, Eagan an is s cessors having possession of said road any legal piocee i for the determination of his claim to the possession o railroad between Quincy and the Appalachicola River, a delivery to said Eagan of that portion of said rai roa ject to said right of the said Gibbs to institute sue P ings. And as to the railroad and property o t e
Central Railroad Company, which the said receiver still holds in his possession for the purpose of recovering the balance due for moneys expended by him in the improvement thereof, it is ordered that the same be delivered to the said Florida Central Railroad Company, subject to the payment of said balance that may be now due after all proper allowances to the State of Florida.
It is further ordered, that the said receiver do close and settle up the business of his receivership with all convenient speed; that he collect all moneys due for freights, passage, mail-service, and other services, and all dues of every kind which shall have accrued up to the time of his delivery of the ‘possession as aforesaid, under his administration of said road and property; and that he settle his accounts for all receipts and expenses as receiver before the clerk of this court, who is hereby authorized to audit and settle the same under the direction of the Chief Justice ; and that he exhibit his vouchers therefor. It is further ordered, that he have the use of all vouchers, reports, and statements connected with the operations or business of the said railroad during his administration which he may require in the settlement of his accounts, and that he be authorized to retain permanent possession of all books, papers, and accounts connected with his administration of the property during his receivership; giving access thereto, for the purpose of necessary information, to the officers of the State having the management of the said railroad.
It is further ordered and decreed, that out of the moneys in e ands of the receiver, or that may come to his hands, arising rom t e income, tolls, and revenues of said railroad, or other rces connected therewith, over and above the charges and expenses paid, he pay the following charges, demands, and mounts, in the order in which the same are here named; that is to say: —
■. TJ16 costs and expenses of this suit, including the fees ner «°S S-°+ t °®cers ^is court, and of any master oi^exami„ C0Urt to ta^e or testimony in the
C0StS and charSes of the complainant. receiver j expenses and debts due or incurred by the
, and all proper claims arising against him, in the p. 690administration of his trust as receiver, and not before paid or discharged, including stationery, clerk-hire, and travelling and other incidental expenses.
Thirdly, A sum of money to be retained by the receiver for his compensation as such, at the rate of $10,000 per annum, from the time of his assuming the duties of his appointment to the time of closing up the business incident thereto, including a reasonable time for the settlement of his accounts not later than the first day of July next.
Fourthly, To the Rogers Locomotive and Machine Works the sum of $15,800.84, and interest bn the sum of $10,707.81, at the rate of seven per cent per annum, from the twenty-fourth day of August, 1874, till paid; being the amount due to said company for locomotives received and used by said receiver, on which said company had a specific lien.
Fifthly, All unpaid sums due to laborers and servants actually employed in the operation and care of said railroad west of Lake City, during the pendency of this suit, and prior to the time when the said receiver took charge of said property (namely, from the 9th of December, 1873, to the sixth day of May, 1874); which sums, according to the report of said receiver, amount to $12,000, or thereabouts.
Sixthly, Any balance of moneys that may remain in the hands of said receiver after the payment of the said charges, demands, and amounts, above specified, shall be paid by the receiver to the clerk of this court, who is hereby appointed register of the court to receive and keep the same subject to the further or of the court.
Warfield v. Chaffe et al.
The petition for the allowance of a writ of error forms no part of the
the court below; and this court has no jurisdiction question presented in such petition, but not disclosed y e re from the State court.
On motion to dismiss a writ of error to the Supreme of the State of Louisiana. .
Messrs. Durant and Hornor for the defendant in e, support of the motion.
Mr. W. J. Q. Baker for the plaintiff in error, in opposition thereto.
Mb. Chief Justice Waite delivered the opinion of the court.
This action was commenced in the Fourteenth District Court in and for the Parish of Ouachita, La., to recover the amount due upon a note made by Mrs. Warfield, the plaintiff in error, to W. J. Q. Baker, and by him indorsed to the plaintiffs below, — John Chaffe & Brother, — and also to enforce a vendor’s privilege. Judgment was asked for the amount claimed to be due upon the note, and also for “ fifteen dollars costs of stamping.” Attached to the petition was a copy of the note, bearing date May 3, 1867; below which was the following: “ Original act duly stamped and cancelled by collector of Third District of Louisiana, this third day of September, 1872. —F. A. Hall, D’y Recorder.”
Mrs. Warfield answered the petition; and, among other defences, she insisted that there were not any revenue-stamps on the note when it went into the hands of the plaintiffs, and that they had no authority to put stamps upon it. She thus, by the pleadings, tendered an issue of fact.
The principal contest between the parties was as to the plaintiffs title to the note; and W. J. Q. Baker was permitted to intervene in his own behalf, and to insist that he was the owner.
At the trial in the District Court, no question as to the stamping of the note appears to have been presented or deci ed: certainly no testimony was offered on either side in Iespect to it.' All the testimony in the case appears to be incorporated in the record. Judgment having been given against Mrs. Warfield and Baker in the District Court, they aPP®alcd to the Supreme Court, where the judgment was on rme v m Pn tlie °Pinion °f th® court, which ere as part of the record, the only reference to the LT °f StampS Which aPPears is as follows: “ The objection wa 6 T *WaS .n°^ stamPe<f, n°f having been made when it
T evidence, cannot now be considered.” n the petition presented to the Chief Justice of the Supreme p. 692Court of the State for the allowance of this writ, it is stated, for the first time in the case, that the defendant, Mrs. Warfield, claimed the privilege, right, and immunity of being relieved and exempted from all liability on the note or obligation sued on, under the laws of the United States requiring such instruments to be stamped to give them validity at the time the instrument sued upon was executed; and the decision of the Supreme Court of the State denied the claim.
The record sent here from the Supreme Court does not disclose any such claim. The petition for the allowance of the writ in this court is not part of the record of the court below. AVe act only upon that record; and that does not show that any Federal question was either presented by the pleadings or upon the trial in the District Court, or decided by the Supreme Court. Writ of error dismissed for want of jurisdiction.
The “Colorado;
1. At night, during a dense fog, a collision occurred on Lake Huron between a bark of 420 tons, bound down, and a propeller of 1,500 tons, bound up, e lake. The wind was from the south. The bark, well manned and equippea, having competent lookouts, properly stationed and vigilant in the per orm ance of their duty, and with her foresail and light sails furle, was, a speed not exceeding four miles an hour, sailing by the win, c ose on her starboard tack, heading south-east by east, disp aying e lights, and, as required by law and the custom of the lakes,g1™^ signals of two blasts from her fog-horn, which could be heard at * of half a mile ; which signify in that locality that she was on tack, close-hauled. She held this course, until, a collision becom g ble, her helm was put to starboard. The propeller, wit u and an insufficient watch on deck, was heading nort mor ’ of ing at the rate of five or six miles per hour. The officer in propeller heard but one blast of the bark’s fog-horn w en
other, and ported her helm; but then had second signal, ordered her helm hard a-starboar. fnrtv.five degrees, much effect, she struck the bark, at an angle o a ou causing the on her starboard side, nearly opposite the mammas, respontotal loss of that vessel and her cargo. Held, that the propeller was
sible for the disaster. PSsel the proofs show \2. Where, in a collision between a propeller and a sailing v, the that the latter kept her course, the presumption o au cage within propeller, arising in the absence of evidence tending o
any of the exceptions in the nineteenth article of the sailing rules, can only he overcome by showing that she took every reasonable precaution to meet any emergency which might arise, and that she was not guilty of the want of ordinary care, caution, or maritime skill.
Appeal from the Circuit Court of the United States for the Eastern District of Michigan.
Mr. George B. Hibbard for the appellant.
Mr. J. G. Abbott and Mr. Ashley Pond for the appellee.
Me. Justice Clifford delivered the opinion of the court.
Lights and other signals are required by law, and sailing rules are prescribed, to prevent collisions and to save life and property at sea; and all experience shows that the observance of such regulations and requirements is never more necessary than in a dense fog, whether in the harbor or in the open ocean, if the vessel is in the common pathway of commerce.
Mariners dread a fog much more than high winds or rough seas. Nautical skill, if the ship is seaworthy, will usually enable the navigator to overcome the dangers of the wind and waves; but the darkness of the night, if the fog is dense, brings with it extreme danger, which the navigator knows may defy every precaution within the power of the highest nautical skill.
Signal-lights in such an emergency are valuable; but they may not be seen. Bells and fog-horns, if constantly rung or blown, may be more effectual; but they may not be heard. Slow speed is indispensable ; but it will not entirely remove the danger; nor will all these precautions, in every case, have that effect. Perfect security, under such circumstances, is impossible.
Danger attends the vessel if she ceases to move, as other vesse s astern may come up ; and, even if she goes about and takes e ack track, she is still in danger from the vessels astern e ave not changed their course. Such a change of course 18 not required by the sailing rules or by the usages of navigaon. nstead of that, the best precautions are bright signalg s, very slow speed, just sufficient to subject the vessel to ti C°mu*an^ her helm, competent lookouts properly staan vigilant in the performance of their duties, constant g g o the bell or blowing of the fog-horn, as the case may p. 694be, and sufficient force at the wheel to effect, if necessary, a prompt change in the course of the vessel. Where all these precautions are faithfully observed, such disasters rarely occur, and the courts hear very little about inevitable accidents.
Injuries were received by the bark, as her owner, alleges, on the 11th of May, 1869, in a collision which took place on Lake Huron between the bark and the propeller “ Colorado,” off Saginaw Bay, about half-past eleven o’clock at night, whereby the bark was sunk in the lake, and with her cargo, consisting of 45,000 bricks and 35,000 bushels of oats, became a total loss. Compensation is claimed in the libel for the value of the vessel, freight, and cargo.
By the record, it appears that the bark — a sail vessel of 425 tons — was bound down the lake on a voyage from Milwaukee to Buffalo; and that the propeller, — a large steamer of 1,500 tons, — with a small cargo of general merchandise, was bound up the lake on a voyage from Buffalo to Chicago.
Service was made, and the owners of the propeller appeared and filed an answer. Testimony was taken; and, the parties having been fully heard, the District Court entered an interlocutory decree in favor of the libellant, and referred the cause to a master to ascertain the amount of the damages. Hearing was had before the master, and he made a report. Exceptions were taken to the report by the respondent, some of which were sustained, and others were overruled; and the District Court entered a final decree in favor of the libellant for the sum $33,675.26, with interest and costs, as set forth in the decree. Immediate appeal was taken by the respondents to the Circui Court, where the decree of the District Court was in all t mg affirmed; and the respondents appealed to this court.
Errors of fact are assigned by the owners of the prope, all of which deny that the propeller was in fault, whic 18 principal question in the case. Fault is also impute bark; but the evidence to support the accusation is so s g, that it will not demand any extended examination. u appears to show that the night was dark, and that t e quite dense at the time of the collision; that the win a time was south; that the bark was sailing by t e win, . hauled, on her starboard tack, heading south-east y ea j
she had pursued that course for some time, and continued to pursue it without changing her helm, until the collision was inevitable, when her helm was put to starboard; that she was stanch and strong, and well manned and equipped; that she showed the requisite signal-lights; that she had competent lookouts properly stationed on the vessel, and that they were vigilant in the performance of their duty; that she blew her fog-horn as required by law and the custom on the lakes, and that her speed was moderate. Two blasts were given by her fog-horn; which signify in that locality that the approaching vessel is on the starboard tack, close-hauled. Signals of two blasts were given in order that approaching vessels might be able to determine her course, and that she was on the starboard tack.
Prior to ten o’clock, the bark was making good speed; but, when the fog became dense, the bark commenced to shorten sail; and the evidence shows that all her light sails were taken in half an hour before the collision. Her speed before the light sails were furled did not exceed five or six knots an hour, and subsequently did not exceed four miles, as appears by the weight of the evidence.
Steamers must keep out of the way of sailing ships when the two are proceeding in such directions as to involve risk of collision; and in such a case the rule is that the sailing ship shall eep her course, so that the steamer may not be baffled or mis-ed in the performance of the duty required of her to keep out of the way. Special circumstances may exist in certain cases ren ering a departure from that rule necessary in order to avoid immediate imminent danger; but there is no evidence in this case making it necessary to consider any of the qualifications o e general rule. The Warrior, Law Rep., 3 Ad. & Ecc. o55.
th the evidence establishes the proposition + a, e. rk keep her course, as required by the eigh• ar?*Cle sailing rules; and, it appearing that there enCe ^en(^inS bring the case within any of the 10nS> con^ained in the nineteenth article of the same in f ’ u6 P™ Presumption is that the propeller was
Three answers are given to that theory by the owner of the propeller, either of which, if true, is conclusive that the decree below is erroneous: (1.) That the bark was in fault. (2.) That the propeller was not in fault. (3.) That the collision was the result of inevitable accident.
1. Much discussion of the first proposition is unnecessary, as it has already been shown that the signal-lights of the bark were well displayed; that she had competent lookouts properly stationed, and that they were vigilant in the performance of their duty. Due signals from her fog-horn were given as frequently as required by law or the custom of the lakes, and her speed was moderate; her foresail and all her light sails having been furled or taken down at least a half-hour before the disaster.
What more the bark ought to have done the owner of the propeller does not state. Doubtless he knows that a sailing vessel cannot absolutely stop without coming to anchor; and there is no regulation or usage which requires a sailing vessel “ to lie to ” or go about in stays, under such circumstances; nor would it add any thing to the safety of life or property at sea if such a precaution was adopted, as the vessel would still be in the pathway of commerce, and be exposed to collision by vessels approaching from any and every direction. All her light sails had been taken in, as matter of precaution, to lessen her speed, and to put the vessel more completely at the command of her helm. Both the master and second mate were on deck; and the wheelsman was an able seaman of experience, an the lookout was stationed on the top-gallant forecastle.
When the wind is high, it is frequently necessary to ree some or all of the other sails; but it is not usual to o so in the open sea, when the wind is moderate, or properly escr as merely a fresh breeze. Emergencies frequently arise, in ro g weather, when good seamanship requires that the sai s, p all, should be furled; and it appears that part o t e sa the bark were furled. Besides, it was the prope e struck the bark on her starboard side, near y OPP0^ , mainmast; and the evidence shows that the prope nearly or quite ten feet into the side of t e ar, struck the bark at an angle of about forty-five egr
Viewed in the light of all the circumstances, the court is of the opinion that the proposition of the owner of the propeller, that the bark was in fault, is not sustained.
2. Suppose that is so: still it is insisted by the owner of the propeller that his vessel was not in fault; which is a proposition that will deserve more consideration. Attempt is made in argument to establish the proposition that the bark ought to have changed her course, and kept out of the way of the propeller; but it is a sufficient answer to that suggestion, that the evidence does not disclose any special circumstances which would have justified the bark in departing from the rule, that, when the steamer is required to keep out of the way, the sailing ship shall keep her course. Due regard, it is true, must be had in such a case to all dangers of navigation, and to any special circumstances which may exist in any particular case, rendering a departure from the rule necessary in order to avoid immediate danger. Concede that, but still it is equally well settled, that where no special circumstances are proved, showing that a departure from the rule was necessary to avoid immediate danger, the obligation on the part of the sailing vessel is imperative to keep her course. The Sunnyside, supra, 205; Crocket n. Newton, 18 How. 583; 1 Pars. Ship. & Ad. 580.
Still it is insisted by the respondent that the propeller was not in fault; and, in order to determine that question satisfactorily, it will be necessary to refer again to the evidence, or can the details of the evidence be entirely avoided, as ere is some conflict in the testimony of the witnesses. All agree that the night, subsequent to eleven o’clock, was °ggy, and that the wind was south, blowing only a moderate reeze; and the evidence shows that the mate of the propeller ad charge of her navigation. His watch consisted of the J ee sman, one lookout (stationed forward on the promenadeeck), and one engineer, who had charge of the engine; that prope ler was one of the largest on the lake, measuring nn Un^red seventy tons; that she was heading northwest at the time the fog settled down, and that her speed ±2. 6 Ween n*ne and ten miles an hour. It appears from the th mate that the fog became very dense, and e spoke to the master, who was in his room, lying on a p. 698lounge, and that, pursuant to the master’s suggestions, he directed the engineer to let the propeller go slow; and he testifies that he took his position in front of the pilot-house, where he continued to sound the whistle, every one or two minutes, up to within a very short time of the collision. He is confirmed by the master as to the directions given to the ¡engineer; and the master admits that he immediately returned to the lounge, where he fell asleep, and that it was the jar of the collision that aroused him from the lounge.
Enough appears to show conclusively that there was but one lookout, and no other seamen to assist the wheelsman in any emergency which might arise ; though the master, as well as the mate, was fully apprised that the fog was unusually dense, and both knew full well that the course of the propeller was in the much-frequented pathway of commerce. Such a watch, consisting only of the mate, one wheelsman, and one lookout besides the engineer, could hardly be deemed sufficient for such a large propeller, even in a clear night; and if not, it certainly cannot be regarded as one equal to the emergencies likely to arise in a dark night, when the fog was as dense as it was on the night of the collision.
Ocean-steamers, as remarked by this court on a former occasion, usually have, in addition to the officer of the deck, two lookouts, who are generally stationed, one on the port and one on the starboard side of the vessel, as far forward as possible. During the time they are charged with that service, they have no other duties to perform; and no reason is per ceived why any less precaution should be taken by first;c as steamers on the lakes. Their speed is quite as great, an navigation is no less exposed to the dangers arising rom prevalence of mist and fog, or from the ordinary dar ess o the night; and the owners of vessels navigating there are un the same obligations to provide for the safety and secun y o lifo and property as attaches to those who are engage m n gating the sea. Chamberlain v. Ward, 21 How. 571«
Required, as steamers are, to keep out of the way o s vessels, the propeller is at least bound to show t a s reasonable precaution to meet any emergency w 1C arise from the darkness of the night, and that s
guilty of the want of any ordinary care, caution, or of maritime skill. Those in charge of her navigation knew that she was in waters frequented by other vessels, and that many other vessels were in the vicinity at that time, as indicated by the fog-horns heard from almost every direction.
Signal-lights were obscured by the density of the fog; but the sound of the fog-horns could be heard, and the evidence shows that the number blown ought to have admonished the master before he went to sleep, as well as the mate, that the surrounding and approaching dangers might make it necessary to effect sudden changes in the course of the propeller.
Sudden dangers of collision might reasonably have been expected from the extreme darkness of the night and the known vicinity of other vessels. Under such circumstances, it is apparent that the watch on deck, considering the size of the propeller and her speed, was not sufficient for the occasion. Support to that view, if more is needed, is found in the fact, that when the emergency came the mate deemed it necessary, when he gave the second order to the wheelsman, to direct the lookout to leave the place where he was stationed, and go to the wheel to help the wheelsman to put the same hard a-starboard, leaving the propellor for the time being without any lookout. The George, 9 Jur. 670; The Mellona, 3 W. Rob. 13. . Lookouts are valueless unless they are properly stationed, and vigilantly employed in the performance of their duty; and if * ey are not, and in consequence of their neglect the approaching vessel is not seen in season to prevent a collision, the fault is properly chargeable to the vessel, and will render her liable, unless the other vessel was guilty of violating the rules of Sio t ?‘ Baker v - Gity ofN' K’ 1 ciiff- 84; Whitridge y. M 23 How. 453; The Catharine, 17 id. 177. . Evidence entirely satisfactory is exhibited in this case, showing that the fog-horn of the bark could be heard for half a n + * c^ear’ Eoth from the testimony of the lookunfWh 6 ma^e’ ^at the fog-horn of the bark was not heard Wf tW° VeS8els Were quite near together; and they both inst heard only one blast of the horn in the first k They agree in respect to the conversation between w en they heard that blast of the horn; and the mate p. 700states that he was standing in front of the pilot-house, but the lookout testifies that they Were forward on the promenade-deck. Probably the statement of the mate is correct: and he also states that he and the lookout heard the blast of the horn about the same time; that he immediately gave the order to the man at the wheel to port, and went to the top of the pilot-house and gave the signal to stop both engines; that he gave the order to port just as he started, and went to the top of the pilot-house as quick as he could; that he then heard two blasts of the fog-horn from the bark; and that he immediately gave the order to the wheelsman to put the wheel hard a-starboard, and ordered the lookout “ to the wheel to help put it over,” and gave the signal for the engines to back.
Steamers of such size, under such circumstances, ought never, in a dark night, to be without a watch on deck sufficiently effective to change the course of the vessel with celerity, without withdrawing the lookout from his station and appropriate duties; nor is it good seamanship for the officer of the deck, if without any assistant in the navigation of the vessel, to station himself in a position where he cannot in such an emergency give immediate signals to the engineer in charge. Even sec onds are of great importance when the peril is impending an the danger imminent, as the lives of all on board, and property to a large amount, may be sacrificed by a moments delay. ,.
Owners of steamships are bound to afford such reasona e protection to life and property as may be in their power in sue emergencies, and moments of extreme peril; and, in the judgment of the court, a watch consisting of one officer on y an one wheelsman and one lookout, in such a night and un er su circumstances, is not sufficient to afford the security to i property which the owners of such a steamer are ou
afford. Where there is only one officer left on deck, an o y one man assigned to duty as a lookout, the watch on , eluding the officer, ought always, in a dark mg, 0 cient to navigate the vessel, even in an emergency, calling off the lookout to assist at the wheel; as> such a in such a night should never, in the judgment of the p. 701without at least one lookout to keep watch for approaching vessels.
Forewarned as the master was of the impending danger, he might, if he found it necessary that he should go to the lounge for repose, have increased the watch on deck, or have ordered the second mate or another seaman to the temporary assistance of the lookout, especially as the lookout had been on duty four or five hours when the mate informed the master of the density of the fog. All the master did was to direct the mate to tell the engineer to “ let her go slow,” and then he went to sleep. Doubtless the order was given to the engineer, and it appears that he slackened the speed of the steamer. Before that, her speed had been between nine and ten miles an hour. Considerable change undoubtedly was made under the order communicated to the engineer by the mate. The engineer testifies that her speed after that did not exceed four miles an hour; but other witnesses entitled to credit testify that the steamer still made five or six miles an hour. Judging from the effect of the blow when the propeller struck the bark on her starboard side, it is scarcely possible to believe that the estimate of the engineer is correct.
Steamships have great power, and in many instances are capable of great speed, and consequently are always required to observe a great degree of caution, particularly in a dark night. When the night is dark, they are required to be watchful, both as to their speed and course. In regard to the former, it is a question of fact, in each particular case, whether the speed was excessive or not; and, in determining that question, the ocality, the hour, the state of the weather, and all the circumstances of the occasion, are to be fully considered. The Europa,
Eng Law & Eq. 564; 1 Pars, on Ship. & Ad. 575; Newton
Vessels propelled by steam, if navigating in thoroughfares of commerce, are always required, whenever the darkness is such a 18 impossible or difficult to see approaching vessels, to c en their speed, or even to stop and back, according to cirums ances; and this court intimated that the principle of that qmrement might be applied in a qualified sense to sailing p. 702vessels, in crowded thoroughfares, when the darkness was so intense that vessels ahead could not be seen, if it appeared that the sailing vessel was proceeding with a strong breeze under a full press of canvas and with all her studding-sails set. The Morning Light, 2 Wall. 558.
Subject to the qualifications there stated, no doubt is entertained that those suggestions are correct; but they are not applicable to the case before the court, for two reasons: (1.) Because the general rule is, that sailing vessels may proceed on their voyage in the open sea, although it is dark, observing all the rules of navigation, with such additional care and precaution as experienced and prudent navigators usually employ under similar circumstances. (2.) Because the bark did shorten sail, and adopt every necessary precaution. Sailing ships should never, in a dark, foggy night, hazard an extraordinary press of sail; and, in case of unusual darkness, it may be reasonable to require them, when navigating in a narrow pathway, where they are liable to meet other vessels, to shorten sail, if wind and weather will permit. The Morning Light, supra.
Requ i rem en ts of the kind are intended as precautions; but the more important rule is, that steamships shall keep out of the way of sailing vessels; and the sixteenth article of the sailing rules provides, that when steamships are approaching another ship, so as to involve risk of collision, they shall slacken their speed, or, if necessary, stop and reverse; and the express pro vision is that every steamship shall, when in a fog, go at a moderate speed. ., Great difficulty would attend any effort to define, witn
mathematical precision, what is a moderate speed in any par ticular case, further than to say that the speed oug t no be so great that the steamer cannot perform the duty impose upon her by the act of Congress,— “ to keep out of the way o the sailing vessel,” if the latter has in all respects comp with the rules of navigation. Different formulas. ave suggested by different judges as criterions for determining - ther the speed of a steamer in any given case was or was not greater than was consistent with the duty w ic e npriiapg owed to other vessels navigating the same waters, u no one yet suggested is more useful, or better sui e p. 703the inquirer to reach a correct conclusion, than the one adopted by the Privy Council. The Batarier, 40 Eng. L. & Eq. 25.
In that case the court say, “At whatever rate she (the steamer) was going, if going at such a rate as made it dangerous to any craft which she ought to have seen, and might have seen, she had no right to go at that rate.” Apply even a less strict rule to the case before the court, and it is clear that the propeller, in view of the insufficiency of the watch on deck for such a steamer in such a night, and the extreme darkness, was guilty of negligence in not slacking down her speed to a slower rate.
Beyond all question, it was her duty to have seen and heard the bark in season to have complied with the requirement to keep out of the way of the bark; and it appears that she might have done so, if those responsible for the navigation of the propeller had not been guilty of negligence. Two blasts of the fog-horn were blown by the bark; but the mate and lookout did not, in the first instance, hear but one, when the mate gave the order to port, which proved to be a wrong order. Presently both the mate and the lookout heard two blasts; and then the mate gave the order, “ Hard a-starboard 1 ” and sent the lookout to assist in carrying the order into effect; but the collision occurred before the last order had much effect.
Examined in the light of these facts, which are fully proved, it is obvious that neither of the orders was given in season to e of any substantial avail, and that the propeller is responsible for the disaster.
8. Other defences failing, it is next insisted by the owner of e propeller that the collision was the result of inevitable accident; but, having decided that the propeller was in fault, the iscussion of that proposition is unnecessary, as such a defence can never be maintained, unless it appears that both parties were without fault.
Exceptions were taken in the District Court to the report of Pn. ^a^61" ’ an^ it is insisted, in behalf of the propeller, that or was committed in confirming that report. Some of the iud^ 10nS Were and others overruled; and, in the gment of the court, the report as confirmed is correct.
Decree affirmed*