where the Tecumseh and barge were to take cargo. By universal rule, such vessels were entitled to priority in loading. Empire Co. v. Phila. & R. Coal & Iron Co., 77 Fed. 919, 23 C. C. A. 564, 35 L. R. A. 623; Williscroft v. Cargo of Cyrenian (D. C.) 123 Fed. 169. The subsequent loading of libelant's steamer and tow was in the usual order of precedence, and, considering the limited facilities of the port, was accomplished with all reasonable promptitude. The Tecumseh and her tow, the Marengo, arrived at the respondent's dock in Erie Basin at Buffalo, N. Y., the port of discharge, at 9 o'clock in the forenoon of November 26, 1901, and immediately tendered delivery of their cargo. of lumber to the claimant, who was the consignee. According to the evidence, a reasonable time, under favorable conditions, in which a steamer and barge could have been unloaded, was three days. Unloading, however, was not begun on the Tecumseh until November 30th, and on the barge not until December 2d. There was some delay on account of the prior arrival of other lumber-carrying vessels, which, as already stated, were entitled to be unloaded in turn ahead of libelant's steamer and tow. Other evidence is found in the record to show that the cargo, in view of the circumstances, was discharged, with reasonable diligence. Consideration of the entire case, however, is certainly persuasive that both ships could have been unloaded with less delay. The respondent is chargeable with knowledge of the arrival of the Tecumseh and Marengo, and, although the promptitude with which the vessels were to be unloaded was not expressly stipulated, nevertheless the charterers impliedly agreed to unload the cargo within a reasonable time, and in accordance with custom and usage of the port. Cargo was not discharged until December 6th. As already stated, there was some delay because of unusually congested conditions at Buffalo, owing to the approaching close of the season of navigation. A fair preponderance of the evidence shows that there was an unreasonable delay of 22 days through failure of the consignee to provide necessary facilities for a speedier discharge of the cargoes carried by the libelant's vessels. Libelants had the right to expect that cargo would be discharged with reasonable dispatch, and, further, that when unloading commenced the lumber would be moved with customary diligence and promptitude, unless prevented by extraordinary conditions. No such conditions are shown by the proofs as will justify denying to libelants demurrage for delay held to be unreasonable. It appears that the lien for demurrage has not been waived or abandoned. The evidence of Capt. Smith, a disinterested witness for libelants, shows that the earning capacity of the Tecumseh is $61 per day, and that of the Marengo $29 per day. Some evidence was given by respondents to the effect that the crew of the Marengo was discharged on arrival of the barge at this port. Such evidence has not sufficient weight to negative the testimony of Capt. Smith that, despite the lateness of the season, the barge had an earning capacity in the amount stated.

I therefore decide that libelants are entitled to recover damages as follows: On the libels filed in behalf of the Tecumseh, $152.50; and in the case of the Marengo, $72.50-besides costs in each case.

In re COHEN.

(District Court, D. Massachusetts. February, 1904.)

1. BANKRUPTCY-TRUSTEES-APPOINTMENT BY REFEREE.

Where, at the first meeting of the creditors of a bankrupt, the referee found it impracticable to pass on the validity of the claims there presented, because the validity of a large number of them was attacked by other creditors, and therefore continued the consideration thereof, it being impossible to select a trustee in the ordinary manner, it was proper for the referee to appoint a trustee of his own selection, as authorized by Bankr. Act July 1, 1898, c. 541, § 44, 30 Stat. 557 [U. S. Comp. St. 1901, p. 3438]. 2. SAME PETITION FOR REVIEW-EVIDENCE.

Where, on petition by creditors for review of an order appointing a trustee for a bankrupt, the creditors desire a review of the evidence, they should either have the evidence before the referee taken down stenographically, and by him certified to the judge, or should specifically point out to the referee the testimony which they wish summarized, and should ask him to certify specific findings of fact.

3. SAME CONTINUANCE.

Where, at the first meeting of creditors of a bankrupt, disputes as to the validity of certain claims arose, the right to continue the hearing of such contests was within the discretion of the referee.

The following is the opinion of Olmstead, Referee:

This was a petition to review the action of the referee in appointing a trustee of said estate. The proceedings were begun by an involuntary petition, and a receiver had been appointed by the honorable judge of the District Court before adjudication under circumstances which had not been, in the opinion of the referee, fully disclosed to the court. Subsequently a petition was filed by certain creditors represented by Mr. Blanchard for the appointment of a coreceiver; alleging grounds which, to the referee, seemed to warrant the immediate appointment of an additional receiver. The facts as developed at the various stages of this proceeding were that the debtor had, prior to the filing of the involuntary petition, absconded, and that soon after meetings of his creditors were held, and a proposition of settlement on the basis of 33 per cent. was made. The liabilities are in the neighborhood of $10,000. The assets of the estate will probably realize about half that sum. The original proposition to pay 33 per cent. was not carried out, and was soon after followed by the involuntary petition. The petitioning creditors were represented by William Charak, Esq., whose brother was an indorser or surety for the debtor in a large sum. Mr. Charak secured the appointment of his brother-in-law, Mr. Reinherz, as receiver. This case is a pretty good illustration of the evil practice, which had become too common, of purchasing the claims of creditors either immediately before or after the filing of bankruptcy petitions. It is the observation of the referee that creditors, upon the announcement of a failure, become panic-stricken, and are often willing to accept sums which may be offered for their claims far below their real value, and this condition of mind is frequently taken advantage of by designing persons. The scheme which seems to have been contemplated by the parties interested in purchasing these claims was to make an offer of 33 per cent., when the estate would probably pay, with careful administration, between 40 and 50 cents on the dollar, and thus secure the purchase of these claims for the benefit and gain of the purchasers. In other words, what was the interested parties' gain became the creditors' loss. The only safe course, under the ample guaranty of the bankrupt law, is for creditors never to sell their claims until after an appraisal has been had by the regular, sworn appraisers of the court. Then the creditors

¶ 2. Appeal and review in bankruptcy cases, see note to In re Eggert, 43 C. C. A. 9.

know what the true value of the estate is, what they may expect, and what is the true worth of their claims. An appraisal had been made before the adjudication, but by appraisers suggested by the parties interested in the purchase of these claims, and such appraisal may not have afforded the same guaranties of accuracy to the creditors which an appraisal made by entirely disinterested appraisers would have furnished. When the first offer of 33 per cent. either fell through or was withdrawn, an involuntary petition was filed, and the Charaks undertook to purchase the claims of creditors, with a view, as was stated, of having the petition dismissed. The experience of the referee is to the effect that creditors, after the filing of a petition, and especially where a prior offer had been withdrawn, which offer in this case may or may not have been a bogus one, are generally willing to accept the best offer made them under the circumstances. The referee is of the opinion, from the testimony introduced at the first meeting of creditors, that the purpose of Mr. Charak and his brother in purchasing these claims was to protect themselves on the guaranty made to the debtor. In other words, there appears in this case to have been an attempt to manipulate the status of creditors, and to speculate on prospective dividends -a practice which certainly, after the filing of petitions, it seems to the referee, should be discouraged. In view of these facts and other facts set forth in the petition for a co-receiver, the referee was impelled to appoint a co-receiver in order that a thorough investigation might be made. Accordingly he selected A. K. Cohen, Esq., a well-known and reputable attorney, to act with Mr. Reinherz. Mr. Cohen has faithfully discharged his duty, and conferred with the referee in the administration of the estate. At the first meeting of creditors, William Charak, Esq., represented a large number of claims, to which objection was made by Mr. Blanchard, representing another faction of creditors. On the one side were the creditors represented by Mr. Blanchard. On the other were the large number represented by Mr. Charak. Mr. Blanchard called several witnesses to the stand, who testified that claims represented by them had been sold to Mr. Charak. The primary purpose of the choice of a trustee is that the creditors shall have an honest and able representative. After the reference of a bankruptcy petition, the referee is the magistrate administering the "estates in his charge." Bankr. Act July 1, 1898, c. 541, § 29c, cl. 3, 30 Stat. 554 [U. S. Comp. St. 1901, p. 3433]. Upon him devolves the principal and a heavy responsibility in the administration of estates which are conducted "under the direction of the court." Bankr. Act, § 47a (2), 30 Stat. 557 [U. S. Comp. St. 1901, p. 3438]. In the proof and allowance of claims the bankruptcy act also gives the referee a large discretion. Section 57d, 30 Stat. 560 [U. S. Comp. St. 1901, p. 3443] provides that upon objection the consideration of claims may be "continued for cause by the court upon its own motion." In view of the extraordinary facts developed in this case, the referee decided that the only proper course to pursue was to take the administration of this estate into his own hands, and appoint a trustee of his own choosing. He accordingly suspended all the claims presented for the trustee to investigate, and appointed Lee M. Friedman, Esq., a well-known and reputable attorney, as the trustee, who has since qualified. In order that partiality might not seem to be shown towards the creditors represented by Mr. Blanchard, the referee refrained from appointing A. K. Cohen, Esq., as trustee; preferring, under the extraordinary circumstances of this case, to take a third and entirely independent person.

The course pursued by the referee was thus a direct course, but the same result might have been accomplished by another but more indirect course. The referee has sometimes refused to approve, as general order 13 authorizes him to do, the choice of a candidate as not a competent person; and, inasmuch as these claims were represented by Mr. Charak, whose action in purchasing claims, either himself or by his brother, did not meet with the approval of the court, the referee would have been justified in refusing to approve of the candidate voted for by the creditors represented by Mr. Charak; and, inasmuch as there was no hope of Mr. Blanchard's faction and Mr. Charak agreeing on a candidate, the referee, in all probability, would have been called upon, from the failure of the creditors to make a choice in this contingency, to appoint a trustee. It seemed, however, to him more advisable, in view of

the peculiar and irregular methods employed in this proceeding, to take the more direct course, as above indicated.

Lee M. Friedman, trustee.

John H. Blanchard, for objecting creditors.
William Charak, for receiver.

LOWELL, District Judge. At the first meeting of creditors, sundry claims were presented for proof, and all those presented by parties now appealing from the decision of the referee were there contested. In view of all these circumstances, more fully set out in his certificate, that officer found it impracticable at that meeting to pass upon the validity of the claims there presented, and continued their consideration. See section 57d, Act July 1, 1898, c. 541, 30 Stat. 560 [U. S. Comp. St. 1901, p. 3443]. As it thus became impossible to proceed to the election. of a trustee in the ordinary manner, the referee appointed a trustee, as provided in section 44, 30 Stat. 557 [U. S. Comp. St. 1901, p. 3438]. The circumstances were unusual, and the referee did not deem it expedient to postpone the election until the contested claims had been passed upon, and an adjourned meeting could be had. No injustice was thus done to creditors, for, after the validity of their claims has been established, they can ask the court for the removal of the trustee thus appointed, without allegation or proof of his dishonesty or inefficiency. In disposing of their petition for removal, the court would bear in mind the unusual circumstances of the trustee's original appointment, and would protect the rights which creditors ordinarily possess in choosing a trustee of the bankrupt estate. The referee, indeed, could have continued the administration of the estate by the receivers already appointed, or by other receivers substituted for these, but he deemed it. for the best interests of the estate that the title to the bankrupt's property should be vested immediately in a trustee. While administration by a receiver ordinarily accomplishes much the same result as administration by a trustee, yet circumstances may well exist to make the latter desirable. If at the first meeting all claims offered for proof are in dispute, and it is impracticable at that time to settle the dispute, it appears to be within the discretion of the referee to appoint a trustee under section 44. The judgment of the referee is therefore affirmed.

Creditors prayed a recommittal of the certificate in order that the referee might certify additional facts and evidence. If the appellants desire that the judge shall weigh the evidence and determine questions of fact, they should ordinarily procure that the evidence before the referee is taken down stenographically, and by him certified to the judge. If this be deemed inadvisable on account of expense or other reasons, the parties should specifically point out to the referee that testimony. which they wish him to summarize in his report, and they should ask him for specific findings of fact on which they may rely at the hearing before the judge. Nothing of the sort was done here, and the appellants are therefore left to depend upon the summary of evidence and the findings of fact contained in the certificate. In order that the appellants should lose nothing substantial by their oversight, the court

has inquired of the referee concerning one additional finding especially desired by the appellants, namely, that certain creditors named were a majority in number and amount of claims presented, and that no evidence was given before the referee attacking the validity or genuineness of their claims. The court is informed by the referee, as sufficiently appears from the certificate, that the validity and genuineness. of all these claims was contested before him. If there was a contest, and the referee continued consideration of the claims, it is immaterial that no evidence impeaching their validity was presented at the first meeting. Continuance was within the referee's discretion.

DALY v. QUINLAN.

(District Court, E. D. New York. July 7, 1904.)

1. NAVIGABLE WATERS-DOCKS-PROJECTING ROCKS-DAMAGES TO VESSELSNEGLIGENCE.

Where the owner of a dock failed for two years after dredging the space along the dock to examine the same for obstructions, or to use reasonable care to provide and maintain a safe bottom for boats coming to the dock, though he was notified of a pointed rock lying in such bottom, and rising some 18 inches above the bed of the sea, he was guilty of negligence rendering him liable for injuries to a vessel caused by her settling on such rock with the falling of the tide.

Carpenter, Park & Symmers, for libelant.
Martin A. Ryan, for respondent.

THOMAS, District Judge. This action is to recover damages for injuries to libelant's boat caused by a rock adjacent to respondent's dock, upon which the vessel settled with the falling tide. Although the boat was old, and it would not have been prudent to allow her to rest on a hard bottom, yet a pointed rock, rising some 18 inches above the bed of the sea, caused the injury. It is not expectable that a vessel, old or new, should meet with such rock. About two years before this, Quinlan, the owner, had caused the space along the dock to be dredged. After that had been done, one of the dredgers, in reply to Quinlan's inquiry, took measurements, and said, "I guess you have got 10 feet all along here-10%." Quinlan said, "Are you sure?" He said, "Yes." From that time forward for two years no inspection of the bottom was made, although the respondent's foreman was notified the year before the accident that there was a rock about 24 feet off the bulkhead. Thereupon the foreman ascertained the presence of such rock, and reported to Quinlan. There is evidence that during the two years after the dredging the libelant's boat, on a single occasion, and other boats drawing as much or more than libelant's boat, had been to the dock without injury, and even that they rested on the bottom without injury. It was the duty of the respondent to use reasonable care

11. See Wharves, vol. 48, Cent. Dig. § 37.