Gambar halaman
PDF
ePub

7 F.(2d) 624

the government, feeling aggrieved by their finding, sought to have the value of the lands involved determined by a jury, which was accordingly done. A part of these lands consisted of a so-called desert entry, which had previously been entered by one Florence Kelly, thereafter transferred to the defendant Bothwell by deed, and then to the defendant the Bothwell Company. In its petition the government alleged that the said desert entry was fraudulent, that it had been held by the Department of the Interior for cancellation, and was at the time of filing the bill of complaint under investigation by that department.

A trial was subsequently held, and the matter submitted to a jury, with a direction to the jury to make a separate finding as to the said Kelly tract, which the jury did, assessing its value at the sum of $9,600. The court thereafter, and on the 7th day of December, 1909, approved and affirmed the verdict of the jury, and as to the Kelly tract confirmation was made subject to the future determination of the court as to the ownership of said lands. This action of the court became final as to all lands except the Kelly tract, and as to said tract the suit has remained in statu quo until on or about the 1st day of July, 1925, when the defendant Bothwell Company filed its motion for judgment under the order of December 7, 1909, which is the matter now before the court.

The history of the so-called Kelly tract in brief is about as follows: The entry was made on June 2, 1902, under the Desert Land Act (Comp. St. §§ 4674-4678). On April 28, 1903, final proof was made, which was accepted and approved by the register and receiver, and on May 8, 1903, final receipt and final certificate were issued to the entry

man.

On May 13, 1903, Kelly sold and transferred the entry to the defendant A. J. Bothwell, who in turn on February 1, 1904, conveyed the land to the other defendant, the Bothwell Company. On April 26, 1905, a special agent of the General Land Office executed at Cheyenne, Wyo., a report to the General Land Office upon this entry. On May 1st of the same year this report was received and filed in the General Land Office at Washington, D. C. On May 27, 1905, the General Land Office suspended the Kelly entry because of representations appearing in the aforesaid report. On August 26, 1909, the General Land Office formally preferred charges against the Kelly entry and ordered proceedings for the trial of such charges. Then proceeded hearings before the 7 F. (2d)-40

General Land Office and the Secretary of the Interior, by which it was finally adjudged during the year 1911 that the entry should be canceled. As before stated, nothing further was done in the case at bar, as neither party moved for any relief until the motion for judgment on the part of the defendant was filed during the current year.

[1] The point in the case is this: The defendant maintains that, inasmuch as no contest or protest against the validity of the entry was filed before the lapse of two years from the date of the issuance of the receiver's receipt, it became the duty of the Interior Department to issue a patent to the entryman or his successor in interest; this contention being based upon section 7 of the Act of March 3, 1891 (26 Stat. 1099 [Comp. St. § 5113]) which reads as follows:

"That after the lapse of two years from the date of the issuance of the receiver's receipt upon the final entry of any tract of land under the homestead, timber culture, desert land, or pre-emption laws, or under this act, and when there shall be no pending contest or protest against the validity of such entry, the entryman shall be entitled to a patent conveying the land by him entered, and the same shall be issued to him; but this proviso shall not be construed to require the delay of two years from the date of said entry before the issuing of a patent therefor."

In the first instance, in cases of this character, the Department of the Interior had held that an adverse report by a special agent against the validity of an entry was such as to bring the matter within the scope of the statute, as being such a protest as would enable the Interior Department to retain jurisdiction of the entry and refrain from issuing a patent. This ruling was, however, subsequently set aside by the courts in a holding to the effect that an adverse report of an agent filed in the General Land Office was not a pending contest or protest, within the scope of section 7 of the Act of March 3, 1891, and, upon the issue there involved, directed the Secretary of the Interior to issue a patent, there being no contest or protest filed within the two years. Lane, Secretary, v. Hoglund, 244 U. S. 174, 37 S. Ct. 558, 61 L. Ed. 1066. To the same general effect was the later case of Payne, Secretary, v. Newton, 255 U. S. 438, 41 S. Ct. 368, 65 L. Ed. 720.

The record in this case discloses that the only thing on file against the Kelly entry, within the two years after the receiver's re

ceipt had been issued, was the special agent's report filed in the General Land Office on May 1, 1905. The two-year period from the date of the issuance of the receiver's receipt expired on May 8, 1905. It would therefore appear to have become the duty of the Interior Department to have issued the patent immediately after May 8, 1905, instead of having suspended the entry and beginning a contest against it four years afterward.

[2] The plaintiff contends, however, that, inasmuch as patent has not passed to the land, this court has no jurisdiction to try the title, upon the authority of Brown v. Hitchcock, 173 U. S. 476, 19 S. Ct. 485, 43 L. Ed. 772, and that, even if the court has jurisdiction, the case should be governed by the rule of the department in its construction of the Act of March 3, 1891, while the hearing was before the department and determined before the courts held that construction invalid, or, in the alternative, that the plaintiff should now be permitted to offer evidence in support of the allegations of the petition in this case that the entry was fraudulent. The answer to these contentions seems to this court to be that the plaintiff, the owner of the land, submitted the determination of ownership to this court, and therefore the court had jurisdiction in the first instance, whatever may have been the rule had the Department of the Interior reserved its right to determine the ownership of the land by omitting that particular tract from its petition.

Again, the court by its order retained and reserved the right to itself determine the ownership of the land. Whatever may have been the rule of law prevailing in the department at the time it was sought to adjudicate the defendant's interest in the land, it must be remembered that the entire proceeding in accordance with subsequent court rulings was void, for the reason that the department had not the right to institute a contest or protest proceeding after the two years had elapsed from the date of issuance of final receipt. But, even if this should not be sound, the fact remains that the court is now called upon to determine the ownership of the land, and it must be adjudicated in accordance with the law as it now is, to the effect that a mere adverse report does not justify withholding a patent, and therefore legally a patent should have been delivered by the department to the entryman or his successor immediately after the two-year pe riod had elapsed. Also, in this view, the

plaintiff would have no right to seek to avoid the issuance of a patent to the entry by now offering proof as to the invalidity and fraudulent character of the entry, because, if it could not have been done immediately after the two-year period, it cannot now be done. If the relief now sought were to compel the issuance of a patent upon the proofs which have here been offered, the defendant should undoubtedly prevail. The issuance of a patent, however, would be a vain thing, because the land has been taken from the defendant and is now covered with many feet of water in a reservoir. When the finding of the jury as to the value of the tract was approved and affirmed by the court, that value was substituted for the land itself and becomes the subject of the action. The only question remaining, therefore, is to whom this $9,600, fixed as the value of the land, belongs. The defendant, as we have endeavored to show, would under the circumstances of this case be entitled to the land, and therefore as a matter of course should be entitled to the value of it from the plaintiff.

[3] It also appears from the authorities submitted by counsel for the defendant that, in proceedings of this nature, interest should be allowed from the time when the owners are deprived of their property. United States v. Rogers, 255 U. S. 163, 41 S. Ct. 281, 65 L. Ed. 566.

The motion of the defendant for judgment for the sum of $9,600, with interest from the 3d day of July A. D. 1909, upon which date the property in controversy was taken from the defendant and given to the plaintiff, will therefore be granted, to which ruling of the court the plaintiff may have its proper exceptions.

THE S. T. LOVELAND. (District Court, E. D. Pennsylvania. January 9, 1924.) No. 37.

Maritime liens 30-Libelant held entitled to lien for coal furnished tug at instance of charterer.

Where coal dealer, on being requested to furnish coal to tug, inquired as to its ownership and received affirmative assurance of party's right to bind vessel without knowing that it was chartered, and that charterer had agreed not to place any lien against it, held, that furnisher had exercised that degree of diligence required

7 F.(2d) 626

by Lien Act June 23, 1910, §§ 1-3 (Comp. St. §§ 7783-7785), and was entitled to lien, though he made no examination of documentary title.

In Admiralty. Proceeding by Burns Bros., against the steam tug S. T. Loveland, formerly known as the steam tug Taggart Bros., her engines, etc. Judgment for libelant.

Alexander & Ash, of New York City, and Biddle, Paul, Dawson & Yocum, of Philadelphia, Pa. (Howard H. Yocum, of Philadelphia, Pa., of counsel), for libelant.

Lewis, Adler & Laws, of Philadelphia, Pa. (Francis C. Adler, of Philadelphia, Pa., of counsel), for respondent.

MCKEEHAN, District Judge. This is an action in rem against the steam tug S. T. Loveland, formerly known as the steam tug Taggart Bros., to recover $1,605.25, with interest, for coal and fenders delivered to the tug at Jersey City on various dates between June 7, and July 22, 1919, inclusive. There is no dispute that the coal was delivered, and none as to the reasonableness of its market price, as averred by the libelant.

The sole question in the case is whether the libelant could have ascertained by the exercise of reasonable diligence that, because of the terms of a charter party, the person ordering the coal was without authority to bind the vessel therefor. At the time the coal was furnished, the tug was owned by S. T. Loveland, of Philadelphia. He had bought her in the fall of 1918 from Taggart Bros., of Savannah, Ga., brought her to Philadelphia, and registered her there, changing the name on the boat's stern from "Taggart Bros., Savannah," to "Taggart Bros., Philadelphia." On May 14, 1919, he chartered her to the New Jersey Towing Corporation, a corporation of New York, with offices in New York City, for a term of six months; the charter party providing, inter alia, that the charterer should have no power to create liens upon the tug, and that it would not incur any obligations on the credit of the tug and would promply pay for all supplies furnished her.

On June 2d William Chamberlain, president of the New Jersey Towing Corporation, telephoned from that company's office to Frank L. Burns, first vice president of Burns Bros., who are large coal dealers in New York, and asked for coal for the tug. While there are some discrepancies and differences as to precisely what the conversation was, it is clear that Mr. Burns inquired from Mr. Chamberlain as to the latter's right to bind the tug. Mr. Burns testified:

"Mr. Chamberlain called me up and said he wanted to buy coal for the tug Taggart Bros. I asked him if he owned the tug, and he said he did. Then I said, 'All right; I will sell you the coal, if you will confirm our conversation as to the ownership of the boat.' A few days after my conversation I understood from our marine department that the boat was there to get the coal."

On the same day that the telephone conversation occurred, Chamberlain wrote to Burns Bros. as follows:

"Gentlemen: In accordance with tele

phone conversation, will you kindly arrange with your coal dock at Communipaw for credit on the tugboat Taggart Bros. She will be at your docks some time this week for coal.

"Very truly yours,

"New Jersey Towing Corporation,

"William Chamberlain, President."

A few days later the tug came to the libelant's pier at Communipaw, and pursuant, apparently, to instructions received from the central office, the libelant's agents at the pier supplied the captain of the tug with the coal he asked for. On 18 different dates between June 7th and July 22d, the tug stopped at the libelant's pier and was loaded with coal at the request of the captain of the tug. Three men were captains of the tug during the period in question, and they ordered and receipted for the coal that is the subjectmatter of this claim. The account was kept on the books of the libelant in the name of tug, and the bills were rendered to the New Jersey Towing Corporation.

Lien Act June 23, 1910, §§ 1-3 (Comp. St. §§ 7783-7785), provides that:

"Any person furnishing repairs, supplies, or other necessaries, including the use of dry dock or marine railway, to a vessel, whether foreign or domestic, upon the order of the owner or owners of such vessel, or of a person by him or them authorized, shall have a maritime lien on the vessel which may be enforced by a proceeding in rem, and it shall not be necessary to allege or prove that credit was given to the vessel.

"The following persons shall be presumed to have authority from the owner or owners to procure repairs, supplies, and other necessaries for the vessel: The managing owner ship's husband, master, or any person to whom the management of the vessel at the port of supply is intrusted. No person tortiously or unlawfully in possession or charge of a vessel shall have authority to bind the vessel.

628

7 FEDERAL REPORTER, 2d SERIES
71 LED 481 47 se
modified & laut 579
C. 199.
BROOKLYN UNION GAS CO. v.
PRENDERGAST et al.

"The officers and agents of a vessel specified in section 2 shall be taken to include

such officers and agents when appointed by (District Court, E. D. New York. June 24,

a charterer, by an owner pro hac vice, or by an agreed purchaser in possession of the vessel, but nothing in this act shall be construed to confer a lien when the furnisher knew, or by the exercise of reasonable diligence could have ascertained, that because of the terms of a charter party, agreement for sale of the vessel, or for any other reason, the person ordering the repairs, supplies, or other necessaries was without authority to bind the vessel therefor."

It is clear that Burns Bros. believed that the New Jersey Towing Corporation and the tug's captain had the power to bind the tug for supplies furnished to her. It is equally clear that under the terms of the charter party they had no such authority from the owner, but, on the contrary, had agreed not to bind the vessel. Under the statute, however, the libelant has a maritime lien against the tug, unless he knew or by the exercise of reasonable diligence could have ascertained that the parties ordering the coal were without authority to bind the vessel. It seems to me that under the facts of this case Mr. Burns exercised reasonable diligence. He knew Mr. Chamberlain, the president of the New Jersey Towing Corporation, and inquired of him as to the ownership of the tug. Whatever were the exact words he used, it is evident that he made inquiry, and Chamberlain's letter of June 2d substantially confirmed what had been evidently a satisfactory reply to Mr. Burns' inquiry. Mr. Burns might have gone further, of course; he might have pursued the inquiry to an examination of the documentary title to the ship; but the statute does not require the furnisher of supplies to ascertain the fact at his peril. It requires merely reasonable diligence on his part. The tug had been placed by the owner under the control of the charterer, and the furnisher, knowing nothing of the charter, made inquiry from the party in control of the boat as to that party's right to bind the vessel. He received an affirmative assurance, and thereafter for two months supplied coal when and as requested by the then captain of the vessel. I think that upon these facts the libelant fulfilled the measure of diligence required by the law and is entitled to a lien.

Judgment may be entered in favor of the libelant for $1,605.25, with interest; the costs to be borne by the claimant.

1925.) No. 1269.

[blocks in formation]

149- Power of Legislature, to authorize commission to contract as to rates of public utility, limited by considerations that that reg. ulation is exercise of police power, and that one cannot control subsequent one in its exercise.

Power of Legislature to authorize Public Service Commission to contract as to rates to be charged by a public utility is limited by the considerations, that regulation of such rates is an exercise of the police power, which cannot be impaired or limited by contract, and that one Legislature cannot limit or control a subsequent one in its exercise.

2. Public service commissions 7-Power to

contract as to rates must be in express grant.

Any authority of Public Service Commission to contract on behalf of state as to rates to be charged by public utility must be in express grant, as it will not be implied.

3. Gas 14(1)-Public Service Commission not authorized to contract for gas rates for definite time.

Public Service Commission Law N. Y. §§ 22, by the act, to fix standard of purity of gas 65, 66, 72, empowering commission, created from time to time, and to fix maximum rates by order for a term not exceeding 3 years, but also empowering it to change or abrogate both classes of orders on rehearing, does not authorize it to make any contract for rates for any period which cannot be abrogated by it or the Legislature.

4. Gas 14(1)—Company, by expenditures in adjusting appliances to commission's orders, cannot postpone regulation of rates.

A gas company, by making expenditures in adjusting appliances to meet conditions created by commission's change of standard for gas, cannot prevent or postpone exertion by the state of power to regulate rates.

5. Gas 14(1)-Orders of commission and acceptance by company held not to constitute a contract for rates for definite time.

Orders of Public Service Commission fixing standard of gas and fixing maximum rate for a year, and company's acceptance thereof, each reserving the right to recede therefrom, held not to create a contract for fixed rate for defi

nite time.

6. Constitutional law 48-Rate-fixing statute presumed constitutional.

The Legislature, in passing statute fixing gas rates, is presumed to have acted within its powers, so those seeking to enjoin enforcement of it as confiscatory must prove its unconstitutionality beyond a reasonable doubt.

7. Gas

7 F.(2d) 628

14(1)—Experiment with statutory rate unnecessary if confiscatory.

Statute fixing maximum gas rate may be declared confiscatory, and its enforcement enjoined without experiment with rate, where it is so low that on any reasonable basis of valuation it is undoubtedly confiscatory.

8. Gas 14(1)-$1 rate prescribed for New York city shown confiscatory, without necessity of experiment.

Plaintiff held to have shown by evidence, without necessity of experiment, that $1 maximum rate prescribed by Laws N. Y. 1923, c. 899, for gas companies in New York City, is confiscatory.

9. Gas 14(1)-Nonexclusive franchises of vendor companies not to be given value in fixing rate base of purchasing company.

Gas company purchasing under Laws N. Y. 1890, c. 564, § 33, as added by Laws 1893, c. 638, § 1, property, franchises, and rights of other gas companies, all the corporations remaining in existence, may not have the value of the purchased franchises included in making up its rate base; they being nonexclusive, and vendor companies having paid nothing therefor to the franchise granting power.

10. Constitutional law 70(1) — Province of court only to determine whether rates prescribed are confiscatory.

Courts may not prescribe rates for public utilities, but only determine whether those sought to be enjoined are confiscatory.

[blocks in formation]

to be considered in determining fair value of utility's property as rate base enumerated.

Matters which, if ascertainable, are, in addition to cost of replacement less depreciation, to be considered in determining utility's rate başe, enumerated.

13. Constitutional law 277 (1)-Deprivation of property, and not of original cost, prohibited.

It is property, and not its original cost, of which owner may not be deprived.

14. Public service commissions 7-For rate base, value of property in present money to be determined.

In arriving at rate base of public utility, value of its property in present money is to be determined.

15. Public service commissions

22-In view

of deductions made, absence of finding of depreciation immaterial.

That master, in suit attacking rate as confiscatory, did not make finding of depreciation in items of replacement in public utility's plant may not be complained of; his findings of fair

value and cost of replacement showing he made all allowance for depreciation warranted by evidence.

16. Evidence 571 (7)-Court may consider testimony in light of cross-examination.

Though defendants, in injunction suit based on rate prescribed for plaintiff public utility being confiscatory, by their experts gave no evidence as to value, yet, they having crossexamined plaintiff's experts, the court is not bound to accept their testimony and allow the amounts testified to by them, but may consider their testimony in the light of the cross-examination, and accord to it such weight as it

deems proper.

22-Court's

17. Public service commissions
duty to give individual judgment on excep-
tions to master's findings.

On exceptions to findings of master as to various items in public utility rate case, it is the court's duty to give its individual judgment, and so to examine the evidence.

22-Assess

18. Public service commissions
ed value for taxation, improperly admitted on
determination of rate base.

Assessed values for purpose of real estate taxation of land and buildings of public utility held improperly admitted in determining utility rate base.

19. Public service commissions 22-What defendants may consider effective substitute for property used, where matter of specula. tion, not considered on rate base.

In fixing rate base in public utility's injunction suit based on claim of confiscatory rate, the court is to find fair value of property devoted by utility to public service, and not value of what defendants may consider an effective substitute, where this is a matter of speculation.

[blocks in formation]

21. Gas

14(1)-Unaccounted for gas allowed for on basis of experience of company and not at arbitrary figure.

Unaccounted for gas, due to leakage, condensation, expansion, contraction, etc., should be allowed for on basis of experience of the company, and not at an arbitrary figure.

22. Gas 14(1)-Special abnormal expenditures not considered as part of cost of manufacture.

Where question is whether prescribed gas rate is confiscatory, sum spent by company in adjusting appliances to meet commission's order as to standard of gas, and estimated cost of action to enjoin enforcement of rate, being abnormal expenditures, should not be regarded as part of cost of manufacture.

« SebelumnyaLanjutkan »