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11 F.(2d) 429

TION et al. v. NORTHERN TRANSP.

CO.

WEST END TRUST CO. v. SAME.

(District Court, D. Delaware.

1. Maritime liens

1925.)

Nos. 453, 462.

48.

November 13,

required "to signify in writing within sixty OLD DOMINION MARINE RY. CORPORAdays after the passage of this act its acceptance of the terms and provisions hereof." If a national bank omitted to signify such acceptance within 60 days, the federal reserve board in its discretion could give the bank 30 days' notice, at the end of which the bank ceased to act as a reserve agent. No other consequence of failure to signify acceptance is provided, except that the act further sets forth that, if a national bank within a year fails to become a member bank or to comply with any of the provisions of the act, its rights should be forfeited, but only by decree of the court. In the absence of action by the comptroller, the bank continued to be a national bank, although it did not become a federal reserve bank.

In Shaw v. United States, supra, the court, in passing upon the very point as in the case at bar, decided that an indictment brought under section 5209, as amended by the act of September 26, 1918, was defective, because it failed to allege that a national bank was a federal reserve bank or member bank.

The court said: "They [meaning national banks] were not made members, nolens volens, and presumptions may not be indulged to cure material defects in criminal pleading."

If the indictment alleged that the First National Bank of Rockville Center were a federal reserve bank or member bank, then the offense charged to be committed would be in violation of section 5209. However, the allegation that it was a national bank is insufficient, unless the indictment alleges that the bank is a federal reserve bank or member bank.

[2, 3] By the weight of authority, the rule is that from the indictment itself it must judicially appear that an offense has been committed. The court cannot take judicial notice that the First National Bank of Rockville Center is a federal reserve bank or member bank. Cohn v. U. S., 258 F. 355, 169 C. C. A. 371 (C. C. A. Second Circuit); U. S. v. Hess, 8 S. Ct. 571, 124 U. S. 483, 31 L. Ed. 516; U. S. v. Cruikshank, 92 U. S. 542, 23 L. Ed. 588.

[4] The alleged offenses charged in the indictment commenced on July 7, 1920, and terminated April 8, 1922. If, as contended by the government, the defendant was a fugitive from justice, the statute of limitations does not apply (Ferebee v. U. S. [C. C. A.] 295 F. 850), and the district attorney may resubmit the case to the grand jury. Demurrer sustained. Defendant charged. Settle order on notice.

dis

Court of equity has no power to sell vessels free of maritime liens without lienholder's consent, express or implied.

2. Maritime liens

48.

Maritime lien holder, claiming lien against vessel sold without his consent by receiver, has no rights in, proceeds.

In Equity. Consolidated suits by the Old Dominion Marine Railway Corporation and others and by the West End Trust Company against the Northern Transportation Company. The motion of the United States for leave to file petition that receiver be directed to pay petitioner out of the moneys arising from sale of defendant's vessels in his hands the amount of certain alleged maritime liens thereon was granted, and argument heard on the merits as if on motion to dismiss petition. Petition dismissed.

David J. Reinhardt, U. S. Atty, of Wilmington, Del., and Willis E. Monty, of Burlington, Vt., for the United States.

William G. Mahaffy, of Wilmington, Del., and Francis S. Laws, of Philadelphia, Pa., for receiver.

Charles McC. Howard, of Baltimore, Md., for bondholders' committee.

MORRIS, District Judge. Motion for leave to file petition of the United States of America, praying in effect that the receiver be directed to pay to the petitioner out of the moneys arising from the sale of vessels of the Northern Transportation Company, and now remaining in his hands, the amount of certain alleged maritime liens of the petitioner against certain of said vessels, not having been opposed and no reason appearing why the motion should be denied, it will be granted and the petition filed. For purposes of expedition and convenience the merits of the petition were debated by counsel, as if upon a motion to dismiss, at the time fixed for hearing upon the motion for leave to file. Briefs upon the merits have likewise been submitted and considered. [1, 2] I do not understand from the cases that a court of equity may sell vessels free and discharged from maritime liens without the consent, express or implied, of the lienholder. Such consent was not given by the

petitioner prior to the sale of the vessels, and the absence of such consent is confirmed by the present attitude of the petitioner that it is still in a position to proceed under its liens against the vessels sold. It seems to me to be wholly impossible for a maritime lien holder to have and retain his lien against the vessel after sale, and yet have rights against the proceeds of sale. Where property is sold subject to a lien, the proceeds of sale begin to arise only at the point where the rights of the lienholder leave off. Such proceeds represent only the value of the property over and above the lien, and consequently belong exclusively to others to those whose rights in, to, or against the res were divested and sold.

confined in the United States Marine Hos pital at New Orleans, where he remained for 22 days.

The answer admits the contract, and that during its life, and during the course of the voyage for which the libelant had signed, he became ill and remained in the United States Marine Hospital for a period of 22 days. The answer also admits that for the 22 days the libelant was in the Marine Hospital he was paid no wages. The answer pleads as justification for holding the wages that the shipping commissioner ruled that the libelant was not entitled to these wages, and also pleads that libelant signed a full release to the ship for his wages.

[1] In The Osceola, 23 S. Ct. 483, 189 U. S.

For these reasons the petition must be 158, 169, 47 L. Ed. 760, Mr. Justice Brown, dismissed.

THE JUNEAU.

(District Court, E. D. Louisiana. February 27, 1926.)

No. 16150.

1. Seamen wages while ill in hospital, where voyage had not ended when he left hospital.

20 Seaman held entitled to

Under general maritime law, seaman becoming sick while in service of ship is entitled to wages as long as voyage continues, and seaman was therefore entitled to wages while ill in hospital, where voyage had not ended when he left hospital.

2. Seamen 25.

Release signed by seaman is prima facie defense to libel for wages.

3. Seamen 25-Seaman's release of wages held of no force, where ship's answer admitted, and master testified, that he was paid no wages while sick in hospital.

On libel for seaman's wages while in hospital, seaman's release held of no force, where ship's answer admitted, and master testified, that he was paid no wages during such period.

In Admiralty. Libel by Churchill Robinson against the steamship Juneau. Decree for libelant.

in speaking for the Supreme Court, has shown that the law giving wages to a seaman falling sick while in the service of the ship is founded on general maritime law. Such wages must be given "as long as the voyage continues."

In the case before me the libelant was, I think, entitled to his wages for the time he was in the hospital, and it is admitted that the voyage had not ended when Robinson left the United States Marine Hospital. [2, 3] The case shows that the libelant signed a release for his wages. This may be taken as a "prima facie" defense; there being no testimony offered by the libelant, I was at first inclined to hold that libelant had not made out his case. The testimony of the master of the ship has since been brought to my attention. He testifies as follows:

"Q. At the time that Robinson was finally paid off and received his discharge from the vessel, what deduction, if any, did you make-how many days? A. Twenty-two days, for the time he was in the hospital.

"Q. So that, on the basis of continual employment, there would be a balance due him of $69.67; is that correct? A. A balance due him of $69 and so many cents; there would be the 22 days that the commissioner

W. J. & H. W. Waguespack, of New had ruled he was not entitled to be paid, Orleans, La., for libelant.

Terriberry, Rice & Young, of New Orleans, La., opposed.

HALE, District Judge. This is a libel brought to recover 22 days' wages at the rate of $95 per month, namely, $69.76, which the ship still owes, and which it refuses to pay. Libel alleges that the libelant was in the service of the ship from the 17th day of September, 1919, to December 13, 1919, when he was discharged; that before his contract terminated he became ill, and was

while in the hospital.

"Q. I repeat that, on the basis of continual employment from September 17 to December 13, there would be a balance due him of $69.67; is that correct? A. Yes, sir."

In view of the admission of the answer that the libelant was paid no wages while he was in the hospital, and the testimony of the captain, I am of the opinion that the release signed by the libelant should be held to be of no force: I think the libelant has, by the pleadings and proofs, brought before the court enough to sustain the libel.

11 F.(2d) 431

A decree may be drawn in favor of the libelant for $69.67 but without interest. Libelant has his costs.

MORGAN et al. v. GRASS FIBRE PULP &

PAPER CORPORATION.

(District Court, S. D. Florida. February 20, 1926. On Further Hearing, March 16, 1926.)

No. 336.

1. Receivers 151-Court held empowered to vacate order confirming master's report allowing complainant's solicitor's fees (rule 66). Court has power, at least during term, to vacate order, entered under rule 66, confirming special master's report allowing fees to complainant's solicitor, payable out of defend

ant's assets.

2. Receivers

154(2)-In receivership, creditor bringing fund into court is entitled to reasonable solicitor's fee, payable only out of such fund.

In receivership, a creditor, who for himself and others brings fund into court, to be administered for benefit of all, is entitled to a reasonable solicitor's fee, payable only out of such fund.

3. Receivers 154(2)-Complainant, on final determination after discharge of receivers, of rights to escrow deposit representing a disputed claim, held not entitled to attorney's fees.

Where, after appointment of temporary receiver at instance of three creditor complainants, settlement was made of claims of two creditors, with attorney's fees, and of the third, except for an amount in dispute, to cover which a deposit in escrow was made and receivers discharged, held, on final determination of true

indebtedness due third complainant, he was not entitled to attorney's fees, since they would be payable only out of defendant's assets, rather than fund brought into court.

In Equity. Receivership proceeding by George B. Morgan and others against the Grass Fibre Pulp & Paper Corporation. On motion to vacate order confirming special master's report allowing counsel fees to solicitor for named complainant out of assets of defendant. Motion granted, and, on exceptions to master's report filed after granting of motion, exceptions sustained.

J. R. Bedgood, of Eustis, Fla., for complainants.

Roy P. Hamlin, of Tavares, Fla., and R. F. Maguire, of Orlando, Fla., for defendant.

CALL, District Judge. This cause comes on for hearing upon the motion to vacate the order made herein upon the 21st of January, 1926, confirming the special master's report filed December 29, 1925, allowing counsel fees to the solicitor for the complainant, to be paid out of the assets of defendant. The order attacked in the motion was

entered pursuant to rule 66, the report having been filed in the clerk's office more than 20 days, without exceptions filed by either party.

[1] The first question to be decided is: "Has the court power to vacate such order of confirmation?" After reviewing the authorities, I think the court has such power, especially during the term at which the order is passed. No court would exercise this power in a case where the rights adjudicated by such order are recognized by law, except under exceptional circumstances. Such an order in such cases would be a futile exercise of power. In cases where the rights adjudicated in the order are doubtful, or not recognized by law, the court would vacate the order of confirmation. For these reasons I required the question whether the complainants' solicitor in this case would be entitled to receive counsel fees from the assets of the defendant to be argued on this motion; which was done, both orally and in briefs filed before me.

The record shows that the complainants on November 25, 1924, filed a bill in chancery in the name of three creditors of the defendant, praying for the appointment of a receiver to take possession of the assets of the defendant and preserve same, and for the liquidation of the corporation and the assets be applied to its indebtedness. Upon the hearing a temporary receiver was appointed, rule nisi issued, and day fixed for hearing on the application for a receiver. The days for such hearing were continued from time to time, until on March 31, 1925, the solicitors for the complainants and the defendant entered into and filed a stipulation in which the payment in full, together with counsel fees, for two of the three complainants, and payment, a sum to cover the admitted indebtedness, and the deposit in escrow of the difference between the amount claimed and the amount admitted was acknowledged; said escrow amount to await the final determination of the actual indebtedness. On the hearing upon said stipulation, an order was entered in which, among other things, it was ordered that said cause should proceed only for the purpose of determining the correct amount due the third complainant. On April 22, 1925, an order was entered approving the receiver's accounts and discharging him, and ordering him to deliver to the defendant all assets that had come into his possession by virtue of the receivership. Upon this day the receipt of the receiver and his attorney to the defendant, covering their fees, etc., incurred for the receivership, was filed.

[2, 3] It is the recognized law that, where one creditor, acting for himself and other creditors succeeds in bringing into court a fund to be administered for the satisfaction of his claim and the claims of other creditors of the like class, he is allowed a reasonable fee for his solicitor, to be paid out of such fund. But, as I understand the law, it is the fund which is applied to the satisfaction of the claims of creditors out of which this payment of counsel fees is allowed. This, I think, is clearly shown by the case of Huff et al. v. Bidwell et al., 195 F. 430, 15 C. C. A. 332, and this was on a general creditor's bill. The bill in the instant case was filed by three creditors for themselves, not for the class. It is true a prayer is for the liquidation of the corporation and an application of its assets to the payment of its debts; but it is extremely doubtful whether this prayer would have the effect of making this a creditors' bill. But, be that as it may, in the instant case, the debts due the complainants were paid by the defendant, and the disputed amount secured on March 31st. These payments were not made from any fund brought in and administered by the court. The petition for attorney fees was filed April 22d, some time after the order of March 31st, retaining the case only for the purpose of ascertaining the true indebtedness to the third complainant. Any allowance for counsel fees to be paid by the defendant would not be from any fund being administered by this court, but would be requiring the defendant to pay out of its assets the counsel for three creditors, who were asserting claims adverse to it. This, as I read the authorities, will not be done.

I am of opinion, therefore, that the motion to vacate the order of January 21, 1926, must be granted, for the reasons above stated. It will be so ordered.

On Exceptions to Special. Master's Report Filed after Vacating of Order Confirming Report.

This came on for further hearing upon the exceptions filed to the master's report, allowing attorney fees to the complainants' solicitor. A statement of the pleadings in the case will be found in the opinion filed February 20, 1926, on the motion to vacate the order of confirmation of said report, as well as my view of the law controlling the question of allowance of counsel fees to complainants' solicitor.

If I was correct in my views as therein stated, these exceptions to the allowance of counsel fees are well taken. This is a suit by three creditors only for the collection of

the amounts due them, not a general creditors' bill for the benefit of all creditors who shall come in and contribute to the expense of the litigation. Other creditors might have petitioned to come in, had they seen fit, and subjected themselves to the payment of counsel fees, out of the claims allowed, but this was not done in the instant case. It is true a temporary receiver was appointed, who took possession of the books, papers, and visible property, consisting of plant, etc., of the defendant, and preserved the latter, the cost of which was paid by defendant under the stipulation noted in the former opinion.

It was proper that this cost should have been paid by the defendant. The bringing of this suit and the appointment of the temporary receiver might, and probably did, cause the settlement of outstanding claims against the corporation; but this fact does not authorize this court to assess counsel fees for complainants' solicitor against the defendant, to be paid out of its assets. The exceptions to the allowance of counsel fees for the complainants' solicitor will be sustained.

There are other exceptions to the action of the master in admitting testimony, etc., but these I have not considered, as those ruled on decide the matter.

all'd 11 57ed441.

SURRELL et al. v. PIERCE, BUTLER & PIERCE MFG. CORPORATION. (District Court, S. D. New York. February 5, 1924.) 1. Patents 328.

14,002, Surrell patent, claims, 1, 10, 21, 22, and 23, for back draft boiler, held invalid. 2. Patents 328.

14,003, Surrell patent, for sectional boiler, held not infringed.

3. Patents 27(1).

A new use of an old disclosure is not patentable.

4. Patents 328.

1,089,747, Butler patent, for sectional boiler, held not infringed.

In Equity. Patent infringement suit by John Ralph Surrell and another against the Pierce, Butler & Pierce Manufacturing Corporation, wherein defendant pleaded a counterclaim. Bill and counterclaim dismissed.

Decree affirmed 11 F. (2d) 441.

The patent involved in the counterclaim is No. 1,089,747, issued to William M. Butler on March 10, 1914.

The following will serve to illustrate the various patents considered in the opinion:

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