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cease making sales, and directed that he make and report an inventory. Except that the parties are given leave to file additional affidavits, no further action was then taken. On June 19, 1903, a decree was entered allowing the Viquesneys to withdraw their answer and file a demurrer. This was done, joinder in demurrer was filed, and the issue set down for argument. On July 8, 1903, an order was entered, which, after reciting that bankruptcy proceedings had been, since the institution of this suit, "taken" against Latham in the District Court for the Northern District of West Virginia, and that the court is of opinion that the bankruptcy court should settle all matters as to the title of the property, discharges the receiver, and directs him to turn over all the property and the proceeds of sales thereof to G. C. Holdsberry, trustee in the bankruptcy case. This decree also modifies the injunction to the extent of directing the receiver to surrender the property to the trustee in bankruptcy. On August 5, 1903, a decree was entered, which, without stating the grounds therefor, sustains the demurrer and dismisses the cause at the cost of complainant. This decree also makes an allowance to the receiver for necessary expenses incurred by him of $394.36, and, it being recited that the receiver had, under the decree of July 8th, delivered all the property and funds to the trustee in bankruptcy, directs the trustee in bankruptcy to pay to the receiver the said sum, if the trustee still has the money in his hands, or, if he has already paid the fund over to the Viquesneys, that they shall pay to the receiver the said sum. An appeal was prayed and allowed to the decrees of March 7th, July 8th, and August 5th. The errors assigned are, in brief, that the court below erred in appointing the receiver and directing him to take the property of the defendants, in directing the receiver to deliver the property to the trustee in bankruptcy, and in directing that the receiver's expenses should be paid either out of the proceeds of sales of the property, or by the trustee in bankruptcy out of such proceeds, or by the defendants.

We are met at the outset of our consideration of this cause by an objection on behalf of the appellee that this court has no jurisdiction of this appeal. It is said that the jurisdiction of the court below is in issue, and that only the Supreme Court has jurisdiction of this appeal. We assume that the court below sustained the demurrer because there was no jurisdiction. But this decision is not appealed from. It was in favor of the appellants. We find nothing here to support the view that this court is without jurisdiction of this appeal. McLish v. Roff, 141 U. S. 663, 12 Sup. Ct. 118, 35 L. Ed. 893; Carey v. Houston R. Co., 150 U. S. 170-179, 14 Sup. Ct. 63, 37 L. Ed. 1041; U. S. v. Jahn, 155 U. S. 109, 15 Sup. Ct. 39, 39 L. Ed. 87; Green v. Mills, 69 Fed. 852, 16 C. C. A. 516, 30 L. R. A. 90; Evans v. McCaskill, 101 Fed. 658, 41 C. C. A. 577; Dudley v. Board, 103 Fed. 209, 43 C. C. A. 184; Watkins v. King, 118 Fed. 531, 55 C. C. A. 290.

There is also no question of the finality of the last decree rendered by the court below. Every question has been disposed of, so far as that court is concerned. The cause has been dismissed, and orders made for the payment of the receiver. Nothing except to execute that decree remains to be done by the trial court.

We are satisfied that the bill did not show a cause of equitable cognizance. The complainant was a mere simple-contract creditor. In Scott v. Neely, 140 U. S. 106, 11 Sup. Ct. 712, 35 L. Ed. 358, the facts were closely similar to the facts in the case at bar. There a simplecontract creditor filed a bill in equity in the federal Circuit Court to have set aside a fraudulent conveyance of real estate made by his debtor, and to have the land sold for the satisfaction of the complainant's debt. The court said:

"In all cases where a court of equity interferes to aid the enforcement of a remedy at law, there must be an acknowledged debt, or one established by a judgment rendered, accompanied by a right to the appropriation of the property of the debtor for its payment, or, to speak with greater accuracy, there must be, in addition to such acknowledged or established debt, an interest in the property, or a lien thereon created by contract or by some distinct legal proceeding. Smith v. Railroad Co., 99 U. S. 398, 401 [25 L. Ed. 437]; Angell v. Draper, 1 Vern. 398, 399; Shirley v. Watts, 3 Atk. 200; Wiggins v. Armstrong, 2 Johns. Ch. 144; McElwain v. Willis, 9 Wend. 548, 556; Crippen v. Hudson, 3 Kern. 161; Jones v. Green, 1 Wall. 330 [17 L. Ed. 553]. In Wiggins v. Armstrong, Chancellor Kent held that a creditor at large, or before judgment, was not entitled to the interference of a court of equity by injunction to prevent the debtor from disposing of his property in fraud of the creditor; citing some of the above authorities, and stating that the reason of the rule seemed to be that, until the creditor had established his title, he had no right to interfere, and it would lead to unnecessary and perhaps a fruitless and oppressive interruption of the debtor's rights; adding, 'Unless he has a certain claim upon the property of the debtor, he has no concern with his frauds.' It is the existence, before the suit in equity is instituted, of a lien upon or interest in the property, created by contract or by contribution to its value by labor or material, or by judicial proceedings had, which distinguishes cases for the enforcement of such lien or interest from the case at bar."

In Cates v. Allen, 149 U. S. 451, 13 Sup. Ct. 883, 37 L. Ed. 804, the facts were essentially the same as in the case at bar. Simple-contract creditors filed a bill in equity in the federal court, alleging a fraudulent assignment by the debtor; praying for an injunction, for the appointment of a receiver, and that the assigned property be subjected to complainants' debts. The court said at page 457, 149 U. S., and page 884, 13 Sup. Ct., 37 L. Ed. 804:

"The principle that a general creditor cannot assail, as fraudulent against creditors, an assignment or transfer of property made by his debtor, until the creditor has first established his debt by the judgment of a court of competent jurisdiction, and has either acquired a lien upon the property, or is in a situation to perfect a lien thereon and subject it to the payment of his judgment, upon the removal of the obstacle presented by the fraudulent assignment or transfer, is elementary. Waite on Fraud. Con. § 73, and cases cited. The existence of judgment, or of judgment and execution, is necessary, first, as adjudicating and definitely establishing the legal demand; and, second, as exhausting the legal remedy."

In Hollins v. Brierfield Co., 150 U. S. 371-378, 14 Sup. Ct. 127-130, 37 L. Ed. 1113, it is said:

"The plaintiffs were simple-contract creditors of the company. Their claims had not been reduced to judgment, and they had no express lien by mortgage, trust deed, or otherwise. It is the settled law of this court that such creditors cannot come into a court of equity to obtain the seizure of the property of their debtor, and its application to the satisfaction of their claims."

See, also, Putney v. Whitmire (C. C.) 66 Fed. 388; Tompkins v. Catawba Mills (C. Č.) 82 Fed. 782, 783; First National Bank v. Prager, 91 Fed. 692, 34 C. C. A. 51.

It is seemingly contended by the appellee that the bankruptcy act gave jurisdiction of this cause to the Circuit Court. But we find nothing there which can avail the appellee. It is doubtful, from this record, whether the bankruptcy proceeding had been instituted before the amendment to the act took effect. But the question is of no imporNeither the original bankruptcy act nor the amendment seems to us to afford any ground for the contention of the appellee. The original act (section 23a, Act July 1, 1898, c. 511, 30 Stat. 552, 553 [U. S. Comp. St. 1901, p. 3431]) relates only to controversies between the trustee in bankruptcy and adverse claimants to property acquired or claimed by the trustee. So, also, 23b relates only to suits brought by trustees in bankruptcy. And the amendment, if applicable here, likewise only applies to suits by trustees in bankruptcy.

The court below was plainly right in sustaining the demurrer and in dismissing the cause. We are of opinion, however, that the learned trial court inadvertently erred in decreeing that the expenses of the receiver should be paid out of the proceeds of sales, and also in directing that the property and funds in controversy be put into the possession of the trustee in bankruptcy. We are of opinion that the court below should have decreed the restoration of the property and funds to the Viquesneys, and should have directed that the expenses of the receiver be paid by the complainant below.

The decrees appealed from will be reversed in the respects above mentioned, and the cause remanded. Reversed.


(Circuit Court of Appeals, Ninth Circuit. May 3, 1904.)
No. 1,001.

1. MARITIME LIENS-LOSS BY LACHES-SALE IN PROCEEDINGS IN STATE COURT. It seems that under the admiralty law applicable to the enforcement of liens the holder of a maritime lien, who participates in a proceeding in a state court which results in a sale of the vessel at his instance, loses his lien, if not by estoppel, at least by laches.

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Libelant, who was entitled to a lien on a schooner for salvage services and wages as master, filed his claim in receivership proceedings in a state court, and it was allowed. He consented to a sale of the vessel, and urged a corporation to bid, giving its officers to understand that his claim would be settled from the proceeds. He acquiesced in the sale to such corporation, and in the delivery of the vessel thereunder, and after the sale was confirmed asserted the priority of his claim to the proceeds, and only withdrew his claim after another lien, which exhausted the fund, had been given preference. Held, that he was estopped by his conduct to enforce his lien against the vessel in admiralty as against the purchaser.

1. Waiver and extinguishment of maritime liens, see note to The Nebraska, 17 C. C. A. 102.

See Maritime Liens, vol. 34, Cent. Dig. § 87.

Appeal from the District Court of the United States for the Northern Division of the District of Washington.

On April 5, 1902, the appellee filed his libel against the schooner Lilly L. to subject her to his claim of lien for services performed in Grantly Harbor in the summer of 1901, at the request of the managing owner thereof, in getting said vessel off the beach and afloat, and for services rendered as master and navigator in bringing her from Port Grantly to Seattle in the fall of that year, all of which services were claimed to have been rendered under an oral agreement with said managing owner, by which the appellee was to be paid at the rate of $100 per month, amounting in all to $786.60, and to have a lien on said vessel therefor. The appellant, as claimant of the schooner, answered, denying some of the material allegations of the libel, and alleging that in December, 1901, an action was instituted in the superior court of Washington for King county by the copartners and owners of said schooner, alleging that the schooner was out of commission, and depreciating in value, and praying that a receiver be appointed to sell her and to wind up the partnership affairs; that on December 20, 1901, a receiver was duly appointed for said vessel; that he gave due and proper notice of his appointment to all creditors and claimants; that on February 1, 1902, the appellee filed with said receiver his claim for services as it is now set forth in his libel; that the claim of the appellee was received by the receiver, and by him filed and allowed; that on February 8, 1902, with the consent of all parties to that action and of the appellee and his attorneys, an order was made directing the sale at public auction of the said vessel, and on March 1, 1902, it was sold to the appellant herein, who was the highest bidder therefor; that said sale was made without protest on the part of the appellee or any person, the said appellee being then and there informed of the sale, and approving and ratifying the same, and that at the time of the sale he informed the appellant that, if it would buy said vessel, he would not claim, and did not claim, any lien against the same for wages or otherwise; that the said appellant purchased said vessel without the knowledge or information that the appellee claimed or expected to claim any lien against the same for work done and performed previous to the sale of said vessel at the receiver's sale, and under the distinct understanding and statement from him that he did not have, nor would he attempt to enforce, any claim or lien against said vessel; that said sale was afterwards confirmed and approved, and that upon a hearing had in said superior court on April 2, 1902, at which hearing the appellee was represented by his attorneys, it was adjudged that the claim of one J. Clark of $476.40 for services performed in repairing said vessel while she was lying on the ways should be allowed as a first lien on the fund derived from the sale; that on April 5, 1902, after the state court had directed the entry of an order in accordance with its judgment, but before the order was signed, the appellee appeared by his attorneys, and upon motion, by leave of the court, withdrew his claim. Exceptions to this answer were filed by the appellee, and they were overruled. Thereafter testimony was taken, and the court adjudged that the appellee had alleged and proved facts sufficient to entitle him to salvage compensation in the sum of $400, with interest, and that the vessel be sold to satisfy the same. The following facts are established by the evidence: The vessel arrived at Seattle in the latter part of October, 1901. In December following the receiver was appointed in the suit in the state court. At that time, and until after the sale of the vessel, she was lying out of the water, and on the marine ways. The appellee's claim was filed with the receiver on February 1, 1902, and was thereupon allowed. The order of sale was made on February 8th. On March 1st the vessel was sold at public auction to the appellant for $502. and on March 8th the sale was confirmed. On April 2, 1902, the question of the priority of liens upon the fund in the hands of the court for distribution was heard before the superior court. The appellee was present, and testified before the court concerning his services and the items of his claim. His attorneys urged that his claim was a first lien upon the fund after payment of the receiver's costs and expenses. Clark, who made the last repairs on the vessel, contended that his claim was superior to that of the appellee. The court, at the conclusion of the hearing, rendered an oral decision adjudging the lien of

Clark to be superior, and the claim of the appellee to be second thereto, and directed that a judgment order be made accordingly. On April 5th, and before the judgment order was presented to the court for signature, the appellee, by his attorneys, upon an ex parte application, obtained leave of the court to withdraw his claim, and thereupon withdrew it. The testimony pertaining to the defense pleaded by the appellant is, in substance, as follows: John Rosene, president of the appellant, testified that the appellee came to his office in Seattle several times after it had been decreed that the schooner be sold, requested him to become a bidder, and gave him to understand that he had a claim against the schooner, and that he desired to have the sale made, and to have some person bid in competition with Clark, who also had a lien; that at the day of the sale the witness was present, and had bid $400, and had decided to make no further bid, when the appellee urged him to bid more, whereupon he bid $502, and the vessel was struck off to him. He further testified that at the time of the sale, before buying, in the presence of the appellee, he made inquiry of the receiver concerning the condition of the vessel as to liens or claims against it, and whether or not all parties who had or claimed to have such liens or claims were included in the proceedings, and that the receiver answered him that, so far as he knew, all claims against the vessel were included in the proceedings. The appellee testified that before the sale he had a conversation with Mr. Williams, an officer of the appellant company, in which he told Williams that he thought the vessel would sell for about a thousand dollars, and that Williams said, "Then you will get all the money," and that the witness answered: "Pretty close to that besides what the receiver will get. * 串 * I stated to him that I calculated to get my money out of that vessel, no matter what became of her, or who would buy her; and I told him if they would buy her the money would come to mewhat she was sold for; and he was satisfied to that effect." He testified further that on the day of the sale he informed Mr. Rosene that he had a $786 bill against the vessel, and that Rosene said, "This will come out of this sale when they sell her," and that he replied, "I don't know where it is going to come out, but that is the claim that I have against the vessel." The receiver testified that he did not hear the conversation between the appellee and Rosene at the time of the sale, but that they were there together, and during the bidding the appellee "frequently spoke, or rather whispered, to Rosene— spoke low." Trenholme, the secretary of the appellant, testified that some time prior to the sale the appellee came to the office of his company to induce the company to buy the boat, and stated that liens had been filed with the receiver, and that she was going to be sold, and that among other claims was his own; that he came in repeatedly to induce the company to bid; that he stated that Mr. Clark "had trumped up a claim for repairs that was not done, and for the use of the ways at Ballard, and that he would like to see Mr. Clark beaten out of his claim." There was no denial of any of the foregoing testimony. The only evidence concerning the value of the schooner was that of the appellee, who estimated it at $1,000, and that of Trenholme, who testified that it was of no value whatever.

John P. Hartman, for appellant.
Greene & Griffiths, for appellee.

Before GILBERT and ROSS, Circuit Judges, and HAWLEY, District Judge.

GILBERT, Circuit Judge, after stating the case as above, delivered the opinion of the court.

The contention that the proceedings in the state court and the sale thereunder bar the present suit presents a question that has not been directly met by any decision of the Supreme Court. It is undoubtedly true that the fact that a libelant has already brought suit in a state court for the same claim is no bar to a subsequent proceeding in admiralty. The Highlander, 1 Sprague, 510, Fed. Cas. No. 6,476; The Kalorama,

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