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from members an inspection charge for the privilege of partially unloading and examining at this yard cars consigned to them. If the tracks be private and the cars delivered thereon be subject to demurrage when held beyond free time, it is difficult to perceive any basis for charging the consignees for the privilege of there inspecting the contents by their own employés. It is also true that the defendants are accorded the privilege of receiving notice of arrivals by bulletins at the yard, under Rule 2-4-B. This apparently only applies to "stations," which, it is claimed, must be understood to mean portions of the railroad itself as distinguished from private tracks. And it is argued that the plaintiff has thus designated this yard as a station-therefore, a public facility. The circumstances of the situation suggest a schedule-making problem; but that would be for the Interstate Commerce Commission.

The plaintiff may be in error in assessing the inspection charge. That, of course, is not now decided, because it is not directly involved in this case. In any event, this circumstance is not controlling, nor is the fact that the parties have agreed to accept notice of arrivals by bulletin. Those matters are only indicative of the views of the parties concerning the status of this yard and cannot override the fact that the yard is, by its very ownership, holding, and tenure, a private one.

3. The third question relates to 25 out of the 40 cars in question. They came to Cincinnati over other carrier lines by which they were held for the Pennsylvania Railroad, to be delivered to the plugging yard. This the Pennsylvania Railroad could not do on account of the congested condition of the yard. The other carrier lines charged the Pennsylvania $1 per day for each car, in accordance with the per diem agreement among railroads; and they were in turn accountable to the lines owning the respective cars for a like rental. Therefore the Pennsylvania constructively received the cars and held them, as it were, on storage in the yards of the carrier lines, waiting until defendant's situation was such as to permit it to complete its duty as the final carrier. Plaintiff meanwhile placed them constructively by giving notice to consignee. It is the defendant's contention that the fifth demurrage rule of plaintiff's tariff applies only when it is the carrier, and not when it is the switching line. [7] But the rule declares that "the switching line will notify consignee and put

such cars under constructive placement." Inasmuch as the switching line takes constructive possession of the cars from the carrier line under the per diem agreement, it is thought that the demurrage is to be assessed in accordance with the tariff of the former. But should this not be so, nevertheless it is undoubted that the delivering carrier may collect all charges from the consignee, including those of its connections. Wabash R. R. Co. v. Pearce, 192 U. S. 179, 24 S. Ct. 231, 48 L. Ed. 397; P. C. C. & St. L. v. Fink, 250 U. S. 577, 40 S. Ct. 27, 63 L. Ed. 1151; N. Y. C. & H. R. Ry. Co. v. York & Whitney, 256 U. S. 406, 41 S. Ct. 509, 65 L. Ed. 1016. In the present case it is admitted that the demurrage tariffs of the carrier lines were the same as that of plaintiff; therefore, the demurrage accrued under the one or the other, and the plaintiff is entitled to sue for and collect it under either.

[8] 4. The second and third defenses made by the answer are, by consent of defendant's counsel, to be treated as one. They aver that cars consigned to other members of the Grain and Hay Exchange arriving at the various railroad yards in Cincinnati were, in some instances, delivered to the plugging yard earlier than prior arrivals consigned to the defendant. And it is claimed that the plaintiff is not entitled to ask demurrage when it might have placed defendant's cars earlier if the strict order of arrival had been followed. It is not shown in how many instances this happened, or to what extent.

[9] Demurrage rule 8, section E, is as follows:

"Section E. Railroad Errors Which Prevent Proper Tender or Delivery. Under this rule demurrage will be charged on the basis of the amount that would have accrued

but for such errors. This also applies in the case of constructively placed cars being 'runaround' by actually placing recent arrivals ahead of previous arrivals."

Plaintiff admits that it had no right to charge demurrage for delay caused by running one car around another which was on placement and consigned to the same per

son.

impropriety in running cars consigned to

It asserts, however, that there was no

one member around cars on constructive

placement consigned to another member of the Exchange, and that for delays so caused to the car on placement it may collect demurrage. This contention cannot be sustained. Constructive placement is permissible only after physical tender of the car or circumstances which excuse it, as inabil

2 F.(2d) 699

ity to accept for causes attributed to the consignee. Union Bag & Paper Corp. v. Director General, 61 Interst. Com. Com'n R. 424. The inability of the consignee to accept the first arrived car can only be considered to continue until opportunity to place it in the yard occurs. If the plaintiff prefers to fill the space first vacated by a subsequently arrived car, the failure to deliver the first car is no longer caused by the inability of its consignee to receive it, but by the election of the railroad to use the available space for the delivery of the subsequent arrivals. Under the rule quoted,

consignees in the "plugging yard" for reshipment (the word "reconsignment" was used in the former opinion inadvertently and without regard to its technical meaning), and therefore the rule last referred to applies. Defendants were entitled to only 24 hours' free time; consequently, the judgment must be for the sum of $441.87.

In re DUKER AVE. MEAT MARKET. JOHNSON v. STIMPSON COMPUTING SCALE CO.

the “running around" of cars so placed by (Circuit Court of Appeals, Sixth Circuit. De

subsequent arrivals was a railroad error preventing proper delivery of the former and requiring demurrage thereon to be charged on the basis that would have accrued but for such error.

The evidence shows, and there is no denial of it, that such errors did occur in the present case. To what extent, and with reference to what cars, it is not shown. A correct disposition of the controversy requires proof upon this subject. The parties I will be given two weeks to agree. If they cannot do so, it will be audited.

cember 8, 1924.)

No. 4096.

I. Bankruptcy 185-As against chattel mortgagee, trustee has rights of any creditor under state law before bankruptcy.

Under Bankruptcy Act, § 47a, as amended in 1910 (Comp. St. § 9631), bankruptcy trustee's rights as against chattel mortgagee are not dependent on actual lien obtained, but he has whatever rights any creditor could, under state law, have obtained by legal or equitable proceedings before bankruptcy.

2. Bankruptcy 184 (2)-Lien of unrecorded Kentucky chattel mortgage inferior to lien of trustee for prior and subsequent debts.

In absence of decision by Kentucky Court

Supplemental Opinion of Judge Peck Filed of Appeals construing Ky. St. § 496, as added

March 27, 1923.

If

Since the filing of the opinion on the merits, the parties have agreed upon the extent of the "runarounds" but are now in disagreement as to whether the consignees were entitled to 48 hours' or to 24 hours' free time under the demurrage rules. defendants had 48 hours, it is agreed that plaintiff would, under the holdings heretofore announced in this case, be entitled to recover $296.64; on the other hand, if they were entitled to but 24 hours, then the amount of their recovery should be $441.87. [10] By rule 2-A, 48 hours' free time is allowed for loading or unloading. These cars were not loaded or unloaded, but were "plugged," that is to say, enough of the contents was removed to reveal to the inspectors the character of the remainder. The carload was then sold on sample. So much of the contents as had been removed were replaced and the car was reshipped, ordinarily on new billing, to the purchaser. By rule 2-B-2, when cars are held for reconsignment or reshipment of the freight in the same car in which it was received, the free time is but 24 hours. The words "are held" are shown by rule 1 to mean held either by 'consignors or by consignees. The evidence shows that these cars were held by

to in 1916, statute should be liberally construed against evil of secret liens; hence lien of unrecorded chattel mortgage is inferior to lien of bankruptcy trustee for debts created prior to execution of mortgage and all subsequent debts created without notice of mortgage lien, in 1910 (Comp. St. § 9631). in view of Bankruptcy Act, § 47a, as amended

3. Bankruptcy 245-Trustee not creditor, but merely represents creditors.

Bankruptcy trustee is not creditor, but merely represents creditors, and is vested with whatever right any or all of them might have had as against the mortgagee at the date of filing the petition in bankruptcy.

Petition to Revise the Order of the District Court of the United States for the Western District of Kentucky; Charles H. Moorman, Judge.

In the matter of Duker Avenue Meat

Market, bankrupt. On petition of C. W. Johnson, trustee, to revise the order of the District Court (295 F. 913) made on petition of the Stimpson Computing Scale Company. Petition granted and cause remanded.

D. A. Sachs, Jr., of Louisville, Ky., for petitioner.

Burnett, Batson & Cary, of Louisville, Ky., for respondent.

Before DENISON, MACK, and DONAHUE, Circuit Judges.

MACK, Circuit Judge. The question before us is whether and, if so, to what extent the rights of the holder of a Kentucky purchase-money chattel mortgage, recorded only after the mortgagor's adjudication in bankruptcy, are superior to those of the trustee in bankruptcy.

[1,2] Inasmuch as under the amendment of June 25, 1910, to section 47(a) of the Bankruptcy Act (Comp. St. § 9631), the trustee is vested "with all the rights, remedies and powers of a creditor holding a lien by legal or equitable proceedings," the title vested in the trustee would be subject to the mortgagee's lien only for such sum as the mortgagee would have been entitled to as against all other creditors whose rights at the filing of the petition in bankruptcy were under Kentucky law subject to the mortgage. It is now well settled that under the 1910 amendment of the Bankruptcy Act, § 47a, the trustee's rights as against the mortgagee are not dependent upon an actual lien obtained by a creditor before bankruptcy; he has whatever rights any and all creditors could under the state law have obtained by legal or equitable proceedings before bankruptcy. Potter Mfg. Co. v. Arthur, 220 F. 843, 136 C. C. A. 589, Ann. Cas. 1916A, 1268 (C. C. A. 6). Therefore the determination of the extent of the lien depends upon the construction of section 496 of the Kentucky Statutes, copied in the foot note,1 of which the second paragraph was added by amendment of 1916.

1. The word "creditors," in section 496, before the amendment of 1916, was held not to include either antecedent creditors or such subsequent creditors as at the time they obtained a lien had notice of the then unrecorded mortgage. Therefore only those creditors whose claims arose subsequent to the mortgage could obtain a lien ahead of the mortgage by attachment or execution, and this only if they levied without knowledge of the mortgage and before it was recorded. Holt v. Crucible Steel Co., 224 U. S. 262, 32 S. Ct. 414, 56 L. Ed. 756; Jewell v. Cecil, 177 Ky. 822, 198 S. W. 199.

2. The District Judge in this case decided on February 14, 1924, in accordance with

1 "No deed or deed of trust or mortgage conveying a legal or equitable title to real or personal estate shall be valid against a purchaser for a valuable consideration, without notice thereof, or against creditors, until such deed or mortgage shall be acknowledged or proved according to law and lodged for record.

"The word 'creditors' as used herein shall include all creditors irrespective of whether or not they may have acquired a lien by legal or equitable proceedings or by voluntary conveyance."

the mortgagee's contention and concession, that the lien of the mortgagee was "superior to the lien of the trustee for such debts as were created prior to the execution of the mortgage but inferior to the trustee's lien for such debts as were created after the execution of the mortgage." In other words, under his decision on a sale of the mortgag ed property there would be apportioned to the trustee an amount equal to the sum to al of all debts created only after the execution of the mortgage, leaving the mortgage lien to be satisfied out of the surplus, if any.

3. In Dougherty v. Petty, decided April 26, 1924, by Judge Field in the common pleas branch of the Jefferson circuit court, First division, the 1916 Kentucky amendment was construed to abolish the distinetion between antecedent and subsequent creditors, thereby giving the former the same rights as the latter. But the court further held that as purchasers with notice of the unrecorded mortgage were not protected as against such a mortgagee, "all creditors" was to be limited to those who had no notice of the mortgage when their lien was obtained. Under this construction of the statute, the trustee would have priority for an amount equal to all debts, whether created before or after the execution of the mortgage, except only those due to creditors who at the time of filing the petition had notice of the mortgage.

[3] 4. The contention that the trustee is himself a subsequent creditor without notice is without merit; he is not a creditor at all; he merely represents the creditors and by virtue of the Bankruptcy Act is vested with whatever rights any or all of them might have had as against the mortgagee at the date of filing the petition in bankruptey.

5. The 1916 amendment must be construed in the light of the narrow construction of the word "creditors" in the original statute, in which it was used without any qualifying word or phrase. Neither the District Judge nor Judge Field has given the word "all" its broadest meaning; the former excluded antecedent creditors; he had no oecasion to determine whether or not subsequent creditors without a specific lien were likewise excluded; the latter included antecedent creditors but excluded all creditors without a specific lien or with notice of the mortgage at the time they acquired the specific lien.

That the amendment was intended to broaden the rights of creditors is clear; that creditors with notice of the unrecorded mortgage are to be excluded, we think, is clear for the reasons stated by Judge Field; it is

2 F.(2d) 701

unnecessary in this case to determine whether, in proceedings other than bankruptcy, creditors without notice but also without specific liens would likewise be excluded, inasmuch as by the 1910 Bankruptcy Act amendment the trustee takes the rights of creditors who could have, even though they have not, obtained a lien. There remains then the question whether or not the rights of antecedent as well as subsequent creditors, who at the date of filing of the petition in bankruptcy are without notice of the mortgage, are to be deemed superior to the lien of the mortgage.

It would seem that if they are subordinated, little, if anything, would have been accomplished by the amendment. On the one hand, the phrase "all creditors" as distinguished from "creditors" would literally include those antecedent as well as those subsequent to the execution of the mortgage; on the other hand, this phrase is qualified by the following clause which could be construed as indicating that "all" was not to be given a literal meaning but only creditors as used in the original statute, irrespective, however, of whether such creditors shall have acquired a lien by proceedings involuntary as to the debtor or shall have obtained a title by conveyance voluntary as to the debtor.

In the absence of a decision of the Court of Appeals of Kentucky, and with full recognition of the difficulty of determining the true meaning of the statute, we believe that it should be liberally construed as against what the Legislature deemed an evil, secret liens, and therefore to protect antecedent as well as subsequent creditors.

Petition to revise granted, and cause remanded.

charge that railroad was required to use increased or greater care as train approached crossing, if weeds and bushes obstructing view were on its right of way, held prejudicial error. 3. Railroads 350 (13)-Contributory negligence of occupant of automobile jury question.

In action for death of occupant of automobile struck by train at crossing, question of contributory negligence was one for jury, under proper instructions as to law.

In Error to the District Court of the United States for the Western Division of the Northern District of Ohio; Paul Jones, Judge.

Action by Bessie Napier, administratrix of the estate of Charles Napier, deceased, against the Northwestern Ohio Railway & Power Company. Judgment for defendant, and plaintiff brings error. Reversed and remanded.

Ritter & Schminck, of Toledo, Ohio, and John F. McCrystal, of Sandusky, Ohio, for plaintiff in error.

True & Crawford, of Port Clinton, Ohio, for defendant in error.

Before DENISON, MACK, and DONAHUE, Circuit Judges.

PER CURIAM. On August 16, 1920, an automobile in which Charles Napier, husband of Bessie Napier, was riding, was struck by an interurban car then moving in an easterly direction over the track of the Northwestern Ohio Railway & Power Company at a point where it crosses a private road in Ottawa county, Ohio, known as Lee road, or Lee lane, which road at this point extends in a northerly and southerly direction. The automobile was owned by Charles Napier, and was being driven by his son, Orris Napier, both of whom, with another occupant of the auto

NAPIER v. NORTHWESTERN OHIO RY. mobile, were instantly killed.

& POWER CO.

Bessie Napier, as administratrix of her

(Circuit Court of Appeals, Sixth Circuit. De- husband's estate, brought an action in the

cember 6, 1924.)

No. 4073.

38

1. Courts 356-Exceptions, bill of
Federal court can settle and sign bill of ex-
ceptions at any time during term; state
statute not imposed by Conformity Act.

Ohio statute relating to bill of exceptions does not by force of Conformity Act apply to federal courts, but federal court has authority to settle and sign bill of exceptions at any time during term, regardless of any order made within the term fixing a time for that purpose. 2. Railroads 351 (8)-Refusal to charge railroad was required to use greater care where view was obstructed, held prejudicial

error.

In action for death of occupant of automobile struck by train at crossing, refusal to

District Court to recover damages for the wrongful death of her husband, which it is averred in the petition was caused through the negligence of the defendant railway and power company. The answer denied negligence on the part of the defendant, and averred that the accident resulting in the death of these three men was occasioned solely by the negligence of Charles Napier and Orris Napier in driving their automobile upon the track of the defendant without stopping, looking, or listening. The reply denied negligence on the part of Charles and Orris Napier. A verdict was returned in favor of the defendant. A motion for new

trial was overruled, and judgment was entered upon the verdict.

In her petition the plaintiff alleged, among other things, that the defendant had carelessly and negligently allowed the view of its track to be obstructed by weeds, bushes, shrubbery, and trees growing along its right of way and close to its railway tracks, so that it was impossible for persons approaching this crossing going in a northerly direction on Lee road to see the car coming from the west in time to avoid a collision. Upon the trial of the cause, evidence was introduced on behalf of the plaintiff tending to prove this allegation of her petition.

[1] The objection to the bill of exceptions cannot be sustained. The Ohio statute in reference to the signing and filing of a bill of exception does not, by force of the Conformity Act, apply to the federal courts. On the contrary, the federal court has authority to settle and sign a bill of exceptions at any time during the term, regardless of any order made within the term fixing a time for that purpose. In the absence of anything to the contrary appearing in this record, this court may assume that the term in which the motion for a new trial was overruled continued until the last Tuesday in October, which is the date fixed by statute for the beginning of the subsequent term. Prior to this time a motion was filed for extension of time. This motion was not acted upon during the term, but we may assume, also, that in accordance with the general practice this motion was carried over until the next term under a standing rule or by a general order of the court.

The court charged the jury that "plaintiff further claims that the view of plaintiff's decedent and those who were with him in this automobile approaching that crossing was obstructed by trees and bushes growing to the west of the lane, and to the south of the right of way of the electric railroad's tracks at this point." This inadvertence on the part of the court in stating the exact claim of the plaintiff is followed in the charge by the further statement that "the defendant company is not responsible for bushes or trees or obstructions which grow up or are not upon its own right of way, but upon the lands of others."

[2] The court also charged the jury that "if the view is obstructed at the crossing, or in proximity to the crossing, a greater degree of caution and care or increased vigilance is required of the person undertaking to cross over this interurban track, and that duty devolved upon this plaintiff's

decedent because of the fact that his son was operating this car," but refused the request of the plaintiff to charge "that the defendant was required to use increased or greater care as it approached this crossing, if the weeds and bushes were on its own right of way." The refusal to give this request, or its equivalent, in the general charge, was prejudicial error.

[3] Upon the question of contributory negligence this court does not express any opinion whatever. That question is one for determination by the jury under proper instructions as to law.

For error of the court in failing to state the corresponding duties of defendant, where obstructions are permitted to grow or remain upon its right of way, the judgment is reversed, and cause remanded for further proceedings.

HORBACH v. COYLE et al. (Circuit Court of Appeals, Eighth Circuit. September 12, 1924.)

No. 6222.

1. Contracts 113(3)-Directors' agreement, for secret bonus, to practice deception on stockholders and cause transfer of stock, held illegal.

Corporate directors' agreement, in consideration of secret bonus, to practice deception majority of stock to another company, and to on general stockholders, and cause transfer of

make its officers directors, in order that assets might be transferred to it, held illegal.

2. Evidence 419(11)-Parol evidence, contradicting consideration recited in written contract, is inadmissible.

Parol evidence, contradicting consideration expressed in instrument, and thereby defeating or changing its operation, or adding new matter, is inadmissible.

3. Evidence 437-Parol evidence rule does

not exclude evidence that consideration was vicious or illegal.

mission of evidence showing consideration for Parol evidence rule does not preclude adcontract vicious or illegal. 4. Contracts

113(1)-Contract having as object perpetration of fraud is illegal and void.

Contract having for its object the perpetration of a fraud on a third person is illegal and void.

5. Contracts 113(3)-Contract by one occupying confidential relation to use influence for another for secret consideration illegal.

Contract by which one occupying a confidential relation with a third party for secret consideration agrees to use his influence to effect a bargain between such third person and the other party to the contract is illegal, as constituting or tending to constitute a fraud. 6. Contracts 113(3)-Contract tending to induce corporate officers to disregard interests of corporation and stockholders is illegal.

Contracts tending to induce corporate officers to act in disregard of true interests of

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