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not itself in specific terms declared another rule, the rule of the state as established by its statutes and its courts should not be controlling

The finding of the referee, therefore, in respect to the claim of the Unitype Company, is reversed, and the claim of that company to title to this machine and appurtenances denied.

THE MALLAY.

(District Court, D. New Jersey. March 24, 1905.) SHIPPING-INJURY OF SCHOONER IN SLIP-INSUFFICIENT FASTENING OF Scov.

The injury to a schooner's bowsprit as she lay in a slip held, under the evidence, to have been due to chafing by the bows of a scow tied a few feet away, and which, through the fault of those in charge, was insufficiently fastened, so that it drifted close to the schooner during a high wind.

In Admiralty.
Foley & Wray, for libelant.
Peter S. Carter, for claimant.

LANNING, District Judge. On February 6, 1896, the schooner William Bleakley was lying in the slip along and parallel with the northeasterly side of the pier at the foot of Twenty-Fourth street, South Brooklyn, where she had been some three weeks. Her bow lay toward the outer end of the pier, and about 60 feet back therefrom. Along and parallel with the outer end of the pier (being the north westerly end) a scow, which I designate scow No. 1, was lying; her direction being at right angles to that of the schooner, and her end extending some feet (how many does not appear) beyond the northeasterly side of the pier. Between scow No. 1 and the schooner lay scow No. 2, but, as she was too long to get her full length in between scow No. 1 and the schooner, she lay with her bow tied close to the northeasterly side of the pier, a few feet in front of the schooner's bow, and with her stern outside of the end of scow No. 1. Her position, therefore, was diagonal to the northeasterly side of the pier. Scow No. 3 (being the Mallay, complained of by the libelant) lay by the side of the scow No. 2. Her bow was about even with the bow of scow No. 2, but, being several feet longer, her stern extended out of the slip, and in front of the scow No. 1. Her position, therefore, was also diagonal to the northeasterly line of the pier. Scow No. 4 lay alongside of the schooner, with the schooner between it and the pier. The bow of this lastmentioned scow was about even with the bow of the schooner. The bowsprit of the schooner was about 35 feet in length, and early in the morning of February 7th, a heavy wind having arisen, the underside of the bowsprit, about halfway between its end and the knightheads, was gouged and dug out to such an extent that it was necessary, as the libelant claims, to put into the schooner a new bowsprit. The question is, what vessel is responsible for the

damage, and, if the Mallay is responsible for it, what amount shall be awarded to the libelant?

The claimant of the Mallay insists that the damage was done by the lines of scow No. 4 which tied it to the pier; these lines, as it appears, passing both over and under the schooner's bowsprit. But the evidence utterly fails to support this theory. John Connors, William Ward, and John Carter all slept on the schooner during the night of February 6th. They rose early in the morning of February 7th, and found that during the night the storm had driven the Mallay toward the schooner, and that the Mallay was then bouncing up and down on the waves, striking the bowsprit of the schooner and gouging a hole in it. Each of these men declares that he helped in the work of readjusting the lines of the Mallay and in pushing her away from the schooner. The testimony of these eyewitnesses is not contradicted by that of any other witness. Lewis Swansen, the master of the Mallay, who slept on her that night, but who, when she was pushed away from the schooner, had evidently gone to his breakfast, himself says that he saw the damage done to the bowsprit about noon on February 7th, that the bowsprit was rotten, and that he took a handful of the wood of the bowsprit and found it "soft and rotten." It is not pretended by any one that at the time when he says be observed the condition of the bowsprit he could have reached it. If he handled any of the bowsprit's wood at all, he must have found it on his own scow. Indeed, Joseph Beyers, a witness for the libelant, declares that he saw ground pieces of the wood that had been gouged out of the bowsprit on the bow of the Mallay at the time the Mallay was pushed away from the schooner. I have no doubt, therefore, that the damage to the bowsprit was done by the Mallay. Nor does the evidence convince me that there was any rotten wood in the bowsprit.

The libelant insists that the Mallay was negligently tied, and that the damage was the result of such negligence. Considerable testimony has been taken on this point, but I am of the opinion that the weight of it decidedly favors the libelant. The Mallay does not seem to have had any lines that prevented her from sagging farther into the slip toward the schooner and coming into contact with her bowsprit. The evidence shows that if a line had been run from the bow of the Mallay to the stern of scow No. 2, which lay between her and the pier, it would have been impossible for the Mallay to come into contact with the schooner's bowsprit.

The contention of the claimant that the libelant's schooner was not properly tied to the pier, and that she drifted from the pier toward the Mallay, and thus incurred the injury to her bowsprit, is not, in my opinion, proven. The schooner was well secured with 11 lines, extending both from her bow and her stern to the pier.

The only remaining question, therefore, is as to the amount of damage that shall be awarded to the libelant. The libelant claims $100. I think the evidence shows that it was necessary to substitute a new bowsprit for the injured one. I think, further, that a

136 F.--63

new bowsprit could have been furnished for $80. It may be that a new bowsprit would put the vessel into a somewhat better condition than it previously was, but the claimant cannot take advantage of this fact. The Alaska (D. C.) 44 Fed. 498, 501. The John H. Starin (D. C.) 116 Fed. 433.

A decree in favor of the libelant for $80 may be prepared.

In re ROBINSON et al.
(District Court, D. Massachusetts. April 17, 1903.)

No. 8,074.
BANKRUPTCY-PROOF OF CLAIMS-USURIOUS NOTES-DISALLOWANCE-ANEND-

MENT-MONEY FRAUDULENTLY OBTAINED.

Where a creditor of a bankrupt sought to prove a note made in New York drawing usurious interest, and the claim was disallowed under the New York law on account of the usury, the creditor was entitled to amend his original proof by substituting therefor a claim for money fraudulently obtained by the bankrupt and received to the claimant's use. In Bankruptcy.

John G. Palfrey, Charles E. Haywood, and Clifton L. Bremer, each for a creditor.

LOWELL, District Judge. A creditor sought to prove a note made in New York at a usurious rate of interest. On due objection the claim was disallowed, and the creditor has moved to amend his original proof by substituting therefor a claim "for money fraudulently obtained by said bankrupt and received to the deponent's

The frauds alleged were representations of fact concerning the bankrupt's business, his assets, and his intended application of the money borrowed. The referee refused to permit the amendment on the ground that the claim as amended would not be provable. If provable as amended, it should be allowed. The law of New York so taints with illegality a usurious contract that money borrowed thereby cannot be recovered as money had and received. Hammond v. Hopping, 13 Wend. 505; Thomas v. Scutt, 127 N. Y. 133, 27 N. E. 961. The creditor cannot recover upon the usurious contract itself, nor yet upon the common counts, since any implied contract to pay money advanced is merged in the express usurious contract actually made. If, however, the creditor can establish a provable claim apart from the usurious contract, and unaffected by it, he will prevail. If A. obtains money by false pretenses from B., and gives him a note for the money thus obtained, B. may condone the fraud, and sue on the note, or he may sue to recover back the money, disregarding the fraudulent contract of which the note is evidence. Let us suppose that a note is nonusurious, and not yet due, the loan obtained by fraud. The creditor can either prove the note with a rebate of interest, or, disregarding the note, can prove for money had and received as due at once and without rebate. If a creditor can prove for

money had and received without regard to a nonusurious note, he can here prove without regard to the usurious note. See Bradley v. Rea, 14 Allen, 20; Id., 103 Mass. 188, 4 Am. Rep. 524; also In re Arnold, 13 Am. Bankr. R. 320 (D. C. ) 133 Fed. 789.

The judgment of the referee is reversed, and the case is recommitted to him, with instructions to permit the amendment and to take further proceedings not inconsistent with this opinion.

In re ANDERS PUSH BUTTON TELEPHONE CO.
(District Court, S. D. New York. April 12, 1903.)

No. 7,297.

BANKRUPTCY-COMMISSIONS OF REFEREE AND TRUSTEE-PBOCEEDS OF PROPERTY

SUBJECT TO LIEN.

A court of bankruptcy has no power, under Bankr. Act July 1, 1898, C. 541, 30 Stat. 544 (U. S. Comp. St. 1901, p. 3418), to require a creditor secured by a valid lien to pay commissions on the amount realized thereon to the trustee and referee, although by stipulation the property is sold by the trustee; the proceeds of the property, so far as necessary to satisfy the lien, being no part of the estate, from which all commissions are made payable. In Bankruptcy. On review of order of referee. Taylor More, for Thomas B. Crary, mortgagee. Henry W. Sykes, for Crouch & Fitzgerald, creditors,

HOLT, District Judge. This is a petition to review an order of the referee directing a secured creditor to pay to the referee and the trustee the amount of their commissions on the secured creditor's claim. Crary, the secured creditor, loaned $5,000 to the bankrupt, and took as security, more than four months before the bankruptcy, an assignment of certain letters patent and a chattel mortgage. After the bankruptcy Crary and the trustee entered into a stipulation that the trustee should sell the assets covered by the assignment and the mortgage, the proceeds to be subject to the lien. This was done. The proceeds were more than sufficient to pay the claim, and the trustee paid it in full. Thereafter the referee made an order directing Crary to pay the commissions of the referee and trustee on the amount received by him.

I am not able to concur with the decision of the referee in this case. Crary's lien was concededly valid, and was created more than four months before the bankruptcy. The trustee, therefore, took the estate subject to the lien; and I do not see how the lienor can be deprived of the right under his lien to payment in full. The property, to the extent that it was covered by the lien, was no part of the bankrupt's estate. The theory of the cases cited by the referee (Re Coffin, 2 Am. Bankr. Rep. 348; Re Barber, 3 Am. Bankr. Rep. 306, 97 Fed. 547; and Re Sabine, 1 Am. Bankr. Rep. 322) seems to be that, if a lienor makes use of the machinery of the bankrupty court to realize on his lien, he may justly be required

to pay the referee's and trustee's commissions on the amount of his claim. These cases were all decided before the amendment of 1903, and seem to have been influenced by the fact that before that amendment no commissions were allowed, except on dividends paid. But the act makes all commissions payable out of the estate, and the estate does not include that portion of the assets necessary to satisfy a valid lien. If the lien were foreclosed in a state court, or enforced by any other legal proceedings, the necessary expenses would be added to the claim secured by the lien, and deducted from the proceeds of the sale of the property. In other words, the general estate has to pay, in any case, the proper expenses of enforcing the lien, as well as the amount due under the lien. I think, moreover, it would be a bad precedent to establish the principle that, if lienors take advantage of the machinery and Officers of the bankruptcy court to realize on their lien, they must pay commissions. They should be encouraged to enforce their liens through the bankruptcy courts. If they are driven to suits to foreclose, greater delay and expense will probably be incurred. The authorities cited undoubtedly afford considerable support to the conclusion of the referee, but I think that the bankruptcy court has no power, under the act, to make any deductions from a claim secured by a valid lien.

The referee's order is reversed.

THE ATLANTIC CITY.

(District Court, D. New Jersey, March 31, 1905.) COLLISION-STEAM VESSELS MEETING-VIOLATION OF RULES.

Two steam vessels meeting in the Delaware river at night, where the channel was 2,000 feet wide, showing each other their green lights, both signaled their intention to pass starboard and starboard, but neither heard the signal of the other. They continued their course and speed, however, without further signals, until close together, when one, in the mistaken belief that the other gave a signal of one whistle, ported her helm, the result being a collision. Held, that both were in fault for violation of rule 3 of the supervising inspectors, which required them, when failing to understand the course or intention of the other, to so signify by signal, and to slow down until an agreement was reached and understood, or until they had passed each other.

[Ed. Note.-Collision rules as to signals of meeting vessels, see note to The New York, 30 C. C. A. 630.] In Admiralty. Suit for collision. Carpenter & Park, for libelant.

Francis C. Adler, James F. Campbell, and John F. Lewis, for claimant.

LANNING, District Judge. This is a libel for damages occasioned by a collision between the steamboat Sylvan Glen and the steam ferryboat Atlantic City at about 11 o'clock in the evening of August 18, 1896, in the Delaware river opposite the city of Philadelphia. The libel was filed January 23, 1897, and the answer on

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