Clark v. Five Hundred & Five Thousand Feet of Lumber

65 F. 236 | 7th Cir. | 1894

SEAMAN, District Judge

(after stating the facts). This is a proceeding in admiralty, in rein, for the enforcement. of a lien for. freight against the cargo of lib el an Us vessel. The existence of the lien is Unquestioned, and it was operative in favor of the vessel owner from (lie moment Hie cargo was taken on board. 11s enforcement was a matter peculiarly within the admiralty jurisdiction of the district court. The libel was filed, and the cargo came into the custody of that court through its seizure by the marshal, on September 15, 1892. The only objections urged by the consignee (respondent here and claimant below) against the enforcement of the lien are based upon the following claims: (1) that the libel was prematurely filed: and (2) that under certain subsequent attachment proceedings in the circuit court for Cook county the consignee was held as garnishee of the libelant, and paid the amount due for freight.

1. The fact is undisputed that the cargo was not discharged until September 171 h, and therefore was not placed upon the dock, and in condition for inspection and delivery, until two days after the libel was filed. In the absence of express provision otherwise in the contract of affreightment, it is the well-settled general rule that the cargo of a vessel must be unladen, and placed subject to inspection by the consignee, and in complete readiness for a delivery, before the shipowner becomes entitled to his freight, unless delivery is prevented by the act or fault of the shipper or consignee. Brittan v. Barnaby, 21 How. 527; The Eddy, 5 Wall. 481; 1,265 Vitrified Pipes, 14 Blatchf. 274, Fed. Cas. No. 10,536; 175 Tons Coal, 9 Ben. 400, Fed. Cas. No. 10,522; The Mary Riley v. 3,000 Railroad Ties, 38 Fed. 254; 3 Kent, Comm. 219; 1 Pars. Shipp. & Adm. § 5, c. 7; Macl. Shipp. (3d Ed.) 467. The vessel owner may retain his possession of the cargo until the entire freight is paid or adjusted, bat cannot claim a partial payment or ratable freight “except in special cases; and those cases are exceptions to the general mile, and called for by the principles of equity.” 3 Kent, Comm. 219. The consignee is entitled to delivery of the entire cargo as called for by the bill of lading, and to that end may inspect the whole before he is required to accept or pay the freight. Subject to that inspection, the vessel owner retains his possession and lien, when he so elects, either upon the dock or in the hold. Evidence appears in this record which seems designed to show a custom at the port of Chicago, or between these parties, for the advance of a portion of the freight: before a delivery; but it is not in any view sufficiently definite to disturb the general rule, and is immaterial in this case for the reason that the only demand made by the libelant was for the freight money as a whole. The general rule is therefore applicable, and a right of action for the freight had not matured when the libel was filed, unless it can be held that; the conduct of the consignee prevented or waived a delivery. The admission by its president that he “would not have paid freight to Clark after receiving telephone not to pay,” even if the cargo had been unloaded, taken in connection with the terms of refusal to pay, indicates that complete delivery would not have procured payment, and that there was not entire absence of ground for protection of the lien; but, there being no showing of tender of delivery as a condition precedent to the payment of the freight, we are inclined to assume, for the purposes of this opinion, that the terms in which the consignee placed his refusal should not be so construed as to dispense, at least, with an unmistakable offer by the vessel owner of inspection and delivery, and that the libel was brought prematurely. But that fact would not prevent or affect the jurisdiction of the district court, which was established over the res by the prior service and seizure. The lien of the libelant remained unaffected, and with it his right to hold the cargo until his freight was paid, or until a final adjudication of the admiralty court' upon the merits. The possession which he held of right to secure that lien had been surrendered only to that court for the purpose of having the lien enforced; and the custody of the cargo was constructively in the court until the lien was satisfied. The fact that the respondent, as claimant, had been permitted, in accordance with the practice in admiralty, to give bond and take possession of the cargo, made no change in this status; the bond stands as a representative of the cargo, and the res is regarded as continued in the custody of the court. U. S. v. Ames, 99 U. S. 35; Henry, Adm. Jur. & Prac. § 123; The Fidelity, 16 Blatchf. 569, Fed. Cas. No. 4,758; The Orpheus, 3 Ware, 143, Fed. Cas. No. 8,330.

2. With reference to the attachment proceedings in the circuit court for Cook county, which appear only as set up in the answer and supplemental answers of the claimant, it is clearly shown that they were both commenced, and the claimant, as consignee, was served with the garnishee summons therein, on September 16, 1892. This was before there, was an indebtedness of the consignee for the freight, and was open to the objection that it was premature equally with the libel. But it whs indisputably after the service of the monition out of the district court upon the libel, and the subject-matter, then being within the jurisdiction of the admiralty court, was beyond the reach of the process or jurisdiction of the other court. The rule is firmly established, in respect to different co-ordinate courts having the same subject-matter before them, that the court which first obtains possession of the res or of the controversy by priority in the service of its process acquires exclusive jurisdiction for all the purposes of a complete adjudication; and, where the right of a party to prosecute his suit in the United States court has attached, “that right cannot be arrested or taken away by any proceeding in another court.” Wallace v. McConnell, 13 Pet. 136; Covell v. Heyman, 111 U. S. 176, 4 Sup. Ct. 355; Heidritter v. Oilcloth Co., 112 U. S. 294, 5 Sup. Ct. 135; Sharon v. Terry, 36 Fed. 337. In Covell v. Heyman the doctrine is expressed which must govern here:

“The forbearance which courts of co-ordinate jurisdiction, administered under a single system, exercise towards each other, whereby conflicts are avoided, by avoiding interference with the process of each other, is a principle of comity, with perhaps no higher sanction than the utility which comes from concord; but between state.courts and those of the United States it is something more. It is' a principle of right and of law, and therefore of necessity. It leaves nothing to discretion or mere convenience. These courts do not belong to: the same system, so far as their jurisdiction is concurrent; and, although they coexist in the same space, they are independent, and have no common superior. They exercise jurisdiction, it is true, within the same territory, hut not in the same plane; and, when one takes into its jurisdiction a specific thing, that res is as much withdrawn from the judicial power of tile other as if it had been carried physically into a different territorial sovereignty. To attempt to seize it by a foreign process is futile and void. The regulation of process, and the decision of questions relating to it, are part of the jurisdiction of the court from which it issues.”

This doctrine is reciprocal, making priority of service or possession the test. It is essential to prevent collisions in jurisdiction which would seriously embarrass the administration of justice, and has fortunately obtained recognition by the courts, state as well as national. Under it the subsequent attachment proceedings in the state court, so far as concerned this libel in the district court, were “vain, nugatory, and void.” Heidritter v. Oilcloth Co., supra. They constituted no defense, and the exceptions to the answer of the respondent in that regard were well taken, and should have been sustained. Wallace v. McConnell, 13 Pet. 136.

The foregoing propositions are not seriously contested in the argument upon either side in this appeal. The respondent invokes, in support of the decree, strict application of the letter of the law as contained in the first proposition, — that the premature filing of the libel justified its dismissal, — and, conceding that equitable rules must govern for such disposition, claims that all equity is with the respondent by reason of its alleged inforced payment of the amount of freight under the attachment proceedings, which are then entitled to equitable consideration, “as accomplished facts,” without regard to their legal effect. The appellant rests his argument for reversal upon the second proposition,— that the district court obtained and must uphold its exclusive jurisdiction. A question of practice is involved which is of general interest, and has an importance beyond the amount here in controversy. It is well settled that courts of admiralty “proceed upon equitable principles and according to the rules of natural justice” (Ben. Adin. §§ 329, 358); that the utmost liberality will be exercised in the interest of justice to save a libel from dismissal by disregarding technicalities which would operate for its defeat according to the practice at common law (The Adeline, 9 Oranch, 244). Referring to the liberality indulged in the former, as distinguished from the rigid rules which prevail in the law courts, it is remarked by Mr. Justice Story, in the opinion in The Adeline: “Ro proceedings can be more unlike than those in the courts of common law and in the admiralty.” In the case at bar, as we have before observed, the libelant was entitled to the lien for the freight, and was in rightful possession of the cargo for its security when he filed his libel to enforce his lien; but his action was deemed premature because he had not then made a complete delivery or tender of the cargo to the consignee. Thereupon his libel was dismissed by the district court, with costs, and in effect the cargo was left out of the hands of the libelant; and transferred to the possession of the consignee by force of the bond which had been given to take the place of the res. Although' that court had established complete jurisdiction over the res, had entertained his libel for the enforcement of the lien up to that time, and had taken the cargo in charge to that end, the libelant was peremptorily sent out of court, deprived of his cargo, and without any measure provided by the court for protecting his indisputable lien and right of possession. Is this course in accord with the equitable rules which govern a court of admiralty? Even at law, where the plaintiff in replevin fails for want of a demand of the goods, in a case in which a demand is a condition precedent to a right of action, the approved course is an imposition of costs bnly; and the goods, having come to the custody oi the court through the replevin process, will not then be sent by its action into the hands of a defendant urging that technical defense alone, in the face of a showing that the right of possession is in the plaintiff, except for the failure to make demand, but will be retained for final disposition. Wells, Repl. § 372. Surely, it is incumbent on an admiralty court to have at least equal regard for its suitors. Applying the principles of equity to the admiralty practice, where a maritime lien exists, the fact that the indebtedness has not matured is not ground for dismissal of a libel brought to enforce the lien. Objection that it was premature will be met by a provision of costs or other terms to protect the adverse party from harm, but the libel will be retained to save the libelant from a dismissal which would defeat all remedy. This is the rule pronounced in the early case of The Salem’s Cargo, 1 Spr. 389, Fed. Cas. No. 12,248, where the libel was prematurely filed for freight; and in the recent case of The Pioneer, 53 Fed. 279, Judge Green retained a libel which was filed more than two months before maturity of a right of action, and states as the rule which governs:

“The premature filing of a libel, if the right to libel accrues afterwards, and before the determination of the issue, affects the question of costs only. It is not necessary, nor is it the practice in admiralty, to dismiss such libel if, when the matter is presented to the court for final determination, it appears 'that the right to libel exists.”

When this libel was dismissed, the freight was unquestionably due, and by the dismissal the libelant was deprived of his possessory rights in the cargo, and of all remedy in the district court. The decree is a final disposition of the controversy, and it can only be upheld by a record showing just cause for the summary dismissal. In an appeal in admiralty from the district court, this court is not reviewing “a question of discretion, but is hearing an appeal which is a new trial,” and must deal with the questions involved “as though they were original questions.” Towboat Co. v. Pettie, 1 U. S. App. 57, 1 C. C. A. 314, 49 Fed. 464; The Philadelphian, 9 C. C. A. 54, 60 Fed. 423; The Beeche Dene, 5 C. C. A. 208, 55 Fed. 526; The Portland and The State of California, 7 U. S. App. 20, 1 C. C. A. 224, 49 Fed. 172. All support for the decree rests upon a recognition of the ulterior proceedings in the state court as “accomplished facts.” There is nothing in the conduct of the libelant which should give force to those proceedings beyond their prima facie value, or should prevent him from presecuting his suit in admiralty where he has rightfully sought relief. He was an involuntary party, as defendant, in the actions in the state court, and his presence there, alleged in the answer, was proper and necessary in the principal suits, and would .constitute no waiver of rights in his libel. His appearance in the garnishment proceeding, if material, is not asserted, and there is no claim that be gave consent or countenance in any form to the alleged payment there by the respondent, as garnishee, of the amount of freight- money, or waived any objections to impounding his lien claim. He had the right to rely on an assumption that there would be no invasion of the admiralty jurisdiction of the res — which was exclusive for all the purposes of his prior libel — by'any attempted enforcement of the state court judgment, and that no payment', would be made by the garnishee, except in pursuance of a determination of the primary cause in admiralty. Under the authorities cited, the proceedings in the state court Avert; foreign to, and without effect upon, the controversy in the district court. They could not be made defensive matter in the cause, or enter into consideration to impede or interfere with a complete adjudication by the district court'. This is not. a status resting in discretion, convenience, or comity, but is one of necessity and absolute right. The court is without power to yield its jurisdiction, once firmly established, to any attempts in other coordinate courts to administer in the same matters. The question is not whether the state court had jurisdiction over the libelant, as defendant before it, to adjudge a liability to its suitors, or had jurisdiction over the garnishee. Such jurisdiction may have been complete, but it had no power to supplant or stay the prior libel in the district court, or to relieve the garnishee from liability for the freight (on its bond for possession of the cargo) in that court. The principles which govern the jurisdiction, and the limitations where jurisdiction is subordinate, are well defined by Judge Jenkins in Ahlhauser v. Butler, 50 Fed. 705. The garnishee had an absolute defense to this garnishment, aside from"the fact that there was no indebtedness for the freight for want of a delivery of the cargo, in the answer that all liability was previously impounded by the libel in rein, in a jurisdiction Avhere the garnishment could not be recognized. Drake, Attachm. (6th Ed.) § 621. The right and the duty to mala; this defense rested on the garnishee, and not on the libelant as defendant. Any peril which was involved there, either through neglect or through an overruling of the defense, was (he peril of the garnishee; and any imposition of liability there cannot be transposed to thrust it upon the libelant, and destroy his remedy in the district court. Whether that defense was presented in good faith is not for this court to inquire, but the presumption is fair, and in accord with comity, that it would have prevailed in the state court if well asserted. If the respondent paid over the amount of the freight, without complicity or indemnity, in the lace of the pending libel, and in compliance with a proceeding which must be disregarded in the admiralty court, no ground is presented for a denial of the admirdtv jurisdiction. To recognize the alleged payment as raising an equity in, favor of respondent equivalent to a satisfaction of the libel claim, and thereupon dismissing the libel, is tantamount to an acceptance off the foreign proceeding as conclusive, and a practical subordination of the jurisdiction which was primary. In this case the effect'of a dismissal does not even stop with the denial of all remedy to the libelant, but, leaving the res in the possession of the respondent through its bond, the arm of the admiralty court is made to serve in ratification and enforcement of the proceedings which were otherwise “vain, nugatory, and void.”

Upon this record we are constrained to hold (1) that the jurisdiction of the district court for enforcement of the lien for freight was not impaired by the fact that delivery had not been perfected when the libel was brought, nor was that fact ground for dismissal under the practice in admiralty; (2) that the allegation of the subsequent attachment and garnishee proceedings in the circuit court for Cook county, and the payment thereunder, should have been disregarded by the district court; (3) that no equities or grounds of estoppel are shown, running against the libelant, which should prevent his prosecution of the libel, and the alleged equities in favor of the respondent, if alone entitled to consideration, are not faultless ,or free from doubt; (4) that the libel should have been sustained. While efforts of the courts are to be commended which tend to avoid conflicts in jurisdiction and uphold comity, so far as may be with just regard to the rights of suitors, there can be no surrender of jurisdiction. In the •subject-matter of this libel there is special reason for upholding the jurisdiction, because the freight earnings of a vessel belong essentially to admiralty cognizance. Although the old maxim that “freight is the mother of wages” has been go far modified by statutes (Rev. St. § 4525), that the wages of seamen are no longer contingent upon the earnings of freight, the money which so accrues is regarded as a fund for security of the seamen, and they have a lien upon it as well as upon the vessel “which follows them into whose hands soever they may go.” 2 Pars. Shipp. & Adm. 60. This fund is deemed a part of the vessel, and applicable, to expenditures which are required for its navigation or care. There should be no encouragement ■of interference with it by jurisdictions foreign to the admiralty, and •certainly not when, the admiralty jurisdiction has obtained exclusive possession of the res. The decree of the district court is reversed, and the cause is remanded with instructions to decree in favor of the libelant for the amount due for freight, but without costs in the district court, and less the amount of costs allowed to the respondent there, and for further proceedings in conformity with this opinion; the respondent to pay the costs on appeal. So ordered.