(Di8ftrict Oourt, E. D. Missouri, E. D. February 19,1889.)
MABITIME LIENS-DISTRIBUTION all' SURPLus-NON-LIEN CLAIMANTS.
The surplus after payment of maritime lien claims cannot be awarded as against mortgagees to a general creditor, who has no lien recognizable in any court.
SAME-PABTNERSHIP-FIRM CREDITORS-DISSOLUTION BEFORE SEIZURE.
Neither are such creditors entitled to the surplus because the mortgagees were members of the firm which owned the vessel when the debts were contracted, and the other member insisted on payment out of the proceeds, where the latter became sole owner, and the firm was dissolved before seizure.
In Admiralty. Petitions by John Jackson and T. T. Lewis against the surplus and remnants. For former opinions, see 35 Fed. Rep. 548, 86 Fed. Rep. 493. Campbell Ryan, for petitioners. a. G. B. Drummond and James P. Dawson, for mortgagees.
THAYER, J. The intervening libels filed by the petitioners against the steam-boats Dacotah and Wyoming, were dismissed for reasons heretofore stated. 36 Fed. Rep. 494. A surplUS remains in the registry after the payment of all admiralty liens. Petitioners have filed claims for the surplus, and it becomes necessary to determine the question that was left undecided on the former hearing, whether they are entitled to the surphls in preference to the mortgagees. The facts are that petitioners lldvanced money to "Hunter Ben Jenkins, Manager of the Steamers Dacotah and Wyoming." The steamers belonged at the time to Jenkins, and to the mortgagees Sallie B. and Sandford B. Coulson. Jenkins had control of them for the benefit of himself and his co-owners, and borrowed and used the money in question for his own and their benefit. Subsequently Jenkins purchased the interest of the Coulsons in the steamers, and to secure the purchase money agreed to be paid therefor executed the mortgages under which the Coulsons, as mortgagees, now claim the surplus in the registry. It must be confessed that the facts developed predispose the court to award the money to the petitioners, if such a decree can be justified on legal grounds. When a Burplus remains in the registry after all maritime lien claims are discharged, no disposition can be made of it without determining who is entitled to it. In determining that question, courts of admiralty (as is often said) act on equitable principles. By that expression no more is meant than that they will recognize the rights of those who had at the time of .the seizure a vested interest in the res, such as a legal or equitable lien other than of a maritime nature, and that they will determine as between such lien claimants, and as between them and the owner, who has the superior right to the surplus, and in what order it ought to be distributed. The Lottawanna, 21 Wall. 582, 20 Wall. 223; The Edith, .94 U. S. 523. A mere general creditor of the owner has no lien, legal
J'EDERAL REPORTER, vol. 37.
or equitable, on his debtor's property, and has not therefore such a vested interest"in the res as an admiralty court can recognize. "They are not courts of bankruptcy or of insolvency, nor are they invested with any jurisdiction to distribute the owner's property among his creditors, as was said in The Lottawanna Case, 20 Wall. 221. The cases cited for petitioners establish no other doctrine than that above stated, that admiralty courts, after admiralty liens are paid, will entertain a against remnants and surplus, when the petitioner shows that he has a lien on the res, acquired by contract with the owner, or under a local statute; and that in such cases questions of priority, as between such lien claimants, will be adjudicated, if necessary, the liens are not maritime. The Guiding Star, 18 Fed. Rep. 263; The E. V. Mundy,.22 Fed. Rep. 173, 174; The Wexford, 7 Fed. Rep. 671; The O. A. Carrigan, Id. 507. I am informed that my predecessor, Judge TREAT, has on several occasions, when an admiralty claim was adjudged stale, nevertheless allowed the same against remnants and surplus. Such action, in effect, amounted to no more than giving other admiralty claims that were considered more meritorious, a preference over the stale demand. Neither the practice last referred to, nor the case cited for petitioners, establishes a rule that will warrant the court in awarding the fund in controversy to petitioners, rather than to the mortgagees. The former, as has been heretofore held, had no maritime lien on the steamers Dacotah and Wyoming at the time of the seizure. Neither did they have a lien which a court of law or equity would recognize or enforce as against the res. They were merely general creditors of the owners of the steam-boats for money loaned. The fact that the mortgagees, under the testitno'w. are clearly liable to the petitioners at law' for the money so loaned, g:. the court no to appropriate the fund now in the registry to the payment of such debt, in opposition to the wishes of the mortgagees. I was at first somewhat inclined to the view that petitioners' claims might be allowed on the ground that the mortgagees were members of the firm to which the money was loaned, and that petitioners had an equitable right to have the debt paid out of the proceeds of the steam-boats, be"cause they were firm property, and because Jenkins, who was one of the firm, insisted on such payment. The objection to that view is that the steam-boats ceased to be firm property when the mortgagees sold their interest to Jenkins, and such sale took place some time prior to the seizure. After such sale they were the sole property of Jenkins, and no longer firm assets. Dimon v. Hazard, 32 N. Y. 65; Howe v. Lawrence, 9 Cush. 555; Kelly v. Scott,49 N. Y. 598. Petitioners' claims derive no 'support, therefore, from the law applicable to the administration of partnership estates, as thafund in court is not partnership assets. The petitions must accordingly be dismissed, and the fund awarded to the mortgagees.
TENNESSEE COAL, LUMBER &: TAN-BARK: CO. t1. WALLER.
TENNESSEE COAL, LUMBER
(Circuit Cou.rt, E. D. Tenne8see. February 4, 1889.)
1. REMOVAL OF CAUSES-AppLICATION-TIME OF MAKING. Under the act of March 3, 1887, § 3, requiring the application for removal to be made at the time, or at any time before, the defendant is required to answer or plead, it is not too late to make the application after a motion to take the bill from the files and a demurrer to the hill have been disposed of.! 2. SAME. By the rules of the state court judgment pro confesso might be entereq if defendant did not plead, answer, or demur by the June rules. Prior thereto, defendant's counsel filed a motion to take the bill from the files, and at the next term, in September, filed a demurrer. Held, that an application, filed after the motion had been disallowed and the demurrer overruled, was filed after the time in which the defendant was required to plead or answer, and was too late.!
Motion to ltemand. Action by the Tennessee Coal, Lumber & Tan-Bark Company et al. against George B. Waller. Washburn &: Templeton, for complainants. Andrew8 &: T1uyrnburgh -and W. L. Welcker, for respondent.
KEY, J. Defendant's counsel argue, and refer to many authorities to show, that the bill in this case is an original. bill, and not merely incidental or supplementary to the cause it seeks to review. Complainants' solicitors make no point against removal on this ground, and it will therefore not be considered. The reason urged for remanding this cause is that the application for removal came too late. The matter is by no means free from difficulty. The bill was filed March 15, 1888. The defendant therein is a nonresident, and there was no service of process upon him. Under the laws of the state, publication was made requiring the appearance of the defendant.. By the same authority the first Monday of each month is made a rule-day, and it is stated that a rule of the court in which the bill was filed provides that defendants shall appear at the next rule-day after llervice of process, and plead, demur, or answer, or judgment pro confesso may be taken. The first rule-day after the bill was filed, and to which it was returnable, was the first Monday in May, 1888. The next term of the court after the bill was filed met second Monday in September, 1888. The rule of chancery court as to non-resident defundants requires them to appear at a rule-day, and the defendant shall plead, answer, or demur before the first rule-day after the one named for his appearance. The publication herein required Waller to appear on the first Monday in May; and, by the rule mentioned, should he not appear then or before the following rule-day,-first Monday in June, 1888,-and plead, demur, or
lAs to what is the proper time for filing an application for removal of cause from a state to a federal court, see Whelan v. Railroad Co., 35 Fed. Rep. 849; Huskins v. Railway Co., 87 Fed. Rep. 504, and cases cited.