94 F. 686 -

94 ·1l'EDERAL

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FAIRGlUEVEef al v. MARINE' [NS. 00. OF LONDON; d(91rCUit COQrt of
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1899.)

No. 1;144.;

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Theadm!ralty courts Uf 1!he United States have<jurisdiction over suits between, foreigners, if the 'subject,mattro'; of the controversy is of a mari. tiwe nature" MId the Ship tor ;party, tll pe charged)s ",ithin the jurisdiction of' the c<iurt., It Is a tbe court, mas' dec1ine to exercise' if for some spe'c!aI reason It appears to be Inexpedient toexetcise it, but a suit by a;foreignn1arinelnslirance compan;v1 against a vessel within the juristl!c,tloiIrQlbtbe:court, based on a right claimed under a policy. of insurance issued In the United States, is one of which the court is not justified In declinllwjurlsdiction. 2. PARTli'ir TO Sun FORObLb'SION-SUIT BY bilDERWRITERS. W,beiie a marine insurll:nce company' has paid the full value of an injury to a vessel by collision caused by the fault of another vessel, so that there RI'e no .other. .cIn.lmants ,eptitled to sue fOil the tort, it is subrogated to the right of .action of the insured, and may Jj1aintaln a suit against the offending "essei in its own mime; but;' when the value of the p'roperty destroyed exceeds' We insiIranCe money paid; the suit' must be brought in the name of the Insured, ,who may recover for theenttre loss, as trustee for the InsuranceCOmP!\1l;y as to has, paid, and i:q lj.is own right as to
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Appeal from the District Court of the United States forthe District of"MiI1I1esoia, ',: .
.IThe 'Marine' IrUlnTlince Limited,' &'London, thi:! appellee, libeled' the Canadian steamer Arabian, 'in''the! Fifth division of the United States for: district-of MinneilOM.. .'l'helibel alleged, In SUbstance,' that tJ;1e Issued a on the Cll-uadian schooner barge )finnedosa; tlj.at, as the Minrwp.osawas.going dO,wn tlle Welland Canal, the Arabian was g\>lng upthe canal,lind WRSI'J,O negligently managed that she inflicted on: the 'M1nnedosa' damages ito the extent of $15,000 and more; that the poliet contaiD;eda clause by .the' terms, of "'hwh, in the event of loss or dampaid by,the :immrn.n<:e totlj.e 'owpers, the cln.im of the insured agamst any third party liable for the assigned, to the extent of the amount pfl:id. to the Insurance company; and that, of the $15,000 alld upwards ofda'iJil(tge; 'the' libelant had paid to the owners $8,051.20, and so by the terms of tbe :policy, and ,because ,of such payment, became subrogated and entLtlE:d to SUfi !rqtsowD name for that part of the damages which libelant had Pllid. Befllre answering the Iipel, the claimap,ts, J. B. and Hugh Fairgrieve, the appellants, of the'dominion of made protest and application to the district court to decline to entertainjtirisdictioD, because all the parties were British subjects; thesllbject-matter; the locality of the tort, and the parties being foreign· to this and all ;citizens of the same foreign jurisdiction in which the tort occurred and the property belonged. The Arabian being within the jurisdiction of the court, this application was denied, and thereupon the appellants filed their claim and answer. Article 10 of the libel reads: "Tenth. That, under the terms of said policy of insurance, and because of the payment of said sum of $8,051.20 to the said Montreal Transportation Company on account of said loss, the libelant became subrogated to the rights and claim of said Montreal Transportation Company against said steamer Arabian, and became thereby authorized and empowered to file this libel against the said steamer." The answer to this article of the libel is as follows: "(9) Your respondents deny the allegations of article tenth of the libel, and expressly deny the right, either by the terms of the contract or otherwise, of the libelant to file said libel In its own name against the said steamer Arabian. (10) Your respondents deny that by reason of the premises, by reason of the allegations in the libel, or for any reason, the libelant is entitled to recover and

FAIRGRIEVE V. MARINE INS. CO.

687

,ecelve· of the said steamer Arabian the sum of eight thousand fifty-one and 20/ 100 dollars, with. interest, or any sum whatever, or to prosecute this action therefor in the manner and form as it attempts to do, and admits that the respondents have refused, and do refuse, to pay that sum or any part thereof."

Harvey D. Goulder (Searle & Spencer, on the brief), for appellants. C. E. Kremer, for appellee. Before CALDWELL, SANBORN, and THAYER, Circuit Judges. CALDWELL, Circuit Judge (after stating the facts as ab()ve). The objection to the jurisdiction of the district c()urt is not tenable. Though the appellee is a foreign insurance company, its policy was issued at Chicago, in the state of Illinoi8, and no law of comity is violated by litigating any rights claimed under or growing out of the policy in the C()urts of the country where it was issued and by whose laws its validity must be determined. It is the settled law of this country that our admiralty courts have jurisdiction over suits between foreigneI'l'!, if the subject-matter of the controversy is of a maritime nature, and the ship or party to be charged is within the jurisdiction of the court. It is a jurisdiction the court may decline to exercise where, for some special reason, it appears to be inexpedient to exercise it, but there is no fact disclosed by this record that would justify the district court in declining to take jurisdiction of this clUie. 2 Pars. Mar. Law, 543; Taylor v. Carryl, 20 How. 611; The Belgelliand, 114 U. So 355, 5 Sup. Ct. 860; Enos v. Sowle, 2 Hawaii,332; Warren v. l'he Benjamin rd. 478. It will be observed that the libelant avers that the damage to the Minnedosawas $15,000 and more, of which the libelant has paid $8,051.20 only. The remaining damage is due to the assured or other insurers, and there is no averment in the libel that it has been paid or discharged, or is no longer a subject of contenti()n between the insurers· and the assured, or those who may be subrogated to the rights of- the assured. Upon this state of facts, can the insurance company maintain this action in its own name? Thec()ntention that this objection was not raised in the claim and ansWer is not sllpported by the record, as plainly appears from portions of. the :libel: and the answer quoted in the statement. Neither the common lllW'I).or code prMtice and pleadings obtain in admiralty. Under the practice in adniiralty, the! right Qf the "libelant to sue could not be raised by demurrer or plea in abatement, but could be iraisedonly ·by·the answer, as was done. Rule 27 of the rules of practice in admiralty prescribed by the supreme court of the United States requires that "the answer shall be full, explicit, and distinct to each separate article and separate allegation in the libel, in the same order as numbered in the libel." The answer in this case conforms to this rule, and took issue with the averment in the libel that the libelant was "authorized and empowered to file this libel against the said steamer," and expressly denied the right "of the libelant to file said libel in its own name." If the libelant can maintain this action in its own name, then a claim arising out of a single tort may be split, and give rise to as many different actions as there may be subrogated underwriters,

688

) 94FEDERALo

and one additional action'to the owner for his damages; and 'fue«e actions may bepr6secnted in difff:rentjurisdictions, and tht' tort ,called upon t<;) flny that he may ,see fit to present in as many different suits in different jurisdictions as there are parties This question was before this Court in the clise of Norwich Union Fire Ins. Soc. of Norwich v. Standard Oil Co., 19 460, 8 C. C. A. 433, 59 Fed. :984, and we there held that, when an insurance company pays to the insured the amount of a loss on the property insured, it is subrogated in a corresponding amount' to the' right of action to the insured against any other person responsible forihe loss. This right of the insurance company against such other person is derived from !be. insured alone, and can be At common law, it must be asserted in the enforced in his right name of the insured; in a court of, equity, or of admiralty, or under the modern codes of practice, it may be asserted by the insurance company in its own name, when it has paid the: insured the full value of the property destroyed; but, when the value of the property destroyed exceeds the insurance money paid, the suit must be brought in the of the insured. In suchan action the insured may recover the full value of the pro'perty destroyed from the wrongdoer, but as to the amount paid him by the insurance company he becomes a truStee, and the wrongdoer will not be permitted to plead a release of the cause of action from the insured, or to set. up as a defense the insurance company's payment of its part of the loss. That case was exhaustively argued for the insurance company by able ,counsel, and received the careful consideration of, the court. ToJhe authorities then cited in support of i the ruling of the court may he added the case of Continental Ins. Co. v. H. M. Loud & Sons Lumber Co., 93 Mich. 139,53 N. W. 394. We see no reason to depart from the conolusioll then reached. It will·lie open to the libel:;w.t, when the record is returned to tbe district C"')1ll.'t, to .amend its libel, and show, if it can,.that the:excess of damages over the sum for which it sues has been paid} released, or otherwise extinguished, so that the claimants are nO' longer li.a:bletoan action therefor at the suit of anyone. In the absence of some such showing, the libel will have to be dismissed. Upon this record our judgment in NorWich Union Fire Ins. Soc. of Norwich v.. Standard Oil 00., supra, iijqecisjve, and the decree of the district eou.rt ,must be reversed .and I remanded. for further proceedings jn accordance with tbis opinion. It is so

GEORGE V. RIDDLE.

689

GEORGE et al. v. RIDDLE et at (Circuit Court, D. Washington, S. D. ;\fay 22, 1899.)

PUET,IO LANDS-NoRTHERN PACIFIC RAfLIWAD GRANT-RIGHTS ACQUIRED BY PRIVATE ENTRY-COMPELLING CONVEYANCE BY PATENTEE.

The provision of section 6' of the l!-ct of July 2, 1864 (13 Stat. 365), making a grant of lands to the Northern Pacific Railroad Company, that "the odd sectionsof,land hereby granted shall not be liable to sale or entry or pre-emption before or after they are surveyed by. company as provided by this act." affected only lands wlthl11 lImIts of the grant as fixed by the definite location of the road; and the fact that land at the time of its cash entry by an individual was within 40 miles of the line of road as shown bY the map of general route theretofore filed, the lands not having been withdrawn from private entrv, did not affect the validity of such entry, where the land was outside the limits of the grant as subsequently fixed by the map of definite location, and was never elaimed under the grant by the railroad company. Nor could the purchaser be deprived of the equitable title to such land by the arbitrary action of the land department. taken after the definite location of the railroad, and after his grantees had entered into possession and made improvements, in eanceling his entry without notice to such grantees or the return of the purchase money, and in patenting the land to on a subsequent entry; and where such entry was made with knowledge of the facts, and of the possession and claims of the grantees of the former purchaser, a court of equity will compel a conveyance from the patentee to the equitable owners.

Suit in equity against the holder of a United States patent for land, of which the plaintiffs claim to be the equitable owners, Jor a decree directing a conveyance of the legal title, and to cancel a mortgage given by the patentee. Richard H. Ormsbee, Melvin M. Godman, Thomas H. Brents, and Wellington M. Clark, for complainants. B. L. & J. L. Sharpstein, for defendants. HANFORD, District Judge. The undisputed facts in this case, briefly stated, are as follows: On November 8, 1870, the land in controversy appeared upon the plats in the land office for the district in which the same are situated to be vacant, unappropriated public land, offered for sale under the then existing land laws of the United States at private cash entry; and on said date James K. Kennedy made application to purchase the same, and paid the price therefor to the receiver. The officers accepted the application and money, and issued to said purchaser a patent certificate, stating that he had purchased and paid for the land according to law, and was entitled to receive, a patent therefor; but no patent has ever been issued to him or to his vendees. Nearly two years after the entry, and before any proceedings to cancel the same had been commenced, said purchaser sold part of the land to one George, and the remaining part to one Bruce; and immediately thereafter these vendees caused their deeds to be properly recorded in the public records of 'Valla Walla county, in which the land is situated, and inclosed the same by substantial fences, and commenceJ cultivation thereof, and have made valuable improvements thereon; and they and their successors in interest have, ever
94 F.-44