Court Opinion

ID: 8830425
Source: CourtListenerOpinion
Date Created: 2022-11-26 16:01:45.819606+00
Date Added: 2024-06-11T17:04:54.706489
License: Public Domain

NETERER, District Judge
(after stating the facts as above).  The agreement, Exhibit B, in the cross-libel, is not an assignment of freight money to the creditors, and does not operate as a waiver of lien. The Chas. A. Day (D. C.) 265 Fed. 422; The Hattie Thomas (C. C. A.) 262 Fed. 943. The Steele Steamship Company, Limited, is authorized by Cottle to act as agent for the steamship Owego, it having expended funds and anticipated further expenditures, and Cottle, not being able to pay and being desirous of protecting the Steele Steamship Company, did assign to such company the “freight money,” etc., and when such company was reimbursed the “balance of such freight moneys are to be thereafter released.” Nor does permitting the ship to leave the port of New Orleans waive claims for lien. The John G. Stevens, 170 U. S. 113, 18 Sup. Ct. 544, 42 L. Ed. 969; The Mee Too (D. C.) 280 Fed. 407; Piedmont & George’s Creek Coal Co. v. Seaboard Fisheries Co., 254 U. S. 1, 41 Sup. Ct. 1, 65 L. Ed. 97.
The issue, however, is not before the court upon the merits of the claim, but upon the power of a court of admiralty to appoint a receiver on motion of the master or creditor other than mortgagee. A court of admiralty has not the characteristic power of a court of equity. The Eclipse, 135 U. S. 599, 10 Sup. Ct. 873, 34 L. Ed. 269. It cannot determine issues between parties as a court of conscience, and correct errors, declare or enforce trusts, or adjudicate matters of account, reform instruments, or issue injunctions (Paterson v. Dakin [D. C.] 31 Fed. 682), or take cognizance of mutual mistakes (Meyer v. Pac. Mail S. S. Co. [D. C.] 59 Fed. 923), unless brought before it as subsidiary to matters of which it has undoubted jurisdiction (U. S. v. Cornell Steamb. Co., 202 U. S. 184, 26 Sup. Ct. 648, 50 L. Ed. 987; Watts v. Camors, 115 U. S. 353, 6 Sup. Ct. 91, 29 L. Ed. 406; The Niki, 1 Amer. Marine Cas. 409). A court of admiralty, in its decisions upon the ultimate rights of parties, may be moved from consideration of conscience, justice, and humanity, sometimes, to mitigate against the severity of contracts and moderate exorbitant demands (Ben. Admr. § 261), but it is not a court of chancery and has not chancery jurisdiction. (Hughes, Admr. [2d Ed.] 399, 400).
The appointment of a receiver is not a right, nor a step in the determination of a right; it is merely an ancillary and incidental remedy; it is a means of preserving property for the satisfaction of substantive rights. Rights result only from the acts of the parties or by reason or operation of law. No doubt parties might agree in a maritime contract for the appointment of a receiver upon a given contingency, no other right intervening, or the Congress may provide, as it has in Mortgage Act June 5, 1920, 41 Stat. 1004, subd. L., for the appointment of a réceiver. This act provides that:
“In any suit in rem in admiralty for the enforcement of the preferred mortgage lien, the court may appoint a receiver * * ■ * to operate the-mortgaged vessel.”
*266This provision, however, has no relation to this action. This action is not an action to enforce the preferred mortgage lien. The mortgagee has not appeared—is not before the court. This is a proceeding in rem barren of a created right by contract or statute for the appointment of a receiver. The ship is the res in the possession of the marshal. An anomalous situation would arise if this vessel should be delivered over libelant’s objection to a receiver to send it to a foreign jurisdiction and expose it to maritime liens to be enforced in another court, and this court would be left with a proceeding in rem without a res, and lien claimants in this jurisdiction without security, and be compelled to intervene in a foreign jurisdiction to preserve their rights. It cannot be asserted that a receivership would exempt the vessel from maritime liens. The Willamette Valley, 66 Fed. 565, 13 C. C. A. 635.
The movant on his motion for security calls the court’s attention to Admiralty Rules 8, 44, and 50 (267 Fed. ix, xvii, xix). These rules have no application. When cross-libel is filed (rule 50), and the claimant has given security to respond in damages, the respondent in the cross-libel shall give security in the usual amount and form to respond in damages to the claims set forth in the cross-libel, unless the court, for cause shown, shall otherwise direct. Rule 44 provides that, when no provision is made, the court may regulate the practice deemed most expedient to the due administration of justice, not inconsistent with the admiralty rules; and rule 8, that additional security may be required on motion where the bond has become insufficient. This court in The Frances R. Skinner, 248 Fed. 816, required additional bond; but it was established that the bond had become insufficient. Rule 12 (267 Fed. x), invoked by libelants, provides that, where the claimant has unreasonably neglected to make application for “due appraisement” and filing his bond or depositing in court money as the' court shall order, then the court may on the application of either party, on due cause shown, order a sale of the ship, and require the proceeds thereof to be brought into court for deposit.
Where claimant refuses to make deposit or malee stipulation for the vessel’s release, and there is general deterioration of the vessel a sale will be ordered. The Willamette Valley (D. C.) 63 Fed. 130. The seamen in this case clearly are entitled to their compensation. The controversy between the other parties can have no relation to them.
The application for appointment of a receiver must be denied, as also the motion for additional security, and the claimant is directed to show cause before this court on Monday, May 21, 1923, why the vessel should not be sold.