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water had poured upon the libelants' merchandise stowed near the bulkhead. The rivet was the end rivet in a series which attached a transverse “knee tie” to the bulkhead on the inside of the tank. The testimony clearly showed that abundant diligence was used in the construction of the vessel, that the defect in the rivet was a latent one which occurred at the time of the vessel's construction, which was not discovered and was not discoverable, at that time or subsequently, by the exercise of all the known and customary tests and methods of examination, which were all employed; that it was a latent and undiscovered defect in the hull of the vessel at the commencement of the voyage from Trinidad; that, consequently, the vessel was not at said time seaworthy; and that the injury occurred solely through this unseaworthiness, and not by reason of filling the tank injudiciously.
The main question in the case is whether the bills of lading expressly or clearly limited the implied and absolute warranty of seaworthiness, which is that the ship was in fact seaworthy at the commencement of the voyage, and is a warranty against latent, unknown, and not discoverable defects. The Edwin I. Morrison, 153 U. S. 199, 14 Sup. Ct. 823; The Caledonia, 157 U. S. 124, 15 Sup. Ct. 537; The Glenfruin, 10 Prob. Div. 103. The recent case of The Caledonia, supra, declared that exemptions in bills of lading which limit the extent of this implied warranty must be expressed in clear terms, or they will be construed strongly against the shipowner, and consequently held that an exemption which excluded loss or damage from defects in steam boilers and machinery did not mean defects existing at the commencement of the voyage, and therefore did not protect the owner from liability for unseaworthiness. The bills of lading in these cases exclude losses arising from latent defects in the hull, and the question is whether this language does not necessarily mean defects existing at the time of shipment, and, therefore, whether it does not clearly, and even expressly, exclude unseaworthiness arising from such defects.
The only case in which the effect of an exemption of “latent defects” is discussed is The Laertes, 12 Prob. Div. 187, but in that case the language of the bill of lading was "latent defects even existing at time of shipment,” so that the intention of the parties to limit the implied warranty was manifest.
In the cases at bar it is urged that latent defects must necessarily mean those existing at the time of shipment, and that any other construction is exceedingly strained. A defect, in order to be latent, must have been not discoverable at the time of the shipment. It could not, in its nature, have been capable of discovery then and have become capable of evading discovery subsequently. A construction which should say that latent defects meant those only which had become latent since the vessel left the wharf, and could not mean previously existing defects, savors of the distinctions of the schoolmen; and, if latent defects existing upon the voyage are exempted, those existing at the time of the shipment are included, for they are the same. We concur with the experienced district judge that the exception "limits the warranty which the law would otherwise im
ply that the ship was seaworthy at the beginning of the voyage, and exempts the ship if due diligence is exercised by the owner.”
It is insisted by the libelants that the second section of the act of Feb. 13, 1893 (27 Stat. 445), commonly known as the “Harter Act,” prohibits any clause in a bill of lading which limits the implied warranty of seaworthiness. The section is as follows:
"Sec. 2. That it shall not be lawful for any vessel transporting merchandise or property from or between ports of the United States of America and foreign ports, her owner, master, agent, or manager, to insert in any bill of lading or shipping document any covenant or agreement whereby the obligations of the owner or owners of said vessel to exercise due diligence properly equip, man, provision, and outfit said vessel, and to make said vessel seaworthy and capable of performing her intended voyage, or whereby the obligations of the master, officers, agents, or servants to carefully handle and stow her cargo and to care for and properly deliver the same, shall in any wise be lessened, weakened, or avoided.”
Waiving the question whether this section applies to a foreign contract entered into by owners who are foreigners, the section does not bear the construction placed upon it by the libelants, which is that a comma shall be inserted after the word "diligence," and that the clause respecting seaworthiness shall be read as a prohibition of any covenant or agreement whereby the obligations of the owner of said vessel to make said vessel seaworthy, etc., shall in any wise be lessened. The language of the section, as passed by the house of representatives, permits this construction, but in the senate the words “exercise due diligence” were inserted prior to the words “properly equip," and the evident intent of the section as amended, and the effect of the amendment, were to prohibit covenants whereby the obligation of the owners to exercise due diligence to properly equip, man, provision, and outfit the vessel, and to make her seaworthy, should be lessened. A like amendment was inserted in the third section, which provided that, if the owner exercised due diligence to make the vessel seaworthy, he should not be responsible for damage resulting from subsequent faults in navigation. These amendments indicate the intent which ran through the act as it left the senate, and make it plain that one design of the act as amended was to permit the owner to relieve himself from the rigidity of the warranty of seaworthiness, but not to permit him to lessen his obligation to exercise due diligence in all respects at the inception of the voyage.
The claimant endeavored to show that the cause of the injury was an error of the master in filling the tank at sea, and that, therefore, the owner was protected by the third section of the Harter act; but, as the injury did not arise from an error in the management of the vessel, an examination of this section is unnecessary.
The decrees of the district court are affirmed, with costs.
PORTER V. DAVIDSON, Sheriff.
(Circuit Court of Appeals, Fourth Circuit. May 28, 1895.)
An order made in an action of claim and delivery, under the North Carolina Code, directing certain chattels which have been taken by the marshal from the possession of a sheriff, upon a requisition to replevy them, to be returned to such sheriff, is not a final order, and is not reviewable.
In Error to the Circuit Court of the United States for the Western District of North Carolina.
This was an action of claim and delivery by Henry Kirk Porter against L. W. Davidson, sheriff of Cherokee county, N. C. The circuit court made an order directing certain replevied chattels to be returned to the defendant 62 Fed. 626. Plaintiff brings error. Affirmed.
Julius C. Martin, on brief for plaintiff in error.
R. L. Cooper and M. W. Bell appeared on record for defendant in error, but filed no brief, nor appeared to argue the case.
Before FULLER, Circuit Justice, GOFF, Circuit Judge, and SEY. MOUR, District Judge.
SEYMOUR, District Judge. The plaintiff in error, who was also plaintiff below, is mortgagee of certain chattels in the possession of George Porter & Co., mortgagor, after condition broken. The defendant, the sheriff of Cherokee county in North Carolina, had seized and held the chattels under warrants of attachment issued out of the courts of North Carolina against the mortgagors. Pending the suits in which the attachments were issued, the plaintiffs in error brought their action of claim and delivery in the circuit court of the United States for the Western district of North Carolina, and, pursuing the state practice, they executed the proper undertaking; and the marshal of the circuit court took the chattels from the possession of the sheriff, and delivered them to the plaintiff. Thereupon the defendant below moved to dismiss the summons and complaint and the action. These motions the court denied, but ordered that the chattels taken by the marshal be returned to the de fendant sheriff. Plaintiff, having duly excepted to this order, brings his writ of error to this court.
The learned judge who delivered the opinion of the circuit court assigned as the reason for his order the fact that the chattels in question had been seized by the sheriff by virtue of the process of the state court, and were therefore in the custody of that court, and not liable to be taken therefrom by process of the United States court. The order is evidently not a final decision of the cause, and is therefore not reviewable. As was stated in the opinion of the judge below:
"The proceeding of the plaintiff in this case, by which he took from the possession of the sheriff the chattels levied on, was ancillary,-not in any way affecting the merits of the original case. That can go on without conflicting with any of the cases quoted above."
EVERSON v. EQUITABLE LIFE ASSUR. CO.
(Circuit Court, W. D. Pennsylvania. March 11, 1895.) 1. EQUITY JURISDICTION-BILL FOR DISCOVERY AND ACCOUNTING.
Where a bill seeks both discovery and an accounting, the discovery must be regarded, prima facie, as incidental to the accounting, and, if there is
no right to an accounting, the bill will be held bad upon demurrer. 2. LIFE INSCRANCE-SEMI-TONTINE POLICY-BILL FOR ACCOUNTING.
The relation between the holder of a matured semi-tontine policy and the insurance company is that of debtor and creditor merely, and involves no trust relation; and a policy holder who is dissatisfied with the amount of the surplus which is apportioned to him by the company, pursuant to the terms of the policy, cannot maintain a bill for accounting and discovery when there are no sufficient allegations of fraud.
This was a bill by T. Bissell Everson against the Equitable Life Assurance Company praying a discovery and accounting in respect to the amount due him under a matured semi-tontine life insurance policy. Defendant demurred to the bill.
Watson & McCleave, for complainant.
BUFFINGTON. District Judge. On August 12, 1884, the respondent, the Equitable Life Assurance Company, a corporation created by the state of New York, issued a life insurance policy to the - complainant, T. Bissell Everson, then and now a citizen and resident of Pennsylvania, for $10,000. Certain provisions were made part of said policy, the ones pertinent to the present question being:
“First. That this policy is issued under the semi-tontine plan, the particulars of which are as follows: Second. That the tontine dividend period for this policy shall be completed on the 28th day of May, in the year eighteen hundred and ninety-four. Third. That no dividends shall be allowed or paid upon this policy unless the person whose life is hereby assured shall survive the completion of its tontine dividend period as aforesaid, and unless this policy shall be then in force. Fourth. That all surplus or profits derived from such policies on the semi-tontine plan as shall not be in force at the date of their completion of their respective tontine dividend periods shall be apportioned equitably among such policies as shall complete their tontine dividend period. Fifth. That upon the completion of the tontine dividend period, on May 28, 1894, provided this policy shall not have been terminated previously by lapse or death, said T. Bissell Everson shall have the option either, first, to withdraw in cash this policy's entire share of the assets; i. e., the accumulated reserve, which shall be twelve hundred and thirty-one and ten one-hundredth dollars, and, in addition thereto, the surplus apportioned by this society to this policy; secondly,” etc.
That by this contract of insurance the relation created between the parties was that of debtor and creditor is firmly established by numerous authorities. Uhlman v. Insurance Co., 109 N. Y. 421, 17 N. E. 363; Hunton v. Assurance Co., 45 Fed. 661; People v. Security Life Ins. & Annuity Co., 78 X. Y. 114; Bewley v. Society, 61 How. Prac. 344; Bogardus v. Insurance Co., 101 N. Y. 328, 4 N. E. 522; Taylor v. Insurance Co., 9 Daly, 489. Mr. Everson paid his premiums for 10 years, amounting in all to $2,725, and then elected to avail himself of the first option, whereupon he was entitled to demand and the company became liable to pay to him “this policy's entire share of the assets; i. e. the accumulated reserve, which shall be twelve hundred and thirty-one and ten one-hundredth dollars, and, in addition thereto, the surplus apportioned by this society to this policy.” Thereupon the society apportioned to him, as the policy's share of the assets, the sum of $2,051.80, being $1,231.10, the share of the accumulated reserve as fixed by the option, and $820.70, the policy's alleged share of the surplus. This apportionment, made by the person designated by mutual agreement to make it, is presumably correct. Uhlman v. Insurance Co., 109 N. Y. 432, 17 N. E. 363. “But,” as was also said in that case, “the question is still left, has or hås it not complied with its agreement to make an equitable apportionment? And the plaintiff, and all others similarly situated, have the right, upon proper allegations of fact showing that the apportionment made by the defendant is not equitable, or has been based upon erroneous principles, to have a trial and make proof of such allegations, and, if proved, the court will declare the proper principles upon which the apportionment is to be made, so as to become an equitable apportionment." The apportionment thus made Mr. Everson declined to accept, and subsequently filed the present bill in equity, in which he prayed for an accounting and discovery. To this bill the respondent has demurred-First, because the bill discloses no cause of action; secondly, because the complainant has an adequate remedy at law; thirdly, because the bill does not disclose sufficient facts to entitle him to the remedies prayed for; fourthly, because the court has not jurisdiction of the subjectmatter; fifthly, because the court is without jurisdiction to enforce its decree against the respondent; sixthly, because the bill does not set forth in full the contract; and, lastly, because the other policy holders have not been made parties.
Assuming, for present purposes, that the bill as a whole shows the matter in dispute exceeds the sum of $2,000, does it disclose any cause of action ? Two such grounds are alleged, viz. discovery and accounting. In passing on the question here raised, it is to be observed that in the federal courts the line between law and equity, and consequently between legal and equitable rights, has been strictly observed,-a principle so firmly established as to call for no citation of authority in its support. In Hare on Discovery (sections 6–8), it is in substance said that the prayer for an account renders a bill one for relief, and, where a bill prays for relief, the discovery, if material to the relief, is incident to it, and that, prima facie, it must be so intended. It would appear, therefore, that, upon demurrer to a bill seeking both discovery and relief, it is sufficient to show that the complainant is not entitled to the relief which he prays, and that the addition of a prayer for relief to a bill seeking discovery will render such discovery dependent upon the title to relief. “The bill” (discovery) “is commonly used," says Story's Equity Pleadings (section 331), "in aid of the jurisdic