DANIEL DALSTROM and others v. THE OUTFIT OF THE SCHOONER "E. M. DAVIDSON."

(District Court, E. D. Wisconsin. January term, 1880.)

WAGES-SALVAGE-CONFLICTING CLAIMS.-Under the circumstances of this case it was held that the wages earned by seamen after their vessel had been wrecked, but before she was finally abandoned, did not constitute antecedent wages in a sense which would postpone them to the claims of the salvors, and that the proceeds derived from the sale of the outfit of the vessel must first be applied to the payment of the demands of such seamen.

In admiralty.

The facts of this case, as shown by the pleadings, were these: On the fifteenth day of October, 1879, the schooner Davidson left Chicago on a voyage to northern ports on Lake Michigan. Libellants shipped on board as seamen. On the next day the vessel was stranded on Pilot Island Reef. On request for assistance from the master, Wolf & Davidson, of Milwaukee, dispatched the tug Leviathan, with steam-pump and other apparatus, to the relief of the vessel. Efforts were made to get the vessel off, and were continued until November 26th, but they were unsuccessful. From the time the vessel was stranded until exertions to relieve her were abandoned libellants continued on board. On the twenty-fifth day of November, the master of the tug being convinced that the vessel could not be relieved, deemed it advisable to save her outfit, consisting of boats, tackle, rigging, apparel and furniture, and ceased his efforts in behalf of the vessel. Thereupon the master and crew of the tug, with the assistance of the crew of the vessel, removed the vessel's outfit to the tug, and brought it, together with the master and crew of the vessel, to the port of Milwaukee. Libellants were then discharged, but were not paid their wages, and thereupon libelled the outfit. Decree was rendered in their favor, the outfit sold, and the proceeds were paid into the registry of the court. Thereupon the owners of the tug intervened, by petition as salvors, insisting that their claim for salvage service was privileged to that of the seamen, and asked for payment as having the prior right to the

proceeds of sale; and the question was whether, under such a state of facts, the wages of the seamen, or the claim for salvage service, was to be first paid.

Mr. Markham, for the seamen, cited Pitman v. Hooper, 3 Sumner, 50; The Massasoit, 1 Sprague, 97; The Isabella, Brown's Adm'y Rep. 96-103; The Sailor Prince, 1 Benedict, 234; The Steamboat Pilot No. 2, 1 Newberry, 215-217; Smith v. Stewart, Crabbe's Rep. 218; Lewis v. The Elizabeth & Jane, 1 Ware, 35.

Mr. Krause, for salvors, cited The Salina, 2 notes of case 18, 16 Monthly Law Reporter, 5; Reed v. Hussey, 1 Blatch. & How. 527; Collins v. Steamboat Fort Wayne, 1 Bond, 484.

DYER, J., held that the seamen were not discharged from the obligation of their contract of service by the happening of disaster to the vessel; that it was their duty, so long as their personal safety permitted, to remain by the wreck and to save. as much as possible; and that upon compliance with this obligation the fragments of the vessel constituted a fund pledged for payment of their wages; that upon abandonment by them of the wreck the contract between them and the owner of the vessel would be dissolved, and that they would then lose their privilege against the vessel and their claim for wages; that as libellants remained by the wreck and did not abandon it until the outfit was removed, their right to wages and their lien continuéd in force; that under the circumstances of the case the wages which were earned while they remained on board, and until the vessel was finally abandoned, did not constitute antecedent wages in a sense which would postpone them to the claim of the salvors; and that the proceeds of the outfit must be first applied to the payment of their demands, although it would have been otherwise had they abandoned the wreck before the salvage service was begun.

SEARCY & SCHUSTER v. McCHORD, Assignee, etc.

(District Court, D. Kentucky. March 4, 1880.)

SALE-MISTAKE-ASSIGNEE IN BANKRUPTCY.-A court of equity will set aside a sale by an assignee in bankruptcy where the purchaser has been innocently misled by the advertised notice of the sale.

In equity. Bill and cross-bill for specific performance. The bankrupt, Hardesty, was the owner of 1804 acres of land in Washington county. Under an execution issued on a replevin bond the whole tract was, prior to the commencement of bankruptcy proceedings, sold for less than two-thirds of its appraised value to a man by the name of Hardin. Before the expiration of the year which Hardesty had for redemption he became a bankrupt, and defendant, McChord, was chosen assignee. McChord thereupon advertised, by printed handbills, that on a certain day he would sell at public auction "the right of redemption of said Hardesty in 1801 acres of land, upon which said Hardesty now lives, situated in Washington county, etc. Said farm is in a high state of cultivation, and there is a good frame house and all necessary outbuildings thereon. Terms of sale: The right of redemption in the land, and the store-house, will be sold on a credit of three months, with interest from date, etc."

At the time and place mentioned in the advertisement he put the property up at public auction, and struck it off to the complainants at $1,270. Complainants thereupon gave the assignee a note for this amount, and paid to Hardin, the purchaser at the execution sale, the amount paid by him at such sale, and 10 per cent. interest, amounting to $880. At the maturity of their sale bond the assignee insisted that the complainants were bound to take the property at $1,270, subject not only to the lien of Hardin, the purchaser at the execution sale, but also to the homestead right claimed by the bankrupt and his wife, and that they had no right to have this homestead right satisfied out of the proceeds of the sale.

The prayer of the bill is either for a specific performancethat is, a conveyance from the assignee free from the homestead, in case Hardesty and wife could be induced to make a

J

quitclaim deed of their homestead right; and, if not, for a rescission of the sale, a cancellation of the complainants' note, and a subrogation to Hardin's lien for $880.

The bankrupt and his wife filed an answer claiming a homestead right in the property, and tendering a quitclaim deed to the assignee, conveying such homestead right and incohate right of dower of the wife of the bankrupt, to be delivered on payment by the purchaser of $1,000.

The assignee, McChord, filed a general demurrer to the bill, and a cross-bill, in which he alleged, in substance, the same facts averred in the original bill, and that the sale was made in accordance with the advertisement, but construed the advertisement to mean that the assignee did not sell the land free from the homestead right, and tendered a deed conveying to the complainants the right of redemption of the bankrupt in the tract of land in question, and prayed for a decree directing the complainants to pay to him the whole note, and that he be relieved from all claims of dower and homestead in the premises.

To this cross-bill complainants demur.

O. A. Wehle, for complainants.

W. O. & J. L. Dodd, for assignee.

BROWN, J. The question presented by the pleadings is whether the complainants are entitled to a decree for specific performance upon their view of the case, or whether the defendant is entitled to the purchase money agreed to be paid at the sale, regardless of the homestead right claimed by the bankrupt. It is a well settled principle of law that in judicial sales there is no warranty, and the rule caveat emptor is applied with full force. This was settled by the supreme court of the United States in the case of Monte Allegre, 9 Wheat. 616, and is the general doctrine in most, if not all, the states. Rorer on Judicial Sales, §§ 458 and 459. I see no reason why this rule does not apply to sales made by an assignee in bankruptcy. In such case the assignee making the sale is the mere agent of the court, having no power to bind any one but himself. This he may undoubtedly do in

case of fraud, or upon a conveyance with a warranty, and in such cases only. Mockbee v. Gardner, 2 Harris & Gill, 176.

I should find great difficulty in this case in holding that the assignee had bound himself personally by anything contained in this advertisement. He purports by this to sell "the right of redemption" of the bankrupt in the land in question, but he does not assume to guarantee that the property is not subject to other liens. While it may be true that, if the bankrupt himself had put forth this advertisement and sold the land, he would be estopped to set up a claim of homestead, the assignee stands in a somewhat different relation to the property. By the express provisions of the bankrupt act the homestead did not pass to the assignee, and he had no right or authority to sell it unless by the consent and joinder of the bankrupt and his wife, which was not given in this

case.

But there is another ground upon which I think the complainants are entitled to a qualified relief. The terms of the advertisement were somewhat ambiguous, and I have no doubt that they were misled into supposing that they had acquired a title to the property free and clear of all encumbrances except that of the execution. It is true, that neither the bill nor the cross-bill set forth, in terms, that there was a misunderstanding as to the conditions of the sale, but taking them together it is quite apparant that there was. In such cases a court of equity has a judicial discretion to set aside the sale. Rorer on Judicial Sales, § 421; Laight v. Pell, 1 Edwards' Ch. 577; Le Fevre v. Laraway, 22 Barb. 167; Veeder v. Fonda, 3 Paige, 94-97.

In Anderson v. Foulke, 2 Harris & Gill, 346, 357, it is said that in Maryland, as well as in England, "if there should be made to appear, either before or after the sale had been ratified, any injurious mistake, misrepresentation or fraud, the order of ratification will be rescinded, and the property again sent into the market and resold." This power has been frequently exercised in cases where the land was stated to be greater in quantity than it turned out upon actual survey; or where it was sold for a greatly inadequate price; or where