Article 19, § 19, of the Constitution of Louisiana (1921) reads in part: "No mortgage or privilege on immovable property, or debt for which preference may be granted by law, shall affect third persons unless recorded or registered in the parish where the property is situated, in the manner and within the time prescribed by law.

..."

In view of these statutes, such an allowance seems clearly an unauthorized invasion of the rights of the general creditors in and to the property of their debtor, in favor of another creditor who has no lawful cause of preference; that is, no privilege or mortgage, quoad such allowance.

In Mullan v. His Creditors, supra, the Louisiana Supreme Court was administering an insolvent's property in the absence of a federal statute, under a system then subsisting in the state for the liquidation of insolvent estates, which was suspended and superceded by the Federal Bankruptcy Act of 1898. That court considered, particularly, the necessity for the employment of an attorney by the mortgage creditor, and the nature of the services required of him and rendered by him in proceedings under those laws. The stipulation in the act of mortgage respecting attorneys' fees was likewise considered in view of those laws which were impliedly written into the contract. It is significant, too, that the contract was enforced strictly in accordance with its terms. It was found, to paraphrase Judge Grubb in the Gugel Case, that the occasion which called the stipulation for a 10 per cent. attorneys' fee into effect had arisen under the facts in the case, and it enforced the contract in strict accordance with its terms.

[11-13] There was no allowance of attorneys' fees upon a quantum meruit or upon equitable considerations. Since the Bankruptcy Act of 1898, which suspended the insolvency laws of the state, no such cases have been decided in the state courts. Since then the federal jurisprudence respecting insolvents has been exclusive. The federal courts are charged with the administration of the

Bankruptcy Act, designed primarily for uniformity in the liquidation of insolvent estates. There too it appears that such contracts are enforced in strict accordance with their terms. No fees are allowed except those authorized by the statute, which is likewise impliedly written into every contract. The mortgage creditor has a right to rely on his security and disregard the bankruptcy proceeding. He may abandon it and prove the whole debt as unsecured or he may be admitted only as a creditor for the balance remaining after the deduction of the value of the security. In the two last cases, of course, he must make proof of debt, but there is nothing in the law to compel him into the proceeding. Black on Bankruptcy (1st Ed.) § 566, p. 1196.

[14] The presumption is therefore that legal service on the mortgagee's behalf by an attorney at law is not necessary therein. [15] It is the duty of the referee and the trustee and the creditors in meeting to determine whether the mortgaged or otherwise incumbered property of the bankrupt is of sufficient value to satisfy the known, valid, secured claims, and provide a surplus or equity in which they may share, or whether it is without value to the estate for the benefit of the general creditors, and is therefore an onerous or burdensome asset. Equitable Loan & Security Co. v. R. L. Moss & Co., 125 F. 609 (5 C. C. A.); In re Harralson, 179 F. 490, 29 L. R. A. (N. S.) 737 (8 С. С. A.); In re Rose (D. C.) 193 F. 815. [16-18] In the first case, the trustee should proceed to liquidation by sale of the property. In the second, the referee should not permit the trustee to do so, but should order him to release and surrender possession and control, thus enabling the mortgage creditor to foreclose or otherwise proceed legally in the proper court. Where the property is retained for administration for the benefit of the general creditors, the act makes all commissions payable out of the general estate. In re Huggins (C. C. A.) 24 Am. Bankr. Rep. 715, 179 F. 490; In re Goldsmith (D. C.) 9 Am. Bankr. Rep. 419, 118 F. 763; Smith v. Township of Au Gres (C. C. A.) 17 Am. Bankr. Rep. 745, 150 F. 257; In re Anders Push Button Tel. Co. (D. C.) 136 F. 995, 13 Am. Bankr. Rep. 643; Mills, Trustee v. Virginia Carolina Lumber Co. (C. С. A.) 20 Am. Bankr. Rep. 750, 164 F. 168; Black (1st Ed.) § 320, p. 760; Collier (6th Ed.) par. 70, p. 604; C. J. vol. 7, § 228, p. 136; Dushane v. Beall, 161 U. S. 513, 16 S. Ct. 637, 40 L. Ed. 791. It is a rule in this district that, since a mortgage can only be enforced in Louisiana by judicial proceedings, if the trustee is authorized by the creditors, or by error of judgment as to value, or by the acquiescence or consent of the mortgagee, the incumbered property is sold free of liens and incumbrances for less than the mortgage debt, the mortgagee is bound to contribute to the general fund an amount sufficient to approximate what such proceedings might cost in the state courts, but these are distinguished from the costs of administration of the general estate. In re Zehner (D. C.) 193 F. 787; In re Stuart (D. C.) 193 F. 791; Gugel v. New Orleans National Bank, 239 F. 679 (5 C. C. A.), citing In re Williams (9 C. C. A.) 156 F. 934.

[19] Since the trustee administers for the benefit of secured as well as unsecured creditors, there is no necessity for the employment of an attorney by either class of creditors under the statute, except if and when the validity of a particular claim is attacked, or its rank disputed, in which case the particular creditor elects to employ an attorney and pay for his services in the usual course. In British and American Mortgage Co. v. Stuart, cited supra, at page 428, it was held specifically that such debts for attorneys' fees, incurred by a mortgage creditor after the filing of the petition, even where stipulated for, were not provable in bankruptcy under section 63a, because none postdating the petition in bankruptcy are affected by the discharge-citing Collier (8th Ed.) 312; sectiens 17-70, Bankruptcy Act, McCabe v. Patton (C. C. A.) 174 F. 217; and numerous other cases, including In re Roche, cited su

District Court, S. D. New York. May 12, 1927. 1. Collision 95(1)-Tug with tow anchored in channel in fog, and passing tug with tow, both held in fault for collision between tows (33 USCA §§ 191,409).

Tug, with scow in tow alongside, anchored in a fog, in a navigable channel, in violation of Act March 3, 1899, § 15 (33 USCA § 409 [Comp. St. § 9920]), and which failed to sound the fog signals required by Inland Rules, art. 15 (33 USCA § 191 [Comp. St. § 7888]), held in fault for collision between her tow and the tow of a

passing tug. The latter tug also held partly in fault for moving at such speed that she could not stop within the distance that the anchored vessel could be seen.

2. Collision 115-Part owner of tug and of another vessel could sue tug for injury to the other vessel in collision.

Part owner of tug and of another vessel injured in collision held entitled to maintain suit against tug for the collision.

In Admiralty. Suit for collision by Robert Rogers against the steam tug Artisan, the Cahill Towing Line, claimant, and the steam tug Helmsman, Robert Rogers, claimant. Decree for libelant against both tugs.

Park, Mattison & Lynch, of New York City (Anthony V. Lynch, Jr., of New York City, of counsel), for libelant.

Bigham, Englar & Jones, of New York City (Charles W. Hagen, of New York City, of counsel), for claimant of the Artisan.

WINSLOW, District Judge. On February 5, 1921, the scow R. R. No. 8, in tow alongside the tug Helmsman, was damaged by collision with the scow O 26, which was anchored in the Narrows alongside and made fast to the steam tug Artisan.

In the early morning of February 5, 1921, tide flood, weather foggy, the Artisan, with the scow O 26 in tow alongside, anchored the O 26 at some point in the Narrows between Ft. Hamilton and Ft. Wadsworth. The witnesses from the Artisan agreed that the place of anchorage was about one-quarter of a mile off the Brooklyn shore. An examination of the chart, checked with the testimony, would indicate that the point of anchorage was probably less than 250 feet from mid-channel. In this connection, it is significant that the steamship Algonquin passed, wherever the anchorage may have been, between the O 26 and the Brooklyn shore. The Artisan was somewhere directly in the channel, and not far from mid-channel.

[1] A few minutes before 7 a. m., the tug Helmsman, while proceeding up the Narrows with the R. R. No. 8 in tow alongside, running under a slow bell, and blowing regulation fog signals, heard a shrill whistle, which sounded like a motorboat whistle, blowing one long and two short blasts. When this whistle was heard, the Helmsman stopped her engines, again heard the shrill whistle, and almost immediately the Artisan and her scow loomed up, and the engines of the Helmsman were reversed. The R. R. No. 8, however, struck the iron plates on the stern of the an

chored O 26, causing damage to the R. R. No. 8. This shrill whistle was from the O 26.

Act March 3, 1899, с. 425, § 15 (U. S. Comp. Stat. § 9920 [33 USCA § 409]), provides: "It shall not be lawful to tie up or anchor vessels or other craft in navigable channels in such a manner as to prevent or obstruct the passage of other vessels or craft."

It is, of course, quite true that a violation of this provision might be permissible in the face of an emergency. Such an emergency, it is conceivable, might arise in a dense fog settling down on the moving vessel. There is not sufficient evidence in the record that such an emergency presented itself in the present instance, although the fog was admittedly dense, In any event, a vessel so anchoring in a channel is, in fact, an obstruction, which imposes a special burden upon moving vessels in the channel. Such anchoring vessel in a fog is bound to make her presence known by the ringing of a bell rapidly for five seconds, at intervals of not more than a minute (U. S. Comp. Stat. § 7888 [33 USCA § 191]).

The facts in this case, I think, are conclusive that, while a fog bell was rung on the Artisan, it was not at intervals of a minute or less, and it was in alternation with a fog bell on the Algonquin, anchored in the vicinity. The evasive replies of the witness for the Artisan are convincing that the bell was rung in alternation with that on the Algonquin, but that the Artisan's bell was not rung as required by law. This witness attempted, under redirect examination, to overcome the effect of his previous testimony of alternate ringing; but it was quite apparent that his attempt to correct was based upon his conclusion that he had blurted out a fact to the damage of his boat, rather than a zeal to tell the truth.

"A vessel infringing a positive regulation must affirmatively show that such violation did not contribute." The Walter Franks (C. C. A.) 299 F. 319. The fact that the Artisan and the O 26 were anchored in the channel imposed a burden of responsibility more exacting than if at an anchorage ground, assuming that anchoring at that point was excusable.

A further contributing cause of the collision was the blowing of the shrill, squeaky whistle on the scow O 26. The scow O 26 had no fog bell. The natural deduction from the blowing of the shrill, squeaky whistle on the scow was that it was blown by some small boat under way.

The next question requiring consideration

is whether or not the Helmsman was also at fault. I am of the opinion that, under the doctrine set forth in The Cohocton, Walter Franks Case (C. C. A.) 299 F. 319 (modifying the decree of the District Court), the Helmsman is also partly at fault. It is evident that she was moving at a speed which made it impossible for her to stop and avoid collision within the distance that the other vessel could be seen.

[2] I am of opinion that the libelant is entitled to maintain this action. On the day of the collision, February 5, 1921, the scow R. R. No. 8 was owned, in equal shares, by Robert Rogers and Augustus T. Mackenzie. On that same date the Helmsman was owned, in equal shares, by Robert Rogers and Fred E. Jones, trading under the name of Fred E. Jones Dredging Company. As of February 8, 1922, Jones and Rogers transferred the whole of the tug Helmsman to Robert Rogers. It is manifest that, if Rogers was the sole owner of R. R. No. 8 and the Helmsman at the time of the accident, he would have no recovery against the Helmsman, if that tug be found partly liable for the collision. "The same person cannot be both plaintiff and defendant at the same time in the same action." Globe & Rutgers Fire Ins. Co. v. Hines (C. C. A.) 273 F. 774, at page 777.

The issue to be determined by the court is the relative responsibility of the Artisan and the Helmsman for the damage sustained by the R. R. No. 8. The amount of recovery or accounting between the part owners is merely incidental to the main issue.

A decree for libelant against both the Artisan and the Helmsman will issue in accordance with the views expressed. Settle decree on notice.

AMERICAN WOOD PRODUCTS CO. et al. v. CITY OF MINNEAPOLIS et al.

District Court, D. Minnesota, Fourth Division.

September 8, 1927.

1. Municipal corporations 601-Zoning ordinance must be justified on ground of public welfare.

A city zoning ordinance must find its justification in some aspect of the police power, on the ground that it is for the public welfare. 2. Municipal corporations 601-In determining power to forbid erection of building of particular kind or for particular use, court must consider circumstances and locality.

The question whether power exists to forbid the erection of a building of a particular kind or for a particular use is to be determined, not by an abstract consideration of the building or of the thing considered apart, but by considering it in connection with the circumstances and the locality.

3. Municipal corporations

63(1)-Legislative classification for zoning purposes must control if validity be fairly debatable.

If the validity of legislative classification for zoning purposes be fairly debatable, the legislative judgment must be allowed to control.

4. Municipal corporations 601-That zoning ordinance depreciated value of property to one-fifth or less held not to render it invalid (Laws Minn. 1921, c. 217, § 1, as amended by Laws Minn. 1923, c. 364).

Zoning ordinance, establishing "multiple dwelling" district in territory wherein there were factories, and forbidding additions to the factories or erection of other factories, enacted under Laws Minn. 1921, c. 217, § 1, as amended by Laws Minn. 1923, c. 364, held not invalid because the property was worth only from onefifth to one-eighth as much for "multiple dwelling" purposes as for industrial purposes.

5. Courts 366(8)-Zoning ordinance, upheld by highest state court, will be declared invalid by federal court only when palpably unjustified as police measure.

Action of local legislative authority in enacting zoning ordinance especially where upheld by the highest court of the state whose people are directly concerned, will be interfered with by federal court only when it is plain and palpable that it has no real or substantial relation to public health, safety, morals, or to the general welfare.

6. Constitutional law296(2)-Municipal corporations601-Zoning ordinance, forbidding additions to factories or new factories in "multiple dwelling" district, held valld exercise of police power and not to deny due process of law (Const. Amend 14; Laws Minn. 1921, c. 217, § 1, as amended by Laws Minn. 1923, c. 364).

City zoning ordinance, creating district known as "multiple dwelling" district and forbidding the erection therein of additions to factories or of new factory buildings, enacted under Laws Minn. 1921, c. 217, § 1, as amended by Laws Minn. 1923, c. 364, held a valid exercise of police power and not to deny due process of law, contrary to Const. Amend. 14, and to the Constitution of the state of Minnesota; it not being plain and palpable that the restrictions had no real or substantial relation to public health, safety, morals, or to the general welfare.

7. Constitutional law 225(1)-Zoning ordinance forbidding additions to factories or new factories in "multiple dwelling" district held not to deny equal protection of the law (Laws Minn, 1921, c. 217, § 1, as amended by Laws! Minn, 1923, c. 364).

City zoning ordinance, creating district known as "multiple dwelling" district and forbidding the erection therein of additions to factories or of new factory buildings, enacted under Laws Minn. 1921, c. 217, § 1, as amended by Laws Minn. 1923, c. 364, held not invalid as denying equal protection of the law, though nearby property might be used for light in

dustry; the validity of the legislative classification being fairly debatable.

8. Eminent domain 2(1)-Zoning ordinance, forbidding additions to factories or new fac tories in "multiple dwelling" district, held not invalid as taking property for public purpose without compensation (Laws Minn. 1921, c. 217, § 1, as amended by Laws Minn. 1923, c. 364).

City zoning ordinance, creating district known as "multiple dwelling" district and forbidding the erection therein of additions to factories or of new factory buildings, enacted under Laws Minn. 1921, c. 217, § 1, as amended by Laws Minn. 1923, c. 364, held not invalid as taking property therein for a public purpose without just compensation, contrary to the Constitution of the state of Minnesota.

In Equity. Suit by the American Wood Products Company and others against the City of Minneapolis and another. Bill of complaint dismissed.

George T. Simpson, of Minneapolis, Minn., for complainants.

Neil M. Cronin and R. S. Wiggin, both of Minneapolis, Minn., for defendants.

JOHN B. SANBORN, District Judge. The evidence was taken, the case argued and held under advisement, awaiting the decision of the United States Supreme Court in cases involving the validity of zoning ordinances generally, and was finally reargued and submitted on the 1st day of September, 1927.

The action is, in effect, a consolidation of four separate actions. The complainants are all residents of and property owners in the city of Minneapolis. Some forty-five years ago, there was constructed on the east bank of the Mississippi river by the Chicago, Milwaukee & St. Paul Railway Company a branch line of railroad connecting what is known as the Milwaukee Short Line with the line of the Great Northern to the north. This branch line is entirely within the city limits of Minneapolis. At the time it was constructed, the part of the city through which it ran was almost entirely undeveloped and largely uninhabited. This line of track is known as the "East Side spur." During recent years, it has been heavily used because of the business routed over it from connecting lines of the Milwaukee and also because of the industries which have grown up beside it, particularly near its northern terminus.

The complainant American Wood Products Company located on the easterly side of this spur near its southern terminus in 1913 and established a wood-working factory. At the time of its location, an ordinance of the city of Minneapolis designated

this property for industrial use. The complainant has substantial factory buildings upon its property, has built up a successful and growing business, and needs to expand its facilities. On April 7, 1924, the city of Minneapolis passed a zoning ordinance restricting the district within which this property is located for multiple dwellings. The effect of this ordinance was not to prohibit the existing use of the factory of the American Wood Products Company, but to prevent the use of any of its unimproved property for the purpose of building other factory buildings or additions to its present factory. The complainant applied to the building inspector of the city of Minneapolis for a permit to erect an addition to its factory, which was refused by him because of the ordinance. The highest and most valuable use to which the real estate owned by the complainant may be put is industrial use, because of the fact that it is situated on the spur track of the Milwaukee Road. For the same reason, it has little value as a site for multiple dwellings, and the effect of the designation made by the zoning ordinance is to greatly reduce the value of the complainant's property. The property contains some 32,000 square feet, or five city lots, and there is evidence which would justify the conclusion that it was worth about $12,800 for industrial purposes, and not to exceed $1,500 for multiple dwelling purposes, that the present buildings on the property are worth in the neighborhood of $22,000, and that these buildings are useful only for industrial purposes and cannot be used for any other.

The complainant T. Benson owns vacant trackage property upon this same spur, north of the property of the American Wood Products Company and on the same side of the track. He has applied for a permit for a building to be used as a factory. His application was denied because of the ordinance. His property is also substantially more valuable for industrial purposes than for multiple dwelling purposes, and the effect of the ordinance as to him is to seriously depreciate the value of his property. He has some eighteen lots, containing 90,000 square feet, and the evidence most favorable to him would justify a conclusion that it was worth some $36,000 for industrial purposes, and not over $5,400 for multiple dwelling purposes.

The property of the complainant Northwestern Feed Company also contains about 90,000 square feet, and has upon it a building used as a feed mill and for the storage of feed and grain, which cost about $30,000.

It is trackage property also on the East Side spur, to the north of the property of the complainant T. Benson, and on the same side of the track. The evidence most favorable to the complainant would indicate the value of this property for industrial purposes to be $40,500, and possibly $3,600 for multiple dwelling purposes. The ordinance has the same effect upon it which it has upon the property of the American Wood Products Company. The complainant Northwestern Feed Company also has applied for a permit for a building to increase its facilities, which was refused because of the zoning ordinance, and the evidence indicates that, by reason of the fact that it has not been able to increase its plant, it was obliged to spend some $30,000 during the year 1925 for additional storage space in connection with its business. The evidence also shows that almost directly to the west and across the track is property of much the same class and character, which is zoned as "light industrial," and which is occupied and used by an oil company for the purpose of storing oil and gasoline.

The property of the complainant Lyle Culvert & Road Equipment Company is not directly on the tracks of the East Side spur, but is close to them, and there is a switch owned by it which connects it with the spur. It has upon it no substantial improvements, and is, in effect, vacant and unimproved land. Like the property of the other complainants, its most valuable use would be for industry, and it has a very substantially less value for other uses. It comprises eighteen lots, which this complainant values for industrial purposes at $50,000, and not to exceed $3,600 for multiple dwelling purposes. The side track into the property was built by the complainant at a cost of $4,000, in anticipation of industrial development. It also has applied to the building inspector of the city of Minneapolis for a permit to establish a factory upon its property, which also has been refused because of the zoning ordinance. The effect of the ordinance upon the value of its property is substantially the same as it is with respect to the property of the other complainants.

In my judgment, the value of the property of the various complainants for industrial purposes is from five to eight times as great as it would be for dwelling house purposes, because, while the tracks of the Milwaukee Railway Company are an advantage to industry, it is a well-known fact that people do not care to live on premises directly adjoining the heavily operated tracks of a