January 10th of $2,073.65. It will be observed that on January 8, 1912, Aarons wires from New York to Saul Kaplon at Wake Forest: "Have wired Prof. G. per your letter, answer if sale postponed-then I will leave to-night. Expect money from Applefield Tuesday in Wake Forest."

On the same day Bessy Kaplon buys the stock, and so wires Moses Kaplon at Chase City. Louis Applefield wires from Chase City to "Louis Applefield, Baltimore":

"Between January 2nd and 4th 1912. Have arranged everything satisfactory. Will leave for Durham to-morrow."

It is difficult to reconcile these facts. There is evidence tending to show that Applefield was about this time at Chase City, and that he and Aarons went together from there to Wake Forest. The telegram of January 8th, from Aarons to Saul Kaplon, indicates that he expected to get money from Applefield to buy the goods at Wake Forest. It is evident that Applefield did not reach Wake Forest until January 10, 1912. That is the date of the deposit by Bessy Kaplon of $2,073.75, as shown by bank book. It is evident that the transaction between Bessy Kaplon and Applefield took place on one day. This must have been January 10th. She says that they went to the bank. Mr. Brewer says that they came to the bank in the afternoon. Mr. Gulley says: "The goods were sold on the 8th of January. The payment of $30 was made on the 8th and on the 10th. She paid the balance by check on the Citizens' Bank."

How is it possible to reconcile these indisputable facts with Bessy Kaplon's testimony in regard to the transaction between Applefield and herself? She had bought the goods two days before she saw Applefield at whose suggestion and upon whose offer to loan her the money she says she purchased them. Her statement as to the manner in which Applefield loaned her the money is unreasonable. That a business man should, almost accidentally, find himself in Wake Forest, find a stock of goods in the hands of an assignee, suggest to a young married woman, without consultation with her husband, as she says against the advice of her father-in-law, to buy a stock of goods for $3,723.29, and propose to loan her, on her own notes, without security, or the signature of her husband, $2,100, is a very remarkable transaction and calls for explanation, especially in view of the many and manifest contradictions found in the testimony of Bessy Kaplon in regard to the transaction. Applefield was with Aarons at Chase City, and in some way, and in regard to some matter, "arranged everything satisfactorily." It will be recalled that Aarons wires Saul Kaplon "expect to get money from Applefield," yet, when he buys at Chase City, he gets no money from Applefield, but borrows $1,434 from Bessy Kaplon, who, in turn, accepts Applefield's unsolicited offer to loan $2,100. Bessy Kaplon says that at that time she had $3,000 in her trunk, $1,200 in her father's hands, and $3,000 on deposit in Chicago banks. Why were all of these mysterious methods resorted to when she had ample money of her own. to pay for the goods? Why send Aarons $1,434 and immediately borrow $2,100 from Applefield? Why did she not write to her father, or draw on the Chicago banks, or open her trunk and use her own money?

These questions demand plain, straightforward answers. Her father denies that he had any money for her, and the testimony from the banks shows that she had none there. She says that she paid Applefield the notes, and the checks produced show that she did so. She says that the last note was paid by money drawn from the First National Bank of Chicago. Her account at the Wake Forest Bank shows a deposit, April 3, 1912, of $1,000, but Mr. Givens of the Chicago bank says that she had no account there for the past five years. It is impossible to unravel the tangle into which the parties to these transactions have gotten it. It is equally impossible to escape the conviction that a fraud has been practiced upon the creditors of Moses Kaplon; that as to the Wake Forest stock the defendant Bessy Kaplon has either been an active participant or has been used by others who have profited by their fraudulent scheme, That Balkind, Aarons, and Applefield have not been called upon to explain their connection with these transactions, in which they are so closely connected, excites grave suspicion that they were active participants, if not the chief promoters of the conspiracy and its consummation. A very eminent judge has well said:

"Fraud rarely lurks in the written agreement of parties, entered into at the end of their negotiations with each other, but almost universally precedes it, and consisting, as it must necessarily do in such case, of acts and declarations merely, it can only be exposed by allowing the conduct of the parties, their words and deeds throughout the entire treaty, to be shown to the jury. To hold the law to be that because the negotiations of

the parties culminated in a written instrument all inquiry into their preceding conduct is excluded would be to say that fraud by its very success might be made secure, unless, as can seldom happen, it would be detected in the mere words of the instrument." Ruffin, J., in Knight v. Houghtalling, 85 N. C. 17.

Applying this language to the disclosures in this record, it is difficult to avoid the conclusion that the execution of the notes to Applefield by Bessy Kaplon was the final means resorted to for the purpose of covering up and concealing the truth, that Applefield was a party to the scheme or conspiracy which found its consummation in the execution of the notes to him for the purpose of putting the stock of goods into the possession of Bessy Kaplon by the use of money which justly belonged to the creditors of Moses Kaplon. It may be that we have not been able to accurately interpret all of the facts and circumstances surrounding and permeating this transaction from start to finish. I cannot find that Bessy Kaplon had on January 8, 1912, the money which she claims derived from the sources claimed by her. I entertain a strong conviction that she and her husband have either made away with goods which in equity and justice belonged to the creditors of Moses Kaplon, or have used the proceeds of goods purchased and not paid for to consummate a fraud upon them. In either event, she is not, as against them or their representative the plaintiff, entitled to hold these goods as her property.

[2] To the suggestion that the trustee is estopped to prosecute this suit because, upon his motion, the judge of the District Court for the Eastern District of Virginia directed the assignee to pay the proceeds

of the sale into the court to await the final decree in the bankruptcy proceeding, of which that court has original jurisdiction, it is sufficient to say that the only effect of such order was to hold the money in custodia legis, to be disposed of as upon the final disposition of the case should be decreed. No estoppel can arise against the plaintiff by reason of that order. It appears that prior to the filing of the bill in this cause defendant Bessy Kaplon bought other goods and put them in the store with the stock purchased from the assignee. By direction of this court an inventory was taken in which these goods were separated from those purchased of the assignee. This has been done, and is on file. An order was also made permitting the defendant to sell the goods in the usual course of business, and keep and deposit the proceeds thereof in the bank under the supervision of Mr. Brewer, who has filed monthly statements of such sales, etc. A decree will be drawn adjudging that the goods sold by Mr. Donald Gulley, assignee of Moses Kaplon to Bessy Kaplon, were paid for by the money of Moses Kaplon, and that so much of said stock of goods as may be on hand shall be sold and the proceeds paid over to plaintiff, trustee. To the end that it may be ascertained what portion of the goods now on hand were of said stock and the same separated from such goods as were brought by defendant since January 10, 1912, a referee will be appointed to make such separation, with direction to ascertain the amount of sales that have been made since the order in this cause. The referee will take immediate possession of the goods now in the store and hold the same until the separation is made, not to exceed five days from the date of the interlocutory decree herein. This decree will further provide for a report by said referee within 10 days from its date. The cause will be retained for such further decree ás upon the coming in of the report may be proper in the premises.

THE PERE MARQUETTE 18.

(District Court, E. D. Wisconsin. February 18, 1913.)

1. SHIPPING (§ 209*)-PETITION FOR LIMITATION OF LIABILITY-RIGHT OF CLAIMANT TO ANSWER.

Under admiralty rule 56 (29 Sup. Ct. xlvi), which provides that, in a proceeding by a shipowner for limitation of liability, any claimant of damages "who shall have presented his or their claim to the commissioner under oath, shall and may answer such libel or petition and contest the right of the owner or owners of said ship or vessel either to an exemption from liability or to a limitation of liability," a person who has not so presented a claim has no standing as a claimant to answer the petition.

[Ed. Note. For other cases, see Shipping, Cent. Dig. §§ 646-655, 659, 661, 662; Dec. Dig. § 209.*] .

2. SHIPPING (§ 209*)-PROCEEDING FOR LIMITATION OF LIABILITY-ANSWER. Where a petition for limitation of liability alleges the facts necessary to entitle the petitioner, under the statute, to the relief sought, the answer of a contesting damage claimant must be full, explicit, and distinct as to each separate article and separate allegation, as required by ad*For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes

miralty rule 27 (29 Sup. Ct. xlii), and, where a necessary statutory allegation of the petition is denied, the answer must state the facts on which the denial is based, and not merely bare denials or general conclusions of the pleader.

[Ed. Note. For other cases, see Shipping, Cent. Dig. §§ 646-655, 659, 661, 662; Dec. Dig. § 209.*]

3. SHIPPING (§ 209*)-PROCEEDING FOR LIMITATION OF LIABILITY-Defenses -RECOVERY OF INSURANCE.

That a shipowner recovered insurance on the loss of his vessel does not affect his right to a limitation of liability under the statute as against damage claimants.

[Ed. Note. For other cases, see Shipping, Cent. Dig. §§ 646-655, 659, 661, 662; Dec. Dig. § 209.*]

4. SHIPPING (§ 209*)-PROCEEDING FOR LIMITATION OF LIABILITY-SECURITY FOR COSTS.

Contesting damage claimants in a proceeding for limitation of liability must give security for costs, unless relieved therefrom on a proper showing of inability on account of poverty.

[Ed. Note. For other cases, see Shipping, Cent. Dig. §§ 646-655, 659, 661, 662; Dec. Dig. § 209.*]

In Admiralty. In the matter of petition of the Pere Marquette Railroad Company, as owner of the car ferry steamer Pere Marquette 18, for limitation of liability. On exceptions to answers. Exceptions sustained.

The petitioner, Pere Marquette Railroad Company, has filed a libel and petition, alleging its ownership of a car ferry steamer Pere Marquette 18, a duly enrolled and licensed merchant vessel employed in navigation upon the Great Lakes. On September 9, 1910, while on a voyage between the ports of Ludington, Mich., and Milwaukee, Wis., she met with disaster, sank, and with her cargo became a total loss, out of which were subsequently recovered certain articles belonging to her, life preservers, life raft, etc., valued at approximately $85.00. A description of the cars and their contents, constituting the cargo, and their respective owners, consignors, and consignees, the passenger list, names of officers and crew of the steamer at the time, also the names of passengers and members of crew killed or drowned in said disaster, are particularly set forth. It is also averred that because of the disaster no freight money was or could be earned on the voyage; such part, if any, as had been prepaid, being subject to refund. Suit has been brought by the representatives of one whose life was lost, claiming damages for such loss. Other actions will, unless restrained, be brought upon similar claims, which, if established, will greatly exceed the value of the steamer after such disaster, and of her pending freight.

In claiming the benefit of Revised Statutes, §§ 4283, 4284, 4285 (U. S. Comp. St. 1901, p. 2943), and asserting its desire in the proceedings thus instituted to contest its, and its steamer's, liability for any and all loss or damage resulting from said disaster, conformably to the general admiralty rule, the petitioner negatived in the language of the statutes the occurrence of the disaster and its consequent loss and damage through its or its managing officers' privity or knowledge, and upon information and belief gave the facts concerning the loss of the steamer as follows: "That its said steamer left the port of Ludington, Mich., on the evening of September 8, 1910, bound for the port of Milwaukee, Wis., with about 6 passengers on board, and laden with about 29 freight cars on its main deck in the usual and customary manner, and was then and at all times hereinafter mentioned stout, staunch, and strong, with her said cargo well and sufficiently stowed and secured, was well equipped, manned, and supplied, and in every respect fit for the sea and the voyage she was about to undertake; that while on Lake Michigan in the For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes

course of said voyage she became waterlogged, and about 7:30 a. m. of September 9, 1910, the said steamer, being then about 20 miles off the port of Sheboygan, Wis., suddenly sank stern first in about 60 fathoms of water; that the cause of the sinking of said vessel has been carefully investigated by your petitioner, and your petitioner has been unable to ascertain, and does not know, the cause of said vessel taking in water and sinking as aforesaid, but your petitioner alleges that the sinking of said vessel was in no wise the fault or want of care on the part of your petitioner or those in charge of the navigation of said steamer."

The prayer is for a monition citing all claimants to appear before a commissioner and make due proof of their respective claims, to appear and answer the allegations of the petition, for an injunction restraining all other suits and proceedings except herein, for an adjudication of nonliability of the petitioner and its steamer for any loss, damage, or injury resulting in and from said disaster. And, if on final hearing liability be adjudged then that petitioner be permitted to surrender its right, title, and interest in the steamer and salvage therefrom and freight pending at the time of the disaster, and that liability be limited to the property so surrendered, and also, inasmuch as said voyage was not and cannot be completed, that no freight was pending or can be earned, and that all liability of the steamer and the petitioner otherwise existing be thereby and therethrough satisfied and limited, all in conformity with the general admiralty rules and the statutes in such case made and provided. Upon this petition a monition was issued, citing claimants to appear and make proof of their claims before the commissioner therein named; also to appear and answer the libel and petition. The order for the issuance of such monition restrained the prosecution of actions or proceedings to enforce claims, except in this proceeding.

Pursuant to the foregoing, claimants have appeared, some of them filing a separate claim before the commissioner, and also an answer to the libel and petition; others have filed answer seeking therein to contest the right to limit, and also to state grounds of liability. The petitioner has filed exceptions whose scope and purpose are particularly detailed in the opinion.

Van Dyke, Rosecrantz, Shaw & Van Dyke, of Milwaukee, Wis., for petitioner.

Glicksman, Gold & Corrigan, Harry N. Glicksman, Bloodgood, Kemper & Bloodgood, B. F. Saltzstein, and Chas. Friend, all of Milwaukee, Wis., for claimants.

GEIGER, District Judge (after stating the facts as above). [1] The first exception relates to the right of claimants to answer the petition without having filed a claim with the commissioner. Upon this, the fifty-sixth rule in admiralty (29 Sup. Ct. xlvi) seems decisive:

"In the proceeding aforesaid, the said owner or owners shall be at liberty to contest his or their liability, or the liability of said ship or vessel for said embezzlement, loss, destruction, damage or injury (independently of the limitation of liability claimed under said act), provided that, in his or their libel or petition, he or they shall state the facts and circumstances by reason of which exemption from liability is claimed; and any person or persons claiming damages as aforesaid, and who shall have presented his or their claim to the commissioner under oath, shall and may answer such libel or petition, and contest the right of the owner or owners of said ship or vessel, either to an exemption from liability or to a limitation of liability under the said act of Congress, or both."

This rule, in connection with rules 54 and 55 (29 Sup. Ct. xlv, xlvi), clearly contemplates that all claimants must, in obedience to the monition issued, present their claims to the commissioner in order to have 203 F.-9