All which is directed to be certified to the Circuit Court of the United States for the First Circuit and District of Maine. [PRIZE.] 1814, the said schooner George, and the goods, | a hearing under the judiciary act of Septem&c., aforesaid, were brought into the port of ber 24th, 1789, c. 20, s. 26. Ellsworth, in the said district of Maine, and the goods, &c., were then and there, under color of capture by said Dekoven, his officers and crew, in and with said schooner Fly, imported, in manner aforesaid, into the said states, contrary to the true intent and meaning of the statute aforesaid. Other pleadings followed (which it is not necessary to state), ending with a demurrer, upon which the District Court was of opinion that the plaintiffs were entitled to judgment. The defendants thereupon moved for a hearing in chancery upon the making up of the judgment on the bond declared on, which motion was denied, and judgment rendered for the United States. The cause was then brought by writ of error to the Circuit Court, the judges of which were divided in opinion upon the following questions, which were thereupon certified to this court: THE EXPERIMENT. In cases of collusive capture, papers found on board one captured vessel may be invoked into the case of another captured on the same cruise. A commission obtained by fraudulent misrepresentations, will not vest the interest of prize. But collusive capture made under a commission fraudulently obtained. is not, per se, evidence that the commission was A collusive capture vests no title in the captors, not because the commission is thereby made void, the prize property. but because the captors thereby forfeit all title to PPEAL from the decree of the Circuit 1. Whether an American private armed vessel, duly commissioned, making collusive captures of enemy's property during the late war with Great Britain, and under color of such capture introducing goods and merchandise A Court of Massachusetts, affirming the deinto the United States, contrary to the provis- cree of the District Court of Maine, by which ions of the act of March 1, 1809, c. 195, re- the sloop Experiment and cargo were condemnvived and continued in force by the act of ed to the United States, as having been collu260*] March 2, 1811, c. 306, thereby *broke sively captured by the private armed [*262 the condition of the bond given pursuant to the schooner Fly. The facts (so far as necessary) third section of the statute of June 26, 1812, are stated in the opinion of this court. c. 430, requiring "that the owners, officers and crew, who shall be employed on board such commissioned vessel, shall and will observe the treaties and laws of the United States." 2. Whether, if such proceeding on the part of such private armed vessel be a breach of the condition of said bond, and such breach appear upon demurrer, the defendants can by law claim a hearing in chancery, under the judiciary act of September 24, 1789, c. 20, s. 26. The cause was briefly argued by Mr. Webster for the plaintiffs in error, and by Mr. Pitman for the United States. Mr. Webster, for the appellants, argued, that this case was distinguishable in its circumstances from that of The George,' captured by the same privateer, and adjudged by this court to be a collusive capture. Mr. Pitman, for the United States, argued upon the facts with great minuteness and ability, to show that the capture was made mala fide. He also contended that the captors, who had obtained their commission for the fraudulent purpose of violating the laws of the United States, and who had been detected by this court in an attempt to impose on it in a former case, could not be entitled to derive any bene The court directed the following certificate fit from their commission, even supposing the to be sent to the Circuit Court: capture in the present instance not to be collusive. The court had already settled certain CERTIFICATE.-This cause came on to be principles analogous to that on which he inheard on the transcript of the record of the sisted. Thus, it has been determined, that if a Court of the United States for the First Circuit neutral ship-owner lend his name to cover a in the District of Maine, on the points on which fraud with regard to the cargo, this will subject the judges of that court were divided in opin- the ship to confiscation. So, if a party ation, and was argued by counsel. On consider-tempt to impose upon the court by knowingly ation whereof, this court is of opinion: 1. That an American private armed vessel, duly commissioned, making collusive captures of enemy's property during the late war with Great Britain, and under color of such captures introducing goods and merchandise into the United States, contrary to the provisions of the act of March 1, 1809, c. 195, revived and con261*] tinued in *force by the act of March 2, 1811, c. 306, thereby broke the condition of the bond given pursuant to the third section of the statute of June 26th, 1812, c. 430, requiring "that the owners, officers and crew, who shall be employed on board such commissioned vessel, shall and will observe the treaties and laws of the United States. 2. That where such breach appears upon demurrer, the defendants cannot, by law, claim or fraudulently claiming as his own property belonging in part to others, he will not be enti tled to restitution of that portion [*263 which he may ultimately establish as his own.* And in the case of The Anne, the court distinctly recognize the principle that fraud will forfeit all rights to which captors might otherwise have been entitled under their commission." He also cited authorities to show that the court would take notice of facts which came judicially into their view in the case with which this was 1.-1 Wheat. Rep. 408; 2 Wheat. Rep. 278. 3.-The St. Nicholas, 1 Wheat. Rep. 417; The Fortuna, 3 Wheat. Rep. 236. 4.-The Dos Hermanos, 2 Wheat. Rep. 76. so closely associated, and would severely scru- | of the fruits of their unlawful enterprises. A tinize the conduct of the same parties in a similar transaction.1 Mr. Justice STORY delivered the opinion of the court: This is a prize cause, brought by appeal from the Circuit Court of Massachusetts, affirming, pro forma, the decree of the District Court of Maine. The sloop Experiment and cargo are confessedly British property, and were captured by the privateer Fly during the late war, and brought into port, and proceeded against by the captors in the proper court, for the purpose of being adjudged lawful prize. No claim was filed in behalf of the captured, but the United States interposed a claim, upon the ground that the capture was fraudulent and collusive, and the cargo was introduced into the country in violation of the non-importation acts then in force, which prohibited the importation of goods 264*] of British manufacture, *as the goods comprising this cargo certainly were. Upon the trial in the court below, the claim of the United States was sustained, and the capture being adjudged collusive, a condemnation was decreed to the government. From that decree the captors have appealed to this court, and the cause now stands for judgment as well upon the original evidence as the farther proofs which have been produced by the parties in this court. The privateer is the same whose conduct came under consideration in the case of The George, reported in 1 Wheat. Rep., 408, and 2 Wheat. Rep., 278, and was there adjudged to have been collusive. The present capture was made during the same cruise, by the same crew, and about six days only before the capture of the George. Under an order of the court, the original papers and proceedings in the case of The George have been invoked into this cause; and after a long interval, during which the parties have had the most ample opportunities to clear the case of any unfounded suspicions, the decision of the court upon the arguments at the bar is finally to be pronounced. At the threshold of the cause, we are met by the question whether a party claiming under a commission which he has obtained from the government by fraud, or has used in a fraudulent manner, can acquire any right to captures made in virtue of such commission. Undoubtedly a commission may be forfeited by grossly illegal conduct; and a commission fraudulently obtained is, as to vesting the interests of prize, utterly void. But a commission may be law265*] fully obtained, although the parties intend to use it as a cover for illegal purposes. It is one thing to procure a commission by fraud, and another to abuse it for bad purposes. And if a commission is fairly obtained, without imposition or fraud upon the officers of government, it is not void merely because the parties privately intend to violate, under its protection, the laws of their country. The abuse, therefore, of the commission is not, per se, evidence that it was originally obtained by fraud and imposition. The illegal acts of the parties are sufficiently punished by depriving them collusive capture conveys no title to the captors. Not because the commission is thereby made void, but because the captors thereby forfeit all title to the prize property. And after all, while the commission is unrevoked, it must still remain a question upon each distinct capture, upon the evidence regularly before the prize court, whether there be any fraud in the original concoction, or in the conduct of the cruise. We cannot draw in aid the evidence which exclusively belongs to another cause, to fix fraud upon the transaction, unless so far as, upon the general principles of prize proceedings, it may be properly invoked. The present case, then, must depend upon its own circumstances. It cannot, however, escape the attention of the court, that this privateer has already been detected in a gross case of collusive capture, on the same cruise, and under the same commission. This is a fact, of which, sitting as a court of admiralty, we are bound to [*266 take notice; and it certainly raises a presumption of ill faith in other transactions of the same parties, which can be removed only by clear evidence of honest conduct. If the circumstances of other captures, during the same cruise, are such as lead to serious doubts of the fairness of their character, every presumption against them is greatly strengthened; and suspicions once justly excited in this way, ought not to be easily satisfied. The captors have had full notice of the difficulties of their case, and after an order for farther proof, which should awaken extraordinary diligence, they cannot complain that the court does not yield implicit belief to new testimony, when it comes laden with grave contradictions, or is opposed by other unsuspected proofs. Many of the circumstances, which were thought by the court to be entitled to great weight in the decision of The George, have also occurred in the present case. The original equipment, ownership, shipping articles, and conduct of the cruiser, are of course the same. The stay at Machias, the absence of Lieut. Sebor, the very suspicious nature of his journey, the apparent connection of that journey with persons and objects in the immediate vicinity of the place where the voyage of the prize commenced, are distinctly in proof. The bad equipment of the prize, her indifferent condition, and small crew for the voyage, the nature of her cargo, and the flimsy pretenses set up for the enterprise, in the letters on board, are circumstances of suspicion, quite as strongly made *out as in The George. The conduct [*267 of the prize during her ostensible voyage was still more striking. She was far out of the ordinary course of the voyage, without any necessity, or even plausible excuse. She chose voluntarily to sail along the American coast, out of the tract of her voyage, even at the moment when she affected to have notice that the Fly was on a cruise; and she exposed herself to capture in a manner that can scarcely be accounted for, except upon the supposition of collusion. The pretense set up for this conduct is exceedingly slight and unsatisfactory. The circumstances of the capture, too, as they come from the testimony of some of the captors, as well as from a disinterested witness, are not calculated to allay any doubt. Here, as in The George, all of the prize crew, excepting one, were dismissed without any effort to hold them as prisoners, and without any apparent reason for the dismissal. And if the testimony of one Evidence that a subscribing witness to a deed had been diligently inquired after, having gone to sea, and been absent for four years, without having been heard from, is sufficient to let in secondary proof of his handwriting. of the captors is to be believed, there is entire APPEAL from the Circuit Court of South proof that the prize was long expected, and came as a known friend under preconcerted signals. It may be added, that the testimony of the captors is, in some material respects, in, consistent; and if the testimony of two disinterested and respectable witnesses is to be credited, the master of the prize, in opposition to his present testimony, admitted, in the most explicit manner, that the capture was collusive. We do not think that it would conduce to any useful purpose to review the evidence at large. It appears to us to be a case where the 268*] circumstances of collusion are quite as strong, if not stronger, than in The George. And we are therefore of opinion, that the decree of condemnation of the prize and her cargo, to the United States, ought to be affirmed, with costs. Cited 7 Wall. 360; Blatchf. Pr. 443, 449. [CHANCERY. LIEN. ASSIGNMENT.] SETH SPRING AND SONS, Appellants, v. THE SOUTH CAROLINA INSURANCE Carolina. This was a bill of interpleader, filed by the South Carolina Insurance Company in the court below, on the 25th of April, 1816, against the appellants, and Gray & Pindar, William Lindsay, and John Haslett; praying that they might file their answers, and interplead, so that it might be determined to whom the proceeds of a certain policy of insurance should be paid. It appeared by the pleadings, and the evidence in the cause, that this policy had been made on the 6th of May, 1811, by the respondents, the South Carolina Insurance Company, upon a vessel called the Abigail Ann, then ly ing at Savannah, on a voyage to Dublin, or a port in St. George's Channel, for account of John H. Dearborne, and the respondents, Gray & Pindar, the latter of whom were merchants residing at Charleston, South Carolina, and at that time part owners of the ship, but, on the 27th of May, 1811, sold their interest therein to *Dearborne. On the 5th of July, 1811, [*270 the vessel sailed on the voyage insured. It appeared that the respondent, Lindsay, as the agent of the parties, had procured this policy to be underwritten. It also appeared that Lindsay had delivered the policy to Gray & Pindar, for the use of Gray & Pindar, and Dearborne, without at the same time expressly claiming any lien upon it. After the sailing of the Abigail Ann, Dearborne, and Gray & Pindar, jointly purchased and loaded another ship, called the Levi Dearborne, of which vessel and cargo Dearborne owned two-thirds, and Gray & Pindar oneIn September, 1811, this vessel sailed An insolvent debtor has a right to prefer one creditor to another in paying an assignment bona fide made, and no subsequent attachment, or sub-third. sequently acquired lien, will avoid the assignment. Such an assignment may include choses in action, from Savannah for Europe, and Dearborne as a policy of insurance, and will entitle the as- went in her. Before sailing, D. had drawn signee to receive from the underwriters the amount bills on England, some of which were indorsed insured in case of a loss. It is not necessary that the assignment should be accompanied by an actu- and negotiated by Lindsay, which were returned protested for non-acceptance, and Lindsay was compelled to pay them. Haslett also made advances to Dearborne, and took his bills on England, secured by a bottomry bond on the ship Levi Dearborne. These bills also returned protested. al delivery of the policy. Upon a bill of interpleader, filed by underwriters against the different creditors of an insolvent debtor, claiming the fund proceeding from an insurance made for account of the debtor, some on the ground of special liens, and others under the assignment, the rights of the respective parties will be determined. But, on such a bill, those of the co-defendants who fail in establishing any right to Before Dearborne left Savannah, certain the fund, are not entitled to an account from the misunderstanding arose between him and Gray defendant whose claims are allowed, of the amount & Pindar, which it was agreed should be reand origin of those claims. On a bill of interpleader, the plaintiffs are in gen-ferred to arbitrators. On the 21st of Septemeral entitled to their costs out of the fund. Where ber, 1811, the arbitrators, and one Harford, as the money is not brought into court, they must umpire, awarded that Gray & Pindar should pay interest upon it. 269*] *An insurance broker is entitled to a lien execute a bill of sale of the ship Abigail Ann on the policy for premiums paid by him on ac- to Dearborne, and deliver to him the policy of count of his principal; and though he parts with insurance thereon, without unnecessary delay. the possession, if the policy afterwards comes into his hands again, his lien is revived, unless the man- Before he sailed, Dearborne directed Harford ner of his parting with it manifests his intention to to transmit to his wife, in the district [*271 abandon the lien. In such a case, an intermediate of Maine, to the care of Seth Spring & Sons, the bill of sale and policy of insurance which had been thus awarded to him. The policy was subsequently sent by Harford to Lindsay, to be put in suit against the South Carolina Insurance Company. assignee takes cum onere. But in the case of other liens acquired on the policy, if it be assigned, bona fide, for a valuable consideration, while out of the possession of the person acquiring the lien, and afterwards return into his hands, the lien does not revive as against the assignee. NOTE. As to right of debtor to make preferences in assignment, see note to Marbury v. Brooks, 7 Wheat. 556. The ship Levi Dearborne was obliged to put into New York by stress of weather, and there Dearborne, on the 28th of October, 1811, made an assignment of the Abigail Ann, and of his interest in the ship Levi Dearborne, and of the policies upon both vessels, to S. Spring & Sons, to secure the payment of a debt due by Dearborne to them, amounting to about $16,000. The handwriting of Dearborne, and of the subscribing witness to the deed of assignment, were both proved; and one Maria Teubner, who testified to that of the subscribing witness, swore that she was one of his creditors, and had taken pains to obtain information of where he was, but without success. The last account of him was that he had entered on board of an American privateer, during the late war, and had not been heard of for four years. The assignment was made subject to pay out of the cargo of the Abigail Ann, if it reached the hands of his correspondents in England, certain bills which he had drawn on them, in the confidence that they would be paid out of the cargo of the Levi Dearborne. Nothing was realized from that vessel and cargo, and the Abigail Ann was lost at sea. An action was brought upon the policy on the Abigail Ann, in the names of Dearborne, and Gray & Pin272*] dar, *against the South Carolina Insurance Company, and judgment obtained against the latter, in 1815, for the sum of $9,800. Dearborne died in March, 1813. On the 24th of February. 1812, Lindsay, on the return of the bills indorsed by him, issued an attachment under the laws of South Carolina against Dearhorne, who was then absent from that state, and served a copy upon the South Carolina Insurance Company. On the 21st of May, 1812, Haslett also issued an attachment against Dearborne, and served a copy on the South Carolina Insurance Company. No appearance was entered for Dearborne in these attachment suits, and judgment was obtained on Lindsay's on the 19th of April, 1813, and on Haslett's on the 10th of June, 1815. At the hearing in the court below, after the depositions and regularly proved exhibits in the cause had been read, an order signed by Harford, as agent for Dearborne, and S. Spring & Sons, on Lindsay, in favor of Haslett, was read in evidence, without notice to the appellants, or an order for its being read at the hearing. The Circuit Court decreed that the demand of Lindsay should be first satisfied, and paid out of the fund; that of Gray & Pindar next; that of S. Spring & Sons next; that Haslett was entitled to the surplus, if any; and that S. Spring & Sons should account, and prove their claims against Dearborne, either by filing a cross-bill, or by answering upon interrogatories. From this decree an appeal was taken by S. Spring & Sons to this court. 273*] *M. Wheaton, for the appellants, stated, 1. That he would first clear the case of all extraneous matters, and for this purpose would throw out of it both Haslett's and Lindsay's claim. The former was justly postponed to that of S. Spring & Sons, by the court be. low; he has not appealed, and could have no claim under the attachment suits, for Dearborne died before his suit was even commenced. The claim of Lindsay (so as it arises from his attachment), must also be rejected on two grounds: 1st. The policy of insurance on the Abigail Ann had been transferred long be fore his suit. 2d. It was abated by the death of Dearborne. This was understood to be the local law as established by the decisions of the courts of South Carolina. The order, dated the 23d of May, 1813, and signed by Harford, as Dearborne's agent, and read in evidence as an exhibit, must also be excluded from the cause. There is no evidence that he was the agent of Dearborne for this purpose; and even if he had been, the paper was irregularly introduced. It is the settled practice of the Court of Chancery, wherever anything like a regular practice prevails, that no exhibit can be proved at the hearing, without satisfactory reasons why it was not proved in the usual way before the examiner; and if proved at the hearing, a cross-examination of the witnesses is always allowed. And an order must be previously obtained, or, at least, notice given. *The decree below seems to be main- [*274 ly founded on Harford's order, thus irregularly interpolated into the cause. Before the pre tended liens of Gray & Pindar, and of Lindsay, had attached, the assignment had vested the property in the appellants, S. Spring & Sons. Lindsay, after he had delivered up the policy, and an intermediate transfer of it to bona fidei purchasers, could not, by again obtaining possession of it, without the consent of such purchasers, regain his lien, even if he ever had one. His possession was wrongful; and if rightful, he had no right to retain for a general balance. The lien of a policy broker is confined to his general balance on policy transactions and does not extend to other debts. Properly speaking, there is no such thing as a lien by contract. Liens are created by the law, and pledges by contract. But no express pledge is proved in this case. Neither can the analogy of the law of stoppage, in transitu. be applied where the property has already been transferred to a creditor or other bona fider purchaser. 3. In a bill of interpleader, all the parties are actors. Each party states his own claim, and the admission of no one is evidence against another. The appellants are not bound by the admission of the other co-defendants. They do not admit any such liens as are set up by the other parties, and no evidence is produced of their existence, except the order of Harford, which cannot be admitted. Non constat when that order was executed. It might [*275 have been at the very moment before the hearing; and the bare possibility of this shows the danger of permitting it to be read in evidence without notice and without cross-examination. 4. There are, besides, several formal objections. The plaintiffs below do not offer to bring the money into court, nor is there any affidavit accompanying the bill, and showing that it was filed without collusion. The want of this was a ground of demurrer, and they are clearly not entitled to their costs out of the fund. The appellants are the only parties who, in answering, insist on their rights; the others merely pray to be dismissed. C., 1812, MS. 1.-Crocker v. Radcliffe, Constitutional Court S. 2.-Consequa v. Fanning, 2 Johns. Ch. Rep. 481, and the cases there cited. 3.-Olive v. Smith, 5 Taunt. Rep. 57. 4.-1 Madd. Ch. 174, 181. Mr. Cheves, contra, stated that there were | prove his handwriting is doubtful and improbfour claims in this case. 1. That of Haslett. 2. That of Lindsay. 3. That of Gray & Pindar. 4. That of the appellants, S. Spring & Sons. 1. The decree adjudges the surplus, if any, to Haslett, after payment of the other claims. But he has no claim upon the fund in controversy, unless it arises under his attachment. The case of Crocker v. Radcliffe, referred to on the other side, is not before the court in a shape in which the precise point decided can be known. The point said to have been ruled in that case appears to have been determined otherwise in a previous case;1 and the principle 276*] of this last decision appears to be correct. The proceeding by attachment is a proceeding in rem, and, therefore, ought not to abate by the death of the party. It is probable that in Crocker v. Radcliffe nothing had been attached upon the process, and, therefore, the suit was adjudged to abate by the defendant's death; but in the present case the fund in question was attached and is bound by that attachment, subject only to the previous liens. 2. Lindsay's claim is supported by the law of liens. Though he may have parted with possession of the policy for a time, upon regaining it his lien was re-established. But if the lien of Gray & Pindar, to whom he parted with the possession, be established, that will cover his claim, they being prior indorsers on the bills which form his demand, and their claim also embracing those bills. 3. The claim of Gray & Pindar is supported by express contract, as well as the general law of lien. The express contract is supported by the testimony of Harford. The implied lien is supported by the possession of Lindsay, which was the possession of Gray & Pindar until he delivered it to them, and afterwards by the possession of Harford, whose possession also was their possession. Their lien embraces as well the bills which they indorsed for Dearborne, that were returned protested for nonpayment, and were paid by Lindsay, as the 277*] sums they have actually paid. The case of Mann v. Shiffner covers the whole of this claim. Manual possession is not neces sary. It is the power to control the possession which gives the lien. The award did not impair the lien without the acquiescence of Gray & Pindar and the surrender of the possession of the policy. It did not even give a right to the possession. The only remedy was an action on the award. But the award itself was not valid. The testimony of Harford proves that the indemnity of Gray & Pindar for their indorsement of Dearborne's bills was one of the points submitted, and as it was not determined, the award is void.' 4. The claim of the appellants, S. Spring & Sons, is not sufficiently proved. They have not proved either the deed of assignment under which they claim, or the debt for which they claim. The subscribing witness to the deed is not produced or examined. The testimony to 1.-Kennedy v. Raguet, 1 Bay's Rep. 484. 2.-Whitaker's Law of Liens, 26, 103, 104. 3.--Id. 121, 122. 4.-2 East's Rep. 523. able. The assignment alleges a debt of about $16,000. The evidence shows only that the appellants paid $2,900 for the assignor, three or four years before, and that they became his surety for $1,200 more at the time of the assignment. These, and many other circumstances, give good reason to doubt the integrity of the transaction. The objections to the form of the bill, and to the answer of the three first-men- [*278 tioned claimants, cannot be sustained. (1) The only consequences of not offering in the bill to bring the money into court were, that the parties interpleaded might have moved the court to order the complainants to pay it into court; or, perhaps, they might have demurred. They have done neither, and they are now too late with their objection. (2) The same answer is applicable to the objection for want of an affidavit that the bill was exhibited without fraud or collusion. They might have demurred, but they have not done so. (3) As to the omission of the answer (except that of the appellants) to pray for a decree other than their dismissal with costs; this is the common form prescribed by the books of practice, and will sustain a decree for the defendants other than a decree of dismissal with costs. And even though the objection were, in general, well founded, it could not affect this decree, if it can be sustained on the merits; because, as to the appellants, they can only be satisfied after payment of Lindsay, and of Gray & Pindar; and as to Haslett's claim, after the others are satisfied, his attachment will bind the surplus. Mr. Webster, for the appellants, in reply, argued that in this form of suit, being a bill of interpleader, even if S. Spring & Sons made out no title, it did not follow that the decree must be affirmed. For aught that appeared, the right party might not yet be before the court. The personal representatives of Dearborne may be necessary parties. Every distinct claim stands on its own merits; [*279 and even if Spring & Sons are not entitled, the fund cannot be decreed to others, unless they prove themselves to be entitled. There are two questions: (1) Can the decree, so far as it allows Lindsay's and Gray & Pindar's claims, be maintained? (2) Can their claims be preferred to those of Spring & Sons? And first, as to Lindsay's claim. So far as it is founded on the attachment suit, it cannot be supported. The judgment against Dearborne, who was dead at the time, is a mere nullity. Besides, the property in the fund had actually been transferred to Spring & Sons before the attachment was laid. If there was a previous lien, the party does not stand in need of the judgment. If there was not, the property was vested in others by the assignment, and the judgment came too late. But he could have acquired no such lien as that which is now set up. There is no rule of law which declares that if a creditor gets, by any means whatsoever, possession of the effects of his debtor, he has thereby a lien as of course. There is here no proof 5.-Whitaker's Law of Liens, 105, 106. 6.-Hunter v. Rice, 15 East's Rep. 100. 7.-Mitchell v. Stuvely, 16 East's Rep. 58. 8.-5 Cranch's Rep. 13; 4 Taunt. Rep. 46. |