The Steamship Favorita.

This question is substantially the same, as that decided by this Court, in the case of the Cayuga, (2 Ben. p. 125,) and until further instructed, I adhere to the rule there laid down. The first exception on the part of the claimant is therefore overruled.

Both sides have excepted to the allowance of $1,000, as the amount of permanent injury caused to the Manhasset, by the collision, and I have duly considered the evidence bearing upon the subject.

It appears clearly proved, that some permanent depreciation of the value of the boat did result from the collision, but the amount of that depreciation is not so clear. Upon the evidence I certainly could not consider that amount to have been shown to exceed the sum awarded, and have no hesitation in disallowing the exception taken by the libellants upon that ground. I am not very well satisfied with the evidence as showing it to have equalled the sum awarded, but, upon the whole, I conclude not to disturb the finding of the Commissioner upon the point. The exceptions of both sides, are accordingly overruled, and the report confirmed as it stands.

I have been asked, at this time, to determine also the question of costs, which was not determined in the interlocutory decree. The case is one of mutual fault, and although I entertain no doubt as to the propriety, in a proper case, of mitigating the effect of the rule of equal division of loss, in cases of mutual fault, by awarding full costs to either party, I do not consider that the present case calls for any deviation from the practice, which is to refuse costs to both parties, when both are equally in fault.

For libellant, B. D. Silliman.

For claimants, Benedict & Benedict.

In the Matter of Leonard S. Ballou, a Bankrupt.

Southern District of New York.

MAY, 1870.

IN THE MATTER OF LEONARD S. BALLOU, A BANKRUPT..

PRACTICE.-PETITION AND BILL.-LIEN.-FRAUDULENT JUDGMENT.

A bankrupt suffered his property to be taken on legal process in favor of one of his creditors, under an execution issued on a judgment against him, the bankrupt intending thereby to give a preference to such creditor, and the creditor having reasonable cause to believe, at the time, that the bankrupt was insolvent:

Held, That the transaction was void, under the 35th section of the bankruptcy Act, and that no valid lien was acquired in favor of the creditor by the taking under the execution.

The property levied upon under the execution was, under an order of the

bankruptcy Court, delivered to the assignee, and sold by him, subject to the determination of the Court as to the validity of the lien claimed by the creditor. The assignee filed a petition, praying that such lien might be declared void. The creditor's answer prayed that it might be adjudged valid, and that the assignee might be directed to satisfy the execution out of the proceeds of the property held by him. On an objection taken by the creditor, at the hearing: Held, That, as the matter was brought up by petition, instead of by bill in equity, it was irregular.

That both petition and answer must fall, and the proceeding be dismissed, without costs, with leave to the creditor to file a bill in equity, or bring a suit at law, as he might be advised, within thirty days.

BLATCHFORD, J. On the proofs in this case, I regard it as established, that the bankrupt, on the 9th of October, 1869 (the petition in bankruptcy having been filed on the 15th of October, 1869), being insolvent, suffered his property to be taken on legal process in favor of the firm of E. S. Jaffray & Co., under an execution issued on that day against him, on a judgment recovered on

In the Matter of Leonard S. Ballou, a Bankrupt.

that day, in the Marine Court of the city of New York, by that firm, against him, for $486 80; that the bankrupt intended thereby to give a preference to that firm, as his creditors, they being such at the time; and that that firm had reasonable cause to believe, at the time, that the bankrupt was insolvent, and that a fraud on the bankruptcy Act was intended. The transaction was, therefore, void, under the 35th section of the Act, and no valid lien was acquired in favor of the firm, by the taking under the execution. The petition of the assignee prays that such lien may be declared void. The answer of the firm to that petition, which answer was verified on the 17th of December, 1869, and filed on the next day, prays that the levy under the execution may be adjudged to be a valid lien, and that the assignee may be ordered to satisfy the execution out of the proceeds of the sale of the property. It appears, by the proofs, that the property levied upon under the execution was, on or about the 14th of December, 1869, under an order made by this Court on that day, delivered to the assignee, the order providing that he should hold the proceeds separate from the other estate of the bankrupt, subject to the determination of this Court on the petition filed by the assignee to ascertain the validity of the lien claimed by the firm, and that none of the rights or liens of the firm should be prejudiced by the order. It also appears, that the property has been sold by the assignee, and that its proceeds have been kept separate, to abide the order of this Court.

The objection was taken, at the hearing, by the counsel for the firm, that, inasmuch as the proceeding instituted by the petition of the assignee is one against the firm as claiming an adverse interest touching property or rights of property of the bankrupt, transferable to or vested in the assignee, it is wholly irregular, because it was not brought upon a plenary bill in equity, but by a summary petition and an order to show cause. On the

In the Matter of Henry E. Dibblee and others, Bankrupts.

authority of the recent decision made in the Circuit Court for this district, in the case of In re Bonesteel (7 Blatchf. C. C. R. 175), this objection must be held to be well taken. As the petition falls, the answer must fall with it, and also the prayer of the answer, that the assignee may be ordered to satisfy the execution out of the proceeds of the sale of the property levied upon. The petition is, therefore, dismissed, but without costs to either party, as against the other; and, as the fund is in the hands of the assignee, leave is given to the execution creditors to file a bill in equity, or bring an action at law, as they shall be advised, against the assignee, in a proper Court, for the enforcement of such rights as they shall seek to claim against the assignee in the premises, provided that be done in thirty days herefrom, at the expiration of which time, if it be not done, the assignee may apply for directions as to the fund.

G. A. Seixas, for the assignee.

F. N. Bangs, for the execution creditors.

MAY, 1870.

IN THE MATTER OF HENRY E. DIBBLEE & OTHERS, BANKRUPTS.

COUNSEL FEES OF PETITIONING CREDITOR.

A claim by petitioning creditors in involuntary bankruptcy, for counsel fees incurred by them, in the proceedings before adjudication, cannot be entertained by the Register in the first instance, but must be presented to the Court, on petition.

The Schooner Transit.

In this case, the petitioning creditors presented to the assignee a claim against the estate for moneys paid for the services of counsel in the proceedings, prior to the adjudication of bankruptcy. The assignee presented the claim to the Register, requesting him to specify the proper amount to be allowed, and to make an order of payment. The Register certified to the Court the question, whether the matter should not be presented to the Court, in the first instance.

BLATCHFORD, J. The register cannot entertain the application in the first instance. There must be a petition to the Court, by the party, setting out the facts, and asking the relief desired.

MAY, 1870.

THE SCHOONER TRANSIT.*

COLLISION.-PILOT BOAT.-DEMurrage.-PermANENT DETERIORA

Where the owners of a pilot boat, injured in a collision and repaired, were held entitled to recover the damages:

Held, That the pilots were not bound to hire a fruiter or a fishing smack, for the purpose of carrying on their business, while their vessel was being repaired. That, in the absence of a market for the chartering of pilot boats, it was proper to resort to the judgment of persons acquainted with the piloting business, as to the value of the time of the vessel, based upon the employment she was in, its character and constancy, and its then recent results.

That such value must include only the value of the use of the boat, as a vessel, without pilots or crew or stores.

That objections to the admission of evidence before a commissioner cannot be raised by exception to his report.

*For the decision on the merits in this case, see vol. 3, p. 192,