Starkweather v. Cleveland Ins. Co. no paper and performs no act to divest him of the title. But the control of the property, merely and solely by the judgment of the court, is taken from him and vested in the assignee, who has merely the power to do what the general as well as the bankrupt law requires, namely, to appropriate the bankrupt's property to the payment of his debts. In other words, that the assignee is a mere agent of the debtor to use his property in the payment of his debts. It therefore follows from this, that the bankrupt remains as much interested in watching over and guarding the insured property after as before bankruptcy, and that the assignee does not acquire such an interest in the policy, nor in the insured property, as to work the forfeiture contemplated by the clauses in question. Phill. Ins. 107. This conclusion will be further strengthened by a review of the cases upon the effect of an involuntary act of bankruptcy upon the breaches of covenant in insurance and other like contracts. PARSONS, in his work on Contracts, vol. 2, p. 451, says: "On general principles, that where property, insured against fire, is taken into the possession of the law, for the benefit of creditors, the insurance will remain valid, until the property is sold by the assignee." The case of Bragg 7. New England Ins. Co., 5 Fost. 289, was a suit brought on a policy which contained a clause that, "If the property shall in any way be alienated, the policy shall be void." The property was mortgaged at the time, and this fact communicated to the company. During the life of the policy, the mortgage was foreclosed, and the property sold. But the court said, "that the title that became vested in the mortgagee by the foreclosure, was brought about by the operation of the law. There was no act of conveyance or transfer, by the mortgagor or mortgagee. We cannot therefore regard the foreclosure and sale as an alienation." In the case of Smith v. Putnam, 3 Pick. 220, there Starkweather v. Cleveland Ins. Co. was a lease of a farm, with a covenant not to carry off any hay under a forfeiture of ten dollars per ton. Hay was attached and carried off by the creditors of the lessee, and without his consent. In this suit for the forfeiture the court said "that the general principle to be deduced from all the cases was that covenants not to assign, transfer, &c., are broken only by a voluntary transfer by the lessee. That the removal of the hay, by sale or execution, was not a voluntary act of the lessee, and, therefore, no breach of the covenant." The leading case in England will be found in 8 Term, 57. Suit was brought on a lease, which contained a covenant that the lessee "should not set over, assign, transfer, or in any way dispose of the lease, without the written consent of the lessor." The lessee confessed judgment, and upon execution issued thereon the lease was sold. Lord KENYON said: "I adopt the distinction between these acts which the party does voluntarily, and those that pass in invitum. Judment in contemplation of law, always passes in invitum, and, therefore, there is no breach." The same doctrine was held thirty years before, and will be found in 3 Wils. 234. In the case of Wilkinson v. Wilkinson, 10 Eng. Ch. 258, a father by will gave his son the rents and profits of certain premises, with a proviso that if the son assigned or disposed of, or otherwise incumbered the property, he should forfeit the estate. The son afterwards became bankrupt. Sir W. GRANT, in deciding the case, says: "Now courts of law have held that an assignment by operation of law, which bankruptcy is, is not an alienation within the meaning of a restraint against alienation." HILLIARD, in his work on Bankruptcy, p. 141, sums up the law in these words: "Property may be limited or leased to be void or revert back in the event of bankruptcy, and if a lease to a trader contain such a proviso, the term does not pass to his assignee, but reverts Starkweather v. Cleveland Ins. Co. back. But to prevent its passing, there must be an express proviso to that fact. The usual covenant or proviso not to let, assign, or transfer, without consent, &c., will not be sufficient. The commissioners may still assign the lease to the assignees, without such consent, and such consent is presumed by operation of law. The distinction, however, is taken in England, that unlike bankruptcy, which is an involuntary proceeding, insolvency, being a voluntary proceeding on the part of the debtor himself, is a breach of the covenant against assignment, and works a forfeiture." On these authorities, it seems clear to me, that the clauses in this policy forbidding its assignment, and the change and transfer of the title to the property, have no more effect than similar words in leases. Both are contracts between two persons, with this difference, that leases are under seal, and therefore of a higher nature. The cases cited establish the doctrine that bankruptcy and judgments are involuntary, and do not avoid covenants against assignments and transfers, either in leases or policies of insurance. In this case, the bankruptcy of Wells, the owner of the policy and the property, was involuntary. By operation of the law the policy and the property were taken out of his custody and control, and placed in the hands of the assignee, as the agent of the law, to sell the same and pay his debts. The entire interest in the property is sold under the law by the assignee. The loss provided for in this policy accrued while the property was in this condition. It was still in law Wells' property, but by operation of law, in the hands of the assignee for the sole purpose of selling and applying the proceeds for Wells' benefit. Decree for petitioner. The Harrison. THE HARRISON. District Court, District of California; September T., 1870. SHIPPING.-LIENS UNDER STATE LAWS. A State statute,-such as chapter 6 of the Practice Act of California, declaring vessels subject to liens for materials or supplies furnished towards their construction, repair, or equipment, and directing that demands secured by such liens shall have preference in order of payment over other demands,-is valid and operative, even in its application to a domestic vessel supplied in her home port, so far as to entitle the holder of a demand within the statute to payment out of surplus proceeds remaining in the registry, after the satisfaction of maritime liens, in preference to a mortgagee of the vessel. The successive decisions of the supreme court abrogating the practice of enforcing such liens by proceedings in rem,-reviewed and explained. Application for distribution of surplus proceeds in a cause in admiralty. HOFFMAN, J.-The question presented in this case is whether a material-man claiming a lien under the laws of this State upon a domestic vessel, is entitled to payment out of the surplus proceeds in the registry, in preference to a mortgagee of the vessel. By chapter 6 of the Practice Act of California, it is provided that all steamers, vessels, &c., "shall be liable for supplies furnished for their use at the request of their respective owners, masters, agents, and consignees, and for materials furnished for their construction, repair, or equipment." The act further provides "that said several causes The Harrison. of action shall constitute liens upon all steamers, vessels, and boats, and have priority of payment in their order herein enumerated, and shall have preference over all other demands; provided, such liens shall only continue in force for the period of one year from the time the cause of action accrued." If this statute be constitutional and operative, it is evident that the material-man has by law a lien and right to priority of payment in preference to all other demands; and that this right must be recognized by the court which has in its possession the surplus proceeds which remain after satisfying the maritime liens on the vessel. From the time of the decision in the case of The General Smith, 4 Wheat. 438, the supreme court has held in numerous cases that no lien was created by the maritime law in favor of material-men supplying domestic ships in their home ports. In respect to demands of this description, "the case is governed," says the supreme court, "altogether by the municipal law of the State, and no lien is implied unless it is recognized by that law." 4 Wheat. 438; Peyroux v. Howard, 7 Pet. 324. It is further held that when such liens were recog nized by the State law, they might be enforced in the district courts, according to the course of admiralty. The 12th rule in admiralty, adopted by the supreme court in 1844, expressly provides that proceedings in rem shall apply to cases of domestic ships where by the local law a lien is given to material-men for repairs, supplies, and other necessaries." No recognition could therefore be more emphatic of the constitu"tionality of the State laws creating liens of this description, and of the jurisdiction of the federal courts to enforce them. The distinction too, between the rights created by the State law, and the remedy afforded by it, was also |