HOUGH, District Judge. The one question of fact here presented is whether the Sikh, upon arrival at Baltimore from Kobe, did or did not deliver to libelants the quantity of matting set forth in the bill of lading on which this action is based.

The matting in question had been on the sailing ship Ropes, which after injury by storm put into Kobe and there transshipped her cargo to the Sikh. The bill of lading issued for the matting owned by libelants recites in usual form the receipt in apparent good order and condition of "29,641 packages only." It declares in terms that this is "transshipment cargo; steamer not responsible for marks, numbers, condition, contents, or loss of market through overcarriage." It also states specifically that "9 rolls less (are) in dispute, ship not responsible for short delivery," and concludes with the words out of which this litigation has arisen, viz.:

"This bill of lading, if signed by the master or his authorized agent, shall (in the absence of fraud or obvious error) be conclusive evidence against the carrier of the quantity of cargo received as stated herein."

It has not been denied in argument, and is here assumed, that the notation of "ship not responsible for short delivery" can refer only to the 9 rolls known to be in dispute at time and place of shipment. It is amply proven that the Sikh discharged and delivered to libelants in Baltimore less than "29,641 packages" by 170 rolls; and it is also proven that careful tally was made of this cargo as it came on board at Kobe, and that no opportunity for theft or destruction of cargo was afforded on 'the voyage.

I am satisfied on the testimony that there was error in the count at Kobe, that all the goods taken on board were delivered, and that the sole question in this case is whether, under the quoted language of the bill of lading, the ship is bound to libelants for the difference between the amount receipted for and the amount proven to have been delivered, less the 9 rolls in dispute, to wit, for 161 rolls of matting. The general nature of a bill of lading in respect of impeaching its accuracy (like any other receipt) is sufficiently set forth in The Willie B. Sandhoval (D. C.) 92 Fed. 286. But it may be"agreed that the statement of quantity in the bill of lading shall be conclusive, and if so the shipowner is bound by it, unless he can show fraud, although the goods have not been shipped, and though the master, in giving the bill of lading, may have made a mistake as to the owner's obligation." ver, Carriage by Sea (5th Ed.) § 69b.

Car

In support of this the learned author cites the two cases relied upon by libelants herein, viz.: Lishman v. Christie, 19 Q. B. D. 333, and Mediterranean, etc., S. S. Co. v. Mackay, 1 K. B. (1903) 297. The effect of special obligations regarding quantity embodied in a bill of lading has also been considered in Sawyer v. Cleveland Iron Mining Co., 69 Fed. 211, 16 C. C. A. 191, and the fairness and utility of such stipulations fully justified in the words of Rhodes v. Newhall, 126 N. Y. 574, 27 N. E. 947, 22 Am. St. Rep. 859.

From these cases, as well as upon the reason of the matter, it seems to me clear that, were it not for the exception of "obvious error" (no fraud being suggested), the ship could offer no defense to this claim.

As Mr. Carver has pointed out, it is the duty of the shipowner, where the recital in a bill of lading is by contract made conclusive evidence of quantity, to show fraud; and so here it is the duty of the shipowner to show "obvious error." It is not enough to show error. The error must be obvious, and the ultimate inquiry in this case is, therefore, what is the difference between "error" and "obvious error"?

It is shown that there was error-that is, mistake; but how can it be said that when (as the dispute noted on the bill of lading proves) the Kobe tallymen for ship and shipowner, respectively, believed that they had gotten within 9 rolls of a proper count, there was an obvious error of at least 161 rolls? In a considerable number of cases (see them collated in "Words and Phrases") the meaning of the word "obvious" has been considered; but none, I think, throws any more light on the matter than does the lexicographer's definition of “obvious" as "easily discovered, plain, manifest, evident."

What two tallymen in Kobe could not discover, and what required for discovery such an apparatus of inspectors, clerks, and watchmen as is revealed by the Baltimore depositions, is not, and in my opinion never was, easily discovered, plain, or manifest. If this be the case, then the parties have agreed that the bill of lading should be conclusive evidence that the Sikh took on board at Kobe 29,641 rolls of matting, less 9 in dispute.

The libelants may take a decree, with costs, and an order of reference, if the amount be not agreed upon.

In re KENNEDY TAILORING CO.

(District Court, E. D. Tennessee, N. D. July 13, 1909.)

No. 933.

BANKRUPTCY (§ 81*)-INVOLUNTARY PETITION-ALLEGATION OF ACT OF BANK

RUPTCY.

An allegation in a petition in involuntary bankruptcy that a receiver was appointed for the property of defendant because of its insolvency, by a state court named, sufficiently charges an act of bankruptcy under Bankr. Act July 1, 1898, c. 541, § 3, subd. "a," cl. 4, 30 Stat. 546 (U. S. Comp. St. 1901, p. 3422), as amended by Act Feb. 5, 1903, c. 487, § 2, 32 Stat. 797 (U. S. Comp. St. Supp. 1909, p. 1309), where the court named was one having general equity jurisdiction, and the record of the suit filed with the petition shows that the appointment was made on a creditors' bill charging insolvency as one of the grounds for asking the appointment, and does not disclose the specific ground on which it was made.

[Ed. Note. For other cases, see Bankruptcy, Cent. Dig. §§ 59, 113–118, 125; Dec. Dig. § 81.*]

In the matter of Kennedy Tailoring Company, alleged bankrupt. On demurrer to original and amended petitions. Overruled.

Shields, Cates & Mountcastle, for creditors.

Wright, Wright & Burrows, for bankrupt.

*For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes

SANFORD, District Judge. 1. The first ground of demurrer that the amended petition was not filed in duplicate, has been heretofore overruled at the hearing.

2. The second ground of demurrer that neither the original nor the amended petition states any act of bankruptcy committed by the defendant must be likewise overruled. The amended petition specifically avers that the defendant committed an act of bankruptcy in that, on May 3, 1909, because of insolvency, a receiver was put in charge of its property under the laws of the state of Tennessee in the chancery court at Knoxville under a general creditors' bill filed against it by one of its creditors. This is not the averment of a mere conclusion of law, but an averment of fact properly alleging an act of bankruptcy under the bankruptcy act. As the court of chancery of Tennessee is a constitutional court, having general equity jurisdiction, I am of the opinion that the appointment by such court of a receiver on the ground of insolvency is an appointment of such receiver "under the laws of a state" within the meaning of section 3, subd. "a," cl. 4, of the Bankruptcy Act (Act July 1, 1898, c. 541, 30 Stat. 546 [U. S. Comp. St. 1901, p. 3422], as amended by Act Feb. 5, 1903, c. 487, § 2, 32 Stat. 797 [U. S. Comp. St. Supp. 1909, p. 1309]). I find no authority holding that in order to constitute an act of bankruptcy under this section of the act, the appointment of a receiver must be made by the state court under a state statute. On the contrary, the fact that a receiver has been put in charge by a state court, although acting under its general equity power, seems to be recognized, implicitly at least, as constituting an appointment under the laws of the state, in Lowenstein v. Mfg. Co. (D. C.) 130 Fed. 1007, Hooks v. Aldridge (C. C. A., Fifth Circuit) 145 Fed. 865, 76 C. C. A. 409, and Beatty v. Coal Mining Co. (C. C. A., First Circuit) 150 Fed. 293, 80 C. C. A. 181. See, also, 1 Remington on Bankruptcy, § 151, p. 132. The case of Zugalla v. Mercantile Agency (C. C. A., Third Circuit) 142 Fed. 927, 74 C. C. A. 97, does not, as I view it, hold to the contrary; the reference in that opinion to the fact that the receiver had not been appointed under the state statute, but under the general equity power of the court, not being made with reference to the question now under consideration, but to show that the appointment of the receiver was made merely for the purpose of taking custody of the property, and not as an appointment of a receiver on the ground of insolvency under the state statute.

Neither is the averment of the petition alleging the appointment of a receiver on the ground of insolvency, controverted by the order of the chancellor exhibited with the petition. It is probably true that if the chancery record exhibited with the petition showed affirmatively on its face that the receiver was not appointed on the ground of insolvency the averment in the bill would be controlled by the exhibit, and, as the order of the chancery court showing the ground of the appointment could not be contradicted by other proof, a demurrer would lie to the petition under the doctrine of the Zugalla Case. However, this doctrine, I think, does not apply to the present case, for the reason that the chancery record in the present case does not show, as the record in the state court did affirmatively show in the Zugalla Case when construed

as a whole, that the appointment was not made on the ground of insolvency. In the present case the chancery bill specifically alleged insolvency as one of the grounds for the relief prayed, and the order of the chancellor appointing the receiver does not show on its face the ground upon which the appointment was made. It is, however, settled by the weight of authority that, where the order of the state court appointing a receiver does not show the ground upon which it is made, extrinsic evidence may be introduced to establish that fact. Hooks v. Aldridge, supra; Loveland on Bankruptcy (3d Ed.) § 54, p. 202. And in Re Spalding (C. C. A., Second Circuit) 139 Fed. 244, 247, 71 C. C. A. 370, 373, the court said:

'if the court had merely appointed a receiver, without reciting the grounds of its judgment, the record could have been referred to, or the grounds shown by evidence aliunde. Russell v. Place, 94 U. S. 608, 24 L. Ed. 214; Davis v. Brown, 94 U. S. 428, 429, 24 L. Ed. 204." See, also, 1 Remington on Bankruptcy, § 158, p. 134.

Furthermore, the case comes within the bankruptcy act if insolvency was one of the substantial reasons for the appointment of a receiver, even although there may have been other reasons. Hooks v. Aldridge, supra; Beatty v. Coal Mining Co., supra. In Beatty v. Coal Mining Co., where the bill under which the receiver was appointed was very similar to the chancery bill in the present case, the court said:

"The statutes of bankruptcy being practical statutes, we have no doubt they are satisfied if the superior court did in fact appoint a receiver on the ground of insolvency, either as the sole ground of its proceeding or in a mixed case under the circumstances which we have explained."

The bankruptcy act furthermore draws no distinction between temporary and permanent receivers, but makes the simple fact of a receiver having been placed in charge of the defendant's property on the ground of insolvency an act of bankruptcy. Under this section it was said in Blue Mountain Iron & Steel Co. v. Portner (C. C. A., Fourth Circuit) 131 Fed. 57, 65 C. C. A. 295, that to hold "that the bankruptcy act requires permanent receivers to be appointed would be to read into the statute something the lawmaking department-Congress-did not see proper to put there."

It is therefore not necessary to determine at this time whether the chancery record exhibited with the petition, when taken as a whole, supports the averment of the petition that the receiver was appointed on the ground of insolvency. It is sufficient to say that it at least does not contradict that averment, and that if the record, taken as a whole, does not show the ground of appointment, extrinsic evidence could be introduced, under the authorities, to establish the ground upon which the appointment was in fact made.

It therefore follows, in view of the unqualified averment in the petition, that the demurrer must be overruled. An order will be entered accordingly.

UNITED STATES v. MONTPELIER & W. R. R. R.

(District Court, D. Vermont. January 26, 1910.)
No. 9.

RAILROADS (§ 254*)-SAFETY APPLIANCE ACT-VIOLATION-ACTION FOR PEN

ALTY.

The use by a railroad company of a switch engine having no "uncoupling levers" does not subject it to the penalty imposed by Act March 2, 1893, c. 196, § 2, 27 Stat. 531 (U. S. Comp. St. 1901, p. 3174), for using a car "not equipped with couplers coupling automatically by impact and which can be uncoupled without the necessity of men going between the ends of the cars," in the absence of proof that such levers are necessary to enable such engine to couple to cars by impact, and especially where it is shown that it can be uncoupled without the necessity of going between it and the car to which it is coupled.

[Ed. Note. For other cases, see Railroads, Cent. Dig. § 766; Dec. Dig. § 254.*]

Action by the United States against the Montpelier & Wells River Railroad. Judgment for defendant.

Alexander Dunnett, U. S. Atty.
H. C. Shurtleff, for defendant.

MARTIN, District Judge. This action is brought by the United States against the defendant to recover the penalty for the alleged violation of the safety appliance act (Act March 2, 1893, c. 196, 27 Stat. 531 [U. S. Comp. St. 1901, p. 3174]), as subsequently amended. The parties have waived a jury and submitted an agreed statement of facts as follows:

"The defendant used on its line of railroad one locomotive engine, to wit, its own No. 3, to haul Grand Trunk car No. 27497 from the yards of the Central Vermont Railway Company to the mill of E. W. Bailey & Co. in Montpelier, Vt. Said hauling was done on April 22, 1908, after 11 a. m. Said car contained corn which had previously been billed from Tiffin, Ontario, to said E. W. Bailey & Co. at Montpelier, Vt., but said billing did not include any haul over the line of the defendant or any part thereof, nor did the defendant get any portion of the through freight charges on said corn from Tiffin to Montpelier. Said car of corn arrived at the Central Vermont Railway yards in Montpelier at 9:25 p. m., April 21, 1908. Early on the morning of April 22, 1908, one of the firm of said E. W. Bailey & Co. went to the Central Vermont freight station, as was his custom, and got the waybills of some cars of freight that had arrived the night before, including that of the car in question. This was done before the defendant had hauled the car. By arrangement between the defendant and said E. W. Bailey & Co., said Bailey & Co. give to the defendant's yardmaster the numbers of such cars as they wish placed at their mill from time to time, and the yardmaster places them accordingly, said Bailey & Co. paying the defendant their regular switching charges therefor. On the day in question, April 22, 1908, said Bailey & Co. gave defendant's yardmaster the number of the car in question, and said yardmaster caused said car to be placed at the mill of said Bailey & Co., a distance of about 50 rods over its track, using said locomotive engine No. 3, which at that time had no uncoupling levers on it, but said car could be uncoupled from said locomotive engine by means of the uncoupling lever on said car without the necessity of any man going between said car and said locomotive engine. Defendant received their regular published switching charge *For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to late, & Rep'r Indexes