Hibernia Ins. Co. v. St. Louis & New Orleans Transp. Co.

• Decision Date: 09 March 1882
• Citation: 10 F. 596
• Parties: HIBERNIA INS. CO. v. ST. LOUIS & NEW ORLEANS TRANSP. CO. [1]
• Court: U.S. District Court — Eastern District of Missouri

10 F. 596

HIBERNIA INS. CO. v. ST. LOUIS & NEW ORLEANS TRANSP. CO. ^[1]

United States Circuit Court, E.D. Missouri.

March 9, 1882

O. B Sansum and George H. Shields, for plaintiff.

Given Campbell and Thomas J. Portis, for defendants.

TREAT D. J.

The Babbage Transportation Company, by different contracts of affreightment with different shippers, undertook to transport to New Orleans certain merchandise specified. Said merchandise was shipped at different times on different barges, which were towed by different steamers. It is averred that the same, respectively, was damaged or lost through the negligence of said transportation company, under entirely different circumstances. There is no averment that judgment in rem or in personam was ever in admiralty or at common law had, but that the plaintiff, as insurer, paid the amount of the respective losses, and, being thereby subrogated to the rights of the respective shippers, can maintain the cause in equity before recovery had on the original demands. The bill avers that, after said cause of action accrued against the Babbage Transportation Company, said company transferred fraudulently to the other defendant company all of its boats barges, etc., and that Lowery, being president and principal stockholder, caused said transfer to be made. The prayer of the bill is for a decree as for a moneyed judgment against the defendants, also to charge the property transferred as aforesaid with a lien in plaintiff's favor therefor, and for an injunction pendente lite against the further sale or transfer of said property.

It is obvious that if this mode of proceeding can be upheld the court will have primarily to ascertain whether the Babbage Company, as owner of the respective barges or steamers, was liable for the alleged losses. In admiralty, if a loss occurred as charged, the shippers had their appropriate remedy in rem or in personam, with a resultant lien in rem on the barges and steamers involved, or, at common law, actions on the different contracts of affreightment. The rights of the shippers would pass to the insurers by subrogation. No such legal proceedings, however, have been had. The plaintiff is merely a creditor at large as to two separate demands requiring distinct trials. Of course, two such demands could not be united in an action in rem in admiralty, because the transactions and the vessels were different. Whether they could be united in personam it is not necessary to discuss, but in equity such joinders are frequent. The right to joint the two demands must rest, then, upon the allegations as to the fraudulent transfers, the same having been made with knowledge of the plaintiff's claims, and impliedly to defeat the same.

By what rule was that property or the vendee thereof charged with the unascertained obligations of the vendor? It must be, if at all, because said transfer was a mere fraudulent scheme to deprive the plaintiff of his rights against said property. But he had no distinctive right against any other than the guilty res respectively; certainly no lien upon all the property of the owners prior to a judgment in personam in admiralty, or upon execution levied subsequent to judgment at common law. It is true that under exceptional circumstances courts of equity have lent their aid to creditors at large, and generally when the property sought to be charged was already in the custody of the court by force of a trust, receivership, etc.

The case of Garrison v. Memphis Ins. Co. 19 How. 312, can hardly be considered as fully sustaining the plaintiff's proposition, although, from the imperfect statement of that case, it would seem to be held that because an insurer is in equity subrogated to the rights of the insured, he may before judgment at law proceed to enforce his demand against the owners of a vessel. The cases cited in that opinion do not go to the length here claimed; for the court only insists upon the rule whereby the insurer, subrogated to the rights of the insured, may enforce the lien on a judgment recovered by the insured, and 'may apply to equity whenever an impediment exists to the exercise of his legal remedy in the name of the assured. ' To those familiar with the common-law practice then prevailing to a large extent, the true meaning of that expression by the court is clear. In that case there were 11 contracts of affreightment dependent on the construction each was to receive-- the disaster being one and the same-- and, to avoid multiplicity of suits, embraced in one bill.

In Case v. Beauregard, 99 U.S. 119; S.C. 101 U.S. 688, a fuller exposition of equitable principles is given. The same case was twice before the united States supreme court substantially, and the views expressed in 101 U.S. 688, are especially instructive. The first bill was dismissed because, as the court says, 'it was not averred that judgment at...