In re Alaska Fishing & Development Co.

• Decision Date: 24 February 1909
• Docket Number: 627.
• Citation: 167 F. 875
• Court: U.S. District Court — Western District of Washington
• Parties: In re ALASKA FISHING & DEVELOPMENT CO.

167 F. 875

In re ALASKA FISHING & DEVELOPMENT CO.

No. 627.

United States District Court, W.D. Washington.

February 24, 1909

Chas Bedford, for bankrupt and for William Johnson and Roger R Vair, creditors.

Hughes McMicken, Dovell & Ramsey and Edward C. Hanford, for Puget Sound Tugboat Company, a creditor.

L.B. da Ponte, for National Bank of Commerce, a creditor.

F. H Kelley, for trustee.

HANFORD District Judge.

In the fishing season of 1907, the bankrupt corporation had a fishing station in Alaska, where it was engaged in catching salmon and other kinds of fish, and preserving them by salting and putting them up for market in barrels, and it owned and used in that business the barge Enoch Talbot, a vessel without masts or sails or other power of propulsion. At the close of the season the barge, with the season's catch on board, was towed from the fishing station to Tacoma by the steam tug Pioneer, a vessel owned and operated by the Puget Sound Tugboat Company. The corporation appears to have had little, if any, working capital, and it failed to secure a sufficient quantity of fish to equal in value the expenses of the year's operations, and when the barge arrived at Tacoma it had no money to pay for services of the tug, or wages of the barge crew or fishermen or other employes. The wages and some other debts of the corporation and incidental expenses were paid through an arrangement between the managing agents of the corporation, and the captain of the barge, and William Johnson, whereby a broker advanced the money to make said payments, and was reimbursed out of the proceeds of the sale of part of the salt fish, which were taken out of the barge and delivered to Johnson, and then delivered to the purchasers. The bill for towage has not been paid, and the tug's owner claims to have had a maritime lien on the barge and cargo. Before that part of the cargo not sold, as stated, had been unloaded from the barge, a receiver appointed by the superior court of the state of Washington for Pierce county took possession of the barge and employed watchmen. Soon afterwards this proceeding in bankruptcy was initiated by creditors of the corporation, and the same person who was acting as receiver under appointment of the state court was by this court appointed receiver, and thereafter the property was in his custody, as receiver of this court, until it was surrendered by him to the trustee of the bankrupt's estate, chosen in conformity to the bankruptcy law, after the corporation had been adjudicated a bankrupt. During the period of the receivership, a watchman previously employed by Johnson was to some extent looking after the property, and by reason thereof Johnson claims to have had possession of the cargo remaining in the barge as owner thereof. On a showing that there was five feet of water in the hold of the barge, and that it was necessary to discharge the cargo and repack and resalt the fish to prevent deterioration thereof, the receiver obtained from this court authority to borrow money necessary for expenses in the care and preservation of the property, including wages of watchmen, and he did borrow $1,223 from the National Bank of Commerce, on receiver's certificates, and expended the same in payment of such expenses. Johnson made no application to this court for an order directing the receiver, or the trustee, to surrender possession of the fish, and made no opposition to the doings of the receiver in repacking and resalting the fish, nor to the surrender of the fish to the trustee of the bankrupt's estate, although he had timely information of these proceedings through his watchman and his attorney.

The trustee sold the barge and the fish for a gross sum pursuant to a stipulation signed by attorneys representing all the parties, and the purchase money constitutes the fund to be distributed. By the terms of the stipulation, whatever liens and rights could have been lawfully asserted against the property before it was sold by the trustee are deemed to have become attached to the money which the trustee holds, and, the amount being sufficient to discharge all such claims by paying them in full, it is necessary for the court to determine the priorities.

Johnson appears to have provided the materials for construction of the barrels, in which the fish were packed, and the salt, and to have paid to the bankrupt corporation $5,000 on a contract by which the corporation agreed to fill 2,000 barrels and deliver them to him on a wharf at Tacoma. On these facts and his alleged possession of the fish, Johnson bases a claim as owner of the fish which were sold by the trustee. He also claims a first lien on the fund by right of subrogation, on the alleged ground that the money expended in payment of wages of seamen and others was his money.

The first of these claims is not tenable, because the executory contract for future delivery of fish in barrels at Tacoma was not effective to vest any title to or right of property in fish which had not been caught, and the fact that the fish were still in the hold of the barge when a receiver of this court took possession of them proves conclusively that no sale had been consummated by delivery. Johnson had no lawful authority to seize the barge or place a keeper in charge of it, nor to obstruct judicial process. Nor did the bankrupt corporation or the captain have any right to impair the rights of other creditors, under the bankruptcy law, by surrendering the barge to him. In the proceedings before the special master, reference was made to a bill of sale, but no bill of sale was produced, nor was there...