THE AJAX

• Decision Date: 20 August 1929
• Citation: 34 F.2d 45
• Parties: THE AJAX.
• Court: U.S. District Court — District of Maine

34 F.2d 45 (1929)

THE AJAX.

District Court, D. Maine, S. D.

August 20, 1929.

Herbert J. Connell and Nathan W. Thompson, both of Portland, Me., for libelant.

Frederick R. Dyer, of Portland, Me., for intervener.

PETERS, District Judge.

The Fidelity Trust Company, by assignment from the original mortgagee, became the owner of a preferred mortgage for some $33,000, given by the P. H. Doyen Company, a corporation, in October, 1925, covering the steam lighter Ajax. The mortgage not having been paid, the trust company brought this libel to foreclose it, and the lighter was seized in October, 1928, subsequently sold, and the proceeds of the sale paid into court. After this had occurred Philip H. Doyen, Jr., filed a petition to intervene, which was granted, and claims a prior lien on the lighter for balance of wages, amounting to $8,491, alleging that he had served as hoisting engineer on the vessel from October, 1921, to October, 1928, when the vessel was seized, at wages of $150 per month, a part only of which had been paid. It is not claimed by the plaintiff that the amount due Doyen, Jr., from the Doyen Company is not substantially as stated, but it is vigorously contended that Doyen, Jr., has no rights which he should be allowed to assert as against the mortgagee, an innocent third party without notice.

It appears that when this mortgage was given, and for some time previously during financial dealings between the Doyen Company and the United States Trust Company, predecessor in title to the plaintiff, Doyen, Jr., was clerk and director in the Doyen Company, a corporation owned exclusively by the Doyen family, the senior Doyen being the principal owner and manager, his wife and this son being the only other directors besides himself. Only one share of stock was issued to the younger Doyen, evidently to qualify him as director. I find nothing in the contention that he was not actually a stockholder (and therefore not a legal director), on the ground that the certificate had not been detached from the stock book. The certificate could have been taken at any time by young Doyen, and he acted as director by participating in meetings of the board.

When the mortgage in question was authorized by the directors, young Doyen was present at the meeting as a director and acting as such, according to the record and according to the best recollection of young Doyen himself. At that time, when the United States Trust Company advanced $33,600 to the Doyen Company and took a 60-day note secured by a preferred mortgage on the lighter, young Doyen, according to his claim, had a large amount due him for wages. If he had any intention of claiming a maritime lien for this, he should have disclosed the fact to the trust company before he and his father and mother as the other directors permitted the trust company to advance to them this large sum on a chattel mortgage. It is not correct to say that a director can never have a lien on the corporate floating property, but it is unquestionably true that his claim to it cannot be allowed under the circumstances as stated. The general principles of estoppel, as well as the reasoning in cases in this district and elsewhere, cited by counsel for plaintiff, prevent this. The Frank Brainerd (D. C.) 3 F.(2d) 664; The Queen of St. Johns (C. C.) 31 F. 24; The Morning Star (D. C.) 1 F.(2d) 410.

The same principle is indirectly involved in the attempt of the intervener to take all payments made to him during the seven years his account has been running and apply them to the payment of that part of his bill that was incurred prior to the date of the mortgage. This would be simply paying the invalid part of the lien claim at the expense of the...