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Bushey v. Corporation.

February 27, 1948

IRA S. BUSHEY & SONS, INC.
v.
W. E. HEDGER TRANSP. CORPORATION.



Author: Clark

Before SWAN, CLARK, and FRANK, Circuit Judges.

CLARK, Circuit Judge.

This is a later stage of a case previously before us and reported as W. E. Hedger Transp. Corp. v. Ira S. Bushey & Sons, 2 Cir., 155 F.2d 321. That appeal involved solely a question of jurisdiction. Hedger, the owner of tugs and vessels subject to a preferred ship mortgage, had consented to a decree of the district court, March 8, 1945, foreclosing the mortgage. Then on April 4, 1945, it instituted a suit by summons and complaint asking for the vacation of the consent decree, an accounting, damages, and other relief. The district court dismissed this suit for lack of jurisdiction, holding that its powers would be limited to consideration of a libel in review, to the exclusion of a "bill in equity to nullify the consent decree and to recover damages." This court agreed with the lower court on the issue of substance, holding that its powers were restricted by the limitations of federal jurisdiction to what it could appropriately do on a libel in review or, within the term, a petition to vacate the decree; it differed with the district judge as to the procedure, however, since it thought that the so-called complaint would actually fulfill all the functions of such a libel or petition. Accordingly it affirmed the decree so far as that dismissed a claim of a third individual (Hedger individually), but reversed it as to the Hedger Company and directed that the complaint be considered a petition in the foreclosure suit to vacate the decree. It did, however, exclude therefrom certain claims for damages for abuse of process and for repayment of sums paid under a mutual mistake of fact (Arts. 67-69 of the complaint) as not being within the admiralty jurisdiction. It expressly refrained from passing upon the legal sufficiency of the complaint as a petition for the purposes stated.*fn1

Upon the going down of the mandate the district court transferred the case from its equity docket to the admiralty docket as a part of the former foreclosure case. Then it set the case for a hearing before the same judge who presided at the foreclosure hearing. He heard the parties and thereafter dismissed the complaint for legal insufficiency, writing a lengthy opinion, 70 F.Supp. 578. Respondent then filed a motion to expunge this opinion on the grounds that there was no motion regularly before the court and that the judge was disqualified, since he had conducted the original foreclosure hearing. This was heard and denied by another district judge. Next respondent filed a motion to vacate the decree, which was heard and denied by the original judge upon consideration of a further brief from respondent. This appeal is from not only the original decree of dismissal, but also the two further orders denying respondent's motions.

The substantial question on this appeal is whether the "complaint," now become a petition to reopen and vacate, is sufficient in law, or more particularly whether it shows a legal basis for vacating a formal decree of the district court. True, respondent also states, without argument, its contention that it was denied due process of law by reason of the disqualification of the judge and the latter's treatment and dismissal of the petition. But in any event we can see no error here if the judge's main legal conclusion was and is sound. The mandate of this court directed certain actions by the district court, and no motion of the parties was necessary to stimulate the judge to obedience.We see no ground of disqualification in that the issue was referred to the judge who should know most about it - a course which seems sensible and is not a statutory ground of disqualification. 28 U.S.C.A. § 24. Nor are we cited to precedents otherwise. Compare Frank, Disqualification of Judges, 56 Yale L.J. 605 et seq. And the judge certainly allowed respondent full opportunity to present its legal claims, as we are doing on this appeal. We are sure that respondent has been deprived of no constitutional or other rights by the course the proceedings have taken, and we pass therefore to the substantive issue decided below in libellant's favor.

The petition is long and detailed, containing seventy-one paragraphs or Articles, of which, as we have seen, three have been eliminated on the previous proceedings. It also contains seven prayers for relief. Not unnaturally for so lengthy a document it tends to be both verbose and abstract and conclusory in its allegations. Nevertheless, the main gravamen of the petition, as we pointed out in the earlier appeal, can be discovered; and we are now aided by the complete record of the earlier hearing. Respondent complains because the trial judge in his opinion regretted the absence of these records before the court on the earlier appeal, "as they will be in an appeal from this decision," 70 F.Supp. 578, 581, saying that this constitutes an admission that the judge considered proceedings in the foreclosure action. But he would have been remiss in his complete consideration of the case had he not done so to the extent that they were relevant. It is of course thoroughly settled that the court takes judicial notice of its own records, particularly in the very case;*fn2 and it is hard to see how a petition to vacate a decree can be intelligently appraised without examining the circumstances under which the decree was entered. Here the transcript of the earlier hearing adds life and color to what doubtless would be apparent from the more formal documents of record and furnishes the background against which this quite remarkable claim must be viewed.

The proceedings began in a normal way in the district court on February 10, 1945, with a libel for a foreclosure of a preferred ship mortgage and the issuance of process in rem against the vessels. This is not only usual, but is also the only way of proceeding in the case of these mortgages, which since 1920 have been brought within the exclusive jurisdiction of admiralty. 46 U.S.C.A. § 951, providing for enforcement "by suit in rem in admiralty," with original jurisdiction granted "to the district courts of the United States exclusively."*fn3 After citation and notice to the Hedger Company, the owner and respondent-appellant here, the latter on February 21, 1945, filed its answer, in which, while it admitted the execution of the preferred mortgage of March 21, 1939, it denied that it received good and valid or adequate consideration for the notes secured, as well as "any present obligation to pay any sum of money or interest to the libellant." It then went on to state in some detail its defense which again figures prominently in the present proceedings. This grows out of an asserted joint venture between the Hedger and Bushey interests beginning on July 30, 1932, from operation of the Hedger boats, purchased upon foreclosure by the New York Scow Corporation, a bushey subsidiary, and then subjected to a mortgage of about $155,000 to a third party. The Hedger Company was formed to operate the vessels and to pay off the indebtedness. According to respondent's assertions a large sum of money had been paid from the earnings by the 23d day of December, 1938, but the Bushey interests then represented to Hedger that there was approximately $400,000 due on open account and that certain other boats should be purchased for $200,000, with the result that certain transactions were had by which the Hedger Company gave the mortgage in question to the Scow Corporation on March 21, 1939, for $600,000, $400,000 representing the amount claimed for barge and tug hire and repairs, and the balance the purchase price of the additional vessels. It was asserted that these amounts were not due, although Hedger was unable to obtain an accounting from the libellant, now assignee of the mortgage. Further, it was said that on December 21, 1944, the Hedger Company and Hedger individually had brought an action in the Supreme Court of the State of New York against the Bushey interests to compel an accounting. The answer concluded with not only general prayers for dismissal of the libel, for damages, and for other and further relief, but specific prayers that the action be deferred until the conclusion of the state court action, that a joint receiver with Hedger be appointed under 46 U.S.C.A. § 952 to operate the vessels, and that, if the court determined that it would proceed in this action without regard to the state court action for an accounting, then the matter be referred to a special master for an accounting between the parties.

No attempt having been made by respondent to secure release of the vessels, permitted by filing a bond or security pursuant to the statute, 28 U.S.C.A. § 754, Admiralty Rule 12, 28 U.S.C.A. following section 723, or the local rule, E.D.N.Y. Admiralty Rule XXI, the libellant took steps to ask for an immediate hearing, which the court proceeded to grant. This was also in accordance with a local rule to avoid long and expensive custody of many vessels, here 32 in number, by the United States marshal. Respondent, however, made extensive efforts to delay the hearing, by direct application, by filing exceptions to answers which the libellant had made with promptness to its interrogatories, by asking for preliminary hearing on such exceptions, and so on. This is a significant feature of this case in connection with respondent's main contention on this appeal, namely of coercion through libellant's abuse of process. The normal form of such duress is by steps taken to prevent a litigant from reaching a court to protect his interests. Here the situations are reversed. At all times the party accused of the abuse is endeavoring to get before the judge and to have the case thoroughly heard, while the party who claims to be the victim has strenuously opposed such judicial hearing.

In any event the court did set the trial for March 7, 1945, and it began on that day before Judge Byers. The record of the hearing discloses how thoroughly the points at issue and the respective positions of the parties were explored with the judge. An opening statement on behalf of the libellant called attention to much of the dispute, with a direct statement of the state court action for an accounting. Libellant's counsel pointed out that of the original $600,000 mortgage there was a forgiveness of about $290,000, and an application of payments out of earnings reducing the sum until, as it was asserted, the parties agreed in 1944 that it was $115,000, which was covered by installment notes, of which the failure to pay one then due had led to the proceedings. Then respondent's counsel in his opening statement immediately went back to the joint venture starting in 1932 and made his general position quite dramatically clear. Thus he said, among other things, that the Hedger interests had turned over to Bushey over $1,000,000 in cash and property during the period, and that "Mr. Bushey and his associates have been milking the Hedger Company and Mr. Hedger for some twelve years and had them right by the scruff of the neck where they could not help themselves because of the various amounts that they claimed to be owing at that time." As a result of this fairly extensive discussion the court said to respondent's counsel: "In other words, you claim that the amount said to be due is not due?" and receiving the answer, "That's right," made the rather natural response: "Then it seems to me, my duty to go ahead and take testimony." Counsel agreed, but stated he was not prepared to go ahead with all his evidence that day, to which he received the courteous response from the court that "you may be assured that you are not going to be forced. I have tried to make that clear."

But before going to the testimony respondent's counsel went on to say that he had tried to tender the amount due in order to have the boats released, so that they would not be idle and held up, and to allow the accounting issues to be tried either later in the federal action or in the state court. In reply, libellant's counsel stated his willingness to accept an adequate tender, but asserted that the tender was never accompanied by the production of the money and was always conditioned by a demand for a full release of the mortgage. There ensued a long discussion among court and counsel thoroughly exploring issues which respondent would now reopen. As it turned out, the parties had little or no dispute as to the amount to be covered by the tender. In its libel, libellant had claimed the sum of $73,766.66, which included $60,700 indebtedness, interest, and attorneys' fees, the latter set at $10,000. The amount offered by respondent, and which in fact became the basis of settlement, $69,491.56, was upon the same basis, with the single modification of a reduction of the attorneys' fees by one-half.

On the other hand, the real dispute at this time was as to the form and circumstances under which the tender should be made, in the light of its possible legal effect upon the issues in litigation between the parties. Respondent repeatedly sought an agreement for acceptance of the tender and complete release of the mortgage security, together with a reservation of all its asserted rights to be tried out later in the accounting between the parties. This libellant resisted, making the formal objection that there had been no actual or unconditional tender of the money and explaining further that acceptance of anything but an unconditional tender would prejudice it from asserting what it felt to be its full rights on an accounting. It had already served notice of an intention to amend its libel to claim approximately $25,000 more asserted to be due on further installment notes; and it said that the results of a full accounting might well be not a reduction, but a substantial increase, or the claim. During the course of the hearing the judge also explored the possibility of a bond or deposit of the money as security. Nevertheless respondent continued to assert its position that any security furnished should be a complete substitute for the vessels, though with all its rights reserved; and libellant stood on its contention that any such security, not offered as payment of the indebtedness, should cover also the additional amount it was prepared to claim. It appeared, however, that respondent was prepared to obtain the money represented by its offer from a bank whose counsel was in attendance at the hearing, the money to be advanced on release of the mortgage, thus making the vessels available as security to the bank.

The court adjourned the discussion over the noon recess in order to afford the parties an opportunity for adjustment. But since that did not occur, the court accepted the inevitable consequence for which the libellant was asking, namely that the trial must proceed. Respondent objected that a trial would be a long drawn-out affair, but was disputed by libellant's counsel, who wondered "if it would take more than a half hour. The libellant's case will go in in ten minutes." But the court directed the trial to proceed, and the libellant proceeded with its testimony, with the original mortgage received in evidence as Libellant's Exhibit 1.

At the point respondent's counsel requested a recess for a conference with his client.Then after a short recess he made an unconditional tender, which libellant agreed to accept as such, giving satisfaction pieces on receipt of the money. The case was then adjourned until the next morning in order that the money might be produced at the Customs House, where the mortgage had been recorded and the satisfactions were to be recorded. When the hearing was resumed the next morning, respondent's counsel stated that they were ready "to have your Honor sign a decree under our tender of yesterday afternoon." A colloquy disclosed that satisfactions were being held in the Customs House, together with the mortgage, to await a consent decree, after which the money would be paid and the releases given. Respondent's counsel thus specifically requested the signing of the decree, which, indeed, carries the endorsement of his consent, as well as that of the proctors for the libellant. This decree orders recovery of the sum of $69,491.56 "from the barges attached herein and the respondent" and release of the attached vessels upon payment of this amount and of all clerk's and marshal's fees. Payment was then made, the satisfactions were given, and the vessels were released.

When the complaint or petition was filed less than a month later, it repeated the contentions of respondent's answer as to the joint venture in essentially the same language. Then it alleged duress on the part of libellant, in that the latter, knowing of respondent's financial needs and the necessity of keeping the boats in operation, particularly because of important pending contracts, forced respondent to pay the sum stated to secure the release of vessels reasonably worth in excess of $250,000. It should be noted that respondent does not seriously criticize the original institution of the foreclosure action. It could hardly do so in view of the exclusive nature of the remedy in admiralty to enforce a preferred ship mortgage. Certainly realization upon the security of such a mortgage cannot be defeated by the mere device of institution of a state court action covering somewhat the same ground.*fn4 The claim of duress is, however, for the pressure exerted by libellant to have the hearing proceed until and unless the money were paid. That is the sum and substance of the case. It should be noted that the court never did get to the questions of appointing a receiver or a special master or of granting any of the special relief requested in respondent's answer. We do not now know how much of this might have been granted had the hearing proceeded. Respondent finds something coercive in libellant's reference to its further claim of approximately $25,000; but there seems nothing illegal or improper in a statement by libellant of its utmost claims to the judge. Certain general allegations that the libellant was attempting to stir up other litigation against respondent are removed from this case by our previous holding as to the restrictions of admiralty jurisdiction. Hence we have the single bare point whether libellant's action in pressing the libel to trial before Judge Byers until respondent actually produced and paid the money unconditionally was such "economic duress" as to justify the almost immediate upsetting of the formal court decree.

Here the main gist of respondent's argument is that libellant was acting oppressively in asking unconditioned payment and refusing to accept the money in place of the vessels while the issue as to the fact or amount of indebtedness was being litigated later. Respondent cites and relies upon the well-established principle that security given to release a vessel arrested in admiralty proceedings in rem takes the place of the res for all purposes and hence does more than merely restore possession of the vessels. United States v. Ames, 99 U.S. 35, 25 L. Ed. 295; The Susana, 4 Cir., 2 F.2d 410; The Fred M. Lawrence, 2 Cir., 94 F. 1017, 1018; J. K. Welding Co. v. Gotham Marine Corp., D.C.S.D.N.Y., 47 F.2d 332; The Morning Star, D.C.E.D.N.Y., 5 F.Supp. 502; 2 Benedict on Admiralty, 6th Ed. 1940, § 378; 25 Col.L.Rev. 665. How far this principle is applicable to proceedings under the Ship Mortgage Act has not been determined, though we recognize the force of respondent's legal contention.*fn5 Even so, we do not see how it helps respondent here. If sound, it meant that the vessels were available as security for a bank loan to provide either a deposit or payment. That would leave as the only proper dispute between them at this time the amount of the security in this light of libellant's proposal to amend its demand if the amount due was to be later litigated. How far in addition libellant was prepared to controvert respondent's claim of law never became clear; for the issue remained academic in the absence of any actual tender of security by respondent. Libellant's continued emphasis upon the amount of the bond and a not wholly unnatural failure to distinguish in the discussion between release of the security and release of the debt might indeed suggest that it was not prepared to refuse a substitution of fully adequate security. But the important point is that libellant at most asked only for its asserted legal rights or alternatively for the immediate hearing which the court stood ready to give. Libellant is hardly to be charged with duress for merely stating its claims in the presence of a court ready to afford complete protection against injustice or overreaching. Nor is the court to be charged with a callous disregard of the respondent's rights in its quite patient exploration of the alternatives of bond, deposit, payment, trial, followed by its direction for the hearing to proceed as the only way of settling the conflicting claims and ultimately by its acceptance at face value of the respondent's settlement and request for a final decree upon consent.

It is therefore quite clear that this was no real case of duress. Rather, it was upon the part of the respondent a choice of strategy or tactics. Admittedly and expressly the parties were determining their immediate actions at the hearing in the light of the effect of such actions upon the pending accounting wherever that might be held. Faced with the alternative of immediate settlement of the accounts, respondent deliberately chose to procure a postponement by meeting the legal conditions set by libellant. Having chosen this strategy, respondent should abide by it and not try to overturn, within a month after rendition, a formal court decree which it itself had sought for the purposes it had immediately in view. How far its strategy may permanently prejudice or reduce its further claims in its pending state court action is not for us to attempt to say.There involved are other debts and other mortgages, as well as the whole series of transactions long antedating this present mortgage. It is obviously the task of that court, if the issues go to trial, to disentangle and settle all the other conflicts which divide the parties.

Nevertheless on this appeal respondent asks us to discount the history of the case as thus clearly disclosed by applying the well-known and useful rule that upon dismissal of a pleading upon motion all intendments are taken in favor of the pleader, in the endeavor to support the allegations so far as possible. The difficulty with this is that it is controlled by a presently more important, apposite, and well-settled principle of law that the petition must be read as though it included the facts of which the court takes judicial notice, even though these may be contrary to some of the allegations. Jones v. United States, 137 U.S. 202, 214-217, 11 S. Ct. 80, 34 L. Ed. 691; Greeson v. Imperial Irr. Dist., 9 Cir., 59 F.2d 529, 530; Verde River Irr. & Power Dist. v. Salt River Valley Water Users' Ass'n, 9 Cir., 94 F.2d 936, 938; Walsh v. Trustees of New York & Brooklyn Bridge, 96 N.Y. 427, 438; Masline v. New York, N.H. & H.R. Co., 95 Conn. 702, 111 A. 639; Morgan, Judicial Notice, 57 Harv.L.Rev. 269, 273; cases collected Clark, Code Pleading, 2d Ed.1947, 251. Indeed there would be little reason to the rule compelling the judge to take judicial notice of known facts (Morgan, op. cit. supra; cf A.L.I., Model Code of Evidence, 1942, Rules 801, 803; 9 Wigmore, Evidence, 3d Ed.1940, § 2583) if he must also accept contrary allegations until disproved by formal proof.

Here it is true respondent's petition contains several allegations which we do accept of libellant's intent and desire to take advantage of respondent's known financial stringency. But on the crucial issue whether this was illegal or improper, the allegations become vague and hesitant. Thus on the vital point as to the amount due on the mortgage there are such statements as a lack of "any or adequate" consideration for the original indebtedness; but even this indefinite charge is explained elsewhere to mean adequate consideration "beyond" various listed matters such as the original debt to a third-party mortgagee, the reasonable value of repairs, supplies, materials, labor, charter hire of and for the barges and tugs, and accrued interest. So, as to the amount due at the time of institution of the action, respondent alleges "upon information and belief" in a conclusory paragraph near the end of the petition that it did not owe libellant, but that the latter owed it, the "exact amount" being unknown for reasons stated in an earlier paragraph. But these reasons turn out to be its lack of knowledge of the accounts and transactions; that this lack was caused by libellant's agent does not change the obvious fact that the actual state of the account is at present unknown. When these allegations are read in the light of statements by counsel at the hearing we can see that this is the case as to both parties and there is a real dispute between them as to the debt. Unless we are to indulge in the melodramatic assumption (not even claimed) that respondent's counsel was then forced not even to silence, but to a concession of what he knew to be false, the conclusion that there was a properly triable issue is unavoidable.

It is also true that beyond this the petition makes much of the charges that respondent was forced hastily into what should have been a long trial before a Special Master and that libellant refused to accept either security, stipulation for value, or a tender and deliver "proper satisfactions of the mortgage." As to the first charge, it is of course true that libellant pressed for immediate trial. As we have seen, however, there was nothing improper in this, and it was the indicated and desirable course, as the judge held.Respondent could not claim, as of right, the frownedupon step of a reference (McCullough v. Cosgrave, 309 U.S. 634, 60 S. Ct. 703, 84 L. Ed. 992; Los Angeles Brush Mfg. Corp. v. James, 272 U.S. 701, 47 S. Ct. 286, 71 L. Ed. 481; Federal Rules of Civil Procedure, rule 53(b), 28 U.S.C.A. following Section 723c; Equity Rule 59, 28 U.S.C.A. § 723 Appendix); there was real doubt as to how lengthy a trial was necessary to settle the immediate matter before the court; and counsel had the judge's assurance that he would not be forced in producing his evidence. As to the second charge, respondent actually never made tender of bond, payment, or other security until the ultimate tender of payment and its acceptance. Because of this and of the uncertainty as to the law, libellant was never put to a definite choice of legal platform. The further charge that its proctors misled the court as to the law is therefore manifestly absurd. Actually libellant's counsel appear to have shown a commendable desire throughout to seek and abide by judicial settlement of the issues; it was respondent who held back.*fn6

Against this background the issues of law on this appeal seem to us both simple and clear. The Restatement of Judgments sets forth the comparatively limited grounds upon which a judgment within the court's jurisdiction and authority may be set aside. See c. 5 in general, and note § 126 for the many instances where such relief is to be denied. Of course duress preventing a party from contesting a fraudulent claim or defense is an appropriate ground for relief, § 121; but the examples cited are revealing of the kind had in mind by the restaters, as in Illustration 6, p. 592, where "A threatens to kidnap B's child if B defends the action." Further, the granting of relief is subject to the general rules of equity, §§ 127-130, and one ground of refusal is that of "contributory fault," § 129, where before or after the judgment the complainant or the person representing him "failed to use care to protect his interests," or "after ascertaining the facts the complainant failed promptly to seek redress." Here there was more than a mere failure to seek court protection; there was a deliberate choice to avoid it when the doors of justice were already open and the parties were within the temple. Such a voluntary payment cannot be duress. Radich v. Hutchins, 95 U.S. 210, 213, 24 L. Ed. 409; Brown v. Swann, 10 Pet. 497, 505, 35 U.S. 497, 505, 9 L. Ed. 508; Brown v. Buena Vista County, 95 U.S. 157, 24 L. Ed. 422; Knox County, Mo v. Harshman, 133 U.S. 152, 154, 10 S. Ct. 257, 33 L. Ed. 586; Pickford v. Talbott, 225 U.S. 651, 661, 32 S. Ct. 687, 56 L. Ed. 1240; Chase Nat. Bank v. City of Norwalk, 291 U.S. 431, 440, 441, 54 S. Ct. 475, 78 L. Ed. 894.*fn7

Respondent relies rather generally on cases of abuse of civil process by a litigant to secure an unjustified end. While the courts have shown a natural hesitancy to act broadly, for fear of depriving a litigant of those rights which the law accords him, yet there is undoubtedly a field for the operation of these principles, as acutely developed by Professor Dawson in his articles, "Duress Through Civil Litigation," 45 Mich.L.Rev. 571, 679. He is there dealing not with relief from judgments already rendered, but with a quasi-contractual remedy, which would not be a part of admiralty jurisdiction under our previous ruling. Reference may be made to these articles, however, for the very limitations they so pointedly suggest, such as that recovery should be only on the basis of unjust enrichment, pp. 577, 578, and that the gist of the duress is the preventing of resort to the protective activities of a court, p. 591 et seq., p. 685 et seq.*fn8 Thus, stress is laid throughout the articles on the lack of "opportunity to litigate." We have been cited to no case, and have discovered none, where relief is accorded a suitor who runs away from court, instead of toward it.

But reference to cases involving illegal or excessive attachments or other recognized abuses of process does have this relevancy that it highlights the sharp difference between them and the present case. Here we have no illegal or excessive attachment; we have only the enforcement of a mortgage in the way provided by law. The claimed abuse is that libellant refused to release the mortgage upon respondent's offer of payment. This was not a legal tender, and refusal of it in its tentative form or otherwise would not be an abuse of process in the light of the dispute actually existing as to the amount due. But further, libellant's counsel made clear the basis of his decision, leaving as the real crux of the case his one act of refusing the offer while it remained conditional, in order to retain the opportunity to prove the greater amount at the projected later trial. How really burdensome this claim could ever be is none too clear; apparently we are asked to assume that the bank, prepared to loan $70,000 against vessels worth more than $250,000, would advance no more.Even making this assumption we do not see how the statement of an amount as due, coupled with an expressed willingness for immediate trial as to its validity, can be a misuse of the agencies of justice. Unlike the usual precedents, we have here no attempt to avoid or prevent the effective operation of the court's protective shield. On the contrary, libellant did what it could, against respondent's opposition, to set the court processes speedily in motion. Small wonder is it, therefore, that respondent can cite no authority to support its extreme position.

Respondent has rested its appeal to us upon its claim of duress, rather than upon a claim of discretionary power in the court to revise a decree within the term. The reason is, of course, obvious. The district judge directly familiar with the facts had refused to act after a very careful re-examination of the entire case; and his decision, so far as it was discretionary, was final. The I. F. Chapman, 1 Cir., 241 F. 836, 839, certiorari denied 245 U.S. 647, 38 S. Ct. 9, 62 L. Ed. 529. Further, in our reading of the record, this was the only appropriate result. A contrary ruling would have given us concern in view of the fact that this was a decree arrived at by agreement of the parties (McArthur v. Thompson, supra, 140 Neb. 408, 299 N.W. 519, 139 A.L.R. 413), the admonition against "too ready unravelling of judgments" expressed by this court in the earlier opinion (W. E. Hedger Transp. Corp. v. Ira S. Bushey & Sons, supra, 155 F.2d 321, 324), and the well-settled rule that an error of judgment of counsel is inadequate justification for such unravelling. Mr. Justice Story in Baker v. Whiting, C.C. Me., Fed.Cas.No. 786; Merchants' Banking Co. v. Cargo of the Afton, 2 Cir., 134 F. 727, 731, certiorari denied 196 U.S. 639, 25 S. Ct. 794, 49 L. Ed. 630.

Since all the facts are now fully known, there is no occasion for a trial or for the taking of testimony. It is as much the duty of the court to protect litigants from long and utterly useless litigation as it is to afford an opportunity for trial to those deserving it. And while a court will be astute to prevent misuse of its processes, it can hardly be expected to look with favor upon the device of obtaining postponement of effective trial by seeking a decree to be repudiated after its immediate objective has been obtained. Obviously the respondent has no such extrinsic facts to present as the Restatement refers to (such as threat of kidnapping a party's child) and has not suggested any addition it could make to its petition. The facts are all shown by the record. Accepting the motives and intent ascribed to libellant in the petition we can still find nothing illegal in its acts or erroneous in the court's grant of respondent's request for the consent decree and later refusal to vacate it.

Affirmed.

contd

[EDIT ]

Appendix

1. Excerpts from Some Allegations of the Petition

The petition states that, in its answer to the libel in the foreclosure action, the Hedger Company had "pleaded the defenses of payment and lack of any adequate consideration for the said alleged mortgaged indebtedness and demanded an accounting."

The petition further alleged that "upon information and belief, at the time of the seizure of the barges," Bushey "was indebted to" the Hedger Company, "the exact amount of which indebtedness is not known to" petitioner. The reasons for making this allegation on information and belief, and for not knowing the exact amount owing from Bushey to Hedger, are stated in detail in twenty paragraphs of the petition, the most important part of which may be briefly summarized thus:

As the result of a joint venture, begun in 1932, the Hedger Company operated vessels owned by Bushey and subject to a large mortgage debt to a corporation known as C.I.T. By agreement of Hedger and Bushey, Bushey was to select one of its own employees to serve as the Secretary and Treasurer of the Hedger Company. One Provo, a Bushey employee, was accordingly made Secretary and Treasurer of the Hedger Company and was put in control of its books. The C.I.T. debt was subsequently paid out of the Hedger Company's earnings. Then, pursuant to agreement, the vessels were to be conveyed to the Hedger Company. But Bushey claimed that large sums were due it for repairs. As a result, the Hedger Company took title to the vessels, but subject to a $600,000 mortgage debt to Bushey. Provo, however, had concealed from Hedger and the Hedger Company the fact that, out of the earnings, this debt and more had been paid to Bushey. When, on November 4, 1944, Prove resigned as officer of the Hedger Company, its financial records were found defective and did not show the actual payments to Bushey.

Because of these facts, the Hedger Company, a few weeks later, in December 1944, and some seven weeks before Bushey began the foreclosure action, had brought an accounting action in the New York courts against Bushey, in which action the Hedger Company claimed that Bushey owed a large amount to the Hedger Company.

When, in February 1945, Bushey began its foreclosure suit - which caused the vessels to be seized under process - it "well knew and intended that the business of the plaintiff corporation would be seriously injured and damaged * * * and intended thereby to compel" withdrawal of the accounting action. The Hedger Company informed Bushey that, if its vessels were not promptly released, Hedger "would face serious loss and probably ruin." Bushey knew that the Hedger Company could not obtain the necessary bond (required to release the vessels) which the Hedger Company hoped to obtain through a certain bank, unless the mortgage was satisfied, since only thus could the bank secure itself by a first lien on the vessels. The seizure of the vessels was "oppressive and an abuse of process resorted to for the purpose of forcing" Hedger and the Hedger Company "to abandon their said action for accounting."

The defense of the foreclosure action would have involved "a long trial with a complicated accounting between the plaintiff corporation and the defendant covering a period of at least twelve years and involving innumerable transactions * * * during which the corporation would have been utterly ruined through its ability to operate the barges under seizure. * * *"

"Subsequent to the seizure of said barges and prior to the 20th day of February, 1945, the plaintiff corporation proceeded to arrange for the filing of a stipulation for value in said mortgage foreclosure action for the purpose of releasing said floating equipment from the custody of the Marshal so that the business of the plaintiff corporation might continue, and on the 20th day of February, 1945, ascertained from the proctors for said libellant (the defendant herein) that a stipulation for the sum demanded in said libel, to wit: $73,766.66, would be sufficient in amount, but the said libellant (this defendant) refused to deliver to the claimant-respondent upon the filing of a stipulation for value in the amount demanded in said libel satisfactions of all the aforesaid mortgages secured upon the floating equipment of the plaintiff corporation which had been given to secure the alleged indebtedness sought to be collected in said foreclosure action; although the defendant well knew that such refusal was improper and would hinder and impede the plaintiff corporation in obtaining and filing a stipulation for value as demanded and in securing the release of said barges from the existing attachment.

"The seizure of said floating equipment under said process reduced the available flect of the plaintiff corporation to approximately nine chartered barges and seriously interfered with the business of the plaintiff corporation which was engaged in removing and disposing of sand and other dry ballast from westbound cargo vessels operated by the United States War Shipping Administration in preparation for their reloading with essential war materials for transportation to the Allies in the European theatre of war, and the defendant well knew and intended that the business of the plaintiff corporation would be seriously injured and damaged through the seizure of its said floating equipment under such process and intended thereby to compel the plaintiffs to withdraw and discontinue their said action for an accounting against the defendant. * * *

"Fortieth. - On March 6, 1945, the plaintiff corporation tendered to the defendant, under protest, the sum of $69,403.28, together with additional interest from the 1st day of March, 1945, to the 6th day of March, 1945, together with $3.50 notary fees, in the total amount of $69,491.56, and demanded satisfactions of all said mortgages upon the floating equipment of the plaintiff corporation, but the defendant refused to deliver any satisfactions of said mortgages unless and until the plaintiffs signed and delivered to the defendant a to depart, or unless he is exempted for the said libellant containing statements of fact which were untrue and which, if signed, was intended to and would have resulted in the defeat of the said action for an accounting; and the defendant advised the plaintiffs that unless such terms were complied with the defendant would proceed at once to seize all the tugs of the plaintiff corporation. * * *

"The said claimant-respondent disclosed in open court during the opening upon said trial that it had entered into a financing arrangement with the Grace National Bank of New York for the filing of a stipulation for value or the payment of the said libellant's claim under protest, conditioned upon the delivery by said libellant of satisfactions of such mortgages.

"During the opening of said trial the said claimant-respondent offered in open court to pay to the libellant at once the sum then claimed by the said libellant to be due to it in exchange for satisfactions of said mortgages, under protest and denying that any part thereof to be due and for the stated purpose of releasing its floating equipment from seizure in said foreclosure action, but the said libellant declined to accept said tender and deliver such satisfactions or release said barges under seizure unless the said claimant-respondent would admit that such sum was owing from it to the said libellant. * * *

"The plaintiffs were informed on March 7, 1945, immediately after the Court ordered the taking of proof to commence as aforesaid, that unless the barges under seizure were released without further delay, the Grace National Bank of New York, which was arranging to finance the release of said barges and whose representative was then present in Court, would probably withdraw its assistance, in which event the business of the plaintiff corporation would be ruined because of inability to obtain financial assistance without the delivery of satisfactions of said mortgages and while litigation was pending thereon.

"Between February 10, 1945, and March 7, 1945, the plaintiffs had been informed and believed that the defendant and its representatives had approached various current creditors of the plaintiff corporation and had urged them, and had offered the services of said libellant's proctors, to bring actions immediately in rem against the floating equipment owned by the plaintiff corporation, part of which was then under seizure in the foreclosure proceeding and part, namely various tugs, which were being used by the plaintiff corporation to tow the several chartered barges which the plaintiff corporation was continuing to operate in an attempt to remain in business. * * *

"On March 6, 1945, the proctors for said libellant stated to the plaintiffs that unless the said proposed stipulation described in paragraph Fortieth hereof were signed by the plaintiffs and delivered to the defendant without delay, the defendant would seize all the tugs of the corporation plaintiff, and would put an end to its business immediately; and the plaintiffs believed that said threat would be put into execution.

"The plaintiff corporation had been unable to secure any relief from this Court under Admiralty Rule 22 thereof and had been forced on to trial of said foreclosure action contrary to the Rules of said Court and to the stay in said order to show cause and to the requirements of due process of law, and the commencement of the taking of proof as aforesaid presaged to the plaintiffs a long trial with a complicated accounting between the plaintiff corporation and the defendant covering a period of at least twelve years and involving innumerable transactions, which would have required a lengthy reference before a Special Master and during which the plaintiff corporation would have been utterly ruined through its inability to operate the barges under seizure and its tugs which said libellant had stated it intended to seize and which statement the plaintiffs believed would have been carried into effect within another day, thus definitely terminating all arrangements through the Grace National Bank of New York or otherwise for financing the release of said barges.

"During the opening of said trial the said libellant stated that it intended to move to increase the claim in that suit by approximately $25,000 for the stated purpose of increasing the amount of the stipulation for value the might be ordered by the Court, which proposed increase was excessive and oppressive and was not justified by the facts and by the previous demands of the said libellant which the said libellant and its proctors well knew; and also stated that it would retract its election to sue for the alleged debt and would appropriate all of said barges to itself under said mortgage.

"The plaintiffs also believed that an application for relief to the Circuit Court of Appeals for the Second Circuit, even if within the latter's jurisdiction, could not be disposed of before ruin would overtake the plaintiff corporation.

"By reason of the facts hereinbefore set forth, the plaintiff corporation, believed it had no other means of immediate relief from the said duress, unlawful compulsion and abuse of process perpetrated and inflicted by the defendant upon the plaintiff corporation than to make a tender of $69,491.56 to the said libellant which was its total demand as of March 7, 1945, and it therefore unwillingly and in order to emancipate its property from the said actual and existing duress imposed upon it by the said libellant and without admitting that the same or any part thereof was due from the plaintiff corporation to the defendant, tendered the sum of $69,491.56 to the said libellant to be exchanged for satisfactions of all said mortgages in form to be approved by the Collector of Customs at New York and the libellant's consent to an order of discontinuance of said action upon payment by the said claimant-respondent of Marshal's and Clerk's fees, which tender the libellant accepted and the trial of said foreclosure action was suspended until 10:30 A.M. on the morning of March 8, 1945.

"The proctors for the respective parties thereupon repaired to the Custom House at New York where the form of consent to order of discontinuance of said action was agreed upon, but the Customs Official objected to the forms of satisfactions of mortgages presented by the proctor for the said libellant as insufficient and the parties thereupon adjourned the matter until the following morning, March 8, 1945, at 9:00 at the same place to permit the execution and delivery of proper satisfactions.

"The proctors for the respective parties met at said Custom House as arranged on March 8, 1945, and there were also present the attorneys for said Grace National Bank of New York with all documents prepared for recording of a preferred marine mortgage of said barges from the plaintiff corporation to said Bank, but the proctors for the said libellant arbitrarily and unlawfully declined to deliver such satisfactions to the said claimant-respondent unless and until it authorized its proctor to sign a consent to the entry of a decree in said foreclosure action for the amount of said tender.

"Sixty-first. - The plaintiff corporation was thus again faced with ruin if its floating equipment were not immediately released and for fear that the financial arrangements with said Bank, of which the said libellant was aware, might collapse if the further unlawful demand of the said libellant were not acceded to, and by reason of the facts hereinbefore set forth, the plaintiff corporation believed it had no other means of immediate relief from the said duress, unlawful compulsion and abuse of process perpetrated and inflicted by the defendant upon the plaintiff corporation, and it therefore unwillingly and in order to emancipate its said property from said actual and existing duress upon it by the said libellant, authorized its proctor to sign such consent and said proctor did so accordingly and said decree was signed by the Judge presiding at said trial upon such consent.

"Pursuant to said tender, the plaintiff corporation delivered the sum of $69,491.56 to the defendant on March 8, 1945.

"The tender described in paragraph Fifty-eighth hereof and the said consent to said decree and said delivery were made and given under said unlawful compulsion, duress and abuse of process by the libellant hereinbefore described and by reason of the gross fraud of the defendant upon the plaintiff corporation whereby the plaintiff corporation was deprived of the free exercise of its will in making such tender and delivery and giving such consent, all of which were without consideration and voidable, and the plaintiff corporation therefore hereby repudiates and rescinds said tender, delivery and consent. * * *"

2. The Entire Colloquy Between the Judge and Counsel Before Entry of The Decree.

"Brooklyn, New York, "March 7, 1945.

"Before:

"Hon. Mortimer W. Byers, U.S.D.J.

"Appearances:

"Messrs. Foley & Martin, proctors for the Libellant by Mr. James A. Martin and Mr. Christopher Heckman, of counsel.

"Mr. Horace M. Gray, proctor for the Hedger Transportation Company, Claimant.

"(Discussion off the record.)

"The Court: I think perhaps we will have to have an opening from both counsel here.

"Mr. Martin: Your Honor, this is an action brought by Ira Bushey & Sons as assignees of a preferred mortgage, bringing suit against thirty-one boats that have been attached, eighteen of which are out of commission and have not been used for a year, which lie down at Bushey's yards or in his neighborhood, and on which there is due and owing an unpaid balance of $60,700.

"The original mortgage was $600,000 which by various agreements was reduced and part of that indebtedness remitted so that there comes down now a final agreement which fixes the final amount at the sum of $115,000.That was in 1944. The prior agreement was in 1940.

"In 1944, Mr. Hedger, acting for the Hedger Company, signed an agreement stating that there was due and owing, for good and valid consideration, the sum of $115,000. It is likewise so stated in the mortgage and likewise stated in the first reduction agreement of 1940 and in the second one which I have just mentioned.

"In addition to that, it is also stated in the second preferred mortgage, which is not now going to be foreclosed because part of it has been taken care of, and three chattel mortgages filed in various counties of the State of New York, all of which Mr. Hedger participated in and swore in these different papers that it was a good, valid and subsisting mortgage. Now, that is just the history.

"They come along and payments were made, payments were made out of the earnings of the boats, such payments as have been made, and although there was a $600,000 mortgage there was a forgiveness of about $290,000.

"The Court: May I interrupt?

"Mr. Martin: Certainly, your Honor.

"The Court: Is it correct to say that the mortgage was payable in installments?

"Mr. Martin: That is correct.

"The Court: And your statement is that some of those installments have been made?

"Mr. Martin: Have been made, yes, sir, and other parts of the indebtedness have been forgiven by two agreements.

"On February 8, 1945, a $4,900 note - and I might say that partial payments of installments are represented by notes - on February 8th, one of these notes, in the amount of $4,900 was due and remained unpaid. I do not think there will be any dispute that that note has never been picked up. There was another note, the final note of the transaction, which was due on February 15, 1945.

"The Court: What was the amount of that?

"Mr. Martin: $55,600. It gave a credit of $20,000 - it was a note of about $75,000 - and that was reduced to $55,000. On February 8th, Mr. Hedger caused a letter to be written stating that he would not pay the note of February 8th or the final note of $55,800. Upon receipt of his letter of February 8th - it came to us on February 7th from Mr. Bushey - the letter from Mr. Hedger was dated February 7th, and giving notice that he would not meet the notes, we immediately prepared libels to foreclose the mortgage and claiming that the total amount under the mortgage was due, under the acceleration clause on failure to meet the payments.

"During the lifetime of this transaction, all payments that were made, were never made in cash, they were not cash payments other than those earnings which came from the boats.

"Mr. Hedger, and we may as well bring the whole story before your Honor, in December, December 22nd, served a summons claiming that the transaction was fraudulent - no motion to set aside any mortgages - no application for it - the mortgage is recognized - they wanted an accounting, they said, and a few other things. We expect to meet that if it has to be met but it is the fact that we are compelled to come into this Court to foreclose this mortgage and assert our liens and obtain it and it is for that reason that this suit has been brought.

"I think all that we need to show to your Honor, so far as our prima facie case is concerned and all we intend to offer, is the mortgage and the notes or probably my friend will concede the notes are still outstanding and in our possession and the two agreements fixing the amount, and that will be our case.

"Mr. Gray: Your Honor, this is a culmination of a series of transactions which occurred between Messrs. Bushey and Hedger starting back in 1932. During that period they have been involved in a joint adventure, as a result of which over $1,000,000 in cash and property has been turned over to Bushey and his affiliated companies by the Hedger Corporation and Mr. Hedger, who is the sole stockholder.As a result of that, Mr. Bushey and his associates have been milking the Hedger Company and Mr. Hedger for some twelve years and had them right by the scruff of the neck where they could not help themselves because of the various amounts that they claimed to be owing at that time. It started back in 1932 and they claim there was $155,000 owing, with some slight expenses.

"By the 23rd of December, 1938, although enormous amounts of money had been paid, Bushey told Hedger, you now owe me $420,000 on account because of what I have been doing for you in the way of charter hire and repairs on certain barges.

"Back in 1932, when this joint adventure commenced, it was provided that the treasurer of the corporation, the secretary-treasurer of the corporation, should be a Bushey employee and that continued up until the 4th of November, 1944. During that time Mr. Hedger was unable to get any accounting of the books and he was unable to put an accountant on them to get a proper picture of the situation.

"The Court: What books do you refer to?

"Mr. Gray: The books of the Hedger Company.

"Mr. Bushey would not permit him to have them audited. Since then, an accountant who will be here this afternoon, has examined the accounts and will testify as to the large amounts which are unaccounted for and which only appear on the books as an unsupported item and that will run over $300,000.

"Now, we got to the point in this present situation where Mr. Hedger is now able to protect himself. He is now able to finance the alleged amount that is claimed to be due by Bushey. We are doing everything we can to pay off. We offered him the money yesterday afternoon and he won't take the money. We offered to put up a bond but they would not take a bond. What he is trying to do and what seems to be the underlying motive, is to avoid any possible accounting between Hedger and Bushey. If this accounting was going to result favorably at all to Mr. Bushey, it is quite understandable that he would not contest it but he does not want to do it and he has been avoiding and fighting it ever since the 10th day of February when this libel was filed and we have been trying to get him off our necks, with these boats. Let him try this case if he wants to and give him all the security that he needs to protect himself in this matter. He only asked for $60,000 for the alleged balance. Back in 1938 there are items of $90,000 that we paid for which there is nothing to show.

"Now, during this time, there was a man named Provo, the treasurer-secretary of the Hedger Company and he was the employee of Bushey and Provo kept close track of the financial situation of the company. He was the only one to whom Mr. Hedger could apply to get information. Provo signed all of the checks and approved all of the bills and Mr. Hedger was just in the hands of Bushey for twelve years, working for Bushey under this setup, until Provo got out on the 4th day of November of last year.

"We have brought our suit in the Supreme Court of Kings County to straighten this thing out but our friends here are trying to rush this thing through. He has been trying to catch us off balance.

"Mr. Martin: Your Honor, I do not think those statements should be made in Court.

"The Court: Well, no jury is here, Mr. Martin.

"Mr. Martin: There are too many insinuations - why doesn't he try the facts?

"Mr. Gray: We are ready to. While we are trying the facts - and this is the method in which this thing is being abused - they want us to try the facts but they are going to still hold our barges out of circulation so that we will be ruined while they are trying the case.

"The Court: What do you conceive the issues to be in this action, Mr. Gray?

"Mr. Gray: The action here is lack of consideration and if there was any consideration - first we say there is no debt covered by these notes and secondly, if there was, it has been paid.

"The Court: In other words, you claim that the amount said to be due is not due?

"Mr. Gray: That's right.

"The Court: Then it seems to me, my duty to go ahead and take testimony.

"Mr. Gray: Certainly your Honor must take testimony and we will supply the facts but as I stated before to your Honor, this morning, we are not prepared to go ahead with all of our evidence today.

"The Court: Well, you may be assured that you are not going to be forced. I have tried to make that clear.

"Mr. Gray: But while we are doing this trying, our money has been offered to them and we should not be held up in the operation of our boats, which are still lying idle. We are still offering them the money and our boats should not be held up while trying this case because I think your Honor will find this matter will have to be referred to a Special Master to take this testimony and I hope that your Honor will give us some relief - we are here on the question of relief - the money was offered yesterday afternoon, all of the money that is asked for here and there is no reason why we should go ahead and try this case when our money is ready to be given to them.

"We had a certified check for them yesterday afternoon and we were here with it this morning and we are ready to hand it over to them any time and get rid of this and not take up the time of the Court with unnecessary trial. We can take care of that in the present litigation in Kings County. I cannot see any reason why we should try two cases, one in the Federal Court and one in the State Court, when one may be wholly disposed of without any trial at all and we have the money here ready to give it to them.They don't want the money; they want to avoid an accounting, your Honor, and are doing everthing possible that they can and are abusing the processes of this Court by holding up our boats when we have tried to give them this money and have made a legitimate offer.

"Their answer has been that even if we take the money, the lien of the mortgage is not released. Now, the answer to that is in the old case of United States v. Ames, 99 U.S. 35, 25 L. Ed. 295, and I think your Honor knows the law on that as well as I do -

"The Court: I wish you were right about that.

"Mr. Gray: I am. May I show this case to your Honor? If your Honor will read that case which holds that when a stipulation for value is filed it removed the lien from the res.

"The Court: Well, now, I am not familiar with the provisions of the Admiralty Rule on this subject but is they anything under the Admiralty Rule whereby you can pay your money in Court? That, of course, is possible under the Federal Civil Rule. I am just wondering if there is any way by which you can pay the amount that you concede to be due in Court and thereby release the vessels and allow the litigation to continue. What is the objection to that, Mr. Martin?

"Mr. Gray: The objection is he will not still release our mortgages.

"The Court: But have you the right to pay the money in Court?

"Mr. Gray: Yes, sir, I have.

"Mr. Heckman: There is no objection to that, your Honor. They want more than that, they want to tender the money in Court conditionally and at the same time they say deliver satisfactions of the mortgage which are admissions of payment and which will also release the Hedger Company in personam, which is the party here, and then if for any reason the Court requires further security which the Rule provides and the Rule provides that the order for further security can be enforced by reattachment - where they have sent out to attach some boats which have been released or a mortgage on which, as soon as it is released, there will be more liens placed and they will come in ahead of us.

"We do not have to satisfy this mortgage until we have the money in hand. If we are not entitled to it then the mortgage is not satisfied but a Court order is entered changing the mortgage. Every time they offered the money, they made it conditional on satisfying the mortgages. That is the objection.

"Mr. Gray: Your Honor, we are entitled to a satisfaction of a mortgage when we give them the money.

"Mr. Heckman: Well, you give it and we will give you satisfaction, right now.

"Mr. Gray: Where are your satisfactions?

"Mr. Heckman: They are all ready and prepared.

"Mr. Martin: We want the money without conditions or strings attached.

"Mr. Heckman: Let them give us the money and we will give them satisfactions this minute.

"Mr. Gray: I can get the check in here by 2:00 o'clock.

"Mr. Martin: Well, put it on the record.

"Mr. Gray: We are ready, your Honor, to deposit the money in Court and get our satisfactions of these mortgages -

"Mr. Heckman: No, make it an unconditional payment of the money and we will give the satisfactions.

"The Court: There is a difference between depositing the money in Court and litigating the issues and paying the money you concede to be due and therefore remove the litigation.

"Mr. Martin: We are ready to take the money if they will put on the record that it is due and owing to us, and release the mortgages, but they want -

"Mr. Heckman: They want us to admit satisfaction of the mortgage when we have not got the money in hand.

"The Court: Well, you gentlemen see what you can do by 2 o'clock. We will take a recess now until 2:00 o'clock P.M.

"(Thereupon, a recess was taken.)

"Afternoon Session

"The Court: Have you gentlemen made any progress during the recess?

"Mr. Gray: You mean in the way of getting together?

"The Court: Yes, sir.

"Mr. Gray: No, sir, I only got back at 2:00 o'clock on the dot.

"It seems to me that this is really a matter of equity under Rule 22. That rule provides, as your Honor knows, that in the case of an attachment of property or the arrest of a person, the person to be arrested or any person having the right to intervene in respect to the thing attached, may, upon evidence showing any improper practice or manifest want of equity on the part of the libelant, have an order from the Judge requiring the libelant to show cause why the rest of the attachment should not be vacated.

"Now, we have the money and we have the intent either to give him a bond and try the case or pay him his money under protest and then settle the question of whether he is entitled to the money later on.

"The law requires, in fact it provides under that Ames case which I showed your Honor, that when a stipulation for value is filed, it relieves the res of the lien and what they are trying to do is to have the security and the lien, too, and the purpose for carrying that out is clearly to hold up our floating equipment and force us to come to terms and discontinue this action for an accounting. The accounting action is the whole crux of their refusal to treat this matter from an equitable standpoint. Although they state that they will not release the barges and let them be operated, they have not stated any reason why and under the terms of their own mortgage that they are suing on here, it provides that a receiver may be appointed for the operation of the equipment while the matter is being tried - that is shown on page fifteen of the mortgage.

"Mr. Martin: That is the mortgagee's right.

"Mr. Gray: Certainly, but that is contemplated and the mortgagor also has a similar right under Section 962, Title 46 of the United States Code Annotated, that is, the Court has discretion to appoint receivers to operate the boats while the matter is in process. But here, we have the money here and the only reason they won't take it is because we won't say that we haven't any other claim against them.

"Any one has the right at any time to tender money and tender it under protest. If they want to carry out their protest, they are entitled, as a matter of law, to proceed. If we proceed with this case, we must go through with the accounting here; otherwise if we get into the State Court and a judgment has been entered against the claimant-respondent here, the libelant will plead res adjudicata.

"Mr. Heckman: Well, make your tender on the record, please, Mr. Gray.

"Mr. Gray: The claimant-respondent tenders the sum of - Do you claim now, Mr. Martin, any more than the sum of $69,403.28?

"Mr. Heckman: Answering that, we served you with a notice that on the trial of this action we would move to amend the libel to increase the amount of damages ...


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