The testimony was taken in open court before the district Judge, who pronounced for the libelant against both of the respondents, dividing the damages between them. From this decree the City of Chicago appeals in the first case, asserting that it ought not to be held responsible for the damage; and the Dunham Towing and Wrecking Company in the second case, by cross appeal, asks for a review of the decree, claiming that it was blameless, and that the fault was attributable wholly to the city of Chicago. Wm. H. Sexton, for City of Chicago. C. W. Greenfield, for Dunham Towing & Wrecking Co. Before JENKINS and GROSSCUP, Circuit Judges. JENKINS, Circuit Judge (after stating the facts as above). A careful review of the evidence fully satisfies us that the collision of the bridge with the rigging of the schooner and the resulting damage to. the schooner were caused by the fault of the bridge tender in charge of the Wells street bridge. This bridge was operated by electricity. The failure to stop the bridge upon the centre protection was clearly. owing, as the evidence discloses, to the failure of the bridge tender to shut off the current when the bridge had reached the proper position. He attempted to stop it by means of a foot brake and without turning off the current. After the injury had been done, another person swung the bridge back to the approach and to its correct position, and closed the bridge. The machinery was in perfect working order, and could have been readily managed by a competent person attentive to his duty. It was a case of gross incompetency or gross negligence. The bridge tender had been employed in that work not quite two months at the time of the accident. Prior to that time he had never operated an electric motor and knew nothing of electrical machinery; he was a novice to the business, and lost his head at a critical moment. It is said that notwithstanding this the tug had no right to enter the draw until the bridge was swung and locked, because it is forbidden by the ordinance and the ball was up. There is much dispute in the evidence touching the latter fact, but the large preponderance of the evidence goes to show that the bridge tender lowered the red ball either when the bridge commenced to swing or during the process of swinging and before the tug reached the draw. We have critically searched the record upon this question, and are of opinion that the court below was fully justified in finding that the ball was lowered. The ordinances pleaded are upon their face provisions for the protection of bridges, and so far as they are reasonable should be sustained by the court. They provide for signals by day and by night, an elevated red ball being used in the daytime as a signal to those plying the river that the bridge is closed. When that signal is lowered it tells an approaching vessel that the bridge is open and that it may safely proceed. The ordinance, it is true, declares it to be unlawful to attempt to approach nearer than the bridge protection while the bridge may be opening or closing. But the city by the same ordinance, and practically by its conduct and the conduct of its agent having charge of the bridge, has designated the means by which those in charge of vessels plying the river shall know whether the bridge is or is not opened for passage. The ordinance does not require, nor does common sense demand, that vessels navigating the river shall heave to at each of the numerous bridges that span the river, and critically examine whether the bridge has been swung and whether it has been locked. The city has designated the means by which they are to be informed of the fact. If the red ball be elevated, it is a signal that the bridge is closed; if it be lowered, it is a signal that it is open and that vessels are free to come and go. The lowered ball is an invitation to the vessel signaling for the opening of the bridge that the way is free and that it should enter the draw. This is a reasonable construction of the ordinances, and the only one, as we think, of which they are susceptible. It is the construction which the city itself has placed upon its regulations. Its answer distinctly asserts that the red ball when down is a signal to vessels to proceed through the draw. When, therefore, it is established that the red ball was lowered, the bridge tender invited the tug to come on with her tow and to enter the draw. The city cannot escape the consequences of the gross negligence of its agent in charge of the bridge, because the tug accepted the invitation of the bridge tender upon the assurance that the way was clear, and that the draw of the bridge was open for her passage. The court below, finding the ball signal to have been lowered, divided the damages upon the theory that nevertheless the tug was in fault in proceeding before the bridge was opened and locked, notwithstanding the invitation to proceed. Therein the trial court erred. Upon the appeal of the city of Chicago the decree is affirmed. Upon the appeal of the Dunham Towing & Wrecking Company the decree is reversed, with costs to be taxed against the City of Chicago, and the cause is remanded to the court below, with direction to pronounce for the libelant for his damages in solido against the City of Chicago, and to dismiss the libel as to the Dunham Towing & Wrecking Company, with costs to be taxed against the City of Chicago. In re HARPKE et al. DOYLE ▼. MILWAUKEE NAT. BANK OF WISCONSIN. (Circuit Court of Appeals, Seventh Circuit. May 6, 1902.) No. 827. 1. BANKRUPTCY-PREFERENCES-PAYMENT OF SECURED Note. A bank held two notes of the same maker, one being secured by an indorser. The indorser paid the note on which he was liable with money furnished by the maker, of which fact the bank had knowledge, although it had no knowledge that the maker was insolvent. Within four months thereafter the maker was adjudged a bankrupt, and was in fact insolvent when the first note was paid. Held, that such payment was not a preference, within the meaning of Bankr. Act 1898, § 60a, which the bank must surrender as a condition to proving the second note against the bankrupt's estate, since the effect of its enforcement would not be to enable the bank to obtain a greater percentage of its debt than other creditors "of the same class." Appeal from the District Court of the United States for the Eastern District of Wisconsin. This case arises upon the following facts: Robert Harpke and Frederick Maier, individually, and as copartners doing business as Harpke and Maier, July 24, 1900, were, upon their voluntary petition, adjudged bankrupts. The schedules accompanying the petition showed nominal assets of a little over twenty-two thousand dollars (22,000) and liabilities of a little over thirty thousand dollars (30,000), and appellee herein being scheduled as an unsecured creditor in the sum of two thousand dollars. The proceedings having been referred to a referee and appellant having been appointed trustee, appellee, in the usual course of procedure, made proof of its claim to the extent of two thousand dollars; but to this written objections were filed by the trustee on the ground that the appellee had received a preference from the bankrupts to the extent of three thousand dollars by the transfer of that much property made within four months of the adjudication, and at a time when the bankrupts were insolvent; and that the effect of the enforcement of such transfer would enable the appellee to obtain a greater percentage of its debts than other creditors of the same class. On the trial of this issue it transpired that the appellee, being the holder of a note, dated March 27, 1900, due July 27, 1900, made by the bankrupts and endorsed by one Paul Riesen of Milwaukee for the sum of three thousand dollars, which note was additional to and separate from the two thousand dollar note above referred to, received from Paul Riesen July 6th, 1900,-eighteen days before the adjudication of bankruptcy-his check for the amount of such note, the money used by Riesen in the payment of the note having been advanced by the bankrupts. Upon this state of the facts the referee held, as a conclusion of law, that the payment of the three thousand dollar note, secured by the endorsement of Riesen, did not constitute a preference, such as would prohibit the allowance of the two thousand dollar claim of the appellee. On review in the District Court this finding was approved, upon the additional finding of fact that the payment was received by the appellee in good faith, without the knowledge of the insolvency of the bankrupts, or the fact that the funds were furnished by them, and believing payment to be made by and on behalf of the endorser. And thereupon the objections filed by the trustee were overruled; and from such order this appeal is prosecuted. W. P. Bloodgood, for appellant. Geo. P. Miller, for appellee. Before JENKINS and GROSSCUP, Circuit Judges. GROSSCUP, Circuit Judge, after making the foregoing statement, delivered the opinion of the court: The facts disclosed in the record fail to convince us that the appellee was without knowledge that the funds used by Riesen to pay off the three thousand dollar note had been furnished by Harpke and Maier. It seems probable that appellee knew, or should have known, the source of this fund. But there is no convincing proof bringing to appellee knowledge or notice that Harpke and Maier were then insolvent. On this state of facts the question presented is this: Will appellee be debarred from proving its two thousand dollar claim because it received from the endorser payment of the three thousand dollar note, having reason to believe that the money therefor had come from the principal on the note, though in ignorance of such principal's insolvency? Section 57, par. g, of the Bankrupt Act is as follows: "The claims of creditors who have received preferences shall not be allowed unless such creditors shall surrender their preferences." Section 60, par. a, is as follows: "A person shall be deemed to have given a preference, if, being insolvent, he has made a trans fer of any of his property and the effect of the enforcement of such transfer will be to enable any one of his creditors to obtain a greater percentage of his debt than any other of such creditors of the same class." There can be no doubt that had Riesen paid off the three thousand dollars with his own funds, thereby becoming a creditor of Harpke and Maier, the transfer of the three thousand dollars to him by his debtor would have been a preference within the meaning of the law. But appellee stood to Harpke and Maier in a different relation. Its claim. was not against Harpke and Maier, alone, but against them with Riesen secondarily liable. The endorsement was an inseparable part of the value of the note. Without it the source out of which payment could be enforced was one thing; with it such source was quite another thing. In no sense can it be said that a note collectible only from the principal makers, is of the same class as a note that bears, in addition, the guaranty of a respectable endorser. The foregoing sections, read together, limit the bar created by a preference to transfers made to creditors of the "same class." Nowhere in the act is "class" defined. The distinction is not necessarily marked by the line running between secured and unsecured creditors. To so hold would be to put workmen, clerks, or servants, having claims for earnings within three months before the date of the commencement of the suit, and others entitled by the law of the several states to priority, in the same class with general creditors, though the act provides that they shall, to a certain extent, be paid in full. In the absence of specific definition of these words in the act itself, we must adopt an interpretation that will give to it the meaning most probably intended. Its ordinary definition (Bouv. Law Dict.) is that of a number of persons or things ranked together for some common purpose, or as possessing some attribute in common. Now, a claim against B endorsed by A has an attribute-practical and not merely academic-not possessed by a claim against B alone. Two such claims. are as distinct in kind as a claim secured upon property and a claim unsecured. In each case the distinction consists in the added source out of which the claim may be collected and the added probability of its payment. Nor can we conceive that Congress intended to put the appellee, or persons standing in like relations, in the situation that would follow an interpretation such as is insisted upon by the trustee. Let us recall that situation, interpolating, only, that payment was offered at the maturity of the note instead of previous thereto a change that does not affect the argument as to the intention of Congress. The appellee held the two notes, the one secured by an endorser; the other unsecured. It had no knowledge of Harpke and Maier's insolvency. It had no knowledge that Riesen knew Harpke and Maier to be insolvent. It might well happen that though given the money with which to pay off the note, Riesen would have no knowledge of the principals' financial condition. Had the endorser, acting in good faith, received the money without knowledge of the insolvency, and at maturity or afterwards offered therewith to pay off the debt, and had such offer been refused by the appellee, clearly the endorser would have been discharged. On the other hand, the acceptance of the money and its application to the note would likewise result in his discharge. Accordingly should the trustee's contention be accepted-the appellee, whether it accepted or refused on maturity of the note the proffered money, ran the chance of discharging the endorser, with the possible result, too, of being compelled to repay the money received. No such situation of uncertainty could have been intended for creditors whose own conduct was in good faith. In our opinion, under the facts stated, appellee was not in the same class as the creditors for whom the trustee complains, and, accordingly, the order of the court below must be Affirmed. GLEASON et al. v. DUFFY et al. (Circuit Court of Appeals, Seventh Circuit. May 6, 1902.) No. 840. 1. SHIPPING-PROCEEDINGS FOR LIMITATION OF LIABILITY-JURISDICTION. A proceeding by a shipowner for limitation of liability under Rev. St. 4283 et seq., as amended by 24 Stat. c. 421, and under the admiralty rules, may be brought in the district court for any district in which said owner may be sued in that behalf, on payment into court of, or stipulation to pay, the appraised value of the vessel, or upon the transfer of his interest to a trustee; and the presence of the vessel within the district is not essential to the court's jurisdiction.1 2. SAME ESTOPPEL TO MAINTAIN PROCEEDINGS-JUDGMENT IN PERSONAM IN STATE COURT. A shipowner is not estopped by a judgment in personam rendered against him by a state court for damages sustained in a collision from thereafter instituting proceedings in a court of admiralty for a limitation of his liability in respect to such damages under the statutes of the United States, although in such proceeding the fact of liability and the amount of damages sustained by the injured party are matters rendered res judicata by the former judgment. 8. SAME-LACHES-CONDITIONS TO GRANTING OF RELIEF. Nor is the shipowner debarred by laches from maintaining such proceeding because the same was not instituted until after he had prosecuted an appeal from the judgment for damages, and the same had been affirmed, nor by the fact that he gave a supersedeas bond, as required by statute, to enable him to safely present his contention to the appellate court; but where there has been such delay he should be required, as a condition to the granting of the relief prayed for, to pay the costs adjudged against him in the state courts, which might have been, to a large extent, avoided by his more timely action. Appeal from the District Court of the United States for the District of Indiana. In Admiralty. The appellant John Gleason, one of the crew of the steamboat Transit, on the 22d day of December, 1896, received an injury through a collision between the Transit and tugboat Aid upon the Ohio river, and at the port of Louisville. On May 5, 1897, he brought a common-law action in the circuit court for the county of Clark, Ind., against Duffy and Hoffman, the appellees, owners of the steam tugboat Ald, to recover Camages therefor. The claimant appeared to that action, denied liability, and also an 1 Limitation of shipowner's liability, see note to The Longfellow, 45 a. C. A. 387. |