that the plaintiff, in selecting this tract from among others, was influenced by the value given to it by its timber. It was the intention of the government, by the homestead law, and was the intention of the plaintiff, in accepting the provisions of that law, that, upon his compliance with its requirements, he should be entitled to the land, with whatever advantages were incident to its natural condition and character, whether due to the fertility of its soil, or to its growth of timber. But for the act of the defendants, that intention would have been effectuated, and the timber would have passed to the plaintiff by the patent, as did the soil from which the timber was severed. It does not comport with the spirit of the homestead law to say that, after the initiation and partial perfection of a homestead claim, some third person may rob the land of a substantial part of that which gives it value, and that, on full compliance with the law by the homestead claimant, the government may convey to him that which is left of the land, and may recover from the wrongdoer, and retain to its own use, the value of that which has been unlawfully taken from the land through no fault or wrongful act of the homestead claimant. The law does not contemplate anything so unreasonable. The principles underlying and supporting the doctrine of relation are such that it may be as readily invoked to remedy or correct a loss such as is here disclosed, occurring while the claim was being perfected, as to prevent the loss of the entire right or title through an intervening claim. The plaintiff's title under the patent relates back to a time prior to the severance and conversion of the timber by the defendants, which was after the initiation of his claim, and entitles him to maintain this action. The judgment is affirmed. INTERNATIONAL NAV. CO. v. SEA INS. CO., Limited. No. 113. 1. MARINE INSURANCE-SALVAGE EXPENSES-LAW GOVERNING APPORTIONMENT. An English valued policy on a ship contained the provision: "General average salvage, and special charges as per foreign custom, payable according to foreign statements, or per rules of port of discharge, at the option of assured." Held, that under such provision the law of New York, the port of discharge, governed as to the amount payable by the insurer on account of salvage arising from stranding, there adjusted, and the insured was entitled to recover on the policy, in accordance with the law of the port, a sum which bears the same ratio to the entire salvage he was compelled to pay as the amount of the policy bears to the policy value of the ship, although the award was made on a higher valuation, and not, as by the law of England, only such part of said sum as bears the same ratio to the whole as the policy valuation bears to the valuation on which the adjustment was made. Appeal from the District Court of the United States for the Eastern District of New York. This cause comes here on appeal from a decree of the District Court, Eastern District of New York, in favor of the libelant, owner of the steamer St. Paul, claiming loss under a policy of marine insurance. The opinion of the District Court is found in 124 Fed. 93. Wilhelmus Mynderse, for appellant. Before LACOMBE, TOWNSEND, and COXE, Circuit Judges. PER CURIAM. The St. Paul, on a voyage from Southampton, stranded on the New Jersey coast, and salvage services were rendered to vessel and cargo, as the result of which the vessel reached New York, having sustained physical damage involving serious repairs. The salvors took legal proceedings against vessel and cargo, and an award was made separately against each. The St. Paul (D. C.) 82 Fed. 104, affirmed by this court 86 Fed. 340, 30 C. C. A. 70. The award against the vessel (exclusive of the share to be borne by the freight) was $129,914.57. A statement was made up by Johnson & Higgins, average adjusters, in which the salvage award against the steamer was claimed as a particular average, being added to the cost of repairs to the ship caused by stranding; the total amount being $248,377.28. This statement was presented to the underwriters on the St. Paul, both in this country and in England. Some of the American underwriters refused payment of the claim under the said statement. Suit was brought in the District Court, Southern District of New York, and libelant recovered. International Navigation Co. v. Atlantic Mutual Ins. Co. (D. C.) 100 Fed. 304. That decision was affirmed by this court. 108 Fed. 987, 48 C. C. A. 181. The respondent here is a British corporation, and issued the policy of insurance in London. The vessel was valued in all her policies at £275,000, and she was insured for the whole of that amount; the respondent underwriting £4,500. The salvage award was made on the basis of actual value in her salved condition, $2,000,000 (£410,256); and her value in sound condition was $2,100,000 (£441,025). The libelant claimed to recover 15/2750 of the $248,377.28. The insurers contend that their liability for the salvage award is restricted to 45/2750 of 275000/441025 thereof. The conceded amount was paid, and this suit was brought to recover the difference. The question in dispute is whether, under a valued policy, where salvage has been awarded on a higher valuation, the insured can recover ratably from the several underwriters the salvage he has had to pay, or only such part of it as is in the same proportion to the whole salvage paid as the total policy valuation is to the valuation on which salvage was awarded. No question seems to be raised as to the amount to be paid for repairs to the vessel. It will be perceived that the question presented is a single one, and the concessions of the respective parties have greatly simplified it. The respondent's method of calculation is in accord with English law. The libelant's is in accord with American law. For brevity of statement, the one may be called "nominal proportion"; the other, "actual proportion." The policy is a British contract, and is to be interpreted accordingly. It is, however, "competent to an underwriter on an English policy to stipulate, if he think fit, that such policy shall be construed and applied, in whole or in part, according to the law of any foreign state, as if it had been made in and by a subject of the foreign state." Greer v Poole, 5 Q. B. D. 272. The policy of the defendant contains the following provision: "General average, salvage and special charges as per foreign custom, payable according to foreign statements or per York-Antwerp rules, or York-Antwerp rules of 1890, or per rules of port of discharge, if in accordance with contract of affreightment at the option of assured." Precisely this form of words is not found in any of the cases cited upon the briefs, but it seems to us reasonably easy of interpretation. As was stated before, without some such clause, the assured on a valued policy was liable to pay in some foreign port general average charges at one rate, and when he came to his underwriter for indemnity would be paid at a different rate, receiving less than he had paid, and not securing complete indemnity. The same rule applied to claims for salvage loss as to claims for general average loss. Steamship Balmoral Company v. Marten, L. R. App. Cases (1902) 511. Naturally the assured sought to correct this by some special provision which the underwriter might be willing to assent to. A provision quite frequently adopted was, "General average according to foreign custom;" also, "General average as per foreign statement." Such provisions have been considered by British courts, and in each instance it was held that the underwriter could not dispute the adjustment as to the propriety of particular items, or as to correctness of the apportionment, and was bound by the decision of the foreign average stater, or by the custom of the foreign port, both as to fact and law on the subject of general average. Mavro v. Ocean Ins. Co., L. R. 9. C. P. 595; The Mary Thomas, Prob. Div. (1894) 123; Harris v. Scaramanga, I Asp. Mar. Cas. 344; De Hart v. Compania Anonima, 9 Asp. Mar. Cas. 345, affirmed 8 Commercial Cases, 314. The last citation contains the following: "The general effect of the memorandum [to pay general average as per foreign statement, if so made up] is to make the underwriters liable as to general average for whatever the owners of the goods might be called upon to pay on that account by the foreign statement of adjustment. If an adjustment has to be effected in a foreign port, it is obviously convenient that there should be a provision that in such a case the underwriter should stand in the shoes of those primarily liable upon it." In none of the cases cited was the proposition raised, as it is here, that, although the assured might have paid general average charges on actual valuation, his claim for such loss should nevertheless be readjusted by scaling it down to a "nominal proportion." It would certainly seem that the manifest object of the clause would be defeated. by so narrow an interpretation. "General average as per foreign custom" would be a declaration not wholly lived up to, if foreign custom made the assured pay on one basis, but the memorandum clause allowed him to collect only on another. No authority, British or other, is cited which is persuasive to so narrow an interpretation of a clause obviously intended to relieve the assured from the risk of meeting disaster without being compelled himself to meet the added risk of the geographical location of his ship when the loss was incurred and the port of safety was reached. Indeed, it would seem that the avoidance of this geographical risk was the genesis of the clause. The phraseology of the clause in the policy now under consideration is broader than in the cases cited, for it submits to "foreign custom,' whether there be an adjustment or not, "salvage and special charges." We concur entirely with the District Judge in the conclusion that under that clause the settlement of salvage losses under the policy must be in conformity to the law of the country in which the assured pays them. The decree is affirmed, with interest and costs. DICKINSON et al. v. SAUNDERS et al. (Circuit Court of Appeals, First Circuit. April 13, 1904.) 1 FOREIGN CORPORATION-DECREE APPOINTING RECEIVERS CONSTRUED. 2. SAME-PRIORITY-WAGES OF EMPLOYÉS. Where a federal court could have acquired jurisdiction to appoint receivers for a foreign corporation only by consent of the parties, and no objection was made by any party to such appointment, or to a decree requiring the receivers to pay from the proceeds of the corporation's property all sums due employés, together with all the expenses of carrying on the business, the receivers could not thereafter, under the circumstances of this case, refuse to pay in full claims for wages earned by employés of the corporation prior to the receivers' appointment, none of which exceeded $300 in amount, in preference to other unsecured claims. Appeal from the Circuit Court of the United States for the District of Massachusetts. Guy Cunningham, for appellants. Henry T. Lummus (Charles N. Barney, with him on the brief), for appellees. Before PUTNAM, Circuit Judge, and ALDRICH and BROWN, District Judges. PUTNAM, Circuit Judge. This appeal arose out of a bill in equity filed in the Circuit Court for the District of Massachusetts on the 7th day of August, 1902, by the Boston & Gloucester Steamboat Company and others against the Cape Ann Granite Company, incorporated under the laws of Maine, but said to have a usual place of business at Gloucester, in Massachusetts. The bill alleged that the Cape Ann Granite Company in March, 1894, executed a mortgage of its franchises and all its property to secure an issue of bonds, and that all the complainants were holders of portions thereof, either absolutely or as collateral security, and also of certain shares of capital stock; that the mortgage was in default; that the defendant corporation had an amount of property of various kinds, and was largely indebted; that its property had been attached by various creditors; that the corporation was wholly insolvent, and that it was likely that a race of diligence would ensue between its different creditors, all of which would result in a multiplicity of suits, and in dismemberment and sale of its property by piecemeal and at a sacrifice; that its personal property, consisting principally of machinery and equipment, was of great value as attached to and part of its plant, but of little value when separated therefrom, and that the value of all its property consisted largely in its continued working operation as a unit; and that it was necessary,. for the protection of its bondholders and creditors and for the preservation of its assets, that all its property within the jurisdiction of the court be taken into its judicial custody by the appointment of a receiver. Thereupon the bill prayed that the rights of the parties in interest might be ascertained and protected; that the court would administer the entire property of the corporation, and for such purposes would marshal its assets and enforce the various rights, liens, and equities; and that a receiver be appointed to take possession of all the assets, with authority to manage and preserve the same till the same should be sold and the proceeds distributed. Thus the bill looked not merely to a foreclosure of the mortgage in which the complainants were interested, but to a winding up and distribution of the assets of the corporation, and the consequent intervening control and management of its affairs, with the view of making its assets of most available value. Thereupon, the same day the bill was filed, the appellants were appointed interlocutory receivers as prayed by the bill, and were authorized to retain possession of all the properties until sold, and to operate and continue the business until otherwise directed, and from the moneys coming into their hands to pay all sums due to employés and all expenses of carrying on the business. No objection to these proceedings seems to have been taken from any quarter, so that we have no occasion to consider any question except that which is now expressly before us. Subsequently to filing the bill, on May 16, 1903, certain petitioners intervened, setting forth that they were "workmen and servants" employed by the defendant corporation during April, May, June, July, and August, 1902; that they had claims against it for the various amounts stated in the schedule attached to the petition, as wages earned during the months specified for labor necessary to its business from day to day; that the claims were contracted as a part of current expenses in the ordinary course; that the receivers had sold and converted into cash a large amount of personal property which was not covered by the mortgage in question; that they had applied none of the same to the payment of the claims of the petitioners, and had refused to do so; and that it was likely that the property and money remaining in their hands, if distributed among all the unsecured creditors, would be insufficient to pay in full. Thereupon they prayed that their claims might be allowed as 129 F.-2 |