2. R. 4 C. P. 117; The Southgate [1894] P. 329; The Xantho, L. R. 12 App. Cas. 503; Hamilton v. Pandorf, L. R. 12 App. Cas. 518. The loss being prima facie by a danger of the sea, and hence within the exception, the burden of proof was upon the libellant to defeat its operation. The Hindoustan, 35 U. S. App. 173, 67 Fed. Rep. 794, 14 C. C. A. 650; The Victory and The Plymothian, 168 U. S. 410, 423, 42 L. ed. 519, 528; Western Transp. Co. v. Downer, 11 Wall. 129, 20 L. ed. 160; Memphis & C. R. Co. v. Reeves, 10 Wall. 176, 189, 190, 19 L. ed. 909, 913. If the loss may as well have occurred by a peril of the sea as by negligence, the libel lant cannot recover. Clark v. Barnwell, 12 How. 272, 280, 13 L. ed. 985, 988; Muddle v. Stride, L. R. 9 C. & P. 380; The R. D. Bibber, 8 U. S. App. 42, 50 Fed. Rep. 841, 2 C. C. A. 50: Searles v. Manhattan R. Co. 101 N. Y. 661. |juries to a cargo of sugar owned by the libellant, which had been shipped on or about February 15, 1894, upon the Silvia at Matanzas, Cuba, for Philadelphia, under a bill of lading by which the sugar was "to be delivered in the like good order and condition at the port of Philadelphia (the dangers of the seas only excepted)," upon payment of agreed freight, "and all other conditions as per charter party dated New York 31st January, 1894." The charter party, which had been made and concluded at New York January 31, 1894, provided that the Silvia, then at Tucacas, Venezuela, should proceed as soon as possible in ballast to Matanzas for a voyage thence to Philadelphia, New York, or Boston, and contained these provisions: "The vessel shall be tight, staunch, strong, and in every way fitted for such a voyage, and receive on board, during the aforesaid voyage, the merchandise hereinafter mentioned (the act of God, adverse winds, restraint of princes and un-rulers, the Queen's enemies, fire, pirates, accidents to machinery or boilers, collisions, errors of navigation, and all other dangers and accidents of the seas, rivers, and navigation, of whatever nature and kind soever during the said voyage, always excepted). *The said party of the second part doth en-[464] gage to provide and furnish to the said vessel a full cargo, under deck, of sugar in bags. The bills of lading to be signed without prejudice to this charter." If the vessel be deemed to have been seaworthy when she broke ground on the voyage, nevertheless the shipowner "exercised due diligence to make the said vessel in all respects seaworthy and properly manned, equipped, and supplied.' A presumption of competency arises under the circumstances. Butler v. Boston & S. 8. Co. 130 U. S. 527, 554, 32 L. ed. 1017, 1023; Pickup v. Thames Marine Ins. Co. L. R. 3 Q. B. Div. 594. The Harter act exempts shipowners from The Silvia, with the sugar in her lower The Delaware, 161 U. S. 459, 471, 40 L. ed. 771; The Colima, 82 Fed. Rep. 665; The Mary L. Peters, 68 Fed. Rep. 919; The Flamborough, 69 Fed. Rep. 470; The Alvena, 74 Fed. Rep. 252; The Carron Park, L. R. 15 Prob. Div. 203; The Mexican Prince 82 Fed. Rep. 484; The Glenochil [1896] P. 10. The proper closing of the ports was an act belonging to the management or navigation of the ship. four sengers, but on this voyage contained only Carmichael v. Liverpool Sailing Shipowners note. The libellant is not in privity with the charter party between the owner and J. H. Winchester & Co. Russell v. Niemann, 17 C. B. 163; Serraino v. Campbell [1890] 1 Q. B. 283. [463] *Mr. Justice Gray delivered the opinion of the court: were left open in order to light the compartment should it become necessary to get anything from it, and the hatches were battened down, but could have been opened in two minutes by knocking out the wedges. In the afternoon of the day of sailing, the ship encountered rough weather, and the glass cover of one of the ports was broken,— whether by the force of the seas or by floating timber or wreckage was wholly a marter of conjecture, and the water came in through the port and damaged the sugar. The decree of the district court dismissed the libel, and was affirmed by the circuit court of appeals. 64 Fed. Rep. 607, and 35 U.S. App. 395. The libellant applied for and obtained a writ of certiorari from this court. This was a libel in admiralty, filed June company could not avail itself, in favor of its own alleged claim, of such an infirmity, if it existed, nor could the holders of the notes, which had passed into their hands as strangers, be deprived of the securities on the faith of which they had advanced their money; or have their rights adjudicated in their absence. However, whatever the contention in the courts below may have been the errors assigned here merely put forward the theory that the alleged usurious character of the contract by reason of the options granted and commissions paid, and its invalidity for lack of power in the bridge company, so took the transaction out of the ordinary course of 503]business as to charge Tod & Co. and the loanholders with bad faith and notice of the alleged claims of the trust company. But we cannot perceive that the fact of usury between the parties to the contract, if usury there were, or action in excess of power, if that existed, either or both, can be laid hold of to justify the imputation of notice that Garretson was dealing with the securities in derogation of rights of the trust company. Doubtless there are cases where commercial paper or securities may be of fered for negotiation under circumstances so out of the usual course of business as to throw such grave suspicion on the source of title that lack of inquiry, assuming that it would disclose defects, might amount to culpable negligence. But that doctrine has no application here. Respondents had possession of all the Sioux City, O'Neill, & Western bonds, and 7,200 shares of Sioux City & Northern stock, in pledge to secure payment of $1,000,000 of Garretson's notes payable on demand, which amount had been borrowed for the purposes of, and was used in, acquiring the Sioux City, O'Neill, & Western Railroad for the syndi cate. The syndicate was engaged in constructing a bridge across the Missouri river to connect the railroad in Nebraska with that in Iowa. The stock of the bridge company was all owned by the syndicate, and had been pledged with the bonds of the Sioux City, O'Neill, & Western Railway. Garretson applied for a new loan of $1,500,000,with which to take up the million dollar loan and get additional funds for the construction of the bridge. As the railroads whose bonds and stock constituted the security were new, and the securities were then without market value, the negotiation of the loan was made more attractive to the debenture company by the allowance of the commission and certain options. And since there seems to have been a question as to whether the agreements might not be obnoxious to the New York usury statutes, and as notes of a corporation were supposed to be more readily salable than those of an individual, it was thought best to make the loan directly to one of the corporations owned by Garretson and his associates. The original suggestion was that the loan 504]*should be made to the Sioux City, O'Neill, & Western Railway Company, but objections! being raised to this in view of certain provi sions of the statutes of Nebraska, it was ar ranged between Tod & Co. and Garretson and his associates that the bridge company, which was equally owned by the syndicate, and to the purposes of which $500,000 of the loan were ostensibly to be devoted, should become the borrower. The sale of the securi. ties, the issue of the notes secured thereby, and the making of the loan followed. Garretson executed the indenture of trust to Tod & Co., the debenture company paid over $1,500,000 and interest to them, and they took up the million dollar loan, thereby releasing the Sioux City, O'Neill, & Western bonds and 7,200 shares of Sioux City & Northern stock; the balance of the latter stock was sent to Tod & Co. by the trust company; Tod & Co., as trustees, certified on the notes that the collateral had been deposited with them, and the notes were sold to various purchasers, who apparently advanced their money in good faith. If the transactions, thus briefly stated, were unaffected by notice of any want of authority in Garretson in respect of the trust company as now alleged, it is not for that company to say that Tod & Co., or the holders of the loan, should be held chargeable with notice simply because the commissions and options might have constituted usury as between the parties to the loan, or the bridge company, its stockholders, or judgment creditors might have had cause of complaint of defect of power. In letting petitioner in to redeem the circuit court went at least as far as the record would permit. Whether or not there was error in the decree of which respondents might have complained, we do not feel at liberty to decide. Decree affirmed. UNITED STATES* v. JOINT-TRAFFIC ASSOCIATION et al. (See 8. C. Reporter's ed. 505-578.) Joint-traffic association, when illegalpower of Congress to prohibit―agreement by which competition is prevented-freedom of contract-valid statute-agreement between railroad companies. 1. 2. The right of a railroad company in a jointtraffic association to deviate from the rates prescribed, provided it acts on a resolution of its board of directors and serves a copy thereof on the managers of the association, who, upon its receipt, are required to "act promptly for the protection of the parties hereto," does not relieve the association from condemnation as an illegal restraint of competition, as the privilege of deviating from the rates would be exercised upon pain of a war of competition against it by the whole association. Congress has the power to prohibit, as in restraint of interstate commerce, a contract or combination between competing railroad companies to establish and maintain interstate rates and fares for the transportation [505] ment under consideration operates as a re-admit that it is necessary for me by argu straint upon interstate trade and commerce. ment to fortify the positions taken by this The prohibition of the Anti-Trust Act, as court in that case. The anti-trust law as construed by this court, applies to all con- there construed is the law of the land. tracts in restraint of trade or commerce, and is not confined to those in unreasonable restraint. The wisdom of Congress in prohibiting all agreements in restraint of trade among interstate railway systems is even more maniBut as a contract in restraint of com-fest now than when the Trans-Missouri case merce, the Trans-Missouri agreement is was decided. At the time of the argument crude and ineffective when compared with of the Trans-Missouri case it was still to the Joint Traffic agreement. The Trans- some extent a mooted question whether the Missouri provides a penalty for competition. Interstate Commerce Commission was emThe Joint Traffic goes further, and contains powered to determine what are fair and reaprovisions designed to deprive companies of sonable rates, and to enforce such rates. the means of competing, while removing the This question is no longer open. inducement to compete. Control of the soliciting and contracting freight and passenger agencies is placed in the managers, who are authorized to organize joint agencies. This done, the supervision of the sources of securing business being thereby given to the man- It will probably be urged that any illegalagers, they are charged with the duty of ap-ity in the agreement is cured by § 3 of arti portioning the competitive traffic equitably cle 7, which reads; among the members of the association. Of course the purpose is to remove the inducement to compete. An agreement to apportion traffic operates the same as one to divide earnings. Railroads which pool their earnings have no inducement to compete. All the individual company earns goes into the pool, and it only gets its share after all. So where the traffic business is pooled, if a company by competing gets more than its share, it must yield the excess by permitting a diversion of the traffic from its line to lines which are short. A strict account is kept of the traffic carried by each trunk line. If the traffic of a particular line exceeds its percentage, the line is deemed "over," and must account for the excess to the lines which are "short." In prohibiting pooling, Congress did not make it a condition that the rates established and maintained under a pooling agreement should be unreasonable. It sufficed they would be arbitrary, uninfluenced by competition. The public would be placed at the mercy of the traffic managers. Interstate Commerce Commission v. Cincinnati, N. O. & T. P. R. Co. 167 U. S. 479, 42 L. ed. 243; Interstate Commerce Commis sion v. Alabama Midland R. Co. 168 U. S. 144, 42 L. ed. 414. "Sec. 3. The powers conferred upon the managers shall be so construed and exercised as not to permit violation of the Interstate Commerce Act, or any other law applicable to the premises, or any provision of the charters or the laws applicable to any of the companies parties hereto; and the managers shall co-operate with the Interstate Commerce Commission to secure stability and uniformity in the rates, fares, charges, and the rules established hereunder." An injunction to construe and exercise powers conferred so as to permit no violation of law is an admission that the powers may be so construed and exercised as to violate law. If the anti-trust law prohibited only those contracts in unreasonable restraint of trade or commerce there might be saving force in this section. But the anti-trust law prohib its all contracts in restraint of trade or commerce. Whether the rates be reasonable or unreasonable, an agreement providing for their establishment and maintenance by an association of interstate railways is prohib ited. The managers can exercise none of the So, too, in the case of a contract in re- essential powers conferred by the agreement straint of trade prohibited by the anti-trust without violating the law. In the matter law; it is enough if the agreement interferes of the essential powers it is not a question with those natural laws which ordinarily of method or degree; the powers cannot be determine rates; it is enough if it restricts exercised because they are in themselves ilcompetition; it is enough if it puts it in the legal. The association is itself illegal It power of the combined railroads arbitrarily is formed for the purpose of controlling to fix rates. We do not have to inquire certain competitive traffic. The central anwhether the rates fixed are reasonable or un-thority, the managers, is given the power to reasonable. It is the power through combination to fix rates arbitrarily, which is prohibited. The Trans-Missouri case was elaborately argued and carefully considered. A petition for a rehearing was presented and denied. The decision has been accepted and acted upon by the departments of the government, and by the courts, both state and Federal, as definitively settling the meaning and scope of the Anti-Trust Act when applied to traffic associations among competing interstate railway systems. The decision was not only a just, but an eminently salutary one. I shall not concede that the principles it laid down remain questionable. I shall not establish and maintain rates on that traffic. Take away from the association the power to establish and maintain rates, and it immedi ately falls to pieces. It ceases to have a raison d'etre. It will be observed that the managers are not instructed to co-operate in securing reasonable rates. The latter part of this se tion is inserted to support, not the real, but ostensible purpose of the association, namely of aiding the Interstate Commerce Commission to enforce the law. Assuming the Commission powerless to enforce the law, the railroads ignored both the Commission and the law, and proceeded to form an associa tion outside of the law and in violation of the law, to aid in enforcing the law. The that end it required all railroads engaged in railroads shatter the law, and then combine to support the fragments. It was contended below that the bill was multifarious. There is but one cause of action in the bill,-namely, the agreement. Upon that the bill is based. It seeks to enjoin the execution of an illegal contract. The averments of intent in the bill are unnecessary and immaterial. At the most they are conclusions of law. The court will examine the agreement and determine the question of law with respect to its meaning and effect; will determine whether the agreement restrains trade or commerce in any way so as to violate the law. If the agreement is prohibited by the anti-trust law the court will enjoin its execution; and the court will do this irrespective of whether the agreement does or does not also violate the Interstate Commerce Act, or those general principles of law which prevent any interference with interstate commerce. It is not necessary for the government to insist that the agreement violates more than one law. It is clearly illegal as a contract in restraint of trade or commerce under the anti-trust law. The fact that it also violates some other law, if it does, assuredly will not cure its illegality under this law, or prevent the court from enjoining its execution. A thing which is doubly bad does not, therefore, become good. The rule of double negatives does not apply. Nor is the government deprived of the power to restrain the execution of a contract in restraint of trade or commerce under the anti-trust law because the contract contains a provision under which individuals have committed, or may commit, offenses punishable under the Interstate Commerce Act. If a man threatens my life I am not to be deprived of the right to put him under bond to keep the peace be cause he has also stolen my property. The authority of the government to maintain this suit is sustained in United States v. Trans-Missouri Freight Asso. 166 U. S. 290, 343, 41 L. ed. 1007, 1028; citing Re Debs, 158 U. S. 564, 39 L. ed. 1092; Cincinnati, N. O. & T. P. R. Co. v. Interstate Commerce Commission, 162 U. S. 184, 40 L. ed. 935, 5 Inters. Com. Rep. 391; Texas & P. R. Co. v. Interstate Commerce Commission, 162 U. S. 197, 40 L. ed. 940, 5 Inters. Com. Rep. 405. Messrs. James C. Carter and Lewis Cass Ledyard, for the Joint Traffic Association, appellee: The object of the bill is to procure an ad judication that a certain agreement entered into between a large number of railroad companies forming most, but not all, of the lines or systems engaged in the business of railroad transportation between Chicago and the Atlantic coast, for the purpose of forming an association for the better regulation of a certain part of the traffic of those lines and systems, is illegal and void, and enjoining its execution. Congress in 1887 enacted the Interstate Commerce Law, the main design of which was to abolish discrimination in rates and secure a greater degree of uniformity, and to interstate transportation to file with the Commission and publish schedules of their respective rates, and forbade the carriage of goods for any greater or less compensation than that specified in the published rates. Even before the passage of the law the rival lines engaged in an effort to agree upon the schedules which each should file, and had reached such agreement in time to file and publish them in compliance with the provi. sions of the law. The agreement in question was believed to promise great benefits and to make it in the interest of all to comply with the Interstate Commerce Act, and to detect, expose, and punish any who, from a mistaken view of interest, should violate it. It made no effort to prevent competition: but sought to devise a scheme which would compel any competition to be fair, lawful, and open, and enable any rival to meet it without violating any law. are Unfortunately, large corporations viewed with a jealousy which does not confine itself at all times within the bounds of reason, and this sentiment creates hostilities to which it is but natural, at least, that public officials should yield. Transactions which, in the absence of political prejudice and passion, would pass unnoticed by those not immediately affected by them, are subject to hostile scrutiny; and it was not unnatural that such an agreement should raise a clamor that it was designed to raise rates. There never was a pretense, however, that under the agreement there was the slightest exaction of unreasonable charges. On the contrary the schedules of rates agreed upon and filed with the Interstate Commerce Commission had never been objected to by that body, and were notoriously lower than those imposed for similar services in any other part of the world. The answer denies every allegation of unlawful act or of unlawful intent, unless the making of the agreement itself was an unlawful act. It may seem at first that we are aiming to persuade the court to reconsider its reasoning and determinations in the recent case of United States v. Trans-Missouri Freight Association. It may be that one of the questions now sought to be presented might have been made in that case and a decision of it obtained; but it is quite certain that the question was not raised. The precise question which was considered and determined in the case above referred to was this: Assuming that the agreement was one in restraint of trade, would the circumstance that the restraint actually imposed by it was reasonable relieve it from the condemnation of the statute? Or, in other words, does the statute by a true construction condemn all agreements in restraint of interstate trade and commerce, or such only as were at common law unlawful? Prior to, and at the time of, the passage of this law there were, as there still are, certain tendencies in the industrial world which drew widespread attention and excited in 1831 (6 Stat. at L. 464, chap. 102), was held not to be assets in their hands for the payment of his creditors, the act, in its title, was expressed to be "for the relief of the heirs of William Emerson, deceased;" and it granted the money as a reward for services, meritorious indeed, but voluntarily rendered by Emerson, not under any law or contract, and imposing no obligation, legal or equitable, upon the government to compensate him therefor; and the money was therefore held to have been received by his heirs as a gift or pure donation. purpose is not to confer a bounty or gratuity upon anyone; but to provide for the ascertainment and payment of a debt due from the United States to a loyal citizen for property of his, taken by the United States, and to enable his executor to recover, as part of his estate, proceeds received by the United States from the sale of that property. *The 474] act is "for the relief of the estate" of Charles M. Briggs, and the only matter referred to the court of claims is the claim of his "legal representatives." The executor was the proper person to represent the estate of In the provision of the appropriation act Briggs, and was his legal representative; and of March 3, 1891, chap. 540, concerning the as such he brought suit in the court of French Spoliation Claims, the words "per- claims, and recovered the fund now in quessonal representative" and "legal representation, and consequently held it as assets of the tive" were used to designate the executor or estate, and subject to the debts and liabiliadministrator of the original sufferer; and ties of his testator to the defendants in ermoney awarded by the court of claims to ror. such a representative was held by this court to belong to the next of kin, to the exclusion of assignees in bankruptcy, upon the ground that the act expressly so provided. 26 Stat. at L. 897, 908; Blagge v. Balch, 162 U. S. 439 [40: 1032]. The words "legal representatives" or "per[473]sonal representatives" have also been used as designating executors or administrators, and not next of kin, in acts of Congress giving actions for wrongs or injuries, causing death. Act of April 20,1871 (17 Stat.at L.15,chap.22, § 6); Rev. Stat. § 1981; Act of February 17, 1885 (23 Stat. at L. 307, chap. 126); Stewart v. Baltimore & Ohio Railroad Co. 168 U. 8. 445, 449 [42: 537, 539]. E. Judgment affirmed. H. HUBBARD, Assignee of the Union v. J. KENNEDY TOD et al. (See 8. C. Reporter's ed. 474-504.) Failure of pledgees to sustain their alleged rights as purchasers at a sale set up as a defense will not affect their rights as pledgees, when they stand on all their rights and have not been put to an election. 2. A pledge is discharged by the voluntary 3. 4. 5. The mere fact that a person who negotiates securities is an officer of a corporation does not call for an inference that he is acting as such in that transaction. A secret equity in securities pledged by a person who has been empowered to do so by a corporation cannot be set up by it as against the pledgee. One seeking the affirmative ald of equity for relief against an alleged usurious agreement must himself do equity by tendering or offering payment of what is justly due. The act of June 4, 1888, chap. 348, now 1. before the court, is entitled "An Act for the Relief of the Estate of C. M. Briggs, Deceased," and confers upon the court of claims "jurisdiction to hear and determine the claim of the legal representatives of C. M. Briggs, deceased," for the proceeds, in the treasury of the United States, of cotton owned by him. The only conditions which the act imposes upon the right of recovery are that the petition shall be filed in the court of claims within two years; that that court shall find that Briggs was in fact loyal to the United States, and that Morehead's assignment of the cotton to Briggs was made in good faith; and that if it shal! find that the assignment "was intended only as security to said Briggs for indebtedness, and against contingent liabilities assumed by him for said Morehead, judgment shall be rendered for such portion of the proceeds of said cotton as will satisfy the debts and claims of said Briggs to secure which said assignment was given." The "debts and claims," in this last clause, manifestly include both classes of debts previously mentioned, namely, the direct "indebtedness" of Argued April 22, 25, 1898. Decided October Morehead to Briggs; and the "contingent liabilities assumed by him for said More. head," including the claims of the defendants in error, specified in the written agreement executed by Briggs contemporaneously with the assignment, and the amount of each of which has been ascertained by the court below. The act of Congress nowhere mentions heirs at law, or next of kin. Its manifest 6. Usury between the parties to a contract, or defect of power of a corporation engaged in the transaction, will not prevent the purchaser of securities from being a holder in good faith as against another corporation which attempts to set up a secret equity. [No. 24.] 17, 1898. N WRIT OF CERTIORARI to the United O`States Circuit Court of Appeals for the |