the second mate, who was standing alongside the vessel's helm, which was being handled by a quartermaster under the direction of the affiant, of "hard astarboard," the vessel taking a course to port and clearing the tug and the Mainlander about 20 feet, they being left at that distance on the starboard side of the Celtic Monarch; that affiant afterwards learned that the call "hard astarboard" had come to the second mate of the vessel through the megaphone from the captain of the tug; that the affiant had no choice as to the time and manner in which his vessel should be taken in tow, all of those matters being entirely in the hands of the tug; that the towing gear was furnished by the tug, and fixed by the tug to the tow, at which time it appeared, with all its shackles and attachments, to be in good order and condition; and that there was no mishap in connection therewith during the towing, the same, and the appliances connected therewith, remaining in good order.

The affidavit of the master of the tug is the same in effect as that of the master of the tow in respect to the taking of the Celtic Monarch in tow, and as to the condition of the weather, and sets out that the Celtic Monarch had no pilot on board, and was navigated solely by the affiant, as master of the tug, with the exception that the ship simply held in position by her helm, so as to follow steadily as a tow following the tug; that the ship had no sail set, nor any means of propulsion other than the tug; that she was towed by a single hawser, the length of which from the stern of the tug to the stem of the tow was at least 160 fathoms, the towing hawser being 180 fathoms in length, and there being not over 10 fathoms inboard on the tow, and not over 5 or 6 fathoms inboard on the tug, and that the length of the hawser from the stern of the tug to the end of the jib boom on the tow was at least 155 fathoms; that the hawser consisted of a new 11-inch manila line, not over 60 days old, in perfect condition, and was safely shackled to the stern towing bitts of the tug, and attached to the tow by means of a 5-inch wire hawser, safely shackled to the manila line about 20 fathoms forward of the vessel's stem; that all the towing gear was strong and in first-class condition, and never parted at any time during the towing nor after the collision; that immediately after the collision, the tug herself being then actually making sternway, affiant ran to the stern of the tug and called through the megaphone to the lookout and master of the tow to put the helm of the tow hard astarboard, and at the same time the affiant immediately cast off the tow hawser from the stern of the tug, which could be done instantly, it being only necessary to pull out of the shackle the pin which held the manila line to the towing bitts; that the tow, with her helm so hard astarboard, and under the momentum caused by the towing, then directed a course to port in such a manner, and with great skill and seamanship, whereby the tow cleared both the tug and the Mainlander, passing over to port of both vessels, leaving them on her starboard side at a distance of about 20 feet at the time when the tow so succeeded in clearing them; that thereafter the affiant, with the tug, immediately saved the lives of all on board the Mainlander, which steamer sank in from 20 to 30 minutes; that, before

the Mainlander sunk, the affiant and his tug tried to save that ship by forcing her onto the beach, but was unable to do so, and thereafter affiant went to find his tow in the fog, and found her about 7:15 p. m. of the same evening, and brought her to anchor about one mile north by east of West Point.

The court below held the case to be such an one as its local rule 35 contemplates, and that it could be "finally disposed of in this summary proceeding, resembling a motion for judgment on the pleadings in an action at law." And in doing so the court further held that "the affirmative matter in the answer must be considered as true, so far as the same is not in conflict with the allegations of the amended libel." But admiralty rule 51, prescribed by the Supreme Court, requires such new facts to be considered as denied by the libelant. That rule is as follows:

"When the defendant in his answer alleges new facts, these shall be considered as denied by the libelant, and no replication, general or special, shall be allowed. But within such time after the answer is filed as shall be fixed by the District Court, either by general rule or by special order, the libelant may amend his libel so as to confess and avoid or explain or add to the new matter set forth in the answer; and within such time as may be fixed in like manner, the defendant shall answer such amendments."

In the event the libelant does not elect to confess and avoid or explain or add to such new matter, but to stand upon the issues raised by the provisions of rule 51, the burden of proof of such matter rests, as a matter of course, upon the party alleging it, and there can be no assumption of its truth without proof.

We can see no possible justification of the decree appealed from, unless it can be held that the amended libel contains no cause of action against the ship Celtic Monarch. But we are further of opinion that it cannot be properly so held, for the reason that the amended libel in effect alleges that the loss of the Mainlander was the result of concurrent negligent acts of the tug and tow, among which are the alleged failure of the Celtic Monarch to maintain a proper lookout, its alleged consent to be towed by an unseaworthy tug with an alleged improper and insufficient towline, and at an alleged excessive and negligent speed, under the conditions existing at the time, in respect to all of which allegations of the amended libel the claimant of the Celtic Monarch took issue by express denials set up in its answer. Upon those issues the libelant was clearly entitled to give evidence, and it is manifest that the merits of the cause could not properly be disposed of in advance of the determination of those issues.

The judgment appealed from is reversed, and the cause remanded to the court below for further proceedings not inconsistent with this opinion.

MASTERS v. SEELEY.

(Circuit Court of Appeals, Fourth Circuit. May 9, 1905.)

No. 550.

MASTER AND SERVANT-ACTION FOR

PEACHMENT.

SERVICES-EVIDENCE-WITNESSES-IM

Where, in an action for salary, plaintiff's claim that, after he received an increase in salary, defendant was also to pay his actual and necessary living expenses, as theretofore, which defendant denied, rested mainly on his own testimony, defendant was entitled to show on cross-examination of plaintiff as a witness that he had previously recovered a default judgment against defendant on the same claim, which had been set aside for fraud and collusion, for the purpose of impeaching him as a witness. [Ed. Note. For cases in point, see vol. 50, Cent. Dig. Witnesses, §§ 1133, 1134.]

In Error to the Circuit Court of the United States for the Western District of Virginia.

M. M. Caldwell and John C. Blair, for plaintiff in error.

J. F. Bullitt (A. A. Campbell, on the brief), for defendant in error. Before PRITCHARD, Circuit Judge, and BRAWLEY and WADDILL, District Judges.

PRITCHARD, Circuit Judge. On the 24th of March, 1898, George M. Seeley, the defendant in error, instituted an action at law for $12,069.67 against the New River Mineral Company, the plaintiff in error, in the Circuit Court of the United States at Abingdon, Va., for salary alleged to be due him as the manager and agent of the plaintiff in error at Ivanhoe, Va., at which place the company was engaged in the business of manufacturing iron. The plaintiff in error was incorporated under the laws of New York, and had its principal office in that state. A judgment by default was entered for the defendant in error, and on appeal to the Circuit Court of Appeals was reversed and set aside on the ground that the same was obtained by fraud and collusion. See New River Mineral Co. v. Seeley, 120 Fed. 193, 56 C. C. A. 505. On the 26th of December, 1898, the defendant in error, George M. Seeley, instituted the present action against the plaintiff in error in the circuit court of Wythe county, Va., for salary alleged to be due him as manager and agent for the New River Mineral Company in the sum of $56,000, which sum embraced the claim for salary alleged to be due, as well as items included in the original action between the New River Mineral Company and George M. Seeley. 120 Fed. 193, 56 C. C. A. 505. On petition the case was removed from the circuit court of Wythe county to the Circuit Court of the United States at Abingdon, Va. On October 20, 1903, the case was tried, and resulted in a verdict and judgment in favor of the defendant in error for the sum of $16,466.83.

When the company first employed defendant in error, it agreed to pay him the sum of $100 per month, and also his housekeeping expense account. This agreement continued until July 1, 1895,

when the salary of defendant in error was increased to $5,000 per annum. It is contended by defendant in error that under the new contract it was understood that the housekeeping expense should be paid by the company, as it had done under the former agreement. On the contrary, it is contended by plaintiff in error that, in view of the large increase in the salary of defendant in error, he was only to receive $5,000 in full for all services and expenses.

During the progress of the trial below, plaintiff in error propounded to defendant in error the following question (defendant in error then being upon the stand as a witness in his own behalf):

"Is it not a fact that in March, 1898, you instituted a suit in this court based upon the account referred to, and that in that suit you obtained a judgment by default, which was afterwards set aside by the Circuit Court of Appeals of the United States for the Fourth Circuit on the ground of fraud and collusion?"

The court sustained the objection of the defendant in error to this question, and to this ruling of the court plaintiff in error excepted, and filed an assignment of error.

The foregoing statement of facts is deemed sufficient for a proper understanding and disposition of the case.

The defendant in error, among other things, had testified that when his salary was increased to $5,000 per annum the plaintiff in error agreed that in addition thereto it would pay his actual and necessary living expenses. On the other hand, the plaintiff in error admitted that the company, through its governing body, had agreed to pay the sum of $5,000 per annum as a salary, but insisted that there was no agreement to pay the necessary living expenses of the defendant in error. Thus it will be seen that there was a sharp and well-defined controversy between the parties as to the validity of defendant in error's claim for actual and necessary living expenses. The jury was called upon to determine as to whether defendant in error's contention in that respect was true. Inasmuch as defendant in error on that point relied almost exclusively on his own testimony, it was important that the jury should have been afforded an opportunity to consider any evidence which tended to weaken or strengthen his testimony. Their verdict in regard to the particular item in controversy necessarily depended in a large measure upon the weight which they attached to the testimony of the defendant in error. In the first place, the question was competent because it had a tendency to impeach the character of the witness. It was not only competent for this purpose, but it was also relevant to the issue being tried, in that it related to the particular transaction out of which the controversy between the parties arose. Any evidence which would explain the conduct of the defendant in error at the time the contract was entered into, or any evidence which tended to show that he at any time subsequent thereto had dealt unfairly with the plaintiff in error in regard to the subject-matter of the controversy, was relevant, and should have been submitted to the jury as evidence to be considered by it in determining the weight it should give to the testimony of defendant in error in regard to the transaction about which he was testifying,

and as bearing upon the justice and bona fides of his claim. It is contended by defendant in error that at most the failure of the court to admit the testimony in question was harmless error. There are many instances in the trial of causes wherein such contention would be well founded, but in this case it is without foundation. The failure of the court to allow the question proposed by the plaintiff in error may have determined the matter in controversy in favor of the defendant in error. In other words, inasmuch as the defendant in error to sustain his contention relied mainly on his own testimony, any evidence which would have explained his conduct in relation to the transaction between the parties was material to the issue then being considered; and the refusal of the court to permit the jury to have the benefit of such evidence in their deliberation was not harmless error, but was of such a character as to materially affect the verdict which the jury was called upon to render. If this had been a case wherein the defendant in error had proved his case on the particular point in question by clear and convincing evidence, by witnesses other than himself, and the court, in its discretion, had refused to permit the question, under such circumstances it would in all probability have been harmless error. For the reasons stated, the judgment of the Circuit Court is reversed, with directions that a trial de novo be had. Reversed.

ROSENTHAL et al. v. McGRAW et al.

(Circuit Court of Appeals, Fourth Circuit. May 10, 1905.)

No. 514.

1. RECEIVERS-INCIDENTAL SERVICES RENDERED THIRD PARTY-RIGHT TO COM

PENSATION.

Certain partnerships owning and operating oil properties sold an interest therein under an agreement that the purchaser should receive his proportion of the earnings of the properties, without any charge for their services in operating the same. Subsequently the firms became insolvent, and a receiver was appointed, who continued to operate the properties. Held, that he was not entitled to compensation for the incidental services rendered to the purchaser of the part interest, nor was the insolvent estate entitled to charge therefor, but was required to divide the earnings. of the property in accordance with the contract.

[Ed. Note.-For cases in point, see vol. 42, Cent. Dig. Receivers, §§ 160-165.]

2. SAME-LIABILITY FOR INTEREST.

It was the duty of the receiver to pay over to the owner of the part interest his share of the earnings as made, and his failure to do so rendered him liable for interest on the sums withheld by him from the time of their receipt until he paid the same into court, and asked for directions as to their distribution.

[Ed. Note.-For cases in point, see vol. 20, Cent. Dig. Evidence, §§ 1193, 1198.]

3. EVIDENCE-HEARSAY-TESTIMONY AS TO CHARGES IN BOOKS OF ACCOUNT. The testimony of a witness as to an indebtedness, based upon his examination of charges made in books of account which were not made by him, and are in no manner authenticated, is hearsay and inadmissible. 138 F.-46