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vessel under the circumstances disclosed by the testimony, which rather shows that the libellant intended to rely upon the credit of the Insurance Company, with which it had been dealing for many years. It seems that before the libellant could rely upon such pledge, even supposing it was intended to be made, some inquiry should have been made of the owner, who could easily have been reached, and then it would have quickly learned that the Insurance Company was the underwriter only and had no authority apart from such as was incident to that relation, which apparently did not go to the extent of enabling it to pledge a vessel it was under obligation to save for the owner upon pain of indemnifying her for any loss that should arise from lack of care. Here there was no necessity for credit and it satisfactorily appears that no credit except that of the Insurance Company was in contemplation. No allusion having been made to the credit of the vessel, it follows that the credit of the Insurance Company was solely in view when the contract for raising was made. The Wandrahm (D. C.) 62 Fed. 935, affirmed 67 Fed. 358, 14 C. C. A. 414. It was there said (page 360 of 67 Fed., page 416 of 14 C. C. A.):

"When a person, whose relation to the vessel is unknown, but who is not the apparent agent of the owners, who are unknown, but who can readily be ascertained, makes a contract for something to be done upon the vessel, in the line of his known business as a mechanic, the co-contracting party is put upon inquiry to ascertain the powers which the stranger possesses. If no such inquiry is made, and nothing is said about the credit of the vessel, the inference is that the material man was satisfied with the security of the sole debtor, and the mere subsequent declaration of the libellant that he furnished the materials upon the credit of the vessel will not vary the conclusion which is to be drawn from his conduct when the contract was made."

Even if the libellant had a basis for a lien, the delay on its part, in enforcing it, has been such as to destroy it. The policy provided: "It is furthermore hereby expressly provided, that no suit or action against this company, for the recovery of any claim for loss or damage upon, under, or by virtue of this Policy, shall be sustained in any Court of Law or Equity, unless such suit or action shall be commenced within the term of twelve months next after the loss or damage shall occur; and in case any such suit or action shall be commenced after the expiration of twelve months next after such loss or damage shall have occurred, the lapse of time shall be taken and deemed as conclusive evidence and a conclusive defense against the validity of the claim thereby so attempted to be enforced"

No proceedings were taken by the libellant to enforce a lien until the libel was filed herein on the 31st day of July, 1903. A claim was made against her by the Insurance Company on the 29th of July, 1902, but it was immediately returned with the statement that she had nothing to do with it. On the 11th of September, 1902, the libellant sent a bill to the claimant's agent and he returned it and replied that the scow was insured in the Greenwich Company, which made the contract, and the libellant must look to that company for payment. It sent some dunning letters to her but did nothing further until the libel was filed, more than 12 months after the accident. In the meantime the claim against the underwriter was jeopardized if not lost under the clause above quoted. If, therefore, a recovery

should be allowed here, the insured would, by reason of the libellant's delay, be without a clear recourse against the underwriter. The laches on the part of the libellant would thus enable it to make the owner pay and permit the underwriter to escape, notwithstanding a recognition of liability by its conduct and an actual contract made with the libellant, without the claimant's sanction. The libellant should not be permitted to recover here.

The libel is dismissed.

MILLER & LUX v. RICKEY et al. WOOD et al. v. RICKEY LAND & CATTLE CO. MILLER & LUX v. RICKEY LAND & CATTLE CO. GIGNOUX et al. v. SAME. GALLAGHER v. SAME. AMES et al. v. SAME. NICHOL et al. v. SAME. CONWAY et al. v. SAME.

(Circuit Court, D. Nevada. June 25, 1906.)

Nos. 731, 790, 791, 793-797.

1. WATERS AND WATER COURSES-SUIT FOR DIVERSION OF WATER FROM STREAM -DEFENSES.

In a suit by an appropriator of water from a stream to enjoin diversion of the water by others above him in violation of his prior right, in which no damages are claimed, it is no defense for one defendant, as against the claim of complainant, that others inferior in right to himself are diverting a larger quantity of the water than is claimed by complainant.

2. COURTS-EQUITY-PLEADING-MATTERS ADJUDICATED ON PLEA—ÁVAILABILITY

ON ANSWER.

Matters which have been adjudged on a plea not to constitute a defense cannot be again set up in the answer.

[Ed. Note. For cases in point, see vol. 13, Cent. Dig. Courts, § 340.]

3. EQUITY-Cross-Bills-PLEADING DEFENSIVE MATTER.

In a suit to enjoin diversion of water from a stream, a cross-bill filled by a defendant against the complainant, which merely alleges priority of right in such defendant and diversion by complainant, and prays affirmative relief, sets up only matter of defense, which may properly be taken by answer and is demurrable.

[Ed. Note. For cases in point, see vol. 19, Cent. Dig. Equity, § 469.] 4. SAME.

A defendant cannot by calling his pleading a cross-bill, and praying for affirmative relief, require complainant to answer the same, where the matter set up therein is purely defensive.

[Ed. Note. For cases in point, see vol. 19, Cent. Dig. Equity, § 469.] 5. COURTS JURISDICTION OF FEDERAL COURTS-ANCILLARY PROCEEDINGS ON

CROSS-BILLS.

Cross-bills between defendants in a suit in a federal court to determine appropriators' rights in the waters of a stream, of which the court has jurisdiction by reason of the diversity of citizenship between complainant and defendants, are ancillary to the original suit, and within the jurisdiction of the court, without regard to the citizenship of the parties thereto.

[Ed. Note. For cases in point, see vol. 13, Cent. Dig. Courts, § 801. Supplementary and ancillary proceedings and relief in federal courts, see note to Toledo, St. T. & K. C. R. Co. v. Continental Trust Co., 36 C. C. A. 195.]

6. SAME FEDERAL AND STATE COURTS-PRIORITY OF JURISDICTION.

Where a federal court has first acquired jurisdiction of a suit to determine the respective rights of appropriators of water from a stream, it is its right and duty to protect such jurisdiction against interference, and it will enjoin a defendant from prosecuting a later suit brought by him against the complainant in a state court relating to the same subjectmatter.

[Ed. Note. For cases in point, see vol. 13, Cent. Dig. Courts, §§ 1345, 1418-1430.]

7. SAME PROTECTION OF PRIOR JURISDICTION-PURCHASER PENDENTE LITE. A corporation organized by a defendant in a suit in a federal court, and to which he has, pending the suit, conveyed his water rights, which are the subject of the litigation, takes the same subject to any orders which might be made therein against its grantor, and may be enjoined by the court from instituting and prosecuting a suit in a state court for the determination of the same rights.

In Equity. On exceptions to answer, demurrers to bill and crossbills, and motion for injunction pendente lite.

W. C. Van Fleet and W. B. Treadwell (Isaac Frohman, of counsel), for complainant Miller & Lux.

A. M. Kidd, for complainants and defendants Henry Wood et al. James F. Peck and Charles C. Boynton, for defendants Thomas B. Rickey and the Rickey Land & Cattle Company.

Cheney & Massey, for defendants the Mickey Ditch Company et al. Mack & Farrington and George S. Green, for complainants and defendants J. E. Gignoux et al., Patrick Gallagher, L. R. Ames et al., James Nichol et al., Patrick J. Conway et al., and Mary T. Shaw et al. John Lothrop, for defendants William R. Penrose et al.

HAWLEY, District Judge. In the multitude of questions involved in these cases it will be the endeavor of the court to group them together, as far as possible, under one general head. There are, however, certain motions and demurrers relating exclusively to the case of Miller & Lux v. Rickey et al. (C. C.) No. 731, 123 Fed. 604, 127 Fed. 573, which will first be disposed of. The general nature and character of this suit may be briefly stated as one in tort to obtain an injunction restraining the defendants from diverting the waters of Walker river above complainant's lands to its prejudice. No damages are asked for. Complainant interposed an exception to paragraphs 28 and 29 of defendant Rickey's answer to the bill of complaint for impertinence. This answer, after containing denials and admissions, sets up new matter, to the effect that certain rights to the water, which are alleged to be prior in point of time to those claimed by complainant, and, in paragraph 28, for further answer alleges, in substance, that below the place where he is diverting the water, and above the place where complainant is diverting the water, a large number of persons named in the answer, some of whom are defendants in this suit, are diverting a quantity of water from the Walker river greater than the quantity which complainant claims, and that their diversions and appropriations of the water are subsequent in point of time to those of the defendant Rickey, and also subsequent in point of time to those of the complainant. This allegation is not responsive to any of the allegations

contained in complainant's bill, and does not, of itself, constitute a defense to this suit. The question involved, so far as the defendant Rickey is concerned, is not whether other parties are diverting the water, but whether he has the right to divert it. If he establishes the fact that his own diversion of the water which he claims is prior in point of time to the appropriation and diversion of the water by the complainant, he has a complete defense to the suit, and if he does not establish that fact he should be enjoined in this suit from diverting the water to the prejudice of complainant. If defendant's diversion of the water was wrongful, he could have no defense as against the injunction on the ground that other persons were guilty of the same wrongful act. Such proof would be irrelevant and inadmissible. Evidence to prove such facts is only admissible on the question of damages. Here no damages are claimed. Gould v. Stafford, 77 Cal. 66, 18 Pac. 879.

The matters set up in paragraph 29 of the answer were previously set up by plea and overruled. I think the rule is well settled that such matters cannot be again set up in the answer.

In Pentlarge v. Pentlarge (C. C.) 22 Fed. 412, it was held that neither equity rule 39 nor the practice of equity courts outside of the equity rules would allow the defendants to set up in an answer matter which had on the plea been adjudged not to constitute a defense. The same principle is announced in Sharon v. Hill (C. C.) 26 Fed. 337,

341..

2. The next preliminary question to be disposed of is presented by demurrers to the cross-bills filed by three different corporations, the Mickey Ditch Company, the Fox Ditch Company, and the Greenwood Ditch Company, and a large number of individual defendants in No. 731, and the demurrers interposed to the cross-bills by divers and sundry others of the defendants. The different counsel representing the different defendants have not pursued the same course in filing their alleged cross-bills, but the controlling principles upon the points raised by the demurrers are substantially the same.

The complainant interposed a demurrer to all the cross-bills, substantially on the ground that no matter contained therein entitles the defendants to any relief in equity other than that to which they are entitled by their answers. In the group of defendants represented by the firm of Cheney & Massey they are all alike, and we select, for the purpose of illustration, that of the defendant the Mickey Ditch Company. It filed what is entitled "Answer and Cross-Complaint of Mickey Ditch Co.," and a separate paper entitled "Cross-Bill in Equity of the Mickey Ditch Co."

The first pleading proceeds in proper form as an answer to the bill of complaint, amounting to a complete defense, and then proceeds with what may be designated as proper matter for a cross-bill, which contains the same allegations as those in the answer, and further makes the following allegation, which distinguishes it from the answer:

"(11) That within three years last past said defendant Miller & Lux, a corporation, has wrongfully diverted the waters of the East Fork of said Walker River at divers places on said river, a large portion of which water

so diverted by them is never returned to the river; that they are now continuing the diversion aforesaid, and threaten to continue such wrongful diversion."

Then follows an averment that the diversions made by Miller & Lux are without right. In this connection it is proper to refer to the fact that the original complaint alleged:

"(21) That within three years last past the said defendants have, and each of them has, diverted the waters of the said Walker river at divers places on said river above the said lands of complainant, and above the points at which the said complainant so diverts said water, a large portion of which water so diverted by them is never returned to said river; and they are now continuing the diversions aforesaid, and have thereby deprived, and are now depriving, the complainant of a large portion of the said water to which the complainant is so entitled."

It thus appears that the complainant in the original bill is lower down. the stream than the defendants, and that the defendants' diversions of the water are at places on the Walker river “above the said lands of complainant."

The general principle is well settled that a cross-bill for affirmative relief must contain within itself sufficient averments to entitle the cross-complainant to the relief asked for, or for some equitable relief. A cross-bill must not be founded solely on matters which can properly be availed of by way of answer. The effect of a cross-bill is to compel the original complainant to file an answer thereto, while the answer only calls for a replication.

The contention in support of the demurrer is that all the defenses that can be made are contained in the answer, and that the cross-bills state no cause of action against the complainant; that the defendants, being above the stream from complainant, cannot complain of a diversion of the water by the lower owner, because there is no wrong or injury done by him to the defendants. The only relief which the cross-bills ask for, in addition to the relief asked for in the answer, is as prayed for:

"That your honors adjudge and decree that the rights of your erator in and to the waters so diverted and appropriated by it, as herein alleged, may be adjudged and decreed by your honors prior and superior to any right or rights of said defendant Miller & Lux, and that the title of your orator in and to said waters may be forever quieted, and that said Miller & Lux be forever enjoined and restrained from diverting any water from said river in such manner and to such extent as to deprive your orator of any of the water aforesaid, and that your orator may have such further or other relief as the nature of the case may require and to your honors may seem meet."

If the defendants are able to show that their appropriations and diversions of the water are prior in time to the appropriations and diversions of the water by Miller & Lux, the decree of the court would be against the complainant in the suit, and such a decree would, in effect, quiet the title of the defendants, and give them all the relief to which they are entitled.

The matters contained in the cross-bill annexed to the answer are, it seems to me, purely defensive in their nature and character, and can be and are set up in the answer, and the complainant, Miller & Lux, ought not to be required to put in an answer to such cross-bills.

146 F.-37

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