Under a reference to ascertain the facts, the referee has reported that the first act of bankruptcy alleged was not committed. I have no doubt that this finding is right, and it is sustained.

The referee has further reported that the alleged bankrupts were insolvent on March 23, 1906. There is no dispute that on that day a receiver was appointed by the Massachusetts superior court, in a suit in equity, brought by Edwin H. Buzzell against them, and was directed to take charge of all their property. There is no dispute that they were insolvent, as the referee finds, when this decree was made. The referee also finds that the receiver was put in charge of their property because of insolvency, and that the second act of bankruptcy has thus been committed. The question remaining to be decided by the court is whether or not this conclusion was warranted by the evidence. The bill in equity above referred to alleged that the complainant was a creditor of the alleged bankrupts; that they owed large sums of money to other parties, were unable to meet their obligations as they became due, and were, in fact, insolvent; that they owned property to the amount of about $2,000 available for the payment of their debts; and that their debts amounted to about $8.000. It further alleged that an attachment had been placed upon all their property which they were unable to dissolve; that the attaching creditor had petitioned for a sale of most of the goods attached as perishable; that a large proportion thereof had been sold; that the assets were being wasted and depreciated by disproportionate expense then being incurred in relation to them; that the alleged bankrupts had abandoned their business, leaving no one to look after it; that there was danger of a multiplicity of suits against them, involving wasteful expense without fair division of the assets; that the title to part of the assets was disputed; and that no act of bankruptcy had been committed, so that the creditors could not avail themselves of the bankruptcy act.

The prayer of the bill was that a receiver might be appointed to take possession of the alleged bankrupt's property, and continue their business until the property could be economically disposed of, to convert it into cash, to collect the debts, and to distribute the proceeds ratably among the creditors; also for such other relief as the court might deem meet.

The decree appointing the receiver recited that the alleged bankrupts appeared and consented to the appointment. It did not further recite any reasons for making the appointment, and the grounds upon which the court acted in making it must therefore be ascertained from the bill; no further pleadings appearing to have been before the court.

The bill in my opinion sufficiently alleged the insolvency of the alleged bankrupts. In view of their appearance and consent to the decree, the alleged bankrupts are to be regarded as having admitted their insolvency for the purposes of the decree to which they consented. Their undisputed insolvency was therefore one of the facts upon consideration of which the court made its decree. It was not the sole ground of the decree. Had the bill asked for a receiver upon the ground of insolvency alone, it seems that under the laws of Massachusetts the court would not have been authorized to make the appointment. Falmouth Bank v. Cape Cod Ship Canal Co., 166 Mass. 551, 569, 44 N. E. 617. But that it was one of the grounds upon which the decree was made I see no reason to doubt, nor that it was a necessary ground, without which the appointment would not have been made. Without the allegation of insolvency the bill could hardly have been said to state a case for equitable relief. Therefore I think the referee was right in holding that the receivership was established "because of insolvency" within the meaning of section 3A (4) of the bankruptcy act (Act July 1, 1898, c. 541, 30 Stat. 546 [U. S. Comp. St. 1901, p. 3422]), as amended in 1903 (Act Feb. 5, 1903, c. 487, 32 Stat. 797 [U. S. Comp. St. Supp. 1905, p. 683]). The referee has cited nearly all the cases in which the language there used to define the act of bankruptcy in question has been discussed or construed. With the view which he has taken of them I agree, and I find nothing in them which requires a different conclusion from that which he has reached. Zugalla v. Mercantile Agency, 142 Fed. 927, 74 C. C. A. 97, published apparently since the referee's report was prepared, was a case where a temporary receiver had been appointed ex parte upon a bill charging

insolvency, before the existence of insolvency had been determined, and pending a hearing upon the question of its existence. It was there held that the appointment had not been made "because of insolvency." But in the present case there had been no controversy and there was to be none, either in regard to the existence of the alleged insolvency or in regard to the appointment of the receiver, and the receiver was authorized by the decree not merely to preserve the status of the property pending a hearing, but to dispose of it and distribute the proceeds among the creditors.

Adjudication ordered.

JONES & LAUGHLIN STEEL CO. v. MONONGAHELA &
WESTERN DREDGING CO.

(Circuit Court of Appeals, Third Circuit. January 21, 1907.)

No. 36.

CONTRACTS-CONSTRUCTION-WHEN QUESTION FOR JURY.

The construction of a written contract for dredging which was ambigu ous in respect to the extent of the work to be done thereunder, rendering it necessary to resort to extrinsic evidence, was a question for the jury. [Ed. Note.-For cases in point, see Cent. Dig. vol. 11, Contracts, §§ 767770.]

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

For opinion below, see 144 Fed. 312.

George C. Wilson and Burleigh, Gray & Challener, for plaintiff in error.

Reed, Smith, Shaw & Beal, Charles Gulentz, and David A. Reed, for defendant in error.

Before DALLAS and GRAY, Circuit Judges, and LANNING, District Judge.

LANNING, District Judge. This case involves This case involves the construction of a contract entered into July 22, 1904, by the defendant in error, the plaintiff below, and the plaintiff in error, the defendant below. The defendant owns and operates coke ovens on the right bank of the Monongahela river, at or near Pittsburgh, Pa. Previous to 1902 it had deposited refuse materials on the bank of the river and out into the river to such an extent as to interfere with navigation. It had also erected some coke ovens on the bank thus made. On March 24, 1902, the defendant made application to the Secretary of War for a modification of the harbor line of the river according to a plan accompanying the application. The United States engineer at Pittsburgh, who had charge of the matter, suggested a line different from the one described in the defendant's plan, and the defendant by a letter dated July 3, 1902, agreed to the one so suggested, saying:

"If the line suggested by you is approved, we will agree within two years from the date of such approval to remove the material placed by us in the river at our lower block of coke ovens on the riverward side of the line you have suggested and above the specified slope. As this work will necessitate the removal of some of our coke ovens, we do not feel that we should undertake to do it in a shorter time on account of the difficulty in getting contractors to build the ovens to take the place of those that will be destroyed."

The suggested harbor line was approved by the Secretary of War on August 15, 1902. On April 20, 1904, the United States engineer wrote to the defendant, reminding it of its agreement of July 3, 1902, and saying:

"The time limit will expire August 15th next. This office is of the opinion that the time remaining to do this work is not more than sufficient within which the work can be done, and consequently the work should be promptly started."

Thereafter the defendant entered into negotiations with the plaintiff, which resulted in the following proposition from the plaintiff to the defendant:

"July 22, 1904.

"Jones & Laughlin Steel Company, Pittsburgh, Pa.-Dear Sirs: Referring to the matter of the dredging which you desire to have done near your coke ovens in the First Pool, Monongahela river, as shown to our Mr. Smoot by your Mr. Williams, we beg to make you the following proposition: We will dredge, take away and dispose of material dredged, for the sum of $1.25 per cubic yard, scow measurement. This includes blasting of bank where necessary and all labor and expense in connection with this work, which we understand is to be done in accordance with government specifications. We are ready to begin this work on the morning of the 28th instant. We agree to protect you and save you harmless from any damage to property or any claims from accident to or loss of life of any of our or your emplyees, caused by negligence on our part. Figuring on the number of yards as stated to our Mr. Smoot, we can complete this work within thirty (30) days after date of beginning. As to the matter of scow measurement, we would like to have your engineer in charge agree upon the measurement of the scows each day with the man in charge of the dredge or dredges placed on this work by our company. Monongahela & Western Dredging Company,

"Yours very truly,

"W. T. Smoot, Vice President."

The defendant accepted this proposition and the plaintiff did its work under the contract thus made. The only specifications of the government then in existence were the specifications approved on August 15, 1902. On July 29, 1904, the day after the plaintiff had commenced its work, the defendant applied to the United States engineer for a modification of the slope of the bank along the harbor line, saying:

"We find that the adopted harbor line slope of 1 on 3 is unsuitable to our use of the harbor. The more nearly vertical this slope is the better it is for our

All material from the river and to it is handled by machinery, and the nearer such machinery is to the water the better. We therefore respectfully request that a change in the harbor line slope be authorized as follows: The foot of the slope at pool full surface to remain the same as now established, viz., 42 ft., from the harbor line. From point I to point II, as shown on map herewith, the slope to make an angle of 65 degrees with horizontal plane and extend to top of bank: above I and below II, this slope to gradually change into the present established slope in any reasonable manner you may think proper. This change of harbor line slope would change in no way the pol width of the Monongahela river. It would bring the top of the bank closer to the river and thereby facilitate our use of the stream, and would at the same time save to this company about 100 coke ovens worth about $1.000.00 apiece."

This application was forwarded to the chief of engineers, United States army, at Washington, on August 6, 1904, with the following recommendation by the United States engineer at Pittsburgh:

"I recommend that the Jones & Laughlin Steel Co. be authorized to substitute between points I and II, as shown on accompanying map, a bank slope

of 65 degrees for the slope of 1 on 3 as now established, with transition slopes. above and below said place as described on the map."

The chief of engineers approved the recommendation on August 10th, and on August 22d the Secretary of War granted permission to the defendant "to substitute a bank slope of 65 degrees for the slope of 1 on 3 as now established, with transition slopes above and below, on the right bank of the Monongahela river about four miles above its mouth, Pittsburgh harbor, Pa., between the points marked I and II on map attached hereto." Point I was the beginning of the slope at the top of the bank, and point II was in the slope at the surface of the river at pool full.

The disputed point between the parties is whether, by the contract entered into by them, the plaintiff was to dredge the bank below point II; that is, below the surface of the water at pool full. The defendant has paid the plaintiff for all material removed above pool full, and this action resulted in a verdict and judgment for the plaintiff for the amount removed below pool full. It is clear that the revised government specifications of August 22, 1904, did not change the specifications of 1902 as to the bank below pool full, except in so far as transition slopes were thereby made necessary. It is also clear that the defendant was not released by the revised specifications from the duty of removing from the bank below pool full whatever was required to be removed by the specifications of 1902. But the defendant contends that the work to be done under the contract of July 22, 1904, was merely the removal of the material back to the proper slope of the bank at the harbor line and above pool full. This contention is based on the clause of the contract providing that the work should be done"as shown to our Mr. Smoot by your Mr. Williams." The plaintiff, on the other hand, contends that it agreed by its contract to do the work "in accordance with government specifications." These two clauses gave the contract an ambiguous meaning, to explain which oral testimony was properly admitted on the trial. The testimony shows that Mr. Smoot and Mr. Williams met on the ground on July 20th, two days before the date of the contract, to confer about the work. Mr. Williams then submitted to Mr. Smoot a blueprint of a plan for modifying the specifications which had been approved by the Secretary of War in 1902, by changing the location of the harbor line and changing the bank slope from the top of the bank down to the surface of the river at pool full. These proposed changes, though not submitted to any government official until July 29th, are the same that were approved August 22d. The blueprint submitted to Mr. Smoot on July 20th also showed, by shading, the part of the bank above pool full that was to be removed. No part below pool full was shaded, nor were there any lines on the blueprint indicating that any excavation below pool full was to be made. Mr. Williams says that in the conversation of July 20th he told Mr. Smoot that the defendant wanted the plaintiff to remove only the part that was indicated by the shading on the blueprint. But Mr. Williams admits that he put into the contract of July 22d the words "government specifications," although he says that he then understood that the blueprint "covered.

what the government required." How he could have had that understanding when the proposed changes had not yet been submitted to any government official he does not explain. He also admits that he told Mr. Smoot on July 20th "that the government had insisted on our doing certain work, and that it was up to us to do it." Mr. Smoot says that Mr. Williams told him that the work "was to be done to the satisfaction of the government engineers," and that Mr. Gould, the government's inspector, would supervise it."

In the light of this testimony the jury evidently found that it was the intention of the parties by the contract of July 22d to provide for the removal of all the material required to be removed by the government specifications. Accordingly, they rendered a verdict in favor of the plaintiff for removing the material below the surface of the river at pool full. The disputed question was one of fact, and not of law. It could not have been properly withheld from the jury. We have carefully considered the 32 specifications of error, and find in them nothing to justify a reversal of the judgment. They all relate, more or less directly, to the theory of the defendant that the contract can be construed only as one for the removal of material above pool full. As this theory is an erroneous one, none of the specifications can be sustained.

The judgment of the Circuit Court will be affirmed, with costs.

DES MOINES NAT. BANK v. COUNCIL BLUFFS SAVINGS
BANK et al.*

(Circuit Court of Appeals, Eighth Circuit. October 16, 1906.)

No. 2,267.

1. CHATTEL MORTGAGES-CATTLE-DESCRIPTION.

While certain cattle were on a range in Colorado, the manager of the corporation owning them attempted to mortgage them under a description: "125 head of three year old steers owned by and in the possession of Green Cattle Co. in section 21, Township S2, Range 40, in Crawford County, Iowa." At the date of the mortgage the cattle company had no cattle in its possession on the land so described, but it had in Colorado a herd of three and four year old steers, 125 of which were afterwards shipped to Iowa to R.. who subsequently became a bankrupt, and were placed on the land so described as the property of R. These steers were afterwards mortgaged by R. under a description, "125 head of three and four year dehorned steers, branded," etc., and located on section 16. township 82, range 40. Held, that the description in the cattle company's mortgage was insufficient to create a lien on the steers mortgaged by R. [Ed. Note.-For cases in point, see Cent. Dig. vol. 9, Carriers, §§ 90-92, 96, 104.]

2. SAME.

The lien of the cattle company's mortgage did not attach to the 125 head of "three and four year old dehorned steers," which finally found their way to the land described in the first mortgage, under a provision thereof covering after-acquired or after-located property.

3. LANDLORD AND TENANT-LANDLORD'S LIEN-STATE STATUTES-EFFECT.

Code Iowa, § 2992, provides that a landlord shall have a lien for his rent on all the personal property of the tenant which has been used or kept on the rented premises during the term, not exempt from execu* Rehearing denied January 10, 1907.