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Vol. II.]

EARP v. Boothe.

[No. 7.

money at any time within three years, while Boothe could not demand it until the end of the three years. Earp permitted the three years to elapse without having paid a dollar. At that time confederate money had perished, and was of course without value to be scaled, and the court, in adjusting the rights of the parties after confederate money, which was the subject of the loan, had passed out of existence, properly scaled the amount to its value at the time when it was advanced by Boothe.

As to the third assignment of error, to the effect that different terms ought to have been prescribed in the decree of sale, it is sufficient to remark that this decree was entered before the passage of the act requiring judicial sales of land to be made on a credit of one, two, and three years, and that, under all the circumstances of the case, the terms of sale, upon a credit of six and twelve months, were not unreasonable.

The court is therefore of opinion that there is no error in the decree complained of to the prejudice of the appellant. But it is contended by the learned counsel for the appellee, that there is error in the decree, to the prejudice of the appellee, to the extent that it declares that the contract between the parties (except as to the thirty or forty acres) is in effect a mortgage and not a conditional sale. The court is of opinion that the said decree is not erroneous in this respect.

It is often difficult to distinguish a conditional sale from a mortgage. The line of discrimination is confessedly indistinct, and each case must in a great measure depend upon its own peculiar circumstances. Generally speaking, the difference between them is that the one is a security for a debt, the other a purchase for a price paid, or to be paid, to become absolute in a particular event; or a purchase accompanied by an agreement to resell upon particular terms. The only difficulty is to ascertain the character of the transaction. It may be premised that where, upon the face of the transaction, it is doubtful whether the parties intended to make a mortgage or a conditional sale, courts of equity will always incline to consider it a mortgage, because, by means of conditional sales, oppression is frequently exercised over the needy, and they are too often made the vehicle of extortion. 1 Hilliard on Mortgages, 85, and cases there cited; Poindexter v. McCannon, 1 Dev. Eq. R. 375-6.

But this court has fixed the criteria which must govern in determining the character of the transaction, whether it is to be considered a conditional sale or a mortgage. In the case of Robertson v. Campbell & Wheeler, 2 Call, 421, Pendleton, J., said: "It is often a nice and difficult question to draw the line between mortgages and conditional sales. But the great desideratum, which this court has made the ground of their decision, is, whether the purpose of the parties was to treat of a purchase, the value of the commodity contemplated, and the price fixed; or whether the object was a loan of money, and a security or pledge for the repayment intended." This rule, laid down by Judge Pendleton, has been adopted in several cases decided by this court. See King v. Newman, 2 Munf. 40; Moss v. Green, 10 Leigh, 251; 2 Rob. Prac. (old ed.) 51, and cases there cited.

Tried by these criteria and the authorities above cited, it is plain, that (except as to the small tract of thirty or forty acres, which was purchased at a stipulated price, Boothe agreeing, as to that, to take the shoes of Earp,

Vol. II.]

ATLEE v. NORTHWESTERN UNION PACKET Co.

[No. 7.

as purchaser from Brightwell) the transaction between the parties must be treated, as to the main tract, as a mortgage, and not as a conditional sale. As to this part of the land, there was no negotiation as to the price. Nothing was said as to its value. The negotiation was for a loan of money; and it is so treated by the plaintiff in his bill. He says, after setting forth the purchase of the land by Earp from Brightwell: "Some time in the year 1862 the said Earp, finding he was unable to pay for it, applied to your orator to advance for him to Brightwell the said sum of $700.00, with interest," &c. The defendant, in his answer, says that he applied to plaintiff to borrow the money to pay Brightwell for the land purchased of him; and that the only terms upon which the plaintiff would agree to lend respondent was upon the terms set forth in the covenant filed with the bill. It is thus clear that the transaction between the parties was a borrowing and lending of money, and not for a sale of the land, except as to the small quantity above referred to. The only object of the negotiation was a loan of money, and security for its repayment. In such cases the contract will be treated as a mortgage, and not a sale. Such is the unwillingness of courts of equity to sustain forfeitures and limit the right of redemption, that it will never be done, in a case where it appears that the first object of the party was to borrow money and not to sell property.

The decree of the circuit court must be affirmed.

Decree affirmed.

SUPREME COURT OF THE UNITED STATES.

[OCTOBER, 1874].

ADMIRALTY. PIER ERECTED UPON RIVER BY RIPARIAN OWNER.

PILOTAGE.

ATLEE v. NORTHWESTERN UNION PACKET CO.

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1. A pier erected in the navigable water of the Mississippi River for the sole use of the riparian owner, as part of a boom for saw-logs, without license or authority of any kind except such as may arise from his ownership of the adjacent shore, is an unlawful structure, and the owner is liable for the sinking of a barge run against it in the night.

2. Such a structure differs very materially from wharves, piers, and others of like character made to facilitate and aid navigation, and generally regulated by city or town ordinances, or by statutes of the state, or other competent authority.

3. They also have a very different standing in the courts from piers built for railroad bridges across navigable streams, which are authorized by acts of Congress or statutes of the states. The structure in question is sustained by none of these considerations. 4. Pilots on the navigable rivers of the interior are selected, examined, licensed mainly for their knowledge of the topography of the streams where they are employed; and a constant and familiar acquaintance with the towns, banks, trees, &c., and the relation of the channel to them, and of the snags, sand-bars, sunken barges, and other dangers of the river as they may arise, is essential to the character of a skilful pilot. 5. Hence, the pilot in this case, who ran his vessel against a pier which he should have known was there, but did not, was in fault for want of that knowledge. He was also

Vol. II.]

ATLEE v. NORTHWESTERN UNION PACKET Co.

[No. 7.

in fault for hugging the shore, near where he knew the mill and boom of appellant were, in a dark night, when the current of the river would have carried him into safe and deep water further out.

6. Both parties being in fault, the damages are to be divided according to the admiralty rule in such case.

MR. JUSTICE MILLER delivered the opinion of the court.

This suit was originally a libel in admiralty in the district court of Iowa, founded on the sinking of a barge, for which the appellant was charged to be liable, on the ground that it was, caused by a collision with a stone pier built by him in the navigable part of the Mississippi River. The district court was of opinion that Atlee had not exceeded his rights as a riparian owner in building the pier where it was, in aid of his business as a lumberman and owner of a saw-mill on the bank of the river, the pier being part of a boom to retain his logs until needed for sawing. But that court was further of opinion that, by failing to have a light on this pier during a dark night, Atlee was guilty of a fault which rendered him in part responsible for the collision. As, however, the libellants were also found to be in fault, for want of care and knowledge of this obstruction on the part of the pilot, the district court divided the damages, and rendered a decree against Atlee for half of them.

The circuit court was of opinion that Atlee had no right to erect the pier where it was, and, seeing no fault on the part of the pilot, decreed the whole damage against Atlee.

The appeal from that decree was submitted to this court on printed argument November 26, 1873, and it was affirmed by an equal division of the court, which was at that time composed of eight members. On application for rehearing, this decree of affirmance was set aside, and a reargument ordered on the question whether the damages should be apportioned, both parties being in fault.

As the court is now full, when this latter argument is presented and the original decree of affirmance has been set aside, the court has reconsidered the whole matter, and I now proceed to announce its judgment.

No question is made of the jurisdiction of the district court sitting in admiralty.

The testimony is very voluminous, as is also the discussion of it by counsel, but we are of opinion that the decision of the case must rest mainly on undisputed facts, or those about which there is but little conflict of testimony.

We shall assume the truth of the facts which we state as the foundation of our judgment, without a reference to the witnesses by which they are proved.

The pier against which libellant's barge struck is about thirty feet square, constructed of stone and timber, located from one hundred and forty to fifty feet from the bank of the river, in water of the average depth of twelve feet at that place, being ten feet even at a low stage of the water.

At low water this pier is fifteen feet above the surface, and a foot or two in very high water. A part of the distance between the shore and the pier consists in low water of a sand-bar. Seven hundred feet above the pier this sand-bar tends to a point in the river made by the deposits

Vol. II.]

ATLEE v. NORTHWESTERN UNION PACKET CO.

[No! 7.

from a small stream called French Creek, and this point, in relation to the general course of the river, projects something further toward the centre of the channel than Atlee's pier does.

Three quarters of a mile above the pier is the levee, wharf, or landingplace of the city of Fort Madison.

The appellant was the owner of extensive saw-mills, and of the lands. on which they were located, bounded by the river at the point of the location of the pier for some distance above and below. He had built this pier, and another below it, as parts of a boom for receiving and retaining the logs necessary for use in his mill. Some kind of a boom was necessary to enable him to keep these logs safely and economically. No question is made but that if he had a right to build a pier at that place, it was built with due skill and care, and that he was blameless in every other respect, unless the absence of a light at night was a fault.

The first question, then, to be decided is, whether, in view of these facts, appellant could lawfully build such a pier at the precise spot where this was located.

The affirmative of this proposition was held by the learned judge of the district court, on the general ground of the analogy which the present case bears to wharves, levees, piers, and other landing-places on navigable rivers, which are built and owned by individuals, and which are projected into the navigable channel of the river farther than defendant's pier. The cases of Yates v. Milwaukee, 10 Wall. 497; Dutton v. Strong, 1 Black, 23, and The Railroad Co. v. Schurmeir, 7 Wall. 272, are cited in support of the proposition. Bridges, also, across these rivers, with piers, which clearly render navigation more hazardous, and which have by this court been held to be lawful structures, are cited in aid of this view. Gilman v. The City of Philadelphia, 3 Wall. 713.

What is the precise extent to which, in cities and towns, these structures owned by individuals, or by the town or city corporations, may be permitted to occupy a portion of what had been navigable water, and under what circumstances this may be done, it is not our present purpose to decide, nor to lay down any invariable rule on the subject. It is sufficient to say that we do not consider the case before us as falling within the principles on which that class of cases has been decided.

In all incorporated towns or cities located on navigable waters, there is in their charters, or in some general statute of the state, either express or implied power for the establishment and regulation of these landings.

This may be done by the legislature of the state, or by authority expressly or impliedly delegated to the local municipal government. In all such cases there is exercised a control over the location, erection, and use of such wharves or landings, which will prevent their being made obstructions to navigation and standing menaces of danger.

The wharves or piers are generally located by lines bearing such relation to the shore and to the navigable water as to present no danger to the vessels using the river, and the control which the state exercises over them is such as to secure at once their usefulness and their safety.

These structures are also allowable in a part of the water which can be used for navigation, on the ground that they are essential aids to navigation itself.

Vol. II.]

ATLEE v. NORTHWESTERN UNION PACKET Co.

[No. 7.

The navigable streams of the country would be of little value for that purpose if they had no places where the vessels they floated could land, with conveniences for receiving and discharging cargo, for laying by safely until this is done, and then departing with ease and security in the further prosecution of their voyage. Wharves and piers Wharves and piers are as necessary almost to the successful use of the stream in navigation as the vessels themselves, and are to be considered as an important part of the instrumentalities of this branch of commerce. But to be of any value in this respect, they must reach so far into deep water as to enable the vessels used in ordinary navigation to float while they touch them and are lashed to their sides. They must of necessity occupy a part of the stream over which a vessel could float if they were not there.

The structure of Mr. Atlee is sustained by none of these considerations. It is built far away from a city or town, and might as well be ten miles off as where it is, for any relation it has to the business or commerce of the city of Fort Madison, or any subjection to the control of the city authorities. His right to build this structure in the navigable channel of the river is unsupported by any statute of the state, general or specific, by any ordinance of a city or town, or by any license from any authority whatever.

Nor is there any claim or pretence that this pier is in aid of navigation. No vessel or water craft is expected to land there, nor are there any arrangements by which they can land or be secured or fastened. The size of the pier, its sharp corners, its elevation from the water, and its want of connection with the shore, forbid any such use of it. It is intended to receive nothing that floats but rafts, and no rafts but such as its owner designs to keep there permanently for his own use.

He rests his defence solely on the ground that at any place where a riparian owner can make such a structure useful to his personal pursuits or business, he can, without license or special authority, and by virtue of this ownership, and of his own convenience, project a pier or roadway into the deep water of a navigable stream, provided he does it with care, and leaves a large and sufficient passway of the channel unobstructed.

No case known to us has sustained this proposition, and we think its bare statement sufficient to show its unsoundness.

It is true that bridges, especially railroad bridges, exist across the Mississippi and other navigable streams, which present more dangerous impediments to navigation than this pier of Mr. Atlee's, and that they have, so far as they have been subjected to judicial consideration, been upheld. But this has never been upon the ground of the absolute right of the owners of the land on which they abutted to build such structures. The builders have in every instance recognized the necessity of legislative permission by express statute of the state, or the United States, before they ventured on such a proceeding. And the only question that has ever been raised in this class of cases is, whether a state could authorize such an invasion of the rights of persons engaged in navigating these streams. This court has decided that, in the absence of any legislation of Congress on the subject, the state may authorize bridges across navigable streams by statutes so well guarded as to protect the substantial rights of navigation. Gilman v. Philadelphia, supra. But Mr. Atlee has no such authority, and pretends to none.

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