The United States v. Collins. anchors, and can, while abroad, be furnished with proper and sufficient ones, to be brought to the United States duty free. The motion for a new trial is denied. THE UNITED STATES vs. EDWARD K. COLLINS, WILLIAM BROWN AND OTHERS. Under the facts of this case, the Government of the United States has no right to withhold from a party who had contracted with it to perform a mail service by sea, a portion of the pay provided for by the contract. Under the act of June 27th, 1848, (9 U. S. Stat. at Large, 241,) the power of the Postmaster General to impose a fine on a contractor for the transmission of mails to and from foreign countries, for any unreasonable or unnecessary delay in the departure of the mails, or in the performance of the trips, is limited to the cases and for the causes specified in the Act. A recommendation made by the Postmaster General to the Secretary of the Navy, to make a deduction from the pay of a contractor, on the ground that a portion of the service was performed by a steamer not of the class stipulated for in the contract, is not the imposition of a fine, within the terms of that Act. Where the creditor of a steamship company was proceeding to sell its steamers under an execution issued by a State Court, and the Government of the United States applied to this Court to restrain such sale, on the ground that it had liens on the steamers, under chattel mortgages for advances made to build them, and a sale under the mortgages required a prior notice of six months: Held, that the rights of the execution creditors were superior to those of the Government, so far at least as to allow them to sell the vessels subject to the lien of the Government. Whether the granting by this Court of an injunction to stay such sale, is not forbidden by 5 of the Act of March 2d, 1793, (1 U. S. Stat. at Large, 334,) which prohibits the Courts of the United States from granting an injunction to stay proceedings in any Court of a State, quere. (Before HALL, J., Southern District of New York, April 1st, 1858.) The United States v. Collins. THIS was an application for a provisional injunction. against William Brown and others, creditors of the New York and Liverpool United States Mail Steamship Company, who had obtained judgments upon their demands against that Company, in the Courts of the State of New York, and had issued executions thereon to the Sheriff of the city and county of New York, to restrain and prevent the sale, under such executions, of the mail steamers Atlantic and Baltic, upon which vessels it was claimed that the United States had liens, under certain deeds of trust or chattel mortgages, for moneys advanced towards building and completing those vessels. Theodore Sedgwick (District Attorney,) for the plaintiffs. Charles O'Conor, Francis B. Cutting and Clarkson N. Potter, for the defendants, HALL, J. It is not alleged that the judgments upon which the executions were issued were fraudulently obtained, or that there is any reason to doubt, that the demands upon which they were rendered, were legally and justly due to the plaintiffs in such executions. Indeed, no collusion whatever is alleged, and neither fraud nor bad faith is imputed to any of the defendants. The claim of the United States is based on the allegation, that they have a lien for advances upon the steamships named; and the equitable ground upon which the motion for an injunction is based, may be very briefly stated, in the very language of the bill. That language is as follows: "and the plaintiffs further show, that they have reason to believe, and do believe and apprehend, that if the said steamships are sold, any purchaser or purchasers of the said steamships will have the power to remove, and may remove, the same out of the jurisdiction of this Court and of the United States, and in that case the plaintiffs would be wholly remediless." The defendants, by their affidavits and by other papers read in opposition to the motion, strike at once at the founda The United States v. Collins. tion of the plaintiffs' rights, and insist that there is no longer any legal or equitable lien upon the Atlantic and Baltic, under the deeds of trust or chattel mortgages, because the lien for such advances has been, or should be, fully cancelled by the Secretary of the Navy. That officer has, as they allege, withheld from the owners of such steamships an amount due to them for mail service rendered to the Government, much larger than that now claimed by the United States; and they produce a copy of an opinion of Mr. Attorney General Black, dated June 4th, 1857, and given at the request of the Secretary of the Navy, in which, after an elaborate examination, he decides that, upon the case presented to him, and which certainly was not a stronger one against the Government than that presented upon this motion, the amount now claimed by the Steamship Company was improperly, and without authority, withheld. After a careful reading of this opinion of the Attorney General, I cannot but assent to his conclusion, that the deductions made from the sums claimed by the Steamship Company for mail service, have not been legally made. Perhaps I might properly refuse the injunction in this case without stating any reasons for my judgment beyond those furnished by the very full and elaborate opinion of the learned Attorney General; and certainly a Court of Equity should require very clear and satisfactory evidence that the Attorney General had mistaken either the facts or the law of the case, before interposing, by injunction, to prevent the due execution of the final process of another Court, issued in behalf of an honest creditor, to enforce his adjudicated and admitted rights, upon the mere ground that the execution of such process, and the enforcement of such rights, might possibly, or would probably, prevent the Government from taking legal or other proceedings to enforce a claim which its highest lawofficer had deliberately declared to be unfounded. It may, however, give more satisfaction to the parties and their counsel, if I state some of the reasons on which I base my opinion. The United States v. Collins. It is unnecessary to state in detail the terms of the original contract for the building of the steamships which have been known as the steamships of the Collins Line, or even to give at length the deeds of trust, or chattel mortgages, under which the United States now claim. It has not been contended that the bill in this case can be sustained upon the ground that there has been a failure to perform the agreements contained in the original contract, and that the Government has become entitled to an uncertain sum by way of damages; and the claim now made by the Government is based entirely upon the assumption that there is a balance due the United States for the moneys advanced under such deeds of trust, or chattel mortgages. Those deeds of trust were severally intended as security for the advances made under them in pursuance of an Act of Congress authorizing such advances, and requiring the repayment thereof to be secured by a lien on such ships, in such manner as the Secretary of the Navy should require. They have been regarded as mortgages, as they are in substance; and it is alleged in the bill that they have been duly and annually filed in the office of the Register of the City and County of New York, as required by the laws of New York, to make them valid and continuing liens, as chattel mortgages, against judgment creditors and subsequent incumbrancers. By the first of those deeds of trust, the then owners of the steamships Pacific (since totally lost at sea) and Atlantic, did bargain, sell and convey the said steamships, with all their tackle, apparel and furniture, to the trustee therein named, upon trust, nevertheless, that the said owners were to retain the possession of such steamships, and employ them in carrying the mails, &c.; and if, after the expiration of one year from the commencement of their employment in the mail service, under the existing contract with the United States, being required thereto in writing by the Secretary of the Navy, they should fail to repay in money, or to refund out of their compensation for mail service, for one year, or out of the value of said vessels, if, before the expiration of one year, they should be taken into the service of the United VOL. IV.-10 The United States v. Collins. States, such outstanding balances as might be due on account of such advances, and the interest thereon, then the said trustee, being required so to do by the Secretary of the Navy of the United States, should, after advertising, for six months, in two newspapers published in the City of New York, the time and place of such sale, proceed to sell at public auction, for cash, the said steamships, &c., and, out of the proceeds of said sale, pay, first, the expenses of executing such trust, and secondly, such unsatisfied balances of advances, &c. This is the substance of the provisions of that deed of trust, so far as the same appear to me to be material to the questions presented upon the present motion; and the provisions of the deed of trust in regard to the Baltic, though somewhat different in form and language, are, in substance, very nearly the same. By those provisions, the rights and the remedies of the United States as against the vessels are precisely declared and limited; and, although it may now be seen that more summary proceedings for enforcing the repayment of the advances, by the sale of the ships mortgaged, would be more beneficial to the United States, if its claim for the large balance now demanded could be sustained, a Court of Equity cannot reform the contracts and introduce provisions which were never assented to by the parties, or intended by them to be embraced therein. The United States insist that there is a balance of $115,500 due for advances made under those deeds of trust; and the defendants insist that there is a larger amount due to the Steamship Company for mail service in the year ending on the 31st March, 1857, which they are entitled to set-off, and which the Government is legally and equitably bound to set-off, against the balance now claimed, so far as such set-off may be necessary, in order to extinguish the alleged indebtedness to the Government. The Government, on the other hand, insists, that the Secretary of the Navy has fully paid for the mail service rendered, and that nothing is now due therefor. The mail service for which compensation is so claimed, was agreed to be rendered by a contract made with |