Olympia Shipping Corp. v. Morse Dry Dock & Repair Corp.

KNAPP, Circuit Judge. In June and July, 1919, at the port of New York, the appellee, Morse Dry Dock & Repair Corporation, furnished “repairs, supplies, and other necessaries” to the steamship Parthian, then owned by the appellant, Olympia Shipping Corporation, to the claimed amount and value of $30,000.17, for which it filed a libel against that vessel in the Southern District of New York. Afterwards and pending trial an arrangement was made by which the appellee agreed to accept $25,000 in full-—$15,000 in cash and $10,000 in short-time notes—on condition that the notes be paid at maturity. Accordingly, in January, 1920, on stipulation of the parties, an order was entered discontinuing the suit. The notes were not paid, and after all of them became due this libel in personam was filed in the Eastern District of Virginia, where jurisdiction was obtained by attachment of the schooner Ruth É. Merrill, belonging to appellant, the libelant suing for its original bill of $30,000.17, less the $15,000 which had been paid. The defense set up was the compromise and settlement of the claim in the New York suit, the contention being made that the court below was without jurisdic [200] tion because the appellee’s only remedy was an action on the unpaid notes in a court of common law. But the treasurer and general manager of appellee, with whom the compromise arrangement was personally made, testified that he was unwilling to discharge the lien on the Parthian unless the entire $25,-000 was paid in cash, that he consented to take the notes only on condition that if they were not paid when due “the claim would revert to its original condition as to amount, lien,” etc., and that this was agreed to by the appellant; and the latter’s treasurer and general manager, who represented it in the negotiations, virtually admitted that the notes were accepted on that condition. [1] The mere statement of these facts is sufficient to show that the appeal is without merit. When a suit is discontinued the situation is the s^me as though it had never been brought. Loeb v. Willis, 100 N. Y. 231, 235, 3 N. E. 177; Hanson v. Hanson, 234 Fed. 853, 856, 148 C. C. A. 451. In the latter case it is said: “There can be no such thing as a discontinuance on the merits, because on discontinuance the merits are not in issue or determined. Such an order is not a judgment nor a bar.” [2] The agreement to accept $25,000, partly payable in notes, was upon the express condition that the notes should be paid as they matured, and the failure to meet that condition left the appellee free to return the dishonored notes, as it did at the trial, and to take any lawful proceeding to collect the original' debt. An accord without satisfaction is a nullity. And it is well settled that the acceptance of notes in payment of a repair bill, under the facts here established, does not waive or discharge a maritime lien or preclude the repairman from enforcing such a lien. The Emily B. Souder, 84 U. S. (17 Wall.) 666, 21 L. Ed. 683; Robins Dry Dock & Repair Co. v. Chesbrough, 216 Fed. 1210, 125, 132 C. C. A. 365. The decree appealed from will be affirmed.