thus established. The libel does not require consideration of this point, but charges in common form negligence in mooring and leaving the barge in "an exposed, unsafe, and dangerous position." We agree with the trial court that this charge is sustained by the joint effect of the following considerations:

[1, 2] 1. It was some evidence of negligence that the navigators of respondent paid no attention to the official warnings of the northwest storm, which was the principal cause of libelants' damages. It is not held that mere failure to observe storm warnings or to obey them is conclusive proof of negligence; but it is evidence of a failure in that ordinary care and skill which is a master mariner's duty. In substance we agree with the remarks on this subject contained in The Salutation (D. C.) 239 Fed. at page 423. The evidence herein shows that the testifying masters considered it no part of their duty either to observe or give weight to the Weather Bureau's advice. This was an error; we think such duty exists.

2. Probably the proximate cause of the Nicholson's damage was the placing outside of her of the Erie lighter 262-F. When this was done, the weather was apparently getting worse and the storm about to burst. The mooring of this lighter against the Nicholson was not done by respondent, but by another tug, apparently acting under the orders of the agent for a steamship loading near by, to whom, however, respondent had intrusted the charge of its lighter 262-F. Plainly the owner of that lighter does not escape responsibility to third parties by employing or permitting another person to handle and move said lighter. For the purposes of this case it is respondent that placed the 262-F against the Nicholson and left her there, whatever may be the rights and remedies of the Erie Company over and against the persons performing this piece of carelessness.

3. It was further evidence of negligence that at a time when the danger was imminent, if some damage had not already been done, the railroad company did not more swiftly furnish assistance to any boat in its charge. A delay of two hours in sending a tug to South Brooklyn, when a high northwest wind was known to be injuring vessels in such an exposed position as is here shown, cannot be excused by anything in the present record.

For the foregoing reasons, the decree appealed from is affirmed, with interest and costs.

THE NIGRETIA.

(Circuit Court of Appeals, Second Circuit. December 11, 1918.)

No. 47.

SEAMEN 21-DESERTION-WHAT CONSTITUTES.

Where the master of a British vessel dropped overboard the original shipping articles which libelants signed in a British port and on arriving in United States libelants refused to sign new articles or to return to the vessel as directed by the master, held, that the master was justified in treating libelants as deserters who had forfeited their wages and effects under the British law, and libelants could not recover because the master refused their demand for half wages made thereafter pursuant to Rev. St. 4530 (Comp. St. § 8322).

Appeal from the District Court of the United States for the Southern District of New York.

Libel by Hassan Abdu and others against the steamship Nigretia, her engines, etc., claimed by the Limerick Steamship Company, Limited. From a decree for claimant, libelants appeal. Affirmed.

See, also, 161 C. C. A. 356, 249 Fed. 348.

Silas B. Axtell, of New York City (Vernon Sims Jones, of New York City, of counsel), for appellants.

Kirlin, Woolsey & Hickox, of New York City (L. De Grove Potter, of New York City, of counsel), for appellee.

Before WARD, ROGERS, and HOUGH, Circuit Judges.

WARD, Circuit Judge. This is a libel by six Arabians, members of the crew of the British steamer Nigretia, to recover wages, one month's extra pay, the value of their effects left on board, and damages. The claimant of the steamer defends on the ground that the libelants were deserters and as such had forfeited their wages and effects under the British law.

April 16, 1916, the libelants signed articles at Cardiff, Wales, for a period of two years. The master, while boarding his ship in the harbor of St. Nazaire, just before sailing for New York on the voyage ending December 1, 1916, dropped the shipping articles and some other papers into the sea. The British Consul at New York instructed him as a precautionary measure to draw up a substitute copy of the original articles and have the crew sign on again before him.

On the morning of December 13th, the day before the vessel sailed, the master took the crew to the Consul's office, where all signed on again except the libelants, who refused to do so unless paid their wages. in full to date. The relation of master and seamen continued notwithstanding the loss of the original articles, and the master refused this demand and ordered the libelants to return to the steamer. Instead of doing this, they went to counsel, who advised them to demand half wages under section 4530, U. S. Rev. Stat. (Comp. St. § 8322), which reads:

"Every seaman on a vessel of the United States shall be entitled to receive on demand from the master of the vessel to which he belongs one-half part of For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

the wages which he shall have then earned at every port where such vessel, after the voyage has been commenced, shall load or deliver cargo before the voyage is ended and all stipulations in the contract to the contrary shall be void: Provided, such a demand shall not be made before the expiration of, nor oftener than once in five days. Any failure on the part of the master to comply with this demand shall release the seaman from his contract and he shall be entitled to full payment of wages earned. And when the voyage is ended every such seaman shall be entitled to the remainder of the wages which shall then be due him, as provided in section forty-five hundred and twentynine of the Revised Statutes: Provided further, that notwithstanding any release signed by any seaman under section forty-five hundred and fifty-two of the Revised Statutes any court having jurisdiction may upon good cause shown set aside such release and take such action as justice shall require: And provided further, that this section shall apply to seamen on foreign vessels while in harbors of the United States, and the courts of the United States shall be open to such seamen for its enforcement."

Later on the afternoon of the same day the libelants, accompanied by an interpreter, met the master as he was leaving the Custom House after clearing the vessel. There is a dispute as to what occurred; the libelants saying that they demanded half wages, and the master saying that they simply demanded their money and he told them to return to the ship and he would take the matter up and straighten it

The libelants did not return to the ship but immediately filed this libel and the ship, which was ready to sail, having been released on stipulation, sailed down to the anchorage grounds in the lower harbor of New York, and proceeded on her voyage at 6 o'clock on the morning of the following day.

Judge Manton adopted the account given by the master held that the libelants were deserters, British Merchant Shipping Act of 1894, 57 and 58 Vic. c. 60, pt. II, § 221, and as such had forfeited their claims to wages and to their effects left on board. We concur in this conclusion. It is quite plain that the master was not obliged to waive, and did not waive, his right to treat the libelants as deserters who had terminated all relations with him and the ship by their previous conduct, whichever of the accounts he adopted.

The decree is affirmed, with costs.

SCOTT, Internal Revenue Collector, v. SCHWAB.

(Circuit Court of Appeals, Ninth Circuit.

January 6, 1919.)

No. 3130.

INTERNAL REVENUE 9 EXCISE TAX ON CORPORATIONS-NET INCOME"GAIN OR PROFIT."

Under Corporation Tax Act Aug. 5, 1909, where property is sold by a corporation at an advance over the original purchase price, the amount of such advance is a gain or profit received during the year, for the purpose of computing its net income.

In Error to the District Court of the United States for the Second Division of the Northern District of California; Frank H. Rudkin and William C. Van Fleet, Judges.

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Action by Edwin Schwab against Joseph J. Scott, as Collector of Internal Revenue. Judgment for plaintiff, and defendant brings error. Reversed and remanded, with instructions.

Annette Abbott Adams, U. S. Atty., and Frank M. Silva, Asst. U. S. Atty., both of San Francisco, Cal., for plaintiff in error.

Morrison, Dunne & Brobeck and R. L. McWilliams, all of San Francisco, Cal. (H. W. Clark, of San Francisco, Cal., of counsel), for defendant in error.

Before GILBERT, ROSS, and HUNT, Circuit Judges.

GILBERT, Circuit Judge. The defendant in error, as assignee of the National Ice & Cold Storage Company, brought this action to recover $1,897.97, alleged to have been wrongfully collected by the plaintiff in error as corporation excise tax for the year ending December 31, 1913. The corporation was organized in 1911 to carry on the business of the manufacture, purchase, and sale of ice, and the manufacture, purchase, sale, management, and operation of ice works, refrigerating plants, and cold storage houses. In February, 1913, it sold all of its property and assets. The selling price exceeded by $189,797.04 the cost price incurred in 1911. The tax on this gain, which was treated as income received during the year 1913, was paid under protest. A demurrer to the complaint was overruled, and judgment was entered for the defendant in error.

The court below, in overruling the demurrer and entering judgment, relied upon Gray v. Darlington, 15 Wall, 63, 21 L. Ed. 45, a case involving the construction of the Revenue Act of March 2, 1867 (14 Stat. 471, c. 169) and followed Gauley Mountain Coal Co. v. Hays, 230 Fed. 110, 144 C. C. A. 408. The Supreme Court in a recent decision reversed the Gauley Mountain Coal Co. Case (Hays, Collector, v. Gauley Mountain Coal Co., 247 U. S. 189, 38 Sup. Ct. 470, 62 L. Ed. 1061), and therein distinguished the Corporation Excise Tax Act of August 5, 1909 (36 Stat. 11, c. 6), from the Act of March 2, 1867, under which Gray v. Darlington was decided, and held that, where property is sold by a corporation at an advance over the original purchase price, the amount of the advance must be deemed a gain or profit for the purpose of computing income for taxation under the present law. That ruling is decisive of the present case, and it results that the judgment of the court below must be reversed.

It is unnecessary to consider the other ground of demurrer which is presented in this court, but which was not suggested to the court below, that under section 3477, Rev. Stats. (Comp. St. § 6383), the cause of action is not assignable.

The judgment is reversed, and the cause is remanded, with instructions to sustain the demurrer.

CENTRAL DIST. PRINTING & TELEGRAPH CO. v. FARMERS' & PRODUCERS' NAT. BANK OF SISTERSVILLE, W. VA. SAME v. JACKSON. JACKSON v. PARKERSBURG & O. V. ELECTRIC RY. CO. et al. (Circuit Court of Appeals, Fourth Circuit. December 5, 1918.)

Nos. 1625, 1626.

1. COURTS 385(4)-CIRCUIT COURT OF APPEALS-JURISDICTION.

The question, arising in a federal District Court, whether that court or a state court, by reason of priority of possession or control, has the right to dispose of property which is the subject-matter of litigation, is not one of jurisdiction, within the meaning of Judicial Code, § 238 (Comp. St. § 1215), but is reviewable by the Circuit Court of Appeals.

2. COURTS 493(2)—FEDERAL AND STATE COURTS PRIORITY OF JURISDICTION. By an equity suit in a state court of West Virginia by a judgment creditor to subject property of the debtor to the judgment and such other liens as may be proved as provided by statute, although no receiver is appointed, the court acquires exclusive possession or control of the property necessary to effectuate its decree as against a federal court in which a suit for a receiver is subsequently brought by a bondholder of defendant who is a party to the state suit or represented therein by the mortgage trustee.

Appeals from the District Court of the United States for the Northern District of West Virginia, at Parkersburg; Alston G. Dayton, Judge.

Suits in equity by Henry M. Jackson against the Parkersburg & Ohio Valley Electric Railway Company, and by the Farmers' & Producers' National Bank of Sistersville, W. Va., against Henry M. Jackson and others. From orders granting an injunction and directing a sale of defendant's property, the Central District Printing & Telegraph Company, otherwise known as the Central District Telephone Company, appeals. Reversed.

M. H. Willis, of New Martinsville, W. Va., for appellant.

Arthur S. Dayton, of Philippi, W. Va., and V. B. Archer, of Parkersburg, W. Va., for appellees.

Before PRITCHARD and WOODS, Circuit Judges, and CONNOR, District Judge.

CONNOR, District Judge. The transcript filed in this court discloses the following facts:

The Parkersburg & Ohio Valley Electric Railway Company, hereinafter referred to as the Railway Company, was incorporated under the laws of West Virginia for the purpose of constructing an electric railroad from Parkersburg to the Pennsylvania state line. It began the construction of the road during the fall months of 1904, constructing five miles, at the cost of over $50,000.

On November 1, 1905, the Railway Company executed to the Union Trust & Deposit Company, hereinafter referred to as the Trust and Deposit Company, a mortgage upon its property for the purpose of securing the payment of a bond issue of $100,000, of which $75,000

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