improvement, superior to that of Dyke Bros., notwithstanding the fact that their loan was made and their mortgage was recorded before the lien of the latter attached. The facts disclosed by the record upon which this conclusion is based are these: Harry E. Kelley was a broker and an agent for owners of real estate and for parties borrowing and loaning money in the city of Ft. Smith, in the state of Arkansas, where the mortgagor, Joe P. Matthews, resided. The mortgagees appear to be nonresidents of the state. Matthews made a written application to Kelley to procure for him a loan of $4,000 on his lot. By this application he appointed Kelley his agent, agreed to pay him for his services in procuring the loan, and that it was to be procured for the purpose of building a two-story stone or brick wholesale house upon the lot. Kelley obtained the loan of the mortgagees, and Matthews paid him out of the proceeds $200 for his services. For some ten years prior to this time Kelley had been the agent of the mortgagees to collect and foreclose their mortgages in the state of Arkansas, and had procured loans from them for borrowers who had appointed him their agent for that purpose by submitting to the mortgagees the written applications of the borrowers of the character made by Matthews in this case. This application was submitted to the mortgagees before they made the loan, and after it was accepted by them Matthews made his notes and mortgage on April 28, 1899. At the time when the mortgage was made Kelley placed the $4,000, which Matthews borrowed, to the credit of Matthews on his books, and subsequently paid it out on Matthews' orders. There was no evidence that the mortgagees had or exercised any control over the disposition of the money after the mortgage was made, on April 28, 1899, and the proof was undisputed that it was paid out upon the orders of Matthews. There was no understanding and agreement between Kelley and the mortgagees that the former should apply the money to the building of the house. But Matthews did not ask for the payment of all the money to him, all the parties to the transaction knew that it was borrowed for the purpose of erecting the house, and Kelley intended to see that it was applied to that purpose, for this was his practice when his customers borrowed money for the purpose of improving the property which they mortgaged. The lien of Dyke Bros. first attached to the property on June 19, 1899, more than a month after the mortgagees had transferred to Matthews the entire control of the money loaned and had recorded their mortgage. There is no controversy concerning the facts which have now been recited. But there is a direct conflict of testimony between two witnesses, M. T. Dyke and Harry E. Kelley, over the essential fact upon which Dyke Bros. relied to maintain their estoppel, and which is now to be considered. Mr. Dyke testified that after he procured the contract to furnish some of the lumber for this building, and before he delivered any of it, he asked Kelley: "What about the pay on it?' and he says, 'I have about $1,500 in my hands belonging to Mr. Matthews, and I will see that you get your money out of it;'" that he would not have furnished the lumber unless Kelley had made this statement, and that he did furnish it in reliance upon this conversation. Mr. Kelley testified that he never had any such conversation with Dyke, and that he never made

any such statement to him, and there is no other evidence in the case on the subject. The referee who heard these witnesses, observed their demeanor, and weighed their characters found that no such conversation took place, and that if it had it could not have estopped the mortgagees from insisting that the lien of their mortgage was superior to that of Dyke Bros. The district court reversed the finding of fact and conclusion of law of the referee, and rendered the decree which has been recited. Was this action warranted by the law and the evidence when this case came before the district court?

Let us consider first the question of fact. The mortgage was of record. The question whether or not this conversation took place had been submitted to and was decided by the referee under an agreement of the parties that he should determine all the questions of law and of fact relative to the superiority of their liens. The burden of proof was on Dyke Bros. to establish the conversation on which they relied by a fair preponderance of testimony, and they had no preponderance, for Kelley's testimony stands uncontradicted in the case by any witness except Dyke. More credence is and ought to be given. to a disinterested than to an interested witness, and Kelley had no interest while Dyke's claim was at stake upon his testimony. The finding of a fact dependent upon conflicting testimony by a judge, a master, or a referee, who sees and hears the witnesses testify, has every reasonable presumption in its favor, and may not be set aside and modified unless it clearly appears that there was an error or mistake upon his part. Tilghman v. Procter, 125 U. S. 136, 149, 8 Sup. Ct. 894, 31 L. Ed. 664; Callaghan v. Myers, 128 U. S. 617, 666, 9 Sup. Ct. 177, 32 L. Ed. 547; Clyde v. Railroad Co. (C. C.) 59 Fed. 394, 399; Missouri Pac. Ry. Co. v. Texas & Pac. Ry. Co. (C. C.) 33 Fed. 803, 806; Hennessey v. Budde (C. C.) 82 Fed. 541, 542.

And where by agreement of the parties a referee or special tribunal is selected, or by consent parties submit to him their controversies for determination, his finding of the facts "so far as it depends upon conflicting testimony, or upon the credibility of witnesses, or so far as there is any testimony consistent with the finding, must be treated as unassailable." Davis v. Schwartz, 155 U. S. 631, 636, 637, 15 Sup. Ct. 237, 39 L. Ed. 289; Kimberly v. Arms, 129 U. S. 512, 9 Sup. Ct. 355, 32 L. Ed. 764; Crawford v. Neal, 144 U. S. 585, 596, 12 Sup. Ct. 759. 36 L. Ed. 552; Furrer v. Ferris, 145 U. S. 132, 12 Sup. Ct. 821, 36 L. Ed. 649. The holders of these liens selected this referee as a special tribunal, and consented that the questions of fact and of law, which conditioned the rank of their liens, should be determined by him, and the rule announced by the supreme court in Davis v. Schwartz made his finding of fact here, which was supported by at least as much testimony as was deduced in opposition to it, conclusive of this issue. Kimberly v. Arms, 129 U. S. 512, 9 Sup. Ct. 355, 32 L. Ed. 764, and Davis v. Schwartz, 155 U. S. 637, 15 Sup. Ct. 237, 39 L. Ed. 289. In the latter case the supreme court after declaring that a finding of fact in such a case was conclusive if there was any testimony to sustain it, and after discussing and reiterating the rule in Kimberly v. Arms, disposed of a like question which had arisen in that case in these words: "As the reference in this case was by consent

to find the facts, we think the rule in Kimberly v. Arms applies, and, as there is nothing to show that the findings of fact were unsupported by the evidence, we think they must be treated as conclusive." It seems to me to follow from these rules and decisions that whether the occurrence of the conversation upon which Dyke Bros. claim an estoppel is founded is considered as an original question, dependent upon the preponderance of evidence, and upon the interest, character, and demeanor of the witnesses, or as the finding of the referee whom the parties had selected and agreed to constitute a special tribunal to hear and determine their controversies, the finding of the referee that no such conversation took place was both right and conclusive, and should have been sustained by the court below.

Nor is the conclusion of law that if this conversation had taken place the mortgagees would have been estopped thereby from maintaining the superiority of their lien more tenable. An estoppel is a prohibition of one from denying the truth of some statement or representation of fact which he has made and upon which another has rightfully acted. It is nothing more and goes no further. It never prevents one from maintaining the truth concerning any fact relative to which he has made no misstatement or misrepresentation. The truth which Dyke Bros. seek to estop the mortgagees from asserting is that the lien of their mortgage was superior to the mechanic's lien of Dyke Bros. That mortgage was of record, and Dyke Bros. were charged with knowledge of its priority and superiority. The mortgagees never made any statement or representation that it was not or would not be prior or superior to the lien of these materialmen. Kelley had neither power nor authority to discharge the lien of the mortgagees nor to subordinate it to the liens of others, and no statement or representation which he made could have had any such effect or could have been binding upon them.

Again, if Kelley had been the mortgagee and had made the alleged statement to Dyke, still he would not have made any statement or representation that the lien of the mortgagees was not superior to that of Dyke Bros. If he said, "I have about $1,500 belonging to Mr. Matthews, and I will see that you get your money out of it," that statement contained no averment or representation that the lien of the mortgagees was not superior to any lien which Dyke Bros. had or could acquire upon the lot and building. It was nothing but a statement that he had $1,500 of Matthews' money, coupled with a promise that he would pay Dyke Bros. out of it. It would not be a denial of this statement to prove the first lien of the mortgagees upon the lot and building. That fact tends in no way to show that Kelley did not have $1,500, or that he would not see that Dyke Bros were paid. Hence the statement cannot estop or prohibit the mortgagees from establishing and maintaining the fact that their lien is superior to that of Dyke Bros., a truth which is neither directly nor indirectly denied by the terms of Kelley's alleged statement.

Moreover, there is no foundation for an estoppel in the statement. It is not claimed that the averment that Kelley had $1,500 of Matthews' money in his hands was not true. The only part of the conversation which is asserted to be false or to form the basis of an estop

pel consists in the words, "I will see that you get your money out of it." But this is nothing but a promise, nothing but an executory agreement, and no estoppel can arise upon a promise or upon an executory contract coupled with a failure to perform it. The only remedy for such a failure is an action for specific performance or for damages for breach of the agreement. 2 Pom. Eq. Jur. § 808; Bigelow, Estop. p. 555; White v. Ashton, 51 N. Y. 285; Starry v. Korab, 65 Iowa, 267, 269, 21 N. W. 600; Railroad Co. v. Barnes, 64 Fed. 80, 82, 12 C. C. A. 48, 50.

A false representation or a concealment of an existing or present state of things is a sine qua non of an estoppel. Neither a promise nor a prophecy will sustain it, "for," as Mr. Bigelow well says, "if a party make a representation concerning something in the future it must generally be either a mere statement of intention or opinion, uncertain to the knowledge of both parties, or it will come to a contract with the peculiar consequences of a contract." In Maddison v. Alderson, 52 Law J. Q. B. 737, Lord Selborne said: "The doctrine of estoppel by representation is applicable only to representations as to some state of facts alleged to be at the time actually in existence, and not to promises de futuro, which, if binding at all, must be binding as contracts." So are all the authorities. There was no false statement, no misrepresentation of any fact, of any past or existing state of things, in the alleged conversation of Kelley, and hence it could not have worked an estoppel. The conclusion seems to me to be inevitable that under the evidence and the finding of the referee Dyke Bros. failed to establish the fact that Kelley made the statement upon which they relied, and that, if he had made it, it could not under the law have estopped the mortgagees from asserting the priority and superiority of their lien. No estoppel arose which forbade them from maintaining that the lien of their mortgage was superior in right to the mechanic's lien of Dyke Bros.

In my opinion the decree below should be reversed, with a direction to the court below to enter a decree in accordance with the finding of the referee that the mortgagees are entitled to a first lien upon the premises and the proceeds thereof for the entire amount of their mortgage debt and interest.

SOELBERG et al. v. WESTERN ASSUR. CO. OF TORONTO, CAN.

SAME V. THAMES & MERSEY MARINE INS. CO., Limited.
(Circuit Court of Appeals, Ninth Circuit. October 6, 1902.)

Nos. 748, 749.

1. MARINE INSURANCE-ACTION ON POLICY-EVIidence.

The plaintiff, in an action on a marine insurance policy, having the burden to prove a loss from a cause and to an amount that will authorize a recovery under the terms of the policy, such amount must necessarily be what remains after all proper deductions have been made, and the defendant may properly be allowed to show, on cross-examination of plaintiff's witnesses, the existence of liens on the vessel which were a charge on plaintiff's interest, not disclosed by their testimony in chief.

2. SAME-ACTION ON POLICY-SUFFICIENCY OF EVIDENCE.

Under the settled rule that, to entitle an insured to recover on a marine policy of insurance, the burden rests upon him to prove a loss from a cause insured against, and for an amount which renders the insurer liable under the terms of the policy, where a policy provides that the insured shall not have the right to abandon the vessel unless the amount which the company would be liable to pay under an adjustment as a partial loss "shall exceed half the amount hereby insured," and also that no partial loss shall in any event be paid unless amounting to at least 5 per cent. net, the insurer does not meet such burden of proof merely by evidence that the vessel received such injury during a voyage that she was obliged to seek a port of refuge, and that her value when repaired would not equal the cost of the repairs. Το establish either a constructive total loss, which gave the insured the right of abandonment, or even a partial loss, under such policy, there must be evidence from which a jury could find that the loss occurred from a peril insured against, and the amount of damage which resulted from such peril, as distinguished from such as may have resulted from the defective condition of the vessel, attributable to wear and tear or other ordinary causes; and this, whether the amount of loss to fix liability or to authorize abandonment is measured by the amount of the insurance or the valuation of the vessel.

8. SAME-ACCEPTANCE OF ABANDONMENT-ACTS DONE UNDER SUE AND LABOR CLAUSE.

Under the sue and labor clause of a marine policy, expressly providing that acts of the insured or insurer in recovering, saving, and preserving the property insured in case of disaster shall not be considered a waiver or an acceptance of an abandonment, where the insurer specifically refused to accept an abandonment of the insured vessel after she became disabled the action of its agent, in co-operating with the master in making temporary repairs, in assuming responsibility for removing the vessel to another port, and in procuring the money to pay the expense of such removal, which was furnished on a bottomry bond executed by the master, did not operate as an acceptance of the abandonment.

4. SAME-ACCEPTANCE OF PREMIUM AFTER NOTICE OF Loss.

The fact that the insurer of a vessel demanded and accepted payment of a premium note after receiving notice of loss and of abandonment does not relieve the insured from the necessity of proving the loss to entitle him to recover on the policy.

In Error to the Circuit Court of the United States for the Northern Division of the District of Washington.

These are actions at law to compel the payment of marine insurance. The parties hereto stipulated as follows: "That these two cases may be heard together; that there be no part of the record of the case against the Thames & Mersey Marine Insurance Company, Limited, printed, save and except the pleadings and bills of exceptions; that the record in both cases be printed as one record, to apply equally to either case; and that only one brief be required, which shall be a discussion of both or either of the cases, as may be applicable."

Plaintiffs in error make the following statement of facts: "A. H. Soelberg, for and as trustee of the Seattle & Alaska Steamship Company, having an insurable interest in the steamship City of Columbia, procured insurance from each of the defendants in error herein. The Western Assurance Company insured $15,000, on account of whom it may concern, in case of loss to be paid to A. H. Soelberg, for one year from August 25, 1898, upon his or their interest in the body, machinery, tackle, apparel, and other furniture of the ship, valued at $70,000. The total premium was $1,500, of which $600 was paid in cash and notes delivered for the deferred premium. The Thames & Mersey Marine Insurance Company insured $5,000 on account of A. H. Soelberg for the same period 'upon his or their interest' in the same steamer,