written subcontract with the Root Manufacturing Company for materials, in which the Root Company in the fullest terms renounced all lien on its own behalf and contracted that all under it should do the same. Monthly payments were to be made on account and final payment within forty days after the contract was "fulfilled.”

In 1911 the Root Company notified the railroad that it was not being paid and that it would not furnish more material unless the railroad would see that it was paid. The railroad gave the assurance and the Root Company continued to furnish the materials called for by its contract. Seemingly the payments continued to be unsatisfactory and on November 18, 1911, after the Root Company had performed its contract there was unpaid $12,895.34. On November 25, 1911, the Root Company filed statutory notices of its intention to hold a lien upon the railroad's property for the amount then due. On January 12, 1912, after conferences of all parties concerned, a contract was made between the railroad, the Warren Company and its sureties, reciting controversy as to whether the Warren Company's contract had been performed, the filing of claims for liens and attachment suits for more than the sum admitted by the railroad to be due, and the railroad's assertion of its right against the surety companies. This contract fixed $42,000 as a sum to be paid by the railroad in full settlement of the mutual claims between it and the Warren Company, and provided that with $20,000 to be furnished by the surety companies the sum should be put into the hands of named trustees 'to be used in paying all lienable claims' growing out of the construction contract. If the fund was not sufficient to pay lienable claims in full, the surety companies were to furnish the additional money necessary. After all lienable claims were paid, the balance, if any, of the fund was to be paid first to reimburse the surety companies for their contribution

and after that to the Warren Company, subject to such attachments as might be filed against the sum.

On April 10, 1912, a written contract was made between the railroad, the sureties, the Warren Company and the Root Company, which recited the claim of the Root Company and that the railroad had money in its hands held back under its contract with the Warren Company for the purpose of protecting the road against liens, and agreed that $6,447.67 should be paid to the Root Company by way of compromise, that the Root Company should assign its claim to the trustee under the former instrument, surrendering to the Warren Company notes for sixty per cent. of its claim, and that the trustee should reassign to the Root Company the unpaid portion of its claim when attachments against the fund had been disposed of. The payment was made the same day and the Root Company executed a release as agreed. The sum was a larger percentage than will be received by the unsecured creditors of the Warren Company but a smaller one than that received by any other subcontractors with a lien. The petition in bankruptcy was filed on July 18, 1912, and the above payment was a preference if it stood as a payment to an unsecured creditor in the circumstances on the date when it was made.

The Circuit Court of Appeals held that the instrument of January 12 created an equitable lien that justified the payment, although it was of opinion that the lien asserted by the Root Company could not have been enforced. The plaintiff in error contends that the provision in favor of 'lienable claims' was confined to those that were secured by a valid lien. We express no opinion as to whether the lien of the Root Company asserted against the property of the railroad could have been defeated by its contract with the Warren Company notwithstanding the Warren Company's default. It is enough that we agree with the ultimate view of the Circuit Court of

Appeals. The agreement of January 12 was intended for practical purposes, to clear the railroad property from claims. It contemplated possible controversies as it provided for costs, but it did not require that every disputed lien should be fought out to the end. It was understood by the parties to extend to the compromise of claims that stood upon debatable ground, as was shown by the agreement under which the payment was made. It set aside a specific fund in a third hand to that end. All the parties acted in good faith. The $42,000 credited to the Warren Company as retained by the railroad was nearly twice what the railroad admitted to be due, apart from the compromise by which it secured the application of that sum to clearing its land. We are of opinion that there is no reasonable doubt that all parties were justified in the course adopted, that the instrument of January 12 created an equitable lien in favor of all alleged liens which the parties should deem to have color of right, and that the fund being thus appropriated and set aside it does not matter that the formal ascertainment of the specific beneficiary was made within four months of the bankruptcy proceedings. It was well understood before. The Root Company took part in the preliminary discussions and there can be no doubt that it was expected by all on January 12 that its claim, however disputed, would have to be dealt with when the fund came to be paid out. Decree affirmed.

Argument for Appellant.

241 U.S.

THE RAITHMOOR.1

APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES

FOR THE EASTERN DISTRICT OF PENNSYLVANIA.

No. 24. Argued January 26, 1916.-Decided May 1, 1916.

In determining whether the admiralty has jurisdiction over an incompleted structure in navigable waters to be used when completed as a governmental aid to navigation, its location and purpose are controlling from the time it was begun.

The jurisdiction that admiralty has over an incompleted structure in course of construction extends to that which is a mere incident to such construction.

The admiralty has jurisdiction of a libel in rem against a vessel for damages caused by its colliding with an incompleted beacon in course of construction in, and surrounded by, navigable waters and which when completed is to be used solely as a governmental aid to navigation.

186 Fed. Rep. 849, reversed in part.

THE facts, which involve the jurisdiction in admiralty of the District Court of a libel in rem against a vessel for damages caused by its colliding with an incompleted beacon in navigable water, are stated in the opinion.

Mr. H. Alan Dawson, with whom Mr. Edward J. Mingey and Mr. J. Rodman Paul were on the brief, for appellant:

The analogy to an unfinished ship supports the jurisdiction in the case. Ferry v. Bers, 20 How. 393; Edwards v. Elliott, 21 Wall. 532, 553; Graham v. Morton Transp. Co., 203 U. S. 577, distinguished, and see Phila. W. W. & B.

1 Docket title: Latta & Terry Construction Company v. British Steamship "Raithmoor," William Evans, Master and Claimant.

R. R. v. Towboat Co., 23 How. 209, 215; Atlantic Transport Co. v. Imbrovek, 234 U. S. 52, 59; Martin v. West, 222 U. S. 191.

A ship becomes such when she is launched, notwithstanding she is still unfinished. Tucker v. Alexandroff, 183 U. S. 424. This case is governed by The Blackheath, 193 U. S. 361, and the general principles therein announced and applied, and see The Arkansas, 17 Fed. Rep. 383, 387, as interpreted by Cleveland R. R. v. Cleveland S. S. Co., 208 U. S. 316; Ex parte Phenix Ins. Co., 118 U. S. 610, and Johnson v. Elevator Co., 119 U. S. 388.

Courts of Admiralty have taken jurisdiction for damages to the following structures for the reason that they were located in navigable waters and did not concern commerce on land. A beacon. The Blackheath, 195 U. S. 361.

Submarine cables resting on the bottom of navigable water, notwithstanding connection of the ends with the shore. Postal Tel. Co. v. Ross, 221 Fed. Rep. 105; The William H. Bailey, 100 Fed. Rep. 115; S. C., 111 Fed. Rep. 1006; The Anita Berwing, 107 Fed. Rep. 721; The City of Richmond, 43 Fed. Rep. 85; S. C., affirmed, 59 Fed. Rep. 365; Stephens v. West. Un. Tele. Co., 8 Ben. 502.

Temporary platform structure resting on girders sunk into the bottom of navigable waters. The Senator Rice, 122 Fed. Rep. 331.

Injury to a person on a pontoon fastened to the shore by a cable and used as a landing in connection with a ferry. The Mackinaw, 165 Fed. Rep. 351.

Floating bath-house moored to the shore by poles and chains. The M. R. Brazos, 10 Fed. Cas. No. 9898.

Floating drydock moored to a wharf. Simpson v. The Ceres, Fed. Cas. No. 12,881.

Raft of logs in tow of tug in navigable waters. The F. & P. M., 33 Fed. Rep. 511.