Berwind-White Coal Mining Co. v. Robinson Shipping Co.

299 F. 519 | 2d Cir. | 1924

HOUGH, Circuit Judge

(after stating the facts as above). [1] The appearance of the stipulator as an intervener cannot be recognized. The only difference in this regard between this case and that of Paulsen v. The Cartona (C. C. A.) 297 Fed. 827, is that the stipulator himself was permitted to intervene in this cause, instead of those who had given cross-security to the stipulator. It is just as true in this instance as it was in that of the case cited that the stipulator has no interest in the res, and therefore cannot be permitted to appear as an intervener. We have, however, heard and considered the argument, of the stipulator’s proctor as amicus curiae.

The ground for decision below and the whole argument in support thereof at bar is the asserted controlling effect of United States v. Carver, 260 U. S. 482, 43 Sup. Ct. 181, 67 L. Ed. 361. For the purposes of this case, there being no difference between the lien law as restated in the Merchant Marine Act of 1920, § 30 (41 Stat. 1000 [Comp. St. Ann. Supp. 1923, § 8146]4jjj et seq.]) and the Lien Law of 1910 (36 Stat. 604 [Comp. St. §§ 7783-7787]) it may be assumed that the Carver decision applies fully to cases arising (as did this one) before passage of the act of 1920.

We assume that this litigation arises under the law of this country as declared and established by the Lien Act, because the libel assumedly rests upon that statute, the answer admits in effect that the libel-ant furnished, or caused to be furnished, the necessaries in question, and no plea is made requiring investigation of the law of Great Britain, its colonies, or dependencies. Our sole inquiry is, therefore: Does the Carver decision apply ?

It is first to be observed that that decision relates to a chartered vessel, and so does The South Coast, 251 U. S. 519, 40 Sup. Ct. 233, 64 L. Ed. 386, and both of these ruling cases merely furnish commentaries (however important) as to the measure of diligehce laid upon one furnishing necessaries to a ship where the intended lienor knows, or by the exercise of reasonable diligence might know, that the ship in question was chartered, and by the exercise of the same diligence might ascertain the terms of the charter.

[2] The Buckhannon was not a chartered ship at all; she was owned absolutely by the claimants when the events giving rise to litigation occurred. She was a mortgaged vessel, but it is a point too familiar to need citation that the mere fact that there is a mortgage, and not a preferred mortgage, upon a ship, does not in the least prevent or limit the right of her. owner, or that owner’s lawful agents, to pledge the credit of the vessel by the incurring of a maritime lien. This is because the maritime lien is superior to the mortgage and takes no cognizance of the mortgage as such. •

[3] It is quite true that there had been a purchase agreement or contract for sale executed between the United States and the original purchaser of Buckhannon; but it is not shown that the grantee of that purchaser ever saw Or even knew of this agreement, nor does it appear that the conveyance from the government grantee to claimant-made any reference to the said contract of sale. Doubtless the claimant, as well as the rest of the world, was affected with knowledge of the mortgage by reason of its recording; but, as above pointed out, it is fundamental that the mere existence of this ttopreferred mortgage amounted-to nothing so far as the creation of maritime liens was concerned. It is also true that the mortgage contained a reference to the purchase agreement or contract of sale, which might have been traced into the private archives of the United States Shipping Board — this last must remain a supposition, and nothing more — -upon this record.

Those urging support of the decree below assert (as they must) that the decree is upheld by a proper interpretation of section 3 of the Lien Act (Comp. St. § 7785), which provides, inter alia, that the agents of an “agreed purchaser in possession of the vessel” may create a lien, but that there shall be no lien when the furnisher of necessaries knew, or could by exercise of reasonable diligence have ascertained, that “because of the terms of an * * * agreement for sale of the vessel” the person giving the order was without authority to bind the vessel therefor. It seems to us perfectly clear that, when the statute speaks first of an “agreed purchaser in possession of the vessel” as oné who may personally or by deputy cofifer a lien, and then requires the furnisher to exercise due diligence to investigate an “agreement for the sale of the vessel,” the reference of the two phrases must be to the same thing; i. e., the purchaser in possession-of the vessel must be there under the same agreement as that which the furnisher is required to investigate.

But the claimant and owner of this ship was not in possession under any agreement for the sale of the Buckhannon. Its predecessor in title and possession might possibly have been held to be in possession, not by virtue of his bill of sale, but under the antecedent agreement for sale. The doctrine of merger might render such a holding difficult as to claimant’s grantor, but as to this claimant there can be no doubt that he was in possession, not by virtue of any agreement for sale, but solely by an absolute grant or transfer from another and precedent private owner.

' No authority is presented or known to us applicable to the facts in this case. We are referred to cases of conditional sale,¹ to others of purchasers in possession under a contract of sale or “purchase agreement,”² and to numerous cases of charter (e. g., The Ascutney [C. C. A.] 289 Fed. 802; United States v. Rapid, etc., Co. [C. C. A.] 289 Fed. 803); but none of these cases covers the matter at bar.

We are of opinion (1) that the purchase agreement between the United States and its vendee did not affect, like a covenant going with land, a subsequent owner holding by absolute bill of sale (subject only to an ordinary mortgage) ; (2) that upon the true construction of the , third section of the Rien Act the owner and claimant of the Buckhannon was not at the time of the matters giving rise to this suit an “agreed purchaser in possession.” Therefore this case becomes the ordinary one of the owner of a mortgaged vessel pledging its credit in such a manner as to create a maritime lien. That there is nothing in the mere existence of such an unpreferred and nonmaritime mortgage to prevent the creation of a lien is not and cannot be seriously contested. That the persons creating the lien, by asking for the supplies, were entirely within the act, is admitted.

The decree below is reversed, with costs, and the cause remanded, with directions to ascertain libelant’s damages.

1 The Northern No. 44, 1923 A. M. C., 622; Id. (C. C. A.) 296 Fed. 119, 1924 A. M. C. 541; The Princess Matoika, 1924 A. M. C. 303.

2 Delbert v. United States (C. C. A.) 289 Fed. 805; The Hoxie, 1923 A. M. C. 937.

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