297 F. 758 | 2d Cir. | 1924
(after stating the facts as above). The •Conron Bros. Company, which sought successfully in the court below to assert a lien for supplies furnished, is a New York corporation, maintaining an office in the city of New York. It is a wholesale deal•er in beef, poultry, butter, and eggs. The Hudson Navigation Company, the defendant, was the sole owner of certain steamers which it •employed on the Hudson river in the carriage of passengers between New York and Albany. The supplies were furnished in the summer and fall of 1920. This company is hereinafter referred to as the Navigation Company, and after the latter passed into the hands of receivers, which it did by the order of February 15, 1921, an order was entered on April 16, 1921, which provided that all creditors of the Navigation Company must appear and prove their claims on or before May 2, 1921. This time for presentation of, claims was by an order of the court subsequently extended to July 20, 1921.
On August 8, 1922, Conron Bros. Company gave notice of its intention to apply to the court on August 17, 1922, for leave to file its claims against certain steamers owned by the Navigation Company, and to file them nunc pro, tunc as of July 20, 1921. It gave written notice that such claims were “entitled to a priority or preference in "payment by reason of their constituting maritime''liens against the steamers, or for leave to file its libels upon said claims in admiralty •against said steamers and thereafter proceed against the same in rem.”
On May 16, 1923, the District Court, overruling the master’s report, entered an order which adjudged that Conron Bros. Company had maritime liens upon' the vessels for supplies furnished, and the receiver was directed to pay the sums due on account of the liens aforesaid, and it denied the motion for leave to file libels in admiralty against the steamers. It also directed the receiver to set aside out of the sums in his hands a special cash deposit of $8,500, and to hold the same as security for the payment of the amount due to Conron Bros. Company, claimant, with interest and costs, in case of the affirmance of the order.
The sums which were found due and directed to be paid by the order were as follows: To the' steamer Fort Orange, to the extent of $2,012.51, with interest thereon from September 17, 1920. To the steamer Rensselaer, to the extent of $2,300.93, with interest from November 27, 1920. To the steamer Trojan, to the extent of $2,467.-31, with interest from November 23, 1920.
From this order the Farmers’ Doan & Trust Company, as trustee, •and the National Commercial Bank & Trust Company of Albany, as trustee, have both appealed. Neither the Hudson Navigation Company, which went into receivership and is the defendant herein, nor the receiver, have appealed.
“Any person furnishing repairs, supplies, towage, use of dry dock or marine railway, or other necessaries, to any vessel, whether foreign or domestic, upon the order of1 the owner of such vessel oi¡ of a person authorized by the owner, shall have a maritime lien on the vessel, which may be enforced by suit in rem, and it shall not be necessary to allege or prove that credit was given to the vessel.”
It is admitted that Conron Bros. Company furnished to the steamers Fort Orange, Trojan, and Rensselaer, at the request of the Navigation Company, through its purchasing agent, certain meat and other food supplies, which were fit, proper, and necessary for the victualing of the crews of these vessels and for meals furnished to the passengers carried by the said steamers which were owned and operated by the aforesaid company. There is no question but that for the supplies so furnished .in the city of New York Conron Bros. Company were entitled, under the above act of Congress, to a maritime lien on the vessels, there being a balance remaining unpaid for the supplies furnished of $6,780.75. For this balance the Navigation Company gave its notes. The date, maturity, and amount of these notes were as follows:
Dates. Maturities. Amounts.
- October 20, 1920. February 21, 1921.....................•......$2,000.00
December 20, 1920:' February 20, 1921.......■.................... 1,000.00
December 23, 1920. February 21, 1921........................... 882.98
December 23, 1920. March 21, 1921........................... 882.97
January 20, 1921. April 20, 1921........................... 2,000.00
Total................................. $6,765.95
It was agreed at the’time of the acceptance of the notes that, if they were not paid, the right to libel the vessels was not surrendered.
The latest date on which any of the supplies were delivered to any of the vessels was November 27, 1920. The cause of action certainly accrued at least as early as that date. But Conron Bros. Company appears to have taken no steps to enforce its rights until August 8, 1922, when it gave notice of its intention to move for leave to file its claim, and that the motion would be heard on August 17, 1922, or as soon thereafter as counsel could be heard. It moved to be permitted to file its claims nunc pro tunc as of July 20, 1921, and claimed that it was entitled to a preference in payment on the theory that it had a maritime lien against the vessels. The District Court referred the matter, as we have seen, to a special master, who reported that the claimant was not entitled to enforce a maritime lien, and was entitled only to the allowance of the claim as a general creditor. It was the master’s opinion that the claimant had lost its lien by laches, as more
While tire general maritime law of the United States has always given the materialman a lien upon a foreign vessel which he supplied with necessaries, it is well settled that it gave him no such lien upon a domestic vessel. The Lottawanna, 21 Wall. 558, 22 L. Ed. 654. To remedy this omission a number of the states, including the state of New York, passed statutes providing liens for necessaries supplied to domestic vessels. Article 4 of chapter 33 of the Consolidated Laws of New York makes provision for such a lien for provisions and stores furnished within that state for the use of such a vessel, and section 83. fixes the duration of such a lien. Its language is:
“Every lien for a debt shall cease if the vessel navigates the western or northwestern lakes, or either of them, or the St. Lawrence river, at the expiration of six months after the first of January next succeeding the time when the debt was contracted, and in case of any other vessel, at the expiration-of twelve months after the debt was contracted. * * • ”
It is clear, therefore, that at the time of the enactment of the Merchant Marine Act of 1920 the New York law imposed a statute of limitations of one year upon the enforcement of liens on “domestic” vessels navigating the Hudson river, as these vessels did. The courts of admiralty act upon the maxim, “Vigilantibus non dormientibus subveniunt leges.” “This is the constant practice of courts of admiralty,” as stated in Benedict’s Admiralty (4th Ed.) § 515. The Supreme Court in The Key City, 14 Wall. 653, 660, 20 L. Ed. 896, declared the law of the admiralty respecting the defense of laches in the enforcement of maritime liens. In that case Mr. Justice Miller, writing for the court, said:
“1. That while the courts of admiralty are not governed in such cases by any statute of limitation, they adopt the principle that laches or delay injhe judicial enforcement of maritime liens will, under proper circumstances, constitute a valid defense.
“2. That no arbitrary or'fixed period of time has been, or will be, established as an inflexible rule, but that the delay which will defeat such a suit must in every case depend on the peculiar equitable circumstances of that case.
“3. That where the lien is to be enforced to the detriment of a purchaser for value, without notice of the lien, the defense will be held valid under shorter time, and a more rigid scrutiny of the circumstances of the delay, than when the claimant is the owner at the time the lien accrued.”
It has been held in numerous cases that a state statute of limitations does not apply to maritime liens. Coburn v. Factors’ & Traders’ Ins. Co. (C. C.) 20 Fed. 644; The Queen (D. C.) 78 Fed. 155; The Lauretta (D. C.) 9 Fed. 622; The Robert Gaskin (D. C.) 9 Fed. 62; Brown v. Jones, 2 Gall. 480, Fed. Cas. No. 2,017; Willard v. Dorr, 3 Mason, 91, Fed. Cas. No. 17.679; H. B. Foster, 3 Ware, 167, Fed. Cas. No. 6.291; Griswold v. The Nevada, 2 Sawy. 145, Fed. Cas. No. 5,839; The Platina, 3 Ware, 182, Fed. Cas. No. 11,210.
The District Judge, reversing the special master, in his opinion states that the provision of the New York statute which declares that “every lien for a debt shall cease at the expiration of twelve months after the, debt was contracted” has been superseded by subdivision P of section 30 of the Merchant Marine Act of 1920, heretofore cited herein, and which declares that a person furnishing supplies -to a vessel shall have a maritime lien upon the vessel. The District Judge said that in the case of a foreign vessel a person furnishing supplies would be entitled within this jurisdiction to enforce his lien at any time within six years, and he declared that, as the act of Congress now gave a lien against the domestic vessel for necessaries furnished, he concluded that the design was—
“to put domestic vessels on a parity with foreign vessels, and to render the-former liable for its debts, ,to the same extent, and for as long a time, as the latter were accustomed to be dealt with in the admiralty.”
*765 “This section shall not he construed to affect the rules 9f law now existing in regaTd to * * * laches in the enforcement of liens on vessels.” Comp. St. Ann. Supp. 1&23, § 8146% ppp.
The New York statute, limiting the period for filing the libel to 12 months, was a rule of law then existing in regard to laches; and in our opinion the District Judge, in giving the construction he has to the section, has affected “the rules of law now existing in regard to * * * laches in the enforcement-of liens on vessels.” The'statute specifically retained the existing rules of laches, and under the rules then existing the right to enforce this lien on a domestic vessel within the jurisdiction of the Southern district of New York ceased at the end of 12 months.
Prior to the enactment of the Merchant'Marine Act of June 5, 1920, one furnishing supplies to a domestic vessel in the Southern district of New York had no lien, as we have seen, under the general maritime law. Such lien as existed was dependent upon the statutory law of New York, and it existed only for the period the statute prescribed, and that was for 12 months only; and where a local statute gave a lien against a vessel for supplies furnished in the home port it could be enforced only in the admiralty courts of the United States'. The lien was enforced exclusively in the federal courts. The J. E. Rumbell, 148 U. S. 1, 13 Sup. Ct. 498, 37 L. Ed. 345. And as the right to the lien in such cases was derived solely from the "local statute, it existed no longer than the statute prescribed.
The learned District Judge, in his opinion in the court below, has called attention to a number of similar statutes which have been enacted in other states, and has pointed out that they differ in fixing the period during which the lien continues. He shows that in some of them the life of the lien is for 6 months, in others 1 year; in others 2 years, and in others until the debt is paid. He adds that:
“With, such differences existing in state legislation, it is submitted that, with the use of such statutes as standards of laches, the maritime law could not operate, even upon the same subject-matter, with any fair degree of uniformity, which is most desirable and of great advantage.”
We do not for a moment question that it is most desirable that the admiralty law of the United States should be uniform and consistent “on all subjects of a commercial character-affecting the intercourse of the states with each other or with foreign states,” as was said by Justice Bradley in The Lottawanna, 21 Wall. 558, 575, 22 L. Ed. 654, and since has been often repeated. But what the District Judge has overlooked is that the local statute applies only to domestic vessels of the state which enacted the statute, and that it has nothing whatever to do with vessels which belong to other states or to foreign states; and his argument proves too much, for, carried to a logical conclusion, it would have prevented the federal courts from giving any effect whatever to a local statute creating a right to a lien on a domestic vessel for supplies furnished it in the home port, as some states had such statutes and, others had not, and in those which had the period of time was not uniform.
The claimant had two courses open to it. It might have brought an action in personam or one in rem asserting a maritime lien. After
Order reversed.