Plaintiff Saint John Marine Co., owner of the vessel MTV Saint John, entered into a time charter party with Afram Lines (International) Inc., which in turn entered into a subvoyage charter party with the Agency for International Development, an agency of the United States Government. The time charter party included a common provision that secures the charter hire by giving the shipowner a lien on the subfreights owed to Afram. It is stipulated that the shipowner gave notice to the Government that Afram had failed to pay an amount due on the charter hire and that the shipowner had a contractual hen on subfreights that the Government had not yet paid over to Afram. The Government has not disputed that a private party in its shoes would be liable tо Saint John Marine. The question presented *41 is whether, in these circumstances, the shipowner can enforce its contractual hen against the Government. The Government argues that the hen operates as an assignment of a claim against the Government and is therefore rendered unenforceable by the Assignment of Claims Act, 31 U.S.C. § 3727 (the “Anti-Assignment Act”). Saint John Marine argues that the Anti-Assignment Act does not affect claims asserted (as this claim is asserted) under the Suits in Admiralty Act (“SIAA”), 46 U.S.C.App. §§ 741-752.
The Government appeals from a final judgment entered by the United States District Court for the Southern District of New York (Kram, J.) in favor of Saint John Marine. Although we agree with the Government that the Anti-Assignment Act apphes to claims asserted under the SIAA, we affirm the judgment on the ground that the Anti-Assignment Act does not affect assignments effected by operation of law.
BACKGROUND
A. Facts.
This case was submitted for trial on a set of stipulated facts. With certain interpolations, the facts set forth here are drawn virtually word for word from that stipulation.
Saint John Marine, a private Greek corporation, is the owner of the M/V Saint John, a general cargo vessel. Saint John Marine time chartered the vessel to Afram Lines (International) Inc. (“Afram”), a private corporation, on September 21, 1990. The terms of the time charter at clause 18 included a provision for Saint John Marine’s lien on subfreights as follows: 1
That the Oimers shall have a lien upon all cargos, and all subfreights and subhires for any amounts due under the charter, including general average contributions and the Charterers to have a lien on the ship for all monies paid in advance and not earned, and any overpaid hire or excess deposit to be returned at once.
(Emphasis added.)
Also on September 21,1990, the vessel was subvoyage chartered by Afram to the Agency for International Development (“AID”), which is an agency of the United States Government. While on time charter to Af-ram and on subvoyage charter to AID, the vessel loaded cargo at Lake Charles and New Orleans, Louisiana and at Houston, Texas for discharge at Larniea, Cyprus and at Amman, Jordan. The Saint John carried a bulk cargo of rice, flour and vegetable oil owned by the United States Government.
On November 28, 1990, AID arranged to pay subfreights due under the subvoyage charter party by authоrizing the United States Treasury to pay Afram via Den norske Bank the amount of $1,860,324.09. Within the following two days, the Treasury transferred the subfreights to Den norske Bank for credit to Afram.
While the vessel was on time charter to Afram and on subvoyage charter to AID, Afram failed to pay Saint John Marine amounts due under the Saint John/Afram time charter party totalling $76,415.68. On December 19, 1990, a firm called ConsultMa-rine, acting as consultant for Saint John Marine with respect to the time charter party, placed AID on notice by telex of Afram’s failure to pay amounts due under the Saint John Marine/Afram time charter, and of Saint John Marine’s lien on subfreights. The telex, which was received by AID on December 19,1990, stated in part:
Unfortunately, Afram ha[s] failed to pay to Owners monies аmounting to USD 76,-415.68. Owners are therefore obliged to exercise their rights of hen in respect of and over all and any freights or sub-freights including any sums that may still be payable by you. You are therefore hereby requested and directed to refrain from making any payment of such monies, but, rather, to hold these to the account of *42 the Owners. Should you ignore this notice and make payment I must advise that you will be at risk of having to make such payment twice.
AID responded by telex that same day:
A.I.D. has already approved and processed for payment to Afram International Inc. all freight vouchers or money owed them under this voyage.
(Emphasis added.) Since it appeared from this response that payment to Afram could still be stopped, ConsultMarine sent a further telex to AID on December 20, 1990:
[I]f funds have not yet actually been remitted then any payment arrangements should immediately be frozen as any payment effected after y[ou]r receipt of notice of lien would be in breach of that notice and you would be at risk of having to pay twice.
AID responded to ConsultMarine’s December 20 telex by a telex of January 25, 1991:
As advised 19 Dec all freight due Afram Lines had been paid by A.I.D. as of that date.
AID’s telex of January 25, 1991 was in error. All subfreights due Afram from AID had not been paid as of “19 Dec”; a second subfreights payment of $213,270 was paid by AID to Afram under the subvoyage charter party more than a week after AID had received the notice of lien. After receipt of ConsultMarine’s telex, AID made no attempt to stop the payment of subfreights to Afram, and, on December 31, 1990, authorized the Treasury to pay to Afram the second sub-freights installment of $213,270. Within two days of that authorization, the Treasury transferred the subfreights to Den norske Bank for further credit to Afram.
The $76,415.68 due Saint John Marine from Afram under the time charter party remained unpaid, and became the subject of this litigation. With the exception of the December 19, 1990 ConsultMarine telex, there is no evidence that, prior to December 31, 1990, AID was aware of the terms of the charter party between Saint John Marine and Afram. In its communications to AID, ConsultMarine represented that it acted on behalf of the vessel “owners,” but at no time did ConsultMarine name Saint John Marine.
There was no provision in the Afram/AID subvoyage charter party with respect to the assignability of the subfreights payable by AID to Afram upon delivery of the government-owned cargo.
B. Litigation.
On July 17, 1991, Saint John Marine commenced this action against the Government, seeking $76,415.68, plus interest from December 19, 1990. 2 The Government moved to dismiss on several procedural and jurisdictional grounds. In a memorandum opinion and order dated June 22, 1994, the district court denied the Government’s motion, as follows.
First, the Government argued that the United States never consented to be sued on this claim because (1) Saint John Marine is seeking to “arrest” the Government’s subfr-eight payments; (2) the subfreight payments for this purpose stand in the place of cargo; and (3) the SIAA provides in part that “no cargo owned or possessed by the United States ... shall ..., in view of the provision herеin made for a libel in personam, be subject to arrest or seizure by judicial process in the United States or its possessions.” 46 U.S.CApp. § 741. The district court held that the Saint John Marine claim is asserted in personam and may be presented against the United States under the provision of the SIAA that permits “any appropriate nonjury proceeding in personam” against the United States where such a suit could be asserted against the private owner or operator of a vessel or against the private owner or possessor of cargo. 46 U.S.CApp. § 742. The Government does not renew this argument on appeal. However, since this issue potentially affects jurisdiction, we address it below.
Second, the Government characterizеd this claim as in effect a garnishment that, as we held in
Chilean Line Inc. v. United States,
The district court rejected as well the Government’s third argument, that the claim was barred by the discretionary function exception expressed in the language of the Federal Tort Claims Act (the “FTCA”), 28 U.S.C. §§ 1346(b), 2671-2680, and incorporated into the SIAA,
see In Re Joint Eastern & Southern Dists. Asbestos Litig.,
Fourth, the Government challenged the venue of the suit, relying on a provision of the SIAA that sets venue in the district in which any plaintiff resides or has its princiрal place of business in the United States, or in which the vessel or cargo
in rem
is found. 46 U.S.CApp. § 742. The district court, however, recognizing the unsettled character of the law on this issue, invoked “the interest of justice” to follow cases that permit suit by aliens in any district, citing
Malajalian v. United States,
Finally, the Government moved to dismiss on the ground that Afram is an indispensable party. The district court rejected this argument on the grounds that (1) complete relief can be afforded as between Saint John Marine and the Government, (2) the Government’s concern about claims Afram might raise was speculative, and (3) the Government failed to show that Afram (a defendant with Saint John Marine in the same district on the Government’s claim for damaged cargo aboard the M/V Saint John) could not be made a party to this action. The Government has not raised this issue on appeal.
Following the denial of the Government’s motion to dismiss, and the filing of the answer, the parties agreed to a trial on submission, based on the stipulated facts set forth above. In an opinion dated July 26,1995, the district court found in favor of Saint John Marine and ordered entry of judgment in the amount of $76,415.68 plus prejudgment interest from the date of suit. As the district court recited in its opinion, “[t]he Government does not dispute that Saint John Marine’s position would be tenable in the context of a
private party’s
failure to honor a lien on subfreights.” The Government interposed two defenses at that stage of the litigation: first, that the claim is barred by the SIAA if the lien is (properly) characterized as a garnishment; and second, that the claim is barred by the Anti-Assignment Act if the lien is (improperly) characterized as an assignment of rights. In its opinion, the district court disposed of the garnishment claim by reference to its June 22, 1994 opinion in the case, which held that the lien here is “more closely aligned to an assignment of rights.” The district court rejected the Government’s argument under the Anti-Assignment Act on the ground that the courts in this Circuit “that have addressed this issue consistently have held that [the Anti-Assignment Act] does not apply to claims brought pursuant to the [SIAA].” In support of that holding, the district court cited
Todd Shipyards Corp. v. United States,
DISCUSSION
A. Jurisdiction.
We have the duty to determine whether subject matter jurisdiction exists even if the issue is not presented by the parties.
United Food & Commercial Workers Union, Local 919 v. Centermark Properties Meriden Square, Inc.,
In cases where if [a] vessel were privately owned or operated, or if [] cargo were privately owned or possessed, or if a pri *44 vate person or property were involved, a proceeding in admiralty could be maintained, any appropriate nonjury proceeding in personam may be brought against the United States....
Although we have recently said that “[i]n American admiralty law, ‘the existence of a maritime lien is synonymous with the availability of a libel
in rem,’ ” Cornish Shipping Ltd. v. International Nederlanden Bank N.V.,
B. The SIAA and the Anti-Assignment Act.
In this appeal, the Government argues that the grant of power to sue in the SIAA does not affect the Anti-Assignment Act’s limitation on the assignment of claims against the Government. This Court has not previously decided whether an assignment contrary to the Anti-Assignment Act defeats suits brоught under the SIAA. An “assignment” is “(1) a transfer or assignment of any part of a claim against the United States Government or of an interest in the claim; or (2) the authorization to receive payment for any part of the claim.” 31 U.S.C. § 3727(a). The statute provides in relevant part:
An assignment may be made only after a claim is allowed, the amount of the claim is decided, and a warrant for payment of the claim has been issued. The assignment shall specify the warrant, must be made freely, and must be attested to by 2 witnesses. The person making the assignment shall acknowledge it before an official who may acknowledge a deed, and the official shall certify the assignment. The certificate shall state that the official completely explained the assignment when it was acknowledged. An assignment under this subsection is valid for any purpose.
31 U.S.C. § 3727(b).
Antecedents of § 3727 date as far back as 1846. Act of July 29, 1846, ch. 66, 9 Stat. 41. The Supreme Court, interpreting an 1853 version, Act of February 26,1853, ch. 81, § 1, 10 Stat. 170, read the statute broadly, holding that it “embrace[s] every claim against the United States, however arising, of whatever nature it may be, and wherever and whenever presented.”
United States v. Gillis,
The doctrine on which the district court relied had its origin in
The West Grama,
The language of the [SIAA] is sufficiently sweeping ... to allow the courts of admiralty to enforce against the Government claims transferred by assignment which may be asserted against all other persons. I can see no reason why a broad statute enabling suits to be brought against the Government, accompanied by a provision that all other acts inconsistent therewith are repealed, should be limited by the terms of [the Anti-Assignment Act],
Id.
at 1446 (emphasis аdded). In 1946, Judge Caffey issued a series of short opinions that relied principally on
The West Gra-ma
and arrived at the same conclusion.
Seaboard Fruit Co. v. United States,
73 F.Supp.
*45
730 (S.D.N.Y.1946);
Seaboard Fruit Co. v. United States,
Three years later, Judge Rifkind tested this hypothesis in
Ozanic v. United States,
The West Grama relied upon the words of repeal. I confess my inability to discover any inconsistency between the grant of power to sue conferred by the [SIAA] and the [Anti-Assignment Act]. I see no necessary logical connection between the privilege to sue and the power to assign.
Id.
The court went on to apply the Anti-Assignment Act to deny, a petitioner’s motion to intervene in a case brought under the SIAA.
Id.
at 9. On appeal, this Court declined the appellant’s invitation to adopt the reasoning of
The West Chuma
and the
Seaboard Fruit
cases: “We do not ... find it necessary to decide as to this reasoning and arguendo we shall assume that it is sound, because even so we think that [the petitioner] cannot prevail.”
Ozanic v. United States,
By 1974, the district court in
Todd Shipyards Corp. v. United States,
All of these cases ultimately rest on the assertion in
The West Grama
that the SIAA repealed all inconsistent statutes, including the Anti-Assignment Act. We agree with Judge Rifkind’s reasoning in
Ozanic,
which undercuts all these cases: the right to sue under the SIAA has “no necessary logical connection” to the prohibition against assignments of claims under the Anti-Assignment Act.
The rule against assignment of claims is consistent with the SIAA’s waiver of sovereign immunity, because the Anti-Assignment Act merely determines when a claim against the Government is validly assigned. An assignment that does not comply with the Anti-Assignment Act cannot occur; the statute voids the assignment as against the United States.
In re Ideal Mercantile Corp.,
In the event of an invalid assignment, the claim by the putative assignee against the Government fails because it is asserted by one who does not hold a valid claim. The defeat of such a claim is not a matter of sovereign immunity: one who asserts a claim that by law belongs tо another is barred from
*46
recovery, regardless of whether the defendant is the Government or (in the words of the SIAA) “a private person or property [is] involved.” In short, the SIAA waives sovereign immunity for the claim; but the Anti-Assignment Act determines who can assert it. The waiver of sovereign immunity does not create or confer a cause of action.
See Feres v. United States,
This conclusion is reinforced by analogy to the Tucker Act and the FTCA. The Supreme Court has had no trouble assuming that the Anti-Assignment Act applies to suits brought under the FTCA.
See United States v. Shannon,
As set forth more fully below, the Anti-Assignment Act is designed to prevent a traffic in government claims and to avoid the proliferation of claims and claimants.
See Aetna Casualty,
We hоld that the SIAA did not repeal the Anti-Assignment Act in respect of maritime claims against the Government.
C. The Maritime Lien as an Assignment of Claim against the United States.
Saint John Marine argues that the assignment of the subfreights was made upon creation of the lien in the time charter party between Saint John Marine and Afram—
before
the subfreights became payable — and that the Anti-Assignment Act does not apply in this case because no claim against the United States thus existed until
after
the assignment.
See Hobbs v. McLean,
A lien on subfreights operates as follows:
If the charterer defaults on its payment of freight or its other obligations under the charter party, the shipowner may exercise its lien on the subfreights by giving notice to the consignee. Before such notice is given, however, the lien is essentially inchoate. Indeed, the lien is altogether extinguished if the consignee pays the sub-freights to the charterer or its agent in good faith prior to receiving notice of the lien.'
Cornish Shipping Ltd. v. International Nederlanden Bank N.V.,
The “claim against the United States” at issue here is Afram’s right to collect sub-freights from AID pursuant to the subvoyage charter party. Pursuant to clause 15 of the subvoyage charter party, the Government’s obligation to pay this claim arose when the vessel arrived with its cargo at its first port. We therefore reject Saint John Marine’s argument that the charter party that provided for a lien was a “transfer” of Afram’s right to receive subfreights.
“It is a settled principle of statutory construction that, absent contrary indications, Congress intends to adopt the common law definition of statutory terms.”
RTC v. Diamond,
We therefore apply familiar principles of contract law. “An assignment of a right is a manifestation of the assignor’s intention to transfer it by virtue of which the assignor’s right to performance by the obligor is extinguished in whole or in part and the assignee acquires a right to such performance.” Restatement (Second) of Contracts § 317(1) (1979). Clause 18 of the time charter party provides for the transfer to Saint John Marine of Afram’s right to receive subfreights, upon certain conditions. An assignment can be conditional. Id. § 331. However, “a purported assignment of a right expected to arise under a contract not in existence operates only as a promise to assign the right when it arises and as a power to enfоrce it.” Id. § 321(2). “[Tjhere cannot be an effective assignment of a right not yet in exis-tence_ ”M § 331 cmt. b. The provision in the charter party that creates the lien on subfreights was therefore at most a conditional assignment, or promise, of a right to receive subfreights if and when (1) Afram entered into a subvoyage charter party, and (2) the subfreights became due and collectible, and (3) sums became due under the charter party. In short, the hen on sub-freights did not effect an assignment at the time that it was created.
The stipulation of facts does not say whether the subfreights became due and collectible before, or after, sums became due on the charter party. In any event, and regardless of whether the assignment was incompletе until Saint John Marine gave its notice to the Government, we think it is clear that the lien effected the assignment of an existing claim against the Government. Therefore, the lien on subfreights in this case is an assignment within the meaning of the Anti-Assignment Act.
See Hornbeck Offshore Operators, Inc. v. Ocean Line of Bermuda, Inc.,
D. Assignment by Operation of Law.
Athough we conclude that the SIAA does not repeal the Anti-Assignment Act in respect of maritime claims against the Gov *48 ernment, and that a maritime lien on sub-freights is an assignment within the meaning of the Anti-Assignment Act, we hold nevertheless thаt the Anti-Assignment Act does not bar Saint John Marine’s claim, because the lien on subfreights is an assignment that is effected by operation of law and does not implicate the dominant policy objectives of the Anti-Assignment Act. As the Supreme Court has explained, the Anti-Assignment Act is intended to prevent a traffic in government claims, which would breed corruption and influence-peddling, and to avoid the proliferation of claims and claimants, which would increase the Government’s risks and burdens in the handling and payment of claims:
Its primary purpose was undoubtedly to prevent persons of influence from buying up claims against the United States, which might then be improperly urged upon officers of the Government.... [Another] purpose was to prevent possible multiple payment of claims, to make unnecessary the investigation of alleged assignments, and to enable the Government to deal only with the original claimant.
United States v. Aetna Casualty & Surety Co.,
At one time, the Court construed the Anti-Assignment Act strictly, but “[t]he rig- or of this rule was very early relaxed in cases which were thought not to be productive of the evils which the statute was designed to obviate.”
Aetna Casualty,
The language of the statute, “all transfers and assignments of any claim upon the United States, or of any part thereof, or *49 any interest therein,” is broad enough (if such were the рurpose of Congress) to include transfers by operation of law, or by will. Yet we held it did not include a transfer by operation of law, or in bankruptcy, and we said it did not include one by will. The obvious reason of this is that there can be no purpose in such cases to harass the government by multiplying the number of persons with whom it has to deal, nor any danger of enlisting improper influences in advocacy of the claim, and that the exigencies of the party who held it justified and required the transfer that was made.
Goodman v. Niblack,
We conclude that the lien at issue effects an assignment “by operation of law” as that term has been construed by the Supreme Court. Although the lien arises from a contract voluntarily entered into by the shipowner and the chаrterer, the operation and enforcement of the hen is determined by a well-recognized body of admiralty law.
See
1 Thomas J. Schoenbaum,
Admiralty and Maritime Law
§ 9-1 (2d ed.1994);
Cornish Shipping Ltd. v. International Nederlanden Bank N.V.,
Two decisions of the Supreme Court illustrate these principles and support our conclusion. In
United States v. Aetna Casualty & Surety Co.,
Two years later, in
United States v. Shannon,
There can be no doubt that in the present case the assignment was voluntary.... The voluntary nature of the assignment is *50 reflected in the fact that one of the respondents testified on cross-examination that he understood that he was “buying a claim against the Government.”
Id.
at 291-92,
The transfer of the damage claim in Shannon, which was held not to have arisen by operation of law, was ancillary to the real estate transaction, was capable of being effected separately, and was irregular in the sense that real estate (which is customarily sold with the improvements and deeded rights) is not ordinarily marketed with claims for property damage. By contrast, the insurance subrogation arrangements in Aetna Casualty, which were held to have arisen by operation of law, were integral and customary aspects of an ordinary commercial transaction. Here, although the lien on sub-freights was created by contract, the Government itself recognizes that the mechanism by which this lien is enforced is “rooted in traditional maritime law.” Appellant’s Brief at 24. The resulting transfer of the claim was integral to the time charter party, which served an independent and customary commercial purpose in a settled and customary commercial relationship.
The lien on subfreights operates in a way that does not expose the Government to the evils addressed by the Anti-Assignment Act. The risks of competing claims and double payment are minimal. True, the рayment of subfreights to a charterer after notice of a lien “does not discharge ... liability for the subfreights to the owner.”
Cornish Shipping,
CONCLUSION
We hold that the Anti-Assignment Act may apply to suits that arise under the *51 SIAA. We also hold that a maritime lien on subfreights payable by a government agency is an assignment of a claim against the United States within the meaning of the Anti-Assignment Act. However, we rule that such a hen is not barred by the Anti-Assignment Act, because it assigns a claim against the Government by operation of law. Since the Government concedes that, if it were a private party, it would be hable pursuant to the SIAA, we affirm the judgment of the district court.
Notes
. As the name implies, a time charter party provides that the charterer pays the owner based on the time period the vessel is used. Payment for use of a vessel under a time charter is called “hire.” Under a voyage charter agrеement, the charterer uses a vessel for one or more voyages. Payment under a voyage charter is called "freight.” Payment under a subvoyage charter is called "subfreights."
. Nothing in the record evidences an attempt by Saint John Marine to recover from Afram.
.
Seaboard Fruit
cited a few other decisions from courts in this Circuit which are readily distinguishable. In
Smith v. United States Shipping Bd. Emergency Fleet Corp.,
. This distinction is illustrated in
Hillier v. Southern Towing Co.,
. Other exceptions under the Anti-Assignment Act include transfers by will or intestacy, transfers incident to proceedings in bankruptcy or receivership, transfers by succession of one business entity for another, and assignments by judicial sale or order.
See Keydata Corp.
v.
United States,
. The Government "suggests] that shipowners likely view the Government ... as having 'deep pockets,’ and that therefore, when the carriage of Government cargo is anticipated, the owners may fail diligently to examine the finances of the companies to whom they charter their vessel.” Reply Brief at 17. Apart from being wholly speculative and not supported by the record, this argument is so general that it would apply to all assignments of government claims, whether or not they comply with the Anti-Assignment Act. Moreover, the purposes of the Anti-Assignment Act, as described by the Supreme Court,
see Aetna Casualty,