12 F. Cas. 8 | E.D. Mich. | 1875
Much discussion is found in the elementary books upon the question, when a claim against a vessel becomes stale as against a bona fide purchaser without notice. So much depends upon the facts and circumstances of each case, that it is exceedingly difficult if not impossible to lay down any general rule applicable even to a particular class of cases. The rule obtaining upon the seaboard, which forbids the libellant pursuing his claim, as against bona fide purchasers, after the end of the voyage next succeeding the contracting of the debt, served a good purpose when applied to the long voyages of sailing vessels, but is Ill adapted to the exigencies of steam navigation, and I believe has become practically obsolete. Of course such a rule would be wholly inapplicable to lake navigation. Indeed, the short trips made by vessels here, «an hardly be dignified with the name of voyages. Some other rule must be adopted, and it should be so well understood that persons giving credit may know how long it is safe to delay enforcing their claims without prejudice to their rights as against bona fide purchasers without notice. In the case of Stillman v. The Buckeye State [Case No. 13,445], Judge Wilkins, of this district, refused to enforce a claim that had lain dormant for three years, and observed that there was “great reason to limit these tacit liens to the season of navigation, and not to extend their obligation beyond a year. If in the com--merce of the ocean the lien cannot with propriety be extended, except under special circumstances contradicting the presumption which delay creates, beyond the voyage and the return to the home port where it may be enforced, with equal propriety should a season on the Lakes, embracing the whole year, be conclusive, especially where the right of a purchaser without notice intervened.” In the case of The Dubuque [Id. 4,110], my learned predecessor also refused to enforce a lien for wages after three seasons had elapsed, and held as a general rule that “a delay to enforce a maritime lién, after a reasonable opportunity -to do so, shall be taken and deemed as a waiver of the samé, as against subsequent purchasers or encumbran-cers in good faith without notice, unless such delay is satisfactorily explained.” I think, however, that this hardly gives sufficient latitude, as a reasonable opportunity may occur within a week by the return of the vessel to the port where the debt was contracted. In the case of The Favorite [Id. 4,696], the district court of Wisconsin refused to enforce a libel for the loss of goods, filed two years and ten months after the loss, and after a bona fide assignee of the bill of lading had seized the boat. The whole subject received an - elaborate consideration at the last June term of-this court in the case of The Detroit [Id. 3,832], decided by Mr. Justice Swayne. A claim for towage accrued against a vessel in May and June, 1865, while she was in the hands of a person who had contracted to purchase her. Having failed to fulfill his contract, she was returned to her owner, who took her to Canada within a month or two after the services were rendered, where she remained until June 27th of the following year. She was then resold to a bona fide purchaser without notice, who brought her within the jurisdiction of the court, and kept her during the residue of the summer. On October 6th, the libel was filed and the vessel attached. Held, that the lien was waived and that the áction could not 1 be entertained. The learned justice says: “In the case of The Buckeye State and The Dubuque a rule applicable to the Lakes is laid down, that where the vessel has passed into the hands of a bona fide purchaser, claims of this character should be prosecuted within the current season of navigation, or at least within a year. I think this rule is founded upon the most solid consideration of good sense.”
In fixing the "time within which creditors of lake vessels must pursue their claims as against bona fide purchasers, I think it should be borne in mind: (1) That the credit given to vessels for supplies and towage is often extended through the winter following the contracting of the debt, and until the opening of navigation in the spring, though this can hardly be called the general custom. (2) That transfers of vessels are usually made during the winter season. The first consid-
In view of these facts, I think it reasonable to hold as a rule applicable to vessels plying upon the Lakes, that lien holders should have the current season of naviga/tion to enforce their security, and such reasonable time after the commencement of the nest season as may be necessary to arrest the vessel. This would not ordinarily extend the time beyond the 1st of June of the following year. Circumstances, of course, may occur, which would greatly abridge or lengthen this time. If the debt were contracted early in the season, and the vessel were immediately sold with the knowledge of the creditor, it might be inequitable to postpone collection after the dose of the current season. If, bn the other hand, the debt were contracted late in the season, and the vessd were not readily accessible, a further time might be allowed. Whether it would be the duty of the creditor to pursue the vessel into other districts than his own it is not necessary to determine. Much will depend upon the circumstances of each case.
Applying this rule to the present case, it is dear that, as the debt was contracted in August, 1873, and the libel was not filed until September, 1874, the lien must be deemed waived as against the claimant, unless- accusatory circumstances exist, taking the case out of the general rule. Such circumstances are claimed to exist in this case.
1. Although the present owners had no notice of this claim at the time of the purchase, McCarthy did tell them there were a few daims against the vessel of small amount, which he agreed to pay. He also said he did not know what the daims were, or who held them. To ascertain these daims Mr. Mills caused notices to be published for two weeks in two daily papers in Detroit. It would seem, although the evidence on that point is somewhat conflicting, that libellant or his agent had seen this notice or heard of the change of ownership. But whether this be true or not, I do not think the general notice that there were small debts against the tug is sufficient to affect Mills with knowledge of the claim in question, in view of his efforts to ascertain such daims.
2. Although the purchase money was fully paid, there was a mortgage taken on the barge Eliza, to indemnify Mills against any claims which might be outstanding against the tug. There is certainly much force in the argument, that, as the requirement of diligence is solely to prevent injury to innocent third parties, if the court can see that the third party is indemnified and cannot be injured, the rule should not apply. In the case of The Detroit, above mentioned, the collateral guaranty of a third party was taken to secure the purchaser against outstanding claims, and this same consideration was urged upon the learned judge who decided that case. He pronounced it unsound,, however, and observed in his decision: “It is held in the authorities upon that subject that the very fact that the vendee aeeepts-a quitclaim deed is strong evidence that he-is not a bona fide purchaser, and such I conceive to be the law. I do not understand that a person, by taking the warranty of his-vendor, or of a third party, loses the protection of the law applicable to bona fide purchasers.” This question did not arise in ¿he case of The Melissa [Case No. 9,400], as; the proof showed that the suit was defended; in fact by the vendor, and that the claimants-had full protection by means of a balance of purchase' money still remaining unpaid; against the vessel. I see no reason why the remarks made in the case of The Detroit with respect to guaranties are not equally applicable where the guaranty is in the form'; of a mortgage. The difficulty in libellant’s position is this: The mortgage is taken for the protection of the purchaser, and not ot the creditor. . It is taken, not to extend the time within which claims may be enforced, or to furnish an excuse for delay, but to protect the buyer against claims which may be presented within the time allowed by law. It is, in fact, something with which the creditor has nothing at all to do. To give it weight might involve the buyer in litigations which he would otherwise have avoided. I must hold, therefore, that it has nb bearing: upon the present case.
3. About the middle of May, 1874, one Hartness, an agent of the libellant, came to-A. H. Mills’ office in Detroit, and said he had a bill from Mr. Keys against the tug Hercules for wood bought in 1873. In reply Mills told him that the boat had changed hands and he must look to the previous owner. He said he knew she nad been sold, and had seen the notice in the paper,, and wanted to know where he could find Me-' Carthy. Mills then showed him the barge which was lying opposite Detroit, on the Canadian side of the river, and told him McCarthy, the late owner, was living on board.. He said he would go and present the bill, and as he left Mills told him to return and let him know whether the bill was paid or not, and if not, he would see about it He-promised he would, but did not return. I think his conduct was’ such- as to mislead’ Mills and induce him to believe he no longer-looked to him for payment of the claim. Had he at once returned, and upon Mills’ refusal to pay libelled the vessel,. I should: have held his claim still in force..
4. On July 9th, the tug being at Sarnia, the-bill was presented to William A. Mills, one of the claimants, who told libellant the boat had been sold, and that he had nothing to-do with the bills. He replied he knew it, and had seen it in the paper. Mills then.
