20 F. 129 | S.D.N.Y. | 1884
The claim of the libelant Stillman presents in its-simplest form the question whether, as between maritime liens of the same rank, priority is to be given to that on whieh the libel is first filed and the vessel first arrested, without regard to the dates at which the liens respectively accrued. Such was the rule declared in this district in the case of The Triumph, (1841,) 2 Blatchf. 433, note, and The Globe, Id. 433, (1852,) and which has been more or less followed since. The principle on which this rule was based, in the language of those cases, is that a maritime lien “is, in reality, only a privilege to arrest the vessel for a debt which, of itself, constitutes no incum-brance on the vessel, and becomes such only by virtue of an actual attachment.” Upon this view of the nature of a maritime lien, it is obvious that the parties first attaching the vessel must necessarily have a prior right. But this view of the nature of maritime liens, which'is the foundation of the rule in question, has long since been superseded. In the case of The. Young Mechanic, 3 Ware, 85, Ware, J., defines it as “a jus in re, a proprietory interest in the thing, which may be enforced directly against the thing itself by a libel in rein, in whosesoever possession it may be, and to whomsoever the general title may be transferred.” The subject was elaborately con
The precise question here presented has not, so far as I can ascertain, arisen of late years within this district. In the Eastern district, in the case of The Samuel J. Christian, 16 Fed. Rep. 796, the question seems to have been regarded by Benedict, J., as an open one. He there held that a lien for damages by collision was subject to the prior claims of material-men, and did not acquire any priority over the latter through the prior filing of the libel; and he concludes his opinion by saying that “it is unnecessary to consider the question whether, as between claims of equal rank, a prior seizure of the vessel secures priority in the distribution of the proceeds.”
The recent decision in the circuit court in this district, however, in the case of The Frank G. Fowler, 17 Fed. Rep. 653, accords in principle with the several cases recently decided, to which I have above referred, holding that mere priority of attachment does not entitle to a preference. That decision seems to me plainly incompatible with the rule adopted in the cases of The Triumph and The Globe, supra, and with the views upon which that rule was founded. In the case of 'The Fowler, damages in favor of different lienors had accrued by two collisions upon successive voyages of the same vessel. The libel for the last collision was filed three days before the libel for the previous collision; but the attachment of the vessel by the marshal
Viewing maritime liens, therefore, as a proprietary interest in the vessel itself, and the filing of the libel and seizure of the vessel as proceedings merely to enforce a right already vested, it follows, necessarily, that, as between different lienors, any proceeds in the registry should be distributed according to the rightful priorities of the liens themselves, and not according to priority of the proceedings merely to enforce them. This rule permits all the equities of such liens to be considered and enforced, instead of subordinating these equities to a mere race of diligence.
Where the liens are of the same rank, there is often an equitable priority among them arising out of the character of the liens themselves, or the time when they accrued. A later lien for salvage is entitled to priority over a former salvage, because the last service has preserved the benefit of the former. The same is true of successive repairs of a vessel on different voyages, or on different parts of the same voyage, or of liens on successive bottomry bonds. The later improvements or advances are for the preservation of the former, or for further improvements upon the vessel; and they have, therefore, an equitable priority. As regards such liens, therefore, the rule is
If the liens are of the same rank and for supplies, or materials, or services in preparation for the same voyage; or if they arise upon different bottomry bonds to different holders for advances at the same time, for the same repairs, such claims are regarded as contemporaneous and concurrent with each other, and they will be discharged pro rata. The Exeter, 1 C. Rob. 173; The Albion, 1 Hagg. 333; The Desdemona, 1 Swab. 158; The Saracen, 2 Wm. Rob. 458; The Rapid Transit, 11 Fed. Rep. 322, 334, 335; The Paragon, 1 Ware, 325, and cases first above cited. But if the liens arise from causes which are of no benefit to the ship, such as liens for damages by collision, or other torts, or negligence; and if the claims are such as cannot be treated as contemporaneous’or concurrent; and if there are no equitable grounds for preferring the later lions, such as laches in the enforcement of prior ones, or other grounds of general policy,— then, as stated by Stoby, J.., in the case of The Jerusalem, “the rule would seem to apply, qai prior est tempore, potior est jure,” (2 Gall. 345, 350;) and the liens should be satisfied in the order in which they accrue, as was held in this circuit in the case of The Frank G. Fowler, supra; Macl. Shipp. 702, 703.
As maritime liens are secret incumbrances, and tend to mislead those who subsequently trust to the ship, unless they are enforced with diligence, according to the circumstances and the existing opportunities for enforcing them, they will be deemed either abandoned through laches as against subsequent lienors or incumbrancers, or postponed to the claims of the latter, as circumstances may require. There is no fixed rule applicable to all cases determining what shall be deemed a reasonable time, or what shall be considered as laches in enforcing such liens. In ordinary ocean voyages, the preference allowed even to bottomry will be lost after a subsequent voyage, if reasonable opportunity previously existed for the arrest of the ship. Blaine v. The Carter, 4 Cranch, 332; The Royal Arch, 1 Swab. 269-284; The Rapid Transit, 11 Fed. Rep. 322, 334. Betts, J., held that the same rule should be applied to ordinary liens for supplies. The Utility, Blatchf. & H. 218, 225; The Boston, Id. 309, 327. If this rule were strictly applied to vessels which make very short and frequent voyages, of only a few days’ or a few weeks’ duration, and which remain in port but a short time between such trips, the effect would be practically to destroy all credit to the ship, and to defeat, therefore, the very object for which maritime liens are allowed; since every lienor would be compelled to enforce his lien almost immediately, or run the risk of having it postponed to all subsequent ones.
■ While this rule is neither strictly logical nor consistent with the theory of beneficial liens, yet, as applied to “short and frequent voyages during the open season of each year, it is not merely convenient in application, but on the whole, as I think, it works out practical justice better than any other rule suggested. It occupies a middle •ground, and is in effect a compromise between the theoretical right of priority of the material-man who furnishes supplies for the last voyage on the one hand, and the corresponding obligation on his part to prosecute at once in order to retain that priority which commercial policy would disallow. The season of navigation is regarded as in the nature of a single voyage; and the rules applicable to a single ocean voyage are applied, as regards liens for supplies, to the navigation of a whole season. The City of Tawas, 3 Fed. Rep. 170, 173.
As respects liens arising under the state laws, the decisions are at variance whether such liens stand upon the same footing as strictly maritime liens. While the greater number of decisions do not allow the same status to statutory liens, (The Superior, 1 Newb. 176; The E. A. Barnard, 2 Fed. Rep. 712, 721, 722, and cases there cited,) the contrary view, according to later decisions, placing both on the same footing, seems the more likely to prevail. The General Burnside, 3 Fed. Rep. 228; The Guiding Star, 18 Fed. Rep. 263.
As the best practical rule attainable in such eases, and as a rule already supported by many decisions in the western districts, I think the pro rata rule of distribution should be adopted here as respects beneficial liens of the same class, in the ease of canal-boats and other similar crafi which make short and frequent trips upon the canals and rivers, and are laid up during the winter season, wrhen the canals and rivers are frozen over. The same considerations of convenience,^ justice, and policy apply to this class of cases as in navigation upon the great lakes. They cannot be applied, however, to other craft navigating about this port, making short ocean voyages, without interruption, the year round.
In one of the bills there is a credit of $130. This credit should be applied upon the earliest items. The costs of the first libel should first be paid out of the fund, and the residue should be divided pro rata between the claimants without regard to the dates during the season at which they accrued.
Where there are various lienors entitled to the fund, and the fund is small, no costs after the first libel, beyond necessary disbursements, should.be allowed out of the fund. The Jerusalem, 2 Gall. 351; The Kate Hinchman, 6 Biss. 369; The Guiding Star, 18 Fed. Rep. 269. See The De Smet, 10 Fed. Rep. 490, note. Bonds for latent claims are not now required, except on special order, even in the English practice, (Rule 129, Coote, Adm. Pr. 205; The Desdemona, 1 Swab. 159;) and other parties, if any, who have liens, but have not appeared under the monition and after due publication, will be barred from the time of the final decree of distribution, (The Saracen, 2 Wm. Rob. 451; The City of Tawas, 3 Fed. Rep. 170.)
Since the foregoing was written I have consulted the circuit judge, and am authorized to say that a decision to the same substantial effect has been heretofore made by him in a case arising in the Northern district.