14 F. Cas. 143 | U.S. Circuit Court for the Northern District of Illnois | 1876
The petitioners had a lien upon the schooner under the laws of the state of Illinois. There is not a sufficient fund in court, arising from the .■■ale. to pay the mortgage, as well as Miller Bros., and Gilbert Hubbard & Co., and the question is. whether the mortgage is to be paid in preference to the supplies and materials furnished in the home port.
I am of opinion that it is, and that it constitutes a prior lien upon the vessel, and should be first paid out of the proceeds. It may be admitted that if these supplies and materials constitute a maritime lien upon the vessel, this priority would not exist, hut the case of The Lottawanna, 21 Wall. [88 U. S.] 558, decides that these claims did not constitute a maritime lien, and although that case was decided under a strong dissent, still, whatever may be our personal views, we must assume it to be the la.v in the federal courts upon the subject, thus reaffirming the rule laid down by the supreme court of the United States in the case of The Gen. Smith, 4 Wheat. [17 U. S.] 438.
In the case of The Lottawanna, the supreme court held that the claims which were made under the state laws of Louisiana were not valid because that law had not been complied with, and there was no obstacle arising in that way to prevent the payment of the mortgage there set up. In this case it is admitted that there was a valid lien for supplies and materials furnished the schooner, under the law of this state, and we are therefore met directly by the question whether the mortgage supersedes the state lien. The law of the state required that in order to make the lien available as against other creditors or subsequent incumbrancers, or bona fide purchasers, proceedings must be instituted within nine months after the indebtedness accrued This would exclude a large portion of the claims of the libellants.
The 27th section of the act of 1850 (Rev. St. § 4192) required in order that mortgages on vessels should be valid as against certain persons, that they should be recorded in the office of the collector of customs where the vessel was registered or enrolled. That section provided that the lien by bottomry on any vessel created during her voyage, by a loan of money or for materials necessary to repair or enable her to prosecute the voyage, should not lose its priority or be in any way affected by the mortgage. This would seem to mean a maritime lien, and not a lien created solely by a law of one of the states. It was intended that in all such cases as are referred to in the proviso, the vessel should be bound independent of the mortgage, but as the lien in this case was not a maritime lien, it is not strictly within the terms of the proviso.
As the twelfth rule in admiralty now stands and as construed by the supreme court, a claim for materials, supplies, repairs, or other necessaries, where a lien exists by the law of a state, though not by the maritime law, may be enforced by the admiralty in a proper case of admiralty jurisdiction, but it by no means follows that because the law of a state gives a lien, it is superior to that of a mortgage. The case of Aldrich v. Aetna Co., 8 Wall. [75 U. S.] 491, is a strong illustration of this principle. There it was sought to make an attachment against the vessel, issued and served subsequent to the recording of a mortgage, supersede it because the law of the state as to the mortgage had not been complied with, which the supreme court decided could not be done. White's Bank v. Smith, 7 Wall. [74 U. S.] 649; The Belfast, Id. 642.
The supreme court of this state, in construing the law of the state in relation to the lien of boats and vessels in the case of The Barque Great West, No. 2 v. Obenndorf, 57 Ill. 168, and in the case of The Hilton v. Miller, 62 Ill. 230, held that the lien created by the statute for supplies or materials furnished was subordinate to that of a mortgage given and recorded under the act of congress; and it is held in the case of The Grace Greenwood [Case No. 5,652], that a mortgage properly recorded under the act of congress, took precedence of the lien under the state law for supplies and materials furnished subsequent to the mortgage.
To the principles announced in that case, and which I believe have been followed in this circuit since, I still adhere. It seems to me, as between these different liens existing in this case, that of the mortgagee is paramount. The Sky Lark [Case No. 12,028]; The Lady Franklin [Id. 7,983]. The legislation of congress wras upon a subject confessedly within its legitimate authority, and it must therefore override all state legislation upon the subject, even if any existed. As the decision of the district court was in accordance with the views here stated, the decree is affirmed.
