The Lulu
APPEAL from the Circuit Court for the District of Maryland.
This was a suit in admiralty to enforce a lien claimed upon the steamer Lulu for repairs made upon her at the request of the master. It was consolidated with other suits, all brought by material men for supplies or repairs to the vessel to the extent of $8796.21.
The steam vessel was owned in New York, which was her home port, but employed in the trade between Baltimore, in Maryland, and Charleston, in South Carolina. When the libel was filed she had been plying in the trade about eleven months, that is to say, from April, 1866, to March, 1867. The repairs and supplies for which satisfaction was sought were furnished in Baltimore during and after July, 1866, but chiefly in November and afterwards, at fair prices, and were proper and necessary; and there was no proof whatever that the master had any funds which he could have applied to procure the repairs and supplies.
In each suit a New York company filed a claim and answer, asserting a prior right to satisfaction out of the proceeds of the steamer, which under an order of the court had been sold, bringing but $10,250. The claim of this company was founded upon a bill of sale, made to it by the former owners of the vessel (residents of New York also), in consideration of an advance of $12,000, on the 24th of August, 1866. This bill of sale, though in form absolute, was intended as a mortgage to secure repayment of the advance in six months from the date, but no part of it had been repaid.
The only question in the case was: 'Were the repairs and supplies in question furnished under such circumstances as would entitle the material men to the liens which they claimed?' If they were, this lien was superior to that created by the bill of sale or mortgage, whether prior or posterior in time, and the mortgage or most of it was cut out.
The District Court, in which the libel was originally filed, decreed for the material men; but the case coming before the Circuit Court, held by the Chief Justice in November, 1868, and therefore before the recent judgment in The Grapeshot, [1] which explained what had been received as law since The Laura [2] (Thomas v. Osborn), and more particularly since The Sultana 3 Reed), in which last case the court stated the rule thus:
'The proof of a necessity at the time of procuring a supply for a credit on the vessel . . . is as essential as that of the necessity of the article itself. . . . It is only under very special circumstances, and in an unforeseen and unexpected emergency, that an implied maritime hypothecation can be created'
and put the decision of the case upon the ground, not that the supplies were not necessary, but that there was no sufficient proof of necessity for the implied hypothecation of the vessel, or of any unexpected or unforeseen exigency that required it-the Circuit Court finding itself 'unable to make any distinction which had substance' between that case and the present, felt 'constrained' to reverse the decree, and with obvious reluctance deprived the material men of their lien.
The case was now here on appeal from that reversal, the case of The Grapeshot being in the meantime decided, and deciding that if there have been,
1. A necessity for the repairs—
2. If the credit have been given to the ship and not to the owner, master, or agent—
3. Then a presumption of necessity for the credit will arise, conclusive, in the absence of evidence to the contrary, if the material man has acted in good faith.
Messrs. Orville Horwitz and G. H. Williams, for the material men, appellants, relied on the case of The Grapeshot, decided, as above-mentioned, since the reversal below, a reversal, as they said, made only in deference to old authorities, now overruled or explained away by that more recent case. This was the end of the matter.
But, independently of that, the vessel was mortgaged in August, 1866, by the owners to the claimants, for about $2000 more than she was worth, according to the result of the sale. This mortgage was overdue and unpaid at the time of the libels filed. So that at the time of the repairs, confessedly needed, the owners had created a mortgage over and above the value of the steamer, which they had been unable to liquidate, and the effort here is to appropriate the labor and materials of the libellants towards the payment of that mortgage. Suppose that the onus of showing that the necessity for credit to the ship existed still remained on the libellants, the facts prove that those owners could have obtained no credit in a strange city on their personal responsibility.
Mr. William Meade Addison, contra:
Maritime liens are given but in the interests of commerce, and are not favored by the courts. They are allowed only from the necessities to which vessels in foreign ports may be exposed. In their origin they were never designed to apply to vessels in their own country, nor ought they now to apply to those vessels, which, though in reality belonging to a common country, are, by a pure fiction, deemed foreign vessels because owned by citizens of other States than those where they chance to be, except in cases of extreme necessity. It was a mooted question, until the decision, A.D. 1819, in The General Smith, [3] whether the ships of one State were foreign as to another. If the question were a new one, now for the first time to be decided, a different rule perhaps would govern. Certainly in a country of United States, States separated often only by rivers, each State having ports directly in face of ports of the other, nothing seems more unreasonable than now to regard one port as foreign to the other. The great vessels of New York now have their docks at Jersey City opposite, for convenience, as those of Philadelphia have theirs at Camden, New Jersey, also opposite, for the same cause. How unreasonable to say that Jersey City is a port foreign to New York, and that of Camden foreign to the port of Philadelphia! And since The General Smith was decided, telegraphs and railways have changed the whole ground, even as to ports far separated, on which it was rested. Indeed, if there be anything that is especially National, and withdrawn from the operation of State laws, it is a vessel whose home is a port, not a State; whose flag is that of the Union, and not of any State; where National officers watch her, and control her, and tax her, and National custom-houses constitute the repositories of her papers.
Still with the safeguards thrown around the subject by the two decisions which it is said that The Grapeshot has explained away and overruled, we might admit that ships in one State are foreign as to another. The difficulty of creating a valid lien obliged the material man to inquire. Presumptions were against him, not in his favor. But if all old safeguards are thrown overboard, as it is said they are by The Grapeshot, there is great reason for treating as foreign ports only those ports which are so in fact, and of considering the power vested in a master to impawn his owner's ship or goods for necessaries furnished in a foreign port, as what it was originally declared to be, 'a legal indulgence founded on the urgency of the case, and intended for the general benefit of commerce,' [4] and of obliging the person disposed and perhaps eager to trust, to show that he had inquired in the ship's home port as to whether the master had funds.
Again: 'Where money,' says Mr. Justice Bee, 'is borrowed on a ship before the voyage is begun, she is not answerable in the admiralty. The law means to favor the completion, not the commencement of a voyage.' [5] Now, the Lulu while obtaining necessaries in the port of Baltimore must have made not less than eleven distinct voyages to Charleston and back. These repairs and supplies were all made, in the language above quoted, not 'to favor the completion of a voyage,' but 'the commencement' of eleven distinct voyages.
To sustain a lien under such circumstances would be an innovation upon the ancient and well-established principles of the admiralty law. It will have no precedent to support it; and arrayed against it are the principles of sound maritime policy and commercial fair dealing. This court in The Grapeshot in no wise impairs the force of its language, in Pratt v. Reid, where it says:
'These maritime liens in the coasting business, and in the business upon the lakes and rivers, are greatly increasing, and as they are tacit and secret, are not to be encouraged, but should be strictly limited to the necessities of commerce which created them. Any relaxation of this law in this respect, will tend to perplex and embarrass business rather than furnish facilities to carry it forward.'
Mr. Justice CLIFFORD delivered the opinion of the court.
Notes edit
This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).
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