2 F.Supp. 733 (W.D.N.Y. 1933), 1795, Thomas Barlum

Docket Nº:1795, 1794.
Citation:2 F.Supp. 733
Party Name:THE THOMAS BARLUM. THE JOHN J. BARLUM. DETROIT TRUST C. v. BARLUM S.S. CO. (two cases).
Case Date:March 09, 1933
Court:United States District Courts, 2nd Circuit, Western District of New York
 
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Page 733

2 F.Supp. 733 (W.D.N.Y. 1933)

THE THOMAS BARLUM.

THE JOHN J. BARLUM.

DETROIT TRUST C.

v.

BARLUM S.S. CO. (two cases).

Nos. 1795, 1794.

United States District Court, W.D. New York

March 9, 1933

Miller, Canfield, Paddock & Stone, of Detroit, Mich., and Stanley & Gidley, of Buffalo, N.Y. (Ray M. Stanley, of Buffalo, N.Y., of counsel), for libelant.

George E. Brand, of Detroit, Mich., and Thomas C. Burke and Charles S. Desmond, both of Buffalo, N.Y., for claimant.

ADLER, District Judge.

These actions were brought to foreclose in admiralty two preferred mortgages, executed and delivered by the Barlum Steamship Company, covering the steamers Thomas Barlum and John J. Barlum under the provisions of the Ship Mortgage Act Sec. 30 D et seq. (chapter 25, title 46, Sec. 922 and succeeding sections, of the United States Code Annotated). Each of the mortgages is for $200,000.

The two actions are identical except for the names of the vessels and the disposition of the amounts involved. Upon the filing of the libels, the mortgagor appeared as claimant and filed exceptions in each case. The exceptions questioned the jurisdiction of the United States District Court upon the ground that Congress had no power under the Constitution to increase and extend the admiralty and maritime jurisdiction of the federal courts, by bringing within such jurisdiction things nonmaritime, to wit, mortgages on ships. This court overruled those exceptions and held the Ship Mortgage Act providing for foreclosure of preferred mortgages on ships to be constitutional. Detroit Trust Company v. Barlum S.S. Co. (D.C.) 56 F. (2d) 455. Thereafter the claimant answered in the actions setting up two separate defenses: First, that the proceeds of the loans, a security for which these mortgages were given, were used almost entirely for nonmaritime purposes, such as real estate loans, to the knowledge of libelant when the mortgages were given. Second, that the foreclosure provision of the Ship Mortgage Act is unconstitutional. Thereupon the libelant in turn excepted to the two defenses set up in the answer. This court, after a hearing, sustained libelant's exceptions to the second defense, in accordance with its opinion above cited holding the Ship Mortgage Act constitutional. Libelant' exceptions to the first defense were overruled and the cases went to trial on the question whether the fact allegations...

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