254 U.S. 1 (1920), 58, Piedmont & Georges Creek Coal Company v. Seaboard Fisheries Company

Docket Nº:No. 58
Citation:254 U.S. 1, 41 S.Ct. 1, 65 L.Ed. 97
Party Name:Piedmont & Georges Creek Coal Company v. Seaboard Fisheries Company
Case Date:October 11, 1920
Court:United States Supreme Court

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254 U.S. 1 (1920)

41 S.Ct. 1, 65 L.Ed. 97

Piedmont & Georges Creek Coal Company

v.

Seaboard Fisheries Company

No. 58

United States Supreme Court

Oct. 11, 1920

Argued March 16, 17, 1920

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE FIRST CIRCUIT

Syllabus

An oil company, owner of a fleet of fishing steamers and also of oil factories where the catch was delivered and the vessels coaled, having mortgaged this property and being without money or credit, made an agreement with a coal dealer to furnish the coal necessary for the season's operations, both parties understanding that the coal would be used by the factories as well as by the vessels, that the greater part would be used by the vessels, that the law would afford a lien on the vessels for the purchase price, and that the coal dealer would thus have security. The coal was billed and delivered directly to the oil company, title passing with delivery; it was then stored by that company in its factories, and afterwards appropriated by it mainly to the vessels, but partly to the factories, as occasion arose, and there was no understanding when the contract was made or at times of delivery that any part of it was for any particular vessel or for the vessels then composing the fleet. In libels of some of the vessels involving the coal dealer's rights as against a purchaser under the prior mortgage, held: (1) that the coal dealer had no maritime

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lien for furnishing supplies "to a vessel . . . upon the order of the owner" under the Act of June 23, 1910, c. 373, § 1, 36 Stat. 604, because the coal furnished the vessel was furnished by their owner, and not by the coal dealer, p. 6 et seq.; (2) that the fact that such maritime use had been contemplated did not render the subsequent appropriation by the owner a furnishing by the coal dealer to the several vessels, p. 8; nor (3) was the understanding of the owner and the dealer that the law would afford a lien of any legal significance a against the purchaser under the mortgage. P. 10. To hold that a maritime lien for the unpaid purchase price of supplies arises in favor of the seller merely because the purchaser, who is the owner of a vessel, subsequently appropriates the supplies to her use would involve abandonment of the principle upon which maritime liens rest and the substitution therefor of the very different principle which underlies mechanics' and materialmen's liens on houses and other structures. P. 8.

253 F. 20 affirmed.

The case is stated in the opinion.

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BRANDEIS, J., lead opinion

MR. JUSTICE BRANDEIS delivered the opinion of the Court.

The Atlantic Phosphate & Oil Corporation owned a fleet of nineteen fishing steamers. It owned also factories at Promised Land, Long Island, and Tiverton, Rhode Island, to which the fish caught were delivered and at which its vessels coaled. When the fishing season of 1914 opened, the company was financially embarrassed. Its steamers and factories had been mortgaged to secure an issue of bonds. Bills for supplies theretofore furnished remained unpaid. The company had neither money nor credit. It could not enter upon the season's operations unless some arrangement should be made to supply its vessels and factories with coal. After some negotiations, the Piedmont & George's Creek Coal Company, then a creditor for coal delivered during the year 1913, agreed to furnish the Oil Corporation such coal as it would require during the season of 1914, the understanding of the parties being that the coal to be delivered would be used by the factories as well as by the vessels, that the greater part would be used by the vessels, that the law would afford a lien on the vessels for the purchase price of the coal, and that the Coal Company would thus have security. Shipments of coal were made under this agreement from time to time during the spring and summer, as ordered by the Oil Corporation. In the autumn, receivers for the corporation were appointed by the District Court of the United States for the District of Rhode Island, and later, a suit was brought to foreclose the mortgage upon the vessels and factories. At the time the receivers were appointed, five cargoes of coal shipped under the above agreement had not been paid for. The Coal Company libeled twelve of the steamers, asserting maritime liens for the price and value of either all the coal or of such parts as had been used by the libeled vessels respectively.

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Meanwhile the vessels were sold under the decree of foreclosure. The Seaboard Fisheries Company became the purchaser and, intervening as claimant in the lien proceedings, denied liability. The district court held that the Coal Company had a maritime lien on each vessel for the coal received by it. The William B. Murray, 240 F. 147. The circuit court of appeals reversed these decrees with cost and directed that the libels be dismissed. The Walter Adams, 253 F. 20. Then this Court granted the Coal Company's petition for a writ of certiorari. 248 U.S. 556.

As to the facts proved, there is no disagreement between the two lower courts. The substantial question presented is whether these facts constitute a furnishing of supplies by the Coal Company to the vessels upon order of the owner within the provisions of the Act of June 23, 1910, c. 373, § 1, 36 Stat. 604.1 That coal was furnished to the vessels to the extent to which they severally received it on board is clear. The precise question therefore is: was the coal furnished by the libelant, the Coal Company, or was it furnished by the Oil Corporation, the owner of the fleet? In determining this question, additional facts must be considered:

No coal was delivered by the Coal Company directly to any vessel, and it had no dealings of any kind concerning the coal directly with the officers of any vessel. All the coal was billed by the Coal Company to the Oil Corporation, and there was no reference on any invoice, or on its books, either to the fleet or to any vessel. There

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was no understanding between the companies when the agreement to supply the coal was made or when the coal was delivered that any part of it was specifically for any one of the several vessels libeled, or that it was for any particular vessel of the fleet, or even for the vessels then composing the fleet. Indeed, the first shipment was stated on the invoice to be "coal for factory." The negotiations of the Oil Corporation with the Coal Company did not relate to coal required at that time by the particular vessels subsequently libeled, as distinguished from other vessels of the fleet.

The coal was sold f.o.b. at the Coal Company's piers, which were at St. George, Staten Island, and Port Reading, New Jersey. At these piers, it was loaded on barges which were towed either to the Oil Corporation's plant at Promised Land or to that at Tiverton. Some of these barges were supplied by the Oil Corporation, some by the Coal Company. If supplied by the latter, trimming and towing charges were added to the agreed price of the coal. Upon arrival of the coal at the factories, it was placed in the Oil Corporation's bins. At Promised Land, which received four of the five shipments, the bins already contained other coal (1,068 tons) which had been theretofore purchased by the Oil Corporation and had been paid for. With this coal on hand that delivered by libelant was commingled. At each plant, both the vessels and the factory [41 S.Ct. 3] were from time to time supplied with coal from the same bins; but the greater part of the coal supplied from each plant was used by the vessels. Weeks, and in some instances months, elapsed between placing the coal in the bins and the delivery of it by the...

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