United States v. Freights, Etc of the Mount Shasta

• Citation: 71 L.Ed. 1156,47 S.Ct. 666,274 U.S. 466
• Decision Date: 31 May 1927
• Docket Number: No. 267,267
• Parties: UNITED STATES, v. FREIGHTS, ETC., OF THE MOUNT SHASTA
• Court: United States Supreme Court

274 U.S. 466

47 S.Ct. 666

71 L.Ed. 1156

UNITED STATES,

v FREIGHTS, ETC., OF THE MOUNT SHASTA.

No. 267.

Argued April 14, 1927.

Decided May 31, 1927.

The Attorney General and Mr. George R. Farnum, Asst. Atty. Gen., for the United States.

[Argument of Counsel from pages 466-468 intentionally omitted] Messrs. Thomas Hunt and John W. Lowrance, both of Boston, Mass., for appellee.

[Argument of Counsel from page 468 intentionally omitted] Mr. Justice HOLMES delivered the opinion of the Court.

This is a libel in admiralty against sub-freight alleged to be in the hands of the Palmer & Parker Company of Boston in the District of Massachusetts. It was dismissed by the District Court for lack of jurisdiction, 291 F. 92, and the decree having been entered on March 17, 1925, before the Act of February 13, 1925, c. 229, §§ 1, 14, 43 Stat. 936, 938, 942, went into effect, a direct appeal was taken to this Court under section 238 of the Judicial Code (Comp. St. § 1215). The Ira M. Hedges, 218 U. S. 264, 270, 31 S. Ct. 17, 54 L. Ed. 1039, 20 Ann. Cas. 1235.

The United States, owner of the Steamship Mount Shasta, in May, 1920, made a bare boat charter of the vessel to the Mount Shasta Steamship Company through Victor S. Fox and Company, Inc., an agent of that Company, stipulating for a lien upon all cargoes and all sub-freights for any amounts due under the charter party. Victor S. Fox & Company in July, 1920, made a subcharter to Palmer & Parker Company for a voyage to bring a cargo of mahogany logs from the Gold Coast, Africa, to Boston. The vessel arrived in Boston with its cargo on February 19, 1921. There is due to the libellant $289,680 for the hire of the steamship, and the libel alleges that there is due and unpaid freight on the cargo of logs, $100,000, more or less, in the hands of Palmer & Parker Company, on which this libel seeks to establish a lien. It prays a monition against Palmer & Parker Company and all persons interested, commanding payment of the freight money into Court, etc. Palmer &amp Parker Company was served. That Company filed exceptions to the libel, denied the jurisdiction of the Court and answered alleging ignorance of the original charter party and of the relations of the United States and the Mount Shasta S. S. Company to the vessel, and setting up counterclaims more than sufficient to exhaust the freight. The cargo had been delivered. The District Court assumed that a libel in rem could be maintained against freight money admitted to be due and payable, but was of opinion that the fund must exist when the suit is begun, or that the jurisdiction fails. The Court held that where, as here, the liability was denied in good faith, it did not appear that there was any res to be proceeded against and that the suit must be dismissed. The counsel for Palmer & Parker Company pressed the same considerations here in a somewhat more extreme form.

By the general logic of the law a debt may be treated as a res as easily as a ship. It is true that it is not tangible, but it is a right of the creditor's, capable of being attached and appropriated by the law to the creditor's duties. The ship is a res not because it is tangible but because it is a focus of rights that in like manner may be dealt with by the law. It is no more a res than a copyright. How far in fact the admiralty has carried its proceeding in rem is a question of tradition. We are not disposed to disturb what we take to have been the understanding of the Circuit Courts for a good many years, and what the District court assumed. American Steel Barge Co. v. Chesapeake & Ohio Coal Agency Co. (C. C. A.) 115 F. 669; Bank of British North America v. Freights of the Hutton (C. C. A.) 137 F. 534, 538; Larsen v. 150 Bales of Sisal Grass (D. C.) 147 F. 783, 785; Freights of the Kate (D. C.) 63 F. 707.

But if it be conceded that the Admiralty Court has jurisdiction to enforce a lien on sub-freights by a proceeding in rem, and a libel is filed alleging such sub-freights to be outstanding, we do not perceive how the Court can be deprived of jurisdiction merely by an answer denying that such freights are due. The jurisdiction is determined by the allegations of the libel. Louisville & Nashville R. Co. v. Rice, 247 U. S. 201, 203, 38 S. Ct. 429, 62 L. Ed. 1071. It may be defeated upon the trial by proof that the res does not exist. But the allegation of facts that if true make out a case entitles the party making them to have the acts tried. It is said that the Court derives its jurisdiction from its power, and no doubt its jurisdiction ultimately depends on that. But the jurisdiction begins before actual seizure, and authorizes a warrant to arrest, which may or may not be successful. Here the debtor is within...