THE MARSODAK

• Decision Date: 13 January 1938
• Docket Number: No. 4214.,4214.
• Citation: 94 F.2d 339
• Parties: THE MARSODAK. ROBINS DRY DOCK & REPAIR CO. v. MARSODAK S. S. CO.
• Court: U.S. Court of Appeals — Fourth Circuit

94 F.2d 339 (1938)

THE MARSODAK ROBINS DRY DOCK & REPAIR CO. v. MARSODAK S. S. CO.

No. 4214.

Circuit Court of Appeals, Fourth Circuit.

January 13, 1938.

John W. Oast, Jr., of Norfolk, Va. (Crowell & Rouse, and E. Curtis Rouse, all of New York City, on the brief), for appellant.

J. Harry LaBrum, of Philadelphia, Pa., and Leon T. Seawell, of Norfolk, Va. (Hughes, Little & Seawell, of Norfolk, Va., James S. Benn, Jr., and Conlen, LaBrum & Beechwood, all of Philadelphia, Pa., on the brief), for appellee.

Before PARKER, NORTHCOTT, and SOPER, Circuit Judges.

NORTHCOTT, Circuit Judge.

This is a libel in admiralty filed in the District Court of the United States for the Eastern District of Virginia, at Norfolk, in February, 1936, by Robins Dry Dock & Repair Company, a New York corporation, hereinafter referred to as the libelant, against the steamship Marsodak. The object of the libel was to assert a lien against the steamship for the sum of $5,153.42, for material furnished and work done on her at the order of the owner or its agents.

The Marsodak Steamship Company, a corporation, hereinafter referred to as the respondent, filed an answer denying that the libelant had any valid claim against the vessel. After the taking of testimony, all by deposition, a hearing was had in October, 1936, and on February 18, 1937, the court below handed down an opinion holding for the respondent, and on March 15, 1937, a decree was entered dismissing the libel with costs to the respondent. From the decree so entered the libelant has appealed.

The Marsodak, at the time the work sued for was done, was owned by the Charles Nelson Company and was operated by a subsidiary of that company, the Nelson Steamship Company, in whose possession the vessel was each time the work was done.

Both of these companies had their principal offices in San Francisco, Cal., and a branch office for the transaction of all Atlantic coast business in the city of New York in charge of Frederick W. S. Locke, who was Eastern manager of the Charles Nelson Company, and executive vice-president of the Nelson Steamship Company, in charge of repairs. At Seattle, the companies operated through L. B. Fitch.

The work for which claim was made by libelant was done as follows:

At plant of libelant, Robins Dry Dock & Repair Company, in Brooklyn, N. Y., on October 6, 1935, in the amount of $650.12; at plant of Todd Seattle Dry Docks, Inc., in Seattle, November 21, 1935, in the amount of $734, assigned to libelant, February 21, 1936; at plant of Tietjen & Lang Dry Dock Company, in Hoboken, N. J., on March 8, 1935, in the sum of $1,124.80, assigned to libelant, February 21, 1936; at plant of Tietjen & Lang Dry Dock Company, in Hoboken, on January 14-16, 1936, in the sum of $2,644.50, assigned to libelant, February 21, 1936.

All of the work done at Erie Basin, N. Y., and Hoboken, N. J., was ordered by the vessel owners through Locke, while the Seattle work was similarly ordered through Fitch.

While the vessel was in dry dock at Hoboken, between January 13 and 16, 1936, one John C. Rogers inspected her with a view to purchase. Rogers was accompanied by a marine surveyor, one Johansen. On January 17, 1936, Rogers, having organized the Marsodak Steamship Company, of which he was president, entered into an agreement as trustee to purchase the vessel, the agreement was executed by a bill of sale from the Charles Nelson Company to the Marsodak Steamship Company, dated January 18, 1936, and recorded at Wilmington, Del., on January 22, 1936. The price paid for the vessel was $55,000, part cash and the balance in twelve equal installments, represented by promissory notes secured by a mortgage. The agreement of sale also included an option to Rogers to purchase two other steamships, the Plow City and the Suweid. This agreement also provided that the buyer should pay the cost of having the Marsodak dry docked for examination prior to the time of delivery.

Robins Dry Dock & Repair Company had, previous to 1936, performed work on other vessels owned by the Nelson Company. On or about October 5, 1935, it received a promissory note of the Nelson Company, in the sum of $17,806.30, payable January 9, 1936, for this work. In agreeing to accept this note the libelant wrote the Charles Nelson Company that in accepting the note it did not waive the maritime liens on the vessels on which the work was done. On January 9, 1936, the Nelson Company paid $2,806.30 on the principal of this note without direction as to any specific bills as to which the payment should be applied. The payment was applied by the libelant on the note generally, by indorsement.

On January 29, 1936, at the request of Locke, the New York agent of the Nelson Company, the Tietjen & Lang Dry Dock Company rendered a separate bill for the dry docking of the Marsodak at the time Rogers examined her, and on the receipt, through the Nelson Company, of Rogers' check ($823.50) for this bill, the treasurer of libelant, one Cox, wrote Rogers acknowledging receipt of the check "in settlement of our bill against S. S. `Marsodak.'" This, however, occurred after the purchase of the vessel by Rogers.

There had been recorded in the custom house at San Francisco, Cal., among other mortgages, a mortgage upon the Marsodak dated December 6, 1932, given by the Charles Nelson Company to secure a debt due John Rosenfeld's Sons, a California corporation. This mortgage was satisfied on the records and discharged, as to the Marsodak, on January 18, 1936.

After the sale of the Marsodak the Charles Nelson Company on February 5, 1936, filed a petition, in San Francisco, for reorganization under section 77B of the Bankruptcy Act, as amended, 11 U.S.C.A. § 207, and the Nelson Steamship Company did likewise on February 7, 1936. On February 19, 1936, the libelant, in its proof of claim filed in these proceedings, asserted its maritime lien against the Marsodak as did also Tietjen & Lang and the Todd Seattle Dry Docks.

Subsequently, during May, 1936, respondent, not having paid all of the purchase price of the Marsodak, made a contract with the bankruptcy trustee, of the Nelson Steamship Company, as party of the first part, and John Rosenfeld's Sons, as party of the second part, modifying its previous purchase contract dated January 17, 1936, as to its deferred payments and as to the purchase of two other boats (S. S. Plow City and S. S. Suweid), and provided therein for full indemnity from the estate of the Nelson Steamship Company against any loss or damage, including expenses and counsel fees on account of the maritime liens asserted by the libelant herein. In this agreement John Rosenfeld's Sons, which held them, agreed to deliver to the trustee certain of the notes given for the purchase of the vessel by the Marsodak Steamship Company and received in exchange part of the proceeds of the sale of the vessels, the Plow City and the Suweid.

Two questions are presented for our consideration on the appeal. First, Did the libelant have a valid maritime lien on the Marsodak? Second, If the libelant had such a lien was the lien waived or is libelant estopped, by the conduct of its officers, or the officers of its assignors, from asserting the lien?

In view of the fact that all of the evidence was by deposition, and the judge below had no opportunity to see the witnesses or hear their testimony, his findings do not have the weight they would have, had he had that opportunity. The Santa Rita, 9 Cir., 176 F. 890, 30 L.R.A.,N.S., 1210; The Coastwise, 2 Cir., 68 F.2d 720. This situation has necessitated a thorough study of the evidence. Such a study has led us to the conclusion that the first question must be answered in the affirmative. It is claimed on behalf of the respondent that the testimony of Cox, the treasurer of the libelant, as well as treasurer of the other two companies that did work on the vessel, was to the effect that credit was extended to the owner, and not to the vessel, when the work was done. We do not think that it is a fair inference, from this testimony, that credit was extended to the owner solely with...