Berwind-White Coal Min. Co. v. Metropolitan S.S. Co.

• Citation: 166 F. 782
• Decision Date: 26 December 1908
• Docket Number: 625.
• Parties: BERWIND-WHITE COAL MINING CO. v. METROPOLITAN S.S. CO. AMERICAN TRUST CO. v. SAME.
• Court: U.S. District Court — District of Maine

166 F. 782

BERWIND-WHITE COAL MINING CO. v. METROPOLITAN S.S. CO.

AMERICAN TRUST CO. v. SAME.

No. 625.

United States Circuit Court, D. Maine.

December 26, 1908

Harrington Putnam and Edward S. Dodge, for petitioners.

William A. Sargent and Avery F. Cushman, for American Trust Co.

Alfred H. Strickland, for Berwind-White Coal Mining Co.

Coolidge & Hight, for receivers of Metropolitan S.S. Co.

PUTNAM Circuit Judge.

This is an intervening petition seeking to have liquidated and allowed certain claims, amounting to about $140,000, which the petitioner, W. & A. Fletcher Company, maintains are secured by mechanics' liens on two steamers, the Harvard and the Yale, arising by force of the statutes of the state of New Jersey. The demands are for work and material furnished in the installation of the machinery of the two steamers as a part of their original construction. The petition as drawn also involved certain demands for labor and material furnished after the steamers were completed and pending their operation on the admiralty waters of the United States, so that such demands, if maintainable, would have been supported by admiralty liens; but, so far as these are concerned, the petition has been withdrawn, and they are not before us. Whatever there is before us is in no way of a maritime character, and represents labor and materials furnished in the state of New Jersey by the petitioner, then resident in New Jersey, upon these steamers, which were brought into New Jersey as hulls for the purpose of receiving the machinery in question here. Therefore, notwithstanding many propositions which are urged on us, all objections to the allowance of the petition, except those to which we shall particularly refer, are disposed of by settled rules as established by the Supreme Court. The objecting parties are the complainant, an unsecured creditor, who instituted the proceedings into which the present petitioner intervened, and the holder of the mortgages to which we will hereafter refer.

The contract for the installation of the machinery in both steamers was a single one, but it provided that the work should be done at cost of both labor and materials, with certain allowances in the way of percentages and otherwise for the benefit of the contractor, the present petitioner. Consequently, there is no difficulty whatever in ascertaining precisely what benefit each steamer received under the contract, and how much of such benefit to each steamer remains unpaid for; that is, the true balance due from each steamer. Therefore, as the New Jersey statute is framed, no difficulty arises by reason of the contract being single. So far as this topic is concerned, the statute of New Jersey is in substance the same as the statutes to which the following decisions relate. As to the Maine statute, there is a conflict in the expressions used by the Supreme Judicial Court of that state, as appears by Taggard v Buckmore, 42 Me. 77. Fuller v. Nickerson, 69 Me. 228, and Mehan v. Thompson, 71 Me. 492. This relates mainly to the question whether it is necessary to prove that the materials furnished actually went into the vessel on which the lien is claimed. The cases cited establish the proposition that, where there is a joint sale of materials, a lien cannot be maintained on any one vessel for the entire materials furnished for both vessels. There is nothing in them which is clearly inconsistent with the proposition we make, which is fully sustained, even in regard to the Maine statute, by Mr. Justice Curtis in The Kiersage 2 Curt. 421, 425, Fed. Cas. No. 7,762. The circumstances in that case were substantially the same as they are here, but Mr. Justice Curtis found no sound reason why the lien should not be sustained as to each vessel for the materials which actually went into it. The same result was reached under the Massachusetts statute in Briggs v. A Lightboat, 7 Allen (Mass.) 287, 295; and the principle underlying these decisions and our propositions is stated in Van Stone v Stillwell Co., 142 U.S. 128, 136, 12 Sup.Ct. 181, 183, 35 L.Ed. 961, where it is observed with reference to a lien on realty that it is not the contract which creates the lien, but 'the use of the materials furnished and the work and labor expended by the contractor, whereby the building becomes a part of the freehold. ' The underlying equity is that the lien is supported by the fact that the labor and materials have actually gone into the property on which the lien is claimed, and increased its value. When the exact facts can be shown in reference thereto as they are shown in the present case, the equity is clear, and the lien follows the equity. We do not understand that these propositions are disputed, but we wish to put ourselves on guard in reference thereto.

The original bill in this case was filed on January 30, 1908; on February 7, 1908, interlocutory receivers were appointed on the original bill; on March 14, 1908, a cross-bill of the American Trust Company, the mortgagee, was filed by leave of court, and on the same day the receivership was extended to the cross-bill. Immediately after the bill was filed, an ancillary bill was filed in the Circuit Court for the District of Massachusetts, and ancillary orders appointing receivers entered there. When the bill was filed and the receivers were appointed, the two steamers were at South Boston in the District of Massachusetts, being out of employment and laid up for the winter. By virtue of a formal order entered after the petition for the receiver was filed, the United States marshal for the District of Massachusetts took possession of the steamers in question in behalf of the court for the purpose of protecting the same from interference. Upon the appointment of the receivers, possession of the two steamers was surrendered to them, and it has ever since been retained by them.

Thus it will appear that, when the rights of the court and its officers attached at the commencement of the present proceedings, the steamers were entirely outside the jurisdiction of the state of New Jersey, not only theoretically, but as a matter of fact; so that, if the statutes of New Jersey provided only 'a privilege of arresting the vessel for the debt,' to use the words of Mr. Justice Curtis, hereafter cited, it was not effectual until an attachment was made. Such a remedy is of such a nature that it could be enforced only against property situated within the jurisdiction of the courts of that state. Therefore, if the rights of the petitioner were of that character, it would follow inevitably that, as the steamers at the time the bill in equity before us was filed were laid up outside the jurisdiction of the courts of New Jersey, the petitioner had no interest which any foreign court is bound to respect. Therefore, we have to consider the nature of the lien given by the statute in question.

Aside from this question, we refer to the decision of the Circuit Court of Appeals for this circuit in Commonwealth Roofing Co. v. North American Trust Co., 135 F. 984, 988, and 989, 68 C.C.A. 418, passed down on February 28, 1905, as establishing the proposition that if, at the time the bills before us were filed, there was resting on those steamers or either of them an inchoate lien of any character, it is the duty of this court to give it fruition.

Returning, therefore, to the investigation of the character of the lien in this case, the first section of the statute on which the petitioner relies, approved March 20, 1857 (P.L.p. 382), as amended by the act approved April 24, 1884 (P.L.p. 248), reads as follows:

'1. Be it enacted by the Senate and General Assembly of the State of New Jersey, that whenever a debt shall be contracted by the master, owner, agent, or consignee of any ship or vessel, within this state, for either of the following purposes:

'(1) On account of any work done, or materials or articles furnished in this state, for or towards the building, repairing, fitting, furnishing or equipping such ship or vessel;

'(2) For such supplies, provisions and stores furnished within this state for the use of such ship or vessel at the time when the same were furnished;

'(3) On account of the towing of such ship or vessel, the wharfage of such ship or vessel, and the expenses of keeping such ship or vessel in port, including expenses incurred in taking care of and employing persons to watch such ship or vessel; such debt shall be a lien upon such ship or vessel, her tackle, apparel and furniture, and continue to be a lien on the same until paid, and shall be preferred to all other liens thereon, except mariner's wages.'

This is the entirety of the first section of the act to which we refer. Its phraseology is positive. It gives a positive lien on property which was within the jurisdiction of the state of New Jersey for labor and materials there furnished. This lien continues until the debt is paid. Did the statute thus vest an interest in behalf of the petitioner in the two vessels in question which followed them wherever they might go, even though into a foreign jurisdiction?

We perceive no question of the power of the Legislature of New Jersey to regulate the title of property brought within its jurisdiction, and, as an incident thereto, to impose a lien which will attach with the same effect as though an expressly agreed lien had been established by the parties involved. The authority of Legislatures over personal assets which have a locality elsewhere than at the domicile of the owner is effectively illustrated by the late decisions of the Supreme Court asserting the power of local taxation with reference thereto, even, under exceptional circumstances, with reference to vessels engaged in interstate commerce. New...