Edwards v. Elliott Et Al

• Decision Date: 01 October 1874
• Citation: 22 L.Ed. 487,88 U.S. 532,21 Wall. 532
• Parties: EDWARDS v. ELLIOTT ET AL
• Court: U.S. Supreme Court

88 U.S. 532

22 L.Ed. 487

21 Wall. 532

EDWARDS v. ELLIOTT ET AL.

October Term, 1874

ERROR to the Court of Errors and Appeals of the State of New Jersey; the case being thus:

The Constitution ordains that——

'The judicial power [of the United States] shall extend to all cases of admiralty and maritime jurisdiction.'

And the Judiciary Act enacts:

'SECTION 9. That the District Courts [of the United States] shall have exclusive original cognizance of all civil causes of admiralty and martime jurisdiction . . . saving to suitors in all cases the right of a common-law remedy, where the common law is competent to give it.'

These provisions of organic and Federal statutory law being in force, an act of the legislature of New Jersey, 'for the collection of demands against ships, steamboats, and other vessels,'¹ approved March 20th, 1857, enacted that whenever a debt shall be contracted by the master, owner, agent, or consignee of any ship or vessel within the State, on account of any work done or materials furnished in this State for or towards the building, repairing, furnishing, or equipping such ship or vessel, such debt shall be and continue a lien on the vessel for nine months; and that any person having such claim over $20 may apply to the proper officer for a warrant to enforce his lien; that the officer receiving the warrant may seize the vessel and give the prescribed notice; that any other person having such lien may make proper demand and proof and be admitted as an attaching creditor; that the owner or any party may at any time before sale apply for her discharge upon giving bond to pay such claims as shall be established to have been subsisting liens under the act; that upon such bond being given the vessel shall be discharged, and the creditors may sue upon the bond alleging their claims and averring them to be subsisting liens; and that if no such bond is given, proceedings may be taken as provided in the act for the sale of the vessel, or such part of her tackle, &c., as shall be sufficient to pay the claims.

This statute of New Jersey being on its statute-book, an article of agreement was made November 3d, 1866, between Henry Jeroleman of the first part, and a certain Hasbrook, and several others of the second, for building a schooner of specified dimensions, for the consideration of $54 per ton; the builder to furnish all labor and materials and deliver the vessel. The whole price, at the said rate per ton, was to be about $21,000, and the payments were to be made by Hasbrook and the others, at stated times during the progress of the work, as: $2500 when the keel was laid; $3000 when the frame was up; $3500 when ceiled, and decks laid; $3500 when outside planks were on and squared off; $3500 when the poop deck was on; $2000 when ready for launching, and the balance when delivered according to contract. And it was agreed that as the said several instalments were paid, the schooner, so far as then constructed, and the materials therein inserted, should be and become the property of Hasbrook and the others.

The schooner was built at East Newark, New Jersey. Two persons, one named Elliott, and the other Ripley, furnished timber for the vessel; and on the 19th of June, 1867, alleging that they had not been paid for their timber, they caused her to be seized by the sheriff under the already quoted statute of New Jersey; the vessel, at the time of this seizure, being unfinished, on the stocks, and neither named, enrolled, licensed, or provided with a crew or master. Elliott had furnished his timber in November, 1866, and Ripley his, between January 15th and May 10th, 1867.

On the 24th of June, 1867—and, therefore, after Elliott and Ripley had furnished the timber to Jeroleman—Jeroleman assigned the contract giving him the right to build the vessel, to one Edwards, by whom the vessel was finished.

On the 2d of July, 1867, Edwards, the new owner, gave bond to Elliott and Ripley, in the manner prescribed by the New Jersey statute when a liberation of a vessel from seizure is desired, and the vessel was discharged from the seizure.

Jeroleman had been paid more than the original contract price, but the time when any payments had been made to him did not appear; nor any fact upon which an appropriation of payment could be founded.

The vessel being discharged from the seizures, Elliott and Ripley brought suit in the Supreme Court of New Jersey against Edwards on the bond, the declaration alleging that the debt was contracted in building the vessel, and that the lien was put upon her while she was yet on the stocks unfinished. The action was debt, and the declaration was in the usual form.

As was stated by counsel in this court, and as is also stated in reports of the case in the Supreme Court of New Jersey,² the defendants demurred to the declaration and insisted that the statute of the State, by attempting to create a lien on ships, under State law, assumed a control of a subject in its nature maritime, and one, therefore, over which under the already quoted clauses of the Federal Constitution and of the statutes of the United States, the Federal courts alone had cognizance; and, therefore, that the State statute was void. The New Jersey Reports further state that the demurrer was overruled; the court in its judgment overruling it, admitting that if the lien sought to be enforced, had been for materials used in repairing a vessel which had been finished, launched, and enrolled, it could not have been enforced, and that so far as the statute was designed to aid in the enforcement of a maritime contract for which the admiralty might proceed in rem—it was void under the objection stated; but holding that the lien set up having been for materials used in building a vessel—a matter done on land, entirely under State control, and payment for which might be enforced by a common-law remedy, or by any new remedy which the legislature might provide—the statute was pro tanto valid.

The counsel in this court stated that after this opinion the demurrer was withdrawn.

However, in the transcript of the record sent here nothing whatever about any demurrer appeared. All that appeared was that to the declaration abovementioned several special pleas were filed, among them these:

'1. Nil debet, generally.

'2. Nil debet, as to Elliott.

'3. Nil debet, as to Ripley.

'4. Claim of Elliott not a subsisting lien.

'5. Claim of Ripley not a subsisting lien.

'6. That Jeroleman, who built the vessel, was not owner or agent.

'7. That the debts were not contracted by any owner, agent, or consignee.'

And that on issues to these pleas the case was tried.

The facts of the case, as already given, were found by a special verdict.

One question in the case obviously was the question, much agitated in England and here, namely, whether in the case of an executory contract to build a vessel to be paid for by instalments as the work progresses, the title remains in the builder until the work is completed and delivered, or whether the title passes to the person for whom the vessel is to be built; in other words, whether in such a case the contract is one for work and materials or one for sale.

A second question also obviously was (admitting that, as a general principle, the contract is in such a case one leaving the title in the builder until the work is completed and delivered), what was the effect of the final clause of the particular contract under consideration, the part on page 534, italicized, in changing this general rule? If it did change what was assumed to be the general rule, then, if the payments were made before the materials were furnished, the title was divested out of Jeroleman, since he, then, though builder, could not be 'owner' of the vessel when the materials were furnished, and, therefore, was not competent to charge it with liens; and consequently the defendants were not liable on their bond, which took the vessel's place.

The Supreme Court was of the opinion that the builder was, on general principles, to be regarded as owner; that the final clause divested his title, on the payments of the money; that the burden lay upon the claimants of the vessel—who were the obligors in the bond—to show the time of these payments, or some fact upon which an appropriation of payment could be founded, and as they had not shown either, that, therefore, in law, the builder (Jeroleman) was to be regarded as the owner when the materials were delivered, and accordingly that debts contracted by him did become liens.

Judgment accordingly went for the plaintiffs, and the case was taken by the defendants from the Supreme Court of New Jersey to what in that State is a still higher court, the Court of Errors and Appeals.

The errors there assigned were:

'1. That the Supreme Court held the act of March 20th, 1857, valid and constitutional.

'2. That the said court decided that Jeroleman, the builder of said vessel, was the owner thereof and competent to charge it with liens.

'3. That the said court adjudged that the respective claims of the plaintiffs were subsisting liens, under the laws of the State of New Jersey, on the vessel, at the time of exhibiting the same.'

On the 20th of August, 1872, the Court of Errors and Appeals affirmed the judgment of the Supreme Court. The entry of affirmance, or 'rule to affirm,' as in the transcript it was called, as the same came here in the transcript, was dated August 20th, 1872, and was thus:

'This case coming on to be heard in the Court of Errors and Appeals, and the said court being of opinion——

'That the act of the legislature of the State of New Jersey, entitled: 'An act for the collection of demands against ships steamboats, and other vessels,' approved March 20th, 1857, is not in any respect repugnant to the Constitution or laws of the United States, as contended for by the plaintiffs in error, but is in every respect valid and constitutional; and,

'That Henry Jeroleman, the...