Gulf Coast Marine Ways v. The JR Hardee

• Decision Date: 06 May 1952
• Docket Number: No. 117.,117.
• Citation: 107 F. Supp. 379
• Parties: GULF COAST MARINE WAYS, Inc. v. The J. R. HARDEE et al.
• Court: U.S. District Court — Southern District of Texas

107 F. Supp. 379

GULF COAST MARINE WAYS, Inc. v. The J. R. HARDEE et al.

No. 117.

United States District Court S. D. Texas, Brownsville Division.

May 6, 1952.

Kleberg, Mobley, Lockett & Weil, Corpus Christi, Tex., for libelant.

C. S. Eidman, Jr., Brownsville, Tex., for intervening libelant, Pan American State Bank.

Crain, Muggley & Hardy, San Benito, Tex., for intervening libelants, W. W. Zimmerman, d/b/a Humble Marine Station and Marine Mart, Inc.

Sharpe, Cunningham & Garza, Brownsville, Tex., for intervening libelants, Pleason and Sanchez.

Brian S. Odem, U. S. Atty., E. H. Patton, Jr., Asst. U. S. Atty., Houston, Tex., for intervening libelant, United States.

Rentfro, Rentfro & Vivier, Brownsville, Tex., for intervening libelants, Coastal Iron Works, Brownsville Nav. Dist. and Oran Neck, d/b/a Precise Electric Co.

Crawford Cofer, Brownsville, Tex., for respondents.

ALLRED, District Judge.

Original libel filed November 5, 1951, by Gulf Coast Marine Ways, Inc. (hereinafter called Gulf Coast), against the "Hardee" in rem and against the owner, Gibson Collins, in personam. The vessel was seized by the Marshal and sold under orders of the court for $6,300, now in the registry of the court.

Meantime the other libelants named above were permitted to intervene, setting up claims totaling more than $28,000. After payment of cost, only about $5,300 will be left for distribution among the claimants. The question before the court is, of course, one of priorities and distribution.

Gulf Coast's claim was for repairs to the vessel in December 1950. This was tried separately and interlocutory decree heretofore rendered for a balance of $1,530.44, plus costs and interest.

Pan American State Bank (hereafter called the Bank) claims a balance of $3,236 due on a preferred ship's mortgage for $8,000 on the Hardee, executed by the owner (Collins), dated August 9, 1950 and filed with the Collector of Customs at Brownsville August 22, 1950. The facts concerning this mortgage, its recording, etc., will be stated in detail hereafter. The Bank contends that its mortgage lien is superior to all others.

Intervenors, W. W. Zimmerman, Marine Mart, Coastal Iron Works and Oran Neck, furnished various supplies to the Hardee, some before, some after the Bank's mortgage was filed for record at Brownsville. The details will be stated as the claims are disposed of.

Pleason and Sanchez claim subrogation to the rights of the Bank, under its preferred ship's mortgage, to the extent of $2,400 by reason of payments made by them to the Bank on the note and mortgage on September 5th and October 10, 1951, under an agreement with the Bank and the owner.

Brownsville Navigation District claims $141.65 for dockage prior to the seizure and $81 after the seizure.

The Government's claim is for income taxes assessed against the owner, Collins and his wife, for the year 1943, in the sum of $17,858.32. The Government claims its lien is superior to all the maritime liens asserted by the other claimants. Since this contention, if sustained, would exhaust all the proceeds of the sale it will be discussed first.

The Hardee (a shrimp boat), was built at St. Augustine, Florida, in 1939. Later its home port was transferred to New Orleans by John R. Hardee, Jr., the owner, who sold it to the Wild Life Service of the Interior Department in December 1940. Collins, the present owner, acquired the vessel in 1944. He sold it the same year to one Toups but re-acquired it in 1945. Collins and his wife were residents of Thibodaux, Louisiana, in Lafourche Parish, but the home port of the vessel was New Orleans.

The Government's assessment for income taxes was received by the Internal Revenue Collector at New Orleans on April 16, 1949 and mailed to Collins and his wife. Notice of the tax lien "was filed with the Clerk, Parish of Lafourche, at Thibodaux, Louisiana", where Collins lived, in 1949.

The Hardee, a shrimping vessel, was being used by Collins in the shrimping trade prior to and during August 1950, in the Brownsville area. Its home port was transferred from New Orleans to Brownsville, Texas, on July 18, 1950.

On August 9, 1950, Collins executed a preferred ship's mortgage in favor of the Bank at Brownsville, to secure a note for $8,000, payable in monthly installments. The Bank secured an abstract of the ship's title from the collector at New Orleans, which showed that the vessel was clear of all liens and claims of record in that office; and, on August 22, 1950, the preferred mortgage was duly filed with the office of the Collector of Customs at Brownsville, Texas. Thereafter, at all pertinent periods, Brownsville remained the home port of the Hardee. On January 24, 1952, a balance of $3,236.60 was due on the mortgage (including interest and attorney's fees as provided in the note and mortgage).

On September 29, 1951, the Government filed another notice of its tax lien against Collins and wife in the office of the County Clerk of Cameron County, at Brownsville, Texas. Notice of the tax lien was attempted to be filed with the U. S. Customs office at Brownsville, November 7, 1951, but was rejected by the Customs office because the required affidavit was not attached and the official number and description of the Hardee was not shown.

The Government contends that since its tax lien is not maritime, its priority is not controlled by the Ship Mortgage Act, 46 U.S.C.A. §§ 911-953, 46 U.S.C.A. §§ 911-953, and, therefore, is superior to the Bank's and all other maritime liens asserted in this proceeding. All parties concede that the Government's tax lien is not maritime so no discussion of the question is necessary.

The lien and priority claim of the United States is based upon 26 U.S.C.A. §§ 3670-3672. In substance these sections provide that when a tax (due the United States) is not paid, it becomes a lien upon all property of the taxpayer, effective at the time the assessment list is received by the collector and continuing until the liability is satisfied; but that the lien shall not be valid against a mortgagee, pledgee, purchaser or judgment creditor until notice of the lien is filed in the office in which the filing of such notice is authorized by the law of the state in which the property is situated, when the state has by law provided for the filing of such notice; or, if the state has not so provided, until notice is filed with the clerk of the United States district court for the judicial district in which the property is located.¹

Louisiana has adopted the Uniform Federal Tax Lien Statute which requires notice to be filed with the recorder of mortgages of the Parish where the property sought to be subjected to the lien is located.² Such statutes, where they are clear and unambiguous, must be construed literally³ and where they are not substantially complied with, the Government's tax lien is not effective against mortgagees, pledges, purchasers, etc.⁴

Here it is undisputed that while the Government filed its notice in 1949 with the Clerk of the Louisiana Parish in which Collins lived, it did not file it in Orleans Parish where the Hardee was located (since New Orleans is its home port). Therefore, the Government obtained neither lien nor priority as to the vessel by the filing in Lafourche Parish.⁵ Since the Bank filed its preferred mortgage with the Collector of Customs at Brownsville August 22, 1950, and the Government did not file its tax lien with the County Clerk there until September 29, 1951, clearly the Bank's claim is superior to that of the Government.

Texas has not enacted the Uniform Federal Lien Statute but has provided for the filing of such liens with the county clerk, art. 6644, Vernon's Texas Civil Statutes.⁶ There arises, therefore, the question as to the superiority or priority of the Government's lien, fixed on September 29, 1951, and the claims of the other intervenors. These are of three classes: (a) the subrogation claim of Pleason and Sanchez for payments made to the Bank on September 5th ($1,700) and October 10, 1951 ($700); (b) the claims for supplies furnished the vessel before and after September 29, 1951; and (c) the claim of Gulf Coast for repairs made to the vessel after a collision in 1950.

The note of Collins, secured by the preferred mortgage on the Hardee, was payable in monthly installments of $400 for 11 months and a final payment of $3,600 due on August 9, 1951, Collins was delinquent on the final due date to the extent of $5,200. On September 5, 1951, Pleason and Sanchez (d. b. a. Brownsville Shrimp Exchange), deposited $1,700 of their own money in the Bank in the name of the Exchange as "Trustee for Gibson Collins, owner of Shrimp Boat J. R. Hardee", pursuant to a written agreement with Collins, addressed to and accepted by the Bank. This agreement recited the fact of the preferred mortgage and the delinquency on the note, the opening of the account and an obligation on the part of Pleason and Sanchez to deposit a minimum of $700 additional each month for six successive months, plus interest. If at any time the Bank felt insecure, it was given the right to apply the sums on deposit to payment of the note. The last paragraph of the agreement reads as follows:

"You are also directed not to release said preferred ship's mortgage upon receiving in full principal plus interest on the above described note until you are duly notified by Brownsville Shrimp Exchange and Gibson Collins of the exact amount, if any, paid on said note out of funds solely belonging to Brownsville Shrimp Exchange, and upon being so notified you are hereby directed to assign such portion of said note and mortgage to the Brownsville Shrimp Exchange to secure any such sums which have been advanced in payment of note plus interest by the Brownsville Shrimp Exchange".

On October 10, 1951, in compliance with the agreement, Pleason and Sanchez deposited an additional $700, making a total of $2,400, deposited as security for and to be...