McRae v. Bowers Dredging Co.

• Decision Date: 31 March 1898
• Citation: 86 F. 344
• Parties: McRAE v. BOWERS DREDGING CO.
• Court: United States Circuit Court, District of Washington

86 F. 344

McRAE v. BOWERS DREDGING CO.

United States Circuit Court, D. Washington, Western Division.

March 31, 1898

Hudson & Holt, for plaintiff.

T. D Powell, for receiver.

Thomas Burke, L. C. Gilman, S. H. Piles, Gorham & Gorham, Ira Bronson, and Geo. E. De Steigueh, for interveners.

HANFORD District Judge.

The defendant is an insolvent corporation, and its property and business are in the hands of a receiver appointed by this court, upon the petition of the complainant, with the acquiescence of the defendant. The property which has come under control of the receiver consists chiefly of patent rights, including the right to own and operate, within certain territory, vessels, machinery, and apparatus for dredging, constructed according to plans and specifications covered by the several patents granted to Alphonso B. Bowers also, the dredgers Anaconda and Python, with their machinery and equipments. During the years 1895, 1896, and 1897, the defendant was engaged in operating said dredgers in the harbor of Seattle, cutting water ways and filling tide flats under a contract with the Seattle & Lake Washington Water-Way Company, a corporation which has undertaken to fill a large area of tide flats, and in connection therewith to cut and deepen water ways across said area, and to cut and construct a ship canal, with a lock, to connect Lake Washington with said water ways; said improvements being authorized by a contract made and entered into by the state of Washington with the waterway company. The defendant, under its contract during the time it was engaged in said work, dredged a water way more than 2,500 feet in length, 500 feet wide, and with a depth of water of 26 feet at low tide, and, with the material excavated by dredging said water way, filled in and made from 75 to 100 acres of land; covering a space theretofore submerged except at low tide. In doing said work the defendant contracted debts for necessary supplies and materials, for repairs to its vessels and machinery, and for wages earned by the men employed in operating the dredgers, and handling the pipes by which the material taken from the water ways was conducted to the filled area. The Anaconda and Python are vessels designed to operate afloat, and to navigate from place to place where their services may be required in dredging and deepening rivers, harbors, and water ways. Before coming to Seattle, they have each been employed at other distant places, and have made voyages by being towed upon the Pacific Ocean. Their machinery consists of rotary cutters, for digging in mud and sand beneath the water; and centrifugal pumps, by which the sand, mud, and material loosened up by the rotary cutters, and drawn up in a state of solution, is forced through lines of pipe to places of deposit; and engines for driving the cutters and pumps. The interveners are all creditors of the defendant, and by their petitions seek to have their claims adjudicated, and payment thereof decreed to be made out of the proceeds of the assets in the hands of the receiver. Some of them allege that they extended credit to the dredgers for supplies and materials necessary for their use in the business in which they were engaged, and for repairs; and others allege that they have earned wages, as engineers, firemen, and deck hands, in operating the dredgers and the machinery connected therewith, and in doing work necessary in watching and handling the pipes used in connection with the dredgers. All of these interveners claim to have maritime liens upon the dredgers and their equipments for the amounts due to them, respectively, and that the dredgers and their equipments, if not in the custody of the receiver, would be subject to process in suits which might be prosecuted in admiralty to enforce their alleged liens; and for these reasons they ask this court to allow their claims as preferential debts to be paid out of the proceeds to be derived by sale of the dredgers and their equipments. When a court of equity takes control and custody of the assets of an insolvent corporation, it does not assume to destroy existing liens, or to devest the rights of lien creditors. The court assumes the burden of protecting as far as may be the rights of all parties having interests. Therefore it will not surrender property in its custody, to be disposed of under process from other courts, but will, when necessary to enable creditors to collect their dues, order a sale of the assets, and distribute the funds according to the rights and priorities of the owners and creditors. Pratt v. Coke Co., 168 U.S. 259, 18 Sup.Ct. 62; In re Scott, Fed. Cas. No. 12,517; In re People's Mail Steamship Co., Id. 10,970. Therefore I hold that the interveners have a standing in this court to assert their claims, and, if they succeed in establishing maritime liens, they should be paid from the proceeds in preference to the general creditors of the defendant corporation.

The main question in the case is whether the dredgers are vessels subject to admiralty process, whether the work which they were doing was a maritime service, whether the contracts under which they were supplied and kept in repair are maritime, and whether their crews have maritime liens for their wages. The writers and judges who have expounded maritime laws, and the rules by which the jurisdiction of admiralty courts must be measured, have not succeeded in making known any satisfactory test by which floating structures which are subjects of admiralty jurisdiction, and to which maritime liens may attach, may be distinguished from those which have no place in the realm of maritime jurisprudence. There are numerous decisions which tell that adaptability to float on the water, masts, sails, propelling machinery, steering apparatus, capacity for carrying merchandise or passengers, and mobility, are features by which a subject of admiralty jurisdiction may be recognized but the decisions are not all consistent with any guiding principle which makes admiralty jurisdiction depend upon the size or shape or a vessel, her means of propulsion, or her adaptability for use. According to the decisions, a ship, although afloat, is not a ship if her original construction, rigging, and furnishing remain incompleted. Men employed on board of a vessel for her preservation do not acquire maritime liens for their wages if she is out of commission; that is, if she has no voyage in contemplation. A ship is not employed in a maritime service when used merely as a warehouse to hold her cargo after the completion of a voyage, and while navigation is suspended. The actual employment of a structure designed for use in the transportation of merchandise or passengers by sea is not under all circumstances conclusive. Wharves and warehouses are necessary for the transportation and preservation of merchandise to be carried in ships to a distance, and yet such structures, although in fact instruments of commerce and aids to navigation, are not maritime vessels. Floating dry docks, used in the repair of vessels, are not maritime things. On the other hand, a private yacht or pleasure boat, not designed for nor employed in trade or commerce, is a vessel which may be a subject of admiralty jurisdiction. The width of a stream or the length of a voyage is no criterion by which to determine the character of the service, nor the question of admiralty jurisdiction. Neither will jurisdiction of a floating structure be denied by a court of admiralty because it does not carry masts, propelling machinery, or steering apparatus, or lacks accommodations for a crew. There is great confusion in the decisions as to whether particular structures, such as pile drivers, wharf boats, rafts, and dismantled vessels, are to be classed within or without the pale of admiralty jurisdiction. The following is a list of cases in which the jurisdiction has been sustained over a great variety of floating structures, including a floating elevator, a harbor tugboat of less than five tons, a scow, a canal boat used only upon an artificial canal wholly within one state, a barge without masts, sails, propelling machinery, rudder or anchor, a ferry boat, a stream derrick boat, a floating boat house, a floating bath house, a pile driver, a dredger, and a raft of timber: 1 Am. & Eng. Enc. Law (2d Ed.) p. 255; The Cheeseman v. Two Ferry Boats, Fed. Cas. No. 2,633; The Dick Keys, Fed. Cas. No. 3,898; The E. M. McChesney, Fed. Cas. No. 4,463; Id., Fed. Cas. No. 4,464; Fifty Thousand Feet of Timber, Fed. Cas. No. 4,783; The Florence, Fed. Cas. No. 4,880; The Gate City, Fed. Cas. No. 5,267; The General Cass, Fed. Cas. No. 5,307; The Hezekiah Baldwin, Fed. Cas. No. 6,449; The Kate Tremaine, Fed. Cas. No. 7,622; Maltby v. Steam Derrick Boat, Fed. Cas. No. 9,000; Raft of Spars, Fed. Cas. No. 11,528; The W. J. Walsh, Fed. Cas. No. 17,922; Malony v. City of Milwaukee, 1 Fed. 611; Murray v. The F. B. Nimick, 2 Fed. 86; Endner v. Greco, 3 Fed. 411; The Old Natchez, 9 F. 476; U.S. v. One Raft of Timber, 13 F. 796; Muntz v. Raft of Timber, 15 F. 555, 557; The B. & C., 18 F. 543, affirmed in Ex parte Boyer, 109 U.S. 629-632, 3 Sup.Ct. 434; The Alabama, 19 F. 544; Id., 22 F. 449; The Ella B., 24 F. 508; The Murphy Tugs, 28 F. 429; The Pioneer, 30 F. 206; Woodruff v. One Covered Scow, 30 F. 269; Disbrow v. The Walsh Bros., 36 F. 607; Aitcheson v. The Endless Chain Dredge, 40 F. 253; Coasting Co. v. The Commodore, 40 F. 258; Seabrook v. Raft of Railroad Cross-Ties, 40 F. 596; Bywater v. Raft of Piles, 42 F. 917; The City of Pittsburgh, 45 F. 699; The Progresso, 46 F. 292; The St. Louis, 48 F. 313; The Wilmington, 48 F. 566; Stebbins v. Five Mud Scows, 50 F. 227; Id., 12 C.C.A. 359; 64 F. 495; The Atlantic, 53 F. 607; The Starbuck 61 F. 502; The...