Nolte v. Hudson Nav. Co.
| Decision Date | 14 January 1924 |
| Docket Number | 98. |
| Citation | 297 F. 758 |
| Parties | NOLTE et al. v. HUDSON NAV. CO. FARMERS' LOAN & TRUST CO. v. HUDSON NAV. CO. et al. NATIONAL COMMERCIAL BANK & TRUST CO. OF ALBANY v. SAME. |
| Court | U.S. Court of Appeals — Second Circuit |
[Copyrighted Material Omitted]
Geller Rolston & Blanc, of New York City (Mansfield Ferry, Henry N Flynt, and Alexander C. Neave, all of New York City, of counsel), for appellant Farmers' Loan & Trust Co.
Graham, McMahon, Buell & Knox, of New York City (John B. Knox and Edward Ward McMahon, both of New York City, of counsel), for appellant National Commercial Bank & Trust Co. of Albany.
Alexander & Ash, of New York City (Mark Ash and Edward Ash, both of New York City, of counsel), for appellee Conron Bros. Co.
Before ROGERS, MANTON, and MAYER, Circuit Judges.
ROGERS Circuit Judge (after stating the facts as above).
The Conron Bros. Company, which sought successfully in the court below to assert a lien for supplies furnished, is a New York corporation, maintaining an office in the city of New York. It is a wholesale dealer in beef, poultry, butter, and eggs. The Hudson Navigation Company, the defendant, was the sole owner of certain steamers which it employed on the Hudson river in the carriage of passengers between New York and Albany. The supplies were furnished in the summer and fall of 1920. This company is hereinafter referred to as the Navigation Company, and after the latter passed into the hands of receivers, which it did by the order of February 15, 1921, an order was entered on April 16, 1921, which provided that all creditors of the Navigation Company must appear and prove their claims on or before May 2, 1921. This time for presentation of claims was by an order of the court subsequently extended to July 20, 1921.
On August 8, 1922, Conron Bros. Company gave notice of its intention to apply to the court on August 17, 1922, for leave to file its claims against certain steamers owned by the Navigation Company, and to file them nunc pro tunc as of July 20, 1921. It gave written notice that such claims were 'entitled to a priority or preference in payment by reason of their constituting maritime liens against the steamers, or for leave to file its libels upon said claims in admiralty against said steamers and thereafter proceed against the same in rem.'
On May 16, 1923, the District Court, overruling the master's report, entered an order which adjudged that Conron Bros. Company had maritime liens upon the vessels for supplies furnished, and the receiver was directed to pay the sums due on account of the liens aforesaid, and it denied the motion for leave to file libels in admiralty against the steamers. It also directed the receiver to set aside out of the sums in his hands a special cash deposit of $8,500, and to hold the same as security for the payment of the amount due to Conron Bros. Company, claimant, with interest and costs, in case of the affirmance of the order.
The sums which were found due and directed to be paid by the order were as follows: To the steamer Fort Orange, to the extent of $2,012.51, with interest thereon from September 17, 1920. To the steamer Rensselaer, to the extent of $2,300.93, with interest from November 27, 1920. To the steamer Trojan, to the extent of $2,467.31, with interest from November 23, 1920.
From this order the Farmers' Loan & Trust Company, as trustee, and the National Commercial Bank & Trust Company of Albany, as trustee, have both appealed. Neither the Hudson Navigation Company, which went into receivership and is the defendant herein, nor the receiver, have appealed.
The appeals involve solely a question of law. That question is whether Conron Bros. Company, claimant, is barred by its laches from asserting a maritime lien and its right to priority of payment. The Merchant Marine Act of June 5, 1920, 41 Stat.c. 250, p. 988, Sec. 30, which section is known as the 'Ship Mortgage Act, 1920,' provides in subdivision P (Comp. St. Ann. Supp. 1923, Sec. 8146 1/4ooo), for a lien. It reads as follows:
'Any person furnishing repairs, supplies, towage, use of dry dock or marine railway, or other necessaries, to any vessel, whether foreign or domestic, upon the order of the owner of such vessel or of a person authorized by the owner, shall have a maritime lien on the vessel, which may be enforced by suit in rem, and it shall not be necessary to allege or prove that credit was given to the vessel.'
It is admitted that Conron Bros. Company furnished to the steamers Fort Orange, Trojan, and Rensselaer, at the request of the Navigation Company, through its purchasing agent, certain meat and other food supplies, which were fit, proper, and necessary for the victualing of the crews of these vessels and for meals furnished to the passengers carried by the said steamers which were owned and operated by the aforesaid company. There is no question but that for the supplies so furnished in the city of New York Conron Bros. Company were entitled, under the above act of Congress, to a maritime lien on the vessels, there being a balance remaining unpaid for the supplies furnished of $6,780.75. For this balance the Navigation Company gave its notes. The date, maturity, and amount of these notes were as follows:
| Dates. | Maturities. | Amounts. |
| October 20, 1920. | February 21, 1921 . | $2,000.00 |
| December 20, 1920. | February 20, 1921 .. | 1,000.00 |
| December 23, 1920. | February 21, 1921 .... | 882.98 |
| December 23, 1920. | March 21, 1921 .... | 882.97 |
| January 20, 1921. | April 20, 1921 .. | 2,000.00 |
| --------- | ||
| Total ........ | $6,765.95 |
It was agreed at the time of the acceptance of the notes that, if they were not paid, the right to libel the vessels was not surrendered.
The latest date on which any of the supplies were delivered to any of the vessels was November 27, 1920. The cause of action certainly accrued at least as early as that date. But Conron Bros. Company appears to have taken no steps to enforce its rights until August 8, 1922, when it gave notice of its intention to move for leave to file its claim, and that the motion would be heard on August 17, 1922, or as soon thereafter as counsel could be heard. It moved to be permitted to file its claims nunc pro tunc as of July 20, 1921, and claimed that it was entitled to a preference in payment on the theory that it had a maritime lien against the vessels. The District Court referred the matter, as we have seen, to a special master, who reported that the claimant was not entitled to enforce a maritime lien, and was entitled only to the allowance of the claim as a general creditor. It was the master's opinion that the claimant had lost its lien by laches, as more than 19 months had been permitted to elapse between the time when the lien accrued and the time when the claimant asserted its right. 'The claimant,' said the master,
While the general maritime law of the United States has always given the materialman a lien upon a foreign vessel which he supplied with necessaries, it is well settled that it gave him no such lien upon a domestic vessel. The Lottawanna, 21 Wall. 558, 22 L.Ed. 654. To remedy this omission a number of the states, including the state of New York, passed statutes providing liens for necessaries supplied to domestic vessels. Article 4 of chapter 33 of the Consolidated Laws of New York makes provision for such a lien for provisions and stores furnished within that state for the use of such a vessel, and section 83 fixes the duration of such a lien. Its language is:
'Every lien for a debt shall cease if the vessel navigates the western or northwestern lakes, or either of them, or the St. Lawrence river, at the expiration of six months after the first of January next succeeding the time when the debt was contracted, and in case of any other vessel, at the expiration of twelve months after the debt was contracted. * * * '
It is clear, therefore, that at the time of the enactment of the Merchant Marine Act of 1920 the New York law imposed a statute of limitations of one year upon the enforcement of liens on 'domestic' vessels navigating the Hudson river, as these vessels did. The courts of admiralty act upon the maxim, 'Vigilantibus non dormientibus subveniunt leges.' 'This is the constant practice of courts of admiralty,' as stated in Benedict's Admiralty (4th Ed.) Sec. 515. The Supreme Court in The Key City, 14 Wall. 653, 660, 20 L.Ed. 896, declared the law of the admiralty respecting the defense of laches in the enforcement of maritime liens. In that case Mr. Justice Miller, writing for the court, said:
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