Rederiaktierbolaget v. Compania de Navegacion, 3996.

• Decision Date: 27 April 1955
• Docket Number: No. 3996.,3996.
• Citation: Rederiaktierbolaget v. Compania de Navegacion, 139 F.Supp. 327 (C.Z. 1955)
• Parties: REDERIAKTIERBOLAGET (Hans Von Rettig A/B and Wilh. Renson O/Y) as owner of THE motor tank vessel ARUBA, Libellants, v. COMPANIA DE NAVEGACION ANNE, S. A., Respondent. Credit Hypothecaire Suisse Pour La Navigation, S. A., Intervenor, The Texas Co., Hanseatic Schiffsausruestung, Fricke & Lanker, Zerseen & Co., Curtis Bay Towing Company, Hazler & Co., Cavalier Marine Supply Co., Deutsche Werft A. G. and Hancock Oil Co., Intervenors.
• Court: U.S. District Court — Panama Canal Zone

139 F. Supp. 327

REDERIAKTIERBOLAGET (Hans Von Rettig A/B and Wilh. Renson O/Y) as owner of THE motor tank vessel ARUBA, Libellants, v.COMPANIA DE NAVEGACION ANNE, S. A., RespondentCredit Hypothecaire Suisse Pour La Navigation, S. A., IntervenorThe Texas Co., Hanseatic Schiffsausruestung, Fricke & Lanker, Zerseen & Co., Curtis Bay Towing Company, Hazler & Co., Cavalier Marine Supply Co., Deutsche Werft A. G. and Hancock Oil Co., Intervenors.

No. 3996.

District Court, Canal Zone Division Balboa.

April 27, 1955.

COPYRIGHT MATERIAL OMITTED

Crowell & Rouse, by George L. Varian, New York City, and Van Siclen, Ramirez & de Castro, Ancon, Canal Zone, for libelants.

Galef & Jacobs, by Victor Jacobs, New York City, and L. S. Carrington, Ancon, Canal Zone, for respondent.

Dow & Symmers, by Daniel L. Stonebridge, New York City, and W. J. Sheridan, Jr., Ancon, Canal Zone, for intervenor, Credit Hypothecaire Suisse Pour La Navigation, S. A.

CROWE, District Judge.

On August 7, 1954, Rederiaktier-bolaget (Hans Von Rettig A/B and Wilh.Renson O/Y), a corporation of the Republic of Finland, hereinafter referred to as Rebe or libellant for the sake of brevity, instituted a cause of action in admiralty against Compania de Navegacion Anne, S. A., by filing a libel in personam with clause of foreign attachment.The libel alleges that the libellant entered into a written charter party with the respondent for the motor tank vessel Aruba for a period of two years beginning on or about December 26, 1950 with hire at a rate stipulated in the charter party, a photostatic copy of which together with various addenda is attached, payable in advance in New York in accordance with the terms of the charter party and that although the expiration date of the charter was extended to July 12, 1955 and the hire was intended and agreed upon in the addenda, the charter hire has not been paid and the respondent has defaulted and is in arrears in the amount of $213,000.The libel prays for attorneys fees and interest and an attachment against the Steam Tank Vessel Sabrina, her engines, etc.

A cost bond was executed and filed and the marshal attached the Sabrina and default was noted by order of September 3, 1954, which was vacated by consent of the libellant and the respondent was permitted to file its claim.

The libellant amended his libel and asked that the Sabrina be condemned and sold to pay libellant's damages and costs with interest and attorney fees and it also moved the court to order the Sabrina sold on the grounds that the vessel was perishable and would deteriorate in value if held in the tropical waters during the litigation.

On September 8, 1954, Credit Hypothecaire Suisse Pour La Navigation, S. A., hereinafter called the Swiss Bank or intervenor, moved to be permitted to intervene and attached to the motion an intervening libel against the Panamanian vessel, the M/T Sabrina, her engines, etc., in a cause civil and maritime of foreclosure of a mortgage.

The intervening libel alleges that the intervening libellant or intervenor is a corporation of the Republic of Switzerland and that on November 9, 1949the respondent, Compania de Navegacion Anne, S. A., borrowed from the intervenor2,200,000 Swiss Francsat 4¾% interest per annum, which loan was secured by a preferred mortgage duly executed and delivered to the intervenor.

The intervening libel alleges further that on December 8, 1953, 1,320,000 Swiss Francs were paid on the original mortgage and on the same date an additional loan of 880,000 Swiss Francs, bearing the same interest rate, was made, and that by reason of a supplemental mortgage executed to further secure the obligation, the indebtedness amounts to 1,760,000 Swiss Francs plus the interest.

Copies of the original and supplement are attached to and made a part of the intervening libel and it is alleged further that the Sabrina at the time of the execution of the mortgage and supplement was and still is a duly registered motor tank vessel under the laws of Panama and that the mortgage and supplement were duly registered in Panama.

The intervening libel alleges further that under the terms of the mortgage and supplement the failure of the respondent to secure the release of the vessel within 15 days after being libelled by the original libellant herein caused the entire unpaid part of the mortgage indebtedness to be immediately due and payable.

The intervenor alleges that under the laws of the Republic of Panama a ship's mortgage duly recorded constitutes a lien on the vessel superior to the interest, lien or claim of any and all persons, firms or corporations, except such firms and corporations as may hold preferred maritime liens on the said vessel, and prays specifically that its mortgage and supplement be declared superior to the interests, liens or claims of libellant and that the ship be sold and the proceeds applied in satisfaction of its mortgage and the supplement.

Upon consent of the libellant, the intervening libel was permitted to be filed and upon the failure on the part of the respondent or the intervening libellant to oppose the motion of libellant, the ship was sold as perishable at public auction for the sum of $400,000, which sum, exclusive of certain costs of the marshal, wages to the crew and costs of repatriating certain members of the crew, is now in the registry of this court.

The libellant, Rebe, filed exceptions to the intervening libel of the Swiss Bank and without being ruled upon the Swiss Bank filed an amended intervening libel in which in addition to the allegations pleaded in the original intervening libel it avers that its mortgages are valid and subsisting preferred maritime liens against the vessel by virtue of the "Ship Mortgage Act", 46 U.S. C.A. § 921 et seq., and that the mortgage and supplement are prior and superior to the interests, liens and claims of the libellant, Rebe, and all others except those holding preferred maritime liens.

On October 20, 1955 the libellant, Rebe, filed "Objections" to the amended libel on the following grounds: (a) the libel fails to allege a cause of action, (b) the facts alleged do not constitute a cause of action in rem or in personam within the admiralty or maritime jurisdiction of the court, (c)the court is without original jurisdiction to grant the relief prayed, (d) that the subject matter of the intervening libel is nonmaritime and the claim or lien, if any, is limited to remnants and surplus after satisfaction of all maritime liens, claims, debts and attachments and (e) that the mortgage is not a preferred mortgage within the scope of the Act of June 5, 1920, Chapter 250, Sec. 30, known as the "Ship Mortgage Act", Title 46 U.S.C.A. § 911 et seq., and the acts amendatory and supplemental to said act.

I

Exceptions in admiralty are in the nature of a demurrer and address themselves to the sufficiency of the pleading and the court must for the purposes of the motion assume as true all properly pleaded material allegations of the pleading in question.

In the mind of this court all of the questions raised by the exceptions will be determined by answering two questions: (1) Is the mortgage a preferred mortgage within the scope of the Ship Mortgage Actas amended?(2) If the mortgage is a preferred mortgage, has the intervening libellant pleaded properly and set up a cause of action?

The Supreme Court of the United States in The Thomas Barlum, 293 U.S. 21, 55 S.Ct. 31, 79 L.Ed. 176, states that prior to the passage of the Act of 1920 admiralty courts had no jurisdiction over suits to foreclose mortgages on ships and that the jurisdiction of admiralty courts depends on the "Ship Mortgage Act".

Until the passage of the Act of 1920 all ship mortgages were regarded in United States Courts as non-maritime and a ship mortgagee seeking to foreclose a defaulted mortgage was relegated to the remedies available in courts of equity or common law and frequently suffered by reason of complications and "ill-suited remedies".

When the Act was adopted, there was provided a concurrent remedy to enforce the foreclosure of such "preferred mortgages" by granting exclusive original jurisdiction to United States District Courts sitting in Admiralty.46 U.S.C.A. § 951, Subsec.K.

On several occasions the constitutional validity of the grant of jurisdiction by the Act of 1920 has been sustained.The Oconee, D.C., 280 F. 927;The Nanking, D.C., 292 F. 642;The Lincoln Land, D.C., 295 F. 358;The Thomas Barlum, supra.

The complete text of the Ship Mortgage Act, 1920 is found in 46 U.S.C.A. §§ 911 to 984 inclusive and it is a part of the Merchant Marine Act, 1920, Section 30, Chapter 250.

The intervenor, Swiss Bank, does not contend that the Ship Mortgage Act prior to the amendment of June 29, 1954 embraces its mortgage but it does contend that since the amendment, although the original mortgage was dated November 9, 1949 and the supplemental mortgage December 8, 1953, both dates antedating the amendment, the Public Law 447 which effected the amendment is remedial in character and is intended to apply to mortgages in esse at the time of its passage.

The intervenor also contends that the amendment broadens the scope of the act so that it is not now limited in its application to American mortgagees of foreign flag vessels nor to mortgagees complying with the conditions set forth in Subsection D of the Act but is applicable to "any mortgage" upon any documented foreign vessel provided such mortgage has been duly and validly executed in accordance with the laws of the foreign nation under the laws of which the vessel is documented and has been duly registered in accordance with such laws in the public register either at the port of the registry of the vessel or at a central office and therefore in spite of the fact that the Swiss Bank is not an American mortgagee and it has not complied with the conditions of Subsection D, it has a "preferred...