The Arcturus

• Citation: 18 F. 743
• Parties: THE ARCTURUS.
• Decision Date: 01 January 1883
• Court: United States District Courts. 6th Circuit. United States District Court of Northern District of Ohio

18 F. 743

THE ARCTURUS.

United States District Court, N.D. Ohio, Eastern Division.

October Term, 1883

H. D Goulder, for libelants.

Mix Noble & White, for respondents Dunford and Alverson.

WELKER J.

In this case an important question is for the first time presented to this court in a form requiring its careful consideration and determination. For several years past it has been the practice to award to the party first procuring the seizure of a vessel by virtue of proceedings in admiralty, a precedence over the holders of other claims of the same (or lower) rank in the distribution of the proceeds of sale of the property seized, where the fund in the registry proved insufficient for the satisfaction of all; the commissioner to whom references have been made for the purposes of distribution having so reported on the authority of Ben. Adm. 332, and such others as have been in accord with Judge BENEDICT'S views on this question. To these reports, so in harmony with the opinions of this able jurist, no formal exception has heretofore been taken, and until now the judicial determination of the question by this court has not been invoked. The language of Judge BENEDICT on this subject is as follows:

'The order of distribution or marshaling of the proceeds (of the sale of a vessel) is settled by the court according to the legal priority. * * * In claims of the same rank the one first commencing his proceedings is preferred in the distribution. The party first seizing holds the property against all other claims of no higher character.'

In support of the text so quoted, reference is made to the following authorities: Blain v. The Carter, 4 Cranch, 328; The Paragon, 1 Ware, 322; The Phebe Id. 359; The Globe, 1 (should be 2) Blatchf.C.C. 427; The Adele, 1 Ben. 309; Boyd, Proc. 45.

From an examination of all the above, excepting the last named, which is not at hand, it appears that the case of The Globe was decided by Justice NELSON, of the supreme court, holding the circuit court in 1852. The language used by the learned judge in terms would fully support Judge BENEDICT'S dictum, viz.:

'It has been argued that this maritime lien against a vessel for supplies and materials furnished to her master at a foreign port, is an abiding lien, and adheres to the vessel, and may be enforced over all claims of a like nature subsequently accruing in the course of her employment. I cannot assent to this position. On the contrary, I am satisfied that the true rule upon the subject if that, in respect to maritime liens of this description, the party first instituting legal proceedings for the purpose of enforcing his claim against the vessel is entitled to satisfaction out of the proceeds of her sale.'

The question to which this language was applied was whether, as against a purchaser of a vessel at judicial sale, in virtue of proceedings in rem under the water-craft law of Ohio, one who had previously furnished supplied to the vessel in a foreign port could enforce a lien upon her; and was not a question as to who had a prior right to the satisfaction of his claim out of a fund in the registry of the court produced by her judicial sale. And the learned judge held that the sale, having been in a proceeding in rem, 'must be held conclusive upon the transfer and disposition of the vessel in question, in whatever place she may be found, and upon the title to her, by whomsoever it may be questioned, and whether involved directly or collaterally. ' In other words, there had been a judicial sale in a proceeding in rem, which was notice to the world, and the purchaser took the vessel divested of all liens not presented in that suit for adjudication. Perhaps, if the fund produced by the sale of the Globe had been in the registry of Judge NELSON'S court, and if the controversy had been in regard to priority of right to share in the fund, the language of the court would have been somewhat modified. The case of Blaine v. The Carter, 4 Cranch, 328, seems even more unsatisfactory as an authority in support of Judge BENEDICT'S dictum, and the case of The Adele, 1 Ben. 309, maintains the theory that all claims upon the fund in the registry which are of equal rank should be satisfied in the order in which the several libels are filed. The reference to the cases of The Paragon and The Phebe, in Ware, 322, 359, seems still more unfortunate as authority for the doctrine they are supposed to sustain, as will be seen from the following quotation from the opinion of the court in the case of the The Paragon, viz.: 'When all the debts hold the same rank or privilege, if the property is not sufficient to fully pay all, the rule is that the creditors shall be paid concurrently, each in proportion to the amount of his demand. ' The same language is adopted in the subsequent case of The Phebe. Thus it appears that the theory of Judge WARE was diametrically opposed to the doctrine in support of which it seems to have been quoted. I apprehend that the opinion of Judge BENEDICT, and those who hold with him on the question at issue, rests upon the theory that the maritime lien is simply a right to proceed by suit against a vessel or other thing which is the subject of a claim, by name; in other words, by an action in rem, instead of proceeding by suit against the owner of the thing, in personam. And this being so, the one who first asserts that right is entitled to complete satisfaction of his claim as against others of equal rank. And this seems to have been the view taken by Mr. Justice NELSON in the case of The Globe.

'The question has been the subject of examination by the learned district judge for the southern district of New York. In a...