THE DENELFRED

• Decision Date: 04 June 1932
• Docket Number: 11708.,No. 11688,11688
• Citation: 59 F.2d 213
• Parties: THE DENELFRED (two cases).
• Court: U.S. District Court — Western District of Michigan

59 F.2d 213 (1932)

THE DENELFRED (two cases).

Nos. 11688, 11708.

District Court, E. D. Michigan, S. D.

June 4, 1932.

Longley, Bogle & Middleton, of Detroit, Mich., for libelant James N. Kimball.

Meginnity & Karay and Bratton & Bratton, all of Detroit, Mich., for libelant Weissgerber Paint & Varnish Co.

Warren, Hill & Hamblen, of Detroit, Mich., for libelant Guardian Nat. Bank of Commerce.

Sempliner, Dewey, Stanton & Bushnell, of Detroit, Mich., for libelant Kean Estates Corporation.

TUTTLE, District Judge.

This is an admiralty proceeding in which various libelants have filed libels, which have been consolidated for trial, and intervening libels, in rem against the respondent vessel, the yacht Denelfred, seeking to enforce maritime liens claimed by such libelants against such yacht. The amount which each libelant is entitled to recover, at least from the owner of the vessel, is not in dispute. Nor does such owner dispute the right of any such libelant to the lien claimed by it. It is, however, undisputed and apparent that the proceeds of the sale of the vessel will be insufficient to satisfy all of the claims of the libelants, and that such proceeds must be distributed to those entitled to maritime liens herein, according to their respective priorities.

The only lien claimed by the libelant Guardian National Bank of Commerce is based upon a mortgage held by it upon the yacht, which mortgage it concedes to be subsequent and subordinate to any maritime liens to which any of the other libelants may be entitled under applicable provisions of the Federal maritime lien statute (sections 971, 972 and 974 of title 46 of the United States Code 46 USCA §§ 971, 972, 974).

Section 971, just cited, is 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."

Section 972 provides as follows: "The following persons shall be presumed to have authority from the owner to procure repairs, supplies, towage, use of dry dock or marine railway, and other necessaries for the vessel: The managing owner, ship's husband, master, or any person to whom the management of the vessel at the port of supply is intrusted. No person tortiously or unlawfully in possession or charge of a vessel shall have authority to bind the vessel."

Section 974 contains the following provision: "Nothing in this chapter shall be construed to prevent the furnisher of repairs, supplies, towage, use of dry dock or marine railway, or other necessaries, or the mortgagee, from waiving his right to a lien, or in the case of a preferred mortgage lien, to the preferred status of such lien, at any time, by agreement or otherwise."

It will be noted from the language of the statute just quoted that only persons "furnishing" the necessaries there mentioned "to" a vessel are entitled to the maritime lien thereby prescribed. It is settled law that necessaries are "furnished" only if and when they are either actually delivered on board of, or at the side of, a vessel, or else delivered to its owner or his authorized agent for the purpose of and followed by, delivery to such vessel. Piedmont & George's Creek Coal Co. v. Seaboard Fisheries Co., 254 U. S. 1, 41 S. Ct. 1, 65 L. Ed. 97; The Vigilancia (D. C.) 58 F. 698; The Alligator, 161 F. 37 (C. C. A. 3); The Geisha (D. C.) 200 F. 864, 865; The Yankee, 233 F. 919 (C. C. A. 3); The Cora P. White (D. C.) 243 F. 246; The Defiance (D. C.) 3 F.(2d) 48; The New Rochelle (D. C.) 8 F. (2d) 59; The Fearless, 14 F.(2d) 1006 (C. C. A. 3). As was pointed out by the Supreme Court in Piedmont & George's Creek Coal Co. v. Seaboard Fisheries Co., supra, at page 8 of 254 U. S., 41 S. Ct. 1, 3: "To hold that a lien for the unpaid purchase price of supplies arises in favor of the seller merely because the purchaser, who is the owner of a vessel, subsequently appropriates the supplies to her use would involve abandonment of the principle upon which maritime liens rest and the substitution therefor of the very different principle which underlies mechanics' and materialmen's liens on houses and other structures. The former had its origin in desire to protect the ship; the latter mainly in desire to protect those who furnish work and materials."

In view, however, of the provision in the statute, already quoted, dispensing with the necessity of reliance on the credit of the vessel, the fact that necessaries furnished to a vessel are billed or charged to the owner thereof does not deprive the person furnishing such necessaries of a maritime lien therefor. Piedmont & George's Creek Coal Co. v. Seaboard Fisheries Co., supra; Lower Coast Transportation Co. v. Gulf Refining Co., 211 F. 336 (C. C. A. 5); The El Amigo, 285 F. 868 (C. C. A. 5); Carr v. George E. Warren Corporation, 2 F.(2d) 333 (C. C. A. 4); The A. S. Sherman (D. C.) 51 F.(2d) 782.

In the language of the Supreme Court in Piedmont & George's Creek Coal Co. v. Seaboard Fisheries Co., supra, at page 10 of 254 U. S., 41 S. Ct. 1, 4, "A vessel may be made liable in rem for supplies, although the owner can be made liable therefor in personam since the dealer may rely upon the credit of both."

It is equally well settled that, while such a lien may be waived by words or conduct indicating such an intention, the mere acceptance, by a person who has furnished necessaries to a vessel, of the promissory note of the owner of such vessel, does not, in itself, constitute, or result in, such a waiver, unless shown to have been accepted with that intention. The Emily Souder, 17 Wall. 666, 21 L. Ed. 683; Meyer v. Tupper, 66 U. S. 522, 17 L. Ed. 180; The John C. Fisher (C. C. A.) 50 F. 703; The Winnebago, 141 F. 945 (C. C. A. 6); Robins Dry Dock & Repair Company v. Chesbrough, 216 F. 121 (C. C. A. 1); The John L. Lawrence (D. C.) 231 F. 507; The Fairhope (D. C.) 235 F. 1007; The Hattie Thomas, 262 F. 943 (C. C. A. 2); The Kochaline (D. C.) 25 F.(2d) 503. The same rule applies to the commencement, by such a claimant, of an action in personam for the recovery of the amount claimed, the mere institution of such an action not having the effect of a waiver of the right to a maritime lien for such amount, in the absence of other evidence of an intention to waive such right. The General Custer, 10 Wall. 204, 19 L. Ed. 944; The Brothers Apap (D. C.) 34 F. 352; The Eastern Shore (D. C.) 24 F.(2d) 443.

It remains to apply the statutes, rules, and principles just mentioned to the facts in the present case, as disclosed by the evidence. To recite or discuss this evidence in detail would serve no useful purpose, although all of it has been carefully examined and considered. The material facts, as shown by the record and found by the court and the resultant status of the claims here involved may be stated, sufficiently for the purposes of this opinion, as follows:

The respondent vessel is a fifty-three foot, cabin cruiser yacht, which was owned by one Frederick W. Dennis for several years...