The Kalfarli, 37.

• Decision Date: 16 November 1921
• Docket Number: 37.
• Citation: 277 F. 391
• Parties: THE KALFARLI.
• Court: U.S. Court of Appeals — Second Circuit

277 F. 391

THE KALFARLI.

No. 37.

United States Court of Appeals, Second Circuit.

November 16, 1921

Bullowa & Bullowa, of New York City (Lawrence E. Brown, of New York City, of counsel), for appellant.

Thomas J. Cuff, of New York City, for appellee.

Before ROGERS, HOUGH, and MANTON, Circuit Judges.

ROGERS Circuit Judge.

This is a suit in admiralty, in which the libelant has filed his libel against the steamship Kalfarli to recover the sum of $3,626, which he alleges is the reasonable value of work labor, and services which were necessary for equipping the vessel, and which he avers that he performed at the special instance and request of the master and owner of the vessel between December 26, 1917, and January 5, 1918.

The answer denies the allegations of the libel, except the nonpayment of the amount demanded and the jurisdiction of the court, and alleges that the work was performed pursuant to a contract made between the respondent, as master of the vessel, and one Andrew Olsen, and that the contract was solicited by the libelant for and on behalf of Olsen, and further alleges that the reasonable value of the work, labor and services rendered was but a fraction of the sum alleged in the libel.

Testimony for the libelant was taken in open court, and testimony for the claimant was taken out of court; the last of such testimony having been taken on November 8, 1918. The District Judge rendered an opinion on February 3, 1920. He found in favor of the libelant, but directed that the case be sent to a commissioner, 'if further hearing is desired as to the amount. ' On February 18, 1920, an interlocutory decree and order of reference was filed and entered, and on April 20, 1920, the commissioner began to take testimony, and continued thereafter to do so from time to time until May 28 1920, when it was declared that the testimony was closed.

On August 16, 1920, the commissioner filed his report. He reported in favor of the libelant in the sum of $2,160.05, having disallowed a number of items in his claim. The amount allowed, with interest thereon from January 5, 1918, which amounted to $334.30, made in all the sum of $2,494.35. On August 19, 1920, the claimant filed his exceptions to the commissioner's report, and on September 9, 1920, the District Judge entered a decree, in which it was ordered that the report of the commissioner be in all things confirmed, and that the libelant recover the amount recommended by the commissioner, together with his costs, which amounted together to the sum of $2,690.85. In his opinion the District Judge said:

'There may have been some lack of understanding on the part of the master of the ship as to the capacity in which Andersen was undertaking to do the work, and perhaps Olsen was rightfully displeased with Andersen for obtaining work from his old customers, without making plain to them the change in relation and that the work would not be done by Olsen's men or at his shop. But neither of these propositions is a defense to an action for work actually performed by Andersen as principal, on the orders of the master, even though the master mistakenly closed his eyes, disregarded the statements and facts, and thought he was an agent.

'The claimant invokes the rule that the libelant must have clean hands and be guilty of no deception before he may come into equity for relief. But the present action is not in equity, but at law. Unless there was an absolute absence of contract, or of consent and acquiescence in the performance of the work on the ship, the ground of objection on the part of the third party as to business methods used in obtaining the work is not a defense to a charge for the work done. Even in equity the relation of third parties would not affect the equities between the libelant and the claimant, in an action on a lien for work and materials. The testimony produced upon the trial seemed to show in general that the work was well performed and that the amount of the bill, while large, due to increased wages and other causes, was not exorbitant or incorrect.'

The statement that 'the present action is not in equity, but at law,' must have been made inadvertently. The District Judge very well knew that the suit was neither at law nor in equity, but in admiralty, and an admiralty court administers maritime law by a procedure peculiar to itself and different from that followed by either courts of common law or of equity. The admiralty courts owe their origin largely to the civil law, and the process and methods of procedure in such courts, as was pointed out in Richmond v. New Bedford Copper Co., 2 Lowell, 315, Fed. Cas. No. 11,800, are even more free from technical rules than is the case with the equity courts.

But before entering upon a particular consideration of the claims made by this libelant, and the character of those claims and the evidence in this record concerning them, it seems desirable, for reasons which will more fully appear in a later portion of this opinion, that we should call attention to certain fundamental propositions which underlie the jurisdiction and powers of this court respecting the questions which arise in connection with the libel now before us.

We may observe that one who makes repairs or furnishes supplies to a vessel may have an action in personam to recover therefor, or he may have a right in rem against the ship, which enables him to cause the ship to be sold so that he may be repaid out of the proceeds. Under the maritime law, when unchanged by statute, his right to a lien against the ship depended upon the character of the ship. Thus in The General Smith, 4 Wheat. 438, 4 L.Ed. 609, decided by the Supreme Court in 1819, in an opinion written by Justice Story, it was decided that by the common law materialmen, furnishing repairs to a domestic ship, have no lien upon the ship for their demand, although a lien exists for repairs made or necessities furnished to a foreign ship, or to a ship in a port of a state to which she does not belong. It appears that a strenuous attempt was made to bring about a reconsideration of the question in Rodd v. Heartt, 21 Wall. 558, 22 L.Ed. 654, but the court held it to be a settled principle of American jurisprudence. Where supplies are ordered in the home port, or repairs are made in such a port, they are thought to be furnished on the personal credit of the owner, as ordinary goods are furnished. But in a foreign port, in the absence of the owner, the presumption is that the supplies are furnished or the repairs made on the credit of the ship.

Congress, however, by the Act of June 23, 1910, 36 Stat.p. 604, c. 373 (Comp. St. Secs. 7783-7787), enacted that any person furnishing repairs, supplies, or other necessaries to a vessel whether foreign or domestic, upon the order of the owner or owners of such vessel, or of a person by him or them authorized, shall have a maritime lien on the vessel which may be enforced by a proceeding in rem, and section 2 provides:

'That the following persons shall be presumed to have authority from the owner or owners to procure repairs, supplies, 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.'

In the case now under consideration libelant is seeking to recover the value of the labor and materials furnished, not by a proceeding in personam, but by one in rem, claiming that he has a lien on the vessel. A lien is an exception to the general rule, which entitled all creditors to participate equally in all the property of their debtor, and a maritime lien, as Mr. Justice Curtis pointed out in The Larch, 2 Curt. 427, 14 Fed.Cas. 1139, No. 8,085, being also a jus in re, which goes with the thing into the hands of purchasers, and so is embarrassing to commerce, is stricti juris; and in Astor Trust Co. v. E. V. White & Co., 241 F. 57, 60, 154 C.C.A. 57, 60 (L.R.A. 1917E, 526), the court declares that a maritime lien is 'an equitable right, springing from the necessities of commerce.'

The right to proceed in rem is one which must be pursued in the admiralty courts; the right to proceed against the vessel in rem being distinctly an admiralty remedy, and as such exclusively within the jurisdiction of the admiralty courts of the United States. But the right to proceed in personam against the shipowner on his contracts money damages alone being demanded has always been within the commonlaw courts which have a concurrent jurisdiction with the courts of admiralty in such cases. Benedict's Admiralty, Sec. 127.

We observe also that while the courts of admiralty are not courts of equity, they proceed, as this court declared in Higgins v. Anglo-Algerian S.S. Co., Ltd., 248 F. 386, 160 C.C.A. 396, upon equitable principles. In Benedict's Admiralty (4th Ed.) Sec. 261, it is said that the court of admiralty has 'in certain respects the capacity of a court of equity,' although it 'is not a court of general equity, nor has it the characteristic powers of a court of equity. ' The author adds that--

'It is bound, by its nature and constitution, to determine the cases submitted to its cognizance upon equitable principles, and according to the rules of natural justice. It cannot, in a technical sense, be called a court of equity. It is rather a court of justice.'

In Brown v. Lull, 2 Sumn. 443, 4 Fed.Cas. 407, No. 2,018, Mr. Justice Story said:

'Courts of admiralty are not, by their constitution and jurisdiction, confined to the mere dry and positive rules of the common law. But they act upon the enlarged and liberal jurisprudence of courts of equity, and, in short, so far as their powers extend, they act as courts of equity.'

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