The St. Paul

• Decision Date: 10 January 1921
• Citation: 277 F. 99
• Parties: THE ST. PAUL.
• Court: U.S. District Court — Southern District of New York

277 F. 99

THE ST. PAUL.

United States District Court, S.D. New York.

January 10, 1921

George H. Mitchell, of New York City, for repair libelant Hamilton-Beers Corporation.

Alexander & Ash, of New York City (Mark Ash, of New York City, of counsel), for repair libelants Sullivan and Baird.

Harrington Bigham & Englar, of New York City (T. Catesby Jones, of New York City, of counsel), for cargo libelants.

MAYER District Judge.

The essential facts are well set forth in the report of the commissioner noted in the margin. ^[1] The questions here involved may be divided under two heads: (1) What liens attached to the vessel; and (2) the priority of the liens. Certain claims, such as those for the wages of seamen and for salvage, are not in controversy and have been disposed of. Claims for repairs, supplies, and services to the vessel aggregate apparently $25,489.49, and these claims are, without question, entitled to a lien. The sole question in respect of these claims is their position in the marshaling

The damages of the cargo libelants include physical damage to the cargo by fire and water, and each shipment's proportionate share of discharging expenses aggregate $143,210.65. So far as concerns the physical damage to cargo, the question is whether there is any lien, and, if so, the rank to which such lien is entitled. The commissioner has reported that the cargo libelants are entitled to a lien on a parity with the repair and supply liens in respect of prepaid ocean freight, ocean insurance, cost of loading, and the estimated cost of discharging shipments in sound condition, and possibly other items which are the proximate result of furnishing an unseaworthy vessel. As might be expected, the fund in hand is insufficient to pay all claims.

1. The libels for the cargo owners were concededly brought on the contracts made by the bills of lading with the exception of two (Nicholson File Company and Microutsicos Bros.), the form of which was in tort; the bills of lading being treated as receipts only. This court (per Judge Augustus N. Hand) denied a motion for leave to amend the libels which set forth causes of action in contract to causes of action in tort, and the court must, on this hearing, accept that disposition as the law of this case. For reasons, however, which will appear infra, this ruling is immaterial, because the cargo rights spring ex contractu, and the fire which damaged the goods becomes immaterial as matter of law.

The commissioner has found that there was a breach of the implied warranty of seaworthiness, and with that conclusion I fully agree, for the reasons stated by the commissioner, except that I am not so confident, as he is, that Morse and associates had ground to believe that the necessary license would be obtained. The commissioner, however, has found that there was no deviation from the voyage.

The question brings up at once a discussion of the lien of the cargo. From the earliest times it has been established in the maritime law that a ship is bound to her cargo, and the cargo to the ship, and that the ship and cargo are so bound, and the lien attaches when the cargo is loaded on the vessel. See the interesting review in Judge Hough's opinion in The Saturnus, 250 F. 407; The Schooner Freeman. etc., v. Buckingham et al., 18 How. 182, 15 L.Ed. 341; Dupont de Nemours & Co. v. Vance et al., 19 How. 162, 15 L.Ed. 584; The Eddy, 5 Wall. 481, 18 L.Ed. 486; The Lady Franklin, 8 Wall. 325, 19 L.Ed. 455; The Keokuk, 9 Wall. 517, 19 L.Ed. 744.

'Undoubtedly, the owner of the cargo has a lien by the maritime law, upon the ship for the safe custody, due transport, and right delivery of the same, as much as the shipowner has upon the cargo for the freight, as expressed in the maxim, 'Le batel est oblige a la merchandise et la merchandise au batel.' Subject to the exception that the lien of the shipowner may be displaced by an unconditional delivery of the goods before the consignee is required to pay the freight, or by an inconsistent and irreconcilable provision in the charter party or bill of lading, the rule is universal as understood in the decisions of the federal courts, that the ship is bound to the merchandise and the merchandise to the ship for the performance on the part of the shipper and shipowner of their respective contracts. Shipowners contract for the safe custody, due transport, and right delivery of the cargo, and for the performance of their contract the ship, her apparel and furniture, are pledged in each particular case, and the shipper, consignee, or owner of the cargo, contracts to pay the freight and charges, and to the fulfillment of their contract the cargo is pledged to the ship, and those obligations are reciprocal, and the maritime law creates reciprocal liens for their enforcement. * * * Such a lien is regarded as being in effect an element of the original contract. * * * Courts of justice, and text-writers, everywhere concede that the ship, under the maritime law, is bound to the merchandise and the merchandise to the ship, independent of any local usage or statute. * * * ' The Maggie Hammond, 9 Wall. 435, 19 L.Ed. 772.

From the moment, therefore, that the cargo was aboard the St. Paul, the lien attached. It is argued, however, that this lien was 'inchoate,' in the meaning of not being perfected, because of the use of that expression in The John G. Stevens, 170 U.S. 113, 115, 18 Sup.Ct. 544, 42 L.Ed. 969. It is 'inchoate' only in the sense of enforceability. In other words, the lien is discharged, ipso facto, when the ship performs its duty to the cargo. If it does not, then the enforcement 'relates back to the period when it first attached'; for the lien is born and exists, until discharged, from the moment the cargo is aboard. When, therefore, the marshal seized the vessel under process, the lien still existed, and nothing which he did or might do could destroy the lien.

If it be assumed that an owner, complying with the Harter Act, is not to be held 'responsible for damage or loss resulting from * * * seizure under legal process,' that is not this case. The third section of the act (Comp. St. Sec. 8031) provides:

'If the owner of any vessel transporting merchandise * * * shall exercise due diligence to make the said vessel in all respects seaworthy and properly manned, equipped and supplied, neither the vessel, her owner or owners, agent or charterers shall become or be held responsible for damage or loss resulting from * * * seizure under legal process.'

The testimony shows that the owner did not exercise due diligence to make the vessel 'in all respects seaworthy.' The burden of proving compliance with the statute has not been sustained by the owner, and, indeed, the contrary is affirmatively shown. The mere fact that the ship perhaps was to receive some 'cases of milk' (Seaborne, p. 4), and that, perhaps, some 'cargo was left on the pier' (Barker, p. 26), does not change the situation. Neither before nor after the cargo of these libelants was loaded on the ship, did she have a license, and she never had any prospect of getting one.

She was unseaworthy at all times, and therefore the protection which is afforded to shipowners under the act, supra, cannot be invoked. The reason is plain. Just, and often unjust, claims may place the vessel in custodia legis. Where an owner has performed his duty, Congress, no doubt, realized that damage or loss resulting from seizure under legal process might visit great hardship upon, or perhaps ruin, such an owner. The exemptions of the act were, of course, intended to encourage shipping, and this was one of the safeguards; but at the same time Congress, no doubt, appreciated that, when the vessel was not seaworthy, seizure by legal process might very often be the direct result of the owner's failure, and to allow exemption in such circumstances would be to encourage, instead of discourage, violations of duty.

When, therefore, in this case, the marshal seized the vessel, it still remained the duty of the owner to carry out his contract of affreightment. This, by virtue of his own wrong, he was at no time able to do. 'It is undeniable,' as the commissioner states, 'that the shippers of the St. Paul's cargo contracted * * * that their goods should be carried to the ports of destination in the customary manner and with the customary dispatch. ' The failure by the ship to carry out this contract does not rest upon the fact that there was a fire. This unseaworthy ship by its own fault was long delayed before the fire. The Coventina (D.C.) 52 F. 156, 157.

The point, then, is that there was a deviation, and that the marshal's custody, so far as concerned delay and lack of 'customary dispatch,' did not affect the rights or lien of the cargo, because the owner had not exempted himself under the Harter Act, and he cannot now be heard to say there was no delay, and hence no deviation, because of seizure. The result of deviation is concisely stated by Carver in Carriage by Sea, Sec. 287, as follows:

'When a vessel has deviated from her proper course, the shipowner is not only liable for the delay, but he becomes absolutely responsible for any loss or damage to the goods which may occur during the deviation and which can be attributed to it. He is not protected by the exception of perils in the contract.'

See The Citta di Messina (D.C.) 169 F. 472, 475; The Indrapura (D.C.) 171 F. 929 (useful for its discussion and cases cited); The Elizabeth Dantzler (D.C.) 263 F. 596.

The case at bar does not fall with that class of cases where the broad principle is that a lien cannot arise or be created by the owner after the ship is in the custody of the law. The Esteban de Antunano (C.C.) 31 F. 920; The Augustine Kobbe (D.C.) ...