The Young America

• Decision Date: 06 May 1887
• Citation: 30 F. 789
• Parties: THE YOUNG AMERICA. v. THE YOUNG AMERICA. INSURANCE CO. OF NORTH AMERICA PUTNAM v. SAME. GLADWISH and others v. SAME. HORRE v. SAME. COMMUNIPAW COAL CO. v. SAME.
• Court: U.S. District Court — Southern District of New York

30 F. 789

THE YOUNG AMERICA.

PUTNAM v. THE YOUNG AMERICA. INSURANCE CO. OF NORTH AMERICA v. SAME. GLADWISH and others v. SAME. HORRE v. SAME. COMMUNIPAW COAL CO. v. SAME.

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

May 6, 1887

James K. Hill, Wing & Shoudy, for Putnam and others.

Butler Stillman & Hubbard, for Insurance Co.

Alexander & Ash, for Gladwish and others.

Marsh Wilson & Wallis, for Communipaw Coal Co.

BROWN J.

Upon the exceptions to the commissioner's report, two general questions are presented-- First, whether the material-men acquired any lien for the supplies furnished after the vessel was arrested; and, if so, second, whether either of them is entitled to priority over the previous lien for negligent towage. Horre's claim presents a further question whether a prior lien for supplies is outranked by a later lien for damage done in towing.

1. When a vessel is arrested in admiralty, under process of the court, the law requires that she be kept safely by the marshal for the benefit of the parties to the cause, and of all others who may be interested in her. It has been often held, accordingly, that the marshal has no authority to create or to permit charges upon the property beyond such as are necessary for its due care and preservation; and no claims arising while the vessel is in the custody of the court are recognized as liens strictly, though they may be paid out of the remnants. The Sultana, 1 Brown, adm. 35; The Aline, 1 W.Rob. 112; The Phebe, 1 Ware, 354, 360; The Grapeshot, 22 F. 123, 125; Merritt v. Merchandise, 30 F. 195; The San Jacinto, id. 266.

This rule rests in part upon necessity, to prevent the loss of a party's rights during the litigation. The Witch Queen, 3 Sawy. 17. So far as respects the parties to the cause, the benefits of the rule may be waived; and the rule cannot properly be applied at all where, by direction of the parties, the arrest of the vessel is formal only, and is not designed to be followed by any actual possession of the marshal.

The evidence shows that in this case nothing more than a formal arrest of the vessel upon the original libel was desired; and that, by direction of the libelant's proctor, the vessel was allowed by the marshal to pursue her ordinary business as before; and that she did so, without interruption, for about five months after her first nominal arrest, on the tenth of January; that during this time there was no keeper on board, and no notice of attachment posted upon her masts; nor was there any publication of process until the latter part of May. In effect, the vessel was not in the custody of the court at all.

However kindly or economic the reasons that led to this arrangement, it involved an entire departure from the ordinary practice of the court. Such a departure must infallibly lead to entangling complications, in which either the interests of the parties to the litigation, or the interests of other persons dealing with the vessel, or suffering from her torts, must be sacrificed. It is liable to lead also to conflicts of jurisdiction. The formal seizure was, doubtless, sufficient for the jurisdiction of this court; because the arrest was lawful, and the vessel was, for the moment, in the custody and under the control of the marshal. The subsequent delivery of the vessel to the owner, though without security, did not defeat the jurisdiction of this court, nor the further continuance of the action; because clearly not made with any intent of abandoning the lien, or the right to take possession in pursuance of the original arrest at any moment afterwards. The Rio Grande, 23 Wall. 458, 465; Jennings v. Carson, 4 Cranch, 2; The Brig Ann, 9 Cranch, 289, 291. But it is, at least, a serious question whether other courts could not have maintained jurisdiction over the res by a seizure under execution or attachment while she was thus voluntarily suffered to run, as in the present case. In Taylor v. Carryl, 20 How. 583, 593, 599, 600, it was the actual and continuous possession and control by the sheriff or marshal of the one jurisdiction that was held to be the essential element that excluded the jurisdiction of the other from attaching; and, in the present case, such continuous possession and control were lacking. See Miller v. U.S., 11 Wall. 268, 294.

A practice so objectionable can receive no countenance or support. The rule excluding subsequent liens cannot be extended to vessels that are not actually, as well as constructively, in the marshal's possession. Where a plaintiff, as in this case, obtains only a nominal arrest of a vessel, and virtually directs that she be left to pursue her ordinary business, with its attendant liabilities to other persons, in contract or in tort, he must be held to have waived the benefit of the custody of the court as a protection against other liens, and to be estopped from claiming, as against third persons, the exemptions that belong only to a vessel in actual custody. Otherwise, not only would third persons be misled and deceived, but ready means would be offered of running vessels without liability to any further liens at all. Such a practice would be a plain abuse of the process of the court. For these reasons I must hold the claims of the material-men to be liens on the tug.

2. Priority. As there was no continuous possession by the marshal, nor any publication of the summons, as required by the rules in admiralty, until the latter part of May, there was no notice of the suit, actual or constructive, to those who dealt with the vessel in the meantime without express notice. As respects such persons giving credit to the ship in her ordinary business, the libelant Putnam can stand in no better situation, as regards priority of lien, than if he had not commenced any suit at all. The question of priority must then be determined according to the ordinary rules applicable to similar liens; treating the suit of Putnam in this case as dating, so far as affects the other lienors, at the time when express notice of it was brought home to them.

The general rule is that liens, in order to retain their priority, must be enforced with reasonable diligence, having reference to all the circumstances of the case. In The J. W. Tucker, 20 F. 129, 133, it is said:

'As maritime liens are secret incumbrances, and tend to mislead those who subsequently trust to the ship, unless they are enforced with diligence, according to the circumstances and the existing opportunities for enforcing them, they will be deemed either abandoned through laches, as against subsequent lienors or incumbrancers, or postponed to the claims of the latter, as circumstances may require. There is no fixed rule applicable to all cases determining what shall be deemed a reasonable time, or what shall be considered laches in enforcing such liens. In ordinary ocean voyages, the preference allowed, even to bottomry, will be lost after a subsequent voyage, if reasonable opportunity previously existed for the arrest of the ship. Blaine v. The Carter, 4 Cranch, 332; The Royal Arch, Swab. 269-284; The Rapid Transit, 11 F. 322, 334. Betts, J., held that the same rule should be applied to ordinary liens for supplies. The Utility, Blatchf. & H. 218, 225; The Boston, Id. 309, 327.'

In nearly all the maritime codes the privileges guarantied by law, if not enforced before the departure of the vessel upon another voyage, are postponed to the liens connected with the later voyage. As the distinction by voyages could not be practically applied to water-craft plying daily about the harbor of New York without defeating the very object of maritime liens, a rule analogous to that adopted in some of the western districts was followed in the case above cited, and in The Grapeshot, 22 F. 123, 125; namely, to treat such liens acquired within a period of reasonable diligence as contemporaneous. In the case last cited, however, it was considered that the same rule of diligence might not be applicable to repairs of an extraordinary and exceptional amount, which for that reason ought to be sued for with greater diligence, as the vessel might not be able to respond for later liens. As there is no fixed time to constitute laches applicable to all circumstances, it should be determined with reference to the equitable maxim, utere tuo ut alienum non laedas,-- enforce your own rights so as not to injure others. It would be in the highest degree inequitable to permit lienors like Putnam or the insurers, in this case, who had claims far in excess of the value of the vessel, to lie still when there was daily opportunity to enforce their claims by legal proceedings, and to permit the vessel to obtain credit in daily business on her own security from innocent third persons, when the prior lienors knew, but the latter lienors did not know, that the vessel could never be made to respond for a dollar of the credits thus obtained. The rule of justice and equity in such a case clearly demands that a comparatively brief period of inactivity, where there was full opportunity for attaching the vessel, should be held to constitute laches sufficient to postpone the prior lien in favor of subsequent lienors, who were thus prejudiced by the delay, and by the want of notice.

In the case of The Frank G. Fowler, 21 Blatchf. 410, 17 F. 653, where there was a difference of 19 days only between the time of the accruing of the two liens for negligence in towage, and the tug laid up each night in New Jersey, and only touched at the city of New York at night to report the work done, and there was also necessary delay in ascertaining the first lienor's damage, it was held that this delay of 19 days was not laches which should postpone the first lien to the second.

In the present case there...