Detroit Trust Co. v. The Thomas Barlum - 293 U.S. 21 (1934)
U.S. Supreme Court
Detroit Trust Co. v. The Thomas Barlum, 293 U.S. 21 (1934)
Detroit Trust Co. v. The Thomas Barlum
Argued October 12, 1934
Decided November 5, 1934
293 U.S. 21
1. A court of admiralty has no jurisdiction of a suit to foreclose a mortgage on a ship in the absence of an Act of Congress conferring such jurisdiction. P. 293 U. S. 32.
2. "Preferred mortgages" of ships under the Ship Mortgage Act of 1920 include deeds of trust securing bonds sold to the public, and, under that statute, are foreclosable exclusively in admiralty, with priority of lien as therein prescribed, if indorsement upon ship's documents, recording, and other conditions expressed in the statute have been fulfilled. P. 293 U. S. 32.
3. The status of "preferred mortgages" does not depend upon application of the borrowed money to maritime use. This condition is not expressed in the Act, and cannot be implied. P. 293 U. S. 37.
So held in view of the minute and explicit provisions of the Act; its legislative history, showing that the objective was to foster our merchant marine by making ship mortgages, including deeds of trust securing bonds, safe and attractive to investors, and the importance to this purpose of having the jurisdiction to foreclose in admiralty exclusively or in state courts exclusively determinable by precise statutory conditions, rather than by extrinsic criteria raising a host of questions as to the application of the proceeds of loans.
4. Congress, under Art. III, § 2, and Art. I, § 8, par. 18 of the Constitution, has paramount power to determine the maritime law which shall prevail throughout the country, but, in so doing, it is necessarily restricted to the sphere of the admiralty and maritime jurisdiction, the boundaries of which are determined by the exercise of the judicial power. P. 293 U. S. 42.
5. In order to promote investment in shipping securities and thus to advance the maritime interests of the United States, Congress has power, by amendment of the maritime law, to regulate the priorities of mortgage and other liens on ships and to provide jurisdiction in admiralty for the enforcement of such mortgages. Bogart v. The John Jay, 17 How. 399, considered. P. 293 U. S. 48.
6. There is no ground for denying this power when the proceeds of the mortgage are used for other purposes than the direct benefit of the vessel. P. 293 U. S. 50.
68 F.2d 946 reversed.
Certiorari, 292 U.S. 619, to review the reversal, for want of jurisdiction, of two decrees entered by the District Court, 56 F.2d 455, 2 F.Supp. 733, for the foreclosure of mortgages on two ships.