1.
The Grapeshot,
9 Wall. 129, affirmed a third and a fourth time as to the second
point adjudged by it, the point relating to admiralty liens.
The Lulu, supra, p.
77 U. S. 192, also
affirmed.
2. It is no objection to the assertion in the admiralty of a
maritime lien against a vessel for necessary repairs and supplies
to her in a foreign port that the owner was there and gave
directions in person for them, the same having been made expressly
on the credit of the vessel.
The Guy, 9
Wall. 758, affirmed.
3. Nor that the libellant have brought a common law action for
the value of the repairs and supplies, the action not being yet
determined.
Page 77 U. S. 205
Morgan, of New York, owning the steamer
Kalorama,
belonging to that port, and Comstock of the same place, owning the
Custer, belonging to the port of Georgetown, D.C., agreed
with one Pendergast, of Baltimore, Md., who was disposed to
purchase both steamers, that he should run them for two trips
between Baltimore and Charleston, and if after this trial he liked
the vessels, that he might purchase them. For the two voyages
Pendergast was to charge 10 percent commission on the gross
freights of the vessels, and to disburse the steamers, and to have
all freights and disbursements insured for the benefit of the
owners, and in case the vessels were not satisfactory after a trial
of two trips, Pendergast was to retain them in the Southern trade
on the same terms. Pendergast accordingly took the two vessels to
make the trips, and the owners of them respectively being at the
time in Baltimore, he with their consent changed the master, and
selected some of the crew. After the two trial trips, he elected
not to make the purchase, and subsequently refused to disburse the
vessels on the credit of the owners.
While in the port of Baltimore, the steamers needed repairs and
supplies to enable them to make their trips to Charleston. The
masters of neither vessel had funds which they could apply to the
purpose, nor could either procure any on the credit of the
respective owners. Pendergast therefore made repairs and furnished
supplies to both, all of the repairs being made and the supplies
furnished at the request of the masters in the absence of the
owners, or at the request of the owners themselves when present in
Baltimore, as they frequently were on the arrivals of the steamers
in that port; and as the court considered that it was in every case
"quite clear" "with the express understanding that the repairs were
so made and furnished on the credit of the steamer." [
Footnote 1] Part of the supplies and repairs
were made during the two trips made under the agreement and part
during two afterwards, but part of the bills had been paid before
any libel was filed, and payments were made afterwards also. For
the value of the repairs and supplies unpaid for, Pendergast
Page 77 U. S. 206
brought a common law suit against the owners in one of the state
courts of Baltimore, and while that suit was pending and undecided
filed a libel for the same repairs and advances on the admiralty
side of the district court at Baltimore.
The district court decreed in favor of the libellants, the
amount allowed by it being for a less sum than had been disbursed
by Pendergast after the first two trips had been made. The circuit
court, the Chief Justice holding it, reversed the decree, he
stating that he thought that a literal construction of the language
used by this Court in the cases of
The Sultana [
Footnote 2] and
The Laura
[
Footnote 3] made it his duty
as a Circuit Judge to do this, but stating it to be his opinion
also that the Supreme Court did not in those cases intend to
establish the law which the language used in the opinions in those
cases seemed to announce, and that, considered in connection with
the facts of the cases in which it was used, the language was
susceptible of a different interpretation, and that this, the
Supreme Court, in
The Grapeshot and
The Guy which
had been argued and were then pending before it, and which
involved, as he considered, the same points, might give to it an
interpretation, as he himself as a judge of this Court might feel
at liberty to do, which would necessitate the reversal of his own
decrees and the affirmance of those of the district court.
It was in these circumstances that the appeals came before this
Court.
Page 77 U. S. 208
MR. JUSTICE CLIFFORD delivered an opinion of the court in each
of the cases, thus:
I
. IN
THE KALORAMA
Advances for repairs and supplies to the steamer named in the
pleadings were made by the libellants to an amount much larger than
the sum claimed in the libel, and allowed in the decree of the
district court.
Payments made before the suit was instituted were deducted from
the claim as set forth in the libel, and it was ordered, adjudged,
and decreed by the district court that there was due to the
libellants at the date of the decree the sum of five thousand one
hundred and thirty-two dollars and thirty-six cents as a lien upon
the steamer for which the stipulators for value were liable.
Process was duly served in the district court, and the owner of
the steamer appeared as claimant and filed an answer setting up
several defenses, as follows:
(1) That the repairs and supplies
Page 77 U. S. 209
were not necessary, as alleged in the libel.
(2) That they were not made and furnished on the credit of the
steamer.
(3) That the steamer is not chargeable with the moneys advanced
for the repairs and supplies described in the libel, as they were
not made and furnished under a maritime contract.
(4) That the libellants brought a common law suit for the same
cause of action before the libel was filed, and that the same is
still pending and undecided.
None of these defenses calls in question the correctness of the
charges in the account, and no motion was made to refer the cause
to an assessor to report the amount of the expenditure nor was any
exception taken to the finding of the district court in that
behalf.
Appeal was taken by the owner and claimant of the steamer from
the decree of the district court to the circuit court, where the
decree of the district court was reversed.
Remarks respecting the correctness or incorrectness of the
accounts exhibited in the record may well be omitted, as it is not
pretended that, in view of the evidence, there can be any well
founded doubt that the advances were made as therein set forth.
Distinct issues of law are presented in the pleadings, and the
district and circuit courts differed as widely as the parties, the
former holding that the advances were a lien upon the steamer under
the general rules of the maritime law. On the other hand, the
circuit court, in deference to certain expressions contained in the
opinions of this Court in the two cases of
Thomas v.
Osborn [
Footnote 4] and
Pratt v. Reed, [
Footnote
5] held that the advances were the mere personal debt of the
owner, that they did not constitute a lien upon the steamer, and
accordingly dismissed the libel, which was a libel
in rem
against the steamer setting up a maritime lien. Whereupon the
libellants appealed to this Court, and now seek to reverse that
decree.
Before examining the special defense set up by the respondent
growing out of the contract of the libellants to employ the steamer
in two or more trips between Baltimore and Charleston, it becomes
necessary to define with some precision what is meant by a maritime
lien as affording a security for such advances,
Page 77 U. S. 210
and under what circumstances it arises where repairs are made or
supplies are furnished to a vessel engaged in commerce and
navigation.
In considering that question, it will be sufficient to state
that the owner of the steamer throughout that period was a resident
of the City of New York, and that the port of New York was the home
port of the steamer, as conceded by both parties. Proof
satisfactory to both courts was introduced showing that the steamer
needed the repairs and supplies when the advances were made by the
libellants, and that they were made while the steamer was lying in
the port of Baltimore, where the libellants resided, to enable the
steamer to continue her regular trips as contemplated by her owner;
that her master had no funds which he could apply to that purpose,
nor could he procure any on the credit of the owner, and that all
of the advances were made at the request of the master, in the
absence of the owner, or by the owner in person when he was
present.
Contracts or claims for service or damage purely maritime and
touching rights and duties appertaining to commerce and navigation
are cognizable in the admiralty. Wherever a maritime lien arises in
such a contract or claim, as in controversies respecting repairs
made or supplies furnished to a ship or in case of collision, the
injured party may pursue his remedy, whether it be for a breach of
a maritime contract or for a marine tort, by a suit
in rem
against the vessel or by a suit
in personam, at his
election, against the owner, or against the master and owner in
cases where they are jointly liable for the alleged default.
[
Footnote 6]
By the civil law, a lien upon the ship is given, without any
express contract, to those who repair the vessel or furnish her
with necessary supplies, whether the vessel was at her home port or
abroad, when the repairs and supplies were made and furnished.
[
Footnote 7]
But the only lien which the common law recognizes in such cases
independent of statutory regulations is the possessory lien, which
arises out of and is dependent upon the possession of the ship, as
in cases where goods are delivered to an artisan
Page 77 U. S. 211
or tradesman to be repaired or manufactured. Such a lien, as
understood at common law, did not attach unless the ship was in the
possession of the person who set up the claim, and the extent of
the privilege which it conferred was that he might retain the ship
in his possession until he was paid the money due him for the
repairs made and the supplies furnished. Until paid, he might
refuse to surrender the ship, but if he relinquished the possession
of the ship, his lien was displaced and extinguished. [
Footnote 8]
In jurisdictions where the rules of the common law prevail, the
shipwright who works upon the ship without taking possession of it,
or if he parts with the possession before collecting what is due
for his services, is not deemed to be a privileged creditor, nor is
the merchant so considered who furnishes the ship with necessary
supplies unless the ship is placed within his control. [
Footnote 9]
Important alterations have recently been made in those rules of
decision by acts of Parliament, but it is not necessary to pursue
that inquiry, as those rules were never regarded as rules of
decision in the admiralty courts of this country exercising
jurisdiction under the present Constitution and the laws of
Congress. On the contrary, some of the federal courts, immediately
after their organization under the Judiciary Act, decided that
repairs made and supplies furnished to a ship, if made and
furnished on the credit of the ship, were a lien upon the ship
whether she was at the time in her home port or in a foreign port.
Other district judges were of the opinion that a maritime lien did
not arise if the repairs were made and the supplies were furnished
in the home port of the vessel, and some uncertainty for a time
prevailed upon the subject until the same was examined by this
Court, when the question was put at rest. [
Footnote 10]
Such a lien is a privilege in the thing, and is not dependent
upon possession or registry, nor is it displaced, as in a contract
of affreightment, when possession is relinquished unless the
circumstances are such as to show that it was waived; nor is it
Page 77 U. S. 212
lost by delay, unless for such a time as to show gross laches,
and to afford a reasonable presumption that it was abandoned.
[
Footnote 11]
Where repairs had been made and supplies furnished to a foreign
ship, or to a ship in a port of the state to which she does not
belong, the general maritime law, said Judge Story following the
civil law, gives the party a lien on the ship itself for security,
and he may well maintain a suit
in rem in the admiralty to
enforce his right.
Many of the rules of the general maritime law are doubtless
drawn from the civil law; but it is not quite correct to say that
the maritime law of the United States, as laid down in that case,
follows the civil law in respect to the lien conceded to the
shipwright and tradesman who make repairs and furnish supplies to
ships engaged in commerce and navigation, as the civil law extends
that privilege to such repairers and furnishers without any such
distinction between domestic and foreign vessels, as that which is
constantly maintained in the decisions of this Court. [
Footnote 12]
Ports of states other than those where the vessel belongs are
for that purpose considered as foreign ports, and of course the
port where the steamer in this case was lying when the repairs were
made and the supplies were furnished must be regarded, as between
the parties in this controversy, as a foreign port. [
Footnote 13]
Controversies respecting such liens usually arise in cases where
the repairs or supplies were ordered by the master without any
express directions from the owner, and in such cases the repairer
or furnisher must prove affirmatively that the ship needed such
repairs and supplies, as the authority of the master in such a case
is implied from the necessity for the repairs or supplies, the want
of funds for that purpose, the inability to procure the same, and
the absence of the owner.
Where it appears that the repairs and supplies were necessary to
preserve the ship in port, or to enable her to proceed on her
voyage, and that they were made and furnished in good faith, the
presumption is that the ship, as well as the master and owner, is
responsible to those who made the necessary advances,
Page 77 U. S. 213
and it is clear that the necessity for credit must be presumed
where it appears that the repairs and supplies were ordered by the
master, and that they were necessary for the ship, unless it is
shown that the master had funds or that the owner had sufficient
credit, and that the repairers, furnishers, and lenders of the
money knew those facts or one of them, or that such facts and
circumstances were known to them as were sufficient to put them
upon inquiry and to show that if they had used due diligence they
would have ascertained that the master was not authorized to obtain
any such relief on the credit of the vessel.
Subject to those conditions, the master, in the absence of the
owner, is vested with the authority to order necessary repairs and
supplies, but it is no objection to his authority that he acted on
the occasion under the express instructions of the owner, nor will
the lien of those who made the repairs and furnished the supplies
be defeated by the fact that his authority emanated from the owner
instead of being implied by law.
When the owner is present, the implied authority of the master
for that purpose ceases, but if the owner gives directions to that
effect, the master may still order necessary repairs and supplies,
and if the ship is at the time in a foreign port or in the port of
a state other than that of the state to which she belongs, those
who make the advances will have a maritime lien if they were made
on the credit of the vessel.
Grant all these several propositions, still it is contended by
the respondent that no such lien arises in this case because, as he
insists, the repairs were made and supplies furnished in pursuance
of a contract with the owner by which the appellants assumed the
entire charge of the steamer for a series of trips and were to
receive the specified compensation of ten percent commission on the
gross freights.
Doubtless some of the repairs and supplies were ordered by the
owner, and the respondent contends that the appellants, by virtue
of the arrangement, became the agents of the owner, and that it was
in that capacity that they freighted the steamer and paid the
expenses of the repairs and supplies, without any other lien upon
the steamer than that given by the common law.
Strong doubts are entertained whether the written agreement,
even if it had continued in force without alteration, and if the
advances in question had been made under it, would support
Page 77 U. S. 214
the theory set up by the respondent, but it is not absolutely
necessary to decide that point, as it is quite clear that the
repairs were made and supplies furnished in every case either by
the order of the master or the owner and with the express
understanding that they were so made and furnished on the credit of
the steamer.
They employed the steamer in the first place under the written
agreement of the fourteenth of March, 1866, for two trips between
Baltimore and Charleston, and it was agreed that they were to
receive ten percent commissions on the gross freights and that they
should disburse the steamer, but they also stipulated to have the
freights and disbursements insured for the benefit of the owner,
which shows to a demonstration that they were not owners for the
voyage. Suggestion is made that they changed the master and
selected some of the crew, but the evidence shows that all those
acts were performed by the consent of the owner and subject to his
approval. Much the larger portion of the advances was paid before
the libel was filed, and additional payments have since been
made.
Viewed, as the state of the case was, at the date of the decree
entered in the district court, it is not doubted that an amount
much greater than the amount allowed in that decree had been
disbursed by the libellants for repairs and supplies to the steamer
subsequent to the two trips made under the written agreement.
Suppose the libellants had no lien for the disbursements made under
that agreement, which is not admitted, still it is fully proved
that the appellants, subsequent to the two trips, refused to make
further advances on the credit of the owner, and that the owner
expressly requested that the advances should be made on the credit
of the steamer.
Implied liens, it is said, can be created only by the master,
but if it is meant by that proposition that the owner, or owners,
if more than one, cannot order repairs and supplies on the credit
of the vessel, the Court cannot assent to the proposition, as the
practice is constantly otherwise.
Undoubtedly the presence of the owner defeats the implied
authority of the master, but the presence of the owner would not
destroy such credit as is necessary to furnish food to the mariners
and save the vessel and cargo from the perils of the seas.
[
Footnote 14]
Page 77 U. S. 215
More stringent rules apply as between one part-owner and
another, but the case is free from all difficulty if all the owners
are present and the advances are made at their request or by their
directions and under an agreement, express or implied, that the
same are made on the credit of the vessel. Were it not so, mariners
would refuse to ship for distant ports if the owner was to remain
with the ship, either as supercargo or passenger, unless it was
known that he had credit everywhere, as in case the ship should
become disabled and need repairs and provisions the most reliable
means of relief would be withdrawn, and it is not difficult to
imagine a case where life and property might be lost because the
owner was on board and without personal credit.
Decree of the circuit court reversed and the cause remanded
with directions to enter a decree affirming the decree of the
district court.
II
. IN
THE CUSTER
Jurisdiction, it is conceded, is vested in the district courts
by the ninth section of the Judiciary Act to enforce maritime liens
by a suit
in rem in all cases where such liens arise,
whether the libel is for the breach of a maritime contract or to
recover damages for a marine tort.
Repairs were made and supplies furnished by the appellants to
the steamer named in the pleadings, and, the owners of the steamer
refusing to pay for the same, the appellants filed their libel in
the District Court for the District of Maryland and caused the
steamer to be arrested, claiming that the repairs and the supplies
were a lien upon the steamer. Appearance was entered by the owners
of the steamer as claimants of the same, and they filed an answer
setting up the same defenses as those pleaded by the owner of the
steamer in the suit just decided. Testimony was taken by both
parties in the two suits, as exhibited in the transcript of the
other suit, and the parties entered into a stipulation that
reference might be made in the trial of this suit to the
depositions printed in the other, and that both should be heard at
the same time.
Two principal questions, it seems, were discussed in the
district court. (1) Whether the evidence showed that the credit
Page 77 U. S. 216
for the repairs and supplies was or was not given to the steamer
under the rules of the maritime law as understood and administered
in the federal courts. (2) Whether the repairs made and the
supplies furnished, in view of the circumstances, became a lien
upon the steamer. Both of those questions were answered by the
district judge in the affirmative, and the court entered a decree
for the libellants in the sum of six thousand four hundred and
ninety-six dollars and sixty-three cents against the owners of the
steamer and the stipulators for value. Appeal was taken by the
respondents to the circuit court, where the decree of the district
court was reversed upon the ground that the evidence in the
transcript, if tested by the rules laid down in
Thomas v.
Osborn [
Footnote 15]
and in the case of
Pratt v. Reed [
Footnote 16] does not show the existence of any
such lien.
Since that ruling was made, the whole subject has been very
fully reconsidered by this Court in the case of
The
Grapeshot, [
Footnote
17] in which the opinion was given by THE CHIEF JUSTICE. Viewed
in the light of that decision and of the opinion of the Court in
the case of
The Lulu, [
Footnote 18] lately delivered, as the case must be, it is
clear that further discussion of the same is unnecessary, as it is
conclusively settled that
"where proof is made of necessity for the repairs and supplies
or for funds raised to pay for the same and of credit given to the
ship, a presumption will arise, conclusive in the absence of
evidence to the contrary, of necessity for credit,"
or, in other words, the necessity for credit must be presumed
where it appears that the repairs and supplies were necessary
unless it is shown that the master had funds, or that the owner had
sufficient credit, and that the person or persons making the
advances knew those facts or one of them or that such facts and
circumstances were known to them as were sufficient to put them
upon inquiry, and to show that if they had used due diligence in
that behalf, they would have ascertained that the master was not
authorized to obtain any such relief on the credit of the
steamer.
Suppose that defense cannot be sustained, still the respondents
insist that the steamer is not liable for the advances made by the
appellants because the decree, as they contend, falls within
Page 77 U. S. 217
the rule laid down in the case of
Minturn v. Maynard,
[
Footnote 19] where it was
held that a libel
in personam could not be maintained to
recover a balance of account consisting of moneys paid, laid out,
and expended for the respondents in payment for repairs and
supplies to a steamer owned by the debtors, together with charges
for commissions and for advertising the steamer.
Examples might easily be given where a party may sue in the
admiralty or in the common law courts at his election, but it is
unnecessary to express any doubts as to the correctness of the rule
laid down in that case, as it is clear that it does not control the
case before the Court even if the rule be admitted to be correct
without any qualification. [
Footnote 20]
Undoubtedly the appellants took charge of the steamer for two
trial trips between Baltimore and Charleston, and by the terms of
the written agreement entered into at that time they were to
receive for the services rendered in those trips a commission of
ten percent on the gross freights of the steamer, but they also
stipulated to disburse the steamer, and to insure the freights and
disbursements for the benefit of the owners. They took the steamer
on trial for those two trips with a view to purchase her in case
they were "satisfied with the vessel," but they elected not to make
the purchase, and subsequently refused to disburse the steamer on
the credit of the owners. Uncontradicted as the evidence is upon
this point, it does not seem necessary to reproduce it, especially
as it is all one way.
Objection is also made that the advances cannot be held to be a
lien upon the steamer, because some of the repairs and supplies
were ordered by the owners in person, but the objection is entitled
to no weight, as the evidence shows that it was expressly agreed
that the advances should be furnished on the credit of the steamer.
[
Footnote 21]
Payments have been made by the respondents since the decree was
entered in the district court, but the Court here is not asked to
revise the finding of the district court as to the amount, nor to
deduct the payments since made, as those matters will be adjusted
under the stipulations executed between the parties.
Suggestion is also made that the lien was waived by the
commencement of an action for the advances in the state court, but
the record shows that the action is still pending, and it is well
settled law that the pendency of such an action is no bar to a suit
in a federal court. [
Footnote
22]
Had the judgment been rendered, it might be different, but it is
clear that the rule "transit
in rem judicatam" cannot
apply during the pendency of the action. [
Footnote 23]
All sums collected in that proceeding have been duly credited in
this case, and it is fully proved that the whole amount included in
the decree of the district court was properly cognizable in the
admiralty.
Decree of the circuit court is reversed and the cause
remanded with directions to enter a decree affirming the decree of
the district court.
[
Footnote 1]
See opinion of the Court,
infra, p.
77 U. S.
214.
[
Footnote 2]
Thomas v. Osborn.
[
Footnote 3]
Pratt v. Reed.
[
Footnote 4]
60 U. S. 19 How.
22.
[
Footnote 5]
60 U. S. 19 How.
359.
[
Footnote 6]
The
Belfast, 7 Wall. 642.
[
Footnote 7]
Dig. 14, 1, 1; 1 Valin, Commentary 363; 3 Kent 168; Williams
& Bruce, Admiralty Practice 155.
[
Footnote 8]
Westerdell v. Dale, 7 Term 312;
Justin v.
Ballam, 4 Salkeld 34;
Watkinson v. Bernadiston, 2
Peere Williams 367; 3 Kent 169; Maude & Pollock on Shipping 64;
The Zodiac, 1 Haggard's Admiralty 320;
Spartali v.
Benecke, 10 C.B. 223.
[
Footnote 9]
McLachlan or Shipping 101;
Doddington v. Hallet, 1
Vesey 497.
[
Footnote 10]
The General
Smith, 4 Wheat. 443.
[
Footnote 11]
Paragon, Ware 322; Young Mechanic,
id. 535, second
edition,
S.C.; 2 Curtis 404.
[
Footnote 12]
2 Parsons on Shipping 312;
The Marion, 1 Story 68;
The Chusan, 2
id. 455;
St. Jago
de Cuba, 9 Wheat. 409.
[
Footnote 13]
The Grapeshot,
9 Wall. 129.
[
Footnote 14]
The Guy, 9
Wall. 758.
[
Footnote 15]
60 U. S. 19 How.
22.
[
Footnote 16]
60 U. S. 19
How. 360.
[
Footnote 17]
76 U. S. 9
Wall. 137.
[
Footnote 18]
Supra, p.
77 U. S. 192.
[
Footnote 19]
58 U. S. 17
How. 477.
[
Footnote 20]
The
Belfast, 7 Wall. 644;
Davis v. Child,
Davies 71;
The
Grapeshot, 9 Wall. 141;
Merritt v. Brewer,
14 Law Rep 452.
[
Footnote 21]
The
Grapeshot, 9 Wall. 141;
The
Guy, 9 Wall. 758;
S.C. 1 Benedict 112;
The Lulu, supra, 77 U. S. 192.
[
Footnote 22]
Loring v. Marsh, 2 Clifford 320;
Wadleigh v.
Veazie, 3 Sumner 165;
White v. Whitman, 1 Curtiss
494;
Lyman v. Brown, 2
id. 559;
The Paul
Boggs, 1 Sprague 369;
The Highlander, 1
id.
510.
[
Footnote 23]
Murray v. Lovejoy, 2 Clifford 197;
S.C. 3
70 U. S. 16.