1. It is error and ground of reversal for a circuit court to
affirm a decree in admiralty of the district court and at the same
time dismiss the appeal.
2. Where claims on the proceeds in the registry of a vessel sold
are not maritime liens, the district court cannot distribute those
proceeds in payment of the claims if the owners of the vessel
oppose such distribution.
3. A creditor by judgment in a state court of the owners of the
vessel, even though he have a decree
in personam also in
the admiralty against them, cannot seize or attach on execution
proceeds of the vessel in the registry of the admiralty.
4. Where an appeal is taken to the circuit court from the decree
of the district court in a proceeding
in rem, the property
or its proceeds follows the cause into the former court.
Page 87 U. S. 202
In the year 1819, this Court, in
The General Smith,
[
Footnote 1] decided, as the
profession has generally understood, that in respect to repairs or
necessaries furnished to a ship in the port or state to which she
belongs, no lien is implied unless it is recognized by the
municipal law of the state, declaring the rule herein different
from that where the repairs or necessaries are furnished to a
foreign ship, in which case the general maritime law gives the
party a lien on the ship itself for his security.
In view of this decision, most or all of the states enacted laws
giving a lien for the protection of materialmen in such cases.
In the year 1833, in the case of
The Planter (Peyroux v.
Howard), [
Footnote 2] the
converse of the rule in
The General Smith was laid down,
and process against a vessel in her home port was used and
supported, the state law giving a lien in the case.
In 1844, this Court, acting in pursuance of acts of Congress
which authorized it to adopt rules of practice in the courts of the
United States in causes of admiralty and maritime jurisdiction
[
Footnote 3] (and adhering to
the practice declared as proper in the cases mentioned), adopted
the following Rule of Practice:
"
RULE XII"
"In all suits by materialmen for supplies, repairs, or other
necessaries for a foreign ship or for a ship in a foreign port, the
libellant may proceed against the ship and freight
in rem
or against the master and owner alone
in personam, and the
like proceeding
in rem shall apply to cases of domestic
ships, where by the local law a lien is given to materialmen for
supplies, repairs, and other necessaries."
On the 1st of May, 1859, a new twelfth rule was adopted as a
substitute for the one above given. It was thus:
Page 87 U. S. 203
"
RULE XII"
"In all suits by materialmen for supplies or repairs or other
necessaries for a foreign ship or for a ship in a foreign port, the
libellant may proceed against the ship or freight
in rem,
or against the master or owner alone
in personam, And the
like proceedings
in personam but not in rem shall apply in
cases of domestic ships for supplies, repairs, or other
necessaries."
The reasons for the substitution of this latter rule for the
former one are stated by Taney, C.J., in the case of
The
Steamer St. Lawrence, [
Footnote 4] to have been that in some cases the state laws
giving liens, and the constructions put on them by state courts,
were found not to harmonize with the principles and rules of the
maritime code, and embarrassed the federal courts in applying
them.
With the case of
The General Smith and others following
it unreversed, and with the substituted twelfth rule in force, two
sailors, on the 30th December, 1870, filed libels in the District
Court at New Orleans against the steamer
Lottawanna
claiming wages. The libel alleged that the vessel when they shipped
was in the port of New Orleans and was making voyages between that
port and various ports and places on the Red River and its
tributaries, and it was thus and inferentially to be gathered that
New Orleans was the home port of the vessel.
By consent of the owners, the vessel was subsequently sold under
an order of court, and the proceeds, $10,500, were brought into the
registry.
In the meantime, about forty different persons intervened,
claiming in the aggregate $35,000. Some were sailors, claiming
wages. That
their claims were a lien on the fund was
conceded. But the majority of the claims (in amount $32,804) were
for stores, materials for repairs, or for labor and supplies of
different sorts furnished to the vessel in the port of New Orleans,
the port which, as above said, was apparently her home port, though
the fact that it was so was
Page 87 U. S. 204
nowhere distinctly asserted, nowhere in any way denied, and
nowhere in any way proved.
Among the interveners claiming a share of the fund for supplies
furnished to the vessel in the port of New Orleans were two firms,
Wilson & Co. and Chaffee & Brother, the former claiming
$3,091 and the latter $10,896.
None of the interveners alleged in direct terms that they had
any maritime lien on the vessel or its proceeds or prayed for
process to enforce such a lien, though the libels of some of them
contained a prayer that the court would decree the payment of the
intervener's claim with privilege on the vessel or its
proceeds.
There was also a firm, Bell & Kennett, who claimed the whole
fund in the registry. This firm had had something to do with the
vessel and had sued its owners and got judgment against them in one
of the state courts of Louisiana, the Sixth District Court for the
Parish of Orleans. On this judgment they issued execution and
attached the funds in the registry of the district court. They also
had decrees
in personam against the owners in the
admiralty.
A report of a commissioner appointed by the district court to
report distribution showed, that after deducting costs of the
marshal, registrar &c.,
The net proceeds of sale in the registry were . . . . .
$9,405
That the sailors' wages (the only admitted admiralty
liens) amounted to. . . . . . . . . . . . . . . . . . 2,629
------
Leaving a balance of. . . . . . . . . . . . . . . . . .
$6,776
The question was to whom was this balance to be paid? Bell &
Kennett claimed the whole of it under their attachment in
execution.
Wilson & Co., Chaffee & Brother, and the other
interveners at New Orleans, for supplies furnished in that port,
opposed this claim, and -- asserting that, on an account justly
taken between the said Bell & Kennett and the owners of the
vessel, it would appear that the former were indebted to the
owners, and not the owners to them -- were not willing even that
Bell & Kennett should come
pari passu on the fund;
much less that they should sweep it all away.
Page 87 U. S. 205
The commissioner divided the sum ratably between all the
interveners, including with them Bell & Kennett. The owners
opposing this, he made a second report remarking that the only
admiralty liens in the case were the claims for sailors' wages
(which had now been paid), and that the claims of Wilson & Co.,
Chaffee & Brother, and the other interveners were not such
liens; that though where the owners did not oppose such
distribution, a fund in the registry might properly be distributed
to materialmen &c., claimants on it for supplies furnished to
the ship, who yet had no admiralty lien
in rem, yet that
it could not be so distributed if the owners did oppose the
distribution, this principle being settled by the cases of
The
Maitland, [
Footnote 5] and
The Neptune, [
Footnote
6] and not departed from except in the case of remnants
unclaimed by the owner. The commissioner concluded, therefore, that
nothing could be done but pay the fund either to the owners or to
the sheriff of the Parish of Orleans to answer his execution and
attaching process, and this last he recommended as the more just
disposition of the money.
Upon the case coming before the district court on exceptions to
this report, that court, December, 1871, decreed that the
interveners mentioned by the commissioner should be dismissed and
that the fund should be paid, as the commissioner had suggested, to
the sheriff to answer the process issued in the suit of Bell &
Kennett against the owners.
From this decree of the district court the interveners took the
case to the circuit court, and moved in the district court that the
money in the registry there should be transferred to the registry
of the circuit court. This motion the district court denied, and
the moneys were paid over to Bell & Kennett. In the circuit
court, objection was made, as also it had been made before, to the
regularity of the appeal on account of some matters of form. The
circuit court affirmed the judgment of the district court, but at
the same time dismissed the appeal.
Page 87 U. S. 206
From this decree Wilson & Co. and Chaffee & Brother
brought the case here by appeal; Bell & Kennett being the
appellees.
Reference has been made in the opening part of this statement of
the case, to the decision in the case of The General Smith, decided
A.D. 1819, and other cases; and to the two different twelfth rules
in admiralty.
In different cases coming here about eight years ago, [
Footnote 7]especially in
The Moses
Taylor and in
The Hine v. Trevor -- this Court
decided that the grant of admiralty jurisdiction given by the
Judiciary Act to federal courts is exclusive, that state statutes
which attempt to confer on state courts a remedy for
marine contracts or torts by proceedings strictly
in
rem, are void. And on the 6th of May, 1872,
after the
present suit was brought, the twelfth rule of 1859, itself an
amendment of the rule of 1844, was thus amended anew:
"In
all suits by materialmen for supplies or repairs or
other necessaries, the libellant may proceed against the ship and
freight
in rem, or against the master or owner alone
in personam."
The twenty-sixth rule in admiralty (having no connection,
however, with any of the preceding matters, but yet adverted to in
the argument), says:
"In suits
in rem, the party claiming the property shall
verify his claim on oath or solemn affirmation, stating that the
claimant by whom or on whose behalf the claim is made is the true
and
bona fide owner, and that no other person is the owner
thereof. "
Page 87 U. S. 210
MR. JUSTICE CLIFFORD delivered the opinion of the Court.
Complicated as the record is, it will be impossible to state the
questions presented for decision in a manner to be understood
without referring to the original proceedings in the district
court, as the suit, when it was commenced, was a libel
in
rem filed by two mariners, J. D. Cox and J. N. Geren, against
the steamboat
Lottawanna, her tackle, apparel, machinery,
and furniture, in a cause of subtraction of wages, civil and
maritime.
Prior to the institution of the suit, the allegation is that the
steamer had been engaged in commerce and navigation between the
port of New Orleans and various other ports and places on Red River
and its tributaries, and that the libellants, during that period,
were duly employed by the master as the pilots of the steamer, and
that they continued in that employment for the respective periods
and at the monthly wages specified in the libel. They also allege
that they faithfully performed their respective duties, as such
pilots, and that there is due to them the respective sums charged
in the schedule exhibited in the record. Wherefore they pray for
process against the steamer &c., and that she may be condemned
and sold to pay their respective claims.
Pursuant to the prayer of the libel, a warrant was issued,
Page 87 U. S. 211
and the return of the marshal shows that he seized the steamer
and that he published a monition, citing and admonishing the
owners, and all others claiming any right, title, or interest in
the steamer, to appear, on a day therein named, at the district
court and show cause, if any they have, why the prayer of the libel
should not be granted. Subsequently, on the same day, the
libellants filed a petition in the district court, representing
that the steamer was expensive to keep and perishable and prayed
for an order that she might be sold.
On the same day also, Moses Morgan filed an affidavit in the
case stating that he owned three-fourths of the steamer and that he
had no objection that she should be sold, and the record shows that
the court immediately passed an order that the steamer be sold by
the marshal, he giving legal notice of the sale, and that the
proceeds be deposited in the registry, subject to the further order
of the court. Nothing is exhibited to show that there was any
irregularity in the sale, and it appears that the proceeds,
amounting to ten thousand five hundred dollars, were deposited in
the registry of the court.
Before the other owner of the steamer, Philip Work, appeared,
seventeen libels of intervention were filed in the court against
the proceeds of the sale of the steamer, embracing some forty
interveners, with claims for wages as mariners and claims for
materials for repairs and for stores and supplies and for money
loaned for the steamer or for the individual owners and to pay for
debts contracted by the master or owners for repairs and supplies
during a period of two or more years.
On the fourth of February, 1871, more than a month after the
original libel was filed, Philip Work appeared and filed a claim
that he was the owner of the other undivided fourth part of the
steamer, and he excepted to all of the libels of intervention
except the one filed by the mariners, being the libel of
intervention first named in the record, and upon three grounds, and
prayed that the interventions might be dismissed:
(1) Because the court was without jurisdiction,
Page 87 U. S. 212
ratione materiae, of the matters alleged in the several
libels.
(2) Because the court was without jurisdiction to entertain the
interventions or to adjudicate thereon for the reason that all of
the owners of the steamer, at the date of the several causes of
action set forth, were citizens of that state and resided in the
City of New Orleans, at which port the steamer was registered and
enrolled.
(3) Because the respective interveners did not, on filing their
libels, give stipulations with sureties to abide the final decree
rendered in the case and to pay costs, as required by the rules in
admiralty proceedings.
Intervention was subsequently claimed by other parties, and
other directions were given which it becomes important to notice in
order to have a full view of all the material proceedings in the
district court.
Libels
in personam were also filed by the appellees and
by John Chaffee and Charles Chaffee, who are the last-named
appellants. By the transcript, it appears that the libel of the
appellees was filed on the sixth of February, 1871, and that the
libel of the said appellants was filed on the following day.
Service of the original monition was made January first, 1871, and
on the seventh of February succeeding the court passed an order
that the delay allowed by law having expired, and, no answer having
been filed, that all persons interested in the property seized be
pronounced in contumacy and default, and that the libel in the
principal case be adjudged and taken
pro confesso.
On the thirteenth of the same month, the court entered a decree
in favor of the libellants as follows: that J. D. Cox recover the
sum of one thousand three hundred and six dollars and that J. N.
Geren, the other libellant, recover the sum of six hundred and
seventy-four dollars and twenty-eight cents, from which decree
neither the libellants nor the owners of the steamer have ever
appealed.
On the third of March, 1871, subsequent to the said decree,
Jesse K. Bell filed a libel of intervention, claiming the sum of
two thousand two hundred dollars, as paid by him on two claims for
fuel furnished to the steamer by the persons
Page 87 U. S. 213
named in the libel. Leave was granted to the applicant to file
the libel, and on the same day the court passed an order that the
cause be referred to a commissioner to report upon a tableau of
distribution, and to classify the various claims according to law,
giving all parties a right to take further evidence before the
commissioner.
Since that time, further libels of intervention have been filed
as follows, to-wit, one by J. Sharp McDonald on the eighteenth of
the same month for five hundred and forty boxes of coal; another by
Thomas Onley & Co. on the thirty-first of the same month for
services, the account being approved by the master and by the mate,
and one other by Christian & Hyatt on the second of May in the
same year for stationery furnished for the use of the steamer.
Besides the libel filed by the two pilots, a libel
in
rem was also filed by the mate against the steamer, on the
thirtieth of December, 1870, for the balance due him for wages, and
the record shows that the court, on the tenth of February next
after the commencement of the suit, entered a decree in his favor
for the amount claimed and taxable costs.
Morgan and Work failed to answer the suit
in personam
of Kennett & Bell against them, and the court, on the twentieth
of November, 1871, passed an order that the libel be taken
pro
confesso and that a decree be entered in favor of the
libellants, and three days later it was ordered that the suit be
consolidated with the record in the original suit
in rem
against the steamer.
Different proceedings took place in the suit
in
personam commenced by Chaffee & Brother, as Joseph Morgan
appeared on the same day and confessed judgment in favor of the
libellants for the sum of ten thousand eight hundred and ninety-six
dollars and fifty-six cents, with eight percent interest from the
twenty-third of January preceding. Judgment was accordingly
rendered in their favor against Morgan for that amount. Work made
default, and a decree dated June 1, 1871, was entered against him
for the same amount in favor of the same libellants.
Report in due form was made by the commissioner on
Page 87 U. S. 214
the fourth of May in the same year. He decided that none of the
creditors, presenting claims for repairs and supplies, had any
right to libel the steamer in her home port, and recommended that
the proceeds in the registry of the court be distributed as
follows: first, that all legal costs be paid in full; secondly,
that all claims of the seamen for wages be paid in full; thirdly,
that all claims for labor, supplies, and materials for repairs, be
paid
pro rata, according to the schedule of claims annexed
to the report.
Exceptions of various kinds were filed to the report of the
commissioner:
(1) That certain claims were allowed which were not due from the
owners of the steamer, or were, in whole or in part, improperly
classified as claims for stores or for supplies and repairs.
(2) That the schedule improperly includes claims not having any
maritime lien on the steamer or the proceeds in the registry of the
court, nor entitled to any preference by attachment or
otherwise.
(3) That the compensation charged by the commissioner is
excessive.
Pending the hearing of the exceptions to the report of the
commissioner, the court passed an order that the claims for costs
and the claims of the seamen for wages should be paid, and it
appears that the order was promptly carried into effect, but the
residue of the report was finally referred back to the commissioner
for further proceedings. In the meantime, the appellees here,
having obtained judgment against the owners of the steamer in their
suit
in personam, sued out a garnishee process from the
Sixth District Court of the state, and attempted to attach the
proceeds as money in the hands of the clerk of the district court.
All parties were again heard by the commissioner, and, on the
fourth of June following, he made a supplemental report. In his
second report he decided that where there is a maritime lien upon
the vessel, the lien will attach to the proceeds in case the vessel
is sold and the proceeds are paid into the registry of the court,
but where there is no maritime lien upon the vessel, that the
proceeds should not be distributed, if the owners make opposition
to the application, unless the applicants
Page 87 U. S. 215
prove that they have some legal or equitable interest in the
subject matter and, the commissioner being of the opinion that the
interveners had no maritime lien, reported that the proceeds
remaining in the registry of the court could not be distributed for
their benefit in this case and recommended that the court order
either that the proceeds be paid over to the owners of the steamer
or to the sheriff who seized the same in the hands of the clerk,
acting as registrar under the garnishee process.
Seasonable exceptions were filed to the report by many of the
interveners opposed in interest to its conclusions, including the
last-named appellants. Due notice having been given, the parties
were heard and the court entered a decree that all the
interventions in the cause, founded on claims which are not liens
in admiralty, be dismissed at the cost of the respective parties.
All such parties, including the last-named appellants here, claimed
an appeal to the circuit court, and the record shows that the
appeal in their behalf was duly allowed, and that they filed an
appeal bond, executed to the owners of the steamer and the
appellees in this Court. Certain other interveners also petitioned
for an appeal, and the court passed an order granting it without
requiring any additional bond, in consequence of which omission the
present appellees, on the twentieth of December following, moved
the district court to set aside and dismiss the last-named appeal,
and the record shows that the court, on the twenty-fifth of January
following, granted the motion and vacated and annulled the
appeal.
Seamen's wages and costs having been paid, the interveners whose
appeal was allowed moved the court on the eleventh of January,
1872, that the fund in the registry of the court be transferred to
the circuit court, which motion was for a time held under
advisement. During that period, the district court, on the sixth of
February following, entered a decree that the proceeds in the
registry of the court be applied first, to the satisfaction of the
judgment of the present appellees against the owners of the
steamer, and
Page 87 U. S. 216
second, that the balance, if any, be paid over to Chaffee &
Brother, seizing creditors, next in rank.
Application for an appeal by Chaffee & Brother was made on
the following day, and on the twenty-sixth of the same month, the
court overruled the motion to transfer the fund into the circuit
court and the last-named motion for an appeal and ordered that the
fund be paid over as directed in the order previously given upon
that subject. Chaffee & Brother, however, were among the
petitioners for the appeal which was previously allowed by the
court, and their names appear in the bond which was filed to
prosecute the appeal, but they were libellants
in
personam, and not strictly interveners in the original suit
prosecuted
in rem by the two pilots.
Copies of all the material orders, directions, and proceedings
in the original suit and in the several suits of
Allen v.
Steamer, Kennett & Bell v. Owners, and
Chaffee &
Brother v. Owners, were sent to the circuit court under the
certificate of the clerk of the district court, together with
copies of all documents filed and of the minutes of all the
evidence introduced in those several cases, and the case was
entered in the circuit court, on the twenty-ninth of May, 1872,
under the title of
J. D. Cox v. Steamer, which is the
title of the original suit in the district court, from which no
appeal was ever taken either by the libellants or the owners.
Appearance was entered by Kennett & Bell, and they moved to
dismiss the appeal for the following reasons:
(1) Because the appeal was discharged in the district court,
which is not sustained by the record.
(2) Because the bond filed is irregular and not such as the law
requires, and the circuit court, having affirmed the decree of the
district court, granted the motion to dismiss.
Immediate application for an appeal to this Court was made by
the present appellants, which was allowed by the circuit court, and
the petitioners gave bond with surety to the present
appellees
et als. to pay all such damages as they
Page 87 U. S. 217
may recover against the appellants in case it should be decided
that the appeal was wrongfully obtained.
Irrespective of the question whether the appeal is regular or
irregular, it is quite clear that the decree of the circuit court
must be reversed, as one part of it is repugnant to another part.
Plainly, if the appeal was regular, it was error to dismiss it, and
if it was so irregular that it became the duty of the court to
dismiss it, the circuit court had no jurisdiction to affirms the
decree of the district court. Cases of admiralty and maritime
jurisdiction where the matter in dispute, exclusive of costs,
exceeds the sum or value of fifty dollars may be removed from the
district court into the circuit court by appeal, and the provision
is that such appeals shall be subject to the same rules,
regulations, and restrictions as are prescribed by law in case of
writs of error. [
Footnote 8]
Jurisdiction in such cases is given to the appellate court by the
appeal or writ of error, as the case may be, which ceases to exist,
even if regular, when the appeal or writ of error is dismissed, or
if not regular in essential particulars, then jurisdiction does not
attach for the purpose of affirming the decree upon the merits.
[
Footnote 9] Argument to
support these conclusions is not necessary, as they are
self-evident, but inasmuch as the case must be remanded for a new
hearing, it becomes necessary to examine some of the questions
which the anomalous proceedings present for consideration.
Most of the claims of the interveners were for stores, materials
for repairs, or for labor and supplies furnished to the steamer,
either at the request of the master or at the request of one or
both of the owners, in the home port of the vessel. More than half
a century ago, this Court decided, in
The General Smith,
[
Footnote 10] that where
repairs and supplies are furnished to a ship in her home port or in
a port of the state to which the ship belongs, that no maritime
lien is implied, nor any other lien unless it is given by the local
law by which the rights of the parties in such a case is altogether
governed.
Page 87 U. S. 218
Where necessary repairs have been made or necessary supplies
furnished to a foreign ship or to a ship in a port of a state to
which the ship does not belong, the general maritime law, as all
agree, gives the party a lien on the ship itself for his security,
which may be enforced in the admiralty by a proceeding
in
rem; but the Court decided in the case before mentioned that
as to such repairs and supplies furnished to a ship in her home
port or in a port of the state to which the ship belongs, the case
is governed by the local law, and that no lien arises unless given
by the local law. All the federal courts were governed by those
rules for years, and little or no difficulty arose in practice, as
most or all of the states enacted laws giving a lien for the
protection of materialmen in such cases, and this Court adopted a
rule authorizing a proceeding
in rem against domestic
ships "where, by the local law, a lien was given to secure the
payment of contracts in such cases for supplies, repairs, or other
necessaries." Since that time, however, that rule has been repealed
and a new one adopted in its place which does not authorize a
proceeding
in rem except where there is a claim founded on
a maritime lien against a foreign ship or against a ship in a
foreign port or the port of a state other than that to which the
ship belongs. [
Footnote 11]
Attempts were made by the states to obviate the embarrassment which
grew out of the repeal of that rule, and the adoption of the new
rule withdrawing the use of the process
in rem from the
district courts to enforce the payment of claims for repairs and
supplies furnished to domestic ships, but this Court decided in
several cases that the state legislatures could not create a
maritime lien, nor could they confer jurisdiction upon a state
court to enforce such a lien by a suit or proceeding
in
rem as practiced in the admiralty courts. [
Footnote 12]
Page 87 U. S. 219
Much embarrassment has existed ever since the old twelfth
admiralty rule was repealed, as the new rule makes no provision to
enforce the payment of contracts for repairs and supplies furnished
to domestic ships, except by a libel
in personam. Repeated
judicial attempts have been made to overcome the difficulty, none
of which have proved satisfactory, because they failed to provide a
remedy in the admiralty by a proceeding
in rem.
Inconveniences of the kind have been felt for a long time, until
the bench and the bar have come to doubt whether the decision that
a maritime lien does not arise in a contract for repairs and
supplies furnished to a domestic ship is correct, as it is clear
that the contract is a maritime contract, just as plainly as the
contract to furnish such repairs and supplies to a foreign ship or
to a domestic ship in the port of a state other than that to which
the ship belongs. [
Footnote
13] Such a remedy is not given even in the latter case unless
the repairs and supplies were furnished
on the credit of the
ship, and it is difficult to see why the same remedy may not
be given in the former case if the repairs and supplies were
obtained by the master on the same terms. [
Footnote 14] These and many other considerations
have had the effect to create serious doubts as to the correctness
of the decision made more than fifty years ago, [
Footnote 15] that a maritime lien does not
arise in such a case.
Expressions, however, to the same effect are found in other
opinions of this Court, and inasmuch as the question is not
satisfactorily put in issue in the pleadings in this case, and does
not appear to have been directly presented to the circuit court by
either party, the Court here is not inclined to enter more fully
into the consideration of it at the present time.
None of the interveners alleged
in direct terms that
they had a maritime lien upon the steamer or the proceeds in
the
Page 87 U. S. 220
registry of the court. Many libels of intervention were filed
subsequent to the sale of the steamer, and some of them contain a
prayer that the court will decree the payment of the claim of the
libellant,
with privilege on the steamer or the proceeds,
but in no case does the libellant allege in terms that the contract
set forth in the libel constitutes a maritime lien upon the steamer
or the proceeds in the registry of the court, nor does the
libellant pray for process to enforce any such lien.
Doubtless the maritime lien is, in many cases, well described
as a privilege in the thing, but the state law, which
cannot be enforced in the admiralty, also gives materialmen a
privilege or lien in such cases, and
in view of that fact
it may well be questioned whether the allegation in the libels is
sufficient to apprise the owners of the specific nature of the
interest which the libellants claim in the proceeds, as the rule of
decision in the federal courts has been for many years that a
maritime lien does not arise in such a case. Any person having an
interest in the proceeds may intervene
pro interesse suo,
but he ought to allege enough to apprise the owner of the nature of
the interest claimed. [
Footnote
16]
Most or all of the claims were referred to a commissioner to
report a tableau of distribution, and no exception was taken to the
order of the court appointing the commissioner. He decided that
none of the claims except those for seamen's wages constituted a
maritime lien, and none of the libellants excepted to the report
upon that precise ground. On the contrary, they seem rather to have
acquiesced in that part of the report, and in the view adopted by
the district judge that it was competent for him to decree that the
respective claims should be paid out of the proceeds in the
registry of the court, irrespective of the question whether the
claimants had or had not any maritime lien or other legal interest
in the same. Such must, it would seem, have been the view of the
district judge, as he ultimately
Page 87 U. S. 221
confirmed the report and directed the proceeds to be paid to two
claimants, both of whom were libellants
in personam and
judgment creditors of the owners. By confirming the report, he
decided that none of the libellants whose claims were for repairs
and supplies had any maritime lien, but in the decree ordering the
payment of the two claims he departed from the report of the
commissioner, as the latter decided that inasmuch as opposition was
made by the owners, the proceeds could not be distributed among the
interveners who had no maritime liens. Apparently the district
judge must have been of the opinion that the proceeds were subject
to his order of distribution among the creditors of the owners or
that the two claimants acquired some right or interest in the
proceeds either by their judgments against the owners or by virtue
of the proceedings under the garnishee process against the clerk as
the registrar of the district court.
Beyond doubt, maritime liens upon the property sold by the order
of the admiralty court follow the proceeds, but the proceeds
arising from such a sale, if the title of the owner is unencumbered
and not subject to any maritime lien of any kind belong to the
owner, as the admiralty courts are not courts of bankruptcy or of
insolvency, nor are they invested with any jurisdiction to
distribute such property of the owner, any more than any other
property belonging to him, among his creditors. Such proceeds, if
unaffected by any lien, when all legal claims upon the fund are
discharged, become by operation of law the absolute property of the
owner. [
Footnote 17]
Subsequent to the seizure, any person may enter an appearance to
protect any interest he may have in the property, or he may
commence a second or subsequent suit to enforce any claim he may
have against it, or he may take legal measures to prevent the
release of the property under arrest, or to prevent the payment of
the proceeds out of the
Page 87 U. S. 222
registry. [
Footnote 18]
Defense may be made to a suit
in rem by any person who has
an interest in the thing seized; as for example, a mortgagee may
appear and defend a salvage or wages suit, or the assignee of a
bankrupt owner may appear and contest any claim against the
property of the bankrupt, or underwriters, if they have accepted
the abandonment, may also appear and defend against any claims
adverse to their interest in the property, but a person who has
merely a collateral interest in some question involved in the suit
and has no actual concern in the subject matter of it, cannot be
allowed to intervene in the proceedings. [
Footnote 19]
Where the property is already under arrest and a second or
subsequent suit is instituted, it is not necessary to take out a
second warrant of arrest, as a citation
in rem is
sufficient, instead of a warrant, commanding the marshal to cite
all persons who have, or claim to have, any right, title, or
interest in the property, to enter an appearance in the cause on or
before the day therein named, the service of which is sufficient to
protect the rights of the intervener. Notice to the owners in some
form must be given in such cases, else the decree will not conclude
the owners. [
Footnote
20]
Decided cases may be found which afford some support to the
proposition that the proceeds in the registry of the court, if the
lien claims are all discharged, may be distributed equitably among
the intervening creditors of the owners, but the court is of the
opinion that the rule that the proceeds in that state of the case
belong to the owner is correct in principle, and that the weight of
authority is in its favor, notwithstanding those cases, of which
The John [
Footnote
21] is the one most frequently cited. But in that case there
was no opposition by the owners, nor was the question much
considered. Directly opposed to that case is the case of The
Maitland, [
Footnote 22]
in
Page 87 U. S. 223
which the admiralty court refused to follow it, remarking that
there is no solid distinction between original suits and suits
against the proceeds where there is opposition. Mere remnants, if
unclaimed by the owner, may stand upon a different
footing, and it is upon that ground that the admiralty courts have
sometimes decreed the payment of small unclaimed sums to a creditor
of the owner having a clear equity, to prevent the same from being
indefinitely impounded in the registry of the court. Exactly the
same point was decided in the same way in the case of
The
Neptune, [
Footnote 23]
in which all of the authorities to that time were carefully
examined. Where the ship is sold the proceeds are in the hands of
the court, which holds the fund in trust, and the court in the
following case added that the owner is in some sense entitled to
the same, but finally decided that inasmuch as he cannot obtain the
fund without the order of the court, that it cannot be attached
under the garnishee process. [
Footnote 24]
Supplemental suits in the nature of a suit
in rem may
unquestionably be entertained in favor of parties having
an
interest in the proceeds, as was held by this Court in the
case of
Andrews v. Wall, [
Footnote 25] in which this Court said that such suits may
be entertained to ascertain to whom the proceeds belong and to
deliver the same over to the parties who establish the lawful
ownership to the property, as in the case of the sale of a ship to
satisfy claims for seamen's wages, or for a bottomry bond, or for
salvage services, or to discharge a lien for repairs and supplies,
the rule being that after the original demand is paid if a surplus
remains in the registry, the court may determine to whom the same
belongs. Other lien claims are also mentioned for which the ship
may be sold, but it is unnecessary to recapitulate them, as those
enumerated are sufficient to explain the principle adopted by the
court. [
Footnote 26]
Different views have in some few instances been adopted
Page 87 U. S. 224
by the district courts, but the right of the court to decree
that third persons who could not have proceeded against the
property
in rem may recover a proportion of the proceeds
to satisfy their claims against the owner in a case where the owner
appears and opposes the application seems to be repugnant to every
sound principle of judicial proceeding, and it is certainly opposed
to the great weight of authority. [
Footnote 27]
Reference is sometimes made to the case of
Place v.
Potts, [
Footnote 28] as
supporting the opposite rule, but the Court here is not able to
regard the case as having any such tendency, as the judgment in
that case in the court of original jurisdiction was founded almost
entirely upon the decision of the admiralty judge in the case of
The Dowthorpe, [
Footnote 29] which is nothing but a simple apportionment
of the different liens upon the ship and freight.
Suppose that is so, still it is contended that the appellees
acquired the right of preference in the fund by virtue of the
proceedings under the garnishee process, as more fully set forth in
the record; but the court is entirely of a different opinion, for
several reasons:
1. Because the fund, from its very nature, is not subject to
attachment either by the process of foreign attachment or of
garnishment, as it is held in trust by the court to be delivered to
whom it may belong, after hearing and adjudication by the court.
[
Footnote 30]
2. Because the proceeds in such a case are not by law in the
hands of the clerk nor of the judge, nor is the fund subject to the
control of the clerk. Moneys in the registry of the federal courts
are required by the Act of Congress to be
Page 87 U. S. 225
deposited with the Treasurer of the United States, or an
assistant treasurer or designated depositary, in the name or to the
credit of such court, and the provision is that no money deposited
as aforesaid shall be withdrawn except by the order of the judge or
judges of said courts respectively, in term time or vacation, to be
signed by such judge or judges and to be entered and certified of
record by the clerk. [
Footnote
31] Regulations substantially to the same effect have existed
in the acts of Congress for more than half a century, and within
that period it is presumed that no proceeding to attach such a fund
by a creditor of the owner has ever been sustained. [
Footnote 32]
3. Judgments were never a lien upon personal property, unless
made so by attachment under mesne process, which is all that need
be said in respect to the proposition that the appellees acquired a
right of preference to the proceeds in the registry of the court by
virtue of their judgment against the owners.
Mention should also be made of another error, which ought if
possible to be promptly corrected. Where an appeal is taken from
the decree of the district court in a proceeding
in rem to
the circuit court, the property or proceeds thereof follows the
cause into the circuit court, where it remains until the litigation
is ended, as it does not follow the cause into the Supreme Court.
[
Footnote 33] Application
was made to the district court to send up the proceeds, and the
record shows that the court overruled the same, which is a plain
error and one which ought to be promptly corrected, unless the
proceeds have been paid over as directed by the court, and if so,
they should be recalled, if practicable, and restored to the
registry, and then sent up to the circuit court, as the circuit
court in such cases executes its own decree.
Imperfectly tried, as the case has been, the Court here is of
the opinion and directs that leave be given to both parties
Page 87 U. S. 226
to amend their pleadings, and if need be to take further proofs.
Error was also committed by the circuit court in affirming the
decree of the district court, as it is plain it should have been
reversed. For these reasons, the decree of the circuit court is in
all things
Reversed and the cause remanded for further proceedings in
conformity to this opinion.
[
Footnote 1]
17 U. S. 4
Wheat. 443.
[
Footnote 2]
32 U. S. 7 Pet.
324.
[
Footnote 3]
Acts of May 8, 1792, 1 Stat. at Large 275, and of August 23,
1842, 5
id. 516.
[
Footnote 4]
66 U. S. 1
Black 529.
[
Footnote 5]
2 Haggard's Admiralty 254.
[
Footnote 6]
3
id. 130;
S.C. on appeal, 3 Knapp 711.
[
Footnote 7]
The Moses
Taylor, 4 Wall. 411 (December Term, 1866);
The Hine v.
Trevor, 4 Wall. 555;
and see 73 U.
S. 6 Wall. 213;
The
Belfast, 7 Wall. 624;
Leon v.
Galceran, 11 Wall. 185.
[
Footnote 8]
2 Stat. at Large 244.
[
Footnote 9]
1
id. 84.
[
Footnote 10]
17 U. S. 4
Wheat. 443.
[
Footnote 11]
The Lulu, 10
Wall. 192;
The
Belfast, 7 Wall. 644;
Leon
v. Galceran, 11 Wall. 191;
Steamboat Co. v.
Chase, 16 Wall. 533;
The St.
Lawrence, 1 Black 522.
[
Footnote 12]
The Moses
Taylor, 4 Wall. 430;
The
Hine v. Trevor, 4 Wall. 571;
The
Belfast, 7 Wall. 644;
Steamboat Co. v.
Chase, 16 Wall. 534;
Leon
v. Galceran, 11 Wall. 192.
[
Footnote 13]
Abbott on Shipping 143, 148.
[
Footnote 14]
5 American Law Review 612; 7
id.; 66 U.
S. Lawrence, 1 Black 529;
The Harrison, 2
Abbott United States Reports 78;
The
Belfast, 7 Wall. 645,
74 U. S. 646.
[
Footnote 15]
The General
Smith, 4 Wheat. 443.
[
Footnote 16]
43 Admiralty Rule, Revised Code of Practice, Art. 3273-4327;
Revised Statutes of Louisiana 604.
[
Footnote 17]
Brown v. Lull, 2 Summer 443;
Sheppard
v. Taylor, 5 Pet. 675;
The Europa,
Browning & Lushington 87, 91;
The Amelie, 2 Clifford
448;
Same Case, 6
Wall. 30.
[
Footnote 18]
43 Admiralty Rule; Williams & Bruce's Admiralty Jurisdiction
229.
[
Footnote 19]
Conkling's Practice (5th ed.) 570;
Stratton v.
Jarvis, 8 Pet. 4;
The Killarney,
Lushington 430; Williams & Bruce's Admiralty Jurisdiction 199;
The Julindur, 1 Spinks 75;
The Louisa, Browning
& Lushington 59;
The Caledonia, Swabey 17;
The
Mary Anne, 1 Ware 108.
[
Footnote 20]
Nations v.
Johnson, 24 How. 205; 43 Admiralty Rule.
[
Footnote 21]
3 Robinson 290.
[
Footnote 22]
2 Haggard's Admiralty 253.
[
Footnote 23]
3 Knapp's Privy Council 111.
[
Footnote 24]
The Wild Ranger, Browning & Lushington, 88.
[
Footnote 25]
44 U. S. 3 How.
573.
[
Footnote 26]
United States v. Casks of
Wine, 1 Pet. 547;
Schuchardt
v. Ship Angelique, 19 How. 241.
[
Footnote 27]
2 Parsons on Shipping 231;
The New Eagle, 2 W.Robinson
441;
Gardner v. Ship New Jersey, 1 Peters' Admiralty 226;
Clement v. Rhodes, 3 Addams 40.
[
Footnote 28]
8 Exchequer 705;
Same Case, 10
id. 370;
Same Case, 5 H.L. 383.
[
Footnote 29]
2 W.Robinson 90.
[
Footnote 30]
The Albert Crosby, 1 Lushington 101;
The Wild
Ranger, Browning & Lushington 8; 1 Chitty's Archbold's
Practice (11th ed.) 702.
[
Footnote 31]
17 Stat. at Large 1.
[
Footnote 32]
3
id. 395.
[
Footnote 33]
The Collector,
6 Wheat. 194;
The Seneca, Gilpin 34;
The Grotius,
1 Gallison 503;
Montgomery v.
Anderson, 21 How. 388; Conklin's Practice (5th ed.)
569.