  1. How Created.—In general and within the limits hereinafter mentioned, every service rendered to a ship and every injury done by a ship, creates a maritime lien upon her for the benefit of the individual who did the work or suffered the wrong. Those who furnish supplies or fuel or provisions, or make repairs, or render services, as well as the members of the crew and officers (except the master) acquire such liens for the collection of the amounts due them. A like right or privilege accrues for the damage done through negligence on the part of the ship resulting in damage to persons or property, as by collision or injury to cargo. So these liens are divided into two classes, those ex contractu (arising out of agreements, express or implied) and those ex delicto (arising out of wrongs or torts). The authority of the master to obligate the ship so that a lien arises has been discussed under the title "Master." The managing owner, ship's husband, master or any person to whom the management of the vessel at port of supply is entrusted may by ordering supplies, repairs, render the vessel liable to a maritime lien. If the master be drunk or disabled and another person is discharging his duties and is in effect for the time being master of the ship, such person may create a valid lien. Thus it has been held that the vessel is bound for supplies ordered by the mate acting during the illness of the master. The vessel is also bound for supplies furnished on the order of any member of the ship's company and with the master's knowledge and acquiescence. It is customary in the administration of a large modern ship for the head of each department, e.g., the steward, chief engineer, to order supplies and for these the vessel is responsible, but only on the theory that the purchases are made with the master's authority, and if the person contracting the obligation has acted in excess of the powers delegated to him by the master, the ship will not be bound. It is incumbent on the person furnishing goods to a vessel to inquire into the authority A maritime lien attaches to the offending ship only, and not to her cargo (except for unpaid freight) and this is true even though the cargo belonged to the owner of the offending ship. As was said by Mr. Justice Brown in the case of the Bristol, 29 Fed. 867: The cargo, except for the collection of the freight due, cannot be held for the faults of the ship. There being no lien beyond freight due, no proceeding in rem lies against the cargo for damages by collision, if the freight be paid, whether the cargo belongs to the owner of the offending vessel or not; and, if arrested, the cargo must be released upon the payment of the freight due. A maritime lien, being essentially a remedy against the vessel, may attach even in a case in which the owners are not personally responsible; as for instance, where a state pilot, in charge of a ship under a state statute which renders his employment compulsory, negligently brought the ship into collision, she was subjected to a lien for the damage done, although the pilot was in no sense the agent of the owners, and no personal liability rested upon them. The China, 7 Wall. 53. The lien attaches only by virtue of contracts or torts which are wholly maritime in their nature. It is frequently difficult to determine the nature of a contract or tort. Thus persons digging ice and snow from around a vessel on a beach, and about to be launched did not acquire a maritime lien because the service was performed on shore. Whereas persons who floated a vessel which had been carried far ashore were held to have performed a maritime service and to be entitled to a lien. In a case in which a vessel communicated fire to a wharf to which she was made fast, it was held that the tort was not maritime, whereas, had she been in the stream and had communicated fire to another vessel in the stream, the tort would have been maritime and would have given rise to a maritime lien (Hough v. Trans. Co., 3 Wall. 20). Conversely a tort having its inception on land and completed on shipboard will give rise to a lien. As for example where a man working on board ship was injured by a piece of lumber thrown through a chute by a man working on a wharf. (Herman v. Mill Co., 69 Fed. 646). 2. Essential Value.—The essential value of these liens lies in the right they give to have the ship arrested and sold by a court of admiralty for their satisfaction, and in the speed and security with which the remedy can be applied. The vessel is arrested immediately upon the filing of the libel, before the liability is proven or the case tried, and may not leave port without giving bond to secure the claim (see Chapter XVII, Admiralty Remedies). 3. Independent of Notice or Possession.—They do not depend upon notice or recording or possession and do not in any way resemble a mortgage. They are, in fact, an actual property in the ship, created as soon as the service is rendered or the wrong suffered (Yankee Blade, 19 How. 82). 4. Secret.—As these liens do not depend upon notice or record, they are essentially secret in their nature and even purchase of the ship, in good faith and for value, will not be protected against them (The Marjorie, 151 Fed. 183). 5. Diligence Required.—On the other hand the law requires the lienor to be diligent in enforcing his lien so that third parties may not be unduly prejudiced thereby. If he is not diligent, the court will hold him guilty of laches and the lien may become stale as against all parties other than the owner. 6. Rules of Diligence.—There are no hard and fast rules defining diligence or the limit after which a lien becomes stale. Under the general maritime law, the voyage was the test; liens which accrued on one voyage were required to be enforced before another voyage was made or they became stale as to those of the latter. In deep-sea navigation, where the voyages are prolonged, this rule still obtains. On the Great Lakes, where the trips or voyages are comparatively short, and navigation is closed by the winters, the season of navigation is the rule. Liens not enforced during the season or the following winter will be postponed to those of the later season. In New York harbor, the local conditions have resulted in a forty-day rule; in Virginia, under somewhat In the case of the Marjorie, 151 Fed. 183, above cited, a private yacht was libeled in Baltimore on account of coal furnished her in Norfolk nearly a year previously. She spent that time voyaging up and down the coast, putting in at various ports and when libeled had been laid up for the winter. She had not been in Norfolk subsequent to the occasion on which the coal was furnished. About six months after the coal was furnished she was sold to a new owner, who, finding no lien on record against her, paid the full purchase price. The Court held: As commercial enterprise would be vexatiously incommoded and the free circulation and disposal of vessels prevented if such liens, which are not required by law to be made manifest by public registration, were allowed to lie dormant for an indefinite period, the courts have uniformly held, where the rights of bona fide purchasers will be injuriously affected if it is allowed to prevail, that the lien is lost if there has been long delay, and there has been reasonable opportunity to enforce it. The diligence required is usually measured by the opportunity of enforcement. In nearly all of the cases where the courts have held the lien to be lost and where there has been change of possession, there has been unreasonable delay on the part of the creditor in availing himself of the opportunities of enforcing his lien. ***** In the case under consideration the libel was filed within less than a year. The yacht had been sailing from port to port, and never came within the jurisdiction of the port where the supplies were furnished. The claim was a small one and hardly justified the employment of a detective to follow her wanderings. The lien was asserted as soon as the yacht was found.... The law is well settled that liens of this nature must be sustained if there has been reasonable diligence in asserting them. A long line of decisions shows that a delay of a year in circumstances such as are disclosed by the testimony is not unreasonable, and to lay down any other rule would tend to unsettle the law and to disturb the credit which in the interest of commerce must be extended to ships for supplies when away from their home ports to enable them to continue their voyages, a credit only given upon the faith that they have a lien upon the ship. 7. Recording Liens on "Preferred Mortgage" Vessels.—The Merchant Marine Act of 1920 (Sec. 30, Subsection G. See 8. Limited to Movable Things.—These liens arise only upon movable things engaged in commerce and navigation. They cannot exist in anything which is fixed and immovable and not the subject of maritime commerce or navigation. Thus they will subsist in vessels, rafts and cargoes but not upon a bridge or a ship totally out of commission (Rock Island Bridge, 6 Wall. 213; Pulaski, 33 Fed. 383). The lien has been sustained against a dredge. (Atlantic, 53 Fed. 607). 9. Priorities.—Important priorities exist among maritime liens and these are adjusted when the ship is sold in admiralty to satisfy her debts. The purchaser at an admiralty sale, as elsewhere stated, takes the ship free of all existing liens; the proceeds of the sale are distributed among the lienors according to their priorities, after deducting costs and expenses. Liens for torts take precedence over all prior liens, and the later lien for tort will be preferred to an earlier if there has been an absence of diligence in enforcing it. The John G. Stevens, 170 U.S. 113, is the leading case on the priority of liens against the offending vessel for torts committed by her. Mr. Justice Gray held: But the question we have to deal with is whether the lien for damages by the collision is to be preferred to the lien for supplies furnished before the collision. ***** The collision, as soon as it takes place, creates, as security for the damages, a maritime lien or privilege, jus in re, a proprietary interest in the offending ship, and which, when enforced by admiralty process in rem, relates back to the time of the collision. The offending ship is considered as herself the wrongdoer, and is herself bound to make compensation for the wrong done. The owner of the injured vessel is entitled to proceed in rem against the offender, without regard to the question who may be her owners, or to the division, the nature, or the extent of their interests in her. With the relations of the Liens arising out of matters of contract will be paid in substantially the following order:— Salvage. Sailors' wages and wages of a stevedore when employed by master or owner. "Preferred mortgages" (see below). Pilotage and Towage. Supplies and Repairs. Advances of Money. Insurance premiums (where a lien). Mortgages not preferred. It may be regarded as the grand rule of priority among maritime liens, that they are to be paid in the inverse order of the dates at which they accrued. Liens arising on a later voyage have priority over liens of an earlier voyage, and the later in point of time which have been for the preservation or improvement of the vessel, are to be paid in the inverse order of the dates at which they accrued, the later debt being paid in full before anything is allowed to the lien of an inferior grade. The reason for this is because the loan, or service, or whatever created the later lien has tended to preserve or improve the first lien-holder in security for his lien. He is to be preferred who contributed most immediately to the preservation of the thing. An important qualification of the rule heretofore governing the priority of maritime liens on American vessels, is made by the Ship Mortgage Act of 1920 (Merchant Marine Act, see Appendix). By this act certain mortgages which conform to its The subjects of liens for salvage, wages, pilotage and towage, advances, mortgages, freight and charter hire are discussed under the appropriate titles in this book. By act of Congress approved June 23, 1910, provisions were made which substantially changed the law as it existed theretofore. This act was repealed and reËnacted with amendments by the Merchant Marine Act of 1920 (see Appendix). The latter act (Sec. 30), representing the present state of the law, provides: Subsection P. Any person furnishing repairs, supplies, towage, use of drydock or marine railway, or other necessaries, to any vessel, whether foreign or domestic, upon the order of the owner of such vessel, or of a person authorized by the owner, shall have a maritime lien on the vessel, which may be enforced by suit in rem, and it shall not be necessary to allege or prove that credit was given to the vessel. Subsection Q. The following persons shall be presumed to have authority from the owner to procure repairs, supplies, towage, use of drydock or marine railway, and other necessaries for the vessel: The managing owner, ship's husband, master, or any person to whom the management of the vessel at the port of supply is intrusted. No person tortiously or unlawfully in possession or charge of a vessel shall have authority to bind the vessel. A person furnishing supplies or repairs to a vessel in the absence of her owners or temporary owners, and elsewhere than in her home port, and upon the order of the master, should inquire into the necessity for the supplies or repairs. If, upon reasonable inquiry, he finds that they are necessary, he may safely furnish them, relying on the credit of the vessel and upon his right to a maritime lien upon her. If reasonable inquiry fails to show any necessity, the supplier or repairer will not be entitled to a lien, even though the master gave the order. In the case of the Valencia, 165 U.S. 264, the home port of the ship was Wilmington, North Carolina. She was plying between Although the libellants were not aware of the existence of the charter party under which the Valencia was employed, it must be assumed upon the facts certified that by reasonable diligence they could have ascertained that the New York Steamship Company did not own the vessel, but used it under a charter party providing that the charterer should pay for all needed coal. The libellants knew that the steamship company had an office in the city of New York. They did business with them at that office, and could easily have ascertained the ownership of the vessel and the relation of the steamship company to the owners. They were put upon inquiry, but they chose to shut their eyes and make no inquiry touching these matters or in reference to the solvency or credit of that company. It is true that libellants delivered the coal in the belief that the vessel, whether a foreign or a domestic one, or by whomsoever owned, would be responsible for the value of such coal. But such a belief is not sufficient in itself to give a maritime lien. If that belief was founded upon the supposition that the steamship company owned the vessel, no lien would exist, because in the absence of an agreement, express or implied, for a lien, a contract for supplies made directly with the owner in person is to be taken as made "on his ordinary responsibility, without a view to the vessel as the fund from which compensation is to be derived." The St. Jago de Cuba, 9 Wheat. 409. And if the belief that the vessel would be responsible for the supplies was founded on the supposition that it was run under a charter party, then the libellants are to be taken as having furnished the coal at the request of the owner pro hac vice, without any express agreement for a lien, and in the absence of any circumstances justifying the inference that the supplies were furnished with an understanding that the vessel itself would be responsible for the debt incurred. In the present case, we are informed by the record that there was no express agreement for a lien, and that nothing occurred to warrant the inference that either the master or the charterer agreed to pledge the credit of the vessel for the coal. ***** We mean only to decide, at this time, that one furnishing supplies or making repairs on the order simply of a person or corporation acquiring the control and possession of a vessel under such a charter The law is even more succinctly stated in the case of the Kate, 164 U.S. 458, as follows: The principle would seem to be firmly established that when it is sought to create a lien upon a vessel for supplies furnished upon the order of the master, the libel will be dismissed if it satisfactorily appears that the libellant knew, or ought reasonably to be charged with knowledge, that there was no necessity for obtaining the supplies, or, if they were ordered on the credit of the vessel, that the master had, at the time, in his hands, funds, which his duty required that he should apply in the purchase of needed supplies. Courts of admiralty will not recognize and enforce a lien upon a vessel when the transaction upon which the claims rests originated in the fraud of the master upon the owner, or in some breach of the master's duty to the owner, of which the libellant had knowledge, or in respect of which he closed his eyes, without inquiry as to the facts. If no lien exists under the maritime law when supplies are furnished to a vessel upon the order of the master, under circumstances charging the party furnishing them with knowledge that the master cannot rightfully as against the owner, pledge the credit of the vessel for such supplies, much less one is recognized under that law where the supplies are furnished, not upon the order of the master, but upon that of the charterer who did not represent the owner in the business of the vessel, but who, as the claimant knew, or by reasonable diligence could have ascertained, had agreed himself to provide and pay for such supplies, and could not, therefore, rightfully pledge the credit of the vessel for them. Where a charterer becomes the owner pro hac vice, as usually occurs in the case of a "bare-boat" charter, necessary supplies ordered by the master will entitle the supplier to a maritime lien under the statute, unless the charter party contains stipulations that were known to the supplier or which he could have readily ascertained, excluding such liens. Thus in the latest decision of the Supreme Court in which the act of June 23, 1910, was construed (South Coast S.S. Co. v. Rudnbach, decided March 1, 1920) a bare vessel was chartered to one Levick, the contract stipulating that Levick was to pay all charges and save the owners harmless from all liens. There was also a provision that the owner might retake the vessel in case Levick failed to discharge any liens within thirty days, and a provision for the surrender of the vessel free of Unless the charter excluded the master's power the owner could not forbid its use. The charter-party recognizes that liens may be imposed by the charterer and allow to stand for less than a month, and there seems to be no sufficient reason for supposing the words not to refer to all the ordinary maritime liens recognized by the law. The statute had given a lien for supplies in a domestic port, and therefore had made that one of these ordinary liens. Therefore the charterer was assumed to have power to authorize the master to impose a lien in a domestic port, and if the assumption expressed in words was not equivalent to a grant of power, at least it cannot be taken to have excluded it. There was nothing from which the furnisher could have ascertained that the master did not have power to bind the ship. 11. Not Sole Remedy.—The reader will not be misled into supposing that the absence of a right to a maritime lien means that the debt is uncollectible by legal process. While the admiralty court is closed to the creditor if there be no right to a maritime lien, he has the same remedy as any other creditor by a suit at law to recover the debt or damage from the debtor, or person liable, i.e., the owner, the temporary owner, or the person who ordered the goods or did the damage as the case may be. Such a remedy lacks the peculiar advantages of the maritime lien (§2 supra, this chapter). There may also be special remedies open to him under state statutes (but see §13, this chapter). 12. How Divested.—Maritime items are only completely divested by payment or by an admiralty sale. Laches—that is to say delay or sloth—on the part of the lienor may prevent their enforcement against the rights of subsequent lienors or purchasers for value in good faith, but the ship is really only absolutely free from them when she has passed through a sale in proceedings in rem—that is, a suit against the ship. This transfers all claims 13. State Liens.—For many years there was an open question in the maritime law of the United States as to the status of liens which arose in the home port of the vessel and numerous conflicting decisions were made by the courts. The effect was that in all cases of liens arising out of contract, like supplies and repairs, the question of upon whose credit the work was done and the supplies furnished became very important; where the transaction was in the home port, there was a presumption that it was on the personal credit of the owner and no lien was allowed; and the theory of home port became extended to include the entire State in which the owner resided. Thereupon all of the states interested in maritime affairs enacted statutes providing for liens upon vessels, both maritime and nonmaritime in their nature, and a sort of admiralty proceeding against the ship to enforce them; the procedure portions of these statutes were generally held void as interfering with the exclusive jurisdiction in rem of the Federal courts, but the liens which they created, if maritime in their nature, were usually enforced. By the act of Congress of June 23, 1910 (as amended and reËnacted by the Merchant Marine Act of 1920, 14. Builders' and Mechanics' Liens.—These may arise upon a ship under the provision of local statutes and be entirely enforceable so long as they do not come into conflict with maritime liens and the exclusive jurisdiction of the admiralty. So, also, a lienor may assert his common-law right to retain possession of the ship until payment is made. This depends entirely on possession and cannot be enforced by judicial proceedings, although it may be recognized by the court when it arrests the vessel on other accounts. 15. Foreign Liens.—Maritime liens often depend on the law of the place in which the obligation is incurred and also upon the law of the ship's flag. In other words, inquiry must frequently be made whether the local law gives a lien, whether the law under which the ship sails gives the master power to create the lien, and whether the country in which the suit is commenced has the legal machinery to enforce the lien. There is no doubt about our own admiralty courts having adequate jurisdiction and equipment to enforce any maritime lien which exists by the law of a foreign country. Its enforcement is a matter of comity and not of right when the parties are foreigners. Thus the maritime lien for collision will generally be enforced wherever the offending ship may be seized, irrespective of the place where the collision occurred. That lien exists by virtue of the general maritime law. On the other hand, there may be a closer question in regard to the lien for supplies. They may be furnished in a port of a country whose laws do not provide such a maritime lien but only give a remedy by attachment of the ship. The tendency of the weight of authority is to enforce such liens in the courts of this country whenever they exist by virtue of the general maritime law, even 16. Enforcement of Liens.—This is discussed in Chapter XVII, Admiralty Remedies. REFERENCES FOR GENERAL READINGAdmiralty, Hughes, Chapter XVII. Admiralty Liens of Material Men, IX American Law Review, 654. Features of Admiralty Liens, XVI American Law Review, 193. Maritime Liens, 4 Law Quarterly Review, 379. Priorities among Maritime Liens, II University Law Review, 122. The DeSmet, 10 Fed. 483 (excellent annotation). Lottawanna, 21 Wall. 558. John G. Stevens, 170 U.S. 113. |
|
