U.S. Supreme Court
The Lottawanna, 87 U.S. 20 Wall. 201 201 (1873)
87 U.S. (20 Wall.) 201
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. chanroblesvirtualawlibrary
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:
"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: chanroblesvirtualawlibrary
"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 chanroblesvirtualawlibrary
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. chanroblesvirtualawlibrary
The commissioner divided the sum rataby">Page 87 U. S. 205
The commissioner divided the sum rataby">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. chanroblesvirtualawlibrary
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. "