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THE DECISIONS

OF THE

Supreme Court of the United States

AT

OCTOBER TERM, 1920.

PIEDMONT & GEORGE'S CREEK COAL Maritime liens-stricti juris - not ex

COMPANY, Petitioner,

v.

SEABOARD FISHERIES COMPANY,
Claimant, etc.

(See S. C. Reporter's ed. 1-13.)

Maritime liens-for supplies - effect of use.

1. A maritime lien for the unpaid purchase price of supplies does not arise in favor of the seller merely because the purchaser, who is the owner of a vessel, subsequently appropriates the supplies to her

use.

[For other cases, see Maritime Liens, II. b, in
Digest Sup. Ct. 1908.]
Maritime liens for supplies effect
of statute.

2. The scope of the maritime lien was not broadened by the Act of June 23, 1910, § 1, giving a maritime lien upon a vessel for supplies furnished by the seller to the ves sel upon the order of the owner, without proof that credit was given to the vessel, but the purpose of the act was, first, to do away with the artificial distinction by which a maritime lien was given for supplies furnished to a vessel in a port of a foreign country or state, but was denied where the supplies were furnished in the home port or state, and, second, to do away Iwith the doctrine that when the owner of a vessel contracts in person for necessaries, or is present in the port when they are or dered, it is presumed that the materialmen did not intend to rely on the credit of the vessel, and that hence no lien arises, and, third, to substitute a single Federal statute for the state statutes in so far as they confer liens for repairs, supplies, and other necessaries.

tended by construction, analogy, or inference.

3. The maritime lien is a secret one. It may operate to the prejudice of prior mortgagees or purchasers without notice. It is therefore stricti juris, and will not be extended by construction, analogy, or infer

ence.

[For other cases, see Maritime Liens, II. b, in Digest Sup. Ct. 1908.]

Maritime lien- for supplies - by whom furnished.

4. No part of the coal delivered to a corporation owning both factories and a fleet of fishing steamers, in pursuance of a contract to furnish such corporation with its season's supply, and thereafter by such corporation distributed in its discretion to its vessels and factories, can be said to have been furnished by the seller to the vessels upon the order of the owner, within the meaning of the Act of June 23, 1910, § 1, giving a maritime lien upon a vessel for supplies so furnished without proof that credit was given to the vessel, although the use of the greater part of the coal by the Vessels of the fleet was a use which was contemplated by the parties at the time of the purchase, and although both parties understood that the law would afford a lien on the vessels for the purchase price. [For other cases, see Maritime Liens, II. b, in

Digest Sup. Ct. 1908.] Appeal - review of facts findings.

concurrent

5. Concurrent findings of fact by the two lower courts in an admiralty cause will not be disturbed by the Federal Supreme Court unless clearly erroneous. [For other cases, see Appeal and Error, 49314959, in Digest Sup. Ct. 1908.] [No. 58.]

[For other cases, see Maritime Liens, II. b. in Argued March 16 and 17, 1920. Decided

Digest Sup. Ct. 1908.]

[blocks in formation]

ON

N WRIT of Certiorari to the United | cific ships, the circumstances are such States Circuit Court of Appeals for that this court should imply an agreethe First Circuit to review a decree ment to create a lien on the particular which, reversing a decree of the District ships which actually used the coal, for Court for the District of Rhode Island, the coal used by each. directed the dismissal of libels asserting maritime liens. Affirmed.

See same case below, 165 C. C. A. 40, 253 Fed. 20.

The facts are stated in the opinion.

Mr. John M. Woolsey argued the cause, and, with Messrs. Frank Healy, F. C. Nicodemus, Jr., and H. Brua Campbell, filed a brief for petitioner:

The Act of June 23, 1910, affords a maritime lien for supplies furnished to a vessel, and where coal is delivered to the owner of a fleet of vessels, for distribution among the vessels of the fleet upon an express stipulation that the delivery is made upon the credit of the vessels, and not upon the credit of the owner, a lien attaches to each vessel for the coal actually distributed to and used by it.

The Yankee, 147 C. C. A. 593, 233 Fed. 919; Berwind-White Coal Min. Co. v. Metropolitan S. S. Co. 166 Fed. 782; The Kiersage, 2 Curt. C. C. 421, Fed. Cas. No. 7,762; The Cora P. White, 243 Fed. 246; The Murphy Tugs, 28 Fed. 429; McRae v. Bowers Dredging Co. 86 Fed.

344.

The Lien Act was intended to broaden and increase the security of persons furnishing supplies to vessels, not to narrow or circumscribe it; and hence should have an enlightened construction to meet modern needs.

The Oceana, 156 C. C. A. 508, Fed. 80.

The Grapeshot, 9 Wall. 129, 19 L. ed. 651; The Ella, 84 Fed. 471; The Worthington, 70 L.R.A. 353, 66 C. C. A. 555, 133 Fed. 725; The Kalorama, 10 Wall. 208, 19 L. ed. 942; The Emily Souder, 17 Wall. 666, 21 L. ed. 683; The Valencia, 165 U. S. 264, 271, 41 L. ed. 710, 713, 17 Sup. Ct. Rep. 323; The Patapsco, 13 Wall. 329, 20 L. ed. 696; The HaFed. 744, 52 C. C. Á. 415, 114 Fed. 713. vana, 54 Fed. 201; The Newport, 107

Agreements for a general lien such as was here shown have frequently had judicial approval, and the fact that the supplies have been first charged to the owner on the supplier's books has been held immaterial.

The Patapsco, 13 Wall. 329, 20 L. ed. 696; Lower Coast Transp. Co. v. Gulf Ref. Co. 128 C. C. A. 15, 211 Fed. 336; The Kate, 63 Fed. 707; The Advance, 19 C. C. A. 194, 38 U. S. App. 344, 72 Fed. 793; Astor Trust Co. v. E. V. White & Co. L.R.A.1917E, 526, 154 C. C. A. 57, 241 Fed. 57.

As between the owner of a vessel who agrees to give a maritime lien for money or supplies and the person furnishing the money or supplies on the credit of the vessel, the owner is estopped to deny that the money or supplies were actually used for the vessel.

The Worthington, 70 L.R.A. 353, 66 C. C. A. 555, 133 Fed. 725; The Mary Chilton, 4 Fed. 847; The Robert Dollar, 244115 Fed. 218; United Hydraulic CottonPress Co. v. The Alexander McNeil, 20 Int. Rev. Rec. 175, Fed. Cas. No. 14,404; The Mary, 1 Paine, 671, Fed. Cas. No. 9,187; The Yankee, 147 C. C. A. 593, 233 Fed. 919; The Kiersage, 2 Curt. C. C. 421, Fed. Cas. No. 7,762.

It is not necessary, in order to impress a maritime lien on a vessel, that the supplies be actually delivered on board the vessel by the person who supplies them.

Ammon v. The Vigilancia, 58 Fed. 698; Delaware & H. Canal Co. v. The Alida, 23 Betts' D. C. Mss. 139, Fed. Cas. No. 3,763a; The James H. Prentice, 36 Fed. 777.

An owner may by agreement, express or implied, create a maritime lien on his vessel for supplies furnished.

The Kalorama, 10 Wall. 208, 19 L. ed. 942; The Cimbria, 214 Fed. 128; The Alaskan, 142 C. C. A. 226, 227 Fed. 594; The George Dumois, 15 C. C. A. 675, 30 U. S. App. 318, 68 Fed. 926; The Fortuna, 213 Fed. 284; The South Coast, 159 C. C. A. 302, 247 Fed. 81.

Even though there had been no express agreement to furnish coal for spe

Mr. Philip L. Miller argued the cause, and Mr. Royall Victor filed a brief for respondent:

Apart from the evidence concerning the alleged agreement to give credit to the vessels, there was clearly no furnishing to the vessels within the meaning of the Act of June 23, 1910.

The Vigilancia, 58 Fed. 698; The New Federal Statute Relating to Liens on Vessels, 24 Harvard L. Rev. 182, 200; The Geisha, 200 Fed. 865, 868; The Cimbria, 156 Fed. 378; The Cora P. White, 243 Fed. 246; Ely v. Murray & T. Co. 118 C. C. A. 520, 200 Fed. 368; The Bethulia, 200 Fed. 876.

The evidence as to the alleged agree-, steamers. It owned also factories at ment for a credit to the vessels cannot Promised Land, Long Island, and Tiver serve to give petitioner a lien under theon, Rhode Island, to which the fish caught Act of 1910.

The Vigilancia, supra; The Cimbria, 156 Fed. 378.

were delivered and at which its vessels coaled. When the fishing season of 1914 opened, the company was financially emThe record does not permit petitioner barrassed. Its steamers and factories had to claim a nonstatutory lien under an been mortgaged to secure an issue of express contract of general maritime bonds. Bills for supplies theretofore furhypothecation. The evidence is insuffi- nished remained unpaid. The company cient to establish any such contract. had neither money nor credit. It could Even if such a contract had been made, not enter upon the season's operations it would not have created a maritime unless some arrangement should be made lien on the vessels. to supply its vessels and factories with Astor Trust Co. v. E. V. White & Co. coal. After some negotiations, the PiedL.R.A.1917E, 526, 154 C. C. A. 57, 241 mont & George's Creek Coal Company, Fed. 57; The Cora P. White, 243 Fed. then a creditor for coal delivered during 246; Munn v. The Columbus, 65 Fed. the year 1913, agreed to furnish the Oil 430; The Knickerbocker, 83 Fed. 843; Corporation such coal as it would require The Alligator, 161 Fed. 37; The New- during the season of 1914,-the underport, 52 C. C. A. 415, 114 Fed. 713; standing of the parties being that the Plummer v. Webb, 4 Mason, 388, Fed. coal to be delivered would be used by the Cas. No. 11,233; The James T. Furber, factories as well as by the vessels, that 129 Fed. 812; The Allianca, 65 Fed. the greater part would be used by the 245; The Advance, 71 Fed. 987; The vessels, that the law would afford a lien Cimbria, 156 Fed. 378; Berton v. Tiet- on the vessels for the purchase price of jen & L. Dry Dock Co. 219 Fed. 763; the coal, and that the Coal Company The Harvey & Henry, 30 C. C. A. 330, would thus have security. Shipments of 57 U. S. App. 41, 86 Fed. 657; Pacific coal were made under this agreement Surety Co. v. Leatham & S. Towing & from time to time during the spring and Wrecking Co. 80 C. C. A. 670, 151 Fed. summer, as ordered by the Oil Corpora440; The Pennsylvania, 83 C. C. A. 139, tion. In the autumn receivers for the 154 Fed. 9; Diefenthal v. Hamburg- corporation were appointed by the disAmericanische Packetfahrt Actien-Ge-trict court of the United States for the sellschaft, 46 Fed. 397; Steamship district of Rhode Island, and later a suit Overdale Co. v. Turner, 206 Fed. 339. was brought to foreclose the mortgage By dispensing with the necessity of upon the vessels and factories. At the proving credit to vessels the Act of time the receivers were appointed five 1910 at once enlarges the scope of mari- cargoes of coal, shipped under the above time liens and simplifies the law. To agreement, had not been paid for. The dispense with the necessity of a mari-Coal Company libeled twelve of the steamtime delivery would throw the law into ers, asserting maritime liens for the price confusion and open the door to many and value of either all the coal, or of such fraudulent and collusive claims. Maritime liens are stricti juris. The petitioner's complaints of the hardship of the decision below are the complaints of a favorite of the law asking for further favors. The hardships, moreover, are largely fanciful.

parts as had been used by the libeled vessels respectively. [6] Meanwhile, the vessels were sold under the decree of foreclosure. The Seaboard Fisheries Company became the purchaser, and, intervening as claimant in the lien proceedings, denied liability. The district court The Larch, 2 Curt. C. C. 427, Fed. Cas. held that the Coal Company had a mariNo. 8,085; Munn v. The Columbus, 65 time lien on each vessel for the coal reFed. 430; Prince v. Ogdensburg Trans-ceived by it. The William B. Murray, it Co. 107 Fed. 978; The Aurora, 194 240 Fed. 147. The circuit court of apFed. 559; The Dredge A, 217 Fed. 617; peals reversed these decrees with costs Astor Trust Co. v. E. V. White & Co. and directed that the libels be dismissed. L.R.A.1917E, 526, 154 C. C. A. 57, 241 The Walter Adams, 165 C. C. A. 40, 253 Fed. 57; The Cora P. White, 243 Fed. Fed. 20. Then this court granted the 246. Coal Company's petition for a writ of certiorari. 248 U. S. 556, 63 L. ed. 419, 39 Sup. Ct. Rep. 12.

[5] Mr. Justice Brandeis delivered the opinion of the court:

As to the facts proved, there is no disThe Atlantic Phosphate & Oil Corpora- agreement between the two lower courts. tion owned a fleet of nineteen fishing The substantial question presented is

whether these facts constitute a furnish- | Land-which received four of the five ing of supplies by the Coal Company to shipments the bins already contained the vessels upon order of the owner, other coal (1,068 tons) which had been within the provisions of the Act of June theretofore purchased by the Oil Cor23, 1910 (chap. 373, § 1, 36 Stat. at L. poration and had been paid for. With 604, Comp. Stat. § 7783, 9 Fed. Stat. this coal on hand that delivered by libelAnno. 2d ed. p. 346).1 That coal was lant was commingled. At each plant both furnished to the vessels to the extent to the vessels and the factory were, from which they severally received it on board time to time, supplied with coal from the is clear. The precise question, therefore, same bins; but the greater part of the is: Was the coal furnished by the libel- coal supplied from each plant was used lant, the Coal Company, or was it fur- by the vessels. Weeks, and in some innished by the Oil Corporation, the owner stances months, elapsed between placing of the fleet? In determining this ques- the coal in the bins and the delivery of it tion additional facts must be considered: by the corporation to the several vessels. No coal was delivered by the Coal Com- When it made such deliveries it furnished pany directly to any vessel; and it had coal to the vessels, as it did to the facno dealings of any kind concerning the tories, not under direction of the Coal coal directly with the officers of any ves- Company, but in its discretion, as owner sel. All the coal was billed by the Coal of the coal and of the business. Company to the Oil Corporation, and The quantity of coal delivered to each there was no reference on any invoice, vessel was [8] proved; but to what or on its books, either to the fleet or to extent the coal supplied to the sevany vessel. There [7] was no under-eral vessels which bunkered at Promstanding between the companies when ised Land came from the 1,068 tons the agreement to supply the coal was previously purchased, and to what exmade or when the coal was deliv- tent it came from the lots purchased ered that any part of it was spe- from the Coal Company, it was imcifically for any one of the several possible to determine. In making the vessels libeled, or that it was for any computations which formed the basis of particular vessel of the fleet, or even the decrees in the district court it was for the vessels then composing the assumed that of the coal supplied to the fleet. Indeed, the first shipment was several vessels which bunkered at Promstated on the invoice to be "coal for fac-ised Land, a proportionate part of that tory." The negotiations of the Oil Cor- received by each had come from the coal poration with the Coal Company did not purchased from libellant. relate to coal required at that time by the particular vessels subsequently libeled, as distinguished from other vessels of the fleet.

The coal was sold f. o. b. at the Coal Company's piers, which were at St. George, Staten Island, and Port Reading, New Jersey. At these piers it was loaded on barges, which were towed either to the Oil Corporation's plant at Promised Land, or to that at Tiverton. Some of these barges were supplied by the Oil Corporation, some by the Coal Company. If supplied by the latter, trimming and towing charges were added to the agreed price of the coal. Upon arrival of the coal at the factories, it was placed in the Oil Corporation's bins. At Promised

1 Act of June 23, 1910, chap. 373, § 1: "Any person furnishing repairs, supplies, or other necessaries, including the use of dry dock or marine railway, to a vessel, whether foreign or domestic, upon the order of the owner or owners of such vessel, or of a person by him or them authorized, shall have a maritime lien on the vessel which may be enforced by a proceeding in rem, and it shall not be necessary to allege or prove that credit was given to the vessel."

100

The Coal Company contends on these facts that it furnished necessary supplies to the several ve vels within the meaning of § 1 of the Act of June 23, 1910. But the facts show that no coal was furnished by that company to any vessel "upon order of the owner." The title to the coal had passed to the Oil Corporation when it was loaded on board the barges at the Coal Company's piers. It was delivered to Promised Land and Tiverton as the Oil Corporation's coal, and placed in its bins. As its coal the later distribution was made in its discretion to vessels and factories. A large part of the coal so acquired by the Oil Corporation for use in its business was subsequently appropriated by it specifically to the use of the several vessels vessels of the fleet was a use which had of the fleet, and this use of the coal by been contemplated by the parties when it was purchased. But the fact that such a use had been contemplated does not render the subsequent appropriation by the owner a furnishing by the coal dealer to the several vessels.

To hold that a lien for the unpaid purchase price of supplies arises in favor

maritime liens would have arisen and could have been established under the statute without proof that credit was given to the vessels. Since the libellant did not furnish any coal to the vessels, the erroneous belief of the parties that the law would afford a lien either for all the coal furnished to the Oil Corporation, or for that delivered by it to the several vessels, could not create a lien under the statute. Clearly no maritime lien could arise therefrom, valid as against the claimant, which had acquired title to the vessels under a mortgage antedating the purchase. Astor Trust Co. v. E. V. White & Co. L.R.A.1917E, 526, 154 C. C. A. 57, 241 Fed. 57.

of the seller merely because the purchaser, afford a lien on the vessels for the coal, who is the owner of a vessel, subsequently is, in this controversy, without legal sigappropriates the supplies to her use, nificance. If the coal had been furnished would involve abandonment of the prin- to the several vessels by the libellant, ciple upon which maritime liens rest, and the substitution therefor of the very different principle [9] which underlies mechanics' and materialmen's liens on houses and other structures. The former had its origin in desire to protect the ship; the latter mainly in desire to protect those who furnish work and materials. The maritime lien developed as a necessary incident of the operation of vessels. The ship's function is to move from place to place. She is peculiarly subject to vicissitudes which would compel abandonment of vessel or voyage, unless repairs and supplies were promptly furnished. Since she is usually absent from the home port, remote from the residence of her owners, and without any large amount of money, it is essential that she should be self-reliant, that she should be able to obtain upon her own account needed repairs and supplies. The recognition by the law of such inherent power did not involve any new legal conception, since the ship had been treated in other connections as an entity capable of entering into relations with others, of acting independently, and of becoming responsible for her acts. Because the ship's need was the source of the maritime lien, it could arise only if the repairs or supplies were necessary; if the pledge of her credit was necessary to the obtaining of them; if they were actually obtained; and if they were furnished upon her credit. The mechanic's and materialman's lien, on the other hand, attaches ordinarily although the labor and material cannot be said to have been necessary; although at the time they were furnished there was no thought of obtaining security upon the building; and although the credit of the owner or of others had in fact been relied upon. The principle upon which the mechanic's lien rests is, in a sense, that of unjust enrichment. Ordinarily, it is the equity arising from assumed enhancement in value resulting from work or materials expended upon the property without payment therefor which is laid hold of to protect workmen and others who, it is assumed, are especially deserving, would ordinarily fail [10] to provide by agreement for their own protection, and would often be unable to do so.2

The difficulty which confronts the Coal Company does not lie in the fact that the contract for the coal was made with the Oil Corporation. A vessel may be made liable in rem for supplies, although the owner can be made liable therefor in personam; since the dealer may rely upon the credit of both. The Bronx, 159 C. C. A. 111, 246 Fed. 809. Likewise, the fact that the coal which was supplied to the several vessels had been purchased under a single contract presents no difficulty. For, while one vessel of a fleet cannot be made liable under the statute for supplies furnished to the others, even if the supplies are furnished to all upon orders of the owner under a single contract (The Columbus, 65 Fed. 430, 14 C. C. A. 522, 28 U. S. App. 399, 67 Fed. 553; The [11] Newport, 52 C. C. A. 415, 114 Fed. 713; The Alligator, 88 C. C. A. 201, 161 Fed. 37; Astor Trust Co. v. E. V. White & Co. L.R.A.1917E, 526, 154 C. C. A. 57, 241 Fed. 57, 61), each vessel so receiving supplies may be made liable for the supplies furnished to it (The Murphy Tugs, 28 Fed. 429). The difficulty which, under the general maritime law, would have blocked recovery by the Coal Company, is solely that it did not furnish coal to the vessels upon which it asserts a maritime lien; and there is nothing in the Act of June 23, 1910, which removes that obstacle.

It is urged by the Coal Company that it was the intention of Congress in passing the act to broaden the scope of the maritime lien, and that the construction The fact found by the lower courts, of the act adopted by the circuit court of that the parties understood the law would appeals renders the statute inoperative in

2 Compare Van Stone v. Stillwell & B. | Warner, 4 Watts & S. 223, 226; Bolton v. Mfg. Co. 142 U. S. 128, 136, 35 L. ed. 961, Johns, 5 Pa. 145, 150, 47 Am. Dec. 404; 964, 12 Sup. Ct. Rep. 181. See O'Conner v. |Taggard v. Buckmore, 42 Me. 77, 81; Buck

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